Selected HW&Co. TMT Transactions
Total Page:16
File Type:pdf, Size:1020Kb
Technology, Media & Telecom Update June 2013 Contents What We’ve Been Reading………………… 2 Highlighted M&A Transactions…………… 3 • Mobile Makes Up 15% Of All Internet Traffic • IBM To Acquire SoftLayer Technologies • Dell Special Committee Investor Presentation • Yahoo! To Acquire Tumblr • Video To Dominate Mobile Data Traffic • Dassault Systems Acquires Apriso • Security Software Market Grew 7.9 % In 2012 • McAfee To Acquire Stonesoft • EMR And HIE See Big Adoption Numbers • Healthland Acquires American HealthTech U.S. TMT M&A Overview………………………………………………………………………………………. 4 U.S. TMT Initial Public Offerings……………………………………………………………………………….. 5 TMT Public Market Overview…………………………………………………………………………………… 6 Public Market Trading Statistics by Vertical Bellwethers………………………………………………………………………………………………. 7 Data and Information Services…………………………………………………………………………... 7 Internet and Digital Media……………………………………………………………………………….. 8 IT and Tech-Enabled Services…………………………………………………………………………… 9 Software – Application…………………………………………………………………………………. 10 Software – Infrastructure……………………………………………………………………………….. 11 Software as a Service (“SaaS”) ………………………………………………………………………… 12 Selected HW&Co. TMT Transactions………………………………………………………………………….. 13 Group Harris Williams & Co.’s Technology, Media & Telecom (TMT) Group is dedicated to providing superior merger & Overview acquisition and capital markets advisory services to market leading companies through dedicated TMT professionals. Below is a list of our senior TMT contacts. Boston San Francisco London +1 (617) 482-7501 +1 (415) 217-3411 +44 20 7518 8901 Jeff Bistrong Mike Wilkins Thierry Monjauze Garin Arevian Eric Reimers Red Norrie Sam Hendler Laura Boyd Francois Morin Derek Swaim Tyler Dewing Group • Application Software • Infrastructure Software Focus Software • Data and Informatics • IT and Tech-Enabled Services • eCommerce • Online Advertising and Marketing Internet & Digital Services • Education Technology Media • Public Sector Software • Energy Technology Infrastructure • Telecom, Data Center, and • Financial Technology Networking Solutions Solutions • Healthcare IT Note: All market data in the following materials is as of May 31, 2013. For more information, please visit http://www.harriswilliams.com/industries/tmt What We’ve Been Reading Mobile Makes Up 15% Of All Internet Traffic Techcrunch 5/29/2013 Mary Meeker unveiled her annual Internet Trends report for 2013 highlighting robust growth in the number of broadband and mobile users. The Kleiner Perkins partner estimates that there were more than 2.4 billion Internet users worldwide at the end of 2012, up 8% from 2011. Furthermore, the report expounded on the growth of smartphones, with a 30% increase in subscribers to 1.5 billion in 2012, which is driving the continued growth in mobile Internet usage that comprised approximately 15% of all Internet traffic in 2012. Read the full article here. Dell Special Committee Investor Presentation SEC.gov 6/5/2013 Dell’s Board of Directors recently met with its independent Special Committee to consider the Company’s buyout from Silver Lake and Michael Dell, and a counter offer from Carl Icahn. The referenced investor presentation provides interesting insights into the personal computer marketplace as well as the issues Dell faces in the short- term including modest revenue contributions from acquisitions in spite of $13 billion in spend, 1% market share in software and services, a weak position in the cloud and SaaS markets, and deteriorating PC market conditions. Read the investor presentation here. Video To Dominate Mobile Data Traffic In Four Years Techcrunch 6/3/2013 Ericsson published its latest mobility report, which projects that global smartphone subscriptions will rise from 1.2 billion in 2012 to 4.5 billion by the end of 2018, a CAGR of 25%. Ericsson’s data shows that video makes up the largest segment of mobile data traffic today, and is expected to grow by approximately 60% annually until the end of 2018, when it’s forecasted to account for about half of total global traffic. The data also shows the increasing popularity of music streaming, with a projected annual growth rate of approximately 50%. Read the full article here. Worldwide Security Software Market Grew 7.9 % In 2012 Gartner via PR Wire 5/30/2013 According to Gartner, the global security software market reached $19.2 billion in 2012, up 7.9% from 2011. The top five vendors accounted for approximately 47% of the market in 2012 with growth driven by a continuation of demand for consumer and enterprise security tools as well as the evolution of new threats and working practices such as the growth of remote access and the rapid adoption of virtual environments. Furthermore, the rise of security as a top priority in the SMB space presents a new challenge for all market participants as SMB requirements vastly differ from those of the enterprise. SMB’s are increasingly considering security-as-a-service for deploying security technologies such as email and Web security. Gartner believes this will result in market consolidation and more competitive pricing as enterprise providers look to acquire cloud-based solutions. Read the full article here. EMR And HIE See Big Adoption Numbers Healthcare IT News 5/9/2013 According to a recent poll of 3,700 physicians conducted by Accenture "The digital doctor is in – and is here to stay." Results of the poll found approximately 93% of U.S. physicians are now using EMRs and 45% routinely access clinical data from outside their own organization. The vast majority of those surveyed believe that the use of EMR and HIE have had a positive impact on their practice through the reduction in medical errors and the improvement in the quality of data for research. Accenture believes this trend supports a patient-centered approach to care and reinforces the progress being made to meet meaningful use requirements as well as adjustments to reforms created via the Affordable Care Act. Read the full article here. 2 Highlighted Recent TMT M&A Transactions IBM To Acquire SoftLayer Technologies 6/4/2013 • SoftLayer Technologies is one of the world’s largest privately-held cloud computing infrastructure providers. Ent. Value: $2,000 M • The acquisition strengthens IBM’s cloud computing capabilities and will help the Revenue Multiple: 6.0x EBITDA Multiple: NA Company compete with Amazon’s Web Services. • IBM plans to add SoftLayer to its SmartCloud business unit to create a new Cloud Services division. Yahoo! To Acquire Tumblr 5/20/2013 • Tumblr, Inc. operates an online platform that enables users to post text, photos, quotes, links, music, and videos from their browser, phone, desktop, or email client. Ent. Value: $1,100.0 M Revenue Multiple: NA • Yahoo! believes the acquisition will provide access to younger users (i.e., 18-24 age EBITDA Multiple: NA bracket), who are heavily engaged online. • Yahoo! expects to expand its audience by 50%, to more than a billion monthly visitors, and to grow traffic by approximately 20%. Dassault Systems Acquires Apriso 5/29/2013 • Apriso Corporation provides manufacturing software solutions for operations management. The Company’s solutions synchronize global manufacturing networks, Ent. Value: $205.0 M offering real-time visibility and control over the business processes performed by Revenue Multiple: NA plants and suppliers. EBITDA Multiple: NA • Dassault plans to integrate Apriso into its DELMIA application portfolio and its 3DEXPERIENCE platform. McAfee To Acquire Stonesoft 5/6/2013 • Stonesoft provides software-based cyber security solutions to secure information flow and simplify security management. Ent. Value: $376 M Revenue Multiple: 7.0x • The take-private acquisition demonstrates the increasing importance of security EBITDA Multiple: NM products that protect today’s complex IT systems, in which increasing amounts of data are stored in cloud environments, off-premises, and on mobile devices, amidst a constantly evolving threat landscape. Healthland Acquires American HealthTech 5/21/2013 • American HealthTech, Inc. provides clinical management, resident accounting, financial accounting, and enterprise management software suites for skilled nursing Ent. Value: NA facilities, caregivers, partners, and healthcare networks. Revenue Multiple: NA • Healthland, a portfolio company of Francisco Partners, and American HealthTech EBITDA Multiple: NA will combine their product offerings into continuum-of-care solutions that will span hospitals, clinics, and post-acute facilities. • The combined company will provide a shared health record that follows the patient across the entire care continuum, including preventive, outpatient, inpatient, post- acute, and in-home care. 3 U.S. TMT M&A Overview Summary LTM M&A Volume and Revenue Multiples LTM M&A Volume by Segment M&A Data and Statistics 800 3.8 x 4.0 x Software – Information SaaS Services 3.4 x 3.4 x Software – 7% 5% 700 3.5 x Infrastructure 9% 600 3.0 x Revenue Multiple LTM 2.4 x 500 2.5 x 1.9 x 1.9 x Internet and 400 2.0 x Digital Media 37% 300 1.5 x Transaction Volume Transaction 200 1.0 x Software – Application 100 0.5 x 29% 0 0.0 x IT and Tech- Data and Internet and IT and Tech- Software – Software – Software – Enabled Information Digital Media Enabled Services Application Infrastructure SaaS Services Services 16% M&A Transaction Volume Median LTM Revenue Multiple Note: Includes announced or closed transactions over the last twelve months. Last Three Years M&A Transaction Volume 900 826 827 800 700 638 657 600 500 400 350 348 Transaction