1.
Embedded
Specialized
Accomplished
Digital Media and Software
M&A and Private Placement Activity
Q2 2013
2.
Table of Contents
Section I
Summary Observations
Section II
M&A Activity
Section III
Private Placement Activity
Section IV
Trends & Outlook
Section V
Public Company Valuation Metrics
2
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
4.
Summary Observations
Global Digital Media deal activity has seen another quarter of declines while the Software sector has seen the
number of private placements grow
Despite a flurry of headlines highlighting large acquisitions made by buyers such as Yahoo! (Tumblr) or Google
(Waze), data on global Digital Media and Software M&A and Private Placement activity points to generally lower deal
activity relative to last year
Global Digital Media and Software M&A has now seen two consecutive quarters of declining deal activity and values
― Digital Media M&A declined quarter-over-quarter in Q2 2013 by 14.2% in terms of number of deals and by 26.6% in terms of
median deal value
― Software M&A declined quarter-over-quarter in Q2 2013 by 8.7% in terms of number of deals and by 8.8% in terms of median
deal value
Global Digital Media Private Placements have also seen two consecutive quarters of declining deal activity and size
― Declined quarter-over-quarter in Q2 2013 by 6.9% in terms of numbers of deals and by 19.5% in terms of median size of
round
Global Software Private Placements, however, have seen a strong increase in number of deals by 32.3% quarterover-quarter – while at the same time showing a decrease of nearly a third in terms of median round size
― These trends are consistent with what we see as a growing shift in VC interest away from B2C and Consumer Internet
investments and toward B2B and Software investments
― Anecdotal evidence points toward very healthy M&A and capital raise advisory activity at investment banks focused on the
Software sector
Source: Siemer & Associates’ proprietary research database
4
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
5.
Summary Observations (cont.)
Trends seem to indicate that capital is increasingly flowing into earlier stage startups, with fewer companies
making it to pre-IPO rounds; large strategic buyers increasingly opting to acquire at an earlier stage
Regarding smaller private placement deal sizes, we believe this is due to a combination of factors:
― Companies requiring less and less capital to start up in today’s environment
― Bifurcation of the market where more capital is flowing into earlier stage startups while fewer and fewer companies desire or
make it to the point of being able to raise a large, pre-IPO round
― Trends point toward large strategic buyers increasingly opting to acquire at an earlier stage in a company’s development –
both in Media and in Software
― In regards to software, there is a growing trend to see startups grow to $2 - $3 mm in revenue, prove out client adoption and
scalability of a desirable point solution or feature, and sell to one of the large strategics at that point before the company
becomes “expensive”
Channel checks with generalist M&A lawyers and private equity firms indicate that deal flow has been somewhat
weaker in Q1 and Q2 2013 relative to last year
― However, early stage tech-focused lawyers and venture capital firms seem to have remained “busy”
― There is a perception that there has been a lot of “market check” exploration by sellers and “sniffing around” by strategic
buyers which has not translated into completed deals per se – at least not yet
Source: Siemer & Associates’ proprietary research database
5
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
7.
Transaction and Valuation Overview by Sector
Global Digital Media M&A activity decreased in Q2 2013 by 14.2% and the median implied EV decreased by 26.6%
from Q1 2013. As for global Software M&A, transaction activity decreased by 8.7% while the median implied EV
decreased by 8.8% during the same period.
Global Digital Media M&A
Number of Transactions
$15
364
323
300
$11.5
277
$9.4
200
$10
$6.9
$7.2
$5
100
$5.1
0
500
Q3 2012
Q4 2012
Number of Transactions
Q1 2013
537
509
502
$15
446
$15.2
400
$12.1
300
407
$10.2
$11.7
$9.3
$10
200
$5
100
$0
Q2 2012
$20
0
Q2 2013
$0
Q2 2012
Median Implied EV
Median Implied EV (Disclosed Values in mm USD)
404
401
600
Median Implied EV (Disclosed Values in mm USD)
400
$20
Number of Transactions
500
Global Software M&A
Q3 2012
Q4 2012
Number of Transactions
Q1 2013
Q2 2013
Median Implied EV
Source: Capital IQ and Siemer & Associates’ proprietary research database
7
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
8.
M&A Multiples by Sector
Both Digital Media and Software EV / Revenue multiples increased during Q2, by 55.6% and 60.0%, respectively.
Digital Media EV / EBITDA multiples decreased by 25.9% over the prior quarter, while Software multiples
increased by 27.4%.
Global Digital Media M&A
Global Software M&A
15.0x
15.0x
12.5x
12.2x
Median Disclosed Multiples
Median Disclosed Multiples
11.0x
10.3x
10.0x
9.2x
8.1x
6.0x
5.0x
10.7x
10.0x
8.5x
8.4x
5.0x
1.4x
1.6x
Q2 2012
Q3 2012
2.0x
0.9x
0.0x
EV / Revenue
Q4 2012
Q1 2013
1.4x
1.4x
Q2 2013
1.9x
1.4x
1.0x
Q4 2012
Q1 2013
0.0x
Q2 2012
EV / EBITDA
Q3 2012
EV / Revenue
1.6x
Q2 2013
EV / EBITDA
Source: Capital IQ and Siemer & Associates’ proprietary research database
8
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
9.
Number of M&A Deals by Geographic Location
Global M&A across Digital Media and Software decreased 11.1% QoQ, with transaction volume decreasing 11.9%
and 5.6% across North America and Europe, respectively.
Number of Transactions
600
500
469
400
478
438
413
364
300
290
294
282
223
200
210
133
100
97
117
93
84
42
0
North America
Europe
Q2 2012
Q3 2012
Asia / Pacific
Q4 2012
Q1 2013
41
36
40
26
Other
Q2 2013
Source: Capital IQ and Siemer & Associates’ proprietary research database
9
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
10.
Number of Q2 2013 M&A Deals by Subsector
Q2 2013 deal concentration in Digital Media was led by Internet Media and eCommerce while Productivity
Software drove nearly 22.1% of Software M&A activity.
Digital Media
12
14
Software
45
87
120
69
119
90
46
18
64
Advertising
eCommerce
Misc. Software
Mobile
Gaming
Internet Media
Networking Software
Productivity Software
Mobile
Web / Domain Hosting Services
SaaS
Source: Capital IQ and Siemer & Associates’ proprietary research database
10
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
11.
Q2 2013 Global M&A Sector Overview & Highlights
Sector
Deal Metrics
Volume: 277
Select Notable Transactions
$1.1bn
$1.1bn
$632.0mm
$370.0mm
$193.7mm
$150.5mm
$94.3mm
$48.4mm
$44.8mm
$35.0mm
$8.4bn
$3.9bn
$2.4bn
$2.0bn
$611.6mm
$607.8mm
$600.0mm
$336.3mm
$322.4mm
$205.0mm
Value: $5.5bn
Digital Media
Mean EV: $84.6mm
Median EV: $6.9mm
Volume: 407
Value: $19.8bn
Software
Mean EV: $240.0mm
Median EV: $9.3mm
Volume: Includes total number of reported M&A transactions
Value: Includes aggregate implied EVs of all reported deals with publicly available information
Mean and Median: Includes publicly disclosed M&A implied EVs only
11
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
12.
Q2 2013 Leading Acquirers by Sector
Digital Media
Q2 2013 Acquisitions
2013 YTD Acquisition Total
12
6
6
3
6
3
2
2
5
4
Software
Q
Q2 2013 Acquisitions
2013 YTD Acquisition Total
5
4
5
3
2
2
2
4
4
4
Source: Capital IQ and Siemer & Associates’ proprietary research database
12
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
13.
M&A Deals by Buyer Type
Transactions by Strategic vs. Financial Buyers in the Digital Media and Software sectors
1000
51
Number of Transactions
800
42
51
852
859
862
39
730
600
30
615
400
200
0
Q2 2012
Q3 2012
Q4 2012
Strategic Buyer
Q1 2013
Q2 2013
Financial Buyer
Note: Includes total number of reported M&A transactions
Source: Capital IQ and Siemer & Associates’ proprietary research database
13
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
15.
Private Placement Overview and Valuation by Sector
Global Digital Media Private Placement (PP) activity decreased in Q2 2013 by 6.9% and the median implied
investment size decreased by 19.5% over Q1 2013. As for Software, transaction activity increased by 32.3%
while the median implied investment size decreased by 32.8% during the same period.
Global Digital Media Private Placement
1,400
Global Software Private Placement
$10
700
$10
$9.7
Number of Transactions
1,096
$6
859
$6.2
800
600
$4.7
$4
$4.1
400
$3.3
$2
200
0
$8
Q3 2012
Q4 2012
Number of Transactions
Q1 2013
500
400
$6.0
452
418
$6.4
470
423
$6
$5.8
300
$4
$3.9
200
$2
100
$0
Q2 2012
622
0
Q2 2013
$0
Q2 2012
Median Investment
Q3 2012
Q4 2012
Number of Transactions
Q1 2013
Median Implied Investment (Disclosed Values in mm USD)
$8
600
Median Implied Investment (Disclosed Values in mm USD)
1,202
1,000
800
1,280
Number of Transactions
$9.9
1,200
Q2 2013
Median Investment
Source: Capital IQ and Siemer & Associates’ proprietary research database
15
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
16.
Number of Private Placement Deals by Geographic Location
Global PP across Digital Media and Software increased 7.0% QoQ, with transaction volume increasing 1.8% in
North America and 14.1% in Europe.
Number of Transactions
1,200
1,000
1066
949
800
982
835
850
600
447
400
352
325
284
200
324
173
176
191
145
159
63
0
North America
Europe
Q2 2012
Q3 2012
Asia / Pacific
Q4 2012
Q1 2013
64
83
65
89
Other
Q2 2013
Source: Capital IQ and Siemer & Associates’ proprietary research database
16
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
17.
Number of Q2 2013 Private Placement Deals by Subsector
Q2 2013 PP activity in Digital Media was largely led by Internet Media, while Software-as-a-Service investments
drove over 28.8% of Software PP activity.
Digital Media
96
13
Software
85
179
194
167
49
390
98
98
53
Advertising
eCommerce
Gaming
Internet Media
Mobile
Web / Domain Hosting Services
Misc. Software
Mobile
Networking Software
Productivity Software
SaaS
Source: Capital IQ and Siemer & Associates’ proprietary research database
17
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
18.
Q2 2013 Global Private Placement Overview & Highlights
Sector
Deal Metrics
Volume: 800
Select Notable Investments
$250.0mm
$170.0mm
$130.8mm
$130.0mm
$100.0mm
$100.0mm
$83.2mm
$68.0mm
$64.4mm
$60.0mm
$60.0mm
$225.0mm
$105.1mm
$100.0mm
$70.0mm
$50.0mm
$50.0mm
$50.0mm
$45.0mm
$45.0mm
$38.0mm
Value: $3.5bn
Digital Media
Mean Size: $5.7mm
Median Size: $3.3mm
Volume: 622
Value: $3.1bn
Software
Mean Size: $5.4mm
Median Size: $3.9mm
Volume: Includes total number of reported PP transactions
Value: Includes aggregate implied Investments of all reported deals with publicly available information
Mean and Median: Includes publicly disclosed Private Placement investments only
18
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
19.
Q2 2013 Private Placement Deals by Investor Type
Investments by Strategic vs. Financial Investors in the Digital Media and Software sectors
1200
101
99
80
Number of Transactions
1000
913
902
43
72
731
720
82
81
Q1 2013
Q2 2013
780
800
600
400
200
104
116
Q2 2012
0
86
Q3 2012
Q4 2012
Strategic Investor
Financial Investor
Combination
Note: Includes total number of reported PP transactions with buyer information
Source: Capital IQ and Siemer & Associates’ proprietary research database
19
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
21.
Q2 2013 Features & Trends
Software
Digital Media
Compared to the first half of 2012, the number of M&A
deals for B2C online media and technology dropped
slightly by 10.0%
Cloud computing and the ability to leverage big data in
the cloud continues to be a big driver of Software M&A
activity
The decline in overall M&A activity in Q2 2013 has
been masked by headline deals such as
Yahoo!/Tumblr and Google/Waze
Salesforce.com’s $2.4bn acquisition of ExactTarget
combines two leading software companies, bolstering
Salesforce.com’s Marketing Cloud platform with
marketing automation and email marketing capabilities
Yahoo!’s $1.1bn acquisition of Tumblr connects the
Internet giant to large online communities by targeting
the younger generation of digital media users
IBM’s acquisition of cloud computing infrastructure
provider SoftLayer Technologies diversifies IBM’s
cloud offerings for enterprise planning
Google’s $1.1bn acquisition of Waze allows for the
integration of social navigation in Google’s product
offerings while solidifying its position as a global
leader in the mobile mapping sector
Service Link’s acquisition of Lender Processing
Services Inc. (LPS) expands Service Link’s ability to
offer mortgage analysis services through integrated
support and solutions, indicative of how certain service
providers are repositioning themselves as technology
platforms
Alibaba Group’s $586.0mm acquisition of an 18.0%
stake in Weibo gives it entrance into the social media
scene and access to the microblogging platform’s data
Source: Capital IQ and Siemer & Associates’ proprietary research database
21
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
22.
M&A and Private Placement Outlook
Due to a rising public equity market and higher domestic growth rates, strategic buyers are actively seeking
acquisitions that provide access to supplementary revenue streams
Deal activity in Q2 2013 was primarily driven by small transactions in which companies looked to acquire talent and
bolt-on technologies to grow their existing businesses
― Strategic acquirers continue to look for targets with complimentary technologies, access to data and / or tools or content
platforms
For the remainder of 2013, deal flow across the Digital Media and Software sectors is expected to increase as
buyers tap into large amounts of accumulated cash to acquire new products or talent
― In the Digital Media sector, early stage investments in new platforms and technologies continue to be a major theme and M&A
activity continues to skew toward the lower to middle market as large consolidators such as Google, Yahoo! and Facebook
seek to acquire companies at an earlier stage
― Mobile Technologies and Digital Advertising are expected to continue to lead activity in Digital Media as traditional media
firms begin to adapt to new distribution and monetization models
― In the Software sector, demand for cloud-based networks and infrastructure is continuing to drive innovation and M&A activity
through the remainder of 2013
VC and PE investors continue to seek out large market opportunities in Big Data and Mobile
― Q2 2013’s largest software private placement: AirWatch’s $225.0mm financing, demonstrates rising investor confidence in the
growth of mobile
Source: Siemer & Associates’ proprietary research database
22
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
24.
Public Company Valuation Metrics
(figures in millions of $USD, except per share)
Online Advertising
1000mercis
ad pepper media International N.V.
Digital Generation, Inc.
Hi-Media S.A.
Local Corporation
Marchex, Inc.
ReachLocal, Inc.
Sedo Holding AG
Septeni Holdings Co., Ltd.
TradeDoubler AB
Tremor Video, Inc.
ValueClick, Inc.
Weborama
YuMe, Inc.
Share Price as of
6/28/2013
$57.46
1.10
7.37
2.17
1.68
6.02
12.26
2.60
1,132.55
2.54
9.00
24.71
16.89
0.00
Mean
Median
Market
Cap (mm)
$179.0
23.5
204.7
96.8
38.4
225.9
348.4
79.2
142.8
108.3
444.8
1,883.2
58.9
0.0
EV / LTM
EV / CY 2013E
Enterprise
Value (EV)
$135.3
10.3
560.5
123.3
44.4
208.8
260.2
69.5
100.3
86.0
419.3
1,834.1
56.0
0.0
Revenue
2.9x
0.1x
1.5x
0.5x
0.5x
1.5x
0.5x
0.4x
0.2x
0.3x
3.7x
2.7x
1.6x
0.0x
EBITDA
8.3x
NM
5.6x
7.6x
NM
NM
28.3x
13.0x
5.4x
32.5x
NM
8.7x
12.2x
0.0x
Revenue
NA
NA
1.7x
NA
0.4x
1.4x
0.4x
NA
NA
NA
NA
NA
NA
NA
EBITDA
NA
NA
5.4x
NA
4.5x
16.1x
6.7x
NA
NA
NA
NA
NA
NA
NA
LTM Annual
Revenue Growth
4.0%
-3.1%
9.1%
-15.3%
9.2%
-9.2%
19.7%
7.3%
15.9%
-15.6%
0.0%
21.7%
9.8%
0.0%
$279.1
$111.8
1.2x
0.5x
12.1x
8.5x
1.0x
0.9x
8.2x
6.0x
3.8%
5.7%
Source: Capital IQ
24
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
25.
Public Company Valuation Metrics
(figures in millions of $USD, except per share)
Online Media & Search
Angie's List, Inc.
AOL Inc.
Apple Inc.
Baidu, Inc.
Demand Media, Inc.
Google Inc.
IAC/InterActiveCorp
Jiayuan.com International Ltd.
LinkedIn Corporation
Microsoft Corporation
Naspers Ltd.
NetEase, Inc.
OpenTable, Inc.
Pandora Media, Inc.
Renren Inc.
SINA Corporation
Sohu.com Inc.
Tencent Holdings Ltd.
Tomorrow Focus AG
TheStreet, Inc.
WebMD Health Corp.
Yandex N.V.
Yahoo Japan Corporation
Yahoo! Inc.
Share Price as of
6/28/2013
$26.56
36.48
396.53
94.60
6.00
880.37
47.58
5.20
178.30
34.55
73.52
63.17
63.95
18.40
2.99
55.73
61.62
39.22
4.98
1.86
29.37
27.65
492.72
25.13
Mean
Median
Market
Cap (mm)
$1,543.2
2,825.4
372,202.5
33,083.3
519.7
292,076.9
3,983.4
156.1
19,677.9
288,489.0
28,986.8
8,202.1
1,457.0
3,216.4
1,132.6
3,720.2
2,356.5
71,865.5
290.3
63.0
1,441.9
9,096.4
28,333.4
27,206.6
Enterprise
Value (EV)
$1,495.2
2,473.0
333,065.5
29,752.9
410.3
249,354.9
3,993.1
66.4
18,847.6
229,466.0
30,644.6
5,729.2
1,360.4
3,140.9
278.1
3,045.8
1,998.7
68,768.0
290.3
16.2
1,242.7
8,747.9
23,544.2
24,275.5
$43,417.0
$3,567.0
EV / LTM
Revenue
EBITDA
8.5x
NM
1.1x
5.1x
2.0x
5.8x
7.7x
14.7x
1.0x
5.8x
4.7x
14.8x
1.4x
9.3x
0.9x
5.8x
17.0x
NM
3.0x
7.6x
6.1x
22.6x
4.2x
9.0x
8.1x
27.8x
6.7x
NM
1.5x
NM
5.5x
NM
1.7x
5.4x
8.9x
23.1x
1.4x
15.9x
0.3x
NM
2.6x
30.9x
8.8x
20.1x
6.8x
11.7x
4.9x
11.8x
4.8x
4.5x
13.7x
11.8x
EV / CY 2013E
Revenue
EBITDA
4.4x
NM
1.1x
5.5x
2.0x
6.3x
5.7x
13.0x
1.0x
3.9x
3.8x
10.0x
1.2x
5.8x
1.0x
5.8x
9.9x
NM
0.0x
6.1x
NA
NA
3.5x
6.9x
6.1x
13.2x
3.5x
NM
1.1x
NM
4.7x
24.2x
1.4x
5.1x
NA
NA
NA
NA
NA
NA
2.4x
10.2x
6.6x
14.7x
NA
NA
6.0x
16.5x
3.4x
3.5x
9.8x
6.9x
LTM Annual
Revenue Growth
70.9%
0.9%
18.8%
47.1%
19.1%
33.8%
29.6%
24.2%
79.8%
4.1%
27.3%
8.1%
15.6%
55.2%
47.2%
12.3%
27.0%
50.3%
16.0%
-10.6%
-10.9%
40.3%
13.5%
-1.7%
25.7%
21.6%
Source: Capital IQ
25
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
26.
Public Company Valuation Metrics
(figures in millions of $USD, except per share)
Online Gaming
Activision Blizzard, Inc.
Changyou.com Limited
Electronic Arts Inc.
Funcom N.V.
GameLoft SA
Gravity Co., Ltd
Konami Corp.
Majesco Entertainment Co.
Take-Two Interactive Software Inc.
The9 Limited
Ubisoft Entertainment SA
Zynga, Inc.
Share Price as of
6/28/2013
$14.26
30.44
22.99
0.32
6.99
1.17
21.21
0.57
14.97
3.73
13.08
2.78
Mean
Median
Market
Cap (mm)
$15,936.1
1,613.8
7,036.9
21.1
556.2
32.5
2,940.1
23.8
1,379.8
91.3
1,251.9
2,207.0
EV / LTM
EV / CY 2013E
Enterprise
Value (EV)
11,318.1
1,494.6
5,915.9
34.5
483.9
-13.7
2,651.4
-1.7
1,312.5
-3.6
1,109.5
1,038.3
Revenue
2.3x
2.3x
1.6x
1.3x
1.8x
NM
1.2x
NM
1.1x
NM
0.7x
0.8x
EBITDA
6.8x
3.6x
18.2x
NM
11.5x
NM
8.1x
NM
NM
NM
1.8x
7.2x
Revenue
2.7x
2.4x
1.7x
NA
NA
NA
1.2x
NA
0.0x
NA
NA
1.6x
EBITDA
7.4x
4.4x
9.8x
NA
NA
NA
6.4x
NA
7.4x
NA
NA
11.7x
LTM Annual
Revenue Growth
11.8%
28.6%
-8.4%
91.7%
26.7%
-5.5%
-15.0%
-51.2%
47.1%
45.2%
18.4%
0.5%
$2,111.6
$1,073.9
1.4x
1.3x
8.2x
7.2x
1.6x
1.6x
7.8x
7.4x
15.8%
15.1%
Source: Capital IQ
26
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
27.
Public Company Valuation Metrics
(figures in millions of $USD, except per share)
eCommerce
1-800-Flowers.com Inc.
Amazon.com Inc.
Blue Nile Inc.
eBay Inc.
Expedia Inc.
Groupon, Inc.
HomeAway, Inc.
Mercadolibre, Inc.
Netflix, Inc.
Overstock.com Inc.
priceline.com Incorporated
Rakuten, Inc.
Stamps.com Inc.
Shutterfly, Inc.
Vistaprint N.V.
Share Price as of
6/28/2013
$6.19
277.69
37.78
51.72
60.15
8.55
32.34
107.76
211.09
28.20
826.67
11.82
39.39
55.91
49.37
Mean
Median
Market
Cap (mm)
$395.2
126,416.4
468.2
67,121.7
8,128.8
5,656.3
2,746.9
4,757.9
12,337.3
666.9
42,639.6
15,552.4
608.5
2,123.0
1,611.6
EV / LTM
EV / CY 2013E
Enterprise
Value (EV)
$396.2
121,561.4
428.4
62,235.7
7,755.2
4,488.3
2,432.5
4,564.4
12,011.4
585.0
39,111.1
15,766.4
561.3
1,958.6
1,798.8
Revenue
0.5x
1.9x
1.0x
4.3x
1.8x
1.9x
8.2x
11.6x
3.2x
0.5x
7.1x
3.4x
4.7x
2.9x
1.6x
EBITDA
8.8x
NM
29.6x
14.4x
12.2x
32.6x
NM
31.9x
NM
18.1x
19.7x
14.6x
19.1x
23.5x
16.8x
Revenue
0.5x
1.4x
0.8x
3.3x
1.5x
1.6x
5.8x
7.9x
2.7x
0.5x
5.3x
NA
4.0x
2.1x
1.4x
EBITDA
7.2x
19.8x
14.1x
9.7x
7.9x
12.7x
19.0x
21.6x
26.3x
14.3x
14.0x
NA
14.7x
10.5x
10.2x
LTM Annual
Revenue Growth
3.8%
24.5%
18.0%
17.4%
19.5%
26.8%
22.0%
22.2%
12.1%
9.3%
20.6%
16.9%
11.6%
31.3%
16.3%
$18,377.0
$4,488.3
3.6x
2.9x
20.1x
18.6x
2.8x
1.9x
14.4x
14.0x
18.1%
18.0%
Source: Capital IQ
27
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
28.
Public Company Valuation Metrics
(figures in millions of $USD, except per share)
Direct Marketing / Lead Gen
Bankrate, Inc.
eHealth, Inc.
Harte-Hanks Inc.
Market Leader, Inc.
Moneysupermarket.com Group PLC
Move, Inc.
QuinStreet, Inc.
Tree.Com, Inc.
Trulia, Inc.
Zillow, Inc.
Share Price as of
6/28/2013
$14.36
22.72
8.60
10.70
2.91
12.82
8.63
17.14
31.09
56.30
Market
Cap (mm)
$1,436.7
442.3
537.0
289.1
1,577.2
511.1
370.0
192.8
1,002.0
1,944.1
Mean
Median
(figures in millions of $USD, except per share)
Content Delivery Networks
Akamai Technologies, Inc.
Aruba Networks, Inc.
Brightcove, Inc.
Limelight Networks, Inc.
NeuLion Incorporated
RealNetworks Inc.
Rovi Corporation
Share Price as of
6/28/2013
$42.55
15.36
8.76
2.25
0.49
7.56
22.84
Mean
Median
Enterprise
Value (EV)
$1,541.5
328.7
583.2
267.1
1,548.8
480.9
353.6
119.5
797.6
1,765.1
$778.6
$532.0
Market
Cap (mm)
$7,561.1
1,753.6
246.3
216.3
81.0
267.8
2,300.7
Enterprise
Value (EV)
$7,048.1
1,312.7
219.4
97.8
81.1
7.2
2,949.0
$1,673.6
$219.4
EV / LTM
Revenue
EBITDA
3.5x
14.7x
2.0x
15.5x
0.8x
6.9x
5.6x
NM
5.0x
14.1x
2.3x
28.5x
1.1x
9.3x
1.3x
NM
10.0x
NM
13.3x
NM
4.5x
2.9x
14.8x
14.4x
EV / LTM
Revenue
EBITDA
5.0x
13.5x
2.2x
NM
2.4x
NM
0.5x
NM
2.1x
NM
NA
NM
4.7x
13.6x
2.8x
2.3x
13.6x
13.6x
EV / CY 2013E
Revenue
EBITDA
3.3x
12.3x
1.8x
9.4x
0.8x
6.8x
3.9x
18.4x
NA
NA
2.0x
11.3x
1.3x
9.1x
1.1x
5.8x
6.5x
30.8x
9.1x
NM
3.3x
2.0x
13.0x
10.3x
EV / CY 2013E
Revenue
EBITDA
4.3x
10.0x
2.3x
11.7x
2.1x
38.1x
0.4x
21.5x
NA
NA
NA
NA
3.8x
8.1x
2.6x
2.3x
17.9x
11.7x
LTM Annual
Revenue Growth
-2.1%
6.9%
-4.7%
29.1%
13.1%
8.1%
-16.8%
71.1%
87.8%
71.3%
26.4%
10.6%
LTM Annual
Revenue Growth
18.3%
19.3%
31.7%
4.3%
1.1%
-21.1%
-9.1%
6.4%
4.3%
Source: Capital IQ
28
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
29.
Public Company Valuation Metrics
(figures in millions of $USD, except per share)
Mobile Content
Acotel Group SpA
Aspiro AB
Com2uS Corporation
DADA SpA
DeNA Co., Ltd.
GameLoft SA
Glu Mobile, Inc.
Gree, Inc.
Index Corporation
Kongzhong Corp.
Mandalay Digital Group, Inc
Smith Micro Software Inc.
SNAP Interactive, Inc.
Tencent Holdings Ltd.
Tose Co.,Ltd.
Share Price as of
6/28/2013
$22.42
0.13
29.12
5.07
19.63
6.99
2.21
8.87
2.42
6.50
4.45
1.06
0.51
39.22
6.43
Mean
Median
Market
Cap (mm)
$92.2
43.4
282.4
82.2
2,633.3
556.2
151.3
2,070.0
9.5
272.7
90.0
39.5
19.9
71,865.5
47.6
Enterprise
Value (EV)
$59.7
29.7
250.9
118.1
1,999.3
483.9
130.1
1,918.9
196.4
142.8
92.9
11.2
15.7
68,768.0
22.0
4,949.3
130.1
EV / LTM
Revenue
EBITDA
0.4x
NM
0.7x
NM
3.2x
12.2x
1.1x
10.6x
1.0x
2.4x
1.8x
11.5x
1.5x
NM
1.2x
3.0x
1.2x
18.8x
0.8x
4.6x
16.3x
NM
0.3x
NM
0.9x
NM
8.9x
23.1x
0.4x
5.1x
2.7x
1.1x
10.2x
10.6x
EV / CY 2013E
Revenue
EBITDA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
1.3x
234.6x
NA
NA
NA
NA
NA
NA
1.5x
7.7x
0.3x
NM
1.1x
11.9x
NA
NA
NA
NA
1.0x
1.2x
84.8x
11.9x
LTM Annual
Revenue Growth
-4.2%
12.5%
125.5%
2.6%
38.9%
26.7%
26.4%
11.5%
-9.9%
15.6%
-16.7%
-10.5%
-19.8%
50.3%
1.5%
16.7%
11.5%
Source: Capital IQ
29
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
30.
Public Company Valuation Metrics
(figures in millions of $USD, except per share)
Mobile Advertising
Augme Technologies, Inc.
Millennial Media Inc.
Voltari Corporation
Velti Plc
Share Price as of
6/28/2013
$0.40
8.71
3.56
1.40
Market
Cap (mm)
$51.8
692.8
16.7
127.0
Mean
Median
(figures in millions of $USD, except per share)
Web / Domain Hosting
ASG Group Limited
Melbourne IT Ltd.
Newtek Business Services Inc.
NeuStar, Inc.
Tucows Inc.
United Online, Inc.
VeriSign, Inc.
Web.com Group, Inc.
Share Price as of
6/28/2013
$0.31
2.00
2.11
48.68
1.86
7.58
44.66
25.60
Mean
Median
Enterprise
Value (EV)
$47.5
559.3
12.9
157.9
$194.4
$102.7
Market
Cap (mm)
$63.4
164.7
78.0
3,203.2
74.9
701.2
6,732.3
1,220.0
EV / LTM
Revenue
EBITDA
1.8x
NM
2.9x
NM
0.2x
0.8x
0.6x
NM
1.4x
1.2x
0.8x
0.8x
EV / LTM
EV / CY 2013E
Revenue
EBITDA
1.1x
NM
1.6x
13.9x
NA
NA
0.5x
7.4x
1.1x
1.1x
10.7x
10.7x
EV / CY 2013E
LTM Annual
Revenue Growth
70.6%
68.7%
-11.0%
22.8%
37.8%
45.7%
Enterprise
Value (EV)
$102.0
179.6
149.6
3,448.7
78.7
813.0
5,876.0
1,906.1
Revenue
0.7x
1.2x
1.1x
4.1x
0.7x
0.9x
6.5x
4.4x
EBITDA
9.6x
8.4x
8.3x
9.1x
12.3x
8.7x
10.7x
27.8x
NM
Revenue
NA
NA
NA
3.7x
0.6x
1.0x
5.9x
3.4x
EBITDA
NA
NA
NA
7.5x
6.3x
7.3x
9.1x
11.3x
LTM Annual
Revenue Growth
-3.4%
-5.1%
11.3%
25.9%
14.8%
-2.5%
13.6%
71.8%
$1,569.2
$496.3
2.4x
1.1x
11.9x
9.3x
2.9x
3.4x
8.3x
7.5x
15.8%
12.4%
Source: Capital IQ
30
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
31.
Public Company Valuation Metrics
(figures in millions of $USD, except per share)
General Software
AVG Technologies N.V.
BMC Software Inc.
CA Technologies
International Business Machines Corp.
Jive Software, Inc.
Oracle Corporation
Rainmaker Systems Inc.
Red Hat, Inc.
SAP AG
The Active Network, Inc.
Qihoo 360 Technology Co. Ltd.
Share Price as of
6/28/2013
$19.45
45.13
28.62
191.11
18.17
30.71
0.39
47.82
73.04
7.57
46.17
Mean
Median
Market
Cap (mm)
$1,051.2
6,383.8
12,962.7
211,901.6
1,210.8
142,212.1
10.5
9,052.0
87,098.9
466.9
5,668.4
Enterprise
Value (EV)
$1,065.6
6,214.4
11,601.7
233,362.6
1,077.2
128,987.1
9.8
8,198.4
87,677.4
364.4
5,367.4
$43,993.3
$6,214.4
EV / LTM
Revenue
EBITDA
2.8x
9.0x
2.8x
10.2x
2.5x
6.9x
2.3x
8.8x
8.8x
NM
3.5x
7.4x
0.4x
NM
6.0x
29.6x
4.1x
12.1x
0.8x
33.1x
14.5x
NM
4.4x
2.8x
14.6x
9.6x
EV / CY 2013E
Revenue
EBITDA
2.5x
7.7x
2.7x
7.2x
2.7x
7.6x
2.3x
8.2x
5.2x
NM
3.4x
6.9x
NA
NA
5.1x
17.6x
3.6x
10.0x
0.8x
6.6x
8.3x
25.4x
3.7x
3.1x
10.8x
7.7x
LTM Annual
Revenue Growth
28.2%
1.4%
-3.6%
-3.5%
41.2%
0.2%
-12.7%
16.4%
13.2%
19.9%
72.6%
15.7%
13.2%
Source: Capital IQ
31
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
32.
Public Company Valuation Metrics
(figures in millions of $USD, except per share)
On-Demand Software
Concur Technologies, Inc.
Constant Contact, Inc.
Dealertrack Technologies, Inc.
ExactTarget, Inc.
LogMeIn, Inc.
NetSuite Inc.
RealPage, Inc.
Responsys, Inc.
Salesforce.com, Inc
The Ultimate Software Group, Inc.
Vocus Inc.
Share Price as of
6/28/2013
$81.38
16.07
35.43
33.72
24.46
91.74
18.34
14.31
38.18
117.29
10.52
Market
Cap (mm)
$4,543.5
493.5
1,540.8
2,348.5
594.7
6,768.8
1,404.8
706.4
22,523.7
3,242.6
221.9
Mean
Median
Share Price as of
Ad Agency
6/28/2013
The Interpublic Group of Companies, Inc.
$14.55
Omnicom Group Inc.
62.87
Publicis Groupe SA
71.11
WPP plc
17.05
(figures in millions of $USD, except per share)
Mean
Median
Enterprise
Value (EV)
$4,335.3
396.2
1,534.2
2,247.5
389.5
6,592.1
1,382.0
601.1
22,118.3
3,174.2
259.3
$3,911.8
$1,534.2
Market
Cap (mm)
$6,233.2
16,257.2
14,933.7
23,571.4
Enterprise
Value (EV)
$7,305.2
19,301.7
14,728.3
28,238.6
$17,393.4
$17,015.0
EV / LTM
Revenue
EBITDA
9.0x
NM
1.5x
20.8x
3.8x
26.4x
7.1x
NM
2.7x
NM
19.9x
NM
4.1x
25.7x
3.5x
30.9x
6.8x
NM
9.0x
NM
1.4x
NM
6.3x
4.1x
25.9x
26.0x
EV / LTM
Revenue
EBITDA
1.0x
8.8x
1.3x
9.3x
1.7x
8.7x
1.8x
10.2x
1.5x
1.5x
9.3x
9.0x
EV / CY 2013E
Revenue
EBITDA
6.7x
29.7x
1.4x
8.0x
3.1x
12.0x
4.9x
NM
2.7x
11.3x
13.1x
NM
3.3x
13.3x
2.5x
16.7x
4.8x
29.3x
7.1x
0.0x
1.2x
9.6x
4.6x
3.3x
14.4x
12.0x
EV / CY 2013E
Revenue
EBITDA
1.1x
7.9x
1.3x
8.8x
NA
NA
1.6x
9.3x
1.3x
1.3x
8.7x
8.8x
LTM Annual
Revenue Growth
22.3%
16.1%
10.5%
39.4%
14.8%
31.3%
22.5%
21.3%
32.1%
24.4%
48.4%
25.7%
22.5%
LTM Annual
Revenue Growth
-0.8%
2.0%
12.2%
3.5%
4.2%
2.8%
Source: Capital IQ
32
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
33.
Public Company Valuation Metrics
Share Price as of
Telecom
6/28/2013
Alcatel-Lucent, S.A.
$1.82
AT&T, Inc.
35.40
BCE, Inc.
40.92
BT Group plc
4.70
CenturyLink, Inc.
35.35
China Telecom Corp. Ltd.
0.48
Deutsche Telekom AG
11.62
IDT Corporation
18.69
KDDI Corporation
51.99
Level 3 Communications, Inc.
21.08
Nippon Telegraph and Telephone Corp.
51.79
Orange
9.45
Tata Communications Limited
2.64
Telefónica, S.A.
12.80
Verizon Communications Inc.
50.34
(figures in millions of $USD, except per share)
Mean
Median
Market
Cap (mm)
$4,142.4
190,452.0
31,746.6
37,039.1
21,529.8
38,608.2
49,977.1
428.0
39,744.4
4,667.8
61,391.8
24,824.1
753.3
58,785.2
144,022.7
EV / LTM
EV / CY 2013E
Enterprise
Value (EV)
$5,685.5
261,832.0
51,159.1
51,300.0
41,841.8
49,566.9
106,280.0
294.4
49,275.3
12,648.8
115,423.6
68,686.3
2,567.3
140,118.9
245,046.7
Revenue
0.3x
2.1x
2.7x
1.9x
2.3x
1.1x
1.4x
0.2x
1.3x
2.0x
1.1x
1.2x
0.9x
1.7x
2.1x
EBITDA
7.0x
8.9x
6.7x
6.3x
5.5x
4.3x
5.3x
10.7x
5.2x
8.8x
3.7x
4.4x
8.2x
5.3x
7.7x
Revenue
0.3x
2.0x
2.6x
2.0x
2.3x
0.9x
NA
0.2x
NA
1.9x
1.1x
1.3x
NA
1.9x
2.0x
EBITDA
4.2x
6.0x
6.4x
5.8x
5.7x
3.0x
NA
NA
NA
7.3x
3.7x
4.3x
NA
5.6x
5.5x
LTM Annual
Revenue Growth
-2.8%
-0.3%
0.2%
-4.7%
0.1%
15.2%
-1.7%
7.5%
2.5%
27.2%
1.8%
-3.9%
21.3%
-2.4%
4.4%
$80,115.1
$51,159.1
1.5x
1.4x
6.5x
6.3x
1.5x
1.9x
5.2x
5.6x
4.3%
0.2%
Source: Capital IQ
33
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
34.
Public Company Valuation Metrics
(figures in millions of $USD, except per share)
VoIP
8x8 Inc.
Aruba Networks, Inc.
AudioCodes Ltd.
BroadSoft, Inc.
Cbeyond, Inc.
F5 Networks, Inc.
magicJack VocalTec Ltd.
Sonus Networks, Inc.
Synchronoss Technologies, Inc.
Vonage Holdings Corporation
Windstream Corporation
Share Price as of
6/28/2013
$8.24
15.36
4.43
27.60
7.84
68.80
14.19
3.01
30.87
2.83
7.71
Mean
Median
Market
Cap (mm)
$594.4
1,753.6
168.5
772.9
238.2
5,421.4
263.3
849.5
1,184.7
600.0
4,570.2
Enterprise
Value (EV)
$542.2
1,312.7
144.8
694.2
225.4
4,898.5
217.4
626.7
1,127.4
573.3
13,627.3
$2,180.9
$626.7
EV / LTM
Revenue
EBITDA
5.0x
NM
2.2x
NM
1.1x
NM
4.2x
30.3x
0.5x
2.7x
3.4x
10.6x
1.4x
3.8x
2.5x
NM
3.9x
18.0x
0.7x
4.6x
2.2x
6.0x
2.5x
2.2x
10.9x
6.0x
EV / CY 2013E
Revenue
EBITDA
4.4x
22.3x
2.2x
11.3x
1.0x
NA
3.7x
14.5x
0.5x
3.1x
3.8x
9.3x
1.4x
3.9x
2.8x
NA
2.7x
8.1x
0.8x
5.2x
2.3x
5.9x
2.3x
2.3x
9.3x
8.1x
LTM Annual
Revenue Growth
25.4%
19.3%
-13.4%
13.2%
-1.3%
12.9%
33.7%
-1.4%
19.4%
-2.8%
27.6%
12.1%
13.2%
Source: Capital IQ
34
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
35.
LTM Subsector Relative Performance as of 6/28/2013
eCommerce, Ad Agencies and Web / Domain Hosting companies aggressively outperformed major indices
Subsector Relative Performance as of 6/28/2013
Direct Marketing /
Lead Gen
3-Months
6-Months
1-Year
13.4%
38.5%
6.7%
Mobile
Content
18.1%
11.0%
22.2%
Online
Advertising
-4.2%
17.3%
10.2%
On-Demand
Software
10.9%
8.9%
12.6%
General
Software
Telecom
Online
Gaming
-5.0%
-3.3%
-2.3%
0.2%
7.0%
8.3%
Web / Domain Online Media
eCommerce
Hosting
& Search
12.6%
34.2%
-11.5%
8.5%
15.2%
34.6%
8.2%
21.6%
23.7%
11.7%
10.4%
-5.7%
VoIP
Content
Delivery Networks
Mobile
Advertising
Ad Agency
-3.4%
-13.8%
-34.6%
9.8%
8.0%
-7.7%
25.3%
-35.0%
-71.3%
9.1%
22.2%
25.1%
eCommerce (34.6%)
40.00%
Ad Agency (25.1%)
Web / Domain Hosting (23.7%)
20.00%
Mobile Content (22.2%)
S&P 500 Index (13.2%)
On-Demand Software (12.6%)
0.00%
Dow Jones Industrial Average (12.4%)
Online Advertising (10.2%)
-20.00%
NASDAQ Composite Index (9.1%)
Telecom (8.3%)
-40.00%
Direct Marketing / Lead Gen (6.7%)
General Software (-2.3%)
-60.00%
Online Media & Search (-5.7%)
Content Delivery Networks (-7.7%)
Online Gaming (-11.5%)
-80.00%
VoIP (-34.6%)
Mobile Advertising (-71.3%)
-100.00%
Source: Capital IQ and Siemer & Associates’ proprietary research database
35
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
36.
Hong Kong
Los Angeles
Singapore
Siemer & Associates, LLC ● Member FINRA/SIPC ● www.siemer.com
1333 2nd Street, Suite 600
Santa Monica, CA 90401
Phone: (310) 861-2100
Fax: (310) 861-2125
www.siemer.com
36
Q2 2013 IN REVIEW
Digital Media and Software M&A and Private Placement Activity
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