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Global Tech M&A Monthly
December 2013
When You Are Approached

1
Moderator
Timothy Goddard
V.P. Marketing
Corum Group Ltd.

Timothy joined Corum in 2011, and oversees the company’s market...
Agenda
 Welcome
 International Event Report
 Selling – Your Personal Liability
 Research Report
 Special Report – Gar...
International Conference Report

Dougan Milne
VP, International Business Development
Corum Group Ltd.

Dougan is currently...
Selling – Your Personal Liability
Rob Schram
Director
Corum Group Ltd.

Rob has over 30 years of executive and entrepreneu...
Selling – Your Personal Liability
 When approached, it’s tempting to pursue that
offer full-throttle

6
Selling – Your Personal Liability
 When approached, it’s tempting to pursue that
offer full-throttle
 Fiduciary responsi...
Selling – Your Personal Liability
 When approached, it’s tempting to pursue that
offer full-throttle
 Consider responsib...
Selling – Your Personal Liability
 When approached, it’s tempting to pursue that
offer full-throttle
 Consider responsib...
5 Major Benefits of a Professional Process
1
Model
The
preparation
process will
help forge a
better
business
model for
you...
5 Major Benefits of a Professional Process
1
Model

11

Research

The
preparation
process will
help forge a
better
busines...
5 Major Benefits of a Professional Process
1

Research

Market
Feedback

The
preparation
process will
help forge a
better
...
5 Major Benefits of a Professional Process
1

4

Research

Market
Feedback

Relationships

The
preparation
process will
he...
5 Major Benefits of a Professional Process
1

4

5

Research

Market
Feedback

Relationships

Exit

The
preparation
proces...
Corum Research Report

Elon Gasper
Vice President,
Director of Research
Contact:
in/elongasper
elong@corumgroup.com

15

A...
Public Markets
25%

Weekly Percentage Change
NASDAQ

20%
15%
10%
5%
0%

16

S&P TECH

Dow Jones
Corum Index
Buyer

Nov. 2013

# of Transactions

296

211

# of Mega Deals

3

4

$2.0B

$2.0B

Private Equity Deals

12

...
Corum Index
Deal Spotlight

Buyer

# of Transactions
# of Mega Deals
Largest Deal

296
Sold to

Nov. 2013

211

3

4

$2.0...
Corum Index
Buyer

Nov. 2013

# of Transactions

296

211

# of Mega Deals

3

4

$2.0B

$2.0B

Private Equity Deals

12

...
Horizontal Application Software Market
Public Valuation Multiples
Since Q3

EV

Sales

EV
EBITDA

20

Nov. 2013

3.6x
18.8...
Horizontal Application Software Market
Deal Spotlight
Since Q3

Nov. 2013

Sold to

EV

Sales

3.6x

Corum Analysis

Persi...
Horizontal Application Software Market
Deal Spotlights
Since Q3

Nov. 2013

Corum Analysis

Sold to

EV
Target: Vana Workf...
Vertical Application Software Market
Public Valuation Multiples
Since Q3

EV

Sales

EV
EBITDA

23

Nov. 2013

2.5x
13.2x
...
Vertical Application Software Market
Deal Spotlight
Since Q3

Nov. 2013

Sold to

EV

Sales

2.5x

Corum Analysis

Market ...
Vertical Application Software Market
Deal Spotlight
Since Q3

Nov. 2013

Sold to

EV

Sales

2.5x

Corum Analysis

Market ...
Internet Market
Public Valuation Multiples
Since Q3

EV

Sales

EV
EBITDA

26

Nov. 2013

Corum Analysis

2.3x

Valuations...
Internet Market
Deal Spotlight
Since Q3

Nov. 2013

Sold to

EV

Sales

2.3x

Corum Analysis

Valuations jumped
high due t...
Internet Market
Deal Spotlight
Since Q3

Nov. 2013

Sold to

EV

Sales

2.3x

Corum Analysis

Valuations jumped
high due t...
Internet Market
Deal Spotlights
Since Q3

Nov. 2013

Corum Analysis

Sold to

Valuations jumping
Target: Mergermarket Grou...
Consumer Application Software Market
Public Valuation Multiples
Since Q3

EV

Sales

EV
EBITDA

30

Nov. 2013

Corum Analy...
Consumer Application Software Market
Deal Spotlight
Since Q3

Nov. 2013

Sold to

EV

Sales

1.8x

Corum Analysis

Value-t...
Consumer Application Software Market
Deal Spotlight
Since Q3

Nov. 2013

Sold to

EV

Sales

1.8x

Corum Analysis

Value-t...
Consumer Application Software Market
Deal Spotlight
Since Q3

Nov. 2013

Sold to

EV

Sales

1.8x

Sector: Mobile
Target: ...
Infrastructure Software Market
Public Valuation Multiples
Since Q3

EV

Sales

EV
EBITDA

34

Nov. 2013

2.3x
13.6x

Corum...
Infrastructure Software Market
Deal Spotlights
Since Q3

Nov. 2013

Corum Analysis

Sold to

EV

Target: Velocius Networks...
Infrastructure Software Market
Deal Spotlight
Since Q3

Nov. 2013

Sold to

EV

Sales

2.3x

Corum Analysis

The cloud kee...
IT Services Market
Public Valuation Multiples
Since Q3

EV

Sales

EV
EBITDA

37

Nov. 2013

0.6x
10.0x

Corum Analysis

S...
IT Services Market
Deal Spotlight
Since Q3

Nov. 2013

Sold to

EV

Sales

0.6x

Corum Analysis

Buyers does not
show will...
IT Services Market
Deal Spotlights
Since Q3

Oct. 2013

Corum Analysis

Sold to

EV

Target: PLIX [Poland]
Acquirer: Telec...
Corum Research Report

Elon Gasper
Vice President,
Director of Research
Contact:
in/elongasper
elong@corumgroup.com

40

A...
Gartner Data Center Conference 2013
December 9-12 - Las Vegas, NV

It’s time for the data center to get smarter!
41
Moving Beyond a Siloed Data Center

42
Large Players + Urgency

= Exit Opportunities in the Data Center

43
Global Tech M&A Annual Report
January 16, 2014
10:00AM (San Francisco)

1:00PM (New York)
6:00PM (London)

Dan Shapiro
Goo...
The Six Most Important Things to do
After Being Approached
Jon Scott
Senior Vice President
Corum Group International, Ltd....
The Six Most Important Things to do
After Being Approached
1. Protect your company
Get an NDA & nonsolicitation agreement
...
The Six Most Important Things to do
After Being Approached
1. Protect your company
Get an NDA & nonsolicitation agreement
...
The Six Most Important Things to do
After Being Approached
1. Protect your company
Get an NDA & nonsolicitation agreement
...
The Six Most Important Things to do
After Being Approached
4. Get an independent valuation
Buys time, and you need it anyw...
The Six Most Important Things to do
After Being Approached
4. Get an independent valuation
Buys time, and you need it anyw...
The Six Most Important Things to do
After Being Approached
4. Get an independent valuation
Buys time, and you need it anyw...
Seller Introduction
Nat Burgess
President
Corum Group Ltd.

Nat joined Corum in 1996 and brings a diverse background in te...
Special Guest
Gavin Weigh
CEO & Co-Founder
RapidBlue

Mr. Weigh’s expertise on consumer movement and behavior helped drive...
Closing Thoughts
Nat Burgess
President
Corum Group Ltd.

Nat joined Corum in 1996 and brings a diverse background in techn...
Upcoming Conference Schedule
Selling Up Selling Out (SUSO) - Ready to go to market? During this half-day workshop, learn t...
www.corumgroup.com

56
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Tech M&A Monthly - What To Do When You're Approached - December 2013

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In today's fast-paced tech M&A environment, more and more firms are being approached about the possibility of a sale, from pre-revenue, even pre-product startups, all the way through the mid-market, to the major approaches that make the news, sometimes it seems like everyone is getting approached. Here at Corum, we're seeing more and more companies coming to us after they have been approached, but only those who manage discussions properly will get a deal done. On Thursday, December 12, we'll help answer the question "What do I do when I've been approached?"

Getting approached is a double edged sword - it means a buyer is interested, but it means they are probably also interested in your competitors. We'll look at the mistakes sellers make when they're first approached, the best strategies for dealing with that first inquiry, and the best methods for turning a single buyer's approach into an auction that will ultimately give you the maximum value and best structure.

Plus, Corum's research team will give their monthly look at the deals, trends and valuations that are driving these approaches across the technology industry.

Published in: Business, Technology
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Transcript of "Tech M&A Monthly - What To Do When You're Approached - December 2013"

  1. 1. Global Tech M&A Monthly December 2013 When You Are Approached 1
  2. 2. Moderator Timothy Goddard V.P. Marketing Corum Group Ltd. Timothy joined Corum in 2011, and oversees the company’s marketing efforts globally from the headquarters near Seattle. Chief among these is Corum's extensive conference schedule, “Selling Up, Selling Out,” the Merge Briefing, the Tech M&A Monthly webcast and Corum's platinum sponsorship of the World Financial Symposiums' live events and Market Spotlight series. Through these events, Corum Group serves as the world’s leading educator in technology mergers and acquisitions. Prior to joining Corum, Timothy served as marketing and product manager for GIS software startup Depiction, Inc., and previously worked in marketing for VizX Labs, a pioneering SaaS startup delivering DNA analysis tools. In addition to marketing for software startups, Tim has worked for a US Senate campaign and taught science in Rio de Janeiro. Timothy graduated Magna Cum Laude from Bethel University in St. Paul, Minnesota, with degrees in History and Biology. 2
  3. 3. Agenda  Welcome  International Event Report  Selling – Your Personal Liability  Research Report  Special Report – Gartner Data Center Conference  The Six Things to do After Being Approached  Seller Report – Gavin Weigh  Closing Thoughts  Q&A 3
  4. 4. International Conference Report Dougan Milne VP, International Business Development Corum Group Ltd. Dougan is currently Vice President of International Business Development, based in Barcelona, with the Corum Group International. Previously, he spent 3 years working out of Corum's European headquarters in Zürich, Switzerland and 3 years running Corum's research division from their Global HQ in Seattle. Prior to joining Corum's team in 2005, Dougan spent 3 years in the banking industry with Bank of America, and Citigroup's Private Wealth business unit. Before entering finance and investment banking, Dougan successfully founded two companies, Billions and Modo Marketing. He earned his advanced degree – Diplôme de Métiers du Vin et Management – in 2013 (France), and holds a BA in Business Economics from the University of San Diego. 4
  5. 5. Selling – Your Personal Liability Rob Schram Director Corum Group Ltd. Rob has over 30 years of executive and entrepreneurial experience in multiple technologies: Integrated circuit testing, industrial process automation and control, communications software, security software, and energy software and services. Rob has founded and sold several companies and engaged in two IPOs. He was most recently CEO of Evergreen Fuel Technologies, Inc. in the energy sector. Rob is a broadly skilled strategic development professional with a proven reputation for targeting, negotiating and developing profitable ventures and a demonstrated ability to successfully analyze an organization's critical business requirements, identify deficiencies and opportunities, and develop innovative and cost-effective solutions for enhancing competitiveness, increasing revenues, and improving customer relationships. 5
  6. 6. Selling – Your Personal Liability  When approached, it’s tempting to pursue that offer full-throttle 6
  7. 7. Selling – Your Personal Liability  When approached, it’s tempting to pursue that offer full-throttle  Fiduciary responsibility to shareholders – not calibrating value can leave money on the table 7
  8. 8. Selling – Your Personal Liability  When approached, it’s tempting to pursue that offer full-throttle  Consider responsibility to shareholders – not calibrating value can leave money on the table  Courts have ruled that CEOs can be liable to shareholders for that difference 8
  9. 9. Selling – Your Personal Liability  When approached, it’s tempting to pursue that offer full-throttle  Consider responsibility to shareholders – not calibrating value can leave money on the table  Courts have ruled that CEOs can be liable to shareholders for that difference  A global buyer search also provides benefits beyond the ultimate sale 9
  10. 10. 5 Major Benefits of a Professional Process 1 Model The preparation process will help forge a better business model for your firm 10 10
  11. 11. 5 Major Benefits of a Professional Process 1 Model 11 Research The preparation process will help forge a better business model for your firm 11 2 Your strategic position will improve from the research/ positioning process
  12. 12. 5 Major Benefits of a Professional Process 1 Research Market Feedback The preparation process will help forge a better business model for your firm 12 3 Model 12 2 Your strategic position will improve from the research/ positioning process Invaluable data/insights straight from the top will help improve your value
  13. 13. 5 Major Benefits of a Professional Process 1 4 Research Market Feedback Relationships The preparation process will help forge a better business model for your firm 13 3 Model 13 2 Your strategic position will improve from the research/ positioning process Invaluable data/insights straight from the top will help improve your value 70% of parties that go under NDA may not be able to buy—but could partner, adding value
  14. 14. 5 Major Benefits of a Professional Process 1 4 5 Research Market Feedback Relationships Exit The preparation process will help forge a better business model for your firm 14 3 Model 14 2 Your strategic position will improve from the research/ positioning process Invaluable data/insights straight from the top will help improve your value 70% of parties that go under NDA may not be able to buy—but could partner, adding value The merger, asset sale, or financial recap of your company
  15. 15. Corum Research Report Elon Gasper Vice President, Director of Research Contact: in/elongasper elong@corumgroup.com 15 Alina Soltys Senior Analyst Contact: in/soltysa alina.soltys alinas@corumgroup.com Amber Stoner Senior Analyst Contact: ambers@corumgroup.com Jason Steblay Research Analyst Contact: jasons@corumgroup.com
  16. 16. Public Markets 25% Weekly Percentage Change NASDAQ 20% 15% 10% 5% 0% 16 S&P TECH Dow Jones
  17. 17. Corum Index Buyer Nov. 2013 # of Transactions 296 211 # of Mega Deals 3 4 $2.0B $2.0B Private Equity Deals 12 12 # VC backed Exits 65 33 % Cross Border Transactions 31% 38% % of Startup Acquisitions* 14% 16% 14 15 Largest Deal Average Life of Target * 0 to 3 years 17 Price Hellman & Friedman Scout24 $2.0B Hellman & Friedman/JMI Nov. 2012 Seller Applied Systems $1.8B Advent International UNIT4 $1.6B OpenText GXS, Inc. $1.2B
  18. 18. Corum Index Deal Spotlight Buyer # of Transactions # of Mega Deals Largest Deal 296 Sold to Nov. 2013 211 3 4 $2.0B Price Hellman & Friedman Scout24 $2.0B Hellman & Friedman/JMI Nov. 2012 Seller Applied Systems $1.8B Advent International UNIT4 $1.6B OpenText GXS, Inc. $1.2B $2.0B Sector: Infrastructure Management Private Target:Deals Inc. Equity GXS, 12 12 Acquirer: OpenText [Canada] # VC backed Exits Value: $1.07 Billion, 2.4x revenue 33 65 Transaction % Cross-Border Transactions 31% 38% Strengthens the Information Exchange pillar with the addition of market leading cloud-based B2B integration services. % of Startup Acquisitions* 14% 16% - Expands the EIM buying centers and adds cloud-based Managed Services. - More than twice the size of the largest deal in OpenText's history. Average Life of Target * 0 to 3 years 18 14 15
  19. 19. Corum Index Buyer Nov. 2013 # of Transactions 296 211 # of Mega Deals 3 4 $2.0B $2.0B Private Equity Deals 12 12 # VC backed Exits 65 33 % Cross Border Transactions 31% 38% % of Startup Acquisitions* 14% 16% 14 15 Largest Deal Average Life of Target * 0 to 3 years 19 Price Hellman & Friedman Scout24 $2.0B Hellman & Friedman/JMI Nov. 2012 Seller Applied Systems $1.8B Advent International UNIT4 $1.6B OpenText GXS, Inc. $1.2B
  20. 20. Horizontal Application Software Market Public Valuation Multiples Since Q3 EV Sales EV EBITDA 20 Nov. 2013 3.6x 18.8x Corum Analysis Persistent demand for SaaS and ERP brings the multiple up. Highest valuation in 24 months supported by maturity and nextgen technology.
  21. 21. Horizontal Application Software Market Deal Spotlight Since Q3 Nov. 2013 Sold to EV Sales 3.6x Corum Analysis Persistent demand on SaaS and ERP companies bring the ratio up. Sector: ERP Target: UNIT4 [Holland] Acquirer: Advent International Transaction Value: $1.58 Billion The highest valuation for 24 - Provides ERP, HR and financial management software and SaaS for months EV businesses, education institutions and government agencies supported by maturity globally. and next gen - Should enable UNIT4 to expand its SaaS business. EBITDA technology 18.8x - 21 Values the company at 14.3x EBIDTA.
  22. 22. Horizontal Application Software Market Deal Spotlights Since Q3 Nov. 2013 Corum Analysis Sold to EV Target: Vana Workforce [Canada] Sales Acquirer: FinancialForce.com - 3.6x Human Capital Management built on Force.com. Sold to EV EBITDA Less Software, Inc. Target: 18.8x Acquirer: FinancialForce.com - 22 Persistent demand on SaaS and ERP companies bring the ratio up. Supply Chain Management SaaS. The highest valuation for 24 months supported by maturity and next gen technology
  23. 23. Vertical Application Software Market Public Valuation Multiples Since Q3 EV Sales EV EBITDA 23 Nov. 2013 2.5x 13.2x Corum Analysis Slightly off from long-term highs set at the quarter. Hit 12-month highs: PEs are paying up.
  24. 24. Vertical Application Software Market Deal Spotlight Since Q3 Nov. 2013 Sold to EV Sales 2.5x Corum Analysis Market is trying to determine the direction. Sector: Financial Target: Applied Systems, Inc. Acquirer: Hellman & Friedman/ JMI Equity Transaction Value: $1.8 billion - EV Provides general ERP software, SaaS and services for insurance12-month Hit brokers and small, medium and large insurance businesses worldwide. 13.2x highs: PEs are paying up. - Combines large user base with Applied Epic, fast-growing new agency EBITDA management system. - 24 Sold by Bain Capital who bought Applied from Vista Equity Partners in 2006.
  25. 25. Vertical Application Software Market Deal Spotlight Since Q3 Nov. 2013 Sold to EV Sales 2.5x Corum Analysis Market is trying to determine the direction. Sector: Healthcare Target: Passport Health Communications Acquirer: Experian Group [Ireland] Transaction Value: $850 million - EV Hit 12-month highs: Payment transaction management and processing software and SaaS for medical sector customer billing, EDI, compliance, and data management. PEs are paying up. 13.2x - Will EBITDA triple the size of Experian's healthcare business by adding an expected $121m in 2013 revenue and expands footprint to 3,000 hospitals. 25
  26. 26. Internet Market Public Valuation Multiples Since Q3 EV Sales EV EBITDA 26 Nov. 2013 Corum Analysis 2.3x Valuations jumping due to perceived improvement in monetization scalability. 13.3x Slight decrease in multiples while remaining high.
  27. 27. Internet Market Deal Spotlight Since Q3 Nov. 2013 Sold to EV Sales 2.3x Corum Analysis Valuations jumped high due to cash excess in PE. Sector: Internet Classifieds Target: onTargetjobs Acquirer: Dice Holdings Transaction Value: $50 million EV - Multiples hold the high bar with a Operates Internet job listings websites that serve defined vertical industries slight decrease. or job functions. 13.3x EBITDA - Gives Dice vertical recruiting services in healthcare and hospitality. 27
  28. 28. Internet Market Deal Spotlight Since Q3 Nov. 2013 Sold to EV Sales 2.3x Corum Analysis Valuations jumped high due to cash excess in PE. Sector: Internet Pure Play Target: Scout24 AG [Germany] Acquirer: Hellman & Friedman Transaction Value: $2.03 billion EV - Multiples hold the high Network of German real estate, automobile, dating and employment bar with a classified, booking and price comparison sites. slight decrease. 13.3x EBITDA sale of 70% of Scout24 is a cornerstone transaction for the online - The investment strategy pursued by Deutsche Telekom over the past decade. 28
  29. 29. Internet Market Deal Spotlights Since Q3 Nov. 2013 Corum Analysis Sold to Valuations jumping Target: Mergermarket Group [UK] due to perceived EV Acquirer: BC Partners [UK] improvement in Sales Transaction Value: $617.7 million monetization scalability. Online financial reference and analysis content with information on M&A, corporate strategy 2.3x and debt. Sold to EV EBITDA Harris Interactive Target: 13.3x Acquirer: The Nielsen Company Transaction Value: $116.6 million 29 Online market research content, services and survey services . Slight decrease in multiples while remaining high.
  30. 30. Consumer Application Software Market Public Valuation Multiples Since Q3 EV Sales EV EBITDA 30 Nov. 2013 Corum Analysis 1.8x Value-to-sales ratio remains stable as mobile e-commerce increases share of holiday retail… 8.6x …ramping value of profitable models.
  31. 31. Consumer Application Software Market Deal Spotlight Since Q3 Nov. 2013 Sold to EV Sales 1.8x Corum Analysis Value-to-sales ratio remains to be stable… Sector: Mobile Target: MapMyFitness Acquirer: Under Armour, Inc. Transaction Value: $150 million EV - 8.6x and maximize EBITDA - Accelerates Under Armour’s capabilities in digital training space. values. - 31 …as mobile-social Provides iOS, Android, Blackberry and Windows Phone mobile and online bring the attention fitness and nutrition tracking applications for consumers. Helps Under Armour catch up to Nike and other competitors.
  32. 32. Consumer Application Software Market Deal Spotlight Since Q3 Nov. 2013 Sold to EV Sales 1.8x Corum Analysis Value-to-sales ratio remains to be stable… Sector: E-commerce Target: TicketMonster [South Korea] Acquirer: Groupon Transaction Value: $260 million …as mobile-social bring the attention EV and maximize - Will serve as cornerstone for Asia operations with addition of mobile EBITDA penetration and local, travel and product expertise. values. - - 32 Operates an email-based daily deal coupon service in South Korea. Groupon’s 12th and largest overseas transaction. 8.6x
  33. 33. Consumer Application Software Market Deal Spotlight Since Q3 Nov. 2013 Sold to EV Sales 1.8x Sector: Mobile Target: TouristEye Acquirer: Lonely Planet [Australia] Transaction Value: Undisclosed Corum Analysis Value-to-sales ratio remains to be stable… …as mobile-social bring the attention EV - Android, iOS and Web-based travel guide and planning service that enables and and travelers to plan getaways, view crowd-sourced user reviews, take maximize EBITDA values. organize photos and get hyper-local hospitality, merchant and restaurant 8.6x recommendations and driving directions. 33
  34. 34. Infrastructure Software Market Public Valuation Multiples Since Q3 EV Sales EV EBITDA 34 Nov. 2013 2.3x 13.6x Corum Analysis Demand for cloud models keeps sales multiples stable. EBITDA multiples hit 25 month highs as buyers insist on profits and pay up for them.
  35. 35. Infrastructure Software Market Deal Spotlights Since Q3 Nov. 2013 Corum Analysis Sold to EV Target: Velocius Networks Acquirer: Akamai Technologies Sales 2.3x The cloud keeps valuations stable - Akamai’s first transaction of 2013. - Application performance optimization, monitoring, anomaly detection and reporting software for enterprise networks. Sold to EV EBITDA Prolexic Technologies Target: 13.6x Acquirer: Akamai Technologies Transaction Value: $370 million 35 Cloud-based DDoS managed security software and services. Hit 25 month highs Buyers insist on profits and pay up for them.
  36. 36. Infrastructure Software Market Deal Spotlight Since Q3 Nov. 2013 Sold to EV Sales 2.3x Corum Analysis The cloud keeps valuations stable Sector: Systems Management Target: Tier 3, Inc. Acquirer: CenturyLink Transaction Value: Estimated $150 million - EV Hit 25 month highs Buyers insist Provides cloud hosting, platform as a service and infrastructure as a service on and server provisioning and cloud management software. profits and pay up for them. Accelerates offering of cloud services white-label and resale within EBITDA 13.6x CenturyLink’s wholesale channel. - 36 Tier 3 CEO, Matthew Schiltz, to speak at Seattle WFS Conference Jan 29.
  37. 37. IT Services Market Public Valuation Multiples Since Q3 EV Sales EV EBITDA 37 Nov. 2013 0.6x 10.0x Corum Analysis Steady after 20% increase from 2012. Improvement of 0.5 each of last three months as buyers increasingly value profits.
  38. 38. IT Services Market Deal Spotlight Since Q3 Nov. 2013 Sold to EV Sales 0.6x Corum Analysis Buyers does not show willing to pay more for revenue. Target: InTechnology Managed Services [UK] Acquirer: Redcentric [UK] Transaction Value: $104.3 million - EV Managed services assets of InTechnology: enterprise Internet access and International colocation; firewall and security; backup, archiving and storage; messaging buyers continue and VOIP. boost growth. EBITDA - 38 10.0x Will double revenues and increase recurring revenues to more than 80%. to
  39. 39. IT Services Market Deal Spotlights Since Q3 Oct. 2013 Corum Analysis Sold to EV Target: PLIX [Poland] Acquirer: TelecityGroup [UK] Sales - 0.6x Market sustaining 12-month highs achieved in July… Brings Telecity the seventh-largest Internet exchange in Europe plus premier datacenter space in Warsaw, gateway for network traffic throughout Poland and Eastern Europe. Sold to EV EBITDA 3DC [Bulgaria] Target: 9.5x …driving international M&A Acquirer: TelecityGroup [UK] - 39 Brings exposure to a growing Bulgarian market, as well as Balkans and Middle East, complementing May acquisition of Istanbul-based SadeceHosting.com.
  40. 40. Corum Research Report Elon Gasper Vice President, Director of Research Contact: in/elongasper elong@corumgroup.com 40 Alina Soltys Senior Analyst Contact: in/soltysa alina.soltys alinas@corumgroup.com Amber Stoner Senior Analyst Contact: ambers@corumgroup.com Jason Steblay Research Analyst Contact: jasons@corumgroup.com
  41. 41. Gartner Data Center Conference 2013 December 9-12 - Las Vegas, NV It’s time for the data center to get smarter! 41
  42. 42. Moving Beyond a Siloed Data Center 42
  43. 43. Large Players + Urgency = Exit Opportunities in the Data Center 43
  44. 44. Global Tech M&A Annual Report January 16, 2014 10:00AM (San Francisco) 1:00PM (New York) 6:00PM (London) Dan Shapiro Google/Robot Turtles 44 Reese Jones Singularity University Peter Coffee Salesforce
  45. 45. The Six Most Important Things to do After Being Approached Jon Scott Senior Vice President Corum Group International, Ltd. Jon joined Corum in 2010 out of their Seattle headquarters and is now based in Amsterdam. He has close to 30 years experience serving high technology companies with the last 20 mainly in chief operating and chief executive roles. During this time Jon has become known for his ability to successfully integrate strategies and tactics into well executed operating plans, building strong teams and achieving excellent results. Jon has served as President and CEO of The PowerTech Group, a security and compliance software company sold to Help/Systems in 2008, and Microserv Technology Services, a nationwide tech services company which was acquired by Halifax Corporation in 2003. Earlier he served as President and COO of Traveling Software, a leading developer of communications software in Seattle. Prior to his operating roles Jon held vice president roles in sales, marketing and business development for technology companies. Jon has taught in the software product management program at the University of Washington and holds a business administration degree from San Francisco State University. 45
  46. 46. The Six Most Important Things to do After Being Approached 1. Protect your company Get an NDA & nonsolicitation agreement 46
  47. 47. The Six Most Important Things to do After Being Approached 1. Protect your company Get an NDA & nonsolicitation agreement 2. Qualify the buyer Can they do the deal? 47
  48. 48. The Six Most Important Things to do After Being Approached 1. Protect your company Get an NDA & nonsolicitation agreement 2. Qualify the buyer Can they do the deal? 3. Get a due-diligence checklist Can you do the deal? 48
  49. 49. The Six Most Important Things to do After Being Approached 4. Get an independent valuation Buys time, and you need it anyway 49
  50. 50. The Six Most Important Things to do After Being Approached 4. Get an independent valuation Buys time, and you need it anyway 5. Talk to other potential suitors Prepare to make high level overtures 50
  51. 51. The Six Most Important Things to do After Being Approached 4. Get an independent valuation Buys time, and you need it anyway 5. Talk to other potential suitors Prepare to make high level overtures 6. Build three year projections Required for valuations & final approval 51
  52. 52. Seller Introduction Nat Burgess President Corum Group Ltd. Nat joined Corum in 1996 and brings a diverse background in technology M&A and law. While with the Enforcement Division of the U.S. Securities and Exchange Commission, Nat helped identify and build cases against securities fraud schemes. With the Strategic Development Division of Morgan Stanley's M&A group, Nat worked on cross-border acquisitions of U.S. and European companies by Japanese firms, and on financings by large Japanese public companies. Nat moved to Morgan Stanley's Tokyo office, where he reported directly to the President of Morgan Stanley, Japan Ltd. and focused exclusively on cross-border M&A. After Morgan Stanley, Nat co-founded Postcard Software, a creator of advertiser-driven bilingual (English and Japanese) Internet content. At Activision, Nat led the company's on-line business development. Nat earned an undergraduate degree in Japanese literature from Yale College and a law degree from UCLA. While in law school, Nat wrote articles for the International Forum at Yale, Tokyo Journal. 52
  53. 53. Special Guest Gavin Weigh CEO & Co-Founder RapidBlue Mr. Weigh’s expertise on consumer movement and behavior helped drive the development of RapidBlue’s shopper analytics solution. Prior to founding RapidBlue he was a Capability Officer at BAE Systems. Bsc, BBA, Economics, International Business, Northumbria University. 53
  54. 54. Closing Thoughts Nat Burgess President Corum Group Ltd. Nat joined Corum in 1996 and brings a diverse background in technology M&A and law. While with the Enforcement Division of the U.S. Securities and Exchange Commission, Nat helped identify and build cases against securities fraud schemes. With the Strategic Development Division of Morgan Stanley's M&A group, Nat worked on cross-border acquisitions of U.S. and European companies by Japanese firms, and on financings by large Japanese public companies. Nat moved to Morgan Stanley's Tokyo office, where he reported directly to the President of Morgan Stanley, Japan Ltd. and focused exclusively on cross-border M&A. After Morgan Stanley, Nat co-founded Postcard Software, a creator of advertiser-driven bilingual (English and Japanese) Internet content. At Activision, Nat led the company's on-line business development. Nat earned an undergraduate degree in Japanese literature from Yale College and a law degree from UCLA. While in law school, Nat wrote articles for the International Forum at Yale, Tokyo Journal. 54
  55. 55. Upcoming Conference Schedule Selling Up Selling Out (SUSO) - Ready to go to market? During this half-day workshop, learn to prepare, position, research, value, negotiate, and execute due diligence for maximum price and structure. This is the most attended Tech M&A event ever – participants have done over $1 trillion in transaction value. Merge Briefing (MB) - The Merge Briefing is a 90-minute executive briefing providing a current M&A market update (trends, valuations, etc.), as well as a brief overview of the Tech M&A process: “8 Steps To An Optimal Outcome.” Dec. 20: Wilmington – MB Feb. 6: Portland – MB Jan. 14: Hamburg – MB Feb. 6: New York – MB Jan. 15: Munich – SUSO Feb. 10: Kansas City – SUSO Jan. 16: Annual Report Feb. 11: St. Louis – MB Jan. 21: Dublin – MB Feb. 12: Indianapolis – MB Jan. 21: Rio de Janeiro – MB Feb. 14: Amsterdam – MB Jan. 23: Sao Paulo – MB Feb. 18: Berlin – MB Jan. 27: Columbus – MB Feb. 20: Seattle – MB Jan. 28: Cincinnati – SUSO Feb. 28: Barcelona – MB www.CorumGroup.com/Events 55
  56. 56. www.corumgroup.com 56
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