WorkWave (Holmdel), a Software-as-a-Service cloud-based business that serves the field service, last mile delivery and logistics industries, has signed an agreement to be acquired by IFS , a global enterprise applications company. Details of the deal were not disclosed; however, a story in Reuters said that this was IFS’ biggest acquisition to date.
WorkWave will remain in New Jersey, and there will be no changes in its leadership team, location, or employee base, said president and CEO Chris Sullens in an interview.
“We are committed to New Jersey and are excited about growing in New Jersey,” Sullens said. “I think it is important to New Jersey that a tech company has grown significantly enough that a global industry leader like IFS decided that it was important to add it to their portfolio.” WorkWave plans to continue to grow, and hopes to double the size of its footprint over the next five years, he added.
The acquisition will help WorkWave accelerate its progress and create value through growth, versus creating value through consolidation, which is the object of some acquisitions, Sullens noted.
IFS develops and delivers enterprise software for customers around the world who manufacture and distribute goods, maintain assets, and manage service-focused operations in industries such as aviation, defense, energy, utilities, engineering, construction, oil and gas, and services, as well as the manufacture of automobiles and other products. Headquartered in Sweden, IFS has over 2,700 clients and 1 million users worldwide; and it maintains offices around the world.
“We actually will be a separate division within IFS,” Sullens said, adding that he will report to IFS’s CEO. IFS has an Americas division, but it only handles sales and marketing for the company’s own enterprise solutions so “they’ll maintain their headquarters and we’ll maintain ours.” The two divisions will work with each other when it makes sense, he said, noting that the products WorkWave sells and the market it serves are different from those of its new parent’s Americas division.
Sullens said that he sees several synergies with IFS. “We both feel strongly that the service industry is a very attractive vehicle to sell software. They have a large presence in the service industry software market, and the vast majority of our business is in the field service industry software market.” After the acquisition is finalized, WorkWave “will be the only company in the world that is able to solve the needs of service industry businesses, regardless of their location anywhere in the world and regardless of the complexity of the needs that they have.”
In addition, joining forces with IFS will help WorkWave expand its international footprint, Sullens said. “About 6 percent of our customers are outside of the U.S.; and for IFS, the vast majority of their enterprise customers are outside of the U.S. They have presence in more than 50 countries, with 93 offices around the world. As we expand, we will continue to focus on increasing our market share in the Americas, but as we have opportunities and customers outside of the U.S., we can leverage their brand, their infrastructure, their footprint and resources to be able to serve those customers much more cost-effectively than we could on our own.”
This was the right time to sell the company, he explained. “We were a private equity-backed business and we have grown very rapidly. I was looking to take the company to the next level. … A big part of our move to Bell Works was because we planned for significant growth and expansion in our business as well as our employee base.” In parallel, Sullens was taking strategic considerations into account.
“I was looking at our current partners from a banking perspective as well as a private equity perspective,” and asked if they would “continue to be there to support us as we continue to acquire companies, continue to invest in our team.” There were approaches that could have worked for a private equity-backed firm, but a strategic investor like IFS “had a set of resources that I felt would take us to the next level.
“Being part of an almost $500 million software business that has a great reputation and is a leader in the software space at the enterprise level allows us to become more aggressive in terms of how we invest the business.” Both businesses “come in with the same mentality. We are both software companies and we know what it takes to build product, to implement products with customers and serve our customers afterwards. There is much more alignment with someone such as IFS in terms of understanding what we need as a business to grow and them being excited about providing the funding to allow us to do that.”
IFS, he said, was excited that WorkWave is going to focus on executing the five-year plan it already has in place. With the acquisition, WorkWave can look for opportunities to accelerate that plan. At a high level, Sullens said that the company will continue to invest in PestPac, its pest-control product; expand PestPac’s footprint; and improve the experience of it pest-control customers. This is the largest field service vertical WorkWave has. The company will also expand beyond the pest-control field service vertical to cleaning and janitorial franchise businesses; and to lawn and landscaping; plumbing; and heating, ventilation and air-conditioning (HVAC) businesses. “We are doing that through a product we are getting ready to launch in Q4.”
The company is also developing software to expand in the last mile logistics market for companies that do package delivery, food delivery and prepared meal delivery, a growing sector. “We have some exciting initiatives going on that will really differentiate our products in this market and allow us to grow even faster.”