Académique Documents
Professionnel Documents
Culture Documents
Agenda
• Opening Remarks
• M&A Review
• Corum Transactions 1H:06
• 2H:06 Outlook
• IPOs, Venture Capital and Private Equity
• Sector Analysis
• Valuations
• What Will Drive Deals in 2006
• Guest Speakers
• Questions & Answers
2
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
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
• 40% Cross border transactions
• Recognized industry leaders/experts
• Sponsor of Selling Up Selling Out conferences
• Sponsor of World Financial Symposiums Conferences
• Publisher of industry leading M&A research
3
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
• NICE acquired FAST to strengthen their digital video product suite and complement their
current security offering.
4
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
• The Carlyle Group is a global private equity firm with investments across multiple industries
including technology and business services.
5
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
• NCR, out of Dayton, Ohio, is a global technology company operating in a number of customer
centric industries like retail, data warehousing and banking.
• NCR saw IDVelocity as an opportunity to extend their RFID solution portfolio and complementary
with other NCR technologies.
6
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
Microsoft / iView
• iView is a UK developer of professional level digital asset management and cataloging software
for photographers and creative professionals.
• Microsoft will expand their Digital Asset Management offering and continue to develop and support
the iView product line for both the Mac and Windows operating systems.
7
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
Confidential
• Legal software provider acquired by large multi-national software and services company.
8
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
Momentum Continues
With an exceptionally strong first half complete, we look
forward to a similar close to 2006.
9
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
10
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
11
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
Is it 1998?
• M&A levels are strong, but justified
• Valuations are strategic, while sensible
• New technology is pervasive, but real
• Sellers are optimistic, but rational
• Buyers are opportunistic, yet cautious
12
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
$1,700
$1,600
$1,500
$1,400
$1,300
$1,200
$1,100
In Billions
$1,000
$900
$800
$700
$600
$500
$400
$300
$200
$100
$0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 1H:06
13
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
IPO Market
14
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
Venture Capital
Currently:
• 8 venture backed technology companies went public in Q2
• 74 venture backed technology companies exited via M&A in Q2
• Ratio of VC backed M&A exits vs. IPOs – 9:1
• Investments in software companies rising
• Post money valuations up, mainly due to slow IPO market
• Overall the VC market is very stable
Going Forward:
• VCs are actively seeking investments abroad
• VCs are looking for a smaller quantity of higher quality
investments
15
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
$1,500
In Millions
$1,300
$1,100
$900
$700
$500
02
02
03
03
03
03
04
04
04
04
05
05
05
05
06
3:
4:
1:
2:
3:
4;
1:
2:
3:
4:
1:
2:
3:
4:
1:
Q
Q
Source: PricewaterhouseCoopers/Venture Economics/NVCA/MoneyTree survey
16
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
Private Equity
Currently:
• Buyouts continue to be a major driver of software M&A
• Q2 was the third most active (All industries)
• Private equity funds raised $24+ billion in Q1
• Persistent interest in technology
Going Forward:
• Continue to play a major roll in the consolidation of mature
markets
• Renewed confidence in resurgent IPO market
• In an effort to differentiate, PEs are taking a more hands on
approach
17
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
18
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
19
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
Sector Statistics
Transaction volume by sector
Most Active Sectors
• Vertical Market Applications
• Internet Infrastructure
• Enterprise Applications
Slow Sectors
• Software Development Tools
• Financial Services
20
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
Sector Valuations
Software Sectors TTM EV/S Multiple
Business Intelligence 2.15 x
Connectivity/Legacy Extension/Web Services 2.59 x
Digital Media 2.82 x
Engineering 2.71 x
Enterprise Applications 4.27 x
Enterprise Content Management 1.46 x
Enterprise Infrastructure 2.36 x
Gaming/Entertainment 1.44 x
Internet Infrastructure 3.57 x
Internet Pure Plays 3.34 x
IT Services 0.78 x
Security 3.00 x
Software Development Tools 1.44 x
Storage 2.43 x
Supply Chain Management 1.58 x
Wireless 2.28 x
21
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
Sector Analysis
Enterprise Applications
• Vital to the operation of the enterprise
• Mature market, forcing companies to grow inorganically
• Rising cost of acquiring new market share
M&A Activity
• Cross-border transactions
• Compliance related solutions
22
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
Sector Analysis
Internet Infrastructure
Driving forces
• Strong public peer group valuations
• Surge of new players to the market
• Continued acceptance of new technology
• Diminished concerns over the Internet model failing again
23
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
Sector Analysis
24
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
Valuation
25
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
• Rapid growth
• High profitability
• Track record of sustainability
• Recurring revenue
• Attractive business models
• Current and robust technology
• Strong customer base
• Specialized domain expertise
• Distribution / channel strength
• Brand recognition
• Geographic position of power – Localized solutions
• Strong management and technology team(s)
26
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
27
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
Guest Speakers
28
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
29
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
Contact Information
Presenters:
Bruce Milne, Chairman and CEO
Ryan Blakely, Director of Research
www.corumgroup.com
30
THE PREMIER PROVIDER OF M&A SERVICES TO SOFTWARE / IT COMPANIES
Corum Links
VIP Pass for Corum's Selling Up Selling Out Conference
To take advantage of the special VIP offer for our July 18th Webinar attendees:
31