PEACHTREE CAPITAL ADVISORS, INC.Software, Internet & IT Infrastructure M&A Report: 2012 – Mid Year Peachtree Capital Advisors, Inc. is a Pasadena, CA‐based investment bank providing M&A advisory services to growth and middle market software, Internet and IT infrastructure companies both in the U.S. and abroad. With 26 closed transactions representing nearly $1 billion in transaction value, Peachtree is luminous in charting the capital raise or merger and acquisition process for its clients. www.peachtreecapitaladvisors.com
Software, Internet & IT Infrastructure M&A Report: 2012 – Mid Year Peachtree Capital Advisors Page 1 This report does not seek to prove that volume or the deal value of M&A has increased, primarily because that is a near impossible statistic to obtain on a congruent basis, but to discuss valuation multiples, M&A trends, and transaction rationale in the Software, Internet & IT Infrastructure sectors. Economic Climate Decelerating economic growth had very little effect on M&A deal‐making in the first half of 2012. While the U.S. real GDP growth rate slowed to 1.9% in the first quarter from 3% in the first quarter of 2011, 47 of the 96 software, Internet & IT Infrastructure transactions tracked by Peachtree occurred in the first quarter. Excluding Cisco’s $5 billion acquisition of NDS, reported deal value totaled $20.5 billion in the first half. This is in‐line with last year’s data and shows a relatively healthy M&A environment in this post‐recession economy. IT Spending and Market Conditions According to Gartner Research, worldwide spending on enterprise application software will total $120.4 billion in 2012, a 4.5% increase over 2011 spending (Gartner, June 20, 2012). Gartner believes that 2012 spending will focus on industry‐specific applications; upgrades to established, mission‐critical software; integrating and securing established systems and infrastructure; and software as a service (SaaS) deployments representing extensions to, or replacement of, existing applications and new solutions. In addition, Gartner’s Tom Eid believes that SaaS and cloud‐based services will grow in usage, rising from 11% of enterprise application spending in 2010 to 16% in 2015. While the committee is still out regarding the decision to move mission‐critical applications to the cloud, the cloud is here and vendors continue to pound CIOs with marketing messages outlining the benefits of cloud‐computing environments. However, much of the growth in IT has stemmed from a post‐recession technology refresh and the cloud has not been the driving force in IT spending that everyone thought it would be. Increasing the productivity of a lean labor‐force appears to be the strategy of most IT departments, based on the limited number of wholesale transitions of operations to public cloud environments.
Software, Internet & IT Infrastructure M&A Report: 2012 – Mid Year Peachtree Capital Advisors Page 2 M&A Drivers The macro‐economic factors driving Software, Internet & IT Infrastructure M&A in the first half of 2012 are a solid economic backdrop, increased competitiveness, and “positioning” (as opposed to growth). Regardless of what the media says, the economics are much better than they were a few years ago when the sky was falling. More importantly, customers are placing orders and actually paying for them. This economic backdrop is a much better environment for strategic planning than any of the previous post‐recession years. There is also a competitive vigor in the air. Whether it is Oracle’s Larry Ellison sparring with Salesforce.com’s Marc Benioff or Box.net’s Aaron Levie poking fun at Microsoft, there is definitely a growing marketplace that is inspiring competition. More importantly, competition drives the need to innovate and the need to innovate rapidly entices investors to encourage CEOs to buy now versus build (and hope to gain market share). As it relates to strategic growth, acquisition was not part of the equation in 2009 and organic growth was en vogue in 2010. In 2011, small cloud and analytics acquisitions at astronomical multiples were all the rage. In 2012, the acquisition theme is shaping up to be “buying market share in the cloud.” Instead of starting up a cloud division or acquiring a tiny company, corporate buyers are seeking to acquire cloud‐based businesses with market share in an established market as opposed to allocating capital to startup opportunities (e.g., Citrix acquiring cloud.com for approximately 100x revenue in 2011). Additionally, there were a substantial number of cloud‐based acquisitions in the first half of 2012. While the majority of cloud‐based acquisitions in 2011 involved unproven early‐stage entities, the theme has changed from “what is new” to “what is working” In 2012. For example, SAP acquiring Ariba for $4.3 billion, Oracle acquiring Taleo for $1.9 billion, IBM acquiring GreenHat for an undisclosed amount, Internap acquiring Voxel for $30 million, and Battery Ventures leading a $28 million investment round into SingleHop all represent safer investments into what is working now as opposed to betting on the future. M&A Trends The most significant first‐half acquisition was Dell’s acquisition of Quest Software, which represented the first crack in the organic growth agendas developed by most middle‐market tech companies. In the last three years, most mid‐market companies streamlined operations, recalibrated their strategic plans and focused solely on organic growth or small strategic “tuck‐in” acquisitions that did not delineate from the plan. Most mid‐market board executives and investors wanted to keep the asset looking healthy just in case a large‐cap prince would happen along the countryside in need of a beautiful bride. The Quest Software acquisition will serve to plant an acquisition seed in the minds of these board members that Prince Charming may not mind a few blemishes. Long thought to be an M&A patchwork quilt and a low‐balling acquirer of distressed properties, Quest Software managed to get acquired by a large‐cap Prince at a relatively attractive exit multiple—2.7x revenue and 15x EBITDA. This transaction will be the turning point in the minds of mid‐market investors and board members who in large part have remained on the M&A sidelines as it poses the question, “Why not make a few acquisitions to scale up or to accelerate growth?”
Software, Internet & IT Infrastructure M&A Report: 2012 – Mid Year Peachtree Capital Advisors Page 3 There were 20 deals representing $3.3 billion in reported deal value in the Enterprise Application and Marketing Software sector. Fear drove most of the transactions in this sector—fear of product irrelevance, fear of a sliding stock prices. The most noteworthy acquisition in this sector was Vocus acquiring iContact, which allowed Vocus to enter a new vertical market and potentially realize the substantial cross‐marketing opportunities between the two companies. Vocus provides PR Software and iContact provides e‐mail marketing software. Application, Internet Marketing Services, Collaboration and Web Conferencing DatePrice$M1 Microsoft acquires Yammer (social and enterprise collaboration) Jun‐12 1,2002 Salesforce.com acquires Buddy Media (social marketing software) Jun‐12 6893 Salesforce.com acquires ChoicePass (enterprise perks mgt software) Jun‐12 n.a.4 Facebook acquires Face.com (facial recognition technology) Jun‐12 60 Est.5 Gracenote acquired Bulldog United (video content recognition) Jun‐12 n.a.6 Oracle acquired Collective Intellect (real‐time social media monitoring) Jun‐12 n.a.7 Oracle acquires Vitrue (social media marketing) May‐12 3008 Teradata acquired eCircle (digital marketing analytics) May‐12 n.a.9 Salesforce acquires Stypi (collaborative text editor) May‐12 n.a.10 LinkedIn acquired SlideShare (online user‐generated B2B publisher) May‐12 11911 Peoplefluence acquired Socialtext (social collaboration) May‐12 n.a.12 Cisco acquired Truviso (real‐time Web analytics software) May‐12 n.a.13 Citrix acquires Podio (social business collaboration) Apr‐12 n.a.14 Yammer acquired OneDrum (Microsoft Office collaboration tool) Apr‐12 n.a.15 Avaya acquired RADVISION (videoconferencing technology) Mar‐12 23016 Vocus acquired iContact (email marketing services) Feb‐12 16917 Appcelerator acquired Cocoafish (mobile app infrastructure provider) Feb‐12 n.a.18 InfoSpace acquried TaxACT (online tax solutions) Jan‐12 28819 LogMeIn acquired Bold Software (web chat and customer comm.) Jan‐12 1720 Blackbaud acquired Convio (fundraising software) Jan‐12 294Total 3,365
Software, Internet & IT Infrastructure M&A Report: 2012 – Mid Year Peachtree Capital Advisors Page 4 Cloud hype in M&A simmered down in the first half of 2012. Storage, a veteran player in the current IT player landscape, was a well‐sought‐after acquisition target in the first half of the year. In the never‐ending quest to reduce latency and total cost of ownership, IT Infrastructure companies avoided high‐priced unproven venture‐backed cloud startups for reliable and experienced veteran storage companies. Companies allowing or enhancing the ability to store and retrieve data more efficiently were the primary acquisition targets in the first half of 2012. IT Infrastructure companies are positioning themselves to offer a complete solution to the big data paradigm. “Big data” here we go! Virtualization, Storage and Cloud Infrastructure DatePrice$M1 VMware acquires DynamicOps (multi‐hypervisor mgt service) Jul‐12 100 Est.2 SanDisk acquires Schooner (enterprise flash storage provider) Jun‐12 n.a.3 VMware acquires Wanova (virtual deskop infrastructure) Jun‐12 n.a.4 EMC acquired XtremIO (flash‐based SSD storage) May‐12 4305 AppSense acquired RAPsphere (mobile security) May‐12 n.a.6 VMware acquires Cetas (Hadoop analytics) Apr‐12 n.a.7 Dell acquired Wyse Technology (thin client software and hardware) Apr‐12 n.a.8 AMD acquired SeaMicro (servers) Mar‐12 3349 EMC/Isilon acquired Likewise (storage mgt software) Mar‐12 n.a.10 EMC Corp. acquired Pivotal Labs (agile software tools and consulting) Mar‐12 n.a.11 Cisco acquires NDS (cloud‐based video, content delivery and security) Mar‐12 5,00012 SanDisk acquires FlashSoft (solid‐state drive caching software) Feb‐12 n.a.13 Dell acquired AppAssure (enterprise backup and storage) Feb‐12 n.a.14 Cisco acquired Lightwire (CMOS silicon technology ‐ optical networks) Feb‐12 27115 Rackspace acquires SharePoint911 (SharePoint consulting) Feb‐12 n.a.16 Intel acquires QLogic InfiniBand (networking and software products) Jan‐12 12517 Symantec acquired LiveOffice (cloud storage and archiving vendor) Jan‐12 11518 Internap acquired Voxel (hosting and cloud services provider) Jan‐12 3019 Apple acquired Anobit (NAND flash memory technology) Jan‐12 125Total w/o NDS 6,530
Software, Internet & IT Infrastructure M&A Report: 2012 – Mid Year Peachtree Capital Advisors Page 5 This is shaping up to be a solid year for Enterprise Software M&A. Sales channel confidence and visibility are the two major factors contributing to the increase in Enterprise Software M&A transactions involving a change of control. When orders are actually being fulfilled and the sales force can give executives better visibility, corporate executives become more confident in their own planning as well as their sales forces’ abilities to sell a newly acquired product or feature. Although sales channel confidence was the primary driver for Enterprise Software M&A in the first half of 2012, there were a few additional themes that surfaced: Security; Positioning for the cloud; and Is the IPO market really back? As it relates to M&A transactions in enterprise software, securing the cloud and the ability to provide cloud services were the primary factors driving acquisition. Vendors sought acquisitions that would provide them with the capability to secure and service these new cloud environments—whether they were private enterprise clouds or public hosted cloud environments. Enterprise Software DatePrice$M1 Ixia acquired BreakingPoint (network security testing) Jul‐12 1602 Dell acquires Quest Software (network mgt software) Jul‐12 2,4003 mindSHIFT (Best Buy) acquired White Glove Technologies (MSP) Jun‐12 n.a.4 Ixia acquires Anue Systems (network monitoring) May‐12 1455 IBM acquires Tealeaf (customer experience analytics software) May‐12 n.a.6 SAP acquires Ariba (cloud‐based commerce software) May‐12 4,3007 Thoma Bravo acquired Network Instruments (network mgt software) Apr‐12 n.a.8 IPO Splunk (web monitoring, analysis and security software) Apr‐12 2299 IPO Proofpoint (cloud‐based security software) Apr‐12 8210 IPO Infoblox (network mgt software) Apr‐12 12011 IBM acquires Varicent (compensation mgt and analytics software) Apr‐12 n.a.12 IBM acquires Vivisimo (discovery and data analysis software) Apr‐12 n.a.13 BMC acquires Abydos (IT service mgt software) Apr‐12 n.a.14 Dell acquired Clerity Solutions (application modernization) Apr‐12 n.a.15 VaultLogix has acquired DataPreserve (online backup service provider) Apr‐12 n.a.16 ASG Software acquired NTRglobal (help desk and IT service mgt) Apr‐12 n.a.17 The Aldridge Company acquired Serenity Systems (MSP) Apr‐12 n.a.18 Ipswitch acquires iOpus (Web application performance testing) Apr‐12 n.a.19 Cisco acquires ClearAccess (network mgt and provisioning software) Apr‐12 n.a.20 Dell acquired SonicWALL (network mgt security software) Mar‐12 n.a.21 Trustwave acquired M86 Security (web and email security software) Mar‐12 n.a.22 ThreatMetrix acquired TrustDefender (malware and securing browsing) Mar‐12 n.a.
Software, Internet & IT Infrastructure M&A Report: 2012 – Mid Year Peachtree Capital Advisors Page 6 In addition, the IPO market appeared to make a comeback in 2012. Companies like Splunk and Proofpoint decided to conduct initial public offerings rather than run an M&A sale process. When there are no logical buyers that can pay up or there are not many potential strategic buyers, oftentimes an IPO is the only way to go for early investors to generate a liquidity event. The desire for liquidity may be driving many of these IPOs as opposed to a healthy stable stock market. Enterprise Software (cont) DatePrice$M23 SolarWinds acquired EminentWare (patch management software) Mar‐12 n.a.24 Lexmark acquired BDGB Enterprise/Brainware (ECM and data mgt) Mar‐12 14825 GreenPages acquired LogicsOne (cloud consulting company) Mar‐12 n.a.26 Alert Logic acquired Armorlogic (web application security solutions) Mar‐12 n.a.27 ManTech acquired HBGary (malware detection software) Feb‐12 n.a.28 Juniper Networks acquired Mykonos (web security software) Feb‐12 8029 Quest Software acquired BlueFolder (field service mgt software) Feb‐12 n.a.30 BMC acquires Numara Software (mid‐market IT mgt solutions) Feb‐12 30031 Silverback acquired PowerSteering (cloud‐based project mgt) Feb‐12 n.a.32 Silverback acquired Tenrox (cloud‐based PSA and proj workforce mgt) Feb‐12 n.a.33 All Covered/Konica Minolta acquired Service Assurance (MSP) Feb‐12 n.a.34 Technology Capital Investors acquired Savid Technologies (MSP) Feb‐12 n.a.35 Oracle acquired Taleo (talent management software) Feb‐12 1,90036 Akamai acquires Blaze Software (web performance optimization softw) Feb‐12 n.a.37 Twitter acquired Dasient (web security software) Jan‐12 n.a.38 IBM acquires GreenHat (cloud‐based software testing platform) Jan‐12 n.a.39 IBM acquires Worklight (mobile app and infrastructure software) Jan‐12 7040 BMC acquires I/O Concepts (mainframe console solutions) Jan‐12 n.a.41 Net Optics acquired nMetrics (network application software) Jan‐12 n.a.42 ePlus acquired VantiCore (Cisco‐centric MSP) Jan‐12 n.a.43 Xerox acquired LaserNetworks (managed print services) Jan‐12 n.a.44 GovDelivery acquired GovInteractive (web‐based alerting) Jan‐12 n.a.45 Juniper acquired Bitgravity (services mgt layer of CDN technology) Jan‐12 n.a.Total 9,934
Software, Internet & IT Infrastructure M&A Report: 2012 – Mid Year Peachtree Capital Advisors Page 7 Enterprise mobile is still in the early stages of defining itself as a sector. The honest truth is that most people still work on desktops or laptops. Tablets and smart phones are finding their way into niche environments like hospitals, restaurants and the hospitality industry, but attorneys are still not writing legal briefs on their cell phones. For the most part, security and network access points have defined this sector. It is not the scope of this report to define this sector, but to report on enterprise‐related M&A transactions in the mobile sector. As seen in the chart below, there were 414 million PCs shipped worldwide in 2011 versus 63 million tablets according to data from Canalys Research. Although the growth rate of tablets is much higher than PCs, the unit number shipped is substantially lower. Although the BYOD phenomenon has created a host of challenges for CIOs, tablets have not found their way into the enterprise in a wholesale manner. Source: Canalys Research 2012. Enterprise Mobile DatePrice$M1 LANDesk Software acquired Wavelink (mobile device mgt) Jun‐12 n.a.2 Cvent acquired CrowdCompass (mobile event app creation software) Jun‐12 103 Cvent acquired Seed Labs (mobile apps for events) Jun‐12 44 Motorola Solutions acquired Psion (mobile handheld device) Jun‐12 2005 Google acquired Quickoffice (mobile office productivity) Jun‐12 n.a.6 Citrix acquired Bytemobile (mobile network optimization) Jun‐12 435 Est.7 AP acquired Syclo (enterprise mobile applications) Apr‐12 n.a.8 Sophos acquired Dialogs Software (mobile device mgt vendor) Apr‐12 n.a.9 Symantec acquired Nukona (mobile application mgt solutions) Mar‐12 n.a.10 Groupon acquired Hyperpublic (geolocation technology) Feb‐12 n.a.11 Groupon acquires Kima Labs (mobile payments) Feb‐12 n.a.12 Deloitte acquired Ubermind (mobile app and lifecyle software) Jan‐12 40 Est.Total 689
Software, Internet & IT Infrastructure M&A Report: 2012 – Mid Year Peachtree Capital Advisors Page 8 The market cap of the companies in this comps set increased 13% in the first half of 2012 while excluding the IPOs market caps that occurred during the year. The primary reason for this was the substantial increase in the large cap tech companies augmented by the surge in Apple’s stock in the first half of the year. Apple’s market cap increased 45% in the first half of 2012 from $376 billion to $546 billion. Microsoft and Oracle’s market cap increased a respective 18% and 12% during the first half as well. Application software companies were trading on average at 3.6x revenue and 21.4x EBITDA at the end of the first half of 2012. Publicly traded enterprise software companies had similar average valuations of 4.1x revenue and 15.7x EBITDA. (The companies listed below in light grey were not included in the averages.) Public Company Valuations ($M)Sector CompanyMarket CapJan 1, 2012%ChgMarket CapJun 31, 2012TotalDebtCashEnterpriseValueLTMRevenueLTMEBITDAREVMutipleEBITDAMultipleApplication Adobe 14,010 14% 15,920 1,510 3,000 14,430 4,340 1,490 3.3x 9.7xSoftware Intuit 15,800 10% 17,430 499 1,520 16,409 4,150 1,420 4.0x 11.6xLogMeIn 954 -21% 752 0 192 559 125 16 4.5x 34.8xOpen Text 2,930 -2% 2,870 604 509 2,965 1,190 325 2.5x 9.1xPegasystems 1,130 11% 1,250 0 88 1,162 425 27 2.7x 42.3xTIBCO 3,940 22% 4,800 554 647 4,707 992 225 4.7x 20.9xJive 945 23% 1,160 12 166 1,007 87 (39) 11.6x n/mMEAN 3.6x 21.4xEnterprise Software BMC Software 5,620 22% 6,870 844 1,580 6,134 2,170 675 2.8x 9.1x& Services CA Technologies 10,040 27% 12,780 1,440 2,690 11,530 4,810 1,730 2.4x 6.7xCitrix 11,560 35% 15,630 0 867 14,763 2,300 596 6.4x 24.8xCompuware 1,850 10% 2,030 45 99 1,976 1,010 177 2.0x 11.2xEMC 44,140 22% 53,820 1,720 6,340 49,200 20,490 4,850 2.4x 10.1xJDA Software 1,400 -9% 1,270 273 286 1,258 672 165 1.9x 7.6xMicrosoft 218,460 18% 256,980 13,150 58,350 211,780 73,030 30,700 2.9x 6.9xOracle 129,100 12% 145,010 16,470 30,680 130,800 37,120 16,050 3.5x 8.1xQuest Software 1,560 51% 2,350 104 263 2,191 881 160 2.5x 13.7xRackspace Hosting, Inc. 5,640 5% 5,940 144 187 5,897 1,100 317 5.4x 18.6xRed Hat 7,990 36% 10,900 0 819 10,081 1,180 262 8.5x 38.5xVMware, Inc. 35,200 11% 38,900 450 5,220 34,130 3,980 1,040 8.6x 32.8xInfoblox n.a. 1,048 0 157 891 164 2 5.4x 492.0xCornerstone OnDemand 896 33% 1,190 5 87 1,107 81 (21) 13.6x n/mFusion-io 1,990 -2% 1,950 0 220 1,730 197 n.a. 8.8x n.a.ProofPoint n.a. 526 5 13 518 88 (11) 5.9x n/mQlik Technologies 2,066 -9% 1,890 0 206 1,684 337 21 5.0x 81.3xSolarWinds 2,050 57% 3,220 0 171 3,049 215 103 14.2x 29.6xSplunk 2,862 0 266 2,596 138 (10) 18.9x n/mMEAN 4.1x 15.7x
Software, Internet & IT Infrastructure M&A Report: 2012 – Mid Year Peachtree Capital Advisors Page 9 Although Salesforce.com is not included in the Internet Software and Marketing Services sector average, it is noteworthy to discuss the company’s rebound in its market capitalization in the first half of 2012. Salesforce.com is currently trading at 7.7x Revenue, which is below the 10x Revenue market cap the company traded for in the past. Since January 2012, Salesforce.com added $5.3 billion in market cap—not bad for six months of work. Let it be known that it is not considered overpaying if an acquisition in the hundreds of millions of dollars can help to add many more billions in market capitalization. Public Company Valuations ($M)Sector CompanyMarket CapJan 1, 2012%ChgMarket CapJun 31, 2012TotalDebtCashEnterpriseValueLTMRevenueLTMEBITDAREVMutipleEBITDAMultipleDiversified Computer Apple 376,410 45% 546,080 0 28,540 517,540 142,360 53,270 3.6x 9.7xSystems Dell 26,280 -17% 21,880 9,000 13,720 17,160 61,480 5,060 0.3x 3.4xHewlett Packard 51,110 -22% 39,650 30,120 8,340 61,430 124,040 14,730 0.5x 4.2xIBM 216,720 4% 225,600 32,050 12,390 245,260 106,980 26,780 2.3x 9.2xMEAN 1.7x 6.6xInternet Software & Google 209,200 -10% 189,110 7,710 47,620 149,200 39,980 14,800 3.7x 10.1xMarketing Services Keynote Systems 355 -27% 260 0 44 216 118 22 1.8x 9.9xLivePerson 668 57% 1,050 0 108 942 139 27 6.8x 35.2xVerisign 5,680 21% 6,880 693 1,390 6,183 796 427 7.8x 14.5xDigital River 561 0% 559 354 701 211 402 58 0.5x 3.7xGroupon 13,323 -48% 6,870 0 1,160 5,710 1,870 (45) 3.1x n/mSalesforce.com 13,800 38% 19,080 550 710 18,920 2,460 106 7.7x 178.7xMEAN 5.0x 17.4xIT Services, Cognizant 19,430 -6% 18,270 0 2,490 15,780 6,460 1,320 2.4x 12.0xOutsourcing MicroStrategy 1,170 21% 1,410 0 211 1,199 585 28 2.0x 43.6x& Training Perficient, Inc. 306 17% 359 6 3 362 266 32 1.4x 11.2xUnisys 854 0% 857 296 655 498 3,780 411 0.1x 1.2xMEAN 2.0x 22.3xHealthcare Cerner 10,380 36% 14,090 153 894 13,349 2,310 629 5.8x 21.2xSoftware & IT Allscripts 3,570 -42% 2,080 346 176 2,250 1,470 247 1.5x 9.1xQuality Systems 2,180 -25% 1,630 0 139 1,491 430 126 3.5x 11.8xMEAN 3.6x 14.1x
Software, Internet & IT Infrastructure M&A Report: 2012 – Mid Year Peachtree Capital Advisors Page 10 As seen below, the overall average for companies in the Software, Internet & IT Infrastructure sector is 3.3x Revenue and 14.7x EBITDA. These average valuation multiples for publicly traded software companies are slightly higher than at the beginning of the year where the average multiples were 3.3x Revenue and 13.2x EBITDA. Public Company Valuations ($M)Sector CompanyMarket CapJan 1, 2012%ChgMarket CapJun 31, 2012TotalDebtCashEnterpriseValueLTMRevenueLTMEBITDAREVMutipleEBITDAMultipleNetworking Akamai Technologies 5,790 -2% 5,690 0 404 5,286 1,200 504 4.4x 10.5xServices Cisco Systems 97,200 -5% 91,980 16,370 48,410 59,940 45,570 12,840 1.3x 4.7xF5 Networks 8,430 -6% 7,900 0 490 7,410 1,270 417 5.8x 17.8xInternap 298 10% 328 107 31 404 252 42 1.6x 9.6xJuniper Networks 10,740 -20% 8,640 999 3,430 6,209 4,380 698 1.4x 8.9xRiverbed Technology 3,640 -30% 2,560 0 484 2,076 745 118 2.8x 17.6xMEAN 2.9x 11.5xSecurity Symantec 11,540 -9% 10,530 2,040 3,210 9,360 6,730 1,800 1.4x 5.2xMEAN 1.4x 5.2xSemiconductor Broadcom 15,830 17% 18,600 1,200 1,680 18,120 7,190 1,090 2.5x 16.6xCirrus Logic 1,010 90% 1,920 0 182 1,738 427 90 4.1x 19.4xIntegrated Device Tech 776 3% 800 0 325 474 527 59 0.9x 8.0xIntel 123,480 9% 134,080 7,520 13,750 127,850 54,060 23,540 2.4x 5.4xMarvell Technology 8,080 -21% 6,360 0 2,200 4,160 3,390 687 1.2x 6.1xMicrochip Technology 7,000 -9% 6,400 355 1,460 5,295 1,380 497 3.8x 10.7xQualcomm 91,950 4% 95,450 1,180 15,080 81,550 17,360 6,460 4.7x 12.6xSilicon Laboratories 1,820 -11% 1,620 2 333 1,288 498 87 2.6x 14.8xMEAN 2.8x 11.7xStock prices as of 6/29/12. 3.3x 14.7xCompanies in grey removed from mean. Sources: CapitalIQ; Company SEC Filings. 2.7x 10.7xOVERALL MEANOVERALL MEDIAN
Software, Internet & IT Infrastructure M&A Report: 2012 – Mid Year Peachtree Capital Advisors Page 11 Half a billion dollars was raised in the Enterprise Application category, which primarily consists of horizontal software applications that can be used by a majority of an enterprises employees. CompanyAmount$M Lead Investor1 Affinity Solutions 14.5 Chestnut Hill Ventures2 AtHoc 5.6 Intel Capital3 Attachments.me 2 Foundry4 Avalara 20 Battery5 BlueJeans 25 NEA6 Clarizen 12 Vintage Partners7 Cloze 1.2 Greylock Partners8 Dwolla 5 Union Square Ventures9 Evernote 70 Meritech Capital and CBC Capital10 Freshplum 1.4 NEA11 Hoopla 2.8 Safeguard Scientifics12 Huddle 24 Jafco Ventures13 iCharts 3.1 Regehr Capital14 InsightOne 4.3 Norwest Venture Partners15 Leads360 15 Volition Capital16 Manta 44 Norwest Venture Partners17 MetaMarkets 15 Khosla Ventures18 MOGL 10 Sigma Partner19 oDesk 15 Henry Ellenbogen 20 Qualtrics 70 Accel & Sequoia 21 Recurly 6 BV Capital22 Solum 17 Andreessen Horowitz23 SugarCRM 33 NEA24 Thismoment 22 Trident Capital25 Tracelytics 5.2 Bain Capital26 Traxpay 4 Earlybird Ventures27 Unified 14 Conde Nast28 Visual IQ 12 Volition Capital29 Wave Accounting 12 Social+Capital 30 WhiteSky 7.5 Prism VentureWorks31 Wrike 1 TMT Investments32 Yext 27 MarkerTotal $520.6 Application, Internet Marketing Services, Collaboration and Web Conferencing
Software, Internet & IT Infrastructure M&A Report: 2012 – Mid Year Peachtree Capital Advisors Page 12 Notable investments in the Infrastructure sector were IVP’s investment in Eucalyptus, Weather Investment II’s leading the $85 million round in Joyent to expand internationally and Battery’s investment in SingleHop, which looks like more like a later‐stage “veteran” private equity play rather than a new innovative technology startup. Company $M Lead Investor1 Apica 5 SEB Venture Capital2 Appirio 60 General Atlantic3 Astute Networks 12 Samsung Venture Investment4 Bitcasa 7 Pelion and Horizons Ventures5 Bromium 26.5 Highland Capital6 Cloud Cruiser 6 ONSET Ventures7 Continuuity n.a. Battery Ventures8 CopperEgg 2.1 Silverton Partners9 Delphix 25 Jafco Ventures10 Eucalyptus 30 Institutional Venture Partners11 Joyent 85 Weather Investment II12 Opscode announced 19.5 Ignition Partners13 Panzura 15 Opus Capital14 ScienceLogic 15 Intel Capital15 SingleHop 27.5 Battery Ventures16 Starboard Storage Systems 13 JP Ventures GmbH17 SugarSync 10 ORIX Venture Finance18 SugarSync 15 Coral Group19 Violin Memory 50 Toshiba and Juniper Networks20 Ziften 5.5 Fayez Sarofim & Co.21 Total $429.1 Virtualization, Storage and Cloud Infrastructure
Software, Internet & IT Infrastructure M&A Report: 2012 – Mid Year Peachtree Capital Advisors Page 13 There were 21 Enterprise Software capital raise transactions totaling $182 million in the first half of 2012. Security played a major role in the first half of 2012. One of the more noteworthy capital raise transactions was Venrock and US Venture Partners investing in a young team in an old space—enterprise security. Appthority is a startup that secures enterprise apps. Again, the enterprise Mobile sector is still largely undefined. Insight Ventures’ $15 million investment in Kony is definitely noteworthy. CompanyAmount$M Lead Investor1 41st Parameter 13 Georgian Partners 2 AlienVault 8 Trident Capital3 Appthority 6.25 Venrock and US Venture Partners4 Birst 26 Sequoia Capital5 Bluebox 9.5 Andreessen Horowitz6 Buddy.com 1.1 Transmedia Capital7 CloudLock 8.7 Ascentand Cedar Fund 8 Crashlytics 5 Flybridge and Baseline9 Domo 20 Institutional Venture Partners10 Duo Security 5 Google Ventures11 ForgeRock 7 Accel12 Freshdesk 5 Tiger Global13 InsightSquared 4.5 Bessemer Venture Partners14 MemSQL 5 First Round Capital15 MineralTree 6.3 Fidelity Growth Partners16 Mobiles Republic 3 XAnge Private Equity17 OneID 7 Khosla & North Bridge18 Pantheon 5 Foundry Group19 Plexxi 20 North Bridge and Matrix Partners20 PubNub 4.5 Relay Ventures21 UnboundID 12.5 OpenView Venture PartnersTotal $182.4 Enterprise SoftwareCompanyAmount$M Lead Investor1 CloudOn 16 The Social+Capital Partnership2 Crittercism 5.5 Bob Borchers3 Kony 15 Insight Ventures4 Malauzai Software 2.3 n.a.5 Tello 2.7 True, Bullpen Capital, and SV Angel6 ViVOTech n.a. Existing InvestorsTotal $41.5 Enterprise Mobile