Technology M&A Review - January 2020 GLOBAL TECH BANKING - ICON Corporate Finance
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1
Technology
M&A Review
January 2020
GLOBAL TECH BANKING
2 3
Key M&A Statistics No. EU TECH .2
.0 / 2
019
DEC 31 2
Key
019
M&A DEALS 2
12
1 8
DEC 3
20
3,332
1
3
C
DE
/ 3332
Findings
UK VALUATION
EV/REVENUE (X)
252
+2%
2.2
31 2019
3
DEC
65
8 1
94
20
31
• Slower GDP growth means lower
C
7/
DE
No. GLOBAL DE
954
interest rates for longer
TECH M&A DEALS
C
18
No. UK TECH
31
• Wave of cheap money still fuelling
DEC 31 20
2
9,465
018
M&A DEALS equity prices. NASDAQ +32%
731 /
• Stock markets are at record highs
19
878
20
878
31
UK VALUATION • Confidence feeds into healthy Tech
DEC
M&A activity globally
EV/EBITDA (X)
DEC 31
–
17.7 / 16.6
16.6
• Some valuations look stretched at
>10x revenues
201
+20%
9
• UK M&A activity +20% to new record
18 20
• Key is buoyant PE backed Buy-and-
31
Build and overseas buyers
EC
D
• ClearCourse, Civica, Access Group
C 31
2018 6 63 5 / and Iris are most active in UK
DE 873
3
Key Macro Statistics D
• IPOs at near record lows
EC
31
NASDAQ
2
D EC 31 2 • Year of The Pig was a bit of a snorter
019
018
8,733
33
09
/4
0 / 7 217 Brian Parker, Head of M&A
16
3 80
DE C
FTSE TECHMARK 31
7
18 2 01
4,167
20
+44 (0) 207 152 6375
DE C
9
+32%
31
31 2019
brian@iconcorpfin.com
C
31 2019
DE
D EC
42 BITCOIN (US$)
75
7,217
8 /
672
FTSE +26% 201
9
18
7,542
31
DEC 31 20
C
DE
UNICORNS
33
US$/£
438
+90%
/ 1.
EXCHANGE RATE
D E C 31 2 018
1.26
+12%
1.33
31 2018
+47%
2 98
D EC
/4
+5%
38
DE
C
31
019 2
TECH M&A REVIEW4 5
EUROPE TECH M&A
Highlights
DEALS (No.)
3,332
3,328
3,286
3,252
3,132
3,128
3,130
The Year of the Pig turned out to be a Cheap debt has fuelled much of the
real rip snorter of a year. Global equity current cycle. So, in 2019 investors were
markets reached new highs, yet again. faced with investing in up to $17tn in bonds
2,850
2,829
The NASDAQ was up an impressive 32% that are negative yielding (i.e. making
and even the Brexit laden FTSE was up a negative return) or look at alternative
12%. The US economy has had a great run ways to make a positive return. That has
under The Donald with full employment, pushed more money into riskier assets
high corporate earnings growth, and has
2,496
had its longest run since WWII. Economic
growth remains stubbornly low and so
interest rates remain on the floor as central “M&A
Cheap debt is fuelling
activity”
banks in both the US and EU prime the
pumps to ensure the engine doesn’t stall. UK TECH M&A 2010 2012 2014 2016 2018 2019
As a result, equity markets have moved DEALS (No.)
ever higher and valuations of higher growth and the technology sector has been a
878
sectors like Technology have outperformed prime beneficiary. It’s also why the number
as investors seek growth. of unicorns continues to rise and part of
the reason why bitcoin
829
has jumped this year from
GLOBAL TECH M&A under $4,000 to over
DEALS (No.) $7,000.
9,981
766
Yet IPO volumes are
753
at near record lows. It
9,614
9,600
9,547
731
731
731
sounds nonsensical but
9,465
“toUKa record
717
can be put down to two deals up 20%
710
high”
main factors: firstly, many
9,188
of the targets are getting
678
snaffled by PE or trade
buyers before they can
list, and secondly some of
8,530
the valuations implied by 2010 2012 2014 2016 2018 2019
8,316
previous funding rounds
are just not palatable for Pinterest and Lyft in the US, and Trainline of the changing funding landscape with
institutional investors who in the UK at some pretty racy valuations. the amount of funds raised by private tech
7,867
7,803
like old fashioned things However, some of these companies had companies reaching new records and the
like profits. 2019 did see a tough time after listing and others like number of unicorns (valued at >$1bn)
a surge in large IPOs like WeWork had to pull their listings. However, rising nearly 50%.
2010 2012 2014 2016 2018 2019 Uber, Peleton, Slack, the weak IPO market is also a reflection
TECH M&A REVIEW6 7
TECH M&A VALUATIONS – GLOBAL
The number of Global Tech M&A deals remains healthy 2.2 20
and similar to 2018. So, the M&A market remains healthy
and some of the valuations are real snorters, particularly
in the US, with FNIS, VMWare, SAP, Microsoft, Google, 2.0 18
Cisco, OpenText, Workday, Adobe, IBM, Temenos, Twilio, Price/EBIT
(RHS)
Salesforce and PayPal all having paid more than 10x
revenues for recent acquisitions. 1.8 16
The number of UK Tech M&A deals grew 20% to 903,
a new record. It was particularly impressive given all
“valuations
...But overall
have 1.6 14
the Brexit uncertainty. One of the main drivers remains
the weaker currency,
fallen”
which attracts overseas 1.4 12
acquirers, who still
account for nearly 40% of TECH M&A VALUATIONS – UK Price/revenue
1.2 (LHS) 10
all deals. However, in the 26
UK the standout activity
in Technology M&A is 24
1.0 8
2.9
the growing presence Price/EBIT
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
22
of private equity funded (RHS)
buy-and-build programs 20
notably: ClearCourse 2.4
Partnership, The Access 18
Group, Iris and Civica. TECH M&A VALUATIONS – EUROPE
They seem to be pigging 16
1.9 2.8 20
out on a wave of cheap
money. 14 2.6
18
1.4 12 2.4 Price/EBIT
(RHS)
“valuations
Price/revenue 10 2.2
Some (LHS)
16
are 0.9 8
2.0
”
2011 2012 2013 2014 2015 2016 2017 2018 2019
stratospheric... 1.8 14
1.6
12
The Chinese Year of The Rat could be another great 1.4
year to be an owner of a technology company.
1.2
Continued automation/disruption and increased recurrent 10
revenues, means the sector remains attractive. The 1.0 Price/revenue
greatest risk is that interest rates move up significantly - (LHS)
which is pretty unlikely in the run up to the US election later 0.8 8
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
this year. So it remains a great time to be considering an
M&A transaction.
TECH M&A REVIEW8 9
Largest UK Tech M&A Targets in 2019
UK Tech M&A
3,120
EV £m PURCHASER TARGET VALUATION (EV / Rev)
5.4
1,350 10.3
Quite remarkably, 2019 has been a record
level for UK Technology M&A activity 728 2.6
with the number of deals up 20%. The
Private equity funded acquisitions are one
domestic fears and political uncertainty
of the key drivers for M&A activity in 2019. 699 5.1
over Brexit have not deterred buyers. Far
The number of VC/PE backed acquisitions
from it, there is a strong rise with over 900
has risen 23% in 2019 and remarkably is up 538 6.3
deals. Overseas acquirers remain key,
over 70% on the number of similar deals 5
accounting for nearly 40% of all deals
years ago. 9.5
but we have also seen a real jump in the 410
amount of PE backed buy and build deals. Interesting to note that Roger Mountford,
The cheap currency, low tax rates and a Chairman of Hg Capital, commenting on 377
very attractive pool of technology talent the results of their portfolio companies
are key drivers. Its very much business as said: “Over the twelve months to 30 240 5.3
usual – Brexit or no Brexit. June 2019, the top 20 companies, that
make up 88% of our portfolio by value,
230 5.6
reported sales growth of 26% and EBITDA
“ Foreign buyers still account growth of 35%. These are the strongest
198 350 13.2
”
trading figures we have ever reported”,
for nearly 40% of UK deals clear evidence of the health of the UK
technology sector. Also, they reported a 165 5.7
UK TECH M&A – OVERSEAS ACQUIRERS
valuation multiple (EV/EBITDA) of 19.5x
and net debt to EBITDA ratio of 6.3x for the 161 2.9
top 20 investments. Giving an idea of both
38%
the high valuations and high leverage that 135 0.4
37% the PE sector enjoyed in 2019.
36%
109 6.7
35%
UK TECH M&A – PE/VC
BACKED ACQUIRERS
24%
105 3.5
32% 23%
100 3.0
21%
244
303
254
280
324
20%
85 2.5
2015 2016 2017 2018 2019
16% 80 10.8
“The number of PE
backed deals has risen 78 1.3
”
122
166
153
171
211
by >70% in 5 years
77 2.4
TECH M&A REVIEW 2015 2016 2017 2018 201910 11
its offering into the general insurance and On the other hand, Experian called SafeCharge, for £699m in an all-cash
FinTech banking markets. SimplyBiz raised a total of
£29m through share placing, approximately
off its £275m proposed acquisition of
Clearscore. The deal was subject to
deal. The valuation of 5x revenues is
unremarkable in the current market but
The list of acquisitions made by ION £37m of borrowings from new bank facilities approval from the CMA and the Financial provides a decent exit for Teddy Sagi, the
Trading is long and impressive and includes to fund the deal. Defaqto was valued at a Conduct Authority (FCA). However, it 68% shareholder and Playtech founder.
Patsystems, Anvil, Wall Street Systems, healthy 5.4x revenues. It currently operates was pulled as it was potentially a threat to SafeCharge’s Payments Engine makes it
Triple Point Technology and then in 2018 a FinTech platform for 8,500 advisers and competition in the market. It looked bold easier for online businesses to manage
they boldly acquired UK listed Fidessa for provides independent ratings of 21,000 at a whopping 7x prospective sales, its omnichannel payments.
£1.5bn, beating Temenos in the deal for financial products and funds. first sizeable acquisition by Experian in a
VISA acquired Earthport for £247m,
the asset management software provider. while. There are always bumps on the road
Cryptomathic acquired Aconite or 8x revenues. Mastercard had trumped
At 4.2x revenues it was a pretty good price in an M&A transaction, but this is a bump
Technology, an end-to-end EMV® an earlier VISA offer which in turn forced
too. In 2019 they splashed out £1.3bn for that could have been predicted as they are
card lifecycle, transaction processing VISA to up its offer by a whopping 25%.
Mergermarket - the M&A information two of the largest credit-score checking
and PIN management provider. Both Again, a clear illustration of the power of
provider, at a very toppy looking 10x firms in the UK and clearly “could result in
Cryptomathic and Aconite Technology “competitive tension” in a deal. Earthport
revenues. The size of deals has certainly less intense competition in the sector.” It
operate in the secure infrastructure for provides cross-border payment services to
accelerated since they took money first reminds us in many ways of news in 2018
EMV payments space. banks and businesses. Through Earthport
from TA Associates in 2004 and then Carlyle that TalkTalk had agreed to sell its business
APIs, clients can manage payments to
Group in 2016. It has been an impressive Australian listed EML Payments has broadband to Daisy for £175m, but Daisy
almost any bank account in the world.
run since Andrea Pignataro founded the acquired Flex-e-Card for £21m paying pulled out having failed to agree final terms
The deal comes after a difficult year for
business 20 years ago. 4.5x revenues or 10x EBITDA for the after DD. Key lesson here is that a deal is
Earthport, in which it lost a major customer,
FinTech that specialises in gift card never done until it is done.
Cognizant acquired Meritsoft, which saw reduced transaction volumes and
solutions for retailers. Based in Newcastle,
is best known for its FINBOS platform There has certainly been a major frenzy of underwent a management shakeup.
Flex-e-Card have expanded into Poland
for post-trade processing, an intelligent activity in the payments space in the past
and UAE, so adding to the geographic
automation solution for managing taxes, few years and 2019 was no different with
footprint of EML. Yet another payments
“tension
the announcement that global payments
fees, commissions and cash flow functions deal in a fast consolidating sector.
provider, Worldpay, and financial services The power of competitive
+25%”
between financial institutions. “Increased
compliance and regulatory obligations, Ant Financial, the financial services firm technology giant, FIS, are to merge in a
focus on operational efficiency, and a led by billionaire Jack Ma, has acquired gargantuan $43bn deal – an old fashioned
range of new digital technologies are money transfer and currency exchange firm all share merger - further accelerating the
among the forces that have led many of WorldFirst for £540m or about 6x revenues. pace of change in the global payments
Unfortunately, Loot ran out of loot and was
the world’s leading financial institutions to Interestingly, just prior to the deal, WorldFirst space. Activity was kick-started in 2017
put into administration. RBS previously
automate processes using Meritsoft and announced plans to shut its US operations by Vantiv’s acquisition of UK’s Worldpay
acquired a 25% stake in millennial-focused
its FINBOS platform” said Sean Middleton, to placate US regulators, who previously for £7.7bn, 1.7x revenues (but kept the
technology start-up Loot, aimed at helping
President, Cognizant Accelerator. The rejected Ant Financial’s bid to buy money Worldpay name). WorldPay then acquired
young people and students manage their
transaction has generated an initial return transfer service MoneyGram for $1.2bn. SIX Payments for €3bn in 2018 in another
finances by providing customers with a
to Synova Capital of 4x invested capital Sorting your housekeeping ahead of a sale big deal. UK listed Sage continues to shed
pre-paid debit card and insights into their
and an IRR of 47%, with further returns is a crucial part of the exit process and here non-core assets. It sold SME payment
spending habits. The plan was to help
anticipated under the terms of an earn-out is a classic example of a smart step taken to processing arm, Sage Pay for £230m to
RBS develop its digital offering Bo, which
agreed with founders, Kerril Burke and avoid a potential headache. US payments business, Elavon, owned by
is currently in private beta testing. It, like
Paul Burke. US Bancorp. They paid about 15x EBITDA.
other new technology-led banks that have
“
The SimplyBiz Group has acquired Texas based Nuvei bought UK listed (but launched in recent years such as Monzo,
A deal is never done Israeli based) payments technology outfit, Starling and Revolut, is aiming to poach
Defaqto for £70m as it looks to expand
until it is done ”
TECH M&A REVIEW12 13
customers from the traditional high street were valued at £1.6bn in 2018 following Infinity based in Shepton Mallet with just Yokogawa. RAP International’s software is
lenders (like RBS!). If you can’t beat them, a PE investment. In 2019 they also 12 staff. Clear evidence that very large used in high hazard industries with clients
join them. RBS had been negotiating to acquired investment platform European acquirers often buy small in-fill targets,that including leading blue-chip oil and gas
buy Loot, but it failed DD. As a result, RBS Bank for Financial Services (ebase) from at first glance look unlikely to move the companies. The business, which employs
have taken on founder Ollie Purdue and Commerzbank, in a deal worth €154m. needle. i2i is the leading provider of just 20, trades in more than 30 countries
the 17 staff. So probably a nice deal for Electronic Certificates of Origin in the UK. with its technology employed at 100 sites
Finally, although not really a FinTech, The
RBS and a boost for its digital offering globally. Yokogawa is the world leader in
London Stock Exchange (LSE) made
Bo, but not so good for those looking for industrial automation and control, test and
a very bold move acquiring Refinitiv,
Loot. Lesson here is to always enter an
exit process from a position of strength
by ensuring you have adequate working
the financial data and trading platforms
provider which was only created when
“Shepton
Overseas buyers in
Mallet and
measurement, information systems and
industrial services. Listed on the Tokyo
Stock Exchange, with global sales of
Thomson Reuters sold a 55% stake in its
capital, otherwise you may get looted.
Financial and Risk business, to private Swansea” $3.6bn it is another example of a mega
cap acquiring a niche UK tech company.
equity firm Blackstone Group. Under the
“Loot ran out of loot”
terms of the complicated deal, which Investment house, Hanover, offered
doubles the size of LSE, it will pay $27bn GRC software company Ideagen has to acquire Cambridge risk software
in shares for Refinitiv. As a result, Thomson acquired Redland Business Solutions, a technology business, Brady plc, for
Reuters and Blackstone will have a SaaS provider of regulatory and compliance £8.3m which was agreed by management.
UK listed StatPro, was acquired by US shareholding of 37% in LSE. It has been a software, in a £15.8m deal. Redland, However, it was then rapidly upped to
private equity firm, TA Associates, via its really fantastic year for LSE who were the with revenues of £4.2m, has 40 clients £15m as another bidder circled, which
Confluence Technologies arm. StatPro, best performing FTSE company with the including Nomura, Santander, Investec, again shows the considerable power of
provider of cloud-based investment shares nearly doubling. No wonder they Hargreaves Lansdown and Rathbones. “competitive tension”. The shares had
portfolio analysis and pricing tools, sold are keen to pay for acquisitions in shares. Redland provides software for the financial slumped after the management revealed
for £160m. Founder, Justin Wheatley, services industry, which assists banks, it needed a £16.5m cash investment to
commented: “We couldn’t be happier investment managers and insurance firms upgrade its software. Being listed on AIM is
to be joining a like-minded firm in order to fit with regulatory changes. In particular, clearly not the right place for a turnaround.
to provide asset managers and fund
administrators with an even greater range
GRC – Compliance Redland’s software helps businesses to
manage itself under the Senior Managers
AIM listed Tax Systems was acquired
by Bowmark Capital valuing it at an EV
of support services and analytics.” I and Certification Regime, to increase the
Prometheus Group, a US asset of £108m. As the name suggests, Tax
suspect he will also be rather pleased with accountability of senior managers for their
management software firm (owned by Systems offers software to automate the
the chunky 50% premium offered to the conduct. “Redland is an extremely valuable
Genstar Capital and others) has acquired Corporation Tax compliance and is the
share price beforehand. addition to the group and is in line with
Gateshead based Engica which has a creator of Alphatax, which is used by over
our strategy of acquiring Integrated Risk
Edinburgh based fintech FNZ has acquired suite of “environmental, health and safety 1,100 customers including 23 of the top
Management businesses that have strong
JHC Systems, a provider of software solutions” including incident management. 25 Accountancy firms. With 90% recurrent
IP and growing recurring revenues”, said
services to the wealth management Founded in 1998, Prometheus provides income you can see why private equity
Executive Chair David Hornsby. Ideagen,
industry. Based in London, JHC provides web-based planning and scheduling is attracted. The Bowmark investment
who have acquired 5 companies since the
the core technology platform to several software for operations management. It will enable the company to accelerate
start of 2018, have a market value of over
UK and Ireland’s wealth managers and grew 30% in 2019 and is valued at $1bn or the development of new products and
£400m and are building a major presence
platforms including AJ Bell, Alliance Trust 10x revenues. services, particularly in response to the
in GRC software.
Savings, Brooks Macdonald, Charles roll-out of HMRC’s new “Making Tax
SGS is the world’s leading inspection,
Stanley, Davy, FIS Platform Securities, Swansea-based industry risk assessment Digital” initiative, which aims to modernise
verification, testing and certification
Interactive Investor, LGT Vestra and software firm, RAP International, had been the way tax is reported. Valuation was 6.8x
company, with £5bn in revenues and nearly
Quilter. FNZ were founded in NZ and acquired by Japanese conglomerate, revenues, but a less taxing 10x earnings.
10,000 employees. Yet they acquired i2i
TECH M&A REVIEW14 15
Credit rating provider, Moody’s, has for an enterprise value of $300m. To areas; as for us, there are now 3 certainties of pen-testers. Finally, managed service
acquired UK FinTech, RiskFirst, who fund the deal GB Group arranged a new in life - death, taxes and cyber-crime.” provider, Six Degrees Group, purchased
provide risk analytics to the pension fund revolving credit facility worth £110m and However David, the shareholders are not CNS Group, a specialist in managed
and asset management industry. Since its placed shares worth £160m. Priced at a so certain, as the shares have fallen from security services, penetration testing,
formation in 2009, London based RiskFirst mere 3% discount, the demand for shares 310p to 210p in 2019 in a strong market. consultancy and compliance assessments
has seen its PFaroe platform widely was strong and they finished the year very adding 50 staff and revenue of over £7m.
adopted. A combination of increased strongly breaching the £1.5bn valuation
Kape, the consumer security software
regulation and the accelerating pace barrier, which is about 10x revenues
“death,
business, acquired LTMI for $127m
of technology transformation is good and a huge multiple of profits. The deal Three certainties in life – including debt. LTMI owns Private Internet
”
news for RiskFirst. “As a journalist of 40 values IDology at a mere 7.9x trailing sales
years’ standing, not many things impress and 18.4x trailing EBITDA. Forays into
taxes and cyber-crime Access (“PIA”), a leading US digital data
privacy services business based in Denver,
me. PFaroe does.” says Anthony Hilton, the US are not always a success, and it
who provide VPN solutions with 1m
Business Editor of the Evening Standard looks a big and bold move. GB Group is
subscribers. Ido Erlichman, CEO of Kape,
who is not easily impressed apparently. clearly making a push overseas after the
Orange Business Services, which said “This is a game changing moment in
acquisition of Australian based Vix Verify,
is part of French telco, Orange, has Kape’s development”. It certainly looks
an ID verification and location software
acquired cyber security services provider that way.
business for £38m, which is a reasonable
SecureData Group, who employ over
CyberSecurity looking 1.8x revenues and looks a good fit.
Before that they acquired closer to home
200 staff in UK and South Africa, and are
RELX, the British publishing turned
analytics group paid £580m, an alarming
the largest independent cybersecurity
- Worcester based SaaS software provider sounding 25x revenues, in 2018 for
The largest deal of the year (and one of service provider in the UK. The Company
PCA Predict (aka Postcode Anywhere) ThreatMetrix, a fraud detection tool,
the largest ever in the UK) was the sale has a 25-year track record of providing
for £63m, 4.5x revenues or 14x EBIT, and by far its largest acquisition in 10 years.
of cybersecurity and network security integrated cyber solutions designed
IDscan Biometrics for £37m cash plus £8m ThreatMetrix’s Digital Identity Network is
software developer, Sophos, to the US to assess risks, detect threats, protect
earn-out, 4.9x revenues or 12x EBIT. one of the largest repositories of online
private equity group, Thoma Bravo, for customer’s IT assets and respond to
digital identities, encompassing 1.4 billion
$3.9bn. The valuation equates to 4x Shearwater Group’s acquisition of security incidents. The Company’s
unique online identities. ThreatMetrix,
revenues which in the current market Secarma penetration testing will expand consulting arm, SensePost, was acquired
which launched in 2005, collects
is not outrageous but reflects steady if its “digital resilience” capability and cement back in 2017. With £40m+ in revenues and
information like device type, location and
unspectacular growth and looks well timed a deeper partnership with Manchester 10% profits, SecureData was an attractive
user behaviour to make sure the person
as the shares had not properly recovered headquartered cloud and hosting firm target for Orange, albeit a bit off-piste.
logging in to things such as banking
from the Tech sector mauling in 2H18. UKFast. The deal is worth £7m. Shearwater There has been quite a consolidation in
services definitely is who they say they are,
Two years ago, Thoma Bravo acquired has grown rapidly through acquisition cyber services recently as there is clearly
which eliminates the need for complicated
Sophos’ rival Barracuda and has also over the last few years having snapped up a severe shortage of skilled staff. In 2018
login. Shareholders are certainly warming
added Imperva, Veracode and LogRhythm Brookcourt (£30m or only 1.3x revenues), Finnish based F-Secure acquired MWR
to this bold move as they have risen 20%
to its stable. Headquartered in Abingdon, GeoLang (£1.7m), SecurEnvoy (£20m) InfosSecurity (threat hunting and phishing
in 2019 despite the eye-popping valuation.
Oxfordshire, Sophos specialises in end- and Newable Consulting (£600k), and protection services) for 3.8x revenues,
RELX has secured a bright future away
point and network security. It was founded now includes network security, data Claranet acquired NotSoSecure, a
from its heritage in print and even sold
in 1985 by Jan Hruska and Peter Lammer, loss prevention (DLP), multi factor company providing global pen-testing
Farmers Weekly, its last remaining trade
who will be very happy as they trouser authentication, managed security services and “ethical hacking” training
magazine, in December 2019.
over £460m. provision, compliance and consulting courses to customers. Similarly, Intertek
services. David Williams, Chairman of acquired pen-tester, NTA Monitor,
GB Group has made a big move acquiring
Shearwater, said: “Operating in the cyber who have offices in Kent and off-shore
IDology, a US provider of identity
security sector, we are well positioned to operations in Malaysia. Six Degrees
verification and fraud detection services,
benefit from one of the most certain growth added CNS Convergent, a 50 strong team
TECH M&A REVIEW16 17
free basis, payable in a mixture of cash patented AI system it calls “geometric deep owns fellow IoT provider Boston Networks.
AI and Machine and shares. Funding is provided by equity.
Today Merit collects several million data
learning” – effectively algorithms that learn
from large and complex data sets gleaned
Pinacl was seeking to enter local full fibre
networks (LFFN) programmes which
Learning points daily from around 3,000 sources from social networks. Fabula focuses on had funding requirements for city bids.
in Maritime, Construction, Fashion, Oil & detecting differences in how content is They went in search of venture capital to
Temenos has acquired Logical Glue Gas, Retail and Metals. Merit deploys AI spreading on social media and allocating facilitate this, and that is how it crossed
for £12m. The specialist provider of and ML technologies, so it can efficiently an authenticity score to determine if news paths with Aliter. “Our approach really was
“explainable” AI to financial services categorise and enhance high volume is fake or not. Such an approach, given to get some gap funding in place and that
providers, was co-founded in 2012 by and high frequency data, including it is based on the “propagation pattern” culminated in Aliter liking us so much that it
Professor Hani Hagras, an expert in fuzzy unstructured data. Merit’s data is supplied through huge social networks, is more bought the company,” CEO Rob Bardwell
logic and XAI systems. It helps users to to many leading information businesses, resilient to adversarial attacks. The deal said. The Company hit the £20m revenues
better understand the rationale behind including Informa, Ascential, Dow Jones has hallmarks of Twitter’s acquisition last year, and with Aliter’s funds at its
the outputs of AI and Machine Learning. and Wilmington. of Magic Pony a few years back and disposal, Pinacl should grow aggressively.
Regulators are increasingly mandating that Facebook’s acquisition in 2018 of another
Cognizant acquired Zenith Technologies,
institutions be able to explain automated London-based start-up, Bloomsbury AI.
a life sciences manufacturing technology
“butPinacl
decisions that affect their customers (e.g. The Donald is not keen on fake news, so
GDPR includes ‘a right to explanation’ for
services company headquartered in Cork,
will be delighted with this, particularly with
sought funding
all decisions made by AI).
Ireland. Zenith specializes in implementing
US Presidential elections in 2020. found a Buyer”
digital technologies to manage, control
Blue Prism has grown to become a £900m and optimize drug and medical device Apple acquired London start-up
market cap company rising 15x since its production. Interconnected “smart DataTiger in a bid to boost its digital
listing in March 2016 but in 2019 its shares factories” have become a strategic priority marketing for its fast-growing services
marked time. RPA is a hot space and the for the industry, with production systems business. DataTiger, which uses artificial
organic growth is impressive but the rating
is still stratospheric. In June, Blue Prism
and processes becoming more complex
because of research advances, and
intelligence, says it can “optimize the
marketing journeys” of customers by
Public and Health
made a bold move agreeing to pay £80m increased demand for large-molecule harnessing user data to target them with Sectors
in cash and shares for Thoughtonomy, a biologics. The combined Cognizant- marketing messages including mobile
UK SaaS business employing 52 people. Zenith Technologies expertise will deliver push notifications. DataTiger CEO, Philipp Civica has been busy buying 2 companies
At a whopping 10x revenues, and based a range of Industry 4.0 capabilities, from Mohr, said the Company seeks to “bring in 2019 after it acquired 6 in 2018. Their
on the £3m loss, it is a great deal for the factory design consultation, machine the stale era of ‘email-list thinking’ and deals include Derby based occupational
vendors. Its Machine Learning (ML) and sensor and controller instrumentation, slow, campaign-based marketing to an health, and health & safety software
Natural Language Processing (NLP) supervisory control, and data acquisition, end”. The start-up’s AI-driven marketing provider Warwick International, delivery
capabilities are no doubt attractive in to manufacturing, batch automation, ERP capabilities could help Apple customise management software specialist
developing Intelligent Automation. integration and managed services. content and direct users to content that TranSend Solutions. The Tees Valley-
is relevant to them. Apple has also quietly based company specialises in supply
Twitter has acquired Fabula AI, a London-
acquired UK based iKinema, a motion chain electronic proof of delivery (ePOD)
based start-up that uses ML to help detect
“thought capture technology company for use in and route planning software applications. It
10x revenues – there’s a “fake news”. The plan is to work toward
virtual reality and web animations. iKinema had revenues of £4m and 20% profits. The
” finding new ways to leverage machine
learning across NLP, recommendation
specialises in software for motion capture,
games and VR.
business has been transforming to a SaaS
business model, and is used by more than
systems, reinforcement learning and graph
75 major organisations, including Seven
deep learning. Founded only in 2018, Pinacl Solutions the Welsh based Internet
Trent Water, Wessex Water and Wincanton.
Dods PLC acquired Meritgroup for a Fabula is a real true start-up and probably of Things (IoT) specialist was acquired
2018 deals included Trac Systems, which
total consideration of £22.4m on a debt more of an acqui-hire. It has developed a by private equity firm Aliter, which also
provides cloud software and related
TECH M&A REVIEW18 19
services to the NHS and the wider public for police forces, airports etc. They then Neal Gandhi, CEO of The Panoply said: Idox has had a tough time as reflected by
sector for the complete recruitment acquired the eye screening businesses “FutureGov in every way reflects our own its share price which is around the level
process, from advertising vacancies and of EMIS Group for a total cash ethos, as a digitally native company built it was at 5 years ago. They have a new
managing applications to on-boarding consideration of £15m. The eye screening for the demands of the 21st century”. CEO, David Meaden, at the helm but
and induction. Others include cashless businesses formed the Specialist & Care The Panoply is in a hurry, having only despite losing money and having a fair
catering and EPOS provider Nationwide segment of EMIS Group, which were listed in December 2018. This is their fifth bit of debt they are returning to the M&A
Retail Systems (NRS) to expand its valued at just 0.75x revenues but a healthy acquisition having acquired digital agency table acquiring Tascomi for just over £7m
payment systems business. Barnsley- 13.6x profits. Then in June, NPS acquired Deeson and GreenShoot Labs, a provider (including its debt). Tascomi, based in
based NRS is an established provider of Snook, a service design agency which of enterprise digital solutions using AI, County Down provides regulatory services
integrated payment solutions, particularly is the 4th acquisition NPS has made which is related to Deeson. for local government with all its systems
in the education sector where it provides since it was acquired by NEC in 2018. cloud-based and natively mobile. Idox are
Advanced has acquired Dublin-based
cashless catering systems to more than Snook is based in Glasgow and London paying a punchy 3.7x revs and 10x EBITDA.
CareWorks, a provider of Cloud based
2,000 local authority, school and college and specialises in redesigning services They are acquiring a local authority
case management software for health and
customers. Civica also acquired ERS in the public sector. It looks a good fit as competitor, but this may well be about
social care organisations. Used by over
Group who had revenues approaching Snook provides an opportunity for NPS to technology and moving idox to the cloud
50,000 care professionals, the Company
£40m. ERS was formed in 1988 when it become involved at an earlier consulting more rapidly.
supports the goals set out in the NHS’
spun out of The Electoral Reform Society, stage of a project development.
Long Term Plan to build integrated care BearingPoint, the large Dutch based
providing end-to-end ballot, election
Granicus, the provider of cloud-based systems by 2021. CareWorks is a fast- consultant has expanded their UK Public
and voting services and has managed
software solutions and digital engagement growing business with 60 employees Sector team through the acquisition of
more than 50 million registrations. It’s an
services for the US public sector acquired and operates in the UK, Ireland and specialist consultancy, Prederi. It’s a bit
impressive list of deals and credit to Robert
Firmstep, a London-based provider of US. CareWorks is the first acquisition of an odd one as Prederi only employs
Stroud who has led to the M&A for the past
government service transformation. As announced since Advanced received an 20 staff with capabilities across finance,
10 years completing over 40 deals.
Granicus CEO, Mark Hynes, explains they investment from BC Partners. Gordon strategy, change management, digital
“provide critical services such as permits, Wilson, CEO of Advanced comments: and learning and development. The firm’s
applications, licenses, payments and other “The social care sector in particular clients include the NHS, local government,
“past
Civica – 40 deals in the
decade”
transactions to their communities digitally,
cost effectively and with the unified,
is increasingly becoming a focus for
government as our population ages
regulators and Ministry of Defence,
Ministry of Justice and the Department
consistent and modern experience”. and we witness a rise in mental health of Health.
conditions”. Michael Dolan, CEO of
The Panoply Holdings, the digitally native Servelec was acquired by Montagu
CareWorks will no doubt be delighted.
technology services Group, acquired Private Equity in a £225m takeover
Meanwhile Capita, which not long ago Advanced continues to make a series
FutureGov, a leader in digital service and delisted in January 2018. They
was an acquisition machine, has not made of in-fill acquisitions. Advanced has also
design for the public and health sectors. subsequently sold Servelec Controls a
any acquisitions, which says it all. They acquired workforce management software
Consideration was circa £12m, half in PE-backed MBO team. Now focused on
are still clearing the decks having sold company, Kirona. Based in Alderley Edge,
cash and half in shares. Valuation was healthcare, Servelec has announced the
Construction Online and Supplier Kirona provides a mobile solution for
1.9x revenues and 8x EBITDA reflecting acquisition of CareerVision, who provide
Services in 2018. businesses with field-based service teams,
the consulting nature of FutureGov. It also case management and information
with 80% of revenues in social housing. It
Northgate Public Services, which is now makes sense tying in key management solutions to local government children’s
also acquired Oyez Professional Services
owned by Japan’s NEC after it paid £475m with equity in the business going forward. and young people’s services teams.
and US based application modernisation
in 2018, has started to make a number of The acquisition transforms the shape They employ 40 people and look a good
specialists, Modern Systems.
in-fill acquisitions. In early 2019 Northgate of The Panoply, with circa 45% of group tuck-in deal for Servelec.
acquired APD Communications, which revenue now coming from the health
has mission critical control room software and public sectors following completion.
“Advanced is moving forward”
TECH M&A REVIEW20 21
communities and economies and is a truly to create a cloud-based, education- transaction. Ascent provides custom
HR/EdTech global product, with no tariffs on ideas”,
said OU vice chancellor Mary Kellett in a
ready “student relationship management”
solution. Crimson provides solutions
software development enabling ‘digital
transformation’ (which has to be the
UK based publisher Emerald Group based statement on the investment. to many of the leading universities and most used tech phrase of 2019) in UK
in Bingley, acquired Mind Tools, colleges in the UK, including the University and German markets. Ascent follows
the digital learning and performance of Cardiff, the University of Aberdeen and Horizon’s investments in data analytics and
support company. Mind Tools provides
access to 2,400+ resources, including
“No tariffs on ideas” Durham University.
UK listed Pearson sold its US textbook
strategy provider Strat 7 in March. In June
it bought out EES for Schools from Essex
articles, podcasts, videos, infographics, County Council and rebranded it Juniper
business in a very strange deal that
quizzes, etc. Husband and wife team, Education, whilst also committing £20m
Tech recruiter Harvey Nash Group was showed a distinct lack of competitive
James Manktelow and Rachel Thompson, partly to fund yet another buy-and-build
acquired at the very end of 2018 for just buyers as it got $250m but just 10%
set up MindTools.com, a website where consolidation in software and services
under £100m by DBAY who already upfront for a business that makes £20m
people could use short video to learn provision to primary and secondary
controlled 26% of Harvey Nash shares. profits. The rest is deferred for between
what it takes to become a successful schools in the UK. EES is most well-known
DBAY took a significant stake in Harvey 3-7 years. Hardly textbook.
and effective leader. But in this case the for its school assessment system, Target
Nash in 2017. Valuation of the deal was just
leaders have left, as the founders exited Tracker, which is used in approximately a
10% of revenues but 9x EBIT. The 130p
“Textbook? Hardly”
the business on sale. quarter of primary schools in England. In
valuation looks good relative to its share
2019 Horizon have also completed a total
Hg Capital sold Allocate Software to price but not so pretty compared with its
of 15 add-on acquisitions for the portfolio
Vista Equity in another private equity £8 peak in the dotcom boom. DBAY
of 13 growing Technology and Business
pass-the-parcel in the middle of 2018. are UK value investors who “invest
US BPS specialist, Alight Solutions, was Service companies.
Since then they have made two further in companies overlooked or deeply
previously part of Aon Hewitt before it was
acquisitions: firstly, 247 Time, a leading misunderstood by the market and in many Sanderson are no over-night sensation,
acquired by PE firm Blackstone. In 2019
cloud-based supplier of contingent instances out of favour with investors, having listed over 15 years ago. The
they acquired Hemel Hempstead based
healthcare workforce software. 247 Time often taking a contrarian view.” They quote ERP and SCM solutions specialist was
NGA Human Resources, a provider of
provides vendor management, payroll Benjamin Graham “The intelligent investor seen as solid rather than spectacular but
HR and payroll services including NGA
and direct engagement technology is a realist who sells to optimists and buys nevertheless was acquired in 2019 by US
HR’s platforms - ‘hr.’ a centralised point
to healthcare and enterprise sectors. from pessimists”. based Aptean for just over £90m. Aptean,
to access payroll and ‘euHReka’ a multi-
Followed by, Wambiz, an innovative itself a provider of ERP and SCM solutions
tenant cloud payroll platform. NGA stands
provider of app-based staff engagement to the manufacturing industry, was formed
“andA realist
for Northgate Arinso reflecting its history
solutions for the health, education and who sells to optimists when Northgate was a much larger beast,
from the 2012 merger of Consona and
enterprise sectors. Allocate grew revenues buys from pessimists” it is now part of NEC.
CDC. Aptean is ultimately controlled by
funds managed by TA Associates and Vista
an impressive 20% last year.
Equity Partners. They are paying around
London-based online degree platform 2.5x revs or 16x EBIT for Sanderson who
FutureLearn, raised £50m from Australian- UK listed Tribal, who provide software and
join a very long list of listed companies that
based online job matching group, Seek,
in exchange for a 50% of its equity. Open
services to the education sector have not
made many deals in the past few years but
Cloud Software have been acquired.
University, which had wholly owned the have acquired Crimson Consultants for CGI, the $11bn revenue Canadian IT
Horizon Capital made 3 platform
FutureLearn platform, retains the other 2x revenues plus earn-out. Crimson has consulting and integrator, has surprisingly
investments in 2019. Horizon has made
50% of equity following the Seek Group been working in the education sector acquired SCISYS for £79m or about 1.3x
a total commitment of £25 million to the
investment. Clearly this is a move to for over 10 years and has developed a revenues and only 8x EBIT. Based in
buy and build of Ascent Software taking
compete with highly funded EdTech full range of tools that utilise the CRM Chippenham, SCISYS was listed on AIM in
a majority stake and simultaneously
start-ups. “Education improves lives, capabilities of Microsoft Dynamics 365 1997 and has an interesting history, having
acquiring TechHuddle in a £30m
TECH M&A REVIEW22 23
rebranded a few times and has evolved membership renewal payments by using accounting changes have recently software for capturing, visualizing,
(pretty slowly) taking nearly 40 years to embedded payments systems. Interesting. been made relating to how leases are modelling and sharing of geotechnical
reach revenues of just under £60m. It recognised on financial statements. Last data. The addition accelerates Bentley’s
• APT – Membership software
is now a curious mix of Anglo-German year ICG joined Hg Capital in taking a vision of enabling subsurface digital twins
• Silverbear – CRM platform for
software and services businesses with stake in IRIS Software Group, valuing it at for infrastructure projects and assets.
membership
expertise in Broadcasting, Defence and £1.3bn, and became one of UK’s largest Apparently, subsurface digital twins can be
• Circdata – Conference and exhibition
Space. Globalisation would seem to be ever private equity led software buyouts. vital for assessing and managing risks in
event software
the rationale. George Schindler, President infrastructure projects, and to the planning,
• Intelligengolf – Golf club membership
and CEO, CGI said “SCISYS’ industry- design, construction and operations
software
leading expertise and IP-based services of infrastructure assets. Last year they
and solutions will provide an opportunity
to globalise certain platforms utilizing the
•
•
Decisions – Membership CRM
instaGiv – Digital mobile fundraising “areTheallTop 5 UK acquirers
PE backed”
acquired Legion, a pedestrian simulation
software provider. It simulates and
for charities
broader CGI geographic footprint and analyses the foot traffic on infrastructure
• MillerTech – CRM for NFP
client relationships”. assets that include rail and metro stations,
• Crafty Clicks – Address verification
stadiums, shopping malls and airports.
software TOP UK BUYERS SINCE JAN 2018
Operators can accurately test designs
• NetXtra – Digital engagement for NFP
“The future is Clear” • Trillium – CRM provider to
membership
ClearCourse 14
Access 11
and operational or commercial plans
to enhance footfall, wayfinding, crowd
management and safety.
• e-clinic – Health clinic management
ClearCourse Partnership are a buy-and- software Civica 9 AVEVA, the UK listed global leader in
build platform that is absolutely smoking. • Giftpro – Gift voucher management engineering and industrial software,
They are by far the most acquisitive • BrightOffice – CRM provider IRIS Software 7 acquired the software assets of MaxGrip,
company in the UK in 2019. Backed by • Protech – CRM provider an AVEVA partner since 2017. MaxGrip is a
US based Aquiline Partners, they were • Clear DirectDebit – Direct debit Jonas 6 pioneer in optimising asset performance
only created in September 2018. Josh payment services with Reliability Centred Maintenance
Rowe their Head of M&A has impressively (RCM) solutions.
IRIS made 4 acquisitions in 2019 (and 19 Since Accel-KKR’s investment in 2015,
acquired 14 companies already - more
in the past 6 years) including Innervision, Kerridge (KCS) has made 11 acquisitions. Sage announced that it has acquired Irish
than one a month. Target companies are
Hosted Accountants and BioStore. Last year KCS (ERP and supply chain start-up and Dublin-based AutoEntry,
focused on membership organisations
Hosted Accountants was founded in solutions) acquired listed Electronic Data which provides data entry automation
and they help their customers to manage
2008 to bring IT consultancy services Processing (EDP) for £12m. Late in 2018 for accountants, bookkeepers and
their members and clients, administer
to the UK accountancy sector. Since they added Insphire (heavy plant software) businesses. Brendan Woods, Founder
their business workflow and to automate
2015, the business has experienced and Current RMS (AV and events and CEO of AutoEntry, said: “Bringing
their payment processes. The deals are all
strong growth driven by a partnership software). In 2019 they acquired US based automation to the front line of accounting
focused on Membership and Payments. It’s
with IRIS for the provision of IRIS Hosting, MAM Software for $155m. MAM Software has become arguably one of, if not
quite a collection of deals from a standing
its solution for accountancy practice IT has solutions for the automotive parts, tyre the most, influential step changes to
start and quite an integration headache
management. BioStore is a provider and vertical distribution industries. The deal accounting in recent years”. Sage said that
at some point. However, Aquiline have
of identity management and cashless valuation is 4.4x revenues and 35x EBIT AutoEntry’s 200 employees will continue
already done this successfully in the US
catering solutions to UK schools and but presumably there will be synergies to work with the Company. The automation
with TogetherWork and it’s not just a buy
businesses. Innervision provides which will reduce that heady multiple. Yet solution is currently used by more than
and build for scale (like say Volaris who are
specialist compliance software and another PE backed buy-and-build story. 3,000 accounting and bookkeeping
also vertically focused (and who acquired
services, mainly around leasing which practices, and it services in excess of
20 companies globally in 2019). There is a Bentley Systems has had twins. Bentley
could be timely as IFRS and GAAP 150,000 businesses.
clear end game to eventually monetise the acquired Keynetix, a cloud-based
TECH M&A REVIEW24 25
technology used for e-commerce and BCA Marketplace (British Car Auctions)
eCommerce data interchange in the supply chain.
In December they acquired UK listed
is not really an e-commerce business but
it sure is behaving like one. The owner of
Communications
Just Eat gobbled up Practi for £7m plus Netalogue, although you may have missed We Buy Any Car consumer business has KCOM has struggled to expand its
earn-out. Practi is a software service that it as the headline price was just £5m. The received a private equity backed offer at operations beyond regional broadband
provides independent restaurants and Netalogue B2B e-commerce Platform is a 25% premium to its share price from and network connectivity into cloud
small chains with tablet-based Point of Sale used by manufacturers, distributors and TDR Capital. Meanwhile shares in UK car hosting and managed services provision.
(PoS) and restaurant management systems wholesalers to create B2B e-commerce dealers are generally heading in the other Revenues were flat. The appointment of
to help them manage their businesses websites to sell their products online. direction. Shareholders in BCA, including ex-BT executive, Graham Sutherland, and
more efficiently. Just Eat will now be able Clients include Marstons, Chubb, Bunzl the cash strapped Neil Woodford, are not other key boardroom changes in January
to provide its restaurant partners with PoS, and Greene King. surprisingly very interested. 12x forward all came a bit late. So a bid for £504m from
cash and card payment handling, inventory EBITDA is pretty good for a car retailer the Universities Superannuation Scheme
Blackstone acquired a majority stake in
management, kitchen operation and in a very tough market. Another deal in a (USS) went down well, following a difficult
dating app start-up, MagicLab, for $3bn.
employee management systems, all within long list of PE buyers using cheap debt to period for the East Yorkshire telco. Just
Founded in 2006 by London based Andrey
a single software package across multiple leverage cash flows. a few weeks later up popped Macquarie
Andreev, MagicLab’s suite of brands
devices. An interesting deal but Just Eat are – which includes the dating and social British tech unicorn, Deliveroo, has Infrastructure who gazumped USS with a
about to get eaten after a £6bn deal with networking apps Bumble and Badoo – has acquired Scottish software design and £563m offer, some 12% higher.
Takeaway.com. connected over 500m people around the development firm, Cultivate, giving it a Another example of the wonders of
world across dating, social and business. tech hub in Edinburgh. The Scottish firm “competitive tension”.
As part of the acquisition, Mr Andreev is helped build Deliveroo’s payments systems
stepping down from the business. He will and will continue to work on improving
“Eat or be eaten” be replaced as CEO by the fabulously
named Whitney Wolfe Herd, Founder and
the payments experience for couriers
and partner restaurants, provide more “adds
Competitive tension
CEO of Bumble. data to both, as well as additional ways to value in Hull”
GoCompare, the listed group founded offer financial support (e.g. with cash flow
Mercell, a provider of e-tendering SaaS
in Wales by Hayley Parsons has acquired management). Deliveroo says it currently
solutions in the Nordic region has acquired
Look After My Bills for £6m upfront, plus works with over 80,000 restaurants and Last year UK based GCI raised a £60m
EU Supply for £15m or 3x revenues.
£2.5m deferred, plus up to a further £4m take-aways, as well as 60,000 riders. war chest from Mayfair Equity Partners to
Headquartered in Oslo, Norway, and with
earn-out i.e. a max of £12.5m. Look After a market presence in seven countries, In a creative deal, OnTheMarket acquired fund acquisitions. They are now spending
My Bills (who offer energy savings through Mercell’s software solutions simplify the a 20% share in Glanty, the owner and it, acquiring Modality Systems and
price comparison services for consumers) public procurement process. In July 2018, developer of ‘teclet’, an automated portal Nasstar in 2019. Modality is a Microsoft
appeared on Dragon’s Den in 2018. Will Mercell received investment by Viking for the residential lettings industry. The plan communications and collaboration
Hodson & Henry De Zoete, Co-founders Venture, a leading Nordic B2B SaaS is to deliver an agent backed alternative practice with operations in the UK, US, Asia
of Look After My Bills, said: “Look After investor. EU Supply has been listed on to Rightmove and Zoopla. OnTheMarket and Australia. The acquisition will enable
My Bills is on a mission to ensure no-one AIM since 2013 but is actually a Sweden has also agreed an option to acquire the GCI to expand its business internationally
gets ripped off again, ever. We are proud based e-procurement business. Their remaining 80% of Glanty. The plan is to for the first time and capitalise on the
to share that vision……Why spend hours CTM™ platform is used by over 8,000 provide capital until Glanty breakeven in growing global market for its Microsoft-
finding a decent price each year when you European public sector bodies. EU Supply 2021, and they then have a right to acquire based, cloud-enabled communications
can appoint an expert to deal with all the shareholders will be happy as the shares the balance for up to £12m based on services. Microsoft Teams has become
hassle for free?” Quite. have fallen from 45p in 2014 to 10p at the results in the next 3 years. Microsoft’s fastest growing business
start of 2019. Why it was ever listed, I am application of all time and leveraging its
TrueCommerce is a KKR owned global
not sure. growth appears to be a key driver here.
provider of software and communication
TECH M&A REVIEW26 27
James Rodd, Modality CEO said: “We role in consolidating what we see as a team, now almost 200 strong. CentralNIC
believe there is great potential given
that Microsoft Teams alone is set to
fragmented industry”.
“
Convergence at last ” has acquired 5 companies in the past year,
tripling revenue. They are paying $48m
become the second-biggest workplace for Team Internet, funded via a bond issue
collaboration app by 2020, surpassing and seem to be paying just 5x EBITDA.
The Access Group is another successful
both Slack and Google Hangouts”.
Telford-based Nasstar has an interesting
ICT Managed PE owned buy-and-build factory focused
That seems a good deal but apparently
the real potential of the deal is to cross-
history. David Redwood originally founded Services mainly on the mid-market but its 6
acquisitions in 2019 are across a disparate
sell and bundle its domain monetisation
the company, called e-know.net, in 1998 service with a portion of CentralNic’s
after he famously came out of retirement range of sectors. Backers Hg Capital and domain name registrations, of which it has
The ICT managed service sector has
because Mrs Redwood got sick of having TA Associates are funding a steady stream 18.6m under management. It will double
been and remains at the forefront of the
him around the house. Before attempting of in-fill acquisitions and no wonder as the CentralNic’s size.
convergence between IT and Telecoms and
to retire, David had previously founded business is flying with latest revenues and
with the adoption of IP Telephony service. SysGroup has acquired Certus IT for
a systems integration business called EBITDA up 40%. No wonder Hg valued it at
This long talked about convergence is an initial cash consideration of £8m. The
Largotim in 1979 that he grew into a £60m £1bn. 2019 additions include: People HR,
getting ever closer at an accelerating pace. Company also raised £10m from the
business before selling to TRW in 1997. The a Doncaster based HR solutions provider
As a result, Telecoms Service suppliers are capital markets, which, in addition to its
DNA of the business from day one was fully and The Payroll Service Company, a
seeking IT skills and vice versa. Hence the new £5m banking facility from Santander,
hosted and fully managed services, with Cambridgeshire based Payroll solutions
current wave of PE owned consolidators will enable greater fire power for more
technical support 24/7. In 2014, e-know.net provider, Eazy Collect, one of the UK’s
that are aggressively growing by acquisition deals. In 2015, Certus IT was named the
merged with Nasstar in a reverse takeover leading payment platform providers for
at a rate not seen before. In particular, the Dell EMC Cloud Partner of the Year, and
to form the Nasstar Group. SME’s, not-for-profit, blue-chip corporates
following have been active: the acquisition will bring Dell EMC Gold
GCI are on a roll. and public sector. Eazy Collect processes
in excess of 4m payments per year, Partner status to the enlarged group.
PE OWNER CONSOLIDATOR This will complement SysGroup’s existing
with a consolidated value in excess of
portfolio of senior vendor partnerships,
“theDon’t
Charlesbank 6degrees £400m, Joyful, a Not-For-Profit donor
hang around and member attraction website software including WatchGuard Platinum Partner,
house” BGF Olive Comms supplier with over 10 years’ experience Microsoft Gold Datacentre Partner and
providing software exclusively to Charity Kaspersky Gold Partner. SysGroup also
August Equity Charterhouse and Membership organisations. Riliance, acquired Hub Network Services based in
an online training, compliance and risk Bristol. HNS is a managed connectivity and
Inflexion invested in managed IT and Apiary Connect co-location solutions provider. The deal will
management solution provider in the Legal
communication services business, Beechtree Wavenet Sector with £3m revenues. Volcanic, a see HNS’ network infrastructure, supply
Ridgewall Group, and backed the recruitment and staffing website software agreements and extensive experience
simultaneous acquisition of QDOS SBL, ECI ITLab supplier with over 10 years’ experience in the industry compliment and expand
a specialist provider of managed IT providing software exclusively to the SysGroup’s existing managed IT and cloud
and communications to the hospitality Horizon Timico recruitment industry and Unicorn, the hosting offering.
industry. Ridgewall was created in 2011 provider of learning technology solutions.
LDC OneCom Computacenter has started an overseas
and provides business critical services
CentralNic, the AIM-listed provider of push, in 2018 it bought San Francisco
in IT, communication and cyber security
Dunedin Incremental internet domains continues to grow based, FusionStorm, a Sourcing and
to SMEs. QDOS SBL is Ridgewall’s 4th
aggressively through acquisition. They Professional Managed Services specialist.
acquisition in the last year. The combined
Livingbridge Giacom acquired Munich based domain name Computacenter paid an initial cash
group now employs over 100 people.
monetisation services provider, Team consideration of $70m and will pay an
Dominic McAnaspie, Chief Executive, Mayfair Equity GCI Internet, adding 40 staff to its German additional $20m depending on profit
Ridgewall is staying to “take a leading
Inflexion Ridgewall
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