Hg acquires Canadian software maker Prophix in $500m deal

Prophix, a global leader in Corporate Performance Management (CPM) software, today announces an investment from Hg, a leading global software investor. The deal values the company at between $500m and $600m.

Hg’s investment is expected to accelerate and scale Prophix’s growth and fund further development of its product capabilities.

This deal will result in Prophix employees and management participating to acquire the company alongside Hg, who will hold the majority investment. This will allow staff to benefit more directly from the organization’s ongoing growth.

Founded in 1987 and based in Ontario, Canada, Prophix is a leading provider of CPM software serving mid-market companies across multiple industries worldwide, providing planning, budgeting and financial reporting software into the ‘office of the CFO’.

Prophix’s software allows organizations to improve their financial reporting capabilities, while also standardizing and streamlining the budgeting process to generate significant ROI through a faster time to close, reduction in budgeting errors and an ability to reforecast in a more agile way.

Prophix is a leader in its segment with over 1,600 customers, industry-leading retention rates and best-in-class customer NPS.

“This is a really momentous announcement for the team at Prophix and we warmly welcome Hg as a key strategic partner today. It has been an incredible journey to date, and I am so grateful to the enormous talent that has seen us get to this stage. Together with Hg we will move forward with an unstoppable team and a very bright future for the business,” said founder and executive chairman at prophix, Paul Barber.

This partnership with Prophix reinforces Hg’s focus on mission critical B2B software sitting at the intersection of Hg’s experience in ERP and Tax & Accounting. This transaction represents Hg’s seventeenth investment in this space in the last 16 years, with total invested capital of over $3.5 billion.

Partner at HG, Jonathan Boyes, commented: “Prophix sits right at the heart of a universe that we have been investing in for almost two decades. This means that we recognise high-quality when we see it and Prophix falls firmly into this category. Prophix is a great business run by an impressive team. They have created a best-in-class cloud product that serves a very satisfied customer base, with a huge runway for further growth. We’re really excited about joining the team.”

Prophix is also the fourth software business based in Canada that Hg has invested in over the last 12 months.

Advising Prophix on the transaction were Shea & Company as financial advisor and Osler, Hoskin & Harcourt LLP as legal advisor. Advising Hg were Stifel (M&A), Skadden (legal), Kirkland & Ellis (financing), Deloitte (accounting and tax) and EY (commercial and technology).

Source: HG Capital