Midmarket Tech Mergers: Hot or Not?
Fewer midmarket technology mergers and acquisitions occurred in the first half of 2015 vs. the second half of 2014. But more deals are certainly brewing, according to a new report.
Most of the midmarket deals will transact in the deal range of US$10 million to US$250million, but there will also be significant traction in the US$251 million to US$500 million range, according to a new report called Mid-market: The Crux of North American M&A.
Midmarket deals made up over one-third of all North American M&A in 2014, the highest portion in four years, according to Mergermarket. And while 2015 hasn’t quite reached that level so far, figures are still ahead of 2013, the researcher said.
Some of the deals involve business unit sales rather than entire companies. A case in point: Apptix, the cloud and managed services provider (MSP), sold the majority of its direct public/multi-tenant cloud customer base to GoDaddy for $22.5 million earlier this month.
Apptix said it will use the money to fund organic growth and potential acquisitions — pushing deeper into the MSP market. GoDaddy, in turn, will migrate the acquired customers — mostly small business hosted Exchange customers — to Microsoft Office 365.
Meanwhile, SageNet – a managed network solutions provider – earlier this month acquired the cybersecurity division of IT consulting and staffing firm Turnberry Solutions, Inc. The acquisition bolsters SageNet’s Advanced Threat Protection and PCI compliance services with security strategy, assessments, audit and compliance, risk management, and managed security offerings, the companies said. Financial terms of the deal where not disclosed.