Elmo is being pitched with annual earnings of about $40 million, or 10-times the $4 million for the 2022 financial year before Accel-KKR put it in play.
What can two years of private equity ownership do for a beaten-down ASX-listed technology stock? Just ask Elmo Software’s owner K1 Investment Management, whose dealmakers are in front of potential buyers and selling an aggressive turnaround story.
Sources said sell-side adviser UBS has been instructed to run a targeted process, with no set deadlines for first-round offers. You would have to think Accel-KKR, which was the underbidder at Elmo Software and has been picking up HR software businesses as bolt-ons for Humanforce, would take a look. Elmo is also in Potentia Capital’s wheelhouse, although bigger than its usual deal size. Other logical buyers include Chicago’s Thoma Bravo.
Its biggest product, Breathe, is used by 14,500-plus small businesses with less than 250 employees. Expanding partners, cross-selling and improving digital customer acquisition would underwrite Breathe’s future growth, potential buyers have been told. It competes with Aussie unicorn Employment Hero and the likes of Gusto . The mid-market brand is a direct competitor to Accel-KKR’s Humanforce.
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