Malaysia-headquartered private equity firm Navis Capital Partners has invested in Australian vertical market software consolidator Software Combined for an undisclosed amount, according to an announcement.
Software Combined sources and acquires niche and B2B industry-specific software companies in Australia and New Zealand, providing the business owners with access to capital or liquidity options. The company scans around 150 companies every year.
It looks at mature businesses providing mission-critical, highly sticky vertical market software, with stable and recurring earnings, consistent and attractive margins and high free cash-flow generation.
The Software Combined platform owns and manage these businesses and looks to efficiently redeploy the available free cash flows into new acquisitions.
Software Combined has invested in four companies operating across mining, creative and construction industries and document management workloads. The company said it will continue to build around these assets, and also look at new vertical opportunities.
Software Combined CEO Evert Den Hollander said the company focuses on profitable software businesses operating in niche markets with a limited number of players.
“There is a significant opportunity in the Australian and New Zealand software market for acquisitions, with hundreds of potential targets across various different industries. Software Combined will provide an opportunity to founders of software companies to exit their businesses that have no natural acquirer,” Navis said in the announcement.
The PE firm added its investment will help Software Combined build a systematised acquisition platform with a highly repeatable M&A capability, and support the business in accelerating its aggregation strategy.
In August last year, Navis closed its eighth flagship fund at $900 million to invest across Southeast Asia, as well as in Australia, New Zealand, China and Hong Kong.
The firm also raised $450 million for a continuation fund to hold five of Navis Asia Fund VI’s portfolio companies, which have built a core climate and sustainability theme.
It is also raising a $150-million fund to invest in opportunities in the Cambodia, Laos, Myanmar and Vietnam (CLMV) region. The International Finance Corporation agreed to commit $50 million to the fund last year.
Earlier this year, Navis made an exit from Singapore-based battery lifecycle services firm TES-Envirocorp Pte Ltd at an enterprise value of $1 billion.
DealStreetAsia reported last month that the firm has renewed the sale of Hong Kong-based footwear components supplier Texon for $300 million.