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SaaS & Cloud M&A and Valuation Update
Q1 2015
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 22-24 Stock Price Performance 25 LTM Revenue, EBITDA & P/E Multiples 26-28 Revenue, EBITDA and EPS Growth 29-31 Margin Analysis 32-33 Best / Worst Performers 34-35 Notable Transaction Profiles 37-46 Public Company Trading & Operating Metrics 48-53 Technology & Telecom Team 55-57
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 set a new five-year high at $47.4B Private dollar volume decrease offset by higher public company M&A LTM transaction volume of 948 deals reached a new five year high. Q1’15 saw 249 deals as strong deal momentum continues following 242 deals in Q4’14 Private company deal volume remained healthy with a third of the deals transacted at over $50M Middle market deals in the $25-250M range represent nearly 40% of transactions with announced deal values Public transaction volume returned to its former pace with 18 deals in LTM Q1’15 saw three $1B+ deals, with SS&C’s acquisition of Advent being the largest at $2.5B Median LTM Revenue Multiple paid for private company targets stayed constant at 3.6x Notable M&A transactions in Q1 SS&C / Advent ($2.5B) Insight Venture Partners / E2open ($250M) D&B / NetProspex ($125M) Lexmark / Kofax ($954M) Infosys / Panaya ($200M) AppNexus / Yieldex ($100M)
Bridgepoint / eFront ($341M) Nielsen / eXelate ($195M) Vector Capital / Saba ($268M) Roper Industries / Strata Decision ($140M) The most active buyers include Vista Equity Partners, Yahoo!, Intuit, j2Global, Google, IBM, Oracle, Microsoft, The Riverside Company, SAP and Trimble Navigation (sorted by most active) 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
Q1’15 saw 3 IPOs added to the SaaS & Cloud 130 (Box, GoDaddy and Inovalon), all at $1B+ valuations All 3 priced well above their initial ranges, but performance post-IPO was mixed Q1’15 marked a sluggish start for the year at 1% and 3.5% growth for the SaaS & Cloud 130 and NASDAQ, respectively An anticipated hike in the Federal Funds Rate and concerns around Greece have tempered investor outlook Median LTM Revenue multiple softened to 4.6x, but still represents a healthy multiple Within SaaS & Cloud, median multiples vary considerably between segments ranging from 1.7x to 8.5x in Q1’15 Median LTM EBITDA multiple slightly declined to 17.4x Four of the SaaS & Cloud segments are trading at medians above 30x LTM EBITDA Median LTM P/E multiples grew to 30.6x Public markets demonstrate a strong preference for companies growing quickly and investing to solidify market leadership status, confident that future profits will come with scale SaaS & Cloud 130 posted median revenue growth of 19.9% in LTM Continued growth is expected over the next twelve months, though an expected slowing to 15.8% is forecast LTM Median EBITDA grew 9.9% with 14.5% EBITDA growth is expected for NTM EBITDA growth drop from 2011 may be attributed to increased OpEx for prioritizing growth over profitability Median gross margins have remained constant for the past five years and currently stand at 67.4% Cloud & IT Infrastructure and Content Creation & Management top the list at over 80% as newly emerging technologies that enable the cloud to run more efficiently command strong margins Median EBITDA margins consistently decreased from 2011 as companies reinvested to fuel growth but it appears increased scale and/or focus on profitability may be reversing the trend
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 set a new five-year high at $47.4B Private dollar volume decrease offset by higher public company M&A M&A dollar volume has rebounded to $9.8B in Q1’15 after a weaker Q4’14 that saw only $5.2B
$50,000
$45,000
$40,000 $20,136 $35,000 $24,028 $21,510 $28,302 $20,534 $30,000
$25,000 $23,733
$20,000
$15,000 $26,308 $24,398 $21,183 $22,968
$10,000 $19,049 Total Transaction Value ($MM) $13,741 $5,000
$0 2010 2011 2012 2013 2014 LTM
Total Private $ Total Public $
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 948 deals reached a new five year high Q1’15 saw 249 deals as strong deal momentum continues following 242 deals in Q4’14 Vertical Market transaction volume has consistently represented 1/3 of the total deal volume
1200
1000
800 338 295
600 232 105 257 224 99 58 60 14
Transactions 183 80 52 14 60 400 52 74 40 29 21 50 19 27 9 44 23 40 11 48 57 20 40 47 40 26 25 49 45 37 10 54 16 22 17 35 200 12 35 43 12 50 32 13 14 40 31 42 25 72 90 33 32 28 87 91 53 62 117 118 25 0 32 39 52 2010 2011 2012 2013 2014 LTM Analytics / Business Intelligence Cloud & IT Infrastructure Cloud Computing / Storage Communication & Collaboration Content Creation & Management Content Delivery Services CRM & Customer Service ERP, Supply Chain & Commerce Finance & Administration Human Resources Marketing & Advertising Vertical Market
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 remained healthy with a third of deals with announced values transacted at over $50M Middle market deals in the $25-250M range represent nearly 40% of transactions with announced deal values LTM median deal value remained at its five year high of $25M 100% 3 7 8 5 7 9 1 3 6 11 2 1 15 10 12 90% 10 23 7 12 28 18 30 80% 23 28 28 22 29 70% 16 14 16 30 60% 28 30 26 23 28 50% 39 36 53 40% 33 49 49 30%
20% 71 80 78 46 10% 42 45
0% 2010 2011 2012 2013 2014 LTM Total Deals 505 661 682 642 867 930 Deals w/ Value 200 243 213 164 183 188 Median ($M) $20 $20 $18 $25 $25 $25 $0-10M $10-25M $25-50M $50-100M $100-250M $250-500M $500M-1B $1B+
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 returned to its former pace with 18 deals in LTM Q1’15 saw three $1B+ deals, with SS&C’s acquisition of Advent being the largest at $2.5B The median transaction value of $796M sets a new five year high
100%
90% 7 6 7 80% 7 5 8 3 70% 4 1 60% 1 8 4 2 4 2 50% 2 1 40% 2 3 5 1 2 4 1 1 4 30% 1 3 2 2 20% 3 4 2 10% 4 6 1 3 1 2 1 1 0% 1 2010 2011 2012 2013 2014 LTM Total Deals 19 33 26 23 13 18 Median ($M) $293 $305 $329 $265 $660 $796 $0-10M $10-25M $25-50M $50-100M $100-250M $250-500M $500M-1B $1B+
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 stayed constant at 3.6x Median Revenue Multiple paid for private targets in Q1’15 was 4.1x 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
4.5x
4.0x 3.8x 3.9x 3.6x 3.6x 3.5x 3.1x 3.0x 2.8x
2.5x
2.0x
1.5x
MedianRevenue Multiple 1.0x
0.5x
0.0x 2010 2011 2012 2013 2014 LTM 25th % 1.9x 1.7x 1.4x 2.4x 2.2x 2.1x 75th % 6.9x 6.2x 4.3x 6.0x 6.0x 5.9x
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 increased to 3.1x With only two sub $100M deals, the multiples were nearly identical for “All Deals” and “$100M+ Deals” Revenue multiples for $100M+ deals have consistently hovered around 3x for the past few years
4.5x 4.1x 4.0x
3.5x 3.2x 3.2x 3.1x 3.1x 3.1x 2.9x 2.9x 3.0x 2.5x 2.4x 2.5x 2.5x 2.3x
2.0x
1.5x
1.0x Median Revenue Multiple Revenue Median 0.5x
0.0x 2010 2011 2012 2013 2014 LTM 25th % 1.8x 1.5x 1.0x 1.3x 2.3x 2.3x 75th % 4.3x 4.3x 3.4x 4.6x 4.6x 4.4x All Deals $100M+ Deals
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 2.6x to 4.5x Analytics/Business Intelligence, Finance & Administration and Cloud & IT Infrastructure targets achieved median multiples of 4.0x or more as these companies are often acquired earlier in their revenue curve at strong multiples Saturation within the Marketing & Advertising segment has become evident with lower multiples in recent periods
5.0x 4.5x 4.5x 4.3x 4.1x 3.9x 4.0x 3.6x 3.5x 3.3x 3.0x 2.8x 2.8x 3.0x 2.8x 2.7x 2.6x 2.5x 2.0x 1.5x 1.0x
0.5x Median Revenue Multiple Revenue Median 0.0x
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 Provides bring-your-own-device (BYOD) Android and iOS mobile 10/1/14 $100M 50.0x 8.6x NA Infrastructure device management (MDM) SaaS for businesses.
Cloud & IT Provides business service management (BSM) SaaS to enable 7/9/14 $100M 20.0x NA NA Infrastructure monitoring of IT operations and infrastructure for enterprises.
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. Provides predictive mobile workforce management SaaS for Human 7/31/14 businesses providing in-field service requests in the home healthcare, $550M 12.2x 5.5x NA Resources utility, telecommunications and retail sectors globally.
Finance & Provides corporate travel and expense management software as a 9/18/14 $7.7B 11.5x NA 29.0% Administration service (SaaS) and a related mobile application for businesses.
Human Provides HR healthcare benefits, payroll and related billing 11/3/14 $400M 10.0x 7.8x NA Resources management software and BPO services.
Provides online and mobile streaming video content networks and Content Delivery 7/11/14 video content management SaaS to enable businesses and IPTV $70M 10.0x 4.4x NA Services broadcasters to upload and stream video content to consumers.
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.
Marketing & Provides mobile-focused programmatic demand-side real-time 10/28/14 $60M 8.6x 40.0x NA Advertising bidding (RTB) and data management SaaS for online marketers.
Vertical Market – Provides automotive dealership CRM and operations management 11/11/14 $325M 8.1x 9.2x NA Transportation SaaS
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 Q1’15
LTM Multiple Premium Enterprise Ann. Date Buyer Target Segment Target Description Revenue on $ to 1 Mo Value Multiple Invested Prior Vertical Market Offers its products and services for automating and integrating data 2/2/15 – Financial $2.5B 6.4x NA 46.8% and work flows across the investment management organization Services Content Provides document and records management, imaging and capture, 3/24/15 Creation & data integration and ERP-focused invoice management PaaS and $954M 3.2x NA 68.5% Mgmt. software for businesses globally. Vertical Market 1/27/15 – Financial Provides software solutions to the financial industry primarily in France $341M 4.1x NA NA Services Provides employee training, performance management, learning and Human 2/10/15 assessment management, compensation management, $268M 2.2x NA 25.9% Resources collaboration and Web conferencing SaaS. ERP, Supply Provides cloud-based, on-demand software solutions for supply chain 2/5/15 Chain & $250M 3.2x NA (0.2)% management. Commerce
Cloud & IT Provides enterprises with SAP- and Oracle-focused ERP and CRM 2/16/15 $200M 6.0x 2.9x NA Infrastructure analytics SaaS to enable process, change and script automation.
Analytics / Provides customer data management and analytics SaaS to enable 3/4/15 Business $195M 5.6x 6.3x NA targeted marketing across devices for marketers and businesses. Intelligence
Vertical Market Provides Web-based financial planning, budgeting and business 1/23/15 $140M 4.7x NA NA – Healthcare intelligence and analytics reporting SaaS for the healthcare industry.
Provides business-to-business (B2B) marketing data management SaaS Marketing & 1/8/15 and related subscription-based B2B marketing contacts online $125M 6.3x 4.5x NA Advertising database for marketers and businesses.
Provides both buy and sell-side inventory and revenue management 3/18/15 Analytics / BI $100M NA 5.4x NA software for media companies and digital advertisers.
(*) Estimate from Capstone research & industry sources
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 11/25/14 Advanced Computer SW $1.1B 3/28/14 PeopleAdmin NA 10/14/14 NAVEX Global $550M 9/30/13 Active Network $1.1B 9/29/14 TIBCO Software $4.2B 9/23/13 Greenway Medical Technologies $644M 13 16 7/22/14 AGDATA NA 8/23/13 Omnitracs $800M 7/8/14 Social Solutions $125M 7/23/13 Digital Technology Int’l NA 6/9/14 Autotask NA 7/22/13 Saxotech NA 5/13/14 DealerSocket NA 11/11/14 BrightRoll $640M 2/14/14 Distill (Employees) NA 9/22/14 Bookpad $8.3M 1/29/14 Tomfoolery $16M 9/3/14 Luminate NA 7/31/13 Palaran $38M 12 8/15/14 ClarityRay NA 7/18/13 Ztelic NA 7/21/14 Flurry NA 7/17/13 AdMovate NA 7/11/14 RayV $70M 5/23/13 PlayerScale NA
3/24/15 Playbook HR NA 5/14/14 Invitco NA 2/5/15 Porticor NA 5/8/14 Lettuce $30M 12/10/14 Acrede NA 11/20/13 Prestwick Services NA 12 8/13/14 Itrios NA 10/30/13 Full Slate NA 8/7/14 PaySuite NA 7/18/13 Fifo NA 7/30/14 KDK Softwares India NA 6/21/13 Elastic Intelligence NA 2/19/15 EmailDirect.com (assets) NA 1/5/15 TestudoData NA 2/17/15 Nuvotera (assets) NA 10/1/14 Excel Micro NA 2/11/15 Firstway Digital NA 11 8/6/14 MXSweep (assets) NA 1/5/15 Arion IT Solutions NA 7/30/14 Contactology (business & assets) NA 1/5/15 Newrise NA 4/3/14 Critical Software NA 1/5/15 Stay Secure NA
2/24/15 Red Hot Labs NA 6/19/14 mDialog NA 12/18/14 Vidmaker NA 5/7/14 Appetas NA 10 8/26/14 ZYNC NA 5/7/14 Stackdriver NA 6/25/14 Appurify NA 5/6/14 Adometry $150M 6/20/14 Dropcam $555M 5/5/14 Rangespan 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 3/4/15 AlchemyAPI NA 11/13/13 Fiberlink Communications $300M 8/11/14 Lighthouse Security Group NA 10/3/13 Xtify $40M 10 7/31/14 CrossIdeas NA 8/15/13 Trusteer $900M 4/10/14 Silverpop Systems NA 7/9/13 CSL International NA 2/24/14 Cloudant $150M 6/4/13 SoftLayer Technologies $2.0B
12/22/14 Datalogix NA 1/7/14 Corente NA 7/31/14 TOA Technologies $550M 12/20/14 Responsys $1.6B 9 6/23/14 MICROS Systems $5.3B 10/23/13 BigMachines $450M 6/20/14 LiveLOOK NA 10/17/13 Compendium $15M 2/24/14 BlueKai $420M
3/26/15 LiveLoop NA 7/11/14 InMage Systems NA 1/20/15 Equivio NA 5/1/14 GreenButton NA 8 12/11/14 Bit Stadium NA 1/7/14 Parature $100M 11/13/14 Aorato $200M 10/23/13 Apiphany NA
1/13/15 Greenphire NA 7/28/14 Censis Technologies NA 11/17/14 Fisher/Unitech NA 12/20/13 MERCAREON NA 7 8/26/14 DMA NA 11/7/13 McLeod & Associates NA 8/22/14 Lexipol NA
9/18/14 Concur Technologies $8.3B 9/10/13 KXEN $40M 8/15/14 OpTier (IP assets) $15M 6/5/13 Hybris $1.3B 7 5/20/14 SeeWhy NA 5/16/13 KMS Software NA 3/26/14 Fieldglass $1.0B
3/10/15 Fifth Element NA 9/8/14 Gehry Technologies NA 12/23/14 IRON Solutions NA 8/19/14 Manhattan Software NA 7 12/1/14 Nexala NA 12/12/13 C3 Consulting NA 11/11/14 Amtech Group 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 – Box
IPO Details Business Description Offering Date: 1/22/15 Market Cap: $1.63B Provides a cloud-based enterprise content collaboration Offering Price: $14.00 Offering Size: $175.0M platform that enables organizations of various sizes to access, store, share, and manage their content / Original Range: $11.00-$13.00 % of Company: 10.7% information.
IPO Performance HQ: Los Altos, CA Ticker: NYSE: BOX Open: $20.20 3/31 $/share: $19.75 % Change to Offer: 44.3% % Change to Offer: 41.1% Stock Performance thru End of Q1’15 Close: $23.23 % Change to Open: (2.2)% $24.00 % Change to Offer: 65.9% $22.00 % Change to Open: 15.0%
Financial & Valuation Metrics $20.00 LTM Revenue: $216.4M LTM Rev Growth: 74.3% $18.00 LTM EBITDA: $(140.5M) Gross Margin: 78.2% $16.00 LTM Net Income: $(168.2M) EBITDA Margin: (64.9)% Mkt Cap / $ Invested: 2.9x Rev Multiple: 9.3x $14.00
Investors $12.00 Andreessen Horowitz; Bessemer Venture Partners; Coatue
$10.00
1/26/15 1/29/15 2/3/15 2/6/15 2/11/15 2/17/15 2/20/15 2/25/15 3/2/15 3/5/15 3/10/15 3/13/15 3/18/15 3/23/15 3/26/15 3/31/15 Management; Draper Fisher Jurvetson; DST Global; Emergence Capital IPO Partners; General Atlantic; Hercules Technology Growth Capital; Intel Capital; ITOCHU Technology Ventures; Macnica; MeriTech Capital Partners; Mitsui & Co.; NEA; North Sky Capital; Salesforce Ventures; Sapphire Ventures; Scale Venture Partners; Telefonica Digital; Telstra; The Social+Capital; TPG Capital; US Venture Partners; XG Ventures Offer Range Price-Open Gap $/Share
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 22 Investment Banking Advisors 22 Capstone Partners RecentInvestment Banking IPOs Advisors – GoDaddy
IPO Details Business Description Offering Date: 3/31/15 Market Cap: $3.07B Focuses on the design and development of cloud-based Offering Price: $20.00 Offering Size: $460.0M technology products for small businesses, Web design professionals, and individuals. Original Range: $17.00-$19.00 % of Company: 15.0%
IPO Performance HQ: Scottsdale, AZ Ticker: NYSE: GDDY Open: $26.72 % Change to Offer: 33.6% Stock Performance thru End of Q1’15 Close: $26.50 $29.00 % Change to Offer: 32.5% $27.00 % Change to Open: (0.8)%
Financial & Valuation Metrics $25.00
LTM Revenue: $1.39B LTM Rev Growth: 22.7% $23.00 LTM EBITDA: $85.8M Gross Margin: 62.6% LTM Net Income: $(46.7M) EBITDA Margin: 6.2% $21.00 Mkt Cap / $ Invested: N/A Rev Multiple: 2.0x $19.00
Investors $17.00 KKR; Silver Lake; Technology Crossover Ventures; The Go
$15.00
4/2/15 Open Daddy Group IPO
Offer Range Price-Open Gap $/Share
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 23 Investment Banking Advisors 23 Capstone Partners RecentInvestment Banking IPOs Advisors – Inovalon
IPO Details Business Description Offering Date: 2/11/15 Market Cap: $3.9B Provides advanced cloud-based data analytics and data- Offering Price: $27.00 Offering Size: $600.0M driven intervention platforms to the healthcare industry in the United States. Original Range: $24.00-$26.00 % of Company: 15.4%
IPO Performance HQ: Bowie, MD Ticker: NasdaqGS: INOV Open: $33.16 3/31 $/share: $30.21 % Change to Offer: 22.8% % Change to Offer: 11.9% Stock Performance thru End of Q1’15 Close: $27.00 % Change to Open: (8.9)% $38.00$34.00 % Change to Offer: 0% $36.00 $32.00 % Change to Open: (18.6)% $34.00 $32.00 Financial & Valuation Metrics $30.00 $30.00 LTM Revenue: $361.5M LTM Rev Growth: 22.2% $28.00 LTM EBITDA: $130.2M Gross Margin: 68.8% $28.00 LTM Net Income: $65.4M EBITDA Margin: 36.0% $26.00 $26.00 Mkt Cap / $ Invested: N/A Rev Multiple: 12.7x $24.00 $22.00 $24.00 Investors $20.00
Lapis Ventures; SAC $18.00
12/12/14 12/30/14 12/15/14 12/16/14 12/17/14 12/18/14 12/19/14 12/22/14 12/23/14 12/24/14 12/26/14 12/29/14 12/31/14 Open
$22.00 IPO
2/12/15 2/17/15 2/19/15 2/23/15 2/25/15 2/27/15 3/3/15 3/5/15 3/9/15 3/11/15 3/13/15 3/17/15 3/19/15 3/23/15 3/25/15 3/27/15 3/31/15 IPO
Offer Range Price-Open Gap $/Share
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 24 Investment Banking Advisors 24 Capstone Partners MedianInvestment Banking Stock Advisors Performance – SaaS & Cloud 130
Q1’15 marked a sluggish start for the year at 1% and 3.5% growth for the SaaS & Cloud 130 and NASDAQ, respectively An anticipated hike in the Federal Funds Rate and concerns around Greece have tempered investor outlook Content Delivery Services continued to post the largest gain within the SaaS & Cloud sector
Stock Performance Stock Performance - 12/31-3/31
120% Content Delivery Services 12.8% 104.4% 97.1% Cloud & IT Infrastructure 9.6% 100% Finance & Administration 5.9% ERP, Supply Chain & Commerce 80% 5.8% Cloud Computing / Storage 4.0% 58.5% 60% Vertical Market 1.3% Analytics / Business Intelligence 1.1%
40% 32.4% SaaS & Cloud 130 1.0% Human Resources (1.2)% 16.7% 20% Licensed Software Leaders (2.0)%
1.0% 3.5% Content Creation & Management (3.8)% 0% Communication & Collaboration (8.3)% Marketing & Advertising (7.2)% (9.4)% (20)% CRM & Customer Service (10.9)% Last 5 Years Last 3 Years LTM 12/31-3/31 (20)% (10)% 0% 10% 20% SaaS & Cloud 130 NASDAQ
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 25 Investment Banking Advisors 25 Capstone Partners MedianInvestment Banking LTM Advisors Revenue Multiples – SaaS & Cloud 130
Median LTM Revenue Multiple softened to 4.6x, but still represents a healthy multiple Within SaaS & Cloud, median multiples vary considerably between segments ranging from 1.7x to 8.5x in Q1’15 Cloud & IT Infrastructure segment commands highest median LTM Revenue multiple at an impressive 8.5x Content Delivery Services LTM Revenue multiple lags at 1.7x and represents the lowest multiple within SaaS & Cloud 130 primarily due to its lower margin profile
LTM Enterprise Value / Revenue LTM Enterprise Value / Revenue
6.0x Cloud & IT Infrastructure 8.5 x 5.2x Human Resources 5.8 x 5.0x 4.8x Vertical Market 5.7 x 4.6x 4.3x Finance & Administration 5.7 x
4.0x 3.8x Analytics / Business Intelligence 5.6 x 3.6x SaaS & Cloud 130 4.6 x Content Creation & Management 4.5 x 3.0x Licensed Software Leaders 3.7 x Cloud Computing / Storage 3.5 x 2.0x Marketing & Advertising 3.3 x ERP, Supply Chain & Commerce 3.3 x 1.0x Communication & Collaboration 2.5 x CRM & Customer Service 2.5 x Content Delivery Services 1.7 x 0.0x 2010 2011 2012 2013 2014 3/31/15 0x 2x 4x 6x 8x 10x Based on data available as of 3/31/15 Based on data available as of 3/31/15
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 26 Investment Banking Advisors 26 Capstone Partners MedianInvestment Banking LTM Advisors EBITDA Multiples – SaaS & Cloud 130
Median LTM EBITDA multiple declined slightly to 17.4x Four of the SaaS & Cloud segments trade at medians above 30x LTM EBITDA Five of thirteen segments posted increases in EBITDA Multiples compared to Q4’14 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
LTM Enterprise Value / EBITDA LTM Enterprise Value / EBITDA
20x Human Resources 39.3 x 18.1x 18x 17.1x 17.1x 17.4x CRM & Customer Service 37.1 x ERP, Supply Chain & Commerce 32.5 x 16x Analytics / Business Intelligence 30.7 x 14x 13.0x Marketing & Advertising 25.6 x 12.0x 12x Content Creation & Management 20.6 x Finance & Administration 20.3 x 10x Vertical Market 18.1 x 8x SaaS & Cloud 130 17.4 x
6x Cloud & IT Infrastructure 16.4 x Content Delivery Services 14.7 x 4x Communication & Collaboration 12.7 x 2x Cloud Computing / Storage 8.8 x Licensed Software Leaders 0x 8.8 x 2010 2011 2012 2013 2014 3/31/15 0x 10x 20x 30x 40x 50x Based on data available as of 3/31/15 Based on data available as of 3/31/15 Companies with EBITDA Margin <7.5% and EBITDA multiple above 20x deemed NA Companies with EBITDA Margin <7.5% and EBITDA multiple above 20x deemed NA
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 27 Investment Banking Advisors 27 Capstone Partners MedianInvestment Banking LTM Advisors P/E Multiples – SaaS & Cloud 130
Median LTM P/E multiples grew to 30.6x Public markets demonstrate a strong preference for companies growing quickly and investing to solidify market leadership status, confident that future profits will come with scale CRM & Customer Service and ERP, Supply Chain & Commerce segments trade at very high P/E multiples though only a few companies in those segments have reached profitability
LTM P/E LTM P/E
35x CRM & Customer Service 89.8 x 30.6x Human Resources 80.5 x 30x 28.2x 28.8x 27.4x ERP, Supply Chain & Commerce 79.8 x Analytics / Business Intelligence 51.0 x 25x 23.8x Marketing & Advertising 38.9 x 21.7x Content Creation & Management 33.4 x 20x SaaS & Cloud 130 30.6 x Vertical Market 30.6 x 15x Content Delivery Services 28.6 x Cloud & IT Infrastructure 25.5 x 10x Finance & Administration 19.4 x Communication & Collaboration 19.2 x 5x Cloud Computing / Storage 15.1 x Licensed Software Leaders 15.1 x 0x 2010 2011 2012 2013 2014 3/31/15 0x 20x 40x 60x 80x 100x Based on data available as of 3/31/15 Based on data available as of 3/31/15 Companies with Net Margin <5.0% and P/E above 40x deemed NA Companies with Net Margin <5.0% and P/E above 40x deemed NA
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 28 Investment Banking Advisors 28 Capstone Partners MedianInvestment Banking Revenue Advisors Growth – SaaS & Cloud 130
SaaS & Cloud 130 posted median revenue growth of 19.9% in LTM Continued growth is expected over the next twelve months, though an expected slowing to 15.8% is forecast Licensed Software Leaders project no growth, reinforcing the market shift towards SaaS-based solutions
Revenue Growth vs Prior 12 Mos NTM / LTM Revenue Growth Projection
30% Human Resources 23.3% 25.6% Cloud & IT Infrastructure 21.8% 25% Analytics / Business Intelligence 21.1% 21.6% 20.6% CRM & Customer Service 18.8% 20.4% 19.9% 20% ERP, Supply Chain & Commerce 17.8% 17.6% Marketing & Advertising 17.0% 15.8% Content Creation & Management 16.5% 15% SaaS & Cloud 130 15.8% Vertical Market 15.7% 10% Finance & Administration 12.8% Communication & Collaboration 10.4% 5% Cloud Computing / Storage 9.1% Content Delivery Services 6.7%
0% Licensed Software Leaders (0.0)% 2010 2011 2012 2013 2014 LTM NTM (10)% 0% 10% 20% 30% 3/31/15 3/31/15 Based on data available as of 3/31/15 Based on data available as of 3/31/15
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 29 Investment Banking Advisors 29 Capstone Partners MedianInvestment Banking EBITDA Advisors Growth – SaaS & Cloud 130
LTM Median EBITDA grew 9.9%, and 14.5% EBITDA growth is expected for NTM EBITDA growth drop from 2011 may be attributed to increased OpEx by prioritizing growth over profitability Most SaaS & Cloud segments are expected to achieve greater than 10% EBITDA growth for NTM, the exceptions being more mature companies in segments such Cloud Computing / Storage and Licensed Software Leaders
EBITDA Growth vs Prior 12 Mos NTM / LTM EBITDA Growth Projection
30% Content Creation & Management 60.0% 25.7% Analytics / Business Intelligence 42.7% 25% 23.6% CRM & Customer Service 26.7% Marketing & Advertising 22.4% 20% Finance & Administration 21.9% Human Resources 18.7% 14.5% Communication & Collaboration 15.4% 15% ERP, Supply Chain & Commerce 15.0% 10.9% 10.8% 9.9% Cloud & IT Infrastructure 14.9% 10% SaaS & Cloud 130 14.5% 7.1% Vertical Market 10.4% 5% Content Delivery Services 10.2% Cloud Computing / Storage 1.4%
0% Licensed Software Leaders (2.6)% 2010 2011 2012 2013 2014 LTM NTM (25)% 0% 25% 50% 75% 3/31/15 3/31/15 Based on data available as of 3/31/15 Based on data available as of 3/31/15 Companies with EBITDA Margin between -5.0% and 5.0% deemed NA Companies with EBITDA Margin between -5.0% and 5.0% deemed NA
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 30 Investment Banking Advisors 30 Capstone Partners MedianInvestment Banking EPS Advisors Growth – SaaS & Cloud 130
Median EPS growth jumped to 16.5% in LTM, and is expected to keep growing at 12.2% for NTM Established leaders with scale are able to drive increased profitability as sales & marketing spend normalizes after periods of heavy investment to support growth
EPS Growth vs Prior 12 Mos NTM / LTM EPS Growth Projection
25% Analytics / Business Intelligence 47.9% 21.0% CRM & Customer Service 39.3% 20% 19.2% Marketing & Advertising 25.9% Human Resources 21.1% 16.5% Content Creation & Management 14.6% 15% Communication & Collaboration 13.8% 12.2% Cloud & IT Infrastructure 13.3% 10.5% 10.6% 10.3% ERP, Supply Chain & Commerce 12.3% 10% SaaS & Cloud 130 12.2% Cloud Computing / Storage 9.8% 5% Vertical Market 8.6% Licensed Software Leaders (1.0)% Content Delivery Services (2.0)% 0% Finance & Administration(5.9)% 2010 2011 2012 2013 2014 LTM NTM 3/31/15 3/31/15 (20)% 0% 20% 40% 60% Based on data available as of 3/31/15 Based on data available as of 3/31/15 Companies with Net Margin between -5.0% and 5.0% deemed NA Companies with Net Margin between -5.0% and 5.0% deemed NA
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 31 Investment Banking Advisors 31 Capstone Partners MedianInvestment Banking Gross Advisors Margin Trends – SaaS & Cloud 130
Median gross margins have stayed constant for the past five years and currently stand at 67.4% Cloud & IT Infrastructure and Content Creation & Management top the list at over 80% as newly emerging technologies that enable the cloud to run more efficiently command strong margins Cloud Computing / Storage and Finance & Administration gross margins are suffering due to ongoing price competition to capture market share
Gross Margins Gross Margins by Segment
80% Cloud & IT Infrastructure 82.3%
70% 67.7% 67.4% 67.3% 67.7% 67.5% 67.4% Content Creation & Management 81.6% Communication & Collaboration 71.2% 60% Analytics / Business Intelligence 69.6% SaaS & Cloud 130 67.4% 50% Vertical Market 67.2% ERP, Supply Chain & Commerce 65.9% 40% Marketing & Advertising 65.2% 30% Content Delivery Services 65.0% Human Resources 64.2% 20% CRM & Customer Service 64.0% Licensed Software Leaders 63.5% 10% Cloud Computing / Storage 61.4%
0% Finance & Administration 57.7% 2010 2011 2012 2013 2014 3/31/15 0% 25% 50% 75% 100% Based on data available as of 3/31/15 Based on data available as of 3/31/15
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 32 Investment Banking Advisors 32 Capstone Partners MedianInvestment Banking EBITDA Advisors Margin Trends – SaaS & Cloud 130
Median EBITDA margins consistently decreased from 2011 as companies reinvested to fuel growth but it appears increased scale and/or focus on profitability may be reversing the trend The majority of companies in CRM & Customer Service and ERP, Supply Chain & Commerce continue to invest heavily in sales and marketing, delaying profitability in favor of scale and market share The License Software Leaders and other more mature segments like Cloud Computing / Storage already have operating leverage EBITDA Margins EBITDA Margins by Segment
20% 18.8% 18.7% Licensed Software Leaders 37.8% 18% Cloud Computing / Storage 34.5%
16% 15.1% Vertical Market 25.3% 14.4% 14.2% 13.7% Cloud & IT Infrastructure 21.8% 14% SaaS & Cloud 130 15.1% 12% Content Creation & Management 13.0% Finance & Administration 12.7% 10% Communication & Collaboration 11.3% 8% Marketing & Advertising 11.3% 6% Analytics / Business Intelligence 10.8% Human Resources 5.4% 4% Content Delivery Services 3.0% 2% CRM & Customer Service (3.5)% 0% ERP, Supply Chain & Commerce (5.5)% 2010 2011 2012 2013 2014 3/31/15 (20)% 0% 20% 40% Based on data available as of 3/31/15 Based on data available as of 3/31/15
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 33 Investment Banking Advisors 33 Capstone Partners BestInvestment & Banking Worst Advisors Performers – SaaS & Cloud 130
High/Low LTM EV/Rev Multiples High/Low Revenue Growth
45x 150% 38.2 40x 97.0 86.5 35x 100% 71.9 66.9 65.7 30x 25.6 50% 15.8 25x 20.5 18.4 17.9 20x 0% 15x -5.1 -5.8 -7.9 (50)% -24.6 10x 4.6 -47.0 5x 0.9 0.8 0.5 0.5 0.5 (100)% 0x
Based on data available as of 3/31/15 Based on data available as of 3/31/15
High/Low LTM EV/EBITDA Multiples High/Low EBITDA Growth 200.0x 300% 143.0 202.2 150.0x 200% 129.7 117.1 116.7 107.0 100.0x 73.5 100% 71.8 69.4 55.3 14.5 50.0x 0% 17.4 6.8 6.7 5.7 5.7 3.0 -17.6 -23.9 -27.7 0.0x (100)% -72.6 -78.7
Based on data available as of 3/31/15 Based on data available as of 3/31/15 Companies with EBITDA Margin <7.5% and EBITDA multiple above 20x deemed NA Companies with EBITDA Margin between -5.0% and 5.0% deemed NA
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 34 Investment Banking Advisors 34 Capstone Partners BestInvestment & Banking Worst Advisors Performers – SaaS & Cloud 130 (Continued)
High/Low LTM P/E Multiples High/Low EPS Growth 200x 182.6 158.9 200% 130.0 117.4 114.5 112.9 150x 130.0 128.5 128.5 121.9 100% 16.5 100x 0%
50x 30.6 (100)% (71.0) (78.8) (85.7) (86.0) (90.9) 12.1 10.7 10.5 9.9 4.1 0x (200)%
Based on data available as of 3/31/15 Based on data available as of 3/31/15 Companies with Net Margin <5.0% and P/E above 40x deemed NA Companies with Net Margin between -5.0% and 5.0% deemed NA
Stock Performance - 12/31-3/31 High/Low EBITDA Margin
90% 78.8 200% 52.5 79.6 60% 44.0 43.2 100% 48.5 46.7 45.8 43.8 40.5 15.1 30% 0% 1.0 0% (100)% (57.8) (30)% (200)% (138.7)(149.6) (60)% (38.7) (42.5) (42.9) (300)% (221.3) (47.6) (55.1) (90)% (400)% (331.0)
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 35 Investment Banking Advisors 35 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 36 Investment Banking Advisors WORLD CLASS WALL STREET EXPERTISE.36 BUILT FOR THE MIDDLE MARKET.TM Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Advent provides financial portfolio management, trade order management, partnership accounting, revenue cycle management, reporting and compliance software for Deal Summary businesses in the financial sector. The acquisition is the Date: 2/1/2015 largest for SS&C to date, with the company acquiring 40 Transaction Value: $2.5B companies, including the $860 million acquisition of hedge- fund administrator GlobeOp Financial Services in 2012 and Enterprise Value: $2.7B the $95 million purchase of DST Global Solutions in 2013. % Sought: 100% Consideration: Cash Advent has a base of roughly 4,300 clients, such as asset managers, hedge funds, fund administrators, prime brokers, family offices and wealth management advisory firms. The San Francisco-based firm had sales of close to $400 million in Valuation Metrics 2014, about 90% of which is recurring. Advent CEO Pete Hess noted, “they are buying us to offer their capabilities to our LTM Revenue Multiple: 6.4 x customers, including those in the advisor space.” According LTM EBITDA Multiple: 24.9 x to SS&C CEO Bill Stone, Advent had previously turned down LTM P/E Multiple: 30.7 x previous advances by SS&C to acquire the company. Premium versus: SS&C plans to fund the acquisition and refinancing of 1 day prior: 5.7% existing debt with $3 billion of debt financing and cash on 1 week prior: 18.4% hand and another $400 million of equity. The deal value of 1 month prior: 46.8% approximately $2.5 billion amounts to 6.4 times trailing revenue and a 27% premium to the average LTM 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 37 Investment Banking Advisors 37 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Kofax provides document and records management, imaging and capture, data integration and ERP-focused invoice management PaaS and software for businesses Deal Summary globally. Lexmark divested its inkjet printer business in 2013 Date: 3/24/2015 and has since boosted its enterprise software business. As a Transaction Value: $1.0B result of the acquisition, Lexmark will nearly double the size of its enterprise software business, known as Perceptive Enterprise Value: $954M Software, to an approximately $700 million or 18% of its total % Sought: 100% revenues. Consideration: Cash Kofax has over 20,000 customers worldwide, including 80 from the Fortune Global 100 list. The company operates in all regions of the world and has more than 850 channel Valuation Metrics partners globally. It will strengthen Lexmark’s capabilities in multi-channel capture, smart process applications, LTM Revenue Multiple: 3.2 x data/content integration and process analytics. The LTM EBITDA Multiple: 38.2 x company should also be able to realize synergies in cost LTM P/E Multiple: 44.0 x (estimated around $40 million) and revenue from the product offering and cross selling. Lexmark Chairman and Premium versus: CEO Paul Rooke commented, “it makes good use of non- 1 day prior: 48.0% U.S. cash and will help to achieve our 2016 revenue and 1 week prior: 50.2% operating income margin goals.” 1 month prior: 68.5% The acquisition values Kofax at $11 per share, about a 47% premium versus its Tuesday closing stock price. With revenue Note: LTM and Premiums of last quarter prior to transaction estimated at nearly $300 million for 2014, the deal value announcement date. equates to 3.2 times LTM revenue.
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 38 Investment Banking Advisors 38 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Known for building customized portals for limited partners and general partners, eFront was founded in 1999 and provides end-to-end solutions dedicated to the financial Deal Summary services industry, specializing in enterprise risk management Date: 1/28/2015 and alternative investments. Its solutions serve more than 700 Transaction Value: $341M customers and 100,000 users in 40 countries, including some of the largest companies in the private equity, real estate % Sought: 100% investment, banking and insurance sectors. Consideration: Cash Francisco Partners originally acquired a majority stake in eFront in September 2011, with the whole company valued at 68 million euros ($88 million). eFront has made a number of add-on acquisitions, notably in October 2012 acquiring Valuation Metrics DMLT, a provider of investor reporting and portal services for Trailing Revenue Multiple: 4.1x the alternative asset community, and in October 2013, Trailing EBITDA Multiple: 18.8x acquiring AnalytX, an alternative investment software company known for handling back-office services within Multiple on $ Invested: NA small and medium-sized companies. The deal value of $341 million equates to more than 18 times trailing EBITDA. Investors Francisco Partners; JTC Group
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 39 Investment Banking Advisors 39 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Saba Software provides employee training, performance management, learning and assessment management, compensation management, collaboration and Web Deal Summary conferencing SaaS for businesses and government agencies Date: 2/10/2015 globally. Vector, a private equity firm that had previously Transaction Value: $268M provided a loan to Saba, will pay $9 a share for Saba, which was delisted from the Nasdaq in 2013 and is currently traded Enterprise Value: $268M over the counter. % Sought: 100% Consideration: Cash Saba was delisted from the Nasdaq after it was forced to restate earnings following an accounting fraud scandal involving executive level management. The biggest benefit to Saba is that by going private, the issues with their financial Valuation Metrics restatement, which had been burning cash and increasing debt, ends because as a private company, Saba does not LTM Revenue Multiple: 1.9x need to issue financial statements. David Fishman, head of LTM EBITDA Multiple: 92.2x private equity at Vector Capital, commented that “Vector, LTM P/E Multiple: NA along with some of the world’s premier financial institutions and investors, is excited to help Saba move beyond its Premium versus: financial restatement process and put the focus squarely on 1 day prior: 0.7% the company’s innovative cloud talent-management 1 week prior: (4.8)% platform and its blue-chip customer base.” 1 month prior: 25.9% The acquisition values Saba at $9 per share. With revenue estimated at nearly $143 million for 2014, the deal value Note: LTM and Premiums of last quarter prior to transaction equates to 3.2 times LTM revenue. announcement date.
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 40 Investment Banking Advisors 40 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
E2Open provides cloud-based solutions for collaborative planning and execution across global trading networks. E2open’s stock price has been battered since Deal Summary early 2014 as the outlook for its earnings diminished, and the Date: 2/5/2015 company’s share price fell from a high of $29 down to $5.50 Transaction Value: $273M in less than12 months. Enterprise Value: $273M The acquisition values E2open at $8.60 per share, a 41% % Sought: 100% premium over the previous day closing price. With revenue Consideration: Cash of nearly $80 million for 2014, the deal value equates to 3.3 times LTM revenue.
Mark Woodward, President and Chief Executive Officer of E2open said, "After a comprehensive evaluation and review Valuation Metrics of strategic alternatives designed to enhance shareholder LTM Revenue Multiple: 3.3x value, we are confident that this agreement represents a LTM EBITDA Multiple: NM favorable outcome for our shareholders, providing them with immediate, substantial value.” Insight principal Ross Devor LTM P/E Multiple: NM commented, “E2open’s unique business network and cloud- Premium versus: based software solutions provide real time visibility and 1 day prior: 40.8% critical insights into some of the largest supply chains in the 1 week prior: 42.6% world… We look forward to building upon E2open’s market 1 month prior: (0.2)% leading position in a rapidly-changing environment.”
Insight Venture Partners is a leading global private equity firm with an established track record and deep domain Note: LTM and Premiums of last quarter prior to transaction announcement date. expertise in software.
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 41 Investment Banking Advisors 41 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Panaya provides enterprises with SAP and Oracle focused ERP and CRM analytics SaaS to enable process, change and script automation. Panaya's core SaaS solution will bring Deal Summary automation to several of Infosys‘ products. Panaya’s solution Date: 2/16/2015 – in use by 1,220 companies in 62 countries, including 33% of Transaction Value: $200M Fortune 500 companies – analyzes the impact of business process changes and shortens the time to market for its % Sought: 100% customers. Consideration: Cash / Stock Infosys is one of India’s largest software companies currently in the midst of revamping its strategy as it faces revenue growth challenges against competitors like HCL and TCS, along with the recent departure of several key Infosys Valuation Metrics executives. Infosys CEO Vishal Sikka commented, “the Trailing Revenue Multiple: 6.0x acquisition of Panaya is a key step in renewing and Trailing EBITDA Multiple: NA differentiating our service lines. This will help amplify the potential of our people, freeing us from the drudgery of Multiple on $ Invested: 2.9x many repetitive tasks, so we may focus more on the important, strategic challenges faced by our clients.”
Infosys expects for this acquisition to become highly Investors accretive within the next 12-18 months, and with revenue Battery; Benchmark; Hasso Plattner Ventures; Israel estimated at $33 million for 2014, the deal value equates to Growth Partners 3.3 times 2014 revenue. Panaya has raised $70 million in funding to date.
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 42 Investment Banking Advisors 42 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Nielsen has acquired audience measurement data company eXelate to enable digital advertisers to more comprehensively target online advertising. eXelate’s Deal Summary business has two main components, the data marketplace Date: 3/4/2015 aggregates numerous sources which track users’ online Transaction Value: $200M behavior and the data management platform then intelligently organizes this data to allow advertisers and % Sought: 100% publishers to make better and faster marketing and media Consideration: Cash decisions.
Nielsen is a longstanding player in television viewership tracking, and the acquisition will help it compete in the rapidly growing market of programmatic advertising which Valuation Metrics increasingly relies on insight from large data sets to 2015E Revenue Multiple: 5.6x determine consumers’ buying practices. Integrating Trailing EBITDA Multiple: NA eXelate's data exchange platform will enable Nielsen to better leverage its audience segmentation, offline media Multiple on $ Invested: 6.3x measurement and consumer purchase data into the digital realm. Providing a glimpse into future plans, Nielsen Global President Steve Hasker added, “While we are starting in digital video, we think it will—if and when the market is Investors ready—go to a broader television ecosystem.” Carmel Ventures, Menlo Ventures, Trident Capital, NewSpring Ventures At 5.6 times trailing revenue Nielsen paid a hefty multiple for eXelate, comparable with Oracle’s acquisition of rival BlueKai in early 2014 for $450M. eXelate has raised $32M in venture funding since its inception in 2007.
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 43 Investment Banking Advisors 43 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Strata Decision Technology provides Web-based financial planning, budgeting and business intelligence and analytics reporting SaaS for the healthcare industry. Roper Industries is Deal Summary a diversified technology company which provides Date: 1/23/2015 engineered products and solutions for global niche markets, Transaction Value: $140M including software information networks, medical, water, energy, and transportation. % Sought: 100% Consideration: Cash / Stock More than 175 healthcare systems and 1,000 hospitals use Strata's cloud-based financial analytics and performance platform to help streamline costs. Roper is fairly acquisitive, completing at least 13 acquisitions since 2011, notably picking up two other healthcare technology companies in Valuation Metrics August: Strategic Healthcare Programs and Innovative Trailing Revenue Multiple: NA Product Achievements. Roper officials have said they want Trailing EBITDA Multiple: NA to expand their medical segment, which represents almost 30% of the company's revenue. Roper Chairman and CEO Multiple on $ Invested: NA Brian Jellison commented “Strata's applications are critical for healthcare providers in identifying, implementing and sustaining cost improvements.”
Investors Strata’s 125 employees are based in Chicago, and following Veronis Suhler Stevenson the acquisition Strata’s headquarters will remain in Chicago. The terms of the deal were not disclosed, but estimates place the transaction value at $140 million.
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
NetProspex provides cloud-based data management solutions to B2B organizations to assess, cleanse, enrich and grow their marketing data in order to fuel high-performing Deal Summary marketing campaigns and accelerate the creation of sales Date: 1/8/2015 pipeline. NetProspex is essentially an alternative to LinkedIn Transaction Value: $125M for sales and marketing professionals, allowing B2B marketers to be more agile, nimble and confident in reaching the right % Sought: 100% contact at a specific company. Consideration: Unspecified The Dun & Bradstreet Corporation provides commercial data, analytics and insights on businesses across the globe. This deal adds to the recent trend of acquisitions of market data intelligence companies such as Oracle’s purchase of Valuation Metrics Bluekai ($400M) and Datalogix ($500M); Acxiom’s acquisition Trailing Revenue Multiple: 6.3 x of LiveRamp ($300M); LinkedIn’s purchase of Bizo ($175M). Trailing EBITDA Multiple: NA All of the acquisitions taking place within the space are priced at high revenue multiples and we expect to see more Multiple on $ Invested: 4.5 x activity within the segment as businesses seek to privatize data as it becomes a competitive advantage.
NetProspex valued at $125 million equates to 6.3 times Investors trailing revenue, producing a great return for its investors. Angel investors; Edison Partners; Spring Lake Equity Partners
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 45 Investment Banking Advisors 45 Capstone Partners M&AInvestment Transaction Banking Advisors Spotlight
Acquiror Target Deal Rationale/Commentary
Yieldex provides both buy and sell-side inventory and revenue management software for media companies and digital advertisers, enabling analytics-based forecasting, Deal Summary pricing and direct purchasing of programmatic online Date: 3/18/2015 marketing space. The company has been a long rival of Transaction Value: $100M AppNexus and had been in talks for months to combine the two companies. % Sought: 100% Consideration: Cash, Stock AppNexus provides trading solutions and powers marketplaces for Internet advertising. Its open, unified and programmatic platform enables customers to more effectively buy and sell media. AppNexus has been long awaiting an IPO, and with this deal we can speculate that Valuation Metrics the long-anticipated IPO will finally take place in the near Trailing Revenue Multiple: NA term. Trailing EBITDA Multiple: NA This deal will bolster AppNexus’ capabilities in programmatic Multiple on $ Invested: 5.4x direct – one of the next big waves in ad tech. Thus enabling to tackle the less commoditized, but less automated space of web ad slots sold by sales personnel to specific advertisers and various audiences with its enhanced platform. Investors AppNexus CEO, Brian O’Kelley commented, “we’re building Amazon; First Round; Hearst Ventures; Madrona a best-in-class, full-stack publisher platform, and the Venture Group; Sequel Venture Partners; Triangle integration of Yieldex’s sophisticated analytics and Peak Partners; Woodside Fund forecasting tools helps us solve unmet challenges and deliver key insights to our clients.”
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 46 Investment Banking Advisors 46 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 47 Investment Banking Advisors WORLD CLASS WALL STREET EXPERTISE.47 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 N T M / LT M Gro wth LT M M argin C o mpany N ame 3/ 31/15 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 16,436 16,321 2,586 2,480 (4.6)% 0.8 % 6.3 x 4.8 x 24.2 x 21.6 x 44.5 x 35.6 x 19.2% 20.1% 20.8% 64.8 % 4.4 % (5.9)% SaaS & Cloud 130 M edian 1,198 1,111 120 14 (7.2)% 1.0 % 4.6 x 4.3 x 17.4 x 16.0 x 30.6 x 28.1 x 15.8% 14.5% 12.2% 67.4 % 15.1 % 6.9 %
Analytics / Business Intelligence Adobe 73.94 36,990 35,715 3,177 1,902 12.5 % 1.7 % 8.4 x 6.9 x 30.7 x 19.2 x 51.0 x 31.8 x 21.1% 60.0% 60.6% 85.0 % 27.3 % 17.3 % Bazaarvoice 5.65 449 401 105 57 (22.6)% (29.7)% 2.2 x 2.0 x NA NA NA NA 9.1% 93.0% 57.7% 64.4 % (6.8)% (10.5)% comScore 51.20 1,750 1,734 43 26 56.1 % 10.3 % 5.3 x 4.6 x 24.0 x 19.1 x 35.1 x 31.7 x 13.8% 25.5% 10.7% 70.4 % 22.0 % 14.9 % Google 554.70 375,260 320,642 62,633 8,015 (0.5)% 4.5 % 4.9 x 4.2 x 12.5 x 10.9 x 21.7 x 19.3 x 14.6% 14.6% 12.2% 61.6 % 38.9 % 26.6 % Hottolink 8.56 83 74 23 14 (50.2)% (8.4)% 8.7 x NA 30.9 x NA 128.5 x NA NA NA NA 61.6 % 28.1 % 7.9 % iSentia 2.79 558 585 4 31 NA 23.2 % 6.0 x 5.7 x 35.9 x 16.6 x 72.0 x 25.3 x 3.7% 116.7% 185.0% 36.6 % 16.6 % 6.9 % Mattersight 6.20 141 130 14 3 (10.5)% (0.8)% 4.3 x 3.2 x NA NA NA NA 32.4% 61.1% NA 69.3 % (19.8)% (40.1)% New Relic 34.70 1,633 1,428 205 0 NA (0.4)% 14.7 x 10.6 x NA NA NA NA 38.8% (10.4)% (22.3)% 81.0 % (36.1)% (33.6)% Splunk 59.20 7,401 6,551 850 0 (17.2)% 0.4 % 14.5 x 10.9 x NA NA NA NA 33.8% NA NA 84.8 % 5.0 % 1.9 % Workiva 14.40 579 502 101 25 NA 7.5 % 4.5 x 3.6 x NA NA NA NA 24.7% 3.4% 47.9% 69.9 % (31.6)% (52.1)% M ean 42,484 36,776 6,716 1,007 (4.6)% 0.8 % 7.3 x 5.8 x 26.8 x 16.4 x 61.6 x 27.0 x 21.3% 45.5% 50.3% 68.5 % 4.3 % (6.1)% M edian 1,106 1,007 103 26 (10.5)% 1.1 % 5.6 x 4.6 x 30.7 x 17.8 x 51.0 x 28.5 x 21.1% 42.7% 47.9% 69.6 % 10.8 % 4.4 %
Cloud & IT Infrastructure Citrix 63.87 10,208 10,712 789 1,293 11.2 % 0.1 % 3.4 x 3.2 x 12.7 x 12.0 x 19.2 x 17.5 x 5.6% 5.8% 10.2% 84.9 % 26.8 % 18.1 % FireEye 39.25 6,110 5,708 402 0 (36.3)% 24.3 % 13.4 x 9.2 x NA NA NA NA 45.5% 9.1% 5.9% 58.9 % (53.4)% (65.8)% Hortonw orks 23.84 1,028 823 204 0 NA (11.7)% 17.9 x 9.6 x NA NA NA NA 86.5% 1.9% 78.9% (75.6)% (221.3)% (252.8)% LogMeIn 55.99 1,370 1,169 201 0 24.7 % 13.5 % 5.3 x 4.5 x 23.6 x 20.7 x 47.4 x 43.4 x 18.1% 14.2% 9.3% 87.1 % 22.3 % 13.5 % Proofpoint 59.22 2,309 2,257 215 162 59.7 % 22.8 % 11.5 x 9.1 x NA NA NA NA 27.1% NA 13.3% 66.4 % (0.2)% (7.6)% Qualys 46.48 1,576 1,449 127 0 82.8 % 23.1 % 10.8 x 8.6 x 49.7 x 33.6 x 101.0 x 87.2 x 26.1% 48.0% 15.8% 78.3 % 21.8 % 12.8 % Rally Softw are 15.69 396 329 67 0 17.3 % 38.0 % 3.8 x 3.1 x NA NA NA NA 19.8% 31.5% 22.0% 73.1 % (30.1)% (30.7)% Red Hat 75.75 13,894 13,346 1,263 715 43.0 % 9.6 % 7.5 x 6.6 x 28.7 x 24.8 x 47.3 x 41.8 x 12.4% 15.5% 13.3% 84.7 % 26.0 % 16.9 % ServiceNow 78.78 11,683 11,458 669 444 31.5 % 16.1 % 16.8 x 11.6 x NA 86.9 x NA NA 45.0% NA NA 63.6 % 1.1 % (1.9)% SolarWinds 51.24 3,908 3,658 250 0 20.2 % 2.8 % 8.5 x 7.0 x 18.6 x 15.3 x 28.0 x 25.5 x 21.8% 21.8% 9.6% 89.7 % 45.8 % 32.6 % Splunk 59.20 7,401 6,551 850 0 (17.2)% 0.4 % 14.5 x 10.9 x NA NA NA NA 33.8% NA NA 84.8 % 5.0 % 1.9 % Symantec 23.37 15,944 14,299 3,740 2,095 17.0 % (8.9)% 2.2 x 2.2 x 6.9 x 6.5 x 12.1 x 12.3 x (3.1)% 5.3% (1.8)% 83.4 % 31.5 % 20.3 % Trend Micro 33.00 4,454 3,307 1,147 0 6.3 % 18.4 % 3.4 x 3.2 x 8.7 x 9.3 x 21.6 x NA 6.6% (6.0)% NA 82.3 % 39.4 % 21.6 % VMw are 82.01 35,069 29,494 7,075 1,500 (24.1)% (0.6)% 4.9 x 4.4 x 14.1 x 12.0 x 23.0 x 20.3 x 11.0% 17.4% 13.3% 84.8 % 34.6 % 25.6 % WANdisco 3.90 114 112 2 0 (77.5)% (47.6)% 9.9 x 6.9 x NA NA NA NA 44.7% 49.8% 33.8% 80.7 % (331.0)% (341.4)% M ean 7,698 6,978 1,134 414 11.3 % 6.7 % 8.9 x 6.7 x 20.4 x 24.6 x 37.5 x 35.4 x 26.7% 17.9% 18.6% 68.5 % (25.4)% (35.8)% M edian 4,454 3,658 402 0 17.1 % 9.6 % 8.5 x 6.9 x 16.4 x 15.3 x 25.5 x 25.5 x 21.8% 14.9% 13.3% 82.3 % 21.8 % 12.8 %
*Sorted alphabetically within market segment
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 48 Investment Banking Advisors 48 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 3/ 31/15 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 372.10 172,797 171,470 17,416 16,089 10.6 % 19.9 % 1.9 x 1.7 x NA 20.7 x NA NA 15.4% 27.3% NA 29.5 % 7.3 % (0.3)% Box 19.75 2,303 2,014 330 42 NA NA 9.3 x 7.1 x NA NA NA NA 31.0% 1.7% 86.4% 78.2 % (57.8)% (63.7)% CenturyLink 34.55 19,572 40,115 128 20,671 5.2 % (12.7)% 2.2 x 2.2 x 5.7 x 5.8 x 14.9 x 13.6 x (0.4)% (2.7)% 9.8% 59.0 % 39.1 % 7.3 % Google 554.70 375,260 320,642 62,633 8,015 (0.5)% 4.5 % 4.9 x 4.2 x 12.5 x 10.9 x 21.7 x 19.3 x 14.6% 14.6% 12.2% 61.6 % 38.9 % 26.6 % IBM 160.50 158,642 190,965 8,481 40,804 (16.6)% 0.0 % 2.1 x 2.2 x 7.8 x 8.1 x 9.9 x 10.0 x (7.9)% (2.8)% (1.3)% 50.0 % 26.3 % 17.6 % Microsoft 40.66 333,525 272,694 89,569 28,738 (0.8)% (12.5)% 2.9 x 2.9 x 8.3 x 8.2 x 15.3 x 15.4 x 1.1% 0.3% (0.6)% 65.9 % 35.3 % 23.7 % Oracle 43.15 188,439 176,919 43,777 32,257 5.5 % (4.0)% 4.6 x 4.6 x 9.4 x 9.6 x 14.8 x 14.7 x 0.0% (2.4)% 1.0% 61.1 % 48.5 % 33.9 % Rackspace 51.59 7,299 7,245 214 159 57.2 % 10.2 % 4.0 x 3.5 x 12.0 x 10.3 x 66.1 x 54.9 x 14.5% 16.1% 20.4% 67.5 % 33.7 % 6.3 % salesforce.com 66.81 42,157 43,359 995 2,198 17.0 % 12.6 % 8.1 x 6.7 x 50.0 x 39.4 x 128.5 x 97.2 x 21.2% 27.0% 32.2% 76.0 % 16.1 % 6.0 % Verizon 48.63 202,077 304,411 11,153 113,487 2.2 % 4.0 % 2.4 x 2.3 x 6.8 x 6.7 x 14.5 x 13.2 x 3.7% 1.0% 9.8% 60.7 % 35.3 % 10.5 % M ean 150,207 152,983 23,470 26,246 8.9 % 2.4 % 4.2 x 3.7 x 14.1 x 13.3 x 35.7 x 29.8 x 9.3% 8.0% 18.9% 61.0 % 22.3 % 6.8 % M edian 165,720 174,195 9,817 18,380 5.2 % 4.0 % 3.5 x 3.2 x 8.8 x 9.6 x 15.1 x 15.1 x 9.1% 1.4% 9.8% 61.4 % 34.5 % 8.9 %
Communication & Collaboration 8x8 8.40 744 556 188 0 (22.3)% (8.3)% 3.6 x 3.0 x 31.9 x 25.9 x 52.5 x 45.7 x 19.0% 23.1% 14.9% 71.2 % 11.3 % 9.2 % Cisco 27.53 140,508 108,008 53,022 20,522 22.8 % (1.0)% 2.2 x 2.2 x 7.4 x 8.0 x 12.9 x 12.5 x 3.3% (8.3)% 3.0% 61.8 % 30.5 % 22.9 % Citrix 63.87 10,208 10,712 789 1,293 11.2 % 0.1 % 3.4 x 3.2 x 12.7 x 12.0 x 19.2 x 17.5 x 5.6% 5.8% 10.2% 84.9 % 26.8 % 18.1 % CounterPath 0.58 25 21 4 0 (60.9)% 2.5 % 1.7 x 1.6 x NA NA NA NA 7.9% 31.1% 36.8% 81.5 % (47.7)% (36.1)% Cybozu 2.77 127 101 26 0 (20.2)% (12.3)% 2.0 x NA NA NA NA NA NA NA NA 90.7 % 6.8 % 1.2 % Interactive Intel. 41.18 883 827 56 0 (43.2)% (14.0)% 2.4 x 2.2 x NA NA NA NA 11.3% NA NA 60.3 % 4.9 % 0.4 % IntraLinks 10.34 591 617 53 79 1.1 % (13.1)% 2.4 x 2.3 x 16.2 x 15.8 x NA NA 5.7% 2.5% NA 72.9 % 14.9 % 1.3 % j2 Global 65.68 3,168 3,232 530 594 31.2 % 5.9 % 5.4 x 4.6 x 12.3 x 10.7 x 19.3 x 17.0 x 16.6% 15.4% 13.6% 82.3 % 43.8 % 26.8 % Jive Softw are 5.13 382 274 114 6 (36.0)% (14.9)% 1.5 x 1.4 x NA NA NA NA 10.4% NA 13.8% 62.7 % (3.1)% (10.7)% LivePerson 10.24 583 533 49 0 (15.2)% (27.4)% 2.5 x 2.0 x 24.1 x 19.1 x 51.2 x 35.0 x 26.7% 26.5% 46.4% 74.9 % 10.5 % 5.2 % Microsoft 40.66 333,525 272,694 89,569 28,738 (0.8)% (12.5)% 2.9 x 2.9 x 8.3 x 8.2 x 15.3 x 15.4 x 1.1% 0.3% (0.6)% 65.9 % 35.3 % 23.7 % Premiere Global 9.56 448 743 41 335 (20.7)% (10.0)% 1.3 x 1.3 x 7.1 x 7.0 x 10.7 x 10.7 x 1.8% 2.2% 0.7% 58.9 % 18.4 % 7.3 % RingCentral 15.33 1,054 938 142 26 (15.3)% 2.7 % 4.3 x 3.3 x NA NA NA NA 28.5% 100.6% 53.2% 65.1 % (8.8)% (14.9)% Textura 27.18 697 631 67 0 7.8 % (4.5)% 10.0 x 7.0 x NA 75.9 x NA NA 42.9% 202.2% 147.6% 79.6 % (12.9)% (14.8)% V-cube 13.37 124 120 11 7 (40.4)% 2.1 % 3.1 x NA 15.4 x NA 55.6 x NA NA NA NA 57.7 % 20.0 % 5.9 % M ean 32,871 26,667 9,644 3,440 (13.4)% (7.0)% 3.3 x 2.8 x 15.0 x 20.3 x 29.6 x 22.0 x 13.9% 36.5% 30.9% 71.4 % 10.1 % 3.0 % M edian 697 631 67 7 (15.3)% (8.3)% 2.5 x 2.3 x 12.7 x 12.0 x 19.2 x 17.0 x 10.4% 15.4% 13.8% 71.2 % 11.3 % 5.2 %
*Sorted alphabetically within market segment
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 49 Investment Banking Advisors 49 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 3/ 31/15 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 Creation & M anagement Adobe 73.94 36,990 35,715 3,177 1,902 12.5 % 1.7 % 8.4 x 6.9 x 30.7 x 19.2 x 51.0 x 31.8 x 21.1% 60.0% 60.6% 85.0 % 27.3 % 17.3 % Destiny Media 0.26 14 13 1 0 (74.7)% (30.5)% 3.6 x 3.3 x NA NA NA NA 12.0% 100.0% NA 100.0 % (7.2)% (27.6)% GoDaddy NA NA NA 224 1,145 NA NA NA NA NA NA NA NA NA NA NA 62.6 % 6.2 % 0.8 % Kudelski 12.31 666 906 93 333 (15.0)% 1.1 % 1.0 x 1.0 x 7.9 x 7.8 x 15.7 x 15.2 x 2.2% 1.3% NA 72.8 % 13.0 % 4.8 % Rovi 18.21 1,650 2,436 338 1,124 (20.1)% (19.4)% 4.5 x 4.4 x 10.4 x 10.3 x 10.5 x 10.6 x 1.4% 0.9% (1.2)% 80.2 % 43.0 % 29.4 % Sumavision 3.06 2,091 1,866 232 7 74.9 % 52.5 % 20.5 x 10.4 x 71.8 x NA 70.5 x NA 97.0% NA NA 100.0 % 28.6 % 32.3 % Wix 19.16 730 644 86 0 (16.6)% (8.8)% 4.5 x 3.2 x NA NA NA NA 43.1% 129.7% 14.6% 81.6 % (17.1)% (28.3)% M ean 7,023 6,930 593 644 (6.5)% (0.6)% 7.1 x 4.9 x 30.2 x 12.4 x 36.9 x 19.2 x 29.4% 58.4% 24.7% 83.2 % 13.4 % 4.1 % M edian 1,190 1,386 224 333 (15.8)% (3.8)% 4.5 x 3.8 x 20.6 x 10.3 x 33.4 x 15.2 x 16.5% 60.0% 14.6% 81.6 % 13.0 % 4.8 %
Content Delivery Services Akamai 71.05 12,705 12,552 758 605 22.0 % 12.8 % 6.4 x 5.6 x 14.7 x 13.4 x 28.6 x 26.7 x 15.1% 10.2% 7.5% 68.9 % 43.4 % 22.9 % Brightcove 7.33 238 217 23 2 (25.4)% (5.8)% 1.7 x 1.6 x NA NA NA NA 6.7% NA NA 65.0 % 3.0 % (3.6)% Limelight 3.63 357 264 93 0 66.5 % 31.0 % 1.6 x 1.6 x NA NA NA NA (0.3)% NA (11.6)% 49.4 % 3.0 % (7.3)% M ean 4,434 4,344 291 202 21.0 % 12.7 % 3.3 x 2.9 x 14.7 x 13.4 x 28.6 x 26.7 x 7.2% 10.2% (2.0)% 61.1 % 16.4 % 4.0 % M edian 357 264 93 2 22.0 % 12.8 % 1.7 x 1.6 x 14.7 x 13.4 x 28.6 x 26.7 x 6.7% 10.2% (2.0)% 65.0 % 3.0 % (3.6)%
CRM & Customer Service eGain 3.30 88 98 8 18 (53.3)% (36.3)% 1.3 x 1.2 x NA NA NA NA 7.7% NA 21.3% 64.3 % (4.0)% (9.7)% Five9 5.56 275 244 78 48 NA 24.1 % 2.4 x 2.0 x NA NA NA NA 16.4% 14.6% 71.7% 47.0 % (22.0)% (74.4)% Jive Softw are 5.13 382 274 114 6 (36.0)% (14.9)% 1.5 x 1.4 x NA NA NA NA 10.4% NA 13.8% 62.7 % (3.1)% (10.7)% LivePerson 10.24 583 533 49 0 (15.2)% (27.4)% 2.5 x 2.0 x 24.1 x 19.1 x 51.2 x 35.0 x 26.7% 26.5% 46.4% 74.9 % 10.5 % 5.2 % salesforce.com 66.81 42,157 43,359 995 2,198 17.0 % 12.6 % 8.1 x 6.7 x 50.0 x 39.4 x 128.5 x 97.2 x 21.2% 27.0% 32.2% 76.0 % 16.1 % 6.0 % Zendesk 22.69 1,885 1,770 122 7 NA (6.9)% 13.9 x 9.4 x NA NA NA NA 48.5% 71.8% 46.8% 63.8 % (44.2)% (35.9)% M ean 7,562 7,713 228 379 (21.8)% (8.1)% 5.0 x 3.8 x 37.1 x 29.2 x 89.8 x 66.1 x 21.8% 35.0% 38.7% 64.8 % (7.8)% (19.9)% M edian 482 404 96 12 (25.6)% (10.9)% 2.5 x 2.0 x 37.1 x 29.2 x 89.8 x 66.1 x 18.8% 26.7% 39.3% 64.0 % (3.5)% (10.2)%
ERP, Supply Chain & Commerce Amber Road 9.25 241 203 41 3 (39.9)% (9.5)% 3.1 x 2.6 x NA NA NA NA 19.8% NA (65.7)% 57.6 % 4.2 % (9.4)% blur Group 1.33 63 38 24 0 (83.5)% 32.3 % 5.5 x 3.2 x NA NA NA NA 71.9% 12.8% 22.6% 24.8 % (138.7)% (123.9)% Borderfree 6.01 192 65 127 0 (67.8)% (32.9)% 0.5 x 0.5 x 11.2 x 13.8 x NA NA 5.5% NA NA 25.5 % 4.7 % 0.8 % ChannelAdvisor 9.69 242 177 68 4 (74.3)% (55.1)% 2.1 x 1.8 x NA NA NA NA 12.9% 16.0% 10.3% 71.5 % (23.0)% (30.7)% Demandw are 60.90 2,223 1,979 244 0 (4.9)% 5.8 % 12.3 x 8.5 x NA NA NA NA 45.5% NA NA 73.8 % 4.9 % 0.9 % E2open NA NA NA 24 6 NA NA NA NA NA NA NA NA 8.7% (5.5)% 1.9% 63.0 % (16.0)% (19.3)% Freelancer 0.75 327 310 17 0 (45.9)% 40.5 % 14.5 x 11.8 x NA NA NA NA 23.3% 18.7% 40.1% 87.1 % (9.2)% (7.7)% SciQuest 16.93 468 337 131 0 (37.3)% 17.2 % 3.3 x 3.1 x NA 15.2 x 56.4 x 55.4 x 6.2% NA 1.9% 69.1 % (1.7)% 7.8 % SLI Systems 0.86 53 43 10 0 (55.7)% (8.0)% 2.2 x 1.9 x NA NA NA NA 15.8% 14.0% 14.4% 25.5 % (32.7)% (30.4)% SPS Commerce 67.10 1,109 978 131 0 9.2 % 18.5 % 7.6 x 6.2 x 53.9 x 45.2 x 103.2 x 86.7 x 22.3% 19.3% 19.0% 68.7 % 14.2 % 8.5 % M ean 546 459 82 1 (44.5)% 1.0 % 5.7 x 4.4 x 32.5 x 24.7 x 79.8 x 71.1 x 23.2% 12.6% 5.5% 56.7 % (19.3)% (20.4)% M edian 242 203 55 0 (45.9)% 5.8 % 3.3 x 3.1 x 32.5 x 15.2 x 79.8 x 71.1 x 17.8% 15.0% 12.3% 65.9 % (5.5)% (8.6)% *Sorted alphabetically within market segment
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 50 Investment Banking Advisors 50 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 3/ 31/15 C ap Value C ash D ebt LTM LQ LTM NTM LTM NTM LTM NTM R evenue EBITDA EPS Gro ss EBITDA N et
Finance & Administration Bottomline 27.37 1,053 1,020 187 154 (22.1)% 8.3 % 3.2 x 2.9 x 24.9 x 14.4 x 18.1 x 19.8 x 7.6% 73.2% (8.3)% 57.7 % 12.7 % 17.5 % Intuit 96.96 26,831 25,963 1,367 499 24.7 % 5.2 % 5.7 x 5.7 x 15.8 x 17.6 x 28.9 x 34.8 x (0.8)% (10.5)% (17.2)% 84.8 % 35.9 % 21.3 % NetSuite 92.76 7,171 6,995 450 275 (2.2)% (15.0)% 12.6 x 9.7 x 143.0 x 114.3 x NA NA 29.7% 25.1% NA 68.2 % 8.8 % 4.5 % Tangoe 13.80 537 488 51 2 (25.8)% 5.9 % 2.3 x 2.0 x 14.4 x 12.6 x 19.4 x 17.4 x 12.8% 14.5% 11.5% 54.6 % 15.9 % 13.8 % Xero 18.06 2,437 2,227 210 0 (47.1)% 43.2 % 25.6 x 15.4 x NA NA NA NA 65.7% 21.9% (3.5)% 53.2 % (56.0)% (52.6)% M ean 7,606 7,339 453 186 (14.5)% 9.5 % 9.9 x 7.2 x 49.5 x 39.7 x 22.1 x 24.0 x 23.0% 24.8% (4.3)% 63.7 % 3.5 % 0.9 % M edian 2,437 2,227 210 154 (22.1)% 5.9 % 5.7 x 5.7 x 20.3 x 16.0 x 19.4 x 19.8 x 12.8% 21.9% (5.9)% 57.7 % 12.7 % 13.8 %
Human Resources Benefitfocus 36.79 1,047 1,045 56 54 (21.7)% 12.0 % 7.6 x 6.0 x NA NA NA NA 26.3% 13.4% 1.1% 36.3 % (33.4)% (39.5)% Callidus 12.68 679 657 37 15 1.3 % (22.4)% 4.8 x 4.0 x 42.5 x 30.2 x 84.5 x 51.0 x 20.4% 40.5% 65.8% 59.7 % 11.3 % 5.2 % Cornerstone 28.89 1,557 1,500 283 226 (39.6)% (17.9)% 5.7 x 4.4 x NA NA NA NA 28.4% NA 11.0% 70.5 % 0.5 % (6.5)% Freelancer 0.75 327 310 17 0 (45.9)% 40.5 % 14.5 x 11.8 x NA NA NA NA 23.3% 18.7% 40.1% 87.1 % (9.2)% (7.7)% Halogen 7.25 159 115 44 0 (18.0)% (1.2)% 2.0 x 1.7 x NA NA NA NA 18.9% (5.0)% 3.3% 71.8 % (15.4)% (23.1)% Paycom 32.06 1,871 1,873 25 27 NA 21.8 % 12.4 x 9.5 x 69.4 x 55.1 x 158.9 x 114.9 x 30.4% 25.9% 38.4% 83.6 % 17.9 % 6.9 % Solium 5.62 269 219 50 0 (10.0)% (15.2)% 3.2 x 3.1 x 12.1 x 13.9 x 30.6 x 33.6 x 2.4% (12.5)% (8.8)% 48.0 % 26.4 % 13.4 % Ultimate Softw are 169.96 4,862 4,754 116 8 24.1 % 15.8 % 9.4 x 7.7 x 39.3 x 31.1 x 80.5 x 68.8 x 22.0% 26.4% 17.1% 59.8 % 23.9 % 12.2 % Upland 7.01 107 102 31 26 NA (26.7)% 1.6 x 1.4 x NA NA NA NA 10.1% (1.8)% 95.8% 64.2 % 5.4 % (42.9)% WageWorks 53.33 1,898 1,564 413 79 (5.0)% (17.4)% 5.8 x 4.7 x 21.8 x 17.5 x 55.6 x 45.9 x 24.9% 24.9% 21.1% 62.6 % 26.8 % 13.0 % Workday 84.41 15,869 14,505 1,858 494 (7.7)% 3.4 % 18.4 x 12.7 x NA NA NA NA 45.1% NA 32.8% 66.4 % 0.8 % (7.7)% M ean 2,604 2,422 266 84 (13.6)% (0.7)% 7.8 x 6.1 x 37.0 x 29.6 x 82.0 x 62.8 x 22.9% 14.5% 28.9% 64.5 % 5.0 % (7.0)% M edian 1,047 1,045 50 26 (10.0)% (1.2)% 5.8 x 4.7 x 39.3 x 30.2 x 80.5 x 51.0 x 23.3% 18.7% 21.1% 64.2 % 5.4 % (6.5)%
Licensed Software Leaders IBM 160.50 158,642 190,965 8,481 40,804 (16.6)% 0.0 % 2.1 x 2.2 x 7.8 x 8.1 x 9.9 x 10.0 x (7.9)% (2.8)% (1.3)% 50.0 % 26.3 % 17.6 % Microsoft 40.66 333,525 272,694 89,569 28,738 (0.8)% (12.5)% 2.9 x 2.9 x 8.3 x 8.2 x 15.3 x 15.4 x 1.1% 0.3% (0.6)% 65.9 % 35.3 % 23.7 % Oracle 43.15 188,439 176,919 43,777 32,257 5.5 % (4.0)% 4.6 x 4.6 x 9.4 x 9.6 x 14.8 x 14.7 x 0.0% (2.4)% 1.0% 61.1 % 48.5 % 33.9 % SAP 72.30 86,414 95,754 4,078 13,418 (10.8)% 2.4 % 4.5 x 4.5 x 11.2 x 12.9 x 16.1 x 18.2 x (0.1)% (13.6)% (11.8)% 72.2 % 40.3 % 25.3 % M ean 191,755 184,083 36,476 28,804 (5.7)% (3.5)% 3.5 x 3.5 x 9.2 x 9.7 x 14.0 x 14.6 x (1.7)% (4.6)% (3.2)% 62.3 % 37.6 % 25.1 % M edian 173,541 183,942 26,129 30,498 (5.8)% (2.0)% 3.7 x 3.7 x 8.8 x 8.9 x 15.1 x 15.1 x (0.0)% (2.6)% (1.0)% 63.5 % 37.8 % 24.5 %
*Sorted alphabetically within market segment
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 51 Investment Banking Advisors 51 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 3/ 31/15 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 73.94 36,990 35,715 3,177 1,902 12.5 % 1.7 % 8.4 x 6.9 x 30.7 x 19.2 x 51.0 x 31.8 x 21.1% 60.0% 60.6% 85.0 % 27.3 % 17.3 % Bazaarvoice 5.65 449 401 105 57 (22.6)% (29.7)% 2.2 x 2.0 x NA NA NA NA 9.1% 93.0% 57.7% 64.4 % (6.8)% (10.5)% Callidus 12.68 679 657 37 15 1.3 % (22.4)% 4.8 x 4.0 x 42.5 x 30.2 x 84.5 x 51.0 x 20.4% 40.5% 65.8% 59.7 % 11.3 % 5.2 % Constant Contact 38.21 1,228 1,065 163 0 56.2 % 4.1 % 3.2 x 2.7 x 17.6 x 14.1 x 35.1 x 28.0 x 17.0% 24.8% 25.3% 72.5 % 18.3 % 10.8 % Criteo 39.50 2,410 2,074 351 15 (2.6)% (2.3)% 2.3 x 4.3 x 20.4 x 17.0 x 36.7 x 37.3 x (47.0)% 20.0% (1.5)% 35.9 % 11.3 % 7.5 % Google 554.70 375,260 320,642 62,633 8,015 (0.5)% 4.5 % 4.9 x 4.2 x 12.5 x 10.9 x 21.7 x 19.3 x 14.6% 14.6% 12.2% 61.6 % 38.9 % 26.6 % Hubspot 39.90 1,288 1,164 124 0 NA 18.7 % 10.0 x 7.2 x NA NA NA NA 39.2% (17.1)% 79.4% 68.0 % (26.4)% (50.9)% Jive Softw are 5.13 382 274 114 6 (36.0)% (14.9)% 1.5 x 1.4 x NA NA NA NA 10.4% NA 13.8% 62.7 % (3.1)% (10.7)% Marchex 4.08 172 92 80 0 (61.2)% (11.1)% 0.5 x 0.7 x 6.7 x 8.0 x 25.5 x 32.4 x (24.6)% (15.8)% NA 37.3 % 7.4 % 3.5 % Marin Softw are 6.29 231 166 68 3 (40.5)% (25.7)% 1.7 x 1.4 x NA NA NA NA 15.7% 40.3% 24.5% 64.2 % (19.0)% (26.2)% Marketo 25.62 1,077 970 113 5 (21.6)% (21.7)% 6.5 x 4.7 x NA NA NA NA 37.1% (78.7)% (22.7)% 66.1 % (13.2)% (18.0)% Millennial Media 1.45 202 153 49 1 (79.0)% (9.4)% 0.5 x 0.5 x NA NA NA NA 9.0% (27.7)% 26.4% 39.3 % (6.6)% (12.4)% Nasmedia 29.33 242 208 34 0 80.7 % 34.2 % 8.9 x 6.3 x 29.7 x 19.1 x 69.8 x 26.5 x 41.8% 56.0% 163.3% NA 29.9 % 14.9 % Rocket Fuel 9.20 387 367 107 87 (78.5)% (42.9)% 0.9 x 0.7 x NA NA NA NA 31.1% NA (72.0)% 45.7 % (1.4)% (7.1)% Rubicon Project 17.92 676 579 97 0 NA 11.0 % 4.6 x 3.3 x 30.3 x 27.6 x NA NA 40.9% 9.9% NA 83.4 % 15.2 % 3.4 % salesforce.com 66.81 42,157 43,359 995 2,198 17.0 % 12.6 % 8.1 x 6.7 x 50.0 x 39.4 x 128.5 x 97.2 x 21.2% 27.0% 32.2% 76.0 % 16.1 % 6.0 % TechTarget 11.53 379 355 25 0 59.9 % 1.4 % 3.3 x 2.9 x 16.4 x 12.4 x 41.2 x 28.4 x 14.7% 32.5% 45.0% 73.6 % 20.3 % 9.1 % TubeMogul 13.82 412 367 47 1 NA (38.7)% 3.2 x 2.5 x NA NA NA NA 30.9% NA NA 70.3 % 2.0 % (1.3)% Yahoo! 44.44 41,597 34,819 7,995 1,217 23.8 % (12.0)% 7.5 x 8.0 x 25.6 x 31.0 x 28.3 x 49.1 x (5.8)% (17.6)% (42.3)% 71.9 % 29.5 % 34.1 % M ean 26,643 23,338 4,016 712 (5.7)% (7.5)% 4.4 x 3.7 x 25.7 x 20.8 x 52.2 x 40.1 x 15.6% 16.4% 29.2% 63.2 % 8.0 % 0.1 % M edian 676 579 107 5 (1.5)% (9.4)% 3.3 x 3.3 x 25.6 x 19.1 x 38.9 x 32.1 x 17.0% 22.4% 25.9% 65.2 % 11.3 % 3.5 %
*Sorted alphabetically within market segment
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 52 Investment Banking Advisors 52 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 3/ 31/15 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 21.66 2,510 3,338 77 906 9.8 % 7.4 % 3.3 x 3.2 x 12.8 x 11.8 x 30.2 x 29.3 x 4.3% 8.6% 3.3% 55.2 % 25.6 % 8.2 % Advent 44.11 2,320 2,504 36 220 50.2 % 44.0 % 6.3 x 6.0 x 18.6 x 16.8 x 30.6 x 28.6 x 6.0% 10.5% 7.2% 72.1 % 33.9 % 19.5 % Athenahealth 119.39 4,560 4,654 115 209 (25.5)% (18.1)% 6.2 x 5.1 x 31.1 x 29.1 x 92.6 x NA 22.2% 6.6% (9.7)% 59.8 % 19.9 % 6.5 % Blackbaud 47.38 2,194 2,460 15 281 51.4 % 9.5 % 4.4 x 3.9 x 17.4 x 18.1 x 37.0 x 32.8 x 12.4% (3.8)% 12.9% 51.6 % 25.0 % 10.4 % Castlight Health 7.76 713 521 192 0 (63.4)% (33.7)% 11.4 x 6.8 x NA NA NA NA 66.9% (2.5)% 45.2% 39.1 % (149.6)% (208.8)% Cvent 28.04 1,160 993 168 0 (22.4)% 0.7 % 7.0 x 5.6 x 55.3 x 54.7 x 121.9 x 121.9 x 25.3% 1.2% 0.0% 70.2 % 12.6 % 7.0 % Dealertrack 38.52 2,094 2,651 334 891 (21.7)% (13.1)% 3.1 x 2.4 x 13.8 x 11.9 x 25.3 x 26.6 x 27.7% 15.5% (4.8)% 46.7 % 22.5 % 9.3 % Descartes 15.09 1,139 1,021 118 0 7.8 % 1.3 % 6.0 x 5.4 x 19.7 x 17.1 x 32.5 x 24.4 x 11.2% 14.8% 32.9% 67.9 % 30.4 % 19.5 % Earthport 0.65 311 258 53 0 (0.7)% (4.1)% 11.6 x 8.7 x NA NA NA NA 34.0% 107.0% 74.3% 74.4 % (47.2)% (51.1)% Ebix 30.38 1,071 1,141 53 122 78.0 % 78.8 % 5.3 x 4.6 x 12.8 x 12.8 x 17.9 x 17.1 x 15.2% (0.5)% 4.6% 77.9 % 41.7 % 30.2 % Ellie Mae 55.31 1,613 1,537 76 1 91.8 % 37.2 % 9.5 x 7.5 x 33.4 x 38.8 x 49.4 x 59.8 x 27.3% (14.0)% (17.4)% 71.3 % 28.5 % 20.5 % Envestnet 56.08 1,937 1,873 210 145 39.6 % 14.1 % 5.4 x 4.4 x 33.5 x 24.3 x 71.0 x 53.4 x 22.5% 38.0% 32.9% 27.0 % 16.0 % 8.4 % Fleetmatics 44.85 1,700 1,549 175 25 34.1 % 26.4 % 6.7 x 5.4 x 20.9 x 16.8 x 40.8 x 34.9 x 24.7% 24.5% 16.9% 75.2 % 31.9 % 18.3 % GrubHub 45.39 3,797 3,483 313 0 NA 25.0 % 13.7 x 9.9 x 44.3 x 32.2 x 130.0 x 73.3 x 38.5% 37.3% 77.3% 65.5 % 31.0 % 11.2 % Higher One 2.42 115 177 40 102 (66.5)% (42.5)% 0.8 x 0.8 x 3.0 x 3.9 x 4.1 x 6.1 x (5.1)% (23.9)% (32.6)% 53.5 % 27.1 % 12.9 % IDOX 0.59 210 235 9 35 (6.8)% (4.1)% 2.4 x 2.4 x 11.1 x 8.8 x 22.6 x 12.5 x 2.8% 25.3% 81.0% 89.4 % 21.9 % 10.0 % Inovalon 30.21 4,460 4,597 163 300 NA NA 12.7 x 10.6 x 35.0 x 29.2 x 60.1 x 55.3 x 20.5% 19.9% 8.7% 68.8 % 36.4 % 18.5 % JUST EAT 6.48 3,682 3,426 256 0 NA 34.2 % 14.0 x 11.3 x 73.5 x 44.3 x 44.2 x 77.0 x 23.9% 66.1% (42.7)% 89.7 % 19.1 % 33.2 % Linx 14.60 683 614 96 27 (26.2)% (23.2)% 4.4 x 4.4 x 15.0 x 16.0 x 24.2 x 22.8 x (0.6)% (6.6)% 5.8% 72.1 % 29.6 % 20.4 % Medidata Solutions 49.04 2,668 2,637 273 241 (9.8)% 2.7 % 7.9 x 6.6 x 35.5 x 28.0 x 67.2 x 56.3 x 19.7% 26.7% 19.2% 74.7 % 22.2 % 12.0 % Mix Telematics 0.27 215 142 76 3 (38.0)% 2.7 % 1.2 x 1.2 x 5.7 x 5.7 x 16.5 x 15.7 x (1.2)% (0.5)% 5.4% 67.4 % 21.2 % 11.1 % NIC 17.67 1,169 1,081 88 0 (8.5)% (1.8)% 4.0 x 3.7 x 15.0 x 14.3 x 29.9 x 28.3 x 7.8% 4.6% 5.8% 40.8 % 26.5 % 14.2 % OPOWER 10.13 514 389 126 1 NA (28.8)% 3.0 x 2.7 x NA NA NA NA 14.4% (72.6)% (42.2)% 65.6 % (10.3)% (15.3)% Playtech 11.56 3,393 2,852 839 299 2.5 % 7.6 % 5.2 x 5.3 x 11.1 x 12.1 x 18.5 x 17.2 x (2.1)% (8.4)% 7.8% 100.0 % 46.7 % 33.3 % Q2 Holdings 21.14 770 682 89 1 36.1 % 12.2 % 8.6 x 6.5 x NA NA NA NA 32.8% 2.8% 8.5% 41.8 % (13.2)% (18.0)% RealPage 20.14 1,590 1,583 27 20 10.9 % (8.3)% 3.9 x 3.5 x 22.4 x 19.3 x 51.6 x 45.7 x 12.6% 15.9% 13.0% 56.8 % 17.4 % 7.4 % Sabre 24.30 6,563 9,491 156 3,084 NA 19.9 % 3.6 x 3.4 x 12.5 x 10.5 x 17.3 x 23.3 x 6.0% 19.1% (25.8)% 34.0 % 28.8 % 13.2 % Solera 51.66 3,471 5,362 393 2,284 (18.4)% 0.9 % 4.9 x 4.5 x 11.9 x 11.1 x 17.0 x 15.6 x 7.9% 7.6% 8.9% 67.1 % 41.2 % 19.1 % SS&C 62.30 5,255 5,785 110 639 55.7 % 6.5 % 7.5 x 6.7 x 18.1 x 16.0 x 26.4 x 23.7 x 12.8% 12.9% 11.5% 46.5 % 41.7 % 26.8 % Temenos 34.52 2,265 2,361 196 292 (1.9)% (3.4)% 5.0 x 4.4 x 13.5 x 12.2 x 23.8 x 21.2 x 15.7% 10.4% 12.5% 75.4 % 37.4 % 21.5 % Textura 27.18 697 631 67 0 7.8 % (4.5)% 10.0 x 7.0 x NA 75.9 x NA NA 42.9% 202.2% 147.6% 79.6 % (12.9)% (14.8)% TrueCar 17.85 1,435 1,295 148 7 NA (22.1)% 6.3 x 4.6 x NA 45.8 x NA NA 37.7% NA 174.4% 91.5 % 1.0 % (6.0)% Urbanise 0.70 154 141 13 0 NA (3.7)% 38.2 x NA 48.0 x NA 104.3 x NA NA NA NA 57.2 % 79.6 % 40.1 % Yodlee 13.46 396 325 74 2 NA 10.3 % 3.6 x 3.0 x NA 32.9 x NA NA 21.7% 117.1% NA 60.5 % 5.1 % (1.2)% M ean 1,965 2,111 152 298 6.4 % 3.9 % 7.3 x 5.2 x 23.9 x 23.1 x 44.7 x 36.9 x 18.4% 20.7% 20.1% 64.3 % 17.3 % 4.3 % M edian 1,601 1,543 113 26 0.9 % 1.3 % 5.7 x 4.6 x 18.1 x 16.8 x 30.6 x 28.3 x 15.7% 10.4% 8.6% 67.2 % 25.3 % 11.6 %
*Sorted alphabetically within market segment
Capstone Partners CapstoneInvestment BankingPartners Advisors Over a Decade of M&A Excellence 53 Investment Banking Advisors 53 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 54 Investment Banking Advisors WORLD CLASS WALL STREET EXPERTISE.54 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 55 Investment Banking Advisors 55 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 56 Investment Banking Advisors 56 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 57 Investment Banking Advisors 57