Compliance Technology: Growing M&A Activity in SCRM

Compliance technology allows companies across industries and geographies to stay ahead of constantly evolving rules, regulations, and requirements. In today’s increasingly complex global business environment, supply chains are fundamental.

Compliance tools are essential for success broadly, and supply chain risk management (SCRM) solutions are in especially high demand to help organizations protect themselves and their employees as they extend their reach.

Below, senior professionals in our Technology Group discuss what’s driving investor interest in compliance technology, why SCRM is seeing such strong adoption, and how recent Harris Williams clients Veriforce and Nalanda exemplify the segment’s M&A potential.

Safeguarding Extensions of the Enterprise

More companies are relying on compliance technologies to operate in today’s dynamic global landscape. At the same time, these companies are sharpening their focus on comprehensive risk mitigation.

“It’s an organization-wide effort to manage the full spectrum of enterprise risk,” says Erik Szyndlar, a managing director. “Compliance technology tools are vital to this effort.”

SCRM, for example, is becoming a higher priority for the host of organizations with supply chains that incorporate contractors, material suppliers, and other vendors—particularly in tightly regulated or high-risk end markets. SCRM solutions ensure this third-party ecosystem is compliant with company and industry standards and regulatory requirements. Ultimately, this helps save lives and reduce exposure to potential compliance or reputational risk to all parties.

“As supply chains grow, the network of associated vendors expands and becomes increasingly complicated to manage, making it imperative for organizations to leverage SCRM software for efficiency and visibility,” explains Brian Titterington, a managing director.

The expansion of supply chains often results in organizations entering and growing into new end markets and geographies. In these situations, it’s even more essential to have an experienced SCRM partner that can bring visibility into local regulations and labor. “SCRM providers that are trusted and recognized in specific sectors and regions are difficult to replicate and highly sought after,” says Mathew Tsui, a director. “Differentiated SCRM solutions that can deliver their inherent local supplier networks to the market are very appealing to investors.”

Veriforce and Nalanda: Demonstrating the Opportunity

Our recent clients in the SCRM sector illustrate the traits of leading SCRM businesses that investors should prioritize.

Harris Williams advised Apax Partners LLP on the acquisition of a controlling stake in Veriforce, a portfolio company of Thoma Bravo. “With the support of the Apax Funds in this next phase of growth, Veriforce will continue to capitalize on the industry’s tailwinds, drive further organic growth, and scale internationally and into new verticals,” says Titterington.

Veriforce is a global leader in delivering comprehensive, integrated supply chain risk management solutions that help bring workers home safely and optimize business performance. The company’s SaaS safety and compliance platform, data integrity and verification practices, and standardized safety training programs empower leading organizations to drive safety and compliance into their supply chains and down to the worker level.

Harris Williams also advised Nalanda Global, a portfolio company of PSG Equity, on its sale to Once For All, a portfolio company of GTCR. “The acquisition of Nalanda by Once For All brought together two well-regarded and highly innovative companies,” says Tsui. “We’re excited to watch the combined business keep expanding across compliance management.”

Nalanda Global is a best-in-class supply chain risk and compliance management software platform, enabling organizations of any size across a variety of engineering-related sectors to embed trust, safety, and compliance at every stage of the supply chain. With a long history and trusted reputation in the market, the company fosters a community of compliance and innovation across the construction industry and beyond.

SCRM: Primed for Consolidation

Increasing complexity and magnified risk exposures throughout global supply chains, a greater emphasis on employee safety, and expanding regulatory scrutiny are amplifying the need for SCRM solutions. With these themes in place, consolidation opportunities are plentiful across SCRM and the broader compliance technology space as customers demand more integrated, comprehensive, and global services.

“SCRM tools are critical for managing and mitigating risks throughout a company’s supply chain and network of third-party partners,” says Szyndlar. “As risk management continues to be a larger strategic priority, these technologies will only become more important.”

To further discuss M&A in SCRM and compliance technology, please contact our senior professionals.