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- Climb's M&A Weekly: Deals by Mews, TurningPoint and Mill Point Capital
Climb's M&A Weekly: Deals by Mews, TurningPoint and Mill Point Capital
Mews uses M&A to fuel German expansion and TurningPoint aims to streamline complex clinical workflows
Nick @ Climb
May 19, 2024
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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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Mews adds HS3 Hotelsoftware to establish a foothold in Germany
Overview: Having previously appeared in a February version of our newsletter, hospitality cloud provider Mews is featured once again following their acquisition of HS3 Hotelsoftware. The German company provides on-premises property management systems, with Mews now claiming to serve 15% of available rooms in German hotels, apartments and hostels. Read more here.
Climb Comment: Great to see Mews staying active with another deal in the property management space, this time in the DACH market. Mews have established themselves as a leader in the space of hospitality-tech — a market that many investors have viewed as ‘too cyclical’. By specializing in this vertical they are likely able to pay higher valuations vs generalist acquirers and the programatic nature of their M&A gives strategic & cost advantage vs ‘one-off’ strategic buyers in the space.
Summit Partners backed TurningPoint Healthcare Solutions acquires Fairway Health
Overview: TurningPoint has acquired Fairway Health, a YC-backed startup using generative AI and LLM’s to help manage a patient’s healthcare documentation and streamline complex clinical workflows. By integrating this technology across their platform, which helps support both health plan members and providers, TurningPoint will be able to increase speed to care whilst reducing the admin burden placed on providers. Read more here.
Climb Comment: Further activity in the Gen-AI gold rush, this time in healthcare. TurningPoint manages nearly $4B in healthcare costs for patients and providers and will look to deploy Fairway’s tech across that platform in the short-term. Another case of A - GenAI/LLMs being used to reconcile vast quantities of messy date & B - an established player buying that AI tech and team to leverage across an existing customer data repository.
iQor announces majority investment from Mill Point Capital
Overview: iQor, a provider of CX and AI driven customer engagement technology, has received a majority investment from Mill Point Capital. Based in NY, Mill Point focuses on making control investments across the industrials, business services and IT services sectors. It is understood that this capital injection will be used to make operational improvements and expand into new industries and markets, by a company which already has 40K employees across 10 countries. Read more here.
Climb Comment: iQor is an interesting org in that in addition to providing T1-T3 IT support to worldwide enterprise they also have a focus on customer support via a lens of revenue generation — saving churning customers, cross-selling & up-selling, & even direct marketing services. Mill Point have solid experience in the sector, with more than a dozen investments into IT services businesses.
Leonard Green & Partners backed IRIS Software Group acquires Swipeclock
Overview: Global accounting and payroll software company IRIS is acquiring Swipeclock, a Utah based provider of workforce management solutions for SMBs. This deal supplements IRIS’ Human Capital Management (HCM) suite, which includes payroll, HR, recruitment and talent management offerings, with Swipeclock gaining added resources to advance product development. They will also continue to operate as an independent business within the IRIS software group. Read more here.
Climb Comment: IRIS offers their customers (ranging from SMB to F500) a full suite of products around payroll, HR management, & accounting. Swipeclock focuses on the SMB market and takes a two-tiered approach - selling turnkey solutions around applicant tracking, time & attendance tracking, & workforce scheduling; and providing those same capabilities as embedded APIs connecting to a number of other standard HR platforms. The nature of HR tech - tricky to get into an org but generally sticky - leads most players in the market to build & acquire ever-expanding platforms. Customers want ‘one-stop shopping’ for HR software and orgs like IRIS are glad to deliver.
Micro-Dyn Medical Systems receives investment from The Brydon Group
Overview: Micro-Dyn, a provider of healthcare claims pricing, grouping and editing software to over 150 healthcare entities has announced they’ve received a strategic investment from The Brydon Group. This new capital will be used to expand the executive, product and engineering teams, with Brydon partnering with experienced executives to acquire and operate businesses in software and business-to-business, government and healthcare services. Read more here.
Climb Comment: Brydon continues to expand on a thesis of ‘compliance software’ this time in healthcare. They’ll bring two experienced operators to the deal, both with McKinsey backgrounds, to partner with existing management. Brydon tends to take a hands-on approach to providing operators to new investments and often relies on a strong network of ex-military leaders. Micro-Dyn has a 20+ year history and a solid customer base - no doubt some additional capital & enhanced management will lead to strong growth in the coming years.
Article of the Week
Fascinating story here around Mithaq Capital’s takeover of The Children’s Place, a clothing designer with more than 500 stores across North America. The Children’s Place had faced a rough few years in the market and after a negative press release the stock free-fell. Mithaq stepped in and sewed up a controlling stake, on the open market, in about 3 days. Interesting to note that TCP directors did not take action to stop the takeover, but instead saw it as a window for shareholders to receive liquidity & save the cost & possible reputational damage of filing bankruptcy.
Read the full story here.
Thanks for following along & hope you found something useful or interesting.
All the best,
Nick