SEH hotels covers over 600 properties across 12 countries...
"SEH United Hoteliers Group Selects Perfect Commerce, a PROACTIS Company, for Major Online Marketplace Project
SEH to improve purchasing strategy with new cloud-based services
Perfect Commerce, a PROACTIS company and global Spend Control and eProcurement provider, today announced that it has been selected by SEH United Hoteliers (SEH) to deploy its cloud-based eProcurement platform in Europe.
The project will enable SEH Groups purchasing organisation to offer new online services to its hoteliers, while increasing the efficiency of its purchasing strategy. The group decided to create a marketplace to allow all hotel owners, both within and outside the group, to make more intelligent purchases with increased transparency. This emphasises the groups loyalty to independent hoteliers.
Perfect Commerce was chosen due to its experience with similar projects, international scope and ease of use. The SEH team was particularly drawn to the user-friendly and intuitive eProcurement and Catalogue Management solutions: With Perfect Commerce, SEH will be able to guide its members towards a new stage of digital transformation by offering an online service for all purchases on a digital platform, says David Esseryk, Chief Digital and Marketing Officer, SEH United Hoteliers.
Implementing the purchasing marketplace will better serve our hoteliers and provide a 100% online service with a single-order basket, added Elisabeth Meulle, Head of the Group Purchasing Organisation.
The new service will be available to all hotel owners from Spring 2018 and will be rapidly deployed. The Software-as-a-Service (SaaS) model and supplier recruitment services, exclusively offered by Perfect Commerce, are key factors in fast and efficient implementation.
We are proud of the trust SEH has placed in us, stated Martial Gerardin, Managing Director, Europe for Perfect Commerce. It is a recognition of our experience and the excellence of our solutions.
PROACTIS strengthens global presence with 35 customer wins in new and core markets
March 06, 2018 06:56 AM Eastern Standard Time
WETHERBY, England--(BUSINESS WIRE)--PROACTIS, a global Spend Control and eProcurement solution provider, today released details of a series of new multi-national projects that highlight the company is gaining traction in its new and core markets around the world, due to its widening solution portfolio and dedicated commercial teams following the merger with Perfect Commerce.
Building on a successful financial year ending July 2017 and a business transformative acquisition during August 2017 which doubled the size of the Group, PROACTIS continues to see significant strength for business transformation initiatives across a wide variety of vertical sectors. Organisations are adopting the latest digital technologies to support improved savings, productivity and responsiveness, while reducing risk.
Some of these new customers include:
Over 15 Councils and Government agencies are using PROACTIS to transform their spend management and eCommerce processes.
An East Coast American University has selected PROACTIS to help consolidate purchasing processes across multi-site locations and to leverage its buying power.
A large hospitality group in France, running 600 independent hotels throughout continental Europe, is implementing PROACTIS to bring operational efficiencies to hotel members and transform procurement.
A US State Government organisation supporting 50-plus state agencies and schools and a population of more than one million people has selected the PROACTIS end-to-end eProcurement platform.
A UK Not-for-Profit organisation is using PROACTIS to streamline its purchasing, invoicing and expense processes to support straight-through processing efficiencies.
A Netherlands-based global financial institution is using PROACTIS to extend its strategic sourcing to Germany and Turkey.
A leading healthcare management company based in the UK is implementing PROACTIS to support growth by ensuring operational efficiency and rigorous spend management practices.
A global legal firm selected PROACTIS to gain better visibility and control of spend across the entire organisation, especially for its significant IT spend.
A large US restaurant chain is using PROACTIS Sourcing Services to expand its procurement capacity and achieve greater savings across a wide range of direct and indirect categories.
A bank based in Belgium, that also operates in the Netherlands and Luxembourg, has selected PROACTIS Source-to-Contract solutions to maximise efficiency, control and cost savings across its procurement processes.
These new customer successes show great progress for the group, and prove PROACTIS is truly building a platform for growth. PROACTIS already helps over 1,000 organisations around the world to transform the way they do business, in ways that add the greatest bottom-line value for them, while improving the way buyers and suppliers engage and interact.
Hamp Wall, Chief Executive Officer at PROACTIS, said: 2017 was a transitional and very successful year for PROACTIS and we have already hit the ground running this year. Our success is built on significant investment in the business and our people to ensure that we continue to provide the highest levels of service for our customers so that they gain and sustain value. Recent growth has been fuelled by the increasing awareness among companies that significant savings and greater efficiencies are possible through better spend management practices.
PHD presented at Sharesoc last month, and there's an interesting summary in this month's Sharesoc newsletter which is just out today:
This is an interesting situation in that Proactis is the result of a recent merger between itself and an equivalent company called Perfect Commerce. According to new
CEO Hamp Wall these businesses were extremely complementary, despite appearing to be competitors, and so the combination is the best of both their operations. So
after a period of consolidation where employee numbers were rationalised, and some office locations/data centres closed, a recent trading update shows adjusted EBITDA
to be up by >100% with 35 new labels won in the half year (I take labels to be the equivalent of customers).
However a lot of this growth is down to the acquisition itself and thats a pattern which Hamp Wall intends to continue as Proactis seeks to consolidate the industry and grow by 25-30% pa (inc. organic growth of 10%). This is a reasonable ambition as Proactis is now the 5th biggest player by revenue (2nd largest by profit) behind SAP Ariba and there are lots of small players in the market.
As for what Proactis does its an intermediary between suppliers and customers. They have a SaaS cloud platform that hosts a large number of suppliers (~2 million)
and connects them to around 1000 customers (half private and half public). The customers benefit from organised supplier negotiation (eSourcing), with full auditing, along with eProcurement when they actually buy from a selected supplier using the network/transaction layer which Proactis supply. In addition to directly benefiting their customers Proactis also monetise their supplier pool by helping them to work effectively with customers.
So you can see why this is a business that benefits from scale as larger numbers of customers/suppliers feed back in a loop that benefits everyone.
In Hamp Walls words (and he seems very positive about the future) they are now a global player with a full solution suite in a growth market. They can also self-fund tuck-in acquisitions, rather than raising money in the market every time, and are one of the few PCI-compliant firms which means that they can hold credit card data.
With a prettier system in place I can see why recurring revenue visibility of >80%, with EBITDA margins at >30%, should allow them to hit their target of £100m in sales (from £55m now) and so achieve the level of profit growth pencilled in by analysts. The only problem is that organic growth is hard to discern in a bolt-on business and it seems that the underlying Proactis arm only managed ~8% in this half-year with the underlying Perfect Commerce being largely flat - so itll take a bit of work to meet the overall 10% organic growth target. Still given Hamp Walls track record Im sure that hell get there in the end."
It's good to see the £5m of post-acquisition cost synergies well on track.
The outlook is terrific:
"The rate and value of new customer wins and cross-selling activity has been strong in comparison with the prior year on a like for like basis and there was also a healthy contribution of new customer wins from Perfect. The Group's order book and pipeline remain encouraging for the remainder of the year."
I can see Finncap's 250p target being met reasonably quickly once the market gets to grips with PHD's potential, recurring income etc.
If this statement isn't waving a "BUY PHD NOW" flag I don't know what else they could do to get the message across.
"We are extremely excited about the next six months and beyond. Not only are we confident in our continued ability to execute the integration effectively, but I believe there is a substantial value creation opportunity for the Group generally but, more specifically, within the supplier community of our customer base through both networking and our accelerated payment facility."
N+1 Singer have increased their price target to 226p and their EPS forecasts considerably as follows:
"We have upgraded our forecasts following the completion of the acquisition of
Perfect Commerce for up to $132.5m. This transformational deal positions the
enlarged PROACTIS group as the sixth largest pure-play provider of ePurchasing
solutions globally, as well as one of the fastest growing and most profitable. The
commercial and operational synergies arising from this combination are
considerable and warrant the acquisition multiples paid (max. 3.4x est. FY 2018
revenue and 19.0x est. EBITDA). Our FY 2018 group revenue, EBITDA and EPS estimates
increase by 105%, 119% and 18% respectively. We raise our target price from 201p to
226p and reiterate our Buy recommendation."
FYI, here's Finncap's summary of the Perfect Commerce acquisition when they raised their target price to 250p:
Subject to General Meeting, Proactis has undertaken a £70m placing and £99m acquisition of Perfect Commerce, a US-based spend management solution provider. The increased scale offers enhanced growth opportunities, extending current UK focus deeper into the US, and mainland Europe; broadens the tier 2 customer base into tier 1; extends the UK public sector focus into the private sector; adds material supplier-led revenue to the buyer-led revenue model with Perfect Commerces mature Business Network; and brings evident crossselling potential based on the contributory companies specialisations.
We upgrade our forecasts substantially (EBITDA +122%) as the acquisition accelerates Proactis boards strategy by five years and creates a global force in the spend management environment. Target price 250p, with much more upside-potential available following momentum from proof of execution.
Via reverse takeover, Proactis has acquired Perfect Commerce, a US-based spend management solution provider delivering £30m revenue and £8.9m adjusted EBITDA in FY16. After identification of at least £5m of specific synergies from deduplication, and delivery of £3m in FY18, the post-synergy EBITDA uplift of £11.5m equates to an EV/EBITDA of 8.7x. The £99.0m acquisition is funded by a £70m placing at 165p alongside debt facilities of £55m. The CEO of Perfect Commerce will become CEO of the enlarged Proactis Group, rolling part of his stake in Perfect Commerce into a $3.5m convertible loan in Proactis (for tax reasons: expected to convert into equity within twelve months).
Leading to group stats of 85% recurring revenue, 30% EBITDA margin, a global potential market of tier 1 & tier 2 public & private sector customers, Perfect Commerce brings its Business Network to the group, adding a supplier network with 15 years established maturity, now complemented by Proactis Accelerated Payment Facility module. The enlarged (buyer & supplier) customer base provides scale and opportunity to gain market share in a $5bn market growing at 10% per annum. Both companies feature amongst Gartner's 12 magic quadrant players, and the combination creates the sixth largest global pure play for spend control.
Sprinting past £100m market cap to both a larger opportunity and a larger investor base, we lift our target price to 250p, equivalent to 12.5x EBITDA and en route to the Megabuyte Accounting and Enterprise Software peer group at 17x."
"The increased scale offers enhanced growth opportunities, extending current UK focus deeper into the US, and mainland Europe; broadens the tier 2 customer base into tier 1; extends the UK public sector focus into the private sector; adds material supplier-led revenue to the buyer-led revenue model with Perfect Commerce's mature Business Network; and brings evident cross-selling potential based on the contributory companies' specialisations."
The broker has upgraded its foreacasts signficinatly, the underlying profit forecasts rises 122%, as the acquisition accelerates Proactis board's strategy by five years and creates a global force in the spend management environment.
Target price rises to 250p "with much more upside-potential available following momentum from proof of execution"."
The US business has acquired several businesses over past few years. Met the new CEO - who I thought was excellent ( bright, leader,good operational background, and seemed a good communicator . Tim back to CFO a good move also, Rod & Hampton have known each other for years and compared notes ( as they weren't competitors). Think it will be a good fit as it makes them a £50m revenue company . Now on everyone's radar as one of the worlds biggest supplier tech companies. Probably get snapped up by a giant in next few years. Too small before.
A reverse take-over i.e. small company taking over a bigger company, and the CEO of the bigger company, taking over seems quite unusual - or maybe a I am wrong.
The story appears to be that the acquiree company has a history of weaker profits, and this is a good way to get access to a capital raising market.
Could be messy or could be good. Maybe a good way for the retiring CEO to bow out. Looks like the future acquisition trail will be mainly US based? However the CFO as a veteran of PHD will hopefully make sure shareholder interests are well looked after?!
1) Acquisition is enhancing.
2) Allows increased institutional ownership, hard to achieve via market purchases.
3) Good chance it will kick start the sp
4) If Henderson didn't take part it will dilute them anyway - no bad thing.
So far I have to admire the vision of the management and execution. Let's hope that can keep it up, I think they can.
Noted Directors didn't take part and so saw the dilution.
Still think this should be north of 150p at this point and hope Henderson finish selling down.
It's coming along for the patient and if there is a downturn (when) the pressure to use the likes of Proactis will only increase. If inflation takes off (when) the pressure to use the likes of Proactis will only increase.
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