After the recent Belgian acquisition of Dokeos Limited, Lyvia Group is searching for more Benelux deals.
The Swedish Lyvia Group was founded in 2020 is currently executing a buy-and-build strategy in Europe in the B2B software market. The company, that can be characterized as a combination of a traditional private equity firm and an IT/software company, is active in Enterprise Solutions, Managed Service Providers, Dev Ops as a Service and Digital as a Service.
“We want to become a one-stop digital shop for our customers”, says Hossein Araghi, the leader of Lyvia Group's Benelux operations, who joined the company two years ago. “So far, we have acquired 43 companies. But our journey has just begun. Our core beliefs are perpetuity, autonomy and non-invasive support. These are the three pillars of Lyvia's investment philosophy.”
A recent acquisition has been Dokeos Limited in Belgium, a leading Learning Management System (LMS) specializing in regulated industries. With this acquisition, Lyvia Group strengthens their offering within SaaS and business-critical software and enters the Belgian market.
“The core and beating heart of Lyvia remains in Enterprise Solutions", says Araghi. “Some might question just how essential an LMS can be, but Dokeos Limited operates in highly regulated industries such as pharmaceuticals, banking, and insurance. In these sectors, unqualified or uncertified employees may be restricted from accessing the company's systems altogether. As a result, the LMS becomes an indispensable part of ensuring compliance and business continuity."
A journey from consulting to M&A leadership
Hossein’s path to leading Lyvia’s Benelux branch is a unique one, blending management and strategy consulting with hands-on leadership experience. Having worked with the Boston Consulting Group (BCG), he advised on acquisitions and post-merger integrations, helping businesses, both inside and outside private equity, to grow.
His executive role at Maersk, managing global operations across 64 countries, brought him face-to-face with the complexities of running large, diverse organizations. This operational knowledge is key to managing Lyvia’s ambitious buy-and-build strategy.
"Because of my consultancy background and this executive experience, I think I look through a slightly different lens when talking to companies", says Hossein. “Entrepreneurs see that I’m interested in more than just their financial statements – I’m focused on their organization, culture, leadership, and team dynamics. I believe those aspects are critical to success.”
The buy-and-build approach: what sets Lyvia apart?
While many private equity firms focus on buy-and-build strategies with the end goal of exits, Lyvia Group takes a different approach. Hossein highlights that exits are not part of their strategy. Instead, Lyvia aims to act as a perpetual owner, building long-term relationships with portfolio companies and clients. This ‘eternal ownership’ offers a unique stability to businesses and entrepreneurs alike.
There are three additional elements that makes Lyvia stand out. “The first one is autonomy", Araghi explains. “We strongly believe in preserving as much autonomy for the entrepreneurs post-acquisition as they had before. This isn’t just a verbal promise – we actually write it into the transaction documents, legally guaranteeing that they remain in control of their company’s direction.”
The second element ties into how Lyvia Group select targets. “When evaluating companies, we’re not just focused on the business itself but also on the entrepreneur behind it. A great company with a poor entrepreneur won’t interest us, and vice versa. We’re looking for strong entrepreneurs who are eager to continue growing their business with a high level of independence.”
Finally, they don't force their portfolio companies to integrate. Hossein: “If one of our companies wants to pursue an inorganic growth strategy – essentially their own buy-and-build – we fully support them. We help them with acquiring companies and managing the post-merger integration. But we don’t push companies to merge or integrate just for the sake of it.”
Adopting the philosophy of servant ownership
A current hype in management is the concept of servant leadership. This inspired Hossein to introduce the philosophy of ‘servant ownership’ at Lyvia Group, to emphasize that Lyvia, as the new owner, exists to support and empower entrepreneurs, not to control them. Lyvia offers optional services to portfolio companies, ensuring value without imposing governance.
Servant ownership, according to Araghi, is a central guiding principle for Lyvia’s operations. It fosters a meritocratic environment, where support services must be as valuable as those offered by top-tier advisors. “This keeps us on our toes", Araghi explains. “And it ensures that any value we add is truly beneficial. Ultimately, it is up to the former owners or entrepreneurs to decide if they want to use these resources to further their growth. “Servant ownership acts as a lens through which we view all of our actions. For example, when we introduce new reporting requirements or policies, we need to ask ourselves: are we practicing servant ownership, or are we serving our own interests? This distinction is crucial and should guide our internal policies, actions, and structure.”
Future-proof performance
Hossein Araghi emphasized that only 1 in 10 companies considered are eligible for acquisition, as strict criteria are applied. These include historical margin and revenue trends, the proportion of recurring revenue, churn rates, and market factors like technology and competition. Cultural fit with the entrepreneur is equally crucial.
“Lyvia Group seeks companies with stable, predictable growth rather than rapid, unsustainable expansion", according to Araghi. “Our goal is steady, long-term success with reliable, cash flow-positive performance, not purely extreme growth.” When evaluating acquisitions, success is defined by more than just financials; it includes integrating the acquired company into Lyvia’s ecosystem to create synergies and offer joint solutions.
“Ensuring that a business is future-proof is also critical", says Hossein. “To ensure future proofing, it’s important to find niche sub-sectors where digitization maturity is still low. In these areas, you can easily contribute to improvements. The expectations are lower, and competition is less intense, giving you more time to adapt and become future-ready. In contrast, if you look at horizontal markets like BI (Business Intelligence), it's highly competitive and saturated. There’s a constant race to develop new features and staying relevant is nearly impossible because new versions are released so frequently. It’s a win-or-die environment, which is why we avoid those sectors. Focusing on these niche areas gives us – and the companies we acquire – a longer runway to adapt and ensure their products or services remain relevant in the long term.”
Evolving role as Head of M&A
Hossein Araghi shares two major lessons from his experience in M&A. First, he highlights the critical role of advisors in the acquisition process. Entrepreneurs, often selling their company for the first time, rely heavily on their advisors, sometimes even more than their own judgment. “Therefore, building a long-term, trusting relationship with advisors is essential for successful deals", Araghi emphasises.
The second lesson is the importance of flexibility in deal structuring. Lyvia Group offers customizable options – whether it's cash upfront, earn-outs, vendor notes, or shares – to meet the specific needs of entrepreneurs. While this flexibility has been key to their success, it also adds internal complexity, requiring a careful balance to manage legal and financial challenges.
Conclusion: a new model of M&A
For B2B software entrepreneurs in the Benelux, Lyvia Group offers a refreshing alternative to traditional private equity strategies. Their focus on autonomy, servant ownership, and long-term growth aligns well with entrepreneurs looking for stability and independence. As digitization continues to sweep across Europe, there are substantial opportunities for Lyvia in sourcing and acquiring the right companies.
Hossein Araghi concludes: “The trend of digitization, which many people consider a thing of the past, is really just beginning. While we might be slightly ahead of the curve in the Netherlands, even nearby countries like Germany have a long way to go. Globally, governments are adopting digitization at rates we couldn’t have imagined a decade ago, so there’s massive potential for growth. As a European player, we’re also in a unique position. Europe has proven to be a great environment for software entrepreneurs and companies to establish and grow successfully. We’re at a crossroads where the market is expanding in line with digitization, and Western Europe, in particular, offers a stable business environment that fosters the success of software companies. This combination makes me very optimistic about the future.”
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