Source: Inimfon Asifa/Technext
A newly founded Africa-focused private equity company based in South African, Infinite Partners, has led the acquisition of e4, a leading Software-as-a-Service (SaaS) company, in a noteworthy deal valued at $52 million. The acquisition, which is valued at R1 billion ($52.4 million) will provide E4 with the necessary financial resources to propel the company into its next phase of growth.
Infinite Partners which led the consortium with 27four in tow, was established in 2022 after its parent company, Ethos Private Equity, was acquired by the US investment company, Rohatyn Group. The company focuses on mid-market growth investments, typically between R100 million to R1.5 billion Enterprise Value.
Infinite Partners is 75% owned by an investment team which has worked together as part of Ethos for over 10 years. The founding team is black and comprises of 75% women. This acquisition of e4 represents the first order of business for Infinite Partners Core Equity Fund II, which is the successor fund to Ethos Mid-Market Fund I (“EMMFI”).
And Edward Pitsi, CEO and Co-founder of Infinite Partners, noted that as investment partners, the team will look to be supportive of e4, yet challenging in order to drive the appropriate outcomes alongside management. The former Managing Partner of Mid-Market Fund at Ethos emphasized e4’s potential for growth by continuing to excel in their current product offerings and expanding their customer base through their well-established blueprint adoption.
He expressed excitement about the growth prospects for e4 to enter adjacent sectors while maintaining a strong market position in their current verticals. Pitsi also noted e4’s recent expansion into the UK market, which offers substantial growth potential as it exceeds the South African market by more than 10 times.
“Finally, the business has recently expanded to the UK which has a TAM in excess of 10x the SA market – we will be supporting management through this expansion as it can have a material impact on ultimate outcomes. Our experience in managing growth agendas, providing strategic input and growth capital will be fundamental in supporting delivery on the opportunity set,” the CEO said.
e4, a ‘pioneer of digitalisation’ in South Africa
Founded over 20 years ago, e4 is a forward-thinking technology company that specializes in providing innovative solutions and services, including software development and business automation.
With a strong emphasis on software-as-a-service (SaaS), e4 has established itself as a pioneer of digitalization in South Africa. They leverage their technological expertise to completely transform customer processes and have become a trusted partner for digital transformation initiatives.
Grant Phillips, CEO of the e4 Group, expressed his belief that this acquisition perfectly aligns with the company’s broader strategy. He highlighted e4’s consistent and sustainable growth over recent years, emphasizing their focus on expanding relationships with strategic partners, revenue diversification, and geographic expansion.
Phillips added that the timing of this new partnership is particularly advantageous as it coincides with the company’s ongoing initiatives. The entire consortium shares a common vision and is supportive of the team responsible for executing e4’s strategy. They have already begun providing valuable input on additional growth opportunities identified jointly with e4.
Infinite Partners will support e4’s management throughout this expansion, recognizing its significant impact on future outcomes. Their expertise in managing growth agendas and providing strategic input and capital will play a crucial role in maximizing this opportunity.
Naomi Nethengwe, Infinite Partners Principal concurs, “With its proptech offering, e4 operates within digital & tech, a sector that Infinite Partners has identified as having structural growth potential.
“Proptech is a niche segment of the economy, and it has taken a significant amount of time and investment to build this world-class technology stack.
We foresee a substantial runway for international expansion due to the exportability and global relevance of e4’s technology stack. There are also tangible opportunities to expand to other industries that are looking to reduce friction in document generation, management and storage processes.”
Chad Potter, Group Executive and Private Markets Principal at 27four, commented on how e4’s software-as-a-service (SaaS) business model aligns perfectly with their investment strategy, which focuses on mid-market businesses with growth potential and social impact.
“e4’s SaaS business model aligns with their investment strategy of focusing on mid-market businesses with potential for growth and social impact. The investment will support e4 in diversifying its SaaS offering, expanding globally, and improving its B-BBEE credentials.”
Potter also highlighted the defensive and resilient nature of E4’s operations and recognized the strength of its management team, which contributes to driving innovation and leveraging existing customer relationships.
The acquisition of e4 by a consortium of private equity investors, led by Infinite Partners, is expected to fuel the company’s growth initiatives. This strategic partnership will provide the necessary financial backing for e4 to continue expanding its product offerings, explore new markets globally, and enhance its position as a leading player in the digitalization space.
Source: Inimfon Asifa/Technext