2014 got off to a fast start when it comes to mergers and acquisitions of HR technology firms. Most of the companies involved in the transactions aren’t disclosing financials; however, from a sheer number-of-deals perspective, this puts the HR technology market well ahead of its pace in 2013, which saw about 12 visible acquisitions in total. This year’s current pace is on par with what was experienced in 2012, which saw more than 25 acquisitions in total and a similar number in the first quarter of 2012.
The 11 acquisitions made so far this year mirror a few of the industry’s more vibrant trends of late. While definitely telling of the acquiring vendors’ strategies, they are even more of a sign of things to come for the enterprise HR tech user.
In the enterprise technology industry, the most noteworthy IPO of the year so far is one that didn’t happen — Globoforce. As a category leader in rewards and recognition, its IPO was anticipated to be a landmark moment — the first major publicly traded company in the category. However, when the company abruptly postponed its IPO on March 20 citing unfavorable market conditions, many people in enterprise technology circles were confused. We believe it’s important to explain what’s going on at all levels, and we hope that this analysis will bring some clarity and sanity to the discourse. Want to learn more? Download the full Industry Bulletin from The Starr Conspiracy Intelligence Unit.
We believe that a lack of understanding in the broader market could create collateral damage in enterprise technology companies that focus on HR and HCM. But that shouldn’t be the case. There are many good companies with solid fundamentals and real solutions that create value for customers who understand how the market works and operate accordingly. If you look at two of the bellwethers of the market — Cornerstone OnDemand and Workday — their stock price growth trajectories are aligned with the broader NYSE and NASDAQ indexes over the past 12 months. And even though LinkedIn’s stock price has seen a gradual slide since September, its stock price is up over the past 12 months.