Potentia exits Australia SaaS provider to UK strategic
Australia’s Potentia Capital has exited compliance software-as-a-service (SaaS) supplier CompliSpace to UK-based Ideagen for about A$110 million ($81 million) after a less-than-two-year hold.
Ideagen will provide A$105 million upfront plus a deferred conditional earnout payment of up to A$5 million. Potential acquired the company in January 2020 for an undisclosed sum. The private equity firm closed its debut fund at about A$400 million last December.
Founded in 2007, CompliSpace provides governance, risk and compliance management SaaS to private and public sector customers. Operations focus on the education and social care sectors where Ideagen sees globally compelling structural growth tailwinds. There are more than 950 clients in Australia including around 730 schools and 135 aged care facilities.
CompliSpace recorded revenue of A$15.4 million and a pre-tax loss of $$3.6 million for the 2021 financial year. Its annualized pro forma revenue of A$19.0 million - of which 88% is recurring - has grown by 20% over the last 12 months.
The earn-out is dependent on 20% per annum recurring revenue growth over the next 24 months. This would take overall recurring revenue to A$23.5 million by the second anniversary of acquisition.
“We see a significant opportunity to leverage CompliSpace's Australian footprint with our existing product suite, whilst also expanding its customer base into Europe and North America,” Ben Dorks, CEO of Ideagen, said in a statement. “The acquisition reinforces our strategy of supporting customers operating in highly regulated environments with high quality software solutions across a range of platforms.”
Potentia was established by Andrew Gray, formerly of Francisco Partners and Archer Capital, and ex-MYOB CEO Tim Reed in 2016 to fill a perceived funding gap in Australia’s mid-market technology space. Other recent exits include the sale of payroll software provider Ascender to US-based Ceridian for around $500 million.
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