q4 & full-year 2012 global tech ipo final - pwc.fr · year in review – 2012 (continued) •...

Technology Institute

Global TechnologyQ4 and Full-year 2012yIPO Review

ContentsContents

Year in review 3

62012 distribution and trends

2009 – 2012 distribution and trends

ff i d il

6

14

182012 offering detail

Q4 summary

Q4 distribution and trends

18

27

30Q4 distribution and trends

Q4 offering detail

Q4 key financials and valuation metrics

30

41

45Q4 key financials and valuation metrics

Q4 ownership detail

Methodology

5

50

53Methodology

Global contacts 54

PwC

Year in review – 2012Year in review 2012

Macroeconomic woes weighed on Tech IPOs* in 2012.Lowest number of Tech IPOs recorded since 2009.

• 2012 witnessed a continuous quarterly decline in the number of IPOs quarter-over-quarter finishing the year at a total of 69, the lowest number since the high point, post-recession, of 109

9

g y g p pin 2010. Q1 posted the highest number of IPOs (30).

• While technology IPOs started the year 0n a promising note, with 50 IPOs completed during the first half of 2012, momentum was not maintained, with just 19 companies going public in the second half of the year. The decline in IPOs was due to adverse macroeconomic conditions and second half of the year. The decline in IPOs was due to adverse macroeconomic conditions and volatile capital markets reacting to an anemic US recovery, the Euro Zone crises and the slowing Chinese economy.

• Excluding Facebook, Software led the technology subsectors with 19 IPOs in 2012, a 28% market share in terms of number of deals and 38% in total proceeds Internet Software & Services and share in terms of number of deals and 38% in total proceeds. Internet Software & Services and Semiconductors posted similar results with each raising 20% of total proceeds. With Facebookincluded, Internet Software & Services dominated proceeds with 75% of the total.

• Shenzhen (China), NYSE (US) and NASDAQ (US) continued their dominance of tech IPOs with d d l h i f f d i d l d i h $ b f ll d30, 18 and 16 deals each in 2012. In terms of funds raised, NASDAQ led with US$17.3bn, followed

by NYSE US$3.1bn and Shenzhen US$1.9bn.

PwCGlobal Technology IPO Review

3

* Note: Issue size greater than US$40mn

Year in review – 2012 (continued)

• The technology IPO market used to be dominated by the US—both from the stand point of the d i il f th i i bli d th d i il f th t k h hi h th

Year in review 2012 (continued)

domicile of the companies going public and the domicile of the stock exchanges on which they list. During 2012, China and the US were nearly equal with 33 and 32 IPOs respectively.

• In terms of funds raised, the US continued to lead other countries, and by a significant margin, even excluding the Q2 Facebook IPO (US $4.3bn, China $2.4bn, Others $0.4bn, Facebook$16bn).

• Although China’s Shenzhen exchange was one of the top exchanges for technology IPOs with a total of 30 (43%) in 2012, it declined in the number of deals year over year by 39%. Moreover, the proceeds raised on Shenzhen also fell over 44% in 2012 as compared to 2011. p 44 p

• Indian technology companies did not have any significant IPO activity during 2012.

• A strengthening US economy, followed by better economic conditions in the latter half of the year in Europe and Asia, are expected to lead to an improving IPO market in 2013.

PwCGlobal Technology IPO Review

4


Year in review – 2012 (continued)

Top 10 IPOs of 2012

Year in review 2012 (continued)

Company IndustryIssue size

(in US$ mn)Primary

exchange

Facebook, Inc. Internet Software & Services 16,007 Nasdaq

Workday, Inc. Software 637 NYSE

Vantiv, Inc.. Software 500 NYSE

Palo Alto Networks, Inc. Communications Equipment 260 NYSE

Xian LONGi Silicon Materials Corp. Semiconductors 250 Shanghai

S l k I S f 230 N dSplunk, Inc. Software 230 Nasdaq

ServiceNow, Inc. Internet Software & Services 210 NYSE

ExactTarget, Inc. Internet Software & Services 162 NYSE g ,

HC SemiTek Corp. Semiconductors 158 Shenzhen

LifeLock, Inc. Software 141 NYSE

PwC 5Source: Thomson Reuters, PwC Research

Global Technology IPOsGlobal Technology IPOs

2012 Distribution and trends2012 – Distribution and trends(Geographic, subsector, exchange, quarter, auditor)

PwC 6

Full-year 2012 technology IPOs – Geographic distribution* Full year 2012 technology IPOs Geographic distribution

Number of IPOs [yellow line]

d i $ billiChina 33

Bar = proceeds in US$ billionsUnited States (US) 32

Netherlands 1

Japan 130

3525

France 1

Others 1

TOTAL 6920

25

15

20

IPO

s

billi

ons

China 2.44

Proceeds raised (in US$ bn)

10

15

5

10

No.

Of

In U

S$

b

United States (US) 20.31

Netherlands 0.13

Japan 0.050

5

0

5

Chi

na US

land

s

Japa

n

ranc

e

Oth

ers

France 0.09

Others 0.13

TOTAL 23.15

C

Net

herl J Fr O

PwC 7

*IPO is credited to the country where the company is headquartered and not the location of the exchange.

Source: Thomson Reuters, PwC Research

Full-year 2012 technology IPOs – Subsector distributionFull year 2012 technology IPOs Subsector distributionNumber of IPOs [yellow line]

Internet Software & Services 15

Bar = proceeds in US$ billions

16

18

20

16

18

20

Semiconductors 15

Software 19

Communications Equipment 6

IT C lti & S i 8


10

12

14

16

10

12

14

16

o. o

f IP

Os

S$

billi

ons

IT Consulting & Services 8

Computers & Peripherals 4

Others 2

TOTAL 69

2

4

6

8

2

4

6

8 No

In U

S TOTAL 69


Internet Software & Services 17 45

0

2

0

2

Sof

twar

e &

vi

ces

ondu

ctor

s

Sof

twar

e

unic

atio

ns

ipm

ent

nsul

ting

&

ervi

ces

mpu

ters

&

erip

hera

ls

Oth

ers

Internet Software & Services 17.45

Semiconductors 1.45

Software 2.72

Communications Equipment 0.57

Inte

rnet

SS

erv

Sem

ic

Com

mu

Equ

IT C

o Se

Com Pe q p

IT Consulting & Services 0.52

Computers & Peripherals 0.33

Others 0.12

PwC 8

TOTAL 23.15


Full-year 2012 technology IPOs – Stock exchange distributionFull year 2012 technology IPOs Stock exchange distribution

Shenzhen 30


4020

Shenzhen 30

Nasdaq 16

NYSE 18

Tokyo 1


32

40

14

16

18

20 Tokyo 1

Shanghai 2

Others 2

TOTAL 69

16

24

8

10

12

No.

of I

PO

s

In U

S$

billi

ons

O 69


Shenzhen 1.98

0

8

0

2

4

6Shenzhen 1.98

Nasdaq 17.38

NYSE 3.18

Tokyo 0.0500

She

nzhe

n

Nas

daq

NY

SE

Toky

o

Sha

ngha

i

Oth

ers

y

Shanghai 0.38

Others 0.19

TOTAL 23.15


Full-year 2012 technology IPOs – Quarterly summaryFull year 2012 technology IPOs Quarterly summary


4020


Q 1 30

Q 2 20

Q 3 11

Q 4 8

32

40

14

16

18

20 Q 4 8

TOTAL 69

16

24

8

10

12

No.

of I

PO

s

In U

S$

billi

ons

IPOs by proceeds (in US$ bn)

0

8

0

2

4

6 Q 1 3.04

Q 2 17.78

Q 3 1.00

Q 4 1.340 0

Q1

Q2

Q3

Q4

Q 4

TOTAL 23.15


Full-year 2012 technology IPOs – Quarterly summary by Full year 2012 technology IPOs Quarterly summary by subsector

121200Bar = proceeds in US$ millions

16400

6

9

600

900

f IP

Os

mill

ions

8

12

200

300

of I

PO

s

mill

ions

0

3

0

300 No.

of

In U

S$

m

0

4

0

100

No.

o

In U

S$

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

61200

SEMICONDUCTOR IT CONSULTING & SERVICES

3

4

5

6

600

800

1000

1200

PO

s

ons

1

2

3

200

400

600

No.

of I

P

In U

S$

mill

i

PwC 11

00

Q1

Q2

Q3

Q4

SOFTWARESource: Thomson Reuters, PwC Research

Full-year 2012 technology IPOs – Quarterly summary by Full year 2012 technology IPOs Quarterly summary by subsector (continued)

3.5140Bar = proceeds in US$ millions

920


2

2.5

3

80

100

120

f IP

Os

mill

ions

612

16

f IP

Os

billi

ons

0

0.5

1

1.5

0

20

40

60

No.

of

In U

S$

m

0

3

0

4

8

No.

of

In U

S$

b

00

Q1

Q2

Q3

Q4

00

Q1

Q2

Q3

Q4

10160

COMPUTERS & PERIPHERALS INTERNET SOFTWARE & SERVICES

Bar = proceeds in US$ millions

6

8

80

120

PO

s

ons

0

2

4

0

40

80

No.

of I

P

In U

S$

mill

i

PwC 12

00

Q1

Q2

Q3

Q4

OTHERSSource: Thomson Reuters, PwC Research

Full-year 2012 technology IPOs – Lead auditorsFull year 2012 technology IPOs Lead auditors

PwC16%Others

19%

Number of IPOs

PwC 11

EY 8

EY12%

19% EY 8

Deloitte 10

KPMG 4

Deloitte14%

Local Chinese firms33%

Local Chinese firms 23

Others 13

KPMG6%

TOTAL 69

PwCSource: Thomson Reuters, PwC Research

13


2009 2012 2009 - 2012 Distribution and trends

PwC 14

2009 – 2012 technology IPO summary2009 2012 technology IPO summary


125 25


2009 37

2010 109

2011 87

100 20

2012 69

50

75

10

15

No.

of I

PO

s

In U

S$

billi

ons

IPOs by proceeds (in $ bn)

0

25

0

52009 8.29

2010 17.95

2011 15.86

2009

2010

2011

2012 2012 23.15


2009 – 2012 technology IPO summary by subsector2009 2012 technology IPO summary by subsector

507


256

30

40

3

4

5

6

f IP

Os

billi

ons 15

20

4

f IP

Os

billi

ons

0

10

20

0

1

2

3

No.

of

In U

S$

b

0

5

10

0

2

No.

of

In U

S$

b

2009

2010

2011

2012

2009

2010

2011

2012

213

SEMICONDUCTOR IT CONSULTING & SERVICES

142

IPO

s

llion

s

0

7

0

1

No.

of I

In U

S$

bil

PwC 16

00

2009

2010

2011

2012

SOFTWARESource: Thomson Reuters, PwC Research

2009 – 2012 technology IPO summary by subsector (continued)2009 2012 technology IPO summary by subsector (continued)

103


3020

6

8

2

f IP

Os

billi

ons 18

24

10

15

f IP

Os

billi

ons

0

2

4

0

1

No.

of

In U

S b

0

6

12

0

5 No.

of

In U

S $

b

2009

2010

2011

2012

2009

2010

2011

2012

254

COMPUTERS & PERIPHERALS INTERNET SOFTWARE & SERVICES

15

20

2

3

PO

s

ons

0

5

10

0

1

2

No.

of I

P

In U

S $

bill

i

PwC 17

00

2009

2010

2011

2012

OTHERSSource: Thomson Reuters, PwC Research


2012 offering detail 2012 offering detail

PwC 18

Technology IPO summary – 2012IPOs – By offer date

Issue date Company Sector Proceeds (in US$ mn)

Primary exchange

Domicile nation

Auditor Book runner(s)

Technology IPO summary 2012

12/4/2012 COLOPL, Inc. Software 48 Tokyo Japan Deloitte Daiwa Securities

11/20/2012 YY, Inc.Internet Software & Services

82 Nasdaq China PwCMorgan Stanley,Deutsche Bank,Citi

11/15/2012 Ruckus Wireless, Inc.Computers & Peripherals

126 NYSEUnited States

DeloitteGoldman Sachs,Morgan Stanley,Deutsche Bank

IT Cons lting & United 11/9/2012 Meganet Corp.

IT Consulting & Services

100 OTCUnited States Others -

10/11/2012 Workday, Inc. Software 637 NYSEUnited States

EY

Morgan Stanley,Goldman Sachs,Allen & Co.,JP MorganJP Morgan

10/10/2012 Shutterstock, Inc.Internet Software & Services

77 NYSEUnited States PwC

Morgan Stanley,Deutsche Bank,Jefferies & Co.

Barclays10/4/2012 Fleetmatics Group, PLC Software 133 NYSE

Ireland-Rep

PwCBarclays,Bank of America Merrill Lynch

10/2/2012 LifeLock, Inc. Software 141 NYSEUnited States

EY

Goldman Sachs,Bank of America Merrill Lynch

PwC 19

/ /States Merrill Lynch

Deutsche Bank


Technology IPO summary – 2012 (continued)

Issue date Company Sector Proceeds (in US$

)

Primary exchange

Domicile nation


Technology IPO summary 2012 (continued)IPOs – By offer date

mn)

9/27/2012 Qualys, Inc. Software 91 NasdaqUnited States

OthersJP Morgan,Credit Suisse

9/19/2012 Trulia, Inc.Internet Software & Services


DeloitteJP Morgan,Deutsche BankServices States Deutsche Bank

9/7/2012Kyland Technology Co., Ltd.

CommunicationsEquipment

43 Shenzhen ChinaLocal Chinese

firmDaiwa SSC

8/31/2012Beijing VRV Software Corporation Ltd.

Software 66 Shenzhen ChinaLocal Chinese

firmChina MinzuSecurities Co Ltd

8/7/2012Peregrine Semiconductor Corporation

Semiconductor 77 NasdaqUnited States

EYDeutsche Bank Securities Corp,JP Morgan

8/6/2012Shenzhen Sunline Tech Co., Ltd.


firmChina Merchants Securities Co Ltd

8/1/2012 Eloqua, Inc. Software 92 NasdaqUnited States

KPMG JP Morgan Deutsche Bank

7/25/2012 E2open, Inc. Software 70 NasdaqUnited States

KPMG Bank of America Merrill Lynch

C i ti U it d Morgan Stanley,

7/19/2012 Palo Alto Networks, Inc.CommunicationsEquipment


EYMorgan Stanley,Goldman Sachs,Citi

7/19/2012KAYAK Software Corporation

Internet Software & Services

91 NasdaqUnited States

PwCMorgan StanleyDeutsche Bank

i l i l hi i i

PwC 20

7/6/2012Jiangsu Hoperun Software Co., Ltd.



firm CITIC Securities Co Ltd




)

Primary exchange

Domicile nation



mn)

6/28/2012 ServiceNow, Inc.Internet Software & Services


PwCMorgan Stanley,Citi,Deutsche Bank

6/28/2012 Exa Corporation Software 63 NasdaqUnited

PwCStifel Nicolaus &

6/28/2012 Exa Corporation Software 63 NasdaqStates

PwCCo.

6/15/2012SinoSun Technology Co., Ltd.

Computers & Peripherals


firmPingan Securities Co.

Shanghai Huahongjt6/5/2012

Shanghai HuahongjtSmart Card System Co., Ltd.

Others 47 Shenzhen ChinaLocal Chinese

firmOrient Securities Co.

5/31/2012Sino Wealth Electronic Ltd.

Semiconductors 63 Shenzhen ChinaLocal Chinese

firmGuosen Securities Co.

5/24/2012Shenzhen Fenda Technology Co., Ltd.

Others 74 Shenzhen ChinaLocal Chinese

firmHuatai United Securities Co.

5/24/2012Huizhou Speed Wireless Technology Co., Ltd.

Communications Equipment


firmHongta Securities Co.

5/21/2012Beijing Watertek Information Technology Co., Ltd.



firmPingan Securities Co.

5/18/2012HC SemiTekCorporation


firmCITIC Securities

PwC 21

Corporation firm




Primary exchange

Domicile nation



(in US$ mn)

exchange nation

Morgan Stanley,JP Morgan,Goldman Sachs,B k f A i

5/17/2012 Facebook, Inc.Internet Software & Services

16,007 NasdaqUnited States

EY

Bank of America Merrill Lynch,Barclays,Allen & Co.,Citi,Credit Suisse,Deutsche Bank

5/9/2012 Audience, Inc. Semiconductors 90 NasdaqUnited States

PwCJP Morgan,Credit Suisse,Deutsche Bank

4/27/2012Shenzhen JiaweiPhotovoltaic Lighting Co., Ltd.


FirmGuotai JunanSecurities

4/26/2012 Ourpalm Co., Ltd.Internet Software & Services

104 Shenzhen China Others CITIC Securities

4/24/2012 Envivio, Inc.Communications Equipment

70 NasdaqUnited States

OthersGoldman Sachs,Deutsche Bank,Stifel Nicolaus

4/23/2012Beijing Boomsense Technology Co Ltd



FirmChina Merchants Securities

PwC 22

Technology Co., Ltd. Equipment Firm Securities




)

Primary exchange

Domicile nation



mn)

4/19/2012 Infoblox, Inc. Software 120 NYSEUnited States

EYMorgan Stanley,Goldman Sachs,UBS Securities

4/19/2012 Proofpoint Inc Software 82 NasdaqUnited

PwCCredit Suisse,

4/19/2012 Proofpoint, Inc. Software 82 NasdaqStates

PwCDeutsche Bank

4/18/2012 Splunk, Inc. Software 230 NasdaqUnited States

PwC

Morgan Stanley,Credit Suisse,JP Morgan,Bank of America Merrill Lynch

4/12/2012Guangdong EastoneCentury Technology Co., Ltd.



firmGF Securities

Surfilter Network f h h h

Local Chinese 4/12/2012

Surfilter Network Technology Co., Ltd.


firmGuosen Securities

3/29/2012 Enphase Energy, Inc. Semiconductors 54 NasdaqUnited States

Deloitte

Morgan Stanley,Bank of America Merrill Lynch,Deutsche Bank

3/28/2012Xian LONGi Silicon Materials Corp.

Semiconductors 250 Shanghai ChinaLocal Chinese


ll l dInternet Software & United

Morgan Stanley,ld h

PwC 23

3/28/2012 Millennial Media Inc.Internet Software & Services


EY Goldman Sachs,Barclays




mn)

Primary exchange

Domicile nation



mn)

3/21/2012 Vantiv, Inc. Software 500 NYSEUnited States

Deloitte

JP Morgan,Morgan Stanley,Credit Suisse,Goldman Sachs,Deutsche BankDeutsche Bank

3/21/2012 ExactTarget, Inc.Internet Software & Services


KPMGJP Morgan,Deutsche Bank, Stifel Nicolaus

3/14/2012M/A-Com Technology Solutions Holdings, Inc.

Semiconductors 114 NasdaqUnited States

DeloitteBarclays,JP Morgan,Jefferies & Co

3/14/2012 Demandware, Inc.Internet Software & Services


DeloitteGoldman Sachs,Deutsche BankServices States Deutsche Bank

3/9/2012Jiangsu Yunyi Electric Co., Ltd.


firmGF Securities

3/9/2012Toyou Feiji Electronics Co Ltd



firmPingan Securities

Co., Ltd. Peripherals firm

3/8/2012Shenzhen Changfang Light Emitting Diode Lighting Co., Ltd.



3/7/2012Shenzhen Jufei


Sinolink Securities

PwC

3/7/2012Optoelectronics Co., Ltd.

Semiconductors 81 Shenzhen Chinafirm

Sinolink Securities

24Source: Thomson Reuters, PwC Research



)

Primary exchange

Domicile nation



mn)

3/6/2012Fuchun Communications Co., Ltd.



firmGuoyuan Securities

Hakim Information IT Consulting & h h h

Local Chinese 3/5/2012

Hakim Information Technology Co., Ltd.




3/1/2012Leyard Opto-Electronic Co., Ltd.


firmChina Securities

3/1/2012Bluedon Info Security Tech Co


firmGF Securities

3/1/2012 Yelp, Inc.Internet Software & Services


DeloitteGoldman Sachs,Citi,Jefferies & CoJefferies & Co

2/28/2012Everyday Network Co., Ltd.




2/23/2012 Bazaarvoice, Inc. Software 114 NasdaqUnited States

PwCMorgan Stanley,Deutsche Bank,

StatesCredit Suisse

2/17/2012 INSIDE Secure Semiconductors 91 Euro Paris France PwCBNP Paribas SA,Lazard-Natixis

2/17/2012 Brightcove, Inc.Internet Software & S i

55 NasdaqUnited S

EYMorgan Stanley,S if l i l

PwC 25

2/17/2012 Brightcove, Inc.Services

55 NasdaqStates

EYStifel Nicolaus




)

Primary exchange

Domicile nation



mn)

2/16/2012 Sinodata Co., Ltd. Software 61 Shenzhen ChinaLocal Chinese

firmNortheast Securities

2/13/2012Universal Scientific Industrial (Shanghai) Co., Ltd.

Semiconductors 129 Shanghai China Deloitte Great Wall Securities(Shanghai) Co., Ltd.

2/7/2012Shandong Gettop Acoustic Co., Ltd.




IT Consulting & United

Citi,UBS Bank,

2/7/2012 EPAM Systems, Inc.IT Consulting & Services


Deloitte Barclays,Renaissance Securities

2/6/2012Longmaster Information & Technology Co., Ltd.



firmHongyuan Securities

2/2/2012Shenzhen Mason Technologies Co., Ltd.



2/1/2012 AVG Technologies N.V. Software 128 NYSE NetherlandsLocal Chinese

firm

Morgan Stanley,JP Morgan,Goldman Sachs

2/1/2012Greenway Medical Technologies, Inc.



Local Chinese firm

JP Morgan, Morgan Stanley

1/24/2012 Guidewire Software, Inc.Internet Software & Services


KPMGJP Morgan,Deutsche Bank, Citi

PwC 26

1/12/2012Beijing Philisense Technology Co., Ltd.



firmChina Galaxy Securities



Q4 summaryQ4 summary

PwC 27

IPO summary – Q4 2012IPO summary Q4 2012

Global technology IPOs* witnessed a 62% decline with just eight IPOs compared with 21 IPOs in Q4 2011.

• In Q4 2012, there were eight technology IPOs globally, down 27% from Q3 2012 in terms of number of deals, but up 35% to US$1.3bn in total proceeds from Q3 2012.

Q4

• US-based companies accounted for five of the eight IPOs (63%) and the funds raised were US$1.08bn (80% of total). China recorded only one IPO (13%), raising US$81.9mn (6% of total). The US and China both had decreases in number of deals on a sequential basis.

• Led by the IPO of Workday Inc the Software subsector raised 71% of the total proceeds with four IPOs The • Led by the IPO of Workday Inc, the Software subsector raised 71% of the total proceeds with four IPOs. The Internet Software & Services subsector recorded two IPOs, but contributed only 12% to the total proceeds.

• The NYSE remained one of the most active stock exchanges for technology IPOs in Q4 2012, with five deals and US$1.1bn in funds raised. Nasdaq, the Tokyo Stock Exchange and Others had one IPO each with funds raised being US$82mn US$48mn and US$100mn respectively Noticeably absent from Q4 activity were the raised being US$82mn, US$48mn and US$100mn respectively. Noticeably absent from Q4 activity were the Shenzhen and Shanghai exchanges.

• Companies completing IPOs with profitable operations recorded a marginal increase; from 60% last quarter to 71% in the current quarter.

• The Software subsector had the highest number of IPOs and also had the highest average revenues with US$209mn.

• The Computers & Peripherals subsector had the highest EV/LTM EBITDA at 78.5x and the Software subsector had the highest EV/LTM revenue at 15.2x in terms of valuations.

PwCSource: PwC Research

28


IPO summary – Q4 2012 (continued)IPO summary Q4 2012 (continued)

Top IPOs *

Company Sector Domicile nation

Issue size(in US$ mn)

Primaryexchange

Workday, Inc. Software United States 637 NYSE y, 37

LifeLock, Inc. Software United States 141 NYSE

Fl i G PLC S f I l d NYSEFleetmatics Group, PLC Software Ireland 133 NYSE

Ruckus Wireless, Inc. Computers & Peripherals United States 126 NYSE

Meganet Corp. IT Consulting & Services United States 100 OTC

YY, Inc. Internet Software & Services China 82 Nasdaq

Shutterstock, Inc. Internet Software & Services United States 77 NYSE

COLOPL, Inc. Software Japan 48 Tokyo

PwCSource: Thomson Reuters, PwC Research

29

*There were only 8 IPOs in Q4’12.


Q4 Distribution and trendsQ4 – Distribution and trends(Geographic, subsector, exchange, investment banker, auditor)

PwC 30

Global IPO trendsGlobal IPO trends

Sluggish growth continues to drag on the capital markets. Declining growth in China coupled with fiscal uncertainty in the US and Europe led to poor market conditions for IPOs. In spite of a buoyed US stock market, technology IPOs fell to their lowest level since 2008 Only eight tech companies went public in Q4 2012 a technology IPOs fell to their lowest level since 2008. Only eight tech companies went public in Q4 2012, a decrease of 27% sequentially and a sharp decline of 62% year over year.

3224,000

Bar = proceeds in US$ millions Number of IPOs [yellow line]

Q4 2011 21

Q 30

16

24

12 000

18,000

f IPO

s

mill

ions

Q1 2012 30

Q2 2012 20

Q3 2012 11

8

16

6,000

12,000

No.

of

In U

S$ m

Q4 2012 8

00

Q4

2011

Q1

2012

Q2

2012

Q3

2012

Q4

2012

PwC 31

Q Q Q Q Q


Geographic IPO trends*Geographic IPO trends

China

Although the US led the quarter with highest number of technology IPOs (5) and greatest money raised (US$1.1bn), it was much lower compared to the first half

f

8

12

16

20

600

900

1,200

1,500

of IP

Os

mill

ions

of 2012.

Chinese technology IPOs and money raised has shown a steady decline throughout the year. This quarter China had only one IPO. After three years of growth in IPOs, the decline in economic growth has led to lower numbers of

0

4

8

0

300

600

Q4

2011

Q1

2012

Q2

2012

Q3

2012

Q4

2012

No.

o

In U

S$ m decline in economic growth has led to lower numbers of

technology companies listing in Greater China.

New on the scene in Q4 were Japan and Ireland with one IPO each.

Q Q Q Q Q

20 20,000 8 2,800

United States All other countries

5

10

15

5,000

10,000

15,000N

o. o

f IPO

s

US$

mill

ions

2

4

6

700

1,400

2,100

No.

of I

POs

US$

mill

ions

0 0

Q4

2011

Q1

2012

Q2

2012

Q3

2012

Q4

2012

N

In U

0 0

Q4

2011

Q1

2012

Q2

2012

Q3

2012

Q4

2012

In U

i di d h h h i h d d d h l i f h h

PwC 32

* IPO is credited to the country where the company is headquartered and not the location of the exchange.


Region: AsiaPac (Shenzhen Tokyo)Region: AsiaPac (Shenzhen, Tokyo)


Primary exchange

Domicile nation


mn)

12/4/2012 COLOPL, Inc. Software 48 Tokyo Japan Deloitte Daiwa Securities

PwC 33Note: Deals have been classified based on the exchange where capital was raised..Source: Thomson Reuters, PwC Research

Region: North America (Nasdaq NYSE)Region: North America (Nasdaq, NYSE)


Primary exchange

Domicile nation


mn)

11/20/2012 YY, Inc.Internet Software & Services

82 Nasdaq China PwCMorgan Stanley,Deutsche Bank,Citi

11/15/2012Ruckus Wireless, Inc.


126 NYSE United States DeloitteGoldman Sachs,Morgan Stanley,Deutsche Bank

11/9/2012 Meganet Corp.IT Consulting & Services

100 OTC United States Not available Not available

10/11/2012 Workday, Inc. Software 637 NYSE United States EY

Morgan Stanley,Goldman Sachs,Allen & Co.,JP Morgan

Morgan Stanley10/10/2012 Shutterstock, Inc.


77 NYSE United States PwCMorgan Stanley,Deutsche Bank,Jefferies & Co.

PwC 34Note: Deals have been classified based on the exchange where capital was raised.Source: Thomson Reuters, PwC Research

Region: North America (Nasdaq NYSE) (continued) Region: North America (Nasdaq, NYSE) (continued)


Primary exchange

Domicile nation


mn)

10/4/2012Fleetmatics Group, PLC

Software 133 NYSE Ireland PwCBarclays,Bank of America Merrill Lynch

10/2/2012 LifeLock, Inc. Software 141 NYSEUnited States

EY

Goldman Sachs,Bank of America Merrill Lynch,Deutsche Bank

PwC 35Note: Deals have been classified based on the exchange where capital was raised.Source: Thomson Reuters, PwC Research

Geographic distribution* Geographic distribution The number of technology IPOs this quarter (8) was less than the number in the last quarter (11). The US led the market in terms of both the number of IPOs and the amount raised. There were five technology IPOs in the US raising US$1.1bn. In comparison, China, Japan and the other countries had one technology IPO each that raised US$82mn, US$48mn and US$133mn respectively.US$133mn respectively.

B d i US$ illi

5

6

1,000

1,200Number of IPOs [yellow line]

Bar = proceeds in US$ millions

United States 5

China 1

3

4

600

800

o. o

f IPO

s

S$ m

illio

ns

China 1

Japan 1

Others 1

T t l 8

1

2

200

400

No

In U

S Total 8

00

nite

d S

tate

s

Chi

na

Japa

n

Oth

ers

PwC 36

U

* IPO is credited to the country where the company is headquartered and not the location of the exchange.


Subsector distributionSubsector distributionIn terms of sector distribution of technology IPOs this quarter, the Software subsector led the way with four IPOs that raised US$241mn. It was followed by the Internet Software & Services subsector which had two IPOs that raised US$158mn. Computers & Peripherals and IT Consulting & Services each had one IPO that raised US$126mn and US$100mn respectively. The drop in IPOs across all subsectors was due to continued uncertainty in the capital markets.

B d i US$ illi

5

6

250

300Number of IPOs [yellow line]Bar = proceeds in US$ millions

Computers & Peripherals 1

Internet Software & Services 2

3

4

150

200

No.

of I

POs

S$ m

illio

ns Software 4

IT Consulting & Services 1

Total 8

1

2

50

100

N

In U

S Total 8

00

Com

pute

rs &

P

erip

hera

ls

et S

oftw

are

&

Ser

vice

s

Sof

twar

e

Con

sulti

ng &

S

ervi

ces

PwC 37

Inte

rne S IT


Stock exchange distributionContrary to earlier quarters when Chinese stock exchanges posted the highest number of listings, in Q4’12 the NYSE had the highest number of technology IPOs (5) with US$1.1bn in total proceeds.

Stock exchange distribution

5

6

1,000

1,200Bar = proceeds in US$ millions


Nasdaq 1

3

4

600

800

,

of IP

Os

mill

ions

NYSE 5

Tokyo 1

Others 1

1

2

200

400 No.

o

In U

S$ m

Total 8

00

Nas

daq

NY

SE

Toky

o

Oth

ers


Lead investment bankersLead investment bankers

Number of IPOs*

Deutsche Bank 1.3

Morgan Stanley 1.2

G ld S h 0 9Deutsche Bank16%

Morgan Stanley

Others 40%

Goldman Sachs 0.9

Bank of America Merrill Lynch 0.9

Barclays 0.5g y

16%

Goldman Sachs

Others 3.2

Total 8.0

Sachs11%

BoA Merrill Lynch11%Barclays

6%

PwC 39* Fractional IPOs result from multiple lead banks on the same issue.Source: Thomson Reuters, PwC Research

Lead auditorsLead auditors

Number of IPOs

PwC 3

EY 2Others 13%

Deloitte 2

Others 1

Total 8

PwC37%

Deloitte25%

EY25%

25%



Q4 Offering detail Q4 – Offering detail

PwC 41

Technology IPOs Q4 2012 – Offering details Technology IPOs Q4 2012 Offering details Top 5

IPO description Rationale Company description

Workday Inc The company intends to use the proceeds in the Workday, Inc. provides integrated professional Workday, Inc.

Issue Size: US$637mnCountry: United StatesBook Runner: Morgan Stanley,Goldman Sachs, Allen & Co., JP MorganI d t S ft

The company intends to use the proceeds in the following ways: To increase financial flexibility by increasing working capital and other general corporate purposes Expansion of business and payment of operating and capital lease liability

Workday, Inc. provides integrated professional financial, human capital and time management software solutions to various offices. It also provides training and education in classroom sessions both personally and virtually for easier usage of its software. It provides continuous access to on going product innovation to ensure Industry: Software

Auditor: EY

operating and capital lease liability access to on-going product innovation to ensure smooth and hassle-free adoption of new updates.

LifeLock, Inc. The company intends to use the proceeds to: Repay the outstanding balance associated with

LifeLock, Inc. provides proactive identity theft protection using innovative technologies that

Issue Size: US$141mnCountry: United StatesBook Runner: Goldman Sachs,Bank of America Merrill Lynch,Deutsche BankIndustry: Software

its acquisition of ID AnalyticsPay the amounts that will be payable to the holders of the Series E-1 preferred stock in a given condition and for working capital and other general corporate purposes

power the world's most sophisticated surveillance solutions—similar to the technology employed by government intelligence agencies and blue-chip corporations.

yAuditor: EY

PwCSource: Company filings, Press articles, Factiva

42

Technology IPOs Q4 2012 – Offering details (continued)Technology IPOs Q4 2012 Offering details (continued)Top 5IPO description Rationale Company description

Fleetmatics Group, PLC The company intends to use the proceeds in the FleetMatics Group, PLC is a provider of fleet p,

Issue Size: US$133mnCountry: Ireland Book Runner: Barclays,Bank of America Merrill LynchIndustry: Software

following ways: To increase our capitalisation and financial flexibility, increase our visibility in the marketplace and create a public market for our ordinary shares Use the net proceeds received from this offering

management solutions delivered as software-as-a-service, or SaaS. A mobile software platform enables businesses to meet the challenges associated with managing their local fleets of commercial vehicles and improve productivity by extracting actionable business intelligence Industry: Software

Auditor: PwC p g

for working capital and other general corporate purposes, including funding of our marketing activities, repayment of indebtedness and the costs of operating as a public company and further investment in the development of our proprietary technologies

by g b b gfrom vehicle and driver behavioural data. They offer intuitive, cost-effective Web-based and mobile application solutions that provide fleet operators with visibility into vehicle location, fuel usage, speed and mileage and other insights into their mobile workforce enabling them to technologies. into their mobile workforce, enabling them to reduce operating and capital costs.

Ruckus Wireless, Inc.

Issue Size: US$126mnCountry: United States

The company intends to use the proceeds in the following ways:To create a public market for common stock and thereby enable access to the public equity markets

Ruckus Wireless, Inc. is a provider of carrier-class Wi-Fi solutions. Solutions, such as Smart Wi-Fi, are used by service providers and enterprises to solve network capacity and y

Book Runner: Goldman Sachs,Morgan Stanley, Deutsche BankIndustry: Computers & PeripheralsAuditor: Deloitte

by our employees and stockholdersTo obtain additional capital and increase visibility in the marketplaceFor working capital and other general corporate purposes, including sales and marketing activities and products development

coverage challenges associated with the rapidly increasing traffic and number of users on wireless networks. Products include gateways, controllers and access points. These products incorporate proprietary technologies, including Smart Radio, Smart QoS, Smart Mesh, SmartCellp p

For the acquisition of, or investment in, technologies, solutions or businesses that complement the business

, Q , ,and Smart Scaling, to enable high performance in a variety of challenging operating conditions.

PwC 43Source: Company filings, Press articles, Factiva

Technology IPOs Q4 2012 – Offering details (continued)Technology IPOs Q4 2012 Offering details (continued)Top 5

IPO description Rationale Company description

YY, Inc.

Issue Size: US$82mnCountry: ChinaBook Runner: Morgan Stanley,Deutsche Bank, Citi

The company intends to use the proceeds in the following ways: Approximately US$15mn to invest in voice and video technology and infrastructure, including purchasing servers and leasing more bandwidth to support expanding user base and further

YY, Inc. is a communication social platform that engages users in real-time online group activities through voice, text and video.

,Industry: Internet Software & ServicesAuditor: PwC

pp p genhancing user experienceApproximately US$15mn to expand our product development and services offerings, including the hiring of additional research and development personnel and the further development of Mobile YYYYApproximately US$15mn to expand our sales and marketing activities, including the hiring of additional sales and marketing personnelThe balance for other general corporate purposes, including working capital needs, potential acquisitions partnerships alliances and potential acquisitions, partnerships, alliances and licensing opportunities

PwC 44Source: Company filings, press articles, Factiva


Q4 Key financials and valuation Q4 – Key financials and valuation metrics

PwC 45

Q4 2012 Technology sector IPOs – Key financials*Q4 2012 Technology sector IPOs Key financials

Company Sector LTM

revenueLTM

EBITDA LTM net income

Enterprise value (EV)

Total debt

Figures in US$mn

LifeLock, Inc. Software 251 20 22 1,008 -

Workday Inc Software 235 (84) (112) 7 787 16Workday, Inc. Software 235 (84) (112) 7,787 16

Fleetmatics Group, PLC Software 118 20 2 1,057 18

COLOPL, Inc. Software NA NA NA NA NA

Shutterstock, Inc.Internet Software & Services

155 27 24 878 -

YY, Inc.Internet Software & Services

106 14 10 603 -

Ruckus Wireless, Inc. Computers & Peripherals 194 23 33 1,747 14 , p p 94 3 33 ,747 4

Meganet Corp.** IT Consulting & Services 0.04 (0.38) (0.92) - 0.14

PwCSource: Capital IQ

LTM – Last twelve months

46

*Financials were available for 7 out of 8 IPOs in Q4 2012.**For Meganet Corp. – 2 decimal places has been used to capture the financials.

Q4 2012 Technology sector IPOs – Key financial insights*Q4 2012 Technology sector IPOs Key financial insights

Technology sector and subsector average financials are as follows:

Key financials (in US$mn) Net income status in Q4 2011 technology IPO universe (7*)IPO universe (7 )

2,400

3,000

3,600

150

200

250

29%

600

1,200

1,800

0

50

100

71%

29%

0 (50)

LTM EBITDA LTM net income LTM revenue Total debt (right axis) EV (right axis)Positive LTM net income

• Out of the seven technology companies that went public, 71% had positive net income.

• The Software and Computer & Peripherals subsectors had the highest average revenue of US$201mn and US$194mn each. The total technology sector average was US$151mn.

LTM EBITDA LTM net income LTM revenue Total debt (right axis) EV (right axis)Negative LTM net income

• Computers & Peripherals and Internet Software & Services had the highest average EBITDA of US$23mn and US$21mn respectively. The technology sector average was at US$3mn.

• Computers & Peripherals and Internet Software & Services had the highest average LTM net income of US$33mn and US$17mn respectively. The Software subsector had the lowest with average net loss of US$(29mn).

• The average enterprise value for technology sector was US$2 2bn Software and Computer & Peripherals had the

PwC

• The average enterprise value for technology sector was US$2.2bn. Software and Computer & Peripherals had the highest EV on a subsector basis of US$3.3bn and US$1.7bn respectively.

*Financials were available for 7 out of 8 IPOs in Q4 2012. 47

Q4 2012 Technology sector IPOs – Valuation metrics*Q4 2012 Technology sector IPOs Valuation metrics

Company Sector EV/LTM revenue EV/LTM EBITDA

LifeLock, Inc. Software 4.0x 49.6x

Workday, Inc. Software 32.7 x NMWorkday, Inc. Software 3 7

Fleetmatics Group, PLC Software 9.1 x 53.7x

COLOPL, Inc. Software NA NA

Shutterstock, Inc. Internet Software & Services 5.8x 32.9x

YY, Inc. Internet Software & Services 5.7x 43.3x

Ruckus Wireless, Inc. Computers & Peripherals 9.4x 78.5 x

Meganet Corp. IT Consulting & Services NA NA


LTM – Last twelve months

48

*Enterprise value was available for 6 out of 8 IPOs in Q4 2012.

Q4 2012 Technology sector IPOs – Key valuation insights*Technology sector and subsector average multiples are as follows:

Enterprise value multiple

20.0x100.0 x

Q4 2012 Technology sector IPOs Key valuation insights

12.0x

16.0x

60.0 x

80.0 x

0.0x

4.0x

8.0x

0.0 x

20.0 x

40.0 x

• The average technology sector EV/LTM revenue was 11.1x. The Software and Computer & Peripherals subsectors reported a EV/LTM revenue of 15.2x and 9.4x respectively. Internet Software & Services had an EV/LTM revenue of 5.8x.

EV / LTM EBITDA EV / LTM Revenue (right axis)

5

• The average technology sector EV/LTM EBITDA was 51.6x. Computer & Peripherals had the highest EV/LTM EBITDA multiple of 78.5x. It was followed by Software and Internet Software & Services with multiples of 51.7x and 38.1x respectively.

PwC 49

*Enterprise value was available for 6 out of 8 IPOs in Q4 2012.


Q4 Ownership detailQ4 – Ownership detail

PwC 50

Q4 2012 Technology sector IPOs – Management ownership* Q4 2012 Technology sector IPOs Management ownership

InstitutionsVC/PE

Figures in %

Company Sector /

firms (>5%

stake)

Individuals/Insiders

Public & other

Top 3 holdersVC/PE firms (<5%

stake)

Other institutions

LifeLock, Inc. Software - 13.9 34.4 1.6 50.1

Bessemer Venture Partners(17.1%)

Goldman Sachs Group (9.4%)Industry Ventures (8.8%)

David Albert Duffield (51.4%)

Workday, Inc. Software 1.1 6.1 17.5 58.3 17.0Greylock Partners (9.1%)

New Enterprise Associates (8.4%)

Fleetmatics Group, PLC

Software - 2.8 72.9 3.0 21.3

Investcorp Technology Partners (72.9%)

J M T ( %)PLC7 9 3 3

James M. Travers, (1.4%)John J. Goggin (1.3%)

COLOPL, Inc. Software 4.1 - - 74.9 21.0Naruatsu Baba (68.9%)

Kotaro Chiba (5.4%)KDDI Corporation (4.3%)

Shutterstock, Inc.Internet Software & Services

- 2.4 - 63.5 34.1Jonathan Oringer (55.2%)

Adam Riggs (7.1%)Fidelity Investments (1.8%)


51*Ownership details provided for companies available in Capital IQ.

Q4 2012 Technology sector IPOs – Management ownership* Q4 2012 Technology sector IPOs Management ownership (continued)

InstitutionsVC/PE

Figures in %

Company Sector /

firms (>5%

stake)

Individuals /Insiders

Public & other

Top 3 holdersVC/PE firms (<5%

stake)

Other institutions

YY, Inc.Internet Software & Services

2.0 4.8 - 44.3 48.9

Jun Lei (21.2%)Xueling Li (20.2%)

Tiger Global Six YY Holdings (7.2%)

Sequoia Capital (24 2%)Ruckus Wireless, Inc.


7.5 - 24.2 9.3 59.0Sequoia Capital (24.2%)

Google Inc. (5.4%)Selina Y. Lo (4.6%)


52*Ownership details provided for companies available in Capital IQ.

MethodologyMethodology

• The Global Technology IPO Review for Q4 and full-year 2012 is based on PwC’s analysis of transaction data extracted from Thomson Reuters and Capital IQ. The analysis considers IPOs across all countries worldwide during the period 1 October 2012 to 31 December 2012 (Q4) and 1 January 2012 to 31 December 2012 (full-year). Financial data was

b i d f C i l IQobtained from Capital IQ.

• The definition of the technology sector is based on Thomson Reuters and Capital IQ database industry classifications and includes the following subsectors:

- Internet Software & Services

- IT Consulting & Services

- Professional Services (Application software, software solutions, etc.)

- Semiconductors

- Software

- Computer Storage & Peripherals

◦ Computer, Computer Peripheral Equipment

◦ Computer Storage Device Manufacturing

- Electronic Computer Manufacturing

- Communications Equipment

• Only IPOs with issue size greater than US$40mn were included in the analysis.

• All monetary amounts are in US dollars unless otherwise indicated.

• LTM – Last twelve months

PwC 53

We exercised reasonable professional care and diligence in the collection, processing and reporting of this information. However, the data used is from third-party sources and PwC has not independently verified, validated or audited the data. PwC makes no representations or warranties with respect to the accuracy of the information, nor whether it is suitable for the purposes to which it is put by users.

Technology industry leadersTechnology industry leadersRaman ChitkaraGlobal Technology LeaderPhone: +1 408 817 3746Email: [email protected]

Rod Dring – Australia Werner Ballhaus – Germany Yury Pukha – RussiaPhone: 61 2 8266 7865Email: [email protected]

Phone: 49 211 981 5848Email: [email protected]


Estela Vieira – Brazil Sanjay Dhawan – India Greg Unsworth – SingaporePhone: 55 1 3674 3802Email: [email protected]


Phone: 65 6236 3738 Email: [email protected]

Christopher Dulny – Canada Kenji Katsura – Japan Douglas Mahony – UAEPhone: +416 869 2355Email: [email protected]



JianBin Gao – China Hoonsoo Yoon – Korea Jass Sarai– UKPhone: 86 21 2323 3362Email: [email protected]



Xavier Cauchois – France Ilja Linnemeijer – The Netherlands Tom Archer – USXavier Cauchois France Ilja Linnemeijer The Netherlands Tom Archer USPhone: 33 1 5657 10 33Email: [email protected]



PwC 54

For questions or comments please contact:For questions or comments, please contact:

Raman Chitkara Jan AkersGlobal Technology LeaderPhone: +1 408 817 3746Email: [email protected]

Global Technology MarketingPhone: +1 408 817 4449Email: [email protected]

PwC 55

This presentation is prepared by Global Research & Analytics Team, PwC SDC.

©2013 PricewaterhouseCoopers LLP. All rights reserved. “PricewaterhouseCoopers” refers to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity.

q4 & full-year 2012 global tech ipo final - pwc.fr · year in review – 2012 (continued) •...

Documents