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Tech M&A Monthly: Forecast 2018 Pt. II - Private Equity Roundtable

Bruce Milne, CEO of Corum Group Ltd., welcomed attendees to a private equity roundtable discussion. The agenda included presentations on growth and exit strategies from Marc O'Brien of Corum, and a research report from Elon Gasper, Becky Hill, and Amber Stoner of Corum Research. The research report analyzed valuation multiples and M&A activity in the public and private technology markets in January 2018. Several mega-deals and other deals in software sectors such as internet, infrastructure, and horizontal applications were highlighted.

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1 Forecast 2018: Part 2 Private Equity Roundtable February 8, 2018
2 A leader in the software industry, Bruce has founded or owned four software companies, including the largest vertical market software company, AMI, an Inc. 500 firm rated by IDC as the fastest growing computer-related company in the world. He has served on advisory boards for Microsoft, IBM, DEC, Comdex and Apple, and as board member/founding investor in some of the most innovative firms in their field, including Blue Coat, Bright Star and Sabaki. Past advisor to two governors and a senator, a board member of the Washington Technology Center, and founder of the WTIA, the nation’s most active regional technology trade association. He worked with the Canadian government to found SoftWorld, and he was recently chosen as one of the 200 most influential individuals in the IT community in Europe. He was also the only American juror for the recent Tornado 100 Awards given to Europe’s top technology firms A graduate with Distinction from Harvard Business School, Bruce has written three books on business models for success, including Power Planning. He is a frequent lecturer and author. Welcome Bruce Milne CEO Corum Group Ltd.
3 Agenda Welcome WFS - “Growth & Exit Strategies” San Francisco, February 22 February 2018 Research Report Special Report: Private Equity and Tech Private Equity Roundtable Q&A
4 Marc O’Brien Vice President Corum Group Ltd. WFS – “Growth & Exit Strategies” San Francisco, February 22 Marc has over 30 years of experience with both large and startup software companies focusing on SaaS, enterprise and digital markets, including as the founder and CEO of two firms that he led to successful acquisitions. He has been an executive managing companies in North America, Europe and Asia Pacific. Marc was the founder/CEO of WebProject, the first team collaboration internet company with the backing of Cisco and Sun Microsystems. He then led the successful sale of the company to Novient Inc. He subsequently was the founder/CEO of Projity, the leading SaaS project management solution. Marc led the successful acquisition of the company to Serena Software. Marc joined content management powerhouse Acquia as Vice President and General Manager, helping lead Acquia to tremendous growth and raising over $194 million in venture funding with positioning for a future IPO. He is also Chairman of the Board of ProjectLibre Inc, an open source alternative to Microsoft Project with over three million downloads in over 200 countries. He graduated from Clarkson University with a B.S. in Engineering & Management.
5 WFS – “Growth & Exit Strategies” San Francisco, February 22 Growth & Exit Strategies San Francisco February 22, 2018 https://www.wfs.com/SF-2018
6 Corum Research Report Elon Gasper EVP, Research Becky Hill Analyst Amber Stoner Director of Research
7 Public Markets Jan Mar May Jul Sep Nov Jan 53% 29% 35% 0% 10% 20% 30% 40% 50% 60% Weekly Percentage Change S&P TECH Dow Jones NASDAQ USA Jan 2018 S&P Tech 8% NASDAQ 5% Dow Jones 3% Asia Jan 2018 HANG SENG 9% SSE Composite 5% Nikkei 2% Europe Jan 2018 CAC 40 1% DAX -1% FTSE 100 -3% 2017 2018
8 0% 100% 200% 300% 400% 500% 600% Daily Percentage Change NASDAQ S&P TECH Dow Jones The Bull Market, 2009-Present 2018 2009 2011 2013 2015 20172009 2011 2013 2015 2017
9 Corum Index Market Transactions Jan. 2018Jan. 2017 335 275 Mega Deals 5 6 Largest Deal $3.7B $17B Pipeline Private Equity Deals 33 35 VC Backed Exits 4953 Attributes 33% Cross Border Transactions 35% Start-Up Acquisitions 9%9% 17 yrs16 yrs Average Life of Target Jan. 2017 Jan. 2018 Jan. 2017 Jan. 2018 0% 18% 6% 8% 359% 20%
10 2018 Mega Deals – YTD IT SERVICES $5.1B INFRASTRUCTURE $7.2B HORIZONTAL $5.9B $3.5B $17B INTERNET $20B $6.2B$5.1B $2.4B Financial Markets Business $1.0B $3.4B
11 2018 Mega Deals – YTD IT SERVICES $5.1B INFRASTRUCTURE $7.2B HORIZONTAL $5.9B $3.5B $17B INTERNET $20B $6.2B$5.1B $2.4B Financial Markets Business $1.0B $3.4B Sold to Target: Blackhawk Network Holdings [USA] Acquirer: Silver Lake Partners / P2 Capital Partners [USA] Transaction Value: $3.5B - Physical and digital gift card and prepaid payments network
12 Horizontal Application Software Market 4.6x 20.8x Public Valuation Multiples EV Sales Since Q4 Corum Analysis EV EBITDA Breaks out of eight month range to record highs... Jan. 2018 …while EBITDA metrics reach their ninth month of stability
13 2018 Mega Deals – YTD IT SERVICES $5.1B INFRASTRUCTURE $7.2B HORIZONTAL $5.9B $3.5B $17B INTERNET $20B $6.2B$5.1B $2.4B Financial Markets Business $1.0B $3.4B Sold to Target: Callidus Software Inc. [dba CallidusCloud] [USA] Acquirer: AP SE [Germany] Transaction Value: $2.4B (9.6x EV/Sales) - Cloud-based Lead to Money (Quote-to-Cash) solutions
14 Horizontal Application Software Market 4.6x 20.8x Deal Spotlights: Customer Analytics EV Sales Since Q4 Corum Analysis EV EBITDA Breaks out of eight month range to record highs... …while EBITDA metrics reach their ninth month of stability Jan. 2018 Target: Talkwalker [Luxembourg] Acquirer: Marlin Equity Partners [USA] - Cloud-based social media listening platform Target: TheySay Limited [United Kingdom] Acquirer: Aptean [Vista Equity Partners] [USA] - Text analytics platform, computational linguistics and deep learning Sold to Sold to
15 Horizontal Application Software Market 4.6x 20.8x Deal Spotlights: HR EV Sales Since Q4 Corum Analysis EV EBITDA Breaks out of eight month range to record highs... …while EBITDA metrics reach their ninth month of stability Jan. 2018 Targets: Motus [USA]; Runzheimer [USA] Acquirer: Thoma Bravo [USA] - Motus is a vehicle management and reimbursement platform - Runzheimer is a business vehicle and relocation information services Target: SkipFlag [USA] Acquirer: Workday [USA] - Machine intelligence-based software to discover and organize workplace information Sold to Sold to
16 Horizontal Application Software Market 4.6x 20.8x Deal Spotlight: Conversational AI EV Sales Since Q4 Corum Analysis EV EBITDA Breaks out of eight month range to record highs... …while EBITDA metrics reach their ninth month of stability Jan. 2018 Target: Converse.AI [USA] Acquirer: Smartsheet [USA] - Сhat flow NLP-driven SaaS for business automation Sold to Target: Intelligens.ai [Chile] Acquirer: Conversica [USA] - Automated customer support SaaS Sold to
17 Internet Market Public Valuation Multiples 4.8x 28.8x EV Sales Corum Analysis EV EBITDA Volatility continues as Internet hopes spring eternal… …while the value of actual profitable business models soars to 2015 levels Jan. 2018Since Q4
18 2018 Mega Deals – YTD IT SERVICES $5.1B INFRASTRUCTURE $7.2B HORIZONTAL $5.9B $3.5B $17B INTERNET $20B $6.2B$5.1B $2.4B Financial Markets Business $1.0B $3.4B Sold to Target: Thomson Reuters (financial markets business) [USA] Acquirer: Blackstone Group LP [USA] Transaction Value: $17B (3.3x EV/Sales) - Foreign exchange and treasury trading platforms Financial Markets Business
19 Internet Software Market Deal Spotlights: Reference Content 4.8x 28.8x EV Sales Corum Analysis EV EBITDA Volatility continues as Internet hopes spring eternal… …while the value of actual profitable business models soar to 2015 levels Jan. 2018Since Q4 Target: Docu Group Deutsche Holding [Germany] Acquirer: Infopro Digital [France] - Information solutions for construction projects, building products etc. Target: Infobase Holdings [VSS] [USA] Acquirer: Centre Lane Partners [USA] - Cloud-based educational and vocational information services Sold to Sold to Sold to Target: Shungham Information [Belgium] Acquirer: FiscalNote [USA] - Reports on regulatory information on EU issues provided through an online platform
20 Internet Software Market Deal Spotlight: Online Marketplace 4.8x 28.8x EV Sales Corum Analysis EV EBITDA Volatility continues as Internet hopes spring eternal… …while the value of actual profitable business models soar to 2015 levels Jan. 2018Since Q4 Target: Avvo [USA] Acquirer: Internet Brands [KKR] [USA] - Online legal services marketplace, offering lawyer referrals - Complements Internet Brands’ Legal Marketing Network Sold to
21 Internet Software Market Deal Spotlights: Social Networks 4.8x 28.8x EV Sales Corum Analysis EV EBITDA Volatility continues as Internet hopes spring eternal… …while the value of actual profitable business models soar to 2015 levels Jan. 2018Since Q4 Target: HubPages [USA] Acquirer: TheMaven Network [USA] Transaction Value: $15M - Free web-content hosting platform that allows members to write articles - Allows HubPages to get stock in a publicly traded company Target: MovieLaLa [USA] Acquirer: GfyCat [USA] - Social network for movie fans - Strengthens Gfycat’s movie marketing capabilities allowing to work directly with studios Sold to Sold to
22 Internet Software Market Deal Spotlights: Food Delivery 4.8x 28.8x EV Sales Corum Analysis EV EBITDA Volatility continues as Internet hopes spring eternal… …while the value of actual profitable business models soar to 2015 levels Jan. 2018Since Q4 Sold to Target: Ando [USA] Acquirer: Uber Eats [USA] - Online food delivery service Sold to Target: Entrees On-Trays [USA] Acquirer: Square [USA] - Restaurant delivery service - Adds to Square’s food-ordering platform, Caviar Sold to Target: FoodCheri [France] Acquirer: Sodexo [France] - Mobile application for ordering meals
23 2018 Mega Deals – YTD IT SERVICES $5.1B INFRASTRUCTURE $7.2B HORIZONTAL $5.9B $3.5B $17B INTERNET $20B $6.2B$5.1B $2.4B Financial Markets Business $1.0B $3.4B Sold to Target: YOOX Net-a-Porter Group [Italy] Acquirer: Richemont [Switzerland] Transaction Value: $3.4B - Online editorial content and luxury e-commerce platform
24 Infrastructure Software Market 4.8x 18.2x Public Valuation Multiples EV Sales Corum Analysis EV EBITDA Broad and steady rise of over 37% during the last six months… …with value of profits pausing at a record high Since Q4 Jan. 2018
25 2018 Mega Deals – YTD IT SERVICES $5.1B INFRASTRUCTURE $7.2B HORIZONTAL $5.9B $3.5B $17B INTERNET $20B $6.2B$5.1B $2.4B Financial Markets Business $1.0B $3.4B Sold to Target: Xerox Corporation [USA] Acquirer: Fujifilm Holdings [Japan] Transaction Value: $6.2B - Printing technologies and document management solutions - Pioneering PARC R&D subsidiary large contributor to Ethernet, GUI, OOP, VLSI tech
26 Infrastructure Software Market 4.8x 18.2x Deal Spotlights: Security EV Sales Corum Analysis EV EBITDA Broad and steady rise of over 37% during the last six months… …with value of profits pausing at a record high Since Q4 Jan. 2018 Sold to Target: Percipient Networks [Allied Minds] [USA] Acquirer: WatchGuard Technologies [Francisco Partners] [USA] - Cloud-based intelligent malware solution Sold to Target: Niddel Corp. [USA] Acquirer: Verizon Communications [USA] - Machine-learning-based automated threat hunting Sold to Target: ThreatMetrix [USA] Acquirer: RELX Group [United Kingdom] Transaction Value: $819M - Context-based business security and fraud prevention solutions
27 Infrastructure Software Market 4.8x 18.2x EV Sales Corum Analysis EV EBITDA Broad and steady rise of over 37% during the last six months… …with value of profits pausing at a record high Since Q4 Jan. 2018 Deal Spotlights: Identity and Access Management Sold to Sold to Target: Confirm.io [USA] Acquirer: Facebook [USA] - Mobile ID authentication software checks on any government issued IDs Target: Cyberinc [Aurionpro Solutions] [USA] Acquirer: KPMG [USA] Transaction Value: $34,3M - IDM solutions and security products that protect organizations from cyber-attacks
28 4.8x 18.2x EV Sales Corum Analysis EV EBITDA Broad and steady rise of over 37% during the last six months… …with value of profits pausing at a record high Since Q4 Jan. 2018 Infrastructure Software Market Deal Spotlight: Cloud Management / Migration Sold to Target: ATADATA [USA] Acquirer: Deloitte Consulting [USA] - Solutions for the discovery, cloning, and synchronization of data workloads - Follows a trail of Deloitte’s cloud investments, including a buy of Day1 Solutions’ analytics and cognitive cloud assets
29 Infrastructure Software Market 4.8x 18.2x EV Sales Corum Analysis EV EBITDA Broad and steady rise of over 37% during the last six months… …with value of profits pausing at a record high Since Q4 Jan. 2018 Deal Spotlight: Disaster Recovery Target: N2W Software [USA] Acquirer: Veeam Software [Switzerland] Transaction Value: $42.5M - Disaster recovery solutions for data in the public cloud - Improves Veeam’s penetration into the enterprise Sold to
30 Infrastructure Software Market 4.8x 18.2x EV Sales Corum Analysis EV EBITDA Broad and steady rise of over 37% during the last six months… …with value of profits pausing at a record high Since Q4 Jan. 2018 Deal Spotlights: Network Performance Management Sold to Sold to Target: AppNeta [USA] Acquirer: Rubicon Technology Partners [USA] - SaaS application performance management solutions Target: Avere Systems [USA] Acquirer: Microsoft Corporation [USA] - Computer data storage and data management infrastructure
31 Infrastructure Software Market 4.8x 18.2x EV Sales Corum Analysis EV EBITDA Broad and steady rise of over 37% during the last six months… …with value of profits pausing at a record high Since Q4 Jan. 2018 Deal Spotlight: Mobile Network and IoT Security Target: Argyle Data [USA] Acquirer: Mavenir Systems [Siris Capital] [Canada] - Machine learning-powered anomaly detection platform for mobile services and IoT - Complements Mavenir’s cloud-native Security Suite Sold to
32 Corum Research Report Elon Gasper EVP, Research Becky Hill Analyst Amber Stoner Director of Research
33 Corum Annual Research Report Part II: Private Equity
34 Corum Annual Research Report Part II: Private Equity Amanda joined Corum in 2012 as a marketing assistant and transferred to the research department in 2016 after serving 2 years as the senior marketing coordinator. As Senior Analyst, she helps to develop exit strategies and identify potential acquirers for Corum’s clients. Prior to joining Corum, Amanda served as an intern at Calypso Medical Technologies (later acquired by Varian Medical Systems) in Seattle. Amanda graduated Cum Laude from Gonzaga University with degrees in marketing and finance. Amanda Tallman Senior Analyst Corum Group Ltd.
35 Private Equity Deal Volume 2017 vs. 2016 All Tech Deals Tech Megadeals 20172016
36 Top Private Equity Acquirers – 2017
37 Top Private Equity Acquirers – 2017
38 Top Private Equity Acquirers – 2017
39 Platform vs. Bolt-On Acquisitions
40 Platform vs. Bolt-On Acquisitions Sold to Sold to Target: Xactly Corporation [USA] Acquirer: Vista Equity Partners [USA] Transaction value: $564M - Sales performance, analytics and planning SaaS Target: AlignStar [USA] Acquirer: Xactly Corporation [Vista Equity Partners] [USA] - Territory resource management software
41 2017 Mega Deals $62B$2B $1.0B $18B IT SERVICES HR BPO assets Healthcare business $1.3B $2.6B $2.0B $1.6B $2.0B $1.0B $2.8B $4.3B HORIZONTAL $21B $1.4B $1.1B $1.1B $15B INTERNET $1.9B $3.4B $2.4B $1.6B $1.6B $2.5B $1.3B INFRASTRUCTURE $27B $6.0B $3.7B $1.2B $1.1B $1.3B $1.8B $1.1B $1.6B $1.6B $1.6B $5.7B$5.3B $10.4B $1.7B VERTICAL $15.3B $2.0B $3.6B $2.3B $3.9B $1.2B $1.4B $1.3B $1.0B $1.1B $1.1B $1.2B $1.0B $23B $2.8B $1.0B CONSUMER $1.9B $2.4B $1.6B $1.6B $3.4B
42 2017 Mega Deals - PE Buyers $62B$2B $18B IT SERVICES HR BPO assets $2.0B $1.6B $4.3B HORIZONTAL $21B $1.4B $1.1B $15B INTERNET $1.9B $1.6B INFRASTRUCTURE $27B $1.2B $1.3B $1.1B $1.6B $1.6B $5.3B VERTICAL $2.0B $2.3B $3.9B $1.4B CONSUMER $3.4B $2.8B
43 2017 Mega Deals - PE Buyers $62B$2B $18B IT SERVICES HR BPO assets $2.0B $1.6B $4.3B HORIZONTAL $21B $1.4B $1.1B $15B INTERNET $1.9B $1.6B INFRASTRUCTURE $27B $1.2B $1.3B $1.1B $1.6B $1.6B $5.3B VERTICAL $2.0B $2.3B $3.9B $1.4B CONSUMER $3.4B $2.8B Target: Lexmark (Enterprise Software Business) [USA] Acquirer: Thoma Bravo [USA] Transaction Value: $1.4B - Spinout consisted of Kofax, ReadSoft and Perceptive Software Sold to
44 2017 Mega Deals - PE Buyers $62B$2B $18B IT SERVICES HR BPO assets $2.0B $1.6B $4.3B HORIZONTAL $21B $1.4B $1.1B $15B INTERNET $1.9B $1.6B INFRASTRUCTURE $27B $1.2B $1.3B $1.1B $1.6B $1.6B $5.3B VERTICAL $2.0B $2.3B $3.9B $1.4B CONSUMER $3.4B $2.8B Sold to Target: IDERA [USA] Acquirer: HGGC [USA] Transaction Value: $1.1B - SQL Server administration, backup and recover, compliance
45 36% 27% 16% 12% 7% 1% Horizontal Infrastructure IT Services Internet Consumer Top Private Equity Acquirers – 2017 Deals by Sector Vertical
46 36% 27% 16% 12% 7% 1% Horizontal Infrastructure IT Services Internet Consumer Deals by Sector Vertical Top Private Equity Acquirers – 2017 Sold to Target: Propertybase [USA] Acquirer: Boston Logic Technology Partners [USA] - Salesforce automation and marketing automation SaaS for real estate
47 36% 27% 16% 12% 7% 1% Horizontal Infrastructure IT Services Internet Consumer Deals by Sector Vertical Top Private Equity Acquirers – 2017 Vertical Target: Abila [USA] Acquirer: Community Brands [USA] - Accounting and fundraising software and SaaS Sold to
48 Corum Annual Research Report Part II: Private Equity Amanda joined Corum in 2012 as a marketing assistant and transferred to the research department in 2016 after serving 2 years as the senior marketing coordinator. As Senior Analyst, she helps to develop exit strategies and identify potential acquirers for Corum’s clients. Prior to joining Corum, Amanda served as an intern at Calypso Medical Technologies (later acquired by Varian Medical Systems) in Seattle. Amanda graduated Cum Laude from Gonzaga University with degrees in marketing and finance. Amanda Tallman Senior Analyst Corum Group Ltd.
49 Timothy joined Corum in 2011, and oversees the company’s marketing efforts globally from the headquarters near Seattle. Chief among these is Corum's extensive conference schedule, “Selling Up, Selling Out,” the Merge Briefing, the Tech M&A Monthly webcast and Corum's platinum sponsorship of the World Financial Symposiums' live events and Market Spotlight series. Through these events, Corum Group serves as the world’s leading educator in technology mergers and acquisitions. Prior to joining Corum, Timothy served as marketing and product manager for GIS software startup Depiction, Inc., and previously worked in marketing for VizX Labs, a pioneering SaaS startup delivering DNA analysis tools. In addition to marketing for software startups, Tim has worked for a US Senate campaign and taught science in Rio de Janeiro. Timothy graduated Magna Cum Laude from Bethel University in St. Paul, Minnesota, with degrees in History and Biology. Panel Moderator Timothy Goddard EVP, Marketing Corum Group Ltd.
50 Private Equity Roundtable Michael Libert TA Associates Vice President Sabrina Chiasson Battery Ventures Vice President
51 Special Guest Michael joined TA Associates in 2011 and operates from the firm’s Boston office where he leads investment opportunities around the world. He is an active investor in Nintex, Prometheus Group (acquired by Francisco Partners), Bomgar (acquired by Thoma Bravo), Answers (acquired by Apax Partners), and PDI. Michael has executed eight platform and add-on technology acquisitions. Prior to TA Associates, Michael worked at Bain & Company where he focused on Private Equity and Technology clients. Michael graduated Cum Laude from Harvard University in 2009 and obtained a MBA from Stanford in 2016. Michael Libert TA Associates Vice President
52 Special Guest Sabrina joined Battery in 2015. She focuses on later-stage software investments, including growth equity, buyouts, rollups, carve-outs and take-privates. Sabrina is currently involved with Battery’s investments in Alogent, Clubessential, Concurrent Real-Time and Enviance. Before coming to Battery, Sabrina was an associate at H.I.G. Growth Partners, a private equity firm focused on recapitalizations of lower-middle market, growth oriented businesses. There, she sourced, evaluated and executed investments in the consumer, healthcare and technology sectors. She also previously spent time at Westwind Investors, a private investment firm focused on growth-equity investments and buyouts. Sabrina received a B.A. in biology and economics from Dartmouth College. While at Dartmouth, Sabrina was captain of the varsity Alpine ski team. Sabrina Chiasson Battery Ventures Vice President
53 Private Equity Roundtable Michael Libert TA Associates Vice President Sabrina Chiasson Battery Ventures Vice President
54 Q&A  We welcome your questions!  Use Q&A chat box to the right of the screen  Submit to queue at any time
55 Upcoming Conference Schedule Selling Up Selling Out (SUSO) - Ready to go to market? During this half-day workshop, learn to prepare, position, research, value, negotiate, and execute due diligence for maximum price and structure. This is the most attended Tech M&A event ever – participants have done over $1 trillion in transaction value. Merge Briefing (MB) - The Merge Briefing is a 90-minute executive briefing providing a current M&A market update (trends, valuations, etc.), as well as a brief overview of the Tech M&A process: “8 Steps To An Optimal Outcome.” www.CorumGroup.com/Events Feb. 13: Paris – MB Feb. 14: Amsterdam – MB Feb. 15: Seattle – MB Feb. 15: Barcelona – MB Feb. 22: San Francisco – Growth & Exit Strategies Feb. 27: Brussels – MB Feb. 27: Hartford – MB Feb. 28: Victoria – MB Feb. 28: Providence – MB Feb. 28: Los Angeles – SUSO Mar. 1: Boston – SUSO Mar. 1: Los Angeles – MB Mar. 1: Atlanta – MB Mar. 6: Boise – SUSO Mar. 6: Chicago – MB
56 After the Deal – Celebration
57 www.corumgroup.com

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Tech M&A Monthly: Forecast 2018 Pt. II - Private Equity Roundtable

  • 1.
    1 Forecast 2018: Part2 Private Equity Roundtable February 8, 2018
  • 2.
    2 A leader inthe software industry, Bruce has founded or owned four software companies, including the largest vertical market software company, AMI, an Inc. 500 firm rated by IDC as the fastest growing computer-related company in the world. He has served on advisory boards for Microsoft, IBM, DEC, Comdex and Apple, and as board member/founding investor in some of the most innovative firms in their field, including Blue Coat, Bright Star and Sabaki. Past advisor to two governors and a senator, a board member of the Washington Technology Center, and founder of the WTIA, the nation’s most active regional technology trade association. He worked with the Canadian government to found SoftWorld, and he was recently chosen as one of the 200 most influential individuals in the IT community in Europe. He was also the only American juror for the recent Tornado 100 Awards given to Europe’s top technology firms A graduate with Distinction from Harvard Business School, Bruce has written three books on business models for success, including Power Planning. He is a frequent lecturer and author. Welcome Bruce Milne CEO Corum Group Ltd.
  • 3.
    3 Agenda Welcome WFS - “Growth& Exit Strategies” San Francisco, February 22 February 2018 Research Report Special Report: Private Equity and Tech Private Equity Roundtable Q&A
  • 4.
    4 Marc O’Brien Vice President CorumGroup Ltd. WFS – “Growth & Exit Strategies” San Francisco, February 22 Marc has over 30 years of experience with both large and startup software companies focusing on SaaS, enterprise and digital markets, including as the founder and CEO of two firms that he led to successful acquisitions. He has been an executive managing companies in North America, Europe and Asia Pacific. Marc was the founder/CEO of WebProject, the first team collaboration internet company with the backing of Cisco and Sun Microsystems. He then led the successful sale of the company to Novient Inc. He subsequently was the founder/CEO of Projity, the leading SaaS project management solution. Marc led the successful acquisition of the company to Serena Software. Marc joined content management powerhouse Acquia as Vice President and General Manager, helping lead Acquia to tremendous growth and raising over $194 million in venture funding with positioning for a future IPO. He is also Chairman of the Board of ProjectLibre Inc, an open source alternative to Microsoft Project with over three million downloads in over 200 countries. He graduated from Clarkson University with a B.S. in Engineering & Management.
  • 5.
    5 WFS – “Growth& Exit Strategies” San Francisco, February 22 Growth & Exit Strategies San Francisco February 22, 2018 https://www.wfs.com/SF-2018
  • 6.
    6 Corum Research Report ElonGasper EVP, Research Becky Hill Analyst Amber Stoner Director of Research
  • 7.
    7 Public Markets Jan MarMay Jul Sep Nov Jan 53% 29% 35% 0% 10% 20% 30% 40% 50% 60% Weekly Percentage Change S&P TECH Dow Jones NASDAQ USA Jan 2018 S&P Tech 8% NASDAQ 5% Dow Jones 3% Asia Jan 2018 HANG SENG 9% SSE Composite 5% Nikkei 2% Europe Jan 2018 CAC 40 1% DAX -1% FTSE 100 -3% 2017 2018
  • 8.
    8 0% 100% 200% 300% 400% 500% 600% Daily PercentageChange NASDAQ S&P TECH Dow Jones The Bull Market, 2009-Present 2018 2009 2011 2013 2015 20172009 2011 2013 2015 2017
  • 9.
    9 Corum Index Market Transactions Jan. 2018Jan.2017 335 275 Mega Deals 5 6 Largest Deal $3.7B $17B Pipeline Private Equity Deals 33 35 VC Backed Exits 4953 Attributes 33% Cross Border Transactions 35% Start-Up Acquisitions 9%9% 17 yrs16 yrs Average Life of Target Jan. 2017 Jan. 2018 Jan. 2017 Jan. 2018 0% 18% 6% 8% 359% 20%
  • 10.
    10 2018 Mega Deals– YTD IT SERVICES $5.1B INFRASTRUCTURE $7.2B HORIZONTAL $5.9B $3.5B $17B INTERNET $20B $6.2B$5.1B $2.4B Financial Markets Business $1.0B $3.4B
  • 11.
    11 2018 Mega Deals– YTD IT SERVICES $5.1B INFRASTRUCTURE $7.2B HORIZONTAL $5.9B $3.5B $17B INTERNET $20B $6.2B$5.1B $2.4B Financial Markets Business $1.0B $3.4B Sold to Target: Blackhawk Network Holdings [USA] Acquirer: Silver Lake Partners / P2 Capital Partners [USA] Transaction Value: $3.5B - Physical and digital gift card and prepaid payments network
  • 12.
    12 Horizontal Application SoftwareMarket 4.6x 20.8x Public Valuation Multiples EV Sales Since Q4 Corum Analysis EV EBITDA Breaks out of eight month range to record highs... Jan. 2018 …while EBITDA metrics reach their ninth month of stability
  • 13.
    13 2018 Mega Deals– YTD IT SERVICES $5.1B INFRASTRUCTURE $7.2B HORIZONTAL $5.9B $3.5B $17B INTERNET $20B $6.2B$5.1B $2.4B Financial Markets Business $1.0B $3.4B Sold to Target: Callidus Software Inc. [dba CallidusCloud] [USA] Acquirer: AP SE [Germany] Transaction Value: $2.4B (9.6x EV/Sales) - Cloud-based Lead to Money (Quote-to-Cash) solutions
  • 14.
    14 Horizontal Application SoftwareMarket 4.6x 20.8x Deal Spotlights: Customer Analytics EV Sales Since Q4 Corum Analysis EV EBITDA Breaks out of eight month range to record highs... …while EBITDA metrics reach their ninth month of stability Jan. 2018 Target: Talkwalker [Luxembourg] Acquirer: Marlin Equity Partners [USA] - Cloud-based social media listening platform Target: TheySay Limited [United Kingdom] Acquirer: Aptean [Vista Equity Partners] [USA] - Text analytics platform, computational linguistics and deep learning Sold to Sold to
  • 15.
    15 Horizontal Application SoftwareMarket 4.6x 20.8x Deal Spotlights: HR EV Sales Since Q4 Corum Analysis EV EBITDA Breaks out of eight month range to record highs... …while EBITDA metrics reach their ninth month of stability Jan. 2018 Targets: Motus [USA]; Runzheimer [USA] Acquirer: Thoma Bravo [USA] - Motus is a vehicle management and reimbursement platform - Runzheimer is a business vehicle and relocation information services Target: SkipFlag [USA] Acquirer: Workday [USA] - Machine intelligence-based software to discover and organize workplace information Sold to Sold to
  • 16.
    16 Horizontal Application SoftwareMarket 4.6x 20.8x Deal Spotlight: Conversational AI EV Sales Since Q4 Corum Analysis EV EBITDA Breaks out of eight month range to record highs... …while EBITDA metrics reach their ninth month of stability Jan. 2018 Target: Converse.AI [USA] Acquirer: Smartsheet [USA] - Сhat flow NLP-driven SaaS for business automation Sold to Target: Intelligens.ai [Chile] Acquirer: Conversica [USA] - Automated customer support SaaS Sold to
  • 17.
    17 Internet Market Public ValuationMultiples 4.8x 28.8x EV Sales Corum Analysis EV EBITDA Volatility continues as Internet hopes spring eternal… …while the value of actual profitable business models soars to 2015 levels Jan. 2018Since Q4
  • 18.
    18 2018 Mega Deals– YTD IT SERVICES $5.1B INFRASTRUCTURE $7.2B HORIZONTAL $5.9B $3.5B $17B INTERNET $20B $6.2B$5.1B $2.4B Financial Markets Business $1.0B $3.4B Sold to Target: Thomson Reuters (financial markets business) [USA] Acquirer: Blackstone Group LP [USA] Transaction Value: $17B (3.3x EV/Sales) - Foreign exchange and treasury trading platforms Financial Markets Business
  • 19.
    19 Internet Software Market DealSpotlights: Reference Content 4.8x 28.8x EV Sales Corum Analysis EV EBITDA Volatility continues as Internet hopes spring eternal… …while the value of actual profitable business models soar to 2015 levels Jan. 2018Since Q4 Target: Docu Group Deutsche Holding [Germany] Acquirer: Infopro Digital [France] - Information solutions for construction projects, building products etc. Target: Infobase Holdings [VSS] [USA] Acquirer: Centre Lane Partners [USA] - Cloud-based educational and vocational information services Sold to Sold to Sold to Target: Shungham Information [Belgium] Acquirer: FiscalNote [USA] - Reports on regulatory information on EU issues provided through an online platform
  • 20.
    20 Internet Software Market DealSpotlight: Online Marketplace 4.8x 28.8x EV Sales Corum Analysis EV EBITDA Volatility continues as Internet hopes spring eternal… …while the value of actual profitable business models soar to 2015 levels Jan. 2018Since Q4 Target: Avvo [USA] Acquirer: Internet Brands [KKR] [USA] - Online legal services marketplace, offering lawyer referrals - Complements Internet Brands’ Legal Marketing Network Sold to
  • 21.
    21 Internet Software Market DealSpotlights: Social Networks 4.8x 28.8x EV Sales Corum Analysis EV EBITDA Volatility continues as Internet hopes spring eternal… …while the value of actual profitable business models soar to 2015 levels Jan. 2018Since Q4 Target: HubPages [USA] Acquirer: TheMaven Network [USA] Transaction Value: $15M - Free web-content hosting platform that allows members to write articles - Allows HubPages to get stock in a publicly traded company Target: MovieLaLa [USA] Acquirer: GfyCat [USA] - Social network for movie fans - Strengthens Gfycat’s movie marketing capabilities allowing to work directly with studios Sold to Sold to
  • 22.
    22 Internet Software Market DealSpotlights: Food Delivery 4.8x 28.8x EV Sales Corum Analysis EV EBITDA Volatility continues as Internet hopes spring eternal… …while the value of actual profitable business models soar to 2015 levels Jan. 2018Since Q4 Sold to Target: Ando [USA] Acquirer: Uber Eats [USA] - Online food delivery service Sold to Target: Entrees On-Trays [USA] Acquirer: Square [USA] - Restaurant delivery service - Adds to Square’s food-ordering platform, Caviar Sold to Target: FoodCheri [France] Acquirer: Sodexo [France] - Mobile application for ordering meals
  • 23.
    23 2018 Mega Deals– YTD IT SERVICES $5.1B INFRASTRUCTURE $7.2B HORIZONTAL $5.9B $3.5B $17B INTERNET $20B $6.2B$5.1B $2.4B Financial Markets Business $1.0B $3.4B Sold to Target: YOOX Net-a-Porter Group [Italy] Acquirer: Richemont [Switzerland] Transaction Value: $3.4B - Online editorial content and luxury e-commerce platform
  • 24.
    24 Infrastructure Software Market 4.8x 18.2x PublicValuation Multiples EV Sales Corum Analysis EV EBITDA Broad and steady rise of over 37% during the last six months… …with value of profits pausing at a record high Since Q4 Jan. 2018
  • 25.
    25 2018 Mega Deals– YTD IT SERVICES $5.1B INFRASTRUCTURE $7.2B HORIZONTAL $5.9B $3.5B $17B INTERNET $20B $6.2B$5.1B $2.4B Financial Markets Business $1.0B $3.4B Sold to Target: Xerox Corporation [USA] Acquirer: Fujifilm Holdings [Japan] Transaction Value: $6.2B - Printing technologies and document management solutions - Pioneering PARC R&D subsidiary large contributor to Ethernet, GUI, OOP, VLSI tech
  • 26.
    26 Infrastructure Software Market 4.8x 18.2x DealSpotlights: Security EV Sales Corum Analysis EV EBITDA Broad and steady rise of over 37% during the last six months… …with value of profits pausing at a record high Since Q4 Jan. 2018 Sold to Target: Percipient Networks [Allied Minds] [USA] Acquirer: WatchGuard Technologies [Francisco Partners] [USA] - Cloud-based intelligent malware solution Sold to Target: Niddel Corp. [USA] Acquirer: Verizon Communications [USA] - Machine-learning-based automated threat hunting Sold to Target: ThreatMetrix [USA] Acquirer: RELX Group [United Kingdom] Transaction Value: $819M - Context-based business security and fraud prevention solutions
  • 27.
    27 Infrastructure Software Market 4.8x 18.2x EV Sales CorumAnalysis EV EBITDA Broad and steady rise of over 37% during the last six months… …with value of profits pausing at a record high Since Q4 Jan. 2018 Deal Spotlights: Identity and Access Management Sold to Sold to Target: Confirm.io [USA] Acquirer: Facebook [USA] - Mobile ID authentication software checks on any government issued IDs Target: Cyberinc [Aurionpro Solutions] [USA] Acquirer: KPMG [USA] Transaction Value: $34,3M - IDM solutions and security products that protect organizations from cyber-attacks
  • 28.
    28 4.8x 18.2x EV Sales Corum Analysis EV EBITDA Broad andsteady rise of over 37% during the last six months… …with value of profits pausing at a record high Since Q4 Jan. 2018 Infrastructure Software Market Deal Spotlight: Cloud Management / Migration Sold to Target: ATADATA [USA] Acquirer: Deloitte Consulting [USA] - Solutions for the discovery, cloning, and synchronization of data workloads - Follows a trail of Deloitte’s cloud investments, including a buy of Day1 Solutions’ analytics and cognitive cloud assets
  • 29.
    29 Infrastructure Software Market 4.8x 18.2x EV Sales CorumAnalysis EV EBITDA Broad and steady rise of over 37% during the last six months… …with value of profits pausing at a record high Since Q4 Jan. 2018 Deal Spotlight: Disaster Recovery Target: N2W Software [USA] Acquirer: Veeam Software [Switzerland] Transaction Value: $42.5M - Disaster recovery solutions for data in the public cloud - Improves Veeam’s penetration into the enterprise Sold to
  • 30.
    30 Infrastructure Software Market 4.8x 18.2x EV Sales CorumAnalysis EV EBITDA Broad and steady rise of over 37% during the last six months… …with value of profits pausing at a record high Since Q4 Jan. 2018 Deal Spotlights: Network Performance Management Sold to Sold to Target: AppNeta [USA] Acquirer: Rubicon Technology Partners [USA] - SaaS application performance management solutions Target: Avere Systems [USA] Acquirer: Microsoft Corporation [USA] - Computer data storage and data management infrastructure
  • 31.
    31 Infrastructure Software Market 4.8x 18.2x EV Sales CorumAnalysis EV EBITDA Broad and steady rise of over 37% during the last six months… …with value of profits pausing at a record high Since Q4 Jan. 2018 Deal Spotlight: Mobile Network and IoT Security Target: Argyle Data [USA] Acquirer: Mavenir Systems [Siris Capital] [Canada] - Machine learning-powered anomaly detection platform for mobile services and IoT - Complements Mavenir’s cloud-native Security Suite Sold to
  • 32.
    32 Corum Research Report ElonGasper EVP, Research Becky Hill Analyst Amber Stoner Director of Research
  • 33.
    33 Corum Annual ResearchReport Part II: Private Equity
  • 34.
    34 Corum Annual ResearchReport Part II: Private Equity Amanda joined Corum in 2012 as a marketing assistant and transferred to the research department in 2016 after serving 2 years as the senior marketing coordinator. As Senior Analyst, she helps to develop exit strategies and identify potential acquirers for Corum’s clients. Prior to joining Corum, Amanda served as an intern at Calypso Medical Technologies (later acquired by Varian Medical Systems) in Seattle. Amanda graduated Cum Laude from Gonzaga University with degrees in marketing and finance. Amanda Tallman Senior Analyst Corum Group Ltd.
  • 35.
    35 Private Equity DealVolume 2017 vs. 2016 All Tech Deals Tech Megadeals 20172016
  • 36.
    36 Top Private EquityAcquirers – 2017
  • 37.
    37 Top Private EquityAcquirers – 2017
  • 38.
    38 Top Private EquityAcquirers – 2017
  • 39.
  • 40.
    40 Platform vs. Bolt-OnAcquisitions Sold to Sold to Target: Xactly Corporation [USA] Acquirer: Vista Equity Partners [USA] Transaction value: $564M - Sales performance, analytics and planning SaaS Target: AlignStar [USA] Acquirer: Xactly Corporation [Vista Equity Partners] [USA] - Territory resource management software
  • 41.
    41 2017 Mega Deals $62B$2B $1.0B $18B ITSERVICES HR BPO assets Healthcare business $1.3B $2.6B $2.0B $1.6B $2.0B $1.0B $2.8B $4.3B HORIZONTAL $21B $1.4B $1.1B $1.1B $15B INTERNET $1.9B $3.4B $2.4B $1.6B $1.6B $2.5B $1.3B INFRASTRUCTURE $27B $6.0B $3.7B $1.2B $1.1B $1.3B $1.8B $1.1B $1.6B $1.6B $1.6B $5.7B$5.3B $10.4B $1.7B VERTICAL $15.3B $2.0B $3.6B $2.3B $3.9B $1.2B $1.4B $1.3B $1.0B $1.1B $1.1B $1.2B $1.0B $23B $2.8B $1.0B CONSUMER $1.9B $2.4B $1.6B $1.6B $3.4B
  • 42.
    42 2017 Mega Deals- PE Buyers $62B$2B $18B IT SERVICES HR BPO assets $2.0B $1.6B $4.3B HORIZONTAL $21B $1.4B $1.1B $15B INTERNET $1.9B $1.6B INFRASTRUCTURE $27B $1.2B $1.3B $1.1B $1.6B $1.6B $5.3B VERTICAL $2.0B $2.3B $3.9B $1.4B CONSUMER $3.4B $2.8B
  • 43.
    43 2017 Mega Deals- PE Buyers $62B$2B $18B IT SERVICES HR BPO assets $2.0B $1.6B $4.3B HORIZONTAL $21B $1.4B $1.1B $15B INTERNET $1.9B $1.6B INFRASTRUCTURE $27B $1.2B $1.3B $1.1B $1.6B $1.6B $5.3B VERTICAL $2.0B $2.3B $3.9B $1.4B CONSUMER $3.4B $2.8B Target: Lexmark (Enterprise Software Business) [USA] Acquirer: Thoma Bravo [USA] Transaction Value: $1.4B - Spinout consisted of Kofax, ReadSoft and Perceptive Software Sold to
  • 44.
    44 2017 Mega Deals- PE Buyers $62B$2B $18B IT SERVICES HR BPO assets $2.0B $1.6B $4.3B HORIZONTAL $21B $1.4B $1.1B $15B INTERNET $1.9B $1.6B INFRASTRUCTURE $27B $1.2B $1.3B $1.1B $1.6B $1.6B $5.3B VERTICAL $2.0B $2.3B $3.9B $1.4B CONSUMER $3.4B $2.8B Sold to Target: IDERA [USA] Acquirer: HGGC [USA] Transaction Value: $1.1B - SQL Server administration, backup and recover, compliance
  • 45.
  • 46.
    46 36% 27% 16% 12% 7% 1% Horizontal Infrastructure IT Services Internet Consumer Deals by Sector Vertical TopPrivate Equity Acquirers – 2017 Sold to Target: Propertybase [USA] Acquirer: Boston Logic Technology Partners [USA] - Salesforce automation and marketing automation SaaS for real estate
  • 47.
    47 36% 27% 16% 12% 7% 1% Horizontal Infrastructure IT Services Internet Consumer Deals by Sector Vertical TopPrivate Equity Acquirers – 2017 Vertical Target: Abila [USA] Acquirer: Community Brands [USA] - Accounting and fundraising software and SaaS Sold to
  • 48.
    48 Corum Annual ResearchReport Part II: Private Equity Amanda joined Corum in 2012 as a marketing assistant and transferred to the research department in 2016 after serving 2 years as the senior marketing coordinator. As Senior Analyst, she helps to develop exit strategies and identify potential acquirers for Corum’s clients. Prior to joining Corum, Amanda served as an intern at Calypso Medical Technologies (later acquired by Varian Medical Systems) in Seattle. Amanda graduated Cum Laude from Gonzaga University with degrees in marketing and finance. Amanda Tallman Senior Analyst Corum Group Ltd.
  • 49.
    49 Timothy joined Corumin 2011, and oversees the company’s marketing efforts globally from the headquarters near Seattle. Chief among these is Corum's extensive conference schedule, “Selling Up, Selling Out,” the Merge Briefing, the Tech M&A Monthly webcast and Corum's platinum sponsorship of the World Financial Symposiums' live events and Market Spotlight series. Through these events, Corum Group serves as the world’s leading educator in technology mergers and acquisitions. Prior to joining Corum, Timothy served as marketing and product manager for GIS software startup Depiction, Inc., and previously worked in marketing for VizX Labs, a pioneering SaaS startup delivering DNA analysis tools. In addition to marketing for software startups, Tim has worked for a US Senate campaign and taught science in Rio de Janeiro. Timothy graduated Magna Cum Laude from Bethel University in St. Paul, Minnesota, with degrees in History and Biology. Panel Moderator Timothy Goddard EVP, Marketing Corum Group Ltd.
  • 50.
    50 Private Equity Roundtable MichaelLibert TA Associates Vice President Sabrina Chiasson Battery Ventures Vice President
  • 51.
    51 Special Guest Michael joinedTA Associates in 2011 and operates from the firm’s Boston office where he leads investment opportunities around the world. He is an active investor in Nintex, Prometheus Group (acquired by Francisco Partners), Bomgar (acquired by Thoma Bravo), Answers (acquired by Apax Partners), and PDI. Michael has executed eight platform and add-on technology acquisitions. Prior to TA Associates, Michael worked at Bain & Company where he focused on Private Equity and Technology clients. Michael graduated Cum Laude from Harvard University in 2009 and obtained a MBA from Stanford in 2016. Michael Libert TA Associates Vice President
  • 52.
    52 Special Guest Sabrina joinedBattery in 2015. She focuses on later-stage software investments, including growth equity, buyouts, rollups, carve-outs and take-privates. Sabrina is currently involved with Battery’s investments in Alogent, Clubessential, Concurrent Real-Time and Enviance. Before coming to Battery, Sabrina was an associate at H.I.G. Growth Partners, a private equity firm focused on recapitalizations of lower-middle market, growth oriented businesses. There, she sourced, evaluated and executed investments in the consumer, healthcare and technology sectors. She also previously spent time at Westwind Investors, a private investment firm focused on growth-equity investments and buyouts. Sabrina received a B.A. in biology and economics from Dartmouth College. While at Dartmouth, Sabrina was captain of the varsity Alpine ski team. Sabrina Chiasson Battery Ventures Vice President
  • 53.
    53 Private Equity Roundtable MichaelLibert TA Associates Vice President Sabrina Chiasson Battery Ventures Vice President
  • 54.
    54 Q&A  We welcomeyour questions!  Use Q&A chat box to the right of the screen  Submit to queue at any time
  • 55.
    55 Upcoming Conference Schedule SellingUp Selling Out (SUSO) - Ready to go to market? During this half-day workshop, learn to prepare, position, research, value, negotiate, and execute due diligence for maximum price and structure. This is the most attended Tech M&A event ever – participants have done over $1 trillion in transaction value. Merge Briefing (MB) - The Merge Briefing is a 90-minute executive briefing providing a current M&A market update (trends, valuations, etc.), as well as a brief overview of the Tech M&A process: “8 Steps To An Optimal Outcome.” www.CorumGroup.com/Events Feb. 13: Paris – MB Feb. 14: Amsterdam – MB Feb. 15: Seattle – MB Feb. 15: Barcelona – MB Feb. 22: San Francisco – Growth & Exit Strategies Feb. 27: Brussels – MB Feb. 27: Hartford – MB Feb. 28: Victoria – MB Feb. 28: Providence – MB Feb. 28: Los Angeles – SUSO Mar. 1: Boston – SUSO Mar. 1: Los Angeles – MB Mar. 1: Atlanta – MB Mar. 6: Boise – SUSO Mar. 6: Chicago – MB
  • 56.
    56 After the Deal– Celebration
  • 57.

Editor's Notes

  • #10 Key Message: Tech M&A for 2016 YTD remains strong, just like 2015, a very strong year We can see from the Corum Index how strong 2015 was for tech M&A. Here we see a snapshot the activity from Feb 2015 compared to the same for Feb 2016. In the broader market, the number of deals is down but only slightly for the month. This month to month fluctuation is normal while mega deals are up. The pipeline indices are down while financial buyers and investors catch their breath. Remember though the amount of dry powder (unspent cash) that remains to be invested. The Attributes remain steady, little notable change.
  • #18 While multiples in the Internet market experienced a slight dip since last month, activity in its pure play subsector remained steady and saw some interesting transaction sets in advertising and online recruitment space….
  • #20 While multiples in the Internet market experienced a slight dip since last month, activity in its pure play subsector remained steady and saw some interesting transaction sets in advertising and online recruitment space….
  • #21 While multiples in the Internet market experienced a slight dip since last month, activity in its pure play subsector remained steady and saw some interesting transaction sets in advertising and online recruitment space….
  • #22 While multiples in the Internet market experienced a slight dip since last month, activity in its pure play subsector remained steady and saw some interesting transaction sets in advertising and online recruitment space….
  • #23 While multiples in the Internet market experienced a slight dip since last month, activity in its pure play subsector remained steady and saw some interesting transaction sets in advertising and online recruitment space….