M&A Alert—December 22, 2015
Tyco agrees to acquire in-store analytics company, ShopperTrak, for $175 million.
Author: Eric Risley & John Ascher-Roberts
Transaction Size: $175mm
On December 22, 2015, Tyco (NYSE: TYC) announced an agreement to acquire in-store analytics company, ShopperTrak, for $75 million in cash
ShopperTrak helps retailers better understand shopper behavior through its in-store traffic measuring solutions. The company uses Bluetooth, wifi and pressure sensors to monitor foot traffic and consumer behavior data once in the store. The company knows how many people are shopping, where they buy and how much money they spend. This data is aggregated in its online platform, the Retail Data Cloud, which helps retailers to better understand and maximize marketing efforts and store operations. More than 750 of the world’s leading retailers, shopping center owner/operators and entertainment venues use ShopperTrak services in over 65,000 locations across 90 countries. Major retail customers include Crate & Barrel, Crocs, Harry & David and Thomas Sabo.
Based in Chicago, ShopperTrak was founded in 1995 by Bill Martin. Christopher Ainsley became CEO in 2008. Competitors include Euclid Analytics, RetailNext, Walkbase and Nomi. ShopperTrak had roughly 250 employees upon its acquisition and generated $75 million in revenue in 2015.
Tyco is the largest fire detection and suppression solution provider, and also provides its customers a variety of security products and services such as video surveillance and intrusion detection solutions. It serves more than three million customers around the world and has approximately 57,000 employees in more than 900 locations. It serves commercial, institutional, governmental, retail, industrial, energy, residential and small business clients.
Its Tyco Retail Solutions division offers integrated retail performance and security solutions, deployed today at more than 80 percent of the world’s top 200 retailers. It provides retailers with real-time visibility to their inventory and assets to improve operations, optimize profitability, and improve shopper experiences.
Headquartered in Cork, Ireland, Tyco has revenue for the last twelve months ending in December 31, 2015 of $9.8 billion and has a market capitalization of $14.3 billion.
Tyco is purchasing ShopperTrak for $175 million in cash.
Comparable transactions include Groupon’s acquisition of Swarm Mobile for $11.2 million in November of 2014 (3.2x invested capital), Brickstream’s acquisition of Nomi in October of 2014 (undisclosed) and RetailNext’s acquisition of Nearbuy Systems in December of 2013 (undisclosed). Tyco also acquired FootFall, another retail analytics company, for $60 million in July of 2015.
The acquisition of ShopperTrak follows Tyco’s recent purchase of Footfall, which also offers customer traffic analytics. Both have similar in-store traffic analytics offerings, but have different geographic strengths. Tyco intends to augment its traditional inventory security and loss prevention products with in-store shopper behavior analytics. Together, FootFall and ShopperTrak will enable Tyco to capture data from 35 billion shopper visits annually.
Architect Partners’ Observations
The retail analytics, software and services that give retailers customer insights, market size is estimated to grow from $2.2 Billion in 2015 to $5.1 Billion by 2020, at an estimated Compound Annual Growth Rate (CAGR) of 18.9% according to Markets and Markets. In-store traffic counter proves to be one of the most adopted retail analytics technologies as nearly 71% of major retailers with revenues have adopted some sort of counting software, per a Brickstream survey.