M&A in Communications Technology - Mark White
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TADSummit 2022 8/9 Nov Aveiro Portugal M&A in Communications Technology Mark White, Tech M&A, Investor, Founder, Board Member, Startup Mentor, SVP Corum Group. It’s an exciting time for the communications technology sector: innovation, adoption, and growth abound. But if you’re building a great communications technology company, where are you headed? Who is buying communications technology companies, and why? How can founders and executives best prepare their company for a successful M&A outcome? In this presentation, Corum Group SVP Mark White (well-known to the TADS Community as the founder of Australian mobile location company Locatrix Communications) will present an overview of transaction activity in the communications technology sector – who is buying, and why – as well as tips and insights to help you prepare for a successful M&A outcome.
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M&A in Communications Technology - Mark White
- 1. M&A in Communications Technology Mark White Senior Vice President, Corum Group markw@corumgroup.com +65 8119 2500 Telecom Application Developer Summit November 2022
- 2. 2 Mark White, Senior Vice President, Corum Group Ltd. 30+ year career in the software, IT and telecommunications industries throughout the Asia-Pacific region. Founded several technology companies, successfully selling his telecommunications software business in 2018. Led and mentored technology commercialization successes from one of Australia’s largest universities, ultimately raising over US $45M in venture capital. Regional leadership roles with Red Hat, Compaq and Tandem Computers. Computer Science Degree from the University of Queensland. Long-time TAD Summit & TAD Hack participant! Presented By
- 3. 3 Detailed, 8 step professional M&A process Team approach, senior dealmakers World Technology Council (WTC) SOLD MORE SOFTWARE-RELATED FIRMS THAN ANYONE Focus—sell side, technology only About Corum Group
- 4. 4 Agenda – M&A in Communications Technology Overview of Communications Technology Sector M&A Transaction Volumes & Trends M&A Transaction Values & Trends Geographical View – Buyers & Sellers Example Transactions Summary Q&A
- 5. 5 Communications M&A Volume Source: 451 Research & Corum Group Q3 250 273 292 222 168 160 161 173 143 90 56 60 51 49 61 76 67 76 74 32 306 333 343 271 229 236 228 249 217 122 0 50 100 150 200 250 300 350 400 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Strategic Private Equity
- 6. 6 Communications M&A Volume YTD Source: 451 Research & Corum Group Deal Volume by Top Target Sectors 122 Total Acquisitions 4 11 13 16 20 26 32 Information management Mobility IT services & distribution Carrier infrastructure Enterprise solutions Enterprise networking Communications services
- 7. 7 Source: 451 Research & Corum Group Q3 $70.4 $128 $161.2 $59.8 $46.1 $123.8 $45.9 $62.6 $97.7 $13.2 $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Billions, USD $19B $18.6B $56.7B $16.5B $39.3B $26.5B $12.9B $20.8B $19.7B Communications M&A Value
- 8. 8 Source: 451 Research & Corum Group Communications Sellers by Geography YTD 122 deals USA 50% Canada 10% United Kingdom 9% Australia 5% France 3% Spain 2% RoW 21%
- 9. 9 Source: 451 Research & Corum Group Communications Buyers by Geography YTD 122 deals USA 54% Canada 9% United Kingdom 7% Australia 4% France 3% Israel 2% RoW 22%
- 10. 10 Source: 451 Research & Corum Group Communications Top Buyers YTD 3 2 2 2 2 2 2
- 11. 11 Source: 451 Research & Corum Group Recent Largest Deals Transaction Value: $2.2B Announced Date: August 2022 Wireless telecommunication services provider based in Canada Transaction Value: $2.4B Announced Date: September 2022 The Safety Business assets of Intrado, providing enterprise collaboration, communications and E-911 call management SaaS, software, and related communications and managed services, based in the USA Transaction Value: $2.97B Announced Date: January 2022 Mobile collaboration and clinical communications software and systems provider based in the USA
- 12. 12 Seller: Yodel.io [USA] Buyer: Sendinblue SAS [France] Announced Date: September 2022 Transaction Value: Undisclosed Seller Description: AI-based chatbots and voice assistants SaaS and related mobile applications provider Enables buyer to expand its platform with voice communication capabilities, reduces digital marketing costs for SMBs, and additionally, seller's comprehensive omnichannel tools should help the buyer deliver a more compelling value proposition for SMEs Rationale: Representative Transactions
- 13. 13 Seller: OnSIP [USA] Buyer: Ooma, Inc. [USA] Announced Date: September 2022 Transaction Value: $9.75M at 1x EV/Sales Seller Description: AI-based phone and unified communications SaaS, APIs, related mobile application, and hosted services to small and mid-size businesses Accelerates buyer’s expansion, adding further momentum to the company's growth and extends buyer’s leadership in serving SMB customers Rationale: Representative Transactions
- 14. 14 Seller: Connesi SPA [Italy] Buyer: Dominion Hosting Holding SpA [Italy] Announced Date: July 2022 Transaction Value: $5.6M at 1.3x EV/Sales & 6.5x TTM EBITDA Seller Description: Provider of voice, data, text, sound, and video telecommunication integration services Continues the process of consolidation of local B2B Internet Service Providers Rationale: Representative Transactions
- 15. 15 Source: 451 Research & Corum Group Takeaways 1. Tech M&A disclosed deal values continued growing after the drop in 2019, but a potentially sharp decrease from 2021 was indicated. Private Equity firms led 26% of all deals and made up the top telecom buyers' list. 2. Through Q3'22 companies offering Communication Services led in terms of deal volume (26%), with the Enterprise Networking subsector following closely (21%). 3. North America and United Kingdom continued to be the largest hubs for Communications Tech M&A. - Asia remains an unexploited opportunity! 4. Demand for AI and analytics, team collaboration, cloud contact center solutions or vertical market domain expertise, as well as focus on CX, chatbots, video-over-voice, and security drive the Communications market consolidation.
- 16. 16 Continued M&A Education www.corumgroup.com/events Co-sponsoring with Bringing together tech CEOs, top buyers, investors, and M&A experts Upcoming Virtual Events Nov 4 Gaming Nov 11 Blue Collar Software Nov 18 Global Tech ANZ Nov 22 Growth & Exit Strategies Upcoming Virtual Events Nov 8 Melbourne Nov 9 Silicon Valley Nov 9 Copenhagen Nov 16 Calgary Nov 16 New York Nov 22 Edinburgh Nov 23 Sao Paulo 30-minute webcast with special reports on buyers, markets and latest M&A news Every second Thursday at 10am Pacific, 1pm Eastern Rebroadcasts for EMEA and APAC the following Friday View on-demand at www.corumgroup.com/ webinar-registration 90-minute industry update and overview of the M&A process
- 17. 17 Continued M&A Education www.corumgroup.com/events Subscribe to the Tech M&A Podcast for the latest special reports, interviews and market analysis or wherever you get your podcasts!
- 18. 18 Visit our website at: www.corumgroup.com Mark White, Senior VP Singapore Email: markw@corumgroup.com Mobile: +65 8119 2500 Contact Information Corum Group Ltd. 19805 North Creek Parkway Suite 300 Bothell, WA 98011 USA +1 425-455-8281 Mike Donnell, Senior VP Denver, CO USA Email: miked@corumgroup.com Mobile: +1 303 638 4164
Editor's Notes
- Key Message: Through our many years of experience and success, we know what it takes to be a leader in tech M&A Success in today’s regulated M&A market requires more work - preparation, positioning, contact, due diligence. To keep our clients from being burdened by the process we employ a team approach of five professionals with expertise in the various disciplines of research, writing, valuations, etc. They are led by the most senior negotiators in the world – former CEO’s who have sold their own company. This is no place for juniors. We are the largest educator on tech M&A in the world – over 100 events a year that involve both buyers and sellers. Selling Up Selling Out – the leading M&A educational forum is where the world, including buyers, come to be trained. It is the most attended tech exec conference in history, running every month since 1990. Finally, Corum has the largest proprietary buyer database in the world. Data from all our research, educational events and client engagements – over 10 million entries – give our clients a huge advantage by having inside information on what buyers want, the decision makers, how they value, due diligence checklists, contracts, negotiating strategies and who are their professional outside advisors. This knowledge that we’ve captured in a proprietary system give our clients a decided advantage in getting their company successfully sold.
- 2022: 5 megadeals already: Stryker Corporation bought Vocera Communications for $2.97B (US-based mobile collaboration and clinical communications software and HER systems provider). Turkiye Wealth Fund bought Turk Telekom for $1.65B (fixed-line telephone and VoIP service, based in Turkey). Stonepeak Infrastructure Partners bought the Safety Business assets of Intrado, which provides enterprise collaboration, communications and E-911 call management SaaS, software, and related communications and managed services for $2.4B Quebecor bought Freedom Mobile Inc. for $2.2B (wireless telecommunication services for consumers in Canada). Semtech bought Sierra Wireless, wireless internet access cards, IoT connectivity and managed networking services provider, for $1.28B 2021 growth – 18 megadeals over $1B, 2 huge deals: Rogers Communications acquired Shaw Communications (Canadian cable and satellite TV, broadband internet, mobile, and fixed-line telephone services provider) for $20.8B Microsoft bought Nuance (AI-enabled desktop and mobile interactive voice response and speech recognition SaaS) for $19.7B 2018 peak – 15 megadeals over $1B, 3 huge deals: Comcast bought Sky (UK-based digital satellite TV, broadband Internet and fixed-line telephone services provider) for $39.3B T-Mobile US Inc. acquired Sprint Corporation (US-based wireless telephone service and data services) for $26.5B Vodafone acquired Liberty Global (Germany, Czech Republic, Hungary & Romania fixed-line telephone, cable TV and broadband Internet operations) for $12.9B. 2015 peak – 21 megadeals over $1B, huge deals: - Charter Communications acquired Time Warner Cable (US-based cable television, broadband Internet and VoIP service) - $56.7B. And bought Bright House Networks (US-based cable TV, broadband Internet and fixed-line telephone services provider) for $10.4B. - Nokia bought Alcatel-Lucent for $16.5B - BT Group Plc [fka Newgate Telecommunications] acquired EE Limited [fka Everything Everywhere] (2G, 3G and 4G mobile phone networks operator) for $15.36B. - Altice Europe acquired Cablevision Systems Corporation (US-based broadband Internet, digital cable TV and fixed-line telephone services provider) for $10B. - Frontier Communications bought CA, FL & TX wireline assets from Verizon Communications Inc. For $9.9B 2014 peak – 20 megadeals over $1B, 2 huge deals: - FB bought WhatsApp for $19B - Altice Europe acquired SFR (France-based wireless telephone and broadband Internet service) for $18.56B, and Portugal Telecom (wireless and wireline telephone services) for $8.47B. - Telefonica bought Global Village Telecom (Brazil-based wireline and wireless telephone access), $9.8B - Liberty Global acquired Ziggo (Netherand-based cable television, broadband Internet and wireline telephone services provider) for $6.72B.
- The cloud contact center, AI, workforce management, and advanced analytics are becoming common compliments to UCaaS Within Specific Verticals Focus on the Overall Customer Experience https://www.voipswami.com/blog/2022-ucaas-preview Intercompany Collaboration convergence of unified communications and contact centers https://www.vonage.com/resources/articles/8-unified-communications-trends-for-2022/ https://www.intermedia.com/blog/6-unified-communications-market-trends-to-watch-in-2022/ Data Video over voice security