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USA Switzerland Germany France United Kingdom Canada Norway Brazil
www.corumgroup.com
MERGE WebinarMERGE Webinar Oct. 2009Oct. 2009Software and IT Industry Market Update:
Is an international buyer in your future?
Thursday, October 1, 200910:00 am PT
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Corum Group Presentation 2
Mark ReedExecutive Vice PresidentCorum Group Ltd.
>> For todays presentation or more information, contact Pat Sultan([email protected], +1 425-455-8281 ext. 248)
Miro ParizekManaging Director
Corum Group Ltd.
Bruce MilneCEO & ChairmanCorum Group Ltd.
Bruce Milne, the founder of Corum, is one of the true leaders in the software industry. He built the largest vertical market
software company in the world before founding Corum, where he has overseen more mergers than anyone in history,
generating over $6 Billion in wealth for the owners of privately held firms. Along the way, in addition to publishing
extensively, he has owned three other software companies (Rosesoft, Dataword, Insider Edition) and been a seed investor
in some of the leaders in our industry (Blue Coat, Bright Star, Sabaki). He founded the largest regional tech association
(Washington Software Association), and, as a recognized leader, has served on numerous advisory boards including
Comdex, DEC, Apple, IBM, and personally advised Bill Gates at Microsoft. He has been a tech cabinet advisor to two
Governors, a Congressman and U.S. Senator on issues related to the future of the software industry. Forhis expertise, he
was commissioned by the U.S. government to write the definitive high tech business guide for the SBA. The Canadian
Government had him conduct research which led to the establishment of SoftWorld, and he was recently voted one of the
most influential people in the European software community forhis work during the last market decline.
Dougan MilneResearch
Corum Group Ltd.
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Corum Group Presentation 3
Agenda
Overview of Current Market
International Update
Market and Valuation Analysis
Closing Comments - Q&A
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Corum Group Presentation 4
Recovery Is Now the Time?
Stocks Have Best Quarter Since 1998
IMF raises global 2010 growth forecast to 3.1% from 2.5%
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Corum Group Presentation 5
Corum M&A Activity High
Six Companies Sold in Q3
Six More in LOI During Q3
Six More Weighing Offers
Recovery Is Now the Time?
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Corum Group Presentation 6
U.S. Interest Rates Steady
Consumer Confidence Unexpectedly Drops
Pimcos Bill Gross Buying Treasuries Amid Deflation
Concerns
Unemployment Threatened Chronic Job Loss
Fed Rescue - $11.6 Trillion Bill!
U.S. Economy
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Corum Group Presentation 7
Home Prices Climb Most Since 2005
Vacation Timeshares Plunge
Industrial Real Estate Wont Bottom Until 2010
Time to Drop $8000 1st Time Buyer Credit
U.S. Real Estate
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Corum Group Presentation 8
International Economies
Trichet Says Too Early to Withdraw Stimulus
Spanish Inflation Rate Remains Negative
Pace of Eurozone Recovery Slows
Banks Call on Economists over Lending Drought
WB Pres: Global Economy Far From Secure
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Corum Group Presentation 9
International Interest Rates
Russia Cuts Bank Rate by Half Point to Stimulate
Israel Springs Interest Rate Rise
Negative Interest Rates in Sweden
ECB Leaves Interest Rates at 1%
Brazil to Cut Interest Rate
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Corum Group Presentation 10
Stock Markets
Stock Climb Continues Since March
Europe IPO Market Thawing From Deep Freeze
Global Rally Shows Signs of Running Out of Steam
U.S. Stocks Close Higher on M&A Boost
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Corum Group Presentation 11
Mega Deals
Xerox ACS: $6.4b; 1.3x
Adobe Omniture: $1.8b; 5.2x
SilverLake Skype: $2b; 5.1x
Dell Perot Systems: $3.9b; 1.4x
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Corum Group Presentation 12
Tech M&A
People are finally putting theirmoney where their mouth is.
- Thompson Phillips Jr.
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Corum Group Presentation 13
Presenter
Miro Parizek, Managing DirectorCorum Group International - Zurich
University of Pennsylvania, Computer Science
Wharton School of Business
Software Industry since 1983
Founder of three software and IT service companies
Exited North American Software and MediaGold
12 years M&A Advisor with the Corum Group
Led on dozens of M&A transactions in virtually all
software and IT related sectors including Datacenter Infrastructure
Vertical software
Horizontal solutions
IT Services
Enterprise Appplications
Web Commerce
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Corum Group Presentation 14
International M&A
Challenges
Cultural differences
Integration across borders
Establishing clear organization structures Fostering teamwork
Benefits
Economies of scale
Growth for top (and hopefully) bottomline Higher service levels for international customers
Access to rare domain expertise
Global leadership position
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Corum Group Presentation 15
International versus Domestic
Source: Thomson Financial
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Corum Group Presentation 16
European Public Markets
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Corum Group Presentation 17
Equity Valuations Not in Bubble Territory
Source: Datastream
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Corum Group Presentation 18
International Buyers of U.S. Companies
22%
19%
21%8%
19%
23% FRANCE
GERMANY
UK
NORDIC
BENELUX
OTHER
Source: 451 Group
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Corum Group Presentation 19
Top Non-U.S. Buyers
Europe SAP - DE
Siemens - DE
Software AG - DE
Pearson - UK
Autonomy - UK
Sage - UK
Thomson Reuters - UK
Dassault - FR
Ubisoft - FR
Wolters Kluwer - NED
IT Services Bull - FR
Thales Group - FR
Cegedim - FR
Atos Origin - FR
Capgemini - FR
Steria - FR
Logica - UK
Computacenter - UK
Getronics - BE
Canada Research in Motion
OpenText
CGI
LAM Datasul SA - BR
BuscaPe.com - BR
Hildebrando SA - MX
Asia China Security
Kingdee International
CDC
TrendMicro
NTT
Fujitsu
Namco Bandai
NEC
Sony
India Wipro
TaTa
Infosys
Satyam
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Corum Group Presentation 20
Related Cross-Border Transactions
Buyer U.S. Tar get Details
Skydata creates business mobile applicationsfor RIM, Windows and iPhone
Terms undisclosed
Provides Ticker data management forfinancial service companies
Terms undisclosed
Provides subscription-based automotiveGPS devices and software for consumers
Estimates $124m in cash
SaaS, enterprise manufacturing intelligencesoftware
Transaction valued at $3.2m
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Corum Group Presentation 21
Lesser Known Non-U.S. Buyers
Australia Computershare Ltd - 7 deals; $4m - $120m
Canada Constellation Software 18 deals;
$1m - $25m
Softchoice Corp. - 3 deals; $3m - $50m
Tucows Inc. - 5 deals; $1m $20m
France ILOG Inc. - 2 deals; $2m - $15m
Ubisoft - 3 deals; $10m - $100m (est.)
Business Objects - 7 deals, $4m - $100m
India HCL Technologies 3 deals; $10m - $50m
3i Infotech 5 deals; $4m $80m
Israel Ness Technologies 3 deals; $10m - $80m
NICE Systems 5 deals; $10m - $300m
U.K. SDL International - 3 deals; $15 - $60m
Misys PLC 3 deals; $13m - $330m
Philippines IPVG Corp. 2 deals; $10m - $15m
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Corum Group Presentation 22
Field Update
Bruce LazenbyRegional DirectorCanada
John MelotteRegional DirectorUnited Kingdom
Jerome FougeratRegional DirectorFrance
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Corum Group Presentation 23
Dougan MilneInternational ResearchCorum Group Ltd.
Dougan is a Research Analyst who has worked for 3 years with Corum's international groupheadquartered in Zrich, Switzerland. Prior to joining Corum's team in 2005, Dougan spentthree years working in the banking industry with Bank of America, and Citigroup's PrivateWealth business unit. Before entering finance and investment banking, Dougan founded the
successful garment distribution business, Billions Apparel. Douganh
as a Bach
elors degreein Business Economics from the University of San Diego.
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Corum Group Presentation 24
Public Markets
40.00
50.00
60.00
70.00
80.00
90.00
100.00
110.00
1
0.00
Jan-09 eb-09 ar-09
pr-09 ay-09 Jun-09 Jul-09
ug-09 Sep-09
Nasdaq S&P Tech ow
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Corum Group Presentation 25
M&AActivity September
Number of Software and IT M&ATransactions
2004
2005
350
276
239
255
0 50 100 150 200 250 300 350 400
September
2009 2008 2007 2006 2005 2004
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Corum Group Presentation 28
Public Valuations
Vertical Application Software Market
Deal Spotlight:
Sector: PublicTarget: FKI LogistexBuyer: Lyngsoe AS
Date: September 2009Transaction Value: n/a
Comments:
Gains libraries International expansion Domain expertise
Client base
Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09
EV/EBITDA 6.19 x 6.53 x 7.26 x 7.99 x 8.17 x 8.91 x 9.01 x 9.32 xEV/S 1.01 x 1.14 x 1.31 x 1.40 x 1.51 x 1.51 x 1.66 x 1.80 x
Vertical
Application
Software
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Corum Group Presentation 29
Public Valuations
ConsumerApplication Software Market
Deal Spotlight:
Sector: Consumer FinanceTarget: MINT.comBuyer: Intuit
Date: September 2009Transaction Value: $170mStructure: Cash
Comments:
SaaS Connected services strategy
Evolving business model Consumer
Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09
EV/EBITDA 2.
0
2.
.
2.
.
.
.27
.
EV/S 0. 0. 0. 9 0. 0 0. 0. 0. 9 0.
C nsumer
Appli ati n
Soft are
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Corum Group Presentation 30
Infrastructure Market
Public Valuations Deal Spotlight:
Sector: SecurityTarget: VericeptBuyer: TrustWave
Date: September 2009Transaction Value: $20mRevenue Multiples: 2.0xStructure: Stock (est.)
Comments:
Critical data classification
SaaS offering in the future
Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09
EV/EBITDA6.32 x 6.98 x 8.46 x 8.29 x 8.74 x 9.59 x 10.92 x 10.46 x
EV/S 1.31 x 1.43 x 1.55 x 1.52 x 1.72 x 1.95 x 2.02 x 2.14 x
Infrastructure
Software
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Corum Group Presentation 31
Internet Market
Public Valuations Deal Spotlight:
Sector: e-CommerceTarget: BuscaPe.comBuyer: NaspersDate: September 2009Transaction Value: $342m
Comments:
Geographic expansion Dominant regional player Favorable demographicsFeb-0 ar-0 Apr-0 a -0 Jun-0 Jul-0 Aug-0 ep-0
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Corum Group Presentation 32
IT Services Market
Public Valuations Deal Spotlight:
Sector: IT ServicesTarget: eVisoryBuyer: IQ Business Group
Date: September 2009Transaction Value: N/A
Comments:
Geographic expansion Cultural expansion Domain expertiseFe 2 3 09 Mar 3 09 4 5 r 3 09 May-09 J6 7 -09 J6 8 -09 4 ug-09 Se 5 -09
9 @
A
9 B C T D 4 5.2 E x 5.32x 5. E 6x 5.51x 5.24x 5.56x 5.6 E x 6.66x
9 @
A
S 0.55x 0.56x 0.60x 0.61x 0.63x 0.68x 0.68x 0. E 3x
T Serv ces
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Corum Group Presentation 33
Transaction volumes back up!
Continue to see month on month increases in publicvaluations
Good valuations for strategic opportunities
Active buyer universe: Public, Private and PE
Private equity putting dollars to work: Buyout,
Roll-up, etc. Mega Deals are back.
Market and Valuation Summary
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Corum Group Presentation 34London November 17
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Corum Group Presentation 35
Partial SpeakerList
Frank Boenke
Wellington Partners
Bernard Dalle
Index Ventures
Andrew Tsao
Silicon Valley BankKristof de Spiegeleer
SUN (Q-Layer)
Pelle Hjortblad
ProjectPlace
Anil Hansjee
Jenny Rosberg
NASDAQ
Mike Peplow
Banctec
Ashley Ward
European LeadershipProgramme
Gustavo Garcia
BuyVIP
November 17, London [email protected]
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Corum Group Presentation 36
www.worldfinancialsymposiums.com
Growth and Exit Strategies
Staging for Recovery
The Future of M&A, VC, Private Equity and Public Offerings in the NewTech Landscape
November 17, 2009 London
Attend this conference to learn about:
Raising capital in the current environment
The new rules of global tech M&A
The role of private equity in a credit-starved market
The IPO window
Creative transaction structures
Finding value and opportunity in the cloud
Acquisition multiples, VC tactics and more
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Corum Group Presentation 37
UpcomingCorum Events
October 5: Prague SUSO
October 6: Boston MB
October 8: Lyon MB
October 8: Washington DC MB
October 13: Scotland MB
October 13: Austin SUSO
October 14: Ireland MB
October 20: Stockholm MB/SUSO
October 22: Denmark MB/SUSO
October 22: Grenoble MB
October 23: Munich MB
October 27: Frankfurt MB
October 27: Dublin SUSO
November 3: HoustonSUSO
November 5: MERGE Webinar(Intl)
November 10: MERGE Webinar(France)
November 11: MERGE Webinar(DACH)
November 17: London WFS
November 18: Ft. Lauderdale
MB
November 19: Tampa MB
Merge Briefing (MB)Selling Up Selling Out (SUSO)World Financial Symposium (WFS)
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Corum Group Presentation 38
Contact Information
Research and Conferences:www.corumgroup.com
Corum Group Ltd.
Bruce Milne, CEO
Dougan Milne, [email protected]
10500 NE 8th Street, Suite 1500
Bellevue, WA 98004
USA
+1.425.455.8281
Corum Group International S..r.l.
Miro Parizek, Managing [email protected]
Beim Paradeplatz
Basteiplatz 7
8001 Zrich
Switzerland
+41.44.251.82 65