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Update is a blog exploring issues related to mergers, acquisitions, leveraged buyouts, private debt and equity capital raising and other transactions of interest to high-performing business and technology services companies. Authored by the CHILDS Advisory Partners team and its guest bloggers, Update draws on decades of Wall Street experience, work as successful entrepreneurs, and the sector-focused expertise that have given CHILDS a reputation as the preferred investment banker in the middle market. Offering strategic insights and practical approaches, Update fosters productive thought among CEOs, business owners and private-equity executives.

Lots of Activity in the Cloud

Posted by Don Holbrook on February 10th, 2012  |  No Comments »

Today Oracle announced the $1.9 billion acquisition of Taleo, a cloud based HCM software firm. This announcement comes only 2 months after Oracle’s biggest rival, SAP, announced its acquisition of Successfactors for $3.4 billion. Successfactors is a cloud based employee performance management software located in the Bay Area. In addition to this activity, it is expected that Workday, a Saas based HCM software maker will file for an IPO some in the first half of 2012. Workday was founded Dave Duffield and Aneel Bhusri who were also the founders of Peoplesoft which was acquired by Oracle for $10.3 billion in January of 2005.

This activity validates the interest levels we saw in 2011 for Saas and Cloud based consulting firms. Large consulting firms have been proactively seeking to acquire firms that have Saas or Cloud computing skills to bolster their current offerings or add new practice areas to stay ahead of the demand curve for such skills. As with the multiples being paid for firms such as Successfactors and Taleo, we are seeing buyers willing to pay a hefty premium for Saas and Cloud computing skills.

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Atlanta Capital Connection

Posted by Alan Bugler on February 8th, 2012  |  No Comments »

CHILDs sponsored the Atlanta Capital Connection today which was attended by over 100 private equity firms. The tone of the conference was very positive with private equity firms seeing increasing deal flow since the beginning of the year.

I personally met with over 20 PEGs that are interested in the human capital management sector and are very motivated to look at growing companies with quality management teams. Private equity firms typically invest in companies with more than $5 million in EBITDA but there is a smaller group that focus on companies with $2 -$5 million in EBITDA. Both of these groups are actively searching for investment opportunities.

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