J u l y 2020 - GCA Altium

U P D AT E O N : I M PA C T O F C O V I D - 1 9 O N V A L U AT I O N L E V E L S I N T H E G L O B A L T E C H N O L O G Y, S O F T W A R E A N D I T S E R V I C E S S E C T O RJ u l y 2 0 2 0

2

AGENDA

Executive summary2 11

Update on GCA Altium1 2

Details on the current valuation environment3 14

Get in contact4 25

AppendixA 28

3

SAN FRANCISCO

NEW YORK

MANCHESTER LEEDS

BIRMINGHAMLONDON

STOCKHOLM

PARIS

MILANLAUSANNE MUNICH

TEL AVIV

FRANKFURTZURICH

MUMBAI

NEW DELHI

HO CHI MINH CITY

SINGAPORE

TAIPEI

SHANGHAIFUKUOKA

OSAKAKYOTO

TOKYONAGOYA

A LEADING INDEPENDENT GLOBAL INVESTMENT BANK

Managing Directors

80+employees

500+bankers

400+locations

25countries

14

4

GCA Altium offers clients a broad range of services on matters related to M&A, including advising on debt, financial restructuring and equity

capital markets

TARGETED, INDEPENDENT & UNBIASED CORPORATE FINANCE ADVICE

MERGERS & ACQUISITIONS DEBT ADVISORY EQUITY CAPITAL MARKETS

All of our senior professionals have a breadth of M&A experience, and we leverage our extensive industry

sector and transaction experience to provide our clients with balanced and insightful judgment.

Our team delivers a comprehensive range of advisory services for public and private companies, including buyside, sellside, public takeovers and going-private

transactions, as well as hostile, defence, strategic alliances, recapitalisations and restructurings. In addition, we have a deep understanding of the

complexities involved in successfully completing cross-border transactions.

Our debt advisory team offers acquisition, growth, and asset based financings as well as refinancings and recapitalisations. Our capital sources include not only traditional commercial banks, but also non-traditional sources such as credit funds, hedge funds and private

sources of debt capital.

Our financial restructuring services include capital raising and rescue / bridge financing, covenant resets, distressed mergers & acquisitions, and assessment of

strategic alternatives including complete restructurings of the balance sheet with write-downs

and debt-to-equity swaps.

Our experience as corporate financiers and equity capital market advisers enables us to lead capital

raisings for quoted and non-quoted clients.Raising capital is a core skill for a corporate finance

adviser. We get involved with everything from private placements (including pre-IPO financing), to IPOs and

all forms of secondary issue.

Our sources of capital range from traditional venture and crossover firms to more non-traditional sources

like hedge funds, sovereign wealth funds, public mutual funds and family offices.

5

We strive to provide balanced and insightful advisory services to a broad client base across all key industry sectors

FOCUSING ON GROWTH SECTORS

TECHNOLOGY

The team’s experience includes semiconductors and electronics, software, SaaS, and tech-enabled

services

CONSUMER, RETAIL, E-COMMERCE & LEISURE

We advise clients on e-commerce, specialty retail, apparel, action sports

and consumer tech, as well as the hospitality sector and online travel

DIGITAL MEDIA & MEDIA

Our bankers work with industry leaders across ad-tech, digital content, filmed entertainment, gaming and mobile, as

well as major broadcasters

FINANCIAL TECHNOLOGY & SERVICES

As payments and banking become a virtual reality for many, our bankers are

working with sector leaders and innovators across the Fintech space

INDUSTRIALS & INDUSTRIAL TECHNOLOGY

We advise across a wide range of industrial sub-sectors, including

aerospace & defence, energy, and transportation amongst many more

BUSINESS SERVICES

We have solid experience in BPO, facility management, governmental

services, customer experience as well as human capital management

HEALTHCARE

We work with clients in biopharmaceuticals, diagnostics &

research tools, medical devices, healthcare IT, and care services.

6

We have a deep understanding of the complexities involved in successfully completing cross-border transactions

WE ARE SPECIALISTS IN CROSS-BORDER TRANSACTIONS

CROSS-BORDER

~50%DOMESTIC

~50%

7

GCA Altium successfully advised on 41 transactions at the height of the COVID-19 crisis including numerous technology transactions

WE GET THINGS DONE

Fully digital deal-making gives GCA Altium’s M&A process a competitive edge• Preparation: Our global setup and personal relationships to the relevant buyer universe enable us to identify buyers worldwide. Building on previous process

experience, we have been able to increase transaction speed and security through proper preparation• Preparing the management: Presentation coaches and GCA Altium-guided rehearsals succeeded in creating impactful presentations despite social distancing.

Remote work requires formally structured communication processes and tight project management• Educating buyers: Having pre-selected highly involved buyers earlier enabled us to provide hands-on support, leading to transaction security and best results

for our clients

March April May June

…more to come

8

A winner of multiple awards and consistent top 10 rankings on Mergermarket

OUR EXCELLENCE IN DEAL MAKING IS CONSISTENTLY RECOGNISED IN THE MARKET

• Boutique M&A Financial Adviser of the Year for the second consecutive year

• M&A Innovation of the Year

June 2019

• Rainmaker of the Year

• Corporate Finance Team of the Year

• PE Equity Exit Deal of the Year

• Private Company Deal of the YearJune 2019

• Corporate Finance Team of the Year

October 2019

• Corporate Finance Advisory Team of the Year (North West)

• Exit of the Year (Yorkshire)October 2019

GCA ranked by deal count:

• No.8 in Japan

• No.8 in Germany

• No.9 in Germany, Austria & Switzerland

• No.9 in Europe (buyouts & exits)

9

Selected recent software and technology transactions

UNIQUE TRACK-RECORD IN SOFTWARE TRANSACTIONS

Note: Flag to the left: target; Flag to the right: acquirer

Cloud-based communication

DMS and CRM software

PIM softwareRecruitment

softwareCloud-based

ERPCorporation tax software

Digital workplaces

Contact centresoftware

Mid-office travel software

Data-driven intelligence

Cloud-based utility ERP

Workflow solutions

Cloud-based ERP

Fuel pricing software

Cloud-based accounting

HR software

Insurance software

Cloud-based data storage

Marketing software

Cloud native loyalty software

Cloud based CRM platform

Data transformation

Field services ERP

Backup software

ERP softwareTerminal mgt.

systemsCloud-based project mgt.

Market research software

Visual data research software

Treasury mgt. software

Cyber security software

Aviation software

10

Selected Semiconductor and IT services transactions

DEEP EXPERTISE IN ADVISING SEMICONDUCTOR AND IT SERVICES COMPANI ES

Note: Flag to the left: target; Flag to the right: acquirer

Component refurbishment

Component refurbishment

LiDAR sensor technology

3D semicon-ductor solutions

Nanofabrication equipment

Sensor technology

Micro & opto-electronic systems

Semiconductor test business

Connectivity solutions

PTC equipment

Semiconductor test sockets

Digital power IC solutions

Power and energy solutions

Semiconductor encapsulating

Electrical inter-connect systems

Outsourced software testing

IT infrastructure outsourcing

IT outsourcingservices

Software dev. services

Digital advertising services

IT services for the education industry

Outsourced digitalcommunication

IT consulting services

IT and digital operations support

IT managementconsulting

Digital visualization services

ICT equipment and related services

IT lifecycle and system support

Enterprise softwaresolutions provider

Microsoft-based business software

solutions

SAP consulting and support services

Storage solutions

Semiconductor IT Services

11

AGENDA




Get in contact4 25

AppendixA 28

12

EXECUTIVE SUMMARY (I/II)

Since our last update in April, valuation levels in the technology sector have largely reached pre-crisis level again. Our view that technology companies, in particular software companies, have preserved value during COVID-19, has been confirmed. While valuation levels of horizontal software providers have reached pre-crisis levels, vertical software providers are currently trading even higher (+12%). Also, the hardware technology sector appears to hold up well, trading evenly (+0%) while IT services providers are trading slightly below pre-crisis levels (-8%)

1

By now, most companies in our peer group have commented on their full year outlook. The picture is mixed, as approx. half of our peer group did not see a need to adjust their outlook, the other half did or even fully suspended their outlook (26%). Differences can be clearly observed between the peer groups and their resilience in this crisis

2

While we had expected a further set-back of stock market valuations per our valuation update in April (in particular in comparison with the Global Financial Crisis 2007-2009), government support measures drove stock markets to new highs, and all indices in our analysis are trading well-above pre-crisis levels

3

Longer term, liquidity is expected to flow even more strongly into stable, crisis-proof assets, such as mission-critical software companies with a high degree of recurring revenues and strong margins. Given the scarcity of such assets, we may even see increasing valuation multiples for high-quality assets – nevertheless, we continue to see attractive investment opportunities within the sector

4

M&A markets paused in April and May. Since June, we see a soft re-opening of the M&A markets and expect deal-flow to pick up significantly after the summer break. As we expect a selection bias, we in particular expect high quality assets to be brought to market. Given the strong sentiment of public markets and the continued high levels of liquidity in the markets, we expect transaction multiples to – at least – remain stable

5

13

• EBITDA multiples of horizontal software companies have remained rather stable over the last six months• Significant increases in revenue and EBITDA multiples can be observed in payment and cloud infrastructure

technology. Also, multiples for HCM software companies recovered strongly and now trade above pre-crisis level• Our outlook: We expect the segment to continue to perform well

Horizontal software

• IT services companies have experienced the strongest decline in valuation in the technology space due to their perceived project nature of the business model. In particular smaller IT services companies have downward-adjusted their earnings expectations for 2020

• Our outlook: We expect a continued recovery of valuation levels in particular as the crisis highlighted the need for up-to-date IT infrastructure across virtually all industries and the public sector. We expect that especially IT services companies delivering solutions for cloud hosting, mobile access and cyber security will see continued high demand

IT services

• EBITDA multiples of vertical software companies have remained rather stable with little deviation from the valuation levels observed in April

• In particular, the healthcare software segment underperforms the broader market• Valuation multiples for travel software providers continue to be higher than pre-crisis as investors look through short

term earnings downgrades to an expected rebound post COVID-19• Our outlook: While we are positive on the general outlook, we expect vertical software companies to continue to

develop more heterogeneously, reflecting the quality of the underlying asset and exposure to end-markets

Vertical software

• Compared to our last update, we see much higher valuation levels on a peer group level, trading now at pre-crisis levels despite the peer group drawing a rather cautious picture in their earnings forecasts, reporting reduced visibility of customer demand, intensified competition as well as risk of pressure on prices

• Within the Hardware segment, valuation levels of Robotics and Automation companies have surged as investors expect a trend of re-nationalization of production

• Our outlook: We expect the peer group to remain in a wait-and-see attitude following a sideways movement

Hardware

EXECUTIVE SUMMARY (II/II)

Note: Indication on lower-right side indicates assessment as of last valuation update

Peer group Comment Assessment

1)

14

AGENDA




Get in contact4 25

AppendixA 28

15

50

60

70

80

90

100

110

120

30-Dec 13-Jan 27-Jan 6-Apr23-Mar 4-May10-Feb 24-Feb 9-Mar 20-Apr 18-May 1-Jun 15-Jun

Markets recovered strongly – most technology indices are in positive terrain for 2020

STOCK MARKET PERFORMANCE OF TECHNOLOGY INDICES AND KEY PEER GROUPS

Source: Capital IQ as of 23-Jun-2020

5%37%(32%)

12%36%(24%)

13%37%(24%)

(11%)28%(39%)

(5%)26%(31%)

13%36%(23%)

(3%)33%(36%)

(5%)

PLMBusiness

Software

Payment Cloud

Infrastructure

HCM Financial

Software

Healthcare Travel

7%

Robotics /

Automation

Semiconductors

23%

EMS IT Services

Large

IT Services

Small / Mid

61%31%

(17%)

1%12%

(32%)(3%)

2%

(11%) (12%)

Horizontal software Vertical software Hardware IT services

Subsector performance: 30-Dec-2019 to 22-Jun-2020

Share price development of technology indices vs. key peer groups

LowUptick

from lowPerformance since Dec-19

Horizontal Software

Vertical Software

Hardware

NASDAQ

IT Services

EuroStoxx Tech

MSCI World Tech

Index (100=30-Dec-2019)

+40% +19% +11% +15% +4% +9%+37% +9% +11% +16%+6% +9% +16%vs. April

2020

NASDAQ 100 all-time high on 1 July

Low up to (40%) in mid-March

16

0

100

200

300

400

500

600

700

24-Feb10-Feb30-Dec 23-Mar9-Mar13-Jan 27-Jan 6-Apr 20-Apr 4-May 18-May 1-Jun 15-Jun

While volatility peaked mid-March, market volatility remains high

VOLATILITY

Source: Capital IQ as of 23-Jun-2020

140%606.8

Volatility development of selected indices

HighΔ since Dec-19

VDAX

NASDAQ-100 VIX 75%447.4

Index (100=30-Dec-2019)

Peak in volatilityin mid-March

17

50

60

70

80

90

100

110

120

9-Mar24-Feb30-Dec 13-Jan 27-Jan 10-Feb 6-Apr23-Mar 20-Apr 4-May 18-May 1-Jun 15-Jun

Valuation multiples have remained rather stable – in subsectors that are considered long-term beneficiaries of the COVID-19 crisis, especially

payment technology and robotics / automation multiples even increased significantly

EV/EBITDA VALUATION DEVELOPMENT OF OUR KEY PEER GROUPS

Note(s): 1) EV to next-twelve months EBITDA; 2) Strong decline in earnings forecasts for the travel sector with a corresponding moderate drop in share prices have driven the peer group valuation up significantlySource: Capital IQ as of 23-Jun-2020

(8%)33%60%

12%38%75%

(2%)25%74%

0%35%65%

Development of peer group forward-looking1) valuation levels

LowUptick

from lowPerformance since Dec-19

Travel

(8%)

HCMPayment Financial

Software

PLMCloud

Infrastructure

Business

Software

4%

Healthcare

(14%)

Robotics /

Automation

Semi-

conductors

EMS

(2%)

IT Services

Large

IT Services

Small / Mid

52%

19%

(2%)

6% 12% 4%

62%2)

45%

(8%)

Subsector performance: 30-Dec-2019 to 22-Jun-2020

Horizontal Software

Vertical Software

Hardware

IT Services

Index (100=30-Dec-2019)

Horizontal software Vertical software Hardware IT services

37% +19% +7% (3%) (2%) (11%)+35% +6% +6% +10%+41% +12% +11%vs. April

2020

Low up to (40%) in mid-March

18

As of today1), c. 50% of our total peer group has adjusted or suspended their outlook for 2020

QUALITATIVE ANALYSIS OF OUTLOOK ADJUSTMENTS DURING THE COVID -19 CRISIS

Note: 1) As of 26-Jun-2020

26%

17%

50%

4%2%

• As expected, most companies commented on their full-year guidance when reporting their Q1 results• The picture is mixed, as approx. half of our peer group did not see a need to adjust their outlook, the other half did (on average a revenue

guidance adjustment of (4.5%)) or even fully suspended their outlook (26%)• Interestingly, 4% of our peer group increased their guidance. These were mostly cloud infrastructure providers• Compared to our survey in April, a large number of software companies has now suspended their outlook. This holds in particular true for

companies in the Travel, Financial or Payment Technology sector. Notable exception is the healthcare software sector, which in unison confirmed their guidance

• Other than expected, the hardware technology sector appears to hold up well. This is especially true for the EMS segment where most companies confirmed their guidance while the picture in the semiconductor and robotics segments is mixed

∑ 103 companies

Complete observed group Key peer groups

20%

31%

40%

9%

40%

50%

5%

5%

18%

12%

67%

3%

Horizontal software

Hardware

Vertical software

IT services

∑ 35

40%

13%

40%

7%

∑ 20

∑ 33 ∑ 15

Positive adjustmentOutlook suspended Adjustment of outlook No adjustment of outlook / moderate adjustment No news, yet / n.a.

Mostly cloud infrastructure

providers All healthcare software providers

Esp. small-cap IT services companies

Most EMS providers

Travel and financial technology sectors

19

First COVID-19 cases in Europe

Businesses open up again

“Peak” of the crisis

Multiples across all three sub-sectors increased significantly since our last valuation update in April, in particular multiples in the HCM

segment recovered strongly (+9.8x) fueled by positive earrings announcements and the $1.4bn Saba Software transaction

HORIZONTAL SOFTWARE I: BUSINESS, HCM AND PLM SOFTWARE

Note(s): 1) NTM = Next twelve months; 2) USD 2tn Coronavirus Aid, Relief, and Economic Security Act; 3) “GFC” = Change in valuation multiples during the Global Financial Crisis 12/07 – 03/09 in %; “n.a.” = Comparison not applicable, as peer group was not listed in 2007Source: Capital IQ as of 23-Jun-2020

EV/Sales NTM1)

EV/EBITDA NTM

Ho

rizo

nta

l so

ftw

are

I: B

usi

ne

ss, H

CM

an

d P

LM s

oft

war

e

13-Jan30-Dec 9-Mar27-Jan 10-Feb 23-Mar24-Feb 6-Apr 20-Apr

50x

4-May 18-May 1-Jun 15-Jun

10x

20x

30x

40x

12%41.5x37.2x

(2%)17.0x17.4xBusiness Software

HCM

PLM

n.a.

(39%)

6%30.8x29.0x (48%)

30-Dec 23-Jun Delta GFC

30.8x

41.5x

17.0x

10-Feb30-Dec 13-Jan 27-Jan 24-Feb 20-Apr9-Mar 23-Mar 6-Apr 4-May 18-May 1-Jun 15-Jun

12.5x

2.5x

5.0x

7.5x

10.0x

Business Software

HCM

PLM

12%10.1x9.0x

(9%)5.6x6.1x

n.a.

(52%)

22%9.0x7.4x (67%)

9.0x

10.1x

5.6x

30-Dec 23-Jun Delta GFC3)

Driven a.o. by Cornerstone`s acquisition of Saba Software

and positively adjusted earnings expectations

20




Payment and cloud infrastructure technology were the only sectors that even increased their earnings outlooks. In addition, these sectors

saw a steep expansion of revenue and EBITDA multiples

HORIZONTAL SOFTWARE II: PAYMENT AND CLOUD INFRASTRUCTURE SOFTWAR E


27-Jan 10-Feb30-Dec 13-Jan

35x

9-Mar24-Feb

30x

23-Mar 6-Apr 18-May20-Apr 4-May 1-Jun 15-Jun

10x

5x

15x

20x

25x

19.0x

27.6x

10-Feb 1-Jun30-Dec 6-Apr24-Feb27-Jan13-Jan 23-Mar9-Mar 20-Apr 4-May 18-May

8x

15-Jun

2x

4x

6x

10x

12x11.4x

Ho

rizo

nta

l so

ftw

are

II:

Pay

me

nt

and

Clo

ud

Infr

astr

uct

ure

so

ftw

are

Payment

Cloud Infrastruct. 76%11.4x6.5x

55%9.5x6.1x

n.a.

n.a.


19%19.0x16.0x

52%27.6x18.2xPayment

Cloud Infrastruct. n.a.

n.a.


EV/Sales NTM1)

EV/EBITDA NTM

9.5x

+52% since 30 Dec –Wirecard dropping out of the peer group end-June

resulting in shift in median

21




6-Apr24-Feb

15x

30-Dec 13-Jan 9-Mar10-Feb27-Jan 23-Mar 20-Apr 4-May 18-May 1-Jun 15-Jun

10x

5x

20x

25x

As expected, multiples for mission-critical software for the Healthcare and Financial sectors have remained stable. Multiples for

Travel technology companies increased as investors look through short term earnings downgrades to an expected rebound post COVID-19

VERTICAL SOFTWARE: HEALTHCARE, TRAVEL AND FINANCIAL SOFTWARE


4-May30-Dec 23-Mar13-Jan 24-Feb27-Jan 10-Feb 9-Mar

1.5x

6-Apr 20-Apr 18-May 1-Jun 15-Jun

3.0x

4.5x

6.0x

7.5x

Healthcare

Financial Software

Travel

5.4x

5.1x

Ve

rtic

al s

oft

war

e: H

eal

thca

re, T

rave

l an

d F

inan

cial

so

ftw

are

(1%)5.1x5.1x

0%4.2x4.2x

n.a.

(25%)


(2%)5.4x5.6x (44%)

4.2x

Strong decline in earnings forecasts for the Travel sector with a

corresponding moderate drop in share prices have driven the peer

group valuation up by more than 60%

62%19.8x12.2x

4%15.0x14.4x

n.a.

(36%)

4%18.3x17.7x (39%)


Healthcare

Travel

Financial Software

EV/Sales NTM1)

EV/EBITDA NTM

15.0x

18.3x

19.8x

22




Multiples in the EMS and semiconductor segments remain broadly stable, but have recovered compared to our valuation update in April.

Valuation levels of robotics and automation companies have surged as investors expect a trend towards re-nationalization of production

HARDWARE: ROBOTICS / AUTOMATION, EMS AND SEMICONDUCTOR COMPANIES

Note(s): 1) NTM = Next twelve months; 2) USD 2tn Coronavirus Aid, Relief, and Economic Security Act; 3) “GFC” = Change in valuation multiples during the Global Financial Crisis 12/07 – 03/09 in %Source: Capital IQ as of 23-Jun-2020

6-Apr23-Mar24-Feb10-Feb

24x

30-Dec 9-Mar13-Jan 27-Jan 20-Apr

12x

4-May 18-May 1-Jun 15-Jun

3x

6x

9x

15x

18x

21x

(8%)6.3x6.8x

45%22.5x15.6xRobot. / Autom.

EMS

Semiconductors

(40%)

(43%)

(8%)13.4x14.6x 11%


13.4x

6.3x

22.5x

23-Mar13-Jan30-Dec 27-Jan 9-Mar10-Feb 15-Jun24-Feb 6-Apr

1x

20-Apr 4-May 18-May 1-Jun

2x

3x

4x

6x

5x

4.6x

0.4x

3.4x

Robot. / Autom.

EMS

Semiconductors

(13%)0.4x0.4x

8%3.4x3.2x

(54%)

(64%)

(4%)4.6x4.8x (24%)


Har

dw

are

: Ro

bo

tics

/ A

uto

mat

ion

, EM

S an

d S

em

ico

nd

uct

or

Co

mp

anie

s

EV/Sales NTM1)

EV/EBITDA NTM

+45% since 30 Dec

23




While valuation multiples for IT services companies continued to recover, stock market valuations do yet not reflect the expected positive

medium to long term impact from increased investments into digitalization projects across various industries and in the public sector

IT SERVICES: LARGE CAP AND SMALL / MID CAP IT SERVICES COMPANIES

Note(s): 1) NTM = Next twelve months; 2) USD 2tn Coronavirus Aid, Relief, and Economic Security Act; 3) “GFC” = Change in valuation multiples during the Global Financial Crisis 12/07 – 03/09 in %Source: Capital IQ as of 23-Jun-2020

12x

23-Mar30-Dec 10-Feb13-Jan 24-Feb27-Jan 9-Mar 6-Apr 15-Jun20-Apr 4-May 18-May 1-Jun

2x

4x

6x

8x

10x

(2%)9.6x9.7x

(14%)7.5x8.7xIT Services - Large

IT Services - S / M (44%)

(43%)


27-Jan 24-Feb30-Dec 23-Mar13-Jan 10-Feb 9-Mar 6-Apr 20-Apr 4-May 18-May 1-Jun 15-Jun

0.5x

1.0x

1.5x

IT Services - Large

IT Services - S / M (5%)1.0x1.0x

(10%)1.1x1.2x

(64%)

(44%)


1.1x

1.0x

7.5x

9.6x

IT s

erv

ice

s: L

arge

cap

an

d S

mal

l / M

id C

ap IT

se

rvic

es

Co

mp

anie

s

EV/Sales NTM1)

EV/EBITDA NTM

24

While the global technology M&A markets mostly were on hold between March and June, we see first signs of recovery and expect M&A

activity to pick-up significantly after the summer break

DEVELOPMENT OF THE TECHNOLOGY M&A MARKET

Note: 1) Projected valueSource(s): 451 Research‘s M&A KnowledgeBase, S&P Global Market Intelligence

465 479 447484 489

547 534 560505 540

487

351

0

10′000

30′000

50′000

0

2′526

30′901

Q2 ’20Q1 ’18Q3 ’17 Q4 ’17 Q2 ’18 Q3 ’18 Q4 ’18 Q1 ’19 Q2 ’19 Q3 ’19 Q4 ’19

9′880

Q1 ’20

15′846 18′56512′245

8′975

47′712

36′417

12′374

26′71222′141

Total # of deals Total deal value in EURm

• While Q1 2020 was not affected by COVID-19, Q2 2020 clearly shows declines in the number of deals and transaction value

673 675 724

196

140 151

103122 126

0

50

100

150

200

6′538

May-20Jan-20 Feb-20 Mar-20 Jun-20Apr-20

15′203

1′126

Total # of deals Total deal value in EURm

• The global (technology) M&A markets mostly were on hold between March and June resulting in a significant decline in total deal value

• As of June deal activity is slightly picking up again

Scarcity of high-quality assets

We see high investor demand for high-quality assets that are

expected to come out of the crisis almost unaffected – driving

valuations for premium assets

€Prices are less affected than

expected

Currently no pressure on transaction multiples from public

markets

Low risk of increasing bid-ask-spreads

A significant valuation discount, which we were concerned about per our last valuation update, has

so far not been an issue in our ongoing transactions

Software assets are coming out on top

Software assets with a high share of recurring revenues and sound margins have proven to preserve value more than other IT markets

European M&A activity in the technology space

We see first signs of recovery in the technology M&A sector and expect deal-flow to pick up significantly after the summer break. Our expectation is that in particular high quality assets will be brought to market. Given the strong sentiment of public markets and the continued high levels of liquidity in the markets, we expect transaction multiples to – at least – remain stable

~50% of deals in Q2 were completed in

the software sector

Quarterly Monthly

25

AGENDA




Get in contact4 25

AppendixA 28

26

GET IN CONTACT (I/II)

Mario Schlup, Director Guido Viggiani, AnalystSascha Pfeiffer, Member of the Board Raiko Stelten, Managing Director

• More than 13 years of corporate finance experience with more than 40 completed transactions in the Technology and Tech-enabled Services sectors

• Prior to joining GCA Altium, Raiko worked for DC Advisory

• Member of GCA Altium’s Executive Committee and GCA’s global board of directors

• More than 20 years of corporate finance experience with more than 100 completed transactions predominantly in software / technology M&A

• Prior to joining GCA Altium in 2013, Sascha worked for DC Advisory / Close Brothers in Frankfurt and London

[email protected]+49 (69) 20 434 64 -15+49 177 74 156 43

[email protected]+49 (69) 20 434 64 -18+49 171 33 508 79

27

Dedicated European Technology Team

GET IN CONTACT (II/II)

Sigurd Solheim, Managing [email protected]

Lausanne

Raymond Frojd, Managing [email protected]

Kristoffer Källeskog, Managing [email protected]

Stockholm

Sébastien Delattre, [email protected]

Thomas Egli, Managing [email protected]

Alexander Grünwald, Member of the [email protected]

Zurich

Malte Abrams, [email protected]

Tobias Schultheiss, Managing [email protected]

Frankfurt

Alessandro Soprano, Managing [email protected]

Milan

Hugues Archambault, Managing [email protected]

Paris

Xavier Moreels, Managing [email protected]

BENELUX

Adrian Reed, Managing [email protected]

Daniel Fugmann, [email protected]

James Craven, Managing [email protected]

London

28

AGENDA




Get in contact4 25

AppendixA 28

29

PEER GROUP CONSTITUENTS OVERVIEW (I/III)

Note: 1) Wirecard dropped out of the peer group end of June due to current condition of the company

PLM software

Payment software

HCM software

Cloud Infrastructure software Business software

Ho

rizo

nta

l so

ftw

are

1)

30

PEER GROUP CONSTITUENTS OVERVIEW (II/III)

Note: 1) Only included in the qualitative analysis of management statements about outlook adjustments

Robotics / Automation

Healthcare software

Semiconductors

Financial software

EMS

Travel software

Ve

rtic

al s

oft

war

eH

ard

war

e

1)

1)

31

PEER GROUP CONSTITUENTS OVERVIEW (III/III)

Large Cap Small / Mid Cap

IT s

erv

ice

s

32

Basis of this presentation

LEGAL DISCLAIMER

The views presented herein are for discussion purposes only and are based on publicly available information.

GCA ALTIUM AG (“GCA ALTIUM” or “GCA”) is not advocating any of the courses of action presented herein, which are being presented solely to illustrate a range of available options. This analysis is presented with the understanding that no dissemination of the contents hereof will be provided to anyone other than representatives of the addressee without the written permission of GCA.

This document does not constitute or form part of any offer for purchase, sale or subscription of or solicitation or invitation of any offer to buy, sell or to subscribe for any securities nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose.

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J u l y 2020 - GCA Altium

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