2021 continues to be very busy for mergers and acquisitions in fintech, payments, and SaaS. From all indications, it is a record year in terms of M&A activity in these spaces. Most recently, there were 3 particular deals which caught our attention and which we believe will be significant in the near future.

GPS Insight acquired by Accel-KKR

Think of all the transportation vehicles that are used on a daily basis across the world to get goods to consumers and provide services. Hundreds of millions of vehicles transport people, the food we eat, the gas we fill our cars with, and much more every day, but there must be some sort of order to all these moving parts or else there wouldn't be such a steady flow of goods and services. GPS Insight, a SaaS company founded in 2004, is a leader in Fleet Management Software that allows companies to monitor and organize their operating vehicles for maximized flow and quality assurance. Some of the features that the company is most proud of are the GPS Tracking Solution, Field Service Management Solution, and the Smart Camera Solution, all of which help streamline travel and give insight to managers of their operators. Stepping into the role of CEO and CTO in 2018 was Gary Fitzgerald who had been with GPS insights for four years and is experienced in the technology architecture space for over 20 years. Previously in leadership roles at GE and Allstate Insurance, he has worked in the tech space managing large teams. 

What else does Fitzgerald bring to the table other than age and experience? He has developed a system for growth specifically catered to GPS Insight which has proved successful during the time he has been with the company. The fleet management company has grown at a positive rate of 25% over the last 5 years with projections to continue this growth. Maintaining a standard of perfection with metrics and research along with a fundamental understanding of the vision of the company are key to this growth. 

Fleet management software is a hot area with increased consumerism requiring more and more vehicles to hit the roads. Other companies operating in the same space include Verizon Connect, Freshdesk, and Geopointe. GPS Insight comes at a lower price than Verizon Connect, holds strong reviews, and covers a larger variety of vehicles other than just field service vehicles. GPS Insights’s technology can even be used for heavy equipment like excavators and dump trucks. This is especially interesting because of the incredible growth of infrastructure nationwide which requires thousands of laboring operators of such machinery. In 2020 it was ranked in the top 20 Fleet Management Softwares in the world. A history of solid performance is a good indicator of strong leadership and vision within the company. GPS Insight has more than strong leadership which is demonstrated by actual results of its effectiveness in the field. When the software was used for  the Amerisure FleetAlliance program, the results were significant. Some of these metrics include: 

• 23% reduction in unsafe driving incidents
• 22% reduction in posted speeding events
• 30% reduction in fixed speed events
• 20% reduction in hard braking events
• 22% reduction in acceleration events

On May 24th, 2021, Accel KKR acquired GPS Insight. Accel KKR is a private equity firm specializing in mid-market software and technology enabled service companies. Accel KKR is led by Co-Managing Partners Tom Barnds and Rob Palumbo, and has a proven history of success, best shown through their 32% annualized ROI since 2015. Prior to the acquisition, the firm’s portfolio included two companies in adjacent markets; InSight Mobile Data (“IMD”) and Rhino Fleet Tracking (“Rhino”). As a function of the deal, Accel KKR merged GPS Insight, IMD, and Rhino, further progressing towards their goal of creating an end-to-end platform for fleet management, field services, and GPS tracking. Fitzgerald, who will be assuming the role of CEO for the combined companies, commented  “The GPS Insight platform is bringing exciting changes to the industry such as video telematics, tighter integration to field service management and advanced analytics that transform what fleet management software is capable of doing. Partnering with an experienced software investor like Accel-KKR and combining forces with IMD and Rhino will give our company a broader platform to capitalize on these trends and give our customers new tools to manage their businesses more efficiently and save them money.” 

The acquiring firm's leadership shared a similar optimism surrounding the deal. Phil Cunningham, an Accel-KKR Operating Executive, stated that “The combined businesses have the right scale, talent and resources to capitalize on a key industry inflection point – be it through organic growth and strategic acquisitions”. 

Managing Director Dean Jacobson also commented, “Fleet, field, cameras, analytics: these are all converging to provide actionable insights and deliver significant value to customers. We believe the platform comprising GPSI, IMD and Rhino will be poised to be a powerful, single-point solution leader in the industry.”

Accel-KKR is confident that their new acquisition and merge is primed to offer a uniquely comprehensive solution to the expanding field. GPS Insight, IMD and Rhino combine for over 11,000 total accounts throughout 30-plus industries, serving more than 225,000 vehicles. In an industry projected to reach a size of $34 Billion, a company which combines multiple services from previously independent businesses is poised to become an industry leader. The power of consolidation and process simplification has been proven time and time again, and currently indicates that Accel-KKR’s investment will be a success. 

Quadient Announces the Acquisition of Beanworks, a Leading Fintech in Saas Accounts Payable Automation Solutions

Quadient, an international company specialized in mailing equipment, business process automation, and customer experience management announced on March 23rd its acquisition of Beanworks. Beanworks is a rapidly growing fintech company specializing in SaaS Accounts Payable Automation services. 

Founded in 1924, Quadient employs around 6,000 employees across 29 different countries. They are headquartered in France and are listed in the Euronext Paris securities market with ticker QDT. The focus of their business is in business process/customer service automation and experience management where they serve 500,000 customers worldwide to generate approximately $1.14 billion in revenue annually. Quadient has a goal of creating an end-to-end cloud-based global business communications platform and believe they have done it with this deal. Quadient is led by CEO Goeffrey Godet who is a dual French and American citizen and was previously employed by Flatirons Jouve Group, a leader in digital solutions for banking, insurance, healthcare, and other industries. Godet has helped lead Quadient since 2018.

Beanworks is a newer company created in 2012 and headquartered in Canada with approximately 90 employees. Their cloud platform has won multiple awards for its ease of use and is attractive given its ability to cut invoice processing costs by up to 80%. The state of the art accounts payable platform is the driving force for Beanworks consistent, significant growth. In 2020, Beanworks saw a revenue growth of over 70% year over year. The company is expected to reach an annual revenue of about 7 million euros or over 8 million dollars by the end of 2021.The startup is led by CEO Catherine Dahl, who has over 25 years of operational accounting and management experience. 

After closing the transaction in March, Quadient acquired 96% of Beanworks. The remaining equity is currently held by Beanworks executives, but Quadient has plans to increase its ownership of the company up to 100% in the next few years. The purchase price for this deal was a little over 70 million euros, or 83 million dollars. Quadient did not have to perform additional financing for this acquisition and funded it entirely with their cash reserves.

This deal is part of a larger movement by Quadient to build upon its smart hardware and software solutions. As stated by Quadient CEO Geoffrey Godet, “The acquisition of Beanworks completes Quadient’s software vision communicated in early 2019 to create a true end-to-end cloud based global business communications platform.” The company will be able to combine Beanworks’ cloud-based Accounts Payable capabilities with its own existing business communications management system. This gives Quadient a leg up on the competition, as it has a comprehensive Saas Accounts Receivable and Accounts Payable automation offering to its customers. This transaction follows a similar transaction in 2020 in which Quadient acquired YayPay, the market leader in accounts receivable automation.

“The combined strengths of Beanworks, YayPay and Quadient’s software portfolio set Quadient apart as a software leader and gives us the perfect cloud-based solutions combination to further our mission of helping companies of all sizes to digitize and automate critical business operations” -Quadient CEO Geoffrey Godet.

This transaction will allow Quadient to keep up with emerging business trends. In Europe, e-invoicing regulations are continuing to grow and companies need the infrastructure in place to meet and adapt to changing requirements. Additionally, this acquisition will allow the company to meet the growing demand for cash flow management solutions across the world. Quadient is also going to be able to utilize its large customer base and synergies with their acquired companies in order to accelerate the growth of these new assets. 

As we move forward into an increasingly digitized world, it only makes sense that companies are doing whatever they can to increase their global presence and their software capabilities. These transactions by Quadient are part of a larger trend in which companies are not only merging in order to obtain operational efficiencies, but also to be proactive in order to remain relevant in changing business environments.

Global Payments acquires Zego, powered by PayLease

Global Payments (NYSE: GPN) announced on May 4, 2021 that there were plans to acquire Zego, a private company, which was officially completed on June 10, 2021. 

Global Payments is a leading provider of e-commerce ecosystems and payment solutions to both small businesses and global enterprises. They serve 10 different industries: retail, restaurant, healthcare, financial services, education, gaming, nonprofits, entertainment, petroleum and c-store, and community and events. The Fortune 500 firm is headquartered in Atlanta, Georgia, and boasts a global workforce of over 24,000 people in just under 40 countries, making them well positioned for the increasingly globalized economy. CEO Jeffery S. Sloan has over 25 years of experience in the fintech space, pioneering payments practices in investment banking during his time with Goldman Sachs. 

Zego, powered by PayLease, is a leading provider of real estate software, with the aim to modernize the resident experience and free up real estate management to better provide for their tenants. As a means to this end goal, Zego includes payment services to collect rent. PayLease rebranded to Zego on February 10, 2021, but did not make any changes in their services, products, methods, or otherwise. Zego is headquartered in San Diego, California, and utilizes its surplus of 250 employees to serve over 6,000 residential real estate firms and more than 12 million units across the country. CEO Dirk Wakeham, internally known as the Chief Zegonaut, has plenty of experience in the C-suite in other venture-backed firms such as Layon and Kibo Commerce, and RealPage.

The acquisition is valued at $925 million, which includes a tax asset. Effectively, the deal is worth $830 million. Global Payments will use cash and an existing credit line to fund the acquisition. GPN’s stock dropped on the deal’s announcement, but GPN was in the middle of a twelve day slide. GPN has since leveled off with the official completion of the transaction. 

The acquisition is mutually beneficial. As mentioned previously, Global Payments serves 10 different industries with payment solutions, but real estate is not one of those industries. Acquiring Zego gives Global Payments an easy opportunity to break into the real estate space. Zego only operated with companies and properties in the United States. Zego can now utilize Global Payments’s worldwide reach to expand their real estate portfolio to international properties as well. Coupled with both being players in the payments space, the acquisition is synergistic. 

In general, new technologies are swiftly and greatly enhancing the real estate industry, including the aspect of home-buying. The sector had been relatively unchanged for the last 100 years or so. 

The COVID-19 pandemic created the space to make changes. It forced the world to start adopting electronic means of business and communication far more rapidly and extensively. For example, even California, with its very strict regulations, loosened requirements that necessitated physicality where it wasn’t really necessary.

733Park’s Services

Mergers and acquisitions have become extremely active recently. Many private equity groups as well as industry strategics are supplementing their own M&A teams by finding firms that specialize in deal sourcing and deal origination, such as 733Park’s unparalleled services backed by over 17 years of valuable experience and relationship building.