1. Cisco Systems, Inc.
29th March 2015
Nada Aderrab
Tamerlan Aliev
Rauf Gulamaliyev
Ka Yun Kei
Martin Levesques
Xuejiao Lin
Renxuan Long
Group 3
2. 1. Fortrust Global Advisory
2. Industry Landscape
3. Cisco Present and Future
4. Corporate Strategy and M&A
5. Targets
6. Valuation
Outline
2Aderrab, Aliev, Gulamaliyev, Kei, Levesques, Lin, Long
Group 3
3. Sell-side advice
2015
£93M
US Technology M&A Deals (2014)
Rank Adviser Deals
1 Fortrust Global 25
2 Goldman Sachs 22
3 Credit Suisse 18
4 AGC Partners 17
5 Houlihan Lokey 15
6 Evercore Partners Inc 13
6= William Blair & Company 13
8 Deutsche Bank AG 12
9 JP Morgan 9
10 Bank of America Merill Lynch 9
Selected technology transactions advised in the last 12 months
Number 1 in US technology M&A Emphasis on selling to strategic buyers
Purchasers of Businesses Sold Highlights
A leader in the technology landscape
of deals with European
buyers
72%
of deals with US buyers
of deals in US
virtualization and
cloud
65%
23%
Buy-side advice
2014
£766M
80%
20%
Trade buyers Private equity
Buy-side advice
2014
£2,543M
Sell-side advice
2014
£1,286M
Buy-side advice
2014
£2,080M
Buy-side advice
2015
£1,600M
1. Fortrust Global Advisory
Leaders in technology M&A
3Aderrab, Aliev, Gulamaliyev, Kei, Levesques, Lin, Long
Group 3
4. Internet of Things
Cloud Computing
Software-Defined
Applications
Infrastructure
Mobile Enterprise Solutions
Cloud
Storage
Network
Security
2015:
$75bn
Expected
Cloud Market
Growth
2017:
$250bn
Market Trend – Going Forward
Current Data Networking Equipment Industry
Revenue Breakdown
2. Technology industry landscape
Transitioning to cloud computing and the internet of things
Switching
37%
Routing
20%
Wireless
LAN
14%
IP Telephony
9%
Data Center
18%
Application
Delivery
2%
Sources: Bloomberg
4Aderrab, Aliev, Gulamaliyev, Kei, Levesques, Lin, Long
Group 3
6. Successful acquisitions in the past – What’s next?
4. Corporate strategy and M&A
Cisco - Building on success
Mobility
Security
Collaboration
Datacenter
&
Virtualization
6Aderrab, Aliev, Gulamaliyev, Kei, Levesques, Lin, Long
Group 3
7. Buy
Acquire
companies with
innovative
technologies
Partner
Partner with
companies to jointly
develop and resell
innovative products
Build
Internally
develop
innovative
solutions
Three Approaches to strive innovation
Technological complexity and rapid changes
within markets make it difficult for Cisco to
develop all resources and capabilities
internally
Acquisition of target companies will fil in the
technological gap and broaden the range
of products and services that Cisco delivers
to customers in target markets
Potential targets
Nutanix
•Virtualization, US, Private
•Synergic effects: : strengthening market in
virtualization, diversifying products and
reducing market risk
Simplivity
•Virtualization, US, Private
•Synergic effects: strengthening market in
virtualization, diversifying products and
reducing market risk
Scale Computing
•Virtualization, , UK, Private
•Synergic effects: : strengthening market in
virtualization, diversifying products and
reducing market risk
Informatica
•Cloud, US, Public
•Synergic effects: strengthening market cloud
services, diversifying products and reducing
market risk
Nexum
•IT Security, US, Private
•Synergic effects: Reducing IT security risk
4. Corporate strategy and M&A
Cisco – Adapting to Industry Trends
7Aderrab, Aliev, Gulamaliyev, Kei, Levesques, Lin, Long
Group 3
8. Sohaib
Abbasi
Chairman/
president/
CEO
Michael J
Berry
Exec
VP/CFO
Margaret A
Breya
Exec VP/
Chief
marketing
Officer
Management team
Ownership structure
Public company
Ameriprise Fin Group 8.66%
Blackrock 7.50%
Vanguard Group 6.11%
Scopia Capital Management
5.90%
Business overview
- Provider of data integration
software and services.
- Allows clients to access, integrate,
and trust all their information
assets
- Market Cap: USD 4,810m
Product offering
Infrastructure software categories:
- Data Integration, cloud
computing, complex event
processing, data quality, B2B data
exchange, Identity resolution,
cloud MDM
($M) 2011 2012 2013 2014
Revenue 783.8 811.6 948.2 1048
Growth
(%)
- 4% 17% 11%
EBITDA 198.2 176.8 183.9 207.7
Margin 25.3% 21.8% 19.4% 19.8%
Net
profit
14.9 11.58 9.1 10.9
Financial highlights
- NTT DATA & Informatica
Collaborate on Delivering
Information Federation
Infrastructure for the Japanese
Market
- Highest score for current offering
and strategy in evaluation of its
agile data integration platform (Q1
2015 Report)
- Rated on 18 March, 2015 highest
in Master Data Management use-
case category
Recent news
5. Target opportunities
Building-up industry leadership
Sources: Bloomberg, Informatica annual report (2014)
8Aderrab, Aliev, Gulamaliyev, Kei, Levesques, Lin, Long
Group 3
9. Dheeraj
Pandey
CEO
Duston
Williams
CFO
Sunil Potti Sr. VP, Eng &
PM
Management team
Ownership structure
Private Equity backed:
Morgan Stanley
Expansion Capital,
Riverwood Capital, SAP
Ventures
Business overview
- Established in 2009
- IT infrastructure solution provider
- Enterprise virtualization and
storage
- 850+ employees
- 55 countries covered
- 43 patents filed
Product offering
- Enterprise storage
- Data protection
- Infrastructure resilience
- Management & analytics
- Security
Financial highlights
Recent news
- March 30th 2015: “Nutanix Goes
Beyond Hardware To Fast Track
Fitness First To The Cloud”
- March 17th 2015: “Nutanix
Launches Flagship Hyper-
Converged Certification Program”
- March 5th 2015: “Yahoo Japan
Corporation Improves Security
and Enhances Performance with
Nutanix”
- March 5th 2015: “St. Luke’s
Healthcare System Chooses
Nutanix and Citrix for Virtual
Desktop Expansion and
Acquisition Integration”
- Nutanix raised USD$140m
Series E funding to date at over
USD$2bn valuation, funding
totalled to USD$312m
5. Target opportunities
Building-up industry leadership
Sources: Mergermarket, Nutanix website
9Aderrab, Aliev, Gulamaliyev, Kei, Levesques, Lin, Long
Group 3
10. Doron
Kempel
CEO
Mitch Breen Sr. VP Global
Sales
Karen
Baker
VP Finance &
Operations
Management team
Ownership structure
Private Equity backed
DFJ Growth, KPCB
Growth, Kleiner Perkins
Caufield & Byers,
Waypoint Capital,
Business overview
- Founded in 2009
- 400+ employees
- Record growth, +270%y/y
- Leader in hyperconverged
infrastructure for the software-
defined data center
Product offering
- OmniCube Hyperconverged
Infrastructure
- OmniStack Integrated Solution
Key product features:
- Data Virtualization Platform
- Global Unified Management
- VM-Centricity
- Native Data Protection
Financial highlights
Recent news
- March 23rd 2015: “SimpliVity
Awarded 5-Star Rating in CRN’s
2015 Partner Program Guide for
Third Consecutive Year”
- Jan. 27th 2015: “SimpliVity Wins
Cloud Tech Trailblazer Award”
- Jan. 13th 2015: “SimpliVity
Experiences Record Growth in
2014; Solidifies Leadership
Position within Hyperconverged
Infrastructure Market”
- SimpliVity raised USD$175m at
USD$1bn plus in Series D
funding round, venture funding
totalled in USD$276m
5. Target opportunities
Building-up industry leadership
Sources: Mergermarket, Simplivity website
10Aderrab, Aliev, Gulamaliyev, Kei, Levesques, Lin, Long
Group 3
11. Jeff Ready CEO
Thomas
Harvey
CFO
Clint McVey COO
Management team
Ownership structure
Private Equity backed
Benchmark Capital,
Heron Capital Venture
Fund, Northgate Capital,
Scale Venture Partners
Business overview
- Hyperconverged infrastructure
vendor
- Provides HC3 ScaleService
technical support services and
virtual machine security solutions
- Clients include small to medium-
sized organisations
Product offering
“Scale Computing integrates
storage, servers, and virtualization
software into an all-in-one appliance
based system that is scalable, self-
healing and as easy to manage as a
single server”
Financial highlights
Recent news
- Scale Computing Selected to
Present at The Montgomery
Summit
- Scale Computing’s HC4000
Named Product of the Year in
Storage Systems: Disk and Hybrid
Systems Category by Storage
Magazine/SearchStorage.com
- 2014 SVC Awards – Virtualization
Company of the Year
- Midmarket CIO Forum Best
Midmarket Strategy
- Raised USD$ 12m in Series D
Round, funding totalled to
USD$43m
5. Target opportunities
Building-up industry leadership
Sources: Mergermarket, Scale Computing website
11Aderrab, Aliev, Gulamaliyev, Kei, Levesques, Lin, Long
Group 3
12. David Lesser President
J.D. Butt VP Solutions
Brian
Haboush
VP Sales &
Marketing
Mike Scher VP & General
Counsel
Management team
Ownership structure
Private held by:
David Lessor 100%
Business overview
Product offering
- Cybersecurity
- Networking solutions
Financial highlights
Recent news
- Oct. 17th 2014: “Nexum, Inc.
Named to CRN Fast Growth 150
List”
- Estimated 2014 revenue of USD
83m, expected to surpass USD
100m this year
- Had its best year of EBITDA in
2014 with only “modest” increase
in revenue
- Cited lack of qualified engineering
talent and staff turnover as the
main reasons behind revenue
slowdown
- Cyber-security and networking
service provider
- Clients include small to medium-
sized organisations and US
federal institutions
- Nexum plans to raise capital in
2015 via ESOP potentially selling
up to 49%, says president
5. Target opportunities
Building-up industry leadership
Sources: Mergermarket, Nexus website
12Aderrab, Aliev, Gulamaliyev, Kei, Levesques, Lin, Long
Group 3
13. CA Inc 14.3 12.9 4.2 35.5%
Checkpoint
Software Tech
15.1 11.5 1.6 54.3%
Citrix Systems 10.1 9.6 3.3 20.1%
Red Hat Inc. 14 12.9 2 18.2%
SolarWinds
Inc.
3.9 3.6 0.5 32.4%
Symantec
Corporation
15.9 14.3 6.5 26.5%
Trend Micro 4.7 3.6 1 35.8%
Vmware inc. 35 29.5 6.7 22.7% 12.06x
9.92x
6.42x
14.29x
23.33x
10.19x
12.69x
8.07x
0x 5x 10x 15x 20x 25xSource: Bloomberg
EV/EBITDA multiple
Company
Name
Market cap
($B)
EV
($B) Sales ($B)
EBITDA
margin
InfrastructureSoftware
Median EV/EBITDA 11.1x
Average EV/EBITDA 12.1x
4.41x
3.47x
2.18x
6.9x
6.43x
2.89x
7.07x
3.06x
0x 2x 4x 6x 8x
EV/Sales multiple
Median EV/Sales 3.9x
Average EV/Sales 4.9x
6. Valuation
Market Comparables
13Aderrab, Aliev, Gulamaliyev, Kei, Levesques, Lin, Long
Group 3
14. Closing date Target Description Bidder EV ($B)
09/07/2014 Tail-f Systems AB Solutions for virtualised networks Cisco 103
10/12/2013 Insieme Networks, Inc. Development of software-defined networking systems Cisco 536
07/10/2013 Sourcefire, Inc. Cybersecurity solutions Cisco 1474
30/07/2013
Composite Software,
Inc. Data visualisation solutions Cisco 103
25/02/2013
Cognitive Security
s.r.o. Network security solutions Cisco 12
20/12/2012 Meraki, Inc. Cloud networking Cisco 756
10/03/2015
Blue Coat Systems,
Inc. Security solutions Bain Capital LLC 1591
26/02/2015 Accela, Inc. Cloud-based technologies Equity Ltd 93
05/02/2015 Porticor Ltd. Cloud solutions Intuit Inc. 6
04/02/2015 F-Secure Corporation Personal Cloud
Synchronoss
Technology 39
EV/Sales multiple EV/EBITDA multiple
Exit Multiple – Average North America/Europe (adjusted) 3.2x 20.9x
Sample size 176 90
Exit Multiple – Median North America 2.7x 17.3x
Sample size 99 46
Methodology – Data obtained from Mergermarket
Summary of recent transactions in the computer software industry across North America and Europe over the last 12 months
Exit Multiple - Average (adjusted); based on removing the top and bottom 2.5% of the original data results.
1 month before closing 1 day before closing 1 day after closing 1 month after closing
Average premium 32.3% 28.3% 3.4% 4.3%
Sample size 58 56 47 32
6. Valuation
Transaction Multiples
14Aderrab, Aliev, Gulamaliyev, Kei, Levesques, Lin, Long
Group 3
15. Disclaimer
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discussion purposes only. Finalized terms and conditions are subject to further
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expressed are our present opinions only and are subject to change without further
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Opinions expressed herein are current opinions only as of the date indicated. Any
historical price(s) or value(s) are also only as of the date indicated. We are under no
obligation to update opinions or other information.
For information specific to your organization please contact us at 800.240.1436 or
visit our website www.fortrustglobal.com.
15Aderrab, Aliev, Gulamaliyev, Kei, Levesques, Lin, Long
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