Progress Perspective: 5 Deals Worth Revisiting from 2016
Now that we are a full month into 2017, complete with a new Presidential administration and new Super Bowl champions, we wanted to take a quick opportunity to look back at a few M&A transactions from 2016. It was a highly active period for adtech and marketing tech deals, so we have tried to derive some of the signal from the noise by highlighting five deals that caught our attention.
- Date: June 1, 2016
- Value: $2.6B
- Perspective: Salesforce’s acquisition of Massachusetts-based Demandware marked the beginning of a big M&A year for Salesforce, signaling the SaaS giant’s first major step into the multi-billion-dollar e-commerce industry and a general expansion beyond B2B marketing into B2C. Salesforce’s Commerce Cloud, as it is now called, is aimed at helping retailers connect with customers across the lifecycle. From our experience in the retail tech space, specifically from our recent visit to NRF, this is an enormous opportunity which Salesforce and its competitors are running headlong towards.
- Date: July 26, 2016
- Value: $1.8B
- Perspective: LogMeIn’s acquisition of Citrix’s GoTo family of products was a considerable consolidation of the collaborative communications space. Citrix was experiencing stiffer competition within the web and video conferencing space, and wanted to divest the conferencing assets to focus attention on application delivery. LogMeIn’s join.me product was perhaps Citrix’s tightest competitor, so the acquisition was a bold assertion of market ownership for the Boston tech darling.
- Date: August 4, 2016
- Value: $50M
- Perspective: Acxiom Impact was the enterprise marketing automation solution within Acxiom. Through this acquisition, Zeta has improved their data-driven marketing and customer lifecycle management solutions, with an emphasis on one-to-one email and cross-channel marketing tools for enterprises. Zeta raised debt from Blackstone to finance the acquisition. The company’s current financial profile is north of $300M in revenue and a valuation of over $1B. As the only private acquirer on our list, Zeta’s strategy is not as explicitly clear to the market. However, the Acxiom Impact acquisition follows a broader market trend of CRM players acquiring into the broader marketing automation space.
- Date: October 3, 2016
- Value: $700M
- Perspective: By adding Krux’s data management platform to its existing Marketing Cloud, Salesforce expanded its data intelligence capability for its clients, serving improved advanced segmentation and audience management capabilities. Salesforce is now a step closer to being a full stack provider for marketers. This is consistent with the company’s focus on B2C marketing, made clear by the Demandware acquisition. The key to both of these deals will be Salesforce’s ability to knit together the products to ultimately provide a cohesive set of cloud services.
- Date: December 19, 2016
- Value: $540M
- Perspective: Adobe’s acquisition of TubeMogul’s demand side platform allows for an end-to-end video advertising and data management solution across TV and digital formats. Viewing trends have clearly shown that video is increasingly consumed across various devices. Adobe’s acquisition of TubeMogul is a reaction to this shift, as advertisers continue to chase eyeballs, and Adobe does its best to keep up with client needs.
We expect continued strong market activity within the tech M&A space in 2017. On the buyer side, corporate cash is at record highs. According to FactSet, S&P 500 businesses held more than $1.5 trillion in cash in the third quarter of 2016, a 7.6% YoY increase. Additionally, we are interested to see if overseas corporate cash hordes are repatriated, and if so, how that money is put to work. On the seller side, there is a large supply of growth stage tech companies in the market. With the boom in investor activity over the last five years, there has been an understandable outcome of a preponderance of companies ripe for acquisition. Given the combination of these macro forces, the buy-side’s diligence and the sell-side’s differentiation have never been at a higher premium.