Financial Technology, Data, and Analytics

Dear Clients and Friends,

Our latest report on the values and trends in the dozen+ segments of the information technology industry that we follow, and sometimes lead, is below.

On Tuesday (December 11th), the UK parliament will vote on a draft Brexit agreement with the EU – choosing between “Leave softly” or “Leave hard”. No matter which way they vote, the British population loses. It’s like the US in Vietnam. Too many politicians would rather let people suffer than risk losing an election. 

We have advised on transactions in 27 countries. The market remains strong – except in the UK. We have one UK client that some investors won’t touch because they fear Brexit will greatly increase its costs. Another is aggressively moving personnel out of the UK to the EU. The CEO of a third client says that the capital markets are closed for smaller firms like his – until Brexit fears moderate. My daughter worries that she may not have her London-based job next year.

Brexit was approved by UK voters after politicians told economically stretched Britons that by “Leaving” the EU – the economic and political partnership that, for 40 years, has guaranteed free movement of goods, currencies and people across the borders of 28 member countries – the UK would regain its “sovereignty” (no more kowtowing to Brussels bureaucrats); get more jobs (fewer immigrants plus a business environment without EU interference); suffer less crime; improve healthcare (stop sending GBP 350m to Brussels every week); and put a chicken in every pot. Like the tales American politicians told us about Vietnam, it was lies.

Now, they press forward knowing that Brexit may force skilled workers to leave the UK; limit Britons ability to work in the EU; and probably reduce jobs – if manufacturers cut back production in the UK because their products will no longer be exported tax-free to Europe. Tax revenues will likely decrease if banks or other UK-based companies doing business with Europe relocate their headquarters to the EU; and that means there won’t be “extra” money for healthcare. Meanwhile, the rules on products won’t change much – since half of UK exports go to the EU, which sets those rules – only now without any input from the UK. Oh, and also, tariffs probably will mean an increase in costs for chickens, pots and other imported goods.

We hope all politicians wake up to the benefits of intelligent globalism – including reduced poverty, improved health, increasing standards of living and growing economies. Meanwhile we’ll keep doing our best to advise owners and managers of information technology companies looking to buy, sell, or raise capital around the world. Even in the UK. Some of the more interesting recent transactions include:

• SAP (NYSE:SAP) acquired Qualtrics International for $8bn,
• BlackBerry agreed to acquire Cylance (Irvine, CA) for $1.4bn in cash,
• Virtu (NASDAQ:VIRT) agreed to acquire ITG for $1.1bn,
• Edenred (ENX:EDEN) agreed to acquire CSI Enterprises for $600mm,
• Forrester (NASDAQ: FORR) acquired SiriusDecisions for $245mm in cash,
• Wave Computing (Campbell, CA) raised $200mm in an equity funding round led by
• Oakmont Corporation with participation from existing investors,
• Information Resources (IRI) (Chicago, IL) raised a new undisclosed sum of capital led by Vestar Capital Partners with participation from existing investor, New Mountain Capital.

See below for our December Infotech M&A Update.