Embedded Specialized Accomplished
Summer 2013
SaaS Report
2
Summer 2013
Siemer SaaS Report
Table of Contents
Section I Industry Trends and Dynamics
Section II SaaS Market Overview ...
INDUSTRY TRENDS AND DYNAMICS
4
Summer 2013
Siemer SaaS Report
The SaaS Opportunity
The SaaS business model continues to be an industry darling in the r...
5
Summer 2013
Siemer SaaS Report
SaaS Trends
The SaaS market is expected to grow 16.8% from $14.3bn in 2012 to $16.7bn in ...
6
Summer 2013
Siemer SaaS Report
SaaS Revenue Trends
SaaS companies expect to see higher revenues as the business model ri...
7
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Market Performance
16.0%
5.0%
14.0%
14.0%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0...
8
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Technology M&A by Industry
From 2011 to 2012, Software M&A deals increased from 32.1% to ...
9
Summer 2013
Siemer SaaS Report
Migration Towards Mobile Technology
A growing smartphone industry necessitates compatibil...
10
Summer 2013
Siemer SaaS Report
Migration Towards Mobile Technology
Mobile data traffic growth has increased considerabl...
11
Summer 2013
Siemer SaaS Report
Data security
Cloud outages
Compliance with government data-
protection regulations
Inco...
12
Summer 2013
Siemer SaaS Report
SaaS Concerns
Analysts argue that SaaS operational performance expectations are over-est...
13
Summer 2013
Siemer SaaS Report
SaaS is a Capital Intensive Business Model
SaaS companies have traditionally required he...
14
Summer 2013
Siemer SaaS Report
Collaboration
Perform project planning
Run seamless project management program
Effective...
SAAS MARKET OVERVIEW BY REGION
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7,800.0
2,835.5
1,157.9
331.1
9,100.0
3,369.4
1,429.3
419.7
$0
$2,000
$4,000
$6,000
$8,0...
17
Summer 2013
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Flexibility of customization
Limited software integration to
existing systems
Global Mar...
18
Summer 2013
Siemer SaaS Report
Emerging
F&A
HR
Project and portfolio
Business intelligence
Established
Purchasing
CRM
C...
19
Summer 2013
Siemer SaaS Report
Asia/Pacific
Financials and accounting
(particularly in China & India)
ERP
Office suites...
20
Summer 2013
Siemer SaaS Report
Global Markets – Latin America
SaaS revenues in Latin America reached an estimated $419....
SAAS SUBSECTOR: CRM
22
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Siemer SaaS Report
Opportunity
CRM remains the largest SaaS system application worldwide
“Social Era” commu...
23
Summer 2013
Siemer SaaS Report
Growth Drivers
Vested vendor interests
Ubiquitous Internet accessibility
Easier-to-deplo...
24
Summer 2013
Siemer SaaS Report
$3,852.0
$4,484.0
$5,073.0
$5,707.0
$6,397.0
$3,244.0
$3,837.0
$4,611.0
$5,416.0
$6,332....
SAAS SUBSECTOR: ERP
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ERP SaaS
ERP SaaS consolidates internal and external data to manage business operations
...
27
Summer 2013
Siemer SaaS Report
ERP SaaS
Cost of capital determines SaaS savings as compared to On-Premise systems (mid-...
SAAS SUBSECTOR: HR MANAGEMENT
29
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HRM SaaS
Growing demands for HR solutions
$10.0bn worldwide market
Growing at 18.0%-22.0...
30
Summer 2013
Siemer SaaS Report
Companies that adopt SaaS HR solutions
Outperform the competition based on key comparabl...
31
Summer 2013
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SELECT TRANSACTION CASE STUDIES
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Microsoft – Yammer M&A Case Study
Source: Capital IQ and Siemer & Associates’ Proprietar...
33
Summer 2013
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SAP – Ariba M&A Case Study
Date Announced: May 22nd, 2012
Date Closed: October 1st, 2012...
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Siemer SaaS Report
Date Announced: May 6th, 2013
Market Cap: $6.5bn
TEV: $6.3bn
LTM Revenue: $2.3bn
LTM EBI...
APPENDIX – SAAS BUSINESS MODEL FACTORS
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Summary of Key Metrics
The following metrics represent key ratios demonstrated by severa...
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Summer 2013
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Key Metrics for Growth: CMRR
Committed Monthly Recurring Revenue (CMRR)
Full Transparenc...
38
Summer 2013
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CAC ratio: Defining your S&M spend
Key Metrics for Growth: Customer Acquisition Cost (CA...
39
Summer 2013
Siemer SaaS Report
Customer Lifetime Value (CLTV) Measures Profitability
This analysis can help management ...
40
Summer 2013
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Churn Defines the Viability of the Business Model
MRR churn (<12.0% p.a. and < Upsell)
C...
APPENDIX – PUBLIC AND TRANSACTION COMPARABLES
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Select SaaS Public Comparables
Source: CapitalIQ and Siemer Proprietary Research
(figure...
43
Summer 2013
Siemer SaaS Report
Select SaaS Public Comparables
Source: CapitalIQ and Siemer Proprietary Research
(figure...
44
Summer 2013
Siemer SaaS Report
Select Precedent SaaS Financings
Source: CapitalIQ and Siemer Proprietary Research
Amoun...
45
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Siemer SaaS Report
Amount
Date Company Description Investors Raised ($mm) Round
05/22/13 SLYCE Commerce Dev...
46
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Siemer SaaS Report
Select Precedent SaaS Financings
Source: CapitalIQ and Siemer Proprietary Research
Amoun...
47
Summer 2013
Siemer SaaS Report
Select Precedent SaaS Financings
Source: CapitalIQ and Siemer Proprietary Research
Amoun...
48
Summer 2013
Siemer SaaS Report
Source: CapitalIQ and Siemer Proprietary Research
Select Precedent SaaS Financings
Amoun...
49
Summer 2013
Siemer SaaS Report
Select Precedent SaaS Financings
Source: CapitalIQ and Siemer Proprietary Research
Amoun...
50
Summer 2013
Siemer SaaS Report
Select Precedent SaaS Financings
Source: CapitalIQ and Siemer Proprietary Research
Amoun...
51
Summer 2013
Siemer SaaS Report
Select Precedent SaaS Financings
Source: CapitalIQ and Siemer Proprietary Research
Amoun...
52
Summer 2013
Siemer SaaS Report
Select Precedent SaaS Financings
Source: CapitalIQ and Siemer Proprietary Research
Amoun...
53
Summer 2013
Siemer SaaS Report
Select Precedent SaaS Financings
Source: CapitalIQ and Siemer Proprietary Research
Amoun...
54
Summer 2013
Siemer SaaS Report
Select Precedent SaaS Financings
Source: CapitalIQ and Siemer Proprietary Research
Amoun...
55
Summer 2013
Siemer SaaS Report
Select Precedent SaaS Transactions
Source: CapitalIQ and Siemer Proprietary Research
(fi...
56
Summer 2013
Siemer SaaS Report
Select Precedent SaaS Transactions
(figures in millions of $USD) EV / LTM
Date Announced...
57
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Siemer SaaS Report
Select Precedent SaaS Transactions
Source: CapitalIQ and Siemer Proprietary Research
(fi...
58
Summer 2013
Siemer SaaS Report
Select Precedent SaaS Transactions
(figures in millions of $USD) EV / LTM
Date Announced...
59
Summer 2013
Siemer SaaS Report
Select Precedent SaaS Transactions
Source: CapitalIQ and Siemer Proprietary Research
(fi...
60
Summer 2013
Siemer SaaS Report
Select Precedent SaaS Transactions
(figures in millions of $USD) EV / LTM
Date Announced...
61
Summer 2013
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Select Precedent SaaS Transactions
Source: CapitalIQ and Siemer Proprietary Research
(fi...
62
Summer 2013
Siemer SaaS Report
Select Precedent SaaS Transactions
Source: CapitalIQ and Siemer Proprietary Research
(fi...
63
Summer 2013
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Select Precedent SaaS Transactions
(figures in millions of $USD) EV / LTM
Date Announced...
64
Summer 2013
Siemer SaaS Report
Select Precedent SaaS Transactions
Source: CapitalIQ and Siemer Proprietary Research
(fi...
65
Summer 2013
Siemer SaaS Report
Select Precedent SaaS Transactions
(figures in millions of $USD) EV / LTM
Date Announced...
Contact Information
Hong Kong Los Angeles Singapore
Siemer & Associates, LLC Member FINRA/SIPC www.siemer.com
1333 2nd Str...
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Siemer & Associates SaaS Report 2013

  1. 1. Embedded Specialized Accomplished Summer 2013 SaaS Report
  2. 2. 2 Summer 2013 Siemer SaaS Report Table of Contents Section I Industry Trends and Dynamics Section II SaaS Market Overview by Region Section III SaaS Subsector: CRM Section IV SaaS Subsector: ERP Section V Section VI Section VII Section VIII SaaS Subsector: HR Management Select Transaction Case Studies Appendix – SaaS Business Model Factors Appendix – Public and Transaction Comparables
  3. 3. INDUSTRY TRENDS AND DYNAMICS
  4. 4. 4 Summer 2013 Siemer SaaS Report The SaaS Opportunity The SaaS business model continues to be an industry darling in the recurring revenue business, venture capital/PE world and public markets, but growth needs to be managed appropriately ― 83.0% of all companies expect to adopt SaaS technology ― Revenue will be generated from multiple sources (existing base, upsells, new accounts) ― Sales & marketing strategies require utilizing both its internal sales force and various distribution channels ― The contract to internet Media companies, SaaS companies are driven less by media hype SaaS business models tend to require significant capital to reach breakeven ― Industry veterans and strong CEOs will recognize this and build their startup appropriately ― Cash needs can be partially addressed through discounted customer “up-front” payments Today’s market is a shifting landscape ― Valuations are down significantly for smaller opportunities, with less impact to quality players ― Almost no license software companies are being funded Source: Wall Street Research
  5. 5. 5 Summer 2013 Siemer SaaS Report SaaS Trends The SaaS market is expected to grow 16.8% from $14.3bn in 2012 to $16.7bn in 2013, with projections of $21.3bn for 2015 Most large SaaS companies such as SAP and Oracle reported solidly higher sequential revenues in Q4 2012, averaging 5.8% ― Although initial 2013 outlooks have been conservative, publicly traded SaaS companies historically present lower EPS in Q1 than in Q4 due to early year investments to support accelerated organic growth Overall valuations for the SaaS industry have been generally attractive, as companies have typically been trading at over 4.5x LTM revenue The growth in “smart computing,” in which apps provide direct access to data that is used for decision making purposes, will continue fueling growth in SaaS ― Smart computing apps overlap with SaaS products, as the browser-based access model for SaaS products works better for collaboration among internal and external participants than behind-the-firewall deployments The European SaaS market is expected to slow, however, a projected annual IT spending growth of 9.0% in emerging markets will continue to drive the market forward M&A in the SaaS space is projected to increase significantly, with projections indicating over $25.0bn in SaaS acquisitions over the next 20 months, compared to $17.0bn in the prior 20-month period Continuing increases in the proliferation of Mobile and PaaS will continue to fuel overall SaaS growth Source: Gartner, Forrester
  6. 6. 6 Summer 2013 Siemer SaaS Report SaaS Revenue Trends SaaS companies expect to see higher revenues as the business model rises in popularity and scope Source: Gartner $10.0 $12.1 $14.3 $16.7 $18.9 $21.3 $0 $5 $10 $15 $20 $25 2010A 2011A 2012E 2013P 2014P 2015P SaaSRevenue($bn)
  7. 7. 7 Summer 2013 Siemer SaaS Report Market Performance 16.0% 5.0% 14.0% 14.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% Cloud Computing & SaaS Enterprise NASDAQ Composite Index Overall Coverage Median 2013 Median Stock Appreciation While SaaS companies have appreciated approximately in line with overall market indicators, their relatively stronger growth profiles indicate a higher potential upside compared to general market averages Cloud computing and SaaS companies have outperformed enterprise and security firms overall, with SaaS mean and median stock growth reaching 13.0% and 16.0%, respectively, compared to 9.0% and 5.0% for enterprise and security, respectively Past seasonal trends indicate a likely gradual increase in SaaS growth in the second half of the year Source: Wall Street Research
  8. 8. 8 Summer 2013 Siemer SaaS Report Technology M&A by Industry From 2011 to 2012, Software M&A deals increased from 32.1% to 35.4% of the technology industry’s deal flow 19.7% 7.7% 15.2% 5.7% 18.0% 17.0% 13.5% 32.4%32.1% 35.4% 0% 10% 20% 30% 40% 2011 2012 Semiconductor IT Services Internet Hardware Software Company growth has become more reliant on web-based application software SaaS can help make existing company hardware more easily accessible by consumers Trends show that corporations seek to establish industry staying power by implementing progressive technology Source: Wall Street Research
  9. 9. 9 Summer 2013 Siemer SaaS Report Migration Towards Mobile Technology A growing smartphone industry necessitates compatibility Growing reliance on mobile apps to promote tablet and mobile compatibility ― Apps run in conjunction with cloud-based services ― Greater efficiency and ease-of-access 4G capabilities eliminate the need for specialized interfaces and physical systems ― Multiple users can access important resources over a network By 2015, mobile application development will exceed PC projects by four times Adoption of tablets for enterprise planning will grow by nearly 50.0% annually ― Popularity of “Bring-Your-Own-Device (BYOD)” programs increase ease-of-use ― Tablet wireless demand as a percentage of total wireless demand is projected to rise 2013 Smart Mobile Device (SMD) sales are expected to: ― Grow by 20.0% ― Generate 20.0% of IT sales ― Drive 57.0% of IT market growth Smart Mobile Device Growth 1.5 2.0 2.5 4.0 4.5 5.3 7.0 8.0 10.0 12.0 14.0 0.0 0.1 0.1 0.1 0.4 1.0 1.5 2.0 2.5 3.0 3.5 0 5 10 15 20 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Wireless Demand Excluding Tablets Tablet Wireless Demand Contribution Source: Wall Street Research Wireless Data Usage TrillionsofMegaBytes
  10. 10. 10 Summer 2013 Siemer SaaS Report Migration Towards Mobile Technology Mobile data traffic growth has increased considerably over the past year Source: Ericsson 10 12 15 20 25 30 40 45 60 80 110 160 180 200 220 300 380 400 490 620 770 830 1010 1300 0 200 400 600 800 1000 1200 1400 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 TotalMonthlyTraffic(PetaBytes)
  11. 11. 11 Summer 2013 Siemer SaaS Report Data security Cloud outages Compliance with government data- protection regulations Inconsistent performance across servers Software integration SaaS Concerns One size does not fit all ― SaaS delivery model is not a universal application across software systems ― CRM and human capital management (HCM) are a natural fit because both need solutions that can easily scale up or down and add new users ― Product lifecycle management (PLM) has slow levels of scalability and non-mobile end-users Relative cost effectiveness ― Various software such as business process management (BPM) have little to do with the derivative source of an application and more to do with organizational complexity, accounting for their lower SaaS application rate ― Hardware and software infrastructure costs for these software types are minimal to begin with ― This dramatically reduces cost advantages Distribution of mobility of the targeted end-user base Desired speed of software scalability Level of importance for the security of sensitive data Key Indicators Source: IDC More Disadvantages A non-viable solution for all software categories
  12. 12. 12 Summer 2013 Siemer SaaS Report SaaS Concerns Analysts argue that SaaS operational performance expectations are over-estimated despite higher revenue growth rates ― The general belief that SaaS companies generate free cash flow in relation to revenue at a rate similar to that of traditional software companies fails to take into account the higher capital expenditures and operational expenses of SaaS companies Recent research supports this claim, as the SaaS space has experienced significantly lower free cash flow since 2008, compared to perpetual based software companies such as Adobe The SaaS sector has actually shown relatively lower margins due to data-center hosting costs, which are not typically incurred by traditional software companies Free Cash Flow Growth Rates 10.5% 15.1% 10.2% 9.5% 17.4% 21.7% 24.2% 23.3% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 5 YR CAGR 3 YR CAGR 2012 Y/Y Growth 2011-2013E CAGR Perpetual SaaS 35.2% 40.3% 29.5% 22.2% 8.9% 8.7% -8.2% 11.3% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 5 YR CAGR 3 YR CAGR 2012 Y/Y Growth 2011-2013E CAGR Perpetual SaaS Source: Wall Street Research Revenue Growth Rates
  13. 13. 13 Summer 2013 Siemer SaaS Report SaaS is a Capital Intensive Business Model SaaS companies have traditionally required heavy upfront financing Several successful SaaS companies have historically raised over $20.0mm pre-IPO Capital requirements are expected to decline due to: ― Lower CAC (SaaS becoming mainstream, new channels, etc.) ― Lower IT costs (PaaS, LAMP stack, etc.) Heavy financing costs are offset by future growth, margins and licensing cash flow reliability Source: Wall Street Research $99.0 $50.0 $37.0 $29.0 $24.0 $12.0 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 SalesForce NetSuite Constant Contact LogMein Vocus Median SW Enterprise Capital Raised Pre-IPO for Select Public SaaS Companies (in millions)
  14. 14. 14 Summer 2013 Siemer SaaS Report Collaboration Perform project planning Run seamless project management program Effective and economical business solution Allow for work to be conducted in distributed environments Fastest growing vertical in SaaS SMEs (Small and Medium Enterprises) Large Enterprises Incorporate social networking Allow for flexibility and mobility Specific features as and when needed Facilitate company-wide task management Communicate with extended team of customers and venders SaaS for Enterprises – Framework for Customization and Application Business Logic Source: Wall Street Research E-mail service Management portal (incl. APIs) Advertising/Marketing Reporting Google integration Dashboard Website engine Webshop engine Document management Inventory CRM Accounting Payment module 24/7 Support Online and offline traning Business partner Enterprise Customer Social network integration
  15. 15. SAAS MARKET OVERVIEW BY REGION
  16. 16. 16 Summer 2013 Siemer SaaS Report 7,800.0 2,835.5 1,157.9 331.1 9,100.0 3,369.4 1,429.3 419.7 $0 $2,000 $4,000 $6,000 $8,000 $10,000 North America Europe Asia Latin America RegionalSaaSRevenue($mm) 2011A 2012E US 60% UK 6% Germany 6% Japan 4% Canada 4% France 3% Other 17% Global Market Trends 2011-2012 SaaS Global Market Revenue 2012 SaaS Global Market Volume Source: Wall Street Research North America has the highest overall growth due to the strength of its Internet infrastructure and a positive outlook for US tech market growth European markets remain stagnant due to recent economic conditions Asia sees increased growth due to a need for advanced software solutions Latin America sees huge technological development following economic advances US remains the clear leader ― Where the SaaS model was developed ― No cultural barriers Other nations are significantly behind ― Fear of 3rd party control ― Security concerns ― Lack of Internet bandwidth
  17. 17. 17 Summer 2013 Siemer SaaS Report Flexibility of customization Limited software integration to existing systems Global Markets – North America North America, specifically the US, represents the largest opportunity for SaaS and is the most mature of the regional markets ― NA projected to account for 60.8% of worldwide SaaS revenue by 2015 SaaS software revenues are estimated to be $9.1bn in 2012, up from $7.8bn in 2011 North America shows the highest SaaS deployments in expense management, financials, email and office suites There is greater use of web conferencing technology in North America than in other regions due to a highly distributed workforce The US is expected to be the primary growth market ― Strong demand for new mobile, cloud and smart technologies ― The US tech market is anticipated to have 5.4% growth in 2013, 6.7% growth in 2014 Primary Concerns Emerging Collaboration software Established Expense management Financials Email Office suites Web conferencing Prevalent Software Categories Speed of deployment Ease of programming and overall accessibility Limited capital expense Factors for SaaS Adoption Source: Forrester, Gartner
  18. 18. 18 Summer 2013 Siemer SaaS Report Emerging F&A HR Project and portfolio Business intelligence Established Purchasing CRM Collaboration software Global Markets – Europe 2012 SaaS revenues are estimated to be $3.2bn in Western Europe, up from $2.7bn in 2011, while SaaS revenues in Eastern Europe are estimated at $169.4mm from last year’s $135.5mm SaaS offerings and adoption rates in more developed sub-regions of Western Europe (e.g. UK, Ireland, Netherlands) are rapidly increasing as a result of: ― North America-based SaaS vendors entering the region ― Culturally open outlook toward technology adoption ― Well-established Internet infrastructures ― Increasing number of local European SaaS vendors The opportunity for SaaS adoption exists longer-term in the smaller emerging markets of Eastern Europe, the Middle East and Africa due to ongoing infrastructure challenges Prevalent Software Categories Security Ability to integrate existing applications Primary Concerns Total cost of ownership (TCO) Speed of deployment Regional scalability Global software accessibility Factors for SaaS Adoption Source: Forrester, Gartner
  19. 19. 19 Summer 2013 Siemer SaaS Report Asia/Pacific Financials and accounting (particularly in China & India) ERP Office suites Email CRM Japan CRM Email Groupware Global Markets – Asia SaaS revenues in Asia/Pacific are estimated to be $1.4bn in 2012, up from $1.2bn in 2011 ― Revenues in Japan alone, the largest SaaS market in the region, are estimated at $495.2mm in 2012, up from $427.0mm in 2011 Overall, SaaS adoption in the Asia/Pacific region is fragmented ― Mature markets: Japan, Australia, New Zealand, Hong Kong, Singapore, South Korea and Taiwan ― Emerging markets: China, India, Malaysia, Thailand, Indonesia, Vietnam and the Philippines The main reason for slow growth lies in cross-cultural language and technology vernacular barriers Prevalent Software Categories Sales force automation and marketing analysis solutions Advanced enterprise applications Lower deployment costs Ease and speed of deployment Factors for SaaS Adoption Longer-than-expected deployment times Educating the market Localization Primary Concerns Source: Gartner
  20. 20. 20 Summer 2013 Siemer SaaS Report Global Markets – Latin America SaaS revenues in Latin America reached an estimated $419.7mm in 2012, up 27% from $331.1mm last year Brazil and Mexico drive a majority of adoption and revenue opportunities In a survey conducted by NetSuite, almost one-third of IT directors and managers of large Latin American corporations indicated that more than 25.0% of corporate-wide software licenses within their organizations are delivered as a service 60.0% of the respondents indicated they would consider the SaaS model during their next ERP upgrade or migration Emerging Packaged CRM Procurement ERP applications Established Sales force automation Customer service Expense management Email Financial accounting Prevalent Software Categories Ability to customize Localized content Performance Business continuity Primary Concerns Ability to access cloud-based solutions from anywhere Ease of implementation Seamless upgrade Overall cost reduction Reduced upfront investments Factors for SaaS Adoption Source: Gartner
  21. 21. SAAS SUBSECTOR: CRM
  22. 22. 22 Summer 2013 Siemer SaaS Report Opportunity CRM remains the largest SaaS system application worldwide “Social Era” communication and relationships conducted mostly through social media and internet In 2012, 40.0% of all CRM systems sold were SaaS based The global CRM market grew 12.5% from $16.0bn to $18.0bn from 2011 to 2012, 3.0x the average of all enterprise software categories Communications, media and IT services were the biggest spenders on CRM in 2012 due to call center requirements CRM Submarket Central Applications ― Customer service and support ― Sales force automation ― Marketing ― eCommerce Additional Applications ― Appointments ― Small business ― Social media CRM SaaS CRM SaaS identifies and analyzes customer needs to optimize overall operations Source: Forbes, Wall Street Research 2012 Worldwide Spending by Central Application 37.0% 36.0% 30.0% 17.0% 0% 10% 20% 30% 40% Customer Service & Support Sales Marketing E-Commerce CRMSpending(%) eCommerce
  23. 23. 23 Summer 2013 Siemer SaaS Report Growth Drivers Vested vendor interests Ubiquitous Internet accessibility Easier-to-deploy CRM systems compared to on-premise alternatives Rapid improvement in application functionality General backlash against software licensing model Reduced up-front cost and low lifetime risk Critical Success Factors Maintain a true thin-client technology focus ― Improve software performance ― Increase scalability ― Facilitate flexibility Continue to target defined market focus Preserve industry focus ― Vertical market business application CRM SaaS CRM SaaS identifies and analyzes customer needs to optimize overall operations By 2014, the number of mobile CRM apps available for download will have grown to 1,200 from 200 in 2012, a 500.0% increase By 2016, more than 50.0% of total CRM software revenue will be delivered as SaaS Projected Outlook Source: IDC Salesforce 14.0% SAP 12.9% Oracle 11.1% Microsoft 6.3%IBM 3.6% Adobe 3.1% Nice Systems 2.5% Verint Systems 2.4% Amdocs 2.3% SAS 2.2% Others 39.7% Sample CRM Companies 2012 Worldwide CRM Market Share by Vendor
  24. 24. 24 Summer 2013 Siemer SaaS Report $3,852.0 $4,484.0 $5,073.0 $5,707.0 $6,397.0 $3,244.0 $3,837.0 $4,611.0 $5,416.0 $6,332.0 $1,758.0 $2,012.0 $2,288.0 $2,597.0 $2,951.0 $1,276.0 $1,581.0 $1,944.0 $2,324.0 $2,753.0 $0.0 $2,000.0 $4,000.0 $6,000.0 $8,000.0 2011 2012 2013 2014 2015 Revenue($mm) Customer Relationship Management (CRM) Content, Communications and Collaboration Enterprise Resource Planning (ERP) Supply Chain Management (SCM) CRM SaaS Software Revenue Forecast (2011-2015 ) SaaS Delivery within Enterprise Application Software Software Revenue Forecast (2012-2016 ) CRM Submarket CRM is projected to remain the most popular application software to utilize SaaS delivery Source: Gartner $5,549.0 $6,032.0 $6,609.0 $7,228.0 $7,940.0 $4,265.0 $4,605.0 $4,990.0 $5,433.0 $5,810.0 $3,098.0 $3,449.0 $3,798.0 $4,214.0 $4,697.0 $0.0 $2,000.0 $4,000.0 $6,000.0 $8,000.0 $10,000.0 2012 2013 2014 2015 2016 Revenue($mm) Sales Customer Service and Support Marketing Automation
  25. 25. SAAS SUBSECTOR: ERP
  26. 26. 26 Summer 2013 Siemer SaaS Report ERP SaaS ERP SaaS consolidates internal and external data to manage business operations Execution and Benefits Rent ERP software on a lease basis; integrating resource planning on a cloud system SaaS ERP systems reduce implementation costs ― Faster deployment ― No physical servers Costs are reduced with SaaS ERP with high demand for IT resources in managing and installing development applications Risk Factors Associated with SaaS Larger businesses may not align with software Costs are continually incurred as long as system is in place Software cannot be changed Dependent on Internet connection By 2014, the CAGR for SaaS ERP market is expected to be 15.8%, almost 3.0x greater than CAGR for overall software market The industry is expected to grow to $32.0bn by 2016 Projected Outlook Source: Forbes, Gartner 2012 Worldwide ERP Market Share by Vendor Sample ERP Companies SAP 25% Oracle 13% Sage 6% Infor 6% Microsoft 5% Kronos 2%Totvs 2%Concur 2%YonYou 1% UNIT4 1% Others 37%
  27. 27. 27 Summer 2013 Siemer SaaS Report ERP SaaS Cost of capital determines SaaS savings as compared to On-Premise systems (mid-sized company) $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 ERPCosts SaaS On-Premise $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 ERPCosts SaaS On-Premise Source: ERP Cloud News $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 ERPCosts SaaS On-Premise Costs are reduced with SaaS ERP with high demand for IT resources in managing and installing development applications Avoid ongoing costs as a variable of capital Low upfront expenses Less hidden costs Benefits15% Cost of Capital No Cost of Capital 3% Cost of Capital
  28. 28. SAAS SUBSECTOR: HR MANAGEMENT
  29. 29. 29 Summer 2013 Siemer SaaS Report HRM SaaS Growing demands for HR solutions $10.0bn worldwide market Growing at 18.0%-22.0% CAGR US SaaS HRM adoption rate: 92.0% European SaaS HRM adoption rate: 61.0% From 2010-2012, there were 30 major acquisitions in the talent management software market alone In recent years, large corporations such as Oracle and SAP have begun focusing on HR SaaS Source: Ephor Group, Forrester, CedarCrestone, Bersin HRM SaaS Advantages Projected Outlook In secondary and tertiary markets, enterprise providers with their “bundled” outsource service offerings are not present. With this unsatisfied demand, there is an opportunity for accelerated organic revenue growth of anywhere from 18.0% to 22.0% per year HRM SaaS manages all aspects of HR activity in a cloud-computing environment Increases productivity by replacing manual input functions with automated ones Employee verifications, employment application processes and employee benefits administrative tasks can be delivered in a self-service format Significantly saves costs over the majority of on- premise HR software applications that are typically incorporated into ERP systems Sample HRM Companies
  30. 30. 30 Summer 2013 Siemer SaaS Report Companies that adopt SaaS HR solutions Outperform the competition based on key comparable and financial benchmarks More flexible resource-efficient cost structures Average annual HR administration expenditures per employee is greater than $1,000 for SMBs without a unified HR system versus less than half of that for enterprises with SaaS HR Organizations choosing an ERP with an HRM SaaS-based talent management approach outperform with as much as 48% greater sales per employee than those choosing a different solution HRM SaaS Source: Apprenda, Ephor Group SaaS HRM services Workforce optimization (job management, contingent labor and labor costs management) Self-service for employee and manager “consumerism” (e.g. access to information and tools) HR systems strategy (HR Analytics, Social, Global and Mobile) Enterprise portal and transaction cost reductions Ability to manage employee information on a real time basis SaaS HR Systems offer efficiencies Applicant tracking Time and attendance management Benefits management Directory management Electronic forms processing Leave management Employee self service functionality Holiday management Payroll management Recruitment and performance management HRM SaaS manages all aspects of HR activity in a cloud-computing environment
  31. 31. 31 Summer 2013 Siemer SaaS Report SELECT TRANSACTION CASE STUDIES
  32. 32. 32 Summer 2013 Siemer SaaS Report Microsoft – Yammer M&A Case Study Source: Capital IQ and Siemer & Associates’ Proprietary Research Database Key Deal Metrics Yammer’s Products / Services Date Announced: June 15th, 2012 Date Closed: July 18th, 2012 Implied Enterprise Value: $1.2bn Deal Structure: Microsoft Corporation entered into a definitive agreement to acquire Yammer, Inc. for $1.2bn in cash on June 15th, 2012 Yammer joined the Microsoft Office Division and the division is being led by President Kurt DelBene Financing History: Yammer had received $142.0mm in five rounds of venture funding prior to the acquisition. Description: Yammer is an enterprise social network that brings together employees, content, conversations and business data in a single location. Yammer empowers employees to be more productive by enabling them to collaborate in real-time across departments, geographies and business applications. Employees can additionally create groups to collaborate on projects and share and edit documents. The service can be accessed through the web, desktop and mobile devices, and Yammer provides both free and premium versions. Deal Commentary The Yammer deal positions Microsoft more aggressively as a player in the development of social media services specifically for enterprises, an area where competitors like Oracle, Salesforce and IBM have been active as well Microsoft’s initial concerns involved figuring out ways to successfully monetize Yammer One year after Microsoft’s acquisition, Yammer’s subscriber base is up 55% to nearly 8.0mm users, characterized by more customers paying for the premium services and much tighter Microsoft integration Microsoft’s future plans for Yammer include further integration between Yammer and email, enhanced document collaboration and expanded Yammer messaging and external communication
  33. 33. 33 Summer 2013 Siemer SaaS Report SAP – Ariba M&A Case Study Date Announced: May 22nd, 2012 Date Closed: October 1st, 2012 Implied Enterprise Value: $4.4bn Implied EV/LTM Revenue Multiple: 8.8x Deal Structure: SAP America, Inc. entered into an agreement to acquire Ariba Inc. for $4.6bn in cash on May 22, 2012 SAP paid $45 per share to the holders of Ariba’s common stock and restricted units and also paid $9.13mm in cash for acquiring all the outstanding options of Ariba Inc. Ariba ceased to be an independent public company and will be wholly- owned by SAP The existing management team continues to lead Ariba Inc., which operates under the name “Ariba", an SAP company Key Deal Metrics Deal Commentary SAP indicates that the acquisition combined Ariba’s successful buyer-seller collaboration network with SAP’s own customer base and solutions in order to create new models for business-to-business collaboration in the cloud With the acquisition, SAP will acquire the leader in cloud-based collaborative business commerce, as Ariba boasts $444 million in total revenue and 38.5% annual growth in 2011 SAP believes the addition of Ariba will create the business network of the future, through delivering immediate value to their customers and providing another solid engine for driving the company’s growth in the cloud Description: Ariba, Inc. is the leading provider of collaborative business commerce solutions. Ariba combines industry-leading technology to optimize the complete commerce lifecycle with the world’s largest web- based community to discover, connect and collaborate with a global network of trading partners. The company’s services deliver everything needed to control costs, minimize risk, improve profits and enhance cash flow and operations, all in a cloud-based environment. Ariba’s Products / Services Source: Capital IQ and Siemer & Associates’ Proprietary Research Database
  34. 34. 34 Summer 2013 Siemer SaaS Report Date Announced: May 6th, 2013 Market Cap: $6.5bn TEV: $6.3bn LTM Revenue: $2.3bn LTM EBITDA: $694.4mm LTM EV/EBITDA: 9.1x Deal Structure: Bain Capital Private Equity, GIC Special Investments Pte. Ltd., Golden Gate Private Equity, Inc. and Insight Venture Partners acquired 100% of BMC Software’s equity for $46.25 per share in cash Key Deal Metrics Deal Commentary By becoming a private company, BMC can provide for more flexibility. Through additional investing freedom, the Company can foster innovation and deliver cutting edge solutions for its clientele. Buyout firms are increasingly acquiring mature technology companies positioned to support debt through steady cash flows Attractive debt financing rates are driving PE firms to leverage larger deals Source: Capital IQ and Siemer & Associates’ proprietary research database Description: BMC Software, Inc. develops software that provides system and service management solutions for enterprises internationally BMC Software Products / Services BMC Buyout Case Study
  35. 35. APPENDIX – SAAS BUSINESS MODEL FACTORS
  36. 36. 36 Summer 2013 Siemer SaaS Report Summary of Key Metrics The following metrics represent key ratios demonstrated by several successful SaaS companies CMRR CAC CLTV Cash Churn Growth Rate Upsell vs. New Customers New CMRR CMRR Renewal Cost G&A as a % of Sales R&D as a % of Sales FCF Payment Terms Professional Services GM Churn Rate 50% + Upsells ≥ Churn CAC > 1 <30% of Annualized GM CLTV > 0 G&A ~ 15% at Scale R&D ~ 10% at Scale Breakeven at 50% Growth Rate 1-Year Upfront Mix > 50% > 0 on Project Basis Churn <12% Source: Wall Street Research Metric Measurement Target
  37. 37. 37 Summer 2013 Siemer SaaS Report Key Metrics for Growth: CMRR Committed Monthly Recurring Revenue (CMRR) Full Transparency: ― Employee assessment ― Operational planning ― Financing ― Valuation CMRR Expenses Existing Contracts Renewals Upsell & Expansion New Accounts Break Even Time NumberofCustomers Source: Wall Street Research
  38. 38. 38 Summer 2013 Siemer SaaS Report CAC ratio: Defining your S&M spend Key Metrics for Growth: Customer Acquisition Cost (CAC) Customer Acquisition Cost (CAC): The cost of a business to acquire a new customer CAC Ratio = [GPQ – GPQ-1] x 4 Sales & MarketingQ-1 CAC < 1/3 (3 years to payback or more) Refine business model Require pullback of sales model Reduce sales & marketing expense CAC > 1 (payback in less than 1 year) Sign of healthy SaaS model in operation Investment of more money is accretive to operational income The cost to acquire customers has increased due to the current macroeconomic environment Source: Wall Street Research
  39. 39. 39 Summer 2013 Siemer SaaS Report Customer Lifetime Value (CLTV) Measures Profitability This analysis can help management adjust both budgeted R&D and G&A expenses Example: 1 customer generating $1 of Annual Recurring Revenue (ARR) Profits are being generated with CLTV > 0 Year 1 Year 2 Year 3 Year 4 Year 5 Period Length 0.5 1.5 2.5 3.5 4.5 Revenue 1.0 1.0 1.0 1.0 1.0 COGS 0.3 0.3 0.3 0.3 0.3 Gross Profit 0.7 0.7 0.7 0.7 0.7 CAC (0.7) - - - - AccountManagement - (0.1) (0.1) (0.1) (0.1) R&D (0.1) (0.1) (0.1) (0.1) (0.1) G&A (0.1) (0.1) (0.1) (0.1) (0.1) Operating Profit (0.2) 0.4 0.4 0.4 0.4 DiscountRate ( 12.5%) 0.94 0.84 0.74 0.66 0.59 Cash Flows From Customer (0.19) 0.34 0.30 0.26 0.24 CLTV 0.9 Source: Wall Street Research
  40. 40. 40 Summer 2013 Siemer SaaS Report Churn Defines the Viability of the Business Model MRR churn (<12.0% p.a. and < Upsell) Customer churn Root Causes ― Pricing / value ― UI and workflow complexity ― Downtime Monitoring ― Overall application usage (login frequency and time) ― Application usage (frequency, function used, etc.) Acting ― Competitive analysis / sales tools ― Usage monitoring and follow-up ― GUI / workflow redesign ― Platform stability ― Increased discount for early payment $100 $80 $64 $51 $0 $40 $80 $120 Start of Year 1 End of Year 1 End of Year 2 End of Year 3 Source: Wall Street Research Benchmark Effect of 20.0% Churn on MRR Base
  41. 41. APPENDIX – PUBLIC AND TRANSACTION COMPARABLES
  42. 42. 42 Summer 2013 Siemer SaaS Report Select SaaS Public Comparables Source: CapitalIQ and Siemer Proprietary Research (figures in millions of $USD, except per share) Share Price as of Market Enterprise EV / LTM EV / CY 2013E LTM Annual General Software 6/25/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth BMC Software $44.75 $6,383.1 $6,213.7 2.8x 10.2x 2.7x 7.1x 1.4% CA Technologies 27.24 12,337.7 10,976.7 2.4x 6.6x 2.5x 6.5x -3.6% Concur Technologies $77.00 $4,299.0 $4,090.8 8.5x NM 5.7x 25.5x 22.3% International Business Machines 193.54 214,596.0 236,057.0 2.3x 8.9x 2.2x 8.0x -3.5% Microsoft 33.72 281,557.6 222,534.6 2.9x 7.3x 2.5x 5.7x 4.1% Oracle 30.17 142,120.6 128,398.6 3.5x 7.4x 3.2x 6.4x 0.2% SAP 71.07 84,751.7 85,334.4 4.0x 11.7x 3.3x 9.5x 13.2% Mean $99,086.5 3.8x 8.7x 3.2x 9.8x 4.9% Median $85,334.4 2.9x 8.2x 2.7x 7.1x 1.4% (figures in millions of $USD, except per share) Share Price as of Market Enterprise EV / LTM EV / CY 2013E LTM Annual Security Software 6/25/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth Check Point Software Technologies $49.30 $9,684.3 $8,299.2 6.1x 10.9x 5.6x 9.6x 5.7% LogMeIn 24.01 583.8 378.5 2.6x NM 2.2x 9.0x 14.8% Sourcefire 52.69 1,637.9 1,432.0 6.1x NM 4.3x 20.7x 28.6% Symantec 22.01 15,329.5 13,673.5 2.0x 7.2x 1.9x 5.2x 2.6% Websense 24.71 906.0 892.0 2.5x 16.4x 2.4x 15.3x -1.5% Mean $4,935.0 3.9x 11.5x 3.3x 11.9x 10.0% Median $1,432.0 2.6x 10.9x 2.4x 9.6x 5.7%
  43. 43. 43 Summer 2013 Siemer SaaS Report Select SaaS Public Comparables Source: CapitalIQ and Siemer Proprietary Research (figures in millions of $USD, except per share) Share Price as of Market Enterprise EV / LTM EV / CY 2013E LTM Annual CRM Software 6/25/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth Constant Contact 16.05 492.9 395.6 1.5x 20.8x 1.3x 7.7x 16.1% DealerTrack Holdings 33.70 1,465.6 1,459.0 3.6x 25.1x 2.8x 11.0x 10.5% Salesforce.com 36.95 21,798.1 21,392.6 6.6x NM 4.5x 25.9x 32.1% Vocus 10.24 216.0 253.4 1.4x NM 1.3x 10.4x 48.4% Mean $5,875.1 3.3x 22.9x 2.5x 13.7x 26.8% Median $927.3 2.6x 22.9x 2.1x 10.7x 24.1% (figures in millions of $USD, except per share) Share Price as of Market Enterprise EV / LTM EV / CY 2013E LTM Annual ERP Software 6/25/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth NetSuite 85.69 6,322.4 6,145.7 18.6x NM 11.7x NM 31.3% QAD 11.11 171.4 114.0 0.5x 9.9x 0.4x 5.1x -0.5% Red Hat 45.91 8,710.5 7,856.8 5.7x 28.3x 4.7x 16.1x 16.4% Mean $4,705.5 8.2x 19.1x 5.6x 10.6x 15.7% Median $6,145.7 5.7x 19.1x 4.7x 10.6x 16.4% (figures in millions of $USD, except per share) Share Price as of Market Enterprise EV / LTM EV / CY 2013E LTM Annual HRM Software 6/25/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth ADP $68.38 $33,179.5 $31,514.5 2.8x 13.1x 2.5x 12.1x 6.4% Cornerstone OnDemand 44.43 2,267.4 2,198.1 16.7x NM 8.6x NM 61.9% Ultimate Software Group 113.06 3,125.7 3,057.2 8.7x NM 6.2x 28.9x 24.4% Workday 63.05 10,907.7 10,123.2 NM NM 15.2x NM 88.3% Mean $11,723.3 9.4x 13.1x 8.1x 20.5x 45.2% Median $6,590.2 8.7x 13.1x 7.4x 20.5x 43.1%
  44. 44. 44 Summer 2013 Siemer SaaS Report Select Precedent SaaS Financings Source: CapitalIQ and Siemer Proprietary Research Amount Date Company Description Investors Raised ($mm) Round 06/11/13 Rackwise Software and services in the growing market for IT infrastructure management and data center monitoring Black Diamond Financial Group; Navesink Capital Advisors $3.9 NA 06/06/13 Shandong Inspur E- Government Software E-governance software solutions including integrated monitoring, efficiency supervision and public service systems Shandong Inspur Software 5.7 NA 06/05/13 Bitsight Technologies Develops computer security technology software Commonwealth Capital Ventures; Globespan Capital Partners; Menlo Ventures; Flybridge Capital Partners 24.0 A 06/04/13 Axeda Cloud platform for connected products and M2M applications Wipro 5.0 B 06/03/13 Canvas Solutions Mobile application solutions construction and contracting, service industry, inspections and surveys and sales force automation Osage Partners ; Motorola Solutions Venture Capital 4.0 C 05/31/13 iSight Security Provides cyber security risk management solutions for federal and commercial entities NA 3.0 NA 05/31/13 Petrotechnics Frontline work execution solutions for oil and gas companies and operators in the United Kingdom and internationally Business Growth Fund 9.1 NA 05/30/13 Numecent Holdings Engages in the digital delivery, deployment and provisioning of software and other non-linear assets through virtualization T-Venture Holding; Endeavour Ventures 13.6 B 05/29/13 CloudByte Provides solutions for shared storage environments, such as security, isolation and service level assurance Nexus Venture Partners; Fidelity Growth Partners India; Kae Capital 4.0 B 05/29/13 Virtual Piggy Operates as a technology company that delivers an online eCommerce solution in the United States and Europe NA 6.0 NA 05/28/13 ConnectEdu Provides Web-based college and career access solutions NA 16.0 D 05/23/13 Maxx Technologies Develops liquor inventory management systems for the hospitality industry NA 3.5 NA 05/22/13 Digital Signal Conducts research and development of three-dimensional facial recognition systems for the department of defense and other federal agencies Technology Control 50.0 C
  45. 45. 45 Summer 2013 Siemer SaaS Report Amount Date Company Description Investors Raised ($mm) Round 05/22/13 SLYCE Commerce Develops visual recognition purchasing platform that allows discovering and purchasing the things users like online NA $3.8 NA 05/17/13 SmartMetric Research and development of biometric security solutions NA 5.1 NA 05/17/13 Visier Builds business analytic applications focusing on people management Foundation Capital; Summit Partners 15.0 B 05/17/13 Sight Machine Designs and develops software for vision analysis NA 6.0 NA 05/17/13 EdgeSpring Provides visual analytics and business intelligence solutions Kleiner, Perkins, Caufield & Byers; Lightspeed Venture Partners 9.0 A 05/16/13 Triggit Provides real-time media management solutions North Atlantic Capital; Spark Capital; Foundry Group 6.0 B 05/16/13 Atlantis Computing Provides virtual desktop infrastructure (VDI) storage and performance optimization solutions for IT organizations Adams Street Partners; Cisco Systems; El Dorado Ventures; Partech International 20.0 D 05/15/13 PernixData Provides an enterprise-class software platform for application acceleration Kleiner, Perkins, Caufield & Byers; Lightspeed Venture Partners 20.0 NA 05/15/13 OpenGeo Develops open source geospatial software solutions to organizations in the United States and internationally Vanedge Capital 3.0 A 05/14/13 HipLogiq Changes how businesses and brands reach and engage with people RLB Holdings; Hadron Global Partners 5.0 A 05/09/13 Movable Develops email software for companies Intel Capital; WS Investments; Silicon Valley Bank; Contour Venture Partners; Metamorphic Ventures; ff Venture Capital; Kima Ventures 11.0 NA 05/08/13 PROGNOZ ZAO Business intelligence and business performance management solutions for corporations and government agencies NA 10.9 NA 05/07/13 Safe-T Software solutions for data security, secure email, managed file transfer, secure front end and anti-virus applications NA 5.0 NA Select Precedent SaaS Financings Source: CapitalIQ and Siemer Proprietary Research
  46. 46. 46 Summer 2013 Siemer SaaS Report Select Precedent SaaS Financings Source: CapitalIQ and Siemer Proprietary Research Amount Date Company Description Investors Raised ($mm) Round 05/06/13 Ontuitive Designs, develops and delivers performance support solutions for business enterprises NA $4.7 NA 05/03/13 mobeam Develops a light based communications technology NA 3.0 A 05/03/13 Axiologix Acquires and owns VoIP and cloud services spaces Ironridge Technology 7.5 NA 05/02/13 Axiomatics Offers authorization solutions for customers worldwide Monterro Holdings; Coach & Capital; Almi Invest 6.5 NA 05/02/13 VMTurbo Provides intelligent workload management software solutions for cloud and virtualized environments Highland Capital Partners; Globespan Capital Partners; Bain Capital 7.5 B 05/01/13 GridGain Systems Provides Java-based open source middleware platform for data business analytics and processing NA 10.0 A 05/01/13 LucidWorks Provides enterprise-grade embedded search development platforms Granite Ventures; Walden International; Shasta Ventures 12.0 C 05/01/13 GraphLab Designs and develops a machine learning analytics engine for graph datasets Madrona Venture Group; New Enterprise Associates 6.8 A 05/01/13 M-Files Develops document management software and provides cloud-based document management services DFJ Esprit; Finnish Industry Investment 7.8 A 04/23/13 Seclore Technology Offers data security solutions Ventureast Fund Advisors India; Helion Venture Partners 6.0 A 04/23/13 Infinity Augmented Reality Engages in the development of augmented reality software applications Platinum Management (NY) 5.0 NA 04/22/13 TransLattice Provides on-premise or in the cloud data for enterprise, cloud and hybrid environments in the United States and internationally NA 12.0 A 04/16/13 Quadriserv Provides transformational market structure changes to beneficial owners, agent and custodial banks, broker dealers and hedge funds NA 3.4 NA
  47. 47. 47 Summer 2013 Siemer SaaS Report Select Precedent SaaS Financings Source: CapitalIQ and Siemer Proprietary Research Amount Date Company Description Investors Raised ($mm) Round 04/16/13 CommuniTake Provides a remote service platform for mobile devices Cellebrite Mobile Synchronization $3.0 NA 04/16/13 Good Technology Provides application-to-application workflows that include integrated email, communications, document management, BI, social business and wireless printing NA 60.1 E 04/12/13 Createthe Group Provides digital campaigns, communications platforms and commerce solutions for fashion and retail brands NA 3.0 NA 04/12/13 Mobile Labs Mobile application testing solutions for enterprises NA 3.5 NA 04/12/13 Panviva Develops and delivers business process guidance systems SBI Ven Capital 4.2 B 04/11/13 nuPSYS Technologies Provides network automation control center solutions to offer a 3D multi-touch control center monitoring application with a graphical user interface AVentures Capital 5.0 A 04/09/13 Moment Systems Provides digital advertising solutions for advertisers and agencies Redpoint Ventures; CBC Capital; WPP Digital; KPCB China 10.0 NA 04/08/13 Scientific Learning Develops, distributes and licenses technology that accelerates learning by improving the processing efficiency of the brain Nantahala Capital; Trigran Investments; Blackwell Partners; RJ Partnership 4.6 NA 04/08/13 Vidyo Provides telepresence solutions for video conferencing worldwide Menlo Ventures; Rho Capital; Star Ventures; QuestMark; Triangle Peak; Juniper Networks; The Four Rivers 17.0 D 04/05/13 MarketShare Partners Provides cross media analytics solutions FTV Capital; Elevation Partners 38.0 NA 04/05/13 ZeRTO Enterprise-class disaster recovery and business continuity solutions for virtualized data centers and cloud environments Battery Ventures; Greylock Partners; U.S. Venture Partners; RTP Ventures 13.0 C 04/04/13 Kaazing Provides Web communication solutions for living Web applications New Enterprise Associates; Columbus Nova Technology Partners 15.0 NA 04/03/13 StreetLight Data Geospatial BI solutions for marketing, site selection, urban planning and economic development apps T-Venture Holding; Vision Ridge Partners 3.6 A
  48. 48. 48 Summer 2013 Siemer SaaS Report Source: CapitalIQ and Siemer Proprietary Research Select Precedent SaaS Financings Amount Date Company Description Investors Raised ($mm) Round 04/03/13 Redknee Solutions Communication software, solutions and services to wireless, wireline, broadband and satellite network operators NA $44.0 NA 04/02/13 Belmont Technology Develops cloud based CAD software solutions for product design Commonwealth Capital; New Enterprise Associates; North Bridge Venture Partners 25.0 A 04/02/13 Midokura Develops network virtualization software solutions Docomo Innovation; Innovation Network Corporation; SMBC Venture Capital 17.3 A 04/01/13 RetailNext Provides in-store retail analytics August Capital; StarVest Partners; Nokia Growth Partners; Commerce Ventures 15.0 C 03/31/13 Iddiction Offers online mobile application searching solutions NA 5.5 NA 03/29/13 ForgeRock Develops identity oriented middleware platform for companies and government organizations worldwide Accel Management; Foundation Capital 15.2 B 03/28/13 Vantrix Provides mobile video mediation and delivery solutions for streaming, browsing and messaging worldwide NXT Capital Venture Finance 4.5 B 03/27/13 Opentech Sistemas de Gerenciamentos Develops tracking and risk management solutions for logistics and transportation sectors DLM Invista Asset Management 5.0 NA 03/27/13 Malauzai Software Provides mobile solutions for small and medium sized community-based financial institutions and IT companies NA 3.0 NA 03/27/13 Adapx Provides interface software solutions for collaboration, field data collection and decision making OVP Venture Partners; Pelion Venture Partners; Paladin Capital Group; Northwest Technology Ventures 3.5 B 03/27/13 The Nintex Group IT company that focuses on SharePoint technologies, including software, services and cloud based solutions TA Associates Management; Updata Partners 313.2 NA 03/26/13 Interactive Achievement Assessment and reporting software solutions for school districts in Virginia, South Carolina, Tennessee and Indiana NA 3.5 NA 03/26/13 Clean Power Finance Provides residential financing products and solar sales quoting and design tools for the solar industry Kleiner, Perkins, Caufield & Byers; Edison; Hennessey; Claremont Creek; Sand Hill Angels; Google Ventures 60.0 NA
  49. 49. 49 Summer 2013 Siemer SaaS Report Select Precedent SaaS Financings Source: CapitalIQ and Siemer Proprietary Research Amount Date Company Description Investors Raised ($mm) Round 03/26/13 Nexess Develops and sells security management solutions for nuclear and Seveso-type plants Turenne Capital Partenaires; Seventure Partners $3.2 B 03/25/13 Realeyes Data Services Provides Web-based facial expression measurement solutions for video advertisements Entrepreneurs Fund Management; AS SmartCap 3.2 A 03/25/13 TraceVector Develops enterprise-grade Network Intrusion Detection Systems (NIDS) that stand alone on a network and use novel algorithms to detect anomalies in network traffic NA 8.1 A 03/22/13 MarkLogic Provides solutions to the public sector and Global 1000 companies around the world Sequoia Capital; Northgate Capital Group; Tenaya Capital 25.7 NA 03/22/13 ClearFit Provides software solutions to hire employees for various businesses GrandBanks Capital; Relay Ventures 7.0 A 03/21/13 Concurrent Develops enterprise software solutions Rembrandt Venture Partners; True Ventures 4.0 NA 03/20/13 BA-Insight Provides integrated search technologies and optimization software for SharePoint and FAST Search to organizations in the United States and internationally Osage Partners; Milestone Venture Partners; Paladin Capital Group; Originate Ventures 4.5 NA 03/20/13 Giant Thinkwell Develops presentation software Madrona Venture Group; Trilogy Equity Partners; Founder's Co-op 3.3 A 03/18/13 VendAsta Technologies Provides software solutions and development services BDC Venture Capital; Vanedge Capital 8.3 B 03/14/13 BriefCam Develops and provides systems for the rapid review, analysis and indexing of surveillance camera feeds Motorola Solutions Venture Capital 6.5 C 03/13/13 Pyramid Analytics Offers business intelligence (BI) applications for various business users Sequoia Capital 11.5 A 03/13/13 VibeSec Provides solutions for enterprise unified communications (UC) security and fraud prevention Proseed Venture Capital Fund; Vertex Venture Capital 4.0 NA 03/13/13 Crushpath Provides Crushpath, a platform solution to assist salespeople in managing deals Charles River Ventures; The Social+Capital Partnership 6.0 A
  50. 50. 50 Summer 2013 Siemer SaaS Report Select Precedent SaaS Financings Source: CapitalIQ and Siemer Proprietary Research Amount Date Company Description Investors Raised ($mm) Round 03/12/13 ARI Network Services Engages in creating, marketing and supporting technology- enabled solutions that help servicing and sales of goods Wynnefield Capital $4.5 NA 03/12/13 Park City Group SaaS provider that brings unique visibility to the consumer goods supply chain, delivering actionable information NA 4.3 NA 03/11/13 Endgame Systems Designs and develops security solutions focusing on cyberspace Bessemer Venture Partners; Columbia Capital; Kleiner, Perkins, Caufield & Byers; Paladin Capital Group 27.5 B 03/08/13 Spanning Cloud Apps Provides a business-class software tool to manage and protect information in cloud applications Foundry Group 6.0 B 03/08/13 Silver Spring Networks Networking platform and solutions that enable utilities to transform power grid infrastructure into the smart grid NA 12.0 D 03/08/13 PHD Virtual Technologies Provides virtual backup software solutions for data protection in virtual IT environments Insight Venture Partners; Citrix Systems; Wellington Financial 4.0 C 03/07/13 Metaps Monetization software solutions for Android applications Fidelity Investments Japan 10.7 NA 03/06/13 BINA Technologies Provides computing platforms and analytics tools for the informatics market Sierra Ventures 8.0 B 03/05/13 Vasona Networks Develops software that improves mobile carrier infrastructure efficiency Bessemer Venture Partners; Vodafone Ventures; New Venture Partners 12.0 B 03/05/13 Famous Industries Enables creation of 2D and 3D gesture based interfaces and deployment to any mobile or desktop device Javelin Venture Partners 4.0 NA 03/05/13 MapR Technologies Develops enterprise software for Hadoop data-analytics platform Mayfield Fund; New Enterprise Associates; Redpoint Ventures; Lightspeed Ventures 32.0 C 02/28/13 Pneuron Distributes existing applications, creates hybrid products, creates a business/IT framework and integrates functions Safeguard Scientifics; Osage Partners 6.0 B 02/28/13 Nexenta Systems Provides open source enterprise class storage software solutions Menlo; Sierra; Presidio STX; TransLink; Javelin; UMC Capital; The Four Rivers Group; WestSummit Capital 24.0 D
  51. 51. 51 Summer 2013 Siemer SaaS Report Select Precedent SaaS Financings Source: CapitalIQ and Siemer Proprietary Research Amount Date Company Description Investors Raised ($mm) Round 02/26/13 Click Security Real-time security analytics for enterprises, higher education systems, critical infrastructure and government agencies Sequoia Capital; Lightspeed Venture Partners; Citi Ventures $17.7 B 02/25/13 Altobridge Develops mobile communications over satellite for aeronautical and maritime industries in Ireland International Finance; Intel Capital 7.8 NA 02/25/13 AirWatch Mobile security and enterprise mobility management solutions Accel Management; Insight Venture Partners 225.0 A 02/22/13 Wireless Glue Networks Software and hardware solutions that capture and deliver energy data in real-time Hosiden; Clean Pacific; Innovation Network Corporation of Japan; Takaoka Toko 4.5 B 02/20/13 Playnomics Provides player exchange, prospecting and retargeting solutions for online game publishers FirstMark Capital; X/Seed Capital Management; Vanedge Capital 5.0 B 02/19/13 ActiFio Provides storage solutions for managing copies of production data for enterprise IT organizations and managed and cloud service providers Advanced Technology; Greylock; North Bridge; Technology Crossover; Andreessen Horowitz 50.0 D 02/19/13 TopHatMonocle A web and mobile-based classroom response system that engages students and provides professors with the real- time feedback on student understanding iNovia Capital 6.2 NA 02/15/13 TerraGo Technologies Geospatial location software and maps to produce, access, update and share information and applications RedShift Ventures; CNF Investments; Observatory Capital Management 5.8 B 02/14/13 Cylance Security software solutions for infrastructure applications Khosla Ventures; Fairhaven Capital 15.0 A 02/13/13 XOS Digital Digital asset management solutions, facility design and integration services and digital coaching technologies for collegiate and professional sports organizations in the US NA 7.3 NA 02/13/13 Infinio Systems Develops software solutions to address bottlenecks in virtual environments/storage performance Bessemer Venture Partners; Highland Capital Partners 10.0 A 02/12/13 Nok Nok Labs Develops products and services for online security and authentication Onset Ventures; DCM 15.0 A 02/12/13 Ziften Technologies Develops software for desktop administration in enterprises worldwide Fayez Sarofim & Co. 5.0 NA
  52. 52. 52 Summer 2013 Siemer SaaS Report Select Precedent SaaS Financings Source: CapitalIQ and Siemer Proprietary Research Amount Date Company Description Investors Raised ($mm) Round 02/12/13 Spring Mobile Solutions Designs, develops and delivers mobility solutions for enterprise customers in the US and internationally NA $9.0 NA 02/08/13 Illumio Offers cloud security Internet services in California Andreessen Horowitz; Juniper Networks 8.0 A 02/08/13 VMS Holdings Develops a mobile application for sharing videos NA 11.4 NA 02/08/13 Living Naturally Develops and markets transactional software products for automating business processes NA 11.0 NA 02/05/13 MediaShift Provides digital advertising technology services in the United States NA 8.5 NA 02/05/13 CJ Educations Develops digital learning content for children CJ O Shopping 15.6 NA 02/05/13 Cedexis Develops Internet performance control and monitoring solutions NA 3.4 A 02/05/13 OOO "Integrator IT" Develops and designs prepackaged software, operates as an Internet service provider and engages in the adaptation and implementation of information systems Boulevard Ring 5.0 NA 01/31/13 Ecorithm Develops various algorithms and proprietary software to diagnose and optimize energy use/waste in buildings and complexes NA 3.0 NA 01/31/13 CounterTack Provides an in-progress attack intelligence and response solution for enterprise and government organizations NA 5.0 NA 01/30/13 NewVoiceMedia Develops and delivers cloud contact centre solutions for customers in the United Kingdom and internationally Highland Capital Partners; MMC VENTURES; Eden Ventures; Notion Capital Partners 20.0 B 01/30/13 DB Networks Develops database security technology to protect confidential data from falling into the hands of external hackers Khosla Ventures 4.5 B 01/28/13 Coach Alba Operates as a behavioral change company that builds Web and mobile technologies NA 3.0 NA
  53. 53. 53 Summer 2013 Siemer SaaS Report Select Precedent SaaS Financings Source: CapitalIQ and Siemer Proprietary Research Amount Date Company Description Investors Raised ($mm) Round 01/25/13 Etherstack Develops software for use in transceivers NA $3.1 NA 01/24/13 CallMiner Enterprise speech analytics solutions for global organizations NA 12.1 NA 01/24/13 Semetric Provides online analytics solutions to the music industry Pentech Ventures; Imperial Innovations 4.8 NA 01/24/13 AppDynamics Provides application performance management for modern application architectures in the cloud and data centers Greylock Partners; Institutional Venture Partners; Kleiner, Perkins, Caufield & Byers; Lightspeed Venture Partners 50.0 D 01/23/13 Puppet Labs Information technology automation software for system administrators Vmware 30.0 D 01/23/13 Apperian Develops cloud based mobile application management solutions for developers and enterprise IT professionals Intel Capital 4.6 NA 01/23/13 eleni Builds commodity exchange for frontier markets International Finance Corporation; Morgan Stanley Dean Witter Equity Funding ; 8 Miles 5.0 NA 01/22/13 Cellrox Provides Bring Your Own Device mobile multi-persona solutions for smart mobile devices that enable individuals and personas to co-exist seamlessly on a single device Columbia Technology Ventures; Runa Capital; Previz Ventures 4.7 A 01/18/13 Enroute Systems Supply chain management and SaaS+ solutions NA 3.0 NA 01/17/13 Parallels Virtualization and automation software that optimizes computing across hardware, operating system and virtualization platforms Cisco Systems 5.0 NA 01/17/13 Intigua Virtualization and cloud computing solutions for monitoring and managing large-scale infrastructure environments Bessemer Venture Partners; Cedar Fund 8.6 A 01/17/13 Smarter Grid Solutions Provides smart grid control systems and power systems consultancy services for power companies in the United Kingdom Scottish Equity Partners; The Scottish Investment Bank; Strathclyde University 4.8 NA 01/16/13 Curalate Develops marketing tools for the visual Web market New Enterprise Associates; First Round Capital; MentorTech Ventures 3.0 A
  54. 54. 54 Summer 2013 Siemer SaaS Report Select Precedent SaaS Financings Source: CapitalIQ and Siemer Proprietary Research Amount Date Company Description Investors Raised ($mm) Round 01/16/13 vArmour Networks Provides software-defined security solutions for virtualized data centers for service provider, enterprise and government cloud operators in the United States and internationally Highland Capital Partners $6.0 A 01/15/13 Beijing Baiyitong Technology Develops SaaS based softwares and provides information technology services Beijing Kaisheng Guanhua Investment 4.8 NA 01/10/13 ScaleArc Provides database infrastructure software Accel Management Co ; Trinity Ventures; Nexus Venture Partners 12.3 C 01/07/13 Intelligent Business Entertainment Develops compliance and regulatory training games and applications for mobile platforms Rho Capital Partners; New York City Investment Fund Manager; Contour Venture Partners 7.1 A 01/06/13 China National Software & Service Provides information technology (IT) solutions and services in the People’s Republic of China and internationally China Electronics 104.3 NA 01/04/13 Zonoff Provides software and Web services that deliver home automation, energy management and remote access services Grotech Ventures; Valhalla Partners 3.8 NA
  55. 55. 55 Summer 2013 Siemer SaaS Report Select Precedent SaaS Transactions Source: CapitalIQ and Siemer Proprietary Research (figures in millions of $USD) EV / LTM Date Announced Target Acquirer Implied EV Revenue EBITDA 6/17/2013 Panopticon Software Datawatch $38.8 7.8x NA 6/17/2013 prairieFyre Software Mitel Networks 20.0 NA NA 6/17/2013 Veramark Technologies Hubspoke Holdings 11.7 0.7x 11.6x 6/14/2013 Morning Star Software Technology Anhui USTC iFLYTEK 8.2 0.8x NA 6/11/2013 Veritape Eckoh 16.5 13.8x NA 6/7/2013 Drive Consultoria e Informatica Senior Solution Consultoria em Informática 7.1 1.0x NA 6/7/2013 MAP Integration Technologies Proprietary Georigin 7.4 NA NA 6/5/2013 ST Electronics-PCI Duilong Jiadu Technology 9.4 NA NA 6/4/2013 ISS Group P2 Energy Solutions 34.9 1.8x 26.6x 6/3/2013 Indigo Retail Technology HTEC 6.0 1.8x 9.0x 5/31/2013 Poynt Sprylogics International 2.6 NA NA 5/29/2013 Apriso Dassault Systemes 205.0 NA NA 5/29/2013 JouleX Cisco Systems 107.0 NA NA 5/27/2013 Heiler Software Informatica Deutschland 70.9 2.5x NM 5/24/2013 STAR-APIC 1Spatial 7.7 0.7x NM 5/21/2013 N-able Technologies International SolarWinds Worldwide 120.0 NA NA 5/20/2013 Websense Vista Equity Partners 971.1 2.7x 17.9x 5/20/2013 Veracity E.M.T. Computarized 3.5 NA NA 5/15/2013 Wagemeyer Eleco Software 0.1 NA NA 5/8/2013 Civica OMERS Private Equity 607.8 1.9x 10.3x 5/8/2013 Market Leader Trulia 300.7 6.3x NM 5/8/2013 Epic Data International Sylogist 7.4 1.5x NM 5/7/2013 primion Technology Azkoyen 43.8 0.7x 7.9x
  56. 56. 56 Summer 2013 Siemer SaaS Report Select Precedent SaaS Transactions (figures in millions of $USD) EV / LTM Date Announced Target Acquirer Implied EV Revenue EBITDA 5/6/2013 Stonesoft McAfee $385.9 7.0x NM 5/6/2013 BMC Software Insight; GIC; Bain; Golden Gate 6,866.4 3.1x 11.2x 5/1/2013 Eque2 ISIS Equity Partners; Baronsmead VCT 3.9 NA NA 5/1/2013 Ebix Rennes; Robin Raina; Exchange Parent 811.6 3.9x 9.3x 4/30/2013 Sentilla SingTel Innov8 37.9 NA NA 4/29/2013 Arkoon Network Security Cassidian 17.0 1.0x 6.0x 4/24/2013 Idhasoft Prism Informatics 71.0 NA NA 4/23/2013 Mobio Identity Systems LX Ventures 0.6 NA NA 4/22/2013 BasWare Computer Program Unit 2.0 2.4x NA 4/18/2013 Front Applications Itbook 0.1 0.4x NA 4/16/2013 Logo Yazilim Sanayi ve Ticaret Mediterra Private Equity 73.9 2.9x NA 4/11/2013 Advent Software TPG Advisors VI 1,204.2 3.3x 14.6x 4/10/2013 Software Imaging Hancom 0.9 NA NA 4/9/2013 QS Quarterhouse Software PNI Digital Media 1.0 2.3x NA 4/5/2013 1st Holdings ORIX 302.7 2.2x 6.0x 4/1/2013 Infoglide Software Fair Isaac 7.0 NA NA 3/28/2013 NEC HCL System Technologies NEC 24.5 NA NA 3/11/2013 Direção Processamento de Dados Linx Sistemas E Consultoria 13.5 1.6x NA 3/8/2013 Arieso JDS Uniphase 85.0 NA NA 3/8/2013 Computer Software Holdings Advanced Computer Software Group 164.2 1.8x 8.3x 3/1/2013 altosoft Kofax 13.5 4.0x NA 3/1/2013 Utilisoft Hansen 3.6 1.0x NA 3/1/2013 MakeSense Technologies Info Edge 1.5 NA NA Source: CapitalIQ and Siemer Proprietary Research
  57. 57. 57 Summer 2013 Siemer SaaS Report Select Precedent SaaS Transactions Source: CapitalIQ and Siemer Proprietary Research (figures in millions of $USD) EV / LTM Date Announced Target Acquirer Implied EV Revenue EBITDA 2/27/2013 Mind Technologies VOIS $0.1 NA NA 2/27/2013 Kestrel Technologies Technology Funding 1.5 NA NA 2/22/2013 Creo Amano 18.2 0.2x 3.3x 2/12/2013 OTTilus Pilat Media Global 1.9 NA NA 2/12/2013 PlanSwift Textura 7.5 NA NA 2/5/2013 QPR CIS QPR Software 0.5 NA NA 2/4/2013 Webscreen Systems Juniper Networks 9.9 7.0x 21.0x 1/31/2013 Summit Software Corporate Resource Services 35.9 NA NA 1/31/2013 Computer System Laboratory Outsourcing 13.1 0.7x NA 1/31/2013 Fringe81 Fringe81 Holdings 3.2 0.5x NA 1/28/2013 Angoss Software Peterson Partners 7.9 1.1x NM 1/24/2013 Stratix Corporation ServicePower Technologies 0.6 NA NA 1/24/2013 TBH Guernsey Ladbrokes 51.9 NA NA 1/24/2013 Global Betting Exchange Ladbrokes 41.9 NA NA 1/24/2013 W&D Participações Totvs Brasília Software 46.8 NA NA 1/16/2013 Cogility Software Drumright Group 7.0 NA NA 1/15/2013 Assetic M. H. Carnegie & Co. 19.2 NA NA 1/15/2013 Panasonic AVC Multimedia Software Tempstaff 11.8 0.4x NA 1/9/2013 Klug Krones 25.2 NA NA 1/2/2013 Nio The IVR Controls 0.1 NA NA 12/31/2012 CEBOS QAD 5.0 NA NA 12/28/2012 Storycode TigerLogic 7.7 NA NA
  58. 58. 58 Summer 2013 Siemer SaaS Report Select Precedent SaaS Transactions (figures in millions of $USD) EV / LTM Date Announced Target Acquirer Implied EV Revenue EBITDA 12/27/2012 NewBay Software Synchronoss Technologies $55.5 0.0x NA 12/27/2012 Hansoft SoftForum 413.3 7.7x NA 12/24/2012 Progress Software Micro Focus International 15.0 0.5x NA 12/21/2012 Softlog Systems Recovery Australia Solutions 0.2 NA NA 12/21/2012 Trans Infotech Wirecard 33.6 NA NA 12/20/2012 Eloqua Oracle 871.0 9.1x NM 12/20/2012 ManageIQ Red Hat 105.0 NA NA 12/17/2012 Compuware Elliott Management 2,273.7 2.4x 15.1x 12/17/2012 OneMove Technologies Plantro; Seastone Investments 5.0 2.2x NM 12/17/2012 Educational Computer Systems Heartland Campus Solutions 37.6 NA NA 12/17/2012 Pyramid Control Systems Matthews International 28.2 1.6x NA 12/17/2012 Inzi Soft MobileLeader 0.0 NA NA 12/14/2012 Shanghai Huateng Software Systems Chinasoft International 59.6 NA NA 12/14/2012 Connect Holdings S and P 25.5 1.2x NM 12/14/2012 RMG Enterprise Solutions SCG Financial Acquisition 45.0 NA NA 12/13/2012 Rhaon Entertainment AfreecaTV 30.9 NA NA 12/12/2012 NC West Holdings Ncsoft 46.5 NA NA 12/7/2012 New Dawn Technologies Daily Journal 14.0 NA NA 12/5/2012 Apperience M Dream Inworld 122.8 10.5x NA 12/5/2012 Zenprise Citrix Systems 324.2 NA NA 11/30/2012 ANT Espial 0.9 0.1x NM 11/30/2012 CCC Information Services Group Leonard Green & Partners 550.0 NA NA 11/29/2012 Cariden Technologies Cisco Systems 141.0 NA NA Source: CapitalIQ and Siemer Proprietary Research
  59. 59. 59 Summer 2013 Siemer SaaS Report Select Precedent SaaS Transactions Source: CapitalIQ and Siemer Proprietary Research (figures in millions of $USD) EV / LTM Date Announced Target Acquirer Implied EV Revenue EBITDA 11/28/2012 Retalix NCR $613.5 2.3x 25.5x 11/27/2012 SOAR SYSTEM RealVision 1.6 0.5x NA 11/26/2012 CR Software Fair Isaac 28.8 NA NA 11/23/2012 Miracom Samsung 11.6 0.6x 4.6x 11/21/2012 Versant Actian 16.4 1.1x NM 11/20/2012 GDC Technology Huayi Brothers Media 211.3 NA NA 11/16/2012 AltoStor WANdisco 5.1 NM NA 11/16/2012 Astoria Innovations Beijing Enterprises Group 11.8 NA NA 11/15/2012 Cloupia Cisco Systems 125.0 NA NA 11/14/2012 Energistic Formosa Prosonic Industries 0.9 NA NA 11/14/2012 Exentra Transport Solutions The Descartes Systems Group 17.0 NA NA 11/13/2012 Verivue Akamai Technologies 32.1 NA NA 11/12/2012 Systems Alternatives International Brady 10.0 1.2x NA 11/12/2012 Albat + Wirsam Software Friedman 24.4 NA NA 11/9/2012 Qanda Technology Fastvue 1.1 NA NA 11/8/2012 LMS International Siemens Product Lifecycle Software 915.1 NA NA 11/8/2012 Vandasoft Technology Holdings PCCW Solutions 1.0 NA NA 11/8/2012 PT. AZEC PT Erajaya Swasembada 2.8 NA NA 11/7/2012 Beijing BII-ERG Transportation Technology China City Railway Transportation Technology Holdings 33.1 NA NA 11/7/2012 Beijing Hua An Tian Cheng Technology Chongqing Zongshen Power Machinery 16.3 NA NA 11/7/2012 Tierdata Informatica 10.2 NA NA 11/5/2012 Vyatta Brocade Communications Systems 43.6 NA NA 11/5/2012 LiveTime Software Absolute Software 14.1 NA NA
  60. 60. 60 Summer 2013 Siemer SaaS Report Select Precedent SaaS Transactions (figures in millions of $USD) EV / LTM Date Announced Target Acquirer Implied EV Revenue EBITDA 11/1/2012 JDA Software Group RedPrairie $1,826.6 2.8x 10.9x 11/1/2012 Visionutveckling Enghouse Systems 10.9 NA NA 11/1/2012 RMS Solutions Sylogist 0.3 NA NA 10/31/2012 Beta Systems Software Deutsche Balaton 4.2 0.1x 1.4x 10/31/2012 Varitronics Renaissance Equity Partners 8.4 NA NA 10/29/2012 I Education FrogTrade 3.1 NA NA 10/29/2012 OPNET Technologies Riverbed Technology 867.9 4.8x 26.6x 10/24/2012 DaeSung Information System Daesung Industrial 0.1 NA NA 10/23/2012 Aegis Analytical Accelrys 30.0 NA NA 10/19/2012 FMx McLaren Software 9.0 2.1x NA 10/18/2012 Zmanda Carbonite 13.4 NA NA 10/18/2012 Aurea Software ESW Capital 60.5 NA NA 10/17/2012 Motex Kyocera Communication Systems 168.4 4.5x NA 10/12/2012 Vector Soft Strategy 0.3 NA NA 10/10/2012 Metaskil Group Quindell Portfolio 7.4 1.5x NA 10/9/2012 Insider Technologies YFM Equity Partners 4.8 1.1x NA 10/9/2012 INUS Technology 3D Systems 35.0 NA NA 10/4/2012 Qontext Autodesk 26.0 NA NA 10/4/2012 Sininen Meteoriitti Fujitsu Finland 26.0 NA NA 10/4/2012 FAService TRUMPF 12.8 1.1x NA 10/3/2012 Progress Software Rocket Software 31.9 2.0x NA 10/2/2012 ClickMotive DealerTrack 56.6 NA NA 10/2/2012 Zephyr Associates Informa Investment Solutions 62.0 NA NA Source: CapitalIQ and Siemer Proprietary Research
  61. 61. 61 Summer 2013 Siemer SaaS Report Select Precedent SaaS Transactions Source: CapitalIQ and Siemer Proprietary Research (figures in millions of $USD) EV / LTM Date Announced Target Acquirer Implied EV Revenue EBITDA 10/1/2012 Ongame Network Amaya Gaming Group $32.4 NA NA 9/28/2012 Spend Radar SciQuest 17.6 NA NA 9/25/2012 Serengeti Systems Netcall 4.7 1.8x NA 9/24/2012 Draig Technology Utilisoft 1.1 1.6x NA 9/24/2012 Marathon Technologies Stratus Technologies 2.2 NA NA 9/24/2012 Réalisations Microélectroniques Poincaré Gestion 22.8 0.6x NA 9/21/2012 Cenize Informática IOB Folhamatic Group 6.3 NA NA 9/21/2012 Empresa Brasileira de Sistemas IOB Folhamatic Group 17.2 NA NA 9/21/2012 Conscious Object Development GHL 0.3 NA NA 9/18/2012 Image Recognition Integrated Systems Canon Europa 81.8 0.6x 9.7x 9/17/2012 Lapis Software Associates Spectra Systems 0.8 2.1x NA 9/17/2012 Evolution Robotics iRobot 0.0 NA NA 9/17/2012 Syntevo WANdisco 1.0 NA NA 9/15/2012 Sigma Danismanlik Asseco 9.2 1.7x NA 9/13/2012 Sensage The KEYW Holding 85.7 7.1x NM 9/13/2012 Solarsoft Business Systems Epicor Software 155.0 1.7x NA 9/13/2012 Distra ACI Worldwide 48.8 NA NA 9/6/2012 Mingle Suite Application Myriad Interactive Media 0.3 0.0x NA 9/5/2012 Mobile Eco Ubiquoss 2.6 6.0x NA 9/5/2012 American Driving Records SAMBA Holdings 11.0 NA NA 9/4/2012 Reverse Mortgage Solutions Walter Investment Management 0.0 NA NA 9/3/2012 Midas Data Vitec Software Group 10.0 NA NA 8/27/2012 Deltek Thoma Bravo 1,028.8 3.0x 18.2x
  62. 62. 62 Summer 2013 Siemer SaaS Report Select Precedent SaaS Transactions Source: CapitalIQ and Siemer Proprietary Research (figures in millions of $USD) EV / LTM Date Announced Target Acquirer Implied EV Revenue EBITDA 8/27/2012 TMW Systems Trimble Navigation $334.0 3.5x NA 8/27/2012 Kenexa IBM 1,308.7 3.9x NM 8/27/2012 Pipfrog Soprano 0.3 NA NA 8/24/2012 Return To Scene SeaEnergy 16.0 5.1x NA 8/24/2012 Shandong Inspur Jiantong Information Shandong Inspur Software 0.0 NA NA 8/23/2012 K-log Stands Up Works Proprietary 1.8 NA NA 8/20/2012 Rig Support Services UMED Holdings 0.0 NA NA 8/17/2012 KSS Fuels INVESCO Asset Management 28.2 NA NA 8/15/2012 Accelerated Payment Technologies Global Payments 413.0 NA NA 8/14/2012 Infotech Enterprises Gagil FDI 261.3 0.9x 4.6x 8/13/2012 UC4 Software EQT Partners 282.5 3.5x NA 8/13/2012 Pervasive Software Actian 117.3 2.3x 25.6x 8/13/2012 Comverse Technology Verint Systems 1,471.9 0.9x 7.4x 8/11/2012 Hunan Datang Energy Technology Hunan Datang Xianyi Technology 4.5 NA NA 8/10/2012 VanceInfo Technologies Pactera Technology International 360.6 1.1x 15.8x 8/9/2012 Qt Development Frameworks Digia 5.2 NA NA 8/9/2012 Bay Bridge Decision Technologies Interactive Intelligence Group 12.9 NA NA 8/9/2012 Beacon Information Technology Bsp 33.1 NA NA 8/8/2012 Servigistics PTC 220.0 2.8x NA 8/7/2012 nQueue Billback Reckon 5.0 NA NA 8/7/2012 Agile Advantage Rally Software Development 0.4 NA NA 8/7/2012 Campus Labs Higher One Holdings 53.8 6.5x NA 8/7/2012 BigWorld Wargaming Public Company 45.0 NA NA
  63. 63. 63 Summer 2013 Siemer SaaS Report Select Precedent SaaS Transactions (figures in millions of $USD) EV / LTM Date Announced Target Acquirer Implied EV Revenue EBITDA 8/3/2012 Springsoft Synopsys Taiwan $290.8 3.6x 10.2x 8/3/2012 RealPractice ReachLocal 2.9 NA NA 8/2/2012 Starhome Fortissimo Capital 81.3 NA NA 8/2/2012 AMADEUS MARKETING CSA Amadeus IT Group 197.1 NA NA 8/1/2012 Frisk Software International Commtouch Software 4.1 NA NA 8/1/2012 Visualization Sciences Group FEI 55.1 2.4x NA 7/30/2012 20-20 Technologies Vector Capital 71.8 1.0x 9.2x 7/26/2012 Explorer Paltek 3.6 NA NA 7/25/2012 MacsDesign Studio SolarWinds 20.0 NA NA 7/24/2012 Upside Software SciQuest 28.0 NA NA 7/23/2012 Nicira Networks Vmware 1,263.0 NA NA 7/23/2012 DLD Group International Dianliandian ShopsNetwork 0.3 NA NA 7/19/2012 Accanto Systems NetScout Systems 15.0 NA NA 7/19/2012 Tri Eye Design Saguaro Oil and Gas Recovery 9.7 NA NA 7/19/2012 Maple Lake TXT e-solutions 18.2 2.0x 7.8x 7/17/2012 TRA TiVo 20.0 NA NA 7/17/2012 Delta Software Access UK 8.4 NA NA 7/16/2012 Guangdong New Pivot ZTE 3.4 NA NA 7/12/2012 Cassis International Morpho 5.0 NA NA 7/12/2012 Wavecom Solutions Hawaiian Telcom 8.3 NA NA 7/12/2012 Ascade CSG Systems International 19.0 1.2x 16.0x 7/11/2012 Innovative Dealer Technologies Vauto 9.5 NA NA 7/11/2012 Invention Machine HIS 40.0 NA NA Source: CapitalIQ and Siemer Proprietary Research
  64. 64. 64 Summer 2013 Siemer SaaS Report Select Precedent SaaS Transactions Source: CapitalIQ and Siemer Proprietary Research (figures in millions of $USD) EV / LTM Date Announced Target Acquirer Implied EV Revenue EBITDA 7/11/2012 GMC Software Neopost $61.2 1.4x NA 7/6/2012 microDATA GIS TeleCommunication Systems 37.0 NA NA 7/3/2012 Lindenhouse Software Reckon 22.6 NA NA 7/2/2012 Coin Software Rubik Financial 28.3 NA NA 7/2/2012 M-Audio and AIR Software Numark Industries 13.9 NA NA 7/2/2012 Lateral Data Xerox Litigation Services 30.0 NA NA 7/2/2012 Sigrity Cadence Design Systems 78.3 NA NA 7/2/2012 Avid Technology Corel 3.6 NA NA 7/2/2012 Lunch Byte Systems Heartland Payment Systems 26.0 NA NA 6/30/2012 Nuri Solution Samsung 7.0 0.4x NA 6/29/2012 FrogTrade YTL Power Investments 20.6 NA NA 6/28/2012 Cognovo u-blox Holding 16.5 NA NA 6/27/2012 FuseSource Red Hat 21.3 NA NA 6/26/2012 ProwebCE Iris Capital; Edmond de Rothschild 43.1 0.7x 13.2x 6/26/2012 Outreach Suite AccuFund 1.0 NA NA 6/25/2012 Alegeus Technologies Lightyear Capital 335.0 2.8x NA 6/25/2012 Quest Software Dell 2,432.0 2.7x 13.7x 6/25/2012 Keysite e-Trial 0.9 0.6x NA 6/20/2012 IOB Folhamatic Group Sage Group 246.8 3.7x 23.3x 6/20/2012 Wavelink LANDesk Software 82.0 NA NA 6/20/2012 NextOp Software Atrenta 5.0 NA NA 6/19/2012 Infochem Computer Services KBC Advanced Technologies 15.1 8.0x NA 6/19/2012 GE Medical Systems Ascom 28.0 1.4x NA 6/18/2012 Metrologic Group The Carlyle Group 136.4 3.9x 7.8x
  65. 65. 65 Summer 2013 Siemer SaaS Report Select Precedent SaaS Transactions (figures in millions of $USD) EV / LTM Date Announced Target Acquirer Implied EV Revenue EBITDA 6/15/2012 Yammer Microsoft $1,200.0 NA NA 5/22/2012 Ariba SAP America 4,390.1 8.5x NM Overall Transaction Statistics: Mean $165.8 2.6x 12.6x Median $17.1 1.8x 10.6x
  66. 66. Contact Information 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

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