Corum Webinar 01-18-2007

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THE GLOBAL LEADER IN SOFTWARE M&A

AN M&A UPDATE

2006 Software M&A Reviewand 2007 Outlook

Corum Group Ltd.

www.corumgroup.com

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Opening Remarks - Corum

M&A Market Overview

Market Trends

IPO Market

International Public Markets

Valuations

Top Buyers & Active Sectors

Corum Q4 M&A Briefing Release

Agenda

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Corum Group

M&A specialists since 1985

Software and IT experts mostly former CEOs

Dominant North American and European presence 200+ transactions completed

$6 Billion in wealth created

55+% cross-border transactions

Recognized industry leaders/experts Sponsor of Selling Up Selling Outconferences

Sponsor of World Financial SymposiumsConferences

Publisher of industry leading M&A research

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Headlines Tell the Story

Private Equity Fueling BuyoutsAssociated Press, December 2006

2006 - Bubble 2?Seattle Times, December 2006

Hong Kong tops New York this year in IPOsNew York Times, December 2006

Money is everywhere but for how long?Wall Street Journal, January 2007

Wall Street Bonuses so much money too few

FerrarisNew York Times, January 2007

Can M&As Best Times Get Better?Wall Street Journal, January 2007

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Surge in M&A Continues

2006 vs 2005 - M&A up 30+% worldwide / all industries

2006 $3.7 Trillion in worldwide M&A

2000 $3.4 Trillion in worldwide M&A

Europe $1.43 Trillion in 2006 (up 39% vs. 05)

US $1.56 Trillion in 2006 (up 36% vs. 05)

Source: Thomson Financial

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Software and IT M&A Activity

# of Transactions by Sector

0%5%

10%15%20%

25%30%35%40%

45%

Digit

alMe

dia

Ente

rprise

App

licati

ons

Ente

rprise

Infra

struc

ture

Gami

ng

Intern

et

Intern

etInf

rastr

uctur

e

Intern

etPu

rePla

ys

ITSe

rvice

s

Secu

rity

Wire

less

Vertic

alMa

rkets

2005 % Deal Volume 2006 % Deal Volume

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Software and IT M&A Activity

Transaction Value by Sector

0%

10%

20%

30%

40%

50%

60%

DigitalM

edia

Enter

prise

Applic

ation

s

Enter

prise

Infrastr

uctur

e

Gami

ng

Intern

et

ITS

ervic

es

Secu

rity

W

ireles

s

Vertical

Marke

ts

2005 % Deal Value 2006 % Deal Value

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M&A Is the Primary Source of LiquidityIn Dollar Volume US dollar volume all industries

$0$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

$1,100

$1,200

$1,300

$1,400

$1,500$1,600

$1,700

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

In

Bi

llion

M&A Dollar Volume IPO Amount Raised

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Slow IPO Market is Recovering

Source: D&B

IPO data all industries

December most active IPO month since 1999

2006 much stronger than 05

Venture-backed technology deals returned to the IPO scene

Eleven technology IPOs in Q4 - up from three in Q3

Q4:05 Q4:06 % Change

# of IPO Pricings 48 82 70.83%

Total Value $7,000 $16,100 130.00%

Average Value $145 $196 35.17%

Values are in millions

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Surge in M&A - Deal Drivers

Enormous liquidity (equity and debt)

Strong stock markets

Recovery in IPOs

Analysts favorable to acquisitions

Private Equity in 25% of deals

Converging market sectors

Heavy competition for market leadership

Strength of Euro / British Pound

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M&A Dominant Corporate Strategy

Support for acquisitions is stronger than ever:

Immediate impact on top/bottom line

Stimulate growth in new or existing markets Counter takeover attempts

Speed time to market

Forestall competitive threats

Gain talent, brand and domain expertise

Fill product and technology gaps

Tap into emerging markets

Provide pathway to a global presence Gain access to innovation

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Global M&A Activity

Cross-border transactions increasing

European deal activity was up 39% in 2006

Of European buyers, the United Kingdom was the most activeglobally with $339 billion of transactions

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Global Marketplace

64% of Corums recent transactions have been cross-border A trend we are seeing throughout the industry

Cross Border64%

Intra-Country36%

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Corum Transactions (Partial 2006)

Carlyle Group / UC4 Software GmbH

Enterprise job scheduling and event-driven IT automation

NCR Corporation / IDVelocity

RFID infrastructure and process management software

WellPoint Systems Inc. / IDEAS International

Provider of accounting and campaign finance solutions for domestic and

multinational marketplace

NICE Systems / FAST Video Security

Developer of video systems for security and surveillance purposes

Blue Cross Blue Shield / REDmedic

Provider of a personal medical profile available to emergency personnel

via the internet

Thomson West / Cowles Legal

User-friendly solutions for estate planning and trust terminations

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Corum Transactions (More 2006)

Microsoft / iView Multimedia

Digital asset cataloging solution for creative professionals

Apax Partners / Plexus Systems On-demand manufacturing execution software (SaaS)

Rocket Software / Mainstar Software

Storage management and disaster recovery solutions for OS/390

environmentsGemcom Software / Surpac Minex Group

Mine planning, engineering, geology, surveying, mineral exploration and

resource modeling solutions for the mining industry

Harland Financial / Financialware, Inc. Enterprise Content Management system for banks and financial

institutions

MDA / Mindbox

Sophisticated decisioning software for mortgage banking

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Current Activity

With a strong 2006 completed, we enter 2007 with optimism

8 companies currently under Letter of Intent:

Enterprise Applications

Enterprise Infrastructure

Systems Management

Gaming and Entertainment

Vertical Markets

Specialty services Financial Services

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Public Markets Reaching New Highs

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Public Valuation Multiples

Sector Q4:05 Q1:06 Q2:06 Q3:06 Q4:06 Y on Y Q to Q

Digital Media 3.50 x 2.65 x 2.82 x 2.74 x 2.59 x

Enterprise Applications 3.19 x 2.91 x 4.27 x 4.35 x 4.43 x

Business Intelligence 1.36 x 3.10 x 2.15 x 2.87 x 3.03 xEnterprise Content Management 1.52 x 1.59 x 1.46 x 1.89 x 2.15 x

Supply Chain Management 1.70 x 1.82 x 1.58 x 1.60 x 1.89 x

Enterprise Infrastructure 2.20 x 2.15 x 2.36 x 2.40 x 2.77 x

Legacy Extention / SOA 1.40 x 2.72 x 2.59 x 1.36 x 1.70 x

Software Development Tools 2.34 x 1.95 x 1.44 x 1.88 x 1.71 x

Storage 3.17 x 2.81 x 2.43 x 2.66 x 2.98 x

Gaming 2.19 x 1.59 x 1.44 x 2.25 x 2.47 x

Internet Infrastructure 4.10 x 4.41 x 3.57 x 4.03 x 3.63 xInternet Pure Play 4.10 x 6.07 x 3.34 x 4.00 x 3.78 x

IT Services 0.74 x 0.85 x 0.78 x 0.84 x 0.80 x

Security 3.76 x 3.36 x 3.00 x 2.94 x 3.36 x

Wireless 2.85 x 2.18 x 2.28 x 2.07 x 2.34 x

Vertical Market - Engineering 3.00 x 2.61 x 2.71 x 2.69 x 3.06 x

Vertical Market - Financial Services 2.88 x 3.15 x 3.26 x 3.53 x 3.17 x

Vertical Market - Government 1.07 x 1.45 x 1.21 x 1.24 x 1.13 x

Vertical Market - Healthcare 2.36 x 2.54 x 1.98 x 2.69 x 2.36 xVertical Market - Other 2.51 x 2.63 x 2.63 x 1.75 x 2.02 x

Vertical Market - Telecom 2.37 x 2.52 x 2.02 x 2.12 x 2.10 x

TTM EV/S Multiples

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Public Multiples

Differ Dramatically by Sector

TTM EV/Sales Range

NicheApplications

1.00x 2.50x

SecuritySoftware

1.39x 7.83x

Financial Services

1.50x 4.00x

Software as aService

3.90x 9.49x

0

1x

2x

3x

4x

5x

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Looking Back Valuation Multiples

2.3

2.7 2.72.9

6.7

3.0

2.01.5 1.5

1.6 1.8 2.1 2.3 2.2 2.5 2.6

2.9 2.95

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

P/S

Multiple

1H

:98

2H

:98

1H

:99

2H

:99

1H

:00

2H

:00

1H

:01

2H

:01

1H

:02

2H

:02

1H

:03

2H

:03

1H

:04

2H

:04

1H

:05

2H

:05

1H

:06

2H

:06

M&A Transaction Multiples - Software Industry

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Top Buyers in 2006

100+ Strategic buyers with 2 to 4 transactions

Strategic Buyers Active Private Equity Firms*

Microsoft 16 Accel-KKR

IBM 13 Apax Partners

Oracle 11 Carlyle GroupEMC 9 Francisco Partners

Motorola 8 Golden Gate Capital

Jupitermedia 7 Silver Lake Partners

L-3 Communications 7 Symphony Technology Group

Sage Group 7 Thoma Cressey

Cisco Systems 6

NeoMedia Technologies 6

Yahoo 6 * Partial List

Accenture 5

Google 5

Kronos 5

Trimble Navigation 5

VeriSign 5

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Vertical Market Consolidation Fewer Buyers

Tougher to find buyers for smaller companies

Example: Financial Services Software Sector

Advanced Financial Solutions(Metavante 04)

BancTec (taken private WelshCarson PE 99)

Bisys Group (Open Solutions 05) Bottomline Technologies Carreker (Checkfree in 07) CheckFree Concord EFS (First Data 03) Digital Insight (Intuit 06)

First Data Fiserv Jack Henry

John Harland (M&F Worldwide 07) Kirchman (Metavante 06) Metavante Misys

Open Solutions (Carlyle 06) S2 Systems (Total Systems 05)) Sanchez (Fidelity National in 04) Sungard (taken private Silver

Lake Partners 05) Total Systems

TSA

2000 to 2006 - Key Buyers - 60% of list is gone

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Private Buyers

Number of private buyers increasing

Slow IPO market and high cost of being public

Cash and credit available to Private Equity

Financial buyers comfortable with technology deals

Notable companies going private in 2006 John H. Harland

Embarcadero

WatchGuard Technologies Sabre Holdings

Open Solutions

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Transaction Highlights Private Equity

Buyer Seller Value (Millions $) Sector

Silver Lake Partners Sabre Holdings $5,000 Vertical Market

Carlyle Group Open Solutions, Inc. $1,300 Financial Services

Silver Lake Partners IPC $800 Vertical Market

Thoma Cressey Embarcadero $234 Enterprise Infrastructure

Francisco Partners WatchGuard Technologies $151 Security

Insight Venture Partners Netsmart Technologies $115 Healthcare

Thoma CresseyVision Solutions, iTera and

Sirius Computer Solutions$100 Enterprise Infrastructure

Francisco PartnersEndeavor Information

SystemsUndisclosed Vertical Market

Carlyle Group / KennetPartners

FRS Global Undisclosed Vertical Market

Vista Equity Who'sCalling Undisclosed Enterprise Applications

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Transaction Highlights International


Publicis Group S.A. Digitas Inc $1,300 Internet Infrastructure

Check Point Software Protect Data AB $586 Security

ePLDT SPI Technologies $159 IT Services

Stepstone ExecuTRACK Software $41 Enterprise Applications

Yahoo! Inc. Wretch $22 Internet Pure Play

McAfee, Inc. Onigma $20 Security

Nokia Gate5 Undisclosed Wireless

Microsoft iView Undisclosed Digital Media

Tandberg Television Zetools Undisclosed Digital Media

Sage Group plc / SageSoftware Canada Ltd.

Corum Corporation(no relation)

Undisclosed Enterprise Applications

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Transaction Highlights Strategic


Google YouTube $1,650 Internet Pure Play

Intuit Inc Digital Insight $1,350 Financial Services

Trimble Navigation @Road Inc $496 Wireless

Oracle Stellent, Inc. $440 Enterprise Applications

Rocket Software Seagull Software $56 SOA

Corel Corporation InterVideo $196 Digital Media

Kronos Unicru $150 Enterprise Applications

Cisco System Arroyo Video $92 Digital Media

IBM Webify Undisclosed Enterprise Infrastructure

ADP Employease Undisclosed Enterprise Applications

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Active Sectors

Strong activity across all sectors in 2006

Outlook for 2007:

Enterprise Applications

Internet - Infrastructure and pure plays

IT Services

Security

Vertical market applications

Wireless technologies and infrastructure

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Corum Q4 Briefing SampleEnterprise Applications

Public Peer Group (In $U.S. millions except share prices)Stock Stock Market Enterprise

Symbol Company Price Value Value P/E EV/EBITDA EV/S P/E EV/S

CA CA, Inc. $22.79 $11,990.0 $13,290.0 126.6 x 16.07 x 3.43 x 22.56 x 3.29 xLWSN Lawson Software Inc. $7.45 $1,400.0 $1,120.0 -248.33 x 30.37 x 2.41 x 16.93 x 1.31 x

ORCL Oracle Corp. $17.21 $89,190.0 $87,210.0 24.59 x 13.40 x 5.43 x 15.50 x 4.47 x

QADI QAD Inc. $8.40 $271.5 $239.8 18.26 x 11.60 x 1.05 x 20.49 x 0.94 x

SAP SAP AG $53.16 $259,780.0 $255,910.0 118.13 x 69.92 x 21.08 x 24.73 x 19.27 x

CRM Salesforce.com $36.74 $4,170.0 $3,930.0 734.80 x 98.57 x 8.85 x 85.44 x 5.50 x

Median Valuation Multiples 71.36 x 23.22 x 4.43 x 21.53 x 3.88 x

Trailing Multiple Forward Multiple

M&A Transactions

Witness Systems Acquires Demos Solutions and Exametric, Inc.

Witness Systems, a global provider of workforce optimization software and services, announcedthat it has acquired Demos Solutions Consulting Group Ltd. (also known as Demos Solutions) andExametric, Inc., the two leaders in supplying enterprise productivity and resource planning solutions to thefinancial services industry. The acquisitions broaden the revenue opportunity and customer base forWitness Systems, further extending the business valu e of its workforce optimization solutions fromcontact centers to bank branches and ultimately to other areas in the enterprise. The two companies willbe combined and operate as Witness Enterprise Solutions, a group focusing initially on WFO Solutionsfor retail bank branches and operations.

Announcement: October 2 2006Deal Value: $29 Million (Cash plus potential earn out up to $18 million of next three years)

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Corum Q4 Briefing Sample (continued)Security

Public Peer Group (In $U.S. millions except share prices)Stock Stock Market Enterprise

Symbol Company Price Value Value P/E EV/EBITDA EV/S P/E EV/S

CHKP Check Point Software Tech Ltd. $22.08 $5,100.0 $3,910.0 18.54 x 11.91 x 6.85 x 15.33 x 6.35 x

ENTU Entrust Inc. $4.32 $259.1 $228.2 -25.41 x -67.32 x 2.48 x 54.00 x 1.94 xMFE McAfee Inc. $28.31 $4,520.0 $3,360.0 33.31 x 12.05 x 3.08 x 19.00 x 2.75 x

SFNT SafeNet Inc. $24.50 $518.3 $438.4 -2450.00 x 13.30 x 1.53 x 18.56 x 1.39 x

SCUR Secure Computing Corp. $6.64 $428.3 $512.1 -39.06 x 23.86 x 3.30 x 27.67 x 2.04 x

SYMC Symantec Corp. $20.87 $19,580.0 $19,110.0 51.92 x 12.66 x 3.89 x 16.56 x 3.36 x

VRSN VeriSign Inc. $24.23 $5,880.0 $5,340.0 9.01 x 12.90 x 3.42 x 21.83 x 3.47 x

WBSN Websense Inc. $22.88 $1,020.0 $721.4 30.51 x 11.31 x 4.18 x 21.79 x 3.43 x

Median Valuation Multiples 13.77 x 12.35 x 3.36 x 20.40 x 3.06 x

Trailing Multiple Forward Multiple

M&A Transactions

McAfee, Inc. To Acquire Citadel Security Software Inc.

McAfee, Inc. will acquire Citadel Security Software Inc., a leading provider of solutions in security policycompliance and vulnerability remediation. Security risk management is emerging as a high growthopportunity. The acquisition will add to McAfee's suite of products that help enterprises neutralize securityvulnerabilities and reduce risk, giving McAfee a broader capability for security policy complianceenforcement and vulnerability remediation. Highly regulated enterprises, including government and

health-care customers, will especially benefit as McAfee integrates Citadel's automated solutions thathelp enterprises comply with regulatory requirements and internal policies, speed their complianceprocess and minimize threat exposure.

Announcement: October 3 2006Deal Value: $56.15 Million (Cash, plus an estimated $4 million in working capital reimbursement)Seller Revenue: $14.24 ttm

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Corum LinksVIP Pass for Corum's Selling Up Selling Out Conference

To take advantage of the special VIP offer for this webinars attendees:

1) Go to Corum's conference registration page athttps://www.corumgroup.com/ConferenceRegistration.asp

2) Select the conference you wish to attend

3) Enter your Contact Information

4) Enter Promo Code of webjan"

5) Check box "I prefer to be called for payment information." You will not be contacted forpayment information.

You will receive a complimentary VIP Pass to the conference.

Corum M&A Report

http://www.corumgroup.com/ResearchAndReportsregistration.asp

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Contact Information

Corum Group Ltd.10500 NE 8th Street, Suite 1500

Bellevue, WA 98004USA+1 425-455-8281

Corum Group International S..r.lGeneral Guisan Quai 30CH-8002 ZurichSwitzerland+41 1 251 82 65

www.corumgroup.com

Corum Webinar 01-18-2007

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