Tyler's Buyout Binge is Consistent With SceneDoc Purchase
Tyler Technologies Inc. TYL recently announced the acquisition of SceneDoc Inc for an undisclosed amount.
SceneDoc is a provider of mobile-first, software-as-a-service (SaaS) field reporting platform for law enforcement agencies.
Per management, the addition of SceneDoc will help Tyler expand its product portfolio to effectively address the evolving needs of the jurisdictions that the company serves.
With this buyout, Tyler will be able to provide law enforcement officials with time-saving technology. SceneDoc offers tools that assist in capturing and sharing contents from smartphones, tablets, wearables, task-specific apps etc. and also upload the data to the cloud in real-time. Moreover, the voice-to-text feature that the platform provides actually facilitates the capture of notes and keeps officers' more aware of their surroundings.
The acquisition, therefore, seems to be in line with Tyler’s strategic vision for empowering “smarter, safer and more vibrant communities.”
Focus on Public Safety
Tyler’s motive to enhance public safety solutions is helping it win new clients.On the last earnings call, management noted that the total value of new name public safety contracts signed year to date increased 34% over the same period last year.
With regard to this, we note that the company strengthened its position significantly in the public safety market with its acquisition of New World Systems Corporation in November 2015.
The company’s investments in the New World product suite are visibly producing results as indicated by a strong client reception, which is positively impacting win rates. We, therefore, anticipate the capex on SceneDoc to drive growth further.
Tyler Technologies, Inc. Revenue (TTM)
Tyler Technologies, Inc. Revenue (TTM) | Tyler Technologies, Inc. Quote
Tyler Rides on Acquisitions
Tyler has been pursuing strategic takeovers to widen its product and service portfolio, enter new markets related to local governments, attract clients and expand geographically.
Prudent acquisitions play an instrumental role in the company’s historical growth. Although Tyler is focusing on internal growth, it continues to identify and pursue tactical means of inorganic growth. Prior to this, the company completed four acquisitions this year, spending more than $175 million.
In October, Tyler purchased MobileEyes, a software developer that improves public safety by supporting fire prevention and suppression, emergency response and structural safety, for an undisclosed amount. The accretion of MobileEyes is expected to aid Tyler in building safer communities through innovative technology solutions and also enrich its portfolio with flagship solutions for fire safety professionals.
On Aug 31, Tyler acquired CaseloadPro, a provider of digital tools to manage probation cases for an amount kept under wraps. The buyout strengthens Tyler's courts and justice segment by bettering the probation and supervision offerings.
In April, the company bought Seattle-based Socrata for $150 million and Sage Data Security for about $12 million.
In the last reported quarter, the company’s revenues came in at $237.6 million, marking a year-over-year jump of 10.5%. Acquisitions contributed $7 million to revenues.
Zacks Rank and Stocks to Consider
Tyler currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Computer and Technology sector are CACI International CACI, Intel INTC and Symantec Corporation SYMC, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for CACI, Intel and Symantec is projected at 10%, 8.4% and 7.9%, respectively.
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