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