Brief real estate technology market update & ecosystem

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© Software Equity Group, LLC 2013

Kris Beible, Director of Business DevelopmentSoftware Equity Group, LLC

858 509-2800www.softwareequity.com

Brief Real Estate Technology Market Update & Ecosystem

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The information contained in this Report is obtained from sources we believe to be reliable, but no representation or guarantee is made about the accuracy or completeness of such information, or the opinions expressed herein. Nothing in this Report is intended to be a recommendation of a specific security or company or intended to constitute an offer to buy or sell, or the solicitation of an offer to buy or sell, any security. Software Equity Group LLC may have an interest in one or more of the securities or companies discussed herein. Financial data provided by Capital IQ.

This Report may not be reproduced in whole or in part without the expressed prior written authorization of Software Equity Group, L.L.C.

Disclaimer

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Real Estate Technology Ecosystem (Abbreviated)

Company Acquired

Public Company

Construction

Payments

Home Services Lead Gen

Data/Information Services

Broker CRM/Marketing Mortgage Orig. / FinanceProperty Search/Lead Gen

Property Mgmt Investment Mgmt

Commercial Construction Residential ConstructionFacilities Design/AECIWMS & Facilities Mgmt

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Public Companies: Real Estate Technology

Top 5: EV/Revenue

0.0x

10.0x

20.0x

30.0x

Median EV/Rev: 11.3x

Median Growth Rate: 71.3%

CompanyAngie's

List, Inc. CoStar Group

Textura Corp.

Trulia, Inc.

Zillow, Inc.

TTM Rev Growth 70.9% 47.8% 106.2% 87.8% 71.3%

EV/Rev 7.7x 10.1x 24.0x 11.3x 14.7x

*Public Company data sourced July 2013: CapitalIQ

Company Ticker CategoryMarket

Cap. (mm)Enteprise

Value (mm)LTM

RevenueLTM

EBITDALTM Revenue

GrowthLTM Gross

MarginLTM EBITDA

MarginEV/ Rev

EV/ EBITDA

Angie's List, Inc. (Nasdaq:ANGI) Home Services Lead Gen $1,404.4 $1,356.3 $176.9 -$43.0 70.9% 72.3% - 7.7x -Autodesk, Inc. (Nasdaq:ADSK) Facilities Design / AEC $7,957.9 $6,615.8 $2,294.0 $469.3 0.8% 89.2% 20.5% 2.9x 14.1xAveva Group plc (LSE:AVV) Facilities Design / AEC $2,568.1 $2,280.0 $333.4 $104.3 12.4% 92.7% 31.3% 6.8x 21.9xCoreLogic, Inc. (NYSE:CLGX) Data/Information Services $2,484.2 $3,130.5 $1,606.7 $340.6 16.4% 46.2% 21.2% 1.9x 8.3xCoStar Group Inc. (Nasdaq:CSGP) Data/Information Services $3,893.0 $3,891.8 $385.3 $59.7 47.8% 67.8% 15.5% 10.1x 65.2xEllie Mae, Inc. (NYSE:ELLI) Mortgage Orignation / Finance $648.3 $587.8 $111.8 $27.8 69.9% 77.2% 24.8% 5.3x 21.2xMove, Inc. (Nasdaq:MOVE) Property Search / Lead Gen $516.7 $486.5 $205.7 $15.3 8.1% 78.4% 7.4% 2.4x 28.8xNemetschek AG (XTRA:NEM) Facilities Design / AEC $611.0 $543.1 $233.7 $55.0 6.6% 52.1% 23.5% 2.3x 9.9xRealPage, Inc. (Nasdaq:RP) Property Management $1,532.7 $1,510.0 $336.7 $53.8 22.5% 60.4% 16.0% 4.5x 28.1xTextura Corporation (NYSE:TXTR) Commercial Construction $641.1 $655.3 $27.3 -$15.1 106.2% 75.0% - 24.0x -Trulia, Inc. (NYSE:TRLA) Property Search / Lead Gen $1,104.8 $900.4 $79.9 -$4.2 87.8% 86.3% - 11.3x -Zillow , Inc. (Nasdaq:Z) Property Search / Lead Gen $2,138.2 $1,959.2 $133.0 $8.1 71.3% 88.9% 6.1% 14.7x 241.3xzipRealty Inc. (Nasdaq:ZIPR) Broker CRM/Marketing $65.5 $54.5 $73.1 -$0.3 -10.2% 43.9% - 0.7x -

High: $7,957.9 $6,615.8 $2,294.0 $469.3 106.2% 92.7% 31.3% 24.0x 241.3xLow: $65.5 $54.5 $27.3 -$43.0 -10.2% 43.9% 6.1% 0.7x 8.3x

Average: $1,966.6 $1,843.9 $461.3 $82.4 39.3% 71.6% 18.5% 7.3x 48.8xMedian: $1,404.4 $1,356.3 $205.7 $27.8 22.5% 75.0% 20.5% 5.3x 21.9x

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M&A: Real Estate Technology

M&A Volume by Category: Annual

Aggregate M&A Volume: Annual

2009 2010 2011 2012 TTM July 2013

14

25

4842 43

# of

RM

&A

Tran

sacti

onsAggregate M&A Volume: Quarter

2009 2010 2011 2012 2013

2

5

10

6

10

2

5

10

13

10

2

7

14

12

8 8

14

11

Q1 Q2 Q3 Q4

# of

M&

A Tr

ansa

ction

s

4

1

0

1 1

0

2

0

1

0 0

3

6

2

1

0

1

2 2

1

3

1

4

2

7

1 1 1

9

2

3

1

7

1

7

8

9

1

0

1

5

1

7

0

5

2

6

5

4

2

0 0

5

3

9

3

4

1

8

4

2009 2010 2011 2012 TTM July 2013

# of

M&

A T

rans

acti

ons

*Data sourced July 2013: CapitalIQ

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Most Acquisitive Companies (1/2009 – Present)

Top 3 Most Active Buyers

Yardi; 13

RealPage; 10

Zillow; 6

HomeAway; 5Accruent; 4

CoreLogic; 4

Mar-ketLeader; 4

Reply!; 4

Autodesk; 3

CoStar Group; 3

Ellie Mae; 3

MRI S/W; 3

Textura; 3

Trimble; 3

Viewpoint Construction S/W; 3

# of Acquisitions

Level One

Evergreen Solutions

Energy Billing Systems

Property Research Partners

Multifamily Services Group

Peak Insurance Advisors

DIY Real Estate Solutions


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Top 10 Real Estate Technology M&A by Enterprise Value (EV)

Buyer TypeBuyer TargetDate EV (mm) EV/RevEV/

EBTIDA

4/27/2011 $654.2 8.2x 30.3x Public Public

5/8/2013 $314.3 6.6x - Public Public

1/11/2011 $270.0 4.7x 11.8x Public Public

3/24/2011 $231.8 6.1x 11.5x Public Private

3/22/2012 $145.0 - - Private Public Subsidiary


12/1/2009 $128.0 1.7x - Private Public Subsidiary

8/22/2011 $74.9 4.5x - Public Private

11/3/2010 Level One, Inc. $62.0 2.7x - Public Private

3/15/2011 $51.0 - - Public Private

Seller Type


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Top 10 Real Estate Technology M&A by EV/Revenue

Buyer TypeBuyer TargetDate EV (mm) EV/RevEV/

EBITDASeller Type

5/2/2012 $37.4 102.4x - Public Private

7/29/2011 $14.8 65.1x - Public Private

7/23/2012 $15.5 10.3x - Public Private

4/27/2011 $654.2 8.2x 30.3x Public Public

5/8/2013 $314.3 6.6x - Public Public


4/12/2011 $140.5 5.6 20.8x Public Private

1/11/2011 $270.0 4.7x 11.8x Public Public

8/22/2011 $74.9 4.5x - Public Private

8/15/2011 $25.2 3.2x - Public Private


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Summary

• Broad ecosystem of players

• Sector public companies currently performing well & quite acquisitive

• Strong post recession rebound in M&A volume

• General sector buyer acquisition appetite high

Top 5 M&A Volume: 2009 - Present

1. Property Management (30 deals)2. Broker CRM/Marketing (25 deals)3. Commercial Construction (23 deals)4. IWMS & Facilities Management (21 deals)5. Property Search / Lead Gen (20 deals)

Top 5 M&A Volume: TTM

1. Commercial Construction (9 deals)2. Broker CRM/Marketing (8 deals)3. IWMS & Facilities Management (5 deals)4. Property Management, Property Search /

Lead Gen, Mortgage Orig. / Finance (4 deals)

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Brief Overview: Software Equity Group

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• Twenty-one year, exclusive focus on software advisory services to lower middle market (i.e., client revenue $5 - $50M) representing companies seeking:

• Strategic exit• Growth capital• Buyout • Inorganic growth via acquisition• Fairness opinions and valuations• Board advisory services

• Clients span virtually every technology, product category, delivery model and vertical market

• Global presence providing advice and guidance to more than 2,000 private and public companies throughout US, Canada, Europe, Asia-Pacific, Africa and Israel

• Strong cross-functional team leveraging transaction, operating, legal and engineering experience

• Unparalleled software industry reputation, track record and industry research

• Highly referenceable base of past clients and buyers / investors

Leaders in Software & Technology Advisory Services

Focus on Advice

Multi-service

Multi- Industry

Focus on Software

Advisory Boutiques

Bulge Bracket Firms IPO Boutiques

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Extensive Global Reach

SEG Research Distribution

Current Sell-side Representation

Recent Sell-side Representation

• SEG currently represents software companies in the United States, Canada, France, Germany, Australia & Saudi Arabia

• In addition to the countries listed above, SEG has recently represented software companies in the United Kingdom, France, Netherlands, Israel, and South Africa

• SEG’s Quarterly and Annual Software Industry Equity Reports and Monthly Flash Reports are distributed to an opt-in list of 50,000 public software company CEOs, software entrepreneurs, private equity managing directors, VCs, high tech corporate lawyers, public accountants, etc. in 76 countries.

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has received a growth equity investment from

Leaders in Real Estate Technology M&A

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To discuss the real estate technology ecosystem, M&A transactions and/or your business, please contact me at:

P: 858.509.2800

Email: [email protected]

Brief real estate technology market update & ecosystem

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