Contact: Brenon Daly
After opening up its M&A account last April with an opportunistic acquisition, Intralinks has followed that up with the somewhat more strategic $10m purchase of docTrackr. The purchase of the three-year-old digital rights management startup is significant because it shows Intralinks playing both offense and defense with M&A. Neither side used an advisor.
On the defense side, the deal ‘boxes out’ Box. The high-profile file-sharing company – which is likely to go public in the next few weeks and be valued in the billions of dollars – had licensed docTrackr for at least two years. As my colleague Alan Pelz-Sharpe notes in our report , there might not be much impact to Box’s business with docTrackr off the table, but Intralinks will mint some PR around the move, nonetheless.
In terms of building its business, docTrackr will slot into Intralinks’ enterprise business. That division, which generates nearly half the company’s overall revenue, is forecast to be the main growth engine at the company in the coming years. But for now, the enterprise division is basically flat. (All of Intralinks’ growth in 2013 – a year in which it increased total revenue 8% to $234m – came from its M&A-related business.)
Longer term, Intralinks has indicated it expects to grow its enterprise business 25-30% per year. That seems ambitious for a company that has seen sales there flat-line for two straight years. (Some of that performance is simply a function of accounting, with revenue lagging the actual subscriptions that Intralinks sells.) But even adjusting for that and looking at billings, the growth rate for Intralinks’ enterprise business has lagged that of rival collaboration vendors. The addition of DRM technology from docTrackr into the company’s platform hits a key point for customers, particularly those in the regulated industries that Intralinks has targeted.
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