HW Human Capital Management (“HCM”) Introduction

Harris Williams (“HW”)

  • 25+ years and more than 1,000 closed transactions
  • 350+ professionals across eight office globally
  • 170+ closed transactions in the last 24 months
  • 10 industry groups

Focused Advisory Services

  • Mergers and acquisitions (M&A)
  • Capital raises
  • Corporate divestitures

Consistent Recognition for Quality

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HW Technology, Media & Telecom (“TMT”) Group

  • 35+ dedicated TMT professionals
  • TMT offices include Boston, San Francisco, and London

Key TMT Themes

  • SaaS / Cloud
  • Data & Analytics
  • Digital Transformation
  • A.I. / Machine Learning

Horizontal Focus Sectors

  • Application Software
  • Cloud Managed Services and Hosting Solutions
  • Compliance Solutions
  • CRM and Marketing Automation
  • Human Capital Management
  • Infrastructure and Security Software
  • IT and Tech-Enabled Services
  • Marketing, Research, and Insights Software

Vertical Focus Sectors

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

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HCM Technology Focus Areas

Talent Acquisition and Management

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

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  • Employee recruitment, engagement, and retention remain top of mind – especially as the job market tightens
  • Data-driven/marketplace 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 are increasingly core to the 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
  • Automated and comprehensive risk management/compliance tools continue to experience strong adoption
  • Back-office HR capabilities for the on-demand labor market are an emerging market opportunity
  • Leading vertical-specific platforms remain highly attractive to investors and acquirers (e.g., retail, healthcare, and hospitality)

Notable Q2 2020 Human Capital Management Technology Transactions1,2

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BuildGroup's Pipe Investment in Benefitfocus

  • Benefitfocus provides a cloud-based platform to deliver data-driven insights and services enabling employers, insurance brokers, carriers, and suppliers to simplify benefits administration
  • BuildGroup invested $80M in a Series A convertible preferred stock with an 8% dividend and a conversion price of $15, which represented a 50% premium to the 10-day volume-weighted average share price of Benefitfocus
  • Benefitfocus will use the infusion of cash to bolster the company’s balance sheet and facilitate the accelerated transformation of the platform
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iCIMS’s Acquisition of Opening.io

  • Opening.io provides data science and artificial intelligence software solutions for existing large-scale recruitment processes
  • The company’s solution includes matching and ranking of candidates in relation to jobs, skills inference, CV summarizing, salary recommendations, parsing, and the analysis of resumes
  • iCIMS will leverage Opening.io’s technology to power its iCIMS Talent Logic product and bring new and existing customers artificial intelligence solutions to help them stay a step ahead in a rapidly evolving workforce environment
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Brighton Park Capital's Investment in Paradox

  • Paradox provides a conversational AI platform helping HR and talent teams automate administrative tasks and deliver real-time candidate and employee communications
  • The company serves more than 200 clients globally, including some of the biggest brands in the world — CVS Health, McDonald’s, Unilever, Intel, Aramark, and many more in the Fortune 500
  • Paradox has been recognized with several awards, including HCM Solution of the Year at the 17th annual American Business Awards
  • Paradox plans to leverage the funding to expedite its vision of a future where AI is a liberating force to help people do their best work
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TEAM Software's Acquisition of Kwantek

  • Kwantek provides a software platform for security and cleaning companies to diversify applicant pools, improve hiring efficiency, and enable a more selective hiring process for high-turnover situations
  • Kwantek’s technology suite includes accounting and financial solutions, operations management, mobile workforce solutions, and business analytics capabilities
  • The acquisition provides TEAM Software with an industry-leading applicant tracking software and expands TEAM’s pre-hire solutions
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Paylocity's Acquisition of VinGrid

  • VidGrid provides peer-to-peer video learning courses to help users communicate and collaborate across sales, customer success, training, and education
  • Prior to the acquisition, Paylocity partnered with VidGrid to enhance its learning management system and provide learning opportunities that the modern workforce expects
  • Paylocity’s acquisition of VidGrid highlights the growing importance of video-based solutions to enable remote work opportunities and optimize flexible learning environments

HCM Technology Acquisition Activity

Most Active Stragetic Acquirers of HCM Technology Assets by Volume1

  • The key strategic acquirers have combined for 49 HCM technology-related acquisitions since 2015
  • Workday and Kronos have established a consistent HCM M&A strategy, accounting for 22 transactions for the last five years
  • The combination of Ultimate Software and Kronos has created one of the largest privately held HCM companies

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Global HCM Technology M&A Activity1

  • There were 33 HCM technology acquisitions in Q2 2020
  • The HCM technology space maintained steady, robust transaction volume in Q2 2020
  • HCM technology companies continue to attract attention from both strategic and financial acquirers

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Impact of COVID-19 by HCM Focus Areas

COVID-19 is having a meaningful impact on the way employers engage with employees, requiring further adoption of new and existing HCM technology solutions. 

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HCM Technology - Landscape

To receive the latest Human Capital Management Technology market map, please contact HW at *TMT_HCM@harriswilliams.com

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Public HCM Technology Companies2

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HCM Technology – Trading Comparables1

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Recent Transaction Activity1,3

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Recent Capital Raises1,3

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1. Capital IQ

2. Mergermarket

3. PitchBook

 

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 8th Floor, 20 Farringdon Street, London EC4A 4AB, 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. DE321666994). 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.