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MAY 2019
TECHNOLOGY MONTHLY
Our technology & tech-enabled services practice advises leading private and publicly traded technology companies including many of the world’s most respected IT consulting, managed services, technical staffing and enterprise software providers.
Info Services
TARGET ACQUIROR ACQUISITION SYNOPSIS
IT Staffing ITSTransaction Processing Managed Services VAROffshore ITS
HEADLINE TRANSACTIONS
Mana
ged
Serv
ices
• Ntiva (backed by Southfield Capital), a US based provider of IT services including managed IT, cloud and cybersecurity solutions, has acquired Diverse Technology Solutions, a US based cloud service provider of hosted data, voice, and business IT solutions
• The acquisition expands Ntiva’s geographical coverage to include New York City, Long Island, and Southern Florida
• Medicus IT (backed by Brook Venture Partners and Plexus Capital), a US based provider of managed IT services to specialty healthcare practices, has acquired CompuTech City, a US based provider of managed IT services focused on healthcare organizations
• The acquisition expands Medicus IT’s roster of IT solutions and improves its vendor and supplier level economics
• Coretelligent (backed by Veronis Suhler Stevenson), a US based provider of managed IT and private cloud services, has acquired US based United Technology Group, a provider of co-managed technology services, including cybersecurity, professional services, hardware and software sourcing
• The acquisition extends Coretelligent’s geographic reach to include the Southeastern United States
IT Se
rvice
s
• Eliassen Group (backed by Stone Point Capital), a US based provider of technology staffing and consulting services, has acquired Project One, a US based provider of technology staffing and consulting solutions to the TMT industry
• The acquisition provides Eliassen Group with an expanded scope of services and aligns with the company’s strategic focus on transformational growth
• Crossfuze (backed by RLJ Equity Partners), a US based provider of IT solutions, has acquired Virteva, a US based provider of managed services and Gold ServiceNow partner
• The combined Company will have 100 dedicated ServiceNow consultants and developers and over 600 total employees globally
19.3x 15.9x
11.7x
9.4x
12.9x
6.4x
8.5x
3.0x5.0x7.0x9.0x
11.0x13.0x15.0x17.0x19.0x21.0x
Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Apr 2019
TEV
/ EBI
TDA
Transaction Processing Info Services Offshore ITS IT Staffing ITS Managed Services VAR
TECHNOLOGY GROWTH & VALUATION TRENDS
TEV / EBITDA
9.0x
5.0x
13.0x
17.0x
21.0x
Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 Q4’18 Q1’19 Apr-19
Enterprise Value / LTM Revenue
2.0x
1.4x
0.3x
2.1x
0.3x
3.3x2.1x
1.0x
2.0x
3.0x
4.0x
ITS Offshore ITS
Managed Services
IT Staffing
Transaction Processing
Info Services
VAR
11.7x12.9x
8.5x6.4x
9.4x
19.3x
15.9x
Enterprise Value / LTM EBITDA
5.0x
15.0x
20.0x
25.0x
10.0x
ITS Offshore ITS
Managed Services
IT Staffing
Transaction Processing
Info Services
VAR
12.9x ITS 9.4x IT Staffing 19.3x Transaction Processing11.7x Offshore ITS 15.9x Info Services 8.5x VAR6.4x Managed Services
ITS Offshore ITS
Managed Services
IT Staffing
Transaction Processing
Info Services
VAR
LTM Revenue Growth
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
11.4%
4.1%
10.0%
12.0%
7.1%
0.4%
5.9%
32.6%
27.1%
13.5%
55.1%
21.7%
42.4%
59.3%
LTM Gross & EBITDA Margin*
10.0%
30.0%
40.0%
50.0%
60.0%
20.0%
11.9%15.5%
39.5%
28.6%24.7%
3.9%
*EBITDA Margins shown as the gray line.
ITS Offshore ITS
Managed Services
IT Staffing
Transaction Processing
Info Services
VAR3.2%
Bradford A. Adams, Managing Director
[email protected] 617. 259.2203
Jarrad S. Zalkin, Managing Director
[email protected] 617. 259.2207
Kevin M. Atchue, Vice President
[email protected] 617. 259.2209
Arjun Chandok, Analyst
[email protected] 404.995.6243
tmcapital.com
ATLANTA BOSTON NEW YORK
EBITDA Multiples Over Time
Select Technology Transactions Announced in March 2019
Selected TM Capital Technology Experience TM Capital’s Technology Contacts
Target Sector Acquiror Target Enterprise Value Comments
3/29/2019 Managed Services
Calligo Limited Connected Technologies Inc.
NA • "Calligo Limited (backed by Investcorp Bank), a UK based provider of cloud solutions for businesses, has acquired Connected Technologies Inc, a Canadian provider of managed IT solutions, cloud hosting, network services, and technical support
• The combined client base also gives Calligo the largest concentration of CPA customers in the region and the longest track record in serving the industry’s IT, cloud and data residency needs"
3/28/2019 Managed Services
Nixu Oyj Ezenta A/S NA • "Nixu Oyj (HLSE:NIXU), a Finland based provider of IT security services, has acquired Ezenta A/S, a Danish provider of information technology consulting services
• The Ezenta acquisition strengthens Nixu’s Danish cybersecurity market presence and enables Nixu to offer cybersecurity services to Danish customers and use Ezenta’s technologies to build and support IT security infrastructure"
3/15/2019 IT Services Audius AG IT Competence Group
NA • "Audius AG, a Germany based provider of customer relationship management software solutions for service, maintenance, and facility management industries, has acquired a majority stake in IT Competence Group SE (DB:3IT), backed by Navigator Equity Solutions (BST:NUQA), a German provider of IT consulting and outsourcing solutions
• Audius will initially continue to manage the IT Competence Group as a separate strategic business unit; the strategic vision is to exploit economies of scale and competitive advantages among employees, customers and suppliers"
3/14/2019 IT Services Deloitte Converging Data
NA • "Deloitte, a US based provider of professional services, has acquired Converging Data, an Australian provider of data acquisition and analytics solutions
• The acquisition bolsters Deloitte's cyber analytics team, particularly enhancing its ability to offer clients expertise in Big Data, Artificial Intelligence, and Security Orchestration and Response"
3/6/2019 Transaction Processing
Payroc Detrok Technology Services
NA • "Payroc (subsidiary of MB Financial Bank), a US based provider of payment processing solutions, has acquired Detrok Technology Solutions, a US based provider of payment processing technology solutions to the hospitality industry
• The acquisition bolsters Payroc’s positioning in the hospitality industry, while augmenting its technology solutions and related services to address the needs of independent owner-operator restaurant establishments"
17.7x 17.6x
11.4x
7.9x
11.5x
5.4x
8.2x
3.0x5.0x7.0x9.0x
11.0x13.0x15.0x17.0x19.0x21.0x
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
TEV
/ EBI
TDA
Transaction Processing Info Services Offshore ITS IT Staffing ITS Managed Services VAR
Bradford A. Adams, Managing Director
[email protected] 617. 259.2203
Jarrad S. Zalkin, Managing Director
[email protected] 617. 259.2207
Kevin M. Atchue, Vice President
[email protected] 617. 259.2209
Arjun Chandok, Analyst
[email protected] 404.995.6243
tmcapital.com
ATLANTA BOSTON NEW YORK
EBITDA Multiples Over Time
Select Technology Transactions Announced in March 2019
Selected TM Capital Technology Experience TM Capital’s Technology Contacts
Target Sector Acquiror Target Enterprise Value Comments
3/29/2019 Managed Services
Calligo Limited Connected Technologies Inc.
NA • "Calligo Limited (backed by Investcorp Bank), a UK based provider of cloud solutions for businesses, has acquired Connected Technologies Inc, a Canadian provider of managed IT solutions, cloud hosting, network services, and technical support
• The combined client base also gives Calligo the largest concentration of CPA customers in the region and the longest track record in serving the industry’s IT, cloud and data residency needs"
3/28/2019 Managed Services
Nixu Oyj Ezenta A/S NA • "Nixu Oyj (HLSE:NIXU), a Finland based provider of IT security services, has acquired Ezenta A/S, a Danish provider of information technology consulting services
• The Ezenta acquisition strengthens Nixu’s Danish cybersecurity market presence and enables Nixu to offer cybersecurity services to Danish customers and use Ezenta’s technologies to build and support IT security infrastructure"
3/15/2019 IT Services Audius AG IT Competence Group
NA • "Audius AG, a Germany based provider of customer relationship management software solutions for service, maintenance, and facility management industries, has acquired a majority stake in IT Competence Group SE (DB:3IT), backed by Navigator Equity Solutions (BST:NUQA), a German provider of IT consulting and outsourcing solutions
• Audius will initially continue to manage the IT Competence Group as a separate strategic business unit; the strategic vision is to exploit economies of scale and competitive advantages among employees, customers and suppliers"
3/14/2019 IT Services Deloitte Converging Data
NA • "Deloitte, a US based provider of professional services, has acquired Converging Data, an Australian provider of data acquisition and analytics solutions
• The acquisition bolsters Deloitte's cyber analytics team, particularly enhancing its ability to offer clients expertise in Big Data, Artificial Intelligence, and Security Orchestration and Response"
3/6/2019 Transaction Processing
Payroc Detrok Technology Services
NA • "Payroc (subsidiary of MB Financial Bank), a US based provider of payment processing solutions, has acquired Detrok Technology Solutions, a US based provider of payment processing technology solutions to the hospitality industry
• The acquisition bolsters Payroc’s positioning in the hospitality industry, while augmenting its technology solutions and related services to address the needs of independent owner-operator restaurant establishments"
17.7x 17.6x
11.4x
7.9x
11.5x
5.4x
8.2x
3.0x5.0x7.0x9.0x
11.0x13.0x15.0x17.0x19.0x21.0x
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
TEV
/ EBI
TDA
Transaction Processing Info Services Offshore ITS IT Staffing ITS Managed Services VAR
Bradford A. Adams, Managing Director
[email protected] 617. 259.2203
Jarrad S. Zalkin, Managing Director
[email protected] 617. 259.2207
Kevin M. Atchue, Vice President
[email protected] 617. 259.2209
Arjun Chandok, Analyst
[email protected] 404.995.6243
tmcapital.com
ATLANTA BOSTON NEW YORK
EBITDA Multiples Over Time
Select Technology Transactions Announced in March 2019
Selected TM Capital Technology Experience TM Capital’s Technology Contacts
Target Sector Acquiror Target Enterprise Value Comments
3/29/2019 Managed Services
Calligo Limited Connected Technologies Inc.
NA • "Calligo Limited (backed by Investcorp Bank), a UK based provider of cloud solutions for businesses, has acquired Connected Technologies Inc, a Canadian provider of managed IT solutions, cloud hosting, network services, and technical support
• The combined client base also gives Calligo the largest concentration of CPA customers in the region and the longest track record in serving the industry’s IT, cloud and data residency needs"
3/28/2019 Managed Services
Nixu Oyj Ezenta A/S NA • "Nixu Oyj (HLSE:NIXU), a Finland based provider of IT security services, has acquired Ezenta A/S, a Danish provider of information technology consulting services
• The Ezenta acquisition strengthens Nixu’s Danish cybersecurity market presence and enables Nixu to offer cybersecurity services to Danish customers and use Ezenta’s technologies to build and support IT security infrastructure"
3/15/2019 IT Services Audius AG IT Competence Group
NA • "Audius AG, a Germany based provider of customer relationship management software solutions for service, maintenance, and facility management industries, has acquired a majority stake in IT Competence Group SE (DB:3IT), backed by Navigator Equity Solutions (BST:NUQA), a German provider of IT consulting and outsourcing solutions
• Audius will initially continue to manage the IT Competence Group as a separate strategic business unit; the strategic vision is to exploit economies of scale and competitive advantages among employees, customers and suppliers"
3/14/2019 IT Services Deloitte Converging Data
NA • "Deloitte, a US based provider of professional services, has acquired Converging Data, an Australian provider of data acquisition and analytics solutions
• The acquisition bolsters Deloitte's cyber analytics team, particularly enhancing its ability to offer clients expertise in Big Data, Artificial Intelligence, and Security Orchestration and Response"
3/6/2019 Transaction Processing
Payroc Detrok Technology Services
NA • "Payroc (subsidiary of MB Financial Bank), a US based provider of payment processing solutions, has acquired Detrok Technology Solutions, a US based provider of payment processing technology solutions to the hospitality industry
• The acquisition bolsters Payroc’s positioning in the hospitality industry, while augmenting its technology solutions and related services to address the needs of independent owner-operator restaurant establishments"
17.7x 17.6x
11.4x
7.9x
11.5x
5.4x
8.2x
3.0x5.0x7.0x9.0x
11.0x13.0x15.0x17.0x19.0x21.0x
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
TEV
/ EBI
TDA
Transaction Processing Info Services Offshore ITS IT Staffing ITS Managed Services VAR
SELECTED TECHNOLOGY TRANSACTIONS
Annc. Date Sector Acquiror Target Enterprise Value Acquisition Synopsis
4/30/2019 IT Services Accenture Zielpuls NA
• Accenture (NYSE: ACN), a global professional services firm, has acquired Zielpuls, a German based IT consulting services provider
• The acquisition will bolster Accenture’s Industry X.0 smart products and services design capabilities for automotive companies and will expand these capabilities to support clients in the medical technology, industrial equipment and high-tech industries
4/29/2019 IT ServicesWest Monroe Partners
Waterstone Management Group
NA• West Monroe Partners, a US based business and technology consulting services provider, has acquired
Waterstone Management Group, a US based strategy and management consulting services provider• The acquisition bolsters West Monroe’s strategic advisory and operations improvement services practice
4/23/2019 IT Services AgioEnterprise Services Unit of Intersection
NA
• Agio, a US based provider of cybersecurity and managed IT services for the financial services, healthcare and payments industries, has acquired US based Intersection’s Enterprise Services unit, which specializes in IT strategy, implementation, and technical support
• The acquisition expands Agio’s cloud capabilities and strengthens its service portfolio
4/3/2019 IT Services Accenture Droga5 NA• Accenture (NYSE: ACN), a global professional services firm, has acquired Droga5, a US based digital
advertising agency• Droga5, which employs more than 500 people, will become part of Accenture Interactive
4/1/2019 IT ServicesNTT Data Services
Cognosante Consulting
NA
• NTT Data Services, a global IT services provider, has acquired Cognosante Consulting, the state and federal consulting division of Cognosante, a US based provider of consulting, technology, and business process outsourcing services to healthcare organizations
• The acquisition strengthens NTT’s federal industry expertise and geographical coverage in the United States
4/1/2019 IT Staffing Xing Honeypot $63.9
• Xing SE, a German based IT job platform for German-speaking countries, has acquired Honeypot GmbH, another German based IT job platform based in Berlin
• The acquisition is the largest in the company’s history• Xing plans to rebrand as “New Work” in the second half of 2019, consolidating a number of other assets it has
acquired and built over the years
Bradford A. Adams, Managing Director
[email protected] 617.259.2203
Jarrad S. Zalkin, Managing Director
[email protected] 617.259.2207
Kevin M. Atchue, Vice President
[email protected] 617.259.2209
Arjun Chandok, Analyst
[email protected] 404.995.6243
Selected TM Capital Technology Experience TM Capital’s Technology Industry Contacts
Atlanta | Boston | New York
