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QUARTERLY UPDATE • Q4 2016
INSIDE THIS ISSUE:The First Word: 2016 in Review, 2017 Outlook
2016 can be characterized as a year of uncertainty. From a slowdown in the Chinese economyand crashing oil prices causing markets and buyers to take a momentary pause, to Brexit andthe U.S. Presidential election.
CHILDS continued to grow substantially in 2016 as we added 11 bankers, bringing our totalteam to 40 people. Additionally, we were named Boutique Investment Bank of the Year by TheM&A Advisor, an honor which was validating to us as we continue building what we hope isthe premier brand in middle market M&A.
If the U.S. stock market is any indicator of public sentiment, then the outlook for 2017 is verygood. Subsequent to the Presidential election, U.S. stock markets increased by over 10% intoJanuary. We continue to see evidence of middle market private equity firms raising cash andmoving down-market as public investors seek better returns.
We are also seeing increasing activity with growth equity investors through minorityrecapitalizations. Minority recapitalizations enable owners to realize some liquidity andcontinue to grow their business while having voting control and the assistance of an outsideinvestor. We advised Collaborative Solutions, a premier Workday solutions firm, in theirminority recapitalization with Westview Capital. This was a great example of a successfulcompany gearing up for the next round of growth by prudently diversifying the owners’personal portfolios and adding to its Board some very knowledgeable professionals.
We expect private company valuations to remain at record levels, the economy to stay strong,continued healthy capital markets, and possibly lower taxes in the current administration.Thus, we believe 2017 will be a strong year for the middle market.
We are hosting our annual conference, CHILDSConnect, on May 16th at the St. Regis Hotel inAtlanta. This year we are examining the “Gig Economy” and what implications technology andfreelancing will have on business and employment in the future. We expect a record crowd ofover 300+ owners and investors who are interested in middle market growth opportunities.
Jim Childs
The First Word 1
CHILDSConnect Invitation 2
Market Update 3
Recent CHILDS Transactions 4
Sector Updates 5
About CHILDS 11
CHILDS NEWS AND EVENTS
1/12/17CHILDS advises Trinity Healthcare Staffing Group in its sale to Travel Nurse Across America (Gridiron Capital)
1/9/17 – 1/13/17CHILDS attends JP Morgan’s Healthcare conference in San Francisco, CA
12/30/16CHILDS advises Datavail in its acquisition of Navantis
12/20/16CHILDS advises Freidman Fleischer & Lowe in its recapitalization of Crisis Prevention Institute Inc.
12/2/16CHILDS advises The Channel Company in its recapitalization by Stone-Goff Partners
11/28/16 – 12/2/16CHILDS attends AWS ReInvent conference in Las Vegas, NV
11/8/16 – 11/10/16CHILDS attends SIA’s Healthcare Staffing Summit in Washington, DC
11/4/16CHILDS advises FineLine Technologies in its recapitalization by Summit Partners
11/3/16 – 11/5/16CHILDS attends TechServe’s Annual Conference in Amelia Island, FL
11/1/16CHILDS advises Greythorn Specialist Technology Recruitment in its sale to Vaco(Quad-C Management)
CHILDS ADVISORY PARTNERS
3438 PEACHTREE ROAD NEPHIPPS TOWER, SUITE 1400ATLANTA, GA 30326PHONE: 404.751.3000WWW.CHILDSADVISORYPARTNERS.COM
0
1,000
2,000
3,000
4,000
5,000
6,000
# o
f D
eals
< $100MM $100MM - $500MM
The middle market M&Aenvironment (deals under $500million) felt this uncertainty with adecrease in deal volume (see tablebelow). However, activity fortransactions under $100 million invalue remains strong. This “lower”middle market continues to thriveprimarily because of continuedprivate equity deal-making and anabundance of “add-on” acquisitionsby PE-backed platforms. Valuationsof middle market firms remain at record levels and may signal the “new normal” as the supply of investment capital continues to increase in the middle market.
YOU’RE INVITED - REGISTER TODAY!
“As a past client of CHILDS, I knew the conference would be great. CHILDSConnect provides a very efficient way to meet people and network while still giving attendees valuable and relevant content.”
Dan Campbell, CEO at Hire Dynamics
“Many thanks to the CHILDS Team, the conference was a great format! It’s attended by the right people and delivers relevant content. We are really looking forward to next year!”
Anne Vazquez, Partner at NewSpring Capital
“Outside of the excellent networking opportunities at CHILDSConnect, I found the roundtable discussions to be incredibly valuable. I walked away energized with new ideas within my industry of interest.”
Mark Perlstein, President & CEO at Datavail Corporation
www.childsadvisorypartners.com/childsconnect • 404-751-3000
Cocktail Reception to Follow
2
LOWER MIDDLE MARKET M&A UPDATE
CHILDS Quarterly Update: Q4 2016
LOWER MIDDLE MARKET U.S. PRIVATE EQUITY DEAL FLOW
Sources: Capital IQ, Dealogic, Pitchbook
924 987 980
761 853
944 887 853
655 556
448 488 526
814
620 657 732
809 836 740 737
627 564
175
215 204
166
156
199
155 210
158
149
200 200
197
234
235 228
170
216 241
230 186
217
169
1,147
1,238 1,218
961
1,039
1,187
1,078 1,124
847
741
698 735
759
1,097
912 929 937
1,069 1,130
1,018 959
879
781
-
200
400
600
800
1,000
1,200
1,400
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2011 2012 2013 2014 2015 2016
Nu
mb
er o
f T
ran
sact
ion
s
<$100MM $100MM - $499MM
1,378 1,409 1,490 1,736
1,927 1,645
722 905 756
922
911
847
733
848844
1077946
7792,833
3,162 3,090
3,735 3,784
3,271
(200)
300
800
1,300
1,800
2,300
2,800
3,300
3,800
2011 2012 2013 2014 2015 2016
Nu
mb
er o
f T
ran
sact
ion
s
Under $25MM $25M - $100MM $100MM - $500MM
3
3
RECENT CHILDS TRANSACTIONS
April 2016
has been recapitalized by
October 2015
has acquired
October 2015
has acquired
October 2015
has been acquired by
October 2015
has been acquired by
CHILDS Quarterly Update: Q4 2016
Note: CHILDS represented company listed on top half of tombstone
September 2015
has been recapitalized by
Highlands Ventures Holdings, LLC
August 2015
has been recapitalized by
September 2015
has been acquired by
September 2015
has been acquired by
September 2015
has been acquired by
November 2015
has been acquired by
December 2015
has been acquired by
December 2015
has been acquired by
December 2015
has been recapitalized by
December 2015
has been acquired by
A Portfolio Company of MidOcean Partners
January 2016
has acquired
March 2016
has been recapitalized by
February 2016
has been acquired by
A Portfolio Company of Snow Phipps
March 2016
has been recapitalized by
July 2016
has been recapitalized
January 2017
has been acquired by
August 2016
has acquired
August 2016
has been recapitalized by
Global Private Equity
September 2016
has been recapitalized by
November 2016
has been acquired by
A portfolio company of Quad-C Management
December 2016
has acquired
December 2016
has recapitalized
December 2016
has been recapitalized by
November 2016
has been recapitalized by
September 2016
has been acquired by
A portfolio company of New MainStream Capital
A portfolio company of Gridiron Capital
4
A portfolio company of Brockway Moran & Partners
A portfolio company of Chicago Growth Partners
4
PUBLIC COMPANY ANALYSIS
8.9x 9.1x9.8x
12.4x 12.6x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
Industrial /Infrastructure
EnvironmentalServices
Rental /Route-Based
Distribution &Logistics
Facility Services
Forward Year EV/EBITDA
Date Closed Buyer Target Target Description
12/8/16 The Gores Group Triumph Air Repair Provides MRO services to military and commercial airlinecustomers
11/18/16 Gardner Denver Total Equipment Provides oilfield equipment repair services
11/3/16 NAPEC PCT Contracting Provides installation, maintenance, and repair services ofnatural gas utilities
11/1/16 Arrow Material EMS Management Offers repair services to rail fleets
11/1/16 Ainsworth Direct Energy Business Provides maintenance for HVAC and energy services
11/1/16 KONE Downey-Goodlein Provides maintenance and repair services for elevators
INDUSTRIAL SERVICES SECTOR UPDATE
CHILDS Quarterly Update: Q4 2016
SPOTLIGHT ON MAINTENANCE, REPAIR, AND OPERATIONS – RECENT M&A TRANSACTIONS
Note: Public company data as of January 18, 2017
In this update, we focus on the Maintenance, Repair, and Operations(“MRO”) sector. Driven by customers’ focus on cost savings and timelydelivery, MRO providers are actively seeking to enhance their serviceportfolios, expand their geographical presence, and become one-stopsolutions for their clients. The MRO sector remains highly competitiveand fragmented even as the industry has recently undergonesignificant consolidation driven by an increase in customer demandfor more integrated service providers. The $600+ billion MRO marketis projected to grow at 5%+ annually for the next 3 years and weexpect M&A activity levels to remain high as small and mid-sizeplayers aggressively pursue scale and large players seek to tuck-insmaller, disruptive providers. Below we illustrate some of the keytrends and demand drivers that are driving investment from bothstrategic and financial buyers.
Global and Domestic Increase in Manufacturing: Manufacturingactivity in both the U.S. and emerging economies has been robustin Q4 2016 following four months of contraction. In early 2016,low commodity prices, a strong U.S. dollar, and weak growth inoverseas markets were some of the headwinds plaguing themanufacturing sector. However, in the last few months, commodityprices have stabilized and overseas markets have recovered,bolstered by increasing global consumer demand and favorablegovernment policies. For example, many APAC governments haverecently implemented policies designed to spur growth inmanufacturing and economic activity directly increasing demandfor MRO services.
Technological Advancement: MRO providers are increasing theiruse of technology in order to enhance service offerings, streamlineoperations, and decrease costs. For example, the aircraft MROmarket has been disrupted by technology as service providers nowutilize tablets and other smart devices to communicate withconnected aircraft sensors reducing the time required to identifymalfunctioning equipment or other areas in need of maintenance.
Demand for Predictive Maintenance: The aim of predictivemaintenance is first to predict when equipment failure mightoccur, and secondly, to avoid the occurrence of the failure throughpreventative maintenance. The demand for predictive maintenanceis expected to grow by 27% over the next three years as customersincreasingly focus on lowering repair costs, reducing productiondowntime, and shortening repair cycles. As a result, an increasingnumber of MRO providers have started offering predictivemaintenance as part of their service offerings to customers.
Last Twelve Months Indexed Stock Price Performance
Valuation Multiples
80
100
120
140
160
Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17Facility Services Rental / Route-BasedEnvironmental Services Distribution & LogisticsIndustrial / Infrastructure S&P 500 Index
5
5
PUBLIC COMPANY ANALYSIS
0
100
200
300
400
500
600
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2012 2013 2014 2015 2016
HUMAN CAPITAL MANAGEMENT SECTOR UPDATE
CHILDS Quarterly Update: Q4 2016
M&A volume declined in Q4 vs. both the prior quarter and year overyear. Some of this decline is attributable to the results of the NovemberPresidential election causing sellers to delay closing until 2017 withhope that the incoming administration will influence taxes favorably.Volumes for the year are also off from 2015, but remain at relativelyhealthy levels. With regard to public company trading, HCM companiesare lagging the broader S&P 500 for 2016, but performed better thanthe broader index in Q4. Education and Training saw a substantialboost in valuation after the election, resulting in the subsectoroutperforming the S&P 500 for the year. The staffing subsectorperformed favorably to the broader index in Q4 and HR Servicesremained aligned with the index as it has all year.
Conferences immediately after the election offered some insight intoexpected legislative implications on the sector. Most notable was SIA’sHealthcare Staffing conference where the potential for repeal of theACA was a topic of conversation but the clear consensus was thatindustry fundamentals and demand drivers support continued growthand optimism. These same feelings were relayed at the JPM Healthcareconference in January. Healthcare staffing has remained a hot sectorfor M&A after the election, and there are no indications of a slowdown.
In 2017 we expect to see sustained momentum and M&A activityacross sectors. The evolution of the workforce ecosystem will continueto build-out comprehensive workforce solutions. Employee experiencewill be a focus for employers and grow to extend beyond basicengagement and culture. Finally, training and development will be inthe spotlight, both as a tool to drive retention in the corporateenvironment (particularly as more millennials enter the workforce)and to train healthcare professionals, skilled laborers, IT professionals,and others in the greatest demand in today’s economy.
Education and Training has become a greater focus area for our firm.In December, FFL Partners announced its recapitalization of CPI, aglobal leader in crisis prevention training solutions for the de-escalation of aggressive behaviors and nonviolent physicalintervention. CHILDS advised FFL on the acquisition.
Valuation Multiples
Note: Public company data as of January 18, 2017
U.S. HCM M&A Transactions by Quarter
Date Closed Buyer Target Target Description
1/12/17 Travel Nurse Across America Trinity Healthcare Staffing Group Provides travel nurse staffing services
12/20/16 FFL Partners Crisis Prevention Institute (“CPI”) Provides crisis prevention training solutions
12/19/16 Odyssey Investment Partners Addison Group Provides hiring and staffing services
12/12/16 IQNavigator Beeline.com Provides VMS/MSP solutions for managing the extended workforce
11/28/16 Cognizant Technology Solutions Frontica Business Solutions Provides staffing, consulting, technology, and related services
RECENT M&A TRANSACTIONS
Last Twelve Months Indexed Stock Price Performance
60
80
100
120
140
160
Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17
Staffing HR Services Index Education & Training S&P 500
9.2x
14.1x
5.7x
10.2x
8.9x
14.6x
6.2x
11.0x
8.3x
14.5x
6.6x
11.5x
8.2x
13.6x
6.5x
11.5x
–
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
Staffing HR Services Education & Training S&P 500 Index
Q1-2016 Q2-2016 Q3-2016 Q4-2016
6
6
PUBLIC COMPANY ANALYSIS
Date Closed Buyer Target Target Description
12/9/16 Universal Hospital Services Radiographic Equipment ServicesAcquired as part of UHS strategy to bolster service offerings,Radiographic specializes in the maintenance and repair ofhigh-end diagnostic imaging equipment
12/1/16 Envision Healthcare AmSurg Corp.Mega-merger creating the largest ambulatory surgery centerand hospital-based physician practice management company
11/30/16 nThrive AdreimaClinically-integrated revenue cycle management servicesincluding patient eligibility determination and enrollmentservices
10/31/16* Blackstone Capital Partners TeamHealth Holdings$6.1 billion LBO of one of the nation’s largest providers ofoutsourced services to hospitals. Blackstone previouslyowned TeamHealth prior to its IPO in 2009
10/18/16 Almost Family CHS Home Health$128 million purchase of Community Health Systems’ 74home health and 15 hospice branch locations in 22 states
Last Twelve Months Indexed Stock Price Performance
HEALTHCARE SERVICES SECTOR UPDATE
CHILDS Quarterly Update: Q4 2016
RECENT M&A TRANSACTIONS
Surprising only to those not paying attention to the unintended (orintended) effects of the Affordable Care Act on everyday Americans’wallets, the biggest news of Q4 was the presidential election victory ofDonald J. Trump.
The new administration’s intent to repeal the Affordable Care Act wasno secret so the knee-jerk reaction to the election was certainlymarked by heightened anxiety and speculation over healthcareservices business models that have morphed and thrived over the last6-8 years. Against this backdrop, M&A activity in the space, following alight Q3, remained somewhat muted in Q4.
The details, timing, and political will associated with any wholesale orpiecemeal changes, however, remain to be seen. More importantly, themassive underlying demographic trends in the U.S. remain intact withor without Obamacare. Namely, rising premiums for younger and lessfrequent consumers of health insurance (mandate or not) are a plugill-equipped to handle the onslaught of costs caused by the healthcaresystem’s slow-motion collision with the aging population iceberg.
…And so the band plays on. Investment attention remains focused onprovider consolidation/scale to gain leverage with payors; technologyand services to cut costs and improve quality of care; and medicalpractice areas with significant private pay revenue that can shieldreimbursement risk regardless of which way the wind blows fromWashington, D.C.
Valuation Multiples
Note: Public company data as of January 18, 2017* Announcement date 7
7.7x
9.0x
11.7x12.5x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
Hospitals Alternate SiteProviders
Outsourced Services Home Healthcare
Forward Year EV/EBITDA
80
85
90
95
100
105
110
115
120
125
130
Jan-16 Apr-16 Jul-16 Oct-16 Jan-17
Outsourced Services Technology
Hospitals Alternate Site Providers
S&P 500 Home Healthcare
7
PUBLIC COMPANY ANALYSIS
Last Twelve Months Indexed Stock Price Performance
HEALTHCARE TECHNOLOGY SECTOR UPDATE
CHILDS Quarterly Update: Q4 2016
M&A volume in Q4 for healthcare technology companies in U.S.suffered from similar volume decline as overall market in face ofcontinued economic and political uncertainties.
Public healthcare technology companies continued their steadyperformance, especially the administrative sector which outperformedS&P 500 and achieved premium valuation at 18.0x 2017 EBITDA.
Several notable M&A transactions occurred in Q4, including bothstrategic and financial buyers (see below). CHILDS advised FalconConsulting Group, LLC on its sale to AVVAP. Falcon provides ITconsulting related to EPIC software.
We continue to see a strong outlook for M&A activity and investmentfocus in the space especially for solutions which help medicalprofessionals manage core areas such as:
Quality of Care / Care Coordination
Efficient use of Patient Data
Coding, Billing, and Finance
Patient Engagement
Clinical Data Capture
Valuation Multiples
Note: Public company data as of January 18, 2017* Announcement date
U.S. Healthcare Tech M&A Transactions by Quarter
14.8x
18.0x
6.5x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
20.0x
Medical Records Administrative Revenue Mgmt.
Forward Year EV/EBITDA
–
50
100
150
200
250
300
350
400
450
500
60
70
80
90
100
110
120
130
140
150
Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17
Medical Records Administrative Revenue Mgmt. S&P 500
8
Date Closed Buyer Target Target Description
12/15/16* Lonza Group CapsugelDevelops dosage forms and solutions for the healthcareindustry around the world
12/14/16 Pamplona Capital Management Logicworks CorporationProvides healthcare cloud solutions, including HIPPAcomplaint infrastructure
11/25/16* CC Capital Management Constellation Healthcare TechnologiesProvides outsourced revenue cycle management, practicemanagement, and group purchasing services to physicians
11/7/16 GTCR RevSpringProvides revenue acceleration and account receivablemanagement software solutions
10/4/16 Wolters Kluwer Health Emmi SolutionsDesigns technology-based solutions to deliver patientengagement aspects for hospitals and health systems
RECENT M&A TRANSACTIONS
8
PUBLIC COMPANY ANALYSIS
Last Twelve Months Indexed Stock Price Performance
IT & PROFESSIONAL SERVICES SECTOR UPDATE
CHILDS Quarterly Update: Q4 2016
A trend throughout 2016 has been higher volume M&A activity in theIT & Professional Services sector versus the rest of the middle market.The fourth quarter was no exception. The sector saw 238 M&Atransactions announced or closed; a quarter over quarter increase,while the broader middle market saw a slight decrease in volume.
Despite this sector’s resilience versus the broader middle market, totaltransaction volume was down in 2016 versus 2015, primarily drivenby fewer quality assets available for purchase. However, buyersremain willing to pay premiums for high quality businesses and theyhave ample capital to do so. The debt capital markets remain open andrelatively inexpensive, strategic buyers have near historic cash, andprivate equity firms continue to successfully raise more capital.
This year we have covered several hot sectors that are responsible fordriving both deal value and volume in IT & Professional Services,including Cloud Technology, Cloud Services, the Workday Ecosystem,and Cybersecurity. In this last column for the year, we will reviewanother subsector that is driving deal volume and that has helped anentire strategic buyer universe pivot their business model - the DigitalAgency / Application Development sector.
The first major strategic transaction was Publicis’ acquisition ofSapient in late 2014. Through this, Publicis, a large advertising firm,expanded its capabilities into digital offerings, applicationdevelopment, and mobility; all hot sectors that are highly in demand.Since then, many formerly less tech-savvy strategic acquirers like StIves plc (formerly print media focused), Globant and WPP, amongothers, have made numerous acquisitions of digital/app dev/mobiletargets in order to expand their capabilities and keep pace with thechanging technology landscape. We expect this trend with strategicbuyers to continue into 2017.
Recent Digital / Application Development Transactions
Globant acquires L4 Mobile (digital product development)
St Ives acquires The App Business (mobile applications)
Claranet Limited acquires Diademys (application development)
Valtech acquires eFocus (digital agency, application development)
Valuation Multiples
Note: Public company data as of January 18, 2017* Announcement date
Date Closed Buyer Target Target Description
1/5/17* Gartner Research CEB Data analysis, research and talent assessment firm
12/31/16 Datavail Corporation NavantisSystems integration focused on the Microsoft stack (CRM,SharePoint, Azure)
12/21/16 Leeds Equity Partners Prosci Management consulting and research firm
12/7/16 TekLinks Guidant Partners Managed IT infrastructure services
11/17/16 ABRY Partners Nuspire Networks Managed network security services
11/16/16 Summit Partners Fineline Technologies Lockheed’s government IT services business
11/10/16 Accenture DayNine Consulting Workday consulting firm
RECENT M&A TRANSACTIONS
8.4x 8.5x
9.9x 9.8x
12.4x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
Federal IT Services SystemsIntegrators/VARs
BPO Consulting Services ManagedServices/Hosting
FY EV/ EBITDA
80
90
100
110
120
130
140
150
Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17
Consulting Services Managed Services/Hosting
Federal IT Services Systems Integrators / VARs
S&P 500 BPO
9
9
0
50
100
150
200
250
300
350
400
450
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2012 2013 2014 2015 2016
SOFTWARE SECTOR UPDATE
CHILDS Quarterly Update: Q4 2016
Notes: Public company data as of January 18, 2017
M&A transaction volume for software companies continued to decline with only 277 deals closing in Q4 2016. The lull in activity highlightsthe global economic and political uncertainty that has overshadowed the market since the summer. Moving into 2017, CHILDS expects volumeto rebound.
Valuations for publicly traded software companies remained consistent with the previous quarter. At the end of Q4, HR Tech and SaaScompanies traded at significant market premiums of 6.0x and 5.7x LTM revenue, respectively, with slower growth Sales & Marketing Techcompanies at 3.1x.
The CHILDS software indices for HR Tech, Sales & Marketing Tech, and SaaS all had strong Q4 performances as well as solid annualperformance, especially in light of the market lows in Q1 2016.
In December 2016, CHILDS completed another Sales & Marketing Tech transaction with the successful majority recapitalization of TheChannel Company by Stone-Goff Partners.
Public Valuation MultiplesU.S. Software M&A Transactions by Quarter (2012 – Q4 2016)
CHILDS Deal Case Study: The Channel CompanyLast Twelve Months Indexed Stock Price Performance
65
75
85
95
105
115
125
135
Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17
HR Tech SaaS Sales/Marketing Tech S&P 500
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
HR Tech SaaS Sales/Marketing Tech
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
has been recapitalized by
December 2016
The Channel Company is a leading provider ofIT channel media, events, professional channelservices, and other marketing solutions to theIT channel industry
The Channel Company was founded in 1982and is headquartered in Westborough,Massachusetts
In December 2016, Stone-Goff Partners, aprivate equity firm based in New York,acquired a majority stake in The ChannelCompany
CHILDS Advisory Partners served as the exclusive financial advisor to TheChannel Company to advise in the sale of a majority stake in the business
We received multiple indications of interest and letters of intent as part ofthe process
This transaction represents the 8th deal for CHILDS in Marketing Techincluding sales, marketing, product and supply chain technology
10
Date Closed Buyer Target Target Description
12/28/16 Roper Technologies Deltek Enterprise software for professional services
12/19/16 Adobe Systems TubeMogul Cloud-based platform for video advertising spend
12/9/16 LDiscovery Kroll OntrackLegal information management, data recovery, and e-discoverysolutions
12/1/16 Genesys Interactive Intelligence Customer engagement, communication and collaborative solutions
11/29/16 Lanyon Solutions Cvent Corporate events and meetings software solutions
11/14/16 NICE inContact Contact center software solutions
11/1/16 salesforce.com Krux DigitalData management platform for marketers, media companies,publishers and agencies
RECENT M&A TRANSACTIONS
10
CONTACT INFORMATION
SECTOR FOCUS
OUR SERVICES
ABOUT CHILDS ADVISORY PARTNERS
CHILDS Advisory Partners provides exceptional investment banking services to high‐performing business services, healthcare and technologymiddle market companies. Our unique combination of sector expertise, process excellence, and a deep, experienced team allows us to achievesuccessful outcomes for our clients. Collectively, our senior bankers have executed over 450 transactions. CHILDS Advisory Partners was namedthe 2016 Boutique Investment Banking Firm of the Year by The M&A Advisor. CHILDS is a member of FINRA and SIPC and is a registeredbroker‐dealer. CHILDS is a member of FINRA and SIPC and is a registered broker‐dealer.
Sales and Recapitalizations – CHILDS works with management teams, financial sponsors, and special committees to provide crucial insights into the intricacies and nuances of sale processes
Strategic Acquisitions – Our disciplined methodology coupled with our industry relationships makes CHILDS an ideal buy‐side partner
INDUSTRIAL
SERVICESTECHNOLOGY
HUMAN CAPITAL
MANAGEMENT
IT & PROFESSIONAL
SERVICES
BUSINESS SERVICES
SERVICES SOFTWARE
Alan BuglerManaging DirectorBusiness Services(404) 751-3004
Jim ChildsCEO
(404) [email protected]
Ross DeDeynManaging Director
Healthcare(404) 751-3018
Tom DonahueManaging Director
Technology(617) 290-5433
Don HolbrookManaging Director
Technology(949) 276-8715
Cooper MillsManaging DirectorBusiness Services(404) 751-3003
Dave PhillipsManaging DirectorBusiness Services(904) 292-9305
Scott RhodesManaging Director
Technology(404) 751-3021
Jason WallaceManaging DirectorBusiness Services(404) 751-3020
MERGERS & ACQUISITIONS
CAPITAL
RAISES
FINANCIAL & STRATEGIC ADVISORY
Our proprietary knowledge database consists of active debt and equity investors including senior and mezzanine debt and growth equity
CHILDS is continuously in the market assisting its clients to raise capital for a multitude of purposes including organic growth, acquisitions, and one‐time owner dividends
HEALTHCARE TECHNOLOGY
CHILDS can act as a strategic consultant to help leadership teams develop their strategic road map in order to create and enhance shareholder value
We can undertake a detailed analysis of a company’s tangible and intangible valuation drivers as a separate undertaking or as a precursor to an M&A assignment
CHILDS Quarterly Update: Q4 2016
11
The preferred investment bank for high performing business services, healthcare and technology companies.www.childsadvisorypartners.com 404.751.3000