Tech M&A Monthly
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Tech M&A Monthly 1 TECH M&A MONTHLY ….starts in 2 minutes 2 www.corumgroup.com 3 Past Attendees Include: 4 Past Conferences & Reports . Private Equity Panel . 10 Key Terms in an M&A Contract . Google Acquisition Strategy . Deal Structures Today . Disruptive Tech Trend Reports: IoT Software, Majority Mobilization, Sports & Gaming, etc. Special Reports: Patents, New Buyers, M&A Process, Increasing Deal Value… 5 TECH M&A MONTHLY ….starts in 1 minute 6 Merge Briefing . 90 Minutes . Industry Update . Overview of the M&A Process . Upcoming events in: . Nashville . Barcelona . Cincinnati . Dublin . East Brunswick . Berlin . Wilmington . Paris 7 Selling Up, Selling Out . Half-Day . Tech M&A Bootcamp . The most attended tech executive conference in history . Upcoming events in: . Atlanta . Salt Lake City . Denver . Phoenix . Berlin 8 8 Stages for an Optimal Outcome 1 Due Preparation Research Contact Discovery Negotiation Closing Integration Diligence 9 Typical Negotiation Flow Seller Buyer Seller Discovery presents delivers an delivers process is valuation opening counter complete guidance offer offer 10 AVOIDING THE DEAL DISASTERS 11 Upcoming Conference Schedule Selling Up Selling Out (SUSO) - Ready to go to market? During this half-day workshop, learn to prepare, position, research, value, negotiate, and execute due diligence for maximum price and structure. This is the most attended Tech M&A event ever – participants have done over $1 trillion in transaction value. Merge Briefing (MB) - The Merge Briefing is a 90-minute executive briefing providing a current M&A market update (trends, valuations, etc.), as well as a brief overview of the Tech M&A process: “8 Steps To An Optimal Outcome.” Sep. 14: Atlanta –SUSO Sep. 27: Denver –SUSO Sep. 15: Nashville –MB Sep. 28: Phoenix –SUSO Sep 16.: Cincinnati –MB Sep. 29: Berlin –SUSO Sep. 20: Salt Lake City –SUSO Oct. 4: Detroit –SUSO Sep. 21: East Brunswick –MB Oct. 13: Munich –SUSO Sep. 22: Wilmington –MB Oct. 18: Dublin –MB Sep. 27: Barcelona –MB Oct. 19: Stockholm –SUSO www.CorumGroup.com/Events 12 Logistics . Ask questions any time . Use Q&A tab on bottom of screen . Click “Refresh Now” to view responses . This event is being recorded . European broadcast September 9, 1 PM Berlin Time . On demand webcast will be available at www.corumgroup.com 13 Tech M&A Monthly 12 Steps to a Successful Valuation September 8, 2016 14 Welcome Bruce Milne CEO Corum Group Ltd. A leader in the software industry, Bruce has founded or owned four software companies, including the largest vertical market software company, AMI, an Inc. 500 firm rated by IDC as the fastest growing computer-related company in the world. He has served on advisory boards for Microsoft, IBM, DEC, Comdex and Apple, and as board member/founding investor in some of the most innovative firms in their field, including Blue Coat, Bright Star and Sabaki. Past advisor to two governors and a senator, a board member of the Washington Technology Center, and founder of the WTIA, the nation’s most active regional technology trade association. He worked with the Canadian government to found SoftWorld, and he was recently chosen as one of the 200 most influential individuals in the IT community in Europe. He was also the only American juror for the recent Tornado 100 Awards given to Europe’s top technology firms A graduate with Distinction from Harvard Business School, Bruce has written three books on business models for success, including Power Planning. He is a frequent lecturer and author. 15 Agenda .Welcome .Non-Tech Buyers .September 2016 Research Report .12 Steps to a Successful Valuation .Q&A 16 “…increased activity from non-tech buyers” -- 451 Group 17 Corum Research Report Elon Gasper Yasmin Khodamoradi Vice President, Analyst Director of Research 18 Public Markets 35% Weekly Percentage Change 30% NASDAQ S&P TECH Dow Jones 25% 20% 15% 10% 5% 0% 19 The Bull Market, 2009-Present Last 12 months 350% Daily Percentage Change 300% NASDAQ S&P TECH Dow Jones 250% 200% 150% 100% 50% 0% 20 Macro view: 4 Longest* Bull Market Runs Start End Years Dotcom Bubble Oct. 11, 1990 Mar. 24, 2000 9.5 Current Mar. 9, 2009 ? 7.5 Postwar Boom Jun. 13, 1949 Aug. 2, 1956 7.1 That 70s Inflation Oct. 3, 1974 Nov. 28, 1980 6.2 *Since the Great Depression. Source: S&P Capital IQ, The Associated Press 21 Corum Index Aug. 2015 Aug. 2016 Transactions 321 292 9% Market Mega Deals 4 9 125% Largest Deal $8.0B $4.3B 46% Aug. 2015 Aug. 2016 Private Equity Deals 13 29 123% Pipeline VC Backed Exits 47 54 15% Aug. 2015 Aug. 2016 Cross Border 27% Transactions 30% 38% Attributes Start-Up 27%0% Acquisitions 15% 11% Average Life of Target 13 yrs 16 yrs 23% 22 Mega Deals - 2016 YTD $1.1B $1.0B $1.0B $1.2B $1.0B $1.1B $1.3B $1.0B $1.4B $1.4B $1.1B $1.5B $1.0B $1.5B $1.2B $1.6B $1.1B $1.8B $1.5B $1.7B $1.7B $1.3B $2.0B $1.5B $2.2B $2.1B $1.4B $2.2B $1.5B $3.1B $2.4B $2.5B $3.3B $3.1B $2.0B $4.3B $2.6B $2.8B Intellectual $3.5B $3.9B Property Solutions $3.0B $2.7B $5.0B $2.7B $4.8B $4.6B $4.4B $6.0B $5.9B $3.3B $7.0B $8.8B IT Services division Non-Core Software Assets $8.5B $6.0B $6.9B $9.3B $26.2B $32.4B CONSUMER IT SERVICES VERTICAL HORIZONTAL INTERNET INFRASTRUCTURE $19B $27B $29B $31B $49B $65B 23 Mega Deals - 2016 YTD $1.1B $1.0B $1.0B $1.2B $1.0B $1.1B $1.3B $1.0B $1.4B $1.4B $1.1B Target: Rackspace US [USA] $1.5B $1.0B $1.5B Acquirer: Apollo Global Management [USA] $1.2B $1.6B Transaction Value: $4.3B (2.1x EV/Sales and 6.4x EBITDA) $1.1B $1.8B $1.5B $1.7B $1.7B $1.3B $2.0B $1.5B $2.2B $2.1B $1.4B $2.2B $1.5B $3.1B $2.4B $2.5B $3.3B $3.1B $2.0B $4.3B $2.6B $2.8B Intellectual $3.5B $3.9B Property Solutions $3.0B $2.7B $5.0B $2.7B $4.8B $4.6B $4.4B $6.0B $5.9B $3.3B $7.0B $8.8B IT Services division Non-Core Software Assets $8.5B $6.0B $6.9B $9.3B $26.2B $32.4B CONSUMER IT SERVICES VERTICAL HORIZONTAL INTERNET INFRASTRUCTURE $19B $27B $29B $31B $49B $65B 24 Mega Deals - 2016 YTD $1.1B $1.0B $1.0B $1.2B $1.0B $1.1B $1.3B $1.0B $1.4B $1.4B Target: Merkle [USA] $1.1B $1.5B $1.0B $1.5B Acquirer: Dentsu Aegis Network [United Kingdom] Transaction Value: $1.5B (reported) $1.2B $1.6B $1.1B $1.8B $1.5B $1.7B $1.7B $1.3B $2.0B $1.5B $2.2B $2.1B $1.4B $2.2B $1.5B $3.1B $2.4B $2.5B $3.3B $3.1B $2.0B $4.3B $2.6B $2.8B Intellectual $3.5B $3.9B Property Solutions $3.0B $2.7B $5.0B $2.7B $4.8B $4.6B $4.4B $6.0B $5.9B $3.3B $7.0B $8.8B IT Services division Non-Core Software Assets $8.5B $6.0B $6.9B $9.3B $26.2B $32.4B CONSUMER IT SERVICES VERTICAL HORIZONTAL INTERNET INFRASTRUCTURE $19B $27B $29B $31B $49B $65B 25 Mega Deals - 2016 YTD $1.1B $1.0B $1.0B $1.2B $1.0B $1.1B $1.3B $1.0B $1.4B Target: LanguageLine Solutions [USA] $1.4B Acquirer: Teleperformance [France] $1.1B $1.5B Transaction Value: $1.5B $1.0B $1.5B $1.2B $1.6B $1.1B $1.8B $1.5B $1.7B $1.7B $1.3B $2.0B $1.5B $2.2B $2.1B $1.4B $2.2B $1.5B $3.1B $2.4B $2.5B $3.3B $3.1B $2.0B $4.3B $2.6B $2.8B Intellectual $3.5B $3.9B Property Solutions $3.0B $2.7B $5.0B $2.7B $4.8B $4.6B $4.4B $6.0B $5.9B $3.3B $7.0B $8.8B IT Services division Non-Core Software Assets $8.5B $6.0B $6.9B $9.3B $26.2B $32.4B CONSUMER IT SERVICES VERTICAL HORIZONTAL INTERNET INFRASTRUCTURE $19B $27B $29B $31B $49B $65B 26 Mega Deals - 2016 YTD $1.1B $1.0B $1.0B $1.2B $1.0B $1.1B $1.3B $1.0B $1.4B Target: Sensus [USA] $1.4B Acquirer: Xylem [USA] $1.1B $1.5B Transaction Value: $1.7B (2.0x EV/Sales and 8.9x EBITDA) $1.0B $1.5B $1.2B $1.6B $1.1B $1.8B $1.5B $1.7B $1.7B $1.3B $2.0B $1.5B $2.2B $2.1B $1.4B $2.2B $1.5B $3.1B $2.4B $2.5B $3.3B $3.1B $2.0B $4.3B $2.6B $2.8B Intellectual $3.5B $3.9B Property Solutions $3.0B $2.7B $5.0B $2.7B $4.8B $4.6B $4.4B $6.0B $5.9B $3.3B $7.0B $8.8B IT Services division Non-Core Software Assets $8.5B $6.0B $6.9B $9.3B $26.2B $32.4B CONSUMER IT SERVICES VERTICAL HORIZONTAL INTERNET INFRASTRUCTURE $19B $27B $29B $31B $49B $65B 27 Mega Deals - 2016 YTD $1.1B $1.0B $1.0B $1.2B $1.0B $1.1B $1.3B $1.0B $1.4B $1.4B $1.1B $1.5B $1.0B $1.5B $1.2B $1.6B $1.1B $1.8B Target: Intel Security (former McAfee) [USA] $1.5B $1.7B $1.7B $1.3B Acquirer: TPG Capital [USA] $2.0B Transaction Value: $3.1B $1.5B $2.2B $2.1B $1.4B $2.2B $1.5B $3.1B $2.4B $2.5B $3.3B $3.1B $2.0B $4.3B $2.6B $2.8B Intellectual $3.5B $3.9B Property Solutions $3.0B $2.7B $5.0B $2.7B $4.8B $4.6B $4.4B $6.0B $5.9B $3.3B $7.0B $8.8B IT Services division Non-Core Software Assets $8.5B $6.0B $6.9B $9.3B $26.2B $32.4B CONSUMER IT SERVICES VERTICAL HORIZONTAL INTERNET INFRASTRUCTURE $19B $27B $29B $31B $49B $65B 28 Mega Deals - 2016 YTD $1.1B $1.0B $1.0B $1.2B $1.0B $1.1B $1.3B $1.0B $1.4B $1.4B $1.1B $1.5B $1.0B $1.5B $1.2B $1.6B $1.1B $1.8B $1.5B $1.7B $1.7B $1.3B $2.0B Sold to $1.5B $2.2BNon-Core Software Assets$2.1B $1.4B $2.2B $1.5B $3.1B $2.4B $2.5B $3.3B $3.1B Target: HPE Non-Core Software Assets [USA] Acquirer: Micro Focus International [UK] $2.0B $4.3B $2.6B $2.8B Intellectual $3.5B $3.9B Transaction Value: $8.8B (estimated)Property Solutions $3.0B $2.7B $5.0B $2.7B $4.8B $4.6B $4.4B $6.0B $5.9B $3.3B $7.0B $8.8B IT Services division Non-Core Software Assets $8.5B $6.0B $6.9B $9.3B $26.2B $32.4B CONSUMER IT SERVICES VERTICAL HORIZONTAL INTERNET INFRASTRUCTURE $19B $27B $29B $31B $49B $65B 29 Horizontal Application Software Market Public Valuation Multiples Since Q2Aug.