HW Software Introduction

Harris Williams (“HW”)

  • 25+ years and more than 1,000 closed transactions
  • 350+ professionals across eight offices 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 Group

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

Key Technology Themes

  • SaaS / Cloud
  • SaaS / Cloud
  • 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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Recent HW Technology Transaction: TractManager

HW’s Technology Group advised TractManager on its acquisition by symplr.

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TractManager is a leading provider of cloud-based, expert-supported solutions to optimize hospital operations across supply chain, labor management, and compliance. TractManager has a blue-chip customer base consisting of more than 2/3 of U.S. hospitals and payors, representing 83% of U.S. covered lives.

symplr, a portfolio company of Clearlake Capital, is a global leader in enterprise governance, risk management, and compliance SaaS solutions for hospitals. The symplr platform offers solutions that span provider data management, provider credentialing services, compliance, patient safety, workforce management, and vendor management. The acquisition of TractManager represents symplr’s tenth successful acquisition in the past six years, and its fifth under sponsorship from Clearlake.

Together with TractManager, symplr will enable healthcare organizations to manage provider and supply chain data, including credentials, authorizations, privileges, quality metrics, staffing, time and attendance, contracts, and spend across employees and third parties. Additionally, customers will benefit from the expanded scale, platform innovation, corporate resources, and service capabilities the combined company will deliver.

Relevant Sub-Sectors

  • Clinical Labor Management
  • Supply Chain
  • GRC

Recent HW Technology Transaction: ConnectYourCare

HW’s Technology Group advised ConnectYourCare on its acquisition by a Fortune 25 company.

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ConnectYourCare (“CYC”) is a comprehensive SaaS platform for consumer-directed healthcare (“CDH”) and benefit account administration, savings, payments, and claims substantiation. CYC’s intuitive software, payment capabilities, and integrated banking solutions enable flexible benefit coverage with lower costs and improved compliance as well as higher consumer participation, education, and satisfaction.

The platform provides employers, brokers, and partners with a comprehensive benefit administration software suite that seamlessly incorporates payments and banking capabilities, enabling employees to make more informed benefit decisions and efficiently manage their benefits. CYC’s purpose-built software tools cater to the unique needs of human resources professionals, brokers, and partners, and deliver a compelling value proposition that has resulted in a diversified customer base of 2,200+ employers across industries and market segments.  The company’s recently launched, digital-native custodial banking platform and Non-Bank-Trustee (“NBT”) designation have driven meaningful growth from a new and highly profitable revenue stream that complements its recurring software subscription and reoccurring payment interchange revenue.

Relevant Sub-Sectors

  • Consumer-Directed Healthcare
  • Integrated Software & Payments
  • Banking Technology
  • HCM & Benefits Administration

Recent HW Technology Transaction: SentryOne

HW’s Technology Group advised SentryOne on its acquisition by SolarWinds.

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SentryOne provides mission-critical Database Performance Management (“DPM”) and DataOps software. The company’s solutions enable customers to monitor, document, test, build, and migrate their mission-critical workloads in on-premises, hybrid, and multi-cloud environments.

The company has built a strong, well-respected product portfolio guided by a customer-centric model well-aligned to SolarWinds’ mission and commitment to the IT professional community. The SentryOne offering complements the on-premises and cloud-native DBM offerings SolarWinds has today to serve the full needs of the mid-market and better serve larger organizations.

SolarWinds is a leading provider of powerful and affordable IT management software. Its products give organizations worldwide the power to monitor and manage their IT services, infrastructures, and applications, whether on-premises, in the cloud, or via hybrid models. The company continuously engages with technology professionals to understand the challenges they face in maintaining high-performing and highly available IT infrastructures and applications.

Relevant Sub-Sectors

  • DevOps
  • Infrastructure
  • SaaS

Select Software M&A Transactions – Q4 2020

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TA Associates and TPG Capital’s Acquisition of Planview

  • Planview is a provider of cloud-based portfolio management and work management software designed to support the various styles of work across an enterprise.
  • The company’s solutions are used by over 3,500 customers and 1 million users worldwide to drive organizational focus on strategic outcomes and accelerate on-strategy delivery at an enterprise scale.
  • Following the acquisition, TA Associates and TPG will support Planview’s management team to continue pursuing organic and inorganic growth opportunities that will enhance the portfolio of solutions.
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Harvest Partners’ Investment in Granicus

  • Granicus is a provider of cloud-based software solutions that enable federal, state, and local government entities to automate workflows, increase transparency, and strengthen civic engagement.
  • The company’s digital government platform is used by more than 4,500 public sector organizations that serve more than 250 million citizens and helps increase civic engagement by more than 500%.
  • Harvest will support Granicus’ continued growth as government agencies accelerate digital transformation initiatives and seek modern software solutions to more effectively and efficiently serve constituents across channels.
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PTC’s Pending Acquisition of Arena Solutions

  • Arena Solutions is a provider of cloud product life cycle management and product development software for the electronics, high-tech, and medical device industries.
  • The company's product life cycle management platform unifies PLM, quality management, and requirement management functions into a single solution that is used by stakeholders across the design and manufacturing process.
  • With the acquisition, Arena Solutions will complement PTC's previous acquisition of OnShape and position PTC to provide customers with a complete, cloud-based CAD and PLM solution.
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Leonard Green & Partners’ Pending Acquisition of ECI Software Solutions

  • ECI Software Solutions is a provider of cloud-based business software solutions to small and medium-sized manufacturing, wholesale/retail distribution, building and construction, and field service organizations. 
  • The company’s portfolio of industry-specific Enterprise Resource Planning solutions includes tools for accounting, purchasing, warehousing, and inventory management.
  • Following the acquisition, LGP will provide capital to continue to grow ECI's portfolio of SMB-focused solutions through organic and inorganic initiatives.
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Stone Point Capital’s Strategic Investment in Lone Wolf Technologies

  • Lone Wolf Technologies is a provider of back office and transaction management software for brokers and agents in the residential real estate end-market.
  • The company's 1.4 million real estate professionals use Lone Wolf's digital tools and technology to streamline all stages of a real estate transaction process for both buyers and sellers.
  • Stone Point Capital’s strategic investment will enable the Lone Wolf team to continue executing on its strategic growth plan and continue building a connected, fully digital real estate experience for its clients.

Software Acquisition Activity – Strategic Acquirers

Most Active Strategic Acquirers of Software Assets by Volume1

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  • Activity among the 10 largest strategic software acquirers decreased slightly compared to 2019, with 49 acquisitions in 2020.
  • Microsoft, Alphabet, and Cisco were the most active strategic acquirers in 2020, each completing seven acquisitions.
  • Notable Q4 2020 strategic software transactions include VMware’s acquisition of Salt Stack, salesforce.com’s acquisition of Slack Technologies, and Cisco’s acquisition of Portshift.

Global Strategic Acquirer Software M&A Activity by Volume1

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  • Globally, strategic software M&A registered 765 acquisitions in Q4 2020, an increase from 560 in Q3 2020.
  • 2020 not only brought challenges as companies faced the COVID-19 pandemic, but also opportunities for strategics to focus on M&A around vertical-specific software solutions to expand and complement their current solutions.

Note: Includes control investments only.

Software Acquisition Activity – Private Equity

Most Active Private Equity Buyers of New Software Platforms by Volume1

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  • The 10 most active software investors completed 61 new platform investments in 2020. Activity among the most active private equity software buyers remained on pace with 2019 levels.
  • Thoma Bravo remained the most active software private equity firm in 2020, completing 12 platform acquisitions including Command Alkon, Exostar, Syntellis Performance Solutions, Majesco, and Foundation Software.
  • Other notable Q4 2020 private equity platform acquisitions include Carlyle’s acquisition of Tribute Technology, Francisco Partners’ acquisition of Forcepoint, and LGP’s acquisition of ECi.

Global Private Equity New Software Platforms M&A Activity by Volume1

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  • Globally, private equity buyers registered 103 new software platform investments in Q4 2020, an increase from Q3 2020.
  • Private equity investment across software continued its strong momentum in the back half of the year as investors began to look at new platform investments.

Note: Includes control new platform investments only. Excludes add-on acquisitions.

Application Software – M&A Market Summary

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  • Application Software M&A registered 600 transactions in Q4 2020, representing a 28% increase from the prior quarter.
  • Median reported Application Software M&A transaction multiples increased to 3.0x revenue in Q4 2020.

Notable Application Software M&A Transactions1,4,5

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  • In Q4 2020, vertical-specific Application Software companies continued to be sought after by both strategic and financial buyers.
  • Notable Q4 2020 vertical-specific software transactions include Marlin Equity Partners’ acquisition of StarCompliance (Compliance), Vista Equity Partner’s acquisition of Pipedrive (E-Commerce), and TA Associates' acquisition of Priority Software (Enterprise).

SaaS – M&A Market Summary

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  • SaaS M&A volume registered 63 transactions in Q4 2020, a slight decrease from last quarter.
  • Median reported SaaS transaction revenue multiples increased slightly to 4.9x in Q4 2020.

Notable SaaS M&A Transactions1,4,5

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  • Cloud continues to become a more desirable delivery model and sector activity remains robust, with strong interest from both private equity investors and strategic buyers.
  • Notable Q4 2020 SaaS transactions include LGP’s pending acquisition of ECI Software, Insight Partners’ acquisition of CommerceHub, and Stone Point’s investment in Lone Wolf Technologies.

Data and Analytics – M&A Market Summary

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  • Data and Analytics M&A registered 136 transactions in Q4 2020, a significant increase from the prior quarter.
  • Median reported Data and Analytics transaction multiples increased to 3.5x in Q4 2020.

Notable Data and Analytics M&A Transactions1,4,5

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  • Data and Analytics continues to represent a key focus area for strategic acquirers and financial buyers, as decision making continues to be driven by complex and real-time data.
  • Notable Q4 2020 Data and Analytics transactions include S&P Global’s pending acquisition of IHS Markit, Thoma Bravo’s pending take private of RealPage, and Vista Equity Partners’ acquisition of Gainsight.

Infrastructure Software – M&A Market Summary

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  • Infrastructure Software M&A registered 72 transactions in Q4 2020, a modest decrease from 75 in Q3 2020.
  • In Q4 2020, median reported Infrastructure Software transaction multiples increased to 5.0x revenue.

Notable Infrastructure Software M&A Transactions1,4,5

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  • M&A activity within Infrastructure Software remained strong in Q4 2020, as both strategics and private equity investors view M&A as an attractive strategy to accelerate growth and create holistic security platforms.
  • Noteworthy Infrastructure Software M&A transactions in Q4 2020 include Francisco Partners’ acquisition of Forcepoint, SolarWinds’ acquisition of SentryOne, and TA Associates’ acquisition of Netwrix.

Private Placement Activity by Software Sector

Private Placements by Software Sub-Sector and New Capital Raised1,4

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  • There were 1,364 private placement financings in Q4 2020, which represents an 11% increase compared to Q4 2019.
  • Total reported capital investment in the software sector increased in Q4 2020 and remains above historical averages.

Private Placement Capital Raised by Round1,4 (As Percentage of Total Reported Private Placement Capital)

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  • In Q4 2020, the majority of private capital invested occurred in the larger stage (Series B or later) rounds, making up 63% of total capital invested.
  • Notable private placements across stages included Zenoti’s $160 million Series D led by Advent, Forter’s $125 million Series E led by Bessemer Venture Partners, and Chainalysis’ $100 million Series C led by Addition.

Select Recent Software Private Placements1,4

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

Public Software Valuation Multiples by Sector1

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Key Metrics by Sector – Comparable Public Software Companies1

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Summary of Technology IPOs

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  • Technology IPO activity dipped slightly in Q4 to six IPOs after an active Q3. Overall, listing activity for 2020 remained in line with 2019 activity.
  • Notable Q4 2020 IPOs include McAfee, Doordash, and Airbnb.
  • The pipeline of technology IPOs remains strong with companies including Affirm, Coinbase, and UiPath as well as SAP’s spinout of Qualtrics planning on listing in 2021.

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Key Performance Metrics for Recent Software IPOs1

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Select HW Technology Transactions

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Appendix: Software Sector Public Company Universe1

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Appendix: Software Sector Public Company Metrics1

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1. S&P Capital IQ

2. PNC Capital Markets

3. S&P LCD stats

4. PitchBook

5. HW proprietary transaction information