Climb's M&A Weekly: Climb Advises Onfolio on acquisition of DDSRank

Climb Comment: We’re delighted to close our second deal with Dom Wells & the team at Onfolio. Quote from Dom below -

 _{"DDS Rank was an obvious acquisition for us. While it is much smaller than our next anticipated acquisition and other acquisition candidates in our pipeline, it has very significant untapped potential. We believe we can increase annualized revenue to more than $600,0000 and EBITDA to more than $400,000 in a matter of months."} 

This deal was completed in a similar structure to their recent RevenueZen acquisition (which Climb also advised on) in that roughly 1/3 of the purchase price was paid in cash, 1/3 in preferred shares, and 1/3 in a seller note. This deal closed around a 3x ebitda multiple and provided great liquidity & upside for DDSrank shareholders and cashflow + expansion opportunities for Onfolio. Verticalization can be a major advantage in the agency space and the dental field is attractive for a number of reasons. Kudos to all & we look forward to closing more great deals with Onfolio in the future.

Climb Comment: Continuing one of the the major themes in M&A (and tech broadly) of the last two years — data management as it pertains to implementing and running LLMs in an enterprise construct. As in most things tech the direction is for capabilities to move from highly technical users down to business users & end customers. Verta provides an ‘AI workbench’ where users can select models, use pre-defined prompts, and manage datasets. Cloudera will leverage these tools for a range of customers & also add a team skilled in AI.

Climb Comment: Yet another deal focused on the management of enterprise data as it pertains to AI. If we had to point to a singular theme in large cap tech M&A that would be it. Orgs worldwide and across industries are scrambling to implement AI or at least to telegraph to the market that they’re implementing AI, and the first hurdle to clear there is clean and structured data.

Tabular, founded by ex-Netflix executives, & Databricks were both early innovators of the ‘data lakehouse’ - basically a standardized ‘processing center’ sitting on top of massive enterprise repositories. Together they’ll further create data interoperability, enabling enterprises to worry less about data formatting and interplay between systems.

Climb Comment: Exciting new platform deal for Rockbridge, a $1.7B AUM firm who have made a number of digital media investments since 2007. Vici specializes in white labeled solutions around maximizing paid media spend. Strong capabilities in the more technical aspects of media buying make this an attractive start to a platform - it’s easier to ‘plug’ customers/revenue into a platform that has strong technical chops than trying to build those capabilities in house across a disparate group of companies. Expect to see add-on acquisitions announced here & kudos to all.

Climb Comment: IR holds a number of brands, including the Drone Racing League, an XR/AR production studio, an influencer talent agency & a digital marketing agency. They’re backed by a long list of impressive names including Lerer Hippeau, MGM, T-mobile Ventures, IAC, & Steve Aoki, and they bill themselves as an ‘innovation company’. Here they acquire Action Face in an all stock deal which values IR at $3.5b.

Action Face has created an IOS app which creates personalized avatars for users which can be customized and then shared across social media platforms. The inspiration came via a partnership with the NBA & a desire to give consumers the opportunity to experience their own likeness on a ‘digital action figure’.