Tech M&A Monthly: 2017 Midyear Report

1

Tech M&A Monthly

2017 Midyear Report

13 July 2017

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Timothy joined Corum in 2011, and oversees the company’s marketing efforts globally from the headquarters near

Seattle. Chief among these is Corum's extensive conference schedule, “Selling Up, Selling Out,” the Merge Briefing,

the Tech M&A Monthly webcast and Corum's platinum sponsorship of the World Financial Symposiums' live events

and Market Spotlight series. Through these events, Corum Group serves as the world’s leading educator in

technology mergers and acquisitions.

Prior to joining Corum, Timothy served as marketing and product manager for GIS software startup Depiction, Inc.,

and previously worked in marketing for VizX Labs, a pioneering SaaS startup delivering DNA analysis tools. In

addition to marketing for software startups, Tim has worked for a US Senate campaign and taught science in Rio de

Janeiro.

Timothy graduated Magna Cum Laude from Bethel University in St. Paul, Minnesota, with degrees in History and

Biology.

Welcome

Timothy Goddard

SVP, Marketing

Corum Group Ltd.

3

Agenda

Welcome

Field Report

Endeavor Commerce acquired by Vendavo

2017 Midyear Research Report

Top 10 Disruptive Tech Trends update

Q&A

4

Field Report: Endeavor Commerce acquired by Vendavo

Allan Wilson

Senior Vice President

Corum Group Ltd.

Allan has over 30 years of executive and entrepreneurial experience and has built and sold several software

companies in sectors including, manufacturing, supply chain, big data, predictive analytics and social networks.

He has deep understanding of Aerospace, Automotive, High Tech, Healthcare, Consumer Products and Military

Contracting operating models.

Allan has extensive international experience and lived in Germany for a time working for SAP, following the sale

of his company to them in 2009.

5

Corum Research Report

Elon Gasper

EVP, Research

Amber Stoner

Director of Research

Yasmin Khodamoradi

Director, Valuation ServicesAmanda Tallman

Senior Analyst

6

Public Markets

Dec. Jan. Feb. Mar. Apr. May Jun.

26%

8%

14%

0%

5%

10%

15%

20%

25%

30%

35%Weekly Percentage Change

S&P TECH Dow Jones NASDAQ

7

The Long Bull Market, 2009-PresentLast 6 months

2009 2011 2013 2015 2017

0%

50%

100%

150%

200%

250%

300%

350%

400%

450% Daily Percentage Change

NASDAQ S&P TECH Dow Jones

2009 2011 2013 2015 2017

8

*Since the Great Depression. Source: S&P Capital IQ, The Associated Press

Macro view: 4 Longest Bull Market Runs

Start End Years

Dotcom Bubble Oct. 11, 1990 Mar. 24, 2000 9.5

Current Mar. 9, 2009 ? 8.3

Postwar Boom Jun. 13, 1949 Aug. 2, 1956 7.1

That 70s Inflation Oct. 3, 1974 Nov. 28, 1980 6.2

9

1. Disruptive trends – Strategic imperative to buy

2. Cash – Strategic & financial buyers

3. Low cost debt for leveraged buyouts

4. Many new buyers (IPOs, non-tech)

5. Strong financial markets

5 Reasons Tech M&A Remains Strong

10

Corum Index

Market

Transactions

1H:20171H:2016

2069 1802

Mega Deals34 20

Largest Deal $26B $15.3B

PipelinePrivate Equity Deals

139 199

VC Backed Exits285322

Attributes34%

Cross Border

Transactions 39%

Start-Up

Acquisitions 11%12%

17 yrs15 yrsAverage Life

of Target

1H:2016 1H:2017

1H:2016 1H:2017

0%

43%

11%

13%

41%

41%

11

2017 Mega Deals – YTD

$1.1B

VERTICAL

$20B

$2.0B

$2.3B

$15.3B

HORIZONTAL

$2.7B

$1.4BEnterprise software

$3.7B

$1.6B

$1.1B

$1.1B

INFRASTRUCTURE

$8.6B

$1.1B

HR BPO assets

$2.6B

$2.8B

IT SERVICES

$11B

$4.3B

$2.0B

$1.3B$2.4B

INTERNET

$11B

$1.9B

$3.4B

$2.4B

$1.3B

12


$1.1B

VERTICAL

$20B

$2.0B

$2.3B

$15.3B

HORIZONTAL

$2.7B


$3.7B

$1.6B

$1.1B

$1.1B

INFRASTRUCTURE

$8.6B

$1.1B

HR BPO assets

$2.6B

$2.8B

IT SERVICES

$11B

$4.3B

$2.0B

$1.3B$2.4B

INTERNET

$11B

$1.9B

$3.4B

$2.4B

$1.3B

Sold to

Target: Syncsort [Clearlake Capital Group] [USA]

Acquirer: Centerbridge Partners [USA]

Transaction Value: $1.26B

- Data integration and management software

13


$1.1B

VERTICAL

$20B

$2.0B

$2.3B

$15.3B

HORIZONTAL

$2.7B


$3.7B

$1.6B

$1.1B

$1.1B

INFRASTRUCTURE

$8.6B

$1.1B

HR BPO assets

$2.6B

$2.8B

IT SERVICES

$11B

$4.3B

$2.0B

$1.3B$2.4B

INTERNET

$11B

$1.9B

$3.4B

$2.4B

$1.3B

Sold to

Target: Nimble Storage [USA]

Acquirer: Hewlett Packard Enterprise [USA]

Transaction Value: $1.1B

- Predictive cloud infrastructure

14


$1.1B

VERTICAL

$20B

$2.0B

$2.3B

$15.3B

HORIZONTAL

$2.7B


$3.7B

$1.6B

$1.1B

$1.1B

INFRASTRUCTURE

$8.6B

$1.1B

HR BPO assets

$2.6B

$2.8B

IT SERVICES

$11B

$4.3B

$2.0B

$1.3B$2.4B

INTERNET

$11B

$1.9B

$3.4B

$2.4B

$1.3B

Sold to

Target: CEB [USA]

Acquirer: Gartner [USA]

Transaction Value: $2.6B (3.5x EV/S and 18.5x EBITDA)

- Business management and IT Consulting Services

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$1.1B

VERTICAL

$20B

$2.0B

$2.3B

$15.3B

HORIZONTAL

$2.7B


$3.7B

$1.6B

$1.1B

$1.1B

INFRASTRUCTURE

$8.6B

$1.1B

HR BPO assets

$2.6B

$2.8B

IT SERVICES

$11B

$4.3B

$2.0B

$1.3B$2.4B

INTERNET

$11B

$1.9B

$3.4B

$2.4B

$1.3B

Sold to

Target: Chewy.com [USA]

Acquirer: PetSmart [USA]

Transaction Value: $3.4B (reported)

- Online pet products marketplace

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$1.1B

VERTICAL

$20B

$2.0B

$2.3B

$15.3B

HORIZONTAL

$2.7B


$3.7B

$1.6B

$1.1B

$1.1B

INFRASTRUCTURE

$8.6B

$1.1B

HR BPO assets

$2.6B

$2.8B

IT SERVICES

$11B

$4.3B

$2.0B

$1.3B$2.4B

INTERNET

$11B

$1.9B

$3.4B

$2.4B

$1.3B

Sold to

Target: Mobileye [Israel]

Acquirer: Intel [USA]

Transaction Value: $15.3B (41.0x EV/Sales and 117.6x EBITDA)

- EyeQ system-on-chip, semiconductors and related systems for

automakers

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3-Year Market Valuation Trends

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

5.50

EV/Sales

5.00

7.00

9.00

11.00

13.00

15.00

17.00

19.00

21.00

EV/EBITDA

18

17

11

9 9

7 76 6

5 5 5 5

Top Strategic Acquirers – 1H:2017

19

17

11

9 9

7 76 6

5 5 5 5


Target: Trimble Navigation [USA]

Acquirer: Network Mapping Group [United Kingdom]

- 3D visualization and mapping software for the utility industry

Sold to

20

17

11

9 9

7 76 6

5 5 5 5


Target: MSC Software Corporation [Symphony Technology Group] [USA]

Acquirer: Hexagon [Sweden]

Transaction Value: $834M (3.6x EV/Sales)

- Motion control, dynamics and acoustical vibration simulation software

Sold to

Target: VIRES Simulationstechnologie [Germany]

Acquirer: MSC Software Corporation [Hexagon] [Sweden]

- 3D simulation and virtual test drive software

Sold to

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North America

Sellers 1073

Buyers 1145

Europe

Sellers 509

Buyers 475

Latin America

Sellers 15

Buyers 9

Asia

Sellers 155

Buyers 146

Source: 451 Research

Mideast/Africa

Sellers 28

Buyers 17

22

North American Deals

West

Sellers 368

Buyers 369

Canada

Sellers 85

Buyers 71

Northeast

Sellers 264

Buyers 329

Southeast

Sellers 230

Buyers 226


Midwest

Sellers 126

Buyers 150

New York South KoreaDetroit United Kingdom

Vancouver Palo Alto

Toronto Atlanta

Seattle China

23

European Deals

Nordics

Sellers 73

Buyers 79

Western Europe

Sellers 411

Buyers 388

Eastern Europe

Sellers 25

Buyers 9


Czech Republic United States

Italy France

Germany United States

Sweden USA

24

Asian Deals

China

Sellers 30

Buyers 37

Far East

Sellers 20

Buyers 27

SE/Oceania

Sellers 59

Buyers 47

India

Sellers 46

Buyers 35


Japan United States

India China

China United States

India United States

Australia Japan

25

Latin American Deals

Latin

America

Sellers 16

Buyers 9


Peru United States

Brazil India

26

North America

Sellers 1073

Buyers 1145

Europe

Sellers 509

Buyers 475

Latin America

Sellers 15

Buyers 9

Mideast/Africa

Sellers 28

Buyers 17

Asia

Sellers 155

Buyers 146


Israel Israel

UAE United States

27

Horizontal Application Software MarketPublic Valuation Multiples

2.00 x

2.50 x

3.00 x

3.50 x

4.00 x

4.50 x

5.00 x

8.00 x

10.00 x

12.00 x

14.00 x

16.00 x

18.00 x

20.00 x

22.00 x

EV/SEV/EBITDA

Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17

EV/EBITDA 18.93 x 18.73 x 18.18 x 18.93 x 17.70 x 18.19 x 18.39 x 17.98 x 17.31 x 18.71 x 19.46 x 20.61 x 19.56 x

EV/S 3.57 x 3.52 x 3.70 x 3.83 x 3.75 x 3.46 x 3.47 x 3.70 x 3.83 x 3.80 x 3.90 x 4.31 x 4.49 x

28

Subsector Sales EBITDA Examples

Business

Intelligence3.86x 21.47x

Marketing &

Ad Tech1.92x 16.62x

CRM 2.73x 43.83x

ERP 5.29x 20.73x

Human

Resources 6.40x 33.33x

SCM 5.41x 19.03x

Payments 4.19x 17.37x

Other 3.66x 17.04x

Horizontal Application Software Valuations

29

Horizontal Application Software MarketDeal Spotlights: Marketing Analytics

2.00 x

2.50 x

3.00 x

3.50 x

4.00 x

4.50 x

5.00 x

8.00 x

10.00 x

12.00 x

14.00 x

16.00 x

18.00 x

20.00 x

22.00 x

EV/SEV/EBITDA




Sold to

Target: Infomart [Postmedia Network] [Canada]

Acquirer: Meltwater Group [USA]

Transaction Value: $30M

- Analytics and reporting SaaS for news and social media monitoring

Target: Turnstyle Analytics [Canada]

Acquirer: Yelp [USA]

- Customer analytics and marketing automation SaaS via public WiFi

Sold to

30

Horizontal Application Software MarketDeal Spotlights: Cross-Device Programmatic Advertising

2.00 x

2.50 x

3.00 x

3.50 x

4.00 x

4.50 x

5.00 x

8.00 x

10.00 x

12.00 x

14.00 x

16.00 x

18.00 x

20.00 x

22.00 x

EV/SEV/EBITDA




Sold to

Target: Adelphic [USA]

Acquirer: Viant Technology [dba Viant] [Time] [USA]

Transaction Value: $25M (2x EV/S)

- Mobile and cross-device programmatic trading SaaS for advertisers and Web

publishers

Target: AdTheorent [USA]

Acquirer: H.I.G. Capital [USA]

- Mobile and cross-device trading and analytics SaaS for advertisers and Web

publishers

Sold to

31

Horizontal Application Software MarketDeal Spotlights: HR

2.00 x

2.50 x

3.00 x

3.50 x

4.00 x

4.50 x

5.00 x

8.00 x

10.00 x

12.00 x

14.00 x

16.00 x

18.00 x

20.00 x

22.00 x

EV/SEV/EBITDA




Sold to

Target: Compass HRM [USA]

Acquirer: Asure Software [USA]


- HR management SaaS for workforce management, payroll management, digital document management

Sold to

Target: iSystems [MBO] [USA]

Acquirer: Asure Software [USA]


- Payroll, workforce and business tax management software and data hosting services

Sold to

Sold to

Target: ExcelPay Business Solutions [USA]

Acquirer: iSolved HCM [USA]

- Web-based HR management software for payroll management, applicant training and workforce management

Target: Vertex Solutions Group [USA]

Acquirer: TCC Software Solutions [USA]

- Employee training and workforce management software and consulting services

32

Horizontal Application Software MarketDeal Spotlights: AI-Enabled BI

2.00 x

2.50 x

3.00 x

3.50 x

4.00 x

4.50 x

5.00 x

8.00 x

10.00 x

12.00 x

14.00 x

16.00 x

18.00 x

20.00 x

22.00 x

EV/SEV/EBITDA




Sold to

Target: Qlue [USA]

Acquirer: ServiceNow [USA]

- Customer service automation SaaS for direct customer-employee interaction

through mobile messaging interfaces

Target: DxContinuum [USA]

Acquirer: ServiceNow [USA]


- Predictive analytics SaaS for management and performance of sales

Sold to

33

Horizontal Application Software MarketDeal Spotlight: Social Media Monitoring

2.00 x

2.50 x

3.00 x

3.50 x

4.00 x

4.50 x

5.00 x

8.00 x

10.00 x

12.00 x

14.00 x

16.00 x

18.00 x

20.00 x

22.00 x

EV/SEV/EBITDA




Sold to

Target: Digital Roots [USA]

Acquirer: Interactions [USA]

- Social media monitoring, analytics and customer engagement SaaS

- Adds to Interactions’ portfolio of Omnichannel Intelligent Virtual Assistant

Solutions for Modernized Enterprise Customer Care

- Augments Interactions’ previous purchase of AT&T Watson AI

34

Vertical Application Software MarketPublic Valuation Multiples

3.00 x

3.50 x

4.00 x

4.50 x

5.00 x

5.50 x

6.00 x

8.00 x

10.00 x

12.00 x

14.00 x

16.00 x

18.00 x

20.00 x

EV/SEV/EBITDA




35


A/E/C 6.08x 23.29x

Automotive 6.06x 20.85x

Energy &

Environment4.50x 19.33x

Financial

Services5.34x 16.77x

Government 2.03x 13.11x

Healthcare 4.55x 20.84x

Real Estate 8.44x 34.22x

Vertical Other 4.02x 15.07x

Vertical Application Software Valuations

36

Vertical Application Software Market

Deal Spotlights: Fleet Management

0.40 x

0.50 x

0.60 x

0.70 x

0.80 x

0.90 x

1.00 x

1.10 x

5.00 x

6.00 x

7.00 x

8.00 x

9.00 x

10.00 x

11.00 x

12.00 x

EV/SEV/EBITDA

Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16



Target AcquirerTarget

Country

Acquirer

CountryDescription

USA USATelematics and fleet management electronic driver log

software

Canada USA Fleet management SaaS and GPS vehicle tracking solutions

Norway Bahrain Fleet and equipment tracking software

USA France Fleet management and telematics systems

USA USA Fleet management and driver safety SaaS

USA USA Vehicle management SaaS and IoT-based GPS fleet tracking

New

ZealandCanada Fleet management and safety location-based SaaS

37



0.40 x

0.50 x

0.60 x

0.70 x

0.80 x

0.90 x

1.00 x

1.10 x

5.00 x

6.00 x

7.00 x

8.00 x

9.00 x

10.00 x

11.00 x

12.00 x

EV/SEV/EBITDA





Country

Acquirer

CountryDescription


software






New


Sold to

Target: Innovative Software Engineering [USA]

Acquirer: Trimble [USA]

- Telematics and fleet management electronic driver log software

- Refills Trimble's portfolio of Fleet Safety and Compliance Solutions

Target: Shaw Tracking [Canada]

Acquirer: Omnitracs [USA]

- Fleet management SaaS and GPS vehicle tracking solutions

- Expands Omnitracs’ presence in Canada

Sold to

38



0.40 x

0.50 x

0.60 x

0.70 x

0.80 x

0.90 x

1.00 x

1.10 x

5.00 x

6.00 x

7.00 x

8.00 x

9.00 x

10.00 x

11.00 x

12.00 x

EV/SEV/EBITDA





Country

Acquirer

CountryDescription


software






New


Sold to

Target: ABAX [Norway]

Acquirer: Investcorp [Bahrain]


- Fleet and equipment tracking software

Target: NexTraq [USA]

Acquirer: Michelin [France]

- Fleet management and telematics systems

Sold to

39

Vertical Application Software MarketDeal Spotlight: Connected Car

3.00 x

3.50 x

4.00 x

4.50 x

5.00 x

5.50 x

6.00 x

8.00 x

10.00 x

12.00 x

14.00 x

16.00 x

18.00 x

20.00 x

EV/SEV/EBITDA




Sold to

Target: Automatic Labs [USA]

Acquirer: Sirius XM Radio [dba SiriusXM] [USA]


- Mobile driver assist devices and applications

- The deal solidifies SiriusXM’s position in the connected car infotainment space

Sold to

Target: Teramatrix Technologies [India]

Acquirer: Globetouch [USA]

- M2M IoT data collection and aggregation software

- Complements Globetouch’s IoT, Connected Car and Autonomous Driving systems

40

Vertical Application Software MarketDeal Spotlight: Asset Management

3.00 x

3.50 x

4.00 x

4.50 x

5.00 x

5.50 x

6.00 x

8.00 x

10.00 x

12.00 x

14.00 x

16.00 x

18.00 x

20.00 x

EV/SEV/EBITDA




Sold to

Target: Sage Technology [Australia]

Acquirer: Prometheus Group Enterprises [Francisco Partners] [USA]

- Plant management SaaS to businesses in the manufacturing industry

Target: Pipeline Group [USA]

Acquirer: Prometheus Group Enterprises [Francisco Partners] [USA]

- Asset management SaaS for businesses in the manufacturing industry

- Builds upon Prometheus’s strategy to deliver a unified scheduling solution

Sold to

41

Vertical Application Software MarketDeal Spotlights: Education

3.00 x

3.50 x

4.00 x

4.50 x

5.00 x

5.50 x

6.00 x

8.00 x

10.00 x

12.00 x

14.00 x

16.00 x

18.00 x

20.00 x

EV/SEV/EBITDA




Sold to

Sold to

Sold to

Target: AcademicWorks [USA]

Acquirer: Blackbaud [USA]


- Scholarship management SaaS for K-12 schools, universities and nonprofits

Target: Questar Assessment [USA]

Acquirer: Educational Testing Service [dba ETS] [USA]

Transaction Value: $127.5M

- K-12 education assessment management software

Target: DATA180 [USA]

Acquirer: Interfolio [USA]

- Faculty reporting and evaluation management, program assessment and student tracking SaaS

42

Consumer Application Software MarketPublic Valuation Multiples

1.00 x

1.50 x

2.00 x

2.50 x

3.00 x

3.50 x

6.00 x

8.00 x

10.00 x

12.00 x

14.00 x

16.00 x

18.00 x

20.00 x

22.00 x

EV/SEV/EBITDA




43


Casual Gaming 3.70x 21.46x

Core Gaming 3.25x 13.90x

Other 1.27x N/A

Consumer Application Software Valuations

44

Consumer Application Software MarketDeal Spotlights: Video Games

3.00 x

3.50 x

4.00 x

4.50 x

5.00 x

5.50 x

6.00 x

8.00 x

10.00 x

12.00 x

14.00 x

16.00 x

18.00 x

20.00 x

EV/SEV/EBITDA




Sold to

Sold to

Sold toHunan Tianrun Digital

Entertainment & Cultural Media

Target: Shenzhen Muzhi Game Technology [dba Muzhi] [China]

Acquirer: Hunan Tianrun Digital Entertainment & Cultural Media [China]


- Mobile video games developer

Target: Shanghai Woshi Culture Communication [China]

Acquirer: Hakim Unique Internet [China]


- Developer and publisher of mobile video games

Target: IsCool Entertainment [France]

Acquirer: Hachette Livre [Lagardere] [France]


- Social games for Web and mobile

45

Consumer Application Software MarketDeal Spotlights: Facebook-Based Casino Games

1.00 x

1.50 x

2.00 x

2.50 x

3.00 x

3.50 x

6.00 x

8.00 x

10.00 x

12.00 x

14.00 x

16.00 x

18.00 x

20.00 x

22.00 x

EV/SEV/EBITDA




Sold to

Target: Double Down Interactive [International Game Technology] [USA]

Acquirer: DoubleU Games [South Korea]


- Online casino simulation videogame for Facebook

Target: Luck Genome [Israel]

Acquirer: GamePoint [Netherlands]


- Free casino games accessible on mobile and tablet devices as well as Facebook

Sold to

46

Consumer Application Software MarketDeal Spotlights: Spotify

3.00 x

3.50 x

4.00 x

4.50 x

5.00 x

5.50 x

6.00 x

8.00 x

10.00 x

12.00 x

14.00 x

16.00 x

18.00 x

20.00 x

EV/SEV/EBITDA




Sold to

Sold to

Sold to

Target: MightyTV [USA]

Acquirer: Spotify [Sweden]

- Mobile application for digital entertainment content recommendations

Target: Sonalytic [USA]


- Copyright monitoring and music identification SaaS

Target: Niland [France]


- Online music search and AI-enabled software recommendations for publishers

47

Infrastructure Software Market

Public Valuation Multiples

2.00 x

2.20 x

2.40 x

2.60 x

2.80 x

3.00 x

3.20 x

3.40 x

3.60 x

3.80 x

6.00 x

8.00 x

10.00 x

12.00 x

14.00 x

16.00 x

18.00 x

EV/SEV/EBITDA




48


Endpoint 3.53x 15.46x

IT Services

Management5.01x 13.25x

Network

Management2.49x 8.59x

Security 4.04x 22.84x

Storage

& Hosting2.77x 11.98x

Other 4.97x 11.94x


49


Deal Spotlights: Identity Access Management

0.40 x

0.50 x

0.60 x

0.70 x

0.80 x

0.90 x

1.00 x

1.10 x

5.00 x

6.00 x

7.00 x

8.00 x

9.00 x

10.00 x

11.00 x

12.00 x

EV/SEV/EBITDA





Country

Acquirer

CountryDescription

USA USA Identity theft monitoring technology

USA Canada Security & identity management SaaS

USA Israel Automated machine identity provisioning software

USA USA Application penetration and network vulnerability testing SaaS

USA Belgium Cloud-based identity & access management APIs and SDKs

USA Sweden Iris recognition biometric systems

United

Kingdom

United

KingdomAuthentication software & SaaS

50


Deal Spotlights: Identity Access Management

0.40 x

0.50 x

0.60 x

0.70 x

0.80 x

0.90 x

1.00 x

1.10 x

5.00 x

6.00 x

7.00 x

8.00 x

9.00 x

10.00 x

11.00 x

12.00 x

EV/SEV/EBITDA





Country

Acquirer

CountryDescription

USA USA Identity theft monitoring technology

USA Canada Security & identity management SaaS

USA Israel Automated machine identity provisioning software

USA USA Application penetration and network vulnerability testing SaaS

USA Belgium Cloud-based identity & access management APIs and SDKs

USA Sweden Iris recognition biometric systems

United

Kingdom

United

KingdomAuthentication software & SaaS

Sold to

Sold to

Target: Delta ID [USA]

Acquirer: Fingerprint Cards [Sweden]


- Iris recognition biometric systems for use in mobile devices and automobiles

Target: SecurEnvoy [United Kingdom]

Acquirer: Shearwater Group [United Kingdom]

Transaction Value: $25M (6.2x EV/Sales and 9.1x EV/EBITDA)

- Two-factor, tokenless, SMS and email authentication software and SaaS

Target: Conjur [USA]

Acquirer: CyberArk Software [Israel]


- Automated machine identity provisioning software for DevOps providers

Sold to

51


Deal Spotlights: Security

2.00 x

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EV/SEV/EBITDA




Sold to

Target: Invincea [USA]

Acquirer: Sophos [United Kingdom]


- Endpoint security software for healthcare, financial and government services

- Enhances Sophos’s synchronized security portfolio and real-time intelligence sharing

Target: Skyfence Networks [Imperva] [Israel]

Acquirer: Forcepoint [Raytheon] [USA]


- Security software for public cloud applications

Sold to

52


Deal Spotlights: Mobile Back-end

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EV/SEV/EBITDA




Sold to

Sold to

Target: Apteligent [USA]

Acquirer: VMware [EMC] [Dell] [USA]


- Mobile application intelligence solution providing both tools and app performance

insights

Target: Kinvey [USA]

Acquirer: Progress Software Corporation [USA]


- Machine-learning predictive analytics SaaS for industrial IoT connected device

management

53


Deal Spotlights: Virtualization

2.00 x

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EV/SEV/EBITDA




Sold to

Target: Unidesk Corporation [USA]

Acquirer: Citrix Systems [USA]


- Desktop virtualization and app lifecycle management software and SaaS

Target: Viptela [USA]

Acquirer: Cisco Systems [USA]


- Cloud-based WAN virtualization software

Sold to

54


Internet Application Software Market

1.50 x

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EV/SEV/EBITDA




55


Diversified

Internet5.28x 20.03x

eCommerce 1.34x 53.82x

Social Network 4.33x 24.78x

Travel & Leisure 6.93x 25.04x

Internet Application Software Valuations

56

Internet Application Software MarketDeal Spotlight: Diversified Internet

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EV/SEV/EBITDA




Sold to

Target: Angie's List [USA]

Acquirer: HomeAdvisor / IAC [USA]


- Online consumer review service

- IAC had courted Angie’s List for over 2 years

- Combined company spins out as new public company ANGI Homeservices

57

Deal Spotlight: Coupon Services


1.50 x

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EV/SEV/EBITDA




Target: RetailMeNot [USA]

Acquirer: Harland Clarke Holdings [USA]

Transaction Value: $630M (1.5x EV/Sales and 15.4x EBITDA)

- Searchable online directory of digital coupons and promotional codes for

consumers

Sold to

58

Deal Spotlight: Classifieds


1.50 x

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EV/SEV/EBITDA




Target: CareerBuilder.com [TEGNA] [USA]

Acquirer: Led by Apollo Global Management [USA]


- Employment classified ad website with related online reference content

Sold to

59


Deal Spotlights: Airbnb

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EV/SEV/EBITDA





Country

Acquirer

CountryDescription

Canada USA Short-term rentals classifieds website

USA USA Mobile & social payment applications

Germany USA Online vacation search & comparison service

USA USAMachine learning-based identity screening

SaaS

USA USA Mobile app development software

60

Deal Spotlights: Automotive Classifieds


1.50 x

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EV/SEV/EBITDA




Sold to

Target: CarCo Technologies [USA]

Acquirer: KAR Auction Services [USA]


- Online classifieds website that enables automotive dealers to acquire used cars

Target: Am.ru [Rambler&Co] [Russia]

Acquirer: Mail.Ru Group [Russia]


- Online auto classifieds, news and blog website

Sold to

61

Deal Spotlights: Online Food Ordering


1.50 x

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EV/SEV/EBITDA




Sold to

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Sold to

Target: ZakaZaka [Russia]

Acquirer: Mail.Ru Group [Russia]


- Online food delivery service in Russia

Target: MobileNosh [USA]

Acquirer: Electronic Payments [USA]

- Mobile application that enables consumers to order food from restaurants and food trucks

Target: Nowait [USA]

Acquirer: Yelp [USA]


- Wait list management mobile application for restaurants

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IT Services – Developed Markets


0.40 x

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EV/SEV/EBITDA




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IT Services – Emerging Markets

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EV/SEV/EBITDA




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Developed 1.41x 11.81x

Emerging 3.27x 18.55x

IT Services Valuations

65

IT Services Global Acquisitions 1H 2017

66


Target: solid serVision [Germany]

- Gold-rated ServiceNow SI & consultant; ~100 professionals

- Ranked among fastest-growing German IT companies

Sold to

Target: Focus Group Europe [United Kingdom]

- ServiceNow SI, consultant & VAR

- Won ServiceNow Top Influencer award; ~70 professionals

Sold to

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Target: SinnerSchrader [Germany]

Transaction Value: $67.4M (2x EV/sales)

- Digital marketing & Web design services

Sold to

68


Target: Altitude [USA]

- Product design, consulting and engineering services

Sold to

Target: Media Hive [USA]

- Web and mobile e-commerce solutions

Sold to

69


Target: LabAnswer [USA]

- Research lab informatics consultant to FDA, pharma, others

- LIMS, ELN, instruments, migration and outsourcing support

Target: Genfour [USA]

- Intelligent Automation services

- Cornerstone for new IA Center in UK

Sold to

Sold to

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Target: Endgame Systems Inc. (U.S. federal government

services business) [USA]

- Proactive cyber defense including threat hunting & red

teaming

- Apply machine learning & data science EDR platform

Sold toFederal business unit

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Corum Research Report

Elon Gasper

EVP, Research

Amber Stoner

Director of Research

Yasmin Khodamoradi

Director, Valuation ServicesAmanda Tallman

Senior Analyst

73

Corum Top Ten Technology Trends 2017

AI Enablement IoTSoftware

Visual Intelligence

Systems

Digital Currency Flow

Data Science Monetization

Online Exchanges

Omni-channel Sales

Connected Health

Focused IT Services

DataSecurity

CO

RE

CO

NTO

UR

74

Allan Wilson


Corum Group Ltd.

Allan has over 30 years of executive and entrepreneurial experience and has built

and sold several software companies in sectors including, manufacturing, supply

chain, big data, predictive analytics and social networks. He has deep

understanding of Aerospace, Automotive, High Tech, Healthcare, Consumer

Products and Military Contracting operating models.

Allan has extensive international experience and lived in Germany for a time

working for SAP, following the sale of his company to them in 2009.

Putting AI to work by means of big data and feedback

#1: AI Enablement

Corum Top Ten Disruptive Technology Trends 2017

75

Putting AI to work by means of big data and feedback

#1: AI Enablement

Nascent AIs and other machine learning platforms need data.

Need tasks that provide data, benefit from improving expertise, then provide feedback to improve the platform.

Business cases emerging rapidly across all sectors.

Significant stores of unique data can short-circuit “build vs. buy” debates in M&A.


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Rob Schram


Corum Group Ltd.

Rob has over 30 years of executive and entrepreneurial experience in multiple

technologies: Integrated circuit testing, industrial process automation and control,

communications software, security software, and energy software and services.

Rob has founded and sold several companies and engaged in two IPOs. He was most

recently CEO of Evergreen Fuel Technologies, Inc. in the energy sector. Rob is a broadly

skilled strategic development professional with a proven reputation for targeting,

negotiating and developing profitable ventures and a demonstrated ability to successfully

analyze an organization's critical business requirements, identify deficiencies and

opportunities, and develop innovative and cost-effective solutions for enhancing

competitiveness, increasing revenues, and improving customer relationships.

Emerging platforms, standards & analytics

#2: IoT Software


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Emerging platforms, standards & analytics

#2: IoT Software

Internet of Things (IoT) growth brings us into its first full software cycle.

Each “Thing” needs platforms, communication, analytics, etc.

Competing platforms and associated ecosystems beginning to coalesce.

IoT software often, but not always, inextricably enmeshed with hardware.

Compatibility-driven, as in other cycles of disruption.


78

Daniel Bernstein

Vice President

Corum Group Ltd.

Daniel Bernstein has worked in a number of roles over a twenty year career in high

technology, most recently as the founder and CEO of Sandlot Games Corporation, a

leading casual games publisher and developer. Having sold Sandlot Games to Digital

Chocolate in 2011, Daniel started a small games studio and a consulting practice where

he advises larger companies such as RealNetworks and smaller high growth businesses

on product development, strategic initiatives, and M&A opportunities.

Prior to Sandlot Games, Daniel Bernstein held director level positions in companies such

as Wild Tangent and Monolith. An accomplished composer, Daniel also writes music for

most of the games he works on.

Daniel holds a BS in Computer Science and an MA in Music Composition from the

University of Virginia.

Intersection of AI, computer vision & analytics

#3: Visual Intelligence Systems


79

Intersection of AI, computer vision & analytics

#3: Visual Intelligence Systems


Evolution of Positioning Intelligence beyond GPS required computer vision.

Drones and self-driving cars driving advanced vision tech with even larger implications.

Retail, security, energy, agriculture, advertising are all being impacted.

Companies creating practical solutions with this tech—especially utilizing analytics—are in high demand.

80

Rob Griggs

Vice President

Corum Group Ltd.

As a serial entrepreneur and investment banker, Rob Griggs has had a successful 35+

year career in the high technology arena. Early in his career he was a top performer at

Apple before starting his first software company in the mid-1980’s. As a founder of

Authorware / MacroMedia, NetRadio, Wit Capital, and many other companies, Rob’s

sales, marketing, business development and capital raising skills have been honed over

supporting hundreds of company financial transactions during his career.

His success and extensive experience in software M&A uniquely qualify him as an expert

in building value and realizing wealth. Rob joined Corum Group, the world’s leading

software M&A firm, with a specific focus on educating and helping prospective sellers

maximize the value of their technology companies.

Decreasing friction in payments & exchange

#4: Digital Currency Flow


81

Decreasing friction in payments & exchange

#4: Digital Currency Flow

Currency flow moving towards fewer barriers, reduced regulation and less friction on transactions globally.

Banks face competition from nimbler mobile and web point solutions.

Includes alternative currencies—from blockchain/bitcoin to in-game currencies to Starbucks payments.

Software & systems that speed or harness payment flow have significant potential.


82

Entertainment software entrepreneur Jim Perkins is directly responsible for publishing

some of the industry’s biggest franchises, including Unreal, Duke Nukem, Wolfenstein,

Doom, Hunting Unlimited, and Driver. A well-known senior executive with a 22-year

track record of publishing such bestselling hits, he founded and grew two highly

successful software publishing companies (FormGen and ARUSH) from start-ups to

multi-million dollar enterprises.

Jim also launched Radar Group, the first Transmedia Incubation Company to monetize

entertainment franchises across all media, including film and television. His success

and extensive experience in software production, marketing and public relations,

packaging, online and retail distribution and software M&A, uniquely qualify him as an

expert in building value and realizing wealth. Jim joined Corum Group, the world’s

leading software M&A firm, with a specific focus on educating and helping prospective

sellers maximize the value of their digital media companies.

Jim Perkins

Executive Vice President

Corum Group, Ltd.

Maximizing return with real-time analytics

#5: Data Science Monetization


83

Maximizing return with real-time analytics

#5: Data Science Monetization

In a world of freemium, free-to-play & declining ad effectiveness, turning users or viewers into dollars is a premium capability.

Robust analytic tools are no longer optional, especially for consumer-facing companies.

Gaming companies are leading the way, deriving value from their analytic capabilities as much as entertainment.

Video ads are close behind with opportunities in e-commerce, brick & mortar, B2B and beyond.


84

Ivan Ruzic, Ph.D.

Vice President

Corum Group Ltd.

Dr. Ivan Ruzic has had a successful 30+ year career in the software business that has

included virtually every senior executive role. His resume spans marquee companies

such as BEA systems, Novell and Borland as well as multiple startups including his

own. His international experience is extensive and in addition to the United States has

been involved in mergers and acquisitions in Europe, Africa and Asia.

His success and extensive experience qualify him as an expert in building value and

realizing wealth. Ivan joined Corum Group, the world’s leading software M&A firm, with

a specific focus on educating and helping prospective sellers maximize the value of

their technology companies.

Connecting Creators & Consumers

#6: Online Exchanges


85

Connecting creators & consumers

#6: Online Exchanges

Uber & others recharging the concept that created online commerce, putting unused capacity to work.

Not just connecting buyers & sellers, but creating previously non-existent opportunities on both sides.

Disruptive opportunities include:

Personalization

Real-time commerce

Financial disintermediation


86

Jeff Riley

Vice President

Corum Group Ltd.

Jeff has over 25 years of large and small company experience in the technology

industry, focusing on enterprise software and IT services across a broad variety of

vertical industries and geographies.

In 2004, Jeff became CEO of Dinerware, a small restaurant software startup based

in Seattle. Under his leadership Dinerware grew rapidly, receiving numerous

industry awards along the way. After being listed on the Inc 5000 list of fastest

growing private companies for four years in a row, he led the successful sale of the

company to Heartland Payment Systems which was later acquired by Global

Payments.

The first half of Jeff’s career was spent in product management and business

development for new products and capabilities within large technology companies

including Digital Equipment, RR Donnelley, and Microsoft. While at Microsoft, Jeff

launched Microsoft’s first secure commerce website in 1997, managed Microsoft

Business Solutions SMB sales and marketing, and served as integration lead for the

Great Plains acquisition before being promoted to GM of Retail Business Solutions

within Dynamics.

He graduated from Babson College with a B.S. in Business Administration majoring

in Management Information Systems.

Purchasing decisions anywhere, any platform

#7: Omni-Channel Sales


87

Purchasing decisions anywhere, any platform

#7: Omni-Channel Sales

Consumer platforms & devices continually fragmenting.

Marketing keeping pace – next challenge is sales, both decision points and actual purchase.

Point at which money changes to product must be immediately with customer, moving closer by being on their favorite device.

Persuasion must move there as well, taking new forms as it does.

Consumer brands leading the way, but enterprise is not far off.


88

David Levine

Vice President

Corum Group Ltd.

Dave joined Corum in 2015 and has a diverse background in technology and life

sciences. As an executive and entrepreneur, Dave has been operating and investing

in companies sitting at the convergence of commerce and eCommerce as well as

innovative life science businesses for over twenty-five years. Recently, Dave was

CEO North America for Gaxsys, an eCommerce and logistics company that is a

leader in last mile logistics and fulfillment for eCommerce marketplaces.

Dave has been on both sides of the mergers and acquisitions table having sold a life

science technology company, facilitated sell side and buy side technology transactions

and has also scaled multiple technology companies globally in the eCommerce, life

sciences and innovation intelligence markets. Dave sits on boards of public and

private companies including one company that recently filed for an IPO.

Dave holds a business degree from the Indiana University, Kelley School of Business.

Linking people to their health data & services

#8: Connected Health


89

Linking people to their health data & services

#8: Connected Health

Technological, regulatory and demographic changes converging to create significant opportunity.

Leveraging new tech: smartphones, trackers, connected medical devices, genomics, remote monitoring.

Improved self-care and remote care/diagnosis.

Makes healthcare more patient-centric by enabling healthcare consumerism.


90

Steve joined Corum after 25 years of executive experience in various high-tech

industries with both public and private venture-backed startups. He has extensive

global experience, opening international markets and growing sales from zero to

tens of million in revenue. He has been on the forefront of selling several companies

and spinning off software divisions, highlighted by the sale of GetFon to Alestra

(AT&T Mexico). He is fluent in Spanish.

Steve was the founding CEO of Solera Networks, a real-time intrusion detection

security company. He also co-founded Auction Trust Network, an eCommerce

company for online exchanges; which he sold to MediaForge (Rakuten Marketing).

Steve is a board member of several software companies and has industry expertise

in several areas: enterprise apps and infrastructure, security, mobile and wireless,

media & entertainment, supply chain, and embedded devices/systems (IoT).Steve Jones

Vice President

Corum Group Ltd.

Differentiation drives new value in a sleepy sector

#9: Focused IT Services


91

Differentiation drives new value in a sleepy sector

#9: Focused IT Services

New and more pervasive technologies creating new needs for maintenance, extension and utilization.

Teams that provide customer value around a specific technology, sector or problem are seeing increased value.

Buyers seeing more value in purpose-built IP emerging out of services firms.

Services on the edge of key trends seeing particular interest.


92

Jon joined Corum in 2010 out of their Seattle headquarters and is now based in

Amsterdam. He has close to 30 years experience serving high technology companies

with the last 20 mainly in chief operating and chief executive roles. During this time Jon

has become known for his ability to successfully integrate strategies and tactics into well

executed operating plans, building strong teams and achieving excellent results.

Jon has served as President and CEO of The PowerTech Group, a security and

compliance software company sold to Help/Systems in 2008, and Microserv Technology

Services, a nationwide tech services company which was acquired by Halifax Corporation

in 2003. Earlier he served as President and COO of Traveling Software, a leading

developer of communications software in Seattle. Prior to his operating roles Jon held

vice president roles in sales, marketing and business development for technology

companies.

Jon has taught in the software product management program at the University of

Washington and holds a business administration degree from San Francisco State

University.

Jon Scott

Managing Director

Corum Group

International

Building barriers in an age of blurred lines

#10: Data Security


93

Building barriers in an age of blurred lines

#10: Data Security

New technologies creating new risks from freer flowing data.

High impact breaches (DNC, Yahoo, Dyn DNS, Oracle Micros) drive broad recognition of security needs.

Key trends include security analytics, rapid detection & in-process threat response.

Internet of Things opening a new front in this fight – the Dyn DDoS attach came from infected IoT devices.


94

Upcoming Conference ScheduleSelling Up Selling Out (SUSO) - Ready to go to market? During this half-day workshop, learn to prepare, position,

research, value, negotiate, and execute due diligence for maximum price and structure. This is the most attended Tech M&A

event ever – participants have done over $1 trillion in transaction value.

Merge Briefing (MB) - The Merge Briefing is a 90-minute executive briefing providing a current M&A market update (trends,

valuations, etc.), as well as a brief overview of the Tech M&A process: “8 Steps To An Optimal Outcome.”

www.CorumGroup.com/Events

Aug. 1: Lehi – MB

Aug. 3: Omaha – MB

Sep. 27: London – MB

Sep. 28: Dublin – MB

Oct. 12: Helsinki – SUSO

Oct. 25: Munich– SUSO

Oct. 26: Berlin– SUSO

Stockholm Dallas

Victoria B.C. Austin

Seattle Houston

Additional events upcoming in…

95

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Tech M&A Monthly: 2017 Midyear Report

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Transcript of Tech M&A Monthly: 2017 Midyear Report