Global tax software provider Sovos is to acquire Istanbul-based Foriba, a leading player in e-invoicing, e-delivery notes, e-receipts and periodic value-added tax (VAT) reporting in Turkey, for an undisclosed sum, Sovos said on May 28 in a press release.
Sovos is owned by Hg, the London-based specialist private equity investor focused on software and service businesses. Hg took a majority stake in Boston-based Sovos in 2016 alongside Vista Equity Partners.
Deloitte served as financial advisor to Sovos, and Skadden and Akol provided legal counsel.
Gokce provided legal counsel to Foriba and its investors, Revo Capital and the International Finance Corporation (IFC).
Revo Capital, founded in 2013, is an Istanbul-based angel investor focused on internet and technology start-ups. It invested in Foriba in 2014 and the Foriba stake sale is its first exit.
Revo invests in seed to early and growth-stage startups in Turkey, Eastern Europe and Baltics. It provides investments of between $0.25mn and $4mn in a given investment round. It has invested in a total of 19 start-ups so far and currently operates with a fund of $66mn. Revo is working on a second fund worth $60mn.
Some of the fund’s key investments include Parasut, Turkey’s leading financial management solutions provider; Paycore, a provider of end-to-end payment solutions and the Turkey region’s largest processor; Capturefast, an RPA focused cloud-based document and data capture application; and V-Count, an e-commerce style visitor analytics platform for the physical world.
Revo’s anchor investors include IFC and the European Bank for Reconstruction and Development (EBRD).
Endeavor Catalyst is also an investor in Foriba.
Foriba was founded in 1999 as a SAP systems integrator and remains rooted in the market through its SAP OEM agreements and blue-chip clients.
Sovos will integrate Foriba solutions into the Sovos S1 platform, which enables companies with multi-country operations to centralise compliance to meet all global indirect tax requirements.
Foriba delivers 25 different solutions and services in more than 10 countries with regulatory compliance requirements, and its customers include more than 450 multinational companies. Foriba solutions include e-Invoice, e-Ledger, e-Archive, e-Delivery note, e-Ticket and e-Signature. As a compliance service provider for electronic invoicing, Foriba creates, signs and stores more than 30mn electronic documents per month.
Sovos has recently bought real-time tax compliance leaders Invoiceware, Paperless and TrustWeaver.
Turkey has had complex and mandatory digital VAT controls since 2014, and it's one of the few countries outside of Latin America with a mature e-invoicing mandate.
As one of Turkey's leading providers, Foriba has continued to extend its digital tax compliance capabilities with services for additional Turkish mandates on electronic customer receipt reporting, the mandatory transfer of accounting ledgers, e-delivery notes and other requirements.
With Spain, Hungary, Portugal, the UK, Italy and other countries investing in real-time and near-real-time transaction control requirements, Sovos plans to use Foriba's experience to help customers address the new wave of digital taxation.
"By 2025, companies in VAT economies are expected to exchange more than 75 percent of all invoices electronically with tax administrations in real time or very shortly after the invoice-exchange process," Sovos CEO Andy Hovancik said.