Amanda Tallman

Thanks, Elon. Private equity buyers have become increasingly important in the tech M&A world. Terminology varies, but their deals are essentially divided into platform deals which are new acquisitions that standalone when first bought, and bolt on deals which they buy to add to those platforms. Our Corum index has tracked the rise of platform deal volume over the course of the last five years from slightly over 200 to nearly 500 last year, a 25% surge just in 2018.

Despite this continued increase and heavy competition among private equity firms for both types of acquisition targets, the top PE buyers remained remarkably stable last year where median deal count rose from 16 in 2017 to 21 in 2018, a 31% increase.

In particular, the same four tech savvy PEs led the pack in volume. This to set the pace for a fourth straight year with Insight a close second, TA Associates and Thoma Bravo also held their positions. All four have ranked among the top six since 2015. Mid tier changes include the rise of Providence Equity from eighth to fifth place, bumping Francisco down a spot, and Accel KKR reappearing on the list after an absence in 2017.

Making their debuts were GI Partners with several real estate related tech bolt ons and longterm hold PE ESW Capital. There are hundreds more pes in the crowded ranks we track below these of course. Bolt ons among these top acquirers surged outnumbering platform deals 3.6 to one versus just 2.7 to one the prior year. Driven by large numbers of cash rich buyers chasing smaller acquisitions to inorganically accelerate platform growth plus fill gaps in tech and product lines.

Fairly at carefully targeted search for PEs with portfolio matches must be part of an optimal M&A process. As an example of this sort of accretion, the number six acquirer Francisco partners announced it's 800 million dollar purchase of secure access software from Bomgar in April. Then under half a year later bolted on privileged access management company BeyondTrust, expanding Bomgar into a 300 million dollar revenue security software company.

Private equity mega deals the total 106 billion in value encompassing all of our sectors with vertical leading in both volume and value. Some deals were done between PEs. For instance, KKR bought out BMC for reported 8.3 billion from a consortium of other PEs, setting the stage for future bolt on purchases.

And a few months later KKR divested Sedgwick's claims for 6.7 billion to the Carlyle Group, helping expand its insurance tech portfolio. Top PE acquisitions were dominated by enterprise sectors as disruption from cloud, SaaS and digital transformation provided opportunities to roll up critical mass in line with our platform effects trend.

Horizontal infrastructure in vertical showed the most increase in share with vertical surging to 45% from just 27% in 2017, driven also by other top tech trends like blue collar software. The vertical sub sectors of education, healthcare and government in particular saw notable deals, including government records management from Southtech Systems and legislative management from IQM2, both added by Vista equity to it's portfolio company Granicus.

The blue collar software trend impacted the horizontal sector as well. For instance, Providence Equity bought Corum client Exak Time, developer of workforce management solutions for the construction and field service industries to form it's new platform foundation Arcoro They then bolted on recruiting software specialist Birddog HR and payroll management player, Infinity HR, broadening the platform to help attract, manage and retain work force. And that's our look at the PE Tech M&A buyers in 2018. Back to you, Tim.

This is a segment from the February 2019 edition of the Tech M&A Monthly webcast "Private Equity Roundtable 2019." For more information on Tech M&A processes, opportunities and more, visit the Tech M&A Resource Center.