NOAH Advisors - NOAH13 London


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Internet M&A Update - Presentation by Marco Rodzynek, Founder & CEO of NOAH Advisors at the NOAH 2013 Conference in London, Old Billingsgate on the 14th of November 2013.

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NOAH Advisors - NOAH13 London

  1. 1. Worth Mentioning NOAH Conference 2013, London
  2. 2. NOAH Advisors - Europe’s Leading Internet Corporate Finance Boutique Unique Industry Know-How  100% focused on Internet companies,   covering over 25 sub-verticals in this highly complex industry - 20+ years active coverage of leading European Internet companies and investors Deep understanding of industry dynamics and thinking of industry leaders Ability to add value beyond banking advice - Facilitates overall process and minimizes management distraction Unmatched Network and Relationships  NOAH Advisors is globally very well  connected and has direct access to virtually all key players in the industry - Knowledge of and strong relationships with potential buyers’ key decision makers - Coverage of over 200companies and 4,000 individuals - Proactively finds and unlocks attractive investment opportunities for leading investors (e.g. Bigpoint) Annual NOAH Conference Selected Completed NOAH Transactions  The NOAH team has 25+ years of media   investment banking experience - Routine execution of M&A and financing transactions with sizes of several billion euros The team has been working together closely for 9 years (including 6 years at Lehman Brothers) 8 successfully completed NOAH Advisors transactions underline successful transfer of competencies to the Internet sector Full Commitment - We Are Entrepreneurs!  The NOAH team are entrepreneurs and   focused on growing the business and establishing a reputation for excellence Full commitment to deliver top quality results in short time frames Highly success-based compensation structures align interests of clients and NOAH Advisors, and demonstrate conviction to deliver top results Growth equity investment from for a 30% stake alongside Softonic’s Founders and Angel Investors valuing Softonic at Eur 275m Exclusive Financial Advisor to Softonic and its shareholders 150 million growth equity investment from for a 50% stake alongside Fotolia’sFounders and Additional $150 million senior debt financing Total $300 million investment Financial Advisor to Fotolia and its Shareholders November 2011 April 2012 Sale of a 100%-stake in Sale of a majority stake in to to Quants Financial Services AG Financial Advisor to Toprural and its Shareholders Exclusive Financial Advisor to grupfoni and its Shareholders July 2011 April 2011 Sale of a majority stake in have acquired a majority stake in to for $350m from Exclusive Advisor to Summit Partners and TA Associates Advisor to EnGrande The NOAH Advisors Core Team Marco Rodzynek Jan Brandes Managing Director and Founder Director April 2011 Sale of a majority stake in to Contact Details May 2012 February 2013 Core Investment Banking Competence Contact Details 2 December 2009 Partial sale of to Valuing Softonic at €175m Advisor to Yatego Advisor to Softonic
  3. 3. Europe Matters! A significant number of companies are valued at over €200 million Note: Selected examples. 3
  4. 4. European Internet Pioneers & Global Leaders Some business models were invented or most successfully executed in Europe Company Segment Company Segment  Innovative payment platform  Remote access  Largest pure-play fashion Retailer  Open-source database  Enterprise software  FX  Social networking for people you don’t know  Vertical ad network (soccer)  Betting  VoIP  Free to play online gaming  Legal music service  Toolbars  Global hotel comparison leader  Freemium anti-virus  Private sales  Payment instalments  Personal loans 4
  5. 5. What is On Our Minds A lot to remember Exit Markets  US strategic buyers not active yet compared to 1999/2000 Valuations  US is trading at a premium to Europe, both from  Pre IPO mega rounds are continue to happen • a valuation perspective, and  IPOs are back: twitter, wix, criteo • what metrics a company must have reached in order to IPO or get sold at an attractive valuation  Emerging markets gaining of importance  Israel had great exits (Google/Waze, WIX IPO,  E-Commerce still the highest valued sector Marin Software IPO, etc.) PE 2013 39x vs.27xfor the entire global public Internet peer group  US VCs are discovering European companies, e.g. Union Square invests into Hailo and Motain  Sales growth is key valuation driver, followed by margin, market position and ability of the management team to tell a story  Quality and large assets always trade  EBITDA losses are not an issue for IPOs  Must have or scarcity value drives deal anymore likelihood and valuation 5
  6. 6. High Profile Venture Backed Companies European VC is waking up or rather has been awakened by many US investors Company Last Round Raised Jul-13 Selected Investors Company Last Round Raised $400m Sep-07 $117m Mar-11 $218m May-11 $114m June-11 $188m Feb-12 ~$100m Dec-11 $166m Feb-09 $65m Feb-12 $145m Jan-12 $63m Mar-13 $130m Apr-12 $62m Jun-13 $130m Mar-11 $59m Jul-07 $130m Feb-12 $58m Apr-12 $129m Jun-09 $53m Note: CrunchBase, NOAH Advisors. 6 Selected Investors
  7. 7. Making Money Without Money European Internet Companies of Size with Having Raised VC Money Company Country of Origin Company Note: CrunchBase, NOAH Advisors. 7 Country of Origin
  8. 8. Valuation Drivers in the Context of a Company’s Development Stage: How NOAH sees the World Management Technology Users / KPIs Revenues EBITDA Market Leadership Increasing valuations – However Multiples Get More Reasonable (in Theory) Decreasing Execution Risk and Benefit of the Doubt (Less to Hope for) (GROWTH * MARGIN) Predictability = Valuation Multiple 8
  9. 9. Current Valuation Levels: Internet Sector Breakdown Significant valuation increase in current year EBITDA and PE multiples vs. 2012 EV/EBITDA (x) 35.2 2012 29.3 2013 24.5 22.1 15.0 14.7 Classifieds E-Commerce (Property/ Cars) Classifieds (Property / Cars) E-Commerce Travel Travel 22.1 20.3 17.8 16.8 16.2 13.5 13.3 12.4 11.3 9.0 Content Online Intermediation Classifieds providers & Large Caps &Comparison (Jobs) Communities Content providers & Communities Online Large Caps Intermediation & Comparison Classifieds (Jobs) 9.5 11.5 8.1 Online Marketing Online Marketing 16.6 7.4 Portals/ Diversified Portals / Diversified 11.0 7.2 Online E-Commerce Gambling Infrastructure Online Gambling E-Commerce Infrastructure 6.8 Online Gaming Online Gaming P/E (x) 44.1 38.7 35.7 28.6 32.4 31.0 33.2 2012 35.1 29.3 26.7 25.4 2013 25.1 22.9 29.4 16.7 Travel Travel 27.5 24.4 22.5 17.7 16.6 E-Commerce Intermediation Classifieds Online E-Commerce Online Large Classifieds Content Portals/ &Comparison (Property/ Marketing Infrastructure Caps (Jobs) Providers and Diversified Cars) Communities E-Commerce Intermediation & Comparison Classifieds (Property / Cars) Online Marketing E-Commerce Infrastructure Online Large Caps Source: FactSet, UBS, NOAH Advisors. 9 Classifieds (Jobs) Content Providers and Communities Portals / Diversified 17.4 17.8 Online Gambling Online Gambling 14.3 18.1 Online Gaming Online Gaming
  10. 10. Current Valuation Levels: Regional Difference EV/EBITDA (x) 2012 P/E (x) 2013 2012 2013 21.9 29.0 28.8 28.7 20.1 25.7 18.3 20.8 19.4 12.5 12.3 12.7 19.0 17.6 10.6 6.7 Europe US Japan APAC Europe Source: FactSet, UBS, NOAH Advisors. 10 US Japan APAC
  11. 11. Lets be wrong. The nicest we could find! Weekly Usage of Key International Social Networking Media Sites 2008 Source: Universe Sizes versus total 16-54 population. 11
  12. 12. NOAH 2014 Sneak Preview  Date: 11 – 14th of November 2014  Location: Old Billingsgate, London  More focus on:  Internet investment and M&A market place  Customer acquisition for our attendees 12