Hampleton’s Information Management Report covers a buoyant period of M&A activity from January 2012 through June 2014. We’ve portioned the last 2 and a half years period into five “half-year” periods to provide the most insightful commentary on valuations, trends and transactions in this segment. With a 2.5x EV/S median and an EV/EBITDA median of 13.8x, research in our Information Management report is a must-read for up-to-date info on M&A activity in this segment. This report feature top acquirers such as Lexmark, Salesforce and IBM and details on prolific buyers within our sub-sectors as well as: Trends and analysis of in deal activity Geographical split of sector transactions globally Valuations medians Metrics by sub-sector Discussion of transaction implications Top 10 sector buyers

1. Information Management Report
September 2014
17 Woodstock Street, London, W1C 2AJ, UK
Suite 200, 1 Sutter St, San Francisco, CA 94104, US
M&A Overview September 2014
Information Management

2. Information Management Report
September 2014
1 |
Hampleton’s Information Management report covers the two and a half year period between January 2012 and June 2014. All totals and median values refer to the entire period unless otherwise stated. Median multiples plotted in the graphs are for the 30 month period prior to and including the half year.
The M&A market in Information Management reached decade-high levels of activity in 1H 2014. Deal volume in the sector increased by 16% on 2H 2013, and 33% year on 1H 2013. Total transaction count was 122, the highest for any half-year period this decade.
Despite this record volume of deals, the trailing thirty-month revenue multiple declined to 2.5x. The median EBITDA multiple over the same period was a healthy 13.5x.
Several notable transactions took place in 1H 2014. In February, IBM acquired Cloudant for $150 million, the equivalent of 21.4x its revenue. Cloudant provides an open source, non-relational database-as-a-service for mobile and web apps. The revenue multiple that IBM paid was the highest for an Information Management target since 2010, back when Microsoft acquired Yammer for 60x revenue. As a result of the acquisition, Cloudant’s software now runs on IBM’s SoftLayer Cloud Platform, which will upgrade its ability to handle traffic spikes.
Also in February, Oracle announced its purchase of BlueKai, a cloud-based database designed for marketing campaigns. Oracle paid $420 million, which was the largest disclosed transaction for 1H 2014 and is equivalent to 6.5x BlueKai’s revenue. BlueKai now forms a core component of the Oracle Data Cloud, a subscription-based data-as-a-service platform aimed at businesses. Like many information management transactions, the BlueKai acquisition overlaps with other sectors, such as Digital Marketing and Internet Commerce.
$1.8 B
Total transaction value in 1H 2014
2.5x
Median EV/S ratio
13.5x
Median EV/EBITDA ratio
4.1x
4.0x
4.0x
3.5x
2.5x
-7.0x
-5.0x
-3.0x
-1.0x
1.0x
3.0x
5.0x
1H 2012
2H 2012
1H 2013
2H 2013
1H 2014
0
20
40
60
80
100
120
140
160
Total Transaction Count
Trailing 30 Month Median EV/SRatio

3. Information Management Report
September 2014
2 |
23% of targets were located in Europe. The large majority of targets, 71%, were located in North America, while 6% were located in the rest of the world. 55% of acquirers of European Targets were also located in Europe, with 42% in North America and 3% in the rest of the world.
Several noteworthy deals were announced or completed in Europe in 1H 2014. In June 2014, Lexmark announced its acquisition of ReadSoft, a Swedish provider of data management and accounts payable automation SaaS, for $244 million, equivalent to 2x revenue and 35x EBITDA. Lexmark has spent over $900 million on 14 software acquisitions in the last four years.
Capita, a UK-based outsourcing provider, acquired AMT-SYBEX, an Irish provider of information management software for the water, energy, transport and utilities industry, for $137 million in April 2014. Capita intends to expand the market for AMT- SYBEX’s software into new verticals, including finance.
Big data analytics is becoming a requirement across a diverse range of business sectors, creating an increasing demand for information management and analysis tools with vertical- specific capabilities. Large companies like IBM, Oracle, Lexmark and Acxiom have taken notice of this demand, and are using acquisitions to compile suites of cutting-edge information management products.
These conditions are driving unprecedented levels of activity within the sector, as large providers aim to consolidate the market for information management services. We expect volumes to hold steady or increase across the sector in the near future, as large companies continue to seek proven data- analysis solutions that they can quickly bring to a wider market.
55%
42%
3%
Europe
North America
ROW
122
Total transaction volume in 1H 2014
2.0x
Revenue multiple that Lexmark agreed to pay for Readsoft in 1H 2014
33%
Year-on-year increase in transaction volume.
Target Headquarters
Headquarters of Acquirers Purchasing European Targets
23%
71%
6%
Europe
North America
ROW

4. Information Management Report
September 2014
3 |
46% of targets were classified as Internet and Information Services, 30% as Social Media & Collaboration, and 24% and Media, Entertainment and Retail.
Content Management: Web Content Management, Document Management, Data Integration, Syndication, Records.
Collaboration and Information Retrieval: Social Software, Web Conferencing, Team Collaboration, Categorisation, Search.
Data Centre and Management: Facilities Management, Building Management Systems, Archiving.
Total deal volume in Content Management increased 11% in 1H 2014 on 2H 2013. Transaction values in the space are stable; median disclosed transaction values in each half year since 1H 2013 were between $24 million and $25 million.
The median trailing thirty month revenue multiple was 2.0x, a 43% year on year increase from 1H 2013, while the trailing thirty month median EBITDA multiple was 8.5x for the second consecutive half year.
In May 2014, Acxiom acquired LiveRamp, which integrates customer data from disparate systems into a single interface, for $310 million, or 12.4x revenue. Acxiom sees the acquisition as a way to build a bridge between its offline customer database and the world of online information management.
In April 2014, EnerNOC, a US-based provider of software for measuring energy demand and managing emissions, paid $9.5 million for EnTech USB, a UK-based provider of energy invoicing and emissions management software. EnerNOC’s international revenues grew by 116% last year as a result of entering the Australian market, and hopes that this acquisition will provide similar growth in Europe as they build a global customer base.
1.9x
1.7x
1.4x
2.0x
2.0x
-7.0x
-5.0x
-3.0x
-1.0x
1.0x
3.0x
1H 2012
2H 2012
1H 2013
2H 2013
1H2014
0
10
20
30
40
50
60
70
80
90
100
Transaction Count
Trailing 30 Month Median EV/S Ratio
Content Management
2.0x
Median EV/S ratio
8.5x
Median EV/EBITDA ratio
Sub-sector Overview
55%
36%
9%
Content Management
Collaboration and Information
Data Centres and Management

5. Information Management Report
September 2014
4 |
The volume of the M&A market for Collaboration and Information Retrieval grew for the second consecutive half-year in 1H 2014. The total number of transactions increased by 24% on 2H 2013, and 96% year-on-year from 1H 2013. The total number of transactions climbed to 51, the greatest amount of deal activity for any half-year in the previous decade. Trailing thirty-month revenue multiples declined to 3.0x. There was insufficient EBITDA data for the thirty month period to determine a meaningful metric.
In May 2014, AccessData Group, an e-discovery firm with a focus on incident response, sold its litigation support services division to Omnivere, an e-discovery and compliance software provider, for $19 million.
In May 2014, Ilionx, a Dutch IT solutions firm, purchased Evoxe for an undisclosed amount. Evoxe provides both cloud-based and on-site multiscreen newsrooms and media asset management solutions.
In January 2014, Qualcomm bought Kooaba, a Swiss developer of image recognition and retrieval software, for an undisclosed amount. Qualcomm will integrate Kooaba’s technology and staff into Vuforia, its existing image recognition platform for mobile apps.
1H 2014 saw 12 data centre transactions, the highest half-year transaction count in the past decade for this subsector, while the trailing 30 month median revenue multiple remained stable at 4.3x. The median transaction value was $34 million. No EBITDA data was available for targets in this space.
In June 2014, Trimble Navigation, a leading provider of positioning technology, acquired MAYBIM, which offers virtual information modelling software for technology-heavy buildings such as data centres. The acquisition will scale up TRIMBLE’s offering of products for construction management, project management and facility operation.
In April 2014, Aceco T.I., a Brazilian data centre design firm owned by KKR, purchased Quark, a Spanish data centre construction and engineering firm, for an undisclosed amount. Acquiring a Spanish firm was an ideal way for Aceco, who already conduct 30% of their business in Spanish-speaking Latin American countries, to expand into Europe.
4.7x
4.1x
4.3x
4.5x
4.3x
-26.0x
-21.0x
-16.0x
-11.0x
-6.0x
-1.0x
4.0x
1H2012
2H2012
1H2013
2H2013
1H2014
0
2
4
6
8
10
12
14
Total Transaction Count
Trailing 30 Month Median EV/S Ratio
Collaboration and Information Retrieval
3.0x Median EV/S ratio
Data Centres and Management
96% Increase in deal volume on 1H 2013
4.3x Median EV/S ratio
$34 M Median transaction value in 1H 2014
4.7x
4.3x
4.7x
4.0x
3.0x
-7.0x
-5.0x
-3.0x
-1.0x
1.0x
3.0x
5.0x
7.0x
0
10
20
30
40
50
60
70
80
Total Transaction Count
Trailing 30 Month Median EV/S Ratio

6. Information Management Report
September 2014
5 |
Since January 2013, there have been eight acquisitions of image recognition software providers, including the previously mentioned acquisition of Kooba by Qualcomm. Image recognition software allows developers to identify specific individuals and objects in large collections of digital images.
This software has a prominent place in the future of information retrieval, allowing businesses to search their databases for non-text information such as signatures, brand images, or technical drawings. This technology will improve information management and document management functionality, making it easier and faster to identify and extract key information from large databases.
Image recognition capability has applications across a broad range of industries, from e-Discovery and litigation support to digital marketing and social media analytics. Several big names in the tech world have acquired image recognition software companies since January 2013, including Yahoo!, Pintrest and Meltwater. In the near future, we anticipate image-recognition software will be a standard part of any larger software company’s information management offering. Demand for this new and complex technology will fuel M&A in the space, as larger companies seek proven solutions for managing image-based data that can be quickly taken to a wider market.
Image Recognition Software Acquisitions Since January 2013 Date Acquirer Target Target Summary Price
03/24/2014
Nuance Communications
Neurostar Solutions
Medical image sharing SaaS
Not Disclosed
02/04/2014
Slyce
York University computer vision technology
Image capture & aggregation
Not Disclosed
01/10/2014
Qualcomm
Kooaba
Mobile image recognition software
Not Disclosed
01/06/2014
Pinterest
VisualGraph
Image recognition software provider
Not Disclosed
12/04/2013
Slyce
Hovr.it
Product image recognition software
Not Disclosed
10/23/2013
Yahoo!
LookFlow
Image recognition software provider
Not Disclosed
08/23/2013
Yahoo!
IQ Engines
Mobile & Web image recognition software
Not Disclosed
03/26/2013
Meltwater Group
OCULUSai
Image recognition software provider
$2 million
Spotlight on Image Recognition Software

7. Information Management Report
September 2014
6 |
Lexmark was the top acquirer in this space with seven transactions since January 2012. Acquirer Acquisitions Amount
Readsoft: Document management software
PACSGEAR: Medical imaging management software.
Saperion: ECM & BPM software & SaaS
*3 most recent of 7 transactions since 1H 2012.
+$595 million
Droptalk: Communication and collaboration application.
Hackpad: Document sharing SaaS.
Readmill: Multip-platform eBook reader
*3 most recent of 6 transactions since 1H 2012.
Undisclosed
Cloudant: Non-relational database SaaS.
Deeja Image Systems: Multi-format document viewing.
Star Analytics: Data integration software.
*3 most recent of 8 transactions since 1H 2012.
+$150 million
Cloudconnect: Database integration SaaS.
EntropySoft: Data integration SaaS and services.
Bluetail: Data mining software provider
*3 most recent of 6 transactions since 1H 2012.
+$51 million
Lookflow: Image recognition software provider.
IQ Engines: Image recognition software.
RockMelt: Social mobile and web browser.
*3 most recent of 6 transactions since 1H 2012.
+1.1 billion
LiveLOOK: CRM co-browsing and live chat application.
BlueKai: Advertising data management.
Compendium: Content marketing SaaS vendor.
*3 most recent of 4 transactions since 1H 2012.
+435 million
TigerLogic: MDMS relational database.
Sirius Software: Data management software.
OpenTech Systems: Data migration software.
*3 most recent of 4 transactions since 1H 2012.
+37 million
Gnip: Twitter data analytics SaaS.
Mesagraph: Social media analytics SaaS.
SecondSync: Social media analytics SaaS.
*3 most recent of 4 transactions since 1H 2012.
+141 million
Assemblage: Video conferencing and file sharing SaaS.
Kibits: Cloud-based team collaboration.
Composite Software: Data integration software and services.
*3 transactions since 1H 2012.
+180 million
Sportstream: Sports media monitoring SaaS.
Acrylic Software: Newsreader application employees.
Face.com: Facial recognition software
*3 transactions since 1H 2012.
Undisclosed

8. Information Management Report
September 2014
7 |
Hampleton provides independent M&A and corporate finance advice to owners of Internet, IT Services and Software companies. Our research reports aim to provide our clients with current analysis of the transactions, trends and valuations within our focus areas.
Data Source: We have based our findings on data provided by industry recognised sources. Data and information for this publication was collated from the 451 Research database (www.451research.com), a division of The 451 Group. For more information on this or anything else related to our research, please email the address provided below.
Disclaimer: This publication contains general information only and Hampleton Ltd, is not, by means of this publication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. Hampleton Ltd shall not be responsible for any loss whatsoever sustained by any person who relies on this publication.
©2014. For more information please contact Hampleton Ltd.
London San Francisco
4th Floor Suite 200
17 Woodstock Street 1 Sutter St
W1C 2AJ San Francisco, CA 94104
United Kingdom United States
Email: jo.goodson@hampletonpartners.com