eResearch | In our latest video, Chris Thompson from eResearch delves into the Canadian Information and Communications Technology (ICT) sector’s mergers and acquisitions (M&A) strategies, with a special focus on the effectiveness of roll-up strategies.
This 22-page report titled, “Roll-Up Strategies in the Canadian ICT Industry,” offers a thorough overview of the sector’s M&A activities, highlighting the strategic moves of key players and the overall impact on the industry’s growth.
The report examines how companies like Constellation Software (TSX: CSU) and Ciscom Corp. (CSE: CISC) are at the forefront of employing roll-up strategies to consolidate their market positions, enhance their service offerings, and achieve economies of scale.
The 22-page report can be downloaded here: eR-Industry_Report-ICT-M&A-2023-10-30-FINAL
Report Highlights:
Our concise yet comprehensive document navigates through the Canadian ICT sector’s M&A landscape, shedding light on:
- The fundamentals of roll-up strategies and their significance in the ICT sector.
- An overview of Canadian companies making waves through strategic acquisitions, with a spotlight on Constellation Software’s and Ciscom Corp.’s aggressive expansion tactics.
- The driving forces behind the surge in M&A activities within the Canadian ICT industry, including technological demands, demographic shifts among entrepreneurs, and the post-pandemic economic recovery.
- Insights into the potential for future growth and investment opportunities in the sector.
Four Key Takeaways for Investors Considering the Canadian ICT M&A Space:
- Strategic Growth: Understanding how roll-up strategies are being utilized to foster growth and competitiveness in the ICT sector.
- Sector Dynamics: Insights into the ICT sector’s evolving landscape and how companies are positioning themselves through acquisitions.
- Investment Opportunities: Identifying potential investment gems in the Canadian ICT sector poised for significant growth.
- Market Trends: Grasping the factors driving M&A activities, including technological advancements and demographic changes.
Company Spotlight – Ciscom Corp. (CSE: CISC):
- The report highlights Ciscom which recently went public and focuses on acquisitions in the ICT sector.
- Ciscom plans to acquire Small and Medium-sized Enterprises (SMEs) with strong growth potential and proven historical profitability.
- It typically targets independent ICT businesses with revenue ranging from $10 million to $30 million per year (excluding COVID-19 impacts) and a history of positive cash flow.
- Ciscom employs a blend of cash and shares for its acquisition strategy. This approach provides sellers with a favorable exit opportunity at a fair valuation, and some immediate liquidity with the cash component but also offers the potential for long-term value growth through ownership in the combined entity.
- Ciscom completed its first two acquisitions in 2022 and is expected to book at least $35 million of revenue in 2023, up from $14.8 million in 2022.
Companies Mentioned in this Report include:
- Ciscom Corp. (CSE: CISC)
- CGI Inc. (TSX: GIB.A | NYSE: GIB | LSE: 0A18 | FSE: CJ5A)
- Constellation Software Inc. (TSX: CSU | OTC: CNSWF | FSE: W9C)
- Converge Technology Solutions Corp. (TSX: CTS | OTC: CTSDF | FSE: 0ZB)
- Descartes Systems Group Inc. (TSX: DSG | NASDAQ: DSGX | FSE: DC2)
- Docebo Inc. (TSX: DCBO | NASDAQ: DCBO)
- Dye & Durham Ltd. (TSX: DND | OTC: DYNDF)
- Enghouse Systems Ltd. (TSX: ENGH | FSE:3E4 | OTC: EGHSF)
- Kinaxis Inc. (TSX: KXS | FSE: 9KX | OTC: KSXCF)
- Lightspeed Commerce Inc. (TSX: LSPD | NYSE: LSPD)
- Open Text Corp. (TSX: OTEX | NASDAQ: OTEX | FSE: OTX)
The 22-page report can be downloaded here: eR-Industry_Report-ICT-M&A-2023-10-30-FINAL
FIGURE 2: Publicly-Traded Comps
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