Harris Williams Overview

Harris Williams (“HW”) Global Advisory Platform

screen_shot_2019-07-25_at_2.20.46_pm.pngKey Facts

  • Founded in 1991
  • 340+ professionals across eight offices globally
  • 21st record year in 2018
  • 10 industry groups

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

Vertical Focus Areas

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

Horizontal Focus Areas

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

Select Recent HW TMT Transactions

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Capital One’s Acquisition of Jewel Commerce

  • Jewel Commerce provides an online platform designed to make luxury fashion accessible to fashion lovers.
  • The Company has contracts with 100+ retailers and has issued $100,000+ in rebates to customers, helping them effortlessly save both time and money.
  • The acquisition of Jewel enhances Capital One’s toolset, which helps its customers simplify their lives and make smart financial decisions; with Jewel, customers are more confident that they are getting a great value.

 

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Salesforce’s Acquisition of Tableau

  • Tableau provides a self-service analytics platform, enabling individuals within an organization to gain rapid insights, and make impactful, data-driven decisions.
  • Tableau’s data analytics platform allows companies to make better decisions in order to more efficiently serve their customers and move their business forward.
  • The acquisition will allow Salesforce to help its customers make smarter decisions and provide cross-selling opportunities to customers that currently only have either platform.

 

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Shopify’s Acquisition of Handshake

  • Handshake provides a B2B ecommerce platform for businesses to sell wholesale goods to one another. 
  • The platform enables merchants to handle purchases and sales of goods directly, rather than handing it off to a third-party purchaser.
  • The acquisition expands the services that Shopify provides to its customers and further enhances its abilities to facilitate eCommerce.

 

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SugarCRM’s Acquisition of Salesfusion

  • SalesFusion provides an enterprise-grade marketing automation platform designed to streamline marketing campaigns.
  • SalesFusion deploys a curated toolset that includes highly intuitive campaign builders, advanced automation, and superior reporting that understands the online behaviors of prospects to nurture relationships.
  • The acquisition allows SugarCRM to harness Salesfusion’s advanced marketing automation capabilities to streamline campaign management and drive personalized engagement to optimize customer experience.

 

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GoDaddy’s Acquisition of Sellbrite

  • Sellbrite provides a web-based platform that helps online retailers sell across multiple eCommerce sales channels.
  • Sellbrite’s multichannel selling platform provides online marketplaces, shopping carts, and Web applications, enabling online retailers to increase product distribution and expand customer reach across multiple channels. 
  • The acquisition will enable Sellbrite to continue to execute on their product roadmap within the broader SMB market while leveraging the GoDaddy’s customer and product experience.

IDM Acquisition Activity

Most Active Strategic Acquirers of IDM Assets by Volume2

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  • Activity increased slightly in 2Q 2019 from Q1 2019 due in part to a lower interest rate environment and easing fears of market volatility.
  • Strategics are continuing to pay a premium for assets that align with their corporate strategies; notably Salesforce’s acquisition of Tableau.
  • The most active strategic acquirers of IDM assets made a combined ten acquisitions in 2Q 2019, the annualized 2019 total of 34 is just ahead of the 30 acquisitions made in 2018.
  • Amazon and Alibaba outpaced all other notable strategic buyers, carrying out four and two acquisitions, respectively, in 2Q 2019.

Most Active Private Equity Buyers of New IDM Platforms by Volume2

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  • The 10 most active private equity investors in IDM assets remained very active with 28 acquisitions completed in 2Q 2019 up from 17 acquisitions in 1Q 2019.
  • Warburg Pincus remains one of the more prolific acquirers of new IDM platforms, logging 10 additional IDM acquisitions in Q2 2019.

Note: Includes control investments only.

Online Marketing – M&A Market Summary

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  • Online Marketing M&A significantly increased in volume from the previous quarter.
  • Median multiples decreased 70% quarter-over-quarter falling below the historical mean.
  • M&A activity reached a high point for the past three years, signaling continued market strength.

Notable Online Marketing M&A Transactions2,3

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  • Accenture’s $207 M acquisition of Droga5, a digital marketing service, demonstrates the willingness of large enterprises to adjust their strategies as they continue to adapt to the changing digital advertising sphere.
  • Foursquare Labs acquired Placed, the industry’s number one location based advertisement measurement product, greatly expanding Foursquare’s expertise in the mobile location based segment.

Data Analytics – M&A Market Summary

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  • Data Analytics M&A volume increased from the prior quarter, with activity nearing levels seen in only 2 quarters during the past four years.
  • Volume of Data Analytics transactions has nearly tripled from 1Q 2018.
  • Median revenue multiples in the sector decreased to 2.2x, down from the prior seven quarters.

Notable Data Analytics M&A Transactions2,3

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  • PayFi acquired Payment Relationship Management, enhancing its ability to better support their bank customers by unifying messaging and payments to advance real-time payments and relationship banking.
  • Alteryx acquired ClearStory, enabling Alteryx to provide customers with advanced business analytics that support them in their digital transformation initiatives though an end-to-end, self-service data science and analytics platform.

eCommerce – M&A Market Summary

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  • eCommerce M&A volume in 2Q 2019 remained relatively flat at 33 deals.
  • The median of the reported multiples for 2Q 2019 increased slightly to 3.7x.

Notable eCommerce M&A Transactions2

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  • i3-SDCR’s acquisition of Pace Payment Systems will allow i3-SDCR to utilize Pace’s leadership team and their capabilities with utility districts to expand their offerings in the Public Sector vertical.
  • Square’s purchase of Eloquent Labs, a conversational artificial intelligence services business, allows Square to better respond to customer questions and feedback through AI.

Select Recent IDM Private Placements1,2

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

Public IDM Valuation Multiples by Sector2

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Debt Market Overview

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  • Median middle market LBO loan multiples in 1H 2019 increased slightly to 5.7x leverage.
  • Middle market LBO loan volume increased to $1.4 billion in 2Q 2019, rebounding after a downward trend the past three quarters.

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  • Technology companies were the largest recipients of middle market LBO loans in 1H 2019, representing 23.7% of new issuance.
  • Median LBO debt percentages decreased slightly to 49% of total purchase price in 1H 2019.

Select HW TMT Transactions

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Appendix: IDM Sector Public Company Universe2

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Appendix: IDM Sector Public Company Metrics2

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Note: Not Meaningful (NM) represents multiples above 50.0x; Not Available (NA) means the data is unavailable.

1. Pitchbook

2. Factset

3. HW Proprietary transaction information

4. PNC Capital Markets

5. S&P LCD Stats

 

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.