Harris Williams’ Industrial Software Practice
Harris Williams (“HW”)
- Founded in 1991
- 370+ professionals across eight offices globally
- 170+ closed transactions in the last 24 months
- 100% of revenue from M&A advisory
- 10 industry groups
Technology, Media & Telecom (“TMT”) Group
- 35 professionals across Boston, San Francisco, and London
Horizontal Focus Areas
- 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
Industrial Technology Group
- 20 professionals across Richmond, Frankfurt, and Asia
Key Focus Areas
- Industrial Technology
- Process Automation
- Test & Measurement
- Industrial Process Solutions
- Thermal Management
- Communication & Connectivity
- Flow Control & Engineered Components/Systems
- Power & Energy Conditioning
- Energy Metering
- Data Centers
Select Industrial Software and Automation Transactions
Representative HW Transactions
Provider of fully integrated environmental, health, and safety (“EHS”) compliance, training, and workflow software solutions
Provider of construction accounting, project management, and payroll processing solutions
Provider of SaaS-based environmental, health, safety and quality (EHSQ) software for global enterprise clients
Provider of fully-integrated, SaaS-based operator qualification, drug & alcohol, safety & insurance, and training solutions
Provider of cloud-based manufacturing execution, ERP, and supply chain software for mid-market manufacturers
Provider of high-performance unmanned aerial systems (UAS) for the global military, public safety, and critical infrastructure markets
Provider of demand response and energy management solutions
Provider of intelligent traffic software (ITS) and IoT solutions for the transportation industry
Provider of highly complex, fully customizable automation solutions for end-of-line packaging applications
Provider of software solutions that manage engineering information throughout the asset lifecycle
Provider of demand response, energy efficiency, and customer engagement solutions
Provider of commercial maritime management and logistics software to the bulk markets
Provider of special machine solutions to address automation, testing, and manufacturing needs for the automotive end market
Provider of a wide variety of specialty electronic, electromechanical, and software products for the fire and life safety industry
Provider of cloud-based business management, ERP, and vertical specific applications for the manufacturing, distribution, and building and construction industries
Designer and manufacturer of distributed solar power generation, inverters, and software applications
Case Study: ComputerEase
HW’s TMT Group advised ComputerEase on its sale to Deltek, a subsidiary of Roper Technologies.
Transaction Overview
ComputerEase is a leading provider of mission-critical construction accounting, project management, and payroll processing solutions that enable contractors to manage and gain real-time visibility into their company’s operations and financial performance – whether in the office or remotely in the field.
ComputerEase’s fully integrated, cloud-based solution is purpose built to meet the unique needs of diverse contractor trades and sizes, with complex and varying union, labor, and equipment requirements. Today, more than 6,000 contractors rely on ComputerEase to streamline their operations and increase profits.
Deltek is a leading global provider of enterprise software and information solutions for project-based businesses. More than 23,000 organizations and millions of users in over 80 countries around the world rely on Deltek for superior levels of project intelligence, management, and collaboration. The company’s industry-focused expertise powers project success by helping firms achieve performance that maximizes productivity and revenue.
Relevant Sub-Sectors
- ERP / Project Management
- SaaS
- Architecture, Engineering, and Construction Software
Case Study: Cority
HW’s TMT Group advised Cority, a portfolio company of Norwest Venture Partners, on the sale of a majority stake to Thoma Bravo.
Transaction Overview
ComputerEase is a leading provider of mission-critical construction accounting, project management, and payroll processing solutions that enable contractors to manage and gain real-time visibility into their company’s operations and financial performance – whether in the office or remotely in the field.
ComputerEase’s fully integrated, cloud-based solution is purpose built to meet the unique needs of diverse contractor trades and sizes, with complex and varying union, labor, and equipment requirements. Today, more than 6,000 contractors rely on ComputerEase to streamline their operations and increase profits.
Deltek is a leading global provider of enterprise software and information solutions for project-based businesses. More than 23,000 organizations and millions of users in over 80 countries around the world rely on Deltek for superior levels of project intelligence, management, and collaboration. The company’s industry-focused expertise powers project success by helping firms achieve performance that maximizes productivity and revenue.
Relevant Sub-Sectors
- Environmental, Health, Safety and Quality (EHSQ)
- Governance, risk and compliance (GRC)
- Industrial Software
Case Study: IQMS Software
HW’s TMT Group advised IQMS, a portfolio company of Technology Crossover Ventures and Banneker Partners, on its sale to Dassault Systemes.
Transaction Overview
IQMS is a leading provider of fully-integrated software solutions that manage, optimize, and automate production operations and back-office workflows for manufacturers across diverse end-markets, globally.
Through its comprehensive manufacturing execution system (MES) and enterprise resource planning (ERP) software platform, IQMS’ solutions provide manufacturers with a comprehensive end-to-end suite that provides real-time visibility and actionable insights throughout the manufacturing lifecycle.
IQMS serves over 1,000 longstanding customers across diverse end-markets, including automotive, medical, packaging, consumer goods, electronics, and aerospace and defense in a growing $35 billion global market.
Dassault Systemes will help IQMS expand its customer base by leveraging the presence in the mid-market space established through Dassault’s SOLIDWORKS applications, which are delivered and supported by the company’s Professional Solutions global partner channel.
Relevant Sub-Sectors
- Manufacturing & Operations
- Manufacturing ERP Software
- Industrial IoT
The Industrial Sector’s Appetite for Software is Growing, Driving Demand for Integrated Technology and Data Platforms
Industry Trends1,2
- The emergence of Industrial IoT Platform-as-a-Service (PaaS) that connects machines, data, and people to drive unconventional growth through new revenue streams, hybrid business models, and enhanced product innovation
- The global Industrial IoT (IIoT) market is expected to reach $124B by 2021, growing at a CAGR of more than 7%, driven by improved operational efficiency, improved productivity, creation of new business opportunities, reduction in downtime, and optimization of asset utilization
- Due to the technical requirements in achieving Manufacturing 4.0, manufacturers today are partnering with IIoT enabled platforms and software providers as a catalyst to achieve digital transformation
- Product lifecycles are becoming increasingly complex as manufacturers seek real-time visibility and integration across their global supply chains and multisite production operations
- The proliferation of connected machines and devices is accelerating the adoption of cloud-based solutions capable of delivering real-time information and connecting plants across geographies without the costs and complexity of managing robust technology infrastructure
Key Stats
100% Global Population Expected to Have LPWAN Coverage by 2022
41B+ IIoT Devices Worldwide by 2025
Industry Convergence Driving Innovation1,2
Digital Innovation Has Become Mission Critical for Industrial Manufacturers
Productivity Gains from Going Digital3
- Industrial companies, traditionally the least digitally integrated amongst the industry verticals, are faced with the challenge of transforming to prevent extinction
Digital Champions in the U.S.
- The U.S. technology, telecommunications, and banking industries have the greatest percentage of digitally integrated companies
- Manufacturing has the lowest percentage due to its nondigital product portfolio
Investment in AI, Advanced Networking, and Data Visualization to Automate Large-Scale Processes3
Artificial Intelligence
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AI has the potential to create value for industrial manufacturers at every stage of production
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AI-powered analytics can reduce unplanned downtime, and improve efficiency, product quality, and safety performance
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Manufacturers can also leverage AI-fueled algorithms on customer and product data to closely match supply with demand
Advanced Networking
- Advanced networking is crucial to connecting assets and devices to deliver real-time flexibility, visibility, and efficiency
- 5G and ultra-broadband can ensure seamless vertical, horizontal, and cross-geographic integration across the value chain
- Benefits include insights into production and product consumption, real-time updates on market conditions, as well as supporting new “as-a-service” business models
Data Visualization
- Improvements in 3-D visualization, augmented reality, and virtual reality enable industrial manufacturers to more easily digest complex information
- Visualization via a digital twin (an interactive, working, and digital representation of the physical asset) helps companies simulate repairs, enabling safe practice and training ahead of site visits
Increasing M&A Momentum Across the Industrial Software Market
Select Notable Industrial Software M&A Activity
Notable Industry Consolidators
Note: Logos are representative of M&A participants and not comprehensive.
Recent Industrial Software Transactions4,5
Northern Private Capital’s Acquisition of MDA
- Provider of surveillance, intelligence, robotics, and satellite systems for clients in the aerospace and defense industries
- The transaction includes all of MDA’s Canadian businesses, encompassing ground stations, radar satellite products, robotics, defense, and satellite components, representing approximately 1,900 employees
- Post-transaction, the MDA team will operate as a stand-alone company within NPC’s portfolio
- MDA expects to continue to supply Maxar with certain components and subsystems, and the companies expect to sell each other’s complementary satellite data
Hexagon’s Acquisition of Volume Graphics
- Volume Graphics high-end analysis and visualization CT software enables manufacturers to produce three-dimensional external and internal representations of scanned objects
- Using CT technology, manufacturers can "see" inside the complicated structures of components to measure and inspect for dimensional deviations and flaws
- Hexagon and Volume Graphics will merge capabilities to ensure that customers yield the highest product quality
- The acquisition strengthens Hexagon’s CT software capabilities as more and more industries embrace additive manufacturing
Siemens’ Acquisition of MultiMechanics
- Provider of MultiMech, a material modeling and simulation software tool
- MultiMech enables companies to accelerate the product development lifecycle by virtually predicting material properties and behavior, including failure starting at the microstructural level
- Siemens plans to integrate MultiMechanics into its Digital Industries Software, which will allow customers to create a digital twin of materials by closely integrating materials engineering with part design, performance engineering, and manufacturing for a range of applications
PTC’s Acquisition of Onshape
- Provider of a SaaS product development platform that unites computer aided design (CAD) software with data management and collaboration tools
- Accessible from any connected location or device, Onshape’s software eliminates the need for costly hardware and administrative staff, and enables collaboration that dramatically reduces the time it takes to bring new products to market
- The acquisition of Onshape gives PTC a strategic advantage to serve the growing demand for “CAD in the Cloud” and provides the company with a pure SaaS product innovation platform
Rockwell Automation and Schlumberger’s Joint Venture of Sensia
- Provider of digitally-enabled, integrated automation solutions to the oil and gas industry
- The joint venture will leverage Schlumberger’s oil and gas domain expertise and Rockwell’s strengths in automation
- Sensia will make industrial-scale digitalization and seamless automation available to every oil and gas company so their assets can operate more productively and profitably
- The joint venture will operate as an independent entity, with Rockwell Automation owning a majority stake
Industrial Software Landscape - Incumbents
Incumbents in Industrial Software
To receive the latest Industrial Software market maps, please contact HW at *TMT_IndustrialSoftware@harriswilliams.com
Industrial Software Landscape - Emerging Players
Emerging Players in Industrial Software
To receive the latest Industrial Software market maps, please contact HW at *TMT_IndustrialSoftware@harriswilliams.com
Industrial Software Landscape - Vertical-Specific Players
Representative Vertically-Focused Industrial Software Providers
Industrial Software Market Valuations4
Valuation
($ in millions, as of December 31, 2019)
Note: NM refers to negative growth rates and margins, revenue multiples over 30.0x, and EBITDA multiples over 50.0x.
1.Gartner
2.IDC
3.BCG
4.Capiq
5.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 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. 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.