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

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