Wax Digital opens door to sale or investment

WAX Digital, the fast-growing North West software company, has opened the door to a multi-million pound private equity investment or a trade sale.

The Hyde-based company, which counts global giants such as Corus and Xerox, retailers Thorntons and PC World and holiday company Center Parcs among its growing list of customers, has appointed KPMG corporate finance to advise it on strategic options.

Wax, which will turn over £5m this year and employs 70 people, was launched in 2001 with £500,000 investment from London-based venture capital firm Nova.

It is understood that while Nova is seeking an exit, interest is high in Wax – which has been profitable since its second year.  A price tag of up to £20m has been mooted. 

Director Daniel Ball told TheBusinessDesk.com the process was at an early stage and was about allowing the businesses to exploit opportunities in the market place.

He said:  “The business is performing well – turnover and profits are well ahead of last year. The issue is that we have picked up a couple of big global contracts in the last year which has highlighted the opportunity in front of us.

“We’re not certain that we are of sufficient scale and resources to take advantage of these opportunities so we have appointed KPMG to work with us to identify the next stage.”

He said the board has ‘no agenda’ towards a total sale or VC investment, but was keen to see if there is a means of “doing what we do better.”

A source close to the situation said: “Wax Digital is great niche business with excellent customers and strong growth potential. The process is at an early stage and strong interest is expected from private equity and also trade buyers.”

Wax Digital delivers eProcurement software that helps major organisations make costs savings when purchasing stock or buying goods.

Mr Ball says the company has sought to bring a “consumer experience to business software” to allow customers’ employees to purchase goods from approved suppliers in a simple manner via a single website.  

In recent weeks Wax’s secure software has allowed Thornton’s to conduct an online tender auction for chocolate and 100 million litres of diesel for its vehicles.

It is currently working on technology allowing its systems to be accessed via iPhones and BlackBerry devices, Mr Ball said.