Q2 2013 exit report final

Embedded Specialized Accomplished

Digital Media and Software

M&A and Private Placement Activity

Q2 2013

2 Q2 2013 IN REVIEW

Digital Media and Software M&A and Private Placement Activity

Table of Contents

Section I Summary Observations

Section II M&A Activity

Section III Private Placement Activity

Section IV Trends & Outlook

Section V Public Company Valuation Metrics

SUMMARY OBSERVATIONS

4 Q2 2013 IN REVIEW


Summary Observations Global Digital Media deal activity has seen another quarter of declines while the Software sector has seen the

number of private placements grow

Source: Siemer & Associates’ proprietary research database

Despite a flurry of headlines highlighting large acquisitions made by buyers such as Yahoo! (Tumblr) or Google

(Waze), data on global Digital Media and Software M&A and Private Placement activity points to generally lower deal

activity relative to last year

Global Digital Media and Software M&A has now seen two consecutive quarters of declining deal activity and values

― Digital Media M&A declined quarter-over-quarter in Q2 2013 by 14.2% in terms of number of deals and by 26.6% in terms of

median deal value

― Software M&A declined quarter-over-quarter in Q2 2013 by 8.7% in terms of number of deals and by 8.8% in terms of median

deal value

Global Digital Media Private Placements have also seen two consecutive quarters of declining deal activity and size

― Declined quarter-over-quarter in Q2 2013 by 6.9% in terms of numbers of deals and by 19.5% in terms of median size of

round

Global Software Private Placements, however, have seen a strong increase in number of deals by 32.3% quarter-

over-quarter – while at the same time showing a decrease of nearly a third in terms of median round size

― These trends are consistent with what we see as a growing shift in VC interest away from B2C and Consumer Internet

investments and toward B2B and Software investments

― Anecdotal evidence points toward very healthy M&A and capital raise advisory activity at investment banks focused on the

Software sector

5 Q2 2013 IN REVIEW


Summary Observations (cont.) Trends seem to indicate that capital is increasingly flowing into earlier stage startups, with fewer companies

making it to pre-IPO rounds; large strategic buyers increasingly opting to acquire at an earlier stage


Regarding smaller private placement deal sizes, we believe this is due to a combination of factors:

― Companies requiring less and less capital to start up in today’s environment

― Bifurcation of the market where more capital is flowing into earlier stage startups while fewer and fewer companies desire or

make it to the point of being able to raise a large, pre-IPO round

― Trends point toward large strategic buyers increasingly opting to acquire at an earlier stage in a company’s development –

both in Media and in Software

― In regards to software, there is a growing trend to see startups grow to $2 - $3 mm in revenue, prove out client adoption and

scalability of a desirable point solution or feature, and sell to one of the large strategics at that point before the company

becomes “expensive”

Channel checks with generalist M&A lawyers and private equity firms indicate that deal flow has been somewhat

weaker in Q1 and Q2 2013 relative to last year

― However, early stage tech-focused lawyers and venture capital firms seem to have remained “busy”

― There is a perception that there has been a lot of “market check” exploration by sellers and “sniffing around” by strategic

buyers which has not translated into completed deals per se – at least not yet

M&A ACTIVITY

7 Q2 2013 IN REVIEW


Transaction and Valuation Overview by Sector

Source: Capital IQ and Siemer & Associates’ proprietary research database

Global Digital Media M&A Global Software M&A

Global Digital Media M&A activity decreased in Q2 2013 by 14.2% and the median implied EV decreased by 26.6%

from Q1 2013. As for global Software M&A, transaction activity decreased by 8.7% while the median implied EV

decreased by 8.8% during the same period.

401

364

404

323

277

$7.2

$5.1

$11.5

$9.4 $6.9

$0

$5

$10

$15

$20

0

100

200

300

400

500

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013

Med

ian Im

plied

EV

(Disclo

sed V

alues in

mm

US

D)

Nu

mb

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ran

sact

ion

s

Number of Transactions Median Implied EV

502

537

509

446

407

$12.1 $11.7

$15.2

$10.2 $9.3

$0

$5

$10

$15

$20

0

100

200

300

400

500

600

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013

Med

ian Im

plied

EV

(Disclo

sed V

alues in

mm

US

D)

Nu

mb

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Number of Transactions Median Implied EV

8 Q2 2013 IN REVIEW


M&A Multiples by Sector


Both Digital Media and Software EV / Revenue multiples increased during Q2, by 55.6% and 60.0%, respectively.

Digital Media EV / EBITDA multiples decreased by 25.9% over the prior quarter, while Software multiples

increased by 27.4%.

Global Digital Media M&A Global Software M&A

1.4x 1.6x 2.0x

0.9x 1.4x

9.2x

11.0x

10.3x

8.1x

6.0x

0.0x

5.0x

10.0x

15.0x

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013

Med

ian

Dis

clo

sed

Mu

ltip

les

EV / Revenue EV / EBITDA

1.4x 1.9x

1.4x 1.0x 1.6x

8.5x

12.2x 12.5x

8.4x

10.7x

0.0x

5.0x

10.0x

15.0x

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013

Med

ian

Dis

clo

sed

Mu

ltip

les

EV / Revenue EV / EBITDA

9 Q2 2013 IN REVIEW


Number of M&A Deals by Geographic Location


Global M&A across Digital Media and Software decreased 11.1% QoQ, with transaction volume decreasing 11.9%

and 5.6% across North America and Europe, respectively.

438

290

133

42

469

294

97

41

478

282

117

36

413

223

93

40

364

210

84

26 0

100

200

300

400

500

600

North America Europe Asia / Pacific Other

Nu

mb

er o

f T

ran

sact

ion

s

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013

10 Q2 2013 IN REVIEW


Digital Media Software

Q2 2013 deal concentration in Digital Media was led by Internet Media and eCommerce while Productivity

Software drove nearly 22.1% of Software M&A activity.


Number of Q2 2013 M&A Deals by Subsector

45

69

18

119

12 14

Advertising eCommerce

Gaming Internet Media

Mobile Web / Domain Hosting Services

120

46

64

90

87

Misc. Software Mobile

Networking Software Productivity Software

SaaS



Q2 2013 Global M&A Sector Overview & Highlights

Sector Deal Metrics Select Notable Transactions

Digital Media

Volume: 277

Value: $5.5bn

Mean EV: $84.6mm

Median EV: $6.9mm

Software

Volume: 407

Value: $19.8bn

Mean EV: $240.0mm

Median EV: $9.3mm

Volume: Includes total number of reported M&A transactions

Value: Includes aggregate implied EVs of all reported deals with publicly available information

Mean and Median: Includes publicly disclosed M&A implied EVs only

$1.1bn $1.1bn $632.0mm $193.7mm

$150.5mm $94.3mm

$44.8mm $48.4mm $35.0mm

$370.0mm

$2.4bn $8.4bn $2.0bn

$607.8mm $600.0mm $336.3mm $205.0mm $322.4mm

$611.6mm $3.9bn



Q2 2013 Acquisitions

Q2 2013 Leading Acquirers by Sector

Digital Media

Software

2013 YTD Acquisition Total

2013 YTD Acquisition Total


Q

Q2 2013 Acquisitions

5

4

4

5

4

4

12

5

6

6

4

3

2 2 2

6

3 3

2 2



M&A Deals by Buyer Type Transactions by Strategic vs. Financial Buyers in the Digital Media and Software sectors

Note: Includes total number of reported M&A transactions


852 859 862

730

615

51 42 51

39

30

0

200

400

600

800

1000

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013

Nu

mb

er o

f Tr

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ns

Strategic Buyer Financial Buyer

PRIVATE PLACEMENT ACTIVITY



Private Placement Overview and Valuation by Sector


Global Digital Media Private Placement Global Software Private Placement

Global Digital Media Private Placement (PP) activity decreased in Q2 2013 by 6.9% and the median implied

investment size decreased by 19.5% over Q1 2013. As for Software, transaction activity increased by 32.3%

while the median implied investment size decreased by 32.8% during the same period.

1,202

1,096

1,280

859 800

$6.2

$9.9

$4.7

$4.1

$3.3

$0

$2

$4

$6

$8

$10

0

200

400

600

800

1,000

1,200

1,400

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013

Med

ian Im

plied

Investm

ent (D

isclosed

Valu

es in m

m U

SD

)

Nu

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Number of Transactions Median Investment

452

418 423

470

622

$9.7

$6.0 $6.4

$5.8

$3.9

$0

$2

$4

$6

$8

$10

0

100

200

300

400

500

600

700

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013

Med

ian Im

plied

Investm

ent (D

isclosed

Valu

es in m

m U

SD

)

Nu

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Number of Transactions Median Investment



Number of Private Placement Deals by Geographic Location


Global PP across Digital Media and Software increased 7.0% QoQ, with transaction volume increasing 1.8% in

North America and 14.1% in Europe.

1066

352

173

63

949

325

176

64

982

447

191

83

835

284

145

65

850

324

159

89

0

200

400

600

800

1,000

1,200

North America Europe Asia / Pacific Other

Nu

mb

er o

f T

ran

sact

ion

s

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013



Digital Media Software

Q2 2013 PP activity in Digital Media was largely led by Internet Media, while Software-as-a-Service investments

drove over 28.8% of Software PP activity.


Number of Q2 2013 Private Placement Deals by Subsector

85

167

49 390

96 13

Advertising eCommerce

Gaming Internet Media

Mobile Web / Domain Hosting Services

194

98

53

98

179

Misc. Software Mobile

Networking Software Productivity Software

SaaS



Q2 2013 Global Private Placement Overview & Highlights

Sector Deal Metrics Select Notable Investments

Digital Media

Volume: 800

Value: $3.5bn

Mean Size: $5.7mm

Median Size: $3.3mm

Software

Volume: 622

Value: $3.1bn

Mean Size: $5.4mm

Median Size: $3.9mm

Volume: Includes total number of reported PP transactions

Value: Includes aggregate implied Investments of all reported deals with publicly available information

Mean and Median: Includes publicly disclosed Private Placement investments only

$170.0mm $250.0mm $130.8mm $100.0mm

$100.0mm $83.2mm $60.0mm $68.0mm $60.0mm

$130.0mm

$105.1mm $225.0mm $100.0mm $50.0mm

$50.0mm $50.0mm $45.0mm $45.0mm $38.0mm

$70.0mm

$64.4mm

http://www.crunchbase.com/financial-organization/sv-angel



Q2 2013 Private Placement Deals by Investor Type Investments by Strategic vs. Financial Investors in the Digital Media and Software sectors

Note: Includes total number of reported PP transactions with buyer information


86 104 116 82 81

902

780

913

731 720

99

80

101

43 72

0

200

400

600

800

1000

1200

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013

Nu

mb

er o

f Tr

ansa

ctio

ns

Strategic Investor Financial Investor Combination

TRENDS & OUTLOOK



Digital Media

Compared to the first half of 2012, the number of M&A

deals for B2C online media and technology dropped

slightly by 10.0%

The decline in overall M&A activity in Q2 2013 has

been masked by headline deals such as

Yahoo!/Tumblr and Google/Waze

Yahoo!’s $1.1bn acquisition of Tumblr connects the

Internet giant to large online communities by targeting

the younger generation of digital media users

Google’s $1.1bn acquisition of Waze allows for the

integration of social navigation in Google’s product

offerings while solidifying its position as a global

leader in the mobile mapping sector

Alibaba Group’s $586.0mm acquisition of an 18.0%

stake in Weibo gives it entrance into the social media

scene and access to the microblogging platform’s data

Software

Cloud computing and the ability to leverage big data in

the cloud continues to be a big driver of Software M&A

activity

Salesforce.com’s $2.4bn acquisition of ExactTarget

combines two leading software companies, bolstering

Salesforce.com’s Marketing Cloud platform with

marketing automation and email marketing capabilities

IBM’s acquisition of cloud computing infrastructure

provider SoftLayer Technologies diversifies IBM’s

cloud offerings for enterprise planning

Service Link’s acquisition of Lender Processing

Services Inc. (LPS) expands Service Link’s ability to

offer mortgage analysis services through integrated

support and solutions, indicative of how certain service

providers are repositioning themselves as technology

platforms

Q2 2013 Features & Trends




M&A and Private Placement Outlook Due to a rising public equity market and higher domestic growth rates, strategic buyers are actively seeking

acquisitions that provide access to supplementary revenue streams


Deal activity in Q2 2013 was primarily driven by small transactions in which companies looked to acquire talent and

bolt-on technologies to grow their existing businesses

― Strategic acquirers continue to look for targets with complimentary technologies, access to data and / or tools or content

platforms

For the remainder of 2013, deal flow across the Digital Media and Software sectors is expected to increase as

buyers tap into large amounts of accumulated cash to acquire new products or talent

― In the Digital Media sector, early stage investments in new platforms and technologies continue to be a major theme and M&A

activity continues to skew toward the lower to middle market as large consolidators such as Google, Yahoo! and Facebook

seek to acquire companies at an earlier stage

― Mobile Technologies and Digital Advertising are expected to continue to lead activity in Digital Media as traditional media

firms begin to adapt to new distribution and monetization models

― In the Software sector, demand for cloud-based networks and infrastructure is continuing to drive innovation and M&A activity

through the remainder of 2013

VC and PE investors continue to seek out large market opportunities in Big Data and Mobile

― Q2 2013’s largest software private placement: AirWatch’s $225.0mm financing, demonstrates rising investor confidence in the

growth of mobile

PUBLIC COMPANY VALUATION METRICS



Public Company Valuation Metrics

Source: Capital IQ

(figures in millions of $USD, except per share) Share Price as of Market Enterprise EV / LTM EV / CY 2013E LTM Annual

Online Advertising 6/28/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth

1000mercis $57.46 $179.0 $135.3 2.9x 8.3x NA NA 4.0%

ad pepper media International N.V. 1.10 23.5 10.3 0.1x NM NA NA -3.1%

Digital Generation, Inc. 7.37 204.7 560.5 1.5x 5.6x 1.7x 5.4x 9.1%

Hi-Media S.A. 2.17 96.8 123.3 0.5x 7.6x NA NA -15.3%

Local Corporation 1.68 38.4 44.4 0.5x NM 0.4x 4.5x 9.2%

Marchex, Inc. 6.02 225.9 208.8 1.5x NM 1.4x 16.1x -9.2%

ReachLocal, Inc. 12.26 348.4 260.2 0.5x 28.3x 0.4x 6.7x 19.7%

Sedo Holding AG 2.60 79.2 69.5 0.4x 13.0x NA NA 7.3%

Septeni Holdings Co., Ltd. 1,132.55 142.8 100.3 0.2x 5.4x NA NA 15.9%

TradeDoubler AB 2.54 108.3 86.0 0.3x 32.5x NA NA -15.6%

Tremor Video, Inc. 9.00 444.8 419.3 3.7x NM NA NA 0.0%

ValueClick, Inc. 24.71 1,883.2 1,834.1 2.7x 8.7x NA NA 21.7%

Weborama 16.89 58.9 56.0 1.6x 12.2x NA NA 9.8%

YuMe, Inc. 0.00 0.0 0.0 0.0x 0.0x NA NA 0.0%

Mean $279.1 1.2x 12.1x 1.0x 8.2x 3.8%

Median $111.8 0.5x 8.5x 0.9x 6.0x 5.7%



Source: Capital IQ



Online Media & Search 6/28/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth

Angie's List, Inc. $26.56 $1,543.2 $1,495.2 8.5x NM 4.4x NM 70.9%

AOL Inc. 36.48 2,825.4 2,473.0 1.1x 5.1x 1.1x 5.5x 0.9%

Apple Inc. 396.53 372,202.5 333,065.5 2.0x 5.8x 2.0x 6.3x 18.8%

Baidu, Inc. 94.60 33,083.3 29,752.9 7.7x 14.7x 5.7x 13.0x 47.1%

Demand Media, Inc. 6.00 519.7 410.3 1.0x 5.8x 1.0x 3.9x 19.1%

Google Inc. 880.37 292,076.9 249,354.9 4.7x 14.8x 3.8x 10.0x 33.8%

IAC/InterActiveCorp 47.58 3,983.4 3,993.1 1.4x 9.3x 1.2x 5.8x 29.6%

Jiayuan.com International Ltd. 5.20 156.1 66.4 0.9x 5.8x 1.0x 5.8x 24.2%

LinkedIn Corporation 178.30 19,677.9 18,847.6 17.0x NM 9.9x NM 79.8%

Microsoft Corporation 34.55 288,489.0 229,466.0 3.0x 7.6x 0.0x 6.1x 4.1%

Naspers Ltd. 73.52 28,986.8 30,644.6 6.1x 22.6x NA NA 27.3%

NetEase, Inc. 63.17 8,202.1 5,729.2 4.2x 9.0x 3.5x 6.9x 8.1%

OpenTable, Inc. 63.95 1,457.0 1,360.4 8.1x 27.8x 6.1x 13.2x 15.6%

Pandora Media, Inc. 18.40 3,216.4 3,140.9 6.7x NM 3.5x NM 55.2%

Renren Inc. 2.99 1,132.6 278.1 1.5x NM 1.1x NM 47.2%

SINA Corporation 55.73 3,720.2 3,045.8 5.5x NM 4.7x 24.2x 12.3%

Sohu.com Inc. 61.62 2,356.5 1,998.7 1.7x 5.4x 1.4x 5.1x 27.0%

Tencent Holdings Ltd. 39.22 71,865.5 68,768.0 8.9x 23.1x NA NA 50.3%

Tomorrow Focus AG 4.98 290.3 290.3 1.4x 15.9x NA NA 16.0%

TheStreet, Inc. 1.86 63.0 16.2 0.3x NM NA NA -10.6%

WebMD Health Corp. 29.37 1,441.9 1,242.7 2.6x 30.9x 2.4x 10.2x -10.9%

Yandex N.V. 27.65 9,096.4 8,747.9 8.8x 20.1x 6.6x 14.7x 40.3%

Yahoo Japan Corporation 492.72 28,333.4 23,544.2 6.8x 11.7x NA NA 13.5%

Yahoo! Inc. 25.13 27,206.6 24,275.5 4.9x 11.8x 6.0x 16.5x -1.7%

Mean $43,417.0 4.8x 13.7x 3.4x 9.8x 25.7%

Median $3,567.0 4.5x 11.8x 3.5x 6.9x 21.6%



Source: Capital IQ



Online Gaming 6/28/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth

Activision Blizzard, Inc. $14.26 $15,936.1 11,318.1 2.3x 6.8x 2.7x 7.4x 11.8%

Changyou.com Limited 30.44 1,613.8 1,494.6 2.3x 3.6x 2.4x 4.4x 28.6%

Electronic Arts Inc. 22.99 7,036.9 5,915.9 1.6x 18.2x 1.7x 9.8x -8.4%

Funcom N.V. 0.32 21.1 34.5 1.3x NM NA NA 91.7%

GameLoft SA 6.99 556.2 483.9 1.8x 11.5x NA NA 26.7%

Gravity Co., Ltd 1.17 32.5 -13.7 NM NM NA NA -5.5%

Konami Corp. 21.21 2,940.1 2,651.4 1.2x 8.1x 1.2x 6.4x -15.0%

Majesco Entertainment Co. 0.57 23.8 -1.7 NM NM NA NA -51.2%

Take-Two Interactive Software Inc. 14.97 1,379.8 1,312.5 1.1x NM 0.0x 7.4x 47.1%

The9 Limited 3.73 91.3 -3.6 NM NM NA NA 45.2%

Ubisoft Entertainment SA 13.08 1,251.9 1,109.5 0.7x 1.8x NA NA 18.4%

Zynga, Inc. 2.78 2,207.0 1,038.3 0.8x 7.2x 1.6x 11.7x 0.5%

Mean $2,111.6 1.4x 8.2x 1.6x 7.8x 15.8%

Median $1,073.9 1.3x 7.2x 1.6x 7.4x 15.1%



Source: Capital IQ



eCommerce 6/28/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth

1-800-Flowers.com Inc. $6.19 $395.2 $396.2 0.5x 8.8x 0.5x 7.2x 3.8%

Amazon.com Inc. 277.69 126,416.4 121,561.4 1.9x NM 1.4x 19.8x 24.5%

Blue Nile Inc. 37.78 468.2 428.4 1.0x 29.6x 0.8x 14.1x 18.0%

eBay Inc. 51.72 67,121.7 62,235.7 4.3x 14.4x 3.3x 9.7x 17.4%

Expedia Inc. 60.15 8,128.8 7,755.2 1.8x 12.2x 1.5x 7.9x 19.5%

Groupon, Inc. 8.55 5,656.3 4,488.3 1.9x 32.6x 1.6x 12.7x 26.8%

HomeAway, Inc. 32.34 2,746.9 2,432.5 8.2x NM 5.8x 19.0x 22.0%

Mercadolibre, Inc. 107.76 4,757.9 4,564.4 11.6x 31.9x 7.9x 21.6x 22.2%

Netflix, Inc. 211.09 12,337.3 12,011.4 3.2x NM 2.7x 26.3x 12.1%

Overstock.com Inc. 28.20 666.9 585.0 0.5x 18.1x 0.5x 14.3x 9.3%

priceline.com Incorporated 826.67 42,639.6 39,111.1 7.1x 19.7x 5.3x 14.0x 20.6%

Rakuten, Inc. 11.82 15,552.4 15,766.4 3.4x 14.6x NA NA 16.9%

Stamps.com Inc. 39.39 608.5 561.3 4.7x 19.1x 4.0x 14.7x 11.6%

Shutterfly, Inc. 55.91 2,123.0 1,958.6 2.9x 23.5x 2.1x 10.5x 31.3%

Vistaprint N.V. 49.37 1,611.6 1,798.8 1.6x 16.8x 1.4x 10.2x 16.3%

Mean $18,377.0 3.6x 20.1x 2.8x 14.4x 18.1%

Median $4,488.3 2.9x 18.6x 1.9x 14.0x 18.0%



Source: Capital IQ



Direct Marketing / Lead Gen 6/28/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth

Bankrate, Inc. $14.36 $1,436.7 $1,541.5 3.5x 14.7x 3.3x 12.3x -2.1%

eHealth, Inc. 22.72 442.3 328.7 2.0x 15.5x 1.8x 9.4x 6.9%

Harte-Hanks Inc. 8.60 537.0 583.2 0.8x 6.9x 0.8x 6.8x -4.7%

Market Leader, Inc. 10.70 289.1 267.1 5.6x NM 3.9x 18.4x 29.1%

Moneysupermarket.com Group PLC 2.91 1,577.2 1,548.8 5.0x 14.1x NA NA 13.1%

Move, Inc. 12.82 511.1 480.9 2.3x 28.5x 2.0x 11.3x 8.1%

QuinStreet, Inc. 8.63 370.0 353.6 1.1x 9.3x 1.3x 9.1x -16.8%

Tree.Com, Inc. 17.14 192.8 119.5 1.3x NM 1.1x 5.8x 71.1%

Trulia, Inc. 31.09 1,002.0 797.6 10.0x NM 6.5x 30.8x 87.8%

Zillow, Inc. 56.30 1,944.1 1,765.1 13.3x NM 9.1x NM 71.3%

Mean $778.6 4.5x 14.8x 3.3x 13.0x 26.4%

Median $532.0 2.9x 14.4x 2.0x 10.3x 10.6%


Content Delivery Networks 6/28/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth

Akamai Technologies, Inc. $42.55 $7,561.1 $7,048.1 5.0x 13.5x 4.3x 10.0x 18.3%

Aruba Networks, Inc. 15.36 1,753.6 1,312.7 2.2x NM 2.3x 11.7x 19.3%

Brightcove, Inc. 8.76 246.3 219.4 2.4x NM 2.1x 38.1x 31.7%

Limelight Networks, Inc. 2.25 216.3 97.8 0.5x NM 0.4x 21.5x 4.3%

NeuLion Incorporated 0.49 81.0 81.1 2.1x NM NA NA 1.1%

RealNetworks Inc. 7.56 267.8 7.2 NA NM NA NA -21.1%

Rovi Corporation 22.84 2,300.7 2,949.0 4.7x 13.6x 3.8x 8.1x -9.1%

Mean $1,673.6 2.8x 13.6x 2.6x 17.9x 6.4%

Median $219.4 2.3x 13.6x 2.3x 11.7x 4.3%



Source: Capital IQ



Mobile Content 6/28/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth

Acotel Group SpA $22.42 $92.2 $59.7 0.4x NM NA NA -4.2%

Aspiro AB 0.13 43.4 29.7 0.7x NM NA NA 12.5%

Com2uS Corporation 29.12 282.4 250.9 3.2x 12.2x NA NA 125.5%

DADA SpA 5.07 82.2 118.1 1.1x 10.6x NA NA 2.6%

DeNA Co., Ltd. 19.63 2,633.3 1,999.3 1.0x 2.4x NA NA 38.9%

GameLoft SA 6.99 556.2 483.9 1.8x 11.5x NA NA 26.7%

Glu Mobile, Inc. 2.21 151.3 130.1 1.5x NM 1.3x 234.6x 26.4%

Gree, Inc. 8.87 2,070.0 1,918.9 1.2x 3.0x NA NA 11.5%

Index Corporation 2.42 9.5 196.4 1.2x 18.8x NA NA -9.9%

Kongzhong Corp. 6.50 272.7 142.8 0.8x 4.6x NA NA 15.6%

Mandalay Digital Group, Inc 4.45 90.0 92.9 16.3x NM 1.5x 7.7x -16.7%

Smith Micro Software Inc. 1.06 39.5 11.2 0.3x NM 0.3x NM -10.5%

SNAP Interactive, Inc. 0.51 19.9 15.7 0.9x NM 1.1x 11.9x -19.8%

Tencent Holdings Ltd. 39.22 71,865.5 68,768.0 8.9x 23.1x NA NA 50.3%

Tose Co.,Ltd. 6.43 47.6 22.0 0.4x 5.1x NA NA 1.5%

Mean 4,949.3 2.7x 10.2x 1.0x 84.8x 16.7%

Median 130.1 1.1x 10.6x 1.2x 11.9x 11.5%



Source: Capital IQ



Mobile Advertising 6/28/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth

Augme Technologies, Inc. $0.40 $51.8 $47.5 1.8x NM 1.1x NM 70.6%

Millennial Media Inc. 8.71 692.8 559.3 2.9x NM 1.6x 13.9x 68.7%

Voltari Corporation 3.56 16.7 12.9 0.2x 0.8x NA NA -11.0%

Velti Plc 1.40 127.0 157.9 0.6x NM 0.5x 7.4x 22.8%

Mean $194.4 1.4x 0.8x 1.1x 10.7x 37.8%

Median $102.7 1.2x 0.8x 1.1x 10.7x 45.7%


Web / Domain Hosting 6/28/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth

ASG Group Limited $0.31 $63.4 $102.0 0.7x 9.6x NA NA -3.4%

Melbourne IT Ltd. 2.00 164.7 179.6 1.2x 8.4x NA NA -5.1%

Newtek Business Services Inc. 2.11 78.0 149.6 1.1x 8.3x NA NA 11.3%

NeuStar, Inc. 48.68 3,203.2 3,448.7 4.1x 9.1x 3.7x 7.5x 25.9%

Tucows Inc. 1.86 74.9 78.7 0.7x 12.3x 0.6x 6.3x 14.8%

United Online, Inc. 7.58 701.2 813.0 0.9x 8.7x 1.0x 7.3x -2.5%

VeriSign, Inc. 44.66 6,732.3 5,876.0 6.5x 10.7x 5.9x 9.1x 13.6%

Web.com Group, Inc. 25.60 1,220.0 1,906.1 4.4x 27.8x 3.4x 11.3x 71.8%NM

Mean $1,569.2 2.4x 11.9x 2.9x 8.3x 15.8%

Median $496.3 1.1x 9.3x 3.4x 7.5x 12.4%



Source: Capital IQ



General Software 6/28/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth

AVG Technologies N.V. $19.45 $1,051.2 $1,065.6 2.8x 9.0x 2.5x 7.7x 28.2%

BMC Software Inc. 45.13 6,383.8 6,214.4 2.8x 10.2x 2.7x 7.2x 1.4%

CA Technologies 28.62 12,962.7 11,601.7 2.5x 6.9x 2.7x 7.6x -3.6%

International Business Machines Corp. 191.11 211,901.6 233,362.6 2.3x 8.8x 2.3x 8.2x -3.5%

Jive Software, Inc. 18.17 1,210.8 1,077.2 8.8x NM 5.2x NM 41.2%

Oracle Corporation 30.71 142,212.1 128,987.1 3.5x 7.4x 3.4x 6.9x 0.2%

Rainmaker Systems Inc. 0.39 10.5 9.8 0.4x NM NA NA -12.7%

Red Hat, Inc. 47.82 9,052.0 8,198.4 6.0x 29.6x 5.1x 17.6x 16.4%

SAP AG 73.04 87,098.9 87,677.4 4.1x 12.1x 3.6x 10.0x 13.2%

The Active Network, Inc. 7.57 466.9 364.4 0.8x 33.1x 0.8x 6.6x 19.9%

Qihoo 360 Technology Co. Ltd. 46.17 5,668.4 5,367.4 14.5x NM 8.3x 25.4x 72.6%

Mean $43,993.3 4.4x 14.6x 3.7x 10.8x 15.7%

Median $6,214.4 2.8x 9.6x 3.1x 7.7x 13.2%



Source: Capital IQ



On-Demand Software 6/28/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth

Concur Technologies, Inc. $81.38 $4,543.5 $4,335.3 9.0x NM 6.7x 29.7x 22.3%

Constant Contact, Inc. 16.07 493.5 396.2 1.5x 20.8x 1.4x 8.0x 16.1%

Dealertrack Technologies, Inc. 35.43 1,540.8 1,534.2 3.8x 26.4x 3.1x 12.0x 10.5%

ExactTarget, Inc. 33.72 2,348.5 2,247.5 7.1x NM 4.9x NM 39.4%

LogMeIn, Inc. 24.46 594.7 389.5 2.7x NM 2.7x 11.3x 14.8%

NetSuite Inc. 91.74 6,768.8 6,592.1 19.9x NM 13.1x NM 31.3%

RealPage, Inc. 18.34 1,404.8 1,382.0 4.1x 25.7x 3.3x 13.3x 22.5%

Responsys, Inc. 14.31 706.4 601.1 3.5x 30.9x 2.5x 16.7x 21.3%

Salesforce.com, Inc 38.18 22,523.7 22,118.3 6.8x NM 4.8x 29.3x 32.1%

The Ultimate Software Group, Inc. 117.29 3,242.6 3,174.2 9.0x NM 7.1x 0.0x 24.4%

Vocus Inc. 10.52 221.9 259.3 1.4x NM 1.2x 9.6x 48.4%

Mean $3,911.8 6.3x 25.9x 4.6x 14.4x 25.7%

Median $1,534.2 4.1x 26.0x 3.3x 12.0x 22.5%


Ad Agency 6/28/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth

The Interpublic Group of Companies, Inc. $14.55 $6,233.2 $7,305.2 1.0x 8.8x 1.1x 7.9x -0.8%

Omnicom Group Inc. 62.87 16,257.2 19,301.7 1.3x 9.3x 1.3x 8.8x 2.0%

Publicis Groupe SA 71.11 14,933.7 14,728.3 1.7x 8.7x NA NA 12.2%

WPP plc 17.05 23,571.4 28,238.6 1.8x 10.2x 1.6x 9.3x 3.5%

Mean $17,393.4 1.5x 9.3x 1.3x 8.7x 4.2%

Median $17,015.0 1.5x 9.0x 1.3x 8.8x 2.8%



Source: Capital IQ



Telecom 6/28/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth

Alcatel-Lucent, S.A. $1.82 $4,142.4 $5,685.5 0.3x 7.0x 0.3x 4.2x -2.8%

AT&T, Inc. 35.40 190,452.0 261,832.0 2.1x 8.9x 2.0x 6.0x -0.3%

BCE, Inc. 40.92 31,746.6 51,159.1 2.7x 6.7x 2.6x 6.4x 0.2%

BT Group plc 4.70 37,039.1 51,300.0 1.9x 6.3x 2.0x 5.8x -4.7%

CenturyLink, Inc. 35.35 21,529.8 41,841.8 2.3x 5.5x 2.3x 5.7x 0.1%

China Telecom Corp. Ltd. 0.48 38,608.2 49,566.9 1.1x 4.3x 0.9x 3.0x 15.2%

Deutsche Telekom AG 11.62 49,977.1 106,280.0 1.4x 5.3x NA NA -1.7%

IDT Corporation 18.69 428.0 294.4 0.2x 10.7x 0.2x NA 7.5%

KDDI Corporation 51.99 39,744.4 49,275.3 1.3x 5.2x NA NA 2.5%

Level 3 Communications, Inc. 21.08 4,667.8 12,648.8 2.0x 8.8x 1.9x 7.3x 27.2%

Nippon Telegraph and Telephone Corp. 51.79 61,391.8 115,423.6 1.1x 3.7x 1.1x 3.7x 1.8%

Orange 9.45 24,824.1 68,686.3 1.2x 4.4x 1.3x 4.3x -3.9%

Tata Communications Limited 2.64 753.3 2,567.3 0.9x 8.2x NA NA 21.3%

Telefónica, S.A. 12.80 58,785.2 140,118.9 1.7x 5.3x 1.9x 5.6x -2.4%

Verizon Communications Inc. 50.34 144,022.7 245,046.7 2.1x 7.7x 2.0x 5.5x 4.4%

Mean $80,115.1 1.5x 6.5x 1.5x 5.2x 4.3%

Median $51,159.1 1.4x 6.3x 1.9x 5.6x 0.2%



Source: Capital IQ



VoIP 6/28/2013 Cap (mm) Value (EV) Revenue EBITDA Revenue EBITDA Revenue Growth

8x8 Inc. $8.24 $594.4 $542.2 5.0x NM 4.4x 22.3x 25.4%

Aruba Networks, Inc. 15.36 1,753.6 1,312.7 2.2x NM 2.2x 11.3x 19.3%

AudioCodes Ltd. 4.43 168.5 144.8 1.1x NM 1.0x NA -13.4%

BroadSoft, Inc. 27.60 772.9 694.2 4.2x 30.3x 3.7x 14.5x 13.2%

Cbeyond, Inc. 7.84 238.2 225.4 0.5x 2.7x 0.5x 3.1x -1.3%

F5 Networks, Inc. 68.80 5,421.4 4,898.5 3.4x 10.6x 3.8x 9.3x 12.9%

magicJack VocalTec Ltd. 14.19 263.3 217.4 1.4x 3.8x 1.4x 3.9x 33.7%

Sonus Networks, Inc. 3.01 849.5 626.7 2.5x NM 2.8x NA -1.4%

Synchronoss Technologies, Inc. 30.87 1,184.7 1,127.4 3.9x 18.0x 2.7x 8.1x 19.4%

Vonage Holdings Corporation 2.83 600.0 573.3 0.7x 4.6x 0.8x 5.2x -2.8%

Windstream Corporation 7.71 4,570.2 13,627.3 2.2x 6.0x 2.3x 5.9x 27.6%

Mean $2,180.9 2.5x 10.9x 2.3x 9.3x 12.1%

Median $626.7 2.2x 6.0x 2.3x 8.1x 13.2%



LTM Subsector Relative Performance as of 6/28/2013 eCommerce, Ad Agencies and Web / Domain Hosting companies aggressively outperformed major indices

-100.00%

-80.00%

-60.00%

-40.00%

-20.00%

0.00%

20.00%

40.00% eCommerce (34.6%)

Ad Agency (25.1%)

Web / Domain Hosting (23.7%)

Mobile Content (22.2%)

S&P 500 Index (13.2%)

On-Demand Software (12.6%)

Dow Jones Industrial Average (12.4%)

Online Advertising (10.2%)

NASDAQ Composite Index (9.1%)

Telecom (8.3%)

Direct Marketing / Lead Gen (6.7%)

General Software (-2.3%)

Online Media & Search (-5.7%)

Content Delivery Networks (-7.7%)

Online Gaming (-11.5%)

VoIP (-34.6%)

Mobile Advertising (-71.3%)

Subsector Relative Performance as of 6/28/2013

Direct Marketing /

Lead Gen

Mobile

Content

Online

Advertising

On-Demand

Software

General

Software Telecom

Online

Gaming eCommerce

Web / Domain

Hosting

Online Media

& Search VoIP

Content

Delivery Networks

Mobile

Advertising Ad Agency

3-Months 13.4% 18.1% -4.2% 10.9% -5.0% 0.2% 12.6% 8.5% 8.2% 11.7% -3.4% 9.8% 25.3% 9.1%

6-Months 38.5% 11.0% 17.3% 8.9% -3.3% 7.0% 34.2% 15.2% 21.6% 10.4% -13.8% 8.0% -35.0% 22.2%

1-Year 6.7% 22.2% 10.2% 12.6% -2.3% 8.3% -11.5% 34.6% 23.7% -5.7% -34.6% -7.7% -71.3% 25.1%




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Q2 2013 exit report final

Economy & Finance

Transcript of Q2 2013 exit report final