Clearlake, Vector – Tangoe, Inc. Spotlight

clearlake capital

vector capital
tangoe

Clearlake and Vector Capital Acquisition Proposal for
Tangoe, Inc. (NASDAQ: TNGO)

Sunil Grover, Managing Partner
sgrover@truebluepartners.com
(669) 900-4031

Transaction overview

  • On Jan 03, 2017 Tangoe confirmed two non-binding acquisition proposals from Clearlake Capital and Vector Capital,and Marlin Management Company.
    • The first joint proposal from Clearlake and Vector is to acquire all outstanding common shares of Tangoe notalready owned (Clearlake and Vector currently own approximately 24.6%).
    • The second proposal from Marlin is to acquire all outstanding common shares not already owned (Marlincurrently owns approximately 10.4%).
  • Tangoe provides software and strategic consulting services with offerings in telecom expense management (TEM),mobile device management (MDM), Lifecycle management (LCM), and mobility-as-a-service (MaaS).

 

Acquisition Proposals Analysis

clearlake-vector-tangoe-spotlight"

 

A Dominant Track Record in the Mobile Enterprise Space

  • Clearlake has a strong track record in the mobile enterprise space evident from its previous exit of Mformation Software Technologies
    • Clearlake acquired Mformation in 2012, appointing Kevin Wood as the Chairman and CEO of Mformation (current Chairman of Calero) before exiting in to Alcatel-Lucent in 2
    • Clearlake is also a financial backer for Calero Software LLC which formed from the merger of three highly regarded companies in the space, Movero, Pinnacle, and Veramark, in
  • Marlin also has interests in this space from its 2015 acquisition of Asentinel LLC.
    • A successful purchase of Tangoe would be Marlin’s second acquisition of a mobile management compan

 

The MDM Space Has Consolidated

  • The market witnessed a heightened amount of M&A activity around MDM technologies between 2011 to 2015. The fragmented market was quickly consolidated by the large technology providers with Amtel’s sale to NetPlus being one of the final in the space.
    • Examples of this include Vodafone’s acquisition of Quickcomm in 2010, Emptoris’ acquisition of Rivermine in 2011 (and the subsequent acquisition of Emptoris/Rivermine by IBM in a year later), Dimension Data’s acquisition of Xigo in 2012, and the merger of Veramark, Movero and Pinnacle (business of Paetec) to form Calero in 201
  • Although the MDM market is expected to grow at 25.8% CAGR between 2016 to 2021 and reach $5.32B (MarketsandMarkets 2016), the benefits will most likely be confined to the large providers. In turn, the remaining MDM companies face serious challenges, MobileIron, Inc.(NASDAQ:MOBL) struggles to maintain positive returns, and Tangoe has received proposals well below the current market value.

 

Tangoe Public Comparables

clearlake-vector-tangoe-spotlight

 

Tangoe Past M&A Transactions

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MDM-focused M&A Transactions

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** True Blue Partners (TBP) Advised Amtel, a Leader in MDM, in its Sale to NetPlus

  • Amtel, was part of the rapidly growing market for mobility management solutions, and was recognized by Gartner in 2012 and Forrester in 2012 in the MDM category.
  • Amtel was founded by Pankaj Gupta and has fostered a deep relationship with TBP. In 2014, TBP founders made an equity investment in Amtel while providing strategic advice, on developing its channel-based go-to-market strategy, hiring a Chief Strategy Officer, and structuring its first channel partnership agreements.
  • In April 2016, Netplus strategically acquired Amtel to expand its enterprise mobility management solutions to include MDM, mobile security management, MAM, and TBP, was an exclusive advisor to Amtel in this transaction.
  • As a result, Amtel founders were able to accomplish a highly favorable financial outcome and leveraged the proceeds to fund the growth of their next venture without any equity dilution.

 

About True Blue Partners, LLC
True Blue Partners is a M&A advisory firm that serves lower mid-market enterprise software companies, and provides its clients with over 20 years and of investment banking and technology business operations experience. It’s founders have extensive experience on all sides of a deal as a financial advisor, private investor, and founder operator, which allows for a unique perspective into the challenges and needs that companies face within the lower mid-market.

 

TBP was NOT an advisor to this transaction