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BDA Guides Praxis Through Major Sale to SkyLake

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Praxis Capital Partners Sells Stake in Korean SaaS Leader BusinessOn to SkyLake Equity Partners

In a landmark deal for the Korean technology sector, Praxis Capital Partners has sold its majority stake in BusinessOn Communication Co Ltd, a leading Software-as-a-Service (SaaS) provider in South Korea, to SkyLake Equity Partners. This transaction marks the first private equity-led SaaS buyout in the Korean market, reflecting the growing interest in the region’s burgeoning technology sector.

Key Takeaways:

  • SkyLake is now the majority owner of BusinessOn, acquiring a 71.2% stake in the company.
  • The deal values BusinessOn at US$258 million, highlighting the strong growth potential of the Korean SaaS market.
  • Praxis Capital Partners, which initially invested in BusinessOn in 2019, will see a return of more than 3x its initial investment.
  • The transaction signals a wave of similar deals to come in the Korean tech market, as SaaS adoption continues to accelerate.
  • The Asian SaaS market is poised for strong growth, with Japan, Korea, and Southeast Asia emerging as key hubs.

A Look at the Transaction

Praxis, a private equity firm focused on Korean middle-market buyouts, acquired a 46.9% stake in BusinessOn in 2019. During Praxis’ management, BusinessOn completed four acquisitions, investing US$60 million in its growth. The company now offers a comprehensive suite of SaaS solutions across finance, tax, accounting, HR, and data analytics, serving over 1,500 corporate clients, including Samsung, Hyundai Motor, SK, and POSCO.

"The chaebols were initially resistant to adopting SaaS because of concerns in security and the unfamiliarity of the subscription-based model,” said Min-sang La, co-CEO of Praxis. “Now, conglomerates like Samsung, SK, Hyundai Motors and LG have turned to BusinessOn to replace their legacy software, followed by small-and-medium sized enterprises who are influenced by the large corporates."

The Growth of the Asian SaaS Market

The Asian SaaS market is projected to outpace global software market growth, reaching US$110 billion by 2029. This growth is fueled by several factors:

  • Increased government regulations: Across Asia, governments are increasingly pushing for digitalization, creating demand for SaaS solutions.
  • Rising adoption rates: As businesses become more comfortable with cloud-based solutions, SaaS adoption is increasing at a rapid pace.
  • A growing pool of startups: The Asian SaaS landscape is being shaped by a rising tide of innovative startups, many of whom require funding to scale their operations.

BDA Partners: The Catalyst for This Strategic Deal

BDA Partners served as the exclusive financial advisor to Praxis and BusinessOn management on this landmark transaction.

"We’re proud to have advised Praxis on its successful exit from BusinessOn," said Howard Lee, Partner and Head of Seoul, BDA Partners. "Global PE firms have shown keen interest in the asset and in the Korean SaaS market. We are seeing heightened SaaS M&A activity, led by global investors across Korea, Japan, and Southeast Asia."

BDA Partners is well-positioned to advise companies in the rapidly growing Asian SaaS market. The firm has a deep understanding of the regional landscape and a strong network of investors and acquirers.

What This Means for the Future

The sale of BusinessOn to SkyLake marks a significant milestone for the Korean SaaS market, suggesting a strong appetite for growth-oriented investments in the sector. The transaction also illustrates the increasing influence of private equity in driving innovation and consolidation in the technology space.

This deal is likely to trigger a wave of similar transactions in the region as global investors recognize the enormous potential of the Asian SaaS market. As the market continues to mature, we can expect to see more players like BusinessOn emerge, leading to a more sophisticated and competitive landscape for both investors and consumers.

Article Reference

Lisa Morgan
Lisa Morgan
Lisa Morgan covers the latest developments in technology, from groundbreaking innovations to industry trends.

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