TECHNOLOGY, MEDIA, & TELECOM QUARTERLY SOFTWARE SECTOR REVIEW │ 3Q 2016 www.harriswilliams.com Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorised and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business. TECHNOLOGY, MEDIA, & TELECOM QUARTERLY SOFTWARE SECTOR REVIEW │ 3Q 2016 HARRIS WILLIAMS & CO. OVERVIEW HARRIS WILLIAMS & CO. (HW&CO.) GLOBAL ADVISORY PLATFORM CONTENTS . DEAL SPOTLIGHT . M&A TRANSACTIONS – 2Q 2016 KEY FACTS . SOFTWARE M&A ACTIVITY . 25 year history with over 120 . SOFTWARE SECTOR OVERVIEWS closed transactions in the . SOFTWARE PRIVATE PLACEMENTS last 24 months OVERVIEW . SOFTWARE PUBLIC COMPARABLES . Approximately 250 OVERVIEW professionals across seven . TECHNOLOGY IPO OVERVIEW offices in the U.S. and . DEBT MARKET OVERVIEW Europe . APPENDIX: PUBLIC COMPARABLES DETAIL . Strategic relationships in India and China HW&Co. Office TMT CONTACTS Network Office UNITED STATES . 10 industry groups Jeff Bistrong Managing Director HW&CO. TECHNOLOGY, MEDIA & TELECOM (TMT) GROUP FOCUS AREAS [email protected] Sam Hendler SOFTWARE / SAAS INTERNET & DIGITAL MEDIA Managing Director [email protected] . Enterprise Software . IT and Tech-enabled . AdTech and Marketing . Digital Media and Content Services Solutions Mike Wilkins . Data and Analytics . eCommerce Managing Director . Infrastructure and . Data Center and . Consumer Internet . Mobile [email protected] Managed Services Security Software EUROPE Thierry Monjauze TMT VERTICAL FOCUS AREAS Managing Director [email protected] . Education . Fintech . Manufacturing . Public Sector and Non-Profit . Energy, Power, and . Healthcare IT . Professional Services . Supply Chain, Transportation, TO SUBSCRIBE PLEASE EMAIL: Infrastructure and Logistics *[email protected] SELECT RECENT HW&CO. TMT TRANSACTIONS Baarsma B2C trades as: has received a majority has been has been has been acquired by has acquired has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by investment from recapitalized by recapitalized by PAGE | 1 TECHNOLOGY, MEDIA, & TELECOM QUARTERLY SOFTWARE SECTOR REVIEW │ 3Q 2016 CASE STUDY: DAXKO HW&Co.’s TMT Group advised Pamlico Capital and its portfolio company, Daxko, on a majority recapitalization transaction led by GI Partners. Date Closed: . Leading provider of SaaS-based software and services to member-based health and wellness centers, offering end- 9/22/2016 to-end solutions for club and member management, including engagement and payments solutions. Relevant Sectors: a portfolio company of . Charlotte-based private equity firm targeting investments SaaS / Application across the business & technology services, communications, Software and healthcare industries, and currently investing out of its has been recapitalized by $650 million Pamlico Capital III fund. Fintech / Payments Non-Profit Software . San Francisco-based private equity firm targeting investments in the software, tech-enabled services, IT Health & Wellness infrastructure, and healthcare sectors, and actively investing out of its $2 billion GI Partners Fund IV fund. THE DEAL . Positions Daxko well to meet the increasingly complex needs of multi-site and multi-purpose health and wellness facility operations and gives GI Partners the ability to leverage Daxko’s market leadership, scale, and history of successful strategic acquisitions as a platform for further industry consolidation. HW&CO. DEAL CONTACTS Jeff Bistrong Tyler Dewing Priyanka Naithani Managing Director Director Vice President [email protected] [email protected] [email protected] Office: (617) 654-2102 Office: (617) 654-2133 Office: (617) 654-2115 PAGE | 2 TECHNOLOGY, MEDIA, & TELECOM QUARTERLY SOFTWARE SECTOR REVIEW │ 3Q 2016 SELECT SOFTWARE M&A TRANSACTIONS – 3Q 2016 Announced EQT’s pending take-private of Press Ganey . Press Ganey provides patient-experience measurement, performance analytics, and strategic advisory software and services for healthcare organizations across the continuum of care. Partnering with more than 26,000 healthcare organizations, Press Ganey leads the industry in using data and analytics to help Ent. Value: $2,284.5M EV / Rev: 6.6x transform and advance patient-centered care in the US and internationally. Revenue: $344.3M EV / EBITDA: 21.4x . Post acquisition, EQT will leverage its deep platform and healthcare expertise to support Press Ganey’s expansion both organically and through strategic acquisitions on a global basis. Announced Verizon’s pending acquisition of Fleetmatics . Fleetmatics provides SaaS-based mobile workforce and fleet management software that allows service-based businesses of all sizes to improve the productivity of their mobile workforces. Serving approximately 38,000 customers and 757,000 subscribed vehicles worldwide, the company’s solutions provide fleet Ent. Value: $2,183.4M EV / Revenue: 7.0x operators visibility into vehicle location, fuel usage, and other insights that allow clients to increase revenue and reduce costs. Revenue: $310.7M EV / EBITDA: 25.9x . Verizon Telematics plans to combine Fleetmatics with recently acquired Telogis to become a global leader in fleet and mobile workforce management. September 16, 2016 Thoma Bravo’s take-private of Imprivata . Imprivata provides cloud-based, single sign-on and access-management security software for the healthcare sector that provides improved workflows, increased data security, and compliance with government regulations. The company’s mission-critical solutions allow hospitals to identify patients at registration and allow providers to conveniently Ent. Value: $442.5M EV / Revenue: 3.4x access patient health information (“PHI”), communicate PHI across devices, and transact PHI for important clinical workflows. Revenue: $131.1M EV / EBITDA: NA . Leveraging its deep experience in both security and healthcare IT, Thoma Bravo bolsters Imprivata’s ability to expand its market presence organically by providing additional high-value products and inorganically through strategic acquisitions. August 31, 2016 Vista Equity Partners’ acquisition of Regulatory DataCorp . Regulatory DataCorp provides counterparty risk and financial regulatory compliance data and software solutions to financial institutions and technology companies worldwide. The company’s solutions are used by Fortune 100 companies across a range of industries and combine comprehensive data, a Ent. Value: NA EV / Revenue: NA scalable platform, and tailored analytics to provide precise risk alerts and ongoing monitoring. Revenue: NA EV / EBITDA: NA . Vista Equity Partners’ deep focus on software, data, and tech-enabled businesses will allow Regulatory DataCorp to increase capital investment in risk and compliance software at a time of significant growth in the industry. August 30, 2016 GE Transportation’s acquisition of ShipXpress . ShipXpress provides cloud-based software solutions that enable transportation, industrial, and commodity trading businesses to operate efficiently and collaborate with their supply chain partners. The company works with major North American railroads and Fortune 500 companies to deliver customized transportation Ent. Value: NA EV / Revenue: NA management solutions that help businesses manage data, simplify manual processes, and improve analysis. Revenue: NA EV / EBITDA: NA . Post acquisition, GE Transportation will deliver one of the industry’s most advanced and scalable cloud-based solutions by combing ShipXpress’ software products with GE’s existing sensing technology platform, Predix. PAGE | 3 TECHNOLOGY, MEDIA, & TELECOM QUARTERLY SOFTWARE SECTOR REVIEW │ 3Q 2016 SOFTWARE ACQUISITION ACTIVITY – STRATEGIC ACQUIRERS MOST ACTIVE STRATEGIC ACQUIRERS OF SOFTWARE ASSETS BY VOLUME (# of Transactions) . The 10 most active strategic software acquirers registered 66 acquisitions in YTD 2016, with Google 13 2016 YTD and IBM being the most active with 25 between them. 2015 12 12 2014 . Google has been actively pursuing 9 assets that enhance its enterprise 2013 8 6 cloud business, while IBM focuses on 13 2012 its stated strategic imperatives – big 18 3 data and analytics, cloud platform 28 10 6 9 8 1 expansion, mobile, social, and 4 3 2 4 3 3 9 3 1 security. 10 6 8 5 3 8 9 1 4 5 5 7 9 12 5 9 9 7 10 8 7 5 3 2 5 5 GLOBAL STRATEGIC ACQUIRER SOFTWARE M&A ACTIVITY BY VOLUME (# of Transactions) . Global strategic software M&A registered 359 transactions in 3Q 2016, a slight uptick from a slow 2Q, and demonstrating promising momentum going into 4Q 2016. Despite M&A volumes being down relative to 2015, both large tech and non-traditional software buyers continue to view M&A as a core 454 437 434 412 402 406 growth initiative. However, recent 371 352 352 340 341 359 M&A activity suggests that 333 327 324 309 strategics are focusing on bolt-ons rather than large, transformational deals. 4Q '12 1Q '13 2Q '13 3Q '13 4Q '13 1Q '14 2Q '14 3Q '14 4Q '14 1Q '15 2Q '15 3Q '15 4Q '15 1Q '16 2Q '16 3Q '16 Note: Includes control investments only. PAGE | 4 TECHNOLOGY, MEDIA, & TELECOM QUARTERLY SOFTWARE SECTOR REVIEW │ 3Q 2016 SOFTWARE ACQUISITION ACTIVITY – PRIVATE EQUITY MOST ACTIVE PRIVATE EQUITY BUYERS OF NEW SOFTWARE PLATFORMS BY VOLUME (# of Platform Transactions) . The