Even in the face of ongoing economic uncertainty, the middle market SaaS sector is buzzing with activity, driven by innovation, market demand, and the pursuit of strategic opportunities. A key indicator is the increasing number of SaaS M&A transactions as companies seek to expand into new markets, consolidate current markets, provide end-to-end solutions, and take advantage of synergies.
I am proud to share SEG’s recent success in advising ten exceptional B2B SaaS companies this year. As a trusted partner in SaaS M&A, we are thrilled to have played a pivotal role in these significant deals. Furthermore, we believe that these deals, and the lessons that can be learned from them, hold immense value for SaaS operators.
Five of the ten deals, in particular, are representative of current trends in the market and are worth studying for the insights they can provide. In this post, I’ll share some details about these transactions and show how SaaS founders and CEOs can use them to inform their own growth strategies and navigate the ever-changing industry landscape.
The completion of these SaaS M&A transactions is a testament to our team’s expertise, dedication, and commitment to delivering outstanding outcomes for our clients. If you’d like to explore your options, schedule a time to discuss your opportunity with us.
Insight: Strategic partnerships under AKKR umbrella
The acquisition of ClearPathGPS by GPS Insight, a portfolio company of Accel-KKR, marked a significant milestone in the evolution of fleet management platforms. ClearPathGPS is renowned for its business operations SaaS platform, offering GPS fleet management and optimizing vehicle, asset, and mobile workforce operations. The solution empowers businesses to drive revenue, improve project estimate accuracy, enhance driver safety, and minimize issues such as timecard padding and billing discrepancies. Backed by Accel-KKR, a prominent technology-focused investment firm, GPS Insight has undertaken a series of strategic acquisitions, uniting companies like InSight Mobile Data, Rhino Fleet Tracking, TitanGPS, and ClearPathGPS under its umbrella.
This acquisition showcases the potential for growth through strategic partnerships, emphasizing the value of adopting modern, SaaS-driven solutions to stay competitive in the evolving landscape of fleet management and telematics. The integration of ClearPathGPS into the GPS Insight platform demonstrates a commitment to innovation and market leadership, providing valuable insights for SaaS entrepreneurs seeking to navigate and succeed in the ever-expanding realm of business operations technology.
Date: September 2023
Insight: Shared vision leads to market expansion
Actionstep, the global cloud practice management platform for midsize law firms, successfully acquired SEG client, Soluno, a legal accounting software company, from AffiniPay. This move united two industry leaders, combining Actionstep’s comprehensive practice management software with Soluno’s best-in-class accounting capabilities to better serve modern midsize law firms in the U.S. and Canada. Integrating these complementary solutions will create a unified platform that offers a suite of tailored solutions for the North American midsize law firm.
What founders can learn from this transaction is the strategic value of exploring partnerships and acquisitions that facilitate market expansion opportunities. The successful union of Actionstep and Soluno demonstrates the potential for growth through collaboration, especially when combining complementary solutions. Founders should consider the importance of aligning their strategic interests with potential acquirers, as shown by the shared vision of Actionstep and Soluno in addressing the evolving needs of midsize law firms. Additionally, the flexibility offered to customers—allowing them to use the products individually or benefit from the synergies of the combined platform—highlights the importance of providing tailored solutions based on specific industry requirements. Overall, this deal underscores the significance of staying innovative and open to strategic partnerships to meet the dynamic demands of the market and maximize global impact.
Date: May 2023
Insight: New market & global expansion
While acquiring new products and technology is an important part of M&A deals, it isn’t necessarily the only goal. The right deals also allow SaaS companies to look beyond their domestic markets for ways to tap into new customer bases and diversify revenue streams. As an example, Ideagen, backed by HG Capital, entered the maritime industry this May through its purchase of Tritan.
Tritan is the maritime industry’s leading provider of Health & Safety software and services for cruise lines, commercial shipping, and offshore industries. Ideagen is a leading provider of software solutions to regulated and high-compliance industries, including pharmaceutical, aerospace and defense, and life sciences. This M&A transaction gives Ideagen access to Tritan’s rapidly growing presence in the commercial shipping and offshore industries, including 95% of cruise lines. In turn, it allows Tritan to expand its presence in a large and growing market. In the words of Tritan Software CEO and founder, Andrew Carricarte, “Ideagen provides us with an exciting opportunity to realize our growth ambitions at pace.”
The Tritan-Ideagen deal demonstrates the value of strategic acquisitions as a method for entering new markets and expanding globally. A key takeaway for founders and CEOs is the importance of exploring partnerships and acquisitions in international markets to take advantage of the growing global demand for SaaS solutions. Leaders can learn from this example to position their companies to emphasize the potential for market expansion, to align with the strategic interests of potential acquirers, and to offer significant presence or a unique offering in their industry.
Date: March 2023
Insight: End-to-end solutions
Some SaaS companies are expanding their offerings through vertical integration, bringing together various components of the value chain to provide end-to-end solutions. The recent acquisition of Atonix Digital by the Prometheus Group is a case in point.
Atonix Digital’s AtonixOI platform is used by industries such as manufacturing, power generation, chemical, oil and gas, and water treatment to monitor assets, allowing operators to predict issues and prevent equipment failure and unplanned downtime. Backed by Genstar Capital, Prometheus Group is a leading global provider of comprehensive and intuitive plant maintenance operations and optimization software. By integrating AtonixOI into its operations and maintenance platform, Prometheus Group enables customers to gain additional savings and operational efficiencies from their asset data. In short, Atonix is helping Prometheus Group present an end-to-end solution by moving beyond predictive analytics and into prescriptive maintenance.
The Atonix-Prometheus deal highlights the benefits of incorporating adjacent product offerings into existing platforms to offer comprehensive solutions and capture additional value. SaaS leaders should look for opportunities to position their products as enhancements to the product suites of larger companies with the potential to deliver an end-to-end solution. By strategically positioning their products and by demonstrating clear customer benefits, they can significantly increase their attractiveness as potential acquisition targets.
Date: January 2023
Insight: Synergistic merger & end-to-end solution
Companies with complementary products or services can create a competitive edge by joining forces to deliver comprehensive solutions to customers. This is what happened when
Activated Insights, a leading cloud-based satisfaction analytics platform for senior housing, was acquired by Home Care Pulse (HCP), also in the healthcare space.
Activated Insights gives providers a way to build and improve their brand by easily collecting feedback from their employees and residents. HCP provides training, surveys, and reputation management designed to empower home care providers. Backed by Cressey & Company, a leading healthcare-focused private investment firm, HCP’s acquisition of Activated Insights enables it to expand its suite of offerings to include feedback-based certifications powered by digital and phone surveys across the full post-acute care continuum.
The Activated Insights-HCP deal showcases the importance of assessing potential synergies when considering M&A opportunities. Founders and CEOs should focus on how the combination of offerings can enhance value, improve customer satisfaction, and create a holistic, end-to-end solution.
Date: January 2023
Insight: New market & market consolidation
Market consolidation is on the rise, with larger SaaS companies actively seeking to acquire smaller, innovative companies. Ion Wave Technologies is one such case. The company, which offers enterprise software designed for the electronic procurement and special education markets, was acquired in January by Euna Solutions (formerly known as GTY Technology Holdings), which streamlines every part of the procurement process for public sector organizations. The SaaS M&A transaction consolidates Euna Solutions’ position as the fastest-growing eProcurement solution provider in North America while simultaneously allowing it to expand into K–12 education administration.
The takeaway for SaaS leaders is the value of niche market expertise and the potential to attract interest from larger players seeking to enter new markets and consolidate current ones. Founders and CEOs should be aware of the strategic interests of these players and consider the benefits of aligning with them to accelerate growth and gain access to additional resources.
Date: January 2023
Insight: Market consolidation, end-to-end solution
In another example of market consolidation, Hexagon, a global leader in digital reality solutions, acquired Projectmates, a provider of construction project management software. The acquisition accelerates Projectmates’ growth into international markets and allows Hexagon to augment its existing product line and deliver a more complete solution to its customers.
As Hexagon President and CEO Paolo Guglielmini says, “Projectmates’ solution nicely complements our existing comprehensive construction portfolio (HxGN Smart Build) used by general contractors and leading EPCs, which includes enterprise planning and project controls software and reality capture solutions that monitor job site safety and evidence job site progress.”
The transaction emphasizes the potential of providing end-to-end solutions and the benefits of positioning a product to complement the offerings of larger companies that are actively seeking to acquire smaller ones to enhance their product portfolios. SaaS leaders can take a strategic look at the market and identify companies whose product portfolios could be enhanced or expanded with their own products. They can also focus on areas where they can provide unique value or capabilities that other companies may lack.
Your Company’s Market Opportunities
As a trusted partner in the middle market, we at SEG are thrilled to have played a pivotal role in these SaaS M&A transactions. More importantly, we believe they represent immense value for SaaS founders and CEOs. Whether it’s embracing market consolidation, exploring expansion opportunities, leveraging synergistic mergers, or providing end-to-end solutions, understanding these trends can help SaaS leaders make informed decisions that lead to successful outcomes.
As the pace of M&A activity continues to accelerate, however, it is crucial that these leaders partner with advisors who possess the expertise, network, and proven track record to navigate this dynamic landscape successfully. Let us know if you’d like to schedule a time to discuss the potential opportunities for your company.