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- Climb's M&A Weekly: Cloudflare, Veralto and Perseus Group all feature
Climb's M&A Weekly: Cloudflare, Veralto and Perseus Group all feature
Veralto completes a deal for cloud-based software provider and Cloudflare acquires Kivera to enhance security and data protection offerings.
Nick @ Climb
October 13, 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 $100m+ 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.
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Solvd Inc. Acquires EastBanc Technologies
Overview: Solvd Inc., an end to end software engineering and technology consulting firm has acquired EastBanc Technologies, a Washington D.C. based AI consulting company. This acquisition strengthens Solvd Inc.’s service offerings by integrating EastBanc’s AI expertise to enhance its capabilities in cloud development, software product development and data analytics. Together the entity will provide leading solutions to Fortune 500 companies across industries such as financial services and healthcare. A key development from this deal is Solvd’s introduction of AI Innovation-as-a Service, aimed at advancing clients' digital transformation. Read more here.
Climb Comment: Established players continue to seek AI capabilities across services & software. Solvd CEO Adam Gabrault puts it succinctly --
“As we look at the market landscape today, traditional IT services firms focusing on system integration and labor arbitrage are not well-suited to embark on providing the critical AI capabilities that leading organizations need.”
Solvd will also benefit from expansion into government contracts via EastBanc’s longstanding relationships in the space.
Veralto Completes Acquisition of TraceGains for $350 million
Overview: Veralto Corporation, a company that develops essential water and product quality services has announced the acquisition of TraceGains, a provider of cloud based software that focuses on digital workflow management and compliance for food and beverage safety. The deal was finalized for $350m reflecting TraceGains’ strong financial performance, with the company forecasted to achieve $30 million in sales this year at a gross margin of 80%. Veralto boasts annual sales of $5 billion with a global team of 16,000 associates and considers TraceGains to be highly complementary to its Product Quality and Innovation segment. Read more here.
Climb Comment: Substantial deal here in food & beverage. Risk & supply chain traceability again the key driver in a transaction, with TraceGains offering full traceability across more than half a million ingredients & almost 9m supplier documents to help food manufacturers like Oatly, Ocean Spray & Tillamook remain compliant. Healthy multiple at more than 11x proj ‘24 sales.
Perseus Group Acquires Honeywell’s Exclusive Global License
Overview: Perseus Group, an operating group of Constellation Software Inc. is making a decisive move in the pulp and paper industry. It has acquired the exclusive global license to Honeywell’s OptiVision software. Optivision is a comprehensive Order to Cash system that ensures efficiency in order management, warehousing and shipping. The strategic acquisition will contribute to Persesus’ vision of ‘Software for Life’ intended to create long term success and value for OptiVison customers. The license will be managed by OPTIVIQ, a company within Perseus that has 40 years experience in the paper and pulp industry.Read more here.
Climb Comment: CSU making further moves into pulp and paper and continuing carveout activity. Interesting to note that mechanically the deal was structured as an exclusive licensing deal, with Honeywell retaining the associated IP. OptiVision manages order-to-cash within paper/flat sheet manufacturing globally - perfect setup for Constellation/Perseus as a mission-critical piece to a massive and often overlooked industry. Multiple PE groups we’ve spoken with recently have indicated a heightened interest in carveout acquisitions - we expect to see more transactions of this type in coming months.
Connatix and JW Player Announce Pivotal Merger
Overview:A merger between two leading companies in the video monetization space, Connatix and JW Player has been announced. The move seeks to capitalize on emerging trends including the shift from linear to streaming, importance of publisher monetization and the demand for advertiser transparency. The combined unit will reach more than a billion customers each month, and the plan is to upsell Connatix users on workflow technology and JW Player customers on video advertising. Read more here.
Climb Comment: Transformative deal in video - combining LLR-backed JW Player’s broadcast-level streaming, workflow, & analytics platform with Connatix’s powerful in-video monetization & DSP to create a true end-to-end streaming management platform for media & enterprise. JW Player is a longtime leader in the space, originally serving as the player for YouTube prior to Google’s acquisition.
Cloudflare Acquires Kivera to Enhance Security and Data Features
Overview: Cloudflare has continued its M&A growth strategy with the acquisition of Kivera, a NYC based cloud security and data protection company. Kivera’s patented technology integration into Cloudfare’s existing technology will enhance its preventative cloud security measures, strengthening the company’s position as an extensive, unified platform for cloud solutions. Read more here.
Climb Comment: Security & compliance are the drivers here with Kivera offering functionalities to include cloud misconfiguration alerts, data permissioning, & cloud configuration tracking. Cloudflare is driven by a mission to make cloud computing safe & efficient for all and this acquisition provides key features and great talent towards that goal. User changes to cloud environments can open security risks, cause production issues, and increase organization costs - having a system like Kivera embedded into the Cloudflare stack protects against these risks.
Article of the week
Sad news this week in the passing of Ratan Naval Tata, truly a business tycoon and the man largely responsible for putting India on the global map as a technology leader. We enjoyed this HBS interview with Tata where he discusses the importance of creating venture ecosystems in emerging markets.
Thanks for following along & hope you found something useful or interesting.
All the best,
Nick