Technology specialist private equity firm Potentia Capital is to pay $66.3 million for around 25% of mobile phone communications company Soprano Design.
HT&E Limited (ASX: HT1) will sell its entire stake in Soprano in the binding agreement announced on 3 January.
North Sydney-based Soprano provides a global communications-platform-as-a-service (CPaaS) to more than 4500 enterprise and government customers.
Over 70% of Soprano’s business is conducted outside Australia in markets in Asia, North America, South America and Europe.
The company claims it provides a new generation of programable communications services by leveraging AI, 5G and data profiling to achieve hyper-personalised social interactions. Soprano’s flagship product Soprano Connect communicates via a wide range of channels including: SMS, and ‘over-the-top’ messaging apps such as WhatsApp, RCS and Google Business Messages.
Soprano was founded in 1994 by chief executive Dr Richard Favero and now manages around 10 billion interactions/messages annually.
Favero said the company had been fortunate to date to have supportive long-term shareholders and was confident Potentia would be an excellent partner to support ongoing market and product expansion.
Potentia investment director Amit Chand said: “We have tracked the CPaaS sector over a number of years and have been highly impressed by Richard and the broader Soprano management team. They have built an exceptional product that serves Tier 1 customers around the globe and has significant scale.”
Chand and Potentia founder Andrew Gray will join the Soprano board.
HT&E had been seeking to offload its Soprano stake for some time and said the agreement with Potentia followed discussions with various interested parties. The company had decided the Potentia cash offer was the most attractive for its shareholders.
HT&E said global CPaaS markets, and technology in general, had faced challenging conditions through 2022. The transaction provided a positive outcome in the current market and would enable the company to focus on its core business of audio services.
Sydney-based middle-market private equity firm Potentia raised a $485 million first fund in 2019 and is currently investing its $635 million second fund raised in 2022.
Soprano was advised on the Potentia transaction by law firm Herbert Smith Freehills. Potentia received legal advice from Johnson Winter Slattery and financial advice from EY.
Image: Soprano Design chief executive Dr Richard Favero.