SoftwareOne to acquire Crayon: The rundown
With the two businesses confirming their merger to cap off a year of transformation, here are CRN’ s ten key takeaways.
It’s official – SoftwareOne are set to merge, pending shareholder and regulatory approval.
This comes as the Swiss business has issued a tender offer valuing Oslo-HQ Crayon, which has been backed by shareholders, on the heels of reports that the two firms were in advanced talks last week.
The two companies announced the merger today, with Crayon CEO Melissa Mulholland commenting in a LinkedIn post: “Together we will remain focused on capitalizing on the unique position we have to accelerate market growth.
“And our combined efforts will enhance the breadth, depth, and support we provide our customers and partners.”
With the merger set to create a global powerhouse with a revenue base of CHF 1.6bn (£1.42), here’s what you need to know about the deal and what led up to this moment.
A global powerhouse in software and cloud
The merger of Crayon and SoftwareOne aims to create a global leader with operations in over 70 countries, and 13,000 employees.
Combining their complementary geographies, customer bases, and services will enable the new entity to capitalise on a $150bn market growing at "mid-teens," according to the joint announcement, fueled by trends like public cloud adoption and increasing demand for cloud spend management, data & AI, and security solutions.
It’s a scale move, but the two businesses do also boast complementary geographies and client bases.
Revenue synergies and operational efficiencies
The merger is projected to generate CHF 80-100m in cost synergies within 18 months, leveraging combined operational efficiencies like shared service centres and integrated delivery networks.
These cost savings come on top of SoftwareOne’s pre-planned CHF 50m cost-cutting measures, and, considering the business is in the midst of a restructuring programme, will be sorely needed.
Revenue synergies will stem from cross-sell opportunities and enhanced offerings across enterprise and SMB segments.
This positions the combined entity for sustainable growth and is expected to help address SoftwareOne’s profitability issues.
Co-CEOs
The combined company will be led by newly minted SoftwareOne CEO Rafael Erb and Melissa Mulholland, chief exec at Crayon, merging their distinct expertise in operations, partnerships, and customer-centric strategies.
Crayon will also nominate two new members to SoftwareOne’s board, ensuring its voice in governance.
“I am extremely fortunate to have my friend Raphael Erb as my Co-CEO on this journey, Mulholland stated in her post.
Building on contrasting financial momentum
While Crayon reported strong Q3 performance, with 28 per cent growth in its software and cloud direct business, SoftwareOne has struggled, citing sales execution issues from a rushed GTM strategy.
The merger could provide SoftwareOne the strategic and operational recalibration it needs to improve its underwhelming EBITDA margin and capitalise on Crayon’s robust market positioning.
Strengthening strategic relationships
The merger reinforces both companies’ deep relationships with hyperscalers like Microsoft, a critical factor for their growth in cloud solutions.
Crayon’s success as a Microsoft Partner of the Year and SoftwareOne’s global reach align well with Microsoft's evolving incentive strategies focused on AI, security, and migration services.
This merger aims to enhance the companies' importance to hyperscalers, enabling them to deliver more value to their partners and expand their footprint in key growth areas.
Combined customer bases offer better reach
Both companies share a customer-focused business model and a complementary go-to-market approach.
The merger will enhance their ability to deliver tailored services and solutions across customer segments, from SMBs to large enterprises.
By using their combined capabilities, the new entity will aim to offer broader and more differentiated services, including cloud optimisation, data and AI, as well as security solutions, per the announcement.
Positioning for long-term profitability
The merger is strategically timed to address profitability challenges both companies face amid a cautious market environment.
While Crayon’s profitability remains robust, its adjusted guidance in Q3 reflected tempered market expectations.
SoftwareOne, grappling with “execution issues in key regions”, and fresh from several aggressive takeover attempts by Bain Capital last year, will benefit from the cost-saving measures and revenue synergies projected in the merger.
Changing tides at SoftwareOne
SoftwareOne has undergone significant leadership changes and restructuring in 2024 to address underperformance and reposition the company for growth.
Erb, a company veteran, was appointed CEO in November 2024, succeeding Brian Duffy, whose tenure focused on implementing a new go-to-market strategy but faced challenges.
The company rejected multiple acquisition offers from Bain Capital during a strategic review, deeming them undervalued, and opted to remain independent.
Founding shareholders also reshaped the board of directors in April 2024, emphasising alignment with long-term growth objectives.
SoftwareOne’s operational excellence programme achieved CHF 27m in cost savings by September 2023, exceeding targets.
Strengthening regional market coverage
The merger brings together Crayon’s dominance in the Nordics and Europe with SoftwareOne’s presence in APAC and other regions.
This alignment could improve regional coverage and allow the new entity to target opportunities in fast-growing areas like APAC, where SoftwareOne reported double-digit growth.
The partnership will also focus on reinvigorating underperforming regions like EMEA, NORAM, and LATAM with a more cohesive strategy and stronger local execution.
Operational scale and digital innovation
The merger will leverage SoftwareOne’s scalable delivery model and Crayon’s expertise in channel partnerships to create a more efficient global organisation.
Investments in digital sales hubs and advanced transactional platforms are expected to streamline operations and improve sales productivity.
These moves are intended to drive better use of resources and empower sales teams to adapt to market demands and vendor incentives more effectively.