technology, media & telecom...saas / cloud data & analytics digital transformation a.i. /...

Technology, Media & TelecomINFRASTRUCTURE SOFTWARE SECTOR REVIEW | Q1 2020

• Architecture, Engineering, and Construction Software

• Education Technology and Services

• Energy Technology

• Facilities and Real Estate Software

• Financial Technology and Payments

• Government Technology

• Healthcare IT

• Industrial and Supply Chain Technology

• Internet and eCommerce

• Retail Technology

Harris Williams Overview

1

HW TECHNOLOGY, MEDIA & TELECOM (“TMT”) GROUPHARRIS WILLIAMS (“HW”)• 25+ years and more than 1,000 closed transactions

• 360+ professionals across eight offices globally

• 170+ closed transactions in the last 24 months

• 10 industry groups

• 35+ dedicated TMT professionals

• TMT offices include Boston, San Francisco, and London

FOCUSED ADVISORY SERVICES

• Mergers and acquisitions (M&A)

• Capital raises

• Corporate divestitures

VERTICAL FOCUS SECTORSHORIZONTAL FOCUS SECTORS

• Application Software

• Cloud Managed Services and Hosting Solutions

• Compliance Solutions

• CRM and Marketing Automation

• Human Capital Management

• Infrastructure and Security Software

• IT and Tech-Enabled Services

• Marketing, Research, and Insights Software

KEY TMT THEMES

SaaS / Cloud Data & Analytics Digital Transformation A.I. / Machine Learning

CONSISTENT RECOGNITION FOR QUALITY

T E C H N O L O G Y , M E D I A & T E L E C O M

HW SOFTWARE TEAM

SELECT HW TMT TRANSACTIONS

has acquired has been acquired byhas been acquired byhas been

recapitalized by

has received an investment from

has made a strategicinvestment in

has been acquired by has acquired has acquired

Tyler DewingManaging Director

[email protected]: (617) 654-2133

Erik SzyndlarManaging Director


Sam HendlerManaging Director


Mike WilkinsManaging Director


Thierry MonjauzeManaging Director

[email protected]: +44 20 7518 8901

Andy LeedDirector


Dan LinsalataDirector


Julien OussadonDirector


Priyanka NaithaniDirector


Scott ReinigDirector


Sylvain NobletDirector


Brian TitteringtonDirector


mailto:[email protected]












HW Current Market Observations and Insights

LATEST HW MARKET INSIGHTS

For access to HW’s latest insights and perspectives, email us at [email protected] or visit www.harriswilliams.com/news-insights

M&A Learnings from Past Economic Disruptions

COVID-19 and M&A: Insights from Asia

Buyer Sentiment

• The desire to invest remains – buyers are actively seeking to deploy capital

• Private equity firms and strategic acquirers have focused on meeting near-term operational needs and assessing medium- to long-term impact of COVID-19

• Despite economic uncertainty, financial sponsors have record levels of capital to deploy, and many are communicating that they are “open for business,” while acknowledging high-quality deal flow will be limited

• As capital markets stabilize, companies with strong liquidity positions will be well-positioned to pursue acquisitions that accelerate growth

Economic Outlook

• Volatility in the public markets will likely remain as investors, businesses, and policy-makers evaluate rapidly evolving COVID-19 developments

• Economists and industry analysts expect a meaningful decline in GDP in 2Q’20 and 3Q’20, while they debate the shape and timing of the recovery

Debt Markets

• In contrast to the first half of 1Q’20, debt markets have shifted to a risk-off mentality

• Concerns over liquidity and funding availability contribute to uncertainty regarding the duration of the COVID-19 risk mitigation focus

M&A Valuations

• COVID-19 has pushed timelines for many transactions, but select deals are still closing successfully. Some may be temporarily on hold, and others are preparing for market and carefully weighing timing

• Companies that prove their ability to weather the current circumstances will receive significant interest and garner premium valuations

CURRENT MARKET OBSERVATIONS

Recent Publications:

For access to HW’s TMT content, email us at [email protected]

Deep Sector Expertise Across Key TMT Focus Areas

• Architecture, Engineering, and Construction

• Education Technology and Services

• Financial Technology and Payments

• Healthcare IT

• Industrial and Supply Chain Technology

• …and more

2

Global Consumer Businesses Consider Emergence from COVID-19


http://www.harriswilliams.com/news-insights


Infrastructure Software Taxonomy

Select Market Participants

DATA MANAGEMENT

Solutions that integrate, cleanse, migrate, and manage data across

platforms to produce accurate and consistent information

Data IntegrationData Quality and

GovernanceDatabase

ManagementData

Analytics


SECURITY

Solutions that protect software and systems against malicious

attacks, unauthorized access and resource use, and other external

and internal risks

Identity and Access

Management

SIEM / Security Analysis

Network / App / Data Security

Advanced Threat Protection


COLLABORATION / COMMUNICATION

Solutions that enable groups and teams to communicate, share,

coordinate, cooperate, and solve problems for the purpose of

completing a task

Project Portfolio

Management

Agile Project Management

Business Process

Management

Communications PaaS


CLOUD MANAGED SERVICES

Solutions that manage cloud security, computing, storage,

network operations, and application stacks to automate

and enhance business operations

PaaS / aPaaS / iPaaS

Managed Hosting and Applications

Managed Security

Backup and Disaster Recovery


SOFTWARE DEVELOPMENT / DEVOPS

Solutions that enable the software development lifecycle,

including planning, creating, testing, and deploying software

applications and systems

Application Lifecycle

Management

Continuous Integration / Continuous Delivery

Version Management

Test Management


IT OPERATIONS MANAGEMENT

Solutions that help to manage the provisioning, capacity,

performance, and availability of an organization’s IT

infrastructure

Infrastructure / App / Database

Performance Monitoring

IT GRC and Asset

Management

Service and Support

Management

Operations Analytics

3

BMC’s pending acquisition of Compuware

• Compuware provides mainframe application development, delivery, and support solutions to organizations worldwide.

• The Company’s solutions uniquely automate mainframe work, integrate into a cross-platform DevOps toolchain, and measure softwaredelivery quality, velocity, and efficiency.

• The combined company will help customers better manage their mainframe operations, cybersecurity, application development, data,and storage as part of their enterprise DevOps strategies, as well as provide seamless integration of the mainframe platform development and management processes into the enterprise technology stack.

Announced March 2, 2020

Enterprise Value: NA

Revenue: NA EV / EBITDA: NA

EV / Revenue: NA

Insight Partners’ acquisition of Armis

• Armis provides the first agentless, enterprise-class security platform to address the new threat landscape of unmanaged and IoTdevices, serving customers of all sizes and verticals, including 25% of the Fortune 50.

• The Company’s cybersecurity platform enables organizations to safely embrace unmanaged and IoT devices throughout their business through powerful device discovery, classification, and continuous threat assessment.

• Following the acquisition, Insight’s capital, deep cybersecurity industry expertise, and market-leading software track record will help Armis further strengthen its market dominance in unmanaged device security.

Closed February 11, 2020

Enterprise Value: $1,100M


EV / Revenue: NA

CollabNet VersionOne’s acquisition of XebiaLabs

• XebiaLabs provides an end-to-end DevOps toolchain orchestration and reporting solution, providing the automation, control, and visibility enterprises need to deliver software faster and with less risk.

• The Company’s release management, automation developer tools, and application delivery software enable organizations to orchestrate, automate, and analyze the entire software release pipeline at enterprise scale.

• The transaction unites CollabNet’s upstream Agile planning and enterprise version control functionality with XebiaLabs’ downstream release orchestration and deployment automation capabilities to create an Agile, end-to-end, DevOps platform for enterprises.

Closed January 21, 2020

Enterprise Value: NA


EV / Revenue: NA

Select Infrastructure Software M&A Transactions1,2

4

• Emailage provides SaaS fraud prevention, identity verification, and risk management solutions, assessing fraud risks by utilizing email address metadata and machine learning algorithms.

• The Company’s fraud prevention platform enables organizations to reduce online fraud by building multi-dimensional profiles associated with customer email addresses to render predictive fraud risk scores.

• The acquisition of Emailage enhances and expands LexisNexis’ email data intelligence and fraud prevention services, providing their customers an even more comprehensive view into consumers for more predictive risk assessment.

LexisNexis’ acquisition of EmailageClosed March 19, 2020

Enterprise Value: $480M


EV / Revenue: NA

Hellman & Friedman’s acquisition of Checkmarx

• Checkmarx provides security and application testing software solutions for modern enterprise DevOps, serving more than 1,400 customers in 70 countries.

• The Company’s DevOps platform enables organizations to deliver secure software faster by making security excellence intrinsic tosoftware development, bringing to light vulnerabilities in the software development lifecycle.

• Post acquisition, Checkmarx will leverage Hellman & Friedman’s capital and extensive industry expertise to continue executing on its growth strategy, through both organic growth and add-on acquisitions.

Closed April 16, 2020

Enterprise Value: $1,150M


EV / Revenue: NA

Impact of COVID-19 on the Infrastructure Software Sector1

5

Note: see pages 7-11 for companies comprising Infrastructure Software and Security Software buckets.

-

5.0x

10.0x

15.0x

20.0x

25.0x

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

NASDAQ Composite Index Infrastructure Software Security Software

-

2.0x

4.0x

6.0x

8.0x

10.0x

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

NASDAQ Composite Index Infrastructure Software Security Software

EV / NTM REVENUE MULTIPLES

EV / NTM CASH EBITDA MULTIPLES

As of March 31, 2020

As of March 31, 2020

HISTORICAL PERFORMANCE THROUGH CYCLES

Median EV / NTM Revenue 10 Year 5 Year 3 Year Mar-20

Infrastructure Software 4.0x 5.0x 5.4x 5.0x

Security Software 4.8x 5.4x 5.9x 5.4x

Median EV / NTM Cash EBITDA 10 Year 5 Year 3 Year Mar-20

Infrastructure Software 12.2x 15.5x 16.7x 16.2x

Security Software 12.2x 13.9x 14.8x 15.5x

2.1x

3.2x

4.0x

6.0x

5.0x

2.7x 3.3x

6.0x

7.1x

5.4x

RecessionFeb. 2009

Recovery2010

PostRecessionFeb. 2014

Year-End2019, Pre-

COVID

March 2020,COVID Impact

RecessionFeb. 2009

Recovery2010


Year-End2019, Pre-

COVID


Infrastructure Software Security Software

7.3x

10.7x 12.2x

17.2x 16.2x

6.9x

9.6x

12.7x

17.8x

15.5x

RecessionFeb. 2009

Recovery2010


Year-End2019, Pre-

COVID


RecessionFeb. 2009

Recovery2010


Year-End2019, Pre-

COVID


Infrastructure Software Security Software

Median EV / NTM Revenue

Median EV / NTM Cash EBITDA(1.0x)

(1.7x) (1.0x) (2.3x)

(150.0%)

(100.0%)

(50.0%)

0.0%

50.0%

100.0%

150.0%

200.0%

250.0%

Key Performance Metrics for Recent Software IPOs1

6

* Taken private by VMware.

3/22/18 4/26/18 5/10/18 6/28/18 7/26/18 7/26/18 10/4/18 10/11/18 10/18/18 4/10/19 4/10/19 6/11/19 4/20/18 7/31/19 9/13/19 9/18/19 9/19/19

$21.00 $15.00 $3.37 $21.00 $23.00 $20.00 $36.00 $17.00 $15.00 $14.00 $24.00 $34.00 $15.00 $16.00 $15.00 $27.00 $15.00

$1,127.7 $200.7 $3,212.6 $484.5 $2,132.4 $220.9 $2,539.5 $2,069.2 $4,574.1 $454.1 $1,799.3 $703.8 $5,046.3 $4,486.6 $1,299.2 $745.2 $1,192.7

$756.0 $174.5 $812.0 $193.2 $250.7 $126.8 $252.0 $263.5 $375.0 $107.8 $217.7 $612.0 $555.0 $569.8 $525.0 $648.0 $187.5

(13.8%) 176.7% 45.2% (52.7%) (5.0%) 75.8% 55.0% 78.0% 4.5% (37.3%) (28.0%) 63.8% N/A 49.0% 56.5% 33.3% 33.5%

IPO DATE

OFFER PRICE PER SHARE

OFFERING SIZE ($M)

OFFER TO CURRENT

MARKET CAP AT OFFER ($M)

% R

eve

nu

e G

row

thSt

ock

Pe

rfo

rman

ce (

Off

er

to C

urr

en

t)

Circle Size Denotes Revenue ($)

(13.8%)

176.7%

45.2%

(52.7%)

(5.0%)

75.8% 55.0%

78.0%

4.5%

(37.3%)(28.0%)

63.8%

N/A

49.0% 56.5%

33.3% 33.5%

31.0% 66.1%

105.5%

55.9%

81.6%

38.7%

109.7%

65.9%

72.6%

38.7% 48.0%

151.5%

22.4% 14.4%

74.0%

163.9%

24.6%

(100.0%)

0.0%

100.0%

200.0%

*

Infrastructure Software – Trading Comparables Metrics1

7

As of March 31, 2020 ($ in millions)

Revenue Growth Enterprise Value / Revenue Enterprise Value / EBITDA

Company TickerEnterprise

Value ($mm)

Market

Cap ($mm)

% of 52

Week High

1-Year Stock

Performance

3-Year Stock

PerformanceLTM NTM

LTM EBITDA

Margin

Pre-COVID

(Dec. 2019)LTM NTM

Pre-COVID

(Dec. 2019)LTM NTM

Price /

Earnings

D I V E R S I F I E D I N F R A S T R U C T U R E S O F T W A R E

C L O U D / S A A S I N F R A S T R U C T U R E S O F T W A R E

Microsoft MSFT $1,152,466 $1,199,550 82.7% 33.7% 139.5% 13.3% 11.0% 45.6% 8.6x 8.6x 7.7x 18.8x 18.8x 17.0x 27.1x

Oracle ORCL 180,767 152,413 79.9% (10.0%) 8.3% 1.0% 0.6% 41.2% 5.0x 4.5x 4.5x 12.2x 11.0x 9.3x 14.2x

IBM IBM 157,985 98,551 69.9% (21.4%) (36.3%) (3.1%) (4.0%) 21.8% 2.3x 2.0x 2.1x 10.7x 9.4x 10.3x 10.4x

Cisco Systems CSCO 156,718 166,709 67.5% (27.2%) 16.3% 1.4% (2.3%) 31.4% 3.8x 3.0x 3.1x 12.0x 9.7x 8.3x 15.1x

SAP SAP 146,037 134,524 79.3% (2.3%) 14.9% 9.3% 4.4% 24.4% 5.6x 4.7x 4.5x 23.0x 19.4x 12.4x 36.1x

Micro Focus MCRO 5,876 1,663 15.9% (84.1%) (86.6%) 4.4% (7.7%) 30.9% 2.0x 1.8x 1.9x 6.5x 5.7x 5.2x 1.1x

Software AG SOW 1,979 2,219 77.9% (11.3%) NA 0.8% (4.4%) 27.3% 2.4x 2.0x 2.1x 8.7x 7.2x 10.0x 12.8x

Median $156,718 $134,524 77.9% (11.3%) 11.6% 1.4% (2.3%) 30.9% 3.8x 3.0x 3.1x 12.0x 9.7x 10.0x 14.2x

ServiceNow NOW $53,833 $54,393 79.0% 16.3% 227.6% 32.6% 27.9% 8.5% 15.3x 15.6x 12.2x 179.7x 183.0x 42.8x 86.8x

Atlassian TEAM 32,907 33,687 87.9% 22.1% 358.3% 36.5% 25.3% 0.8% 20.3x 23.2x 18.5x NM NM 72.3x NM

Okta OKTA 14,712 15,010 85.5% 47.8% NA 46.8% 31.6% NM 25.7x 25.1x 19.1x NM NM NM NM

MongoDB MDB 7,860 7,860 73.9% (7.1%) NA 57.9% 22.1% NM 19.1x 18.6x 15.3x NM NM NM NM

Zendesk ZEN 7,361 7,256 67.5% (24.7%) 128.3% 36.4% 28.0% NM 10.7x 9.0x 7.0x NM NM 83.3x NM

Proofpoint PFPT 5,763 5,848 76.8% (15.5%) 38.0% 23.9% 19.1% NM 7.0x 6.5x 5.4x NM NM 40.8x NM

Smartsheet SMAR 4,431 4,933 74.4% 1.8% NA 52.4% 37.1% NM 19.5x 16.4x 11.9x NM NM NM NM

LogMeIn LOGM 4,226 4,047 96.1% 4.0% (14.6%) 4.7% 4.8% 25.3% 3.5x 3.4x 3.2x 13.7x 13.3x 10.6x NM

Qualys QLYS 3,154 3,401 90.6% 5.1% 129.5% 15.3% 13.0% 31.7% 9.2x 9.8x 8.7x 29.1x 30.9x 20.2x 49.0x

Nutanix NTNX 2,892 3,076 36.1% (58.1%) (15.8%) 0.6% 17.2% NM 4.6x 2.3x 2.0x NM NM NM NM

New Relic NEWR 2,496 2,740 42.5% (53.2%) 24.7% 28.4% 16.3% NM 6.3x 4.4x 3.8x NM NM 31.6x NM

Mimecast MIME 2,258 2,207 64.7% (25.4%) 57.7% 25.9% 20.1% 8.0% 6.7x 5.6x 4.6x 84.3x 69.6x 24.3x NM

Median $5,097 $5,390 75.6% (2.7%) 57.7% 30.5% 21.1% 8.5% 10.0x 9.4x 7.9x 56.7x 50.3x 36.2x 67.9x

Median $7,361 $7,256 76.8% (10.0%) 24.7% 15.3% 16.3% 26.6% 6.7x 5.6x 4.6x 13.7x 13.3x 17.0x 15.1x

Infrastructure Software – Trading Comparables Metrics by Sector1

8




Value ($mm)

Market

Cap ($mm)

% of 52

Week High

1-Year Stock

Performance

3-Year Stock

PerformanceLTM NTM

LTM EBITDA

Margin

Pre-COVID

(Dec. 2019)LTM NTM

Pre-COVID

(Dec. 2019)LTM NTM

Price /

Earnings

S E R V I C E S U P P O R T M A N A G E M E N T

C O N N E C T I V I T Y A N D C O L L A B O R A T I O N

V I R T U A L I Z A T I O N / C L I E N T C O M P U T I N G

M O B I L E D E V I C E M A N A G E M E N T

A P P L I C A T I O N P E R F O R M A N C E M A N A G E M E N T

B U S I N E S S P R O C E S S M A N A G E M E N T

R A P I D A P P L I C A T I O N D E V E L O P M E N T

I T M A N A G E M E N T

C O R P O R A T E P E R F O R M A N C E M A N A G E M E N T ( “ C P M ” ) / P L A N N I N G

SolarWinds SWI $6,726 $4,879 72.3% (19.7%) NA 11.9% 10.0% 23.5% 7.9x 7.2x 6.6x 33.7x 30.7x 14.2x NM

Atlassian TEAM $32,907 $33,687 87.9% 22.1% 358.3% 36.5% 25.3% 0.8% 20.3x 23.2x 18.5x NM NM 72.3x NM

Twilio TWLO $11,290 $12,503 59.3% (30.7%) 210.0% 74.5% 28.6% NM 10.8x 10.0x 7.7x NM NM 148.5x NM

Dropbox DBX $7,429 $7,581 69.1% (17.0%) NA 19.4% 13.5% 5.7% 4.4x 4.5x 3.9x 77.8x 79.0x 14.6x NM

Smartsheet SMAR $4,431 $4,933 74.4% 1.8% NA 52.4% 37.1% NM 19.5x 16.4x 11.9x NM NM NM NM

LogMeIn LOGM $4,226 $4,047 96.1% 4.0% (14.6%) 4.7% 4.8% 25.3% 3.5x 3.4x 3.2x 13.7x 13.3x 10.6x NM

Anaplan PLAN $3,885 $4,140 47.5% (23.1%) NA 44.6% 31.9% NM 21.1x 11.2x 8.5x NM NM NM NM

Vmware VMW $54,368 $50,621 58.6% (32.9%) 31.4% 12.5% 8.6% 18.9% 6.9x 5.0x 4.6x 27.0x 26.7x 13.3x 7.9x

Citrix Systems CTXS $17,730 $17,320 96.7% 42.0% 69.7% 1.2% 3.0% 23.2% 5.0x 5.9x 5.7x 21.4x 25.4x 17.4x 25.4x

Nutanix NTNX $2,892 $3,076 36.1% (58.1%) (15.8%) 0.6% 17.2% NM 4.6x 2.3x 2.0x NM NM NM NM

MobileIron MOBL $361 $439 48.8% (30.5%) (12.6%) 6.2% (2.5%) NM 2.3x 1.8x 1.8x NM NM NM NM

Datadog DDOG $9,975 $10,689 71.8% NA NA 83.2% 48.2% NM 28.9x 27.5x 18.6x NM NM NM NM

Dynatrace DT $7,046 $6,694 64.3% NA NA 28.5% 22.0% NM 14.6x 13.8x 11.3x NM NM 39.8x NM

New Relic NEWR $2,496 $2,740 42.5% (53.2%) 24.7% 28.4% 16.3% NM 6.3x 4.4x 3.8x NM NM 31.6x NM

Pegasystems PEGA $5,674 $5,674 69.1% 9.6% 62.4% 2.2% 19.6% NM 6.9x 6.2x 5.2x NM NM 103.3x NM

Appian APPN $2,607 $2,715 63.1% 16.8% NA 14.8% 13.5% NM 9.2x 10.0x 8.8x NM NM NM NM

Appian APPN $2,607 $2,715 63.1% 16.8% NA 14.8% 13.5% NM 9.2x 10.0x 8.8x NM NM NM NM

Progress Software PRGS $1,576 $1,433 61.0% (27.9%) 10.2% 16.2% (0.3%) 32.8% 4.9x 3.6x 3.6x 15.6x 11.1x 7.9x 37.6x

ServiceNow NOW $53,833 $54,393 79.0% 16.3% 227.6% 32.6% 27.9% 8.5% 15.3x 15.6x 12.2x 179.7x 183.0x 42.8x 86.8x

Zendesk ZEN $7,361 $7,256 67.5% (24.7%) 128.3% 36.4% 28.0% NM 10.7x 9.0x 7.0x NM NM 83.3x NM

PagerDuty PD $993 $1,345 28.9% NA NA 41.2% 24.9% NM 9.5x 6.0x 4.8x NM NM NM NM

Infrastructure Software – Trading Comparables Metrics by Sector1

9




Value ($mm)

Market

Cap ($mm)

% of 52

Week High

1-Year Stock

Performance

3-Year Stock

PerformanceLTM NTM

LTM EBITDA

Margin

Pre-COVID

(Dec. 2019)LTM NTM

Pre-COVID

(Dec. 2019)LTM NTM

Price /

Earnings

H A D O O P

D A T A B A S E S Y S T E M

A P P L I C A T I O N L I F E C Y C L E M A N A G E M E N T / C O L L A B O R A T I O N

P A A S

I A A S

D A T A M A N A G E M E N T

I T T R A I N I N G

D I G I T A L / C L O U D / A G I L E S E R V I C E S

E N T E R P R I S E D A T A S E A R C H

Splunk SPLK $20,262 $20,023 71.6% 1.3% 102.6% 30.8% 9.4% NM 10.7x 8.6x 7.9x NM NM 188.3x NM

Alteryx AYX $6,172 $6,225 59.4% 13.5% 508.9% 64.8% 33.2% 11.1% 15.2x 14.8x 11.1x 137.2x 133.1x 72.0x NM

Cloudera CLDR $2,174 $2,323 64.4% (28.1%) NA 65.5% 9.0% NM 4.3x 2.7x 2.5x NM NM 12.6x NM

Talend TLND $685 $702 42.2% (55.6%) (24.7%) 20.4% 11.5% NM 4.8x 2.8x 2.5x NM NM NM NM

Domo DOMO $279 $277 24.1% (75.4%) NA 21.7% 9.9% NM 3.5x 1.6x 1.5x NM NM NM NM

Elastic ESTC $4,301 $4,561 53.6% (30.1%) NA 59.8% 35.8% NM 14.4x 11.2x 8.2x NM NM NM NM

Cloudera CLDR $2,174 $2,323 64.4% (28.1%) NA 65.5% 9.0% NM 4.3x 2.7x 2.5x NM NM 12.6x NM

MongoDB MDB $7,860 $7,860 73.9% (7.1%) NA 57.9% 22.1% NM 19.1x 18.6x 15.3x NM NM NM NM

Atlassian TEAM $32,907 $33,687 87.9% 22.1% 358.3% 36.5% 25.3% 0.8% 20.3x 23.2x 18.5x NM NM 72.3x NM

Salesforce.com CRM $127,168 $128,862 73.6% (9.1%) 74.5% 28.7% 22.2% 13.3% 9.1x 7.4x 6.1x 66.2x 55.8x 20.9x NM

Amazon AMZN $993,194 $970,680 89.2% 9.5% 119.9% 20.5% 19.2% 12.9% 3.4x 3.5x 3.0x 26.2x 27.4x 19.7x 83.8x

Pluralsight PS $1,285 $1,157 30.8% (65.4%) NA 36.6% 22.2% NM 5.9x 4.1x 3.3x NM NM NM NM

EPAM Systems EPAM $9,586 $10,259 74.8% 9.8% 145.8% 24.5% 21.7% 15.2% 4.8x 4.2x 3.4x 31.7x 27.5x 19.3x 39.3x

Globant GLOB $3,284 $3,254 62.0% 23.1% 141.4% 26.2% 22.3% 17.5% 6.0x 5.0x 4.1x 34.0x 28.4x 20.6x 60.2x

Endava DAVA $1,809 $1,847 61.9% 27.9% NA 27.9% 14.4% 9.2% 5.7x 4.3x 3.8x 61.8x 46.7x 16.8x 91.5x

E D G E C O M P U T I N G / W E B P E R F O R M A N C E

Akamai AKAM $15,945 $14,811 88.5% 27.6% 53.2% 6.6% 6.4% 29.2% 5.0x 5.5x 5.2x 17.3x 18.9x 12.1x 31.0x

Cloudflare NET $6,477 $7,106 89.3% NA NA 49.0% 34.5% NM 15.6x 22.6x 16.8x NM NM NM NM

Security Software – Trading Comparables Metrics by Sector1

10




Value ($mm)

Market

Cap ($mm)

% of 52

Week High

1-Year Stock

Performance

3-Year Stock

PerformanceLTM NTM

LTM EBITDA

Margin

Pre-COVID

(Dec. 2019)LTM NTM

Pre-COVID

(Dec. 2019)LTM NTM

Price /

Earnings

E N D P O I N T P R O T E C T I O N / A N T I - V I R U S

E N T E R P R I S E N E T W O R K F I R E W A L L

W E B S E C U R I T Y / S E C U R E W E B G A T E W A Y

I D E N T I T Y A N D A C C E S S M A N A G E M E N T

P R I V I L E G E D A C C E S S M A N A G E M E N T

E M A I L / M E S S A G I N G S E C U R I T Y

V U L N E R A B I L I T Y M A N A G E M E N T

S E C U R I T Y I N C I D E N T R E S P O N S E

A D V A N C E D T H R E A T P R O T E C T I O N

Check Point Software CHKP $13,049 $14,629 75.7% (20.5%) (2.1%) 4.1% 1.9% 45.1% 7.6x 6.5x 6.4x 16.9x 14.5x 13.3x 17.7x

CrowdStrike CRWD $10,960 $11,872 54.7% NA NA 92.7% 50.6% NM 23.0x 22.8x 15.1x NM NM NM NM

Avast AVST $5,786 $4,954 71.3% 32.8% NA 7.8% 2.9% 48.9% 8.2x 6.6x 6.5x 16.9x 13.6x 11.5x 19.9x

Trend Micro 4704 $5,303 $6,906 87.5% 2.0% 11.8% 4.0% 6.2% 32.4% 3.7x 3.5x 3.3x 11.3x 10.8x 10.6x 26.9x

NortonLifeLock NLOK $3,057 $11,233 65.2% (18.6%) (39.0%) 56.4% (48.6%) 21.2% 3.9x 0.6x 1.2x 17.6x 3.0x 4.3x 3.0x

FireEye FEYE $2,380 $2,320 57.7% (37.0%) (16.1%) 7.0% 4.7% NM 4.1x 2.7x 2.6x NM NM 20.5x NM

Fortinet FTNT $15,434 $17,453 83.0% 20.5% 163.8% 19.7% 16.8% 18.8% 7.6x 7.2x 6.1x 40.3x 38.0x 23.2x 53.5x

Palo Alto Networks PANW $15,083 $16,348 65.3% (32.5%) 45.5% 20.3% 16.4% 1.5% 7.2x 4.8x 4.2x NM NM 20.0x NM

Check Point Software CHKP $13,049 $14,629 75.7% (20.5%) (2.1%) 4.1% 1.9% 45.1% 7.6x 6.5x 6.4x 16.9x 14.5x 13.3x 17.7x

Zscaler ZS $7,522 $7,872 68.0% (14.2%) NA 48.2% 32.2% NM 16.8x 20.9x 15.8x NM NM NM NM

Okta OKTA $14,712 $15,010 85.5% 47.8% NA 46.8% 31.6% NM 25.7x 25.1x 19.1x NM NM NM NM

CyberArk Software CYBR $2,707 $3,262 57.5% (28.1%) 68.2% 26.4% 15.7% 16.8% 9.0x 6.2x 5.4x 53.6x 37.1x 23.4x 51.7x

Ping PING $1,580 $1,596 67.2% NA NA 20.5% 9.3% 9.9% 7.9x 6.5x 6.0x 80.4x 65.8x 55.2x NM

SailPoint Technologies SAIL $1,278 $1,370 52.1% (47.0%) NA 15.9% 8.7% 3.1% 6.9x 4.4x 4.1x NM 142.6x 199.9x NM

CyberArk Software CYBR $2,707 $3,262 57.5% (28.1%) 68.2% 26.4% 15.7% 16.8% 9.0x 6.2x 5.4x 53.6x 37.1x 23.4x 51.7x

Proofpoint PFPT $5,763 $5,848 76.8% (15.5%) 38.0% 23.9% 19.1% NM 7.0x 6.5x 5.4x NM NM 40.8x NM

Mimecast MIME $2,258 $2,207 64.7% (25.4%) 57.7% 25.9% 20.1% 8.0% 6.7x 5.6x 4.6x 84.3x 69.6x 24.3x NM

Qualys QLYS $3,154 $3,401 90.6% 5.1% 129.5% 15.3% 13.0% 31.7% 9.2x 9.8x 8.7x 29.1x 30.9x 20.2x 49.0x

Rapid7 RPD $2,201 $2,176 65.6% (14.4%) 189.3% 33.9% 21.4% NM 8.5x 6.7x 5.5x NM NM 110.3x NM

Tenable TENB $2,007 $2,173 60.3% (31.0%) NA 32.6% 23.0% NM 5.9x 5.7x 4.6x NM NM NM NM



M A N A G E D S E C U R I T Y S E R V I C E SSecureWorks SCWX $786 $938 57.5% (37.4%) 21.2% 6.6% 0.5% NM 2.3x 1.4x 1.4x NM NM 95.3x NM

Security Software – Trading Comparables Metrics by Sector1

11




Value ($mm)

Market

Cap ($mm)

% of 52

Week High

1-Year Stock

Performance

3-Year Stock

PerformanceLTM NTM

LTM EBITDA

Margin

Pre-COVID

(Dec. 2019)LTM NTM

Pre-COVID

(Dec. 2019)LTM NTM

Price /

Earnings

U N I F I E D T H R E A T M A N A G E M E N T / S M B

Fortinet FTNT $15,434 $17,453 83.0% 20.5% 163.8% 19.7% 16.8% 18.8% 7.6x 7.2x 6.1x 40.3x 38.0x 23.2x 53.5x

Tufin TUFN $218 $312 28.3% NA NA 21.5% 9.8% NM 5.0x 2.1x 1.9x NM NM NM NM

W E B A P P L I C A T I O N F I R E W A L L

Akamai AKAM $15,945 $14,811 88.5% 27.6% 53.2% 6.6% 6.4% 29.2% 5.0x 5.5x 5.2x 17.3x 18.9x 12.1x 31.0x

Cloudflare NET $6,477 $7,106 89.3% NA NA 49.0% 34.5% NM 15.6x 22.6x 16.8x NM NM NM NM

Closed Date Target Buyer(s) Description

Enterprise

Value USDm

Implied EV /

Revenue

Implied EV /

EBITDA

Infrastructure Software – Select Recent M&A Transactions1,2

12

* Unpublished information.

Pending RSA Securi ty STG Partners ; OTPP; AlpInvest Provider of cybersecuri ty detection, management, and prevention solutions . $2,075 * *

Pending Forescout Technologies Advent International Provider of securi ty software for device vis ibi l i ty and control . $1,786 5.3x *

Pending CLOUDGENIX Palo Al to Networks Provider of a software-defined wide-area network to enforce compl iance with company securi ty protocols . $420 * *

Pending Vidado SS&C Provider of an enterprise machine learning paper-to-digi ta l data transformation platform. * * *

Pending Panda Securi ty WatchGuard Provider of advanced endpoint protection solutions for enterprises and consumers . * * *

Pending Compuware BMC Provider of mainframe appl ication development, del ivery, and support solutions . * * *

04/16/2020 Checkmarx Hel lman & Friedman Provider of securi ty and appl ication testing software solutions . $1,150 * *

03/19/2020 Emai lage LexisNexis Risk Solutions Provider of fraud prevention and core ri sk detection software solutions . * * *

03/19/2020 Pondera Solutions Thomson Reuters Provider of a fraud detection as a service software platform. * * *

03/05/2020 Heimdal Securi ty Marl in Equity Partners Provider of a cloud-based endpoint protection platform. * * *

02/18/2020 Cornerstone Technology Google Cloud Provider of appl ication modernization and cloud migration solutions . * * *

02/11/2020 Armis Ins ight Partners Provider of a cybersecuri ty platform to address the threat of unmanaged and IoT devices . $1,100 * *

02/07/2020 Dessa Square Provider of a sui te of tools for machine learning development and production. * * *

02/07/2020 Passage AI ServiceNow Provider of a conversational AI platform. $33 * *

02/06/2020 Loom Systems ServiceNow Provider of an AI-powered log analys is platform. $58 * *

02/05/2020 Revulytics Flexera Provider of cloud-based software usage analytics solutions . * * *

02/03/2020 Scyta le Hewlett Packard Enterprise Provider of a cloud native open-source securi ty platform. * * *

01/21/2020 XebiaLabs Col labNet Vers ionOne Provider of an end-to-end DevOps toolchain orchestration and reporting solutions . * * *

01/15/2020 Fidel is Cybersecuri ty Skyview Capita l Provider of threat detection, hunting, and response securi ty software. * * *

01/13/2020 Unomaly LogicMonitor (Vis ta Equity Partners ) Provider of AIOps software for IT monitoring automation. * * *

Select Harris Williams TMT Transactions

13

acquired by acquired by acquired by acquired by acquired bymajority investment fromacquired bygrowth Investment frommajority investment fromacquiredacquired byinvestment fromacquired byacquiredacquired by

majority investment from acquired by acquired byacquired by acquired byacquired byacquired byacquired byacquired byrecapitalized byacquired by

B2C

acquired byacquiredacquired byrecapitalized by

acquired by acquired byacquired by acquired by acquired by

&

investment from investment frommerged withacquired acquired byacquired bymajority investment frominvested in

a wholly-owned affiliate of

acquired by

&

acquired

acquired by minority investment from acquired by acquired byacquired bymerged withacquired byacquired byacquired by strategic investment frommajority investment fromacquired byacquired a majority stake inacquired byacquired by

acquired by acquired by acquired by acquired by acquired byacquired bymajority recapitalization by

recapitalized by acquired byacquired byacquired byacquired by acquired byacquired byacquired by

acquired by acquired acquired by acquired byacquired byacquiredacquired by

&

acquired byacquiredacquired byacquired byacquiredacquired bystrategic investment fromacquired

acquired acquired by acquired bysignificant growth investment from

acquired byacquired by controlling investment fromacquired acquired bysignificant growth investment from

acquired byinvestment from

recapitalized bystrategic investment in acquired by

http://www.leisurepassgroup.com/

Our Firm

Harris Williams has a broad range of industry expertise, which creates powerful opportunities. Our clients benefit from our deep sector experience, integrated industry intelligence and collaboration across the firm, and our commitment to learning what makes them unique. For more information, visit our website at www.harriswilliams.com/industries.

14

Technology, Media & Telecom

Healthcare & Life Sciences

Energy, Power & Infrastructure

IndustrialsAerospace, Defense & Government Services

Building Products & Materials

Business Services

Consumer Specialty Distribution

Transportation & Logistics

UNITED STATES EUROPE

BostonOne International PlaceSuite 2620Boston, Massachusetts 02110Phone: +1 (617) 482-7501

Cleveland1900 East 9th Street25th FloorCleveland, Ohio 44114Phone: +1 (216) 689-2400

Minneapolis222 South 9th StreetSuite 3350Minneapolis, Minnesota 55402Phone: +1 (612) 359-2700

Richmond (Headquarters)1001 Haxall Point9th FloorRichmond, Virginia 23219Phone: +1 (804) 648-0072

San Francisco575 Market Street31st FloorSan Francisco, California 94105Phone: +1 (415) 288-4260

Washington, D.C. 800 17th St. NW2nd FloorWashington, D.C. 20006Phone: +1 (202) 207-2300

FrankfurtBockenheimer Landstrasse 33-3560325 FrankfurtGermanyPhone: +49 069 3650638 00

London25 Savile Row4th FloorLondon W1S 2ER, EnglandPhone: +44 (0) 20 7518 8900

Harris Williams Office Locations

http://www.harriswilliams.com/industries

Sources & Disclosures

1. S&P Capital IQ.

2. PitchBook.

15

Sources

Disclosures

The information and views contained in this report were prepared by Harris Williams LLC (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any securities or financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The securities and financial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.

Harris Williams LLC is a registered broker-dealer and member of FINRA and SIPC. Harris Williams & Co. Ltd is a private limited company incorporated under English law with its registered office at 8th Floor, 20 Farringdon Street, London EC4A 4AB, UK, registered with the Registrar of Companies for England and Wales (registration number 07078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. Corporate Finance Advisors GmbH is registered in the commercial register of the local court of Frankfurt am Main, Germany, under HRB 107540. The registered address is Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany (email address: [email protected]). Geschäftsführer/Directors: Jeffery H. Perkins, Paul Poggi. (VAT No. DE321666994). Harris Williams is a trade name under which Harris Williams LLC, Harris Williams & Co. Ltd and Harris Williams & Co. Corporate Finance Advisors GmbH conduct business.

technology, media & telecom...saas / cloud data & analytics digital transformation a.i. /...

Documents