Technomedia, a Canadian cloud-based talent management software provider, has been bought by Cegid Group, a French enterprise software company. The acquisition’s value was not disclosed. Cegid said the deal forms part of its growth strategy in the human resources sector and lends impetus to its international expansion. Founded in 1996 by CEO Alain Latry, Montréal-based Technomedia has developed a talent management software suite that is used by private and public sector organizations in more than 70 countries. The technology, media and telecom group of Canadian private equity firm Novacap acquired a majority stake in the company in 2009.
Alliance Between Cegid and Technomedia (Canada, USA, Europe, Hong Kong)
Cegid Moves Into the Strategic Talent Management Market and Cements Its Position as a Major SaaS HR Solution Provider Worldwide
NEW YORK, NY and MONTREAL, QC–(Marketwired – December 02, 2015) – Cegid formed an alliance with Technomedia (Canadian firm with locations in the USA, Europe and Hong Kong, owned by its founder Alain Latry and private equity firm Novacap), the company behind an international cloud-based talent management software suite for the private and public sectors. This merger forms part of Cegid’s growth strategy in the HR sector, further cementing its international expansion.
From administrative management to strategic Talent Management: a key transformation challenge for HR Departments
The new group formed by the alliance between cloud-based talent management software and Technomedia will give organizations the tools they need to make a key transformation, from “administrative management” (based around payroll and social security contributions), to strategic Talent Management.
A fast-growing market
…stimulated by innovation…
According to Gartner(1), “in 2014, the overall market for TM suite solutions (license and subscription software only) reached an estimated $3.4 billion and continues to grow at more than 17% annually.” Cegid believes this growth is being driven primarily by the emergence of talent management-oriented solutions, in which employees are the focal point of the HR management process and where greater emphasis is placed on new practices such as mobility, social media, big data and the Cloud.
Major progress has already been made in Cloud-based systems, and businesses naturally see this approach as an essential part of their digital transformation. The Cloud enables organizations to deploy new technologies and innovative services quickly and without heavy capital investment. According to CXP (2015 European IT market trends survey), SaaS, IaaS and PaaS technologies are experiencing strong growth in 2015, with 30 % growth in SaaS, 42 % in public IaaS, 47 % in PaaS and 44 % in Cloud consulting and integration services.
… and increasingly globalized
Historically, the market has remained largely domestic in nature, with the emphasis placed on payroll and administrative management, and with solutions tailored to the specific and often complex requirements of local laws and regulations. However, the current move towards SaaS Talent Management and HCM systems gives HR Departments access to new, innovative, integrated and international solutions that cover all aspects of the employee’s life cycle within the enterprise.
Technomedia: a truly global SaaS Talent Management player
Technomedia was founded in 1996 by Alain Latry, its current CEO. The company’s head office is based in Montreal (Canada). It develops comprehensive Talent Management solutions, featuring a multilingual suite of SaaS applications that give large enterprises, businesses and public sector organizations the HR tools they need to attract, recruit, motivate and assess their talent.
Technomedia has locations in Canada, the USA, Europe (France and Germany), and Asia (Hong Kong). It employs over 150 people and its growth , which has been rising steadily in recent years, comprises 73% recurring revenue (SaaS On Demand).
Technomedia works with hundreds of customers including large enterprises and companies across a variety of sectors such as manufacturing (Altran, Areva, Bombardier Transport, EDF, Legrand, Sony and Turbomeca), services (AAA Auto Club, ExterionMedia, GEFCO, ManpowerGroup, La Poste, RATP, Tüv Süd and Unisys), retail and hospitality (Aelia, Alain Ducasse Entreprise, Burlington Coat Factory, Caesars Entertainment, Eddie Bauer, Dick’s Sporting Goods and Golden Coral), and banking and insurance (BPCE, Banques Populaires, Caisses d’Epargne, Natixis, Crédit Agricole, Crédit Mutuel Arkea, Desjardins, Generali,
Groupama, LCL and Scotiabank), as well as public sector entities (Banque de France, Government of Quebec, Loto-Québec, Montreal City Council and Paris City Hall). Technomedia’s solutions are used in more than 70 countries and 60% of its business is located in North America (Canada and USA), with France and Germany accounting for the majority of its remaining activity.
A SaaS Talent Management solution that has earned international recognition
Gartner TMS Magic Quadrant
For the second year running, Technomedia’s solutions have been included in Gartner’s “Magic Quadrant for Talent Management Suites.” Technomedia believes its recognition reflects the quality of its international deployment strategy and the consistent quality of its products. Technomedia’s solutions help “enterprises manage the key workforce processes of plan to source, acquire to onboard, perform to reward and assess to develop” in a market where there is a growing trend for HR and Talent Management functions to be combined on a single platform.
Aragon Research Globe for Enterprise Learning 2015
Also for the second year running, Technomedia has been ranked as an Innovator by the Aragon Research Globe for Enterprise Learning 2015. This award, presented by the US firm which specializes in new technologies, was given to Technomedia in recognition of the innovative features of its Learning Management System (LMS).
Technomedia also received recognition for its Smart Assistant, a “personal assistant” solution that can be used to monitor talent streams and training activities within an organization, and provides alerts to managers and employees whenever specific action is required.
Training Industry’s “Top 20 Learning Portals for 2015”
For the fourth consecutive year, Technomedia features in Training Industry’s “Top 20 Learning Portals for 2015”, for its training solutions (LMS platform).
Cegid/Technomedia: a leading provider of SaaS HR solutions for large enterprises, mid-market companies and the public sector
The alliance between Cegid and Technomedia is a truly unique partnership, combining two leaders in their respective fields to target the Talent Management and HCM market. The two entities will pool their expertise and existing customer bases in a transatlantic alliance with an intimate knowledge of market potential in their respective regions of the world.
The new group will have a team of more than 400 people working exclusively in the HRIS and Talent Management sectors, located in France, North America and Asia. With established offices and integrator partner networks worldwide, the group will be well-placed to pursue its international growth objectives.
Through this pooling of expertise, Cegid/Technomedia will develop a brand new range of Talent Management solutions for the mid-market. The new offering will be rolled out on a gradual basis from the second half of 2016.
Technomedia companies will retain their status as subsidiaries of Cegid and will be led by Technomedia’s founder and CEO, Alain Latry. “The obvious sales synergies between Technomedia and Cegid represent considerable potential for our respective solutions,” explained Alain Latry. “Our alliance with Cegid Group paves the way for ambitious new innovation projects and the scheduled development of a dedicated mid-market offering.”
“Our alliance with Technomedia represents a change of pace in Cegid’s strategy,” added Patrick Bertrand, Cegid’s CEO. “It marks a major milestone in our international growth plan, and cements our position as a leading provider in the HR sector, with one of the largest and best ranges of solutions on the market. It also strengthens our position as a major player in SaaS solutions.”
According to Jean-Michel Aulas, Cegid’s founder and Chairman, this alliance is a key turning point in the company’s growth, both in France and worldwide. “Cegid has made a clear statement of its intention to support businesses through the digital transition and to help them grow internationally,” explained Jean-Michel Aulas. “It gives me great pleasure to welcome our colleagues from Technomedia to the group. Our new partner has proven expertise in the strategic HR management sector and this alliance will give a further boost to our own international expansion.”
Cegid + Technomedia: a merger that leverages the SaaS model and boosts recurring revenue
The alliance will help Cegid to deliver 100% SaaS, proven and ultra-secure solutions used by millions of employees across the globe.
Based on Cegid’s accounts as at 31 December 2014 and Technomedia’s accounts as at 31 July 2015, the new group’s total pro forma turnover stands at more than EUR280 million. This includes recurring revenue of EUR167 million, i.e. almost 60% of total turnover (an increase of 1.5 percentage points). Moreover, international operations account for more than 10 % of total turnover (up 45%).
Technomedia’s operating profit (12% of turnover), combined with amortization of goodwill, financial charges connected with the acquisition and transaction costs, are likely to have a slight dilutive effect on net income (excluding synergies identified to date).
This year’s external growth operations, including the acquisition of Technomedia, will boost 12-month growth by approximately EUR26 million, based on the most recent financial statements of each acquired entity. These acquisitions were funded through Cegid’s medium-term line of credit, as well as its growing net cash flow, boosted primarily through effective WCR management. Cegid’s current net debt stands at approximately EUR68 million at 31 October 2015, adjusted to reflect the acquisition of Technomedia. Including the effect of these operations, the group’s net debt-to-equity ratio is expected to stand at 0.32 (based on the combined pro forma balance sheet)(2) and its leverage ratio (GOP/borrowing cost) is expected to be less than 1.
Based on the identified synergies and expected growth in recurring revenue, these operations should deliver added value for Cegid shareholders from 2016 onwards.
(1) Gartner “Magic Quadrant for Talent Management Suites” by Yvette Cameron, Jeff Freyermuth, Ron Hanscome, Helen Poitevin, 10 August 2015
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or designations. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
(2) Based on Cegid’s estimated consolidated position as at 30/09/2015, adjusted for leverage as at 30/10/2015, for the impact of the Technomedia acquisition, and on Technomedia’s adjusted consolidated balance sheet as at 31/07/2015 (excluding debt and before IFRS adjustment)
Other than existing published figures, the figures given in this press release are estimated, non-audited, internally generated values.
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Cegid is a leading player in the digital transformation of companies, providing cloud services and enterprise software to private companies and public entities alike.Cegid addresses the management needs of companies and public entities of all sizes in the fields of finance, taxation and human resources, and offers industry-specific solutions to companies in the manufacturing, trade, services and retail sectors as well as to the accounting profession. Based on MoBiCloTM, its technological concept combining Mobility, Business Intelligence and the Cloud, Cegid’s innovation strategy integrates the new ways in which people use software.
Cegid is an international group with more than 2,000 employees, 29 locations in France, and 16 subsidiaries and offices worldwide, including recent new additions in Brazil, Russia, Dubai and Ivory Coast. Cegid’s Chairman is Jean-Michel Aulas and its CEO is Patrick Bertrand.Cegid serves more than 110,000 customers and 400,000 users, including over 120,000 in SaaS mode. Its customer base includes more than 1,000 retail brands and around 30,000 stores in 75 countries. In 2014, its turnover totalled EUR267 million.
With assets under management of over $1.5 billion, NOVACAP has consistently been recognized as one of the leading private equity firms in Canada since 1981. Its unique collaborative approach with entrepreneurs, based on deep operational expertise and active management of its investment, has helped accelerate growth and maximize value for many companies across North America. NOVACAP’s culture is based on creating long-term value through an investment philosophy focused on discipline and growth. With an experienced management team and substantial financial resources NOVACAP is well positioned to continue building world-class companies. For more information, please visit www.novacap.ca.
Since 1996, Technomedia’s cloud-based talent management solutions and services have enabled global organizations to cultivate high-performing workforces. Hundreds of companies in more than 70 countries rely on Technomedia’s award-winning software suite for talent acquisition, performance management, succession planning, compensation management, core HR hub, and learning and development. Technomedia powers talent awareness, which drives HR insights that ensure business alignment and talent engagement. Visit www.Technomedia.com
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