Kofax, in an interesting move to continue to beef up its "First Mile" and smart process application (SPA) technology portfolio, acquired digital signature specialist Softpro. Headquartered in Boeblingen, in southwestern Germany, Softpro had revenue of $13.3M in 2013, and Kofax is paying $34.7M in cash, so that a valuation of over 2.5x revenue and more than 34x profit, as Softpro reported an EBITDA of $1M for 2013.
From a technology standpoint, the acquisition a great fit. As Kofax transitions from paper toward capturing more types/channels of electronic information, digital signature technology is a natural way to extend its portfolio. Softpro actually has two types of digital signature technology - both of which dovetail nicely in to the Kofax technology stack. The majority of Softpro's revenue comes from enterprise e-signature technology packaged under the SignDoc brand. Softpro also has strong signature fraud detection technology, branded FraudOne, which is utilized by many large banks.
SoftPro fits nicely into Kofax's emerging smart process application (SPA) play. For example, Grant Johnson, Kofax's CMO explained to DIR, how it's a natural fit with Kofax's recently announced Mortgage Agility solution. "E-signatures really helped facilitate digital business and transactions," said Johnson.
"It's a great fit for any SPA where there is customer onboarding and it's essential for a signature to be part of the documentation," added Dave Caldera a senior VP with Kofax.
While FraudOne has its place within an SPA hierarchy, it's also a nice traditional capture add-on. In addition to being used for checks, the technology can also be utilized for applications like verifying signatures on contracts. (Coincidentally, Parascript, which recently announced a FormXtra for Kofax Capture module, has touted success in similar types of applications.)
Bottom line is that Kofax paid a bit of a premium to increase its footprint of multi-channel capture/SPA technologies. Kofax CEO Reynolds Bish has said that he will not buy capture market share- and Kofax certainly is not doing that. Instead, as with its other recent acquisitions, with Softpro, Kofax is buying technologies that complement its strong traditional document capture stack and help it evolve as the market continues to increasingly embrace digital transactions over paper ones. I think the M&A landscape has shown that the more digital-transaction-oriented a vendor is, the higher valuation it will achieve.
From a technology standpoint, the acquisition a great fit. As Kofax transitions from paper toward capturing more types/channels of electronic information, digital signature technology is a natural way to extend its portfolio. Softpro actually has two types of digital signature technology - both of which dovetail nicely in to the Kofax technology stack. The majority of Softpro's revenue comes from enterprise e-signature technology packaged under the SignDoc brand. Softpro also has strong signature fraud detection technology, branded FraudOne, which is utilized by many large banks.
SoftPro fits nicely into Kofax's emerging smart process application (SPA) play. For example, Grant Johnson, Kofax's CMO explained to DIR, how it's a natural fit with Kofax's recently announced Mortgage Agility solution. "E-signatures really helped facilitate digital business and transactions," said Johnson.
"It's a great fit for any SPA where there is customer onboarding and it's essential for a signature to be part of the documentation," added Dave Caldera a senior VP with Kofax.
While FraudOne has its place within an SPA hierarchy, it's also a nice traditional capture add-on. In addition to being used for checks, the technology can also be utilized for applications like verifying signatures on contracts. (Coincidentally, Parascript, which recently announced a FormXtra for Kofax Capture module, has touted success in similar types of applications.)
Bottom line is that Kofax paid a bit of a premium to increase its footprint of multi-channel capture/SPA technologies. Kofax CEO Reynolds Bish has said that he will not buy capture market share- and Kofax certainly is not doing that. Instead, as with its other recent acquisitions, with Softpro, Kofax is buying technologies that complement its strong traditional document capture stack and help it evolve as the market continues to increasingly embrace digital transactions over paper ones. I think the M&A landscape has shown that the more digital-transaction-oriented a vendor is, the higher valuation it will achieve.
19 comments:
Softpro may fit nicely into Kofax´s solution portfolio, but Kofax´s corporate culture definitely does not fit into Softpro´s approach to run it´s business. Hard times to come for the staff.
That may be true - but admittedly, I don't know anything about Softpro's culture. I will say that while Kofax has a had a lot of turnover in traditional capture business over last several years, I have not heard negative feedback from employees of other recently acquired companies like Kapow and Altosoft, which are in markets that are basically new to Kofax, so it seems like Kofax may need to rely on acquired employees' experience. Perhaps I am just not hearing the grumbling, or perhaps this is good sign for Softpro.
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The dominant part of Softpro's income originates from big business e-signature innovation bundled under the SignDoc brand. Softpro likewise has solid mark extortion discovery innovation, marked FraudOne, which is used by numerous vast bank.
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