Private equity (PE) firm SkyLake Equity Partners is buying a majority stake in South Korean software-as-a-service (SaaS) company BusinessOn Communication, according to a statement.
As part of the deal, SkyLake will buy Seoul-based PE firm Praxis Capital Partners’s 46.9% stake in Kosdaq-listed BusinessOn. It will also acquire a 24.3% stake from the Korean firm’s management, bringing its holding to 71.2%.
According to the statement, the deal values BusinessOn at $258 million and marks the first PE-led SaaS buyout in the South Korean market.
The sale will net Praxis, which first invested in Seoul-based BusinessOn in 2019, an over 3x return on its investment.
BDA Partners acted as the exclusive financial advisor to Praxis and the SaaS firm on the transaction.
Founded in 2007, BusinessOn provides electronic tax invoices and signature systems, integrated purchase management, electronic contracts, purchase confirmations, and online advertising services. Its clients include Samsung, Hyundai Motor, SK and POSCO.
Under Praxis’s management, BusinessOn completed four bolt-on acquisitions. In 2019, it purchased e-signature solutions provider Glosign and data analytics company Planit Partners, followed by accounting solutions provider Nudge Partners and HR SaaS firm Shiftee in 2022. Its sales grew 47% annually from 2021 to 2023, the statement said.
“The Asian SaaS market could be the next ‘El Dorado’ for PE investors. Government regulations across Asia are pushing demand for SaaS. We see strong demand for workforce management SaaS due to revised labour laws on overtime working hours recently adopted in Korea, Japan, and Taiwan,” said Praxis co-CEO Min-sang La.
“In Korea alone, the number of SaaS startups has doubled from about 500 in 2018 to 1,200 today. They need capital from investors like us to push further,” he added.
According to BDA estimates, the Asian SaaS market will outpace global software market growth to reach $110 billion in value by 2029, with Japan ($22 billion), South Korea ($10 billion), and Southeast Asia ($9 billion) emerging as the most promising markets.
“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 SE Asia,” said BDA partner and Seoul head Howard Lee.
