ServiceMax Promises Accelerating Growth as Key to $1.4B SPAC Deal

Service Max, the company that makes software for the field service industry, announced yesterday that it would be unveiled in a $1.4 billion deal through a special-purpose company or SPAC. The transaction came after $915 million was sold on the Surmax GE in late 2018. ServiceMax competes primarily with ServiceNow in the growing field-service industry, and the recent investment in sales ventures has made the Salesforce Service Cloud quite attractive.

Other large enterprise vendors such as Microsoft, SAP, and Oracle have similar products. The market looks to help digitize traditional field service, but also touches internal services such as IT and HR so that it can play in a wider market. GE actually bought the company as part of a growing industrial Internet of Things (IoT) strategy at the time, hoping it would have a software service that could work with Glove with automated machine maintenance that it wanted to implement. Other large enterprise vendors such as Microsoft, SAP, and Oracle have similar products. The market looks to help digitize traditional field service, but also touches internal services such as IT and HR so that it can play in a wider market. GE actually bought the company as part of a growing industrial Internet of Things (IoT) strategy at the time, hoping it would have a software service that could work with Glove with automated machine maintenance that it wanted to implement.

When that strategy failed to materialize, the company spread the service Max and so far it has remained part of the Silver Lake partners that the deal was finalized in 2019. We were curious to know why TechCrunch was interested, so we dug into the company’s investor presentation for more hints about its financial performance. Clearly, Service Max has a history of modest growth in business and use of cash although it promises a big change in the storyline. 

The keyword for investors is that with new capital it can accelerate its growth rate and start generating free cash flow. To get there, the company will follow organic (in-house) and inorganic (acquisition-based) growth. The company’s blank-check combination will provide the company with a significant amount of “$335 million in revenue, “compared to its most recent funding round.