Ad-tech Perspective April 2014

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The latest edition of our Advertising and Marketing Technology sector overview piece, looking at M&A and financing trends across the AdTech and marketing software sector

The latest edition of our Advertising and Marketing Technology sector overview piece, looking at M&A and financing trends across the AdTech and marketing software sector

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  • AC2012Net Rev. 24.1m, 22% increased in FY12 over FY11PositivesManagement Team
  • Deal size: Fermat & Moody’s: $200mDeal size: Chemistry & Publicis:£15mDeal size: seloger.com & 3i: €180mDeal size: Loot & DMGT: £45m
  • Loopfuse – USUserfox – USClicksquared – USPush IO – USMovable Ink – USResponsys – USMortgage CEO (ARG Interactive) – USCompendium – USVerticurl – SingaporeNeolane – FranceExact Target – USMarket Leader – USTweasy – SwitzerlandJangoMail – USEloqua – USDachis Group – USUbervu – UKItegrasco – NorwayThe Echo System – USRealtidbits – USOptimal – USBread – USTwentyfeet – GermanSensemetric – AustriaShopalize – USSemantelli – USBluefin – USGrosocial – USBlinkq Media – USWildfire - US
  • Admobius – USSimplytics – UKSmartReceipt – USGauge Mobile – CanadaSense Networks – USHunt Mobile Ads – USVelti – mobile marketing business in India, UK, US (ultimately US HQ)Onavo – UKHubbl – USXtify – USMopub – USGradientX – USJumptap – USLumata – US assetsWDA (Wireless developer agency) – uUS
  • Crunchbase SearchSector Advertising -> Social Marketing -> After Jan 2012

Transcript

  • 1. Advertising And Marketing Technology March 2014 Disclaimer: This document has been produced by Results International Group LLP (“Results”) and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein and, accordingly, none of Results‟ officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. Julie Langley Mark Williams Partner Director +44 (0) 20 7514 8247 +44 (0) 20 7514 8242 jlangley@resultsig.com mwilliams@resultsig.com For more information contact: Market overview and update
  • 2. Contents 01 About Us 02 Market Landscape 03 Public Markets Environment 1
  • 3. Digital Media Selected clients and transaction counterparties (1) Corporate Finance Advisors to the Adtech, Software & Marcoms Sectors An established team of sector experts… • Results International is a market-leading M&A advisory firm founded in 1991 • Entrepreneurial and owner-managed • 40 person global team with over 250 completed transactions • Senior level attention on all transactions Adtech Marketing ServicesSoftware Sector specialism …with global reach (1) Some clients were advised by Results International Partners at prior firms 2
  • 4. James Kesner Manager Anthony Harrington Manager Mark Williams Director Selected Team Members- UK Andy Collins Senior Partner • Joined Results in 2005 and has completed over 50 transactions, raised £150m of funding from private equity and the Capital Markets and provided strategic advice to a wide range of businesses • Clients include Abacus, Retail Eyes, Bridgehead International, Chemistry Communications, Latitude, and Total Healthcare Group Keith Hunt Managing Partner • Joined Results in 2005 - Previously Head of M&A at Ernst & Young • 20+ years experience in corporate finance, including M&A, fundraising, IPOs, JVs, MBOs and MBIs • Clients include The Group, Figtree, Monitor Media, Spannerworks, Flip Media, Transactis, Punktilio, Flamingo, Brand X, and AIA • Joined Results in 2012. He started his career at KPMG working in Financial Services M&A and moved to Ingenious Corporate Finance in 2010 • Clients include Staffcare, Moonpig, St Ives, and Inflexion Julia Crawley-Boevey Director • Joined Results in 2010 having spent over four years at BDO where she worked in both Audit and Corporate Finance • Clients include The Group, Blue Rubicon, Virgo Health, Incite, and Crayon • Joined Results in 2013, has experience in healthcare focused corporate finance at Bear Stearns, Rothschild and Investec • Clients include Enteq Upstream PLC, Arena Leisure PLC, Busy Bees and Protherics PLC • Joined Results in 2013 from Kingston Smith • ACA qualified, has previously worked as a Finance Director for a London based brand consultancy • Previous clients include ID magazine, Not to Scale, Writtle, Adam and Eve Jim Houghton Partner • Joined Results in 2010, with over 10 years of M&A experience • Prior to joining Results Jim led European M&A activity for the marketing services division of Omnicom (DAS) • Clients include We are Social, Blue Rubicon, Virgo Health, Crayon, Iris, and United News & Media plc • Joined Results in 2012 to lead the tech and digital media practice • 15 years M&A experience at Broadview then Jefferies, advising tech and digital media companies on M&A and fundraising • Advised on transactions with Oracle, Microsoft, Experian, Moody‟s, IAC, Axel Springer, DMGT, and BT, amongst others Julie Langley Partner 3
  • 5. • Co-founded GroupArgent in 2005. Closed $4.0 billion in cross-border transactions including several Canada-US • Experience includes advising Hunt Mobile Advertising on its transaction with Opera Mediaworks, Telesystem International Wireless (NASDAQ: TIWI) sold to Vodafone, and buyout and exit representation for Canadian firms Caisse de Dépôt and Wynnchurch Pierre-Georges Roy Partner Selected Team Members - International • Long career in marketing sector (Ogilvy & Mather, The Ball Partnership) • Managed the acquisition of SMART to McCann Worldgroup, CCG by Publicis Group to establish Digitas China, CIC by Kantar Media and The Upper Storey by Isobar Andrew Kefford Managing Partner – Asia Pacific & MENA Chris Beaumont Managing Partner – North Asia • 16 years of experience consulting in Asia • For 10 years Chris was with McCann-Erickson in Asia; he was both Vice-Chairman of its operations in Tokyo and Chief Strategy Officer for WorldGroup across Asia • Co-founded GroupArgent in 2005 and has closed over 35 transactions totaling $0.75 billion • Experience includes advising Hunt Mobile Advertising on its transaction with Opera Mediaworks • Prior to GroupArgent, Maurice worked at the Zanett Group, Morgan Stanley and IBM Maurice Watkins Partner • Joined Results in 2008 and has 13 years working in financial services, with over 8 years of experience as a corporate finance specialist • Previously worked at Nomura, Royal Bank of Canada and Ernst & Young • Clients include Abacus, Total Healthcare Group, Synergy, D2D and Retail Eyes Hemavli Bali Executive Director • 27 years experience in the advertising sector, including as COO of JWT's Middle East Network • Joined Results International in 2008 and has since been engaged in a number of buy and sell mandates Imad Kublawi Regional Partner – MENA • Spent 24 years at Hindustan Thompson (part of JWT), the largest ad agency in India • Other roles include COO at RK Swamy/BBDO and as advisor to companies in India, Pakistan & Dubai Sunil Gupta Area Liaison – South Asia 4 US Team Asia Team
  • 6. Selected Transactions Across Technology, Marcoms & Digital Media NOTE: Certain transactions were advised on by RI’s Partners at previous firms. 5 has been acquired by has invested in has been acquired by has been acquired by has been acquired by is joining has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has completed a joint venture with has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by
  • 7. Content 01 About Us 02 Market Landscape 03 Public Markets Environment 6
  • 8. Measurement & Optimisation • Ad Network and Exchanges • DSPs/SSPs/DMPs • Programmatic Trading Space • Targeting/Retargeting • Tracking, Tag Management Attribution • Optimisation Marketing Technology Landscape – Illustrative Companies Marketing Automation • Omnichannel Campaign Management • Marketing Automation • Lead Management • Email Marketing Social CRM / Social Software / Data Advertising Platforms Mobile • Mobile Marketing • Mobile App Platforms • Mobile DSPs • Mobile Ad Management/Ad Serving • mCommerce eCommerce Tech • eCommerce Platforms • Recommendation Software • Personalisation Software • eCommerce Logistics • Content Management Video • OVP‟s • Video Sharing • Video Commerce/ Marketing • Video Creation Tools • Video Ad Networks • Video Search Engines Subsegments Diversified Vendors Selected Representative Companies • Social Media Tools • Ratings & Reviews • Monitoring & Intelligence • Analytics • Customer Service Solutions • Enterprise social networking 7
  • 9. Advertising Platforms Landscape – Illustrative Companies 8 Specialised entities of media buying agencies focusing on media trading and RTB Agency buying desks Demand side Technology for media buyers aggregate, bid on and optimize digital inventory across multiple sources Demand side platforms (DSPs) Technology / marketplaces to connect publishers and advertisers and advertisements on websites Ad Exchanges & Ad Servers Data providers and data management Platforms (DMP) Data Management Platforms (DMPs) Commonly known as yield managers/optimisers Supply side platforms (SSPs) Supply side Enable the publishers of the website they Represent to sell more Inventory Ad Networks RTB Focus
  • 10. 36 43 32 34 26 34 49 43 61 55 48 45 78 78 88 65 64 70 89 73 77 68 49 59 0 10 20 30 40 50 60 70 80 90 100 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Strength Of The Global M&A Ad Tech Market (#Deals) Sources: Press releases, CapitalIQ, Corpfin, and Results’ Analysis  Adtech consolidation continues at pace – however there is substantial VC funding going into the sector and the number of new start-ups is outpacing the number of acquisitions (Source: Luma Partners)  Key M&A drivers: - Established players have been acquiring new capabilities/ technologies to extend their existing product suites - Large internet conglomerates and technology companies continue to compete to remain „on top‟ of new tech innovations and are competitively scouring the market for the best start-ups and talent - Yahoo, in particular, was a prolific acquirer in 2013 making over 30 acquisitions  The IPO market has recently opened for adtech including RocketFuel, Criteo and YuMe, however these parties have yet to use their currency to pursue acquisitions - As many of the recently IPO‟d companies have large operating losses and without profitability in sight, these companies are unlikely to make significant acquisitions unless a deal is highly strategic 9
  • 11. Selected Recent Deal Activity Date Buyer Target EV ($m) EV/REV Description Jan-14 n.a. n.a. Marketing automation and lead generation platform Jan-14 n.a. n.a. Marketing automation platform provider Jan-14 n.a. n.a. Cross-channel campaign management SaaS platform Jan-14 n.a. n.a. Mobile and web push notifications Jan-14 n.a. n.a. Technology that turns graphic designs into email marketing Dec-13 1,497 7.7x Software to orchestrate marketing interactions Oct-13 n.a. n.a. CRM and marketing automation solutions Oct-13 15 7.5x Content marketing start-up Aug-13 n.a. n.a. Marketing automation & demand generation Jun-13 600 10.3x Cross-channel campaign management Jun-13 2,562 8.1x Cloud-based marketing automation May-13 344 7.2x Lead generation and conversion software May-13 n.a. n.a. App for SMEs to create email & mobile marketing campaigns May-13 n.a. n.a. Web-based email marketing system Dec-12 871 9.2x(1) Cloud-based marketing automation (1) Eloqua was on a revenue run rate of approx. $95m, 9.2x is the run rate revenue multiple (2) Consideration was reportedly between $15-20m Marketing Automation 10 Date Buyer Target EV ($m) EV/REV Description Feb-14 n.a. n.a. Social media strategy platform Jan-14 18(2) n.a. Social analytics platform Jan-14 n.a. n.a. Social intelligence and text analytics Dec-13 n.a. n.a. Social media analytics and engagement platform Nov-13 n.a. n.a. Social analytics platform Oct-13 35 n.a. Social advertising and analytics platform Oct-13 n.a. n.a. "Billboard", social ads to promote products Jul-13 n.a. n.a. Social media monitoring company Jun-13 n.a. n.a. Platform for conducting social media analysis May-13 n.a. n.a. Social commerce platform Apr-13 n.a. n.a. Social media listening and compliance Feb-13 c.75 n.a. Social media monitoring for TV shows & commercials Jan-13 n.a. n.a. Social media marketing suite for SMBs Aug-12 40 n.a. Social media advertising services Jul-12 350 n.a. Social media marketing software Social CRM / Social Software
  • 12. Selected Recent Deal Activity Date Buyer Target EV ($m) EV/REV Description Mar-14 n.a. n.a. Mobile ad targeting Jan-14 n.a. n.a. Mobile ad server and analytics platform Jan-14 2 n.a. "Smart receipts" that feature coupons and special offers Jan-14 n.a. n.a. Proximity mobile marketing firm Jan-14 n.a. n.a. Technology to target display ads to audiences & locations Jan-14 n.a. n.a. Mobile advertising network Nov-13 n.a. n.a. Mobile marketing business in India, UK and US Oct-13 150(1) n.a. Mobile data analytics platform Oct-13 15 n.a. Mobile personalisation and native advertising technology Oct-13 n.a. n.a. Cloud-based mobile messaging tools Sep-13 350 n.a. Ad inventory management platform for mobile publishers Sep-13 n.a. n.a. Real-time bidding platform for mobile ads Aug-13 209(2) n.a. Mobile ad network - targeted advertising Aug-13 n.a. n.a. US assets of mobile marketing and software company Jul-13 n.a. n.a. Mobile marketing technology and services 11 (1) Total deal size is reportedly between $100-200m (2) Jumptap shareholders received 24.6m of Millennial Media shares, based on August 14 share price $8.5 (3) Consideration consists of 3m of Brightcove stock and $9m in cash (4) Does not include approx. $4m in employee equity instruments which vest over next 4 year period (5) A further $10m of consideration is payable to employees and management as incentive and retention payments over next 12 month period (6) EV includes extra consideration of $5m which is contingent on further investment not being required for the new company post acquisition Mobile Technology Date Buyer Target EV ($m) EV/REV Description Mar-14 360 n.a. Video ad placement technology Feb-14 26(3) n.a. Targeted video advertising technology Jan-14 49(4) 9.8x Video advertising technology Dec-13 55(5) 2.2x Mobile video advertising technology platform Oct-13 n.a. n.a. Video creative build and distribution Oct-13 n.a. n.a. Social artery for video news, inspiration and leading voices Sep-13 n.a. n.a. Online video demand side platform Aug-13 490(6) n.a. TV advertising distribution unit of Digital Generation Aug-13 405 n.a. Video advertising platform Aug-13 n.a. n.a. Video content syndication and advertising platform May-13 n.a. n.a. Platform for social video advertising Apr-13 n.a. n.a. Video advertising network Mar-13 n.a. n.a. Video advertising network Jan-13 n.a. n.a. In-stream video advertising optimization Dec-12 n.a. n.a. Mobile and video in-game ad delivery platform Video Technology
  • 13. Selected Recent Deal Activity 12 Date Buyer Target EV ($m) EV/REV Description Feb-14 n.a. n.a. SEO technology for eCommerce sites Feb-14 n.a. n.a. eCommerce software solutions Jan-14 n.a. n.a. eCommerce platform Jan-14 83(1) n.a. eCommerce and ad personalisation technology Jan-14 n.a. n.a. Digital publishing and eCommerce SaaS solutions Nov-13 Sitecore Commerceser ver.net n.a. n.a. CXM platform with integrated eCommerce engine Oct-13 n.a. n.a. SaaS logistics and supply chain management Oct-13 Francisco Partners Avangate n.a. n.a. Customer-centric eCommerce solution Oct-13 Staples Runa n.a. n.a. eCommerce personalisation technology Aug-13 n.a. n.a. eCommerce solutions provider Aug-13 Sanderson Catan Marketing 1 0.7x eCommerce solutions provider Jul-13 n.a. n.a. eCommerce app platform Jun-13 n.a. n.a. eCommerce platform that places promotions (Buy Now) Jun-13 Rakuten Webgistix n.a. n.a. Cloud-based fulfillment technology for eCommerce Jun-13 1,351 10.8x eCommerce software Ecommerce Technology (1) Does not include a further $7.7m of consideration paid out over next two years (2) EV / TTM EBIT multiple of 2.2x (3) Further consideration of up to $13.1m is available based on Republic Project reaching revenue and adjusted EBITDA performance targets in 2014 and 2015 (4) Valuation reportedly ranges from $10-15m Date Buyer Target EV ($m) EV/REV Description Mar-14 n.a. n.a. Data management platform Mar-14 n.a. n.a. Tag management technology Feb-14 n.a. n.a. Data management platform Feb-14 n.a. n.a. Programmatic media buying and optimisation platform Feb-14 n.a. n.a. Media trading firm Dec-13 24/7 Media Cyrstal Semantics 3 n.a.(2) Advertising solutions to match advertisements to content Nov-13 Zanox Metrigo n.a. n.a. RTB buyside platform Nov-13 StartMeApp AdNubo n.a. n.a. Technology in programmatic, desktop RTB trading Nov-13 Centro Sitescout 40 n.a. RTB platform Oct-13 Neustar Aggregate Knowledge 119 n.a. Data management platform Oct-13 DG Republic Project 1(3) n.a. Ad platform for rich media advertisements Oct-13 CPXi AdReady n.a. n.a. Self-serve advertising platform and dynamic creative vendor Sep-13 Networkplay YoCAPTCHA n.a. n.a. Advertising platform Aug-13 W Technologies AdMedia Group n.a. n.a. Digital advertising distribution technology Aug-13 KDDI ScaleOut 13(4) n.a. Demand side platform Advertising Platforms
  • 14. Content 01 About Us 02 Market Landscape 03 Public Markets Environment 13
  • 15. 23.2x 15.0x 20.8x 15.6x n.a. 9.7x 12.6x 0.0x 5.0x 10.0x 15.0x 20.0x 25.0x Diversified Internet Marketing Technology Video Mobile Social CRM Diversified Agencies Enterprise Software 28% 11% 0% 24% 0% 17% 30% 0% 5% 10% 15% 20% 25% 30% 35% Diversified Internet Marketing Technology Video Mobile Social CRM Diversified Agencies Enterprise Software 6.7x 4.3x 2.5x 3.8x 2.9x 1.6x 4.2x 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x 8.0x Diversified Internet Marketing Technology Video Mobile Social CRM Diversified Agencies Enterprise Software 14% 20% 21% 35% 15% 4% 9% 0% 5% 10% 15% 20% 25% 30% 35% 40% Diversified Internet Marketing Technology Video Mobile Social CRM Diversified Agencies Enterprise Software Valuation Benchmarks 14 EBITDA Margins 2014E EV/EBITDA 2014E Revenue growth (13-14E) EV/REV 2014E N/A Notes: EV = Enterprise Value; Calendarised to December year end Source: Capital IQ and Analyst Reports Note – see appendix for details of companies included in each category N/A
  • 16. Company IPO Date IPO Share Price Current Share Price % Change Since IPO High Since Trading Low Since Trading Current EV EV/Rev 2014E EV/EBITDA 2014E AIM November 2013 0.96 1.23 28% 1.51 0.69 129 11.0x n.m. Nasdaq October 2013 31.00 52.41 69% 60.95 28.27 2,700 10.9x 54.8x Nasdaq September 2013 29.00 52.08 80% 71.89 37.81 2,073 8.8x n.m. NYSE August 2013 9.00 6.45 (28%) 12.08 5.79 164 1.8x 30.4x NYSE June 2013 10.00 4.75 (53%) 11.09 3.59 152 2.3x n.m. Nasdaq May 2013 13.00 39.05 200% 45.00 17.20 1,673 12.4x n.m. NYSE March 2013 14.00 10.78 (23%) 19.95 8.50 283 3.0x n.m. IPO Case Studies 15 Source – Capital IQ, Market Data as of 9th March 2014; Note – Calendarised to December year end $ millions, except share price data IPO Current Trading Valuation
  • 17. 27 Soho Square, London, W1D 3AY t +44 20 7629 7575 | f +44 20 7629 2233 www.resultsig.com Contact Us Julie Langley Partner Di: +44 (0) 20 7514 8247 E: jlangley@resultsig.com 16 Mark Williams Director Di: +44 (0) 20 7514 8242 E: mwilliams@resultsig.com
  • 18. Content Appendix 17
  • 19. usd millions, except per share data Valuation Metrics Operating Metrics Price Market Net Enterprise Revenue EBITDA Revenue Growth EBITDA Margin Company (09-Mar-14) Cap Debt Value CY2014 CY2015 CY2014 CY2015 CY13-14 CY14-15 CY2014 CY2015 Diversified Internet Google Inc. 607.40 409,684 (50,983) 358,701 6.7 x 5.8 x 13.7 x 11.4 x 12.1% 16.7% 49.1% 50.6% Yahoo! Inc. 38.70 39,580 (1,647) 37,932 8.4 x 8.2 x 33.9 x 30.5 x 2.6% 2.1% 24.7% 26.8% AOL Inc. 44.04 3,663 (85) 3,578 1.9 x 1.9 x 6.8 x 6.5 x 2.2% 0.5% 27.9% 29.1% Facebook, Inc. 69.80 178,960 (12,237) 166,723 14.1 x 10.9 x 23.2 x 17.6 x 50.0% 29.9% 60.8% 61.6% LinkedIn Corporation 206.79 24,988 (2,324) 22,664 10.7 x 8.0 x 43.5 x 29.1 x 38.4% 33.8% 24.6% 27.5% Amazon.com Inc. 372.06 171,201 (5,519) 165,682 1.8 x 1.5 x 24.2 x 18.0 x 20.8% 19.8% 7.6% 8.6% eBay Inc. 59.06 75,241 (4,902) 70,339 3.9 x 3.4 x 11.8 x 10.4 x 13.7% 14.6% 32.8% 32.4% 25th percentile 2.9 x 2.6 x 12.7 x 10.9 x 7.4% 8.4% 24.6% 27.2% Median 6.7 x 5.8 x 23.2 x 17.6 x 13.7% 16.7% 27.9% 29.1% 75th percentile 9.5 x 8.1 x 29.0 x 23.5 x 29.6% 24.9% 41.0% 41.5% Marketing Technology Experian plc 17.50 17,432 3,314 20,746 4.0 x 3.7 x 11.6 x 10.6 x 7.1% 7.3% 34.5% 35.0% Marin Software Incorporated 10.78 381 (98) 283 3.0 x 2.5 x n.m. n.m. 23.8% 19.8% (24.5%) (15.4%) LivePerson Inc. 13.26 749 (92) 657 3.3 x 2.8 x 30.3 x 24.0 x 13.5% 14.3% 10.8% 11.9% Demandware, Inc. 76.27 2,920 (275) 2,645 18.3 x 12.8 x n.m. n.m. 39.1% 42.7% 2.7% 6.6% Vocus Inc. 13.64 295 44 339 1.9 x 1.8 x 15.0 x 12.7 x (2.2%) 3.8% 12.4% 14.0% Digital River Inc. 17.90 588 (294) 294 0.8 x 0.7 x 6.0 x 4.9 x (4.8%) 5.9% 13.3% 15.2% Interactive Intelligence Group Inc. 79.53 1,761 (98) 1,663 4.5 x 3.9 x n.m. n.m. 15.2% 17.1% 5.9% 5.3% Constant Contact, Inc. 29.96 992 (123) 868 2.6 x 2.3 x 14.3 x 11.7 x 15.8% 13.3% 18.4% 19.8% Marketo, Inc. 39.05 1,784 (111) 1,673 12.4 x 9.4 x n.m. n.m. 40.4% 32.2% (28.0%) (14.3%) Rocket Fuel Inc. 52.08 2,160 (86) 2,073 8.8 x 5.5 x n.m. 54.1 x 72.8% 59.1% 1.8% 10.2% Criteo SA 52.41 3,010 (310) 2,700 10.9 x 8.3 x 54.8 x 30.3 x 38.8% 31.2% 19.8% 27.3% PROS Holdings, Inc. 33.01 1,015 (45) 971 5.1 x 4.2 x 43.2 x 26.8 x 31.4% 20.1% 11.8% 15.9% 25th percentile 2.9 x 2.4 x 12.9 x 11.5 x 11.9% 11.8% 2.5% 6.3% Median 4.3 x 3.8 x 15.0 x 18.3 x 19.8% 18.5% 11.3% 13.0% 75th percentile 9.3 x 6.2 x 36.8 x 27.7 x 38.9% 31.4% 14.6% 16.8% Video Brightcove, Inc. 10.79 358 (36) 322 2.5 x 2.2 x n.m. n.m. 16.9% 16.3% (5.3%) 0.0% Rightster Group Plc 1.23 150 (21) 129 11.0 x 3.7 x n.m. n.m. 13.6% 194.3% (168.6%) 1.9% Blinkx plc 1.71 704 (69) 635 4.5 x n.a. 11.3 x n.a. 21.3% n.a. 39.7% n.a. Tremor Video, Inc. 4.75 245 (93) 152 2.3 x 1.8 x n.m. n.m. 22.0% 30.9% (16.3%) 2.4% YuMe, Inc. 6.45 214 (50) 164 1.8 x 1.4 x 30.4 x 11.9 x 28.0% 28.5% 5.9% 11.8% 25th percentile 2.3 x 1.7 x 16.0 x 11.9 x 16.9% 25.4% (16.3%) 1.5% Median 2.5 x 2.0 x 20.8 x 11.9 x 21.3% 29.7% (5.3%) 2.2% 75th percentile 4.5 x 2.5 x 25.6 x 11.9 x 22.0% 71.7% 5.9% 4.8% Selected Publicly Traded Companies 18 See Slide 20 for sources and notes
  • 20. usd millions, except per share data Valuation Metrics Operating Metrics Price Market Net Enterprise Revenue EBITDA Revenue Growth EBITDA Margin Company (09-Mar-14) Cap Debt Value CY2014 CY2015 CY2014 CY2015 CY13-14 CY14-15 CY2014 CY2015 Mobile Millennial Media Inc. 6.33 683 (97) 585 3.3 x 2.4 x 16.5 x 8.4 x 33.4% 32.9% 19.7% 29.2% Opera Software ASA 13.46 1,846 (103) 1,743 4.3 x 3.4 x 14.7 x 11.3 x 36.1% 26.2% 28.9% 30.0% 25th percentile 3.5 x 2.7 x 15.2 x 9.1 x 34.1% 27.9% 22.0% 29.4% Median 3.8 x 2.9 x 15.6 x 9.8 x 34.8% 29.6% 24.3% 29.6% 75th percentile 4.0 x 3.1 x 16.1 x 10.6 x 35.5% 31.2% 26.6% 29.8% Social CRM / Social Software Bazaarvoice, Inc. 8.10 611 (57) 554 2.8 x 2.5 x n.m. n.m. 10.9% 12.3% (2.8%) 1.9% Jive Software, Inc. 8.43 621 (100) 521 3.0 x 2.5 x n.m. n.m. 18.4% 18.3% (8.3%) (1.3%) 25th percentile 2.9 x 2.5 x n.a. n.a. 12.8% 13.8% (6.9%) (0.5%) Median 2.9 x 2.5 x n.a. n.a. 14.7% 15.3% (5.6%) 0.3% 75th percentile 3.0 x 2.5 x n.a. n.a. 16.5% 16.8% (4.2%) 1.1% Diversified Agencies Dentsu Inc. 38.77 11,180 2,276 13,455 2.3 x 2.2 x 9.5 x 9.2 x 14.6% 4.0% 24.2% 24.0% Havas 8.29 3,409 (233) 3,176 1.3 x 1.2 x 7.7 x 7.3 x 2.7% 3.4% 16.3% 16.7% The Interpublic Group of Companies, Inc.17.75 7,590 305 7,896 1.1 x 1.0 x 8.2 x 7.2 x 4.4% 4.5% 12.9% 14.1% Omnicom Group Inc. 75.50 19,642 2,639 22,281 1.5 x 1.4 x 9.9 x 9.3 x 4.2% 4.7% 14.8% 15.1% Publicis Groupe SA 94.31 20,329 (748) 19,582 1.9 x 1.8 x 10.6 x 9.8 x 4.6% 5.3% 18.4% 18.8% WPP plc 21.03 28,023 4,182 32,205 1.7 x 1.6 x 9.9 x 9.4 x 1.1% 5.4% 17.4% 17.4% 25th percentile 1.3 x 1.3 x 8.6 x 7.8 x 3.1% 4.1% 15.1% 15.5% Median 1.6 x 1.5 x 9.7 x 9.3 x 4.3% 4.6% 16.9% 17.1% 75th percentile 1.9 x 1.8 x 9.9 x 9.4 x 4.6% 5.2% 18.1% 18.5% Selected Publicly Traded Companies 19 See Slide 20 for sources and notes
  • 21. usd millions, except per share data Valuation Metrics Operating Metrics Price Market Net Enterprise Revenue EBITDA Revenue Growth EBITDA Margin Company (09-Mar-14) Cap Debt Value CY2014 CY2015 CY2014 CY2015 CY13-14 CY14-15 CY2014 CY2015 Enterprise Software Sage Group plc 7.02 7,714 602 8,316 3.6 x 3.4 x 12.1 x 11.2 x 0.6% 5.1% 29.8% 30.5% Blackbaud Inc. 31.41 1,427 141 1,568 2.8 x 2.6 x 15.4 x 11.8 x 9.5% 7.5% 18.5% 22.4% Adobe Systems Inc. 68.52 34,388 (1,622) 32,766 7.8 x 6.5 x 28.7 x 18.8 x 3.4% 19.9% 27.2% 34.7% Concur Technologies, Inc. 115.51 6,585 (191) 6,393 8.7 x 7.1 x 53.0 x 40.0 x 25.7% 23.7% 16.5% 17.7% Qlik Technologies, Inc. 30.00 2,780 (253) 2,527 4.6 x 3.9 x n.m. 40.9 x 17.0% 16.8% 7.6% 9.6% Salesforce.com, Inc 60.74 37,815 1,670 39,485 7.6 x 6.1 x 51.8 x 37.4 x 30.2% 24.3% 14.7% 16.4% Oracle Corporation 38.83 179,106 (12,520) 166,586 4.2 x 4.0 x 8.3 x 7.8 x 4.3% 4.5% 50.9% 51.7% Microsoft Corporation 37.90 313,194 (64,952) 248,242 2.8 x 2.6 x 7.7 x 7.2 x 8.7% 9.2% 36.7% 35.5% SAP AG 77.94 94,983 (405) 94,578 3.9 x 3.6 x 11.2 x 10.3 x 4.2% 6.6% 34.6% 35.5% Intuit Inc. 82.20 23,834 (832) 23,002 5.0 x 4.6 x 12.4 x 11.4 x 7.9% 7.8% 39.8% 40.3% Open Text Corporation 50.25 6,202 997 7,199 4.1 x 3.6 x 12.8 x 10.9 x 18.6% 12.4% 31.8% 33.2% 25th percentile 3.7 x 3.5 x 11.4 x 10.6 x 4.2% 7.0% 17.5% 20.0% Median 4.2 x 3.9 x 12.6 x 11.4 x 8.7% 9.2% 29.8% 33.2% 75th percentile 6.3 x 5.4 x 25.3 x 28.1 x 17.8% 18.4% 35.7% 35.5% Selected Publicly Traded Companies Cont. 20 Sources: Net revenues have been used where appropriate Yahoo – financials taken from Credit Suisse (January 2014) & checked against company's financial results, market data taken from CapitalIQ Google – financials taken from Morgan Stanley (March 2014) & checked against company's financial results, market data taken from CapitalIQ AOL – financials taken from Deutsche Bank (February 2014) & checked against company's financial results, market data taken from CapitalIQ Rocket Fuel – financials taken from Credit Suisse (February 2014) & checked against company's financial results, market data taken from CapitalIQ Criteo – financials taken from Deutsche Bank (February 2014) & checked against company's financial results, market data taken from CapitalIQ Tremor Video – financials taken from Credit Suisse (February 2014) & checked against company's financial results, market data taken from CapitalIQ Millennial Media – financials taken from Morgan Stanley (February 2014) & checked against company's financial results, market data taken from CapitalIQ YuMe – financials taken from Deutsche Bank (February 2014) & checked against company's financial results, market data taken from CapitalIQ Dentsu - financials taken from Morgan Stanley (February 2014) & checked against company's financial results, market data taken from CapitalIQ Blinkx - financials taken from Jefferies (January 2014) & checked against company's financial results, market data taken from CpaitalIQ For all other companies – financials and market data taken from CapitalIQ Note: Financials calendarised to December year end, market data as at 9th March 2014