Financial Technology, Data, and Analytics

Dear Clients and Friends,

Our latest report on the m&a trends, transactions and values in the dozen+ sectors of the information technology universe that we follow and sometimes lead can be found below. 

It’s the middle of March. The groundhog promised us that spring would soon be in the air. (Pay no attention to the blizzard raging as I write this. He’ll be right – eventually.) The bull market is 9-years on and still going strong; and so are four wars in the Middle East. No end in sight for any of it. Interest rates and oil prices are still low and look to stay that way for a while. Banks are lending ever higher amounts for m&a, financial sponsors have more than $1 trillion (and growing) in unspent committed investment funds, the stock price of acquiring companies remains high, and the US is looking to double down on military spending and activity.  

The last time we had so much money chasing deals it led to a pretty big bubble. But the experts tell us that we are smarter now and the economy (in the developed world anyway) should continue doing well. Administrations in Washington, London, Paris and elsewhere solemnly promise that they will further increase jobs, fix education and healthcare, keep us secure; protect the environment and the vulnerable; re-build our infrastructure; reduce our regulatory burden and our taxes, and protect us from those pesky tired, poor, and huddled masses yearning to breathe free. Most of these politicians can’t figure out how to forge common sense compromise on any of this and still get re-elected. So they opt for gridlock. But maybe that keeps them from doing anything really dumb.

Middle-market tech m&a (our territory) is certainly still benefitting from all of this. As you will see in the report found below, a lot of mid-market tech companies are growing, profitable and hiring. Transaction multiples and our pipeline remain strong.   

Some of the more interesting deals this past month are profiled on the pages that follow in the report here. A few of them include:

• Axway acquired Syncplicity from Skyview Capital. Skyview had acquired it from EMC in July 2015,

• Temenos (SWX:TEMN) made a binding offer to acquire Rubik for $55mm, valuing the company at an implied 1.7x LTM revenue,

• Thomson Reuters (TSX:TRI) agreed to acquire both Avox and Clarient Global from DTCC for undisclosed amounts,

• Verisk Analytics (NASDAQ:VRSK) acquired Emergent Network Intelligence and Healix Risk Rating for undisclosed amounts,

• PayPal (NASDAQ:PYPL) agreed to acquire TIO Networks for $233mm, valuing the company at an implied 3.0x LTM revenue and 26.6x LTM EBITDA,

• Sophos Group (LSE:SOPH) agreed to acquire Invincea for $120mm, valuing the Company at an implied 9.8x LTM revenue.

Read more below.