A Growth Equity Position Doesn't Have to Mean A Passive Investor

Key Facts

Year of Investment: 2014
Status: Exited
Selected AKKR For Vertical Experience (HCM)
Industry Consolidation
Seamless Founder Succession
Transition to SaaS Model

Active and Strategic Support Helped to accelerate a pEO Company

Transaction Highlights

Accel-KKR stood out to PrismHR during the company’s capital raise process due to AKKR’s experience working with human capital management (HCM) software companies. Specifically the management team of PrismHR valued the opportunity to work with other HCM companies in AKKR’s portfolio. Management discussions culminated with an investment in 2014.

RESULTS

During the investment period, PrismHR:

Released the next generation of the PrismHR Platform – the HR outsourcing solution for Payroll, Benefits, HR and more
Significantly enhanced the platform with applicant tracking, mobile capabilities, next generation benefits enrollment, integrated time support and enhanced extensibility
Increased the number of HR Service Providers using PrismHR software by 94%, which led to 50% growth in worksite employees
Increased total revenue and headcount by nearly 3x
Grew annual revenue 59% in 2016

In 2017, PrismHR received additional growth capital from Summit Partners, a Boston-based private equity firm, and in 2019, PrismHR was sold to Stone Point Capital.

Business Overview

PrismHR began in 1985 as a founder-owned software company known as F.W. Davison. Founder and CEO, Frederick Davison, built the company into a dominant workflow software provider to PEO organizations (Professional Employer Organizations). Observing the fragmented space in which it operated, the company sought growth capital to capitalize on organic and inorganic opportunities.

Value Creation

Throughout the investment period between 2014 and 2019, PrismHR worked actively with Accel-KKR to significantly transform its business:

Transitioned from a legacy platform to next-generation cloud-based products.
AKKR’s Consulting Group drew on the firm’s vertical domain expertise to provide tailored recommendations to PrismHR including go-to-market, competitive and pricing strategies.
Launched a robust M&A program in a fragmented space and consolidated a number of industry players. Through AKKR’s deep networks in and knowledge of the HCM vertical, PrismHR was able to acquire highly complementary businesses including several key competitors.
Welcomed new leadership to lead key functional areas including technology, product and marketing.

Equally important, the investment ensured a smooth succession plan for the founder CEO and enabled a seasoned executive from within the company to take the reins and to continue driving an aggressive growth plan.

The views and opinions expressed are those of the speakers and do not necessarily reflect those of AKKR or its affiliates (“AKKR”). AKKR has not verified the accuracy of any statements by the speakers and disclaims any responsibility therefor. This post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by AKKR or any of the securities of any company discussed. The AKKR portfolio companies identified, if any, are not necessarily representative of all AKKR investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of AKKR investments, please visit LINK https://www.accel-kkr.com/portfolio/. For additional important disclaimers regarding this interview and blog post, please see [“Informational Purposes Only” in the Terms of Use] for AKKR’s website, available at LINK https://www.accel-kkr.com/privacy-policy/.

A Growth Equity Position Doesn’t Have to Mean A Passive Investor

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