Technology Enabled Business Services (TEBS) Newsletter
August 2017

Cherry Tree has been tracking trends and activity in the Technology Enabled Business Services (TEBS) space for more than 15 years, including the TEBS 100 index, which is a broad index of 100 publicly-traded companies. The four segments of the TEBS 100 are:
  • Software
  • Business Process Services
  • Information Services
  • Infrastructure Services 
Each issue of the newsletter highlights transactions involving TEBS companies. Performance metrics for the TEBS 100 are tracked and published in each edition of the newsletter.

Cherry Tree also produces a quarterly TEBS report, the 2017 Q2 update  is available here.

TEBS Transactions - July 2017

OpenText to Acquire Guidance Software
OpenText (NASDAQ: OTEX, TSX: OTEX) has agreed to acquire Guidance Software (NASDAQ: GUID) in an all-cash transaction at an enterprise value of approximately $222 million (2.0x revenue). Guidance provides forensic security software solutions, including digital discovery and endpoint information security. Article
Sage to Acquire Intacct
The Sage Group (LSE: SGE) has agreed to acquire Intacct Corporation for $850 million. Intacct, which provides cloud accounting software, has a three-year revenue CAGR over 33% and current annualized recurring revenue of $96 million. Article

Sizmek to Acquire Rocket Fuel
Business Process Services
Sizmek has agreed to acquire Rocket Fuel (NASDAQ: FUEL) for an enterprise value of approximately $145 million (0.3x revenue). Rocket Fuel provides digital advertising solutions. Article

SEI Investments Acquires Archway Technology Partners
Business Process Services
SEI Investments Co. (NASDAQ: SEIC) has acquired Archway Technology Partners for total consideration of $88 million (4.9x Revenue, 24.4x EBITDA). Archway is a provider of software and outsourced support services for the investment management industry. Article

Mitel to Acquire ShoreTel
Infrastructure Services
Mitel (NASDAQ: MITL, TSX: MNW) has agreed to acquire ShoreTel (NASDAQ: SHOR) in an all-cash transaction at an enterprise value of approximately $430 million (1.2x revenue, 42.7x EBITDA). The deal will reportedly generate synergies of approximately $60 million in annual run rate spend expected to be achieved over two years. Article
Peak 10 to Acquire ViaWest 
Infrastructure Services
Peak 10, a portfolio company of GI Partners, and ViaWest, a wholly-owned subsidiary of Shaw Communications (TSX: SJR.B; NYSE: SJR), entered into a definitive agreement under which ViaWest, will be acquired by Peak 10 for all-cash consideration of $1.675 billion. The transaction creates a leading provider of co-location, connectivity, cloud, and managed solutions. GI Partners, an investor in ViaWest, acquired Peak 10 in 2014 and will remain the majority shareholder of the combined company. Article
Red Ventures to Acquire Bankrate
Information Services
Red Ventures has agreed to acquire Bankrate (NYSE: RATE) in an all-cash transaction at an enterprise value of approximately $1.4 billion (3.1x revenue,15.0x EBITDA). The price per share of $14.00 represents a premium of approximately 31% over the company's three-month average closing share price. Article

Internet Brands to Acquire WebMD
Information Services
KKR-backed Internet Brands has agreed to acquire WebMD Health Corp. (NASDAQ: WBMD) at an enterprise value of approximately $3.7 billion (5.3x revenue, 20.6x EBITDA). The price per share of $66.50 represents a premium of approximately 20% over the closing share price on July 21, 2017. Article

TEBS 100 Performance 

Contact Cherry Tree for a complete listing of the most current TEBS 100 Index.

TEBS 100 Metrics
Cherry Tree & Associates is a private investment banking firm headquartered in Minneapolis. Our firm specializes in serving middle market companies and their owners, whether private, public, or divisions of larger corporations.

Prepared by:
Mik Gusenius,  Director
952.253.6005 (direct)
Important Disclosures

The information included in this publication has been obtained from public sources, and is not based upon private or confidential Cherry Tree information. Cherry Tree gathers its data from sources it considers reliable. However, it does not guarantee the accuracy or completeness of the information provided within this publication. Any opinions presented reflect the current judgment of the authors and are subject to change. Cherry Tree makes no warranties, expressed or implied, regarding the accuracy of this information or any opinions expressed by the authors. Officers, directors, partners of Cherry Tree and Cherry Tree proprietary investment funds may have positions in the securities of the companies discussed, and certain affiliates of Cherry Tree may recommend to specific clients the purchase and sale of securities discussed in the publication. This publication does not constitute a recommendation with respect to the securities of any company discussed herein, and it should not be construed as such. Cherry Tree or its affiliates may from time to time provide investment banking or related services to these companies. Like all Cherry Tree employees, the authors of this publication receive compensation that is affected by overall firm profitability. We undertake no obligation to update any information in this publication.
The TEBS Performance Index is a hypothetical index, and does not reflect an actual investment portfolio. Comparisons between the TEBS Index and other indices are for illustrative purposes only. Correlations in performance information for the TEBS Performance Index and other indices should not be relied upon as indicative of risks involved in owning or holding a portfolio of securities similar to the TEBS Performance Services Index. Past performance should not be relied upon as indicative of future performance.

Cherry Tree & Associates, LLC | 952.893.9012 | Email | Website