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Climb Advisors Weekly M&A Deals Newsletter
The Week in Review
Nick @ Climb
January 07, 2024
Welcome to Climb Advisor’s weekly deal newsletter highlighting transactions announced last week across the B2B tech landscape.
Climb Advisors is an M&A and credit 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.
Onfolio Holdings makes RevenueZen their latest addition
Overview: Onfolio Holdings (NASDAQ: ONFO) is a holding company that acquires profitable internet businesses in sectors ranging from marketing services to digital products, to online education, and software in the $500k to $2m EBITDA range. They’ve just added RevenueZen, a Portland based B2B marketing agency specializes in search-engine optimization, to their portfolio. Read more here.
Climb Comment: Climb was pleased to advise Onfolio on this deal from sourcing the company through to execution of the deal. ONFO is a decentralized holding company for digital businesses with strong roots in the agency world and RevenueZen is a premier B2B SEO agency with capabilities in Linkedin & content and a team of stellar marketers. The team will be joining Onfolio & the intent is to continue to add breadth to the portfolio via acquisition, with RZ serving as a platform to build on.
The deal was structured with around 1x EBITDA cash at close and a mix of other mechanisms to build value for all involved parties. Expect to see more deals from Onfolio to follow this one.
We believe there is ripe opportunity to continue rolling up the marketing agency space and have seen both PE and strategics continue robust deal activity. If you are involved in the agency space please drop me a line - we’re in active discussion with a number of buyers and sellers.
UserWay to become a privately held company following acquisition by Level Access
Overview: UserWay (TASE: UWAY) has been acquired by Level Access for $98.7m in an all cash transaction. Level Access helps clients comply with regulations and standards around providing accessible technology to people with disabilities and UserWay looks set to bolster these offerings with their AI powered solutions. Read more here.
Climb Comment: Take-private here off the Tel Aviv exchange - with Userway being acquired at a 22% premium to recent trading prices and at what looks like a ~8x ARR multiple (based on quoted $12m ARR in August ‘23).
Strong tailwinds here for both parties as the Department of Justice rolls out sweeping ADA compliance regulations requiring websites to be more accessible to a broader range of users. Things like making sure images are tagged with text descriptions, offering keyboard navigation, accessible fonts & more. Currently most government websites adhere to these standards and many corporates opt-in voluntarily but regulation will lead to wider roll-out and huge market opportunity.
Worth noting this deal touches two themes we’ve covered extensively — the acquisition of AI tech & teams by established players, and the increased demand for compliance-driven products.
iCoreConnect acquires FeatherPay to accelerate expansion into fintech
Overview: iCoreConnect (NASDAQ: ICCT) are creating a fintech division and using M&A to kick start the process. FeatherPay, which provides patient payment and billing technology for healthcare practices, is set to be the cornerstone of the new iCorePay division with FeatherPay’s CEO Craig Haynor leading the way. This move sees a significant expansion in iCore’s portfolio with their core offering coming in the form of an enterprise and healthcare platform which helps increase workflow productivity and practice profitability. Read more here.
Climb Comment: Healthcare billing is another area where we’ve seen strong activity in the last 12 months. FeatherPay appears to focus on dental practices and to be geared more towards direct to patient billing vs insurance provider billing. They offer a solution that connects unpaid liabilities to a payment portal offering patients the option to pay via Venmo, Apple Pay and other non-bank payment methods as well as traditional ACH and offer payment plans & pre-appointment payments.
FeatherPay raised an undisclosed Seed round in 2022 and had 4 employees per LinkedIn - nice example of what a small team focused on a defined niche can accomplish.
Billups continues M&A hot streak with acquisition of Outsight
Overview: Billups, which helps out-of-home (OOH) advertisers and agencies strengthen their media performance through a patented analytics and measurement platform, has acquired Outsight - a Belgium based company that helps deliver impactful OOH advertising campaigns with solutions such as media planning and buying, campaign management, and production oversight. This announcement marks Billups 3rd deal since September with Outsight and its team of 8 employees helping boost their already growing international presence, especially in the Benelux region. Read more here.
Climb Comment: Great to see increased activity from Billups, who claim to be the largest OOH platform in the US. As consumers are increasingly overwhelmed by direct advertisement and cookie-based marketing we’re seeing a resurgence in brands returning to advertising forms which rely on displaying ads to viewers in physical locations. Platforms like Billups help brands to leverage that ad spend effectively and put the most relevant ads in front of the right buyers at the right times.
Sinecure.ai announces strategic deal for Grace Blue Partnership
Overview: Sinecure.ai is aiming to revolutionize recruiting talent through AI powered search technology and LLM innovation. By adding Grace Blue Partnership, a global search firm specializing in leadership talent, they now have both the research and personal aspect needed to streamline the recruitment process, improve candidate quality and ultimately lead to better results for both clients and candidates. It’s also worth noting that Grace Blue and their team of 53 employees has been utilizing Sinecure’s technology since its release in June 2022. Read more here.
Climb Comment: Great deal here highlighting another trend we’ve touched on - the acquisition of services firms by tech companies & vice-versa. Sinecure is an AI powered talent discovery platform - highlighting relevant candidates and offering precision targeting and automated candidate parsing. Makes a ton of sense they’d bring in a team of recruiting experts as well as the data the firm has built over years of operations, enabling them to train custom models & provide hands-on client service, as well as bringing the extensive rolodex Grace Blue has built through the years. Exciting deal in an industry that is certainly benefitting from technological advancement.
Highlights of the week
We enjoy annual predictions and one we always look out for is Dave Kellogg’s. Dave is currently EIR at Balderton Capital but extensive experience in the CEO, CMO, and independent director seats across 10+ enterprise software companies ranging in size from zero to over $1B in revenues.
His 2024 predictions include some nuggets both for management teams and Boards / investors. One we noted was that he predicts the benefits of AI-generated GTM efficiency and how CEOs better be ready for Board’s questions on same. He uses a slide from Battery Ventures showing potential reduction headcount in AI-enabled sales team to illustrate the point.
Lastly, we apologize that some of you may not have been able to open the link to the Vanity Fair article on New York Time strategy investment in games from our previous edition. We shared a link that should have by-passed their paywall but didnt work for some. This one will work as you get one free article per month. Enjoy - it’s a great example of a successful M&A strategy.
Thanks for following along & hope you found something useful or interesting. We’ll be sharing some exciting announcements soon about new partnerships Climb is working on in 2024.
All the best,
Nick