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
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