TeamSystem

Invested:
June 2000

Exited:
December 2000

Return:
4.1x MoC / IRR 52%

Sector:
Business Services

Stage:
Late (core strategy)

Headquarters:
Pesaro, Italy

Region:
Italy

Business:
Provider of accounting, tax and payroll management software

Business at time of investment

TeamSystem was a regional, founder-led software company serving around 28,000 clients, and employing approximately 200 staff. 

Investment rationale

Palamon identified an opportunity to drive a national expansion strategy focused on gaining significant market share in a highly fragmented sector.  TeamSystem presented a solid base business whose market position and past growth pattern suggested that it could achieve growth rates of 15-20% per annum.  In addition, TeamSystem’s large existing network was perfectly suited for internet exploitation.

Value creation

• Institutionalisation: Founder became Chairman and a new top management team recruited including CEO, CFO, Sales Director and Marketing Director

• Expansion: Personnel base was expanded by almost 100% in 3 years with 150 recruits at all levels and sales force increased significantly

• Strategic plan: Created long term strategic plan for national expansion from its existing market

• Investment: R&D and IT enhancements enabled TeamSystem’s product set to stay at forefront of the industry

Company at exit

Under Palamon ownership, TeamSystem grew its customer base to 43,000 whilst revenue and profitability grew by more than 2.5 times to €58 million and 23 million, respectively. The company employed more than 450 staff.

Result

In December 2004, TeamSystem was sold to Bain Capital generating a 4.1x return on invested capital and a 52% IRR.