A corporate merger or acquisition can have an intense effect on a company’s growth prospects and long-term outlook. And the same happened when Jaggaer acquired Bravo Solution.
About Jaggaer and BravoSolution
Jaggaer founded in 1995 as SciQuest, was publicly listed until acquired by the private equity firm Accel-KKR in July 2016, is today the world’s largest independent spend management company, with almost 2000 customers from 70 countries linked to a group of 3.7 million suppliers, served by offices located in North and Latin America, Europe, Australia, Asia, and the Middle East.
Previously focusing on catalog-based P2P solutions for the US higher education, government and healthcare sectors, Jaggaer has been gradually broadening its appeal via acquisitions like AECsoft in 2011 (sourcing), Spend Radar (spend analysis) and Upside Software (CLM) in 2012; and CombineNet (a leader in sourcing optimization) in 2013. In November 2017, the company announced the acquisition of Bravo Solution from Italmobiliare. Bravo Solution which was founded in 2001, employing 650 people and generating revenue of $90m in 2016. Jaggaer Officially became the world’s largest independent spend management solutions company with the completion of the acquisition of BravoSolution.
Jaggaer offers complete SaaS (Software as a Service) based Source-to-Pay eProcurement solutions with advanced Spend Analytics, Savings Tracking, Sourcing, Supplier Management, Contract Lifecycle Management, and smart workflow abilities. Jaggaer solution suites are trusted by the world’s largest manufacturing, education, health care, retail, consumer package goods, logistics, construction, utility companies and public service organizations. BravoAdvantage is the strategic e-procurement platform which generates more value, influence innovation and reduces risk in any organisation. It provides the visibility, insight and transparency required to power and improves your procurement initiatives. It provides key features like Asset Management, Expense Management, Supplier and Purchase Order Management, Supplier Management, Budget Management, Data Management, Sourcing Management and Spend Management.
Jaggaer is ranked number one in Higher Education, Life Sciences/Pharma, & Discrete Manufacturing, they are Leader in Indirect and Direct Procurement Suites, top vendor for Sourcing Optimization, Chemical Inventory Management, most number of e-Procurement Patents (38), cited as a ‘Visionary & Challenger’ by Gartner, and top ePurchasing suite by Forrester. Similarly, Bravo Solution is top vendor for public sector in Europe having strong focus in Construction and Oil & Gas, top vendor for Global Customer Service, Spend Analytics, and Sourcing, provide certified solutions for IT Services Management (ISO 20000-1), Security (ISO 27001), and Business Continuity (ISO 22301), and cited as a ‘Leader’ by Gartner.
Although the financial terms of the merger transaction were not disclosed, according to Spend Matters, the deal was done around a 2.5 times to 4 times multiple-range (trailing revenues) than the 10 times or higher valuation range attributed to Coupa and other faster growing cloud-based firms in such private funding mergers.
Implications from merger
The focus of the acquisition seems to be to tap into the widely different client bases for both providers, and the potential to expand into a larger range of vertical markets. On one hand, BravoSolution has a number of public sector clients and known construction, utilities, gas and oil as target areas, while on the other hand, Jaggaer has a strong presence among pharmaceutical and discrete manufacturing companies. The drive to provide both direct, and indirect, procurement for a wider range of verticals seems to be the principal vision underpinning the move. The activities within both the organizations and their technologies are most frequently deployed to support overlap significantly, with both solutions focusing predominantly on eSourcing. The company claims that it will boost the company to the second-largest procurement technology vendor by revenue. With BravoSolution’s customers primarily based in Europe, and Jaggaer’s significant US customer-base, the reach of the newly-formed firm in two key procurement technology markets is one to watch.
The world’s most widespread indirect and direct Source-to-Pay solutions suites join together with BravoSolution to jointly form the only global eProcurement company which is confident to produce comprehensive, innovative and vertically focused indirect and direct solutions powered for and by our customers to compete and win in their respective industries. Direct solutions, on one hand, include sectors like Automotive, Manufacturing, Plant Engineering, Consumer goods and Medical technology; the indirect solutions, on the other hand, include sectors like Education, Manufacturing, Distribution, Life Science, Healthcare, Retail, Consumer Products, Oil and Gas, Public Sector and Construction.
“The combination of BravoSolution and Jaggaer creates a powerhouse in the global spend management space and represents the execution of our strategy to build a Super Suite of fully integrated spend management solutions. As per the CEO of Jaggaer, this acquisition will enable the largest companies in the world to do business with a single partner and cover all of their spend management needs. We have best of the breed; fully developed solutions for multiple vertical industries delivering value across the full spectrum of spend types. He says that with the company’s size, financial stability, and expanded infrastructure they can further accelerate product innovation and bring customer value across a vast swath of geographies and industries,” says Robert Bonavito, CEO of Jaggaer.
Jim Wetekamp, CEO of BravoSolution says Jaggaer is a bold company on an aggressive growth path. He also states that the combined and merged entity will deliver greater opportunities for both customers and employees. The grouping will also allow increased innovation and provide a foundation for procurement digitalization that will set the trends and benchmarks for the entire industry.
These are some thoughts from analysts Jason Busch and Pierre Mitchell upon the acquisition:
- The industry-based go-to-market approach will be key in differentiating the combined provider in the market.
- In the manufacturing area, the combined firm will be the definite functional/solution leader on an overall suite basis, outside of procure-to-pay (P2P).
- This will be an as comparable size to SAP Ariba, as well as the Europe/U.S. synergy of the two firms and is a giant acquisition firm in the procurement technology sector.
With more than a decade experience implementing almost a Full Upstream Suite (VRM, e-Sourcing, Spend Management etc.) wisely covering processes in Indirect sourcing categories (especially in Technical Sourcing area) at Global Level and some spotlights in Direct area (Transportation, Packaging function) can easily represent the close and strategic relationship built up together with Jaggaer / BravoSolution, a trusted, highly-competent, entitled Partner. The merger encloses perfectly business and functional knowledge, understanding, and even anticipating, customer needs and in implementing concrete highly-value IT solutions, guiding decision making gives final success to the acquisition.