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

July 2015

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

Software Industry Landscape

Internet Software Online Services

Systems Software Application Software IT services


Hardware Industry Landscape

Communications Equipment Electronic Equipment, Instruments & Components

Technology Hardware, Storage& Peripherals

Semiconductors &Semiconductor Equipment

Technology Distributors


CONTENTS

Technology Trends 9

Software Sector M&A Overview 27

Stock Market Performance 61

Executive Summary 5

Hardware Sector M&A Overview 44


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

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

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

Global wearable technology shipments, including fitness devices, is expected to reach 126.1 Mn in 2019 from 19.6 Mn in 2014 Smart homes market is estimated to be the largest market within smart cities, constituting 26.6% share in 2017; sales to expand at 26.9% CAGR over 2012–

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

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

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

Executive Summary

Technology Trends

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

Enterprises seeking technology innovations to reduce business vulnerability and threats from emerging finance solutions are likely to increase M&A activities The need to establish presence in the sector and the growing demand for smart mobility with decline in hardware costs to drive deal activity in IoT sector Consolidation among players, omni-channel capabilities and need to build supply chain to drive M&A in e-commerce space in 2015 In 2015, M&A activity in semiconductor sector continues to be fuelled by shift from PCs to mobiles, new technologies that improve connectivity and

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

Technology Industry Outlook


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

Global mid-market deal volume and value surge in Q1 2015 after a subdued previous quarter; US mid-market deal value driven by few major deals in Q12015

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

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

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

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

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

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

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

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

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

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

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

Executive Summary

Software Industry: M&A Activity


Executive Summary

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

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

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

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

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

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

M&A activity in the US was led by electronic equipment, instruments and components, and communications equipment sub-sectors in US, accounting for over64% of deal volume in Q1 2015

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

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

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

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

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

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

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

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

Hardware Industry: M&A Activity


CONTENTS

Technology Trends 9

Software Industry M&A Overview 27


Executive Summary 5

Hardware Industry M&A Overview 44


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

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

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

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

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

Source: eMarketer

120.0

145.0

171.0

198.0

225.0

253.0

23.1%

26.6%

29.6%

32.2%34.5%

36.6%

2013 2014 2015E 2016E 2017E 2018E

Digital ad spending % of total media ad spending

19.2

42.6

68.7

101.4

133.7

166.6

16.0%

29.4%

40.2%

51.2%

59.4%

65.9%

2013 2014 2015E 2016E 2017E 2018E

Mobile Internet ad spending % of digital ad spending


US Digital Advertising Spending (US$ Bn)

32.4 31.6 29.9 26.6 25.0 25.2

10.719.2

28.740.5

49.857.8

24.8%

37.8%

49.0%

60.4%

66.6%69.7%

2013 2014 2015E 2016E 2017E 2018E

Desktop Mobile Mobile as a % of total

US Digital Video Advertising Spending (US$ Bn)

3.14.3

5.2 5.7 6.26.90.7

1.5

2.6

3.9

5.1

6.0

8.9%

11.5%

13.3%14.3%

15.0%

15.5%

2013 2014 2015E 2016E 2017E 2018E

Desktop Mobile Video as % of digital spending

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

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

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

Source: eMarketer; WCP Analysis


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

Digital Ad Tech: Key M&A Transactions

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

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

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

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

Source: Capital-IQ; WCP Analysis

Digital Ad Tech: M&A Outlook

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

May-15 Shift Labs Brand Networks 50 NA Provides real-time marketing platform for advertisers

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

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

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

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

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

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

Mar-15 Yieldex AppNexus 100 NA Cross-channel revenue and inventory management platform

Feb-15 SocialMoov Marin Software 18.8 NA Provides platform for social advertising

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

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


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

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

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

Cyber Security: Increase in data breaches leads to spending increases

Source: Ponemon Institute; MarketsandMarkets

188

210

177

143

131

120

131

52

37

201

195

183

158

141

127

135

70

51

217

211

186

163

146

135

133

78

56

US

Germany

France

UK

Italy

Japan

Australia

Brazil

India

2013 2014 2015E

0.9

14.0

2000 2016E

95.6105.4

116.2

128.1

141.3

155.7

2014 2015E 2016E 2017E 2018E 2019E

~14x increase CAGR: 10.2%


Cyber Security: Recent Transactions and Outlook

Cyber Security: Key M&A Transactions

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

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

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

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


Cyber Security: M&A Outlook


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

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

Jun-15 KnowledgeConsulting Group

ManTechInternational NA NA Provides cyber risk management, governance, operations, and

compliance services

May-15 Resolution1 Security General DynamicsFidelis NA NA Provides incident resolution solutions

May-15 Creative ComputingSolutions

Informationinnovators NA NA Cyber security and health-focused Solutions

Apr-15 Information SecuritySolutions

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

intelligence solutions


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

IoT devices are projected to contribute to ~50% of global connected devices by 2020 as a result of:• Low cost to add IoT capability to consumer products, due to reduced component costs• Increased demand for remote control, monitoring, and sensing functions

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

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

Source: IDC, Strategy Analytics

1.9

2.7

3.8

5.6

7.1

2013 2015E 2017E 2019E 2020E

0

5

10

15

20

25

30

35

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

PCs Smartphones TabletsInternet Media Devices Smart TVs Smart Home DevicesWearables IoT

49.9%

4.8%

14.5%

4.8%4.2%5.9%

12.8%

3.0%

CAGR: 20.4%

As a %of total


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

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

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

Global Wearables: Fitness devices to drive rapid growth

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

15 2027

3644

52

4

26

38

50

63

74

19

46

65

86

107

126

2014 2015E 2016E 2017E 2018E 2019E

Basic Smart

CAGR: 46.0%

19.6

126.1

17.7

101.4

1.6

6.75.6

0.1

5.1

0.2

7.3

2014 2019E

Wristwear Modular Clothing Eyewear and Earwear Other


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

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

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

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

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

Source: Deloitte University Press; Gartner

13.7

41.38.1

30.5

21.8

71.8

2012 2017E

Smarthome hardware Smarthome installation services and fees

CAGR: 26.9%

97.8 126.4 159.5206.2

354.6648.1294.2

586.1

1,067.0

237.2

298.9

371.0

252

304.9

371.1

19.9

33.4

57.3

2015E 2016E 2017E

Public Services Smart Comm. Buildings Smart Homes Transport Utilities Others


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

IoT: Key M&A Transactions


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

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

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

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

Social sports and fitness network

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

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

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

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

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

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


IoT: M&A Outlook


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

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

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

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

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

61.0

133.0

204.0

298.0

415.0

516.0

626.0

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

545.0638.0

752.0

882.0

1,024.0

1,179.0

1,346.0

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

CAGR: 16.3% CAGR: 47.4%


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

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

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

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

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

Source: eMarketer

225.3

263.3

304.1

347.3

392.5

440.4

491.5

5.2%5.8%

6.4%7.0%

7.6%8.2%

8.9%

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

Retail E-commerce Sales % of Retail Sales

24.8

42.1

57.8

76.4

98.1

114.5

132.7

0.6%

0.9%

1.2%

1.5%

1.9%

2.1%

2.4%

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

Retail M-commerce Sales % of Retail Sales


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

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


Jun-15 LightInTheBoxHolding

ZhejiangAokang Shoes 83.5 0.67x Online retail company

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

May-15 Hualian ElectricCommerce

China StrategicHoldings 258.1 NA Online shopping platform

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

Apr-15 Freecharge Snapdeal 400.0 NA Online mobile recharge provider

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

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

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

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

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


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


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

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

Asia-Pacific, the largest market, accounts for over 55% of the total semiconductor sales, and is projected to expand most rapidly at a CAGR of 6.6% over2012–17

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

Source: World Semiconductor Trade Statistics

163.0 174.4194.2 207.7 216.4 224.6

54.461.5

69.371.9 73.3 74.6

33.234.9

37.536.1

37.0 37.8

41.134.8

34.831.5

32.132.6

2012 2013 2014 2015E 2016E 2017E

Asia Pacific Americas Europe Japan

238.2 251.8277.3 285.8 295.3 303.9

26.227.6

29.9 32.433.5 34.7

19.118.2

20.220.4

21.021.6

8.08.0

8.58.7

9.19.5

2012 2013 2014E 2015E 2016E 2017E

Integrated Circuits Optoelectronics Discrete Semiconductors Sensors

291.6

335.8

305.6

369.6347.2

358.9


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

Semiconductor: Key M&A Transactions


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

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

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

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

semiconductor image-sensor devices

Mar-15 FreescaleSemiconductor

NXPSemiconductor 17,297.2 3.58x The company manufactures embedded processors

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

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

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

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

Chinese companies and investment groups becoming more active as potential buyers


Semiconductor: M&A Outlook


HR Technology: Social sourcing in recruitment and demand for analytics expected todrive M&A activity

HR Technology: Key M&A Transactions

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

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

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

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

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

Source: Entrepreneur; Capital-IQ; WCP Analysis

HR Technology: M&A Outlook

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

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

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

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

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

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

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


Storage Market: Software-defined storage and infrastructure convergence for personaland enterprise data storage expected to drive M&A activity

Storage: Key M&A Transactions

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

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

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

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

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

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

Storage: M&A Outlook

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

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

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

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

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

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

software for enterprises

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


Industry Landscape of Technology Sub-sectors

Internet of Things Semiconductor Digital and Video Advertising

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


CONTENTS

Technology Trends 9



Executive Summary 5



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

Global & US: Deal Volume and Value

6.2 6.03.5 4.7 3.2 4.7 6.4 6.8

10.66.2 4.2 4.2

7.4 7.3

6.39.7

9.8 9.4

3.1

23.5 11.6 10.7

29.4

13.7 26.9

7.3

8.8 15.0

569 590 597553

512 512558 567 541

651

554508 496

385

286 275 297 302266 256 276 268

281 323 296

243 251191

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

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

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

US deal volume rose 3.3% QoQ but declined 10.7% YoY to 251 in Q1 2015. Aggregate deal value surged 19.3% QoQ but decreased 70.2% YoY to US$8.8 Bn inQ1 2015. Deal value in US for the first two months of Q2 2015 stood higher than Q1 2015 at US$15.0 Bn led by two large deals (AOL and Informatica Corp.)

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


Global: Deal Volume by Ticket Size

136 142 144121

109 117137 130

112137

99 10480 71

2834 28

2224

21

27 46

32

41

37 32

33

17

4

7 6

9

311

106

13

11

13 7

7

7

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

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

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

Deals below US$50 Mn dominate the M&A deal volume, with 80 transactions valued at US$1.2 Bn in Q1 2015. Average deal value stood at US$14.6 Mn in Q12015 compared to US$12.5 Mn in 2014’Q4 and US$12.0 Mn in Q1 2014

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

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

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

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

4.7 5.44.1 3.3 2.9 3.9 4.6

8.04.8

6.1 7.14.6 6.2

4.2

6.08.5

7.7 9.1

2.2

23.1

11.87.8

33.9

11.9

22.7

5.7

8.717.0

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


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


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

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

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

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

1.0

2.82.0

0.9 1.32.2 2.4

3.7

2.1

3.4

2.3 2.2

3.6

1.9

3.7

2.6

2.2

2.3 1.6

1.72.2

4.4

2.7

2.7 4.8

2.3

2.7

2.2

2834

2822 24 21

27

46

32

4137

32 33

171915 14 14 13 10 9

2418 18

2216 13

8

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




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

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

Mid-Market had 13 transactions valued at US$2.7 Bn in Q1 2015. Average deal value was US$204.3 Mn vs. US$145.2 Mn in Q4 2014 and US$204.3 Mn in Q12014.

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

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

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

3.7 2.6 2.2 2.3 1.6 1.7 2.24.4

2.7 2.7 4.82.3 2.7 2.2

1.96.3 7.0 6.3

1.0

21.3

8.7 5.8

26.1

10.0

21.5

4.55.6

12.4

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

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

4652 51 48

42 43

58

46 4859

39 3730

22

1915 14

14

13 10

924 18

18

2216

13

8

15 5

5

1 8

7 58

9

12

5

4

5

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




Global Software M&A Activity by Quarter

Global: Average Deal Size

12'Q1, $74.2 Mn

12'Q2, $86.1 Mn

12'Q3, $74.9 Mn

12'Q4, $92.4 Mn

13'Q1, $46.5 Mn

13'Q2, $189.4 Mn

13'Q3, $103.0 Mn

13'Q4, $96.4 Mn

14'Q1, $255.1 Mn

14'Q2, $105.5 Mn

14'Q3, $208.3 Mn

14'Q4, $80.9 Mn

15'Q1, $134.4 Mn

15'Q2*, $234.6 Mn

$0Mn

$50Mn

$100Mn

$150Mn

$200Mn

$250Mn

$300Mn

20 25 30 35 40 45 50 55 60

Aver

age

Dea

l Siz

e (U

S$ M

n)

Deal Volume (>USD50 Mn)

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

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

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


Global: Deal Volume by Sector

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

313 350 339 313 281 291322 336 322

386

329 318 314259

4240 37

38 46 3638 40 40

43

52 38 32

25

141148 161

139123 117

126 131108

146

122107 108

69

3927 33

3221 28

33 2627

27

2616 19

14

139 11

1412 19

10 719

19

12

14 11

10

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*Internet Software Online Services IT ServicesApplication Software Systems Software Multiple Sectors

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

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

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

Global M&A Activity by Software Sector

3.1

9.0

2.9 4.1 2.3

10.3 9.9 12.0

29.2

12.815.5

6.2 6.9

15.18.1

5.6

6.6 5.3

1.8

3.63.3

5.4

4.5

11.5

4.06.0

6.4

9.91.3

1.1 3.8 4.7

2.3

8.1

4.4 2.2

5.4

2.7

4.0

1.4

3.2

0.8

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

Online Services Application Software Systems Software Others



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

Online services represented over 60% of the transactions in Q1 2015 in US. Number of transactions totaled 158 in Q1 2015 vs 160 in Q4 2014 and 187 in Q12014. Application software, the second most active sector, had 61 transactions in Q1 2015 compared to 47 transactions in Q4 2014 and 51 deals in Q1 2014

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

US M&A Activity by Software Sub-Sector

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

170 165 176 176 147 158163 166 187 199 204

160 158136

1816

17 2423 14

20 1912

18 22

17 13

12

62 6774 73

5954

55 5151

7050

47 61

33

16 1616 16

1212

17 1513

1612

5 7

6

8 37 4

711

5 3 8

9

5

65

2

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

Internet Software Online Services IT ServicesApplication Software Systems Software Multiple Sectors

2.31.25.2

2.6 1.1

7.64.9

7.4

22.5

8.6

14.1

4.5 3.0

9.14.4

4.1

5.53.2

1.2

3.01.9

4.7

3.4

10.5

2.0 5.1

5.49.4

0.7

0.4 1.93.6

0.9

6.5

3.6 1.5

2.2

1.6

2.3

0.90.7

0.6

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

Internet Software Online Services Application Software Systems Software Others

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


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

Strategic buyers accounted for over 95% of the transactions, and 459 inQ1 2015 compared to 468 in Q4 2014 and 497 in Q1 2014

Financial buyers led only 22 M&A transactions in Q1 2015’Q1 vs. 23 in Q42014 and 29 in Q1 2014

Deal value for transactions led by strategic buyers rose to US$14.7 Bn inQ1 2015 from US$8.7 Bn in Q4 2014 but declined compared to US$31.6Bn in Q1 2014

Financial buyers accounted for US$1.3 Bn in Q1 2015 vs. US$2.4 Bn inQ4 2014 and US$8.4 Bn in Q1 2014

Strategic Buyers Dominating Global Software M&A Activity

521 540 534 500462 474 497 516 497

599

497 468 459

357

2835 25

3427 25

33 2629

34

4023 22

16

1 11 2 1

3

11 2

1

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

Strategic Buyer Financial Buyer Both

8.811.2 11.6 11.7

5.1

17.712.1

14.7

31.6

13.7

22.8

8.7

14.712.2

3.73.5 1.6 2.2

1.2

10.6

5.8 2.3

8.4

6.2

8.2

2.4

1.39.91.1

0.1

0.4

0.5

0.1

0.2

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


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


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

Strategic Buyers Dominating US Software M&A Activity

273 256 269 281247 240 251 250 263

296263

223 236

178

915

1117

12 1317 12

12

20

28

1110

8

1 1

3

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


5.97.9 8.6 7.2

3.1

13.7

7.310.7

28.4

8.0

18.7

5.08.2 9.70.3

1.8 1.1 2.2

0.1

9.8

4.30.1

1.1

5.7

8.2

2.3

0.6

5.40.1

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


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

Strategic buyers also represented over 95% of the transactions, and wereinvolved in 236 transactions in Q1 2015 compared to 223 in Q4 2014 and263 in Q1 2014

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

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

Deal value for transactions led by financial buyers was US$600 Mn in Q12015 vs US$D2.3 Bn in Q4 2014 and US$1.1 Bn in Q1 2014


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

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

316 309 328 322 292 285 296 291 300347 317

274 270203

177 186184

156145 153 162 177 170

190

150

145 136

104

55 69 6257

53 5571 74 45

74

62

64 64

58

13 12 1410

13 815 16

12

25

12

7 12

9

8 14 98

9 1114 9

14

15

13

18 14

11

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

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

6.311.1 10.2 10.0

3.2

24.8

11.9 11.0

29.4

13.8

27.0

7.4 8.9

15.03.2

3.22.3 2.4

1.6

2.0

2.8 4.5

8.9

4.7

2.6

2.54.6

4.9

2.8

0.90.7 0.8

1.4

1.2

3.0 1.8

1.2

1.0

1.3

1.3

2.3

1.6

0.10.4

0.1

0.1

0.1

0.20.1

0.10.1 0.8

0.1

0.1

0.2 0.2

0.4

0.3

0.3

0.4

0.4

0.6

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


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

Europe is the second most active market, with 136 transactions in Q12015

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

Europe remained the second largest market with transactions worthUS$4.6 Bn in Q1 2015

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


Global: Average EV/ Revenue Multiple and TTM Revenue

2.5x

3.2x

2.4x2.6x

2.3x

3.7x

2.6x

3.3x

2.8x

3.5x

4.0x

3.5x 3.4x3.0x

45.3 33.155.7 53.1

22.3

286.9

57.540.5

69.147.3

88.1

50.0 41.3

116.2

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

EV/ Revenue Multiple Average TTM Revenue (USD Mn)

US: Average EV / Revenue Multiple and TTM Revenue

3.2x

2.4x

4.1x

3.2x 3.1x

4.3x

3.7x

5.4x

3.9x

4.5x

5.0x

4.5x 4.6x

2.7x

41.1 73.4115.6 115.4

40.9

258.2

137.851.5

126.658.5

158.474.1

112.1

361.6

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


Average EV / Revenue multiple was 3.4x in Q1 2015 compared to 3.5x inQ4 2014 and 2.8x in Q1 2014

Average revenue of the acquired company decreased to US$41.3 Mn inQ1 2015 from US$50.0 Mn in Q4 2014 and US$69.1 Mn in Q1 2014

Average EV / Revenue multiple increased to 4.6x in Q1 2015 from 4.5x inQ4 2014 and 3.9x in Q1 2014

Average revenue of an acquired company rose to US$112.1 Mn in Q12015 from US$74.1 Mn in Q4 2014, but decreased compared toUS$126.6 Mn in Q1 2014

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



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

Average EV / EBITDA multiple rose to 16.7x in Q1 2015 from 15.9x in Q42014 and 11.0x in Q1 2014

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

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

Average EBITDA of the acquired company surged to US$29.5 Mn in Q12015 from US$9.5 Mn in Q4 2014 and US$13.3 Mn in Q1 2014

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

17.9x

14.4x 13.8x12.4x 11.7x 11.8x

17.7x

15.1x

11.0x

26.4x

15.7x 15.9x16.7x 16.0x

8.4 13.2 13.5 22.24.1

48.6

10.1 12.0 17.1 16.2 24.98.4 16.3

38.3

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

EV/ EBITDA Multiple Average TTM EBITDA (USD Mn)

24.5x

7.3x

19.4x

16.2x

13.5x 13.2x

27.5x

20.9x

10.9x

34.8x

15.3x17.3x

25.5x

20.6x

4.2 26.2 23.6 39.7 4.792.2

15.3 7.1 13.3 12.3 35.3 9.5 29.570.4

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




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

Global: Cross-Border M&A

Cross-border M&A activity remained buoyant in 2014, registering 618 deals compared to 506 deals in 2013. Deal value for disclosed deals totaled US$24.1 Bn in2014 vs. US$15.3 Bn in 2013

Cross-border M&A deal volume stood at 121 in Q1 2015 compared to 155 in Q4 2014 and 143 in Q1 2014. Deal value for disclosed deals totaled US$5.1 Bn in2015’Q1 vs US$3.5 Bn in Q4 2014 and US$7.6 Bn in Q1 2014


4.96.1

2.74.0

2.23.5 3.9

5.7

7.6

4.4

8.7

3.55.1

11.7

128

164

152

113 114125

142

125

143

171

149155

121112

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

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


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

US: Inbound and Outbound Deals

US inbound M&A deal volume was 163 in 2014 compared to 125 in 2013. US outbound M&A activity remained robust in 2014, registering 224 deals compared to188 deals in 2013.

US inbound M&A was 28 in Q1 2015 compared to 36 in Q4 2014 and Q1 2014. Deal value for disclosed deals rose to US$2.7 Bn in Q1 2015 from US$0.9 Bn inQ4 2014 and US$1.8 Bn in Q1 2014. Outbound deals totaled 48 in Q1 2015 compared to 59 in Q4 2014 and 49 in Q1 2014. Deal value for disclosed dealstotaled US$ 400 Mn in Q1 2015 vs US$1.6 Bn in Q4 2014 and US$2.2 Bn in Q1 2014.


0.7 0.90.3

1.7

0.21.2

1.9 1.4 1.80.4

6.1

0.9

2.7

5.5

2.63.3

1.5

1.8

0.6

1.41.0

2.9 2.2

2.8

1.1

1.6

0.4

4.730

3742

35 36

25

3529

3641

50

3628

30

58 59 62

3442

4652

48 49

68

48

59

4841

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

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


Notable Transactions in Software Industry

2012

2013

2014

2015YTD

Internet Software Online Services IT Services Application Software Systems Software

(USD2.4 Bn; NA)

(USD125.0 Mn; NA)

(USD324.0 Mn; NA)

(USD155.0 Mn; NA)

(USD205.7 Mn; 2.0x)

(USD200.0 Mn; NA)

(USD62.1 Mn; NA)

(USD28.0 Mn; 2.7x)

(USD1.6 Bn; 3.4x)

(USD1.2 Bn; NA)

(USD2.6 Bn; 8.0x)

(USD2.0 Bn; NA)

(USD19.7 Bn; NA)

(USD3.3 Bn; 14.8x)

(USD4.8 Bn; 1.7x)

(USD4.1 Bn; 7.6x)

(USD0.9 Bn; 1.5x)

(USD0.8 Bn; 5.4x)

(USD4.1 Bn; 2.1x)

(USD0.6 Bn; NA)

(USD1.1 Bn; 2.7x)

(USD1.0 Bn; NA)

(USD1.8 Bn; 1.7x)

(USD0.4 Bn; 5.7x)

(USD2.7 Bn; 2.7x)

(USD2.1 Bn; 3.2x)

(USD1.0 Bn; NA)

(USD1.0 Bn; NA)

(USD4.7 Bn; 3.9x)

(USD2.4 Bn; 2.9x)

(USD5.3 Bn; 4.6x)

(USD2.6 Bn; 6.4x)

Open Solutions LLC

(USD1.0 Bn; 5.0x)

(USD171.5 Mn; 4.5x)

(USD8.4 Bn; 3.1x)

(USD2.4 Bn; 8.9x)

(USD0.8 Bn; 8.1x)

(USD0.4 Bn; NA)

(USD0.5 Bn; NA)

(USD0.2 Bn; NA)

and others

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


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

Most Active Buyers by Number of Deals (Since 2012)

3027

2220 20 20

1816 16 16 15

Yahoo Google Twitter IBM Oracle Trimble Cisco Dropbox Facebook Vista EquityPartners*

Microsoft

Source: Capital-IQ; * Financial Buyer


CONTENTS

Technology Trends 9



Executive Summary 5



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

Global & US: Deal Volume and Value

15.28.5 9.3 5.4 4.3

11.1 8.2 7.3 4.4 8.1 5.3 9.8 10.6

40.03.94.9 3.0 10.3

31.23.8 11.0 10.3

7.7

16.29.4

10.9

34.7

59.4

295 262 276 261228 229 217

245281 270 255 267 288

209

97 95 93 90 91 85 83 77

119

92 94 90 10671

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


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

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

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


Global: Deal Volume by Ticket Size

83 8297

8368

78 7587 81

72 67 64 69

51

2236

25

28

21

20 21

22 30

2725 29

26

24

7

6 3

8

4

6 5

5 5

12

7 712

11

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


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

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

The mid-market witnessed 26 transactions at USD4.3 Bn in 2015’Q1. The average deal value was USD166.4 Mn in 2015’Q1, compared with USD179.1 Mn in2014’Q4 and USD144.4 Mn in 2014’Q1

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

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

1.0 0.9 1.2 1.2 0.7 0.8 0.7 0.8 1.0 0.9 0.7 0.8 0.9 0.73.7 6.0 4.3 3.6 2.7 4.0 4.3 4.1 4.3

6.93.8 5.2 4.3 3.3

14.46.5

6.810.9

32.0

10.114.1 12.7

33.9

16.5

10.3

14.7

40.095.4

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




Global Hardware M&A Trends: Mid-market deal volume and value generally flat since2012

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

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

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

1.7

3.8

2.5 2.2 1.9 2.1 2.2 1.82.7

3.1

2.0

3.3 3.22.4

2.0

2.2

1.8

1.4

0.8

1.92.2

2.3

1.7

3.8

1.8

1.91.1

0.9

22

36

25 2821 20 21 22

30 2725

29 26 24

12 148 10

6 9 9 10 13 1510 9

5 7

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




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

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

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

The deal value for large deals (>US$500 Mn) totaled US$33.2 Bn from nine transactions, with an average deal value of US$3.7 Bn in Q1 2015

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

0.3 0.3 0.4 0.5 0.2 0.3 0.3 0.2 0.5 0.3 0.1 0.3 0.4 0.22.0 2.2 1.8 1.4 0.8

1.9 2.2 2.3 1.7 3.8 1.8 1.9 1.1 0.91.6 2.4

0.9

8.4

30.2

1.6

8.5 7.75.6

12.1

7.68.7

33.2

58.3

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

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

2225 27 25 23 24 24

21

36

1813

19 21

12

12

14 8 10

69 9

10

13

15

10

9 5

7

2

3

16

2

2 32

3

7

5

3 9

5

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




Global Hardware M&A Activity by Quarter

Global: Average Deal Size

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

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

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

12'Q1, $170.4 Mn

12'Q2, $107.9 Mn

12'Q3, $98.3 Mn

12'Q4, $131.5 Mn

13'Q1, $381.7 Mn

13'Q2, $143.4 Mn

13'Q3, $189.6 Mn13'Q4, $154.3 Mn

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

14'Q3, $149.1 Mn

14'Q4, $207.3 Mn

15'Q1, $423.4 Mn

15'Q2*, $1,155.2 Mn

-$200Mn

$0Mn

$200Mn

$400Mn

$600Mn

$800Mn

$1000Mn

$1200Mn

$1400Mn

23 28 33 38 43

Aver

age

Dea

l Siz

e (U

S$ M

n)

Deal Volume (>USD50 Mn)


Global: Deal Volume by Sub-Sector

6135

54 38 47 32 36 52 42 37 43 45 49 39

126

134113

116 99

88 90

100144

106111 118 120

92

1318 14

16 16

19 15

13

17

31 15 13 17

9

4033 29 44

2139 35

36

31

43 3842

42

31

55

42 66 47

45 51 41

44

4753

4849

60

38

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

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

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

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

Global Hardware M&A Activity by Sub-Sector

13.6

6.92.8

6.2 4.7 6.2

14.428.8

3.2

8.1 8.4

8.4

4.37.1

4.1

29.2

1.6

7.6

3.8 2.78.5

4.1

6.06.9

8.2

23.2

61.8

2.2

2.3

3.7 2.64.9

3.5

3.8

4.64.8

3.3

11.1

3.8

6.3

7.7

8.7

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*Rest Technology DistributorsSemiconductors & Semiconductor Equipment Technology Hardware, Storage & PeripheralsElectronic Equipment, Instruments & Components Communications Equipment



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

Electronic equipment, instruments and components represented more than 41% of the transactions in Q1 2015 in US. Number of transactions totaled 44 in Q12015 vs. 35 in Q4 2014 and 64 in Q1 2014. Communications equipment, the second most active sub-sector, had 24 transactions in Q1 2015 compared to 16transactions in Q4 2014 and 21 deals in Q1 2014

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

Global Hardware M&A Activity by Sub-Sector

2316 21

1322

15 1225 21

919 16

2417

40 5235 45

42

3433

35

64

42

4135

44

28

46

8 35

115

4

4

127

9

8

2

1613

11 156

15

17

6

15

1416

15

14

12

14 818 14 16 10

16 7

15

1511

15

16

12

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

2.44.1

2.2 2.6 3.34.7

14.2

2.9 2.1

7.46.0

3.2

3.4

0.4

28.2

1.1

1.4 4.8

0.81.4

0.9

3.1 7.13.2

5.9

19.3

58.6

0.70.6

0.9

3.1

0.7

0.7

2.10.5

1.2

5.3

0.42.8

1.2

0.4

12'Q1 12'Q2 12'Q3 12'Q4 13'Q1 13'Q2 13'Q3 13'Q4 14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2*Others Technology DistributorsSemiconductors & Semiconductor Equipment Technology Hardware, Storage & PeripheralsElectronic Equipment, Instruments & Components Communications Equipment



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

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

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

The deal value for transactions by strategic buyers rose to US$33.0 Bn inQ1 2015, from US$15.4 Bn in Q4 2014 and US$10.8 Bn in Q1 2014

Financial buyers accounted for US$11.6 Bn in Q1 2015, representing asignificant increase from US$5.0 Bn in Q4 2014 and US$0.3 Bn in Q12014

Strategic Buyers Dominating Global Hardware M&A Activity

265

221246

220201 199 190

221243 236 228 228

248

178

14

21

16

22

13 1711

11

1411

12 16

23

20

1

1

43 2

1

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


18.412.2 11.5

14.9

7.2 8.5

18.616.0

10.8

23.1

12.9 15.4

33.0

94.2

0.7

1.2 0.8

0.5

28.1

6.2

0.51.6

0.3

1.8

5.0

11.6

4.0

0.7

0.90.1

0.7

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


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


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

Strategic Buyers Dominating US Hardware M&A Activity

89 84 83 79 84 79 74 69

113

83 86 8293

59

79 6 9

74

54

3

56

5

9

10

1 1

1

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


3.4 4.42.3

9.9

3.0 3.6

10.68.8 7.7

15.3

7.7 7.0

25.8

57.2

0.60.6

0.7

0.4 28.1

0.3

0.4

1.50.04 1.7 3.9

8.2

2.2

0.9

0.7

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


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

Strategic buyers accounted for over 90% of M&A transactions in the US:93 transactions in Q1 2015, compared with 82 in Q4 2014 and 113 in Q12014

Financial buyers led nine M&A transactions in Q1 2015, vs five in Q42014 and three in Q1 2014

The deal value for transactions led by strategic buyers increased toUS$25.8 Bn in Q1 2015, from US$7.0 Bn in Q4 2014 and US$7.7 Bn inQ1 2014

The deal value for transactions led by financial buyers was US$8.2 Bn inQ1 2015, vs US$3.9 Bn in Q4 2014 and US$41.0 Mn in Q1 2014


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

Hardware Deal Activity by Region

115 106 104 98 102 91 88 91126

103 100 102120

75

112103 98 94 77

80 73 84

8696

70 80

93

73

5344 60

5342 47

5057

5659

7173

61

57

4

5 27

5 4 2

5

5 109

68

4

11

4 129

2 74

8

8 25

66

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


4.9 5.53.1

10.431.3

4.2

11.0 10.87.7

16.8

9.4 11.1 35.0

59.4

2.14.6

1.9

0.80.4

8.2

6.5

0.9

1.7

1.6

0.6

3.6 7.6

28.1

11.91.3

7.1

3.63.4

2.4

1.6

5.0

2.6

5.3

2.5

4.72.2

11.7

0.01

0.9 0.2

0.50.3

0.02

0.10.8

0.1

0.6

0.3

0.02 0.1

0.1

0.1

1.1 0.1

0.30.01

0.01

0.0050.1

0.02

0.001

2.0

1.3 0.4

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


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

Europe was the second most active market, with 93 transactions in Q12015

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

Europe, with transactions worth US$7.6 Bn, remained the second largestmarket in Q1 2015



Global: Average EV/ Revenue Multiple and TTM Revenue

1.5x

1.3x 1.3x

1.6x1.4x

1.5x 1.5x

2.1x

2.7x

1.8x

2.2x 2.2x

1.8x2.0x

53.2186.0 261.3 171.0

1,117.3

286.9

606.0

174.5 67.7 102.8 100.0163.2 235.3

568.6

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


US: Average EV/ Revenue Multiple and TTM Revenue

1.8x1.6x

2.7x

2.1x

1.4x1.6x

1.5x

2.9x3.1x

2.0x 2.1x

3.0x

1.9x 2.0x

69.9 95.5 360.0 305.9

4,388.6

146.7 389.1 223.3 91.9 155.0 280.4 178.6463.8 929.2

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


The average EV/Revenue multiple was 1.8x in Q1 2015, compared with2.2x in Q4 2014 and 2.7x in Q1 2014

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

The average EV/Revenue multiple decreased to 1.9x in Q1 2015, from3.0x in Q4 2014 and 3.1x in Q1 2014

The acquired company’s average revenue surged to US$463.8 Mn in Q12015, from US$178.6 Mn in Q4 2014 and US$91.9 Mn in Q1 2014

Global and US Hardware M&A Revenue Multiples



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

The average EV/EBITDA multiple rose to 15.5x in Q1 2015 from 12.9x inQ4 2014 and 12.4x in Q1 2014

The acquired company’s average EBITDA rose to US$94.1 Mn in Q12015, vs US$38.4 Mn in Q4 2014 and US$13.5 Mn in Q1 2014

The average EV/EBITDA multiple decreased to 16.4x in Q1 2015, from17.8x in Q4 2014 and 16.9x in Q1 2014

The acquired company’s average EBITDA surged to US$143.1 Mn in Q12015, from US$31.0 Mn in Q4 2014 and US$20.6 Mn in Q1 2014

Global and US Hardware M&A EBITDA Multiples

16.7x

12.2x

9.9x11.1x

7.9x8.7x

10.3x

11.9x 12.4x13.8x

9.9x

12.9x

15.5x

17.4x

6.872.4 54.2 8.9

342.0

21.8 49.6128.5

13.5 34.4 44.0 38.4 94.1193.1

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


17.8x

13.4x12.5x

25.4x

5.5x

9.1x12.1x

20.4x

16.9x

14.5x

9.3x

17.8x16.4x

18.4x

(1.5) 11.7 17.6 22.5

947.7

8.8 113.2 39.0 20.6 51.2 65.9 31.0 143.1 275.2

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




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

Global: Cross-Border M&A Deals

Cross-border M&A activity remained buoyant in 2014, registering 342 deals over 251 deals in 2013. The deal value for disclosed deals totaled US$31.1 Bn in2014, vs US$20.2 Bn in 2013

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


3.27.9 6.2 5.5 1.0 7.3 6.5 5.4 2.6 9.1 7.9 11.4

27.2

73.6

106

85

97

79

61 58 59

73 74

9489 85

97

74

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

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


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

US: Inbound and Outbound Deals

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

US inbound M&A activity was 19 in 2015’Q1, and similar to Q4 2014 (20). The deal value for disclosed deals rose to US$18.9 Bn in Q1 2015, from US$4.2 Bn inQ4 2014 and US$100 Mn in Q1 2014. Outbound deals totaled 31 in Q1 2015, compared to 16 in Q4 2014 and 14 in Q1 2014. The deal value for disclosed dealstotaled US$3.6 Bn in Q1 2015, vs US$1.2 Bn in Q4 2014 and US$1.0 Bn in Q1 2014


0.3 1.2 0.2 3.9 0.2 1.3 0.5 0.4 0.16.0 7.0

4.2

18.9

38.7

0.4 2.6 4.4

0.7

0.40.1 0.4 0.9 1.0

2.00.5

1.2

3.6

2.6

11 15 18 17 12 14 146

17 20 20 19 1916

3426

37

22 1811

19 2014

2329

16

31

18

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

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


Notable Transactions in Hardware Industry

2012

2013

2014

2015YTD

CommunicationsEquipment

Electronic Equipment andInstruments and

Components

Technology Hardware,Storage and Peripherals

Semiconductors andSemiconductor

EquipmentTechnology Distributors

(USD10.0 Bn; NA)

(USD2.5 Bn; 0.7x)

(USD5.0 Bn; 0.3x)

(USD2.0 Bn; 6.1x)

(USD3.9 Bn; 3.2x)

(USD2.8 Bn; NA)

(USD23.1 Bn; 1.2x)

(USD5.1 Bn; NA)

(USD2.9 Bn; 1.5x)

(USD1.0 Bn; 2.0x)

(USD7.2 Bn; 1.8x)

(USD4.0 Bn; NA)

(USD2.6 Bn; 3.1x)

(USD1.7 Bn; 3.9x)

(USD6.5 Bn; 6.0x)

(USD2.4 Bn; 4.1x)

(USD804.0 Mn; NA)

(USD710.7 Mn; 0.8x)

(USD28.1 Bn; 0.4x)

(USD685 Mn; NA)

(USD3.4 Bn; NA)

(USD1.3 Bn; 2.7x)

(USD336.6 Mn; NA)

(USD215.0 Mn; 3.6x)

(USD3.7 Bn; 0.6x)

(USD2.7 Bn; 4.2x)

(USD6.6 Bn; 2.5x)

(USD1.7 Bn; 1.7x)

(USD3.0 Bn; 2.2x)

(USD2.4 Bn; 7.1x)

(USD36.7 Bn; 4.0x)

(USD18.2 Bn; 8.3x)

(USD857.0 Mn; 0.2x)

(USD525.8 Mn; NA)

(USD1.4 Bn; 12.4x)

(USD401.5 Mn; 0.3x)

(USD506.1 Mn; NA)

(USD439.4 Mn; 0.2x)

(USD182.8 Mn; NA)

(USD137.7 Mn; 0.2x)

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

Memory Japan Technology

Focus MultimediaTechnology(Shanghai) Join-In (Holding)

PSI Systems

Electric Power ControlSystem & others

SAMT

Giovanna InvestmentHong Kong Limited

and Others


Most Active Hardware Acquirers: Intel, Ametek and Arrow Electronics

Most Active Buyers by Number of Deals (Since 2012)

12

10

7 7 76 6 6

5 5 5

Intel Ametek Arrow Electronics MicrochipTechnology

ABB ExclusiveNetworks SAS

SBACommunications

Lagercrantz Cansel SurveyEquipment

Google IHS Nigeria

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

CAD WorxWarehouse

NDS WestMicro System

Telecomtower assets

Nigeria andCameroon,Rwanda,

Zambia andCote d'Ivoire

Telecomtower assets


CONTENTS

Technology Trends 9



Executive Summary 5



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

Global Technology Market Performance

0

50

100

150

200

250

300

350

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

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

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

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

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

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

Source: Bloomberg

S&P US 500 InformationTechnology IndexS&P Global 1200 InformationTechnology IndexS&P 500 Index

S&P Global 1200 Index

0

10

20

30

40

50

60

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

Volatility: CBOE Volatility Index

Volatility falls belowhistorical average


Global: EV / Revenue Multiple

Global: EV / EBITDA Multiple

Global: Revenue (US$ per share)

Global: EBITDA (US$ per share)

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

1.6x 1.5x1.4x 1.5x

2.0x

2.3x 2.3x2.2x

1.6x 1.6x1.4x 1.5x

1.7x 1.7x1.9x 1.8x

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

839976 1,039 1,086

998 992 1,015 1,0671,195 1,247

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


10.8x

8.1x7.1x

8.0x9.2x 9.6x

8.9x8.3x

7.4x

9.4x8.8x

7.8x8.6x

9.8x 10.0x9.5x

2009 2010 2011 2012 2013 2014 2015E 2016E

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

125

183198 196

213234

263284

200228 239 237 242 239 239

261


Source: Bloomberg


US: EV / Revenue Multiple

US: EV / EBITDA Multiple

US: Revenue (US$ per share)

US: EBITDA (US$ per share)

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

2.4x2.2x

1.9x 2.0x

2.7x3.0x 3.0x 2.9x

1.7x 1.8x1.6x 1.7x

2.0x 2.1x 2.2x 2.1x

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

140 163 190 204 196 210 217 228

903 9391,019 1,064 1,099 1,144 1,129

1,200


10.9x

8.7x7.4x 7.6x

9.9x10.7x

9.5x8.8x

10.1x 9.7x8.4x 9.0x

10.7x11.6x 10.9x

10.0x

2009 2010 2011 2012 2013 2014 2015E 2016E

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

31 42 49 53 53 59 68 74

150173

194 200 208 212230

251


Source: Bloomberg

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The Information and opinions in this report have been prepared by Aranca Research and Woodside Capital Partners, LLC. Thisreport is published solely for information purposes, and is not to be construed as an offer to sell or the solicitation of an offer to buyany security in any state where such an offer or solicitation would be illegal. The information herein is based on sources that webelieve to be reliable but is not guaranteed by us and does not purport to be a complete statement or summary of the availabledata.