Post on 27-May-2020
0
Welcome to the Q1 edition of Results International’s Tech Report
Here at Results we cover all aspects of technology with a particular focus on enterprise software / SaaS, software-
related IT services, and tech enabled services. However we like to turn our attention to a number of specific sectors
at the end of every quarter to consider the trends and analyse the activity in the M&A, fundraising and public
markets.
We have produced our view on the previous quarter’s proceedings in a series of individual market reviews on:
• SaaS
• HealthTech
• Cyber Security
• AdTech & MarTech
Each sector has had an exciting quarter, with innovation and strong investor appetite driving buoyant public and
private market activity.
Cyber Security, HealthTech and SaaS have all seen healthy public markets with our Results indices all up on the
previous quarter. The AdTech & MarTech sectors have been mixed in Q1 however the underlying sector trends
remain strong as the shift to programmatic and the rise of video, mobile, social and native continues.
The private markets in Cyber Security have seen a correspondingly strong quarter with M&A activity up to record
levels. The HealthTech and AdTech & MarTech M&A markets have seen a slight decline from the previous quarter,
however both remain at historically high levels as private investors invest in innovation and product differentiation.
One thing is prevalent within each of the sectors; those displaying strong top-line growth with quality clients and an
innovative product continue to outperform their peers on the public markets.
We hope you enjoy the document, and please do get in touch if you would like to discuss any of the themes with
us. We look forward to speaking with you soon.
1
Deep domain expertise in three inter-related sectors… … and broad industry networks
A market-leading corporate finance advisory firm…
• Founded in 1991
• Entrepreneurial and owner-managed
• 40 person team; 250+ completed transactions
• Broad global network
• Creative solutions
• Senior level focus on every transaction
…with global reach
About Results International
3
Results International Global SaaS Indices
4
1.9%
16.7%
6.2%
(23.2%)
(0.2%)
Q1 2015 Performance
Large Cap 5.7%
Mid Cap (1.0%)
Small Cap 12.0%
Global SaaS 5.1%
Note: Based on share prices as at 31 March 2015
Note: Indices weighted by market capitalisation
Sources: Capital IQ and Results analysis
50
60
70
80
90
100
110
120
130
140
150
Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15
Large Cap Mid Cap Small Cap Global SaaS Index NASDAQ Comp
Global SaaS Universe: Large & Mid Cap Share Price Performance
5
Q1
-20
15
La
st 1
2 M
on
ths
Large Cap Mid Cap
Note: Share price performance as at 31 March 2015
Sources: Capital IQ and Results analysis
(25.5%) (18.4%)
(2.2%)
(21.7%)
17.0%
31.5% 24.1%
(7.7%)
(22.6%)
56.2%
(4.9%)
1.1%
(4.4%)
(39.6%)
(9.8%)
10.9%
(21.6%)
34.1%
91.8%
24.7%
(15.2%)
(60.0%)
(40.0%)
(20.0%)
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
(18.1%)
0.9%
(15.0%) (13.1%)
12.6% 16.1% 15.8%
3.4%
(29.7%)
4.1% 5.8%
(13.1%)
(3.3%)
(17.9%)
2.7%
(8.3%)
(21.7%)
26.4%
37.2%
13.5%
(27.4%)
(40.0%)
(30.0%)
(20.0%)
(10.0%)
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Global SaaS Universe: Small Cap Share Price Performance
6
Q1
-20
15
La
st 1
2 M
on
ths
Small Cap
Note: Share price performance as at 31 March 2015
Sources: Capital IQ and Results analysis
12.0%
(55.1%)
0.7%
(14.9%)
49.2%
18.7%
(4.5%)
(25.7%)
23.1% 17.2% 18.5%
12.9% 8.0%
38.0%
8.3%
(80.0%)
(60.0%)
(40.0%)
(20.0%)
0.0%
20.0%
40.0%
60.0%
(21.7%)
(74.3%)
(22.4%)
(36.0%) (38.8%)
n.a. 7.8%
(40.5%)
82.8%
(37.3%)
9.2% 1.9%
(5.8%)
17.3%
(8.2%)
(100.0%)
(80.0%)
(60.0%)
(40.0%)
(20.0%)
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
Global SaaS: Valuation Benchmarks
7
EBITDA Margin 2015E EV / EBITDA 2015E
Revenue Growth (2015-16E) EV / Revenue 2015E
Note: EV = Enterprise Value; Financials calendarised to December year end
Note: Median values reported; excludes negative multiples
Note: See Selected Publicly Traded Companies (slides 6 & 7) for details of companies included in each category
Source: Capital IQ
21.6% 19.8% 19.5%
21.2%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Large Cap Mid Cap Small Cap Global SaaS
7.4 x
4.6 x
3.6 x
5.1 x
0.0 x
1.0 x
2.0 x
3.0 x
4.0 x
5.0 x
6.0 x
7.0 x
8.0 x
Large Cap Mid Cap Small Cap Global SaaS
30.7 x
19.4 x
39.0 x
24.2 x
0.0 x
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
40.0 x
45.0 x
Large Cap Mid Cap Small Cap Global SaaS
16.7%
18.0%
0.4%
13.3%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Large Cap Mid Cap Small Cap Global SaaS
Operating Metrics Valuation Metrics
Price % of 52 Market Total Net Enterprise Revenue Subscription Rev. Growth Gross Margin EBITDA Margin Revenue EBITDA
Company (31-Mar-15) Week High Cap Cash Debt Value CY2015 Historical CY15-16 Historical CY2015 CY2016 CY2015 CY2016 CY2015 CY2016
Large Cap
salesforce.com, inc. 66.81 94.1% 42,818 995 1,202 44,021 6,416 93.9% 21.0% 76.0% 16.0% 17.3% 6.9 x 5.7 x 43.0 x 32.9 x
Solera Holdings Inc. 51.66 74.2% 3,477 393 2,309 5,786 1,173 n.a 6.0% 68.3% 45.0% 41.3% 4.9 x 4.7 x 12.1 x 11.3 x
Workday, Inc. 84.41 86.7% 15,869 1,858 (1,364) 14,505 1,113 75.5% 39.5% 66.4% 1.4% 3.6% 13.0 x 9.3 x n.m. n.m.
Dealertrack Technologies, Inc. 38.52 76.1% 2,132 334 557 2,688 1,091 37.7% 15.3% 45.0% 20.4% 21.4% 2.5 x 2.1 x 12.1 x 10.0 x
Serv iceNow, Inc. 78.78 97.0% 12,745 745 (294) 12,452 990 82.4% 36.0% 63.6% 12.8% 14.1% 12.6 x 9.3 x 98.5 x 65.5 x
athenahealth, Inc. 119.39 71.0% 4,661 115 94 4,754 920 94.7% 21.5% 59.8% 17.4% 17.9% 5.2 x 4.3 x 29.7 x 23.8 x
NetSuite Inc. 92.76 81.1% 7,250 450 (176) 7,075 722 80.5% 28.3% 68.2% 8.6% 8.8% 9.8 x 7.6 x n.m. 87.2 x
The Ultimate Software Group, Inc. 169.96 97.6% 4,965 116 (108) 4,857 617 81.5% 21.7% 59.8% 24.8% 26.1% 7.9 x 6.5 x 31.8 x 24.8 x
25th percentile 75.7% 870 78.0% 19.5% 59.8% 11.7% 12.8% 5.1 x 4.6 x 16.5 x 17.5 x
Median 83.9% 1,040 81.5% 21.6% 65.0% 16.7% 17.6% 7.4 x 6.1 x 30.7 x 24.8 x
75th percentile 94.8% 1,128 88.2% 30.2% 68.2% 21.5% 22.6% 10.5 x 8.0 x 40.2 x 49.2 x
Mid Cap
RealPage, Inc. 20.14 87.1% 1,596 27 (7) 1,590 456 96.1% 10.5% 56.8% 18.0% 19.9% 3.5 x 3.2 x 19.4 x 15.9 x
Medidata Solutions, Inc. 49.04 83.7% 2,777 273 (32) 2,745 401 82.3% 19.8% 74.7% 23.5% 25.3% 6.8 x 5.7 x 29.2 x 22.6 x
Constant Contact, Inc. 38.21 88.5% 1,308 163 (163) 1,146 388 n.a 16.8% 72.5% 19.5% 21.1% 3.0 x 2.5 x 15.2 x 12.0 x
Veeva Systems Inc. 25.53 75.8% 3,356 398 (398) 2,959 388 69.8% 24.2% 60.7% 28.5% 29.2% 7.6 x 6.1 x 26.7 x 21.0 x
Cornerstone OnDemand, Inc. 28.89 58.0% 1,557 283 (57) 1,500 338 n.a 26.1% 70.5% 1.8% 5.2% 4.4 x 3.5 x n.m. 67.7 x
Fleetmatics Group PLC 44.85 96.5% 1,733 175 (151) 1,582 289 n.a 21.6% 75.2% 31.9% 32.8% 5.5 x 4.5 x 17.2 x 13.7 x
IntraLinks Holdings, Inc. 10.34 84.2% 607 53 26 633 270 n.a 7.8% 72.9% 14.4% 15.6% 2.3 x 2.2 x 16.2 x 13.9 x
LivePerson Inc. 10.24 69.6% 583 49 (49) 533 266 n.a 16.1% 74.9% 10.5% 11.0% 2.0 x 1.7 x 19.1 x 15.7 x
LogMeIn, Inc. 55.99 96.3% 1,418 201 (201) 1,216 262 n.a 16.0% 89.6% 21.4% 21.7% 4.6 x 4.0 x 21.7 x 18.4 x
Demandware, Inc. 60.90 85.0% 2,342 244 (243) 2,100 234 92.3% 33.5% 73.8% 4.5% 7.7% 9.0 x 6.7 x n.m. 87.4 x
Ellie Mae, Inc. 55.31 96.4% 1,735 76 (75) 1,660 206 n.a 23.7% 71.4% 19.2% 23.6% 8.1 x 6.5 x 41.9 x 27.7 x
Marketo, Inc. 25.62 71.9% 1,153 113 (106) 1,047 206 90.2% 31.1% 62.7% (17.3%) (9.4%) 5.1 x 3.9 x n.m. n.m.
Bazaarvoice, Inc. 5.65 60.2% 444 105 (48) 396 202 n.a 11.3% 68.5% (0.4%) 5.5% 2.0 x 1.8 x n.m. 31.9 x
25th percentile 71.9% 234 82.3% 16.0% 68.5% 4.5% 7.7% 3.0 x 2.5 x 17.2 x 15.3 x
Median 84.2% 270 90.2% 19.8% 72.5% 18.0% 19.9% 4.6 x 3.9 x 19.4 x 19.7 x
75th percentile 88.5% 388 92.3% 24.2% 74.7% 21.4% 23.6% 6.8 x 5.7 x 26.7 x 28.7 x
Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 100x EV / Revenue and 100x EV / EBITDA; Net debt includes minority interest
Note: Market cap classifications categorised by CY2015E revenue:
• Large Cap: Revenues greater than $500m
• Mid Cap: Revenues between $200m and $500m
• Small Cap: Revenues less than $200m
Source: Capital IQ
Global SaaS: Selected Publicly Traded Companies
8
Operating Metrics Valuation Metrics
Price % of 52 Market Total Net Enterprise Revenue Subscription Rev. Growth Gross Margin EBITDA Margin Revenue EBITDA
Company (31-Mar-15) Week High Cap Cash Debt Value CY2015 Historical CY15-16 Historical CY2015 CY2016 CY2015 CY2016 CY2015 CY2016
Small Cap
Jive Software, Inc. 5.13 58.6% 384 114 (108) 276 197 88.7% 12.0% 68.2% 0.4% 3.2% 1.4 x 1.2 x n.m. 38.9 x
Cvent, Inc. 28.04 76.9% 1,229 168 (168) 1,061 178 90.2% 22.9% 70.2% 10.2% 12.0% 6.0 x 4.8 x 58.4 x 40.3 x
Benefitfocus, Inc. 36.79 74.6% 1,117 56 (2) 1,115 174 93.3% 23.4% 36.3% (22.5%) (11.3%) 6.4 x 5.2 x n.m. n.m.
Qualys, Inc. 46.48 93.0% 1,832 127 (127) 1,704 168 n.a 23.8% 77.2% 25.9% 27.1% 10.1 x 8.2 x 39.0 x 30.2 x
HubSpot, Inc. 39.90 90.0% 1,435 124 (124) 1,311 161 58.4% 26.3% 68.0% (22.2%) (15.9%) 8.1 x 6.4 x n.m. n.m.
SPS Commerce, Inc. 67.10 95.3% 1,153 131 (131) 1,022 157 n.a 19.5% 68.7% 13.8% 14.9% 6.5 x 5.5 x 47.2 x 36.7 x
Xero Limited. 18.06 60.3% 2,444 128 (128) 2,316 144 94.9% 59.1% 65.7% (26.0%) (8.7%) 16.1 x 10.1 x n.m. n.m.
Marin Software Incorporated 6.29 49.7% 231 68 (65) 166 115 n.a 17.0% 64.2% (9.8%) (4.1%) 1.4 x 1.2 x n.m. n.m.
SciQuest, Inc. 16.93 61.6% 468 131 (131) 337 108 n.a 11.7% 69.1% 20.6% 21.6% 3.1 x 2.8 x 15.2 x 12.9 x
Rally Software Development Corp. 15.69 99.4% 410 67 (67) 344 103 77.8% 21.6% 77.6% (18.4%) (2.7%) 3.3 x 2.7 x n.m. n.m.
Textura Corporation 27.18 89.0% 729 67 (66) 663 99 n.a 40.1% 79.6% 11.7% 11.5% 6.7 x 4.8 x 57.3 x 41.4 x
ChannelAdvisor Corporation 9.69 24.6% 242 68 (65) 178 96 n.a 16.3% 71.5% (17.1%) (10.5%) 1.9 x 1.6 x n.m. n.m.
Halogen Software Inc. 7.25 91.9% 162 44 (44) 117 67 87.7% 19.4% 71.8% (13.6%) (9.4%) 1.7 x 1.5 x n.m. n.m.
Craneware plc 7.99 95.6% 216 36 (36) 179 50 87.3% 8.2% 95.4% 30.4% 30.7% 3.6 x 3.3 x 11.9 x 10.9 x
StatPro Group plc 1.17 87.2% 79 4 (4) 75 48 n.a. 3.9% n.a. 14.4% 15.3% 1.6 x 1.5 x 10.7 x 9.7 x
25th percentile 60.9% 97 84.9% 14.2% 68.1% (17.7%) (9.1%) 1.8 x 1.5 x 13.5 x 12.4 x
Median 87.2% 115 88.2% 19.5% 69.6% 0.4% 3.2% 3.6 x 3.3 x 39.0 x 33.5 x
75th percentile 92.4% 165 91.0% 23.6% 75.8% 14.1% 15.1% 6.6 x 5.3 x 52.3 x 39.2 x
9
Global SaaS: Selected Publicly Traded Companies
Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 100x EV / Revenue and 100x EV / EBITDA; Net debt includes minority interest
Note: Market cap classifications categorised by CY2015E revenue:
• Large Cap: Revenues greater than $500m
• Mid Cap: Revenues between $200m and $500m
• Small Cap: Revenues less than $200m
Source: Capital IQ
10
Disclaimer:
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Authorised and regulated by the Financial Conduct Authority.
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Deep domain expertise in three inter-related sectors… … and broad industry networks
A market-leading corporate finance advisory firm…
• Founded in 1991
• Entrepreneurial and owner-managed
• 40 person team; 250+ completed transactions
• Broad global network
• Creative solutions
• Senior level focus on every transaction
…with global reach
12
About Results International
60
70
80
90
100
110
120
130
Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15
Healthcare IT - Europe Healthcare IT - US Biopharma IT Generalists NASDAQ Composite Index FTSE 100
Q1 2015 Performance
Healthcare IT – Europe 5.2%
Healthcare IT - US 7.1%
Biopharma IT -0.5%
Generalists -2.3%
HealthTech(1)
6.6%
Results International Global HealthTech Indices
Note: Based on share prices as at 31 March 2015
Note: Indices weighted by market capitalisation
Note: Biopharma IT index predominantly reflects Veeva performance since IPO in October 2013
Note: (1)
Excludes Generalists
Sources: Capital IQ and Results analysis 13
17.8%
7.3%
16.7%
1.6%
-6.9%
2.6%
HealthTech: Share Price Performance
Note: Share price performance as at 31 March 2015
Note: *‘Last 12 Months’ & ‘Q1-2015’ reference dates adjusted to first trading day post IPO for Inovalon Holdings (11-Feb-15)
Sources: Capital IQ and Results analysis 14
47.4%
33.3%
13.3% 7.9%
1.9%
28.1% 30.2%
6.3%
-25.5%
11.9%
-33.7% -23.8%
-63.4%
-5.3% -5.6%
-16.0%
83.2%
-4.4% -9.8%
-2.8%
-80.0%
-60.0%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
Last
12 M
on
ths
34.9%
-0.7%
8.0%
-3.7%
12.9% 9.0%
13.3%
5.6%
-18.1%
11.9%
-6.3% -4.8%
-33.7%
2.5%
-14.5% -10.7%
25.6%
-3.3%
2.7%
43.8%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Q1-2
015
Healthcare IT – Europe Healthcare IT – US Biopharma IT
HealthTech: Recent IPO Performances
15
Note: Calendarised to December year end; $ millions, except share price data
Note: (1)
Current increase from IPO price; Market data as of 31 March 2015
Note: (2)
Castlight projecting negative EBITDA for CY2015
Source: Capital IQ
Company IPO Date Description Raised Indicative Price
Range ($)
IPO Price ($)
Increase vs. range
Day 1 Increase
Current Increase(1)
Current
EV
EV / Revenue
2015E
EV / EBITDA
2015E
Feb-15 Cloud-based healthcare
data analytics software 600.0 24.00-26.00 27.00 8.0% 0.0% 11.9% 4,597 10.6x 29.2x
Apr-14 Healthcare information
technology and services 1,300.0 18.00-21.00 20.00 2.5% 15.0% 35.4% 12,700 4.3x 13.8x
Mar-14 Healthcare enterprise
management software 177.6 13.00-15.00 16.00 14.3% 148.8% (51.5%) 521 6.8x n.m. (2)
Dec-13
Software, hardware and
services for the healthcare
and energy sectors 199.7 n.a. 2.93 n.a. 20.1% 45.0% 281 2.9x 11.6x
Oct-13 Cloud-based CRM software
for the biopharma industry 260.9 16.00-18.00 20.00 17.6% 85.8% 27.7% 2,959 7.6x 26.7x
NYSE
NYSE
LSE
NYSE
NasdaqGS
HealthTech: Valuation Benchmarks
16
EBITDA Margin 2015E EV / EBITDA 2015E
Revenue Growth (2015-16E) EV / Revenue 2015E
Note: EV = Enterprise Value; Financials calendarised to December year end
Note: Median values reported; excludes negative multiples
Note: See Selected Publicly Traded Companies (Slide 9) for details of companies included in each category
Note: McKesson excluded from above analysis because majority of revenue is generated from pharmaceutical distribution
Source: Capital IQ
4.2%
7.1%
10.0%
19.8%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Generalists Healthcare IT -
Europe
Healthcare IT - US Biopharma IT
28.2%
24.6%
21.7% 23.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Generalists Healthcare IT -
Europe
Healthcare IT - US Biopharma IT
4.0 x
3.1 x 2.9 x
6.8 x
0.0 x
1.0 x
2.0 x
3.0 x
4.0 x
5.0 x
6.0 x
7.0 x
8.0 x
Generalists Healthcare IT -
Europe
Healthcare IT - US Biopharma IT
11.4 x 11.9 x 12.7 x
26.7 x
0.0 x
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
Generalists Healthcare IT -
Europe
Healthcare IT - US Biopharma IT
21
17
20
32
29
18
28 27 28
32
44
61
54
4
3
5
1
1
7
2 7 5
6
2
8
12
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
0
10
20
30
40
50
60
70
80
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015
Healthcare IT Biopharma IT Healthcare IT Total Disclosed Deal Value Biopharma IT Total Disclosed Deal Value
HealthTech: Global M&A Activity
17 Sources: Press releases, Capital IQ, Mergermarket, 451 Research and Results analysis
Nu
mb
er o
f D
ea
ls
Tota
l D
isc
lose
d D
ea
l V
alu
e (
$m
)
HealthTech: Selected Deals in Q1 2015
Date Buyer Target EV ($m) EV /
Revenue EV / EBITDA Company description
Target
Location
Mar-15 - - - Healthcare analytics and performance benchmarking software
Mar-15 - - - Practice management software for physiotherapists and rehabilitation clinics
Mar-15 - - - Cloud-based electronic medical record software
Mar-15 81.4 1.8x 15.0x Practice management, communication and electronic patient record
software
Mar-15 - - - Business intelligence, performance analyisis and emergency room software
for the healthcare industry
Mar-15 - - - Key Opinion Leader campaign optimisation software for the biopharma
industry
Feb-15 70.0 - - Medical imaging software
Feb-15 - - - Administrative and invoicing software for GP clinics
Feb-15 - - - Employee credentialing and talent management software for the
healthcare industry
Feb-15 17.0 1.0x - Electronic health record solutions for hospitals and mental health providers
Feb-15 - - - Pharmacy management software for long-term post-acute care
Jan-15 140.0 - - Cloud-based analytics, decision support and financial planning software for
the healthcare industry
Jan-15 40.0 - - Cloud-based electronic health record and financial software for rural and
community hospitals
Jan-15 - - - Cloud-based sales and marketing analytics software for the biopharma
industry
Jan-15 65.0 - - Genomic analysis and bioinformatics software
Jan-15 - - - Electronic Clinical Outcome Assessments solutions for clinical trials
Jan-15 37.0 - - Medical imaging software
18
Note: Financials relate to the companies’ full fiscal year before the transaction took place
Note: Enterprise Value (EV) = transaction value scaled to 100% shareholding plus net debt (includes minority interest)
Sources: Press releases, Capital IQ, Mergermarket, 451 Research and Results analysis
HealthTech: Selected Fundraisings in Q1 2015
Date Company Type of round Funds
raised ($m) Investor participation Company description
Company
headquarters
Mar-15 Seed - High-Tech Gründerfonds; Innovationsstarter Fund; Quotas Beteiligungs Tinnitus treatment mobile music
application
Mar-15 Seed 0.7 Proxy Ventures UK Self-health and medicine management
mobile app
Mar-15 Seed 0.3 - Genomic data sharing platform
Mar-15 - 2.0 Groupe Arnault; DR. KADE Pharmaherstelle; and an individual investor Female health mobile app
Mar-15 - 1.0 - Geriatric out-patient care support
application
Mar-15 - 8.5 - Neuro-therapy software and hardware
Feb-15 - 9.9 - Diversified healthcare software vendor
Feb-15 Seed 2.5 Creathor Venture; Partech; Stephan Schamback; Heilemann Ventures;
Atlantic Labs
Telemedicine application for
dermatology
Feb-15 - 0.4 Oy Verman Ab; Integra Capital Partners Oy Ltd; Avohoidon Tutkimussaatio;
WetRock Capital & Consulting Oy
Clinical decision support software for
diagnostics
Feb-15 Series B 13.5 Amadeus Capital Partners Limited; Smedvig Capital Limited; Octopus
Investments Limited Patient eMarketplace for clinical trials
Jan-15 - 0.1 Rothenberg Ventures Clinical treatment applications for
psychology
Jan-15 Seed 1.3 Invest PME SA; Alsace Capital Simulation software for drug discovery
Jan-15 Seed 0.1 DreamIt Health Medical photo sharing and management
mobile app
Jan-15 - 1.2 Industrifonden Online platform for fat and muscle mass
measurement
Jan-15 Series A 1.5 Capricorn Venture Partners; Participatiemaatschappij Vlaanderen NV Simulation software for cardiovascular
procedures
Jan-15 - 0.6 - Mobile patient management/
engagement app
19 Sources: Capital IQ and Results analysis
Operating Metrics Valuation Metrics
Price % of 52 Market Total Net Enterprise Revenue Rev. Growth Revenue EBITDA
Company (31-Mar-15) Week High Cap Cash Debt Value CY2015 CY15-16 CY2015 CY2016 CY2015 CY2016 CY2015 CY2016
Generalists with significant HealthTech exposure
Oracle 43.15 92% 195,729 43,777 (11,083) 184,646 39,008 2.6% 49.3% 48.8% 4.7 x 4.6 x 9.6 x 9.4 x
SAP 72.30 99% 88,315 3,369 8,390 96,705 21,499 5.0% 35.2% 35.1% 4.5 x 4.3 x 12.8 x 12.2 x
Thermo Fisher Scientific 134.34 97% 54,136 1,352 13,216 67,352 16,886 4.2% 25.1% 26.2% 4.0 x 3.8 x 15.9 x 14.6 x
EMC 25.56 83% 51,043 8,321 (1,197) 49,846 25,990 6.1% 27.5% 27.3% 1.9 x 1.8 x 7.0 x 6.6 x
Thomson Reuters 40.55 99% 32,221 1,179 7,729 39,950 9,845 2.7% 28.2% 29.4% 3.2 x 3.1 x 11.4 x 10.6 x
Computer Sciences Corporation 65.28 89% 9,424 2,393 356 9,780 12,185 1.4% 17.6% 18.1% 0.8 x 0.8 x 4.6 x 4.4 x
Aspen Technology 38.49 80% 3,418 231 (231) 3,187 461 9.6% 43.0% 43.2% 6.9 x 6.3 x 16.1 x 14.6 x
25th percentile 2.7% 26.3% 26.7% 2.6 x 2.5 x 8.3 x 8.0 x
Median 4.2% 28.2% 29.4% 4.0 x 3.8 x 11.4 x 10.6 x
75th percentile 5.5% 39.1% 39.2% 4.6 x 4.4 x 14.3 x 13.4 x
Healthcare IT - Europe
CompuGroup Medical 28.83 92% 1,434 23 371 1,805 587 7.1% 22.2% 23.7% 3.1 x 2.9 x 13.8 x 12.1 x
EMIS Group 12.83 94% 809 7 25 834 237 7.0% 29.8% 30.2% 3.5 x 3.3 x 11.9 x 10.9 x
Cegedim 33.84 92% 473 44 550 1,024 539 2.8% 19.1% 19.4% 1.9 x 1.8 x 9.9 x 9.5 x
Servelec Group 4.25 87% 290 6 (9) 281 98 7.9% 24.6% 25.3% 2.9 x 2.7 x 11.6 x 10.5 x
Craneware 7.99 96% 216 36 (36) 179 50 8.2% 30.4% 30.7% 3.6 x 3.3 x 11.9 x 10.9 x
25th percentile 7.0% 22.2% 23.7% 2.9 x 2.7 x 11.6 x 10.5 x
Median 7.1% 24.6% 25.3% 3.1 x 2.9 x 11.9 x 10.9 x
75th percentile 7.9% 29.8% 30.2% 3.5 x 3.3 x 11.9 x 10.9 x
Healthcare IT - US
McKesson 226.20 97% 53,558 4,587 7,340 60,898 186,620 4.3% 2.7% 2.9% 0.3 x 0.3 x 12.1 x 10.9 x
Cerner 73.26 98% 26,336 1,421 (1,291) 25,045 5,044 21.0% 31.3% 33.4% 5.0 x 4.1 x 15.8 x 12.3 x
IMS Health 27.07 95% 9,297 390 3,403 12,700 2,943 9.6% 31.4% 31.9% 4.3 x 3.9 x 13.8 x 12.4 x
athenahealth 119.39 71% 4,661 115 94 4,754 920 21.4% 17.4% 17.8% 5.2 x 4.3 x 29.8 x 23.9 x
Inovalon Holdings 30.21 90% 4,460 163 138 4,597 436 21.7% 36.2% 37.2% 10.6 x 8.7 x 29.2 x 23.3 x
Allscripts Healthcare Solutions 11.96 65% 2,163 53 523 2,686 1,434 6.1% 16.7% 18.3% 1.9 x 1.8 x 11.2 x 9.7 x
MedAssets 18.82 74% 1,139 12 878 2,016 759 4.5% 30.2% 30.5% 2.7 x 2.5 x 8.8 x 8.3 x
Quality Systems 15.98 85% 963 125 (125) 839 515 6.8% 16.1% 17.2% 1.6 x 1.5 x 10.1 x 8.9 x
Castlight Health 7.76 31% 713 192 (192) 521 76 58.4% (91.9%) (44.0%) 6.8 x 4.3 x n.m. n.m.
Healthstream 25.20 78% 709 121 (121) 588 203 14.6% 13.7% 15.4% 2.9 x 2.5 x 21.3 x 16.4 x
Computer Programs & Systems 54.26 80% 614 34 (34) 580 199 6.8% 24.8% 26.6% 2.9 x 2.7 x 11.7 x 10.3 x
Merge Healthcare 4.47 95% 436 42 184 619 248 10.0% 21.7% 23.7% 2.5 x 2.3 x 11.5 x 9.6 x
25th percentile 6.8% 16.4% 17.5% 2.6 x 2.4 x 11.3 x 9.6 x
Median 10.0% 21.7% 23.7% 2.9 x 2.7 x 12.7 x 11.3 x
75th percentile 21.2% 30.8% 31.2% 5.1 x 4.2 x 19.9 x 15.4 x
Biopharma IT
Veeva Systems 25.53 76% 3,356 398 (398) 2,959 388 24.2% 28.5% 29.2% 7.6 x 6.1 x 26.7 x 21.0 x
Medidata Solutions 49.04 84% 2,777 273 (32) 2,745 401 19.8% 23.5% 25.3% 6.8 x 5.7 x 29.2 x 22.6 x
Instem 2.83 95% 35 2 - 28 21 8.7% 16.6% 18.3% 1.5 x 1.4 x 9.3 x 7.8 x
25th percentile 14.2% 20.0% 21.8% 4.2 x 3.6 x 18.0 x 14.4 x
Median 19.8% 23.5% 25.3% 6.8 x 5.7 x 26.7 x 21.0 x
75th percentile 22.0% 26.0% 27.2% 7.2 x 5.9 x 28.0 x 21.8 x
EBITDA Margin
HealthTech: Selected Publicly Traded Companies
20
Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 20x EV / Revenue and 50x EV / EBITDA; Net debt includes minority interest
Note: (1)
McKesson excluded from ‘Healthcare IT – US’ summary analysis above because majority of revenue is generated from pharmaceutical distribution
Note: (2)
Castlight Health has run a negative gross margin during a period of rapid growth due to additional implementation costs associated with launching new customers
Note: (3)
Cegedim’s revenue growth and EBITDA multiples reflect the divestiture of its Information and CRM solutions assets to IMS Health in June 2014
Source: Capital IQ
(1)
(2)
(3)
27 Soho Square, London, W1D 3AY
t +44 20 7629 7575 | f +44 20 7629 2233
www.resultsig.com
Chris Lewis
Managing Director
Di: +44 (0) 20 7514 8236
E: clewis@resultsig.com
21
Richard Latner
Manager
Di: +44 (0) 20 7514 8241
E: rlatner@resultsig.com
Disclaimer:
This document has been produced by Results International Group LLP (“Results”) and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or
in part, to any other person. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the
information contained herein and, accordingly, none of Results’ officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.
Authorised and regulated by the Financial Conduct Authority.
Contact Us
588 Broadway, Suite 1010, New York, NY 10012
t +1 646 747 6500
www.resultsig.com
Pierre-Georges Roy
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Maurice Watkins
Partner
Di: +1 646 747 6500
E: mwatkins@resultsig.com
Deep domain expertise in three inter-related sectors… … and broad industry networks
A market-leading corporate finance advisory firm…
• Founded in 1991
• Entrepreneurial and owner-managed
• 40 person team; 250+ completed transactions
• Broad global network
• Creative solutions
• Senior level focus on every transaction
…with global reach
23
About Results International
40
60
80
100
120
140
160
180
200
220
Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15
Broadline Endpoint Network Data Monitoring & Analysis Global Security NASDAQ Comp
Results International Global Cyber Security Indices
Note: Based on share prices as at 31st March 2015
Note: Indices weighted by market capitalisation
Sources: Capital IQ and Results analysis 24
36.3%
18.9% 16.7%
45.3%
14.5%
(23.5%)
14.6%
Q1 2015 Performance
Broadline (4.1%)
Endpoint 16.1%
Network 5.2%
Data 17.5%
Monitoring & Analysis 16.0%
Global Security 4.6%
Cyber Security: Share Price Performance
Note: Share price performance as at 31st March 2015
Sources: Capital IQ and Results analysis 25
Broadline Endpoint Network Data
Monitoring & Analysis
Q1
-20
15
La
st 1
2 M
on
ths
(8.9%)
18.6%
9.7%
40.2%
19.6%
(7.0%)
7.3% 4.3%
(27.4%)
14.0%
(11.9%)
19.2%
(5.0%)
7.5%
24.3%
(13.6%)
22.8%
(25.4%)
23.1%
(40.0%)
(30.0%)
(20.0%)
(10.0%)
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
17.0% 23.9%
3.3% n.a.
12.1%
n.a.
13.3% 21.2%
(32.8%)
58.6%
7.8%
112.9%
18.3%
(6.6%)
(36.3%)
(23.3%)
59.7%
(51.1%)
82.8%
(60.0%)
(40.0%)
(20.0%)
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
Company IPO Date Description Raised Indicative Price
Range ($)
IPO Price
($)
Increase vs.
range
Day 1
Increase
Current
Increase(1)
Current
EV
EV / Revenue
2015E
EV / EBITDA
2015E
Sep-14 Privileged account security
86 13.00-15.00 16.00 14.3% 87.1% 247.3% 1,764 13.3 x n.m.
Jun-14 Mobile security and management
100 8.00-10.00 9.00 0.0% 22.4% 2.9% 683 4.0 x n.m.
Nov-13 Network security and data storage
64 18.00-21.00 18.00 (7.7%) 19.7% 113.7% 1,976 6.2 x 27.4 x
Sep-13 Forensics and malware protection
304 15.00-17.00 20.00 25.0% 80.0% 96.3% 6,267 10.1 x n.m.
Sep-12 Cloud security and compliance
91 11.00-13.00 12.00 0.0% 18.0% 287.3% 1,704 10.1 x 39.5 x
Jul-12 Firewalls and network security
260 38.00-40.00 42.00 7.7% 26.5% 247.8% 12,596 12.6 x n.m.
Apr-12 Communication security
82 10.00-12.00 13.00 18.2% 8.3% 355.5% 2,511 10.1 x n.m.
Feb-12 Antivirus and anti-spyware
128 16.00-18.00 16.00 (5.9%) (18.8%) 35.3% 1,243 3.0 x 8.1 x
Nov-11 Data centre security 90 14.00-16.00 18.00 20.0% 33.3% 137.2% 1,187 6.0 x n.m.
Cyber Security: Recent IPO Performances
26
Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 20x EV / Revenue and 50x EV / EBITDA
Note: (1) Current increase from IPO price; Market data as of 31st March 2015
Source: Capital IQ
Nasdaq
Nasdaq
Nasdaq
Nasdaq
NYSE
NYSE
NYSE
NYSE
Nasdaq
Cyber Security: Valuation Benchmarks
27
EBITDA Margin 2015E EV / EBITDA 2015E
Revenue Growth (2015-16E) EV / Revenue 2015E
Note: EV = Enterprise Value; Financials calendarised to December year end
Note: Median values reported; excludes negative multiples
Note: See Selected Publicly Traded Companies (Slide 9) for details of companies included in each category
Source: Capital IQ
1.9%
16.9%
13.5%
25.4%
14.7% 15.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Broadline Endpoint Network Data Monitoring
& Analysis
Global
Security
34.7%
18.7% 20.7%
(9.2%)
13.6%
19.1%
(15.0%)
(10.0%)
(5.0%)
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Broadline Endpoint Network Data Monitoring
& Analysis
Global
Security
2.7 x 3.5 x
4.6 x
10.1 x
5.7 x
4.0 x
0.0 x
2.0 x
4.0 x
6.0 x
8.0 x
10.0 x
12.0 x
Broadline Endpoint Network Data Monitoring
& Analysis
Global
Security
7.8 x 8.6 x
15.1 x
n.m.
39.5 x
11.6 x
0.0 x
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
40.0 x
45.0 x
Broadline Endpoint Network Data Monitoring
& Analysis
Global
Security
Cyber Security: Global M&A Activity
28 Sources: Press Releases, Capital IQ, Mergermarket and Results analysis
26 26 26 27
23 23
32
24
15
31
25
22
32
28 28
22
34
0
500
1,000
1,500
2,000
2,500
3,000
3,500
0
5
10
15
20
25
30
35
40
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015
Tota
l D
isc
lose
d D
ea
l V
alu
e (
$m
)
Nu
mb
er
of D
ea
ls
Number of Deals Total Disclosed Deal Value
Cyber Security: Selected Deals in Q1 2015
Date Buyer Target EV ($m) EV /
Revenue EV / EBITDA Company description
Target
Location
Mar-15 - - - Mobile VPN service for secure browsing
Mar-15 - - - Cloud and on premise digital document security
Mar-15 2,400 - - Enterprise security solutions against advanced threats
Mar-15 60 - - Predictive cyberthreat detection and prevention
Mar-15 - - - Containerised data security solutions
Mar-15 40 - - Firewall and intrusion detection software
Feb-15 - - - Online two-factor authentication software
Feb-15 80 - - CPU level threat prevention engine
Feb-15 - - - Email security and endpoint protection
Feb-15 - - - Data-centric security software
Feb-15 - - - Cloud security and encryption software
Feb-15 60 - - Secure cloud storage
Jan-15 - - - Cyberthreat intelligence platform
Jan-15 - - - Mobile security and risk analytics
Jan-15 - - - Identity and access management services
Jan-15 - - - Network vulnerabilities and exposures management
Jan-15 - - - Cloud-based email and web security
29
Note: Enterprise value (EV) = transaction value scaled to 100% shareholding plus net debt (includes minority interest)
Financials relate to the companies’ full fiscal year before the transaction took place
Sources: Press releases, Capital IQ, Mergermarket, 451 Research and Results analysis
Cyber Security: Selected Fundraisings in Q1 2015
Date Company Type of round Funds
raised ($m) Investor participation Company description
Company
headquarters
Mar-15 Venture 52.0 Andreessen Horowitz Enterprise security and systems
management
Mar-15 Series A 18.0 Hoxton Ventures, Talis Capital, Invoke Capital Partners Behavioural cyber defence technology
Mar-15 Series A 6.0 Costanoa Venture Capital, Rally Ventures, Paladin Capital Group, Blackbird
Ventures Crowdsourced security testing platform
Mar-15 Series B 30.0 Third Point Ventures, Mayfield Fund, Telstra, Pelion Ventures Cloud application security services
Mar-15 Series A 8.0 USVP, Plus Capital, Double M Capital, Core Ventures Group, Inventures
Group Application security solutions
Mar-15 Series A 9.8 March Capital Partners, Allegis Capital, The Hive Cybersecurity analytics
Mar-15 Series A 1.7 Inventures Group, Paua Ventures Web application security analytics
Feb-15 Series B 12.0 Telstra Ventures, TOYO Corporation, Sierra Ventures, Samsung Ventures Mobile threat defence
Mar-15 Venture 19.0 Blue Sky Capital, Rogers Venture Partners Identity and authentication solutions
Feb-15 Series B 25.0 GGV Capital, Icon Ventures, Kleiner Perkins Caulfield & Byers, Google
Ventures, Greylock Partners, Allegis Capital Crowd security intelligence platform
Feb-15 Venture 8.0 Strom Ventures, Passion Capital, TenEleven Ventures Cyberthreat intelligence
Feb-15 Series A 18.0 Alcatel-Lucent, Cisco Investments, Marker, Bessemer Venture Partners,
Innovation Endeavors Cybersecurity research lab
Feb-15 Venture 15.0 83North Venture Capital, Bessemer Venture Partners Secure mobile gateway and threat
prevention
Jan-15 Series B 15.0 Sequoia Capital, Index Ventures, EMC, Zohar Zisapel User activity auditing and threat
protection
Jan-15 Series C 14.1 DRW Ventures, Icon Ventures, Leapfrog Ventures, Math Venture Partners,
OVP Venture Partners, Pallasite Ventures, Tyco, Venrock Security risk management solutions
Jan-15 Series B 8.0 Harmony Partners, New Science Ventures, .406 Ventures Cloud data encryption platform
Jan-15 Series C 40.1 Jafco Ventures, TechOperators, Google Ventures, Meritech Capital, KPCB Data security platform
30
Sources: VentureSource, Capital IQ and Results analysis
Price % of 52 Market Total Net Enterprise Revenue Rev. Growth Gross Margin EBITDA Margin
Company (31-Mar-15) Week High Cap Cash Debt Value CY2015 CY15-16 Historical CY2015 CY2016 CY2015 CY2016 CY2015 CY2016
Broadline
Symantec 23.37 85.5% 15,961 3,740 (1,645) 14,316 6,502 0.7% 82.8% 34.7% 35.0% 2.2 x 2.2 x 6.3 x 6.2 x
Trend Micro 32.99 90.5% 4,445 1,145 (1,145) 3,300 1,024 3.0% 82.1% 34.7% 34.3% 3.2 x 3.1 x 9.3 x 9.1 x
Endpoint
AVG Technologies 21.65 94.5% 1,117 139 126 1,243 421 8.7% 83.1% 36.3% 34.7% 3.0 x 2.7 x 8.1 x 7.8 x
CyberArk 55.57 78.8% 1,941 177 (177) 1,764 133 25.1% 85.7% 10.6% 11.8% 13.3 x 10.6 x n.m. n.m.
F-Secure 2.89 92.8% 455 66 (66) 389 162 3.8% 95.5% 26.7% 22.5% 2.4 x 2.3 x 9.0 x 10.3 x
MobileIron 9.26 71.5% 801 118 (118) 683 170 29.5% 81.8% (25.4%) (13.4%) 4.0 x 3.1 x n.m. n.m.
Network
Barracuda Networks 38.47 94.5% 2,142 171 (167) 1,976 317 15.6% 77.0% 22.7% 22.9% 6.2 x 5.4 x 27.4 x 23.6 x
Check Point Software 81.97 95.3% 15,065 1,312 (1,312) 13,753 1,621 7.8% 88.3% 56.1% 56.5% 8.5 x 7.9 x 15.1 x 13.9 x
Corero Network Security 0.17 43.3% 19 6 (6) 13 16 40.6% 65.1% 0.6% 9.3% 0.8 x 0.6 x n.m. 6.3 x
Fortinet 34.95 97.9% 6,116 720 (720) 5,396 925 17.6% 70.0% 16.4% 17.9% 5.8 x 5.0 x 35.5 x 27.6 x
F5 Networks 114.94 84.4% 7,387 654 (654) 6,733 1,994 11.4% 82.1% 38.4% 28.3% 3.4 x 3.0 x 8.8 x 10.7 x
Palo Alto Networks 146.08 97.1% 12,794 675 (198) 12,596 1,001 30.9% 73.3% 19.1% 24.3% 12.6 x 9.6 x n.m. 39.6 x
Radware 20.91 87.6% 942 104 (104) 837 248 10.7% 81.0% 22.4% 23.4% 3.4 x 3.1 x 15.1 x 13.0 x
Secunet 22.17 92.8% 143 40 (40) 103 89 10.3% 64.3% 10.1% 10.0% 1.2 x 1.1 x 11.6 x 10.6 x
Data
FireEye 39.25 59.8% 6,669 402 (402) 6,267 619 37.8% 58.9% (33.4%) (16.1%) 10.1 x 7.3 x n.m. n.m.
Imperva 42.70 74.3% 1,296 110 (110) 1,187 199 20.6% 77.7% (9.2%) (2.6%) 6.0 x 5.0 x n.m. n.m.
Proofpoint 59.22 97.5% 2,564 215 (53) 2,511 249 25.4% 66.4% 0.5% 6.3% 10.1 x 8.1 x n.m. n.m.
Monitoring & Analysis
Guidance Software 5.41 48.1% 162 18 (18) 144 110 5.7% 66.9% 1.5% 5.4% 1.3 x 1.2 x n.m. 23.1 x
Qualys 46.48 93.0% 1,832 127 (127) 1,704 168 23.8% 78.3% 25.6% 26.9% 10.1 x 8.2 x 39.5 x 30.4 x
25th percentile 76.6% 165 8.2% 68.4% 1.1% 7.8% 2.7 x 2.5 x 8.9 x 9.4 x
Median 90.5% 249 15.6% 78.3% 19.1% 22.5% 4.0 x 3.1 x 11.6 x 11.9 x
75th percentile 94.5% 963 25.3% 82.5% 30.7% 27.6% 9.3 x 7.6 x 21.3 x 23.4 x
Operating Metrics Valuation Metrics
Revenue EBITDA
Cyber Security: Selected Publicly Traded Companies
31
Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 20x EV / Revenue and 50x EV / EBITDA; Net debt includes minority interest
Source: Capital IQ
27 Soho Square, London, W1D 3AY
t +44 20 7629 7575 | f +44 20 7629 2233
www.resultsig.com
Chris Lewis
Managing Director
Di: +44 (0) 20 7514 8236
E: clewis@resultsig.com
32
Mark Williams
Director
Di: +44 (0) 20 7514 8242
E: mwilliams@resultsig.com
Disclaimer:
This document has been produced by Results International Group LLP (“Results”) and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or
in part, to any other person. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the
information contained herein and, accordingly, none of Results’ officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.
Authorised and regulated by the Financial Conduct Authority.
Contact Us
588 Broadway, Suite 1010, New York, NY 10012
t +1 646 747 6500
www.resultsig.com
Pierre-Georges Roy
Partner
Di: +1 646 747 6505
E: pgroy@resultsig.com
Maurice Watkins
Partner
Di: +1 646 747 6500
E: mwatkins@resultsig.com
34
About Results International
Deep domain expertise in three inter-related sectors… … and broad industry networks
A market-leading corporate finance advisory firm…
• Founded in 1991
• Entrepreneurial and owner-managed
• 40 person team; 250+ completed transactions • Broad global network
• Creative solutions
• Senior level focus on every transaction
…with global reach
50%
60%
70%
80%
90%
100%
110%
120%
130%
Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15
NASDAQ Comp Diversified Internet MarTech Data AdTech
Results International Global AdTech & MarTech Indices
35
10.4%
(5.1%)
16.7%
0.6%
(40.9%)
Last
12 m
on
ths
sha
re p
ric
e p
erf
orm
an
ce
Q1 2015 Performance
Diversified Internet 6.2%
Nasdaq Comp 3.5%
Data 0.5%
MarTech (1.6%)
AdTech (18.9%)
Apr 14 May 14 Feb 15 Jan 15 Dec 14 Nov 14 Oct 14 Aug 14 Jul 14 Jun 14 Sep 14 Mar 15
Note: Based on share prices as at 31st March 2015
Note: Indices weighted by market capitalisation
Sources: Capital IQ and Results analysis
(73.8%)
(2.6%) (9.0%)
2.9%
(40.5%)
(23.7%) (16.7%)
(79.0%)
(17.3%)
(74.8%) (78.5%)
19.5%
(43.2%)
97.4%
(29.0%) (22.6%) (25.4%)
56.2%
(4.9%)
59.6%
(21.6%)
2.1%
(46.2%)
8.7% 3.3%
(10.3%)
10.6%
(9.5%)
4.4%
36.5%
(0.5%)
23.8%
(100%)
(80%)
(60%)
(40%)
(20%)
-
20%
40%
60%
80%
100%
120%
11.3%
(2.3%)
(6.8%)
2.9%
(25.7%)
(14.2%) (16.7%)
(9.4%)
(31.8%)
(39.0%) (42.9%)
11.0%
(18.5%)
(38.7%)
3.0%
(29.7%)
(5.8%)
4.1% 5.8%
18.7%
(21.7%)
(0.4%)
(8.8%)
3.6% 2.7% 1.1%
19.9%
(14.2%)
2.8% 5.4% 4.5%
(12.0%)
(50%)
(40%)
(30%)
(20%)
(10%)
-
10%
20%
30%
AdTech & MarTech: Share Price Performance
36
AdTech Diversified Internet
Q1 2
015
Last
12 m
on
ths
sh
are
pric
e p
erf
orm
an
ce
MarTech Data
Note: (1) MaxPoint Interactive IPO’d on 5th March 2015, this price represents the increase between that date and 31st March 2015
Note: (2) 2015E Net Revenue data is unavailable
Note: (3) These companies have IPO’d within the last 12 months, this price represents the increase between their respective IPO date and 31st March 2015
Note: Based on share prices as at 31st March 2015
Sources: Capital IQ and Results analysis
EV/2015E
Net Revenue 0.4x 6.6x 4.2x 4.4x 1.3x
(1)
1.7x 1.1x 1.6x 3.7x 0.7x 5.1x 1.3x 2.0x 1.6x 3.0x 9.0x 8.1x 12.1x 5.1x 1.5x 4.9x 4.1x 2.3x 1.7x 1.7x 3.6x 6.2x 8.0x 12.9x - 1.4x - (2) (2)
(3)
(3)
(3) (3)
(3)
(3)
(3)
(3)
AdTech & MarTech: Selected Stocks – Performance Since IPO
37
Company IPO date Description Raised
($) Indicative price
range ($)
IPO listing
price ($)
Day 1
increase
Current
increase(1)
Current
EV ($)
EV / Net
Revenue
2015E
EV / EBITDA
2015E
Mar-15 Hyperlocal ad targeting 75 10.5-12.5 11.5 (15.1%) (16.7%) 208 n.a. n.a.
Oct-14 Marketing automation 125 22.0-24.0 25.0 20.4% 59.6% 1,303 8.1x n.m.
Sept-14 Multi-channel ad server 75 n.a. 1.7 0.8% (9.0%) 164 n.a. n.a.
Jul-14 Programmatic video DSP
44 7.0-8.0 7.0 64.3% 97.4% 411 5.1x n.m.
Jul-14 Multi-channel ad network
70 n.a. 3.9 4.4% (23.7%) 287 4.4x 17.0x
Apr-14 SSP 102 15.0-17.0 15.0 33.9% 19.5% 659 3.7x 31.4x
Nov-13 Multi-channel network 33 n.a. 1.0 20.0% (72.0%) 46 1.1x 8.6x
Oct-13 DSP focused on retargeting
251 27.0-29.0 31.0 14.2% 27.4% 2,138 6.6x 30.9x
Sep-13 DSP 116 27.0-29.0 29.0 93.4% (68.3%) 367 1.6x n.m.
Aug-13 Video ad network 46 12.0-14.0 9.0 0.0% (42.3%) 109 1.3x n.m.
Jun-13 Video ad network 75 11.0-13.0 10.0 (15.0%) (76.6%) 42 0.7x n.m.
May-13 Marketing automation 79 11.0-13.0 13.0 77.7% 97.1% 1,047 5.1x n.m.
Nasdaq
LSE
NYSE
AIM
Nasdaq
Nasdaq
NYSE
NYSE
Nasdaq
AIM
NYSE
Note: (1) Current increase from IPO price; Market data as of 31st March 2015
Note: Calendarised to December year end; $ millions, except share price data; Multiples capped at 20x EV / Revenue and 60x EV / EBITDA
Sources: Capital IQ and Results analysis
NYSE
1.6 x
5.1 x
3.2 x
4.9 x
3.3 x
0.0 x
1.0 x
2.0 x
3.0 x
4.0 x
5.0 x
6.0 x
AdTech MarTech Data Diversified
Internet
Global AdTech/
MarTech
25.1% 26.3%
3.6%
11.9%
19.1%
-
5%
10%
15%
20%
25%
30%
AdTech MarTech Data Diversified
Internet
Global AdTech/
MarTech
AdTech & MarTech: Valuation Benchmarks
38
Revenue growth (2015-16E) EV / Net Revenue 2015E
(1) (1)
Note: (1) Global AdTech / MarTech represents the average of all stocks in AdTech, MarTech, Data & Diversified Internet, with no weighting applied
Note: EV = Enterprise Value; Financials calendarised to December year end
Note: Median values reported; exclude negative multiples
Note: See Selected Publicly Traded Companies (Slide 9) for details of companies included in each category
Source: Capital IQ & analyst reports
AdTech & MarTech: Global M&A Activity 2013-Q1 2015
39
Sources: Press Releases, Capital IQ, Mergermarket, 451 Research and Results analysis
54
43
74
52
108
101
113
106
98
-
$1bn
$2bn
$3bn
$4bn
$5bn
$6bn
$7bn
0
20
40
60
80
100
120
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015
Tota
l dis
clo
sed
de
al v
alu
e (
$b
n)
Nu
mb
er o
f d
ea
ls
Number of deals Total disclosed deal value ($bn)
AdTech & MarTech: Selected Deals in Q1 2015 Date Buyer Target EV ($m) EV / Revenue Company description Target location
Mar 15 100 4.3x Retargeting DSP
Mar 15 - - Cross-screen mobile DSP
Mar 15 - - Multi-channel optimisation & tracking mobile DSP
Mar 15 85 - Programmatic direct SSP
Mar 15 58 1.9x Mobile marketing optimisation
Mar 15 - - Personalised eCommerce search engine
Mar 15 - - Mobile ad network
Mar 15 195 5.6x DMP
Feb 15 - - Social commerce & networking
Feb 15 - - Creative optimisation & ad enablement
Feb 15 30 - App marketing SSP
Feb 15 - - Omni-channel shopper data & analytics
Feb 15 15 - Social media DSP
Jan 15 - - Data driven ad retargeting
Jan 15 - - eCommerce personalisation & recommendation
Jan 15 30 - Click-to-call mobile marketing & analytics
Jan 15 - - Ad exchange with DSP & SSP capabilities
Jan 15 125 6.3x B2B DMP
40
(1)
Note: (1) In certain cases EV/Revenue are estimates; TTM net revenues have been used where possible (gross revenues minus TAC generated in the last 12 months); EV = transaction value scaled to
100% shareholding plus net debt (incl. minority interest)
Sources: Press Releases, Capital IQ, Mergermarket, PitchBook, 451 Research and Results analysis
AdTech & MarTech: Selected Fundraisings in Q1 2015
Date Company Type of round Funds
raised ($m) Investor participation Company description
Company
headquarters
Mar 15 Series E 46 Battery Ventures, Intel Capital, and Iconiq Capital Social media management USA
Mar 15 Series B 24 Cheetah Mobile (lead investor), Avalon Ventures and Wellington
Management Co. Social and mobile ad automation USA
Mar 15 Series D 35 Sapphire Ventures (lead investor), Foundation Capital and Polaris Partners Mobile analytics & marketing for apps USA
Mar 15 Series D 130 Fidelity (lead investor), Wellington Management Company LLP, Credit Suisse
NEXT Investors, Venrock, Institutional Venture Partners and private investors Social media monitoring & analytics USA
Mar 15 Series C 45 Undisclosed Augmented reality mobile ads UK
Mar 15 Series C1 60 Alibaba (lead investor), SoftBank, GGV and Goldman Sachs Mobile app search engine USA
Mar 15 Series E 24 Silver Lake Waterman Social media listening & management USA
Feb 15 Series A 7 Highland Capital (lead investor), Endeavor Catalyst, Innova and NXTP Labs Data-driven mobile DSP UK
Feb 15 Series D 32 Adobe and Salesforce Ventures (lead investors), Cue Ball, Greycroft Partners,
Hillsven Capital and US Venture Partners Content curation USA
Feb 15 Series A 11 Octopus Investments and Notion Capital Social eCommerce UK
Feb 15 Series D 31 Georgian Partners (lead investors), Bain Capital, Battery Ventures, Tenaya
Capital and Presidio Ventures Tag management USA
Feb 15 Series C 16 Frog Capital (lead investor), Bertelsmann Digital Media Investments,
Greycroft, Sussex Place Ventures and Silicon Valley Bank Affiliate marketing UK
Feb 15 Series E 117
Fidelity Management and Research Company (lead investors), Marker
Financial Advisors, Steadfast Capital, Advance Publications, Comcast
Ventures; Groupe Arnault, Yahoo Japan and private investors
Content recommendation engine Israel
Jan 15 Series B 27 Icon Ventures (lead investor), Performance Equity Management and Accel
Partners Mobile app ad campaign analytics USA
Jan 15 Series B 21 StarVest Partners (lead investor), Citi Ventures, American Express Ventures and
Bain Capital Partners Marketing automation USA
Jan 15 Series B 20 Fidelity Growth Partners Europe (lead investor), Magma Venture Partners and
Pitango Venture Capital In-app mobile ad analytics Israel
Jan 15 Series D 55 Institutional Venture Partners (lead investor), Sequoia Capital, Greycroft
Partners and IDG Capital Partners App data & analytics USA
Jan 15 Series C 14 Gimv, Partech and Elaia and BPI Video SSP France
41 Notes: (1) Raised a total €12m Series C from the above investors and £10m from Bank of China, HSBC, BNPP and BPI
Source: Press Releases, Capital IQ, Mergermarket, PitchBook and Results analysis
(1)
AdTech & MarTech: Selected Publicly Traded Companies
42
Source: Capital IQ, Market Data as of 31 March 2015. Note: Calendarised to December year end. Cap multiple at 20x EV/Revenue and 60x EV/EBITDA. Net debt is inclusive of minority interest and preferred equity. Net revenues have been used where appropriate. Blinkx - financials taken from Numis (May 2014) & checked against company's financial results, market data taken from CapitalIQ; Criteo – financials taken from Jefferies (Feb 15) & checked against company's financial results, market data taken from CapitalIQ; Marimedia – financials taken from N+1 Singer (Mar 15) & checked against company's financial results, market data taken from CapitalIQ; Matomy Media - financials taken from Canaccord Genuity (Mar 15) & checked against company's financial results, market data taken from CapitalIQ; Millennial Media – financials taken from Evercore (Sep 14) & checked against company's financial results, market data taken from CapitalIQ; Rightster - financials taken from Cenkos (Sep 14) & checked against company's financial results, market data taken from CapitalIQ; Rocket Fuel – financials taken from BMO Capital Markets (Feb 15) & checked against company's financial results, market data taken from CapitalIQ; Tremor Video – financials taken from Jefferies (Feb 15) & checked against company's financial results, market data taken from CapitalIQ; TubeMogul – financials taken from BMO Capital Markets (Mar 15) & checked against company's financial results, market data taken from CapitalIQ; YuMe – financials taken from Deutsche Bank (Feb 15) & checked against company's financial results, market data taken from CapitalIQ; AOL – financials taken from Deutsche Bank (Feb 15) & checked against company's financial results, market data taken from CapitalIQ; Google – financials taken from RBC Capital Markets (Mar 15) & checked against company's financial results, market data taken from CapitalIQ; Yahoo! – financials taken from Deutsche Bank (Feb 15) & checked against company's financial results, market data taken from CapitalIQ
Valuation Metrics Operating Metrics
Price % of 52 Market Net Enterprise Net Revenue EBITDA Revenue Growth EBITDA Margin
Company (31-Mar-15) Week High Cap Debt Value CY2015 CY2016 CY2015 CY2016 CY14-15 CY15-16 CY2015 CY2016
AdTech
Blinkx plc 0.44 25.8% 176 (115) 62 0.4 x 0.4 x 1.5 x 1.2 x 16.3% 15.1% 30.2% 31.4%
Criteo SA 39.50 84.9% 2,435 (297) 2,138 6.6 x 4.5 x 30.9 x 20.3 x 69.6% 44.9% 21.2% 22.3%
Crossrider Plc 1.52 90.5% 240 (76) 164 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Marimedia Ltd. 2.10 80.0% 143 (25) 118 4.2 x 3.3 x 7.3 x 5.8 x 48.9% 25.1% 56.9% 57.3%
Marin Software Incorporated 6.29 49.7% 231 (65) 166 1.4 x 1.2 x n.m. n.m. 15.7% 17.0% (9.8%) (4.1%)
Matomy Media Group Ltd. 2.96 78.3% 281 6 287 4.4 x 3.7 x 17.0 x 8.8 x 20.3% 20.7% 26.2% 41.8%
MaxPoint Interactive, Inc. 9.58 85.2% 252 (44) 208 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Millennial Media Inc. 1.45 20.3% 202 (48) 153 1.3 x 1.1 x n.m. n.m. 12.5% 23.6% (31.5%) (7.9%)
Opera Software ASA 8.04 61.2% 1,147 (75) 1,072 1.7 x 1.3 x 8.1 x 5.9 x 29.4% 28.0% 21.3% 22.8%
Rightster Group Plc 0.27 22.5% 52 (6) 46 1.1 x 0.7 x 8.6 x 2.8 x 220.0% 44.1% 12.5% 26.3%
Rocket Fuel Inc. 9.20 21.0% 387 (20) 367 1.6 x 1.3 x n.m. n.m. 71.7% 21.2% (15.5%) (9.1%)
The Rubicon Project, Inc. 17.92 77.2% 757 (97) 659 3.7 x 2.9 x 31.4 x 17.7 x 40.9% 28.6% 11.9% 16.4%
Tremor Video, Inc. 2.34 47.0% 120 (78) 42 0.7 x 0.5 x n.m. n.m. 7.3% 33.9% (28.6%) (13.1%)
TubeMogul, Inc. 13.82 58.0% 456 (45) 411 5.1 x 3.8 x n.m. n.m. 114.0% 34.9% (1.1%) (25.3%)
YuMe, Inc. 5.19 69.7% 173 (64) 109 1.3 x 1.1 x n.m. n.m. 20.1% 13.3% (3.6%) (5.1%)
MarTech
Bazaarvoice, Inc. 5.65 60.2% 449 (48) 401 2.0 x 1.8 x n.m. 32.3 x 9.9% 11.3% (0.4%) 5.5%
Brightcove Inc. 7.33 67.1% 240 (21) 218 1.6 x 1.5 x 36.2 x 23.2 x 6.7% 8.7% 4.5% 6.5%
Constant Contact, Inc. 38.21 88.5% 1,308 (163) 1,146 3.0 x 2.5 x 15.2 x 12.0 x 17.0% 16.8% 19.5% 21.1%
Demandware, Inc. 60.90 85.0% 2,338 (243) 2,096 9.0 x 6.7 x n.m. n.m. 45.5% 33.6% 4.5% 7.7%
HubSpot, Inc. 39.90 90.0% 1,427 (124) 1,303 8.1 x 6.4 x n.m. n.m. 39.2% 26.3% (22.2%) (15.9%)
Marketo, Inc. 25.62 71.9% 1,153 (106) 1,047 5.1 x 3.9 x n.m. n.m. 37.1% 31.1% (17.3%) (9.4%)
New Relic, Inc. 34.70 89.8% 1,839 (205) 1,635 12.1 x 9.2 x n.m. n.m. 40.3% 31.2% (26.7%) (12.2%)
Data
Acxiom Corporation 18.49 51.7% 1,429 169 1,598 1.5 x 1.5 x 7.4 x 6.5 x 0.3% 3.8% 20.6% 22.7%
Alliance Data Systems Corporation 296.25 98.2% 18,649 13,333 31,983 4.9 x 4.4 x 16.5 x 14.5 x 23.2% 11.7% 29.6% 30.1%
Experian plc 16.59 91.4% 16,143 3,840 19,983 4.1 x 3.9 x 11.7 x 11.2 x 1.1% 3.5% 34.8% 35.0%
Teradata Corporation 44.14 89.0% 6,602 (366) 6,236 2.3 x 2.2 x 9.2 x 8.4 x (1.5%) 3.4% 25.3% 26.8%
Diversified Internet
Amazon.com Inc. 372.10 95.6% 172,946 (1,327) 171,619 1.7 x 1.4 x 20.6 x 16.0 x 15.2% 17.5% 8.1% 8.9%
AOL Inc. 39.61 79.4% 3,202 (27) 3,175 1.7 x 1.8 x 7.7 x 7.2 x (0.9%) (3.0%) 22.7% 24.8%
eBay Inc. 57.68 94.7% 70,181 (2,471) 67,710 3.6 x 3.2 x 11.4 x 10.3 x 6.0% 10.8% 31.2% 31.2%
Facebook, Inc. 82.22 95.5% 231,126 (10,966) 220,160 12.9 x 9.7 x 21.1 x 16.0 x 37.4% 32.2% 60.9% 60.6%
Google Inc. 554.70 91.1% 379,997 (54,618) 325,379 6.2 x 5.4 x 12.3 x 11.1 x 22.1% 13.0% 49.9% 49.1%
Yahoo! Inc. 44.44 84.4% 41,835 (6,734) 35,101 8.0 x 8.1 x 46.8 x 55.3 x (0.6%) (2.1%) 17.0% 14.7%
25th percentile 1.6 x 1.4 x 8.3 x 7.1 x 7.9% 11.4% (3.0%) (4.8%)
Median 3.3 x 2.7 x 12.3 x 11.2 x 20.2% 19.1% 14.8% 18.8%
75th percentile 5.1 x 4.3 x 20.9 x 16.5 x 40.0% 30.5% 25.9% 29.3%
43
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