WFS London 2018 Report

Recently, we had the pleasure of sponsoring our 14th  Annual Growth & Exits Strategies conference in London with the World Financial Symposiums (We even mentioned it in the Q3 Tech M&A Monthly). Over 200 European delegates from financial and technology sectors met and discussed critical topics surrounding maximizing enterprise value, growth, and exit options – whether through investment, buyout, IPO sale, and merger.

This was one of the most comprehensive events we’ve had the privilege of sponsoring. The level of panelists and speakers made for a very interesting and informative day.  With speakers and delegates from 19 countries, the networking and exchange of ideas and viewpoints were particularly thought-provoking and productive. We had panels covering venture capital, private equity, strategic buyers, and sellers, who recently exited their companies. As well as presentations concerning GDPR, the Top Ten Disruptive Tech Trends and What’s Driving Valuations, as well as What Are You Worth and How Do You Get It!

 

 

 

One of the highlights of this conference is the ability of the audience to ask the panelists questions during their sessions.

 

 

 

The speakers were all in agreement that valuations are high, this is one of the best times for funding and exits.  

 

 

 

Venture capitalists are actively providing growth capital, private equity and strategic investors are competitively looking for new acquisitions.

 

 

 

Corporate Development Executives from Accenture, Cisco Investments, and IFS shared their acquisition strategies and gave insight into some of the key criteria they look for while engaging with a potential seller. It was interesting to learn that gaining internal agreement to move forward with a transaction was one of the most time-consuming parts of the process.

 

Once the buyers’ team makes a decision to move forward with a deal, most reported a period of 6-8 weeks to go through Due Diligence and 2-4 weeks to complete the SPA. All speakers on this panel agreed that integration is a crucial part of the process and that they have their own dedicated integration teams to maneuver through this key phase. Though each buyer had variations in their integration process, there was a consensus that one of the first areas to get integrated is the sales and marketing portion of the business.

 

 

 

The Private Equity Panel was comprised of speakers from Battery Ventures, HgCapital, and STG Partners (formerly Symphony Technology Partners). This panel all agreed that it’s currently a “sellers’ market,” valuations are high especially for areas like AI.

 

 

 

We listened to an interesting keynote “Inside the recent Genhom Acquisition” which closed May 2018. On stage was the buyer (Agilent Technologies – US-based – leader in life sciences, diagnostics and applied chemical markets), seller (Genohm – Switzerland-based – Lab Data Automation Software Company) and M&A Advisor (Corum Group Intl.) as they discussed this transaction from all three perspectives. All were in agreeance that from the start they could see a good fit and synergy between the two firms. However, as the M&A process wore on, some deal fatigue set in and towards the end there was disagreement with some small points of the final terms. Having an experienced M&A advisor was key in keeping the deal on track and filtering some of the emotions which built up from both sides. They were able to work through these issues and find a solution that was good for both sides and ultimately consummate a successful transaction. Both teams are now working together in the final integration phase of the process.

 

Similarly, Former-CEO of Every Angle, Fred Hermans shared his story of selling his company to Magnitude in June this year. Every Angle provides Self-Service Operational Analytics Platform for SAP (based in the Netherlands) and Magnitude Software is a leader in unified application data management across industries and enterprise platforms, including SAP (US-based). Fred Hermans stated, “We are excited about joining Magnitude as it will provide both companies the opportunity to accelerate global expansion while offering SAP customers an unmatched unified application data management portfolio including an agile analytics suite." He went on to state “We share a vision of simplifying the access to and analysis of data from ERP systems that will allow our customers to increase the business value they realize with these systems.”

 

The London Stock Exchange addressed the most common misconceptions surrounding IPOs and the growth in the European market. 

 

 

 

In conclusion, while the M&A outlook is strong, many of our fellow speakers and delegates questioned the “legs” of this present M&A rally. Regarding the timing-related question, we do strongly suggest that companies and investors considering an exit in the next two or three years look very closely at the dynamics of their specific market segment today.

 

From Corum’s perspective, 2018 has been a record year for transactions, there is considerable pent-up demand for acquisitions. Beyond that, we have clearly seen a significant increase in valuations, a trend towards cash transactions and favorable structures for sellers.

 

Posted by , Director, European Operations on 16 October 2018
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