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- Climb's M&A Weekly: Deals by Thoma Bravo, Phenom and Altor
Climb's M&A Weekly: Deals by Thoma Bravo, Phenom and Altor
Thoma Bravo completes a $1.8B take private deal and Phenom continues to add to their talent experience platform portfolio
Nick @ Climb
July 07, 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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Thoma Bravo complete deal to take Everbridge private
Overview: Global software investment firm Thoma Bravo have completed their $1.8B deal to take Everbridge private. The Burlington, Massachusetts based company was founded in the aftermath of 9/11 and helps organizations anticipate, mitigate damage from, and respond to critical events. Their clients include multi-nationals across industries such as financial services, manufacturing, retail, transportation, energy and education, as well as national, state, and local government bodies and U.S. Federal agencies. Read more here.
Climb Comment: Everbridge generated just short of $500m in revenue in 2023 & ~$85m in adj ebitda (report here) — healthy multiples on both at a $1.8B valuation and worth noting that while topline was basically flat ‘22-’23 adjusted ebitda doubled over that time period. Solid setup here for Thoma Bravo to invest in growth while still returning substantial free cash.
This deal again highlights a theme we’re tracking in risk focused software, with Everbridge quantifying the savings and efficiencies that they pass to the end customer via their suite of critical event solutions.
OMERS and Almak Capital backed Phenom acquires Tydy
Overview: HR tech company Phenom continues to build out their intelligent talent experience platform portfolio, with Tydy becoming the 5th addition. Their tools for preboarding and onboarding employees helps talent acquisition and management teams streamline necessary steps such as background/compliance checks, documentation collection and setting up payroll to ensure a fast, transparent and easy experience for new hires. Read more here.
Climb Comment: Consolidation play in HR tech with Phenom offering a full suite of talent management & Tydy focusing on the pre-boarding and onboarding piece of the equation. Tydy’s LinkedIn shows 43 employees, mostly in India, and with that lean team they’re serving customers in 30+ countries & managing workflows for almost 200k end users. Presumable that many of these customers will migrate to the Phenom platform in addition to Phenom customers benefitting from onboarding modules.
PE firm Altor acquires majority stake of F24 from Hg Software
Overview: Altor have announced they’re acquiring a majority stake in business resilience software provider F24 from fellow investment firm Hg. The Munich based company provides solutions across areas such as emergency and mass notification, incident and crisis management, business messaging and general governance, risk and compliance to over 5,200 customers worldwide. It’s also unlikely that this will be the last we’ll hear of this deal, with Altor signaling intentions to supplement organic growing by acquiring local champions across Europe and further overseas. Read more here.
Climb Comment: Similar to Everbridge, mentioned above, F24 focus on resiliency and risk management for large enterprises and agencies. Hg invested in 2020 making this a tidy hold for them & F24 management reinvested into the deal. F24 offers a broad suite of risk solutions — ranging from scaled alerting systems that can notify thousands of workers about emergency situations to ‘lone worker’ safety tools which use smart hardware to keep workers safe when they are working solo in remote locations. Very useful set of products and growth opportunities abound due to wide aperture.
Teamworks announces deal to acquire ZoneIn
Overview: Teamworks is acquiring ZoneIn, a performance nutrition and meal planning software specifically designed for sports teams and performance centers. Based in North Carolina, Teamworks has established itself as a leader when it comes to providing enterprise SaaS solutions to the sports industry. This deal further reinforces that position, with their “Teamworks Nutrition” product already serving over 140 elite sports and tactical organizations worldwide. Read more here.
Climb Comment: Teamworks has really made a name in the high-performance athletics space, serving pro & collegiate teams with tech tools that manage athletes training & travel schedules and manage backend team operations. Here they add customers & tech focused on performance diet management, with tools for both prescriptive dietary guidance based on nutritional needs & logging tools for coaches, trainers, and athletes.
Expect to see Teamworks in the news in the next few weeks as the Olympics kick off, with Teamworks powering teams competing from around the globe.
Instructure Holdings acquires Scribbles from Alamar Partners
Overview: Based in Salt Lake City, Instructure Holdings (NYSE: INST) is a prominent edtech buyer and provider of a learning platform which aims to “power the delivery of education globally.” This deal sees them expand their platform’s credentialing and records management capabilities, with Scribbles providing these solutions to K-12 school districts across the US. Read more here.
Climb Comment: Instructure, a provider of LMS & assessment technology to K-12 and higher ed institutions, is majority owned by Thoma Bravo even after 2021 IPO and currently trades at a $3.6B market cap, just shy of 7x ‘23 revenue / ~21x ebitda. Sources say that KKR & Francisco Partners are placing competitive bids in the near term.
Scribbles focuses on enrollment and transfer solutions for the K-12 ecosystem and while ARR lift from this acquisition (35 person team) is likely not material in context of a potential buyout of Instructure - the strategic fit alongside Parchment, also recently acquired by Instructure, is quite strong and promises serious forward growth opportunities.
Article of the week
This week’s article comes in the form of a case study from Elliot Investment Management on Southwest Airlines, an investment which they describe as “the most compelling airline turnaround opportunity of the last two decades". Read the full breakdown on how they plan to re-establish Southwest as one of the industry’s leading airlines here - fascinating read for anyone interested in turnarounds, activist investing, or management science as it pertains to investing in general. Potentially tough scene for current management or anyone who enjoys open boarding - however, Southwest is looking to enact ‘poison pill’ anti-takeover measures.
Best wishes for the 3rd quarter and please do get in touch if we can help you plan for M&A coming into the second half of the year.
Thanks for following along & hope you found something useful or interesting.
All the best,
Nick