Human Capital Management Technology Market Update

Human Capital Management (HCM) Technology Industry Overview

•The second quarter of 2018 featured 26 M&A transactions in the HCM technology space—the most in a quarter in recent memory. Notable deals included Recruit’s purchase of Glassdoor, Workday’s pending acquisition of Adaptive Insights, PeopleFluent’s sale to Learning Technologies Group, the pending merger between HireRight and GIS, and the pending acquisition of Conduent’s HR consulting and actuarial business by HIG Capital.

•The tight labor market is driving strong demand for HCM technology solutions. In particular, employers are prioritizing talent acquisition and management tools that increase connectivity with contingent workers and help identify internal and known talent, as well as learning management systems. In terms of workforce management, employers are focused on productivity and collaboration enhancers, automated risk management and compliance tools, and vertical-specific platforms.

Harris Williams & Co. Market Analysis: Global Health And Wellness

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•One of the key ways employers are seeking to attract and retain the best workforces is by boosting their health and wellness. Indeed, health and wellness is a $220+ billion opportunity, providing growth potential across technology, healthcare and consumer industries. See the factors driving growth, three essential practices for success, and recent transactions in the space.

HCM Technology Acquisition Activity1,2

Key Strategic Acquirers Of HCM Technology Assets By Volume

# of transactions

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  • The key strategic acquirers have combined for 33 HCM technology related acquisitions since 2015, but three of them (IBM, Oracle and Ultimate) have not completed a HCM acquisition since 2016
  • Key acquirers announced or completed three transactions in Q2: Workday / Adaptive Insights, SAP / Coresystems, and Workday / Rallyteam

Global HCM Technology M&A Activity

# of transactions

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  • HCM M&A experienced another breakout quarter with 26 transactions, setting the record for quarterly activity in recent times
  • HCM technology companies remain highly attractive to both strategic and financial acquirers
  • Deal volume is robust supported by tuck in acquisitions and platform building

Select HCM Technology M&A Transactions – Q2 20182,3,4

screen_shot_2018-07-10_at_10.18.06_am.pngRecruit Has Acquired Glassdoor

  • Glassdoor is a leading job and recruiting company well known for providing greater workplace transparency.
  • The Company’s unique platform aims to allow applicants to directly access employee reviews of potential employers.
  • Recruit Holdings intends to operate Glassdoor as an independent entity and provide the resources required to continue growing the organization.

 

screen_shot_2018-07-10_at_10.18.14_am.pngWorkday Has Announced Its Pending Acquisition Of Adaptive Insights

  • Adaptive Insights provides a leading cloud-based platform for modernizing business planning.
  • The Company’s Business Planning Cloud platform enables organizations of all sizes to adapt to changing business conditions with confidence and agility.
  • The combination of Adaptive Insights Business Planning Cloud and Workday accelerates the goal to drive holistic business planning and digital transformation for customers.

 

screen_shot_2018-07-10_at_10.18.21_am.jpgLearning Technologies Group Has Acquired PeopleFluent

  • PeopleFluent is a leading independent provider of cloud-based integrated recruiting, talent management and compensation management solutions.
  • By deeply integrating video, strategic analytics, and collaborative social technologies into its suite of Talent Management applications, the Company redefines employee engagement to boost productivity and improve financial results.
  • Learning Technologies Group will extend its product line with the addition of PeopleFluent’s recruiting, compensation, performance, and succession offerings.

 

screen_shot_2018-07-10_at_10.18.30_am.pngHireRight And GIS Have Announced A Pending Merger

  • HireRight provides employment background checks, drug testing, employment and education verification, and electronic onboarding and compliance solutions through an innovative platform to help companies hire the right candidates.
  • As an NAPBS-accredited employment background screening company, GIS helps companies mitigate risk and hire smarter. The Company provides comprehensive national and international background checks, as well as industry-specific services.
  • The merger accelerates a united strategy building upon HireRight’s strong integration into over 25 applicant tracking systems and GIS’ investments in additional research and development to enhance product offerings and operational efficiency.

 

screen_shot_2018-07-10_at_10.18.38_am.pngHIG Capital Has Announced Its Pending Acquisition Of Conduent’s HR Consulting And Actuarial Business

  • Conduent is selling its consulting and actuarial business, formerly Buck Consultants, which focuses on advisory, technology, and administration solutions to help clients manage their talent management programs.
  • The Company is selling these assets as part of a plan to divest up to $500 million in revenue in 2018 associated with non-core assets in order to sharpen the focus of the Company going forward.
  • HIG Capital has acquired the assets in order to augment its existing portfolio of companies in the HR consulting and actuarial space.

Recent HCM Software Transactions1,2

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Select Recent HCM Private Placements1,2,3

Financing Spotlight Transaction

untitled_126.pngCheckr Raises $100m From T. Rowe Price, Y Combinator, And Accel

  • Checkr provides modern and compliant background checks for global enterprises and startups through automating the background check process.
  • Founded in 2014, Checkr’s latest round of funding was led by new investor T. Rowe Price with participation from existing investors Accel and Y Combinator.
  • Checkr plans to use the additional funding to accelerate enterprise expansion as the Company looks to help enterprises utilize technology to understand the demands of the changing workforce and build a better future for workers.

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HCM Technology Market Observations1,2,3,4

Talent Acquisition And Management

Select Market Participants

Observations

- 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

- 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

In The News

Pluralsight Pops as Trading Begins; IPO Raises $310.5 Million

Two Facebook and Google Geniuses are Combining Search and AI to Transform HR

Degreed Moves Further into the Workplace Learning Market

 

 

Workforce Management

 

Select Market Participants

Observations

- 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

- 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
 

In The News

Pluralsight Pops as Trading Begins; IPO Raises $310.5 Million

Two Facebook and Google Geniuses are Combining Search and AI to Transform HR

Degreed Moves Further into the Workplace Learning Market

 

 

 

 

HCM Technology Market Valuation

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(1) As of June 29th, 2018

Public Comparables Analysis1,2,5

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HCM Technology Taxonomy

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Strong Transaction Experience in HCM Technology

HW&Co. HCM Technology Transaction Experience

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HW&Co.’s TMT Group: M&A Advisor of Choice for Market Leading Technology Companies

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Harris Williams & Co. Overview

Harris Williams & Co. (HW&Co.) Global Advisory Platformscreen_shot_2018-07-10_at_11.19.24_am.png

KEY FACTS

  • Over 130 transactions closed in the past 24 months
  • Approximately 275 professionals across eight offices in the U.S. and Europe
  • 10 industry groups

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HW&Co. Technology, Media & Telecom (TMT) Group Focus Areas

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Select Recent HW&CO. TMT Transactions

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1)FactSet

2)PitchBook

3)Mergermarket

4)BusinessWire

5)HW&Co. proprietary transaction information