Jacobs’ acquisition of Streetlight Data from Macquarie Capital and Activate Capital in February of last year resulted in the convergence of a traditional professional services business with a disruptive, data analytics technology company.
Founded in 2011 and headquartered in San Francisco, Streetlight Data is a pioneer in the use of machine learning and big data analytics for transportation planning. It measures travel patterns and makes them available on-demand via its SaaS platform for mobility.
Jacobs, which is based in Dallas, is a global company that offers professional services including consulting, technical, scientific and project delivery for both the government and private sectors. It specializes in the architecture, engineering and construction (AEC) services sector.
Marrying Cultures
The biggest challenges of the deal were valuation and marrying the distinctly different cultures of the two companies. From a valuation perspective, Jacobs would have traditionally focused on Ebitda multiples. But in the case of StreetLight Data, it had to get comfortable relying on a revenue multiple. Raymond James, which was StreeLight’s advisor, worked with Jacobs to highlight the attributes of the data company that would warrant a revenue multiple-based valuation, including its revenue growth rate, software-rich gross margins and attractive unit economics.
In addition, both the buyer and seller needed to step out of their comfort zones to ensure cultural alignment between a large, established and global company like Jacobs, and a small, nimble company like StreetLight Data with a startup mentality.
The acquisition is part of Jacobs’ corporate strategy that is focused on leveraging data-driven, technology-centric capabilities aligned to high growth markets. Streetlight Data’s services include human mobility, supply chain efficiency and social value analytics. Jacobs’ consulting and professional services employees can use these proficiencies internally, as well as also offer them as value-added services to prospective clients.
For more Deals of the Year coverage, see Mergers and Acquisitions Names the 2023 Middle-Market Deals of the Year.
