Everfield, a Germany-headquartered vertical and specialist software-focused investor, is looking to acquire smaller B2B software companies across EU markets, Head of Acquisitions Henning Schreiber said.
Everfield expects to be active on the acquisition front in 2023, with a focus on CEE and Southern Europe, Schreiber said. The company now has people on the ground in Germany, Poland and the Baltics and expects to open additional offices in France and Spain in January and in the Netherlands in 2Q23, he said.
It operates alongside sister companies, ClearCourse, which focuses on the UK market, and Cordance and Fullsteam, which are active in North America. All four act as independent portfolio platforms, backed by sponsor Aquiline Capital Partners, with the group having built up a portfolio of 100-plus software businesses in total so far, Schreiber said.
Everfield targets controlling positions, typically 100%, in companies with recurring annual revenue of at least EUR 1m and up to around EUR 8m, and pays for deals all in cash, Schreiber said. It focuses on identifying companies that have their own IP and possess high-quality software solutions, such as mission-critical or value-added products tailored to a specific market (e.g. HR, finance/accounting, Enterprise Resource Planning, Customer Relationship Management Manufacturing Execution Systems), he said. It often works with owners who are looking for a path toward succession or are seeking additional capital and strategic support to grow their businesses, he said.
It does not pursue start-ups, restructuring situations or software resellers, Schreiber said. It generally won’t go after outsourced software developers either, although it might at some point selectively pursue a small number of such firms in order to support its other portfolio companies, he added.
The businesses acquired by Everfield retain their independence and standalone status, but Everfield helps them scale up further through product development, sales growth strategies and international expansion, Schreiber said. An example of such an approach is Everfield’s first transaction, the investment into Latvian medical practice management systems developer Blue Bridge Technologies, acquired in early November with a view of “building a larger healthcare ecosystem around it,” he said.
Everfield’s management team has considerable experience and expertise in developing software companies, Schreiber said, pointing to CEO Scott Saklad, a 25-year software industry veteran and COO Marcin Szelag, with 16 years’ worth of software experience.
Owners are asked to stay on board for a three-to five- year period and work with Everfield on succession planning, Schreiber said. A company performance-based incentive scheme is put in place to let the former owner continue to participate in the growth, he said.
Everfield typically sources investments by leveraging its existing network, meeting companies at trade shows or screening the market for interesting prospects and then contacting the owner, Schreiber said. It also listens to proposals from advisors, but it generally tries to avoid auctions due to the time pressure and the difficulty in gaining direct, in-depth insight into these businesses and their management teams, he said.
By Jure Maczynski in Warsaw, Mergermarket