Climb's M&A Weekly: Deals by Squarespace, Northrim Horizon and Digits

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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Squarespace sell Tock to American Express for $400M

Overview: Squarespace is selling its restaurant reserving service Tock to American Express for $400M. It was announced last month that Permira were taking Squarespace private in a $6.9B deal, with Tock and their reservation and event management tools seemingly being deemed surplus to requirements by the PE acquirer. It is expected that this cash influx will be used to invest in online payments and other complementary tools as Squarespace aims to re-establish itself as a leader in website building for SMBs. Read more here.

Climb Comment: Interesting to note that Squarespace acquired Tock for the same price back in 2021 via a mix of cash and stock. Possibly some added profit along the way (given that they’re divesting more likely it was a breakeven or cash-burning division) and possibly some ‘synergies’/won deals but overall looks to be something of a wash. Makes sense Permira wants to unload to refocus on core business activities & likely a win for Amex. Squarespace is being taken private just below a 7x multiple on fwd ARR & expects to generate ~$300m in ‘24 in operating profit.

Northrim Horizon make strategic investment in VLogic Systems

Overview: PE firm Northrim Horizon has made a sizable growth investment in VLogic Systems, a provider of integrated workforce management software (IWMS). Their flagship product VLogicFM helps both commercial and federal clients maximize the value and utilization of their physical facilities through features such as occupancy tracking, hybrid workplace reservation and space management capabilities. Northrim also outlined their intentions to stay acquisitive in this and adjacent sectors in the upcoming months. Read more here.

Climb Comment: Northrim plants a flag into both govtech & facilities management with this deal. Vlogic recently acquired FedRAMP status - a federal compliance standard relating to risk & security measures for cloud-based offerings. Very likely that VLogic will serve as a springboard to launch other compliant offerings into federal customers while also providing a platform to move into broader asset management in the private sector. Kudos to all.

San Francisco based Digits acquire Basis Finance

Overview: Digits is best known as the creator of the world’s first automated bookkeeping solution for startups, particularly those in the Pre-Seed to Series B stages. The addition of Basis Finance’s budgeting and forecasting platform allows them to add powerful financial planning and scenario comparison tools to their dashboard. Basis’ co-founders and team of 10 will also join Digits post acquisition. Read more here.

Climb Comment: Basis offers FP&A ‘in a box’ to startups and growing enterprises, while Digits provides integrated bookkeeping to help startups maintain clean books and access feature-rich dashboards, reporting & analytics.

"Good FP&A is an extension of good accounting," said Jeff Seibert, co-founder and CEO of Digits.

Especially in uncertain markets, having a tight grip on financial forecasting can be make or break for early-stage businesses, who often lack a full-time CFO or FP&A department.

Urbint expands risk mitigation platform with deal for WRM Software

Overview: Urbint’s AI-powered platform helps companies identify and stop threats to both their workers and critical infrastructure. The addition of WRM’s storm response software expands their platform by offering clients solutions that can be deployed on the back of severe weather events, limiting the damage caused to their day to day operations. Read more here.

Climb Comment: Mega-scale utilities providers need to assess risk across a number of axes & Urbint provides tools to do just that - overlaying a ‘map of the world’ containing weather events, seismological data, org specific incidents & events, & more. This platform is designed to increase worker safety & protect assets via a risk-based ticket management system, reporting/dashboards & alert systems. WRM is focused specifically on storm/crisis response - both for transportation departments in winter storms and for utility companies in other severe weather. WRM has a built in ‘bring your own device’ comms platform as well which Urbint will likely leverage.

Nice to see a deal for a highly specialized & real-world saas - lots of consolidation of this sort of company over the last 10+ years and deals like this felt rarer over last 2-3 years as many of the scaled players sold to PE backed rollups and the holdouts either didn’t clear hurdles or couldn’t find compelling bids. Maybe a sign of movement in the market - either way a highly strategic deal for both parties.

Boston based Bullhorn acquire Textkernel from Main Capital Partners

Overview: This deal is another prime example of a company, in this case Bullhorn, using M&A to accelerate their AI strategy The provider of cloud-based software for the staffing and recruitment industry is acquiring Textkernel and their AI-powered recruitment and talent management solutions. The Amsterdam based company serves over 2,000 clients globally including 8 of the world’s top 10 staffing agencies and various Fortune 500 companies. Read more here.

Climb Comment: In press documents Bullhorn seems particularly excited about Textkernel’s parsing technology - an evolution from current TMS systems which can flag keywords or key terms in resumés/application. AI enables these systems to evaluate these applications contextually and more accurately and as they build on corpuses of org specific data they will become smarter and more effective at placing the right candidates more efficiently.

Report of the week

This week’s report comes in the form of Pitchbook’s Q1 2024 US PE Middle Market report. Their analysis found that take private deals were off to a particularly strong start, with main drivers being depressed valuations of small-cap tech stocks and the need for PE buyers to deploy capital. Download the full report here.

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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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