Topic of the Quarter
Total M&A Market Shrinks, but Founder-led M&A Surges
Despite the broad slowdown in M&A activity due to volatile public markets and a challenging economy, one area of relative strength is in transactions for founder-owned, bootstrapped private companies.
By the numbers: In Q1 2023, the dollar value of deals for non-sponsor-backed sellers reached 44% of the total M&A market value, up from 31% the prior year. The number of transactions for non-sponsor-backed private companies made up 62% of all deals in Q1 2023, the highest percentage since Q1 of 2008.
Potential reasons for this strength may be, and we generalize, profitability of non-sponsor-backed businesses, clean cap tables, and lower debt levels.
Across our own business at La Honda Advisors, we have experienced similar activity and maintain a focus on founder-driven businesses.
Founder-Led / Bootstrapped Deal Activity Snapshot
Q2 2023: Notable U.S. based M&A deals in Tech
Autonomy/IoT
5/12 Digital Communications Tech, IoT and edge-to-cloud ecosystem, acquired by Qulitas. Link
4/3 Eagle Technologies, automated manufacturing systems, acquired by Convergix Automation Solutions via Crestview Partners. Link
Big Data & AI/ML
6/21 PathosAI, customer emotional engagement analytics, acquired by QuestionPro. Link
6/11 RXA, applied business intelligence platform, acquired by OneMagnify via Crestview Partners. Link
Data Center
5/19 ServerFarm, datacenter colocation services, acquired by Manulife Investment. Link
Software
6/22 Tymeshift, workforce management software, acquired by Zendesk. Link
6/8 Pandell Technology, cloud-hosted enterprise software, acquired by ESG Global via Accel-KKR. Link
6/6 Scanco Software, warehouse management software, acquired by The Firmament Group. Link
6/1 Cloud Coach, enterprise automation SaaS, acquired by Main Capital Partners. Link
5/23 VeraCore, warehouse and order fulfillment software, acquired by Advantive via TA Associates. Link
5/10 Triage Partners, workflow control platform, acquired by Broadtree Partners. Link
Professional Services
6/6 Optimal Design, IoT and product development services, acquired by Deloitte. Link
5/6 Enquizit, cloud integration and consulting services, acquired by CDW Corp [NAS: CDW]. Link
4/24 Arroyo Consulting, onshore technology services, acquired by BGSF [NYS: BGSF]. Link
4/24 ExperienceIT, business and technology consulting services, was acquired by Globant [NYS: GLOB]. Link
4/21 Broadleaf, IT and pro services company, acquired by ASRC Federal. Link
4/18 Nextsphere Technologies, CloudTech services, acquired by Grid Dynamics [NAS: GDYN]. Link
4/5 Kinetic Communications, IT solutions, acquired by Pearl Comms. Link
4/4 Q Analysts, quality assurance and testing services, acquired by Qualitest. Link
4/3 Proxios, IT consulting services, acquired by Sourcepass of Bridgepointe Tech. Link
eCommerce
6/6 Snow Commerce, eCommerce managed services, acquired by Printful. Link
6/5 Corra, eCommerce enablement and growth acceleration company, acquired by Publicis Groupe [PAR: PUB]. Link
4/28 Belami Ecommerce, eCommerce services, acquired by SKYX Platforms [NAS: SKYX]. Link
4/11 Trinity Insight, eCommerce consulting services, acquired by OuterBox via WILsquare Capital. Link
