European Technology Update 13 September 2012
Member FINRA/SIPC
Thierry Monjauze Managing Director 63 Brook Street London W1K 4HS United Kingdom Phone: +44 20 7518 8900 [email protected]
Francois Morin Director 63 Brook Street London W1K 4HS United Kingdom Phone: +44 20 7518 8900 [email protected]
This report has been prepared by Harris Williams & Co. Ltd a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorised and www.harriswilliams.com regulated by the Financial Services Authority (FRN #540892). Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business. Recent Developments
Company IBM acquired Kenexa, the provider of SaaS-based recruiting and talent management solutions, for $1.3 billion Specific Comverse Technology, the provider of software-based products, systems and services for wireless and cable News network communication service providers, merged with Verint Systems in a deal worth $980 million Global Payments acquired Accelerated Payment Technologies , the provider of integrated payment solutions , from Great Hill Partners for $413 million Tech Data acquired several distribution companies belonging to Specialist Distribution Group, the value-added distributor of enterprise-focused IT products in UK, France and Netherlands, for €277 million Trimble Navigation acquired TMW Systems, the provider of trucking and fleet maintenance software and consulting services for the trucking industry, from Pamlico Capital for $335 million IAC Search & Media acquired About.com, the operator of a content site and producer of content on the Web primarily for Hispanics in the United States, from The New York Times Company for $300 million The Carlyle Group sold UC4, the world’s largest independent IT process automation software company, to EQT for $270 million FICO acquired Adeptra, the cloud-based customer engagement and risk intervention solutions provider, for $115 million Axel Springer acquired allesklar.com, the Web directory for the business-to-business markets, for €50 million Spirent Communications acquired Metrico Wireless, the provider of services that enable carriers and device vendors to analyse the performance of subscriber quality of experience on mobile devices, for $52 million iomart Group acquired Melbourne, the Manchester-based provider of managed hosting solutions to over 600 customers, for £7 million Google acquired VirusTotal, the Spain-based online service that analyzes computer files and URLs for viruses Desire2Learn, the provider of cloud-based learning solutions for higher education and Fortune 1000 companies, raised $80 million in a round of financing from New Enterprise Associates and OMERS Ventures Lamoda, the Russian online fashion retailer, raised an estimated $40 to $80 million from JP Morgan Delivery Hero's, the online food delivery company (known as hungryhouse in the UK), raised €40 million from Kite Ventures , Kreos Capital and other existing investors Brille24, the German online retailer for prescription eyeglasses, raised €12 million from TIME Workday, the human resources cloud software company, filed for an IPO to raise $400 million FleetMatics Group, the SaaS-based fleet management solutions provider, filed for an IPO to raise $100 million
Industry CbilConsumer mobile apps space has been one of the h ott est areas f or VC i nvest ment , with f undi ng f or st art -ups Trends topping $1 billion during the first half of this year, according to Rutberg & Co. Global spend on app development software is expected to be $9 billion this year, up 1.8% year on year, according to Gartner Subscription services will boost digital music revenues by 15% per year on average to reach $23 billion by 2017, according to Ovum The global PC market is expected to grow just 0.9% this year, according to IDC, with worldwide PC shipments forecast to increase from 364 million in 2011 to 367 million in 2012 Spend on online advertising will overtake newspapers to become the second-largest ad medium globally this year, according to the latest forecast by Carat Apple could sell as many as 250 million units of the next iPhone globally over its life cycle, making it the “largest single product opportunity in Apple’s history”, according to FBR Capital
Source: Various industry news outlets. 1 Public Market Trading Statistics
Stock Last 30 Days
Performance 8%
6%
4% 7.2% 5.9% 2% 3.3% 0% 2.7% (0.4% ) (2%)
(()4%) 07 Aug 12 Aug 17 Aug 22 Aug 27 Aug 01 Sep 06 Sep
DJ Stoxx 600 Technology Nasdaq Composite Software and IT Services Communications Internet and Digital Media
Last Twelve Months
40% 35% 30% 25% 25.7% 20% 17.6% 15% 15.3% 10% 8.5% 5% 5.8% 0% (5%) (10%) (15%) Sep 2011 Dec 2011 Mar 2012 Jun 2012 Sep 2012
DJ Stoxx 600 Technology Nasdaq Composite Software and IT Services Communications Internet and Digital Media
Sources: Capital IQ, 7 September 2012; Brokers’ reports. Comparable CY2012E EV / Revenue EV / EBITDA P / E Trading EBITDA Margin Growth CY2012E CY2013E CY2012E CY2013E CY2012E CY2013E
Summary Software and IT Services Enterprise Applications 14.5% 14.4% 2.4x 2.1x 11.8x 10.2x 15.4x 12.1x European Large Cap Software 31.8% 5.3% 35x3.5x 32x3.2x 10.9x 98x9.8x 17.8x 15.6x Financial Software 22.2% 3.0% 2.2x 2.1x 8.9x 8.0x 16.9x 14.8x Healthcare Software 21.9% 10.3% 2.3x 2.1x 9.2x 8.3x 16.8x 14.7x Large Cap IT Services 13.1% 18.1% 1.0x 0.9x 7.0x 6.1x 15.8x 12.2x Mid Cap IT Services 7.1% 11.3% 3.5x 2.7x 5.5x 5.0x 9.5x 7.5x Offshore IT Services 23.3% 19.4% 2.5x 2.2x 10.3x 9.5x 15.6x 14.5x Security Software 34.2% 7.4% 2.6x 2.5x 7.2x 6.5x 14.0x 12.4x
Communications Digital Broadband 12.0% (2.8%) 0.6x 0.6x 4.7x 4.2x 13.3x 9.3x Diversified Communication Equipment 76%7.6% (4.4%) 08x0.8x 07x0.7x 10.3x 66x6.6x 15.1x 16.2x Mobile Content / Solutions Providers 18.7% 6.5% 1.9x 1.6x 9.5x 7.3x 22.1x 19.0x Mobile Infrastructure Software 18.8% 5.2% 2.3x 2.0x 8.3x 7.3x 16.5x 13.3x
Internet and Digital Media Chinese Internet Leaders 18.8% 239.0% 3.8x 2.8x 8.7x 13.5x 17.5x 13.5x Online Classifieds 37.9% 15.5% 6.1x 5.1x 11.2x 9.7x 20.4x 16.6x Content Providers / Communities 19.1% 22.3% 3.5x 2.7x 9.7x 11.4x 24.0x 18.7x Ecommerce 20.5% 22.4% 2.9x 2.4x 13.8x 11.2x 27.6x 23.7x Global Internet Leaders 38.7% 27.9% 4.9x 3.9x 14.5x 11.5x 21.3x 17.1x IiEiInteractive Entertainment 14.7% (9.0%) 101.0x 080.8x 494.9x 737.3x 22.9 x 13.1 x Intermediation and Comparison 15.3% 28.9% 3.9x 3.0x 11.0x 11.8x 25.1x 19.0x Online Gambling 27.9% 11.5% 2.0x 1.9x 6.7x 6.4x 12.7x 11.6x Online Marketing 16.4% 6.2% 1.8x 1.5x 9.8x 7.8x 17.6x 13.2x Online Travel 24.1% 11.4% 2.5x 2.2x 9.6x 8.5x 17.9x 14.7x 2 Software and IT Services
Last 30 Days Performance
Large Cap IT Services 11.3% Financi al S oft ware 10.1% 15% Offshore IT Services 8.3% Mid Cap IT S ervices 8.2 % European Large Cap Software 6.3% Healthcare Software 5.2% Enterprise Applications 5.1% Security Software 1.7% 10%
5%
0%
(5%) 07 Aug 13 Aug 19 Aug 25 Aug 31 Aug 06 Sep European Large Cap Software Financial Software Enterprise Applica tions Healthcare Software Security Software Large Cap IT Services Mid Cap IT Services Offshore IT Services
Last Twelve Months Performance
European Large Cap Software 26.7% Large Cap IT Services 26.0% Financial Software 19.2% Healthcare Software 12.7% Offshore IT Services 11.0% 30% Enterprise Applications 9.1% Mid Cap IT Services 8.0% 25% Security Software (3.7% )
20%
15%
10%
5%
0%
(5%)
(10%)
(15%)
(20%) Sep 2011 Dec 2011 Mar 2012 Jun 2012 Sep 2012 European Large Cap Software Financial Software Enterprise Applications Healthcare Software Security Software Large Cap IT Services Mid Cap IT Services Offshore IT Services Source: Capital IQ, 7 September 2012. 3 Software and IT Services (Continued)
Market Enterprise CY2012E EV / Revenue EV / EBITDA P / E Cap ($m) Value ($m) EBITDA Margin Growth CY2012E CY2013E CY2012E CY2013E CY2012E CY2013E
European Large Cap Software SAP 81,839 82,335 33.9% 11.5% 4.0x 3.6x 11.8x 10.2x 17.3x 15.1x Dassault Systemes 12,275 10,560 32.5% 15.2% 4.0x 3.7x 12.4x 11.1x 23.1x 20.2x Sage 6,038 5,843 28.6% 5.3% 2.7x 2.5x 9.3x 8.8x 14.8x 13.5x Software AG 3,173 3,193 28.0% (4.4%) 2.3x 2.2x 8.2x 7.5x 13.5x 12.1x Aveva 2,076 1,789 32.9% 18.5% 5.2x 4.7x 15.8x 13.8x 26.3x 23.0x Micro Focus 1,422 1,392 41.6% (1.2%) 3.2x 3.2x 7.8x 7.6x 11.4x 10.5x Temenos 1,056 1,221 25.1% (7.9%) 2.7x 2.6x 10.9x 9.4x 18.3x 14.5x Mean 31.8% 5.3% 3.5x 3.2x 10.9x 9.8x 17.8x 15.6x Median 32.5% 5.3% 3.2x 3.2x 10.9x 9.4x 17.3x 14.5x
Financial Software Intuit 17, 462 17, 217 37. 6% 73%7.3% 40x4.0x 36x3.6x 10. 6x 95x9.5x 19. 4x 17. 4x Temenos 1,056 1,221 25.1% (7.9%) 2.7x 2.6x 10.9x 9.4x 18.3x 14.5x Fidessa 869 788 21.7% 4.2% 1.7x 1.6x 7.9x 7.4x 19.0x 17.2x SimCorp 835 788 24.9% 7.0% 2.9x 2.7x 11.8x 10.3x 18.9x 15.8x Innovation 316 274 12.8% 15.4% 0.8x 0.8x 6.6x 5.7x 17.5x 14.5x Microgen 174 130 13.2% (7.8%) 2.4x 2.2x 8.7x 7.9x 14.9x 14.5x Linedata 173 171 22.7% 3.3% 0.9x 0.9x 4.0x 3.8x 9.4x 8.2x StatPro 98 105 19.8% 2.6% 2.1x 2.0x 10.5x 9.9x 18.0x 16.1x Mean 22.2% 3.0% 2.2x 2.1x 8.9x 8.0x 16.9x 14.8x Median 22.2% 3.8% 2.2x 2.1x 9.6x 8.6x 18.1x 15.2x
Enterprise Applications Guidewire Software 1,648 1,442 12.5% 26.0% 5.6x 4.7x 45.2x 37.4x NM NM Jive Software 906 760 (17.3%) 48.6% 6.8x 5.0x NM NM NM NM SDL 841 850 17.4% 23.3% 1.9x 1.8x 11.2x 10.0x 16.4x 14.7x Unit 4 790 945 19.6% 1.7% 1.6x 1.5x 8.0x 7.0x 23.9x 16.2x Exact 500 437 21.7% (0.4%) 1.6x 1.5x 7.2x 6.4x 13.6x 11.4x IFS 405 385 13.6% 10.0% 0.9x 0.9x 6.9x 5.8x 16.4x 12.9x Kofax 375 293 18.6% 11.2% 1.1x 1.0x 5.8x 5.4x 13.9x 11.5x F-Secure 347 314 20.8% 7.9% 1.6x 1.4x 7.5x 6.7x 15.9x 12.8x Cegid 154 249 23.9% 1.3% 0.7x 0.7x 3.0x 2.9x 7.6x 5.0x
Mean 14.5% 14.4% 2.4x 2.1x 11.8x 10.2x 15.4x 12.1x Median 18.6% 10.0% 1.6x 1.5x 7.3x 6.5x 15.9x 12.8x
Healthcare Software McKesson 20,887 22,454 2.5% 4.7% 0.2x 0.2x 7.2x 6.7x 12.5x 11.4x Cerner 12,898 12,094 31.2% 20.6% 4.6x 4.1x 14.8x 12.6x 32.1x 27.1x Allscripts Healthcare Solutions 1,867 2,238 22.9% 3.2% 1.5x 1.4x 6.5x 5.8x 14.3x 12.1x CompuGroup 847 1,147 22.6% 13.8% 2.0x 1.9x 8.7x 7.9x 12.5x 11.8x Emis 710 687 34.5% 21.4% 5.0x 4.4x 14.4x 12.7x 24.9x 21.7x Advanced Computer Software 331 333 23.7% 10.8% 2.0x 1.9x 8.3x 7.8x 14.6x 13.6x Cegedim 280 872 15.6% (2.7%) 0.7x 0.7x 4.8x 4.3x 7.0x 5.1x Mean 21.9% 10.3% 2.3x 2.1x 9.2x 8.3x 16.8x 14.7x Median 22.9% 10.8% 2.0x 1.9x 8.3x 7.8x 14.3x 12.1x
Sources: Capital IQ, 7 September 2012; Brokers’ reports. 4 Software and IT Services (Continued)
Market Enterprise CY2012E EV / Revenue EV / EBITDA P / E Cap ($m) Value ($m) EBITDA Margin Growth CY2012E CY2013E CY2012E CY2013E CY2012E CY2013E
Security Software Symantec 13,281 12,298 29.7% 0.1% 1.8x 1.8x 6.2x 5.5x 11.8x 11.0x Check Point 9,884 8,512 59.4% 9.0% 6.3x 5.7x 10.6x 9.8x 15.3x 13.7x Trend Micro 3,504 2,071 31.5% (5.0%) 1.7x 1.7x 5.5x 5.0x 18.5x 16.8x AVG Technologies 561 634 29.6% 25.0% 1.9x 1.6x 6.3x 5.6x 8.7x 7.4x F-Secure 347 314 20.8% 7.9% 1.6x 1.4x 7.5x 6.7x 15.9x 12.8x
Mean 34.2% 7.4% 2.6x 2.5x 7.2x 6.5x 14.0x 12.4x Median 29.7% 7.9% 1.8x 1.7x 6.3x 5.6x 15.3x 12.8x
Large Cap IT Services Accenture 40,907 35,763 15.9% 6.1% 1.3x 1.2x 8.0x 7.5x 16.6x 15.3x CGI 8,202 8,863 16.0% 56.2% 1.4x 0.8x 8.5x 5.8x 14.7x 11.1x Capita Group 7,743 10,201 16.9% 16.2% 1.9x 1.8x 11.4x 10.7x 14.2x 13.2x Cap Gemini 6,196 6,230 9.3% 4.7% 0.5x 0.5x 5.1x 4.8x 11.8x 10.9x Atos Origin 5,284 5,191 10.2% 27.6% 0.5x 0.5x 4.5x 4.1x 12.7x 10.8x Computer Sciences 5,132 6,895 10.1% (2.4%) 0.4x 0.4x 4.3x 3.8x 25.1x 12.0x
Mean 13.1% 18.1% 1.0x 0.9x 7.0x 6.1x 15.8x 12.2x Median 13.1% 11.1% 0.9x 0.6x 6.6x 5.3x 14.4x 11.6x
Mid Cap IT Services Splunk 3,702 3,434 (2.1%) 53.3% 18.5x 13.9x NM NM NM NM Indra Sistemas 1,660 2,439 9.8% 6.7% 0.7x 0.6x 6.7x 6.1x 9.7x 8.1x Tieto 1,271 1,379 10.8% (1.0%) 0.6x 0.6x 5.5x 4.7x 16.3x 10.3x Sopra 593 953 10.0% 9.3% 0.6x 0.6x 6.4x 6.0x 7.4x 6.7x Groupe Steria 429 714 7.8% 8.3% 0.3x 0.3x 3.9x 3.5x 6.1x 5.0x GFI Informatique 197 278 6.5% (8.7%) 0.3x 0.3x 5.2x 4.8x 8.0x 7.0x Mean 7.1% 11.3% 3.5x 2.7x 5.5x 5.0x 9.5x 7.5x Median 8.8% 7.5% 0.6x 0.6x 5.5x 4.8x 8.0x 7.0x
Offshore IT Services Tata 49,073 47,505 29.2% 23.9% 4.5x 4.0x 15.3x 14.0x 21.0x 18.8x Infosys 25,668 21,949 30.9% 16.3% 3.1x 2.8x 10.0x 9.4x 15.0x 14.0x Cognizant 20,064 17,717 20.5% 20.0% 2.4x 2.1x 11.8x 10.1x 19.9x 17.0x Wipro 16,715 15,369 19.8% 14.5% 2.0x 1.8x 10.1x 9.6x 14.9x 14.4x HCL 7,228 7,115 19.5% 25.6% 1.7x 1.5x 8.5x 8.2x 13.7x 12.8x Satyam 2,122 1,592 19.8% 15.8% 1.2x 1.1x 6.0x 5.6x 9.2x 10.3x
Mean 23.3% 19.4% 2.5x 2.2x 10.3x 9.5x 15.6x 14.5x Median 20.2% 18.2% 2.2x 1.9x 10.1x 9.5x 14.9x 14.2x
Sources: Capital IQ, 7 September 2012; Brokers’ reports. 5 Communications
Last 30 Days Performance
Digital Broadband 9.4% Mobile Infrastructure Software 2.1% Mobile Content / Solutions Providers (3.9%) 15% Diversified Communication Equipment (7.1% )
10%
5%
0%
(5%)
(10%)
(15%) 07 Aug 13 Aug 19 Aug 25 Aug 31 Aug 06 Sep
Digital Broadband Diversified Communication Equipment
Mobile Infrastructure Software Mobile Content / Solutions Providers
LTlMhPfLast Twelve Months Performance
Mobile Content / Solutions Providers 25.0% Digital Broadband 13.2% Mobile Infrastructure Software 12.0% 120% Diversified Communication Equipment (28.0% ) 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% (10%) (20%) (30%) (40%) (50%) Sep 2011 Dec 2011 Mar 2012 Jun 2012 Sep 2012
Digital Broadband Diversified Communica tion Equipment
Mobile Infrastructure Software Mobile Content / Solutions Providers
Source: Capital IQ, 7 September 2012. 6 Communications (Continued)
Market Enterprise CY2012E EV / Re ve nue EV / EB ITDA P / E Cap ($m) Value ($m) EBITDA Margin Growth CY2012E CY2013E CY2012E CY2013E CY2012E CY2013E
Di gi tal Broadband Logitech 1,505 1,143 8.3% (3.2%) 0.5x 0.5x 6.0x 5.0x 18.0x 12.4x TomTom 1,027 1,271 15.3% (14.7%) 0.9x 0.9x 5.9x 5.7x 9.5x 9.1x Pace 848 1,096 9.0% 1.1% 0.5x 0.5x 5.3x 4.7x 9.4x 8.6x Technicolor 848 2,159 13.9% 0.1% 0.5x 0.5x 3.5x 3.2x 5.5x 6.2x Kudelski 558 806 12.4% (5.2%) 0.9x 0.9x 7.1x 6.1x 15.5x 12.2x Parrot 351 230 16.3% 6.2% 0.7x 0.6x 4.0x 3.6x 11.2x 10.2x Advanced Digital Broadcast 63 46 8.5% (3.9%) 0.1x 0.1x 1.3x 1.0x 24.0x 6.7x
Mean 12.0% (2.8%) 0.6x 0.6x 4.7x 4.2x 13.3x 9.3x Median 12.4% (3.2%) 0.5x 0.5x 5.3x 4.7x 11.2x 9.1x
Diversified Communication Equipment LM Ericsson Telephone 29,548 24,440 12.0% 3.5% 0.7x 0.7x 5.8x 5.2x 15.0x 11.2x Nokia 9,755 5,656 (1.3%) (23.7%) 0.1x 0.1x NM 3.6x NM NM Alcatel-Lucent 2,697 3,611 5.6% (8.7%) 0.2x 0.2x 3.5x 2.6x NM 18.8x CIENA 1,469 2,244 5.3% 9.3% 1.2x 1.1x 22.3x 14.3x NM 23.1x ADTRAN 1,267 1,107 16.4% (2.5%) 1.6x 1.4x 9.6x 7.3x 15.2x 11.6x
Mean 7.6% (4.4%) 0.8x 0.7x 10.3x 6.6x 15.1x 16.2x Median 5.6% (2.5%) 0.7x 0.7x 7.7x 5.2x 15.1x 15.2x
Mobile Infrastructure Software QUALCOMM 105,488 93,467 40.6% 20.4% 4.8x 4.2x 11.8x 10.4x 16.9x 14.6x VeriSig n 7,652 6,912 60.4% 13.3% 7.9x 7.1x 13.1x 11.5x 26.0x 21.8x Amdocs 5,476 4,581 20.4% 1.7% 1.4x 1.3x 6.9x 6.7x 12.0x 11.1x Comverse Technology 1,399 1,708 17.6% (0.5%) 1.1x 1.0x 6.0x 5.5x 19.1x 11.2x Synchronoss Technologies 898 807 31.7% 19.3% 2.9x 2.4x 9.3x 7.6x 21.5x 18.0x Sonus Networks 543 202 0.5% 2.6% 0.8x 0.7x NM NM NM NM TeleCommunication Systems 118 192 9.6% 12.0% 0.4x 0.4x 4.2x 3.6x 7.7x 5.5x Redknee Solutions 76 62 14.6% 1.9% 1.0x 0.9x 6.9x 5.6x 12.2x 10.9x Smith Micro Software 56 24 (44.1%) (24.3%) 0.5x 0.4x NM NM NM NM
Mean 16.8% 5.2% 2.3x 2.0x 8.3x 7.3x 16.5x 13.3x Median 17.6% 2.6% 1.1x 1.0x 6.9x 6.7x 16.9x 11.2x
Mobile Content / Solutions Providers Opera Software 756 694 26.2% 49.0% 3.1x 2.4x 12.0x 8.1x 22.5x 14.6x GameLoft 490 434 17.1% 22.7% 1.7x 1.5x 9.7x 7.5x 21.6x 16.3x Dada 57 89 12.8% (52.1%) 0.9x 0.8x 6.9x 6.2x NM 26.2x
Mean 18.7% 6.5% 1.9x 1.6x 9.5x 7.3x 22.1x 19.0x Median 17.1% 22.7% 1.7x 1.5x 9.7x 7.5x 22.1x 16.3x
Sources: Capital IQ, 7 September 2012; Brokers’ reports. 7 Internet and Digital Media
Last 30 Days Performance
Online Gambling 19.8% Online Classifieds 8.5% Intermediation and Comparison 8.4% Interactive Entertainment 7.2% 20% Online Marketing 4.8% Ecommerce 4.2% Global Internet Leaders 3.6% Chinese Internet Leaders 0.2% Content Providers / Communities (2.0% ) Online Travel (11.2% )
10%
0%
(10%)
(20%) 07 Aug 13 Aug 19 Aug 25 Aug 31 Aug 06 Sep Global Internet Leaders Ecommerce Online Travel Online Ma rketing Content Providers / Communities Intermediation and Comparison Online Classifieds Chinese Internet Leaders Online Ga mbling Interactive Entertainment LtTlLast Twelve M onth thPfs Performance
Online Gambling 48.2% Intermediation and Comparison 31.4% Global Internet Leaders 28.9% Online Classifieds 8.6% Online Travel 4.5% 50% Online Marketing 3.5% Ecommerce (1.5%) Chinese Internet Leaders (10.0% ) 40% Content Providers / Communities (11.1% ) Interactive Entertainment (16.3% ) 30%
20%
10%
0%
(10%)
(20%)
(30%)
(40%) Sep 2011 Dec 2011 Mar 2012 Jun 2012 Sep 2012 Global Internet Leaders Ecommerce Online Travel Online Marketing Content Providers / Communities Intermediation and Comparison Online Classifieds Chinese Internet Leaders Online Ga mbling Interactive Entertainment
Source: Capital IQ, 7 September 2012. 8 Internet and Digital Media (Continued)
Market Enterprise CY2012E EV / Re ve nue EV / EB ITDA P / E Cap ($m) Value ($m) EBITDA Margin Growth CY2012E CY2013E CY2012E CY2013E CY2012E CY2013E
Global Internet Leaders AApplepple 637,8637,84949 6610,19510,195 37.6% 36.0% 3.73.7xx 3.3.1x1x 9.99.9xx 8.78.7xx1414.9x.9x1212.7x.7x Microsoft 259,466 210,197 42.4% 4.6% 2.8x 2.5x 6.6x 5.9x 11.0x 9.5x Google 230,935 197,334 38.7% 31.9% 3.9x 3.2x 10.1x 8.5x 16.5x 14.1x Amazon 117,148 112,178 5.3% 28.3% 1.8x 1.4x 33.9x 24.3x NM NM eBay 63,454 59,782 32.8% 21.0% 4.3x 3.7x 13.0x 11.3x 21.0x 18.1x Facebook 40,662 31,180 53.6% 32.8% 6.3x 4.9x 11.8x 9.0x 39.3x 30.6x Baidu 38,291 36,027 56.5% 58.2% 10.1x 7.2x 17.9x 13.1x 23.3x 17.5x Yahoo! 18,030 16,202 36.5% 0.6% 3.7x 3.6x 10.0x 9.5x 15.2x 13.4x Yandex 7,492 7,124 44.9% 37.8% 7.8x 5.8x 17.4x 12.8x 29.1x 20.7x
Mean 38.7% 27.9% 4.9x 3.9x 14.5x 11.5x 21.3x 17.1x Median 38.7% 31.9% 3.9x 3.6x 11.8x 9.5x 18.8x 15.8x
Ecommerce Amazon 117,148 112,178 5.3% 28.3% 1.8x 1.4x 33.9x 24.3x NM NM eBay 63,454 59,782 32.8% 21.0% 4.3x 3.7x 13.0x 11.3x 21.0x 18.1x Facebook 40,662 31,180 53.6% 32.8% 6.3x 4.9x 11.8x 9.0x 39.3x 30.6x Mail.ru 7,501 6,480 51.1% 39.2% 9.5x 7.6x 18.6x 14.8x 30.1x 23.4x IAC 4,501 3,756 17.4% 34.8% 1.4x 1.2x 7.9x 6.7x 18.2x 14.6x Mercadolibre 3,659 3,492 36.4% 27.7% 9.2x 7.2x 25.2x 19.5x 36.8x 29.0x Netflix 3,147 2,733 4.8% 13.3% 0.8x 0.7x 15.6x 8.9x NM NM Groupon 2,791 1,604 12.8% 48.1% 0.7x 0.6x 5.3x 3.9x 24.4x 11.0x Vis t a p rin t 1, 258 1, 425 12. 6% 20. 7% 13x1.3x 11x1.1x 10. 2x 91x9.1x 22. 6x 17. 5x Shutterfly 1,154 1,036 17.2% 25.5% 1.8x 1.5x 10.2x 7.9x 26.6x 21.8x OpenTable 1,045 973 42.3% 16.4% 6.0x 5.1x 14.2x 11.5x 28.9x 24.0x YOOX 674 669 9.6% 28.5% 1.4x 1.1x 14.6x 10.9x 39.8x 28.6x Digital River 586 296 18.8% (1.5%) 0.8x 0.7x 4.1x 3.5x 16.2x 14.4x Ocado 574 574 5.3% 14.6% 0.5x 0.4x 9.9x 7.4x NM NM Blue Nile 521 468 5.9% 10.6% 1.2x 1.1x 20.1x 16.8x NM 48.0x Overstock 216 173 2.4% (1.7%) 0.2x 0.1x 6.7x 5.2x 27.1x 16.3x
Mean 20.5% 22.4% 2.9x 2.4x 13.8x 11.2x 27.6x 23.7x Median 15.0% 23.2% 1.4x 1.2x 12.4x 9.1x 26.8x 22.6x
Online Travel Priceline 30,969 28,583 37.0% 19.6% 5.5x 4.7x 14.9x 12.3x 20.6x 17.2x Expedia 7,345 6,308 19.6% 12.6% 1.6x 1.5x 8.2x 7.3x 18.2x 15.5x Ctrip 2,522 1,888 24.5% 18.2% 2.9x 2.4x 11.8x 10.0x 17.8x 14.4x Travelzoo 372 318 23.2% 4.1% 2.0x 1.8x 8.7x 8.7x 16.4x 16.4x Orbitz 285 555 16.1% 2.4% 0.7x 0.7x 4.4x 4.0x 16.3x 10.0x
Mean 24.1% 11.4% 2.5x 2.2x 9.6x 8.5x 17.9x 14.7x Median 23.2% 12.6% 2.0x 1.8x 8.7x 8.7x 17.8x 15.5x
Online Marketing HAHomeAway 1, 913 1, 691 28. 6% 21. 6% 606.0x 505.0x 21. 1x 16. 4x NM NM ValueClick 1,228 1,312 31.5% 23.7% 1.9x 1.7x 6.1x 5.5x 10.2x 9.4x Constant Contact 629 548 14.4% 18.5% 2.2x 1.8x 15.0x 10.9x 39.1x 24.9x LBI 514 525 17.0% 23.8% 1.7x 1.5x 9.9x 8.7x 17.0x 14.3x 1000mercis 147 113 33.1% (3.9%) 2.4x 2.3x 7.2x 6.7x 13.6x 12.7x Marchex 128 95 13.3% (6.3%) 0.7x 0.6x 5.2x 4.4x NM NM Hi-Media 121 157 8.8% (13.0%) 0.6x 0.5x 6.5x 5.7x 9.9x 8.7x TradeDoubler 100 73 2.5% (11.8%) 0.2x 0.2x 7.8x 4.2x 16.0x 9.0x ad pepper media 23 9 (1.7%) 3.1% 0.1x 0.1x NM 7.2x NM NM
Mean 16.4% 6.2% 1.8x 1.5x 9.8x 7.8x 17.6x 13.2x MdiMedian 14. 4% 31%3.1% 171.7x 151.5x 757.5x 676.7x 14. 8x 11. 0x
Content Providers / Communities LinkedIn 12,583 11,966 20.7% 81.3% 12.8x 8.6x NM 36.5x NM NM Pandora Media 1,768 1,686 (0.7%) 55.9% 3.9x 2.7x NM NM NM NM Perform Group 1,457 1,421 25.8% 50.7% 5.9x 4.5x 22.9x 15.1x 34.4x 22.7x Demand Media 796 702 26.7% 16.7% 1.9x 1.7x 7.0x 6.1x 27.6x 22.2x WebMD Health 738 574 14.0% (17.1%) 1.2x 1.2x 8.9x 8.8x NM NM Meetic 360 300 22.9% (4.1%) 1.3x 1.3x 5.8x 5.4x 10.9x 10.0x Move 341 296 13.7% 1.2% 1.5x 1.4x 10.9x 8.7x 22.0x 16.2x XING 280 210 30.5% 11.0% 2.2x 2.0x 7.3x 6.0x 18.2x 14.5x XO Group 198 128 18. 4% 46%4.6% 101.0x 090.9x 545.4x 454.5x 30. 8x 26. 7x
Mean 19.1% 22.3% 3.5x 2.7x 9.7x 11.4x 24.0x 18.7x Median 20.7% 11.0% 1.9x 1.7x 7.3x 7.4x 24.8x 19.2x
Sources: Capital IQ, 7 September 2012; Brokers’ reports. 9 Internet and Digital Media (Continued)
Market Enterprise CY2012E EV / Re ve nue EV / EB ITDA P / E Cap ($m) Value ($m) EBITDA Margin Growth CY2012E CY2013E CY2012E CY2013E CY2012E CY2013E
Intermediation and Comparison BBankrateankrate 11,776,776 11,891,891 331.0%1.0% 225.2%5.2% 3.63.6xx 3.03.0xx1111.8x.8x 9.59.5xx 33.833.8xx227.0x7.0x Liquidity Services 1,672 1,629 23.8% 38.2% 3.3x 2.7x 13.8x 11.5x 28.2x 23.5x Zillow 1,259 1,190 19.8% 77.0% 10.4x 7.0x NM 30.1x NM NM Moneysupermarket 1,161 1,103 29.8% 17.0% 3.4x 3.1x 11.4x 9.4x 17.9x 14.6x Angie's List 562 500 (34.1%) 75.5% 3.2x 2.2x NM NM NM NM eHealth 323 201 15.4% 5.9% 1.3x 1.2x 8.3x 6.9x 26.2x 20.6x Gruppo MutuiOnline 152 121 21.8% (36.5%) 2.1x 1.6x 9.6x 3.7x 19.2x 9.5x
Mean 15.3% 28.9% 3.9x 3.0x 11.0x 11.8x 25.1x 19.0x Median 21.8% 25.2% 3.3x 2.7x 11.4x 9.4x 26.2x 20.6x
Online Classifieds Rightmove 2,592 2,568 71.1% 22.4% 13.9x 12.5x 19.6x 17.4x 26.8x 23.4x SEEK 2,354 2,974 42.3% 33.4% 5.6x 4.7x 13.3x 11.4x 16.3x 13.8x Carsales.au 1,823 1,781 55.1% 20.8% 8.6x 7.6x 15.6x 13.7x 22.8x 20.0x Yelp 1,520 1,397 2.7% 22.4% 10.3x 7.1x NM NM NM NM 51job 1,274 916 34.9% 9.7% 4.0x 3.4x 11.4x 9.0x 16.7x 13.9x SouFun 1,063 1,142 42.2% 19.9% 2.8x 2.4x 6.6x 5.6x 7.7x 6.6x Monster 875 887 15.2% (10.0%) 0.9x 0.9x 6.1x 5.5x 37.3x 25.1x Dice 496 455 39.7% 5.5% 2.4x 2.3x 6.1x 5.7x 15.0x 13.4x
Mean 37.9% 15.5% 6.1x 5.1x 11.2x 9.7x 20.4x 16.6x Median 40.9% 20.3% 4.8x 4.1x 11.4x 9.0x 16.7x 13.9x
Chinese Internet Leaders Tencent 57,848 54,913 42.5% 50.4% 8.1x 6.3x 19.1x 15.1x 27.7x 21.8x Baidu 38,291 36,027 56.5% 58.2% 10.1x 7.2x 17.9x 13.1x 23.3x 17.5x Netease 6,562 4,296 49.6% 15.8% 3.3x 2.8x 6.6x 5.6x 11.1x 9.8x Sina 4,215 3,512 4.5% 14.5% 6.4x 5.1x NM 34.3x NM NM Focus Media 3,140 2,715 39.5% 28.2% 2.8x 2.3x 7.0x 5.7x 10.7x 9.0x Youku Tudou 2,078 1,534 (10.6%) 86.3% 5.9x 3.4x NM 46.0x NM NM Sohu 1,610 1,044 26.8% 23.0% 1.0x 0.8x 3.7x 3.1x 20.7x 12.1x Renren 1,482 560 (44.8%) 51.2% 3.1x 2.2x NM NM NM NM SouFun 1,063 1,142 42.2% 19.9% 2.8x 2.4x 6.6x 5.6x 7.7x 6.6x Dangdang 405 194 (9.4%) 46.4% 0.2x 0.2x NM NM NM NM Jiayuan 155 60 14.7% 20.1% 1.0x 0.8x 6.6x 4.6x 18.4x 14.5x Taomee 136 14 13.8% (8.1%) 0.3x 0.3x 2.4x 1.7x 20.2x 17.0x Mean 18.8% 239.0% 3.8x 2.8x 8.7x 13.5x 17.5x 13.5x Median 20.7% 25.6% 3.0x 2.3x 6.6x 8.7x 19.3x 13.3x
Online Gambling Playtech 1,830 1,748 53.4% 27.7% 4.3x 4.1x 8.1x 8.0x 9.6x 9.5x bwin.party digital entertainment 1,243 963 20.2% 0.4% 0.9x 0.9x 4.6x 4.4x 8.8x 8.1x Betfair 1,176 959 22.1% 5.7% 1.5x 1.4x 6.7x 6.0x 19.1x 16.2x 888 517 446 16. 0% 12. 2% 12x1.2x 11x1.1x 75x7.5x 72x7.2x 13. 3x 12. 5x
Mean 27.9% 11.5% 2.0x 1.9x 6.7x 6.4x 12.7x 11.6x Median 21.1% 9.0% 1.3x 1.3x 7.1x 6.6x 11.5x 11.0x
Interactive Entertainment Activision 13,355 10,163 35.4% 9.0% 2.2x 2.1x 6.1x 5.6x 11.9x 11.2x Electronic Arts 4,470 3,575 12.0% (5.0%) 0.9x 0.8x 7.5x 4.4x 23.7x 9.5x Zynga 2,188 1,071 18.3% 7.8% 0.9x 0.8x 4.8x 4.1x 42.4x 27.5x Take-Two Interactive Software 950 904 (4.0%) (25.3%) 1.1x 0.5x NM 3.5x NM 5.5x Ubisoft Entertainment 765 640 34.5% 7.4% 0.4x 0.4x 1.2x 1.1x 13.7x 11.8x THQ 30 109 (8.1%) (47.6%) 0.2x 0.3x NM 24.8x NM NM
Mean 14.7% (9.0%) 1.0x 0.8x 4.9x 7.3x 22.9x 13.1x Median 15.1% 1.2% 0.9x 0.7x 5.5x 4.2x 18.7x 11.2x
Sources: Capital IQ, 7 September 2012; Brokers’ reports. 10 TMT Group Overview and Disclosures
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