Tim Mueller’s Transaction Analysis: New IT M&A Deals Nov. 8

• Now You See Me, Now You Don’t: ConvergeOne went public earlier this year, choosing a combination with an SPAC as the fastest and cheapest path to do so. This was a rare development–IPOs are increasingly uncommon, especially in the tech space (according to EY, IPO activity for the first nine months of 2018 fell to 1,000–an 18% decrease from the previous year). It’s much more common to see private equity firms selling to each other as assets grow into and out of their target valuation ranges.
• Moving On Up: At the time ConvergeOne announced its intention to go public, it reported estimated 2018 revenues of $1.2B and adjusted EBITDA of $144M . During its most recent earnings call, the company upped its guidance for the year–estimating annual revenue of between $1.55B and $1.65B. 
• Happy Ending: This deal sees ConvergeOne’s current private equity sponsor and majority shareholder, Santa Monica-based Clearlake Capital, tendering its shares and realizing an exit. In a statement, firm managing partner and co-founder Behdad Eghbali reported the achievement of approximately 400% EBITDA growth since ownership began in 2014.
• 1+1+1+1… = $1.8B: This deal is the culmination of a “buy-and-build” strategy stretching far back into ConvergeOne’s history and executed masterfully under the guidance of president and chairman John McKenna. John is no stranger to success–he was a senior executive at Businessland, JWP and led Siemens’ $500M+ US services business. What he’s done here–successfully buying and integrating multiple acquisitions and securing significant value-add on exit–is the paragon of an accomplished resume.

For more information about this transaction, click here to read the press release.