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Procore Technologies has been on a growth path in the last two years.  And its cloud-based product line and its size would seem to make it an ideal acquisition candidate for companies in the market that a line of cloud-based construction software.

I have no knowledge about the company’s intentions ( I have yet to talk with someone there). But it’s a market in flux.  Acumatica CEO Jon Roskill, whose company entered the construction market early this year, described the market , as largely “legacy Sage, legacy Dexter+Chaney, legacy Viewpoint.” Anyway this is exactly the kind of company that gets acquired when established larger vendors turn to the “buy” part of the “make-of-buy” formula for expanding or updating product lines. Procore has several new executives, held its first-ever partner conference, and is spinning out new products, along with a $75-million investment, all within nine months. In the last year it acquired BIManywhere and Honest Buildings. The last revenue figure I found was $55 million for Procore for 2016 and it would need $100-million plus to seriously consider an IPO. The construction software market has been consolidating with Viewpoint buying Dexter+Chaney in 2017 and Key Data Solutions in 2018 and in turn being picked up in July by publicly held Trimble which had also acquired e-Builder in February. Together Viewpoint and eBuilder added about $116 million to Trimble’s revenue for the third quarter ended Sept. 30, 2008. That annualizes to $464 million, not assuming any seasonal skew to the results, Sage would seem to have some urgency to accelerate the development of its construction line, comprised by Sage 100  Contractor. (the old Master Builder) and Sage 300 Construction and Real Estate (the old Timberline). Acumatica has signed most of the large construction VARS because it has a  true cloud product. Sage, which doesn’t,. has the most to lose. Ir has not bought any construction software companies recently and its channel is  top heavy with construction resellers. In the ranking of top VARS through July 31, six out of the Top 10 were construction VARs. Perhaps Sage could take Intacct into this market and its adopt of ASC 606, so it meets standards for billable project expenses, looks like a step that direction. But it looks more focused on international expansion. Last year both Sage and Acumatica increased Procore integration—a classic way to move towards a deal. And with its new owner EQT Partners, Acumatica may have access to more capital for M&A. But Sage was able to pull the trigger on Intacct. Maybe it will here.

Last modified on Friday, 20 September 2019
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