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Climb Advisors Weekly M&A Deals Newsletter
The Week in Review
Nick @ Climb
December 03, 2023
Welcome to Climb Advisor’s weekly deal newsletter highlighting transactions announced last week across the B2B tech landscape.
Climb Advisors is an M&A advisory firm focused on B2B software and services companies in the range of $5m to $50m+ enterprise value. We guide CEOs and business owners through the process of selling their business & assist investors in sourcing & closing great deals. We love to talk markets and share beneficial information - please reach out any time.
Research Solutions acquires Scite along with their customer base of 21k subscribers
Overview: Research Solutions (NASDAQ:RSSS), a provider of cloud based solutions to aid researchers in R&D driven organizations, boosts its own capabilities & adds subscription revenue. Scite's AI software allows users to search and query research articles (similar to Chatgpt but just for research publications), cite relevant sections, and provide a classification to either support or contrast the cited claim. It had 21k B2C subscribers and many B2B too, including corporates, academic institutions and government agencies. As 10/31, its ARR was $3.6M. Read more here.
Climb Comment: Deal was announced at $14.8m with a 50/50 split between cash at close — representing a 4.1x ARR multiple. Great comp for the private markets.
RSSS’s core offer is a one-click ‘galaxy cloud’ for searching & accessing academic papers. Scite provides AI powered smart citations — traceability between how scholarly papers interact with each other — as well as powerful search capabilities and a GPT-style conversational interface. This acquisition adds very useable tech capabilities, add’l research libraries, a strong customer base & recurring revenue. A win all-around!
Amulet Capital Partners backed Unlock Health acquires SPM Group from Corridor Capital
Overview: Unlock Health’s platform helps healthcare providers across managed care, marketing, and technology with the penultimate arm receiving a major boost this week. This deal adds a network of health and healthcare marketing agencies for SPM Group -- broadening their offerings in digital media, content strategy, production, and analytics. The deal will also see them become the largest health tech and services growth platform in the US, with $100 million in revenue and 343 professionals serving more than 350 clients. Read more here.
Climb Comment: Great acquisition for Unlock & excellent exit for SPM & their backers. SPM has been executing on a rollup in the healthcare agency space for some years now and the exit proves the efficacy of that strategy. Terms were not disclosed but we have to assume that value was created via both organic growth and multiple arbitrage across the very labor intensive process of integrating multiple scaled agencies over a multiyear period.
Makes sense to see Unlock continue to invest in their marketing practice, excellent services to sell to clients where trust is already established via existing relationships across tech & services channels.
Conversational AI testing company QBox snapped up by Cyara
Overview: The addition of Qbox complements the existing chatbot testing and training capabilities on Cyara's AI-powered Customer Experience assurance platform. The startup with a team of 21 based between the UK and Sri Lanka, offers natural language processing solutions to test and improve AI chatbots. These solutions coupled with Cyara’s CX assurance offerings allow clients to optimize the development, delivery, and impact of their conversational AI investments. Read more here.
Climb Comment: Great add here. We’ve talked in past weeks about the challenges enterprise orgs face with adopting new AI technology. Testing/digital sandbox tools are a huge part of this shift. Startups like Cyara fill the gap for these enterprises, giving a chance to run simulations & improve the efficacy of customer-facing chat solutions.
Equally important in these sort of transactions, as we’ve also discussed, is the addition of high-level engineering talent. In the race to develop AI being able to acquire scaled & gelled teams already working on relevant business challenges is invaluable.
Progilisys Solutions becomes the latest acquisition for Osceola Capital backed Talent Groups
Overview: The deal for Progilisys, an IT staffing and IT managed solutions provider, sees Talent Groups’ total acquisitions in 2023 grow to 4. Boasting a team of 44 employees, Progilisys excels when it comes to assessing systems, architectures and application management requirements across different computing environments. Their ability to provide IT professionals based on these results will complement Talent Groups’ current IT staffing offerings, cementing their place as a leader within this industry across the US. Read more here.
Climb Comment: Talent Group has been quite acquisitive and here adds strong talent & capability. Talent Group has national presence; full-suite capabilities including contract staffing, executive search and management solutions; and a delivery center in India.
We expect to see them make additional buys in 2024 as they continue to scale their integration capabilities. IT staffing is an industry that lends well to rollups due to it being at its core a ‘people business’. By adding management layers and strong SOPs, acquired entities are able to join the mothership in a very accretive way.
Curriculum Associates acquires Dublin-based Soapbox Labs
Overview: The US edtech company has announced a deal for Soapbox Labs, a provider of voice AI to improve learning experiences for students, which will see them become Curriculum’s R&D hub in Ireland. The key differentiator with Soapbox is that their voice engine is specifically designed with the speech pattern of children in mind and is compatible with every dialect and accent. Thus educators using Curriculum's tech will be able target and personalize their instructions to meet needs and improve outcomes across a diverse student population. Read more here.
Climb Comment: Cool deal here that blends the generally ‘undisrupted’ education space with cutting-edge technology. Curriculum Associates provides a wide range of on & offline educational materials focused around assessment & instruction.
Soapbox provides a platform for voice-based learning and assessment and most importantly, solves some of the challenging issues around speech intake. Think of how frustrating voice-to-text can be, and then extrapolate that out to a young child trying to complete a school assignment. Soapbox has built tech that smooths out that difficulty and now gives Curriculum Associates the ability to offer speech based assessment across their already broad platform.
Podcast and Book of the Week!
This week the world mourns the passing of iconic investor Charlie Munger. Few have impacted our thoughts on investing, business and life as much as Charlie did and I am sure many of you feel similarly. Rather than share one of the thousands of tweets about him this week, we thought would leave you with a recent interview he did on Acquired podcast here and a book recommendation. Seeking Wisdom: From Darwin To Munger focuses on the processes that govern human decision making and draws on Charlie’s insights and wisdom in the business context.
Thanks for following along & hope you found something useful or interesting. We’ll be back next week with more deals.
All the best,
Nick