This document discusses trends in global and Asian technology M&A activity and provides advice for companies considering an acquisition or exit. It notes that global M&A reached record levels in 2014, with tech deals making up 35% of the total. Recent mega-deals are highlighted, with acquisitions valued between $2.5-19 billion. The document advises that while most deals are small, companies can still generate high returns, and the best returns typically come from companies that have raised $2-10 million. It also provides tips for companies to optimize their chances of a successful acquisition or exit.

1. Maximizing M&A Exit Value Globally
and Where Does Asia Compare
Jacob Mullins
CEO & Founder, Exitround

2. Global M&A is
on FIRE
2014
• 33% increase to $599Bn, ’13
• Most active start since 2011
• TMT M&A highest share of Global
M&A since 2006
• Technology, highest value on
opening qtr by 55% increase, ‘13
*Source: Mergermarket M&A Trend Report: Q1 2014 (link)

3. $2,500,000,000
• 13 years old / 1 year public
• $188M VC / $162M public
• $400M revenue 2013
• Thin profitability margin
• 6,000 customers, Fortune 500
—————————————
• Market leader
• Strategic asset for growth
• Customer base
• Revenue
• Horizontal platform expansion
Sources:
Bloomberg “ExactTarget Soars in Debut After Initial Public Offering” (link)
Crunchbase: ExactTarget (link
Inc. “Inside ExactTarget's Journey: From IPO to $2.5 Billion Acquisition” (link)
Acq 2013 by Salesforce

4. $3,200,000,000
• 3.75 years old
• 1.5 years product in market
• $80M VC raised
• $300M revenue (est.)*
• ~300 employees
——————————————
• Disruptive business
• Top hardware team
• Strong early traction in market
• Owned mindshare
Source: Business Insider “Nest, Google's New Thermostat Company, Is Generating A Stunning $300 Million In Annual Revenue”
Acq 2014 by Google

5. $19,000,000,000
• 5 years old
• $58M VC raised
• 450M MAU / 315M DAU
• 50B messages per day
• 50 employees
————————————
• Tremendous engagement
• Surpassing daily global SMS traffic
• Potential threat to tech majors
WhatsApp
Source: TechCrunch “Facebook Buying WhatsApp For $19B, Will Keep The Messaging Service Independent"
Acq 2014 by Facebook

6. Opportunity
10x Revenue
Huge Disruption
EngagementDominance
$42 per MAU
Insanely engaged
6.25x Revenue
Industry leader

7. Overall Tech
M&A
Landscape
• Mega-deals are < 1% by volume
< 1% deals 88% deals
*Source: Mergermarket M&A Trend Report: Q1 2014
**Source: Woodside Capital Partners “MASiV 2014: The M&A Silicon Valley Gathering Report”
• 88% of all deals are below $100M
Doesn’t mean you can’t make
money, in fact…

8. Exitround:
The Exit Curve
• More money does not equal higher exit
• Best return on capital: $2-3M & $5-10M raise
• Consumer ROI: 9.1x average | 4.8x median
• Enterprise ROI: 21.1x average | 7.5x median
• Significant increase in value after year four
*Source: Exitround “The Exit Curve: Exitround’s Report On Tech M&A” 2014; exitround.com/data
exitround.com/data

9. M&A Reaching
Stratospheric
Heights
• Coming out of global recession,
M&A augments diminished R&D
• Cash rich tech “major” acquirers
• Non-tech corporations realize
software is the future
• Ease of starting company
creates more point solution opps
• Increase in seed + angel funding

10. Global Tech M&A
2013
• Software is 35% of total M&A activity
• $188B Tech M&A, 65% up from ’12
• Internet, IT Services & Hardware are
on the upswing
————————————————
2014
• Tracking 41%+ higher YTD to ’13
• EY on 2014: “Tech M&A to be ‘strong’
at worst, ‘blockbuster’ at best”
*Source:
PricewaterhouseCoopers “US technology deal insights Analysis and trends in US technology M&A activity 2014”
MarketWatch “U.S. stock market is starting to ride a tech M&A wave”(link)
EY “Global technology M&A update, 2013 Year in Review”

11. Asia Tech M&A
2014
• Q1 M&A value $102B, 36%+ ’13
• TMT M&A up 53% from ’13
• Inbound M&A (from abroad) at
highest levels
• US Outbound M&A at highest
levels ever, $169B YTD
• Technology M&A 2x 2013 levels
*Source: Mergermarket M&A Trend Report: Q1 2014 (link)

12. Today’s M&A
Target
Buyer Incentives
• Put cash to use: $832B cash sitting w top
25-tech co’s
• Internet marketshare growth slowing,
grow top-line through horizontal exp
• Mobile, the new frontier
• The great Cloud migration
($59B ‘09 —> $149B ’14)
!
Characteristics of targets
• Disrupting status quo
• Market leading in mindshare
• Engaged users
• Quick growth rate, not necessarily largest
Source:
MarketWatch “U.S. stock market is starting to ride a tech M&A wave”(link)
Deloitte “Top 10 Issues for Technology M&A in 2014” (link)

13. Opportunity Engagement Dominance
Large opportunity in Asian markets to expand
• Market share
• Mobile users & engagement
• Shift to SaaS models in software
Take advantage

14. Actionable Insights
1. Traits of successful M&A
2. Tips for successful M&A
3. What to expect

15. Fundraise or M&A ?
Start early
• 2.75 years average time sellers
have known buyers
• After fourth year, significant
increase in M&A value
• Partners, competitors, other
(banker, Exitround)
Find your champion
• Identify internal business lead,
beyond corp-dev
• Get on “the list”
• Build trust over time
Traits of
successful M&A
Source: Exitround

16. Tips for
successful M&A
Prepare for speed
• Corp docs ready to share
• Employee IP
assignments &
contracts
• Financing docs
• Patents, IP
• Key customer contracts
• Up-to-date financials
Front load conversations
Time-box the opportunity

17. What to expect…
You…
Have a deck & story
Shield your team
Know your objectives from M&A
See a long term mutual vision
!
Them…
Poke around, to many
Term sheet, to few
Intense diligence
Integration

18. Optimize for
success
• M&A at all time highs
• Technology needs
increasing across industries
& geographies
• Be active, be prepared
• Solve a problem
• Opportunity
• Engagement
• Dominance

19. jacob@exitround.com
exitround.com/asia
@exitround
facebook.com/exitround