U.S. Internet & Digital Media Landscape
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U.S. Internet & Digital Media Landscape Mark Watt Managing Director Head of Internet & Digital Media Investment Banking April 2011 Table of Contents Table of Contents I. Introduction II. M&A Market Overview III. Equity Capital Markets Overview IV. Private Placement Market Overview V. William Blair & Company Overview Appendix A. Selected Industry Trading Comps B. Selected M&A Activity C. Internet & Digital Media Landscape D. Other Introduction Introduction Mark Watt Mark Watt is the Head of Internet and Digital Media at William Blair & Company. Mark has over 15 years of investment banking experience, having advised on more than $10 billion of equity and debt financings as well as more than $20 billion of mergers and acquisitions. Mark was previously a partner at America’s Growth Capital in the technology investment banking group. Before that, Mark was a managing director at TriplePoint Capital and also spent ten years with Merrill Lynch & Co, Inc. Mark received a CA from the Institute of Chartered Accountants and an LLB from the University of Aberdeen, both in Scotland, United Kingdom. Selected Transaction Experience $100,000,000 $800,000,000 $430,000,000 Not Disclosed Not Disclosed Not Disclosed has agreed to be acquired by has been acquired by has been acquired by Secondary Common Initial Public Offering Rovi IPO & Follow on Playdom Playdom Stock Placement On File February 2011 December 2010 May 2010 November 2009 November 2009 Not Disclosed $8,100,000,000 $50,000,000 $1,000,000,000 $625,000,000 £162,000,000 has been acquired by has been acquired by has been acquired by has been acquired by Google Nokia Microsoft Initial Public Offering Google Private Placement September 2009 July 2008 December 2007 October 2007 September 2007 June 2007 $4,900,000,000 $5,436,000,000 $70,000,000 $100,000,000 $4,100,000,000 $821,630,000 & has acquired Sabre Holdings has been acquired by has acquired Corporation HP Initial Public Offering Private Placement Skype Follow-On March 2007 November 2006 October 2006 November 2005 October 2005 January 2004 1 Introduction William Blair’s Internet & Digital Media Team Senior Management Israel / Poalim Capital Markets John Ettelson, Brent Gledhill, Roy David Talor Erdan Chief Executive Officer Head of Corporate Finance [email protected] [email protected] [email protected] [email protected] 972-3-5675 684 972-3-5676 152 312-364-8620 312-364-5475 North America Europe Asia / Pacific Mark Watt Scott Mattson Matt Gooch Henry Lu mwatt@williamblair. com smattson@williamblair. com mgooch@williamblair. com [email protected] 415-248-5910 617-235-7532 011-44-20-7868-4478 011-86-21-2327-2288 Mark McNay James Hoak Stewart Licudi Andrew Kaye [email protected] [email protected] [email protected] [email protected] 415-248-5902 415-248-5908 011-44-20-7868-4512 011-86-21-2327-2233 USU.S. VCCVC Coverage M&AiitiMergers & Acquisitions EitCitlMktEquity Capital Markets RhResearch Brandon Lower Mark Brady Brett Paschke Ralph Schackart [email protected] [email protected] [email protected] [email protected] 212-237-2716 312-364-8853 312-364-8657 312-364-8753 Anu Sharma Dan Connolly Patrick Prendergast Jack Murphy [email protected] [email protected] pprenderg ast@ williamblair.com jmurphy@williamblair. com 415-248-5912 312-364-8544 415-248-5907 312-364-8584 Institutional Sales & Trading Private Placements Debt Capital Markets Meggan Friedman [email protected] John Moore Kelly Martin Christine Kelly 312-364-8664 [email protected] [email protected] [email protected] 331212-363644-8836 331212-363644-88388322 331212-363644-8383 2 Introduction Selected Internet & Digital Media Credentials $20,000,000 $15,000,000 $25,000,000 $50,000,000 $175,000,000 $100,000,000 $66,000,000 Digital Content Loyalty Coupon Website Services Marketplace Company Company Private Placement Private Placement Private Placement Initial Public Offering Initial Public Offering Initial Public Offering Initial Public Offering Pending Pending Pending On File On File On File On File $99,750,000 $800,000,000 $148,350,000 $18,500,000 $249,396,000 $230,000,000 has been acquired by Private Placement Follow-On Offering Rovi Follow-On Offering Follow-On Strategic Advisory Initial Public Offering February 2011 February 2011 December 2010 December 2010 December 2010 October 2010 June 2010 Not Disclosed $33,465,000 $8,000,000 * Not Disclosed * $118,594,000 Not Disclosed * Not Disclosed Subordinated Debt has been acquired by Financing from Triangle has been acquired by Secondary Common has been acquired by Playdom Follow-On Capital Corporation Playdom Initial Public Offering Stock Placement Channel Intelligence, Inc. May 2010 December 2009 December 2009 November 2009 November 2009 November 2009 September 2009 Not Disclosed * Not Disclosed Not Disclosed $24,000,000 $158,548,000 Not Disclosed $8,100,000,000 * Senior Term Loan & has been acquired by Series E has acquired Subordinated Notes has been acquired by has been acquired by Google Preferred Stock Cent ive, Inc . Placement Agent Follow-On ReturnPath Nooa,kia, September 2009 March 2009 January 2009 December 2008 December 2008 August 2008 July 2008 * Represents transactions completed by a William Blair banker while at prior firms. 3 Introduction Selected Internet & Digg()ital Media Credentials (cont.) $105,000,000 $83,536,000 Not Disclosed $150,686,000 Not Disclosed $50,000,000 * Not Disclosed has completed a recapitalization by has been acquired by has been acquired by has acquired has been acquired by 2020 Global DirecTV Follow-On Investments Follow-On Sword Group SA Microsoft Zendor.com Ltd July 2008 April 2008 March 2008 February 2008 December 2007 December 2007 December 2007 $107,812,500 $123,280,000 $1,000,000,000 * $625,000,000 * $66,000,000 $333,000,000 * $65,625,000 has been acquired by Initial Public Offering Initial Public Offering Initial Public Offering Google Initial Public Offering Initial Public Offering Initial Public Offering November 2007 October 2007 October 2007 September 2007 August 2007 August 2007 August 2007 $150,000,000 $145,000,000 Not Disclosed $100,568,000 £162,000,000 * $256,000,000 $68,331,000 has merged with has been acquired by AdVenture Partners Initial Public Offering Logix Microsystems Initial Public Offering Private Placement Follow-On Follow-On August 2007 July 2007 July 2007 June 2007 June 2007 May 2007 April 2007 $120,750,000 $4,900,000,000 * $70,000,000 * $237,600,000 $1,500,000,000 * $152,000,000 * $195,500,000 & has acquired Sabre Holdings Convertible Preferred Follow-On Corporation Initial Public Offering Follow-On Initial Public Offering Stock Offering Initial Public Offering March 2007 March 2007 October 2006 October 2006 October 2006 April 2006 December 2005 * Represents transactions completed by a William Blair banker while at prior firms. 4 Introduction Selected Internet & Digg()ital Media Credentials (cont.) $51,750,000 * $170,000,000 * $100,000,000 * $4,100,000,000 * Not Disclosed $1,100,000,000 * has been acquired by has acquired Initial Public Offering Strategic Advisory Initial Public Offering Private Placement Skype Aegis Group Plc Follow-On December 2005 December 2005 December 2005 November 2005 October 2005 May 2005 May 2005 $175,955,000 $569,250,000 $42,500,000 $102,000,000 * $42,500,000 $1,000,000,000 * $160,000,000 has been acquired by Initial Public Offering Initial Public Offering Initial Public Offering Initial Public Offering Initial Public Offering Initial Public Offering aQuantive February 2005 February 2005 September 2004 September 2004 September 2004 August 2004 July 2004 $56,580,000 $126,500,000 $88,000,000 * $48,000,000 $821,630,000 * $64,141,000 $133,256,000 Initial Public Offering Initial Public Offering Initial Public Offering Follow-On Follow-On Follow-On Follow-On June 2004 June 2004 May 2004 March 2004 January 2004 December 2003 November 2003 $148,800,000 $75,000,000 $25,875,000 $131,100,000 $82,000,000 * $80,730,000 $373,750,000 + CVR has been acquired by Symphony Technology Group Initial Public Offering Follow-On Follow-On Initial Public Offering Initial Public Offering Initial Public Offering November 2003 July 2003 February 2003 June 2002 May 2002 February 2002 February 2002 * Represents transactions completed by a William Blair banker while at prior firms. 5 Introduction Sonic Solutions has been Acqqyuired by Rovi Corporation William Blair’s Role $800,000,000 William Blair & Company acted as exclusive financial advisor to William Blair & Company Sonic Solutions in the transaction is pleased to announce that: William Bla ir & Company prov ide d a fa irness op in ion to Si’Sonic’s Board of Directors Transaction extends the William Blair Internet and Digital Media has been acquired by Team’s track record of executing landmark deals in the industry Transaction Overview On February 17, 2011, Rovi Corporation completed the acquisition of Sonic Solutions for an equity value of The undersigned acted as exclusive financial approximately $800 million. advisor to Sonic Solutions Sonic enables the creation, distribution and enjoyment of digital media from Hollywood to home through brands such as Roxio, RoxioNow, DivX and Main Concept February 2011 Rovi delivers solutions that enable consumers to intuitively Announced Date: December 22, 2010 connect to new entertainment and also provides entertainment discovery solutions for television, movies, music and photos Closed Date: February 17, 2011 Target: Sonic Solutions (NASDAQ: SNIC) Significance of Transaction Acquiror: Rovi Corporation (NASDAQ: ROVI) As a combined company, Rovi and Sonic will power the next Equity Value: $800.0 million wave of digital entertainment offerings with content discovery, delivery, and enhanced interactivity capabilities that support (1) Premium : 38.2% advertising and drive consumer engagement Consideration: 55% cash / 45% stock The companies’ customers will benefit from synergistic technologies that allow consumers to create, find, access, (1) Premium to Sonic’s 30 day average per share closing price as of announcement.