| 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).
In May, the firm published two reports that speak to interesting trends in the space: Software M&A Update and Trends in the Education Technology vertical.
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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?
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Buyers are increasingly doing smaller deals, at a more frequent pace than previous years.
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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:
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BV Investment Partners Announced a growth-Oriented, minority Investment in CivicPlus, a leading integrated technology platform for local government.
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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.
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Tendril, the leading provider of AI-powered utility customer experience and DSM solutions Acquires EnergySavvy, the leader in personalized utility customer engagement.
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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
Shoutouts
- Dealmaker’s guide to service providers: Accordion, Axial, BluWave, Frazier & Deeter, Intralinks. Read More
- Berkery Noyes Managing Director Brian DeCicco Announced as Winner of the 10th Annual Emerging Leaders Awards. Read More
- Air Black Box, a Portfolio Company of 777 Capital Partners, Recognized as 2019 CIO 100 Award Winner. Read More
- CIVC Partners Announces the Formation of Specialized Elevator Services Holdings. Read More
- Clearent Announces Veterans Employment Initiative. Read More
Thought Leadership
- PMCF Releases its Packaging Pulse Year in Review 2018 Edition. Read More
- Learning and Education Technology Update Q1 2019. Read More
- How Investment Banks Build Trust with Clients. Read More
- M&A Quarterly News In The Industrials Industry Sector. Read More
- Hilliard Lyons Monthly Market Insights: May 2019 | Disruption. Read More
- How to Create Deal Sourcing Alpha. Read More
- 5 Reasons to Consider Equipment Lease Financing. Read More
People Moves
- Stephens Inc. Adds Senior Banker Jay Bliley to Financial Institutions Group. Read More
- Acorn Growth Companies Names Gregory Bloom Chief Operating Officer. Read More
- H.I.G. Realty Partners Expands European Team with the Addition of Jérôme Fouillé and Jenny Hammarlund as Managing Directors. Read More
- HKW Announces Promotion of Ryan Grand. Read More
- 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
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Auctus Capital Partners Supports Limitless Creative through Strategic Expansion, Secures Capital from Fifth Third Bank for New Headquarters Building. Read More
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Marlin & Associates Advises TABS Analytics on its Acquisition of Decision Insight. Read More
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Bundy Group Advises Dorsett Technologies, a Controls & Automation Industrial Technology Firm, om a Sale to MC Controls and Midwest Mezzanine Funds. Read More
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ACT Capital Advisors Assists Northend Truck Equipment in its Acquisition by OSW Equipment & Repair. Read More
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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
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Climate Pros Has Acquired Norfoxx Refrigeration. Statesman Corporate Finance served as the exclusive financial advisor to Norfoxx. Read More
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Plethora Businesses Represents Shareholders in the Sale of Premiere Packaging Industries. Read More
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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
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Jacobs Marketing Group Acquired by NextGen Growth Partners. BCMS acted as the exclusive financial advisor to JMG. Read More
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Prairie City Bakery Acquired by McKee Foods. Peakstone Group Served as the Exclusive Financial Advisor on the Transaction. Read More
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PMCF Advises Hosco Fittings, Classic Precision and IDS in Sale to Carlisle. Read More
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Beacon completes the sale of Nostra Gourmet Foods to Premier Polmarex Read More
Deal News from Buy-Side Members
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Private Equity Firm Juniper Capital Management and Bluehenge Capital Partners Make Growth Capital Investment in Metal Resources Holdings, LLC. Read More
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PennSpring Capital Buys Swing Kingdom and Atlas Molding. Read More
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Hoffman Southwest, a Portfolio Company of Orix Capital Partners, Acquires Accumark. Read More
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Alaris Royalty Corp. Announces a $100 Million Bought Deal Financing. Read More
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Patoka Capital and VisCap Development Acquire Senior Care Facilities in Upstate New York. Read More
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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
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Advent International Acquires AccentCare. Read More
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BV Investment Partners Announces Growth-Oriented, Minority Investment in CivicPlus.Read More
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CapitalWorks Invests in Libra Industries, Inc. Read More
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Encore Consumer Capital Announces Investment in KYLA, Inc. Read More
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H.I.G. Capital Provides Investment Capital to Riveron. Read More
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KLH Capital Completes MBO of Shenandoah Industrial Solutions. Read More
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Mangrove Equity Partners Announces Investment in Shields Business Solutions. Read More
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Sallyport Commercial Finance Provides a Credit Facility to a Full-Service Marketing and Merchandising Firm. Read More
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White Oak Healthcare Finance Provides Financing for Dental 365. Read More
Not a Member of Axial yet?
Last Month on Axial’s Middle Market Review
The Advantages of Thesis-Driven Investing. Read More
3 Characteristics of a Compelling Business Offer (Other Than Price). Read More
When Does an MBO Make Sense? Read More
The Art of Deal Sourcing. Read More
3 Non-Negotiables for Every Investment Firm Website. Read More
Building a Recession-Proof Investment Strategy. Read More
How Investment Banks Build Trust with Clients. Read More
How to Tap Into Deals in New Sectors. Read More
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Highlights of Recent Transactions
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