5/27/2018 Private Tech Company M&a Report - CB Insights

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2277 Private Tech Companies Acquired in 2012In deals with disclosed valuations, $46.8B was paid for private tech companies. 30%deals account for 80% of that value. Eight private companies purchased for more tha$1 billion in 2012 with 6 being US-based. The year saw 190 M&A transactions permonth on average.

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Tech Companies Go It AloneIn a big surprise, 76% of tech companies acquired in 2012had not raised institutional investment prior to acquisition.While there were no bootstrapped or only angel-fundedbillion dollar exits, it is clear that there are a lot of techcompanies being formed who are able to grow byreinvesting their own profits or via angel financing.

Google and Facebook Most Active Acquirers

The two tech juggernauts did 12 private tech company

acquisitions in 2012. Five of Facebooks acquisitions weretalent acquisitions . Google and Cisco were most frequentdisclosers of private company valuations . Avnet was thesurprise in the top 10 most active acquirers with a string ofsmall, mostly tuck-in acquisitions.

50% of Exits are Less than $50 Million

While there is much fanfare when the billion dollar exitshappen, they represent 2.5% of all private tech companyacquisitions in 2012 (translation: they dont happen often).

More than 50% of deals are less than $50M and more

than 80% of the acquisitions are less than $200M.

Getting Strategic

94% of acquisitions were made by strategic buyers.Financial sponsors comprise a small 6% of deal volume.

The West Side is the Best Side

California saw the most private tech companies acqin 2012 which should not be all that surprising givena majority of tech investment (both deals and dollarsgoes to Cali. However, the dominance of Cali wassomething to behold as the state had more private tecompanies acquired in 2012 than the next five statescombined.

Massachusetts Not a Top 3 Destination for Acquire

Mass remains a top market for tech VC despite losinsome of its mojo to NY which has usurped the #2 spOn the M&A front, Mass was somewhat surprisingly the top 3 for private tech company acquisitions in 20it got edged out narrowly by Texas for the #3 spot.

India Crashes the International League TablesThe UK led international markets with the most privatech company acquisitions in 2012 followed by Canawhich has a lot of momentum as of late on both thefinancing and exit front. Rounding out the top 3 mark

globally was India suggesting that the entrepreneuriatech community is becoming more established.

Odd Man Out

49 of 50 states saw at least one acquisition. Guess wdidnt. It rhymes with Mouth Nakota.

This is the first report to look exclusively at the acquisitions of private tech companies. Yes, public tech companyacquisitions are excluded. Why?

Inclusion of public company acquisitions skews the dataA few public mega deals (or lack thereof) gives a p

of the tech M&A landscape which is far from representative.

For investors, this is your futureFor angels, VC, growth equity and private equity investors, these are thecomparable transactions and trends that youll need to know about as you think about your own portfolio

For corporates, this is where innovation is happeningFor corporate acquirers and innovation/strategy teamsprivate tech company M&A has often become a way to spur innovation in the parent organization. And so private tcompany M&A offers a glimpse into the industry, size of deal and geographic trends worth knowing about.

Whats Included? The only deals included in this report are acquisitions of private tech companies by strategic buyersfinancial sponsors (private equity). While we track take-private transactions (LBOs) where a public company is takenprivate, those are not included in this report.

5/27/2018 Private Tech Company M&a Report - CB Insights

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2277 Private Tech Companies Were Acquired in 2012The year began strong but saw quarterly activity drop on a sequential basis. 94% ocompanies were acquired by strategic acquirers with the remaining 6% taken out byprivate equity firms.

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331 Private Tech Companies Acquired for $46.8BFor transactions with disclosed valuations, 30% of acquisitions account for 80% of ttotal value of deals.

5/27/2018 Private Tech Company M&a Report - CB Insights

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Eight Private Tech Companies Acquired for $1B+Over 50% of acquisitions are less than $50M showing how elusive the billion dollaracquisitions are. Of the 8 billion dollar plus tech acquisitions, 7 were acquisitions bstrategics highlighting the strong cash positions of many of techs largest companie

Two of the eight billion dollar private tech exits were outside the US.

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Only 24% of Companies Raised Funding Prior to ExitThe vast majority of tech companies acquired did not raise outside institutionalcapital. Suggesting that many tech firms who reach exit are able to do so on the baof financing from angels or by funding themselves out ofprofits.

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Facebook & Google Most Active Private Company AcquireGoogle and Cisco most often disclose the valuations of private tech companies theacquire. Of 12 Facebook acquisitions, 5 were talent acquisitions and 10 of 12 wereCalifornia. Avnet surprises with its entry into the top 10.

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Medians: $16.6M RaisedAcquired for $73.5MThe distribution of private tech company acquisitions shows a great deal of variabilithe amount of money raised and the valuation received. On average, companies ra$25.4M and were acquired for an average of $172.0M.Note: Medians are a better measure

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Web & Mobile Commerce Sees Most Acquisition ActivityeCommerce/mCommerce see the highest level of acquisition activity followed by adrelated businesses. Fifteen different industries saw more than 30 acquisitions showthe diversity of tech sub-areas seeing activity.

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State Acquisitions (2012) State Acquisitions (2012)

Washington 50 Indiana 10

Colorado 45 South Carolina 7

Florida 43 Alabama 7

New Jersey 41 DC 7

Pennsylvania 39 Vermont 5

Virginia 36 Maine 5

Georgia 34 Louisiana 4

Ohio 34 Idaho 4

Oregon 29 Iowa 4

Arizona 27 Montana 4

Minnesota 24 Hawaii 3

Utah 20 Oklahoma 3

Maryland 19 Wyoming 3

North Carolina 18 Rhode Island 3

Michigan 15 New Mexico 3

Connecticut 14 Kentucky 3

Kansas 11 Nebraska 3

Missouri 11 Delaware 2

Tennessee 11 North Dakota 1

Nevada 11 Alaska 1

Wisconsin 10 Arkansas 1

New Hampshire 10 Mississippi 1

Cali Sees More Acquisitions Than Next 5 Markets Combin49 of 50 states see at least 1 private tech company acquired in 2012. South Dakotonly state that didnt see any. NYs tech scene which has seen a VC resurgence

moving it to #2 in the rankings for financing also comes in at #2 for private techcompany M&A. Of the largest 20 acquisitions in 2012, 10 were in the US and of thowere in California.

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Finance Capital, NY, Sees Fewest Private Equity AcquisitiIllinois has highest percentage of tech acquisitions by private equity firms but none the top 5 states has more than 10% of acquisitions by financial sponsors.

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NY Sees Highest Share of Internet AcquisitionsTexas and Illinois see highest portion of deals to computer hardware. Overall, Texasmost diversified across tech sectors.

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International Activity Led by UK; India Cracks Top 5Three European countries make up the top 5. Canada which has a resurgent VCindustry is also seeing healthy tech M&A activity. India is sole emerging economy tocrack the top 5 with 53 private tech companies from the country acquired in 2012.

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PE Purchases of Intl Tech Companies Less FrequentOf the top 5 Intl countries, Germany sees the most love from PE firms as they mak

10% of acquisitions. India see the least, at only 2%. Overall, private equity acquisitiof international tech companies were slightly less frequent than what was seen in Utech company acquisitions.

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India Leads in Share of Internet & Mobile DealsFrance and Canada see highest share of non-internet/mobile software companies bacquired. Germany leads in share of semiconductor/chip M&A transactions. Of theinternational deals with disclosed valuations, 3 of the 5 biggest deals were in non-internet/mobile software.