cyberscope - q3 2015 - market review

Q3 2015 STRICTLY PRIVATE AND CONFIDENTIAL

CyberScopeQ3 2015 Market Review

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About Results International

DEEP DOMAIN EXPERTISE IN THREE INTER-RELATED SECTORS… …AND BROAD INDUSTRY NETWORKS

A MARKET-LEADING CORPORATE FINANCE ADVISORY FIRM… …WITH GLOBAL REACH

• 40 person team; 250+ completed transactions

• Broad global network

• Creative solutions

• Senior level focus on every transaction

• Founded in 1991

• Entrepreneurial and owner-managed

Marketing

Healthcare

Technology

QUARTERLY TECH REPORT – Q3: CYBERSECURITY

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3

80

100

120

140

160

180

200

Broadline Endpoint Network DataMonitoring & Analysis Global Security NASDAQ Comp

Results International Global Cybersecurity Indices

Sep-15Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15

Notes: Based on share prices as at 30th September 2015; indices weighted by market capitalisationSources: Capital IQ and Results analysis

27.1%

14.3%

2.8%

12.6%

(12.5%)

12.8%

30.3%

Q3 2015 PERFORMANCEBroadline (11.7%)Endpoint (18.1%)Network (4.4%)Data (23.5%)Monitoring & Analysis (23.2%)Global Security (9.8%)

LAST

12

MON

TH S

HARE

PRI

CE P

ERFO

RMAN

CEQUARTERLY TECH REPORT – Q3: CYBERSECURITY

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Cybersecurity: Share Price Performance

(1) These companies have IPO’d within the last 12 months, the share price movement represents the change between each stock’s respective IPO dates (see slide 4) and the 30th September 2015Note: Based on share prices as at 30th September 2015Sources: Capital IQ and Results analysis

LAST

12

MON

THS

Q3 2

015

BROADLINE ENDPOINT NETWORK DATAMONITORING & ANALYSIS

(70.0%)

(60.0%)

(50.0%)

(40.0%)

(30.0%)

(20.0%)

(10.0%)

0.0%

10.0%

(16.3%)

0.6%

(20.1%) (20.2%) (21.3%)

(47.5%)

(0.2%)

(60.7%)

(0.3%)

2.8%

(3.8%) (1.5%)

(26.8%)

(4.0%)

(34.9%)

(3.3%) (5.3%)

(28.9%) (29.5%)

(9.5%)

(100.0%)

(50.0%)

0.0%

50.0%

100.0%

150.0%

(17.2%)

13.6%31.2%

56.6%

(0.8%)

(72.2%)

(0.1%)

(39.3%)

14.6%

68.1%

(2.5%)

75.3%

(7.9%)

4.9% 4.1%

127.9%

62.4%

(10.5%)

7.0%

(9.5%)

(1)

(1)

(1)

(1)


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Cybersecurity: Selected Stocks – Performance Since IPO

COMPANY IPO DATE DESCRIPTION RAISE

D ($M)INDICATIVE PRICE

RANGE ($)IPO LISTING

PRICE ($)INCREASE VS.

RANGEDAY 1

INCREASECURRENT

INCREASE(1)

CURRENT EV ($M)

EV / REVENUE

2015EEV / EBITDA

2015E

Jul-15Detection, analytics and penetration testing

162 13.00-15.00 25.14 79.6% 0.5% (9.5%) 1,093 10.5 x n.m.

Jun-15 Antivirus and network security 552 n.a. 3.54 n.a. 7.4% (0.1%) 1,913 3.7 x 24.9 x

Sep-14 Privileged account security 86 13.00-15.00 16.00 14.3% 87.1% 213.4% 1,521 10.2 x 48.2 x

Jun-14 Mobile security and management 100 8.00-10.00 9.00 0.0% 22.4% (65.6%) 137 0.9 x n.m.

Nov-13 Network security and data storage 64 18.00-21.00 18.00 (7.7%) 19.7% (13.4%) 618 2.0 x 10.3 x

Sep-13 Forensics and malware protection 304 12.00-14.00 20.00 53.8% 80.0% 59.1% 4,994 7.8 x n.m.

Jul-15 Cloud security and compliance 91 11.00-13.00 12.00 0.0% 18.0% 137.2% 930 5.6 x 19.5 x

Jul-12 Firewalls and network security 260 34.00-37.00 42.00 18.3% 26.5% 309.5% 14,837 13.7 x n.m.

Apr-12 Communication security 82 10.00-12.00 13.00 18.2% 8.3% 364.0% 2,600 10.1 x n.m.

Feb-12 Antivirus and anti-spyware 128 16.00-18.00 16.00 (5.9%) (18.8%) 35.9% 1,294 3.0 x 8.1 x

(1) Current increase from IPO price; market data as of 30 th September 2015Note: Calendarised to December year end; $ millions, except share price data; multiples capped at 20x EV / Revenue and 50x EV / EBITDASources: Capital IQ and Results analysis

Nasdaq

Nasdaq

Nasdaq

Nasdaq

NYSE

NYSE

NYSE

Nasdaq

LSE

Nasdaq


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Cybersecurity: Valuation Benchmarks

(1) Global Security represents the median of all stocks in Broadline, Endpoint, Network, Data and Monitoring & Analysis, with no weighting appliedNotes: EV = Enterprise Value; financials calendarised to December year end; median values reportedSee Selected Publicly Traded Companies (slide 9) for details of companies included in each categorySources: Capital IQ and analyst reports

REVENUE GROWTH (2015-16E) EV / REVENUE 2015E

EBITDA MARGIN 2015E EV / EBITDA 2015E

Broadline Endpoint Network Data Monitoring & Analysis

Global Security

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

1.4%

15.6%

10.3%

26.5%24.0%

15.5%


Global Security

(10.0%)(5.0%)

0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%40.0%

33.3%

18.7% 19.1%

(3.3%)

1.2%

17.6%


Global Security

0.0 x1.0 x2.0 x3.0 x4.0 x5.0 x6.0 x7.0 x8.0 x9.0 x

10.0 x

2.7 x 3.0 x3.8 x

8.6 x

5.6 x

3.7 x


Global Security

0.0 x

5.0 x

10.0 x

15.0 x

20.0 x

25.0 x

8.1 x

18.2 x

13.4 x

n.m.

19.5 x

12.1 x


7

Cybersecurity: Global M&A Activity Q1 2011 – Q3 2015

Sources: Press Releases, Capital IQ, Mergermarket, 451 Research and Results analysis

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Q1 2014

Q2 2014

Q3 2014

Q4 2014

Q1 2015

Q2 2015

Q3 2015

0

5

10

15

20

25

30

35

40

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

26 26 26 27

23 23

32

24

15

31

2522

32

28 27

22

34 33

22

No. of Deals Total Disclosed Deal Value

NUM

BER

OF D

EALS

TOTA

L DI

SCLO

SED

DEAL

VAL

UE ($

M)


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Cybersecurity: Selected Deals in Q3 2015

DATE BUYER TARGET EV ($M) EV / REVENUE

EV / EBITDA COMPANY DESCRIPTION TARGET

LOCATION

Sep-15 - - - Smartphone and tablet security suite

Sep-15 - - - Software vulnerability, patch management and software authentication

Sep-15 425.0 2.0x - Secure enterprise mobility solutions

Aug-15 - - - Range of security software from antivirus to firewall and mobile security

Aug-15 - - - Authentication security management and granular access control systems

Aug-15 - - - Online cybersecurity analytics and big data platform

Aug-15 - - - Anti-keylogging and encryption

Aug-15 - - - Endpoint security integrity and threat detection

Aug-15 8.5 - - Mobile app threat identification and prevention

Aug-15 - - - Privileged user access, password management and network authentication

Jul-15 - - - Data encryption and tokenisation of personally identifiable information

Jul-15 - - - Botnet monitoring, threat detection and cybersecurity threat intelligence

Jul-15 - - - Cloud identity and access management and data protection management

Jul-15 - - - Endpoint-based signature-less malware detection and analytics

Jul-15 - - - Antimalware and antispyware application for Apple computers

Jul-15 - - - Real-time secure data governance and monitoring

Jul-15 - - - Password protection security management

Jul-15 190.0 - - Real-time behavioural analytics and breach detection software

(1) In certain cases EV/Revenue are publicly reported estimates; TTM net revenues have been used where possible; EV = transaction value scaled to 100% shareholding plus net debt (incl. minority interest)Sources: Press Releases, Capital IQ, Mergermarket, PitchBook, 451 Research and Results analysis

(tech assets)

(1)

(China)


9

Cybersecurity: Selected Fundraisings in Q3 2015

DATE COMPANY TYPE OF ROUND

FUNDS RAISED

($M)INVESTOR PARTICIPATON COMPANY DESCRIPTION COMPANY

LOCATION

Sep-15 Series B 25.0 Icon Ventures, Aspect Ventures, Norwest Venture Partners Big data security analytics

Sep-15 Series G 150.0TPG, Institutional Venture Partners, T. Row Price Associates, Andreessen Horowitz, Franklin Templeton, Geodesic Partners

Enterprise security and systems management

Sep-15 Series B 110.0 TPG Growth, EMC, Lightspeed Ventures, Google Capital Security-as-a-Service platform

Sep-15 Series D 110.0FMR, Google Capital, Microsoft Ventures, Baidu, Qualcomm Ventures, New Enterprise Associates, Union Square Ventures

Internet security protection

Sep-15 Series A 10.0 Orchard Holdings Group Threat intelligence platform

Sep-15 Series D 75.0 Iconiq Capital, Accel Partners, Lightspeed Venture Partners, Social+Capital Cloud access security broker

Sep-15 Series C 12.0First Floor Capital, Bessemer Venture Partners, KPCB, North Bridge Equity Partners, Intel Capital, CommonAngels Ventures

Mobile app security

Aug-15 Seed 2.2 Azure Capital, Epic Ventures, Bialla Venture Partners Cloud data exchange security

Aug-15 Series B 17.0 Evolution Equity Partners, 406 Ventures, Arsenal Venture Partners

SAP and Oracle enterprise application security

Aug-15 Seed 2.3 Accomplice Mobile application security vulnerability detection platform

Aug-15 Series E 52.0 Institutional Venture Partners, Trident Capital, KPCB, GGV Capital

Security management and threat intelligence

Jul-15 Series C 42.0 DFJ Growth, KKR, Dell Ventures, CapitalOne Ventures, TenEleven Ventures Cybersecurity solutions

Jul-15 Series B 22.5 Summit Partners Intelligence-based behavioural cyberdefence technology

Jul-15 Series A 3.5 BRM Group, Curious Minds, FirstTime Ventures , Maxfield Capital, TheTime VC Mobile security app

Jul-15 Series B 17.0 Allegis Capital, The Blackstone Group Monitoring, reporting and post-incident forensics

Jul-15 Series C 100.0 Google Capital, Rackspace, Accel Partners, Warburg Pincus Endpoint protection and threat intelligence

Jul-15 Series D 30.0 Pinnacle Ventures, Qihoo 360 Technology, Redpoint Ventures

Secure cloud protection for Windows and Android

Jul-15 Venture 4.0 Sequoia Capital Penetration testing and risk quantification

Source: Press Releases, Capital IQ, Mergermarket and Results analysis


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PRICE % OF 52 MARKET TOTAL NET ENTERPRISE REVENUE REV. GROWTH GROSS MARGIN EBITDA MARGINCOMPANY (30-SEP-15) WEEK HIGH CAP CASH DEBT VALUE CY2015 CY15-16 HISTORICAL CY2015 CY2016 CY2015 CY2016 CY2015 CY2016BROADLINESymantec 19.47 71.3% 13,224 3,884 (1,795) 11,429 6,331 0.1% 82.3% 32.4% 35.0% 1.8 x 1.8 x 5.6 x 5.2 xTrend Micro 35.20 86.3% 4,797 1,039 (1,039) 3,758 1,041 2.8% 82.3% 34.1% 34.8% 3.6 x 3.5 x 10.6 x 10.1 x

ENDPOINTAVG Technologies 21.75 74.6% 1,146 117 148 1,294 432 15.6% 86.1% 36.9% 36.9% 3.0 x 2.6 x 8.1 x 7.0 xCyberArk 50.14 65.7% 1,804 284 (284) 1,521 148 32.9% 85.7% 21.3% 21.2% 10.2 x 7.7 x 48.2 x 36.4 xF-Secure 2.76 64.3% 434 85 (85) 349 163 7.2% 94.9% 18.7% 20.6% 2.1 x 2.0 x 11.5 x 9.7 xMobileIron 3.10 23.9% 244 108 (108) 137 146 18.8% 81.8% (39.3%) (19.1%) 0.9 x 0.8 x n.m. n.m.Sophos 3.53 81.9% 1,765 629 149 1,913 789 (2.2%) 86.0% 14.7% 14.5% 3.7 x 3.8 x 24.9 x 26.0 x

NETWORKBarracuda Networks 15.58 33.3% 832 218 (213) 618 314 15.4% 78.9% 19.1% 25.1% 2.0 x 1.7 x 10.3 x 6.8 xCheck Point Software 79.33 89.6% 14,756 1,227 (1,227) 13,529 1,627 8.1% 88.2% 56.7% 56.9% 8.3 x 7.7 x 14.7 x 13.5 xFortinet 42.48 84.4% 7,565 873 (873) 6,692 1,007 22.6% 70.0% 16.5% 17.5% 6.6 x 5.4 x 40.2 x 30.9 xF5 Networks 115.80 85.1% 8,230 798 (798) 7,432 1,978 10.2% 82.1% 39.3% 39.4% 3.8 x 3.4 x 9.6 x 8.7 xPalo Alto Networks 172.00 85.8% 15,139 789 (302) 14,837 1,082 35.9% 72.9% 5.6% 24.6% 13.7 x 10.1 x n.m. 41.0 xRadware 16.26 65.3% 740 81 (81) 659 215 7.3% 81.1% 19.1% 17.8% 3.1 x 2.9 x 16.1 x 16.1 xSecunet 21.32 86.3% 138 26 (26) 112 92 10.3% 64.3% 10.1% 10.0% 1.2 x 1.1 x 12.1 x 11.0 x

DATAFireEye 31.82 57.5% 5,494 1,190 (501) 4,994 640 37.3% 58.9% (26.4%) (13.7%) 7.8 x 5.7 x n.m. n.m.Imperva 65.48 88.5% 2,118 245 (245) 1,873 217 23.7% 77.7% (3.3%) (0.6%) 8.6 x 7.0 x n.m. n.m.Proofpoint 60.32 83.0% 2,674 411 (75) 2,600 258 26.5% 66.4% 0.9% 6.3% 10.1 x 8.0 x n.m. n.m.

MONITORING & ANALYSISGuidance Software 6.02 58.9% 182 21 (21) 161 110 5.5% 66.9% 1.2% 3.9% 1.5 x 1.4 x n.m. 35.9 xQualys 28.46 51.3% 1,088 158 (158) 930 166 24.0% 78.3% 28.8% 29.3% 5.6 x 4.5 x 19.5 x 15.5 xRapid7 22.75 86.9% 960 130 134 1,093 104 24.9% 75.9% (29.3%) (24.4%) 10.5 x 8.4 x n.m. n.m.

25th percentile 63.0% 159 7.2% 72.2% 1.1% 5.7% 2.1 x 1.9 x 10.3 x 9.2 xMedian 78.3% 286 15.5% 80.0% 17.6% 19.2% 3.7 x 3.6 x 12.1 x 13.5 x75th percentile 85.9% 1,016 24.2% 83.1% 29.7% 30.7% 8.4 x 7.2 x 19.5 x 28.4 x

OPERATING METRICS VALUATION METRICSREVENUE EBITDA

Cybersecurity: Selected Publicly Traded Companies

Note: Calendarised to December year end; $ millions, except share price data; multiples capped at 20x EV / Revenue and 50x EV / EBITDA; net debt includes minority interestSource: Capital IQ


11

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