Tech-Enabled Services Monthly April 2016

Tech-Enabled Services Monthly
April 2016
Tech-Enabled Services Headline Transactions
Target
Acquirer
Acquisition Synopsis
• Bluewolf, backed by Riordan, Lewis & Haden, is one of Salesforce's longest standing consulting partners,
providing design and build services to create custom user experiences
IT Services
• IBM acquired Bluewolf to augment the existing Interactive Experience (IX) practice of IBM Global Services
and add Bluewolf's cloud consulting and implementation capabilities to its service offering
• netAura provides engineering, development and consulting services for managed security technologies,
serving both the U.S. government and corporate markets
IT Services
• CenturyLink acquired netAura to enhance its recently launched Managed Security Suite, which is designed
to help organizations better detect, prevent and respond to sophisticated cyberattacks
• Dell's Perot Systems provides IT consulting services to a wide range of industries, but is especially strong in
Managed
healthcare, providing services such as medical record digitization and process automation
• Dell has agreed to sell Perot Systems to Japan-based technology firm NTT Data for $3.05 billion in order to
Services
pay down debt associated with the technology giant's pending acquisition of EMC
• Meridian Imaging Solutions provides managed IT services and content management solutions that drive
improved efficiency and workflow for its clients' business operations
IT Services
• Konica acquired Meridian (its twenty-first acquisition in the past four years), to strengthen its position as a
complete workplace solutions provider and expand its footprint in the DC area
• BITI provides business technology related services, such as cybersecurity, big data analytics, risk
assessment and change management services
IT Services
• PwC acquired BITI to compliment its existing information systems development planning / implementation
and risk management offering, as well as strengthen its footprint in the Baltics
Enterprise Value / LTM Revenue
3.5x
Enterprise Value / LTM EBITDA
18.0x
3.2x
3.0x
12.0x
1.9x
2.0x
14.0x
14.0x
2.4x
2.5x
16.2x
16.0x
2.8x
12.2x
10.2x
9.0x
10.0x
7.4x
8.0x
1.5x
1.1x
7.0x
6.0x
1.0x
4.0x
0.3x
0.5x
0.2x
0.0
ITS
Offshore ITS
Hosting
Services
IT Staffing
Transaction Info Services
Processing
VAR
2.0x
0.0
ITS
8.0%
8%
60%
53.6%
50%
50%
33.0%
40%
1.8%
38.2%
34.5%
29.6%
30%
0%
20%
(2%)
Hosting
Services
IT Staffing
23.0%
17.9%
40%
26.2%
18.8%
11.2%
9.0%
Info Services
VAR
20%
10%
3.4%
(2.7%)
Transaction
Processing
30%
3.9%
10%
(2.4%)
(4%)
VAR
70%
5.7%
4%
Offshore ITS
Transaction Info Services
Processing
60.5%
60%
5.3%
6%
ITS
IT Staffing
70%
1. Headline Transactions
10%
1.3%
Hosting
Services
LTM Gross & EBITDA Margins
LTM Revenue Growth
2%
Offshore ITS
0%
ITS
Offshore ITS
Hosting
Services
IT Staffing
Transaction
Processing
Info Services
VAR
0%
Note: EBITDA Margins in red
TEV / EBITDA Multiples Over Time
17.0x
16.2x
TEV / EBITDA
15.0x
14.0x
13.0x
12.2x
11.0x
10.2x
9.0x
9.0x
7.0x
7.4x
5.0x
7.0x
3.0x
Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
ITS
Offshore ITS
Hosting Services
IT Staffing
Transaction Processing
Info. & Data
VAR
Select Tech-Enabled Services Transactions Announced in March 2016
Annc. Date
Sector
03/24/16
IT Services
03/24/16
Enterprise
Value
Acquirer
GFI Informatique
S.A.
Target
Description
IMPAQ Holding
AG
Software publisher, IT services consultancy and
provider of solutions for financial sector clients
with anti-money laundering and fraud
detection services
NA
GFI Informatique acquired IMPAQ to broaden its
product offering, diversify its delivery method (through
IMPAQ's SaaS model) and extend its reach into Eastern
European markets
IT Services
Sirius Computer
Solutions, Inc.
Force 3, Inc.
Offers consulting services and solutions
around network security; viewed by many
manufacturers as one of the most skilled
Federal partners in the space
NA
Force 3 will compliment Sirius' existing network
security platform through its strong engineering skills,
diverse base of Federal clients and established
footprint in the Mid-Atlantic market
03/03/16
IT Services
MarkIT Holding
AS
ePartner as
Provides B2B IT e-commerce platform, with a
dominant position serving Norway's leading
companies
NA
MarkIT's 51% majority acquisition of ePartner will
create a best-in-class purchasing portal, combining
ePartner's expertise in IT purchasing systems with
MarkIT's global reach
03/17/16
IT Services
CSC
Dalmatian Group
Pty Ltd.
Offers
information
and
cybersecurity
consultancy services, focusing largely on the
Australia and New Zealand markets
NA
CSC, Australia's largest IT services provider, acquired
Dalmatian Group to bolster its cybersecurity services
offering, which is experiencing growing demand
03/14/16
IT Services
Tetra Tech, Inc.
INDUS
Corporation
IT solutions firm offering data analytics,
geospatial analysis, secure infrastructure, cloud
provisioning and mobility services for U.S.
federal government customers
NA
Leveraging
INDUS'
expertise
in
information
management and data analysis, Tetra Tech will be able
to better assist customers in making data-driven
decisions
03/13/16
VAR
Arrow
Electronics, Inc.
Distribution
Central Pty
Limited
Provides
specialized,
technical-oriented
distribution and channel support to clients
predominately in Australia, New Zealand and
Singapore
$48.6
Arrow Electronics acquired Distribution Central to
strengthen its presence in the value-added distribution
marketplace and gain scale in order to better compete
with larger players
03/03/16
IT Services
Madison
Dearborn
Partners, LLC
Ankura
Provides governance, risk compliance and
Consulting Group, restructuring services
LLC
$100.0
Ankura announced a strategic growth commitment of
$100 million from Madison Dearborn Partners, which
will be used to accelerate expansion in high-value
sectors through organic and inorganic growth
Notes:
USD in millions
Source: Capital IQ, Company SEC Filings, industry research and TM Capital estimates
Comments
TM Capital’s Tech-Enabled Services Contacts
Selected TM Capital Tech-Enabled Services Experience
3. TES Transactions
Bradford A. Adams
Managing Director
617-259-2203
[email protected]
New York
641 Lexington Avenue
30th Floor
New York, NY 10022
Tel: 212.809.1360
Boston
201 Washington Street
32nd Floor
Boston, MA 02145
Tel: 617.259.2200
Jarrad S. Zalkin
Andrew O. Redmond
Managing Director
Vice President
617-259-2207
617-259-2215
[email protected] [email protected]
Atlanta
3575 Piedmont Road NE
Suite 1010
Atlanta, GA 30305
Tel: 404.995.6230
www.tmcapital.com /technology