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Welcome to the Q2 edition of Results International’s Tech Report
Here at Results we cover all aspects of technology with a particular focus on enterprise software / SaaS, software-
related IT services, and tech enabled services. However we like to turn our attention to a number of specific sectors
at the end of every quarter to consider the trends and analyse the activity in the M&A, fundraising and public
markets.
We have produced our view on the previous quarter’s proceedings in a series of individual market reviews on:
• SaaS
• HealthTech
• Cyber Security
• AdTech & MarTech
Each sector has had an exciting quarter, with innovation and strong investor appetite driving buoyant public and
private market activity.
Cyber Security, AdTech & MarTech and HealthTech have seen healthy public markets with our Results indices all up
on the previous quarter. SaaS performance has been mixed in Q2, however M&A activity in the space and
fundraising appetite remains strong.
The private markets in Cyber Security, AdTech & MarTech and HealthTech have remained close to record levels
seen in Q1 as private investors continue to invest heavily in innovation and product differentiation.
Companies displaying strong top-line growth with quality clients and an innovative products, within each of their
sectors, continue to outperform their peers on the public markets.
We hope you enjoy the document, and please do get in touch if you would like to discuss any of the themes with
us. We look forward to speaking with you soon.
1
Deep domain expertise in three inter-related sectors… … and broad industry networks
A market-leading corporate finance advisory firm…
• 40 person team; 250+ completed transactions
• Broad global network
• Creative solutions
• Senior level focus on every transaction
• Founded in 1991
• Entrepreneurial and owner-managed
…with global reach
3
About Results International
70
80
90
100
110
120
130
140
150
Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15
Large-cap Midcap Small-cap Global SaaS Index NASDAQ Comp
Results International Global SaaS Indices
4
5.9%
13.1%
6.8%
(10.8%)
10.7%
Q2 2015 Performance
Large Cap (2.1%)
Mid Cap 8.0%
Small Cap (3.7%)
Global SaaS (0.5%)
Note: Based on share prices as at 30 June 2015
Note: Indices weighted by market capitalisation
Sources: Capital IQ and Results analysis
(4.2%)
(13.9%)
(1.6%)
4.2%
(6.5%) (4.1%)
(11.3%)
1.6%
(26.5%)
13.8% 13.8%
13.8%
18.9%
9.5%
(5.8%)
7.5% 4.6%
26.8%
(8.6%)
14.3%
(30.0%)
(20.0%)
(10.0%)
0.0%
10.0%
20.0%
30.0%
Global SaaS Universe: Large & Mid Cap Share Price Performance
5
Q2
-20
15
Last
12 M
on
ths
Large Cap Mid Cap
Note: Share price performance as at 30 June 2015
Sources: Capital IQ and Results analysis
(8.4%)
(33.6%)
5.6%
19.9% 19.9% 18.9%
(15.0%) (25.3%)
(10.4%)
2.5%
34.0%
34.0%
(24.4%)
26.9%
(15.2%)
(3.5%)
44.8%
124.2%
(3.3%)
38.3%
(60.0%)
(40.0%)
(20.0%)
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
16.5% 19.0%
(7.7%)
n.a. 2.3%
n.a.
(25.7%)
23.5%
2.4%
8.7%
(13.6%) (14.5%)
(2.5%)
22.3% 19.4%
1.9%
(30.0%)
(20.0%)
(10.0%)
0.0%
10.0%
20.0%
30.0%
Global SaaS Universe: Small Cap Share Price Performance
6
Q2
-20
15
Last
12 M
on
ths
Small Cap
Note: Share price performance as at 30 June 2015
Sources: Capital IQ and Results analysis
(5.1%)
(54.7%)
(11.4%)
n.a.
(38.3%)
n.a.
(30.6%)
n.a.
17.7%
(42.7%)
57.2%
(16.3%)
4.1%
21.2%
32.2%
(8.6%)
(80.0%)
(60.0%)
(40.0%)
(20.0%)
0.0%
20.0%
40.0%
60.0%
80.0%
Global SaaS: Valuation Benchmarks
7
EBITDA Margin 2015E EV / EBITDA 2015E
Revenue Growth (2015-16E) EV / Revenue 2015E
Note: EV = Enterprise Value; Financials calendarised to December year end
Note: Median values reported; excludes negative multiples
Note: See Selected Publicly Traded Companies (slides 6 & 7) for details of companies included in each category
Source: Capital IQ
21.2%
19.2% 19.1% 20.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Large Cap Mid Cap Small Cap Global SaaS
7.6 x
5.6 x 5.2 x
5.6 x
0.0 x
1.0 x
2.0 x
3.0 x
4.0 x
5.0 x
6.0 x
7.0 x
8.0 x
Large Cap Mid Cap Small Cap Global SaaS
18.1% 17.4%
0.2%
11.9%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Large Cap Mid Cap Small Cap Global SaaS
29.9 x
23.8 x
32.0 x
27.7 x
0.0 x
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
Large Cap Mid Cap Small Cap Global SaaS
Operating Metrics Valuation Metrics
Price % of 52 Market Total Net Enterprise Revenue Subscription Rev. Growth Gross Margin EBITDA Margin Revenue EBITDA
Company (30-Jun-15) Week High Cap Cash Debt Value CY2015 Historical CY15-16 Historical CY2015 CY2016 CY2015 CY2016 CY2015 CY2016
Large Cap
salesforce.com, inc. 69.63 88.7% 46,391 1,019 1,020 47,411 6,448 93.9% 21.0% 76.0% 18.2% 19.0% 7.4 x 6.1 x 40.3 x 32.0 x
Solera Holdings Inc. 44.56 64.0% 2,991 395 2,314 5,304 1,169 n.a 7.2% 68.3% 45.0% 40.3% 4.5 x 4.2 x 11.2 x 10.5 x
Workday, Inc. 76.39 78.4% 14,590 1,922 (1,424) 13,167 1,115 75.5% 38.6% 66.4% 3.7% 7.3% 11.8 x 8.5 x n.m. n.m.
Serv iceNow, Inc. 74.31 89.0% 12,403 745 (294) 12,109 990 82.4% 35.9% 63.6% 11.9% 13.2% 12.2 x 9.0 x n.m. 68.3 x
athenahealth, Inc. 114.58 74.8% 4,509 61 205 4,714 918 94.7% 21.2% 59.8% 18.1% 17.8% 5.1 x 4.2 x 28.4 x 23.8 x
NetSuite Inc. 91.75 80.6% 7,290 459 (183) 7,108 733 80.5% 30.0% 68.2% 7.0% 7.7% 9.7 x 7.5 x n.m. 96.4 x
The Ultimate Software Group, Inc. 164.34 89.7% 4,796 123 (113) 4,684 616 81.5% 20.7% 59.8% 24.1% 25.2% 7.6 x 6.3 x 31.5 x 24.9 x
25th percentile 76.6% 826 80.8% 20.8% 61.7% 9.5% 10.5% 6.2 x 5.2 x 24.1 x 24.1 x
Median 80.6% 990 82.0% 21.2% 66.4% 18.1% 17.8% 7.6 x 6.3 x 29.9 x 28.5 x
75th percentile 88.9% 1,142 91.0% 33.0% 68.3% 21.2% 22.1% 10.7 x 8.0 x 33.7 x 59.2 x
Mid Cap
RealPage, Inc. 19.07 82.5% 1,518 28 (13) 1,506 461 96.1% 10.4% 56.8% 17.4% 19.2% 3.3 x 3.0 x 18.8 x 15.4 x
Medidata Solutions, Inc. 54.32 92.1% 3,085 298 (54) 3,031 403 82.3% 19.2% 74.7% 23.3% 24.8% 7.5 x 6.3 x 32.3 x 25.5 x
Veeva Systems Inc. 28.03 83.3% 3,693 429 (429) 3,264 390 69.8% 23.6% 60.7% 29.2% 29.9% 8.4 x 6.8 x 28.7 x 22.7 x
Constant Contact, Inc. 28.76 66.6% 962 179 (179) 783 375 n.a 15.0% 72.5% 19.7% 21.3% 2.1 x 1.8 x 10.6 x 8.5 x
Cornerstone OnDemand, Inc. 34.80 74.0% 1,914 220 7 1,921 340 n.a 26.5% 70.5% 1.4% 4.6% 5.6 x 4.5 x n.m. 96.7 x
Fleetmatics Group PLC 46.83 95.2% 1,832 172 (148) 1,684 282 n.a 20.3% 75.2% 30.4% 32.0% 6.0 x 5.0 x 19.6 x 15.5 x
IntraLinks Holdings, Inc. 11.91 93.0% 707 47 32 739 272 n.a 7.4% 72.9% 14.2% 15.5% 2.7 x 2.5 x 19.1 x 16.3 x
LogMeIn, Inc. 64.49 92.1% 1,637 232 (232) 1,404 264 n.a 16.4% 89.6% 22.4% 22.4% 5.3 x 4.6 x 23.8 x 20.4 x
LivePerson Inc. 9.81 66.7% 560 41 (41) 519 245 n.a 14.5% 74.9% 7.9% 9.8% 2.1 x 1.9 x 26.9 x 18.9 x
Demandware, Inc. 71.08 96.8% 2,802 190 (189) 2,613 234 92.3% 33.3% 73.8% 4.6% 6.9% 11.2 x 8.4 x n.m. n.m.
Ellie Mae, Inc. 69.79 97.6% 2,212 74 (72) 2,140 227 n.a 23.0% 71.4% 22.5% 25.5% 9.4 x 7.7 x 42.0 x 30.1 x
Marketo, Inc. 28.06 78.8% 1,274 104 (97) 1,177 209 90.2% 32.4% 62.7% (12.6%) (9.6%) 5.6 x 4.3 x n.m. n.m.
Bazaarvoice, Inc. 5.89 62.7% 472 107 (50) 422 201 n.a 10.8% 68.5% (3.4%) 3.3% 2.1 x 1.9 x n.m. 57.0 x
25th percentile 74.0% 234 82.3% 14.5% 68.5% 4.6% 6.9% 2.7 x 2.5 x 19.1 x 15.9 x
Median 83.3% 272 90.2% 19.2% 72.5% 17.4% 19.2% 5.6 x 4.5 x 23.8 x 20.4 x
75th percentile 93.0% 375 92.3% 23.6% 74.7% 22.5% 24.8% 7.5 x 6.3 x 28.7 x 27.8 x
Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 100x EV / Revenue and 100x EV / EBITDA; Net debt includes minority interest
Note: Market cap classifications categorised by CY2015E revenue:
• Large Cap: Revenues greater than $500m
• Mid Cap: Revenues between $200m and $500m
• Small Cap: Revenues less than $200m
Source: Capital IQ
Global SaaS: Selected Publicly Traded Companies
8
Operating Metrics Valuation Metrics
Price % of 52 Market Total Net Enterprise Revenue Subscription Rev. Growth Gross Margin EBITDA Margin Revenue EBITDA
Company (30-Jun-15) Week High Cap Cash Debt Value CY2015 Historical CY15-16 Historical CY2015 CY2016 CY2015 CY2016 CY2015 CY2016
Small Cap
Jive Software, Inc. 5.25 60.1% 393 119 (114) 279 198 88.7% 10.7% 68.2% 0.2% 3.7% 1.4 x 1.3 x n.m. 34.3 x
Cvent, Inc. 25.78 86.4% 1,126 177 (177) 949 182 90.2% 22.9% 70.2% 9.0% 12.8% 5.2 x 4.2 x 57.5 x 33.1 x
Benefitfocus, Inc. 43.85 91.8% 1,340 107 (62) 1,278 175 93.3% 24.3% 36.3% (22.2%) (12.9%) 7.3 x 5.9 x n.m. n.m.
Qualys, Inc. 40.35 72.7% 1,579 143 (143) 1,436 166 n.a 24.3% 77.2% 27.1% 27.7% 8.7 x 7.0 x 32.0 x 25.1 x
HubSpot, Inc. 49.58 90.3% 1,823 136 (136) 1,687 167 58.4% 28.2% 68.0% (15.0%) (13.5%) 10.1 x 7.9 x n.m. n.m.
SPS Commerce, Inc. 65.80 90.3% 1,130 134 (134) 997 157 n.a 19.1% 68.7% 13.8% 15.0% 6.3 x 5.3 x 45.9 x 35.4 x
Xero Limited. 12.23 67.1% 1,654 182 (182) 1,472 127 94.9% 56.6% 65.7% (35.2%) (16.6%) 11.6 x 7.4 x n.m. n.m.
Marin Software Incorporated 6.74 55.5% 244 53 (49) 194 115 n.a 17.0% 64.2% (10.7%) (1.3%) 1.7 x 1.4 x n.m. n.m.
SciQuest, Inc. 14.81 77.5% 409 127 (127) 281 108 n.a 11.7% 69.1% 19.3% 20.5% 2.6 x 2.3 x 13.5 x 11.3 x
Textura Corporation 27.83 89.1% 748 67 (67) 681 99 n.a 40.9% 79.6% 11.6% 11.4% 6.9 x 4.9 x 59.1 x 42.7 x
ChannelAdvisor Corporation 11.95 44.0% 303 63 (61) 241 95 n.a 15.1% 71.5% (14.8%) (8.0%) 2.5 x 2.2 x n.m. n.m.
MINDBODY, Inc. 13.83 85.1% 541 239 (50) 491 n.a. 58.0% n.a. 57.1% n.a. n.a. n.a. n.a. n.a. n.a.
Halogen Software Inc. 8.62 96.4% 195 43 (43) 152 67 87.7% 19.1% 71.8% (7.8%) (5.9%) 2.3 x 1.9 x n.m. n.m.
Xactly Corporation 8.59 85.1% 263 133 (106) 157 n.a. 77.4% n.a. 59.0% (20.9%) n.a. 30.9 x n.a. n.m. n.a.
Craneware plc 10.34 95.2% 280 36 (36) 244 50 87.3% 8.2% 95.4% 30.4% 30.7% 4.9 x 4.5 x 16.1 x 14.8 x
StatPro Group plc 1.26 89.9% 85 4 (4) 81 51 n.a. 4.0% n.a. 14.5% 15.3% 1.6 x 1.5 x 11.0 x 9.9 x
25th percentile 71.3% 96 77.4% 12.6% 64.9% (14.9%) (7.5%) 2.4 x 2.0 x 14.8 x 13.9 x
Median 85.8% 121 87.7% 19.1% 68.7% 0.2% 7.6% 5.2 x 4.4 x 32.0 x 29.1 x
75th percentile 90.3% 167 90.2% 24.3% 71.7% 14.1% 15.3% 8.0 x 5.7 x 51.7 x 34.6 x
9
Global SaaS: Selected Publicly Traded Companies
Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 100x EV / Revenue and 100x EV / EBITDA; Net debt includes minority interest
Note: Mindbody and Xactly Corporation recently IPO’d in June 2015. Broker reports for both companies are currently not available
Note: Market cap classifications categorised by CY2015E revenue:
• Large Cap: Revenues greater than $500m
• Mid Cap: Revenues between $200m and $500m
• Small Cap: Revenues less than $200m
Source: Capital IQ
10
Disclaimer:
This document has been produced by Results International Group LLP (“Results”) and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein and, accordingly, none of Results’ officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.
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Deep domain expertise in three inter-related sectors… … and broad industry networks
A market-leading corporate finance advisory firm…
• Founded in 1991
• Entrepreneurial and owner-managed
• 40 person team; 250+ completed transactions
• Broad global network
• Creative solutions
• Senior level focus on every transaction
…with global reach
12
About Results International
60
70
80
90
100
110
120
130
Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15
Healthcare IT - Europe Healthcare IT - US Biopharma IT Generalists NASDAQ Composite Index FTSE 100
Q2 2015 Performance
Healthcare IT – Europe 19.3%
Healthcare IT - US (0.3)%
Biopharma IT 10.2%
Generalists (3.9)%
HealthTech(1)
0.8%
Results International Global HealthTech Indices
Note: Based on share prices as at 30 June 2015 Note: Indices weighted by market capitalisation Note:
(1) Excludes Generalists
Sources: Capital IQ and Results analysis 13
18.8% 17.3%
13.1%
(0.9)%
17.0%
(3.3)%
49.3%
26.0%
47.4%
15.1% 17.9% 21.2% 20.7%
33.9%
(8.4)%
3.3%
(14.8)%
(3.4)%
2.3% 3.2%
(46.4)%
25.2%
(16.0)%
111.5%
10.1%
26.9%
13.3%
-60.0%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
Last
12 M
on
ths
14.6%
5.7%
20.6%
6.6%
11.5%
22.3%
(1.9)%
(6.8)%
14.2%
(4.2)%
(6.0)%
15.2%
17.0%
2.3% 3.6% 4.2%
20.6%
(1.7)%
5.7%
10.2% 9.5%
7.1%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Q1-2
015
HealthTech: Share Price Performance
Note: Share price performance as at 30 June 2015 Note: *‘Last 3 Months’ & ‘Last 12 Months’ reference dates adjusted to first trading day post IPO for Evolent Health (4-Jun-15); and ‘Last 12 Months’ for Inovalon Holdings (11-Feb-15) Sources: Capital IQ and Results analysis 14
Healthcare IT – Europe Healthcare IT – US Biopharma IT
* *
HealthTech: Recent IPO Performances
15
Note: Calendarised to December year end; $ millions, except share price data Note:
(1) Current increase from IPO price; Market data as of 30 June 2015
Note: (2)
Evolent Health projecting negative EBITDA for CY2015; current EV adjusted to reflect additional cash from IPO not accounted for in most recent Balance Sheet Note:
(3) Castlight projecting negative EBITDA for CY2015
Source: Capital IQ
Company IPO Date Description Raised Indicative Price
Range ($)
IPO Price
($)
Increase vs.
range
Day 1
Increase
Current
Increase(1)
Current
EV
EV / Revenue
2015E
EV / EBITDA
2015E
Jun-15 Healthcare delivery and
payments software 195.5 14.00-16.00 17.00 13.3% 10.9% 14.7% 947 6.0x n.m.
(2)
Feb-15 Cloud-based healthcare data analytics software
600.0 24.00-26.00 27.00 8.0% 0.0% 3.3% 3,622 8.3x 22.4x
Apr-14 Healthcare information technology and services
1,300.0 18.00-21.00 20.00 2.5% 15.0% 53.3% 13,602 4.7x 14.9x
Mar-14 Healthcare enterprise management software
177.6 13.00-15.00 16.00 14.3% 148.8% (49.1)% 578 7.6x n.m. (3)
Dec-13
Software, hardware and services for the healthcare and energy sectors
199.7 n.a. 2.93 n.a. 20.1% 63.1% 335 3.2x 13.1x
Oct-13
Cloud-based CRM software for the biopharma industry
260.9 16.00-18.00 20.00 17.6% 85.8% 40.2% 3,264 8.4x 28.7x
NYSE
NYSE
LSE
NYSE
NasdaqGS
NYSE
HealthTech: Valuation Benchmarks
16
EBITDA Margin 2015E EV / EBITDA 2015E
Revenue Growth (2015-16E) EV / Revenue 2015E
Note: EV = Enterprise Value; Financials calendarised to December year end Note: Median values reported; excludes negative multiples Note: See Selected Publicly Traded Companies (Slide 9) for details of companies included in each category Note: McKesson excluded from above analysis because majority of revenue is generated from pharmaceutical distribution Source: Capital IQ
4.2%
8.0%
12.7%
19.2%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Generalists Healthcare IT -
Europe
Healthcare IT - US Biopharma IT
28.0%
23.3%
19.5%
23.3%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Generalists Healthcare IT -
Europe
Healthcare IT - US Biopharma IT
4.0 x
3.3 x
4.6 x
7.5 x
0.0 x
1.0 x
2.0 x
3.0 x
4.0 x
5.0 x
6.0 x
7.0 x
8.0 x
Generalists Healthcare IT -
Europe
Healthcare IT - US Biopharma IT
11.0 x 12.7 x
14.4 x
28.7 x
0.0 x
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
Generalists Healthcare IT -
Europe
Healthcare IT - US Biopharma IT
21
17
20
32
29
18
28 27
28
32
44
61
54
49
4
3
5
1
1
7
2
7 5
6
2
8
12
5
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
0
10
20
30
40
50
60
70
80
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015
Healthcare IT Biopharma IT Healthcare IT Total Disclosed Deal Value Biopharma IT Total Disclosed Deal Value
HealthTech: Global M&A Activity
17 Sources: Press releases, Capital IQ, Mergermarket, 451 Research and Results analysis
Nu
mb
er
of D
ea
ls
Tota
l D
isc
lose
d D
ea
l V
alu
e (
$m
)
HealthTech: Selected Deals in Q2 2015
Date Buyer Target EV ($m) EV /
Revenue EV /
EBITDA Company description
Target Location
Jun-15 - - - Nurse and doctor scheduling automation software
Jun-15 6.4 - - Healthcare information systems software for sexual health and substance misuse
May-15 - - - Population health information platform for socioeconomic and community health data
May-15 - - - Healthcare informatics and image archiving software
May-15 140.0 - - Customer-driven healthcare and reimbursement accounts software and services
May-15 1.9 - - Patient flow and bed management software
May-15 - - - Big data analysis software for healthcare
May-15 - - - Medical informatics software for diagnostic image management
May-15 105.0 - - Big data machine learning software for the life sciences, healthcare, manufacturing, retail and financial services sectors
May-15 - - - Compliance and performance improvement software for care enhancement
May-15 - - - Occupational medicine and preventative health software
May-15 46.9 - - Diagnostic laboratory and clinical applications support software and managed services
Apr-15 24.1 - - Venous biometric patient identification systems
Apr-15 175.4 - - Healthcare information management systems software
Apr-15 - - - Cloud-based healthcare intelligence software
Apr-15 - - - Cloud-based population health data management software
Apr-15 - - - Healthcare data analytics software
18
Note: Financials relate to the companies’ full fiscal year before the transaction took place Note: Enterprise Value (EV) = transaction value scaled to 100% shareholding plus net debt (includes minority interest) Sources: Press releases, Capital IQ, Mergermarket, 451 Research and Results analysis
Date Company Type of round Funds
raised ($m) Investor participation Description
Company headquarters
Jun-15 Series B 9.2 Amadeus Capital Partners; Gilde Healthcare Partners; Archimedia Primary care practice and case management software
Jun-15 - 0.5 Investessor, Investment Arm Mobile application for Electronic Health Record management
Jun-15 - 1.2 Castle Connolly Medical; Inveready Asset Management Consumer online physician selection and healthcare information platform
Jun-15 - - WuXi PharmaTech (NYSE:WX) Data management and analysis software for the life sciences industry
May-15 - 0.5 Individual investor Online marketplace and consultation platform for telemedicine services
May-15 Seed 1.1 Rothenberg Ventures Clinical treatment applications for psychology
May-15 Series A 5.0 Industrifonden; Briban Invest Mobile patient recruitment and trial management software and services
May-15 Seed 1.9 Delft University of Technology, Endowment Arm; Buysse & Partners Invest
Integrated genomics analytics platform
May-15 - - Individual investor Patient-oriented engagement solution for diabetes management
May-15 - 10.0 - Online platform for medical and dental appointment scheduling
May-15 Series A 7.2 QUALCOMM Ventures; Mangrove Capital Partners; Innovation Capital; ABRT Venture Fund; TA Ventures; Maya Capital LLP
Online platform for private and public healthcare appointment booking
May-15 - - NorthCap Partners Image analysis and stereology software for the biopharma industry
May-15 Venture 3.9 XLHealth Mobile telemedicine application for video healthcare consultations
May-15 - - Parkwalk Advisors Late phase clinical trial design, data capture and management software
Apr-15 Venture 5.2 Den Danske Forskningsfond; RusBio Ventures Tech-enabled MRI utilisation services for clinical trials
Apr-15 Venture 1.1 Individual investors DNA analysis software for laboratories and biopharma
Apr-15 Venture 5.3 Prime Ventures Healthcare information exchange software for clinical information sharing
HealthTech: Selected European Fundraisings in Q2 2015
19 Sources: Capital IQ and Results analysis
Operating Metrics Valuation Metrics
Price % of 52 Market Total Net Enterprise Revenue Rev. Growth Gross Margin Revenue EBITDA
Company (30-Jun-15) Week High Cap Cash Debt Value CY2015 CY15-16 Historical CY2015 CY2016 CY2015 CY2016 CY2015 CY2016
Generalists with significant HealthTech exposure
Oracle 40.30 86% 179,559 54,368 (11,975) 167,584 38,517 2.6% 60.7% 44.7% 46.6% 4.4 x 4.2 x 9.7 x 9.1 x
EMC 26.39 85% 51,799 6,450 600 52,399 25,617 5.9% 62.4% 26.4% 27.1% 2.0 x 1.9 x 7.7 x 7.1 x
SAP 70.00 89% 85,510 4,959 6,324 91,833 22,631 5.3% 72.2% 34.0% 34.3% 4.1 x 3.9 x 12.0 x 11.3 x
Thermo Fisher Scientific 129.76 93% 52,265 873 13,997 66,262 16,765 4.2% 46.2% 25.4% 26.4% 4.0 x 3.8 x 15.6 x 14.4 x
Computer Sciences Corporation 65.64 90% 9,157 2,098 599 9,756 11,864 (0.5%) 24.1% 14.9% 18.1% 0.8 x 0.8 x 5.5 x 4.6 x
Thomson Reuters 38.12 90% 29,951 1,032 8,170 38,121 9,918 3.0% 28.0% 28.0% 29.2% 3.1 x 3.0 x 11.0 x 10.2 x
Aspen Technology 45.55 96% 3,921 216 (216) 3,705 458 9.1% 81.6% 45.4% 45.3% 8.1 x 7.4 x 17.9 x 16.4 x
25th percentile 2.8% 37.1% 25.9% 26.7% 2.6 x 2.5 x 8.7 x 8.1 x
Median 4.2% 60.7% 28.0% 29.2% 4.0 x 3.8 x 11.0 x 10.2 x
75th percentile 5.6% 67.3% 39.3% 39.8% 4.2 x 4.0 x 13.8 x 12.8 x
Healthcare IT - Europe
CompuGroup Medical 34.89 96% 1,735 28 361 2,096 613 9.2% 33.9% 22.0% 23.6% 3.4 x 3.1 x 15.5 x 13.3 x
Cegedim 42.17 97% 589 19 587 1,176 574 2.2% 46.2% 18.9% 19.8% 2.0 x 2.0 x 10.8 x 10.1 x
EMIS Group 14.50 92% 915 7 26 941 250 6.5% 48.2% 30.5% 30.8% 3.8 x 3.5 x 12.3 x 11.5 x
NoemaLife 6.46 91% 49 6 38 87 119 12.8% 22.4% 19.2% 19.6% 1.0 x 0.9 x 5.4 x 4.7 x
Servelec Group 4.78 93% 335 6 0 335 104 7.9% 45.3% 24.6% 25.3% 3.2 x 3.0 x 13.1 x 11.8 x
Craneware 10.34 95% 280 36 (36) 244 50 8.2% 90.5% 30.4% 30.7% 4.9 x 4.5 x 16.1 x 14.8 x
25th percentile 6.8% 36.7% 19.9% 20.7% 2.3 x 2.2 x 11.2 x 10.5 x
Median 8.0% 45.7% 23.3% 24.4% 3.3 x 3.1 x 12.7 x 11.6 x
75th percentile 8.9% 47.7% 28.9% 29.3% 3.7 x 3.4 x 14.9 x 12.9 x
Healthcare IT - US
McKesson 224.81 92% 52,878 5,341 5,973 58,851 186,896 5.6% 6.3% 2.6% 2.8% 0.3 x 0.3 x 12.2 x 10.6 x
Cerner 69.06 91% 24,798 684 (58) 24,740 4,950 20.7% 84.5% 32.7% 34.2% 5.0 x 4.1 x 15.3 x 12.1 x
IMS Health 30.65 95% 10,279 639 3,323 13,602 2,913 9.7% 53.4% 31.3% 31.9% 4.7 x 4.3 x 14.9 x 13.4 x
Allscripts Healthcare Solutions 13.68 80% 2,576 88 484 3,060 1,399 5.4% 45.5% 16.8% 18.7% 2.2 x 2.1 x 13.0 x 11.1 x
athenahealth 114.58 75% 4,509 61 205 4,714 918 21.2% 59.8% 18.1% 17.8% 5.1 x 4.2 x 28.4 x 23.8 x
MedAssets 22.06 86% 1,343 19 857 2,200 760 4.8% 76.1% 30.5% 30.7% 2.9 x 2.8 x 9.5 x 9.0 x
Quality Systems 16.57 88% 999 131 (131) 869 517 6.7% 54.6% 14.1% 15.8% 1.7 x 1.6 x 11.9 x 9.9 x
Inovalon Holdings 27.90 83% 4,120 793 (498) 3,622 438 21.2% 68.8% 37.0% 38.0% 8.3 x 6.8 x 22.4 x 18.0 x
Merge Healthcare 4.80 77% 470 25 255 725 249 9.1% 60.8% 20.9% 22.7% 2.9 x 2.7 x 14.0 x 11.8 x
Healthstream 30.42 94% 962 64 (36) 926 204 15.7% 56.6% 14.2% 16.5% 4.5 x 3.9 x 32.0 x 23.7 x
Computer Programs & Systems 53.42 80% 605 41 (41) 564 197 6.8% 45.9% 24.5% 26.3% 2.9 x 2.7 x 11.7 x 10.2 x
Evolent Health 19.50 98% 1,150 220 (203) 947 157 34.8% 27.5% (26.3%) (14.5%) 6.0 x 4.5 x n.m. n.m.
Castlight Health 8.14 49% 763 186 (186) 578 76 56.1% 39.1% (90.8%) (44.0%) 7.6 x 4.9 x n.m. n.m.
25th percentile 6.8% 45.8% 14.2% 16.4% 2.9 x 2.7 x 12.2 x 10.4 x
Median 12.7% 55.6% 19.5% 20.7% 4.6 x 4.0 x 14.4 x 11.9 x
75th percentile 21.2% 62.8% 30.7% 31.0% 5.4 x 4.3 x 20.6 x 16.8 x
Biopharma IT
Medidata Solutions 54.32 92% 3,085 298 (54) 3,031 403 19.2% 74.7% 23.3% 24.8% 7.5 x 6.3 x 32.3 x 25.5 x
Veeva Systems 28.03 83% 3,693 429 (429) 3,264 390 23.6% 62.9% 29.2% 29.9% 8.4 x 6.8 x 28.7 x 22.7 x
Instem 3.21 94% 40 2 - 28 22 8.7% 14.8% 16.6% 18.3% 1.7 x 1.5 x 10.1 x 8.4 x
25th percentile 14.0% 38.9% 20.0% 21.5% 4.6 x 3.9 x 19.4 x 15.6 x
Median 19.2% 62.9% 23.3% 24.8% 7.5 x 6.3 x 28.7 x 22.7 x
75th percentile 21.4% 68.8% 26.3% 27.3% 7.9 x 6.5 x 30.5 x 24.1 x
EBITDA Margin
HealthTech: Selected Publicly Traded Companies
20
Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 20x EV / Revenue and 50x EV / EBITDA; Net debt includes minority interest Note:
(1)McKesson excluded from ‘Healthcare IT – US’ summary analysis above because majority of revenue is generated from pharmaceutical distribution
Note: (2)
Evolent Health current EV adjusted to reflect additional cash from IPO not accounted for in most recent Balance Sheet Source: Capital IQ
(1)
(2)
27 Soho Square, London, W1D 3AY
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www.resultsig.com
Chris Lewis
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Di: +44 (0) 20 7514 8236
21
Richard Latner
Manager
Di: +44 (0) 20 7514 8241
Disclaimer:
This document has been produced by Results International Group LLP (“Results”) and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein and, accordingly, none of Results’ officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.
Authorised and regulated by the Financial Conduct Authority.
Contact Us
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Partner
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Deep domain expertise in three inter-related sectors… … and broad industry networks
A market-leading corporate finance advisory firm…
• 40 person team; 250+ completed transactions
• Broad global network
• Creative solutions
• Senior level focus on every transaction
• Founded in 1991
• Entrepreneurial and owner-managed
…with global reach
23
About Results International
Results International Global Cyber Security Indices
Note: Based on share prices as at 30th June 2015 Note: Indices weighted by market capitalisation Sources: Capital IQ and Results analysis 24
60
80
100
120
140
160
180
200
220
Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15
Broadline Endpoint Network Data Monitoring & Analysis Global Security NASDAQ Comp
38.8%
27.8%
13.1%
41.8%
2.1%
31.1%
41.1%
Q2 2015 Performance
Broadline 0.4%
Endpoint 10.1%
Network 7.5%
Data 24.7%
Monitoring & Analysis (6.7%)
Global Security 7.4%
(1.3%)
3.6%
23.6%
14.6% 14.6%
(35.6%)
n.a. 0.2%
(4.7%)
20.0% 17.5%
4.4%
17.6%
5.4%
(2.4%)
22.2%
55.7%
6.6%
52.6%
(13.6%)
(60.0%)
(40.0%)
(20.0%)
0.0%
20.0%
40.0%
60.0%
80.0%
Cyber Security: Share Price Performance
Note: Share price performance as at 30th June 2015 Sources: Capital IQ and Results analysis
25
Broadline Endpoint Network Data
Monitoring &
Analysis
Q2
-20
15
Last
12 M
on
ths
1.5%
25.6% 35.2%
n.a.
22.2%
(37.9%)
n.a.
27.7% 18.7%
(44.9%)
64.5%
8.0%
108.3%
31.6%
2.0%
20.6%
158.6%
70.0%
(7.1%)
57.2%
(100.0%)
(50.0%)
0.0%
50.0%
100.0%
150.0%
200.0%
Company IPO
Date Description Raised
Indicative Price
Range ($)
IPO Price
($)
Increase vs.
range
Day 1
Increase
Current
Increase(1)
Current
EV
EV / Revenue
2015E
EV / EBITDA
2015E
Jun-15 Antivirus and network
security 552 n.a. 3.54 n.a. 7.4% 4.1% 1,925 n.a. n.a.
Sep-14 Privileged account
security 86 13.00-15.00 16.00 14.3% 87.1% 292.6% 2,072 14.7 x n.m.
Jun-14 Mobile security and
management 100 8.00-10.00 9.00 0.0% 22.4% (34.3%) 373 2.6 x n.m.
Nov-13 Network security and data storage
64 18.00-21.00 18.00 (7.7%) 19.7% 120.1% 2,008 6.3 x 24.9 x
Sep-13 Forensics and
malware protection 304 15.00-17.00 20.00 25.0% 80.0% 144.6% 7,988 12.7 x n.m.
Sep-12 Cloud security and
compliance 91 11.00-13.00 12.00 0.0% 18.0% 236.3% 1,436 8.7 x 32.0 x
Jul-12 Firewalls and network
security 260 38.00-40.00 42.00 7.7% 26.5% 316.0% 15,310 14.8 x n.m.
Apr-12 Communication
security 82 10.00-12.00 13.00 18.2% 8.3% 389.8% 2,759 10.9 x n.m.
Feb-12 Antivirus and anti-
spyware 128 16.00-18.00 16.00 (5.9%) (18.8%) 70.1% 1,541 3.6 x 10.6 x
Cyber Security: Recent IPO Performances
26
Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 20x EV / Revenue and 50x EV / EBITDA Note: (1) Current increase from IPO price; Market data as of 30th June 2015 Source: Capital IQ
Nasdaq
Nasdaq
Nasdaq
Nasdaq
NYSE
NYSE
NYSE
Nasdaq
LSE
Cyber Security: Valuation Benchmarks
27
EBITDA Margin 2015E EV / EBITDA 2015E
Revenue Growth (2015-16E) EV / Revenue 2015E
Note: EV = Enterprise Value; financials calendarised to December year end
Note: Median values reported; excludes negative multiples
Note: See Selected Publicly Traded Companies (Slide 9) for details of companies included in each category
Source: Capital IQ
1.4%
17.8%
14.5%
26.3%
14.7% 16.8%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Broadline Endpoint Network Data Monitoring &
Analysis
Global
Security
2.9 x 3.1 x
5.2 x
10.9 x
5.4 x
4.1 x
0.0 x
2.0 x
4.0 x
6.0 x
8.0 x
10.0 x
12.0 x
Broadline Endpoint Network Data Monitoring &
Analysis
Global
Security
33.6%
18.9% 20.6%
(7.1%)
14.5%
19.5%
(10.0%)
(5.0%)
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Broadline Endpoint Network Data Monitoring &
Analysis
Global
Security
8.7 x
11.4 x
16.5 x
n.m.
32.0 x
12.3 x
0.0 x
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
Broadline Endpoint Network Data Monitoring &
Analysis
Global
Security
Cyber Security: Global M&A Activity
28 Sources: Press Releases, Capital IQ, Mergermarket and Results analysis
26 26 26 27
23 23
32
24
15
31
25
22
32
28 27
22
34 33
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
0
5
10
15
20
25
30
35
40
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015
Tota
l D
isc
lose
d D
ea
l V
alu
e (
$m
)
Nu
mb
er
of D
ea
ls
No. of Deals Total DisclosedDeal Value
Cyber Security: Selected Deals in Q2 2015
Date Buyer Target EV ($m) EV /
Revenue EV /
EBITDA Company description
Target Location
Jun-15 635 - - Cloud-delivered network security and intelligence
Jun-15 - - - Cybersecurity anomaly detection and predictive analytics
Jun-15 165 - - Cybersecurity provider to U.S federal government
Jun-15 - - - Cloud-based email security for managed service providers
Jun-15 20 5.0x - Intelligent identity management application developer
Jun-15 16 1.9x - Vulnerability assessment and penetration testing
Jun-15 - - - Interactive application security testing
May-15 - - - Cloud application control and threat management
May-15 - - - Advanced identity governance and administration solutions
May-15 40 2.0x - Mobile virtual private network provider (VPN)
May-15 - - - Web and mobile application penetration testing
Apr-15 150 5.0x - Enterprise identity and access management
Apr-15 - - - Document control, tracking and protection solutions
Apr-15 1,300 3.5x(1)
- Web filtering and data theft prevention
Apr-15 850 3.9x 65.6x Data security and compliance management solutions
Apr-15 80 - - Mobile threat management platform
Apr-15 - - - Cloud-based mobile authentication startup
29
(1): Multiple of CY2015 projected revenues, as per Raytheon conference call on 20/04/15 Note: Enterprise value (EV) = transaction value scaled to 100% shareholding plus net debt (includes minority interest) Financials relate to the companies’ full fiscal year before the transaction took place Sources: Press releases, Capital IQ, Mergermarket, 451 Research and Results analysis
Cyber Security: Selected Fundraisings in Q2 2015
Date Company Type of round Funds
raised ($m) Investor participation Company description
Company headquarters
Jun-15 Series B 21.0 Bessemer Venture Partners, Foundry Group, TechStars, ff Venture Capital, Idea Fund, Correlation Ventures
Bot detection and mitigation platform
Jun-15 Venture 39.0 QuestMark Partners, Intel Capital, Foundation Capital, Silver Lake Next-generation trust protection platform
Jun-15 Venture 84.0 Insight Venture Partners Application security testing and attack prevention
Jun-15 Series B 23.0 Comcast Ventures, Menlo Ventures, Globespan Capital Partners, Commonwealth Capital Partners, Flybridge Capital Partners
Data security analytics
Jun-15 Series B 25.0 New Enterprise Associates, Benchmark Capital, Private Investors Crowdsourced cybersecurity solutions
Jun-15 Series B 15.0 Kayne Partners, Medina Capital Content encryption and security
solutions
Jun-15 Series B 25.0 Sutter Hill Ventures, Osage Partners, General Catalyst Partners, Engineering Capital
Advanced malware protection
May-15 Venture 14.9 Goldman Sachs, EDB Investments, Siemens Venture Capital, Alcatel-Lucent, Mitsui, Fairhaven Capital, Arsenal Venture Partners
Real-time endpoint threat detection
May-15 Series C 35.0 Cisco, Glynn Capital, Evolution Equity, Lumia Capital, Mohr Davidow Ventures, Northgate, Greylock , Sequoia Capital, Sutter Hill Ventures
Cloud-delivered network security and intelligence
May-15 Venture 24.0 C5 Capital Identity and access management
May-15 Series B 25.0 Spark Capital, Lockheed Martin, CRV Real-time cyberattack detection and response
Apr-15 Series C 30.0 BDS Ventures, Hewlett Packard Ventures, Index Ventures, Rembrandt Venture Partners, Sequoia Capital
Cloud access security
Apr-15 Series C 30.0 Redpoint Ventures, Benchmark Capital, Google Ventures, Radar Partners, True Ventures
Two-factor authentication network security
Apr-15 Series C 100.0 Accel Partners, BlackRock, Andreessen Horowitz, Data Collective, Formation 8, General Catalyst Partners, Valor Capital Group
Enterprise data centre and cloud computing security
Apr-15 Series B 20.0 New Enterprise Associates, Venrock, Index Ventures Threat analytics and forensics
Apr-15 Series B 17.0 August Capital, Engineering Capital, Norwest, Wing Venture Capital Cloud security automation
Apr-15 Series D 25.0 AITV, Cisco Ventures, EPIC Ventures, Fortinet, Granite Ventures, Intel, Trident Capital, Vanedge Capital, VMware
Virtualised infrastructure security
30
Sources: VentureSource, Capital IQ and Results analysis
Price % of 52 Market Total Net Enterprise Revenue Rev. Growth Gross Margin EBITDA Margin
Company (30-Jun-15) Week High Cap Cash Debt Value CY2015 CY15-16 Historical CY2015 CY2016 CY2015 CY2016 CY2015 CY2016
Broadline
Symantec 23.25 85.1% 15,827 3,891 (1,795) 14,032 6,353 (0.7%) 82.3% 32.6% 36.2% 2.2 x 2.2 x 6.8 x 6.1 x
Trend Micro 34.27 92.0% 4,654 955 (955) 3,699 1,009 3.6% 82.3% 34.6% 34.9% 3.7 x 3.5 x 10.6 x 10.1 x
Endpoint
AVG Technologies 27.21 93.5% 1,436 160 105 1,541 433 15.1% 86.1% 33.7% 33.6% 3.6 x 3.1 x 10.6 x 9.2 x
CyberArk 62.82 82.3% 2,264 192 (192) 2,072 141 28.7% 85.7% 16.7% 17.3% 14.7 x 11.4 x n.m. n.m.
F-Secure 3.50 95.4% 551 123 (123) 428 165 6.9% 94.9% 21.1% 22.6% 2.6 x 2.4 x 12.3 x 10.8 x
MobileIron 5.91 45.6% 490 117 (117) 373 145 20.5% 81.8% (41.0%) (19.6%) 2.6 x 2.1 x n.m. n.m.
Sophos 3.68 96.8% 1,656 539 269 1,925 n.a. n.a. 86.0% n.a. n.a. n.a. n.a. n.a. n.a.
Network
Barracuda Networks 39.62 84.7% 2,196 192 (187) 2,008 320 16.8% 78.9% 25.3% 30.1% 6.3 x 5.4 x 24.9 x 17.9 x
Check Point Software 79.55 89.9% 14,799 1,278 (1,278) 13,520 1,625 7.9% 88.2% 56.3% 56.8% 8.3 x 7.7 x 14.8 x 13.6 x
Corero Network Security 0.21 51.9% 25 6 (6) 19 16 40.6% 54.9% 0.6% 9.3% 1.2 x 0.8 x n.m. 8.8 x
Fortinet 41.33 93.7% 7,290 804 (804) 6,486 943 18.3% 70.0% 16.8% 17.8% 6.9 x 5.8 x 41.0 x 32.6 x
F5 Networks 120.35 88.4% 8,665 666 (666) 7,998 1,971 10.4% 82.1% 38.7% 28.6% 4.1 x 3.7 x 10.5 x 12.9 x
Palo Alto Networks 174.70 94.4% 15,558 823 (248) 15,310 1,031 32.1% 73.3% 19.5% 24.6% 14.8 x 11.2 x n.m. 45.7 x
Radware 22.20 89.1% 1,056 77 (77) 979 247 12.2% 81.1% 21.7% 22.3% 4.0 x 3.5 x 18.2 x 15.8 x
Secunet 22.16 89.8% 143 30 (30) 113 92 10.3% 64.3% 10.1% 10.0% 1.2 x 1.1 x 12.2 x 11.1 x
Data
FireEye 48.91 88.4% 8,385 398 (398) 7,988 631 37.2% 58.9% (34.0%) (16.5%) 12.7 x 9.2 x n.m. n.m.
Imperva 67.70 98.1% 2,147 243 (243) 1,905 207 21.5% 77.7% (7.1%) (2.3%) 9.2 x 7.6 x n.m. n.m.
Proofpoint 63.67 93.8% 2,788 194 (29) 2,759 253 26.3% 66.4% 1.1% 6.3% 10.9 x 8.6 x n.m. n.m.
Monitoring & Analysis
Guidance Software 8.47 83.9% 254 24 (24) 230 110 5.3% 66.9% 1.9% 4.6% 2.1 x 2.0 x n.m. 43.4 x
Qualys 40.35 72.7% 1,579 143 (143) 1,436 166 24.2% 78.3% 27.1% 27.8% 8.7 x 7.0 x 32.0 x 25.1 x
25th percentile 84.5% 155 9.1% 69.2% 1.5% 7.8% 2.6 x 2.3 x 10.6 x 10.3 x
Median 89.5% 253 16.8% 80.0% 19.5% 22.3% 4.1 x 3.7 x 12.3 x 13.2 x
75th percentile 93.7% 976 25.2% 83.1% 29.9% 29.3% 8.9 x 7.6 x 21.5 x 23.3 x
Operating Metrics Valuation Metrics
Revenue EBITDA
Cyber Security: Selected Publicly Traded Companies
31
Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 20x EV / Revenue and 50x EV / EBITDA; Net debt includes minority interest Source: Capital IQ
27 Soho Square, London, W1D 3AY
t +44 20 7629 7575 | f +44 20 7629 2233
www.resultsig.com
Chris Lewis
Managing Director
Di: +44 (0) 20 7514 8236
32
Mark Williams
Director
Di: +44 (0) 20 7514 8242
Disclaimer:
This document has been produced by Results International Group LLP (“Results”) and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein and, accordingly, none of Results’ officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.
Authorised and regulated by the Financial Conduct Authority.
Contact Us
588 Broadway, Suite 1010, New York, NY 10012
t +1 646 747 6500
www.resultsig.com
Pierre-Georges Roy
Partner
Di: +1 646 747 6505
Maurice Watkins
Partner
Di: +1 646 747 6500
34
About Results International
Deep domain expertise in three inter-related sectors… … and broad industry networks
A market-leading corporate finance advisory firm…
• 40 person team; 250+ completed transactions
• Broad global network
• Creative solutions
• Senior level focus on every transaction
• Founded in 1991
• Entrepreneurial and owner-managed
…with global reach
70%
75%
80%
85%
90%
95%
100%
105%
110%
115%
120%
Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15
NASDAQ Comp Diversified Internet MarTech Data AdTech
Results International Global AdTech & MarTech Indices
35
10.5%
2.7%
13.1%
5.1%
(23.8%)
Last
12
mo
nth
s sh
are
pric
e p
erf
orm
an
ce
Q2 2015 Performance
MarTech 11.6%
AdTech 3.9%
Diversified Internet 3.1%
Nasdaq Comp 1.8%
Data 0.4%
Jul 14 Aug 14 May 15 Apr 15 Mar 14 Feb 14 Jan 14 Nov 14 Oct 14 Sep 14 Dec 14 Jun 15
Note: Based on share prices as at 30th June 2015 Note: Indices weighted by market capitalisation Sources: Capital IQ and Results analysis
(0.3%)
(57.5%)
41.2%
(13.6%)
(60.5%)
(42.7%)
(55.7%)
(29.7%)
(67.5%)
(17.4%)
(74.1%) (73.6%)
16.5%
(38.3%)
104.1%
(8.1%)
(25.3%)
(34.9%)
(10.4%)
2.5%
98.3%
(3.5%)
0.0%
99.7%
(18.9%)
3.8%
17.3%
(8.0%)
33.7%
20.3% 27.5%
(7.6%)
11.8%
(100%)
(80%)
(60%)
(40%)
(20%)
-
20%
40%
60%
80%
100%
120%
(0.3%) (7.7%)
19.5%
(10.2%)
(55.5%)
8.7%
(43.8%)
(18.9%)
14.9%
4.2%
(19.4%)
(11.3%) (16.8%)
20.2%
3.9% 5.7% 1.6%
(7.9%)
(26.5%)
13.8%
23.5%
7.5% 3.5%
99.7%
(6.4%) (2.7%)
3.4%
(15.1%)
15.9%
4.0% 3.1%
(3.8%)
(12.6%)
(80%)
(60%)
(40%)
(20%)
-
20%
40%
60%
80%
100%
120%
AdTech & MarTech: Share Price Performance
36
AdTech Diversified Internet
Q2
201
5
Last
12 m
on
ths
sh
are
pric
e p
erf
orm
an
ce
MarTech Data
Note: (1) Adgorithms IPO’d on 11th June 2015 and Shopify IPO’d on 20th May 2015, the share price movement represents the change between each stocks respective IPO date and 30th June 2015
Note: (2) 2015E Net Revenue data is unavailable
Note: (3) These companies have IPO’d within the last 12 months, the share price movement represents the change between each stocks respective IPO dates (see slide 4) and 30th June 2015
Note: Based on share prices as at 30th June 2015
Sources: Capital IQ and Results analysis
EV/2015E Net
Revenue - 0.7x - 1.7x 1.9x
(1)
1.7x 2.1x 1.4x 1.4x 2.8x 1.3x 6.1x 1.6x 2.1x 1.5x 2.1x 11.2x 5.6x 10.1x 11.5x 1.8x 4.9x 4.4x 2.0x 2.0x 3.8x 5.9x 7.5x 13.5x 7.9x 2.5x 2.6x (2)
(3)
18.5x (2)
(1)
(3) (3) (3)
(3) (3) (3)
(3)
AdTech & MarTech: Selected Stocks – Performance Since IPO
37
Company IPO date Description Raised
($) Indicative price
range ($)
IPO listing
price ($)
Day 1
increase
Current
increase(1)
Current
EV ($)
EV / Net
Revenue
2015E
EV / EBITDA
2015E
Jun-15 AI ad optimisation 42 n.a. 2.1 4.2% (0.3%) 83 n.a. n.a.
May-15 eCommerce platform 131 12.0-14.0 17 51.1% 99.7% 2,954 18.5x n.m.
Mar-15 Localised ad targeting 75 10.5-12.5 11.5 (15.1%) (29.7%) 174 1.9x n.m.
Oct-14 Marketing automation 125 22.0-24.0 25.0 20.4% 98.3% 1,687 10.1x n.m.
Sept-14 Multi-channel ad
server 75 n.a. 1.7 0.8% (13.6%) 151 n.a. n.a.
Jul-14 Programmatic video
DSP 44 7.0-8.0 7.0 64.3% 104.1% 493 6.1x n.m.
Jul-14 Multi-channel ad
network 70 n.a. 3.9 4.4% (55.7%) 167 2.6x 14.9x
Apr-14 SSP 102 15.0-17.0 15.0 33.9% (0.3%) 572 2.8x 22.1x
Nov-13 Multi-channel network 33 n.a. 1.0 20.0% (76.1%) 38 1.4x n.m.
Oct-13 DSP focused on
retargeting 251 27.0-29.0 31.0 14.2% 53.8% 2,671 7.9x 37.7x
Sep-13 DSP 116 27.0-29.0 29.0 93.4% (71.7%) 338 1.4x n.m.
Aug-13 Video ad network 46 12.0-14.0 9.0 0.0% (39.8%) 136 1.6x n.m.
Nasdaq
LSE
NYSE
AIM
Nasdaq
Nasdaq
NYSE
AIM
NYSE
AIM
NYSE
Note: (1) Current increase from IPO price; Market data as of 30th June 2015 Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 20x EV / Revenue and 60x EV / EBITDA Sources: Capital IQ and Results analysis
NYSE
1.8 x
7.9 x
3.2 x
5.9 x
2.5 x
-
1.0 x
2.0 x
3.0 x
4.0 x
5.0 x
6.0 x
7.0 x
8.0 x
9.0 x
AdTech MarTech Data Diversified Internet Global AdTech/
MarTech
30.0% 30.3%
3.8%
13.3%
22.4%
-
5%
10%
15%
20%
25%
30%
35%
AdTech MarTech Data Diversified Internet Global AdTech/
MarTech
AdTech & MarTech: Valuation Benchmarks
38
Revenue growth (2015-16E) EV / Net Revenue 2015E
(1) (1)
Note: (1) Global AdTech / MarTech represents the average of all stocks in AdTech, MarTech, Data & Diversified Internet, with no weighting applied Note: EV = Enterprise Value; Financials calendarised to December year end Note: Median values reported Note: See Selected Publicly Traded Companies (Slide 9) for details of companies included in each category Source: Capital IQ & analyst reports
54
43
74
52
108
101
113
106
98 101
-
$1bn
$2bn
$3bn
$4bn
$5bn
$6bn
$7bn
$8bn
$9bn
0
20
40
60
80
100
120
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015
Tota
l dis
clo
sed
de
al v
alu
e (
$b
n)
Nu
mb
er o
f d
ea
ls
Number of deals Total disclosed deal value ($bn)
AdTech & MarTech: Global M&A Activity Q1 2013 – Q2 2015
39
Note: (1) Q3 2014 data includes Alliance Data’s acquisition of Conversant ($2.2bn) Note: (2) Q2 2015 data includes Verizon’s acquisition of AOL ($4.3bn) Sources: Press Releases, Capital IQ, Mergermarket, 451 Research and Results analysis
(1) (2)
AdTech & MarTech: Selected Deals in Q2 2015
Date Buyer Target EV ($m) EV / Revenue Company description Target location
Jun 15 - - Media logistics & workflow software
Jun 15 720 - Campaign management and optimisation stack
Jun 15 295 - Mobile ad network
Jun 15 132 - Mobile ad network
Jun 15 - - Targeted TV SSP
May 15 43 1.6x Ad server & search retargeting
May 15 12 1.1x Mobile DSP
May 15 50 - Social media advertising
May 15 4,135 2.3x Online publisher and full ad tech stack
May 15 26 4.2x eCommerce marketing platform
May 15 - - DMP
May 15 - - PPC optimisation
Apr 15 - - Targeted creative dynamic optimisation
Apr 15 533 - Predictive cross-device retargeting
Apr 15 120 - mCommerce platform
Apr 15 200 - eCommerce marketing automation
Apr 15 22 3.1x Mobile ad tracking
Apr 15 10 2.0x Social CRM
40
(1)
Note: (1) In certain cases EV/Revenue are publically reported estimates; TTM net revenues have been used where possible (gross revenues minus TAC generated in the last 12 months); EV = transaction value scaled to 100% shareholding plus net debt (incl. minority interest) Sources: Press Releases, Capital IQ, Mergermarket, PitchBook, 451 Research and Results analysis
AdTech & MarTech: Selected Fundraisings in Q2 2015
41 Note: (1) round reported to be split between debt and equity
Source: Press Releases, Capital IQ, Mergermarket, PitchBook and Results analysis
Date Company Type of round Funds
raised ($m) Investor participation Company description
Company headquarters
Jun 15 Series B 20 Advance Vixeid Partners (lead investor), RezVen Partners and existing investors
Native SSP
Jun 15 - 54 Harmony Partners (lead investor), Industry Ventures, DFJ Esprit, Trinity Ventures, Crosslink Capital and Adams Street Partners
DSP
Jun 15 Series B 13 Smedvig Capital (lead investor), Panoramic Growth Equity Search retargeting
Jun 15 Series A 12 Softbank Capital and Google Ventures Predictive eCommerce targeting
Jun 15 Series D 33 FTV Capital (lead investor), Battery Ventures, First Round Capital and Shasta Ventures
Targeted in-email advertising
Jun 15 Series B 11 Edison Partners (lead investor), NextView Ventures, Laconia Capital Group, iNovia Capital and True Ventures
Native ad network and exchange
Jun 15 Series D 21 Ares Capital Corporation (lead investor), Vision Private Equity, Verlinvest, Syngenta Ventures and Unilever Ventures
Mobile marketing CRM
Jun 15 Series A 8 Entrepreneur Venture and Bpifrance Mobile DSP
May 15 Series D 74 Vitruvian Partners (lead investor), Seed Capital, Northzone, Index
Ventures and DFJ Esprit eCommerce review community
May 15 Series C 26 Morgan Stanley Expansion Capital (lead investor), First Round Capital, Upfront Ventures and New Enterprise Associates
In-image advertising
May 15 - 25 Edison Partners (lead investor), Charles River Ventures, the Honeywell
pension ORIX Ventures and private investors Search retargeting
May 15 Series B 30 Neuberger Berman Digital media planning & management
May 15 Series B 22 Insight Venture Partners (lead investor) and Madrona Venture Group TV ad measurement
May 15 Series C 40 Lightspeed Venture Partners (lead investor), Lerer Hippeau Ventures, First Round Capital, GGV Capital and Sequoia Capital
Marketing management
May 15 Series B-2 19 Blue Cloud Ventures, Zanadu Capital Partners, Silicon Valley Bank, Knight Enterprise Fund, G&H Partners, FirstMark Capital, Firsthand Technology Value Fund and Avalon Ventures
Cross-device DSP
May 15 Series A 22 AVAST Software Marketing analytics
May 15 Series C 100 SoftBank (lead investor) and BlueRun Ventures Real-time social media discovery
Apr 15 Series A 5 Dawn Capital (lead investor), Northzone and Conor Ad viewability
(1)
(1)
AdTech & MarTech: Selected Publicly Traded Companies
42
Sources: Capital IQ, market data as of 30 June 2015. Note: Calendarised to December year end. Cap multiple at 20x EV/Revenue and 60x EV/EBITDA. Net debt is inclusive of minority interest and preferred equity. Net revenues have been
used where appropriate. Broker reports have been used for selected company financials: Numis (May-15) for Blinkx, Jefferies (Jun-15) for Criteo, N+1 Singer (Jun-15) for Marimedia, Canaccord Genuity (Apr-15) for Matomy Media, William Blair
(Jun-15) for MaxPoint Interactive, Evercore (Sep-14) for Millennial Media, Cenkos (May-15) for Rightster, BMO Capital Markets (May-15) for Rocket Fuel, Jefferies
(May-15) for Tremor Video, BMO Capital Markets (May-15) for TubeMogul, Deutsche Bank (May-15) for YuMe, RBC Capital Markets (May-15) for Google and Oppenheimer (May-15) for Yahoo!
Valuation Metrics Operating Metrics
Price % of 52 Market Net Enterprise Net Revenue EBITDA Revenue Growth EBITDA Margin
Company (30-Jun-15) Week High Cap Debt Value CY2015 CY2016 CY2015 CY2016 CY14-15 CY15-16 CY2015 CY2016
AdTech
Adgorithms LTD 2.06 92.9% 127 (44) 83 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Blinkx plc 0.42 39.9% 171 (96) 75 0.7 x 0.8 x 6.0 x 19.4 x (14.6%) (11.1%) 12.2% 4.3%
Criteo SA 47.67 92.7% 2,979 (308) 2,671 7.9 x 5.2 x 37.7 x 23.5 x 69.6% 51.0% 20.9% 22.3%
Crossrider Plc 1.45 81.2% 227 (76) 151 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Marimedia Ltd. 0.99 35.6% 69 (25) 44 2.5 x 1.8 x 11.2 x 4.5 x (7.9%) 40.0% 22.3% 40.0%
Marin Software Incorporated 6.74 55.5% 244 (49) 194 1.7 x 1.4 x n.m. n.m. 15.5% 17.0% (10.7%) (1.3%)
Matomy Media Group Ltd. 1.72 43.0% 161 6 167 2.6 x 2.4 x 14.9 x 6.8 x 20.3% 6.0% 17.3% 35.8%
MaxPoint Interactive, Inc. 8.08 71.9% 211 (37) 174 1.9 x 1.4 x n.m. n.m. 49.1% 37.3% (21.3%) (16.6%)
Millennial Media Inc. 1.62 32.4% 227 (32) 195 1.7 x 1.3 x n.m. n.m. 12.5% 23.6% (31.5%) (7.9%)
Opera Software ASA 8.58 63.9% 1,268 17 1,286 2.1 x 1.7 x 10.4 x 7.9 x 28.9% 25.5% 19.9% 20.9%
Rightster Group Plc 0.23 23.6% 51 (13) 38 1.4 x 1.0 x n.m. n.a. 89.7% 40.0% (47.9%) 0.0%
Rocket Fuel Inc. 8.20 26.2% 346 (8) 338 1.4 x 1.2 x n.m. n.m. 71.7% 22.4% (15.5%) (8.9%)
The Rubicon Project, Inc. 14.96 72.7% 693 (120) 572 2.8 x 2.1 x 22.1 x 13.5 x 63.5% 33.4% 12.7% 15.5%
Tremor Video, Inc. 2.91 60.1% 150 (75) 75 1.3 x 0.9 x n.m. n.m. 7.3% 39.0% (28.6%) (12.5%)
TubeMogul, Inc. 14.29 60.0% 529 (36) 493 6.1 x 4.4 x n.m. n.m. n.a. 40.6% (1.2%) (21.1%)
YuMe, Inc. 5.42 83.3% 181 (45) 136 1.6 x 1.4 x n.m. n.m. 20.1% 13.2% (3.6%) (5.2%)
MarTech
Bazaarvoice, Inc. 5.89 62.7% 472 (50) 422 2.1 x 1.9 x n.m. 57.0 x 9.5% 10.8% (3.4%) 3.3%
Brightcove Inc. 6.86 62.8% 223 (21) 202 1.5 x 1.4 x 36.9 x 23.8 x 7.8% 8.7% 4.1% 5.8%
Constant Contact, Inc. 28.76 66.6% 962 (179) 783 2.1 x 1.8 x 10.6 x 8.5 x 13.0% 15.3% 19.7% 21.4%
Demandware, Inc. 71.08 96.8% 2,802 (189) 2,613 11.2 x 8.4 x n.m. n.m. 45.6% 33.3% 4.6% 6.9%
HubSpot, Inc. 49.58 90.3% 1,823 (136) 1,687 10.1 x 7.9 x n.m. n.m. 44.1% 28.5% (14.6%) (11.8%)
Marketo, Inc. 28.06 78.8% 1,274 (97) 1,177 5.6 x 4.2 x n.m. n.m. 39.5% 32.5% (12.3%) (8.6%)
New Relic, Inc. 35.19 91.0% 1,898 (201) 1,698 11.5 x 8.6 x n.m. n.m. 49.3% 34.1% (26.4%) (11.7%)
Shopify Inc. 33.95 80.6% 3,057 (103) 2,954 18.5 x 13.9 x n.m. n.m. 52.2% 33.0% (4.8%) (2.3%)
Data
Acxiom Corporation 17.58 78.8% 1,386 147 1,533 1.8 x 1.8 x 11.3 x 10.1 x (15.3%) (1.4%) 15.6% 17.6%
Alliance Data Systems Corporation 291.94 93.6% 18,157 13,639 31,796 4.9 x 4.3 x 16.6 x 14.6 x 23.4% 12.0% 29.2% 29.7%
Experian plc 18.23 91.7% 17,575 3,281 20,856 4.4 x 4.2 x 12.8 x 12.0 x (1.0%) 4.6% 34.2% 35.0%
Teradata Corporation 37.00 78.7% 5,493 (281) 5,212 2.0 x 1.9 x 7.7 x 7.3 x (2.7%) 2.6% 25.3% 26.0%
Diversified Internet
Amazon.com Inc. 434.09 95.9% 202,321 3,250 205,571 2.0 x 1.7 x 22.7 x 17.6 x 16.0% 18.0% 8.8% 9.6%
eBay Inc. 60.24 95.2% 73,442 (2,016) 71,426 3.8 x 3.5 x 12.3 x 11.2 x 4.7% 10.4% 31.0% 30.9%
Facebook, Inc. 85.77 95.9% 241,900 (12,227) 229,673 13.5 x 10.1 x 22.0 x 16.5 x 36.6% 33.4% 61.4% 61.2%
Google Inc. 540.04 88.7% 370,878 (57,734) 313,144 5.9 x 5.2 x 14.2 x 13.0 x 22.1% 13.3% 41.6% 40.1%
Yahoo! Inc. 39.29 74.7% 37,063 (4,054) 33,009 7.5 x 7.9 x 44.0 x n.m. (0.6%) (5.1%) 17.0% 11.5%
25th percentile 1.7 x 1.4 x 11.2 x 8.5 x 7.4% 10.6% (11.5%) (6.5%)
Median 2.5 x 1.9 x 14.2 x 13.0 x 20.2% 22.4% 8.8% 6.9%
75th percentile 6.0 x 4.8 x 22.1 x 17.6 x 45.2% 33.4% 20.4% 24.2%
43
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