ma flash report december 2009 final

8/8/2019 MA Flash Report December 2009 FINAL

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USA Switzerland Germany France United Kingdom Canada Norway Brazil

www.corumgroup.com

M&A Flash ReportM&A Flash Report Dec. 2009Dec. 2009Software and IT Industry Market Update

Thursday, December 3, 200910:00 am PT


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Corum Group Presentation 2

Monthly M&A Flash Report

>> For todays presentation or more information, contact Pat Sultan([email protected], +1 425-455-8281 ext. 248)

Bruce MilneCEOCorum Group Ltd.

Bruce Milne, CEO and founder of Corum, has overseen more M&A transactions than anyone in the worldover the past 25 years, generating over $6 Billion in wealth for clients in 24 countries.

He has founded or owned four software companies, including AMI, the worlds largest vertical marketsoftware firm, and was a founding investor in some of the most innovative firms in their field, includingBlue Coat, Bright Star and Sabaki.

A recognized industry expert, he has served as a personal advisor to Bill Gates on operating systems,Apple on the development of the Mac, and as one of top 10 industry advisors to IBM. He has served onthe board of Washington Technology Center at the University of Washington, and is the founder of theWTIA, the nations leading regional technology trade association.

Outside the U.S. he worked with the Canadian government to f ound SoftWorld, and he was recentlychosen as one of the 200 most inf luential individuals in the IT community in Europe. He is also the only

juror from North America for the Tornado 100 Awards in Europes.

A Deans List graduate in International Business from the UW, and a graduate With Distinction fromHarvard Business School, Mr. Milne has written three book, including Power Planning, How To StructureYour Software Company For Success.

Dougan MilneDirector of ResearchCorum Group Ltd.

Mark ReedExecutive Vice PresidentCorum Group Ltd.

Tomoki YasudaAnalystCorum Group Ltd.


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Valuations Up Time to Sell?

AGENDA

Overview of Current Market

Market and Valuation Analysis Closing Comments - Q&A


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Asia - East

Dubai World restructuring $26 Billion in debt...nonebacked by Government

India Growth Shatters Forecasts Up 7.9%

Tokyo Moves To Break Deflationary Spiral

Wen Labels Renmindi Pressure Unfair

China Grows At A Faster Pace

Emergency Meeting As Yen Drops Most in 7 Months


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Europe Zone

EU Consumer Prices Up - First Time In 7 Months

British House Prices Climb For 4th Month

2010 U.K Recovery Prediction Too Optimistic

Eurozone Inflation Turns Positive

U.K. Business Numbers Up As Jobs Are Lost Necessity Entrepreneurs!

U.K. Write-Offs Hit Record

Eurozone Unemployment At 11 Yr. High


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Currencies

Swiss Franc Chosen Currency

Australia Raises Key Rates to 3.7%

Brazilian Real Best Performing Currency Canadas Currency Hits 18 Mo. High

Dollar Resumes Slide

Gold Soars Past $1200


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North America

U.S. Business Activity Accelerates in November

Canadas Recovers, but less than expected

0.4%Chip Sales Rise 5.1% in October

Job Cuts Loom As Construction Stimulus Fades

Steelmakers Downsizing Once Again

U.S. Manufacturing Expands 4th Month

ADP Job Losses Exceed Expectations Fed Sees Subdued Economic Rebound


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Housing

Lenders Face Sanctions For Failed LoanModifications 650,000 Trial Revisions NotConverted

Wealthy Investors Raise Real EstateHoldings

Home Sales Unexpectedly Climb 3.7%

U.S. Commercial Mortgage Default 3.4% -16 Yr. High


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Retail

Cyber Monday Online Retail Sales Increase16%

More Shoppers Hit Stores, Spend LessEach...Favor Low Price Items

Holiday Shopping Losing Meaning as U.S.Economic Barometer


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Valuations Are UP Why?

Buoyant Financial Markets

Pent up buyer demand

Currency fluctuations Dollar on sale! PE buyers are back

Cash available


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Rise in Valuations Fuel Sales

Divestitures are up

Venture Capitalists are moving portfolio

Sellers are responding to buyer overtures Mega Deals are being done

Even smaller transactions are happening


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Recent Transactions Closed


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Recent Transactions Closed


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Current Offers

Network management solutions

Vertical market- Wholesale Distribution

Application development tools Enterprise Content Management

CRM

Vertical market Insurance

Enterprise Application Integration


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Tomoki is currently an analyst working at Corums headquarters in Bellevue, WA. At Corum,Tomoki is responsible for conducting research and market analysis on companies,economy, and valuations. He is a contributor to the Merger and Acquisitions Quarterly andhas been responsible for updating the internal processes for Corum.

Tomoki YasudaAnalyst

Corum Group Ltd.

Market Valuation Analysis


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Public Markets

40.00

50.00

60.00

70.00

80.00

90.00

100.00

110.00

120.00

Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09

Nasdaq S&P Tech Dow


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M&A Activity November

Number of Software and IT M&A Transactions

2004

2005

319

247

23 3

26 7

0 50 100 150 200 250 300 350

November

2009 2008 2007 2006 2005 2004


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Horizontal Application Software Market

Public Valuations Deal Spotlight:

Sector: SCMTarget: i2 Technologies, Inc.Buyer: JDA Software Group, Inc.Date: November 2009

Transaction Value: $556.1 millionTransaction Multiple: 1.7xStructure: Cash & Stock

Comments:

Formerly stalled deal Strengthening key verticals Expanded product portfolio

Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug -09 Sep-09 Oc

-09 Nov-09

EV/EBITDA 6.82 x 9.23 x 9.39 x 9.99 x 11.06 x 11.06 x 12.67 x 12.26 x 11.66 x

EV/S 1.12 x 1.16 x 1.35 x 1.50 x 1.58 x 1.93 x 2.41 x 2.21 x 2.29 x

Horizontal

Application

Software


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Public Valuations

Vertical Application Software Market

Deal Spotlight:

Sector: HealthcareTarget: IMS Health, Inc.Buyer: TPG Capital/CPPInvestment Board

Date: November 2009Transaction Value: $5.2 billionTransaction Multiple: 2.4xStructure: Cash

Comments:

Healthcare vertical Positioned for long-term growth

Private equity megadealMar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09

-09EV/EBITDA

.53 x 7.2 x 7.99 x 8.17 x 8.91 x 9.01 x 9.32 x 8.42 x 8.9 x

EV/S 1.14 x 1.31 x 1.40 x 1.51 x 1.51 x 1.

x 1.80 x 1.57 x 1.82 x

Vertical

Applicati n

Soft

are


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Public Valuations

Consumer Application Software Market

Deal Spotlight:

Sector: GamingTarget: Playfish, Ltd.Buyer: Electronic Arts, Inc.Date: November 2009

Transaction Value: $275 millionTransaction Multiple: 5.5xStructure: Cash w/additional earn-out of up to $100m through 2011.

Comments:

Change in gaming dynamic Social gaming going mainstream

Client baseMar-09 A r-09 May-09

-09

l-09 A -09 e -09 Oc -09 v-09

E

E TDA 2 74 ! 3 81 ! 2 83 ! 4 47 ! 4 57 ! 4 27 ! 5 88 ! 5 23 ! 5 71 !

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Infrastructure Market


Sector: SecurityTarget: Guardium, Inc.Buyer: IBM CorporationDate: November 2009

Transaction Value: $232 millionTransaction Multiple: 6.1xStructure: Cash

Comments:

Latest in a string of acquisitionsby IBM Focus on application

infrastructure security Streamline compliance

Mar-09 A) r-09 Ma0

-091

2 n-091

2 3 -09 A2 g-09 Se ) -09 4 5 t-09 N 67

-09

E8

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E@ ITDAA .98 x 8.4 A x 8.29x 8.74x 9.59x 10.92x 10.4 A x 10.81x 9.7 A x

EBC

S 1.43x 1.55x 1.52x 1.72x 1.95x 2.02x 2.14x 2.20x 2.27x

Infrastructure

S D ftware


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Internet Market


Sector: Mobile AdvertisingTarget:AdMob, Inc.Buyer: Google, Inc.Date: November 2009

Transaction Value: $750 millionTransaction Multiple: 37.5xStructure: Stock

Comments:

Strengthening Googles presencein the mobile Interactive marketing abilities

Technology and TalentMar-09 AE

r-09 May-09

F

un-09

F

ul-09 Aug-09 SeE

-09 Oct-09G

ov-09H I

P

H Q IR

DA 7.54 x 9.80 x 11.78 x 11.81 x 13.32 x 13.02 x 15.80 x 11.81 x 13.03 x

EV/S 1.60 x 2.11 x 2.26 x 2.30 x 2.48 x 2.60 x 2.70 x 2.19 x 2.45 x

Internet


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IT Services Market


Sector: IT ServicesTarget: CFC Information SystemesBuyer:Adesso AGDate: November 2009

Transaction Value: N/A

Comments:

Geographic expansion Domain expertise

MaS T U V Ap S T U V May-09 Jun-09 Ju l-09 Aug-09 Sep-09 Oct-09 Nov-09

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IT Sesvices


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Dougan is the head of Corums research team serving as the Director of Research. Duringhis time with Corum, Dougan spent three years working with Corum's international groupheadquartered in Zrich, Switzerland. Prior to joining Corum's team in 2005, Dougan spentthree years working in the banking industry with Bank of America, and Citigroup's Private

Wealth business unit. Before entering finance and investment banking, Dougan founded thesuccessful garment distribution business, Billions Apparel and the advertising firm, ModoMarketing. Dougan has a Bachelors degree in Business Economics from the University ofSan Diego.

Dougan MilneDirector of ResearchCorum Group Ltd.

Market Valuation Analysis


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Unique Opportunity

Mega Deals

Divestitures Private Equity Buyers

Venture Portfolio Exits

Re-Valuations


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Private Equity Buyers

Hellman Friedman Web Reservations

Vista Partners Intuit (property management)

Reitan & Co. Basefarm AS Pharos Capital Rush Tracking

Bain Capital BellSystems 24

Hellman Friedman Datatel

Carlyle Group OpenLink Financial


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Venture Portfolio Exits

IBM Guardium Cisco, Cedar, Ascent, Veritas, etc.

Adconion Media

Joost (assets)

Index, Sequoia, CBS, etc.

Google Teracent KPG, New Enterprise, etc.

American Express Revolution Money Goldman Sachs, CitiGroup, Case, etc.


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Re-Valuations

Cisco Tandberg Announced $3b

Close $3.4b

HP 3com Announced $2.7b

Close. ?

The Good Higher multiples, trickle-down effect

The Bad Greedy sellers stall recovery


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Nat BurgessExecutive Vice PresidentCorum Group Ltd.

Nat joined Corum in 1996 and brings a diverse background in technology M&A and law. While with the Enforcement Division of

the U.S. Securities and Exchange Commission, Nat helped identify and build cases against securities fraud schemes. With the

Strategic Development Division of Morgan Stanley's M&A group, Nat worked on cross-border acquisitions of U.S. and European

companies by Japanese firms, and on f inancings by large Japanese public companies. Nat moved to Morgan Stanley's Tokyo

office, where he reported directly to the President of Morgan Stanley, Japan Ltd. and focused exclusively on cross-border M&A.

After Morgan Stanley, Nat co-founded Postcard Software, a creator of advertiser-driven bilingual (English and Japanese) Internet

content. At Activision, Nat lead the company's on-line business development.

Nat earned an undergraduate degree in Japanese literature from Yale College and a law degree from UCLA. While in law school,

Nat wrote articles for the International Forum at Yale, Tokyo Journal. Nat is frequently quoted in industry publications, a highly

sought speaker at industry conferences, and Chairman of the World Financial Symposiums.

ChairmanWorld Financial Symposiums

World Financial Symposiums


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Corum Group Presentation 33London November 17


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Partial Speaker List

David Virnelli

IBMJeff Brennan

Pitney BowesJeffHoffmeister

Morgan Stanley NY

Arun Prakash

Virgo CapitalRyan Ziegler

Edison VenturesPeterCoffee

Salesforce.comGreg Osinoff

RenewData

December 15, New [email protected]


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www.worldfinancialsymposiums.com

Growth and Exit Strategies

Staging for Recovery

The Future of M&A, VC, Private Equity and Public Offerings in the NewTech Landscape

December 15, 2009 New York

Attend this conference to learn about:

Raising capital in the current environment

The new rules of global tech M&A

The role of private equity in a credit-starved market

The IPO window

Creative transaction structures

Finding value and opportunity in the cloud

Acquisition multiples, VC tactics and more


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Upcoming Corum Events

December 3: Flash Webinar (Intl)

December 8: London SUSO

December 10: Flash Webinar(Nordic)

December 15: New York City WFS

January 7: Flash Webinar (Intl)

January 12: Toronto MB & SUSO

January 14: Flash Webinar(France)

January 14: Ottawa MB

January 15: Montreal MB

January 19: Calgary MB

Merge Briefing (MB)Selling Up Selling Out (SUSO)World Financial Symposium (WFS)

January 21: Flash Webinar (Nordic)

January 25-27:Miami Progress Conference

January 28: Flash Webinar(DACH)

February 4: Flash Webinar (Intl)

February 16: Dallas MB

February 18: Bellevue SUSO

March 2: Houston MB

March 4: Flash Webinar (Intl)

March 28: Oslo SUSO

March 21: San Francisco MB


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Contact Information

Research and Conferences:www.corumgroup.com

Corum Group Ltd.

Bruce Milne, [email protected]

Dougan Milne, Director of Research

[email protected]

10500 NE 8th Street, Suite 1500

Bellevue, WA 98004

USA

+1 425-455-8281

Corum Group International S..r.l.

Beim Paradeplatz

Basteiplatz 7

8001 Zrich

Switzerland

+41 44 251 82 65

ma flash report december 2009 final

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