starting soon… · $7.8b $3.1 b $1.0b $6.8b $1.3b 7.0 $35b sold to seller: luxoft holding...
TRANSCRIPT
1
Starting soon…
Thoughts? Questions? Let us know!@CorumGroup
2
Tech M&A MonthlyStarts in 2 minutes
Thoughts? Questions? Let us know!@CorumGroup
3
www.corumgroup.com
4
PAST ATTENDEES INCLUDE
5
Private Equity Panel
Buyers Panel
Top Acquirer Profiles: Google, Constellation
Valuation Strategy
Planning for Post-Acquisition Success
Special Reports: SaaS, Mobile, Gaming, France, Canada, Payments, Agtech, Security
PAST CONFERENCES & REPORTS
6
Tech M&A MonthlyStarts in 1 minute
Thoughts? Questions? Let us know!@CorumGroup
7
Budapest
Amsterdam
Fort Worth
Helsinki
Minneapolis
Albany
90 Minutes
Industry Update
Overview of the M&A Process
Upcoming events in:
Salt Lake City
Phoenix
Rochester
Chicago
Kansas City
Toulouse
MERGE BRIEFING
8
Washington DC
Walnut Creek, CA
Los Angeles
Kelowna, BC
Half-Day
Tech M&A Bootcamp
The most attended tech executive conference in history
Upcoming events in:
SELLING UP, SELLING OUT
Columbus
Boston
St. Louis
9
8 Stages for anOptimal Outcome
IntegrationClosingDueDiligence
NegotiationDiscoveryContactResearchPreparation
10
Seller delivers counter offer
Discovery process is complete
Seller presents valuation guidance
Buyer delivers an opening offer
TYPICAL NEGOTIATION FLOW
11
Avoiding
Deal Disasters
12
UPCOMING CONFERENCE SCHEDULE
www.corumgroup.com/events
SELLING UP, SELLING OUT
Apr. 17 Los Angeles
Apr. 24 Kelowna, BC
Apr. 30 Columbus
May 14 Boston
May 22 St. Louis
MERGE BRIEFING
Apr. 12 Budapest
Apr. 16 Amsterdam
Apr. 18 Fort Worth
Apr. 24 Helsinki
Apr. 25 Minneapolis
Apr. 25 Salt Lake City
May 3 Phoenix
May 8 Albany
90-minute industry update and overview of the M&A
process
Half-day tech M&A bootcamp – a deep dive on
selling your company
13
Ask questions any time Use Q&A window on the right of screen
Click “Refresh Now” to view responses
This event is being recorded European broadcast April 12, 11:00 AM Berlin time
Asia-Pacific broadcast April 12, 2PM Sydney time
On demand webcast will be available at www.corumgroup.com
LOGISTICS
Q1:2019Global Tech M&A ReportTech M&A MonthlyApril 11, 2019
Thoughts? Questions? Let us know!@CorumGroup
15
WELCOME
BRUCE MILNE, CEO, CORUM GROUP LTD.
▪ Founded or owned four software companies, including AMI, an Inc.500 firm rated by IDC as the fastest growing computer-relatedcompany in the world
▪ Advisory boards for Microsoft, IBM, DEC, Comdex and Apple
▪ Board member/founding investor in some of the most innovativefirms in their field, including Blue Coat, Bright Star and Sabaki
▪ Past advisor to two governors and a senator, a board member of theWashington Technology Center
▪ Founder of the WTIA, the nation’s most active regional technologytrade association
▪ Worked with the Canadian government to found SoftWorld
▪ One of the 200 most influential individuals in the IT community inEurope
▪ American juror for the recent Tornado 100 Awards given to Europe’stop technology firms
▪ Graduate with Distinction from Harvard Business School
16
MODERATOR
TANYA FROEHLICH, DIRECTOR, EUROPEAN OPERATIONS,CORUM GROUP Intl. S.á.r.l.
▪ 13 years Tech M&A experience
▪ Based in Zurich, Switzerland, works closely with the European team
▪ Oversees the European marketing efforts, corporate planning &strategy, recruitment and team integration.
▪ Prior to joining Corum, was the Export Sales Manager for a leadingAsian food and beverage manufacturing & exporting company based inThailand
▪ Led the sales team whilst managing key client accounts globally,coordinated international shipments and ensured that all orderscomplied to international food standards.
▪ Spent five years in hospitality management with MarriottInternational, US; was a member of their “Committee of Excellence”.
▪ Holds an MBA and speaks English, German and Thai.
17
Welcome
Field Report: European M&A Events
Field Report: WFS Seattle
Q1 2019 Tech M&A Research Report
Special Report: Succession Planning
Q&A
AGENDA
18
EUROPEAN M&A EVENTS
JON SCOTT, CHAIRMAN, CORUM GROUP Intl. S.á.r.l.
▪ Executive leader with 30+ years of expertise in serving hightechnology companies
▪ President and CEO of The PowerTech Group
▪ President and CEO of Microserv Technology Services
▪ President and COO of Traveling Software
▪ Vice president roles in sales, marketing and businessdevelopment for technology companies
▪ Background includes strong ability to successfully integratestrategies and tactics into well executed operating plans,building strong teams and achieving excellent results
▪ Holds a BA in business from San Francisco State University
19
EUROPEAN M&A EVENTS
20
SPECIAL REPORT: WFS SEATTLE
STEVE JONES, SENIOR VICE PRESIDENT, CORUM GROUP LTD.
25+ years of experience in high-tech industries
Founder CEO of Solera Networks
Co-Founder of Auction Trust Network sold to MediaForge
Board Member of several software companies
Expertise in infrastructure, security, mobile and wireless, media and entertainment, supply chain and embedded devices/systems (IoT)
21
SPECIAL REPORT: WFS SEATTLE
22
MARKET SPOTLIGHT WEBCASTS
Matt RungDirectorWorld Financial Symposiums
23
CORUM RESEARCH REPORT
Anna LebedievaAnalyst
Julian ValenciaMarketing Research Analyst
Artem MamaievSenior Analyst
Nina SeghatoleslamiVP, Client Services
Barbara MomboeufMarketing Assistant, EMEA
Andrei MinetsAnalyst
Andy HillRegional Director, Australia
24
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Daily Percentage ChangeS&P TECH Dow Jones NASDAQ All-time high
USA Q1S&P Tech 21%NASDAQ 16%Dow Jones 11%
Europe Q1CAC 40 13%DAX 9%FTSE 100 8%
PUBLIC MARKETS 2018 - 2019
Asia Q1HANG SENG 12%
SSE Composite 24%
Nikkei 6%
25
0%
100%
200%
300%
400%
500%
600%
700% Daily Percentage ChangeNASDAQ S&P TECH Dow Jones
2009 2011 2013 2015 2017 2019
PUBLIC MARKETS:2009-PRESENT
2019
26
MarketTransactions
Q1:2019Q1:2018
810 832
Mega Deals 17 15
Largest Deal $17B $35B
PipelinePrivate Equity Platform Deals
99 105
VC-Backed Exits 175134
Attributes39%
Cross Border Transactions 39%
Start-Up Acquisitions 11%13%
18 yrs18 yrsAverage Life
of Target
Q1:2018 Q1:2019
Q1:2018 Q1:2019
CORUM INDEXTECH M&A
6%
31%
3%
112%
12%
27
2019 MEGA DEALS – YTD
Thoughts? Questions? Let us know!@CorumGroup
$2.0B $21B$6.4B $68B
$6.4B
$4.2B
$1.0BTelematics business
$3.7B
$3.4B
$22B
$11BPE consortium
CONSUMER VERTICALINTERNET HORIZONTALIT SERVICES
$4.6B
$2.0B
$1.5B
INFRASTRUCTURE
$7.8B
$3.1B
$1.0B
$6.8B
$1.3B
$7.0B $35B
28
2019 MEGA DEALS – YTD
Thoughts? Questions? Let us know!@CorumGroup
$2.0B $21B$6.4B $68B
$6.4B
$4.2B
$1.0BTelematics business
$3.7B
$3.4B
$22B
$11BPE consortium
CONSUMER VERTICALINTERNET HORIZONTALIT SERVICES
$4.6B
$2.0B
$1.5B
INFRASTRUCTURE
$7.8B
$3.1B
$1.0B
$6.8B
$1.3B
$7.0B $35B
SOLD TO
Seller: Luxoft Holding [Switzerland]Acquirer: DXC Technology [USA]Transaction Value: $2.0B (2.1x EV/Sales and 13.7x EV/EBITDA)- Outsourced software development services
29
2019 MEGA DEALS – YTD
Thoughts? Questions? Let us know!@CorumGroup
$2.0B $21B$6.4B $68B
$6.4B
$4.2B
$1.0BTelematics business
$3.7B
$3.4B
$22B
$11BPE consortium
CONSUMER VERTICALINTERNET HORIZONTALIT SERVICES
$4.6B
$2.0B
$1.5B
INFRASTRUCTURE
$7.8B
$3.1B
$1.0B
$6.8B
$1.3B
$7.0B $35B
SOLD TO
Seller: Careem [UAE]Acquirer: Uber Technologies [USA]Transaction Value: $3.1B- Ride-sharing mobile app
30
2019 MEGA DEALS – YTD
Thoughts? Questions? Let us know!@CorumGroup
$2.0B $21B$6.4B $68B
$6.4B
$4.2B
$1.0BTelematics business
$3.7B
$3.4B
$22B
$11BPE consortium
CONSUMER VERTICALINTERNET HORIZONTALIT SERVICES
$4.6B
$2.0B
$1.5B
INFRASTRUCTURE
$7.8B
$3.1B
$1.0B
$6.8B
$1.3B
$7.0B $35B
SOLD TO
Seller: Scout24 [Germany]Acquirer: Hellman & Friedman/The Blackstone Group [USA]Transaction Value: $6.4B- Real estate, automobile, dating and employment classifieds
31
2019 MEGA DEALS – YTD
Thoughts? Questions? Let us know!@CorumGroup
$2.0B $21B$6.4B $68B
$6.4B
$4.2B
$1.0BTelematics business
$3.7B
$3.4B
$22B
$11BPE consortium
CONSUMER VERTICALINTERNET HORIZONTALIT SERVICES
$4.6B
$2.0B
$1.5B
INFRASTRUCTURE
$7.8B
$3.1B
$1.0B
$6.8B
$1.3B
$7.0B $35B
SOLD TO
Seller: QuickBase [Welsh, Carson, Anderson & Stowe] [USA]Acquirer: Vista Equity Partners Management [USA]Transaction Value: $1.1B (8.8x EV/Sales and 20x EV/EBITDA)- Business application development SaaS
32
2019 MEGA DEALS – YTD
Thoughts? Questions? Let us know!@CorumGroup
$2.0B $21B$6.4B $68B
$6.4B
$4.2B
$1.0BTelematics business
$3.7B
$3.4B
$22B
$11BPE consortium
CONSUMER VERTICALINTERNET HORIZONTALIT SERVICES
$4.6B
$2.0B
$1.5B
INFRASTRUCTURE
$7.8B
$3.1B
$1.0B
$6.8B
$1.3B
$7.0B $35B
SOLD TO
Seller: eFront [Bridgepoint Capital] [France]Acquirer: BlackRock [USA]Transaction Value: $1.3B (9.3x EV/Sales)- Investment portfolio management software
33
2019 MEGA DEALS – YTD
Thoughts? Questions? Let us know!@CorumGroup
$2.0B $21B$6.4B $68B
$6.4B
$4.2B
$1.0BTelematics business
$3.7B
$3.4B
$22B
$11BPE consortium
CONSUMER VERTICALINTERNET HORIZONTALIT SERVICES
$4.6B
$2.0B
$1.5B
INFRASTRUCTURE
$7.8B
$3.1B
$1.0B
$6.8B
$1.3B
$7.0B $35B
SOLD TO
Seller: Worldpay [USA]Acquirer: Fidelity National Information Services [dba FIS] [USA]Transaction Value: $35B (10.9x EV/Sales and 16.9x EV/EBITDA)- Payment processing services
Dynasty Marketplace Dynasty Marketplace
34
2019 MEGA DEALS – YTD
Thoughts? Questions? Let us know!@CorumGroup
$2.0B $21B$6.4B $68B
$6.4B
$4.2B
$1.0BTelematics business
$3.7B
$3.4B
$22B
$11BPE consortium
CONSUMER VERTICALINTERNET HORIZONTALIT SERVICES
$4.6B
$2.0B
$1.5B
INFRASTRUCTURE
$7.8B
$3.1B
$1.0B
$6.8B
$1.3B
$7.0B $35B
35
3-YEAR MARKET VALUATION TRENDS
Horizontal Vertical Infrastructure
Consumer Internet IT Services
36
Horizontal Vertical
Consumer
Infrastructure
Internet IT Services
MARKET SECTORS
37
Public Valuation Multiples
HORIZONTALSOFTWARE MARKET
3.00 x
3.50 x
4.00 x
4.50 x
5.00 x
5.50 x
6.00 x
6.50 x
10.00 x
12.00 x
14.00 x
16.00 x
18.00 x
20.00 x
22.00 x
24.00 x
26.00 x
EV/SEV/EBITDA
Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19
EV/EBITDA 19.25 x 19.18 x 19.65 x 19.73 x 21.01 x 22.35 x 22.46 x 22.16 x 21.72 x 19.26 x 21.54 x 23.03 x 24.28 x
EV/S 4.51 x 4.57 x 4.75 x 4.75 x 5.03 x 5.28 x 5.32 x 5.32 x 4.95 x 4.73 x 5.27 x 5.49 x 5.36 x
38
Subsector Sales EBITDA Examples
Business Intelligence
4.31x 24.61x
Marketing 4.32x 19.72x
ERP 5.03x 18.48x
HumanResources
8.49x 39.77x
SCM 6.53x 31.15x
Payments 5.15x 25.78x
Other 3.86x 16.14x
HORIZONTALSOFTWARE VALUATIONS
39
Seller AcquirerSeller
CountryDeal
ValueMonth Description
USA - January Electronic bill presentment and payment solutions
USA - January Online payment-processing network
Germany - January Debt management SaaS
Argentina - January Payment technology software
United Kingdom
$280M February Cross-border payments processing software
USA $750M February Electronic bill presentment and payment solutions
USA - March Multi-currency cross-border payment application
France - March Mobile app for digitizing e-commerce processes
Germany - March Cashless payment terminals and digital merchant services
Payment Processing
HORIZONTALDEAL SPOTLIGHT
Assets
40
HORIZONTALDEAL SPOTLIGHT
Big Data
SOLD TO
SOLD TO
SOLD TO
Target: Infruid Labs [USA]Acquirer: Pegasystems [USA]- Business analytics and data visualization solutions
Target: Attunity [USA] Acquirer: Qlik [Thoma Bravo] [USA]Transaction Value: $560M (6.4x EV/Sales)-Big Data management software
Target: Centrifuge Systems [USA]Acquirer: Culmen International [USA]- Business intelligence software
41
HORIZONTALDEAL SPOTLIGHT
HR - Jobvite
SOLD TO
SOLD TO
SOLD TO
SOLD TO
Seller: Jobvite [USA]Acquirer: K1 Investment Management [USA]Transaction Value: $200M (reportedly)- Online recruitment platform
Seller: Canvas Talent [USA]Acquirer: Jobvite [K1 Investment Management] [USA]- Text-based intelligent interviewing platform
Seller: RolePoint [USA]Acquirer: Jobvite [K1 Investment Management] [USA]- Employee referral software
Seller: Talemetry [Canada]Acquirer: Jobvite [K1 Investment Management] [USA]- Recruitment marketing platform
42
HORIZONTALDEAL SPOTLIGHT
HR
SOLD TO
SOLD TO
Seller: Abacus Labs [Italy]Acquirer: Zucchetti [Italy]- Diversified HR solutions
Seller: Scheduling+ [USA]Acquirer: GetSwift [Australia]- Cloud workforce scheduling and task management software
43
HORIZONTALDEAL SPOTLIGHT
Corporate Performance Management
SOLD TO
SOLD TO
Seller: OneStream Software [USA]Acquirer: KKR [USA]Transaction Value: $500M (reportedly)- Corporate performance management platform
Seller: BOARD International [Switzerland]Acquirer: Nordic Capital [Sweden]- Performance management and business intelligence application software
44
HORIZONTALDEAL SPOTLIGHT
PR, Social Media
SOLD TO
SOLD TO
Seller: TrendKite [USA]Acquirer: Cision [USA]Transaction Value: $225M (8.9x EV/Sales)- Public relations analytics software
Seller: Falcon.io [Denmark]Acquirer: Cision [USA]Transaction Value: $125.9M (4.7x EV/Sales)- Social media and customer experience management platform
45
HORIZONTALDEAL SPOTLIGHT
AI Retail – Composite Commerce
SOLD TO
SOLD TO
SOLD TO
SOLD TO
Seller: Aspectiva [Israel]Acquirer: Walmart [USA]- AI-powered content analysis platform
Seller: Dynamic Yield [Israel]Acquirer: McDonalds [USA]Transaction Value: $300M (reportedly)- AI-powered personalization platform
Seller: Certona [USA]Acquirer: Kibo Software [Vista Equity] [USA]- Omnichannel personalization and revenue optimization platform
Seller: GrokStyle [USA]Acquirer: Facebook [USA]- AI and visual search software
46
HORIZONTALDEAL SPOTLIGHT
AI-based Semantics
SOLD TO
SOLD TO
Seller: Figure Eight [USA]Acquirer: Appen [Australia]Transaction Value: $175M- Training data AI-based platform
Seller: Leiki [Finland]Acquirer: DoubleVerify [Providence Equity Partners] [USA]- AI-enabled semantic segmentation and user profiling platform
47
HORIZONTALDEAL SPOTLIGHT
Speech Recognition
SOLD TO
SOLD TO
Seller: Vocalize.ai [USA]Acquirer: Sensory [USA]- AI-based speech recognition software tools
Seller: PullString [USA]Acquirer: Apple [USA]- AI-based voice recognition platform
48
HORIZONTALDEAL SPOTLIGHT
Chatbots
SOLD TO
SOLD TO
Seller: Assist Megacorp [USA]Acquirer: Conversocial [USA]- Messaging platform for businesses
Seller: CrunchBot [USA]Acquirer: [Qlik] [Thoma Bravo] [USA]- AI-powered data analyst chatbot
49
HORIZONTALDEAL SPOTLIGHT
RegTech
SOLD TO
SOLD TO
Seller: Visual Compliance [Canada]Acquirer: Descartes Systems Group [Canada]Transaction Value: $250M- Global trade compliance software
Seller: BWise [NASDAQ] [Netherlands]Acquirer: SAI Global [Australia]- Governance, risk and compliance (GRC) management software
50
VERTICALSOFTWARE MARKET
Public Valuation Multiples
3.00 x
3.50 x
4.00 x
4.50 x
5.00 x
5.50 x
10.00 x
12.00 x
14.00 x
16.00 x
18.00 x
20.00 x
22.00 x
EV/SEV/EBITDA
Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19
EV/EBITDA 18.31 x 19.29 x 20.25 x 20.62 x 20.46 x 20.48 x 19.93 x 18.05 x 18.95 x 18.79 x 19.76 x 20.44 x 21.45 x
EV/S 4.67 x 4.50 x 4.72 x 4.76 x 4.74 x 4.96 x 4.97 x 4.36 x 4.48 x 4.02 x 4.49 x 4.81 x 5.07 x
51
Subsector Sales EBITDA Examples
A/E/C 9.09x 33.99x
Automotive 4.36x 22.75x
Energy & Environment
2.31x 11.64x
FinancialServices
6.69x 21.85x
Government 1.95x 13.22x
Healthcare 2.72x 25.68x
Real Estate 4.77x 23.54x
Vertical Other 3.29x 15.62x
VERTICALSOFTWARE VALUATIONS
52
VERTICALDEAL SPOTLIGHT
Financial Services
SOLD TO
SOLD TO
SOLD TO
SOLD TO
Target: PIEtech [USA]Acquirer: Envestnet [USA]Transaction Value: $500M- Financial planning software
Target: Innovizant [USA] Acquirer: R Systems Internation [India]Transaction Value: $4M- Business analytical software solutions
Target: List [Italy]Acquirer: TA Associates [USA]- Software solutions in mission critical sectors and risk management systems
Target: Abe AI [USA]Acquirer: Yodlee [Envestnet] [USA]- AI-enabled conversational platform for financial institutions
53
VERTICALDEAL SPOTLIGHT
Healthcare
Seller AcquirerSeller
LocationDeal
ValueMonth Description
USA, TX - January Inventory supply chain management applications and solutions
USA, AL - January CRM software solutions for hospitals
USA, CA - January Clinical laboratory operations and patient blood management
USA, WI - January Decision-making software
USA, CT - January Document management control software
USA, PA - January Web-based enterprise analytics platform
USA, TX February Electronic health records, virtual care and business intelligence solutions
Netherlands - February Healthcare analytical tool and software
India $10M March Patient-centric, digital health information management software
54
VERTICALDEAL SPOTLIGHT
Education
Seller AcquirerSeller
CountryAcquirer Country
Month Description
India Singapore January Cloud-based deep learning platform
USA USA February SaaS-based data analytics platform
Australia USA February Software for analyzing unstructured data
Australia USA March Web-based educational software solution
United Kingdom
Singapore March Curriculum mapping, assessment platform
USA USA March Web-based writing assessment toolkit
USA USA March Web-based applications for education
DataSense data integration assets
55
VERTICALDEAL SPOTLIGHT
Real Estate
SOLD TO
SOLD TO
SOLD TO
Target: Dynasty Marketplace [USA]Acquirer: AppFolio [USA]Transaction Value: $60M- AI based software for real estate
Target: BoldLeads.com [USA] Acquirer: Propertybase [Boston Logic Technology Partners [Providence Equity Partners]] [USA]-Online platform, which connect real estate's buyer and seller
Target: in4mo [USA]Acquirer: Solera Holdings [Vista Equity Partners] [USA]- Mobile multimedia reporting platform
56
CONSUMERSOFTWARE MARKET
Public Valuation Multiples
1.00 x
1.50 x
2.00 x
2.50 x
3.00 x
3.50 x
4.00 x
4.50 x
6.00 x
8.00 x
10.00 x
12.00 x
14.00 x
16.00 x
18.00 x
20.00 x
EV/SEV/EBITDA
Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19
EV/EBITDA 19.04 x 17.90 x 16.90 x 17.76 x 17.72 x 17.35 x 19.07 x 16.25 x 15.86 x 15.92 x 16.76 x 14.42 x 16.27 x
EV/S 4.04 x 3.56 x 3.30 x 3.21 x 3.08 x 3.12 x 3.22 x 2.84 x 2.89 x 3.05 x 3.22 x 3.08 x 3.14 x
57
Subsector Sales EBITDA Examples
Casual Gaming 3.01x 26.26x
Core Gaming 3.25x 14.28x
Other 3.89x N/A
CONSUMERSOFTWARE VALUATIONS
58
CONSUMERDEAL SPOTLIGHT
Video Gaming
SOLD TO
Seller: Warhorse Studios [Czech Republic]Acquirer: Koch Media [THQ Nordic] [Germany]Transaction Value: $48.37M (1.2x EV/EBITDA)- Action role-playing historic games
Seller: Flying Wild Hog [Poland]Acquirer: Supernova Capital [United Kingdom]- Video game developer & publisher
SOLD TO
Seller: 18POINT2 [Australia]Acquirer: Koch Media [THQ Nordic] [Germany]Transaction Value: $2.73M- Entertainment game products
SOLD TO
59
CONSUMERDEAL SPOTLIGHT
Gaming and Betting
SOLD TO
Seller: Dedsert [dba BetBright] [Ireland]Acquirer: 888 HoldingsTransaction Value: $19.8M- Mobile gaming platform
Seller: JPJ Group (online bingo assets) [United Kingdom]Acquirer: 888 HoldingsTransaction Value: $23.2M- Bingo online gaming
Seller: Adjarabet [City Loft] [Georgia]Acquirer: Paddy Power Betfair Transaction Value: $132.3M (1.7x EV/Sales and 5.2x EV/EBITDA)- Peer-to-peer betting platform
SOLD TO
SOLD TO
Online Bingo assets
60
CONSUMERDEAL SPOTLIGHT
Game Development
SOLD TO
SOLD TO
SOLD TO
SOLD TO
Seller: Audiokinetic [Canada]Acquirer: Sony Corporation [Japan]- Audio software toolset for gaming industry
Seller: Allegorithmic [France]Acquirer: Adobe [USA]Transaction Value: $105M- AI-powered personalization platform
Seller: Graphine Software [Belgium]Acquirer: Unity Technologies [USA]- Texture streaming and compression middleware for gaming industry
Seller: Vivox [USA]Acquirer: Unity Technologies [USA]- Gaming voice-and-text chat technology
61
CONSUMERDEAL SPOTLIGHT
Spotify Acquisitions
SOLD TO
Seller: Gimlet Media [USA]Acquirer: Spotify [Sweden]Transaction Value: $230M- Digital media network platform
Seller: Anchor FM [USA]Acquirer: Spotify [Sweden]- Radio-based application
Seller: Parcast [USA]Acquirer: Spotify [Sweden]- Online storytelling podcast network
SOLD TO
SOLD TO
62
CONSUMERDEAL SPOTLIGHT
Apple
SOLD TO
Seller: Laserlike [USA]Acquirer: Apple [USA]
- Online content search engine platform
- Strengthens Apple’s position on artificial intelligence market
63
Public Valuation Multiples
INTERNETSOFTWARE MARKET
1.00 x
1.50 x
2.00 x
2.50 x
3.00 x
3.50 x
4.00 x
4.50 x
5.00 x
5.50 x
10.00 x
12.00 x
14.00 x
16.00 x
18.00 x
20.00 x
22.00 x
24.00 x
26.00 x
EV/SEV/EBITDA
Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19
EV/EBITDA 18.16 x 21.77 x 21.09 x 22.44 x 22.28 x 18.84 x 18.61 x 16.55 x 16.88 x 15.26 x 15.37 x 16.66 x 16.10 x
EV/S 4.84 x 4.37 x 4.26 x 4.11 x 4.09 x 4.58 x 4.47 x 3.85 x 3.71 x 3.36 x 3.69 x 3.51 x 3.57 x
64
Subsector Sales EBITDA Examples
Diversified Internet
3.89x 17.61x
eCommerce 0.63x 12.75x
Social Network 7.12x 14.89x
Travel & Leisure 5.57x 23.47x
INTERNETSOFTWARE VALUATIONS
65
INTERNETDEAL SPOTLIGHT
Food Delivery
SOLD TO
SOLD TO
Seller: Zomato (UAE-based food delivery business) [India]Acquirer: Delivery Hero [Germany]Transaction Value: $172M- Expands Middle East and North Africa business with 1.2m monthly orders
Seller: Veggie India [India]Acquirer: Milkbasket [India]- Grows customer base to over 100,000 households
66
INTERNETDEAL SPOTLIGHT
Travel & Leisure
SOLD TO
SOLD TO
SOLD TO
SOLD TO
Seller: HotelTonight [USA]Acquirer: Airbnb [USA]- Last-minute hotel booking app
Seller: Pocket Concierge [Japan]Acquirer: American Express [USA]- AI-powered personalization platform
Seller: Yatra.com [India]Acquirer: Ebix [USA]Transaction revenue: $336M (2x EV/Sales)
- Online travel portal
Seller: LoungeBuddy [USA]Acquirer: American Express - Airport Lounge Access platform
67
INTERNETDEAL SPOTLIGHT
Urban Route Planning
SOLD TO
Seller: UbiGo Innovation [Sweden]Acquirer: Via ID [France]
- Swedish mobility-as-a-service provider
- Enables users to automate usage of public transport, taxi, car-
sharing, rental car, and bike-sharing
68
INFRASTRUCTURESOFTWARE MARKET
Public Valuation Multiples
2.00 x
2.50 x
3.00 x
3.50 x
4.00 x
4.50 x
5.00 x
5.50 x
6.00 x
8.00 x
10.00 x
12.00 x
14.00 x
16.00 x
18.00 x
20.00 x
EV/SEV/EBITDA
Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19
EV/EBITDA 15.90 x 16.39 x 17.13 x 16.92 x 17.06 x 17.75 x 17.67 x 17.75 x 16.45 x 15.27 x 18.14 x 19.39 x 19.39 x
EV/S 4.84 x 5.02 x 4.98 x 4.87 x 4.80 x 4.78 x 4.88 x 5.01 x 4.43 x 4.57 x 4.23 x 4.20 x 4.63 x
69
Subsector Sales EBITDA Examples
Application Lifecycle
7.37x 14.77x
Endpoint 3.42x 17.96x
IT Services Management
9.05x 35.80x
Network Management
4.39x 13.37x
Security 7.66x 44.20x
Storage& Hosting
3.52x 33.60x
Other 4.19x 11.90x
INFRASTRUCTURESOFTWARE VALUATIONS
70
Security
INFRASTRUCTUREDEAL SPOTLIGHT
SOLD TO
SOLD TO
SOLD TO
SOLD TO
Seller: WhiteHat Security [USA]Acquirer: NTT Security [NTT Group] [Japan]- Risk management platform
Seller: ForceNock Security [Israel]Acquirer: Check Point Software Technologies [USA]- Autonomous web application security solution
Seller: BluVector [LLR Partners] [USA]Acquirer: Comcast [USA]- Cyber-threat detection and hunting platform
Seller: ProtectWise [USA]Acquirer: Verizon Communications [USA]- Enterprise network security platform
71
INFRASTRUCTUREDEAL SPOTLIGHT
Identity and Access Management
SOLD TO
SOLD TO
Seller: Inventia [Italy]Acquirer: CRIF [Italy]- Web-collaboration and online identification
Seller: Janrain [USA]Acquirer: Akamai Technologies [USA]Transaction Value: $125M (5x EV/Sales) - Customer identity and access management solutions
72
Network Performance Management
INFRASTRUCTUREDEAL SPOTLIGHT
SOLD TO
SOLD TO
SOLD TO
Seller: Mist Systems [USA]Acquirer: Juniper Networks [USA]Transaction Value: $405M- AI-driven wireless platform
Seller: Outlyer [USA]Acquirer: Bitrise [United Kingdom]- Cloud-based infrastructure monitoring platform
Seller: Singularity Networks [USA]Acquirer: Cisco Systems [USA]- Real-time network analytics platform
73
Cloud Integration
INFRASTRUCTUREDEAL SPOTLIGHT
SOLD TO
Seller: Azuqua [USA]Acquirer: Okta [USA]Transaction Value: $52.5M
- Cloud application integration SaaS
- Okta’s largest acquisition to date
74
Project and Portfolio Management
INFRASTRUCTUREDEAL SPOTLIGHT
SOLD TO
Seller: AgileCraft [USA]Acquirer: Atlassian [Australia]Transaction Value: $166M
- AI-enabled project and portfolio management SaaS
- Adds more value to Atlassian’s enterprise agile planning
75
IT SERVICESDEVELOPED MARKETS
Public Valuation Multiples
0.40 x
0.60 x
0.80 x
1.00 x
1.20 x
1.40 x
1.60 x
5.00 x
6.00 x
7.00 x
8.00 x
9.00 x
10.00 x
11.00 x
12.00 x
13.00 x
14.00 x
EV/SEV/EBITDA
Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19
EV/EBITDA 12.15 x 12.31 x 12.16 x 11.94 x 12.90 x 12.87 x 12.88 x 11.02 x 11.26 x 10.04 x 11.00 x 11.16 x 11.42 x
EV/S 1.34 x 1.38 x 1.32 x 1.18 x 1.31 x 1.34 x 1.32 x 1.22 x 1.19 x 1.04 x 1.12 x 1.20 x 1.32 x
76
IT SERVICESEMERGING MARKETS
Public Valuation Multiples
1.50 x
2.00 x
2.50 x
3.00 x
3.50 x
4.00 x
5.00 x
7.00 x
9.00 x
11.00 x
13.00 x
15.00 x
17.00 x
19.00 x
21.00 x
23.00 x
EV/SEV/EBITDA
Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19
EV/EBITDA 22.02 x 21.30 x 20.22 x 22.01 x 20.61 x 22.04 x 21.93 x 19.64 x 18.51 x 16.72 x 17.87 x 18.62 x 19.09 x
EV/S 3.20 x 3.22 x 3.27 x 3.44 x 3.61 x 3.70 x 3.66 x 3.26 x 3.36 x 3.23 x 3.66 x 3.58 x 3.71 x
77
IT SERVICESDEAL SPOTLIGHT
Focused Systems Integrators
SOLD TO
Seller: Converging Data [Australia] Acquirer: Deloitte Australia [Deloitte] [Australia]- Risk and cybersecurity consulting services for Splunk users
SOLD TO
Seller: Enterprise System Partners [Ireland]Acquirer: Accenture [Ireland]- Life sciences solutions and services
78
IT SERVICESDEAL SPOTLIGHT
Focused Systems Integrators
SOLD TO
SOLD TO
SOLD TO
Target: Ruletronics [United Kingdom]Acquirer: Larsen & Toubro Infotech [India]Transaction Value: $7.5M- Pega-based IT consulting services
Target: Zybertech [Canada] Acquirer: Hyphen Solutions [USA]- Sage value-added construction and real estate services
Target: NIELSEN + PARTNER [Germany]Acquirer: Larsen & Toubro Infotech [India]Transaction Value: $31.5M- IT consulting for retail banking and wealth management
79
IT SERVICESDEAL SPOTLIGHT
Microsoft Systems Integrators
Seller AcquirerSeller
CountryAcquirer Country
Month Description
Australia Australia January Microsoft Dynamics-based SI
United Kingdom
Ireland January Microsoft Gold Partner; systems integration and managed services
USA USA January Microsoft-based engineering services
Netherlands Netherlands January Microsoft Dynamics CRM-based solutions
USA USA January Microsoft Azure-based cloud migration & enablement
80
IT SERVICESDEAL SPOTLIGHT
AI Software Development
SOLD TO
SOLD TO
Seller: Peachtree AI [USA] Acquirer: Search Discovery [USA]- Consulting services in machine learning and artificial intelligence
Seller: Ividata Group [France]Acquirer: Keensight Capital/ ISAI Gestion [France]- Consulting services in data science, data privacy and artificial intelligence
81
IT SERVICESDEAL SPOTLIGHT
Government Services
SOLD TO
SOLD TO
SOLD TO
SOLD TO
Target: Applied Technology Group [USA] Acquirer: Applied Insight [Acacia Group] [USA]- Actionable intelligence to government customers
Target: Stratus Solutions [USA] Acquirer: Applied Insight [Acacia Group] [USA]- Cloud-at-scale solutions for governement
Target: LGS Innovations [Madison Dearborn Partners / CoVant] [USA]Acquirer: CACI International [USA]Transaction Value: $750M- Network services for government organizations
Target: OGSystems [General Catalyst Partners] [USA]Acquirer: Parsons Corp. [USA]- Geospatial intelligence and big data analytics services
82
CORUM RESEARCH REPORT
Anna LebedievaAnalyst
Julian ValenciaMarketing Research Analyst
Artem MamaievSenior Analyst
Nina SeghatoleslamiVP, Client Services
Barbara MomboefMarketing Assistant, EMEA
Andrei MinetsAnalyst
Andy HillRegional Director, Australia
83
Special Report: Succession Planning
84
PRESENTED BY
BRUCE MILNE, CEO, CORUM GROUP LTD.
▪ Founded or owned four software companies, including AMI, an Inc.500 firm rated by IDC as the fastest growing computer-relatedcompany in the world
▪ Advisory boards for Microsoft, IBM, DEC, Comdex and Apple
▪ Board member/founding investor in some of the most innovativefirms in their field, including Blue Coat, Bright Star and Sabaki
▪ Past advisor to two governors and a senator, a board member of theWashington Technology Center
▪ Founder of the WTIA, the nation’s most active regional technologytrade association
▪ Worked with the Canadian government to found SoftWorld
▪ One of the 200 most influential individuals in the IT community inEurope
▪ American juror for the recent Tornado 100 Awards given to Europe’stop technology firms
▪ Graduate with Distinction from Harvard Business School
85
What do you do when all of your wealth is
tied up in a technology company?
86
What is your succession plan?
87
SUCCESSION PLANNING
Traditional Succession Options
1. Family – Children take over
2. Employee Ownership – ESOP
3. Management Buyout – MBO
4. Merger Partner – M&A
88
“The boss is retiring. The kids don't want to take over…”
(Source: Chicago Tribune January 17, 2019)
SUCCESSION PLANNING
89
90
91
ESOPs & MBOs
Not used in tech:
- Valuations are too high
- Very complex to execute
- Bank financing unavailable
SUCCESSION PLANNING
92
Merger Partner
SUCCESSION PLANNING
- Strategic Buyer
- Financial Recapitalization
93
Record M&A Activity
- In Every Market
- Even Smaller Companies
- In All Geographies
SUCCESSION PLANNING
94
1995 2000 2005 2010 2015
M&A FOLLOWS CYCLES
95
(Source: CNN)
SUCCESSION PLANNING
96
18 Months After Crash
- 40% Drop in Valuation
- 50% of Buyers Leave
SUCCESSION PLANNING
97
SUCCESSION PLANNING
98
Congress discussing new tax proposals:
70% top tax rate 70% inheritance tax 2% tax on holdings
SUCCESSION PLANNING
99
What are you waiting for?
100
What is your succession plan?
101
Use Q&A chat box on your screen
Submit to queue at any time
Q&A
We welcome your questions!
102
UPCOMING CONFERENCE SCHEDULE
www.corumgroup.com/events
SELLING UP, SELLING OUT
Apr. 17 Los Angeles
Apr. 24 Kelowna, BC
Apr. 30 Columbus
May 14 Boston
May 22 St. Louis
MERGE BRIEFING
Apr. 12 Budapest
Apr. 16 Amsterdam
Apr. 18 Fort Worth
Apr. 24 Helsinki
Apr. 25 Minneapolis
Apr. 25 Salt Lake City
May 3 Phoenix
May 8 Albany
90-minute industry update and overview of the M&A
process
Half-day tech M&A bootcamp – a deep dive on
selling your company
103
After the Deal – Celebration
104
www.corumgroup.com