Waterfall Acquired for $24.4 Million by Upland Software
Big news in mobile messaging yesterday, as it was announced that Waterfall, a mobile messaging provider, was acquired by Upland Software for $24.4 million.
Waterfall Acquired for $24.4 Million by Upland Software
July 14, 2017
Big news in mobile messaging yesterday, as it was announced that
, a mobile messaging provider, was acquired by
for $24.4 million. For more information on the Upland Software acquisition, and what will happen to Waterfall, watch the video below.
If you’re a reader of the Tatango blog, you may have read about Upland Software before, as they acquired Mobile Commons back in December 2014 for
. Then in March of 2016,
Upland Software acquired Hipcricket
, another mobile messaging provider. Upland Software purchased Hipcricket from Aurea, an affiliate of ESW Capital, after
ESW purchased Hipcricket
back in March of 2015.
Based on the
Upland Software press release
, we’ve been able to learn some interesting information about Waterfall’s mobile messaging business, and most importantly, the future of the Waterfall brand. We’ve highlighted these points below for our readers.
The purchase price Upland Software paid for Waterfall was $24.4 million in cash at closing, net of cash acquired, and a $1.5 million cash holdback payable in 18 months, subject to any indemnification claims. That number excludes any potential future earn-out payments tied to additional performance-based goals.
expects the acquisition of Waterfall to generate annual revenues of approximately $9.0 million, subject to reductions for a deferred revenue discount as a result of GAAP purchase accounting. This means that Upland Software acquired Waterfall, and their mobile messaging business for approximately 2.7 times their annual revenue.
In the press release, Upland Software stated that the acquisition is within
target range of 5-8x pro forma Adjusted EBITDA. This means that Upland Software believes that going forward, they’ll be able to generate between $3,050,000 and $4,880,000 in profit on Waterfall’s $9.0 million in revenue. Waterfall’s profits pre-acquisition weren’t disclosed in the press release, but it’s safe to assume these pro forma adjusted EBITDA estimates are based on the promise of significant cost savings through reductions in Waterfall’s workforce and operating costs. These cost savings are presumably possible, as Upland already has much of the needed workforce and mobile messaging infrastructure, through their acquisition of Mobile Commons and Hipcricket, to service Waterfall’s mobile messaging clients.
It was also reported that the Waterfall brand, and the
Upland Mobile Commons
brand, will be combined under a new brand called Upland Mobile Messaging. As I mention in the video above, I bet we’ll also see the Hipcricket brand merged into the Upland Mobile Messaging brand as well.
Not in the press release, but interesting to note, is that Waterfall prior to being acquired by Upland Software, actually did some acquiring of their own SMS and MMS marketing platforms back in 2014 and 2015. In November 2014,
Waterfall Acquired Archer Mobile
, and in March of 2015,
Waterfall Acquired Tetherball
If it seems like you’ve been hearing recently more about mobile messaging mergers and acquisitions, you’re right. In fact, 2016 was one of the most active years in mobile messaging M&A history, with the following five mobile messaging M&A transactions occurring. That doesn’t even include companies like
going public in 2016. If you’re interested in our take on mobile messaging mergers and acquisitions,
check out this blog post
Upland Software Acquires HipCricket
Vonage Acquires Nexmo
Syniverse Acquires Stake in Vibes for $45M
Cameo Global Acquires SenHub
CLX Communications Acquires Mblox
If you have questions about the Waterfall acquisition, or have any additional information that you can share, please do so in the comments section below. Thanks!
Hi. Derek Johnson, with tatango.com, here. Big day yesterday in mobile messaging, where Waterfall, one of the large SMS messaging providers, has been acquired. They were acquired for $24.4 million in cash. Waterfall, in the statement, said that they’ll generate about $9 million this year in revenue. The company was founded in 2005. But before we talk about who actually acquired Waterfall, if you’ve been following the Tatango blog or following mobile messaging, you’ll know that Waterfall has done some acquisitions in the past, themselves. So let’s go through those.
First one was Archer, which was in 2004. Fun fact. Archer is a Seattle-based SMS company, and so is Tatango. The second acquisition they made was Tether Ball. Unfortunately I couldn’t find a logo for Tether Ball. It’s no longer a brand. So that should do. That was in 2005. Waterfall made that acquisition.
So who acquired Waterfall for $24.4 million? It’s a company called Upland. You may not have heard of it. The reason you may not have heard of it is it actually is similar to kind of like a holding company, where it actually acquires a lot of companies and then runs under those different brands. So Upland is a publicly traded company on the NASDAQ. You can actually search their stock symbol. It’s UPLD. They IPO’d in 2014. Their market cap right now is $486 million. That’s a lot of money, $486 million. 2017 revenues, they’re expecting to be about $91.2 million to $95.2 million, and adjusted EBITDA, which is kind of like a profit, between $28 and $31 million. Okay.
So where is Upland getting the money to acquire Waterfall for $24.4 million? So first off, they did their IPO back in 2000…What was it? 2014. During that IPO, they raised $46 million. But recently, November 2016, they got a credit facility, which is kind of like a credit line, of $90 million, to acquire software companies. Okay. So that $90 million, plus the IPO…They’ve done about 14 acquisitions since, I think, going public.
So let’s look at some of those acquisitions. There’s a bunch of them here. Okay. So you have Clickability, which is a web content management software solution. You have Eclipse PPM, which is project portfolio management. And as you can see now, they’re calling it like Upland Eclipse PPM. Tenrox, which is a professional service automation software. So very kind of wide array of software for businesses that they’re offering, under the Upland company.
Ultriva, which is a supply chain management software, again, very wide and diversified. PowerSteering, which is a program and portfolio management company software, again. ComSci: IT financial management. Again, these are only a couple of them, the ones that we could easily find. Then RightAnswers, which actually was in April of 2017. They haven’t actually even done their new logo yet, it looks like, because we could only find this one online. This is an enterprise knowledge management software.
Okay. So anybody that is in mobile messaging, been following the Tatango blog, might have heard of the name Upland for some reason. That’s because Upland, back in December 2014, acquired a company, an SMS marketing company, called Mobile Commons. Okay. So back in…They acquired in 2014. The deal was valued at $10.2 million, $5.7 million in cash. The rest was in stock. Okay. Mobile Commons has focused or is focusing on government, healthcare, nonprofits. That’s kind of their area of focus for mobile messaging.
After Upland bought Mobile Commons, they also acquired Hipcricket. Hipcricket was started actually back in 2004. So even before Tatango, before Waterfall, they were kind of one of the original players in mobile messaging. They were purchased by Upland Software for one million shares of Upland. So it was an all-share deal, all, you know, shares in Upland. That was valued, at that time, about $6.2 million. That was in March of 2016.
So just to recap, Upland now owns Waterfall. They own all those other, you know, software providers. They own Hipcricket and Mobile Commons. So since the acquisition of Hipcricket, since the acquisition of Mobile Commons, Upland has re-branded, a few times, their Mobile Commons product. So it was then called Mobile Commons by Upland.
Recently, to match kind of all the other brands and software companies they own, it’s Upland Mobile Commons. Then yesterday, they announced in their release that they’re going to be taking Upland Mobile Commons, Waterfall, and I’m guessing…They didn’t say it in the release, but I’m guessing Hipcricket is gonna be part of this kind of joint company or brand. They’re going to be combining all of those solutions and all those platforms and the offerings of the mobile messaging solution into Upland Mobile Messaging. I mocked this logo up. We don’t actually know it looks like this, but it looks like all the other ones. But they’re calling it, in the release, Upland Mobile Messaging. So I can guess this is kind of what it’s gonna look like.So Upland Mobile Messaging is going to be a combination of maybe Hipcricket…We’re not sure. That wasn’t disclosed. Upland Mobile Commons. So again, the kind of government, nonprofit-type text messaging. Then with the acquisition, $24.4 million yesterday, Waterfall. Waterfall is focused on kind of the retail, restaurants, more, you know, not nonprofits and government and political type work. So this new brand, Upland Mobile Messaging, will really kind of focus on all kinds of types of mobile messaging, where before, Mobile Commons really only focused on one type or one type of client.
So big news. Huge consolidation effort happening right now in mobile messaging, as you can see. It was already big before the Waterfall deal. Now it’s even bigger with the Waterfall deal. But huge news yesterday. So Waterfall being acquired by Upland for $24.4 million. Again, I’m Derek Johnson with
.com. Stay tuned for future videos.