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Capstone Partners Investment Banking Advisors 2014 AWARD WINNER: Capstone Partners BOUTIQUE INVESTMENT BANKING Investment Banking Advisors FIRM of the YEAR

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Capstone Partners Investment Banking Advisors 2014 AWARD WINNER: Capstone Partners BOUTIQUE INVESTMENT BANKING Investment Banking Advisors FIRM of the YEAR Capstone Partners Investment Banking Advisors 2014 AWARD WINNER: Capstone Partners BOUTIQUE INVESTMENT BANKING Investment Banking Advisors FIRM OF THE YEAR SaaS & Cloud M&A and Valuation Update Q4 2014 BOSTON CHICAGO LONDON LOS ANGELES PHILADELPHIA SAN DIEGO SILICON VALLEY TAMPA Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 1 Investment Banking Advisors WORLD CLASS WALL STREET EXPERTISE.1 BUILT FOR THE MIDDLE MARKET.TM Capstone Partners TableInvestment Bankingof Contents Advisors Section Page Introduction Research Coverage: SaaS & Cloud 4 Key Takeaways 5-6 M&A Activity & Multiples M&A Dollar Volume 8 M&A Transaction Volume 9-11 LTM Revenue Multiples 12-13 Revenue Multiples by Segment 14 Highest Revenue Multiple Transactions for LTM 15 Notable M&A Transactions 16 Most Active Buyers 17-18 Public Company Valuation & Operating Metrics SaaS & Cloud 130 Public Company Universe 20-21 Recent IPOs 22-27 Stock Price Performance 28 LTM Revenue, EBITDA & P/E Multiples 29-31 Revenue, EBITDA and EPS Growth 32-34 Margin Analysis 35-36 Best / Worst Performers 37-38 Notable Transaction Profiles 40-49 Public Company Trading & Operating Metrics 51-56 Technology & Telecom Team 58-60 Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 2 Investment Banking Advisors 2 Capstone Partners CapstoneInvestment Banking Partners Advisors Investment Banking Advisors Observations and Introduction Recommendations Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 3 Investment Banking Advisors WORLD CLASS WALL STREET EXPERTISE.3 BUILT FOR THE MIDDLE MARKET.TM Capstone Partners ResearchInvestment Banking Coverage: Advisors SaaS & Cloud Capstone’s Technology & Telecom Group focuses its research efforts on the following market segments: Enterprise SaaS & Mobile & Wireless Consumer Internet Cloud Analytics / Business Intelligence Cloud & IT Infrastructure Cloud Computing / Storage Communication & Collaboration Content Creation & Management Content Delivery Services E-Commerce Consumer, IT & CRM & Customer Service Telecom Hardware ERP, Supply Chain & Commerce Finance & Administration Human Resources Licensed Software Leaders Marketing & Advertising Vertical Markets Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 4 Investment Banking Advisors 4 Capstone Partners KeyInvestment Takeaways Banking Advisors – M&A Activity & Multiples 2014 M&A Dollar Volume stays relatively flat at $46B despite a strong increase in deal volume Weak dollar volume in Q4 of just $5.3B following a huge Q3 that accounted for more than half of 2014 dollar volume 2014 transaction volume of 881 deals reaches a new five year high Q4’14 saw 243 deals, showing a slight increase from Q3’14 Vertical Market solutions constitute roughly one third all transactions with over 200 deals per year since 2011 Private company deal volume remains healthy with deal mix shifting towards the higher end in recent periods We observe a significant increase in total M&A deals in LTM The Median LTM Revenue Multiple paid for public company targets above $100M lowered to 2.9x Fewer low multiple sub $100M deals boosted the overall LTM revenue multiple to match $100M+ deal multiple Notable M&A transactions in Q4 Apax Partners / Exact ($764M) Cox Automotive / xtime ($325M) Vonage / TeleSphere ($114M) Siris Capital / Digital River ($646M) Progress Software / Telerik ($263M) Vector Capital / ChyronHego ($114M) Yahoo! / BrightRoll ($640M) BAE Systems / SilverSky ($233M) Aetna / bswift ($400M) Gain Capital / City Index ($118M) The most active buyers include Vista Equity Partners, Yahoo!, Intuit, Oracle, IBM, SAP, Google, Genesys, Microsoft and The Riverside Company (sorted by most active). Capstone expects the robust M&A activity and attractive exit valuations to continue in SaaS & Cloud There is some risk that a market correction could negatively impact activity levels and valuation multiples Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 5 Investment Banking Advisors 5 Capstone Partners KeyInvestment Takeaways Banking Advisors – Public Company Metrics Q4’14 saw 6 new companies added to the SaaS & Cloud 130 Post IPO performance was mixed across the 6 companies added to the SaaS & Cloud 130 Q4’14 saw a recovery in stock performance across the SaaS & Cloud sector SaaS & Cloud 130 posted a 6.1% growth in Q4’14 along with a 5.4% growth for the NASDAQ Median LTM Revenue Multiple weakened to 4.8x, but still represents a healthy multiple Within SaaS & Cloud, median multiples vary considerably between segments ranging from 1.7x to 8.7x in Q4’14 Median LTM EBITDA multiple improved to 17.8x Three of the thirteen SaaS & Cloud segments are trading at medians above 30x LTM EBITDA Median LTM P/E multiples grew to 29.1x Public markets demonstrate a strong preference for companies growing quickly and investing to solidify market leadership status, confident that future profits will come with scale SaaS & Cloud 130 posted median revenue growth of 20.9% in 2014 Continued growth is expected throughout NTM at 17.8% LTM Median EBITDA growth of 5.6% is down from 9.5% in 2013 but is expected to increase to 13.1% in NTM EBITDA growth drop from 2011 high due to increased OpEx spend as companies prioritize growth over profitability Median gross margins have stayed constant for the past five years and currently stand at 67.5% Cloud & IT Infrastructure and Content Creation & Management top the list at over 80% as newly emerging technologies that enable the cloud to run more efficiently command strong margins Median EBITDA margins have consistently decreased as companies reinvest to fuel growth Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 6 Investment Banking Advisors 6 Capstone Partners CapstoneInvestment Banking Partners Advisors Investment Banking Advisors M&AObservations Activity & and MultiplesRecommendations Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 7 Investment Banking Advisors WORLD CLASS WALL STREET EXPERTISE.7 BUILT FOR THE MIDDLE MARKET.TM Capstone Partners LTMInvestment M&A Banking Dollar Advisors Volume 2014 M&A Dollar Volume stays relatively flat at $46B despite a strong increase in deal volume Private dollar volume increase offset by lower public company M&A Weak dollar volume in Q4 of just $5.3B following a huge Q3 that accounted for more than half of 2014 dollar volume $50,000 $45,000 $40,000 $20,136 $35,000 $24,028 $21,510 $20,534 $30,000 $25,000 $23,733 $20,000 Total Transaction Value $15,000 $26,308 $22,968 $24,494 $10,000 $7,326 $21,183 $13,741 $5,000 $7,014 $0 2009 2010 2011 2012 2013 2014 Total Private $ Total Public $ Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 8 Investment Banking Advisors 8 Capstone Partners LTMInvestment M&A Banking Transaction Advisors Volume by Segment 2014 transaction volume of 881 deals reaches a new five year high. Q4’14 saw 243 deals, showing a slight increase from Q3’14. Analytics / Business Intelligence segment more than doubled in 2014 to 117 deals, continuing a consistent rise in transaction volume since 2009. 1000 900 800 295 700 600 232 257 224 99 500 60 183 80 52 14 400 74 52 50 40 Transactions 19 27 44 23 11 300 57 40 47 21 40 25 115 16 40 12 10 45 20 26 37 54 12 17 32 200 34 24 35 31 22 43 50 14 40 42 25 73 12 13 11 28 32 33 100 5 13 28 87 91 19 10 53 62 117 39 52 0 12 25 32 39 2009 2010 2011 2012 2013 2014 Analytics / Business Intelligence Cloud & IT Infrastructure Cloud Computing / Storage Communication & Collaboration Content Creation & Management Content Delivery Services CRM & Customer Service ERP, Supply Chain & Commerce Finance & Administration Human Resources Marketing & Advertising Vertical Market Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 9 Investment Banking Advisors 9 Capstone Partners LTMInvestment M&A Banking Transaction Advisors Volume by Deal Size – Private Targets Private company deal volume remains healthy with deal mix shifting towards the higher end in recent periods We observe a significant increase in total M&A deals in 2014, up 35% from 2013 LTM median deal value at remains at its five year high of $25M 100% 1 1 3 1 3 8 5 2 4 9 7 11 15 6 10 90% 10 10 23 7 12 18 8 28 80% 23 28 11 28 22 70% 29 14 17 30 28 60% 22 30 26 23 50% 39 36 53 40% 33 49 30% 54 20% 71 80 78 46 10% 42 0% 2009 2010 2011 2012 2013 2014 Total Deals 314 505 661 682 642 868 Deals w/ Value 111 200 243 213 164 184 Median ($M) $10 $20 $20 $18 $25 $25 $0-10M $10-25M $25-50M $50-100M $100-250M $250-500M $500M-1B $1B+ Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 10 Investment Banking Advisors 10 Capstone Partners LTMInvestment M&A Banking Transaction Advisors Volume by Deal Size – Public Targets Public transaction volume dropped to a new five year low while median deal value is at five year high H2’14 saw four $1B+ deals, with SAP’s acquisition of Concur Technologies the largest at $8.3B Only two deals fell below $100M in transaction value 100% 2 90% 7 6 7 3 80% 7 5 3 70% 4 1 4 60% 1 8 4 2 4 2 50% 2 1 40% 2 3 3 5 1 2 4 1 1 30% 1 3 2 2 20% 4 3 4 10% 4 6 1 3 2 2 1 0% 1 2009 2010 2011 2012 2013 2014 Total Deals 20 19 33 26 23 13 Median ($M) $86 $293 $305 $329
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