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STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI STOCKH
Quarterly Software Report
Q1 2018
2
IDENTIFIED TRANSACTIONS
• Although the performance in the software transaction market in Q1 was strong,
as expected it did not outperform the number of medals won by the Norwegian
team in the Winter Olympics… The market continued to grow in Q1/18 with a
total of 28 software transactions, 7 more than last quarter.
• The performance of the Nordic Technology EUR GI index was strong in Q1/18
and increased by 7.0%, making up for the weak Q4/17.
• The largest deal activity within Nordic software could again be found in
Sweden, with 10 identified deals, followed by 9 deals in Denmark. Norway and
Finland had 5 and 4 deals respectively.
• Private equity buyers completed 8 of the 28 deals, leaving strategists as the
dominant buyer group.
• Nordic buyers continued to dominate in Q1 with 15 (55.2%) of the 28 deals,
while US and Canadian buyers were the second most active.
• The Nordic discount gap now stands at 47.8% compared with international
software companies, based on EV / SALES 2018E multiples.
• Please do not hesitate to provide us with feedback on this report and
interesting perspectives on the Nordic software players.
• We wish you all a pleasant spring!
NORDIC TECHNOLOGY EUR GI
28
21
13
33
28
1917
24
2018
2220
182121
25
21
1,800
1,000
1,400
1,600
1,200
Jan. 14 Jan. 15 Jan. 16 Jan. 17 Jan. 18
2014 2015 2016 2017 2018
Jan 14 – Mar 18
Source: Merger Market and Factset
EXECUTIVE SUMMARY
28 transactions
in Q1/18
28 transactions
in Q1/17
EV / SALES INTERNATIONAL SOFTWARE COMPANIES
6.7x6.1x6.1x5.8x
6.9x
4.6x5.6x
4.9x4.9x4.7x4.3x3.9x
4.4x
Q1
2015
Q3
2017
Q4
2017
Q1
2017
Q1
2016
Q3
2015
Q4
2015
Q1
2018
Q2
2015
Q2
2016
Q4
2016
Q4
2014
Q3
2016
NORDIC SOFTWARE TRANSACTIONSOVERVIEW OF Q1 2018
3
DEALS BY ACQUIRER’S COUNTRY
DEALS BY EXIT TYPE
DEALS BY TARGET’S COUNTRY
• Nordhaven has identified 28 Nordic software transactions in Q1 2018
• 71.4% of the companies were acquired by industrials, which is somewhat higher
than the historical average
• An equal number of private equity-backed deals were platform and add-on
investments.
• Largest deal activity was in Sweden (35.7%) and Denmark (32.1%)
• 53.6% of the companies were sold to entities in the Nordics, followed by 25.0% of
acquirers in rest of Europe
COMMENTS
Source: Merger Market and Nordhaven analysis
4
4
20
PE – Add-on
PE - Platform
Industrial
0
9
5
10
4
Denmark
Norway
Iceland
Finland
Sweden
15
5
7
1
Nordics
US / Canada
Rest of Europe
Rest of World
NORDIC SOFTWARE TRANSACTIONSQUARTER-BY-QUARTER DEVELOPMENT
4
NUMBER OF TRANSACTIONS
BREAKDOWN OF DEALS BY TARGET’S COUNTRY
BREAKDOWN OF DEALS BY ACQUIROR’S REGION
Source: Merger Market and Nordhaven analysis
BREAKDOWN OF DEALS BY EXIT TYPE
26%
Q4 16Q2 16
25%
17%
42%
72%
22%
6%
Q3 16
58%
0%
38%25%
71%
32%
36%
14%
Q2 17
24%
Q1 17
14%
Q4 17
43%
62%
52%
14%
33%
12%
Q3 17
61%
Q1 18
IndustrialPE - platformPE - add-on
Q4 17
14%
Q3 17 Q1 18
18%
0%32%
38%
48%36%42%
38%21%29%
8%
36%
Q4 16
18%
31%
14%9%
27%15%
21%
Q1 17
46%
42%
21%
Q3 16
22%
18%
22%
28%16%
28%
Q2 16
17%
4%
42%
Q2 17
NorwayDenmark FinlandSweden
25%
11%
21%
25%
46%
11%
68%58%
Q4 16
0%
6%8%
25%
69%
Q3 16
21%
Q2 16
8%
15%6%
Q4 17
0%
58%
Q2 17
5%
71%
18%
Q3 17
46%
4%
30%
31%
24%
6%
54%
4%4%
25%
Q1 18Q1 17
Rest of World
Nordics Rest of Europe
US / Canada
28
21
13
33
28
1917
24
Q4 17Q2 16 Q3 17Q2 17Q1 17Q4 16Q3 16 Q1 18
NOTABLE TRANSACTIONS DURING Q1 2018
5
Financial performance solutions
and banking business of Basware
Software and services provider
to the oil and gas industry
Smart home systems and
software solutions for homes
Surf kiosks and advanced
kiosks solutions
Provider of software solutions
Digital key management
solutions and alarm for
homecare and nursing homes
e-Payment products for online
merchants and electronic
marketplaces
Consultancy services in IT
services and solutions
22,2
7,0
2,2
0,6
1,6
12,0
1,9
Turo Puittinen
(Private Investor)
TARGET ACQUIROR REVENUE 2016 (MEUR) SELLER
Founders
Founders
Source: Merger Market and Nordhaven analysis
Financial
Performance N/A
Private investors
SELECTED SOFTWARE TRANSACTION MULTIPLES (EV / SALES) – LAST 12 MONTHS
6
1,8x
3,6x
3,5x
4,0x
1,2x
4,0x
3,1x
3,8x
4,6x
5,7xQ2 2017
Q4 2017
Q2 2017
Q3 2017
Q2 2017
Q1 2017
Q4 2017
Q3 2017
Q3 2017
Software for strategic sourcing
Telecom software provider
Software for 3D simulation and training
Software for documentation of chemicals
Software for vehicle trip logs / fleet mgmt.
Software for smart grid / customer interaction
Open-source software for web design
Software for document sharing
Software for payment solutions
Software for customs clearance and freight forw.Q4 2017
Source: Merger Market and Nordhaven analysis
TRADING MULTIPLES OF SELECTED NORDIC AND INTERNATIONAL SOFTWARE COMPANIES
7
NORDICSEV / SALES
INTERNATIONALEV / SALES
5,2x
SimCorp
4,4x4,2x4,4x
Hexagon
4,7x
5,8x
6,3x
HMS Network
5,6x
2,2x2,6x
Tobii
2,3x
2,8x
1,0x
F-SecureVitec Software CLX Communication
1,1x
Micro Systemation
3,6x
Basware
3,0x 2,8x
3,5x
Autodesk SAP
13,0x
Citrix
11,5x
4,5x4,5x 4,4x4,8x
10,0x9,0x
Workday Salesforce
9,1x
10,5x
6,4x6,7x 6,5x
GuideWire Ultimate Software
7,0x7,4x
6,1x
MicrosoftAdobe Systems
11,9x
13,2x
Median: 6.7x
2018E
2017
2017
2018E
Median: 3.5x
Source: Merger Market and Nordhaven analysis
LIST OF IDENTIFIED NORDIC SOFTWARE TRANSACTIONS IN Q1 2018
8
# TARGET TARGET COUNTRY BIDDER BIDDER COUNTRY DATE EXIT TYPE
1 Tieto Norway (ProArc software division) Norway Constellation Software (Vela Software) Canada January PE - Platform
2 EcoFleet Group Denmark Fleet Complete Canada January Industrial
3 Prenax Sweden Edmond de Rothschild Investment Partners France January PE - Platform
4 InsiderLog (80% Stake) Sweden Euronext Netherlands January Industrial
5 CrediCare Norway Melin Medical Norway January Industrial
6 Good Game Limited Finland XLMedia United Kingdom January Industrial
7 Rendra Norway JDM Technology Group Canada January Industrial
8 OptiWay Sweden Visma Norway January Industrial
9 TenderEasy Sweden Alpega Belgium January Industrial
10 Cale Access Sweden Parkeon France January Industrial
11 Forsikringens Datacenter Denmark Constellation Software (Total Specific Solutions) Netherlands January PE - Add-on
12 Komfo Denmark Falcon.io Denmark February Industrial
13 Petrostreamz Norway Tieto Corporation Finland February Industrial
14 Templafy Denmark Seed Capital Denmark Denmark February PE - Add-on
15 Futurehome (51% Stake) Norway Get Norway February Industrial
16 Gordion Sweden Melin Medical Norway February Industrial
17 Basware Corporation Finland Verdane Capital Advisors Finland February PE - Add-on
18 Phoniro Sweden ASSA ABLOY Sweden February Industrial
19 Orderyoyo Denmark Vaekstfonden Denmark March PE - Platform
20 Unwire Denmark CLX Communications Sweden March Industrial
21 Bitfactor Finland Viria Finland March Industrial
22 Frontlab DK Denmark LanguageWire Denmark March Industrial
23 Sepior Denmark SBI Holdings Japan March Industrial
24 Trustly Group Sweden Nordic Capital Sweden March PE - Add-on
25 itsperfect software europe Sweden Hittapunktse Sweden March Industrial
26 Elskling Sweden Zmarta Group Norway March Industrial
27 Mediamaestro Finland Constellation Software (Total Specific Solutions) Netherlands March PE - Platform
28 Lessor Denmark Paychex USA March Industrial
Source: Merger Market and Nordhaven analysis
NORDHAVEN IN SHORT CORE SECTOR EXPERTICE
NORDHAVEN IS THE LEADING INDEPENDENT M&A FINANCE ADVISOR IN THE NORDIC MARKET
9
NORDHAVEN SERVICE OFFERING
We operate as a strategic financial advisor and partner to owners, board members and
management throughout the business life cycles.
MERGERS & ACQUISITIONS
Planning and execution of mergers and acquisitions, divestments and other corporate
finance transactions are our core expertise.
DEBT & CAPITAL ADVISORY
We give advice on our clients’ debt and capital structures, negotiate and execute
fundraising for companies executing their M&A transactions as well as for organic
growth plans. We provide advice also at the time of distress.
INCENTIVE ADVISORY
We advise in the design and implementation of tailored, equity-based long-term
incentive plans that are linked to strategy execution and total returns to shareholders.
SERVICES
CONSUMER
HEALTHCARE
INDUSTRIALS
TMT
Systems
Professionals
Sweet spot
deal value
Years experience
Transactions
advised
+40
+300
+20
MEUR
10-100
FAR-REACHING INTERNATIONAL NETWORK WITH 34 PARTNER OFFICES WORLD WIDE
Nordhaven has been the exclusive partner of Clairfield International in Finland, Sweden and Norway
since 2012. Clairfield International have local partners in over 20 countries.
Through Clairfield International we have global connectivity, and foreign markets are our home markets.
Together we are stronger.
10
STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI STOCKH
HELSINKI
Eteläranta 12
+358 207 613 910
OSLO
H. Heyerdahls gate 1
+47 215 070 00
STOCKHOLM
Riddargatan 13A
+468 599 226 96
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