M&A Round Up – Late Spring 2024

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M&A Roudup

M&A Round Up – Late Spring 2024

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New faces, lots of small deals, strategic investments, and change seem to be the order of the day as we move into Summer.

If you were to look at the headlines in the tech press it would be easy to think that not much is happening on the M&A front. Private equity investment in enterprise software was down to a four year low in 2023, IPOs are few and far between and startups are struggling to raise new rounds of investment. But look a little deeper and you will find a very active market. For sure many of the deals from the past couple of months we have listed are small – but they are indicative of current trends. For example, note the focus on AI and Accounts Payable. AI deals may not be surprising as everyone is getting on the AI bandwagon, but something as seemingly as well established as accounts payable suggests that what many thought of as a mature market continues to grow. New faces, lots of small deals, strategic investments and change seem to be the order of the day as we move into Summer.

So, without any further preamble, here is our list of deals. As always, there are likely many we have missed, as this is written to be informative and to provide guidance, not a granular recording of all relevant transactions.

  • A company we have known in various corporate configurations over the years is SER, they have been around since the start of information management (founded in 1984), and were one of the very first to engage with AI/ML with their acquisition (over 20 years ago) of East German company Brainware (now a part of Hyland). However, in March they announced a strategic investment from TA Associates who now join Carlyle as major backers of the firm. We will be watching with interest where how this new investment manifests itself over the coming year.
  • Another vendor we know well at Deep Analysis is FileCloud. This past month, it acquired Canadian-based Signority, an e-signature and workflow vendor. This acquisition comes after considerable yet positive change and investment at FileCloud and could be a sign of more expansion to come.
  • Interestingly DocuSign announced it is acquiring Lexion for $165m in cash. Lexion will provide AI-powered agreement management for the DocuSign portfolio. A few years back DocuSign acquired contracts management firm Seal Software, and this latest deal continues its quest to expand into broader document processes beyond the core digital signature component.
  • New York-based Caso Document Management has been busy recently acquiring Stars Information Solutions, a Texas-based scanning service, and forging a strategic partnership with credit union application vendor Correlation.
  • Georgia-based Secure Records Solutions (SRS) merged with fellow Georgia company RMC Record Management Center – the sixth such deal it has closed.
  • Hyderabad-based Cignit Technologies, the digital assurance specialist, acquired Aparaa Digital, an AI/Blockchain and Analytics services firm.
  • Boston-based investment firm Battery Ventures acquired long-standing Canadian company TrueContext (formerly ProntoForms), the field services workflow company.
  • UK-based software titan Access Group acquired accounts payable automation vendor Lightyear.
  • Canadian-based printer and software company NextGen Automation acquired its local competitor, Corporate Business Solutions (CBS).
  • The German company XSuite Group acquired accounts payable vendor and fellow German firm Tangro.
  • Accounts payable is the theme of the quarter as corporate payments firm Corplay (S&P500) acquired AP provider Paymerang.
  • Best known for its MFP hardware business, Japanese giant Ricoh took another step into the software world through Ricoh-owned DocuWare by acquiring Germany-based IDP and AI vendor natif.ai.
  • Indianapolis-based Document Mountain acquired Maryland-based Medimicro (MEDI), the document management solution company.
  • Access Information Management boosted its EHR (electronic healthcare records) business by acquiring Kentucky-based Triyam.
  • Wipro ventures invested in Generative AI firm Kognitos (Series A), which led Wipro, the services company (and my ex-employer), to partner with them on major transformation projects.
  • In terms of Generative AI, EY in Canada acquired fellow Canadian firm Nuvalence. The Nuvalence deal brings over 140 AI-focused staff to North America, boosting EY’s ambitions in this area.
  • And yes, even more AI-related news as Santa Clara-based VC-backed AI company DataStax (raised $342m to date) made its sixth acquisition, this time of Langflow, which brings the ability to accelerate the speed of building and deploying RAG (retrieval augmented generation) projects.
  • (Not to be confused with Datastack!) Databricks, now at Series I, having raised a staggering $4B, acquired Boston-based LLM startup Lilac. This is Databrick’s ninth acquisition, five coming in the past year alone.
  • Founded in 2007, Cambridge Semantics (providing a semantic layer to data) was acquired by Nasdaq-listed Altair, making this their thirty-first acquisition to date.
  • Yet another AI deal involved Florida-based Accilerate, the managed services provider, buying Revelation.AI, a platinum Salesforce partner.
  • And our friends in Finland over at Workfellow found a home within ProcessMaker.

As so many firms in the Information Automation and Management sector are privately owned, or part of a larger private equity portfolio financial results that give a clear indication of market trends are a bit thin on the ground. But it is worth noting a few recent quarterly results that provide signs of encouragement. Box exceeded Q1 forecasts posting an impressive $264.66m for the quarter up significantly on the previous year. OpenText (working on a different financial calendar) are projecting to investors that they expect revenues for 2024 to be $5.3B (not all of this revenue is related to Information Management & Automation) and appear to be growing strong. And Salesforce (a company that only recently entered the IDP market) reported revenues of just over $9B for the quarter, though it missed analyst expectations, any firm as big as this entering our market represents a significant and potentially disruptive year or two ahead. Add to this the fact that Microsoft appears to be on a tear with revenue in its productive and business process group coming in at $19.6B for the last quarter an increase of 12% year on year. In summary and to mangle an old quote “There is clearly gold in them thar (Information & Automation Management) hills!

Much of our work at Deep Analysis involves finding and defining new markets, partners and opportunities for our clients. So, if you found this blog interesting, spotted any we missed, or fancy a chat to see how we may be able to help you, then remember, our door is always open.

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