ma flash report september 2009 final
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8/8/2019 MA Flash Report September 2009 Final
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USA Switzerland Germany France United Kingdom Canada Norway Brazil
www.corumgroup.com
M&A Flash ReportM&A Flash Report ± ± Sept. 2009Sept. 2009Software and IT Industry Market Update:
I¶ll Buy! Is Private Equity Coming Back?
Thursday, September 3, 200910:00 am PT
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Corum Group Presentation 2
Mark ReedExecutive Vice PresidentCorum Group Ltd.
>> For today¶s presentation or more information, contact Pat Sultan(pats@corumgroup.com, +1 425-455-8281 ext. 248)
Ryan BlakelyVice President, Research
Corum Group Ltd.
Nat BurgessExecutive Vice President
Corum Group Ltd.
Bruce MilneCEO & ChairmanCorum Group Ltd.
Bruce Milne, the founder of Corum, is one of the true leaders in the software industry. He built the largest vertical market
software company in the world before founding Corum, where he has overseen more mergers than anyone in history,
generating over $6 Billion in wealth for the owners of privately held firms. Along the way, in addition to publishing
extensively, he has owned three other software companies (Rosesoft, Dataword, Insider Edition) and been a seed investor
in some of the leaders in our industry (Blue Coat, Bright Star, Sabaki). He founded the largest regional tech association
(Washington Software Association), and, as a recognized leader, has served on numerous advisory boards including
Comdex, DEC, Apple, IBM, and personally advised Bill Gates at Microsoft. He has been a tech cabinet advisor to two
Governors, a Congressman and U.S. Senator on issues related to the future of the software industry. For his expertise, he
was commissioned by the U.S. government to write the definitive high tech business guide for the SBA. The Canadian
Government had him conduct research which led to the establishment of SoftWorld, and he was recently voted one of the
most influential people in the European software community for his work during the last market decline.
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Corum Group Presentation 3
Agenda
Langara!
Overview of Current Market
Market and Valuation Analysis
Private Equity Panel
Closing Comments - Q&A
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Corum Group Presentation 4
Corum¶s Annual Client CelebrationAug. 29 ± Sept. 1A tradition for 22 years
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Corum Group Presentation 5
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Corum Group Presentation 6
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Corum Group Presentation 7
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Corum Group Presentation 8
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Corum Group Presentation 9
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Corum Group Presentation 10
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Corum Group Presentation 11
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Corum Group Presentation 12
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Corum Group Presentation 13
IMF Set to Raise Global Growth to 3.3%
World Bank Sees True Global Recovery
ISM Index Up Two Months Straight to 52.9%
What Wall of Worry?
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Corum Group Presentation 14
South Korea Economy Grew Faster Than Expected
U.S. Productivity Up 6.6% in Q2
Goldman Sachs Revises China Growth to 8.3%
Strong Export Growth Lifts German Market
European Spending Rose - First Time in a Year
Much Good News
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Corum Group Presentation 15
Pending Sales of Existing Homes Rise in July
Housing Prices Up 1.7%
U.K. Mortgage Approval Rose to 15 Month High
Real Estate Seems to be Recovering
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Corum Group Presentation 16
But, Still Real Concerns
Back to School Sales Auger Retail Woes
Majority See No Benefit from Stimulus Program
Housing ³Poverty Effect´ Fouls U.S. Rebound
Companies Cut More Jobs Than Forecast
Factory Orders Rose Less Than Expected
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Corum Group Presentation 17
So Many Mixed Messages
China Stimulus Helps Global Rebound or
The Gloom in China¶s Growth Stats
Cash for Clunkers Real Boost to Auto Sales or
Cash for Clunkers Is a Sugar High!
Worst Over for Commercial Real Estate or
Commercial Real Estate Ticking Time Bomb
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Corum Group Presentation 18
But, Deals Are Up!
M&A Revival Seen in Three Deals
Including Disney and Baker Hughes
Buyout Firms Return to Basics
Silver Lake acquires Skype for $2 Billion
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Corum Group Presentation 19
Corum Transactions Are Up
Five deals in 8 weeks
Four more set to close
Four more with new offers
Mobile Applications
Healthcare
Risk / Compliance
Security
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Corum Group Presentation 20
Ryan BlakelyVice President, ResearchCorum Group Ltd.
Ryan joined Corum in 1998 and has held a number of roles central to research and marketanalysis in the software and technology space. With over ten years experience in thesoftware M&A environment, Ryan has an intimate understanding of the software industry asa whole, especially as it relates to mergers and acquisitions. As the Vice President of
Research, Ryan directs Corum¶s research group in both North America and Europe, andhas played a direct role in developing buyer relationships during his tenure with Corum. Healso is a major contributor to Corum¶s research reports. Ryan graduated from WashingtonState University with a B.A. in Business Management, with a focus on EntrepreneurialStudies.
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Corum Group Presentation 21
Public Markets
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Corum Group Presentation 22
M&A Activity ± July
Number of Software and IT M&ATransactions
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Corum Group Presentation 24
Horizontal Application Software Market
Public Valuations Deal Spotlight:
Sector: Supply ChainTarget: Advanced Information
Systems
Buyer: PSI AGDate: August 2009Transaction Value: $18 millionStructure: CashRevenue Multiple: 1.1x
Comments:
Regional consolidationVertical expansion
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Corum Group Presentation 25
Public Valuations
Vertical Application Software Market
Deal Spotlight:
Sector: TransportationTarget: Grey Island SystemsBuyer: WebTechWireless
Date: August 2009Transaction Value: $35.4 millionStructure: StockRevenue Multiple: 1.7x
Comments:
Niche market expansionComplementary solutionsPublic target
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Corum Group Presentation 26
Public Valuations
Consumer Application Software Market
Deal Spotlight:
Sector: Hyper Local ContentTarget: EveryBlockBuyer: MSNBC.com
Date: August 2009Transaction Value: Undisclosed
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Corum Group Presentation 27
Infrastructure Market
Public Valuations Deal Spotlight:
Sector: Application DevelopmentTarget: SpringSource Inc.Buyer: VMware, Inc.
Date: August 2009Transaction Value: $420 millionStructure: Cash and stockRevenue Multiple: 14.0x
Comments:
Strong valuationPaaSExtend current offerings
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Corum Group Presentation 28
Internet Market
Public Valuations Deal Spotlight:
Sector: Social NetworkingTarget: iLikeBuyer: MySpace.com
Date: August 2009Transaction Value: Undisclosed
Comments:
Social experiencesUser baseTraffic
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Corum Group Presentation 29
IT Services Market
Public Valuations Deal Spotlight:
Sector: ServicesTarget: TRS Consulting Inc.Buyer: NCI Information SystemsDate: August 2009Transaction Value: $18 millionStructure: Cash + earn-out
Comments:
ConsolidationIncrease scaleDrive future growth
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Corum Group Presentation 30
Private Equity Data Points
$400 billion in available capital
% of deals 2007 ± 36%
2008 ± 6% 2009 ± 19%
Data suggests PE deal volumes have bottomed
Technology remains area of focus for PE community
See more PE activity in emerging markets in th
e nextyear
Skype - $2 billion for majority stake
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Corum Group Presentation 31
Continue to see month on month increases in publicvaluations
Good valuations for strategic opportunities
Transaction volumes slowed ± typical August
Active buyer universe
Private equity putting dollars to work
Market and Valuation Summary
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Corum Group Presentation 32
Private Equity Panel
Greg S. Goldfarb, Principal, Summit PartnersGreg joined the Palo Alto office of Summit Partners in 2002 and focuses on growth equityinvestments and recapitalizations in bootstrapped, profitable growth companies. His boarddirectorships and investments include IntelliChem, LiveOffice, ProClarity Corporation, TheMutual Fund Store, Tiny Prints, and Web Reservations International Limited. Previously, Gregwas Director of the Innovation Lab at Starwood Hotels & Resorts Worldwide, responsible for developing new technology-based businesses for Starwood. He is a graduate of HarvardUniversity.
Matthew Picciano, Alpine InvestorsMatthew joined Alpine Investors in 2007 from The University of Cincinnati where hegraduated cum laude with a Bachelor of Business Administration in Finance and RealEstate. Matthew¶s previous work experience includes an internship in capital management atThe Kroger Co. He also worked as a real estate analyst intern in The Kroger Co.¶s AtlantaDivision and as a mutual fund accountant intern at Integrated Investment Services. Since joining Alpine, Matthew has spent most of his time in the software sector including sourcingand helping close the WebEquity Solutions transaction.
Alex Rolfe, Alpine Investors Alex Rolfe joined Alpine in 2008. Previously, Mr. Rolfe worked at Golden Gate Capital, a privateequity firm in San Francisco, where he completed transactions in technology, retail, andhealthcare. Prior to Golden Gate, Mr. Rolfe was a strategy consultant with Bain & Companywhere he worked with private equity as well as corporate clients. Mr. Rolfe holds a BA fromDartmouthCollege where he graduated Phi Beta Kappa, and an MBA from Stanford University'sGraduate School of Business where he was an Arjay Miller Scholar.
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33
Summit Partners at a Glance
Overview
f Founded in 1984
f Raised more than $11 billion in capital
f Offices in Boston, Palo Alto and London
f More than 90 investment professionals
f Managing directors average 14 years at Summit
f Broad industry and geographic coverage
f Minority or majority interest
f Usually lead ± and often sole ± investor
f International institutional investor base
f More than 300 portfolio companies
± Nearly 125 public offerings
± More than 115 mergers or sales
Investment profile
f History of profitable growth
f Strong leadership team
f Proven business model
f Minimal previous outside capital
f In a market with growth potential
Investment options for capital
f $5 million to more than $500 million per company in
equity, with
the ability to invest more t
han $800 millionin combined equity and subordinated debt
f Uses of capital
± Growth equity
± Recapitalizations
± Management buyouts
Summit Partners is a private equity and venture capital firm. We work
with owners and management teams to maximize long-term value.
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Alpine Investors is a private equity firm focused on making investments in domestic
micro-cap privately held companies
Funds under Management: $250m across three funds (recently had a first close on Fund IV)
Industries of Interest: i) Software ii) Business Services, iii) Education and iv) Gaming
Target Size: $2-$10m of EBITDA; $5 ± 50m of revenue
Flexible Deal Structures: Majority buy-outs or minority growth equity investments
We can back current management or bring in our own industry specific Executive in the event management is
looking to retire, transition out, or wants to bring on more expertise
Value-add Investment Partner: We take an active role in our portfolio companies including: i)
strategic planning, ii) key hiring, iii) add-ons (sourcing and transaction) and iv) other operational
projects
Long Term Orientation: We expect to grow businesses over a 4-8 year period
Example Portfolio Companies:
S aaS Loan Origination Provider High-end Online Lighting Retailer Turn-key ATM operator Online Continuing Education Provider
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Corum Group Presentation 35
Upcoming Corum Events
September 15: Pittsburgh -- MB
September 17: Chicago -- MB
September 22: Reading, U.K. -- MB
September 23: Salt Lake City -- MBSeptember 24: Denver -- MB
October 5: Prague -- SUSO
October 6: Boston -- MB
October 8: Lyon -- MB
October 8: Washington DC -- MB
October 13: Scotland -- MB
October 13: Austin -- SUSO
October 14: Ireland -- MBOctober 20: Stockholm -- MB/SUSO
October 22: Denmark -- MB/SUSO
October 23: Munich -- MB
October 27: Frankfurt -- MB
Merge Briefing (MB)
Selling Up Selling Out (SUSO)
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Corum Group Presentation 36
Contact Information
Research and Conferences:www.corumgroup.com
Corum Group Ltd.
Bruce Milne, CEO
Ryan Blakely, VP Researchryanb@corumgroup.com
10500 NE 8th Street, Suite 1500
Bellevue, WA 98004
USA
+1 425-455-8281
Corum Group International S.à.r.l.
Beim Paradeplatz
Basteiplatz 7
8001 Zürich
Switzerland
+41 44 251 82 65
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