Harris Williams’ Technology Practice

Harris Williams (“HW”)

  • 340+ professionals across eight offices globally
  • 170+ closed transactions in the last 24 months
  • 10 industry groups

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Technology, Media & Telecom (“TmT”) Group

  • 35+ professionals across Boston, San Francisco, and London

Horizontal Focus Sectors

  • Compliance Software
  • CRM and Member Management Software
  • Data & Analytics
  • Enterprise Software
  • Human Capital Management
  • Infrastructure & Security Software
  • IT & Tech Enabled Services
  • Managed Services, Hosting & Data Center Solutions
  • Online Marketing, Data & Research

Vertical Focus Sectors

  • Architecture, Engineering & Construction
  • eCommerce & Retail Software
  • Education Technology
  • Energy Technology
  • Facilities & Real Estate Technology
  • Financial Technology
  • Government Technology
  • Healthcare IT
  • Industrial & Supply Chain Software

Select Recent HW HCM Technology Transactions

screen_shot_2019-07-18_at_5.50.49_pm.pngProvider of fully-integrated, SaaS-based operator qualification (OQ); drug and alcohol; safety and insurance; and training solutions across multiple end-markets

 

 

 

 

screen_shot_2019-07-18_at_5.51.23_pm.pngProvider of GRC SaaS solutions including credential management and payer enrollment services to healthcare facilities

 

 

 

 

screen_shot_2019-07-18_at_5.51.49_pm.pngProvider of Workforce Management, Training, and Compliance Solutions for the Healthcare, Financial Services, and Real Estate Industries

 

 

 

 

screen_shot_2019-07-18_at_5.52.18_pm.pngDeveloper of business management software for businesses and non-profit organizations in the United Kingdom

 

 

 

 

screen_shot_2019-07-18_at_5.52.45_pm.pngProvider of time and attendance management, staff scheduling, payroll and security management software products

 

 

 

 

screen_shot_2019-07-18_at_5.53.14_pm.pngEmployee scheduling solutions for retail and hospitality sectors

 

 

 

 

screen_shot_2019-07-18_at_5.53.42_pm.pngProvider of emergency care training intended to deliver safety and health compliance to communities and businesses

 

 

 

 

screen_shot_2019-07-18_at_5.54.07_pm.pngProvider of administration software, rules-based online benefits enrollment, data integration, medical and voluntary benefits, broker and HR admin dashboards

 

 

 

 

screen_shot_2019-07-18_at_5.54.38_pm.pngDeveloper of business management software for businesses and non-profit organizations in the United Kingdom

 

 

 

 

screen_shot_2019-07-18_at_5.55.03_pm.pngOffers courses for healthcare professionals and healthcare organizations & provides an online business-education library

 

 

HCM Technology Focus Areas

Talent Acquisition and Management

Solutions focused on sourcing, recruiting, interviewing, and on-boarding employees to an organization

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  • Employee recruitment, engagement, and retention remain top of mind - especially as job market tightens
  • Data-driven / market place tools are increasing connectivity for both enterprises and their contingent / on-demand workers
  • Talent tools adopting machine learning, predictive analytics, assessment algorithms, and artificial intelligence
  • Real time employee review solutions gaining traction (social, collaboration management, rewards)
  • Identification and recruitment of internal and known talent are corporate strategic initiatives
  • Learning management systems and corporate learning, training and compliance content increasingly core to HR suite

Workforce Management

Solutions focused on optimizing the efficiency and productivity of an organization’s employees

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  • “Workforce as a Strategy” is increasingly driving companies to adopt data-driven technologies that remove friction from the employee journey
  • Benefits and payroll solutions are fundamental to employee / employer connectivity with engagement and wellness proliferating
  • HRIS automation is table-stakes as employers now shifting focus to productivity and collaboration enhancers
  • Automated and comprehensive risk management / compliance tools continue to experience strong adoption
  • Back office HR capabilities for on-demand labor market is an emerging market opportunity
  • Leading vertical-specific platforms remain highly attractive to investors and acquirers (e.g., retail, healthcare, and hospitality)

Notable Q2 2019 HCM Technology Transactions

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Alight Solutions’ Acquisition of Hodges-Mace

  • Hodges-Mace provides employee benefits technology, voluntary benefits, and custom enrollment services
  • With the addition of Hodges-Mace's highly configurable technology and high-touch enrollment services, Alight will now be able to meet the needs of employers of nearly any size and level of complexity, including employers smaller than what Alight has traditionally served
  • The acquisition of Hodges-Mace will allow Alight to expand their capabilities and further their efforts to help employers deliver impactful benefits programs, while providing their people with the resources they need to be better healthcare consumers

 

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Alexander Mann Solutions’ Acquisition of Karen HR

  • Karen HR’s ‘cognitive recruiting assistant’, Karen AI, integrates with existing systems and harnesses leading-edge technology to enhance recruitment processes and boost candidate engagement
  • Karen HR offers a platform that ranks hundreds of resumes against jobs every second and can be deployed to engage with jobseekers via chat or SMS
  • The acquisition extends Alexander Mann Solutions’ global capabilities while further supporting the Company’s aggressive growth plans and commitment to extending its footprint in the Americas

 

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HealthEquity’s Acquisition of WageWorks

  • WageWorks provides tax-advantaged programs for employees and employers
  • WageWorks’ platform specializes in member and employer engagement to provide Consumer-Directed Benefits (CDBs), including pre-tax spending accounts such as HSAs, FSAs, and commuter benefit services
  • The acquisition will provide significant synergy opportunities with approximately $50 million in annualized, on-going synergies expected while the combined entity will provide broader, deeper, and more innovate solutions to the combined customer base

 

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Trive Capital’s Acquisition of Cadient Talent, a Carve-Out of Kronos

  • Cadient provides a unified recruiting platform for salaried and hourly positions and offers solutions that handle the complexities of high-volume, hourly hiring
  • Created in 2007 through the combination of two businesses, Unicru and Deploy, Cadient holds key partner relationships with multiple workforce onboarding service providers, including background checking, WOTC screening, and drug testing services
  • Trive’s acquisition will support the next phase of Cadient’s growth through product investment and a dedicated focus on customer satisfaction

 

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Francisco Partners’ Majority Growth Investment in PayScale

  • Seattle-based PayScale provides SaaS-based compensation data, analytics, and software
  • PayScale has more than 8,000 customers from small business to blue-chip companies such as Dish Network, Getty Images, Skullcandy, Time Warner, T-Mobile, Macy’s, Sunsweet, and UnitedHealth Group
  • This investment will provide PayScale with a new financial partner to build upon its strong momentum and help continue to drive product innovation

HCM Technology Acquisition Activity

Most Active Strategic Acquirers of HCM Technology Assets by Volume1

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  • The key strategic acquirers have combined for 38 HCM technology related acquisitions since 2015, but IBM has not completed a HCM acquisition since 2016
  • Key strategics accounted for none of the HCM Technology deals YTD 2019
  • Workday and Kronos have established a consistent HCM M&A strategy, accounting for 16 transactions for the last 4 years

Global HCM Technology M&A Activity1

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  • There were 35 HCM Technology acquisitions in Q2 2019
  • In line with general M&A volume, HCM technology transactions experienced an up-tick in Q2 2019
  • HCM technology companies continue to attract attention from both strategic and financial acquirers

HCM Technology - Landscape

Representative Providers

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Public HCM Technology Companies

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HCM Technology – Trading Comparables

Public Comparables2

As of July 8, 2019 ($ in millions)

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HCM Technology – Transaction Activity

Select Recent M&A Transactions2

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Select Recent Private Placements

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Note: Financial information presented above represents reported capital raised only.

1. PitchBook

2. Factset

 

The information and views contained in this report were prepared by Harris Williams LLC (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any securities or financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The securities and financial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.

Harris Williams LLC is a registered broker-dealer and member of FINRA and SIPC. Harris Williams & Co. Ltd is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 07078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. Corporate Finance Advisors GmbH is registered in the commercial register of the local court of Frankfurt am Main, Germany, under HRB 107540. The registered address is Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany (email address: hwgermany@harriswilliams.com). Geschäftsführer/Directors: Jeffery H. Perkins, Paul Poggi. (VAT No. awaited). Harris Williams is a trade name under which Harris Williams LLC, Harris Williams & Co. Ltd and Harris Williams & Co. Corporate Finance Advisors GmbH conduct business.