Target Information

On May 8, 2024, a consortium composed of Stirling Square, TA Associates, and Macquarie Capital finalized the acquisition of Byggfakta, a premier provider of information and software solutions within the construction sector. Founded in 1936 and headquartered in Ljusdal, Sweden, Byggfakta serves over 50,000 customers globally and employs more than 2,000 individuals across 26 countries. The company operates in five key areas: Project Information, Specification, Market Intelligence, Product Information, and E-tendering, establishing itself as a critical player in the industry.

Byggfakta has grown significantly since its inception, maintaining a unique database and market-leading software solutions. The company produces subscription revenue exceeding SEK 2 billion annually, with an ambitious goal to achieve organic growth of 10% annually and to expand further through strategic acquisitions, targeting an additional growth rate of 5% to 15% per year.

Industry Overview

The construction industry in Sweden is evolving rapidly, driven by technological advancement and an increasing focus on sustainability. Sweden's commitment to innovative building practices and sustainable solutions has made it a leader in the construction sector, where digital transformation is reshaping traditional workflows. This trend is significant as global demand for construction and infrastructure services surges, providing substantial growth opportunities for companies like Byggfakta.

Furthermore, with increased investments in residential and commercial infrastructure, there is a growing need for efficient project management tools, data analytics, and software solutions to optimize operational efficiencies. The industry's focus on digitization is led by demands for real-time information and enhanced project coordination, where data-driven insights play a pivotal role.

As Sweden embraces a greener economy, companies that provide sustainable construction solutions are positioned to thrive. Byggfakta's offerings align well with these trends, allowing it to capitalize on the growing market for eco-friendly construction practices. Efforts such as these support not only local economies but also contribute to climate change mitigation strategies.

In this competitive landscape, Byggfakta's position as a leader in data and software solutions equips it to meet the evolving demands of the construction industry, as well as to forge strategic partnerships that could further enhance its market reach and product offerings.

Rationale Behind the Deal

The acquisition represents a pivotal moment for Byggfakta, transitioning from public to private ownership. This strategic move is expected to empower the company to accelerate its growth trajectory and execution of its M&A strategy. The consortium believes that operational and financial support will enable Byggfakta to expand its service capabilities and solidify its competitive advantage within the global construction technology landscape.

The partnership with Macquarie Capital, alongside Stirling Square and TA, is rooted in a shared vision of transforming Byggfakta into a global leader in construction technology. They aim to leverage their collective industry expertise to drive organic growth and conduct strategic acquisitions that enhance Byggfakta's service offerings.

Information about the Investor

Stirling Square is a distinguished pan-European private equity firm based in London, with extensive experience in the Nordics. Since its inception in 2002, it has backed numerous mid-market businesses and has consistently focused on fostering long-term value creation. Their commitment to supporting Byggfakta in optimizing operational and commercial capabilities illustrates their belief in the company's potential.

TA Associates, a global private equity powerhouse, has a robust track record of investing in companies across various high-growth sectors. Their strategic approach involves partnering with management teams to enhance profitability and foster growth. Since acquiring a minority stake in Byggfakta in September 2020, TA has closely collaborated with the company, thereby establishing a strong foundation for future initiatives.

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From an expert viewpoint, this acquisition appears to be a promising investment opportunity for the consortium. Byggfakta's established market position, coupled with its potential for growth in an expanding industry, positions it favorably for future success. The transition to private ownership will likely provide the agility necessary for continued innovation and expansion into new markets.

The strategic alignment of Stirling Square, TA Associates, and Macquarie Capital suggests a concerted effort to enhance Byggfakta's capabilities through collaborative expertise and substantial capital infusion. Their combined strengths are expected to facilitate an accelerated M&A strategy, vital for extending the company’s global reach and service diversification.

As the construction industry increasingly prioritizes digital solutions and sustainability, Byggfakta stands to benefit significantly from these trends, further justifying the consortium's investment. The company's clear strategic vision under CEO Dario Aganovic reinforces the potential for substantial growth fueled by its innovative product offerings.

In conclusion, this acquisition not only showcases the consortium's confidence in Byggfakta but also positions the company as a key player in the global construction technology landscape. Provided that the new ownership effectively leverages its resources and expertise, this deal is likely to yield fruitful results in the long term.

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