Australia's Elmo Software confirms Accel-KKR interest
Elmo Software, an Australia-listed provider of cloud-based human resources and payroll software solutions, has emerged as a target for private equity investors, including Accel-KKR.
The company said in a filing that it had been approached by numerous parties – naming Accel-KKR specifically – and was in discussions with certain groups “in the context of maximising shareholder value.” Its stock, having seen a steep drop in September, jumped 28% on October 13 to close on AUD 3.09. Elmo has a market capitalisation of approximately AUD 300m (USD 189m).
Investor interest in software opportunities in Australia has crystalised into numerous take-private offers in recent months. In July, Damstra Technology, a software-as-a-service (SaaS) provider specialising in worker safety and risk management, received an unsolicited buyout proposal from Accel-KKR.
The HR software segment – across administration, engagement, and learning – has seen plenty of deal flow in recent years. The likes of Employment Hero, Go1, and Culture Amp have raised growth rounds at progressively higher valuations, while the sale of payroll specialist Ascender delivered a sizeable return for Potentia Capital and Five V Partners.
Founded in 2002, Elmo claims to offer a comprehensive suite of customisable cloud HR, payroll, and rostering solutions, accessible via a single dashboard and single user interface. The goal is to streamline processes with a view to increasing productivity and efficiency and reducing costs. Its brands include PeoplePulse, Pivot, HROnboard, Vocam, Webexpenses, and BreatheHR.
Revenue – most of it generated by corporate customers in Australia, New Zealand, and the UK – reached AUD 91.4m in the 12 months ended June 2022, up from AUD 69.1m a year earlier. Annualised recurring revenue, which is nearly all subscription-based, rose from AUD 83.8m to AUD 108.2m.
Elmo’s underlying EBITDA was AUD 7.1m, up from AUD 600,000, but its net loss widened from AUD 37.6m to AUD 76.8m.
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