M&A Snapshot Q1 2013

M&A SNAPSHOTQ1 2013

APRIL 2nd, 2013

M&A SNAPSHOT

OVERVIEW COMMENTARY

M&A activity slowed considerably in Q1 2013, however, we believe levels are likely to rebound in the next quarter or two. Given the long lead times from initiation of M&A conversations to public announcement, looking back to Q3 and Q4 of 2012 gives us some answers to Q1 2013 lackluster levels. Economic uncertainty adversely impacts the confidence of boards and senior management. We believe the U.S. budget paralysis and ongoing concerns about European economies played a material role in sapping the strength out of the M&A market over the past quarter.

M&A activity within the $25mm - $1b range in Q1 2013 declined by a considerable 46% from Q4 2012 and was down 17% year-over-year from Q1 2012. Total consideration paid also declined by 40%, from $10b in Q4 2012 to $6b in the first quarter of 2013.

The evolution of commerce continues to be a significant M&A theme, as 15% of transactions within the $25mm - $1b range were driven by this trend. Notable deals include Ingenico’s $485mm acquisition of Ogone, ACI Worldwide’s $266mm acquisition of Online Resources, Google’s $125mm acquisition of Channel Intelligence and FIS’s $120mm acquisition of mFoundry.

In addition to e-commerce, proliferation of mobile device usage has prompted wireless carriers to explore methods to relieve the stress on mobile networks. In that vein, there were four network performance-enhancing transactions in Q1, including Cisco’s $475mm acquisition of Intucell, Opera Software’s $155mm acquisition of Skyfire Labs and Procera Network’s $28mm acquisition of Vineyard Networks.

FOLLOWING ANALYSIS

M&A DASHBOARD:

NOTABLE ACQUIRERS:

M&A TRANSACTIONS:

OTHER NOTABLE TRANSACTIONS:

COMING SOON

ANALYSIS OF VC-BACKED M&A EXITS

SUMMARY OF QUARTERLY ACTIVITY IN NUMBERS AND TONE

ACTIVE INFLUENTIAL BUYER ACTIVITY

SUMMARY OF TRANSACTIONS BETWEEN $25MM-$1B IN VALUE

SUMMARY OF NOTABLE TRANSACTIONS WITHOUT ANNOUNCED VALUE OR ABOVE $1B.

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COVERAGEArchitect Partners tracks M&A activity within the converging Internet | mobile | digital media sectors. The following assessment is focused on M&A transactions with announced values of between $25mm and $1B as these typically represent successfu l bus iness-bu i ld ing endeavors.

MARKET TONESlowed, but anticipate moderate increase in activity levels as we move into 2013.

Note: 1) Includes all Internet | mobile | digital media transactions regardless of transaction value. Transaction values within a range are presented as a mid-point value

Source: Architect Partners, Capital IQ, company filings and public information 3

M&A DASHBOARD

68 61 63 57

$98 $113

$80 $90

48% 49% 52% 42%

27 23 23

19

2011Q1 Q2 Q3 Q4

457$ 482$ 450$ 417$

M&A Exits (#)1...........................................................................................

Total Consideration Paid ($b)...............................................................

Venture-Backed M&A Exits (#)............................................................

Median Transaction Size ($mm)..........................................................

U.S.-based Target (%).............................................................................

All Internet | Mobile | Digital Media M&A Exits(1)............................

$14 $12 $11

$9

2012Q1 Q2 Q3 Q4

352$440$

364$

466$

$12 $14

$12 $10

41

57 44

63

$103 $127

$107 $92

56% 46% 47% 48%

12 16 15 14

2013Q1

41

57

34

$12 $14

$12

$6

352$440$

364$ 387$

$103 $127

$107 $104

56% 46% 47%

41%

12 17 18

13

The following acquirers are generally active or influential buyers within the Internet | mobile | digital media sectors. Below, we highlight announced acquisitions by the most active players in the first quarter of 2013.

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ACQUIRER # TARGETS

4

3

3

2

2

2

2

2

2

2

2

2

NOTABLE ACQUIRERS

5

ACQUIRER # TARGETS

2

2

2

2

2

2

2

2

1

1

1

1

1

NOTABLE ACQUIRERS (continued)

#ANNOUNCED

DATE BUYER TARGETTRANSACTION VALUE ($MM) TARGET DESCRIPTION

AP INSIGHTSM

M&A ALERTVC-

BACKED

NON SERVICE PROVIDER TRANSACTIONS

1 01/29/2013 Ingenico Ogone $485 Leading payment service provider in Europe offering e-commerce, ticketing, call centers, airlines and travel solutions. Brussels, Belgium-based.

!

2 01/23/2013 Cisco Intucell $475 Provides self-optimizing network (SON) software that assists mobile carriers in managing and optimizing their cellular networks in response to changing conditions. Raanana, Israel-based.

!

3 01/31/2013 ACI Worldwide Online Resources $266 Develops and supplies a proprietary Digital Payment Framework to enable ePayment choices between consumers and financial institutions, creditors and billers. Chantilly, Virginia-based.

4 01/29/2013 Funai Electric Koninklijke Philips Electronics NV, Lifestyle Entertainment Business

$202 Lifestyle Entertainment business includes audio, video, multimedia and accessories.

5 02/15/2013 Opera Software Skyfire Labs $155 Offers Rocket Optimizer, which enables mobile carriers to optimize video or other multimedia content on crowded cellular networks. Also offers Horizon, a mobile browser extension and toolbar platform that allows users to personalize their mobile browsing experience. Mountain View, CA-based.

!

6 03/28/2013 Amazon Goodreads $150 Social site that discusses and recommends books. Santa Monica, CA-based. !

7 01/28/2013 Netgear Sierra Wireless, AirCard Business

$145 Comprises intellectual property for manufacturing USB modems to provide mobile broadband connectivity to any computer. Carlsbad, California and Richmond, Canada-based.

8 02/05/2013 Ourpalm Dovo Technology $130 Develops and markets online games. Guangzhou, China-based.

9 02/06/2013 Google Channel Intelligence $125 Offers a “Where-to-Buy” feature, which allows companies to commerce-enable any digital marketing asset, including websites, display ads, video reviews, email, Facebook and other social media. Orlando, FL-based.

!

M&A transactions that have announced values between $25mm and $1b announced in Q1 2013 within the Internet | mobile | digital media sectors.

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M&A TRANSACTIONS: $25MM-$1B

Note: Transaction values within a range are presented as a mid-point value.Source: Architect Partners, Capital IQ, company filings and public information

#ANNOUNCED


AP INSIGHTSM

M&A ALERTVC-

BACKED


10 01/31/2013 Fidelity National Information Services (FIS)

mFoundry $120 Provides SaaS-based mobile banking and payments solutions to financial institutions and clients who use its services to power their mobile applications, digital wallets and NFC payments technology. Larkspur, CA-based.

!

11 02/26/2013 Genesys Telecommunications Laboratories

Angel.com Inc. $110 Offers cloud-based customer experience management (CEM) solutions, including in-bound and out-bound interactive voice response (IVR), virtual call centre, voice biometrics and payment processing solutions. Vienna, Virginia-based.

12 03/08/2013 JDS Uniphase Canada Arieso $89 Provides subscriber experience geo-location, capital budget management and automatic network optimization solutions for wireless operators and service providers. Newbury, UK-based.

!

13 02/06/2013 Twitter Bluefin Labs $85 Generates social TV analytics by evaluating how and when people use social media in conjunction with their TV viewing. Cambridge, MA-based.

!

14 03/19/2013 NC2 Media Lonely Planet Publications

$78 Publishes guidebooks, digital books, city guides and maps that provide travel details to travelers. Footscray, Australia-based.

15 03/15/2013 Dropbox Orchestra $75 Offers Mailbox, a mobile email app that aims to simplify the way in which users interact and sort through their email messages. Palo Alto, CA-based.

!

16 02/22/2013 Elbrus Capital OSG Records Management ZAO

$48 Provides document and data management solutions, including i-Archive paper document archive, scanning and digitizing documents, e-Archive e-document archive, document workflow design and advice. Moscow, Russia-based.

!

17 03/01/2013 KV Asia Capital CBS Bizhub and PT. Panpages and PanPages

$39 CBS Bizhub develops and provides e-commerce solutions and platforms. PT. Panpages owns and operates a Web portal. British Virgin Islands-based.

18 03/05/2013 Perceptive Software Twistage and AccessVia

$32 Twistage provides an online video platform (OVP) for enterprises and digital publishers (New York, NY-based). AccessVia offers a publishing platform that allows retailers to deliver print and digital promotions (Seattle, Washington-based).

19 03/25/2013 Yahoo Summly $30 Develops iPhone application that allows instant summarization of any Webpage or article. London, UK-based.

!

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M&A TRANSACTIONS: $25MM-$1B (continued)


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#ANNOUNCED


AP INSIGHTSM

M&A ALERTVC-

BACKED


20 01/07/2013 Procera Networks Vineyard Networks $28 Provides Deep Packet Inspection (DPI) and application classification technology, a method through which network operators can manage network traffic by prioritizing classes of traffic. Kelowna, Canada-based.

21 01/23/2013 Koch Media Volition $28 Volition develops action adventure game Saints Row. Champaign, Illinois-based.

22 01/23/2013 Sega THQ Canada $26 Doing business as Relic Entertainment, the company develops games for PCs and consoles. Vancouver, Canada-based.

23 03/19/2013 Euromoney Institutional Investor

Insider Publishing Limited

$25 Publishes a weekly electronic newsletter, provides breaking news alerts, premium news alert and a Web application to access the latest news and issues on iPad. London, UK-based.

#ANNOUNCED


AP INSIGHTSM

M&A ALERTVC-

BACKED

SERVICE PROVIDER TRANSACTIONS

1 01/21/2013 ZON Multimédia Serviços de Telecomunicações e Multimédia

Optimus SGPS SA $878 Operates mobile network and fixed communications network which includes transmission, backbone and local access. Maia, Portugal-based.

2 01/22/2013 AT&T Allied Wireless Communications Corporation, Alltel Assets

$780 Wireless properties, including licences, network assets, retail stores and more than half a million subscribers. Includes spectrum in the 700MHz, 850MHz and 1900MHz bands covering primarily rural areas in the states of Georgia, Idaho, Illinois, North Carolina, Ohio and South Carolina.

3 01/14/2013 Rogers Communications Shaw Hamilton Ltd $406 Provides communication services including digital and HDTV, high-speed Internet, Web hosting, international long-distance, phone, Internet and TV. Hamilton, Canada-based.

4 03/01/2013 British Sky Broadcasting Group

Telefónica UK $300 Provides mobile and broadband services such as text, media messaging, games, music and video, as well as data connections via GPRS, HSDPA, 3G and WLAN. Slough, UK-based.

5 02/26/2013 TDS Telecommunications Baja Broadband $268 Offers residential and commercial video, high speed Internet, voice, and data services. Fort Mill, South Carolina-based.

!

6 03/18/2013 M2 Telecommunications Group

Dodo Australia $212 Provides telecommunication services including broadband Internet, wireless broadband, dial-up Internet, home phone, wireless telephony, Internet and VOIP services. Melbourne, Australia-based.

7 03/27/2013 Shah Capital Management

UTStarcom Holdings Corp

$99 Designs and sells Internet protocol (IP)-based telecommunications infrastructure products. Beijing, China-based.

!

8 01/22/2013 Intermedia.net Telanetix $53 Operates as a cloud based Internet protocol (IP) voice services company. Bellevue, WA-based.

9 03/18/2013 M2 Telecommunications Group

EFTEL Limited $50 Provides broadband, wireless broadband, mobile, home phone, and VoIP services. Melbourne, Australia-based.

10 01/28/2013 Anite Elektrobit System Test and Certain Related Assets in the United States and China

$42 Provides radio channel emulation tools and testing solutions for the development of the wireless technologies. Oulu, Finland-based with certain related assets in the United States and China.

11 03/18/2013 Westell Technologies Kentrox Provides site monitoring, management and control solutions for wireless and fixed line telecommunications carriers, cable and broadband network providers and utility companies. Dublin, Ohio-based.

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A number of important transactions were announced in the first quarter of 2013 with consideration in excess of $1b or with unannounced transaction values.

M&A TRANSACTIONS: OTHER NOTABLE


#ANNOUNCED


AP INSIGHTSM

M&A ALERTVC-

BACKED

1 02/05/2013 Silver Lake Partners Dell $29,755 Develops, manufactures and markets mobility and desktop products, including notebooks, workstations, tablets, smartphones and desktop PCs, as well as servers and networking products. Round Rock, Texas-based.

2 02/05/2013 Liberty Global Virgin Media $24,182 Provides entertainment and communications services, including cable broadband Internet, television and fixed line telephone services under the Virgin Media brand. New York, NY-based.

3 01/08/2013 Dish Networks Clearwire $10,422 Provides fourth generation wireless broadband services. Builds and operates mobile broadband networks that offer high-speed mobile Internet and residential Internet access services. Bellevue, WA-based.

!

4 02/07/2013 Charter Communications Bresnan Broadband $2,621 Engages in the ownership and operation of cable television systems in Colorado, Wyoming, Montana and Utah. Also provides broadband telecommunications services. Purchase, New York-based.

5 03/27/2013 VTB Bank, Investment Arm

Tele2 Russia Telecom $2,400 Operates as an alternative telecom operator offering GSM, mobile, fixed broadband and telephony services. Moscow, Russia-based.

6 02/04/2013 Oracle Acme Packets $2,004 Provides session delivery network solutions that enable the delivery of voice, video, data and unified communications services and applications across Internet protocol (IP) networks. Bedford, MA-based.

!

7 01/13/2013 CITIC Telecom International

Companhia de Telecomunicacoes de Macau

$1,161 Provides telecommunications services, including local and international telecommunications services, mobile services and roaming services. Taipa, Macau-based.

8 03/25/2013 Oracle Tekelec - Provides policy management, diameter and SIP signaling, subscriber data management, performance intelligence center and SS7 signaling products. Morrisvile, North Carolina-based.

!

9 01/22/2013 Infusionsoft GroSocial - Develops SaaS based social-media marketing software solutions that enable small and medium-sized businesses to create and manage their social networking profiles and promotions. Orem, Utah-based.

!

M&A Snapshot Q1 2013

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