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M&A ACTIVITY IN THE NORDIC SOFTWARE SECTOR
Quarterly report
Q2 2016
24 TRANSACTIONS IDENTIFIED IN Q2/16 (21 IN Q1/16)
– MARKET CONTINUES TO BE STABLE AT ~20 DEALS/QTR
Page 2
There were 21 transactions in the software space in the Nordics in Q2/16 vs. 21 in theprevious quarter (the last report stated 20 deals but we have since added thePolaris/Configit transaction that for some inexplicable reason had not been included).The AddnodeGroup acquisition of EssVision will be counted in Q3. Given the currentmarket sentiment and indications from market players, we are not confident that Q3 willbe a strong showing.
The macro picture has continued to be challenging, and the Nasdaq OMX Tech index hascontinued to decline through the quarter. The index has only yielded 7 % over the last 30months, but this is in fact more or less in line with the overall market.
In Q2/16, Sweden had 10 and Denmark 9 deals, while Finland and Norway clearly laggedbehind with only 4 and 1 deals respectively.
Industrial players have made a strong comeback in this quarter, outnumbering PE drivendeals with 14:10. Among these can be found 2 Chinese representatives, which yields someinteresting potential perspectives for new drivers of deal activity.
It is interesting to see a continued interest among Nordic PE-players in this segment. BothSegulah, Norvestor (through Apsis), EQT and IK have been active with closed transactions.In addition, the Nordic Clairfield partners have knowledge of several Nordic as well asinternational players with active deal efforts in the market. We should expect continuedstrong competition for quality assets.
Visma’s offer for Fortnox during Q1/16 has been withdrawn. With Sage now established inthe Nordics, and SME ERP new market entrants showing rapid customer acquisitiongrowth, we would be surprised to see an offer for Fortnox matching or exceeding Visma’s.
The Opera offer was accepted by the holdout shareholders in the end, but has still notbeen closed due to regulatory issues.
Revenue multiples for Nordic companies: EV/Revenue 2016E multiples increased slightlyfrom 1.9 x to 2.0 x for the Nordic players.
EBITDA multiples for Nordic companies: EV/EBITDA 2016E increased from 10.9 x to 11.9 xduring the quarter.
DISCOUNT GAP: The EV/EBITDA multiple gap between the Nordic and International listedplayers is now only at 18 %, while the EV/Revenue gap increased further to a full 64 %,clearly showing the need for increased international growth focus for Nordic players.
While Q3 may show a decline in closed deals, we have no expectation of a long termdownturn in the number of software M&A transactions in the Nordics.
We wish you all a pleasant and enjoyable summer!
QUARTERLY SOFTWARE REPORT – Q2 2016
EXECUTIVE SUMMARY
Source: MergerMarket, Factset and Steinvender
NASDAQ OMX TECHNOLOGY INDEX: Jan 14 – Jun 16
1,700
1,600
1,500
1,400
1,300
1,200
1,100
1,000
Jan. 14 Jun. 14 Dec. 14
DEVELOPMENT IN NUMBER OF IDENTIFIED TRANSACTIONS
2125
21 2118
2022
1721
24
Q2 2015Q1 2015 Q2 2016Q2 2014 Q4 2014Q3 2014 Q1 2016Q3 2015Q1 2014 Q4 2015
Jun. 15
+7%
Dec. 15 Jun. 16
OVERVIEW OF Q2 2016 NORDIC SOFTWARE TRANSACTIONS
Steinvender has identified 24 Nordic software transactions in Q2 2016
~60% of the companies were acquired by industrials which is in lineprevious quarters
Deal activity concentrated in Denmark and Sweden with only 1 transactionidentified in Norway
More than 50% of the companies are sold to entities outside of the Nordics,2 transactions involved China-based companies
Continued strong appetite among North-American companies
QUARTERLY SOFTWARE REPORT – Q2 2016
COMMENTS
Source: MergerMarket, Factset and Steinvender
BREAKDOWN OF DEALS BY EXIT TYPE
BREAKDOWN OF DEALS BY TARGET’S COUNTRY BREAKDOWN OF DEALS BY ACQUIROR’S REGION
6
PE - add-on
PE - platform4
Industrial14
4
Norway
Finland
Sweden
9
10
1
Denmark
US / Canada
Nordics
6
5Rest of Europe
11
Rest of world
2
Page 3
NOTABLE NORDIC SOFTWARE TRANSACTIONS ANNOUNCED DURING Q2 2016
TARGET ACQUIROR DEAL VALUE EV / SALES EV / EBITDA
€1,000m ~5.0x ~20.0x
N/A N/A N/A
N/A N/A N/A
N/A N/A N/A
N/A N/A N/A
€13m N/A N/A
~9,000m 4.3x ~20.0x
N/A N/A N/A
N/A N/A N/A
Source: MergerMarket and Steinvender
QUARTERLY SOFTWARE REPORT – Q2 2016
Page 4
QUARTERLY DEVELOPMENT OF TRADING MULTIPLES
- LIMITED FLUCTUATIONS IN MULTIPLES
QUARTERLY SOFTWARE REPORT – Q2 2016
Source: Factset and Steinvender
Page 5
MEDIAN EV / SALES (CURRENT FINANCIAL YEAR) MEDIAN EV / EBITDA (CURRENT FINANCIAL YEAR)
MEDIAN EV / SALES (CURRENT FINANCIAL YEAR) MEDIAN EV / EBITDA (CURRENT FINANCIAL YEAR)
INTERNATIONAL INTERNATIONAL
NORDICS NORDICS
1,9x 1,9x2,1x
2,6x2,2x 2,1x 2,0x1,9x
Q3 14 Q2 16Q1 16Q4 15Q3 15Q2 15Q1 15Q4 14
10,8x 10,7x9,3x
11,4x 11,1x 10,9x11,9x
10,6x
Q1 16 Q2 16Q4 15Q3 15Q2 15Q1 15Q4 14Q3 14
4,1x 4,4x3,9x
4,3x4,7x 4,9x
5,6x4,9x
Q2 16Q4 15 Q1 16Q1 15Q4 14Q3 14 Q2 15 Q3 15
12,3x14,0x 14,3x 14,2x 14,4x 14,2x 14,5x
15,8x
Q1 16 Q2 16Q3 15 Q4 15Q1 15 Q2 15Q4 14Q3 14
TRADING MULTIPLES FOR LISTED NORDIC SOFTWARE COMPANIES
- EV / EBITDA 2016E AT 11.9x
EV / SALES 2015A AND 2016E
EV / EBITDA 2015A AND 2016E
Tecnotree
0.70.6
Addnode
0.70.8
QPR Software
5.8
1.2
FormPipe
1.4
5.9
SimCorp
6.1
1.4
Comptel
1.82.0
Opera Software
1.82.2
F-Secure
2.02.2
Basware
2.93.1
Vitec Software
3.13.3
SSH Comm.
4.3
Hexagon
4.14.4
Cxense
5.8
IAR Systems
3.6
n/a n/a n/a
EV / Sales - 2016E
EV / Sales - 2015A
Median EV / Sales 2015A: 2.7x
Median EV / Sales 2016E: 2.0x
Hexagon
13.614.8
IAR Systems
18.6
SimCorp
22.9
Basware
33.4
9.6
Vitec Software
11.311.7
Comptel
10.312.6
F-Secure
13.013.5
Opera Software
11.913.7
SSH Comm.CxenseTecnotree
12.3
4.0
FormPipe
6.56.8
Addnode
8.27.9
QPR Software
24.5
EV / EBITDA 2016E
EV / EBITDA 2015A
Source: Factset. Note: Previously included IFS AB was acquired by EQT in Q4 2015. There is a pending offer for Opera Software
Median EV / EBITDA 2015A: 13.0x
Median EV / EBITDA 2016E: 11.9x
QUARTERLY SOFTWARE REPORT – Q2 2016
Page 6
n/a n/a
n/a
n/a
n/a
TRADING MULTIPLES FOR A SELECTION OF LISTED INTERNATIONAL SOFTWARE COMPANIES
- EV / EBITDA 2016E AT 14.5x
EV / SALES 2015A AND 2016E
EV / EBITDA 2015A AND 2016E
4.3
Oracle
4.24.6
Sage Group
4.45.1
Intuit
6.56.7
Callidus Software
5.6
7.9
Check Point
Software
7.59.1
salesforce.com
8.0
11.0
Adobe Systems
9.3
12.0
Workday
10.8
17.8
Econocom Group
0.60.7
Progress Software
2.83.9
Microsoft
3.6
EV / Sales - 2016E
EV / Sales - 2015A
Median EV / Sales 2015A: 6.7x
Median EV / Sales 2016E: 5.6x
8.810.2 10.0
Econocom Group
11.1 9.7
Check Point
Software
13.2
Sage Group
15.9
Intuit
20.8 17.6
Adobe Systems
26.3
15.6
salesforce.com
39.3
14.4
Callidus Software
54.8
11.5
Microsoft
41.3
78.3
Oracle Workday
9.4
59.9
Progress Software
17.8
EV / EBITDA 2015A
EV / EBITDA 2016E
Source: Factset
Median EV / EBITDA 2015A: 16.6x
Median EV / EBITDA 2016E: 14.5x
n/a
QUARTERLY SOFTWARE REPORT – Q2 2016
Page 7
LIST OF NORDIC SOFTWARE TRANSACTIONS IN Q2 2016
QUARTERLY SOFTWARE REPORT – Q2 2016
Source: MergerMarket, Factset and Steinvender
Page 8
# Target Target Country Bidder Bidder Country Date Exit type
1 Sitecore Corporation Denmark EQT Sweden April PE - platform
2 Doneco Denmark Visma Norway April PE - add-on
3 Hermes Medical Sweden Segulah Sweden April PE - platform
4 Exerp Denmark Technogym Italy April Industrial
5 Sproom Solutions Denmark Visma Norway April PE - add-on
6 Toca Boca Sweden Spin Master Canada April Industrial
7 DdD Retail Denmark K3 Business Technology UK April Industrial
8 Digital Foodie Finland EnterWorks Acquisition US April PE - add-on
9 Baze Technology Norway Envision Energy China May Industrial
10 ExpertMaker Sweden eBay US May Industrial
11 Protracer AB Sweden Topgolf Entertainment US May Industrial
12 e-Avrop Sweden Pamir Partners Sweden May PE - add-on
13 Next Print Solutions Denmark Mobile Print Invest Denmark June Industrial
14 Inspari Denmark Stibo Denmark June Industrial
15 Hypergene Sweden Monterro Sweden June PE - platform
16 X5 Music Group Sweden Warner Music US June Industrial
17 Mofibo Books Denmark Storytel Sweden June Industrial
18 Supercell Finland Tencent Holdings China June Industrial
19 Innometrics Sweden Apsis International Sweden June PE - add-on
20 Modultek Finland Roima Intelligence Finland June PE - add-on
21 e-conomic international Denmark TeamSystem Italy June Industrial
22 OpenSolution Nordic Sweden IK Small Cap UK June PE - platform
23 Connode Sweden Cyan Holdings UK June Industrial
24 Ecolane Finland National Express US June Industrial
QUARTER-BY-QUARTER DEVELOPMENT IN NORDIC SOFTWARE TRANSACTIONS
QUARTERLY SOFTWARE REPORT – Q2 2016
BREAKDOWN OF DEALS BY EXIT TYPE
Source: MergerMarket, Factset and Steinvender
BREAKDOWN OF DEALS BY TARGET’S COUNTRY
BREAKDOWN OF DEALS BY ACQUIROR’S REGION
Page 9
17%
17%
58%
25%
Q2 2016Q1 2016
29%
38%
33%
Q4 2015
65%
24%
12%
Q3 2015
64%
23%
14%
Q2 2015
45%
35%
20%
Q1 2015
67%
17%
IndustrialPE - platformPE - add-on
42%
17%
4%
38%
Q2 2016Q1 2016
19%
24%
33%
24%
Q4 2015
12%
29%
24%
35%
Q3 2015
5%
27%
36%
32%
Q2 2015
25%
15%
40%
20%
Q1 2015
17%
33%
17%
33%
Norway FinlandDenmarkSweden
20%
20%
6%
17%
55%
Q1 2015
50%
28%
Q4 2015
24%
5%
14%
57%
Q1 2016
8%
Q2 2016
24%
0%5%
Q2 2015
18%0%
32%
50%
Q3 2015
41%
35%
21%
25%
46%
Nordics Rest of EuropeUS / Canada Rest of World
NUMBER OF TRANSACTIONS
1820
22
1721
24
Q4 2015 Q2 2016Q1 2016Q1 2015 Q2 2015 Q3 2015
OUR NORDIC PARTNERS ENSURE LOCAL COVERAGE AND MARKET ACCESS
Established in 1997
Oslo location
10 professionals
More than 125 transactions
since inception
Established in 2008
Copenhagen location
6 professionals
More than 35 transactions
since inception
Established in 2009
Stockholm location
12 professionals
More than 30 transactions
since inception
Established in 1992
Helsinki location
12 professionals
More than 200 transactions
since inception
~40Nordic
Professionals
+400Completed
transactions
Most
experienced
team in the
Nordics
Nordic members of Clairfield International
QUARTERLY SOFTWARE REPORT – Q2 2016
Page 10
A SELECTION OF RECENT CLAIRFIELD NORDIC SOFTWARE AND IT SERVICES TRANSACTIONS
QUARTERLY SOFTWARE REPORT – Q2 2016
Page 11
Advisor to
on the divestment of Lean Systems to
2015
ERP Solutions
Advisor to
on the sale to
2014
Insurance Software
Advisor to
on the sale to
2014
ERP Solutions
Advisor to
on the sale of
2014
ERP Solutions
to
Advisor to
on the sale to
2015
Wearable technology
Advisor to
on the acquisition of Birdstep Technology Oy
from
2014
IT Security
Advisor to
on the sale to
2015
Hosting
Advisor to
on the minority investment by
2015
SaaS
Advisor to
on the sale to
2014
CRM Software
Advisor to
On the sale to
2015
Baggage handling automation
Advisor to
on the sale to
2015
BIM Software
Advisor to
on the sale to
2014
IT solutions to the chemicals industry
Advisor to
on the sale to
2015
SaaS
Advisor to
on the acquisition of
2015
Data collection software
Advisor to
on the divestment of BCC Finland to
2014
IT Hardware
Note: Clearfield International
IMPORTANT NOTICE
This presentation has been prepared by Steinvender AS (referred to below as “Steinvender”).
The information in this presentation has been obtained from public sources, and is to the best of Steinvender’s knowledge reliable and accurate at the time of issuing the
document. The information in the presentation should not be considered to be complete without the addition of the oral information provided by Steinvender when giving
the presentation.
The information should not be regarded as containing any warranties or representations, expressed or implied, as to the present or future legal or financial positions of
any of the companies or entities included in this presentation.
Steinvender reserves the right to update or replace the contents of this presentation without informing the recipient. Recipients should conduct their own investigations
and analysis of the business, data and properties described in this document.
This presentation does not constitute an offer to purchase shares or to invest in any of the companies or entities mentioned in the presentation, and should not be
interpreted as such.
The contact persons at Clairfield are as follow:
Norway: Finland: Denmark: Sweden:
Jarle Mørk Juha Raunio Anders W. Eriknauer Victor Mellgren
[email protected] [email protected] [email protected] [email protected]
+47 99 23 79 39 +358 40 570 5260 +45 20 19 39 99 +46 70 694 4766
DISCLAIMER
QUARTERLY SOFTWARE REPORT – Q2 2016
Page 12
