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STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI STOCKH
Quarterly Software Report
Q3 2018
21) Median based on revised selection of international software companies (appendix 1)
Source: Mergermarket, Factset and Nordhaven analysis
IDENTIFIED TRANSACTIONS
▪ There were 29 transactions in the software space in the Nordics in Q3 2018
vs. 23 in the previous quarter.
▪ The performance of the Nordic Technology EUR GI index was relatively strong in
Q3 2018 with an increase of 4.6% for the third quarter.
▪ The largest deal activity within Nordic software could be found in Sweden, with
11 identified deals, followed by Norway (8 deals), Denmark (6 deals), Finland
(3 deals) and Iceland (1 deal).
▪ PE buyers were the leading buyer group, completing 16 of the 29 deals, while
strategic buyers completed 13.
▪ Nordic buyers continued to dominate in Q3 with 13 (45%) of the 29 deals,
however we observe an increasing interest from US and Canadian buyers with
10 deals in Q3.
▪ The Nordic discount gap decreased to ~60% compared with international
software companies, based on EV / SALES 2018E multiples.
Inclusion criteria
Announced transactions where a Norwegian, Swedish, Finnish, Icelandic or
Danish-based software company has been sold during the quarter. The company
sold must have the majority of its operations in either of these countries.
Consultancy and IT-service (no software) transactions are not included. Minority
transactions or transactions that does not create a "change-of-control" situation
have also been excluded. Mergermarket is our primary source for identifying
eligible transactions.
NORDIC TECHNOLOGY EUR GI
22
1820
24
1719
28
33
13
21
28
23
29
Q22017
Q12016
Q32016
Q32015
Q42015
Q22016
Q12017
Q42016
Q32017
Q42017
Q12018
Q22018
Q32018
EXECUTIVE SUMMARY
29transactions
in Q3/18
6.3xEV/ sales
international
software
companies
EV / SALES 2018E INTERNATIONAL SOFTWARE COMPANIES
Q3 2016
Q1 2016
6.3x6.9x
Q3 2015
Q4 2015
Q2 2016
Q4 2016
Q1 2017
6.1x
Q3 2017
Q4 2017
Q1 2018
4.6x
Q2 20181
Q320181
4.7x 4.9x 4.9x
6.7x
5.6x 5.8x 6.1x6.7x
Q3 2015 – Q3 2018
0
500
1 000
1 500
2 000
July-15 July-16 July-17 July-18
NORDIC SOFTWARE TRANSACTIONSOVERVIEW OF Q3 2018
3
DEALS BY ACQUIRER’S COUNTRY
DEALS BY EXIT TYPE
DEALS BY TARGET’S COUNTRY
▪ Nordhaven has identified 29 Nordic software transactions in Q3 2018.
▪ 45% of the companies were acquired by trade buyers, which is somewhat lower
than historical average.
▪ Of the equity-backed deals, 14 were platform and 2 were add-on investments.
▪ Sweden completed 11 deals, representing 38% of the total deal activity for the
period.
▪ 45% of the companies were sold to entities in the Nordics, followed by 34% of
acquirers in the US and Canada.
COMMENTS
2
PE - add on
Trade buyer
14
13
PE - platform
13
4
US / Canada
Nordics
2
10
Rest of Europe
Rest of World
3
8
NorwayDenmark
6
11
Finland
Sweden
1
Iceland
Source: Mergermarket and Nordhaven analysis
NORDIC SOFTWARE TRANSACTIONSQUARTER-BY-QUARTER DEVELOPMENT
4
NUMBER OF TRANSACTIONS
BREAKDOWN OF DEALS BY TARGET’S COUNTRY
BREAKDOWN OF DEALS BY ACQUIROR’S REGION
BREAKDOWN OF DEALS BY EXIT TYPE
42%
Q3 16
24%
6%
22%
72%
32%
33%26%
Q4 16
25%
Q2 18
14%
61%
0%
Q1 17 Q2 17
12%
52%
36%
7%
38%
62%
Q3 17
43%
Q4 17
14%
14%
71%
Q1 18
48%
13%
30%
57%45%
Q3 18
PE - platformPE - add on Trade buyer
28%
42%
Q4 17
22%
3%
17%
22%
Q3 16
18%
21%
21%
16%
48%
15%
Q4 16
36%
18%
29%
Q1 17
18%
42%
27%
21%
9%
Q2 17
46%
31%
8%
0%
Q3 17
38%
14%
38%28%
32%
14%
Q1 18
35%
22%
36%
Q2 18
21%
Q3 18
28%
10%26%
NorwaySweden IcelandDenmark Finland
69%
0%
6%
24%25%
58%
11%
Q3 18
7%0%4%
21%
31%
11%
Q4 16
25%
68%
25%
15%
5%
4%4%
46%
Q1 17
58%
30%
6%
6%
71%
Q2 17
8%
Q3 17Q3 16
0%
Q4 17
54%
18%
4%
17%
78%
Q2 18
45%
34%
14%
Q1 18
Rest of WorldRest of EuropeNordics US / Canada
1719
28
33
13
21
28
23
29
Q1 18Q3 16 Q4 16 Q1 17 Q2 17 Q4 17Q3 17 Q2 18 Q3 18
Source: Mergermarket and Nordhaven analysis
NOTABLE TRANSACTIONS DURING Q3 2018
5
provider of maritime charts,
publications and navigational etc.
Provider of HR and payroll
solutions and outsourcing
services
Provider of computer-aided
design (CAD) software
Retail software solutions
Retail software solutions
Software for marketplace tech
solutions
95.11
22.7
62.0
25.3
9.2
68.62
44.3
35.6
131.5
TARGET ACQUIRORREVENUE 2017 (MEUR) SELLER
NHST Media Group AS
Private
Corporate
Divestment of Visma Retail
Private
Providing web content
management and online
community platforms
Private
Listed
Private
Listed
Private
Software for interactive
entertainment
Mobile and web-based case
management system for
craftsmen and contractors)
Software mobile solutions and
mobile services
NA
1) Sum of revenues for all the acquired units 2) Assumed 34% growth in sales from FY 2016
Source: Mergermarket, Valu8 and Nordhaven analysis
SELECTED SOFTWARE TRANSACTION MULTIPLES (EV / SALES) – LAST 12 MONTHS
6
Q3 2018
Q3 2017
Q4 2017
Q3 2017
Q3 2017
Software for documentation of chemicals
Software for smart grid / customer interaction
Open-source software for web design
Software for marketplace tech solutions
Software for payment solutions
Software for customs clearance and freight forw.Q4 2017
4.6x
14.5x1
1.2x
4.6x2
4.0x
3.1x3
2.2x2
3.8x
3.1x
1.8x
Software for mobile solutions and mobile servicesQ3 2018
Software providing web content management etc.Q3 2018
Q3 2018 Software for interactive entertainment
Q4 2017 Software for document sharing
TARGET ACQUIROREXIT MULTIPLE
1) Assumed 34% growth in sales from FY 2016 2) LTM Q2 2018 3) Assumed no debt
Source: Mergermarket, Factset, Valu8 and Nordhaven analysis
TRADING MULTIPLES OF SELECTED NORDIC AND INTERNATIONAL SOFTWARE COMPANIES
7
BaswareFortnox Vitec Software F-SecureSimCorp Hexagon HMS Network Micro
Systemation
Tobii CLX
Communication
16.8x1
2.0x
12.5x1
3.4x
6.3x
8.5x7.6x
5.4x
6.7x
3.4x
5.8x
3.2x
4.7x3.7x4.1x
3.0x2.3x
2.9x2.0x 1.5x
2017
2018E
Median: 3.8x
CitrixAdobe Systems Workday MicrosoftAutodesk
13.7x
GuideWire Salesforce
5.5x
10.7x
Ultimate Software SAP
17.6x
14.2x
16.8x
13.8x
5.3x
11.6x10.8x
9.5x 9.2x10.3x
8.5x7.4x
6.4x5.7x 5.4x
2017
2018E
NORDIC
EV/ SALES
INTERNATIONAL
EV/ SALES
Median: 6.3x2
1) October 10, 2018 Factset 2) Median based on full selection of international software companies, see appendix 1
Source: Mergermarket and Factset (October 4, 2018)
LIST OF IDENTIFIED NORDIC SOFTWARE TRANSACTIONS IN Q3 2018
8
# TARGET TARGET COUNTRY BIDDER BIDDER COUNTRY DATE TYPE
1 Visma Retail AS; Wallmob A/S; Abalon
AB; NYCE Solutions AB; Visma Retail
Software AS; Visma Retail AB
Norway Symphony Technology Group US / Canada September PE - platform
2 Extenda AB Sweden Symphony Technology Group US / Canada September PE - platform
3 Mouseflow ApS Denmark Offspring Capital APS Nordics September PE - platform
4 Cinnober Financial Technology AB Sweden Nasdaq Inc US / Canada September Trade buyer
5 Hemsida24 AB Sweden Miss Group Holdings Ltd Rest of Europe September Trade buyer
6 Top Data Science Oy/Ltd. Finland Morpho, Inc. Rest of World September Trade buyer
7 Inovia group AB Sweden Verdane Capital Advisors AS Nordics September PE - platform
8 EPiServer AB Sweden Insight Venture Partners LLC US / Canada September PE - platform
9 CCP hf. Iceland Pearl Abyss Corp. Rest of World September Trade buyer
10 C&B Systemer A/S Denmark VIA Equity A/S Nordics September PE - platform
11 Nautisk Forlag AS Norway StormGeo AS Nordics September PE - add on
12 Revide AB Sweden Novax AB Nordics September PE - platform
13 Zisson AS (70% Stake) Norway Verdane Capital Advisors AS Nordics September PE - platform
14 Penetrace AS (70% Stake) Norway Verdane Capital Advisors AS Nordics September PE - platform
15 ArcCore AB Sweden Vector Informatik GmbH Rest of Europe August Trade buyer
16 caseon.dk ApS Denmark Adelis Equity Partners AB Nordics August PE - add on
17 Bookbites A/S Denmark Jan Gaardboe Jensen (Private Investor) Nordics August PE - platform
18 Aditro Public Oy Finland Visma Group Nordics August Trade buyer
19 Op5 AB Sweden ITRS Group Limited Rest of Europe August Trade buyer
20 Teklatech A/S Denmark Synopsys, Inc. US / Canada July Trade buyer
21 Wellbarrier AS Norway Schlumberger Limited US / Canada July Trade buyer
22 Dogu AS Norway Spring Dogu Holding AS Nordics July PE - platform
23 Yanzi Networks AB Sweden Sjatte AP-fonden; Pegasus Capital Advisors LP US / Canada July PE - platform
24 Widespace AB Sweden Sellbranch AB Nordics July Trade buyer
25 Compusoft AS Norway TA Associates Management, L.P. US / Canada July PE - platform
26 Draupner Graphics A/S Denmark STMicroelectronics NV Rest of Europe July Trade buyer
27 Infomaker Scandinavia AB Sweden NEWSCYCLE Solutions, Inc. US / Canada July Trade buyer
28 Livion Oy (Remote monitoring and
analysis service business)
Finland Envera Oy Nordics July Trade buyer
29 Link Mobility Group ASA Norway ABRY Partners, LLC US / Canada July PE – platform
Source: Mergermarket and Nordhaven analysis
NORDHAVEN IN SHORT CORE SECTOR EXPERTICE
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
TMT
SystemsProfessionals
Sweet spot
deal value
Years experience
Transactions
advised
~30
+260
+400
MEUR
10-100
INDUSTRIALS
Nordhaven is the leading independent M&A finance advisor in the Nordic market
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.
STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI STOCKH
HELSINKI
Eteläranta 12
+358 207 613 910
OSLO
Heyerdahls gate 1
+47 215 070 00
STOCKHOLM
Östermalmstorg 1
+46 85 025 6700
APPENDIX 1: FULL SELECTION OF INTERNATIONAL SOFTWARE COMPANIESEV/ SALES
Revised selection of international companies due to recent stock listings and developments in the software market
2017A 2018E
Workday 13,8x 10,7x
Adobe Systems 17,6x 14,2x
Autodesk 16,8x 13,7x
ServiceNow 17,3x 12,9x
GuideWire 10,8x 9,5x
Salesforce 11,6x 9,2x
Dassault Systems 9,8x 9,2x
Intuit Inc 9,7x 8,7x
Ultimate Software 10,3x 8,5x
Tableau Software 9,1x 8,1x
Check Point Software 8,9x 8,7x
Red Hat 7,0x 6,9x
Microsoft 7,4x 6,4x
Vmware 6,9x 6,2x
eGain Corporation 3,4x 3,2x
Cornerstone Ondemand 6,5x 6,0x
Enghouse Systems 6,1x 5,8x
Citrix 5,5x 5,3x
Constellation Software 6,0x 5,0x
SAP 5,7x 5,4x
Oracle 4,7x 4,7x
Cerner 4,0x 3,8x
Sage Group 4,0x 3,7x
Nuance Communications 3,6x 3,4x
Symantec Corporation 3,2x 3,3x
Progress Software 3,9x 3,9x
Median 6,9x 6,3x
EV/ Sales forecast as of October 4, 2018
Source: Mergermarket and Factset