In May, Dunedin software firm Timely announced it had been sold to a Denver-based, Silver Lake-backed company called EverCommerce for an undisclosed sum.
At the time, founder Ryan Baker did let slip that the deal was subject to Overseas Investment Office approval – implying the deal was worth somewhere north of the OIO’s $100m threshold.
Now, an IPO filing by EverCommerce in the US, dated June 30, has given us a much close idea.
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“On April 30, 2021, we entered into an agreement to acquire all of the equity interests of Timely,” a section of the filing reads.
“Timely is a New Zealand booking and business management software company. The aggregate purchase consideration related to the acquisition is expected to be approximately US$95 million ($135m), which we expect to pay with cash on hand.”
It notes final regulatory approval is still pending.
Going into the EverCommerce deal, Baker and co-founder Andy Schofield were the largest shareholders, with a 28 per cent stake each – implying each is in for a payday of around $38m.
The next largest were local investment funds Movac (18 per cent), Hoku Group (11 per cent) and Punakaiki Fund (4 per cent).
This year a string of NZ tech companies have been sold offshore in big-money deals.
But Punakaiki director Lance Wiggs – whose firm also had a big payday from its stake in Auckland point-of-sale software company Vend, recently sold to a US buyer for $450m – says the money is being recycled back into the local eco-system.
He says a case in point is his company investing $5m as it led a $15m Series B round for Auckland phototonics company Quantifi in raise that closed earlier this week.
And Movac has recently backed raises by two other local startups, Portainer ($10m) and Tradify (also $10m).
Founded in 2011 by Baker, Schofield and Will Berger, Timely now has 50,000 beauty professionals in 90 countries that use the cloud-based business management software to book more than 30 million appointments per year.
The start-up drew media coverage, in part because Baker was an early remote-working acolyte, with a setup that had all staff working from home years before the Covid outbreak led to a forced march toward home offices.
The coronavirus outbreak initially looked grim for Timely, as many of its clients were forced to close their doors in March 2020, with on-and-off opening over the following months.
On social media, Baker spoke candidly about the stress of pandemic lockdowns, and the boom-and-bust cycle effect on Timely’s revenue early in the outbreak.
The sudden loss of revenue was “scary”, he posted in an emotional thread that also paid tribute tothe Government’s handling of the pandemic, saying: “NZ’s Covid response & financial support was a foundation of our success.” (Timely took $458,294 in wage subsidies.)
But the pandemic ultimately strengthened Timely, as small businesses were motivated to adopt or upgrade online systems.
While not able to reveal financials, Baker told the Herald in May his company had expanded over the past six months from 85 staff (the number it had at the height of lockdowns) to 125.
“Like many companies, Covid was a game of two halves for us. An existential crisis to begin, then a tailwind from accelerated digital adoption,” Baker said.
The Timely co-founder said Baker said EverCommerce, which has around 500,000 service-business customers worldwide, has the chops and the scale to help Timely expand more quickly around the globe.
He planned to stay on, and would be able to run the business with a high degree of independence as it remained in NZ. Baker said he was “fizzing” at the deal, which would allow the business to add more staff as grew faster.
In its IPO filing, new owner EverCommerce says its revenue grew 39.4 per cent to US$337.5m in the year to December 31, 2020.
It made a net loss of US$60.0m, an improvement on its US$93.7m net loss in 2019.
EverCommerce listed on the Nasdaq on July 1, floating 19.2m shares at US$17 each to raise US$325m as it listed at a US$3.2 billion valuation.
At the same time, Silver Lake (the private equity giant best known in our part of the world for its ongoing attempt to buy into NZ Rugby) took an option to buy around 4.4 million shares at US$17 (that is, an aggregate US$75m) in a private placement.
The stock immediately jumped 18 per cent but has since settled back and was recently trading at US$17.25.
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