Datawatch acquires Peterson-backed Angoss for $30 mln

Datawatch Corp (NASDAQ: DWCH) has acquired Angoss Software Corp, a Toronto-based provider of advanced predictive analytics used by more than 300 businesses in 30 countries. Datawatch paid more than $30 million (US$24.5 million) in cash, financed in part by Silicon Valley Bank. Bedford, Massachusetts-based Datawatch called the deal a “transformative acquisition” that will enhance the company’s data intelligence offering with expanded capabilities. Angoss, founded in 1984, was taken private in 2013 by U.S. private equity firm Peterson Partners. It has been led since 2016 by President and CEO Brandon Cope, a former Peterson partner.

PRESS RELEASE

Datawatch Acquires Data Science Platform Leader Angoss Software

Transaction Broadens Monarch’s Data Preparation Platform Value with Predictive Analytics

BEDFORD, Mass., Jan. 30, 2018 (GLOBE NEWSWIRE) — Datawatch Corporation (NASDAQ:DWCH), the data intelligence provider with market leading enterprise data preparation, predictive analytics, and visualization solutions, today announced that it has acquired Angoss Software Corporation, a privately-held data science platform provider based in Toronto, Canada. The acquisition will augment Datawatch’s Monarch data intelligence offering with expanded capabilities that enable data scientists to perform predictive and prescriptive analytics in a wide variety of enterprise applications. The transaction was completed today for US$24.5 million in an all-cash transaction, which was financed through a combination of Datawatch’s cash on hand and funding from a new credit facility with Silicon Valley Bank.

Angoss delivers powerful predictive and prescriptive analytics that help businesses discover valuable insights and intelligence in their data, and the company was recognized as one of the leaders in the Forrester Wave: Predictive Analytics and Machine Learning Solutions, Q1 2017. Angoss data science solutions are used by more than 300 organizations in 30 countries, including many global firms such as Barclays, Unilever, Scotiabank, TD Bank, Bayer, Wells Fargo, Bank of America and Air Canada. Angoss provides rigorous modeling and validation tools for machine learning in high-value applications for customer segmentation, customer churn, credit risk scoring, fraud detection, next best action, collections and recovery, and many other mission-critical solutions.

“This is a transformative acquisition for Datawatch that offers a very natural complement to our core Monarch technology platform, significantly expands our addressable market and thus strengthens our competitive position,” said Michael A. Morrison, president and chief executive officer. “Our legacy in data preparation serves as the ideal foundation to extend into all levels of analytics, including predictive and prescriptive analytics. With the Angoss data science platform, we are uniting data preparation, machine learning and predictive analytics to provide an end-to-end data intelligence solution for the enterprise. We welcome the Angoss team to Datawatch, and we know that everyone is excited to work together to make advanced analytics even more accessible to users of all skill levels.”

Value-Enhancing Transaction

Based upon the trailing twelve-month results through December 31, 2017, (excluding purchase price accounting adjustments), the combined entity has (in U.S. dollars):

Pro forma revenue of $48.2 million
Pro forma bookings of $51.0 million
Pro forma non-GAAP net income of $2.3 million

Transaction Highlights

Enhances Datawatch’s financial profile. More than 80% of Angoss revenue is recurring, with industry-leading retention rates, which aids predictability. The transaction is expected to be accretive to Datawatch in fiscal 2019 on a non-GAAP earnings per share basis, although dilutive in fiscal 2018 due to certain purchase accounting adjustments related to deferred revenue.
Expands Datawatch’s addressable market. Gartner projects that the data science platform market, which is nearly three times as large as the self-service data preparation market, will grow at a CAGR of 11% through 2021.
Extends the Monarch platform. Angoss’ data science platform is a natural extension of the Monarch data preparation platform, and allows Datawatch to unify the analytics experience for business analysts through to data scientists.
Strengthens the company’s presence in financial services. A significant number of Angoss’ customers are in the financial services industry, which also represents more than 30% of Datawatch’s business today. Many of Angoss’ financial services customers are existing Datawatch customers, which presents significant cross-sell and upsell opportunities.

For more information, a presentation outlining the transaction and the opportunities it affords the combined entity is posted on Datawatch’s investor relations website (www.datawatch.com, follow links to investor relations and events and presentations.)

About Datawatch Corporation
Datawatch Corporation (NASDAQ:DWCH) is the data intelligence provider with market leading enterprise data preparation, predictive analytics and visualization solutions that fuel business analytics. Only Datawatch can confidently position individuals and organizations to master all data – no matter the origin, format or narrative – resulting in faster time to insight. Datawatch solutions are architected to drive the use of more data, foster more trust and incorporate more minds into business analytics. Thousands of organizations of all sizes in more than 100 countries worldwide use Datawatch products, including 93 of the Fortune 100. The company is headquartered in Bedford, Massachusetts, with offices in New York, London, Toronto, Stockholm, Singapore and Manila. To learn more about Datawatch please visit: www.datawatch.com.

Investor Contact:
Datawatch Investor Relations
investor@datawatch.com
Phone: (978) 441-2200 ext. 8323

Media Contact:
Frank Moreno
Vice President Worldwide Marketing, Datawatch Corporation
frank_moreno@datawatch.com
978-275-8225
Twitter: @datawatch

Photo courtesy of Angoss Software Corp