technology, media & telecom - harris williams...technology, media & telecom infrastructure...

Technology, Media & TelecomINFRASTRUCTURE SOFTWARE SECTOR REVIEW | Q3 2018

Investment banking services are provided by Harris Williams LLC and Solebury Capital LLC, registered broker-dealers and members of FINRA and SIPC, and Harris Williams Ltd, which is private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 07078852). Harris Williams Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams is a trade name under which Harris Williams LLC and Harris Williams Ltd conduct business.

T E C H N O L O G Y , M E D I A & T E L E C O M PAGE | 1

INFRASTRUCTURE SOFTWARE SECTOR REVIEW | Q3 2018

HW Infrastructure Software Introduction

O B S E R V A T I O N S O N K E Y I N F R A S T R U C T U R E S O F T W A R E T R E N D S 1 , 2 , 3 , 4

• Led by big moves from strategic buyers, including Microsoft, IBM, and Salesforce, year to date 2018 has been an active period for infrastructure software with over 200 transactions in Q3 2018 alone

• The public markets have also continued to be favorable, with nearly 25 initial public offerings in the last 24 months

• Software targeted at teams – developers, marketers, and professional services – that are lightweight, easy to use, and can be purchased and deployed over the web are witnessing increased demand and bypassing the traditional IT and enterprise buying processes

• Security remains top of mind for both large and small organizations as large scale cloud adoption leaves them with connected devices and increased exposure to threats

• While industrial tech and infrastructure tech companies continue to make separate investments in their IoT platforms, this area will come increasingly into focus with resulting partnerships and M&A, especially as billions of intelligent devices are connected to the cloud, and organizations look for platforms that can turn these massive amounts of data into real-time business value

H A R R I S W I L L I A M S ( “ H W ” ) A S A F I R MT E C H N O L O G Y , M E D I A & T E L E C O M ( “ T M T ” ) G R O U P

• Founded in 1991

• 300+ professionals across eight offices globally

• 140+ closed transactions in the last 24 months

• 20th record year in 2017

• 10 industry groups

• 35 professionals across Boston, San Francisco, and London

• 47 closed transactions in the last 24 months

TMT Vertical Focus Areas

• Education Technology• Fintech• Healthcare IT• Human Capital Management• Internet and Digital Media• Manufacturing Technology

• Membership Management• Public Sector Software• Supply Chain, Transportation

and Logistics• Infrastructure and Security

Software

Mike WilkinsManaging Director

[email protected]: (415) 217-3411

Sam HendlerManaging Director


Thierry MonjauzeManaging Director

[email protected]: +44 (0) 20 7518 8901

Tyler DewingManaging Director


Julien OussadonDirector

[email protected]: +44 (0)20 7518 8909

Erik SzyndlarDirector


Jeff BistrongManaging Director


2017

2017

Software / SaaS

• Enterprise Software• Data and Analytics• Data Center and Managed

Services• IT and Tech-Enabled Services

Internet and Digital Media

• Consumer Internet• Digital Media and Content• eCommerce and Retail• Mobile• Online Marketing

Priyanka NaithaniVice President


mailto:[email protected]










Infrastructure Software Taxonomy

Select Market Participants Select Market Participants Select Market Participants

SOFTWARE DEVELOPMENT / DEVOPS IT OPERATIONS MANAGEMENT SECURITY

Solutions that enable the software development lifecycle,

including planning, creating, testing, and deploying software

applications and systems

Solutions that protect software and systems against malicious attacks, unauthorized access and resource use, and other

external and internal risks

Solutions that help to manage the provisioning, capacity,

performance, and availability of an organization's IT

infrastructure

Application Lifecycle

Management

Continuous Integration / Continuous Delivery

Version Management

Infrastructure / App / Database

Performance Monitoring

IT GRC and Asset

Management

Service and Support

Management

Identity and Access

Management

SIEM / Security Analysis

Test Management

Operations Analytics

Network / App / Data Security

Advanced Threat Protection

Select Market Participants Select Market Participants

DATA MANAGEMENT CLOUD MANAGED SERVICES

Solutions that integrate, cleanse, migrate, and manage

data across platforms to produce accurate and consistent information

Solutions that manage cloud security, computing, storage,

network operations, and application stacks to automate

and enhance business operations

Data IntegrationData Quality and

GovernanceDatabase

ManagementPaaS / aPaaS /

iPaaSData

AnalyticsManaged Hosting and Applications

Managed Security

Backup and Disaster Recovery

Select Market Participants

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



Select Infrastructure Software M&A Transactions1,2

Thoma Bravo’s acquisition of Centrify

• Centrify provides identity and access management (“IAM”) software solutions to over 5,000 organization worldwide, including more than 50% of the Fortune 50.

• The Company’s solutions include privileged access management (“PAM”) where the client base is majority larger enterprises andIdentity as a Service (“IDaaS”) solutions where client base is largely small to midsize enterprises. 50% of sales are direct.

• Thoma Bravo has been a long time investor in cybersecurity companies, including Sailpoint and Bomgar in the IAM segment. Since the acquisition the Company has been split into two separate businesses – Centrify focused on privileged access management, and Idaptive focused on Identity as a Service.

Microsoft’s acquisition of GitHub

• GitHub is a source code management platform based on the open source Git distributed version control system. The company enables the hosting of open-source projects while providing paid support for private code repositories.

• The Company’s solutions provide code review, project management, documentation, and code hosting along with many other developer collaboration features. Over 30 million developers utilize the platform including a large portion of the open source community.

• Microsoft paid a significant premium to for access to a large and loyal developer ecosystem which over time will provide a strong base for cross sell (especially Azure). Similar to LinkedIn, Microsoft plans to run GitHub independently.

Closed October 26, 2018

Enterprise Value: $7,500M

Rev: NA EV / EBITDA: NA

EV / Rev: NA

Siemens’ acquisition of mendix

• mendix is a low-code application development environment that empowers business users to build web and mobile applications using visual modeling tools and high level code constructs. It allows business users to tap into existing disparate applications, databases, and reusable components/templates to quickly and easily create rich and more relevant applications.

• The acquisition is highly complementary to Siemens’ Mindsphere IoT platform which is enabling business users to create rich apps that tap into the physical infrastructure of their products, plants, systems, and machines.

• The acquisition will allow Siemens to combine mendix’s leadership in low code development, providing rich user experience and digital connectivity, with Mindsphere’s wealth of IoT data and physical infrastructure connectivity.

Closed October 1, 2018

Enterprise Value: $730M

Rev: NA EV / EBITDA: NA

EV / Rev: NA

EQT’s pending acquisition of SUSE

• SUSE provides enterprise-grade open source solutions including Linux enterprise server, Open Stack cloud technology, and software defined storage, for managing on-premise and cloud workloads.

• The Company’s main product is SUSE Linux Enterprise server - an enterprise-grade supported version of open source Linux, that competes directly with and occupies the #2 position behind Red Hat Enterprise Linux in the paid Linux market.

• For EQT, SUSE provides a compelling thesis around open source and cloud, as Linux increasingly becomes the OS of choice across public and private clouds as a result of better performance, lower TCO and ability to use commodity hardware, and reduced vendor lock-in across paid and unpaid versions, as well as an increased uptake of OpenStack-based infrastructure.

Broadcom’s acquisition of CA

• CA provides a diversified portfolio of IT management and application development solutions across mainframe, cloud, mobile and distributed environments.

• The Company’s Mainframe solutions comprise more than 50% of revenue and it is a leader in the space (only behind IBM) with nearly 90% of the Fortune 500 as customers.

• The acquisition will provide Broadcom with significant customer and product diversification, and cross sell through access to larger enterprise data centers where CA’s mainframe solutions are deeply embedded and mission critical. Broadcom has since sold Veracode, the application security company acquired by CA in March 2017, whose customer base is largely midsize enterprises.

Closed November 5, 2018


Rev: $4,148M EV / EBITDA: 14.3X

EV / Rev: 4.6X

Announced July 2, 2018


Rev: $366M EV / EBITDA: 22.7X

EV / Rev: 6.9X

Note: Announced or Closed in Q3 2018.

EV / EBITDA: NA

EV / Rev: NA

Closed August 15, 2018

Enterprise Value: NA

Rev: NA



IDENTITY AND ACCESS MANAGEMENT (“IAM”)


Market Observations

Recent Transactions

• IAM is a $5 – 10 billion market across Identity as a Service (“IDaaS”), Privileged Access Management (“PAM”) and Identity Governance and Administration (“IGA)”)

• Majority of the IDaaS activity is being driven by the need to manage user access across multiple cloud and mobile applications and shift to the cloud

• A number of public security breaches have increased the focus on PAM and the need for better monitoring and auditing of privileged user accounts, including administrators, vendors, etc.

• IGA solutions are more complex to implement since they require modelling policies, workflows, and reporting, and are taking longer to move to a service model

October 4, 2018

August 15, 2018

Select Sector Spotlight3,4

TEST AUTOMATION AND MANAGEMENT VERSION MANAGEMENT

Market Observations Market Observations

• Testing remains one of the few areas within the Software Development Lifecycle (“SDLC”) that is largely manual, with opportunity for technology disruption

• As cloud, mobile, IoT, web services/API, and low code/business user development models proliferate, the need for testing solutions that capture these “omni-channels” continues to evolve

• The testing market is over $30 billion (including manual) and the current test automation market is about $2 billion

• Version management software acts as the code repository on software development projects, and enables collaboration across developers

• It is one of the few tools that provides an opportunity for a platform play besides Application Lifecycle Management (“ALM”) and Project Portfolio Management (“PPM”) tools

• Cloud-based, developer centric, team-based software tools are experiencing significant demand as they allow developers to bypass the traditional enterprise buying processes


Recent Transactions


Recent Transactions

Pending

October 1, 2018

October 31, 2018

October 25, 2018

January 1, 2017



7/28/16 9/22/16 9/29/16 3/24/17 4/6/17 4/27/17 5/25/17 10/18/17 11/17/17 3/15/18 3/22/18 4/20/18 4/27/18 5/4/18 5/10/18 5/16/18 6/28/18 7/26/18 7/26/18

$18.0 $16.0 $16.0 $14.0 $17.0 $15.0 $12.0 $24.0 $12.0 $16.0 $21.0 $15.0 $15.0 $19.0 $3.4 $15.0 $21.0 $20.0 $23.0

$503.5 $96.0 $237.9 $126.0 $187.0 $1,921.0 $75.0 $223.8 $1,026.6 $1,877.3 $911.4 $1,122.3 $174.5 $1,250.7 $3,207.8 $897.2 $455.5 $220.9 $2,094.8

$94.5 $96.0 $237.9 $126.0 $187.0 $225.0 $75.0 $192.0 $240.0 $192.0 $756.0 $555.0 $174.5 $152.0 $812.5 $310.5 $193.2 $126.8 $250.7

287.4% 131.0% 77.8% 308.6% 313.9% 17.7% 175.8% 239.8% 183.5% 154.9% 27.8% 30.5% 108.4% 11.5% 9.8% 113.3% 2.1% 42.7% 69.0%

(100.0%)

(50.0%)

0.0%

50.0%

100.0%

150.0%

Key Performance Metrics for Recent Infrastructure Software IPOs1

IPO DATE

OFFER PRICE PER

SHARE

OFFERING SIZE

($M)

OFFER TO CURRENT

MARKET CAP AT

OFFER ($M)

% R

even

ue G

row

thSt

ock

Per

form

ance

(O

ffer

to

Cur

rent

)

(150.0%)

(100.0%)

(50.0%)

0.0%

50.0%

100.0%

150.0%

200.0%

250.0%

300.0%287.4%

131.0%

77.8%

308.6% 313.9%

17.7%

175.8%

239.8%

183.5%

154.9%

27.8% 30.5%

108.4%

11.5% 9.8%

113.3%

2.1%

42.7%

69.0%

Circle Size Denotes Revenue ($)

43.2%

20.5%

84.3%

(64.5%)

86.6%

57.2%

9.1%

52.5%

70.6%

53.5% 31.0%

22.4%

66.1%

36.5%

91.6%

30.1%

55.9% 44.9% 46.1%



Median $6,870 $6,304 92.0% 50.4% 89.1% 38.3% 26.4% 27.5% 8.3x 6.5x 5.6x 16.0x 46.4x

Infrastructure Software – Trading Comparables MetricsVALUATION1

As of September 30, 2018 ($ in millions)

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

Enterprise Market % of 52 1-Year Stock 3-Year Stock Revenue Growth LTM EBITDA Enterprise Value / Price / Company Ticker Value ($mm) Cap ($mm) Week High Performance Performance LTM NTM Margin LTM Rev. 2018E Rev. 2019E Rev. LTM EBITDA Earnings

Microsoft MSFT-US $833,221 $878,077 99.2% 53.5% 156.4% 22.8% 9.9% 41.3% 7.3x 6.4x 5.8x 17.6x 46.7x

Cisco Systems CSCO-US 216,482 222,395 99.2% 44.7% 89.1% 2.8% 5.1% 30.2% 4.4x 4.1x 4.0x 14.5x NM

Oracle ORCL-US 204,720 195,307 96.4% 6.6% 42.3% 4.0% 1.6% 42.8% 5.1x 5.0x 4.9x 12.0x 50.3x

IBM IBM-US 170,779 138,020 88.4% 4.2% 5.3% 2.6% (0.2%) 20.9% 2.1x 2.1x 2.1x 10.2x 24.1x

SAP SAP-DE 151,024 151,252 96.6% 12.4% 92.4% 11.2% 5.7% 27.3% 5.3x 4.9x 4.5x 19.3x 30.3x

Red Hat RHT-US 24,224 24,173 76.7% 22.9% 86.2% 19.4% 16.2% 19.1% 7.7x 6.4x 5.6x 40.2x 83.7x

Micro Focus MCRO-GB 9,874 8,023 46.4% (41.8%) 0.6% 45.7% 84.3% 44.5% 5.1x 2.8x 3.0x 11.5x 46.2x

Software AG SOW-DE 3,268 3,374 74.9% (6.6%) 54.8% 7.2% 0.8% 30.8% 3.2x 3.1x 3.0x 10.3x 18.8x

Median $160,902 $144,636 92.4% 9.5% 70.5% 9.2% 5.4% 30.5% 5.1x 4.5x 4.3x 13.3x 46.2x

ServiceNow NOW-US $36,787 $34,803 94.8% 66.5% 173.3% 37.7% 29.6% 3.4% 15.1x 11.0x 8.6x NM NM

Atlassian TEAM-US 10,209 10,210 99.1% 173.5% NA 40.0% 30.0% 4.7% 10.8x 7.8x 6.2x NM NM

Zendesk ZEN-US 7,537 7,523 98.3% 143.9% 252.9% 39.0% 30.6% NM 13.7x 9.9x 7.6x NM NM

Okta OKTA-US 7,235 6,835 93.2% 149.4% NA 58.1% 39.9% NM 22.3x 14.9x 11.6x NM NM

Nutanix NTNX-US 6,505 5,773 65.9% 90.8% NA 50.7% 24.4% NM 5.6x 4.2x 3.2x NM NM

Proofpoint PFPT-US 5,358 5,452 81.6% 21.9% 75.0% 39.3% 28.4% NM 8.1x 5.9x 4.7x NM NM

New Relic NEWR-US 4,964 5,325 82.1% 89.2% 153.0% 34.5% 36.2% NM 13.0x 9.0x 7.2x NM NM

LogMeIn LOGM-US 4,671 4,622 66.1% (19.0%) 31.2% 45.9% 5.9% 30.8% 4.0x 3.7x 3.5x 12.9x 32.5x

MongoDB MDB-US 3,862 2,568 95.7% NA NA 54.7% 47.7% NM 20.1x 12.7x 9.7x NM NM

Qualys QLYS-US 3,433 3,475 90.6% 72.0% 201.0% 21.6% 18.5% 27.6% 12.8x 10.4x 8.7x 46.4x 75.9x

Smartsheet SMAR-US 3,003 2,799 92.0% NA NA 63.2% 50.4% NM 21.3x 13.1x 9.7x NM NM

Mimecast MIME-US 2,537 2,501 89.4% 47.4% NA 32.8% 24.4% 6.9% 8.6x 6.6x 5.3x 123.2x NM

Talend TLND-US 1,982 2,084 94.9% 70.3% NA 40.3% 39.1% NM 11.2x 7.6x NM NM NM

Median $4,964 $5,325 92.0% 72.0% 163.1% 40.0% 30.0% 6.9% 12.8x 9.0x 7.4x 46.4x 54.2x



Atlassian TEAM-US $21,743 $10,210 99.1% 173.5% NA 40.0% 30.0% 4.7% 22.9x 16.6x 13.2x NM NM

Dropbox DBX-US $9,960 $9,084 61.7% NA NA 27.1% 16.1% NM 7.5x 6.3x 5.5x NM NM

Twilio TWLO-US $8,141 $6,631 97.1% 189.0% NA 53.4% 25.9% NM 14.5x 10.9x 8.6x NM NM

LogMeIn LOGM-US $4,671 $4,622 66.1% (19.0%) 31.2% 45.9% 5.9% 30.8% 4.0x 3.7x 3.5x 12.9x 32.5x

Smartsheet SMAR-US $3,003 $418 92.0% NA NA 63.2% 50.4% NM 21.3x 13.1x 9.7x NM NM

Infrastructure Software – Trading Comparables Metrics by SectorVALUATION1


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

I T S P E N D M A N A G E M E N T


ServiceNow NOW-US $36,787 $34,803 94.8% 66.5% 173.3% 37.7% 29.6% 3.4% 15.1x 11.0x 8.6x NM NM

Zendesk ZEN-US $7,537 $7,523 98.3% 143.9% 252.9% 39.0% 30.6% NM 13.7x 9.9x 7.6x NM NM

Apptio APTI-US $1,510 $1,647 89.4% 100.1% NA 24.5% 16.2% NM 6.7x 5.6x 4.7x NM NM

SendGrid SEND-US $1,473 $1,707 95.2% NA NA 34.2% 32.7% 5.9% 11.5x 8.2x 6.7x 194.1x NM

E M A I L M A R K E T I N G A U T O M A T I O N

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

New Relic NEWR-US $4,964 $5,325 82.1% 89.2% 153.0% 34.5% 36.2% NM 13.0x 9.0x 7.2x NM NM

Pegasystems PEGA-US $4,679 $4,923 92.1% 8.6% 155.0% 5.9% 11.3% 2.7% 5.5x 4.8x 4.5x NM NM

Appian APPN-US $1,982 $1,875 75.9% 16.3% NA 41.6% 15.6% NM 9.6x 8.0x 6.7x NM NM

Appian APPN-US $1,982 $1,875 75.9% 16.3% NA 41.6% 15.6% NM 9.6x 8.0x 6.7x NM NM

Progress Software PRGS-US $1,588 $1,589 65.8% (7.5%) 37.7% 0.7% (1.0%) 35.0% 4.0x 4.0x NM 11.3x 25.8x

Vmware VMW-US $55,409 $64,497 94.6% 42.9% 93.6% 13.7% 9.8% 29.3% 6.5x 5.8x 5.5x 22.3x 40.6x

Citrix Systems CTXS-US $16,747 $15,080 95.2% 44.7% 99.1% (0.2%) 2.6% 31.0% 5.7x 5.5x 5.2x 18.3x 119.6x

Nutanix NTNX-US $6,505 $5,773 65.9% 90.8% NA 50.7% 24.4% NM 5.6x 4.2x 3.2x NM NM

MobileIron MOBL-US $449 $545 92.8% 43.2% 73.8% 8.5% 10.8% NM 2.4x 2.1x 2.0x NM NM



Salesforce.com CRM-US $124,060 $120,338 98.7% 70.2% 118.1% 25.9% 26.3% 11.3% 10.5x 7.9x 6.6x 93.2x 157.9x

Pivotal PVTL-US $4,366 $5,037 62.7% NA NA 23.9% 29.0% NM 7.5x 5.5x 4.4x NM NM

Splunk SPLK-US $16,644 $17,729 93.0% 82.0% 116.2% 34.9% 35.0% NM 11.5x 8.1x 6.6x NM NM

Tableau Software DATA-US $8,278 $7,827 94.6% 49.2% 35.9% 14.2% 10.7% NM 8.3x 7.3x 6.1x NM NM

Alteryx AYX-US $3,309 $3,637 90.6% 180.9% NA 14.2% 48.3% NM 20.4x 12.9x 10.1x NM NM

Cloudera CLDR-US $2,260 $2,667 78.7% 6.2% NA 32.8% 22.8% NM 5.5x 4.3x 3.6x NM NM

Talend TLND-US $1,982 $2,084 94.9% 70.3% NA 40.3% 39.1% NM 11.2x 7.6x NM NM NM

Domo DOMO-US $353 $495 74.3% NA NA 45.6% 43.6% NM 3.3x 2.2x 1.7x NM NM

Infrastructure Software – Trading Comparables Metrics by SectorVALUATION1


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 SEPAM Systems EPAM-US $7,184 $7,406 95.5% 56.6% 83.1% 27.3% 22.2% 14.6% 4.1x 3.2x 2.7x 28.3x 49.6x

Globant GLOB-US $2,091 $2,117 88.8% 47.2% 96.8% 29.2% 19.5% 19.0% 4.2x 3.4x 2.7x 22.1x 40.9x

Endava DAVA-US $1,518 $1,512 93.5% NA NA 44.9% 19.7% 16.7% 5.2x 4.1x 3.6x 31.1x 59.2x

Cloudera CLDR-US $2,260 $2,667 78.7% 6.2% NA 32.8% 22.8% NM 5.5x 4.3x 3.6x NM NM

Hortonworks HDP-US $1,732 $1,856 87.0% 34.6% 8.9% 42.4% 29.1% NM 5.6x 4.1x 3.4x NM NM

MongoDB MDB-US $3,862 $3,250 95.7% NA NA 54.7% 47.7% NM 20.1x 12.7x 9.7x NM NM

Atlassian TEAM-US $10,209 $10,210 99.1% 173.5% NA 40.0% 30.0% 4.7% 10.8x 7.8x 6.2x NM NM

Amazon AMZN-US $1,020,353 $976,945 97.7% 108.4% 284.7% 37.1% 23.8% 11.5% 4.6x 3.6x 3.0x 40.0x 109.7x

Pluralsight PS-US $1,917 $1,827 83.4% NA NA 38.0% 32.0% NM 9.0x 6.4x 4.9x NM NM



Qualys QLYS-US $3,433 $3,475 90.6% 72.0% 201.0% 21.6% 18.5% 27.6% 12.8x 10.4x 8.7x 46.4x 75.9x

Tenable TENB-US $2,623 $3,617 99.2% NA NA 45.0% 26.9% NM 10.7x 7.9x 6.4x NM NM

Rapid7 RPD-US $1,594 $1,730 93.7% 109.8% 65.9% 24.2% 23.7% NM 7.2x 5.6x 4.5x NM NM

Okta OKTA-US $7,235 $6,835 93.2% 149.4% NA 58.1% 39.9% NM 22.3x 14.9x 11.6x NM NM

SailPoint Technologies SAIL-US $2,862 $2,984 98.3% NA NA 43.5% 27.9% 7.1% 13.3x 9.9x 8.0x 186.8x NM

CyberArk Software CYBR-US $2,591 $2,879 99.8% 94.7% 56.1% 25.0% 25.0% 11.3% 8.8x 6.7x 5.6x 77.7x 143.7x

Check Point Software CHKP-US $16,945 $18,382 97.4% 3.2% 47.2% 3.4% 3.2% 50.1% 8.9x 8.6x 8.2x 17.8x 22.4x

Symantec SYMC-US $15,986 $13,226 62.7% (35.1%) 10.1% 11.7% 0.5% 24.4% 3.3x 3.3x 3.2x 13.6x 11.3x

Trend Micro 4704-JP $7,674 $9,029 99.0% 30.8% 85.5% 8.8% 8.3% 34.3% 5.4x 4.9x 4.6x 15.9x 35.9x

Avast AVST-GB $4,799 $3,524 96.1% NA NA 91.6% 31.2% 47.6% 7.4x 5.5x 5.3x 15.4x NM

FireEye FEYE-US $3,133 $3,315 87.8% 1.4% (48.0%) 11.2% 6.9% NM 3.8x 3.5x 3.3x NM NM

Sophos Group SOPH-GB $3,113 $3,035 66.2% (13.7%) 78.5% 21.0% 22.1% 3.9% 4.9x 3.9x 3.4x 124.5x NM

Security Software – Trading Comparables Metrics by SectorVALUATION1


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

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

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

Palo Alto Networks PANW-US $19,195 $21,135 94.1% 56.3% 31.2% 29.0% 25.7% NM 8.4x 6.4x 5.4x NM NM

Check Point Software CHKP-US $16,945 $18,382 97.4% 3.2% 47.2% 3.4% 3.2% 50.1% 8.9x 8.6x 8.2x 17.8x 22.4x

Fortinet FTNT-US $14,575 $15,606 99.9% 157.4% 114.4% 17.9% 20.7% 15.9% 8.9x 7.2x 6.4x 56.3x 176.2x

Zscaler ZS-US $5,183 $4,884 84.5% NA NA 51.3% 42.8% NM 27.3x 17.8x 13.7x NM NM

Imperva IMPV-US $1,223 $1,625 80.6% 7.0% (28.7%) 17.2% 10.7% 1.3% 3.6x 3.1x 2.8x NM NM

CyberArk Software CYBR-US $2,591 $2,879 99.8% 94.7% 56.1% 25.0% 25.0% 11.3% 8.8x 6.7x 5.6x 77.7x 143.7x

Proofpoint PFPT-US $5,358 $5,452 81.6% 21.9% 75.0% 39.3% 28.4% NM 8.1x 5.9x 4.7x NM NM

Mimecast MIME-US $2,537 $2,501 89.4% 47.4% NA 32.8% 24.4% 6.9% 8.6x 6.6x 5.3x 123.2x NM



Security Software – Trading Comparables Metrics by SectorVALUATION1


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


M A N A G E D S E C U R I T Y S E R V I C E S

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



Carbon Black CBLK-US $1,273 $1,437 60.5% NA NA 30.5% 22.4% NM 6.4x 5.0x 4.0x NM NM

SecureWorks SCWX-US $1,081 $1,184 92.3% 18.6% NA 8.2% 11.8% NM 2.2x 1.9x 1.8x NM NM

Fortinet FTNT-US $14,575 $15,606 99.9% 157.4% 114.4% 17.9% 20.7% 15.9% 8.9x 7.2x 6.4x 56.3x 176.2x

Sophos Group SOPH-GB $3,113 $3,035 66.2% (13.7%) 78.5% 21.0% 22.1% 3.9% 4.9x 3.9x 3.4x 124.5x NM



Closed Date Target Buyer(s) DescriptionEnterprise Value ($m)

Implied EV / Revenue

Implied EV / EBITDA

Infrastructure Software – Transaction ActivitySELECT RECENT M&A TRANSACTIONS1,2

Note: Announced or Closed in Q3 2018.

* Unpublished information.

Pending SUSE EQT Provider of enterprise-grade, open source software infrastructure and application delivery solutions. $2,540 6.9x 22.7x

11/05/2018 CA Technologies Broadcom Provider of enterprise IT software to eliminate the barriers between ideas and business outcomes. $19,000 4.6x 14.3x

10/26/2018 GitHub Microsoft Provider of a source code management platform. $7,500 * *

10/04/2018 BeyondTrust Bomgar; Francisco Partners Developer of cybersecurity software designed to protect against data breaches. * * *

10/04/2018 CloudHealth VMWare Provider of a cloud-service-management software. $500 * *

10/01/2018 Duo Security Cisco Systems Provider of cloud-based Internet security services designed to protect against data breaches. $2,350 * *

10/01/2018 mendix Siemens Provider of a low-code application development platform. $730 * *

10/01/2018 OpsGenie Atlassian Developer of an altering and on-call management technology to manage schedules and escalations. $295 * *

10/01/2018 Zephyr Smart Bear Provider of on-demand test management software. $138 * *

09/28/2018 Built.io Software AG Provider of an application development platform designed to build mobile applications. * * *

09/26/2018 RightScale Flexera Software; TA Associates; OTPP Provider of an enterprise cloud management platform. * * *

09/11/2018 Ytica Twilio Provider of contact center reporting, speech analytics, and workforce optimization software. * * *

09/10/2018 Base Zendesk Provider of customer relationship management and sales software. * * *

09/05/2018 RapidFire Tools Kaseya; Insight Venture Partners Provider of business building technology tools for Managed Service providers and resellers. * * *

08/24/2018 Frame Nutanix Provider of a software browsing platform to allow any Windows software to be run in the cloud. $116 * *

08/22/2018 AlienVault AT&T Provider of a digital security management and crowdsourced threat intelligence platform. $600 * *

08/15/2018 Centrify Thoma Bravo Provider of an identity and access management platform to protect against cyber threats. * * *

08/14/2018 Basefarm Orange SA Provider of cloud-based infrastructure / services and management of critical applications. $408 * *

08/13/2018 Prevoty Imperva Provider of an autonomous application protection technology. $151 * *

07/31/2018 Dattus Plex Systems; Francisco Partners Provider of an asset monitoring platform designed to extract the critical machine data. * * *

07/26/2018 HipChat Slack Provider of internal communication and messaging services. * * *

07/18/2018 Actian HCL Technologies; Sumeru Equity Provider of enterprise-class database software to connect operational and analytical business data. $330 * *

07/12/2018 Kogentix Accenture Provider of a big data analytics platform designed to make better business decisions. * * *

07/10/2018 Trusted Metrics SolarWinds Provider of real-time threat monitoring and management software. * * *



acquired by

and

acquired bysignificant equity investment from

acquired by acquired by

acquired by

and

acquired by strategic investment from acquired byacquired byacquired byminority investment fromacquired by minority investment fromacquired by

acquired by

GFI Energy Groupa division of

acquired byacquired acquired by acquired bymajority recapitalization by

recapitalized by acquired by

acquired by

and

acquired byacquired byacquired byacquired byacquired byacquired by

acquired by acquired byacquired byacquired byacquired by

a portfolio company of

recapitalized by management

acquired byacquired byacquired byacquired bymerged withsignificant equity investment from

strategic investment fromacquired byacquired by

acquired by merged withminority investment from acquired bymajority investment fromacquired byacquired a majority stake

inacquired byacquired byacquired byacquired byacquired byacquired byacquired byacquired by

recapitalized byacquired by

B2C

acquired byacquired by acquired byacquired byacquiredacquired byrecapitalized bymajority investment fromacquired bymajority investment fromacquired bygrowth Investment frommajority investment from

acquired by acquiredacquired byacquired byacquired byinvestment from acquired byacquiredacquired byacquired byinvestment frommerged withacquired byacquiredinvestment from

acquired byacquired byacquired by acquired by

&

majority investment frominvested inacquired byacquired by acquiredacquired by acquired by

a wholly-owned affiliate of

acquired by

&

acquiredacquired by

&

acquired by

Select HW TMT Transactions

http://www.meddatahealth.com/our_business/index.html

http://www.aderant.com/

http://www.cltsloyalty.com/

http://www.oaktreecapital.com/default.aspx

http://www.leisurepassgroup.com/



HARRIS WILLIAMS OFFICE LOCATIONS

Our Firm

Healthcare & Life Sciences Industrials

Energy, Power & Infrastructure

Industrials

Harris Williams has a broad range of industry expertise, which create powerful opportunities. Our clients benefit form 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.

U N I T E D S T A T E S E U R O P E

N E T W O R K O F F I C E S

Beijing

Hong Kong

Mumbai

New Delhi

Shanghai

Aerospace, Defense &

Government Services

Building Products & Materials

Business Services

Consumer Specialty Distribution

Technology, Media & Telecom

Transportation & Logistics

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

Cleveland1900 East 9th Street20th 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

London63 Brook StreetLondon W1K 4HS, EnglandPhone: +44 (0) 20 7518 8900



Harris Williams (www.harriswilliams.com) is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services.

Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams Ltd, which is private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 07078852). Harris Williams Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams is a trade name under which Harris Williams LLC and Harris Williams Ltd conduct business.

THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS AND COPYRIGHTS OWNED BY THIRD-PARTY INFORMATION PROVIDERS. NONE OF THE THIRD-PARTY INFORMATION PROVIDERS IS ENDORSING THE OFFERING OF, AND SHALL NOT IN ANY WAY BE DEEMED AN ISSUER OR UNDERWRITER OF, THE SECURITIES, FINANCIAL INSTRUMENTS OR OTHER INVESTMENTS DISCUSSED IN THIS REPORT, AND SHALL NOT HAVE ANY LIABILITY OR RESPONSIBILITY FOR ANY STATEMENTS MADE IN THE REPORT OR FOR ANY FINANCIAL STATEMENTS, FINANCIAL PROJECTIONS OR OTHER FINANCIAL INFORMATION CONTAINED OR ATTACHED AS AN EXHIBIT TO THE REPORT. FOR MORE INFORMATION ABOUT THE MATERIALS PROVIDED BY SUCH THIRD PARTIES, PLEASE CONTACT US.

The information and views contained in this report were prepared by Harris Williams (“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 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 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.

Copyright© 2018 Harris Williams, all rights reserved.

1 . F A C T S E T .

2 . P I T C H B O O K .

3 . G A R T N E R .

4 . I D C .

Harris Williams

Disclosures

Sources

http://www.harriswilliams.com/

technology, media & telecom - harris williams...technology, media & telecom infrastructure...

Documents