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Tyler's CaseloadPRO Acquisition In Line With Growth Strategy

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TylerTechnologies (TYL - Free Report) has reportedly acquired Modesto, CA-based CaseloadPro, a provider of digital tools for managing probation cases, for an undisclosed amount.

The acquisition will expand Tyler's courts and justice segment, which is the company’s second-largest unit, generating around 18% of total revenues.

Notably, the company’s court and justice offerings will get a boost with the addition of a comprehensive supervision solution for probation and parole departments and eventually strengthen its foothold in the probation market.

Moreover, the deal is expected to strengthen the Tyler Alliance initiative, which was launched in 2016 to help clients share data and engage in efficient communication across jurisdictions through a platform for creating safer communities.

Acquisitions to Drive Growth

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 currently focuses on internal growth, it continues to identify and pursue strategic acquisitions for driving growth.

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 revenue 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.

Moreover, the company’s acquisition of New World Systems Corporation in November 2015 helped it significantly expand its presence in the public safety market. In May 2015, it acquired Brazos Technology, a provider of mobile hand held solutions, primarily to law enforcement agencies.

The company includes the results of these acquisitions in its Enterprise Software (ES) segment. Per the company’s last annual filing, Software licenses and royalties revenues and subscription revenues from the segment increased 27% year over year each in fiscal 2016, while software services and maintenance revenues grew 23% and 34%, respectively.

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) , Fortinet (FTNT - Free Report) and CommVault Systems (CVLT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Long-term earnings growth rate for Aspen, Fortinet and CommVault is currently projected to be 16.5%, 16.8% and 15.8% respectively.

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