Monthly European TMT Private Investments and M&A Transactions Bulletin – September 2012
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September 2012 Technology / Medtech / Internet / Digital Media / Telecoms / Cleantech Monthly European TMT Private Investments and M&A Transactions Bulletin – September 2012 Published by Go4Venture Research, the Equity Research unit of Go4Venture Advisers LLP. About Go4Venture Advisers Providing innovative, fast-growing companies and their investors with independent corporate finance advice to help them evaluate, develop and execute growth strategies Equity Capital Markets (ECM) Equity private placements Growth equity financings and secondaries Pre-IPO advisory Mergers & Acquisitions (M&A) Sellside Buyside / Buy and build Valuation services Go4Venture Advisers LLP is authorised and regulated by the Financial Services Authority (FSA). © Go4Venture 2012 Page 1 September 2012 Contents This Month in Brief 3 Private Investments 1.1 - Headline Investment Index (HTI) 5 1.2 - Large Headline Investment Summary 6 1.3 - Large Headline Investment Profiles 8 M&A Transactions 2.1 - M&A Activity Index 24 2.2 - Top 5 Global TMT M&A Transactions Summary 25 Headline European VC & PE-Backed M&A Transactions: 2.3 - Summary 27 2.4 - Profiles 28 List of Acronyms 33 About this Bulletin The Go4Venture Monthly European TMT Private Investments and M&A Transactions Bulletin provides a summary of corporate finance activity among emerging European TMT companies: Private Investments, i.e. Venture Capital (VC) and Private Equity (PE) financings, including growth equity, financing rounds with single secondaries components (recapitalisations); and M&A Transactions where the sellers are VC and PE-backed European companies, including all majority transactions with no new investment going into the business (e.g. acquisitions, MBOs and other buyouts). Investment activity is measured using Go4Venture’s European Tech Headline Transactions Index (HTI), which is based on the number and value of transactions reported in professional publications. M&A activity is measured using data from a combination of external sources, primarily Capital IQ, with complementary reporting from 451 Group and VentureSource. Europe is defined as Western, Central and Eastern Europe, excluding Israel. For more details, please refer to the Methodology Note available at www.go4venture.com/research/hti.htm. Please note that no part of the Bulletin can be reproduced unless content is duly attributed to Go4Venture and the details of republishing are notified to [email protected]. © Go4Venture 2012 Page 2 September 2012 This Month in Brief Dear Clients and Friends, Welcome to the latest edition of the Go4Venture Monthly European TMT Bulletin, featuring our proprietary Headline Transaction Index (HTI) of investment activity, as well as a summary of VC & PE-backed TMT M&A exits of $50 million or more. Europe Venture Financing: Beginning of a Lift-Off? Following an unusually busy August, September proved to be another market high, admittedly on the investment side rather than on the exit front. We seem to be getting into this part of the cycle when investors are now increasing their commitment (for the right sort of investments of course - see below), while exits haven’t proven them right just yet. Given the exciting internet and late-stage investments of the past 3-4 years, we firmly believe it is now only a matter of time before European venture financing finally makes its mark as a bona fide investment class. Of course, this is if you define venture financing as firmly embracing growth equity and much higher ambitions around aggressive internationalisation from the word go. Investments September 2012 is a bit of a milestone with our investment summary table splitting over two pages for the first time ever, reflecting the large number of Large HTI transactions (above £5mn, €7.5mn or $10mn). September statistics are quite striking: 14 Large HTI transactions vs. 8 during the same month last year Of these, 7 are Landmark transactions (more than €20mn), to be compared to 24 in the whole of last year! The mix is very broad with internet services (primarily e-tailing ) leading the pack, followed by cleantech (technology infrastructure for waste or energy conservation or carbon reduction), the rest being split between hardware, software (SaaS), digital media and telecoms From a geography standpoint, the UK is well ahead of others (5 out of 14 profiled transactions i.e. the UK manages to get more than its fair share of the larger financing transactions), with others trailing, and Germany and France doing no better than Russia (2 each). This stronger emphasis on larger transactions is partly driven by new entrants, first and foremost US funds focusing more on the European market (in September JP Morgan, General Atlantic and Insight Venture Partners) and corporate investors (Intel Capital, Rusnano and Softbank). It is also the result of more aggressive European funds which are surviving the cull that is currently under way and are now thriving. On this note, it is worth mentioning the wealth of post-summer fund closing announcements, including: Country leaders in France (such as Idinvest and Ventech for €100mn each) or Germany (Wellington for a €120mn dedicated life sciences fund). Early-stage funds: o Established players such as DN Capital in the UK (€50 million for a targeted €100m) or © Go4Venture 2012 Page 3 September 2012 Active Venture Partners in Spain (€54mn). Please note than both are now straddling geographies with one of DN’s partners in the US, and Active balancing its operations between Spain and the rest of Europe. o Newcomers, e.g. Connect Ventures (€39mn target), where principals are either ex entrepreneurs or ex Amadeus Capital and Doughty Hanson Technology Ventures. Sector specialists such as Demeter in France (€43mn first close) and Emerald Technology Partners in Switzerland (€100mn targeted) in cleantech. Exits The global TMT M&A environment continues to be utterly depressed, in line with what we’ve seen in previous months. It is quite striking that all September transactions are below the $1 billion mark. By contrast private TMT M&A transactions are doing rather well. In fact in 5 of the past 9 months, the value of 2012 total transactions was higher than in 2011. By number however 2012 is consistently lower than 2011, which suggests fewer, but comparatively bigger transactions for VC/PE-backed TMT companies. In fact, in this month’s edition, no less than two of these make it to the Global Top 5. The reason behind this activity is that, by using their financial firepower, financial and corporate investors are driving consolidation both in mature and emerging sectors: The global TMT M&A environment continues to be utterly depressed, in line with what we’ve seen in previous months. It is quite striking that all September transactions are below the $1 billion mark. By contrast private TMT M&A transactions are doing rather well. In fact in 5 of the past 9 months, the value of 2012 total transactions was higher than in 2011. By number however 2012 is consistently lower than 2011, which suggests fewer, but comparatively bigger transactions for VC/PE-backed TMT companies. In fact, in this month’s edition, no less than two of these make it to the Global Top 5. The reason behind this activity is that, by using their financial firepower, financial and corporate investors are driving consolidation both in mature and emerging sectors: In mature sectors, investment themes illustrated in September are SAP services (Lodestone), data services (At Tokyo) and distribution (SDG) In emerging industries, media is the segment where corporate investors are the most aggressive, in particular digital advertising (Publicis buying LBi) and classifieds (Ringier and Tamedia acquiring Jobs.ch and contributing their own operations). Our view is that the standards of venture financing have tremendously heightened since 2008. Investors’ appetite for risk has clearly diminished at earlier stages (putting the onus on entrepreneurs to get by in a much more resourceful manner), but investors are also prepared to invest much more substantial amounts on plays which are seemingly working. In effect, VCs are becoming more like PE players. And of course PE players are themselves getting involved in much smaller growth equity deals these days, changing the DNA of European venture financing in the process. Enjoy the reading. Please direct any questions or comments to [email protected]. If you do not wish to receive future HTI updates from us, please send an email with the title “unsubscribe” to [email protected]. The Go4Venture Team © Go4Venture 2012 Page 4 September 2012 1.1 - Headline Investment Index (HTI) Go4Venture HTI Index by Deal Value 500 450 2009 2010 mn) 400 2011 2012 € 350 300 250 200 150 100 ValueTransactions of ( perMonth 50 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec September 2011 2012 Year-to-Date 2011 2012 Landmark Deals # 1 7 Landmark Deals # 21 26 €m 72.6 280.5 €m 896.4 928.5 Headline Deals # 7 7 Headline Deals # 46 59 €m 69.9 85.6 €m 521.4 692.8 Small Deals # 22 28 Small Deals # 186 217 €m 71.9 87.6 €m 539.3 636.7 All Deals # 30 42 All Deals # 253 302 €m 214.5 453.8 €m 1,957.1 2,257.9 Go4Venture HTI Index by Cumulative Deal Value 3,000 2,500 2009 2010 mn) € 2011 2012 2,000 1,500 1,000 Total ValueTransactionsTotal of ( 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec © Go4Venture 2012 Page 5 September 2012 1.2 - Large Headline Investment Summary (>£5mn / €7.5mn / $10mn) Company Sector Round €mn Description Investors 1 MAPPER (Netherlands) Manufacturing C 65 Maskless lithography for ADP Industries, Demcon www.mapperlithography.com Process the semiconductor Twente, Dutch industry. Government, Hoving & Partners, Parcom Capital Management, Rusnano, Technolution. 2 Mimecast (UK) Software C 48 Cloud-based email Dawn Capital, Insight www.mimecast.com management for Venture Partners.