BDA Advises Praxis on Sale of BusinessOn to SkyLake
New York, NY, July 25, 2024 --(PR.com)-- BDA Partners is pleased to announce that its client, Praxis Capital Partners, has agreed to sell its stake in BusinessOn Communication Co Ltd, listed on the Kosdaq Exchange, to SkyLake Equity Partners.
BusinessOn is Korea’s leading B2B SaaS (Software-as-a-Service) company. BusinessOn management is also selling a significant stake to SkyLake, which will become the majority owner of BusinessOn. The transaction values BusinessOn at US$258m.
BDA was the exclusive financial advisor to Praxis and BusinessOn management on the transaction.
Praxis itself agreed to sell its 46.9% stake in BusinessOn. BusinessOn management is selling a 24.3% stake to SkyLake. In total, SkyLake is acquiring 71.2% of BusinessOn.
This is the first private equity-led SaaS buyout in the Korean market, which is poised to emulate the dramatic success of SaaS globally, and to grow to US$10bn in value by 2029. This groundbreaking transaction presages a wave of similar deals in the tech-savvy Korean nation. There have been 12,000 SaaS M&A deals globally since 2014, with more than half led by private equity, but the vast majority have been in North America and Europe.
Praxis will return more than 3x its investment from this transaction.
Min-sang La, co-CEO of Praxis, describes SaaS as an "irresistible trend": “The chaebols were initially resistant to adopting SaaS because of concerns in security, and the unfamiliarity of the subscription-based model. Now, conglomerates like Samsung, SK, Hyundai Motors and LG have turned to BusinessOn to replace their legacy software, followed by small-and-medium sized enterprises who are influenced by the large corporates. While SaaS penetration in Korea is only 5.2% today, we’re confident that we will catch up towards the American market where penetration is already 20%. The Asian SaaS market could be the next ‘El Dorado’ for PE investors. Government regulations across Asia are pushing demand for SaaS. We see strong demand for workforce management SaaS, due to revised labor laws on overtime working hours recently adopted in Korea, Japan and Taiwan. We’re seeing a wave of new, powerful SaaS players surging into the market. In Korea alone, the number of SaaS startups has doubled from about 500 in 2018 to 1,200 today. They need capital from investors like us to push further.”
BDA estimates that the Asian SaaS market will outpace global software market growth, reaching US$110bn by 2029 with Japan (US$22bn), Korea (US$10bn), and SE Asia (US$9bn) emerging as the most promising markets.
BusinessOn has shown that buy-and-build is a major value creation lever in Asian SaaS. BusinessOn started with a single product for electronic invoicing. During Praxis’ management, BusinessOn completed 4 bolt-ons, investing US$60m. In 2019, the company acquired electronic signature solution provider Glosign and data analytics company Planit Partners. In 2022, it made two acquisitions in tax/accounting, Nudge Partners and workforce management/HR SaaS player Shiftee. BusinessOn now offers SaaS solutions across finance, tax, accounting, HR and data analytics. Sales grew 47% per annum 2021-2023. Profitability exceeded 30%+ operating margin over the past six years.
Howard Lee, Partner and Head of Seoul, BDA Partners, said, “We’re proud to have advised Praxis on its successful exit from BusinessOn. Global PE firms have shown keen interest in the asset and in the Korean SaaS market. We are seeing heightened SaaS M&A activity, led by global investors across Korea, Japan and SE Asia.”
Andi Das, Managing Director, Head of Technology, SE Asia, BDA Partners, said, “We’re delighted to have advised Praxis and the BusinessOn management on this successful exit. As software adoption accelerates in Asia, we are witnessing the emergence of local champions and anticipate significant consolidation activity driven by these market leaders. With increasing cross-border deal momentum, BDA is uniquely positioned to advise companies in this fast-growing segment.”
BDA Deal team
- Paul DiGiacomo, Managing Partner, Head of Financial Sponsors Group
- Jonathan Aiken, Partner, Head of London
- Howard Lee, Partner, Head of Seoul
- Anindita Das, Head of Technology SE Asia, Singapore
- Sanghyun Lee, Associate, Seoul
- Seongsik Nam, Associate, Seoul
- YooJun Heo, Analyst, Seoul
About BusinessOn
BusinessOn Communication Co Ltd, founded in 2007, based in Seoul, and traded on the Kosdaq Exchange, is a leading cloud computing and SaaS player. It supplies electronic tax invoices and signature systems, integrated purchase management, electronic contracts, purchase confirmations, and online advertising services. BusinessOn provides its e-tax invoicing service, Smart Bill, to 1,500 corporates, including conglomerates Samsung, Hyundai Motor, SK and POSCO. www.businesson.co.kr
About Praxis
Praxis Capital Partners, founded in 2013, is an independent private equity firm focused on Korea middle-market buyouts and growth capital investments. Praxis has maintained outstanding investment returns through active engagement in portfolio companies, helping achieve substantial growth by leveraging management consulting experiences and a unique value creation methodology, the “Triple 3 Program.”. Praxis has been recently selected as one of the four private equity fund managers for the National Pension Service’s (NPS) largest-ever domestic PEF investment project. Praxis is raising its fourth flagship blind pool fund. www.praxiscp.com
About SkyLake
Established in 2019, SkyLake Equity Partners is a private equity firm based in South Korea. SkyLake primarily focuses on domestic buyout opportunities in information technology, industrials, and consumer products. SkyLake is the largest technology PEF, in Korea, with a focus on Buyout & Growth Investments. SkyLake Investment Co is an alternative asset management firm, investing into companies with high growth potential in the ICT and ICT convergence sectors. SkyLake seeks to contribute to the industrial development of Korea by maximizing the value of invested companies through proactive management involvement as a majority shareholder or by directly managing companies to achieve high returns. www.skylakepe.com
About BDA Partners
BDA Partners is the global investment banking advisor for Asia. We are a premium provider of Asia-related advice to sophisticated clients globally, with over 25 years’ experience advising on cross-border M&A, capital raising, and financial restructuring. We provide global reach with our teams in New York and London, and true regional depth through our seven Asian offices in Mumbai, Singapore, Ho Chi Minh City, Hong Kong, Shanghai, Seoul and Tokyo. BDA has deep expertise in the Chemicals, Consumer & Retail, Health, Industrials, Services, Sustainability and Technology sectors. We work relentlessly to earn our clients’ trust by delivering insightful advice and outstanding outcomes.
BDA Partners has strategic partnerships with William Blair, a premier global investment banking business, and with DBJ (Development Bank of Japan), a Japanese Government-owned bank with US$150bn of assets.
US securities transactions are performed by BDA Partners’ affiliate, BDA Advisors Inc, a broker-dealer registered with the Securities and Exchange Commission (SEC). BDA Advisors Inc is a member of the Financial Industry Regulatory Authority (FINRA) and SIPC. In the UK, BDA Partners is authorized and regulated by the Financial Conduct Authority (FCA). In Hong Kong, BDA Partners (HK) Ltd is licensed and regulated by the Securities & Futures Commission (SFC) to conduct Type 1 and Type 4 regulated activities to professional investors. www.bdapartners.com
BusinessOn is Korea’s leading B2B SaaS (Software-as-a-Service) company. BusinessOn management is also selling a significant stake to SkyLake, which will become the majority owner of BusinessOn. The transaction values BusinessOn at US$258m.
BDA was the exclusive financial advisor to Praxis and BusinessOn management on the transaction.
Praxis itself agreed to sell its 46.9% stake in BusinessOn. BusinessOn management is selling a 24.3% stake to SkyLake. In total, SkyLake is acquiring 71.2% of BusinessOn.
This is the first private equity-led SaaS buyout in the Korean market, which is poised to emulate the dramatic success of SaaS globally, and to grow to US$10bn in value by 2029. This groundbreaking transaction presages a wave of similar deals in the tech-savvy Korean nation. There have been 12,000 SaaS M&A deals globally since 2014, with more than half led by private equity, but the vast majority have been in North America and Europe.
Praxis will return more than 3x its investment from this transaction.
Min-sang La, co-CEO of Praxis, describes SaaS as an "irresistible trend": “The chaebols were initially resistant to adopting SaaS because of concerns in security, and the unfamiliarity of the subscription-based model. Now, conglomerates like Samsung, SK, Hyundai Motors and LG have turned to BusinessOn to replace their legacy software, followed by small-and-medium sized enterprises who are influenced by the large corporates. While SaaS penetration in Korea is only 5.2% today, we’re confident that we will catch up towards the American market where penetration is already 20%. The Asian SaaS market could be the next ‘El Dorado’ for PE investors. Government regulations across Asia are pushing demand for SaaS. We see strong demand for workforce management SaaS, due to revised labor laws on overtime working hours recently adopted in Korea, Japan and Taiwan. We’re seeing a wave of new, powerful SaaS players surging into the market. In Korea alone, the number of SaaS startups has doubled from about 500 in 2018 to 1,200 today. They need capital from investors like us to push further.”
BDA estimates that the Asian SaaS market will outpace global software market growth, reaching US$110bn by 2029 with Japan (US$22bn), Korea (US$10bn), and SE Asia (US$9bn) emerging as the most promising markets.
BusinessOn has shown that buy-and-build is a major value creation lever in Asian SaaS. BusinessOn started with a single product for electronic invoicing. During Praxis’ management, BusinessOn completed 4 bolt-ons, investing US$60m. In 2019, the company acquired electronic signature solution provider Glosign and data analytics company Planit Partners. In 2022, it made two acquisitions in tax/accounting, Nudge Partners and workforce management/HR SaaS player Shiftee. BusinessOn now offers SaaS solutions across finance, tax, accounting, HR and data analytics. Sales grew 47% per annum 2021-2023. Profitability exceeded 30%+ operating margin over the past six years.
Howard Lee, Partner and Head of Seoul, BDA Partners, said, “We’re proud to have advised Praxis on its successful exit from BusinessOn. Global PE firms have shown keen interest in the asset and in the Korean SaaS market. We are seeing heightened SaaS M&A activity, led by global investors across Korea, Japan and SE Asia.”
Andi Das, Managing Director, Head of Technology, SE Asia, BDA Partners, said, “We’re delighted to have advised Praxis and the BusinessOn management on this successful exit. As software adoption accelerates in Asia, we are witnessing the emergence of local champions and anticipate significant consolidation activity driven by these market leaders. With increasing cross-border deal momentum, BDA is uniquely positioned to advise companies in this fast-growing segment.”
BDA Deal team
- Paul DiGiacomo, Managing Partner, Head of Financial Sponsors Group
- Jonathan Aiken, Partner, Head of London
- Howard Lee, Partner, Head of Seoul
- Anindita Das, Head of Technology SE Asia, Singapore
- Sanghyun Lee, Associate, Seoul
- Seongsik Nam, Associate, Seoul
- YooJun Heo, Analyst, Seoul
About BusinessOn
BusinessOn Communication Co Ltd, founded in 2007, based in Seoul, and traded on the Kosdaq Exchange, is a leading cloud computing and SaaS player. It supplies electronic tax invoices and signature systems, integrated purchase management, electronic contracts, purchase confirmations, and online advertising services. BusinessOn provides its e-tax invoicing service, Smart Bill, to 1,500 corporates, including conglomerates Samsung, Hyundai Motor, SK and POSCO. www.businesson.co.kr
About Praxis
Praxis Capital Partners, founded in 2013, is an independent private equity firm focused on Korea middle-market buyouts and growth capital investments. Praxis has maintained outstanding investment returns through active engagement in portfolio companies, helping achieve substantial growth by leveraging management consulting experiences and a unique value creation methodology, the “Triple 3 Program.”. Praxis has been recently selected as one of the four private equity fund managers for the National Pension Service’s (NPS) largest-ever domestic PEF investment project. Praxis is raising its fourth flagship blind pool fund. www.praxiscp.com
About SkyLake
Established in 2019, SkyLake Equity Partners is a private equity firm based in South Korea. SkyLake primarily focuses on domestic buyout opportunities in information technology, industrials, and consumer products. SkyLake is the largest technology PEF, in Korea, with a focus on Buyout & Growth Investments. SkyLake Investment Co is an alternative asset management firm, investing into companies with high growth potential in the ICT and ICT convergence sectors. SkyLake seeks to contribute to the industrial development of Korea by maximizing the value of invested companies through proactive management involvement as a majority shareholder or by directly managing companies to achieve high returns. www.skylakepe.com
About BDA Partners
BDA Partners is the global investment banking advisor for Asia. We are a premium provider of Asia-related advice to sophisticated clients globally, with over 25 years’ experience advising on cross-border M&A, capital raising, and financial restructuring. We provide global reach with our teams in New York and London, and true regional depth through our seven Asian offices in Mumbai, Singapore, Ho Chi Minh City, Hong Kong, Shanghai, Seoul and Tokyo. BDA has deep expertise in the Chemicals, Consumer & Retail, Health, Industrials, Services, Sustainability and Technology sectors. We work relentlessly to earn our clients’ trust by delivering insightful advice and outstanding outcomes.
BDA Partners has strategic partnerships with William Blair, a premier global investment banking business, and with DBJ (Development Bank of Japan), a Japanese Government-owned bank with US$150bn of assets.
US securities transactions are performed by BDA Partners’ affiliate, BDA Advisors Inc, a broker-dealer registered with the Securities and Exchange Commission (SEC). BDA Advisors Inc is a member of the Financial Industry Regulatory Authority (FINRA) and SIPC. In the UK, BDA Partners is authorized and regulated by the Financial Conduct Authority (FCA). In Hong Kong, BDA Partners (HK) Ltd is licensed and regulated by the Securities & Futures Commission (SFC) to conduct Type 1 and Type 4 regulated activities to professional investors. www.bdapartners.com
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BDA Partners
Euan Rellie
212-265-5300
www.bdapartners.com
Euan Rellie
212-265-5300
www.bdapartners.com
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