GEA Software MnA Update (Q3 2014)
Transcription
GEA Software MnA Update (Q3 2014)
Technology and Digital Media Investment Banking + M&A Advisory Software M&A Update Q3 2014 November 4, 2014 Generation Equity Advisors, LLC 8560 W. Sunset Blvd, Suite 500 West Hollywood, CA 90069 (310) 684-3130 TechMediaMergers.com Generation Equity Advisors is an independent investment banking and M&A advisory firm focused exclusively on the global Software, IT Services and Digital Media industry sectors. We advise buyers and sellers of companies and efficiently execute M&A transactions that help increase shareholder value. Our professionals have advised on $20+ billion in M&A transactions to date and have current relationships with software companies as well as leading private equity firms. Aaron Solganick, CEO and Founder Generation Equity Advisors, LLC +1 (310) 684-3130 [email protected] Table of Contents: Software M&A update, Q3 2014 – Page 3 Public Company Valuation Table – Page 5 M&A Transaction Highlights – Page 6 M&A Transactions, Q3 2014 – Page 7 Sources for our research and data include: S&P Capital IQ, SEC Filings, Yahoo! Finance, PwC and Company Websites. DISCLAIMER The information contained herein is of a general nature and is not intended to address the circumstances of any particular company, individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We perform our own research and also use third party research. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. This is not an offer or recommendation to buy or sell securities nor is it a recommendation to merge, acquire, sell or exit a specific company or entity. We do not hold any equity or debt position in any of the securities listed herein as of the date of this report. Generation Equity Advisors, LLC Page 2 Software M&A Update – Q3 2014 Q3 2014 HIGHLIGHTS We noted the number of software industry M&A transactions announced in Q3 slightly declined by 12% as compared to Q2 but transaction value increased 97% (almost doubled) for the period. However, both transaction volume and value were up substantially as compared to the same period 2013. While momentum continues with slightly fewer but larger deals, the third quarter experienced an unprecedented series of spin-off announcements from major technology companies that signal fundamental competitive shifts. Healthy valuations, increased cash reserves and the ability to leverage equity enabled strategic buyers to lead the way, while private equity remained active on both the buy and sell side. While third-quarter deal activity remained on a similar level as the past year, 2014 is outpacing the past 2 years in terms of both volume and value. The software sector remains the most active sector for M&A deals in 2014. The largest software M&A transactions announced in Q3 2014 were the following: SAP’s acquisition of Concur Technologies Inc., a provider of travel and expense management software solutions, for $8.3 billion and a multiple to EV/Revenue of 11.9x. Thoma Bravo’s $2.5 billion acquisition of Compuware Corp., a provider of infrastructure software solutions and services, for a multple to EV/Revenue of 3.5x and EV/EBITDA of 24.1x. Micro Focus Intl.’s acquisition of Attachmate Group for $2.34 billion and a multiple to EV/Revenue of 2.5x and EV/EBITDA of 7.5x. Q3 2014 Transaction Volume and Value • Total transaction volume in Q3 2014 declined by 12% over Q2 2014, from 496 to 437. This followed a 16% increase in Q2 2014 over Q1 2014, which represented the industry’s peak for volume throughout the past eight quarters. • Total transaction value in Q3 2014 nearly doubled over Q2 2014, from $19.7 billion to $38.8 billion. Transaction Multiples • Both the median revenue and EBITDA multiple saw a slight uptick from 2013 through the 1st 3 Quarters of 2014. • The median revenue multiple rose from 2.3x to 2.5x, while the median EBITDA multiple improved from 11.6x to 12.0x. Overall, global software M&A is on path for a record year in 2014. Software companies are cash rich, and interest rates are low. Buyers are in full force looking to acquire companies that are strategic to their business and growth initiatives. In addition, the IPO market has open its gates again in 2014 which feeds further M&A transactions. We expect the M&A environment to remain active and will continue into 2015. Software as a service (SaaS) and cloud software firms are in high demand for private equity firms because of its recurring revenue and longer term contracts. We have been in recent contact with a number of private equity firms as well as software companies that continue to express a strong interest in acquiring throughout 2014-15. There were 8 mega-deals within the technology and software sectors in excess of $1 billion during the third quarter, a slight increase compared to an average of 6 per quarter over the last 12 months. Deals in the third quarter included: Oracle’s $5.3 billion acquisition of MICROS Systems, a software solutions provider to the retail and hospitality industries. Apple’s $3 billion acquisition of Beats Electronics, an audio equipment maker and music subscription service provider. Priceline’s $2.6 billion acquisition of Open Table, an online restaurant reservation company. Analog Devices’ $2.4 billion acquisition of Hittite Microwave, a designer and manufacturer of electronic components. Facebook’s $2.3 billion acquisition Oculus VR, a virtual reality technology developer. The $1.5 billion acquisition of Aeroflex, a wireless communications solutions provider, by Cobham, the UK aerospace and defense firm. The $1.3 billion acquisition of Fusion-io, a developer of flash-based PCIe hardware and software solutions, by SanDisk. The $1.2 billion acquisition of ViaWest, a provider of colocation, cloud and managed services, by Shaw Communications, a Canadian communications company. As for October, we noted an uptick in M&A transactions announced as the Summer ended including the following: Epicor’s acquistion of QuantiSense to boost big data services and solutions for retailers. Sophos acquisition of moble security firm Mojave. Cornerstone on Demand’s acquisition of big data firm Evolv for $43m. As we close out the year, look for software deals to continue to play an active role in M&A, with enterprise software and cloud leading the way. Generation Equity Advisors, LLC Page 4 Publicly Traded Software Firms – Valution Table Enterprise Software Advent Software, Inc. [ADVS] Microsoft Corporation [MSFT] Oracle Corporation [ORCL] Pegasystems Inc. [PEGA] Red Hat, Inc. [RHT] SAP SE [SAP] TIBCO [TIBX] Stock Price Market Cap (as of 11/04) ($USD mm) EV/Revenue EV/EBITDA $34.79 $1,790 5.09 20.07 $47.57 $392,110 3.57 9.81 $39.13 $173,400 3.99 9.14 $21.74 $1,660 2.58 17.92 $59.15 $11,110 6.18 32.75 $66.92 $80,000 3.76 10.72 $23.25 $3,800 3.55 22.74 Average (Mean) Median 4.10 3.76 17.59 17.92 Banking and Financial Software CA Technologies Inc. [CA] CoreLogic, Inc. [CLGX] D+H [DH] (Canadian Dollars) Dealertrack Technologies [TRAK] DST Systems Inc. [DST] Fidelity National Information [FIS] Fiserv, Inc. [FISV] Genpact Limited [G] Jack Henry & Associates [JKHY] NCR Corp. [NCR] SS&C Technologies [SSNC] Wolters Kluwer [WKL] (Euros) Stock Price Market Cap (as of 11/04) ($USD mm) EV/Revenue EV/EBITDA $29.38 $1,307 2.62 8.36 $30.98 $2,780 3.10 15.75 $33.85 $2,711 9.77 N/A $45.61 $2,460 4.94 41.09 $98.59 $3,820 1.59 10.37 $58.23 $16,480 3.31 12.18 $69.15 $16,870 4.08 13.73 $17.43 $3,770 1.93 11.08 $60.08 $4,960 4.04 11.72 $27.66 $4,660 1.24 8.06 $49.49 $4,130 6.12 15.64 $21.40 $6,460 2.32 N/A Average (Mean) Median Software - NEC AVG Technologies N.V. [AVG] BroadSoft, Inc. [BSFT] CA Technologies Inc. [CA] CommVault Systems, Inc. [CVLT] PTC Inc. [PTC] Red Hat, Inc. [RHT] Splunk Inc. [SPLK] Stock Price Market Cap (as of 11/04) ($USD mm) EV/Revenue EV/EBITDA $17.99 $943 2.33 6.93 $22.01 $631 3.13 604.87 $29.38 $1,307 2.62 8.36 $45.37 $2,080 2.73 18.95 $38.01 $4,500 3.39 14.33 $59.15 $11,110 6.18 32.75 $64.29 $7,710 18.80 (46.06) Average (Mean) Median Communication Software Cvent, Inc. [CVT] j2 Global [JCOM] Nuance Communications [NUAN] 5.60 3.13 HR/HCM Software Cornerstone OnDemand [CSOD] Workday Inc. [WDAY] 5.01 4.66 17.39 17.39 Stock Price Market Cap (as of 11/04) ($USD mm) EV/Revenue EV/EBITDA $47.57 $392,110 3.57 9.81 $39.13 $173,400 3.99 9.14 $63.57 $39,350 8.57 13,130 $66.92 $80,000 3.76 10.72 Average (Mean) Median E-Commerce Demandware, Inc. [DWRE] Digital River Inc. [DRIV] 4.97 3.88 (77.39) (77.39) Security Software AVG Technologies N.V. [AVG] CA Technologies Inc. [CA] Check Point Software [CHKP] FireEye Inc. [FEYE] Fortinet, Inc. [FTNT] Imperva, Inc. [IMPV] Progress Software Corporation [PRGS] Red Hat, Inc. [RHT] Symantec Corp. [SYMC] 7.87 7.87 Business Intelligence & Analytics Informatica [INFA] MicroStrategy Inc. [MSTR] Teradata Corporation [TDC] (45.82) (45.82) Stock Price Market Cap (as of 11/04) ($USD mm) EV/Revenue EV/EBITDA $17.99 $943 2.33 6.93 $29.38 $1,307 2.62 8.36 $73.84 $13,830 8.59 15.77 $34.25 $5,100 16.97 (16.38) $26.42 $4,340 5.06 43.99 $42.09 $1,090 6.17 (18.51) $26.00 $1,300 3.18 10.30 $59.15 $11,110 6.18 32.75 $24.99 $17,250 2.31 7.96 Average (Mean) Median 5.93 5.06 10.13 8.36 Stock Price Market Cap (as of 11/04) ($USD mm) EV/Revenue EV/EBITDA $35.38 $3,910 3.18 16.99 $158.41 $1,790 2.40 86.43 $41.72 $6,470 2.11 9.09 Average (Mean) Median 2.56 2.40 Data and Stock Prices as of November 4, 2014 and are in US Dollars unless noted. EV = Enterprise Value = Market Capitalization + Debt - Cash EBITDA=Earnings Before Interest, Taxes, Depreciation & Amortization Generation Equity Advisors, LLC 3,289.92 10.27 Stock Price Market Cap (as of 11/04) ($USD mm) EV/Revenue EV/EBITDA $58.97 $2,130 14.43 (105.45) $24.65 $731 1.31 13.81 Average (Mean) Median 66.36 37.50 Stock Price Market Cap (as of 11/04) ($USD mm) EV/Revenue EV/EBITDA $33.45 $1,790 8.09 (48.76) $95.51 $17,760 26.69 (106.02) Average (Mean) Median 14.80 11.95 91.45 14.33 Stock Price Market Cap (as of 11/04) ($USD mm) EV/Revenue EV/EBITDA $25.15 $1,060 6.96 150.34 $54.48 $2,600 4.66 11.23 $15.52 $4,940 3.41 37.50 Average (Mean) Median CRM Microsoft Corporation [MSFT] Oracle Corporation [ORCL] Salesforce.com, Inc. [CRM] SAP SE [SAP] 3.76 3.21 Page 5 37.50 16.99 M&A Profiles TIBCO Software Acquired By Vista Equity Partners Palo Alto, Calif., September 29, 2014 - TIBCO Software Inc. (NASDAQ: TIBX), a global leader in infrastructure and business intelligence software, announced that it has entered into a definitive agreement to be acquired by Vista Equity Partners, a leading private equity firm focused on software, data and technology-enabled businesses. Under the terms of the agreement, TIBCO stockholders will receive $24.00 per share in cash, or a total of approximately $4.3 billion, including the assumption of net debt. The purchase price represents a 26.3% premium to the closing price of TIBCO common stock on September 23, 2014, one day prior to public reports that multiple parties were competing to acquire TIBCO. The total enterprise value of the transaction represents more than 18 times TIBCO’s earnings before interest, depreciation and amortization (EBITDA) for the 12 months ending August 31, 2014. The transaction, which is expected to close in the fourth calendar quarter of 2014, is subject to approval by TIBCO stockholders, regulatory approvals and other customary closing conditions. There are no financing conditions associated with the proposed agreement. Concur Technologies Acquired by SAP WALLDORF, Germany and BELLEVUE, Washington - SAP SE (NYSE: SAP) and Concur Technologies, Inc. (NSDQ: CNQR) today announced that SAP’s subsidiary, SAP America, Inc., has entered into an agreement to acquire Concur. With more than 23,000 customers, 4,200 employees and 25 million active users in over 150 countries, Concur is the leader in the multi-billion market for travel and expense (T&E) management software. With Concur, SAP’s business network – the world’s largest – will transact more than US$600 billion annually, deliver frictionless commerce across more than 25 different industries and address annual corporate travel spend of US$1.2 trillion worldwide. The per-share purchase price of US$129 represents a 20% premium over the September 17 closing price, a 21% premium over the one month volume weighted average price per share and an enterprise value of approximately US$8.3 billion. The transaction will be funded from a credit facility agreement of up to €7 billion to cover the purchase price, target debt refinancing and acquisition-related costs. Software M&A Announcements – Q3 2014 Date Announced 29-Sep-14 23-Sep-14 23-Sep-14 22-Sep-14 22-Sep-14 22-Sep-14 18-Sep-14 18-Sep-14 18-Sep-14 17-Sep-14 17-Sep-14 17-Sep-14 16-Sep-14 16-Sep-14 15-Sep-14 15-Sep-14 15-Sep-14 15-Sep-14 12-Sep-14 11-Sep-14 11-Sep-14 10-Sep-14 10-Sep-14 10-Sep-14 9-Sep-14 9-Sep-14 2-Sep-14 2-Sep-14 Seller TIBCO Software Inc. Loadosophia Prss BV Apcera Inc. Incognito Software Galitt / GlobalPlatform (test suite assets) Concur Technologies FeedHenry Ltd. nScaled OrlyAtomics Inc. Metacloud Inc. Virtual SolusLabs Ltd. looksoftware Mobilethink A/S Attachmate Group Vistapointe Inc. DirectRestore LLC Datatech A/S Eucalyptus Systems Inc. Movirtu Ltd. Space Monkey Inc. Idera Inc. CentraStage Ltd. Kriegman-Belhumeur Vision Technology (KBVT) BitWise Controls LLC Compuware Corp. BackupAgent BV Generation Equity Advisors, LLC Buyer Vista Equity Partners BlazeMeter Apple Inc. Ericsson Inc. Volaris Group CETECOM GmbH SAP Red Hat, Inc. Acronis Intl. Mesosphere Inc. Cisco Systems Inc. Citrix Systems Inc. On App Ltd. Fresche Legacy Spirent Communications plc Micro Focus Intl. Brocade Communication Systems Inc. Axcient Atea A/S Hewlett-Packard BlackBerry Ltd. Vivint Inc. TA Associates Autotask Corp. Dropbox, Inc. Leviton Manufacturing Thoma Bravo, LLC Acronix Intl GmbH Enterprise Value (EV) Revenues EBITDA EV/Revenue EV/EBITDA $4,300.00 $8,300.00 $82.20 $20.00 $2,349.00 $4.70 $2,500.00 - $1,091.50 $220.40 $700.00 $8.20 $956.80 $312.80 $6.00 $1.10 $714.50 $103.50 - 3.9x NA NA NA NA NA 11.9x NA NA NA NA NA NA NA 2.4x 2.5x NA NA 0.8x NA NA NA NA NA NA NA 3.5x NA 19.5x NA NA NA NA NA NA NA NA NA NA NA NA NA 7.5x NA NA 4.1x NA NA NA NA NA NA NA 24.1x NA Page 7 Date Announced Seller 26-Aug-14 P-Device Systems 20-Aug-14 CloudVolumes 18-Aug-14 Active Circle 14-Aug-14 Verios Software & Systems Ltd. 13-Aug-14 Sepaton Inc. 13-Aug-14 Little Red Wagon Technologies 13-Aug-14 Quay.io 13-Aug-14 Itrios LLC 12-Aug-14 Express Metrix LLC 11-Aug-14 Idera (R1Soft) 11-Aug-14 Metasonic AG 7-Aug-14 Symform, Inc. 6-Aug-14 Sophisticated Business Systems Inc. 4-Aug-14 Virtual System Solutions 4-Aug-14 CorasWorks 1-Aug-14 Docker Inc. (dotCloud business) Generation Equity Advisors, LLC Buyer Altiux Innovations VMware Oodrive Group Empirix Inc. Hitachi Data Systems SyncDog Inc. CoreOS Inc. Intuit Inc. Cherwell Software LLC Continuum Managed Services Allgeier Holding AG Quantum Corp. BLuePhoenix Solutions Ltd. Vmware, Inc. HumanTouch LLC CloudControl GmbH Enterprise Value (EV) Revenues EBITDA EV/Revenue EV/EBITDA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA $24.30 NA NA NA NA NA NA NA NA Page 8 Date Announced Seller 31-Jul-14 Propeller 31-Jul-14 Taptica 29-Jul-14 Nubigenus Ltd. 29-Jul-14 TryMyUI 28-Jul-14 MADBITS 23-Jul-14 drawElements 23-Jul-14 Together Games 23-Jul-14 Orchard Labs, Ltd. 23-Jul-14 Axeda Corp. 22-Jul-14 Hadapt Inc. 22-Jul-14 Revelytix 22-Jul-14 Juniper Networks (Junos Pulse Division) 21-Jul-14 Sodius SAS (North American sales) 21-Jul-14 Flurry Inc. 17-Jul-14 Indigo Systems Ltd. 16-Jul-14 Retsly 16-Jul-14 CardSpring Inc. 16-Jul-14 Atego 15-Jul-14 epcSolutions Inc. (Data Aggregator Software Assets) 15-Jul-14 Tower3 14-Jul-14 PowerCloud Systems 14-Jul-14 The Omega Group 11-Jul-14 InMage Systems 9-Jul-14 Neebula Systems, Inc. 8-Jul-14 eGistics Inc. 8-Jul-14 TwinStrata, Inc. 8-Jul-14 M+W Process Automation GmbH 7-Jul-14 Jenkins Software 7-Jul-14 Movea SA 7-Jul-14 CA Technologies (Arcserve data protection divison) 7-Jul-14 Trusted Positioning Inc. 2-Jul-14 SyntaxTree SARL 2-Jul-14 RADVISION Ltd. (Technology Business) 1-Jul-14 Coglin Mill (Australia) 1-Jul-14 Predictive Edge 1-Jul-14 IBM Corp. (Solid DB) 1-Jul-14 EIBS Ltd. Generation Equity Advisors, LLC Buyer Palantir Technologies Marimedia Ltd. Bridgeways Software Inc. Survey Analytics LLC Twitter Inc. Google Inc. GameSalad Inc. Docker, Inc. PTC Inc. Teredata Corp. Teredata Corp. Siris Capital Group, LLC CloudOne Corp. Yahoo! Inc. EMIS Group plc Zillow Twitter Inc. PTC Inc. Qliktag Software Inc. Chef Software, Inc. Comcast Corp. Trimble Navigation Ltd. Microsoft Corp. ServiceNow, Inc. Top Image Systems, Ltd. EMC Corp. ATS Automation Tooling Systems Inc. Oculus VR, Inc. Invensense Marlin Equity Partners, LLC Invensense, Inc. Microsoft Corp. Spirent Communications plc Roden HelpSystems, Inc. Dropbox, Inc. UNICOM Systems Inc. Ideagen Ltd. Enterprise Value (EV) Revenues EBITDA EV/Revenue EV/EBITDA NA NA $14.70 NA NA NA NA NA NA NA NA NA NA NA NA NA NA $170.00 NA NA NA NA NA NA $250.00 $137.90 1.8x NA NA NA NA NA $5.50 $3.90 1.4x NA NA NA NA NA $50.00 $20.00 2.5x NA NA NA NA NA NA NA NA NA - $15.00 NA NA $100.00 $5.00 20.0x NA $18.00 $10.60 $1.50 1.7x 11.8x NA NA $337.10 $228.50 $27.50 1.5x 12.2x NA NA $61.50 NA NA NA NA $19.00 NA NA NA NA $25.00 $2.70 9.3x NA NA NA NA NA NA NA $1.60 $2.40 0.7x NA Page 9 Generation Equity Advisors is an independent investment bank and M&A advisory firm focused exclusively on the global Software, IT Services, Internet and Digital Media industry sectors. We advise buyers and sellers of companies and efficiently execute transactions to increase shareholder value. Our professionals have advised on and completed $20+ billion in M&A transactions to date and have current relationships with companies as well as leading private equity firms globally. Please contact us for information regarding this report or to inquire about an M&A transaction: Aaron Solganick, CEO [email protected] Generation Equity Advisors, LLC 8560 W. Sunset Blvd, Suite 500 West Hollywood, CA 90069 (310) 684-3130 TechMediaMergers.com Follow Us on Twitter: TechMediaMerger
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