Review of the June 2020 HR Tech M&A and fundraising activity, update on HR Tech valuations and peer benchmarking, job market activity by country, and key highlights from earnings reports other operational updates.
Review of the May 2020 HR Tech M&A and fundraising activity, update on HR Tech public market valuations and peer benchmarking, job market activity by country and key highlights from earnings reports and outlook statements by listed HR Tech companies.
This market update looks at the April 2020 HR Tech M&A and fundraising activity, presents the latest HR Tech public market valuations, reviews the impact of COVID-19 on the job market (new jobs posted by country in April vs. previous 12 months), and summarises 1Q 2020 earnings reports and updated outlook for selected Core HR, Payroll & Benefits firms, Learning & Development businesses, Talent Acquisition platforms and Recruitment firms (permanent as well as temporary).
In this April 2020 update, Venero provides an economic review of the potential macroeconomic shock, the impact it may have on HR Tech / Future of Work businesses, and the implications for fundraising and M&A.
Much like in other industries, companies in the HR Tech space have seen a significant pullback in valuations compared to their February levels. This contraction in valuation multiples has impacted the HR Tech focused companies more than their diversified peers, with a 35% drop compared to 25% for Diversified HR Tech. HR Services, meanwhile, pulled back by 30% on average. 13 acquisitions were announced in March, in the US and Europe. This follows the transformational acquisition of Saba by Cornerstone, which is expected to trigger further consolidation in the space.
We are delighted to present our 2019 analysis of M&A and investment trends in the HR Tech sector. This is the second year in a row we release such a report, after the overwhelmingly positive reception of the inaugural publication.
Similar to last year, in this report we share some of the insights and observations we have gathered from working with companies and investors in the Human Capital Management space over the last 12 months. We review the most prevalent M&A and investment themes, analyse notable transactions and highlight the factors that are likely to drive corporate finance activity for HR Tech businesses going forward.
Below are the key takeaways. You can request the full report here.
Client Briefing Note:
Cybersecurity is a sector flush with fragmented technologies. M&A deal flow is underpinned by robust structural growth, transition to the Cloud, government regulations and sophisticated cyber breaches. In this context, small players with niche technologies are acquired by larger peers who need to expand their capabilities and scale their product offerings.
This briefing note looks at the main drivers of M&A activity in the cybersecurity space, reviews transaction volumes, the most active acquirers and trends such as vendor rationalization. It also explains the importance of an Advanced Security Operation Control as a driver for acquisitions and analyzes precedent transaction multiples and public trading valuations.
Most marketplaces are described using three primary characteristics: number of sides (1-sided, 2-sided, 3-sided or n-sided), geographic density and customer type (B2B, B2C, C2C). An element less frequently considered is "reciprocity". In this post we define "reciprocal marketplaces", explore their main properties and identify what is required to ensure their orderly function.
Client Briefing Note:
IBM’s announced acquisition of Red Hat in a deal with an enterprise value of roughly $34 billion at a hefty premium triggered a recovery in cloud stocks. The reason this particular transaction acted as such powerful a trigger is because it reinforced a pattern that the market has come to expect: transformational deals, outsized tech valuations and continued anxiety among the majors to remain competitive and perhaps even relevant.
This briefing note looks at the recent trends in 'cloud' M&A, the impact on acquisition valuation multiples and the expectations for further consolidation among cloud software companies in 2019.