ma flash report september 2009 final

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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



Corum Group Presentation 2

Mark ReedExecutive Vice PresidentCorum Group Ltd.

>> For today¶s presentation or more information, contact Pat Sultan([email protected], +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.




Agenda

Langara!

Overview of Current Market

Market and Valuation Analysis

Private Equity Panel

Closing Comments - Q&A




Corum¶s Annual Client CelebrationAug. 29 ± Sept. 1A tradition for 22 years




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?




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




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




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




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




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




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




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.




Public Markets

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Nasdaq S&P Tech Dow




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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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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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Public Valuations

Consumer Application Software Market

Deal Spotlight:

Sector: Hyper Local ContentTarget: EveryBlockBuyer: MSNBC.com

Date: August 2009Transaction Value: Undisclosed

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Infrastructure Market


Sector: Application DevelopmentTarget: SpringSource Inc.Buyer: VMware, Inc.

Date: August 2009Transaction Value: $420 millionStructure: Cash and stockRevenue Multiple: 14.0x

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Strong valuationPaaSExtend current offerings

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Internet Market


Sector: Social NetworkingTarget: iLikeBuyer: MySpace.com

Date: August 2009Transaction Value: Undisclosed

Comments:

Social experiencesUser baseTraffic

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IT Services Market


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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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




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




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.



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.



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




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)




Contact Information

Research and Conferences:www.corumgroup.com

Corum Group Ltd.

Bruce Milne, CEO

Ryan Blakely, VP [email protected]

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

ma flash report september 2009 final

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