tech-enabled services monthly november 2017 · the new publicly traded company will be a top 5 it...
TRANSCRIPT
Tech-Enabled Services Headline Transactions
Enterprise Value / LTM Revenue Enterprise Value / LTM EBITDA
LTM Gross & EBITDA Margins
12.0x 10.4x
6.0x
9.9x
16.4x 14.6x
8.6x
0.0
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
ITS Offshore ITS ManagedServices
IT Staffing TransactionProcessing
Info Services VAR
28.7% 30.6%
54.0%
22.4%
42.9%
59.6%
12.9% 9.4% 14.6%
33.8%
3.5%
27.4% 26.6%
3.8% 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
•
•
Ernst & Young acquired Munich-based etventure, a digital consultancy that specializes in digital transformation and development of digital business modelsetventure, which generates annual revenue of approximately $24 million, will continue to exist as an independent company, operating through its offices in Europe, the U.S. and China
Managed Services
•
•
MSouth Equity Partners acquired Georgia-based OnePath Systems (backed by Trivest Partners), a provider of managed IT services and cloud transformation servicesOnePath continues to grow organically and through M&A – the Company completed the acquisition of Internet & Telephone, a provider of IT support and business telco services, in May 2017
IT Services
•
•
Government-focused IT service providers KeyPoint Government Solutions and Vencore Holding (both backed by Veritas Capital) agreed to acquire Virginia-based DXC Technology's (NYSE: DXC) U.S. public sector business in a Reverse Morris trust transactionThe new publicly traded company will be a top 5 IT services provider to the U.S. government, with approximately $4.3 billion in revenue and a workforce exceeding 14,000
Managed Services
• Massachusetts-based MSP Thrive Networks (backed by M/C Partners) acquired Precision IT Group, an MSP with a financial services driven practice serving clients in New York City and the greater tristate area; the combined Company has nearly 200 employees
IT Services
•
•
Sirius Computer Solutions announced its agreement to acquire Illinois-based Forsythe Technology, a provider of enterprise IT solutions including hosting and security servicesForsythe generated more than $1 billion in revenue in 2016; the combined Company will generate more than $3 billion in revenue and employ more than 3,000 employees in more than 70 offices
U.S. publicsector business
1. Headline Transactions
1.1x
1.5x
2.0x
0.3x
3.3x 3.3x
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
3.8%
7.7% 7.8%
(0.6%)
7.1% 7.4%
10.7%
(2%)
0%
2%
4%
6%
8%
10%
12%
ITS Offshore ITS ManagedServices
IT Staffing TransactionProcessing
Info Services VAR
Tech-Enabled Services MonthlyNovember 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 Comments10/31/2017 Info Services Five Arrows
ManagersA2Mac1 France-based A2Mac1 provides benchmarking
solutions and services to automotivemanufacturers and suppliers, with offices inAsia, Europe and the U.S.
NA France-based Five Arrow Managers' (the investmentarm of Rothschild) acquired a majority stake inA2Mac1
10/24/2017 IT Services Cognizant Technology Solutions (NSDQ: CTSH)
Netcentric Zurich-based Netcentric is a digital experienceand marketing consultancy with digitalmarketing teams across Europe; the Companyis an independent Adobe partner in Europe
NA Netcentric's approximately 380 digital marketingspecialists will join the Cognizant Digital Businesspractice; the acquisition extends Cognizant's digitalcapabilities in the interactive and digital marketingspace
10/23/2017 IT Services HighPoint Global Primescape Solutions
Virginia-based Primescape Solutions providesconsulting services to government agencies,assisting in digital transformation withservices including software development, dataservices and interactive content
NA Indianapolis-based HighPoint Global similarly focuseson government clients, providing consulting servicesto improve the touchpoints between governmentsand citizens; the combined Company will generaterevenue of approximately $140 million
10/11/2017 IT Services Converge Technology Partners
Corus Group (d.b.a. Corus360)
Georgia-based Corus360 provides ITconsulting solutions with specialties spanningdata center, security, infrastructure andrecovery solutions
NA Toronto-based Converge Technology Partners isbuilding a national platform of regionally focused ITinfrastructure firms in the U.S. and Canada. Convergeplans to leverage Corus360 (the Company's firstacquisition) as a platform for M&A in North Americaand abroad
10/10/2017 IT Services DXC Technology (NYSE: DXC)
Logicalis Group's Service Management Consultancy operation (Logicalis SMC)
Netherlands-based Logicalis SMC providestechnology-enabled solutions for the servicemanagement sector; the Company was thefirst in Europe to be named a ServiceNowMaster Solutions partner and today is theregion's largest ServiceNow integrator
NA Logicalis SMC will join DXC’s Technology ServiceNowpractice within Fruition Partners and expand DXC’sposition as a leading global integrator for ServiceNow;the transaction also provides Logicalis Group withliquidity to continue developing its digitaltransformation platform and pursue further M&A
3. TES Transactions
Select Tech-Enabled Services Transactions Announced in September 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
Atlanta1230 Peachtree Street NESuite 550Atlanta, GA 30309 Tel: 404.995.6230
TEV / EBITDA Multiples Over Time
16.4x
14.6x
12.0x
10.4x
6.0x
8.6x
9.9x
3.0x5.0x7.0x9.0x
11.0x13.0x15.0x17.0x19.0x
Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Oct 2017
TEV
/ EBI
TDA
Transaction Processing Info Services ITS Offshore ITS IT Staffing VAR Managed Services
Notes: USD in millions Source: Capital IQ, Company SEC Filings, industry research and TM Capital estimates