SOFTWARE SECTOR REPORT January 2019 DEAL DASHBOARD Software $69.0 Billion 734 $156.4 Billion 1234 2018 Financing Volume (1)(2) 2018 Financing Transactions (1)(2) 2018 M&A Volume 2018 M&A Transactions Select Financing Transactions Quarterly Financing Volume (1)(2) Quarterly M&A Volume Select M&A Transactions (3) Company Amount ($MM) $Bn $Bn Acquirer Target EV ($MM) $23 $80 $550 $33,435 $14 $17 $12 $15 $14 $11 $12 $500 $8,000 $32 $6 $20 $19 $25 $450 $13 $13 $12 $13 $4,750 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 $265 $4,400 Quarterly Financing Deal Count (1)(2) Quarterly M&A Deal Count $250 225 353 $2,100 291 319 187 250 289 287 268 298 264 156 160 159 161 155 167 $120 123 $2,080 $115 $2,000 $103 $1,940 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Last 12 Months Software Price Performance vs. S&P 500 (4) M&A EV/ NTM Rev. Over Time (5) 45.0% SPX IGV All Buyers Strategic Buyers PE Buyers ` Financing Activity by Quarter 35.0% 6 5.3x 5.4x 5.0x 4.9x 5 4.6x 4.7x 25.0% 4.2x 4.3x 4.1x 4.0x 3.9x 3.9x 4.1x 4 3.6x 3.7x 3.7x 3.7x 3.1x 3.3x 15.0% 2.9x 2.9x 2.8x 3 2.7x 2.2x 5.0% 2 (5.0%) 1 0 (15.0%) 2011 2012 2013 2014 2015 2016 2017 2018 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Notes: Sources: Capital IQ, PitchBook, and Dow Jones VentureSource. Market Data as of 12/31/2018. 1) Criteria based on software series A and subsequent rounds of global financings greater than or equal to $20MM. 2) Financings include Software Venture and Private Equity Growth / Expansion activity. 3) Software M&A transactions reflect select transactions in 2018 YTD. M&A metrics are based on closed and announced transactions. 2 4) iShares North American Tech-Software ETF (IGV), used as proxy for software landscape. Top holdings in the ETF include ADBE, MSFT, ORCL, CRM, and INTU. 5) Criteria based on global public target software M&A deals with enterprise transaction values greater than $100MM. GCA OVERVIEW The GCA Software Team US Team Paul DiNardo James Orozco Rupert Sadler Josh Wepman Managing Director Managing Director Managing Director Managing Director Software Financial Sponsors Software, Travel & Telematics Software & Digital Media [email protected] [email protected] [email protected] [email protected] Daniel Avrutsky Clark Callander Chris Gough Derek Bell Managing Director Managing Director Managing Director Managing Director HCM Software Technology Real Estate Tech Business Services [email protected] [email protected] [email protected] [email protected] Arthur Kirsch Glen Kruger Saif Malik Managing Director Director Vice President Healthcare IT Commerce Software Software [email protected] [email protected] [email protected] Executive Leadership Select Europe Team Select Asia Team Todd Carter Geoff Baldwin *Phil Adams **Sascha Pfeiffer ***Akikazu Ida ***Ryuichi Kanemaki Co-President & CEO Co-President & CEO CEO of GCA Altium Co-Head of European Co-Head of Asian Managing Director [email protected] [email protected] [email protected] Technology & Media Technology & Media [email protected] [email protected] [email protected] John Lambros Alex Vitale *Stephen Georgiadis *Adrian Reed Sameer Jindal Tomohiko Kubota President of GCA US Head of San Francisco Office Managing Director Managing Director Managing Director Representative Director at Head of New York Office Auto Tech [email protected] [email protected] Head of Indian Operations GCA Technovation Head of Digital Media [email protected] [email protected] [email protected] [email protected] **Tobias Schultheiss **Raiko Stelten Managing Director Director [email protected] [email protected] *Adrian Reed, Phil Adams and Stephen Georgiadis are Managing Directors at GCA Altium Limited, a wholly-owned subsidiary of GCA Corporation. **Raiko Stelten, Sascha Pfeiffer and Tobias Schultheiss are Managing Directors at GCA Altium AG, a wholly-owned subsidiary of GCA Corporation. 3 ***Akikazu Ida and Ryuichi Kanemaki are Managing Directors at GCA Corporation. GCA OVERVIEW Deep Software Sector Expertise Preferred Preferred Significant Strategic Investment Acquired by Acquisition of Investment Acquired by Acquired by Acquired by Investment from Investment from Partnership with From From Financial Advisor Financial Advisor We Advised the Seller We Advised the Buyer We Advised WMD Financial Advisor We Advised the Seller We Advised the Seller We Advised the Seller Financial Advisor Acquired by Acquisition of Acquisition of Acquired by Acquired by Acquired by Preferred Acquired by Acquired by Acquired by Stock We Advised the Seller We Advised the Buyer We Advised the Buyer We Advised the Seller We Advised the Seller We Advised the Seller Financial Advisor We Advised the Seller We Advised the Seller We Advised the Seller Acquired by Preferred Acquired by Acquired by Acquired by Acquired by Acquisition of Acquired by Acquired by Convertible Note Stock Offering We Advised the Seller Financial Advisor We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Buyer We Advised the Seller We Advised the Seller Financial Advisor Strategic Investment from Acquisition of Acquisition of Acquired by Acquired by Acquired by Acquired by Acquired by Acquired by Advisory Services Financial Advisor Financial Advisor We Advised the Buyer We Advised the Buyer We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller Acquired by Acquired by Acquired by Acquisition of Acquired by Acquired by Acquired by Acquired by Acquired by Acquired by Fairness Opinion to We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Buyer We Advised the Seller Buddy Media We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller Notes: The above transactions represent a compilation of past and current deals that GCA entities, including GCA Advisors, LLC, GCA Corporation and GCA Altium, have advised on. Generally, GCA Corporation advises Asian-based transactions, while GCA Advisors, LLC advises U.S.-based transactions and GCA Altium advises UK/European-based transactions. At times, multiple GCA 4 entities may be retained to advise on the same transaction. RECENT STOCK PERFORMANCE Index Performance Last 12 Months Last 3 Years 60% 175% 150% 50% 125% 40% 100% 30% 75% 20% 50% 25% 10% 0% 0% (25%) (10%) (50%) Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18 Dec-15 Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 Dec-17 Apr-18 Aug-18 Dec-18 Sector 3 Months 1 Year 3 Years SaaS (13.9%) 34.3% 93.9% Platform (14.1%) 6.7% 51.2% Infrastructure (16.4%) 10.0% 50.9% Security (9.9%) 19.0% 45.6% Sales & Marketing Applications (13.8%) 23.1% 75.4% Content & Storage Management (19.7%) 18.9% 109.5% Business Intelligence & Analytics (5.7%) 30.7% 1.9% Vertical (17.9%) 8.2% 57.0% ERP & General Business (13.2%) 29.1% 62.0% Development & Operations Management (1.8%) 23.8% 101.8% Notes: Sources: Capital IQ. Market Data as of 12/31/2018. 5 List of companies in each sector can be found in the public comparable tables. TRADING COMPARABLES Valuation and Operational Metrics EV / 2019E Revenue EV / 2019E EBITDA 8.0x 60.0x 50.9x 7.0x 6.3x 50.0x 5.8x 5.8x 5.7x 5.7x Median: 5.4x 6.0x 41.1x 5.1x 5.0x 40.0x 5.0x 35.2x Median: 25.5x 4.5x 4.2x 3.9x 28.8x 4.0x 30.0x 27.2x 23.8x 23.5x 22.3x 3.0x 20.0x 20.3x 2.0x 10.5x 10.0x 1.0x 0.0x 0.0x 2019E / 2018E Revenue Growth 2019E EBITDA Margin 35.0% 45.0% 29.6% 30.0% 40.0% 36.5% Median: 15.5% 35.0% 25.0% Median: 21.5% 21.3% 21.2% 30.0% 24.8% 23.2% 22.5% 20.0% 16.4% 25.0% 15.7% 15.3% 14.8% 13.4% 21.7% 21.2% 19.1% 17.9% 15.0% 20.0% 16.0% 15.5% 11.0% 15.0% 10.0% 4.4% 10.0% 5.0% 5.0% 0.0% 0.0% Notes: Sources: Capital IQ. Market Data as of 1/9/2019. Figures represent mean values of respective comp groups. 6 List of companies in each sector can be found in the public comparable tables. PUBLIC COMPANY VALUATIONS Software Trading Statistics ($MM, Except Per Share Data) Stock Trading Statistics Operating Metrics Price Equity Net Enterprise EV / Revenue EV / EBITDA Price / EPS CY Rev. Growth EBITDA Margin 1/9/2019 Value Debt Value CY 18E CY 19E CY 20E CY 18E CY 19E CY 20E CY 18E CY 19E CY 20E 18E/17A 19E/18E 20E/19E CY 18E CY 19E CY 20E Platform Microsoft Corporation $104.27 $800,534 ($47,843) $752,691 6.4x 5.8x 5.3x 15.1x 13.5x 11.6x 24.2x 22.5x 19.7x 23.9% 10.1% 9.8% 42.1% 42.6% 45.1% Oracle Corporation $47.78 $171,479 $8,902 $180,381 4.5x 4.5x 4.4x 11.3x 9.7x 9.4x 47.7x 13.5x 12.8x 2.8% 0.3% 2.6% 39.9% 46.3% 47.0% Cisco Systems, Inc.