Software firm Proactis is to buy Dutch firm Esize for up to £13.5m in a deal which will be immediately earnings enhancing.
Wetherby-based Proactis said Esize is a recognised territory leader in the Netherlands for its cloud-based spend management solutions.
Proactis said the deal will give it additional capabilities in the travel and expense management and contract labour markets. These are two markets which are adjacent to, and of an equivalent size to, Proactis’ core indirect product procurement proposition.
Esize has 60 customers across the private and public sectors and employs 50 people. Its recent growth rates have been above 10 per cent a year and it has comparable profitability margins to Proactis.
The acquisition will also benefit Proactis by creating a scaled operation in The Netherlands, where it will consolidate its existing operations. It will also allow it to access growth opportunities through the cross-selling of complementary capabilities to both customer bases.
Proactis also gave an update on current trading, saying it has signed up 64 new customers over the past year with a total initial contract value of £8.7m. The firm expects to report revenue of £52m and earnings of £17m for the year to July 31.
Hamp Wall, CEO of Proactis, said: “I am encouraged by the expected out turn for the year, particularly with regard to underlying growth driven by the rate and value of new deal intake and upselling activity which are key indicators of the relevance of our solutions and our ability to sell. I am optimistic that this will continue for the foreseeable future and that we are confident of returning to normalised levels of growth and churn into 2019.
Talking about the Esize deal, he said: “Acquisitions are a key part of our group’s growth strategy and Esize perfectly satisfies our acquisition criteria. We are excited by this growing, profitable and cash generative business that brings with it a scaled operation in a key new North West European geography, a SaaS/cloud-based business model delivering security over forward revenues and an additive technology stack.“
He said that Esize has a strong management team, which will join the enlarged group.
“As well as the immediate benefits, we believe there will be significant cross sell opportunities across both customer bases,” he added.