Technology, Software and Information & Business Services
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2H12 M&A and Investments Review DEAL Technology, Software and NotES Information & Business Services 2012 Review of M&A and Investment Activity in the Technology, Overview 1 Software and Information & Business Services Industries: Segment Analysis 2,783 Transactions Totaling a Reported Technology 5 Marketing Technology 6 $101 Billion; Volume Up 15 Percent in 2012; Software 7 Communications 8 28 +$1 Billion Transactions During the Year Information & Business Services 9 Information & Business Services was the Most Active Segment Recent Transactions 10 in 2012 with 803 Transactions Announced About Petsky Prunier 11 Software was the Highest Value Segment in 2012 with $40.6 Billion in Reported Deal Value During 2012, Petsky Prunier tracked 2,783 M&A and investment transactions for a total of $101 billion across five broad segments: Technology, Marketing Technology, Software, Communications and Information & Business Services. Information & Business Services was the most active segment with 803 transactions announced, of which 644 reported $27.8 billion in total deal value. The highest value segment was Software with 772 deals announced, of which 494 reported $40.6 billion in aggregate deal value. There were 28 +$1 billion transactions during the year, 12 of which were announced in the Software segment, while 10 were announced in the Information & Business Services segment. [continued on page 2] Technology, Software and Information & Business Services Industries Technology, Software and Information & Business Services Industries 4Q11–4Q12 M&A and Investment Activity 2012 M&A and Investment Activity ($ in Billions) ($ in Millions) Securities offered through Petsky Prunier Securities, LLC 1 Deal Notes Second Half 2012 M&A Activity There were 1,650 mergers and acquisitions announced in 2012, of which One Equity Partners’ $1.1 billion acquisition of M*Modal, a clinical 1,008 reported $86.7 billion in aggregate deal value. M&A activity was flat documentation solutions provider, including clinical narrative capture while value fell 23 percent compared to 2011 – the year in which Autonomy and clinical documentation workflow solutions, at 2.4x revenue and was acquired by Hewlett-Packard for $10.3 billion, Motorola Mobility was 9.2x EBITDA bought by Google for $9 billion and Microsoft acquired Skype for $8.5 billion. Information & Business Services was the most active segment in Marketing Technology was the third-most active M&A segment 2012, accounting for 42 percent and 29 percent of total M&A activity and with 293 transactions announced, of which 82 reported $7.2 billion reported value, respectively. The segment was lead by the IT Consulting/ in aggregate deal value. Activity in the segment during 2012 was driven System Integration subsegment, with 513 transactions announced, of which by heightened competition among technology and software companies 476 deals reported $7.9 billion in aggregate value. The next most active that are building diversified analytics, production and workflow subsegments were Corporate Training, with 44 transactions announced, management stacks. Transactions announced during the second half of which 37 reported $157 million in aggregate deal value, and Market of the year included: Research, with 35 transactions announced, of which eight reported $2.9 billion in aggregate deal value. M&A deals in the Information & Business Oracle’s planned purchase of newly-public Eloqua, which provides Services segment during the second half of the year included: SaaS-based B-to-B marketing automation solutions focused on demand generation and lead management, for $810 million, Experian’s $1.5 billion acquisition of Serasa, a Brazil-based financial valuing the company at $871 million net of cash, or 9.7x revenue information and analysis company, at 5.8x revenue and 16.2x EBIT Sony’s $775 million acquisition of So-net Entertainment, a Japan- Vitalize Consulting Solutions’ $493 million acquisition of MaxIT based Internet service provider, at a valuation of 1.6x revenue and Healthcare Holdings, an IT and professional consulting company 10.6x EBITDA providing clinical IT implementation services to healthcare providers Cisco Systems’ acquisition of ThinkSmart Technologies, an Ireland- DigitalGlobe’s $453 million acquisition of GeoEye, a provider of based software company that delivers location data analysis using geospatial information and insight for decision makers and analysts, Wi-Fi technology at a valuation of 1.3x revenue and 2.6x EBITDA There were 54 and 212 acquisitions announced in the Technology and The highest value M&A segment in 2012 was Software with 392 Communications segments, respectively. The Technology segment transactions announced, of which 151 reported $36.2 billion in was lead by Cloud Computing Technology, Big Data Technology and aggregate deal value. The Healthcare Software subsegment accounted Financial Technology, each with 10 acquisitions announced. The most for 18 percent of aggregate M&A deal value in the segment, followed active and highest value Communications segment was Networking by ERP Software and Financial Software, with 19 percent and 11 percent Equipment with 91 acquisitions announced, of which 88 reported of the segment’s reported value, respectively. Transactions in the Software $5.8 billion in aggregate deal value. Transactions in the Technology and segment during the second half of the year included: Communications segments during the second half of the year included: Dell’s $2.4 billion acquisition of IT management solutions provider VMware’s $1.3 billion acquisition of Nicira, a provider of network Quest Software, which offers critical components that will be used virtualization solutions for cloud data centers, which reported to expand and enhance Dell’s systems management, security, business $10 million in annual revenues intelligence and application capabilities. Following the purchase, Quest Cisco’s $1.2 billion acquisition of Meraki, a provider of cloud- Software was valued at $2.2 billion, or 2.5x revenue and 14.0x EBITDA managed products, including LAN, Ethernet switches, security IBM’s $1.2 billion acquisition of Kenexa, a provider of on-demand appliances and mobile device management, to head up its new human resources software, valuing the company at 3.8x revenue and Cloud Networking group 45.0x EBITDA 2012 Most Active Strategic Buyers by Number of Transactions Number of Buyer Transactions Representative Targets Oracle 11 ClearTrial, Collective Intellect, DataRaker, Eloqua, Instantis, SelectMinds, Taleo, Vitrue IBM 10 Butterfly Software, Green Hat Software, Kenexa, Red Bend Software, StoredIQ, Vivisimo Google 8 Incentive Targeting, Meebo.com, Quickoffice, Sparrow, TxVia, Viewdle, VirusTotal Cisco Systems 7 BroadHop, Cariden Technologies, ClearAccess, Cloupia, Meraki, ThinkSmart Technologies Thomson Reuters 6 Apsmart, Avanon, FX Alliance, Logiciel Dr Tax Software, MarkMonitor, RedEgg Solutions Dell 6 Credant Technologies, Kitenga, Make Technologies, Quest Software, Wyse Technology Salesforce.com 6 BlueTail, Brighter Option, Buddy Media, ChoicePoass, GoInstant, Thinkfuse WPP Group 6 Cadem Advertising, CIC, First Movies International, Oasis Insights, Predictys, Press Index Konica Minolta 6 Covisia Solutions, Netnowledge, PC Solutions, Service Assurnace, WaveTwo Microsoft 5 Marketing Pilot Software, Perceptive Pixel, PhoneFactor, StorSimple, Yammer VMware 5 Cetas Software, DynamicOps, Log Insight, Nicira, Wanova 2 Deal Notes Second Half 2012 Investment Activity Buyer & Investor Activity There were 1,133 investments announced in 2012, of which 1,020 Strategic buyers announced 1,504 deals, of which 912 reported $66.7 reported $14.3 billion in aggregate deal value in 2012. Marketing billion in aggregate deal value. Information & Business Services was the Technology was the most active investment segment, with 464 deals most active segment among strategics, with 633 acquisitions announced announced, of which 419 were reported for $4.1 billion in aggregate in 2012, while Software was the highest value segment with $29 billion deal value. Volume in the segment increased 19 percent from 2011. in reported deal value. The most active buyers across these two leading Content Management was the most active subsegment in 2012 with segments were Oracle, Kronos and Trimble Navigation with six, four 89 investments announced, of which 81 reported $850 million in total and four acquisitions announced during the year. deal value. Investments in the CRM subsegment increased 88 percent from 2011, while reported value rose 255 percent to $159 million. Buyout firms announced 146 acquisitions in 2012, of which 96 reported Investments in the segment during the second half of the year included: $19.2 billion in aggregate deal value. A combined total of 110 of those transactions were in the Information & Business Services and Software The $85 million investment in Evernote, which operates a personal segments, accounting for 75 percent of total reported buyout volume data and productivity management application for the web and and nearly 80 percent of reported value. Buyout transactions announced mobile devices, from m8 Capital, Valiant Capital and T. Rowe Price, in the second half of the year included: at a $2 billion valuation The $60 million Redpoint Ventures-led investment in Zendesk, The Blackstone Group’s $2 billion buyout of Vivint, a provider a customer services company offering web-based SaaS-delivered help of home automation systems, at 5.5x revenue desk/support Hellman & Friedman’s $1.5 billion