2013 M&A Silicon Valley Gathering (MASiV)

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MASiV focuses on how the most successful software and internet companies use M&A to innovate, grow, and compete. Woodside Capital Partners brings together influential corporate development executives and business unit leaders with CEOs and venture capitalists to talk about current trends in M&A.

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2013 M&A Silicon Valley Gathering (MASiV)

  1. 1. MASiV 2013: The M&A Silicon Valley Gathering M&A Market: Overview, Thoughts and Insights Kelly Porter Managing Director, Woodside Capital Partners M&A Silicon Valley Gathering January 17-18, 2013
  2. 2. MASiV 2013: The M&A Silicon Valley Gathering The Key M&A Market Driver : CEO Confidence Source: Vistage CEO Survey, responses from 1,601 U.S. CEOs, surveyed between December 10 and December 19, 2012
  3. 3. MASiV 2013: The M&A Silicon Valley Gathering 150% Stock Market Indices Growth 75% 0% ‐75% ‐150% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 NYSE Composite Hang Seng Index Global M&A by Value $3,662 $3,407 $3,168 $2,470 $2,537 $2,433 $2,288 $1,728 $1,851 $1,519 $1,607 $1,207 $1,056 2000 2002 2004 2006 2008 2010 2012Source: Capital IQ
  4. 4. MASiV 2013: The M&A Silicon Valley Gathering U.S. M&A Activity as a Percentage of Market Capitalization 11% 10% 9% 7% 7% 7% 6% 6% 6% 6% 5% 4% 4% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Thompson Reuters M&A Database
  5. 5. MASiV 2013: The M&A Silicon Valley Gathering Global Tech Acquisitions In Dollar Volume (Billions) $500 $B $400 $300 $200 $100 $0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 M&A IPO Source: Capital IQ
  6. 6. MASiV 2013: The M&A Silicon Valley Gathering $B 2012 Global Tech M&A – by Month $25 1600 $23 1400 $20 $19 1200 $15 $15 $15 $14 $13 1000 $10 $10 $10 $10 800 $10 $6 600 $5 $5 400 $0 200 Source: Capital IQ
  7. 7. MASiV 2013: The M&A Silicon Valley Gathering An indicator of the appetite for risk Tech Transactions $1B+  Since 2003 64 50 49 39 38 36 33 28 19 19 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Capital IQ
  8. 8. MASiV 2013: The M&A Silicon Valley Gathering 2012 Tech IPO Performance Since Offering – Selected Companies Guidewire Software (E) 148% Workday (E) 84% Splunk (E) 84% DemandWare (E) 76% EPAM (E) 67% Vocera Communications (E) 61% Kayak (C) 56% ServiceNow (E) 45% Yelp (C) 44% Palo Alto Networks (E) 26% Infoblox (E) 21% ExactTarget (E) 16% Brightcove (E) ‐10% Facebook (C) ‐18% Audience (C) ‐29% Bazaarvoice (E) ‐45% Millennial Media (E) ‐53% CafePress (C) ‐71% Envivio (E) ‐79% ‐100% ‐50% 0% 50% 100% 150% Source: Yahoo! Finance Prices as of 1/14/13
  9. 9. MASiV 2013: The M&A Silicon Valley Gathering Global Software and Internet Acquisition Activity – Last Ten Years  5,000  $300 3,892   $250  4,000 3,758  3,436   $200 # of Transactions  3,000 2,524   $150 2,038  $ Value of  2,000 Announced  $100 Transactions ($B)  1,000  $50  ‐  $‐ Source: Capital IQ
  10. 10. MASiV 2013: The M&A Silicon Valley Gathering Top-25 Acquirers in Software – Announced Acquisitions, Last Five Years Google 100+ IBM 36 Facebook 30 Oracle 30 Zynga 26 Nuance 20 Autodesk 19 salesforce.com 19 Vmware 19 Twitter 18 j2 Global 17 Microsoft 16 ADP 14 Synopsys 14 CA Technologies 12 Citrix Systems 12 eBay 12 VeriFone Systems 12 AOL 11 BMC Software 11 Quest Software 11 Yahoo! 11 Adobe Systems 10 SAP 10 Symantec 10 Source: Capital IQ
  11. 11. MASiV 2013: The M&A Silicon Valley Gathering Breakdown of Software-Internet Transactions by Transaction size – Last five years $500M ‐ $1 Billion  159  $100M ‐ $500M   1% 980  $1 Billion or More  155 3% <1% $100M or Less   10,156  31% Undisclosed  21,063  65% Source: Capital IQ
  12. 12. MASiV 2013: The M&A Silicon Valley Gathering Valuations in M&A – Avg. Multiples of Revenue 10x 8x 7.8x 6x 5.4x 5.5x 4.7x 4.3x 4x 3.4x 2.8x 2.1x 2.1x 2x 1.0x 0x 2008 2009 2010 2011 2012 Top 50 Transaction Multiples ‐ All Tech Top 50 Transaction Multiples ‐ Software and Internet Source: Capital IQ
  13. 13. MASiV 2013: The M&A Silicon Valley Gathering Thoughts on What’s Going On Around Us Important Events of 2012 - Enterprise • VMWare’s foray into software defined networking: $1.2B Nicira acquisition • Salesforce’ $1 billion spend on its marketing cloud • Dell’s push into software; $2.2 billion acquisition of Quest Software • IBM’s $1.4 billion purchase of Kenexa • SAP’s continued evolution into the cloud • Oracle’s continued evolution into the cloud • Citrix’s purchase of Zenprise in December • HP’s $17 billion of write downs of bad acquisitions • Microsoft’s $10 billion spending spree last 18 months; and new approach • Google’s purchase of QuickOffice in June
  14. 14. MASiV 2013: The M&A Silicon Valley Gathering Thoughts on What’s Going On Around Us Looking Ahead to 2013 - Enterprise • Major enterprise companies are still trying to reinvent themselves • Google will continue to be the most important player in the M&A landscape  • Expect to see a lot of companies testing the market who are unable to raise  funding • More cross‐border deals, especially with China • Further activity in the Social Marketing Space  • We expect big data‐analytics and predictive‐analytics tools will be one of the  next big markets to consolidate • The BYOD phenomenon will create additional activity in 2013  • Significant activity / consolidation expected in the Data Center Information  Market
  15. 15. MASiV 2013: The M&A Silicon Valley Gathering Thoughts on What’s Going On Around Us Important Events of 2012 - Consumer • The Crash of Facebook, Zynga and Groupon • Facebook’s acquisitions in mobile • AOL’s sale of patents to Microsoft for $1.1 billion, and Yahoo’s sale of it’s stake in Alibaba for $7.6 billion • Zynga’s purchase of OMGPop for $183 million, and subsequent write- down • Traditional enterprise companies – Oracle, Salesforce, Intuit - buying their way into social marketing / advertising companies
  16. 16. MASiV 2013: The M&A Silicon Valley Gathering Thoughts on What’s Going On Around Us Looking Ahead to 2013 - Consumer • Google will continue to be the most important player in the M&A landscape. • Expect to see a lot of companies testing the market who are unable to raise funding • Expect more activity in mobile advertising • An acquisition that should happen: EBay or Amazon buys Fab, OneKingsLane, or similar • An acquisition (or investment) that should happen: Microsoft should acquire Dropbox
  17. 17. MASiV 2013: The M&A Silicon Valley Gathering Thank You

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