TMT Blog – September 2008

Date

Welcome to the September report on M&A activity from Clearwater’s Technology team. This month it seems almost impossible to address any subject other than the worsening global financial situation and what impact it may have on the Technology sector as a whole.

Many firms including Misys and a number of the Indian service providers have been directly impacted by the woes of their US financial services clients but it is now becoming increasingly clear that the sector as a whole is unlikely to escape the effects of the slowdown, despite having been something of a “safe harbour” for investors over the last year or so. If you’re looking for the silver lining to the cloud, Clearwater’s Tech team are hearing again and again when meeting with large corporates with cash reserves that they will continue to make acquisitions, and that whilst most will obviously be looking for a bargain, for quality assets with good customer bases and a strong sales message, a strategic price is still possible.

Deals completed in the UK

Defence and aerospace contractor Ultra Electronics announced that it had acquired UK business Audiosoft Limited in a £5 million deal. Audiosoft provides data recording and analysis solutions that allow organisations to record, preserve and to rapidly locate important information. Its systems are used in a variety of markets including defence, air traffic control, law enforcement, emergency services, court rooms and national security.

UK communication networks specialist telent announced that it would acquire Premises Network Management plc, a specialist provider of telecommunications system integration services. The acquisition is in line with telent’s strategy to grow its presence and service offering in the telecoms sector. Earlier this year Clearwater advised Alan Campbell Group, a communication infrastructure services provider on its sale to telent.

Charteris plc, a provider of IT solutions to the financial services, media, public sector, retail and legal sectors has acquired SIG Consulting Limited. SIG is an ERP solutions provider specialising in the Dynamics AX platform and is a Microsoft Gold Partner.

Travel technology supplier Comtec announced that it had acquired CRM software developer Pro Eq Limited. Pro Eq develops iSys, the only CRM solution which was designed specifically for the travel industry. The transaction represents the third acquisition that Comtec has made since Clearwater advised the business on a recapitalisation deal with RJD Partners earlier this year.

Safe Computing, a UK provider of HR, payroll and recruitment agency solutions, has acquired Topaz Systems, a competitor. The combined business will have turnover in excess of £10 million and more than 200 customers.

US semiconductor manufacturer Intel Corporation has acquired UK mobile Linux development and services business OpenedHand Limited, the transaction size was not disclosed. The UK-based embedded Linux services team will join the Intel Open Source Technology centre and will focus on Moblin development for mobile internet devices and other mobile devices.

Other Deals

WebMD Health Corporation, the leading US provider of health information, announced that it would acquire QualityHealth.com and its owner Marketing Technology Solutions Inc, for $50 million in cash. The acquisition will add performance-based marketing programs to WebMD’s portfolio and extends the breadth of its offerings to the biopharmaceutical and healthcare markets.

South African ICT group Datatec Limited announced that it would acquire a 50.01% stake in Inflow Technologies Private Limited, an Indian ICT distribution business. The remaining shares will continue to be held by management and other existing shareholders. Inflow has presence in nine key Indian cities and will provide Datatec with a good entry point into the region.

US IT security software business McAfee Corporation announced that it will acquire Secure Computing Corporation in a $465 million deal. Secure Computing is a provider of network security with a product portfolio spanning businesses of all sizes. The acquisition will enable McAfee to extend its position in security risk management.

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