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Climb Advisors Weekly M&A Deals Newsletter
The Week in Review
Nick @ Climb
January 14, 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.
Global digital consultancy firm Marlabs acquires Onebridge
Overview: Marlabs is a digital consultancy of more than 2,000 professionals focused on data, cloud security and digital transformation. By adding Onebridge they aim to accelerate their growth in the AI and data analytics space, with Onebridge focused on data analytics, governance, management, and visualization. Read more here.
Climb Comment: Great services deal here and an example of a larger strategic acquiring strength in a niche, in this case data analytics. Marlabs presumably had strong capabilities here already given their scale and expertise around digital transformation but clear opportunities here both to synergize costs and cross-sell but also to infuse an organization with fresh talent bringing domain expertise.
IAC Corp agrees deal to sell Mosaic Group to Bending Spoons
Overview: IAC Corp (NASDAQ: IAC) has agreed to sell its mobile software subsidiary Mosaic Group, which it has owned since 2014, to Bending Spoons for an undisclosed sum reported to be above $100m. This deal will boost the acquirer’s already extensive range of digital products in categories such as fitness, lifestyle, entertainment, and utility. Read more here.
Climb Comment: We are likely all familiar with the IAC model - one of the best M&A and divesting companies in the business - but Bending Spoons is a new player in the digital app acquisition landscape, although it is applying a tried and tested model.
The Italian app studio has been on the acquisition trail over the past number of years fueled by a $340m debt + equity raise in 2022. Their portfolio consists of a wide variety of apps from high profile companies like Evernote to photo and video editing apps. From the outside, it looks like they are replicating the very successful mobile gaming acquisition and monetization model of companies like Zynga and Applovin. The cliff notes version of it is that they acquire an okay performing app, optimize monetization to drive higher LTV which allows them to bid on expensive ad inventory on Google and Facebook to increase users, then monetize these new users and improve cash flow. Use this cash flow to rinse and repeat the model on the next acquisition. With half a billion downloads and >100M MAUs, it is clear they are having success with strategy.
It’s interesting to note for this acquisition that none of Mosaic’s 350 employees will join the new company. Mosaic itself was formed via a takeover by IAC of Belarus-based Apalon in 2014 and has a portfolio of 15+ apps including a spam call blocker, several translation apps, a weather app, a PDF editor, and a range of other productivity and lifestyle apps.
Bloomerang acquires Qgiv
Overview: Bloomerang, a donor and volunteer relationship management software platform serving non-profits, has bolstered its offerings with this deal for Qgiv. Based in Florida with a team of 92 employees, Qgiv provides a set of fundraising tech solutions such as online giving and event registration forms, text fundraising, and auction and event planning tools. This integration will offer a comprehensive solution to increase fundraising revenue, deepen relationships with donors, and cut admin time. Read more here.
Climb Comment: Bloomerang, backed by JMI Equity, raised $60m in syndicated debt financing from CIBC in June 2023 and they appear to have found a great opportunity to deploy some of that with their acquisition of Qgiv. Qgiv focuses on the giving/fundraising side (payments) of non-profit management. As the for-profit ‘checkout experience’ becomes more seamless, patrons come to expect similar for their charitable giving and platforms like Qgiv provide this. Great opportunity for Bloomerang to integrate further into their customer’s stacks and stay in favor with a solution that drives revenue & noticeable platform ROI.
Authomize acquired by TPG backed Delinea
Overview: Authomize, a cybersecurity startup which helps detect, investigate and respond to identity based threats such as account takeovers and insider threats, has been acquired by Delinea. The San Francisco based acquirer provides solutions to enterprises to guard against unauthorized privileged access to their critical resources. Delinea gains an R&D base in Israel; with the majority of Authomize’s 46 employees based there. Read more here.
Climb Comment: Cybersecurity is an interesting market segment because it appears ‘anti-fragile’ - bad actors are always in an arms race with enterprises and security providers leading to evergreen demand for security products. And also an evergreen demand for M&A as mature companies try to buy the point solutions provided by more innovative start-ups.
Delinea solutions focus on Privileged Access Management (PAM). In simple terms this is the management of user account credentials & permissions, specifically in technical & financial systems, across an enterprise. Authomize, which focuses specifically on identity protection, preventing user impersonation, password theft, will bulk up Delinea’s capabilities there.
Evergreen Services backed Global Tech Solutions (GTS) acquires AdaptCX
Overview: GTS provides a range of IT services including technical support, cloud hosting and more. This deal brings them further into the customer experience (CX) sector. AdaptCX is a contact center tech advisory firm helping with quality management, analytics, reporting and cost control, and coaching and training. Read more here.
Climb Comment: Another deal with a larger consultancy acquiring domain expertise, in this case in the contact center space. Contact centers can either be a revenue generator for organizations or a profit drain & frequent headache. Agent management, through technology & practice, is an important part of this and GTS is wise to target offerings in the space. If contact center software is a space you are interested in, please let us know as we have opportunities available here.
Climb Comment - companies running out of cash
No article to share this week as we wanted highlight a trend we have noticed a huge uptick in 2024. We have had a number of conversations with SaaS CEOs and investors in the past two weeks where companies have <6 months of runway left. Much of this is the backlog of companies that raised in 2021 / early 2022 that haven’t found efficient growth/product-market fit + can’t raise in this current environment. They kicked the can down the road for 2023 but now they have to make a decision. It’s not clear if it is the new year that has brought the realization that they need to do something (it obviously shouldn’t be!) but it will be an interesting dynamic to observe how it plays out from an M&A perspective in the first half of the year.
Happy to chat further live about this if you are interested in learning more.
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