Embed Size (px)
Citation preview
Avecto receives $49m investment
Fast forward to the futureAnother great year for BIMAThe ongoing digital transformation of healthcare
ISSUE 66
Leading adviser on M&A and fundraisingto the global marketing, technologyand healthcare sectors
THE BULLETIN
ALSO IN THIS ISSUE
2
FOREWORD
IN THIS ISSUE...
A warm welcome to this new issue of the Bulletin
www.resultsig.com
13 14 15HEALTHTECH OUR QUARTERLY
REPORTSANOTHER GREAT YEAR FOR BIMA
It’s been an exciting and fast paced six months at Results International, reflecting a period of unprecedented change in marketing, technology and healthcare.
In this Bulletin, we share some of our
learnings and news of developments.
We have completed 12 deals since October
and these reflect some of the changes and trends in our sectors.
Our most recent closing was the sale of
dbg to Merkle, which was their second
acquisition in the UK after Periscopix (we
advised the vendors on both deals) and
reflects the high level of interest in data and analytics companies. It’s always exciting
when new buyers appear on the scene so
we were also pleased to be involved in the
sale of Agenda 21 to BeHeard, the newly
AIM listed digital marcoms group led by
former Engine chief Peter Scott. This was
BeHeard’s first acquisition, but I’m sure more will follow this year.
Private Equity was also a driver in a number
of our other deals. We were involved in
the second UK investment by recently
formed healthcare specialist Archimed, who
acquired Deallus Consulting. Elsewhere our
client Avecto received a $49 million growth
equity investment from US PE firm, JMI Equity. Further details of this deal are on
page 4. During the summer Chime Plc was
acquired by another US PE firm, Providence Equity, which has turbo charged Chime’s
acquisition capability and in November we
completed the sale of media buying agency
AdConnection to Chime’s subsidiary VCCP.
Some of the regular buyers have also been
active. We advised The App Business
and Mubaloo, both enterprise mobility
businesses on their sales to St Ives and
IPG respectively. This is the second deal we
have had the pleasure of advising Mubaloo
founder Mark Mason on.
In amongst the deals we very much enjoyed
hosting our conference ‘Next Gen: Future
Thinking’. Details of which are set out on
page 10.
On December 1st, I was pleased to be
re-elected to the Executive Committee of
the British Interactive Media Association
(‘BIMA’), a not for profit organisation that supports and promotes the British digital
industry. BIMA has exciting plans for
the coming year and I’m delighted to be
involved. Further details are set out on
page 13.
PE Backed
WPP
10
7
6
53
4
3
3
3
3
3
3
Flipkart Dentsu
Sprinklr
Gravity4
Comcast
Opera
Software
Yello Mobile
ProSiebenSat.1
Media
Ströer
Vista Equity
Partners
Jan FebApr May Jun Jul Aug
Oct
Mar
Geographical Split of Targets
Top AdTech and MarTech Sectors
Deal Type
Volume of DealsMonthly Deal Volume
12
Top AdTech and MarTech Buyers
30
Cross Border
130
Disclosed Deal Value
$
US
$14.5bn98
101112
100
Nov Dec
Sep
41129
35 34 32
41
28
38
31
4339
28
33
eCommerce
58
Social
56
Video 24
Marketing Automation
89
Advertising Platform
104
Mobile
80
22010
5
68
12
9
64
23
North America
UKEastern Europe
Western EuropeMiddle East
South America
Africa
APAC
3 6-7OUR LATEST DEALS
4-5AVECTO SECURES FUNDING
M&A: MARCOMS AND ADTECH/MARTECH
8-9 12INSIGHT FROM OUR GLOBAL TEAM
MARK COX JOINS RESULTS
10-11FAST FORWARD TO THE FUTURE
Keith HuntE [email protected]
Keith HuntManaging Partner
3
www.resultsig.com
has been acquired by
has made a $20 million growth equity investment into
has been acquired by has been acquired by
OUR LATEST DEALS
has divested nitrate product rights in selected markets to
has been acquired by has been acquired by IPG Mediabrands, part of
has been acquired byhas been acquired by
has received a $49 million growth equity investment from
has been acquired by
It’s been a busy time at Results having completed 12 deals globally across all our sectors since October 2015
has been acquired by
AVECTO SECURES FIRST EXTERNAL FUNDING
We are delighted to have advised Avecto on their $49 million minority growth equity financing from JMI, a specialist technology sector investor based in San Diego and Baltimore.
Founded in 2008, by Mark Austin and
Paul Kenyon, Avecto is a cyber security
software vendor which provides the
DefendPoint suite for pro-active endpoint
protection. DefendPoint combines privilege
management (removing administrator rights
from users), application control (dynamically
allowing approved applications to run)
and sandboxing (isolating threats). Alone
these solutions are highly effective and
together they provide an unmatched level of
protection from evolving malware threats.
www.resultsig.com
The business is headquartered in
Manchester, UK with offices in Boston, Frankfurt and Melbourne. Over the past
seven years, Avecto has demonstrated
significant growth, serving a roster of more than 600 enterprise customers and
protecting more than five million computers and servers across the globe. The business
has grown profitably every year since its inception and has recorded a CAGR of more
than 50% since 2012. What’s more, all of
this has been achieved, until now, with no
external funding.
Avecto has already established itself as a
disruptive force in the $3 billion market for
endpoint security software and through this
funding round has brought on board an
external investor to support the management
team in taking the business to the next level.
The transaction will enable Avecto to take its
innovative software to more organisations
across the globe through increased focus on
building awareness of the business and its
DefendPoint solution, and will also help the
team to expedite its ambitious R&D plans.
JMI is a specialist US-based investor focused on providing capital to fast-
growing, established software and services
businesses. The firm was founded in 1992, has raised more than $3 billion of committed
capital, and invested in industry leading
businesses such as Autotask, BigMachines,
Doubleclick, Eloqua, and ServiceNow.
This growth equity investment in Avecto,
which led to JMI taking a minority stake in the company, demonstrates continued
appetite from investors to provide capital to
rapidly growing software businesses in very
large global markets.
$49 million minority growth equity raise from JMI
Chris LewisE [email protected]
Why did you choose to raise your first external capital?
PK: We’ve grown the company to a strong
position over the last seven years, with an
impressive customer base and a market
leading product, all without taking any
outside funding. We felt that the time was
right to partner with an investor, which
would enable us to maximise the substantial
market opportunity that exists for our
technology.
What led you to choose JMI as your investment partner?
MA: We were looking for an investor with
a proven track record in supporting high
growth enterprise software companies,
ideally with specific experience in enterprise security. We also wanted an investor
who would offer hands-on support both
strategically and operationally, in order to
support our next stage of growth. Most
importantly, the chemistry needed to work
really well. JMI ticked all of those boxes and so we felt they were the perfect partner for
Avecto.
What, if anything, surprised you about the process?
PK: We were surprised at just how much
work goes into a fundraising process!
The Results team primed us beforehand,
and supported us brilliantly throughout, but
frankly we didn’t anticipate just how much
detailed preparation would be needed.
It was well worth it though, as we managed
to get a great deal with a tier-1 investor, and
closed the transaction in five weeks from agreeing the term sheet.
What advice would you give to other entrepreneurs looking to raise institutional equity?
MA: First of all, take the time to pick the
right adviser. We did that and we made the
right decision in choosing Results, but in
hindsight the role is even more important
than we imagined.
Make sure that the team you hire is
experienced, well networked, detail-
orientated, and most importantly they are as
passionate as you are about getting the best
possible outcome.
Q&A WITH AVECTO’S CO-CEOS, MARK AUSTIN AND PAUL KENYON
What were the highs and lows of the process?
PK: It is definitely a rollercoaster ride that’s for sure – very intense. Luckily in our case
there were a lot more highs than lows. Our
particular favourite moment is immediately
after the deal closed and having the
first working session with JMI. It was an exciting session, as we began to explore
our accelerated growth plans, which also
confirmed to us that we had chosen a great investor for the business.
How do you see the security landscape evolving over the next 3-5 years?
MA: We expect to see a shift of focus back
to endpoint security, as advanced attacks
are continuing to evade network based
detection approaches. There will also be
a growing realisation that next-generation
proactive endpoint defences will allow
security teams to be far less reliant on
detection and remediation, by significantly improving their ability to prevent advanced
attacks from occurring in the first place.
4
www.resultsig.com
Sherif HegazyE [email protected]
The key vulnerability for cyber attacks
ENDPOINTSHackers hit home
2015 has been a big year for hackers after
businesses and governments of varying
sizes were hit by a series of serious data
breaches. According to the Identity Theft
Resource there were 750 announced data
breaches in 2015 and, in total, 178 million
records were lost or stolen. Notable data
breaches included health insurance provider
Anthem, Ashley Madison and the US Office
of Personnel Management.
Such data breaches are costing
organisations between $400 to $500 billion a
year and the costs have been rising steadily
year after year. A recent IBM report on data
breaches reported a 6% rise in the cost
per stolen record in 2015 as it is no longer
credit card details being stolen but social
security numbers, blood types and passport
numbers.
Proactively protecting the Endpoint is critical
No matter the type of breach, one thing
remains clear: protecting the endpoint is
essential. Once the endpoint has been
compromised attackers can move laterally
across the corporate network, infecting other
endpoints and users.
The endpoint protection market has
historically relied on traditional antivirus
products, which are primarily reactive and
are built upon a ‘blacklisting approach’
that allow all traffic inside in the hope of
identifying any malware or viruses. In
recent years, however, the threat landscape
has evolved to highly sophisticated and
targeted attacks such as zero-day malware
and advanced persistent threats and
conventional security solutions have proven
powerless at stopping these since most go
undetected. To stay ahead of this emerging
breed of cyber attacks, organisations must
move from reactive to proactive endpoint
protection by implementing a comprehensive
solution that combines traditional antivirus
with advance threat prevention technologies
to detect all known and unknown threats.
A recent survey conducted by Promisec
outlined that 89% of VP and C-Level IT
leaders have a heightened fear of a breach,
but only 32% have advanced endpoint
security in place even though 73% agree
that endpoints are ‘most vulnerable’ to a
cyber attack.
To keep cyber threats from penetrating
critical systems, companies must look for
next-generation endpoint security solutions
that combat targeted attacks and advanced
persistent threats with intelligent security
and layered protection that goes beyond
traditional antivirus products.
A huge market opportunity
The demand and need for next generation
endpoint security solutions is here and
analyst market predictions for the endpoint
security space reflect that. According to
a recent survey conducted by Enterprise
Strategy Group, 85% of respondents said
their organisation was planning to spend
more on cyber security this year. Indeed,
the global endpoint security market is
estimated to grow from $11.6 billion in 2015
to $17.4 billion by 2020, at an estimated
Compound Annual Growth Rate of 8.4%.
Over the last year, the endpoint security
market has seen a flurry of new investments
into high-growth, specialist startups who
have managed to carve out a market
niche. Examples include Avecto’s
$49 million investment from growth equity
firm JMI Equity, Google’s investment in next
generation endpoint protection provider
Crowdstrike and long-time security leader
Sophos’ recent acquisition of SurfRight for
$32 million.
With no dominant software vendor in the
space and the increasing variety and
sophistication of cyber attacks, 2016 is
shaping up to be yet another crucial battle in
the cyber security space.
5
“ ...the threat landscape has evolved to highly sophisticated and targeted attacks such as zero-day malware and advanced persistent threats... ”
6
M&A: MARCOMS AND ADTECH/MARTECH IN 2015
WPP was once again the most prolific buyer
in 2015 with 38 transactions representing
around 4% of all deals in the sector.
Significant transactions included Essence
Digital in the UK and STW Communications
in Australia. Dentsu followed a close second,
with 36 deals, with acquisitions including
the content agency John Brown and brand
commerce agency eCommera.
Interestingly business service and
consultancy groups Accenture and Deloitte
were sixth and seventh in the list of top
ten buyers with six and five acquisitions
respectively and private equity firm HIG
Capital joined the list for the first time with
four acquisitions in the outdoor space (two
of which were done through their Brazilian
portfolio company Eletromidia). Omnicom
made the fewest number of acquisitions
(seven in 2015) amongst the major
networks.
As a whole, 2015 M&A activity was strong
with 979 recorded deals, marginally ahead
of 2014 which was also a strong year.
Serial acquirers, who made more than two
acquisitions in the year, accounted for 30%
of all transactions in line with 2014 levels.
PE activity also remained at a significant
level at 7% of deal volume, in line with 2014.
Full service digital agencies continue to be
the largest driver of M&A representing over
10% of total deals recorded in 2015 (10%
in 2014) as buyers continue to be attracted
to growth, evolving digital capabilities and
skillsets. Similar trends were noted in the
mobile sub-segment which was the third
most active.
A more material development has been
the rise in integrated agency deals which
accounted for 8% of deals in the sector in
2015. This is likely to be driven by client
demand, with agencies repositioning
themselves along multi-disciplinary lines.
The proportion of cross-border deals in
2015 stood at 30% in line with the previous
year and North America remained home
to the most M&A activity with 42% of all
transactions in both 2015 and 2014. Activity
in the UK fell from 16% in 2014 to 12% in
2015 as the volume shifted slightly towards
Western European targets.
Global M&A and valuations in the marcoms
space is expected to remain strong into
2016, primarily driven by increasing
competition amongst an ever widening pool
of strategic buyers (new emerging buyers
and IT/consulting services alongside the
usual suspects) and PE.
PE Backed
WPP
38
36
21
12
6
7
544
Omnicom
Dentsu
Havas
Accenture
Deloitte Touche TohmatsuH.I.G. Capital IPG
PublicisJan Feb Apr May Jun Jul Aug OctMar
Geographical Split of Targets Top Marcoms Sectors
Deal Type Volume of Deals Monthly Deal Volume12 Top Marcoms Buyers
71
Cross Border
290
Disclosed Deal Value$
US$19.0bn
219 246 264 250
Nov DecSep
97964
7580 82
7886
106
63
95 91
78 81
Website Design & Build 61
Mobile 57
Branding 53
Direct Marketing 47
Advertising 44
Events & Experiential 43
Creative 42
Integrated 76
Full Service Digital 101
Public Relations 75412
7
16 180
30
25190
119North America
UKEastern Europe
Western Europe
Middle East
South America
Africa APAC
www.resultsig.com
PE Backed
WPP
38
36
21
12
6
7
544
Omnicom
Dentsu
Havas
Accenture
Deloitte Touche TohmatsuH.I.G. Capital IPG
PublicisJan Feb Apr May Jun Jul Aug OctMar
Geographical Split of Targets Top Marcoms Sectors
Deal Type Volume of Deals Monthly Deal Volume12 Top Marcoms Buyers
71
Cross Border
290
Disclosed Deal Value$
US$19.0bn
219 246 264 250
Nov DecSep
97964
7580 82
7886
106
63
95 91
78 81
Website Design & Build 61
Mobile 57
Branding 53
Direct Marketing 47
Advertising 44
Events & Experiential 43
Creative 42
Integrated 76
Full Service Digital 101
Public Relations 75412
7
16 180
30
25190
119North America
UKEastern Europe
Western Europe
Middle East
South America
Africa APAC
PE Backed
WPP
38
36
21
12
6
7
544
Omnicom
Dentsu
Havas
Accenture
Deloitte Touche TohmatsuH.I.G. Capital IPG
PublicisJan Feb Apr May Jun Jul Aug OctMar
Geographical Split of Targets Top Marcoms Sectors
Deal Type Volume of Deals Monthly Deal Volume12 Top Marcoms Buyers
71
Cross Border
290
Disclosed Deal Value$
US$19.0bn
219 246 264 250
Nov DecSep
97964
7580 82
7886
106
63
95 91
78 81
Website Design & Build 61
Mobile 57
Branding 53
Direct Marketing 47
Advertising 44
Events & Experiential 43
Creative 42
Integrated 76
Full Service Digital 101
Public Relations 75412
7
16 180
30
25190
119North America
UKEastern Europe
Western Europe
Middle East
South America
Africa APAC
PE Backed
WPP
38
36
21
12
6
7
544
Omnicom
Dentsu
Havas
Accenture
Deloitte Touche TohmatsuH.I.G. Capital IPG
PublicisJan Feb Apr May Jun Jul Aug OctMar
Geographical Split of Targets Top Marcoms Sectors
Deal Type Volume of Deals Monthly Deal Volume12 Top Marcoms Buyers
71
Cross Border
290
Disclosed Deal Value$
US$19.0bn
219 246 264 250
Nov DecSep
97964
7580 82
7886
106
63
95 91
78 81
Website Design & Build 61
Mobile 57
Branding 53
Direct Marketing 47
Advertising 44
Events & Experiential 43
Creative 42
Integrated 76
Full Service Digital 101
Public Relations 75412
7
16 180
30
25190
119North America
UKEastern Europe
Western Europe
Middle East
South America
Africa APAC
PE Backed
WPP
38
36
21
12
6
7
544
Omnicom
Dentsu
Havas
Accenture
Deloitte Touche TohmatsuH.I.G. Capital IPG
PublicisJan Feb Apr May Jun Jul Aug OctMar
Geographical Split of Targets Top Marcoms Sectors
Deal Type Volume of Deals Monthly Deal Volume12 Top Marcoms Buyers
71
Cross Border
290
Disclosed Deal Value$
US$19.0bn
219 246 264 250
Nov DecSep
97964
7580 82
7886
106
63
95 91
78 81
Website Design & Build 61
Mobile 57
Branding 53
Direct Marketing 47
Advertising 44
Events & Experiential 43
Creative 42
Integrated 76
Full Service Digital 101
Public Relations 75412
7
16 180
30
25190
119North America
UKEastern Europe
Western Europe
Middle East
South America
Africa APAC
PE Backed
WPP
38
36
21
12
6
7
544
Omnicom
Dentsu
Havas
Accenture
Deloitte Touche TohmatsuH.I.G. Capital IPG
PublicisJan Feb Apr May Jun Jul Aug OctMar
Geographical Split of Targets Top Marcoms Sectors
Deal Type Volume of Deals Monthly Deal Volume12 Top Marcoms Buyers
71
Cross Border
290
Disclosed Deal Value$
US$19.0bn
219 246 264 250
Nov DecSep
97964
7580 82
7886
106
63
95 91
78 81
Website Design & Build 61
Mobile 57
Branding 53
Direct Marketing 47
Advertising 44
Events & Experiential 43
Creative 42
Integrated 76
Full Service Digital 101
Public Relations 75412
7
16 180
30
25190
119North America
UKEastern Europe
Western Europe
Middle East
South America
Africa APAC
Geographical Split of Targets
Deal Type
Monthly Deal Volume12
Top Marcoms Buyers
Top AdTech/MarTech Buyers
Top Marcoms Sectors
Top AdTech/MarTech Sectors
Geographical Split of Targets
Deal Type
Monthly Deal Volume12
Top Marcoms Buyers
Top AdTech/MarTech Buyers
Top Marcoms Sectors
Top AdTech/MarTech Sectors
Geographical Split of Targets
Deal Type
Monthly Deal Volume12
Top Marcoms Buyers
Top AdTech/MarTech Buyers
Top Marcoms Sectors
Top AdTech/MarTech Sectors
Geographical Split of Targets
Deal Type
Monthly Deal Volume12
Top Marcoms Buyers
Top AdTech/MarTech Buyers
Top Marcoms Sectors
Top AdTech/MarTech Sectors
Geographical Split of Targets
Deal Type
Monthly Deal Volume12
Top Marcoms Buyers
Top AdTech/MarTech Buyers
Top Marcoms Sectors
Top AdTech/MarTech Sectors
Marcoms: In 2015 full service digital agencies continued to lead the way in M&A, with integrated and mobile agency deals on the rise
7
There were 411 deals in 2015 which was slightly down on the 447 in 2014. WPP, as within the marcoms sector, was the most acquisitive company, announcing 10 deals. However the buyer universe is becoming increasingly diverse with leading privately held AdTech vendors (Appnexus, Gravity4), large enterprise software players (Oracle, Salesforce), well funded next generation MarTech unicorns (Sprinklr, Hootsuite) and traditional telcos looking to diversify their revenue streams (Verizon) emerging as serious participants.
Deal highlights in the year include Verizon’s acquisition of AOL, arguably the largest everdeal to be done in the sector at $4.1 billion,
Endurance’s acquisition of Constant Contact and News Corp’s acquisition of Unruly. Notably all three companies were acquired by relatively new entrants to the space.
This highlights that, despite the turbulent
time many publicly-listed AdTech companies
experienced in 2015, the sector remains
strategically important for a wide range of
players in the TMT ecosystem. This trend
has continued into 2016, exemplified by Telenor’s $360 million acquisition of Tapad
and Opera Software’s $1.2 billion proposed
acquisition by a consortium of Chinese
investors and internet firms (including security company, Qihoo 360).
Interestingly the diversified internet players have notably decreased their deal
activity; Google, Twitter and Yahoo! all
completed fewer than three deals each in
2015 compared to a combined 17 in 2014.
Integration of previous AdTech platform
acquisitions has facilitated significant monetisation, so perhaps the need for M&A
is no longer as great; Facebook’s revenue
is now growing at 50%+ quarter on quarter
mainly via mobile and video led in part by
previous AdTech acquisition LiveRail.
The new breed of social media is now
looking to follow suit, with Snapchat publicly
stating AdTech is a key priority. The biggest
change in 2015 is the rise of marketing
automation deals which nearly doubled from 2014. The rise of MarTech is in contrast to the relative decline in AdTech; advertising platform deals were down 25% year on year.
The public markets now make a clear distinction between MarTech (with it typically subscription-based software revenue model) and AdTech (with its primarily transaction-based model), with a preference for the greater revenue visibility of MarTech. This shift has also been evident in M&A, many of the very high multiple deals in 2015 were in the MarTech sector. However the importance of AdTech cannot be overstated – media spend represents over half of most marketing budgets – and we continue to see high levels of appetite for differentiated AdTech companies.
As with previous years, North America accounted for the most deal activity with over 50% in 2015. Deal activity in the UK
(23 deals and 6% of total in 2015) was down on last year (36 deals and 8% of total in 2014) with a shift in volume to APAC (a 58% increase in 2015 to 68 deals).
With an increasingly diverse buyer set and improving valuation metrics, strong M&A activity is anticipated to continue into the next 12 months. This coupled with a buoyant private company market outlook and exciting innovative new product offerings should result in an exciting year for AdTech and MarTech M&A in 2016.
www.resultsig.com
Dan LeeE [email protected]
James KesnerE [email protected]
PE Backed
WPP
10
7
6
5
3
4
3
3
33
3
3
Flipkart
Dentsu
Sprinklr
Gravity4
Comcast
Opera Software
Yello Mobile
ProSiebenSat.1 Media
Ströer
Vista Equity Partners
Jan Feb Apr May Jun Jul Aug OctMar
Geographical Split of Targets Top AdTech and MarTech Sectors
Deal Type Volume of Deals Monthly Deal Volume12 Top AdTech and MarTech Buyers
30
Cross Border
130
Disclosed Deal Value$
US$14.5bn
98 101 112 100
Nov DecSep
41129
35 3432
41
28
38
31
4339
28
33
eCommerce 58
Social 56
Video 24
Marketing Automation 89
Advertising Platform 104
Mobile 80
220
10
5 68
12
964
23North America
UKEastern Europe
Western Europe
Middle East
South America
Africa APAC
PE Backed
WPP
10
7
6
5
3
4
3
3
33
3
3
Flipkart
Dentsu
Sprinklr
Gravity4
Comcast
Opera Software
Yello Mobile
ProSiebenSat.1 Media
Ströer
Vista Equity Partners
Jan Feb Apr May Jun Jul Aug OctMar
Geographical Split of Targets Top AdTech and MarTech Sectors
Deal Type Volume of Deals Monthly Deal Volume12 Top AdTech and MarTech Buyers
30
Cross Border
130
Disclosed Deal Value$
US$14.5bn
98 101 112 100
Nov DecSep
41129
35 3432
41
28
38
31
4339
28
33
eCommerce 58
Social 56
Video 24
Marketing Automation 89
Advertising Platform 104
Mobile 80
220
10
5 68
12
964
23North America
UKEastern Europe
Western Europe
Middle East
South America
Africa APAC
PE Backed
WPP
10
7
6
5
3
4
3
3
33
3
3
Flipkart
Dentsu
Sprinklr
Gravity4
Comcast
Opera Software
Yello Mobile
ProSiebenSat.1 Media
Ströer
Vista Equity Partners
Jan Feb Apr May Jun Jul Aug OctMar
Geographical Split of Targets Top AdTech and MarTech Sectors
Deal Type Volume of Deals Monthly Deal Volume12 Top AdTech and MarTech Buyers
30
Cross Border
130
Disclosed Deal Value$
US$14.5bn
98 101 112 100
Nov DecSep
41129
35 3432
41
28
38
31
4339
28
33
eCommerce 58
Social 56
Video 24
Marketing Automation 89
Advertising Platform 104
Mobile 80
220
10
5 68
12
964
23North America
UKEastern Europe
Western Europe
Middle East
South America
Africa APAC
PE Backed
WPP
10
7
6
5
3
4
3
3
33
3
3
Flipkart
Dentsu
Sprinklr
Gravity4
Comcast
Opera Software
Yello Mobile
ProSiebenSat.1 Media
Ströer
Vista Equity Partners
Jan Feb Apr May Jun Jul Aug OctMar
Geographical Split of Targets Top AdTech and MarTech Sectors
Deal Type Volume of Deals Monthly Deal Volume12 Top AdTech and MarTech Buyers
30
Cross Border
130
Disclosed Deal Value$
US$14.5bn
98 101 112 100
Nov DecSep
41129
35 3432
41
28
38
31
4339
28
33
eCommerce 58
Social 56
Video 24
Marketing Automation 89
Advertising Platform 104
Mobile 80
220
10
5 68
12
964
23North America
UKEastern Europe
Western Europe
Middle East
South America
Africa APAC
PE Backed
WPP
10
7
6
5
3
4
3
3
33
3
3
Flipkart
Dentsu
Sprinklr
Gravity4
Comcast
Opera Software
Yello Mobile
ProSiebenSat.1 Media
Ströer
Vista Equity Partners
Jan Feb Apr May Jun Jul Aug OctMar
Geographical Split of Targets Top AdTech and MarTech Sectors
Deal Type Volume of Deals Monthly Deal Volume12 Top AdTech and MarTech Buyers
30
Cross Border
130
Disclosed Deal Value$
US$14.5bn
98 101 112 100
Nov DecSep
41129
35 3432
41
28
38
31
4339
28
33
eCommerce 58
Social 56
Video 24
Marketing Automation 89
Advertising Platform 104
Mobile 80
220
10
5 68
12
964
23North America
UKEastern Europe
Western Europe
Middle East
South America
Africa APAC
PE Backed
WPP
10
7
6
5
3
4
3
3
33
3
3
Flipkart
Dentsu
Sprinklr
Gravity4
Comcast
Opera Software
Yello Mobile
ProSiebenSat.1 Media
Ströer
Vista Equity Partners
Jan Feb Apr May Jun Jul Aug OctMar
Geographical Split of Targets Top AdTech and MarTech Sectors
Deal Type Volume of Deals Monthly Deal Volume12 Top AdTech and MarTech Buyers
30
Cross Border
130
Disclosed Deal Value$
US$14.5bn
98 101 112 100
Nov DecSep
41129
35 3432
41
28
38
31
4339
28
33
eCommerce 58
Social 56
Video 24
Marketing Automation 89
Advertising Platform 104
Mobile 80
220
10
5 68
12
964
23North America
UKEastern Europe
Western Europe
Middle East
South America
Africa APAC
Geographical Split of Targets
Deal Type
Monthly Deal Volume12
Top Marcoms Buyers
Top AdTech/MarTech Buyers
Top Marcoms Sectors
Top AdTech/MarTech Sectors
Geographical Split of Targets
Deal Type
Monthly Deal Volume12
Top Marcoms Buyers
Top AdTech/MarTech Buyers
Top Marcoms Sectors
Top AdTech/MarTech Sectors
Geographical Split of Targets
Deal Type
Monthly Deal Volume12
Top Marcoms Buyers
Top AdTech/MarTech Buyers
Top Marcoms Sectors
Top AdTech/MarTech Sectors
Geographical Split of Targets
Deal Type
Monthly Deal Volume12
Top Marcoms Buyers
Top AdTech/MarTech Buyers
Top Marcoms Sectors
Top AdTech/MarTech Sectors
Geographical Split of Targets
Deal Type
Monthly Deal Volume12
Top Marcoms Buyers
Top AdTech/MarTech Buyers
Top Marcoms Sectors
Top AdTech/MarTech Sectors
AdTech and MarTech: After a record breaking 2014, M&A levels decreased slightly in 2015 but remained at high historic levels, shrugging off the tough public market sentiment
REGIONAL INSIGHT FROM OUR GLOBAL TEAM2015 was a year of extremes and record setting for the Tech M&A and IPO markets in the US, we expect 2016 to be just as exciting
TOP 10 TECH DEALS BY SIZE IN 2015
www.resultsig.com
On one hand, M&A activity for US targets
totaled $2.3 trillion in 2015, an increase of
64% compared to 2014 and the strongest
period for US M&A on record. On the other
hand, the US IPO market completely stalled
with unicorns raising late stage private rounds
at 10-15x forward revenue multiples, a 200%
premium over public market valuations,
instead of choosing to go public.
At December 2015, the combined known
valuation of the unicorns (numbering 150)
was approximately $500 billion, or a $3.3
billion average. A $200 billion mispricing can
be inferred from the recent Snapchat write
down by Fidelity, the mutual fund company,
and the Square IPO re-pricing. As several
Unicorns are expected to raise funding at
down round valuations in 2016, Series B and
C investors and founders will get squeezed
between seed investors with low in-prices
and upcoming investors who will fund only on
condition of obtaining significant anti-dilution
protection. As a result, Unicorns will raise
less than planned. Some will shed 25% of
their workforce to get to break even – this has
already begun in AdTech and may extend to
other tech sectors in Q1 2016. The downward
trend will cascade to mid-tier companies
seeking $15-50 million at $100-500 million
valuations.
While early stage and pre-IPO startups
will experience valuation re-sets in 2016,
60 publicly traded technology companies
hold $380 billion in cash on their balance
sheets, with Microsoft, Google, Cisco and
Oracle hoarding 75% of that cash. Other
companies have cash reserves of $300+
million, including Workday, LinkedIn, Splunk,
NetSuite, ServiceNow, and Tableau, each
with market caps of greater than $5 billion.
These companies are all mentioned as
potential active buyers for the expected wave
of acquisitions in tech M&A.
In 2014-2015, many tech deals did not close
because of the substantial gap in valuation
between sellers’ expectations (5-10x) and
buyers’ offers (2-5x). In 2016, that gap
will narrow as VC funding tightens and
unprofitable businesses see M&A as the
most viable outcome. In the US, international
market entrants will drive demand for $25-100
million revenue tech businesses, especially in
the second half of 2016. These international
strategic players will compete with US private
equity firms seeking transactions in the
$100 million range as they take advantage
of the valuation re-set. Therefore, expect
less Unicorns being acquired as they hunker
down, hoard cash and seek to weather the
storm. Conversely, expect an increase in the
velocity of mid-market transactions in the
tech sector.
Recently, Results International in New York
represented Nickelfish, a US-based high-end
digital strategy firm, on its sale to Endava, a
privately owned IT services company based
in London. Through this transaction and
discussion with global investors, we noticed
some aggressive deal structures in the mid-
market, with a majority of consideration paid
at close. As for the IT Services market, we
noted an improved average of 9 – 11x trailing
EBITDA multiples in the second half of 2015.
Similarly, we advised Rootaxcess, a Chicago-
based Infrastructure as a Service (IaaS)
provider on its sale to Fusion Telecom, the
publicly traded diversified telco operator. In
that instance as well, the buyer structured the
consideration in a more aggressive manner
than its competitors vying to buy Rootaxcess,
as a means to entice the sellers.
Announced Acquirer TargetValuation (USD)
$63.0bn
$56.7bn
$37.0bn
$19.0bn
$16.7bn
$16.5bn
$4.4bn
$4.0bn
$4.0bn
$2.4bn
Oct 12, 2015
May 26, 2015
May 28, 2015
Oct 21, 2015
Jun 1, 2015
Apr 15, 2015
May 12, 2015
Apr 27, 2015
Jun 15, 2015
Mar 10, 2015
Dell
Charter Communications
Avago Technologies
Western Digital Corporation
Intel Corporation
Nokia Corporate
Verizon Communications
Capgemini Group
Cox Automotive
Bain Capital
EMC
Time Warner Cable
Broadcom Corporation
SanDisk Corporation
Altera Corporation
Alcatel-Lucent
AOL
IGATE Global Solutions
DealerTrack Holdings
Blue Coat Systems
Pierre-Georges RoyE [email protected]
8
Innovation and economic growth are
increasing the role of Asia in the marcoms
transformation, and demand greater
participation by western firms if they are to
stay ahead in a new era of globalisation.
On 11/11, Alibaba smashed last years
Singles’ Day Record, with year-on-year
top-line growth of 54% with sales reaching
$14.3 billion. While the numbers are
mind boggling it is interesting to see how
the world’s largest shopping event is
maturing with offline merchants pursuing
omni-channel initiatives this year. Indeed,
Alibaba’s 11/11 in past years has focused on
online sales, but in 2015 they recruited tens
of thousands of Chinese brick-and-mortar
stores to participate in the annual 24-hour
event. Globalisation was the main feature of
2015’s Singles’ Day with over 5,000 foreign
brands merchandised. The day afterwards,
Alibaba said it would hold a similar festival
to coincide with the Spring Festival in
February; “[to] better serve rural consumers
and bring more agricultural products to the
dining tables of urban consumers.”
What makes a brand remains unaltered by
the proliferation/fragmentation of channels,
but now brands must leverage all touch
points with relevant formats and content.
Just as illustrated with 11/11 there is a rise
of retail online to offline (O2O) and holistic
capabilities driving a greater need to deploy
(i) consistent data and analytics,(ii) geo-
location services, (iii) programmatic, (iv)
tagging, (v) DMP’s and (vi) DSP’s etc. that
reflect the customer’s journey. Solving just
one element is not enough.
The ‘Always-On Marketing’ paradigm across
Asia is creating new ways of thinking and
communicating that will not only spurn
entrepreneurship and M&A activity in
the region, but also stimulate innovation
ecosystems and new business models that
may well become global norms.
The Economist’s August 2015 comprehensive
review of how technology is empowering
consumer engagement showed how the
marcoms landscape is being transformed
and likely to evolve in the future. Indeed,
they describe a new maturity in the region,
and moot that Asia is beginning to “shape
the future of marketing.”
The majority of M&A activity in the region is
domestic but there are signs of increasing
cross-border activity (BlueFocus, Cheil,
Hakuhodo, and the Dentsu Aegis Network
(DAN)). We anticipate increased activity in
SEA, a recent example being the acquisition
of the iProperty Group, a leading online
advertising platform focused on real estate,
by News Corp’s Australian retail firm, REA
group, at a valuation of over $340 million.
Adfactors, India’s largest PR firm by revenue
made its first acquisition enhancing their
domestic leadership when they took a
majority in Yorke Communications; they
have just been recognised as the ‘Global
Financial Consultancy of the Year for
2015’ at The Holmes Report Global Public
Relations Summit.
DAN and WPP are the leading dealmakers
but, of most note, are the large, new,
international entrants particularly from
China. For example, Dalian Wanda ($1.2
billion on Infront Sports and Media; $650
million on World Triathlon Corporation; 20%
of Atletico Madrid) and the Keda Group
have invested heavily seeing marcoms
capabilities as a strategic need for their
integrated and diversified business offerings.
Cheetah Mobile, a Chinese mobile software
firm acquired French firm MobPartner ($58
million) and have rebranded their software
as Cheetah Ad Platform as part of their
strategy to expand internationally. Sea Star,
a Shenzhen-based electronics firm paid just
over $100 million to acquire three domestic
advertising agencies.
YDM (Yello Digital Marketing Group) also
have an ambitious growth trajectory fueled
by M&A. This South Korean firm now has
22 family companies in six markets with the
strategic intent of being number one in Asia.
BlueFocus continues to pioneer,
investing over $350 million for two mobile
advertising networks reflective of the
digital capabilities required by leading PR
firms. Their ambitions to become a global
communications group have been whetted
by their $210 million acquisition of Vision7
that gave them a foothold in North America,
setting up their international HQ in San
Francisco. At home they’re redefining the
revenue model of a PR firm against the
backdrop of burgeoning eCommerce.
Beyond service fees they also generate
sales commission from some clients, which
already accounts for around 5% of revenue.
While many commentators focus on the
size and growth of the Asian markets, it is
also important to remember it is the base for
an increasing number of large technology
firms. Four of the top 15 public internet
firms are from China, with all the rest US-
headquartered. Moreover, Asia’s top 10
smartphone brands accounted for nearly
70% of global sales last year.
Lessons from Silicon Valley are rapidly being
re-applied across the region. For example,
Korean VC Marvelstone has announced
plans for 10K, its affiliated accelerator-
incubator program for startups, to accelerate
100 startups in 100 planned centers across
Asia – a total of 10,000 incubated ideas,
hence the name.
As technology increasingly transforms
so many lives in Asia, look for it to have
a significant global marcoms impact, as
mobility matures and the connected home
becomes more pervasive.
Chris BeaumontE [email protected]
REGIONAL INSIGHT FROM OUR GLOBAL TEAMThe continuing rise in M&A activity is fueled by technology and this is also the case across Asia, where heightened consumerism is founded on continuous and accelerating mobile, social and eCommerce innovation in the region
www.resultsig.com
TOP 10 TECH DEALS BY SIZE IN 2015
9
The marketing services and technology
sectors are being transformed on what
sometimes feels like a daily basis by new
technology, changing consumer behaviour
and new business models. In October
2015, we were privileged to be able to bring
together speakers from many of the most
exciting companies in our ecosystem to
present their insights into the key forces
disrupting the landscape. The event was
held at the London Film Museum, which
provided a very enjoyable opportunity after
the presentations for the 200 participants to
network amongst the many iconic exhibits of
the Bond in Motion exhibition, including the
unforgettable Aston Martin DB5 and Lotus
Esprit S1.
The format of the event was a rapid fire
series of presentations, providing insight
into the challenges and opportunities of the
sector from the perspective of publishers,
technology vendors, agencies and investors
from the US, Europe and Asia. We have
captured many of the varied themes and
thought-provoking insights below and you
can find videos of the presentations on our
website.
A constant theme throughout the day was
the impact of new technologies and the
increasingly difficult challenge of genuinely engaging with consumers, and as a result,
the continued, and perhaps increased
importance of great storytelling skills to cut
through the noise.
One technology company that can’t be
dismissed is Facebook, and the company’s
former director of agency partnerships,
Claire Valoti, was on hand to remind the
audience of the power of a platform that
claims one in four of all minutes is spent on
mobile.
Tools like Facebook show that search is no
longer enough to engage with consumers
as often they don’t actually know what
content they are looking for. The rise of
imagery, which we can process 60 times as
fast as text, was one outcome. The amount
of content available has gone up, but the
brain’s capacity to process it has not, so
brands have to find smarter ways to put
people at the centre of their efforts.
Facebook data provides brands with a
clearer picture of what consumers do and
what they want, allowing personalisation at
scale, and revealing the complete consumer
journey, said Valoti.
Now is the age of the customer, said Craig
Dempster of Merkle, resulting in the rise
of the ‘Platform Marketer’, to handle the
ability to address individuals at scale. These
new marketers have to master the 3 Cs –
context, connectivity and content. They also
have to rationalise a bewilderingly complex
tech stack by developing platform marketing
competency.
One tech company that hopes to make
things easier for brands is Scoota which is
bringing programmatic advertising to rich
media. Contradicting perceived wisdom that
you are more likely to win the lottery than
open an online ad, James Booth of Scoota said that the company was delivering an
average of 3.7% responses for brands, and
much higher for some.
The old marketing playbook is broken, said
Kieran Flanagan of HubSpot. Inbound
marketing based on the right content and
context wins. Companies have to think of
content as a long-term asset, but too many
bail out at an early stage because they
don’t see immediate returns. Patience pays
dividends in the long-term.
Content oversupply means marketers have
to stop thinking like marketers and think
like their audience, said Chris Talago of
communications agency WE. Find out what
they get excited about and why. Technology
provides people with a filter on the stuff they don’t value. “Do not complain about people
skipping your content – produce better
content,” he urged.
Brands have to earn the right to
communicate with us in a truly permission-
based environment.
Results International’s Next Gen: Future Thinking conference was held at the spectacular London Film Museum in October 2015
FAST FORWARD TO THE FUTURE
www.resultsig.com
10
This is the greatest conference location of all time, thanks @Resultsig #NGFT15’ - @TelegraphHillHQ
“It’s like being a great dinner party guest.
You have to bring something to the table.”
Talago said.
Rachel Barton from Accenture painted a
picture of the future where everything brands
thought they knew was wrong. Likening
digital disruption to the industrial revolution,
she said that massive innovation was
creating new norms for the way we live.
This would provide opportunity for some,
but lead to the demise of others. Would
Millennials for example want to buy cars
or will they just rent through a subscription
model - tastes and needs are constantly
changing.
The internet of things, wearables and robots
were all features of this change and product
development is happening at a rate like
never before. The next wave of the digital
revolution is humanising digital, learning
and adapting to our needs as living services,
she said.
iCrossing’s Nick Brien reiterated a common
theme of the event when he said that
brands had moved from a B2C environment
to a C2B one. Brands are now publishers.
“Unilever sees a brand like Dove as a
platform to communicate a wider message.”
Although not all brands could be like Red
Bull with its content strategy, each has
some expertise that it can bring to the
content space, he said. Websites are no
longer static but need to be customised
to recognise the customer journey and to
serve them better.
Not all content has to be exciting or prize
winning. Sometimes it just has to be
informative and correct in order to drive
conversation, said Ed Bussey of Quill.
Bussey pointed to the importance and
challenge, of creating primary content at
scale in areas such as listings, product
descriptions and guides. “It’s not sexy, but
FAST FORWARD TO THE FUTURE
Julie LangleyE [email protected]
“ ...Now is the age of the customer,resulting in the rise of the ‘Platform Marketer’... ”
it’s essential and it drives search rankings.
It is arguably the most measurable content.”
Finally, Cheil’s Aaron Lau gave the room a
whistle stop ride through the world’s fastest
growing advertising region – Asia. Nearly
half of the global middle class will be in this
market within 20 years, he said, and there is
massive headroom for growth. The Chinese
consumer has a great appetite for Western
goods, but is no pushover, he says. They
also value local brands, and with so much
competition for their custom, notions of
loyalty do not conform to those of the West.
The Chinese consumer will move to other
brands – 49% of customers leave every year.
Like the rest of the event, it was an
intriguing insight into the changes that are
reshaping marketing now. While some
things change, others remain the same.
Content is still vitally important and creativity
is arguably more important than ever, but
how it is created, personalised, targeted
and distributed is now critical. People have
more control over their relationships with
brands than ever, and marketing needs to
change to respect this new dynamic. It is the
‘how’ of reconciling these observations that
will challenge marketers over the next few
years, and determine the next generation’s
winners and losers.
‘Amazing Venue for the brilliant @ResultsIG #NGFT15 conference today. #bondinmotion @ldnfilmmuseum #nailedit’ - @scoota_Group
‘I’m loving the #disruptive presenter formats @ #NGFT @ResultsIG. Future trends, fast, to the point and thought provoking #content’ - @c8mma
“ ...Results is very lucky to work with some of the most innovative businesses in such a dynamic sector..., ”
11
Mark joined Results as Director in December 2015 having spent six years at WPP, where he worked on over 70 deals. We caught up with him to talk, about life at WPP, what he loves about marcoms and why he joined Results
MARK COX JOINS RESULTSMark CoxDirector
www.resultsig.com
Mark CoxE [email protected]
corporates this is far more easily managed
through M&A than developed in-house.
What are your top predictions for 2016?
I would have to point to mobile as this is still
a relatively underexploited channel with a
lot of key players still searching for the right
partners to stay ahead. I also think that there
will be significant activity in data & analytics
with a broad range of potential acquirers
(technology, consulting and marcoms)
seeking to develop further capability and
make significant inroads into the space.
Tell us about life at WPP and what it is that you love about marcoms?
At WPP, I worked on over 70 deals covering
more than 20 countries and 40 cities across
the full spectrum of marketing services - the
role was incredibly varied and challenging.
One week I would be in New York working
on a PR deal, the next in Seoul looking at
a new digital creative agency and the third
in Nairobi looking at a listed, fully integrated
agency. The role also encompassed post-
deal integration and review, an area that
advisors rarely get to see.
Marcoms is a great sector to be involved in –
over the years, I’ve been privileged to meet,
work with and learn from some great people
across a number businesses and the sector
always feels young, fresh and extremely
dynamic. I enjoy all these aspects of it.
What is the most interesting deal you worked on at WPP and why?
It’s almost impossible to choose one so I will
mention two things that have been incredible
experiences, both for different reasons. My
first was a pivotal moment early on when I
knew I would enjoy working in the sector and
at WPP. I arrived at the first meeting with
a new potential business, I was the typical
accountant fresh out of PwC with shirt and
tie (the tie was in my bag!) but was met by a
Led Zeppelin t-shirted CEO. Slightly different
to what I was used to at PwC but we quickly
got down to interesting discussions. Another
would be I-behaviour, a US-based database
marketing and behavioural targeting
business, where I first got to learn about and
appreciate the importance of data which is
something that has become more and more
prevalent in this sector and beyond.
What specifically attracted you to Results and why now?
I’m excited to be joining the Results team
at this stage of my career. The team has an
excellent reputation in the market and whilst
I was seeking a new challenge I was keen
not to leave the M&A environment in my
next role. I see this move as a great
chance to leverage my experiences in
more of an entrepreneurial environment in
a sector I enjoy. I particularly enjoy working
with owner managers and people who are
passionate about their businesses and want
to take them to the next stage of their life
cycle, which I’m looking forward to doing
here at Results.
What are the key industry trends that are currently driving M&A in your view?
I think the search for talent has and
continues to be critical. I closely follow the
activities of Google and I think they have
been incredibly innovative in their approach
to M&A around leveraging talent. I could
also point to a host of other factors such as
data, marketing automation and mobile but
I would perhaps highlight more generally
the speed of change, and that for large
12
www.resultsig.com
MARK COX JOINS RESULTS
BIMA - the British Interactive Media Association - exists to support and promote the British digital industry, share knowledge and best practice, reward great work and encourage the next generation of digital experts.
With 300 corporate members with a
combined annual turnover in excess of
£1.3 billion and employment of over 15,000
people, the organisation clearly has a major
role to play.
In the last year BIMA has done more than
ever to promote the digital sector. One of its
biggest achievements was the 2015 Digital
Day, which raised awareness of career
opportunities in digital amongst 15-18 year
olds by bringing people from 100 agencies
to talk to students in 120 schools across
the country. It was first created in 2012 as a pragmatic response to the digital talent
shortage by coordinating BIMA members
to help raise awareness of digital careers
amongst young people, and this year’s event
was the biggest yet.
In addition, 180 attendees saw Andrew
Fisher inducted into the Digital Hall of Fame
this year, while BIMA’s equally famous Hot
List led to 100 ‘hotties’ honoured across ten
categories including Champions, Creatives
& CEOs.
It also hosted 25 breakfast briefings, dinners and roundtables, which meant 1,500+ free
tickets to knowledge-sharing and networking
events that London members were able to
take advantage of in 2015. While around
the UK, its hubs in Edinburgh, Liverpool,
Bournemouth, Kent and Bristol held another
37 events; all told, its events this year saw
more than 6,000 attendees.
Last year also saw BIMA launch the first of its Business Intelligence Days at the end of
October, with 20 members taken on a tour
of some of the most creative agency spaces
in London (AnalogFolk, Visualise at Second
Home, Karmarama and DigitasLBi), where
they received a tour and a talk about how
each agency’s layout and design supports
and drives their creativity and culture.
The organisation has also done more
than ever to engage with government
and represent the interests of the digital
community, including contributing to the
writing of new apprenticeship standards
and helping to organise industry events to
inspire employers in the digital industry to
take on hundreds of new apprentices. These
junior roles are crucial in the fight to improve diversity and the flow of young talent.
BIMA is also now increasingly active in
industry boards and groups such as the
Creative Industries Council and Tech
London Advocates, representing the needs
of its members in discussions on issues
from migration controls (affecting access
to foreign talent) to the Scale Up Manifesto
(lobbying politicians to support growing
businesses).
While via the organisation’s membership
of the Advertising Association, it’s also
contributing to industry discussions on
the Digital Single Economy and European
legislation around privacy and data. All in all,
2015 was another big year for BIMA – and
plans are in place to make its support of the
digital sector even more noteworthy in 2016.
Results’ Managing Partner Keith Hunt was re-elected to the Executive Committee of BIMA at its AGM on 1 December 2015
Keith HuntE [email protected]
ANOTHER GREAT YEAR FOR BIMA13
HEALTHTECHThe ongoing digital transformation
Sam Dunford-BakerE [email protected]
Healthcare continues to lag
behind other industries in
digital transformation due to
historical barriers to adoption,
such as expense and lack of
interoperability. This in spite of
the fact that digitisation offers
a compelling solution to the
ongoing challenges of meeting
the increasing demand for
healthcare while reducing the
cost of delivery.
Nevertheless, in recent years, the healthcare
industry has started to catch up and realise
the transformative potential of technology
through the use of data & analytics and
other solutions to improve patient outcomes
whilst maximising cost efficiencies. This shift
in the perception of HealthTech has attracted
new and emerging buyers, including national
telcos and diversified software vendors
whose origins are not in healthcare, to play
in the space.
For national telcos such as Telstra
(Australia), Telus (Canada) and Swisscom
(Switzerland), the rationale is simple: with
connectivity reaching saturation, traditional
revenue growth is increasingly tied to that of
the population and developing new revenue
streams is a strategic imperative. For Telus
(four acquisitions in the last two years)
and Telstra (four acquisitions in the last
two years, including UK-based healthcare
performance analytics vendor, Dr Foster),
these strategies began in 2007 and 2014
respectively. For both, aspirations are
the same – to create national HealthTech
ecosystems which improve outcomes and
efficiency – as is the commercial rationale:
demand is strong and yet to peak, while
investment risk is low relative to potential
future earnings.
For diversified software vendors the
business case is the same, but acquisition
strategies are slightly different: a) building-
out a HealthTech business with technology
complementary to existing offerings; or
b) expanding current business with new
capabilities or by consolidating existing
ones. Recent examples of the former include
Lexmark, Fujifilm and Konica Minolta, which
have one medical information and image
management acquisition apiece in 2015.
Roper Technologies on the other hand has
acquired six HealthTech companies since
2014 across new and existing capabilities,
including building on their existing laboratory
information management offering through
the acquisition of UK-based Clinisys, for
c.$260 million.
Nowhere has the focus on data been more
apparent than with IBM’s establishment of
its health data analytics unit, IBM Watson
Health, after acquiring US-based data
analytics companies, Explorys and Phytel,
in April 2015. Combined with its subsequent
acquisitions of Merge Healthcare and
Truven Analytics totalling approximately
$3.6 billion, Watson is intending to improve
care coordination and outcomes by
providing professionals with data-driven
insights at the point of care.5
What Watson’s insights will look like as a
usable product is not yet certain, but with
partners including Medtronic, Apple and
Johnson & Johnson, there is no doubt that
large bets are being made on the next
generation of HealthTech, bets that are
translating into deal activity. In 2015 alone,
tracked activity totalled 253 deals across a
range of buyers seeking to be part of the
digitisation catch-up or next revolution in
HealthTech. Either way these trends point to
a strong 2016 in the HealthTech space.
“ ...digitisation offers a compelling solution to the ongoing challenges of meeting the
increasing demand for healthcare... ”
14
www.resultsig.com
HEALTHTECH
MEET THE TEAM...
Results International27 Soho Square, London, W1D 3AYT +44 (0)20 7629 7575
15
Sunil GuptaManaging Partner, South Asia
Mark WilliamsDirector
Anthony HarringtonDirector
James KesnerDirector
Mark CoxDirector
Eduardo SteinerManaging Partner, Latin America
Kevin BottomleyPartner
Keith HuntManaging Partner
Julie LangleyPartner
Chris LewisPartner
Maurice WatkinsPartner, USA
Pierre-Georges RoyPartner, USA
Andrew KeffordManaging Partner, APAC & MENA
www.resultsig.com
Authorised and regulated by the Financial Conduct Authority
Chris BeaumontManaging Partner, North Asia
OUR QUARTERLY REPORTS
Imad KablawiRegional Partner, MENA
SOME OF THE EVENTS WE ARE ATTENDING IN 2016:
Please view all these reports on our website: www.resultsig.com/insights or email us to join our mailing list: [email protected]
Andy CollinsSpecial Adviser
Chris JonesNon-Executive Chairman
David MansfieldNon-Executive Director
www.resultsig.com
