Aconex lands $107.5 million in private equity deal

Australian software firm Aconex has secured $107.5 million of funding from United States-based private equity firm Francisco Partners in one of Australia’s biggest private equity deals of the year.

Australian software firm Aconex has secured $107.5 million of funding from United States-based private equity firm Francisco Partners in one of Australia’s biggest private equity deals of the year.

The deal was approved at a meeting of existing Aconex shareholders on Friday evening. The company has around 100 investors, mainly high net worth individuals and families and friends of Aconex executives.

The capital will be poured into product development, acquisitions and geographic expansion. Aconex chief executive and co-founder Leigh Jasper says the funding will create 50 new positions for software engineers, most of whom will be employed in Melbourne.

Aconex’s main product is a web-based system that manages the flow of information on construction and engineering projects. The company delivers its system using the software as a service model, meaning its clients pay to use the system for the life of their projects.

The company, which services almost $225 billion ($US180 billion) worth of projects across 66 countries, ranked 12th on SmartCompany’s Smart50 list for 2008 and posted revenue of $42 million in 2007-08.

Jasper says Aconex decided to investigate fund raising after being approached by a number of US private equity and venture capital firms. Aconex chose Francisco because of the firm’s cultural fit and experience with software firms operating in construction and mining.

Francisco has previously invested in Australian mining software company Mincom and has almost $5 billion in its technology-focused private equity funds. “If we can have some that success rub off on to us that would be great,” Jasper says.

New product development and any acquisitions will be focused around finding add-ons to adding to Aconex’s existing product range, rather than creating entirely new products. “We see the technology as a platform and that’s how customers are using it. Putting complimentary products on the platform is what we are about,” Japser says.

While he is unwilling to discuss specific acquisition targets, Jasper admits that the recent global economic slowdown could force some competitors on to the sale block. “It’s not about getting a cheap acquisition, it’s about getting the right acquisition,” he says.

Aconex has 37 offices around the world, but Jasper nominates South America and Eastern Europe as particular expansion targets. He says the company also continues to see strong growth in the Middle East and North African regions.

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