Bittersweet symphony: a complex carve-out followed by ambitious growth

November 30, 2021
Symfonia thought leadership_F

Newly independent and hungry for growth, Polish ERP software company Symfonia is making all the right moves to ensure it’s well positioned for success. The initial graft of a carve-out should be rewarded with enhanced growth as management work with MidEuropa to execute on ambitious consolidation plans.


The shift of enterprise to cloud is one of the great technological leaps of the last few decades. Symfonia is at the forefront of this for around 50,000 SMEs in Poland as a provider of FMS/ERP/payroll software. This is a growing sector driven by favourable macro dynamics and regulatory environment, and Symfonia has secured fresh funding to support its future growth as it increases its already impressive market share.


Symfonia was established locally 25 years ago, making it an important and longstanding part of the Polish IT landscape, and it was acquired by the listed UK software leader Sage Group plc. in 2005. The next 15 years saw strong growth, but in 2020 Sage made its divestment plans known as it looked to focus on its core markets, like many corporates post-pandemic.


As owners of Symfonia for so long, Sage was eager to secure a supportive steward for its growth, and so price was not the only consideration. Symfonia was resilient during COVID, with strong recurring revenues driven largely by subscriptions and low churn, and so a number of investors were interested, with CEO Piotr Ciski recalling: “MidEuropa stood out as being exceptionally professional. They asked all the right questions. We spent a lot of time building a relationship with them since it was important to me that they understood the real challenges and opportunities. I met with a lot of investors and had numerous discussions, but I really appreciated the mutual trust and discussions with MidEuropa – which weren’t always easy.”


The intricacies of a carve-out are complex, typically involving a transition period of six to twelve months during which systems are transferred to the new entity. Having started the process at the beginning of March 2021, Symfonia’s management are running three projects: the carve-out and separation from Sage, involving myriad systems and agreements; the day-to-day running of the business; and planning for the future.


Each of these is a full-on role, and management are drawing on MidEuropa’s support to drive some of this. “MidEuropa have been very supportive in ensuring we are crafting the right strategy for the future. As an organisation of around 300 people focussed on product development and day-to-day support to our clients, we very much look forward to MidEuropa’s expertise in strategic support – whether these are organic initiatives or acquisitions. MidEuropa strengthened the now six-strong supervisory board by bringing people in from abroad who have been particularly supportive in first 100 days and who we’d have been unlikely to attract ourselves, so this experience will really help us to build the business.”


Importantly, the partnership is collaborative rather than controlling. “We make decisions together and I can call the partners when I have questions. It is very helpful to have this support, especially at this demanding time for our business.”



Despite the ongoing transition process – which is as important as it is time-consuming – MidEuropa sat down with management to talk about progressing the M&A pipeline. MidEuropa’s extensive pre-deal diligence into the sector meant it had a thorough understanding of the market drivers, as well as a list of around 40 of the relevant players. This enabled swift target identification, and MidEuropa’s experience in executing on M&A meant they could impart their expertise in this area for the tactical approach and negotiations. “MidEuropa had mapped the market and were therefore a big help in scanning the environment, as well as offering their view on the ecosystem. They did a key part of the work and we did the final push to ensure the targets were right for us. MidEuropa’s experience has been invaluable here.” Indeed, close collaboration with MidEuropa around M&A has seen two acquisitions already completed: Reset2, a payroll software provider in Poland; and Cloud Planet, a leading cloud software provider for micro segment in Poland.


To ensure these go well – integrating the acquisitions as well as an ongoing M&A pipeline – building out the management team with experienced talent is key. “We need someone to work closely with me to supervise projects, not least the M&A. We will bring on board people who specialise in integration and strategic vision, and MidEuropa’s network is already proving very strong in this area.”


It’s a busy time for management, but ambitious plans mean the future is bright for Symfonia. “Our relationship with MidEuropa works because of our openness and the fact they share our values and we have a shared vision for Symfonia’s future. To work with someone your respect is necessary; to like them is a luxury. We are lucky, we have both.”