2014 AWARD WINNER: BOUTIQUE INVESTMENT BANKING FIRM OF THE YEAR
Mobile M&A and Valuation Update
Q4 2014
BOSTON CHICAGO LONDON LOS ANGELES PHILADELPHIA SAN DIEGO SILICON VALLEY TAMPA
Capstone Partners Over a Decade of M&A Excellence 1 Investment Banking Advisors WORLD CLASS WALL STREET EXPERTISE.1 BUILT FOR THE MIDDLE MARKET.TM Table of Contents
Section Page Introduction Research Coverage: Mobile 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 15 Notable M&A Transactions 16 Most Active Buyers 17-18
Public Company Valuation & Operating Metrics Mobile 140 Public Company Universe 20-22 Recent IPOs 23-27 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 51-57 Technology & Telecom Team 59-61
Capstone Partners Over a Decade of M&A Excellence 2 Investment Banking Advisors 2 Introduction
Capstone Partners Over a Decade of M&A Excellence 3 Investment Banking Advisors WORLD CLASS WALL STREET EXPERTISE.3 BUILT FOR THE MIDDLE MARKET.TM Research Coverage: Mobile
Capstone’s Technology & Telecom Group focuses its research efforts on the following market segments:
Enterprise SaaS & Mobile Consumer Internet Cloud
App Stores & Content Aggregators Carrier Back Office Games / Virtual Goods M-Commerce Enablement Messaging & VoIP Mobile / Local Marketing E-Commerce Consumer, IT & Mobile Devices Telecom Hardware Mobile OS & Utility SW Mobility & Monitoring Portals & Social Networks Search, Referral & Navigation Video, Music & eBooks Wireless Network Equipment Wireless Network Operators Wireless Semiconductors
Capstone Partners Over a Decade of M&A Excellence 4 Investment Banking Advisors 4 Capstone Partners KeyInvestment Takeaways Banking Advisors – M&A Activity & Multiples
M&A dollar volume has increased to $118.0B in 2014 from $100.7B in 2013 Although H2’14 M&A dollar volume was weaker than prior years, strong M&A activity in H1’14 fueled the total dollar volume, bringing it to a five year high Transaction volume reaches a new 5 year high, just shy of 600 transactions Private company deal volume of 579 in 2014 sets a new five year high 17 billion- dollar private deals in 2014 sets a new five year high Public target M&A transaction volume remains stable at 13 deals in 2014 Median deal size rose to $625M in LTM with deal mix diverging toward the high and low ends of the range M&A valuations vary considerably across the various Mobile segments, with Wireless Tower and hot Software segments commanding more than 6x revenue while the majority of segments trade below 4x Notable M&A transactions in Q4’14 Altice / Portugal Telecom ($9.1B) American Tower / Airtel (Assets) ($1.1B) BCE / Glentel ($528M)
AT&T / Iusacell ($2.5B) Churchill Downs / Big Fish Games ($835M) Raytheon / Blackbird Tech ($420M) Qualcomm / CSR ($2.5B) Mozido / PayEase ($750M) American Tower / TIM (Assets) ($1.2B) Yahoo! / BrightRoll ($640M)
Most active buyers include Yahoo!, Google, Apple, Facebook, Intel, American Tower, Twitter, AT&T and Dropbox Capstone expects the robust M&A activity and attractive exit valuations in Mobile to continue through 2015 There is some risk that an abrupt market correction could negatively affect the market in mid/late 2015
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 five IPOs added to Capstone’s Mobile 140 Post IPO performances were mixed among the 5 companies added to the Mobile 140 Mobile 140 median has underperformed the NASDAQ for the first time in five years The Mobile 140 median experienced a 4.2% decrease, while the NASDAQ gained 5.4% in Q4 Wireless Semis posted the strongest performance with a 7.4% gain over the last quarter with Mobile / Local Marketing coming in second with a 6% gain Median LTM Revenue Multiple decreased to 3.0x Medians vary significantly with Wireless Towers at 10.7x and Carrier Back Office at just 1.2x Public companies within the Mobile sector continue to trade at a healthy EBITDA multiple of 11.5x Search, Referral & Navigation trade at a premium LTM EBITDA multiple of 32.5x Median LTM P/E multiple decreased slightly to 18.4x for 2014 P/E multiples have recovered after a 2011-2012 drop as investors are valuing on future profit growth expectations Mobile 140 median revenue growth slowed to 11.2% LTM with growth of 11.0% NTM expected Six segments are projecting median NTM revenue growth of over 15% Median EBITDA growth increased 8.7% in LTM with strong NTM growth projected Median gross margins improved to 55.3%, a new five year high Median EBITDA margins stayed constant at 21.0%, despite companies improving EBITDA margins outnumbering companies with declines
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 6 Investment Banking Advisors 6 Capstone Partners Investment Banking Advisors
M&A Activity & Multiples
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
M&A dollar volume has surged to $118B in 2014 from $100.7B in 2013 Although H2’14 M&A dollar volume was weaker than prior years, strong M&A activity in H1’14 fueled the total dollar volume, bringing it to a five year high A lack of large public telecom deals in 2014 drove the drop from 2012 and 2013 levels
$140,000
$120,000 $12,444
$100,000
$80,000 $43,837
$60,000 $51,530 $22,005 $105,724
Total TransactionValue $40,000 $44,921
$10,534 $56,896 $20,000 $35,319 $40,297 $25,194 $18,724 $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
Transaction volume reaches a new 5 year high, just shy of 600 transactions M-Commerce Enablement and Mobile / Local Marketing has grown from a combined 41 deals in 2009 to 144 deals in 2014 as marketing and commerce are increasingly moving towards mobile devices Mobile OS & Utility Software surged to 101 deals in 2014 Deal volume fell for Carrier Back Office, Portals & Social Networks, and Search, Referral & Navigation 700
600 9 16 6 6 60 23 6 500 19 61 51 17 14 11 22 10 7 13 36 20 17 19 37 400 34 46 5 51 45 71 35 16 7 18 11 16 41 21 67 300 80 20 38 17 25 103 81 38 6 33 72 Transactions 18 33 60 9 200 33 11 64 50 31 16 15 41 34 48 88 58 30 7 66 6 15 39 42 100 26 29 26 30 25 18 23 25 43 15 34 42 56 33 36 26 13 13 27 11 22 12 11 20 10 0 2009 2010 2011 2012 2013 2014 Apps Stores & Content Aggregators Carrier Back Office m-Commerce Enablement Messaging & VoIP Mobile / Local Marketing Mobile Devices Mobile Games / Virtual Goods Mobile OS & Utility Software Mobility & Monitoring Portals & Social Networks Search, Referral & Navigation Video, Music & eBooks Wireless Network Equipment Wireless Network Operators Wireless Semis Wireless Tower
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 of 578 in 2014 sets a new five year high 17 billion dollar private deals in 2014 set a new five year high Mid-market deal volume increased significantly with 65 deals compared to 46 in 2013
100% 6 6 4 3 14 16 17 5 2 6 90% 5 9 10 14 9 11 15 15 7 80% 20 10 10 12 23 16 26 70% 12 13 6 21 14 60% 25 15 21 21 16 50% 25 32 34 40% 27 22 30 30% 64 20% 80 49 49 33 48 10%
0% 2009 2010 2011 2012 2013 2014 Total Deals 351 417 534 443 515 578 Deals w/ Value 139 149 201 123 157 179 Median ($M) $11 $20 $19 $32 $26 $30 $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 target M&A transaction volume remains stable with deal mix diverging toward the high and low ends $1B+ transaction activity is at the high end of recent years with five $1B+ deals in LTM Median deal size rose to $625M in 2014 despite deal mix diverging toward the high and low ends of the range
100%
90% 4 6 3 4 4 80% 5
70% 2 1 2 2 60% 2 3 1 4 2 50% 1 2 40% 2 1 2 3 2 1 1 30% 1 2 1 1 20% 2 4 2 1 2 1 10% 1 2 2 1 1 1 1 0% 2009 2010 2011 2012 2013 2014 Total Deals 16 21 12 11 13 13 Median ($M) $349 $68 $541 $384 $607 $625 $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 11 Investment Banking Advisors 11 Capstone Partners LTMInvestment Revenue Banking Advisors Multiples – Private Targets
The Median LTM Revenue Multiple paid for private company targets have increased to 2.7x More premium valuations were in the mid-range ($25M~$250M) deals 25% of Mobile software & services deals have revenue multiples greater than 6.8x Hot companies and sectors can achieve double digit multiples upon exit, but those are the exception with most companies being acquired at more modest multiples 5.0x 4.5x 4.5x
4.0x 3.7x 3.5x 3.1x 3.0x 2.7x 2.5x 2.5x 2.5x 2.2x 2.0x
1.5x 1.2x 1.2x 1.0x 1.0x 0.8x
Median Revenue Multiple Revenue Median 0.6x 0.5x
0.0x 2009 2010 2011 2012 2013 2014 25th % 1.0x 0.6x 1.5x 2.6x 1.6x 0.7x 1.5x 1.1x 0.8x 0.2x 1.2x 0.6x 75th % 5.0x 1.0x 12.8x 5.3x 7.9x 3.6x 3.9x 2.3x 5.4x 0.9x 7.3x 2.2x Software & Services Hardware
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 12 Investment Banking Advisors 12 Capstone Partners LTMInvestment Revenue Banking Advisors Multiples – Public Targets
The Median LTM Revenue Multiple paid for public company targets reached a new five year high at 2.3x Zillow’s acquisition of Trulia for $3.3B was valued at 14.8x LTM Revenue With less than 20 public company target data points in a given year, the median multiple tends to be quite volatile so it is difficult to reliably draw conclusions on M&A valuation trends
3.0x 2.7x
2.5x
2.0x 1.9x 2.0x 1.8x 1.8x 1.6x 1.5x 1.5x 1.4x 1.3x 1.3x 1.0x 1.0x
0.5x Median Revenue Multiple Revenue Median 0.2x
0.0x 2009 2010 2011 2012 2013 2014 25th % 0.5x 0.1x 0.8x 1.1x 1.3x 1.0x 1.1x 1.1x 1.4x 1.2x 1.7x 2.3x 75th % 1.7x 3.3x 3.6x 2.3x 2.0x 3.0x 3.3x 1.9x 2.6x 1.7x 3.1x 3.3x Software & Services Hardware
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 13 Investment Banking Advisors 13 Capstone Partners MedianInvestment Banking Revenue Advisors Multiples by Segment – 2009 to Current
M&A valuations vary considerably across the various Mobile segments The premium multiples paid for Wireless Tower companies are driven by high margins and stable cash flows m-Commerce Enablement, Mobile/Local Marketing and Mobile OS & Utility SW represent the hottest segments in mobile software with median multiples of 4x+
8.0x 7.0x 7.0x 6.7x
6.0x
5.0x 4.3x 4.1x 4.0x 3.5x 3.1x 2.7x 3.0x 2.4x 1.9x 1.8x 2.0x 1.7x 1.7x 1.5x 1.3x 1.3x
1.0x 0.7x Median Revenue Multiple Revenue Median 0.0x
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 14 Investment Banking Advisors 14 Capstone Partners HighestInvestment Banking Revenue Advisors Multiple Transactions for LTM
LTM Multiple Premium Deal Ann. Date Buyer Target Segment Target Description Revenue on $ to 1 Mo Value Multiple Invested Prior
Mobile OS & Provides bring-your-own-device (BYOD) Android and iOS 5/19/14 $130M 65.0x 5.2x NA Utility SW mobile device management (MDM) software for businesses
Mobile OS & Provides bring-your-own-device (BYOD) Android and iOS 10/1/14 $100M 50.0x 8.6x NA Utility SW mobile device management (MDM) SaaS for businesses.
m-Commerce Provides Android, BlackBerry, Windows Phone and iOS mobile 5/27/14 $360M 24.0x* 7.7x NA Enablement bill payment software for consumers
Provides mobile device management (MDM) software and Mobile OS & 1/22/14 mobile application, content and security management $1.5B 15.4x 6.8x NA Utility SW software for various mobile operating systems for businesses Provides a searchable real estate classified ads website that Search, Referral & 7/28/14 lists homes and apartments for rent or sale for consumers in the $3.3B 14.8x NA 48.6% Navigation US through www.trulia.com. Operates a mobile advertising exchange for marketers, Mobile / Local 9/23/14 advertisers, publishers and app and mobile game developers $88M 14.4x 4.5x NA Marketing to buy and sell mobile advertising space. Provides predictive mobile workforce management SaaS for Mobility & 7/31/14 businesses providing in-field service requests in the home $550M 12.2x 5.7x NA Monitoring healthcare, utility, telecommunications and retail sectors.
Provides mobile video game and related development for use 7/2/14 Beijing JMT Mobile Mobile Games $33M 10.7x NA NA on iOS and Android mobile devices for consumers in China.
Provides mobile-focused programmatic demand-side real-time Mobile / Local 10/28/14 bidding (RTB) and data management SaaS for online $60M 8.6x 40.0x NA marketing marketers. Provides mobile, location-based security and device Mobile OS & 9/3/14 management applications, as well as mobile device cloud $233M 8.5x 1.3x NA Utility SW backup and anti-virus, for consumers and telecom carriers.
Sorted by LTM Revenue Multiple Excludes deals with Target company revenue less than $2M (*) CY’13 Revenue Multiple
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 15 Investment Banking Advisors 15 Capstone Partners NotableInvestment Banking M&A Advisors Transactions for Q4’14
LTM Multiple Premium Deal Ann. Date Buyer Target Segment Target Description Revenue on $ to 1 Mo Value Multiple Invested Prior Wireless Provides wireless and wireline telephone, Internet, and cable TV 12/8/14 Network $9.1B 2.7x NA NA service for consumers and businesses in Portugal. Operators Wireless Provides wireless telecommunications services, distributes mobile 11/7/14 Network phones, and provides wireless Internet service for consumers and $2.5B NA NA NA Operators businesses in Mexico. Designs a range of wireless M2M connectivity and 10/15/14 Wireless Semis communications semiconductors for computer and electronics $2.5B 3.0x NA 75.6% manufacturers globally.
Two Portfolios of Towers in Brazil comprises towers and are 11/21/14 Wireless Tower $1.2B NA NA NA located in Brazil. (Tower Assets) 4,800 telecommunications towers assets of Bharti Airtel Limited in 11/24/14 Wireless Tower Nigeria, which provides cell phone towers and antennas for $1.1B NA NA NA (Tower Assets) telecom service providers in Africa. Develops and provides online, social media, mobile, and 11/12/14 Mobile Games downloadable Mac and PC videogames and casino-style $835M NA 9.4x NA games for consumers globally.
M-Commerce Offers mobile payments via SMS, Internet banking, call centers, 11/18/14 $750M NA 51.7x NA Enablement and point of sales terminals
Provides a Web, mobile and connected TV digital video Mobile / Local 11/11/14 advertising network and targeted analytics SaaS for Web $640M 6.4x 15.9x NA Marketing publishers, marketers and businesses. Wireless Provides wireless telecommunications services, distributes mobile 11/28/14 Network phones and operates retail mobile device stores and kiosks for $528M 0.4x NA 172.2% Operators consumers and businesses in North America and Australia.
Mobility & Provides technology solutions for customers in the defense, 11/5/14 $420M NA NA NA Monitoring intelligence, and law enforcement communities.
Sorted by Deal Value
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 16 Investment Banking Advisors 16 Capstone Partners MostInvestment Active Banking Advisors Mobile Buyers – Last 2 Years
# of Deals Mobile Transactions Company Mobile Total Date Company Value Date Company Value 11/21/14 CoolIris NA 10/1/13 HitPost NA 10/3/14 MessageMe NA 8/24/13 IQ Engines NA 8/12/14 Zofari NA 8/2/13 Rockmelt $60M 7/21/14 Flurry $270M 7/17/13 AdMovate NA 5/13/14 Meh Labs NA 7/2/13 Qwiki $50M 2/11/14 Wander $10M 7/1/13 Bignoggins Productions NA 24 46 1/30/14 Incredible Labs NA 6/13/13 GhostBird Software NA 1/29/14 Tomfoolery $16M 5/10/13 Loki Studios NA 1/21/14 Sparq NA 5/1/13 Todoroo NA 1/7/14 ThumbsUp Labs NA 3/25/13 Summly $30M 12/9/13 Quik.io NA 3/20/13 Jybe NA 12/3/13 DWA Investments NA 2/12/13 Propeld NA 11/19/14 RelativeWave NA 5/19/14 Quest Visual NA 10/21/14 Firebase NA 5/19/14 Divide $130M 9/11/14 Input Factory NA 3/11/14 Green Throttle Games NA 8/15/14 Jetpac NA 1/4/14 Bitspin NA 18 68 8/6/14 Tinker Square NA 10/22/13 FlexyCore $23M 8/6/14 Directr NA 9/16/13 Bump Technologies $60M 6/25/14 Appurify NA 8/30/13 WIMM Labs NA 6/19/14 Alpental Technologies NA 6/11/13 Waze $966M 6/19/14 mDialog NA 4/23/13 wavii $30M 9/23/14 Prss NA 10/3/13 Cue $50M 7/27/14 Concept.io $30M 8/28/13 AlgoTrim NA 6/6/14 Spotsetter NA 8/22/13 Embark NA 14 18 2/21/14 Burstly NA 8/1/13 Passif Semiconductor NA 1/6/14 SnappyLabs NA 7/19/13 Hopstop.com NA 12/23/13 Catch.com NA 7/19/13 Locationary NA 11/24/13 PrimeSense NA 3/25/13 WiFiSLAM $20M
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 17 Investment Banking Advisors 17 CapstoneMost ActivePartners Mobile Buyers – Last 2 Years (Continued)Investment Banking Advisors
# of Deals Mobile Transactions Company Mobile Total Date Company Value Date Company Value 12/11/14 13th Lab NA 12/17/13 SportStream NA 6/3/14 Pryte NA 10/14/13 Onavo $150M 4/24/14 ProtoGeo NA 8/23/13 Midnox NA 11 23 3/25/14 Oculus VR $2.3B 8/12/13 Mobile Technologies NA 2/19/14 WhatsApp $19.0B 4/25/13 Parse $85M 1/7/14 Little Eye Labs NA 4/23/13 Spaceport NA 5/9/14 Ginger Software $30M 5/28/13 ST-Ericsson GNSS Business NA 12/16/13 Mindspeed Technologies NA 4/24/13 Aepona $120M 8 24 9/13/13 Indisys $26M 2/22/13 appMobi (Developer Tools) NA 8/13/13 Fujitsu Semiconductor Assets NA 2/20/13 FlyCast (Development Tools) NA 11/25/14 Bharti Airtel (Tower Assets) $1.1B 8/9/13 NII Holdings (Brazil Towers) $413M 11/21/14 TIM Cellular (Tower Assets) $1.2B 8/9/13 NII Holdings (Mexico) $398M 7 8 6/15/14 BR Towers $978M 1/31/13 Axtel $250M 9/6/13 Global Tower $4.8B 7/16/14 Cardspring NA 5/13/13 Lucky Sort NA 4/7/14 Cover NA 3/13/13 We Are Hunted NA 7 21 9/9/13 MoPub $350M 1/28/13 Crashlytics NA 6/19/13 Spindle Labs NA 7/12/131 Leap Wireless Int’l $1.2B 11/7/14 Grupo Iusacell $1.8B /25/13 Verizon Wireless (700Mhz $1.9B 1/7/14 Aloha Partners (licenses) NA 6 25 spectrum) 7/25/13 Long Lines Wireless NA 1/22/13 Atlantic Tele-Network (US Ops) $780M 6/10/14 MobileSpan NA 11/4/13 Sold NA 6 13 6/5/14 Photo Lab NA 7/20/13 Endorse NA 4/17/14 Loom NA 3/15/13 Orchestra $100M
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 18 Investment Banking Advisors 18 Capstone Partners Investment Banking AdvisorsCapstone Partners Investment Banking Advisors
Public Company Observations and Valuation & Recommendations Operating Metrics
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 19 Investment Banking Advisors WORLD CLASS WALL STREET EXPERTISE.19 BUILT FOR THE MIDDLE MARKET.TM Capstone Partners MobileInvestment Banking 140 Advisors Public Company Universe – Part 1
App Stores & Content Aggregation
Carrier Back Office
Games / Virtual Goods
M-Commerce Enablement
Messaging & VoIP
Mobile / Local Marketing
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 20 Investment Banking Advisors 20 Capstone Partners MobileInvestment Banking 140 Advisors Public Company Universe – Part 2
Mobile Devices
Mobile OS & Utility Software
Mobility & Monitoring
Portals & Social Networks
Search, Referral & Navigation
Video, Music & eBooks
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 21 Investment Banking Advisors 21 Capstone Partners MobileInvestment Banking 140 Advisors Public Company Universe – Part 3
Wireless Network Equipment
Wireless Network Operators
Wireless Semiconductors
Wireless Tower
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 22 Investment Banking Advisors 22 Capstone Partners RecentInvestment Banking IPOs Advisors – Linekong Interactive
IPO Details Business Description Offering Date: 12/29/14 Market Cap: $466.0M Develops and publishes online games in the People’s Offering Price: $1.26 Offering Size: $93.4M Republic of China. Original Range: $1.26-$1.69 % of Company: 20.1%
IPO Performance HQ: Beijing, China Ticker: SEHK: 8267 Open: $1.26 12/31 $/share: $1.26 % Change to Offer: 0.4% % Change to Offer: 0.3% Stock Performance thru End of Q4’14 Close: $1.26 % Change to Open: (0.1)% $1.80 % Change to Offer: 0.3% $1.70 % Change to Open: (0.1)% $1.60 Financial & Valuation Metrics $1.50 LTM Revenue: $103.1M LTM Rev Growth: 64.1% $1.40 LTM EBITDA: $9.8M Gross Margin: 56.1% LTM Net Income: $(62.0M) EBITDA Margin: 9.5% $1.30 Mkt Cap / $ Invested: 13.3x Rev Multiple: 5.5x $1.20
Investors $1.10
Fosun Capital; New Enterprise Associates; Northern Light $1.00
12/30/14 12/31/14 Open Venture Capital; Orchid Asia Group Management; SAIF IPO Partners
Offer Range Price-Open Gap $/Share
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 23 Investment Banking Advisors 23 Capstone Partners RecentInvestment Banking IPOs Advisors – Feiyu Technology
IPO Details Business Description Offering Date: 12/4/14 Market Cap: $421.8M Develops and operates Web and mobile games in Offering Price: $0.28 Offering Size: $85.1M Mainland China. Original Range: $0.24-$0.33 % of Company: 20.2%
IPO Performance HQ: Xiamen, China Ticker: SEHK: 1022 Open: $0.29 12/31 $/share: $0.25 % Change to Offer: 4.1% % Change to Offer: (12.5)% Stock Performance thru End of Q4’14 Close: $0.29 % Change to Open: (16.0)% $0.34 % Change to Offer: 1.8% $0.32 % Change to Open: (2.2)% $0.30 Financial & Valuation Metrics LTM Revenue: $32.0M LTM Rev Growth: 63.9% $0.28 LTM EBITDA: $16.4M Gross Margin: 89.5% $0.26 LTM Net Income: $13.8M EBITDA Margin: 51.3% Mkt Cap / $ Invested: N/A Rev Multiple: 11.0x $0.24
Investors $0.22
$0.20
12/17/14 12/30/14 12/5/14 12/8/14 12/9/14 12/10/14 12/11/14 12/12/14 12/15/14 12/16/14 12/18/14 12/19/14 12/22/14 12/23/14 12/24/14 12/29/14 12/31/14
Open IPO
Offer Range Price-Open Gap $/Share
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 24 Investment Banking Advisors 24 Capstone Partners RecentInvestment Banking IPOs Advisors – gumi
IPO Details Business Description Offering Date: 12/17/14 Market Cap: $805.8M Plans, develops, and operates smartphone and feature Offering Price: $28.11 Offering Size: $333.6M phone social games. Original Range: $25.56-$28.11 % of Company: 41.4%
IPO Performance HQ: Tokyo, Japan Ticker: TSE: 3903 Open: $27.79 12/31 $/share: $22.31 % Change to Offer: (1.1)% % Change to Offer: (20.6)% Stock Performance thru End of Q4’14 Close: $26.65 % Change to Open: (19.7)% $29.00 % Change to Offer: (5.2)% $28.00 % Change to Open: (4.1)% $27.00
Financial & Valuation Metrics $26.00
LTM Revenue: $109.6M LTM Rev Growth: 123.6% $25.00
LTM EBITDA: NA Gross Margin: 28.6% $24.00 LTM Net Income: $(1.8M) EBITDA Margin: NA $23.00 Mkt Cap / $ Invested: 4.6x Rev Multiple: 5.9x $22.00
Investors $21.00
$20.00
12/25/14 12/18/14 12/19/14 12/22/14 12/24/14 12/26/14 12/29/14 12/30/14
Open IPO
Offer Range Price-Open Gap $/Share
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 25 Investment Banking Advisors 25 Capstone Partners RecentInvestment Banking IPOs Advisors – momo
IPO Details Business Description Offering Date: 12/10/14 Market Cap: $1.9B Operates a mobile-based social networking platform in Offering Price: $13.50 Offering Size: $276M the People’s Republic of China. Original Range: $12.50-$14.50 % of Company: 14.8%
IPO Performance HQ: Beijing, China Ticker: NasdaqGS: MOMO Open: $14.25 12/31 $/share: $12.00 % Change to Offer: 5.6% % Change to Offer: (11.1)% Stock Performance thru End of Q4’14 Close: $17.02 % Change to Open: (15.8)% $28.00 % Change to Offer: 26.1% $26.00 % Change to Open: 19.4% $24.00
Financial & Valuation Metrics $22.00
LTM Revenue: $41.7M LTM Rev Growth: 1,232.7% $20.00
LTM EBITDA: $(23.5M) Gross Margin: 57.5% $18.00 LTM Net Income: $(25.0M) EBITDA Margin: (56.4)% $16.00 Mkt Cap / $ Invested: 43.8x Rev Multiple: 72.8x $14.00
Investors $12.00
Alibaba; Matrix Partners; Sequoia Capital; Shanghai $10.00
12/25/14 12/11/14 12/12/14 12/22/14 12/24/14 12/26/14 12/29/14 12/30/14 Open Buttonwood Capital; Yunfeng Capital IPO
Offer Range Price-Open Gap $/Share
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 26 Investment Banking Advisors 26 Capstone Partners RecentInvestment Banking IPOs Advisors – OPTiM
IPO Details Business Description Offering Date: 10/21/14 Market Cap: $60.7M Develops and licenses infrastructure and security software Offering Price: $37.48 Offering Size: $8.6M for electronic devices such as computers, smartphones and eBooks. Original Range: $34.67-$37.48 % of Company: 14.2%
IPO Performance HQ: Tokyo, Japan Ticker: TSE: 3694 Open: $85.71 12/30 $/share: $202.60 % Change to Offer: 128.7% % Change to Offer: 440.6% Stock Performance thru End of Q4’14 Close: $85.71 % Change to Open: 136.4% $310.00 % Change to Offer: 128.7% % Change to Open: 0% $260.00
Financial & Valuation Metrics $210.00 LTM Revenue: $16.5M LTM Rev Growth: 18.0% $160.00 LTM EBITDA: NA Gross Margin: 76.8% LTM Net Income: $1.6M EBITDA Margin: NA $110.00 Mkt Cap / $ Invested: NA Rev Multiple: 3.1x
$60.00 Investors
$10.00
10/23/14 10/28/14 10/31/14 11/6/14 11/11/14 11/14/14 11/19/14 11/25/14 11/28/14 12/3/14 12/8/14 12/11/14 12/16/14 12/19/14 12/25/14 12/30/14 IPO
Offer Range Price-Open Gap $/Share
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 27 Investment Banking Advisors 27 Capstone Partners MedianInvestment Banking Stock Advisors Performance – Mobile 140
Q4’14 saw a sharp pull back across much of the mobile sector The Mobile 140 experienced a 4.2% decrease, in contrast with a 5.4% increase for the NASDAQ Wireless Semis and Mobile / Local Marketing segments were able to buck the trend increasing more than 6% App Stores & Content Aggregation segment faired the worst with only 1 out of 6 companies increasing share price
Stock Performance Stock Performance - 9/30-12/31 120% 108.7 Wireless Semis 7.4 Mobile / Local Marketing 6.0 100% Mobile Devices 1.6 81.8 Wireless Tower (0.1) 80% Carrier Back Office (1.0) Games / Virtual Goods (1.0) Wireless Network Operators (2.0) 60% 54.3 Search, Referral & Navigation (2.7) 40.3 Mobile 140 (4.2) 40% Wireless Network Equipment (5.0) M-Commerce Enablement (8.0) 20% 13.4 Mobility & Monitoring (8.3) 5.4 Messaging & VoIP (9.9) Mobile OS & Utility Software 0% (10.6) Video, Music & eBooks (11.9) (4.8) (4.2) Portals & Social Networks (14.0) (20)% Apps Stores & Content Aggregation (15.2) Last 5 Years Last 3 Years LTM 9/30-12/31 (20.0)% (10.0)% 0.0% 10.0% Mobile 140 NASDAQ
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 28 Investment Banking Advisors 28 Capstone Partners MedianInvestment Banking LTM Advisors Revenue Multiples – Mobile 140
Median LTM Revenue Multiple decreased to 3.0x Within Mobile, several segments trade at premium multiples Wireless Tower consistently commands high revenue multiples based on strong margins and stable cash flow Search, Referral & Navigation and Portals & Social Networks both trade above 6x
LTM Enterprise Value / Revenue LTM Enterprise Value / Revenue
4.0x Wireless Tower 10.7 Search, Referral & Navigation 10.4 3.4 3.5x Portals & Social Networks 6.6 3.0 Mobile OS & Utility Software 4.3 3.0x Apps Stores & Content Aggregation 4.1 2.7 Video, Music & eBooks 3.9 2.5x 2.4 2.3 M-Commerce Enablement 3.3 Mobile 140 3.0 2.0x Mobile Devices 3.0 Games / Virtual Goods 3.0 1.5x Messaging & VoIP 2.9 Wireless Semis 2.8 1.0x Wireless Network Equipment 2.6 Mobility & Monitoring 2.3 0.5x Wireless Network Operators 2.0 Mobile / Local Marketing 1.8 0.0x Carrier Back Office 1.2 2010 2011 2012 2013 2014 0x 2x 4x 6x 8x 10x 12x Based on data available as of 12/31/14 Based on data available as of 12/31/14
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 29 Investment Banking Advisors 29 Capstone Partners MedianInvestment Banking LTM Advisors EBITDA Multiples – Mobile 140
Public companies within the Mobile sector continue to trade at a healthy EBITDA multiple of 11.5x, though down slightly from 2013 Search, Referral & Navigation trade at a premium LTM EBITDA multiple of 32.5x Only four Mobile segments are trading at medians below 10x LTM EBITDA
LTM Enterprise Value / EBITDA LTM Enterprise Value / EBITDA
14x Search, Referral & Navigation 32.5 12.0 Wireless Tower 23.0 12x 11.5 Portals & Social Networks 19.3 Mobility & Monitoring 16.6 Mobile OS & Utility Software 13.8 10x 9.2 9.1 Apps Stores & Content Aggregation 13.8 8.3 Wireless Semis 13.7 8x Mobile Devices 12.8 Video, Music & eBooks 12.7 6x Mobile 140 11.5 Wireless Network Equipment 10.9 Mobile / Local Marketing 4x 10.5 Games / Virtual Goods 10.5 M-Commerce Enablement 9.2 2x Messaging & VoIP 8.6 Carrier Back Office 7.6 0x Wireless Network Operators 7.3 2010 2011 2012 2013 2014 0x 10x 20x 30x 40x Based on data available as of 12/31/14 Based on data available as of 12/31/14 Companies with EBITDA Margin <7.5% and EBITDA multiple above 20x deemed NA Companies with EBITDA Margin <7.5% and EBITDA multiple above 20x deemed NA
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 30 Investment Banking Advisors 30 Capstone Partners MedianInvestment Banking LTM Advisors P/E Multiples – Mobile 140
Median LTM P/E multiple decreased slightly to 18.4x for 2014 P/E multiples have recovered after a 2011-2012 drop as investors are paying up for future profit expectations All segments trade above 14x with five segments above 30x Investors are willing to pay high multiples for well-positioned mobile companies and hot segments as the trend toward mobility proliferates
LTM P/E LTM P/E
25x Search, Referral & Navigation 54.2 Wireless Tower 43.9 20.2 Portals & Social Networks 38.1 19.4 20x 18.4 Mobility & Monitoring 35.4 Mobile / Local Marketing 34.9 16.5 Messaging & VoIP 27.5 15.0 15x Mobile OS & Utility Software 21.5 Wireless Network Equipment 20.6 Games / Virtual Goods 19.4 Apps Stores & Content Aggregation 19.3 10x Video, Music & eBooks 19.3 Wireless Semis 18.7 Mobile 140 18.4 5x M-Commerce Enablement 17.5 Mobile Devices 17.1 Carrier Back Office 15.3 0x Wireless Network Operators 14.3 2010 2011 2012 2013 2014 0x 20x 40x 60x Based on data available as of 12/31/14 Based on data available as of 12/31/14 Companies with Net Margin <5.0% and P/E above 40x deemed NA Companies with Net Margin <5.0% and P/E above 40x deemed NA
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 31 Investment Banking Advisors 31 Capstone Partners MedianInvestment Banking Revenue Advisors Growth – Mobile 140
Mobile 140 median revenue growth slowed to 11.2% LTM with growth of 11.0% NTM expected The median growth rate was tempered by the fact that lower growth segments such as Wireless Network Operators, Mobile Devices and Wireless Network Equipment represent over one-third of the Mobile 140 Slowing growth projections are due to maturity of the carrier and hardware segments while growth remains strong for many segments on the software side
Revenue Growth vs Prior 12 Mos NTM / LTM Revenue Growth Projection
18% 16.8 Search, Referral & Navigation 31.4 16% 14.9 Mobile OS & Utility Software 18.8 Apps Stores & Content Aggregation 17.4 14% 13.1 12.3 Video, Music & eBooks 16.6 12% 11.2 11.0 Mobility & Monitoring 16.3 Games / Virtual Goods 15.3 10% Portals & Social Networks 14.7 Mobile / Local Marketing 8% 13.4 Messaging & VoIP 13.0 6% M-Commerce Enablement 12.2 Mobile 140 11.0 4% Wireless Tower 10.0 2% Wireless Network Equipment 7.4 Wireless Semis 5.1 0% Carrier Back Office 4.4 Mobile Devices 3.0 Wireless Network Operators 2.3 0% 10% 20% 30% 40% Based on data available as of 12/31/14 Based on data available as of 12/31/14
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 32 Investment Banking Advisors 32 Capstone Partners MedianInvestment Banking EBITDA Advisors Growth – Mobile 140
Median EBITDA growth increased 8.7% in LTM with strong NTM growth projected Although revenue growth is projected to slow, increased EBITDA growth projection indicates companies are focusing more on profitability Strong EBITDA growth rates for Portals & Social Networks and Search, Referral & Navigation segments are driven by market leaders benefiting from dominant scale driving increased profitability
EBITDA Growth vs Prior 12 Mos NTM / LTM EBITDA Growth Projection
25% Portals & Social Networks 63.4 Search, Referral & Navigation 53.4 20.2 20% Mobility & Monitoring 46.6 Apps Stores & Content Aggregation 33.4 16.5 Video, Music & eBooks 33.2 15% Mobile / Local Marketing 28.7 12.1 Wireless Semis 23.5 Wireless Tower 19.4 10% 9.1 8.7 Mobile 140 16.5 6.3 Wireless Network Equipment 16.2 M-Commerce Enablement 16.1 5% Mobile OS & Utility Software 8.5 Mobile Devices 7.7 Carrier Back Office 6.8 0% Wireless Network Operators 3.2 Games / Virtual Goods 1.6 Messaging & VoIP (29.3) (50)%(25)% 0% 25% 50% 75% Based on data available as of 12/31/14 Based on data available as of 12/31/14 Companies with EBITDA Margin between -5.0% and 5.0% deemed NA Companies with EBITDA Margin between -5.0% and 5.0% deemed NA
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 33 Investment Banking Advisors 33 Capstone Partners MedianInvestment Banking EPS Advisors Growth – Mobile 140
Median EPS growth increased significantly to 11.4% in LTM with 15.7% projected for NTM Strong EPS growth is expected to continue with half of the segments projected to grow more than 20% Companies are starting to focus more on profitability as the mobile market matures with leading companies establishing strong market positions
EPS Growth vs Prior 12 Mos NTM / LTM EPS Growth Projection 20% 18.2 Apps Stores & Content Aggregation 56.0 18% Mobility & Monitoring 33.1 15.7 16% 15.0 Search, Referral & Navigation 32.1 Portals & Social Networks 32.1 14% Wireless Tower 27.2 12% 11.4 M-Commerce Enablement 24.8 Wireless Network Equipment 21.0 10% 8.0 Video, Music & eBooks 20.8 8% 7.1 Games / Virtual Goods 20.7 Wireless Semis 19.7 6% Mobile 140 15.7 4% Mobile OS & Utility Software 12.8 Mobile / Local Marketing 10.5 2% Carrier Back Office 6.4 0% Messaging & VoIP 2.6 Wireless Network Operators 1.6 Mobile Devices (2.9) (20)% 0% 20% 40% 60%
Based on data available as of 12/31/14 Based on data available as of 12/31/14 Companies with Net Margin between -5.0% and 5.0% deemed NA Companies with Net Margin between -5.0% and 5.0% deemed NA
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 34 Investment Banking Advisors 34 Capstone Partners MedianInvestment Banking Gross Advisors Margin Trends – Mobile 140
Median gross margins climbed to 55.3%, setting a new five year high, though more companies experienced gross margins decreases than increases Wireless Tower segment posted the highest gross margin at 71.4% The more commoditized App Stores & Content Aggregation, Carrier Back Office and Mobile Devices segments lag behind with gross margins below 40% as vendors face pricing pressure
Gross Margins Gross Margins by Segment
60% 55.3 Wireless Tower 71.4 53.8 52.9 M-Commerce Enablement 66.4 49.6 50.5 50% Search, Referral & Navigation 64.6 Portals & Social Networks 63.8 Mobile OS & Utility Software 63.2 40% Games / Virtual Goods 62.0 Messaging & VoIP 57.4 Mobile 140 55.3 30% Mobile / Local Marketing 55.2 Mobility & Monitoring 54.6 Wireless Semis 49.9 20% Wireless Network Operators 48.4 Wireless Network Equipment 44.1 Video, Music & eBooks 10% 41.6 Mobile Devices 38.6 Carrier Back Office 35.7 0% Apps Stores & Content Aggregation 34.0 2010 2011 2012 2013 2014 0% 20% 40% 60% 80% Based on data available as of 12/31/14 Based on data available as of 12/31/14
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 35 Investment Banking Advisors 35 Capstone Partners MedianInvestment Banking EBITDA Advisors Margin Trends – Mobile 140
Median EBITDA margins stayed constant at 21.0%, despite companies improving EBITDA margins outnumbering companies with declines Low EBITDA margins of Mobile / Local Marketing and Messaging & VoIP segments despite median-level gross margins driven by high sales & marketing spend as players spend heavily to drive scale
EBITDA Margins EBITDA Margins by Segment
25% 22.6 Wireless Tower 53.4 21.8 Wireless Network Operators 31.0 20.9 21.0 20.1 Portals & Social Networks 30.7 20% Search, Referral & Navigation 27.3 Mobile OS & Utility Software 23.3 Mobile Devices 21.4 15% Mobile 140 21.0 Video, Music & eBooks 19.9 M-Commerce Enablement 18.9 Wireless Semis 17.9 10% Mobility & Monitoring 16.9 Apps Stores & Content Aggregation 16.8 Carrier Back Office 16.6 5% Games / Virtual Goods 16.1 Wireless Network Equipment 14.5 Messaging & VoIP 13.0 0% Mobile / Local Marketing 12.3 2010 2011 2012 2013 2014 0% 20% 40% 60% Based on data available as of 12/31/14 Based on data available as of 12/31/14
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 36 Investment Banking Advisors 36 Capstone Partners BestInvestment & Banking Worst Advisors Performers – Mobile 140
High/Low LTM EV/Rev Multiples High/Low Revenue Growth 80x 72.8 400% 360.7 70x 60x 300% 177.1 50x 200% 40x 95.2 89.5 84.2 24.3 100% 30x 18.2 17.9 17.4 11.0 20x 0% 10x 3.0 0.6 0.5 0.4 0.3 0.3 (14.1) (14.8) (16.5) (26.6) 0x (100)% (56.3)
Based on data available as of 12/31/14 Based on data available as of 12/31/14
High/Low LTM EV/EBITDA Multiples High/Low EBITDA Growth 100.0x 89.9 750% 74.2 516.4 67.8 66.3 453.3 75.0x 64.6 500% 414.8 284.2 281.3 50.0x 250% 16.5 25.0x 11.5 3.3 3.0 2.6 2.1 1.7 0% 0.0x (53.4) (60.3) (71.4) (71.7) (250)% (92.2)
Based on data available as of 12/31/14 Based on data available as of 12/31/14 Companies with EBITDA Margin <7.5% and EBITDA multiple above 20x deemed NA Companies with EBITDA Margin between -5.0% and 5.0% deemed NA
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 37 Investment Banking Advisors 37 Capstone Partners BestInvestment & Banking Worst Advisors Performers – Mobile 140 (Continued)
High/Low LTM P/E Multiples High/Low EPS Growth 375.3 250x 216.8 500% 240.0 190.3 144.0 130.9 11.4 170.0 200x 0% 150x 114.1 (93.6) (94.4) (205.6)(211.8) 100x 82.9 74.5 (500)% 50x 18.4 6.6 6.3 6.2 5.1 5.1 (1,000)% 0x (1,500)% (1,218.8)
Based on data available as of 12/31/14 Based on data available as of 12/31/14 Companies with Net Margin <5.0% and P/E above 40x deemed NA Companies with Net Margin between -5.0% and 5.0% deemed NA
Stock Performance - 9/30-12/31 High/Low EBITDA Margin 125% 96.1 120% 81.5 78.7 100% 80% 57.4 57.4 53.4 75% 40% 21.0 27.5 50% 25.3 20.9 17.9 25% 0% 0% (40)% (42.3) (25)% (4.2) (80)% (54.4) (56.0) (56.9) (50)% (36.1) (38.7) (42.0) (43.9) (120)% (75)% (58.7) (160)% (144.9)
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 38 Investment Banking Advisors 38 Capstone Partners Investment Banking AdvisorsCapstone Partners Investment Banking Advisors
Notable Observations and Transaction Recommendations Profiles
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 39 Investment Banking Advisors WORLD CLASS WALL STREET EXPERTISE.39 BUILT FOR THE MIDDLE MARKET.TM Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Portugal Telecom, SGPS, provides telecommunications and multimedia services in Portugal, Brazil, and internationally. It operates in the areas of fixed, mobile, and multimedia Deal Summary communications services, information systems, and satellite Date: 12/8/14 communications. Portugal Telecom shareholders have Transaction Value: $8.5B approved the sale of the company's Portuguese assets to France's Altice for 7.4 billion euros ($8.5 billion). % Sought: 100% Consideration: Cash, Earnout Altice, which already owns cable assets Cabovisao and Oni in Portugal, has been seeking acquisitions to bulk up in markets across Europe. Altice this year agreed to buy French mobile-phone carrier SFR in a $23 billion deal as part of a plan to combine the asset with Drahi’s Numericable Group. Valuation Metrics PT merged with Brazil's Oi last year, with the Portuguese Trailing Revenue Multiple: 2.7 x company holding a 25 % stake in the new group. Oi plans to Trailing EBITDA Multiple: 6.6 x pay down debt by selling the Portuguese assets it acquired in the merger. Relations between Oi and PT have soured Multiple on $ Invested: NA since the merger, with Portuguese regulators briefly suspending trading in PT shares in January, asserting that the company had failed to disclose key information.
Investors The combined enterprise value of $8.5 billion equates to 2.7 Oi SA times trailing revenue and 6.6 times trailing EBITDA.
Capstone Partners CapstoneInvestment BankingPartners Advisors 40 Investment Banking Advisors 40 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
AT&T has entered into an agreement to acquire Mexican wireless carrier Iusacell for $2.5 billion, allowing the U.S. telecom giant to compete in the lucrative Mexican wireless Deal Summary market. As part of the agreement, AT&T will acquire all of Date: 11/7/14 Iusacell’s wireless assets including network infrastructure, Transaction Value: $2.5B licenses, retail stores and about 8.6 million subscribers under the brand names Iusacell and Unefón. The Mexican wireless % Sought: 100% market has more than 100 million subscribers and is currently Consideration: Cash dominated by America Movil commanding a share of 70%, with Iusacell at a distant 8% share.
New laws in Mexico will likely force America Movil to cut interconnection costs and share network infrastructure with Valuation Metrics competitors, which sets up the perfect opportunity for AT&T Trailing Revenue Multiple: NA to substantialy increase lusacell market share. Under the Trailing EBITDA Multiple: NA terms of the purchase agreement, AT&T will acquire all wireless properties, licenses, network assets, retail stores and Multiple on $ Invested: NA more than 8.6 million subscribers. Iusacell’s Total Play business, including the network assets to support pay TV and wire line broadband services will be spun out to Grupo Salinas’ existing shareholders prior to AT&T closing its Investors acquisition of Iusacell. Grupo Salinas The combined enterprise value of $2.5 billion equates to 2.7 times trailing revenue and 6.6 times trailing EBITDA. The deal is likely to close by the end of Q1 2015.
Capstone Partners CapstoneInvestment BankingPartners Advisors 41 Investment Banking Advisors 41 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Cambridge Silicon Radio (CSR), designs a range of wireless connectivity and communications semiconductors for computer and electronics manufacturers globally. Its Deal Summary leadership in wireless technologies, specifically Bluetooth Date: 10/15/2014 low-energy and audio processing, has been recognized Transaction Value: $2.5B through multiple acquisition offers, notably Microchip Technology’s offer in August 2014. Although the details of % Sought: 100% that proposal were not disclosed, it was ultimately rejected Consideration: Cash and superseded by Qualcomm’s $2.5 billion bid.
Qualcomm has been a dominant leader within the mobile wireless semi industry and the acquisition of CSR further entrenches its positioning as it leverages CSR to expand Valuation Metrics deeper into ‘Internet of Things’ (IoT) devices. The Trailing Revenue Multiple: 2.6x consolidation of key components within the IoT ecosystem Trailing EBITDA Multiple: 34.1x will help reduce complexities that have challenged early market development. Deal Value Per Employee: $1.1M Premium versus: The offer of £9/share ($14.36/share) represents, a 36.7% 1 day prior: 36.7% premium over the prior day’s closing price per share. This represents a valuation of 2.6 times LTM Revenue and 34.1 1 week prior: 26.5% times LTM EBITDA, both strong multiples within the 1 month prior: 16.7% semiconductor space.
Note: LTM and Premiums of last quarter prior to transaction announcement date.
Capstone Partners CapstoneInvestment BankingPartners Advisors 42 Investment Banking Advisors 42 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
American Tower paid $1.2B for international base station assets, marking the first time it has paid more than $1B in an overseas deal. The purchases of Brazilian towers from TIM Deal Summary come as more of American Tower's profits stem from its Date: 11/21/14 international assets. Transaction Value: $1.2B TIM has 6,500 towers in Brazil, and since 2010, American % Sought: 100% Tower has spent $7B for towers on five different continents, Consideration: Cash with most of them being outside the US. With this acquisition (and the Airtel Acquisition shortly following), American Tower will boast more than 70,000 cell towers, with about 70% now located outside the United States. American Tower spent more than $3B on international tower assets in 2014, where Valuation Metrics gross margins can be twice as high as the U.S. assets. Forward Revenue Multiple: 7.0 x The 7x next year's revenue for TIM is in line with the price paid Trailing EBITDA Multiple: NA by American Tower‘s $978m acquisition of BR Towers in June Multiple on $ Invested: NA 2014. These deals demonstrate the premium American Tower is willing to pay for international expansion, as both multiples are higher than the 4-6x that rival SBA Communications paid in its recent purchase of Brazilian Investors telco Oi's wireless tower assets. None
Capstone Partners CapstoneInvestment BankingPartners Advisors 43 Investment Banking Advisors 43 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
American Tower paid $1.050B for international base station assets, marking only the second time it has paid more than $1B in an overseas deal. The announcement of two deals Deal Summary within less than a week underscores a growing trend among Date: 11/24/14 tower operators to add more sites, renting antenna space to Transaction Value: $1.1B additional carriers eager to expand mobile network capacity. % Sought: 100% Consideration: Cash Bharti Airtel has 4,800 towers in Nigeria. With this acquisition (and the TIM acquisition immediately prior), American Tower will boast more than 70,000 cell towers, with about 70% now located outside the United States. American Tower spent more than $3B on international tower assets in 2014, where Valuation Metrics gross margins can be twice as high as the U.S. assets. Trailing Revenue Multiple: NA American Tower has been working to increase its Trailing EBITDA Multiple: NA international revenue, which made up about a third of the Multiple on $ Invested: NA company’s $1 billion in sales last quarter. Jim Taiclet, American Tower’s chairman and CEO, released in a statement, “With the largest population and economy in Africa and relatively underdeveloped wireless infrastructure, Investors we view Nigeria as a tremendous growth opportunity.” He None further noted that the deal will also help the company get closer to its goal of boosting per-share adjusted funds from operations by a double-digit percentage.
Capstone Partners CapstoneInvestment BankingPartners Advisors 44 Investment Banking Advisors 44 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Churchill Downs acquired mobile videogame developer Big Fish for $835m including a potential $400m earn-out and $15m in stock. Churchill Downs operates a horse racing track Deal Summary in Louisville, Kentucky and its flagship event, The Kentucky Date: 11/12/14 Derby. They also provide online horse betting services Transaction Value: $835M through www.twinspires.com. % Sought: 100% Big Fish's casino and traditional mobile games should Consideration: Cash / Stock provide a new source of revenue growth, as Churchill Downs' net revenue declined 6% compared with last year. In 2013, Big Fish achieved $266m in revenue, experiencing double-digit growth. Social casino games have become a $2.7 billion worldwide industry in recent years due to rapid Valuation Metrics growth on mobile and social. Big Fish Games is the fifth- Trailing Revenue Multiple: 2.7 x largest maker of social casino games, having generated $36 Trailing EBITDA Multiple: 16.6 x million in social casino game revenues during the recent quarter. Multiple on $ Invested: 8.0 x CEO Bill Carstanjen commented, “The acquisition of Big Fish and our entry into the rapidly growing mobile and online games industry gives us new products, new customers, new Investors geographies and new sizeable growth opportunities… While Angel Investors, Balderton Capital, General Catalyst many will view this transaction as a logical extension to what Partners, Salmon River Capital we currently do with Twinspires.com, what is most important to us are the strong team and the processes and capabilities that have been built by Big Fish.”
Capstone Partners CapstoneInvestment BankingPartners Advisors 45 Investment Banking Advisors 45 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
PayEase is the leading payment service provider in China, providing comprehensive payment services including: mobile payments via SMS, internet banking, call centers and Deal Summary Point of Sales (POS) terminals. PayEase provides a user Date: 11/18/14 friendly, cost-effective, and secured integrated payment Transaction Value: $750M platform. Boasting the most extensive banking network in China, PayEase has an alliance with 23 major banks which % Sought: 100% accounts for 90% of the Chinese banking industry, and Consideration: Cash / Stock supports 63 types of credit and debit cards plus international cards including: MasterCard, Visa, JCB, and American Express.
Mozido provides an integrated platform of cloud-based, Valuation Metrics white-label, mobile payment, shopping and marketing Trailing Revenue Multiple: NA solutions, complemented by real-time, customer behavior Trailing EBITDA Multiple: NA analytics. Mozido enables companies in retail, financial services, consumer packaged goods and telecom to serve Multiple on $ Invested: NA both banked and unbanked consumers, and mobilize a better future for all people. Mozido’s platform is highly interoperable and can work with virtually any wireless carrier or mobile device, including smartphones and feature Investors phones. WI Harper Group, Capinfo Company, Clydesdale Ventures With a recent cash infusion of $185 million in October 2014, Mozido is in the process building what it hopes will be the first scalable global mobile commerce ecosystem.
Capstone Partners CapstoneInvestment BankingPartners Advisors 46 Investment Banking Advisors 46 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
BrightRoll provides a Web, mobile and connected TV digital video advertising network and targeted analytics SaaS for Web publishers, marketers and businesses. The company Deal Summary processes in excess of 30 billion ad-related data points each Date: 11/11/2014 day with a robust customer base, currently serving 87 of the Transaction Value: $640M top 100 U.S. advertisers. % Sought: 100% Yahoo’s acquisition of BrightRoll marks its second largest Consideration: Cash deal since its purchase of Tumblr for $1 billion and represents a noteworthy focus on the burgeoning video advertising market. According to Yahoo chief executive Marissa Mayer, this will make Yahoo’s ad platform the largest in the US. Combing BrightRoll’s programmatic video ad marketplace Valuation Metrics with Yahoo’s app tracking analytics tools acquired through 2014 Revenue Multiple: 6.4x Flurry, will provide insightful analytics for advertisers and Trailing EBITDA Multiple: NA publishers alike. Yahoo will invariably integrate its inventory into BrightRoll’s platform to utilize its campaign optimization Multiple on $ Invested: 15.9x and inventory forecasting capabilities. BrightRoll’s method of aggregating high-quality publishers together into a unified network will allow advertisers to efficiently buy video ad space with scale across multiple websites. Investors Adams Street Partners; Comerica Bank; Felicis With net revenues estimated at $100 million for 2014, the Ventures; KPG Ventures; Scale Venture Partners; deal value equates to 6.4 times projected 2014 revenue. SoftTech VC; Stratim Capital; Trident Capital; True Having raised $40.2 million from well known investors, the Ventures sale represented 15.9 times total dollars invested.
Capstone Partners CapstoneInvestment BankingPartners Advisors 47 Investment Banking Advisors 47 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Bell Canada (BCE), Canada’s largest telecommunications company, agreed to buy Glentel for $595.1 million, boosting the carrier’s retail presence as the threat of increasing Deal Summary competition appears more certain. Date: 11/28/14 The move may be a proactive attempt to defend against a Transaction Value: $528M potential fourth national carrier increasing competition and Enterprise Value: $595M driving down prices. The deal also opens BCE’s U.S. footprint, % Sought: 100% where Glentel operates more than 700 stores under the Consideration: Cash Wireless Zone and Diamond Wireless names, two of Verizon’s six national premium retailers.
Glentel is the biggest independent mobile-phone retailer in Canada with almost 500 locations that sell phones and Valuation Metrics services from wireless carriers including Bell and Rogers. LTM Revenue Multiple: 0.4 x Additionally, Glentel operates 147 outlets in Australia and LTM EBITDA Multiple: 11.3 x the Philippines. In 2013, Glentel generated about 57% of its revenue in the U.S. and 31% in Canada, and with those LTM P/E Multiple: NM divisions posting operating losses as of late, it is uncertain Premium versus: whether Bell will continue to operate Glentel stores in the U.S. 1 day prior: 107.9% and Australia. 1 week prior: 114.9% 1 month prior: 172.2% BCE is paying a 134 percent premium on Glentel’s closing share price yesterday, the highest announced premium for a North American telecommunications company since 2012, according to Bloomberg data. Note: LTM and Premiums of last quarter prior to transaction announcement date.
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 48 Investment Banking Advisors 48 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Blackbird develops sensors, reconnaissance products, and apps for enterprise and mobile platforms together with secure infrastructure for globally transmitting mission-critical Deal Summary data and protecting critical assets from cyber attacks. Date: 11/5/14 Founded in 1997, Blackbird offers secure communications Transaction Value: $420M products such as Mustang, an app to send encrypted calls and texts on Android and Blackberry devices, and also % Sought: 100% provides ancillary cybersecurity and surveillance services to Consideration: Cash / Stock intelligence agencies.
Raytheon’s President of Intelligence, Information and Services (IIS) division, Lynn Dugle noted that "Blackbird Technologies is a strong fit for Raytheon and enhances the Valuation Metrics growth prospects of our business and the capabilities we Trailing Revenue Multiple: NA can offer our customers." According to Defense analyst Trailing EBITDA Multiple: NA Loren Thompson, the deal was part of Raytheon’s three- pronged strategy to counter weaker U.S. demand by Multiple on $ Invested: NA increasing foreign sales, investing in organic capability and making selected acquisitions.
Located in Herndon, VA, Blackbird will become part of Investors Raytheon’s IIS division. The company will keep its office and None leadership team as a wholly owned-subsidiary of Raytheon, according to a spokesman. Blackbird has more than 570 employees nationwide.
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 49 Investment Banking Advisors 49 Capstone Partners Investment Banking AdvisorsCapstone Partners Investment Banking Advisors
Public Company Observations and Trading & Operating Recommendations Metrics
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 50 Investment Banking Advisors WORLD CLASS WALL STREET EXPERTISE.50 BUILT FOR THE MIDDLE MARKET.TM Capstone Partners TradingInvestment Banking & OperatingAdvisors Metrics
($ in millions, except per share data) $ / Share M arket Enterprise % C hange Ent. Value/Rev. Ent. Value/EBITDA P rice/ EP S N T M / LT M Gro wth LT M M argin C o mpany N ame 12/ 31/14 C ap Value C ash D ebt LTM LQ LTM NTM LTM NTM LTM NTM R evenue EBITDA EPS Gro ss EBITDA N et
M obile 140 M ean 32,609 34,619 4,717 6,711 (3.2)% (4.5)% 4.9 x 3.4 x 17.7 x 12.6 x 28.9 x 23.8 x 19.6% 41.6% 36.6% 53.1 % 17.6 % 2.9 % M obile 140 M edian 2,238 2,081 278 135 (4.8)% (4.2)% 3.0 x 2.5 x 11.5 x 10.4 x 18.4 x 18.2 x 11.0% 16.5% 15.7% 55.3 % 21.0 % 9.2 %
Apps Stores & Content Aggregation Amazon 310.35 143,694 139,910 6,883 3,099 (22.2)% (3.7)% 1.6 x 1.4 x NA 18.7 x NA NA 17.4% 33.4% NA 28.6 % 6.6 % (0.3)% Apple 110.38 647,361 657,498 25,158 35,295 37.7 % 9.6 % 3.6 x 3.1 x 11.4 x 9.4 x 17.2 x 14.2 x 15.9% 20.7% 20.8% 38.6 % 31.6 % 21.5 % Bew inner Comm 2.93 750 704 47 0 (21.9)% (26.7)% 17.9 x 9.8 x 66.3 x 20.8 x 114.1 x 58.7 x 82.1% 218.2% 94.5% 45.7 % 27.0 % 15.8 % Digital Turbine 3.33 126 109 17 0 27.1 % (27.3)% 4.6 x 1.6 x NA 16.1 x NA NA 177.1% 152.2% 91.3% 29.4 % (54.4)% (71.3)% Google 530.66 358,536 307,119 60,058 8,641 (5.3)% (9.8)% 4.5 x 4.1 x 13.8 x 10.4 x 21.5 x 18.4 x 10.2% 33.2% 16.8% 58.1 % 32.8 % 24.9 % Ku6 Media 1.00 48 29 22 3 (64.6)% (20.6)% 1.7 x NA NA NA 6.3 x NA NA NA NA (7.8)% (19.6)% 42.9 % M ean 191,752 184,228 15,364 7,840 (8.2)% (13.1)% 5.7 x 4.0 x 30.5 x 15.1 x 39.8 x 30.4 x 60.6% 91.5% 55.8% 32.1 % 4.0 % 5.6 % M edian 72,222 70,307 3,465 1,551 (13.6)% (15.2)% 4.1 x 3.1 x 13.8 x 16.1 x 19.3 x 18.4 x 17.4% 33.4% 56.0% 34.0 % 16.8 % 18.7 %
Carrier Back Office Amdocs 46.66 7,272 6,058 1,424 210 13.1 % 1.7 % 1.7 x 1.6 x 8.8 x 8.1 x 14.8 x 13.9 x 4.0% 8.6% 6.4% 35.3 % 19.2 % 14.3 % Comverse 18.78 411 236 175 0 (51.6)% (15.9)% 0.5 x 0.5 x 3.3 x 8.3 x 17.0 x NA (16.5)% (60.3)% NA 34.2 % 13.7 % 4.7 % Convergys 20.37 2,044 2,208 249 413 (3.2)% 14.3 % 0.8 x 0.7 x 8.3 x 5.6 x 15.2 x 12.2 x 16.5% 47.8% 25.1% 36.1 % 10.1 % 5.5 % CSG Systems 25.07 861 935 183 258 (14.7)% (4.6)% 1.2 x 1.2 x 5.9 x 6.0 x 11.6 x 11.9 x 1.6% (1.5)% (2.8)% 48.5 % 21.1 % 9.7 % NeuStar 27.80 1,526 2,076 244 794 (44.2)% 12.0 % 2.2 x 2.1 x 4.8 x 4.6 x 6.8 x 7.1 x 2.1% 5.0% (3.8)% 74.3 % 45.6 % 26.4 % Synchronoss 41.86 1,772 1,708 303 239 34.7 % (8.6)% 4.0 x 3.2 x 14.4 x 9.9 x 25.1 x 23.2 x 24.5% 46.0% 8.0% 59.4 % 27.9 % 16.4 % Teleperformance 68.30 3,903 3,795 258 151 12.0 % 10.5 % 1.1 x 1.1 x 9.4 x 7.5 x 23.1 x 16.7 x 4.8% 24.9% 39.0% 30.5 % 11.9 % 5.0 % TeleTech 23.68 1,154 1,183 88 117 (1.1)% (3.7)% 1.0 x 0.9 x 6.9 x 7.1 x 15.5 x 15.4 x 5.7% (2.0)% 0.3% 29.0 % 14.0 % 6.3 % M ean 2,368 2,275 366 273 (6.9)% 0.7 % 1.6 x 1.4 x 7.7 x 7.1 x 16.1 x 14.3 x 5.3% 8.6% 10.3% 43.4 % 20.4 % 11.0 % M edian 1,649 1,892 246 225 (2.2)% (1.0)% 1.2 x 1.1 x 7.6 x 7.3 x 15.3 x 13.9 x 4.4% 6.8% 6.4% 35.7 % 16.6 % 8.0 %
Games / Virtual Goods Ateam 41.73 404 385 19 0 (41.6)% (24.1)% 3.4 x 2.8 x 25.6 x 13.9 x 39.4 x NA 23.4% 84.6% NA 83.8 % 13.5 % 9.2 % Changyou.com 27.36 1,446 1,429 387 370 (14.6)% 14.3 % 1.9 x 1.8 x 6.6 x 23.2 x NA 35.7 x 9.3% (71.7)% NA 77.6 % 29.7 % 4.1 % CyberAgent 37.85 2,368 2,081 287 0 (7.0)% 7.9 % 1.1 x 1.0 x 10.5 x 7.2 x 26.2 x NA 7.0% 46.1% NA 34.8 % 10.6 % 4.8 % DeNA 12.07 1,564 1,054 656 146 (42.6)% (5.1)% 0.8 x 0.9 x 1.7 x 3.7 x 7.3 x NA (11.7)% (53.4)% NA 63.4 % 43.5 % 15.3 % Feiyu 0.25 369 351 18 0 NA NA 11.0 x NA 26.3 x NA 24.8 x NA NA NA NA 89.5 % 41.7 % 30.8 % Gamevil 110.58 721 681 40 0 155.5 % (2.5)% 5.7 x 3.4 x 53.8 x 20.3 x 43.8 x 14.7 x 70.1% 165.4% 198.1% 62.0 % 10.6 % 13.7 % Glu Mobile 3.90 417 363 54 0 0.5 % (24.6)% 2.0 x 1.5 x NA 14.1 x 13.9 x 26.1 x 29.4% NA (46.6)% 67.0 % 2.9 % 13.6 % gumi 22.24 637 621 24 8 NA NA 5.7 x NA NA NA NA NA NA NA NA 28.6 % NA (1.6)% iDreamSky 17.08 723 697 25 0 NA 0.4 % 10.9 x 2.4 x 60.8 x 9.9 x NA 10.1 x 360.7% 516.4% 900.6% 41.8 % 17.9 % (5.1)% King Digital 15.36 4,911 3,935 976 0 NA 20.9 % 1.7 x 1.9 x 4.4 x 5.0 x 6.2 x 8.0 x (9.9)% (13.0)% (22.4)% 68.4 % 39.0 % 33.6 % Linekong 1.26 467 571 82 185 NA NA 5.5 x NA 39.0 x NA NA NA NA NA NA 56.1 % 14.2 % (71.8)% Mail.ru 16.30 3,392 2,617 776 0 (63.5)% (42.0)% 3.0 x 3.5 x 7.0 x 6.9 x 5.1 x 13.4 x (14.8)% 1.6% (62.1)% 61.2 % 43.2 % 77.9 % Sohu.com 53.18 2,047 1,366 1,050 370 (27.1)% 5.9 % 0.9 x 0.7 x 7.0 x NA NA NA 21.3% (71.4)% 63.9% 60.3 % 12.3 % (6.3)% M ean 1,497 1,242 338 83 (5.1)% (4.9)% 4.1 x 2.0 x 22.1 x 11.6 x 20.9 x 18.0 x 48.5% 67.2% 171.9% 61.1 % 23.3 % 9.1 % M edian 723 697 82 0 (20.9)% (1.0)% 3.0 x 1.8 x 10.5 x 9.9 x 19.4 x 14.1 x 15.3% 1.6% 20.7% 62.0 % 16.1 % 9.2 % *Sorted alphabetically within market segment
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 51 Investment Banking Advisors 51 Capstone Partners TradingInvestment Banking & OperatingAdvisors Metrics
($ in millions, except per share data) $ / Share M arket Enterprise % C hange Ent. Value/Rev. Ent. Value/EBITDA P rice/ EP S N T M / LT M Gro wth LT M M argin C o mpany N ame 12/ 31/14 C ap Value C ash D ebt LTM LQ LTM NTM LTM NTM LTM NTM R evenue EBITDA EPS Gro ss EBITDA N et
M -Commerce Enablement Alibaba 103.94 258,362 250,557 18,214 10,409 NA 17.0 % 24.3 x 17.0 x 64.6 x 33.2 x 59.9 x 40.4 x 42.8% 94.7% 48.1% 71.9 % 37.6 % 40.1 % Amdocs 46.66 7,272 6,058 1,424 210 13.1 % 1.7 % 1.7 x 1.6 x 8.8 x 8.1 x 14.8 x 13.9 x 4.0% 8.6% 6.4% 35.3 % 19.2 % 14.3 % Bango 1.82 94 90 4 0 (20.6)% 16.6 % 2.9 x NA NA NA NA NA NA NA NA 12.9 % (3.9)% (2.7)% China Binary 0.10 49 43 6 0 (65.5)% (38.7)% 4.0 x NA 9.2 x NA 15.1 x NA NA NA NA 68.7 % 43.3 % 28.7 % Danal 7.42 148 182 62 96 (16.7)% (24.1)% 1.9 x 2.1 x NA NA 18.4 x NA (9.4)% NA (96.4)% 99.9 % 5.0 % 8.5 % eBay 56.12 69,722 66,937 10,391 7,606 2.3 % (0.9)% 3.8 x 3.4 x 12.0 x 11.0 x 19.5 x 17.6 x 11.0% 8.8% 10.5% 68.1 % 31.9 % 20.8 % eServGlobal 0.46 121 121 3 3 (35.1)% (6.5)% 4.4 x 3.4 x NA 25.5 x 9.4 x NA 30.0% NA NA 57.3 % (1.6)% 45.7 % Grubhub 36.32 2,961 2,683 278 0 NA 6.1 % 11.7 x 8.7 x 63.1 x 28.6 x 170.0 x 76.3 x 33.8% 120.9% 122.8% 64.6 % 18.5 % 7.6 % Monitise 0.39 839 589 251 2 (64.5)% (19.8)% 3.6 x 2.8 x NA NA NA NA 30.9% 41.3% 36.9% 68.7 % (42.3)% (68.6)% Qiw i 20.19 1,094 720 379 5 (63.9)% (36.1)% 2.1 x 4.7 x 7.0 x 7.9 x 11.1 x 17.3 x (56.3)% (11.5)% (36.1)% 49.7 % 29.3 % 28.0 % RetailMeNot 14.62 790 603 216 28 (49.2)% (9.5)% 2.4 x 2.1 x 7.1 x 6.1 x 17.5 x 14.0 x 13.5% 16.5% 24.8% 93.0 % 33.0 % 18.6 % Seamless Dist. 1.46 61 37 24 0 (80.9)% (58.7)% 1.5 x 1.6 x NA NA NA NA (5.3)% 15.7% 42.1% (32.6)% (56.0)% (80.6)% M ean 28,460 27,385 2,604 1,530 (38.1)% (12.8)% 5.4 x 4.7 x 24.6 x 17.2 x 37.3 x 29.9 x 9.5% 36.9% 17.7% 54.8 % 9.5 % 5.0 % M edian 815 596 233 4 (42.2)% (8.0)% 3.3 x 3.1 x 9.2 x 11.0 x 17.5 x 17.5 x 12.2% 16.1% 24.8% 66.4 % 18.9 % 16.5 %
M essaging & VoIP Comverse 18.78 411 236 175 0 (51.6)% (15.9)% 0.5 x 0.5 x 3.3 x 8.3 x 17.0 x NA (16.5)% (60.3)% NA 34.2 % 13.7 % 4.7 % Mail.ru 16.30 3,392 2,617 776 0 (63.5)% (42.0)% 3.0 x 3.5 x 7.0 x 6.9 x 5.1 x 13.4 x (14.8)% 1.6% (62.1)% 61.2 % 43.2 % 77.9 % Mavenir 13.56 391 352 64 25 21.5 % 8.0 % 2.9 x 2.4 x NA NA NA NA 20.6% NA NA 55.3 % (0.3)% (3.6)% Myriad Group 4.30 437 435 10 8 181.5 % (10.6)% 7.8 x NA NA NA NA NA NA NA NA 34.1 % (22.5)% (72.7)% SINA 37.41 2,472 951 2,322 800 (55.6)% (9.1)% 1.3 x 1.1 x 10.3 x NA 38.2 x 37.2 x 13.0% (92.2)% 2.6% 62.1 % 12.3 % 9.2 % Tencent 14.51 134,570 131,906 8,251 5,587 13.7 % (2.5)% 10.8 x 9.0 x 34.6 x 20.4 x 38.0 x 28.8 x 20.3% 69.1% 32.1% 59.4 % 31.3 % 29.3 % M ean 23,612 22,749 1,933 1,070 7.7 % (12.0)% 4.4 x 3.3 x 13.8 x 11.9 x 24.6 x 26.5 x 4.5% (20.4)% (9.1)% 51.1 % 12.9 % 7.5 % M edian 1,455 693 476 16 (18.9)% (9.9)% 2.9 x 2.4 x 8.6 x 8.3 x 27.5 x 28.8 x 13.0% (29.3)% 2.6% 57.4 % 13.0 % 7.0 %
M obile / Local M arketing Amdocs 46.66 7,272 6,058 1,424 210 13.1 % 1.7 % 1.7 x 1.6 x 8.8 x 8.1 x 14.8 x 13.9 x 4.0% 8.6% 6.4% 35.3 % 19.2 % 14.3 % comScore 46.43 1,588 1,574 40 26 62.3 % 27.5 % 5.0 x 4.4 x 25.0 x 19.4 x 34.9 x 30.5 x 13.4% 28.7% 14.5% 69.8 % 19.9 % 14.2 % CyberAgent 37.85 2,368 2,081 287 0 (7.0)% 7.9 % 1.1 x 1.0 x 10.5 x 7.2 x 26.2 x NA 7.0% 46.1% NA 34.8 % 10.6 % 4.8 % Nasmedia 21.85 180 146 34 0 104.1 % 6.0 % 6.2 x 4.5 x 20.9 x 14.1 x 52.0 x 20.3 x 38.3% 48.4% 156.4% NA 29.9 % 14.9 % Rocket Fuel 16.12 666 624 112 70 (73.8)% 2.0 % 1.8 x 1.1 x NA NA NA NA 64.7% NA NA 48.3 % (0.3)% (4.3)% SINA 37.41 2,472 951 2,322 800 (55.6)% (9.1)% 1.3 x 1.1 x 10.3 x NA 38.2 x 37.2 x 13.0% (92.2)% 2.6% 62.1 % 12.3 % 9.2 % TubeMogul 22.55 672 626 48 2 NA 96.1 % 6.2 x 4.4 x NA NA NA NA 40.7% NA NA 69.0 % (4.5)% (0.2)% M ean 2,174 1,723 609 158 7.2 % 18.9 % 3.3 x 2.6 x 15.1 x 12.2 x 33.2 x 25.5 x 25.9% 7.9% 45.0% 53.2 % 12.4 % 7.6 % M edian 1,588 951 112 26 3.1 % 6.0 % 1.8 x 1.6 x 10.5 x 11.1 x 34.9 x 25.4 x 13.4% 28.7% 10.5% 55.2 % 12.3 % 9.2 %
*Sorted alphabetically within market segment
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 52 Investment Banking Advisors 52 Capstone Partners TradingInvestment Banking & OperatingAdvisors Metrics
($ in millions, except per share data) $ / Share M arket Enterprise % C hange Ent. Value/Rev. Ent. Value/EBITDA P rice/ EP S NTM / LTM Growth LT M M argin C o mpany N ame 12/ 31/14 C ap Value C ash D ebt LTM LQ LTM NTM LTM NTM LTM NTM R evenue EBITDA EPS Gro ss EBITDA N et
M obile Devices Apple 110.38 647,361 657,498 25,158 35,295 37.7 % 9.6 % 3.6 x 3.1 x 11.4 x 9.4 x 17.2 x 14.2 x 15.9% 20.7% 20.8% 38.6 % 31.6 % 21.5 % BDStar Navigation 5.51 1,292 1,305 44 57 (3.5)% (20.2)% 10.2 x 7.6 x 67.8 x NA 60.7 x NA 33.0% NA NA 31.1 % 15.0 % 12.8 % Blackberry 11.00 5,746 4,632 2,771 1,657 47.9 % 10.2 % 1.3 x 1.4 x NA 7.9 x NA NA (7.4)% NA NA 51.4 % 0.5 % (2.9)% Garmin 52.83 10,103 8,797 1,306 0 14.4 % 1.6 % 3.1 x 3.0 x 12.8 x 11.5 x 17.1 x 16.8 x 3.0% 10.5% 1.8% 55.5 % 24.4 % 21.3 % Hi-Target Nav 2.20 889 812 77 0 (0.4)% (28.6)% 9.1 x 7.2 x 27.9 x 49.9 x 34.2 x NA 26.1% (44.1)% NA 50.6 % 32.8 % 28.9 % HTC 4.47 3,705 1,898 1,807 0 (5.2)% 3.1 % 0.3 x 0.3 x NA 10.5 x NA NA (1.5)% NA NA 21.1 % (0.6)% 0.6 % LG 54.15 9,244 15,304 2,852 8,912 (16.1)% (12.8)% 0.3 x 0.3 x 4.9 x 4.0 x 10.9 x 8.1 x 1.3% 23.0% NA 23.4 % 5.6 % 1.5 % Samsung 1,215.76 178,118 128,013 63,279 13,174 (6.5)% 8.6 % 0.6 x 0.7 x 2.6 x 3.5 x 8.1 x 11.1 x (7.2)% (25.3)% (27.6)% 38.5 % 24.0 % 11.3 % Trimble Navigation 26.54 6,874 7,381 139 647 (23.5)% (13.0)% 3.0 x 2.9 x 14.2 x 13.5 x 16.6 x 18.0 x 4.0% 4.9% (7.6)% 57.6 % 21.4 % 17.4 % M ean 95,926 91,738 10,826 6,638 5.0 % (4.6)% 3.5 x 3.0 x 20.2 x 13.8 x 23.5 x 13.7 x 7.5% (1.7)% (3.2)% 40.9 % 17.2 % 12.5 % M edian 6,874 7,381 1,807 647 (3.5)% 1.6 % 3.0 x 2.9 x 12.8 x 10.0 x 17.1 x 14.2 x 3.0% 7.7% (2.9)% 38.6 % 21.4 % 12.8 %
M obile OS & Utility Software Aplix 12.23 153 115 41 2 (23.8)% (11.7)% 4.0 x NA NA NA NA NA NA NA NA 11.9 % (34.9)% (83.0)% Cheetah Mobile 15.12 1,937 1,654 284 0 NA (17.2)% 7.0 x 3.6 x 89.9 x 17.5 x 69.3 x 26.0 x 95.2% 414.8% 166.4% 81.7 % 7.8 % 12.1 % Google 530.66 358,536 307,119 60,058 8,641 (5.3)% (9.8)% 4.5 x 4.1 x 13.8 x 10.4 x 21.5 x 18.4 x 10.2% 33.2% 16.8% 58.1 % 32.8 % 24.9 % Microsoft 46.45 382,881 318,258 88,542 23,919 24.2 % 0.2 % 3.5 x 3.2 x 9.7 x 9.2 x 17.5 x 16.0 x 8.1% 5.7% 8.8% 67.1 % 35.7 % 24.4 % Mobileiron 9.96 757 609 147 0 NA (10.6)% 5.0 x 4.0 x NA NA NA NA 25.7% (52.0)% 64.7% 81.8 % (27.3)% (129.6)% Monotype Imaging 28.83 1,129 1,047 83 0 (9.5)% 1.8 % 5.8 x 5.3 x 14.6 x 13.5 x 26.0 x 24.1 x 8.7% 8.5% 7.7% 85.2 % 39.5 % 24.3 % Myriad Group 4.30 437 435 10 8 181.5 % (10.6)% 7.8 x NA NA NA NA NA NA NA NA 34.1 % (22.5)% (72.7)% NQ Mobile 3.91 347 241 278 173 (73.4)% (43.9)% 0.8 x 0.6 x 3.6 x 5.1 x 5.1 x 9.0 x 28.6% (29.3)% (42.8)% 36.2 % 21.5 % 17.9 % Nuance Comm 14.27 4,605 6,149 588 2,132 (6.1)% (7.4)% 3.2 x 3.0 x 10.9 x 11.4 x 12.7 x 12.6 x 6.3% (4.0)% 1.3% 59.3 % 29.2 % 18.5 % Opera 12.70 1,799 1,717 145 63 (7.0)% (9.3)% 4.1 x 2.9 x 19.7 x 11.8 x 26.7 x 20.9 x 43.3% 66.8% 27.4% 40.8 % 21.0 % 15.8 % Qihoo 360 57.26 7,211 7,142 1,706 1,637 (30.2)% (15.1)% 6.0 x 3.7 x 22.5 x 10.9 x 24.2 x 16.5 x 61.4% 105.8% 46.1% 80.3 % 26.9 % 26.4 % Sungy Mobile 4.99 167 48 119 0 (75.7)% (23.5)% 0.7 x 0.7 x 3.0 x NA 9.9 x 21.2 x 12.0% NA (53.1)% 67.4 % 25.1 % 23.9 % M ean 63,330 53,711 12,667 3,048 (2.5)% (13.1)% 4.4 x 3.1 x 20.9 x 11.2 x 23.6 x 18.3 x 29.9% 61.1% 24.3% 58.6 % 12.9 % (8.1)% M edian 1,464 1,350 213 35 (8.3)% (10.6)% 4.3 x 3.4 x 13.8 x 11.2 x 21.5 x 18.4 x 18.8% 8.5% 12.8% 63.2 % 23.3 % 18.2 %
*Sorted alphabetically within market segment
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 53 Investment Banking Advisors 53 Capstone Partners TradingInvestment Banking & OperatingAdvisors Metrics
($ in millions, except per share data) $ / Share M arket Enterprise % C hange Ent. Value/Rev. Ent. Value/EBITDA P rice/ EP S N T M / LT M Gro wth LT M M argin C o mpany N ame 12/ 31/14 C ap Value C ash D ebt LTM LQ LTM NTM LTM NTM LTM NTM R evenue EBITDA EPS Gro ss EBITDA N et
M obility & M onitoring BSM 1.38 66 56 21 11 (53.3)% (9.1)% 2.1 x 1.9 x 13.3 x 14.6 x NA 35.6 x 10.2% (9.1)% NA 56.2 % 15.7 % 4.6 % ClickSoftw are 7.18 236 194 42 0 (4.3)% (10.6)% 1.6 x 1.4 x NA NA NA NA 12.6% NA NA 58.0 % (2.1)% 0.3 % Fleetmatics 35.49 1,340 1,203 161 25 (17.9)% 16.4 % 5.5 x 4.4 x 20.3 x 13.9 x 39.9 x 30.0 x 25.8% 46.6% 33.1% 75.3 % 27.2 % 15.7 % Ituran 22.05 462 417 46 0 1.0 % 4.8 % 2.3 x 2.4 x 7.4 x NA 16.7 x 16.8 x (5.9)% NA (0.5)% 53.0 % 30.9 % 15.2 % Mix Telematics 0.26 209 135 80 5 (44.6)% (32.3)% 1.1 x 1.1 x 4.9 x 5.9 x 11.8 x 12.7 x 3.6% (16.7)% (6.8)% 67.7 % 23.4 % 15.3 % Mobile Create 7.03 163 153 15 5 6.7 % (9.0)% 3.4 x 2.9 x 16.6 x NA 30.9 x NA 16.3% NA NA 34.1 % 20.2 % 11.2 % Numerex 11.06 210 218 16 25 (14.6)% 5.5 % 2.4 x 2.0 x 23.5 x 16.0 x 40.2 x 29.1 x 17.4% 46.8% 38.1% 45.4 % 10.2 % 5.8 % ORBCOMM 6.54 458 464 41 47 3.2 % 13.7 % 5.4 x 2.9 x 30.0 x 13.4 x NA NA 84.2% 123.6% NA 48.3 % 18.0 % 3.8 % Silver Spring 8.43 411 302 110 1 (59.9)% (12.6)% 1.4 x 1.0 x NA NA NA NA 49.5% NA 130.8% 28.4 % 1.7 % (12.0)% Tianze Information 2.84 454 358 97 0 32.8 % (7.5)% 13.6 x NA NA NA 216.8 x NA NA NA NA 58.2 % (1.6)% 8.1 % M ean 401 350 63 12 (15.1)% (4.1)% 3.9 x 2.2 x 16.6 x 12.8 x 59.4 x 24.8 x 23.8% 38.3% 38.9% 52.5 % 14.4 % 6.8 % M edian 324 260 44 5 (9.4)% (8.3)% 2.3 x 2.0 x 16.6 x 13.9 x 35.4 x 29.1 x 16.3% 46.6% 33.1% 54.6 % 16.9 % 7.0 %
Portals & Social Networks Daum Comm 113.24 6,534 6,265 269 0 NA NA 12.2 x 6.4 x 74.2 x 19.5 x NA 26.8 x 89.5% 281.3% NA 100.0 % 16.4 % (0.2)% Facebook 78.02 217,508 203,536 14,250 278 42.8 % (1.3)% 18.2 x 12.9 x 36.0 x 22.0 x 52.5 x 42.0 x 40.5% 63.4% 24.9% 82.0 % 50.5 % 34.5 % Gree 6.04 1,431 915 598 82 (38.8)% (11.4)% 0.9 x 1.2 x 2.1 x 4.1 x 8.1 x NA (26.6)% (47.4)% NA 76.0 % 40.5 % 17.0 % Mail.ru 16.30 3,392 2,617 776 0 (63.5)% (42.0)% 3.0 x 3.5 x 7.0 x 6.9 x 5.1 x 13.4 x (14.8)% 1.6% (62.1)% 61.2 % 43.2 % 77.9 % MeetMe 1.53 69 57 16 4 (16.4)% (22.3)% 1.3 x 1.1 x 19.3 x 8.1 x NA NA 14.2% 137.9% 67.8% 100.0 % 6.6 % (11.5)% Momo 12.00 2,238 2,076 162 0 NA NA 72.8 x NA NA NA NA NA NA NA NA 57.5 % (36.5)% (274.8)% Mono Technology 0.11 329 302 40 13 (6.1)% (17.0)% 6.6 x NA 21.5 x NA 82.9 x 44.0 x NA NA 88.4% 43.2 % 30.7 % 8.7 % SINA 37.41 2,472 951 2,322 800 (55.6)% (9.1)% 1.3 x 1.1 x 10.3 x NA 38.2 x 37.2 x 13.0% (92.2)% 2.6% 62.1 % 12.3 % 9.2 % Tencent 14.51 134,570 131,906 8,251 5,587 13.7 % (2.5)% 10.8 x 9.0 x 34.6 x 20.4 x 38.0 x 28.8 x 20.3% 69.1% 32.1% 59.4 % 31.3 % 29.3 % Tian Ge Interactive 0.53 664 436 228 0 NA (14.0)% 4.0 x 3.5 x 11.6 x 8.4 x NA 14.8 x 14.7% 39.2% 179.4% 88.7 % 34.6 % (31.7)% Tw itter 35.87 22,425 20,303 3,648 1,526 (43.6)% (30.5)% 17.4 x 10.1 x NA 44.8 x NA 128.5 x 72.0% 453.3% NA 63.8 % 7.0 % 2.3 % M ean 35,603 33,579 2,778 754 (20.9)% (16.7)% 13.5 x 5.4 x 24.1 x 16.8 x 37.5 x 42.0 x 24.8% 100.7% 47.6% 72.2 % 21.5 % (12.7)% M edian 2,472 2,076 598 13 (27.6)% (14.0)% 6.6 x 3.5 x 19.3 x 13.9 x 38.1 x 33.0 x 14.7% 63.4% 32.1% 63.8 % 30.7 % 8.7 %
Search, Referral & Navigation Baidu 227.97 79,928 75,499 8,365 3,936 28.2 % 4.5 % 10.4 x 7.4 x 32.5 x 21.5 x 36.5 x 28.6 x 41.3% 51.1% 27.6% 63.7 % 32.0 % 30.3 % Daum Comm 113.24 6,534 6,265 269 0 NA NA 12.2 x 6.4 x 74.2 x 19.5 x NA 26.8 x 89.5% 281.3% NA 100.0 % 16.4 % (0.2)% DigitalGlobe 30.97 2,328 3,339 127 1,139 (24.7)% 8.7 % 5.2 x 4.6 x 12.8 x 9.6 x 65.9 x NA 13.8% 32.7% (81.7)% 75.0 % 41.0 % 5.6 % Google 530.66 358,536 307,119 60,058 8,641 (5.3)% (9.8)% 4.5 x 4.1 x 13.8 x 10.4 x 21.5 x 18.4 x 10.2% 33.2% 16.8% 58.1 % 32.8 % 24.9 % Grubhub 36.32 2,961 2,683 278 0 NA 6.1 % 11.7 x 8.7 x 63.1 x 28.6 x 170.0 x 76.3 x 33.8% 120.9% 122.8% 64.6 % 18.5 % 7.6 % Just Dial 21.41 1,507 1,412 95 0 (8.2)% (18.7)% 16.6 x 12.6 x 60.8 x 39.7 x 74.5 x 53.8 x 31.4% 53.4% 38.5% 46.8 % 27.3 % 23.9 % Naver 652.31 19,221 18,281 1,386 445 (4.9)% (14.5)% 7.3 x 6.1 x 27.2 x 17.6 x 42.5 x 31.1 x 19.6% 54.9% 36.7% 78.3 % 26.8 % 18.2 % M ean 67,288 59,228 10,083 2,023 (3.0)% (4.0)% 9.7 x 7.1 x 40.6 x 21.0 x 68.5 x 39.2 x 34.2% 89.7% 26.8% 69.5 % 27.8 % 15.8 % M edian 6,534 6,265 278 445 (5.3)% (2.7)% 10.4 x 6.4 x 32.5 x 19.5 x 54.2 x 29.9 x 31.4% 53.4% 32.1% 64.6 % 27.3 % 18.2 %
*Sorted alphabetically within market segment
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 54 Investment Banking Advisors 54 Capstone Partners TradingInvestment Banking & OperatingAdvisors Metrics
($ in millions, except per share data) $ / Share M arket Enterprise % C hange Ent. Value/Rev. Ent. Value/EBITDA P rice/ EP S NTM / LTM Growth LT M M argin C o mpany N ame 12/ 31/14 C ap Value C ash D ebt LTM LQ LTM NTM LTM NTM LTM NTM R evenue EBITDA EPS Gro ss EBITDA N et
Video, M usic & eBooks Amazon 310.35 143,694 139,910 6,883 3,099 (22.2)% (3.7)% 1.6 x 1.4 x NA 18.7 x NA NA 17.4% 33.4% NA 28.6 % 6.6 % (0.3)% Apple 110.38 647,361 657,498 25,158 35,295 37.7 % 9.6 % 3.6 x 3.1 x 11.4 x 9.4 x 17.2 x 14.2 x 15.9% 20.7% 20.8% 38.6 % 31.6 % 21.5 % Google 530.66 358,536 307,119 60,058 8,641 (5.3)% (9.8)% 4.5 x 4.1 x 13.8 x 10.4 x 21.5 x 18.4 x 10.2% 33.2% 16.8% 58.1 % 32.8 % 24.9 % Netflix 341.61 20,581 19,814 1,667 900 (7.2)% (24.3)% 3.8 x 3.1 x 46.7 x 35.3 x NA NA 24.1% 32.3% NA 32.1 % 8.2 % 4.5 % Pandora Media 17.83 3,710 3,394 316 0 (33.0)% (26.2)% 3.9 x 3.0 x NA 32.0 x NA 42.3 x 29.2% NA NA 44.5 % (0.7)% 1.9 % Tian Ge Interactive 0.53 664 436 228 0 NA (14.0)% 4.0 x 3.5 x 11.6 x 8.4 x NA 14.8 x 14.7% 39.2% 179.4% 88.7 % 34.6 % (31.7)% M ean 195,758 188,028 15,718 7,989 (6.0)% (11.4)% 3.6 x 3.0 x 20.9 x 19.0 x 19.3 x 22.4 x 18.6% 31.8% 72.3% 48.4 % 18.8 % 3.5 % M edian 82,137 79,862 4,275 2,000 (7.2)% (11.9)% 3.9 x 3.1 x 12.7 x 14.5 x 19.3 x 16.6 x 16.6% 33.2% 20.8% 41.6 % 19.9 % 3.2 %
Wireless Network Equipment Alcatel-Lucent 3.59 10,138 10,358 6,131 6,352 (19.9)% 15.9 % 0.6 x 0.6 x 6.7 x 5.8 x NA 21.1 x (6.7)% 15.0% NA 33.9 % 8.8 % (1.2)% Allw in Telecom 1.27 452 441 20 8 19.7 % (20.9)% 7.8 x NA NA NA NA NA NA NA NA 26.1 % (24.3)% (39.0)% Aruba Netw orks 18.18 1,996 1,680 315 0 1.6 % (15.8)% 2.2 x 1.9 x 12.6 x 7.8 x 20.7 x 15.8 x 14.7% 62.2% 30.6% 69.4 % 17.2 % 12.2 % Boomsense 3.28 525 494 77 46 34.1 % (7.9)% 10.5 x 6.3 x NA NA NA NA 65.1% NA NA 45.0 % (56.9)% (83.1)% Cisco Systems 27.82 142,234 111,099 52,107 20,972 24.0 % 10.5 % 2.3 x 2.3 x 7.1 x 7.9 x 13.4 x 12.9 x 3.2% (9.9)% 3.9% 60.3 % 32.9 % 22.8 % EchoStar 52.50 4,811 5,409 1,780 2,377 5.6 % 7.7 % 1.6 x 1.5 x 8.1 x 5.7 x NA 29.1 x 4.5% 42.4% NA 36.6 % 19.7 % 3.5 % Ericsson 12.06 38,848 32,832 9,153 3,138 (1.2)% (5.0)% 1.0 x 1.1 x 7.2 x 7.5 x 14.5 x 14.8 x (2.5)% (3.6)% (2.0)% 36.7 % 14.5 % 8.6 % GN Store 21.91 3,497 3,773 22 298 (10.9)% (0.6)% 3.1 x 2.9 x 14.4 x 12.6 x 27.9 x 18.9 x 6.7% 13.6% 47.3% 62.0 % 21.9 % 10.8 % Hytera Comm 1.63 1,131 1,160 96 125 4.0 % (18.5)% 4.2 x 3.0 x 19.2 x NA 15.7 x NA 36.9% NA NA 47.0 % 21.7 % 25.9 % Motorola Solutions 67.08 15,909 16,469 2,845 3,405 (0.6)% 6.0 % 2.8 x 2.8 x 9.9 x 12.0 x 20.6 x 21.6 x 0.9% (18.0)% (4.7)% 48.3 % 28.4 % 14.2 % NEC 2.95 7,656 11,140 1,671 5,155 30.7 % (14.7)% 0.4 x 0.4 x 6.3 x 6.2 x 11.2 x NA (6.9)% 1.0% NA 30.2 % 6.5 % 2.5 % Nokia 7.94 28,968 22,579 9,686 3,298 (0.9)% (6.9)% 1.4 x 1.4 x 11.9 x 10.2 x 24.9 x 20.6 x 1.5% 17.3% 21.0% 44.1 % 12.1 % 8.3 % Ruckus Wireless 12.02 1,012 823 189 0 (15.4)% (10.0)% 2.6 x 2.2 x NA 12.8 x 38.8 x 22.3 x 20.9% NA 74.0% 68.1 % 2.3 % 9.2 % Sunw ave 1.43 587 626 29 69 35.8 % 7.9 % 5.2 x 3.5 x NA 27.1 x NA 36.5 x 47.8% 284.2% 223.0% 23.5 % (10.3)% (10.8)% Ubiquiti Netw orks 29.64 2,619 2,300 391 72 (35.5)% (21.0)% 3.9 x 3.6 x 12.8 x 10.7 x 14.7 x 14.3 x 9.0% 19.5% 2.5% 44.2 % 30.2 % 30.6 % ViaSat 63.03 2,953 3,636 42 725 0.6 % 14.4 % 2.7 x 2.5 x 16.4 x 10.7 x NA 37.3 x 8.2% 54.3% NA 28.2 % 16.3 % 2.9 % ZTE 2.91 9,537 11,190 2,425 4,078 34.9 % 17.9 % 0.9 x 0.7 x NA 9.1 x 23.6 x 18.8 x 19.1% NA NA 29.5 % 3.3 % 3.3 % M ean 16,051 13,883 5,116 2,948 6.3 % (2.4)% 3.1 x 2.3 x 11.1 x 10.4 x 20.5 x 21.9 x 13.9% 39.8% 44.0% 43.1 % 8.5 % 1.2 % M edian 3,497 3,773 391 725 1.6 % (5.0)% 2.6 x 2.2 x 10.9 x 9.6 x 20.6 x 20.6 x 7.4% 16.2% 21.0% 44.1 % 14.5 % 8.3 %
*Sorted alphabetically within market segment
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 55 Investment Banking Advisors 55 Capstone Partners TradingInvestment Banking & OperatingAdvisors Metrics
($ in millions, except per share data) $ / Share M arket Enterprise % C hange Ent. Value/Rev. Ent. Value/EBITDA P rice/ EP S NTM / LTM Growth LT M M argin C o mpany N ame 12/ 31/14 C ap Value C ash D ebt LTM LQ LTM NTM LTM NTM LTM NTM R evenue EBITDA EPS Gro ss EBITDA N et
Wireless Network Operators America Movil 1.11 75,746 112,328 7,130 43,713 (4.5)% (12.1)% 1.8 x 1.9 x 5.7 x 6.1 x 16.9 x 11.0 x (3.6)% (5.8)% 53.5% 55.3 % 32.0 % 7.6 % AT&T 33.59 174,231 247,398 2,458 75,625 (4.5)% (4.7)% 1.9 x 1.8 x 5.9 x 5.9 x 13.5 x 13.3 x 2.7% (0.4)% 1.4% 58.6 % 32.1 % 9.9 % China Mobile 11.67 238,537 166,122 73,228 814 12.6 % 1.0 % 1.6 x 1.5 x 4.3 x 4.0 x 12.7 x 13.4 x 4.2% 6.7% (5.2)% 76.6 % 36.8 % 17.9 % Deutsche Telekom 16.13 71,169 125,944 12,568 67,343 (6.0)% 6.9 % 1.6 x 1.7 x 5.4 x 5.8 x 23.1 x 20.0 x (1.6)% (7.0)% NA 38.7 % 30.1 % 4.0 % DIRECTV 86.70 43,544 60,411 2,898 19,765 25.5 % 0.2 % 1.8 x 1.8 x 7.3 x 7.0 x 14.3 x 14.0 x 4.3% 4.0% 1.9% 47.1 % 25.1 % 9.5 % Dish Netw ork 72.89 33,596 37,695 9,272 13,371 25.8 % 12.9 % 2.6 x 2.5 x 13.3 x 12.9 x 40.9 x 41.2 x 4.4% 3.0% (0.5)% 35.7 % 19.5 % 5.7 % EchoStar 52.50 4,811 5,409 1,780 2,377 5.6 % 7.7 % 1.6 x 1.5 x 8.1 x 5.7 x NA 29.1 x 4.5% 42.4% NA 36.6 % 19.7 % 3.5 % Gogo 16.53 1,409 1,484 243 318 (33.4)% (2.0)% 3.8 x 3.3 x NA NA NA NA 16.1% NA 8.5% 47.7 % 2.8 % (21.0)% Inmarsat 12.46 5,576 7,388 246 2,058 (0.5)% 9.6 % 5.8 x 5.7 x 11.0 x 10.5 x 31.9 x 28.6 x 2.3% 4.8% 11.7% 64.5 % 52.8 % 14.5 % Intelsat 17.36 1,851 16,649 656 15,454 (23.0)% 1.3 % 6.7 x 6.9 x 8.2 x 8.7 x 6.6 x 8.5 x (3.1)% (5.8)% (21.9)% 86.4 % 81.5 % 12.0 % Mobivity 1.19 27 25 2 0 (37.0)% (4.8)% 6.3 x 4.5 x NA NA NA NA 42.1% 79.5% 84.9% 73.8 % (144.9)% (161.8)% NTT DOCOMO 14.76 58,257 58,080 2,260 2,083 (10.0)% (11.6)% 1.4 x 1.6 x 3.9 x 5.0 x 15.1 x NA (8.4)% (23.1)% NA 56.3 % 37.0 % 10.0 % Orange 17.13 45,368 86,532 8,881 50,044 38.2 % 14.0 % 1.6 x 1.8 x 5.1 x 6.0 x 21.9 x 15.0 x (14.1)% (14.4)% NA 39.7 % 31.0 % 3.8 % SES 35.92 14,522 19,550 1,319 6,347 11.2 % 3.8 % 8.2 x 8.1 x 10.4 x 11.0 x 17.5 x 18.9 x 0.7% (5.3)% (7.5)% 84.5 % 78.7 % 34.7 % Sky 14.01 23,842 25,938 2,234 4,330 0.2 % (2.1)% 2.1 x 1.4 x 9.7 x 7.8 x 13.9 x 16.2 x 47.4% 24.6% (14.1)% 38.7 % 21.4 % 12.8 % Sky Vision 0.13 913 1,128 21 237 (21.4)% (7.4)% 4.3 x 3.6 x 11.1 x 9.4 x NA NA 17.1% 18.5% NA 11.9 % 38.3 % (3.0)% SOFTBANK 60.18 71,549 140,222 22,330 91,003 (31.2)% (14.1)% 1.9 x 2.0 x 6.8 x 7.9 x 11.1 x NA (3.7)% (13.1)% NA 39.0 % 27.6 % 8.7 % Sprint 4.15 16,417 43,381 5,302 32,266 (61.4)% (34.5)% 1.2 x 1.3 x 8.5 x 7.6 x NA NA (3.7)% 11.0% 25.4% 48.4 % 14.5 % (7.8)% Telecom Italia 1.07 19,267 58,160 6,695 45,588 7.5 % (6.8)% 2.1 x 2.2 x 4.7 x 5.5 x NA 12.2 x (6.7)% (14.7)% NA 53.4 % 44.9 % 5.5 % Telefónica 14.43 65,981 123,263 18,185 75,467 (11.5)% (6.7)% 1.8 x 1.9 x 4.9 x 5.9 x 10.3 x 13.4 x (3.2)% (15.7)% (23.0)% 58.3 % 37.1 % 9.4 % Verizon 46.78 194,124 295,762 7,853 109,491 (4.8)% (6.4)% 2.4 x 2.3 x 6.8 x 6.6 x 14.2 x 12.9 x 3.2% 3.4% 9.8% 62.0 % 34.9 % 9.7 % ViaSat 63.03 2,953 3,636 42 725 0.6 % 14.4 % 2.7 x 2.5 x 16.4 x 10.7 x NA 37.3 x 8.2% 54.3% NA 28.2 % 16.3 % 2.9 % Vodafone 3.47 91,987 129,649 15,249 52,911 (51.8)% 4.7 % 2.0 x 2.0 x 8.6 x 6.8 x NA 36.2 x 2.3% 25.7% NA 25.6 % 23.3 % 2.4 % M ean 54,595 76,789 8,733 30,927 (7.6)% (1.6)% 2.9 x 2.8 x 7.9 x 7.5 x 17.6 x 20.1 x 4.8% 7.8% 8.9% 50.7 % 25.8 % (0.4)% M edian 33,596 58,080 2,898 15,454 (4.5)% (2.0)% 2.0 x 2.0 x 7.3 x 6.8 x 14.3 x 15.0 x 2.3% 3.2% 1.6% 48.4 % 31.0 % 7.6 %
*Sorted alphabetically within market segment
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 56 Investment Banking Advisors 56 Capstone Partners TradingInvestment Banking & OperatingAdvisors Metrics
($ in millions, except per share data) $ / Share M arket Enterprise % C hange Ent. Value/Rev. Ent. Value/EBITDA P rice/ EP S NTM / LTM Growth LT M M argin C o mpany N ame 12/ 31/14 C ap Value C ash D ebt LTM LQ LTM NTM LTM NTM LTM NTM R evenue EBITDA EPS Gro ss EBITDA N et
Wireless Semis Broadcom 43.33 25,651 23,922 3,322 1,593 46.2 % 7.2 % 2.9 x 2.9 x 14.1 x 12.3 x 16.2 x 13.0 x 0.5% 15.1% 25.1% 51.1 % 20.3 % 19.0 % CSR 13.34 2,179 1,942 237 0 27.4 % 8.5 % 2.3 x 2.5 x 15.8 x 13.5 x 36.1 x 25.1 x (5.9)% 16.5% 43.4% 53.9 % 14.7 % 7.3 % Marvell 14.50 7,411 5,008 2,403 0 0.8 % 7.6 % 1.3 x 1.3 x 8.0 x 7.6 x 12.2 x 13.7 x (1.4)% 5.5% (10.9)% 49.9 % 16.6 % 16.3 % MediaTek 14.56 22,760 17,789 6,400 1,429 (1.9)% (1.7)% 2.7 x 2.4 x 15.3 x 10.5 x 14.7 x 14.6 x 14.9% 46.1% 0.9% 48.4 % 17.9 % 22.8 % Qorvo NA NA NA 241 0 NA NA NA NA NA NA NA NA 29.7% 264.5% NA 42.2 % 10.5 % 8.4 % QUALCOMM 74.33 123,581 106,016 17,565 0 0.1 % (0.6)% 4.0 x 3.8 x 11.5 x 10.3 x 14.8 x 14.3 x 5.1% 11.2% 3.8% 59.7 % 34.9 % 32.5 % Skyw orks Solutions 72.71 13,862 13,057 806 0 154.6 % 25.3 % 5.7 x 4.4 x 24.2 x 12.0 x 22.4 x 16.2 x 30.8% 102.0% 38.8% 44.6 % 23.5 % 27.2 % STMicro 7.50 6,470 5,976 2,460 1,966 (6.7)% (2.8)% 0.8 x 0.8 x 7.1 x 5.3 x 34.1 x 25.0 x (0.9)% 33.5% NA 33.5 % 11.1 % 2.6 % Texas Instruments 53.47 56,475 57,934 3,186 4,645 21.8 % 12.1 % 4.5 x 4.3 x 13.3 x 10.7 x 21.1 x 17.7 x 5.3% 23.5% 19.7% 56.0 % 34.1 % 21.5 % M ean 32,299 28,956 4,069 1,070 30.3 % 6.9 % 3.0 x 2.8 x 13.7 x 10.3 x 21.5 x 17.4 x 8.7% 57.5% 17.3% 48.8 % 20.4 % 17.5 % M edian 18,311 15,423 2,460 0 11.3 % 7.4 % 2.8 x 2.7 x 13.7 x 10.6 x 18.7 x 15.4 x 5.1% 23.5% 19.7% 49.9 % 17.9 % 19.0 %
Wireless Tower American Tow er 98.85 39,190 52,830 296 13,935 23.8 % 5.6 % 13.2 x 11.9 x 23.0 x 18.4 x 53.9 x 38.3 x 11.2% 25.0% 40.7% 73.3 % 57.4 % 18.3 % Bharti Infratel 5.33 10,068 9,962 453 347 96.0 % 11.6 % 5.5 x 5.0 x 13.3 x 11.8 x 33.9 x 29.8 x 8.8% 12.4% 13.7% 51.6 % 41.0 % 16.3 % Crow n Castle 78.70 26,274 37,610 239 11,574 7.2 % (2.3)% 10.7 x 10.1 x 20.0 x 17.6 x NA 59.7 x 5.6% 13.9% NA 64.1 % 53.4 % 4.8 % GTL Infrastructure 0.04 89 2,387 57 2,355 17.8 % (20.8)% 8.7 x NA 35.2 x NA NA NA NA NA NA 78.3 % 24.7 % (13.7)% SBA Comm 110.76 14,299 21,393 456 7,550 23.3 % (0.1)% 14.7 x 13.0 x 25.6 x 19.7 x NA NA 12.9% 30.0% NA 71.4 % 57.4 % (0.8)% M ean 17,984 24,836 300 7,152 33.6 % (1.2)% 10.5 x 10.0 x 23.4 x 16.9 x 43.9 x 42.6 x 9.6% 20.3% 27.2% 67.7 % 46.8 % 5.0 % M edian 14,299 21,393 296 7,550 23.3 % (0.1)% 10.7 x 11.0 x 23.0 x 18.0 x 43.9 x 38.3 x 10.0% 19.4% 27.2% 71.4 % 53.4 % 4.8 %
*Sorted alphabetically within market segment
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 57 Investment Banking Advisors 57 Capstone Partners Investment Banking AdvisorsCapstone Partners Investment Banking Advisors
Observations Technology & and RecommendationsTelecom Team
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 58 Investment Banking Advisors WORLD CLASS WALL STREET EXPERTISE.58 BUILT FOR THE MIDDLE MARKET.TM Capstone Partners TechnologyInvestment Banking Advisors & Telecom Team
DAVID MICHAELS Managing Director, Head of Technology & Telecom Group Phone: (858) 926-5950 Email: [email protected] David Michaels is a Managing Director of Capstone where he is responsible for managing the firm’s Technology & Telecom Group (TTG). David founded SagePoint Advisors in 2008, a boutique investment banking firm focused on providing merger, acquisition and strategic advisory services to growth companies in the technology and telecom sectors. Prior to founding SagePoint, David was a Co-Founder, Partner and Managing Director at Montgomery & Co., a leading investment bank focused on serving emerging-growth technology companies and their venture backers. David co-founded Montgomery’s investment banking business in 1996 and played an instrumental role in building the business to over $50 million in revenues and 80 employees. Mr. Michaels also ran the firm’s Communications and Digital Media Technology practice areas for several years prior to his departure. David has intimate knowledge of the strategic landscape, market dynamics and technology underpinnings of several high technology market segments including Mobile Software & Services, Consumer Internet, E-Commerce, Enterprise SaaS, Cloud & Infrastructure Software and Consumer, IT & Telecom Hardware. Prior to joining Montgomery in 1994, David worked at Bankers Trust Corporate Finance Department, where he helped execute merger and acquisition assignments. Prior to that, Mr. Michaels worked as a structural engineer at General Dynamics, Mr. Michaels received an M.B.A. in entrepreneurship from the Anderson School of Management at UCLA and holds a B.S. in Mechanical Engineering from the University of Michigan.
JOHN SNEAD Managing Director, Head of International Phone: 44 (0)7979 704302 Email: [email protected]
John Snead is responsible for managing the firm’s international operations as Managing Director of Capstone Grenport Ltd (CGL), focusing on the European technology and private equity markets. In his capacity, John is instrumental the firm’s cross border M&A and financing activities. He joins Capstone with 25 years of experience in in the investment banking and financial markets both in London and Silicon Valley. For the seven years prior to joining Capstone, John was the founder and Managing Partner of Grenport Limited, a London-based investment banking boutique serving the strategic and transaction needs of emerging technology companies. Prior to Grenport, John was a Managing Director in Kroll’s corporate finance group. He has also served as a senior professional at leading financial advisory firms such as Arthur Andersen, KPMG and Morgan Grenfell. John is particularly experienced in the technology sector where he has advised on more than 80 transactions, primarily in the software and IT services sectors. John holds an MBA, CFA, CF qualifications and is regulated by ICAEW.
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 59 Investment Banking Advisors 59 Capstone Partners TechnologyInvestment Banking Advisors & Telecom Team
JOHN FERRARA President and Managing Partner Phone: (617) 619-3325 Email: [email protected]
John serves as the Managing Partner of Capstone, responsible for the firm’s investment and merchant banking operations, as well as managing client transactions. During his tenure as Managing Partner, Capstone has completed three acquisitions to expand the firm’s presence from Boston to include seven offices internationally, culminating in the “Global Investment Banking Boutique of the Year” award in 2012. Over his 25+ year career in mergers & acquisitions, venture capital and management consulting, John has executed well over 150 transactions and related engagements. Prior to 2002, when he acquired the practice he initially founded from Arthur Andersen to form Capstone, John served as a Regional Managing Partner with Andersen Corporate Finance LLC. While with Andersen, John held various national and global leadership positions. He started his career in Lehman Brothers' M&A group in New York, London and Riyadh, later becoming a founding member of Rodman & Renshaw's M&A practice in New York. After a break to compete in Australia's semi-professional baseball league, John joined The Deloitte Consulting Group in Los Angeles to focus on turnaround and interim management engagements. John has been recognized as “Investment Banker of the Year” in 2012, “Deal Maker of the Year” in 2010 and received the “40 Under 40” award for entrepreneurial excellence in 2006. He is the founder of the Spirit Triumph Cancer Foundation, author of the children’s book "Beyond the Waterspout" and former owner in the Holyoke Sox, a baseball franchise in the NECBL. John earned his MBA from The Anderson School at UCLA and the London School of Economics. He holds dual BA degrees from Wesleyan University and is qualified as a General Securities Principal.
TEAK MURPHY Vice President, Technology & Telecom Group Phone: (310) 746-5006 Email: [email protected] Teak joins Capstone as a Vice President in the Technology & Telecom Group, based out of San Diego. Prior to Capstone’s acquisition of SagePoint Advisors, Teak worked at SagePoint as a Senior Associate advising technology companies on mergers, acquisitions and strategic capital raises. Prior to joining SagePoint, Teak worked as a Senior Associate with Enterprise Partners Venture Capital, the largest Southern California based VC firm, where he evaluated investment opportunities and worked closely with senior management and board members to successfully grow portfolio companies. Prior to Enterprise Partners, Teak worked as an Associate in technology investment banking at Montgomery & Co. where he spent three years working closely with SagePoint's founder David Michaels on buy-side and sell-side M&A transactions. Prior to Montgomery, Teak worked at Cowen & Co. advising technology companies on M&A and IPO transactions. Teak's experience working on fund raising, mergers and acquisitions, and initial public offerings as both an advisor and investor provides unique insight into the needs of venture-backed companies. Teak graduated from the University of Southern California with honors, receiving a B.S. in Business Administration/Finance.
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 60 Investment Banking Advisors 60 Capstone Partners TechnologyInvestment Banking Advisors & Telecom Team
BRANDON OVERMYER Associate, Technology & Telecom Group Phone: (310) 929-5177 Email: [email protected] Brandon is an Associate in the Technology & Telecom Group, working closely with clients to execute and optimize mergers, acquisitions and strategic capital raises. Prior to joining Capstone, Brandon was an Analyst in technology investment banking with ArchPoint Partners in San Francisco, supporting the senior team on middle market domestic and cross-border technology transactions. Brandon has previously worked in varying roles with Apple, LG and a number of startup ventures in addition to civil litigation practice. Brandon received his BA from University of Florida, graduating with distinction in three years. He received his JD from Baylor University School of Law and is a member of the Florida Bar.
HIROKI HIGASHIHARA Analyst, Technology & Telecom Group Phone: (310) 929-7415 Email: [email protected] Hiroki works closely with senior team members of the Technology & Telecom Group, as an Analyst, to execute various corporate financing transactions. Prior to joining Capstone, Hiroki interned at an investment management firm, Sage Capital Advisors, conducting back-testing models and investment performance analyses. He also interned at an Internet Security software company, gaining exposure to corporate financial planning and analysis. Hiroki received a BS in Management Science along with a minor in Accounting from University of California, San Diego. Hiroki graduated as a team member of the Thurgood Marshall Honors Program.
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