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January 09 Issue |
Software M&A Insights: An Active 4Q08 |
By Ken Bender, Managing Director and Kris Beible, Analyst – Software Equity Group, LLC
Amid heightened economic uncertainty, M&A software buyers continued to
remain active in 4Q08, but focused on smaller transactions. Deals highlighted
this month include Autodesk’s acquisition of ALGOR, a leading provider of
analysis and simulation software for mechanical engineers; ECI Partners
leveraged buy-out of Ascribe Plc, a UK-based provider of healthcare management
applications, and Experian’s acquisition of healthcare payment prediction data
and analytics software provider SearchAmerica.
Autodesk (NASDAQ: ADSK) Acquires ALGOR
Category: Computer Aided Engineering Software
Purchase Price: $34,000,000
Payment Terms: Cash
SEG’s Perspective:
Computer-aided design and engineering software leader, Autodesk, acquires ALGOR,
a leading provider of analysis and simulation software for mechanical engineers.
ALGOR provides new advanced simulation functionality to Autodesk’s finite
element analysis offering, mechanical event simulation, computational fluid
dynamics, coupled fluid flow, thermal, piping and electrostatic analysis, as
well as builds on Autodesk’s recent purchases of simulation and analysis vendors
Moldflow ($190 millionEV, 3.1xEV TTM revenue) and PlassoTech. ALGOR follows
acquisitions of BIM World, Logimetrix and Softimage ($35 million) in 4Q08 and is
Autodesk’s 13th acquisition in 2008.
ECI Partners Acquires Ascribe Plc (AIM: ASP)
Category: Healthcare Software
Purchase Price: $48,880,000EV
Seller Revenue (TTM): $26,810,000
Seller EBITDA (TTM): $7,320,000
Revenue Multiple (TTM): 1.8x EV
EBITDA Multiple (TTM): 6.7x EV
Payment Terms: Cash
SEG’s Perspective:
Middle-market private equity firm ECI Partners, acquires Ascribe Plc, a UK-based
provider of healthcare management applications. Ascribe provides ECI partners a
platform acquisition within the healthcare vertical (Ascribe counts 50% of UK
hospitals as customers) and a strong management track record of inorganic growth
success from which to expand upon. Ascribe management successfully acquired and
integrated 8 strategic acquisitions since going public in late 2004, while
concurrently increasing top and bottom line figures each consecutive year. The
28 pence per share offer represents a 12 percent premium to Ascribe’s
pre-announcement last day closing stock price.
Experian (LSE: EXPN) Acquires SearchAmerica
Category: Healthcare Payment Prediction Software
Purchase Price: $90,000,000
Revenue (TTM): $17,000,000 (estimate)
Revenue Multiple (TTM): 5.3x (estimate)
Payment Terms: Cash
SEG’s Perspective:
Credit reporting bureau Experian, acquires SearchAmerica, a leading provider of
payment prediction data and analytics software to the U.S. healthcare industry.
The acquisition provides Experian entry into the healthcare industry, alongside
major credit reporting bureau’s Equifax and TransUnion and will enable Experian
to use data and analytics capabilities to help healthcare providers manage
billings and cash flow. SearchAmerica brings approximately 200 clients and 500
hospital facilities, a three-year CAGR greater than 20% and high recurring
revenue. SearchAmerica follows 2008 acquisitions of credit and risk management
software providers KreditInform and DP Information Group.
Software Equity Group is an investment bank and M&A advisory
serving the software and technology sectors. Founded in 1992, the firm has
represented and guided private companies throughout the United States and
Canada, as well as Europe, Asia Pacific, Africa and Israel. They have advised
public companies listed on the NASDAQ, NYSE, American, Toronto, London and
Euronext exchanges. Software Equity Group also represents several of the world's
leading private equity firms. They were recently ranked among the top ten
investment banks worldwide for application software mergers and acquisitions.
For more, please visit
www.softwareequity.com.
 
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