3i Group seeks add-ons to Magnitude Software as it plans to develop strong ties with SAP and Oracle.
The private equity firm, which on March 19 completed a majority investment in Magnitude, wants to expand Magnitude’s capabilities and reach, Andrew Olinick, co-head of North America PE, told Buyouts.
“We continue to look at additional add-ons to deepen Magnitude’s relationship with SAP and Oracle,” Olinick said. “We would expect to continue to acquire founder-led businesses that are a good fit for the business, anywhere in Europe, the U.S., and Canada.”
Magnitude’s software enables business users to access, extract and analyze data more efficiently. Its clients include Microsoft, BP, Adidas, Ford and other large enterprises.
3i was looking at potential software investments when Magnitude’s founder was searching for a partner to help the company expand internationally and develop new strategies, Olinick said.
The firm invested $179 million in Magnitude. Company executives also invested; they have a minority stake in the company. Magnitude’s enterprise value is $340 million post-investment.
3i doesn’t raise funds and instead invests from its balance sheet. In September 2018, the firm’s net assets were valued at 7.5 billion pounds ($9.9 billion) and its private equity portfolio at 5.7 billion pounds ($7.6 billion).
Shea & Co, a technology and software-focused investment bank, assisted 3i on the transaction.
Magnitude’s products include a business analytics platform, Every Angle by Magnitude; the SourceConnect data-aggregation platform for SAP Central Finance, and business-intelligence and enterprise-application products.
Those offerings enable easy access to SAP and Oracle data, eliminating the need for professional technical assistance, Olinick said.
“If you are a large brewer, you’ll have all sorts of information in SAP’s system” — financial data, supply chain data, enterprise resource planning, Olinick said.
“You want people across the organization, in the financial team, in marketing, to be able to access this system. Every Angle connects into SAP and enables … very easy access to it. [The software] gets information in a report in a very easy-to-digest manner.”
3i is planning to expand Every Angle’s footprint in the U.S. and Germany and to hire additional sales and marketing executives to promote Magnitude’s brand.
The firm also will continue establishing a “more formal relationship with SAP,” Olinick said.
“There is an opportunity to get closer to Oracle and SAP themselves and cross-sell. For instance, [SourceConnect] is promoted by SAP in the SAP app store,” he said.
The firm will consider ways to create additional partnerships with Oracle and SAP to help them provide the best and easiest use of their products to their customers.
Action Item: Contact 3i in New York at +1 212-848-1400.