Global Technology M&A Trends and Analysis – 1H 2015€¦ · § Global wearable technology...

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www.woodsidecap.com Global Technology M&A Trends and Analysis – 1H 2015 July 2015

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Page 1: Global Technology M&A Trends and Analysis – 1H 2015€¦ · § Global wearable technology shipments, including fitness devices, is expected to reach 126.1 Mn in 2019 from 19.6 Mn

www.woodsidecap.com

Global Technology M&A Trends and Analysis – 1H 2015

July 2015

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2 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Software Industry Landscape

Internet Software Online Services

Systems Software Application Software IT services

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Hardware Industry Landscape

Communications Equipment Electronic Equipment, Instruments & Components

Technology Hardware, Storage & Peripherals

Semiconductors & Semiconductor Equipment

Technology Distributors

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CONTENTS

Technology Trends 9

Software Sector M&A Overview 26

Stock Market Performance 60

Executive Summary 5

Hardware Sector M&A Overview 43

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§  Global digital ad tech spending is forecasted to reach US$253.0 Bn by 2018 with an estimated 36.6% share in media ad spending; Mobile Internet ad spending will dominate digital ad spending

§  Mobile Internet ad spending will continue to have the biggest share in US digital ad spending; digital video ad spending share is set to increase to 15.5% of digital spending by 2018

§  Rise in associated loss due to data breach incidents has led to increases in spending by the US government on cyber security; cyber security market is expected to reach US$155 Bn by 2019

§  Global wearable technology shipments, including fitness devices, is expected to reach 126.1 Mn in 2019 from 19.6 Mn in 2014 §  Smart homes market is estimated to be the largest market within smart cities, constituting 26.6% share in 2017; sales to expand at 26.9% CAGR over

2012–17; IoT market to accelerate to US$7.1 Tn by 2020 and IoT-enabled devices to represent 50% of global connected devices by 2020, driven by low component cost and need for connectivity

§  Global e-commerce and m-commerce markets are forecast to reach US$1.3 Tn and US$626 Bn, respectively by 2018, led by rapid smartphone adoption and internet penetration; US e-commerce and m-commerce markets to reach US$491.5 Bn and US$132.7 Bn, respectively in 2018

§  Global semiconductor market to reach US$369.6 Bn by 2017, driven by integrated circuits segment; Asia-Pacific region continue to be the largest and fastest growing market

Executive Summary

Technology Trends

§  Growth in digital ad tech sector, driven by programmatic marketing platform, real-time-bidding, and mobile ad growth, expected to lead to increased M&A activity during the next 12 months

§  Enterprises seeking technology innovations to reduce business vulnerability and threats from emerging finance solutions are likely to increase M&A activities §  The need to establish presence in the sector and the growing demand for smart mobility with decline in hardware costs to drive deal activity in IoT sector §  Consolidation among players, omni-channel capabilities and need to build supply chain to drive M&A in e-commerce space in 2015

§  In 2015, M&A activity in semiconductor sector continues to be fuelled by shift from PCs to mobiles, new technologies that improve connectivity and functionality

§  Demand for analytics and low-cost architecture is expected to drive M&A activity in HR technologies and smart storage solutions

Technology Industry Outlook

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§  Global M&A activity in 2015 is expected to continue the robust deal activity experienced in 2014; Deal value surges in the first two months of Q2 2015

§  Global mid-market deal volume and value surge in Q1 2015 after a subdued previous quarter; US mid-market deal value driven by few major deals in Q1 2015

§  Global average transaction size surges in Q1 2015 over Q4 2014; Mid market deals rise in Q1 2015; Mega deals drive transaction value in the first two months of Q2 2015

§  US average transaction size trend upwards for all size segments in Q1 2015; First two months of Q2 2015 witnesses robust increase in deal value led by mega deals

§  Global M&A activity remained robust in 2014, with high deal volume and average transaction size; Momentum is expected to continue in 2015 with increasing average transaction size

§  Globally, online services and application software experience the largest M&A activity among the software sub-sectors, accounting for over 85% of deal volume in Q1 2015

§  M&A activity in software industry is led by online services and application software sub-sectors in US, accounting for over 87% of deal volume in Q1 2015

§  Strategic buyers dominate the global and US M&A activity in the software industry; over 95% of acquisitions have been made by strategic buyers

§  US and Canada accounts for nearly half of global M&A activity in software industry, followed by Europe

§  Global and US M&A transactions marked by higher purchase price multiples in Q1 2015 compared to Q1 2014

§  Cross-border M&A accounts for nearly one-fourth of global transactions; cross-border deal value at three-year high in the first two months of Q2 2015

§  US buyers have acquired more software companies outside the US than non-US buyers have acquired in the US; both inbound and outbound M&A activity remain buoyant in Q2 2015

§  Yahoo, Google and Twitter have been the most active recent acquirers in the software industry

Executive Summary

Software Industry: M&A Activity

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Executive Summary

§  Global hardware industry M&A activity registered strong growth in first five months of 2015; deal value highest in three years

§  The number of deals below US$50 Mn and above US$500 Mn increased in Q1 2015 over Q4 2014; large ticket deals drove transaction value in first two months of Q2 2015

§  Global mid-market deal volume and value decline in Q1 2015; US mid-market deal value also fell in Q1 2015

§  Average transaction size trends upwards for all size segments in Q1 2015 in the US; first two months of Q2 2015 witness robust increase in deal value, led by mega deals

§  Global M&A activity remained robust in first five months of 2015, with high deal volume and average transaction size

§  Globally, electronic equipment and semiconductors witnessed the largest M&A activity in deal volume and value in Q1 2015

§  M&A activity in the US was led by electronic equipment, instruments and components, and communications equipment sub-sectors in US, accounting for over 64% of deal volume in Q1 2015

§  Strategic buyers dominate global M&A activity in hardware industry with over 90% of deals

§  Strategic buyers dominate M&A activity in US hardware industry, representing over 90% of deals

§  US and Canada record highest M&A activity in hardware industry, accounting for 41% transactions by deal volume and 49% by deal value

§  Global and US M&A transactions marked by lower purchase revenue multiples in Q1 2015 than Q4 2014 and Q1 2014

§  Global M&A transactions marked by higher purchase price EBITDA multiples than Q4 2014 and Q1 2014 in Q1 2015; US M&A transactions marked by lower purchase price EBITDA multiples in Q1 2015

§  Cross-border M&A accounts for over one-fourth of global transactions; cross-border deal value reaches three-year high in first two months of Q2 2015

§  Number of US inbound deals increased in Q1 2015 while outbound deals remained flat; deal value of inbound M&A registered record growth as compared to the last three years

§  Intel, Ametek and Arrow Electronics have been the most active recent acquirers in the hardware industry

Hardware Industry: M&A Activity

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CONTENTS

Technology Trends 9

Software Industry M&A Overview 26

Stock Market Performance 60

Executive Summary 5

Hardware Industry M&A Overview 43

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Global Digital Ad Tech Spending (US$ Bn) Global Mobile Internet Ad Spending (US$Bn)

§  Digital ad spending is expected to rise at a CAGR of 14.9% from 2014 to 2018, driven by mobile, digital video, and programmatic buying

§  Effective data-driven targeting, low CPMs, and a direct feedback loop that enables the calculation of ROI on digital advertising dollars spent have driven increased spending

§  According to comScore, in 2014, ~60% of time spent online was on mobile devices, with the majority of this activity being within apps

Global Digital Advertising: Global ad tech spending continues to grow rapidly, with mobile advertising steadily increasing its share of spending

Source: eMarketer

120.0

145.0

171.0

198.0

225.0

253.0

23.1%

26.6%

29.6%

32.2% 34.5%

36.6%

2013 2014 2015E 2016E 2017E 2018E

Digital ad spending % of total media ad spending

19.2

42.6

68.7

101.4

133.7

166.6

16.0%

29.4%

40.2%

51.2%

59.4%

65.9%

2013 2014 2015E 2016E 2017E 2018E

Mobile Internet ad spending % of digital ad spending

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US Digital Advertising Spending (US$ Bn)

32.4 31.6 29.9 26.6 25.0 25.2

10.7 19.2

28.7 40.5

49.8 57.8

24.8%

37.8%

49.0%

60.4%

66.6% 69.7%

2013 2014 2015E 2016E 2017E 2018E

Desktop Mobile Mobile as a % of total

US Digital Video Advertising Spending (US$ Bn)

3.1 4.3

5.2 5.7 6.2 6.9 0.7

1.5

2.6

3.9

5.1

6.0

8.9%

11.5%

13.3% 14.3%

15.0% 15.5%

2013 2014 2015E 2016E 2017E 2018E

Desktop Mobile Video as % of digital spending

§  The penetration of new video-capable devices and increased popularity of video streaming services are leading viewership away from traditional television

§  Ad tech budgets are shifting from linear television to online and mobile video, which has led to expansion in video advertising

US Digital Advertising: Mobile ad spending in US to continue to increase share of digital ad spending

Source: eMarketer; WCP Analysis

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Ad Tech M&A Drivers: Programmatic marketing platforms, real-time-bidding, and mobile ad growth

Digital Ad Tech: Key M&A Transactions

§  High demand for companies that provide innovative ways to create real value for brands is driving the M&A market in the digital ad tech space

§  Digital ad tech companies that provide improved data analytics through complex algorithms, which enable effective and personalized targeting and provide real-time data, are expected to gain ground

•  Need for customer relationship management systems with valuable social data on target audiences that advertisers can use to develop and provide successful marketing campaigns may drive further acquisitions and partnerships

§  Programmatic marketing platforms that provide advanced methods to optimize and measure the return on investment for advertisers are likely to attract increased attention

Source: Capital-IQ; WCP Analysis

Digital Ad Tech: M&A Outlook

Ann. Date Target Acquirer Deal Value (USD Mn) EV/Revenue (x) Target Description May-15 Shift Labs Brand Networks 50 NA Provides real-time marketing platform for advertisers

May-15 AOL Verizon 4,759.40 1.7x Digital distributor of content, products, and services

Apr-15 Bronto Software NetSuite 200 NA Provides cloud-based marketing platform

Apr-15 Chango Rubicon Project 122 NA Programmatic advertising platform provider

Mar-15 Mob Partner Cheetah mobile 58 1.9x Operates a mobile affiliate network that connects advertisers

Mar-15 eXelate Nielsen NA NA Provides analytics, smart data & cloud products for marketers

Mar-15 Avazu Dalian Zeus 333.6 NA Digital marketing services provider

Mar-15 Yieldex AppNexus 100 NA Cross-channel revenue and inventory management platform Feb-15 SocialMoov Marin Software 18.8 NA Provides platform for social advertising

Feb-15 Spotzot Valassis Comm NA NA Provides mobile advertising platforms with focus on location tech.

Jan-15 ZipDial Twitter 30 NA Provides marketing, customer engagement & analytics solutions

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§  The per capita cost of data breaches continues to increase, with the average estimated cost at US$153.1 in 2015, up from US$146.9 in 2014

§  Spending on cyber security by the US government is expected to increase significantly due to the increasing losses from data breaches, which is among the highest in the world

Per Capita Cost of Data Breach (US$) US Budget Allocation on Cyber Security* Cyber Security Market Size (US$ Bn)

Cyber Security: Increase in data breaches leads to spending increases

Source: Ponemon Institute; MarketsandMarkets;

188

210

177

143

131

120

131

52

37

201

195

183

158

141

127

135

70

51

217

211

186

163

146

135

133

78

56

US

Germany

France

UK

Italy

Japan

Australia

Brazil

India

2013 2014 2015E

0.9

14.0

2000 2016E

95.6 105.4

116.2

128.1

141.3

155.7

2014 2015E 2016E 2017E 2018E 2019E

~14x increase CAGR: 10.2%

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Cyber Security: Recent Transactions and Outlook

Cyber Security: Key M&A Transactions

§  The need for continuous improvement in technology to counter rapid evolving cyber threats is forecast to drive M&A as firms seek to acquire solutions rather than develop in-house

•  Firms may look to buy innovation-driven, small-scale firms that offer niche cyber security services and products

§  An increase in business vulnerability as a result of growth in connectivity (often through less secure devices such as mobile phones and cloud storage) is likely to drive companies to acquire/partner with other security providers to reduce the risk of potential loss of IP, reputation, and customers

§  The increased use of electronic/mobile commerce and banking, greater use of digital cash, and growth in new payment models may also lead to increased acqusitions

Source: Capital-IQ; WCP Analysis

Cyber Security: M&A Outlook

Ann. Date Target Acquirer Deal Value (US$ Mn) EV/Revenue (x) Target Description

Jun-15 OPenDNS Cisco 635.0 NA Cloud-based security solutions

Jun-15 Virtustream EMC 1,200 NA Provides enterprise-class cloud software and services and cyber security solutions

Jun-15 Knowledge Consulting Group

ManTech International NA NA Provides cyber risk management, governance, operations, and

compliance services

May-15 Resolution1 Security General Dynamics Fidelis NA NA Provides incident resolution solutions

May-15 Creative Computing Solutions

Information innovators NA NA Cyber security and health-focused Solutions

Apr-15 Information Security Solutions

Assured Info. Security NA NA Cyber security, information technology security, and cyber

intelligence solutions

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14 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Internet of Things (IoT) Market Size (US$ Tn) Global Connected Devices (Bn)

§  IoT devices are projected to contribute to ~50% of global connected devices by 2020 as a result of:

•  Low cost to add IoT capability to consumer products, due to reduced component costs

•  Increased demand for remote control, monitoring, and sensing functions

§  The advent of low-priced sensors, low-cost internet bandwidth, big data analytics and the need for connectivity have led to growth in the IoT market

IoT Market: Reduced component cost and need for connectivity to drive rapid growth

Source: IDC, Strategy Analytics

1.9

2.7

3.8

5.6

7.1

2013 2015E 2017E 2019E 2020E

0

5

10

15

20

25

30

35

2014 2015E 2016E 2017E 2018E 2019E 2020E

PCs Smartphones Tablets Internet Media Devices Smart TVs Smart Home Devices Wearables IoT

49.9%

4.8%

14.5%

4.8% 4.2% 5.9%

12.8%

3.0%

CAGR: 20.4%

As a % of total

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Global Wearable Device Shipments (Mn) Global Wearable Device Shipments by Product (Mn)

§  Wearable device shipments are projected to reach 46.0 Mn by 2015 from 19.6 Mn in 2014; higher consumer awareness, new device launches, and cross platform adaptation of smart wearables are driving the demand for wearable devices

§  Wrist-wear devices, such as watches and bands, account for 90.4% of wearable devices; they are forecast to reach 101.4 Mn in shipments in 2019 from 17.7 Mn in 2014, expanding at a CAGR of 41.8%.

Global Wearables: Fitness devices to drive rapid growth

Source: IDC; Note: Basic wearables are those devices that do not run third party applications

15 20 27

36 44

52

4

26

38

50

63

74

19

46

65

86

107

126

2014 2015E 2016E 2017E 2018E 2019E

Basic Smart

CAGR: 46.0%

19.6

126.1

17.7

101.4

1.6

6.7 5.6

0.1

5.1

0.2

7.3

2014 2019E

Wristwear Modular Clothing Eyewear and Earwear Other

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Smart Home Market (US$ Bn) Smart Home Devices within smart cities (Mn)

§  The smart home technology market is expected to reach US$71.8 Bn in 2017 from US$21.8 Bn in 2012, expanding at a CAGR of 26.9%

§  Adoption is fueled by an increasing need for connectivity across devices for entertainment, computing, monitoring and control, and health

§  The share of smart homes in smart cities is projected to increase to 39.9% in 2017 from 26.6% in 2015, fueled by investments in energy management, automation, and security

Smart Homes: Rapid growth driven by need for connectivity across devices and energy management, automation and security

Source: Deloitte University Press; Gartner

13.7

41.3 8.1

30.5

21.8

71.8

2012 2017E

Smarthome hardware Smarthome installation services and fees

CAGR: 26.9%

97.8 126.4 159.5 206.2

354.6 648.1 294.2

586.1

1,067.0

237.2

298.9

371.0

252

304.9

371.1

19.9

33.4

57.3

2015E 2016E 2017E

Public Services Smart Comm. Buildings Smart Homes Transport Utilities Others

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IoT Market: Large, traditional companies acquiring smaller IoT vendors to establish foothold in rapidly emerging IoT sector

IoT: Key M&A Transactions

Ann. Date Target Acquirer Deal Value (US$ Mn) EV/Revenue Target Description

Jun-15 Altera Intel 15,844.5 8.3x Embedded chip company that specializes in reconfigurable chips

Apr-15 Motorola Sol. Ent. device business Zebra 3,450.0 NA Rugged mobile comp, tablets, and WLAN products for business

Feb-15 Exelis, Inc. Harris Corp. 5,193.2 1.43x Command, control, communication, computers, intelligence, and surveillance electronics and systems provider

Feb-15 MyFitnessPal & Endomondo Under Armour 560.0 NA §  Health tracking app

§  Social sports and fitness network

Feb-15 AlertMe British Gas 67.7 NA Home energy-monitoring software provider

Jan-15 Wit.ai Facebook NA NA Voice recognition technology

§  Large players, in an attempt to establish their foothold in the IoT-enabled landscape, are expected to increase acquisitions/partnerships with niche players: 2014/15 saw Google buy manufacturers of Internet-enabled technology for homes (Nest acquisition) and wearables (WIMM Labs acquisition)

§  The need to leverage declines in technology cost and increased use of Internet connectivity to improve consumer relationships, find new revenue sources, and gain differentiated competitive advantage is likely to increase M&A activity in the IoT sector

§  The threat of competition from established technology companies that also have presence in the IoT space is likely to drive acquisitions by bigger brands (Under Armour acquisition of MyFitnessPal)

§  Connected cars and industrial IoT solutions are anticipated to drive growth in M&A activity as the need for smart mobility solutions and industrial demand intensify

Source: Capital-IQ; WCP Analysis

IoT: M&A Outlook

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Global E-commerce Sales* (US$ Bn) Global M-commerce Sales* (US$ Bn)

§  Global e-commerce sales are expected to expand to US$1.3 Tn in 2018 from US$545 Bn in 2012, with Asia-Pacific and North America leading the market

§  Global m-commerce sales are projected to increase at a CAGR of 47.4% over 2012-2018, driven by growth in the adoption of mobile devices such as smartphones and tablets

Global E-commerce and M-commerce: Growth led led by rapid smartphone/Internet adoption combined with improved ability to transact via mobile devices

Source: eMarketer; Euromonitor; Goldman Sachs; Ex-travel

61.0

133.0

204.0

298.0

415.0

516.0

626.0

2012 2013 2014E 2015E 2016E 2017E 2018E

545.0 638.0

752.0

882.0

1,024.0

1,179.0

1,346.0

2012 2013 2014E 2015E 2016E 2017E 2018E

CAGR: 16.3% CAGR: 47.4%

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US E-commerce Sales (US$ Bn) US M-commerce Sales (US$ Bn)

§  US is currently the largest retail e-commerce market, with US$304.1E Bn in global e-commerce sales in 2014

§  US retail m-commerce sales are forecast to rise to US$132.7 Bn in 2018 at a CAGR of 32.3% over 2012–18, driven by sales through tablets

§  According to Forrester, US consumer adoption of smartphones and tablets is likely to rise to 244 mn and 150 mn users, respectively, in 2017

US E-commerce and M-commerce: M-commerce to steadily increase overall share of E-Commerce

Source: eMarketer

225.3

263.3

304.1

347.3

392.5

440.4

491.5

5.2%

5.8%

6.4%

7.0%

7.6%

8.2%

8.9%

2012 2013 2014E 2015E 2016E 2017E 2018E

Retail E-commerce Sales % of Retail Sales

24.8

42.1

57.8

76.4

98.1

114.5

132.7

0.6%

0.9%

1.2%

1.5%

1.9%

2.1%

2.4%

2012 2013 2014E 2015E 2016E 2017E 2018E

Retail M-commerce Sales % of Retail Sales

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E-Commerce M&A Drivers: Consolidation, omni-channel capabilities and need to build supply chain

E-commerce/M-commerce: Key M&A Transactions

Ann. Date Target Acquirer Deal Value (US$ Mn) EV/Revenue Target Description

Jun-15 LightInTheBox Holding

Zhejiang Aokang Shoes 83.5 0.67x Online retail company

May-15 Menulog Group JUST EAT plc 687.3 33.0x Online takeaway food and home-delivery platform

May-15 Hualian Electric Commerce

China Strategic Holdings 258.1 NA Online shopping platform

May-15 Geeknet GameStop 133.8 0.71x Online retailer for the global geek community

Apr-15 Freecharge Snapdeal 400.0 NA Online mobile recharge provider

Feb-15 Orbitz Worldwide Expedia 1,880.1 1.82x Online travel company

§  Consolidation in the sector, with bigger companies acquiring smaller, niche ones, is projected to drive M&A as players seek to expand geographic reach and product line

§  Growth in the concept of the omni-channel brand is likely to drive online retailers to acquire companies with physical real estate to provide inspection/trial of their products and engage with consumers. For instance, in 2014, Alibaba invested US$692 Mn in a Chinese department store operator to provide a storefront to its online operations and boost consumer experience

§  Brick-and-mortar retailers may look to acquire e-commerce retailers to build their digital footprint and/or enter new markets

§  To capitalize on mobile commerce, firms are likely to increase vertical and horizontal integration to expand mobile capabilities, thereby driving M&A in segments such as payments

Source: Capital-IQ; WCP Analysis

E-commerce/M-commerce: M&A Outlook

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Global Semiconductor Market by Segment (US$ Bn) Global Semiconductor Market by Region (US$ Bn)

§  The global semiconductor market is forecasted to expand at a CAGR of 4.9% to US$369.6.0 Bn during 2012–17 led by the integrated circuits segment, which accounts for more than 80% of total semiconductor sales

§  Asia-Pacific, the largest market, accounts for over 55% of the total semiconductor sales, and is projected to expand most rapidly at a CAGR of 6.6% over 2012–17

Global Semiconductors: Growth led by integrated circuits segment and Asia-Pacific region

Source: World Semiconductor Trade Statistics

163.0 174.4 194.2 207.7 216.4 224.6

54.4 61.5

69.3 71.9 73.3 74.6

33.2 34.9

37.5 36.1

37.0 37.8

41.1 34.8

34.8 31.5

32.1 32.6

2012 2013 2014 2015E 2016E 2017E

Asia Pacific Americas Europe Japan

238.2 251.8 277.3 285.8 295.3 303.9

26.2 27.6

29.9 32.4

33.5 34.7

19.1 18.2

20.2 20.4

21.0 21.6

8.0 8.0

8.5 8.7

9.1 9.5

2012 2013 2014E 2015E 2016E 2017E

Integrated Circuits Optoelectronics Discrete Semiconductors Sensors

291.6

335.8

305.6

369.6 347.2

358.9

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Semiconductor M&A Drivers: Shift from PCs to mobiles, new technologies to improve connectivity and functionality

Semiconductor: Key M&A Transactions

Ann. Date Target Acquirer Deal Value (US$ Mn) EV/Revenue Target Description

Jun-15 Altera Corp. Intel 18,220.5 8.31x A semiconductor company, which manufactures programmable logic devices and reconfigurable complex digital circuits

May-15 Broadcom Corp. Avago Tech. 36,697.9 3.97x The company offers semiconductor solutions for wired and wireless communications

May-15 NXP Semiconductors Investor Group 1,800.0 - Divestiture of RF Power business

Apr-15 OmniVision Technologies Investor Group 1,897.8 1.00x The company designs, develops, manufactures, and markets

semiconductor image-sensor devices

Mar-15 Freescale Semiconductor

NXP Semiconductor 17,297.2 3.58x The company manufactures embedded processors

Mar-15 Philips LumiLeds Investor Group 2,900.0 1.80x The company develops, manufactures, and markets LEDs, modules, products, and systems for lighting applications

§  The continued shift from PCs to mobile is likely to increase M&A activity among PC-focused chip manufacturers, as they look to acquire companies to boost their mobile capabilities

§  New technologies, such as Internet-of-Things, wearables, and smart home, may create opportunities for the semiconductor sector; embedding ‘smart’ capabilities into devices would require semiconductor companies to acquire innovative companies to optimize R&D investments

§  Demand for products offering enhanced functionality, high processing speed, and reduced power consumption, is likely to increase M&A activity (Sumitomo Chemical’s bid to acquire the compound semiconductor materials business of Hitachi Cable)

§  Chinese companies and investment groups becoming more active as potential buyers

Source: Capital-IQ; WCP Analysis

Semiconductor: M&A Outlook

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23 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

HR Technology: Social sourcing in recruitment and demand for analytics may drive M&A activity

HR Technology: Key M&A Transactions

§  The cloud-based human capital management (HCM) applications market is projected to expand to US$8.4 Bn by 2018 from US$5 Bn in 2013 at a CAGR of 10.9%

§  Big data and the growing contingent workforce are increasing demand for HR Technology

§  Real-time workforce visibility and flexibility allow for organizations to respond to changing market conditions

§  Cloud technology is creating massive economies of scale, while reducing IT resource involvement

§  Adoption of social sourcing in recruitment, mobile applicant tracking, and Big Data analytics is forecasted to result in the acquisition of niche tech players

Source: Entrepreneur; Capital-IQ; WCP Analysis

HR Technology: M&A Outlook

Ann. Date Target Acquirer Deal Value (US$ Mn) EV/Rev Target Description

May-15 SuperiorHR Zuman NA NA Offers human resource (HR) outsourcing and consulting services

Nov-14 bswift Aetna 400.0 NA Benefits administration technology & services to employers

Oct-14 Allocate Software HgCapital 145.3 2.3x Workforce optimization & assurance s/w & services

Oct-14 Evolv Cornerstone OnDemand 42.5 14.2x Provides workforce optimization solutions through big data

Sep-14 Concur SAP 8,300.0 11.5x Cloud-based travel and expense management

Apr-14 Distill Gild NA NA Provides platform enabling companies to find, engage, and hire talent with data and intelligence

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24 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Storage Market: Software-defined storage and infrastructure convergence for personal and enterprise data storage may drive M&A activity

Storage: Key M&A Transactions

§  The high cost and vulnerability of physical servers and storage devices are driving enterprises to adopt cloud storage as it offers the option of low-cost scalability with easy access and management of data

§  Data protection and other add-on storage capabilities will become more directly linked to storage solutions

§  Storage will move beyond serving database-friendly LUNs to providing more application-centric storage features

§  Private cloud storage, particularly Tier-2 storage, is expected to be rolled out in larger deployments in 2015 by both the government sector and larger enterprises

§  The need for advanced SSDs, flash arrays, software-defined-storage, and infrastructure convergence for personal and enterprise data storage is anticipated to drive M&A activity

Source: Appsruntheworld; TechTarget; Capital-IQ; WCP Analysis

Storage: M&A Outlook

Ann. Date Target Acquirer Deal Value (USD Mn) EV/Rev. (x) Target Description

Apr-15 IBM Storage Lenovo 3,400.0 NA Entire storage portfolio of IBM

Mar-15 Spansion Cypress 5,000.0 NA Supplier of flash memory and microcontrollers

Mar-15 Amplidata WD/HGST NA NA Object-based software defined storage solution

Jan-15 CloudOn Dropbox 100.0 NA Mobile document creator and editor

Jul-14 InMage Systems. Microsoft Corporation NA NA provides backup, disaster recovery, and cloud platform

software for enterprises

Apr-14 InkTank Red Hat 175.0 NA Open source object storage provider

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25 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Industry Landscape of Technology Sub-sectors

Internet of Things Semiconductor Digital and Video Advertising

Cyber Security HR Technology & Storage E-commerce / M-commerce

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26 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

CONTENTS

Technology Trends 9

Software Industry M&A Overview 27

Stock Market Performance 61

Executive Summary 5

Hardware Industry M&A Overview 44

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27 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global and US Software M&A Activity: Robust deal activity expected to continue through 2015 with deal value surging in the first two months of Q2 2015

Global & US: Deal Volume and Value

6.2 6.0 3.5 4.7 3.2 4.7 6.4 6.8

10.6 6.2 4.2 4.2

7.4 7.3

6.3 9.7

9.8 9.4

3.1

23.5 11.6 10.7

29.4

13.7 26.9

7.3

8.8 15.0

569 590 597 553

512 512 558 567

541

651

554 508 496

385

286 275 297 302 266 256 276 268

281 323 296

243 251 191

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Deal Value (USD Bn) - Global (Ex. US) Deal Value (USD Bn) - US Deal Volume - Global Deal Volume - US

§  Global deal volume in the software industry decreased 2.4% QoQ and 8.3% YoY to US$496B in Q1 2015, while aggregate deal value increased 40.9% QoQ to US$16.1 Bn in 2015’Q1 led by acquisition of Advent Software (US$2.6 Bn) by SS&C Technologies and Fundtech by DH Corporation (US41.3 Bn). However, deal value in 2015’Q1 declined 59.7% YoY as 2014’Q1 witnessed one of the largest deals (Facebook’s acquisition of WhatsApp valued at US$19.7 Bn)

§  US deal volume rose 3.3% QoQ but declined 10.7% YoY to 251 in Q1 2015. Aggregate deal value surged 19.3% QoQ but decreased 70.2% YoY to US$8.8 Bn in Q1 2015. Deal value in US for the first two months of Q2 2015 stood higher than Q1 2015 at US$15.0 Bn led by two large deals (AOL and Informatica Corp.)

Source: Capital-IQ; *Till June 8, 2015; Note: Deals that are announced, closed or effective; Deal value includes transactions with disclosed values only;

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28 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global: Deal Volume by Ticket Size

136 142 144 121

109 117 137 130

112

137

99 104 80 71

28 34 28

22 24

21

27 46

32

41

37 32

33

17

4

7 6

9

3 11

10 6

13

11

13 7

7

7

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Deals (<USD50 Mn) Deals (USD50-500 Mn) Deals (>USD500 Mn)

Global: Deal Value by Ticket Size (US$ Bn)

§  Deals below US$50 Mn dominate the M&A deal volume, with 80 transactions valued at US$1.2 Bn in Q1 2015. Average deal value stood at US$14.6 Mn in Q1 2015 compared to US$12.5 Mn in 2014’Q4 and US$12.0 Mn in Q1 2014

§  Mid Market witnessed 33 transactions valued at US$6.2 Bn in Q1 2015. Average deal value stood at US$188.3 Mn vis-à-vis US$142.7 Mn in Q4 2014 and US$150.3 Mn in Q1 2014.

§  Deal value for large deals (>US$500 Mn) totaled US$8.7 Bn from 7 transactions, with an average deal value of US$1.2 Bn in Q1 2015

Global M&A Software Trends: Average transaction size increasing; Mid market deals rise in Q1 2015; Mega deals drive transaction value in the first two months of Q2 2015

1.7 1.9 1.5 1.7 1.3 1.2 1.6 1.7 1.3 1.9 1.3 1.3 1.2 1.1

4.7 5.4 4.1 3.3 2.9 3.9 4.6

8.0 4.8

6.1 7.1 4.6 6.2

4.2

6.0

8.5 7.7 9.1

2.2

23.1

11.8 7.8

33.9

11.9

22.7

5.7

8.7 17.0

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Deals (<USD50 Mn) Deals (USD50-500 Mn) Deals (>USD500 Mn)

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

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29 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global Mid-Market Software M&A: Deal volume and value surge in Q1 2015

Global & US: Mid Market Deal (US$50-500 Mn) Volume and Value

§  Global mid-market deal volume rose marginally to 33 as compared to 32 in Q1 2014 and Q4 2014. Deal value surged 36.0% QoQ and 29.1% YoY to US$6.2 Bn in Q1 2015. Major deals in Q1 2015 included the acquisition of MyFitnessPal by Under Armour and KCG Hotspot by BATS Global Markets

§  US mid-market deals stood at 13 in Q1 2015 vis-à-vis 16 in Q4 2014 and 18 in Q4 2014. Aggregated deal value was US$2.7 Bn, an increase of 14.3% QoQ and at similar levels compared to Q1 2014

1.0

2.8 2.0

0.9 1.3 2.2 2.4

3.7

2.1

3.4

2.3 2.2

3.6

1.9

3.7

2.6

2.2

2.3 1.6

1.7 2.2

4.4

2.7

2.7 4.8

2.3

2.7

2.2

28 34

28 22 24 21

27

46

32

41 37

32 33

17 19 15 14 14 13 10 9

24 18 18

22 16 13

8

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Deal Value (USD Bn) - Global (Ex. US) Deal Value (USD Bn) - US Deal Volume - Global Deal Volume - US

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

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30 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

US: Deal Volume by Transaction Size US: Deal Value by Transaction Size (US$ Bn)

§  In Q1 2015, there were 30 transactions below US$50 Mn representing a total value of US$500 Mn. Average deal value rose to US$15.7 Mn in Q1 2015 from US$14.2 Mn in Q4 2014 and US$13.6 Mn in Q1 2014

§  Mid-Market had 13 transactions valued at US$2.7 Bn in Q1 2015. Average deal value was US$204.3 Mn vs. US$145.2 Mn in Q4 2014 and US$204.3 Mn in Q1 2014.

§  Deal value for large deals (>US$500 Mn) totaled US$5.6 Bn from 4 transactions, with an average deal value of US$1.4 Bn in Q1 2015

US Software M&A: Average transaction size increases in Q1 2015; Mega deals drive growth in Q2 2015

0.7 0.8 0.6 0.8 0.5 0.4 0.6 0.6 0.7 0.9 0.5 0.5 0.5 0.4

3.7 2.6 2.2 2.3 1.6 1.7 2.2 4.4

2.7 2.7 4.8 2.3 2.7 2.2

1.9 6.3 7.0 6.3

1.0

21.3

8.7 5.8

26.1

10.0

21.5

4.5 5.6

12.4

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Deals (<USD50 Mn) Deals ($50-USD500 Mn) Deals (>USD500 Mn)

46 52 51 48

42 43

58

46 48 59

39 37 30

22

19 15 14

14

13 10

9 24 18

18

22 16

13

8

1 5 5

5

1 8

7 5 8

9

12

5

4

5

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Deals (<USD50 Mn) Deals (USD50-500 Mn) Deals (>USD500 Mn)

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

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31 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global Software M&A Activity by Quarter

Global: Average Deal Size

12'Q1, $74.2 Mn

12'Q2, $86.1 Mn

12'Q3, $74.9 Mn

12'Q4, $92.4 Mn

13'Q1, $46.5 Mn

13'Q2, $189.4 Mn

13'Q3, $103.0 Mn

13'Q4, $96.4 Mn

14'Q1, $255.1 Mn

14'Q2, $105.5 Mn

14'Q3, $208.3 Mn

14'Q4, $80.9 Mn

15'Q1, $134.4 Mn

15'Q2*, $234.6 Mn

$0Mn

$50Mn

$100Mn

$150Mn

$200Mn

$250Mn

$300Mn

20 25 30 35 40 45 50 55 60

Aver

age

Dea

l Siz

e (U

S$ M

n)

Deal Volume (>USD50 Mn)

Bubble size indicates total deal value for disclosed deals >$50 Mn)

Source: Capital-IQ; * Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

Green indicates year 2012, Blue 2013, Orange 2014 and Yellow 2015 Data Label: Quarter, Average Deal Size

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32 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global: Deal Volume by Sector

21 16 16 17 29 21 29 27 25 30 13 15 12 8

313 350 339 313 281 291 322 336 322

386

329 318 314 259

42 40 37

38 46 36 38 40 40

43

52 38 32

25

141 148 161

139 123 117

126 131 108

146

122 107 108

69

39 27 33

32 21 28

33 26 27

27

26

16 19

14

13 9 11

14 12 19

10 7 19

19

12

14 11

10

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Internet Software Online Services IT Services Application Software Systems Software Multiple Sectors

Global: Deal Value by Top 2 Sub-Sectors (US$ Bn)

§  Online services dominate the global M&A activity, accounting for over 60% of the transactions in Q1 2015. Number of transactions totaled 314 in Q1 2015 vs. 318 in Q4 2014 and 322 in Q 2014. Application software, the second largest sector in terms of M&A activity, had 108 transactions in Q1 2015, similar to 107 transactions in Q4 2014 and 108 deals in Q1 2014

§  In terms of deal value, online services and application software have consistently remained the top two sectors. Deal value totaled US$6.9 Bn for online services and US$6.0 Bn for application software in Q1 2015

Global M&A Activity by Software Sector

3.1

9.0

2.9 4.1 2.3

10.3 9.9 12.0

29.2

12.8 15.5

6.2 6.9

15.1 8.1

5.6

6.6 5.3

1.8

3.6 3.3

5.4

4.5

11.5

4.0 6.0

6.4

9.9 1.3

1.1 3.8 4.7

2.3

8.1

4.4 2.2

5.4

2.7

4.0

1.4

3.2

0.8

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Online Services Application Software Systems Software Others

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

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33 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

US: Deal Volume by Sector US: Deal Value by Top 2 Sub-Sectors (US$ Bn)

§  Online services represented over 60% of the transactions in Q1 2015 in US. Number of transactions totaled 158 in Q1 2015 vs 160 in Q4 2014 and 187 in Q1 2014. Application software, the second most active sector, had 61 transactions in Q1 2015 compared to 47 transactions in Q4 2014 and 51 deals in Q1 2014

§  Online services and application software are the dominant sectors in software industry. Deal value for transactions with disclosed value totaled US$5.1 Bn for application software and US$3.0 Bn for online services in Q1 2015

US M&A Activity by Software Sub-Sector

12 8 7 9 18 7 16 14 10 11 3 8 7 2

170 165 176 176 147 158 163 166 187 199 204

160 158 136

18 16

17 24 23 14

20 19 12

18 22

17 13

12

62 67 74 73

59 54

55 51 51

70 50

47 61

33

16 16 16 16

12 12

17 15 13

16 12

5 7

6

8 3 7 4

7 11

5 3 8

9

5

6 5

2

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Internet Software Online Services IT Services Application Software Systems Software Multiple Sectors

2.3 1.2 5.2

2.6 1.1

7.6 4.9

7.4

22.5

8.6

14.1

4.5 3.0

9.1 4.4

4.1

5.5 3.2

1.2

3.0 1.9

4.7

3.4

10.5

2.0 5.1

5.4 9.4

0.7

0.4 1.9 3.6

0.9

6.5

3.6 1.5

2.2

1.6

2.3

0.9 0.7

0.6

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2

Internet Software Online Services Application Software Systems Software Others

Source: Capital-IQ; *Till June 8, 2015; Note: Deal value includes transactions with disclosed transaction values only

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34 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global: Deal Volume by Buyer Type Global: Deal Value by Buyer Type (US$ Bn)

§  Strategic buyers accounted for over 95% of the transactions, and 459 in Q1 2015 compared to 468 in Q4 2014 and 497 in Q1 2014

§  Financial buyers led only 22 M&A transactions in Q1 2015’Q1 vs. 23 in Q4 2014 and 29 in Q1 2014

§  Deal value for transactions led by strategic buyers rose to US$14.7 Bn in Q1 2015 from US$8.7 Bn in Q4 2014 but declined compared to US$31.6 Bn in Q1 2014

§  Financial buyers accounted for US$1.3 Bn in Q1 2015 vs. US$2.4 Bn in Q4 2014 and US$8.4 Bn in Q1 2014

Strategic Buyers Dominating Global Software M&A Activity

521 540 534 500

462 474 497 516 497

599

497 468 459

357

28 35 25

34 27 25

33 26 29

34

40 23 22

16

1 1 1 2 1

3

1 1 2

1

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Strategic Buyer Financial Buyer Both

8.8 11.2 11.6 11.7

5.1

17.7

12.1 14.7

31.6

13.7

22.8

8.7

14.7 12.2

3.7 3.5 1.6 2.2

1.2

10.6

5.8 2.3

8.4

6.2

8.2

2.4

1.3 9.9 1.1

0.1

0.4

0.5

0.1

0.2

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Strategic Buyer Financial Buyer Both

Source: Capital-IQ; Note: 261 transactions did not disclose buyer details; Deal value refers to deals with disclosed transaction value

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35 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

US: Deal Volume by Buyer Type US: Deal Value by Buyer Type (US$ Bn)

Strategic Buyers Dominating US Software M&A Activity

273 256 269 281

247 240 251 250 263 296

263 223 236

178

9 15

11 17

12 13 17 12

12

20

28

11 10

8

1 1

3

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Strategic Buyer Financial Buyer Both

5.9 7.9 8.6 7.2

3.1

13.7

7.3 10.7

28.4

8.0

18.7

5.0 8.2 9.7 0.3

1.8 1.1 2.2

0.1

9.8

4.3 0.1

1.1

5.7

8.2

2.3

0.6

5.4 0.1

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Strategic Buyer Financial Buyer Both

Source: Capital-IQ; Note: 85 deals did not disclose buyer details; Deal Volume includes all transactions for which buyer details are disclosed; Deal value refers to deals with disclosed transaction value

§  Strategic buyers also represented over 95% of the transactions, and were involved in 236 transactions in Q1 2015 compared to 223 in Q4 2014 and 263 in Q1 2014

§  Financial buyers led 10 M&A transactions in Q1 2015 vs. 11 in Q4 2014 and 12 in Q1 2014

§  Deal value for transactions led by strategic buyers increased to US$8.2 Bn in Q1 2015 from US$5.0 Bn in Q4 2014 but declined compared to US$31.6 Bn in Q1 2014

§  Deal value for transactions led by financial buyers was US$600 Mn in Q1 2015 vs US$D2.3 Bn in Q4 2014 and US$1.1 Bn in Q1 2014

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36 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global: Deal Volume by Region Global: Deal Value by Region (US$ Bn)

US and Canada Accounts for Nearly Half of Total M&A activity in Software Industry, Followed by Europe

316 309 328 322 292 285 296 291 300 347 317

274 270 203

177 186 184

156 145 153 162 177 170

190

150

145 136

104

55 69 62

57 53 55

71 74 45

74

62

64 64

58

13 12 14 10

13 8 15 16

12

25

12

7 12

9

8 14 9

8

9 11

14 9 14

15

13

18 14

11

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

United States and Canada Europe Asia / Pacific Latin America and Caribbean Africa / Middle East

6.3 11.1 10.2 10.0

3.2

24.8

11.9 11.0

29.4

13.8

27.0

7.4 8.9

15.0 3.2

3.2 2.3 2.4

1.6

2.0

2.8 4.5

8.9

4.7

2.6

2.5 4.6

4.9

2.8

0.9 0.7 0.8

1.4

1.2

3.0 1.8

1.2

1.0

1.3

1.3

2.3

1.6

0.1 0.4

0.1

0.1

0.1

0.2 0.1

0.1 0.1 0.8

0.1

0.1

0.2 0.2

0.4

0.3

0.3

0.4

0.4

0.6

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

United States and Canada Europe Asia / Pacific Latin America and Caribbean Africa / Middle East

§  US and Canada led the M&A activity in software industry, accounting for over 54% of the total global deals in Q1 2015. Number of deals in US stood at 270 in Q1 2015 compared to 274 in Q4 2014 and 300 in Q1 2014

§  Europe is the second most active market, with 136 transactions in Q1 2015

§  In total deal value for the software industry, US and Canada accounted for around 55%, with US$8.9 Bn in Q1 2015 vs US$7.4 Bn in Q4 2014 and US$29.4 Bn in Q1 2014

§  Europe remained the second largest market with transactions worth US$4.6 Bn in Q1 2015

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed transaction values only

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37 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global: Average EV/ Revenue Multiple and TTM Revenue

2.5x

3.2x

2.4x 2.6x

2.3x

3.7x

2.6x

3.3x

2.8x

3.5x

4.0x

3.5x 3.4x

3.0x

45.3 33.1 55.7 53.1

22.3

286.9

57.5 40.5

69.1 47.3

88.1

50.0 41.3

116.2

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

EV/ Revenue Multiple Average TTM Revenue (USD Mn)

US: Average EV / Revenue Multiple and TTM Revenue

3.2x

2.4x

4.1x

3.2x 3.1x

4.3x

3.7x

5.4x

3.9x

4.5x

5.0x

4.5x 4.6x

2.7x

41.1 73.4 115.6 115.4

40.9

258.2

137.8 51.5

126.6 58.5

158.4 74.1

112.1

361.6

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

EV/ Revenue Multiple Average TTM Revenue (USD Mn)

§  Average EV / Revenue multiple was 3.4x in Q1 2015 compared to 3.5x in Q4 2014 and 2.8x in Q1 2014

§  Average revenue of the acquired company decreased to US$41.3 Mn in Q1 2015 from US$50.0 Mn in Q4 2014 and US$69.1 Mn in Q1 2014

§  Average EV / Revenue multiple increased to 4.6x in Q1 2015 from 4.5x in Q4 2014 and 3.9x in Q1 2014

§  Average revenue of an acquired company rose to US$112.1 Mn in Q1 2015 from US$74.1 Mn in Q4 2014, but decreased compared to US$126.6 Mn in Q1 2014

Valuation Trends: Software Revenue Multiples Higher in 2015 vs. 2014 in US and Worldwide

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

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38 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global: Average EV / EBITDA Multiple and TTM EBITDA US: Average EV / EBITDA Multiple and TTM EBITDA

§  Average EV / EBITDA multiple rose to 16.7x in Q1 2015 from 15.9x in Q4 2014 and 11.0x in Q1 2014

§  Average EBITDA of the acquired company was US$16.3 Mn in Q1 2015 vs. US$8.4 Mn in Q4 2014 and US$17.1 Mn in Q1 2014

§  Average EV/ EBITDA multiple increased to 25.5x in Q1 2015 from 17.3x in Q4 2014 and 10.9x in Q1 2014

§  Average EBITDA of the acquired company surged to US$29.5 Mn in Q1 2015 from US$9.5 Mn in Q4 2014 and US$13.3 Mn in Q1 2014

Valuation Trends: Software EBITDA Multiples Higher in 2015 vs. 2014 in US and Worldwide

17.9x

14.4x 13.8x 12.4x 11.7x 11.8x

17.7x

15.1x

11.0x

26.4x

15.7x 15.9x 16.7x

16.0x

8.4 13.2 13.5 22.2 4.1

48.6

10.1 12.0 17.1 16.2 24.9 8.4 16.3

38.3

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

EV/ EBITDA Multiple Average TTM EBITDA (USD Mn)

24.5x

7.3x

19.4x

16.2x

13.5x 13.2x

27.5x

20.9x

10.9x

34.8x

15.3x 17.3x

25.5x

20.6x

4.2 26.2 23.6 39.7 4.7 92.2

15.3 7.1 13.3 12.3 35.3 9.5 29.5 70.4

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

EV/ EBITDA Multiple Average TTM EBITDA (USD Mn)

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

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39 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Cross-Border Software M&A: Nearly one-fourth of global transactions; 3-year high in value in Q2 2015

Global: Cross-Border M&A

§  Cross-border M&A activity remained buoyant in 2014, registering 618 deals compared to 506 deals in 2013. Deal value for disclosed deals totaled US$24.1 Bn in 2014 vs. US$15.3 Bn in 2013

§  Cross-border M&A deal volume stood at 121 in Q1 2015 compared to 155 in Q4 2014 and 143 in Q1 2014. Deal value for disclosed deals totaled US$5.1 Bn in 2015’Q1 vs US$3.5 Bn in Q4 2014 and US$7.6 Bn in Q1 2014

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

4.9 6.1

2.7 4.0

2.2 3.5 3.9

5.7

7.6

4.4

8.7

3.5 5.1

11.7

128

164

152

113 114

125

142

125

143

171

149 155

121 112

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Cross-Border M&A Deal Value (USD Bn) Cross-Border M&A Deal Volume

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40 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

US Cross-Border Software M&A Activity: Generally strong and stable; transaction size surged in Q2 2015

US: Inbound and Outbound Deals

§  US inbound M&A deal volume was 163 in 2014 compared to 125 in 2013. US outbound M&A activity remained robust in 2014, registering 224 deals compared to 188 deals in 2013.

§  US inbound M&A was 28 in Q1 2015 compared to 36 in Q4 2014 and Q1 2014. Deal value for disclosed deals rose to US$2.7 Bn in Q1 2015 from US$0.9 Bn in Q4 2014 and US$1.8 Bn in Q1 2014. Outbound deals totaled 48 in Q1 2015 compared to 59 in Q4 2014 and 49 in Q1 2014. Deal value for disclosed deals totaled US$ 400 Mn in Q1 2015 vs US$1.6 Bn in Q4 2014 and US$2.2 Bn in Q1 2014.

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

0.7 0.9 0.3

1.7

0.2 1.2

1.9 1.4 1.8

0.4

6.1

0.9

2.7

5.5

2.6 3.3

1.5

1.8

0.6

1.4 1.0

2.9 2.2

2.8

1.1

1.6

0.4

4.7 30

37 42

35 36

25

35 29

36 41

50

36 28

30

58 59 62

34 42

46 52

48 49

68

48

59

48 41

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Inbound Deal Value (USD Bn) Outbound Deal Value (USD Bn) Inbound Deal Volume Outbound Deal Volume

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41 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Notable Transactions in Software Industry

2012

2013

2014

2015 YTD

Internet Software Online Services IT Services Application Software Systems Software

(USD2.4 Bn; NA)

(USD125.0 Mn; NA)

(USD324.0 Mn; NA)

(USD155.0 Mn; NA)

(USD205.7 Mn; 2.0x)

(USD200.0 Mn; NA)

(USD62.1 Mn; NA)

(USD28.0 Mn; 2.7x)

(USD1.6 Bn; 3.4x)

(USD1.2 Bn; NA)

(USD2.6 Bn; 8.0x)

(USD2.0 Bn; NA)

(USD19.7 Bn; NA)

(USD3.3 Bn; 14.8x)

(USD4.8 Bn; 1.7x)

(USD4.1 Bn; 7.6x)

(USD0.9 Bn; 1.5x)

(USD0.8 Bn; 5.4x)

(USD4.1 Bn; 2.1x)

(USD0.6 Bn; NA)

(USD1.1 Bn; 2.7x)

(USD1.0 Bn; NA)

(USD1.8 Bn; 1.7x)

(USD0.4 Bn; 5.7x)

(USD2.7 Bn; 2.7x)

(USD2.1 Bn; 3.2x)

(USD1.0 Bn; NA)

(USD1.0 Bn; NA)

(USD4.7 Bn; 3.9x)

(USD2.4 Bn; 2.9x)

(USD5.3 Bn; 4.6x)

(USD2.6 Bn; 6.4x)

Open Solutions LLC

(USD1.0 Bn; 5.0x)

(USD171.5 Mn; 4.5x)

(USD8.4 Bn; 3.1x)

(USD2.4 Bn; 8.9x)

(USD0.8 Bn; 8.1x)

(USD0.4 Bn; NA)

(USD0.5 Bn; NA)

(USD0.2 Bn; NA)

and others

Source: Capital-IQ; Text in brackets (Deal Value, EV / Revenue Multiple)

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42 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Most Active Acquirers in Software Industry Since 2012: Yahoo, Google and Twitter

Most Active Buyers by Number of Deals (Since 2012)

30

27

22 20 20 20

18 16 16 16 15

Yahoo Google Twitter IBM Oracle Trimble Cisco Dropbox Facebook Vista Equity Partners*

Microsoft

Source: Capital-IQ; * Financial Buyer

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43 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

CONTENTS

Technology Trends 9

Software Industry M&A Overview 27

Stock Market Performance 61

Executive Summary 5

Hardware Industry M&A Overview 44

Page 44: Global Technology M&A Trends and Analysis – 1H 2015€¦ · § Global wearable technology shipments, including fitness devices, is expected to reach 126.1 Mn in 2019 from 19.6 Mn

44 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global Hardware M&A Activity: Strong growth in 2015; Deal value highest in three years

Global & US: Deal Volume and Value

15.2 8.5 9.3 5.4 4.3

11.1 8.2 7.3 4.4 8.1 5.3 9.8 10.6

40.0 3.9

4.9 3.0 10.3

31.2 3.8 11.0 10.3

7.7

16.2 9.4

10.9

34.7

59.4

295 262 276 261 228 229 217

245 281 270 255 267 288

209

97 95 93 90 91 85 83 77

119 92 94 90 106

71

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Deal Value (USD Bn) - Global (Ex. US) Deal Value (USD Bn) - US Deal Volume - Global Deal Volume - US

§  The global deal volume increased 7.9% QoQ and 2.5% YoY to 288 in Q1 2015, while the aggregate deal value grew to US$45.3 Bn in Q1 2015 compared to US$20.7 Bn in Q4 2014 and US$12.1 Bn in Q1 2014. This was led by the acquisition of Freescale Semiconductors (US$17.3 Bn) by NXP Semiconductors

§  Deal volume in the US rose 17.8% QoQ, but declined 10.9% YoY to 106 in Q1 2015. Aggregate deal value surged 218.5% QoQ and 350.3% YoY to US$34.7 Bn in Q1 2015. Deal value in the US for the first two months Q2 2015 stood higher than that for all of Q1 2015 at US$59.4 Bn, as a result of two mega deals: Broadcom (US$36.7 Bn) by Avago Technologies and Altera (US$18.2 Bn) by Intel

Source: Capital-IQ; *Through June 8, 2015; Note: Deals that are announced, closed or effective; Deal value includes transactions with disclosed values only;

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45 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global: Deal Volume by Ticket Size

83 82 97

83 68

78 75 87 81

72 67 64 69

51

22 36

25

28

21

20 21

22 30

27 25 29

26

24

7

6 3

8

4

6 5

5 5

12

7 7 12

11

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Deals (<USD50 Mn) Deals (USD50-500 Mn) Deals (>USD500 Mn)

Global: Deal Value by Ticket Size (US$ Bn)

§  Deals below US$50 Mn dominated the M&A deal volume, with 69 transactions valued at US$900 Mn in Q1 2015. The average deal value stood at US$13.5 Mn in Q1 2015, vs. US$13.1 Mn in Q4 2014 and US$12.0 Mn in Q1 2014

§  The mid-market witnessed 26 transactions at USD4.3 Bn in 2015’Q1. The average deal value was USD166.4 Mn in 2015’Q1, compared with USD179.1 Mn in 2014’Q4 and USD144.4 Mn in 2014’Q1

§  The deal value for large deals (>US$500 Mn) totaled US$40.0 Bn from 12 transactions, with an average deal value of US$3.3 Bn in Q1 2015

Global M&A Hardware Trends: Large increase in transaction size in 2015 contrasts with overall decline in volume since 2012

1.0 0.9 1.2 1.2 0.7 0.8 0.7 0.8 1.0 0.9 0.7 0.8 0.9 0.7 3.7

6.0 4.3 3.6 2.7 4.0 4.3 4.1 4.3 6.9

3.8 5.2 4.3 3.3

14.4 6.5

6.8 10.9

32.0

10.1 14.1 12.7

33.9

16.5

10.3

14.7

40.0 95.4

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Deals (<USD50 Mn) Deals (USD50-500 Mn) Deals (>USD500 Mn)

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

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46 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global Hardware M&A Trends: Mid-market deal volume and value generally flat since 2012

Global & US: Mid Market Deal (US$50-500 Mn) Volume and Value

§  The global mid-market deal volume declined to 26 in Q1 2015, compared with 29 in Q4 2014. The deal value declined 16.7% QoQ and 0.1% YoY to US$4.3 Bn in Q1 2015. The major deals in Q1 2015 were the acquisition of Annapurna Labs (US$400.0 Mn) by Amazon and Vitesse Semiconductor (US$399.0 Mn) by Microsemi

§  US mid-market deals stood at five in Q1 2015 vs nine in Q4 2014 and 13 in Q1 2014. The deal value totaled US$1.1 Bn, decreasing 41.4% QoQ and 33.7% YoY

1.7

3.8

2.5 2.2 1.9 2.1 2.2 1.8 2.7

3.1

2.0

3.3 3.2 2.4

2.0

2.2

1.8

1.4

0.8

1.9 2.2

2.3

1.7

3.8

1.8

1.9

1.1

0.9

22

36

25 28 21 20 21 22

30 27 25

29 26 24

12 14 8 10

6 9 9 10 13 15 10 9

5 7

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Deal Value (USD Bn) - Global (Ex. US) Deal Value (USD Bn) - US Deal Volume - Global Deal Volume - US

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

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47 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

US: Deal Volume by Ticket Size US: Deal Value by Ticket Size (US$ Bn)

§  The number of deals below US$50 Mn was 21, and had a total value of US$400 Mn in Q1 2015. The average deal value rose to US$19.9 Mn in Q1 2015, from US$18.1 Mn in Q4 2014 and US$12.6 Mn in Q1 2014

§  The mid-market had five transactions totaling US$1.1 Bn in Q1 2015. The average deal value rose to US$221.1 Mn vs. US$209.5 Mn in Q4 2014 and US$128.2 Mn in Q4 2014

§  The deal value for large deals (>USD500 Mn) totaled US$33.2 Bn from nine transactions, with an average deal value of US$3.7 Bn in Q1 2015

US Hardware M&A Trends: Large increase in transaction size in 2015 contrasts with overall decline in volume since 2012

0.3 0.3 0.4 0.5 0.2 0.3 0.3 0.2 0.5 0.3 0.1 0.3 0.4 0.2 2.0 2.2 1.8 1.4 0.8

1.9 2.2 2.3 1.7 3.8 1.8 1.9 1.1 0.9 1.6 2.4

0.9

8.4

30.2

1.6

8.5 7.7 5.6

12.1

7.6 8.7

33.2

58.3

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Deals (<USD50 Mn) Deals ($50-USD500 Mn) Deals (>USD500 Mn)

22 25 27 25 23 24 24

21

36

18 13

19 21

12

12

14 8 10

6 9 9

10

13

15

10

9 5

7

2

3

1 6

2

2 3 2

3

7

5

3 9

5

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Deals (<USD50 Mn) Deals (USD50-500 Mn) Deals (>USD500 Mn)

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

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48 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global Hardware M&A Activity by Quarter

Global: Average Deal Size

Bubble size indicates deal value (for disclosed deals >$50 Mn)

Source: Capital-IQ; * Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

Green indicates year 2012, Blue 2013, Orange 2014 and Yellow 2015 Data Label: Quarter, Average Deal Size

12'Q1, $170.4 Mn

12'Q2, $107.9 Mn

12'Q3, $98.3 Mn

12'Q4, $131.5 Mn

13'Q1, $381.7 Mn

13'Q2, $143.4 Mn

13'Q3, $189.6 Mn 13'Q4, $154.3 Mn

14'Q1, $104.1 Mn 14'Q2, $218.5 Mn

14'Q3, $149.1 Mn

14'Q4, $207.3 Mn

15'Q1, $423.4 Mn

15'Q2*, $1,155.2 Mn

-$200Mn

$0Mn

$200Mn

$400Mn

$600Mn

$800Mn

$1000Mn

$1200Mn

$1400Mn

23 28 33 38 43

Aver

age

Dea

l Siz

e (U

S$ M

n)

Deal Volume (>USD50 Mn)

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49 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global: Deal Volume by Sub-Sector

61 35

54 38 47 32 36

52 42 37 43 45 49 39

126

134 113

116 99

88 90

100 144

106 111 118 120

92

13 18 14

16 16

19 15

13

17

31 15 13

17

9

40 33

29 44 21

39 35

36

31

43 38 42

42

31

55

42 66 47

45 51 41

44

47 53

48 49

60

38

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2* Technology Distributors Semiconductors & Semiconductor Equipment Technology Hardware, Storage & Peripherals Electronic Equipment, Instruments & Components Communications Equipment

Global: Deal Value by Top 2 Sub-Sectors (US$ Bn)

§  Electronic equipment, instruments and components dominated global M&A activity, accounting for over 40% transactions in Q1 2015. The number of transactions totaled 120 in Q1 2015, vs. 118 in Q4 2014 and 144 in Q1 2014. Technology distributors, the second largest sub-sector in terms of M&A activity, had 60 transactions in Q1 2015, compared with 49 in Q4 2014 and 47 in Q1 2014

§  Communications equipment and semiconductors and semiconductor equipment were the top two sectors based on deal value.

Global Hardware M&A Activity by Sub-Sector

13.6

6.9 2.8

6.2 4.7 6.2

14.4 28.8

3.2

8.1 8.4

8.4

4.3 7.1

4.1

29.2

1.6

7.6

3.8 2.7 8.5

4.1

6.0 6.9

8.2

23.2

61.8

2.2

2.3

3.7 2.6 4.9

3.5

3.8

4.6 4.8

3.3

11.1

3.8

6.3

7.7

8.7

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2* Rest Technology Distributors Semiconductors & Semiconductor Equipment Technology Hardware, Storage & Peripherals Electronic Equipment, Instruments & Components Communications Equipment

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

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50 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

US: Deal Volume by Sector US: Deal Value by Top 2 Sub-Sectors (US$ Bn)

§  Electronic equipment, instruments and components represented more than 41% of the transactions in Q1 2015 in US. Number of transactions totaled 44 in Q1 2015 vs 35 in Q4 2014 and 64 in Q1 2014. Communications equipment, the second most active sub-sector, had 24 transactions in Q1 2015 compared to 16 transactions in Q4 2014 and 21 deals in Q1 2014

§  Semiconductors and Semiconductor Equipment was the largest sub-sector in terms of deal value in Q1 2015 with value totaling US$19.3 Bn

Global Hardware M&A Activity by Sub-Sector

23 16 21

13 22

15 12 25 21

9 19 16

24 17

40 52 35 45

42

34 33

35

64

42

41 35

44

28

4 6

8 3 5

11 5

4

4

12 7

9

8

2

16 13

11 15 6

15

17

6

15

14 16

15

14

12

14 8 18 14 16 10

16 7

15

15 11

15

16

12

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2* Technology Distributors Semiconductors & Semiconductor Equipment Technology Hardware, Storage & Peripherals Electronic Equipment, Instruments & Components Communications Equipment

2.4 4.1

2.2 2.6 3.3 4.7

14.2

2.9 2.1

7.4 6.0

3.2

3.4

0.4

28.2

1.1

1.4 4.8

0.8 1.4

0.9

3.1 7.1 3.2

5.9

19.3

58.6

0.7 0.6

0.9

3.1

0.7

0.7

2.1 0.5

1.2

5.3

0.4 2.8

1.2

0.4

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2* Others Technology Distributors Semiconductors & Semiconductor Equipment Technology Hardware, Storage & Peripherals Electronic Equipment, Instruments & Components Communications Equipment

Source: Capital-IQ; *Till June 8, 2015; Note: Deal value includes transactions with disclosed transaction values only

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51 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global: Deal Volume by Buyer Type Global: Deal Value by Buyer Type (US$ Bn)

§  Strategic buyers account for over 90% of the M&A deals: 248 in Q1 2015 compared with 228 in Q4 2014 and 243 in Q1 2014

§  Financial buyers led 23 M&A transactions in Q1 2015, vs 16 in Q4 2014 and 14 in Q1 2014

§  The deal value for transactions by strategic buyers rose to US$33.0 Bn in Q1 2015, from US$15.4 Bn in Q4 2014 and US$10.8 Bn in Q1 2014

§  Financial buyers accounted for US$11.6 Bn in Q1 2015, representing a significant increase from US$5.0 Bn in Q4 2014 and US$0.3 Bn in Q1 2014

Strategic Buyers Dominating Global Hardware M&A Activity

265

221 246

220 201 199 190

221 243 236 228 228

248

178

14

21

16

22

13 17 11

11

14 11

12 16

23

20

1

1

4 3 2

1

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Strategic Buyer Financial Buyer Both

18.4

12.2 11.5 14.9

7.2 8.5

18.6 16.0

10.8

23.1

12.9 15.4

33.0

94.2

0.7

1.2 0.8

0.5

28.1

6.2

0.5 1.6

0.3

1.8

5.0

11.6

4.0

0.7

0.9 0.1

0.7

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Strategic Buyer Financial Buyer Both

Source: Capital-IQ; Note: 226 transactions did not disclose buyer details; Deal value refers to deals with disclosed transaction value

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52 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

US: Deal Volume by Buyer Type US: Deal Value by Buyer Type (US$ Bn)

Strategic Buyers Dominating US Hardware M&A Activity

89 84 83 79 84 79 74 69

113

83 86 82 93

59

7 9 6 9

7 4

5 4

3

5 6

5

9

10

1 1

1

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Strategic Buyer Financial Buyer Both

3.4 4.4 2.3

9.9

3.0 3.6

10.6 8.8 7.7

15.3

7.7 7.0

25.8

57.2

0.6 0.6

0.7

0.4 28.1

0.3

0.4

1.5 0.04 1.7 3.9

8.2

2.2

0.9

0.7

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Strategic Buyer Financial Buyer Both

Source: Capital-IQ; Note: 34 deals did not disclose buyer details; Deal Volume includes all transactions for which buyer details are disclosed; Deal value refers to deals with disclosed transaction value

§  Strategic buyers accounted for over 90% of M&A transactions in the US: 93 transactions in Q1 2015, compared with 82 in Q4 2014 and 113 in Q1 2014

§  Financial buyers led nine M&A transactions in Q1 2015, vs five in Q4 2014 and three in Q1 2014

§  The deal value for transactions led by strategic buyers increased to US$25.8 Bn in Q1 2015, from US$7.0 Bn in Q4 2014 and US$7.7 Bn in Q1 2014

§  The deal value for transactions led by financial buyers was US$8.2 Bn in Q1 2015, vs US$3.9 Bn in Q4 2014 and US$41.0 Mn in Q1 2014

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53 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global: Deal Volume by Region Global: Deal Value by Region (US$ Bn)

Hardware Deal Activity by Region

115 106 104 98 102 91 88 91 126

103 100 102 120

75

112 103 98 94 77

80 73 84

86 96

70 80

93

73

53 44 60

53 42 47

50 57

56 59

71 73

61

57

4

5 2 7

5 4 2

5

5 10 9

6 8

4

11

4 12 9

2 7 4

8

8 2 5

6

6

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

United States and Canada Europe Asia / Pacific Latin America and Caribbean Africa / Middle East

4.9 5.5 3.1

10.4 31.3

4.2

11.0 10.8 7.7

16.8

9.4 11.1 35.0

59.4

2.1 4.6

1.9

0.8 0.4

8.2

6.5

0.9

1.7

1.6

0.6

3.6 7.6

28.1

11.9 1.3

7.1

3.6 3.4

2.4

1.6

5.0

2.6

5.3

2.5

4.7 2.2

11.7

0.01

0.9 0.2

0.5 0.3

0.02

0.1 0.8

0.1

0.6

0.3

0.02 0.1

0.1

0.1

1.1 0.1

0.3 0.01

0.01

0.005 0.1

0.02

0.001

2.0

1.3 0.4

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

United States and Canada Europe Asia / Pacific Latin America and Caribbean Africa / Middle East

§  The US and Canada led M&A activity in the hardware industry, accounting for ~41% of deals in Q1 2015. The number of deals in the region was 120 in Q1 2015, compared with 102 in Q4 2014 and 126 in Q1 2014

§  Europe was the second most active market, with 93 transactions in Q1 2015

§  The US and Canada accounted for over 49% of the deal value in the hardware industry, which totaled US$35.0 Bn in Q1 2015, vs US$11.1 Bn in Q4 2014 and US$7.7 Bn in Q1 2014

§  Europe, with transactions worth US$7.6 Bn, remained the second largest market in Q1 2015

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed transaction values only

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54 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global: Average EV/ Revenue Multiple and TTM Revenue

1.5x

1.3x 1.3x

1.6x 1.4x

1.5x 1.5x

2.1x

2.7x

1.8x

2.2x 2.2x

1.8x 2.0x

53.2 186.0 261.3 171.0

1,117.3

286.9

606.0

174.5 67.7 102.8 100.0 163.2 235.3

568.6

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

EV/ Revenue Multiple Average TTM Revenue (USD Mn)

US: Average EV/ Revenue Multiple and TTM Revenue

1.8x 1.6x

2.7x

2.1x

1.4x

1.6x 1.5x

2.9x 3.1x

2.0x 2.1x

3.0x

1.9x 2.0x

69.9 95.5 360.0 305.9

4,388.6

146.7 389.1 223.3 91.9 155.0 280.4 178.6 463.8 929.2

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

EV/ Revenue Multiple Average TTM Revenue (USD Mn)

§  The average EV/Revenue multiple was 1.8x in Q1 2015, compared with 2.2x in Q4 2014 and 2.7x in Q1 2014

§  The target company’s average revenue rose to US$235.3 Mn in Q1 2015, from US$163.2 Mn in Q4 2014 and US$67.7 Mn in Q1 2014

§  The average EV/Revenue multiple decreased to 1.9x in Q1 2015, from 3.0x in Q4 2014 and 3.1x in Q1 2014

§  The acquired company’s average revenue surged to US$463.8 Mn in Q1 2015, from US$178.6 Mn in Q4 2014 and US$91.9 Mn in Q1 2014

Global and US Hardware M&A Revenue Multiples

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

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55 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global: Average EV/ EBITDA Multiple and TTM EBITDA US: Average EV/ EBITDA Multiple and TTM EBITDA

§  The average EV/EBITDA multiple rose to 15.5x in Q1 2015 from 12.9x in Q4 2014 and 12.4x in Q1 2014

§  The acquired company’s average EBITDA rose to US$94.1 Mn in Q1 2015, vs US$38.4 Mn in Q4 2014 and US$13.5 Mn in Q1 2014

§  The average EV/EBITDA multiple decreased to 16.4x in Q1 2015, from 17.8x in Q4 2014 and 16.9x in Q1 2014

§  The acquired company’s average EBITDA surged to US$143.1 Mn in Q1 2015, from US$31.0 Mn in Q4 2014 and US$20.6 Mn in Q1 2014

Global and US Hardware M&A EBITDA Multiples

16.7x

12.2x

9.9x 11.1x

7.9x 8.7x

10.3x

11.9x 12.4x 13.8x

9.9x

12.9x

15.5x

17.4x

6.8 72.4 54.2 8.9

342.0

21.8 49.6 128.5

13.5 34.4 44.0 38.4 94.1 193.1

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

EV/ EBITDA Multiple Average TTM EBITDA (USD Mn)

17.8x

13.4x 12.5x

25.4x

5.5x

9.1x 12.1x

20.4x

16.9x

14.5x

9.3x

17.8x 16.4x

18.4x

(1.5) 11.7 17.6 22.5

947.7

8.8 113.2 39.0 20.6 51.2 65.9 31.0 143.1 275.2

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

EV/ EBITDA Multiple Average TTM EBITDA (USD Mn)

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

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56 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Cross-Border M&A: Represents over one-fourth of global transactions; Deal value surges in 2015

Global: Cross-Border M&A Deals

§  Cross-border M&A activity remained buoyant in 2014, registering 342 deals over 251 deals in 2013. The deal value for disclosed deals totaled US$31.1 Bn in 2014, vs US$20.2 Bn in 2013

§  The total number of cross-border M&A deals was 97 in Q1 2015, compared with 85 in Q4 2014 and 74 in Q1 2014. The deal value for disclosed deals surged to US$27.2 Bn in Q1 2015, vs US$11.4 Bn in Q4 2014 and US$2.6 Bn in Q1 2014

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

3.2 7.9 6.2 5.5 1.0 7.3 6.5 5.4 2.6 9.1 7.9 11.4

27.2

73.6

106

85

97

79

61 58 59

73 74

94 89 85

97

74

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Cross-Border M&A Deal Value (USD Bn) Cross-Border M&A Deal Volume

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57 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

US Cross-Border Hardware M&A Activity: Number of deals flat for past three years; Deal value achieved record high in 2015

US: Inbound and Outbound Deals

§  Inbound M&A deal volume in the US grew significantly to 76 in 2014, compared to 46 in 2013. US outbound M&A activity remained robust in 2014, recording 82 deals vs. 68 deals in 2013

§  US inbound M&A activity was 19 in 2015’Q1, and similar to Q4 2014 (20). The deal value for disclosed deals rose to US$18.9 Bn in Q1 2015, from US$4.2 Bn in Q4 2014 and US$100 Mn in Q1 2014. Outbound deals totaled 31 in Q1 2015, compared to 16 in Q4 2014 and 14 in Q1 2014. The deal value for disclosed deals totaled US$3.6 Bn in Q1 2015, vs US$1.2 Bn in Q4 2014 and US$1.0 Bn in Q1 2014

Source: Capital-IQ; *Through June 8, 2015; Note: Deal value includes transactions with disclosed values only

0.3 1.2 0.2 3.9 0.2 1.3 0.5 0.4 0.1 6.0 7.0

4.2

18.9

38.7

0.4 2.6 4.4

0.7

0.4 0.1 0.4 0.9 1.0

2.0 0.5

1.2

3.6

2.6

11 15 18 17 12 14 14 6

17 20 20 19 19 16

34 26

37

22 18 11

19 20 14

23 29

16

31

18

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*

Inbound Deal Value (USD Bn) Outbound Deal Value (USD Bn) Inbound Deal Volume Outbound Deal Volume

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58 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Notable Transactions in Hardware Industry

2012

2013

2014

2015 YTD

Communications Equipment

Electronic Equipment and Instruments and

Components

Technology Hardware, Storage and Peripherals

Semiconductors and Semiconductor

Equipment Technology Distributors

(USD10.0 Bn; NA)

(USD2.5 Bn; 0.7x)

(USD5.0 Bn; 0.3x)

(USD2.0 Bn; 6.1x)

(USD3.9 Bn; 3.2x)

(USD2.8 Bn; NA)

(USD23.1 Bn; 1.2x)

(USD5.1 Bn; NA)

(USD2.9 Bn; 1.5x)

(USD1.0 Bn; 2.0x)

(USD7.2 Bn; 1.8x)

(USD4.0 Bn; NA)

(USD2.6 Bn; 3.1x)

(USD1.7 Bn; 3.9x)

(USD6.5 Bn; 6.0x)

(USD2.4 Bn; 4.1x)

(USD804.0 Mn; NA)

(USD710.7 Mn; 0.8x)

(USD28.1 Bn; 0.4x)

(USD685 Mn; NA)

(USD3.4 Bn; NA)

(USD1.3 Bn; 2.7x)

(USD336.6 Mn; NA)

(USD215.0 Mn; 3.6x)

(USD3.7 Bn; 0.6x)

(USD2.7 Bn; 4.2x)

(USD6.6 Bn; 2.5x)

(USD1.7 Bn; 1.7x)

(USD3.0 Bn; 2.2x)

(USD2.4 Bn; 7.1x)

(USD36.7 Bn; 4.0x)

(USD18.2 Bn; 8.3x)

(USD857.0 Mn; 0.2x)

(USD525.8 Mn; NA)

(USD1.4 Bn; 12.4x)

(USD401.5 Mn; 0.3x)

(USD506.1 Mn; NA)

(USD439.4 Mn; 0.2x)

(USD182.8 Mn; NA)

(USD137.7 Mn; 0.2x)

Source: Capital-IQ; Text in brackets (Deal Value, EV / Revenue Multiple)

Memory Japan Technology

Focus Multimedia Technology (Shanghai)

Join-In (Holding)

PSI Systems

Electric Power Control System & others

SAMT

Giovanna Investment Hong Kong Limited

and Others

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59 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Most Active Hardware Acquirers: Intel, Ametek and Arrow Electronics

Most Active Buyers by Number of Deals (Since 2012)

12

10

7 7 7 6 6 6

5 5 5

Intel Ametek Arrow Electronics Microchip Technology

ABB Exclusive Networks SAS

SBA Communications

Lagercrantz Cansel Survey Equipment

Google IHS Nigeria

Source: Capital-IQ; Note: M.Tech Holdings has not been included as it acquired nine of its related entities

CAD Worx Warehouse

NDS West Micro System

Telecom tower assets

Nigeria and Cameroon, Rwanda,

Zambia and Cote d'Ivoire

Telecom tower assets

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60 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

CONTENTS

Technology Trends 9

Software Industry M&A Overview 27

Stock Market Performance 61

Executive Summary 5

Hardware Industry M&A Overview 44

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61 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Technology Stock Performance: Technology indices have outperformed broader market indices, led by US; Volatility has trended down

Global Technology Market Performance

0

50

100

150

200

250

300

350

Jan-09 May-09 Oct-09 Feb-10 Jul-10 Nov-10 Apr-11 Aug-11 Jan-12 May-12 Oct-12 Feb-13 Jul-13 Nov-13 Apr-14 Aug-14 Jan-15 May-15

1-Month 3-Month 6-Month 1 Year 3 Year 5 Year

S&P Global Technology Index (0.6%) 0.4% 3.0% 13.5% 61.9% 89.8%

S&P Global Index (1.8%) 0.1% 1.3% 2.2% 51.2% 64.5%

S&P US Technology Index 0.3% 0.9% 3.6% 18.2% 72.7% 120.5%

S&P US Index (1.0%) (0.3%) 1.0% 8.6% 63.7% 96.5%

Source: Bloomberg

S&P US 500 Information Technology Index S&P Global 1200 Information Technology Index S&P 500 Index

S&P Global 1200 Index

0

10

20

30

40

50

60

Jan-09 May-09 Oct-09 Feb-10 Jul-10 Nov-10 Apr-11 Aug-11 Jan-12 May-12 Oct-12 Feb-13 Jul-13 Nov-13 Apr-14 Aug-14 Jan-15 May-15

Volatility: CBOE Volatility Index

Volatility falls below historical average

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62 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

Global: EV / Revenue Multiple

Global: EV / EBITDA Multiple

Global: Revenue (US$ per share)

Global: EBITDA (US$ per share)

Global Technology Stock Valuations: Technology stocks trade at an EV / Revenue multiple premium compared to overall market, while EV / EBITDA multiples are at a discount

1.6x 1.5x 1.4x 1.5x

2.0x

2.3x 2.3x 2.2x

1.6x 1.6x 1.4x 1.5x

1.7x 1.7x 1.9x 1.8x

2009 2010 2011 2012 2013 2014 2015E 2016E

S&P Global 1200 Information Technology Index S&P Global 1200 Index

839 976 1,039 1,086

998 992 1,015 1,067 1,195 1,247

1,341 1,392 1,390 1,378 1,311 1,383

2009 2010 2011 2012 2013 2014 2015E 2016E S&P Global 1200 Information Technology Index S&P Global 1200 Index

10.8x

8.1x 7.1x

8.0x 9.2x 9.6x

8.9x 8.3x

7.4x

9.4x 8.8x

7.8x 8.6x

9.8x 10.0x 9.5x

2009 2010 2011 2012 2013 2014 2015E 2016E

S&P Global 1200 Information Technology Index S&P Global 1200 Index

125

183 198 196

213 234

263 284

200 228 239 237 242 239 239

261

2009 2010 2011 2012 2013 2014 2015E 2016E

S&P Global 1200 Information Technology Index S&P Global 1200 Index

Source: Bloomberg

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63 Global Technology M&A Trends and Analysis l Woodside Capital Partners l July 2015

US: EV / Revenue Multiple

US: EV / EBITDA Multiple

US: Revenue (US$ per share)

US: EBITDA (US$ per share)

US Technology Stock Valuations: US technology stocks trade at a higher EV / Revenue multiple premium compared to overall market, and a similar EV / EBITDA multiple discount

2.4x 2.2x

1.9x 2.0x

2.7x 3.0x 3.0x

2.9x

1.7x 1.8x 1.6x 1.7x

2.0x 2.1x 2.2x 2.1x

2009 2010 2011 2012 2013 2014 2015E 2016E

S&P US 500 Information Technology Index S&P 500 Index

140 163 190 204 196 210 217 228

903 939 1,019 1,064 1,099 1,144 1,129

1,200

2009 2010 2011 2012 2013 2014 2015E 2016E S&P US 500 Information Technology Index S&P 500 Index

10.9x

8.7x 7.4x 7.6x

9.9x 10.7x

9.5x 8.8x

10.1x 9.7x 8.4x 9.0x

10.7x 11.6x 10.9x

10.0x

2009 2010 2011 2012 2013 2014 2015E 2016E

S&P US 500 Information Technology Index S&P 500 Index

31 42 49 53 53 59 68 74

150 173

194 200 208 212 230

251

2009 2010 2011 2012 2013 2014 2015E 2016E S&P US 500 Information Technology Index S&P 500 Index

Source: Bloomberg

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