Investment in leading global procurement software business
International private equity firm, Cinven, today announces that it has agreed to a significant investment in Jaggaer, a global provider of procurement software for large and medium-sized enterprises. Alongside Cinven, Accel-KKR will maintain an interest in Jaggaer.
Headquartered in Research Triangle Park, North Carolina, Jaggaer provides cloud-based Source-to-Pay eProcurement solutions for spend management, which enables a fluid supply chain for its customers, driven by powerful spend analytics, vendor sourcing, contract lifecycle management, savings tracking, and efficient accounts payable systems on a single platform. Jaggaer’s international office network spans the Americas, APAC and EMEA and serves more than 2,000 customers across a broad range of sectors. Through its network of c. 4 million suppliers across 70 countries globally, Jaggaer supports some of the largest commercial, manufacturing and life sciences companies in the world to manage billions of dollars of annual spend. Blue-chip customers include McDonald’s, DHL, Merck, Rolls-Royce and SABMiller, as well as leading academic and public sector institutions.
Building on its successful investment in Visma, a Software as a Service (‘SaaS’) provider, Cinven’s Technology, Media and Telecom (‘TMT’) Sector team worked closely with its US Regional team to identify Jaggaer as an attractive investment opportunity, given:
- the strong underlying structural growth trends in the global procurement software market, driven by increased adoption of spend management software tools;
- the quality and breadth of Jaggaer’s proprietary SaaS Source-to-Pay software platform, JAGGAER ONE, which delivers market-leading capabilities in both upstream and downstream spend management across direct and indirect spend;
- Jaggaer’s best-in-class reputation with its customers, evidenced by its market-leading customer retention rates;
- Jaggaer’s strong track record of growth, both organically and through buy and build, with a number of businesses successfully acquired and integrated in recent years; and
- Jaggaer’s excellent leadership team, led by CEO Robert Bonavito, with decades of experience in enterprise software.
Chris Good, Partner at Cinven and Co-Head of Cinven’s TMT Sector team, said:
“Cinven is excited to have the opportunity to invest behind the outstanding Jaggaer team. As a growing and profitable spend management software business with a very strong track record, and following a number of successful acquisitions, the business is poised for continued significant growth.
“Cinven intends to support Jaggaer management’s ambitions to drive growth through investment in R&D; building on market-leading products, such as the recently launched JAGGAER ONE platform; as well as making further acquisitions in the future.”
Michael Korzinstone, Senior Principal at Cinven, added:
“Cinven’s investment in Jaggaer shows how effectively our Sector and Regional teams work together to identify successful target businesses in growth subsectors. We developed our investment thesis following a subsector review of the global Supply Chain Management software industry, which identified Jaggaer as a highly attractive and market-leading business.
“Given the positive underlying return on investment that Jaggaer’s customers are able to generate, we are confident that corporations will continue to find value in partnering with Jaggaer to manage their procurement spend and identify cost savings across their businesses.”
Robert Bonavito, CEO of Jaggaer, commented:
“Spend management software provides granular, actionable data at all levels, which not only enables accurate profit assessment, but also helps with forecasting. We are seeing increased demand from businesses looking to manage their procurement spend more effectively. We have also been successful in developing our products to better serve our customers, such as using Artificial Intelligence, machine learning and even predictive order management technology.
“We are delighted to be partnering with the Cinven team, who have impressed us with their knowledge of the market and ability to work with companies like ours to expand geographically as well as invest in R&D and product development to drive growth.”
Cinven’s investment in Jaggaer builds on its strong track record in TMT, following its successful realisations of Visma, a leading business solutions provider, in May 2019; Ufinet Group, a provider of fibre infrastructure and transmission services to telecom operators, in July 2018; and HEG, a provider of hosting and domain services, in April 2017.
Alongside these realisations, Cinven has continued to actively invest in the sector, most recently acquiring RTB House, a global digital advertising technology provider, and One.com, a leading European web hosting provider.
This transaction represents Cinven’s third investment in the US, a region where the firm is focused on the TMT and Healthcare sectors. Cinven successfully realised its investment in US-headquartered Medpace, a global contract research organisation (‘CRO’), in August 2018.
The transaction is subject to customary regulatory and anti-trust approvals.
Advisors to Cinven on the transaction included: UBS Securities LLC, Latham & Watkins LLP and Deloitte LLP.
Advisors to Accel-KKR included: Goldman Sachs & Co. LLC, Stifel and Kirkland & Ellis LLP. Goldman Sachs & Co. LLC and UBS Securities LLC are also providing committed financing for the transaction.