Climb's M&A Weekly: Deals by Broadridge, Bridgepoint and Harness

Welcome to Climb Advisor’s weekly deal newsletter highlighting transactions announced last week across the B2B tech landscape.

Climb Advisors is an M&A and credit advisory firm focused on B2B software and services companies in the range of $5m to $100m+ enterprise value. We guide CEOs and business owners through the process of selling their business & assist investors in sourcing & closing great deals. We love to talk markets and share beneficial information - please reach out any time.

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AdvisorTarget acquired by Broadridge to boost their data and analytics suite

Overview: AdvisorTarget has been acquired by fintech giant Broadridge (NYSE: BR) to boost the data and marketing solutions they can offer asset and wealth management firms. AdvisorTarget’s data products fuel digital marketing, sales and engagement programs, ultimately helping the aforementioned firms source financial advisors whose purchase intent aligns with their product strengths. Read more here.

Climb Comment: M&A in the wealth/financial advisor end market often takes the shape of large enterprises acquiring verticalized or point solutions. The wealth advisor market is attractive for a few reasons - clients tend to be well-funded and willing to spend on a competitive edge, marketing can be done fairly efficiently through trade organizations & direct outreach and there is often an opportunity to become a ‘preferred vendor’ to larger advisory groups. AdvisorTarget’s advanced digital data & marketing products will help Broadridge expand market share and see new avenues to sell existing products.

Global PE firm Bridgepoint acquires majority stake in LumApps for $650M

Overview: Bridgepoint has announced they’ve made a major growth investment in LumApps, a cloud-based social intranet for the enterprise. The French startup’s AI powered platform boosts workplace engagement and productivity by making it easier for team members to work, communicate and collaborate. The size of the stake and full valuation of the company were undisclosed. Read more here.

Climb Comment: Substantial deal here both for the French ecosystem & for workplace collaboration. Social intranet is a notably challenging space, with well-funded competition, a race for feature parity & the ever present risk of consolidation from major enterprise players (see Salesforce buying Slack). LumApps comes recommended by Google for integration with Google Workspace, which offers advantage for the many orgs who manage ops in Workspace. Also to note is LumApps’ multi-year investment into building AI into their platform, with an operational AI conversation assistant today and no doubt more features to come on the back of this investment.

Harness acquires fellow software delivery company Split Software

Overview: Harness’ software delivery platform helps DevOps teams release applications into production, using AI and ML techniques to check quality of deployments and rollback unsuccessful ones if necessary. By integrating Split’s feature management technology, Harness will now be able to allow customers to experiment and deploy new features in their software much faster than before, while also checking whether they are causing improvements or not. Read more here.

Climb Comment: Acquisition of a direct competitor here in the DevOps space. Both businesses enable CI/CD - continuous integration & deployment - for software engineering teams leading to faster product releases and less downtime. Split has raised just north of $100m with the most recent round being $50m in 2021. Terms on this deal undisclosed but seems like a strategic win all around, with the Split team to join Harness.

Cambridge Capital makes majority investment in STAT Recovery

Overview: Cambridge focuses primarily on the supply chain sector, with this deal seeing them invest in a provider of revenue recovery and audit software for retail suppliers. STAT’s ML based platform helps suppliers reduce improper deductions and compliance fines from large retailers, which can make up 2% of the overall sales. Read more here.

Climb Comment: Cambridge has built a thesis around expertise in the supply chain sector and here they layer in a compliance aspect as well. New STAT board member Chris O’Brien says -

STAT not only helps retail suppliers optimize their revenue, but they also help retailers reduce supply chain and back-office inefficiencies. STAT's solution is a win-win for both sides. I cannot wait to leverage my network and experience to elevate the strategic positioning of STAT.

Also to note that Corbel Capital provided a senior-secured credit facility as part of the deal.

Virrtue enters UK market by acquiring Virgate

Overview: Finance and accounting outsourcing company Virrtue is expanding to Europe, acquiring Virgate to establish a presence in the UK market. Virgate targets SMBs in the UK across the food services, retailing, and hospitality sectors, supplying accounting technology for financial reporting to aid regulatory compliance and in-depth performance analytics. Read more here.

Climb Comment: Virrtue is a subsidiary of Access Healthcare, one of the world’s largest revenue management firms for healthcare. Virrtue expands beyond the healthcare vertical into finance, energy, retail, & more and offers robust outsourced back-office capabilities for things like procure to pay, order to cash, & other key F&A functionalities. Looks like Virgate will serve as a UK beachhead and over time marketing efforts will move upstream towards larger enterprises such as Virrtue currently services.

Podcast of the week

Two podcasts for the price of one this week!

We know a lot of you are part of roll-up strategies and thought these two recent podcasts on the subject on the M&A Science podcast would interest you. One is with the guys at Ntiva who are doing one in the MSP space while the other is with Ivan from Fastlap who shares his experiences here around setting yourself up for success in one.

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Thanks for following along & hope you found something useful or interesting.

All the best,

Nick Cellura

Principal, Climb Advisors

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