THE BIG DEAL
Lexipol Receives Growth Investment from GTCR
Why it Matters: Perhaps the most active segment in 2021 was the training, compliance and policy management technologies focused on law enforcement and first responders. GTCR’s investment in Lexipol follows transactions in Q2 2021 with other large players in the space including NEOGOV (backed by Warburg Pincus and Carlyle) and Vector Solutions (backed by Genstar Capital, Insight Partners and Golden Gate Capital). We believe the Lexipol transaction will accelerate the activity in a consolidating segment of the market — as an example, NEOGOV recently announced three acquisitions (PlanIt Schedule, Agency360 and CueHit), while Vector Solutions announced two of its own (Envisage Technologies and EVERFI’s Campus Prevention Network).
NOTABLE DEALS
Cardinality.ai Acquires ClearCycle
Why it Matters: Improving the quality and efficiency of citizen services through software solutions is a familiar objective amongst many public-sector technology platforms. Cardinality.ai is executing this mission in the areas of workforce and health and human services through their AI- and low-code-enabled cloud applications. ClearCycle expands Cardinality’s existing software suite, bringing to bear nearly 40 years of expertise in claims and disbursement management and compliance reporting for regulated industries such as health care and insurance.
Zencity Acquires Civil Space
Why it Matters: Zencity had an active year, announcing a fresh round of investment, the acquisition of Elucd in Q1, and the acquisition of Civil Space in Q4. The company has grown rapidly as it has in many ways defined the next generation of citizen feedback technology, and the Civil Space acquisition extends its capabilities beyond community listening to proactive community engagement. Citizen feedback, while an emerging category, is clearly growing in importance and accordingly has seen its fair share of activity in 2021, particularly in the public safety market — beyond Zencity’s acquisitions, both NEOGOV (CueHit) and Axon (My90) have made recent acquisitions.
AgileAssets Acquired by Trimble
Why it Matters: The federal infrastructure bill has earmarked more than $100 billion for upgrading highways, roads and bridges, and spurred a wave of investment and M&A in the enabling technologies used to design, build and operate this infrastructure. Trimble’s acquisition of AgileAssets (a provider of asset and operations management solutions to state departments of transportation) is indicative of the type of activity we believe we will continue to see in the coming quarters.
T2 Systems Acquired by Verra Mobility
Why it Matters: Parking management is a critical capability within the transportation and mobility ecosystem, and T2 Systems, a portfolio company of private equity firm Thoma Bravo, has been a mainstay in parking management software and hardware solutions for nearly 30 years. Through the acquisition, Verra Mobility, a publicly traded smart transportation provider, adds parking management to its core of photo enforcement and toll management technologies. We believe the acquisition is indicative of a trend in smart transportation where we will continue to see historical hardware vendors dive further into software and data to unlock new use cases and create new customer cross-sell capabilities.
Versaterm Acquires Komutel
Why it Matters: Versaterm has established itself as one of the most active acquirers in public safety, and its acquisition of Komutel marks its sixth since 2020. Komutel provides communications solutions for emergency services call takers, adding important technology and expertise to Versaterm’s growing public safety suite, including middleware to facilitate a more seamless transition between 911 call origination and dispatch. This deal is one of several recent transactions in Next-Generation 911 technology as emerging and established public safety platforms alike look to facilitate the market-wide transition to digital NG911 infrastructure.
Springbrook Software Acquires MAGIQ Software
Why it Matters: MAGIQ Software is Springbrook Software’s second acquisition since Accel-KKR’s carveout of Springbrook out of Accela, which was completed in early 2020. The New Zealand-based MAGIQ’s cloud-based platform, anchored around finance workflows, is complementary to Springbrook’s cloud-based ERP suite (including its Cirrus financial cloud platform, launched in early 2021) and expands the company’s geographic footprint. Together, the two companies will serve a combined 1,700-plus public-sector agencies across seven countries.
Aladtec Acquired by TCP Software
Why it Matters: Aladtec’s acquisition by TCP Software (formerly branded as TimeClock Plus) joins other recent transactions in the public safety-focused workforce, training and policy management segments, which saw a lot of activity in 2021 (e.g., NEOGOV, Vector Solutions, Lexipol). Aladtec provides employee scheduling and workforce management solutions purpose-built for first responders across law enforcement, fire, EMS, dispatch and health care. Aladtec’s industry expertise and 2,400-plus customers expand TCP’s presence in the increasingly important end market of public safety, adding to TCP’s coverage of regulated end markets across both the public and private sectors.
Motorola Solutions Acquires 911 Datamaster
Why it Matters: Motorola Solutions is a household name in the public safety technology market and has been an active acquirer in the space for more than a decade. Motorola’s most recent acquisition of 911 Datamaster, a provider of NG911 solutions specializing in 911 call routing and GIS location validation, adds to their CommandCentral software suite, which aims to provide a modern, integrated and 360-degree view of an incident — a similar strategic approach to that of other platforms in the public safety market that we expect will drive strong M&A and investment activity in the coming years.
Cellebrite Acquires Digital Clues
Why it Matters: Digital Clues is Cellebrite’s first acquisition since going public via its merger with TWC Tech Holdings, a special purpose acquisition company (SPAC) backed by True Wind Capital. Digital Clues provides open source intelligence solutions, enabling law enforcement and investigative teams to gather data from various sources to uncover and enrich digital evidence throughout an investigation. As we have seen recently with other segments in public safety (e.g., CAD and RMS), we expect there will be growing activity in the investigations and evidence management segments in the coming quarters as the large public safety platforms continue to build out end-to-end platforms that cover the full incident life cycle from the initial 911 call to post-incident resolution.
Comtech Telecommunications Receives $100M Strategic Growth Investment
Why it Matters: Comtech Telecommunications (NASDAQ: CMTL), a provider of NG911 and wireless communications technologies, received a $100 million strategic growth investment from White Hat Capital Partners and Magnetar Capital. This deal is indicative of the recent acceleration in activity around NG911 technology as agencies look to modernize their emergency response infrastructure across software, hardware and increased connectivity. The investment will enable Comtech to continue building its presence in the U.S. and the U.K., accelerate new customer acquisitions in NG911 and support strategic M&A.
Jeff Cook’s firm, Shea & Co., served as an adviser for the T2 Systems and Lexipol deals.
