Tech-Enabled Services Monthly July 2014 in

Tech-Enabled Services Monthly
July 2014 in Review
Tech-Enabled Services Headline Transactions
Target
Acquirer
Acquisition Synopsis
Mgd. Svs.
• ViaWest is a provider of colocation and managed data center services, including web hosting, server colocation and
outsourced business applications and network services
• Shaw Communications, a publicly-traded telecom company based in Canada, acquired ViaWest for a TTV of $1.2
billion to expand its business and service offering in North America
Mgd. Svs.
• Tarshan offers professional consulting services for the Oracle Communications Suite of products and managed
services for the Communications BSS/OSS market
• ENABIL provides cloud-based managed services; as the ORCL Communications Suite faces convergence, the
acquisition of Tarshan enables the Company to offer larger-scale consulting and SI services
• Atco I-Tek provides information technology services specializing in enterprise asset management solutions,
ITS
managed services and customer care
• Wipro acquired Atco I-Tek for $195 million to expand its geographic footprint and strengthen its consulting and
process implementation capabilities; Atco is Wipro's 2nd-largest acquisition since 2007
• DayNine is a provider of HR management services; the Company offers Workday enterprise services for deploying
ITS
and optimizing Workday human capital management, payroll and financial management
• DayNine received $20 million to accelerate the development of proprietary tools and build market share in the
Workday ecosystem; Pamlico's investment represents DayNine's first institutional funding
Mgd. Svs.
• Foresite provides network solutions and managed services, including security monitoring and alerting, security
device management, incident response and helpdesk support
• Moneo acquired Foresite as part of an accelerated growth strategy that included the acquisition of IGX Global, a
network infrastructure provider, to help broaden its data center and security capabilities
TEV / Revenue
ITS
3.5x
3.0x
2.5x
2.1x
3.1x
2.4x
10.0x
1.5x
0.8x
0.4x
0.5x
0.0
ITS
18%
Offshore ITS
Hosting
Services
0.2x
IT Staffing Transaction
Processing
Info
Services
Services
18%
8.9x
VAR
12.7x
8.7x
7.5x
7.2x
6.0x
4.0x
2.0x
0.0
VAR
ITS
Offshore ITS
Hosting
Services
IT Staffing Transaction
Processing
Info
Services
VAR
Processing
LTM Gross & EBITDA Margins
Services
70%
16.9%
70%
60.3%
12.1%
12%
10%
8.2%
8%
7.3%
6%
8.6%
6.4%
3.5%
LTM Gross Margin
60%
14%
50%
30%
Offshore ITS
Hosting
Services
IT Staffing Transaction
Processing
Info
Services
VAR
35.2%
37.8%
34.0%
40%
29.4%
19.9%
20%
0%
ITS
50%
40%
10%
2%
60%
54.7%
20.0%
20%
4.9%
10.7%
30%
25.6%
22.1%
9.2%
2.9%
ITS
Offshore ITS
Hosting
Services
IT Staffing Transaction
Processing
Info
Services
VAR
Note: EBITDA Margins in red
10%
0%
LTM EBITDA Margin
1-Year Revenue Growth
Info. & Data
12.3x
8.0x
16%
0%
Transaction Processing
16.9%
1-Year Revenue Growth
4%
IT Staffing
11.3x
12.0x
2.0x
1.0x
TEV / EBITDA
Hosting Services
14.0x
TEV / EBITDA
TEV / Revenue
3.0x
Offshore ITS
TEV / EBITDA
TEV / EBITDA Multiples Over Time
15.0x
12.7x
13.0x
12.3x
11.0x
11.3x
9.0x
8.9x
8.7x
7.0x
7.5x
5.0x
7.2x
3.0x
Q2 2011
Q3 2011
Q4 2011
ITS
Offshore ITS
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Hosting Services
Q1 2013
IT Staffing
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Transaction Processing
Q2 2014
Jul 2014
Info. & Data
VAR
Select Tech-Enabled Services Precedent M3. TES Transactions Transactions
Select Tech-Enabled Services Transactions Announced in July 2014
8/27/2014
Annc.
Date
Enterprise
Value
Sector
Acquirer
Target
Target Description
07/14/14
Hosting
Services
BYTEGRID
Holdings LLC
NetRiver, Inc.
Provider of network-neutral data centers and
interconnection services
NA
07/10/14
Hosting
Services
Elite Comms
Group
Wi-Manx Limited Provides network, data center, cloud, voice
and hosting solutions, including servers,
colocation, managed, SAN (storage) and
disaster recovery services
NA
Elite Comms acquired Wi-Manx as part of a strategic
vision to strengthen its connectivity and hosting
portfolio; Elite Comms is the Isle of Man's only fully
Manx-owned communications business
07/09/14
Managed
Services
Carrier Access,
Inc.
Tektivity Inc.
NA
Acquisition of Tektivity enables Carrier Access to
expand its footprint throughout the Midwest and
widen the breadth of its managed services
07/02/14
Transaction
Processing
Ingenico S.A.
GlobalCollect BV Provides local e-payment services for
international customer non-present channels
(eg. Internet, mail and telephone orders, etc.)
$1,119.4
Acquisition of GlobalCollect would further expand
Ingenico's recurring services business and enable the
Company to better position itself competitively; the
acquisition requires antitrust approval
07/02/14
Hosting
Nokia
SAC Wireless, LLC Provider of implementation, modification and
NA
Nokia Networks acquired SAC Wireless to bolster its
Services
Networks, Inc.
Comments
BYTEGRID acquired NetRiver to expand its footprint
to the West Coast; the acquisition is part of
BYTEGRID's strategic growth plan and adds 170+
clients to its expanding portfolio
Offers technology assessment, network audit,
business process and system design, network
administration
and
telecommunications
services
capabilities
maintenance services of wireless network
presence in the network implementation sector; the
infrastructure
acquisition is expected to close in 3Q 2014
07/02/14
Managed
Services
Peach Telecom
Ltd.
Nexus Business
Group Ltd.
Offers IT hardware, services, systems and
support for small and medium-sized
businesses
NA
Peach Telecom, a UK-based telecom company,
acquired Nexus Business Group to strengthen the
Company's managed services capabilities as the
telecom and ITS industries converge
07/01/14
Hosting
Aceco TI S.A.
Innovative
Provides testing services for data centers,
NA
Innovative would enable Aceco to offer data center
Engenharia de
Data Center S/S
Ltda.
specializing in the planning, consulting and
commissioning of mission-critical facilities
Services
Notes:
services throughout Latin America specializing in
mission-critical environments; Innovative marks
Aceco's second acquisition this year
USD in millions
Source: Capital IQ, Company SEC Filings, industry research and TM Capital estimates
Select TM Capital Tech-Enabled Services Experience
TM Capital’s Tech-Enabled Services Contacts
Bradford A. Adams
Managing Director
617-259-2203
[email protected]
New York
641 Lexington Avenue
30th Floor
New York, NY 10022
Tel: 212.809.1360
Boston
200 Clarendon Street
25th Floor
Boston, MA 02116
Tel: 617.259.2200
Jarrad S. Zalkin
Andrew O. Redmond
Managing Director
Vice President
617-259-2207
617-259-2215
[email protected] [email protected]
Atlanta
15 Piedmont Center NE
Suite 1010
Atlanta, GA 30305
Tel: 404.995.6230
www.tmcapital.com

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