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1 | 11 Automotive Technology M&A Overview 2H 2019

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THE RACE FOR INNOVATION

At first glance, the stable autotech deal volumes

witnessed over the past year tell a benign story. These

unexceptional numbers, however, conceal a seismic

shift in the makeup of investors and buyers in the race

to own the vehicle of the future. Now, new faces such

as Apple and Uber abound, while Tier 1 suppliers –

previously highly active in the space – have reduced

their deal-making activity, at least temporarily. In

addition, many corporates are hedging their bets

earlier by extending their corporate venture capital

operations to automotive technology.

Fundamentally, the picture that emerges is one of

identity: every year, more OEMs expand their product

portfolios to fashion themselves as mobility providers

in addition to being car manufacturers. They acquire

companies that aid the development of complete

solutions, instigating an increasingly competitive

landscape and driving the development of critical

future technologies, such as electric vehicles, driverless

technology, and new modes of mobility.

It is not just the core technologies that are at stake

here. Supporting industries are also growing as a

result: for instance, as electric vehicle adoption grows,

so too do supporting industries such as automotive

research and development, battery testing systems,

battery rehabilitation and electrification of gas stations.

Unsurprisingly, in 1H2019 autonomous vehicle

systems were especially sought-after targets in the

M&A market. As far as the winning technology and

standards go, the future is wide open, making this race

all the more important to watch over the short- to

mid-term.

Total number of Autotech M&A deals 2014-2019


M&A SUMMARY

Our Autotech report covers the two-and-a-half-year period between January 2017 and June 2019. 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.

2.1x2.0x

4.7x

1.7x 1.8x

13.4x13.4x

15.5x 15.5x

15.5x

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60

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Stable deal volumes

In the first half of 2019, the number of deals remained

stable, with just under 50 transactions recorded in

total. So too did valuation metrics, with the median

sales and EBITDA multiples trending relatively

consistently at 1.8x and 15.5x respectively.

Most activity came from the enterprise application and

mobility and fleet management sub-sectors, with 17

deals each. The largest deal was closed by Uber, as it

acquired the Middle Eastern ride hailing app Careem

for $3.1 billion.

In line with the march toward future technologies,

around 10 per cent of recorded deals were linked to

autonomous vehicle technology, either embedded in

the car itself or in the form of supporting data

management solutions for autonomous driving.

Meanwhile, ever the pioneer in EV development, Tesla

acquired additional battery know-how by snapping up

Maxwell Technologies, thus strengthening its leading

position in this crucial growth market.


AcquirersAcquisitions

in 30 monthsThree most recent acquisitions

5

Clearplan automotive repossession management SaaS

CarsOnTheWeb European online B2B car auctions

STRATIM Systems fleet management SaaS

5

Torc Robotics autonomous driving sensors & software

Transvoco French ride sharing mobile app

Flinc GmbH ride-sharing mobile app

4

Quantum Signal robotic & autonomous vehicle system

Journey Holding automatic vehicle location SaaS

Skinny Labs electric scooter sharing services & app

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

3

RedCap Technologies automotive customer logistics SaaS

Colimbra data management software & services

Autodata UK online automotive technical reference content

3

Wabco brake manufacturer for commercial vehicles

Simi Reality Motion Systems 3D motion detection & analysis software

2getthere autonomous electric passenger & cargo transport vehicles

2Sea Pine Technologies vehicle insurance advertising enablement software

Bright Box telematics systems & software

236

Number of acquirers who

made >1 acquisition

44

Number of active acquirers

during the past 30 months

TOP ACQUIRERS


and vehicle autonomy

software. 2getthere’s

applications range from

driverless electric

transport systems at

airports, industrial parks,

and theme parks to

dedicated urban

transport infrastructure.

movements, which it will

employ to actively

monitor occupant safety.

Finally, ZF’s $7 billion

offer for Wabco further

underlines the acquirer’s

commitment to scaling its

business across all vehicle

classes.

TRENDS IN AUTOMOTIVE TECHNOLOGY

• Tech giants continue to penetrate

autonomous and electric vehicle space

• Tire manufacturers enter the M&A

race, as illustrated by both Bridgestone’s

and Michelin’s respective acquisitions of

telematics assets

• Micromobility solutions embellish

urban environments, as providers receive

billion-dollar valuations

• Cost of sensors decreases, especially for

LIDAR technology, as players are closing

large fundraises and the market becomes

ever more competitive

This transaction was followed two months later by

ZF’s acquisition of Simi, a provider of biokinetic

perception software used to track passenger

.

ACQUIRED

19 Mar

ZF Friedrichshafen acquisitive in 2019

With its strategic acquisition of 2getthere, a next-

generation provider of autonomous vehicle

technology & systems, ZF intends to strengthen its

foothold in the growth markets of Mobility as a

Service (MaaS), autonomous transportation systems,

.

ACQUIRED

13 May


Financial sponsor deal share normalises

In 2018, financial sponsors played an

outsized role in autotech M&A markets, as

almost one quarter of all activity was driven

by a private equity. So far this year, this

trend has declined slightly, with five autotech

transactions being consummated by PE,

though the growing maturity of the

autotech market coupled with increasingly

competitive bids from financial buyers will

drive further activity.

of European targets were acquired by European buyers in the last 30

months, compared to 29 per cent of targets snapped up by North

American investors. This accounts for the majority of deals involving

European autotech targets and reflects Europe’s historical strength in the

sector. 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 tenth of all deals.

Private equity transaction share of autotech M&A

GEOGRAPHICAL BREAKDOWN

66%

Europe

66%

North

America

29%

RoW

5%

Europe

34%

North

America

56%

RoW

10%

0%

50%

100%

2015 2016 2017 2018 1H2019

Private Equity Strategic Buyers PE Share (%)

Headquarters of Autotech

targets

Headquarters of acquirers

of European targets


Enterprise

Applications

31%

Internet

Commerce

& Content

13%

Embedded

Software &

Systems

27%

Mobility & Fleet

Management

29%

SUB-SECTOR BREAKDOWN

Enterprise ApplicationsCustomer retention & 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.

$3.1 billion

26 Mar

Uber Technologies acquires

Careem

$1.0 billion

22 Jan

Bridgestone acquires TomTom

(telematics business)

(6.5x EV/S)

$320 million

02 Apr

Lear acquires Xevo Inc [fka

UIEvolution]

$300 million

24 Apr

Getaround acquires Drivy

$218 million

04 Feb

Tesla acquires Maxwell

Technologies

$186 million

13 Mar

I.D. Systems acquires Pointer

Telocation [fka Nexus

Telecommunications Systems]

LARGEST DISCLOSED DEALS

OF 1H2019

Tech giants vs traditional auto companies

In February, Amazon led a $700 million financing

round into the Michigan-based electric vehicle start-up

Rivian, that had previously collected money from Ford

and, most recently, Cox Automotive.

This demonstrates yet again two significant trends: the

notable market shift to electric driving in general, and

the market penetration by tech giants, as Apple,

Dyson, and Google all develop their own autonomous

and electric vehicles. Amazon appears to be betting on

Rivian to scale up and become a serious competitor to

Tesla.

This also follows on Amazon’s significant bet on

autonomous vehicles as it participated in the $530

million funding round into Aurora, a self-driving car

technology unicorn. Uber, on the other hand, has

been strengthening its geographic reach with the

acquisition of Careem for $3.1 billion, the largest

autotech deal recorded so far in 2019.


22 Apr

25 Feb

30 Apr

30 Apr

05 Jun

ENTERPRISE APPLICATIONS

NOTABLE TRANSACTIONS OF 1H2019

ACQUIRED

16

14

17

15

11

1H 2017 2H 2017 1H 2018 2H 2018 1H2019

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aftermarket CRM SaaS, to expand its portfolio for

service businesses and consumers.

Financial investors’activity on the rise

The first half of 2019 recorded three transactions by

private equities, indicating a growing trust in the

viability of the market and its ability to generate

consistent positive cashflows. There is also ample

opportunity for potential “buy and build” strategies,

given the relatively fragmented state of the automotive

enterprise application competitive landscape.

A challenging market environment

Enterprise applications that support all stages of car

ownership continue to gain importance against a

backdrop of declining passenger car sales. Solutions

addressing the customer journey from marketing to

sale, through to Finance & Insurance and retention, are

being pursued by OEMs, software providers and

financial investors. For example, in April, Thoma Bravo

acquired Autodata Solutions, a SaaS and software

provider for auto marketing automation and sales

management. Thoma Bravo is looking to leverage its

expertise to help drive Autodata’s growth (not to be

confused with Solera’s Autodata).

Insurance companies are also increasingly turning to

autotech inorganic growth opportunities, as

exemplified by Zurich’s acquisition of Sea Pine

Technologies, an advertising enablement software for

vehicle insurance providers. This is not the first time

Zurich has acquired an autotech company, having last

year moved for Bright Box, a connected car software

provider, to strengthen its usage-based insurance

practice.

Given the growing need for aftermarket solutions,

Epicor acquired MechanicNet, an automotive

.


INTERNET COMMERCE & CONTENT

9

7

4

9

2

1H 2017 2H 2017 1H 2018 2H 2018 1H2019

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backed by Softbank, enters the market of seven

European countries with this deal.

Stable trend toward vehicle resale platforms

In late July, IAA acquired Decision Dynamics, an online

salvage vehicle auction marketplace. IAA is a global

online marketplace connecting vehicle buyers and

sellers, processing over 2.5 million vehicles annually.

This deal is in line with transactions from previous

years, moving away from tools solely focusing on the

sale of new vehicles and toward a full solution that also

addresses used vehicles and the aftermarket. Declining

new vehicle sales, an uptick in alternative mobility

adoption, and other shifting consumer behaviour

necessitates more sophisticated online sales and

marketing platforms.

Transaction volume drops

The first half of 2019 witnessed a significant dip in

transaction volume in the internet commerce and

content space. This may be because some deals were

announced, but not closed. Examples of this include

the multi-billion take-over of Scout24, a company that

operates digital marketplaces specialising in the

automotive and real estate sectors. The offer was

placed by the investors Hellman & Friedman and The

Blackstone Group – the same investors that had

previously listed the company on the stock market.

However, this transaction – which, if successful, would

represent the largest take-private the German stock

market had ever seen – did not receive necessary

shareholder approval.

Conversely, two successful transactions in this space

were both led by American buyers. In February,

RumbleOn acquired AutoSport-USA, a pre-owned

vehicle distributor. RumbleOn operates a growing

online marketplace for the acquisition and

redistribution of used car inventory to consumers and

dealers, with AutoSport providing customers access to

stock, staff, and the Florida vehicle market.

Secondly, Getaround acquired the Norwegian car

rental startup Nabobil.no for $12 million. Getaround,

.

ACQUIRED

04 Feb

ACQUIRED

04 Apr


EMBEDDED SOFTWARE & SYSTEMS

29 Mar

02 Apr

26 Jun


ACQUIRED

$320 million

13

15

7

13

17

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19 Mar

13 May

02 Apr

supports ZF’s strategy to offer integrated safety

systems from a single source.

Tesla further investing in battery expertise

Earlier this year, Tesla acquired the supplier of

ultracapacitor-based energy storage products,

Maxwell Technologies, for $218 million. Tesla’s

reported rationale was to secure the valuable IP held

by Maxwell, as it continues to target its frontrunner

status in battery technologies.

Surge of deals in autonomous driving

After the 2018 spike in demand for connectivity

features, 1H2019 registered numerous acquisitions of

autonomous car systems, demonstrating the critical link

between both technologies.

Recently, Apple acquired drive.ai, a provider of

autonomous driving sensors and software, in a

distressed sale. Shortly before staff were expected to

be let go, the troubled startup’s autonomous vehicle

assets were snapped up by the tech giant. Drive.ai was

once valued at $200 million and belonged to the more

promising startups in the space but struggled to survive

the recent wave of consolidation.

Another notable transaction was Uber’s acquisition of

data management SaaS for autonomous vehicles,

Mighty AI, fuelling its continuous push into the

autonomous vehicle space. Uber’s Advanced

Technology Group – the division responsible for

developing its AV efforts – secured further funding

from Toyota and Denso earlier this year, valuing the

unit in excess of $7 billion.

Another acquisitive buyer, ZF, invested in the

embedded software space by acquiring Simi, a

computer vision company that tracks passenger

movements inside the vehicle. This asset

.



MOBILITY & FLEET MANAGEMENT

31 Jan

04 Jan

26 Mar

24 Apr

16 May

$300 million

$3.1 billion

$1 billion

12

1516

10

17

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New player I.D. Systems

I.D.Systems, an American company providing vehicle,

container and cargo tracking systems, recently

recorded two transactions in this space. In the first, it

acquired the US-based assets of CarrierWeb Services

in January. In the second, it acquired Pointer Telocation

in March. I.D. Systems aims to gain market share in the

growing mobile IoT, connected car, and telematics

markets.

ACQUIRED

13 Mar

Big deals happening

Mobility and fleet management transactions have

boomeranged compared to their slight decline late last

year, reaching a record of 17 transactions. Alongside

the recent developments in micromobility, transactions

in the fleet management space continue to proliferate,

with corresponding deal sizes seeing a notable boost.

Tire manufacturers participated in the M&A race for

fleet management and monitoring solutions. Michelin,

an active player in this market, acquired Masternaut,

while Bridgestone kickstarted its inorganic expansion

into fleet management by acquiring the telematics arm

of TomTom for $1 billion. The remaining TomTom

company will now focus on its mapping and

autonomous driving efforts.

The biggest disclosed deal of 1H2019 – the acquisition

of Careem by Uber – clocked in at $3.1 billion. Before

its hotly-anticipated IPO, the company caused a stir by

taking over all of Careem’s businesses across the

greater Middle East region. Uber is aiming to expand

and capitalise on the substantial opportunity in the

digital mobility markets of the Middle East. The deal is

subject to regulatory approval and is expected to close

in early 2020.


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 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 Hampleton Partners

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, Insurtech, Cybersecurity, VR/AR, Healthtech, Digital Marketing, Enterprise Software, IT Services, SaaS & Cloud

and E-commerce.

David Riemenschneider

Director

Head of Automotive Practice

[email protected]

Autotech funding and M&A remain healthy for quality

assets. We have seen a slow-down in speculative deals, as

acquirers and investors are becoming better educated

and have more clearly defined investment objectives.

While this may look like things have plateaued, they have

not. There is still a very robust market for good

technology assets, who will always find a good home at

an exceptional valuation. In many ways, we feel the slow-

down in deals with very early-stage technology is helpful

for all in the sector. It helps firms with great technology

fully realise the value of what they have created while

focusing early-stage autotech firms to continue the

development of their tech. The early-stage teams will get

their chance at a proper valuation once they have

developed and proven their technology.

Furthermore, we are seeing EV tech, in all forms (vehicle

and infrastructure) thrive. Proven AV tech with skilled

teams are also continuing to attract investment from

inside and outside of the main-stream auto sector (e.g.

Amazon’s investment into Aurora).

Despite the clouds in the sky (declining vehicle sales in

several key markets), we do not anticipate any slowdown

in autotech M&A for the remainder of this year or into

early 2020. In fact, we see a bright future for those

working in the customer retention and CRM space, as

OEM marketing budgets will be searching for great

solutions to retain current customers and attract new

leads.

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 advisor. 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

Insurtech

Internet of Things

IT Services

AR/VR

Artificial Intelligence

Automotive Technology

Cybersecurity

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Fintech

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

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the race for innovation - realwire · salvage vehicle auction marketplace. iaa is a global online...

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