Embed Size (px)
Citation preview
Tech M&A Update January 2016 | 1
January 2016
TECH M&A UPDATE
THE CHANGING LANDSCAPE OF FACE-TO-FACE
In early December 2015, I attended the annual IAEE Expo! Expo! tradeshow in Baltimore. The event was exceptional, and there was tremendous excitement on the show floor among both exhibitors and attendees. Much of it came from the booths of event technology providers, who were demonstrating their latest wares to event operators and meeting planners.
Over its 28 years, JEGI has advised on more event and event technology transactions than any other investment bank. Over the past 10 years, we have seen a dramatic evolution in face-to-face business models, and more recently, a pivot among event technology providers to offer end-to-end solutions to organizers, exhibitors, attendees, and increasingly, other stakeholders in the event/meeting ecosystem – namely, the hospitality industry.
Face-to-Face: Massive and Growing Marketing and Professional Development ChannelAccording to Forrester Research1, events are the largest portion of the $60 billion B2B marketing budget, accounting for 30% of the annual spend, or $18 billion, and growing 6% annually. When you include accommodations, transportation and other support, Frost & Sullivan2 pegs the global spend on events and meetings at $565 billion – a truly sizable market.
The chart to the right shows that participation at corporate events far surpasses other event types and accounts for half of the industry’s total participation. The corporate segment includes both external events (e.g., sales, consumer, partners, thought leadership) and internal events (e.g., incentive meetings, training, retreats).
Innovative Face-to-Face Models Taking Market ShareFrom a business model perspective, we have seen rapid adoption by companies that manage their own events, to supplement, or even replace, exhibition space at large industry tradeshows. Salesforce, for example, has wholeheartedly embraced in-person events as a crucial marketing channel to attract new customers and engage/upsell existing users. This activity extends well beyond their Dreamforce mega-event, which reinforces the value of the Salesforce platform and ecosystem, to its regional sales and user group events, which help increase renewal rates and drive user adoption. Most technology companies hold similar events and primarily outsource the strategy, production and management to third-party providers, like Opus Event Agency, which JEGI represented in its sale to Fan Creek Capital in October 2015.
A typical corporate event is usually much smaller than industry tradeshows. Large tradeshow operators, such as UBM, Reed Exhibitions, Emerald Expositions and Informa, own and operate a multitude of events across a variety of markets and regions. As such, many early event technology and service providers focused on delivering point solutions to serve these large event operators. Associations can also be sizable clients, as they typically produce an annual event that serves their constituents and draws thousands of attendees, along with exhibitors and sponsors.
1 Forrester Research is a global research and advisory firm. 2 Frost & Sullivan is a consulting firm that provides market research and analysis.
Corporate
Conven+ons
Trade Shows
Incen+ve Mee+ngs
Other
PARTICIPANTS BY EVENT TYPE WITHIN THE U.S. EVENTS INDUSTRY (248 MILLION PARTICIPANTS)
“THE MOST EFFECTIVE SELLING IS DONE NOT BY A SALES TEAM, BUT BY PEOPLE YOU DON’T KNOW WHO ARE TALKING ABOUT YOUR PRODUCTS WITHOUT YOU EVEN BEING AWARE OF IT. IN THIS ERA, THOSE CONVERSATIONS ARE MORE FREQUENT AND MORE PUBLIC THAN EVER…BY PROVIDING A FORUM FOR CUSTOMERS TO MEET, YOU CAN BE A PARTICIPANT IN THESE EXCHANGES AND USE THE VIRAL EFFECT TO YOUR ADVANTAGE.”
-MARC BENIOFF, FOUNDER & CEO,SALESFORCE.COM
Author: Sam Barthelme, Director [email protected] +1 212 754 0710
Source: PWC
TECH M&A UPDATE JANUARY 2016
Tech M&A Update January 2016 | 2
The following chart depicts representative examples of innovative point solution providers across the event management value chain.
A Shifting Marketplace and Massive Event Technology OpportunityOver time, many of the point solution providers have made acquisitions or launched new products to expand their solutions across the value chain and to service a wider variety of clients. Interesting examples include Vista Equity’s acquisition and combination of Lanyon and the Starcite division of Active Networks in 2013/2014, to create an end-to-end venue sourcing and event management platform. In 2014, Viad’s GES acquired OnPeak and Travel Planners (JEGI represented both sellers) and N200 to combine a sizable event production business, with event housing and attendee registration. We anticipate continued consolidation across the point solution providers.
As more companies opt to plan and manage their own events and meetings, the need for event-related technologies will continue to grow. According to a recent MarketsandMarkets3 report, the event management software market is roughly $6 billion and is expected to grow at a 10% CAGR through 2019. A similar report from Frost & Sullivan pegs the event management software market at $5 billion. Because the venue sourcing capability in event management software is used to source hotels, along with event space, a considerable amount of hotel marketing budget is directed toward groups utilizing this software. As it turns out, event groups are typically the most profitable customer category for hotels. This dual revenue stream brings the total addressable market for end-to-end event technology to $9 billion, as depicted in the graphic to the right.
End-to-End Event Technology PlatformsThe largest company providing an end-to-end event technology platform, with scaled venue sourcing capabilities, is Cvent, which trades on the NYSE at a market cap of $1.2 billion, on approximately $176 million of revenue (6.8x revenue). While Cvent has an early mover advantage, this $9 billion market is wide open for disruption from other event technology providers. This helps explain recent investments in innovative event technology platforms, such as KKR’s $45 million investment in DoubleDutch, Argentum Group and Level Equity’s $14 million investment in etouches, and Madrona’s $6 million investment in Eventbase. These companies, and other event technology providers, will likely see strong revenue growth, as companies continue to embrace face-to-face as an important marketing channel and as event organizers adopt technology at an increasing rate.
Strong Base of Strategic Acquirers / ConsolidatorsOver the next 18 to 36 months, we believe that two large, well-funded buyer categories will make acquisitions across the event technology ecosystem, given the importance of events as a marketing channel and the ability of organizers and event participants to leverage event technology to track ROI on 3 MarketsandMarkets is a premium market research company
THE CHANGING LANDSCAPE OF FACE-TO-FACE (CONTINUED)
AS MORE COMPANIES OPT TO PLAN AND MANAGE THEIR OWN EVENTS AND MEETINGS, THE NEED FOR EVENT-RELATED TECHNOLOGIES WILL CONTINUE TO GROW
Source: Frost & Sullivan
TECH M&A UPDATE JANUARY 2016
Tech M&A Update January 2016 | 3
THE CHANGING LANDSCAPE OF FACE-TO-FACE (CONTINUED)
marketing spend. One group will be the large marketing technology companies that have built or acquired digital marketing capabilities (e.g., Oracle, Salesforce, IBM, Adobe, SAP). This group will see the value in owning event technology companies that provide marketing capabilities to event organizers and deliver detailed ROI tracking to event exhibitors and attendees. Similarly, since the event sourcing capability across event technology platforms drives a massive volume of highly profitable group hotel spending, we expect leading travel technology companies (e.g., Sabre, Amadeus, TravelClick), which provide marketing and booking software to the hospitality industry, to be active acquirers of leading event technology companies that have built and scaled venue sourcing capabilities.
ConclusionIn summary: face-to-face is a massive and important marketing channel; innovative models are redefining markets and capturing share; the industry is adopting technology at an increasing rate; and there is a large $9 billion event technology addressable market that is open to disruption. We predict: large event service providers will continue to acquire point solutions to create end-to-end solutions platforms; event technology companies will continue to receive attention from the VC/PE community; and hospitality and marketing technology companies will battle to acquire leading event technology providers to own this important market.
WE PREDICT LARGE EVENT SERVICE PROVIDERS WILL CONTINUE TO ACQUIRE POINT SOLUTIONS TO CREATE END-TO-END SOLUTIONS PLATFORMS
TECH M&A UPDATE JANUARY 2016
Tech M&A Update January 2016 | 4
PRIVATE COMPANY SPOTLIGHT: OLAPICEach issue, we spotlight an interesting, emerging growth, privately-held company for our audience. As experienced tech investment bankers, we will point out the characteristics that enable these companies to be fast-developing market leaders and ultimately become compelling acquisition targets for strategic companies, as well as later-stage growth equity and private equity investors.
This month, our Private Company Spotlight shines on Olapic, a leading visual marketing software platform based in New York City and founded six years ago. The Company is backed by Longworth Venture Partners, Fung Capital, Felix Capital Partners, Unilever Ventures and others. We interviewed Olapic CEO Pau Sabria for his perspective on the Company’s progress and how Olapic differentiates itself in the market.
Olapic’s solution allows major brands/retailers to collect, curate and showcase consumer-generated photos and videos into assets that the brands can use across all of their marketing channels and e-commerce environments. The company collects consumer photos and videos from leading social media sites, including Instagram, Facebook, Twitter, Pinterest, Vine and Tumblr to help brands/retailers increase the performance of their sales and marketing campaigns by using these pictures and videos to create more authentic brand experiences, rather than relying on costly creative agencies and elaborate photo shoots. Olapic analyzes and filters this consumer-generated imagery based on its predicted rate of engagement and conversion power in order to calculate which images will perform best across various channels.
Olapic is uniquely positioned to connect highly desired user-generated content with content distribution for brands.
OLAPIC’S SOLUTION ALLOWS MAJOR BRANDS/RETAILERS TO COLLECT, CURATE AND SHOWCASE CONSUMER-GENERATED PHOTOS AND VIDEOS INTO ASSETS THAT THE BRANDS CAN USE ACROSS ALL OF THEIR MARKETING CHANNELS AND E-COMMERCE ENVIRONMENTS
What is the “elevator pitch” that speaks to the main problem Olapic is trying to solve?We solve the content crunch that brand marketers suffer from. Today’s marketing technology focuses on distribution and reach, not on producing effective content. Traditional content creation methods (through agencies and internal teams) are slow and produce very limited amounts of content. Marketers are forced to re-use content and to build their marketing experiences around their content catalog. We work with brands to turn their consumers into content creators for them. We’ve proven this is a very powerful (and scalable!) source of high quality and authentic content. As we unlock the bottleneck of content, we enable marketers to build better marketing experiences for their consumers.
How do you define and size this market? How big of an opportunity is it for Olapic?Content is at the center of marketing, and without it, channels and marketing technologies become valueless. So in considering our value proposition, we consider the value we unlock for each brand and also the value we bring to marketing technologies, such as email service providers (ESPs), e-commerce platforms, content management systems (CMSs), and advertising marketplaces. In addition, we’ve seen brands create entirely new experiences, and therefore, create new market share for those opportunities. We think of our total available market (TAM) as the combined industries within marketing distribution and content creation.
TECH M&A UPDATE JANUARY 2016
Tech M&A Update January 2016 | 5
PRIVATE COMPANY SPOTLIGHT: OLAPIC (CONTINUED)Olapic seems to be emerging as the leader among a few companies going after this part of the market. What is unique about your solution and approach to the market that allows you to compete so effectively and win?In SaaS, it’s all about the team, the product and the execution. Our level of service, our capacity to innovate and our salesforce presence is larger than that of our competitors. Our product is truly the only enterprise-grade solution with the products and features that large corporations require. Finally, we already dominate the market by having a strong presence in servicing the top brands in both the US and EMEA.
Olapic has been successful in landing many large/well-known brands and retailers as clients, even as a relatively young company. Can you share why they chose Olapic and how the Company has added value for them?We have several specific client case studies on our website that quantify the value we bring to our customers, including Lancôme, Hard Rock, New Balance and others. We provide value by delivering a large amount of high quality content for free, and by putting that content to use on e-commerce sites (by increasing conversion rates and reducing return rates) and other marketing channels, such as ads, email, and offline. Also, we provide the strategy, services and support that all enterprise customers require on a global scale.
Can you share with us some insight into the growth path of the Company in the past and looking forward?We’ve grown at rates of more than 100% for the past three years. We currently have 160 employees across three offices (New York, London, and Cordoba, Argentina). In the past, we’ve grown geographically and provided a base product that fits a large but specific market of customers. In the next couple of years, we will grow by expanding into new customer verticals, as well as by providing new products within our platform.
What excites you when you think about Olapic’s future?We live in a marketing crisis: with the rise of ad-blockers, consumers are telling brands their marketing is unworthy. I am really excited to see CMOs across our customer base create new perspectives of their relationships with consumers, from the marketing experience itself, to the nature of the content that is consumed by the user. Over the next few years, we will see marketing teams organized in a strategy around content first, orchestrating the deployment of that content across channels in an elegant way and delivering the content that matters to specific consumers when it matters to them.
WE SOLVE THE CONTENT CRUNCH THAT BRAND MARKETERS SUFFER FROM
CONTENT IS AT THE CENTER OF MARKETING, AND WITHOUT IT, CHANNELS AND MARKETING TECHNOLOGIES BECOME VALUELESS
TECH M&A UPDATE JANUARY 2016
Tech M&A Update January 2016 | 6
HEY, DID YOU SEE THIS?
CHARTBEAT January 20, 2016
Chartbeat, known for its real-time analytics, has released a major upgrade of its Report Builder to keep up with the increasing rate at which newsrooms are embracing historical data. With its seamless, new design, clients can now create custom historical reports to evaluate and measure the success of sites’ over-time performance. In this new version, clients’ most commonly built reports are pre-loaded into their “Cheat Sheet”, reports can be named within Report Builder itself, tables can be previewed before being downloaded, and notifications are sent via Slack.
Read Article
Read Article
Read Article
EVENTBASE December 1, 2015
Eventbase, an app platform for premium events, has launched Expo Connect, a host of exhibitor tools aimed at boosting user engagement and helping exhibitors to connect with attendees in a more meaningful way. Additionally, Eventbase will be powering the official Expo! Expo! app, providing attendees with a mobile experience that will help them get the most out of the massive tradeshow. This year’s app unleashes the power of location, incorporating a network of beacon devices to create beacon booth zones to help participating sponsors extend brand reach. The tools in this app and resulting business insights and data will help organizers at Expo! Expo! and other tradeshows to optimize their events.
INSIDEVIEW December 16, 2015
InsideView, which powers global business conversations, announced an expansion of its platform. The platform, which includes company and contact data, insights, and connections, now has five times more contact coverage and increased power to handle growing data volume and velocity. Developers are accessing InsideView’s platform in growing numbers to integrate its real-time data and intelligence into their business applications, powering new and innovative solutions. Insideview advanced its proprietary MTV methodology, employing more advanced machine intelligence and pattern recognition frameworks resulting in precise matching, deeper text analysis, and ultimately more actionable insights.
TECH M&A UPDATE JANUARY 2016
Tech M&A Update January 2016 | 7
HEY, DID YOU SEE THIS? (CONTINUED)
Read Article
Read Article
Read Article
LUMESSE October 19, 2015
Lumesse, a global leader in talent solutions, announced the launch of its latest recruitment innovation, Interview Management. This next-generation solution is designed to provide a more streamlined experience for interviewers and job candidates alike, transforming how companies hire the best talent. This is a cutting-edge solution to improve each step of the interview stage, from determining the best candidates and scheduling interviews when it is most convenient to collecting timely feedback from interviewers and reducing time to make informed hiring decisions. The enhanced features and capabilities will enable employers to identify, evaluate, and hire more quickly.
SQUARESPACE November 3, 2015
Squarespace, the web publishing platform, has launched a suite of new e-commerce tools for small-business owners. Features include additional templates designed specifically for e-commerce transactions; a mobile commerce app to allow owners to manage commerce on the go; an abandoned checkout recovery feature, which sends out email reminders to customer who have pending items in their cart; and a real-time carrier calculator that provides more accurate shipping estimates. Squarespace’s new tools will enable small business owners to create sites where commerce is the focus, not an add-on feature.
PAN November 3, 2015
Performance Assessment Network (PAN), the leader in talent measurement solutions, has acquired the Institute for Personality and Ability Testing, Inc (IPAT), publishers of the 16PF® Questionnaire and other valued psychometric tools. The acquisition will help address new challenges in the talent landscape and bring competency-based hiring and development solutions to global customers. The 16PF Questionnaire helps students and professionals understand their work styles and strengths so they can exhibit the skills needed to find career success. The 16PF assessment and its suite of selection and developmental reports give customers the science they need. PAN believes that the acquisition will make them well equipped to bring tremendous value and innovation to the hiring practices of organizations worldwide.
TECH M&A UPDATE JANUARY 2016
Tech M&A Update January 2016 | 8
SELECTED DECEMBER M&A TRANSACTIONS IN JEGI TECH COVERAGE
BUYER SELLER TARGET DESCRIPTIONENTERPRISE VALUE
($MM)
Global Payments Heartland Payment Systems Payments processing services & systems $3,789
CACI International L-3 National Security Solutions Intelligence, surveillance & reconnaissance BPO $550
CoreLogic FNC Property appraisal management software $475
salesforce.com SteelBrick Salesforce-based price quoting SaaS $360
New Mountain Capital Equian (Great Point Partners) Healthcare billing BPO & SaaS $225
IBM Corporation Clearleap Multi-screen video management SaaS $200
Tyco Retail Solutions ShopperTrak Retail data collection systems $175
PTC Kepware Communication drivers software $100
LookingGlass Cyber Solutions Cyveillance (QinetiQ) Web-based security monitoring SaaS $35
Cubic Corporation TeraLogics Video streaming & analytics SaaS $30
Courion Corporation Core Security Technologies Vulnerability & penetration testing software $30
Edgewater Technology M2 Dynamics Oracle EPM systems integrator $16
World Poker Fund Holdings RealDeck Online poker gaming software $15
Q2 Holdings Social Money Digital banking SaaS $11
ShoreTel Corvisa (Novation Co) Call center & IVR SaaS $9
Deals with Values (by size)
TECH M&A UPDATE JANUARY 2016
Tech M&A Update January 2016 | 9
SELECTED DECEMBER M&A TRANSACTIONS IN JEGI TECH COVERAGE (CONTINUED)
BUYER SELLER TARGET DESCRIPTION
ABILITY Network OCS (National Research Co) Healthcare data & analytics software
Active Network (Vista Equity) Virtual Event Bags Event bag marketing SaaS
Acxiom Corporation Allant Group (Mid Ocean) Advanced advertising software division
American Capital Strategies BrandMuscle (Riverside) Ad design software
Aptean (Vista Equity) Computron Software (Parallax) Financial & accounting ERP software
AutoAlert (HGGC) MotoFuze (FuzeCast) Automotive social & marketing application SaaS
Blackboard (Providence Equity) BlueCanary (Clairvoyant) Student predictive analytics BPO
Connexity (Symphony Tech) Hitwise (Experian) Marketing behavioral analytics SaaS
Daxko (Pamlico Capital) CSI Software Fitness club management SaaS
Equian (New Mountain Capital) Trover Solutions (ABRY) Claims recovery BPO & SaaS
FullContact nGame Customer analytics SaaS
Hitachi Solutions America Ignify Microsoft enterprise systems integration
Impact Radius eBay Enterprise (ClearSaleing assets) Advertising attribution & analytics SaaS
Ingram Micro Parallels IP Holdings Hosting automation & provisioning software
Marlin Equity Partners BlueHornet (Digital River) Permission-based email marketing
Marlin Equity Partners LiveOps Cloud Platform Call center SaaS
Microsoft Corporation Talko (assets) Mobile team communications app
Oracle Corporation StackEngine Docker container management PaaS
Paychex Advance Payroll Funding Temporary staffing payroll processing
Perficient Enlighten Digital marketing & design services
Pinterest OMG Labs (Pext assets) Mobile meme message-builder app
Pinterest ShopTAP Crowd-sourced shopping discovery app
Rise Interactive SimpleRelevance Targeted email marketing SaaS
salesforce.com MinHash Market intelligence SaaS
Sentry Data Systems (ABRY) Agilum Healthcare Intelligence Healthcare BI SaaS
TechMediaNetworks ShopSavvy Mobile shopping application
UNICOM Systems IBM Rational System Architect System architecture visualization software
Welltok Silverlink Communications Healthcare engagement BPO & software
Deals without Announced Values (alphabetical by buyer)
TECH M&A UPDATE JANUARY 2016
Tech M&A Update January 2016 | 10
ABOUT JEGI
JEGI has been the leading independent investment bank for the global software, tech-enabled services, media, marketing and information sectors for more than 28 years. Headquartered in New York, with offices in Boston and London (via its partnership with Clarity), JEGI has completed more than 600 high-profile M&A transactions, serving global corporations; middle-market and emerging companies; entrepreneurial owners and founders; and private equity and venture capital firms.
We provide clients with a global network of prospective buyers and senior decision-makers, as well as vast industry knowledge, perspective and intelligence. This affords our clients seamless access to deep market insights and a wealth of M&A experience, enabling us to deliver the highest closing rate in our industry and drive strong valuations.
For more information, visit www.jegi.com.
600Over the past 28 years, JEGI has completed more than
M&A transactions, serving global corporations; middle-market and emerging companies; entrepreneurial owners and founders; and private equity and venture capital firms.
TECH M&A UPDATE JANUARY 2016
Wilma JordanFounder & [email protected]
Jeff BeckerManaging [email protected]
Scott [email protected]
Tom PechtManaging [email protected]
Tolman [email protected]
Richard MeadManaging [email protected]
Adam [email protected]
David ClarkManaging [email protected]
Bill [email protected]
Amir AkhavanManaging [email protected]
Joseph SanbornManaging [email protected]
LONDONClarity, 90 Long Acre London WC2E 9RA +44 20 3402 4900 | www.claritycp.com
NEW YORK JEGI,150 East 52nd Street18th FloorNew York, NY 10022 +1 212 754 0710 | www.jegi.com
BOSTON JEGI, CIC Boston, 50 Milk Street16th FloorBoston, MA 02109+1 617 294 6555 | www.jegi.com
SELECT RECENT JEGI TECHNOLOGY TRANSACTIONS*
Allant Group is a leader in data and analytic driven marketing and advertising services
ecVision is a cloud-based provider of global sourcing and collaborative supply chain software solutions.
Knowledge Advisors is a pioneer and leading SaaS provider of talent analytics to HR and C-level professionals
McMurry/TMG is the leader in omnichannel content creation and delivery. Manifest is a leader in digital experience design.
Iron Solutions is a leading software and data provider to the agriculture market
Competitrack is a full service competitive advertising tracking firm
Jun Group is a leading mobile video and branded content advertising platform.
RKG is a leading tech-enabled search and digital marketing agency
Infogroup is the leading provider of sales enablement and business intelligence SaaS solutions
Selligent is an international SaaS platform delivering omnichannel audience engagement.
ViryaNet is a leading provider of mobile workforce management solutions for field service
ePrize is a leader in digital engagement, specializing in promotions and loyalty campaigns
NavigationArts is a digital strategy and experience design firm.
Distimo is a leading mobile app market intelligence and analytics provider
Mspot is a pioneer and leader in mobile entertainment servicesw
Soonr is a leading provider of enterprise secure file sharing and collaboration services for IT business managers.
onPeak is a leading event housing software and services provider
MyWebGrocer is a leading provider of shopping and shopper marketing software and services
*Some of the transactions highlighted above were completed by JEGI Managing Directors Joseph Sanborn and Jeff Becker, prior to joining the firm.
