forecast 2018: part 2 - corum group · 2 a leader in the software industry, bruce has founded or...

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Forecast 2018: Part 2

Private Equity Roundtable

February 8, 2018

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A leader in the software industry, Bruce has founded or owned four software companies, including the largest vertical

market software company, AMI, an Inc. 500 firm rated by IDC as the fastest growing computer-related company in the

world.

He has served on advisory boards for Microsoft, IBM, DEC, Comdex and Apple, and as board member/founding

investor in some of the most innovative firms in their field, including Blue Coat, Bright Star and Sabaki. Past advisor to

two governors and a senator, a board member of the Washington Technology Center, and founder of the WTIA, the

nation’s most active regional technology trade association.

He worked with the Canadian government to found SoftWorld, and he was recently chosen as one of the 200 most

influential individuals in the IT community in Europe. He was also the only American juror for the recent Tornado 100

Awards given to Europe’s top technology firms

A graduate with Distinction from Harvard Business School, Bruce has written three books on business models for

success, including Power Planning. He is a frequent lecturer and author.

Welcome

Bruce Milne

CEO

Corum Group Ltd.

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Agenda

▪Welcome

▪WFS - “Growth & Exit Strategies”

San Francisco, February 22

▪February 2018 Research Report

▪Special Report: Private Equity and Tech

▪Private Equity Roundtable

▪Q&A

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Marc O’Brien

Vice President

Corum Group Ltd.

WFS – “Growth & Exit Strategies”San Francisco, February 22

Marc has over 30 years of experience with both large and startup software companies focusing on SaaS, enterprise and digital

markets, including as the founder and CEO of two firms that he led to successful acquisitions. He has been an executive managing

companies in North America, Europe and Asia Pacific.

Marc was the founder/CEO of WebProject, the first team collaboration internet company with the backing of Cisco and Sun

Microsystems. He then led the successful sale of the company to Novient Inc. He subsequently was the founder/CEO of Projity, the

leading SaaS project management solution. Marc led the successful acquisition of the company to Serena Software.

Marc joined content management powerhouse Acquia as Vice President and General Manager, helping lead Acquia to tremendous

growth and raising over $194 million in venture funding with positioning for a future IPO. He is also Chairman of the Board of

ProjectLibre Inc, an open source alternative to Microsoft Project with over three million downloads in over 200 countries.

He graduated from Clarkson University with a B.S. in Engineering & Management.

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WFS – “Growth & Exit Strategies”San Francisco, February 22

Growth & Exit Strategies San Francisco

February 22, 2018 https://www.wfs.com/SF-2018

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Corum Research Report

Elon Gasper

EVP, Research

Becky Hill

Analyst

Amber Stoner

Director of Research

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Public Markets

Jan Mar May Jul Sep Nov Jan

53%

29%

35%

0%

10%

20%

30%

40%

50%

60% Weekly Percentage Change

S&P TECH Dow Jones NASDAQ

USA Jan 2018

S&P Tech 8%

NASDAQ 5%

Dow Jones 3%

Asia Jan 2018

HANG SENG 9%

SSE Composite 5%

Nikkei 2%

Europe Jan 2018

CAC 40 1%

DAX -1%

FTSE 100 -3%

2017 2018

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0%

100%

200%

300%

400%

500%

600% Daily Percentage Change

NASDAQ S&P TECH Dow Jones

The Bull Market, 2009-Present2018

2009 2011 2013 2015 20172009 2011 2013 2015 2017

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Corum Index

Market

Transactions

Jan. 2018Jan. 2017

335 275

Mega Deals5 6

Largest Deal $3.7B $17B

PipelinePrivate Equity Deals

33 35

VC Backed Exits4953

Attributes33%

Cross Border

Transactions 35%

Start-Up

Acquisitions 9%9%

17 yrs16 yrsAverage Life

of Target

Jan. 2017 Jan. 2018

Jan. 2017 Jan. 2018

0%

18%

6%

8%

359%

20%

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2018 Mega Deals – YTD

IT SERVICES

$5.1BINFRASTRUCTURE

$7.2BHORIZONTAL

$5.9B

$3.5B $17B

INTERNET

$20B

$6.2B$5.1B

$2.4B

Financial Markets Business

$1.0B $3.4B

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IT SERVICES

$5.1BINFRASTRUCTURE

$7.2BHORIZONTAL

$5.9B

$3.5B $17B

INTERNET

$20B

$6.2B$5.1B

$2.4B


$1.0B $3.4B

Sold to

Target: Blackhawk Network Holdings [USA]

Acquirer: Silver Lake Partners / P2 Capital Partners [USA]

Transaction Value: $3.5B

- Physical and digital gift card and prepaid payments network

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Horizontal Application Software Market

4.6x

20.8x

Public Valuation Multiples

EV

Sales

Since Q4 Corum Analysis

EV

EBITDA

Breaks out of eight month range to record highs...

Jan. 2018

…while EBITDA metrics reach their ninth month of stability

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IT SERVICES

$5.1BINFRASTRUCTURE

$7.2BHORIZONTAL

$5.9B

$3.5B $17B

INTERNET

$20B

$6.2B$5.1B

$2.4B


$1.0B $3.4B

Sold to

Target: Callidus Software Inc. [dba CallidusCloud] [USA]

Acquirer: AP SE [Germany]

Transaction Value: $2.4B (9.6x EV/Sales)

- Cloud-based Lead to Money (Quote-to-Cash) solutions

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4.6x

20.8x

Deal Spotlights: Customer Analytics

EV

Sales


EV

EBITDA



Jan. 2018

Target: Talkwalker [Luxembourg]

Acquirer: Marlin Equity Partners [USA]

- Cloud-based social media listening platform

Target: TheySay Limited [United Kingdom]

Acquirer: Aptean [Vista Equity Partners] [USA]

- Text analytics platform, computational linguistics and deep learning

Sold to

Sold to

15


4.6x

20.8x

Deal Spotlights: HR

EV

Sales


EV

EBITDA



Jan. 2018

Targets: Motus [USA]; Runzheimer [USA]

Acquirer: Thoma Bravo [USA]

- Motus is a vehicle management and reimbursement platform

- Runzheimer is a business vehicle and relocation information services

Target: SkipFlag [USA]

Acquirer: Workday [USA]

- Machine intelligence-based software to discover and organize workplace information

Sold to

Sold to

16


4.6x

20.8x

Deal Spotlight: Conversational AI

EV

Sales


EV

EBITDA



Jan. 2018

Target: Converse.AI [USA]

Acquirer: Smartsheet [USA]

- Сhat flow NLP-driven SaaS for business automation

Sold to

Target: Intelligens.ai [Chile]

Acquirer: Conversica [USA]

- Automated customer support SaaS

Sold to

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Internet Market


4.8x

28.8x

EV

Sales

Corum Analysis

EV

EBITDA

Volatility continues as Internet hopes spring eternal…

…while the value of actual profitable business models soars to 2015 levels

Jan. 2018Since Q4

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IT SERVICES

$5.1BINFRASTRUCTURE

$7.2BHORIZONTAL

$5.9B

$3.5B $17B

INTERNET

$20B

$6.2B$5.1B

$2.4B


$1.0B $3.4B

Sold to

Target: Thomson Reuters (financial markets business) [USA]

Acquirer: Blackstone Group LP [USA]

Transaction Value: $17B (3.3x EV/Sales)

- Foreign exchange and treasury trading platforms


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Internet Software MarketDeal Spotlights: Reference Content

4.8x

28.8x

EV

Sales

Corum Analysis

EV

EBITDA


…while the value of actual profitable business models soar to 2015 levels

Jan. 2018Since Q4

Target: Docu Group Deutsche Holding [Germany]

Acquirer: Infopro Digital [France]

- Information solutions for construction projects, building products etc.

Target: Infobase Holdings [VSS] [USA]

Acquirer: Centre Lane Partners [USA]

- Cloud-based educational and vocational information services

Sold to

Sold to

Sold to

Target: Shungham Information [Belgium]

Acquirer: FiscalNote [USA]

- Reports on regulatory information on EU issues provided through an online platform

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Internet Software MarketDeal Spotlight: Online Marketplace

4.8x

28.8x

EV

Sales

Corum Analysis

EV

EBITDA



Jan. 2018Since Q4

Target: Avvo [USA]

Acquirer: Internet Brands [KKR] [USA]

- Online legal services marketplace, offering lawyer referrals

- Complements Internet Brands’ Legal Marketing Network

Sold to

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Internet Software MarketDeal Spotlights: Social Networks

4.8x

28.8x

EV

Sales

Corum Analysis

EV

EBITDA



Jan. 2018Since Q4

Target: HubPages [USA]

Acquirer: TheMaven Network [USA]

Transaction Value: $15M

- Free web-content hosting platform that allows members to write articles

- Allows HubPages to get stock in a publicly traded company

Target: MovieLaLa [USA]

Acquirer: GfyCat [USA]

- Social network for movie fans

- Strengthens Gfycat’s movie marketing capabilities allowing to work directly with studios

Sold to

Sold to

22

Internet Software MarketDeal Spotlights: Food Delivery

4.8x

28.8x

EV

Sales

Corum Analysis

EV

EBITDA



Jan. 2018Since Q4 Sold to

Target: Ando [USA]

Acquirer: Uber Eats [USA]

- Online food delivery service

Sold to

Target: Entrees On-Trays [USA]

Acquirer: Square [USA]

- Restaurant delivery service

- Adds to Square’s food-ordering platform, Caviar

Sold to

Target: FoodCheri [France]

Acquirer: Sodexo [France]

- Mobile application for ordering meals

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IT SERVICES

$5.1BINFRASTRUCTURE

$7.2BHORIZONTAL

$5.9B

$3.5B $17B

INTERNET

$20B

$6.2B$5.1B

$2.4B


$1.0B $3.4B

Sold to

Target: YOOX Net-a-Porter Group [Italy]

Acquirer: Richemont [Switzerland]


- Online editorial content and luxury e-commerce platform

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Infrastructure Software Market

4.8x

18.2x


EV

Sales

Corum Analysis

EV

EBITDA

Broad and steady rise

of over 37% during the

last six months…

…with value of profits

pausing at a record high

Since Q4 Jan. 2018

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IT SERVICES

$5.1BINFRASTRUCTURE

$7.2BHORIZONTAL

$5.9B

$3.5B $17B

INTERNET

$20B

$6.2B$5.1B

$2.4B


$1.0B $3.4B

Sold to

Target: Xerox Corporation [USA]

Acquirer: Fujifilm Holdings [Japan]


- Printing technologies and document management solutions

- Pioneering PARC R&D subsidiary large contributor to Ethernet, GUI, OOP, VLSI tech

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4.8x

18.2x

Deal Spotlights: Security

EV

Sales

Corum Analysis

EV

EBITDA



last six months…



Since Q4 Jan. 2018Sold to

Target: Percipient Networks [Allied Minds] [USA]

Acquirer: WatchGuard Technologies [Francisco Partners] [USA]

- Cloud-based intelligent malware solution

Sold to

Target: Niddel Corp. [USA]

Acquirer: Verizon Communications [USA]

- Machine-learning-based automated threat hunting

Sold to

Target: ThreatMetrix [USA]

Acquirer: RELX Group [United Kingdom]

Transaction Value: $819M

- Context-based business security and fraud prevention solutions

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4.8x

18.2x

EV

Sales

Corum Analysis

EV

EBITDA



last six months…



Since Q4 Jan. 2018

Deal Spotlights: Identity and Access Management

Sold to

Sold to

Target: Confirm.io [USA]

Acquirer: Facebook [USA]

- Mobile ID authentication software checks on any government issued IDs

Target: Cyberinc [Aurionpro Solutions] [USA]

Acquirer: KPMG [USA]

Transaction Value: $34,3M

- IDM solutions and security products that protect organizations from cyber-attacks

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4.8x

18.2x

EV

Sales

Corum Analysis

EV

EBITDA



last six months…



Since Q4 Jan. 2018


Deal Spotlight: Cloud Management / Migration

Sold to

Target: ATADATA [USA]

Acquirer: Deloitte Consulting [USA]

- Solutions for the discovery, cloning, and synchronization of data workloads

- Follows a trail of Deloitte’s cloud investments, including a buy of Day1 Solutions’

analytics and cognitive cloud assets

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4.8x

18.2x

EV

Sales

Corum Analysis

EV

EBITDA



last six months…



Since Q4 Jan. 2018

Deal Spotlight: Disaster Recovery

Target: N2W Software [USA]

Acquirer: Veeam Software [Switzerland]

Transaction Value: $42.5M

- Disaster recovery solutions for data in the public cloud

- Improves Veeam’s penetration into the enterprise

Sold to

30


4.8x

18.2x

EV

Sales

Corum Analysis

EV

EBITDA



last six months…



Since Q4 Jan. 2018

Deal Spotlights: Network Performance Management

Sold to

Sold to

Target: AppNeta [USA]

Acquirer: Rubicon Technology Partners [USA]

- SaaS application performance management solutions

Target: Avere Systems [USA]

Acquirer: Microsoft Corporation [USA]

- Computer data storage and data management infrastructure

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4.8x

18.2x

EV

Sales

Corum Analysis

EV

EBITDA



last six months…



Since Q4 Jan. 2018

Deal Spotlight: Mobile Network and IoT Security

Target: Argyle Data [USA]

Acquirer: Mavenir Systems [Siris Capital] [Canada]

- Machine learning-powered anomaly detection platform for mobile services and IoT

- Complements Mavenir’s cloud-native Security Suite

Sold to

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Corum Research Report

Elon Gasper

EVP, Research

Becky Hill

Analyst

Amber Stoner

Director of Research

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Corum Annual Research ReportPart II: Private Equity

34


Amanda joined Corum in 2012 as a marketing assistant and transferred to the research department in 2016 after

serving 2 years as the senior marketing coordinator. As Senior Analyst, she helps to develop exit strategies and

identify potential acquirers for Corum’s clients.

Prior to joining Corum, Amanda served as an intern at Calypso Medical Technologies (later acquired by Varian

Medical Systems) in Seattle. Amanda graduated Cum Laude from Gonzaga University with degrees in marketing and

finance.

Amanda Tallman

Senior Analyst

Corum Group Ltd.

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Private Equity Deal Volume 2017 vs. 2016

All Tech Deals

Tech Megadeals

20172016

36

Top Private Equity Acquirers – 2017

37


38


39

Platform vs. Bolt-On Acquisitions

40

Platform vs. Bolt-On Acquisitions

Sold to

Sold to

Target: Xactly Corporation [USA]

Acquirer: Vista Equity Partners [USA]

Transaction value: $564M

- Sales performance, analytics and planning SaaS

Target: AlignStar [USA]

Acquirer: Xactly Corporation [Vista Equity Partners] [USA]

- Territory resource management software

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2017 Mega Deals

$62B$2B

$1.0B

$18BIT SERVICES

HR BPO assets

Healthcare business

$1.3B

$2.6B

$2.0B

$1.6B

$2.0B

$1.0B

$2.8B

$4.3B

HORIZONTAL

$21B

$1.4B

$1.1B

$1.1B

$15B

INTERNET

$1.9B

$3.4B

$2.4B

$1.6B

$1.6B

$2.5B

$1.3B

INFRASTRUCTURE

$27B

$6.0B

$3.7B

$1.2B

$1.1B

$1.3B

$1.8B

$1.1B

$1.6B

$1.6B

$1.6B

$5.7B$5.3B

$10.4B

$1.7B

VERTICAL

$15.3B

$2.0B

$3.6B

$2.3B

$3.9B

$1.2B

$1.4B

$1.3B

$1.0B

$1.1B

$1.1B

$1.2B

$1.0B

$23B

$2.8B

$1.0B

CONSUMER

$1.9B

$2.4B

$1.6B

$1.6B

$3.4B

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2017 Mega Deals - PE Buyers

$62B$2B $18BIT SERVICES

HR BPO assets

$2.0B

$1.6B

$4.3B

HORIZONTAL

$21B

$1.4B

$1.1B

$15B

INTERNET

$1.9B

$1.6B

INFRASTRUCTURE

$27B

$1.2B

$1.3B

$1.1B

$1.6B

$1.6B

$5.3B

VERTICAL

$2.0B

$2.3B

$3.9B

$1.4B

CONSUMER

$3.4B

$2.8B

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HR BPO assets

$2.0B

$1.6B

$4.3B

HORIZONTAL

$21B

$1.4B

$1.1B

$15B

INTERNET

$1.9B

$1.6B

INFRASTRUCTURE

$27B

$1.2B

$1.3B

$1.1B

$1.6B

$1.6B

$5.3B

VERTICAL

$2.0B

$2.3B

$3.9B

$1.4B

CONSUMER

$3.4B

$2.8B

Target: Lexmark (Enterprise Software Business) [USA]

Acquirer: Thoma Bravo [USA]


- Spinout consisted of Kofax, ReadSoft and Perceptive Software

Sold to

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HR BPO assets

$2.0B

$1.6B

$4.3B

HORIZONTAL

$21B

$1.4B

$1.1B

$15B

INTERNET

$1.9B

$1.6B

INFRASTRUCTURE

$27B

$1.2B

$1.3B

$1.1B

$1.6B

$1.6B

$5.3B

VERTICAL

$2.0B

$2.3B

$3.9B

$1.4B

CONSUMER

$3.4B

$2.8B

Sold to

Target: IDERA [USA]

Acquirer: HGGC [USA]


- SQL Server administration, backup and recover, compliance

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36%

27%

16%

12%

7%

1%

Horizontal

Infrastructure

IT Services

Internet

Consumer


Deals bySector

Vertical

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36%

27%

16%

12%

7%

1%

Horizontal

Infrastructure

IT Services

Internet

Consumer

Deals bySector

Vertical


Sold to

Target: Propertybase [USA]

Acquirer: Boston Logic Technology Partners [USA]

- Salesforce automation and marketing automation SaaS for real estate

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36%

27%

16%

12%

7%

1%

Horizontal

Infrastructure

IT Services

Internet

Consumer

Deals bySector

Vertical


Vertical

Target: Abila [USA]

Acquirer: Community Brands [USA]

- Accounting and fundraising software and SaaS

Sold to

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Amanda joined Corum in 2012 as a marketing assistant and transferred to the research department in 2016 after

serving 2 years as the senior marketing coordinator. As Senior Analyst, she helps to develop exit strategies and

identify potential acquirers for Corum’s clients.

Prior to joining Corum, Amanda served as an intern at Calypso Medical Technologies (later acquired by Varian

Medical Systems) in Seattle. Amanda graduated Cum Laude from Gonzaga University with degrees in marketing and

finance.

Amanda Tallman

Senior Analyst

Corum Group Ltd.

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Timothy joined Corum in 2011, and oversees the company’s marketing efforts globally from the headquarters near

Seattle. Chief among these is Corum's extensive conference schedule, “Selling Up, Selling Out,” the Merge Briefing,

the Tech M&A Monthly webcast and Corum's platinum sponsorship of the World Financial Symposiums' live events

and Market Spotlight series. Through these events, Corum Group serves as the world’s leading educator in

technology mergers and acquisitions.

Prior to joining Corum, Timothy served as marketing and product manager for GIS software startup Depiction, Inc.,

and previously worked in marketing for VizX Labs, a pioneering SaaS startup delivering DNA analysis tools. In

addition to marketing for software startups, Tim has worked for a US Senate campaign and taught science in Rio de

Janeiro.

Timothy graduated Magna Cum Laude from Bethel University in St. Paul, Minnesota, with degrees in History and

Biology.

Panel Moderator

Timothy Goddard

EVP, Marketing

Corum Group Ltd.

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Michael Libert

TA Associates

Vice President

Sabrina Chiasson

Battery Ventures

Vice President

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Special Guest

Michael joined TA Associates in 2011 and operates from the firm’s Boston office where he leads investment opportunities around the world. He is an active investor in Nintex, Prometheus Group (acquired by Francisco Partners), Bomgar (acquired by Thoma Bravo), Answers (acquired by Apax Partners), and PDI. Michael has executed eight platform and add-on technology acquisitions.

Prior to TA Associates, Michael worked at Bain & Company where he focused on Private Equity and Technology clients.

Michael graduated Cum Laude from Harvard University in 2009 and obtained a MBA from Stanford in 2016.

Michael Libert

TA Associates

Vice President

52

Special Guest

Sabrina joined Battery in 2015. She focuses on later-stage software investments, including growth equity, buyouts, rollups, carve-outs and take-privates. Sabrina is currently involved with Battery’s investments in Alogent, Clubessential, Concurrent Real-Time and Enviance.

Before coming to Battery, Sabrina was an associate at H.I.G. Growth Partners, a private equity firm focused on recapitalizations of lower-middle market, growth oriented businesses. There, she sourced, evaluated and executed investments in the consumer, healthcare and technology sectors. She also previously spent time at Westwind Investors, a private investment firm focused on growth-equity investments and buyouts.

Sabrina received a B.A. in biology and economics from Dartmouth College. While at Dartmouth, Sabrina was captain of the varsity Alpine ski team.

Sabrina Chiasson

Battery Ventures

Vice President

53


Michael Libert

TA Associates

Vice President

Sabrina Chiasson

Battery Ventures

Vice President

54

Q&A

▪ We welcome your questions!

▪ Use Q&A chat box to the right of the screen

▪ Submit to queue at any time

55

Upcoming Conference ScheduleSelling Up Selling Out (SUSO) - Ready to go to market? During this half-day workshop, learn to prepare, position,

research, value, negotiate, and execute due diligence for maximum price and structure. This is the most attended Tech M&A

event ever – participants have done over $1 trillion in transaction value.

Merge Briefing (MB) - The Merge Briefing is a 90-minute executive briefing providing a current M&A market update (trends,

valuations, etc.), as well as a brief overview of the Tech M&A process: “8 Steps To An Optimal Outcome.”

www.CorumGroup.com/Events

Feb. 13: Paris – MB

Feb. 14: Amsterdam – MB

Feb. 15: Seattle – MB

Feb. 15: Barcelona – MB

Feb. 22: San Francisco –

Growth & Exit Strategies

Feb. 27: Brussels – MB

Feb. 27: Hartford – MB

Feb. 28: Victoria – MB

Feb. 28: Providence – MB

Feb. 28: Los Angeles – SUSO

Mar. 1: Boston – SUSO

Mar. 1: Los Angeles – MB

Mar. 1: Atlanta – MB

Mar. 6: Boise – SUSO

Mar. 6: Chicago – MB

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After the Deal – Celebration

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www.corumgroup.com

forecast 2018: part 2 - corum group · 2 a leader in the software industry, bruce has founded or...

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