M&A and Investments Review DeAl Technology, Software, and ...petskyprunier.com/_petskyprunier.com/dynamic/user... · $29.4 $23.7 $19.0 $14.0 $36.2 2q12 3q12 4q12 1q13 2q13 deal volume

$29.4

$23.7

$19.0

$14.0

$36.2

2Q12 3Q12 4Q12 1Q13 2Q13

DEAL VOLUME

DOLLAR VALUE

MARKETING, MEDIA, TECHNOLOGY AND SERVICE INDUSTRIES!M&A AND INVESTMENT ACTIVITY: 1Q11 - 2Q12!

($ in Billions)!

MARKETING, MEDIA, TECHNOLOGY AND SERVICE INDUSTRIES!1H12 M&A AND INVESTMENT ACTIVITY!

($ in Millions)!

Technology, Software, and Information & BusinessServices Industries 2Q12-2Q13 M&A and Investment Activity

($ in Billions)

592 599 596 607 676

Marketing Technology

$8,862 Technology & Communications

$9,495

Software $13,285

Information & Business Services

$18,617

MARKETING, MEDIA, TECHNOLOGY AND SERVICE INDUSTRIES

2Q12 M&A AND INVESTMENT ACTIVITY ($ in Millions)

Technology, Software, and Information & Business Services Industries 1H13 M&A and Investment Activity

($ in Millions)

Technology, Software, and Information & Business Services Industries

2Q12–2Q13 M&A and Investment Activity($ in Billions)


1H13 M&A and Investment Activity($ in Millions)

Securities offered through Petsky Prunier Securities, LLC 1

1H13 Review of M&A and Investment Activity in the Technology, Software, and Information & Business Services Industries:

1,283 Transactions Totaling a Reported $50.3 Billion

Marketing Technology was the Most Active Segment in 1H13 with 421 Transactions

Information & Business Services was the Highest Value Segment with $18.6 Billion in Reported Deal Value

During the first half of 2013, Petsky Prunier tracked 1,283 M&A and investment

transactions for a total of $50.3 billion across four broad segments: Marketing Technology,

Technology & Communications, Software, and Information & Business Services. Marketing

Technology was the most active segment in 1H13, accounting for one-third

of total volume during the first six months of the year, with 421 transactions announced.

Of those, 276 were worth $8.9 billion in aggregate reported value. Information & Business

Services was the highest reported value segment in 1H13 with $18.6 billion, including

Fidelity National Services’ $3.9 billion acquisition of Lender Processing Services, a provider

of integrated technology, data, and services to the mortgage lending industry. Software

was also a high-value segment due in large part to the announced $6.9 billion take-private

of enterprise software company BMC Software from a consortium of private investors led

by Bain Capital and Golden Gate Capital. [continued on page 2]

Overview 1

Segment Analysis

Marketing Technology 5

Technology & Communications 6

Software 7

Information & Business Services 8

Recent Transactions 9

About Petsky Prunier 10

1H13

M&A and Investments Review


DeAl NOTeS

Deal Notes First Half 2013

2

M&A Activity

Acquisitions accounted for 47 percent of total transactions and 84 percent of reported value in 1H13. Information & Business Services was the highest value M&A segment with 181 acquisitions announced, of which 36 were reported for $17.5 billion in value. IT Consulting/Systems Integration was the most active Information & Business Services subsegment, with 48 acquisitions announced, of which nine were worth $2.4 billion in aggregate reported value. The three largest acquisitions announced in the Information & Business Services segment were:

BC Partners’ $4.4 billion buyout of Germany-based Springer Science+Business Media, which publishes academic and professional books, journals, and periodicals

IHS’ $1.4 billion agreement to acquire R. L. Polk, a provider of automotive intelligence and marketing solutions

Thomas H. Lee Partners’ $1.1 billion buyout of IT outsourcing specialist CompuCom Systems, from Court Square Capital Partners

Software was the second-highest value M&A segment during the first half of the year with 180 acquisitions announced, of which 36 were reported at $10.7 billion in aggregate value. The Infrastructure Software subsegment accounted for 67 percent of the segment’s acquisition value, largely due to the $6.9 billion take-private of BMC Software. The next-largest Infrastructure Software acquisition was SolarWind’s $120 million purchase of Canada-based N-able Technologies, a provider of network monitoring and remote systems management solutions. Security Software was the second-highest value subsegment, accounting for 15 percent of total acquisition value in the segment. Other notable acquisitions announced in the Security Software subsegment included:

Vista Equity Partners’ announced take-private of Websense, a provider of network security solutions, valued at more than $900 million

McAfee’s $378 million acquisition of Stonesoft, a Finland-based provider of network firewall products, at 7x revenue

A total of 147 acquisitions were announced in the Marketing Technology segment, of which 30 were reported at $6.7 billion in aggregate value. Analytics/Reporting was the most active subsegment

with 21 control deals announced, up from 10 in 2H12, followed by Content Management with 16. There were 26 acquisitions announced by cloud-based marketing technology companies, including:

Salesforce.com’s $2.5 billion acquisition of marketing execution company ExactTarget, which provides cross-channel, digital marketing SaaS solutions, valuing the company at 7.4x revenue

SAP’s acquisition of Germany-based Hybris, a vendor of cloud-based, multi-channel communication and commerce software solutions, reportedly valued at $1.5 billion

Adobe’s $600 million acquisition of NeoLane, which offers solutions that help companies manage their marketing across channels

There were 91 acquisitions announced in the Technology & Communications segments, of which 31 were reported at $7.5 billion in value. Reflecting an influx of advanced mobile and in-store payment technologies, Financial Technology was the most active subsegment, accounting for 20 percent of acquisitions in the segment (triple the level of activity in 2H12). Of the 18 Financial Technology acquisitions announced, seven were reported at $1.2 billion in aggregate value. M&A activity in the Cloud Computing subsegment was also strong, with a 25 percent increase in volume and a 62 percent increase in reported value from 2H12. Ten acquisitions were announced in the Networking Equipment subsegment, of which five were worth $771 million in aggregate reported value. Notable acquisitions in the Technology & Communications segment included:

IBM’s $2 billion acquisition of SoftLayer Technologies, which operates a unified cloud infrastructure platform

Avista Capital Partners’ $253 million acquisition of Telular, which develops cellular electronics products that utilize wireless networks to provide data and voice connectivity among people and machines

Fidelity National Information Services’ $120 million purchase of mFoundry, a provider of mobile banking and payment solutions for financial institutions and retailers

1H13 Most Active Strategic Buyers by Number of Transactions

BuyerNumber of Transactions Representative Targets

Cisco 6 Cognitive Security, Intucell, JouleX, SolveDirect Service Management, UbiquisysIHS 6 Energy Publishing, Fekete Associates, Intellichem, PFC Energy, R.L. PolkSalesforce.com 4 EdgeSpring, EntropySoft, ExactTarget, Pasona TquilaReed Elsevier 4 Aureus Sciences, Knovel, Knowledge Mosaic, MendeleySAP 4 Camilion, Hybris, SmartOps, Ticket-WebTwitter 4 Bluefin labs, Crashlytics, Lucky Sort, UbaloIMS Health 4 360 Vantage, Appature, SemantelliGoogle 3 Behavio, Channel Intelligence, WaviiOracle 3 Acme Packet, Nimbula, TekelecFacebook 3 Atlas Advertiser Suite, Parse, Spaceport.io


3

Investment Activity

There were 684 investments announced during 1H13, of which 606 were worth $7.8 billion in aggregate reported value. Marketing Technology was the most active investment segment, accounting for 40 percent of volume and 27 percent of reported value. A total of 274 investments were announced in the Marketing Technology segment, of which 246 reported $2.1 billion in value. Activity in the segment was led by the Analytics & Reporting and Social Technology subsegments, which together accounted for nearly 30 percent of both investment volume and reported value during the first half of the year. Of the 79 investments announced in these subsegments, 22 were among companies extending the value of traditional analytics by integrating big data analytics solutions. Investments included:

Goldman Sachs’ $100 million investment in Applied Predictive Technologies, a provider of cloud-based big data predictive analytics software

A $38 million investment in MarketShare Partners, a cross-media analytics provider leveraging big data technology to provide a combination of technology, data, modeling, and business intelligence solutions, led by FTV Capital

The $24 million Index Ventures-led investment in Elasticsearch, a Netherlands-based big data start-up developing real-time search and data analytics solutions

Software was the highest reported value investment segment, with 187 investments announced, of which 165 were reported at $2.6 billion. The most active subsegments were Security Software and Healthcare Software, with 39 and 29 investments announced, respectively, for a combined $715 million in reported value. The Application Management Software and Software Development Tools subsegments together accounted for 22 percent of investment value in the segment. Of the total 42 deals announced across the two subsegments, 18 involved cloud computing technologies. Notable investments in the Software segment included:

The $150 million investment in Precision for Medicine, a provider of services and infrastructure to support life science companies, raised from Oak Investment Partners and J.H. Whitney

General Electric’s $105 million investment in Pivotal One, a spin-out from EMC and VMware that has developed an enterprise Platform-as-a-Service for the creation and management of consumer-grade applications, reportedly valuing the company at more than $1 billion

The Technology & Communications segment accounted for 22 percent of investments during 1H13, with 153 investments announced, of which 143 were worth $2 billion in aggregate reported value. Leading subsegments were Financial Technology, Big Data Technology, and Cloud Computing Technology, in which there were a total of 71 investments announced. Activity across these subsegments increased 92 percent from 2H12. Enterprise Mobility was the highest value subsegment, in addition to being the most active Communications subsegment. Of its 15 investments announced, 12 were reported at $292 million in aggregate value. The largest investments announced in 1H13 across the Enterprise Mobility, Big Data, and Financial Technology subsegments included:

The $200 million Insight Venture Partners-led investment in AirWatch, a company that specializes in helping large companies manage and secure the mobile devices their employees use

The $50 million investment in Hortonworks, a provider of open-source software used for managing massive amounts of data, led by Tenaya Capital and Dragoneer Investment Group

The $30 million investment in MapR Technologies, a developer of software to manage and analyze big data, led by Mayfield Fund

1H13 Most Active Investors by Number of Transactions

InvestorNumber of Transactions Representative Targets

Andreessen Horowitz 15 Balanced, Crowdtilt, Cumulus Networks, DataGravity, Dwolla, Illumio, Pindrop SecurityBessemer Venture Partners 11 Adaptive Planning, Affirmed Networks, Convertro, Dekko, Intigua, Simply MeasuredIntel Capital 9 500friends, Apperian, Big Switch Networks, Expect Labs, Fortumo, Movable, Nexmo500 Startups 8 15Five, Clip, Hedgeye Risk Management, Lagoa, PayrollHero, Soldsie, ToutAppBattery Ventures 8 Catchpoint Systems, Diable Technolgies, Entelo, Gainsight, Panaya, Q2ebankingAtlas Venture 7 clypd, DataXu, Discoverly, Gizmox, Hstreaming, SkillzKleiner Perkins Caufield & Byers 7 EdgeSpring, Good Technology, Ionic Security, PernixData, Shape Security, WorkspotRedpoint Ventures 7 Curious.com, ERPLY, Inadco, Infer, Lastline, Moogsoft, TwilioInsight Venture Partners 7 BrightEdge, Card Scanning Solutions, Kaseya International, New Relic, PluralsightSequoia Capital 6 MadeiraCloud, MarkLogic, Pyramid Analytics, Skyhigh Networks, ThousandEyesAccel Partners 6 AirWatch, GoCardless, HasOffers, Lynda.com, RelateIQ, ScaleArcBain Capital 6 AppNeta, Booker Software, BTI Systems, Novus Partners, Perado, SevOneTrue Ventures 6 Concurrent, MobileSpan, Namely, Orchestrate.io, Runscope, TripleLift


4

Buyer & Investor Activity

Strategic buyers accounted for 91 percent of all control transactions in 1H13. Thirty percent of strategic deal activity and 12 percent of reported value were announced in the Software segment, in which 162 control transactions were announced. Of those, 30 were reported at $2.7 billion in aggregate value. There were 159 strategic acquisitions announced in the Information & Business Services segment, a 37 percent increase in deal activity compared to 1H12. Of these, 26 were worth $8.5 billion in aggregate reported value.

Buyout firms announced 54 deals during the first six months of the year, of which 22 were reported at $19.4 billion in value. The Information & Business Services segment accounted for 47 percent of that value (largely due to the Springer Science+Business Media acquisition) and was followed by the Software segment’s $8 billion in reported value. Notable buyout transactions included:

Advent International and Goldman Sachs Capital Partners’ $3 billion buyout of TransUnion, a provider of credit information and information management services to both businesses and consumers

Veritas Capital’s $1.3 billion buyout of Thomson Reuters’ Healthcare Business, which offers data, analytics, and performance benchmarking services to the healthcare industry

Venture and growth capital investor volume and value increased 14 percent and 13 percent, respectively, from 2H12. The largest increase in activity occurred in the Information & Business Services segment, in which 70 deals were announced – 20 more than the previous half-year period. Andreessen Horowitz, Bessemer Venture Partners, and Intel Capital were the most active investors, with 15, 11, and nine investments announced, respectively, during 1H13.

IPO Activity

Fifteen companies completed their IPOs across the Technology, Software, and Information & Business Services segments during 1H13. Marin Software, Rally Software Development, and Texture all had successful IPOs pricing at the high-end or above their respective initial filing ranges and closing the period trading above their respective first-day closing stock prices. Within the Information & Business Services segment, BPO company Quintiles Transnational closed 1H13 trading flat from its first-day closing stock price. Professional Diversity Network, an HR information provider, closed the period down 47 percent. Within the Technology & Communications segment, Blackhawk Network, Cyan, Gigamon, and Xoom completed their IPOs. Each priced at the middle or high-end of their initial filing ranges, but closed the period trading below their respective first-day closing prices. Also notable was the IPO of big data technology company Tableau Software, which priced its shares above its initial filing range and closed 1H13 trading above its first-day closing price.

2Q13 M&A and Investment Summary

In 2Q13, Petsky Prunier tracked 676 M&A and investment transactions, of which 385 were reported at $36.2 billion in value. Compared to 1Q13, reported volume and value increased 11 percent and 158 percent, respectively. Marketing Technology was the most active segment with 226 deals announced. Of these, 145 were reported at $6.4 billion in aggregate value, up 166 percent from 1Q13. Activity in the segment reflected the utilization of multichannel consumer data to optimize marketing effectiveness, as underscored by Salesforce.com’s acquisitions of ExactTarget for $2.5 million, along with its acquisition of EdgeSpring, SAP’s $1.5 billion acquisition of Hybris, Google’s $1.1 billion acquisition of Waze, Adobe’s $600 million purchase of Neolane, and the $50 million Tenaya Capital-led investment in Hortonworks, among others. Acquisitions accounted for 47 percent of deal activity, with strategic buyers making up 92 percent of announced control transactions. The Information & Business Services segment accounted for 32 percent of acquisitions announced, while quarter-over-quarter value in the segment increased 262 percent. There were 356 investments announced during the quarter, of which 318 were reported at $4.4 billion in value. Marketing Technology was the most active segment among investors, with 151 investments announced, of which 132 were worth $1.2 billion in aggregate reported value. Of the 26 buyout transactions announced, 11 were in the Information & Business Services segment.


2Q13 M&A and Investment Activity($ in Millions)


$6,442 Technology &

Communications $4,448

Software $11,014


$14,319

MARKETING, MEDIA, TECHNOLOGY AND SERVICE INDUSTRIES

2Q12 M&A AND INVESTMENT ACTIVITY ($ in Millions)

Technology, Software, and Information & Business Services Industries 2Q13 M&A and Investment Activity

($ in Millions)


5


M&A and Investment Activity

With 226 deals announced for $6.4 billion, M&A and investment volume and reported value in the Marketing Technology segment increased 16 percent and 385 percent, respectively, from the previous quarter. Cloud-based marketing tools were the main drivers of M&A and investment activity within the Marketing Technology segment during 2Q13. By moving marketing automation and management solutions to the cloud, both on- and offline marketers have been better-equipped to engage customers through the use of real-time targeting analytics. In addition to the acquisitions of EdgeSpring, ExactTarget, Hybris, and SoundBite Communications, transactions involving cloud-based marketing solutions included:

Answers.com’s $37 million acquisition of WebCollage, a cloud-based software firm enabling manufacturing companies to update marketing materials directly from retail shops’ websites

The $15 million Starvest Partners-led investment in RetailNext, a provider of cloud-based applied big data analytics solutions for brick-and-mortar retailers NetSuite’s acquisition of OrderMotion, which provides cloud-based order management and analytics solutions for eCommerce and direct-to-consumer businesses

Together, investments in the Analytics & Reporting and Social Technology subsegments accounted for nearly one-quarter of investment volume in the segment and 28 percent of accompanying value in 2Q13. In addition to the 11 investments in big data analytics providers, venture and growth capital firms also sought out investments in social marketing technology companies, including:

AEA’s $68 million investment in Brand Networks, a leading provider of social software solutions and digital marketing services for some of the world’s largest brands (note, Petsky Prunier advised Brand Networks on its investment)

The $18 million investment in Skytree, a big data analytics company offering software capable of performing machine learning and other advanced analytics methods on massive amounts of data, led by U.S. Venture Partners

The $10 million Fairhaven Capital-led investment in SocialFlow, which offers tools that allow customers to measure the effectiveness of their tweets and Facebook posts

Buyers

Investors continued to make up the majority of activity in the Marketing Technology segment in 2Q13, accounting for 67 percent of deals announced and 19 percent of reported value in the segment. Strategic buyers accounted for 96 percent of control activity with 72 acquisitions announced, while private equity buyers announced three. The Mobile Technology subsegment accounted for 13 percent of strategic buyer activity and 13 percent of venture/growth capital investor activity, reflecting buyers’ interest in mobile monetization platforms in response to continued mobile device and mobile app penetration.

Most Active Marketing Technology Subsegments

Marketing Technology Transactions by Type of Buyer/Investor

Most Active Technology & Communications Subsegments1Q13 2Q13 1H13 vs 2H12 LTM

SubsegmentNumber of

TransactionsReported

Value ($MM)Number of




ValueNumber of


Value ($MM)

Financial Technology 23 1,266 32 182 244% 246% 71 1,866Cloud Computing Technology 13 200 14 2,121 13% 54% 51 3,825Data Center Technology 9 118 11 374 67% 44% 32 833Big Data Technology 10 120 10 130 11% (0%) 38 502Mobile Infrastructure 4 120 10 56 40% (60%) 24 614Cloud Storage 12 85 8 27 0% (62%) 40 408Networking Equipment 10 529 7 325 (67%) (78%) 69 4,717Communications Software 7 83 7 619 (42%) (73%) 38 3,279Enterprise Mobility 14 212 5 80 19% (27%) 35 692Infrastructure Technology 3 424 5 67 NM NM 8 490

Subtotal 105 3,157 109 3,980 11% (29%) 406 17,227Other 14 1,890 16 468 (65%) (29%) 115 5,671

Total 119 5,047 125 4,448 (12%) (29%) 521 22,898

Most Active Marketing Technology Subsegments1Q13 2Q13 1H13 vs 2H12 LTM

SubsegmentNumber of








Value ($MM)

Analytics & Reporting 33 253 32 199 55% 163% 107 624Content Management 21 44 28 144 (38%) (63%) 128 700Mobile Technology 8 179 28 211 57% 154% 59 543BI Tools 11 116 20 243 72% (21%) 49 817CRM 12 93 19 414 158% 410% 43 607Social Technology 27 149 19 152 10% (28%) 88 722Commerce Management 10 161 9 1,523 (24%) 821% 44 1,866SFA/Lead Management 6 47 9 38 (12%) (91%) 32 1,049MRM/Workflow Management 10 9 8 36 (14%) (44%) 39 125Online Targeting/Optimization 8 91 8 630 (30%) 258% 39 922SEM/SEO Tools 1 2 7 46 0% (53%) 16 149Email/Messaging Software 3 1 6 2,538 (25%) 2,212% 21 2,648

Subtotal 150 1,144 193 6,174 7% 112% 665 10,773Other 45 1,276 33 268 24% 230% 141 2,011

Total 195 2,420 226 6,442 9% 126% 806 12,785

Most Active Software Subsegments1Q13 2Q13 1H13 vs 2H12 LTM

SubsegmentNumber of








Value ($MM)

Security 28 343 35 1,582 43% 247% 107 2,479Healthcare 35 484 27 378 0% (47%) 124 2,503Software Development Tools 8 20 22 367 67% 24% 48 698Infrastructure 8 196 18 7,144 (10%) 168% 55 10,082Application Management 15 200 18 189 18% 170% 61 532HR 13 67 14 77 (10%) (93%) 57 2,085Financial 8 338 12 297 (9%) (17%) 42 1,398ERP 18 53 11 264 (17%) (92%) 64 4,348Credit/Risk 4 149 8 24 200% (43%) 16 478Engineering 8 11 8 36 100% (88%) 24 455

Subtotal 145 1,862 173 10,357 14% (5%) 598 25,059Other 25 408 24 657 (25%) 26% 114 1,912

Total 170 2,270 197 11,014 6% (3%) 712 26,971

(% Change)

(% Change)

"Other" includes Ad Serving, Content Delivery Network, Creative Production Platform, Email/Messaging Platform, Market Research Software, Marketing Asset Management, Media Management System, Product/Price Software, Search & Discovery, Segmentation/Data Mining, SEM/SEO Tools, Teleservices/eServices, Web to Print, and Website Creation/Hosting

(% Change)

"Other" includes Collaboration, Data Management, Geo-Demo, Legal, and Software Platform

"Other" includes Internet Service Providers, Messaging & Mediation Software, Satellite & Microwave Equipment, Telephone Equipment, Video Communications Software, VoIP Equipment Software, and Web Conferencing Software

Most Active Technology & CommunicationsSubsegments1Q13 2Q13 1H13 vs 2H12 LTM

SubsegmentNumber of






ValueNumber of


Value ($MM)

Strategic 45 3,122 40 2,799 (35%) (47%) 216 17,070Private Equity - Buyout 3 950 3 648 (60%) 280% 21 2,019Private Equity - VC/Growth Capital 71 975 82 1,001 17% 8% 284 3,809

Total 119 5,047 125 4,448 (12%) (29%) 521 22,898


SubsegmentNumber of








Value ($MM)

Strategic 67 702 72 5,201 (1%) 199% 280 7,874Private Equity - Buyout 5 808 3 8 100% 716% 12 916Private Equity - VC/Growth Capital 123 910 151 1,233 14% 16% 514 3,994Total 195 2,420 226 6,442 9% 126% 806 12,785


SubsegmentNumber of








Value ($MM)

Strategic 72 1,096 90 1,617 12% (70%) 307 11,849Private Equity - Buyout 9 120 9 7,843 (5%) 199% 37 10,623Private Equity - VC/Growth Capital 89 1,054 98 1,555 3% 38% 368 4,498

Total 170 2,270 197 11,014 6% (3%) 712 26,971

Most Active Information & Business Services Subsegments1Q13 2Q13 1H13 vs 2H12 LTM

SubsegmentNumber of








Value ($MM)

Strategic 67 1,525 92 6,945 37% 33% 275 14,844Private Equity - Buyout 11 2,261 11 6,763 0% 128% 44 12,979Private Equity - VC/Growth Capital 45 513 25 612 40% (19%) 120 2,512

Total 123 4,298 128 14,319 34% 59% 439 30,335

(% Change)

(% Change)

(% Change)

(% Change)



There were 94 technology and 31 communications transactions announced in 2Q13, worth $3.0 billion and $1.4 billion in reported value, respectively. Total quarter-over-quarter activity in the Technology & Communications segment increased five percent, while reported value fell 12 percent. The most active subsegment, Financial Technology, in which 32 deals were announced with 25 reported at $182 million in value, was led by activity among mobile payment solution providers. The 11 mobile financial technology transactions announced focused on solutions that enable consumers to make in-store or online payments, including:

The $25 million investment in Clinkle, a mobile payments technology company, from a consortium of investors A $17 million investment in Dwolla, an online payment system and mobile payments network provider, led by Andreessen Horowitz The $14 million investment in payment technology start-up Marqeta, which helps consumers keep and redeem rewards from multiple retailers on a payment card or mobile app, from 23 investors that included Greylock Partners, Granite Ventures, and Commerce Ventures

There were 10 deals announced in the Big Data Technology subsegment, of which seven were reported at $130 million in value. Notable transactions included:

The $25 million investment in MarkLogic, which sells databases built to handle unstructured data, led by Sequoia Capital and Tenaya Capital A $10 million angel investment in Deep Information Sciences, which has developed a multi-purpose database built to handle big data by indexing data in real time and embedding statistical information needed to run analytics

The $9 million investment in Guavus, which makes software to deal with massive data sets produced by telecommunications networks, from the venture arm of Goldman Sachs and TransLink Capital

Buyers

Strategic buyers announced 40 transactions during the quarter, 32 percent of all deals announced. Of those, 12 were reported at $2.8 billion in value. The largest strategic deal during the period was IBM’s $2 billion purchase of SoftLayer Technologies. Thoma Bravo’s $395 million acquisition of Keynote Systems, Avista Capital Partners’ acquisition of Telular, and Perephone Capital Partners’ purchase of Global Relief Technology were the only buyout transactions announced during the quarter. Venture and growth capital investor activity increased 15 percent, while value was flat from 1Q13. Of the 82 investments announced, 25 were in the Financial Technology subsegment.

6

Technology & Communications

Most Active Technology & Communications Subsegments

Technology & Communications Transactions by Type of Buyer/Investor


SubsegmentNumber of






ValueNumber of


Value ($MM)


Subtotal 105 3,157 109 3,980 11% (29%) 406 17,227Other 14 1,890 16 468 (65%) (29%) 115 5,671

Total 119 5,047 125 4,448 (12%) (29%) 521 22,898


SubsegmentNumber of








Value ($MM)


Subtotal 150 1,144 193 6,174 7% 112% 665 10,773Other 45 1,276 33 268 24% 230% 141 2,011

Total 195 2,420 226 6,442 9% 126% 806 12,785


SubsegmentNumber of








Value ($MM)


Subtotal 145 1,862 173 10,357 14% (5%) 598 25,059Other 25 408 24 657 (25%) 26% 114 1,912

Total 170 2,270 197 11,014 6% (3%) 712 26,971

(% Change)

(% Change)


(% Change)




SubsegmentNumber of






ValueNumber of


Value ($MM)


Total 119 5,047 125 4,448 (12%) (29%) 521 22,898


SubsegmentNumber of








Value ($MM)



SubsegmentNumber of








Value ($MM)


Total 170 2,270 197 11,014 6% (3%) 712 26,971


SubsegmentNumber of








Value ($MM)


Total 123 4,298 128 14,319 34% 59% 439 30,335

(% Change)

(% Change)

(% Change)

(% Change)



A total of 197 Software transactions, including 98 minority investments, were announced in 2Q13. Of these, 107 were reported at $11 billion in value. Software Development Tools, driven by the continuing adoption of cloud computing among enterprises, was an active subsegment during the quarter, with 22 deals announced, of which 11 were reported at $367 million in value. Activity in the subsegment increased 175 percent from the previous quarter, and there was an additional $347 million in deal value reported. Notable deals in the Software Development Tools subsegment included:

Intel’s $180 million acquisition of Mashery, a cloud-based manager of application programming interfaces that enable developers to work with different cloud services and software

Facebook’s $85 million acquisition of Parse, which offers paid tools and services for developing mobile apps A $70 million investment in Twilio, which provides Web-service infrastructure application programming interfaces enabling developers to move voice and messaging applications to the cloud

Activity in the Infrastructure Software subsegment also increased in 2Q13, with 18 transactions announced (11 acquisitions and seven investments), up from eight announced in the previous quarter. In addition to the announced $6.9 billion take-private of BMC Software, notable transactions announced in the subsegment during 2Q13 included:

Yahoo’s acquisition of PlayerScale, a start-up that makes software infrastructure technology for cross-platform gaming Twitter’s acquisition of Ubalo, a developer of scalable computing technology

Buyers

There were 90 strategic acquisitions and 98 transactions by venture/growth capital investors announced in 2Q13. Private equity buyers announced nine acquisitions totaling $7.8 billion in reported value.

7

Software

Most Active Software Subsegments

Software Transactions by Type of Buyer/Investor


SubsegmentNumber of






ValueNumber of


Value ($MM)


Subtotal 105 3,157 109 3,980 11% (29%) 406 17,227Other 14 1,890 16 468 (65%) (29%) 115 5,671

Total 119 5,047 125 4,448 (12%) (29%) 521 22,898


SubsegmentNumber of








Value ($MM)


Subtotal 150 1,144 193 6,174 7% 112% 665 10,773Other 45 1,276 33 268 24% 230% 141 2,011

Total 195 2,420 226 6,442 9% 126% 806 12,785


SubsegmentNumber of








Value ($MM)


Subtotal 145 1,862 173 10,357 14% (5%) 598 25,059Other 25 408 24 657 (25%) 26% 114 1,912

Total 170 2,270 197 11,014 6% (3%) 712 26,971

(% Change)

(% Change)


(% Change)




SubsegmentNumber of






ValueNumber of


Value ($MM)


Total 119 5,047 125 4,448 (12%) (29%) 521 22,898


SubsegmentNumber of








Value ($MM)



SubsegmentNumber of








Value ($MM)


Total 170 2,270 197 11,014 6% (3%) 712 26,971


SubsegmentNumber of








Value ($MM)


Total 123 4,298 128 14,319 34% 59% 439 30,335

(% Change)

(% Change)

(% Change)

(% Change)



The Information & Business Services segment remained active in 2Q13 with 128 transactions announced, of which 41 were reported at $14.3 billion in value. An increase in IT budgets and industry demand drove M&A and investment activity in the IT Consulting/Systems Integration subsegment during the quarter, accounting for 30 percent of deals announced and 16 percent of reported value. The majority of value in the subsegment was a result of Thomas H. Lee’s $1.1 billion buyout of CompuCom Systems and OMERS Private Equity’s $608 million acquisition of Civica Group. Additional transactions announced included:

Tata Consultancy Services’ $98 million acquisition of Alti, a France-based IT consulting and engineering company Perficient’s $19 million acquisition of TriTek Solutions, an IBM-focused enterprise content management and business process management consulting firm, and its $8 million acquisition of Clear Task, which provides revenue consulting services based on the Salesforce.com product suite

There were 15 transactions (13 acquisitions and two investments) announced in the BPO subsegment during the quarter, of which seven reported $5.7 billion in value. Largely due to Fidelity National Services’ $3.9 billion acquisition of Lender Processing Services, the BPO subsegment accounted for 40 percent of reported value in the segment. A total of eight BPO transactions announced in 2Q13 were of healthcare and biopharmaceutical outsourcing companies, which included:

Roper Industries’ $1 billion acquisition of Managed Health Care Associates, a provider of services and solutions to support the needs of alternate-site healthcare providers

Frazier Healthcare Venture’s $308 million acquisition of AndersonBrecon (fka: Anderson Packaging), which provides pharmaceutical commercial packaging solutions and clinical trial services for pharmaceutical and biotechnology companies

United Drug subsidiary Ashfield In2Focus’ acquisition of Germany-based Pharmexx, a provider of sales and marketing outsourcing solutions to the healthcare industry

Buyers

Strategic buyers made up the majority of activity in the segment during 2Q13, accounting for 72 percent of deals announced and nearly half the reported value. Venture and growth capital investment activity slowed during the quarter, with only 25 transactions announced, down from 45 in the previous quarter. Private equity buyers announced 11 acquisitions, four of which were in the IT Consulting/Systems Integration subsegment. Of the buyouts announced, six were worth $6.8 billion in aggregate reported value.

8


Most Active Information & Business Services Subsegments

Information & Business Services Transactions by Type of Buyer/Investor


SubsegmentNumber of








Value ($MM)

IT Consulting/Systems Integration 24 304 38 2,259 19% 130% 114 3,678BPO 9 337 15 5,724 243% 257% 31 7,759Market Research 11 63 12 0 (21%) (98%) 52 2,919Financial Information 10 104 8 22 80% (95%) 28 2,486Credit/Risk Management Information 1 1,490 7 406 700% 47,298% 9 1,900Marketing Data 2 251 7 1,461 0% 2,043% 18 1,792Staffing 10 829 7 0 183% 19% 23 1,530Engineering/Scientific/Tech Information 4 37 5 4,400 350% NM 11 4,437Healthcare Information 7 235 4 0 120% 250% 16 303Management Consulting 4 8 4 0 300% NM 10 8

Subtotal 82 3,659 107 14,272 54% 102% 312 26,811Other 41 639 21 47 (5%) (76%) 127 3,524

Total 123 4,298 128 14,319 34% 59% 439 30,335

(% Change)

"Other" includes Contact Center, Corporate Training, Credit/Risk Consulting, Data Processing/Enhancement,Engineering Consulting, Financial Consulting, Fulfillment, Geo-Demo Consulting, Geo-Demo Information, Healthcare Consulting, HR Consulting, HR Information, IT Information, Legal Consulting, Legal Information, Logistics, Printing Services, and Product/Price Information


SubsegmentNumber of






ValueNumber of


Value ($MM)


Total 119 5,047 125 4,448 (12%) (29%) 521 22,898


SubsegmentNumber of








Value ($MM)



SubsegmentNumber of








Value ($MM)


Total 170 2,270 197 11,014 6% (3%) 712 26,971


SubsegmentNumber of








Value ($MM)


Total 123 4,298 128 14,319 34% 59% 439 30,335

(% Change)

(% Change)

(% Change)

(% Change)


9

Recent Transactions

has sold

specializing in retail, digital, shopper marketing, and consumer services

to

along with digital subsidiary

has sold

a provider of online travel guides for top destinations around the world

to

(NYSE: GCI )

has been sold to

a leading multiplatform travel and lifestyle media company

a subsidiary of

has been sold to

the largest provider of cloud-based SaaStools for printing signs, labels, and tags,

and publishing digital displays for retailers

a unit of

(NYSE: LXK)

has received a $68M minority investment from

a leading provider of social software solutions and digital marketing services for some of the world’s largest brands,

one of just 13 Facebook Strategic Preferred Marketing Developers (sPMD)

has been sold to

a real-time behavioral advertising company

has been sold to

a leading provider of digital production services to brands and agencies

has been sold to

a dynamic display media and retargeting company

has been sold to

a leading provider of in-store and shopper marketing signage to major

North American retailers

has been sold to

a leading digital advertising monetization and shopper marketing partner for

eCommerce retailers

with financing from

a portfolio company of

(NYSE: AOL)(NYSE: ACN)

(JASDAQ: 4755)

has received a mezzanine debt investment from

a leading provider of transportation-based digital media networks

has received an equity investment from

a leading digital direct marketing company utilizing a proprietary database to provide

customer acquisition solutions for major brands

has received a $66M investment from

a leader in technology and global in-app advertising for Facebook, Apple (iOS),

and Android developers

has received $15M financingled by

a provider of a cloud-based integration platform for the digital marketing industry

has been sold to

a leader in multichannel retail, eCommerce and loyalty marketing services

with debt financing from

led by

a leader in global healthcare,primary market research and influence

network mapping

the top independentdirect-to-consumer marketer of

dental savings plans has been sold to

a leading data management and audience optimization platform (DMP) company a leading provider of taxi-based

outdoor mediaand

has sold

has been sold to


has been sold to

g p

a unit of

a global digital marketing agency

has been sold to

(NYSE: PAY)

has sold has soldl di d i i h l

a leading provider of services for domain name registration, acquisition, brokerage, and sales

to

(TSX: PTO)

a leading provider of integrated data, technology, and analytics solutions

to

has acquired

a pioneer in measuring the impact of promotion on

physician prescribing behaviorto

a premier provider of affinity programs for universities and colleges

has been sold to

a leading advertising technology company

(Xetra: DPW.DE)

has been sold to

(TSX: PTO)

a leading shopper marketing execution company

has merged with

and


Parthenon Capital Partners


KRG Capital Partners

has been sold to

one of North America’s largest mobile marketing and gateway solution providers

has received a majority investment from

a rapidly growing provider of online and offline performance-based

customer acquisition solutions to a number of the largest suppliers of home

services in the U.S.

has been sold to

(Nasdaq: GSIC)

the leader in attribution management and online advertising analytics


has sold

to

Vestar Capital Partners

10


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Petsky Prunier is one of the leading investment banks in the technology, media, marketing, eCommerce, and healthcare industries.

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John [email protected]

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M&A and Investments Review DeAl Technology, Software, and ...petskyprunier.com/_petskyprunier.com/dynamic/user... · $29.4 $23.7 $19.0 $14.0 $36.2 2q12 3q12 4q12 1q13 2q13 deal volume