Tech-Enabled Services Monthly February 2017€¦ · hosting services landscape for SMBs; its...
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Tech-Enabled Services Headline Transactions Enterprise Value / LTM Revenue Enterprise Value / LTM EBITDA LTM Gross & EBITDA Margins 11.2x 9.7x 6.5x 10.7x 14.4x 13.3x 7.9x 0.0 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x ITS Offshore ITS Managed Services IT Staffing Transaction Processing Info Services VAR 28.7% 33.3% 49.6% 18.6% 43.1% 61.0% 11.9% 11.2% 15.3% 34.4% 3.5% 25.1% 27.0% 3.5% 0% 10% 20% 30% 40% 50% 60% 70% 0% 10% 20% 30% 40% 50% 60% 70% ITS Offshore ITS Managed Services IT Staffing Transaction Processing Info Services VAR Note: EBITDA Margins in red Target Acquirer Acquisition Synopsis IT Services • • Florida-based Harris Corporation (NYSE: HRS) is selling its government IT services division, which provides communications, engineering and IT solutions, to Veritas Capital for $690m in cash Veritas plans to leverages its experience in the government services market to support the Company in its future growth IT Services • • India-based Wipro (NYSE:WIT) acquired Brazil-based IT consultancy InfoSERVER, a provider of information security and identity protection solutions, for $8.7m The acquisition further enhances Wipro's presence in the LATAM market, particularly in the high growth financial and banking industry verticals served by InfoSERVER IT Services • • California-based Auxilio (AMEX: AUXO) acquired Texas-based CynergisTek, a provider of health information privacy, compliance and cybersecurity consulting services, for $34.3m ($26.8m plus an earn-out up to $7.5m) The acquisition is in line with Auxilio's long-stated interest to expand its reach in the healthcare IT security arena; CynergisTek will continue to operate as an independent subsidiary of Auxilio IT Services • • New Jersey-based SEAL Consulting offers a range of SAP consulting services for customers in the manufacturing, retail and consumer products industry verticals The acquisition signals CenturyLink's (NYSE: CTL) commitment to the SAP platform and enhances its application and infrastructure transformation capabilities Information Services • • Gartner (NYSE: IT) is acquiring Virginia-based CEB Inc. (NYSE: CEB), a provider of talent management research and advisory services, for $3.3b With the addition of CEB, Gartner bolsters its expertise in the HR function; the combined company will have a presence in over 100 countries with over 13,000 employees government IT services division 1.1x 1.5x 1.9x 0.2x 3.0x 2.8x 0.3x 0.0 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x ITS Offshore ITS Managed Services IT Staffing Transaction Processing Info Services VAR 5.7% 8.1% (2.4%) (4.9%) 16.4% 4.0% 2.3% (8%) (3%) 2% 7% 12% 17% 22% ITS Offshore ITS Managed Services IT Staffing Transaction Processing Info Services VAR Tech-Enabled Services Monthly February 2017 LTM Revenue Growth
Transcript of Tech-Enabled Services Monthly February 2017€¦ · hosting services landscape for SMBs; its...
Tech-Enabled Services Headline Transactions
Enterprise Value / LTM Revenue Enterprise Value / LTM EBITDA
LTM Gross & EBITDA Margins
11.2x 9.7x
6.5x
10.7x
14.4x 13.3x
7.9x
0.0
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
ITS Offshore ITS ManagedServices
IT Staffing TransactionProcessing
Info Services VAR
28.7% 33.3%
49.6%
18.6%
43.1%
61.0%
11.9% 11.2% 15.3%
34.4%
3.5%
25.1% 27.0%
3.5% 0%
10%
20%
30%
40%
50%
60%
70%
0%
10%
20%
30%
40%
50%
60%
70%
ITS Offshore ITS ManagedServices
IT Staffing TransactionProcessing
Info Services VAR
Note: EBITDA Margins in red
Target Acquirer Acquisition Synopsis
IT Services
•
•
Florida-based Harris Corporation (NYSE: HRS) is selling its government IT services division, which provides communications, engineering and IT solutions, to Veritas Capital for $690m in cashVeritas plans to leverages its experience in the government services market to support the Company in its future growth
IT Services
•
•
India-based Wipro (NYSE:WIT) acquired Brazil-based IT consultancy InfoSERVER, a provider of information security and identity protection solutions, for $8.7mThe acquisition further enhances Wipro's presence in the LATAM market, particularly in the high growth financial and banking industry verticals served by InfoSERVER
IT Services
•
•
California-based Auxilio (AMEX: AUXO) acquired Texas-based CynergisTek, a provider of health information privacy, compliance and cybersecurity consulting services, for $34.3m ($26.8m plus an earn-out up to $7.5m)The acquisition is in line with Auxilio's long-stated interest to expand its reach in the healthcare IT security arena; CynergisTek will continue to operate as an independent subsidiary of Auxilio
IT Services
•
•
New Jersey-based SEAL Consulting offers a range of SAP consulting services for customers in the manufacturing, retail and consumer products industry verticals The acquisition signals CenturyLink's (NYSE: CTL) commitment to the SAP platform and enhances its application and infrastructure transformation capabilities
Information Services
•
•
Gartner (NYSE: IT) is acquiring Virginia-based CEB Inc. (NYSE: CEB), a provider of talent management research and advisory services, for $3.3bWith the addition of CEB, Gartner bolsters its expertise in the HR function; the combined company will have a presence in over 100 countries with over 13,000 employees
government IT services division
1. Headline Transactions
1.1x
1.5x
1.9x
0.2x
3.0x 2.8x
0.3x
0.0
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
ITS Offshore ITS ManagedServices
IT Staffing TransactionProcessing
Info Services VAR
5.7% 8.1%
(2.4%)(4.9%)
16.4%
4.0% 2.3%
(8%)
(3%)
2%
7%
12%
17%
22%
ITS Offshore ITS ManagedServices
IT Staffing TransactionProcessing
Info Services VAR
Tech-Enabled Services MonthlyFebruary 2017
LTM Revenue Growth
Selected TM Capital Tech-Enabled Services Experience TM Capital’s Tech-Enabled Services Contacts
Bradford A. Adams Managing Director
617-259-2203 [email protected]
Jarrad S. Zalkin Managing Director
617-259-2207 [email protected]
Annc. Date Sector Acquirer Target Target DescriptionEnterprise
Value Comments1/30/2017 VAR Procurri LLC Congruity LLC Massachusetts-based Congruity provides
implementation and management services forinfrastructure solutions, with over 12,000service professional and 700 stockinglocations in over 100 countries
NA Georgia-based Procurri LLC, a subsidiary of Singapore-based Procurri Corp (SGX:BVQ), acquired a majoritystake in Congruity to expand its third partymaintenance and IT lifecycle services offering
1/24/2017 Managed Services
Apogee IT Services DSM Computing Solutions Inc.
Toronto-based managed services providerDSM Computing Solutions provides IT supportservices and cloud-based computing solutions
NA Pittsburgh-based managed services provider Apogee(backed by Brook Venture Partners and Blue HeronCapital) is eyeing international expansion; DSMexpands Apogee's footprint outside the U.S.
1/19/2017 Managed Services
Liquid Web Inc. Cogswell Enterprises Inc. ("WiredTree")
Chicago-based WiredTree provides managedweb hosting services with 24x7x365 support,to small and medium-sized businesses
NA Michigan-based Liquid Web (backed by MadisonDearborn), continues to consolidate the managedhosting services landscape for SMBs; its acquisition ofWiredTree comes shortly after its acquisition ofRackspace's Cloud Sites business unit late last year
1/16/2017 IT Staffing LogiGear Corporation
True North Service, Inc.
Washington-based True North Serviceprovides contract IT staffing and softwaretesting services, with customers includingAmazon and T-Mobile
NA The acquisition provides LogiGear, a California-basedsoftware testing and staffing firm, with an entry pointin the Pacific Northwest; the combined company willalso have a more expansive service offering
1/12/2017 IT Services Computacenter plc cITius AG Switzerland-based cITius provides ITconsulting and data virtualization services
NA UK-based Computacenter (LSE: CCC) has beenparticularly quiet on the M&A front; cITius is theCompany's first acquisition since buying Newis SA inearly 2013
1/11/2017 IT Services General Communication, Inc.
Northpoint Consulting Inc.
Washington-based Northpoint Consultingprovides computer networking andcommunications consulting services includingnetwork analysis, security and cloud migrationmanagement
NA The addition of Northpoint expands Alaska-basedGeneral Communication's (backed by SearchlightCapital and SR Capital Advisors) geographic reach inthe Pacific Northwest and broadens its offering ofunified communication, network security and cloudintegration services
1/9/2017 IT Services Accenture plc Altitude Inc. Boston-based Altitude is a product design andinnovation firm that uses its expertise inconsumer insight, design and productengineering to help companies innovate anddevelop new products and services
NA The acquisition enhances Accenture's ConnectedProduct Lifecycle Services practice which focuses onhelping its clients develop IoT business models andcapture new revenue streams in the high-growth,connected products and services market
3. TES Transactions
Select Tech-Enabled Services Transactions Announced in January 2017
www.tmcapital.com /technology
New York641 Lexington Avenue30th FloorNew York, NY 10022Tel: 212.809.1360
Boston201 Washington Street32nd FloorBoston, MA 02145Tel: 617.259.2200
Atlanta3575 Piedmont Road NESuite 1010Atlanta, GA 30305 Tel: 404.995.6230
TEV / EBITDA Multiples Over Time
14.4x
13.3x
11.2x
6.5x
9.7x
7.9x
10.7x
3.0x
5.0x
7.0x
9.0x
11.0x
13.0x
15.0x
17.0x
Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Jan 2017
TEV
/ EBI
TDA
Transaction Processing Info Services ITS IT Staffing Offshore ITS VAR Managed Services
Notes: USD in millions Source: Capital IQ, Company SEC Filings, industry research and TM Capital estimates
