When CSAM Health was looking for a minority partner to continue their acquisition-based growth strategy, Priveq identified the opportunity to invest in a business sector with substantial growth opportunities; e-health. Priveq’s experience of acting as a growth partner, with a track record of geographical expansion as well as acquisitions was well suited to CSAM’s needs.
CSAM Health was established when the Oslo University Hospital in Norway was about to move to a new location in Oslo, and the need for securing transition of the hospital’s some 3000+ IT systems was imminent. The project was henceforth commercialized, the company set up as private for profit and a management buyout was performed. CSAM quite quickly became a leading supplier of e-health to the healthcare systems in Norway and Sweden, offering software to care givers in Norway, Sweden, and UK, with focus on maternity care and cancer, also offering a platform for collaboration and integration of e-health software in general.
E-health is both topical and important
Within the e-health sector the customers are heavily supplier dependent, i.e., rarely change supplier, and hence acquisitions are needed to reach above market growth levels. In 2014, management had successfully made two acquisitions and was now looking for a minority partner to continue growing the CSAM business
Priveq was attracted by characteristics of the e-health sector; being both topical and of utterly importance. We were impressed by CSAM’s success within their field, Louise Nilsson, Partner and Investment Manager at Priveq says.
“E-health is an exciting area. Within the care sector, manual routines and processes are still quite common, with high dependency on hospitals, doctors, or nurses. Using IT as a component, you can both raise care quality and minimalize the risk of human error. Our view was that higher efficiency was reached by using CSAM’s solutions, which was why we were keen to join the company for the journey ahead,” Louise continues.
Clear goals for growth
During spring of 2014, Priveq became a minority partner in CSAM, and the growth plan was clear. CSAM would go from being a Norwegian consultancy and software company with software in two verticals, to a Nordic e-health company with a higher share of software revenues and with applications in multiple verticals. In order to expand faster they needed to make acquisitions, and with Priveq the company got help to find and evaluate acquisitions and strategically suitable vertical markets in which to invest.
However, the journey together began unsteadily when CSAM lost an important procurement. A speedier transition to a pure software company became necessary with adjustments to the cost base. Acquisitions were evaluated and implemented at a controlled pace, and after several years the company had a platform with well-diversified operations across the Nordic countries. In addition, more verticals had been added, and a significantly higher share of recurring revenue from software. During this collaborative growth journey with Priveq, a total of ten acquisitions were made.
“The journey with CSAM was not straightforward – it was a rollercoaster affected by various external factors. Together we experienced both difficulties and achievements and our partnership was put to the test, but that only made our partnership stronger. Because we knew we had good management in place, we could learn from our difficulties and look to the future,” explains Louise.
Stock exchange listing led to new opportunities
In 2020, the owners decided to jointly take the next step in CSAM’s development, both raising new capital for continued growth through acquisitions and offering more investors the opportunity to be part of CSAM’s future journey. The result was an issue of a bond and a listing of the shares on Euronext Growth in Oslo. The management, also main owners of the company, wished to continue being integral owners for the future, while it suited Priveq well to offer shares to new investors. In this way they could get the desired share distribution.
“I strongly believe in CSAM. I know that there are many software companies in this sector that are too small to be successful in the long term on their own, and that is where CSAM can be a good alternative. The first step outside the Nordic region has been taken. With the driven and well-coordinated management team that CSAM has, I believe they have great potential to achieve their goals,” concludes Louise.
Priveq remained as an owner for about a year after the listing before passing the baton to new investors. And it is clear that the partnership, highly valued by Priveq, has also had a major impact on CSAM.
“In Priveq we have found an active and genuine partnership that has been tested in both calm and stormy waters and this makes it extra strong,” says Sverre Flatby, CEO at CSAM.
“We have very positive experiences from our collaboration with Priveq, and see this continuing even after Priveq has left the CSAM ownership group,” adds Einar Bonnevie, CFO at CSAM.
Year of investment: 2014
Fund: Priveq Investment IV
Year of divestment: 2021
Priveq investment team:
Louise Nilsson, Senai Ayob, Mats Hjerpe