Vista, Hg-backed Allocate Software fields bids, DA Davidson eyes further tech buildout post Marlin

Vista and Hg field bids for Allocate and DA Davidson invests in tech expansion.

Happy Friday!

Health-tech: Allocate Software, an international provider of healthcare workforce management software owned by Vista Equity Partners and Hg, fielded bids on Thursday in the latest round of its sale process, sources familiar with the matter told me.

Expectations are in the neighborhood of 20x to 25x EBITDA, the people said. A deal could be valued around $1.3 billion to $1.5 billion, some of the people said (translating to the low £900 million range to up to some £1.1 billion).

Vista through Vista Foundation Fund III bought the UK-based business from Hg in May 2018, and three months later, Hg rejoined as an investor from Hg8 Fund. Hg initially invested in Allocate at the end of 2014 through its Mercury 1 Fund, completing a public-to-private transaction from the London Stock Exchange.

While a growing area pre-covid, those in the business of improving workforce productivity and communication across the healthcare ecosystem have performed particularly well in the past year. At the same time, better management of costs throughout the supply chain is increasingly important as more healthcare providers transition to value-based models of reimbursement.

Allocate could make sense in combination with other quasi-strategics in this broader universe, sources said. Check out my full report on PE Hub for more detail.

In case you missed Thursday’s news, another Vista business — Social Solutions, a cloud software provider for non-profit organizations — recently hit the market. Read it on PE Hub.

Tech buildout: DA Davidson is beefing up its tech banking practice as it welcomes sector specialists from recently acquired investment bank Marlin & Associates.

Its expansion plans include bringing on new team members focused on digital healthcare to support an existing partner on the tech team, as well as bankers focused on internet and digital media. The bank will also look to expand in Europe and add a partner in London to specifically focus on fintech, Joe Morgan, co-head of technology investment banking at DA Davidson, told PE Hub.

As for the Marlin deal, DA Davidson immediately inherits expertise in fintech and data and analytics. “Marlin’s team has been sector experts in that area for 20 years. We did not have expertise there; we were competing, but we were not winning, and so part of the rationale is to bolster and improve that,” Morgan said.

The combined tech team will now encompass sector specialists in eight technology markets: application software, infrastructure software, vertical software, financial technology, Internet, digital media, tech-enabled services, data and analytics, and digital infrastructure.

Check out Milana’s full report on PE Hub.

That’s it! Have a great weekend ahead. As always, hit me up with tips n’ gossip, feedback, The Drama or whatever at springle@buyoutsinsider.com.

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