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Tyler's Acquisition Spree Continues With MobileEyes Buyout

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Tyler Technologies Inc. (TYL - Free Report) recently announced the acquisition of TradeMaster Inc., which is commonly known as MobileEyes in the industry, for an undisclosed amount.

MobileEyes is a developer of software that improves public safety by supporting fire prevention and suppression, emergency response and structural safety.

Management views the acquisition to be in line with the company’s vision to build safer communities through innovative technology solutions. The addition of MobileEyes is also expected to enhance Tyler’s portfolio with flagship solutions for fire safety professionals.

Tyler Rides on Acquisitions

Tyler Technologies has been pursuing strategic acquisitions in order to expand its products and services, enter new markets related to local governments, attract clients and expand geographically.

The company has derived a significant portion of its historical growth from strategic acquisitions. Although the company is focusing on internal growth, it continues to identify and pursue strategic acquisitions. This year, the company completed four acquisitions spending more than $175 million.

Market research firm Gartner predicts that state and local government software spending will reach $18.3 billion in 2021 from $14.7 billion this year.

We therefore believe that the acquisitions will help Tyler to cash in on growing demand from the government.

Tyler’s Acquisition History

Last month, Tyler acquired CaseloadPro, a provider of digital tools for managing probation cases, for an undisclosed amount. The acquisition is likely to expand Tyler's courts and justice segment, which is the company’s second-largest unit, generating around 18% of total revenues.

In April, the company acquired Seattle-based Socrata for $150 million and Sage Data Security for about $12 million. In the last reported quarter, the company’s revenues grew nearly 14% year over year, of which 2% was contributed by these two acquisitions.

In November 2017, the company acquired audio and digital two-way radio communications technology and related assets from Radio 10-33 for $1.4 million. It acquired Digital Health Department, Inc, a provider of environmental health software, offering a software-as-a-service solution for public health compliance and inspections processes, in August 2017 for $3.9 million.

In May 2017, it acquired Modria.com, a company that specializes in online dispute resolution for government and commercial entities, for $7 million.

In May 2016, ExecuTime Software, a leading provider of time, attendance and advanced scheduling software solutions was acquired by Tyler for $7.4 million.

Zacks Rank and Stocks to Consider

Tyler currently has a Zacks Rank #3 (Hold)

A few better-ranked stocks in the broader technology sector are Aspen Technology (AZPN - Free Report) , Veeva Systems (VEEV - Free Report) and j2 Global , each 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 Aspen, Veeva and j2 Global is currently projected to be 16.5%, 19.3% and 8%, respectively.

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