Record-Breaking HR Tech Valuations and Deal Volumes Creating Lucrative Market for Sellers

Read Time3 Minute, 5 Second

• Venture capital and private equity investors have poured close to $14 billion into the HRtech sector in the past 24 months

London, UK – 03 December 2019. The first half of 2019 registered the largest ever transaction in HRtech history, when private equity firm Hellman & Friedman acquired Ultimate Software Group in May for $11 billion. Hampleton Partners’ latest analysis of global HRtech mergers & acquisitions activity shows that this is indicative of overall momentum in the sector, which also registered a spike in transaction volume with 66 recorded transactions and higher revenue multiples at 3.4x in 2H 2019.

Strategic acquirers were also active, including Salesforce, which recently acquired field service management ClickSoftware for $1.4 billion.

Axel Brill, director, Hampleton Partners, said: “2019 has been a great year to sell a company in the HRtech space. Transaction volumes, multiples and valuations are the highest levels monitored for years.

“One of the main reasons for current levels is the high demand for attractive assets from private equity investors, leveraged by cheap debt. Indeed, in the past two years, venture capital and private equity investors have poured close to $14 billion into this market.”

HRtech M&A trends

Rise of behavioural analytics and AI: Traditional recruitment and applicant tracking systems are viewed by new market entrants as ‘broken’. Companies such as PymetricsHiredScore and HireVue are using a range of new technologies, including AI filtering and behavioural testing, to offer automated, ‘unbiased’ high-volume recruitment and assessment technology.

Rapid adoption of Employee Experience Platforms: companies are rapidly deploying EEPs such as those offered by ServiceNowDeloitte ConnectMeTMPeopleDoc, and PeopleSpheres to provide easy-to-use, sophisticated platforms which benefit both employers and employees. The platforms offer a wide-range of functionalities, including on-boarding new employees, training and development through to compensation.

See also  Veritone to Acquire Broadbean

Growth of HR analytics to measure and reward performance: growing adoption of HR analytics has seen payroll data shift to strategic importance as it provides insight into the workforce and individuals to inform more evidence-based decision-making.

Top HRtech acquirers

Assure Software has been the most prolific acquirer over the past 30-months, with 10 acquisitions including Payroll Maxx and Austin HR.

Bullhorn made five acquisitions over the same period, including Erecruit IncInvenia and Talent Rover.

Axel Brill continued: “As for the M&A outlook, we see strategic acquirers continuing to target HRtech entities to expand their product scope horizontally and cover all areas of digital transformation – with particular focus on big data analytics, cloud-based platforms, payment processing, resource planning and AI recruitment technologies.

“We expect the sector’s record-breaking metrics to continue on their upward trajectory. The sector is set to remain stable and strong over the long-term, as the need to improve business insights, resource allocation and employee engagement and productivity will remain imperative to future business success.”

About Hampleton Partners

Hampleton Partners is at the forefront of international mergers and acquisitions and corporate finance advisory for companies with technology at their core. Hampleton’s experienced deal makers have built, bought and sold over 100 fast-growing tech businesses and provide hands-on expertise and unrivalled advice to tech entrepreneurs and companies which are looking to accelerate growth and maximise value.

With offices in London, Frankfurt, Stockholm and San Francisco, Hampleton offers a global perspective with sector expertise in: Automotive Technology, AI, Cybersecurity, Fintech, Healthtech, IoT, VR and AR, Digital Marketing, Enterprise Software, SaaS & Cloud and E-Commerce. Download sector reports here.

See also  isolved Acquires Workplace Giving and Volunteering Platform

Follow Hampleton on LinkedIn and Twitter.

About Post Author

HR Tech Guy

Let's just say I'm an HR tech news junkie. HR techies unite!


»Diversity and Inclusion Job Board

»Free HR Software Advice

»RecTech PR Newswire

»HR News

»Recruiting Newsletters

»HR Tech News

»HR Freelancers

»Jobs with Relocation Assistance

»Diversity Hiring News

»Recruiter Ebooks