Teradek, an Irvine, California-Based Leader in Wireless Video Technology, Was Acquired by UK-Based the Vitec Group Plc for $30.4 Million
2016 To Our Colleagues and Friends at IBC 2016
MediaBridge Capital Advisors is pleased to be attending IBC 2016. MediaBridge Co-founders and Managing Partners Ethan Jacks and John Bowen, and Industry Executive Advisors Graham Sharp and Courtney Spencer, in addition to Strategic Advisors Tom Ohanian (Cisco Systems), Jeff Allen (formerly Clearleap/IBM), and Rob Levy will be in attendance throughout the Show. We look forward to meeting with our colleagues and partners in all market segments of the industry, discussing your strategic growth plans and options, and sharing our perspective on our recent transactions and the M&A and corporate finance activities in the industry.
Ethan E. Jacks John C. Bowen Managing Partner Managing Partner [email protected] [email protected] 617.592.2739 (m) 617.921.0075 (m)
2 MediaBridge has been busy… … advising seven top-tier media technology companies over the last three years in both M&A and capital-raising transactions: Ultimatte, the industry standard chroma key/matting technology for broadcast and virtual Production Suites, in its acquisition by Blackmagic Design. Final Draft, the maker of the industry-standard Final Draft scriptwriting software for the film, television and other media industries, in its acquisition by Cast & Crew, a Silver Lake Partners portfolio company. Minnetonka Audio Software, the recognized world leader in audio processing solutions for the professional marketplace, was acquired by The Telos Alliance. SVSi, the leader in IP-based Networked AV distribution and switching solutions, was acquired by Harman International. Pebble Beach Systems, with its advanced automation and channel-in-a-box products, was acquired by Vislink plc for $24.7 million. X2O Media, known for its HTML-5-based platform for advanced visual communications, was acquired by Barco, a global manufacturer of visual systems, for C$21 million. Teradek, an Irvine, California-based leader in wireless video technology, was acquired by UK-based The Vitec Group plc for $30.4 million. iZotope, a leader in music and audio software based in Cambridge, Mass., received $12 million in growth capital from investor ABS Capital Partners, a top private equity firm based in Baltimore, Md.
3 MediaBridge Co-Founders and Managing Partners
Our principals have advised on more than 40 mergers and acquisitions in the media sector worldwide. Leading the team are Ethan Jacks and John Bowen, who together have more than 50 years of experience in media technology with unmatched expertise in the film, video, audio, broadcast, Internet, and new media markets.
• 30+ years experience as investment banker, corporate executive, and corporate lawyer • Co-founded MediaBridge with John Bowen in 2012 • Served as Avid Technology senior executive (EVP Corp Development, CLO, CFO) from 1999 to 2006. Led Avid during its most significant period of growth. Managed 12 strategic acquisitions, doubling the company’s revenue to $1 billion and growing market cap from $400 million to $2.5 billion • Co-founded an environmental technology company in the mid 90s, which achieved a public market cap of over $1 billion Ethan Jacks • BS from MIT and MBA from MIT Sloan School of Management; JD, Georgetown University Law Center
• 30+ years of investment banking, equity research, and operational IT experience • Prior to co-founding MediaBridge, led Covington Associates expansion into the digital media and technology sectors, representing both privately held and publicly traded companies • VP Equity Research at First Albany Corporation covering digital media technology, networking hardware and software, and enterprise software companies. Previously employed at Sybase, McDonnell Douglas, and Digital Equipment Corp. • Author of three significant industry research reports on media technology and CDN markets John Bowen • 15 years of experience in traditional and new-media technology, and an additional 15 years of IT industry experience • BS in Mechanical Engineering with Digital Systems concentration from University of New Hampshire; MBA from Babson College
4 Industry Executive Advisors
• 25+ years of executive management experience in the media industry, most recently at The Vitec Group plc • Board member of Media Asset Capital, a UK based full-service media consultancy, and AV3, a Web distribution channel • Former EVP and GM of Avid’s video division, a $470 million business with 1,500 employees • Executive management positions with Grass Valley Group, XtraNormal, Discreet Logic, and Dynatech Graham Sharp
• President of CRX Partners, a media technology business development consultancy • CRX and MediaBridge work to provide the best combination of strategic and transaction expertise to the professional and consumer audio/video markets • 30+ years of executive experience in professional, broadcast, and commercial audio • Senior VP Business & Professional Group Americas (Allen & Heath, Calrec, D&M Pro), D&M Holdings Courtney Spencer • Full-time consultant, D&M Holdings (M&A and post acquisition integration focus) • VP/GM, Professional Audio, Sony Broadcast & Professional
5 Strategic Advisors
• 30+ years of experience in the media industry • Current member of the digital media strategy team as Cisco Systems • Former corporate fellow and member of founding team at Avid Technology • Former chief strategy officer at Signiant • Academy Award and two-time Emmy Award recipient for scientific and technical invention Tom Ohanian
• 20+ years leading start-ups and public companies, launching innovative cloud, SaaS, consumer electronics and consumer-facing businesses. He has worked closely with Accenture, Microsoft, Samsung, Best Buy, ESPN, Amazon, Adobe and IBM, among others. Jeff’s leadership and strategy experience includes managing all aspects of marketing, product management, corporate development/M&A and finance. • As VP of Business Development at Clearleap, Jeff helped lead the sale of Clearleap to IBM in December 2015, forming the core of IBM’s new video cloud business unit. Jeff Allen • Jeff is an expert in scalable architectures and cloud-based UX, and specializes in the application of sensors, video, and animation technologies to media and entertainment, finance and telco industries.
• 10+ years experience in the film and television industry, including Artist Management Group, Warner Brothers, and Untitled Entertainment. • President of InterMedia Entertainment, which published the IME Star Index, a research tool designed to assist advertisers in selecting and optimizing celebrity-driven advertising campaigns. • Launched the branded entertainment division of Untitled Entertainment in 2007 and ran the division successfully through 2012. • Board of Advisors of Source Digital, a big data and interactive entertainment technology platform Rob Levy • Started career in investment banking in Los Angeles at Houlihan, Lokey, Howard & Zukin.
6 Strategic Advisors
• 15+ years experience building new businesses in digital media, with a focus on content creation, production, and distribution • Head of Media & Entertainment at Box.com • Former chief strategy officer of Final Draft Inc., the world leader in script-writing software • Former executive at Secure Path Technology, an enterprise cloud-based metadata company • Co-founder and former CEO of Sample Digital Inc., where he oversaw development of Emmy Award-winning Digital Josh Kline Dailies solution
• CEO of OpenDrives, where he is responsible for day-to-day operations and leads product development and technology strategy • 20-year veteran of the media and technology industry with executive positions held at EMC's Media & Entertainment practice in the Cloud Infrastructure Group, Echostar, and SecurePath Technology. Also built the digital media divisions of two high profile postproduction companies. • Began as an investment banker providing M&A advisory services to companies in the technology, gaming, and publishing industries Chad Knowles • Author of published works for the Motion Picture Association
• 25+ years working in film, television, media technology, and entertainment. • Starting as an assistant to legendary Hollywood producer, Edgar J. Scherick (Take the Money and Run, The Heartbreak Kid, The Stepford Wives), he went on to become a writer-director-producer, editor, and media technologist. • Larry was the founder/co-owner of PostWorks, New York's largest post production company, and was a trailblazer in the development of portable, location-based digital post-production systems. Lawrence Blume • Directed two television dramas; Martin & Orloff (Comedy Central - 2002) for which he was named one of the "Ten Rising Stars of Comedy" by the Hollywood Reporter, and Tiger Eyes (Lifetime - 2013), which won numerous awards and is currently in release around the world. • He has worked as a production/distribution consultant on many independent feature and documentary films and has lectured extensively on HDTV, Digital Cinema, and the convergence of television and the internet.
7 Strategic Advisors
• 20+ years experience in business development, strategic planning, M&A, IPO, private equity, and international operations • Former partner at North Bridge Ventures, covering communications, wireless, and software • Former senior executive at Shiva Corporation, contributing to a successful IPO, several acquisitions, and a rapid growth phase • Adjunct lecturer at Babson College and former senior lecturer at MIT Sloan • Graduate of Fordham University with an MBA from Harvard Business School Angelo Santinelli
• 20+ years in the entertainment industry including award-winning work as an editor, producer, and director • Director of digital media and technology at the University of Southern California’s School of Cinematic Arts • Worked on numerous feature films including the Academy Award-winning Harlan County, U.S.A. (1976), Arthur (1981), and Visions of Light (1992)
Meri Weingarten • EVP and CFO of BCS Solutions Inc., a leading Southern California-based vendor of supply chain automation solutions incorporating RFID and other wireless-based network architectures • Served as the COO and CFO of several major venture capital and private equity-backed companies in technology, retail, and manufacturing • From 2002 to 2007, served as CFO of M-Audio, a pioneer and leader in MIDI-based music and audio products, where he led the sale of M-Audio to Avid Technology for $231 million Scot Ross • Graduate of USC • Strategic advisor specializing in the evolution of the global IT market • CEO of UK-based IT security leader Corero Network Security • Co-founded or lead several technology companies as chairman or CEO, including Reva Systems (acquired by ODIN) and Xedia Corporation (acquired by Lucent) • Awarded “CEO of the Year” by Massachusetts Telecommunications Council Ashley Stephenson • Graduate of Imperial College, London, and an Associate of the Royal College of Science
8 Representative Transactions
Undisclosed Undisclosed Undisclosed 2016 2016 2016
Transaction closed during employment with: * Covington Associates; ** Silverwood Partners; *** Avid Technology
9 Representative Transactions
Transaction closed during employment with: * Covington Associates; ** Silverwood Partners; *** Avid Technology
10 Blackmagic Design Acquires Ultimatte
• MediaBridge Capital Advisors served as exclusive investment banking advisor to Ultimatte Corp, in connection with its acquisition in September 2016 by Blackmagic Design Pty. Ltd., a leading innovator and manufacturer of creative video technology.
• Based in Los Angeles, CA, Ultimatte pioneered the use of blue screen and green screen technology, and the brand is the “industry standard” in matting technology and keyers, having earned three Oscars and an Emmy for their work. No other manufacturer has been able to acquired by replicate similar quality.
• “Its hard to emphasize the importance of Petro and Paul Vlahos’ inventions. Those inventions made a whole genre of film possible — a genre that seems to make more money than any Undisclosed other. They created the whole of composite photography as we know it. 2016 - Bill Taylor, VFX Supervisor
“We could not have gotten through this without the MediaBridge team. Even our attorney commented that he has never seen financial advisors so involved before.
The quality of support MediaBridge provided was unbelievable. From Ethan’s determination over the years to find us the right buyer, to John’s contacts in the industry, and to Rob’s willingness to be at my beck and call, I am truly impressed.”
Lynne Sauve, President of Ultimatte
11 Cast & Crew Entertainment Services Acquires Final Draft
• MediaBridge Capital Advisors served as exclusive investment banking advisor to Final Draft, Inc. in connection with its acquisition in February 2016 by Cast & Crew, a portfolio company of Silver Lake Partners, a leading technology-focused private equity firm.
• Based in Calabasas, CA, Final Draft is the undisputed industry standard and clear market acquired by leader of screenwriting software.
• A trusted partner to major and independent film and television studios, Cast & Crew provides
its clients with a robust portfolio of critical services. These include payroll and residuals Undisclosed processing, the industry-leading PSL production accounting system and other software, as 2016 well as financial services.
“MediaBridge was an integral part of our team, and with us every step of the way during an accelerated acquisition process. We are deeply appreciative of their efforts in finding a great acquisition partner and completing this successful transaction.”
Marc Madnick, CEO and Founder of Final Draft
“This acquisition is an excellent example of a highly-strategic transaction in the professional media services sector, where two top-tier solution providers have combined to uniquely address essential customer and industry requirements.”
Ethan Jacks, co-founder and Managing Partner of MediaBridge Capital Advisors.
12 The Telos Alliance Acquires Minnetonka Audio Software
• MediaBridge Capital Advisors served as exclusive investment banking advisor to Minnetonka Audio Software, Inc. (“MASI”) in connection with its acquisition in September 2015 by The Telos Alliance.
• Based in Minnetonka, MN, MASI is a recognized world leader in audio processing solutions for the professional marketplace, with a 20-year history in professional acquired by audio services and software application development.
• The Telos Alliance is a global leader in the research, development, and Undisclosed manufacturing of IP Audio, telephony, and high-performance audio processing 2015 equipment for broadcasters. Telos Alliance brands include Telos, Omnia, 25-Seven, Axia, and Linear Acoustic.
“MediaBridge’s industry connections and expertise in all aspects of the transaction, particularly multi-party negotiations, contract knowledge and closing execution, was critical.”
John Schur, President and Founder, MASI
“This acquisition demonstrates the importance of software and cloud-architected solutions in today’s media markets that enable the delivery of powerful and flexible solutions to customers.”
Ethan Jacks, co-founder and Managing Partner of MediaBridge Capital Advisors
13 Harman Acquires SVSi
• MediaBridge Capital Advisors served as exclusive investment banking advisor to Southern Vision Systems, Inc. (“SVSi”) in connection with its acquisition in June 2015 by Harman.
• Based in Huntsville, AL and founded in 2004, SVSi is the recognized leader in next- generation IP-based media distribution and matrix switching solutions for the ProAV acquiredacquired by by industry.
• Harman is a global technology business leader specializing in high-quality video and audio systems to professional, automotive, and home markets. Harman Professional companies include AMX, AKG Acoustics®, BSS Audio®, Crown International®, dbx Professional®, JBL Undisclosed Professional®, Lexicon Pro®, Soundcraft®, and Studer®. The company's stock is traded on 2015 the New York Stock Exchange under the symbol: HAR.
“The MediaBridge team supported us through every step of the acquisition process, and we are deeply appreciative of their efforts in completing the transaction.”
Andy Whitehead, President and Founder, SVSi
“This acquisition is another example of the new dynamic in today’s media markets: a move toward standardized IP-based technologies that enable vendors to evolve and adapt more quickly to changing customer and business requirements.”
John Bowen, co-founder and Managing Partner of MediaBridge Capital Advisors
14 Vislink Acquires Pebble Beach Systems for $25 Million
• MediaBridge Capital Advisors served as exclusive investment banking advisor to Pebble Beach Systems Ltd in connection with its acquisition in March 2014 by Vislink plc. • Based in Weybridge, Surrey, UK, and founded in 2000, Pebble Beach Systems is a leading developer and supplier of automation, channel-in-a-box, and content management solutions for TV broadcasters, cable, and satellite operators. • Vislink plc is a global technology business leader specializing in high-performance wireless communications products and services for the broadcast, defense, and security markets.
“MediaBridge has been advising us for several years to secure the best strategic partner for our next stage of growth. With its fantastic global tier-1 client base in the broadcast sector, Vislink offers us an ideal platform for accelerated growth and expansion of our software solutions. MediaBridge was integral to this successful outcome.”
Peter Hajittofi, Co-Founder and Managing Dir., Pebble Beach Systems
15 Barco Acquires X2O Media for C$21 Million
• MediaBridge Capital Advisors served as exclusive investment banking advisor to X2O Media in connection with its acquisition in March 2014 by Barco NV. • Based in Montreal, Canada, X2O was established in 2006 as a spin-off from VertigoXmedia, a Montreal-based company with strong expertise in the field of broadcast graphics automation. X2O’s innovative platform enables the connection, management, and delivery of real-time data through dynamic and interactive channels, from any source to any screen, anywhere. • Barco, a global technology company, designs and develops visualization products for a variety of selected professional markets. Barco is active in more than 90 countries with 4,000 employees worldwide and sales of €1.158 billion in 2013. “X2O Media perfectly complements our offering and skills portfolio, and is an important step in our strategy to expand our portfolio beyond video and imaging. Customers’ expectations regarding workflow and content management shift to end-to-end and easy-to-use visualization systems and cloud- based solutions. X2O Media’s platform will play a crucial role in allowing Barco to tap into these new opportunities while differentiating itself further from competition.”
Eric Van Zele, CEO, Barco
“The MediaBridge team was with us every step of the way in our acquisition process with Barco,” said David Wilkins, founder and CEO of X2O Media. “MediaBridge’s expertise in all aspects of the transaction, particularly the transaction structure and closing execution, was superb. We are delighted to be joining the Barco family, and we are deeply appreciative of the effort from the MediaBridge team in completing the deal on excellent terms.”
David Wilkins, CEO, X2O Media
16 Vitec Group Acquires Teradek for $30 Million
• MediaBridge Capital Advisors served as exclusive investment banking advisor to Teradek LLC in connection with its acquisition in August 2013 by The Vitec Group plc. • Teradek is a world leader in wireless video devices and platforms used by broadcasters, filmmakers, businesses, and Web channels to wirelessly transmit high-quality images. Its products are used in live electronic news gathering, real-time monitoring and recording, aerial visual capture, and webcasting. • The Vitec Group plc is a leading international provider of products and services for the broadcast, photographic, and military-aerospace-government markets. The acquisition will not only strengthen Vitec's product offerings – particularly to the growing number of independent videographers and business users – but will complement Vitec's existing video activities, including its range of broadcast microwave systems, and allow Teradek's products to be sold through Vitec's global sales and distributor network.
“This represents a major step forward for Teradek, which I believe will expand our reach, fuel our continued growth, and enhance our focus on product innovation. We will undoubtedly benefit from the resources and reach of Vitec Videocom and will embrace the opportunity to work alongside some of its other market-leading brands.”
Nicol Verheem, CEO and Co-Founder, Teradek
17 iZotope Receives $12 Million Investment from ABS Capital
• MediaBridge Capital Advisors served as exclusive investment banking advisor to iZotope Inc. in connection with a $12 million investment from ABS Capital Partners, which closed in August 2013. • Leading audio technology company iZotope will use the funds to develop new products, expand its markets, and increase sales and marketing efforts. With over $2 billion raised since inception, ABS Capital Partners has invested in over 100 growth companies over the past two decades. • iZotope creates professional audio products for the music, entertainment, and education industries. Its product portfolio is comprised of solutions for audio creation, repair, mixing and mastering. iZotope’s clients include musical giants such as Depeche Mode, Garbage, Skrillex, and Wu-Tang Clan; and radio stations and TV programming such as CBS' “Survivor,” the Discovery Channel’s “Deadliest Catch,” the World Cup broadcast, and the Grammy Awards. iZotope technology is also directly integrated into products made by industry leaders such as Adobe, Avid, and Sony; video games from companies like Microsoft, Harmonix, and Ubisoft; and a growing number of mobile phone applications.
“iZotope is a company driven by a wealth of creative brainpower. Coupled with our position as a market leader, this funding will enable us to realize more of our creative vision, accelerating innovation and new products for our loyal customer base.”
Mark Ethier, CEO and Co-Founder, iZotope
18 Industry Trends The Media and Entertainment Environment Unprecedented Disruption Macro Environment
Generation disconnect Industry Cord cutting in consuming media impacting cable Environment revenues World Wide Network Ad spending build out continues at Media owners having to migrating to the pace compete harder for web Fragmented standards funding $’s Produce more content around IP for less
Computer processing Cloud & IP confusing Internal ATSC 3.0 around Linear TV and OTT are Increase Flexibility fast enough for real Broadcast customers Environment the corner complimentary, not time media files Software-defined competitors Architectures Increase Efficiency Suppliers Transformation Customers Inputs Outputs Storage becoming fast, Process Support IP platforms cheap and everywhere Virtualize Reduce Costs Lack of IT Skills for delivery to 5G mobile coming and Thinking Traditional Workflows multiple formats Mobile and Union Issues consumption The Cloud performance exploding ‘good enough’ for media IT skills thinking not Outsourcing to reduce cost always conducive to and increase flexibility 24/7 Broadcasting More content Huge advances in Competitors being consumed wireless technology Telco’s trying to add New entrants, such as value to their Netflix, YouTube and connectivity Amazon
20 The future for Broadcasters and Content Owners….
. Advertising revenue is fragmenting across linear, digital and social channels, so its all about efficiency, reducing costs, agility and quickly repurposing media. . Broadcasting and Content owners need an efficient Content Factory and Distribution System
US Media Company CTO’s have commented over the last year: “By taking a holistic view of our content manufacturing process and automating operations, we’ve eliminated all the re-work required for all our content outlets.” “As sexy as media is, my job is manufacturing and distribution, and that’s how we treat it….But the economic model is different for every distribution platform.” “We’ve stepped out of the mindset of specific manufacturing. As soon as an asset comes in the door, we think about all the places it has to go, design the supply chain around that manufacturing process – Whether assets are delivered to an on-demand or linear platform, the manufacturing process has to be the same. We can’t have separate supply chains.” “Our business is not just a linear broadcast channel… To reflect this overall change in our business, we’ve changed what we call our group from ‘broadcast operations’ to ‘media operations’ – If a vendor is only looking at what we need to do for broadcast, they'll miss a huge part of our business…”
21 Its not just about replacing the SDI cable with an IP cable, its bringing the added functionality to Its not about long chains of solutions with IP in and Broadcast Vendors View increase flexibility, like new workflows and faster out…but reusable software components that other adoption of new formats such as 4k people can integrate rather than an ugly chain of boxes Telco’s are interested in using their The Broadcaster has specialized knowledge of connectivity to provide end to end solutions It’s the collapse of the channel chain from to Broadcasters using this software how to create and distribute media, but they multiple boxes to software solutions. The must be open to new workflows otherwise they drive for truly IT solutions by people who will compromise what can be achieved need agility and flexibility
Don’t use tomorrow’s technology in yesterday’s workflows – we must move from workflows designed around hardware, to workflows around software deployments
Broadcast is playing catch up. Finance has been using this technology for years. We are slower due to traditional workflow practices – transitioning and educating people will take longer than developing the technology 22 The impact for Broadcast Technology Vendors
Hosting is dependent Its all about virtualized IP and Cloud are On-Premise Remote on loading, volume of technology enablers for software and hybrid hosting new business models environments /Public data and complexity of processing Functionality migrates to Linear TV and OTT distribution All distribution channels are served from a common software defined solutions merge into one combined content pool and driven according to metadata rules hosted Locally, in Private operation Current OTT vendors may provide Linear TV solutions and in Public Clouds dependent on the loading, Public Cloud files size and processing. Services can easily be scaled Broadcasters used to build for Private Cloud by turning functions on and off maximum throughput, but can now Key players will provide an in software build for steady state and scale to Steady State peak with pay as you go services ERP system that manages Usage media, orchestrates workflows, provides key The transition to SaaS and SaaP models wreak havoc with applications and traditional software sales instruments the processes revenues by creating a hole for continued optimization. These systems will enable Consolidation new, more sophisticated Most Traditional Broadcast Restructuring Vendors need to business models, like SaaS Investment in Technology & PaaS DO SOMETHING New breeds of start ups
23 Fox’s view: Cloud Native… Pay-as-you-Go
“We want to transition to a pay-as-you-go model.”
“We have a very capital-intensive infrastructure. We spend tens of millions of dollars every year to build and maintain these on-premises systems.”
“We’re trying to drag vendors towards this cloud future. They are going to have to start re-thinking their licensing model … start thinking about a pay-as-you-go model… start thinking about abstraction from hardware and running in these cloud instances…
I have a feeling everyone in my shoes is asking the same thing of these vendors.”
Chris Blandy EVP Technology Solutions Fox Network Engineering and Operations Source: AWS reinvent, October 2015
24 Market trends
Trends Situation Prediction Commoditization From cameras to storage, prices fall for each new Consumer-off-the-shelf hardware gradually takes over model IP and the Cloud These are buzz words that are confusing the market. Once functionality is moved to virtualized software, Its really all about virtualized software which can be which can be instrumented and easily turned on & off, hosted On premises and in Private and Public clouds new business models can be established, such as SaaS Move to SaaS Investors are looking for recurring revenues, but it is Not all customers want subscription billing. Product very hard to transition an existing business as it sales are less demanding on cash and create faster creates a revenue hole growth. A balance will become the norm. Sports and Events are Viewers like watching in real time and Broadcasting is Events continue to drive the premium pricing model. the Kings of Revenue still the best solution for one-to-many distribution Production processes will become more automated so that smaller events can be captured at a lower cost Big Data and Analytics Currently there is a large focus on metadata and This will continue and be used to continually refine analytics workflows and drive new business models Adtech Advertising is becoming more sophisticated and cross Technology will create and drive new revenue models. platform. ATSC 3.0 and 5G Mobile will enable more Ads will be inserted at the viewing device. personal advertising
25 The Innovators dilemma • Technology appears to be the main driver of change in the entertainment and media sector, with 89% of CEOs saying that tech advances are most likely to influence stakeholder expectations. 2015• CEO survey About 74% of CEOs are concerned that new market entrants could threaten growth prospects
The evolutionary S-curves for technologies and industry along which the basis of competition changes • Traditional Broadcast Hardware vendors find it harder to transition to the new virtualized software models because they have to maintain their existing revenue streams and support their existing customers.
• Consumer-off-the-shelf hardware enables smaller software companies to become much more agile than the incumbent hardware companies.
• Other Companies, such as Telecom service providers look to supply more complete solutions to increase their value add
The buyer landscape is changing: • Some consolidation has already occurred, there will be more to come. • Traditional Broadcast buyers are grappling with the innovators dilemma. • Software companies are growing rapidly with opportunities to build out platforms through roll ups. • OTT Companies are eyeing linear TV solutions but may need to buy expertise and functionality. • Telecoms and other peripheral businesses are entering the market in an attempt to add value.
26 What does this mean for valuations
The current hot spots that multiply valuations: • Innovation and technology – driven by reducing margins, reducing R&D Buzz spend forcing large companies to buy, not build • Recurring revenues: 40% plus attract premium valuations Recurring • Buzz: Software Virtualization, IP, Cloud, VR, Ad-tech, Big Data, Live Revenues
Innovation and technology
Growth Profit The tried and trusted valuation drivers: • Sustained and controlled growth acts as a significant Revenue multiplier to revenue and profits • Worldwide distribution channel • Variable vs. fixed costs, efficient & flexible supply chain
27 Video Trends to Watch
1. Acquisitions and Investments by Large Strategic Buyers, PE and VC Firms Continue to Headline the Marketplace – The 1) recent PE/VC capital investments by Walt Disney, Sony, Comcast, Goldman Sachs, GV, Bessemer, CRV, TPG, ABS, and Greylock (amongst other great investment brands), alongside 2) strategic acquisitions of Tivo by Rovi, QuickPlay Media by AT&T, Livefyre by Adobe, Clearleap and uStream by IBM, 1 Mainstream by Cisco, Elemental Technologies by Amazon Web Services, Envivio by Ericsson, and Octoshape by Akamai, and 3) PE acquisitions of Vizrt by Nordic Capital, Telestream by Genstar Capital and The Foundry by HG Capital, all point to a healthy but changing media infrastructure environment. Many of these transactions represent excellent financial outcomes for the sellers, and highly-strategic and competitively-advantaged purchases by the buyers. In each case the sellers were well established technology leaders with differentiated technologies that were able to command strong valuations based on their unique products/intellectual property and customer acceptance. For strategic buyers, there are demonstrable technical and financial synergies which justified superior valuations. For the Private Equity buyers, the companies are platform solution providers that are poised for meaningful growth, both organically and through complementary acquisitions. These larger deals instill confidence in the M&A market and generate broader activity, such as the recent sales by MediaBridge of Ultimatte to Blackmagic Design, Final Draft to Cast and Crew – a Silver Lake Partners portfolio company, SVSi to Harman, X20 Media to Barco, and Minnetonka Audio Software to The Telos Alliance.
2. SDI/Baseband to IP, to Big Data, to Analytics and Delivery – The expansion to multiple forms of consumer media engagement is here and now, and media companies are shifting from SDI and baseband technologies to IT-based systems that address the “better, cheaper, faster” drumbeat, but are also developing more intelligent data networks that create better ties to consumers and advertisers. Having a stronger grasp of consumer viewing/platform/social/buying patterns, the technology to replace outdated measurement data, and the ability to leverage that knowledge through dynamic ad insertion, identification and monetization and other leading edge cross-platform technologies, will improve confidence and commitment from ad buyers (by consolidating ad spend).
3. Innovation – Innovation in today’s media landscape, as evidenced by companies (and clients) like SVSi, Teradek, X2O and iZotope, is driven by transformative, lower-cost, high-performance technologies; adoption of IT-based/software architectures; and the growth of multiplatform and media distribution alternatives. Innovation creates a beneficial balancing force against consolidation, as it adds to the number of participants in the marketplace and creates more choices for customers. Innovative vendors are producing solutions that reduce cost of ownership by orders of magnitude. However, deep innovation is often costly. Fortunately record amounts of strategic, venture and private equity capital is available and being invested.
28 Public Market Overview Publicly Traded Media Technology Companies Market Capitalization - Large Cap
($USD in millions) Microsoft Amazon Oracle Cisco IBM Naspers EMC Adobe Sony Ericsson
August 2012 258,376 112,234 152,901 101,086 222,670 22,795 55,175 15,470 11,237 27,908
August 2013 278,221 128,375 145,568 125,618 199,663 33,286 53,644 22,958 20,375 37,617
August 2014 374,336 156,649 184,310 127,624 191,837 50,633 59,906 35,849 20,179 39,000
August 2015 348,072 239,884 158,819 131,600 144,863 55,123 47,868 39,183 32,228 28,784
August 2016 452,200 364,563 170,104 157,681 151,329 68,013 56,161 50,856 39,822 25,270
Microsoft Amazon Oracle Cisco IBM Naspers EMC Adobe Sony Ericsson Cash: 6,510 12,521 20,152 8,895 10,017 1,714 9,354 886 5,975 3,486 Total Debt: 53,687 8,212 43,855 28,595 44,525 3,929 6,279 1,918 7,565 3,351 Enterprise Value (EV): 392,647 356,235 157,834 122,764 185,237 70,034 50,679 48,456 32,915 22,439 EV/ LTM Revenue 4.6x 3.0x 4.3x 2.5x 2.3x 11.8x 2.1x 9.1x 0.5x 0.8x EV/ LTM EBITDA 14.6x 32.5x 10.4x 8.5x 10.8x 45.1x 10.1x 31.7x 5.9x 6.0x Share Price as a % of 52 Week High: 99.5% 99.5% 98.8% 100.0% 96.8% 99.4% 99.9% 100.0% 98.7% 77.7%
Source Pitchbook, SEC Filings. 1) Stock Prices as of 8/26/2016. 2) Cash includes short-term investments
30 Publicly Traded Media Technology Companies Market Capitalization - Mid Cap
($USD in millions) Panasonic Level 3 Autodesk Akamai Harman Yamaha Commscope Arris Dolby Belden
August 2012 15,630 4,679 7,045 6,651 3,092 1,934 1,544 3,443 1,529
August 2013 21,122 4,979 8,195 8,192 4,358 2,458 2,165 3,199 2,473
August 2014 28,545 10,714 12,189 10,765 7,837 2,807 4,823 4,431 4,757 3,160
August 2015 25,079 15,916 10,575 12,736 6,956 4,364 6,146 3,873 3,343 2,150
23,609 17,717 15,472 9,664 5,959 5,776 5,671 5,175 5,035 3,109 August 2016
Panasonic Level 3 Autodesk Akamai Harman Yamaha Commscope Arris Dolby Belden Cash: 9,517 1,291 1,223 327 602 802 516 871 600 176 Total Debt: 9,638 10,878 1,488 629 1,403 134 4,948 2,316 N/A 1,684 Enterprise Value (EV): 23,750 27,304 14,693 9,424 6,760 5,910 10,103 6,598 4,316 4,617 EV/ LTM Revenue 0.4x 3.3x 6.2x 4.2x 1.0x 1.6x 2.2x 1.2x 4.2x 2.0x EV/ LTM EBITDA 4.2x 10.5x NM 12.0x 8.4x 10.4x 16.0x 14.1x 13.4x 13.4x Share Price as a % of 52 Week High: 80.6% 86.2% 100.0% 73.2% 76.9% 97.7% 88.0% 83.1% 98.9% 97.8%
Source Pitchbook, SEC Filings. 1) Stock Prices as of 8/26/2016. 2) Cash includes short-term investments
31 Publicly Traded Media Technology Companies Market Capitalization - Mid Cap (cont’d)
($USD in millions) Technicolor Tata GoPro Rovi Coship TiVo Kudelski Barco Evertz DTS
August 2012 530 1,182 1,674 482 1,131 522 755 954 424
August 2013 1,073 746 1,822 920 1,423 715 936 1,029 366
August 2014 2,610 1,763 6,527 2,195 1,017 1,628 810 882 1,190 409
August 2015 2,484 1,722 6,190 962 1,214 892 716 740 853 458
August 2016 2,682 2,222 2,053 1,768 1,150 1,083 1,054 1,015 1,006 593
Technicolor Tata GoPro Rovi Coship TiVo Kudelski Barco Evertz DTS Cash: 419 N/A 164 151 84 118 138 371 96 44 Total Debt: 1,407 N/A N/A 971 111 184 325 100 1 137 Enterprise Value (EV): 4,102 4,053 1,773 2,465 1,277 764 1,301 815 912 686 EV/ LTM Revenue 1.0x 1.3x 1.4x 4.9x 10.7x 1.6x 1.4x 0.7x 3.1x 4.2x EV/ LTM EBITDA 10.3x 12.6x NM 15.3x 83.8x 12.0x 11.6x 18.7x 11.2x 39.1x Share Price as a % of 52 Week High: 79.0% 100.0% 30.6% 90.5% 64.6% 99.1% 87.9% 99.5% 91.7% 99.8%
Source Pitchbook, SEC Filings. 1) Stock Prices as of 8/26/2016. 2) Cash includes short-term investments
32 Publicly Traded Media Technology Companies Market Capitalization - Small Cap
($USD in millions) EVS Brightcove Vitec Group Avid Harmonic Net Insight JVC Neulion Limelight Quantum
August 2012 650 353 456 358 535 119 486 31 231 385
August 2013 932 265 431 210 715 77 285 72 196 357
August 2014 597 196 447 331 602 125 376 178 233 317
August 2015 375 174 425 326 508 115 299 158 238 306
August 2016 473 412 384 371 347 310 299 263 191 158
EVS Brightcove Vitec Avid Harmonic Net Insight JVC Neulion Limelight Quantum Cash: 32 30 20 50 52 23 337 46 31 34 Total Debt: 27 1 135 193 125 N/A 642 N/A 17 131 Enterprise Value (EV): 467 383 518 513 407 310 603 217 177 255 EV/ LTM Revenue 3.5x 2.7x 1.1x 0.9x 1.1x 5.9x 0.2x 2.2x 1.0x 0.5x EV/ LTM EBITDA 11.5x 132.5x 7.8x 6.1x NM 29.4x 4.3x 19.5x NM NM Share Price as a % of 52 Week High: 95.7% 100.0% 85.1% 96.1% 70.5% 82.1% 74.1% 83.6% 71.7% 50.2%
Source Pitchbook, SEC Filings. 1) Stock Prices as of 8/26/2016. 2) Cash includes short-term investments
33 Publicly Traded Media Technology Companies Market Capitalization - Small Cap (cont’d)
($USD in millions) Demand SeaChange Synacor Seven Star Works Espial Group Concurrent Dalet Vislink Qumu Blonder Tongue
August 2012 344 267 215 40 10 39 21 56 68 7
August 2013 230 326 72 30 5 67 24 82 107 6
August 2014 166 248 56 23 60 69 33 97 114 8
August 2015 94 201 41 17 81 51 19 102 36 4
August 2016 117 98 85 84 57 48 29 26 24 4
Blonder Demand SeaChange Synacor Seven Star Espial Concurrent Dalet Vislink Qumu Tongue Cash: 61 52 16 9 35 20 5 5 8 0 Total Debt: N/A N/A 8 16 N/A N/A 5 14 1 6 Enterprise Value (EV): 53 46 77 82 22 33 31 34 17 10 EV/ LTM Revenue 0.5x 0.4x 0.6x 4.4x 1.3x 0.5x 0.6x 0.4x 0.5x 0.4x EV/ LTM EBITDA NM NM 24.3x NM NM 8.9x 9.2x 4.0x NM NM Share Price as a % of 52 Week High: 89.3% 40.7% 77.7% 31.1% 51.1% 83.4% 98.0% 24.7% 49.6% 67.5%
Source Pitchbook, SEC Filings. 1) Stock Prices as of 8/26/2016. 2) Cash includes short-term investments
34 Publicly Traded Media Distribution Companies
($USD in millions) Charter Comcast EchoStar Netflix Pandora Sirius Time Warner Verizon
August 2012 7,841 89,720 2,356 3,317 1,731 9,698 37,800 122,331
August 2013 12,317 110,483 3,608 16,729 4,723 22,229 53,389 135,589
August 2014 17,043 141,621 4,604 28,702 9,859 20,589 65,848 206,515
August 2015 20,344 140,398 4,122 48,814 13,848 20,308 57,988 187,062
August 2016 67,984 157,999 3,596 41,835 14,925 20,292 61,636 212,253
Charter Comcast EchoStar Netflix Pandora Sirius Time Warner Verizon Cash: 555 4,665 762 1,391 82 476 2,496 2,857 Total Debt: 62,203 55,563 2,183 2,373 634 6,102 24,468 99,725 Enterprise Value (EV): 129,632 208,897 4,271 42,374 15,559 25,918 83,608 309,121 EV/ LTM Revenue 9.5x 2.7x 1.4x 5.6x 5.6x 5.4x 3.0x 2.4x EV/ LTM EBITDA 27.9x 8.3x 4.9x NM 15.0x 15.9x 10.8x 6.7x Share Price as a % of 52 Week High: 96.3% 96.5% 82.6% 74.5% 84.5% 94.5% 97.8% 92.1%
Source Pitchbook, SEC Filings. 1) Stock Prices as of 8/26/2016. 2) Cash includes short-term investments
35 Publicly Traded Media Distribution Companies
($USD in millions) CBS Discovery Lions Gate News Corp Scripps 21st Century Fox Viacom Walt Disney
August 2012 23,142 3,968 2,058 9,171 57,678 27,581 94,104
August 2013 33,151 4,800 4,832 9,296 11,408 76,824 37,656 116,082
August 2014 27,820 5,151 4,571 9,484 10,706 74,542 31,898 151,351
August 2015 18,913 5,799 5,465 7,337 6,324 54,999 17,624 172,499
August 2016 23,395 5,202 3,059 7,995 8,173 45,408 17,984 150,601
Lions Gate 21st Century CBS Discovery News Corp Scripps Viacom Walt Disney Entertainment Fox Cash: 176 339 70 1,832 186 4,424 192 5,227 Total Debt: 8,409 7,940 1,492 369 3,627 19,725 12,365 20,441 Enterprise Value (EV): 31,628 18,360 4,482 6,532 11,614 60,709 30,157 165,815 EV/ LTM Revenue 2.2x 2.8x 1.8x 0.8x 3.5x 2.2x 2.3x 3.0x EV/ LTM EBITDA 10.8x 7.4x NM 7.8x 5.1x 9.3x 3.7x 9.7x Share Price as a % of 52 Week High: 90.8% 72.0% 50.5% 88.2% 93.9% 77.9% 83.1% 78.0%
Source Pitchbook, SEC Filings. 1) Stock Prices as of 8/26/2016. 2) Cash includes short-term investments
36 Select M&A and PE Transactions Video M&A Select Transactions Since NAB 2016 EV / LTM Date Target Name Value ($MM) Acquirer Name Select Transactions Revenue Sep-16 Ultimatte Corp - - Blackmagic Design Sep-16 Vidcheck - - Telestream Sep-16 (TBD) Tivo 1,100 1.6x Rovi Sep-16 Movidius - - Intel Aug-16 Scala - - Stratacache Aug-16 ON Events Services 92.5 - Viad (NYSE: VVI) Aug-16 Trilogy Communications 4.1 0.9x Clear-Com (HM Electronics) Aug-16 Beam Interactive - - Microsoft Aug-16 Arris (Whole Home Solutions) - - Espial Aug-16 Pending Broadcast Solutions - - NEP, Crestview Partners and The Carlyle Group Aug-16 (Pending) Sizmek 122 0.8x Vector Capital Aug-16 (Pending) UUX 7.9 1.1x Agile Content Aug-16 Media.Net 900 3.9x Miteno Communication Technology Jul-16 ConvertMedia 100 2.0x Taboola ($500m runrate revenue) Jul-16 Big Data Partnership - - Teradata Jul-16 (Pending) Citrix (GoTo business) 1,800 - Logmein Jul-16 Sound & Video Creations (Click Effects) - - ChyronHego, Vector Capital Jul-16 Anvato - - Alphabet Jul-16 (TBD) Orban - - DaySequerra Jul-16 NextGuard Labs (Civolution’s watermarking business) - - Kudelski Group Jul-16 Polycom 2,000 1.3x Siris Capital Jun-16 Magic Pony Technology 150 - Twitter Jun-16 Wand Labs - - Microsoft Jun-16 Adgear 50 - Samsung Jun-16 Saffron Digital - - Neulion Jun-16 (Pending) Broadcast Solutions - - NEP Broadcasting Jun-16 MTT Innovation - - Barco Jun-16 Deltatre 135.7 2.2x Bruin Sports Capital Jun-16 Accedo 10 0.4x SEB Private Equity May-16 QuickPlay Media - - AT&T May-16 Milestone Systems - - Kudelski Group May-16 (Pending) VHX (Series B post-money valuation was $24.9m) - - Vimeo May-16 Livefyre (Series D post-money valuation was $306.8m) - - Adobe Apr-16 Offhollywood - - The Vitec Group Source Pitchbook, Capital IQ, Press Releases, Public Filings, *Includes Cash
38 Video M&A Select Transactions Between IBC 2015 and NAB 2016 EV / LTM Date Target Name Value ($MM) Acquirer Name Select Transactions Revenue Mar-16 SintecMedia 400 3.6x Francisco Partners Mar-16 Vanguard Video - - Beamr Mar-16 RoyaltyZone - - Filmtrack Mar-16 Volicon - - Verizon Digital Media Mar-16 RealD 551 14.3x Rizvi Traverse Management Mar-16 Replay Technologies 175 23.7x Intel Corporation Mar-16 OneTwoSee - - Comcast Feb-16 Stupeflix - - GoPro Feb-16 Vemory - - GoPro Feb-16 RRmedia 242 1.7x SES Platform Services Feb-16 Viant 155 - Time Feb-16 Deluxe AdServices Business - - Adstream Feb-16 Broadcom 37,000 4.4x Avago Technologies Feb-16 (Pending) Outerwall (Coinstar, Redbox, ecoATM and Gazelle) 1600 0.8x Apollo Global Management Jan-16 Provak Foto Film Video B.V. 1.3 The Vitec Group Jan-16 Ustream 130 - IBM Jan-16 FYI Television - - Ericcson Jan-16 Mantrics - - Snell Advanced Media Jan-16 HeyZap 45 2.2x RNTS Media (Fyber) Dec-15 Clearleap 210 - IBM Dec-15 PandaStream - - Telestream Dec-15 Thomson Video Networks 90 1.1x Harmonic Dec-15 Undertone Networks 180 0.9x Perion Network Oct-15 The Weather Company - - IBM Oct-15 1 Maintstream 125 - Cisco Systems Sep-15 Rentrak (merger) - - comScore (merger) Sep-15 Ramp (media business) 10 2.0x cXense Sep-15 Unruly 175 38.0x News Corporation Sep-15 The Mill 292 1.9x Technicolor Sep-15 Millennial Media 262 0.9x AOL Source Pitchbook, Capital IQ, Press Releases, Public Filings, *Includes Cash
39 Media M&A Select Media Transactions in 2015 - 2016
Value EV / LTM Date Target Name Acquirer Name Select Transactions ($MM) Revenue Aug-16 RCN Telcom Services 1,600 TPG, Google Capital Aug-16 Grande Communications Networks 650 TPG, Google Capital Aug-16 Gawker Media 135 Univision Jul-16 Ultimate Fighting Championship 4,000 WME IMG Jul-16 Odeon & UCI Cinemas £921 AMC Entertainment Jun-16 Starz 4,400 Lionsgate Apr-16 DreamWorks Animation 3,800 Comcast Mar-16 Carmike Cinemas 1,100 AMC Entertainment Jan-16 Legendary Entertainment 3,500 Dalian Wanda Group Sep-15 Universal Studios - Japan 2,941 5.4x Comcast / NBCU Sep-15 Meredith Corp 2,400 1.5x Media General Aug-15 iStreamPlanet - - Turner Broadcasting System Jul-15 Prime Focus - - Marina IV (Singapore) Jul-15 RMG Networks, Airline Media Network 6 - Global Eagle Entertainment Jun-15 Dailymotion SA 302 4.2x Vivendi Jun-15 Nativ Limited - - Ooyala / Telstra May-15 Time Warner Cable 78,224 3.4x Charter Communications May-15 Modern VideoFilm - - Point.360 May-15 AOL 4,282 1.7x Verizon Communications May-15 Cubiware Sp. z o.o 48 TiVo Inc. May-15 The Foundry Visionmongers Ltd. 310 HgCapital Apr-15 Plaid Social Labs - - Corbis Entertainment Apr-15 ActiveVideo Networks 135 - Charter Communications; ARRIS Group Apr-15 Groupe Mikros Image 14 0.3x Technicolor Feb-15 Starz 4,343 2.6x Lions Gate Entertainment Feb-15 OuiDo - - Technicolor Feb-15 Yashi 33 - Nexstar Broadcasting Group Feb-15 Rentrak, Packaged Media Rental Business 7 - Vobile Jan-15 PremiumBeat 42 - Shutterstock
Source Pitchbook, Capital IQ, Press Releases, Public Filings, *Includes Cash
40 Video/Audio Capital Raises Select Funding Transactions from 2016 Post-money Date Target Name Value ($MM) Investor Name Valuation ($MM) Sep-16 Bitmovin 10 Atomico. Dawn Capital, Speedinvest, Y Combinator, David Helgason, Chris Kaiser and Edward Kozel also participated. Aug-16 VICE Media 400 4,000 Walt Disney BAM Technologies LLC (33% stake + 4-year Aug-16 1,000 3,030e Walt Disney option to buy an additional one third stake Aug-16 Kaltura 50 Goldman Sachs Private Capital Investing Group Aug-16 Hulu (10% stake) 583 5,830e Time Warner Cable Aug-16 Zype 3.6 Revel Partners Jul-16 Teads (debt financing) 47 BNPP, Bank of China and HSBC Jul-16 Light 30 GV. Bessemer Venture Partners, CRV, Eclipse Ventures, StepStone Group, Foxconn and Paul Jacobs also participated. Jul-16 OneUp Sports 7.0 100 Undisclosed investors Jul-16 Baobao 15 Meridian Capital China, Tencent Holdings Ltd and GGV Capital Jun-16 Interlude 75 Sony Pictures Entertainment Jun-16 Eyeview 21.5 Qumra Capital. Marker, Nauta Capital, Gemini Israel Ventures and Lightspeed Venture Partners also participated Jun-16 Vemba 5.0 Upfront Ventures and Bertlesmann Digital Ventures Jun-16 iZotope 7.5 32.4 ABS Capital Jun-16 IRIS.TV 1.5 21.0 prev round Sierra Wasatch Capital and other undisclosed investors Jun-16 Frequency 11 17.9 Liberty Global, YOU On Demand Holdings and Oakmont Corporation Jun-16 Jaunt Undisc 264.5 prev round Disney Accelerator May-16 MightyTV 2.0 Canaan Partners, Spark Capital Viola Private Equity. Carmel Ventures, Globespan Capital Partners, Norwest Venture Partners, Comcast Ventures and NTT DOCOMO Ventures Jun-16 SundaySky 30.0 also participated Foundry Group. BGF Ventures, Founders Fund, Balderton Capital, Kreos Capital, FirstMark Capital, Index Ventures, Horizons Ventures and May-16 Roli 27 Universal Music Group also participated May-16 PaperG 1.9 24.9 Not disclosed May-16 Kollective Technology 12.3 57.1 MK Capital, Pritzker Group Venture Capital, Cross Creek Capital and Hatteras Funds May-16 Musical.ly (reportedly raising…) 100 500.0 GGV Capital and Qiming Venture Partners. Greylock Partners and DCM Ventures also participated. May-16 360fly 40 100.7 L Catterton. Hydra Ventures, Qualcomm Ventures also participated. Previous Round - Apr-16 Collective 34 Columbia Partners on April 8, 2016. iNovia Capital, Greycroft Partners and Accel Partners also participated. $313.8 Apr-16 Altitude (debt and equity) 17.5 Bridge Bank, Multiplier Capital Previous Round - Mar-16 Spotify 1,000 Convertible debt from TPG Capital, Dragoneer Investment Group and a group of Goldman Sachs' wealth management clients $8,500 Mar-16 Librestream 11CAD Emerald Technology Ventures. BDC Industrial, Clean and Energy Technology Venture Fund also participated. Mar-16 Starman (LBO) 95.6 233.3 Providence Equity Partners Mar-16 Iflix 45 Sky UK and Elang Mahkota Teknologi. Jan-16 Mitu 27 105.8 AwesomenessTV, Verizon, and WPP Digital RTL Group. Anthem Venture Partners, Simon Equity Partners, Third Wave Capital, Wavemaker Partners, ZenShin Capital, Third Wave Digital and Dec-15 VideoAmp 15 42.9 Startup Capital Ventures also participated. Source Pitchbook, Capital IQ, Press Releases, Public Filings, *Includes Cash 41 Video M&A Select Transactions in 2015 EV / LTM Date Target Name Value ($MM) Acquirer Name Select Transactions Revenue Oct-15 Envivio 87 2.1x Ericsson Oct-15 Elemental Technologies, Inc. -296 6.0x Amazon Web Services, Inc. Oct-15 Ooyala 270 - Telstra Sep-15 ScheduALL 14 1.3x Net Insight AB Aug-15 This Technology - - Comcast Aug-15 VidiGo - - ChyronHego Aug-15 BlackArrow - - Cross MediaWorks - Lee Equity Partners Jul-15 Entone 73 1.7x Amino Technologies Jun-15 SVSI - - Harman Pro Group Jun-15 Black Diamond Video 51 - Steris Jun-15 Bluestreak Technology - - Espial Group May-15 The Foundry Visionmongers Ltd. 310 HgCapital May-15 Sencore - - Wellav Technologies Apr-15 Kolor SARL - - GoPro Apr-15 TC Group International - - MUSIC Group Macao Apr-15 Pace 2,016 0.8x ARRIS Group Apr-15 All Media Network - - Blinkx Apr-15 Verold - - Box Apr-15 Orad Hi Tec Systems 59 1.4x Avid Technology Apr-15 Rocket Surgery Design Services - - Ross Video Apr-15 Octoshape 107 - Akamai Nov-14 Vizrt 318 2.3x Nordic Capital Mar-15 ChyronHego 112 1.9x Vector Capital Feb-15 Paralinx - - Vitec Videocom Feb-15 Fission Software - - Bitcentral Feb-15 Timeline Labs 26 - SeaChange International Feb-15 Axis 2,800 4.1x Canon Feb-15 Tweak Software - - Autodesk Feb-15 Nimbuz - - Google Feb-15 Sony Colorworks - - Deluxe Jan-15 Symphony Teleca 780 2.1x Harman International Jan-15 coolux GmbH - - Christie Digital Systems USA Jan-15 DivX 66 - Neulion Jan-15 RGB Networks - - Imagine Communications Jan-15 Tripwire 710 6.0x Belden Source Pitchbook, Capital IQ, Press Releases, Public Filings, *Includes Cash 42 Video M&A Select Transactions from 2014
EV / LTM Date Target Name Value ($MM) Acquirer Name Select Transactions Revenue Dec-14 Faber Audiovisuals - - NEP Group Dec-14 Vidmaker - - Youtube Dec-14 Digital Vision (UK) 1 - Image Systems Dec-14 Vidible - - AOL Nov-14 BrightRoll 640 - Yahoo! Dec-14 Nexage 119 3.5x Millennial Media Oct-14 Thomson Video Networks - - Edmond de Rothschild Investment Partners Oct-14 Doremi Labs 113 - Dolby Labs Oct-14 Videoplaza - - Ooyala, Inc. Oct-14 Fabrix 95 5.7x Ericsson Oct-14 Kulu Valley 18 2.7x Qumu Corporation Sep-14 Autocue Group - - Vitec Videocom Sep-14 Aviary - - Adobe Sep-14 Manzanita - - DTS Sep-14 Eyeon Software - - Blackmagic Design Aug-14 Ooyala, Inc. 360 - Telstra Corporation Jul-14 Cache-A Corporation - - ProMAX Systems Jul-14 LiveRail - - Facebook Jun-14 AdColony 350 6.6x Opera Software Jun-14 Shotgun Software 54 - Autodesk Jun-14 Dropcam 555 - Nest Labs Jun-14 Afterlive.tv - - Twitter Jun-14 mDialog - - Google/DoubleClick May-14 AMX 365 - Harman Pro Group May-14 BrandAds - - Extreme Reach Apr-14 itaas - - Cognizant Technology Apr-14 SeaWell Networks - - ARRIS Group Apr-14 Digital Rapids - - Imagine Communications
Source Pitchbook, Capital IQ, Press Releases, Public Filings, *Includes Cash
43 Video M&A Select Transactions from 2014
EV / LTM Date Target Name Value ($MM) Acquirer Name Select Transactions Revenue Apr-14 Unreel - - Ross Video Mar-14 Pebble Beach Systems 25 2.6x Vislink Mar-14 LiveTV 500 4.0x Thales Avionics Mar-14 Sample Digital 12 3.0x Prime Focus Technologies Mar-14 Automated Data Systems - - Ross Video Mar-14 Conax 250 2.4x Kudelski Mar-14 Snell - - Quantel Limited Mar-14 X2O Media 19 4.2x Barco NV Feb-14 Grass Valley USA 220 0.8x Miranda Technologies Feb-14 Wegener Corporation & Westport - - Novra Technologies Feb-14 Plantri - - ANNOVA Systems Feb-14 Digitalsmiths Corporation 135 - TiVo Feb-14 Azuki Systems - - Ericsson Feb-14 Capablue - - Arqiva Broadcast Jan-14 Outcast Media - - Gilbarco Jan-14 Unicorn Media 51 - Brightcove Jan-14 Pilat Media Global 72 1.6x SintecMedia
Source Pitchbook, Capital IQ, Press Releases, Public Filings, *Includes Cash
44 Video M&A Select Transactions from 2013
EV/ LTM Date Target Name Value ($MM) Acquirer Name Select Transactions Revenue Dec-13 VideoIQ 32 2.9x Avigilon Corporation Dec-13 EdgeCast Networks 390 - Verizon Digital Media Services Dec-13 Aspera - - IBM Dec-13 Imagine Communications - - Harris Broadcast Communications Dec-13 Rhythm NewMedia 57 4.9x Blinkx Nov-13 Mosart Medialab 17 3.2x VIZRT Nov-13 MediaSite 8 1.0x Sonic Foundry Oct-13 Symmetricom 304 1.1x Microsemi Oct-13 Megahertz Broadcast Systems - - OKNO-TV Oct-13 Aurora Networks 323 1.5x Pace Sep-13 Wegener - - Novra Technologies Sep-13 Broadcast Text International - - The Carlyle Group Sep-13 Saffron Digital 224 1.1x Symmetricom Aug-13 Teradek 30 - Vitec Group Aug-13 Adap.tv 405 - AOL Aug-13 Amplifier Technology 6 0.8x Vislink Aug-13 CPC Computer Programing and Captioning - - Telestream Aug-13 Montalto - - Ross Video Aug-13 MOG Technologies - - Infostrada Aug-13 Grab Media - - Blinkx Aug-13 Prime Focus Limited, Backend Business 38 - Prime Focus World Creative Services Aug-13 Stringwire - - NBC News Digital Jul-13 Boxee 30 - Samsung Electronics Jul-13 Red Bee Media - - Ericsson May-13 Hego 29 1.9x Chyron Corporation Mar-13 Skyfire Labs 155 35.9x Opera Software Mar-13 Harmonic, Optical Equipment Business 46 0.9x Aurora Networks Mar-13 Acme Packet 2,004 6.0x Oracle Feb-13 Harris Broadcast Communications 225 - Gores Broadcast Solutions Feb-13 MIPS Technologies 100 5.4x Imagination Technologies Group Feb-13 Olympus Corporation (11.5% stake) 535 - Sony Feb-13 MIPS Technologies, Certain Patents 350 5.4x Allied Security Source Pitchbook, Capital IQ, Press Releases, Public Filings, *Includes Cash
45 PE/VC Activity in Video Markets Select Transactions from 2014 – 2016 Select Investors
> $65m
$20-65m
$10-20m
$5-10m
$0-5m
Source Pitchbook, Capital IQ, Press Releases, Public Filings, *Includes Cash
46 PE/VC Activity in Video Markets Select Transactions from 2013
Select Investors
$20-65m
$10-20m
$5-10m
$0-5m
Source Pitchbook, Capital IQ, Press Releases, Public Filings, *Includes Cash
47 Audio Markets Overview Audio and Music Trends to Watch
1. ATSC 3.0 Audio – The ATSC TG3 Technology Group voted on May 2 to elevate the A/342 audio standard, including both AC-4 and MPEG-H AA audio, to ATSC 3.0 Candidate Standard status. According to Playout.com, “The Dolby AC-4 audio format has been recommended by the group testing candidate ATSC 3.0 audio systems to be the new next-generation TV audio standard for the United States. Anticipated features of ATSC 3.0 audio include user control of dialog level, immersive audio, multi-platform compatibility, and more.
2. Wireless Microphones / White Space – There is great apprehension about the US spectrum auction and repack, and its effects on wireless microphone operation. Microphones will have to move to new open bands that are still not clearly defined, and manufacturers will have to redesign their products to adapt to these changes. Users will have to replace their existing wireless mics with newly designed (or modified) products.
3. Consumer Audio – The trends that have emerged in recent years continue, including the steady growth of sound bars for television viewing, and headphones, Bluetooth and WiFi speakers for music listening. Amazon Echo and its sibling Amazon Tap, both Alexa-enabled, have been major successes. Each features voice-activated music and information services. On the home video / home theater front, an increasing number of major movie releases on Blu-ray include Dolby Atmos encoded audio tracks, with DTS-X, despite a later entrance into the market, gaining some traction as well. Both systems utilize ceiling mounted speakers to provide a more immersive sound field, but can also use upward-firing speakers that bounce sound off the ceiling.
4. Music Industry – According the IFPI, music industry revenues declined from around $20B in 2005 to roughly $15B in 2010, but the steep decline ended at that point, and revenues have held steady at about $15B through 2015. According to CareersInMusic.com, “Sales of 2015 digital music accounted for nearly half of all global revenue for the music industry, finally lapping physical revenue (from CDs, vinyl, etc.). Notably, streaming in particular is on the rise, now making up 43% of digital revenue, nearly neck-and-neck with downloads at 45%. More people than ever are opting to stream music on their computers, tablets, and smartphones rather than own it in any alternative format. Streaming is now the fastest growing portion of the market, jumping from just 8 million users in 2010 to 68 million in 2015.”
49 Audio M&A Select Transactions 2013 through 2016 EV/ LTM Date Target Name Value ($MM) Acquirer Name Select Transactions Revenue May-16 Bowers and Wilkins $~175 EVA Automation Jan-16 Nexedia 135 NICE Systems Nov-15 d&b audiotechnik - - Ardian Private Equity Oct-15 Apart Audio - - Audioprof Group International Oct-15 Community Professional Loudspeakers - - Audioprof Group International Sep-15 Minnetonka - - The Telos Alliance Apr-15 TC Group International - - MUSIC Group Macao acquired by Mar-15 Bang & Olufsen, Automotive Car Audio 145 - Harman International Aug-14 DiGiCo - - Electra Partners Jun-14 Abacast - - WideOrbit Undisclosed acquired by 2015 Jun-14 Pioneer Home Electronics - - ONKYO Corporation Jun-14 WorxAudio Technologies - - PreSonus Audio Electronics Jun-14 Comfort Audio - - Sonova Undisclosed May-14 Beats Electronics 3,000 5.0x Apple 2015 Apr-14 WOOX Innovations 135 - Gibson Brands Mar-14 Calrec Audio £15 0.85x Electra Partners Mar-14 Revolabs - - Yamaha Corporation Mar-14 Sabine 10 - ClearOne Mar-14 Topspin Media - - Beats Music Feb-14 Formosa Prosonic Industries 17 - Wistron Corporation Feb-14 Lastar - - Legrand Feb-14 ZUUS Media 30 - Ubiquity Broadcasting Dec-13 Soundsphere - - MSE Audio Group Dec-13 line 6 - - Yamaha Corporation Oct-13 Duran Audio 25 - Harman International Oct-13 Bang & Olufsen of Chelsea - - Kensington Audio Visual Sep-13 Livio Radio 10 - Ford Global Technologies Sep-13 Cakewalk - - Gibson Brands Aug-13 Westwood One 252 1.1x Cumulus Media Jul-13 Blue Microphones - - The Riverside Company Jun-13 Allen & Heath £42 - Electra Partners May-13 Teraki 16 - Sunrise (China) Technology Group Feb-13 Martin Professional 146 - Harman International Source Pitchbook, Capital IQ, Press Releases, Public Filings, *Includes Cash 50 PE/VC Activity in Audio Market Select Transactions from 2013 through 2015
$60m $12m $10m $25m $40m
$0-10m
Source Capital IQ, Press Releases, Public Filings
51 Reasons to Choose MediaBridge
• Exclusive focus on media technology and decades of experience in media technology and IT markets
• Personal relationships with and knowledge of leading industry acquirers
• Relevant and recent deal execution experience
• Consistent track record achieving strong valuations for our clients
• Successful representing companies still owned by their founders, on both valuation as well as post- closing relationship with buyer
• Commitment by senior bankers to transaction management leading to optimum results
• Broad financial, legal, and operational skills to best handle complex transactions
52 Global Reach, Vertical Depth
Ethan E. Jacks John C. Bowen Managing Partner Managing Partner [email protected] [email protected] 617.592.2739 (m) 617.921.0075 (m)
53