MA Flash Report December 2009 FINAL
Transcript of 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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Corum Group Presentation 3
Valuations Up Time to Sell?
AGENDA
Overview of Current Market
Market and Valuation Analysis Closing Comments - Q&A
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Corum Group Presentation 4
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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Corum Group Presentation 5
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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Corum Group Presentation 6
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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Corum Group Presentation 7
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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Corum Group Presentation 8
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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Corum Group Presentation 9
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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Corum Group Presentation 10
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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Corum Group Presentation 11
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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Corum Group Presentation 12
Recent Transactions Closed
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Corum Group Presentation 13
Recent Transactions Closed
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Corum Group Presentation 15
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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Corum Group Presentation 16
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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Corum Group Presentation 17
Public Markets
40.00
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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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Corum Group Presentation 18
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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Corum Group Presentation 20
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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Corum Group Presentation 21
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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Corum Group Presentation 22
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
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Corum Group Presentation 23
Infrastructure Market
Public Valuations Deal Spotlight:
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
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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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Corum Group Presentation 24
Internet Market
Public Valuations Deal Spotlight:
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
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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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Corum Group Presentation 25
IT Services Market
Public Valuations Deal Spotlight:
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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Corum Group Presentation 26
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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Corum Group Presentation 27
Unique Opportunity
Mega Deals
Divestitures Private Equity Buyers
Venture Portfolio Exits
Re-Valuations
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Corum Group Presentation 29
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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Corum Group Presentation 30
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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Corum Group Presentation 31
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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Corum Group Presentation 32
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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Corum Group Presentation 34
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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Corum Group Presentation 35
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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Corum Group Presentation 36
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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Corum Group Presentation 37
Contact Information
Research and Conferences:www.corumgroup.com
Corum Group Ltd.
Bruce Milne, [email protected]
Dougan Milne, Director of Research
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