How to Create Value Through Mergers & Acquisitions

CLOUDOPS SUMMIT 2013 PAGE 1

“How to Create Value Through Mergers & Acquisitions”

25th September 2013

Case Study


Decisive Market Leader in Performance-Based Multichannel Commerce

Company Overview (pre Transaction)

� ZANOX.de AG (www.zanox.com) is headquartered in Berlin/

Germany and was founded in 2000 by former Management Team

Thomas Hessler, Heiko Rauch and Jens Hewald. The Company has

>200 employees worldwide. Besides subsidiaries in Europe, zanox

has sales offices in Shanghai and in Chicago covering the Asian

and US markets.

� zanox XS is the Company’s global solution for efficient product

and service marketing via the Internet, comprising multi channel

sales solutions, partner relationship management solutions,

customer loyalty/ club solutions, search engine marketing/ online

product placement solutions and permission marketing solution

� The Company has a pool of >1,000,000 partners in more than 30

countries. Customers (e.g. advertising companies, online-shops)

choose the most appropriate sales partners out of this pool. For

each program, zanox generates 10-100 million PIs per month.

� Reference customers of zanox include: Procter & Gamble,

Vodafone, AXA, Citibank, Expedia, Allianz, Lycos, Amazon, Sixt,

DaimlerChrylser, Jamba! and Staples.

Management team 45%

Financial investor 40%

Mgmt of acquired businesses 10%

Others 5%

Total 100%

Shareholder Structure (pre Transaction)

In EUR m 2001 2002 2003 2004 2005 2006 2007e

Gross

Sales1 3 7 15-20 40-45 >100 >160

EBITDA

margin5-10% 5-10% 5-10% 5-10% 5-10% 8-12% 10-13%

Key Financials


Well Established, Attractive Asset in The Online Marketing Sector

Dec 2004 Successful closing of EUR 15 million financing round

Jul 2005 Acquisition of First-Coffee, top three affiliate marketing

player in the French market (geographic expansion)

May 2006 Acquisition of zanoxHispania (geographic expansion; former

franchise of zanox)

Jun 2006 Acquisition of eprofessional GmbH (acquisition of product

know-how and gain access to strong client base; cross selling

potential)

2005-2007 Foundation of several subsidiaries and offices e.g. in

Chicago/ USA, Shanghai/ China, London/ UK, Milan/ Italy and

Amsterdam/ the Netherlands

Aug 2007 Decision to start “Sales Process”

M&A Milestones

Together with Corporate Finance Partners, zanox grew strongly

(organic and inorganic)

� Leading Global Infrastructure Provider for Performance based

Multichannel e-Commerce

� Highly Motivated Management Team and Skilled Organization

� Unrivalled, Award winning Technology and Products

� >1,000 Renowned Blue-Chip Customers including Top 10 European e-

Commerce companies

� Global Network of > 1,000,000 Direct and Indirect Publishers with

various Websites and Advertising Spaces

� Well known brand and position in Europe

� Presence at 4 Continents and in 30 Countries

� Great Scalability of Business Model

� Proven Profitability and Annual Historic Growth of more than 100%

per Year

� Strongly Growing e-Commerce and Online Marketing Sector on

European and Global Scale

Excellent Market Position and Attractive Business Model


Decision to Execute “Triple Track Process” For Optimum Result

…

…

…

1. Sale to strategic Investor

2. Sale to financial Investor (part sale/ part capital increase to consolidate the market)

3. Initial Public Offering


Feedback From Interested Parties

Strategic Investors Financial Investors IPO

Number of Parties approached: 30

NDAs received/ IM sent: 18

Number of Mgmt.Pres.: 9

Number of LOIs received: 5

Initial Valuations: EUR 140-220 million



Number of Mgmt.Pres.: 4

Number of LOIs received: 3




Number of Pitches: 7


…

� Based on the valuations received, shareholders’/ management’s intentions and with regard to uncertain capital market

conditions, the management together with Corporate Finance Partners decided to pursue the 100% sale to a strategic

investor by concurrently pushing the IPO route as an alternative, back-up scenario.

� After negotiations with the two most promising parties and increasing valuation to EUR 260-290 million (incl. earn-out),

zanox granted data room access to the two most promising parties.

Prio 1 Prio 3 Prio 2


Timetable zanox

Aug 2006 Sep 2006 Oct 2006 Nov 2006 Dec 2006 Jan 2007 Feb 2007 Mar 2007 Apr 2007 May 2007 Jun 2007 Jul 2007

Preparation long list/ short list

Due date NDA

Preparation information memorandum

Due date LOI

Preparation teaser documents

(introductory letter, company profile, NDA)

Roll-out to potential investors

Preparation management presentation

Management meetings

Distribution of IM

Negotiation LOIs

Preparation data room

Due diligence

Drafting/ negotiation transaction documents (SPA, Bye-Laws etc.)

Signing of transaction documents

Closing of transaction (Antitrust approval etc.)

Confirmatory Due Diligence

Trade Sale of ZANOX.de AG to

consortium of Axel Springer AG and

PUBLIGroupe AG for EUR 215 million

in cash at closing and additional up

to EUR 80 million via three years

earn-out


Value Creation zanox

0

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100

150

200

250

300

350

Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007

EU

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zanox Today

� Since the acquisition of zanox by Axel Springer &

PUBLIGroupe, the Company advanced further (through

organic and inorganic growth) as the clear European

Market Leader in Performance Advertising

→ Acquisition of UK-based Digital Window incl.

buy.at (2009/ 2010) and Netherlands-based

M4N (2011)

→ Opening of Offices in Warsaw/ Poland (2008),

Istanbul/ Turkey (2011), Sao Paolo/ Brazil (2011),

Zurich/ Switzerland (2012)

� As of today, the Company has offices in 12 countries

worldwide with more than 600 employees

� The Company’s network, comprising 4,000 advertisers, generated a gross sales volume of EUR 5bn in 2011

� In 2011, the Company’s revenues increased 19.5% compared to 2010 to EUR 439mn, two thirds of revenues are generated

outside German speaking countries

� Especially the expansion to emerging markets such as Poland, Turkey and Brazil fosters the Company’s growth

zanox’ Global Locations


zanox’ Founder Team Today

� The founder Team of zanox left the Company

beginning of 2010 to focus on “Globumbus” (founded

by them in 2007), a Silicon Valley and Berlin based

non profit foundation to foster entrepreneurship

� As evangelists of entrepreneurship and crowd-

sourcing, they designed global crowdsourcing network

“UFOstart” (a product of Globumbus) connecting

startups and investors in a new way

� UFOstart connects startups, entrepreneurs, talents

and investors in a quarterly cycle - experts and

investors evaluate ideas and bid tasks or funds for

equity

� It provides immediate feedback from experts and

markets and gives freedom to pivot. The “work for

equity” premise can reduce funding needs in cash

significantly

“We believe passionately in the innovative power of the

entrepreneur, and offer infrastructure to empower anyone with a

great idea to set up, grow and manage a new company in the

fastest and most scalable way.”


Corporate Finance Partners (“CFP”) provides corporate finance advisory services with focus on

Mergers & Acquisitions and Private Equity & Venture Capital placements

Since inception in Germany in 1998, CFP has successfully executed more than 200 M&A, Private

Equity and Venture Capital transactions in the Internet, media, telecommunications and

technology sectors

CFP is the leading European tech & Internet corporate finance advisor and is synonymous for

expertise and execution in mid-cap cross-border transactions

With its 10 offices on 3 continents CFP is advancing into the top five of global tech M&A firms

As an independent advisory company with no banking or brokerage operations, CFP is free of

conflict of interests and fully focused on optimizing its clients’ processes and results

CFP strives to develop and maintain long-term relationships with its clients offering them

comprehensive, high quality, innovative and customized services to accomplish their current &

future objectives

CFP is a reliable partner providing corporate finance advisory along the clients’ development

over the years

Targ

ets

Acq

uir

ers

CFP | Introduction


InternationalPresence

� Europe: Berlin, Budapest, Frankfurt and Vienna

� USA: New York and San Francisco

� Asia: Beijing, Hong Kong, Shanghai and Tokyo

Deep IndustryKnowledge

� 15 years of focused tech M&A advisory

� Unique network including senior industry managers, developers and talented entrepreneurs

� Global network of financial & strategic investors and advisers

DiverseTeam

� 50 professionals worldwide

� 10 nationalities

� 14 languages

OutstandingTrack Record

� Unique sell-side track record achieving matchless high valuations

� Strong expertise selecting the most suitable targets and negotiating smart deals

� More than 200 executed transactions

� 50% cross-boarder transactions

CFP | Competitive Advantage


*Partner Offices

� CFP in Germany operates from

two offices:

• Frankfurt,

Germany’s financial center,

• Berlin,

center of gravity for

Internet/ technology in

Europe

� CFP’s international offices are

located in New York, San

Francisco, Tokyo, Vienna and

Budapest

� In 2012, CFP added partners

and offices in Shanghai,

Beijing and Hong Kong

providing CFP’s clients access

to a strong global advisory

platform

CFP | International Presence

� With 10 Offices on 3 Continents, CFP is advancing into the Top 5 of Global Tech M&A Firms


Euro

pea

n T

eam

Andreas Thümmler

Founder & Managing DirectorFounder and Managing Director venturecapital.de

UBS Warburg, Rothschild

Degree in computer science & business administration, European Business School

Daniel Schenk

Managing DirectorLincoln International, Compass Advisers New York, ING Barings

Degree in economics, ESB Reutlingen/ EcoleSuperieure de Commerce Reims

Berend Yntema

Managing DirectorDirector at the Central & Eastern European investment banking boutique EPIC

Expert for corporate finance transactions in Central & Eastern Europe

Masters in Economics from the University of Groningen

Kai-Peter Burger

Managing DirectorWaterhouse focusing on energy, banking industry and business valuations

Central & Eastern European Investment boutique EPIC

Vienna University of Economics and Business Administration (WU), studied finance at HEC in Paris

Oliver Nemes

Managing DirectorOver 15 years of M&A experience in Central & Eastern Europe

Price Waterhouse (London, Vienna) and EPIC (Vienna)

Degree in Business Administration, European Business School London

Euro

pea

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eam

Klaus Nestler

Managing DirectorWorked for more than 10 years with UBS Warburg

Specialized in Corporate Finance and cross-border M&A transactions

Masters Degree in Economic Sciences

Bio

Co

nn

ect

CFP | Senior Management Team


Michael Mildenberger

Managing DirectorCo-Founder and CEO of Wireless Fire LTD

Co-Founder and CEO of aeonware AG

MSc Economics Eberhard Karls University

Giovanni Soleti

Managing DirectorCo-founder and board member of aeonware AG

Wireless Fire, the US subsidiary of Wapme Systems

Advisor to Mobzilla

Lan The Hoang

Managing DirectorCo-Founder and CEO of Aeria Games & Entertainment

Founder and President of Asia Commerce Limited, Director at Japan Internet.com

Attorney at Orrick, Herrington & Sutcliffe LLP

Yusuke Kobayashi

Managing DirectorCo-Founder and co-CEO of Aeria Inc

Board member of Aeria Games & Entertainment (USA)

Board member of Akatsuki Financial Group, Inc

Am

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eam

Asi

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CFP | Senior Management Team (cont.)

How to Create Value Through Mergers & Acquisitions

Technology

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