Target Company Overview

Basware is recognized as the world's leading provider of procure-to-pay SaaS solutions, offering innovative services including e-invoicing and financing. With a substantial presence in over 100 countries, Basware operates the largest open business network globally. The company's shares are publicly traded on the Helsinki Stock Exchange, reflecting its significant market influence and leadership in the procurement technology sector.

Industry Overview

The procure-to-pay (P2P) software industry has experienced robust growth due to the increasing digital transformation of businesses across various sectors. Companies are increasingly adopting P2P solutions to streamline their procurement processes, enhance efficiency, and reduce operational costs. This shift is driven by the need for transparency, compliance, and improved collaboration between suppliers and buyers.

In Europe, particularly, the demand for cloud-based procurement solutions is accelerating, fueled by businesses' need for flexible, scalable options that can accommodate dynamic market conditions. The shift towards remote work and digital operations has further underscored the importance of reliable, user-friendly procurement technologies.

Additionally, the rise of the digital economy has brought about an increased focus on sustainability and responsible sourcing, prompting companies to integrate such principles into their procurement strategies. As organizations seek to improve their operational agility, the P2P software sector is poised for continued growth and innovation.

Rationale Behind the Deal

Bregal Milestone's exit from its investment in Basware is a strategic move reflecting the company's substantial growth and profitability during its investment period. The transaction, which closed on November 23, 2020, represents the firm's successful track record in identifying high-potential businesses in the technology sector. With Basware's execution of its growth strategy, including a strong cloud revenue increase, the exit aligns with Bregal Milestone's aim to maximize returns on its investments.

The collaboration between Bregal Milestone and Basware has yielded significant advancements in the latter's business trajectory, particularly in its transition to cloud services. This partnership's success illustrates the potential for strong investor and management relationships in driving business performance.

Investor Overview

Bregal Milestone is a growth capital firm that manages a €495 million pan-European fund dedicated to nurturing high-growth companies in Europe. With a focus on technology and technology-enabled services, Bregal Milestone provides not only financial backing but also strategic guidance to help its portfolio companies excel in their respective markets. The firm is a part of Bregal Investments, which has a robust history of investing over €15 billion across different sectors.

By fostering innovation and supporting companies like Basware, Bregal Milestone aims to create value not only for its investors but also for the wider economy through enhanced business capabilities and job creation in the technology field.

View of Dealert

The exit of Bregal Milestone from Basware represents a strategic and timely decision that reflects a successful partnership. Given Basware's strong market presence and the ongoing demand for technology-driven solutions in the procurement sector, this investment can be deemed notably advantageous. The significant growth Basware has achieved in cloud revenues highlights the effectiveness of Bregal Milestone's support and guidance during its investment tenure.

Moreover, the broader industry trends indicate a positive outlook for similar investments, as organizations increasingly transition toward digital solutions. Bregal Milestone's ability to recognize and invest in promising technology firms has proven to be both prudent and profitable.

In summary, this deal underscores Bregal Milestone's strategic foresight and capability in selecting investments that yield fruitful outcomes. The collaboration with Basware resulted in a heightened value creation atmosphere, positioning both companies favorably in the competitive landscape of procurement technologies.

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