Corum Group End of Year 2008 MA Briefing v8

Transcription

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USA
Switzerland
Germany
France
United Kingdom
Canada
Norway
Brazil
Software & IT Mergers & Acquisitions
Briefing and Forecast
2009
Includes public and private transactions for six market sectors,
public peer group analysis and sector analysis
North America Corum Group Ltd.
10500 NE 8th Street, Suite 1500, Bellevue, WA 98004-4355 U.S. Tel: +1 425-455-8281
International Corum Group International S.à.r.l.
Beim Paradeplatz, Basteiplatz 7, 8001 Zurich, Switzerland Tel: +41 44-251-82-65
www.corumgroup.com
© CORUM GROUP – ALL RIGHTS RESERVED
Table of Contents
ABOUT CORUM GROUP............................................................................................................................. 4
A MESSAGE FROM CORUM’S CHAIRMAN .............................................................................................. 5
SENIOR DEAL MAKERS ............................................................................................................................. 7
2008 END OF YEAR OVERVIEW ................................................................................................................ 8
MARKET AND SECTOR DESCRIPTIONS ................................................................................................ 19
SOFTWARE INDUSTRY PUBLIC PEER GROUP VALUATIONS ............................................................ 20
TRANSACTION HIGHLIGHTS Q4 2008 .................................................................................................... 23
STRATEGIC BUYERS .................................................................................................................................. 23
CROSS-BORDER TRANSACTIONS ............................................................................................................... 24
LARGEST TRANSACTIONS .......................................................................................................................... 25
PRIVATE EQUITY BUYERS .......................................................................................................................... 26
SOFTWARE MARKET & SECTOR ANALYSIS, INCLUDING REPRESENTATIVE TRANSACTIONS .. 27
HORIZONTAL APPLICATION SOFTWARE ...................................................................................................... 29
Horizontal Application Software Valuations ......................................................................................... 31
M&A Transactions ................................................................................................................................ 34
Business Intelligence (BI) Transactions ........................................................................................................... 34
Communications (Horizontal) Transactions...................................................................................................... 37
Content Management (CM) Transactions ........................................................................................................ 42
Customer Relationship Management (CRM) Transactions .............................................................................. 45
Enterprise Resource Planning (ERP) Transactions ......................................................................................... 48
Human Resource/Capital (HR and HCM) Transactions ................................................................................... 49
Other Horizontal Transactions.......................................................................................................................... 51
Supply Chain Management (SCM) Transactions ............................................................................................. 54
VERTICAL APPLICATION SOFTWARE ........................................................................................................... 58
Vertical Application Software Valuations ............................................................................................. 61
M&A Transactions ................................................................................................................................ 64
A/E/C (Architecture, Engineering, Construction) Transactions ......................................................................... 64
Energy and Environment Transactions ............................................................................................................ 66
Financial Services Transactions ....................................................................................................................... 69
Government Transactions ................................................................................................................................ 77
Healthcare Transactions .................................................................................................................................. 81
Other Vertical Market Transactions .................................................................................................................. 89
CONSUMER APPLICATION SOFTWARE......................................................................................................... 99
Consumer Application Software Valuations ...................................................................................... 101
M&A Transactions .............................................................................................................................. 103
Digital Content Transactions .......................................................................................................................... 103
Gaming and Entertainment Transactions ....................................................................................................... 109
INFRASTRUCTURE SOFTWARE .................................................................................................................. 115
Infrastructure Software Valuations ..................................................................................................... 119
M&A Transactions .............................................................................................................................. 122
Communications (Infrastructure) Transactions............................................................................................... 122
Development Tools Transactions ................................................................................................................... 130
Legacy / Software Oriented Architecture Transactions .................................................................................. 133
Network Management Transactions ............................................................................................................... 134
Other Infrastructure Transactions ................................................................................................................... 137
Security Transactions ..................................................................................................................................... 141
Storage Transactions ..................................................................................................................................... 144
Systems Management Transactions .............................................................................................................. 146
Virtualization Transactions ............................................................................................................................. 148
INTERNET ................................................................................................................................................ 151
Internet Valuations ............................................................................................................................. 152
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Bellevue–Boston–Houston–London–Mexico City–Munich–Oslo–Paris–Philadelphia–Phoenix–Portland–Rio de Janeiro–Toronto–Zurich
M&A Transactions .............................................................................................................................. 154
Infrastructure Transactions............................................................................................................................. 154
Pure Play Transactions .................................................................................................................................. 164
IT SERVICES AND BPO ............................................................................................................................ 173
IT Services and BPO Valuations ....................................................................................................... 174
M&A Transactions .............................................................................................................................. 175
3
About Corum Group
Corum Group Ltd. is the global leader in merger and acquisition services, specializing in serving software
and information technology companies worldwide.
For nearly 25 years, Corum has created the standard for success. With offices in eight countries, Corum
has completed over US$6 billion in transactions spanning six continents. Corum also educates the
industry with its popular conferences and publishes the most widely distributed software M&A research.
Corum’s principals are highly experienced former tech CEOs, who are supported by the industry’s leading
researchers, writers and valuators. The company has spent more than US$20 million to build the world’s
largest and most comprehensive buyer database. This knowledge base, combined with Corum’s
experience and industry expertise, consistently ensures unequaled success in client engagements.
This M&A Briefing was prepared by Corum Group and may not be distributed to any third party without
the prior written consent of Corum Group.
The information in this report reflects prevailing conditions and our views as of this date, and is subject to
change accordingly. In preparing this M&A Briefing, we have relied upon and assumed, without
independent verification, the accuracy and completeness of information available from public sources. All
data was compiled from Corum’s proprietary M&A database and industry research, unless otherwise
noted. In addition, our analysis does not purport to provide appraisals of any assets, stock or business
entity, and should not be used as the basis for any investment decisions.
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© CORUM GROUP LTD. ALL RIGHTS RESERVED
A Message from Corum’s Chairman
For most owners of software and IT companies, 2009 will be the most challenging year ever. We have
never seen an economic collapse like this.
In our year-end report for 2006 we wrote an article discussing our concerns about problems we saw
brewing in the markets. Following is an excerpt: There is mounting concern about potential consequences
of enormous growth in debt and speculation and changes in the financial system. The President of the
New York Federal Reserve Bank, Timothy Geithner, feels that changes in the financial system since 1998
(and the selling of debt obligations to numerous buyers) have lessened the chances that relatively small
shocks will upset the entire system. Yet, “the same factors,” he wrote, “that may have reduced the
probability of future systemic events...may amplify the damage caused by, and complicate the
management of, very severe financial shocks. The changes that have reduced the vulnerability of the
system to smaller shocks may have increased the severity of the large ones.” That was 2006.
In 2009 and beyond, President Obama will be faced with many dire challenges, but the one he will likely
be judged on the most is whether he can save capitalism. Markets need certainty and predictability.
Where President Bush has seemed disconnected, President Obama will need to be in touch and enlist
the people’s help in dispelling the deep pessimism and its adverse effects, creating required reforms and
getting the system working again. It is, after all, “our problem” – not just the government’s or Obama’s.
It’s irrelevant whether they call it a recession, or depression; with systemic problems in the financial
community, business and consumer demand down, just surviving will be tough for many. As you well
know, the crisis is global, and conditions are not expected to improve anytime soon. In such an
environment, with almost no investment or IPO funds available, the primary route to liquidity is through
M&A. That is what this report is dedicated to- with detailed valuation metrics on 28 subsectors.
The McKinsey Group just stated in their year end report, “If you can’t survive hard times, sell out early.
Once you are in financial distress, you will have no bargaining power at all.” In the past, software and IT
firms could take their time in choosing the right window for a merger. However, with this economic storm,
many firms will find that they can only weather it by finding a partner.
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The good news is that deals are happening in our industry, and at a healthy pace. Indeed, Corum’s 4
quarter was the best in our 24-year history. The bad news is that valuations are down. But, they are not
out. And, most deals are for cash.
One of the reasons companies are agreeing to sell for lower valuations is because the money they
receive in today’s environment, relatively speaking, is worth more. It’s called the “wealth affect” – a dollar
today is worth as much as $1.50-2.00 compared to a couple of years ago when you consider what it can
buy in stocks, real estate, or collectibles. Also, the upside appreciation potential of those investments is
greater.
Further, the buyers are buying. They not only have a strategic imperative, but also have cash hoards built
over the last several years to pay for acquisitions. Additionally, there are more international buyers than
ever competing to acquire good companies - just look at Corum’s recent transactions.
If you believe that you should consider partnering, then you need to begin as soon as possible. Given the
time it takes to conclude a transaction, you have to begin early - don’t wait until the value of your firm has
eroded and you are in a defensive mode.
In such an environment, you need a plan of action, not only to reduce expenses but to expose your firm.
Going to market in this environment, with Corum’s help, has some very positive benefits beyond just
getting an acquisition offer. We call them the two M’s and two R’s (model, market feedback, research and
relationships).
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1. M - The process of preparation will help you tune and refine your business MODEL – you’ll
have a better run company.
2. R - The RESEARCH from the process will give you valuable insights into how to more
effectively position your company.
3. M - The process of talking to prospects provides extraordinary MARKET FEEDBACK about
your strengths, competition, product needs, etc.
4. R – While not every prospect can be the final buyer, many of them are open to value
enhancing business RELATIONSHIPS.
Doing nothing in such a tumultuous time, just waiting for further erosion of value, is not smart. Whether
you accept a merger offer is up to you, but these four additional benefits give you a positive action path, a
way to fight back in this economy and gain some invaluable benefits from the process.
Regards,
Bruce Milne
Chairman
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Senior Deal Makers
Corum Group Ltd.
Bruce Milne
Founder/CEO
Ward Carter
President
Nat Burgess
Mark Reed
Exec Vice President Exec Vice President
Bill Montgomer
Bill Montgomery
Sr. Vice President
Marshall Warwaruk Dick Davis
Vice President
Regional Director
Jeff Brown
Regional Director
Bruce Lazenby
Regional Director
Corum Group International S.à.r.l.
Miro Parizek
Frank Berger
Managing Director Regional Director
Morten Løfsnæs
Regional Director
Thomas Eggers
Regional Director
John Melotte
Regional Director
Jérôme Fougerat
Regional Director
Complete Corum Bios
7
2008 End of Year Overview
During the first three quarters of 2008, global
markets limped along in denial of the fact that
we were already in a recession. The fourth
quarter hit like a tsunami. Wall Street’s collapse,
bankruptcies, and slumping global economies
cast an ever-deepening shadow over business
activity worldwide.
We see plummeting
consumer confidence, nearly 2 million jobs lost,
soaring foreclosures and a drop in home
building continuing to fuel the worst financial
crisis in decades. Most economists think the
downturn is worsening steeply as 2008 ends
and any recovery will be delayed past mid-2009
and possibly into 2010. We likely don’t have to
reiterate to you how dire the situation has
become on many fronts.
To characterize M&A activity as dead or drying
up, however, is vastly incorrect. Much of the still
significant deal volumes in recent months have
revolved around smaller deals that don't depend
on giant financial institutions and global credit
markets.
In 2009, we expect that those
businesses without an adequate level of liquidity
will need to figure out a way to re-engineer their
capital position to survive the current cycle. For
the next few quarters, we can expect to see the
larger names continue to consolidate in an
attempt to steel themselves against the storm.
Buyers have an opportunity to acquire strategic
assets and build market share. Sellers need to
stress test their forecasts and recapitalize,
focus, and look for opportunities to be acquired.
The strategic tool of M&A will continue to be
attractive in the future across many markets and
sectors. As the focus turns to liquidity, even
well-capitalized companies will seek to sell
assets in a bid to strengthen balance sheets.
Uncertainty is rampant in times like this and
Corum understands that sound M&A advice
carries even more of a premium in difficult
conditions such as we now see.
Most people love statistics and here are some
that have come in:
Global merger volume dropped by almost
a third in 2008 to $3.28 trillion according to
Dealogic, ending five years of deal growth
as a lack of available credit, plunging stock
markets, risk aversion, valuation volatility
and a worldwide financial crisis combined
to undermine companies' ability to make
acquisitions. The global merger volume
marked the lowest annual volume since
2005.
In the fourth quarter, global merger volume
plunged 44 percent, making it the lowest
quarterly volume since the third quarter of
2004, Thomson Reuters’ data showed.
Deal volume fell in most major regions in
2008, with only China and Brazil showing
gains.
U.S. volume for 2008 plunged 38 percent
from a year ago, while fourth-quarter
volume slumped 55 percent. In Europe,
2008 volume dropped 29 percent.
By the count of research experts at The
451 Group, there have been tech mergers
and acquisitions worth $290 billion year-todate (through December 18) compared to
$481 billion in 2007, a drop of 40%. Of the
2008 total, private equity accounted for just
6 percent of the total versus 36 percent in
2007.
The full impact of stock market volatility
coupled with the freezing of the debt
markets began to take hold at the end of
this year as withdrawn deals reached
unprecedented levels. The trend for failed
deals set in the third quarter carried over to
this quarter, with 264 deals withdrawn
globally so far, according to data provider
Thomson Reuters. In fact, with the $27.9
billion Bell Canada leveraged buyout deal
falling through in Canada, the dollar value
for withdrawn/cancelled deals in the 4th
quarter is roughly equal to the dollar value
amount for completed deals. At 1,022, the
total number of deals scrapped in 2008 is
the highest in 10 years, compared with an
average of 804.
As the credit crisis intensified this year,
M&A in financial sectors made up 35.5% of
all deals, and sector consolidation is likely
to continue in 2009 as smaller European
and U.S. banks tie up with domestic peers,
and insurers start to merge.
Private Equity evaporated. So far this year,
U.S. publicly traded companies account for
about three-quarters of all tech M&A
spending. The top ten global deals include
zero private equity firms. We have to
question, however, what we should call the
United States Department of Treasury,
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which clocks in at number four for its
takeover of AIG.
Tough debt markets and homegrown
business problems are making many
potential acquirers hesitate, and we can
expect a drop in total M&A value, along
with a rise in all-share deals. According to
Thomson Reuters’ year-to-date data, allstock deals are already up 37.5 percent
while all-cash deals have plunged 40
percent, albeit from a much higher base.
Global stock markets have fallen steeply
this year -- the MSCI World Index of 23
developed-world markets had lost 43
percent by mid-December.
The average total return for this year’s IPO
class: -32%.
We are seeing an increase in bargain hunting
by well-capitalized buyers, merging of “like
companies” to create a larger entity, non-core
disposals by restructuring companies, and allstock defensive deals. Companies with cash, or
access to cash, have been taking advantage of
the downturn to roll up competitors or extend
their product lines. One big constraint on deal
making is banks' continued reluctance to lend.
The leveraged loan market, which powered the
boom-era buyouts, has all but shut down as
banks repair balance sheets and grapple with
higher funding costs. Acquisition finance,
however, continues to be available for the “right
deals”.
Private equity funds are no longer able to fund
deals through cheap debt but they may find
other ways to spend an estimated $450 billion
of capital, relying more on equity. PE firms are
trying to shore up performance of their portfolio
companies in the wake of the global recession
and, in certain cases, are dealing with highly
leveraged companies where refinancing their debt
will be very difficult in this credit environment.
They will have to make some hard decisions as to
which of those companies will survive, which will
be sold in distressed conditions, and which will be
left to expire.
Corum expert Nat Burgess predicts that an
astonishing
percentage
of
VC-backed
companies will close their doors or go out in fire
sales over the next three years, and there really
isn’t anything the investors can do about it.
Customers are tightening their budgets and
allocating less of their budgets to startups,
follow-on rounds are reserved for the
superstars, and the buyers are smart enough to
sit back and wait.
While we are in uncharted territory in attempts
to predict this economic rebound, consensus
would seem to be that the drop in M&A activity
volume will continue in 2009 and bottom out at
some point in early to mid-2010, with a peak-totrough decline of about 45 percent from the
cyclical peak levels of 2007. A 45 percent
decline this cycle is nowhere near as steep as
the one that occurred in the last downturn from
2000 to 2003, after the tech bubble burst. Back
then, M&A activity saw a peak-to-trough decline
of 70 percent.
According
to
multiple
analyst
reports,
technology giants such as Microsoft and Google
plan to continue snapping up companies during
the economic downturn. They will likely benefit
from an ability to drive a hard bargain, even with
red-hot start-up companies. While the software
majors’ appetites for acquisitions haven’t
waned, the willingness to entertain high
valuations has. According to a Microsoft
statement, “The negotiations on valuation might
be difficult, but we’re not going to stay away
because of the economic climate.” Google
echoed that, describing the “dislocation
between what many start-up companies now
put their value at and Google’s take on the
matter. Until that gets reconciled, Google
believes it’s going to be a little bit harder to get
deals done.” Using Microsoft and Google as
examples is easy. Remember, however, though
they have remained relatively insulated from the
direct impact of the economic downturn, their
own valuations have taken a significant hit.
The smaller, strategic deal - acquiring
specialized technologies rather than big,
transformative mergers - has by far become the
most likely exit strategy for companies today.
Growth oriented software companies have
developed this type of acquisition with well
defined processes, almost a type of outsourced
R&D facility. The value of the smaller M&A
announcements is often hard to gauge as they
are often not disclosed by acquirers. The sheer
numbers of them do, however, underscore the
ongoing importance of acquisitions as a growth
vehicle on the one side and as an exit strategy
on the other, even in turbulent times.
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We saw relatively strong volumes in smaller
strategic acquisitions continue throughout 2008
and expect this trend to continue in 2009. The key
to maintaining near-term M&A volume rests on
the companies with meaningful cash on their
balance sheets. Since the technology sector
likely has the largest number of healthy balance
sheets (lots of cash and little to no debt), we
think it is fair to expect the tech sector will be
leaders in an M&A recovery, even if the
economy doesn't pick up until 2010.
th
4 Quarter Deal Volume Recap
Announced deals by industry sector:
Industry
Grand Total
Financials
Industrials
Utilities
Energy
Telecommunications
Services
Technology
Basic Materials
Non-Cyclical
Consumer Goods /
Services
Cyclical Consumer
Goods / Services
# of
Deals
8,602
1,633
1,973
274
357
166
Value
($M)
441,914.0
238,599.0
36,794.9
32,513.2
25,569.2
23,937.7
893
853
630
21,617.2
18,905.4
17,612.3
1,355
13,460.9
Source: Reuters
Headlines often tell the story:
M&A in the Bargain Aisle
December 2008 – Red Herring
Will There Ever Be Another Tech IPO?
December 2008 – Barrons
Predicting More Declines for M&A
December 2008 - DealBook
M&A Deals Suffer Market’s Pain
October 7, 2008 – Wall Street Journal
M&A World Continues to Spin butat a Slower
Pace
July 2008 – Wall Street Journal
Lets Still Make a Deal
June 2008 – Business Week
Deal Making: It Shall Return
May 2008 – Wall Street Journal
Wall Street Beat: IT M&A Provides
Opportunities
March 2008 – Washington Post
An excerpt from Corum’s 2006 Year End Report:
There is growing concern about potential
consequences of growth in debt and speculation and
changes in the financial system. The President of the
New York Federal Reserve Bank, Timothy Geithner,
feels that changes in the financial system since 1998
(and the selling of debt obligations to numerous
buyers) have lessened the chances that relatively
small shocks will upset the entire system. Yet, “the
same factors,” he wrote, “that may have reduced the
probability of future systemic events...may amplify
the damage caused by, and complicate the
management of, very severe financial shocks. The
changes that have reduced the vulnerability of the
system to smaller shocks may have increased the
severity of the large ones (September 15, 2006,
Federal Reserve Bank of New York).”
In 2009 and beyond, President Obama will be faced
with many dire challenges, but the one he will likely
be judged the most on is whether he can save
capitalism. Markets need certainty and predictability.
Where President Bush has seemed disconnected,
President Obama will need to be in touch and enlist
the people’s help in dispelling the deep pessimism
and its adverse effects, creating required reforms
and getting the system working again. It is, after all,
our problem – not just his.
Trends and Drivers
The major trends and drivers in M&A in the
software industry include:
Market turmoil/caution spreads
Cash remains leading deal structure, but stock
and earnout increasing
Smaller, tuck-in acquisitions continue to make
sense - often equivalent to outsourced R&D
M&A is “business as usual” for growth minded
companies - the pursuit of growth through deal
making is backed by professionals and refined
processes
IPOs nonexistent – M&A remains the primary
exit strategy
Divestitures have increased due both to
competitive forces and to the need to reinvent
2008 Top Deals
Tech giants such as Microsoft, HewlettPackard, EMC, Cisco Systems and Oracle have
spent the last several years bulking up through
a steady stream of acquisitions. HP, for
example, has increased its annual revenue to
$118.4 billion this year, from $45 billion in 2001.
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Oracle has doubled its annual revenue over a
similar period to more than $22 billion. EMC
traced 76 percent of its revenue to hardware in
2000, but it now derives 57 percent from
software and services, thanks to acquisitions.
These
companies,
along
with
Sun
Microsystems and IBM, have scooped up many
of the prized assets that either survived or
thrived in the era after the dot-com bust,
fattening their software and services arsenals.
Though this has been a tougher year for deals,
we can expect that many companies will
continue growth plans through acquisitions,
downturn or not.
The software and IT highlight deals of 2008
(based on publicly disclosed transaction values
over $500 million):
HP-EDS: $13.9 Billion – HP boasted in May
when it announced the deal that it would
double the company's services revenue and
put it into the No. 2 spot in the IT business
services market behind IBM. More recently,
HP detailed massive job cuts – 24,600 of
them.
Oracle-BEA: $8.5 Billion – BEA stared
down Oracle and got a better deal in
January than the original $6.7 billion offer
from a few months earlier.
Brocade-Foundry: $2.6 Billion – The
combination of Brocade and Foundry is
seen as a direct effort to combat Cisco with
a broader data center product collection,
exploiting Brocade's strength in storage
networking and Foundry's powerful routers.
Apax Partners-TriZetto Group: $1.4 Billion
– Apax is a private equity group and
TriZetto is a provider of core administration
software,
professional
services,
and
business process outsourcing for the
healthcare industry.
Microsoft-FAST Search and Transfer:
$1.2 Billion – Microsoft, suggesting that
enterprise search has hit a tipping point,
announced plans in January to acquire this
Norwegian company. Unfortunately for
Microsoft, the FAST deal hasn't been
entirely smooth, as the Oslo-based outfit
was charged with accounting fraud in
November by Norwegian police.
Sun-MySQL: $1 Billion – The deal gives
Sun a stronghold in the open source
software market, though it also pits the
company even more directly vs. big
companies such as Oracle, IBM and
Microsoft. Sun foresees big opportunities for
database sales into those building webbased businesses.
eBay-Bill Me Later: $945 Million – The
acquisition
extends
the
company’s
leadership in payments by combining Bill
Me Later with eBay’s PayPal, the number
one online-oriented payments brand. eBay
believes Bill Me Later is a perfect
complement to its portfolio and PayPal and
Bill Me Later belong together.
AOL-Bebo: $850 Million – Together with its
AIM and ICQ personal communications
network, the acquisition will give AOL an
excellent position in the fast growing world
of social media with a network of
approximately 80 million unique users.
BMC Software-BladeLogic: $800 Million –
BMC in March announced plans to acquire
the data-center automation vendor in a deal
designed to boost its business service
management and automation products.
BladeLogic at the time had 70 customers
and was expected by IDC to deliver $90
million in fiscal 2008 revenue.
Symantec-MessageLabs: $695 Million –
For Symantec, the acquisition gives it an
alternative e-mail security offering to
BrightMail, the company's anti-spam and
antivirus appliance. MessageLabs offers a
hosted spam and web traffic filtering
service.
Gores/Siemens-Enterasys: $550 Million –
Enterasys will be combined with Siemens'
Enterprise Communications group, of which
a controlling interest was acquired by The
Gores Group, the private equity firm that
owns Enterasys. Gores will also include its
SER Solutions call center software
company in the joint venture. The result will
be a $5 billion firm with more than 1 million
customers. Gores will own a 51% stake in
the joint venture while Siemens retains 49%
ownership.
M&A Performer Spotlight – Electronic Arts
Every quarter we like to spotlight companies
that have a long history of successfully utilizing
an M&A strategy as a powerful tool for growth.
Electronic Arts (Nasdaq: ERTS) was founded in
1982 and is headquartered in Redwood City,
California. EA is the world's leading interactive
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entertainment software company with 2008
revenues of $3.67 billion and 9,000 employees
worldwide.
EA develops, publishes, and
distributes interactive software worldwide for
video game systems, personal computers,
cellular handsets and the Internet. In FY 2008,
EA had 27 titles that sold over 1 million copies,
and seven titles that sold over 3 million copies,
including FIFA 08, Madden NFL 08, Need for
Speed Pro Street, The Simpsons, Harry Potter:
Order of the Phoenix, Need for Speed Carbon,
and Rock Band.
In 1982, Electronic Arts was founded on ideas.
According to their vision, EA called software a
new art form and its creators were software
artists. The Company believed that interactive
was better than passive media, and that one
day “software worthy of the minds that use it”
would be more important than traditional media
like films and television. More than 25 years
have passed, and many of the dreams have
come true. Video games are woven into the
fabric of most young men’s lives, and
increasingly popular with women and seniors.
Game designers are renowned worldwide.
Leading universities have pioneered successful
degrees in game development. In short, video
games, once considered a passing fad, have
earned respect.
Though
the
headline-making
Take-Two
acquisition was dropped this year, Electronic
Arts Inc. has made 29 other acquisitions and
took stakes in 11 other companies since 1991.
We salute their successful use of M&A as a tool
for growth.
Year
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
Acquisitions
4
3
4
0
2
1
0
2
2
1
2
1
2
2
1
0
1
Stakes
0
0
0
2
1
1
0
0
1
0
1
1
2
2
0
0
0
1991
Total
1
29
0
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Like many firms right now, EA’s stock is taking a
beating as analysts are fretting that sales
growth could fall below 10% in fiscal (March)
2010. EA reportedly still has more than $2
billion in cash, which could be used to buy
revenue growth in 2009 and 2010. It may need
to as there is talk about desirability issues with
its game lineup. Demand for video games
overall remains high, though there are
additional
pressures
coming
from
the
weakening economy with retailers cutting
inventory in the face of tighter credit conditions.
Still, rumors are beginning to surface that there
is a potential that EA could be the next industry
blockbuster acquisition. Remember, while not
all rumors are true, we generally find that there
is some basis in fact in them. We could
speculate that Disney is a candidate. Disney is
likely to see weak global demand due the high
cost of family vacations in these tough times,
but video games are far more economical for
consumers when you consider the expense of
travel and have a better chance of boosting
sales in a downturn.
Technologies and Trends Spotlight
We have discussed various newer technologies
in recent quarters. If the economy itself forces
IT to transform, what technologies will be the
focus for 2009 and a down economy?
Fortunately, there are still plenty of trends out
there that are begging to be applied profitably,
both now and long-term.
But while the outlook for IT spending is appears
as though it could be grim overall, customers
are still expected to spend big on radically
market-altering trends such as cloud computing,
virtualization, Web 2.0 and “Green IT”. As a
result, these disruptive technologies will be
among the highest growth sectors in 2009 as
their advantages are magnified in a down
economy, and suppliers who slow down their
transformation will limit long-term viability and
miss near-term growth.
In its annual list of disruptive technologies,
Gartner Group looked at factors like high
potential for disruption to IT or the business, the
need for a major financial investment, or
12
IDC says it well: “Hammered by the global
recession, many players in the IT industry
will have to undergo radical changes to
simply survive. Vendors, hunkering down
in these tough economic times instead of
transforming themselves to leverage
disruptive or market-altering technologies
could mean a heavy price. Major
economies will be close to flat, and the
downside scenario would take them below
zero percent growth -- they'll pay and it
looks as if IT growth could go down to
around two percent. IT industry growth was
seven percent in 2007 and fell to five
percent in 2008, and it will take three years
for the industry to return to the 2008 growth
rate.”
the risk of being late to adopt. These
technologies impact the organization’s longterm plans, programs and initiatives. They may
be strategic because they have matured to
broad market use or because they enable
strategic advantage from early adoption.
Virtualization – In addition to server
virtualization, virtualization in storage and client
devices is also moving rapidly as a way to
eliminate duplicate copies of data on the real
storage devices while maintaining the illusion to
the accessing systems that the files are as
originally stored (data deduplication). This can
significantly decrease the cost of storage
devices and media to hold information.
Hosted virtual images deliver near-identical
performance to blade-based PCs. But, instead
of the motherboard function being located in the
data center as hardware, it is located there as a
virtual machine bubble. However, according to
Gartner, despite ambitious deployment plans
from many organizations, deployments of
hosted virtual desktop capabilities will be
adopted by fewer than 40 percent of target
users by 2010.
Cloud Computing – Cloud Computing
providers deliver computing capabilities “as a
service” to external companies and the services
are delivered in a highly scalable and elastic
fashion using Internet technologies and
techniques. Although cost is a potential benefit
for small companies, the biggest benefits are
the built-in elasticity and scalability, which not
only reduce barriers to entry, but also enable
these companies to grow quickly. As certain IT
functions are industrializing and becoming less
customized, there are more possibilities for
larger organizations to benefit from Cloud
Computing. As Cloud Computing adoption
begins to accelerate, Software as a Service and
cloud storage players will be among the first
major beneficiaries.
Based on a survey of IT executives, CIOs, and
other business leaders, IDC concurs and
expects spending on IT Cloud Services to grow
almost threefold in the next five years, reaching
$42 billion by 2012. IDC differentiates between
the concepts of Cloud Services and Cloud
Computing. Cloud Services are defined as both
business and consumer services that people
use over the Internet, and Cloud Computing is
the emerging IT development, deployment, and
delivery model that will enable real-time delivery
of products and services over the Internet.
Amazon
Web
Services
has
amassed
tremendous mindshare and a rapidly growing
amount of revenue from the tens of thousands
of customers now using its Cloud Computing
services platform.
While more and more
companies deliver services to customers via the
web, so the need will grow for all the key
ingredients of Cloud Computing, namely
scalable infrastructure, cloud applications, cloud
development/deployment,
cloud-oriented
management tools, and IP networks.
Servers – Servers are evolving beyond the
blade server stage that exists today. This
evolution will simplify the provisioning of
capacity to meet growing needs. The
organization tracks the various resource types,
for
example, memory,
separately and
replenishes only the type that is needed, so
companies don’t have to pay for all resource
types to upgrade capacity. It also simplifies the
inventory of systems, eliminating the need to
track and purchase various sizes and
configurations. The result will be higher
utilization because of lessened “waste” of
resources that are in the wrong configuration or
that come along with the needed processors
and memory in a fixed bundle.
Web-Oriented Architectures – The Internet is
arguably the best example of an agile,
interoperable and scalable service-oriented
environment in existence. This level of flexibility
is achieved because of key design principles
inherent in the Internet/Web approach, as well
13
as the emergence of web-centric technologies
and standards that promote these principles.
The use of web-centric models to build globalclass solutions cannot address the full breadth
of enterprise computing needs. However,
Gartner expects that continued evolution of the
web-centric approach will enable its use in an
ever-broadening set of enterprise solutions
during the next five years.
Enterprise Mashups - Enterprises are now
investigating taking mashups from a cool Web
hobby to enterprise-class systems to augment
their models for delivering and managing
applications.
Through 2010, the enterprise mashup product
environment will experience significant flux and
consolidation, and application architects and IT
leaders should investigate this growing space
for the significant and transformational potential
it may offer their enterprises.
Specialized Systems – Appliances have been
used to accomplish IT purposes, but only with a
few classes of function have appliances
prevailed. Heterogeneous systems are an
emerging trend in high-performance computing
to address the requirements of the most
demanding workloads, and this approach will
eventually
reach
the
general-purpose
computing market. Heterogeneous systems are
also specialized systems with the same singlepurpose imitations of appliances, but the
heterogeneous system is a server system into
which the owner installs software to accomplish
its function.
Social Software and Social Networking –
Social software includes a broad range of
technologies, such as social networking
(Facebook), social collaboration, social media
and social validation. Organizations should
consider adding a social dimension to a
conventional web site or application and should
adopt a social platform sooner, rather than later,
because the greatest risk lies in failure to
engage, thereby being left mute in a dialogue
where your voice must be heard.
Unified Communications – During the next
five
years,
the
number
of
different
communications vendors with which a typical
organization works with will be reduced by at
least 50 percent due to increases in the
capability of application servers and the general
shift of communications applications to common
off-the-shelf server and operating systems. As
this occurs, formerly distinct markets, each with
distinct vendors, converge, resulting in massive
consolidation in the communications industry.
Organizations must build careful, detailed plans
for when each category of communications
function is replaced or converged, coupling this
step with the prior completion of appropriate
administrative team convergence.
Business Intelligence – Business Intelligence,
the top technology priority in Gartner’s 2008
CIO survey, can have a direct positive impact
on a company’s business performance. BI is
directed toward business managers and
workers who are tasked with running, growing
and transforming the business. Tools that let
these users make faster, better and more
informed decisions are particularly valuable in a
difficult business environment.
Green IT – Shifting to more efficient products
and approaches can allow for more equipment
to fit within an energy footprint. Regulations are
multiplying and have the potential to seriously
constrain companies in building data centers, as
the effect of power grids, carbon emissions from
increased use and other environmental impacts
are under scrutiny. Organizations should
consider regulations and have alternative plans
for data center and capacity growth.
Enterprises and vendors can expect to see
sustainable technology thriving in 2009, with
Green IT initiatives such as virtualization,
space-efficient storage and cloud services being
promoted under the umbrella of cost savings.
Enterprises will be able to snap up offerings that
promise a near-term payback, but bigger ticket
Green IT projects will temporarily be put on
hold. Based on the green aims of the Obama
administration, the focus in 2009 will likely be on
energy efficiency and conservation.
IPOs
It is hard to remember a worse year for Initial
Public Offerings. As of the middle of December,
there have been just 43 U.S. IPOs this year
which raised at least $50 million, down from 272
in 2007, and the slowest year since 1979
according to figures by the National Venture
Capital Association and Barrons. Total U.S. IPO
proceeds were $28 billion, down from $59.7
14
billion in 2007. That was the lowest total
proceeds since 2003 - and if you back out the
$18 billion IPO for Visa (V), the year’s largest
debut, it was the worst year since 1990.
Just 4 tech or communications companies came
public this year, down from 69 last year. The
last significant tech IPO was Rackspace (RAX),
a web hosting company, which raised $187.5
million in August; the stock has since dropped
51.2%. You might wonder how many Internet
content, commerce or social networking
companies had IPOs and the answer would be
– none.
The average total return for this year’s IPO
class: -32%.
Proceeds for venture-backed deals totaled
just $600 million, down from $10.6 billion in
2007.
Private equity-backed companies raised
$1.4 billion, down from $11.5 billion.
Valuations
We just close the books on the worst market
performance since the end of WWII. Most
major indices posted losses of 30% to 40% for
the year. The equity market declined relatively
slowly and steadily in the first three quarters of
the year. By the beginning of the fourth quarter,
it got really ugly. The DOW fell 19% in the fourth
quarter alone, and the NASDAQ was hit even
harder with a drop of25% in the same period.
Many in the financial world (including U.S.
Policymakers) did not anticipate the severity of
the housing and mortgage problems. By the
time Policymakers were ready to act, the rapid
chain of events had already brought the credit
markets to its knees – lending seized up
completely. Banks were no longer willing to
lend money to anyone, including other banks.
Businesses were unable to able to acquire debt
to keep operations going and in some cases
banks cut existing line of credits. This caused
panic in the equity market, and valuations fell
hard and fast.
Relative valuation multiples of public peer group
that Corum tracks for six major software and IT
sectors experienced a similar trajectory as the
DOW and NASDAQ over the course of 2008.
Enterprise Value to Sales multiples (EV/S) of
the six peer groups dropped an average of 40%
for the year. The sectors with biggest declines
in Q4 versus the previous quarter were
observed
in
the
Internet,
Consumer
Applications, and Horizontal Applications which
fell 53%, 38%, and 39%, respectively. The
other three remaining sectors (Vertical Market
Applications, Infrastructure, and IT Services &
BPO) also experienced double digit declines in
the 10% - 25% range.
Although the U.S. government stepped in to
provide bailouts to a few industries, there is
evidence that declines will continue all the way
through 2009. 1) Credit markets remained tight
even though the Federal Reserve is doing
everything they can to encourage the flow of
capital. They slashed interest rates to an all
time low of 0.50%, reduced reserves
requirements for banks, and announced that
they will be buying Treasuries or agency bonds
in a bid to drive yields lower and provide
liquidity. 2) Global consumer demand is down
dramatically. Retailers are reporting one of the
worst holiday sales numbers ever, and
businesses had to offer deep discounts to
entice consumers. 3) U.S. unemployment rate
has soared to the highest level in 16 years at
7.2%. Just in the month of December, the U.S.
labor force lost over 500,000 jobs, and more
companies are preparing to trim additional
expenses as they fear a prolonged recession.
It is clear that nearly all companies will be
impacted by the biggest financial crisis of our
lifetime which has completely reshaped Wall
Street and all major players. No doubt markets,
valuation, and volatility will eventually return to
normal levels. The question that needs to be
answered is, “Will your company still be
around?”
International M&A Markets
Uncertainty is very dramatic in this period of
time and even more dramatic in cross-border
situations. Europe was last year’s biggest M&A
market. The headlines read “Europe has
emerged as the world's biggest market for
mergers and acquisitions so far in 2007.” The
slowdown that started with the credit crunch last
summer, has, spread and is now undermining
much of the economic activity that allowed the
M&A boom in Europe along with the U.S.
European M&A volume as a whole is down to
$1.2 trillion in 2008 as of December 15, down
33% from $1.8 trillion during the same time in
2007, Dealogic data shows. Western Europe
15
M&A volume is down 36%, Eastern Europe
26% and Nordic M&A volume is down 10%.
Emerging BRIC (Brazil, Russia, India and
China) markets have helped take some sting off
the crisis in 2008. Many of the emerging market
groups have very good management and very
lowly geared balance sheets as well as
experience in dealing with economic volatility
and high inflation. To an extent this contrasts
with many Western companies which have
borrowed money often to buy back shares and
raise dividends. Meanwhile, many emerging
market groups have put more emphasis on
developing their products, services and brands
and acquiring Western assets that are useful to
their growth.
Brazil – The Brazilian economy, with 15,000 R$
per head, is now in 8th place among nations
and ahead of Spain. When traveling through
South America, you’ll find the R$ standing solid
as a rock. Within the hemisphere, it is
appropriate to compare its strength to the
German DM before the € was introduced in
Europe 10 years ago.
The Brazilian IT industry is set to become a
formidable player in the hemisphere. The
important slide of the R$ in the 2nd half of 2008
will be of help for Brazilian IT firms to strengthen
competitiveness, including for outsourcing
services. Talent is available, as society has
invested in IT education, and universities
‘produce’ more than 20,000 IT engineering
graduates annually. Entrepreneurship and
Government incentives are underway to help
propel IT-derived exports to 5 bn. US$ by 2010.
The Brazilian economy is thought to achieve
one of the highest growth rates in the coming
decade, driven on the one side by consumption
(a young work force, steadily-improving
education, slowing demographic growth,
growing middle class) and on the other side
serving the world with commodities (food, oil
and gas, metals).
We have seen a consolidation move in Brazil in
2008, including with the friendly takeover offer
for Datasul by TOTVS (both companies made
several acquisitions of their own in 08 and
previous years), the acquisition of ATAN by
Accenture, and the merger of several System
Integrators into R$ 100m + national behemoths,
including BBKO-Hold, Virtus (Dedalus), or BRQ
thru several acquisitions.
Brazilian venture
capital and private equity firms have recently
invested in software and backed some of the IT
service firms’ consolidation moves.
The
appetite for entrepreneurship and taking an
active role in globalization can certainly be felt
with these investors and company founders, a
decisive leap forward for Brazilian society.
Brazil provides IT entrepreneurs with a great
opportunity within the national and regional
context. With IT companies having looked at
Asian and Eastern European opportunities for
the past 20 years first, Brazil and Latin America
certainly offer one of the greater opportunities
for the next decade. Be sure you become part
of that exciting movement.
India – Indian markets are in a transition phase.
On a year-to-date basis (mid-December) the
total deal value in India is slightly over $28
billion, according to the India Business Journal.
With the global market turmoil, Indian firms
expect an overall slump in valuations and some
moderation of the total deals in value and
volume terms in 2009. At a macro level, the
driving force for the M&A activity in India will be
relatively higher economic growth fuelled by
domestic consumption, weaker rupee and
attractive share valuations. At a company level,
focus on M&A will stem from the need to
expand or consolidate presence in the emerging
markets like India and China, renewed focus to
achieve cost efficiency aimed at protecting
margins and relative maturity of various
industries. In the Indian context, several
industries are transitioning from a `pioneering'
phase to a `rapid growth' phase. The current
economic environment is likely to trigger
consolidation in some of these industries like
IT/BPO, pharma, retail, etc., both inbound and
outbound. In the current economic environment,
rapid expansion-led M&A will be replaced by
boards and CEOs focusing on reassessing the
core versus non-core businesses, attempting to
create a differentiated position in the market
and also to achieve economies of scale. The
result will be a more proactive M&A approach
with a view to create long-term sustainable
value for all the stakeholders.
China – While not a tech heavy market,
Chinese target M&A has just hit its highest
volume ever. According to the latest deals
intelligence from Thomson Reuters (November
30), Chinese target M&A volume reached $76.1
billion in the year-to-date 2008 periods – the
16
highest year-to-date and full-year level in
history. The Thomson Reuters intelligence
found the previous record was in 2007, when
Chinese target M&A volume reached $75.8
billion for the full year. China accounts for 2.9
per cent of total worldwide M&A, with materials
targets leading all transactions, followed by real
estate, financials, industrials, energy and power
and consumer staples. The substantial amount
of domestic M&A occurring in China is reflective
of the rapid economic growth of the past few
years. Regulatory changes for M&A, including
revisions to regulations on foreign investment in
the telecommunications, mining and commercial
sectors, have contributed to the increase in
M&A deals in China. The economic slowdown
will inevitably affect investment into China from
overseas, but will not necessarily contribute to a
slowdown in outbound investment from China –
particularly directed to assets in the energy and
resources sector.
Chinese banks have long been barred from
offering more sophisticated financial tools such
as equity-linked loans or convertible bonds to
finance takeovers within China. But in a surprise
policy shift in December aimed to level the
playing field, Beijing said it would allow its
banks to lend money to Chinese enterprises to
buy smaller domestic rivals, one of a number of
measures announced to promote consolidation
and economic growth. Armed with a war chest
of $2 trillion in personal savings, Chinese banks
are expected to begin arranging financing for
such deals in early 2009.
Japan – Also not seen regularly in industry
shaping non-hardware tech deals, Japan has
scooped up assets battered by the global
financial crisis as it expands outside its mature
home market, armed with some $660 billion in
cash and a strong currency. Japanese firms
bought $72.5 billion worth of overseas
companies this year, compared with $24.4
billion a year ago, according to Thomson
Reuters. Japanese firms are unlikely to be quite
as aggressive in 2009. Corporate profits are set
to fall for the second straight year in fiscal 2009,
hit by a brutal global economy and the surge in
the yen. Most Japanese firms have cut
production and staff.
IT M&A Market Editorial
Corum Executive Vice President, Nat Burgess
shares his thoughts on current market
conditions.
Corum’s end of year merge briefing provides all
of us an opportunity to identify trends and
dynamics that characterized the prior period, to
figure out which ones will carry forward, and to
speculate on new trends that will take hold.
However, we are currently bombarded with
reminders that “everything has changed.”
Market volatility, the death of investment
banking as we know it, the hedge fund
shakeout, and the near collapse of several
national economies have all sparked a media
frenzy that is further fueled by extraordinary
volatility in the equity markets and an
extraordinary lack of a velocity in the credit
markets.
But let's take a step back and focus on what this
means for those of us who operate within the
technology sector.
First of all, the meltdown in the financial markets
will act as an accelerant rather than decelerant
on existing IT trends. Software as a Service
became a fashionable delivery mechanism
again in 2005 (after being rebadged from the
“ASP” of the late ‘90s). The recurring revenue
models that characterize software as a service
are no longer just fashionable, they are a
necessity for the survival of technology
companies. Firms that rely on new sales to
survive will be in trouble this year.
Second, the end has been nigh for IPOs as a
viable exit option for 8 years, and now it is here.
A savvy private equity firm could still put
hundreds of millions of dollars to work in order
to create an IPO vehicle, but their returns would
be distant and uncertain. For the rest of us, IPO
simply is not an option.
Third, the migration of enterprise computing into
the cloud may not be accelerated by the
economic downturn but it will certainly be
considered more and more frequently as an
option as companies debate increasing their
fixed costs in a captive data center versus
accessing resources in the cloud.
Finally, search will be proven this year or next
as the new killer app for the enterprise. Search
represents a means of getting more value from
17
existing IT infrastructure and data without a lot
of risk or expense. Search is a fascinating
phenomenon, and under-appreciated by
traditional enterprise applications vendors. I
believe that the explosive growth of IT
infrastructure in the enterprise over the last 15
years has created as many barriers as benefits
to the flow of information. Work that used to
involve human interaction and workflow
processes that triggered or involved interaction
are now managed through data flows that are
increasingly unavailable and cryptic to
knowledge workers. Search offers a way to
regain the corporate information that is locked in
e-mail threads, forums and archives.
I can't overstate the impact of our current
economy on all of us individually and on our
companies. The template for the next 20 years
of history is being written now. Many firms
simply will not survive the deepening recession,
but others will emerge onto a new playing field
with extraordinary opportunities.
We have
issued a call to action. We believe that
companies should take defensive measures
now as market conditions deteriorate. We have
taken this stand in our speaking engagements
and publications, and will continue to do so.
However, we can also look at some of the
factors that give us hope. Unlike the dot.com
meltdown, the current economic crisis is not
triggered by a tech bubble. In fact, it was
triggered primarily by excessive leverage in the
financial sector.
Damage to the tech sector is primarily collateral.
Certain categories which had received
investment but have not yet achieved sufficient
revenue will collapse -Web 2.0 and social
networking companies will bear the brunt of this
- but the sector itself is not being eradicated in
the current turmoil. IT spending will be cut both
for new purchases and for existing maintenance
and subscription contracts, and that will hurt all
of the vendors. Cuts in IT spending appear to
be lagging the public markets by one to two
quarters, which means we haven’t seen the
worst yet.
Buyers are doing deals. Buyers are confident
that they are in a buyer’s market and they are
pursuing transactions, albeit at lower valuations.
At some point in the next 2 to 4 quarters this
positive sentiment will give way to a paranoid
lockdown and the publicly traded firms will
freeze acquisitions while the vultures step up to
buy assets at pennies on the dollar. In other
words, a seller who intends to sell within the
next three years had better find a deal in the
next few months, or resolve to wait out the
market.
Time to Sell
Regardless of the broad economic conditions,
technology-related deals can present unique
challenges, especially in the areas of
sustainability of the business model, quality of
revenues and cash flows, intellectual property
and intangible valuations, and cultural and
merger integration. Sellers need to ensure they
have the appropriate expertise and external
transaction advisory professionals to sort
through the myriad complexities to derive the
best possible structure, terms, and fit.
Technology M&A has seen downward cycles in
the market before. During the dot-com bust,
M&A all but dried up, and thus we witnessed a
dramatic lull in the market. However, even
during those tumultuous times, buyers stayed
the course and continued to look for value-add
opportunities. As the market settled and we
emerged from the dot-com meltdown, sellers in
the marketplace were in an opportune position
to be acquired. The lull we are experiencing
now is no different. Those properly positioned in
the marketplace will have a decisive advantage
as we emerge from the current state of affairs.
Beyond economic factors, the timing of an M&A
event is perhaps the most critical factor in
achieving M&A goals, dramatically affecting
valuation and success rate. Timing can depend
on where you are in your company's lifecycle:
positive momentum in terms of revenue and
earnings growth, customer wins and new
product releases. Outside industry events
should also be taken into consideration when
contemplating M&A timing: a competitor’s
acquisition, increased deal activity signaling
consolidation, or entry into your market by a
larger company. Overlying all of these variables
is the sensitive nature of the global economy.
As is usually the case in M&A, the earlier you
are acquired in a technology shift or
consolidation period, the better position you will
find yourself in negotiations.
18
Market and Sector Descriptions
In response to the changing marketplace along with Corum’s readers and client needs, Corum’s research
department has re-aligned the way we view the software and IT industry. With this new alignment we
hope to provide a clearer picture of the software and IT landscape, while continuing to provide a granular
view of what is happing in regards to software and IT mergers and acquisitions.
Application Software
We typically view the application software industry in three major categories: horizontal
applications, vertical or departmental applications, and consumer applications.
Horizontal Applications — Business application software companies offer applications that can
govern the entire enterprise, and/or specific functions/business units. In addition, these solutions
govern business communications within the enterprise. Due to heavy consolidation, business
application software as a sector has become very broad in scale and includes Enterprise
Resource Planning (ERP), Customer Relationship Management (CRM), Business Intelligence (BI),
Human Resources (HR), Content Management (CM) and Supply Chain Management (SCM).
Vertical Market Applications —Vertical market and departmental application software companies
sell software applications to narrowly defined or niche segments of a market. In other words,
vendors in this space develop software which is usually consumed by a specific industry. Niche
solutions come in many flavors and serve a multitude of industries, both large and small. Vertical
markets include financial services, healthcare, government, non profits, energy, legal, and A/E/C
(Architecture, Engineering, Construction) among others. The application could be an enterprise
level application sold to a small, medium or large sized business or an application critical to the
operations of a single department of an enterprise.
Consumer Applications — Consumer applications are those which are sold to the general public
through any one of a number of direct or indirect channels including retail outlets, Internet or mail
order. Two of the main types of consumer applications are digital content and games.
Infrastructure — Infrastructure software companies sell the “plumbing” needed to operate,
control, manage and protect the computing resources on which businesses of all types rely.
Infrastructure software covers application enabling technologies for companies of all types and
sizes. The category includes: system management software, network management software,
virtualization, storage software, backup/recovery software, security software, VoIP and software
development tools.
Internet — The Internet is the primary way to deliver content of all kinds directly to consumers and
a platform on which applications of all kinds and their users depend. Trying to define a line
between the Internet and other software technology segments that Corum tracks is hard to do.
The Internet is infrastructure and applications and content. The companies we put in this segment
are essentially those that could not exist without it. These include those involved with Internet
Infrastructure technologies and services, which includes search, navigation, commerce
enablement, security, etc., along with pure play Internet sites and content providers.
IT Services and BPO (Business Process Outsourcing) — IT Services and BPO companies
create custom software solutions, consulting, integration services, outsourcing or other related
services which may or may not depend on software. IT Services firms are providers of computer
and Internet-related consulting, design and programming services, while outsourcing firms
sometimes provide the domain knowledge and people resources to take over non-core business
processes (finance and accounting, human resources), vertical processes (mortgage processing,
media animation), and knowledge-based activities (analytics, market intelligence) for their
customers who prefer to not do the tasks in house.
19
Software Industry Public Peer Group Valuations
As of December 31, 2008
Horizontal Application
Software
Consumer Application
Software
Internet
EV/S
EV/EBITDA
1.51 x
7.90 x
EV/S
EV/EBITDA
0.66 x
7.42 x
EV/S
EV/EBITDA
1.47 x
7.23 x
EV/S
EV/EBITDA
0.93 x
5.99 x
EV/S
EV/EBITDA
0.57 x
1.15 x
EV/S
EV/EBITDA
0.91 x
10.53 x
EV/S
EV/EBITDA
1.54 x
8.73 x
EV/S
EV/EBITDA
0.76 x
5.99 x
EV/S
EV/EBITDA
1.24 x
7.69 x
EV/S
EV/EBITDA
1.44 x
14.15 x
EV/S
EV/EBITDA
1.78 x
11.00 x
EV/S
EV/EBITDA
0.38x
2.95 x
Vertical Application
Software
EV/S
EV/EBITDA
1.19 x
5.92 x
EV/S
EV/EBITDA
1.18 x
10.27 x
EV/S
EV/EBITDA
1.48 x
7.59 x
EV/S
EV/EBITDA
0.86 x
6.82 x
EV/S
EV/EBITDA
1.64 x
5.98 x
EV/S
EV/EBITDA
1.46 x
7.81 x
Infrastructure Software
EV/S
EV/EBITDA
1.38 x
6.29 x
EV/S
EV/EBITDA
1.23 x
5.76 x
EV/S
EV/EBITDA
1.26 x
5.73
EV/S
EV/EBITDA
1.12 x
5.42 x
EV/S
EV/EBITDA
2.66 x
11.98 x
EV/S
EV/EBITDA
2.13 x
7.99 x
EV/S
EV/EBITDA
1.04 x
5.04 x
EV/S
EV/EBITDA
2.42 x
13.53 x
IT Services & BPO
EV/S
EV/EBITDA
0.70 x
5.36 x
Key Definitions:
EV: Enterprise Value; Enterprise Value = Market Value + Debt – Cash
TTM EV/S: Enterprise Value/Trailing Twelve Month Sales
P/E: Price per share/Earnings per share
Trailing multiples are based on the most recent reported results
Forward multiples are based on First Call earnings and revenue estimates
20
Public Peer Group 2008 Historical Valuations
The chart’s below depicts how public valuations in the six major markets Corum covers have fared over
the past year. The prevailing theme was decline in both sales and EBITDA multiples, with much of the
drop coming in the second half of 2008. January through June valuations were still riding the positive
momentum from 2007 as the recession ‘talk’ hadn’t yet set in.
Horizontal Applications
EV/EBITDA
11.02 x
EV/S
11.01 x
10.12 x
7.69 x
1.71 x
1.81 x
1.55 x
1.04 x
Q1
Q2
Q3
Q4
Vertical Applications
EV/EBITDA
11.34 x
EV/S
11.07 x
9.37 x
2.19 x
1.99 x
1.71 x
6.92 x
1.26 x
Q1
Q2
Q3
Q4
Consumer Applications
EV/EBITDA
EV/S
15.00 x
11.26 x
10.99 x
11.45 x
10.00 x
1.91 x
Enterprise value to sales multiples are
down 42% from their high in Q2. In
part this is due to the broad economic
downturn, but also continued
weakness in the Supply Chain sector
and the sobering of the HR sector.
The HR sector EV/S valuation during
the second quarter came in at 6.06x
compared to Q4’s 1.44x.
1.70 x
5.41 x
5.00 x
0.99 x
0.61 x
Vertical market applications peaked
during the first half of the year, and
since that time, both sales and
EBITDA multiples are off
approximately 40%. Despite
valuations dipping, deal volume has
remained strong in most all vertical
subsectors. Interestingly when looking
at the individual subsectors, although
EV/EBITDA multiples are down, most
remain fairly strong when compared to
percentage drop in other market
subsectors.
The global recession has created an
environment where consumers have
stopped spending, and public
valuations are reflecting their absence.
EBITDA multiples in the gaming sector
have been decimated during the
second half of the year, especially
during the fourth quarter, which is the
primary reason for the steep fall off in
broad Consumer EBITDA multiple.
0.00 x
Q1
Q2
Q3
Q4
21
Infrastructure
EV/EBITDA
10.71 x
EV/S
11.39 x
8.98 x
2.08 x
1.98 x
1.67 x
6.47 x
1.47 x
Q1
Q2
Q3
Q4
Internet
EV/EBITDA
EV/S
15.25 x
2.45 x
11.94 x
2.71 x
9.60 x
2.34 x
8.11 x
1.10 x
Q1
Q2
Q3
EV/S
12.80 x
0.85 x
6.92 x
0.89 x
6.50 x
5.36 x
0.80 x
0.70 x
Q1
Q2
Q3
The Internet market was a valuation
leader coming into 2008, but since that
time has slowly declined. This is due
in part to the greater volatility of
Internet stocks, but also due to drop in
retail spending. Online advertising
continued to grab more dollars from
other forms of advertising, although ad
revenues slowed. Google’s shares
dropping by over 50%, and the off and
on and off acquisition of Yahoo didn’t
help matters.
Q4
IT Services
EV/EBITDA
Sales multiples in the broad
Infrastructure market have remained
fairly healthy, only down 25%. This is
due in part to the fact that the market
represents companies offering vital
technologies like security, systems
and network management. As in a
number of other markets, Q2 was the
peak for the Infrastructure market.
Also keep in mind strong valuation
numbers from companies like BEA
and Secure Computing were missed
during the second half of the year as
the companies were acquired.
Q4
Coming into 2008 IT Services
transaction momentum was gainig, as
were valuations. As the year
progressed transaction volumes have
remained fairly consistent, with a peek
in Q3, but valuations have fallen
during this time. As companies cut
expenses, consulting projects were cut
leading to decreased revenues and
layoffs. The Indian services firms
which make up a portion of the IT
Service peer group were hit especially
hard due to their high focus on serving
the financial services industry.
22
Transaction Highlights Q4 2008
Strategic Buyers
Buyer
Seller
Value
(Millions $)
Undisclosed
Thomson
Reuters
Paisly
Consulting
Research In
Motion
Certicom
$52
Salary.com
Genesys
Software
Systems
Undisclosed
HighJump
Software
BelTek
Systems
Design
Undisclosed
CA, Inc
Eurekify
Undisclosed
Sector
Comments
Paisly, a leader in the GRC (Governance,
Risk and Compliance) space, will become
part of Thomson Reuters Tax &
Accounting business, adding highly
complementary products and services.
Paisly’s offerings (SaaS) help to manage
and automate processes dealing with
regulatory issues, a business Thomson
Reuters knows well.
It is still unclear on whether or not this deal
will be finalized, as Certicom is doing
everything in their power to block the deal,
while RIM is working every angle to push it
through. Gaining control of Certicom’s
encryption and decryption patent portfolio
is at the heart of the deal, and the
envential acquirer, will have a powerful
position in the smartphone market.
This acquisition brings together
complementary SaaS solutions.
Salary.com playing the talent management
space, where Genesys is in the HRMS
space. The combined company is poised
to be a major force, as they will have
robust suite of integrated HCM solutions.
Expanding product portfolio and market
penetration are drivers behind the
acquisition of BelTek. BelTek is in the
SCM market, specifically the direct-store
delivery software space, and is
HighJump’s second acquision in the
space. Battery Ventures acquired
HighJump in May 2008 with the goal of
turning the former division of 3M into a
stand-alone company. Battery has a
strong track record of building market
leaders, so keep your eyes on HighJump
as they continue to acquire.
CA has a long-standing leadership
position in the Identity Management
segment of the market, and adding
Eurekify will only add to that. This is CA’s
second acquisition this year in the Idenity
Management space and will bring
automation to their identity and access
management (IAM) product suite.
23
Cross-Border Transactions
Buyer
Seller
Value
(Millions)
$7.5
XING AG
Socialmedian,
Inc.
MicroFocus
Relativity
Technologies
$9.7
Atari
Cryptic Studios
$27 (plus
up to $20 in
earnout)
Exact Group
BV
Orisoft
Technology
$4
Tekelec
mBalance
$40 (plus
up to $20 in
earnout)
Sector
Comments
New York-based Socialmedian, is a
provider of personalized news filters that
tightly integrate with the social networking
platforms, is now part of XING (Germany)
Europe’s strongest professional social
networking platform. Socialmedian brings
technology and management to fend off
LinkedIn and other rising stars in Europe.
MicroFocus’s business has held up nicely
during the down economy and Relativity
should only strengthen their position in the
application modernization market.
Relativity will also further expand Micro
Focus's geographic reach, partner
relationships and international customer
base.
Atari, a business unit of France-based
Infogrames, is expanding their MMO
development capibilities and brand with
the acquisition of Cryptic Studios. Cryptic
has a strong resume in the MMO space
with titles like City of Heroes and City of
Villains. This title alone made more than
$100M. Atari will pay $26.7M in cash and
up to $27.5M in performance-based
earnout.
Geographic expansion and product
enhancement are a couple motivating
factors behind Netherlands-based Exact
acquiring Orisoft out of Malaysia. Orisoft
will not only strengthen Exact’s presence
in APAC region, but bring additional
product for Exact’s international
customerbase.
Tekelec has had an M&A strategy for
years, and finanally acted upon it
acquiring Netherlands-based mBalance.
The acquisition marries a telecom
equipment vendor with text messaging
solution vendor. The lines continue to
blur has hardware and software vendors,
especially in the mobile space, continue to
converge.
24
Largest Transactions
Buyer
Seller
Value
(Millions $)
$945
eBay Inc.
Bill Me
Later, Inc.
Symantec
Corporation
Message
Labs Ltd.
$695
Tata Consulting
Services
Citigroup
Global
Services
Limited
$505
Hewlett Packard
LeftHand
Networks
$360
eBay Inc.
Den Bla
Avis a/s
$390
Sector
Comments
Strategic buyers do still pay
strategic prices. eBay payed 10x +
for payment processor and credit
services provider Bill Me Later. Bill
Me Later and PayPal make eBay
the number one online payments
brand. eBay sees the payments
space as an area of long-term
growth opportunity.
Security, e-mail, instant messaging,
SaaS all continue to be areas of
focus in the software M&A market,
and all are present in Symantec’s
acquisition of MessageLabs.
Symantec continues to build around
their SaaS strategy and vision.
Citigroup Global Services Limited is
an offshore BPO services company
mainly serving the financial
services sector and a business unit
of Citigroup. Tata and Citi are long
time partners, and signed as part of
the deal, a 10 year service
agreement. The transaction valued
at a little more than 2.5x brings
welcome cash to Citi as well.
LeftHand fills the midrange void in
HP’s iSCSI storage solutions suite
and adds scalibility, and expertise
in virtualized environments.
Beyond the technological and
product advances LeftHand brings,
there are strong cross sell
opportunities. Dell acquired into
the iSCSI market earlier this year,
so there is an appitite in the space.
eBay continues to spend with two
of the largest technology
th
transactions during the 4 quarter,
this time acquiring the leading
online classifieds site in Denmark,
extending their reach to over 20
countries. eBay’s strategy to
acquire complementary solutions
while expanding geographically
should provide long term growth,
but is a little scary now with the in
active consumer.
25
Private Equity Buyers
Buyer
Seller
Value
(Millions $)
$225
One Equity
Partners and
Allen Shapiro
TV Guide
Network (A
division of
Macrovision
Solutions)
Canal
Partners
Limos.com
Undisclosed
Francisco
Partners
API Software
Undisclosed
New Mountain
Capital LLC
Camber
Corporation
Undisclosed
EQT Partners
and APT
Private Equity
Partners
KMD A/S
$375
Sector
Comments
Marcovision’s divestiture of TV Guide
network underscores their strategy to
focus on technology for the digital
home. TV Guide provides TV related
content to over 15 million unique visitors
per month and top brand recognition.
According to its new owners, TV Guide
Network will be the base for additional
acquisitions in the entertainment sector.
Limos.com is a global leader in the
online ground transportation market,
with over 5 million unique visitors in
2007. In addition to providing online
quotes, the company specializes in
online marketing and lead gerneration
in the group transportation niche. Canal
Partners adds capital and management,
hiring a highly experienced CEO.
Labor management solutions continue
be hot acquisition targets, as do vertical
market solutions and expertise. API
brings both as a developer of labor
management software for healthcare
providers. This acquisition is another
example of Francisco’s focus in the
healthcare market, as the PE firm has
acquired or invested in four other
healthcare related firms this year.
New Mountain Capital’s acquisition
strategy is highly sector focused.
Camber fulfills this requirement as they
are a strong, growing player in the
services space serving the public
sector. New Mountain has had
previous wins investing in public sector
companies and will provide additional
financial capital to grow the business
further.
EQT (private equity firm) and APT
(pension management firm) join forces
to acquire one of Denmarks leading IT
services firms. KMD’s current customer
base is comprised of mainly Dutch
municipalities, but is expanding
upstream in the public sector and
moving into the private sector. Going
forward the company will look towards
M&A for future growth mainly in the
Nordic region.
26
Software Market & Sector Analysis,
Including Representative Transactions
Horizontal
Applications
Vertical
Applications
Consumer
Applications
Infrastructure
Software
Internet
IT Services and
BPO
Page – 29
Page – 58
Page – 99
Page – 115
Page – 151
Page – 173
27
Business Intelligence
Enterprise Resource Planning
Communications
Other
Customer Relationship Mgt.
Human Resources
Content Management
Supply Chain Management
28
Horizontal Application Software
The business applications sector saw widescale and transformational mega deal consolidation in 2007. In
2008, this has been one of the least active overall sectors and most deals that involved the Enterprise
arena focused on consultancy and services acquisitions. In September, Gartner forecast that the
enterprise software market will grow to more than $324 billion by 2012, averaging annual growth of 10%.
SaaS is forecast to have a 23.8% compound annual growth rate through 2012 for the aggregate
enterprise application markets, far exceeding the total market CAGR. Communications, Human
Resources and Supply Chain Optimization were three of the most targeted sectors for M&A.
With the U.S. credit crisis, instability in energy markets and overall uncertainty in the global economy,
investment in BI and analytics has been more resilient than many other software sectors. The rapid
adoption of these technologies in emerging markets like India, China, Russia and Brazil makes sense
since BI and analytics can help organizations deal with above-average growth, increasing quantities of
data, and intensifying competition. As companies become more global, they look to the next generation of
software solutions to help them optimize revenue, increase customer loyalty and satisfaction, and
enhance competitiveness. BI and analytics increasingly appear to be the answer, whether in mature
markets like Western Europe and North America, or rapidly emerging markets like India, China, Russia
and Brazil.
Human resources (HR) departments are viewed as service centers providing critical, but nonstrategic,
services to the business. In a turbulent economy where workforce reductions are contemplated daily, it is
clear that HR needs to become more strategic. Human resource management (HRM) will be a key area of
focus in 2009 as companies and government organizations put in place strategies to cope with the
economic crisis and recovery. The focus has shifted to hiring freezes, benefits and compensation cost
management, and workforce reductions in the hardest hit segments. We saw many deals in and around
the HR space in 2008 and look to more in 2009 that center on managing and developing talent,
embracing HRM analytics, and Web 2.0 adoption. It is important to note, however, that like other
companies that make business software, Oracle reported a drop in the amount of money its customers
are prepared to spend on tools such as financial and personnel management applications. Executives
said on a conference call that they had seen a reduction in large, multi-year contracts, and that they had
significantly dropped their assumptions on the number of deals which would close in the next reporting
quarter.
The CRM market continued to grow and evolve in 2008 as vendor consolidation, Software as a Service,
and emerging industry and technology trends shape the market landscape. The next generation of CRM
software is leaning away from the older “sales” centric foundation to one of managing customer
interactions.
Customer Relationship Management
The big players in the CRM space continue to capture market share. SAP, Oracle (Siebel),
SalesForce.com, Microsoft (with the new 4.0 version) all continue to really own CRM in the larger
companies and even Government as they get into the “customer” game. Open Source solutions are
becoming more popular with the smaller companies who will likely migrate to one of the bigger players as
they grow.
The reality now is that every real company has a CRM of some sort and as these systems are hard to
swap out, most companies are unlikely to change systems lightly, particularly in a rough economy where
major capital expenditures for this sort of thing would be difficult to get support for. Having said that,
companies are putting pressure on their CRM providers to deliver ever-increasing accuracy and customer
intimacy from their CRM. Companies are demanding integrated solutions that can not only provide client-
29
by-client analysis, but the ability to do this in real time and to proactively send targeted messages to the
right buyer at the right time and with the right media.
Acquisitions we see in this space have had less to do with consolidation but more to do with new
capabilities and some verticalization. The ability to provide cross platform information will be critical as
CRM providers want to be able to provide marketing information across all media, print, email and more
recently mobile.
Small software companies looking to become attractive acquisition targets in this market should consider
ways to uniquely target specific buyers in specific verticals with pin point precision and provide the data
in a way that can be rolled up into actionable, real-time information for use by the larger systems. The
other end of the transaction is the creative distribution of this information, and mobile opportunities seems
to be the most virgin territory.
In Q1 we forecasted SCM to become one of the areas with above average M&A activity in 2008, but as
the quarter progressed, the total number stayed somewhat below our expectations.
That said, the
dynamics in this market segment are still intact. The drivers of M&A activity, like the high demand for
complete SCM solutions, integration of emerging technologies such as RFID, etc. are still as valid as
before. This was proven by the comparably small number of transactions in the fourth quarter: Tyco
International’s acquisition of Vue Technology, a provider of item-level RFID software and infrastructure
solutions was interesting, as will be watching HighJump in the coming year. HighJump, a leader in the
supply chain execution software market, bought by Battery Ventures from 3M in Q2, is back on the scene
as an active buyer as their acquisition of BelTek Systems Design shows.
But the general economic slowdown does not leave the SCM market untouched. The impact is not
necessarily reflected in the numbers of transactions by quarter yet. Although the small number of
acquisitions in Q4 after a better performance a year ago is certainly a signal, the real warning message
gets communicates via an aborted SCM flagship transaction:
On August 11, JDA Software Group announced the acquisition of i2, global provider of supply chain
solutions, for $346 million in cash (representing a factor of 1.35 x on i2’s TTM revenues). Making real
sense from a strategic point of view, the deal was approved by i2 shareholders on Nov 6 - 80% of the total
shares outstanding voted for it. The same day, however, JDA lowered the price per share they were
intending to pay and i2’s board of directors saw this proposal as “not in the best interest of the
shareholders to pursue it.” The deal seems to be off the table.
Since JDA has to pay a $20 million termination fee, there must have been a number of quite serious
reasons which made them pull back from the conditions laid down in the merger agreement. Among
those quoted are concerns as to how successful the deal would actually be, at least in the short run;
discussions about the strategic direction JDA should be taking, i.e., focus on retail vs. manufacturing,
heavy investments needed to satisfy the high expectation of the i2 customer base, significant switching
costs, etc. Understandable concerns - but would they have resulted in a collapse of the deal if there were
not uncertainties, if not disastrous expectations, behind the development of the world economy?
As far as the latter is concerned, according to the Institute for Supply Chain Management, the
manufacturing and non-manufacturing SCM market segments have to be prepared for a decline in capital
spending of at least 7-8% in 2009. We are still moderately optimistic with regard to the M&A market
though: “Supply Chain Management Review” reminds management that particularly at difficult times one
should begin introducing new technology to prepare for a very different economic environment in which to
operate. It would certainly stimulate the demand for innovative, integrated SCM solutions if decision
makers were to adopt a respective mindset. Since also most of the strategic buyers still have sufficient
cash on their balance sheets, we think that M&A activity in the SCM market will continue throughout 2009
– but at a somewhat lower activity level and at valuations below those we experienced earlier this year.
30
Horizontal Application Software Valuations
Public Peer Group (In $U.S. millions – except share prices)
Stock
Symbol
INFA
MSTR
DOX
PALM
RIMM
CHRD
CVG
RNOW
CRM
IWOV
OTEX
VIGN
CSGS
EPIC
LWSN
N
ORCL
QADI
SAP
KNXA
SFSF
TLEO
ULTI
NICE
TRMB
ITWO
LGTY
MANH
Company
Informatica Corp.
MicroStrategy Inc.
Amdocs Limited
Palm, Inc.
Research In Motion Ltd.
Chordiant Software, Inc.
Convergys Corporation
RightNow Technologies, Inc.
Salesforce.com
Interwoven Inc.
Open Text Corp.
Vignette Corporation
CSG Systems International Inc.
Epicor Software Corporation
Lawson Software Inc.
NetSuite Inc.
Oracle Corp.
QAD Inc.
SAP AG
Kenexa Corp.
SuccessFactors, Inc.
Taleo Corp
Ultimate Software
NICE-Systems Ltd.
Trimble Navigation, Ltd.
i2 Technologies, Inc.
Logility Inc.
Manhattan Associates Inc.
Stock
Market Enterprise
Price
Value
Value
$13.73
$1,200.0
$985.2
$37.13
$441.4
$301.7
$18.29
$3,720.0
$2,930.0
$3.07
$339.4
$521.3
$40.58
$22,970.0
$20,270.0
$2.66
$80.0
$13.7
$6.41
$782.4
$1,290.0
$7.73
$259.0
$142.7
$32.01
$3,910.0
$3,180.0
$12.60
$580.8
$390.3
$30.13
$1,560.0
$1,640.0
$9.41
$223.5
$70.5
$17.47
$611.3
$662.2
$4.80
$287.6
$506.5
$4.74
$771.9
$629.6
$8.44
$513.5
$353.0
$17.73
$89,470.0
$90,570.0
$4.19
$128.7
$88.6
$36.22
$43,000.0
$42,470.0
$7.98
$180.0
$137.4
$5.74
$322.1
$181.9
$7.83
$230.1
$161.3
$14.60
$356.8
$330.4
$22.47
$1,360.0
$1,060.0
$21.61
$2,580.0
$2,470.0
$6.39
$139.5
$95.3
$4.57
$58.9
$15.9
$15.81
$380.0
$291.6
Median Valuation Multiples
Sector
H-BI
H-BI
H-Comm
H-Comm
H-Comm
H-CRM
H-CRM
H-CRM
H-CRM
H-CM
H-CM
H-CM
H-ERP
H-ERP
H-ERP
H-ERP
H-ERP
H-ERP
H-ERP
H-HR
H-HR
H-HR
H-HR
H-Other
H-Other
H-SCM
H-SCM
H-SCM
Trailing Multiple
P/E
EV/EBITDA
EV/S
23.27 x
12.13 x
2.21 x
10.17 x
3.67 x
0.80 x
10.51 x
4.78 x
0.93 x
N/A
N/A
0.45 x
13.05 x
7.19 x
2.14 x
88.67 x
5.99 x
0.12 x
N/A
4.89 x
0.46 x
N/A
N/A
1.06 x
N/A
35.38 x
3.18 x
18.26 x
10.27 x
1.54 x
26.66 x
8.73 x
2.20 x
33.61 x
7.97 x
0.38 x
10.52 x
5.50 x
1.43 x
13.71 x
8.03 x
1.04 x
N/A
6.33 x
0.74 x
N/A
N/A
2.47 x
16.12 x
8.81 x
3.85 x
N/A
7.69 x
0.32 x
8.49 x
3.32 x
0.67 x
N/A
N/A
1.85 x
N/A
14.15 x
1.03 x
18.48 x
51.46 x
1.93 x
47.81 x
13.17 x
1.75 x
17.57 x
8.82 x
1.80 x
1.88 x
2.95 x
0.37 x
12.69 x
1.53 x
0.38 x
13.51 x
5.28 x
0.84 x
14.92 x
7.69 x
1.04 x
Forward Multiple
P/E
EV/S
16.15 x
1.94 x
11.02 x
0.78 x
7.17 x
0.86 x
N/A
0.53 x
10.71 x
1.40 x
44.33 x
0.14 x
6.16 x
0.44 x
64.42 x
0.89 x
62.76 x
2.37 x
14.82 x
1.34 x
11.12 x
1.82 x
28.52 x
0.40 x
11.49 x
1.37 x
6.76 x
0.99 x
11.29 x
0.72 x
N/A
1.88 x
11.44 x
3.61 x
22.05 x
0.32 x
13.22 x
2.45 x
7.00 x
0.72 x
N/A
1.20 x
9.67 x
0.73 x
26.07 x
1.52 x
12.91 x
1.59 x
13.42 x
1.76 x
10.31 x
0.42 x
8.79 x
0.32 x
11.29 x
0.85 x
11.44 x
0.94 x
EV/S Multiple – 1.51 x
EV/EBITDA – 7.90 x
Communications
Human Resources
Customer Relationship Mgt.
Other
EV/EBITDA – 11.00
Content Management
Horizontal Market - Number of Transactions by Sub-Sector
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
Communications
Content Management
Customer Relationship Management
2008
7.66%
20.56%
12.90%
11.69%
8.47%
8.87%
20.16%
9.68%
Human Resources
Other
31
2008 Horizontal Application Market and Sector Public Valuation Data
The charts below depict how the broad Horizontal Applications market and its representive subsectors
have performed over the past 12 months, tracking both public EV/EBITDA and EV/S multiples.
EV/EBITDA
11.02 x
10.12 x
EV/S
11.01 x
7.69 x
1.71 x
1.81 x
1.55 x
1.04 x
Q1
Q2
Q3
Q4
Sub-sectors
Communications
EV/EBITDA
13.66 x
EV/EBITDA
EV/S
11.73 x
13.05 x
9.27 x
2.72 x
5.99 x
2.32 x
1.83 x
Q3
10.20 x
9.52 x
Q2
Q3
Q4
Customer Relationship Mgt
EV/EBITDA
EV/S
9.74 x
8.73 x
1.64 x
1.57 x
0.93 x
Q4
Content Management
EV/EBITDA
1.46 x
1.37 x
0.74 x
Q1
Q2
11.12 x
9.47 x
7.90 x
1.51 x
Q1
EV/S
1.79 x
10.80 x
5.98 x
EV/S
11.97 x
6.07 x
5.99 x
1.94 x
1.54 x
1.47 x
0.76 x
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
32
EV/EBITDA
12.54 x
11.96 x
1.68 x
Human Resources
EV/S
EV/EBITDA
37.20 x
10.89 x
6.06 x
7.69 x
1.62 x
1.62 x
EV/S
3.68 x
1.24 x
5.36 x
0.73 x
Q1
Q2
Q3
Q4
Q1
EV/EBITDA
17.85 x
EV/S
EV/EBITDA
9.06 x
15.67 x
2.40 x
2.13 x
Q3
Q4
Supply Chain
19.92 x
3.14 x
1.44 x
0.00 x
Q2
Other Horizontal Apps
14.15 x
11.00 x
EV/S
9.44 x
7.93 x
1.40 x
1.28 x
1.14 x
1.78 x
2.95 x
0.38 x
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
33
M&A Transactions
Business Intelligence (BI) Transactions
QueBIT Consulting acquires Creeth Richman
& Associates
Creeth Richman and QueBIT are Platinum
Partners of Cognos, an IBM Company. Creeth
Richman specializes in the Cognos TM1
platform delivering world class solutions to a
wide variety of clients which include many in the
Fortune 500. Creeth Richman’s team is
recognized as one of the foremost group of
experts in the world of TM1. The combination of
QueBIT and Creeth Richman represents an
organization ideally positioned to deliver
complete Financial Performance Management
and Business Intelligence solutions. According
to the parties involved, the acquisition of Creeth
Richman is part of a wider goal to help
companies navigate through the difficulties that
are being presented by the current global
recession. If there was ever a time to invest in
financial performance management and
business intelligence software to gain a
competitive edge, that time is right now.
Announcement Date: December 8, 2008
Deal Value: Undisclosed
Lefebvre Software acquires ASGROUPE
Lefebvre Software, software solutions author
and integrator, announces the acquisition of
ASGROUPE, a European author of Business
Intelligence solutions focused on the areas of
consolidation and reporting. This acquisition,
which is part of the strategy for external growth
and increased accessibility to Europe initiated by
Lefebvre Software nearly two years ago, will
enable it to position itself as a new player in the
European market for financial management
systems. This acquisition is a strategic and
decisive step for Lefebvre Software, which
continues the pursuit of its targets for growth at
a European level.
Announcement Date: November 18, 2008
Acxiom acquires Quinetix
Acxiom Corporation, a provider of interactive
marketing services, acquired Quinetix, LLC,
provider of analytics and predictive modeling for
large and medium-size businesses in retail
banking and other industries. The acquisition
gives Acxiom additional consumer insight
capabilities that enable clients to more
effectively retain and grow their customer base
and optimize pricing. Acxiom and Quinetix have
partnered for more than five years to jointly
serve clients in industries ranging from multichannel retail banking to hospitality to media.
FRSGlobal acquires SECAM+
FRSGlobal, a provider of risk and regulatory
compliance solutions, with coverage for over 30
countries on a unified platform, has acquired the
regulatory reporting specialist Business Objects
SECAM+, from Business Objects, an SAP
company. FRSGlobal provides solutions across
the retail, corporate and securities sectors,
which complements the specialized capabilities
of SECAM+ in regulatory reporting for the UK
securities industry. The SECAM+ solution
enables UK-based investment firms to meet
regulatory reporting demands of the Basel
Capital Accord, as stipulated by the Financial
Services Authority. The acquisition strengthens
FRSGlobal's strategic relationship with SAP,
offering FinancialAnalytics as a core part of the
SAP BankAnalyzer global solution. FRSGlobal
FinancialAnalytics is an SAP-endorsed business
solution and complementary to the SAP Bank
Analyzer set of applications for finance and risk
management and the SAP NetWeaver Business
Intelligence (SAP NetWeaver BI) component.
The deal is supported by The Carlyle Group and
Kennet Partners, the private equity investors in
FRSGlobal.
34
Temenos acquires Lydian Associates
QuestBack acquires Easyresearch
Temenos, a provider of integrated core banking
systems based in Switzerland, is acquiring
Lydian Associates Limited, a UK-based provider
of Business Intelligence (BI) software for the
banking sector. Lydian Associates Ltd, formed in
1998, sells a range of products under the
Webform brand that, by affording multidimensional analysis of a bank’s data, permit
better-informed management decisions. The
products give users the ability to produce
desktop reports, graphics and dashboards defined according to any specified parameters
or Key Performance Indicators (KPIs) - that are
invaluable in assessing performance, profitability
and liquidity. The provision of high-quality, realtime information for decision making is clearly an
area of strategic importance for banks and has
been made even more so by the recent banking
crisis.
QuestBack AS (Norway), an industry leader in
Enterprise Feedback Management (EFM),
announced its acquisition of Easyresearch AB
(Sweden). Easyresearch is a market leader in
Sweden with questionnaire and analysis tools
for handling of feedback and surveys.
QuestBack has had an average turnover growth
the last five years of more than 50% and has a
customer base of over 2,000 organizations and
a presence in 19 countries. The combined
company will have even more resources to put
at the disposition of customers and, based on
QuestBack’s existing model, a dedicated team
will continue to deliver support, quality
assurance, workshops and courses to all
existing customers. According to QuestBack’s
CEO, QuestBack and Easyresearch have
ambitious expansion plans based on the
increased demand for EFM solutions.
Announcement Date: October 30, 2008
Idhasoft acquires Westbay Solutions
GrapeCity acquires Data Dynamics
Idhasoft, Inc. (India) has acquired Westbay
Solutions Group to round out their SAP "All-inOne Solutions”. Westbay Solutions Group is a
GOLD SAP Business Objects Partner with 15
years experience in delivering Business
Intelligence Solutions. Idhasoft will leverage
Westbay's Business Intelligence expertise to
develop "out of the box" industry Business
Intelligence across their vertical solutions.
The acquisition of Westbay is very strategic for
Idhasoft. The combination of its SAP All-in-one
solutions with industry pre-defined Business
Intelligence will drive significantly more value to
its customers, according to Idhasoft.
GrapeCity, an international software
development firm, is acquiring Data Dynamics,
Ltd., a developer of award-winning data analysis
and reporting software components. GrapeCity,
which has localized, sold, and supported Data
Dynamics products in the highly competitive
Japanese market for more than a decade, will
continue to develop and support Data Dynamics
products worldwide, including the upcoming
release of ActiveReports in the first quarter of
2009. Data Dynamics’ ActiveReports tool is the
number one reporting tool used by Visual Studio
developers in Japan.
Representative deals from first three quarters of 2008. For more details on these transactions go
to www.corumgroup.com and click on Resources.
Buyer
Intel Capital
IHS, Inc.
Cranes Software
LogiXML
Target
Telligent Systems
Global Insight
Cubeware GmbH
OnDemandIQ
Announcement Date
September 22, 2008
September 19, 2008
August 2, 2008
July 28, 2008
Deal Value
$20 Million
Undisclosed
Undisclosed
Undisclosed
35
TIBCO Software
SCIOinspire Corp.
MedData
TRANZACT
The Advisory Board
Company
Dow Jones & Company
Ipreo
Insightful Corporation
Solucia
ManagedCare.com
MarkerterNet LLC
Crimson
June 19, 2008
June 4, 2008
June 4, 2008
May 29, 2008
May 27, 2008
$25 Million
Undisclosed
Undisclosed
Undisclosed
$23 Million
Generate
CapitalBridge
April 17, 2008
February 21, 2008
Undisclosed
Undisclosed
36
Communications (Horizontal) Transactions
Including Wireless and Telecom
BroadSoft acquires Sylantro
BroadSoft, Inc., provider of Voice-over-Internet
Protocol (VoIP) applications to the
telecommunications industry, has acquired
Sylantro Systems Corporation, a provider of
VoIP applications. Sylantro has been a strong
competitor of BroadSoft for 10 years. The
acquisition extends BroadSoft's leadership in
VoIP applications. Sylantro's Synergy multiplay
platform and Synapps Web Services provide a
carrier-grade, feature-rich, web services-enabled
common capability for creating new converged
experiences for businesses and consumers. To
serve its growing customer base, BroadSoft now
has development and customer operations
centers in Montreal, Canada; Dallas, Texas;
Bangalore, India; Sydney, Australia; Belfast,
Northern Ireland; and Gaithersburg, Maryland.
BroadSoft and Sylantro have long histories of
helping telecommunications service providers
deliver IP communications services to
businesses and consumers around the world. By
joining forces, the two companies are in a
position to create a market leading global entity
with a shared vision and infrastructure.
Mer Telemanagement Solutions to acquire
AnchorPoint LOB
during a period of slowdown and an unstable
economic environment.
Tecnomen to acquire Lifetree Convergence
Finnish telecom software firm Tecnomen has
acquired Delhi-based Lifetree Convergence Pvt
Ltd, an IT and OSS billing solutions provider to
telecom companies. The new entity will be
called Tecnomen Lifetree. The acquisition
comes as a surprise as Lifetree just got a
commitment of $20 million investment from
International Finance Corp (IFC), the private
equity arm of the World Bank. The funds from
IFC were raised by Lifetree for potential
acquisitions and it was evaluating various
targets. Initially, Lifetree was exploring a buyout
of Tecnomen with a private equity fund, but
financing became difficult after financial
meltdown started. The two firms have very
limited overlap in their customer base and
Tecnomen could market all of Lifetree's products
through its global sales network. The products of
the two companies are also a good match and
will expand the product offering of Tecnomen.
Deal Value: $46 Million (Cash and stock)
Voxeo acquires VoiceObjects
Mer Telemanagement Solutions Ltd. (Israel), a
global provider of business support systems
(BSS) for comprehensive telecommunication
management and customer care & billing
solutions, is acquiring the telecom expense
management business of AnchorPoint, Inc.
Upon completion of the transaction, MTS will
integrate its telecommunication management
and billing solutions with AnchorPoint's
telecommunications expense management
(TEM) solutions. This transaction is in line with
Mer’s business objectives and it is an important
step in carrying out its strategy to improve its
market position and product offerings,
accelerate growth and profitability. The merger
complements Mer’s TEM offerings which, with
an immediate return on investment to
customers, are important management tools
Voxeo, the world's leading provider of
standards-based voice application platforms and
hosted services, announced it has acquired
VoiceObjects, the world's leading provider of
self-service application development and
analytics solutions. VoiceObjects enables
organizations to enhance each user experience,
integrate phone self-service into comprehensive
customer service strategies and manage phone
self-service applications residing on VoiceXMLbased IVR platforms. Voxeo is an employeeowned company with headquarters in Orlando,
Beijing, Cologne and London. The company's
Prophecy Platform has been downloaded more
than 30,000 times since its launch in 2006 and
its standards-based IVR hosting platform is the
largest in the world and the only one backed by
37
a 100% uptime guarantee. VoiceObjects is the
second acquisition Voxeo completed in 2008,
following the acquisition of Beijing-based
Micromethod, a SIP-based communications and
collaboration software provider, in August.
Modavox to acquire Augme Mobile
Modavox, Inc., an Internet broadcasting pioneer
and holder of several patented technologies, is
acquiring a majority of Augme Mobile, a provider
of mobile marketing solutions and services.
Augme Mobile offers the first and only
comprehensive web-based marketing platform
that provides marketers, brands and advertising
agencies the ability to create, deliver, manage
and track interactive marketing campaigns
targeting mobile consumers through traditional
print advertising channels. Augme Mobile’s fully
integrated mobile marketing platform fulfills the
advertiser’s need to offer interactive multimedia
mobile content, while simultaneously satisfying
the consumer’s desire for easier and more
robust mobile connectedness. Despite the mass
adoption of sophisticated mobile devices and the
hype around mobile commerce, marketers have
struggled to find an effective way to navigate the
maze of wireless carriers, mobile phones,
operating systems and disparate technical
components required to launch successful
mobile marketing campaigns. Augme Mobile
solves this “mobile marketing puzzle” through an
integrated solution that delivers interactive
marketing content through traditional media
channels to the mobile consumer on-demand.
Recent research suggests that what is now a $1
billion market will reach between an estimated
$10 to $19 billion market by 2011.
Conferencing, Inc. offers a full suite of video
conferencing software, audiovisual and
networking solutions with extensive experience
in high-definition (HD) video conferencing
environments and custom integration. The
acquisition of Videré is highly complementary
geographically, bringing the combined company
to 13 locations across the U.S.
Callis Communications acquires Odyssey
Networks
Callis Communications, a leading regional
provider of hosted telephony and managed
Voice-over-IP services for small and mediumsized businesses (SMBs), announced the
acquisition of Odyssey Networks. By adding the
Odyssey's IT capabilities to the Voicepath
Hosted PBX service, Callis demonstrates their
ability to effectively deliver unified
communications to small and medium sized
businesses in the Gulf Coast. Odyssey
Networks is a Gold Certified Microsoft Partner
that has helped many mobile companies
affordably take advantage of technology. They
see this acquisition as an opportunity to scale
their offering to everyone in the Callis network.
Callis's growth is gathering national attention.
They were ranked the 32nd fastest growing
Telecommunications company in the 2008 Inc.
5000 list. Recently, TelephonyOnline, TMCnet,
and Smallbiztechnology.com highlighted Callis's
"green" solutions with their stories about Callis's
802.3af technology to power all phones from a
central source to reduce power consumption by
50%.
Antenna Software Acquires Strategic Assets
of Vettro
Providea acquires Videré Conferencing
Providea, Inc. has acquired Boston-based
Videré Conferencing, Inc. The acquisition nearly
doubles the size and resources of the combined
video conferencing company which will operate
under the name of Providea Conferencing, LLC.
Providea, Inc. is a provider of comprehensive
video conferencing solutions comprised of bestin-class hardware, managed services, network
and multipoint conferencing. Videré
Antenna Software, provider of business mobility
to the enterprise, has acquired strategic assets
of Vettro Corporation, a privately held company
that specialized in mobile applications for the
field service industry. In the deal, Antenna
acquired assets that include Vettro's products
and intellectual property, select customers and
related customer contracts, and alliance and
channel partnerships. The acquisition builds on
Antenna's decade-long expertise in mobility and
38
brings additional expertise across several
industry sectors including IT service
management/help desk, local delivery and
courier companies, transportation and logistics,
utilities and the broader field service space. The
acquisition also reinforces the long-term viability
of Antenna's platform-based mobility approach
and further strengthens the company's position
in the mobile enterprise application platform
market.
Interspire & Ergo-Brains merge
Ergo-Brains Inc (Japan) agreed to merge with
Interspire Inc, a majority-owned unit of Digital
Advertising Consortium Inc, and a provider of
advertising services via cell phones. Interspire
Inc, is engaged in advertising and planning
advertisement, operating various websites
including shopping via cellular phone terminal,
and providing business consulting services.
Ergo-Brains Inc is headquartered in Tokyo,
Japan, with a domestic branch office in Osaka.
The Company's principal activity is the provision
of effective advertising service on Internet. The
operations are carried out through the following
divisions: Marketing and E-Commerce.
Marketing division carries out all marketing
activities like direct e-mails, HTML magazines
and target research. E-commerce division
provides a dream catalogue for online shopping.
Homeland Integrated Security Systems
acquires DirectView Video
Homeland Integrated Security Systems, Inc.
acquired DirectView Video Technologies Inc.,
provider of high-quality video conferencing
solutions and services that enable its clients to
conduct remote meetings by linking participants
in geographically dispersed locations. The
Company distributes award-winning video
conferencing products and peripherals to many
different organizations including professional
service firms, state and local government
agencies and other domestic and multinational
companies. It also provides enabling
technologies such as multipoint video and audio
conferencing, video conferencing over IP,
document conferencing and visual
presentations. The company is seeking to
bolster its product portfolio through the
acquisition of DirectView assets in order to
increase revenue, reach multiple vertical
markets and improve shareholder value.
H1 Communication AB to acquire Call in One
AB
Swedish customer relationship management
company, H1 Communication AB, has agreed to
acquire Call in One (CIO) AB. CIO offers
switchboard and answering services and
provides customer services solutions to some
100 companies. The company has 20
employees at offices in Helsingborg and
Stockholm. H1 Communication, headquartered
in Ostersund, Sweden, is a newly established
provider of outsourced CRM services.
Enghouse (Syntellect) acquires Envox
Worldwide
Enghouse Systems Limited (Canada) and its
subsidiary Syntellect Inc. acquired the assets of
Envox Group AB. With more than 40 years
combined experience, Syntellect and Envox
have a strong tradition of expertise and
experience serving the Interactive Voice
Response and Contact Center industries. The
complementary product portfolios enable the
delivery of truly open contact center solutions.
The acquisition of a well known industry leader
like Envox will allow Syntellect to continue its
global presence and expand to new territories in
APAC and Europe. The combined organization’s
capabilities and product portfolio will be able to
address the full spectrum of market
opportunities in the contact center space.
Deal Value: $14 Million (Cash)
Fonfun Corp. acquires Accel Corp.
Fonfun Corp is acquiring Accel Corp, a provider
of telecommunication services, in a stock swap
transaction. Accel Corp, headquartered in
Tokyo, provides mobile contents,
communication, and business solution services.
39
The company provides Ekispert transportation
information services, through mobile phones.
fonfun Corp, headquartered in Tokyo, Japan, is
a contents provider for DoCOMo's I-appli. This
offering mainly consists of Remote Mail service
that transmits email between cellular phones,
homes and offices.
to provide feedback earlier and wireless
consumers to enjoy beautiful mobile
experiences faster.
Broadcaster acquires Eyecandy
MobUI acquires Action Engine
MobUI, a Redmond, Wash.-based mobile
applications development startup, has acquired
Action Engine Corp., a Bellevue, Wash.-based
mobile apps company that had raised over $60
million in VC funding. MobUI plans to use the
funds, along with Action Engine’s patented
technology, to deliver upon the company’s
mission to rapidly create beautiful iPhone,
mobile web, and downloadable applications for
major consumer brands. The round of funding
was led by GlobalNET Mobile Solutions, a
leading wireless application services provider in
Latin America. Using their ‘speed of wow’
development approach, MobUI slices projects
into multiple, bite-sized deliveries which shorten
the mobile development cycle and place
prototypes in their customers’ hands sooner.
This enables their content company customers
Broadcaster, Inc. has acquired Eyecandy Inc., a
multimedia company in China with offices in
Beijing, Shanghai, Nanjing and Guangzhou.
Eyecandy Media provides cellphone applications
to China Mobile and is expected to provide
additional media applications and content such
as casual games to the future 3G cell phone
subscribers in China. Eyecandy has an
agreement with a mainland Chinese hardware
and systems integrator that has deployed its
technology applications to a major carrier in
China and through whom Eyecandy anticipates
gaining access to these carriers. Broadcaster
intends to build the Eyecandy brand in Asia in
part by utilizing the recently acquired
LampLighter Studios game development
capacity.
Buyer
Synchronoss
Technologies
More (Telenor)
HCL Technologies
Nortel
Convergys
Radiant Systems
Epazz
Syntellect Ltd
KIT digital
InfoLogix
dotMobi
Quickoffice
ECtel
NaturalInsight
Target
Wisor Telecom
Announcement Date
September 10, 2008
Deal Value
$18 Million
Add2Phone
Control Point
Pingtel
Intervoice
Orderman GmbH
DeskFlex and
Professional Resource
Management
Fluency Voice
Technology
Kamera Content AB
Aware Interweave
Mowser’s Assets
DynoPlex
Compwise
Cogent Technologies
August 28, 2008
August 26, 2008
August 13, 2008
July 16, 2008
July 7, 2008
June 25, 2008
Undisclosed
$20.8 Million
Undisclosed
$335 Million
$30.85 Million
Undisclosed
June 3, 2008
Undisclosed
May 22, 2008
May 20, 2008
May 8, 2008
May 5, 20008
April 30, 2008
April 9, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$1.5 Million
Undisclosed
40
Pohlad Family of
Companies
Widearea Systems
West Corporation
Novell
WebMessenger
CounterPath
Nokia
Voiceserve
Nokia Siemens
Networks
Avtex
March 31, 2008
Undisclosed
Magicsoft
Genesys Conferencing
Site Scape
Apptix WebMessenger
FirstHand Technologies
Trolltech
VoipSwitch
Apertio
March 17, 2008
February 19, 2008
February 13, 2008
February 8, 2008
January 29, 2008
January 28, 2008
January 17, 2008
January 3, 2008
Undisclosed
$268.8 Million
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$3 Million
$205.9 Million
41
Content Management (CM) Transactions
BlueCielo acquires PONTODOC
BlueCielo ECM Solutions, a software company
offering Engineering Content Management
solutions, has acquired 49% of PONTODOC
Soluções de Gerenciamento Ltda, a successful
company specializing in the implementation of
ECM solutions based in Santo André, São
Paulo, Brazil. PONTODOC will be renamed
BlueCielo do Brasil Soluçöes de Gerenciamento
Ltda. The partial acquisition of PONTODOC is
BlueCielo's first step to forming a strong,
operational infrastructure in Brazil and the rest of
Latin America. PONTODOC has had a total
focus on the sale and support of BlueCielo's
product portfolio since 1997 and holds Brazil's
second-largest market share for the resale of the
InnoCielo software suite.
full range of product, implementation, and
support capabilities across Automation &
Security, eBusiness and Enterprise Content
Management (ECM) systems. CYA has provided
innovative granular recovery and replication
solutions to ECM customers since 1998. The
combination of the two organizations will create
a company leveraging over 30 years of
combined expertise to deliver best-of-breed
solutions within the ECM market. Moreover, the
acquisition further empowers enChoice to
continue leading the way as a premier software
developer and services provider, delivering
holistic software solutions and services across a
wide range of ECM customers, and specifically
enhances enChoice’s ability to service and
protect all aspects of customer data.
Oracle buys assets of Tacit Software
Atypon Systems acquires Macrovision
Solutions’ eMeta
Atypon Systems, Inc., a provider of e-publishing
solutions, acquired the eMeta operation, a
provider of access control, subscription
management and commerce software, from
Macrovision Solutions Corporation. The
acquisition of this operation from Macrovision
supplements Atypon's existing technologies and
services and creates a broader proposition
focused exclusively on the licensing and online
delivery of publisher content. It creates a single
entity dedicated to providing innovative content
production, marketing, ecommerce and e-rights
management tools to the publishing industry.
Through the acquisition of the eMeta operation,
Atypon has expanded its highly experienced
technical team and added a publishing services
consulting team to the company's existing
proposition.
Oracle announced that it has acquired the
intellectual property assets of Tacit Software.
Tacit Software's unique automated profiling
technology is an expertise location solution that
helps organizations uncover new opportunities
for collaboration. Oracle plans to integrate Tacit
Software into Oracle Beehive, a secure,
integrated, standards-based enterprise
collaboration platform. The combined solution is
expected to enable enterprises to make effective
and immediate use of the knowledge present in
their people, messaging and content. According
to Oracle, the addition of Tacit Software's
technology to Oracle Beehive underscores its
commitment to a strong, differentiated presence
in the collaboration software industry. This
capability enables coordination and collaboration
to occur between the right people at the right
time based on the information present in the
documents, conversations and messages within
the enterprise.
enChoice acquires CYA Technologies
enChoice acquired CYA Technologies, a
software developer and services provider with a
42
National Interest Security acquires MultiThreaded
Kofax acquires OptiInvoice Digital
Technology AB
National Interest Security Company, LLC, a
company controlled by DC Capital Partners, has
acquired Multi-Threaded, Inc., a rapidly growing
provider of mission critical technology services
and solutions to the Intelligence Community and
the U.S. Department of Defense. MTI is a highlyspecialized company that provides systems
engineering and software development solutions
in support of document and media exploitation,
multi-lingual data exploitation, and cyber security
initiatives. MTI’s services and solutions address
the significant challenges faced by its customers
to effectively manage and analyze the massive
repositories of disparate data collected from
intelligence operations around the world. MTI
provides multi-terabyte unstructured data
management solutions, including analytical and
data exploitation solutions allowing its customers
to rapidly process, translate, retrieve, and
analyze information that is pertinent to its
mission. All of MTI’s employees have high–level
security clearances.
Kofax, provider of Intelligent Capture &
Exchange solutions, has acquired OptiInvoice
Digital Technology AB (Sweden), a company
that develops and markets electronic invoice
and other document processing software.
OptiInvoice provides software that allows
electronic invoices and other documents to be
digitally encrypted and transmitted or submitted
via e-mail and other data streams in standard
text, image and extensible markup language
(XML) file formats. It then allows the recipient to
accept and process those same files. The
software eliminates the need to print, mail,
receive and process paper-based invoices and
other documents, thereby significantly reducing
otherwise manual labor processes and costs,
improving the accuracy of the related data and
accelerating processing times. This acquisition
is a natural extension of Kofax’s intention to
grow both organically as well as through the
acquisition of synergistic software companies
and products.
Deal Value: $2.67 Million (Cash plus potential
earnout up to $13 million over 4 years)
Buyer
GlobeCast
Open Text
KIT digital
MedLeh Group
Interwoven
Hyland Software
Open Text
Sopra
REALCOM
Alterian
HP
Alchemy Software
Development
Bottomline
Technologies
SDL International
Target
NETIA
Captaris
Morpheum
Equivalent Data
Discovery Mining
Liberty Information
Management Systems
Spicer Corporation
(Division)
Tumbleweed
Communications
AskMe Corporation
Mediasurface
Tower Software
Translations.com
Announcement Date
September 23, 2008
September 4, 2008
September 2, 2008
July 31, 2008
July 24, 2008
July 8, 2008
Deal Value
Undisclosed
$131 Million
Undisclosed
Undisclosed
$36 Million
Undisclosed
July 2, 2008
$12 Million
June 5, 2008
Undisclosed
June 5, 2008
May 23, 2008
March 31, 2008
March 6, 2008
Undisclosed
$35 Million
Undisclosed
Undisclosed (Merger)
Optio Software
March 3, 2008
$44.9 Million
Idiom Technologies
February 12, 2008
$26.6 Million
43
ProQuest
Oracle
Microsoft
RefWorks LLC
Captovation
FAST Search &
Transfer
January 18, 2008
January 16, 2008
January 8, 2008
Undisclosed
Undisclosed
$1.2 Billion
44
Customer Relationship Management (CRM) Transactions
CSG Systems to acquire Quaero Corporation
CSG Systems International, Inc., a provider of
customer interaction management and billing
solutions, announced that it has reached a
definitive agreement to acquire Quaero
Corporation, a marketing services provider with
expertise in customer strategy, analytics, and
marketing performance management. This
acquisition broadens CSG’s solution suite with
powerful customer intelligence capabilities that
will further assist its clients in maximizing the
value of their customer interactions. In addition,
CSG will integrate Quaero’s capabilities with its
existing customer interaction management
solution suite, most notably for CSG’s cable and
satellite clients. The combined solution will allow
these clients to utilize key data from CSG’s
billing system and other external data feeds to
profile and predict customer profitability and
behavior.
Deal Value: $15 Million (Cash plus potential of
up to $9.5 million in earnout)
Seller Reveue: $13 Million
Publicis Groupe to acquire Tribal
Publicis Groupe (France) has acquired Tribal.
With nearly one hundred communications
specialists, Tribal is one of Brazil's top
independent interactive agencies. Tribal offers a
complete range of in-house services from
strategic brand planning to interactive
campaigns and advanced marketing
technologies. The Tribal brand will be kept and
the agency will be aligned with the Digitas global
network. This strategic transaction marks the
next step in the international roll-out of the
Digitas global network. Publicis Groupe acquired
Digitas at the end of 2006. In 2007, Digitas was
launched in the UK, in India and Singapore, in
China through Publicis Groupe's acquisition of
CCG, as well as in France through the Groupe's
acquisition of Business Interactif. In addition to
expanding the Digitas global footprint, the
acquisition of Tribal also illustrates Publicis
Groupe's continued strategy of further investing
in emerging economies and increasing its
revenue share from digital and high-growth
markets. The acquisition of Tribal is key for
strengthening PG’s global operations and
expanding the Digitas network into Latin
America.
Campus Management Corp. acquires
Talisma CRM Business
Campus Management Corp. has acquired
nGenera's Talisma CRM line of business.
Assets include the Talisma CRM software
product suite, the Talisma Higher Education
business unit based in Bellevue, WA, and
Talisma Corporation Private Ltd. in Bangalore,
India. The acquisition enables Campus
Management to sell, integrate and support
nGenera's knowledge base software, a product
widely used by customers of the Talisma CRM
suite. Campus Management will own the
Talisma brand, and nGenera will assume
ownership of Talisma's CIM (Customer
Interaction Management) software products and
business. In effect, customers using Talisma
CRM software will now be served by Campus
Management, while nGenera continues to serve
and expand its CIM and Knowledge base lines
of business.
George P. Johnson acquires JUXT
Interactive
Marketing agency George P. Johnson acquired
online marketing agency JUXT Interactive and
mobile device platform MobilePromote. JUXT
Interactive and GPJ MobilePromote bolster
GPJ’s existing technology and digital strategy
capabilities and translate into more costeffective and integrated marketing campaigns
for technology, automotive, financial services,
healthcare and other B2C and B2B clients. GPJ
MobilePromote is a mobile device platform
enabling marketers to engage their community
throughout the campaign lifecycle with instant
SMS and MMS communication tied into branded
online portals. GPJ MobilePromote synchs with
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GPJ’s existing Global LINKS suite of software to
provide marketers for the first time with
increased brand engagement, enhanced
audience experience and real-time visibility into
the financial and project management of events
and entire portfolios. These strategic
investments reflect GPJ’s response to changing
consumer behaviors and the increasing role of
digital and mobile platforms in people’s lives.
These factors are forcing Chief Marketing
Officers to move away from the traditional adcentric model to embrace a more strategic,
multi-media approach that engages communities
where they live, work and play.
ServiceMagic acquires 123Devis.com,
123GetAQuote.co.uk and Travaux.com
ServiceMagic announced the launch of
ServiceMagic Europe through its acquisition of a
majority stake in The Koening Company and the
acquisition of Travaux.com from Groupe
CyberArchi, reaffirming IAC's commitment to
strategic international expansion and continued
investments in local markets around the world.
ServiceMagic Europe is being launched in
conjunction with ServiceMagic International,
which will continue to scout local lead generation
business opportunities around the world.
ServiceMagic Europe, headquartered in
Luxembourg, operates businesses in the local
lead generation space in French and British
markets including: Travaux.com, the largest
French website for consumer information
regarding home improvement; 123Devis.com, a
French lead generation business with the largest
network of trades people in France; and
123GetAQuote.co.uk, a leading UK lead
generation platform.
UFIDA Software acquires assets of Turbo
CRM
UFIDA Software Co Ltd is acquiring assets of
Turbo CRM (Shanghai) Co Ltd, a prepackaged
software developer. The assets were to consist
of fixed assets, inventory, office equipments and
supplies and other intangible assets.
Concurrently, US planned to acquire certain
assets of Turbo CRM (Beijing) Co Ltd.
Buyer
ClickSquared
AMP Agency
Intrepid Investments
Options Media Group
CornerWorld Corp
AdEX Media
Huron Capital Partners
Broadridge
iMagicLab
Rearden Commerce
Acxiom
Red Ventures
Selling Source LLC
Everything Channel
Convergys Corporation
Target
Rocket Science
Fulgent Media
Q Interactive
1 Touch Marketing
Leadstram LLC
Bay Harbor Marketing
Response Mail Express
Investigo
5 Square Systems
SamePage LLC
ChoicePoint (Division)
Modern Consumer
LeadRev
Next Level
Visage Mobile’s
Subscriber
Management Business
Announcement Date
September 23, 2008
September 23, 2008
September 9, 2008
September 3, 2008
September 3, 2008
September 2, 2008
August 26, 2008
July 30, 2008
July 28, 2008
July 28, 2008
July 9, 2008
June 23, 2008
June 9, 2008
June 2, 2008
May 21, 2008
Deal Value
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
46
nGenera Corporation
Courtland Capital Corp.
Portrait Software
Convergys
Talisma Corporation
ForceLogix
Million Handshakes
Hong Xun Software
May 21, 2008
April 18, 2008
March 19, 2008
March 13, 2008
Undisclosed
$7 Million
Undisclosed
Undisclosed
47
Enterprise Resource Planning (ERP) Transactions
Manaccom to acquire Star System Solutions
Manaccom Corp Ltd is acquiring Star System
Solutions Pty Ltd (Australia), an accounting and
project management software developer. Star
Projects provides large enterprises with job
costing software capable of working with large
enterprise accounting systems. Recurring
revenue from large customers accounts for 49
percent of its revenue. The acquisition of Star
System Solutions will strengthen Manaccoms’
software division by providing a balanced mix of
retail and enterprise software sales. The buy will
also move it up the supply chain from software
reseller to IP ownership.
Deal Value: $2.2 Million (Cash on average
annual earnings of $1 million a year)
UFIDA Software to acquire Founder
Chunyuan
UFIDA Software Co Ltd agreed to acquire the
entire share capital of Beijing Founder
Chunyuan Technology Development Co Ltd, a
software developer, from Investor Yang Ying
(39.71%), Founder Investment Ltd (25%) and 17
other individuals. Founder Chunyuan provides
enterprise resource planning, supply chain
management, customer relationship
management and business intelligence software
to businesses in China.
Deal Value: $56 Million (Cash on $14.9 million
ttm)
Buyer
Exact Software
SAS
Totvs
SAP AG
KUMAvision
SAP AG
WNS (Holdings) Ltd
Infinisource
QAD
CDC Software
Unit4 Agresso
CompuPay
Infogain Corporation
Target
Interactive Technology’s
InterConncet Solution
IDeaS Revenue
Optimization
Datsul SA
Ness Technologies
(Division)
IAZ Informatik GmbH
Visiprise
BizAps
Priority Pay
FullTilt Solutions
Integrated Solutions
Limited
Coda
Advanced Payroll
Systems
Spider Systems
Announcement Date
September 18, 2008
Deal Value
Undisclosed
August 4, 2008
Undisclosed
July 22, 2008
July 10, 2008
$440 Million
Undisclosed
June 23, 2008
June 17, 2008
June 16, 2008
June 2, 2008
April 22, 2008
March 4, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
January 4, 2008
January 22, 2008
$309.1 Million
Undisclosed
January 18, 2008
Undisclosed
48
Human Resource/Capital (HR and HCM) Transactions
Salary.com to acquire Genesys Software
Systems
Salary.com, Inc., a provider of on-demand
compensation and talent management solutions,
is acquiring Genesys Software Systems, Inc., a
provider of on-demand human resource
management systems, benefits and payroll
services. Genesys is well respected for its
proven, true multi-tenant payroll technology;
their payroll, tax, benefits and HRMS services
are sold primarily as software-as-a-service
technology and support a diverse set of
industries including government and hospital
systems throughout the United States and
Canada In addition, they spent the last several
years developing a new .Net 2.0 version of their
comprehensive web-based HRMS system which
Salary.com will be bringing to market. The
Genesys services offering scales to address the
needs of companies of all sizes and
requirements, including those in industries with
complex needs such as government and
healthcare. The combined offerings of
Salary.com’s compensation management,
strategic talent management and competency
products, when merged with the new Genesys
core HCM services capability, should make the
integrated company one of the leading players in
the emerging new world of integrated strategic
and transactional talent management.
PlanSource acquires Instant Benefits
Network
PlanSource, a web-based HR and benefits
administration company serving the needs of
brokers and benefits professionals, has acquired
Instant Benefits Network, a provider of webbased products and services designed to meet
the technology needs of benefits brokers serving
the small and medium-sized business market.
As a result of the acquisition, PlanSource is now
the only company in the U.S. that can effectively
manage a broker’s entire book of business with
a single solution. The acquisition is expected to
increase sales and revenue opportunities
through an expanded product portfolio, a
broader geographic presence and a large
customer base of benefits brokers who
continually seek innovative solutions to enhance
their value proposition. This merger nearly
doubles the company’s broker network.
Talent2 acquires The Learning Group
Talent2 International Ltd (Australia) has
expanded its HR outsourcing offerings with the
acquisition of The Learning Group Pty Ltd, a
specialist e-learning development and learning
services company. The acquisition will be
funded 50% cash and 50% equity and is EPS
accretive. The Learning Group employs 35
people, operates throughout Australia and
currently generates annual revenues of $5
million. The acquisition will enable Talent2 to
deliver a broader range of learning services to
existing and new clients.
Exact acquires Orisoft Technology
Netherlands-based Exact Group BV acquired
Orisoft Technology Bhd, a software developer of
HR payroll and time management solutions. The
deal marks the start of the acquisition trail in the
Asia-Pacific region, where it seeks to expand its
business by entering new markets during the
global economic slowdown. Exact believes now
is the best time to buy as there are big
opportunities.
Deal Value: $4 Million
Batrus Hollweg acquires Clickable Software
Batrus Hollweg International, a human capital
consulting firm specializing in High Definition
Assessment Science, has purchased software
company Clickable Software, and is now able to
offer clients a complete SaaS Talent
Management Solution. BHI's product and
service offerings will include Clickable
49
Software's applicant tracking system called
"Click And Hire." Click And Hire provides a webbased hiring system which quickly and easily
takes candidate job applications online, prescreens these candidates, assesses their fit for
the position, and routes their information for tax
credits, background checks, and other HR
administration needs. The Click And Hire
applicant tracking system is an excellent fit with
BHI's new High Definition Assessment Science
approach. These two solutions offer clients total
customization of their hiring and talent
management process.
New Frontier Holding acquires majority
interest in Cogent Ltd.
New Frontier Holding GmbH (Austria) to acquire
majority interest participation in Cogent
(Slovakia). Cogent, s.r.o. is Slovak limited
company, established in 1994, with the
headquarter in Bratislava, Slovakia with an
additional subsidiary in Kosice, Slovakia and
foreign branches in Budapest, Hungary and
Prague, Czech republic. Cogent is a provider of
Performance and HR Management solutions in
the CEE region. Main areas of work are
represented by Performance Management
Solutions, Business Intelligence, Enterprise
Planning, Strategic Management and
Scorecarding. This is the third acquisition of the
New Frontier Group after the acquisitions of
Profinit in Czech Republic and Romsys in
Romania in 2007. This critical economic and
business expansion requires strong competence
in area of Performance and Human Resource
Management. This is what Cogent is bringing to
New Frontier Group.
eLandia acquiring CTT Corp.
eLandia, a technology enabler of emerging
markets, is acquiring CTT Corp., a provider of
talent development and technical certifications
for industry leaders, including Cisco, Microsoft
and Google, throughout Latin America. eLandia
has committed additional funds following the
closing of the transaction to expand CTT’s
footprint both organically and through
acquisitions into additional locations in Latin
America in order to capture the growing demand
for Education Services throughout the region.
This acquisition is a key part of eLandia’s
strategic plan to provide differentiated
technology solutions that enable emerging
market transformation. With the addition of
CTT’s educational services, eLandia will fulfill a
central piece of its strategy to offer Information
and Communications Technology services, and
talent development services to partners,
channels and end users.
Buyer
Bedford Funding
Gannett Co. Inc.
Danogroup
Salary.com
P&I GmbH
JMI Equity
Bond International
Software PLC
Merced Systems
Taleo Corporation
Hewitt Associates
BSG Alliance
Sandata Technologies
Target
Authoria
CareerBuilder
Tecoloco.com
InfoBasis
JET PADIS NG
Halogen Software
HeadCount Services,
and TeamSpirit
Software
Practique Associates
Vurv Technology
LCG
Iconixx Corporation
TeleTimecard LLC
Announcement Date
September 30, 2008
September 3, 2008
September 1, 2008
August 26, 2008
August 25, 2008
July 8, 2008
June 19, 2008
Deal Value
$63.1 Million
$135 Million
Undisclosed
$5 Million
Undisclosed
Undisclosed
$3.73 Million
June 5, 2008
May 6, 2008
April 29, 2008
March 5, 2008
February 21, 2008
Undisclosed
$128.8 Million
Undisclosed
Undisclosed
Undisclosed
50
Other Horizontal Transactions
Pearson acquires Fronter
Pearson, the international education and
information company, is acquiring Fronter, a
European online learning company. Founded in
Oslo in 1998, Fronter has built a learning
platform (also known as a Learning
Management System or 'LMS') which provides
easy-to-use tools for secure online education
and collaboration. The Fronter platform enables
students to learn whenever and wherever they
choose; review their personal study plan; submit
assignments; communicate with teachers, peers
and parents; and study on their own or in a
group. Teachers use the platform to create,
store and repurpose learning resources and
coursework which their students access online.
The platform includes more than 80 tools for
teachers and students and is highly
customizable in terms of functionality, design
and language. Pearson expects the acquisition
to strengthen both its own education business
and Fronter by providing both companies'
customers with a wider range of services; by
enabling Fronter to expand into new geographic
markets; and by supporting the growth of
Pearson's education technologies globally.
Investis acquires Quartal Flife
Investis acquires Quartal Flife Oy, the FinnishGerman online investor relations company, in a
move which will establish Investis as a
European leader in online corporate
communications. The combined company will
have over 1,000 clients in more than 20
countries globally, serviced by 180 employees
operating in the UK, Germany, Finland, Italy and
India. Pro forma revenues of the group in 2008
are projected to be around £12m. Investis is the
UK’s leading corporate website specialist,
providing services to around 500 clients
including half of the FTSE100 and more than a
third of the FTSE350. The company has around
100 clients across mainland Europe. The fit
between the two companies is exceptional, not
just in terms of products and geography, but
also in their client-focused culture and shared
ambition. The companies see huge opportunities
in this market, as the center of gravity in
corporate communications shifts rapidly towards
the online medium across Europe.
Locatech, CrossGap and Jonckers announce
merger
After a decade of successful economic
partnership, Locatech and CrossGap will merge
into Jonckers Translation & Engineering. The
three companies are the founding members of
LCJ EEIG, a Microsoft Premier Vendor.
Locatech GmbH helps leading companies adapt
their technically sophisticated products,
websites, and e-commerce solutions into other
languages. CrossGap provides essential support
to companies attempting to establish worldwide
markets for their products. Jonckers Translation
and Engineering -- 2007 Microsoft Service
Vendor of the Year as part of localization group
LCJ -- delivers software, eLearning and
multimedia localization services to the world's
leading companies. The business opportunities
opened up by the combined growth make the
timing perfect for formal consolidation of the
group's offerings. Building on their long history of
working together in an economic partnership,
the company can take advantage of
exponentially greater capital and investment
opportunities as a single entity.
Thomson Reuters to acquire Paisley
Thomson Reuters is acquiring Paisley, an
industry-leading software provider of
governance, risk and compliance solutions,
which help multinational corporations, large
accounting and consulting firms, and
governmental agencies manage financial
controls, internal audit processes, and enterprise
risk management. Paisley has various offices in
the U.S. and around the world and employs
approximately 230 people. Upon closing, Paisley
will become part of the Tax & Accounting
business of Thomson Reuters. Paisley's webbased enterprise and SaaS software products
51
enable their customers to automate, manage
and control their internal processes. Paisley has
become the GRC solutions vendor of choice
around the world, and their leading software and
critical relationships with key partners are highly
complementary to Reuters’ position. By
providing deep integration between Paisley's
software and Checkpoint -- its leading digital
platform for research, guidance, and compliance
-- Reuters can give customers a one-stop
solution to help them more effectively manage
compliance with financial regulations, and
secondly, more precisely manage their internal
financial controls.
Intervate Solutions acquires Synergy
Corporate Technologies South Africa
Intervate, a local Microsoft Gold Certified
Partner and leading provider of enterprise
content management solutions, has acquired
Synergy Corporate Technologies (South Africa),
another Microsoft Gold Partner based in Cape
Town. The combined company will expand
Intervate's scope of operations in the Western
Cape region and enhance the value it is able to
offer customers nationwide. As a Microsoft Gold
Certified Partner with recognized Information
Worker, Custom Development and Data
Management competencies, Intervate has
extensive skill and experience in developing and
deploying Microsoft .Net solutions on the
Microsoft SharePoint platform. According to
Migal van As, Chairman of Intervate, the
acquisition will see Intervate merging the two
companies' operations in Cape Town, boosting
the organization's growth and market share in
this region.
BrainSell Technologies acquires FMG
Systems
BrainSell Technologies, LLC, a leading Sage
Software business partner, has acquired FMG
Systems, a Sage business partner focused on
customized business solutions for retail
management, manufacturing/distribution, and
financial accounting. The acquisition will allow
BrainSell to expand its SMB business offerings
providing expertise and software for end-to-end
business solutions. Current clients will now have
a one-stop solution provider from Accounting to
CRM applications and expert services. With
BrainSell's success in providing Sage CRM
solutions and now adding accounting related
solutions, it will now be better positioned to meet
today's customer's growing demand for
complete end-to-end business solutions.
MediaBank buys Mediaplex Systems
ValueClick’s MediaBank, a provider of integrated
technology solutions designed to enable
marketers and agencies to better manage the
end-to-end media buying process acquired
Mediaplex Systems, Inc., a technology division
within ValueClick, Inc. MediaBank's acquisition
of the AdVault, ContentDepot, eBusiness
solutions, and related platforms, which help
advertisers, agencies and publishers manage
their cross-media buying, production, finance,
and related activities, will benefit the clients of
both companies by providing access to a broad
range of technology solutions to meet their
advertising operations and analytics needs.
Oracle buys Primavera Software
Oracle Corp. has agreed to buy Primavera
Software Inc., a provider of project portfolio
management software, to accelerate its
momentum in delivering mission-critical
operational applications. Primavera's software
helps companies prioritize project investments
and manage complex projects. Together with
Oracle's applications and infrastructure software,
Oracle expects to provide the first
comprehensive enterprise project portfolio
management solution that helps companies
allocate the best resources, reduce costs, meet
delivery dates and ultimately make better
decisions, all by using real-time data. Oracle
Enterprise PPM will be tailored to projectintensive industries such as engineering and
construction, aerospace and defense, utilities, oil
and gas, manufacturing, and professional
services.
52
Buyer
Worksoft, Inc.
Integrity Interactive
In-Touch Survey
Systems
RICOH
Tangoe, Inc.
FortiusOne
Oracle Corporation
Interpublic Group
FTI Consulting
Bestoutcome Ltd.
IRIS Software Group
J2 Global
Blackbaud
Lifeware TEK
SunGard
CSG Systems
International
CDG Investments
Palladium Equity
Parnters
Vovici
Haggin Marketing
Target
Test Factory LLC
Software Impressions
NCI Mobility
Announcement Date
September 16, 2008
September 10, 2008
August 28, 2008
Deal Value
Undisclosed
Undisclosed
Undisclosed
IKON Office Solutions
Information Strategies
Group
Mapufacture
Global Knowledge
Software
Huge Inc.
Kinesis Marketing
Information Systems
Associates Ltd.
OPSIS Limited
MediaBurst Ltd
Kintera
On Demand Wholesaler
LLC
Strohl Systems Group
DataProse
August 26, 2008
August 5, 2008
$1.68 Billion
Undisclosed
August 4, 2008
July 30, 2008
Undisclosed
Undisclosed
July 30, 2008
July 25, 2008
July 24, 2008
Undisclosed
Undisclosed
Undisclosed
June 18, 2008
June 4, 2008
May 29, 2008
May 27, 2008
Undisclosed
Undisclosed
$46 Million
Undisclosed
May 15, 2008
May 1, 2008
Undisclosed
$39 Million
Preo Software
Carpio Solutions
April 25, 2008
April 22, 2008
Undisclosed
Undisclosed
Surveyo
I-Centrix
January 15, 2008
January 7, 2008
Undisclosed
Undisclosed
53
Supply Chain Management (SCM) Transactions
Greycon acquires Effsys Effektiva
Greycon Ltd., a provider of supply chain
optimization for the paper, printing, film and
nonwovens industries, acquired Effsys Effektiva,
a Swedish specialist in Manufacturing Execution
Systems. The acquisition brings to Greycon an
industry-specific MES, under the name of
GreyconMill, which is fully integrated with
Greycon's world-class production planning and
scheduling optimisation products: S-Plan, XTrim, and D-Opt. Effsys Effektiva has an
extensive background in pulp and paper. The
company's MES solutions are built on a
standard system core, common for all
implementations, with a client and interface layer
adaptable to individual site needs. Together,
Greycon and Effsys Effektiva have delivered
integrated solutions to customers such as Kodak
and StoraEnso Fors. The acquisition is a natural
fit for Greycon.
Agentrics acquires Vivacadena
Agentrics, a solution provider to the large
retailers and their trading partners, has acquired
Vivacadena (Netherlands), a provider of
innovative supply chain solutions. The
company's Internet-based platform allows
businesses to assess market demand down to
the local level and collaboratively manage order
quantities and the movement of goods across
the supply chain. Through this acquisition,
Agentrics now offers retailers and manufacturers
a platform to simultaneously reduce out-of-stock
positions while lowering inventory levels across
complex distribution networks that include
manufacturers' warehouses and distribution
centers as well as wholesaler and retail
locations. The Vivacadena solution, now part of
the Agentrics supply chain intelligence offering,
automatically coordinates inventory levels by
analyzing a range of factors such as demand
fluctuations, supplier responsiveness and
current stock levels throughout the supply chain.
In the consumer goods industry, product
availability and optimal stock positions can have
a dramatic effect on a company's profitability
and competitive edge.
SSI Schaefer acquires Salomon Automation
SSI Schaefer is acquiring the Salomon
Automation group of companies. Salomon will
be an independent member company within the
group, with unchanged management. As a
general contractor, it provides turnkey systems
solutions. SSI Schaefer Noell in Giebelstadt,
Germany and SSI Schaefer Peem in Graz,
Austria specialize in complex logistics systems
and picking technologies. With 370 specialists at
nine different locations throughout Europe,
Salomon is one of the continent’s largest
logistics software and systems providers.
HighJump Software acquires BelTek
Systems Design
HighJump Software acquired BelTek Systems
Design (New Brunswick, Canada), a provider of
direct store delivery (DSD) software. BelTek’s
software helps companies that perform routebased sales and delivery improve productivity,
quality of information, profitability, and inventory
control. The acquisition of BelTek strengthens
HighJump Software’s DSD platform for route
accounting and mobile sales and delivery. The
acquisition of BelTek solidifies HighJump
Software’s commitment to the direct store
delivery industry following the acquisition of
Global Beverage Group in 2006. HighJump
Software’s DSD customers are primarily focused
in the soft drink, beer, wine & spirits, bakery,
snack, candy, and tobacco industries. With the
acquisition of BelTek, HighJump Software
strengthens its presence in those markets while
expanding to new industries such as packaged
ice, linens and uniforms. Additionally, BelTek
provides a geographic expansion of HighJump
Software’s DSD product line to Europe.
54
GSI Commerce to acquire Innotrac
Corporation
Tyco International acquires Vue Technology
Tyco International has acquired Vue Technology
Inc., a provider of item-level RFID software and
infrastructure solutions. Vue Technology's itemlevel RFID technology provides retailers with
greater inventory visibility and accuracy by
tracking individual items throughout the supply
chain from manufacturing facilities to retail
locations. The acquisition of Vue Technology
marks the next phase of Tyco company,
Sensormatic's strategy for providing layered
technology at the retail selling floor. The
complementary products, software and services
offered by Vue Technology will provide
Sensormatic and ADT the most comprehensive
solution set to maximize retail store operations.
eCommerce and multichannel solutions
provider, GSI Commerce Inc., is acquiring
Innotrac Corporation, a provider of eCommerce
fulfillment and customer care services. The
company operates eight facilities, including
seven primarily used for fulfillment and one
primarily used for customer care. The company
serves more than 30 clients in the retail,
telecommunications and direct marketing
industries. The addition of Innotrac will increase
GSI's client base and expand GSI's North
American infrastructure and capacity. Following
the close of the acquisition, GSI will operate
approximately 4.7 million square feet of
fulfillment centers and 2,165 call center seats.
Deal Value: $61.9 Million (Cash, stock and
assumption of debt)
Seller Revenues: $128.2 Million (2008)
Buyer
Boeing
Park City Group
iTradeNetwork
Deutsche Private Equity
PSI AG
JDA Software Group
Marlin Equity
Fluensee
Axon Americas
Checkpoint Systems
Emrise Corporation
Battery Ventures
Accenture
iTradeNetwork
eFuture Information
Technology
Four Soft Ltd.
Sirit
ProQuest
Atempo
Target
Taperstry Solutions
Prescient Applied
Intelligence
Amphire
Iloxx Intelligence
4Production AG
I2 Technologies
Announcement Date
September 29, 2008
September 3, 2008
Deal Value
Undisclosed
Undisclosed
September 2, 2008
August 20, 2008
August 12, 2008
August 11, 2008
Chelford Group
TrenStar Tracking
Solutions
SCM Solutions
OATSystems
Advanced Control
Components
HighJump Software
AddVal Technology
Instill Corporation
Proadvancer Systems
August 6, 2008
July 29, 2008
Undisclosed
Undisclosed
$346 Million
(Terminated)
Undisclosed
Undisclosed
July 1, 2008
June 23, 2008
May 28, 2008
Undisclosed
Undisclosed
$18 Million
May 9, 2008
May 7, 2008
April 21, 2008
April 7, 2008
Undisclosed
Undisclosed
Undisclosed (Merged)
Undisclosed
TAKE Solutions
RSI ID Technologies
WebFeat
Lighthouse Global
March 26, 2008
March 4, 2008
February 14, 2008
February 12, 2008
Undisclosed (Merged)
Undisclosed
Undisclosed
Undisclosed
55
Briarcliff Solutions
Group
GT Nexus
Technologies
Mincron SBC
January 29, 2008
Undisclosed
Metaship AG
January 21, 2008
Undisclosed
56
Architecture/Engineering/Construction
Government
Energy and Environment
Healthcare
Financial Services
Other
57
Vertical Application Software
Vertical market acquisitions are consistently strong as strategic companies broaden and target their
offerings. Not surprisingly, Financial Services was hands down the most targeted sub-sector. Energy,
Healthcare and Government verticals were also active vertical tech M&A arenas.
As the economic downturn becomes more marked, companies' spending becomes more cautious. This
creates a need for IT vendors and providers to segment the market accurately to leverage opportunities
at hand. Despite a general negative impact on IT spending, some vertical markets will prove to be more
resilient in the slumping economy
Deals were done in nearly all aspects of Financial Services technology including banking systems,
compliance, trading platforms, investment and portfolio management, payment systems, front and back
office and others. Though M&A was strong this past year for the Financial Services software vertical,
there could be a different picture for ensuing quarters, a picture that could impact the entire tech industry.
Energy
At the time of this writing in January 2009, petroleum crude is selling near $45BBL and aluminum prices
are hovering around $1,580 per metric ton. Schlumberger, the world’s largest oilfield services firm (by
market capitalization), announced plans to eliminate about 5% of its workforce in North America and is
cutting some of its 65,000 overseas workers. Halliburton, its largest rival, has also announced job cuts.
Alcoa, the world’s largest aluminum producer, has announced a reduction in production of 18%,
elimination of 15,000 jobs and a 50% cut in capital expenditures in an attempt to adjust to a steep drop in
demand and prices and to keep pace with its rivals. Hugo Chavez even modified his ideological stance
and is now inviting Western oil companies to participate in petroleum production.
How times have changed. This state of play is a reversal of the environment in the first half of 2008. In
June 2008, I wrote that soaring energy prices dominated our headlines and steered our economy.
Sustained high energy prices stifled demand and were shifting resources toward alternative energies and
conservation. The price of oil, the bellwether for all activity in energy, tends to drive the investment
across other segments of energy. As oil prices rise, so does the investment in technology to generate
efficiencies and alternate energy. Consequently, we saw continued run up of investment not only in
conventional energy but also to commercialize alternate energy and sustainable technologies and to
generate efficiencies throughout the supply chain. In Q1, 2008, we wrote about oil rising above $100BBL.
In Q2, oil broke the $140BBL mark, nearly doubling in the last year.
Energy M&A activity in the second half of 2008 reflected the general downturn in energy related
commodity prices and the economy as a whole. M&A activity also mirrored the trends in the broader
M&A market, highlighted by:
•
•
•
An absence of really big deals, a reflection of large buyers protecting their cash, the tightening in the
credit market and the challenges associated with financing big deals with debt or equity as share
prices declined.
Reduced activity in small and mid-market acquisitions. Strategic buyers continued to shop for tactical
additions to their businesses to expand their product set, shore up product weaknesses, grab market
share and expand geographic reach. However, deal volume and valuations are down.
Private equity and financial buyer activity was low in 2H and particularly Q4 except where PE firms
supported highly targeted acquisitions by portfolio companies.
Looking forward, it’s reasonable to expect a continuation of 2008 2H trends for another six months. As
the economic collapse begins to bottom out and we see signs of stability, we should see an uptick in the
volume of deals as consolidation takes hold. Consolidation will be robust at the small end of the market
58
but expect some big deals, too. Depressed commodity prices and the credit crunch will push an
increasing number of weakened companies into the market. The number of small and mid-market
companies merging for survival should increase. The forward thinking software companies will move early
recognizing that they have no leverage when in crisis mode. There’s still pent up interest for M&A activity
from private equity and sovereign wealth funds, however, don’t expect a great deal of activity from these
buyers until we see some economic stabilization. Good sellers will get good deals done. The Obama
administration’s economic and energy policies should also have a positive impact on activity in traditional
and sustainable technologies.
Financial Services
According to the451 Group, the financial services industry accounts for 20% of total IT spending around
the globe. It is the largest slice of the IT pie and has experienced by far the most turmoil of any industry
segment in 2008. There has been a huge wave of consolidation of banks, brokers, insurance companies
and other financial institutions – to the tune of $1 trillion last year. When corporate entities merge,
decision making slows or even stops, especially at the acquisition level. Of course, spending will
continue in the industry driven by the need to integrate the disparate systems brought together by such
consolidation, to manage risk which has not been done very well in the past, and, ultimately, simply to
compete. These drivers all sound like good news for vendors serving the industry and are certainly the
silver lining that these vendors believe to see in the stormy skies; however, the darkness in those very
same clouds is that many of their potential customers – if not busy with their own mergers – are in
survival mode and that usually leads to halting of investments geared towards long term returns.
Hence, we believe 2009 will be very challenging for many vendors, especially those serving the banking
and trading platform providers, as these players continue to cut spending and delaying investments.
Vendors continue maintaining a relatively stable pipeline, however, many projects are not moving
forward. So while the vendors are not losing deals, they are put into a very difficult situation: on the one
hand, they wish to maintain the resources to execute when financial institutions free up budgets and
place orders and, on the other hand, the need to preserve cash in case it takes much longer for those
POs to materialize.
This dichotomy, if not properly managed, will lead to some vendors landing on the fire sale heap as they
desperately seek a safe haven before their cash runs out. At the same time, exactly this phenomenon
will provide fantastic opportunities to those vendors with adequate liquidity. Of course, there will also be
plenty of deals that can and will be made before such a situation arises.
Last year we monitored a continuation of the consolidation trend amongst financial services vendors, but
at a significant decrease from the levels we previously tracked. During the three years prior to 2008, we
had witnessed annually roughly 360 transactions amongst financial services software and IT service
vendors. Last year, the number of transactions had dropped one-third to 240 with a volume of only $15
billion, the lowest in five years and a dramatic plunge from the 2007 leverage-fueled buyout days where
the volume had hit almost $70 billion. We envision continued activity in this segment in 2009, though it
will remain at a lower volume similar to last year´s. There will probably be an increase in distressed sale
activity as well.
For those that may not be adequately financed – and now is no time to be looking for new or additional
funding when serving the financial services industry – a fair deal can be made if you are properly
prepared, get in dialog around the world with all potential partners and remain flexible. Recent work by
our firm in this segment has shown that, in addition to M&A opportunities, there is a significant potential
for strategic alliances. The forms of these alliances vary from cross selling products, sub-contracting
agreements to optimize resource utilization, to minority investments.
Healthcare
Healthcare Technology and Recession - There is an emerging consensus that the healthcare model in
the U.S. is broken. Healthcare costs continue to outpace the rate of inflation, although since 2003 the
59
percentage rate of increases has diminished each year. According to employers and health plans,
premium increases are to be expected, though rates aren’t rising as fast as in previous years,. We are in
a recession, and in recessions healthcare has historically increased its portion of gross domestic product
(GDP) as medical prices rise faster than other prices. This time will be no different.
As healthcare costs spiral higher and the number of uninsured increases, public policy on healthcare is
likely to change. The incoming Obama administration has already sent a strong signal that technology will
have a large part to play in their solution (EMR is specifically mentioned as a priority). The Obama
administration and Congressional leadership would like to fund technology initiatives as part of a fiscal
stimulus package for the states and localities in 2009. Healthcare technology will get its share since
virtually all states are complaining about the burden of Medicaid patients and are asking for help. All of
this bodes well for financially sound software companies in the healthcare arena, and for healthcare
technology M&A activity since financially challenged companies
will not fare well in 2009 and many will look for an acquirer.
Recessions tend to result in lower M&A activity and most of the
pundits are predicting no recovery until 2010. However, M&A in
counter-cyclical industries such as healthcare tend to be stronger
than other segments. Healthcare technology companies in poor
economic times are attractive acquisition candidates because
healthcare is somewhat recession proof, people are living longer
and the aging population will require significant amounts of
healthcare services. Additionally, advances in medical technology
and increased access to healthcare in developing countries are
increasing demand. These growth factors mitigate the global
economic woes to some degree.
Technology Trends: Analyzing
Global Enterprise IT Budgets
2008 reveals that the majority
of enterprises globally are
planning to cut back increases
in IT expenditure. However, the
healthcare sector is planning a
significant number of increases
in IT spending in 2009.
As we’ve been predicting for some time, the care software niche
will consolidate and, particularly as the economy sours, we expect
to see a higher level of M&A in this sector. There are still far too many companies in the niche and a large
percentage of the companies in the EMR niche specifically will become casualties of the economy. Not
all will be able to fund the development of new products, such as the need we see for a truly transportable
patient record. Strategic acquirers will play an outsize role in healthcare M&A heading into 2009 and
deals dependent upon large amounts of private equity debt will likely be postponed. Expect to see foreign
buyers; the Misys PLC – Allscripts deal is representative. The cheap U.S. dollar has made acquisition of
U.S. companies less costly for foreign buyers and very expensive for U.S. companies to buy foreign
companies. Small software companies in general should pay attention to what’s going on and consider
whether or not their company should be looking for an acquirer.
Buyers of healthcare technology must be more careful choosing which companies to do business with.
Do your due diligence and don’t make price the most important decision point. Software is a product with
high switching costs and it can be very disruptive to business if your chosen service provider is acquired
or worse, goes out of business. If you are happy with the product and services you have, do some due
diligence anyway. If you find signs of a shaky situation, you might be wise to look to for a stronger
technology partner.
60
Vertical Application Software Valuations
Stock
Symbol
ANSS
ADSK
CDNS
MENT
PMTC
SNPS
COMV
IHS
ITRI
SLB
ADVS
EPAY
FISV
JKHY
ORCC
SONE
TSS
HRS
LLL
LMT
MANT
RTN
SRX
MDRX
CERN
HLTH
RX
MCK
MEDW
EPIQ
JDAS
RLRN
ROK
Company
ANSYS, Inc.
Autodesk Inc.
Cadence Design Systems Inc.
Mentor Graphics Corp.
Parametric Technology
Synopsys Inc.
Comverge, Inc.
Information Handling Services Grp.
Itron, Inc.
Schlumberger Ltd.
Advent Software Inc.
Bottomline Technologies Inc.
Fiserv Inc.
Jack Henry & Associates Inc.
Online Resources Corp.
S1 Corporation
Total System Services Inc.
Harris Corporation
L-3 Communications Holdings Inc.
Lockheed Martin Corp.
Mantech International Corp.
Raytheon Company
SRA International Inc.
Allscripts Healthcare Solutions Inc.
Cerner Corporation
HLTH Corporation
IMS Health Inc.
McKesson Corporation
Mediware Info. Systems Inc.
EPIQ Systems Inc.
JDA Software Group Inc.
Renaissance Learning Inc.
Rockwell Automation Inc.
Sector
V-A/E/C
V-A/E/C
V-A/E/C
V-A/E/C
V-A/E/C
V-A/E/C
V-E&E
V-E&E
V-E&E
V-E&E
V-FinServ
V-FinServ
V-FinServ
V-FinServ
V-FinServ
V-FinServ
V-FinServ
V-Gov
V-Gov
V-Gov
V-Gov
V-Gov
V-Gov
V-HLTH
V-HLTH
V-HLTH
V-HLTH
V-HLTH
V-HLTH
V-Other
V-Other
V-Other
V-Other
Stock
Market Enterprise
Price
Value
Value
$27.89
$2,500.0
$2,630.0
$19.65
$4,450.0
$3,360.0
$3.66
$938.0
$813.7
$5.17
$477.5
$594.4
$12.65
$1,470.0
$1,250.0
$18.52
$2,630.0
$1,630.0
$4.90
$107.6
$81.2
$37.42
$2,320.0
$2,160.0
$63.74
$2,200.0
$3,210.0
$42.33
$50,630.0
$52,630.0
$19.97
$537.7
$451.9
$7.10
$178.7
$149.3
$36.37
$5,820.0
$9,490.0
$19.41
$1,640.0
$1,590.0
$4.74
$139.1
$200.1
$7.89
$422.5
$331.5
$14.00
$2,760.0
$2,700.0
$38.05
$5,120.0
$5,600.0
$73.78
$8,810.0
$12,320.0
$84.08
$33,680.0
$35,040.0
$54.19
$1,920.0
$1,930.0
$51.04
$21,130.0
$20,490.0
$17.25
$968.2
$981.0
$9.92
$38.45
$3,110.0
$2,970.0
$10.46
$1,930.0
$884.0
$15.16
$2,760.0
$3,860.0
$38.73
$10,590.0
$11,210.0
$4.80
$36.8
$9.0
$16.71
$594.0
$611.8
$13.13
$408.0
$340.3
$8.99
$262.3
$231.1
$32.24
$4,560.0
$4,860.0
Trailing Multiple
P/E
EV/EBITDA
EV/S
21.45 x
12.76 x
5.79 x
11.91 x
5.56 x
1.39 x
N/A
5.80 x
0.64 x
N/A
7.56 x
0.72 x
18.60 x
6.03 x
1.17 x
14.36 x
5.08 x
1.22 x
N/A
N/A
1.03 x
25.99 x
12.55 x
2.66 x
77.73 x
10.27 x
1.64 x
9.16 x
5.76 x
1.98 x
34.43 x
15.10 x
1.81 x
N/A
21.86 x
1.10 x
9.96 x
7.59 x
1.97 x
16.73 x
7.00 x
2.12 x
36.46 x
7.08 x
1.31 x
20.23 x
8.88 x
1.48 x
12.07 x
5.01 x
1.42 x
11.16 x
6.30 x
1.03 x
10.33 x
6.92 x
0.84 x
10.91 x
6.26 x
0.83 x
21.94 x
11.70 x
1.07 x
11.87 x
6.88 x
0.89 x
14.50 x
6.76 x
0.64 x
20.24 x
7.40 x
1.86 x
3.78 x
20.15 x
2.40 x
12.33 x
5.98 x
1.64 x
10.41 x
5.81 x
0.11 x
80.00 x
1.29 x
0.23 x
50.64 x
12.51 x
2.82 x
19.03 x
3.91 x
0.89 x
23.05 x
10.94 x
2.03 x
8.27 x
4.67 x
0.85 x
15.61 x
6.92 x
1.26 x
Forward Multiple
P/E
EV/S
14.91 x
4.26 x
12.20 x
1.53 x
N/A
0.96 x
7.39 x
0.69 x
8.66 x
1.10 x
10.64 x
1.14 x
N/A
0.71 x
15.66 x
2.20 x
16.86 x
1.65 x
10.77 x
1.96 x
31.70 x
1.54 x
9.34 x
0.93 x
9.72 x
2.16 x
14.27 x
1.80 x
13.17 x
1.19 x
17.15 x
1.36 x
10.07 x
1.37 x
8.34 x
0.91 x
9.82 x
0.79 x
10.50 x
0.77 x
18.49 x
0.91 x
10.93 x
0.83 x
13.17 x
0.58 x
13.59 x
15.14 x
1.64 x
87.17 x
2.02 x
8.28 x
1.58 x
9.09 x
0.10 x
23.21 x
2.80 x
7.96 x
0.86 x
17.98 x
1.85 x
10.23 x
0.92 x
11.57 x
1.19 x
Architecture/Engineering/Construction
Government
Energy and Environment
Healthcare
Financial Services
Other
Vertical Market - Number of Transactions by Sub-Sector
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
A/E/C
Energy & Environment
Financial Services
2008
6.89%
6.41%
24.23%
10.21%
21.85%
30.40%
Government
Healthcare
Other
61
2008 Infrastructure Market and Sector Public Valuation Data
The charts below depict how the broad Infrastructure market and its representive subsectors have
performed over the past 12 months, tracking both public EV/EBITDA and EV/S multiples.
EV/EBITDA
11.34 x
EV/S
11.07 x
9.37 x
2.19 x
1.99 x
6.92 x
1.71 x
1.26 x
Q1
Q2
Q3
Q4
Sub Sectors
Energy & Enviornment
A/E/C
EV/EBITDA
EV/S
EV/EBITDA
EV/S
18.85 x
16.48 x
12.59 x
11.50 x
10.45 x
4.69 x
4.02 x
2.06 x
1.99 x
1.62 x
14.42 x
10.27 x
2.79 x
5.92 x
1.19 x
Q1
Q2
Q3
1.18 x
Q1
Q4
Q2
12.29 x
11.25 x
2.70 x
EV/S
EV/EBITDA
10.18 x
10.11 x
7.59 x
2.42 x
Q4
Government
Financial Services
EV/EBITDA
Q3
8.58 x
1.22 x
2.00 x
EV/S
8.13 x
1.08 x
6.82 x
1.07 x
1.48 x
Q1
Q2
Q3
Q4
0.86 x
Q1
Q2
Q3
Q4
62
Other Vertical Apps
Healthcare
EV/EBITDA
EV/EBITDA
EV/S
EV/S
10.92 x
8.87 x
9.68 x
2.35 x
1.93 x
9.44 x
8.61 x
2.12 x
8.04 x
7.81 x
5.98 x
1.64 x
2.55 x
Q1
Q2
Q3
Q4
Q1
2.24 x
Q2
1.84 x
Q3
1.46 x
Q4
63
M&A Transactions
A/E/C (Architecture, Engineering, Construction) Transactions
Autodesk to acquire ALGOR
Autodesk, Inc. is acquiring ALGOR, Inc., a
provider of analysis and simulation software.
ALGOR's computer aided engineering software
is used for product design and development in
the automotive, aerospace, medical, consumer
products, defense, energy and utilities
industries. ALGOR software's wide range of
simulation capabilities includes static stress with
linear and nonlinear material models. The
acquisition will strengthen the Autodesk solution
for Digital Prototyping with new advanced
simulation functionality, including multiphysics,
mechanical event simulation and fluid flow. The
acquisition of ALGOR will add significant new
capabilities to virtually test and predict the
impact of simultaneous real world conditions like
heat and pressure on product designs.
Autodesk to acquire BIMWorld
Further enhancing its portfolio of solutions for
building information modeling, Autodesk, Inc., is
acquiring the assets of BIMWorld, a privatelyowned business specializing in the production
and distribution of branded BIM content for
building product manufacturers. Autodesk plans
to combine BIMWorld with Autodesk Seek, its
online source for building product design
information that allows architects and engineers
to search, select and specify building products
directly from their design applications. Autodesk
Seek is a search-based web service available in
the 2009 U.S. versions of Autodesk's Revitbased software applications for BIM, as well as
AutoCAD, AutoCAD Architecture and AutoCAD
MEP software. The vision for Autodesk Seek is
to be a leading online destination and one-stopshop for high quality building product information
and design files.
Autodesk to acquire iLogic Technology from
Logimetrix
Autodesk, Inc. is acquiring the iLogic software
and related technology from Canada-based
Logimetrix, Inc. iLogic is Logimetrix's desktop
rules-based design automation technology.
iLogic technology makes it easy for designers
and engineers to capture design intent and
automate common design tasks by creating
"smart parts" that can embed higher levels of
design intelligence directly into an Autodesk
Inventor digital prototype, all without the need for
programming knowledge. The acquisition
demonstrates Autodesk's commitment to
providing a comprehensive Digital Prototyping
solution to manufacturers of all sizes, giving
them the ability to design, visualize and simulate
their designs earlier in the process. The addition
of the iLogic technology will strengthen the
Autodesk solution for Digital Prototyping by
bringing user-friendly tools for rules-based
design and automation to mainstream
manufacturers.
ESI Group acquires Vdot
ESI Group (France), a supplier of digital
simulation software for prototyping and
manufacturing processes, acquired Vdot, a
software focused on development process
management, from the U.S. company
Procelerate Technologies Inc. ESI Group has
acquired the Vdot software activities, along with
related intellectual property rights, staff, specific
hardware, license contracts and distribution
rights. For its development, Vdot has benefited
from exceptional partnerships with organizations
such as Boeing and the Lean Advancement
Initiative at MIT, aimed at enhancing their
development processes. Vdot users include the
main aerospace manufacturers such as Boeing,
NASA, and AVIC (China), along with automotive
firms like Ford, Chrysler and Nissan. Through
this deal, ESI Group is adding an essential
component to its VisualDSS product, which is a
64
unique aid to decision making in the field of
Computer Aided Engineering (CAE).
Bull to acquire science + computing AG
Bull (France) is acquiring science + computing
AG (s+c), a high performance computing (HPC)
solutions and services company in Germany.
s+c is a service and software company for
technical/scientific design and simulation
environments (CAD/CAE/CAT). s+c focuses on
the ideal organization of distributed systems and
holds many years of experience in the operation
as well as the administration of complex Unix,
Linux and Windows environments. s+c has
significant expertise in HPC solutions and
services, particularly for major clients in the
automotive and aeronautical and related
industries. Bull believes the acquisition of s+c is
one of the most important investments the
company has made since 2005, supporting its
strategic repositioning. The combination of Bull
and s+c will create a powerhouse in the
European HPC landscape. s+c will bring its
experience in HPC solutions and services for
customers in the manufacturing sector, and will
contribute to expanding Bull's offering towards
infrastructure services. This acquisition also
provides Bull with a significant foothold in the
key German market.
Buyer
Noser Engineering
Construction Data
Deltek
Bentley Systems
Autodesk, Inc.
Dassault Systemes
Bentley Systems
Mentor Graphics
Kelyniam Global
Intergraph Korea Ltd.
Satellier
Springsoft
ANSYS
SolidWorks
Gravograph/Technifor
Applied Maufacturing
Technologies
Magwel NV
Autodesk
GigaTrust
National Instruments
Bentley Systems
Bentley Systems
MCS Software
WTWH Media
Cranes Software
International
Cimatron Ltd.
Target
Ipg AG (Business Unit)
BidTool
Planview MPM Division
Struc-Soft Inc.
3D Geo GmbH
Engineous Software
Common Point
Ponte Solutions
M2 Systems LLC
TechServer Corp.
Screampoint
Novas Software
Ansoft Corporation
Priware Limited
Vision Numeric
K-R Automation
Announcement Date
September 8, 2008
September 5, 2008
September 2, 2008
August 27, 2008
August 11, 2008
June 17, 2008
May 28, 2008
May 15, 2008
May 7, 2008
May 6, 2008
April 22, 2008
April 1, 2008
March 31, 2008
March 26, 2008
March 10, 2008
March 7, 2008
Deal Value
Undisclosed
Undisclosed
$16 Million
Undisclosed
Undisclosed
$40 Million
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$28.6 Million
$832 Million
Undisclosed
Undisclosed
Undisclosed
Kimotion Technologies
Green Building Studio
and Carmel Software
Pinion Software
microLEX Systems A/S
ECT International
LEAP Software
Network Analysis
MCAD Central
Entineering Technology
Associates
Gibbs & Associates
March 3, 2008
February 12, 2008
Undisclosed
Undisclosed
February 12, 2008
February 7, 2008
January 29, 2008
January 24, 2008
January 14, 2008
January 7, 2008
January 7, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
January 3, 2008
$8.97 Million
65
Energy and Environment Transactions
Insurance Services Office acquires
Atmospheric and Environmental Research
allowing them to only re-charge during times
when electricity costs are low.
ISO has acquired Atmospheric and
Environmental Research, Inc. (AER), a premier
environmental and scientific research and
predictive modeling company. Climate change
and its impact on economic growth and stability
is an emergent risk factor in the 21st century.
AER provides industry-leading solutions for
sensing, simulating, modeling, and predicting
weather-related phenomena in the atmosphere,
ocean, and space. AER has leveraged
proprietary partnerships and technologies
developed over three decades to create and
refine advanced computer models, analysis
tools, and databases that provide enhanced
understanding of and predictions about the
atmosphere, ocean, and climate. The acquisition
of AER further supports ISO’s objective to
expand its reach in the energy, financial, and
government markets and enhances the ability to
measure and assess the impact of climate
change on insured risks.
SmartSynch acquires Applied Mesh
Technologies
SmartSynch Inc., a provider of smart grid
intelligence solutions for the utility industry, has
acquired Applied Mesh Technologies
(AppMesh). AppMesh provides leading-edge
communications solutions to utilities and their
commercial and industrial customers seeking to
remotely monitor and control their energy usage
to save money and increase operational
efficiencies. The company’s proven suite of
smart grid-oriented products will enable
SmartSynch to extend service to customers on
multiple levels, including distribution automation,
SCADA, generator/load control, electric
distribution monitoring, steam monitoring and
PHEV monitoring. Specific products range from
a low-cost ‘wireless pipe’ interface enabling
utilities to transmit and receive data using any
protocol or messaging scheme to a ‘smart car
charger’ to be used with electric vehicles,
Reservoir Group acquires InfoAsset
Reservoir Group, a UK-based provider of
downhole drilling products and services to the oil
and gas industry, has acquired InfoAsset. The
deal is expected to help Reservoir create a data
management division. InfoAsset is a data
management services company for the oil and
gas sector.
Deal Value: Undsiclosed
Hansen Technologies acquires Peace
Software
Hansen Technologies Ltd agreed to acquire
Peace Software, a software development
company, from First Data Corp, a unit of
Kohlberg Kravis Roberts & Co. Peace Software
is a software development company,
headquartered in Miami, Florida. The company
develops online customer information systems
software, called Peace 8, which can be used for
billing and customer care of electricity, gas and
water customers in both competitive and
regulated markets. Hansen Technologies Ltd
(public) is a provider of information technology
services, headquartered in Doncaster, Victoria.
The company offers billing solutions,
superannuation administration, resource
management solutions and IT services to
customers worldwide.
Johnson Controls acquires Gridlogix
Johnson Controls, Inc., the global multi-industrial
leader in energy efficiency, has acquired
Gridlogix. Gridlogix's EnNET platform allows
building management systems to interface with
open protocol IT systems to better manage
energy, maintenance, physical security and
66
compliance, which makes their facilities more
energy efficient and sustainable. The platform is
currently operating in many global business
segments, including data centers, government,
higher education and commercial facilities.
Leica Geosystems acquires Rinex
Technology
Leica Geosystems' parent company, Hexagon
Group of Sweden, acquired Rinex Technology of
Perth, Australia. Rinex is one of Australia's
premier precision agriculture companies and an
emerging contender in the United States,
developing and marketing hardware and
software for agriculture equipment guidance and
implement control. The acquisition will allow
Leica to expand its line of precision products
providing U.S. farmers with a wider range of
components that will work with the Leica
mojoRTK auto-steer system. The first new
product resulting from this acquisition will be a
full-color, full-function touch screen that will work
directly with the Leica mojoRTK auto-steer
system to provide additional functionality
including contour and pivot guidance, mapping
and record keeping.
Olameter acquires MeterSmart
Olameter Inc. (Canada) has acquired the Meter
Data Management division of MeterSmart L.P.
As a result of this acquisition, Olameter has
expanded their suite of solutions to become a
leading supplier of professional and reliable
advanced meter reading and energy services to
the utility industry. Olameter continues to
provide an array of utility-focused IT solutions,
consulting, field services, and meter shop
services, but will now add meter data
management, verification, estimation, and
editing (VEE), and settlement services to their
service portfolio. MeterSmart will remain in
operation to provide services surrounding their
advanced customer program management
platform, Encentra. This acquisition will
strengthen Olameter's North American market
position to include over 100 clients within 36
U.S. states, four Canadian provinces, and
Mexico.
Telular acquires SupplyNet
Telular Corporation, provider of alarm and event
monitoring solutions and services, acquired
SupplyNet Communications, a SaaS supplier of
wireless tank-level monitoring services.
SupplyNet Communications provides private
label and branded tank monitoring solutions for
some of the world’s largest petroleum logistics
and chemical companies. SupplyNet’s automatic
replenishment (ARP) infrastructure enables the
wireless monitoring of vital inventory information
allowing companies to manage costs while
optimizing cash flow with just-in-time delivery.
The acquisition of SupplyNet will expand
Telular’s portfolio of solutions into emerging
markets with significant growth potential and
recurring revenue streams. By combining both
its technology and experience, Telular will be
able to introduce wireless ARP solutions to new
industrial markets.
Buyer
Zedi Inc.
GridPoint Inc.
P2 Energy Solutions
NWP Services Corp.
GE Energy
E Source
Target
OAS Oilfield Accounting
Service Ltd.
V2Green
WellCore Software
ViaStar Energy
Kelman Limited
EnergyWindow Inc.
Announcement Date
September 24, 2008
Deal Value
$6.2 Million
September 23, 2008
September 16, 2008
August 28, 2008
August 6, 2008
August 4, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
67
Vertex
Autodesk
Vista Equity
GE Energy
Ambercore Software
Axon Americas
Cordija LLC
BPL Global
BPL Gobal
Bentley Systems
BPL Global
Alliance Data Systems
(Utility Division)
Green Building Studio,
and Ecotect Analysis
Tools
P2 Energy Solutions
and The Oil & Gas
Asset Clearinghouse
MapFrame
Pulse Data’s Business
Unit, Terrapoint
EnterSys Group LP
HCI Systems Asset
Management LLC
Plan B Solutions
Connected Energy
Hevacomp Ltd.
Serveron
July 14, 2008
Undisclosed
June 26, 2008
Undisclosed
June 18, 2008
Undisclosed
June 11, 2008
June 3, 2008
Undisclosed
Undisclosed
May 2, 2008
April 8, 2008
$7.5 Million
Undisclosed
April 7, 2008
January 23, 2008
January 22, 2008
January 8, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
68
Financial Services Transactions
Austin Ventures to acquire Asset
International
Austin Ventures is acquiring Asset International,
a global financial information provider that
produces industry-leading publications such as
PLANSPONSOR, PLANADVISER, and Global
Custodian that have served for more than a
decade the needs of global pension funds, asset
managers, financial advisers, banking service
providers, and other financial institutions. The
infusion of capital and management expertise
will enable Asset International to greatly expand
its existing offerings and to launch new digital
products into the global funds management
industry.
Morningstar acquires Tenfore Systems
Morningstar, Inc., a provider of independent
investment research, has acquired Tenfore
Systems Limited, a global provider of real-time
market data and financial data workstations
based in the United Kingdom. Tenfore collects
data on global equities, commodities,
derivatives, indexes, and foreign currencies from
more than 160 sources and consolidates the
data for real-time distribution to clients. The
company also offers front-end software
terminals that leverage the company's market
data, along with analytics and third-party
application plug-ins. Tenfore provides an entry
into a new area for Morningstar: offering global
real-time stock quotes to its clients. There is a
large market for this data, and Morningstar can
now bundle real-time quotes with its
fundamental equity data and research.
Fiserv to acquire i_Tech
Fiserv, Inc., a provider of information technology
services to the financial industry, is acquiring
i_Tech Corporation, a provider of outsourced
account and payment processing services, from
First Interstate BancSystem Inc. i_Tech provides
outsourced account processing services as a
licensee and reseller of the Fiserv ITI Premier
core banking system to financial institutions. In
addition to account processing services, i_Tech
provides its clients with a variety of
complementary services including EFT
processing and check processing.
Filogix to acquire Cyence International Inc.
Davis + Henderson Income Fund’s Filogix
Segment, a Canadian mortgage technology
provider, will acquire Cyence International Inc.
Established in 1996, and with clients in Canada,
the United States and Australia, Cyence is a
leading international provider of credit lifecycle
management software and service solutions to
the financial services industry. Its premier
software platform, ExpressOS, offers a
sophisticated suite of lending and leasing frontoffice solutions that automate, integrate and
facilitate the origination, decisioning and loan
servicing business processes. Highly
configurable, user-friendly applications allow
clients to create and manage real-time
transactions with significantly improved
efficiency and savings. This acquisition is
consistent with its stated strategy of delivering
more programs within the lending services
marketplace.
Deal Value: $30.5 Million (Cash)
IFTH Acquisition Corp. acquires National
Credit Report.com, LLC
IFTH Acquisition Corp has acquired National
Credit Report.com, LLC, a premier provider of
identity security products and services focused
on credit monitoring and identity theft protection.
Reflecting the company's new line of business,
the company intends to change its name to
Steel Vault Corporation and also change its
ticker symbol upon stockholder approval in the
first quarter of 2009. IFTH Acquisition Corp. is a
premier provider of identity security products
and services, including credit monitoring, credit
69
reports, and other identity theft protection
services.
Privinvest Holding acquires VendTek
Systems
Privinvest Holding SAL, the Lebanese holding
company having investments in high technology
corporations in Europe and the Middle East, has
acquired ownership of an aggregate of
1,519,000 additional common shares of
VendTek Systems Inc. As a result of the
acquisition of the additional common shares,
Privinvest now owns approximately 19.74% of
the issued and outstanding common shares of
VendTek. VendTek develops and licenses
software for the global prepaid and financial
services markets.
Morningstar, Inc. acquires 10-K Wizard
Morningstar, Inc., a provider of independent
investment research, has acquired 10-K Wizard,
a leading provider of SEC EDGAR (Electronic
Data Gathering, Analysis, and Retrieval) filing
research and alert services. There is a great
wealth of information available to the public
through the SEC's EDGAR system, but
navigating the myriad filings to find relevant
information can be a challenge. The acquisition
of 10-K Wizard aligns with Morningstar’s goal of
bringing greater transparency to equity
investments. 10-K Wizard is a well-respected
resource for financial research, and the
company has developed a robust and intuitive
data mining application that allows users to
easily search and retrieve information across
different filings and time periods. 10-K Wizard's
technology not only sheds light on stock
investments, but can be applied to documents of
all kinds, like mutual fund prospectuses.
Neovia Financial acquires IDT’s European
Prepaid Payment Services Division
Online payments provider, Neovia Financial, has
acquired IDT Corporation’s European Prepaid
Payment Services Division. The agreement will
create one of Europe’s largest independent prepaid debit card businesses. The acquisition will
mean Neovia can enhance its product lines and
distribution based on the IDT Prime Card,
accelerating the development of Neovia’s prepaid Net+ card business and rapidly increasing
the company’s active Neteller e-wallet customer
base.
Deal Value: $15.05 Million
DataVision to acquire Netupdate from Most
Home Corp.
DataVision Inc. is acquiring Netupdate Inc., a
developer of e-lending technologies for
mortgage lenders, from Most Home Corp.
(Canada). The economic climate has changed
significantly since Most Home acquired
Netupdate and it is imperative that it responds
effectively to these realities. Most Home advises
that the sale of Netupdate Inc. is part of a larger
strategy to strengthen the company's balance
sheet and better focus on its core strengths.
DataVision will be positioned to deliver even
stronger value to the Netupdate customers as
Most Home focuses its attention on the wireless
side of its business for the real estate industry.
M2 Global, Ltd. acquires iKobo
M2 Global Ltd. (Antigua), a provider of online
electronic payment systems, has acquired all
assets of iKobo, an international person-toperson remittance firm. iKobo’s money transfer
service is card-based and uses a Visa Prepaid
Card issued by Visa international’s member
bank, Global Bank of Commerce, which enables
recipients to get cash from over 1,000,000 ATMs
worldwide and use their card wherever Visa
debit cards are accepted. The acquisition fits
perfectly into M2 Global’s strategy to offer the
most secure and flexible financial transactions
available. M2 Global’s proven e-business
infrastructure will quickly integrate iKobo’s
customers to provide a secure and smooth
transition for cardholders. iKobo’s Visa Prepaid
Debit Card program has been a proven transfer
service for over 5 years, and the business
provides an ideal addition to M2 Global’s
payment solutions.
70
Heartland Payment Systems acquires
Chockstone
Heartland Payment Systems, Inc., a leading
provider of credit/debit/prepaid card processing,
payroll, check management and payments
solutions, has acquired Chockstone, Inc., a
privately held provider of gift card programs and
loyalty solutions. Chockstone’s loyalty platform
helps businesses of all sizes identify their most
profitable customers and market to their unique
needs – thereby increasing the frequency of
their visits and the size of their average
purchases. Using real-time analysis of guest
behavior, the technology creates targeted pointof-sale-based promotions. Chockstone’s loyalty
marketing and gift card solutions are used by
leading brands in more than 65,000 restaurant,
convenience store, and other retail locations in
North America. Heartland’s acquisition of this
premier niche provider expands its ability to
equip businesses nationwide with enhanced gift
card and loyalty programs.
Chi-X Global acquires Cicada
Chi-X Global Inc., a holding company for the
regional Chi-X trading platforms, acquired the
assets of Cicada Corp., a provider of low latency
data management technologies, customer
qualification and compliance software, and other
services for financial institutions, exchanges and
data vendors. Market centers around the world
are today looking to build out their trading
infrastructures in order to accommodate the
global trading community’s vastly increased
demands, and Cicada has clear expertise in this
area after having worked with a number of
global exchanges on their technology needs.
With this acquisition, which is effective
immediately and includes Cicada’s entire global
employee base, Cicada founder and CEO
Gregory E. Smith will become the head of Chi-X
Global’s newly-created exchange services
business unit, Chi-X Global Technology, LLC.
The new exchange services business will
operate separately from Chi-X’s regional trading
platforms.
DST Systems acquires BlueDoor
Technologies
DST Systems, Inc. has acquired BlueDoor
Technologies Pty Ltd, a private company based
in Melbourne, Australia. BlueDoor provides
software solutions for participant accounting for
the funds management and retirement savings
("superannuation") markets in Australia.
BlueDoor has approximately 35 employees and
reported revenues of approximately $7.0 million
(AUD) for the fiscal year ended June 30, 2008.
DST Systems, Inc. is a global provider of
information processing and computer software
services and products to the financial services
industry (primarily mutual funds and investment
managers), telecommunications industry, the
healthcare industry and other service industries.
First New York Securities acquires Spartan
Technologies
First New York Securities, LLC, the multistrategy proprietary trading firm, acquired all the
assets of Spartan Technologies, LLC. This is a
well timed and strategic acquisition that allows
FNYS to quickly consolidate its technology
platforms. It also give the company the flexibility
to develop customized applications and features
required by its traders to enable them to be
more competitive and efficient. Spartan’s
HydraTrade platform is a proven broker-dealerneutral execution management system. It
provides best execution and order routing for
buy- and sell-side traders that include many
forms of trader-friendly functionality.
Connectivity includes major U.S. exchanges and
electronic communication networks, including all
order management systems providers, and dark
pools.
Ebix acquires ConfirmNet
Ebix, Inc., an international developer and
supplier of software and e-commerce solutions
to the insurance industry, is acquiring
ConfirmNet Corporation. ConfirmNet offers ASP
software on an SaaS basis for issuing and
71
tracking certificates of insurance (COI). Over the
years, ConfirmNet has emerged as the leader in
the COI issuance industry in the United States.
Before being acquired by Ebix, ConfirmNet had
the second largest market share in the certificate
tracking industry in the United States. Ebix’s
existing BPO division, EBIXBPO, has the largest
market share in the certificate tracking industry
in the United States, with this acquisition
strengthening its position even further. The
acquisition is expected to be accretive to Ebix
earnings per share in the near and long term
future.
Deal Value: $11 Million (Estimate of earnout in
cash)
Fiserv acquires The Data Center
Fiserv, a leading provider of information
technology services to the financial industry, has
acquired The Data Center (TDC) based in
Grapevine, Texas, from Compass Bank. TDC
was a licensee and reseller of the Fiserv ITI
Premier core banking system, which is available
for either outsourced or in-house account
processing, and offers products and associated
consulting services for virtually every banking
function. Fiserv is acquiring all of The Data
Center's assets and contracts. The deal allows
Fiserv to extend its core footprint and increase
their ITI outsourcing presence in the Texas
marketplace.
GBST acquires Coexis
GBST (Australia), provider of securities
transaction and fund administration software for
the financial services industry, has acquired
Coexis, provider of software for the securities
industry. In addition to the Syn development
technology, GBST would gain access to Syn
services for multi-site, middle and back office
securities processing, enterprise-wide reference
data management, corporate actions, multiexchange and multi-central securities
depository. Similarly GBST's products would be
available to Coexis customers and prospects.
TSYS to acquire Infonox
TSYS is acquiring Infonox, a privately owned
technology firm with payments expertise,
technologies and a focused methodology to
deliver rapid-to-market solutions. The Infonox
plug-and-play platforms simplify the acceptance
of payment forms to include, but not limited to:
debit, credit, prepaid, money transfer and
checks. It also offers new connectivity interfaces
to multiple payment devices and new channels
of service delivery such as mobile phones,
ATMs and bill-pay kiosks. Infonox provides a
proprietary end-to-end tool to manage the
lifecycle of a merchant so businesses can better
engage, serve and retain their customers. This
acquisition will add a Silicon-valley innovation
team and valuable new payment technology and
acceptance capabilities that help TSYS in its
mission to move any payment form, through any
payment device, anywhere in the world, over
any network.
Privinvest Holding SAL acquires VenkTek
Systems Inc
Privinvest Holding SAL announced that it has
acquired ownership of 2 million common shares
of VendTek Systems Inc. As a result of the
acquisition, Privinvest now owns and exercises
control over approximately 14.33% of the issued
and outstanding common shares of Vendtek.
Privinvest Holding SAL is a Lebanese holding
company having investments in high technology
corporations in the Middle East. Privinvest is
focusing on implementing electronic distribution
networks in the Middle East, Africa and the
Asian countries, and working on building an
association with VendTek concerning those
regions. VendTek Systems Inc. develops and
licenses software for the global prepaid and
financial services markets.
Wolters Kluwer acquires IntelliTax
CCH Small Firm Services, part of Wolters
Kluwer Tax and Accounting, has acquired the
tax preparation software company, IntelliTax,
formerly known as Orrtax Software Solutions.
SFS provides the ATX and TaxWise lines of tax
72
compliance and accounting software to 45,000
small professional firms in the United States and
Puerto Rico. IntelliTax offers tax compliance
software to 4,000 similar firms, who will now be
offered the TaxWise program for the 2009 tax
season. The acquisition further expands the
ability of SFS to serve as a partner to small firm
professionals, delivering tax preparation
software and services to increase their
productivity, efficiency and accuracy.
Continuity Engine acquires Business IQ
Continuity Engine acquired Business IQ for its
banking intelligence and profitability capabilities
that will be integrated into their flagship product.
With this functionality, Continuity Engine will
allow community banks and credit unions to
manage risks that are technical, natural or
business-related. With Business IQ capabilities,
Continuity has the ability to look at business risk
inside a bank's critical data. By including
Business IQ's technology, it allows clients to
manage business risks by making them
transparent.
Financial Technologies acquires ACE Group
India’s Financial Technologies group has
acquired a 90 per cent stake in UK-based
collateral management services provider ACE
Group. ACE has provided collateral
management and other credit support services
across 2,000 different warehouses in more than
50 countries. The E3C (Enhanced Credit
Commodity Control) technology of ACE is a
robust technology for banks to mitigate
performance risks and secure transactions in
credit finance for commodities. The buy further
strengthens their robust portfolio of technology
IP-based solutions for global financial markets.
Deal Value: $22.5 million
Fundtech acquires Synergy Financial
Systems
Fundtech Ltd., provider of global transaction
banking solutions, acquired Synergy Financial
Systems Ltd. through its Swiss subsidiary BBP,
making it the world’s largest SWIFT service
bureau operator based on transaction volume,
with a client base of over 200 financial
institutions. Synergy is a leading U.K. provider of
SWIFT services. BBP will integrate Synergy into
its business unit, and will continue to operate
both companies’ service bureau facilities, adding
capacity and operational resilience. In addition
to SWIFT connectivity services, both companies
offer a variety of SWIFT-related products and
services that can be cross-sold to the newly
combined client base.
RiskMetrics Group acquires Applied4
Technology
RiskMetrics Group, a provider of risk and
corporate governance services to participants in
the global financial markets, has acquired UKbased Applied4 Technology Ltd., a firm known
for its expertise in performance attribution.
Applied4 Technology Ltd. is a specialist provider
of technology solutions in the field of investment
performance measurement. The firm was
created by Mick Brant and several former
colleagues from Mellon Analytical Solutions. The
acquisition of Applied4 and its team of experts
paves the way into the multi-asset class
performance attribution space for RiskMetrics at
a time when understanding the risk and
performance attributes of an investment portfolio
have never been greater.
SS&C Technologies acquires Micro Design
Services
SS&C Technologies Inc., a financial services
software provider, has bought the assets of
Micro Design Services LLC, a software design
and development firm. Micro Design Services’
software is used in routing systems and order
management in securities exchange floor
operations, and claims 1,700 users and 45
brokerage firms of its Market Look Information
System. The company played a role in
implementing U.S. exchange use of the first
hand-held wireless trading system. The
acquisition should add mobile computing and
messaging expertise to the company.
73
Polaris Software to acquire SEEC
Polaris Software Lab Ltd. (India), a specialty
application provider in banking, financial and
insurance sectors, is acquiring U.S.-based
insurance product and component services
company, SEEC Inc. SEEC has designed, built
and tested hundreds of non-proprietary, SOA
software components that can be quickly
assembled to deliver business solutions that
streamline service, accelerate sales, and
improve productivity across the enterprise. This
deal forms the pivot of Polaris’ growth strategy in
the Insurance space, a market poised for higher
growth in the areas of claims, sales and product
management and customer service.
Buyer
Bankrate
Wolters Kluwer Tax and
Accounting
Ebix
Omgeo
Standard Life
Woltes Kluwer Legal, Tax &
Regulatory Europe
Moody’s Corporation
SKS
Unternehmensberatung
GmbH
Princeton Financial Sytems
Bosch
Advent Software
United eSystems
MegaPath
FolioDynamix
Morningstar
Sapient
SunGard
DealFlow Media
Wolters Kluwer
Bluepoint Solutions
Markit Group
American Processing Co.
Hellman & Friedman
ePayments
Target
Bankaholic
Ci3
Announcement Date
September 24, 2008
September 24, 2008
Deal Value
$12.4 Million
Undisclosed
Healthaxis
Allustra
Vebnet
Addison Software
September 23, 2008
September 16, 2008
September 16, 2008
September 16, 2008
$6.8 Million
Undisclosed
$43.4 Million
Undisclosed
Fermat International
ib-bank-systems GmbH
September 15, 2008
September 9, 2008
$189 Million
Undisclosed
Aquin Components
GmbH
Innovations
Softwaretechnologie
GmbH
Tamale Software
Netcom Data Southern
IP Merchant Solutions
SunGard Advisory
Technologies
Financial Computer
Support
Derivatives Consulting
Group
GL TRADE
PrivateRaise.com
Compliance Online
Avalon International,
Inc.
JP Morgan FCS
Corporation
National Default
Exchange
SSP Holdings
ACH Technologies
September 8, 2008
Undisclosed
September 8, 2008
Undisclosed
September 5, 2008
August 28, 2008
August 12, 2008
August 11, 2008
$70 Million
Undisclosed
Undisclosed
Undisclosed
August 11, 2008
Undisclosed
August 7, 2008
Undisclosed
August 1, 2008
July 29, 2008
July 29, 2008
July 29, 2008
$402.4 Million
Undisclosed
Undisclosed
Undisclosed
July 28, 2008
Undisclosed
July 28, 2008
Undisclosed
July 23, 2008
July 22, 2008
$393.6 Million
Undisclosed
74
iPipeline
Temenos Group
Bluff Point Associates
Triple Point Technology
Temenos
CRIF
optionsXpress Holdings
Oracle
Carlyle Group
Vertafore
Avalara
Restricted Stock Partners
IntercontinentalExchange
NetQoS
Triple Point Technology
Sofinco S.A.
FrontStream Payments
Oracle
Versata Enterprises
Innovation Group
Rubik Financial
3i Infotech
Affiliated Computer
Services
Planet Payment
Palladium Equity Partners
CCC Information Services
NYFIX
Peak Peformance
Parallels
Avalara
MarketAxess Holdings
SunGard
Reed Elsevier
HCL Technologies
Oberthur Technologies
Trintech Group PLC
Spooz
3i Infotech
COSS Development
Corporation
Informer AE assets
Blue Frog Solutions
ROME Corporation
Financial Objects
Teres Solutions
Open E Cry LLC
Skywire
De La Rue‘s Cash
Systems
Sircon Corporation
New Horizons Systems
Trade Receivable
Exchange (T-REX)
Creditex Group
Helium Systems
Investment Support
Systems
Fia-Net
Direct Technology
Innovations
AdminServer
Clear Technology
Choice Certified
Solutions
The System Works
Regulus Group and its
subsidiaries
CompIQ Corporation
iPay E-Commerce
Processing Business
Remesas Quisqueyana
Mitchell International
FIXCITY
Claims Harbor
ModernGigabyte
Independent Systems
and Programming
Greenline Financial
Technologies
Advanced Portfolio
Technologies
ChoicePoint
Capital Stream
XPonCard
Movaris
Unwin Technology
Accounting
Frameworks Limited
(AFL)
July 22, 2008
Undisclosed
July 18, 2008
July 14, 2008
July 8, 2008
July 3, 2008
July 1, 2008
June 24, 2008
June 23, 2008
June 16, 2008
$40.2 Million
Undisclosed
Undisclosed
$53.6 Million
Undisclosed
$18 Million
Undisclosed
$717.8 Million
June 13, 2008
June 10, 2008
June 9, 2008
Undisclosed
Undisclosed
Undisclosed
June 3, 2008
June 3, 2008
June 3, 2008
$625 Million
Undisclosed
Undisclosed
May 29, 2008
May 19, 2008
$39.4 Million
Undisclosed
May 12, 2008
May 8, 2008
May 6, 2008
Undisclosed
Undisclosed
Undisclosed
May 1, 2008
April 29, 2008
$8.7 Million
$100 Million
April 28, 2008
$22 Million
April 22, 2008
$1.3 Million
April 16, 2008
April 15, 2008
April 9, 2008
April 1, 2008
March 31, 2008
March 10, 2008
Undisclosed (MBO)
$1.4 Billion (Merged)
Undisclosed
Undisclosed
Undisclosed
Undisclosed
March 6, 2008
$42 Million
March 5, 2008
Undisclosed
Feburary 21, 2008
February 20, 2008
February 19, 2008
February 14, 2008
February 12, 2008
February 12, 2008
$4.1 Billion
$40 Million
Undisclosed
Undisclosed
Undisclosed
Undisclosed
75
Fundtech Ltd.
ChoicePoint
VSoft Corporation
GFI Group
IntercontinentalExchange
(ICE)
Thomson Corporation
Integrated Bank
Technology
PayPal
Odyssey Financial
Technologies
Goldleaf Financial Solutions
TheRetirementSolution.com
Perimeter eSecurity
Metavante Technologies
Metavante Technologies
SunGard
First Advantage
Corporation
Scivantage
Accountis Ltd.
Optimal Decisions
Group
Branch21
Trayport Ltd.
YellowJacket Software
February 7, 2008
February 5, 2008
$7.4 Million
Undisclosed
February 4, 2008
February 1, 2008
January 31, 2008
Undisclosed
$164 Million
Undisclosed
TaxStream
MICR Resource
Management
Fraud Sciences Ltd.
Xeye
January 29, 2008
January 28, 2008
Undisclosed
Undisclosed
January 28, 2008
January 23, 2008
$169 Million
Undisclosed
Alogent Corp.
Investment Tools and
Training LLC
Secure Electronic
Communication
Compliance Archival
System (SECCAS)
BenSoft
Nomad Payments Ltd
Financial Technology
Integrators
CredStar, Fiserv’s
Mortgage Credit
Reporting Division
Unger Software
January 17, 2008
January 17, 2008
$52.5 Million
Undisclosed
January 15, 2008
Undisclosed
January 15, 2008
January 10, 2008
January 7, 2008
Undisclosed
Undisclosed
Undisclosed
January 2, 2008
Undisclosed
January 2, 2008
Undisclosed
76
Government Transactions
New Mountain Capital acquires majority of
Camber
New Mountain Capital has acquired a majority
stake in Camber Corp., a provider of IT,
engineering and training services to federal
government agencies. Camber, founded in
1990, is a pure play provider of professional and
management services, information technology,
engineering, and advanced training solutions to
federal government agencies, primarily within
the U.S. Department of Defense. Camber and its
employees have been widely recognized for
their exceptional subject matter expertise across
a range of government programs. New Mountain
identified Camber through its long-standing,
proactive focus on the federal services sector.
New Mountain is providing Camber with
significant financial and strategic resources, and
Camber’s management will make a substantial
personal equity investment in the business
alongside New Mountain.
ManTech buys EWA Services
ManTech International, which develops
technology for national security programs, has
acquired EWA Services from Electronic Warfare
Associates. EWA sells IT and threat analysis
services to Department of Defense agencies.
The company has long partnered with ManTech.
ManTech says the 170 employee EWA will
generate $20 million next year.
Kforce acquires dNovus RDI
Kforce Inc., a professional staffing and solutions
firm, is acquiring dNovus RDI, a privately-held
company based in San Antonio, Texas, with
employees operating in 17 states nationwide.
Backed by over 2,000 staffing specialists, Kforce
operates with 57 offices in 41 markets in North
America and two in the Philippines. dNovus is a
highly successful prime contractor of applied
information technology to the U.S. federal
government and the State of Texas since 1989.
dNovus' core competencies include large
network design, implementation, operations, and
maintenance, cyber security, software and
database design and development, healthcare
informatics, data center operations, EDI
operations for health and financial services,
systems development and integration,
infrastructure operations, service to franchise
fund organizations, and research and
development.
Kratos Defense & Security and Digital Fusion
merge
Kratos Defense & Security Solutions, a
government-oriented integrator and contractor,
announced a merger agreement with Digital
Fusion, a government IT services company.
Digital Fusion will merge with a wholly owned
subsidiary of Kratos and all of DF's outstanding
shares will be converted into Kratos shares. The
addition of DF's highly educated, uniquely
qualified, and cleared employee base
significantly enhances Kratos' qualifications to
bid on an increasingly broad and diverse range
of opportunities. Once the merger is completed
and the transaction is closed, Kratos will have
approximately 2,250 employees. Approximately
80 percent of Kratos' government employees
hold national security clearance.
Deal Value: $35 million
Elbit Systems acquires Herley unit
Defense contractor Herley Industries Inc. has
sold its data communication unit Innovative
Concepts to Elbit Systems Ltd. Innovative
Concepts makes wireless communication
software used primarily by the military. Herley
said in a statement the division was not an ideal
fit for the company, which primarily sells
hardware. Herley does have requirements for
software development, but believes that those
requirements can be met through other
businesses. Innovative Concepts will be
77
integrated into Israel-based Elbit Systems' U.S.
subsidiary, which provides products for the
defense, homeland security and aviation
markets.
Shawmark’s Intelligence Community business
and is part of its overall strategy to create a
company that provides the highest quality IT
services to the Intelligence Community.
West Corporation buys IPC's Positron Public
Safety Systems
Private Party acquires Homeland Integrated
Security Systems
West Corporation and IPC Systems, Inc., jointly
announced that they have entered into an
agreement whereby West will acquire IPC's
Command Systems segment (d/b/a Positron
Public Safety Systems) and combine it with
West's Intrado operations. PPSS is a leader in
fully-integrated, premise-based public safety
solutions that enable Enhanced 9-1-1 call
handling, computer-aided dispatching, mapping,
automated vehicle location and radio
communications capabilities to allow public
safety agencies to better coordinate responses
to emergency events. Based in Montreal,
Quebec, PPSS has been providing public safety
solutions for more than 20 years, with
deployments in over 3,000 public safety
answering points ("PSAPs") worldwide. PPSS
has sold more than 2,000 positions of its VoiceOver-IP Emergency Response ("VIPER") call
handling platform. Together, the two companies
will deliver fully-integrated 9-1-1 solutions for
public safety.
Mr. Roger Ralston, a technology and finance
industry executive, has acquired Homeland
Integrated Security Systems, Inc. Mr. Ralston
will assume control of the Company as CEO and
Chairman of Homeland Integrated Security
Systems, Inc. The Company's current officers
and directors have agreed to resign effective
immediately. Homeland Integrated Security
Systems, Inc. will continue to operate as a
subsidiary of the public entity, continuing its
operations in applying applications for data and
tracking functions using its current Cyber
Tracker product line. With Mr. Ralston's
direction, the company will actively seek
acquisition candidates which will complement
the company's current products and improve
their product portfolio to reach various vertical
markets and increase the company's revenue
stream.
The Shawmark Group acquires Aspiration
Software
The Shawmark Group, a private equity
investment company that specializes in
investment in service providers to the
Intelligence Community, acquired the assets of
Aspiration Software, Inc., an IT company
providing a wide range of services to U.S.
governmental agencies. Aspiration Software
specializes in systems engineering and
integration, database services, large-scale
system design and testing, operations and
maintenance support, network engineering,
system administration, system security, software
and multimedia development and web
technologies. The Aspiration Software LLC
investment is a natural enhancement to
CAE to acquire Kestrel
CAE Inc agreed to acquire Kestrel Technologies
Pte Ltd, an information technology services
provider. CAE Inc, headquartered in SaintLaurent, Canada, manufactures advanced
simulation and control equipment like aircraft
simulators and automotive and industrial
products. Kestrel, which employs 13 people and
has revenues of approximately C$1 million,
currently provides consulting and professional
services, and provides simulator maintenance
and technical support services on behalf of CAE
on Super Puma and CH-47 Chinook full-mission
helicopter simulators operated by the Republic
of Singapore Air Force. CAE Singapore will now
expand on these service offerings to include
program management, systems and software
engineering, and research and development. In
addition, CAE Singapore will now focus on new
market segments such as unmanned aerial
systems (UAS), network centric warfare,
78
common databases and distributed mission
training.
Boeing to acquire Federated Software Group
The Boeing Company is acquiring Federated
Software Group, a provider of engineering
services and software systems that help track
and distribute equipment and personnel for the
U.S. Department of Defense. Federated
Software Group is the integrator for several
critical command and control systems and
provides engineering services for government
contracting and billing systems. The U.S. Air
Force Air Mobility Command uses Federated
Software Group applications to track the planes,
pilots, passengers and cargo involved in airlift
and aerial refueling operations. The company's
applications also are used by the U.S.
Transportation Command to track and optimize
air, land and sea mobility operations around the
world. The acquisition of Federated Software
Group complements Boeing’s decision to buy
Tapestry Solutions. Both acquisitions are key
moves in its strategy to significantly expand its
presence in the logistics command and control
marketplace with existing, mature contracts and
customer relationships.
WebQA acquires InTouch Product Line
WebQA announced it has acquired the InTouch
product line for government citizen servicing
from MMI Internetworking, a division of privately
held MMI Professional Services. WebQA is a
provider of Customer Relationship Management,
and its WebQA Action Center Series serves
over 63 million people worldwide. The InTouch
portfolio of modules allows local governments
around the country to capture service requests,
execute work orders, and manage code
enforcement in both a hosted and non-hosted
environment. With InTouch, WebQA will have
both a Java and .Net offering for its customers. It
will also have the opportunity to provide hosted
and non-hosted platforms depending upon the
needs of the local government.
QinetiQ Group buys Commerce Decisions
Ltd.
QinetiQ Group PLC, a provider of scientific
research test and evaluation, has acquired
Commerce Decisions Ltd, developer of AWARD
software and offers secure hosting consultancy,
training and maintenance services. QinetiQ
focuses on Systems Engineering and Technical
Advice with global and theater defense
architecture, defense systems interoperability,
integration and testing services, sense and
respond logistics and programmatic services, as
well as aviation, missiles, logistics services and
unmanned aerial vehicles technologies. It
provides research-based technology solutions
and support services to governmental
organizations including the UK Secretary of
State for Defense (MOD), UK national
intelligence and security agencies, the U.S.
Department of Defense, the U.S. Department of
Homeland Security and other U.S. intelligence
and security agencies. The company was
founded in 2001.
Deal Value: $16.8 million (Cash)
Buyer
Northrop Grumman
IHS
Serco Group PLC
CAE
Target
3001
Documental Solutions,
LLC
SI International
Bell Alliant’s Defense
Security and Aerospace
Business Unit
Announcement Date
September 10, 2008
September 4, 2008
Deal Value
Undisclosed
$24.5 Million
August 26, 2008
August 5, 2008
$423 Million
$26.1 Million
79
AMERICOM
Government Services
QRSciences Pty Ltd
Northgate Information
Solutions
BAE Systems PLC
Constellation Software
SI International
The O’Neil Group
Company
SRA International
Command Information
Carlyle
Trace Systems
Cogen Systems
SRA International
Silver Lake Sumeru
Raytheon
AuthenTec
VSE Corporation
Gores Equity LLC
KBR
3i Group plc
Public Consulting Group
National Interest
Security Company
Kratos Defense &
Security Solutions
Thoma Cressey Bravo
Old Git Holdings
WidePoint Corporation
AOS
August 5, 2008
Undisclosed
Spectrum San Diego
Anite Public Sector
Holdings Limited
Detica Group PLC
Municipal Solutions
Group
Arrowpoint Corporation
Braxton Technologies
August 4, 2008
August 1, 2008
$9.32 Million
$96.9 Million
July 29, 2008
July 18, 2008
$1 Billion
Undisclosed
July 16, 2008
July 14, 2008
$16 Million
Undisclosed
Interface & Control
Systems
Idealogica
July 2, 2008
Undisclosed
June 11, 2008
Undisclosed
Booz Allen Hamilton’s
U.S. Government
Consulting Business
TCP Network Solutions
Maximus Security
Solutions Division
Era Corporation
i2
SI Government
Solutions
EzValidation
G&B Solutions
CBE Technologies
Catalyst Interactive
Civic plc
Eclipse Solutions
Edge Consulting
May 19, 2008
$2.54 Billion
May 12, 2008
May 8, 2008
Undisclosed
$5 Million
April 29, 2008
April 24, 2008
April 18, 2008
Undisclosed
Undisclosed
Undisclosed
April 16, 2008
April 14, 2008
April 8, 2008
April 8, 2008
March 31, 2008
March 13, 2008
March 3, 2008
Undisclosed
$19.5 Million
Undisclosed
Undisclosed
$440 Million
Undisclosed
Undisclosed
SYS Technologies
February 20, 2008
Undisclosed
Manatron
SecureTech Systems
iSYS LLC
January 15, 2008
January 8, 2008
January 2, 2008
$66 Million
Undisclosed
Undisclosed
80
Healthcare Transactions
Eclipsys to acquire Premise
Eclipsys Corporation is acquiring Premise
Corporation, a privately-held industry provider of
patient flow software solutions. Premise is a
leading provider of integrated and clinically
focused software solutions and services that
optimize patient flow, streamline
communications, enhance operational efficiency,
and empower knowledge-based decision
making. Eclipsys is a provider of advanced
integrated clinical, revenue cycle and business
process improvement software, clinical content
and professional services that help healthcare
organizations improve clinical, financial and
operational outcomes.
SXC Health Solutions acquires Zynchros
SXC Health Solutions Corp. has acquired the
assets of Zynchros, a privately-owned leader in
formulary management solutions. Founded in
2000, Zynchros provides a suite of on-demand
formulary management tools to approximately
45 health plan and PBM customers. The
zynchros.com platform helps payers to
effectively manage their formulary programs,
and to maintain Medicare Part D compliance of
their programs. SXC Health Solutions Corp.
provides pharmacy benefit management (PBM)
services and healthcare information technology
(IT) solutions in North America.
Patterson Companies acquires Dolphin
Practice Management
Patterson Companies , Inc. acquired Dolphin
Imaging Systems, LLC and Dolphin Practice
Management, LLC, providers of 3D imaging and
practice management software for specialized
dental practitioners, including orthodontists, oral
maxillofacial surgeons and dental radiologists.
Dolphin’s imaging software maximizes the
benefits of cone beam and other digital
photography and radiography systems by
enabling practitioners to electronically capture,
manipulate and analyze imaging records;
perform diagnosis and advanced 2D and 3D
visualization; and graphically simulate treatment
outcomes. Dolphin’s products support most
cone beam systems, digital radiography
systems, 2D and 3D digital photographic
systems, and picture archiving and
communications systems (PACS).
Manpower Software acquires Baum Hart &
Partners
Manpower Software plc, provider of workforce
optimization solutions, acquired Baum Hart &
Partners, the market leader in the provision of
integrated software systems, consultancy,
training and support services principally to the
National Health Service (NHS). The acquisition
of Baum Hart enables Manpower Software to
extend its offering to the NHS as well as move
into new vertical markets. Manpower Software's
business strategy in the healthcare sector is to
be the leading supplier of workforce optimization
solutions to the UK NHS and broader healthcare
markets. This is Manpower Software's second
acquisition in 2008 after Key IT Systems and
further strengthens their position in the NHS with
regard to temporary staffing solutions and
extends our reach into other vertical markets,
such as education.
Crossflo Systems acquires Iameter
Healthcare Quality Assessment Platform
Crossflo Systems, Inc., a Patriot Scientific
company, has acquired the assets of Verras
Medical, Inc. (dba Iameter) and the Iameter
portfolio of data analysis software and programs.
Iameter provides a healthcare software program
for hospitals and physician groups to assess the
quality of care delivery against state and federal
healthcare standards to help them realize quality
improvements and reduced costs. Using a
software tool called “Sherlock,” Iameter
81
effectively analyzes multiple levels of data for all
inpatient diagnoses and procedures as well as
outpatient surgery and delivers its conclusions in
easily interpreted graphical output. Iameter staff
then train designated hospital personnel to
investigate the sources of clinical variations and
potential inefficiencies using this data-mining
tool. The assets will be utilized to expand the
current healthcare data sharing and analysis
capabilities of the company. This addition to its
healthcare practice gives Crossflo a compelling
solution to the recent federally mandated
requirements to identify and optimize the quality
of healthcare delivery.
HSW International Inc acquires DailyStrength
HSW International, Inc., a developer and
operator of Internet businesses focused on
providing locally relevant, high quality
information, announced the acquisition of
DailyStrength, one of the largest and most
comprehensive health-related social networking
sites.
Fujifilm Corporation acquires Tianjian
Fujifilm Corporation has acquired shares of the
medical IT system company, Tianjian Medi Tech
Co.,Ltd, headquartered in Beijing, China, in
preparation for a full-scale entry into the rapidly
growing medical IT system market in China.
Tianjian offers the development, marketing,
sales and maintenance services for a wide
range of medical IT systems including HIS
(Hospital Information System), EMR (Electronic
Medical Records), RIS (Radiology Information
System), PACS (Picture Archiving and
Communication System), PIS (Pathology
Information System) and regional medical
information systems.
another significant step in Fujifilm's growth
strategy, and a demonstration of the company's
continued commitment to the fields of medical
imaging and health information technology.
Fujifilm is now in command of a fully integrated,
web-based solution for the entire radiology
department. To meet the diagnostic workflow,
efficiency and compliance challenges of today's
radiology environment, healthcare facilities need
a fully integrated solution. Fujifilm has already
made substantial progress in integrating the
Synapse and Empiric applications, and with the
acquisition is now in a position to deliver an
even deeper integration that will yield the
complete imaging informatics solution that
healthcare facilities are seeking.
Toshiba Medical Systems acquires
Advanced Visualization Imaging System
Division of Barco
Toshiba Medical Systems Corporation (Japan)
announced that via its newly formed, whollyowned subsidiary, Toshiba Medical Visualization
Systems Europe, Ltd., it is acquiring Advanced
Visualization Imaging System Division of Barco
nv, Edinburgh, Scotland. The AVIS team has
been conducting research, development and
sales of medical 3D visualization software
products since 1991 as Voxar Ltd. For the past
10 years, Toshiba has used Voxar 3D
visualization core software in its medical imaging
products and Picture, Archiving and
Communication Systems. This acquisition brings
in-house critical core competencies -- the
development of 3D volume rendering and
advanced visualization capabilities for all
Toshiba modalities. The formation of TMVS
establishes a significant multi-modality research
and development center in Europe, ensuring
Toshiba’s unfettered access to leading-edge
technology in an area of the world widely
acknowledged for its innovations in medicine.
Mediware acquires Hann's On Software
Fujifilm Acquires Information Systems
Vendor Empiric
Fujifilm Medical Systems USA has acquired
Empiric Systems, LLC. The acquisition is
Mediware Information Systems, Inc., a provider
of Closed Loop software for blood and
medication management, has acquired
substantially all the assets of Hann's On
82
Software, a pharmacy management software
provider. HOS has been in business for more
than 20 years and has more than 300 facilities
using its Ascend products to manage pharmacy
operations. Most of these customers are either
community hospitals with less than 150 beds,
outpatient clinics, or alternate-site infusion
service providers. HOS is a very well run
business and this accretive transaction is a good
example of how Mediware can strategically use
its cash resources to expand its ability to deliver
patient safety solutions. The addition of the HOS
product suite enables it to sell to a larger market
and complements their strategy to grow
medication management in specialty segments
such as small hospitals and behavioral health.
Deal Value: $3.5 Million (Cash plus undisclosed
earnout)
Perot Systems acquires Tellurian Networks,
Inc.
Perot Systems Corporation has acquired
substantially all of the assets of Tellurian
Networks, Inc., a managed services hosting
provider of Electronic Medical Records (EMR)
and Practice Management (PM) applications to
physician groups. Tellurian serves physician
practice groups with an innovative managed
services hosting model that provides physicians
with world-class technology, such as EMR and
PM applications on a per-doctor and per-user
basis. This model enables physician groups to
lower and control costs while improving patient
care. Perot Systems, which provides
comprehensive healthcare solutions to primarily
large provider-owned practices and academic
medical centers, acquired Tellurian to broaden
its reach into a greater component of the
physician practice group market.
achieved success by providing key tools and
services for improving the management of data
resources for their commercial and
governmental customers and the purchase of
Sunergia was a great opportunity to expand its
customer base among the scientific community
where it has had limited exposure.
PCA acquires Macs Systems
Japanese business software producer PCA
Corp. has acquired medical systems developer
Macs System Corp. as it seeks to broaden its
customer base. Founded in 1994, Macs builds
electronic patient charts and medical billing
systems for hospitals with 100-200 beds. In the
year ended January 2008, it booked 101 million
yen (US$1.03 million) in pretax profit on sales of
418 million yen.
Seller Revenue: $4.3 million (FY-2008)
Nobel Biocare acquires BioCad
Nobel Biocare announced it has signed an
agreement to buy BioCad Medical Inc., a leading
developer of computer-aided software for
prosthetics. Nobel Biocare is a medical devices
group and the world leader in innovative esthetic
dental solutions. The company, based in
Switzerland, also announced the signing of an
exclusive partnership with Optimet, Optical
Metrology Ltd, to offer a new generation of
optical scanners with impression scanning
capabilities. With the acquisition and the
partnership, Nobel Biocare will be in a position
to provide dental professionals a leading optical
scanner and CAD/CAM software, the most
comprehensive material and product offer, and
unique manufacturing capabilities for
prosthetics.
JNetDirect acquires Sunergia
JNetDirect Inc. acquired Sunergia Group Inc.
and its better known operating unit, Sunergia
Medical. Sunergia, a privately owned supplier of
software and lab equipment to the biotech
market, will now be renamed JNetDirect
Biosciences. There are overwhelming amounts
of data acquired, analyzed and stored during
research in the biosciences. JNetDirect has
Infinity Capital acquires Infotech Global
Infinity Capital Group, Inc., a business
development company and public reverse
merger investor, is acquiring Infotech Global,
Inc. ("IGI"), a privately held Bio Informatics
83
technology firm. IGI's healthcare solution
portfolio, ORBIT, includes Payer, Member and
Provider Portals, Wellness Management,
Electronic Data Capture and Electronic Medical
Records. IGI has been in business for over ten
years and has been profitable each year, with
approximately $13.5 million in revenue in 2007.
The IGI/NPIE reverse merger is a platform deal
which will kick off a roll-up program to build a
large software entity providing advanced
products and services to make the healthcare
sector more efficient. This transaction will
leverage ORBIT to enhanced visibility and give
Infinity a platform to grow inorganically.
Johnson & Johnson acquires HealthMedia
Health care product giant Johnson & Johnson
has acquired HealthMedia, a company that
specializes in online health counseling and web
interventions. HealthMedia is a unique property
on the web. It combines its technology and
behavioral science to emulate a health coach in
a browser. The site's suite of services provides
automated coaching for topics on wellness,
disease management, behavioral health, and
medication adherence that the company claims
will help reduce health bills. Because of that,
Johnson & Johnson believes the addition of
HealthMedia to its properties will improve the
company's standing in the health care
community.
Portico Systems acquires Ethidium Health
Systems
Portico Systems, provider of solutions to enable
health plans to reduce administrative, medical
and IT costs, has acquired Ethidium Health
Systems, and will incorporate Ethidium’s clinical
quality and collaboration tools into its Integrated
Provider Management (IPM) platform. The deal
positions Portico well in emerging medical home
and pay-for-performance initiatives by enabling
health plans, IPAs, and other organizations to
more closely collaborate with physicians and
patients to reduce costs and deliver high quality
healthcare. The Medical Home is an emerging
care delivery model that is designed to improve
care by strengthening collaboration between
physicians, patients, and health plans. A
research report in the Annals of Family Medicine
estimated that if every person in the nation had
a medical home, it would generate savings of
$67 billion annually.
Sunquest Information Systems to acquire
Anglia Healthcare Systems
Sunquest Information Systems Inc., a provider
of laboratory and diagnostic information
systems, is acquiring and Anglia Healthcare
Systems Ltd., a private UK-based company and
leading provider of laboratory connectivity,
orders, reporting and messaging solutions.
Anglia is a market leader in the UK, with nearly
60% market share in communications and
reporting systems in NHS Acute Trust Hospitals
in the UK. The acquisition will significantly
broaden Sunquest’s global presence, and
strengthens Sunquest’s outreach and physician
affinity strategy for the international market by
combining Sunquest’s best-of-suite LIS solutions
with a complementary and comprehensive set of
solutions that help create new business
opportunities and better communications
between hospitals, laboratories, physicians,
communities, and patients.
API Software to be acquired by Francisco
Partners
Francisco Partners II, LP is acquiring API
Software, Inc., provider of labor management
solutions for healthcare. API Software provides
time and attendance, staffing and scheduling,
patient classification, payroll, human resource,
productivity management, education tracking
and access control software for healthcare
organizations. API has demonstrated a solid
record of growth in the healthcare marketplace
while maintaining excellent client satisfaction.
Francisco Partners intends to leverage this
success to allow API to accelerate its growth
and solidify its leadership position in the
healthcare human resource market.
84
Medrium acquires Professional Associates
Medrium Inc., a provider of web-based practice
management software for physicians, has
acquired Wilmington Professional Associates
Inc., a medical billing company (billing software)
for hospitals and physicians’ private practices.
Medrium recently raise $10.46 million in Series
C funding and $12.5 million in venture debt. The
acquisition reinforces Medrium's position as a
growing leader.
Announcement Date: October 24th, 2008
NaviMedix acquires TopLine Solutions
NaviMedix, provider of real-time healthcare
communications, has acquired TopLine
Solutions Inc., provider of healthcare payment
and collection solutions, and has partnered with
ClearCycle, Ingenix and Moneris, the industry’s
premier financial information and services
providers, to deliver the industry’s first “all payerall patient” payment solutions for healthcare
providers. NaviMedix, a trusted business partner
to over 625,000 physicians and clinicians
subscribed to its flagship NaviNet platform, will
introduce a suite of low-cost revenue cycle
management solutions that will assist physician
practices and other provider organizations in
managing the challenges posed by increased
patient financial responsibility for healthcare
services. As a partner to both providers and
payers in providing claims-related transactions,
NaviMedix is uniquely positioned to offer
practical estimation, collection and reconciliation
tools for physicians struggling to cope with the
growing amount of patient self-payments.
HealthCare.com buys BrokersWeb
HealthCare.com, a provider of an online
directory of healthcare providers, has acquired
BrokersWeb, a provider of online advertising
solutions for health insurance brokers and lead
aggregators. In addition to operating the
BrokersWeb health insurance pay-per-click
(PPC) platform, BrokersWeb also owns and
operates HealthInsuranceFinders.com
(http://www.healthinsurancefinders.com), a
leading consumer health insurance website and
search engine for health insurance quotes.
BrokersWeb provides its more than 250
advertisers the most-targeted source of PPC
advertising generated from consumer health
insurance queries. BrokersWeb’s proprietary
technology allows its advertisers to bid for
placement to their paid listings and pay on a perclick basis. In addition, BrokersWeb provides
advertisers with additional online conversion
tools such as a ROI analytics, bid transparency
and branded lead generation micro-sites. The
addition of BrokersWeb extends the growth of
HealthCare.com in health care provider
information into the health insurance area.
Quality Systems to acquire Practice
Management Partners
NextGen Healthcare Information Systems, Inc.,
a wholly owned subsidiary of Quality Systems,
Inc. and provider of ambulatory healthcare
information systems and connectivity solutions,
is acquiring Practice Management Partners, a
full-service healthcare revenue cycle
management company. PMP provides physician
billing and technology management services to
hundreds of healthcare providers, primarily in
the Mid-Atlantic region. The company employs
approximately 200 people and generates
approximately $16 million in annual revenue.
PMP will help to build out Quality Systems’ RCM
capability both geographically and with regard to
capacity and talent. This acquisition also
continues to build its base of recurring, visible
revenue.
Canopy Financial acquires CareGain
Canopy Financial, a pioneer in healthcare
banking technology solutions that connect
healthcare and financial services, announced it
has acquired CareGain, Inc. from Fiserv, Inc.
Through the acquisition of CareGain, a provider
of consumer-directed healthcare (CDH) account
administration and management software to
leading health plans, Canopy consolidates the
healthcare banking technology market for
account management and electronic payment
solutions to leading health plans and financial
85
institutions. The combined entity, which powers
the CDH programs of many of the top 25 health
plans and financial institutions, today
administers over one million CDH related
spending accounts nationally. Fiserv retains its
healthcare banking solutions for its financial
institution clients.
HealthGrades acquires WrongDiagnosis.com
Health Grades, Inc., a healthcare ratings
company, acquired WrongDiagnosis.com, a
highly trafficked health information and
community web site. According to comScore
MediaMetrix’s September rankings, the
combined HealthGrades’ sites will comprise the
9th largest ad-supported healthcare property.
WrongDiagnosis.com was owned by Adviware
Pty. Ltd., a privately-held company based in
Australia. HealthGrades acquired the
WrongDiagnosis.com web site, along with the
company’s CureResearch.com web site, certain
intellectual property and other domains. This
acquisition will allow advertisers to target active
patients specifically by condition or treatment
area across a range of content, from healthcare
ratings, to state-of-the-art health risk
assessment tools.
Health Systems Solutions to acquire
Emageon
Health Systems Solutions, Inc. will acquire
medical imaging vendor Emageon. This
transaction will offer HSS the ability to leverage
Emageon’s best-in-market products as well as
broaden and strengthen its management team
with industry leaders. HSS says the ability to
bring together innovators in healthcare
technology and unleash their entrepreneurial
and creative talents will result in cutting-edge
solutions that will improve clinical care and
significantly improve customer profitability.
Revolution Health, Waterfront Media merge
Revolution Health, the Internet health
information company Steve Case founded, and
New York-based Waterfront Media will merge.
Waterfront's Everyday Health Network,
Revolutionhealth.com and other properties will
integrate their content. Waterfront says the
combined company will have more than 20
million unique users. Case said the merger
builds on each company's strengths to create "a
new industry powerhouse." While the companies
did not release financial details, reports peg it at
about $300 million.
Quantros acquires Medcast Health Analytics
Quantros, a leading provider of safety, quality,
and compliance software data infrastructure
solutions for the healthcare industry, acquired
Medcast Health Analytics, a provider of webbased clinical utilization and financial analytic
solutions. Healthcare organizations continue to
have difficulty integrating data across disparate
systems thus preventing detailed analysis of
clinical quality, patient safety, compliance, and
operational performance results. Quantros’
solutions combined with Medcast's technology
create a flexible, intelligent means of accessing
associated clinical, financial, and operational
data within a single, integrated platform. This
combination will enable real-time analysis of
various intervention efforts and their
corresponding impact on such measures as
length of stay, charges, system inefficiencies,
and readmission rates. Access to this
information is critical given the P4P and "at risk"
reimbursement environment in which healthcare
organizations operate.
Nuance acquires Philips Speech Recognition
Systems, Expands European Healthcare
Business
Nuance Communications, Inc. has acquired
Philips Speech Recognition Systems, a
business unit of Royal Philips Electronics and
leader in speech recognition solutions in the
European healthcare market. With the combined
resources of Nuance and PSRS, Nuance
86
significantly enhances its ability to deliver
innovative, speech-driven clinical documentation
and communication solutions to healthcare
organizations throughout Europe. Nuance’s
strong European operational performance this
fiscal year provide motivation for the acquisition
of PSRS. Nuance anticipates its Healthcare
business will now deliver worldwide revenues in
excess of $410 million in fiscal year 2009.
Deal Value: $96.1 Million (Consideration
comprised a cash payment of 21.7 million Euro
on September 26, 2008, and a deferred
payment of 44.3 million Euro to be paid in cash
on September 21, 2009. Nuance expects the
acquisition in fiscal 2009 to add $39 million in
revenue.)
Buyer
China Information
Security Technology
HealthPort
Perseus LLC
Eclipsys
QHR Technologies
WebMD Health Corp.
Marlin Equity
Tripos International
Phase Forward
Health Central Network
Wolters Kluwer Health
Riverside Company
Stalis
PARAEXEL
International
HighPoint Solutions
Surveillance Data
Clinix Medical
Information Services
Nexus AG
Global Med
Technologies
Ebix
Universal Capital
Management
SDI
Domark International
Medical Present Value
McKesson
Healthvision
Target
Shenzhen Zhongtian
Technology
Development
ChartOne
Allscripts’ unit,
Physicians Interactive
MediNotes
Clinicvault
QualityHealth.com
MedAvant Healthcare
Solutions
Pharsight
Clarix LLC
TheBody.com and
TheBodyPro.com
UpToDate
HealthcareFirst
Silverlink
ClinPhone
Announcement Date
September 29, 2008
Deal Value
$16.5 Million
September 23, 2008
September 22, 2008
Undisclosed
Undisclosed
September 19, 2008
September 17, 2008
September 15, 2008
September 10, 2008
$45 Million
Undisclosed
$50 Million
$24.35 Million
September 10, 2008
September 5, 2008
September 4, 2008
$57 Million
$40 Million
Undisclosed
September 4, 2008
September 4, 2008
September 1, 2008
August 14, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Aptiv Technology
Partners
Verispan
MedicWare
August 15, 2008
Undisclosed
August 6, 2008
August 6, 2008
Undisclosed
Undisclosed
Medos AG
eDonor
August 1, 2008
August 1, 2008
Undisclosed
$5 Million
Acclamation Systems
iVolution Medical
Systems
Verispan
TotalMed Systems
TeraHealth
EN-Chart Scanning
Program
MediSolution’s Products
and Services Division
July 30, 2008
July 30, 2008
$22 Million
Undisclosed
July 29, 2008
July 28, 2008
July 17, 2008
July 16, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
July 16, 2008
Undisclosed
87
Global Med
Technologies
iCAD
Health Care Service
Corp.
The HealthCentral
Network
Kardia Health Systems
General Dynamics
Information Technology
Passport Health
Communications
SCIOinspire
Quality Systems
McKesson’s NextGen
Healthcare Information
Systems
Imany
InfoLogix
McKesson’s
RelayHealth
The Word & Brown
Companies
MedAssets
Affiliated Computer
Services
Apax Partners
Worldwide
Nuance Communication
McKesson Corporation
Allscripts
Medidata Solutions
Netsmart Technologies
WiFiMed Holdings
Company
Eclipsys
Lawson Software
Affiliated Computer
Services
System C Healthcare
PLC
Francisco Partners
Elsevier
Elsevier
DocuSys
Allscripts Healthcare
Solutions
Inlog, SA
June 26, 2008
$11.5 Million
CAD Sciences
MEDecision
June 23, 2008
June 18, 2008
$5 Million
$121 Million
MedTrackAlert
June 9, 2008
Undisclosed
Freeland Systems
ViPS
June 9, 2008
June 3, 2008
Undisclosed
$225 Million
Nebo Systems
May 23, 2008
Undisclosed
SOCRATES
Healthcare Strategic
Initiatives
Vivalog LLC
May 21, 2008
May 19, 2008
Undisclosed
Undisclosed
May 14, 2008
Undisclosed
Edge Dynamics
Delta Health Systems
HTP
May 5, 2008
May 5, 2008
May 2, 2008
Undisclosed
Undisclosed
Undisclosed
Qoutit Corporation
April 29, 2008
Undisclosed
Accuro Healthcare
Solutions
CompIQ Corporation
April 29, 2008
$350 Million
April 28, 2008
$22 Million
TriZetto Group
April 11, 2008
$1.4 Billion
eScription
Rosebud Solutions LLC
Misys Healthcare
Fast Track Systems
Nightingale
VantageMed
CyberMedx Medical
Systems
Enterprise Performance
Systems
VasTech
Bowers & Associates
April 7, 2008
April 1, 2008
March 18, 2008
March 17, 2008
February 29, 2008
$363 Million
Undisclosed
Merger
Undisclosed
Undisclosed
February 27, 2008
Undisclosed
February 25, 2008
$53 Million
February 22, 2008
February 22, 2008
Undisclosed
$8 Million
Care Records PLC
January 28, 2008
$6.8 Million
AdvancedMD Software
Edra S.p.A.
MEDai
Prompte
Extended Care
Information Network
January 28, 2008
January 22, 2008
January 17, 2008
January 15, 2008
January 3, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$90 Million
88
Other Vertical Market Transactions
PureSafety acquires Unique Software
Solutions
PureSafety, provider of online safety training
and risk management software solutions,
acquired Unique Software Solutions, Inc.,
developer of Occupational Health Manager.
Launched in 1986, OHM was among the first
multi-module software suites designed to help
Environmental, Health and Safety professionals
streamline workflow, information management
and reporting. OHM has a customer base of
over 2,700 active installations, including
numerous Fortune 500 companies. Born out of a
workplace fatality, PureSafety initially focused
on empowering its customers to more efficiently
and effectively deliver, track and manage critical
workplace safety training. In 2006, it acquired
PerDatum, Inc. and its Prognos software
solutions, expanding its offering beyond training
and incident prevention to include incident,
injury, illness and absence management. OHM
gives PureSafety new capabilities in key areas
such as medical surveillance, industrial hygiene,
MSDS, and medical and clinical management.
Solera acquires HPI
Solera Holdings Inc., a provider of software and
services to the auto insurance industry, acquired
used-vehicle validation-services provider HPI
Ltd, the leading UK provider of used vehicle
validation services, from Aviva plc, the largest
insurance provider in the UK. The acquisition will
help Solera meet some of the increased demand
from its clients for access to integrated historical
information on specific vehicles and specific
clients with which they are about to transact.
Deal Value: $117.4 Million (Cash, note and
earnout)
Trimble acquires KOREC Software assets
Trimble has acquired the FastMap and GeoSite
software assets from KOREC, a privately-held
Trimble distributor serving the United Kingdom
and Ireland. The acquisition, which includes
software development, professional services
and business development teams, will allow
Trimble to expand its Mapping and Geographic
Information System (GIS) solutions to provide
optimized software and professional services in
Europe, Africa and the Middle East. The
FastMap and GeoSite software will enable
Trimble to provide a complete and compelling
solution to its enterprise customers in the United
Kingdom and Ireland. In addition, the software
and professional services team will enable
Trimble to provide custom solutions to key
enterprise customers in the utilities,
transportation and government sectors in
Europe, Africa and the Middle East.
Sabre Holdings acquires EB2
Sabre Holdings announced the acquisition of
EB2 International Limited, a London-based,
independent supplier of e-commerce enabling
software products, solutions, infrastructure and
services to global airlines. In addition to
accelerating Sabre's technology plans for its
recently launched SabreSonic Customer Sales
and Service solution, the acquisition will result in
the industry's most powerful Internet booking
engine with advanced pricing and shopping
capabilities. Sabre Airline Solutions will fully
integrate all of EB2's products and services with
the rest of the SabreSonic Suite supporting
automated refunds and exchanges in addition to
other complex shopping and pricing requests.
This integration will leverage EB2's specialty of
developing flexible solutions that address the
complexities of online travel booking and
simplifying direct sales to the corporate, agency
and end traveler segments.
Constellation Software acquires Food
Service Assets of Superior School Supplies
Constellation Software Inc. has, through its
wholly-owned subsidiary N. Harris Computer
89
Corporation, acquired the food service software
assets of Superior School Supplies, Inc. As a
result of the purchase, Superior staff will join
Harris School Solutions, the Harris business unit
focused on delivering mission-critical systems to
K-12 school districts in North America. Harris will
immediately assume responsibility for the
eTritionWare, MealTracker, AccuScan, and
EZSchoolPay product lines. The Superior staff
will continue to operate from their existing
facilities in Wichita, Kansas and Parsons,
Kansas. This acquisition represents a
continuation of Constellation’s strategy to
expand its food service product offering for
school districts.
Aldata Solution acquires IRI's Apollo Retail
Space and Assortment Planning (business
unit)
Finnish retail software company Aldata Solution
Oyj said that Aldata and Information Resources
Inc (IRI), the leading global provider of
consumer, shopper and retail market intelligence
and insights for the consumer packaged goods
(CPG), retail and healthcare industries, have
entered into a definitive agreement under which
Aldata acquires all of the assets of IRI's Apollo
Retail Space and Assortment Planning business
unit. Apollo Space Planning software is used by
over 300 retail and CPG companies with over
8,000 individual users worldwide and contains
over 20 years of accumulated retail planning and
optimization domain knowledge. The acquired
unit has in total 38 employees, of which 26 are
based in the U.S. and 12 are in Europe.
Scarab Consulting acquires World Document
Solutions
Scarab Consulting is acquiring World Document
Solutions, one of New York's largest eDiscovery
companies. Scarab provides end-to-end legal
consulting and ESI (electronically stored
information) processing to Fortune 500 clients
and large law firms. Having purchased RLS-New
York in May 2008, Scarab now adds World
Document Solutions' considerable resources to
effectively double its Electronic Data Discovery
(EDD) capacity. As a result, Scarab now ranks
solidly in the top five largest eDiscovery
providers in New York City. In addition to
offering increased production capacity and an
experienced project management team,
Scarab's newly combined New York office is
now equipped to provide clients additional
capabilities such as trial services, hosted review
technologies, and litigation readiness consulting.
Stats acquires SportVU
Stats LLC, a provider of sports-related
information and data to media companies that is
jointly owned by the Associated Press and News
Corp, has acquired SportVU, an Israel-based
developer of automated ID and motion capture
technology. Founded in 2005, SportVU utilizes a
sophisticated technology to collect positioning
data of the ball and participants (players and
referees) within the playing field in real time.
SportVU also developed the "hologram" 3D
simulations used by CNN during its Election Day
coverage.
AgencyLogic acquires Smart Streets
AgencyLogic, a real estate industry provider of
single property websites, announced that they
have acquired the single property website
provider, Smart Streets. According to the
company, the acquisition follows six consecutive
quarters of record AgencyLogic growth and is
part of several initiatives aimed at sustaining the
company’s increasing market share into 2009.
AgencyLogic’s vision includes continued growth
through similar transactions and substantial
expansion of the single property website feature
set into other, so far untouched, property
services. With more and more residential
Brokers marketing to ‘For Sale by Owner’ listed
properties, it expects the brand to additionally
provide the residential market with a source of
valuable leads.
Solera Holdings acquires Inpart Servicos
90
Solera Holdings, Inc., provider of software and
services to the automobile insurance claims
processing industry, has acquired Inpart
Servicos Ltda. Inpart is a leading electronic
exchange for the purchase and sale of vehicle
replacement parts in Brazil. Inpart has
developed an extensive network of parts
suppliers as well as an impressive customer list
that includes some of Brazil's leading insurance
companies and collision repair facilities. This
acquisition further demonstrates Solera’s desire
to expand its product and service offerings. The
plan is to extend its success in helping
insurance companies and collision repair shops
work better together by bringing purchasing
efficiency to parts procurement in the collision
repair process.
Dolphin Computer Access acquires Software
Express Distribution
Dolphin Computer Access Limited, the UK
software company responsible for delivering
independence to vision and print impaired
people, acquired Software Express Distribution
Limited. This acquisition enables Dolphin to
bring on board a rapidly growing UK software
development company, most recently
recognized for developing Guide, an innovative
and award winning access tool for blind
computer users. By merging with Software
Express, Dolphin strengthens its continuing
commitment of delivering independence to
vision and print impaired computer users. The
joining of the two firms also brings together
some of the strongest brands and most widely
used access technology available in the market.
Coordimax acquires Pinnacle
Coordimax, the Australian-owned and operated
vendor of CRM, Document Management and
Help Desk tools, has acquired asset, lease and
property management software company
Pinnacle, in a move described by Coordimax
officials as a way to expand the Coordimax
portfolio and grow its local and international
customer base. Pinnacle works the asset and
lease management software market and has
over 200 customers in the education, finance,
healthcare, hospitality, government, mining and
manufacturing, tourism, transport, utilities and
telecommunications sectors. This includes
organizations like Coles, Qantas and Multiplex.
Congressional Quarterly acquires
TrendTRACK Company
Congressional Quarterly Inc., the nation's
premier provider of news, analysis and
information on Congress, politics and public
policy, announced the acquisition of
TrendTRACK, a highly efficient source for webbased legislation information in the 50 states.
TrendTRACK offers a powerful, one-of-a-kind
search engine that connects its clients with the
status and text of every bill in every active
legislature, typically around 200,000 bills in all.
TrendTRACK clients can use the service to
create customized issue reports that are tailored
to their specific interests. The reports are
automatically updated with the latest
developments and the information can be
integrated into clients’ web sites. In addition,
TrendTRACK offers interactive e-mail alerts that
link directly to live data. The acquisition of
TrendTRACK expands CQ's legislative tracking
capabilities beyond the federal realm for the first
time and out to the state legislatures across our
nation.
PROCON and DriveOK merge
PROCON Inc. and DriveOK Inc. (SysLocate)
announced that the companies will merge. The
merger will enable PROCON, the leader in
mobile resource management solutions for the
automotive finance industry, to acquire one
hundred percent of DriveOK and its affiliates.
DriveOK is one of the fastest growing small fleet
GPS tracking equipment and services providers
in the United States. They are also a leading
supplier to the Buy Here Pay Here industry of
GPS tracking and payment protection systems.
This newly formed company will benefit from a
highly experienced management team with
extensive industry knowledge in the areas of
Mobile Resource Management (MRM),
Telematics, Wireless Communications,
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Consumer Electronics, and Subprime Finance
Asset Risk Management.
The Active Network continues acquisitions
The Active Network, Inc. announced the
acquisitions of Automated License Systems,
Inc., Central Trust Bank of Missouri’s
Conservation Licensing Division and its whollyowned subsidiary Outdoor Central, Inc. Each
year, more than 74 million hunting and fishing
licenses are sold in the United States. With
these acquisitions, Active becomes the nation’s
largest provider of hunting and fishing licensing
technology, significantly expanding its range of
outdoor recreation product offerings for state,
county and municipal government agencies. All
three organizations will join Active’s
ActiveOutdoors division, which encompasses
solutions and services for state, natural
resource, conservation and park agencies.
ActiveOutdoors’ breadth of services now include
hunting and fishing licensing software, watercraft
and ATV registration management, as well as
software for automating and managing
reservations for parks, campgrounds, venues,
marinas, golf courses and more. With these
acquisitions, ActiveOutdoors serves a total of 32
state government agencies.
Access Intelligence acquires Solcara
Software and computer services group Access
Intelligence has acquired research and
information management firm Solcara, whose
clients include Visa and Thomas Cook. Solcara,
based in Harefield, Middlesex, specializes in
developing software to search, identify and
analyze information for legal and professional
firms as well as in the media relations, crisis
management and information access sectors.
Access Intelligence is made up of subsidiaries in
York, Stockport, Manchester, Chorley,
Lancashire and Newcastle upon Tyne.
ArgentVive, which sold Solcara, was forced to
sell after failing to secure enough funding to
invest in the business.
Stewart Title Guaranty acquires Brief Convey
Stewart Title Guaranty Co., a leader in the
Canadian title insurance industry, announced
that they have purchased Brief Convey, a
conveyancing software suite developed by Brief
Legal Software Inc. that enables lawyers and
notaries to process residential real estate
transactions efficiently while providing
competitive pricing to their clients. Brief Legal
has established a reputation of providing
software solutions that are focused on the needs
of the legal and real estate communities.
Stewart Title is a long time supporter of these
communities and is pleased to integrate their
title insurance with a software designed to make
the conveyancing process more efficient for
lawyers and notaries. Stewart Title will be
responsible for the marketing, development, and
expansion of Brief Convey with support from the
Brief Legal principals who will assist in the
transition of this product to Stewart Title.
Vista Equity acquires ADERANT Holdings
Vista Equity Partners has acquired ADERANT
Holdings Inc. Vista focuses on vertically
specialized companies that develop and market
software, software-as-a-service, and technologyenabled business services. ADERANT is a
leading global provider of integrated, missioncritical applications for law firms and
professional services organizations. The
company's flagship practice and financial
management application suite, ADERANT
Expert, is deployed to a large and loyal base of
more than 545 clients throughout North America,
Europe, and Asia-Pacific, including 45 of the top
100 global law firms and three of the top
accounting and consulting firms. Acquiring
ADERANT is consistent with Vista's strategy of
partnering with exceptional executives in
technology-oriented businesses. Vista chose to
acquire ADERANT because of its strong market
position, product offerings, loyal and satisfied
customers, and its highly talented and devoted
employees.
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RM Group acquires Computrac
UK-based RM Group, a provider of educational
products and services, has acquired U.S.-based
Computrac, a provider of interactive classroom
technology services. The U.S. represents a
significant development opportunity for RM and
Computrac makes an excellent addition to the
RM Group. The combined business will be
substantially larger than the group's current U.S.
operation and provides a platform for further
expansion in the southeastern U.S. and beyond,
according to RM.
Sage Holdings has acquired Hallvarsson &
Halvarsson
The Riverside Company continued to expand its
international communications company, Sage
Holdings, adding Swedish corporate
communications and web services firm,
Hallvarsson & Halvarsson. H&H offers a
comprehensive suite of corporate
communications services in Sweden. The H&H
business model closely mirrors that of Sage’s
other holdings, as it provides services in
corporate communication, media, crisis
management, M&A communication, investor
relations, web consultancy, CSR and public
affairs. H&H serves many of the largest Swedish
corporations as well as a host of international
blue chip companies active in the Nordic region.
H&H will be able to access new prospects
through relationships to expand beyond the
Nordic region, while H&H can help speed Sage’s
entry into the Scandinavian market and allow
Sage to more smoothly expand into Continental
Europe as well as Asia.
SilkRoad technology acquires VTN
Technologies
SilkRoad technology, inc., provider of talent
management solutions, has acquired VTN
Technologies, Inc., the software-based training
innovation firm known for its Olé Online Learning
Environment. VTN’s Olé is a web-based learning
environment with more than 400,000 subscribed
users across world-class client organizations,
including DirecTV and Rockwell Collins. Olé
reduces training costs by automating learning
development and management processes. The
popular online learning environment product will
be integrated into SilkRoad’s Life Suite under
the new brand name GreenLight. One of
SilkRoad's most successful products,
WingSpan, provides for performance
management, succession planning and
compensation strategies. The VTN Olé Online
Learning Environment will work hand in glove
with WingSpan to provide a framework in which
critical skills can be added to an employee’s
ability to advance, become certified in a vital
discipline and accomplish more than expected.
Vivonet acquires DAS Software
Vivonet Incorporated has acquired Ontariobased DAS Software Inc., a provider of webbased multi location point-of-sale (POS) and
integrated web store solutions for the North
American specialty retail segment. DAS
Software products include: SquashPOS Store
System, SquashPOS Portable POS and
SquashPOS eCommerce Website. Effective
immediately, these products will be rebranded
and sold as "HaloShop" under the Halo Secure
web-based POS brand. Vivonet said the
acquisition represents an expansion of its SaaS
product suite and extends market presence in
the North American specialty retail segment.
The acquisition is consistent with Vivonet’s core
strategy to enable, acquire and organize retail
transactions and both companies share a vision
of "democratized information for retailers."
LexisNexis acquires IDEX, Inc.
LexisNexis, provider of content-enabled
workflow solutions, has acquired IDEX, Inc.
IDEX is a provider of expert witness content to
the legal market. The company maintains an
authoritative, exclusive database of more than
1,000,000 records on 200,000-plus experts –
including expert profiles, testimonial histories,
verdict awards, settlement amounts, authored
content, and expert depositions and court
testimony. The acquisition solidifies the position
of LexisNexis as a leading provider of expert
witness identification and evaluation information.
93
New content from IDEX complements expert
witness data currently available from LexisNexis
through market leading directories, court
dockets, documents, briefs, and public records
offered through its various platforms.
DVT Holdings acquires Emerald Consulting
DVT Holdings has acquired Emerald Consulting,
one of South Africa's leading providers of
software and related services to the legal sector.
Emerald Consulting, founded in 1999, markets
the Elite Practice Management suite of products.
This suite is in use in two-thirds of the global
legal profession. The company's consultants
have diverse and complementary skills in
finance, people management, technology,
software development and business strategy.
Emerald fits well with DVT’s strategy of growth
through entering niche markets with specialized
solution providers.
IDT acquires Silicon Optix
IDT (Integrated Device Technology, Inc.), a
provider of essential mixed signal semiconductor
solutions that enrich the digital media
experience, has purchased the market leading
video processing technology and related assets
from Silicon Optix, including the Hollywood
Quality Video (HQV) brand and the Reon
product line. In addition, IDT has acquired the
members of the Silicon Optix HQV intellectual
property and engineering teams necessary to
continue delivering video processing leadership
and success. The Silicon Optix Emmy award
winning HQV video processing technology
enables the sharpest and most detailed HD
images possible by utilizing features such as
true 1080i-to-1080p HD deinterlacing and a
sophisticated multi-directional diagonal filter that
ensures video free from jagged edges. HQV
also enables SD material to approach HD quality
by employing advanced scaling, per-pixel detail
enhancement, and noise reduction technology
that removes noise and artifacts caused by
compression.
Mindshare acquires Michaelides & Bednash
WPP Group's MindShare is acquiring the
company that practically invented media
planning: Michaelides & Bednash. The media
agency said it will incorporate U.K.'s Michaelides
& Bednash, which was founded in 1994, into its
worldwide Invention Group. Founders and
industry pioneers George Michaelides and
Graham Bednash, along with managing partner
Paul O'Neill, will lead a newly formed planning
unit that will service MindShare's Unilever
account. MindShare's Invention Group oversees
digital content, programming, sponsorship and
planning.
Oracle to acquire Advanced Visual
Technology
Oracle agreed to acquire Advanced Visual
Technology (UK), a supplier of 3-D spaceplanning software for retailers. Advanced Visual
Technology can present a photo-realistic view of
individual stores, then allow a retailer to work
with suppliers and partners to design the floor
space around the product lines available, Oracle
said in announcing the acquisition. Retail is a
vertical application market that Oracle has
targeted since its acquisition of Retek in 2004
and, more recently, 360Commerce in January,
2008. Oracle is competing with SAP in the retail
applications space and is expected to continue
to buy application suppliers in the retail space.
Up-front applications, such as Advanced Visual
Technology, help store owners decide how to
arrange stores and manage retail space for best
product placement. Such applications are
expected to be integrated in the future with
Oracle's back-end applications that analyze
sales data and project where consumers are
spending their money. Advanced Visual
Technology supplements Oracle's financials and
back-end business intelligence with storefront
"boots on the ground" retail know-how.
China TransInfo Technology to acquire
Shanghai Yootu Information Technology
China TransInfo Technology Corp., a provider of
public transportation information systems
94
technology and comprehensive solutions in the
People's Republic of China, announced that its
PRC subsidiary, Beijing PKU Chinafront High
Technology Co., Ltd., is acquiring Shanghai
Yootu Information Technology Co., Ltd.
Shanghai Yootu is one of the largest real-time
traffic data providers in China. It specializes in
the research and development of transportation
information collection systems, transportation
information application systems, transportation
dynamic data processing, and transportation
information location service systems. Shanghai
Yootu possesses a variety of the most advanced
technologies in China's intelligent transportation
field, including transportation information
transmission technology, geographic matching
technology, modeling calculation methods,
simulation forecasting, and terminal
broadcasting technology. This acquisition marks
China TransInfo's third acquisition in 2008.
Buyer
Altada Solution Oyj
Constellation Software
Serena Software
Rearden Commerce
Transinfo Technology
Sabre Holdings
Transcontinental
Roper Industries
Agilysys
AFS Technologies
Tyler Technologies
Edmond Scientific
Company
Sparxent
AdEx Media
Braintech
Technology One
Media Ventures
Leeds Equity Partners
Amphire Solutions
Wright Express
Webloyalty
EFI
Network for Good
Solera Holdings
Rosetta Marketing
Target
Terraventum Oy
Maximus assets
Projity
Global Ground
Automation
Dalian Dajian Zhitong
Information Service Co.
Flight Explorer
Rastar
Horizon Software
International
Triangle Hospitality
Solutions
IRM Corp. and Motek
Information Systems
School Information
Systems
Access Litigation
Support Services
NetworkD Corporation
Ditical Instructor
SHAFI Companies
OutcomeManager
absort Erfolg im Internet
GmbH & Co.
Ex Libris Group
barbox
Financial Automation
Loyalty Ventures’
Incentive Networks
Pace Systems
ePhilanthropy
UC Universal
Consulting Software
GmbH
Brulant, Inc.
Announcement Date
September 24, 2008
September 23, 2008
September 23, 2008
Sepetember 22, 2008
Deal Value
Undisclosed
$40 Million
Undisclosed
Undisclosed
September 18, 2008
$0.28 Million
September 11, 2008
September 4, 2008
September 4, 2008
Undisclosed
Undisclosed
Undisclosed
September 4, 2008
Undisclosed
September 2, 2008
Undisclosed
September 2, 2008
Undisclosed
August 29, 2008
Undisclosed
August 25, 2008
August 15, 2008
August 14, 2008
August 11, 2008
August 5, 2008
Undisclosed
Undisclosed
Undisclosed
$0.9 Million
Undisclosed
August 5, 2008
August 4, 2008
July 30, 2008
July 29, 2008
Undisclosed
Undisclosed
$9 Million
Undisclosed
July 29, 2008
July 29, 2008
July 28,2008
$21 Million
Undisclosed
Undisclosed
July 25, 2008
Undisclosed
95
Group
Bematech
TouchPoint Print
Solutions
Environmental Service
Professionals
AXA Private Equity
Avnet
Open Text Corporation
Vertabase
The Active Network
Porthus
Ingenico
Ecologic Leasing
Solutions
Great Hill Partners
Danware/Netop
FTI Consulting
Parcom Quoted Equity
Kapsch TrafficCom AG
Welocalize
Educomp
smartFOCUS
InnerWorkings
Autodesk
First Data Corp.
Oxford Metrics Group
RGIS
Rockwell Automation
Avnet
Affilliated Computer
Services
Apax Partners
Worldwide
MediaXstream
STMicro
LoopNet
Radiant Systems
Epiq Systems
SQAD
Sage Group
Affiliated Computer
Services
Aegis Communications
MisterChef
Commercial
Communications
Porter Valley Software
Altares Group
Source Electronics
Corbis’ division eMotion
LLC
Accomplice
HY-TEK Sports
Software
Dataficiency
Fujian Landi
Captara Corporation
CAM Commerce
Solutions
GenevaLogic
Attenex Corporation
Transics
Mobility Solutions
Transware
Learning.com
ASTECH InterMedia
etrinsic
Moldflow
InComm
Mobile Video Services
PDSRS
Incuity Software
Horizon Technology
Group
Orbital Science’s
Transportation
Management Systems
Business
D+S Europe AG
Secure Media Solutions
NXP (Merged)
REApplications
Hospitality EPoS
Systems
Pinpoint Global
Wrapsidy
Tekton Group
Communications
Development
AOL’s Call Center
Business
July 23, 2008
July 22, 2008
Undisclosed
Undisclosed
July 18, 2008
Undisclosed
July 16, 2008
July 11, 2008
July 10, 2008
Undisclosed
Undisclosed
Undisclosed
July 9, 2008
July 7, 2008
Undisclosed
Undisclosed
July 2, 2008
June 25, 2008
June 26, 2008
Undisclosed
$17.05 Million
Undisclosed
June 11, 2008
$180 Million
June 11, 2008
June 10, 2008
June 9, 2008
June 6, 2008
May 30, 2008
May 21, 2008
May 14, 2008
May 12, 2008
May 1, 2008
April 28, 2008
April 28, 2008
April 25, 2008
April 22, 2008
April 18, 2008
Undisclosed
$88 Million
$90 Million
$15 Million
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$297 Million
Undisclosed
$4 Million
Undisclosed
Undisclosed
$161.1 Million
April 17, 2008
$42.5 Million
April 15, 2008
Undisclosed
April 14, 2008
April 10, 2008
April 8, 2008
April 8, 2008
$1.55 Billion
$9.4 Million
Undisclosed
April 7, 2008
April 2, 2008
April 1, 2008
March 25, 2008
Undisclosed
Undisclosed
$41.9 Million
Undisclosed
March 25, 2008
$100 Million
96
ADLINK Technology
Synopsys
SAS
Lawson Software
TWL Corporation
Fugro NV
Journey Education
Marketing
FTI Consulting
Microsoft
Tyler Technologies
GE Security
KUE Digital
Accruent
Collexis Holdings
Freescale
Semiconductor
Core 7 Technologies
Hoovers, Inc.
March Networks
Insight Enterprises
Dominion Enterprises
GSI Commerce
Trimble
infoUSA
Trimble
Leeds Equity Partners
Ditigal Angel
Ticketmaster
Commerce Planet
Avnet
Aliant Techsystems
LexisNexis
L-1 Identity Solutions
The Active Network
Ampro Computers
Synplicity
Teragram
Freeborders’ Product
Lifesycle Management
Software Division
Divergent Entertainment
Roadware Group
CCV Software
March 21, 2008
March 20, 2008
March 17, 2008
March 17, 2008
Undisclosed
$227 Million
Undisclosed
Undisclosed
March 5, 2008
February 14, 2008
February 12, 2008
Undisclosed
$20.4 Million
Undisclosed
Strategic Discovery
Caligari
VersaTrans Solution
Inc. and Olympia
Computing Co.
CoVi Technologies
Excelsior Software
FAMIS Software
Lawriter LLC
SigmaTel
February 12, 2008
February 8, 2008
February 7, 2008
Undisclosed
Undisclosed
$15.8 Million
February 6, 2008
February 5, 2008
February 4, 2008
February 4, 2008
Feburary 4, 2008
Undisclosed
Undisclosed
Undisclosed
$9 Million
$10 Million
Fields & Screens
Visible Path
Cieffe S.p.A.
Calence LLC
AVV
e-Dialog
Geo-3D Inc
Direct Media
HHK Datentechnik
GmbH
Campus Management
Geissler Technologies
Paciolan
Value Direct
Azzurri Technology Ltd
MacDonald Dettwiler
and Associates’
Information Systems
and Geospatial
Information Services
Businesses
Redwood Analytics
Bioscript
RegOnline and
WingateWeb
February 1, 2008
January 31, 2008
January 30, 2008
January 24, 2008
January 24, 2008
January 24, 2008
January 24, 2008
January 23, 2008
January 22, 2008
Undisclosed
Undisclosed
$29.6 Million
$125 Million
$22.75 Million
$157 Million
Undisclosed
Undisclosed
Undisclosed
January 16, 2008
January 15, 2008
January 11, 2008
January 10, 2008
January 9, 2008
January 9, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$1.3 Billion
January 8, 2008
January 7, 2008
January 3, 2008
Undisclosed
$43.1 Million
Undisclosed
97
Digital Content
Gaming and Entertainment
98
Consumer Application Software
With consumer spending on entertainment slowing down, consumers will happily spend more to improve
their at-home entertainment experience instead of splurging on outings to restaurants, movies, and
weekend getaways. That means bigger TV screens to connect to video game consoles. People have
been investing in bringing these screens into their homes for years, but very few of them are fully gamed
up and games are a way to get extra entertainment mileage out of those screens at very low cost.
Tight budgets also will foster the proliferation of free or low-cost mobile-phone applications. Case in point:
Apple's iPhone App Store on iTunes, where most applications are free and those that aren't usually sell
for $10 or less. Consumers also can get cheap online software for Research In Motion's BlackBerry and
phones running the various mobile operating systems. In terms of innovation and investment and
purchase, we look for applications that take advantage of the mobile revolution to be very big in 2009.
According to Forrester research, four out of five U.S. households have a PC, but most consumers spend
$50 or less each year on software. Free software bundled with new PCs, as well as free and open source
software and web-based applications, have made it much more difficult to sell consumers packaged
software. Despite the plethora of free applications available, most consumers still want to purchase
commercial software, but they find the prices to be prohibitive. Data analytics can help product strategists
and marketers identify the segments most likely to purchase software. A consumer software subscription
(CSS) sales model will help lower the barriers to entry for consumers — and will also provide vendors
with a more predictable revenue stream.
Having said that, Microsoft is altering the face of the consumer security market, having announced in
November that it is changing its strategy for offering PC antivirus software, with plans to discontinue its
subscription-based consumer security suite and instead offer individuals free software to protect their
PCs. Code-named Morro, the new offering will be available in the second half of 2009 and will protect
against viruses, spyware, rootkits, and Trojans, the company said. Microsoft decided to switch to a free
product because there are still so many PCs out there that lack any antivirus software. Because they're
not concerned about malware, the number of people who don't have antivirus software or don't keep it up
to date exceeds 50 percent in developed markets, and it's worse in emerging markets.
Gaming
The tail end of 2008 has shown a recession-resilient gaming industry take some parting shots. Although
overall industry sales for the month were up 10% and consecutive year-to-year sales are up 22%
(Source: NPD Group), much of that growth happened earlier in the year. The latter half of the year has
been peppered with news of layoffs, falling revenue and EBITDA, and the decline of consumer spending.
Particularly traditional establishments, outlined by our peer group of public companies, in the gaming
world are feeling the pinch due to a huge drop in consumers. Heading into 2009, the dynamics of the
gaming industry are starting to shift and companies are seeing more opportunities to either consolidate or
split from traditional business models.
Consumer spending hit a major decline in the second half of this year and is expected to be down around
0.3% in 2009 (Source: CES 2009), and is stated to be one of the worst years in terms of spending. As a
result, leaders in the industry have been busy cutting costs and insulating themselves for the coming
year. EA and THQ have reduced staff and consolidated facilities; EA in particular increased their
proposed staff reduction to 1,000 employees, or 10% of its total by the end of Q1:09. Electronic giant
Sony is due to go under a massive restructuring of the company that plans to cut ‘unprofitable or non-core
businesses’. Troubled publisher Midway is now on the brink of collapse after its sale by Sumner
Redstone’s National Amusements at huge losses. But perhaps the most telling of the times are the
rumors from Redmond that Microsoft is planning it’s first-ever layoffs in mid-January. Even though the
99
market seems to be taking a downturn, it is also offering an opportunity for companies to reinvent
themselves and change the dynamics of the gaming world. These opportunities will materialize in three
ways: Consolidation, Encroachment, and Split.
Consolidation within industry: Mergers and Acquisitions have always been the fastest way for a company
to expand and continue its profit margins. Thinning margins will have many CEOs looking at alternatives
besides their usual business model. The wave of innovation created by casual games developers has
been attractive for publishers. Smaller developers are being approached by larger companies looking to
acquire their IP and talent to keep their own portfolios fresh. The popularity of casual games, which have
put many smaller development studios in the spotlight, has caught the attention of major publishers. EA’s
acquisition of J2MSoft and Activision’s acquisition of FreeStyleGames are just a couple examples that
come to mind.
Encroachment by Media Companies: With a chance of an increase in consolidation in the gaming world,
media companies that were outsiders to the profitable industry could potentially be looking to invest
heavily or acquire some of their own companies. Although the industry has been rife with interest by
media companies, many fear the lack of experience or resources to successfully deploy products in the
retail channel would impact them negatively, so only a few have made a solid acquisition in the space.
Companies such as MTV had the capital to buy Harmonix, but they did not have the resources or
expertise to deploy their product, which led to an MTV/EA partnership on Rockband. Likewise, big media
companies like Vivendi opted to let Activision handle the deployment of the games; their main concern
was about maximizing their own profitability of Vivendi assets. Other companies like Time Warner are
taking another route, opting to slowly invest money into SCi and figuring out where they can gain most.
Split from the traditional publisher/developer relationships: As the economy changes so do business
models and trends. Although publishers are first to capitalize on new revenue streams, smaller
development studios that don’t have the capital for AAA titles are still getting in front of thousands of
people via casual games. The shorter release cycles, lower development costs, and simple delivery
models have created a flexible environment in which developers can react quickly to consumer demands.
The surprise hits World of Goo and Braid are a testament to the allure and marketability of casual games
and has opened innovative ways to market and sell games. Advertising is still the number one revenue
stream, but companies are diversifying through new trends such as micro-transactions and selling virtual
goods for casual MMOs. That isn’t to say everything will change overnight. Developers will still need to
rely on publishers to fund licenses, marketing and production costs, but with the advent of casual games
we see companies diversifying themselves from the traditional model.
There will be some shifting of the video game industry in 2009. Companies will focus on safe-bet titles;
innovation will still thrive, however, even with increasing consolidation. Leaders in the industry know that
innovation is one of the key features that drive video game sales, and they will be on the prowl to acquire
talented development studios. Casual games have opened a whole new channel for developers to
showcase their talent and content. The downturn in the economy also points more companies to focus on
casual gaming as a more serious revenue stream. Low production costs and easy deployment on
platforms or the web have brought innovative business trends that companies are beginning to capitalize
on. In regards to M&A, companies with the right combination of content, audience, and profitability will be
attractive M&A targets for publishers or media companies wanting to expand their influence in the sector.
100
Consumer Application Software Valuations
Stock
Symbol
ADBE
AAPL
AVID
CCUR
JUPM
NNDS
RNWK
ERTS
KNM
MWY
TTWO
THQI
Company
Adobe Systems Inc.
Apple Computer Inc.
Avid Technology Inc.
Concurrent Computer Corp.
Jupitermedia Corp.
NDS Group plc
RealNetworks Inc.
Electronic Arts Inc.
Konami Corporation
Midway Games Inc.
Take-Two Interactive Software Inc.
THQ Inc.
Sector
C-DC
C-DC
C-DC
C-DC
C-DC
C-DC
C-DC
C-Game
C-Game
C-Game
C-Game
C-Game
Stock
Market Enterprise
Price
Value
Value
$21.29
$11,260.0
$9,460.0
$85.35
$75,870.0
$52,220.0
$10.91
$404.7
$265.6
$3.40
$28.1
$2.2
$0.38
$13.7
$89.8
$57.34
$3,350.0
$2,570.0
$3.53
$476.8
$73.2
$16.04
$5,150.0
$2,460.0
$25.86
$3,550.0
$3,350.0
$0.19
$17.5
$202.0
$7.56
$587.2
$356.8
$4.19
$281.0
$83.5
Trailing Multiple
P/E
EV/EBITDA
EV/S
13.39 x
7.11 x
2.64 x
15.92 x
7.74 x
1.61 x
N/A
20.57 x
0.30 x
N/A
0.93 x
0.03 x
N/A
5.24 x
0.66 x
26.67 x
14.16 x
3.11 x
N/A
N/A
0.12 x
N/A
N/A
0.57 x
13.40 x
5.41 x
0.98 x
N/A
N/A
1.11 x
5.91 x
1.15 x
0.23 x
N/A
0.61 x
0.08 x
13.40 x
5.41 x
0.61 x
Forward Multiple
P/E
EV/S
10.70 x
2.64 x
13.63 x
1.22 x
25.37 x
0.33 x
4.86 x
0.03 x
N/A
0.63 x
19.18 x
2.68 x
N/A
0.12 x
13.37 x
0.52 x
14.78 x
N/A
0.87 x
7.34 x
0.26 x
10.48 x
0.09 x
13.37 x
0.52 x
Digital Content
Gaming and Entertainment
Consumer Market - Number of Transactions by Sub-Sector
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
Digital Content
2008
49.04%
50.96%
Gaming
101
2008 Consumer Application Market and Sector Public Valuation Data
The charts below depict how the broad Consumer Applications market and its representive subsectors
have performed over the past 12 months, tracking both public EV/EBITDA and EV/S multiples.
EV/EBITDA
EV/S
15.00 x
11.26 x
11.45 x
10.99 x
10.00 x
1.91 x
1.70 x
5.41 x
5.00 x
0.99 x
0.61 x
0.00 x
Q1
Q2
Q3
Q4
Sub Sectors
Digital Content
EV/EBITDA
11.80 x
12.42 x
Gaming
EV/S
EV/EBITDA
12.80 x
7.42 x
1.81 x
11.26 x
1.91 x
10.59 x
1.72 x
1.16 x
2.81 x
0.83 x
0.86 x
EV/S
0.66 x
Q1
Q2
Q3
Q4
Q1
Q2
Q3
1.15 x0.57 x
Q4
102
M&A Transactions
Digital Content Transactions
PixelFish acquires Eyespot
The FeedRoom acquires ClearStory Systems
PixelFish, a provider of video advertising
solutions, has acquired Eyespot Corporation.
Eyespot created web-based and mobile video
applications and media libraries for publishers of
all sizes that are used to personalize and virally
distribute video content, powering leading
brands in digital media and over 10,000 mid-tosmall sized publishers. The Eyespot
Personalization Suite features drag-and-drop
online tools that allow users to upload content
from any source, edit, manipulate and mix
content with rights-cleared material and usergenerated content, and export the resultant
media in multiple formats for use on the web,
mobile devices, or as conventional files. The
acquisition enables PixelFish to accelerate the
development of its market leading video
advertising platform by augmenting its custom
video ad creation and optimization technology
with Eyespot’s advanced video publishing,
online video production, transcoding and
advertising-related applications. The acquisition
includes the provisional patents for a number of
critical online video technologies.
The FeedRoom, provider of online video
solutions for media companies, corporations and
government agencies, has acquired ClearStory
Systems, an award-winning digital asset
management software provider. ClearStory’s
solutions provide advanced capabilities for
managing a full range of digital marketing assets
including graphics, documents, and multimedia.
The combination of ClearStory Systems’
powerful open-architecture DAM platform,
ActiveMedia 7.5, with The FeedRoom’s 4.0
Enterprise Video Platform (EVP) will enable the
world’s largest marketing and media
organizations to integrate, manage and deliver
their digital media assets in a single costeffective system.
Meridian Audio acquires Sooloos
Meridian Audio (UK) acquired U.S.-based digital
media company Sooloos. The deal is the latest
move by the U.K.-based Meridian in an effort to
bolster its product portfolio and broaden its
scope of technological capabilities. Meridian
attributes the acquisition to its desire to stay
ahead of the curve as the industry migrates into
the realm of digital media (Sooloos just released
its high-performance $7,900 Ensemble Music
System). The two companies share striking
similarities in culture, product philosophy, pursuit
of excellence and market approach.
Archer Entertainment Media
Communications acquires uBroadcast
Archer Entertainment Media Communications,
Inc. is acquiring www.ubroadcast.com , a
revolutionary new company that enables the
general public to set up their own broadcast
station from their computer, wherever they may
be in the world, creating a live "YouTube"
capability to produce, direct and distribute their
own radio and television shows via the Internet.
Subscribers to ubroadcast.com will be assigned
a standard station that will always belong to
them, and from which they can broadcast, live,
their own individual original programming to
millions of viewers per day. The software is
considered highly innovative. Those who
produce the shows will be able to monitor
exactly how many viewers they have each day
and decide whether their programming could
command actual sponsors who will pay them,
thus generating income, just like standard radio
and TV.
103
Adconion Media Group has acquired KTV
Digital Media
Adconion Media Group, the independent global
audience and content network, has acquired
KTV Digital Media, a leading production studio,
content distribution network and operator of
video destination sites, to form its own content
development and syndication arm to be called
RedLever. As a wholly-owned subsidiary of
Adconion Media Group, RedLever (www.redlever.com) will develop and distribute branded
video entertainment created specifically for
agencies and advertisers across the
Adconion.TV network. Adconion.TV was
established for agencies and advertisers
seeking a scalable distribution solution for
branded video content with robust monetization
opportunities.
Sonic to acquire CinemaNow
Sonic Solutions, provider of digital media
software, is acquiring CinemaNow, a privatelyheld online entertainment provider. CinemaNow
is at the forefront of digital video distribution,
offering over 6,000 high quality Hollywood
movies, TV shows and music videos to users
across multiple platforms. The company has
relationships with more than 250 content
providers, including all major Hollywood studios,
and supplies premium entertainment services to
a host of PC and consumer electronics device
manufacturers such as Dell, HP, Samsung,
TiVo, DivX, and ARCHOS. CinemaNow will
combine with Sonic's Qflix team to form a new
Premium Content Group under the direction of
Mark Ely, Sonic's EVP of Strategy. The group
will focus on increasing the placement of
CinemaNow's storefront on PCs and consumer
electronics devices, and expanding the adoption
of the Qflix technology platform.
IMImobile acquires DX3
Hyderabad-based IMI Mobile has acquired DX3,
a London-based digital content delivery services
provider. IMI says the deal is the first step in an
aggressive European expansion plan designed
to establish the company as one of the largest
managed service providers for digital content in
the region. The company first announced its
European ambitions back in June. DX3 gives IMI
a roster of partners including Sony BMG,
Universal, EMI and Warner Music, and a library
of over two million music tracks. The
arrangement will bring the combined services of
the enlarged group under the IMI brand and see
its DaVinci platform used as part of a managed
service offering.
Private Media Group to acquire GameLink
Private Media Group, Inc. (Spain) is acquiring
the operations of U.S. internet video on demand
and eCommerce developer, GameLink LLC, and
its related companies in exchange for common
stock of Private. The acquisition will create a
uniquely positioned, multi-faceted, global
content, distribution and development company
in the adult entertainment sector. Private is a
brand-driven global content provider of adult
entertainment to a wide range of platforms
including mobile telephone handsets via 85
network operators in 36 countries, IPTV via 35
platforms in 18 countries, broadband Internet,
television broadcasting, DVDs and magazines.
GameLink is the leading U.S. adult
entertainment VOD and eCommerce platform
through its GameLink.com website. The
estimated combined pro-forma revenue of the
two entities for 2007 was $53.8 million, with
GameLink and its related companies
representing 36%.
Point.360 acquires the assets of Video Box
Studios
Point.360, provider of integrated media
management services, has acquired the assets
of Video Box Studios, Inc. Point.360 is a valueadd service organization specializing in content
creation, manipulation and distribution
processes integrating complex technologies to
solve problems in the life cycle of Rich Media.
Video Box is a provider of 3D animation, visual
effects, motion design and digital finishing
services. Video Box provides Point.360 with
added capabilities to meet its customers' needs
for 3D and visual effects. The Video Box team
104
will be located in Point.360’s West Los Angeles
facility to expand its presence in that important
market.
Hauppauge Computer acquires Pinnacle
PCTV
Front Porch Digital acquires SAMMA
Systems
Digital video editing and software firm, Avid
Technology Inc, agreed to sell its Pinnacle
PCTV product line and related assets to
Hauppauge Digital Inc to increase its focus on
software applications. Pinnacle PCTV provides
content delivery and video processing solutions
that facilitate watching and recording television
shows on a personal computer. Hauppauge
expects to continue developing and supporting
both the hardware and software components of
the PCTV line following the closing of
thetransaction.
Front Porch Digital, provider of content storage
management (CSM) for the broadcast, media,
and entertainment industries, has acquired
SAMMA Systems Inc., a leader in the migration
and preservation of videotape to digital files.
Front Porch Digital estimate there are more than
6 billion videocassettes in the world, 1 billion of
them containing historic, important, and valuable
content, representing more than 7,000 petabytes
of high-value data stored only on videotape. An
estimated five percent of this content is lost to
deterioration each year, but the expense of
digitizing it has proved prohibitive. While Front
Porch Digital has offered broadcast customers
near-line and online storage for many years, the
largest collection of media in the world today is
still stored on videotape. FPD’s acquisition of
SAMMA is strategically planned to offer
broadcasters, archiving facilities, and other
content owners a new system uniquely capable
of accessing all that stored content and of
making it available in a cost-effective way.
Logitech to acquire SightSpeed
Logitech International is acquiring SightSpeed
Inc., a provider of Internet video chat and voice
calling solutions and an award-winning provider
of high-quality Internet video communications
services. According to its research, Logitech
believes there is a large untapped market of
people who want to communicate with friends
and family using video. But they want it to be
integrated into their family lifestyle, which means
going beyond the PC. The acquisition of
SightSpeed will provide Logitech with video
calling technology, and a software and services
development team that can be focused on future
video calling initiatives that can enable crossplatform video communications with an intuitive,
lifelike experience, for people sitting in front of a
personal computer or with their family in a living
room.
Aegis Group acquires IF
Aegis Group plc, the marketing communications
group, announced the acquisition of IF, a
Malaysian independent full service digital
agency. Founded in 2002 and headquartered in
Kuala Lumpur, IF specializes in creative,
multimedia design and build, and online media
planning. Its clients include Heineken and
Discovery Networks International. Following the
acquisition, the agency will become the first
dedicated Malaysian office for the Isobar
network, offering digital services to existing
Aegis Media clients, and facilitating clients'
access to other Aegis Media network services.
Malaysia's media spend is still dominated by
press and TV, respectively estimated to make
up 54.9% and 33.1% of overall advertising
expenditure for 2008. Although digital spend is
predicted to be just 1.0% this year, it is growing
at an estimated rate of 52.0%. As a whole,
digital accounts for almost 5% of total ad spend
across Asia Pacific.
Deal Value: $162,000
Autodesk to acquire Softimage
Autodesk, Inc. will acquire substantially all of the
assets of Avid's Softimage business unit.
Softimage was founded in 1986 and is
headquartered in Montreal, Canada. Softimage
105
develops 3D technology for the film, television
and games markets. Its flagship product is
SOFTIMAGE|XSI, an extensible 3D animation
software solution used by leading media and
entertainment companies, including Digital
Domain, Ubisoft, SEGA Corporation, CAPCOM,
Animal Logic and The Mill. Autodesk Media &
Entertainment provides animation, visual effects,
editing/finishing and color grading solutions for
the 3D market, including entertainment and
design industries. Autodesk will be adding
Softimage technology and products to its
portfolio, and welcoming one of the most
talented teams in the industry to Autodesk
Media & Entertainment.
really complements its existing portfolio. The
acquisition also strengthens Riedel’s
development expertise in the field of
professional audio products.
ITmedia acquired zoome
ITmedia Inc, a majority owned unit of
SOFTBANK Media Marketing Holdings Corp,
agreed to acquire the entire share capital of
zoome Co Ltd, an operator of video share
website, from its wholly owned parent, ACCA
Networks Co Ltd.
Getty Images to acquire Jupiterimages
Getty Images, Inc., the leading creator and
distributor of visual content and other digital
media, is acquiring Jupiterimages, a whollyowned subsidiary of Jupitermedia. The
acquisition will benefit existing and potential
customers by making even more digital content
easily accessible. Jupiterimages' customers
already appreciate its value-based offerings, and
through this acquisition they will be able to offer
more content, better technology, more customer
service and additional local content. Combining
Jupiterimages' product with Getty Images'
extensive media assets and global distribution
will further enhance Getty Images' offerings and
provide more relevant content to both
companies' customers while extending the
presence of the Jupiterimages brand to
customers around the world.
Automated Resources Group acquires
Zendition
Automated Resources Group Inc. has acquired
digital publishing company Zendition. Zendition
provides technology solutions to transform
traditional print media into online, interactive,
and eco-friendly digital assets, thus enabling
publishers to maximize the profitability of their
products and services. Automate Resources
believes that Zendition, with its strong
foundation in digital publishing services, will
strategically position it as a leading provider
within this very exciting and growing segment of
the publishing industry. Through Zendition’s
digital publishing services, publishers can create
an easy-to-use, completely interactive
experience for their readers, while providing
additional value-added services for their
advertisers.
Riedel Communications acquires Media
Numerics
Comcast to acquire Radiance Technologies
Riedel Communications, German manufacturer
and supplier of market leading communication
systems for the broadcast, theater and event
industries, acquired digital audio specialist
Media Numerics. Riedel was founded in 1987
and today employs over 170 people spread over
8 locations in Europe, Australia, Asia and North
America. Media Numerics has developed the
real-time audio network, RockNet. With
RockNet, Riedel has a new product line which
Comcast Media Center, the video delivery unit of
Comcast Cable, has bought all of the assets of
Radiance Technologies, a provider of assetdelivery systems for distributing and managing
large digital video files. Radiance's technology
helps move digital video files for the advertising
and enterprise sectors. Radiance, based in
Sunnyvale, CA and founded in 2000, had
investors such as Sutter Hill Ventures, Vanguard
Ventures, Levensohn Venture Partners,
106
ChevronTexaco Venture Equities and Net
Partners, though this sale seems to be more of a
fire sale. The company had raised at least $26
million and possibly more over the years.
News Corp. acquires Remaining Shares of
Jamba (Jamster)
News Corp. has acquired the rest of Jamba, a
mobile entertainment company, from joint
venture partner Verisign. News Corp. previously
acquired a controlling interest in the company -known as Jamster in English-speaking countries
-- in 2007 (51%, $188 million), and combined it
with its Fox Mobile Entertainment unit.
KIT digital acquires Visual Connection
KIT digital, a provider of IPTV enablement
technology and video-centric interactive
marketing solutions, has acquired Czech
Republic's privately-held Visual Connection, a
digital media and IPTV solutions provider for
media outlets in Europe and the Middle East.
Visual Connection offers content digitization,
localization and IP-based editing, storage, video
players and content streaming, as well as set up
of digital network operations centers (NOCs) for
television broadcasters, government entities,
healthcare providers and telecommunications
companies.
Deal Value: $2.5 million in cash (KIT will pay an
additional $7.5 million in KIT digital common
shares or cash (or a combination thereof) at
KIT's sole election, over a 24-month period)
Buyer
Anystream
OpenTV
Whoop
Zoom Media and
Marketing
Best Buy
Adobe Systems
Global Media Exchange
Telestream
Broadcom
PlayBOX
Future US
Ubisoft
Atrinsic
The Orchard
Veridigm
SanDisk Corporation
PlayPhone
Autodesk
ROK Entertainment
Group
Strands
Kyocera Mita
Corporation
Sonic Solutions
Target
Voxant
Ruzz TV
XOsphere LLC
ClubCom
Announcement Date
September 23, 2008
September 23, 2008
September 23, 2008
September 16, 2008
Deal Value
Undisclosed
Undisclosed
Undisclosed
Napster
YaWah ApS
inDplay
Vara Software
AMD’s Digital TV
Business
New Visions Mobile
BallHype
Hybride Technologies
Ringtone.com
TVT Records
MediaPal
MusicGremlin
Pitch Entertainment
REALVIZ S.A.
Jalipo Ltd.
September 15, 2008
September 15, 2008
September 9, 2008
August 26, 2008
August 25, 2008
$126.8 Million
Undisclosed
Undisclosed
Undisclosed
$192.8 Million
July 24, 2008
July 15, 2008
July 8, 2008
July 2, 2008
June 19, 2008
June 11, 2008
June 10, 2008
May 9, 2008
May 7, 2008
May 6, 2008
Undisclosed
Undisclosed
Undisclosed
$8 Million
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Expensr
Peerless Systems
April 29, 2008
April 28, 2008
Undisclosed
$37 Million
Simple Star
April 28, 2008
Undisclosed
107
Sony Corporation of
America
imeem
Buzznet
LiveWire Mobile
Trident Microsystems
Entriq
Dialogic Corporation
Kodak
Hellman & Friedman
Nstein Technologies
ARC International
Sigma Designs
imeem
Engauge
Motorola
Shutterfly
Gracenote
April 22, 2008
$260 Million
SNOCAP
Qloud
Groove Mobile
Tiside Electronics
Design Co.
DayPort
OpenMediaLabs
Design2Launch
Getty Images
Picdar
Sonic Focus
Gennum Corporation’s
VXP Image Processing
Business
Anywhere.FM
StreamRight
Soundbuzz Ltd.
Nexo Systems
April 7, 2008
March 31, 2008
March 18, 2008
March 13, 2008
Undisclosed
Undisclosed
$14.5 Million
$1.9 Million
March 10, 2008
March 4, 2008
March 4, 2008
February 20, 2008
February 13, 2008
February 12, 2008
February 11, 2008
Undisclosed
Undisclosed
Undisclosed
$2.4 Billion
$6.6 Million
$6.5 Million
$18 Million
January 28, 2008
January 17, 2008
January 7, 2008
January 4, 2008
Undisclosed
Undisclosed
Undisclosed
$15 Million
108
Gaming and Entertainment Transactions
Ray Flame Entertainment acquires Peak
Virtual Entertainment
Contraption traffic, it doubles their traffic to 2
million unique people each month.
Ray Flame Entertainment Inc., browser-based
MMO game developers and publishers, is
acquiring Peak Virtual Entertainment, a leading
MMO browser game developer and publisher in
China. Established in June 2004, the company
is headquartered is Beijing, China and has set
up branches in the United States. Peak provides
entertainment variety to mobile users with its
non-flash web games and was called "leading
the race to become the first web-browser MMO
strategy game that is fully playable on both
smart phone devices and on PCs" by industry
experts. Upon the acquisition and successful
integration of platform and services, the Peak
platform and its two games will be migrated to
Webmmo.com, the official game platform of Ray
Flame Entertainment. Players from each
platform can continue to play all three games in
the new platform with their original ID and also
have more games to play. The acquisition will
increase the total user base of Ray Flame from
150,000 registered users to 350,000 registered
users and will successfully enable Ray Flame to
address a broader audience.
Emotive Communications gets $6.25M and
buys Sennari Entertainment
Emotive Communications, a developer of smart
media applications for mobile entertainment,
announced that it has raised a $6.25 million
second round of venture capital financing, led by
the Mayfield Fund. In addition to the funding
round, Los Angeles-based Emotive also
announced its acquisition of Sennari
Entertainment, a developer of networked mobile
games. The Sennari Entertainment acquisition
gives Emotive access to the Sennari mobile
CRM and loyalty platform. Sennari has an
extensive international track record in prize-play
gaming, micro payments and virtual currency
transaction, like digital award redemptions.
Deal Value Undisclosed
Infogrames to acquire Cryptic Studios
inXile entertainment acquires Fantastic
Contraption
inXile entertainment announced the acquisition
of Fantastic Contraption, an online physics
puzzle game that the company sees as the next
Line Rider. The brainchild of independent
developer Colin Northway, Fantastic Contraption
was first released over the internet in July of
2008 and to date almost three million people
from almost every country in the world have
visited the site, creating millions of contraptions.
inXile holds the rights to Fantastic Contraption
for all platforms and plans to release an iPhone
application in time for the holiday season.
Fantastic Contraption fits perfectly with inXile’s
user generated content strategy and, when
combined with the 1 million unique visitors a
month from Line Rider with the Fantastic
France-based video game publisher Infogrames,
the parent company of Atari, announced that it
will acquire Los Gatos, Calif.-based Cryptic
Studios, a developer of massively multiplayer
online games. Founded in 2000, Cryptic has
developed titles including City of Heroes and
City of Villains, which have generated over $100
million in revenues and count up to 180,000
peak subscribers. Infogrames said that Atari will
benefit from Cryptic's development team, as well
as its proprietary engine, content development
tools and online server architecture.
Deal Value: $27.6 Million (Cash and stock plus a
potential earnout of $20 million)
Perfect World acquires subsidiary of Global
Interserv
Chinese online game operator, Perfect World
Co. Ltd., is acquiring Global InterServ Inc.’s
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subsidiary, Global InterServ (Caymans) Inc.
After the acquisition, Global Interserv Caymans
will become a wholly-owned subsidiary of
Perfect World. Chi Yufeng, CEO of Perfect
World, noted that the acquisition will further
enhance Perfect World's online game
developing strength via two Chinese mainlandbased subsidiaries, respectively in Shanghai
and Chongqing, of the acquired company.
Global InterServ (B.V.I.) Inc. is a subsidiary of
Taiwanese game developer Global InterServ
International Inc.
Redstone Sells Majority Stake in Video Game
Publisher
The media mogul Sumner M. Redstone, the
controlling shareholder of Viacom and CBS, sold
his majority stake in the video game publisher
Midway Games as his family’s holding company
sought to get out from under $1.6 billion in debt.
Mr. Redstone, the family’s holding company,
National Amusements, and another entity called
Sumco sold their approximately 87.2 percent
interest in Midway to a company led by the
investor Mark Thomas, according to a filing with
the Securities and Exchange Commission.
Midway, best known for its Mortal Kombat video
game, had 92.1 million shares outstanding as of
Oct. 31. Mr. Thomas also agreed to assume $70
million of senior secured and unsecured debt in
the deal, the filing said.
Orbis acquires Electracade
Orbis Holdings Ltd, the parent company of Orbis
Technology Ltd, the leading provider of
interactive gaming and betting solutions,
announced that it has acquired UK-based online
interactive games developer, Electracade Ltd.
Established in 1996, Orbis Technology Ltd, an
NDS Group company, is the world’s leading
provider of interactive gaming and betting
solutions. Orbis develops pioneering front-end
and back-office solutions, from unique and
compelling games to sophisticated management
and reporting tools. Electracade has established
a portfolio of innovative and compelling games
which fully complement Orbis’ existing product
range.
Electronic Arts acquires J2MSoft
Electronic Arts Inc. announced the acquisition of
J2MSoft Inc. (J2M), a Korean developer of PC
online games. J2M develops free-to-play online
games which are monetized through microtransactions and advertising. Online games
created and wholly owned by J2M include
RayCity, TAAN, and Debut, and other properties
to be announced. “Korean developers have
created a unique style of online games that is
growing in popularity all over Asia," said J2M
Founder and CEO KyungMin Bang. This is a
significant step in EA's strategic plan for
developing and publishing online games in Asia.
A2M acquires Wanako Games
A2M (Artificial Mind and Movement), Canada's
largest independent game developer,
announces that it has acquired Wanako Games,
a video game studio located in Santiago, Chile.
The first and largest game studio in South
America, Wanako Games specializes in the
production of downloadable interactive content.
The studio is acquired by A2M from Activision
Blizzard. With this transaction, A2M is
expanding its offering across Xbox Live Arcade
(XBLA) and Playstation Network (PSN), using
Wanako's established TONGAS game
framework, while entering a growing market
segment which complements its existing
portfolio. Wanako Games employs 40 people
and will continue to be based in Santiago, Chile
Koei and Tecmo to merge
Ninja Gaiden developer Tecmo and Dynasty
Warriors studio Koei are planning a merger.
Koei and Tecmo have issued a joint, Japaneselanguage press release stating the formal details
of their merger. Koei will take over Tecmo in a
stock agreement worth 20 billion yen (US$206
million, £137 million). This is about twice the
estimated valuation of Square Enix’s earlier
rejected attempt to take over Tecmo.
110
Deal Value: $206 million (Stock)
Monumental Games acquires Swordfish
Studios
Another studio displaced by the ActivisionBlizzard merger is on its way to a home. UKbased Monumental Games acquired Swordfish
Studios Manchester, one of two main branches
of 50 Cent: Blood on the Sand developer
Swordfish Studios. The 26 Swordfish developers
will bring Monumental's total development staff
past 100. Swordfish Studios was part of a group
of former Vivendi-owned developers which
newly-merged Activision Blizzard announced it
would seek to shed. Swordfish's upcoming 50
Cent title, whose publishing rights were acquired
by THQ, was apparently in development at
Swordfish Birmingham, a division not picked up
by Monumental. Much of Monumental's focus is
on MMO-related middleware, including its
Monumental Technology Suite; it is also
currently developing the MMO Football
Superstars for Cybersports Limited. The
company also recently established a studio
based in India.
Silverback Media acquires Jambo Mobile
Solutions
Silverback Media Corp. is acquiring Jambo
Mobile Solutions Inc. from SilverBirch Inc.
(Canada). SilverBirch said the divesture of noncore Jambo allows the Toronto company to
focus on its core strengths and new business
strategy of expanding in online video games.
The company said it recently restructured its
operations and continues to review non-core
operations to further cut costs, improve
profitability and provide more cash for strategic
investments in online multiplayer games and
development of new games. Silverback is a
global mobile software provider with operations
in Toronto, Los Angeles, Miami, Montreal, Paris
and Aix-En-Provence, France.
Ubisoft acquires World in Conflict brand
French games developer and publisher Ubisoft
has acquired Sweden-based development
business studio Massive Entertainment as well
as the real-time strategy brand World in Conflict.
Activision Publishing acquires Budcat
Creations
Activision Publishing, Inc. has acquired video
game developer Budcat Creations. Budcat
Creations is an award-winning development
studio with expertise on the Wii home video
game system and the Nintendo DS. Activision
said that Budcat will be working on a new Guitar
Hero game, but no other details about the new
game have been released. Budcat has ported
Guitar Hero III: Legends of Rock, Guitar Hero:
Aerosmith, and Guitar Hero World Tour to the
PlayStation 2. The company also developed the
Wii shooter Blast Works: Build, Trade, Destroy.
In addition to strengthening its development
capabilities on the Nintendo platforms, this
acquisition increases Activision’s Guitar Hero
development resources as it continues to grow
the franchise and expand its leadership position
in the music-based genre.
1C acquires Avalon Style Entertainment
1C Company announced it acquires Avalon
Style Entertainment, a Russian game studio
known for its 4×4 racing game series such as
4×4 Hummer and 4×4 UAZ to form 1C-Avalon.
Prior to acquisition, 1C was Avalon’s publishing
and distribution partner. 1C Company
specializes in distribution, publishing and
development of business, entertainment and
educational software. Founded in 1991 as an
accounting software vendor, 1C has become
one of the largest publisher and distributor of
computer and video games in Eastern and
Central Europe.
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Amazon acquires Reflexive
Amazon has acquired the Orange County-based
gaming company, Reflexive. The acquired
company builds and distributes games and has
developed 15 games so far for different
platforms which include PC, Mac, Xbox 360
along with online games including flash-based
games.
Performance Designed products has
acquired In2Games
Performance Designed Products announced
that it has acquired In2Games, a British and
Hong Kong-based developer of motion sensing
gaming technology. In2Games is the creator of
Gametrak Freedom, an ultrasonic 3D motion
sensing technology which delivers performance,
control and flexibility far in excess of that offered
by existing technologies. Until now, gaming has
been limited to the player interacting with
the game, although platforms such as the Wii
have heightened this experience. Now, with the
latest motion sensing technology created by
In2Games, the game will interact with the player.
SilverBirch to acquire Red Mile
Entertainment
SilverBirch Inc., a Toronto-based game
software developer and publisher, is
acquiring Red Mile Entertainment, Inc., a
developer and publisher of interactive
entertainment software. The merger is
expected to provide a number of immediate
benefits to the combined companies as they
continue to grow their respective publishing
businesses. SilverBirch, with offices in
Toronto, Dallas and the Netherlands, is a
fast-growing publisher of handheld, mobile
and massively multiplayer online games
("MMOG"). Red Mile is a California-based
video game publisher with worldwide rights
to established brands including the Heroes
flight combat franchise. Heroes of the Pacific
sold over 600,000 units and the sequel,
Heroes Over Europe, is expected to ship in
March 2009. SilverBirch's financial and
operational elements complement Red Mile's
expertise as a licensor, developer and
publisher of PC and console games.
SouthPeak Interactive acquires Gamecock
Media Group
SouthPeak Interactive Corporation, a videogame
publisher, acquired Gamecock Media Group.
Gamecock brings SouthPeak a solid slate of
upcoming titles, including Legendary, Mushroom
Men and Velvet Assassin and supports its
strategy of working with independent
developers. SouthPeak Interactive Corporation
develops and publishes interactive
entertainment software for all current hardware
platforms. SouthPeak will allow Gamecock to
continue to bring original titles from independent
developers to market with a stronger sales and
distribution reach.
Buyer
Turner Broadcasting
Social Gaming Network
Zen Gaming
Activision Publishing
Target
Metaboli
Facebook’s
(fluff)Friends
Power Play
Development Corp. and
NLOP.com
FreeStyleGames
Announcement Date
September 25, 2008
September 16, 2008
Deal Value
Undisclosed
Undisclosed
September 15, 2008
Undisclosed
September 12, 2008
Undisclosed
112
VSST
Reaxion Corp.
Axel Springer AG
Broadcaster, Inc.
SkyZone Entertainment
Mobliss Inc.
Gamigo AG
Lamplighter Studios
September 12, 2008
September 10, 2008
September 8, 2008
September 8, 2008
Paramount Pictures
Playtech
PlaySpan
Player X
IPC Media
GE and NBC Universal
International Game
Technology
Electronic Arts
Electronic Arts
NanoSensors
Screen Life
MIXTV Ltd.
PayByCash
Gaelco Moviles
Mousebreaker.com
BigPoint
Cyberview Technology
September 2, 2008
August 12, 2008
July 16, 2008
July 16, 2008
June 24, 2008
June 9, 2008
June 4, 2008
Undisclosed
Undisclosed
1.6 million shares of
Broadcaster, Inc.
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$107.8 Million
$76 Million
ThreeSF
Hands-On Mobile Korea
The Gaming Network
AG
Kynogon SA
Gameloft’s Video Game
Development Studio
Gamestar
June 3, 2008
May 21, 2008
May 9, 2008
$30 Million
Undisclosed
Undisclosed
May 8, 2008
April 15, 2008
Undisclosed
Undisclosed
April 7, 2008
Undisclosed
Mad Doc Software
Dynamite Idea
Gamepot
April 4, 2008
April 2, 2008
February 28, 2008
Undisclosed
Undisclosed
$73.4 Million
Ascended
Entertainment LLC
Trymedia
Superscape Group plc
Saturn Software
Solutions Pty Ltd
Big Huge Games
Neodelight
Illusion Softworks
February 27, 2008
Undisclosed
February 22, 2008
January 23, 2008
January 17, 2008
Undisclosed
$36 Million
$.712 Million
January 14, 2008
January 11, 2008
January 8, 2008
Undisclosed
Undisclosed
Undisclosed
January 7, 2008
January 2, 2008
Undisclosed
Undisclosed
Autodesk
Ubisoft Entertainment
SA
Disney Interactive
Studios
Rockstar Games
Boss Media
So-Net Entertainment
Corp.
Signature Devices
RealNetworks
Glu Mobile
Odyssey Gaming Ltd
THQ
7Seas Technologies
Take-Two Interactive
Software
Handmark
Mandalay Media
Astraware
Twistbox Entertainment
113
Communications
Security
Development Tools
Systems Management
Legacy Extension / SOA
Storage
Network Management
Virtualization
114
The Infrastructure Software sector covers a lot of territory. We track deals in this sector across a wide
range of infrastructure segments including Communications, Development Tools, SOA, Network
Management, Security, Storage, Systems Management and Virtualization. Many of the predicted hot
spots for trends and disruptive technologies reside in this sector.
Virtualization, server consolidation, performance management, etc., were hot topics throughout the year
and this reflected in acquisition targets. Virtualization will be the highest-impact trend changing
infrastructure and operations through 2012, according to Gartner. Virtualization will transform how IT is
managed, what is bought, how it is deployed, how companies plan and how they are charged. As a result,
virtualization is creating a new wave of competition among infrastructure vendors that will result in
considerable market disruption and consolidation over the next few years.
The storage story of 2008 was growth with an accelerating explosion of information, much of it in the form
of video. Overall demand for storage capacity is growing by about 60 percent per year, according to IDC.
In 2009 we expect to see companies focus on efficiency, seeking to increase the utilization of their
storage capacity. A big part of that effort is virtualization of storage, often going hand in hand with server
virtualization and becoming a mainstream technology in 2008. But in addition to the trend toward
disconnecting logical from physical resources, there were a handful of acquisitions this year that signaled
other trends in the storage world. Brocade Communications acquired Foundry Networks and Cisco
acquired Nuova to better position themselves in the next generation SAN segment, IBM acquired Diligent
for its de-duplication technologies, and EMC acquired Pi, a provider of software and online services for
consumers to keep track of personal information stored locally or online. With the economy weakening,
cloud storage will be big in 2009. Paying for additional capacity on a monthly basis moves that expense
out of the IT department's capital budget and into its operational budget, which tends to be easier to fund
when times are tough.
To deal with the growing complexity and cost of application deployment, maintenance and performance,
organizations are looking for solutions to streamline, secure and manage delivery of their most businesscritical applications. As usual, security was a strong sub-sector. Even though security sees a significant
number of deals in each of our reporting periods, the space is broad and still fairly fragmented.
Consolidation in the marketplace is becoming increasingly necessary as more end user customers
demand end-to-end, best of breed security solutions from a smaller number of vendors.
Communications
By the end of 2008, thoughts that the telcos would not be affected by the general market downturn had
been swept aside as major job losses were announced by AT&T, Telecom Italia, Virgin Media, Nokia and
Nortel, amongst others. In the UK, BT surprised the market with a shock profit warning attributed to the
poor performance of the group’s IT Global Services division, and resulted in the loss of 10,000 jobs,
including that of the Global Services’ CEO. The positive spin on 2008 is that things are not as bad as in
2001!
The turmoil in the financial markets seem to have finally undone what was to have been one of the
benchmark deals of 2007 but left uncompleted at the beginning of 2008 - the $42 billion private equity
takeover of Canada’s telecommunications giant BCE. Deals such as this, one of the largest leveraged
buyouts ever proposed, are just not viable in the current climate. But communications remains an active
sector, with a good flow of mid market deals throughout the year. Acquisition continues to be ‘normal’
business practice, allowing larger cash-rich companies to buy-in R&D or market presence. For example,
despite its problems, BT completed a number of transactions including the $105 million (cash) purchase
115
of Ribbit, extending BT’s presence in Silicon Valley and securing a groundbreaking development platform
allowing users to merge mobile calls with the Internet and convert voicemail to text.
The year was mixed for the handset manufacturers as well. By the end of the year all were forecasting a
drop off in unit sales, with Gartner forecasting that 2009 would see an overall percentage reduction in the
low single digits compared to 2008. Nokia, Samsung and LG Electronics all reduced volume forecasts for
Q4’08.
The big handset news in 2007 was Apple’s launch of the iPhone smartphone. This product continues to
take significant market share, benefiting from the launch of the 3G version. Gartner reported 4.72 million
iPhones sold in the third quarter, 12.9% of the smartphone market, leaving it in third place behind Nokia
and RIM. T-Mobile launched the much awaited Google G1 phone in the U.S. and UK. The form factor of
the device itself was something of a disappointment, but the Android platform that it used gave a further
boost to the open source movement. Nokia then offered to buy out its partners in Symbian to make this
also in to an open course platform. 2008 seems to have added to the writing on the wall for the remaining
proprietary platforms.
China and Asia remain markets of enormous potential for telecoms and especially mobile telecoms. In
addition, technology continues to drive growth and acquisitions. IP convergence, broadband and wireless
infrastructure and location-based services are enabling technologies from which new applications are
only now emerging. As income from the provision of communication itself continues to drop away, so
these applications become more of a necessity to the large telcos. So, although 2008 ends more quietly
in this sector than it started, opportunities remain for strong mid-market M&A activity in 2009.
Software Development
Organizations get more performance and higher productivity from their applications, databases, Windows
infrastructure and virtual environments by implementing infrastructure software solutions. Solutions like
SOA, security, SaaS and cloud computing are creating a need for better ways to manage the various
solutions and all the information exchange between them. Beyond doubt, the growing market for
applications and the amount of information residing on servers within most organizations require better
systems to utilize the tools and organize the information flow.
It is expected that more and more organizations, small and medium sized as well as large, will increase
the use of cloud computing applications, or SaaS solutions, rather than installing packages of software on
their own computers. All the BI and BPO solutions available in addition to CRM and ERP solutions require
sophisticated infrastructure software in order for the user to fully utilize what these solutions offer.
Stronger and better infrastructure is needed to make the various applications work together and open
access to the information residing in various formats on various servers.
Software that supports those outsourced offerings should have a bright future, whether it's dataintegration software that connects SaaS to on-premises applications or IT-management software
designed to measure IT service levels. Larger vendors that do not have adequate offerings in these areas
may go shopping for them in order to seek out new revenue sources, which will be hard to find in the
coming year.
Thus we expect deal volume in 209 in the infrastructure-management software segment to be
substantially higher than in 2008, while the deal value will end up substantially lower in 2009 than it did in
2008.
Gartner Group predicts that the future of corporate IT is in private clouds, flexible computing networks
modelled after public providers such as Google and Amazon, yet built and managed internally for each
business's users.
Cloud computing hype centers largely around the outsourcing of IT needs to cloud services available over
the Internet. While this trend is expected to accelerate, Gartner predicts it will also become standard for
116
large companies to build their own highly automated private cloud networks in which all resources can be
managed from a single point and assigned to applications or services as needed.
These new features and solutions require better infrastructure software. There is a need for new and/or
improved infrastructure products and we will see deals next year where middleware and infrastructure
vendors are looking to strengthen their development capacity or product portfolio through acquisitions.
We will also see stronger signs of consolidation in this space. Some companies will try to concentrate
their resources and focus on core activities and thus sell out their infrastructure assets, while others will
have the opposite strategy, seeing infrastructure software as having a lot of potential and try to strengthen
their product development resources and product portfolio in this space.
One example of this was Satyam’s acquisition of Motorola’s development centre in Malaysia. Another is
Quest’s acquisition of NetPro where two companies with strong product portfolios go together to build an
even stronger portfolio and to be well positioned for future growth. Earlier this year Sun acquired MySQL
in order to strengthen its position in the infrastructure space. We think 2009 will show more transactions
similar to these as the established software companies look for new technologies or quicker market
access to stay competitive in a segment expected to stay vivid even in difficult times.
Legacy Exension / SOA
NOT A GREAT DEAL of SECTOR ACTIVITY: Very slow fourth quarter for the sector, which was in line
with the year overall.
Some of the notable deals include:
Oracle acquires BEA
Progress Software acquires IONA
Micro Focus acquires NetManage
IBM acquires ILOG
MORE OF THE SAME: Like most market sectors, the value of comparable publicly traded companies
dropped sharply in the fourth quarter, with companies in the sector losing close to 40% of their market
value in the this quarter alone.
Public Market Multiples
Legacy Extension & SOA
2008
Q1
Q2
Q3
Q4
EV/Sales
2.01 x
1.97 x
2.00 x
1.26 x
EV/EBITDA
11.25 x
n/a
n/a
5.73 x
SIZE MATTERS: Some companies fared a lot better than others in 2008, with small cap companies
appearing to take a bigger hit than the larger software vendors in the sector. For example: Unify ($22
million in revenue, and 11% Net Income) lost close to 55% of its market value, while Tibco ($600 million in
sales, and 5% net income) saw its value decline only 28% in 2008. Compare the current market multiples
to that of BEA Systems which was acquired earlier this year by Oracle for $7.2 million, and with revenues
of $1.4 billion this deal represented an EV/Sales multiple of close to 4x.
Clearly, size is important but the timing of your exit event is even more critical.
PROGNOSIS: It is our collective wisdom that the 0.90x to 1.25x EV/Sales multiples we are currently
seeing in the sector will not see any significant change for the foreseeable future, and in fact it may take
another 3-4 years (or longer) before we reach market multiples in the 2.00 to 3.50 range again.
History provides us with some great insight and correlation of what we should expect in the way of future
valuation multiples. The last time we encountered such a major correction was in the HOT dot.com cycle
of early 2000 when we saw an EV/S multiple as high as 6.7, followed by a rather dramatic drop in
software valuation multiples. As noted in the following chart, it took almost 6 years for the software
industry in general (from 2001 thru to 2007) to reach equivalent market values.
117
ttm P/S
%Change
2000
2001
2002
2003
2004
2005
2006
2007
2008
3.00x
1.50x
-50%
1.60x
7%
2.10x
31%
2.20x
5%
2.60x
18%
2.95x
13%
2.47x
-16%
1.92x
-22%
In spite of today’s low market multiples, if timing is truly everything we should definitely see a lot more
activity in this sector. Some companies will leverage their strong cash position and further consolidate
the sector, others may try and ride out the economic storm and wait for higher multiples which as
suggested above may still be years away, while others will just not survive. Even in tough economic
times, experience has shown that firms actively engaged in M&A discussions are seeing good interest
and attention from buyers and an opportunity to become part of something even larger, while those
looking only to survive will probably either close their doors or be gobbled up in a bankruptcy sale.
Hopefully, common sense should prevail, knowing that that 50% of something is a whole lot better than
100% of nothing.
Security
As the crisis is now roaring in many sectors (where a lot of companies won’t survive) some sectors seem
to appear crisis resilient. Among them is certainly software security. In a recent conversation with an
industry executive who founded a security software company in Idenity Management solution, he said
that they increased revenue by 50% over 2008 and that they are feeling very positive about the year
ahead. He added confidently, “We are in a sector which should have some protection from the recession as organisations look to cut costs by increasing the amount of home/mobile working.”
This quote actually sums up quite well what is going on in the IT security market right now. Security is a
“must have”. In most organizations using IT as their main communication means – that is to say almost
every organization on Earth – security is seen as a cost and not as a something that helps IT production.
But would you do any cost cuts in electricity security? Nonsense! So 2009 should still be a good year for
this sector. Three factors help to sustain that idea:
- Cost cutting is good for any industry: it helps providers to re-think their products, solutions etc to
match the expense criteria of their customers. Quite often adaptation means innovation and/or
simplicity and/or understanding the deep market trends. There are new ways of “consuming”
security; SaaS seems to be a good example.
- Mobile/remote workers: security needs to be adapted to this huge new trend. Oil price makes us
work from home. What a huge IT security impact: imagine if 25% of your employee organization
would like to work from home to save oil, to be greener etc…
- Make it simpler: what is simple works better! In IT security, this is truer than in any other sector of
IT.
Q4 transactions are somewhat confirming these trends. Symantec acquiring MessageLabs is a good
example on how to fasten a vision accomplishment (compared to Symantec Protection Network), be
ahead of the curve meeting customer needs and costs expectations. Acquiring almost at the same time
Eurekify and IDFocus (two companies that are in advance in their markets), CA shows that instead of
adding new complex security layers, they simplify their own solutions, make IAM proactive and closer to
business (role-based) and compliance needs. (DM is becoming user centric and distributed fully
compliant with remote users / partners).
Barracuda with its 3SP acquisition should quickly provide SSL VPN for all; Marshal with its 8e6
acquisition is also bringing to market a more complete and simplified solution. And last, with Checkpoint
acquiring Nokia’s Security Appliance Business, the trends are also confirmed. Customers will have one
provider, one simpler solution widely deployed.
118
Infrastructure Software Valuations
Stock
Symbol
ADTN
ADCT
NOK
OPWV
TKLC
BORL
CPWR
PRGS
WIND
JCDA
TIBX
CSCO
NOVL
CHKP
ENTU
MFE
SYMC
VRSN
WBSN
BMC
CA
IBM
QSFT
RHT
BRCD
EMC
ELX
NTAP
QLGC
QTM
CTXS
DBTK
VMW
Company
ADTRAN INC.
ADC Telecommunications
Nokia Corp.
Openwave Systems, Inc.
Tekelec
Borland Software Corp.
Compuware Corporation
Progress Software Corp.
Wind River Systems Inc.
Jacada Ltd.
Tibco Software Inc.
Cisco Systems Inc.
Novell Inc.
Check Point Software Tech Ltd.
Entrust Inc.
McAfee Inc.
Symantec Corp.
VeriSign Inc.
Websense Inc.
BMC Software Inc.
CA, Inc.
Int'l Business Machines Corp.
Quest Software Inc.
Red Hat Inc.
Brocade Communication Systems
EMC Corporation
Emulex Corporation
Network Appliance, Inc.
QLogic Corporation
Quantum Corporation
Citrix Systems, Inc.
Double-Take Software
VMware, Inc.
Sector
I-Comm
I-Comm
I-Comm
I-Comm
I-Comm
I-DvT
I-DvT
I-DvT
I-DvT
I-L/SOA
I-L/SOA
I-NMgt
I-NMgt
I-Sec
I-Sec
I-Sec
I-Sec
I-Sec
I-Sec
I-SMgt
I-SMgt
I-SMgt
I-SMgt
I-SMgt
I-Stor
I-Stor
I-Stor
I-Stor
I-Stor
I-Stor
I-Virtual
I-Virtual
I-Virtual
Stock
Market Enterprise
Price
Value
Value
$14.88
$926.3
$803.9
$5.47
$527.6
$506.0
$15.60
$57,670.0
$58,290.0
$0.65
$53.8
-$38.5
$13.34
$881.8
$628.1
$1.05
$76.5
$66.8
$6.75
$1,660.0
$1,490.0
$19.26
$768.3
$640.2
$9.03
$688.5
$595.5
$3.00
$59.1
$35.9
$5.19
$906.2
$651.9
$16.30
$95,440.0
$75,140.0
$3.89
$1,340.0
$364.3
$18.99
$4,060.0
$3,250.0
$1.58
$97.1
$65.7
$34.57
$5,280.0
$4,350.0
$13.52
$11,300.0
$10,660.0
$19.08
$3,700.0
$4,330.0
$14.97
$673.7
$718.9
$26.91
$5,050.0
$4,510.0
$18.53
$9,600.0
$9,310.0
$84.16
$113,070.0 $136,900.0
$12.59
$1,330.0
$1,060.0
$13.22
$2,520.0
$2,040.0
$2.83
$1,060.0
$1,640.0
$10.47
$21,370.0
$18,810.0
$6.98
$573.4
$246.3
$13.97
$4,610.0
$3,450.0
$13.44
$1,720.0
$1,300.0
$0.36
$75.6
$450.4
$23.57
$4,280.0
$3,800.0
$8.97
$197.4
$114.5
$23.69
$9,230.0
$7,840.0
Communications
Development Tools
Legacy Extension / SOA
Network Management
Trailing Multiple
P/E
EV/EBITDA
EV/S
12.20 x
6.29 x
1.58 x
N/A
3.18 x
0.35 x
N/A
N/A
N/A
18.53 x
6.95 x
1.38 x
N/A
N/A
0.29 x
11.84 x
5.76 x
1.22 x
17.67 x
5.30 x
1.24 x
56.44 x
21.88 x
1.67 x
2.88 x
N/A
1.52 x
18.54 x
5.73 x
1.01 x
12.26 x
6.69 x
1.86 x
N/A
4.15 x
0.38 x
12.74 x
8.33 x
4.07 x
N/A
16.72 x
0.65 x
40.20 x
13.73 x
2.84 x
18.03 x
5.83 x
1.71 x
N/A
10.23 x
2.74 x
N/A
42.59 x
2.59 x
20.86 x
7.99 x
2.46 x
15.44 x
6.47 x
2.13 x
9.92 x
6.06 x
1.30 x
20.98 x
9.27 x
1.47 x
32.24 x
17.14 x
3.25 x
6.58 x
5.25 x
1.12 x
14.15 x
6.40 x
1.28 x
N/A
2.12 x
0.51 x
17.25 x
7.27 x
0.96 x
16.00 x
5.54 x
1.98 x
N/A
5.25 x
0.49 x
24.55 x
13.53 x
2.42 x
14.95 x
5.44 x
1.21 x
36.45 x
17.98 x
4.40 x
17.25 x
6.47 x
1.47 x
Forward Multiple
P/E
EV/S
12.50 x
1.62 x
9.43 x
0.40 x
11.47 x
0.94 x
32.50 x
N/A
14.82 x
1.34 x
N/A
0.36 x
10.07 x
1.32 x
9.08 x
1.13 x
15.05 x
1.49 x
9.98 x
0.98 x
11.01 x
1.94 x
12.55 x
0.37 x
10.21 x
3.83 x
11.29 x
0.64 x
15.57 x
2.43 x
9.07 x
1.70 x
13.73 x
4.08 x
10.69 x
2.03 x
11.26 x
2.28 x
11.16 x
2.07 x
9.32 x
1.32 x
11.04 x
1.35 x
22.79 x
2.78 x
4.56 x
0.75 x
13.42 x
1.23 x
8.62 x
0.54 x
10.91 x
0.90 x
11.69 x
1.96 x
2.57 x
0.54 x
13.39 x
2.21 x
13.80 x
1.08 x
21.15 x
3.55 x
11.26 x
1.34 x
Security
Systems Management
Storage
Virtualization
Infrastructure Market - Number of Transactions by Sub-Sector
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
Communications
Development Tools
Legacy Extension & SOA
Network Management
Other
2008
30.73%
7.26%
4.47% 5.03%
16.48%
13.13%
6.15%
10.61%
6.15%
Security
Storage
Systems Management
Virtualization
119
2008 Vertical Application Market and Sector Public Valuation Data
The charts below depict how the broad Vertical Applications market and its representive subsectors have
Infrastructure
EV/EBITDA
EV/S
11.39 x
10.71 x
8.98 x
2.08 x
1.98 x
6.47 x
1.67 x
1.47 x
Q1
Q2
Q3
Q4
Sub Sectors
Development Tools
Communications
EV/EBITDA
8.65 x
1.26 x
Q1
EV/EBITDA
EV/S
14.88 x
10.27 x
1.28 x
Q2
6.93 x
0.70 x
6.29 x
1.38 x
Q3
Q4
1.43 x
Q1
Legacy Extension/SOA
EV/EBITDA
11.25 x
2.01 x
Q1
Q2
Q2
2.00 x
Q3
7.99 x1.66 x
Q3
5.76 x1.23 x
Q4
Network Management
EV/S
1.97 x
13.73 x
1.60 x
EV/S
EV/EBITDA
5.73 x
1.26 x
Q4
15.76 x
2.23 x
15.04 x
2.22 x
EV/S
9.84 1.78
x x
5.42 x1.12 x
Q1
Q2
Q3
Q4
120
Systems Management
Security
EV/EBITDA
EV/S
EV/EBITDA
EV/S
20.92 x
16.12 x
3.52 x
3.48 x
13.75 x
2.93 x
10.22 x
11.98 x
10.64 x
2.87 x
2.75 x
8.54 x
2.15 x
7.99 x
2.13 x
2.66 x
Q1
Q2
Q3
Q1
Q4
9.44 x
EV/S
19.69 x
6.83 x
Q1
EV/EBITDA
8.93 x
1.99 x
1.92 x
Q2
16.96 x
4.01 x
5.40 x
1.25 x
Q3
Q3
Q4
Virtualization
Storage
EV/EBITDA
Q2
3.45 x
EV/S
13.85 x
13.53 x
2.58 x
1.04 x
2.42 x
Q4
Q1
Q2
Q3
Q4
121
M&A Transactions
Communications (Infrastructure) Transactions
WHATEVER MOBILE acquires ViiF Mobile
Video
payable upon the achievement of certain order
input targets over the next two years.)
German mobile services provider WHATEVER
MOBILE has acquired Berlin-based ViiF Mobile
Video. WHATEVER MOBILE is an
internationally operating Mobile Solutions
Provider based in Hamburg. Founded in 2002,
the company currently has 37 members of staff.
Based on the flexibility of an in-house developed
platform and direct connections to all German,
Austrian and Swiss operators, WHATEVER
MOBILE implements mobile campaign concepts
and business ideas via SMS, MMS, Voice and
Video. ViiF Mobile Video enables users to
upload their own movies and share them with
other users by placing a video call. The video
call costs are independent of the transferred
data traffic; the user simply pays per minute.
RIM to acquire Chalk Media
Research in Motion Ltd. has agreed to acquire
the mobile-media software maker Chalk Media
Corp. Chalk Media developed Mobile
Chalkboard, which creates and deploys content
delivery to RIM's BlackBerry smartphones. It is
based in Vancouver, British Columbia. Research
in Motion, based in Waterloo, Ontario, has made
a bid of CA$66 million ($52.6 million) for
Certicom Corp., which makes encryption
technology for wireless communications.
Certicom, based in Mississauga, Ontario, has
said it is looking for competing bids.
Deal Value: $18.8 Million (Cash plus a load of
$1.8 million to provide working capital until the
deal is completed)
Tekelec acquires mBalance
Vodafone acquires Wayfinder
Tekelec announced the acquisition of privatelyheld mBalance, a leading developer of
messaging solutions. mBalance's software
enables mobile operators to efficiently support
their text messaging growth with a highperformance, networked messaging solution.
mBalance's software is already an important
element of Tekelec's TekMedia solution which
provides a cost efficient and highly scalable
means of handling text message growth and
security. Founded in 2001 in the Netherlands,
mBalance has 82 employees and solutions
deployed in 48 mobile networks in 38 countries,
including 10 deployments in nine countries as
part of the TekMedia solution. Tekelec leverages
its global leadership in core multimedia session
control and network intelligence to ensure
scalable, secure and highly available
communications.
The increasingly acquisitive Vodafone acquired
Sweden’s WayFinder. WayFinder develops
mobile GPS-enabled location applications,
including a GPS routing app called Wayfinder
Navigator, a POI database called Wayfinder
Earth, and an application called Wayfinder
Active that helps athletes monitor their progress
in outdoor activities. The applications are
available for a wide variety of phones (including
those running Symbian and Windows Mobile
operating systems) but require a GPS-capable
phone to work. (Users without integrated GPS
can also use an external Bluetooth GPS unit if
their phone supports it). Vodafone intends to use
the WayFinder team and technology to develop
new geo-aware applications, but existing
services will continue to function (and, according
to the companies, will become more affordable
and available in more locations). Last spring
they also acquired Danish mobile social network
ZYB for €31.5 million.
Deal Value: $39.5 Million (with up to an
additional $18.1 million of cash consideration
122
HiChina acquires Lang Yan Network
Chinese domain name registrar HiChina has
acquired Beijing-based small and medium
enterprise (SME) mobile e-commerce platform
Lang Yan Network (www.mynet.cn) in an allstock deal, reports Hexun. Lang Yan's core
management team will stay with HiChina after
the acquisition, said the report. HiChina acquired
two other website construction service providers,
chinaok.net.cn and Ningbo Wang Bo, in 2008.
Droplet Technology acquires Sipcall
Droplet Technology, Inc. has acquired privately
held Sipcall, a developer of innovative Session
Initiation Protocol (SIP)-based mobile Voiceover-IP (VoIP) services for consumers
worldwide. Droplet partners with mobile
operators, Internet portals, and device/service
providers to enhance mobile video capabilities in
communications services, business
collaboration, entertainment, and social
networking to leverage the company's unique
and patented innovations in video processing
and service platforms, The integration of
Sipcall's SIP functionality into Droplet's video
service platform further demonstrates its
commitment to supporting the IMS roadmap of
major operators, and also allows it to launch
direct-to-subscriber mobile video services with
carrier-class quality of service capabilities.
Catalyst acquires Integrian
Integrian, a company selling mobile video
technology, has sold to New York-based
Catalyst, one of its equipment suppliers.
Integrian raised some $50 million in venture
capital and was backed by Triangle-area VC
firms Intersouth and Wakefield Group. Motorola
also was an investor. Credit Suisse was part of a
financial syndicate that helped Integrian raise
$36 million in capital, $30 million of which was
spent to acquire an Australian firm. Integrian
also acquired two other companies over the past
three years, Signal Innovations Group in
Research Triangle Park, NC, and Digital Safety
Technologies.
Research In Motion launches takeover for
Certicom
BlackBerry maker Research In Motion Ltd.
announced a hostile takeover bid for Certicom
Corp. Certicom makes digital encryption
technology for wireless communications.
Waterloo, Ontario-based Research In Motion
said it would take its offer, representing a
premium of about 76.5 percent over Tuesday's
closing price on the Toronto Stock Exchange,
directly to shareholders. In a statement,
Research In Motion Chief Executive Jim Balsillie
said the company has been in talks with
Canada-based Certicom since 2007 about an
acquisition but hasn't been able to make a deal.
As it is unable to engage Certicom management
in a meaningful dialogue to advance the terms of
a potential transaction, RIM believes it is in the
best interests of respective shareholders,
employees and customers to make this
attractive offer directly to Certicom shareholders.
Sierra Wireless to acquire Wavecom
Sierra Wireless, Inc., a provider for wireless
modems for mobile computing, is acquiring
Wavecom S.A., a provider of embedded
wireless technology for M2M (machine-tomachine) communication. The agreement
reached between Sierra Wireless and Wavecom
is a key strategic milestone for both companies.
Together, Sierra Wireless and Wavecom will be
a market leader in wireless data, and will be
uniquely positioned to benefit from the
anticipated growth in wireless data for the
mobile computing and M2M markets - which are
expected to grow to over 200 million units by
2012. The combined company is expected to
benefit from significant competitive advantages
in the marketplace.
Deal Value: $277 Million (Cash and credit)
The Fused Group acquires Smart Devices
The Fused Group, one of the UK's leading
Converged Solutions Provider, announced the
acquisition of the assets and good will of Smart
123
Devices Limited, a Surreybased specialist
distributor of mobile and wireless computing
solutions. Manchester-based Fused Group
offers unified communications services,
including connectivity, IP telephony and mobile
applications, for over 175 UK channel partners
under the Fused Networks and Webcalls
brands. Launched in 1997, Smart Devices has
become a leading online specialist provider of
mobile and wireless technology products. The
acquisition is part of the Group's continued
growth strategy - both organic and acquisitive and is in line with its expectations for 2008's
performance.
On Demand Group acquires Mobix
On Demand Group, Ltd., a subsidiary of ondemand television leader, SeaChange
International, has extended its content
aggregation and management services to the
growing European, Middle Eastern and African
mobile video market with its acquisition of Mobix
Interactive. Mobix is a provider of mobile video
and TV services to some of the region’s largest
carriers, including O2 and 3 in the U.K. and
Vodacom in South Africa. Using its proprietary
mobile video and TV platform, Adrenalin, and
core media services, Mobix enables the
deployment of premium and ad-enabled mobile
video and TV services. ODG delivers end-to-end
on-demand service creation, content
aggregation and management for television
companies including Virgin Media, Telekom
Austria, OTE and TTNET, while Mobix’s
managed service approach brings a proven and
successful business model within the
burgeoning mobile media industry. The
acquisition makes ODG the only full-service
partner to enable managed network owners to
tap into both markets.
WiMAX acquires MediaPA
Italian WiMAX operator Aria has acquired
MediaPA, a company active in telecom and
software services in Italy’s Apulia region.
MediaPA is part of the Apulia-based consortium
Cliocom; Clio, which specializes in ICT services
for government bodies, holds a majority stake in
the consortium. Aria has agreed to support
completion of an infrastructure project in Apulia
run by MediaPa, as well as installing more than
200 WiMAX base stations in order to guarantee
coverage of the entire regional territory.
Cavium Networks to acquire W&W
Communications
Cavium Networks, a provider of semiconductor
products that enable intelligent processing for
networking, communications, security and
wireless applications, is acquiring W&W
Communications, Inc. W&W Communications'
unique video technology and software are an
excellent fit for high end video application
requirements where high-quality, super low
latency and high channel density are needed.
Combining W&W Communications’ technology
with Cavium's MIPS and ARM based processors
will enable Cavium to deliver compelling end to
end solutions for the entire digital video cycle.
Video traffic over the Internet has been growing
exponentially and is forecasted to be over 90%
of all consumer traffic by 2012, according to
Cisco's Visual Networking Index study.
Currently, Internet video on the PC is the
primary driver of this growth. Moving forward,
Internet delivery of video to the TV followed by
cost effective, High Definition (HD) interactive
video communications is expected to fuel the
future growth of video traffic over the Internet.
Citrix Systems acquires Vapps
U.S. infrastructure software maker Citrix
Systems Inc. has acquired venture capitalbacked start-up company Vapps Inc. The
company generates revenue from the minutes of
use for its audio conferencing, which is based on
“high definition voice,” or high quality
conferences for calls with dozens of people.
Citrix could use Vapps’ audio in its web
collaboration offerings. The acquisition marks
Azure Capital’s third exit this year, in an
economic downturn that has limited
opportunities for the venture capital industry.
Last month, eBay Inc bought Azure-funded Bill
Me Later, an online payments service, for $945
million. In January, Azure sold WorldWide
124
Packets to network solutions provider Ciena
Corp for $300 million.
Deal Value: $26.6 Million (Cash plus potential
earnout of $4.4 million)
Global Capacity to acquire Vanco Direct USA
Global Capacity (parent: Capital Growth
Systems, Inc.), the telecommunications logistics
company, is acquiring Vanco Direct USA, LLC.
The addition of VDUL will extend Global
Capacity's leadership position as the first global
telecom logistics provider. VDUL's software and
intellectual property assets are complementary
to Global Capacity's unique global pricing and
supply chain management systems and
strengthen the company's intellectual property
that forms the core of its logistics business
model. VDUL's base of recurring revenue
customers fits seamlessly into Global Capacity's
Strategic Sourcing business, while the
customers and revenue from its software
business will bolster Global Capacity's highvalue Software as a Service (SaaS) business.
Strategic Sourcing and SaaS, taken together
with its Engineering Services and Remote
Management Services, form the core of Global
Capacity's predictable revenue business.
Boingo Wireless acquires Opti-Fi Networks
Boingo Wireless has acquired Opti-Fi Networks,
a limited liability company, from Parsons
Transportation Group and ARINC, which
provides Wi-Fi infrastructure implementation and
management for airports around North America.
Boingo is the largest operator of airport Wi-Fi
networks in North America, and with this
acquisition, Boingo will be adding 25 new
airports to its footprint. The acquisition is part of
Boingo's continued growth strategy which
includes expanding and growing the Boingo
Roaming Network worldwide, as well as
partnerships for Boingo Mobile with handheld
manufacturers and carriers.
Amdocs to acquire ChangingWorlds
Amdocs, provider of customer experience
systems, is acquiring Changing Worlds Ltd., a
privately-held provider of personalization and
intelligent portal solutions for mobile service
providers. ChangingWorlds' technology,
combined with the Amdocs’ CES portfolio, will
enable better customer experiences by allowing
end users to quickly get relevant information
based on what they use most, making it easier
to navigate the Internet on their phones and
reducing the time they spend looking for content.
ChangingWorlds' technology currently
addresses mobile devices, and Amdocs intends
to expand the technology to three screens
(mobile, PC and television) to personalize the
customer experience across all touch points.
ChangingWorlds and Amdocs share several
customers including Sprint, the Vodafone Group
and Telefonica O2.
AEP Networks acquires Vados Systems
Multilayered network security and secure access
vendor, AEP Networks, has acquired a previous
alliance partner in the form of Vados Systems
(UK). Vados provides converged, integrated
communications solutions, with which AEP
Networks had formed an alliance in May 2007.
This acquisition is strategic to AEP Networks'
growth for a number of reasons including
strengthening its foothold in the European and
Asian markets. AEP Networks’ portfolio currently
includes SSL VPNs, high assurance IPSecbased VPN encryptors, and hardware security
modules for key management. As a result of the
vendor’s previous alliance relationship, the
companies have collaborated to develop
solutions such as multi-bearer in-vehicle
systems for police forces and the Personal
Deployable Communications pack for
governments and commercial organizations.
Symphony Technology Group to acquire
Teleca
Symphony Technology Group LLC announced a
cash offer for Teleca AB. For purposes of its
evaluation of the offer, Teleca’s board will first
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obtain a fairness opinion. Teleca is a worldleading supplier of software services to major
players of the mobile device industry. The
company offers tailored solutions, systems
design and the integration of software and
hardware for mobile phones. Teleca has about
2,000 employees in 9 countries in Asia, Europe
and North America and is quoted on the small
cap list of the Nordic Exchange.
Telit Communications acquires One RF
Technology
Telit Communications PLC (TC) of Italy, a unit of
Polar Investments Ltd, acquired the entire share
capital of One RF Technology SAS. One RF
Technology SAS, based in Sophia Antipolis,
France, develops wireless data transmission
systems for Machine to Machine (m2m) and
telemetry applications.
Deal Value: $.7 Million (Stock)
Smith Micro Software acquires assets of
Tatara Systems
CornerWorld to Acquire Woodland Wireless
and T2 TV
CornerWorld Corporation is acquiring Woodland
Wireless, including its patented roaming
application, Visitatel, West Michigan CoLocation Services, T2TV and T2
Communications. CornerWorld Corporation, an
online marketing company, is leveraging its
proprietary lead generation engine to garner
qualified leads (prospective customers) for
Fortune 1000 advertisers using a series of
proprietary online channels, including social
networking properties, CornerWorld-owned and
partner representative content websites.
Woodland has over 13 years of operational
experience with over 50 wireless carriers in the
U.S., Canada and the Caribbean, including 8 of
the top 10 U.S. carriers. The Woodland platform
will assist CornerWorld in developing mobile
advertising applications. Using Woodland's
patented technology, CornerWorld will extend its
lead generation capability beyond the Internet to
include the millions of customer impressions
taking place on Woodland's owned services.
Tetco Technologies acquires Voxpilot
Smith Micro Software, Inc., developer and
marketer of software solutions and services for
the wireless market, has acquired certain assets
relating to the Mobile Broadband Business unit
of Tatara Systems, Inc. These assets include
certain intellectual property, patents and
technology related to the broadband connectivity
space. The acquired products include
connection management software and mobility
gateway software to support Authentication,
Authorization and Accounting (AAA) for carrier
deployments. In addition to acquiring the
technology, Smith Micro will also attain some of
the engineering team responsible for
development of these products and services.
Tatara also had leading wireless carrier
customers that will expand Smith Micro’s
footprint in North America and Europe.
Tetco Technologies (France), provider of voicedata convergence, has acquired Voxpilot, a
major player in VoiceXML technology for
interactive voice and video applications. This
merger will provide the opportunity for a wide
range of applications based on an innovative
and state-of-the-art platform utilizing the latest
VoiceXML and CCXML international open
standards evolution. The high performance and
wide range of features of the Voxpilot Open
Media Platform in voice and video combined
with Tetco Technologies voice/data expertise,
applications, and value-added services will allow
for the delivery of feature rich and scalable
solutions.
GlobalLogic acquires InterObject
GlobalLogic, Inc., the leader in global product
development services, entered the Israeli market
and expanded its footprint in Eastern Europe
with the acquisition of InterObject, a software
126
product engineering company headquartered in
Israel with development centers in Ukraine.
InterObject brings deep expertise in embedded
software, mobile and multimedia streaming
products. InterObject is ideal since it is already
well established in the competitive Israeli
market, with a large team of Ukraine-based
engineers who are experienced in the
company’s areas of specialization, like
embedded and mobile product development.
The acquisition of InterObject is GlobalLogic’s
third since January. The company has expanded
its product development teams through the
acquisitions of Dalian 3 CIS in China and Validio
Software in Ukraine.
ActionView to acquire Stanza Systems
ActionView International, Inc. is acquiring
Stanza Systems, Ltd., provider of wireless
management services and technologies. Stanza
Systems applies a propriety end-to-end
management philosophy to the wireless network
and operates a simplified platform that enables
application developers to easily integrate bidirectional wireless data transport into their
applications. The company's experience firmly
establishes it in several key industries:
petroleum, electrical utilities, water and waste
water, telecommunications and manufacturing.
Stanza is in the right type of business
considering the realities of today's economy,
where companies are seeking to reduce costs
through the monitoring and management of
information and resources. By entering the
public markets to further grow its business and
implement an acquisition strategy, ActionView
believes that Stanza has the potential to deliver
long-term value for ActionView shareholders.
Niggemann acquires B&S Computer GmbH
Niggemann Group has acquired B&S Computer
GmbH. With headquarters in Unna (Germany),
Niggemann Group provides solutions in the
areas of unified communications, fixed mobile
convergence, interactive communications,
telematics and Voice over IP. B&S Computer,
based in Homburg (Germany), produces the
“TelMan” IP telephone system. The company
was founded in 1988 and has 30 employees.
This acquisition is a strategic step in order to
develop Niggemann Group’s own products
and establish its expansion strategy.
PEQ Invest 1 AB acquires Mobile Office
business of Teligent AB
Swedish private equity company PEQ Invest 1
AB has agreed to acquire the Mobile Office
business of Teligent AB. The operations will
continue as an independent company under the
new name Emblacom AB. The company will be
headquartered in Stockholm, Sweden, but the
company will also have an office in Helsinki,
Finland. Emblacom develops and sells Mobile
PBX and hosted enterprise communications
solutions to telecom network operators and
service providers.
Convergys acquires Ceon Corporation
Convergys Corporation, a provider of
relationship management, is expanding the
breadth of its Business/Operations Support
Systems (BSS/OSS) solutions available to
clients through the acquisition of Ceon
Corporation, a provider in the development of
product lifecycle management and multi-play
fulfillment software for communications service
providers. Ceon’s breakthrough Product Control
Center (PCC) solution is the communication
industry’s leading purpose-built and standardsbased system focused on enabling service
providers to construct, manage, and deploy a
layered product catalog that includes the full
technical and commercial definition of products.
The new capabilities, delivered as Convergys
Enterprise Product Management Solutions,
enable Convergys clients to more effectively
manage their entire product lifecycle across all
network domains, shortening time to market for
new convergent offers, improving quality, and
reducing the costs associated with managing a
large product portfolio.
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Buyer
BEKO Holding AG
Nokia
Ascom Holdings AG
VanceInfo Technologies
Integrated Broadband
Services
Dialogic Corporation
Zed
OCTuS
netmobile AG
BroadSoft
Wind River
Useful Networks
Apisphere
Global Technology
Resources, Inc.
HP
Single Touch Systems
Aspiro
ROK Mobile
International
Purple Labs SA
BT
Actel Corporation
Kelyniam Global
Digi International
MicroTechnologies
Ariston Global
TransSwitch
Corporation
Sangoma technologies
Corp
Fonix Corporation
NEC
Microsoft
Nokia
Alcatel-Lucent
Target
Brain Force Holding AG
OZ Communications
Carco Wireless’ Test
Solutions Business
Wireless Info Tech Ltd
Parasun Technologies
Announcement Date
September 30, 2008
September 30, 2008
September 29, 2008
Deal Value
Undisclosed
Undisclosed
$12.75 Million
September 30, 2008
September 17, 2008
$1.08 Million
Undisclosed
NMS Communications’
Platforms Business
Mobitween
Nova Mobility Systems
Minick Holding Ltd
GENBAND’s VoIP
Server Platform
MIZI Research
KnowledgeWhere
Navit Innovations
Anyware Network
Solutions
Colubris Networks
Single Touch Interactive
Mobile Entry
MeshLinx Wireless
September 12, 2008
$28 Million
September 8, 2008
September 4, 2008
September 1, 2008
August 28, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
August 28, 2008
August 13, 2008
August 12, 2008
August 11, 2008
$16 Million
Undisclosed
Undisclosed
Undisclosed
August 11, 2008
August 11, 2008
August 7, 2008
August 4, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Sagem Mobiles’ Mobile
Application Software &
Engineering Team
Ribbit
Pigeon Point Systems
Bimen Business
Consultants
Spectrum Design
Solutions
SIGCOM’s Visual
Communications
Technology Division
ACE*COMM
Corporation
Centillium
Communications
Paraxip
July 31, 2008
Undisclosed
July 29, 2008
July 29, 2008
July 28, 2008
$105 Million
Undisclosed
Undisclosed
July 23, 2008
$10 Million
July 23, 2008
Undisclosed
July 14, 2008
Undisclosed
July 9, 2008
$42 Million
July 9, 2008
$4.6 Million
July 1, 2008
Undisclosed
June 26, 2008
June 25, 2008
June 24, 2008
June 19, 2008
$300 Million
Undisclosed
$264 Million
$68 Million
Shanghai Gaozhi
Software Systems
NetCracker
MobiComp
Symbian
Motive
128
Cisco
Amino
IntelliNet Technologies
Belden
Sovereign Wealth Corp.
Verizon Wireless
Onstream Media
Corporation
comScore
Mobispine AB
Intrinsyc Software
International
U4EA Technologies
Vodafone
J2 Global
Communications
Balyly Communications
NXP Semiconductors
Comptel
Keynote Systems
Sonus Networks
Zebra Technologies
Corporation
Eagle Ventures
International
Icera
NaturalInsight
Qualcomm
Artilium
Laird Technologies
Microsoft Corp
CounterPath
Cross Match
Technologies
WIN plc
Arbor Networks
Aptilo Networks
Verdane Capital
Verdane Capital
Verdane Capital
Verdane Capital
Aruba Networks
DiviTech A/S
AssetHouse
Azaire Networks
Trapeze Networks
Multimedia Solutions
Alltel Corp.
Narrowstep
June 10, 2008
June 10, 2008
June 10, 2008
June 6, 2008
June 5, 2008
June 5, 2008
May 30, 2008
Undisclosed
Undisclosed
Undisclosed
$133 Million
Undisclosed
$28.1 Billion
Undisclosed
M:Metrics
General Wireless
Destinator Technologies
May 28, 2008
May 22, 2008
May 21, 2008
$44.3 Million
Undisclosed
Undisclosed
NextHop Technologies
ZYB
Phone People Holdings
Corporation
Coastcom
Conexant Systems’
Broadband Media
Processing Business
Axiom Systems
Zandan
Atreus Systems
Multispectral Solutions
May 20, 2008
May 19, 2008
May 15, 2008
Undisclosed
$49.7 Million
Undisclosed
May 12, 2008
April 29, 2008
Undisclosed
$110 Million
April 25, 2008
April 21, 2008
April 21, 2008
April 16, 2008
$14.2 Million
$3 Million
Undisclosed
Undisclosed
GetFon, LLC
April 15, 2008
Undisclosed
Sirific Wireless
Cogent Technologies
Xiam Technologies
Trisent Communications
Ezurio Ltd.
Danger Inc.
BridgePort Networks
Labcal Technologies
April 11, 2008
April 9, 2008
March 11, 2008
February 12, 2008
February 11, 2008
February 11, 2008
February 4, 2008
February 1, 2008
Undisclosed
Undisclosed
$32 Million
$3.1 Million
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Pocket Group
Ellacoya Networks
Airpath Wireless
Wireless Maingate
Akerstroms RRC
Meru Networks
Aeris
AirWave Wireless
January 21, 2008
January 21, 2008
January 15, 2008
January 14, 2008
January 14, 2008
January 14, 2008
January 14, 2008
January 7, 2008
$8.8 Million
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$37 Million
129
Development Tools Transactions
Flander acquires Endevo
VMware acquires Tungsten Graphics
Software testing and development company
Flander (Finland) has acquired Endevo, the
Swedish expert company in Quality Assurance
and Software Development. The combined
company will become the Nordic leader in
Quality Assurance and one of the leading
development companies for embedded software
systems. Through the acquisition, Flander will
have 500 employees in Finland, Sweden and
China and a turnover of 30 million euro in 2008.
Both Endevo and Flander are high-growth
companies. They provide development, quality
assurance, testing and validation services that
enable industry and telecom customers to
shorten product development cycles, save
development costs by avoiding errors, and
validate products for different markets.
VMware has acquired a company involved with
the development of a very popular series of
graphics technology for Linux. The company is
called Tungsten Graphics, and they have
created: Mesa, an open source implementation
of the OpenGL API DRI. The Direct Rendering
Infrastructure is a framework for allowing direct
access to graphics hardware in a safe and
efficient manner. It includes enhancements to
the X server, to several client libraries, and to
the kernel, all open source 3D accelerated
drivers for the Linux desktop have been created
using DRI technology; Gallium3D, a hardware
and API neutral intermediate format that allows
the company to efficiently build graphics drivers
to support a variety of hardware platforms for
modern 3D APIs on various OS environments;
and TTM Memory Manager, an advanced video
memory manager. VMware hasn't yet reported
on the news, however, Tungsten Graphics
posted an announcement on their company
web. With VMware making a larger push into the
client market with its vClient initiative, the
acquisition of a graphics expert like Tungsten
makes perfect sense. And Tungsten adds that
with the addition of their team members,
VMware will be able to augment their ability to
deliver industry-leading 3D graphics
virtualization capabilities -- great news for a VDI
market.
Redwood Collaborative Media acquires
Software Test & Performance business unit
from BZ Media
Redwood Collaborative Media, a new integrated
B2B media company dedicated to creating
highly interactive and dynamic platforms for
sharing knowledge, insights, and resources for
professional communities, has acquired the
Software Test & Performance (ST&P) business
unit from BZ Media LLC. ST&P serves the global
software testing and performance community,
reaching more than 55,000 IT professionals
through a suite of products that provide
information, education, training, and professional
networking opportunities. Redwood
Collaborative Media creates highly interactive,
integrated, and dynamic platforms for sharing
knowledge, insights, and resources, and is
dedicated to building deep relationships for
professional communities.
BSQUARE acquires TestQuest
BSQUARE Corporation has acquired assets of
privately held TestQuest, provider of test
automation and management solutions for
mobile and embedded devices and applications.
As a result of the acquisition, device developers
and network operators building mobile,
consumer or embedded devices can rely on the
highest quality development expertise from
BSQUARE, plus testing automation tools from
TestQuest for accelerated time-to-market. The
acquisition of TestQuest supports BSQUARE's
strategy to grow its products business and
support customers with the highest quality
130
software and services available, while also
helping them realize the shortest time to market.
TestQuest brings to BSQUARE new enterprise
and mobile operator customers such as United
States Postal Service, T-Mobile International,
Kyocera, Telefónica Móviles and Siemens,
representing a significant expansion of its
market opportunity.
Seller Revenue: $4.8 million (2008)
Fixstars acquires Terra Soft Solutions
Fixstars Corporation, provider of Cell Broadband
Engine-based solutions, acquired Terra Soft
Solutions, the developer of Yellow Dog Linux.
Terra Soft was founded in 1999 to provide a
Linux operating system for the Power
architecture family of microprocessors. With its
early roots in the Apple PowerPC, Terra Soft
grew to become one of the top five Apple Value
Added Resellers, uniquely licensed to install an
alternative to Mac OS, with customers including
Lockheed Martin, Boeing, NASA, DoE labs and
top universities. In the fall of 2005 Terra Soft
began its work with Cell under contract with
Mercury Computer. A year later Terra Soft
expanded its Cell support to the Sony PS3. In
2007, Terra Soft released YDL v6.0 with support
for the IBM BladeCenter QS2x family of
products. Through this acquisition, Fixstars will
continue to maintain Yellow Dog Linux as the
only Linux OS with support for every Cell/B.E.
based product on the market, including Fixstars'
own GigaAccel 180 and Sony ZEGO BCU-100.
SpringSource Acquires G2One Inc.
SpringSource, the company behind Spring, the
“de facto standard” in enterprise Java, acquired
G2One Inc., the company behind the popular
Groovy and Grails technologies. With the
acquisition of G2One, SpringSource will now
offer global enterprise support offerings for
developers and IT operations that utilize Groovy
and Grails applications. The combined forces of
Spring and G2One not only accelerate
innovation, but also deliver SpringSource’s 24x7
global support network to the growing number of
enterprises adopting Groovy and Grails at the
heart of their applications. The Spring
Framework, Groovy and Grails are three of the
most popular application infrastructure solutions
in the world. Groovy is one of the most popular
alternative languages for the Java Virtual
Machine (JVM), with more than 30,000
downloads per month. Adoption of Grails has
soared, with downloads racing from 7,000 to
70,000 per month in the past year.
Buyer
Intel
Aptana
Micro Focus
International
Quark
Aeroflex
Xandros
MSC.Software
Cadence Design
Systems
XyEnterprise
Coverty
Embarcadero
Technologies
Target
OpenedHand
Pydev
Liant Software
Corporation
In.vision Research
Corporation
Gaisler Research AB
Linspire
MacNeal Group
Mentor Graphics
Announcement Date
September 2, 2008
August 26, 2008
July 22, 2008
Deal Value
Undisclosed
Undisclosed
$5 Million
July 17, 2008
Undisclosed
July 15, 2008
July 2, 2008
June 24, 2008
June 16, 2008
Undisclosed
Undisclosed
Undisclosed
$1.6 Billion
XSystems
Codefast
CodeGear
June 16, 2008
May 23, 2008
May 7, 2008
Undisclosed
Undisclosed
$23 Million
131
Black Duck Software
Enea
Progress Software
Averna
KKS Venture
Management
Sun Microsystems
Wavecom S.A.
MobileDataforce
SpringSource
Sun Microsystems
Exist Global
Koders
IP Devel SRL
Xcalia
Mindready Solutions
Codima Technologies
Ltd.
innotek
Anyware Technologies
Treetop Technologies
Covalent Technologies
MySQL AB
DevZuz
April 28, 2008
April 21, 2008
March 18, 2008
February 27, 2008
February 12, 2008
Undisclosed
$5 Million
Undisclosed
Undisclosed
Undisclosed
February 12, 2008
February 1, 2008
January 30, 2008
January 29, 2008
January 17, 2008
January 7, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$1 Billion
Undisclosed
132
Legacy / Software Oriented Architecture Transactions
Micro Focus to acquire Relativity
Technologies
Micro Focus, a UK-based global provider of
enterprise application modernization solutions, is
acquiring Relativity Technologies, a company in
the same domain. The Board of Micro Focus
believes that combining the businesses of Micro
Focus and Relativity will further strengthen Micro
Focus's position as a leading player in the fast
growing but highly fragmented Application
Modernization market. In addition, Relativity's
business operations will further expand Micro
Focus's geographic reach, partner relationships
and international customer base.
Buyer
Oracle Corp.
IBM
Taylor Corporation
Progress Software
Progress Software
Green Hat
Versata Enterprises
SOA Software
Micro Focus
Versata Enterprises
Liaison Technologies
Red Hat
Workday
IBM
Oracle Corp.
Target
ClearApp
ILOG
Interprise Software
Systems International
Mindreef
IONA Technologies
Solstice Software
Evolutionary
Technologies
International
LogicLibrary
NetManage
TenFold Corporation
Contivo
Amentra
Cape Clear Software
AptSoft Corp.
BEA Systems
Announcement Date
September 2, 2008
July 29, 2008
July 15, 2008
Deal Value
Undisclosed
$335 Million
Undisclosed
June 27, 2008
June 25, 2008
May 29, 2008
May 20, 2008
Undisclosed
$162 Million
Undisclosed
Undisclosed
May 13, 2008
April 30, 2008
March 24, 2008
March 19, 2008
March 13, 2008
February 6, 2008
January 24, 2008
January 17, 2008
Undisclosed
$73.3 Million
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$8.5 Billion
133
Network Management Transactions
Trapeze Networks acquires Newbury
Networks
Trapeze Networks, a provider of wireless
network equipment and management systems,
has acquired Newbury Networks, a provider of
WLAN location systems. The acquisition will
enable Trapeze to deliver a broader set of
WLAN products to growing market segments
worldwide and to integrate best-of-breed
location capabilities into its products. Trapeze
has been an OEM partner of Newbury since
2006. Newbury, backed by Idealab of Pasadena,
CA, enables enterprises to locate, manage and
secure mobile assets over WLANs. A wide
range of vertical markets worldwide are currently
deploying Newbury's location platform and
applications. Trapeze and Newbury share a
common vision, strategy and commitment to
enable enterprise customers to fundamentally
enhance business processes through locationbased services for wireless-LANs.
Fujitsu buys Siemens’ stake in FSC
Raritan acquires dcTrack Software
Raritan, provider of intelligent power
management and secure IT infrastructure
management solutions, has acquired the
dcTrack data center infrastructure management
software from Nassoura Technology Associates,
LLC (NTA), a privately held company that
provides data center visualization, automation
and management software and services. Raritan
will integrate dcTrack and its related
technologies into Raritan's power management
portfolio. Raritan's solutions help IT and facility
organizations reduce energy costs and manage
data centers more efficiently by providing useful
information and insight on many key dimensions
of a data center -- including granular information
for identifying energy-inefficient servers,
wasteful over cooling, circuit breakers at the
point of tripping and available rack capacity to
add servers. The acquisition of dcTrack will
further strengthen Raritan's data center power
management capabilities to address customers'
energy and operations issues.
Technology giant Fujitsu is to buy the 50 per
cent stake held by Siemens in the Fujitsu
Siemens Computers (FSC) joint venture. Fujitsu
Siemens Computers was established on
October 1, 1999 as a 50-50 joint venture based
in Maarssen, The Netherlands. In just a decade,
the company has established a leading position
in the EMEA market for IT infrastructure, earning
a reputation for quality and innovation in the
server, PC, and data storage fields. FSC
supplies PCs, servers and other IT hardware in
Europe. The move was prompted by a need to
reduce expenses at both firms since operating
profit at the jointly-owned company represented
only 1.6 per cent of total revenue in the past
financial year. Another driver behind the sale is
Siemens' intention to use the spare cash to
concentrate on projects aimed at the energy,
industry and healthcare sectors.
Deal Value: €450 Million ($575 Million)
CenterBeam acquires Network Insight
CenterBeam, Inc. has acquired Network Insight,
a network management and consulting services
firm. Network Insight focuses exclusively on IP
network systems integration and managed
services to organizations from several hundred
users up to Tier I service providers. The
acquisition strengthens CenterBeam's position
as the leading managed services provider
(MSP) to the mid-size market by bringing deeper
network design, architecture and management
expertise. Additionally, the location in San Diego
provides CenterBeam with another network
operations center for further redundancy.
134
Digital & Analog Design acquires Spliced
Networks and Fasterping
In an effort to better serve customers, Digital &
Analog Design has purchased Spliced Networks
and Fasterping, via two separate cash deals.
Spliced Networks is an open source software
company that develops next-generation Linux
appliance and data center solutions. In the deal
to purchase Spliced Networks, DAD acquired
key equipment, personnel and intellectual
property assets used to develop, deploy and
maintain a wide array of hosted, managed and
network services on a national basis. Spliced
Networks’ status as an internationally
recognized leader in open source development
and network security solutions was very
appealing to DAD. In a separate acquisition,
DAD purchased Fasterping, a managed services
provider for the small business market in
Cincinnati. In the deal, DAD acquired key
equipment, personnel and web services revenue
streams.
Numerex acquires Ublip
Numerex Corp., a provider of full-service, highly
secure machine-to-machine (M2M) network
services and solutions, announced that it has
acquired Ublip Inc., a fast growing privately held
machine-to-machine (M2M) software and
services company. The Ublip infrastructure and
software enable the rapid creation of web-based
M2M applications and, when coupled with
existing Numerex network technology and
infrastructure, provide a resilient and reliable
hosting environment for M2M solutions.
Numerex’s mission to provide a full range of
comprehensive M2M services to the industry is
significantly advanced with the acquisition of
Ublip. It gains from an infusion of technology
that includes middleware designed to simplify
application development and deployment, and
'virtual' hosting architecture. In addition, it picks
up have a small group of highly skilled M2M
industry experts.
TEOCO acquires Vero Systems
Capita Group buys ABS Network Solutions
Capita Group PLC acquired ABS Network
Solutions Ltd, a provider of IP infrastructure
platform solutions and maintenance services of
Cisco networking products. ABS Network is a
provider of IP-based business networking
solutions, including network management,
unified communications, on-site support and
remote assistance. Capita Group PLC provides
management support services and business
process outsourcing solutions to organizations
across the public and private sectors such as
administration, information technology, financial,
human resources and customer service. The
acquisition of ABS Networks will enhance and
broaden Capita's position in the network
services market. In addition ABSNet will bring
Cisco accreditations and capability in emerging
technologies, while the strong relationship that
they have with Cisco will enable cost savings in
spend on equipment across the Capita Group
TEOCO, provider of cost management and
revenue assurance solutions to communications
service providers worldwide, acquired Vero
Systems, a global provider of margin
management products and least cost routing
solutions. Vero Systems is a strategic addition to
TEOCO’s cost management business. This
acquisition will broaden TEOCO’s network cost
management offerings to support routing
optimization and will accelerate TEOCO’s
international strategy. Vero’s Acuité solution
enables least cost routing which allows service
providers to intelligently and actively control their
network costs. Their deep, switch-level expertise
is highly sought after by carriers worldwide. This
routing optimization expertise, combined with
TEOCO’s cost management solutions, will bring
service providers high levels of technical
innovation in network cost management.
Deal Value: $23.2 (Cash)
135
Buyer
GENBAND
Expand Networks
Managed Data Holdings
Brocade
Insight Enterprises
Netezza Corporation
KKS Venture
Management
IBM
Infineon Technologies
Enea
Blue Coat
EDS
Elliott Associates
EMC Corp
Target
Nextpoint Networks
NetPriva
Stargate
Foundry Networks
MINX Ltd
NuTech Solutions
Codima Technologies
Ltd
InfoDyne Corporation
Primarion
Netbricks SAS
Packateer
Nexagent
Packeteer
Pi Corp
Announcement Date
September 16, 2008
September 3, 2008
August 27, 2008
July 21, 2008
July 10, 2008
May 15, 2008
May 1, 2008
Deal Value
Undisclosed
Undisclosed
Undisclosed
$3 Billion
$6.1 Million
Undisclosed
Undisclosed
April 30, 2008
April 28, 2008
April 22, 2008
April 21, 2008
March 19, 2008
March 5, 2008
February 22, 2008
Undisclosed
Undisclosed
Undisclosed
$268 Million
Undisclosed
$200 Million
Undisclosed
136
Other Infrastructure Transactions
NAVTEQ to acquire T-Systems Traffic GmbH
NAVTEQ, a global provider of digital map data
for location-based solutions and vehicle
navigation, has agreed to acquire T-Systems
Traffic GmbH (T-Traffic), a leading provider of
traffic services in Germany. The acquisition
marks another important step in NAVTEQ's
dedicated effort to expand its content-rich, highquality traffic information into Europe. T-Traffic is
a provider of traffic services in Germany, with
approximately 55 employees, central to
European navigation because of its large user
base and home to many leading automotive
companies. T-Traffic's traffic services include
data from private traffic sources. T-Traffic has
been a provider of traffic information in Germany
including major PND and automotive customers.
T-Traffic holds technologies related to all
primary forms of traffic flow data collection,
including community and probe sourced traffic
data, cellular network data, and fixed sensor
networks. These technologies complement
NAVTEQ's existing capabilities that have been
successfully deployed in North America.
NAVTEQ intends to incorporate T-Traffic
extraction and processing capabilities into the
development of best-in-class traffic worldwide.
Novafora to acquire Transmeta
Novafora, Inc., a developer of video processors,
is acquiring Transmeta Corporation. Transmeta
has been recognized for its innovative
computing, microprocessor and semiconductor
technologies and, in particular, its line of x86compatible software-based microprocessors. In
recent years the company’s business model has
increasingly focused on licensing its
technologies and related intellectual property.
Transmeta’s innovative technology and the
expertise of its employees are valuable additions
to Novafora. Adding Transmeta’s power
management technology to Novafora’s video
processor will advance its vision of making its
products applicable across the broadest range
of video-oriented devices.
Deal Value: $255.6 Million (Cash on $26.45
million ttm)
Oracle to acquire RuleBurst Holdings
Oracle has agreed to acquire RuleBurst
Holdings Limited, the parent company of Haley
Limited, a leading provider of policy modeling
and automation software, to create an end-toend solution for social services agencies. Social
services agencies are moving to commercial
software to automate entitlements. With limited
resources to serve a growing constituency,
these agencies need to administer and distribute
entitlements consistently and accurately as
defined by the underlying legislation. The Haley
policy automation platform is also used in other
industries that are highly regulated, such as
financial services and insurance, to implement
and manage complicated and rapidly changing
policies in common language without the need
for specialized software programming. Haley's
policy automation platform translates legislation
and policies into defined, automated rules that
are deployed in an application. Together with
Oracle's ERP and Siebel CRM applications,
Oracle expects to create the first packaged
software solution for social services agencies
with an enhanced case management application
utilizing Haley to drive eligibility determinations.
PDS acquires Vision Controls Corporation
Paragon Development Systems, Inc. (PDS) has
acquired Vision Controls Corporation. Vision
Controls is a designer and developer of video
management systems that utilize IP
infrastructure for security solutions. The Vision
Controls HVR & IVR product lines are known for
high quality video capture, compression, storage
and event retrieval capabilities. As a technology
services company, PDS architects, supplies,
implements and manages IT for organizations in
four primary markets: healthcare,
government/higher education, corporate, and
professional services. The Vision Controls
acquisition allows PDS to build on its expertise
137
in the fast growing IP video security market
place.
Avnet to acquire Abacus Group
Maxim Integrated Products acquires
Mobilygen
Maxim Integrated Products, Inc. is acquiring
Mobilygen, a privately held, fabless
semiconductor company with leading technology
in H.264 video compression. The security
industry has adopted H.264 as the nextgeneration video compression standard for
streaming, recording, and archived file storage.
Mobilygen, with approximately 50 highly trained
engineers and technical experts, is a pioneer in
the design of market leading H.264 compression
SOCs (Systems On-a-Chip) for the security
market and is a recognized leader in resultant
video quality, power consumption, and cost-perchannel. Maxim's acquisition of Mobilygen
brings leading H.264 video compression
technology, positioning Maxim to become a key
supplier to the $2 billion video security
semiconductor market.
Intel acquires NetEffect
Avnet, Inc. plans to acquire Abacus Group PLC,
through one of its wholly owned subsidiaries.
Abacus has a portfolio of 180 supplier franchises
covering semiconductor, interconnect, passive
and electromechanical (IP&E) devices. In
addition to electronic components distribution,
Abacus Embedded Systems Group provides
specialty distribution of displays, software,
embedded computer and wireless
communication products while its Alpha 3
segment offers electromechanical value-added
sub-assembly services. By focusing on a
strategy to provide highly personalized local
service and strong technical support, Abacus
has developed a large and diverse base of small
to mid-size customers. With a team of field
application engineers and product specialists
deployed in 40 sales offices, Abacus provides
design-in support to customers at every stage of
product development. This acquisition of Abacus
represents an excellent complement to Avenet’s
Electronics Marketing group in EMEA. With a
respected management team, talented
associates and a substantial number of new
customers, Abacus provides Avnet with exciting
growth opportunities in the region.
Deal Value: $181.8 Million (Cash, stock, and
debt)
Intel Corporation acquired the assets of
NetEffect Inc., a network connectivity solutions
company specializing in Ethernet products and
technologies for server compute clusters.
NetEffect’s assets include the company’s
Ethernet product portfolio, intellectual property
and technology. NetEffect was a provider of
solutions incorporating iWARP, an Ethernet
alternative to InfiniBand. NetEffect’s product
portfolio includes 1 Gigabit and 10 Gigabit
Ethernet (GbE) adapters for servers and blade
configurations as well as 10 GbE Application
Specific Integrated Circuits (ASICs). NetEffect’s
role as a data communications solution provider
and the company’s technology will enhance
Intel’s current Ethernet efforts. The combination
of Intel and NetEffect technology will allow Intel
to address its customers’ most important 10
Gigabit Ethernet needs, including server
virtualization, convergence of network and
storage traffic, and server compute clusters.
Sogeti, one of the world's foremost providers of
Local IT, Professional and Test services,
announced the acquisition of the UK test
consultancy Vizuri Limited. Vizuri is one of the
UK's leading specialist software Quality
Assurance, Test, and Security Consultancy
service providers. This acquisition, in
conjunction with the acquisition of Insight Test
Services in April 2008 and other recruitment
plans, will result in Sogeti UK growing to 250
staff by the end of 2009, establishing its position
as a major player in the UK Testing Services
Market. Globally, Sogeti is the market leader in
Software QA & Test services with in excess of
2,500 testing specialists (2,000 in Europe and
USA and 500 people in India), which represents
a strong offshore investment.
Sogeti acquires Vizuri Limited
138
Kontron AG to acquire Communication
Rackmount Server operation from Intel
Kontron, a leading global provider of embedded
computing and open modular solutions, has
reached an agreement with Intel Corporation to
acquire its Communication Rackmount Server
operation of 1U, 2U carrier-grade rackmount and
IP network security server products. The
benefits for customers are tremendous,
according to Kontron. Customers will continue to
receive the latest technology in computing
platforms while being able to choose from a
single source. Both the existing Intel products
and any future Intel Architecture multi-core
server designs will firmly establish Kontron as a
leading provider of multi-core carrier-grade
server platforms. Kontron’s management
expects 2009 revenue from this new acquisition
to be more than $40 million.
Moog acquires Berkeley Process Control
Moog Inc., manufacturer and integrator of
precision control components and systems, is
acquiring Berkeley Process Control, Inc. The
company said the acquisition takes Moog into
new markets for high-performance motion
control systems. Moog said Berkeley's motion
control software and hardware automates the
precise handling of semiconductor wafers and
enhances the speed, quality and safety of
welding in the oil & gas market and in nuclear
fuel canisters. It provides innovative motion
control solutions used for welding,
semiconductor production and medical
equipment.
ASG Group acquires A-DB Group
IT services firm ASG Group has acquired Oracle
database firm A-DB Group (Australia), claiming
it gives the company an in-road to lucrative
defense contracts. The company specializes in
Oracle and Microsoft database administration,
Oracle application development and defense
system support. A-DB has a blend of
government and blue-chip corporate clients, with
presence in education, health, defense and
financial services. The acquisition tightens
ASG's ties with Oracle, with development and
administration skills in its software a core
capability of A-DB. The buy adds 55 staff to
ASG's ranks and has given it an office in South
Australia it previously lacked.
Buyer
Lacrois Electronique
SAS
Freescale
Semiconductor
XtremeEDA Corporation
PDF Solutions
ABRY Partners
Cypress Semiconductor
Gennum Corporation
IntervalZero
Cisco
Phoenix Technologies
Target
Tharsys
Announcement Date
September 22, 2008
Deal Value
Undisclosed
Intoto
September 16, 2008
Undisclosed
ESLX
Triant Holdings’ Fault
Detection and
Classification Business
Q9 Networks
Simtek
ASIC Architect
Citrix’s Ardence
Embedded Software
Business
Pure Networks
General Software
September 9, 2008
August 28, 2008
$1.75 Million
August 25, 2008
August 4, 2008
July 28, 2008
July 28, 2008
C$361 Million
$46 Million
$1.5 Million
Undisclosed
July 24, 2008
July 24, 2008
$120 Million
Undisclosed
139
Ceradyne
Cortina Systems
Zoran Corporation
Apple Computer
OpSource
Fair Isaac
Hewlett Packard
SemEquip
Storm Semiconductor
Let It Wave
P.A. Semi
LeCayla Technologies
Dash Optimization
Exstream Software LLC
July 9, 2008
June 16, 2008
June 4, 2008
April 23, 2008
February 11, 2008
January 22, 2008
January 22, 2008
$25 Million
Undisclosed
$27.6 Million
$278 Million
Undisclosed
Undisclosed
Undisclosed
140
Security Transactions
Check Point to acquire Nokia’s Security
Appliance Business
Check Point Software Technologies Ltd. is
acquiring Nokia’s security appliance business.
The two businesses have collaborated over the
past decade to deliver industry-leading
enterprise security solutions. Building on this
collaboration, Check Point will provide an
extended security appliance portfolio developed,
manufactured and supported by Check Point.
Check Point and Nokia have long provided
customers with a range of best-of-breed security
solutions, proven in high-performance, missioncritical environments. Nokia’s security appliance
business provides purpose-built security
platforms optimized for Check Point firewall,
virtual private network (VPN) and unified threat
management (UTM) software. About 85 percent
of Fortune 500 companies have bought Nokia’s
security platforms. More than 220,000 Nokia
appliances have been installed with over 23,000
customers worldwide.
j2 Global acquires MailWise and Mijanda
j2 Global Communications, Inc., provider of
outsourced, value-added messaging and
communication services, has acquired
substantially all of the assets of MailWise LLC, a
Boston-based provider of hosted email security
services, and the fax and voice messaging
assets of Mijanda, Inc., a Michigan-based
provider of digital fax and voice messaging
solutions.
Barracuda Networks acquires 3SP
Barracuda Networks Inc., provider of email and
Web security appliances, launched the
Barracuda SSL VPN following the acquisition of
3SP, maker of the popular SSL Explorer
solution. 3SP, a company based in Nottingham,
UK, developed the free and open source SSL
Explorer technology, which has had over
275,000 downloads of the main product
distribution since it was released in August
2004. In addition, the award-winning SSL
Explorer Enterprise commercial solution has
hundreds of customers worldwide. The new
Barracuda SSL VPN will combine 3SP’s proven
technology with Barracuda Networks’ expertise
in delivering trusted security solutions that are
affordable for organizations of all sizes and
business types. The 3SP technology is a strong
complement to Barracuda’s existing network
security product portfolio, so this acquisition was
a natural fit. Barracuda Networks believes its
expansive channel reach and strong worldwide
reputation, especially in the SMB market, will
enable it to quickly emerge as a leading SSL
VPN provider.
Marshal acquires 8e6 Technologies
Marshal8e6 has been formed via the merger of
UK-based Marshal, a provider of email and eb
content security solutions, and 8e6
Technologies, provider of web filtering
appliances. The driving force behind the new
company is that the threat environment has
evolved and is much smarter than it used to be:
reputable websites now have malware buried
deep inside; seemingly innocent emails direct
users to corrupted content; and instant
messages contain infected attachments. The
combination enables the company to secure all
forms of Internet-based communication streams
including internal corporate emails, Internetbased email services, websites and Instant
Messaging. The combined company serves
more than 20,000 customers managing more
than 16 million end users in 96 countries, and
had combined billings of more than $50 million
in the past twelve months. Marshal8e6 will begin
operations with more than 250 employees and
major R&D and sales operations in Orange,
California, Basingstoke, England, Auckland,
New Zealand and Taipei, Taiwan.
141
CA to acquire Eurekify
CA, Inc. is acquiring Eurekify, a pioneer in
identity and role management. The acquisition
extends CA’s leadership in identity and access
management, bringing the next generation of
role-based identity and compliance management
under the CA security software portfolio. By
bringing together two leaders in identity
management, CA’s acquisition of Eurekify is
transforming the market dynamics in that highly
fragmented sector. The CA-Eurekify solution
addresses the growing demand for a new
generation of identity and access management
(IAM) solutions that are business-centric. With
this acquisition CA can deliver deeper product
integration, and continued development and
extension of products, particularly those that
facilitate role-based, business-driven identity
management and access control. Eurekify is
CA’s second acquisition in the security space in
two months, coming on the heels of its purchase
of IDFocus in October.
Symantec to buy MessageLabs
Symantec Corp. is acquring online messaging
and web security services provider
MessageLabs. Symantec said the acquisition
strengthens its position in the growing Software
as a Service and messaging security markets.
Symantec has already invested heavily in a
number of areas where MessageLab plays.
Notably, it purchased anti-spam firm Brightmail
for $370 million in 2004 and IMLogic for what we
estimate was $90 million in 2006. MessageLabs,
however, was one of the earliest players in the
security Software as a Service space, and has
one of the most mature platforms for
provisioning, delivering and managing
messaging and web-related security services, as
well as Skeptic, a threat intelligence service. By
comparison, Symantec's Protection Network
(SPN) is in its infancy. The addition of
MessageLabs platform gives Symantec both a
mature, revenue generating SaaS portfolio that
includes e-mail, IM and web threat detection. It
also gives the company the development
expertise to move ahead with its more
comprehensive security SaaS vision,
encompassing anti-data leakage, compliance
and data archiving.
Seller Revenue: $145 million (2008 est)
CA acquires IDFocus LLC
CA, Inc. has acquired IDFocus LLC and its
identity management technology, ACE. Identity
management is essential to comprehensive IT
security and the integration of CA Identity
Manager and ACE technology enables CA to
deliver a robust and powerful identity
management solution. The acquisition
strengthens CA's ability to continually enhance
critical elements of CA's Identity and Access
Management suite, which helps customers
effectively manage employees' and partners'
identity lifecycles and meet new compliance
demands. IDFocus provides several key identity
management capabilities with its technology.
IDFocus software includes an improved ability to
help customers meet compliance demands by
proactively preventing segregation of duties
(SoD) violations. As CA Identity Manager
provisions users, it runs a check on the SoD
policies set up in the IDFocus software. If a
policy violation is identified, CA Identity Manager
is designed to prevent the provisioning event
from taking place, proactively managing
compliance needs and preventing violations
before they happen.
Panda Security buys German Franchise
Panda Security, a developer of IT security
software, antivirus and other related software,
said that it has acquired its franchise in
Germany. Financial terms of the buy were not
disclosed. According to Panda, the move is part
of a plan to reach into strategic markets and
consolidate its position in Europe. The German
franchise includes offices in Dusseldorf, Munich,
and Hamburg. Panda also has subsidiaries in
Spain, France, Germany, Japan, Holland,
Belgium, and the United States, and franchisees
covering 50 countries.
142
Buyer
NETGEAR
McAfee
Trusted Computer
Solutions
Secure Computing
Corporation
4C Controls
ANXeBusiness Corp.
Trustwave
MessageLabs
WidePoint Corporation
McAfee
Audax
Aladdin Knowledge
Systems
Sophos Plc
Motorola
Raytheon Company
NitroSecurity
Thales UK Ltd
Fortinet
phion
SyberPatrol LLC
Perimeter eSecurity
SafeNet
OpSec Security
Carlyle Group
Hitachi Ltd
L-1 Identity Solutions
Microsoft
IBM
Ping Idenity
SafeNet
Trend Micro
Trustwave
Allot Communications
Target
CP Secure
Secure Computing
Corporation
CounterStorm
Announcement Date
September 22, 2008
September 22, 2008
Deal Value
$17.5 Million
$465 Million
September 8, 2008
Undisclosed
Securify
September 4, 2008
$15 Million
Zahra Technology LLC
Positive Networks’ VPN
Division
ControlPath
Fortium ICA
Protexx
Reconnex
PowerTech
Secure Computing’s
SafeWord Product Line
Safeware AG
AirDefense
Telemus Solutions
Ripple Tech
nCipher PLC
IPLocks’ Assets
Visonys AG
Emerald Technology
Edgeos
Beep Science AS
P4M GmbH
Authentix
M-Tech Information
Technology
Digimarc Corporation’s
ID Systems Business
Komoku
Encentuate
Sxip
Ingrian Networks
Identum
Creduware
Esphion Limited
September 4, 2008
September 2, 2008
Undisclosed
Undisclosed
August 27, 2008
August 26, 2008
August 4, 2008
July 31, 2008
July 30, 2008
July 30, 2008
Undisclosed
$20.8 Million
Undisclosed
$46 Million
Undisclosed
$65 Million
July 28, 2008
July 28, 2008
July 28, 2008
July 15, 2008
July 11, 2008
June 19, 2008
June 17, 2008
June 12, 2008
June 11, 2008
May 29, 2008
May 15, 2008
April 22, 2008
April 7, 2008
$338 Million
Undisclosed
Undisclosed
Undisclosed
$100 Million
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
March 24, 2008
$250 Million
March 21, 2008
March 13, 2008
March 11, 2008
February 28, 2008
February 25, 2008
January 10, 2008
January 3, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$3.5 Million
143
Storage Transactions
Kardex AG acquires Kardex Systems Inc
Barracuda Networks acquires BitLeap
Kardex AG, one of the world's leading providers
of automated storage, retrieval and materials
handling solutions, has signed an asset
purchase agreement to acquire the assets of
U.S. competitor Kardex Systems Inc., which had
previously filed for Chapter 11 bankruptcy with a
U.S. court. Kardex Systems Inc. posted sales of
approximately $21 million in the 2007 financial
year, and has a staff headcount of around 100.
Under the transaction, Kardex AG is acquiring
the Kardex brand in the USA, a production site
in Lewistown, Pennsylvania, and a sales
organization with a broad base in the North
American market. This will enable Kardex to
substantially expand its U.S. distribution
company, Remstar Inc. In addition, the merger
of the two U.S. companies opens up sustainable
synergy potential for Kardex and reinforces
Kardex's market position in the USA.
Barracuda Networks Inc., provider of email and
web security appliances, has acquired BitLeap,
a provider of local and offsite data backup and
disaster recovery solutions. As part of the
acquisition Barracuda Networks will now offer
Barracuda Backup, a complete and affordable
data backup and disaster recovery solution, to
customers of all sizes and business types.
BitLeap developed a compelling technology and
services platform for delivering a unique backup
solution to the market. Barracuda Networks
believes that the combination of the trusted
Barracuda Networks brand, customer-centric
business approach, as well as its extensive
worldwide channel reach will enable it to offer an
affordable backup solution to its current
customers and to mainstream businesses of all
sizes.
Mirapoint acquires Intradyn
Mirapoint, provider of secure-messaging
products, has acquired Intradyn, provider of
software that it incorporates into all-in-one data
protection and preservation appliances —
providing enterprise-class functionality at prices
affordable to businesses of all sizes. This
strategic acquisition allows Mirapoint to expand
its product line, which will now include a suite of
active email archiving appliances, as well as
award-winning mailbox management, messagestore optimization, archiving, and eDiscovery
products. The combined company now serves
more than 2,200 customers, including the
distribution/OEM of more than 800 companies
that trust Intradyn’s archiving solutions, making it
one of the largest archiving companies in the
marketplace. Mirapoint also gains over 500 new
direct customers through this acquisition, giving
Mirapoint additional up-sell opportunities for its
product line.
RackSpace acquires Jungle Disk and
Slicehost
Web hosting provider RackSpace is acquiring
two firms, Jungle Disk and Slicehost. According
to RackSpace, it is acquiring Slicehost for its
virtual server hosting services, and Jungle Disk
for its cloud storage products. Rackspace
announced the win as part of a new cloud
hosting strategy. Rackspace says that it intends
to integrate the capabilities of the two firms into
its complete hosting portfolio.
144
Buyer
Media Recovery
Dot Hill Systems Corp.
Adaptec
Microsoft
Proofpoint
Symantec
Density Dynamics
PHNS
IBM
IBM
EMC Corporation
NetApp
TeraCloud Corp.
Fabrik
eMag Solutions, LLC
Rocket Software
IBM
NetApp
Target
ISSI Data
Ciprico’s Assets
Aristos Logic
DATAllegro
Fortiva
SwapDrive
TiGi Corporation’s
Technology
AmeriVault Corporation
Diligent Technologies
FilesX
Iomega Corporation
Onaro
Estorian
G-Technology
Innovative Technology
Concepts
Arkivio
XIV
Onaro
Announcement Date
September 24, 2008
September 23, 2008
August 27, 2008
July 24, 2008
June 24, 2008
June 13, 2008
June 3, 2008
Deal Value
Undisclosed
$2.25 Million
$41 Million
Undisclosed
Undisclosed
$123 Million
Undisclosed
May 14, 2008
April 18, 2008
April 10, 2008
April 8, 2008
February 14, 2008
Feburary 13, 2008
January 15, 2008
January 11, 2008
Undisclosed
Undisclosed
Undisclosed
$213 Million
Undisclosed
Undisclosed
Undisclosed
Undisclosed
January 8, 2008
January 3, 2008
January 3, 2008
Undisclosed
Undisclosed
Undisclosed
145
Systems Management Transactions
BDNA to acquire PS’Soft
BDNA Corp., a provider of IT infrastructure
inventory and analysis products, acquired
PS'Soft, European provider of IT asset and
service management solutions. The merger will
give BDNA the opportunity to offer its IT
inventory and analysis solutions to PS’Soft’s
significant client base, especially in Europe.
BDNA serves its enterprise and public sector
customers across North America and Europe
through its direct sales force and network of
partners. PS’Soft serves its European clients
through offices in France.
Axeda acquires Questra
Axeda, the on-demand remote service software
company, acquired the technology and related
assets of Questra Corporation. Today, more
than 100 of the world's leading product
manufacturers, including EMC, GE Healthcare,
NetApp, Philips and Siemens, rely on Axeda and
Questra to power their remote service initiatives.
This critical mass of customers is indicative of
the trend away from costly break / fix service
toward delivering products with smart services
built-in. Questra innovations such as a flexible
SOA, and highly extensible Service Agent
combined with Axeda innovations including OnDemand delivery, industry leading security, and
deep-featured applications will accelerate Axeda
customers' ability to provide the next generation
of service to their customers.
Architel acquires Atlas Technology Group
Dallas-based Architel said that it bought AtlasTG
assets including ATG US, Tribeworks Inc., Atlas
Group Holdings Limited, BLive Networks and
Atlas Technology Group NZ. The new company
formed from AtlasTG assets will operate as a
wholly owned subsidiary of Architel. AtlasTG,
headquartered in Seattle, provides outsourced
application software support services and
software for clients worldwide. The company
specializes in remotely supporting custom-built
applications and networks using proprietary
process, monitoring, and management systems.
ILS Technology acquires ComBrio
ILS Technology, LLC, an industry player in
enabling intelligence through connectivity, has
acquired substantially all the operating assets of
ComBrio, Inc., a provider of Remote Product
Services (RPS) software for mission-critical
remote data center management. ComBrio’s
virtual IP infrastructure is used to monitor and
manage devices for RPS providers and their
enterprise customers. The acquisition enables
ILS Technology to expand its footprint in the
Managed Service Provider market by
capitalizing on ComBrio’s Virtual Service
Infrastructure (VSI) that provides simple, secure
monitoring and access to a wide variety of
information technology devices and systems.
Integrated into ILS Technology’s portfolio, VSI
will significantly strengthen the company’s ability
to provide seamless communication between
intelligent devices in the plant and enterprise
applications.
Acresso Software acquires Tracker product
technology from LinkRight Software
Acresso Software, a privately held company of
Thoma Bravo (announced last week to be
acquired by Intraware), has acquired the Tracker
product technology from LinkRight Software,
building on the forecasting and analysis
capabilities within Acresso's Flexnet Manager
Suite to deliver a more comprehensive software
usage profile for enterprise IT. This addition also
extends the range of complex technologies that
Flexnet Manager Suite can address, including
CATIA, the company said. With the current
economic slowdown, 'do more with less' is a
louder mantra for IT organizations than ever
before.
146
Novell to acquire Managed Objects
Novell is acquiring business service
management leader Managed Objects. The
acquisition will extend Novell's portfolio of data
center solutions by adding tools to provide a
unified view of all information and workloads. As
a result, both IT and business managers will
have improved visibility into how their
information systems deliver business services
across physical and virtual environments, so
managers can make better decisions to ensure
availability and quality of service while improving
agility and lowering the total cost of data center
management. The acquisition of Managed
Objects by Novell illustrates Novell's
commitment to an expanded management
strategy and makes them a strong competitor in
the service management market. Managed
Objects is a recognized player in BSM and has a
proven track record with some of the largest
companies in the world. The Managed Objects’
products complement and extend Novell's
existing workload management and virtualization
solutions by adding flexible service modeling,
leading Configuration Management Data Base
(CMDB) technology, advanced analytics and
unique Web 2.0-based visualization technology.
Buyer
Versata Enterprises
Quest Software
visionapp AG
Microsoft
IBM
SemanticSpace
Technologies
Avocent Corporation
MBB Industries
BMC Software
Acuity Brands
NetSuite
The Planet
Marine Information
Systems
FrontRange Solutions
Nimsoft
BMC Software
Novell
CMGI
Thoma Cressey Bravo
IBM
Target
Ecora Software Corp.
NetPro Computing
iQurious
Zoomix
Platform Solutions
Arsin Corporation and
Prolifics
Touchpaper Group Ltd
TouchStone Software
DTS Systeme GmbH
ITM Software
Guardian Networks
OpenAir
Touch Support
Cornerstone Systems
Announcement Date
September 11, 2008
September 11, 2008
July 22, 2008
July 14, 2008
July 2, 2008
July 2, 2008
Deal Value
Undisclosed
$78.7 Million
Undisclosed
Undisclosed
Undisclosed
Undisclosed
July 1, 2008
July 1, 2008
June 26, 2008
June 17, 2008
June 4, 2008
June 2, 2008
May 20, 2008
May 14, 2008
$45 Million
$17 Million
Undisclosed
Undisclosed
Undisclosed
$26 Million
Undisclosed
Undisclosed
Centennial Software
BeInSync
Indicative Software
BladeLogic
PlateSpin Ltd
Open Channel Solutions
Macrovision (Software
Business)
Net Integration
Technologies
April 28, 2008
April 28, 2008
April 7, 2008
March 17, 2008
February 25, 2008
February 20, 2008
February 14, 2008
Undisclosed
Undisclosed
Undisclosed
$71.35 Million
$205 Million
$24.5 Million
$200 Million
January 22, 2008
Undisclosed
147
Virtualization Transactions
IBM to acquire Transitive
Intel selling half its stake in VMware
IBM has agreed to acquire Transitive Corp., a
developer of cross-platform virtualization
solutions. Transitive has raised over $37 million
in VC funding since 2000, from firms like
Crescendo Venture Management and Meritech
Capital Partners. Transitive is a provider of
cross-platform virtualization and a pioneer in
developing technologies that allow applications
written for one type of microprocessor and
operating system to run on multiple platforms —
with little or no modification. As a result, the
technology will enable customers to consolidate
their Linux-based applications onto the IBM
systems that make the most sense for their
business needs. Transitive’s breakthrough
technology has earned the company 48
worldwide patents and numerous industry
awards. This acquisition is part of IBM’s strategy
to help clients optimize the efficiency and
productivity of their computing infrastructure and
improve the utilization of the servers that run
them.
Intel said that it is selling half of its 9.5 million
shares of VMware, a developer of datacenter
virtualization software. Intel disclosed in a filing
with the Securities and Exchange Commission
(SEC) that it sold 1 million shares recently and
plans to sell an additional 3.75 million on the
open market. Intel, which acquired the shares in
July 2007, did not offer a specific reason for the
sale.
VMware acquires Trango Virtual Processors
Hidden in a press release is the unannounced
acquisition by VMware Inc., provider of
virtualization solutions from the desktop to the
datacenter, of Trango Virtual Processors,
French provider of embedded processor
virtualization IP. With 2007 revenues of $1.3
billion, more than 120,000 customers and more
than 20,000 partners, VMware is one of the
fastest growing public software companies.
VMware announced it has brought virtualization
to mobile phones via its new VMware Mobile
Virtualization Platform (MVP), which is built on a
technology it acquired from Trango Virtual
Processors in October 2008.
RackSpace acquires Jungle Disk and
Slicehost
Web hosting provider RackSpace is acquiring
two firms, Jungle Disk and Slicehost. According
to RackSpace, it is acquiring Slicehost for its
virtual server hosting services, and Jungle Disk
for its cloud storage products. Rackspace
announced the win as part of a new cloud
hosting strategy. Rackspace says that it intends
to integrate the capabilities of the two firms into
its complete hosting portfolio.
Hewlett-Packard to buy LeftHand Networks
Computer maker Hewlett-Packard Co. has
agreed to buy LeftHand Networks Inc., a
provider of storage virtualization. LeftHand
Networks’ solutions enable midsize companies
and remote offices or branches of large
corporations to easily and cost-effectively
protect critical business data. The company has
more than 11,000 installations across 3,000
different customers. A pioneer of iSCSI SAN
technology, LeftHand Networks’ portfolio
extends HP virtualization solutions to the
midmarket with software that runs on both
existing storage and industry-standard server
hardware, reducing training time and overall
complexity. As a result, companies can move to
a SAN for significantly lower cost, manage their
data more easily, and scale their storage
infrastructures incrementally as their businesses
148
grow. Additionally, for certain virtualized
environments, LeftHand Networks’ intelligent
cloning technology can reduce the amount of
disk space required for storage by up to 97
percent, while its thin provisioning features
reduce power consumption by minimizing the
over-provisioning of storage.
Buyer
Teksys
PHD Technologies
Kace
RedHat
Symantec
Double-Take Software
Veeam
INX
VMware
Cyberklix
Microsoft Corp
Microsoft Corp
VMware
VMware
Target
Tech MS
Xtravirt’s Virtualization
Software Assets
Computer in Motion
Qumranet
nSuite Technologies
emBoot
nworks
AccessFlow
B-hive Networks
Performance Netowrk
Solutions
Kidaro
Calista Technologies
Thinstall
Foedus (assets)
Announcement Date
September 23, 2008
September 16, 2008
Deal Value
Undisclosed
Undisclosed
September 10, 2008
September 4, 2008
August 6, 2008
July 29, 2008
June 24, 2008
June 9, 2008
May 27, 2008
April 21, 2008
Undisclosed
$107 Million
Undisclosed
$9.6 Million
Undisclosed
Undisclosed
Undisclosed
Undisclosed
March 12, 2008
January 22, 2008
January 15, 2008
January 15, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
149
Internet
Infrastructure
Pure Play (Portals)
150
Internet
Always one of the most active sectors, Internet acquisitions in all their shapes and flavors have continued
unabated in 2008. Overall, we tracked hundreds of deals in this sector during over the course of the year,
especially in the area of content sites. Yahoo!, Microsoft and the Google factor dominated the headlines,
while the social contributions of the Internet kept our worlds connected in 2008.
Possibly the biggest M&A story of the year happened when Microsoft shocked the industry with its $44.6
billion offer to buy Yahoo!, a deal that never came about. Months after CEO Jerry Yang and Yahoo!'s
board rejected the offer from Microsoft, and with Yahoo!'s stock sinking lower than it's been in years, the
huge deal suddenly looked acceptable. Yahoo! CEO Jerry Yang was rebuked and Microsoft went on to
acquire semantic search company Powerset instead. This drama was too big to die in 2008 and will
continue in 2009 as Yang has volunteered to step down as CEO as soon as a new one is found to
replace him. Maybe a new CEO will have better luck doing a deal with Microsoft or pulling off the much
rumored deal to buy AOL.
Other search engines, like Hakia and Ask.com, continue to attack Google with a semantic approach that
encourages users to make queries in complete sentences as they might in conversation, rather than the
clipped, keyword approach Google users typically use. The Calais initiative, spearheaded by Thomson
Reuters, is another so-called Semantic Web, or Web 3.0, approach to search that made progress in
2008. Many analysts express bullish opinions of Calais’ potential.
Google also continued its push into the enterprise, but there it's the upstart competitor rather than the
dominating force. Though Microsoft has had its ups and downs in its Internet strategies, it is a well
entrenched player in the enterprise. Microsoft solidified its position further in enterprise search when it
paid $1.2 billion at the start of 2008 to buy FAST Search & Transfer, one of several leading enterprise
search players like Autonomy, Exalead and others.
While Microsoft, Yahoo! and Google were dancing around each other all year, angling to grab, protect or
even expand their share of the search market, social networking kept rising as the dominant force on the
web in 2008. Facebook and MySpace helped define the social networking space, but in 2008 plenty of
other firms helped push it to the mainstream. We can all agree that there are many reasons why Barak
Obama won the U.S. presidential election, but most observers would agree that the Democratic Party's
use of the Internet contributed to his triumph. Since becoming President-elect, Obama has initiated a
weekly video address to the country, which is being distributed on YouTube. We can expect the rise in
awareness of the potential benefits of the Internet as a social media to be broadly felt in 2009 and
beyond.
It almost seemed like every Web company out there touted some "social" feature from wikis to chat to
blogs and photo sharing. If anything's going to slow social network's growth, though, it is security
concerns.
Just like blogging and the ability to comment on news items online are, in essence, popularizing and
decentralizing the news industry, so too are virtual worlds popularizing and decentralizing the gaming,
meeting, and 3D graphic design industries. Evidence supports the conclusion that the ‘killer application’
that is critical to virtual worlds, and, by extension, to Web 3.0 is, in fact, already here and it is none other
than social networking. According to recent research by In-Stat, total registered users of virtual worlds are
expected to exceed 1 billion and total revenue is expected to exceed $3 billion by 2012. If you don’t have
some type of social network strategy, you should probably get one.
151
Internet Valuations
Stock
Symbol
AKAM
ARTG
BCSI
CSCO
CTXS
DRIV
JNPR
KOW
JAVA
AMZN
EBAY
GOOG
INSP
IACI
MWW
RNWK
YHOO
Company
Akamai Technologies Inc.
Art Technology Group Inc.
Blue Coat Systems Inc.
Cisco Systems Inc.
Citrix Systems, Inc.
Digital River Inc.
Juniper Networks, Inc.
Kowabunga! Inc.
Sun Microsystems Inc.
Amazon.com Inc.
eBay Inc.
Google Inc.
Infospace Inc.
InterActiveCorp
Monster Worldwide Inc.
RealNetworks Inc.
Yahoo! Inc.
Sector
In-Infrast
In-Infrast
In-Infrast
In-Infrast
In-Infrast
In-Infrast
In-Infrast
In-Infrast
In-Infrast
In-PP
In-PP
In-PP
In-PP
In-PP
In-PP
In-PP
In-PP
Stock
Market Enterprise
Price
Value
Value
$15.09
$2,550.0
$2,350.0
$1.93
$250.1
$168.9
$8.40
$328.0
$304.6
$16.30
$95,440.0
$75,140.0
$23.57
$4,280.0
$3,800.0
$24.80
$919.8
$581.1
$17.51
$9,240.0
$7,170.0
$0.06
$3.9
$12.3
$3.82
$2,820.0
$1,480.0
$51.28
$21,990.0
$19,880.0
$13.96
$17,830.0
$14,180.0
$307.65
$96,830.0
$80,990.0
$7.55
$261.0
$62.6
$15.73
$2,210.0
$846.3
$12.09
$1,490.0
$1,030.0
$3.53
$476.8
$73.2
$12.20
$16,930.0
$13,460.0
Infrastructure
Trailing Multiple
P/E
EV/EBITDA
EV/S
19.86 x
7.23 x
3.09 x
N/A
20.13 x
1.07 x
19.09 x
8.11 x
0.78 x
12.26 x
6.69 x
1.86 x
24.55 x
13.53 x
2.42 x
15.40 x
5.88 x
1.47 x
19.67 x
8.45 x
2.07 x
N/A
1.75 x
0.13 x
N/A
1.30 x
0.11 x
35.12 x
18.75 x
1.10 x
9.69 x
4.84 x
1.63 x
18.58 x
10.63 x
3.87 x
5.76 x
N/A
0.39 x
N/A
23.99 x
0.58 x
10.51 x
3.30 x
0.72 x
N/A
N/A
0.12 x
18.48 x
10.43 x
1.86 x
18.53 x
8.11 x
1.10 x
Forward Multiple
P/E
EV/S
8.82 x
2.69 x
12.87 x
0.94 x
8.32 x
0.61 x
11.01 x
1.94 x
13.39 x
2.21 x
12.78 x
1.44 x
14.12 x
1.87 x
0.20 x
54.57 x
0.12 x
34.42 x
0.93 x
8.46 x
1.62 x
14.31 x
4.49 x
41.94 x
0.41 x
16.39 x
0.56 x
15.30 x
0.87 x
N/A
0.12 x
27.11 x
2.47 x
14.12 x
0.94 x
Pure Play (Portals)
Internet Market - Number of Transactions by Sub-Sector
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
Infrastructure
2008
57.72%
42.28%
Pure Play
152
2008 Internet Market and Sector Public Valuation Data
The charts below depict how the broad Vertical Applications market and its representive subsectors have
Internet
EV/EBITDA
EV/S
15.25 x
11.94 x
2.71 x
2.45 x
9.60 x
2.34 x
8.11 x
1.10 x
Q1
Q2
Q3
Q4
Sub Sectors
Internet Infrastructure
EV/EBITDA
12.59 x
Pure Play
EV/S
EV/EBITDA
11.65 x
19.80 x
9.60 x
7.23 x
2.48 x
Q1
2.91 x
Q2
2.55 x
Q3
EV/S
15.25 x
2.15 x
1.91 x
11.34 x
1.33 x
10.53 x
0.91 x
1.47 x
Q4
Q1
Q2
Q3
Q4
153
M&A Transactions
Infrastructure Transactions
NHN acquires Me2Day
XING AG purchases socialmedian
Web 2.0 Asia is reporting that Me2Day, a
Korean microblogging service likened to Twitter,
has been acquired by Naver, the most popular
search portal in Korea. Founded in February
2007, Me2Day was bootstrapped and angel
funded. Me2Day is purportedly "a big proponent
of open web technologies." A cursory glance at
the Me2Day site reveals that they allow login by
OpenID, something its U.S. equivalent has yet to
do. Naver was launched in June 1999 and has
since grown to be the most popular search
portal in Korea. In October 2007, comScore
ranked Naver, owned by NHN Corporation, as
the fifth most used search portal in the world.
There is no word on how Naver plans to
incorporate Me2Day functionality into its
offerings.
XING AG (Germany) has acquired New Yorkbased socialmedian Inc., an innovator in the
social news industry. The socialmedian solution
enables people to get the news filtered by their
social networks. socialmedian debuted in 2008
and has rapidly grown a highly engaged user
base. socialmedian is thus a natural fit with
XING, a leading global online social network for
professionals. Combining XING with
socialmedian's next generation social news
technology offers great potential to deliver highly
engaging content and services to business
professionals. Time-strapped professionals are
left to parse through numerous news sources for
relevant information and sort, organize, and
share stories on their own. socialmedian does
this for them, gathering information from about
19,000 sources, including social services such
as Digg, Delicious, Twitter, Flickr, Facebook,
YouTube, Google Reader, FriendFeed, the
international blogosphere, and industry and
online media sources, and then filtering news
through users’ social networking contacts. This
enables people to get the news they need to
know for their jobs, their interests, and their
passions through the people in their networks.
SynthaSite acquires Clickpass
Easy site building service Synthasite has
acquired Y Combinator startup Clickpass, which
launched earlier this year. Synthasite has raised
$5 million in capital and Clickpass just raised the
Y Combinator seed round. Clickpass helps
make OpenID more accessible to users by
allowing them to use their accounts on services
like Gmail, Yahoo, and MSN to log in to other
sites. This is essentially what OpenID was built
for in the first place, but it has taken many
months for major companies to actually
implement the standard (though they have been
making strides lately). Clickpass technology will
be used to make it easier for users to import
content from other services into their SynthaSite
pages. Possibly, SynthaSite acquired Clickpass
for its talent rather than its lofty goals of bringing
OpenID to the masses.
rd
Noobis acquires 3 Floor Intelligent Media
Noobis, Inc. has acquired 3rd Floor Intelligent
Media, a Canadian social media and technology
company. The acquisition includes existing
intellectual property and retains the company’s
technologist David Sockett as the new Chief
Technology Officer for Noobis. Not only does
this give Noobis a foot-hold in the No.1 country
for social networking use, but access to cutting
edge technology development. This includes a
proprietary SCORM-compliant Flash content
engine and technology to allow cross socialnetwork applications and multi-user lobbies.
According to a November 2008 press release by
comScore, Canada was #1 in the world for
social networking use with 87% of online
154
Canadians accessing social networking sites.
Since 2000, 3rd Floor Intelligent Media has been
creating widgets, social networking applications,
online learning modules, and customized
programs for Fortune 500 companies, and
government contractors in the U.S. and Canada.
United Internet acquires United Domains
Lycos has sold the domain registrar United
Domains to United Internet. United Internet is
the parent of companies such as 1&1 and the
Adlink group, which also encompasses Sedo.
According to United Internet’s press release,
United Domains offers registrations in over 100
TLDs for 180,000 customers and 1.1 million
domains.
Bisnode AB acquires Wer Liefert Was
Swedish digital business information provider
Bisnode AB has agreed to acquire the German
company Wer Liefert Was (WLW) from the
Italian group Seat Pagine Gialle. WLW, based in
Hamburg, provides supplier search services on
the Internet. The company has 250 employees
and reported sales of €34.5 million in 2007.
Bisnode, headquartered in Stockholm, Sweden,
is one of Europe's leading providers of digital
business information, including credit reports,
company and consumer information, direct
marketing tools and market information for the
general business-to-business market. The
company has some 3,200 employees in 19
countries, and reported revenues of kr3.9 billion
in 2007. Bisnode is owned by Ratos AB (70%)
and Bonnier Holding AB (30%).
SinnerSchrader acquires advertising
business of newtention
SinnerSchrader is strengthening its Performance
Marketing division by taking over the advertising
sales business of Hamburg-based ad
management specialist newtention technologies
GmbH. At the same time, SinnerSchrader and
newtention have agreed on far-reaching
cooperation to further develop newtention´s
leading n7 profiling, targeting and ad
management technology and to position it on the
market. SinnerSchrader is a leading interactive
agency in Germany founded in 1996, has been
listed on the stock exchange since 1999, and
has over 200 employees in Hamburg and
Frankfurt am Main. newtention technologies is
now one of the leading independent providers of
ad server technology in Europe. With just under
20 specialists, the company develops and
markets individual ad management solutions for
the online industry.
Six Apart acquires Pownce
Blog software company Six Apart is buying
Pownce and is shutting it down. Pownce is a
would-be Twitter rival that was heavily hyped
due to the involvement of Digg co-founder Kevin
Rose. It's not quite going away, according to a
post from Pownce founder Leah Culver on the
start-up's official blog. The technology has been
sold to blog platform Six Apart. Pownce, which is
like Twitter with additional features like filesharing, was so buzz-worthy at its debut that
people were auctioning alpha test invites off on
eBay. It also had a business model, with paid
accounts available for sale. But the Pownce
hype died off, and Twitter gained more and more
market share. Additionally, rumor has it that the
self-funded Pownce was trying to secure a
round of venture capital. It looks like that didn't
work out. Six Apart is encouraging Pownce
members to join its blog platform Vox.
Twitter acquires Values of n
Twitter, the micro-messaging company that
recently turned down a $500 million stock
acquisition offer from Facebook, gets the assets
and intellectual property of Values of n, including
its smart sticky-note software and its personalassistant application that works over e-mail,
texting, and the web. In 2006, Values of n raised
at least $500,000 from First Round Capital,
Magnus Ventures, and Sherpalo Ventures. The
primary goal of the acquisition appears to have
been to bring Rael Dornfest to the Twitter team.
Dornfest is the founder of Values of n and
155
former CTO at O’Reilly Media, whose
responsibilities also included editing the O’Reilly
Hacks series. He was also the head of the RSSDEV group, which created the RSS 1.0
standard.
Jamplant acquires Yahoo’s Kelkoo Unit
Yahoo has sold its Kelkoo unit, an online
shopping engine, to UK-based private equity
firm Jamplant for an undisclosed amount. Yahoo
acquired Kelkoo in 2004 for $576 million. Kelkoo
is a comparison online shopping engine, in
which customers can input the name of the
product they want to purchase and see who is
selling it and for what prices. Jamplant is a
newly formed private equity firm seeded by
several angel investors.
WebVisible acquires Adapt Technologies
WebVisible, Inc., a worldwide leader in local
online advertising, has acquired Adapt
Technologies, Inc. (Adapt SEM), a developer of
web-based applications for automating the
management of search engine marketing
campaigns and providing recommendations on
various aspects of keyword selection, bidding
and optimization. WebVisible is a global leader
in local interactive advertising, offering simple
and affordable online advertising campaign
management for small and midsize businesses
with an emphasis on customer conversions and
proven return on investment.
growth of its digital business, which seeks to
apply innovative technology and content
solutions to the needs of all its customers. With
the Ripple6 platform, Gannett can help users
create communities and connect with their
friends and family in highly pleasing ways, while
providing marketers with innovative advertising
opportunities and measurable results.
UK web hosting company buys WestHost
British web hosting company UK-2 Group has
acquired Utah-based web hosting provider
WestHost.com, completing its expansion plans
in the U.S. hosting market.
Innovation Interactive acquires Netmining NV
Innovation Interactive, the parent company of
360i and SearchIgnite, has acquired Netmining
NV, a leading provider of landing page and onsite behavioral optimization technology
headquartered in Brussels, Belgium. The move
bolster's the company's ability to increase
conversion rates from all visitors to a marketer's
web site, as well as improve the return on
advertising spend (ROAS) that a marketer
receives from online media purchased to drive
customers to their site. Netmining's behavioral
targeting solutions will continue to be offered as
a standalone product, but will also be
strategically integrated into the SearchIgnite
optimization platform in the 1st half of 2009.
SpectrumDNA Inc to acquire Revyver
Gannett acquires Ripple6
Gannett Co., Inc. has acquired Ripple6, Inc., a
provider of social media services. Ripple6 will
become a wholly-owned subsidiary of Gannett
and will continue to offer its best of breed social
media technology and analytics not only to
Gannett but also to an array of top tier marketers
and web publishers. Gannett believes Ripple6 is
richly innovative and can change the way social
media is offered and monetized online. Ripple6
will join Gannett’s other enterprises in fueling the
SpectrumDNA, Inc. is acquiring Seattle-based
digital design firm Revyver. SpectrumDNA, Inc.
owns and operates a range of cutting-edge
digital brands. Revyver is slated to become a
label within the SpectrumDNA family of
companies and would operate as a subsidiary of
SpectrumDNA, Inc. Revyver CEO, Bryan
Veloso, is a creative visionary who has worked
with some of the most innovative firms in the
social media industry. He was the second
designer at the social networking giant
156
Facebook. He also designed for Automattic, the
creators of WordPress. The self-taught prodigy
started designing at age 13 and started blogging
about web design in 2004. His blog Avalonstar,
http://avalonstar.com, won the 2006 SXSW Best
Blog Award. Veloso founded Revyver in 2006
after leaving Facebook to focus on bringing
superior design and world-class applications to
markets that haven't benefited from them yet.
Revyver's clients have included Flock and
Mashable, among others.
imwave acquires move marketing's
performance search marketing business
imwave, inc. has acquired move marketing’s
performance search marketing business.
imwave will immediately take over all of move
marketing’s advertiser relationships and search
engine marketing campaigns. imwave believes
that this acquisition clearly solidifies its position
as one of the largest super affiliates in the
industry focused on paid search engine
marketing.
Adknowledge acquires advertising business
of Lookery
Adknowledge announced that it has significantly
expanded its position in the social ad network by
acquiring the advertising business of Lookery.
The addition of the Lookery ad network
increases the total ads displayed by
Adknowledge through its social ad network,
Cubics.com, to more than 10 billion monthly.
This accounts for over 40% of all ads served on
Facebook applications according to internal
Adknowledge estimates. Cubics.com also
displays ads on applications on MySpace, Hi5,
Friendster, Orkut, and Bebo. After partnering
with Lookery for several months to serve ads on
the Lookery ad network, Adknowledge moved to
acquire the ad network assets.
InternetArray acquires majority stake in
Noobis
InternetArray, Inc., an Internet development,
technology licensing and marketing company,
has acquired majority ownership in Noobis, Inc.,
a social media development company. Noobis
develops and integrates social media
applications and networks. In addition to building
its own Internet assets and technologies, Noobis
works with clients and partners to leverage the
emerging social media marketplace. This
acquisition is a first step in the company’s new
strategic focus in developing collaborative
Internet-based business partners. This is the
first project under IA’s strategic focus of
concentrating upon Internet business
opportunities.
Masterseek acquires Accoona
International B2B search engine Masterseek,
which was founded in Denmark in 1999, has
acquired American search engine Accoona.
Accoona received great attention upon its
launch in 2004, when the former U.S. President
Bill Clinton was the speaker at its opening.
Accoona has since achieved particular success
in China, where Accoona has supplied the
search function to both Sina.com and Sohu and
has an exclusive partnership with China's most
widely-read daily newspaper, China Daily News.
In 2006 Accoona was elected by Time magazine
as one of the 50 best websites. Last year
Accoona planned a flotation at 700 million USD
on London's Aim Tech. However, this was not
realised due to the hard pressed market for
raising capital. With the acquisition of Accoona,
Masterseek will fortify itself in its fight to become
one of the largest B2B search engines in the
world. The acquisition means that Masterseek
will improve its company data and at the same
time significantly increase the number of its
users.
Adknowledge buys Adonomics
Adknowledge, a behavioral targeter focusing on
social networks, has purchased Facebook
analytics firm Adonomics. Adonomics tracks
157
application traffic for developers and has been
growing since its launch soon after the launch of
the Facebook platform. Adonomics’ data will be
merged into Cubics, an online ad network for
social net apps which Adknowledge purchased
last December.
ESPRE Solutions to acquire
OpenACircle.com
ESPRE Solutions, Inc., a media solutions and
technology company with an innovative and
patented video compression technology, is
acquiring Blideo, Inc., a private company dba:
OpenACircle.com, an online collaboration
company. ESPRE Solutions will acquire
OpenACircle.com to enhance each company’s
presence in the competitive and rapidly-growing
web collaboration market. The web conferencing
and collaboration sector is the most established
market in the web-based video space. Under
this arrangement, ESPRE will provide the
technology OpenACircle.com needs to ensure
ease-of-use and overall quality of their product,
while OpenACircle.com will provide ESPRE with
an established market to which they can deliver
their technologies.
Perfect Market acquires Media River
Technology
Perfect Market, Inc., a marketing services firm
for publishers that specializes in "lighting up"
underutilized content and creating additional
revenue from these assets, announced today
that it has acquired MediaRiver's patent-pending
technology for matching content and advertising
to any web page on the fly. The technology
reads the contents of a web page and responds
with highly relevant content and advertising to
match the page. MediaRiver's targeting solution
helps publishers and advertisers reach engaged
users by efficiently tapping search, display, and
widget networks. Perfect Market helps users find
valuable content that they may have previously
missed. By combining MediaRiver's targeting
and optimization capabilities with Perfect
Market's existing technologies and business, the
companies are creating an even more efficient
end-to-end service.
FreshAddress acquires business unit from
Return Path
FreshAddress, the leading provider of
permission-based email change of address
(ECOA) services, announced it has signed an
agreement to purchase Return Path's ECOA
business. Through this purchase, FreshAddress
will acquire Return Path's old/new email address
change-pairs, hygiene technology, client and
partner relationships and related patents, among
other provisions. The acquisition establishes
FreshAddress as the undisputed source for
email change of address information and
represents the beginning of the company's
aggressive growth-through-acquisition strategy.
Razorfish acquires Wysiwyg
Microsoft's digital marketing subsidiary Razorfish
has acquired Spanish digital advertising firm
Wysiwyg. Razorfish said acquisitions in Europe
and emerging markets will counter the downturn
in the U.S. market. The company aims to
generate a third of its revenue outside the U.S.
by the end of 2009. Madrid-based Wysiwyg has
55 employees who will be retained on
completion of the acquisition. Microsoft acquired
aQuantive, the parent company of Razorfish, for
$6 billion in 2007 to enhance its footprint in the
interactive advertising space.
TubeMogul is acquiring Illumenix
Online video reporting company TubeMogul Inc.
has acquired Flash analytics firm Illumenix Inc.
in a deal designed to beef up its reporting for
video publishers that use its service. With
patent-pending technology, Illumenix enables
deep analysis of how users view online video.
By putting a single line of code into their Flash
video players, publishers can see how viewers
interact with their content, yielding data such as
time of engagement, viewer drop off, and user
interaction with other events that happen within
the video. If you are already a customer of
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TubeMogul as a distribution tool, they can give
you Illumenix analytics for your own site, along
with the company’s distributed analytics.
Another use case is to help video sharing and
social networking sites to unlock their analytics
so that they can share that data with their
content partners, their advertisers, and with their
uploaders.
Akamai Technologies acquires acerno
Akamai Technologies is acquiring acerno. The
acquisition of acerno, a unique online cooperative of shopping and purchase data for
enabling more relevant online advertising, is
expected to greatly enhance Akamai’s
Advertising Decision Solutions, a new product
line also being announced. These new Akamai
solutions will enable online advertising
businesses to boost the performance of their
online marketing investments by driving smarter
advertising decisions based on relevant
audience segments.
Acresso Software to acquire Intraware
Acresso Software, a provider of digital delivery
and management services, is acquiring
Intraware, Inc., a privately-held company of
Thoma Bravo. The Intraware SubscribeNet
service is a web-based delivery and support
platform that enables technology companies to
deliver, track and manage the software, licenses
and other digital content they distribute to their
customers. Combining forces with Acresso and
Thoma Bravo presents an attractive opportunity
for all stakeholders involved. The resulting
company will have an even more significant
presence in strategic data management.
Technorati acquires AdEngage
Technorati has acquired AdEngage, an
advertising network. The AdEngage platform will
remain a free standing, branded service, and
Technorati will also launch a version of the
platform under its new Technorati Media brand.
This follows Technorati’s August acquisition of
BlogCritics, a network of blog content.
AdEngage, which was founded in 2004, sells
advertising for 4,000 sites, and has 13 billion ad
impressions per month. Many of those sites are
adult oriented, so Technorati isn’t merging it with
its core service. Instead, they’ll launch a
separate version of it under the Technorati
Media brand in a few weeks. The current
Technorati Media offering is for larger sites that
Technorati partners with. When the AdEngage
platform launches, smaller blogs can sign up as
well and, it is hoped, command relatively higher
advertising rates by grouping with similar blogs
in spheres of influence.
Automattic acquires PollDaddy
Automattic Inc., creator of the WordPress blog
platform, has acquired PollDaddy, an Irelandbased provider of online polling widgets. The
purchase gives WordPress an infusion of polling
technology and seems to be justified simply on
the basis that bloggers love polls. There appears
to be a plugin rollup strategy of sorts underway
at the highly decentralized blogging startup, one
that will result in the absorption of features into
the WordPress codebase that are currently
provided through extensions. Automattic
recently purchased Intense Debate, a small
TechStars startup working on an advanced
commenting platform. Further back, it also
acquired Buddy Press, a project for layering
social networking features onto WordPress, in
March, and Gravatar, a universal avatar system
last fall.
RSDV to acquire AptHost.com
Rancho Santa Monica Developments Inc. is
acquiring AptHost.com Communications USA
Inc., a provider of Social Media Hosting,
worldwide. AptHost.com is a strategic addition to
the Rancho Santa Monica Developments
business. The acquisition will extend Rancho
Santa Monica Developments into the evergrowing web hosting and technology industry.
AptHost.com has seen an expansive growth in
the hosting industry by providing a unique
service that gives clients the capability to upload
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and stream videos on their website. Special
software installed and managed by AptHost.com
allow scripts such as PHPmotion and Clip-Share
to run flawlessly, allowing website owners to
have a website similar to YouTube. With social
media and video sharing taking the Internet by
storm, RSDV expects to see dramatic growth in
the coming years.
Accel-KKR acquires Endurance International
Group
Accel-KKR, a technology-focused private equity
firm, announced the acquisition of a majority
equity stake in the Endurance International
Group, Inc., a privately held provider of online
applications and services. Endurance is one of
the largest providers of website hosting and
online applications and services in the world and
ranks among the top 10 for domain names
under management worldwide. The company
utilizes a multi-brand approach to provide web
services and solutions tailored for various
market segments, including small and mediumsized businesses, individual consumers, nonprofits groups and large enterprises. Endurance
supports multiple brands worldwide and
manages over one million domain names.
Omniture acquires Mercado Software
Omniture Inc., a provider of online business
optimization software, has agreed to acquire
certain assets of Mercado, a search and
merchandising solution provider. The additional
technology and expertise gained will expand
Omniture’s solutions for site search and
merchandising, particularly in the retail sector.
The Mercado solution is already integrated with
Omniture SiteCatalyst through Omniture
Genesis. It has been one of the most popular
Genesis integrations because it can improve
conversion by automatically increasing the
relevance of site search results based on
business analytics such as product popularity,
affinity and revenue. Mercado had raised over
$70 million in VC funding, including a 2004
recap.
Deal Value: $6.5 Million (Cash and assumption
of debt)
Teleflip sells assets to undisclosed buyer
Teleflip, a provider of free email service to
mobile phones, has sold its assets to an
undisclosed buyer. The company had raised
nearly $5 million in private equity and debt
funding from firms like GRP Partners and
Hercules Technology Growth Capital. In a
statement, Hercules said that Teleflip had been
written down to a fair value of $0.00 in the first
quarter of 2008, and that the sale represented a
recovery of $0.02 per share in NAV.
eBay acquires Classifieds Sites in Denmark
eBay Inc. has acquired Den Bla Avis and
BilBasen, providers of leading online classifieds
sites in Denmark. Classifieds are the preferred
e-commerce format in Denmark and represent
an attractive and growing market. The addition
of Den Bla Avis (dba.dk) and BilBasen
(bilbasen.dk) to eBay’s global classifieds
portfolio positions the company as a leader in
the online classifieds market in Denmark and
further strengthens the company’s world-leading
portfolio of online classifieds sites that already
includes Marktplaats, Kijiji, LoQUo, Gumtree and
mobile.de. eBay’s online classifieds business
now has a presence in more than 20 countries
and 1,000 cities.
eBay buying Bill Me Later
eBay Inc. is acquiring Bill Me Later, the number
two online-oriented payments brand. The
acquisition extends the company’s leadership in
payments by combining Bill Me Later with
eBay’s PayPal, the number one online-oriented
payments brand. eBay believes Bill Me Later is
a perfect complement to its portfolio and PayPal
and Bill Me Later belong together. eBay will now
have a powerful combination of the two leading,
complementary online payment products, each
with proven benefits for consumers and online
merchants. Together, PayPal and Bill Me Later
can better meet consumers’ needs both on and
off eBay by allowing them to quickly, safely and
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easily purchase the items they want online and
pay for them immediately or over time. With one
payment relationship, retailers and eBay sellers
can offer two of the web’s most innovative
payment methods, which have been proven to
increase sales and deliver higher average
selling prices for merchants.
Deal Value: $945 Million (Cash $820 million and
$125 million in outstanding options)
Seller Revenue: $150 million (FY 2009 est)
Buyer
Clearspring
Technologies
Automattic
Continuity Engine
MTV Networks
Cisco
Tsavo Media
ZM Surveys LLC
iSkoot
Microsoft
Cisco
Return Path
MICROS Systems
Patriot Scientific Corp
Publicis Groupe
CallWave
Quova
Holtzbrinck GmbH
AdEx Media
Publicis Groupe
Google
ViewPartner
Corporation
ConnectEDU
thePlatform
ChannelAdvisor
iProperty Group Asia
Mobispine AB
SNiPiTRON
British Telecom
JS-Kit
ProQuest
Target
AddThis
Announcement Date
September 30, 2008
Deal Value
Undisclosed
IntenseDebate
Continuity Integrators
Social Project
Jabber
Better, Inc.
Greenfield Online’s
Internet Survey
Solutions (from
Microsoft)
Solical.IM
Greenfield Online
PostPath
Habeas
Fry, Inc.
Crossflo Systems
Performics’ Search
Marketing Business
WebMessenger
Verifia
Quarter Media GmbH
VibrantAds
Portfolio
Ramber Media’s
Advertising Unit, ZAO
Begun
PodTech Network
September 23, 2008
September 23, 2008
September 22, 2008
September 19, 2008
September 16, 2008
September 10, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
September 5, 2008
August 29, 2008
August 27, 2008
August 12, 2008
August 12, 2008
August 6, 2008
August 6, 2008
Undisclosed
$486 Million
$215 Milion
Undisclosed
$49.7 Million
$10 Million
Undisclosed
July 30, 2008
July 29, 2008
July 22, 2008
July 22, 2008
July 22, 2008
July 18, 2008
$15 Million (Rumored)
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$140 Million
July 18, 2008
Undisclosed
July 17, 2008
July 16, 2008
July 16, 2008
July 15,2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
July 15, 2008
July 15, 2008
July 11, 2008
July 8, 2008
July 2, 2008
Undisclosed
Undisclosed
$39.5 Million
Undisclosed
Undisclosed
Prep HeadQuarters
Chirp Interactive
RichFX
Info-Portal Tech
International
NewsAlloy
OnlyWire.com
Ufindus Ltd
HaloScan
Thomson-Reuters’
Dialog business
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Vizrt Ltd
Bridgeline Software
Hi5 Networks
Microsoft
ADESA
Vitrue
Coupons
Logica Holdings
Nokia
Deluxe Corporation
Protus
Quadrangle Group LLC
Demandware
Webloyalty.com
Waterfront Media
WhitePages.com
Collective Media
CommQuest Pty. Ltd.
CommQuest Pty. Ltd.
Evolve IP
SezWho
Modavox
Alterian
eFuture Information
Technology
Accenture
Yahoo!
DG FastChannel
Though Convergence
HLI Limited
Pretium Capital Corp.
Cox Enterprises
BuzzLogic
Live*Universe
AOL
Microsoft
iCrossing
Vignette Corp.
ABRY Partners
FOX Networks
Amdocs
Seesmic
EXFO Electro-Optical
Engineering Inc.
Crisp
Data Call Technologies
Microsoft
Ipercast
AOL
Escenic AS
Indigio Group
PixVerse
Powerset
Live Global Bid
UGENMedia
CouponBug LLC
Dolphin Digital Media
Plazes
Hostopia.com
Campaigner
Greenfield Online
n2N Commerce’s
Assets
Lift Media
Netramind
Snapvine
Personifi
SecurePay Pty.
Inspirus
Lyrio IP Technology
Solutions
Tejit
RadioPilot
Mediasurface
Wangku Hutong
Information Technology
Origin Digital
Inquisitor
Enliven Marketing
Technologies
Name Intelligence
Zoogle Interactive Ltd.
Sitebrand.com
Adify
Activeweave
Pageflakes
Sphere
Farecast
3GNet GmbH
Vidavee
Hosted Solutions
utarget
Jacobs Rimell, Ltd.
Twhirl
Brix Networks
IMSafer
Podcast Ready
Rapt
1-Click Media
Bebo
July 2, 2008
July 1, 2008
July 1, 2008
June 26, 2008
June 26, 2008
June 25, 2008
June 25, 2008
June 24, 2008
June 23, 2008
June 19, 2008
June 17, 2008
June 16, 2008
June 16, 2008
$17.8 Million plus stock
$6 Million
Undisclosed
$100 Million
Undisclosed
Undisclosed
Undisclosed
$20.2 Million
Undisclosed
$122 Million
Undisclosed
$426 Million
Undisclosed
June 10, 2008
June 9, 2008
June 4, 2008
June 3, 2008
June 2, 2008
June 2, 2008
June 2, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$2.93 Million
$1.36 Million
Undisclosed
May 29, 2008
May 20, 2008
May 16, 2008
May 14, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
May 14, 2008
May 9, 2008
May 8, 2008
Undisclosed
Undisclosed
$98 Million
May 6, 2008
May 6, 2008
April 29, 2008
April 28, 2008
April 22, 2008
April 18, 2008
April 15, 2008
April 14, 2008
April 14, 2008
April 9, 2008
April 8, 2008
April 8, 2008
April 8, 2008
April 4, 2008
April 1, 2008
Undisclosed
Undisclosed
Undisclosed
$300 Million
Undisclosed
Undisclosed
Undisclosed
$115 Million
Undisclosed
$6.6 Million
$140 Million
Undisclosed
$45 Million
Undisclosed
$28.5 Million
March 24, 2008
March 24, 2008
March 18, 2008
March 14, 2008
March 13, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$850 Million
162
Specific Media
ROK Entertainment
Group
Viaccess SA
Ascentium Corporation
Demand Media
Mzinga
Taylor Nelson Sofres
Microsoft
ONEsite
IPVG Corp.
Yahoo!
Dell
uLocate
Communications
Investools
AOL
AOL
docdata
Lijit Networks
Cornerworld Corp.
Accenture
Questex Media Group
ATG
NeuStar
Microsoft
EnActen Corporation
Oversee.net
Adviva
Geniem
March 12, 2008
March 12, 2008
Undisclosed
Undisclosed
Orca Interactive
ZeroDash1
Pluck Corporation
Prospero Technologies
Compete
YaData Ltd.
Social Platform LLC
Prolexic Technologies
Maven Networks
MessageOne
Zync
March 10, 2008
March 10, 2008
March 4, 2008
March 4, 2008
March 3, 2008
February 28, 2008
Feburary 21, 2008
February 12, 2008
February 12, 2008
February 12, 2008
February 7, 2008
$21.4 Million
Undisclosed
Undisclosed
Undisclosed
$75 Million
Undisclosed
Undisclosed
Undisclosed
$160 Million
$155 Million
Undisclosed
mytrade.com
buy.at
Goowy Media
Hitura Ltd.
BigSwerve
Sway
Memetrics Holdings Pty
and Maxamine
FierceMarkets
CleverSet
Webmetrics
FAST Search &
Transfer ASA
Alentus Corporation
Miniker
February 7, 2008
February 5, 2008
February 4, 2008
February 1, 2008
January 29, 2008
January 31, 2008
January 23, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$30 Million
Undisclosed
January 22, 2008
January 22, 2008
January 15, 2008
January 8, 2008
Undisclosed
$10 Million
Undisclosed
$1.2 Billion
January 3, 2008
January 3, 2008
Undisclosed
Undisclosed
163
Pure Play Transactions
Deutsche Boerse buys Market News
International
German stock exchange operator Deutsche
Boerse is acquiring U.S.-based online financial
news agency Market News International from
China's Xinhua Finance. The acquisition would
expand its real-time information offerings for
financial markets. Market News International has
a staff of 85 employees at 12 locations in
Europe, Asia and the United States.
Shaker Recruitment acquires CareerSite
Shaker Recruitment Consultants, a division of
Shaker Recruitment Advertising &
Communications, acquired CareerSite, a
website platform that provides private-label
recruitment sites for traditional and nontraditional media nationwide. For the past five
years, Shaker Recruitment Consultants has
provided recruitment services to media
publishers across the United States, utilizing the
CareerSite technology to power its numerous
local boards. For over ten years, CareerSite’s
powerful online recruitment solution provided its
clients the tools necessary to build, grow and
maintain a successful career center while
capturing their share of the billion-dollar erecruiting market. This includes software,
hosting, customer service, billing and merchant
services, job content, integrated access to a
marketplace of leading solutions, and
distribution. Shaker’s vast experience in the
recruitment marketing arena and CareerSite’s
leading technology will bring a complete solution
to the marketplace, as well as offer publishers
additional recruitment advertising services that
before were not possible.
network. Poznanici.com is a rather popular
social network in Serbia as it has over 100
thousand registered users from Serbia and other
ex-Yugoslavian counties and gets more than
85,000 unique visits and 1.5 million views daily.
Gale acquires HighBeam
Educational publisher Gale has bought
HighBeam Research to further its development
in user experience. HighBeam has long been a
content provider for the Cengage Learning
subsidiary, so Gale calls the acquisition a
“natural extension of its user-focused strategy.”
HighBeam, which is best known for its Research
Library and online reference site,
Encycopledia.com, will remain based in
Chicago. Farmington Hills, Mich.-based Gale
also has UK and Malaysian offices, and its major
brands include article database InfoTrac and ebook platform Gale Virtual Reference Library.
IK Investment Partners sells Wehkamp
IK Investment Partners (“IK”, formerly known as
Industri Kapital) has sold Wehkamp, the market
leader in online shopping in the Netherlands, to
a group of undisclosed private investors. IK will
retain a minority interest in Wehkamp. IK
acquired Wehkamp, together with the credit
management company Transfair, from the UK
retailer GUS plc in January 2006, with the plan
to further grow and develop both businesses
and capitalize on IK’s experience in the home
shopping, consumer credit and debt collection
markets. The business continues to be driven by
the strong growth in online retailing. Wehkamp
has grown into the largest and most highly rated
online retailer in the Netherlands.
Daily Mail and General Trust acquire majority
in Poznanici.com
Daily Mail and General Trust acquired a majority
stake in Poznanici.com, a Serbian social
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CANCOM acquires Home of Hardware
Vizimo acquires TIOTI.com
CANCOM IT Systeme AG acquired 75.5 percent
of the shares in Home of Hardware GmbH & Co.
KG based in Westendorf near Augsburg,
Germany. Home of Hardware is one of the
leading e-tailers in the IT sector. With a
workforce of around 85, Home of Hardware is
expected to achieve sales of around EUR 80
million in 2008 through its web shop
www.hoh.de. The CANCOM Group, formed in
1992, is a leading provider of IT infrastructure
and professional services. Against the
background of an economic crisis, CANCOM
sees good opportunities in the e-tailer business
due to increased price awareness among
customers.
Next generation guidance company, Vizimo, has
acquired TIOTI, the popular, interactive, TV
social networking website. Vizimo plans to use
TIOTI as a shop window in which to pioneer,
demonstrate and test new functionality and tools
that tie together TV, the web and, increasingly,
mobile devices. TIOTI – an acronym for ‘Tape It
Off The Internet’ - launched in Spring 2007 to
considerable media interest and has attracted a
substantial, loyal user base since then. In the
same period, Vizimo has been quietly
developing ‘next generation guidance’ solutions:
intelligent, interactive, guidance technology that
enables viewers to find, discover, manage and
watch TV or video programs that they are
interested in. Vizimo’s solutions make use of
sources that include broadcast TV, on-demand
and catch-up services, Internet TV and mobile
video services, and are designed to engage
viewers with a genuinely personalized guide that
works coherently across TV, web and mobile.
TIOTI’s approach proved to be innovative and it
made significant strides in terms of the social
aspects of content discovery and guidance.
This is a great fit with Vizimo’s approach to
content discovery which relies on Vizimo’s
underlying technology for content analysis. The
TIOTI proposition will be able to use Vizimo’s
technology to enhance its proposition, while
Vizimo will be able to extend the range of
capabilities on offers to partners through
leveraging some of TIOTI’s social capabilities.
Deal Value: Symbolic purchase price of €3. (Put
and call options with earnings-based purchase
prices were agreed for the remaining 24.5
percent of the shares in Home of Hardware
GmbH & Co. KG.)
RealEstate.com acquires New Homes Realty
RealEstate.com acquired the assets of New
Homes Realty, Inc. New Homes Realty is an
online real estate company operating in 11
metro areas across the country and utilizing a
network of approximately 200 licensed real
estate agents and brokers. In addition, the
company developed a family of web sites,
including its flagship NewHomes.com, to provide
interested home shoppers a database of
thorough real estate information for new and
existing homes. The purchase will expand
RealEstate.com, REALTORS in its existing 14
markets, as well as enable the company to grow
into six new areas including Florida, Georgia,
Illinois, Louisiana, Texas, and the Washington,
DC/Capital region. In addition, New Homes
Realty's family of web sites will now be run by
RealEstate.com. The acquisition also allows
RealEstate.com to add another lead generation
component to its growing real estate portfolio,
which already includes iNest, a leading real
estate broker specializing in newly-constructed
homes.
AssetNation, Inc. acquires AssetAuctions
AssetNation, Inc., a Spire Capital company,
acquired AssetAuctions LLC. AssetAuctions is
the leading provider of asset recovery, appraisal
and inventory online auction services for the
industrial, commercial and government markets.
AssetNation already has some of the strongest
brands in the online auction community which
include SalvageSale, SalvageSale Ltd (UK),
CapitalAssetSale, and now AssetAuctions and
AssetAuctions de Mexico. This acquisition
brings expanded service offerings and signals a
commitment to expanding the AssetNation
footprint internationally. The acquisition of
AssetAuctions demonstrates Spire Capital’s
continued commitment to grow AssetNation,
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both organically as well as via select strategic
acquisitions.
IB3 Networks acquires NYC Mags
iB3 Networks, Inc and its wholly owned
subsidiary iBeam Solutions, a Microsoft Gold
Certified Partner and a Cisco Certified Select
Partner, is acquiring NYC Mags, Inc. the owner
of MadisonAvenueMatch.com.
MadisonAvenueMatch.com, a development
stage website expected to launch in first quarter
of 2009, is an upscale online dating web-based
service focused on New York City men and
women, with busy careers, looking for someone
special in their lives. This site is expected to
attract immediate membership by offering a
complimentary 30-day trial, and access to
private mixer events. MadisonAvenueMatch.com
will offer its new members the ability to upgrade
with a vast array of membership options. The
online dating business is a multi-billion dollar
industry, with plenty of room for growth for new
niche sites. MadisonAvenueMatch.com will be
iB3's ticket into the game.
College Fanz Sports Network acquires
Victory Sports Network
College Fanz Sports Network has acquired the
Victory Sports Network, the dominant voice of
the National Association of Intercollegiate
Athletics (NAIA). This is an opportunity for the
Victory Sports Network and the thousands of
fans of NAIA schools that have made VSN
successful to expand the coverage and
awareness of the nearly 300 small college
sports programs. The acquisition continues the
vision of College Fanz to become the single
source for scores and information from over
1,450 colleges and universities in the United
States. Fanz can post videos, photographs, and
comment on their favorite teams and schools,
participate in contests, and communicate with
other fans in a compelling and ever-growing
social network.
PriveCo acquires Vibesales
Privately owned PriveCo, which specializes in
retailing “embarrassing” products online, has
acquired the domain name vibrators.com from
Vibesales. PriveCo began selling private things
out of a spare bedroom on a website called
ShopInPrivate.com back in 1998, and has
steadily grown to an operation with 12 separate
retail sites whose warehouse ships 1500+
packages per week. The domain name offers
them an instantly recognizable name tied to
products that people want to buy in complete
privacy. PriveCo has been running
Vibrators.com since 2002, essentially leasing
the domain from someone else.
Deal Value: $1 Million (The deal was $200,000
down and $800,000 at 8% over an undisclosed
“fairly short term”)
Canal Partners acquires Limos.com
Canal Partners, a private equity firm, has
acquired a majority stake in privately-held online
ground transportation services company
Limos.com. Founded in 1997, Limos.com is a
pioneer in the lead generation industry and a
premier provider of qualified leads for licensed
transportation providers. Limos.com offers free
limo and other ground transportation quotes in
all major U.S. metropolitan markets and nearly
two dozen countries including the U.K.,
Australia, Germany, Mexico, France and Italy.
With more than 5 million unique visitors in 2007,
Limos.com is the highest-ranking website in
terms of Internet traffic for those searching for
ground transportation.
Aristotle International acquires
CompleteCampaigns.com
Aristotle International, an industry leader and
pioneer in political technology solutions,
announced its acquisition of California-based
CompleteCampaigns.com, which provides webbased campaign management tools to political
clients. Aristotle's acquisition of
CompleteCampaigns.com creates the largest,
non-partisan provider of campaign technology in
the political marketplace serving more than
2,000 clients in 50 states, from local level to
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federal races. The acquisition aligns some of the
industry's strongest software brands and political
technologies for managing campaigns. The
move also accelerates Aristotle's plan to expand
its industry-leading data platforms and suite of
political software with new web-based
technologies and mobile applications for
campaign professionals and voters alike.
Everything Furniture buys online retail
competitor Kelley Furniture
EverythingFurniture.com does its second
successful acquisition in two years, taking out
another competitor. Last year the company
successfully finished its acquisition of
FurnitureParadise.com, and now gets another
successful acquisition by adding
KelleyFurniture.com to its stable of web
properties. In a very challenging furniture
industry environment, EverythingFurniture.com
has dodged the hard times felt among most of
the furniture industry by actually having growth
in sales and profits while big chain stores like
Levitz and Wickes among others have shuttered
their doors and no longer exist. By adding the
two acquisitions, EverythingFurniture.com
spreads its online presence and at the same
time takes out important competitors.
Babbel.com scoops up UK-based foreign
language social network FriendsAbroad.com
Berlin-based language learning site Babbel,
which won an undisclosed round of funding from
German VCs KIZOO and VC-Fonds three
months ago, has acquired FriendsAbroad, the
older UK-based language community startup.
Under the deal, FriendsAbroad will be closed
after six months and its 500,000+ users
encouraged to transfer to Babbel over that
time.The courses offered by Babbel will appeal
to FriendsAbroad’s existing community and they
“don’t have plans” to roll up any other langauage
sites in Europe after this deal. The significance
of this is that Lesson Nine, the Berlin-based
company behind Babbel, will now find itself the
significant player in the growing online language
learning market. So far it concentrates on
offering free courses in French, Spanish, Italian,
German or English. It’s clear that although
Babbel had already acquired 100,000 users, it
still needed to scale faster after only launching in
January this year. FriendsAbroad has been
around for the last four years and been mainly
an online community for making contact with
other language learners and hasn’t concentrated
on the multimedia courses Babbel offers.
Reunion.com and Wink merge
Reunion.com, a people search service, and
Wink, the people search engine, have merged to
form a comprehensive online platform for people
looking to find each other on the web. An
entirely new brand and web site will launch early
next year to cement the unique positioning of
this joint company as the leader in people
search, providing users with access to a
combined total of more than 700 million profiles
that span social networks, online communities,
and other proprietary sources. The recent
explosion of social networks has created a
multitude of options for people to establish
online identities – making it that much more
challenging to find people you’re looking for. The
new joint company will leverage its wide array of
cutting-edge technologies to search the entire
web and across networks to help you find
everyone – no matter what sites they are using.
SheKnows acquires Babyhold
SheKnows.com, one of the fastest growing
online destinations for women and a part of
AtomicOnline, acquired BabyHold.com.
BabyHold also features diversified lists of baby
names by origin, uniqueness, meaning, and
popularity, as well as an advanced search tool
allowing users to store and rank the names from
their search results. The site serves as a
community for mothers-to-be and is designed to
fit in with SheKnows’ stable of other recent
additions, including PregnancyAndBaby.com,
PregnancyFashion.com and ChefMom.com.
167
KillerStartups.com acquires Startups.com
KillerStartups.com, which operates one of the
most highly-read blogs dedicated to Internet
startups, announced the acquisition of
Startups.com and the launch of the
Startups.com Network, a proprietary network of
business sites focused on services and content
for entrepreneurs and business executives.
Founded by Argentinean Internet entrepreneurs,
KillerStartups, which reaches over 1.5 million
visitors per month, provides insightful reviews on
Internet startups and receives hundreds of daily
submissions. Being profitable helps
KillerStartups to be aggressive, and plans to
look at other acquisitions in the business
category. Startups.com Network plans to launch
several other sites before the end of 2008 and is
actively seeking business-related sites to
acquire.
U.S. Auto Parts acquires AutoMD
U.S. Auto Parts, an online provider of
aftermarket auto parts and accessories, has
taken another step in providing drivers with
premier car service and repair advice by
acquiring the assets of AutoMD.com, a provider
of online auto diagnosis and repair technology.
According to the company, consumers are
hungry for an advocate who will ensure they
don't over pay to maintain and restore the health
of their vehicle. The acquisition of AutoMD
positions U.S. Auto Parts to be that consumer
advocate. Over the next year, U.S. Auto Parts
will enhance the existing site and build out the
technology required to ensure vehicle owners
have an advocate. Once fully developed, the
website will enable a vehicle owner to input
information about the symptoms of a car's
ailment, and ultimately arrive at a diagnosis and
prescription for repair.
American Media acquires Radar Online
AMI has acquired the website RadarOnline.com,
a brand that looks to be re-launched as a more
serious news venture about pop culture. AMI
announced they are partnering with Integrity
Multimedia Company in creating a new
company, Radar Online LLC. Integrity
Multimedia will make a multi-million dollar
investment in RadarOnline.com to launch it as
the ultimate destination for breaking celebrity
news and cutting edge pop culture.
RadarOnline.com will be supported by the AMI
news organization and its network of hundreds
of news gatherers and thousands of sources. In
addition, the Radar Online site will also have its
own staff of editors, reporters, photographers
and videographers.
Modavox to acquire TalkZone.com
Modavox, an Internet broadcasting pioneer and
holder of several patented technologies, is
acquiring TalkZone (www.talkzone.com).
TalkZone.com is part of Syndication Networks
Corporation, a syndicator of quality terrestrial
radio programs to over 1,700 over-the-air radio
stations and 90% of rated U.S. markets across
North America. The company has been in
business since 1993, with an established online
presence since 1996. Consistently No. 1 ranked
on Google for radio syndication, Syndication
Networks offers a wide array of brand name
radio shows. The synergies between Modavox’s
VoiceAmerica and World Talk Internet radio
networks and TalkZone are numerous. Most
importantly, the acquisition of TalkZone will
allow the company to offer syndication to its
existing hosts, a value that materially enhances
their already impressive distribution capabilities.
City Capital acquires
NittyGrittyMarketing.com
City Capital Corporation has purchased
NittyGrittyMarketing.com, a subscription-based
online forum, social network, and training
network where members learn 'All Things
Internet Marketing.' Included in the purchase of
NittyGrittyMarketing.com are 50-hours of digital
content, video, training materials, searchable
digital content, 38 domain names, 10,000+
person mailing list, more than 3,000 subscribers,
and nearly 2,000 affiliate marketers. The
acquisition allows City Capital to leverage its
capital to mentor and foster an environment not
only for aspiring entrepreneurs, but also to serve
168
as an incubator for developing companies and
future additions to its diversified portfolio.
MIH Internet Europe B.V acquires iEurope’s
Online Marketplace
MIH Internet Europe B.V., a subsidiary of
Naspers Limited, has acquired iEurope Capital
LLC’s Vatera.hu Kft (Hungary). The lead
investor and majority owner, iEurope Fund LLC,
also confirmed that the purchase includes the
non-Hungarian operations as well. Vatera.hu is
Hungary's leading online auction and ecommerce marketplace. Voted Hungary's eCommerce Company of the Year in both 2006
and 2007, Vatera.hu was also recognized by
Red Herring magazine as one of the top 100
technology companies in the EMEA region in
2007 and 2008. The U.S.-based private equity
fund looks for opportunities in other sectors that
are benefiting from the economic convergence
of CEE countries with their more developed EU
counterparts and from the increasing consumer
affluence of Central and Eastern Europe.
Hollywood.com acquires Media by Numbers
Hollywood.com announced the acquisition of
Media by Numbers, the complete destination for
box office data information and expert analysis.
Current Media by Numbers President, Paul
Dergarabedian, will be joining the
Hollywood.com team as part of the deal. Media
by Numbers (MBN) focuses on monitoring and
providing in-depth analysis on the film industry
and, specifically, box-office trends.
ProSiebenSat.1 Group acquires Webnews.de
ProSiebenSat.1 Group has acquired a majority
interest in Webnews.de, a news platform that
pools professional news from various online
media with user-generated content. The Group
has acquired 67.6 percent of the platform, with
the option to acquire the entire portal at a later
date. With 26 free TV networks, 24 pay TV
networks, and 22 radio networks in 13 European
countries, the ProSiebenSat.1 Group is one of
the continent’s leading media corporations.
Webnews was founded in Cologne by Stefan
Vosskötter and Thorsten Lüttger in November
2006. Its goal has always been to establish a
news platform that enables users to interact in
new ways with news on the web.
Triton Distribution acquires ZTS
Triton Distribution Systems, a provider of
electronic distribution of travel inventory from
airlines, car rental companies, etc., has acquired
ZTS, a leading European travel distributor
selling both software and services related to
travel reservations and other types of bookings,
car rental, ocean cruises and tour packages.
LeBlanc Global buys Embarksites.com
LeBlanc Global, an online media and marketing
network, has acquired Embarksites.com, a
network of online media sites focused on the
retail and e-commerce sectors.
Hubert Burda Media acquires womensnet.de
Hubert Burda Media, one of Germany’s biggest
media companies, has acquired womensnet.de,
the life style portal for women, from Henkel AG
& Co. Womensnet.de registered more than 2
million page impressions and 140,000 unique
users. Besides the entrance for Germany,
Switzerland and Austria, womensnet also has a
European version published in English under
womensnet.com.
169
Buyer
BSA Satellink
Axel Springer AG
MyHeritage
Pangea Media
InventBay.com
Respond
CroudGather
RadioTime
SeLoger.com
Bestofmedia Group
GigaOM
Google
Adult Entertainment
Capital
ProSiebenSat.1
R&S Investments
Stracka Design
DriverSide Motors
Technorati
Lifetime Netowrks
Amazon
Hupert Burda Media
Allesklar.com
Comcast Interactive
Focus Magazin Verlag
Rogers Media
CraveOnline.com
Amazon
I-FREEK
GigaOM
Vance Publishing
SnagFilms
StepStone
Expedia
BigString Corporation
NowPublic
Technologies
Manufacturers’ News
StarVest Partners
TripAdvisor
eForce Media
Fairfax Digital
Amazon
Fandango
Forticom
Blue Wireless & Data
LeGuide.com SA
Target
Clear Blue Interactive
Transfermarkt.de
Kinso.com
LaughNetwork
IdeaTango, LLC
WiserAdvisor
FreePowerBoards.com
RadioSherpa
AgoraBiz.com
Computing.Net
TheAppleBlog
Tatter and Company
ComedyNet.com
Announcement Date
September 29, 2008
September 24, 2008
September 23, 2008
September 23, 2008
September 22, 2008
September 22, 2008
September 22, 2008
September 17, 2008
September 17, 2008
September 16, 2008
September 15, 2008
September 12, 2008
September 2, 2008
Deal Value
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
autoplenum.de
Hollywood.com
GolfQ.com
FairBenjamin
BlogCritics
ParentsClick Network
Shelfari
DasKochrezept.de
DatingCafe.de
DailyCandy
Jameda.de
PoolExpert
MyAmineList
AbeBooks
Nihon Intersystems
jkOnTheRun
CattleNetwork.com and
CattleStore.com
indieWIRE
Les Villages Emploi
Venere.com
Buddystumbler.com
Truemors
September 2, 2008
August 28, 2008
August 28, 2008
August 26, 2008
August 26, 2008
August 26, 2008
August 26, 2008
August 25, 2008
August 8, 2008
August 7, 2008
August 6, 2008
Aguust 5, 2008
August 4, 2008
August 1, 2008
July 30, 2008
July 24, 2008
July 17, 2008
Undisclosed
$1 Million
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$125 Million
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$2.7 Million
Undisclosed
Undisclosed
July 17, 2008
July 15, 2008
July 15, 2008
July 14, 2008
July 10, 2008
Undisclosed
$5.7 Million
Undisclosed
Undisclosed
Undisclosed
IndustryNet.com
IRON Solutions
VirtualTourist.com
Vertical Passion Media
The Weather Company
Fabric.com
Movies.com
nasza-klasa
Rev Media
dooyoo
July 8, 2008
July 2, 2008
July 1, 2008
July 1, 2008
June 25, 2008
June 24, 2008
June 23, 2008
June 11, 2008
June 9, 2008
June 4, 2008
Undisclosed
$15 Million
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$92 Million
Undisclosed
Undisclosed
170
HomeAway
SheKnows.com
Provide Commerce
Sugar
IAC Consumer
Applications & Portals
Condé Nast
Ask.com
CBS Corporation
Strands
Comcast Corporation
SheKnows.com
Buzznet
CraveOnline Media LLC
SupportSoft
AOL
CondeNet
AtomicOnline
Radio One
Alternative Media
Initiative
Buzznet
3BILL
Jupitermedia
Corporation
LiveVideo.com
Break Media
3BILL
StepStone
onTargetjobs
Preservation Sciences
Amazon.com
GoIndustry PLC
Ticketmaster
Zazzle
Mountain Reservations
Ticketmaster
Banks.com
Vast.com
Monster Worldwide
EscapeHomes.com
ChefMom
Red Envelope
StarBrand Media
StarNet Interactive
June 4, 2008
May 28, 2008
May 27, 2008
May 20, 2008
May 19, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Ars Technica
Lexico Publishing Group
CNET Networks
NetworthIQ
Plaxo
PregnancyandBaby.com
Absolute Punk
HockeysFuture and
HFBoards
YourTechOnline
Fleaflicker
SFO*Media
theFashionSpot
Community Connect
Rethos
May 19, 2008
May 15, 2008
May 15, 2008
May 15, 2008
May 14, 2008
May 14, 2008
May 6, 2008
May 5, 2008
Undisclosed
Undisclosed
$1.75 Billion
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
May 5, 2008
April 26, 2008
April 24, 2008
April 15, 2008
April 10, 2008
April 10, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$38 Million
Undisclosed
Stereogum
Faces.com
eStockMusic.com
April 4, 2008
March 11, 2008
March 11, 2008
Undisclosed
Undisclosed
Undisclosed
Revver.com
Wall Street Fighter
profileheaven.com
Webjobb AS
RegionalHelpWanted.com
March 4, 2008
March 4, 2008
February 27, 2008
February 19, 2008
February 12, 2008
EFUEL Network
Audible.com
DoveBid
GET ME IN!
Goodstorm.com
VRGateway
TicketsNow
MyStockFund.com
Adaptive Real Estate
Services
Affinity Labs
February 8, 2008
January 30, 2008
January 29, 2008
January 29, 2008
January 24, 2008
January 21, 2008
January 15, 2008
January 10, 2008
January 9, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
(Rumoured at $100M)
Undisclosed
$300 Million
$35.1 Million
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
January 4, 2008
Undisclosed
171
IT Services and BPO
IT Services and BPO
172
IT Services and BPO
M&A spending in the IT services sector this year dropped by more than half from 2007. As we wrapped
up the year, we hit the lowest point of that yearlong downtrend for IT services deals, which means that
2009 is likely to be a challenging year. If this trend is going to turn around in 2009, it will likely be up to the
industry leaders. With financial buyers missing in action, it will be the strategic transactions that make or
break the M&A deal flow in 2009. We expect that more deals like Hewlett-Packard/Electronic Data
Systems will happen in 2009.
Services operations strove to broaden skill bases and vertical expertise, extend geographic reach
especially into emerging markets, and acquire customer relationships. Changes to customer
requirements and the fact that companies increasingly prefer to work with as few IT partners as possible
are creating ever-tougher global competition for IT Services providers. This competition is particularly
evident between IT consulting and service providers, but can also be seen between national and regional
providers. The result is a clear consolidation of the market and difficult times ahead for the smaller IT
services firms.
As we look at the IT M&A trends from 2008, we are faced with a bittersweet reality. Deal volume was up
while the multiples for this sector took a sharp decline. As revenue multiples only moved from 0.85x in
Q1, to 0.70x in Q4, the more painful multiples to look at are those of EBIDTA – the primary valuation
metric for IT Services. Coming off a successful high in 2007, EBIDTA multiples in Q1 were trading at
12.80x. By the end of Q4 we saw numbers get chopped to an average of 5.36x.
Where we go in 2009 will be greatly dependent on:
1. The contract models of the larger IT firms
2. The strategic positioning of the smaller firms
3. The immediate effects of global, national and regional political initiatives
4. The various catalysts for a deeper consolidation cycle.
1. Just as subscription and SaaS models have taken hold in the software arena, IT vendors will also be
adjusting their price and contract methods to reflect the pay-as-you-go model which makes better use of
resources and cash during a volatile market. Whereas most of the previous contracts were signed under
a fixed price/output scenario, IT firms - particularly those from India expect these new strategies to help
incentivize sales and keep development projects offshore.
2. Meanwhile, the smaller, more flexible IT firms (often near shore) will be leveraging against India’s
increase in standard developer wages coupled with an economic situation that will be less conducive to
spending on new projects, but more conducive to integration and management of processes,
applications, and platforms. As the small firms become “mid-sized”, expect the acquisitions to continue
as the larger IT companies try to build out their offerings with vertical expertise and regional presence.
3. We are still unsure as to what the Obama effect will be on the offshore model. Promises from the new
president mean that major tax incentives and corporate compensation will be introduced to keep
development and integration on US soil. Generally speaking, significant enactments like this tend to have
a ripple effect through Europe – assuming this trend catches-on, there may be some interesting changes
in IT sourcing over the next 18-24 months.
4. As is the case of any depression, fortunes will be lost and won. Last week’s meltdown of Satyam is
one of many we expect to be revealed during the months (daresay, “years”) ahead. When a major
reputable player dissolves, it creates tremendous opportunity for competitors (near and far) to acquire
resources, expertise, client base, and regional footprint. We expect the consolidation cycle to continue…
while some deals will be made out of desperation, others will succeed in remaining strategic.
173
IT Services and BPO Valuations
Stock
Symbol
ACN
ACS
BGPT
CAI
GIB
CBR
CSC
PER
SAY
WIT
Company
Accenture Ltd.
Affiliated Computer Services Inc.
Bearingpoint Inc.
CACI International Inc.
CGI Group Inc.
CIBER Inc.
Computer Sciences Corp.
Perot Systems Corp.
Satyam Compter Services
Wipro Ltd.
Stock
Market Enterprise
Price
Value
Value
$32.79
$19,920.0
$16,900.0
$45.95
$4,480.0
$6,350.0
$1.35
$6.0
$653.3
$45.09
$1,350.0
$1,860.0
$7.80
$2,410.0
$2,630.0
$4.81
$289.0
$417.3
$35.14
$5,320.0
$8,170.0
$13.67
$1,650.0
$1,520.0
$9.04
$3,040.0
$1,890.0
$8.13
$11,830.0
$11,770.0
Sector
IT&BPO
IT&BPO
IT&BPO
IT&BPO
IT&BPO
IT&BPO
IT&BPO
IT&BPO
IT&BPO
IT&BPO
Trailing Multiple
P/E
EV/EBITDA
EV/S
11.75 x
4.69 x
0.66 x
13.02 x
5.83 x
1.01 x
N/A
N/A
0.19 x
16.05 x
8.52 x
0.74 x
10.54 x
5.57 x
0.87 x
9.43 x
5.36 x
0.35 x
5.97 x
3.20 x
0.47 x
12.66 x
4.44 x
0.54 x
7.35 x
3.96 x
0.91 x
17.30 x
12.44 x
2.46 x
11.75 x
5.36 x
0.70 x
Forward Multiple
P/E
EV/S
10.72 x
0.68 x
10.84 x
0.91 x
N/A
0.21 x
13.50 x
0.65 x
9.18 x
0.75 x
8.44 x
0.34 x
8.27 x
0.47 x
13.02 x
0.53 x
5.72 x
0.66 x
13.11 x
1.81 x
10.72 x
0.66 x
IT Services and BPO
IT Services
EV/EBITDA
EV/S
12.80 x
0.85 x
6.92 x
0.89 x
6.50 x
5.36 x
0.80 x
0.70 x
Q1
Q2
Q3
Q4
174
M&A Transactions
IT Services and BPO Transactions
PAN India Corp Ltd acquired Neat
Developers
PAN India acquired Neat Developers Ltd.,
provider of information technology services. The
company is headquartered in India. PAN India
Corp Ltd, based in New Delhi, India, provides
information technology services. It also develops
computer software applications.
consultancy Telindus Sweden AB from Telindus
NV. Ementor, headquartered in Oslo, Norway,
is a leading Nordic and Baltic provider of IT
infrastructure services and products. The
company has over 4,300 employees in Norway,
Denmark, Sweden, Finland, Estonia,
Latvia, Lithuania and Russia and has annual
revenues of approximately NOK15 billion.
Deal Value: $ 1.3 Million (Cash)
Onyx acquires Dundas
CSC acquires Object Builder Software
CSC acquired Object Builder Software (OBS), a
Bulgarian information technology (IT) services
firm. The all-cash acquisition expands CSC's
global delivery capabilities and complements the
company's network of lower-cost centers in
Eastern Europe, providing clients with expanded
industry vertical expertise, time zone coverage,
and technical and language skills. The addition
of OBS expands CSC's financial services and
high technology capabilities in Europe, offering
clients a stable workforce with low turnover and
competitive hourly rates. Under the terms of the
agreement, all OBS employees are expected to
transfer to CSC, providing software development
and systems integration support to CSC clients
in five languages, including English, French,
German, Russian and Bulgarian. Bulgaria's
reputation as a low-cost Eastern European
country strategically positioned to serve both
Western and Eastern Europe enables OBS to
operate as a nearshore delivery center for
CSC's European clients. The OBS acquisition is
part of CSC's strategy to expand the company's
global network by opening centers in locations
previously untapped by competitors.
Onyx (UK) has acquired Dundas IT, a specialist
IT firm providing managed IT services for over
100 customers in Edinburgh with a professional
service focus. The acquisition builds upon
Onyx’s existing presence in Scotland, with
offices already in Falkirk and Glasgow, and a
data center and work place recovery facility in
Glasgow. Onyx Group has a trusted relationship
with its 3,000 customers and the deal
strengthens the company’s links with the city’s
financial markets and professional services
companies, bolstering services on offer and
enhancing its current skills base. The deal is the
third acquisition for Onyx Group this year,
following a takeover of Scotland’s Campbell Lee
Plc and Newcastle Computer Services in the
North East. It falls in line with Onyx’s growing
national remit supporting customers throughout
the UK from their three Scottish bases, two
offices in North East England and a further site
in Slough. The company also manages data
centres in Newcastle, Middlesbrough, and
Glasgow, with workplace recovery facilities in
Newcastle and Glasgow and an international
base out in Dubai.
Trifork AS acquires Nordija AS
Ementor ASA acquires Telindus Sweden AB
Norwegian IT infrastructure provider Ementor
ASA said that its Swedish arm, Atea, has agreed
to acquire the business activities of the ICT
Danish software developer Trifork AS has
agreed to acquire the consulting operations of
Nordija AS in an all-shares deal. The acquired
operations will form the new company Trifork
175
Projects Copenhagen, in which Trifork will have
a majority holding of 51% and Nordija's
shareholders 49%. The new company will
initially have eight employees. Nordija said that
the transaction will enable it to focus on its core
business of developing IPTV software. Trifork,
headquartered in Aarhus, Denmark, develops
and supplies software and IT services for the
financial and public sectors. The company has
80 employees and expects to achieve a turnover
of DKK90-100 million in 2008.
contrast to ITECs focus on vendors such as
Cisco, Huawei, Avaya, Riverbed and Tandberg.
Before the deal ITEC outsourced its legacy
datacoms work to Solutions4Comms but after
the deal wants to present a futuristic model with
a centralized group of engineers carrying out
proactive services such as remote network
management and monitoring.
eLandia DESCA Subsidiary to acquire Netxar
Technologies
EQT Partners and ATP Private Equity
Partners to acquire KMD A/S
eLandia, a technology enabler of emerging
markets subsidiary DESCA, a technology
integration services company, is acquiring
Netxar Technologies, a technology consulting
and integration company specializing in the
design, implementation and management of
business-critical network and information
technology solutions. Netxar’s twelve month
trailing revenues were approximately 12 million.
The transaction will also provide DESCA the
ability to further consolidate its business
operations in the technology services area with
a comprehensive suite of solutions in the
Caribbean region, including Puerto Rico and the
Dominican Republic. Netxar operations,
including its product portfolio, services and
existing offices will be integrated into DESCA.
EQT Partners and ATP Private Equity Partners
have agreed to acquire KMD A/S, a Danish
provider of IT solutions to local municipalities.
EQT will hold an 85% stake, while ATP will hold
the remainder. The transaction is to be funded
with 50% leverage, provided by Danske Bank,
Nordea, Nykredit, FIH and ATP. KMD is a
leading Danish provider of IT solutions. KMD
develops complex and efficient solutions, mainly
for Danish municipalities but has increasingly
expanded its business to include the state and
corporate markets. KMD has some 3,000
employees and in 2007 generated revenues in
excess of DKK 3.2 billion. EQT and ATP
consider KMD to be a very attractive business
with a unique market position as a stable
provider of quality IT solutions to Danish
municipal and state clients. Against this
background, and with the company’s platform in
the private sector, KMD is well prepared to
consolidate its position as one of Denmark’s
leading IT businesses.
ITEC Intelligent Services acquires
Solutions4Comms
The channel support services sector has
witnessed further consolidation, with ITEC
Intelligent Services acquiring the assets and
customer base of datacomms support firm
Solutions4Comms. The purchase will add about
20 resellers, systems integrators and distributors
to ITEC’s client base. Solutions4Comms worked
primarily in the legacy datacoms field with skills
around vendors such as Lantronix. This is in
Serco Group acquires InfoVision
In a first-of-its-kind acquisition of an Indiafocused BPO by a foreign company, the UKbased $6 billion Serco Group has bought out
Gurgaon-based BPO major InfoVision. The deal
marks the entry of Serco Group, a business
services company, into India. The company has
bought a 60% stake and will acquire the rest
over the next couple of years. InfoVision group
has about 10,000 personnel and 60 clients.
Serco, which offers a whole spectrum of support
services but did not have a presence in the BPO
space prior to the InfoVision acquisition, plans to
have a workforce of 20,000 in the next two to
three years. The InfoVision buyout by Serco
comes close on the heels of the $505 million
TCS buyout of Citigroup Global Services, the
captive BPO arm of Citi in India, and WNS
Holdings acquiring Aviva Global Services, the
176
outsourcing arm of insurance major Aviva, for
$228 million.
AETEA acquires ecipient Technologies
AETEA Information Technology, Inc. is acquiring
ecipient Technologies. ecipient provides
information technology consulting services in the
areas of enterprise application development,
systems integration, enterprise reporting and
analytics to leading commercial organizations,
as well as federal, state and local governments.
ecipient offers extensive domain expertise in the
pharmaceutical manufacturing space, providing
customized applications for clinical, regulatory,
research and development needs as well as
portfolio management. The company is a
leading provider of web-based application
development solutions in Microsoft .Net,
Java/J2EE and other leading technologies using
its "best fit" technology method. By combining
ecipient's expertise with that of AETEA, the
company will offer enhanced capabilities,
particularly in the area of project-based
solutions, to support their customers and
projects.
INX acquires NetTeks Technology
Consultants
INX, Inc. has acquired the operations of NetTeks
Technology Consultants, Inc., a network
consulting organization. NetTeks, founded in
1997 with a focus on network solutions, has built
a strong reputation for delivering highly complex
network solutions that are tailored to the
business needs of their more than 200 clients.
The company, an award winning Cisco Silver
and Managed Services Certified Partner, was an
early entrant in the Cisco Unified
Communications market and has a great depth
of experience in architecting, deploying and
supporting Unified Communications solutions.
INX is making a significant commitment to its
presence and capability in the New England
region. This acquisition, coupled with its existing
Boston operations, will create one of its largest
regions.
Flarium Ltd and FeatherySoft Company to
merge
Flarium Ltd. (Canada) and FeatherySoft
Company announced a merger agreement to
create a new international company aimed at
delivering IT products and services. The merged
company will conduct business under the
Flarium brand and be headquartered in
Vancouver, Canada. Before merging, both
Flarium Ltd. and FeatherySoft operated in the IT
industry but had different spheres of activities.
Flarium Ltd. specialized in providing IT services
like localization, e-store solutions and
outsourcing. FeatherySoft developed highquality multimedia applications and other
software products. Combining their operations
not only gives the possibility to expand
operations and the range of activities, it also
helps to create a worldwide network of
representatives and resellers to provide
customers better support and service.
Comarch acquires SoftM
One of the leading Polish IT-companies, the
stock-listed Polish IT-Group Comarch S.A.,
Krakow (Poland), with around 3,000 employees,
acquires through its 100% German subsidiary
Comarch Software AG, Dresden, a majority in
SoftM Software und Beratung AG, Munich. The
intention of this deal, which is supported by the
management board as well as the supervisory
board of SoftM AG, is to develop Comarch and
SoftM into a leading supplier of IT solutions for
medium-sized businesses throughout Europe. In
total, Comarch group will have approximately
3,500 employees and sales of more than €200
million.
CoroWare to acquire LTC International
CoroWare, Inc., a systems and robotics
technology integrator, is acquiring LTC
International, Inc., an IT services and
telecommunications consulting firm. LTC
International's business consulting expertise is a
strategic and logical complement to CoroWare's
177
technical consulting capabilities. This merger will
provide the combined customers with a more
complete range of services and solutions and
will offer both companies accelerated growth
potential. CoroWare -- through its subsidiary
CoroWare Technologies -- and LTC
International plan to grow their operations by
offering business and technical consulting
services to their combined customers and by
addressing the need for telepresence solutions
by small- to medium-sized businesses and
enterprise customers.
Satyam Computer Services acquires
Motorola’s software development center
Satyam Computer Services has acquired
Motorola’s captive software development centre
(SDC) in Malaysia. Following the acquisition, all
the 128 Motorola employees at the centre have
become Satyam staff. “They will be doing what
they have been doing,” Mr T.R. Anand, Head of
TIMES (telecom, infra, media, entertainment and
semi-conduct) vertical of Satyam, told Business
Line. “This will help Satyam in acquiring
capabilities in the areas like mobility and
strengthen our presence in Malaysia,” he said.
Caperio Holding AB acquires Crux Holding
AB
Swedish IT company Caperio Holding AB said
that it has agreed to acquire the IT consulting
company Crux Holding AB. Crux focuses on
providing consulting services within
communication, server/storage and telephony.
The company has 20 employees in Orebro
and Stockholm and is expected to achieve a
turnover of kr40 million in 2008. Caperio,
headquartered in Stockholm, helps small and
mid-sized Nordic companies to manage their IT
purchasing operations. Following the acquisition,
the combined company will have some 65
employees and an annual turnover of kr 385
million (US$49 million).
Vault Technology to acquire Presentation
Concepts
Vault Technology, Inc. is acquiring Presentation
Concepts Corporation. Founded in 1997, PCC is
a multimedia services company specializing in
audiovisual systems integration and IT services.
Their products include large format displays,
projection equipment, interactive whiteboards,
control systems, digital signage systems, and
video conferencing systems. PCC also
specializes in e-mail, networking and web
services to small and medium size businesses
providing enterprise level products and services,
including Content Management Systems, MS
Exchange, Mobile Messaging, and Web Portals.
PCC has demonstrated consistent growth and
has developed an outstanding reputation in the
audiovisual market. Their strong management
team as well as their growth plans makes them
an excellent foundation for Vault’s roll-up of A/V
integrators.
InCode’s Management Buyout
InCode has successfully bought out its owner of
the last two years, VeriSign, allowing the
company to return to independence. VeriSign
bought InCode in 2006 for $52 million.
Alpheon acquires Network Management
Partners
IT services company Alpheon Corp. has
acquired Raleigh competitor Network
Management Partners.This is a significant
milestone for Alpheon; the acquisition of NMP
enables Alpheon to add a roster of valuable
accounts to its customer base, continues to build
on its market leadership position in the
Southeast, and serves as a catalyst for future
acquisitions and partnerships. Alpheon, which
has about 25 workers, says it gets most of its
revenue from IT services for physicians’
practices.
178
CRM manager to acquire Redxlerant
CRM manager, an on-demand software
consulting firm, is acquiring Redxlerant Inc., a
leading provider of CRM consulting and training.
An authorized salesforce.com consulting
partner, Redxlerant provides business and
technology consulting and education services in
the areas of CRM and sales and marketing
support, helping clients plan, acquire, implement
and integrate CRM software into their business.
The merger of these two leading salesforce.com
partners will enable CRM manager to become a
national Software-as-a-Service consulting and
integration firm.
ec4u acquires Siebel business of CIO
Solutions GmbH
ec4u, a market leader in the German-speaking
regions for services and software in the fields of
CRM and BCM, has acquired the Siebel
business of Berlin-based CIO Solutions GmbH.
CIO Solutions offers customers of all industries
a comprehensive range of services in the areas
of CRM, e-Business, and IT Security. All the
employees of Siebel CRM unit will be
transferred to ec4u. Ec4u has offices in
Karlsruhe, Munich, Vienna, and Zurich and 160
employees.
CSG acquires Commander Managed
Services Arm
IT services company CSG has snapped up the
Infrastructure managed services arm of
Commander via an agreement with the
collapsed company's receivers, McGrathNicol.
The ASX-listed Commander collapsed in
August, with $300 million of debts on its books.
Receiver McGrathNicol decided to split the
company in two — offering Commander's
recurring revenue-generating managed services
arm separately to its far less profitable
hardware, telecoms and IPEX business
divisions. Under the deal, CSG will gain access
to the $60 million of managed services contracts
Commander's Volante arm held prior to its
collapse. These include deals with seven federal
government agencies. The deal doubles the size
of CSG’s existing managed services business
and moves it into the Canberra and South
Australian Government markets.
Neilsoft buys Cadforce
Neilsoft Ltd., an India-based provider of
outsourced engineering and tech services, has
acquired Cadforce Inc., a Marina del Rey,
California-based outsourcer of CAD drafting
services for architects.
Announcement Date: October 24th, 2008
NetSol Technologies to buy Ciena Solutions
CSG acquires Advanced Data Concepts
NetSol Technologies Inc. has entered into an
agreement to acquire the software consulting
firm Ciena Solutions LLC. Ciena Solutions offers
consulting and staffing services based on the
SAP application suite. The company has also
developed its own software to work with the SAP
suite. NetSol said payment will be deferred over
four years and based on an earn-out formula
linked to Ciena's performance, with the final
transaction subject to customary closing
conditions.
CSG, a leading provider of Management and
Information Technology consulting services, has
acquired the assets of Advanced Data
Concepts, Ltd. (ADC), a Chicago-based
consulting firm specializing in public sector IT
services. Founded in 1997, CSG has
established itself as a leading provider of
innovative information technology solutions
throughout the U.S. This acquisition is a great fit
for CSG. It contributes new high-profile clients,
strong sales capability, and quality delivery
services to its core Government Solutions
practice.
179
itelligence AG acquires SAPCON
itelligence AG, a full-service IT provider for SAP,
has acquired a 51% share in the Czech SAP
consulting house, SAPCON. With around 40
employees, SAPCON, established in Brno, the
Czech Republic's largest industrial city, primarily
serves companies in the industrial, energy and
telecommunications sectors. SAPCON's
consulting focus is SAP and document
management systems. itelligence can acquire
the remaining 49% of the shares in SAPCON via
call options over the coming years. With this
step, itelligence is strengthening its orientation
as an internationally leading SAP consulting
house especially in Central and Eastern Europe.
SAPCON and itelligence will work closely
together in the future in this strategically
important market.
Raiffeisen Informatik GmbH to acquire PCWare Information Technologies AG
(total revenue of more than 59 million euro),
gained Imtech ICT positions in the UK, Belgium
and Switzerland and strengthened its position in
Germany. While undisclosed, the acquisition
price amounts to 6.5 times and will be paid in
cash.
Deal Value: $16.8 million (Cash)
Idhsoft has acquired Enterpulse
Idhasoft, a Mubai-based IT services company,
has acquired Enterpulse, a U.S.-based company
providing business process management-related
consulting services. The acquisition will enable
Idhasoft to consolidate its service offerings in
content management and the BPM space.
Idhasoft is a company providing IT services in
the retail banking, financial services, insurance,
manufacturing and healthcare domains.
Logica Norge acquires Aureus Data
PERUNI Holding GmbH of Austria, a unit of
Raiffeisen Informatik GmbH, is acquiring PCWare Information Technologies AG, a Leipzigbased provider of information and
communication technology services. PC-Ware is
one of the leading manufacturer-independent
ICT service providers in Europe. Its core
business is software licensing, consulting on
licensing agreements and Software & IT Asset
Management. The company is one of only 5
Microsoft LARs in the entire EMEA region
(Europe, Middle East, and Africa) and holds the
LAR status in China as well.
Imtech NV to acquire ILS GmbH
Imtech, a technical services provider in Europe,
announced that it is acquiring the Austrian
company, ILS GmbH. ILS is one of the
strongest ICT players as well as the biggest IBM
partner in Austria. Imtech sees the acquisition as
an important step forward. On the one hand, this
strengthens its ICT position in Europe and on
the other hand, it enables it to gain a basic
position in Austria, one of the countries in
Europe in which it is striving for a strong
strategic position. Acquisitions earlier this year
Logica Norge AS, a unit of Logica PLC, acquired
Aureus Data AS, an Oslo-based provider of
computer services, from Reitan Handel AS, a
Reitan Narvesen ASA subsidiary. Logica Norge
(formerly WM Data) is an IT Services company.
Aureus Data delivers applications and services
primarily to the retail industry.
Tata Consultancy Services acquires
Citigroup Global Services Ltd
Tata Consultancy Services, a leading IT
services, business solutions and outsourcing
firm, and Citigroup Inc., a leading global financial
services company, announced that they have
reached an agreement for TCS to acquire all of
Citi’s interest in Citigroup Global Services
Limited (CGSL), the India-based captive
business processing outsourcing (BPO) arm of
Citi. In addition to the sale, Citi has signed an
agreement for TCS to provide, through CGSL,
process outsourcing services to Citi and its
affiliates in an aggregate amount of US$2.5
billion over a period of 9.5 years. CGSL is one of
the largest providers of business processing
outsourcing services within the Banking and
180
Financial Services sector, providing end-to-end
process management across the BFS spectrum
and a broad array of services to Citi’s consumer,
corporate and global wealth management
businesses worldwide. CGSL has more than
12,000 employees located in India and expects
to generate revenues of approximately $278
million in 2008.
Argos Soditic acquires LEXSI
Argos Soditic, a private equity partnership, has
acquired a majority stake in LEXSI, a French
information systems security consulting firm.
The deal was structured as a management
buyout.
Dimension Data acquires majority in
Sistemas Redes e Comunicacoes
Dimension Data PLC of South Africa acquired a
51% interest in Sistemas Redes e
Comunicacoes Ltda, an Angola-based provider
of information technology services.
Buyer
Carrefour SA
Softline AG
Bechtle AG
Charteris Plc
Zanett
Ciber
PricewaterhouseCoopers
Providence Equity and
Ayala Corp.
Telvent
BPO Management
Services
Cambridge Technology
Enterprises
Sumisho Computer
Systems
Infosys
iSoftStone Information
Service Corporation
Emtec Global Services
Target
Cross Systems Co SA
Prometheus GmbH
Netzwerk Beratung
Informationssyteme and
Wrede Systemhaus
Gmbh
SIG Consulting Ltd
PS GoLive
Iteamic
Entology
eTelecare Global
Solutions
DTN Holding Company
HealthAxis
Announcement Date
September 29, 2008
September 26, 2008
September 24, 2008
Deal Value
$6.5 Million
Undisclosed
Undisclosed
September 23, 2008
September 22, 2008
September 22, 2008
September 19, 2008
September 19, 2008
Undisclosed
Undisclosed
Undisclosed
Undisclosed
$290 Million
September 16, 2008
September 9, 2008
$445 Million
Undisclosed
Protégé Software
Services
B4 Consulting
September 7, 2008
Undisclosed
September 2, 2008
Undisclosed
Axon plc
August 25, 2008
Shanghai Jiefeng
Information
Technologies
eBusiness Applications
August 14, 2008
$753.1 Million
(Pending competitive
offer)
Undisclosed
August 13, 2008
Undisclosed
181
2e2
Mural Consulting
Global BPO Services
NTT Data Corporation
Ness Technologies
Dynamics Research
Corporation
Allgeier Holding AG
Capgemini
Axon Group
Luxoft
Mediacontech SpA
Open Interface
Imtech
HCL Technologies
GOZIRRA
Technology Integration
Group
Allied Digital
OneNeck IT Services
Corporation
Consonsa ERP
Ensynch
SunGard
Dataskill
Maxima Holdings
British
Telecommunications
HiQ
CompuCom Systems
VisionIT Group
Barclays Private Capital
CDC Software
Bull
SQS Software Quality
Systems
UTEK Corporation
Cognizant
TechTeam Global
Ultra Electronics
Holdings
Solutions, and Aveeva
Netstore
OnDemand Solutions
Stream Holdings
Cirquent GmbH
Logos AS
Kadix Systems
TOPjects AG
Getronis PinkRoccade
Business Applications
Services BV
Consulting Principles
ITC Networks
Delta Tre Informatica
SpA
Media Knowledge
Industrial Co Ltd
Fit IT, Ebit and Thinking
Solutions
Liberata Financial
Services
OG2
Entre Business
Technology Group
En Pointe’s IT Services
Business
Ensynch’s Managed
Hosting Business Unit
Automated Design
Systems’ Assets
eBI Solutions
Delphi Technologies Ltd
Silicon Space LLC
DXI Networks
Stemmer GmbH and
SND GmbH
TSG Test Solutions
Getronics’ North
American Operations
Drago Solutions
Computerlinks
Dynamic Business
Consultants
CSB Consulting
Validate Technology
Svenska AB
Innovaro Limited
Strategic Vision
Consulting
Onvaio, LLC
ProLogic
August 12, 2008
August 5, 2008
August 4, 2008
August 1, 2008
July 31, 2008
July 30, 2008
$112 Million
Undisclosed
$200 Million
Undisclosed
Undisclosed
$42 Million
July 29, 2008
July 25, 2008
Undisclosed
$399.8 Million
July 23, 2008
July 22, 2008
July 21, 2008
$3.4 Million
Undisclosed
$57.8 Million
July 18, 2008
$0.51 Million
July 16, 2008
Undisclosed
July 16, 2008
Undisclosed
July 14, 2008
July 11, 2008
Undisclosed
Undisclosed
July 9, 2008
$25 Million
July 7, 2008
Undisclosed
July 7, 2008
Undisclosed
July 7, 2008
July 2, 2008
July 1, 2008
July 1, 2008
June 26, 2008
Undisclosed
Undisclosed
Undisclosed
$17 Million
Undisclosed
June 25, 2008
June 23, 2008
$9.1 Million
Undisclosed
June 22, 2008
June 17, 2008
June 16, 2008
$6.3 Million
$162.5 Million
Undisclosed
June 16, 2008
June 11, 2008
Undisclosed
$25.4 Million
June 11, 2008
June 10, 2008
$3.7 Million
Undisclosed
June 5, 2008
June 3, 2008
Undisclosed
$58 Million
182
Deloitte
China Eastsea Business
Software Ltd.
GlassHouse
Technologies
ComVest Investment
Partners III LP
Capgemini
Accenture
Mascon Global
GlobalLogic
HP
Perot Systems
QSGI
Perot Systems
NetStar-1
Choksh Infotech Ltd.
Accenture
EPAM Systems
EMC
3i
Cidron Services Oy
Alcatel-Lucent
EMC Corporation
Brocade
NetStairs.com
iSoftStone Information
Service Corporation
INFINITE Software
Affilliated Computer
Services
Birchman Group
HiQ International
EuroConnXion Holdings
Mindteck Ltd.
Rolta India Ltd.
Softronic AB
EDB Business Partner
Softchoice Corporation
Solbourne Computer
Infa Hong Kong Group
Ltd.
TPP Group
June 3, 2008
June 2, 2008
Undisclosed
$3.7 Million
June 2, 2008
Undisclosed
Pomeroy IT Solutions
May 22, 2008
Undisclosed
Advantage Consulting
Group’s Assets
ATAN
Ebusinessware
Dalian 3CIS
Electronic Data
Systems Corp.
Original Solutions
Contemporary
Computer Services
HighQ-IT GmbH
AVIEL Systems
AJel Tech India Pvt.
Ltd.
SOPIA Corporation
B2BITS Corp.
Conchango plc.
Civica
TietoEnator
ReachView
Technologies
Infra Corporation Pty
Strategic Business
Systems
GigSoft
Akona Consulting
May 21, 2008
Undisclosed
May 19, 2008
May 15, 2008
May 13, 2008
May 12, 2008
Undisclosed
$35 Million
Undisclosed
$12.6 Billion
May 12, 2008
May 7, 2008
Undisclosed
$10.6 Million
April 24, 2008
April 16, 2008
April 15, 2008
Undisclosed
Undisclosed
$343 Million
April 3, 2008
April 3, 2008
April 1, 2008
April 1, 2008
March 24, 2008
March 10, 2008
Undisclosed
Undisclosed
$84 Million
$379 Million (MBO)
$1.71 Billion
Undisclosed
March 10, 2008
March 4, 2008
Undisclosed
Undisclosed
March 4, 2008
February 28, 2008
Undisclosed
Undisclosed
February 26, 2008
February 14, 2008
Undisclosed
$67 Million
February 14, 2008
February 12, 2008
February 7, 2008
February 5, 2008
January 24, 2008
January 22, 2008
January 10, 2008
January 2, 2008
Undisclosed
$3.5 Million
$1.3 Million
$21 Million
$45 Million
$1.7 Million
$225.9 Million
$38.1 Million
Altos Technology Group
sds business services
GmbH
Beacon Technology
ACE Simulation AB
DB Systems Pty Ltd
Infotech Consulting
Broech Corporation
ISSI AB
IS Partner
Optimus Solutions
183

Corum Group End of Year 2008 MA Briefing v8

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