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SaaS & Cloud M&A and Valuation Update
Q2 2014
BOSTON CHICAGO LONDON LOS ANGELES PHILADELPHIA SAN DIEGO SILICON VALLEY TAMPA
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 1 Investment Banking Advisors WORLD CLASS WALL STREET EXPERTISE.1 BUILT FOR THE MIDDLE MARKET.TM Capstone Partners TableInvestment Bankingof Contents Advisors
Section Page Introduction Research Coverage: SaaS & Cloud 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 for LTM 15 Notable M&A Transactions 16 Most Active Buyers 17-18 Public Company Valuation & Operating Metrics SaaS & Cloud 130 Public Company Universe 20-21 Recent IPOs 22-31 Stock Price Performance 32 LTM Revenue, EBITDA & P/E Multiples 33-35 Revenue, EBITDA and EPS Growth 36-38 Margin Analysis 39-40 Best / Worst Performers 41-42 Notable Transaction Profiles 44-53 Public Company Trading & Operating Metrics 55-60 Technology & Telecom Team 62-64
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 2 Investment Banking Advisors 2 Capstone Partners Investment Banking AdvisorsCapstone Partners Investment Banking Advisors
Observations and Introduction Recommendations
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 3 Investment Banking Advisors WORLD CLASS WALL STREET EXPERTISE.3 BUILT FOR THE MIDDLE MARKET.TM Capstone Partners ResearchInvestment Banking Coverage: Advisors SaaS & Cloud
Capstone’s Technology & Telecom Group focuses its research efforts on the following market segments:
Enterprise SaaS & Mobile & Wireless Consumer Internet Cloud
Analytics / Business Intelligence Cloud & IT Infrastructure Cloud Computing / Storage Communication & Collaboration Content Creation & Management Content Delivery Services E-Commerce Consumer, IT & CRM & Customer Service Telecom Hardware ERP, Supply Chain & Commerce Finance & Administration Human Resources Licensed Software Leaders Marketing & Advertising Vertical Markets
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 4 Investment Banking Advisors 4 Capstone Partners KeyInvestment Takeaways Banking Advisors – M&A Activity & Multiples
LTM M&A Dollar Volume retreats to 2010 levels at $38.7B Private dollar volume continued to increase while public company M&A slowed LTM transaction volume increased to 787 deals resulting in a new five year high Q2 saw 233 deals, a significant increase from Q1’s 179 deals Vertical Market solutions constitute roughly one third all transactions with over 200 deals per year since 2011 The Median LTM Revenue Multiple paid for private company targets fell to 3.3x in LTM, retreating to 2011 levels Hot companies and sectors can see double digit revenue multiple exits but those are the exception with most companies being acquired at more modest multiples The Median LTM Revenue Multiple paid for public company targets above $100M remained consistent at 3.2x Fewer low multiple sub $100M deals boosted the overall LTM revenue multiple to match $100M+ LTM revenue multiple Notable M&A transactions in Q2 Priceline.com / OpenTable ($2.6B) WEX / Evolution1 ($533M) Amobee / Adconion ($229M) IVP / iParadigms ($752M) GTCR / Vocus ($481M) Xerox / ISG Holdings ($225M)
Nest / Dropcam ($555M) Acxiom / LiveRamp ($310M)
Summit Partners / Ability Networks ($550M) Telkom / Business Connexion ($293M) The most active buyers include Oracle, Google, Vista Equity Partners, IBM, SAP, Cisco, Genesys, Autodesk, Intuit, Microsoft and Yahoo! Capstone expects the robust M&A activity and attractive exit valuations to continue in SaaS & Cloud There is some risk that a market correction could negatively impact activity levels and valuation multiples
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
Q2’14 saw 10 SaaS & Cloud IPOs added to the SaaS & Cloud 130 Universe Majority of the public offerings performed well, opening well above offer prices with strong early momentum Median performance for the SaaS & Cloud 130 was slightly negative in Q2’14 SaaS & Cloud 130 posted a 2.7% decline in Q2 while the NASDAQ posted a 5% gain Median LTM Revenue Multiple weakened to 5.0x, but still represents a healthy multiple Medians range from 7.7x for ERP, Supply Chain & Commerce to a low of 1.9x for Content Delivery Services Median LTM EBITDA multiple stands at 18.0x Four of the thirteen segments are trading at medians above 30x LTM EBITDA Median P/E multiples continue to rebound and now stand at a five year high of 29.2x for LTM Eight segments trade between the range of 30-50x earnings SaaS & Cloud 130 posted median revenue growth of 19.4% in LTM with 20.3% growth expected for NTM The continued increase in revenue growth can be attributed to several companies going public in Q2 LTM Median EBITDA growth of 6.8% is down from 10.6% in 2013 but is expected to increase to 12.2% in NTM More than half of the segments are expected to achieve greater than 10% EBITDA growth for NTM Median gross margins have stayed relatively constant at 68.0% Content Creation & Management and Cloud & IT Infrastructure top the list at over 80% as newly emerging technologies that enable the cloud to run more efficiently command strong margins Median EBITDA margin dropped slightly to 15.4% as companies reinvest to fuel growth
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 6 Investment Banking Advisors 6 Capstone Partners Investment Banking AdvisorsCapstone Partners Investment Banking Advisors
M&AObservations Activity & and MultiplesRecommendations
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
LTM M&A Dollar Volume retreats to 2010 levels at $38.7B Private dollar volume continued to increase while public company M&A slowed In the public sector, Q2’14 had only one $1B+ deal, while Q2’13 had four $1B+ deals Difference in Q2’14 vs Q2’13 public dollar volume was $12.1B due to the BMC Software deal ($8.4B) and Lender Processing Services deal ($3.9B) both in Q2’13
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
LTM transaction volume of 787 deals results in a new five year high Q2 saw 233 deals, a significant increase from Q1’s 179 deals Vertical Market solutions constitute roughly one third all transactions with over 200 deals per year since 2011
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 remains healthy with deal mix shifting towards the higher end in recent periods LTM median deal value at $31M sets a new five year high
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 transaction volume dropped to a new five year low while median deal value rebounded slightly from 2013 Q2’13 saw four $1B+ deals, two of which aggregated to a total deal size of $12.1B; which explains the sharp drop in dollar volume
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 11 Investment Banking Advisors 11 Capstone Partners MedianInvestment Banking LTM Advisors Revenue Multiples – Private Targets
Median LTM Revenue Multiple paid for private company targets fell to 3.3x Hot companies and sectors can see double digit revenue multiple exits but those are the exception with most companies being acquired at more modest multiples
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 12 Investment Banking Advisors 12 Capstone Partners MedianInvestment Banking LTM Advisors Revenue Multiples – Public Targets
The Median LTM Revenue Multiple paid for public company targets above $100M remained consistent at 3.2x Fewer low multiple sub $100M deals boosted the overall LTM revenue multiple to 3.2x With less than 30 public company target data points in a given year, the median multiple shows volatility, making it difficult to draw reliable conclusions on M&A valuation trends based on the data
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 13 Investment Banking Advisors 13 Capstone Partners MedianInvestment Banking LTM Advisors Revenue Multiples by Segment – 2009 to Current
Median Revenue Multiples for SaaS segments vary from 2.3x to 4.6x Analytics/Business Intelligence and Finance & Administration targets achieved median multiples of 4.0x or more as these companies are often acquired earlier in their revenue curve at strong multiples Cloud Computing/Storage and Vertical Market Software multiples lag as many acquisition targets have been unable to create highly differentiated products that command premium valuations
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 Ann. Enterprise Buyer Target Segment Target Description Revenue on $ to 1 Mo Date Value Multiple Invested Prior
Cloud & IT 8/15/13 Provides financial anti-fraud software and SaaS to businesses globally $900M 25.7x 90.0x NA Infrastructure
Cloud Provides cloud hosting, platform as a service (PaaS) and infrastructure 11/19/13 Computing / as a service (IaaS) and server provisioning and cloud management $150M 18.8x 8.1x NA Storage software for medium and large businesses and SaaS providers Vertical Market – Provides restaurant reservation and management software for 6/13/14 Retail / restaurants. Also provides online reservation booking services for $2.6B 12.6x NA 63.6% Restaurants consumers through www.opentable.com.
Content Delivery Provides cloud-based video content delivery and advertising 1/6/14 $49M 9.8x NA NA Services enablement software for Web publishers and content providers
Cloud & IT 7/23/13 Provides intelligent cybersecurity technologies worldwide $2.39B 8.9x NA 43.7% Infrastructure
Cloud & IT Provides cloud-based intrusion detection, vulnerability assessment and 8/20/13 $300M 8.3x 6.3x NA Infrastructure security log management for businesses
Marketing & Provides email marketing campaign design, management and 12/20/13 $1.6B 8.2x NA 66.3% Advertising analytics software and SaaS for businesses
Cloud & IT Provides open source cloud hosting and virtualization build and 6/18/14 $95M 7.6x 10.7x NA Infrastructure deployment IaaS and managed hosting for businesses globally.
Analytics / Provides online advertising analytics and customer analytics SaaS for 5/6/14 Business $150M 7.5x 5.2x NA businesses and advertisers. Intelligence
Marketing & Provides multi-channel Web-based content marketing SaaS for 10/17/13 $15M 7.5x 3.9x NA Advertising businesses
Excludes deals with Target company revenue less than $2M
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 Q2’14
LTM Multiple Premium Deal Ann. Date Buyer Target Segment Target Description Revenue on $ to 1 Mo Value Multiple Invested Prior Vertical Market Provides restaurant reservation and management software for 6/13/14 – Retail / restaurants. Also provides online reservation booking services for $2.6B 12.6x NA 63.6% Restaurants consumers through www.opentable.com.
Vertical Market Creator of turnitin.com, provides anti-plagiarism SaaS for teachers, 6/2/14 $752M 9.5x 6.0x NA – Education educational institutions and students.
Vertical Market Provides WiFi-enabled home security digital video equipment and 6/20/14 – Home $555M NA 11.6x NA related home monitoring SaaS and mobile applications for consumers. Automation Provides data integration SaaS for healthcare organizations to send Vertical Market 4/7/14 information to Medicare, insurance companies and other payers for $550M NA 16.7x NA – Healthcare reimbursement. Provides pre-paid healthcare and commuter benefits cards and Vertical Market 6/16/14 related transaction processing software and services for businesses $533M 6.0x NA NA – Healthcare and consumers in the US and Canada.
Marketing & Provides public relations management and business intelligence (BI) 4/7/14 $481M 2.4x NA 32.0% Advertising software as a service (SaaS) for businesses.
CRM & 5/14/14 Customer Provides CRM marketing data integration SaaS for businesses. $310M NA NA NA Service An investment holding company, operates as an integrator of business Cloud & IT 5/22/14 solutions based on information and communications technology $293M 0.5x NA 21.1% Infrastructure primarily in South Africa. Provides online cross-channel advertising (mobile, web, video, email Marketing & 6/10/14 and social media), SEO and related marketing analytics SaaS for $229M 1.3x 2.1x NA Advertising marketers and businesses. Operates as a holding company for companies that provide workers Vertical Market 5/6/14 compensation bill processing, review and real-time medical case $225M NA NA NA – Insurance management team collaboration SaaS
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 16 Investment Banking Advisors 16 Capstone Partners MostInvestment Active Banking Advisors SaaS/Cloud Buyers – Last 2 Years
# of Deals SaaS/Cloud Transactions Company SaaS/Cloud Total Date Company Value Date Company Value
6/20/14 LiveLOOK NA 3/13/13 Nimbula NA 2/24/14 BlueKai $420M 12/20/12 Eloqua $956M 1/7/14 Corente NA 12/13/12 DataRaker NA 12 21 12/20/13 Responsys $1.6B 11/8/12 Instantis NA 10/23/13 BigMachines $450M 9/17/12 SelectMinds NA 10/17/13 Compendium $15M 7/19/12 Skire NA
6/25/14 Appurify NA 5/6/14 Adometry $150M 6/20/14 Dropcam $555M 5/5/14 Rangespan NA 9 54 6/19/14 mDialog NA 11/28/12 Incentive Targeting NA 5/7/14 Appetas NA 7/31/12 Wildfire Interactive $350M 5/7/14 Stackdriver NA
6/9/14 Autotask NA 8/23/13 Omnitracs $800M 5/13/14 DealerSocket NA 7/23/13 Digital Technology Int’l NA 9 13 3/28/14 PeopleAdmin NA 7/22/13 Saxotech NA 9/30/13 Active Network $1.1B 1/7/13 Lanyon NA 9/23/13 Greenway Medical Technologies $644M
4/10/14 Silverpop Systems NA 8/15/13 Trusteer $900M 2/24/14 Cloudant $150M 7/9/13 CSL International NA 8 20 11/13/13 Fiberlink Communications $300M 6/4/13 SoftLayer Technologies $2.0B 10/3/13 Xtify $40M 8/27/12 Kenexa $1.4B
5/20/14 SeeWhy NA 5/16/13 KMS Software NA 3/26/14 Fieldglass $1.0B 3/7/13 Camilion Solutions NA 8 10 9/10/13 KXEN $40M 2/22/13 SmartOps NA 6/5/13 Hybris $1.3B 1/31/13 Ticket-Web NA
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 17 Investment Banking Advisors 17 Capstone Partners MostInvestment Active Banking Advisors SaaS/Cloud Buyers – Last 2 Years
# of Deals SaaS/Cloud Transactions Company SaaS/Cloud Total Date Company Value Date Company Value 6/27/14 Assemblage NA 11/18/12 Meraki $1.2B 5/21/14 ThreatGRID NA 7 20 11/15/12 Cloupia $125M 12/17/13 Kibits NA 7/16/12 Virtuata $18M 3/25/13 Solve Direct Service Management $21M
3/18/14 Solariat NA 5/20/13 Soundbite $100M 1/20/14 Ventriloquist NA 7 9 2/26/13 Angel.com $110M 12/2/13 Voran NA 1/29/13 UTOPY NA 10/8/13 Echopass NA
6/25/14 Shotgun Software NA 1/31/13 Allpoint Systems NA 6 18 1/6/14 Circuits.io NA 10/4/12 Qontext $26M 5/20/13 Airstone Labs NA 8/28/12 Inforbix NA
5/14/14 Invitco NA 10/30/13 Full Slate NA 6 12 5/8/14 Lettuce $30M 7/18/13 Fifo NA 11/20/13 Prestwick Services NA 6/21/13 Elastic Intelligence NA
5/1/14 GreenButton NA 3/5/13 MetricsHub NA 6 19 1/7/14 Parature $100M 10/17/12 MarketingPilot Software NA 10/23/13 Apiphany NA 10/16/12 StorSimple $200M
2/14/14 Distill (Employees) NA 7/18/13 Ztelic NA 6 39 1/29/14 Tomfoolery $16M 7/17/13 AdMovate NA 7/31/13 Palaran $38M 5/23/13 PlayerScale NA
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 EnterpriseInvestment Banking AdvisorsSaaS & Cloud 130 Public Company Universe – Pt. 1
Analytics / Business Intelligence
Cloud & IT Infrastructure
Cloud Computing / Storage
Communication & Collaboration
Content Creation & Management
Content Delivery Services
CRM & Customer Service
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 20 Investment Banking Advisors 20 Capstone Partners EnterpriseInvestment Banking AdvisorsSaaS & Cloud 130 Public Company Universe – Pt. 2
ERP, Supply Chain & Commerce
Finance & Administration
Human Resources
Licensed Software Leaders
Marketing & Advertising
Vertical Markets
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 21 Investment Banking Advisors 21 Capstone Partners RecentInvestment Banking IPOs Advisors – Five9
IPO Details Business Description Offering Date: 4/3/14 Market Cap: $332.8M Provides contact center SaaS for businesses globally. Offering Price: $7.00 Offering Size: $70.0M Software includes IVR and automated callback features. Original Range: $9.00-$11.00 % of Company: 21.0%
IPO Performance HQ: San Ramon, CA Ticker: NasdaqGM: FIVN Open: $7.95 6/30 $/share: $7.20 % Change to Offer: 13.6% % Change to Offer: 2.9% Stock Performance thru End of Q2’14 Close: $7.64 % Change to Open: (9.4)% % Change to Offer: 9.1% % Change to Open: (3.9)%
Financial & Valuation Metrics LTM Revenue: $93.7M ‘13/’12 Rev Growth: 31.8% LTM EBITDA: $(24.8M) Gross Margin: 45.0% LTM Net Income: $(33.3M) EBITDA Margin: (26.4)% Mkt Cap / $ Invested: 4.0x Rev Multiple: 4.7x
Investors Adams Street Partners; City National Bank; Hummer Winblad Venture Partners; Mosaic Venture Partners; Partech Ventures; SAP Ventures
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 22 Investment Banking Advisors 22 Capstone Partners RecentInvestment Banking IPOs Advisors – GrubHub
IPO Details Business Description Offering Date: 4/3/14 Market Cap: $2.04B Provides an online and mobile platform for restaurant pick- Offering Price: $26.00 Offering Size: $192.6M up and delivery orders in the United States. Original Range: $23.00-$25.00 % of Company: 9.4%
IPO Performance HQ: Chicago, IL Ticker: NYSE: GRUB Open: $40.00 6/30 $/share: $35.41 % Change to Offer: 53.8% % Change to Offer: 36.2% Stock Performance thru End of Q2’14 Close: $34.00 % Change to Open: (11.5)% % Change to Offer: 30.8% % Change to Open: (15.0)%
Financial & Valuation Metrics LTM Revenue: $203.1M ’13/’12 Rev Growth: 66.6% LTM EBITDA: $47.6M Gross Margin: 74.4% LTM Net Income: $10.7M EBITDA Margin: 23.4% Mkt Cap / $ Invested: 24.2x Rev Multiple: 15.8x
Investors Amicus Capital; Benchmark; DAG Ventures; Greenspring Associates; Leo Capital Holdings; Lightspeed Venture Partners; Mesirow Financial; Origin Ventures; T. Rowe Price
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 23 Investment Banking Advisors 23 Capstone Partners RecentInvestment Banking IPOs Advisors – iSentia
IPO Details Business Description Offering Date: 6/5/14 Market Cap: $447.8M A software-as-a-service (SaaS) business, provides media Offering Price: $1.90 Offering Size: $265.1M intelligence solutions in Australia, New Zealand, and Asia. Original Range: $1.90-$1.90 % of Company: 59.2%
IPO Performance HQ: Strawberry Hills, Australia Ticker: ASX: ISD Open: $2.25 6/30 $/share: $2.23 % Change to Offer: 18.4% % Change to Offer: 17.1% Stock Performance thru End of Q2’14 Close: $2.20 % Change to Open: (1.1)% % Change to Offer: 15.9% % Change to Open: (2.1)%
Financial & Valuation Metrics LTM Revenue: $94.3M LTM Rev Growth: 5.9% LTM EBITDA: $19.9M Gross Margin: 21.1% LTM Net Income: $(10.5M) EBITDA Margin: 21.1% Mkt Cap / $ Invested: 3.0x Rev Multiple: 5.6x
Investors Quadrant Private Equity
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 24 Investment Banking Advisors 24 Capstone Partners RecentInvestment Banking IPOs Advisors – JUST EAT
IPO Details Business Description Offering Date: 4/3/14 Market Cap: $2.43B Provides an online food delivery service that enables Offering Price: $4.31 Offering Size: $597.3M consumers in Europe and Canada to order food from restaurants through www.just-eat.com. Original Range: $3.48-$4.31 % of Company: 24.6%
IPO Performance HQ: London, United Kingdom Ticker: LSE: JE. Open: $4.76 6/30 $/share: $4.36 % Change to Offer: 10.5% % Change to Offer: 1.2% Stock Performance thru End of Q2’14 Close: $4.83 % Change to Open: (8.4)% % Change to Offer: 12.0% % Change to Open: 1.3%
Financial & Valuation Metrics LTM Revenue: $160.3M ‘13/’12 Rev Growth: 61.9% LTM EBITDA: $18.8M Gross Margin: 89.7% LTM Net Income: $11.6 EBITDA Margin: 11.8% Mkt Cap / $ Invested: 27.3x Rev Multiple: 14.2x
Investors Greylock Partners; Index Ventures; Redpoint Ventures; Vitruvian Partners
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 25 Investment Banking Advisors 25 Capstone Partners RecentInvestment Banking IPOs Advisors – OPOWER
IPO Details Business Description Offering Date: 4/3/14 Market Cap: $901.7M Provides cloud-based software to the utility industry in the Offering Price: $19.00 Offering Size: $115.9M United States. Original Range: $17.00-$19.00 % of Company: 12.9%
IPO Performance HQ: Arlington, VA Ticker: NYSE: OPWR Open: $25.00 6/30 $/share: $18.85 % Change to Offer: 31.6% % Change to Offer: (0.8)% Stock Performance thru End of Q2’14 Close: $23.00 % Change to Open: (24.6)% % Change to Offer: 21.1% % Change to Open: (8.0)%
Financial & Valuation Metrics LTM Revenue: $98.3M LTM Rev Growth: 64.2% LTM EBITDA: $(15.9M) Gross Margin: 66.1% LTM Net Income: $(18.4M) EBITDA Margin: (16.2)% Mkt Cap / $ Invested: 13.7x Rev Multiple: 9.9x
Investors Accel Partners; Ali Partovi; Hadi Partovi; KPCB; MHS Capital; New Cycle Capital; New Enterprise Associates
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 26 Investment Banking Advisors 26 Capstone Partners RecentInvestment Banking IPOs Advisors – Paycom Software
IPO Details Business Description Offering Date: 4/14/14 Market Cap: $762.2M Provides a cloud-based human capital management Offering Price: $15.00 Offering Size: $99.7M (HCM) software solution delivered as software-as-a-service in the United States. Original Range: $18.00-$20.00 % of Company: 13.1%
IPO Performance HQ: Oklahoma City, OK Ticker: NYSE: PAYC Open: $17.90 6/30 $/share: $14.59 % Change to Offer: 19.3% % Change to Offer: (2.7)% Stock Performance thru End of Q2’14 Close: $15.35 % Change to Open: (18.5)% % Change to Offer: 2.3% % Change to Open: (14.2)%
Financial & Valuation Metrics LTM Revenue: $117.0M ‘13/’12 Rev Growth: 40.1% LTM EBITDA: $14.6M Gross Margin: 82.1% LTM Net Income: $4.4M EBITDA Margin: 12.5% Mkt Cap / $ Invested: NA Rev Multiple: 7.0x
Investors
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 27 Investment Banking Advisors 27 Capstone Partners RecentInvestment Banking IPOs Advisors – The Rubicon Project
IPO Details Business Description Offering Date: 4/1/14 Market Cap: $520.7M Operates an online ad inventory exchange that enables Offering Price: $15.00 Offering Size: $101.6M publishers and buyers to bid on online ads. Original Range: $15.00-$17.00 % of Company: 19.5%
IPO Performance HQ: Los Angeles, CA Ticker: NYSE: RUBI Open: $17.50 6/30 $/share: $12.84 % Change to Offer: 16.7% % Change to Offer: (14.4)% Stock Performance thru End of Q2’14 Close: $20.09 % Change to Open: (26.6)% % Change to Offer: 33.9% % Change to Open: 14.8%
Financial & Valuation Metrics LTM Revenue: $99.5M ‘13/’12 Rev Growth: 46.9% LTM EBITDA: $(8.1M) Gross Margin: 82.3% LTM Net Income: $(20.5M) EBITDA Margin: (8.1)% Mkt Cap / $ Invested: 8.7x Rev Multiple: 5.5x
Investors Clearstone Venture Partners; IDG Ventures; Jarl Mohn; Matt Coffin; Mayfield Fund; News Corp; Peacock Equity; Silicon Valley Bank; Square 1 Bank; Stanford University
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 28 Investment Banking Advisors 28 Capstone Partners RecentInvestment Banking IPOs Advisors – Sabre
IPO Details Business Description Offering Date: 4/16/14 Market Cap: $3.59B Operates as a holding company for airline industry Offering Price: $16.00 Offering Size: $627.2M software and online travel reservation businesses. Original Range: $18.00-$20.00 % of Company: 17.5%
IPO Performance HQ: Southlake, TX Ticker: NasdaqGS: SABR Open: $16.79 6/30 $/share: $20.05 % Change to Offer: 4.9% % Change to Offer: 25.3% Stock Performance thru End of Q2’14 Close: $16.50 % Change to Open: 19.4% % Change to Offer: 3.1% % Change to Open: (1.7)%
Financial & Valuation Metrics LTM Revenue: $3.05B ‘13/’12 Rev Growth: 2.5% LTM EBITDA: $614.9M Gross Margin: 36.8% LTM Net Income: $(87.6M) EBITDA Margin: 20.2% Mkt Cap / $ Invested: NA Rev Multiple: 3.1x
Investors
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 29 Investment Banking Advisors 29 Capstone Partners RecentInvestment Banking IPOs Advisors – TrueCar
IPO Details Business Description Offering Date: 5/15/14 Market Cap: $639.3M Provides an online price comparison service that enables Offering Price: $9.00 Offering Size: $70.0M consumers in the US to research car prices on a local, regional and national level through www.truecar.com. Original Range: $12.00-$14.00 % of Company: 10.9%
IPO Performance HQ: Santa Monica, CA Ticker: NasdaqGS: TRUE Open: $9.70 6/30 $/share: $14.78 % Change to Offer: 7.8% % Change to Offer: 64.2% Stock Performance thru End of Q2’14 Close: $10.06 % Change to Open: 52.4% % Change to Offer: 11.8% % Change to Open: 3.7%
Financial & Valuation Metrics LTM Revenue: $152.8M ‘13/’12 Rev Growth: 67.7% LTM EBITDA: $(18.8M) Gross Margin: 90.0% LTM Net Income: $(26.0M) EBITDA Margin: (12.3)% Mkt Cap / $ Invested: 2.3x Rev Multiple: 6.6x
Investors Allen & Company; Anthem Venture Partners; Arcturus Capital; BDCA Venture; Brad Jones; Capital One; Capricorn Investment Group; DealerTrack; Global Investment House; GSV Capital; Passport Capital; Silicon Valley Bank; Tech Coast Angels; Upfront Venture; USAA; Vulcan Capital
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 30 Investment Banking Advisors 30 Capstone Partners RecentInvestment Banking IPOs Advisors – Zendesk
IPO Details Business Description Offering Date: 5/14/14 Market Cap: $631.7M Provides help desk, customer support, self-service and Offering Price: $9.00 Offering Size: $100.0M engagement SaaS for businesses globally. Original Range: $8.00-$10.00 % of Company: 15.8%
IPO Performance HQ: San Francisco, CA Ticker: NYSE: ZEN Open: $11.40 6/30 $/share: $17.38 % Change to Offer: 26.7% % Change to Offer: 93.1% Stock Performance thru End of Q2’14 Close: $13.43 % Change to Open: 52.5% % Change to Offer: 49.2% % Change to Open: 17.8%
Financial & Valuation Metrics LTM Revenue: $83.2M ‘13/’12 Rev Growth: 88.5% LTM EBITDA: $(22.2M) Gross Margin: 65.6% LTM Net Income: $(27.5M) EBITDA Margin: (26.6)% Mkt Cap / $ Invested: 7.4x Rev Multiple: 14.3x
Investors Benchmark; Christoph Janz; CRV; GGV Capital; Goldman Sachs; Index Ventures; Matrix Partners; Redpoint Ventures; Silicon Valley Bank
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 31 Investment Banking Advisors 31 Capstone Partners MedianInvestment Banking Stock Advisors Performance – SaaS & Cloud 130
Median stock performance for the SaaS & Cloud 130 was slightly negative in Q2 SaaS & Cloud 130 posted a 2.7% decline in Q2 while the NASDAQ posted 5% gain In Q2, ERP, Supply Chain & Commerce posted median stock performance decline of 21.2% Blur Group declined 81.2%, Freelancer, SciQuest and SLI Systems all posted declines greater than 30%
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 32 Investment Banking Advisors 32 Capstone Partners MedianInvestment Banking LTM Advisors Revenue Multiples – SaaS & Cloud 130
Median LTM Revenue Multiple weakened to 5.0x, but still represents a healthy multiple Within SaaS & Cloud, median multiples vary considerably between segments ranging from 1.9x to 7.7x in Q2 ERP, Supply Chain & Commerce, Content Creation & Management, Human Resources and Cloud & IT Infrastructure segments command median multiples of more than 7x Content Delivery Services LTM Revenue multiple lags at 1.9x and represents the lowest multiple within SaaS & Cloud 130 primarily due to its lower margin profile
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 33 Investment Banking Advisors 33 Capstone Partners MedianInvestment Banking LTM Advisors EBITDA Multiples – SaaS & Cloud 130
Median LTM EBITDA multiple stands at 18.0x, a five year high Four of the SaaS & Cloud segments are trading at medians above 30x LTM EBITDA ERP segment holds a high LTM EBITDA multiple due to the 84% drop in median EBITDA in LTM The premium multiples for SaaS companies versus Licensed Software Leaders illustrates higher expected growth rates and the market’s preference for the more predictable recurring revenue business model
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 34 Investment Banking Advisors 34 Capstone Partners MedianInvestment Banking LTM Advisors P/E Multiples – SaaS & Cloud 130
Median P/E multiples continue to rebound and sets a new five year high of 29.2x for LTM P/E multiples continue to rise from 2011 as investors increasingly focus on future profitability to value companies ERP, Supply Chain & Commerce continues to post high LTM P/E ratios With only 2 companies within the segment having positive EPS, the median may not be meaningful The next eight segments trade within a range of 30-50x earnings
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 35 Investment Banking Advisors 35 Capstone Partners MedianInvestment Banking Revenue Advisors Growth – SaaS & Cloud 130
SaaS & Cloud 130 posted median revenue growth of 19.4% in LTM with and is expected to continue to 20.3% in NTM The continued increase in revenue growth can be attributed to several companies going public in Q2 Licensed Software Leaders project just 4.1% growth, reinforcing the market shift towards SaaS-based solutions
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 36 Investment Banking Advisors 36 Capstone Partners MedianInvestment Banking EBITDA Advisors Growth – SaaS & Cloud 130
LTM Median EBITDA growth of 6.8% is down from 10.6% in 2013 but is expected to increase to 12.2% in NTM EBITDA growth drop from 2011 high is more related to stronger prior period performance and increased OpEx spend than a weakening in total profit dollars Majority of the segments are expected to achieve greater than 10% EBITDA growth for NTM Three of the companies in Content Creation & Management are projected to see a decline in EBITDA
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 37 Investment Banking Advisors 37 Capstone Partners MedianInvestment Banking EPS Advisors Growth – SaaS & Cloud 130
Median EPS growth decreased to 10.8% in LTM, but is expected to rise to 13.8% in NTM Improved prior period profits coupled with a return to investment in growth after several years of cost cutting results in lower EPS growth than prior periods Five segments have EPS growth projections of 15% or more
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 38 Investment Banking Advisors 38 Capstone Partners MedianInvestment Banking Gross Advisors Margin Trends – SaaS & Cloud 130
Median gross margins have stayed relatively constant and now stand at 68.0% Content Creation & Management and Cloud & IT Infrastructure top the list at over 80% as newly emerging technologies that enable the cloud to run more efficiently command strong margins Cloud Computing / Storage segment gross margins are suffering due to the ongoing battle to cut prices for hosting data in the cloud
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 39 Investment Banking Advisors 39 Capstone Partners MedianInvestment Banking EBITDA Advisors Margin Trends – SaaS & Cloud 130
Median EBITDA margin dropped slightly to 15.4% as companies reinvest to fuel growth Several high growth companies in CRM & Customer Service and ERP, Supply Chain & Commerce continue to invest heavily in sales and marketing and are early in the process of achieving scale and profitability The License Software Leaders and other more mature segments like Cloud Computing / Storage already have operating leverage
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 40 Investment Banking Advisors 40 Capstone Partners BestInvestment & Banking Worst Advisors Performers – SaaS & Cloud 130
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 41 Investment Banking Advisors 41 Capstone Partners BestInvestment & Banking Worst Advisors Performers – SaaS & Cloud 130 (Continued)
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 42 Investment Banking Advisors 42 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 43 Investment Banking Advisors WORLD CLASS WALL STREET EXPERTISE.43 BUILT FOR THE MIDDLE MARKET.TM Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
This acquisition of OpenTable by the Priceline Group came as a surprise to many since the two companies aren’t quite operating in the same space. OpenTable provides Deal Summary restaurant reservation and management software for Date: 6/13/14 restaurants. The company also provides online reservation Transaction Value: $2.6B booking services for consumers through www.opentable.com and it’s mobile app. % Sought: 100% Consideration: Cash Priceline provides an online travel reservation service, generating revenues through collecting commissions on user reservations through its website as well as Kayak.com and Booking.com. The acquisition of OpenTable marks its largest purchase, surpassing the $1.8 billion transaction for Kayak in Valuation Metrics November of 2012. Priceline Chief Executive, Darren Huston, hopes to expand OpenTable’s presence outside of the U.S., LTM Revenue Multiple: 12.6x where it currently accounts for 22% of the business. He is also LTM EBITDA Multiple: 41.5x betting on a cross-marketing opportunity between the two LTM P/E Multiple: 50.5x businesses, allowing for more targeted ads and offers for restaurants since they will be aware of their customers’ Premium versus: destinations. 1 day prior: 46.2% 1 week prior: 45.9% The offer price of $103 per share marks a whopping 63.6% 1 month prior: 63.6% premium over OpenTable’s one month prior closing share price.
Note: LTM and Premiums of last quarter prior to transaction announcement date.
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 44 Investment Banking Advisors 44 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
iParadigms, creator of turnitin.com, provides anti-plagiarism SaaS for teachers, educational institutions and students. Its software provides originality checking and citation tools of Deal Summary written assignments and admission essays both online and Date: 6/2/2014 on mobile devices. Since its founding in 2000, iParadigms has Transaction Value: $752M expanded its offerings from plagiarism detection to automatically grading work for grammar and syntax, peer % Sought: 100% editing software for students, and a content verification Consideration: Cash service for research, corporate and government markets, known as iThenticate.
GIC, Singapore’s sovereign-wealth fund, is joining lead investor Insight Venture Partners to acquire iParadigms. Valuation Metrics Insight seeks to provide necessary resources to help Trailing Revenue Multiple: 8.4x - 10.7x* iParadigms further its expansion into the global market and Trailing EBITDA Multiple: 15.0x continue to accelerate growth. Multiple on $ Invested: 6.0x* Although revenue metrics were not disclosed, Chairman and CEO, Chris Caren, said the company has been (*) Estimate from Capstone research & industry sources profitable for the last eight years, with $50 million in revenue for 2012, and is now rapidly approaching the $100 million Investors mark with an estimated EBITDA of $50 million. The deal value Warburg Pincus of $752 million equates to roughly 15 times trailing EBITDA and will provide Warburg Pincus with a 6 times return on total dollars invested upon closing of the deal.
Capstone Partners CapstoneInvestment BankingPartners Advisors 45 Investment Banking Advisors 45 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Dropcam provides WiFi-enabled home security digital video equipment and related home monitoring SaaS and mobile applications for consumers. The company also provides Deal Summary online live streaming of home security footage as well as Date: 6/20/2014 AWS cloud file storage of home security video recordings. Transaction Value: $555M Nest provides wireless, sensor-based smart energy % Sought: 100% thermostats and smoke detectors for businesses and Consideration: Cash consumers. Nest thermostats automatically adjust temperature based on user behavior and can be remotely controlled via computers or smartphones. Acquired by Google in February of this year for $3.2 billion, the Dropcam deal marks Nest’s first acquisition as a Google subsidiary. Valuation Metrics Privacy advocates may be weary from the news since Trailing Revenue Multiple: NA Google would theoretically have access to the stored Trailing EBITDA Multiple: NA camera footage, but Nest Founder Matt Rogers noted that Dropcam will operate under Nest’s privacy policy, which Multiple on $ Invested: 11.6x states that the data collected by Nest will not be shared with third parties, including Google.
The Nest thermostat is currently limited to a single motion Investors detector, but with its acquisition of Dropcam it could gain Angel Investors; Accel Partners; Bay Partners; Felicis capabilities to more intelligently monitor the activities of the Ventures; Institutional Venture Partners; Kleiner Perkins home and leverage the increased data for new use cases Caufield & Byers; Menlo Ventures such as home security monitoring. Dropcam had raised approximately $48M from well-known venture investors such as Accel Partners, IVP, Menlo Ventures and KPCB.
Capstone Partners CapstoneInvestment BankingPartners Advisors 46 Investment Banking Advisors 46 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Summit Partners invested $550 million in Ability Network Inc., a health-care information technology provider backed by Bain Capital Ventures and Lemhi Ventures. Deal Summary Date: 4/7/2014 Ability, based in Minneapolis, offers a secure Web-based Transaction Value: $550M platform that connects hospitals, clinics, skilled nursing facilities, physicians and other health-care providers across % Sought: 100% the country with Medicare and other healthcare payers. Consideration: Cash More than 55,000 providers use Ability's platform daily to help manage their administrative and clinical processes.
Ability Network recorded $30 million in EBITDA in 2013, which Valuation Metrics is forecasted to grow to $42 million this year through organic growth and new product offerings. Trailing Revenue Multiple: NA Trailing EBITDA Multiple: 18.3x Summit Partners is buying out existing shareholders, including Multiple on $ Invested: 16.7x Minnetonka-based Lemhi Ventures, which invested $27 million with Boston-based Bain Capital Ventures in Ability in 2011. Ability management and Bain Capital are rolling over an unspecified amount of their investment in the company Investors as minority shareholders. In addition to the 2011 investment in Ability by Bain Capital and Lemhi of $27 million, Ability Bain Capital Ventures; Chippewa Valley Investment previously raised about $16 million in equity when it was Partners; Lemhi Ventures known as VisionShare.
Capstone Partners CapstoneInvestment BankingPartners Advisors 47 Investment Banking Advisors 47 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Evolution1 provides pre-paid healthcare and commuter benefits cards and related transaction processing software and services for businesses and consumers in the US and Deal Summary Canada. Date: 6/16/2014 WEX hopes to expands its corporate payment services Transaction Value: $533M beyond its fleet management space with its acquisition of % Sought: 100% Evolution1. Prior to the acquisition, WEX provided fuel Consideration: Cash payment cards and mobile payment applications for the shipping industry, as well as other payment cards for businesses. This acquisition marks its largest purchase to date, topping the $369 million transaction for FleetOne Holdings in September of 2012. Valuation Metrics Trailing Revenue Multiple: 6.0x The deal value of $532.5 million equates to 6 times trailing revenues and 20 times trailing EBITDA. Trailing EBITDA Multiple: 20.0x Multiple on $ Invested: NA
Investors Genstar Capital
Capstone Partners CapstoneInvestment BankingPartners Advisors 48 Investment Banking Advisors 48 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
We continue to see consolidation within the valuation rich marketing SaaS space; Vocus has been taken private by GTCR in a $481 million deal. Vocus provides public relations Deal Summary management and business intelligence (BI) SaaS for Date: 4/7/14 businesses. Vocus’ software provides a database of press Transaction Value: $481M and media contacts and offers social media and news monitoring and press release distribution features. % Sought: 100% Consideration: Cash GTCR expects to provide support to grow Vocus’ PR and marketing SaaS offerings to compete more aggressively with the likes of Oracle, Marketo and other marketing SaaS companies.
The offer price of $18 per share marks a 32% premium over Valuation Metrics Vocus’ 1 month prior closing share price. The deal value LTM Revenue Multiple: 2.4x marks a 2.4x LTM revenue multiple which is quite low LTM EBITDA Multiple: NM compared to other marketing SaaS company acquisitions such as BlueKai, Responsys, Compendium and Eloqua all LTM P/E Multiple: acquired by Oracle with LTM revenue multiples of 6.5x, 7.7x, Premium versus: 7.5x and 9.7x respectively. 1 day prior: 47.8% 1 week prior: 35.0% 1 month prior: 32.0%
Note: LTM and Premiums of last quarter prior to transaction announcement date.
Capstone Partners CapstoneInvestment BankingPartners Advisors 49 Investment Banking Advisors 49 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
LiveRamp provides CRM marketing data integration SaaS for businesses which allows the user to pull data from disparate systems such as offline storage systems or web apps to Deal Summary enable the marketer or salesperson to utilize the data Date: 5/14/2014 wherever it is needed. The company also provides customer Transaction Value: $310M* segmentation and marketing analytics SaaS as well. According to Advertising Age, LiveRamp increased its client % Sought: 100% list by 92% year-over-year and recorded 143% revenue Consideration: Cash, Earnout growth in the same time period.
Acxiom operates in a similar space where they provide (*) Transaction value includes a $31.5 million earnout customer data integration SaaS, access to customer and fraud databases and CRM analytics, background screening Valuation Metrics and related marketing services for businesses. Trailing Revenue Multiple: 11.1x* Many Internet tech firms such as Facebook and Google Trailing EBITDA Multiple: NA partner with companies like LiveRamp to measure the Multiple on $ Invested: NA effectiveness of their digital marketing efforts through offline data. Facebook and Twitter are currently partnered with (*) Estimate from Capstone research & industry sources DataLogix and Google recently purchased Adometry.
Investors
Capstone Partners CapstoneInvestment BankingPartners Advisors 50 Investment Banking Advisors 50 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Telkom (TKG) has agreed to acquire Business Connexion Group (BCX), as Africa’s largest fixed-line phone company plans to boost cloud-based offerings of information and Deal Summary communication technology services. BCX shareholders Date: 5/22/14 voted overwhelmingly in favor of the acquisition. Transaction Value: $293M The consideration offered was R6.60 per ordinary share and % Sought: 100% R6.60 per 'A' share, which represents a premium of 20% over Consideration: Cash the share price of BCX at close of trading on April 14, 2014. The rationale behind the move was in line with BCX's existing convergence strategy, as major technological changes drove the convergence of the IT and telecommunications industries. TKG, which is 40% owned by the South African Valuation Metrics government, is struggling to revive revenue growth as LTM Revenue Multiple: 0.5x consumers migrate from fixed-line technology to data- LTM EBITDA Multiple: 3.9x enabled smartphones and tablets. According to TKG CEO Sipho Maseko, the Pretoria-based company needs to cut its LTM P/E Multiple: NA workforce of about 19,200 employees by almost a third over Premium versus: five years to remain financially viable. This is an important 1 day prior: 10.7% move for TKG in order to expand into higher gross-margin IT 1 week prior: 11.9% services to complement its telecommunications business. 1 month prior: 21.1% The offer values BCX at approximately 2.6 billion rand ($268 million), based on 405 million shares outstanding. The acquisition is expected to close in November 2014, subject Note: LTM and Premiums of last quarter prior to transaction announcement date. to regulatory hurdles.
Capstone Partners CapstoneInvestment BankingPartners Advisors 51 Investment Banking Advisors 51 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Adconion provides online cross-channel advertising (mobile, web, video, email and social media), SEO and related marketing analytics SaaS for marketers and businesses. Deal Summary Founded in 2005, Santa Monica, CA based Adconion has Date: 6/10/2014 raised a total of $114 million from well-known investors, and Transaction Value: $229M* boasting more than 2,000 clients, has grown to $185 million in revenue. Enterprise Value: $235M % Sought: 100% Acquired 2 years ago by SingTel, Singapore’s largest Consideration: Cash telecom carrier, Amobee, has demonstrated ambition to broaden its mobile advertising products by enhancing (*) Transaction value includes a $20 million earnout targeted ads and marketing analytics capabilities through the acquisition of Adconion and Kontera (profiled in the Valuation Metrics subsequent slide). Adconion’s $185 million in revenue is Trailing Revenue Multiple: 1.3x mostly generated in the US, providing Amobee an instantly Trailing EBITDA Multiple: NA larger client footprint domestically and expanded reach into 17 countries world-wide. According to industry sources, the Multiple on $ Invested: 2.1x company receives up a 10 percent share of total digital ad spend of mobile display advertising across the world.
The deal value of $229 million includes a $20 million earnout Investors and the enterprise value includes $26 million debt. The Index Ventures; Silicon Valley Bank; Wellington enterprise value of $235 million expressed as a multiple Partners equates to 1.3 times trailing revenue and 2.1 times total dollars invested, generating a healthy return for its investors.
Capstone Partners CapstoneInvestment BankingPartners Advisors 52 Investment Banking Advisors 52 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
ISG Holdings, a parent company of StrataCare and Bunch CareSolutions, provide workers compensation bill processing, review and real-time medical case management team Deal Summary collaboration SaaS for self-insured employers, third-party Date: 6/10/2014 administrators, workers’ compensation insurance carriers Transaction Value: $225M and other managed care providers. % Sought: 100% Xerox’s acquisition of ISG Holdings and its subsidiaries will Consideration: Cash enable Xerox to bolster its payment and compensation services unit in the property and casualty insurance sectors. ISG’s extensive suite of secure and compliant SaaS, care management services and analytics will enable Xerox to provide a comprehensive solution to review medical bills Valuation Metrics and implement care management plans. Trailing Revenue Multiple: NA The workers’ compensation industry generates nearly $60 Trailing EBITDA Multiple: NA billion in medical payment annually. Xerox President, Bob Deal Value Per Employee: $321K Zapfel, states, “this acquisition demonstrates our Multiple on $ Invested: NA commitment to the property and casualty sector and makes us an industry leader in workers’ compensation bill review software and care management services.” Investors
Capstone Partners CapstoneInvestment BankingPartners Advisors 53 Investment Banking Advisors 53 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 54 Investment Banking Advisors WORLD CLASS WALL STREET EXPERTISE.54 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 NTM / LTM Growth LT M M argin C o mpany N ame 6/ 30/ 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
SaaS & Cloud 130 M ean 16,062 16,035 2,354 2,207 22.1 % (3.2)% 7.7 x 5.6 x 28.0 x 23.8 x 43.6 x #VALUE! 31.4% 15.7% 20.2% 65.4 % 5.8 % (15.3)% SaaS & Cloud 130 M edian 1,104 996 100 6 18.1 % (2.7)% 5.0 x 4.1 x 18.0 x 14.7 x 29.2 x N A 20.3% 12.2% 13.8% 68.0 % 15.4 % 6.8 %
Analytics / Business Intelligence Adobe 72.36 35,990 34,166 3,330 1,506 58.8 % 10.1 % 8.3 x 7.7 x 31.3 x 26.4 x 55.2 x 49.4 x 7.8% 18.6% 11.7% 85.4 % 26.6 % 16.3 % Bazaarvoice 7.89 613 567 73 27 (16.3)% 8.1 % 3.4 x 3.0 x NA NA NA NA 11.8% 1.2% (23.6)% 68.5 % (9.0)% (11.7)% comScore 35.48 1,237 1,208 52 23 45.5 % 8.2 % 4.1 x 3.6 x 19.2 x 17.7 x 29.6 x 25.6 x 14.2% 8.8% 15.4% 69.2 % 21.3 % 14.0 % Google 584.67 391,190 342,310 57,276 8,396 32.8 % 4.9 % 5.5 x 5.1 x 15.4 x 12.4 x 26.1 x 21.0 x 8.4% 23.6% 24.4% 57.2 % 35.7 % 24.5 % Hottolink 22.62 220 211 9 0 NA 31.6 % 21.8 x 15.7 x NA 58.1 x 197.5 x NA 38.8% NA NA 62.9 % NA 8.5 % iSentia 2.23 445 NA NA NA NA NA NA NA NA NA NA NA NA NA NA 21.1 % 21.1 % (11.2)% Mattersight 5.31 101 96 8 3 89.6 % (23.4)% 2.9 x 2.6 x NA NA NA NA 13.4% NA (43.2)% 69.2 % (2.7)% (17.7)% Splunk 55.33 6,560 5,733 827 0 19.3 % (22.6)% 17.3 x 13.1 x NA NA NA NA 32.1% NA NA 87.6 % 2.5 % (0.7)% M ean 54,545 54,899 8,796 1,422 38.3 % 2.4 % 9.1 x 7.3 x 22.0 x 28.7 x 77.1 x 32.0 x 18.1% 13.1% (3.1)% 65.1 % 13.7 % 2.8 % M edian 925 1,208 73 23 39.1 % 8.1 % 5.5 x 5.1 x 19.2 x 22.0 x 42.4 x 25.6 x 13.4% 13.7% 11.7% 68.8 % 21.1 % 3.9 %
Cloud & IT Infrastructure Citrix 62.55 10,250 9,420 829 0 3.6 % 8.9 % 3.1 x 2.9 x 11.0 x 10.1 x 20.6 x 19.3 x 8.6% 8.0% 6.8% 85.8 % 28.7 % 19.0 % FireEye 40.55 5,883 5,299 584 0 NA (34.1)% 25.6 x 11.6 x NA NA NA NA 121.1% (48.5)% 37.8% 63.2 % (72.1)% (126.8)% LogMeIn 46.62 1,132 928 204 0 90.6 % 3.9 % 5.2 x 4.2 x 23.8 x 19.4 x 71.7 x 44.6 x 24.0% 22.5% 60.9% 88.5 % 21.9 % 8.8 % Proofpoint 37.46 1,386 1,285 257 157 54.5 % 1.0 % 8.6 x 6.9 x NA NA NA NA 25.0% NA (21.1)% 69.2 % (2.4)% (7.8)% Qualys 25.67 839 734 106 1 59.2 % 0.9 % 6.5 x 5.4 x 41.4 x 30.7 x 107.0 x 92.7 x 20.3% 34.9% 15.4% 77.3 % 15.6 % 7.7 % Rally Softw are 10.89 271 185 86 0 (56.1)% (18.6)% 2.4 x 2.0 x NA NA NA NA 18.8% (115.1)% (100.1)% 76.5 % (17.9)% (21.2)% Red Hat 55.27 10,421 9,618 803 0 15.6 % 4.3 % 6.0 x 5.2 x 22.6 x 19.3 x 36.8 x 34.3 x 15.0% 17.2% 7.5% 84.9 % 26.7 % 18.0 % ServiceNow 61.96 8,926 8,692 656 422 53.4 % 3.4 % 18.2 x 12.2 x NA 139.4 x NA NA 49.2% NA NA 63.2 % 4.4 % (4.3)% SolarWinds 38.66 2,915 2,732 223 40 (0.4)% (9.3)% 7.6 x 6.3 x 16.3 x 12.6 x 23.7 x 23.0 x 21.5% 28.6% 3.1% 91.0 % 46.9 % 34.7 % Splunk 55.33 6,560 5,733 827 0 19.3 % (22.6)% 17.3 x 13.1 x NA NA NA NA 32.1% NA NA 87.6 % 2.5 % (0.7)% VMw are 96.81 41,678 36,562 6,616 1,500 44.5 % (10.4)% 6.8 x 5.8 x 18.0 x 15.7 x 28.1 x 26.6 x 16.3% 14.7% 5.9% 86.1 % 37.8 % 27.8 % WANdisco 9.41 223 197 26 0 (34.0)% (45.7)% 24.6 x 14.1 x NA NA NA NA 73.9% 24.7% 23.7% 80.3 % (228.1)% (271.0)% M ean 7,540 6,782 935 177 22.8 % (9.9)% 11.0 x 7.5 x 22.2 x 35.3 x 48.0 x 40.1 x 35.5% (1.4)% 4.0% 79.5 % (11.3)% (26.3)% M edian 4,399 4,015 421 0 19.3 % (4.2)% 7.2 x 6.1 x 20.3 x 19.3 x 32.5 x 30.4 x 22.8% 17.2% 7.1% 82.6 % 10.0 % 3.5 %
*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 N T M / LT M Gro wth LT M M argin C o mpany N ame 6/ 30/ 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
Cloud Computing / Storage Amazon 324.78 149,453 143,934 8,666 3,147 17.0 % (3.4)% 1.8 x 1.5 x NA NA NA NA 21.4% 25.8% NA 27.8 % 7.2 % 0.4 % CenturyLink 36.20 20,733 41,454 219 20,940 2.4 % 10.2 % 2.3 x 2.3 x 5.7 x 5.9 x 13.6 x 14.5 x (0.6)% (2.8)% (6.1)% 60.4 % 40.2 % 8.7 % Google 584.67 391,190 342,310 57,276 8,396 32.8 % 4.9 % 5.5 x 5.1 x 15.4 x 12.4 x 26.1 x 21.0 x 8.4% 23.6% 24.4% 57.2 % 35.7 % 24.5 % IBM 181.27 183,478 217,766 9,704 43,992 (5.1)% (5.8)% 2.2 x 2.2 x 8.3 x 7.6 x 10.9 x 9.9 x (1.3)% 9.4% 10.8% 49.0 % 26.5 % 18.1 % Microsoft 41.70 344,459 280,267 87,674 23,482 20.7 % 1.7 % 3.4 x 2.8 x 8.6 x 8.7 x 15.2 x 15.2 x 20.4% (1.3)% 0.1% 70.1 % 39.2 % 27.7 % Oracle 40.53 180,557 165,905 38,827 24,175 32.0 % (0.9)% 4.3 x 4.1 x 8.9 x 8.0 x 14.1 x 12.8 x 5.0% 10.4% 9.5% 81.1 % 48.9 % 34.6 % Rackspace 33.66 4,782 4,539 314 71 (11.2)% 2.6 % 2.8 x 2.5 x 8.7 x 7.3 x 57.1 x 46.1 x 16.2% 19.3% 23.6% 67.4 % 32.7 % 5.3 % salesforce.com 58.08 35,661 37,075 879 2,293 52.1 % 1.7 % 8.4 x 6.6 x 57.9 x 37.4 x NA 106.1 x 28.3% 54.6% NA 76.1 % 14.5 % 4.9 % Verizon 48.93 202,626 308,864 3,544 109,782 (2.8)% 2.9 % 2.5 x 2.4 x 7.1 x 6.7 x 16.3 x 13.3 x 3.4% 5.6% 22.4% 63.0 % 35.7 % 7.4 % M ean 168,104 171,346 23,011 26,253 15.3 % 1.5 % 3.7 x 3.3 x 15.1 x 11.8 x 21.9 x 29.9 x 11.2% 16.1% 12.1% 61.3 % 31.2 % 14.6 % M edian 180,557 165,905 8,666 20,940 17.0 % 1.7 % 2.8 x 2.5 x 8.6 x 7.8 x 15.2 x 14.9 x 8.4% 10.4% 10.8% 63.0 % 35.7 % 8.7 %
Communication & Collaboration 8x8 8.08 716 610 106 0 (1.9)% (25.3)% 4.7 x 3.8 x 37.2 x 40.9 x 44.9 x 58.6 x 24.9% (9.2)% (23.5)% 70.7 % 12.8 % 11.4 % Cisco 24.85 127,299 97,730 50,469 20,900 2.1 % 10.9 % 2.1 x 2.0 x 6.3 x 5.7 x 12.2 x 11.7 x 2.7% 10.9% 4.5% 59.2 % 32.9 % 23.0 % Citrix 62.55 10,250 9,420 829 0 3.6 % 8.9 % 3.1 x 2.9 x 11.0 x 10.1 x 20.6 x 19.3 x 8.6% 8.0% 6.8% 85.8 % 28.7 % 19.0 % CounterPath 1.08 46 37 8 0 (31.1)% (27.9)% 3.1 x 2.5 x NA NA NA NA 22.2% 40.6% 59.4% 81.6 % (41.4)% (55.9)% Cybozu 3.85 177 146 31 0 40.1 % 11.0 % 2.7 x NA 23.8 x NA NA NA NA NA NA 90.4 % 11.5 % 5.0 % Interactive Intel. 56.13 1,169 1,079 90 0 8.8 % (22.6)% 3.3 x 2.8 x 31.6 x NA NA NA 17.8% (29.9)% NA 63.0 % 10.5 % 3.8 % IntraLinks 8.89 501 513 67 79 22.5 % (13.1)% 2.1 x 2.1 x 14.0 x 13.4 x NA NA 3.7% 4.9% NA 72.2 % 15.3 % 2.8 % j2 Global 50.86 2,419 2,385 279 246 19.6 % 1.6 % 4.4 x 3.9 x 9.9 x 9.2 x 16.8 x 14.5 x 13.4% 7.5% 15.9% 83.4 % 44.7 % 26.0 % Jive Softw are 8.51 599 493 114 8 (53.2)% 6.2 % 3.2 x 2.7 x NA NA NA NA 18.4% 38.9% 23.8% 62.3 % (12.3)% (22.3)% LivePerson 10.15 550 471 79 0 13.3 % (15.9)% 2.6 x 2.2 x 25.3 x 20.5 x 48.3 x 41.7 x 14.5% 23.1% 15.9% 75.9 % 10.2 % 6.2 % Microsoft 41.70 344,459 280,267 87,674 23,482 20.7 % 1.7 % 3.4 x 2.8 x 8.6 x 8.7 x 15.2 x 15.2 x 20.4% (1.3)% 0.1% 70.1 % 39.2 % 27.7 % Premiere Global 13.35 644 866 38 260 10.6 % 10.7 % 1.6 x 1.5 x 9.0 x 8.2 x 16.3 x 15.4 x 5.7% 9.2% 5.7% 57.1 % 17.9 % 7.1 % RingCentral 15.13 1,014 879 167 32 NA (16.4)% 5.1 x 4.0 x NA NA NA NA 27.7% 38.2% 45.8% 62.1 % (16.0)% (21.7)% Textura 23.64 588 517 73 1 (9.1)% (6.2)% 9.7 x 7.7 x NA NA NA NA 25.4% 72.7% 85.1% 77.3 % (33.3)% (70.7)% V-cube 36.68 168 148 27 7 NA (18.2)% 6.2 x 4.3 x 22.9 x 12.0 x NA NA 44.4% 89.9% NA 66.7 % 27.0 % 9.1 % M ean 32,706 26,371 9,337 3,001 3.5 % (6.3)% 3.8 x 3.2 x 18.1 x 14.3 x 24.9 x 25.2 x 17.8% 21.7% 21.8% 71.8 % 9.9 % (2.0)% M edian 644 610 90 7 8.8 % (6.2)% 3.2 x 2.8 x 14.0 x 10.1 x 16.8 x 15.4 x 18.1% 10.1% 15.9% 70.7 % 12.8 % 6.2 %
Content Creation & M anagement Adobe 72.36 35,990 34,166 3,330 1,506 58.8 % 10.1 % 8.3 x 7.7 x 31.3 x 26.4 x 55.2 x 49.4 x 7.8% 18.6% 11.7% 85.4 % 26.6 % 16.3 % Destiny Media 0.90 47 46 1 0 (27.5)% (14.1)% 13.1 x 12.5 x 128.9 x 154.5 x NA NA 4.6% (16.6)% NA 100.0 % 10.2 % 4.5 % Kudelski 17.53 945 1,038 113 206 41.2 % 21.1 % 1.1 x 1.0 x 8.3 x 7.1 x 16.1 x 14.0 x 9.6% 16.8% 14.9% 73.0 % 13.3 % 6.2 % Rovi 23.96 2,270 2,996 424 1,151 4.9 % 5.2 % 5.5 x 5.5 x 11.6 x 13.0 x 12.7 x 13.9 x (0.9)% (10.6)% (8.1)% 82.6 % 47.1 % 33.2 % Sumavision 1.75 1,196 936 264 4 2.7 % 0.2 % 14.7 x 8.6 x 116.4 x NA 65.9 x NA 70.0% NA NA 72.7 % 12.6 % 28.3 % Wix 19.84 747 647 100 0 NA (13.6)% 6.9 x 4.4 x NA NA NA NA 56.6% (15.1)% 37.7% 81.4 % (30.2)% (28.2)% M ean 6,866 6,638 705 478 16.0 % 1.4 % 8.3 x 6.6 x 59.3 x 50.2 x 37.5 x 25.8 x 24.6% (1.4)% 14.0% 82.5 % 13.3 % 10.0 % M edian 1,071 987 189 105 4.9 % 2.7 % 7.6 x 6.6 x 31.3 x 19.7 x 35.7 x 14.0 x 8.7% (10.6)% 13.3% 82.0 % 12.9 % 11.3 % *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 N T M / LT M Gro wth LT M M argin C o mpany N ame 6/ 30/ 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
Content Delivery Services Akamai 61.06 10,869 10,761 698 591 43.5 % 4.9 % 6.5 x 5.3 x 14.7 x 12.6 x 29.2 x 26.1 x 21.3% 16.0% 12.1% 68.1 % 44.1 % 22.9 % Brightcove 10.54 338 318 21 1 20.3 % 7.2 % 2.7 x 2.4 x NA NA NA NA 14.6% (46.7)% NA 65.9 % 6.1 % 0.8 % Digital River 15.43 504 247 392 135 (17.8)% (11.5)% 0.7 x 0.6 x 6.1 x 5.2 x 35.9 x 30.7 x 2.3% 16.0% NA 66.1 % 10.8 % 3.6 % Limelight 3.06 301 190 112 1 36.0 % 40.4 % 1.1 x 1.2 x NA NA NA NA (9.7)% NA (16.3)% 48.0 % 0.0 % (13.2)% M ean 3,003 2,879 306 182 20.5 % 10.3 % 2.7 x 2.4 x 10.4 x 8.9 x 32.5 x 28.4 x 7.1% (4.9)% (2.1)% 62.0 % 15.3 % 3.5 % M edian 421 283 252 68 28.2 % 6.1 % 1.9 x 1.8 x 10.4 x 8.9 x 32.5 x 28.4 x 8.5% 16.0% (2.1)% 66.0 % 8.5 % 2.2 %
CRM & Customer Service eGain 6.77 172 168 8 3 (29.6)% (4.1)% 2.4 x 2.2 x NA NA NA NA 10.1% NA NA 68.0 % 0.9 % (3.6)% Five9 7.20 347 366 29 48 NA NA 4.1 x 3.3 x NA NA NA NA 24.1% (26.8)% 85.9% 43.7 % (26.4)% (212.3)% Jive Softw are 8.51 599 493 114 8 (53.2)% 6.2 % 3.2 x 2.7 x NA NA NA NA 18.4% 38.9% 23.8% 62.3 % (12.3)% (22.3)% LivePerson 10.15 550 471 79 0 13.3 % (15.9)% 2.6 x 2.2 x 25.3 x 20.5 x 48.3 x 41.7 x 14.5% 23.1% 15.9% 75.9 % 10.2 % 6.2 % salesforce.com 58.08 35,661 37,075 879 2,293 52.1 % 1.7 % 8.4 x 6.6 x 57.9 x 37.4 x NA 106.1 x 28.3% 54.6% NA 76.1 % 14.5 % 4.9 % Zendesk 17.38 1,220 1,186 61 28 NA NA 14.3 x 9.8 x NA NA NA NA 45.5% (15.1)% 33.8% 65.6 % (27.0)% (74.5)% M ean 6,425 6,626 195 397 (4.3)% (3.0)% 5.8 x 4.5 x 41.6 x 29.0 x 48.3 x 73.9 x 23.5% 14.9% 39.8% 65.3 % (6.7)% (50.3)% M edian 574 482 70 18 (8.1)% (1.2)% 3.7 x 3.0 x 41.6 x 29.0 x 48.3 x 73.9 x 21.2% 23.1% 28.8% 66.8 % (5.7)% (13.0)%
ERP, Supply Chain & Commerce Amber Road 16.13 407 358 51 3 NA 4.7 % 6.4 x 5.5 x NA NA NA NA 16.4% 35.4% 81.5% 58.0 % (12.1)% (78.7)% blur Group 1.51 71 62 10 0 (43.9)% (81.2)% 12.9 x 3.3 x NA NA NA NA 287.6% 16.3% 35.0% 24.4 % (160.4)% (149.5)% Borderfree 16.57 521 400 121 0 NA (11.1)% 3.6 x 2.7 x NA NA NA NA 34.7% NA 109.4% 23.6 % 1.7 % (15.6)% ChannelAdvisor 26.36 648 554 95 1 67.6 % (30.2)% 7.7 x 6.1 x NA NA NA NA 25.9% (10.2)% 2.7% 72.6 % (20.6)% (26.8)% Demandw are 69.37 2,490 2,236 257 3 63.6 % 8.3 % 19.4 x 13.9 x NA NA NA NA 39.0% NA NA 73.6 % (0.3)% (4.7)% E2open 20.67 601 550 57 6 18.1 % (12.3)% 7.7 x 6.3 x NA NA NA NA 23.4% 8.0% 15.2% 60.7 % (17.2)% (20.0)% Freelancer 0.89 388 366 22 0 NA (35.8)% 21.8 x 14.9 x NA NA NA NA 46.7% NA NA 87.6 % 0.9 % 3.6 % SciQuest 17.69 485 454 31 0 (29.4)% (34.5)% 4.8 x 4.2 x 20.6 x 24.7 x 46.6 x 62.9 x 12.6% (16.4)% (26.0)% 70.0 % 23.2 % 9.4 % SLI Systems 1.36 82 70 12 0 (2.5)% (30.2)% 4.8 x 3.5 x NA NA NA NA 35.3% (40.3)% 10.8% (10.8)% (29.4)% (17.9)% SPS Commerce 63.19 1,024 889 135 0 14.9 % 2.8 % 8.1 x 6.7 x 60.3 x 48.9 x 114.9 x 94.1 x 20.5% 23.4% 22.1% 69.0 % 13.5 % 8.2 % M ean 672 594 79 1 12.6 % (21.9)% 9.7 x 6.7 x 40.5 x 36.8 x 80.7 x 78.5 x 54.2% 2.3% 31.3% 52.9 % (20.1)% (29.2)% M edian 503 427 54 0 14.9 % (21.2)% 7.7 x 5.8 x 40.5 x 36.8 x 80.7 x 78.5 x 30.3% 8.0% 18.7% 64.9 % (6.2)% (16.8)%
Finance & Administration Bottomline 29.92 1,178 1,099 225 146 18.3 % (14.9)% 3.9 x 3.4 x 33.4 x 15.5 x 24.5 x 20.4 x 15.4% 115.1% 20.4% 55.8 % 11.6 % 15.7 % Concur 93.34 5,309 5,177 797 664 14.7 % (5.8)% 8.2 x 6.8 x 46.2 x 38.7 x 126.6 x 119.5 x 21.8% 19.4% 5.9% 67.4 % 17.8 % 6.6 % Intuit 80.53 22,861 20,727 2,633 499 31.9 % 3.6 % 4.7 x 4.3 x 12.0 x 10.7 x 23.1 x 21.0 x 8.0% 11.9% 10.1% 86.6 % 39.1 % 23.2 % NetSuite 86.88 6,585 6,388 465 268 (5.3)% (8.4)% 14.3 x 11.0 x 150.2 x 122.8 x NA NA 29.7% 22.4% NA 67.7 % 9.5 % 4.7 % Tangoe 15.06 583 538 46 2 (2.4)% (19.0)% 2.8 x 2.3 x 17.9 x 13.6 x 23.2 x 17.6 x 18.4% 31.8% 31.6% 54.8 % 15.5 % 13.4 % Xero 22.76 2,885 2,703 182 0 82.1 % (33.4)% 43.7 x 24.8 x NA NA NA NA 75.9% (42.0)% (50.2)% 65.6 % (44.9)% (46.4)% M ean 6,567 6,105 725 263 23.2 % (13.0)% 12.9 x 8.8 x 52.0 x 40.3 x 49.3 x 44.6 x 28.2% 26.4% 3.6% 66.3 % 8.1 % 2.9 % M edian 4,097 3,940 345 207 16.5 % (11.6)% 6.5 x 5.6 x 33.4 x 15.5 x 23.8 x 20.7 x 20.1% 20.9% 10.1% 66.5 % 13.5 % 10.0 % *Sorted alphabetically within market segment
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 57 Investment Banking Advisors 57 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 6/ 30/ 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
Human Resources Benefitfocus 46.22 1,160 1,110 75 24 NA (1.6)% 9.9 x 7.8 x NA NA NA NA 27.0% (103.9)% 16.0% 38.0 % (22.6)% (41.7)% Callidus 11.94 549 534 34 19 81.2 % (4.6)% 4.5 x 4.0 x 36.1 x 38.2 x NA 75.0 x 14.4% (5.6)% NA 59.7 % 12.6 % 4.2 % Cornerstone 46.02 2,446 2,374 293 221 6.3 % (3.9)% 11.6 x 8.1 x NA NA NA NA 43.4% NA 21.0% 70.9 % 0.7 % (6.1)% Freelancer 0.89 388 366 22 0 NA (35.8)% 21.8 x 14.9 x NA NA NA NA 46.7% NA NA 87.6 % 0.9 % 3.6 % Halogen 7.62 166 114 52 0 (48.8)% (13.7)% 2.3 x 1.9 x NA NA NA NA 20.6% (96.4)% (16.7)% 74.6 % (6.6)% (15.4)% Paycom 14.59 745 818 13 87 NA NA 7.0 x 5.4 x 45.7 x 35.3 x 13.5 x 71.9 x 28.6% 29.6% (81.2)% 82.1 % 15.3 % 48.8 % Personal & Informatik 91.07 686 666 20 0 89.8 % 1.3 % 7.3 x NA 20.5 x NA 32.5 x NA NA NA NA 69.3 % 35.4 % 23.1 % Saba 11.25 335 321 15 1 15.4 % (7.4)% 17.5 x 2.3 x NA NA NA NA 676.1% 265.6% 87.5% 62.9 % (9.7)% (24.8)% Solium 7.29 345 305 39 0 52.5 % 17.0 % 4.7 x 3.9 x 16.8 x 15.0 x 36.1 x 40.5 x 20.4% 12.6% (11.0)% 45.2 % 27.9 % 14.6 % WageWorks 48.21 1,692 1,369 353 29 39.9 % (14.1)% 6.1 x 5.5 x 22.5 x 19.7 x 60.3 x 53.9 x 9.6% 14.3% 11.9% 62.8 % 26.9 % 12.7 % Workday 89.86 16,624 15,242 1,866 484 40.2 % (1.7)% 28.4 x 18.5 x NA NA NA NA 53.1% 20.2% (3.7)% 63.2 % (8.3)% (16.6)% M ean 2,285 2,111 253 79 34.6 % (6.5)% 11.0 x 7.2 x 28.3 x 27.0 x 35.6 x 60.3 x 94.0% 17.0% 3.0% 65.1 % 6.6 % 0.2 % M edian 686 666 39 19 40.1 % (4.2)% 7.3 x 5.5 x 22.5 x 27.5 x 34.3 x 62.9 x 27.8% 13.5% 4.1% 63.2 % 0.9 % 3.6 %
Licensed Software Leaders IBM 181.27 183,478 217,766 9,704 43,992 (5.1)% (5.8)% 2.2 x 2.2 x 8.3 x 7.6 x 10.9 x 9.9 x (1.3)% 9.4% 10.8% 49.0 % 26.5 % 18.1 % Microsoft 41.70 344,459 280,267 87,674 23,482 20.7 % 1.7 % 3.4 x 2.8 x 8.6 x 8.7 x 15.2 x 15.2 x 20.4% (1.3)% 0.1% 70.1 % 39.2 % 27.7 % Oracle 40.53 180,557 165,905 38,827 24,175 32.0 % (0.9)% 4.3 x 4.1 x 8.9 x 8.0 x 14.1 x 12.8 x 5.0% 10.4% 9.5% 81.1 % 48.9 % 34.6 % SAP 77.55 92,562 92,150 6,330 5,918 6.2 % (4.4)% 4.0 x 3.8 x 10.5 x 10.2 x 17.1 x 16.2 x 3.3% 3.4% 5.2% 72.5 % 37.7 % 23.3 % M ean 200,264 189,022 35,634 24,392 13.4 % (2.3)% 3.5 x 3.2 x 9.1 x 8.6 x 14.3 x 13.5 x 6.8% 5.5% 6.4% 68.2 % 38.1 % 25.9 % M edian 182,018 191,836 24,266 23,829 13.4 % (2.6)% 3.7 x 3.3 x 8.7 x 8.4 x 14.6 x 14.0 x 4.1% 6.4% 7.4% 71.3 % 38.5 % 25.5 %
*Sorted alphabetically within market segment
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 58 Investment Banking Advisors 58 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 6/ 30/ 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 arketing & Advertising Adobe 72.36 35,990 34,166 3,330 1,506 58.8 % 10.1 % 8.3 x 7.7 x 31.3 x 26.4 x 55.2 x 49.4 x 7.8% 18.6% 11.7% 85.4 % 26.6 % 16.3 % Bazaarvoice 7.89 613 567 73 27 (16.3)% 8.1 % 3.4 x 3.0 x NA NA NA NA 11.8% 1.2% (23.6)% 68.5 % (9.0)% (11.7)% Callidus 11.94 549 534 34 19 81.2 % (4.6)% 4.5 x 4.0 x 36.1 x 38.2 x NA 75.0 x 14.4% (5.6)% NA 59.7 % 12.6 % 4.2 % Constant Contact 32.11 1,008 877 131 0 99.8 % 31.3 % 3.0 x 2.6 x 17.5 x 13.7 x 36.9 x 29.8 x 15.4% 27.6% 24.0% 71.8 % 17.0 % 9.3 % Conversant 25.40 1,702 1,671 90 60 2.8 % (9.8)% 2.9 x 2.7 x 7.4 x 7.8 x 15.4 x 14.3 x 7.2% (4.9)% 7.7% 67.8 % 38.8 % 20.3 % Criteo 33.77 1,948 1,630 333 15 NA (16.7)% 2.4 x 1.6 x NA 20.1 x NA NA 43.5% 62.1% NA 35.9 % 7.2 % 2.2 % Google 584.67 391,190 342,310 57,276 8,396 32.8 % 4.9 % 5.5 x 5.1 x 15.4 x 12.4 x 26.1 x 21.0 x 8.4% 23.6% 24.4% 57.2 % 35.7 % 24.5 % Jive Softw are 8.51 599 493 114 8 (53.2)% 6.2 % 3.2 x 2.7 x NA NA NA NA 18.4% 38.9% 23.8% 62.3 % (12.3)% (22.3)% Marchex 12.02 509 470 39 0 99.7 % 14.4 % 2.8 x 2.5 x 33.4 x 32.4 x NA NA 10.9% 3.1% NA 38.2 % 8.4 % 3.8 % Marin Softw are 11.77 397 306 96 5 14.9 % 11.4 % 3.7 x 3.0 x NA NA NA NA 22.6% 11.7% 6.7% 61.3 % (28.8)% (35.9)% Marketo 29.08 1,177 1,065 120 7 16.9 % (11.0)% 9.8 x 7.1 x NA NA NA NA 39.0% (16.9)% 13.3% 62.6 % (26.9)% (36.4)% Millennial Media 4.99 534 436 98 0 (42.7)% (27.9)% 1.5 x 1.3 x NA NA NA NA 16.2% NA NA 40.3 % 1.8 % (2.9)% Nasmedia 16.31 134 101 34 0 NA 0.5 % 4.3 x 3.4 x 14.4 x 11.6 x 32.7 x 17.5 x 25.6% 23.6% 87.1% NA 29.9 % 17.6 % Rocket Fuel 31.09 1,093 904 218 29 NA (27.5)% 3.3 x 1.9 x NA NA NA NA 69.2% NA NA 48.6 % (0.3)% (3.9)% Rubicon Project 12.84 460 440 24 4 NA NA 4.9 x 3.6 x NA NA NA NA 35.3% NA 37.8% 81.8 % 0.6 % (29.8)% salesforce.com 58.08 35,661 37,075 879 2,293 52.1 % 1.7 % 8.4 x 6.6 x 57.9 x 37.4 x NA 106.1 x 28.3% 54.6% NA 76.1 % 14.5 % 4.9 % Sizmek 9.53 290 207 83 0 NA (10.3)% 1.2 x 1.1 x 16.3 x 8.0 x NA NA 15.1% 103.1% NA 66.0 % 7.7 % (20.8)% TechTarget 8.82 288 260 29 0 97.3 % 22.3 % 2.8 x 2.5 x 21.2 x 15.8 x 63.0 x 20.0 x 13.0% 34.1% 214.3% 70.4 % 13.4 % 5.5 % Yahoo! 35.13 35,369 33,596 2,940 1,166 39.8 % (2.1)% 7.2 x 7.4 x 22.6 x 24.5 x 23.0 x 20.9 x (3.4)% (7.6)% 9.9% 71.5 % 31.8 % 34.4 % M ean 26,816 24,058 3,471 712 34.6 % 0.0 % 4.4 x 3.7 x 24.8 x 20.7 x 36.0 x 39.3 x 21.0% 22.9% 36.4% 62.5 % 8.9 % (1.1)% M edian 613 567 98 8 36.3 % 1.1 % 3.4 x 3.0 x 21.2 x 17.9 x 32.7 x 21.0 x 15.4% 21.1% 18.5% 64.3 % 8.4 % 3.8 %
*Sorted alphabetically within market segment
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 59 Investment Banking Advisors 59 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 6/ 30/ 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
Vertical M arket ACI Worldw ide 18.61 2,117 2,844 59 785 20.1 % (5.7)% 3.1 x 2.6 x 11.4 x 9.4 x 27.5 x 22.0 x 17.4% 21.4% 25.3% 57.8 % 26.9 % 8.7 % Advent 32.57 1,676 1,926 45 295 (7.1)% 10.9 % 5.0 x 4.8 x 15.7 x 14.0 x 24.5 x 22.7 x 4.5% 11.6% 7.7% 71.3 % 31.8 % 18.4 % Athenahealth 125.13 4,735 4,830 126 220 47.7 % (21.9)% 7.6 x 6.2 x 39.7 x 35.5 x 139.0 x 114.3 x 24.1% 11.9% 21.7% 59.3 % 19.2 % 5.3 % Blackbaud 35.74 1,613 1,754 33 173 9.7 % 14.2 % 3.4 x 3.2 x 13.3 x 14.7 x 28.4 x 30.2 x 7.6% (9.2)% (6.1)% 53.0 % 25.5 % 11.1 % BSM 2.25 106 85 26 5 38.7 % 3.4 % 3.9 x 2.7 x 20.2 x 12.4 x 61.5 x 16.6 x 42.7% 62.4% 271.5% 60.5 % 19.1 % 6.2 % Castlight Health 15.20 1,360 1,141 219 0 NA (28.4)% 58.7 x 24.0 x NA NA NA NA 144.6% (7.9)% 78.6% (6.1)% (344.7)% (1516.4)% Cvent 29.09 1,198 996 202 0 NA (19.5)% 8.4 x 6.7 x 65.3 x 63.0 x NA NA 25.0% 3.7% NA 70.0 % 12.9 % 3.7 % Dealertrack 45.34 2,429 3,030 149 750 28.0 % (7.8)% 5.7 x 3.4 x 24.4 x 15.8 x 36.0 x 29.3 x 68.6% 54.6% 22.9% 39.9 % 23.3 % 10.6 % Descartes 14.34 915 892 62 39 24.8 % 2.4 % 5.6 x 5.0 x 19.3 x 16.6 x 22.3 x 21.3 x 12.2% 16.1% 4.9% 67.3 % 29.2 % 26.2 % Ebix 14.31 549 545 59 54 54.5 % (16.2)% 2.7 x 2.6 x 6.5 x 6.4 x 9.0 x 9.0 x 3.8% 1.6% (0.1)% 80.3 % 41.1 % 30.2 % Ellie Mae 31.13 875 800 75 1 34.9 % 7.9 % 6.2 x 5.0 x 22.6 x 17.0 x 35.4 x 28.2 x 23.7% 32.6% 25.5% 73.5 % 27.3 % 19.5 % Envestnet 48.92 1,666 1,613 53 0 98.9 % 21.8 % 5.9 x 4.6 x 38.3 x 28.0 x 82.9 x 62.5 x 28.0% 36.6% 32.7% 27.0 % 15.4 % 7.8 % Fleetmatics 32.34 1,213 1,089 148 24 (2.7)% (3.3)% 5.7 x 4.5 x 18.4 x 16.5 x 35.9 x 35.9 x 27.0% 11.6% 0.0% 75.6 % 31.0 % 17.8 % GameAccount 1.75 97 69 28 0 NA (24.9)% 3.4 x 2.6 x 10.3 x 13.5 x NA NA 29.7% (23.7)% NA 100.0 % 33.1 % 9.0 % GrubHub 35.41 2,790 2,678 113 0 NA NA 15.8 x 11.0 x 67.8 x 41.0 x 207.9 x 104.7 x 43.8% 65.5% 98.5% 74.5 % 23.2 % 6.5 % Higher One 3.81 180 272 11 103 (67.3)% (47.3)% 1.2 x 1.1 x 4.6 x 4.5 x 6.4 x 5.7 x 8.7% 1.6% 10.6% 57.3 % 26.7 % 13.2 % IDOX 0.75 266 298 5 37 27.5 % 17.0 % 3.2 x 2.9 x 14.2 x 10.6 x 15.2 x 15.7 x 12.8% 33.5% (3.5)% 90.8 % 22.9 % 19.4 % JUST EAT 4.36 2,463 2,361 102 0 NA NA 14.7 x 9.8 x 125.3 x 50.6 x NA NA 50.1% 147.5% NA 89.7 % 11.8 % 7.2 % Linx 23.49 1,094 963 152 20 44.6 % 18.8 % 6.9 x 5.7 x 26.4 x 20.0 x 39.8 x 30.8 x 21.3% 31.7% 29.2% 72.0 % 26.2 % 20.8 % Medidata Solutions 42.81 2,316 2,327 222 232 10.5 % (21.2)% 8.0 x 6.5 x 35.5 x NA 59.5 x 52.8 x 23.9% NA 12.5% 74.6 % 22.6 % 13.4 % Mix Telematics 0.41 324 248 79 3 17.2 % (5.5)% 2.1 x 1.9 x 9.0 x 8.8 x 18.6 x 19.5 x 9.1% 2.6% (4.8)% 66.8 % 22.8 % 14.1 % NIC 15.85 1,034 952 82 0 (4.1)% (17.9)% 3.8 x 3.5 x 15.6 x 12.7 x 33.7 x 26.7 x 7.4% 23.2% 26.2% 42.5 % 24.0 % 12.1 % OpenTable 103.60 2,441 2,324 118 0 62.0 % 34.7 % 11.7 x 9.8 x 27.9 x 25.2 x 50.8 x 51.4 x 19.0% 10.5% (1.2)% 74.2 % 42.0 % 24.6 % OPOWER 18.85 926 903 25 2 NA NA 9.2 x 7.2 x NA NA NA NA 26.9% (110.6)% (78.1)% 66.1 % (13.7)% (18.3)% Playtech 10.54 3,095 2,360 734 0 15.2 % (6.5)% 4.7 x 4.1 x 12.4 x 9.6 x 7.4 x 14.3 x 12.8% 28.5% (48.3)% 100.0 % 37.8 % 83.6 % Q2 Holdings 14.26 486 407 87 7 NA (8.2)% 6.7 x 5.1 x NA NA NA NA 31.8% (5.6)% 38.1% 38.3 % (22.5)% (38.6)% Qtone 11.47 1,115 1,075 40 0 NA 135.6 % 38.1 x 31.7 x 180.2 x 98.5 x 207.0 x 135.4 x 20.2% 83.0% 52.8% 50.7 % 21.2 % 18.0 % RealPage 22.48 1,771 1,729 42 0 22.6 % 23.8 % 4.4 x 3.8 x 18.4 x 15.4 x 36.3 x 31.7 x 18.6% 19.0% 14.3% 60.7 % 24.2 % 12.2 % Sabre 20.05 5,304 8,736 286 3,718 NA NA 2.9 x 2.9 x 13.9 x 9.9 x NA 20.7 x (0.5)% 40.1% NA 36.8 % 20.7 % (0.6)% Solera 67.15 4,620 5,583 745 1,708 20.7 % 6.0 % 6.0 x 5.1 x 14.3 x 12.0 x 24.6 x 20.6 x 17.7% 19.8% 19.4% 68.4 % 41.5 % 20.1 % SS&C 44.22 3,666 4,318 78 730 34.4 % 10.5 % 6.0 x 5.5 x 14.4 x 13.2 x 21.2 x 18.8 x 7.9% 9.4% 12.5% 45.8 % 41.3 % 24.9 % Temenos 38.95 2,636 2,733 220 316 59.6 % 10.7 % 5.8 x 5.2 x 16.7 x 15.8 x 30.0 x NA 9.9% 5.6% NA 71.2 % 34.5 % 18.8 % Textura 23.64 588 517 73 1 (9.1)% (6.2)% 9.7 x 7.7 x NA NA NA NA 25.4% 72.7% 85.1% 77.3 % (33.3)% (70.7)% TrueCar 14.78 1,050 1,012 43 5 NA NA 6.6 x 5.0 x NA NA NA NA 33.1% 135.5% 88.1% 90.0 % (14.9)% (20.7)% M ean 1,727 1,865 134 272 24.2 % 2.7 % 8.6 x 6.3 x 31.1 x 21.8 x 50.4 x 37.6 x 25.3% 25.4% 28.8% 64.0 % 10.3 % (34.8)% M edian 1,286 1,115 79 6 23.7 % (3.3)% 5.8 x 5.0 x 18.4 x 15.1 x 33.7 x 26.7 x 20.7% 19.0% 19.4% 67.8 % 23.7 % 12.1 %
*Sorted alphabetically within market segment
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 60 Investment Banking Advisors 60 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 61 Investment Banking Advisors WORLD CLASS WALL STREET EXPERTISE.61 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 62 Investment Banking Advisors 62 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 63 Investment Banking Advisors 63 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.
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 64 Investment Banking Advisors 64