by Deborah Balshem
Munetrix, a provider of decision support software for K-12 school districts and municipalities, is actively pursuing acquisitions, said CEO Buzz Brown.
The Midwest-centric company wants to expand nationally, said Franklin Foster, founding partner of Essex Bay Capital, which made a majority investment in Munetrix last month.
According to Foster, the Auburn Hills, Michigan-based company will consider targets with up to roughly USD 15m in revenue.
Munetrix works with more than 350 K-12 school districts and municipalities. Its software-as-a-service (SaaS) platform delivers financial forecasting, benchmarking, transparency, and student and teacher performance analytics.
Targets can be located anywhere in the US, Foster said. The company is targeting smaller players with similar capabilities, as well as new adjacencies such as economic development data and analytics, Brown added.
Munetrix is the first investment for Essex Bay, which was co-founded by Foster, a former managing director at Audax Private Equity, and Yash Singh, former president of Analogic and executive vice president of Harvard Biosciences.
In addition to pursuing M&A, Munetrix will expand its commercial team, according to Foster. The company currently has 15 employees. The aim is to grow Munetrix to more than USD 30m in annual recurring revenue from less than USD 5m currently, he added.
Multiples in the space average around 8x-12x revenue and have been trending above 10x revenue of late, according to Foster.
Founded in 2010, Munetrix is one of the largest aggregators of municipal and school district data, according to Brown.
The company expects long-term tailwinds from the COVID-19 pandemic, partly due to stimulus money directed at schools and municipalities, the CEO noted.
Foster said there are no big, national players in the USD 500m K-12 market since many districts still rely on traditional spreadsheets. But he pointed to Forecast5 Analytics as a player with a different regional footprint. OpenGov is a peer on the municipality side, but it focuses on larger cities, he added.
In January, Thoma Bravo-backed Frontline Education acquired Naperville, Illinois-based Forecast5 from Riverwood Capital for undisclosed terms. Redwood City, California-based OpenGov has raised a total of USD 140m in capital, most recently completing a USD 51m Series D in 2019.
Essex targets platform companies in the technology/software, medical devices/life sciences, industrials, business services and consumer products spaces with USD 1m-USD 10m of EBITDA or USD 1m-USD 10m ARR for SaaS businesses.
Munetrix was advised by Copper Run Capital in its sale to Essex.
—————–
Mergermarket (mergermarket.com) is the leading provider of forward-looking M&A intelligence and data to investment banks, private equity firms, lenders, law firms, accounting firms and corporates around the world. Our parent company, ION Group, is the largest global provider of trading, analytics and risk management solutions for capital markets.