Supply Chain Tech & Software · 4 Dashboard Operating Metrics Valuation Revenue Growth -0.03 1 - year revenue growth compared to revenue growth average for last 3 years Pricing

Sectorwatch:Supply Chain Tech & SoftwareJanuary 2019

2

Supply Chain Tech & SoftwareJanuary 2019

Sector Dashboard [4]

Public Basket Performance [5]

Operational Metrics [7]

Valuation Comparison [10]

Recent Deals [13]

Appendix [15]

7 Mile Advisors appreciates the opportunity to present this confidential information to the Company. This document is meant to bedelivered only in conjunction with a verbal presentation, and is not authorized for distribution. Please see the Confidentiality Notice &Disclaimer at the end of the document. All data cited in this document was believed to be accurate at the time of authorship and camefrom publicly available sources. Neither 7 Mile Advisors nor 7M Securities make warranties or representations as to the accuracy orcompleteness of third-party data contained herein. This document should be treated as confidential and for the use of the intendedrecipient only. Please notify 7 Mile Advisors if it was distributed in error.

3

Overview

7MA provides Investment Banking & Advisory Services to the Business Services and TechnologyIndustries globally. We advise on M&A and private capital transactions, and provide market assessmentsand benchmarking. As a close knit team with a long history together and a laser focus on our targetmarkets, we help our clients sell their companies, raise capital, grow through acquisitions, and evaluatenew markets. We publish our sectorwatch, a review of M&A and operational trends in the industries wefocus.

Dashboard• Summary metrics on the sector• Commentary on market momentum by

comparing the most recent 12-month performance against the last 3-year averages.

Public Basket Performance• Summary valuation and operating metrics

for a basket of comparable public companies

Valuation Comparison• Graphical, detailed comparison of valuation

multiples for the public basket

Recent Deals• The most recently announced deals in the

sector

4

Dashboard

Operating Metrics

Valuation

Revenue Growth

-0.03 1 - year revenue growth compared to revenue growth

average for last 3 years

Pricing / Gross Margin Momentum

1.6% 1 - year gross profit % compared to gross profit %

average for last 3 years

Profitability

-1.7% 1 - year EBITDA % compared to EBITDA % average for

last 3 years

Current revenue growth rate is less than the average of the last 3 years,

indicating that the market may be flattening or declining

Current gross profit margin exceeds the average of the last 3 years gross profit

margin by this amount, indicating supplier pricing power

Current EBITDA margin is less than the average of the last 3 years EBITDA

margins, which may signal further consolidation

5.8%

23.4%

69.2%

0% 20% 40% 60% 80%

Median LTM Rev. Growth %

Median LTM EBITDA Margin %

Median LTM GP Margin %

5.1x

20.9x

21.4x

33.4x

0x 10x 20x 30x 40x

Median TEV / LTM Revenue

Median TEV / LTM EBITDA

Median TEV / LTM EBIT

Median Price / LTM Earnings

5

Public Basket

Company TEV $mLTM Rev

$m

Rev Growth

YoY GP %EBITDA

%TEV / Rev X

TEV / EBITDA

X # FTEsRev / FTE $k

American Software, Inc. 257 115 8% 54% 10% 2.2 21.7 462 249

Basware Oyj 629 168 -4% 24% 4% 3.8 99.9 1,829 92

Kinaxis Inc. 1,259 147 14% 70% 21% 8.8 42.3 453 324

The Descartes Systems Group Inc 2,332 268 18% 73% 32% 8.8 27.4 1,235 217

Manhattan Associates, Inc. 3,033 559 -7% 58% 27% 5.4 20.0 2,790 200

Coupa Software Incorporated 4,276 239 40% 69% -14% 17.9 0.0 833 287

SAP SE 127,522 27,983 3% 70% 26% 4.6 17.9 88,543 316

Oracle Corporation 185,027 39,893 3% 80% 40% 4.6 11.6 137,000 291

Average 40,542 8,671 9% 62% 18% 7.0 30.1 29,143 247

Median 2,682 253 6% 69% 23% 5.0 20.8 1,532 268

share price as of 24Jan19

6

Public Basket Valuation Trends

Public EBITDA Multiples over Time

Public Revenue Multiples over Time

0x

2x

4x

6x

8x

Apr-

14

Jul-

14

Oct-

14

Jan-1

5

Apr-

15

Jul-

15

Oct-

15

Jan-1

6

Apr-

16

Jul-

16

Oct-

16

Jan-1

7

Apr-

17

Jul-

17

Oct-

17

Jan-1

8

Apr-

18

Jul-

18

Oct-

18

Jan-1

9

TEV/Revenue - Median TEV/Revenue - Average

0x

10x

20x

30x

Apr-

14

Jul-

14

Oct-

14

Jan-1

5

Apr-

15

Jul-

15

Oct-

15

Jan-1

6

Apr-

16

Jul-

16

Oct-

16

Jan-1

7

Apr-

17

Jul-

17

Oct-

17

Jan-1

8

Apr-

18

Jul-

18

Oct-

18

Jan-1

9

TEV/EBITDA - Median TEV/EBITDA - Average20.7x

4.8x

0x

5x

10x

15x

20x

25x

30x

Apr-

14

Jul-

14

Oct-

14

Jan-1

5

Apr-

15

Jul-

15

Oct-

15

Jan-1

6

Apr-

16

Jul-

16

Oct-

16

Jan-1

7

Apr-

17

Jul-

17

Oct-

17

Jan-1

8

Apr-

18

Jul-

18

Oct-

18

Jan-1

9

TEV/EBITDA - Median TEV/Revenue - Median

TEV/EBITDA - Average TEV/Revenue - Average

7

Operational Metrics

LTM Gross Profit Margin % LTM EBITDA %

(20%) (10%) - 10% 20% 30% 40%

Median

Coupa SoftwareIncorporated

Basware Oyj

American Software, Inc.

Kinaxis Inc.

SAP SE

Manhattan Associates,Inc.

The Descartes SystemsGroup Inc

Oracle Corporation

- 20% 40% 60% 80%

Median

Basware Oyj


Manhattan Associates, Inc.


SAP SE

Kinaxis Inc.


Oracle Corporation

8

Operational Metrics

LTM Revenue Growth %LTM Revenue per

Full Time Employee x 000’s

(10%) - 10% 20% 30% 40%

Median

Manhattan Associates,Inc.

Basware Oyj

Oracle Corporation

SAP SE


Kinaxis Inc.



$- $100 $200 $300 $400

Median

Basware Oyj





Oracle Corporation

SAP SE

Kinaxis Inc.

9

Operational Metrics

Accounts Receivable TurnoverAverage Days

Sales Outstanding

0x 2x 4x 6x 8x 10x 12x

Median

SAP SE

Kinaxis Inc.

Basware Oyj





Oracle Corporation

0 20 40 60 80

Median

Oracle Corporation

The DescartesSystems Group Inc

American Software,Inc.

ManhattanAssociates, Inc.


Basware Oyj

Kinaxis Inc.

SAP SE

10

Valuation

TEV / LTM Revenue TEV / LTM EBITDA

0x 4x 8x 12x 16x 20x

Median


Basware Oyj

Oracle Corporation

SAP SE


Kinaxis Inc.



0x 30x 60x 90x 120x

Median

Oracle Corporation

SAP SE




Kinaxis Inc.

Basware Oyj

11

Valuation

TEV / LTM EBIT Price / LTM Earnings

0x 20x 40x 60x

Median

Oracle Corporation

SAP SE



Kinaxis Inc.


0x 20x 40x 60x 80x 100x

Median

SAP SE



Oracle Corporation


Kinaxis Inc.

12

Valuation

Historical Valuation Multiples versus Gross Profit

Historical Valuation Multiples versus Revenue Growth Rate

12x 18x 20x 22x 27x 42x 100x

79.6%

69.6%

57.6%

53.9%

72.8%

69.8%

23.9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0x

20x

40x

60x

80x

100x

120x

LTM

GP%

EBIT

DA(x

)

EBITDA(x) LTM GP%

12x 18x 20x 22x 27x 42x 100x

2.8%

3.0%

(6.6%)

8.5%

18.2%

13.7%

(3.9%)

-10%

-5%

0%

5%

10%

15%

20%

0x

20x

40x

60x

80x

100x

120x

LTM

RG

R%

EBIT

DA(x

)

EBITDA(x) LTM RGR%

13

Recent TransactionsDate Target Buyer / Investor

Total Transaction

Value Target

Revenue TEV /

Revenue TEV /

EBITDA

11Dec18 IQMS Inc. Dassault Systèmes SE 425.00 56.00 7.6x -

4Dec18 Hiperos, LLC Coupa Software Incorporated 95.00 - - -

11Nov18 athenahealth, Inc. Veritas Capital Fund Management, LLC; Evergreen Coast Capital Corp.

5,941.90 1,311.40 4.3x 21.3x

28Oct18 Red Hat, Inc. International Business Machines Corporation 35,690.94 3,156.59 10.7x 54.4x

20Jun18 Web.com Group, Inc. Siris Capital Group, LLC 2,064.66 750.84 2.7x 14.3x

4Jun18 GitHub, Inc. Microsoft Corporation 7,500.00 - - -

21May18 Magento, Inc. Adobe Systems Incorporated (nka:Adobe Inc.) 1,680.00 150.00 11.2x -

12Apr18 CSF Solutions GmbH BluJay Solutions Ltd - - - -

20Mar18 MuleSoft, Inc. salesforce.com, inc. 6,811.58 296.46 22.3x NM

15Mar18 FSE Inc. Gladson Interactive, Inc. - - - -

12Feb18 Amber Road, Inc. E2open, LLC 323.51 79.08 4.0x -

29Jan18 Callidus Software Inc. SAP America, Inc. 2,576.42 253.09 9.6x NM

11Jan18 Forecast Solutions SL Retail Logistics Excellence - RELEX Oy - - - -

8Dec17 Honeywell International Inc. - 8,000.00 39,676.00 - -

7Dec17 Honeywell International Inc. - 444.86 39,676.00 - -

15Sep17 InfoZen, Inc. ManTech International Corporation 180.00 - - -

14Aug17 MacroPoint, LLC The Descartes Systems Group Inc 106.60 12.50 8.5x -

7Jul17 Perfect Commerce, LLC Proactis Holdings PLC 132.50 39.67 3.3x 20.6x

1Jun17 PCSTrac, Inc. The Descartes Systems Group Inc 11.50 - - -

18May17 Z-Firm LLC The Descartes Systems Group Inc 17.00 - - -

23Dec16 Datamyne, Inc. The Descartes Systems Group Inc 55.18 - - -

6Sep16 LogFire, Inc. Oracle Corporation - - - -

13Jul16 Imprivata, Inc. Thoma Bravo, LLC; Thoma Bravo Fund XII, L.P. 521.03 131.14 3.8x NM

1Jul16 Intelligrated Inc. (nka:Honeywell Intelligrated, Inc.) Honeywell Sensing and Productivity Solutions 1,500.00 - - -

23Jun16 Predictix LLC Infor (US), Inc. 125.00 21.68 - -

7Apr16 Suzhou Supply Chain Technology Co., Ltd. Jiangsu Hongtu High Technology Co., Ltd. 120.62 20.68 5.8x -

12Jan16 Enroute Systems Corporation Pitney Bowes Inc. 14.00 - - -

11Dec18 IQMS Inc. Dassault Systèmes SE 425.00 56.00 7.6x -

14

APPENDIX:

Public Basket

Constituents

7 Mile Advisors appreciates the opportunity to present this confidential information to the Company. This document is meant to bedelivered only in conjunction with a verbal presentation, and is not authorized for distribution. Please see the Confidentiality Notice &Disclaimer at the end of the document. All data cited in this document was believed to be accurate at the time of authorship and camefrom publicly available sources. Neither 7 Mile Advisors nor 7M Securities make warranties or representations as to the accuracy orcompleteness of third-party data contained herein. This document should be treated as confidential and for the use of the intendedrecipient only. Please notify 7 Mile Advisors if it was distributed in error.

Supply Chain Tech & SoftwareJanuary 2019

15

Public Basket


American Software, Inc. develops, markets, and supports aportfolio of software and services worldwide. It operates inthree segments: Supply Chain Management (SCM), InformationTechnology (IT) Consulting, and Other. The SCM segmentprovides supply chain management and retail planningsolutions, including sales and operations planning, demand andinventory optimization, manufacturing planning and scheduling,supply optimization, retail allocation and merchandise planning,and transportation optimization solutions to streamline andoptimize the forecasting, inventory, production scheduling,production, supply, allocation, distribution, and management ofproducts between trading partners. This segment also offerscloud solutions for supply chain management, product lifecyclemanagement, vendor quality, and vendor compliance andcorporate social responsibility for brand retailers andmanufacturers; and analytics and business intelligence solutionsfor the supply chain market. The IT Consulting segment offersIT staffing and consulting services, such as professionalservices/product management/project management, staffaugmentation, and social media and analytic marketing, as wellas cloud, collaboration, network, and security services forsoftware enhancement, documentation, update, customereducation, consulting, systems integration, maintenance, andother support services. American Software, Inc. was founded in1970 and is headquartered in Atlanta, Georgia.

0x

1x

2x

3x

4x

5x

Revenue Multiples - American Software, Inc.

TEV/Revenue Average

0x

10x

20x

30x

EBITDA Multiples - American Software, Inc.

TEV/EBITDA Average

0x

10x

20x

30x

40x

50x

P/E Multiples - American Software, Inc.

P/E Average

16

Public Basket

Basware Oyj

Basware Oyj provides networked purchase-to-pay solutions,and e-invoicing and financing services for organizations inFinland and internationally. The company offers accountspayable automation software; e-procurement solutions;InvoiceReady, a purchase-to-pay solution for invoice handling;strategic sourcing solutions; purchase to pay analytics solutions;business consulting solutions; and travel and expensemanagement solutions. The company also provides sendingand receiving e-invoicing, paper invoice, PDF e-invoice, and e-archiving solutions; supplier management solutions; BaswareDiscount, a win-win solution for buyers and suppliers; andBasware Pay, a payment solution. Basware Oyj was founded in1985 and is headquartered in Espoo, Finland.

Date Key Development Headline11/15/18 Tradeshift Inc. made an offer to acquire Basware Oyj

(HLSE:BAS1V) from Arrowgrass Capital Partners LLP and others.

2/27/18 Verdane Capital completed the acquisition of Financial Performance Solutions and Banking businesses from BasWare Oyj (HLSE:B.

2/1/18 Verdane Capital signed an agreement to acquire Financial Performance Solutions and Banking businesses from BasWareOyj (HLSE:BAS1V) for €35 million.

0x

1x

2x

3x

4x

5x

6x

Revenue Multiples - Basware Oyj

TEV/Revenue Average

0x

50x

100x

150x

200xEBITDA Multiples - Basware Oyj

TEV/EBITDA Average

0x

50x

100x

150x

200x

250x

P/E Multiples - Basware Oyj

P/E Average

17

Public Basket

Kinaxis Inc.

Kinaxis Inc. provides cloud-based software for supply chainoperations. The company offers RapidResponse, which providessupply chain planning and analytics capabilities for managingvarious supply chain management processes, including supplyplanning, inventory management, order fulfillment, capacityplanning, and master scheduling, as well as sales andoperations planning process. It also offers professional services,such as implementation, technical, and training services, as wellas maintenance and support services to its software products.The company serves enterprises operating in various industries,including aerospace and defense, automotive, consumerproducts, high tech and electronics, industrial, and life sciences.Kinaxis Inc. sells its products in Canada, the United States,Europe, and Asia. The company was formerly known aswebPLAN Inc. and changed its name to Kinaxis Inc. in May2005. Kinaxis Inc. was founded in 1984 and is headquartered inOttawa, Canada.

0x

3x

6x

9x

12x

15xRevenue Multiples - Kinaxis Inc.

TEV/Revenue Average

0x

20x

40x

60x

80x

EBITDA Multiples - Kinaxis Inc.

TEV/EBITDA Average

0x

50x

100x

150x

200x

P/E Multiples - Kinaxis Inc.

P/E Average

Date Key Development Headline1/8/19 Ernst & Young LLP (EY UK) and Kinaxis Inc. Announces Forming

of Alliance

18

Public Basket

The Descartes Systems Group Inc

The Descartes Systems Group Inc. provides federated networkand logistics technology solutions worldwide. Its LogisticsApplication Suite offers a range of modular, cloud-based, andinteroperable Web and wireless logistics managementapplications. The company’s Logistics Application Suite offerssolutions, such as route planning and execution, mobileapplications, and telematics and compliance; transportationmanagement solutions comprising carrier compliance and ratemanagement, freight audit and settlement, dock schedulingand yard management, pool distribution, transportationplanning and execution, and logistics flow control, as well asvisibility, tracking, and performance management; and globallogistics network services, such as document management,community, and connectivity services. The company wasfounded in 1981 and is headquartered in Waterloo, Canada.

Date Key Development Headline8/21/18 The Descartes Systems Group Inc (TSX:DSG) acquired PinPoint

GPS Solutions Inc. for CAD 18 million.

6/24/18 The Descartes Systems Group Inc (TSX:DSG) acquired certain assets from Velocity Mail for $25.5 million.

3/5/18 The Descartes Systems Group Seeks Acquisitions

0x

3x

6x

9x

12x

15xRevenue Multiples - The Descartes Systems

Group Inc

TEV/Revenue Average

0x

15x

30x

45x

60xEBITDA Multiples - The Descartes Systems

Group Inc

TEV/EBITDA Average

0x

30x

60x

90x

120x

150xP/E Multiples - The Descartes Systems Group

Inc

P/E Average

19

Public Basket


Manhattan Associates, Inc. develops, sells, deploys, services,and maintains software solutions to manage supply chains,inventory, and omni-channel operations for retailers,wholesalers, manufacturers, logistics providers, and otherorganizations. The company provides supply chain solutions,including distribution management, transportationmanagement, and visibility solutions; omni-channel solutions;and inventory optimization and planning solutions. It also offersManhattan SCALE, a portfolio of logistics execution solutionsthat provide trading partner management, yard management,optimization, warehouse management, and transportationexecution services; Manhattan Active solutions; andmaintenance services. In addition, the company providesprofessional services, such as solutions planning andimplementation, and related consulting services; and trainingand change management services. Further, it resells computerhardware, radio frequency terminal networks, radio frequencyidentification chip readers, bar code printers and scanners, andother peripherals. It offers products through direct salespersonnel, as well as through partnership agreements withvarious organizations in the Americas, Europe, the Middle East,Africa, and the Asia Pacific. Manhattan Associates, Inc. wasfounded in 1990 and is headquartered in Atlanta, Georgia.

0x

3x

6x

9x

12x

15xRevenue Multiples - Manhattan Associates,

Inc.

TEV/Revenue Average

0x

10x

20x

30x

40xEBITDA Multiples - Manhattan Associates, Inc.

TEV/EBITDA Average

0x

20x

40x

60x

80xP/E Multiples - Manhattan Associates, Inc.

P/E Average

20

Public Basket

Coupa Software Incorporated

Coupa Software Incorporated provides cloud-based spendmanagement platform. The company’s platform connectsorganization with suppliers globally; and provides visibility intoand control over how companies spend money, as well asenables businesses to achieve savings that drive profitability. Itsplatform consists of procurement, invoicing, and expensemanagement modules that form its transactional engine andcapture a company’s spend; and offers supporting modules,including sourcing, spend analysis, contract management,supplier management, and inventory management. Thecompany markets its platform to a range of enterprises invarious industries, such as healthcare and pharmaceuticals,retail, financial services, manufacturing, technology, and othersprimarily through a direct sales force worldwide. The companywas founded in 2006 and is headquartered in San Mateo,California.

Date Key Development Headline12/9/18 Coupa Software Incorporated (NasdaqGS:COUP) acquired

Hiperos, LLC from Opus Global Holdings and GTCR Fund X/C, L.P., managed by GTCR, LLC for approximately $95 million.

10/14/18 Coupa Software Incorporated (NasdaqGS:COUP) acquired Aquiire, Inc. from Vora Ventures LLC and others.

9/3/18 Coupa Software Incorporated (NasdaqGS:COUP) acquired DCR Workforce, Inc.

0x

10x

20x

30xRevenue Multiples - Coupa Software

Incorporated

TEV/Revenue Average

21

Public Basket

SAP SE

SAP SE operates as an enterprise application software, andanalytics and business intelligence company worldwide. It offersSAP HANA, which enables businesses to process and analyzelive data; SAP Data Hub, a solution that enables businesses tomanage data from various sources; SAP Cloud Platform, whichenables businesses to connect and integrate applications; SAPBW/4HANA, a data warehouse solution; SAP Leonardo, asystem that enables customers to make business sense andopportunity of disruptive technologies; and SAP AnalyticsCloud, which leverages the intersection of business intelligence,planning, and predictive analytics. SAP SE was founded in 1972and is headquartered in Walldorf, Germany.

Date Key Development Headline12/17/18 SAP and Software AG Launch Joint Platform for Smart Cities

12/17/18 Lition Signs a Co-Innovation Agreement with SAP SE

11/20/18 Tata Consultancy Services Partners with SAP to Build Intelligent Rail Digital Maintenance

11/18/18 SAP SE (DB:SAP) acquired Contextor SAS.

11/16/18 SAP To Seek Acquisitions

0x

2x

4x

6x

8xRevenue Multiples - SAP SE

TEV/Revenue Average

0x

10x

20x

30xEBITDA Multiples - SAP SE

TEV/EBITDA Average

0x

10x

20x

30x

40xP/E Multiples - SAP SE

P/E Average

22

Public Basket

Oracle Corporation

Oracle Corporation develops, manufactures, markets, sells,hosts, and supports application, platform, and infrastructuresolutions for information technology (IT) environmentsworldwide. The company provides services in three primarylayers of the cloud: Software as a Service, Platform as a Service,and Infrastructure as a Service. It offers human capital andtalent management, enterprise resource planning, customerexperience and relationship management, procurement, supplychain management, project portfolio management, businessanalytics and enterprise performance management, andindustry-specific application software, as well as financialmanagement and governance, and risk and complianceapplications. -Oracle Corporation was founded in 1977 and isheadquartered in Redwood City, California.

Date Key Development Headline11/14/18 Oracle Corporation (NYSE:ORCL) entered into an agreement to

acquire Talari Networks, Inc.

11/14/18 Tele2 Russia, Oracle Expand Cooperation on Cloud Services

10/21/18 Oracle Corporation (NYSE:ORCL) signed an agreement to acquire DataFox Intelligence, Inc.

10/16/18 Oracle Corporation (NYSE:ORCL) entered into an agreement to acquire goBalto, Inc.

9/25/18 Oracle Corporation (NYSE:ORCL) acquired an unknown minority stake in Screening Room Inc. for $2.5 million.

0x

2x

4x

6x

8x

Revenue Multiples - Oracle Corporation

TEV/Revenue Average

0x

5x

10x

15x

20x

EBITDA Multiples - Oracle Corporation

TEV/EBITDA Average

0x

20x

40x

60x

80x

P/E Multiples - Oracle Corporation

P/E Average

23

7MA provides Investment Banking & Advisory Services to the Business Services and Technology Industries globally. We advise on M&Aand private capital transactions and provide market assessments and benchmarking. As a close-knit team with a long history togetherand a laser focus on our target markets, we help our clients sell their companies, raise capital, grow through acquisitions, and evaluatenew markets. Securities offered through 7M Securities LLC.

CONTACT INFO

Leroy Davis, Partner 704.899.5962 [email protected]

Tripp Davis, Partner 704.899.5762 [email protected]

Andy Johnston, Partner 704.899.5961 [email protected]

Ben Lunka, Managing Director 704.496.2995 [email protected]

Jeff Stoecklein, Managing Director 312.796.9330 [email protected]

Mark Landry, Managing Director 561.972.0609 [email protected]

Kristina Sergueeva, Director 704.899.5149 [email protected]

Neil Churman, Director 281.742.9340 [email protected]

John Cooper, Director 704.973.3996 [email protected]

Tim Frye, Director 704.973.3994 [email protected]

Nicholas Prendergast, Financial Analyst 704.973.3995 [email protected]

Ariail Siggins, Marketing Director 704.981.2908 [email protected]

Sydney Larese, Associate 704.973.3998 [email protected]

Marty Johnson, Associate 704.973.3999 [email protected]

Rory Julyan, Associate 704.981.2520 [email protected]

Garth Martin, Associate 704.973.3997 [email protected]

Dennis Fox, Associate 704.706.9168 x 119 [email protected]

Steve Buffington, Associate 704.960.1828 [email protected]

Documents

Supply Chain Tech & Software · 4 Dashboard Operating Metrics Valuation Revenue Growth -0.03 1 - year revenue growth compared to revenue growth average for last 3 years Pricing