PE’s got talent: 6 private equity deals in HR software

Battery, Extens, Main Capital and Gemspring are among the firms making deals in the sector.

A “war for talent” – sparked by stresses from the global dispersion and mobility of employees in the remote working era and the emergence of new technologies such as AI – is driving activity in the HR software segment, Eric Erbeck, senior vice president in Houlihan Lokey’s technology group, told PE Hub Europe.

Here are six deals in the HR software sector that caught our attention (in reverse chronological order):

1. Battery Ventures to acquire majority stake in Ortec

Battery Ventures announced in January that it is making a majority investment in Ortec, a Dutch decision-support software and data science company. With Battery’s investment, Ortec will offer products and services through three new divisions that focus on logistics and routing, workforce-management and data science and consulting.

HR is a complex and competitive market, where Ortec’s edge is with large workforces subject to a lot of variables, Battery partner Zak Ewen told PE Hub Europe. “Half of our businesses in healthcare have a lot of regulation based on working hours, on title, on union rules, labour rules, etc, for large institutions.”

2. Extens invests in Imagine Human

Extens acquired a majority stake in Imagine Human, a French HR software service provider for risk prevention and quality of life at work, in January.

Lyon-based Imagine Human serves over 1,500 clients and reaches over four million employees via its WinLassie and ForMe products.

Extens’ investment will provide operational support and additional financial resources to strengthen Imagine Human’s market position in France and internationally, according to a release.

3. Investcorp enters €3bn DACH HR software market with Veda

Investcorp signed a deal in January to buy a majority stake in Veda, an HR software and payroll-as-a-service provider in the “large and fragmented” DACH market.

Veda’s revenues in 2023 were around €20 million and the company’s roughly 1,200 customers include airline Lufthansa and “many mid-market enterprises”, according to a statement.

The company focuses on the DACH region, where the HR and payroll software market for SMEs is around €3 billion, the statement said. It is headquartered in Alsdorf, Germany.

4. Main Capital-backed BCS snaps up Epowerhr

BCS HR Software, backed by Main Capital Partners, acquired Epowerhr, a Belgium-based HR software provider, in October.

Wommelgem-based Epowerhr provides software that supports clients in employee development, onboarding, training and performance and process measurement. It provides services to healthcare, financial services and industrial sectors.

Epowerhr’s addition will accelerate BCS’s organic growth in Belgium, according to a release.

5. Gemspring acquires ClearCompany

Gemspring Capital acquired a majority stake in ClearCompany (registration required), a Boston-based provider of human capital management software, in September.

ClearCompany primarily serves mid-market businesses and has more than 2000 customers.

6. GrowthCurve Capital buys payroll software firm Netchex

GrowthCurve Capital in June acquired Netchex (registration required), a provider of cloud-based human capital management and payroll software based in Covington, Louisiana. The seller is Primus Capital.

“Netchex is incredibly well positioned to capture the large market opportunity for leveraging software, data analytics and AI to help SMEs efficiently and comprehensively manage talent,” said Sim Allan, vice president at GrowthCurve.

PE Hub Europe expects to see more deals in the HR software sector in the coming months.