October 3, 2013

Public Sector Technology & Payments in the Headlines – Vista Equity Partners Inks a Deal to Take ACTIVE Network Private

ACTIVE Network (NYSE: ACTV) , a leader in what they describe as Activity & Participant Management (“APM”) Solutions, has agreed to be acquired by Vista Equity Partners at a 100+% premium ($1+ Billion) to their most recent trading price. Why such a whopping premium? We believe Vista sees two very exciting opportunities with ACTIVE. 

First, the markets that ACTIVE serves are very fragmented. ACTIVE is the clear leader in the space. Vista, which has a great track record of actively (no pun intended) managing their software portfolio to derive best in class solutions and financial results, clearly sees an opportunity to improve ACTIVE’s operating performance and growth. ACTIVE has struggled to profitably deliver its solutions and has really struggled of late to generate growth. We think Vista believes they can help turn this around – we agree.

Second, this market, APM, is definitely in need of a transformational cloud based solution. Because it is so fragmented today, it is also a bit dated in terms of the technology infrastructure that is in place. We believe that there is a tremendous opportunity for someone to truly drive this opportunity, capture market share and become a significant leader in the space. Clearly, Vista believes that ACTIVE has a great shot to be that highly profitable, state-of-the art technology solution provider that dominates this market. They are certainly well positioned, but we are starting to see some viable competitors on the landscape.

While ACTIVE describes their market as APM, they are a leading provider of solutions to the sports (e.g. marathons, etc.) community as well as the Public Sector/Non-Profit (schools, parks, fishing licenses, etc.) markets. The Public Sector/Non-Profit space is a very interesting, underserved market and ripe for competition. Given Clearsight’s focus on Public Sector and Financial Technology, we see a tremendous opportunity in the Public Sector APM market as a unified payment platform is becoming more and more critical to the States, Municipalities and Non-Profit groups that manage many of these functions. We are excited to see what the next 24 months holds as we expect to see an acceleration of both growth equity financings and M&A in this space as competitors vie for a market leading position in this niche.