M&A SNAPSHOT

Q1 2011
APRIL 2011

M&A SNAPSHOT

OVERVIEW COMMENTARY
M&A activity accelerated in Q1 2011 with a good overall tone. M&A activity within the crucial $25 million - $1 billion transaction value range in our sector was up 28% while median transaction size decreased slightly by 7%. VC-backed company exits increased by 69% from the previous quarter. This quarters tone is shaped by large announced transactions including AT&Ts $54b acquisition of T-Mobile, eBays $2.4b acquisition of GSI Commerce and Qualcomms $3.6b acquisition of Atheros. These are important tone setters for the overall Internet | mobile | digital media M&A market. These transactions illuminate the strategic importance of mobile data, e-commerce and Internet-connected devices. Within the $25 million - $1 billion transaction value range, Google continues to lead the quarter with six acquisitions, three of which were done by Googles business unit, YouTube. Private companies Groupon, Facebook and Zynga also all remained active in this quarter. We are also seeing an increase in M&A activity level in the Internet | mobile | digital media sectors from traditional IT vendors, as demonstrated by Teradata's purchase of Aster Data (after their acquisition of Aprimo last quarter), Salesforces acquisition of Radian6 and Concurs acquisition of TripIt. We expect to see an increasing number of transactions where traditional enterprise vendors tap into the value of consumer-based innovation and platforms. This past quarter, Architect Partners has published an M&A Alert on twenty three of the most important transactions in the quarter.

FOLLOWING ANALYSIS
M&A DASHBOARD: NOTABLE ACQUIRERS: M&A TRANSACTIONS: OTHER NOTABLE TRANSACTIONS:
SUMMARY OF QUARTERLY ACTIVITY IN NUMBERS AND TONE ACTIVE INFLUENTIAL BUYER ACTIVITY SUMMARY OF TRANSACTIONS BETWEEN $25MM-$1B IN VALUE SUMMARY OF NOTABLE TRANSACTIONS WITHOUT ANNOUNCED VALUE OR ABOVE $1B.

COMING SOON
ANALYSIS OF VC-BACKED M&A EXITS

M&A DASHBOARD
COVERAGE MARKET TONE
Architect Partners tracks M&A activity within the Good. Deepening base of acquirers. converging Internet | mobile | digital media sectors. Transaction volume increases. Generally The following assessment is focused on M&A balanced buyer/seller dynamics. transactions with announced values of between $25mm and $1B as these typically represent successful business-building endeavors. 2009 2010 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
68 68 41 46 53 38 53 40

2011 Q1
68

M&A Exits (#)............................................................

$9 $6 $11

$14

$12 $6

$12

$14

$5
27

Total Consideration Paid ($b)..............................

18 7 10 5

17 12

18

16

Venture-Backed M&A Exits (#)...........................

$100

$146 $85

$128 $75 $100 $98

$105

$98

Median Transaction Size ($mm)..........................

41% 48% 55% 43% 38% 45% 52% 49% 48%

U.S.-based Target (%).............................................

!"#$$ !%#$$ !"&$ !'($

!"#$

All Internet | Mobile | Digital Media M&A Exits(1)(#)....

Note: 1) Includes all internet | mobile | digital media transactions regardless of transaction value. Transaction values within a range are presented as a mid-point value

NOTABLE ACQUIRERS
The following acquirers are generally active or inuential buyers within the Internet | mobile | digital media sectors. Below, we highlight announced acquisitions in the rst quarter of 2011.

ACQUIRER

# 3 3 3 3 2 2 2 2 2 2 2 2

TARGET

NOTABLE ACQUIRERS (continued)

ACQUIRER # 2 1 1 1 1 1 1 1 1 1 1 1 1
5
Certain Assets

TARGET

M&A TRANSACTIONS: $25MM-$1B

Below highlights M&A transactions that have announced values of between $25mm and $1b announced in Q1 2011 within the converging Internet | mobile | digital media sectors.
ANNOUNCED DATE TRANSACTION VALUE ($mm) AP INSIGHT SM M&A ALERT VC-BACKED

ACQUIRER

TARGET

TARGET DESCRIPTION

NON-SERVICE PROVIDER TRANSACTIONS 1 2 03/25/2011 02/20/2011 Apax Partners CSR plc Trader Corporation Zoran Corporation $761 $645 Online and print media publishing company, providing directories, informational sites and advertising services to businesses and individuals. Develops SoC solutions for the digital entertainment and digital imaging devices such as HDTV, set top boxes, converter boxes, digital camera and video editing system. Provides online travel services such as flight booking, car hires, travel advice and information on destinations. Provides WLAN chipset solutions for wireless home networking and broadband access devices. Online provider of pharmacy products. SoC solutions for set-top-boxes, home automation, digital devices and security systems. Provides digital signage networks, equipment and professional sound systems. Provides SoC chip solutions to fixed wireless networks, private wireless networks, and cellular infrastructure markets. Provides a social media monitoring platform for marketing, communications and customer support professionals. Develops interactive solutions for betting and gaming operators in the U.K.

3 4 5 6 7 8 9 10

02/09/2011 03/16/2011 03/23/2011 01/18/2011 03/24/2011 03/18/2011 03/30/2011 01/13/2011

Vacaciones eDreams MediaTek Walgreens Golden Gate Private Equity Mood Media Broadcom Salesforce.com Vitruvian Partners

Opodo Ralink Technology Drugstore.com Conexant Systems Muzak Holdings Provigent Radian6 OpenBet Technologies

$615 $440 $436 $391 $375 $360 $350 $330

! !

11 12

02/01/2011 02/06/2011

Time Warner AOL

NaviSite HuffingtonPost

$321 $315

Provides cloud-based enterprise hosting solutions. Online website that contains articles on varying subjects including local and national news, analysis and lifestyle articles on topics such as religion, health, sports, food, travel and womens issues. Online retail of chic photo cards and personalized stationery. Provides online team and league-licensed merchandises. Offers a database management system with embedded analytics capability optimized to support large-scale data-intensive applications where near-realtime analytics provide significant value.

! ! ! !

13 14 15

03/21/2011 02/09/2011 03/02/2011

Shutterfly GSI Commerce Teradata

Tiny Prints Football Fanatics Aster Data

$306 $277 $263

Note: Transaction values within a range are presented as a mid-point value

M&A TRANSACTIONS: $25MM-$1B (continued)

# 16 ANNOUNCED DATE 02/14/2011 ACQUIRER Eurovestech, INVESCO Asset Management, Verlinvest Inventec TARGET Toluna TRANSACTION VALUE ($mm) $258 TARGET DESCRIPTION Provides online panel and technology services to the market research industry. AP INSIGHT SM M&A ALERT VC-BACKED

17

03/22/2011

Inventec Appliances

$256

Manufactures wire and wireless communication products such as handheld devices (including smartphones, MP3 players, GPS devices) and network appliances products. Offers an online private flash sale site. HauteLooks members (invited by referrals of other members or registration on the site) enjoy online discounted sale events for a limited period of time. Provides a virtual goods payment platform for applications including online games, social networks, digital storefront and online videos. Offers mobile video streaming services which allows video communication via mobile phones. Develops and supports test systems and status monitoring hardware and software products for DSL, POTS, broadband and IP networks. Offers a mobile marketing platform enabling marketers to develop, execute, monitor and analyze mobile marketing campaigns. Offers online and mobile software that enables travelers to manage, organize and share travel booked on over 1,000 sites. Offers subscription-based online streaming services for movies, TV series and games available for PC, Internet TV (LOVEFiLM supports Sony and Samsung Smart TVs), Sonys Playstation, Microsofts Xbox, Nintendos Wii and DS. Offers e-commerce and e-billing transaction switching and payment processing services. Provides answer-based search services to users primarily through its Web site, Answers.com. Offers vehicle and cargo tracking using GSM/GPRS technology.

18

02/17/2011

Nordstrom

HauteLook

$225

! ! !

19 20

02/09/2011 01/06/2011

Visa Skype Technologies

PlaySpan Qik

$190 $136

21 22 23 24

02/22/2011 03/12/2011 01/13/2011 01/20/2011

Golden Gate Capital Motricity Concur Technologies Amazon.com

Tollgrade Communications Adenyo TripIt LOVEFiLM

$129 $125 $120 $115

! ! !

25

01/04/2011

Helios, Adlevo

InterSwitch

$110

25 26

02/02/2011 03/23/2011

AFCV Holdings GP Investments

Answers Sascar Tecnologia E Segurana Automotiva S/A Communispace

$103 $101

27

02/07/2011

Diversified Agency Services CBS Interactive AOL Europe Cisco

$100

Offers online focus group services allowing enterprises and brand marketers to listen to customers insights and address customers needs and demands effectively. An Internet TV portal, guide and search engine that claims to have the only complete directory of TV, movies and web series available online. Distributes digital content-based campaigns, allowing users to create an online presence for brands, in the U.K. Provides video encoding and live streaming technologies that support adaptive bit rate (ABR) delivery of video.

! ! ! !

28 29 30

03/04/2011 01/31/2011 02/04/2011

Clicker Media GoViral Inlet Technologies

$100 $97 $95

Note: Transaction values within a range are presented as a mid-point value

M&A TRANSACTIONS: $25MM-$1B (continued)

# 31 32 ANNOUNCED DATE 03/22/2011 02/10/2011 ACQUIRER Finisar Dialog Semiconductor TARGET Ignis SiTel Semiconductor TRANSACTION VALUE ($mm) $89 $87 TARGET DESCRIPTION Develops fiber optical components for high-speed broadband networks. Develops ICs for cordless communications and VoIP applications. AP INSIGHT SM M&A ALERT VC-BACKED

33 34 35

01/25/2011 03/18/2011 03/04/2011

Orange Prime Rich Holdings An unknown private equity fund Cavium Networks Google Adobe

DailyMotion Foxconn iWeb Group

$80 $70 $65

Operates a YouTube-like video sharing website that allows users to search, discover, view, create, upload, download and share online videos. Mobile handset manufacturer. Provides cloud-based enterprise hosting infrastructure solutions. Montreal-based.

36 37 38

01/31/2011 03/08/2011 01/18/2011

Celestial Semiconductor BeatThatQuote.com Demdex

$65 $61 $58

Provides SoC solutions for DTV, IPTV, Internet TV, and mobile media devices. Operates as a price comparison Web site in the U.K. Offers SaaS-based software that captures, manages and analyzes behavioral data derived by tracking consumer interactions with publishers websites and online advertising campaigns. Develops fixed, wireless, and satellite communication equipment and systems supporting mobile transmission networks, cellular base station transmission and wireless access solution for carriers. Creates rich mobile applications for feature phones. Snaptu has created feature phone-compatible applications for LinkedIn, Mashable, Twitter, Picasa, Facebook and ESPN Cricket. Engages in content distribution business, including the digital delivery of advertisements and music videos to broadcasters. Provides online education services. Offers enrollment, financial aid and educational technology services to 750 education institutions. Online dating Web site. Provides enterprise video management platform that allows Fortune 500 organizations stream media presentations and implement enterprise webcasts. Provides mobile operators, handset OEMs and content owners a digital content delivery platform. Saffron offers a variety of products and services that allows premium video content to be encoded in a variety of video formats, tagged and stored in a content library, retrieved on demand, security protected and streamed to a mobile device in a format optimized for that specific device.

! ! !

39

01/19/2011

Ceragon

Nera Networks

$58

40

03/19/2011

Facebook

Snaptu

$55

41 42 43 44

02/27/2011 01/12/2011 02/02/2011 03/23/2011

Vitruvian Partners Blackboard Match.com Polycom

Independent Media Distribution Presidium Humor Rainbow Accordent Technologies Saffron Media

$54 $53 $50 $50

45

02/07/2011

HTC

$48

Note: Transaction values within a range are presented as a mid-point value

M&A TRANSACTIONS: $25MM-$1B (continued)

# 46 ANNOUNCED DATE 02/07/2011 ACQUIRER HTC TARGET Saffron Media TRANSACTION VALUE ($mm) $48 TARGET DESCRIPTION Provides mobile operators, handset OEMs and content owners a digital content delivery platform. Saffron offers a variety of products and services that allows premium video content to be encoded in a variety of video formats, tagged and stored in a content library, retrieved on demand, security protected and streamed to a mobile device in a format optimized for that specific device. Provides SaaS platform that hosts, manages, and delivers media and community applications (including social networking, user-generated content, online video and viral widget), allowing customers to manage monetization and audience growth. Offers daily deals on various things to do, see, eat and buy online in Australia. Offers software that allows network operators, broadcasters and content providers to manage and deliver video content over IP-based networks. Provides user interface (UI) development tools and middleware for a variety of gaming platforms. Provides colocation, Internet hosting and server solutions that support enterprise IP networks and data centers. Provides SaaS-based Website search solutions. Provides sports tracking devices that enable replay and tracks movement in sport games. U.K.-based. Develops web conferencing solutions. ShopRunner.com and Rue LaLa.com are two invite-only shopping sites. Licensed Sports Merchandise Business operates online retail for licensed sports merchandising. The transaction represents businesses that were divested from GSI Commerce, as a part of eBay's acquisition of GSI Commerce. AP INSIGHT SM M&A ALERT VC-BACKED

47

01/28/2011

KIT Digital

KickApps

$45

48 49 50

01/20/2011 03/16/2011 02/15/2011

Yahoo!7 Pty Ltd. KIT digital Autodesk

Spreets Pty Ltd. TXT Polymedia Scaleform

$40 $39 $36

51 52 53 54 55

02/28/2011 01/18/2011 03/06/2011 01/06/2011 03/27/2011

Lumison Rightnow Sony United Kingdom Salesforce Michael Rubin (GSI Commerce's CEO)

BlueSquare Data Q-go.com Hawk-Eye Innovations Limited Dimdim 70% stake in ShopRunner and Rue La La and 100% in Licensed Sports Merchandise Business

$36 $34 $32 $31 $31

56 57

01/28/2011 02/24/2011

Telit Vocus

Motorola Israel, m2m Modules Division North Social

$26 $25

Develops and implements m2m applications and modules for wireless technologies such as GSM, GPRS, CDMA and WCDMA. Develops Facebook application that allows users create, manage and promote their businesses on the popular social network.

Note: Transaction values within a range are presented as a mid-point value

M&A TRANSACTIONS: $25MM-$1B (continued)

# ANNOUNCED DATE ACQUIRER TARGET TRANSACTION VALUE ($mm) TARGET DESCRIPTION AP INSIGHT SM M&A ALERT VC-BACKED BROADCAST SERVICE AND TELECOMMUNICATIONS SERVICE PROVIDER TRANSACTIONS 1 2 3 4 5 02/01/2011 01/31/2011 01/31/2011 03/24/2011 01/19/2011 Dish Network Southern Cross Media Group Cumulus Media Kapiri Investments Hubbard Broadcasting DBSD North America Austereo Group Cumulus Media Partners TP EmiTel Bonneville International, 17 Radio Stations Cable & Wireless Bermuda Sonitel Multi-links, CDMA Business China Unifiednet Holdings Cobridge Communications, Certain Cable and Broadband Operations in Georgia and Alabama Telestar $1,000 $903 $740 $599 $505 Satellite-based voice, data, and Internet services. Offers commercial radio broadcasting in Australia. Operates radio broadcasting stations. Offers TV broadcast infrastructure for TV stations and studios in Poland. Radio broadcasting stations.

6 7 8 9

02/23/2011 01/19/2011 03/31/2011 03/31/2011

Bragg Group LAP Green Network Visafone Communications Next-Generation Satellite Communications Knology

$70 $64 $52 $39

Offers residental and business internet and telephone services in Bermuda. Provides integrated telecommunication services in Nigeria. Provides CDMA mobile operation services in Nigeria. Provides broadband satellite services in British Virgin Islands.

10

02/21/2011

$30

Operates cable and broadband telecommunication services.

11

03/24/2011

Hyperion

$27

Operates interactive TV channel iTV in Poland.

Note: Transaction values within a range are presented as a mid-point value

10

M&A TRANSACTIONS: OTHER NOTABLE

A number of important transactions were announced in the rst quarter of 2011 with consideration in excess of $1b.

# 1 2

ANNOUNCED DATE 03/20/2011 01/05/2011

ACQUIRER ATT Qualcomm

TARGET T-Mobile Atheros

TRANSACTION VALUE ($mm) $54,854 $3,581

TARGET DESCRIPTION Provides wireless voice, messaging, and data services Develops semiconductor chips that enable WiFi, Bluetooth, GPS and powerlinebased connectivity for a variety of wireless devices such as smartphone, tablets, notebooks, gaming devices, digital home networking and Internet routers. Provides e-commerce and interactive marketing services

AP INSIGHT SM M&A ALERT

VC-BACKED

03/27/2011

eBay

GSI Commerce

$2,381

Note: Transaction values within a range are presented as a mid-point value

11