autotech m&a overview 1h2019 partners...mobility & fleet management solutions, it is safe to...

1 | 11 Automotive Technology M&A Overview 1H 2019

INTRODUCTION

What does 2019 hold for automotive technology?

Vying for dominance amid a flurry of emerging

technologies and markets, every OEM, Tier 1 supplier,

autotech start-up and mobility player is keen to know.

At a glance, 2018 showed activity in virtually every

functional area of the car, from connectivity hardware

to mobile parking and mobility apps. The broader

automotive industry also experienced shocks that

partially upended a few previously accepted truths

about the sector. In July, long-time FCA leader Sergio

Marchionne – also chief architect of the company’s

remarkable and decade-long turnaround – passed

away, leaving a sudden gap in an organisation since

.

long defined by its talismanic maestro. Then, in

November, the head of Renault-Nissan Carlos Ghosn

– another leader credited with unrivalled industry

acumen – was arrested in Tokyo on fraud charges.

Automakers, suppliers and technologists, however,

march on. Adding to previous trends, 2018 saw the

highest levels of venture capital investment in car-

related businesses. Disclosed M&A values may be

.lower than in previous years, but clearly do not speak

for the myriad of deals across dozens of applications

that have continued to close at very attractive

multiples.

-

5

10

15

20

25

30

35

40

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2014 2015 2016 2017 2018

Total number of Autotech M&A deals 2013 – 2018


M&A SUMMARY

Our Autotech report covers the two-and-a-half-year period between July 2016 and December 2018. All totals and median values refer to the

entire period unless otherwise stated. Median multiples plotted in the graphs refer to the 30-month period prior to and including the half year.

Stable deal volumes

With a final total transaction count of almost 100

deals across enterprise applications, embedded

software & systems, automotive e-commerce and

mobility & fleet management solutions, it is safe to say

that 2018 represented another strong year for M&A

activity in automotive technology. This falls in line with

a remarkably stable trend: since 2016, each year has

tallied within a handful of deals of the others.

Deal values for 2H2018, meanwhile, dropped to their

lowest aggregate total in over five years, reaching just

over $1.5 billion. Given the comparatively low number

of disclosed transaction values, this figure does not

signify lower valuations or diminished investor appetite

(though a big-ticket print in the final half of 2018 is

conspicuously absent from the data set). As was

predicted by Hampleton, the tail-end of 2018 also saw

slightly dampened activity from OEMs and T1s,

although Renault, Ford and Volkswagen inked

autotech M&A deals in this time. Yes, we are moving

toward standard and accessible ADAS features (until

.

recently only for luxury cars), and advances are made

almost daily in electric, connected and autonomous

vehicles. Yet these technologies are being developed

by huge companies and disruptive start-ups alike.

Consequently, disclosed venture capital funding to

automotive start-ups totalled at least $8 billion in 2018

– almost six times the M&A figure. One thing is clear:

deals like Intel’s behemoth acquisition of Mobileye, or

Samsung’s plunge into automotive with its Harman

pickup, will become more frequent as this industry

continues its drive forward.

3.1x

2.1x

1.3x

3.0x

1.2x

11.2x

13.4x13.4x

15.5x 15.5x

-

10

20

30

40

50

60

2H 2016 1H 2017 2H 2017 1H 2018 2H 2018

Transaction Volume Trailing 30 Month Median EV/S Trailing 30 Month Median EV/EBITDA


AcquirerAcquisitions

in 30 months Three most recent acquisitions

8

SportStadion motor racing event ticketing services

auto-live.hu online automotive news

AutoNews Medien GmbH online automotive news

5

Clearplan automotive repossession management SaaS

CarsOnTheWeb European online B2B car auctions

STRATIM Systems fleet management SaaS

4

RedCap Technologies automotive customer logistics SaaS

Colimbra data management software & services

Autodata UK online automotive technical reference content

3

Transvoco French ride sharing mobile app

ATS over-the-air ECU updating SaaS (Daimler as part of HERE Maps)

Flinc GmbH ride-sharing mobile app

3

KUM Chinese automotive connecters

nuTonomy self-driving vehicle software

Movimento automotive firmware update software

3

ELEAD1ONE automotive CRM SaaS

Progressus Media mobile marketing SaaS

Dasboard Dealership Enterprise dealership analytics reporting SaaS

3

Thermeon Worldwide trucking hauling scale management SaaS

Profit Tools TMS trucking & transportation software & SaaS

Creative Information Systems truck hauling scale management SaaS

2Carizy used vehicle marketplace

Intel Corporation (assets) embedded vehicle software R&D

193

Number of acquirers who

made >1 acquisition

28

Number of active acquirers

during the past 30 months

TOP ACQUIRERS


TRENDS IN AUTOMOTIVE TECHNOLOGY

• Continued push by suppliers and OEMs to buy and own the foundation blocks of

autonomous and connected vehicle technology.

• OEMs fiercely pursuing mobility solutions to hedge against an uncertain future of

personal vehicle ownership, including ride-sharing apps.

• Interest in the market for dealership management and other enterprise software &

CRM solutions, to ease the marketing and sale of vehicles.

• The new normal: technology leadership in the sector hailing from private equity buyers, not

just from OEMs and T1s

Fewer big-ticket deals lead to low aggregate

transaction value in autotech M&A

With an aggregate transaction value of just over $1.5

billion, autotech has recorded the lowest disclosed sum

since 2013. That said, certain undisclosed deals in 2018

are known to have commanded sizeable price tags,

such as DiDi’s rumoured $1 billion buy of 99 Taxis,

and Stone Point Capital’s

$3 billion purchase of

Mitchell International.

$ 1.4 bn $ 1.8 bn

$ 4.0 bn

$ 8.0 bn

$ 15.3 bn

$ 1.3 bn

2013 2014 2015 2016 2017 2018


Financial sponsor deal share rises

This year again PEs played an outsized

role in M&A markets, with 2018 recording

almost one quarter of all activity driven by

a financial sponsor as buyer. These deals

have run the gamut in size and subsector

– the largest being June’s Gores Group

buyout of Verra Mobility for $1.3 billion,

at an attractive 17x EV/EBITDA multiple.

European investors recorded another dominant half-year of regional deal-

making, accounting for the vast majority of deals involving European

autotech targets. 66 per cent of European targets were acquired by a

European buyer in the last 30 months, compared to the 29 per cent of

targets snapped up by North American investors. This reflects Europe’s

historical strength in automotive technology. Nevertheless, targets from

North America dominated the charts, accounting for just over half of all

acquisitions, with Rest of World (mostly Japan) rounding out the total

with around one eighth of all deals.

0%

25%

50%

75%

100%

2015 2016 2017 2018

Private Equity Strategic Buyers PE Share (%)

Private equity transaction share of autotech M&A

GEOGRAPHICAL BREAKDOWN

66%

Europe

36%

North

America

52%

RoW

12%

Headquarters of

autotech targets

Europe

66%

North

America

29%

RoW

5%

Headquarters of acquirers

of European targets


Spectris goes long on vehicle simulation

Test and measurement powerhouse Spectris made

a key acquisition into the rapidly developing field of

automotive simulation and testing systems and

software, by picking up VI-grade GmbH in July

2018. VI-grade is a global leader in software and

hardware that bridges the gap between simulation

and the real world, and boasts a long customer list

of prominent OEMs and Tier 1 suppliers. With this

acquisition, Spectris will be better placed to

leverage its existing automotive testing businesses –

notably the Millbrook facility – and capture a

lucrative market segment that includes innovation in

ADAS and autonomous vehicle development.

Enterprise

Applications

30%

Internet

Commerce &

Content

17%

Embedded

Software &

Systems

24%

Mobility & Fleet

Management

29%

SUB-SECTOR BREAKDOWN

LARGEST DISCLOSED DEALS OF 2018

$1.3 billion

21 Jun

The Gores Group acquires Verra

Mobility (6.6x EV/S)

$500 million

02 May

Aptiv acquires KUM

$350 million

11 Oct

Greenbriar Equity acquires Spireon

$350 million

08 Mar

Vitruvian Partners acquires

EasyPark (4.7x EV/S)

$236 million

24 Oct

Cubic Corporation acquires

Advanced Traffic Solutions

$186 million

31 Jul

Phoenix Equity Partners acquires

Nexus Vehicle Management

$165 million

14 Feb

Cars.com acquires Dealer Inspire

(41.3x EV/EBITDA)

$121 million

19 Dec

Volkswagen acquires WirelessCar

(2.9x EV/S)

$117 million

17 Jul

Palamon Capital acquires

FairConnect

ACQUIRED

Enterprise ApplicationsAuto CRM, dealership management systems,

automotive PLM software.

Internet Commerce & ContentOnline vehicle classifieds, vehicle auction

websites.

Embedded Software & SystemsADAS, connected car systems, self-driving

software.

Mobility & Fleet ManagementRide sharing & hailing, e-mobility, parking

applications, fleet management systems.

ACQUIRED


$3 billion (rumoured)

26 Apr

14 Feb

$165 million

$186 million

31 Jul

$236 million

24 Oct

07 Dec

$27 million

ENTERPRISE APPLICATIONS

NOTABLE TRANSACTIONS OF 2018

ACQUIRED

Enterprise applications continue to power auto

business

There is continued activity in this longstanding

subsector as actors aim to develop and finetune

enterprise software in the automotive vertical. The

largest transaction in the second half of 2018 was

Cubic Corporation’s $236 million pickup of

Trafficware, a provider of traffic management

hardware and software for public authorities. For

Cubic, a defence contractor and transportation

system provider, the move bolsters its traffic

management portfolio at a time when smart

infrastructure solutions are becoming increasingly

necessary for the vehicles that will one day be using

them. Just a month prior came the Gores Group

acquisition of Verra Mobility for $1.3 billion, another

company that provides traffic and tolling solutions.

The second largest transaction in the space was by

UK-based private equity Phoenix, as it made a $186

million play for fellow British outfit Nexus Vehicle

Rental. Nexus is a provider of software to corporates

for B2B vehicle sourcing, allowing them to effectively

offer mobility solutions to their employees through

Nexus’ IRIS portal.

Online vehicle marketplaces get closer to the

dealer

Two US-listed online vehicle platforms made moves in

2018 to gain a place in the dealership field and an

extra channel for customer interaction. In February,

Cars.com made a $165 million acquisition of Dealer

Inspire, a provider of automotive advertising SaaS and

services. This was followed by TrueCar’s December

pickup of DealerScience, a dealership retail software

provider, for $27 million.

7

16

14

17

15

2H 2016 1H 2017 2H 2017 1H 2018 2H 2018

Transaction volume


INTERNET COMMERCE & CONTENT

15 Mar

09 Jan

19 Oct

$103 million

24 Oct

15 Nov


ACQUIRED

Internet sales of vehicles grow, spurring M&A

With prospective vehicle owners now spending

around 60% of their time searching online according

to Cox Automotive, the internet as a channel for auto

sales is becoming more important than ever. KAR

Auction Services, who have inked five deals in the past

30 months, made the biggest disclosed acquisition of

the year in this subsector with their purchase of B2B

car auction website CarsOnTheWeb for just over

$100 million. Online giant eBay, which saw its US e-

commerce market share drop below 1% this year,

revved up its automotive revenue with its purchase of

Motors.co.uk from Cox Automotive. Although terms

of the transaction were undisclosed, the combined

entity will be a leader in the UK market, and opens up

eBay to a potential customer base of 5,000 dealers on

the Motors.co.uk platform.

In January 2018, private equity also expressed interest

in this industry as Hg acquired German leader

MeinAuto.de for an undisclosed sum. Finally, in this

subsector’s only OEM deal of the year, Renault pulled

the trigger in November on Carizy, a used vehicle

marketplace. Renault’s hope is to capitalise on the fast-

growing used vehicle industry between private

individuals, opening another lucrative revenue stream

for the French automaker.

Car-related apps spur automotive e-commerce

With smartphones penetrating virtually every aspect of

consumer behaviour, it follows that this trend extends

to automotive internet commerce. Some matchups, at

first glance unlikely, exemplify the importance of this

channel: innogy SE, a blue chip German utilities

provider, made a $40 million bet on California-based

Recargo, a start-up behind a popular electric vehicle

charging station search application. Valued at around

20 times sales, the purchase gives innogy SE a key

foothold in the US energy market, with scores of

electric vehicle drivers, app users and charging stations

to add to its portfolio.

10 9

7

4

9

2H 2016 1H 2017 2H 2017 1H 2018 2H 2018

Transaction volume


(Automotive

Unit)

EMBEDDED SOFTWARE & SYSTEMS

13 Jul

02 May

17 Jul

24 Jul

19 Dec


ACQUIRED

$117 million

$105 million

$500 million

$121 million

(2.9 EV/S)

Connectivity: the name of the game for 2018

The connected car is widely hailed as the necessary

precursor for autonomous vehicles, while also

providing passengers increasingly standard – and

required – features, like internet, next-generation

infotainment, and safety features. The core technology

that powers these features has seen a spike in demand,

as exemplified by VW’s late-year purchase of

WirelessCar for almost 3 times revenue. WirelessCar,

the former connectivity technology division of Volvo

Cars, will bring technical additions to VW, but also

allow the German OEM to provide value-add services

that are only possible through vehicle connectivity.

Another connectivity deal was Palomon’s acquisition of

FairConnect, the Swiss manufacturer of telematics

sensors for the automotive industry. The biggest such

purchase came early in the year as Aptiv snapped up

Chinese advanced interconnect specialist KUM in a

landmark $500 million deal for the newly refocused

Tier 1 supplier. Telit’s automotive unit was also sold to

TUS International, the Chinese automotive supplier, in

a deal worth $105 million. The unit, which produces

semiconductors for automotive applications, is part of

.

TUS’s aim of delving into the in-vehicle processing

space, with the Telit assets a significant boon to its

cloud computing capabilities. On the software side,

connected vehicle networks are also earning keen

interest from automotive acquirers: in January, Zurich

Insurance purchased Bright Box in a move that brings

the insurer into the vehicle and closer to the data it

generates.

9

13

15

7

13

2H 2016 1H 2017 2H 2017 1H 2018 2H 2018

Transaction volume


MOBILITY & FLEET MANAGEMENT

16 Jan

04 Jan

08 Mar

11 Oct

08 Nov


ACQUIRED

$350 million

$105 million

$1 billion (rumoured)

$350 million

Another strong year for fleet management

systems

This segment's largest disclosed deal of 2H 2018 was

Greenbriar Equity’s buyout of Spireon for $350

million. Spireon, previously in the portfolio of Bertram

Capital, is a provider of GPS fleet tracking systems

used in both the automotive and commercial transport

verticals. This was not the only acquisition in this space

performed by a private equity buyer: in July, HQ

Equita bought fellow German company r2p, a provider

of fleet management hardware and software. HQ

Equita’s stated goal here is to capitalise on the

intelligent transport market, projecting industry growth

in the double digits.

Also active in this space was Trimble, as it made

another fleet management acquisition – this time

nabbing Brazilian on-board telematics provider Veltec.

Veltec’s technology allows fleet operators to monitor

driver and in-cab behaviour, adding to Trimble’s

impressive technology portfolio created, in part, by the

32 transactions the company has made in the past five

years.

Vehicle manufacturers diversify from passenger

car production

Early in 2018, Daimler led a $175 million equity round

in Taxify, Estonia’s impressive response to Uber.

Meanwhile, BMW took over Parkmobile to become

the largest provider of mobile parking in the United

States. In November, Ford, too, caught the bug with its

acquisition of Spin, an electric scooter sharing platform

with a presence in multiple cities, in a motivated effort

to expand its micro-mobility offering. This wasn’t

Ford’s first move in the space, occurring four years

after the Dearborn OEM took over Chariot, a shuttle

hailing service operating in San Francisco.

14

12

15 16

10

2H 2016 1H 2017 2H 2017 1H 2018 2H 2018

Transaction volume


CONCLUSION & CONTACTS

About the Author

David runs Hampleton Partners’ automotive practice and has over 30 years’

experience in the sector, having previously transacted in various roles including

working for a global OEM, serving as CEO of a leading content management

supplier to OEMs and dealers around the globe, and working with leading T1

suppliers on advanced connectivity solutions.

David has been completing auto-focused deals for more than 25 years – the last

several years with Hampleton Partners – focusing on sell-side M&A, buy-side

consultancy including divestment and M&A, as well as raising growth capital in the

autotech and AI sectors. David advises and sits on the Board of several autotech

and/or AI firms.

If you are interested in speaking to David about our autotech sector, please reach

out using the email address on this page.

About HampletonPartners

Hampleton Partners is at the forefront of international Mergers and Acquisitions 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 international advice to tech entrepreneurs and the companies who are

looking to accelerate growth and maximise value.

With offices in London, Frankfurt and San Francisco, Hampleton offers a global perspective with sector expertise

in: Automotive Tech, IoT, AI, Fintech, High-Tech Industrials, Cybersecurity, VR/AR, Healthtech, Digital Marketing,

Enterprise Software, IT Services, SaaS & Cloud and E-commerce.

David Riemenschneider

Director

[email protected]

We believe 2019 and 2020 will remain very strong for both acquisitions and funding in the sector, despite the

storm clouds on the horizon in various regions around the world which may provoke a reduction in vehicle sales

volume. Our rationale is that spending in the sector will not be impacted by short-term market turbulence as all

players in the auto tech sector continue to push to be the market leader in the new world order of electrification,

connectivity, autonomy, and mobility. This will encourage start-ups with innovative ideas to pursue funding, and

global giants from all sectors, including financial, to continue to acquire and/or invest and fund. In summary, we

foresee a strong autotech M&A market over the next 24 months, with stable EV multiples and a sharply

growing capital raise market with increasing valuations.

mailto:[email protected]

Hampleton provides independent M&A and corporate finance advice to owners of Autotech, Internet, IT Services, Software and High-Tech Industrial companies. Our

research reports aim to provide our clients with current analysis of the transactions, trends and valuations within our focus areas.

Data Sources: We have based our findings on data provided by industry recognised sources. Data and information for this publication was collated from the 451

Research database (www.451research.com), a division of The 451 Group. For more information on this or anything else related to our research, please email the

address provided below.

Disclaimer: This publication contains general information only and Hampleton Ltd., is not, by means of this publication, rendering professional advice or services. Before

making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. Hampleton Ltd. shall not be

responsible for any loss whatsoever sustained by any person who relies on this publication.

©2019. For more information please contact Hampleton Ltd.

Hampleton produces regular reports on M&A activity in the following sectors

Healthtech

Industry 4.0

Internet of Things

IT Services

AR/VR

Artificial Intelligence

Automotive Technology

Cybersecurity

Digital Marketing

E-Commerce

Enterprise Software

Fintech

You can subscribe to these reports at http://www.hampletonpartners.com/research

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autotech m&a overview 1h2019 partners...mobility & fleet management solutions, it is safe to...

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