2015 real estate tech & software update
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SEG-Landscape: Sector Public/Private Capital
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Multi-Family Commercial/Corporate “For Sale”
Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL
Real Estate Software Market Update & Ecosystem / Landscape of Software Providers
January 2015
About SEG
• Twenty-two year, exclusive focus on software advisory services to lower & middle market representing companies seeking:• Strategic exit• Growth capital• Buyout• Inorganic growth via acquisition• Fairness opinions and valuations• Board advisory services
• Clients span virtually every technology, product category, delivery model and vertical market
• Global presence providing advice and guidance to more than 2,000 private and public companies throughout US, Canada, Europe, Asia-Pacific, Africa and Israel
• Strong cross-functional team leveraging transaction, operating, legal and engineering experience
• Unparalleled software industry reputation, track record and industry research
• Highly referenceable base of past clients and buyers / investors
Focus on Advice
Multi-service
Multi-Industry
Focus on Software
Advisory Boutiques
Bulge Bracket Firms
IPO Boutiques
Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL
Recent SEG Real Estate Related Transaction News
SAN DIEGO, CA –April 15, 2014. Software Equity Group, LLC (SEG) announced today its client, Dean Evans & Associates, Inc. (dba Event Management Systems) the leading provider of facility scheduling and event management software, has received a strategic growth equity investment from JMI Equity, a leading growth equity firm focused on investing in leading software and technology-enabled services companies.
Founded in 1986 and headquartered in Centennial Colorado, Dean Evans & Associates (DEA) provides a full suite of meeting and event scheduling, resource management, academic scheduling, shared workspace management (office “hoteling”), web calendaring and online registration/survey solutions. More than 4,000 organizations in over 75 countries rely on DEA’s Event Management System (EMS) software, including many Fortune 100 companies and other leading corporations, higher education institutions, law firms, conference centers, religious organizations, hospitals, cultural venues and sports facilities.
“For over 25 years, our team has been focused on providing our customers with the best in facility management software, along with the highest levels of customer service,” said Dean Evans, CEO and founder of DEA. ”EMS is a premier brand with a strong competitive advantage, offering the most comprehensive package of services on the market. With JMI’s expertise in growing enterprise software companies, along with its experience in higher education, we feel better than ever about our ability to continue to innovate and grow our offering.”
“We share the DEA team’s vision for the future and look forward to supporting the company in achieving its growth objectives,” said Brian Hersman, General Partner at JMI Equity. ”DEA’s opportunity fits well with JMI’s strategy of bringing expertise and resources to build on a foundation of strong market and product leadership.”
.Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL
SEG’s Strong Real Estate Industry Transaction Experience
Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL
Real Estate SaaSProvider of subscription-based vendor screening and risk management solutions to the multifamily housing industry
Real Estate SaaSProvider of property and resident management software to long-term industry
Real Estate On-premiseComplete property management for affordable housing (resold tenant screening solution)
Real Estate HybridProvider of real estate investment budgeting and forecastingsolutions to property managers, REITs & PE firms
Real Estate SaaSProvider of facilities management solutions to the global corporate and commercial property market
Real Estate SaaSProvider of project management, collaboration and bid management solutions for retail store design and construction
Real Estate On-premise Provider of plant and facility design and engineering software
Real Estate On-premise Provider of Event and Room Management Software
Real Estate On-premise Provider of Integrated Workplace Management Software (IWMS)
BuyerBusiness DescriptionClient CategoryDelivery
Model
SEG’s Strong Real Estate Industry Transaction Experience
SEG is currently advising five technology providers across distinct sub-segments of real estate technology
Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL
REAL ESTATE TECHNOLOGY LANDSCAPE
SEG-Landscape: Multi-Family Real Estate Technology*
Accounting
Applicant Screening
Property Mgmt.CRM
Web Portals /Marketing
Internet Listings
Property Management
Vendor Ecosystem
Revenue Mgmt.
Spend Mgmt.Utility Billing & Energy Mgmt.
Payments
* Not all inclusive
Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL
SEG-Landscape: Commercial/Corporate Real Estate Technology*
Data/Info. Services
Facilities Mgmt.
Investment Mgmt.
IWMS
Facilities Design/AEC
Construction
Vendor Ecosystem
Capital Planning
Vertical Providers
Space Mgmt.Lease
Administration
* Not all inclusive
Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL
SEG-Landscape: “For Sale” Real Estate Technology*
Property Search/ Lead Gen
Home Services/ Lead Gen
Broker CRM
Vendor Ecosystem
Broker Marketing
MLSResidential
Construction
Property Search (Vacation Rentals)
Mortgage Orig./ Finance
Other
* Not all inclusive
Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL
SEG-Landscape: Sector Public/Private Capital
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Multi-Family Commercial/Corporate “For Sale”
Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL
BRIEF MARKET UPDATE – PUBLIC MARKETS & M&A
Notable Trends in Real Estate Technology
• Real estate technology M&A deal volume has been on an upward trajectory since 2009
• 2014 M&A deal volume grew 43% over 2013• M&A deal volume in 4Q14, 3Q14 and 2Q14 were each higher than any prior quarter since our
analysis began in 2009
• A plethora of private & public capital has poured into the real estate technology sector over the last several years
• Private equity and venture capital firms have invested significant amounts of capital into the real estate technology ecosystem, following a dearth of investment activity during the great recession
• Larger horizontal technology providers like IBM, Experian, Oracle, and New Corp. have shown interest in the sector via acquisitions
• Successful IPO’s by companies like Textura, RealPage, Zillow, Trulia, Ellie Mae, Homeaway and others has spurred continued investment in the sector
• Valuations in both the public and private markets remain strong
Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL
Public Companies: Real Estate Technology
Public Company Operating Performance and Market Valuation
*Data as of January 20, 2015
Company Ticker CategoryEnterprise
Value (mm)LTM Rev
(mm)LTM EBITDA
(mm)LTM Rev Growth
LTM Gross Margin
LTM EBITDA Margin
EV/ Rev
EV/ EBITDA
Angie’s List, Inc. NASDAQ: ANGI Home Services Lead Gen $603.3 $266.1 -$19.4 50.5% 73.9% -7.3% 2.3x -
Autodesk, Inc. NASDAQ: ADSK Facilities Design/ AEC $9,300.5 $2,273.9 $426.5 -1.7% 87.9% 18.8% 4.1x 21.8x
Aveva Group plc LSE:AVV Facilities Design/ AEC $1,944.3 $390.3 $114.9 10.9% 92.6% 29.4% 5.0x 16.9x
CoreLogic, Inc. NYSE: CLGX Data/ Info. Services $3,956.5 $1,309.7 $231.4 -18.5% 48.1% 17.7% 3.0x 15.7x
CoStar Group, Inc. NASDAQ: CSGP Data/ Info. Services $4,562.7 $456.0 $116.2 18.3% 71.9% 25.5% 10.0x 39.3x
Ellie Mae, Inc. NYSE: ELLI Mortgage Orig. / Finance $614.3 $128.5 $25.1 26.2% 74.5% 19.5% 4.8x 24.5x
Homeaway, Inc. NASDAQ: AWAY Property Search / Lead Gen $2,622.0 $372.7 $60.7 26.0% 84.6% 16.3% 7.0x 43.2x
Nemetscheck AG XTRA: NEM Facilities Design/ AEC $737.8 $260.6 $52.3 6.0% 53.5% 20.1% 2.8x 14.1x
RealPage, Inc. NASDAQ: RP Property Management $1,368.1 $377.0 $54.2 17.0% 60.7% 14.4% 3.6x 25.2x
Textura Corporation NYSE: TXTR Commercial Construction $365.3 $40.8 -$33.2 70.1% 68.6% -81.5% 9.0x -
Zillow, Inc. NASDAQ: Z Property Search / Lead Gen $3,772.4 $197.5 -$5.5 69.1% 90.5% -2.8% 19.1x -
High: $9,300.5 $2,273.9 $426.5 70.1% 92.6% 29.4% 19.1x 43.2x
Low: $365.3 $40.8 -$33.2 -18.5% 48.1% -81.5% 2.3x 14.1x
Average: $2,713.4 $552.1 $93.0 24.9% 73.3% 6.4% 6.4x 25.1x
Median: $1,944.3 $372.7 $54.2 18.3% 73.9% 17.7% 4.8x 23.2x
Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL
Stock Market Performance: Property Search / Lead Gen
*Data as of January 20, 2015
0.00b
1.00b
2.00b
3.00b
4.00b
5.00b
6.00b
7.00b
8.00bMarket CapitalizationZillow, Inc. (NasdaqGS:Z) - Market Capitalization
HomeAway, Inc. (NasdaqGS:AWAY) - Market CapitalizationAngie's List, Inc. (NasdaqGS:ANGI) - Market Capitalization
0.00x
5.00x
10.00x
15.00x
20.00x
25.00x
30.00x
35.00xEV/RevenueZillow, Inc. (NasdaqGS:Z) - TEV/Total Revenues
HomeAway, Inc. (NasdaqGS:AWAY) - TEV/Total RevenuesAngie's List, Inc. (NasdaqGS:ANGI) - TEV/Total Revenues
Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL
Stock Market Performance: Facility Design / AEC
*Data as of January 20, 2015
0.00x
1.00x
2.00x
3.00x
4.00x
5.00x
6.00x
7.00x
8.00xEV/RevenueAutodesk, Inc. (NasdaqGS:ADSK) - TEV/Total Revenues
Nemetschek AG (XTRA:NEM) - TEV/Total RevenuesAveva Group plc (LSE:AVV) - TEV/Total Revenues
0.00b
2.00b
4.00b
6.00b
8.00b
10.00b
12.00b
14.00b
16.00bMarket CapitalizationAutodesk, Inc. (NasdaqGS:ADSK) - Market Capitalization
Nemetschek AG (XTRA:NEM) - Market CapitalizationAveva Group plc (LSE:AVV) - Market Capitalization
Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL
Stock Market Performance: SaaS/Subscription
*Data as of January 20, 2015
0.00x
5.00x
10.00x
15.00x
20.00x
25.00x
30.00x
35.00x
40.00xEV/RevenueRealPage, Inc. (NasdaqGS:RP) - TEV/Total Revenues
Textura Corporation (NYSE:TXTR) - TEV/Total RevenuesEllie Mae, Inc. (NYSE:ELLI) - TEV/Total RevenuesCoStar Group Inc. (NasdaqGS:CSGP) - TEV/Total Revenues
0.00b
1.00b
2.00b
3.00b
4.00b
5.00b
6.00b
7.00bMarket CapitalizationRealPage, Inc. (NasdaqGS:RP) - Market Capitalization
Textura Corporation (NYSE:TXTR) - Market Capitalization
Ellie Mae, Inc. (NYSE:ELLI) - Market Capitalization
CoStar Group Inc. (NasdaqGS:CSGP) - Market Capitalization
Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL
Top 10 Real Estate Technology M&A by Enterprise Value (EV)
*Data set 2009 - present
Date Buyer SellerEnterprise
Value ($mm)EV / Rev
EV / EBITDA Category Business Description
07/28/14 Zillow, Inc. Trulia, Inc. $3,090.5 14.8x - Property Search Trulia, Inc. provides tools to research homes and neighborhoods for consumers through Web and mobile applications.
11/14/14 REA Group Ltd Move, Inc $963.2 4.0x 121.3x Property Search Move, Inc. operates an online network of Websites for real estate search, finance, and moving and home enthusiasts in North America.
04/27/11 CoStar Group Inc.
LoopNet, Inc. $654.2 8.2x 30.3x Property Search/Data
Services
LoopNet.com enables commercial real estate agents working on behalf of property owners and landlords to list properties for sale or for lease, and submit detailed information on property listings to find a buyer or tenant.
03/03/14 CoStar Group Inc.
Apartments.com, L.L.C.
$585.0 6.8x 22.9x Property Search Apartments.com provides apartment Internet listing subscription services, providing rental units from managed properties, newspaper classifieds, and for-rent-by-owner properties and offering renters a database of houses, condos, duplexes, etc.
09/22/14 Symphony Technology Group
McGraw-Hill Construction Information Group
$320.0 1.9x - Commercial Construction
McGraw-Hill Construction Information Group provides essential data, news, insights, and intelligence to better inform construction professionals’ decisions and strengthen their market position.
05/08/13 Trulia, Inc. Market Leader, Inc.
$314.3 6.6x - Broker CRM/Marketing
MarketLeader offers real estate professionals software-as-a-service CRM and marketing tools to help customers build relationships with home buyers and sellers through the Internet.
01/11/11 CoreLogic, Inc. RP Data Pty Ltd. $270.0 4.7x 11.8x Data/Information Services
RP Data Ltd. provides subscription-based access to commercial and residential property information for real estate agents, valuers, property developers, financial institutions, and state and federal government departments.
03/24/11 Davis + Henderson Corporation
Mortgagebot LLC $231.8 6.1x 11.5 Mortgage Orig./Finance
Mortgagebot provides software as a service mortgage point-of-sale solutions to banks and credit unions in the United States.
08/14/14 Realogy Group LLC
ZipRealty, Inc. $157.3 2.3x - Broker CRM/Marketing
ZipRealty, Inc. operates as an online technology-enabled real estate brokerage company in the United States.
03/22/12 PRIMEDIA Inc. Viva Group, Inc. $145.0 - - Property Search Rent.com is an Internet listing site providing rental advertisement and related services in the United States. It enables renters to find residential rental property listing online, including contact information, pricing, photos, floor plans, and virtual tours.
Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL
Top 10 Real Estate Technology M&A by EV/Revenue Multiple
*Data set 2011 - present
Date Buyer SellerEnterprise
Value ($mm)EV / Rev
EV / EBITDA Category Business Description
05/02/12 Zillow, Inc. RentJuice Corporation
$37.4 102.4x - Property Management
RentJuice Corporation providesSaaaS Rental Relationship Management (RRM) software for real estate professionals. The company’s online RRM platform connects prospective renters, brokers, and property managers to each other in real-time.
07/28/14 Zillow, Inc. Trulia, Inc. $3,090.5 14.8x - Property Search/Data
Services
Trulia, Inc. provides tools to research homes and neighborhoods for consumers through Web and mobile applications.
07/23/12 RealPage, Inc. Rent Mine Online Inc.
$15.5 10.3x - Property Management
Rent Mine Online Inc. provides resident referral programs online. It operates a multifamily online resident referral tool for residential management companies in the United States and Canada.
04/27/11 CoStar Group Inc.
LoopNet, Inc. $654.2 8.2x 30.3x Property Search/Data
Services
LoopNet.com enables commercial real estate agents working on behalf of property owners and landlords to list properties for sale or for lease, and submit detailed information on property listings to find a buyer or tenant.
03/03/14 CoStar Group Inc.
Apartments.com, L.L.C.
$585.0 6.8x 22.9x Property Search Apartments.com provides apartment Internet listing subscription services, providing rental units from managed properties, newspaper classifieds, and for-rent-by-owner properties and offering renters a database of houses, condos, duplexes, etc.
05/08/13 Trulia, Inc. Market Leader, Inc.
$314.3 6.6x - Broker CRM/Marketing
MarketLeader offers real estate professionals software-as-a-service CRM and marketing tools to help customers build relationships with home buyers and sellers through the Internet.
03/24/11 Davis + Henderson Corporation
Mortgagebot LLC $231.8 6.1x 11.5x Mortgage Orig./Finance
Mortgagebot provides software as a service mortgage point-of-sale solutions to banks and credit unions in the United States.
04/12/11 Altus Group Limited
ARGUS Software, Inc.
$140.5 5.6x 20.8x Investment Management
ARGUS Software, Inc. provides investment asset management and financial analysis solutions to the commercial real estate industry globally.
01/11/11 CoreLogic, Inc. RP Data Pty Ltd. $270.0 4.7x 11.8x Data/Information Services
RP Data Ltd. provides subscription-based access to commercial and residential property information for real estate agents, valuers, property developers, financial institutions, and state and federal government departments.
08/22/11 RealPage, Inc. MyNewPlace.com $74.9 4.5x - Property Management
MyNewPlace.com is an apartment and home rentals Web site, offering Internet listing services; and provides access to property information, including photo galleries, videos, and neighborhood information for renters.
Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL
Real Estate Technology M&A Activity
*Data set 2009 - present
14
25
4842
51
73
2009 2010 2011 2012 2013 2014
# o
f R
M&
A T
ran
sact
ion
s Annual Deal Volume
2
5
10
6
1011
2
5
10
13
10
23
2
7
1412
15
21
8 8
14
11
1718
2009 2010 2011 2012 2013 2014
Quarterly Deal Volume
Q1 Q2 Q3 Q4
3
10
1 1 1 1 12
01
2
43
01
21
0 0
4
0
7
3
54
34
6
0
7
2
7
2
4 4
7
12
0
8
3
5
23
2
54
8
4
01
5
2
10
2
43
56
7
5
1 1
11
3
12
1
8
1
87
PropertyManagement
Data/InformationServices
Payments InvestmentManagement
IWMS & FacilitiesManagement
Facilities Design/ AEC
CommercialConstruction
ResidentialConstruction
Property Search /Lead Gen
Home ServicesLead Gen
BrokerCRM/Marketing
Mortgage Orig. /Finance
# o
f M
&A
Tra
nsa
ctio
ns
Annual Deal Volume By Category
2009 2010 2011 2012 2013 2014
Copyright © 2015 by SOFTWARE EQUITY GROUP, LLC, All Rights Reserved CONFIDENTIAL
Contact Information
Kris Beible(858) 509-2800
The information contained in this Report is obtained from sources we believe to be reliable, but no representation or guarantee is made about the accuracy or completeness of such information, or the opinions expressed herein. Nothing in this Report is intended to be a recommendation of a specific security or company or intended to constitute an offer to buy or sell, or the solicitation of an offer to buy or sell, any security. Software Equity Group LLC may have an interest in one or more of the securities or companies discussed herein. Financial data provided by Capital IQ.
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