Prophix today announced its acquisition of Sigma Conso, a Belgian-based CPM software and service provider, from Fortino Capital Partners
Authors: Dr. Christian Fuchs and Larissa Baier
Published: 27 October 2021
Today, Prophix, the Canadian CPM software vendor announced it will be acquiring Sigma Conso, the Belgian financial performance management (FPM) specialist. Prophix itself was acquired by Hg, one of the largest specialist tech investors in Europe in January 2021, valuing the company at around $500-$600m. Hg is now accelerating and scaling Prophix’s growth through the acquisition of Sigma Conso, which itself only received a growth investment from Fortino Capital Partners in June 2020. This is the first instance of inorganic growth in Prophix’s corporate history.
From a use case perspective, Prophix and Sigma Conso’s offerings fit together nicely. Whereas Prophix is strongly focused on CPM use cases such as planning, budgeting and forecasting, reporting and analysis, Sigma Conso has its strengths in FPM, offering software for financial consolidation and close, management reporting, intercompany reconciliation as well as specialty solutions for IFRS 16 and iXBRL. Sigma Conso is a cloud-native product that matches Prophix’s future cloud strategy.
The acquisition adds 70 employees and 600 customers to Prophix’s workforce and customer base. With its headquarters in Brussels, Belgium, and local offices in Europe and Asia, Sigma Conso has customers in 20 countries. Its main presence, however, is currently across Europe with the majority of customers in the Benelux region and France, but also in Italy, Spain and other countries.
With the addition of Sigma Conso’s technology and resources, Prophix strengthens its capabilities for consolidation and close, while also extending its global reach with key geographic access to sell Prophix into Europe and Asia. Moreover, Sigma Conso’s solutions could be a valuable addition for Prophix’s existing customer base of over 1,600 active customers of all company sizes and industries in more than 100 countries, mainly in North America. Sigma Conso’s existing customers may also find Prophix to be a valuable extension for CPM, which until now has been addressed with a partner product (Unit4 FP&A).
Overall, we believe the acquisition makes sense and creates various market opportunities for Prophix (new regions, new use cases, etc.), but also potential benefits for Sigma Conso’s customers. By broadening its portfolio, Prophix is closing the gap on competitors such as Board, Jedox, Unit4 and Workday, who also offer integrated financial consolidation and close solutions in their CPM portfolios.
BARC will continue to observe with interest Sigma Conso’s integration into Prophix. At first glance, the two company cultures, company sizes and technological approaches seem to fit very well together for further expansion.