Record-breaking HRtech valuations and deal volumes creating lucrative market for sellers, reveals Hampleton Partners

Venture capital and private equity investors have poured close to $14 billion into HRtech sector in the past 24 months. London, 3 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 Pymetrics, HiredScore 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 ServiceNow, Deloitte ConnectMe™, PeopleDoc, 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.

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 Inc; Invenia 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.”

Download the full Hampleton Partners’ HRTech M&A Market Snapshot here: https://www.hampletonpartners.com/reports/hrtech-report/

Firma: RealWire

Ansprechpartner: Fran Cator
Stadt: Lincoln
Telefon: +44 (0)1522 883640

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