ma flash report october 2009 final

8/8/2019 MA Flash Report October 2009 FINAL

1/38

USA Switzerland Germany France United Kingdom Canada Norway Brazil

www.corumgroup.com

MERGE WebinarMERGE Webinar Oct. 2009Oct. 2009Software and IT Industry Market Update:

Is an international buyer in your future?

Thursday, October 1, 200910:00 am PT


2/38

Corum Group Presentation 2

Mark ReedExecutive Vice PresidentCorum Group Ltd.

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

Miro ParizekManaging Director

Corum Group Ltd.

Bruce MilneCEO & ChairmanCorum Group Ltd.

Bruce Milne, the founder of Corum, is one of the true leaders in the software industry. He built the largest vertical market

software company in the world before founding Corum, where he has overseen more mergers than anyone in history,

generating over $6 Billion in wealth for the owners of privately held firms. Along the way, in addition to publishing

extensively, he has owned three other software companies (Rosesoft, Dataword, Insider Edition) and been a seed investor

in some of the leaders in our industry (Blue Coat, Bright Star, Sabaki). He founded the largest regional tech association

(Washington Software Association), and, as a recognized leader, has served on numerous advisory boards including

Comdex, DEC, Apple, IBM, and personally advised Bill Gates at Microsoft. He has been a tech cabinet advisor to two

Governors, a Congressman and U.S. Senator on issues related to the future of the software industry. Forhis expertise, he

was commissioned by the U.S. government to write the definitive high tech business guide for the SBA. The Canadian

Government had him conduct research which led to the establishment of SoftWorld, and he was recently voted one of the

most influential people in the European software community forhis work during the last market decline.

Dougan MilneResearch

Corum Group Ltd.


3/38


Agenda

Overview of Current Market

International Update

Market and Valuation Analysis

Closing Comments - Q&A


4/38


Recovery Is Now the Time?

Stocks Have Best Quarter Since 1998

IMF raises global 2010 growth forecast to 3.1% from 2.5%


5/38


Corum M&A Activity High

Six Companies Sold in Q3

Six More in LOI During Q3

Six More Weighing Offers

Recovery Is Now the Time?


6/38


U.S. Interest Rates Steady

Consumer Confidence Unexpectedly Drops

Pimcos Bill Gross Buying Treasuries Amid Deflation

Concerns

Unemployment Threatened Chronic Job Loss

Fed Rescue - $11.6 Trillion Bill!

U.S. Economy


7/38


Home Prices Climb Most Since 2005

Vacation Timeshares Plunge

Industrial Real Estate Wont Bottom Until 2010

Time to Drop $8000 1st Time Buyer Credit

U.S. Real Estate


8/38


International Economies

Trichet Says Too Early to Withdraw Stimulus

Spanish Inflation Rate Remains Negative

Pace of Eurozone Recovery Slows

Banks Call on Economists over Lending Drought

WB Pres: Global Economy Far From Secure


9/38


International Interest Rates

Russia Cuts Bank Rate by Half Point to Stimulate

Israel Springs Interest Rate Rise

Negative Interest Rates in Sweden

ECB Leaves Interest Rates at 1%

Brazil to Cut Interest Rate


10/38


Stock Markets

Stock Climb Continues Since March

Europe IPO Market Thawing From Deep Freeze

Global Rally Shows Signs of Running Out of Steam

U.S. Stocks Close Higher on M&A Boost


11/38


Mega Deals

Xerox ACS: $6.4b; 1.3x

Adobe Omniture: $1.8b; 5.2x

SilverLake Skype: $2b; 5.1x

Dell Perot Systems: $3.9b; 1.4x


12/38


Tech M&A

People are finally putting theirmoney where their mouth is.

- Thompson Phillips Jr.


13/38


Presenter

Miro Parizek, Managing DirectorCorum Group International - Zurich

University of Pennsylvania, Computer Science

Wharton School of Business

Software Industry since 1983

Founder of three software and IT service companies

Exited North American Software and MediaGold

12 years M&A Advisor with the Corum Group

Led on dozens of M&A transactions in virtually all

software and IT related sectors including Datacenter Infrastructure

Vertical software

Horizontal solutions

IT Services

Enterprise Appplications

Web Commerce


14/38


International M&A

Challenges

Cultural differences

Integration across borders

Establishing clear organization structures Fostering teamwork

Benefits

Economies of scale

Growth for top (and hopefully) bottomline Higher service levels for international customers

Access to rare domain expertise

Global leadership position


15/38


International versus Domestic

Source: Thomson Financial


16/38


European Public Markets


17/38


Equity Valuations Not in Bubble Territory

Source: Datastream


18/38


International Buyers of U.S. Companies

22%

19%

21%8%

19%

23% FRANCE

GERMANY

UK

NORDIC

BENELUX

OTHER

Source: 451 Group


19/38


Top Non-U.S. Buyers

Europe SAP - DE

Siemens - DE

Software AG - DE

Pearson - UK

Autonomy - UK

Sage - UK

Thomson Reuters - UK

Dassault - FR

Ubisoft - FR

Wolters Kluwer - NED

IT Services Bull - FR

Thales Group - FR

Cegedim - FR

Atos Origin - FR

Capgemini - FR

Steria - FR

Logica - UK

Computacenter - UK

Getronics - BE

Canada Research in Motion

OpenText

CGI

LAM Datasul SA - BR

BuscaPe.com - BR

Hildebrando SA - MX

Asia China Security

Kingdee International

CDC

TrendMicro

NTT

Fujitsu

Namco Bandai

NEC

Sony

India Wipro

TaTa

Infosys

Satyam


20/38


Related Cross-Border Transactions

Buyer U.S. Tar get Details

Skydata creates business mobile applicationsfor RIM, Windows and iPhone

Terms undisclosed

Provides Ticker data management forfinancial service companies

Terms undisclosed

Provides subscription-based automotiveGPS devices and software for consumers

Estimates $124m in cash

SaaS, enterprise manufacturing intelligencesoftware

Transaction valued at $3.2m


21/38


Lesser Known Non-U.S. Buyers

Australia Computershare Ltd - 7 deals; $4m - $120m

Canada Constellation Software 18 deals;

$1m - $25m

Softchoice Corp. - 3 deals; $3m - $50m

Tucows Inc. - 5 deals; $1m $20m

France ILOG Inc. - 2 deals; $2m - $15m

Ubisoft - 3 deals; $10m - $100m (est.)

Business Objects - 7 deals, $4m - $100m

India HCL Technologies 3 deals; $10m - $50m

3i Infotech 5 deals; $4m $80m

Israel Ness Technologies 3 deals; $10m - $80m

NICE Systems 5 deals; $10m - $300m

U.K. SDL International - 3 deals; $15 - $60m

Misys PLC 3 deals; $13m - $330m

Philippines IPVG Corp. 2 deals; $10m - $15m


22/38


Field Update

Bruce LazenbyRegional DirectorCanada

John MelotteRegional DirectorUnited Kingdom

Jerome FougeratRegional DirectorFrance


23/38


Dougan MilneInternational ResearchCorum Group Ltd.

Dougan is a Research Analyst who has worked for 3 years 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 PrivateWealth business unit. Before entering finance and investment banking, Dougan founded the

successful garment distribution business, Billions Apparel. Douganh

as a Bach

elors degreein Business Economics from the University of San Diego.


24/38


Public Markets

40.00

50.00

60.00

70.00

80.00

90.00

100.00

110.00

1

0.00

Jan-09 eb-09 ar-09

pr-09 ay-09 Jun-09 Jul-09

ug-09 Sep-09

Nasdaq S&P Tech ow


25/38


M&AActivity September

Number of Software and IT M&ATransactions

2004

2005

350

276

239

255

0 50 100 150 200 250 300 350 400

September

2009 2008 2007 2006 2005 2004


26/38


27/38


28/38


Public Valuations

Vertical Application Software Market

Deal Spotlight:

Sector: PublicTarget: FKI LogistexBuyer: Lyngsoe AS

Date: September 2009Transaction Value: n/a

Comments:

Gains libraries International expansion Domain expertise

Client base

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

EV/EBITDA 6.19 x 6.53 x 7.26 x 7.99 x 8.17 x 8.91 x 9.01 x 9.32 xEV/S 1.01 x 1.14 x 1.31 x 1.40 x 1.51 x 1.51 x 1.66 x 1.80 x

Vertical

Application

Software


29/38


Public Valuations

ConsumerApplication Software Market

Deal Spotlight:

Sector: Consumer FinanceTarget: MINT.comBuyer: Intuit

Date: September 2009Transaction Value: $170mStructure: Cash

Comments:

SaaS Connected services strategy

Evolving business model Consumer


EV/EBITDA 2.

0

2.

.

2.

.

.

.27

.

EV/S 0. 0. 0. 9 0. 0 0. 0. 0. 9 0.

C nsumer

Appli ati n

Soft are


30/38


Infrastructure Market

Public Valuations Deal Spotlight:

Sector: SecurityTarget: VericeptBuyer: TrustWave

Date: September 2009Transaction Value: $20mRevenue Multiples: 2.0xStructure: Stock (est.)

Comments:

Critical data classification

SaaS offering in the future


EV/EBITDA6.32 x 6.98 x 8.46 x 8.29 x 8.74 x 9.59 x 10.92 x 10.46 x

EV/S 1.31 x 1.43 x 1.55 x 1.52 x 1.72 x 1.95 x 2.02 x 2.14 x

Infrastructure

Software


31/38


Internet Market


Sector: e-CommerceTarget: BuscaPe.comBuyer: NaspersDate: September 2009Transaction Value: $342m

Comments:

Geographic expansion Dominant regional player Favorable demographicsFeb-0 ar-0 Apr-0 a -0 Jun-0 Jul-0 Aug-0 ep-0

! "

/! # $ % &

A 6.05x 7.54 x

.'

0 x( (

.7'

x( (

.' (

x( )

.) 0

x( )

.00

x(

5.'

0 x! " / 1

(.

)6 x

(.60 x

0.

( (x

0.

06 x

0.

)0 x

0.4

'x

0.60 x

0.70 x

n erne


32/38


IT Services Market


Sector: IT ServicesTarget: eVisoryBuyer: IQ Business Group

Date: September 2009Transaction Value: N/A

Comments:

Geographic expansion Cultural expansion Domain expertiseFe 2 3 09 Mar 3 09 4 5 r 3 09 May-09 J6 7 -09 J6 8 -09 4 ug-09 Se 5 -09

9 @

A

9 B C T D 4 5.2 E x 5.32x 5. E 6x 5.51x 5.24x 5.56x 5.6 E x 6.66x

9 @

A

S 0.55x 0.56x 0.60x 0.61x 0.63x 0.68x 0.68x 0. E 3x

T Serv ces


33/38


Transaction volumes back up!

Continue to see month on month increases in publicvaluations

Good valuations for strategic opportunities

Active buyer universe: Public, Private and PE

Private equity putting dollars to work: Buyout,

Roll-up, etc. Mega Deals are back.

Market and Valuation Summary


34/38

Corum Group Presentation 34London November 17


35/38


Partial SpeakerList

Frank Boenke

Wellington Partners

Bernard Dalle

Index Ventures

Andrew Tsao

Silicon Valley BankKristof de Spiegeleer

SUN (Q-Layer)

Pelle Hjortblad

ProjectPlace

Anil Hansjee

Google

Jenny Rosberg

NASDAQ

Mike Peplow

Banctec

Ashley Ward

European LeadershipProgramme

Gustavo Garcia

BuyVIP

November 17, London [email protected]


36/38


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

November 17, 2009 London

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


37/38


UpcomingCorum Events

October 5: Prague SUSO

October 6: Boston MB

October 8: Lyon MB

October 8: Washington DC MB

October 13: Scotland MB

October 13: Austin SUSO

October 14: Ireland MB

October 20: Stockholm MB/SUSO

October 22: Denmark MB/SUSO

October 22: Grenoble MB

October 23: Munich MB

October 27: Frankfurt MB

October 27: Dublin SUSO

November 3: HoustonSUSO

November 5: MERGE Webinar(Intl)

November 10: MERGE Webinar(France)

November 11: MERGE Webinar(DACH)

November 17: London WFS

November 18: Ft. Lauderdale

MB

November 19: Tampa MB

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


38/38


Contact Information

Research and Conferences:www.corumgroup.com

Corum Group Ltd.

Bruce Milne, CEO

Dougan Milne, [email protected]

10500 NE 8th Street, Suite 1500

Bellevue, WA 98004

USA

+1.425.455.8281

Corum Group International S..r.l.

Miro Parizek, Managing [email protected]

Beim Paradeplatz

Basteiplatz 7

8001 Zrich

Switzerland

+41.44.251.82 65

ma flash report october 2009 final

Documents