Vista Equity Partners, a global private equity firm valued at $4 billion that recently bought two leading e-commerce software providers, is looking to make more such acquisitions to give e-retailers a new omnichannel offering in a crowded market, an industry expert says.
“It’s believed that Vista will continue to look for additional technologies to add over the next 12-18 months and round out a complete omnichannel solution set,” says Arthur McManus, senior vice president of provider programs at FitForCommerce.com, which specializes in advising online retailers on technology.
The acquired companies, e-commerce platform provider MarketLive Inc. and order management software provider Shopatron, will be combined to leverage MarketLive’s customer-facing software and Shopatron’s back-end software, says a MarketLive spokeswoman. MarketLive, Shopatron and Vista Equity Partners declined to comment about the deal.
MarketLive has provided e-commerce technology for retailers since 1995, and in May 2014 started offering technology for companies that sell online to other businesses. Shopatron helps retailers and branded manufacturers manage their inventory to fulfill orders efficiently. Shopatron provides technologies that enable in-store pickup, ship-from-store and vendor drop-ship, as well as providing online shoppers visibility of a retailer’s inventory.
Vista, which has acquired 117 companies since its founding 15 years ago, tied for “most consistent performing buyout fund manager in 2015” with four other fund managers ranked by Preqin, a U.K.-based assets industry research firm, a Preqin spokesman says. The other four are Altor, DFW Capital, Inflexion and Odyssey Investment Partners. To achieve the ranking, all the funds had to perform in the top 25% when ranked against similar funds, Preqin says.
The Austin, Texas-based Vista, with $14 billion under management, focuses on investing in data, software and technology companies. Its biggest acquisition was a $4.3 billion leveraged buyout of Tibco Software Inc. in September 2014, the largest such buyout of a private company since BMC Software Inc. agreed to be taken private in a $7 billion deal in May 2013 led by Bain Capital LLC and Golden Gate Capital, according to a spokesman for research firm Dealogic. Other recent deals include a Vista affiliate acquiring Solera Holdings Inc., a software provider to the auto-claims-processing industry, for $6.5 billion in September, and a Vista investment vehicle acquiring the Advanced Computer Software Group, a British health care and software maker, for about $1.14 billion (725 million pounds) on Nov. 25, according to press releases.
Initially, MarketLive and Shopatron, both software as a service (SaaS) companies, will look to leverage each other’s customer base because their client overlap is only about 10%, says Forrester analyst Adam Silverman. MarketLive and Shopatron also will continue to sell their services independently for the foreseeable future to maintain their existing revenue streams, he says. Saas license and delivery models let client companies access software hosted on vendors’ web servers so that they don’t have to run it on their own network infrastructures.
Gartner Inc. analyst Penny Gillespie says MarketLive’s introduction of its Market Focused B2B Solution gives it an edge over rivals. Gillespie says she believes investors are interested in SaaS software providers because they require less work on the part of clients than large licensed software platforms that companies run on their own servers. The key to success for the recent investments will be to drive volume on their platforms from larger companies, she says.
“In the past, midmarket players had to choose single-point solutions that deal only with one specific function,” Silverman says. “Retailers were responsible for the heavy lifting of integrating those solutions into their platforms. Vista sees the opportunity to create a solution that meets the needs of mid-market retailers with a singular integrated solution.”
Top500Guide.com data shows that MarketLive is the e-commerce platform for 14 retailers in the Internet Retailer 2015 Top 1000, while Shopatron provides order management software to Modell’s Sporting Goods, No. 728 in the Internet Retailer 2015 Second 500.