Tioga Venture Blog

Tioga assisted Apax Partners in the acquisition of Vocalcom

On May 17th, Apax Partners announced its acquisition of 65% of Vocalcom. With 40M€ in revenue, Vocalcom is a leading supplier of contact and call centers solutions. Created on France in 1995, it is now an international company with two thirds of its revenue in emerging coutries such as Brazil and North Africa.

Apax Partners will take a 65% ownership of the company alongside Anthony Diniz who will keep a 35% stake.

Tioga Venture assisted Apax Partners in its acquisition of Vocalcom.

Official Press Release (in French).

 

Intercim acquired by Dassault Systems

After a long engagement period, Dassault Systemes has finally acquired leading MES (Manufacturing Execution Systems) vendor Intercim. Tioga Venture was a strategic advisor to Pertinence for its merger with Intercim in 2007. The combination of the Intercim MES solutions and Pertinence manufacturing intelligence's products was key to deliver integrated solutions to customers such as Boeing, Airbus, Sanofi-Pasteur … The resulting combination was this surprising mix where the French management team had a key role in the combined entity, which is unusual in French – US combination of software vendors. Even in 2007, both Intercim and Pertinence had longstanding partnership with Dassault Systemes and its Delmia business unit. The minority investment of Dassault Systemes in Intercim in 2009 was a clear sign of the future. The vision of the integration from design to shop-floor was already part of the Pertinence management vision in 2005! It just took some time to make it happen.

The valuation is $36,5M for the enterprise value (equity and debt) which is good multiple in the current enterprise software sector (current EV/Sales multiple are between 2 and 3).

official press release is here.

Frederic Halley

L’innovation au profit de l’industrie française : l’acquisition de Vizelia par Schneider Electric

L'acquisition de Vizelia par Schneider Electric est un exemple à méditer pour plusieurs raisons.

Rappelons d'abord le contexte : Vizelia est un éditeur SaaS, qui a construit au cours des dernières années « Vizelia  Green », dont l'objectif est de gérer dynamiquement l'énergie des bâtiments. D'un point de vue technologique, la solution est entièrement développée en technologie Microsoft .net ; le mode Saas apporte une grande simplicité et flexibilité, la gestion d'une multiplicité de capteurs dans une multiplicité de bâtiments, et permet ainsi un benchmarking instantané des performances énergétiques.

Dans cette acquisition, la  première source de méditation est le mariage de l'innovation et de l'industrie « classique » ; Schneider, en tant que spécialiste mondial de la gestion de l'énergie, trouve à travers Vizelia une solution différentiante par rapport à ses concurrents. Vizelia peut maintenant déployer sa solution dans le monde entier grâce à la présence internationale de Schneider Electric.

La deuxième source de méditation est la nationalité de l'acquéreur,  à une époque où l'on a tendance à penser qu'un acquéreur de solutions technologiques ne peut être que de l'autre côté de l'Atlantique. Nous avons ici l'illustration d'une forte création de valeur, grâce à la forte présence internationale de Schneider. Cet exemple est une source de réflexion pour d'autres acteurs mondiaux du CAC40, qui pourraient renforcer leur position dans le monde à travers des acquisitions de technologies innovantes.

Tioga, qui a conseillé Vizelia depuis plus de 5 ans, souhaite un grand succès à Vizelia et à Schneider Electric dans la création d'une position de leader mondial sur la gestion de l'énergie dans les bâtiments.

Julien MAZEROLLE

Gemalto H1 Results analysis

Earlier this year, we commented on the acquisition of Netsize by Gemalto (read details here). As this post generated strong interest from our readers, we thought we'd followed up by looking at the Gemalto H1 results just published (available here).

The read is very interesting as Netsize is the elephant in the room in these H1 results: It is not mentioned once in the 17 pages document, however the overall financials of Gemalto seem to have been impacted materially by the acquisition. First the Software and Services group, where Netsize now reports, has grown by 48% to 110M€. That is an increase of 36M€ vs. 2009. Based on the latest information published by Netsize as an independent company, Netsize's revenue were either 90M€ (registre du commerce 2008) or 160M€ (press release). That means that the biggest part of the growth of the software and services revenue was driven by the Netsize acquisition. The Gemalto document also mentions that the acquired businesses contributed 38M€ to revenue in H1 and a loss of 2M€ to operational profit. As Netsize was, revenue wise, the biggest acquisition of Gemalto in H1, these numbers are mostly driven by Netsize. These numbers are also consistent with the information available on Netsize as an independent company.

What's the takeaway :

• Gemalto is incredibly shy for an acquisition that is clearly affecting their overall P&L
• Netsize does not seem to have benefited yet from the acquisition, as the results are in line with the last one published in 2008, even with a possible decrease of revenue over the last 2 years.

We'll see in 6 months what Gemalto will share on Netsize in its annual report.

Gemalto acquires Netsize and shakes the mobile payment sector

On January 5th, Gemalto (Euronext NL0000400653 - GTO) announced the acquisition of Netsize, the European leader in mobile payment and messaging. This event is quite significant for the industry but also for TiogaVenture. It is quite rare to see two of our major customers merge!

For the mobile payment and messaging industry (aka aggregators), it is finally a change in a landscape that had been expected to move for many years. As this sector matured over the mid 00's, consolidation was expected to reach the critical scale in a platform business with high fixed costs. The international leaders Netsize, Mblox, Sybase 365, Verisign and Ericsson IPX have been fighting for key customers across Europe and the US with a myriad of small players entrenched in one or two countries. 

M&A activities started last year with Verisign selling its mobile assets. However, the mobile messaging part of Verisign (formerly known as m-Qube) was left in the cold after the acquisition of the other mobile assets of Verisign by Syniverse. The acquisition of Netsize by Gemalto probably marks the end of independent companies and the era of the big technology group. All key players in this field are now part of a major technology group serving the mobile telecom industry - except Mblox.

In spite of some early comments, the acquisition of Netsize by Gemalto is not that surprising for a couple of reasons : 
- Gemalto was one of the initial investor of Netsize (though Gemventure, the then VC arm of Gemplus) and was still a significant investor in the company
- Gemalto's number one business is the mobile telecom industry. It falls in a related category to the Ericsson, Syniverse and Amdocs who are now the key players in the mobile payment and messaging space.

The open question for Gemalto, and the other major players, is how they are going to innovate and change the game in a field where the SMS domination is fast eroding. The new dominance of Apple in this market is strongly challenging established player by dis-intermediating the payment role of the mobile operator.

To see the official press release, you can check the Netsize website here (English version) or the Gemalto website here (French version).

 

 

Intercim, Sanofi Pasteur and the H1N1 vaccine

Working in the high-tech industry is fun, high-paced, exciting and challenging. However, it sometimes misses that extra 'meaning' thing where you feel you have a real impact on people's life.  It is cool to work on the latest cloud technology, operating system and so on but I don't think that qualifies as really changing people's life. However, you sometimes find situation when stars are aligned and you can do both.

I was involved for a few years in Pertinence (now Intercim) a French software vendors providing advanced analytics to manufacturing companies. We worked with them from the strategic repositioning in 2003 to the merge with Intercim in 2007. During that time, one of the most rewarding part was the involvement with Pertinence's number one customer : Sanofi Pasteur, the number one vaccine manufacturer in the world. Sanofi Pasteur used Pertinence's solution to improve the yield and accelerate the ramp-up on vaccine manufacturing. All the details can be found in the customers' testimonial here. Contributing to improving vaccine production, even very modestly, was one the best usage of technology I have come across in my professional life. With the H1N1 epidemic going through the globe, I was wondering how the vaccine manufacturers were ramping up their production, trying to outrun the virus and get to full scale production as soon as possible. I came across this great video from CNBC addressing that topic.

The video was shot at the Swiftwater (PA)  plant where I have been quite a few times. It is nestled in the woody hills of Pennsylvania close to New Jersey - very nice location close to the Delaware river. Even if Intercim / Pertinence is not mentionned in the piece, It is probably part of the reason why Sanofi Pasteur seems to have been able to ramp-up the H1N1 vaccine production more quickly than others. It still feels good to hear about that - and hope to get the vaccine before I get sick!

Frederic HALLEY

Hats off to Instranet

One of the difficult thing in the marketing of a management consulting firm is that you cannot really discuss your customers and what you have done for them. Part of the job is not taking any credit for what you have done. It makes it even better when we can communicate on the success of some companies we worked with some time ago. Instranet (www.instranet.com) for instance was a customer of us many years ago - high tech years are like dog years. Instranet was started in 1999 by Business Objects employee number 1, Alex Dayon. They started as a content management software and web publishing vendor. Through the early 2000s Alex and his team refocused the company on being a niche CRM vendor focusing on complex customer support such as telecom.

In the summer 2008, Instranet was acquired by salesforce.com for 31M$ to complement its CRM offering. Interesting exit as Salesforce is not a very acquisitive company and hasn't done much shopping in Europe. Hence my congratulations to the Instranet team for what they have accomplished over the last 10 years.

What is strinking in Instranet's story is the quality of its management and, something very rare, its stability. The top 3-7 people who have been instrumental to the success of the company had been there since the very beginning. Interestingly so, most of them are still at salesforce.com close to one year after the acquisition.

You can find an interview of Alex Dayon here : http://www.neteco.com/286174-alexandre-dayon-salesforce-instranet-pme-comptes.html.

Details on the deal are available on the instranet web site.

Frederic Halley

Pertinence / intercim : vision becoming reality

This blog has been very quiet for a long time. It was very appropriate to be back on line for a follow up on one of our recent (?!) post. Frederic Halley, one of Tioga Venture partner, was instrumental in the merger of Pertinence and Intercim in 2007. The new entity has now welcomed a new major shareholder with Dassault Systemes. The vision developed back a few years ago at Pertinence is validated by this move: the convergence of the design and shop-floor system is now a reality.

You can read all the details here : http://www.intercim.com/partners/indexDS.asp

Pertinence séduit Boeing et un acquéreur américain

Le jeune éditeur de logiciels français a été racheté par son concurrent américain Intercim.
« L'Europe et même la France arrivent désormais à faire émerger des quantités de petites entreprises innovantes. Elles ont ensuite beaucoup plus de mal à les faire se développer. » Amélie Faure sait de quoi elle parle. Présidente du jeune éditeur de logiciels Pertinence, son entreprise a été rachetée juste avant l'été par un concurrent américain, Intercim. Certes, ce rachat qui s'est effectué par échange de titres a du sens, puisque les deux éditeurs sont exactement sur le même créneau. Intercim, société privée américaine implantée à Minneapolis, est spécialisée dans la gestion du processus industriel. Pertinence a une approche plus pointue, mais parfaitement complémentaire.

Créée en 2000 par de jeunes polytechniciens, elle a mis au point des logiciels permettant d'améliorer ces processus industriels grâce à une analyse poussée des données issues de la production. L'approche, basée sur une utilisation poussée des mathématiques et des techniques proches de celles de l'intelligence artificielle, est très pragmatique. « Il ne s'agit pas de modéliser le processus industriel. De ces quantités de données, nos logiciels déduisent simplement des règles et de bonnes pratiques. On ne sait pas expliquer pourquoi tel ou tel processus physico-chimique marche, mais cela marche. C'est une démarche empirique », précise Amélie Faure. Bien implanté en Europe, notamment chez Airbus, Pertinence se trouve ainsi renforcé par lntercim qui a déjà mis un pied chez Boeing.

L'avionneur de Seattle a été très intéressé par l'outil pour améliorer la production de ses pièces en composite qui vont devenir majoritaires dans son futur Dreamliner - l'objectif étant d'améliorer la qualité des pièces finales et de faire baisser le taux de rebut. « La fabrication de pièces de composite est extrêmement complexe et s'apparente à de la cuisine avec de multiples paramètres : chaleur dans l'autoclave, vitesse de refroidissement, date de péremption des matériaux... Chez Boeing, nous avons multiplié par deux les objectifs qui nous étaient fixés. Ils ont décidé de déployer notre outil sur sept sites », se réjouit Amélie Faure, aujourd'hui directeur général du nouvel ensemble pour l'Europe.

Pas d'acheteur en Europe
L'histoire est toutefois révélatrice des problèmes que rencontre l'Europe pour garder ses pépites. Certes, l'actionnaire historique de Pertinence, Partech, reste au capital. « Nous voulions rester car nous pensons que l'histoire va être belle », explique Philippe Collombel, « general partner » chez Partech International. Mais il ne s'est trouvé aucun investisseur en Europe pour acquérir Pertinence. « Pour les grands européens du logiciel, qui ne sont pas si nombreux, Pertinence est une société trop petite. Ils ne savent pas s'y prendre », explique Philippe Collombel.

Les industriels ne sont guère plus entreprenants, explique Amélie Faure, qui a eu souvent du mal à convaincre de l'intérêt de la technologie : « Chez les industriels de l'aéronautique, on rencontre un très fort syndrome «not invented here» qui tend à repousser tout ce qui n'a pas été inventé dans les murs. Plus la culture d'ingénieur est forte, plus le syndrome est développé. Il y a en même temps un frein à l'innovation. Notre approche est en effet dérangeante pour des esprits cartésiens et suscite la suspicion. » Désormais américain, Pertinence aura peut-être plus de facilité à convaincre les industriels français...

Frank Niedercorn
2 oct 07