We’re living in heady times. It’s an active m&a market and values are strong for companies with unique and creative approaches to helping clearly defined customers solve real problems – especially if they also have a large market opportunity, have reached scale, and are growing. As noted in our recent Fintech Market Update, lately we’ve seen a few companies that are what we call “buzzword compliant solutions looking for a problem.” There is little interest from buyers or investors in those companies unless the leaders have a clear sense of the specific problem that they solve, how many people have that problem and care enough about your solution to spend money on it. Just because your product, is bigger, faster, layered, object-oriented, or “in the cloud” does not necessarily make it a better solution than one that is less expensive, easier to use, and good enough to solve the problem at hand. But when the right elements are present, the demand is strong and the values are high; and that’s what we like to see.
I’ve built a few businesses including a couple of tech businesses and the investment bank that I now lead. I know that it isn’t fast or easy. Short-term thinking rarely works. I even wrote a book about it called The Marine Corps Way to Win on Wall Street: 11 Key Principles from Battlefield to Boardroom (St. Martin’s Press). All we can do is to keep trying to advise clients on the best way to follow the 11 principles – to win big, and do so in a way that makes you proud. It works. This report highlights several transactions involving firms that seem to have done it right. They include:
- Salesforce (NYSE:CRM) agreed to acquire Demandware (NYSE:DWRE) for $2.9bn in cash;
- Bain Capital (Boston, MA) and Vista Equity Partners (San Francisco, CA) agreed to acquire Vertafore for $2.7bn;
- Vista Equity (San Francisco, CA) agreed to acquire Marketo (Nasdaq:MKTO) for $1.7bn in cash;
- General Atlantic (New York, NY) agreed to acquire a majority stake in Argus Media in a deal reported to value the company at approximately £1bn ($1.4bn);
- A consortium including Advent (New York, NY), Bain Capital (Boston, MA) and Clessidra (Milan, Italy) agreed to acquire Intesa Sanpaolo Card and Setefi Services for approximately €1.04bn ($1.18bn);
- Quintiles (NYSE:Q) agreed to acquire IMS Health in an all-stock transaction, valuing the company at approximately $9bn;
- Asset International (New York, NY) agreed to acquire Market Metrics and Matrix Solutions from FactSet Research Systems for approximately $175mm.
The report that follows HERE is our latest update on m&a values and trends in the dozen+ sectors of the information technology industry that we follow and sometimes lead.