Welcome to the Fourth Edition of Axial’s Lower Middle Market Digest, your source of news and deal announcements featuring boutique investment banks, family offices, private equity-backed portfolio companies, and lower middle market businesses.
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Technology is no longer the exclusive poster child of the Venture Capital community. In the last year, traditional private equity firms and corporate buyers have hopped on the bandwagon, investing heavily in the space.
Solganick & Co. is an Axial investment banking firm focused exclusively on the broader technology industry (and also a Top 20 firm from our Q1 investment banking league tables).
Software represented 47% of all M&A in Q1. This is an 11% increase from software’s share of M&A in 2018 of 36%.
106 Ed-tech deals closed in Q1 2019, compared with 45 in Q1 of last year – a 235% YoY increase. The increase has primarily come from strategic buyers focusing more on acquiring technology companies to stay competitive, and PE firms diversifying their capital offerings by engaging in minority equity deals in light of the increasing competition in M&A.
When you compare Q2 2018 figures with figures from Q1 2019 – the largest and second largest months in terms of dollar volume over the last 6 quarters respectively – Q1 2019 achieved 87% of Q2 ‘18’s dollar volume, but did so in 230% more transactions.
The Takeaways?
Buyers are increasingly doing smaller deals, at a more frequent pace than previous years.
Buyers are targeting vertical-specific technology companies to provide offerings to specific segments and new customer bases.
We saw a host of closed transactions this past May that spoke to this trend:
Great Point Partners completed a growth equity investment in Axiom Real-Time Metrics, a premier provider of unified eClinical solutions and services that are used to enhance the efficiency of clinical trials and observational studies.
Tendril, the leading provider of AI-powered utility customer experience and DSM solutions Acquires EnergySavvy, the leader in personalized utility customer engagement.
TABS Analytics, a technology-enabled analytics firm, acquired Decision Insight, a Kansas City, Mo. based global marketing research and analytics firm with expertise in both brick-and-mortar and online shopping environments.
26 new buy-side firms and 47 sell-side firms joined the Axial network this past May.
Highlights included:
Family Offices: W3 Capital, Carlin Capital, Northern Rock USA
PE firms: Kriya Capital, WestRock Investments, Sciens Capital Management
Corporations: TPG Plastics LLC, Residential Care Management, ConservGeo Corp.
Investment Banks: Bluejay Advisors, Paramax Corporation, Flatirons Capital
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LFM Capital Announces Operating Partner Addition. Read More
SFW Capital Partners Adds Terry Kelly as Operating Partner. Read More
Mary D’Souza, Former Managing Director at GE Capital, Joins Star Mountain as a Senior Advisor. Read More
Stonehenge Capital promotes Whitney LaNasa to Managing Director. Read More
Deal News from Sell-Side Members
Auctus Capital Partners Supports Limitless Creative through Strategic Expansion, Secures Capital from Fifth Third Bank for New Headquarters Building. Read More
Marlin & Associates Advises TABS Analytics on its Acquisition of Decision Insight. Read More
Bundy Group Advises Dorsett Technologies, a Controls & Automation Industrial Technology Firm, om a Sale to MC Controls and Midwest Mezzanine Funds. Read More
ACT Capital Advisors Assists Northend Truck Equipment in its Acquisition by OSW Equipment & Repair. Read More
Grand Rapids, MI-Based Pipeline Products Distribution Company, Power Supply, Inc. Acquired. Calder Capital served as the exclusive M&A Advisor to Power Supply. Read More
Climate Pros Has Acquired Norfoxx Refrigeration. Statesman Corporate Finance served as the exclusive financial advisor to Norfoxx. Read More
Plethora Businesses Represents Shareholders in the Sale of Premiere Packaging Industries. Read More
Airkem Professional Products of Philadelphia has been acquired by General Chemical and Supply, Inc. Everingham & Kerr acted as the exclusive financial advisor for Airkem. Read More
Jacobs Marketing Group Acquired by NextGen Growth Partners. BCMS acted as the exclusive financial advisor to JMG. Read More
Prairie City Bakery Acquired by McKee Foods. Peakstone Group Served as the Exclusive Financial Advisor on the Transaction. Read More
PMCF Advises Hosco Fittings, Classic Precision and IDS in Sale to Carlisle. Read More
Beacon completes the sale of Nostra Gourmet Foods to Premier Polmarex Read More
Deal News from Buy-Side Members
Private Equity Firm Juniper Capital Management and Bluehenge Capital Partners Make Growth Capital Investment in Metal Resources Holdings, LLC. Read More
PennSpring Capital Buys Swing Kingdom and Atlas Molding. Read More
Hoffman Southwest, a Portfolio Company of Orix Capital Partners, Acquires Accumark. Read More
Alaris Royalty Corp. Announces a $100 Million Bought Deal Financing. Read More
Patoka Capital and VisCap Development Acquire Senior Care Facilities in Upstate New York. Read More
Health IQ Secures $55 Million In Series D Funding from Aquiline Capital Partners to Expand Its Special Rate Life Insurance for People Who Live a Healthy Lifestyle. Read More
Advent International Acquires AccentCare. Read More
BV Investment Partners Announces Growth-Oriented, Minority Investment in CivicPlus.Read More
CapitalWorks Invests in Libra Industries, Inc. Read More
Encore Consumer Capital Announces Investment in KYLA, Inc. Read More
H.I.G. Capital Provides Investment Capital to Riveron. Read More
KLH Capital Completes MBO of Shenandoah Industrial Solutions. Read More
Mangrove Equity Partners Announces Investment in Shields Business Solutions. Read More
Sallyport Commercial Finance Provides a Credit Facility to a Full-Service Marketing and Merchandising Firm. Read More
White Oak Healthcare Finance Provides Financing for Dental 365. Read More
