World tech M&A report

1. WORLD TECH
M&A REPORT
2017
www.corumgroup.com

2. “These days, investors really do come in all sizes, shapes
and forms. It’s important to find the right cultural fit
for your style and needs.”
RENÉ YANG
VISTA EQUITY PARTNERS
2 corumgroup.com WORLD TECH M&A REPORT 2017
2017 promises to be
the best year ever for
tech M&A, due to a
record $4+ trillion
cash in buyer coffers,
hot financial markets,
low-cost debt and
many new global
buyers—all creating a
strategic imperative to
acquire, in order to stay
competitive and ahead of the trends. Speaking
of trends, there are three new categories in
Corum’s Top Ten Disruptive Trends—Visual
Intelligence Systems, Data Science Monetization
and Focused IT Services—as described in this
report by our senior dealmakers globally.
This report profiles all 30 market sectors covered
by our research staff, including key deals and
valuation metrics, plus our annual report on top
buyers, financial trends and the Corum Index on
tech M&A metrics.
Special thanks to our international luminary
panelists for their insights and contribution to
this year’s report: Peter Coffee from Salesforce,
Reese Jones from Singularity University, Henry
Hu from IBM and Dr. Karl Popp from SAP in
Germany. Our Private Equity panel includes
industry leaders René Yang from Vista Equity
(top overall acquirer for the past two years),
Michael Libert from TA Associates, and Maurice
Hernandez in London for Accel-KKR.
We invite you to join us online for the latest
sector valuation updates on the second
Thursday of each month, and at one of our
150 live tech M&A seminars held in every major
city, as profiled in the back of this report. These
conferences and workshops are for sellers—the
bettereducatedyouareontheprocess,thegreater
your chances to achieve an Optimal Outcome.
Bruce Milne
Conference Chair
Data for this report was compiled by Corum Group, the
world’s leading seller of privately held software, Internet,
IT and related companies. For further information, please
contact Elon Gasper, EVP, Research at +1 425 455 8281 or
elong@corumgroup.com.
© 2017 Corum Group Ltd. All Rights Reserved.
PRIVATE EQUITY PANEL
LUMINARY PANEL
Our thanks to our luminary panelists who took part in “Forecast 2017:
Global Tech M&A.” For more of their thoughts on the technology
landscape, view the original webcasts at corumgroup.com.
REESE JONES, SINGULARITY UNIVERSITY
“Language understanding needs continuous updating
of context… Unless the body of data that the AI is
recognizing from is continuously updated, it becomes
out of date pretty quickly.”
DR. KARL POPP, SAP
“There are many opportunities for AI combined with
enterprise applications, with digital assistants and
recommendation functionalities, along with analytics.”
PETER COFFEE, SALESFORCE
“The ten trends discussed here today are well-founded
predictions and people will do well to rely on them...
Every one of those trends is enabled by massive,
pervasive, 24/7, increasingly personal connection.”
HENRY HU, IBM
“To help your company and your clients grow and
succeed, I would suggest that you and your clients start
experimenting with some of these trends, proving the
concept and piloting it before broad adoption.”
“SaaS companies are penetrating markets that have
historically favored keeping their data in-house, but
today are much more willing to leverage the cloud.”
MAURICE HERNANDEZ
ACCEL-KKR
“To us, a great business is one that is capital efficient,
one that is delivering great results on their investments,
whether that is growth or profitability.”
MICHAEL LIBERT
TA ASSOCIATES
2017 – ANOTHER RECORD YEAR?

3. Technology companies considering an exit
cannot ignore the disruptive technologies
changing lives and transforming markets.
Even the largest firms must adapt to these
trends or fall behind. No company has
the foresight to always lead the innovation
curve, so the most successful acquire the
pioneering companies with the expertise to
help them continue that disruptive success.
Each year, Corum composes a list of the
key trends driving tech M&A, drawn from
transactions in every sector, spanning
hundreds of events, global reports and
information from conversations with all of
the buyers. 2017 has produced a particularly
instructive set, described below.
3corumgroup.comWORLD TECH M&A REPORT 2017
PUBLIC MARKETS REBOUND TO NEW HIGHS
A short correction early last year reset some overextended
SaaS valuations. Then, the major indices rebounded, capped
by a post-election rally hitting many new highs by mid-
December. The Dow rose 13%, NASDAQ was up 8% and
the S&P Technology Index netted 5% growth over the course
of the year. This marks the seventh year for this long-running
bull market. Underlying trends and momentum continue to
support tech M&A, with highly favorable conditions for sellers.
“YEAR OF THE MEGADEAL”
The Corum Index Market metrics spotlighted a record year of
$1B+ megadeals as buyers focused on opportunities to “move
the needle” and keep up with the fierce pace of change.
Though that and supply issues held back the overall 2016 deal
numbers, it set up the 2017 market to produce a “megadeal
echo” with a wave of demand for bolt-on, tuck-in and
competitive response follow-up acquisitions to round out the
big transactions: filling gaps, patching holes and shaking out
even more new buyers.
Pipeline metrics recorded PE deal flow, reflecting the great
shift there away from the industry’s roots in old-line financial
engineering toward tech-based strategic maneuver.
CORUM TOP
TEN DISRUPTIVE
TECHNOLOGY
TRENDS 2017
ONLINE
EXCHANGES
CONNECTING
CREATORS &
CONSUMERS
DIGITAL
CURRENCY FLOW
DECREASING FRICTION
IN PAYMENTS &
EXCHANGES
CONNECTED
HEALTH
LINKING PEOPLE TO
THEIR HEALTH DATA &
SERVICES
OMNICHANNEL
SALES
PURCHASING
DECISIONS ANYWHERE,
ANY PLATFORM
IOT
SOFTWARE
EMERGING PLATFORMS,
STANDARDS &
ANALYTICS
FOCUSED IT
SERVICES
DIFFERENTIATION DRIVES
NEW VALUE IN A SLEEPY
SECTOR
AI
ENABLEMENT
PUTTING AI TO WORK BY
MEANS OF BIG DATA &
FEEDBACK
VISUAL INTELLIGENCE
SYSTEMS
INTERSECTION OF AI,
COMPUTER VISION &
ANALYTICS
DATA SCIENCE
MONETIZATION
MAXIMIZING RETURN
WITH REAL-TIME
ANALYTICS
DATA
SECURITY
BUILDING BARRIERS
IN AN AGE OF
BLURRED LINES
CONTOURCORE
STRONG MARKETS AND STRONG DEAL FLOW
2016 PUBLIC MARKETS
2015 2016
Market
Transactions 4307 3948
Megadeals 59 76
Largest Deal $63B $39B
Pipeline
Private Equity Deals 232 323
VC-Backed Exits 648 658
Attributes
Cross-border Deals 34% 35%
Startup Acquisitions 13% 12%
Average Life of Target 14 yrs 15yrs
CORUM INDEX

4. TOP FINANCIAL BUYERS OUTPACE STRATEGICS
DISRUPTIVE TRENDS DRIVE TOP BUYER TURNOVER
BOLT-ONS AND MEGADEALS BOOM AS PRIVATE EQUITY FIRMS JOCKEY FOR POSITION
Top Private Equity buyers continued beating out top strategics.
The top ten PEs averaged 19 deals, versus 15 for strategic
buyers. Vista Equity underscored that trend as it held on to the
leading spot with 15 more deals than the top strategic acquirer,
J2 Global. KKR and Thoma Bravo moved up to join Vista in
the top three, matching Alphabet’s total, replacing Insight and
ABRY.
Change was the story of the remainder of the PE leaderboard
as EQT and H.I.G. Capital made the list for the first time,
along with Genstar and Providence Equity. GTCR returned
to the chart after a year’s absence and Accel-KKR for the first
time since 2013.
These top buyers earned their spots with a healthy mix of both
platform and bolt-on acquisitions, as well as
making contributions to the year’s megadeal
trend. In total, the top three financial
acquirers did seven megadeals in 2016, up
from just one the previous year.
Notable sectors with increases in PE buyer
activity included business intelligence,
ERP and security. Deal flow increasingly
depended on bolt-ons and tuck-ins to sustain
these levels and deploy the immense amount
of funds amassed and available to successful
technology firms. Even smaller tech sellers
need to address PE opportunities in their
M&A process.
TOP PRIVATE EQUITY ACQUIRERS: 2016
TOP STRATEGIC ACQUIRERS: 2016
4 corumgroup.com WORLD TECH M&A REPORT 2017
The ranks of top strategic acquirers
welcomed five first-timers, riding
a wave of trend-driven deals. An
increased importance placed on AI
and IoT drove acquisitions across
sectors and will continue to do so.
J2 Global broke through as the top
strategic acquirer with 24 acquisitions,
primarily in its business cloud services
arm, and with a heavy emphasis on
security and secure backup tools.
Other deal focus areas included email
marketing and call management, with
a handful on the digital media side, as
well.
As we predicted last year, Alphabet
returned to fight for the top spot
after its restructuring. It won second
place with 21 deals, largely focused
on mobility. Nearly all went through
Google, with just two executed directly
by the parent company.
Several top acquirers demonstrated
the market’s increased focus on IT
services. In addition to J2, these
included Accenture, ranking third
with 20 deals, as well as Dentsu Aegis,
Deloitte and WPP. Innovative digital
2015 2016 Change
General Electric 0 11 ∞
Oracle 2 9 350%
Verizon 4 12 200%
Salesforce 6 12 100%
Hexagon AB 7 11 57%
Google 16 21 31%
J2 Global 19 24 26%
Deloitte 8 10 25%
Cisco 11 7 36%
Microsoft 20 10 50%
marketing agencies in particular were in
demand among these buyers.
In the most dramatic shift among top
acquirers, GE supported its rebranding
by doing deals like a digital tech giant,
racking up 11 technology company
acquisitions, up from a standing start
the year before.
Oracle had the second largest increase,
more than quadrupling its 2015 total,
with nine acquisitions including the
NetSuite deal, its largest ever.
In contrast, Microsoft saw the largest
drop in deal volume, as it focused on the
LinkedIn megadeal, also its largest ever.

5. 5corumgroup.comWORLD TECH M&A REPORT 2017
PRIMARY RESEARCH
ELON GASPER
EVP, RESEARCH
AMBER STONER
DIR. OF RESEARCH
THOMAS WRIGHT
ANALYST
YASMIN KHODAMORADI
DIR. OF VALUATIONS
NINA SEGHATOLESLAMI
SR. ASSOCIATE
UNITEDSTATESEUROPE
Corum tracks valuation multiples for publicly traded companies
in 30 subsectors within six broad technology markets. The most
notable trends of the last three years have been the decline of
Internet valuations and the increase of IT Services.
Sales multiples for Internet companies completed their return
to normal ranges, while Vertical continued gaining strength.
Infrastructure and Horizontal valuations are converging,
driven by related growth factors. Consumer declined while IT
Services continued its steady climb in both sales and EBITDA.
Internet EBITDA multiples barely retained the top spot as they
converged with the other markets.
MARKET VALUATIONS
1. Record cash – strategic & financial buyers
2. Strategic imperative – acquire or perish
3. Record financial markets
4. More global buyers than ever
5. Accessible, inexpensive debt – PE buyouts
5 REASONS TECH M&A REMAINS STRONG
VALERIYA CHUMACHENKO
LEAD ANALYST
ALEXANDER BETS
ANALYST
AMANDA TALLMAN
SR. ANALYST
LIUDMILA REVIAKINA
ANALYST
ARTEM MAMAIEV
ANALYST

6. HORIZONTAL
6 corumgroup.com WORLD TECH M&A REPORT 2017
Business Intelligence
EV/S 3.40 x
EV/EBITDA 14.95 x
MicroStrategy / NICE
Marketing & Ad Tech
EV/S 1.71 x
EV/EBITDA 14.66 x
Acxiom / Alliance Data
CRM
EV/S 1.71 x
EV/EBITDA 16.30 x
Salesforce / Convergys
ERP
EV/S 3.47 x
EV/EBITDA 20.28 x
Oracle / SAP
EBITDA metrics fluctuated throughout the year but ended
with a net gain. SCM and HR sales multiples continued to lead,
setting themselves apart in both sales and EBITDA multiples. BI
and ERP sales multiples converged last year, with ERP coming
out on top at the end of the year, with an increase in EBITDA
mutliples as well.
The AI Enablement trend sparked deals across the Horizontal
sector. Ebay joined the AI community, snapping up Expertmaker
in an attempt to enrich its marketplace platform with machine
learning, followed by Israeli visual search specialist Corrigon.
Salesforce paid nearly $33M for deep learning image-recognition
startup MetaMind.
Analytics companies were also in demand, as part of the white-
hot AI Enablement trend. Corum client Lingospot was picked
up by Piksel to improve its video metadata discovery. Israel’s
device-mapping ad startup Crosswise was acquired by Oracle
for an estimated $50M to integrate its tech into the Oracle Data
Cloud.
The combination of AI and predictive analytics also generated
deal flow. Vibrant Data was bought by Rakuten-owned Slice
Technologies to expand its multidimensional data extraction
offerings, while Viv Labs, a natural language processing startup
from the creators of Siri, was purchased by Samsung to enrich
the tech giant’s AI-based open ecosystem.
IoT predictive analytics SaaS provider Zementis was nabbed by
Germany’s Software AG for an estimated $65M to strengthen its
alliances with strategic players such as Bosch and Dell, drawing
on the enhanced use of data. Israel’s speech analytics firm
Nexidia was picked up by NICE for $135M, 2.7x revenue, to
increase its customer analytics capabilities.
In other predictive analytics deals, retail-demand forecaster
Predictix was grabbed by Infor for $125M to complement
its enterprise cloud suite. And Preact, a subscription forecast
analytics vendor, was bought by Spotify in an example of a
consumer-focused buyer adding a horizontal seller.
Salesforce spent $110M, 22x revenue, for enterprise analytics
SaaS provider BeyondCore, to amplify the Salesforce Analytics
Cloud with AI following its $2.8B acquisition of e-commerce
SaaS vendor Demandware.
In a deal springing from the Visual Intelligence Systems trend,
French AI-based computer vision provider Spikenet Technology
was purchased by Brainchip for its neural network software used
in public security and gaming.
Human Resources
EV/S 6.40 x
EV/EBITDA 30.30 x
ADP / Workday, Inc.
SCM
EV/S 6.12 x
EV/EBITDA 21.98 x
AspenTech/Descartes
Payments
EV/S 3.88 x
EV/EBITDA 15.45 x
Paypal / Worldpay
Other
EV/S 3.18 x
EV/EBITDA 18.39 x
OpenText/Trimble
SOLD TO
SOLD TO
SOLD TO

7. In the high-value SCM sector, relationship management
and trading partner collaboration SaaS Appterra was sold to
Descartes Systems for $6M to help grow its logistics network,
while e-procurement vendor Verian was bought by Finland’s
Basware for $36M to complement its existing e-procurement
capabilities.
7corumgroup.comWORLD TECH M&A REPORT 2017
AIs need data, ways to acquire that data, and tasks to
attack based on learning from that data—then iterating
with feedback to improve even more. When we introduced
this trend over a year ago, we predicted the flood of AI-
related deals that followed. You don’t have to be a deep tech
company to benefit: this continuing thirst for AI-driven
applications drove M&A in 2016, not just for core AI
capability, but around big data and analytics.
Examples span nearly all application areas. In business
intelligence, Salesforce acquired BeyondCore for $110M.
Oracle acquired Crosswise for $50M to enhance mobile
tracking for advertising. In retail forecasting, Infor spent
$125M on Predictix, while LinkedIn
bought AI-powered recruitment engine
Connectifier for $105M. IBM’s Watson,
which kicked off this trend, capped its
healthcare buying spree by adding “200
million lives” worth of data via Truven
for $2.6B.
All technology companies should
consider the role of AI in their offerings, possibly building
AI tools into their solutions—but optimal value may come
from providing data, framework or feedback to enable an
existing artificial intelligence.
AI ENABLEMENT
ALLAN WILSON
VICE PRESIDENT
PETER PRINCE
VICE PRESIDENT
All businesses, whether B2B or B2C, are seeking to bring
their persuasion and purchasing as close to the customer
as possible. This trend is accelerating personalization,
analytics and engagement to make the customer experience
more seamless—available on every device, in every format,
at the opportune moment.
Emerging technology continues to disrupt how banks,
retailers and others interact with consumers at the point of
sale. As many formerly isolated systems come into conflict
and cooperation, the urgency is spurring M&A, from the
card networks that have become more than the glue that
holds the system together, to the refrigerators where we can
now buy our groceries. More overlap will
drive even greater consolidation.
This will build on the many deals
already seen in this space. On the B2C
side, Demandware was acquired by
Salesforce for $2.8B, linking e-commerce
personalization across channels to CRM.
On the B2B side, Microsoft acquired the ultimate Omni-
channel sales tool—LinkedIn—for $26B. There’s more
to come, as technology meets the challenge of bringing
persuasion and transaction directly to the buyer.
OMNI-CHANNEL SALES
IVAN RUZIC, PH.D.
VICE PRESIDENT
Online exchanges continue to present lucrative
opportunities to shape relationships between providers
and consumers of products, services and information.
Online marketplaces are the best known, pushing e-commerce
to nearly $2 trillion in 2016, and the urgency of the opportunity
has driven consolidation. Established players have aggressively
sought new avenues for growth through M&A.
Both established exchanges and enabling tech are in demand.
Ebay’s StubHub acquired both Ticketbis, a Spanish language
marketplace, and Ticket Utils, a provider of ticket broker
software. We also see new buyers active, with Richie Brothers
Auctions acquiring IronPlanet, essentially an eBay for heavy
construction, and Polish auction site Allegro, acquired by a
private equity consortium for $3.2B.
The need for novel technology will remain
a significant driver of M&A activity in
this sector. Key disruptive opportunities
include personalization and social media
integration, the application of machine
learning/AI for security and efficiency,
financial disintermediation (possibly via
blockchain) and supply chain enhancements from on-demand
carriers to drones.
These principles apply across sectors, as companies with
technology that successfully connects sellers and buyers in
unique ways will continue to be in high demand.
ONLINE EXCHANGES
TOP DISRUPTIVE TECHNOLOGY TRENDS
A new AI epoch is emerging—not just doing
the same kind of dumb, non-scalable AI at
higher speed and lower cost.
We have a qualitatively different opportunity
for the tools that we use to become more
intelligent through our act of using them.
Peter Coffee, Salesforce
“
”SOLD TO

8. Valuations in the Vertical market ended the year on slightly
higher levels than a year ago, showing robust growth dynamics
all year long. Automotive, Government and Energy and
Environment saw higher sales multiples while there was strong
M&A activity across the sector, driven again by trends like AI
technologies, predictive analytics, and the Internet of Things.
The evolution of connected and autonomous car technologies
spurred interest from established industry players and
newcomers alike. This included Ford, which picked up Israeli
startup SAIPS to leverage its widely-applicable deep learning
algorithms in the automaker’s self-driving car strategy.
Russian computer vision provider Itseez was bought by
Intel to help the chip maker focus on autonomous vehicles,
while Seattle-based Surround.io was purchased by its
neighbor UIEvolution for its machine learning infrastructure,
helping connected cars share more data with customers and
manufacturers. Meanwhile, Uber spent nearly $700M for Otto
and its retrofit-kits to create self-driving trucks.
In the AEC subsector, construction management SaaS
vendor Textura was snapped up by Oracle for over $660M
and 7x sales multiple to build up Oracle’s Primavera project
management unit. Textura itself previously acquired Corum
client PlanSwift. The construction SaaS market entailed cross-
border M&A as Munich-based CONJECT Holding inked a
deal with the Australian collaboration SaaS provider Aconex
for nearly $72M at 2.7x revenue.
Nebraska-based Design Data was sold to Germany’s
Nemetschek for $46M, adding its steel-focused BIM solutions
to Nemetschek’s capabilities in concrete. Mtelligence was
acquired by AspenTech for over $37M to take its AI-
driven predictive maintenance stack into the industrial asset
management space. And Cincinnati’s construction data
network provider, ConstructConnect, was picked up by Roper
Technologies.
The healthcare M&A market remained active, in part driven
by the Connected Health trend, as Press Ganey was taken
private by Swedish PE EQT for over $2B at nearly 7x sales.
Emmi, a patient engagement software provider, was picked up
by Wolters Kluwer for $170M, adding patient-focused tools to
its clinical suite. Healthiest You was acquired by Teladoc for
$156M at 15x revenue to extend its telemedicine services.
On the services side, European IT provider Atos bought
Dallas-based Anthelio, a health IT services provider with a
VERTICAL
8 corumgroup.com WORLD TECH M&A REPORT 2017
Energy &
Environment
EV/S 4.75 x
EV/EBITDA 19.20 x
Itron, Inc. / Schlumberger Ltd.
Real Estate
EV/S 7.04 x
EV/EBITDA 19.81 x
CoreLogic / Zillow
Automotive
EV/S 4.61 x
EV/EBITDA 18.61 x
CDK Global / BitAuto
Vertical Other
EV/S 4.53 x
EV/EBITDA 14.34 x
Amadeus / Sabre
A/E/C
EV/S 5.32 x
EV/EBITDA 21.01 x
Autodesk / Synopsys
Government
EV/S 1.85 x
EV/EBITDA 12.34 x
Raytheon / Tyler Tech.
Healthcare
EV/S 3.45 x
EV/EBITDA 14.77 x
Cerner / Allscripts
Financial Services
EV/S 4.86 x
EV/EBITDA 15.92 x
Broadridge / Fiserv
SOLD TO
SOLD TO
SOLD TO

9. suite of analytics tools, patient portals, databases and mobile
apps for $275M, while Indian giant Wipro paid $460M for
Florida’s HealthPlan Services, provider of the ExchangeLink
health reform exchange integration platform-as-a-service.
9corumgroup.comWORLD TECH M&A REPORT 2017
Visual Intelligence lies at the intersection of three
multi-industry disrupting trends, Artificial Intelligence,
Computer Vision and Analytics. Intel took a 15 percent
stake in HERE, the mapping and location services company
owned by a consortium of car manufacturers, which are
evolving into software companies as they collect, process
and act upon not only street and location data, but also
object, vehicle, human and animal behavior.
Billions of images stored on eBay can now be intelligently
analyzed and classified with the help of Corrigon, an
image recognition and visual search technology company.
Netgear’s acquisition of Placemeter integrates proprietary
computer vision algorithms into its Arlo Smart Home
security product. There is no end in sight
for Visual Intelligence, as it will transform
nearly every sector.
For example, new software technologies
built into cameras will find their way
to drones, which collect and monitor
complex data regarding the health of
crops autonomously. Facial recognition is taking huge leaps
forward beyond biometrics, so that multiple faces can be
quickly identified from a single image and cross-referenced
with law enforcement databases, making vulnerable and
high-traffic public spaces more secure.
VISUAL INTELLIGENCE SYSTEMS
DAN BERNSTEIN
VICE PRESIDENT
Consumers are creating and curating their own health
data, seeking closer connection to health services and
records. This demand for improved interoperability between
previously siloed data for population health analytics,
genomics, and predictive and personalized medicine, will
continue to produce M&A.
In addition to these social changes, demographic changes
are making health care concerns more pressing, while
regulatory barriers appear to be softening—from the 21st
Century Cures Act recently signed, to the next round of the
US healthcare fight.
On the deal side, reflecting the importance of connecting
with patients, more money was spent on patient engagement
solutions in 2016 than on more traditional
EHR M&A. Key deals include EMMI,
acquired by Wolters Kluwer, and Healthiest
You, acquired by TelaDoc. The largest
check came from Swedish PE EQT,
acquiring patient survey giant Press Ganey
for $2.3B.
And while Fitbit struggled in the public market, Apple’s
new Carekit offering and Nokia’s acquisition of Withings
indicate significant opportunities for truly connected health
via wearables, mobile and more.
M&A will continue to be core to healthcare’s digital
transformation into patient-centric, connected care.
CONNECTED HEALTH
DAVE LEVINE
VICE PRESIDENT
TOP DISRUPTIVE TECHNOLOGY TRENDS
Digital Currency Flow is powering massive opportunity
for strategic acquisition in 2017, as the urgency
of consumer expectations for payment to be mobile,
personalized, customizable and accessible 24/7 drives
M&A.
In addition to payments technology, anything facilitating
automation and improved efficiency of banking, insurance,
POS, wealth management, robo-advisors and lending, are
all areas for M&A. The technology will greatly impact the
front, middle and back office of every brokerage, bank,
insurance company, healthcare exchange and all things
commerce-driven.
Credit card companies are themselves becoming technology
companies, as EMV chips finally come
online in the US and the Internet of Things
breaks open entirely new markets, driving
deals up and down the payment chain.
Meanwhile, the threat and opportunity that
distributed ledger technology represents
looms over the global commerce system.
Staid financial players watched it move toward reality last
year, with Broadridge and Rakuten making the first true
strategic blockchain-driven acquisitions.
Will the coming disruption reach Netflix/Blockbuster
levels, or will current fintech companies make the leap? The
tech firms acquired this year will help determine the course
of an industry.
DIGITAL CURRENCY FLOW
ROB GRIGGS
VICE PRESIDENT
SOLD TO
The Cambrian Explosion of species
about a half-billion years ago coincided
with vision and other senses evolving in
organisms... This seems to be happening
to computer devices, and will create a great
diversity of new possible products.
Reese Jones, Singularity University
“
”

10. CONSUMER
10corumgroup.com WORLD TECH M&A REPORT 2017
Casual Gaming
EV/S 3.03 x
EV/EBITDA 21.24 x
Nintendo / Zynga
Core Gaming
EV/S 2.04 x
EV/EBITDA 10.85 x
Electronic Arts / Activision
Other
EV/S 1.64 x
EV/EBITDA 52.29 x
Netflix / Pandora
Valuations in the Consumer sector declined slightly following
encouraging metrics through the second and third quarters.
However, Casual Gaming remained stable in both sales and
EBITDAvaluation,andthevalueof non-gamingentertainment
powerhouses supported overall EBITDA multiples.
China continued to dominate gaming M&A around the globe.
Tencent bought Finland’s Supercell for $8.5B in its largest-ever
acquisition. Corum client Jagex, publisher of classic MMO
Runescape, was sold to Zhongji Holding, another example of
a non-tech buyer diversifying into gaming.
In the wagering space, Quebec-based DEQ Systems, a global
supplier of table games to casinos, was acquired by Scientific
Games for over $20M. London-based OpenBet was bought
by NYX Gaming for over $250M to help it gain a share in the
regulated markets. Hong Kong-based XIN Gaming picked up
Swedish sportsbook suppliers Tain and Betting Promotion for
nearly $10M dollars combined.
The wearables sector also produced notable deals in 2016.
Among them was ASICS’ acquisition of FitnessKeeper for
$85M, as the Japanese sporting goods giant raced to catch up
with Adidas, Nike and particularly UnderArmour. Ireland-
based PlayerTek, a provider of athlete tracking systems, was
acquired for $2.7M by Australia’s Catapult, while Nokia bought
health and activity tracker maker Withings for $190M.
Facial animation and analysis was a particular focus for
Facebook, which snapped up Masquerade and FacioMetrics.
And through Oculus, it added The Eye Tribe, a developer of
sensor-based eye tracking systems.
In the world of virtual reality, live-action VOKE was bought
by Intel with hopes to enrich its VR sports content, and VR
studio Surreal was acquired by media company STX with
recent funding from Tencent.
Travel giants TripAdvisor and Expedia both reached out of the
Internet sector for consumer apps, with TripAdvisor buying
Citymaps and Expedia acquiring photo sharing startup Trover.
DATA SCIENCE MONETIZATION
Data Science Monetization is revolutionizing all
disciplines of technology after emerging in the
games industry. Asian game studios applied it first
to perfect free-to-play models, monitoring everything
consumers did, liked, played and paid for. Developers
worldwide extended this to all sorts of applications,
analyzing customer behavior to identify, exploit and
optimize monetization opportunities.
This has led to a flurry of M&A for both analytics firms
(Games Analytics acquired by China’s Mobvista) and
software firms, especially data-driven game companies—
witness data-driven Corum clients Jagex, acquired by
Zhongji for its successful RuneScape franchise, and Digital
Extremes, with its free-to-play hit Warframe, acquired by
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11. 11corumgroup.comWORLD TECH M&A REPORT 2017
INTERNET
Diversified Internet
EV/S 4.88 x
EV/EBITDA 17.67 x
Alphabet / Tencent
eCommerce
EV/S 1.02 x
EV/EBITDA 29.82 x
eBay / JD.com
Social Network
EV/S 4.57 x
EV/EBITDA 20.22 x
Facebook / Mixi
Travel & Leisure
EV/S 5.75 x
EV/EBITDA 19.21 x
Expedia / JustEat
Internet sector valuations ended the year down after months of
robust performance, though Travel & Leisure’s increased sales
multiples served as the exception.
English cruise booking site Cruise.co.uk was bought for $69M
by Bridgepoint Capital, hoping to take advantage of the UK’s
ocean cruise market, the second largest globally. India’s largest
online travel agent Yatra was sold to Terrapin for $218M to
build on its recent IPO and expand internationally. French hotel
group Accor entered the private rental market, paying $170M
for Onefinestay out of London.
There was also high demand for disruptive ticketing technology.
Spanish platform Ticketbis was grabbed by eBay’s StubHub for
an estimated $166M to increase its footprint in Europe and the
Spanish-speaking world. Top acquirer Vista Equity partnered up
with Vivid Seats to take advantage of the growing secondary
ticket exchange market.
CHARGED.fm, out
of New York, was
picked up by Vendini
in an effort to amplify
its audience for both
primary and secondary event ticketing markets. Elsewhere,
Wantickets was wrapped up by LiveXLive which seeks a foothold
in digital music ticketing.
Horse-racing sites came out of the gate strong, as Australia’s
largest digital racing publisher Punters.com.au, a Corum
client, was acquired by News Corp to expand its offerings for
the Australian racing community. In London, horse-betting
publisher Racing Post was acquired by Exponent Private Equity.
Consolidation in the food delivery space continued into
2016, capped off by Foodpanda’s sale to DeliveryHero in an
increasingly winner-take-all market. Previous deals took place
across Russia, Britain, Canada and beyond. DeliveryHero’s
largest rival, Just Eat, was still hungry after its M&A feast last
year, dishing out over $253M for British rival Hungry House
and for dessert purchased SkipTheDishes for over $83M to
bolster its presence in Canada. Meanwhile, the Benelux part of
Just Eat was gobbled up by Takeaway.com for more than $20M.
And in China, JD.Com subsidiary Daojia teamed up with Dada
Nexus for $200M to streamline its food delivery crowdsourcing
model under Dada’s brand.
JIM PERKINS
EXECUTIVE VP
Perfect World and Leyou.
Beyond games, video ads are benefiting
from this trend, with Facebook a
key beneficiary thanks to its earlier
acquisition of LiveRail. Adobe’s half-
billion acquisition of TubeMogul in
November suggests similar aims.
Similarly, B2B SaaS providers tracking successful and
unsuccessful strategies within an ecosystem can provide
this monetization capability to customers, always seeking
the shortest distance between data and dollars. From an
M&A perspective, the better the data is utilized, the more
attractive and valuable a company.
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12. INFRASTRUCTURE
12corumgroup.com WORLD TECH M&A REPORT 2017
Network Management
EV/S 2.36 x
EV/EBITDA 9.81 x
Cisco / Juniper Networks
Storage & Hosting
EV/S 2.68 x
EV/EBITDA 11.01 x
NetApp / Brocade
Security
EV/S 3.27 x
EV/EBITDA 16.71 x
Gemalto / Check Point
Endpoint
EV/S 3.67 x
EV/EBITDA 13.63 x
VMware / Citrix
Sales multiples in the Infrastructure sector experienced
fluctuations, but remained fairly stable overall, and EBITDA
multiples jumped in Q4. Storage & Hosting saw gains in both
sales and EBITDA multiples, while Endpoint had increased
sales multiples and Security experienced a bump in EBITDA
multiples.
Data Security stood at the forefront of M&A for both
industry incumbents and buyers seeking to protect an
established technology stack. FireEye paid $200M, 5x sales,
for cybersecurity firm ISight Partners, and followed that up
by spending $20M more for Invotas to complement its threat
management platform with security automation.
Proofpoint snatched up Return Path’s e-mail fraud protection
unit for $18M to strengthen its portfolio of threat protection
products. Blue Coat, founded by former Corum client Joe
Pruskowski, was sold to Symantec for $4.7B, nearly 8x revenue,
to complement its on-premise products.
The Visual Intelligence Systems trend made an impact as well,
with machine vision specialist Cognex buying two 3D vision
firms in Europe—EnShape and AQSense—for more than
$10M combined, underlining the rising demand for solid 3D
tech across a range of traditional markets.
AI and AI Enablement were prevalent in the Infrastructure
sector in 2016. Apple fortified its machine learning
infrastructure by acquiring Turi for $200M while also picking
up facial recognition startup Emotient and data-mining
platform Tuplejump, Apple’s first deal in India.
There were IoT Software acquisitions by tech buyers great
and small. Microsoft bought Italian startup Solair to boost
its Azure IoT suite. SAP fueled even more consolidation in
the space by acquiring another Italian firm PLAT.ONE, to
build IoT interoperability into its Hana Cloud. Israel-based
IoT security specialist Dojo-Labs was acquired by anti-virus
company BullGuard. Bluvision, specializing in Bluetooth-
Low-Energy tracking solutions, was nabbed by HID to dive
deeper into enterprise IoT.
The cloud management space has been active as well with
Cisco spending $260M for cloud application management firm
CliQr, and ServiceNow paying $15M for ITapp to plug into
hybrid cloud environments.
Upheaval in programmatic communication led to Google
buying the API management company Apigee for $625M, 6.5x
IT Services Management
EV/S 4.14 x
EV/EBITDA 24.83 x
CA Technologies / Red Hat
Other
EV/S 5.32 x
EV/EBITDA 14.78 x
Atlassian/ Progress
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13. 13corumgroup.comWORLD TECH M&A REPORT 2017
revenue, to help the search giant catch up in the cloud with
rivals Microsoft and Amazon. API management company
3Scale was picked up by Red Hat for $29M, over 7x revenue,
to amplify the API economy throughout its product stack.
The complex Internet of Things ecosphere continues
to coalesce. While more players are still emerging,
networks of alliances are forming to achieve more unified
environments, providing accelerated growth opportunities
for the IoT software community.
In particular, watch the crystallization around Google’s
Android Things, GE’s Predix, PTC’s ThingWorx and
Siemens’ MindSphere, especially after its acquisition of
Mentor Graphics, while cloud providers Amazon and
Microsoft spread their bets around the table.
Major industrial firms emerged as top buyers last year,
hungry for deals in every imaginable area of IoT software—
in particular, security, analytics, connectivity, controls, data
storage and application development. In
addition to Siemens’ $4.5B acquisition
of Mentor Graphics, five out of GE’s
seven IoT acquisitions in 2016 were SaaS
plays, including nearly $1B spent on the
ServiceMax field service management
platform. We expect to see other industrial
players enter the tech M&A fray in 2017.
With the compression of IoT tech cycles, we anticipate
consolidation on both the platform and hardware fronts
this year. Though much of the technology is still nascent,
the buyers are active and it’s a great time to calibrate the
M&A market.
IOT SOFTWARE
ROB SCHRAM
SR. VICE PRESIDENT
Demand is rising for IT Services firms that are focused
on particular platforms and problem sets. Inefficiencies
continue to grow in the ecosystem of large software
installations, while enterprise solutions have evolved to
modular or object-based architectures, enabling customers
to demand more adaptable implementations. Meanwhile,
aligning business processes and best practices with new
systems has become fundamental to business success.
We’ve been watching IT Services valuations steadily increase
for the last few years, and EBITDA multiples have nearly
doubled since 2012. Deals are clustering around vertical
domains such as SCM, HR and CRM in particular, with 16
acquisitions of Salesforce-focused services
companies in 2016, nearly three times the
previous year.
Services firms with a specific focus coupled
with comprehensive capabilities will be
attractive targets for partnerships and
acquisition in the coming year. Targets with
expertise in custom app integration, core development, and
technology services must also provide strategic consulting
services with specific, deep domain expertise. This powerful
combination will not only capture market share but increase
valuations at this uniquely advantageous moment.
FOCUSED IT SERVICES
STEVE JONES
VICE PRESIDENT
Major data breaches continue to harm consumers,
governments and enterprises, helping make Data
Security one of the hottest trends in tech M&A. Today’s
big players can’t keep up with the pace of innovation, but
they can fill product gaps and acquire innovative teams.
We see companies in predictive threat intelligence, multi-
factor authentication, and highly-secured cloud platforms
for short-term sharing of data as particularly attractive
targets. Further, by 2020 there will be 80 billion connected
IoT devices generating huge volumes of data that will need
to be analyzed to protect these devices and their networks.
Expect more major breaches and significant new
vulnerabilities to be uncovered this year.
Large security companies will continue to
be highly acquisitive, including Symantec,
which reenergized its security product
strategy by selling its Veritas division last
year while acquiring Blue Coat for $4.7B
and Lifelock for $2.3B. Other key deals
included the AVG acquisition by Avast, and
Intel’s sale of the MacAfee product line to TPG Capital.
With big moves like these, security buyers of all sizes are
also looking for tuck-ins to fill gaps.
DATA SECURITY
JON SCOTT
MANAGING DIRECTOR
TOP DISRUPTIVE TECHNOLOGY TRENDS
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On the topic of cybersecurity, we are living
in a nuclear era, with weapons but no bomb
shelters. There is good technology for
attacking other cyber systems, but very little in
the way of defense. This is obviously a huge
business opportunity.
Reese Jones, Singularity University
“
”

14. IT SERVICES
14corumgroup.com WORLD TECH M&A REPORT 2017
Developed market IT Services valuations
continued their years-long ascent, driven
in large part by the Focused IT Services
trend. Emerging market valuations
continued their convergence towards
Developed market metrics, but still
remained significantly higher in sales
multiples.
Accenture, one of the year’s top three
acquirers, did twenty different deals for
a range of IT Services providers, from
systems integrators to an SCM consultancy.
With one acquisition in Australia, twelve
in Europe, one in the Middle East, five in
North America and one in Asia, the company diversified across
most of the major markets. Key deals included spending $130M
for the French digital consultancy OCTO Technology, as well
as Workday integrator DayNine Consulting, SCM analytics
consultancy OPS Rules, Defense Point Security to integrate
into its Federal Services group, and Netherlands-based GIS
solutions provider Realworld OO Systems.
Security, an early beneficiary of the higher services valuations
driven by the Focused IT Services trend, continued to be
in demand. Aquilent, a cloud service provider for the US
government, was snapped up by Booz Allen for $250M.
Siege and its robust portfolio of security products was rolled
up into Nehemiah Security’s portfolio, and Pasadena-based
Advancive was bought by Optiv to bolster its identity and access
management practice.
Other key trends also drove deals, including IoT Software
fueling demand for systems integrators in that complex space.
Nfrastructure was snapped up by Zones to foster its evolution
as a services provider for networked devices. Extensys sold its
IoT division to CompuCom Systems in an attempt to apply its
sensor-based monitoring services to IoT solutions. Portland’s
Rivetry joined forces with Bluetooth module maker Rigado for
more comprehensive IoT capabilities.
In India, servicing and maintaining the massive and growing
cloud infrastructure was a high priority. Development and
testing automation specialist Opex was acquired by AWS partner
REAN Cloud, in a stated effort to fortify REAN’s infrastructure
automation capabilities. In China, digital marketing firms were
in demand, including NY-based PR firm Ruder Finn acquiring
Daylight Partnership out of Hong Kong.
DEVELOPED MARKETS
EMERGING MARKETS
Bet on velocity... Whatever
cycle you have been using
needs to be drastically
compressed, or even your
accurate predictions will
not keep you ahead
of the curve.
Peter Coffee, Salesforce
“
”
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15corumgroup.comWORLD TECH M&A REPORT 2017
SELLING YOUR SOFTWARE, IT OR RELATED TECH COMPANY?
2017 CONFERENCE LOCATIONS
Executed professionally, done right, it leads to fortune. Unfortunately, most owners’ efforts to sell end in failure
due to lack of experience and knowledge. For the most important transaction of your life, it’s imperative to get the
necessary education. Corum is the leading tech M&A educator in the world—we share the experience gained in
selling more firms than anyone else over the past 30 years. Our experts offer a number of live events designed to
give you the knowledge you need to achieve what we call an Optimal Outcome—maximum price and best structure.
Thinking about selling in the next one to three years? The
Merge Briefing is a 90-minute executive seminar that provides
a current M&A market update (trends, valuations, etc.), as well
as a brief overview of the Tech M&A process:
“8 Stages to an Optimal Outcome.”
Ready to go to market? During the half-day workshop
Selling Up, Selling Out, learn to prepare, position, research,
value, negotiate and execute due diligence for maximum price
and optimal structure. This is the most attended tech M&A
event ever, participants having done over $2T in transaction
value.
World Financial Symposiums (WFS) brings together
experts, luminaries, newsmakers and global leaders in tech
and finance for events across the globe. Corum is a Platinum
Sponsor, one of many organizations that support the WFS.
Its primary conference, Growth and Exit Strategies for
Software & IT Companies, is a full-day symposium held in
New York, London, Silicon Valley and Seattle, with half-day
events in cities including Austin, Vancouver BC and others.
The event educates owners and CEOs of software, IT and
related technology companies on the key developments in
today’s technological and financial landscapes and helps
them prepare their strategies for growth and eventual exits.
To register for a conference, visit www.wfs.com.
MARKET SPOTLIGHT
Market Spotlights are monthly webcasts sponsored by the
World Financial Symposiums, focusing on the opportunities
for technology companies in specific sectors, topics and
regions. Recent topics have included healthtech, security,
patents, the connected car and more.
To learn more, visit www.wfs.com.
TECH M&A MONTHLY WEBCAST
Want to stay on top of M&A and build more value in your
technology company? Every month, this 30-minute global
webcast brings you the news you need to know on markets,
trends, deals and valuations—plus invaluable special reports
from buyers, technologists, dealmakers and industry leaders.
And be sure not to miss the quarterly and mid-year reports
with valuation data on all 30 technology subsectors.
Join us on the second Thursday of every month at
www.corumgroup.com.

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