The procurement sector continues to face the twin challenges of an increasingly volatile supply chain landscape and a widespread shortage of skilled professionals. In order to close the existing skills gap and increase efficiency, investors are turning more and more to technology and cutting edge solutions.
Organizations can spend more than 70% of their total revenue on procurement, making it important to use developing technologies to increase efficiency, cost savings and competitive advantage. As a result, procurement platforms that bring new levels of oversight, automation, and analysis to the source-to-pay process are drawing in an increasing amount of capital investment.
Procurement automation aims to remove the need for the kind of slow manual tasks usually associated with the spend management process. Not only can it save teams time by reducing menial work, but it can also reduce costs, saving companies money while providing more accurate insights and happier suppliers.
Vista acquires Jaggaer
Today, private equity investment firm Vista Equity Partners, which focuses on enterprise software, data and technology focused businesses, announced the acquisition of Jaggaer, an enterprise procurement and supplier collaboration software, from its owner, UK-based private equity firm Cinven. Neither Vista nor Jaggaer confirmed the exact terms of the deal. However, Reuters reported in May on rumours that the deal could be worth as much as $3 billion.
Jaggaer provides configurable source to pay and collaboration software for direct and indirect procurement processes through a single, unified platform. The company’s current model provides cloud-based procurement automation technology to large pharmaceutical corporations, including AstraZeneca, Unilever, and Merck KGaA. It also serves customers in other industries including large industrials firms and insurers, according to Reuters.
Jaggaer’s AI-enabled solutions help make purchasing more cost effective, better organised, and its digital tools help companies automate sourcing, spend management, contracting, eProcurement, invoicing and supply chain visibility for a diversified group of more than 1,400 customers around the world.
Executive reflections
“This new partnership with Vista underscores Jaggaer’s strong momentum and the compelling value our intelligent software delivers by helping our customers manage and automate complex processes while enabling a highly resilient, responsible and integrated supplier base,” said Andy Hovancik, CEO of Jaggaer.
Michael Fosnaugh, Co-Head of Vista’s Flagship Fund and Senior Managing Director, explains that Vista’s decision to acquire Jaggaer was rooted in the fact that “Jaggaer provides a mission critical platform that enables its customers and partners to streamline global supply chain and procurement processes, lower costs and improve visibility.” He added that Jaggaer’s products “serve a large addressable market benefiting from durable growth tailwinds, including customers’ increasing desire to unify direct and indirect spend management and realise the benefits of AI. Jaggaer is well-positioned to capitalise on these demand trends given its leading capabilities across source-to-pay workflows.”
“Jaggaer’s comprehensive solution enables customers to manage all procurement activities from an intuitive platform that harmonises and optimises disparate spend data,” said Sam Payton, Senior Vice President at Vista. He also pointed to the quality of Jaggaer’s “high performing leadership team,” whose “demonstrated commitment to operational excellence” was a big part of why Vista purchased the company, and spoke to “a bright vision for the future of AI-powered spend management.” He added: “We’re excited to support an organisation that cares deeply about their customers, partners and mission.”
