November M&A Flash Report with special guest speaker from Google

8/8/2019 November M&A Flash Report with special guest speaker from Google

1/31

USA Switzerland Germany France United Kingdom Canada Norway Brazil

www.corumgroup.com

M&A Flash ReportM&A Flash Report Nov. 2009Nov. 2009Software and IT Industry Market Update

Thursday, November 5, 200910:00 am PT


2/31

Monthly M&A Flash Report

Bruce MilneCEOCorum Group Ltd.

Mark ReedExecutive Vice PresidentCorum Group Ltd.

Corum Group Presentation 2

>> For todays presentation or more information, contact Pat Sultan

([email protected], +1 425-455-8281 ext. 248)

Charles RimCorporate DeveloperGoogle

ruce ne, an oun er o orum, as overseen more ransac ons an anyone n e wor

over the past 25 years, generating over $6 Billion in wealth for clients in 24 countries.

He has founded or owned four software companies, including AMI, the worlds largest vertical marketsoftware firm, and was a founding investor in some of the most innovative firms in their field, includingBlue Coat, Bright Star and Sabaki.

A recognized industry expert, he has served as a personal advisor to Bi ll Gates on operating systems,Apple on the development of the Mac, and as one of top 10 industry advisors to IBM. He has served onthe board of Washington Technology Center at the University of Washington, and is the founder of theWTIA, the nations leading regional technology trade association.

Outside the U.S. he worked with the Canadian government to found SoftWorld, and he was recentlychosen as one of the 200 most influential individuals in the IT community in Europe. He is also the only

juror from North America for the Tornado 100 Awards in Europes.

A Deans List graduate in International Business from the UW, and a graduate With Distinction fromHarvard Business School, Mr. Milne has written three book, including Power Planning, How To StructureYour Software Company For Success.

Dougan MilneDirector of ResearchCorum Group Ltd.


3/31

Agenda

Overview of Current Market

Market and Valuation Analysis

-


Closing Comments - Q&A


4/31

World Overview

U.K. Services Index Rises to Highest in Two Years

Asia to Grow More Than Forecast, Adding Asset-Bubble Risk, World Bank Says

U.K. Consumer Confidence Holds at 1 -Year High


on House Price Recovery Europe Manufacturing, Services Industries Expand

for Ninth Straight Month

Carlsberg Cuts 2009 Sales Forecast as RussiaContracts More Than Expected


5/31

World Overview

European Producer Prices Drop for Ninth Month as

Energy Costs Plummet 17%

Gold Extends Record High on India Purchase

Nissan Returns to Quarterly Profit on China Sales



6/31

U.S. Overview

Time Warner Raises Annual Forecast, Reports Profit

that Exceeds Estimates

Service Industries in U.S. Probably Expanded asEconomic Recovery Spread


Dollar Drop Continues Retailers Optimistic About October Sales

Ford has over $1Billion profit for quarter

Cash for Clunkers Program was Almost Half of theWhole GDP Gain


7/31

Financial Industry

Ministers Points to US/Europe Currency Collapse

UBS Rocked by Fresh Losses

U.K. TO Inject 37bn into Lloyds and RBS

The World Bank and IMF are raisin concerns that


efforts by governments and central banks to stoke arecovery will create asset bubbles in real estate,stock and currency.

For CIT Customers, An Uncertain Future Looms


8/31

Financial Industry

FHA Digging Out After Loans Sour

Fed Keeps Key Rate at Record Low

VIX Volatility Gauge Soared 24%



9/31

Dont Forget Unemployment

9.8 million workers are collecting unemployment.

Another 3.8 million are collecting emergencyunemployment benefits (a reference to unemployedpeople who have been out of work for more than 26


wee s . 5.2 million homeowners who are no longer paying

their mortgages and contracting income.

Income is still contracting rapidly with wages and

salaries off 4% to 5% year over year.


10/31

Actions of the Titans

Warren Buffet made the biggest bet of hiscareer, agreeing to buy Burlington Northern ina $26.3 billion deal that reflects his long-termo timism about the U.S. econom .


Wilbur Ross Predicts Commercial Real EstateCrash


11/31

Recent Transactions Closed



12/31

Recent Transactions Closed



13/31

Firms in Letter Of Intent (LOI)

Vertical market Financial Services

Mobile search applications

Vertical market Healthcare (SaaS)


etwor secur ty so ut ons IT Services

Mobile messaging solutions


14/31

Current Offers

Network management solutions

Vertical market- Wholesale Distribution

Application development tools


nterpr se ontent anagement CRM

Vertical market Insurance

Enterprise Application Integration


15/31

Dougan MilneDirector of ResearchCorum Group Ltd.

Market Valuation Analysis


Dougan is the head of Corums research team serving as the Director of Research. Duringhis time with Corum, Dougan spent three years working with Corum's international groupheadquartered in Zrich, Switzerland. Prior to joining Corum's team in 2005, Dougan spentthree years working in the banking industry with Bank of America, and Citigroup's PrivateWealth business unit. Before entering finance and investment banking, Dougan founded the

successful garment distribution business, Billions Apparel and the advertising firm, ModoMarketing. Dougan has a Bachelors degree in Business Economics from the University ofSan Diego.


16/31

Public Markets

100.00

110.00

120.00

Nasdaq S&P Tech Dow


40.00

50.00

60.00

70.00

80.00

90.00

Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09


17/31

M&A Activity September

Number of Software and IT M&A Transactions

225

286


2004

2005

329

311

0 50 100 150 200 250 300 350

October

2009 2008 2007 2006 2005 2004


18/31

Corum Index M&A Statistics

# of Transactions# of Mega Deals >$1B

Largest Deal

Average Deal Value

Oct-09

2864

$3,000

$230

Oct-08

2543

$1,000

$235


$ values in millions

e an e er evenue

# VC backed Exits

% Terms Undisclosed

All Cash (announced)

% Targets Public

% Buyers Public

63

36

72%

46%

18%

46%

30

19

61%

53%

18%

51%


19/31

Horizontal Application Software Market

Public Valuations Deal Spotlight:

Sector: PLMTarget: IBM PLM Software AssetsBuyer: Dassault SystmesDate: October 2009Transaction Value: $600 millionStructure: Cash


Comments: Market share Technology Expanded product portfolio


EV/EBITDA 5.85 x 6.82 x 9.23 x 9.39 x 9.99 x 11.06 x 11.06 x 12.67 x 12.26 x

EV/S 1.12 x 1.12 x 1.16 x 1.35 x 1.50 x 1.58 x 1.93 x 2.41 x 2.21 x

Horizontal

Application

Software


20/31

Public Valuations

Vertical Application Software Market

Deal Spotlight:

Sector: InsuranceTarget: Risk Management Solutions Weather derivatives softwarefranchiseBuyer: MDA FederalDate: October 2009


Transaction Value: n/a

Comments: Gains weather-related risk tech Expands product portfolio Client base

Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09EV/EBITDA 6.19 x 6.53 x 7.26 x 7.99 x 8.17 x 8.91 x 9.01 x 9.32 x 8.42 x

EV/S 1.01 x 1.14 x 1.31 x 1.40 x 1.51 x 1.51 x 1.66 x 1.80 x 1.57 x

Vertical

ApplicationSoftware


21/31

Public Valuations

Consumer Application Software Market

Deal Spotlight:

Sector: Consumer HealthTarget: Vasectomy.com,HealthNews.org,BusinessFinance.com,TheNewParentGuide.comBuyer: Internet Brands


Date: September 2009

Transaction Value: $6.7mStructure: unknown

Comments: Several online consumer sites Broadened portfolio and customer

base Now operating in sevenhigh-interest consumer categories



EV/S 0.58 x 0.64 x 0.69 x 0.50 x 0.53 x 0.53 x 0.59 x 0.83 x 0.60 x

Consumer

Application

Software


22/31

Infrastructure Market


Sector: VirtualizationTarget: Gresham Enterprise Storage- Storage Director BusinessBuyer: Tributary SystemsDate: October 2009Transaction Value: n/a


Structure: n/a

Comments: Complements product line Includes offering to IBM, Windows,Linux, Unix users

Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09EV/EBITDA 6.32 x 6.98 x 8.46 x 8.29 x 8.74 x 9.59 x 10.92 x 10.46 x 10.81 x

EV/S 1.31 x 1.43 x 1.55 x 1.52 x 1.72 x 1.95 x 2.02 x 2.14 x 2.20 x

InfrastructureSoftware


23/31

Internet Market


Sector: e-CommerceTarget: Retail Convergence Ru La La, SmartBargains.comBuyer: GSI CommerceDate: October 2009Transaction Value: $180 million


Sellers Revenue: $134.6 millionTransaction Multiple: 1.3xStructure: $90 cash, $90 stock+ additional earnout

Comments: Multi-interest consumer strategy

Market leading brands Interactive marketing abilities



EV/S 1.36 x 1.60 x 2.11 x 2.26 x 2.30 x 2.48 x 2.60 x 2.70 x 2.19 x

Internet


24/31

IT Services Market


Sector: IT ServicesTarget: Bearing Point Chinese Services DivisionBuyer: Dell/PerotDate: October 2009Transaction Value: N/A


Comments: Geographic expansion Off-shoring Domain expertise



EV/S 0.55 x 0.56 x 0.60 x 0.61 x 0.63 x 0.68 x 0.68 x 0.73 x 0.73 x

IT Services


25/31

Why Now?

Great Timing Whos In?

Everyone: Small Large firms

Asset Sales


What For?

Cash Cow / Discontinued Tech.

Focus / Re-focus

Streamlining / Fat Cutting

Cash & Growth

Prepare for Exit


26/31

Charles RimCorporate DevelopmentGoogle

The Google Perspective


Charles Rim is currently Principal in the Corporate Development Team at Google, Inc.heading Asia coverage. CorpDev is responsible for all forms of strategic investments andacquisitions at Google. Previously, Mr. Rim was a Director at Yahoo!Korea in charge ofStrategy& Corporate Development, and prior to that stint was the VP/CFO of Korea Thrunet(formerly NASDAQ-listed, now merged with Hanaro Telecom), Korea's first broadbandcarrier.

In addition to his corporate career in finance and investments, Mr. Rim was an investmentbanker briefly with Citigroup and with Credit Agricole (W.I.Carr Securities) in Asia, withpostings in HK, Jakarta and Singapore. As an investment banker, the main focus ofactivities was in M&A, IPO advisory and equity capital markets financing. Previous to hisbanking career, Mr. Rim was a practicing attorney (again, focused on securities and M&A)both in the USA and Korea.


27/31

Corum Group Presentation 27London November 17


28/31

Partial Speaker List

November 17, London [email protected]


Frank Boenke

Wellington Partners

Bernard DalleIndex Ventures

Andrew Tsao

Silicon Valley Bank

Kristof de Spiegeleer

SUN (Q-Layer)

Pelle Hjortblad

ProjectPlace

Anil HansjeeGoogle

Jenny Rosberg

NASDAQ

Mike PeplowBanctec

Ashley WardEuropean LeadershipProgramme

Gustavo GarciaBuyVIP


29/31

www.worldfinancialsymposiums.comGrowth and Exit Strategies

Staging for RecoveryThe Future of M&A, VC, Private Equity and Public Offerings in the New Tech Landscape

November 17 2009 London


December 15, 2009 New YorkAttend this conference to learn about:

Raising capital in the current environment

The new rules of global tech M&A

The role of private equity in a credit-starved market

The IPO window

Creative transaction structures

Finding value and opportunity in the cloud

Acquisition multiples, VC tactics and more


30/31

Upcoming Corum Events

November 3: Houston SUSO

November 5: Flash Webinar (Intl)

November 10: Flash Webinar (France)

November 11: Flash Webinar (DACH)

November 17: London WFS

December 15: New York City WFS

January 7: Flash Webinar (Intl)

January 12: Toronto MB & SUSO

January 14: Flash Webinar (France)

Januar 14: Ottawa MB


November 18: Ft. Lauderdale

MB

November 19: Tampa MB

December 3: Flash Webinar (Intl)

December 8: London SUSO

December 10: Flash Webinar (Nordic)

Merge Briefing (MB)Selling Up Selling Out (SUSO)World Financial Symposium (WFS)

January 15: Montreal

MB

January 19: Calgary MB

January 21: Flash Webinar (Nordic)

January 25-27:Miami Progress Conference

January 28: Flash Webinar (DACH)


31/31

Contact Information

Corum Group Ltd.

Bruce Milne, [email protected]

Dougan Milne, Director [email protected] Corum Grou International S..r.l.


Research and Conferences:www.corumgroup.com

10500 NE 8th Street, Suite 1500Bellevue, WA 98004USA

+1 425-455-8281

Beim ParadeplatzBasteiplatz 78001 ZrichSwitzerland

+41 44 251 82 65

November M&A Flash Report with special guest speaker from Google

Documents

Transcript of November M&A Flash Report with special guest speaker from Google