A Growth Equity Position Doesn’t Have to Mean A Passive Investor - Accel-KKR Case Study

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.

Key Facts

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

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.

Our team was excited to partner with Accel-KKR, a firm with a long track record of helping great businesses accelerate their growth.

Frederick Davison

Founder & Former CEO

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.
• The three founding leaders were still the top three executives at the time of exit.
• 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.

Value Created

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

Cloud Migration

Transitioned from a legacy platform to next-generation cloud-based products.

Consulting

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.

M&A

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.

Leadership

Welcomed new leadership to lead key functional areas including technology, product and marketing.