valantic & Eraneos

Private Equity Manager (GP)

Case study

About the company

valantic is a consultancy and provider of software solutions for digital transformations. The company has over 800 consultants and developers and is represented in Germany, Austria, Switzerland, Belgium, the Netherlands, Portugal and many other international locations.

Eraneos is an international management and technology consulting group providing digitalisation and transformation services, from strategy development through to implementation. The company has 1,000 consultants in four core markets (Switzerland, Germany, the Netherlands and Spain).

Investment rationale

• Deutsche Private Equity (“DPE”) is a top-tier manager operating in Germany, Austria and Switzerland that has a strong track record of supporting and delivering organic growth for its portfolio companies and specialises in executing buy-and-build growth strategies. The manager has consistently generated strong returns over several funds.
• DPE wanted to move the two businesses to a continuation fund so that additional capital could be provided for further accretive add-on acquisitions.
• The growth of the digital transformation services market is expected to provide a strong tailwind for both companies, with an expected compounded annual growth rate of 9% until 2026 taking the total market size to more than €80bn.
• The business benefits from their sticky customer relationships, substantial scale combined with a customer-centric approach and a full end-to-end consulting service that is able to respond to customers’ needs.
• Eraneos has delivered robust performance with consistent above-market organic growth, maintained strong margins and cash conversion over the recent years. In combination with a well-executed growth strategy and successful buy-and-build strategy Eraneos was able to strengthen its positioning with a footprint in four European markets.

Active management and value creation

• Both businesses have grown substantially under the ownership of DPE, with revenues increasing by over 270% for Eraneos since it was acquired in 2017, and more than 240% for valantic since it was acquired in 2019.
• valantic has a track record of completing and integrating add-on acquisitions, with 15 completed under the ownership of DPE, who originally invested in the business in 2019.
• valantic sees routes to further value creation through the launch of new technologies and service offerings. These will enable customers to benefit from a more comprehensive portfolio of products and services, while the business will also focus on developing new customer markets in Scandinavia and Benelux. The company has continued to deliver strong organic growth and has already completed five add-on acquisitions over the past six months.
• Eraneos has also continued to expand through M&A with two recent acquisitions in Germany. In addition, the group is pursuing organic growth opportunities and recently opened a new office in Austria, while enhanced client support and expanding joint consultancy businesses are also expected to drive growth. Eraneos is targeting double-digit growth for 2023 and beyond.