Workshare appoints new CEO led by private equity backer SEP
Workshare has brought in a new CEO in an appointment understood to have been driven by its private equity backer Scottish Equity Partners. Michael Garrett (pictured) took over from Anthony Foy in October. Garrett previously led global services for Micro Focus following its merger with Hewlett Packard Enterprise’s software division, creating the 7th largest public software company.
According to a statement from Workshare out later today (23 November), Garrett is joining to take the company through its next phase of transformation and growth.
His appointment comes as people familiar with the situation tell us that SEP, a high growth investor, has become impatient with the rate of growth at Workshare, which they injected just under £20m into in 2012, when Foy engineered a takeover of Workshare via a merger with SkyDox.
Since that time the focus has been on integrating Workshare’s policy-based document comparison and metadata removal application with SkyDox’s cloud-based file sharing collaboration platform.
2013 saw the launch of integrated product Professional 8, while in 2014 in a major evolution of the software Workshare launched Professional 9. Workshare 9 was launched at the start of 2016 and in 2017 the company launched 9.5, which allows users to compare, protect and share documents in the same space.
Workshare, which having transitioned from a perpetual to subscription licensing model broke even in the first quarter of 2016, has been investing heavily in its secure file sharing capability and online workspace Transact and its data loss monitoring Secure product. When we spoke to chief finance officer Peter White at the tail end of 2017, he told us: “Secure and Transact revenue is growing by 247% CAGR [compound annual growth rate] albeit from a much lower base.” He added: “The comparison business is great and it grows. Others are more nascent but growing exponentially.”
Transact is an M&A transaction support tool that has over the past year won international law firm clients including Clifford Chance and Fieldfisher.
But while Workshare is assessed by technology sector intelligence provider Megabuyte as “one of the better business transformations over the last four to five years,” it also notes that Workshare is “not one of the fast-growing software businesses under Megabuyte coverage.”
While Workshare’s debt position is understood not to be a major issue for SEP, Garrett joins in a year that has seen Workshare refinance and extend a portion of its debt, which now totals around £28m, albeit around £19m of that is a ‘deep discounted’ loan owed to SEP, repayable on sale of the company if not before.
In June 2018, Workshare extended its revolving credit facility with Wells Fargo from £7.5m GBP to £12.5m.
A spokesperson for the company said: “As you understand from your prior discussions with our CFO, the £28m is largely comprised of deep discounted debt which is akin to equity. The loan facility has indeed been increased by our bankers, Wells Fargo, as a clear indication of their continued support and belief in the financial stability and future potential of Workshare. To date we have accessed considerably less than half of this facility.”
With private equity interest growing in the legal sector it is worth noting that, according to data from global consulting firm AlixPartners, 73% of CEOs are likely to be replaced during the private equity investment life cycle, and 58% of replacements occur within two years.
SEP has backed some of the UK’s most successful technology companies and at the end of 2016 completed its exit from Skyscanner after its £1.4bn sale to Ctrip. SEP, which invested in Skyscanner in 2007, was a majority shareholder, owning approximately a third of the travel search company.
Workshare official comment
Asked if Garrett’s appointment was an SEP-led decision, Workshare told us: “As with any CEO appointment the board of the company are heavily involved in the process and as the majority shareholder, SEP were part of this appointment.”
We also asked if Garrett has been brought in to improve the company’s financial position and a spokesperson said: “Workshare, as with any organisation, is continually focused on the overall financial performance and its improvement. This will continue to be a focus under Michael’s leadership.”
Foy did not immediately return a request for comment.
Here is the full release from Workshare:
Workshare Continues Transformation with Appointment of new CEO, Michael Garrett
London, (November 21st, 2018): Workshare, the leading provider of content comparison and protection technology, today announced the appointment of Michael Garrett as its new CEO. As an accomplished technology executive, Michael will lead the company through its next phase of transformation and growth.
Garrett is a hugely knowledgeable technology leader, bringing more than 25 years of industry experience to Workshare. He has directed large and complex organizations through significant periods of change to deliver robust customer success, growth and profitability.
Michael previously led Global Services for Micro Focus following its merger with Hewlett Packard Enterprise’s software division, creating the 7th largest public software company.
With Hewlett Packard he spent 15 years, delivering software integration and solutions to more than 10,000 customers. He also held a number of General Manager and sales leadership roles both in EMEA and the UK. Prior to Hewlett Packard he held sales, pre-sales and technical positions at Oracle Corporation, InterX, and Siemens Nixdorf.
“I’m excited to join Workshare at this pivotal time in the company’s history,” said Garrett. “As I got the chance to know Workshare through the hiring process, I have found it already has the three key factors for large-scale growth – a strong customer base, innovative products and great people. With the Workshare platform developing in a cloud environment, we can take solutions to an even broader market and grow our large customer base more quickly, which will make for an incredible future.”
Garrett’s appointment is a clear reflection of Workshare’s investment in the future after another award-winning year of innovation and successful customer acquisition. Workshare is poised for major expansion in the cloud market and Garrett’s unique experience in turning companies into tech titans will follow this trajectory.
Barrie Hadfield, Workshare CTO, commented: “Enormous opportunities lie ahead for Workshare and we couldn’t be happier that Michael has joined our family. He is already making impact helping us and our customers achieve continued success.”
This change of leadership follows the departure of Anthony Foy as the previous CEO and the appointment of Lesley Dunn as Chief Commercial Officer.
Lesley is an IT Industry Leader and has worked in numerous blue-chip organizations, including Hewlett-Packard, PWC, Ernst & Young and Ariba, as well as start-up and SME software providers. The appointments of both Michael and Lesley signal a new strength and expertise within Workshare, now poised for the future growth.