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Tyler Technologies (TYL) Buys Cloud-Based Software Firm Arx

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Tyler Technologies (TYL - Free Report) recently announced the acquisition of Arx, a cloud-based software platform provider for the modern-day police force. However, the company didn’t disclose the financial terms of the transaction. Per the agreement, the current employees of Arx will become part of Tyler and continue working remotely.

Arx’s cloud-based platform provides critical data to law enforcement officers while increasing transparency and building trust with the communities the police force serve.

Tyler intends to integrate Arx under its Public Safety Division which is based in Troy, MI. Bryan Proctor, president of Tyler’s Public Safety Division said, "The acquisition of Arx allows Tyler to offer a full suite of public safety solutions designed to maximize efficiency and safety for law enforcement officers while increasing transparency and trust-building with the communities they serve."

The company will add Arx’s software solutions — Arx Alert and Arx Community — to its public safety software suite. With Arx Alert solution, law enforcement agencies will be able to modernize policing, create internal agency accountability and provide external transparency to the community.

The Arx Community software solution helps businesses, citizens and community organizations better understand community policing activity and build stronger community partnerships.

In recent years, Tyler’s growth trajectory has been driven by acquisitions. Most recently, earlier this month, it completed the acquisition of VendEngine for $84 million in cash. VendEngine focuses on providing cloud-based software for correctional facilities. The company offers financial management applications and communication platforms that are used by inmates of jails and prisons.

In April this year, the company completed the acquisition of NIC Inc. to bank on the pandemic-induced shift to online services and electronic payments by governments. This buyout is anticipated to be accretive to Tyler’s non-GAAP earnings, EBITDA, recurring revenue mix, and free cash flow per share in 2021.

In the same month, it purchased a cloud-based school scheduling platform, ReadySub, to expand and strengthen its school portfolio. The transaction will help the company bring in more comprehensive schooling solutions to its school district clients, by assisting them in implementing all-in-one workflows.

In late March, Tyler bought DataSpec, a veterans’ claim management software firm, for an undisclosed amount. The acquisition will help the company enhance its capabilities and fortify the firm’s position in the veterans’ benefits management solutions market.

Tyler is likely to pursue more acquisitions that will strategically align with its current offerings. Along with investments in research & development, acquisitions are likely to strengthen the firm’s product offerings and clientele over the long run.

Zacks Rank & Other Stocks to Consider

Tyler currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader technology sector include Microsoft (MSFT - Free Report) , Cadence Design Systems (CDNS - Free Report) , and NVIDIA (NVDA - Free Report) , all carrying a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term earnings growth rate for Microsoft, Cadence Design, and NVIDIA is currently pegged at 11.1%, 11.7%, and 17.7%, respectively.