Strattam-backed MHC grows to $25m-plus in revenue post Ecrion acquisition

Global quarantine and the remote-everything environment made Ecrion more attractive as a deal target for Strattam.

Strattam Capital-backed MHC Software acquired software communication and automation company Ecrion Software, bringing the revenue of the combined platform north of $25 million, a source familiar with the deal told PE Hub.

MHC, based in Burnsville, Minnesota, provides back-office payment and process management support for companies in healthcare, government and other sectors. Ecrion Software offers front-office support such as customer communication management and automation, including individual and massive communication with companies’ clients and hospitals’ patients.

Adding another software layer to enable communication automation for MHC’s client base will improve the company’s capabilities during the pandemic and after it, Bob Morse, co-founder and managing partner at Strattam Capital, told PE Hub.

“This is giving the company an ability to help customers with their front office piece which is communicating with their clients,” Morse said.

The deal is the first for the firm since coronavirus shut down markets earlier this year. In fact, global quarantine and the remote-everything environment made Ecrion more attractive as a deal target, he said.

“We are hearing a lot from our clients that communicating with their customers now that we can’t see each other in person is a huge need and a huge problem,” Morse said. “So brining that capability to our 500+ hospitals we thought is going to be a very exciting idea.”

The founder of Ecrion, Florin Vasilian, and Strattam’s Bob Morse met before the pandemic; however, the idea to execute the transaction blossomed in the lockdown, Morse said.

“It became very clear that this is a big need for our clients and also [Florin] was looking for more help and support to do what he was trying to do,” Morse said.

The investment touches on popular themes of global digitalization and software upgrade that has driven investment focus before and during the pandemic.

“A lot of businesses that maybe were lagging in going digital and having really good software systems have decided that they really need to get serious about that and upgrade their technology and digital systems,” Morse said.

“And, for sure, places like healthcare and government and certain other industries, are going to be spending a lot of money to improve their automation – automating some of the manual processes so that people can do their jobs when they are not in the office,’ he added.

MHC is looking at more add-on opportunities that do just that: improve automation capabilities of different functions of the platform, according to the investor.

The Austin, Texas- based firm is on track to grow the MHC platform with one to two add-ons per year for the next few years, Morse said.

The capital for the deal came out of Strattam Capital Fund II, which closed in February 2019 on $230 million. The fund is about 40 percent deployed, Morse said.

Strattam Capital invests in founder-led business-to-business software companies located outside of traditional tech hubs.

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Correction: The story was corrected to reflect that MHC Software platform has grown to north of $25 million in revenue after the Ecrion add-on.