Last month, Upland Software, a leading cloud-based enterprise work management software provider, acquired technology expense management-focused Cimpl in a significant move. This acquisition that creates what the combined company calls the industry’s first IT financial management cloud featuring enterprise-class Telecom Expense Management (TEM) capabilities.
Beyond enabling its combined customer base to measure, manage, and align IT and telecom assets and spending at scale, this transaction is important to the technology management market because it emphasizes a growing trend to manage enterprise digital transformation expenses and strategies from a single solution.
“This acquisition represents a significant market shift that provides new opportunities, revenue streams, and business potential for technology management’s major players,” said AOTMP® Executive Vice President Timothy C. Colwell. “As IT spending becomes more complicated and diverse by the day, enterprises are finding increasing value and ROI in solutions that can integrate all technology management objectives into one platform. Going forward, the industry’s leaders will be those that take advantage of this trend by providing comprehensive, world-class capabilities to simplify digital transformation initiatives for decision-makers on a global scale.”
Depth of Insight
For Upland Software, this move is an aggressive step to enhance its product and help the market manage and optimize telecom spend – which constitutes nearly 20% of today’s technology management budget.
“With Cimpl’s powerful TEM platform, Upland delivers a unique, enterprise-grade solution suite that enables organizations to optimize technology investments and drive their continued digital business transformation,” said Upland Software’s Chief Customer Officer and Executive Vice President of Project and IT Management Solutions Mounir Hilal.
Upland Software isn’t the only organization that stands to benefit from this acquisition. Now more than ever, this transaction highlights the struggle enterprises face to gain and sustain financial control across their overall digital transformation environment. While businesses are more willing to undertake risks and bold actions to drive innovation, they lack the expertise to identify and implement changes at scale. To satisfy this growing need, providers need to evolve by expanding their traditional capabilities and incorporating additional market intelligence that was once considered niche.
“Technology management solutions providers that fail to approach digital transformation with a holistic approach simply won’t survive,” said Colwell. “This move is a perfect example of the inevitable change taking place across our global marketplace. There is tremendous growth potential for vendors that are able to transform their offerings to simplify digital transformation and satisfy a wider variety of business goals.”
What Enterprises Can Expect
Regardless of complexity, Upland Software will be able to optimize its clients’ entire third-party vendor, hardware, software, services, mobility, fixed, machine-to-machine, and unified communications expense management environment.
Beyond this vendor’s upgraded platform, however, this move indicates growing competition across the digital transformation solutions space. Organizations will need to consider new providers, more robust and advanced feature sets, and more personalized outreach to remain viable as the ubiquity of technology continues to grow.
This transaction will undoubtedly inspire future merger and acquisition activity in the short-term with the goal of creating long-term prosperity and market share growth. Organizations will need to revisit product roadmaps and business strategies to create new efficiencies, reach new audiences, and refine existing capabilities in order to more effectively address enterprise technology management gaps.
To finalize this acquisition, Upland Software paid Cimpl $23.1 million in cash and a $2.6 million cash holdback payable in 12 months. This transaction is immediately accretive to adjusted EBITDA per share and takes Upland Software to a $228 million annualized revenue run rate. The acquisition is expected to generate annual revenue for the combined company of approximately $8 million — $7.4 million of which is recurring.
Upland Software was founded in 2010 and is headquartered in Austin, Texas. Cimpl was founded in 2000 and is located in Lachine, Quebec, Canada.