Despite the challenges of Covid-19, we see both some continuing and also some new value creation opportunities across our focus areas: Technology, Information and Events
- Cybersecurity has sustained, structural growth, further fuelled by Covid-related organisational changes across businesses. AMR has supported Exclusive Group from small business to unicorn. We see more following in its footsteps as the market continues to sub-segment and evolve
- The Software channel is evolving to support Cloud developments across the value chain, led by fast-growing, disruptive players. We also see continuing opportunities across function- specific software solutions e.g. supply chain, HR and Marketing
- B2B and B2C e-commerce are both well established. We expect to see a continuing stream across a range of niche markets. Equally post series A/B B2B marketplaces are now emerging. Future exits could mirror B2C success stories
- Niche smart industrials continue to offer 20%+ margins; these can be validated based on AMR’s sources of value framework. Opportunities include Onshoring and low capex products in robust sectors
- Information businesses, especially those with recurring revenue models, continue to attract high multiples as revenues remain resilient during the Covid crisis. Improved analytics and information processing capabilities, e.g. machine learning, AI will help sustain demand.
- Attributes of an attractive information asset include: i) embedded workflow tools, ii) value-added analytics, iii) tech stack to process unstructured data (both external and internal), iv) proprietary data sets (a competitive moat), and
v) ability to integrate and process additional data sets
- Sectors such as Oil & Gas and Financial services have recently seen an uptick in data and information consumption due to market volatility.
- Areas such as Governance Risk and Compliance (GRC), more specifically supply chain risk and third-party risk (including KYC), ESG, Life Sciences, Legal and Insurance will see increased investment activity
- Despite current turmoil due to the coronavirus pandemic, the Events industry remains structurally attractive for investors. Events cannot be replicated wholesale online and they remain efficient at meeting customer needs.
Multiples will now be lower and new opportunities are emerging
- Selected (di)stressed assets that have strong fundamentals could offer great mid-term return potential for discerning investors
- Tier-two organisers, conferences and one-to-one meetings will benefit from the sector’s strong fundamentals, especially those nimble enough to have successfully pivoted to virtual propositions
- Although events services are suffering from the current turmoil, event tech is seeing rapidly accelerated adoption. We expect to see winners emerge in the short term, with interesting consolidation opportunities
Advanced Analytics: We also expect to see more sophisticated value creation particularly through advanced analytics and predictive analytics. AMR’s survey of mid-market funds shows this to be an almost universally underused tool.
Want further information?
A more detailed investors deck is available upon request. Please contact one of the following AMR team:
Denzil Rankine, Executive Chairman
Florent Jarry, Partner and Head of AMR’s Global Events Practice
Adam Wendelboe, Partner and Head of Analytics