October M&A Flash Report

8/8/2019 October M&A Flash Report

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USA Switzerland Germany France United Kingdom Canada Norway Brazil

MERGE WebinarMERGE Webinar Oct. 2009Oct. 2009Software and IT Industry Market Update:Is an international bu er in our future?

www.corumgroup.com

, ,10:00 am PT


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Mark ReedExecutive Vice President

orum roup .

Bruce MilneCEO & Chairman

Corum Group Ltd.

Miro ParizekManaging DirectorCorum 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

Washin ton Software Association and as a reco nized leader has served on numerous advisor boards includin

, , ,

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. For his 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 for his work during the last market decline.

Corum Group Presentation 2

>> For todays presentation or more information, contact Pat Sultan

([email protected], +1 425-455-8281 ext. 248)

Dougan MilneResearchCorum Group Ltd.


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Agenda

Overview of Current Market

International Update

Market and Valuation Analysis

os ng ommen s -



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Recovery Is Now the Time?

oc s ave es uar er nce

IMF raises global 2010 growth forecast to 3.1% from 2.5%



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Recovery Is Now the Time?

Corum M&A Activity High

Six Companies Sold in Q3

Six More in LOI During Q3

x ore e g ng ers



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U.S. Economy

. .

Consumer Confidence Unexpectedly Drops

Pimcos Bill Gross Buying Treasuries Amid Deflation

Concerns

Unemployment Threatened Chronic Job Loss

e escue - . r on



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U.S. Real Estate

Vacation Timeshares Plunge

Industrial Real Estate Wont Bottom Until 2010

Time to Dro 8000 1st Time Bu er Credit



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International Economies

Trichet Says Too Early to Withdraw Stimulus

Spanish Inflation Rate Remains Negative

Pace of Eurozone Recovery Slows

an s a on conom s s over en ng roug

WB Pres: Global Economy Far From Secure



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International Interest Rates

Russia Cuts Bank Rate by Half Point to Stimulate

Israel Springs Interest Rate Rise

Negative Interest Rates in Sweden

eaves n eres a es a

Brazil to Cut Interest Rate



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Stock Markets

Stock Climb Continues Since March

Europe IPO Market Thawing From Deep Freeze

Global Rally Shows Signs of Running Out of Steam

. . oc s ose g er on oos



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Mega Deals

Xerox

ACS: $6.4b; 1.3x

. .

SilverLake Skype: $2b; 5.1x

Dell Perot Systems: $3.9b; 1.4x



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Tech M&A

People are finally putting their.

- Thompson Phillips Jr.



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Presenter

Miro Parizek, Managing DirectorCorum Group International - Zurich

University of Pennsylvania, Computer Science

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

Vertical software

Horizontal solutions

IT Services

Enterprise Appplications


Web Commerce


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International M&A



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International M&A

Challenges

Cultural differences

Establishing clear organization structures

Fostering teamwork

Benefits

Economies of scale

Growth for top (and hopefully) bottomline Higher service levels for international customers


Global leadership position


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International versus Domestic


Source: Thomson Financial


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European Public Markets



18/39

Equity Valuations Not in Bubble Territory


Source: Datastream


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International Buyers of U.S. Companies

22%23% FRANCE

19%

19%

GERMANY

UK

21%8%NORDIC

BENELUX

OTHER


Source: 451 Group


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Top Non-U.S. Buyers

Europe IT Services Asia SAP - DE

Siemens - DE Software AG - DE

-

Bull - FR

Thales Group - FR

Cegedim - FR

China Security

Kingdee International

CDC

Autonomy - UK

Sage - UK

Thomson Reuters - UK

tos r g n -

Capgemini - FR

Steria - FR

-

ren cro

NTT

Fujitsu

Dassault - FR

Ubisoft - FR

Wolters Kluwer - NED

Computacenter - UK

Getronics - BE

NEC

Sony

Canada Research in Motion

LAM Datasul SA - BR

-

India Wipro


CGI

.

Hildebrando SA - MX Infosys

Satyam


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Related Cross-Border Transactions

Bu er U.S. Tar et Details

Skydata creates business mobile applicationsfor RIM, Windows and iPhone

Provides Ticker data management forfinancial service companies

Provides subscription-based automotiveGPS devices and software for consumers

SaaS, enterprise manufacturing intelligencesoftware


.


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Lesser Known Non-U.S. Buyers

Australia India

Computershare Ltd - 7 deals; $4m - $120m

Canada Constellation Software 18 deals;

ec no og es ea s; m - m

3i Infotech 5 deals; $4m $80m

Israel$1m - $25m

Softchoice Corp. - 3 deals; $3m - $50m

Tucows Inc. - 5 deals; $1m $20m

Ness Technologies 3 deals; $10m - $80m

NICE Systems 5 deals; $10m - $300m

U.K. France

ILOG Inc. - 2 deals; $2m - $15m

Ubisoft - 3 deals; $10m - $100m (est.)

SDL International - 3 deals; $15 - $60m

Misys PLC 3 deals; $13m - $330m

Philippines us ness ec s - ea s, m - m

IPVG Corp. 2 deals; $10m - $15m



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Field UpdateJohn MelotteRegional Director

Regional DirectorCanada


Jerome FougeratRegional DirectorFrance


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Dougan MilneInternational ResearchCorum Group Ltd.

'headquartered 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 thesuccessful garment distribution business, Billions Apparel. Dougan has a Bachelors degreein Business Economics from the University of San Diego.



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Public Markets

110.00

120.00

as aq ec ow

90.00

100.00

60.00

70.00

.

40.00

50.00

Jan09 Feb09 Mar09 A r09 Ma 09 Jun09 Jul09 Au 09 Se 09



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M&A Activity September

Number of Software and IT M&A Transactions

255

276

239

September

2004

2005

0 50 100 150 200 250 300 350 400



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Corum Index M&A Statistics

# of Transactions# of Mega Deals >$1B

ep-

2556

ep-

2421

Average Deal Value

Median Seller Revenue

# VC backed Exits

,

$381

$112

33

,

$99

$28

17% Terms Undisclosed

All Cash (announced)

% Targets Public

77%

47%

13%

64%

59%

16%

% Buyers Public 45%49%


$ values in millions


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Horizontal Application Software Market

Public Valuations Deal Spotlight:

Sector: Supply ChainTarget: LS Retail + To-IncreaseBuyer: MicrosoftDate: September 2009Transaction Value: $5 millionStructure: CashHorizontal

Application

Comments: Microsoft Dynamics Vertical expansion 2 Nordic companies

Feb09 Mar09 Apr09 May09 Jun09 Jul09 Aug09 Sep09

EV/EBITDA 5.85x 6.82x 9.23x 9.39x 9.99x 11.06x 11.06x 12.67x

EV/S 1.12x 1.12x 1.16x 1.35x 1.50x 1.58x 1.93x 2.41x



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Vertical Application Software Market


Sector: PublicTarget: FKI LogistexBuyer: Lyngsoe ASDate: September 2009Transaction Value: n/a

Comments:

Vertical

Application

Gains libraries International expansion Domain expertise Client base



EV/S1.01

x 1.14

x 1.31

x 1.40

x 1.51

x 1.51

x 1.66

x 1.80

x



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Consumer Application Software Market


Sector: Consumer FinanceTarget: MINT.comBuyer: IntuitDate: September 2009Transaction Value: $170mStructure: CashConsumer

Application

Comments: SaaS Connected services strategy Evolving business model



ConsumerEV/S

0.58

x 0.64

x 0.69

x 0.50

x 0.53

x 0.53

x 0.59

x 0.83

x



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Infrastructure Market


Sector: SecurityTarget: VericeptBuyer: TrustWaveDate: September 2009Transaction Value: $20mRevenue Multiples: 2.0x

Structure: Stock (est.)

Infrastructure

Software

Comments: Critical data classification SaaS offering in the future



EV/S 1.31x 1.43x 1.55x 1.52x 1.72x 1.95x 2.02x 2.14x



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Internet Market


Sector: e-CommerceTarget: BuscaPe.comBuyer: NaspersDate: September 2009Transaction Value: $342m

Comments:

Internet

Geographic expansion Dominant regional player Favorable demographicsFeb09 Mar09 Apr09 May09 Jun09 Jul09 Aug09 Sep09


EV/S 1.36x 1.60x 2.11x 2.26x 2.30x 2.48x 2.60x 2.70x



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IT Services Market

Public Valuations

Sector: IT ServicesTarget: eVisory

Date: September 2009Transaction Value: N/A

IT Services

Geographic expansion Cultural expansion Domain expertiseFeb09 Mar09 Apr09 May09 Jun09 Jul09 Aug09 Sep09

EV/EBITDA 5.27 x 5.32 x 5.76 x 5.51 x 5.24 x 5.56 x 5.67 x 6.66 x

EV/S 0.55x 0.56

x 0.60

x 0.61

x 0.63

x 0.68

x 0.68

x 0.73

x



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Market and Valuation Summary

Continue to see month on month increases in public

Good valuations for strategic opportunities

,

Private equity putting dollars to work: Buyout,Roll-u etc.

Mega Deals are back.



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Corum Group Presentation 35London November 17


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Partial Speaker List

November 17, London [email protected]

Frank Boenke

Wellington Partners

Andrew Tsao

Silicon Valley Bank

Kristof de Spiegeleer

SUN (Q-Layer)

Pelle Hjortblad

ProjectPlace

Jenny Rosberg

NASDAQ


Index Ventures

Google

Banctec

European LeadershipProgramme

BuyVIP


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www.worldfinancials m osiums.com

r w h n Exi r i

Staging for Recovery, ,

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


Acquisition multiples, VC tactics and more


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Upcoming Corum Events

October 5: Prague SUSO October 23: Munich MB

October 6: Boston MB

October 8: Lyon MB

October 27: Frankfurt MB

October 27: Dublin SUSO

October 13: Scotland MB

October 13: Austin SUSO

November 5: MERGE Webinar (Intl)

November 10: MERGE Webinar (France)

October 14: Ireland MB

October 20: Stockholm MB/SUSO

November 11: MERGE Webinar (DACH)

November 17: London WFS

c o er : enmar

October 22: Grenoble MB

ovem er : . au er a e

November 19: Tampa MB


Selling Up Selling Out (SUSO)World Financial Symposium (WFS)


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Contact Information

Corum Group Ltd.

Bruce Milne, CEO

Dougan Milne, Researchouganm corumgroup.com

10500 NE 8th Street, Suite 1500

Bellevue, WA 98004

Corum Group International S..r.l.

Miro Parizek, Mana in Director

+1.425.455.8281

[email protected]

Beim ParadeplatzBasteiplatz 7

r c

Switzerland

+41.44.251.82 65


www.corumgroup.com

Documents

October M&A Flash Report