CEO Monthly Technology Market Analysis October 2012
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CEO Monthly Technology Market Analysis October 2012 New Century Capital Partners Mark Salter 1510 Eleventh Street, Second Floor Managing Partner Santa Monica, CA 90401 Tel: 310-451-9076 Tel: 310-451-9073 Cell: 310-415-8177 Fax: 310-451-9092 [email protected] www.newcenturycap.com Highly confiden.al and proprietary informa.on. Unauthorized distribu.on without prior consent from New Century Capital Partners (“NCCP”) is strictly prohibited. This communica,on should not be regarded as an offer to sell or as a solicita,on of an offer to buy any financial product or service, nor is it an official confirma,on of any transacon, or representa,ve of an official posi,on or statement of New Century Capital Partners or any other related en,ty. New Century Capital Partners is a member of FINRA and the SIPC New Century Capital Partners Technology Universe Coverage New Century Capital Partners’ (NCCP) Technology Landscape Soware Internet Soware and Services • • Applicaon SoYware Cloud Compung • • Customer Relaonship Mgmt. Digital Media • • Infrastructure SoYware Gaming • • InteracPve Entertainment Internet Content • • Network Security Internet Services • • Enterprise SoYware Online Search • Online Travel • Social Financial Technology • Virtualizaon • eCommerce • Payments Digital Adver/sing/Marke/ng • Payroll/Banking • Digital MarkePng • SME/Consumer Services • Mobile AdverPsing • TransacPon Processing • Online MarkePng Outsourced Services Communica/ons and Networking • Business Process Outsourcing • Communicaon Services • Government IT Services • Communicaon SoYware • Healthcare IT Services • Wireless Communicaon • IT ConsulPng • Wireless Networking • IT Services • IT Staffing Semiconductor Technologies • Offshore IT Services • Capital Equipment • EDA/IP Medical Technology • Integrated Circuits • Medical Devices • Materials & Services • Medical Equipment 2 New Century Capital Partners Technology Universe Coverage New Century Capital Partners has Vast Experience within the Technology Sector Soware Internet Soware and Services Financial Technology Digital Adver/sing/Marke/ng Communica/ons and Networking Outsourced Services Semiconductor Technologies Medical Technology ____________________________________________________________________________________________________________ 3 New Century Capital Partners and its bankers have advised, worked with, or have significant relaonships with, the companies shown New Century Capital Partners – Spotlight on Social Media Marke/ng “Social networking sites, with the help of social analy.cs firms, are able to unlock the interconnected data structures of users — mapping lists of friends, their comments and messages, photos and all their social connec.ons, contact informa.on and associated media.” Businesses Begin to Harness the Power of Social Media Marke/ng • Social media provides a plaorm where companies can target their audience based on crucial factors, and engage with that audience • Social media is highly cost-effecPve when used properly, as it creates brand affinity with large groups of followers, through limited posPngs and interacPons • With the emergence of social media, there has been an increase in companies providing social media markePng analyPcs tools in order to organize and use the massive amounts of data that is collected through these social media plaorms • The tools allow for marketers to be able to disseminate the informaon into acPonable decisions about future adverPsing campaigns • Social media plaorms are starPng to be integrated into businesses all over the world for the purpose of easier collaboraon among employees in the workplace Notable Recent Market Ac/vity • 10/2/2012 – Motorola Mobility Holdings (owned by Google) acquires Viewdle for $45 MM • 9/5/2012 – HootSuite Media acquires Seesmic • 8/21/2012 – Gannef acquires BLiNQ Media for between $40 MM and $90 MM • 7/31/2012 – Google acquires Wildfire InteracPve for $250 MM • 7/10/2012 – Dentsu to acquire Aegis for $4.9 B • 7/10/2012 – Oracle acquires Involver • 6/15/2012 – MicrosoY acquires Yammer for $1.2 B • 6/14/2012 – Syncapse acquires Clickable for $33 MM • 6/13/2012 – The CollecPve acquires Metacafe • 6/5/2012 – Oracle to acquire CollecPve Intellect • 6/4/2012 – Salesforce.com acquires Buddy Media for $689 MM • 5/23/2012 – Oracle acquires Vitrue for $300 MM • 5/18/2012 – Facebook IPO’s for $16 B • 2/27/2012 – Buddy Media acquires Brighter OpPon New Century Capital Partners’ Takeaways • Social media will conPnue to change the adverPsing landscape, and become the primary and most influenPal form of brand recogniPon as target audiences around the globe spend an increasing amount of Pme using social media • NCCP anPcipates high volumes of M&A acPvity within and around the social media industry, as companies aempt to broaden their social media offerings and enhance their presence on the Internet 4 To receive future news releases on New Century Capital Partners – Transac/on Analysis M&A ac/vity, click here Facebook’s Inial Public Offering Transacon Overview • On May 17, 2012, Facebook announced the pricing of its iniPal public offering and is trading May 18, 2012 on the NASDAQ Global Select Market under the symbol FB New Century Capital Partners • Facebook has long sought to focus on building the company and the business model before Transacon Profile: going public – the Company now has over 845 MM global users and 2011 revenue of $3.7 B • Facebook will conPnue to drive focus on Internet companies, and further encourage growth and investment in social media Transacon Details(1) • Facebook raised $16 B in its IPO • The IPO valued Facebook at $104 B • Facebook issued 421,233,615 shares of common stock at a price of $38 per share • Morgan Stanley was the lead underwriter for the IPO, with 30 addiPonal banks acPng as underwriters for the deal Inial Public Offering valued at Deal Ra/onale • Facebook will, in addiPon to creang a public market for its common stock, use the proceeds from its IPO to sasfy tax obligaons, create liquidity for previous investors, and create $16,000,000,000 increased capital flexibility • Facebook was nearing a point where it would have to disclose its financials to the SEC due to Transacon Profile Courtesy of: the number of investors it had, therefore this was an opportune Pme to reap the benefits of being a publicly traded company New Century Capital Partners’ Takeaways • Facebook’s IPO, market and financial performance, will be an indicator of the long-term ability for companies to monePze social media • The IPO, along with the various Internet IPOs in 2011, will drive valuaons in Internet and Social Media companies higher, as the valuaon mulPples for public comparable companies rise • Considered a failed IPO by many, Facebook’s stock price dropped 43.3% in its first four months of trading, to $21.52, which may impact investors’ view of social media in the long run ______________________________________________________________ 5 New Century Capital Partners was not involved with this transacPon. (1) Capital IQ and The 451Group, June 26, 2012 To receive future news releases on New Century Capital Partners – Transac/on Analysis M&A ac/vity, click here Oracle Acquires Vitrue for $300 Million Transacon Overview • On May 23, 2012, Oracle announced its acquisiPon of Vitrue for $300 MM May 23, 2012 • As more companies increase their use of social media markePng, Oracle is looking to capitalize New Century Capital Partners on this shiY through its purchase of Vitrue, a web-based social media markePng Transacon Profile: campaign plaorm • Oracle’s expansive soYware capabiliPes, combined with Vitrue’s social media markePng plaorm, are expected to create the most advanced integrated social media markePng engine Transacon Details • Oracle paid $300 MM in cash for Vitrue(1) Acquires • Vitrue was valued at 3.0x TTM revenue(2) Deal Ra/onale • The acquisiPon of Vitrue allows Oracle to posiPon itself compePPvely in the growing social markePng space In a transac/on valued at • Marketers are seeking cross-channel tools that enable teams to write one campaign concept and have it executed and measured across all social media plaorms $300,000,000 • Vitrue delivers a SaaS plaorm allowing Oracle to strengthen its posiPon vis-a- vis SAP, which is compePng with Oracle to expand its cloud soYware offerings Transacon Profile Courtesy of: • The acquisiPon helps Oracle to fulfill its strategy to provide end-to-end cloud services, which include markePng, CRM, and commerce services • Vitrue offers Oracle a new social media enterprise business that Oracle can sell into other products, while Vitrue now has access to a much larger customer base to sell its services New Century Capital Partners’ Takeaways • NCCP sees Oracle’s acquisiPon of Vitrue as further evidence that the cloud wars are ongoing and consolidaon within the SaaS space will conPnue • Oracles purchase of Vitrue shows the increasing aenPon and interest that social media is garnering from large SaaS/soYware providers, who see social media applicaons as an essenPal and complementary service offering _________________________________________________________ New Century Capital Partners was not involved with this transacPon. 6 (1) The 451Group, June 26, 2012 (2) “Social Media Marketer Vitrue Has Been Bought By Oracle for $300 Million,” TechCrunch, hfp://techcrunch.com/2012/05/23/more/, May 23, 2012. To receive future news releases on New Century Capital Partners – Transac/on Analysis M&A ac/vity, click here Salesforce.com Acquires Buddy Media for $689 Million Transacon Overview • On June 4, 2012, Salesforce.com