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Tyler (TYL) Completes Jail & Prison Software Maker Buyout

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Tyler Technologies TYL revealed that it has completed the previously-announced acquisition of VendEngine. The two companies had entered into a deal in June this year under which Tyler had agreed to buy VendEngine for $84 million in cash.

VendEngine is a privately-held company that focuses on providing cloud-based software to be used in correctional facilities. The company offers financial management applications and communication platforms that are used by inmates of jails and prisons. The cloud-based software maker currently operates in more than 230 counties and 32 states.

Its services include a website, JailFunds.com, through which families of jail inmates deposit money to be spent on making phone calls and buying items from prison commissaries. It also provides video visitation, in-bound e-mails and texts, medical requests, access to education, certificates and legal research resources, and services to the prisoners.

Therefore, the acquisition of VendEngine will further expand Tyler’s correctional facilities portfolio.

Tyler Technologies, Inc. Price and Consensus

Tyler Technologies, Inc. Price and Consensus
Tyler Technologies, Inc. Price and Consensus

Tyler Technologies, Inc. price-consensus-chart | Tyler Technologies, Inc. Quote

In recent years, Tyler’s growth trajectory has been driven by acquisitions. In April this year, the company completed the acquisition of NIC Inc. to bank on the pandemic-induced shift to online services and electronic payments by governments. This buyout is anticipated to be accretive to Tyler’s non-GAAP earnings, EBITDA, recurring revenue mix, and free cash flow per share in 2021.

In the same month, it purchased a cloud-based school scheduling platform, ReadySub, to expand and strengthen its school portfolio. The transaction will help the company bring in more comprehensive schooling solutions to its school district clients, by helping them implement all-in-one workflows.

In late March, Tyler bought DataSpec, a veterans’ claim management software firm, for an undisclosed amount. The acquisition will help the company enhance its capabilities and strengthen the firm’s position in the veterans’ benefits management solutions market.

Tyler is likely to pursue more acquisitions that will strategically align with its current offerings. Along with investments in research & development (R&D), acquisitions are likely to strengthen the firm’s product offerings and clientele over the long run.

Zacks Rank & Other Stocks to Consider

Tyler currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader technology sector include Microsoft MSFT, Cadence Design Systems CDNS, and Texas Instruments TXN, all carrying a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term earnings growth rate for Microsoft, Cadence Design, and Texas Instruments is currently pegged at 11.1%, 11.7%, and 9.3%, respectively.


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