It has been an incredibly busy start to the year for our Technology, Media and Telecommunications (TMT) sector team, completing 11 deals in the first quarter of 2021 and building on our run of eight deals in Q4 2020.
We’ve worked across sub-sectors, across borders, with Corporate and Strategic investors, buy-side and sell-side to deliver for our clients. Overall the Technology, Media and Telecoms deals market has been hugely active in this first quarter (Q1 2021), with deal volumes up 44 percent in the quarter, versus prior year. We’ve seen activity in areas we would expect to resonate well with strategic trade acquirers and private equity audiences, including IT Services (Sipcom, Olive, Codestone and Performanta) and SaaS Technology (Big Change and HAS Technology) but also secured investment in niches challenged by COVID such as hospitality software (Rescompany).
We have really had the opportunity to leverage our international network this quarter. The USA continues to be a region we are regularly seeing in the search for the right investors and acquirers, and almost all of our deals include a depth of USA contact and discussions including a quarter of those closed deals ultimately leading to a USA acquirer or investor. Looking at the broader market for the last year, overseas destination levels have remained relatively stable with around 25-30 percent of TMT companies being sold to USA acquirers each quarter, tracking just shy of 50 percent per quarter to any international acquirer or investor.
This quarter has continued to see strong appetite from private equity. In the wider market 35 percent of deals went directly to private equity in Q1, with a further 31 percent being acquired via portfolio assets which is quite a jump in the quarter (tracking around a TOTAL of 40 percent per quarter for the prior year).
So why the increased activity? We feel that there are a multitude of factors but the pandemic has shone a light on resilient business models and sectors and the TMT space has certainly benefitted generally from this, coupling this with record amounts of “dry powder” both in institutional investors’ funds and the balance sheets of strategic trade acquirers, we can see why activity has increased.
Further details of our deals and parties involved are below – reach out if you’d like to chat through any elements.
- Advised BigChange on its £75 million majority investment from Great Hill Partners, a private equity firm based in Boston, valuing the business at £100 million. BigChange is a leading mobile workforce management SaaS company for the service and transport sectors in the UK. Great Hill is a Boston-based private equity firm targeting investments in high-growth companies across the consumer, digital infrastructure, financial technology, healthcare and software sectors.
- Advised HAS Technology on the sale of the business to The Access Group. HAS Technology is a global provider of technology solutions for health and local authorities, operating in the UK, USA, Australia and New Zealand. The Access Group (backed by TA Associates and Hg Capital) is a leading provider of business management software to mid-sized UK organisations.
- Advised Matrix Telematics on its investment by Bridges Fund Management. Matrix is a software and data business seeking to create safer drivers and sustainable travel for the UK fleet industry. Bridges Fund Management is a specialist sustainable and impact investor.
- Advised Aston Microphones on the sale of the business to Music Tribe. Aston is a UK boutique microphone brand for the professional audio industry whose award-winning microphones are used by some of the recording and sound production industry’s biggest names. Music Tribe, headquartered in Manila, Philippines, is an international group of brands specialising in products and solutions for the professional audio industry.
- Advised Rescompany on the sale of the business to The Schulte Group. Recompany is a leading provider of hospitality software solutions (Reservations, CRM, PMS, POS) to the global cruise industry The Schulte Group is an international, family-owned group of companies specialising in ship owning, ship management, maritime services and asset management.
- Advised Qmee on its majority investment from capital D. Qmee is one of Europe’s fastest growing tech businesses, disrupting the research and consumer insight space, and uses a sophisticated tech platform powered by machine learning and AI to collect insights, data and opinions from the public on behalf of brands and polling organisations. Capital D is a private equity fund investing in disruptive mid-market businesses across Europe.
- Advised React News on the sale of the business to Green Street. React News is a London-based subscription provider of market-leading European commercial property news, deal data and insights. Green Street is the preeminent provider of actionable commercial real estate research, news, data, analytics, and advisory services in the U.S. and Europe.
IT Services & Cyber:
- Advised Sipcom on the sale of the Business to Content+Cloud. Sipcom is a provider of Microsoft and Cisco unified communications and collaboration services. Sipcom uses its proprietary platform to deliver secure, cloud-hosted solutions to a global customer base. Content+Cloud is a Microsoft-focused digital transformation and managed services provider, previously known as IT Lab, backed by ECI Partners.
- Advised Olive Communications, on the sale of the business to LDC backed Onecom. Olive is one of the UK’s leading enterprise mobility and cloud managed service providers, and one of Vodafone’s most successful strategic partners. Prior to the acquisition, Olive was Onecom’s closest competitor and the combined business has now created the largest B2B mobile, fixed-line and cloud specialist in the UK, with combined revenues exceeding £140 million.
- Advised Codestone Group on receiving strategic investment from FPE Capital. Codestone is a leading Business Applications and Cloud services platform, focused on SAP and Microsoft technologies, whose founders secured the support of FPE Capital to pursue acquisitions alongside strong organic growth.
- Advised Beech Tree Private Equity on its significant investment in Performanta. Performanta is a fast-growing global provider of managed cyber security services to enterprise customers. Beech Tree invests between £10 million and £40 million in any one business, looking for platform businesses in which they can invest further to accelerate organic growth and, often, also pursue acquisition strategies.
If you'd like to discuss any of the content in more detail, please don't hesitate to get in touch.