Mid-Year Tech M&A Report: Merger Myths & Misperceptions

Mid-Year Tech M&A Report: Introduction

Bruce Milne:

Good morning, afternoon, or evening, wherever you are in the world. Welcome to Corum's Tech M&A Monthly webcast for July 2020. I'm Bruce Milne, CEO of the Corum Group, your host for today. Thank you for joining us for this special mid-year report. Please feel free to chime in with questions on the Q&A sidebar throughout the webcast. After the webcast, we'll make slides available for your reference on our website, and you can also reach out directly to info@corumgroup.com with additional questions or comments.

We'll start with a special announcement of COVID-19 and the current recession. Then, highlights from some of our recent deals, followed by a quick check-in with events. Then, we have a special report on some common myths and misperceptions about Tech M&A that are killing deals today. Then, we'll wrap up with our Global Tech M&A Report Mid-Year for 2020.

Special Announcement of COVID-19 and the Recession

Bruce Milne:

Now, let's get started. We're going to be getting into misperceptions later, but on the topic, let me address one that's concerning me a lot. And that's the CEO saying, "I am not worried about the recession." All while marching forward is that the economy is going to experience a quick bounce back. Is that you? 
Well, listen closely. We're seeing too much of this kind of thinking. It's a very dangerous misperception causing companies to put their heads in the sand and wait for normal to return. The days we went to visit our leads and clients, press the flesh, the economy bustling, orders flowing. Besides, there's a medical cure just around the corner, right? The problem is that even if there is a cure soon, that doesn't immediately reverse over 50 million layoffs in the United States alone, 42% of which, the Wall Street Journal says, won't be brought back into the workforce.

So, while this recession hasn't affected your bottom line, odds are it will. If ever there was a time to consider selling, it's now. And even if you don't accept an offer, it's prune to at least calibrate the market while buyers are active, value is strong, with a record amount of cash almost $4 trillion looking for deals. We've been here before, believe me. Corum is the only boutique investment bank. Like us, it's survived intact through every downdraft over the last 35 years. We have good instincts. We've tracked what happens. Experience shows that value has dropped 40% in the first 18 months because half of the buyers leave and that recession can take years to recover.

Look, we're only a few months into the recession. We don't know evaluations will be the same when we recover to the record levels we just experienced. It's unlikely.

The private firms going to market now are opening doors to all the companies that should know about them, improving their business model, and honing a strategy through the preparation research process. They're getting invaluable market insights and product feedback from contacts made, creating new value, increasing business alliances. That's all we need now, isn't it?
Any one of those benefits is worth the effort. Plus, they're getting offers for buyout and recapitalization, a lot of them. If you wait too long, your company will be struggling and buyers only pay a premium for healthy companies. Remember that. So, don't bet on the worst being over, or that the recession will be short. If you don't have the resource to make it through to the other side of the recession, then you need to partner with someone who does.

Bison Capital’s Recapitalization Investment in For The Record (FTR)

Bruce Milne:

Now, let's go back to the rest of our agenda starting with deal reports. Dan?

Daniel Bernstein:

I'm excited to announce Bison Capital's recapitalization investment of Corum client, For The Record, in a significant transaction in the legal tech space. Started in the early 90s, FTR Group is the world leader in digital court solutions, including capturing, accessing, and distributing court records.

FTR's technology is used in 62 countries around the world, including nearly two-thirds of all the courts in the United States. FTR builds several impressive tools, including their speech to text technology, which offers automated digital transcripts with a reported 90% accuracy. The Bison Capital's investment into FTR means access to a wealth of knowledge in the court solutions market and substantial move toward global growth in the sector.

I'm honored to have led For The Record through a process in which we found the perfect partner for the company in Bison. Corum played an essential role as the M&A advisor to this transaction, and congratulations to both Bison and FTR.

Altvia Solution’s Recapitalization Investment by Bow River

Daniel Bernstein:

Also, I'm excited to announce the recapitalization of Corum client, Altvia Solutions LLC, by Bow River Software Growth Equity Fund. Founded in 2006, Altvia is a trusted provider to over 40,000 investors and hundreds of private capital market firms.

The investment from Bow River will enable the company to accelerate growth, rapidly deliver on innovation within its product suite, and achieve its ambitious vision. We congratulate the entire Altvia team and Bow River on a fantastic partnership that will result in the company's accelerated growth across every dimension.

Bruce Milne:

Great job leading the deal, Dan. And thanks to Andy Hill, Arnaud Viviers, and Martin Lowrie who assisted. All of them former CEOs themselves, best negotiators in the world. And of course, the team involved making this happen -- our writers, Tzvi Kilov and Lorraine Goddard; research experts, Amber Stoner on the buyer's list and Yasmin Khodamoradi who prepared the valuations.

It's important to note, each client is assigned a five-member team, all leaders in their field from around the world. They prepare everything needed so the client can concentrate on running the business during this process. It's part of the Corum difference.

WFS Virtual Growth & Exit Strategy Conference - Singapore

Bruce Milne:

Now, let's go to our field reports, starting with Matt Rung at the WFS.

Matt Rung:

On July 14th, the WFS had an amazing Growth & Exit Strategies Conference virtually based in Singapore, Asia. We were joined by industry leaders in Tech M&A including Bob Hayward from Deloitte, James Tan of Quest Ventures, and Joseph Lee from Kairous Capital, just to name a few. We looked at leading disruptive tech trends in the M&A market, key valuation metrics, especially during the COVID-19 pandemic. In addition, we had great discussions with our panelists of investors, buyers, and sellers.

If you're interested in attending future events as a guest or even as a speaker, just head over to our website, wfs.com/conferences, for more information. Looking forward to seeing you guys online.

Bruce Milne:

Thanks, Matt. We're proud to be the Platinum Sponsor of your events. Good luck to the WFS team.

Special Report - Post COVID: Merger Myths & Misperceptions 

Bruce Milne:

Now, let's move on to our special report, Post COVID: Merger Myths & Misperceptions Killing Deals.

Corum Research Analyst:

Far too many CEOs and owners of software and IT companies put years, sometimes decades, into building their firm then don't get what they're worth or worse, they miss the tech M&A window altogether. In today's post COVID world, you can't do that. We may never see these valuations again. One of the main reasons they lose the opportunity for wealth is that they fall victim to a number of myths and misperceptions about the M&A process. Here are the top 10.

Myth #1: The valuation comes first. It’s critical.

Corum Research Analyst:

Number one: The valuation comes first, it's critical. Without a doubt, this may be one of the most deadly myths today that will prevent you from getting your optimal outcome. If you meet an investment banker or consultant that says he or she can whip up a valuation for your tech company, then take you to market, and get it, walk out immediately. They don't know what they are doing.

Buyers laugh at these valuations. Tech M&A is totally unique. It's about valuing intangibles. It's not like there's a book value as in other industries. The value is created by the process, a true global buyer search that creates an auction environment.

Valuations done too early can give sticker shock, eliminating good buyers before they get to know you. Or just the opposite, set low expectations when the market may well allow you to get a higher value due to trend alignment or competitive bidding. Valuations are not used as much today because of the strategic nature of acquisitions. If formal valuations are used, it's generally much later in the process -- when you know who the final bidders will be. Then you can factor how they value, what they've paid for similar acquisitions, how you might impact their strategic position and earnings. That's when you want the high ground in valuation negotiations. You want the firm that has done more valuations than anyone. The leading researcher, education, and valuation publisher on your side. That's Corum.

Myth #2: Companies are bought, not sold.

Corum Research Analyst:

Number two: companies are bought, not sold. This old myth is nonsense, more so today in the virtual world post COVID. This logic says, if you build it, they will come, but those of us who are entrepreneurs know that that doesn't work. You need marketing and sales. Same when you sell your company, you need to create buyer tension. The trouble is the believers of this myth are waiting for the phone to ring. The problem is if the phone does ring, all too often that caller is a bottom feeder dialing for deals, trying to lock you up into exclusive negotiations.

Don't wait for them to call. You need to get out there, control the process, talk to multiple bidders, and calibrate your true value. The world of buyers is far bigger than you know -- non-technology firms, strategic buyers, foreign buyers, financial buyers, search funds, family funds, holding companies. Indeed, 25% of the companies that we sell have never heard of their buyer.

Myth #3: Our financials are weak, we can’t sell. 

Corum Research Analyst:

Number three: our financials are weak, we can't sell. There was a time when this was true, not now. Even the smallest money-losing company with a negative balance sheet can sell. The reason is simple. Today, it's not about the financials. It's about the story. What you represent to the buyer's future with your technology edge, first mover user base, the domain expertise you've developed, your thought leadership properly presented, helps get you those high values you read about.

The buyers are smart. They don't expect young companies to have the brand name, distribution, and user base to be highly profitable. That's why you want to merge with a bigger partner in the first place. So, worry less about trying to spend your financials. Spend more time crafting the message, telling your story, creating that armor-piercing soundbite that will get buyers to pay attention to the opportunity your firm represents.

Myth #4: We have a buyer already!

Corum Research Analyst:

Number four: we have a buyer already. Talking to only one buyer is by far -- by far, the biggest mistake company owners make in tech M&A. Even if you have a buyer, how do you get the right price, right structure without the leverage from other bidders, or even make it through due diligence where up to 80% of the deals die. This is especially true post COVID because you don't have the advantage of a personal relationship, the bonds you build breaking bread together, the connective tissue that helps keep deals together.

The majority of companies we work with have been approached by a buyer. Some even have offers in hand. Having sold more tech companies than anyone, our experience shows consistently that 75% of the time, there was another firm that will end up buying you, not the first bidder. So, do a true global partner search. If you go through the process, creating an auction environment, even if the first bidder is the final buyer, the competitive tension created will generate a 48% better overall value. 48%. More importantly, you will have a much more optimal agreement, better structure, less liability, lower tax burden, and better employment and non-compete agreements. And a better integration plan for the employees that other investment banks ignore.

Talking to only one bidder is one mistake you may regret the rest of your life, the one that may lead you into court because your minority investors with the law on their side may say, "Why did you sell to the first buyer that came along, violating your fiduciary duty?"

Myth #5: We want to do a raise…then sell.

Corum Research Analyst:

Number five: we want to do a raise, then sell. It doesn't work. Once you raise money, you're out of the merger game for years, now diluted lower on the liquidation schedule. New investors will come in at a higher value and then expect to sell at an even much higher price to a major strategic buyer or fund. That's not going to happen, especially during difficult times. Post COVID, companies are imploding with down financing rounds, VCs less likely to invest, with much tougher terms if they do.
Remember what we said about the story? Buyers are still very active. If you have something you think they want, at least calibrate your value in the market before raising money for the long-term. You don't have to accept any offer, but you need to know where you stand.

Myth #6: We need to launch/update product…then sell.

Corum Research Analyst:

Number six: we need to launch, update product, then sell. This is keeping way too many firms from calibrating today's tech M&A market. Again, it's about the vision, your story. If the buyers like you, they will want to be involved in the updates or rollout of a new product. Think about it. On average, buyers can increase your prices a minimum of 20%. Moreover, they had the distribution, user bases, related products, and the marketing power, to really make a new product release fly as the next generation of technology.

Myth #7: We want to buy someone…then sell. 

Corum Research Analyst:

Number seven: we want to buy someone, then sell. Buying another company then trying to sell immediately can actually kill your deal. First off, it takes precious time. Second, a public company buyer has stricter compliance issues, including Sarbanes Oxley disclosure. Thus, they will likely have to redo the due diligence on the acquisition in order to please the regulators. Third, they may not have one of that company or asset you acquired, which can nix your deal or at a minimum, slow the transaction because of the higher liability.

If you believe you are the platform that will consolidate the market, a better merger strategy is to present that to buyers. Show them how you can grow market share and penetration by doing acquisitions once acquired. We've done this roll-up strategy many times in the US, Europe, and most recently, Asia, where the buyer actually saw a bigger value in the company we represented because of the expanded vision of market dominance through follow-on acquisition.

Myth #8: Buyers don’t want an intermediary.

Corum Research Analyst:

Number eight: buyers don't want an intermediary. This one is rooted in emotion, fear of upsetting your buyer. You worry they'll walk away. They may have even told you not to talk to others. Why do you think that is? Simple, they want to pay as little as possible. You're taking a weak stance with the mentality of placating the one bidder. Don't do that. After all, it's your company. An investment bank acting on your behalf can actually be a relief to buyers. They know you're serious and will be better prepared as most deals die in due diligence. They know you'll be guided through a well-run process with less chance of failure.

Remember, due diligence is expensive and time-consuming for them too. Most CEOs or founders are now well-versed in how to run a tech M&A process. They don't know what they don't know. This makes everything take longer during a deal. Further, it can get incredibly emotional and polarized. Not surprisingly, deal fatigue and CEO burnout are among the leading transaction killers, doubly true in the age of virtual mergers, where the selling CEO is used to personal interaction and negotiations which they can't do now. For this reason, the failure of self-run mergers went from 80% to over 90% post COVID.

In a virtual world, it's more important than ever who represents you. The buyer may not know you, but they should know your investment banker. The buyers know that Corum works with only a limited number of high-quality well-screened companies -- companies that we take through the best merger preparation in the industry.

As one major PE firm, who has done over a hundred million in transaction value with us recently told our client, "You're lucky you're working with Corum. They do the job right. Deals close."

Myth #9: I don’t want to go to market too early.

Corum Research Analyst:

Number nine: I don't want to go to market too early. Baron von Rothschild in France, the richest man in the world at the time, was quoted as saying, "I made my fortune by always selling too early." The same is true today. Today, with a record number of buyers and a record amount of cash -- over $4 trillion -- everyone is scrambling to see the next company or at least know of them as soon as possible. Trends can be very fast-moving. If you wait, you may miss the window and your value will plummet.

For example, those of you who have attended the Merge Briefing, know we have a case study of two competitors: one American and another French. The earlier seller hit the market right, at the peak and sold for a multiple of six times sales. The other dally, missed the window and sold for only 0.6 times sales, a 10-time multiple difference. The latter one missed the window, which some of you are going to do if you try to hunker down, ride out the current recession.

Myth #10: Our timeframe wasn’t to sell now.

Corum Research Analyst:

Number 10: our timeframe wasn't to sell now. Remember, timing is everything in tech M&A. We see this attitude of a fixed timeframe more outside of the US, in Europe and Asia, where they are following a dated model of doing a raise, a bit of growth, another raise, more growth, et cetera. The market doesn't care what your personal strategy is, thus you need to listen. Pivot strategy if necessary, always reconsidering if the time is right.

You can't control timing. If you start to see deals happening in your sector, or you get approached by a buyer, pay attention. That's often a sign of consolidation. Don't fall into the trap of thinking things will be better if you wait a few more years. The reality is that your market may have consolidated by then. You could be the last private company competing against well-funded public competitors. Forget about getting that high valuation, all-cash deal. There probably isn't even a buyer then.

Don't fall into merger myths and misperception traps that have you dealing with only one buyer or missing the market. It's about the right story to the right person and the right buyer at the right time. The most important transaction of your life, for you and your family, deserves the same level of focus and attention you put into building your company. So, do it right.

Bruce Milne:

Good stuff. Something for all of us to pay serious attention to.

July 2020 Tech M&A Report: Public Markets and Corum Index

Bruce Milne:

Finally, let's go to our research team for our Tech M&A Market Research Report covering all six sectors and 30 sub-sectors.

Corum Research Analyst:

We begin with the public markets where S&P Tech and NASDAQ renewed record highs in June after the sharpest bear market drop in history in March. While the Dow is still struggling with the new economic reality, European indices fell hard in H1 coping with the pandemic as did Asian markets, which suffered early in the year, which show signs of recovery. While this window of opportunity lasts, we advise you to start an M&A process to at least calibrate your company's value.

Our Corum index shows nearly identical tech M&A deal volume to H1 last year, but with fewer and smaller megadeals. PEs and VCs felt the pinch too, finding fewer platform plays and exit opportunities.

H1 2020 - Tech M&A Megadeals

Corum Research Analyst:

Megadeal distribution in 2020 reflects the M&A focus shifting to Internet as COVID-19 continues to transform the business world. The IT Services sector had the fewest megadeals, but we did see Bain Capital paid $1.8 billion for Rome-based IT firm, Engineering, adding a fourth company to its Italian portfolio.

In Consumer, Turkey's Peak Games was bought for $1.8 billion by Zynga, marking its biggest acquisition ever. In the Internet sector, consumer finance company, Credit Karma, was purchased for $7 billion at 7 times revenue by Intuit in its biggest acquisition to date.

In Infrastructure, machine vision specialist, ISRA VISION, was bought for $1.3 billion at 7.1 times revenue by industrial equipment manufacturer, Atlas Copco, strengthening its focus on industrial automation.

In Vertical, fintech network, Plaid, was bought for $5.3 billion by Visa as the credit card giant seeks to reposition itself as a leader in the new wave of payments and financial services.

Finally, in Horizontal, point of sale systems provider, Ingenico, was acquired for $9 billion at almost 3 times sales by Atos spin-out, Worldline.

July Tech M&A Report: Top Strategic Acquirers

Corum Research Analyst:

Looking now at all six sectors, we see sales ratios returning to their usual rankings with Consumer soaring to record highs. It was highest in EBITDA valuations too while other areas continue to recover from the dramatic fall in Q1. This year, buy-and-hold model pioneer, Constellation Software, made even more purchases beating its own 2019 record with 42 acquisitions across its deep structure of subsidiaries in sectors like Healthcare, Education, Real Estate and even Fashion.

Our list of top strategic acquirers still led by Accenture, continued to shrink as did the total number of deals, as buyers tried to adapt to a new era in the M&A market.

Horizontal Deal Spotlight: HR, Business Intelligence & SCM 

Corum Research Analyst:

Next, we dive deeper into our six sectors, starting with Horizontal.

Sales and EBITDA multiples recovered to their February levels and most subsectors showed a slight increase as well. In HR, Cornerstone OnDemand spent $1.4 billion on enterprise learning management company, Saba. Paris-based AI talent matching startup, Crafty, was purchased by workforce management SaaS provider, Talentsoft. And talent acquisition platform, ROIKOI, was sold to staffing firm, Terminal, to improve its remote recruitment abilities.

In the customer relationship management field, industry-specific CRM SaaS, Vlocity, was bought for $1.3 billion by Salesforce, as it expands its platforms offerings.

In the business intelligence subsector, anti-money laundering provider, Regulatory DataCorp, was acquired for $700 million at 10 times revenue by risk analysis research services provider, Moody's, for its AI screening solution.

In SCM, Israeli supply chain analytics startup, Optimal+, was acquired for $365 million at 7.2 times revenue by National Instruments, to strengthen its data analytics capabilities. And AI-enabled spend analytics company, Orpheus, was bought by management consulting firm, McKinsey, to beef up its digital procurement practice.

As video conferencing became a must-have during the pandemic, conferencing SaaS platform, BlueJeans, was wrapped up by Verizon, building up a video strategy on its burgeoning 5G platform.

Vertical Deal Spotlight: A/E/C, Simulation, Automotive, & FinTech

Corum Research Analyst:

Vertical sales and EBITDA multiples have both recovered nearing January levels. Real estate sales metrics demonstrated the steepest rise while other sectors remained steady. Starting with a megadeal in the A/E/C sector, German construction software firm, RIB Software, was acquired for $1.4 billion at nearly 7 times revenue by Schneider Electric, which seeks to strengthen its expertise in smart and carbon-free buildings. Among other A/E/C deals, Bentley Systems bought voice-based site automation developer, NoteVault and construction information management firm, GroupBC.

In the simulation space, photonics design company, Lumerical, was pocketed by ANSYS, to extend its reach in 5G, industrial IoT, and autonomous vehicles. And electromechanical CAE software provider, Romax Technology, was purchased by Hexagon, to enhance its smart factory solutions.

In the automotive arena, self-driving car startup, Zoox, was acquired for a reported $1.2 billion by Amazon, in a move that could help it compete with ride-hailing and food delivery companies such as Google's Waymo and Uber. And vehicle diagnostic systems-maker, AutoEnginuity, was bought for $20 million and 5 times revenue by its rival, Drew Technologies.

In fintech, banking and payments platform, Galileo, was acquired for $1.2 billion at 12 times revenue by consumer financial services platform, SoFi, adding a B2B component to its finance suite. And real-time financial data aggregation service, Finicity, was scooped up for $825 million by MasterCard, to strengthen its open banking platform.

Vertical Deal Spotlight: FinTech, Healthcare, Consumer

Corum Research Analyst:

Steady deal flow in the healthcare space continued as Change Healthcare rolled up two pharma tech companies totaling more than $400 million -- outpatient pharmacy management SaaS, PDX, and real-time e-prescribing toolsmaker, eRx Network.

AI health risk prediction SaaS, Staple Health, was purchased by care coordination platform, Unite Us, to wrap up its predictive analytics capabilities. And preventative health monitoring platform, healthIO, was acquired by Seattle-based actuarial and consulting firm, Milliman, to combine its predictive capabilities with healthIO's preventive health technology.

In telehealth, InTouch Health was purchased for $600 million at 7.5 times revenue by Teladoc, to expand its presence in hospitals and retail pharmacies.

In the consumer market, both sales and EBITDA valuations hit an all-time record. Casual Gaming saw the highest multiples, while deal flow in this space continued as multiplayer games studio, Come2Play, was grabbed by digital games developer, SciPlay, to enter the fast-growing casual gaming segment. And mobile game developer, Candywriter, was acquired for nearly $75 million by Sweden-based, Stillfront Group.

Tech giants dove headfirst into virtual reality as AR glasses company, North, was snatched up by Google. VR game studio, Ready at Dawn, was purchased by Facebook-owned, Oculus. In virtual reality events startup, NextVR, was pocketed by Apple. Swiss live casino solutions provider, Evolution Gaming, acquired gaming systems company, NetEnt, for $2.2 billion at almost 12 times revenue to expand its product offering and strengthen its US presence. And Bragg Gaming Group divested its media division to London-based sports digital media specialists, Snack Media, as it seeks to become one of the largest sports media web platforms in the UK and on Facebook.

In streaming, Walmart sold its on-demand video service, Vudu, to movie ticketing company, Fandango, which plans to scale its video rental business to better compete against Amazon and iTunes. And ad-supported streaming service, Tubi, was purchased for $440 million by Fox to compete in the streaming wars. Sports podcast platform, The Ringer, was purchased by Spotify, as it seeks to drive growth through podcasts.

In the consumer health space, therapeutic app, My Pain Sensei, was sold for $30 million to functional genomics provider, The DNA Company, to create a new consumer platform for managing chronic conditions, including COVID-19. And digital health company, CareZone, sold its prescription technology to Walmart, which seeks to stay abreast of Amazon in the pharmacy space.

Tech M&A Deals: Infrastructure, ID & Access Management, IoT

Corum Research Analyst:

Sales multiples in the infrastructure sector are back to levels seen late last year. The endpoint subsector saw record growth in sales multiples as remote working took off globally this year.

In the security world, anti-malware research pioneer, Lastline, was acquired by VMware to improve its network-centric threat research and behavioral analysis. And cybersecurity software developer, Avira, was bought for $180 million by PE firm, Investcorp Technology Partners.

In the ID and access management space, enterprise authentication specialist, PistolStar, was purchased by biometric software provider, BIO-key, to enhance its multifactor authentication capabilities. And identity startup, Idaptive, was acquired for $70 million by Israeli cybersecurity company, CyberArk.

We saw several cross-border deals in the ALM subsector as Belgian configuration management startup, Sweagle, was bought by ServiceNow. Bulgarian enterprise-grade add-ons maker, Botron Software, was nabbed by Atlassian specialist, Appfire. And in Israel, AI-powered continuous quality provider, Experitest, was acquired by enterprise software developer, Digital.ai.

The IoT software trend continues to drive deals as IoT cybersecurity startup, CyberX, was bought by Microsoft, boosting Azure IoT security. And here in Seattle, edge-focused startup, Xnor.ai, was bought for a reported $200 million by Apple.

In the network management subsector, router-based online parental controls developer, Router Limits, was acquired by online children's safety service, Bark Technologies, to compliment its AI powered monitoring technology. Lastly, AI-powered network analytics startup, Nyansa, was purchased by VMware to boost its software-defined networking technology.

Tech M&A Deals: Food, Sports & Fitness, Travel & Leisure

Corum Research Analyst:

Both sales and EBITDA metrics in Internet returned to pre-market dropdown values, with the e-commerce and travel subsectors showing the sharpest rise in sales multiples. Online food ordering services continued to consolidate as Grubhub was acquired for $7.1 billion by Just Eat, beating Uber to the punch.

Delivery.com rolled up two restaurant food delivery services, Doorbell Dining and OnTheGoDelivery.com. And in Japan, Demae-Can was acquired for $271 million by South Korea's top search portal, Naver.

In sports and fitness, interactive fitness system, Mirror, was acquired for $500 million by Lululemon to capitalize on the demand for home fitness as their core customers avoid gyms.

In travel and leisure, Vienna-based restaurant platform, Delinski, was bought by TripAdvisor's subsidiary, Lafourchette, to consolidate its business in Austria and Germany. In Latin America, travel marketplace, BestDay Travel, was purchased for $56.5 million by Argentinian online travel company, Despegar, to continue its expansion into Mexico.

July Tech M&A Report: Social Networks, eLearning, Digital Lending, Classifieds

Corum Research Analyst:

In social networks, dating mobile app, Grindr, was sold by its Chinese owner, Beijing Kunlun Tech, for over $600 million to San Vicente Acquisition Partners, a year after US regulators pressed for disposal over international security concerns. And The Meet Group was bought for more than $500 million at 2.5 times revenue by technology portfolio investor, NuCom Group.

In eLearning, online math tutoring service, Mathway, was acquired for $100 million and 7.7 times revenue by Chegg. And Chinese online training services provider, Linstitute, was acquired by education services company, Bright Scholar Education to tap into the online training market.

Digital lender, Radius Bancorp, was bought for $185 million by online lending marketplace, LendingClub, marking its first fintech acquisition. Online brokerage, E*TRADE, was acquired for $13 billion at nearly 5 times revenue by Morgan Stanley in the biggest tech acquisition by a Wall Street firm since the global financial crisis. Similarly, Goldman Sachs acquired online brokerage service, Folio Financial, to cater to smaller retail investors.

In the classified space, letgo's US-based business was bought by OfferUp, increasing their footprint to 20 million users.

IT Services Tech M&A Deals

Corum Research Analyst:

Valuations for IT services companies in both developed and emerging markets have spent the first half of the year recovering from the dip in March. Across both subsectors, the ongoing M&A of vertical industry specialists continues. For example, in the government services subsector, Unisys Federal Assets were sold for $1.2 billion to tech integrator, SAIC, in its quest to becoming a leading IT modernization provider in the government services market.

And IT solutions contractor, Enterprise Information Services, was purchased by healthcare consulting and tech solutions provider, Cognosante, continuing its expansion into the federal market.

In healthcare IT services, healthcare marketing and technology consulting firm, MedTouch, was acquired by digital consulting firm, Perficient.

Ecosystem specific system integrators were also in demand as AWS specialist, Privo, was bought by managed cloud service provider, NaviSite. And Century Park Capital Partners snapped up two Oracle specialists, Accelalpha and Prolog Partners.

Microsoft-focused ERP and CRM systems integrator, Information Strategies, was purchased by ERP SaaS, Sylogist, extending its reach in public sector. And salesforce integration firm, Simplus, was bought for $200 million at three times revenue by Infosys to expand its salesforce consulting arm.

CyberSecurity Tech M&A Deals

Corum Research Analyst:
In the security services domain, mission enabling technology provider, Excivity, was purchased by defense focused technology firm, AEgis Technologies. And Egypt-based cybersecurity services company, SecureMisr, was bought by its American peer, Cysiv, to extend its reach in the Middle East and North Africa.

Our number one acquirer, services giant, Accenture, paid $139 million for cybersecurity consultant, Context Information Security, and other security specialists such as Revolutionary Security and Broadcom's Symantec business among its 19 acquisitions overall.

And just last week, after failing to acquire Grubhub, Uber spent $2.6 billion on restaurant meal delivery startup, Postmates, to boost its food delivery business. And that's our mid-year report.

Bruce Milne:

Thank you to our research team. Great job as always. It's good to see so many familiar names like Salesforce, IBM, Google, Microsoft -- firms who are in our luminary panel for annual report. It's amazing what a buying juggernaut Accenture has become. Benoit Junique from Accenture was recently a guest speaker at the WFS Growth & Exit Strategies for Europe Conference, just last month.

Constellation, the most active strategic buyer in the world, acquired Minemax most recently. And of course, the myriad of PE firms doing bolt-ons. What a blistering pace they're setting.

That brings us to the end of this Tech M&A Monthly. Thanks for joining us. We look forward to seeing you again next month. Stay tuned to find out how to get in touch.