The hot market for Mergers and Acquisitions continues; and these deals are pretty big, overall.
Last month we showcased several M&As. But that seems to be just the beginning of the story...
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FoodLink Online Marries iTradeNetwork
First, a little background. FoodLink and iTrade were the two big competitors in the produce market, connecting sellers and buyers. FoodLink has about 2,000 growers who sell their strawberries, avocados, and carrots to hundreds of distributors and retailers through the network. iTrade has a total of about 8,000 players in the food and beverage industry. A few years back, iTradeNetwork was purchased by Roper Industries.1Roper is a diversified growth company with annual revenues of $3.2 billion. They go after niches that also complement, like a big portfolio of RFID companies for example. A nice match for food networks that also require traceability.
Except for a few snippets, the new team is not ready to talk in public. Customers have been notified and teams merged. In the short run, customers were told that things will continue as is. Over time one does wonder how customers will feel about a quasi-monopoly. However, the combined companies do offer a much bigger network. And if Metcalf’s Law holds true for growers, this will give them a much bigger market for selling their greens and grains.
HighJump Acquired by Accellos
High jumping to mega status as the largest WMS now is the Accellos/HighJump acquisition. Stepping back a bit and looking at the WMS market, there are few pure plays now. JDA/RedPrairie, Manhattan and Symphony EYC (Aldata) have demand-side applications, moving beyond logistics. Of course everyone is on the Omni-channel bandwagon, including newcomer LogFire.
This is why the merger here is interesting. Both HighJump and Accellos were more ‘supply-side’ WMS supporting 3PLs, Manufacturing, and Distributors. However, more agility in warehouse requirements for complex logistics to Omni-channel is a key to growth in the WMS market. Of course, like the deal above, (iTrade), a merger of solutions that have a lot of redundancy does present a question: What will the long-term portfolio look like?2
Though Accellos, through their investors Accel-KKR, is the acquirer, the combined company will be called HighJump. This is in recognition of the HighJump 8300+ customers vs. Accellos 4000 customers. However, Mike Cornell, founder of Accellos, will be the new HighJump CEO.
Another interesting element of the WMS market is that there aren’t a lot of public companies out there. (More on that in the next issue.) With hungry investors looking for interesting deals, the supply chain market, with its past successes and technology foundation for future growth, looks like an opportunity.
Hiperos Acquired by Opus Global
Moving on to the risk management market the Hiperos acquisition is very interesting. Hiperos is actually one of the few up-and-comers in this market who has had decent deal flow and a rapidly growing footprint. The supplier risk market has not had the pop-out success many feel it should. So, Hiperos was unique in their gaining greater traction with new and repeat customers, adding more functions and departments as users. (Opus Global is a new fund that will be focused on compliance and risk. Hiperos is their first acquisition.)
AeroScout Acquired by Stanley Black and Decker
We missed this one! But let’s make up for lost time. AeroScout is a leader in RFID real-time locating systems. We visited with Stanley Healthcare and AeroScout and were amazed at the progress AeroScout has made post acquisition. RTLS is alive and well! Within the Stanley family they have spread their wings across several of the divisions including healthcare, industrial, security and manufacturing. (More on AeroScout and Stanley Healthcare in this issue of the brief).
Some Future Tidbits to Keep Your Eyes Open for…
Descartes recently raised more capital. The offering was gobbled up since Descartes has grown organically as well as through some very smart acquisitions lately. Descartes today remains the one candidate who could achieve gorilla status in the transportation software market.3 So expect more growth through acquisitions here.
Questions also continue to loom in the ERP market about Epicor—will they be bought?4 And UNIT4 was recently acquired by private equity firm Advent International. Since then rumors persist on the state of FinancialForce jointly owned by UNIT4 and Salesforce.com.5 Will UNIT4 pursue a multi-application future like many in the industry; or will the typical private equity methodology persist with something sold off of the valuable assets UNIT4 has—that is Coda Financials, Agresso, (the largest component) and FinancialForce.com.
5 Various sources stated that CEO Jose Duarte said he did not want to focus on manufacturing. FinancialForce is the only asset in the UNIT4 portfolio of manufacturing and supply chain capabilities. -- Return to article text above To view other articles from this issue of the brief, click here.