RALEIGH – Sageworks, the 19-year-old emerging entrepreneurial company that sells financial software and information to U.S. financial institutions, has been acquired by Accel-KKR, a private equity firm based in Menlo Park, California.
While financial details were not disclosed, Sageworks co-founder and former CEO Brian Hamilton tells WRAL Techwire: “I’m confident it’s one of the largest transactions in the Raleigh area and North Carolina in the last couple of years.”
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Hamilton said Sageworks received calls from four or five private equity firms a week the last couple of years, “But I’m glad we took their call. They’re focused on growing companies and they have a lot of experience in our exact sector, fintech. It was a good match right off the bat. We think it’s a good transaction.”
Park Durrett, managing director at Accel-KKR said in a statement, “Companies like Sageworks are essential partners to financial services institutions that are both under pressure to grow but also to comply with a constantly changing regulatory environment. We are excited about the opportunity to work with the Sageworks team to continue to innovate and deliver increasing value to its customers.”
Sageworks brought is flagship product, ProfitCents, to market in 1998 based on a proprietary artificial intelligence system. It was originally designed to convert financial numbers into plain language. Hamilton admitted at a recent NC Tech event that when the company first took the product to the numbers guys, who understand numbers, they asked, “Why would we want to do that?”
So the company had to pivot. “The ability to pivot in a business and find a market is not trivial. We spent the first nine years trying to find a market. Most of the value of our company has been created in the last ten years. A lot of the time in tech, people think a company flies or they die. Sageworks is a case-study in pivoting until you find the right product for the right market.”
Sageworks certainly did that. It now sells financial institutions products focused on lending, credit risk, and portfolio risk. Its technologies are used by more than 1,200 U.S. banks and credit unions. Its financial analysis software is used by thousands of accountants. It has generated millions of analytical reports aimed at making finance easer to understand and helping people make better decisions.
Hamilton said he expects most if not all Sagework’s 400 employees will remain and the firm is staying right where it is in Raleigh. “The company is cashflow positive and growing. Why would they mess with a good thing?” he asked.