european technology update

European Technology Update 15th August 2013

Thierry Monjauze

Managing Director

63 Brook Street

London W1K 4HS

United Kingdom

Phone: +44 (0) 20 7518 8900 [email protected]

Francois Morin

Director

63 Brook Street

London W1K 4HS

United Kingdom

Phone: +44 (0) 20 7518 8900 [email protected]

www.harriswilliams.com

Member FINRA/SIPC

Publicis and Omnicom have agreed to merge to form Publicis Omnicom Group, the world’s largest advertising

holding company, which is estimated to have a combined market value of $35.1 billion

Cisco Systems has acquired Sourcefire, the provider of intelligent cybersecurity technology, for $2.4 billion

Satélites Mexicanos, the provider of fixed satellite services for telecommunication, has been acquired by

Eutelsat for $830 million

Avelo, the provider of technology solutions to the financial services industry, has been acquired by IRESS for

£210 million

Grendall Investment has acquired Cupid’s Casual Dating Business, a portfolio of casual dating sites, for £43

million

Kapow Software, the Big Data integration platform for managing critical data from various sources, has been

acquired by Kofax for $48 million

icon-scm, the provider of integrated supply chain management solutions, has been acquired by E2open for $34

million

Corero Business Systems, the developer of modular accounting and business management software solutions,

has been acquired by Civica for £13 million

Job Board Enterprises, the provider of IT recruitment services, has been acquired by Dice holdings for £12

million

Darwin Private Equity has acquired Esendex, the provider of SMS services to businesses, for £11 million

ICM Unternehmensberatung, the provider of SAP consulting and implementation services, has been acquired

by Alpha Group

Mandata, the developer of software for the transport and logistics industry, has been acquired by Synova

Capital

Newron Systems, a developer of building automation software solutions, was acquired by ABB

TKH Group has acquired Park Assist, the provider of car park guidance and management systems

SecondSync, the web-based data analytics platform for television broadcasts, has been acquired by Kantar

Retail

Dassault Systemes has acquired SFE, the developer of software tools for CAE-driven development

Ericsson has acquired Telcocell, the provider of consulting services to the telecommunications industry

Danaher has acquired Teletrac, a provider of vehicle fleet tracking systems and solutions

Tengelmann New Media, an e-commerce agency, has been acquired by Hirschen Group

uSwitch, the provider of online and telephone comparison and switching services, has been acquired by LDC

Forrester has decreased its 2013-2014 global technology spending forecast from 3.3%, made in January, to

2.3% due to lower than expected growth in Europe and China despite stronger performance from US and Japan

UK digital ad investment is expected to reach £6.3 billion in 2013 and rise to £8.4 billion by 2017, driven by

mobile and video ads, according to eMarketer

Tablets are forecast to exceed 381 million units in worldwide sales in 2017 and reach an installed base of 905

million as they join PCs and smartphones as “mainstay” devices, according to Forrester

UK B2C e-commerce sales are expected to be £62.5 billion in 2013 and reach £89.7 billion, or 16% of total UK

retail sales, by 2017, as UK consumers remain one of the most prominent e-commerce users in the world,

according to eMarketer

UK consumers are increasingly turning to mobile for shopping as the UK m-commerce conversion rate rose

from 1.27% in June 2012 to 2.03% in June 2013, as consumers become more comfortable making purchases

using their smartphones and tablets, according to eMarketer

More than a third of web users in Europe are using mobile banking, with Turkey, Spain and the Netherlands

leading the way with close to half of internet users. In particular, mobile banking was found to be more

prominent in users aged 25 to 34, with almost half of the age group as regular users compared to 37% across all

ages, according to eMarketer

Recent Developments

Source: Various industry news outlets.

Company

Specific

News

Industry

Trends

1

http://www.forrester.com/Forrester+Brings+Down+Its+Global+Tech+Spending+Forecast/-/E-PRE5624

http://www.emarketer.com/Article/Mobile-Video-Drive-Up-Digital-Ad-Investment-UK/1010097

http://www.forrester.com/Forrester+Global+Tablet+Sales+To+Exceed+381+Million+Units+In+2017/-/E-PRE5784

http://www.emarketer.com/Article/Retail-Drives-UK-B2C-Ecommerce-Sales-Higher/1010106

http://www.emarketer.com/Article/More-UK-Mobile-Shoppers-Convert/1010120

http://www.emarketer.com/Article/Mobile-Banking-Takes-Off-Among-Europes-Younger-Web-Users/1010103

(10%)

0%

10%

20%

30%

40%

50%

60%

70%

Aug 2012 Nov 2012 Feb 2013 May 2013 Aug 2013

Nasdaq Composite Internet and Digital Media Software and IT Services Communications DJ Stoxx 600 Technology

(2%)

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

09 Jul 14 Jul 19 Jul 24 Jul 29 Jul 03 Aug 08 Aug

Nasdaq Composite Internet and Digital Media Software and IT Services Communications DJ Stoxx 600 Technology

Stock

Performance

Comparable

Trading

Summary

Last Twelve Months

Last 30 Days

Public Market Trading Statistics

2

Sources: Capital IQ, 9 August 2013; Brokers’ reports.

16.5%

12.6%

9.2%

5.2%

3.4%

61.4%

45.1%

37.4%

32.7%

21.1%

CY2013E

EBITDA Margin Growth CY2013E CY2014E CY2013E CY2014E CY2013E CY2014E

Software and IT Services

Enterprise Applications 12.9% 6.8% 2.5x 2.2x 8.2x 11.8x 18.5x 13.9x

European Large Cap Software 33.0% 3.1% 4.1x 3.9x 12.5x 11.3x 19.9x 17.6x

Financial Software 25.9% 3.2% 2.7x 2.5x 10.4x 9.4x 19.4x 17.7x

Healthcare Software 20.5% 11.1% 2.5x 2.3x 11.3x 9.4x 21.9x 17.2x

Large Cap IT Services 13.7% 10.2% 1.1x 1.1x 7.9x 7.3x 15.3x 13.9x

Mid Cap IT Services 8.3% 10.8% 3.6x 2.8x 6.1x 5.6x 11.7x 9.0x

Offshore IT Services 23.1% 6.8% 2.7x 2.4x 11.2x 10.0x 16.2x 14.4x

Security Software 35.4% 5.7% 3.4x 3.2x 8.9x 8.2x 16.5x 15.0x

Communications

Digital Broadband 11.3% (2.8%) 0.6x 0.6x 5.6x 4.8x 15.7x 11.9x

Diversified Communication Equipment 8.5% 0.6% 1.1x 1.0x 11.7x 8.5x 30.1x 22.1x

Mobile Content / Solutions Providers 22.7% 27.9% 2.5x 2.0x 10.8x 8.2x 23.8x 16.6x

Mobile Infrastructure Software 18.4% 39.1% 2.6x 2.4x 15.1x 14.6x 17.7x 16.0x

Internet and Digital Media

Chinese Internet Leaders 17.6% 288.0% 4.5x 3.5x 14.5x 16.2x 24.1x 24.3x

Online Classifieds 40.0% 18.0% 7.7x 6.3x 13.3x 11.4x 21.0x 17.7x

Content Providers / Communities 20.4% 23.5% 4.6x 4.0x 12.7x 20.1x 28.6x 24.4x

Ecommerce 20.9% 34.0% 3.6x 3.0x 19.4x 15.0x 28.9x 26.2x

Global Internet Leaders 36.6% 19.9% 5.5x 4.6x 15.6x 12.8x 20.0x 19.9x

Interactive Entertainment 18.3% (0.3%) 1.8x 1.6x 14.5x 10.8x 14.4x 14.6x

Intermediation and Comparison 17.3% 21.7% 5.3x 4.2x 14.0x 16.0x 29.8x 20.1x

Online Gambling 26.4% 1.4% 3.0x 2.8x 10.8x 10.1x 17.7x 16.2x

Online Marketing 14.6% 6.6% 1.8x 1.6x 11.7x 9.9x 22.0x 22.0x

Online Travel 27.4% 17.4% 4.9x 4.1x 16.4x 13.4x 24.7x 23.9x

P / EEV / Revenue EV / EBITDA

(10%)

0%

10%

20%

30%

40%

50%

60%


European Large Cap Software Financial Software

Enterprise Applications Healthcare Software

Security Software Large Cap IT Services

Mid Cap IT Services Offshore IT Services

(5%)

0%

5%

10%

15%

20%

25%


European Large Cap Software Financial Software

Enterprise Applications Healthcare Software

Security Software Large Cap IT Services

Mid Cap IT Services Offshore IT Services


Source: Capital IQ, 9 August 2013.

Last Twelve Months Performance

Last 30 Days Performance

3

Financial Software 44.9%

Large Cap IT Services 42.8%

Mid Cap IT Services 41.1%

Healthcare Software 36.7%

European Large Cap Software 34.5%

Security Software 28.9%

Offshore IT Services 25.7%

Enterprise Applications 14.9%

Offshore IT Services 16.9%

Mid Cap IT Services 11.1%

Financial Software 10.8%

European Large Cap Software 9.8%

Large Cap IT Services 9.5%

Enterprise Applications 8.5%

Security Software 5.2%

Healthcare Software 0.1%


(Continued)

4 Sources: Capital IQ, 9 August 2013; Brokers’ reports.

Market Enterprise CY2013E

Cap ($m) Value ($m) EBITDA Margin Growth CY2013E CY2014E CY2013E CY2014E CY2013E CY2014E

European Large Cap Software

SAP 89,331 91,432 34.6% 8.2% 3.9x 3.6x 11.4x 10.1x 16.6x 14.8x

Dassault Systemes 16,442 14,390 33.4% 6.7% 5.0x 4.6x 15.1x 13.5x 27.3x 24.4x

Sage 6,160 6,517 29.6% (1.8%) 3.0x 2.9x 10.2x 9.8x 15.7x 14.3x

Software AG 2,738 2,851 26.5% (5.6%) 2.1x 2.0x 8.1x 7.5x 12.8x 11.5x

Aveva 2,455 2,160 33.0% 8.0% 5.8x 5.2x 17.5x 15.1x 28.9x 24.6x

Temenos 1,904 2,056 28.9% 6.3% 4.3x 4.0x 15.0x 13.0x 24.6x 21.0x

Micro Focus 1,840 2,017 45.2% 0.1% 4.8x 4.7x 10.6x 10.3x 13.3x 12.5x

Mean 33.0% 3.1% 4.1x 3.9x 12.5x 11.3x 19.9x 17.6x

Median 33.0% 6.3% 4.3x 4.0x 11.4x 10.3x 16.6x 14.8x

Financial Software

Intuit 19,137 17,641 39.3% 7.3% 3.9x 3.6x 9.9x 9.3x 18.7x 16.9x

Temenos 1,904 2,056 28.9% 6.3% 4.3x 4.0x 15.0x 13.0x 24.6x 21.0x

SimCorp 1,333 1,256 25.6% 11.8% 4.1x 3.6x 15.9x 13.6x 20.7x 20.2x

Fidessa 1,241 1,163 27.4% (3.8%) 2.7x 2.6x 9.7x 9.2x 26.5x 24.9x

Innovation 463 426 13.6% 2.4% 1.3x 1.2x 9.5x 8.5x 20.9x 17.9x

Linedata 191 233 24.1% 13.9% 1.1x 1.0x 4.5x 4.3x 9.4x 8.8x

Microgen 174 132 32.3% (10.8%) 2.8x 2.7x 8.7x 8.6x 16.0x 15.8x

StatPro 84 79 16.1% (1.5%) 1.6x 1.5x 9.8x 8.9x 18.5x 16.2x

Mean 25.9% 3.2% 2.7x 2.5x 10.4x 9.4x 19.4x 17.7x

Median 26.5% 4.4% 2.7x 2.6x 9.8x 9.1x 19.7x 17.4x

Enterprise Applications

Guidewire Software 2,507 2,353 10.9% 23.5% 7.6x 6.2x NM 47.6x NM NM

Unit 4 1,010 1,185 19.8% 6.0% 1.8x 1.7x 9.1x 7.9x 26.4x 18.8x

Jive Software 921 795 (19.5%) 29.3% 5.5x 4.4x NM NM NM NM

Exact 533 458 22.3% 0.4% 1.6x 1.5x 7.1x 7.0x 13.7x 13.4x

IFS 518 498 11.0% 1.7% 1.2x 1.1x 10.8x 7.0x 22.0x 14.6x

Kofax 438 355 17.2% (0.1%) 1.3x 1.2x 7.5x 7.1x 16.6x 15.1x

SDL 435 434 8.0% (3.9%) 1.0x 1.0x 12.9x 8.5x 27.0x 14.6x

F-Secure 352 307 21.6% 2.6% 1.4x 1.4x 6.7x 6.2x 15.6x 12.8x

Cegid 187 278 25.0% 1.7% 0.8x 0.8x 3.1x 3.0x 8.2x 7.8x

Mean 12.9% 6.8% 2.5x 2.2x 8.2x 11.8x 18.5x 13.9x

Median 17.2% 1.7% 1.4x 1.4x 7.5x 7.0x 16.6x 14.6x

Healthcare Software

McKesson 28,397 30,366 2.6% 4.2% 0.2x 0.2x 9.2x 8.2x 17.0x 13.9x

Cerner 16,723 15,935 33.0% 11.8% 5.4x 4.8x 16.3x 14.0x 34.6x 29.5x

Allscripts Healthcare Solutions 2,726 3,198 13.7% (2.9%) 2.2x 2.1x 16.3x 11.3x 42.0x 25.1x

CompuGroup 1,059 1,354 21.3% 2.7% 2.2x 2.1x 10.3x 8.4x 14.0x 11.3x

Emis 688 682 33.7% 8.1% 4.5x 4.2x 13.3x 11.9x 23.1x 20.1x

Advanced Computer Software 592 545 22.2% 51.0% 2.0x 1.7x 8.9x 7.7x 16.4x 14.9x

Cegedim 379 1,048 17.3% 2.6% 0.8x 0.8x 4.9x 4.6x 6.0x 5.3x

Mean 20.5% 11.1% 2.5x 2.3x 11.3x 9.4x 21.9x 17.2x

Median 21.3% 4.2% 2.2x 2.1x 10.3x 8.4x 17.0x 14.9x

EV / Revenue EV / EBITDA P / E


(Continued)




Security Software

Symantec 18,737 17,048 30.7% 2.1% 2.5x 2.4x 8.0x 6.9x 14.7x 12.9x

Check Point 11,521 10,280 58.8% 3.3% 7.4x 7.0x 12.6x 11.9x 17.3x 15.9x

Trend Micro 4,528 3,207 31.6% 2.8% 2.9x 2.8x 9.1x 8.8x 24.3x 23.9x

AVG Technologies 1,184 1,179 34.4% 17.8% 2.8x 2.5x 8.1x 7.4x 10.6x 9.3x

F-Secure 352 307 21.6% 2.6% 1.4x 1.4x 6.7x 6.2x 15.6x 12.8x

Mean 35.4% 5.7% 3.4x 3.2x 8.9x 8.2x 16.5x 15.0x

Median 31.6% 2.8% 2.8x 2.5x 8.1x 7.4x 15.6x 12.9x

Large Cap IT Services

Accenture 47,416 41,960 16.5% 1.7% 1.5x 1.4x 8.9x 8.4x 17.5x 16.0x

CGI 10,531 13,343 14.3% 59.3% 1.3x 1.3x 9.4x 8.3x 15.6x 12.9x

Capita Group 10,334 12,758 15.4% 10.7% 2.1x 1.9x 13.8x 12.6x 18.0x 16.4x

Cap Gemini 9,015 8,808 10.2% 0.8% 0.6x 0.6x 6.4x 6.0x 14.5x 13.4x

Computer Sciences 7,692 8,486 15.1% (12.2%) 0.6x 0.6x 4.1x 4.0x 13.0x 12.7x

Atos Origin 6,843 6,575 11.0% 1.0% 0.6x 0.5x 5.1x 4.7x 13.3x 12.1x

Mean 13.7% 10.2% 1.1x 1.1x 7.9x 7.3x 15.3x 13.9x

Median 14.7% 1.3% 1.0x 1.0x 7.6x 7.2x 15.1x 13.2x

Mid Cap IT Services

Splunk 5,370 5,039 2.4% 41.3% 18.4x 13.8x NM NM NM NM

Indra Sistemas 2,495 3,360 9.6% 3.7% 0.8x 0.8x 8.8x 8.1x 14.3x 11.9x

Tieto 1,437 1,545 12.6% (5.7%) 0.7x 0.7x 5.3x 5.0x 13.2x 10.3x

Sopra 908 1,196 9.2% 11.7% 0.7x 0.6x 7.4x 6.6x 10.0x 9.0x

Groupe Steria 461 849 8.7% (2.2%) 0.4x 0.3x 4.1x 3.8x 6.6x 5.1x

GFI Informatique 264 348 7.1% 15.7% 0.3x 0.3x 4.8x 4.6x 14.2x 8.7x

Mean 8.3% 10.8% 3.6x 2.8x 6.1x 5.6x 11.7x 9.0x

Median 8.9% 7.7% 0.7x 0.7x 5.3x 5.0x 13.2x 9.0x

Offshore IT Services

Tata 59,544 57,152 28.6% 12.0% 4.7x 4.0x 16.4x 14.1x 22.4x 18.7x

Infosys 27,884 24,412 25.5% 8.3% 3.2x 2.9x 12.5x 11.3x 17.6x 15.8x

Cognizant 22,048 19,148 20.7% 19.1% 2.2x 1.9x 10.6x 9.2x 17.1x 14.9x

Wipro 18,013 16,547 20.7% (12.7%) 2.5x 2.3x 12.0x 10.9x 16.3x 14.6x

HCL 10,389 9,993 22.6% 9.8% 2.1x 1.9x 9.3x 8.8x 13.5x 12.7x

Satyam 2,233 1,773 20.2% 4.1% 1.3x 1.2x 6.2x 5.9x 10.2x 9.4x

Mean 23.1% 6.8% 2.7x 2.4x 11.2x 10.0x 16.2x 14.4x

Median 21.7% 9.1% 2.3x 2.1x 11.3x 10.0x 16.7x 14.8x


(5%)

0%

5%

10%

15%

20%

25%


Digital Broadband Diversified Communication Equipment

Mobile Infrastructure Software Mobile Content / Solutions Providers

(30%)

(20%)

(10%)

0%

10%

20%

30%

40%

50%

60%


Digital Broadband Diversified Communication Equipment

Mobile Infrastructure Software Mobile Content / Solutions Providers



Communications

6 Source: Capital IQ, 9 August 2013.

Diversified Communication Equipment 50.9%

Mobile Infrastructure Software 47.1%

Digital Broadband 46.2%

Mobile Content / Solutions Providers 32.6%

Mobile Content / Solutions Providers 21.1%

Diversified Communication Equipment 19.6%

Digital Broadband 15.8%

Mobile Infrastructure Software 13.4%

Communications

(Continued)




Digital Broadband

Technicolor 1,672 2,649 15.0% (1.2%) 0.6x 0.6x 3.7x 3.6x 10.2x 7.9x

Pace 1,475 1,545 9.5% (0.9%) 0.6x 0.6x 6.6x 6.4x 11.4x 10.1x

TomTom 1,340 1,331 14.1% (9.3%) 1.1x 1.1x 7.5x 7.2x 19.6x 17.2x

Logitech 1,187 860 5.5% (7.8%) 0.4x 0.4x 7.6x 5.2x 25.7x 19.8x

Kudelski 712 895 14.2% 0.6% 0.9x 0.9x 6.6x 6.3x 12.2x 11.4x

Parrot 320 220 10.6% (6.5%) 0.6x 0.6x 5.9x 3.7x 23.1x 10.5x

Advanced Digital Broadcast 81 58 10.0% 5.8% 0.1x 0.1x 1.3x 1.2x 7.4x 6.4x

Mean 11.3% (2.8%) 0.6x 0.6x 5.6x 4.8x 15.7x 11.9x

Median 10.6% (1.2%) 0.6x 0.6x 6.6x 5.2x 12.2x 10.5x

Diversified Communication Equipment

LM Ericsson Telephone 39,304 33,647 12.1% 2.2% 1.0x 0.9x 7.8x 6.4x 17.6x 13.6x

Nokia 15,468 11,178 6.2% (17.5%) 0.3x 0.3x 5.5x 4.1x NM 26.7x

Alcatel-Lucent 6,134 8,151 5.4% 1.1% 0.4x 0.4x 7.8x 5.3x NM NM

CIENA 2,299 3,053 8.2% 13.3% 1.4x 1.3x 17.7x 13.0x 39.8x 21.9x

ADTRAN 1,517 1,372 10.8% 3.9% 2.1x 1.9x 19.7x 13.8x 32.9x 26.0x

Mean 8.5% 0.6% 1.1x 1.0x 11.7x 8.5x 30.1x 22.1x

Median 8.2% 2.2% 1.0x 0.9x 7.8x 6.4x 32.9x 23.9x

Mobile Infrastructure Software

QUALCOMM 113,681 102,245 38.2% 25.9% 4.0x 3.6x 10.4x 9.8x 14.5x 13.2x

VeriSign 7,001 6,360 64.1% 9.9% 6.6x 6.2x 10.3x 9.7x 21.1x 19.0x

Amdocs 6,141 5,050 21.1% 3.5% 1.5x 1.4x 7.1x 7.0x 13.0x 12.2x

Synchronoss Technologies 1,358 1,308 31.4% 28.8% 3.7x 3.1x 11.9x 9.4x 26.6x 21.2x

Sonus Networks 981 769 0.5% 6.3% 2.8x 2.7x NM NM NM NM

Redknee Solutions 334 319 3.4% 249.8% 1.5x 1.2x 45.1x 45.1x NM NM

TeleCommunication Systems 158 252 10.8% (14.8%) 0.6x 0.6x 5.7x 6.8x 13.5x 14.2x

Smith Micro Software 39 16 (22.5%) 3.7% 0.4x 0.3x NM NA NM NM

Mean 18.4% 39.1% 2.6x 2.4x 15.1x 14.6x 17.7x 16.0x

Median 15.9% 8.1% 2.2x 2.0x 10.4x 9.6x 14.5x 14.2x

Mobile Content / Solutions Providers

Opera Software 994 940 26.8% 37.7% 3.2x 2.5x 11.9x 8.3x 25.5x 15.4x

GameLoft 663 589 18.6% 18.0% 1.8x 1.6x 9.7x 8.1x 22.2x 17.8x

Mean 22.7% 27.9% 2.5x 2.0x 10.8x 8.2x 23.8x 16.6x

Median 22.7% 27.9% 2.5x 2.0x 10.8x 8.2x 23.8x 16.6x


(5%)

0%

5%

10%

15%

20%

25%

30%

35%


Global Internet Leaders Ecommerce

Online Travel Online Marketing

Content Providers / Communities Intermediation and Comparison

Online Classifieds Chinese Internet Leaders

Online Gambling Interactive Entertainment

(20%)

0%

20%

40%

60%

80%

100%

120%

140%


Global Internet Leaders Ecommerce

Online Travel Online Marketing

Content Providers / Communities Intermediation and Comparison

Online Classifieds Chinese Internet Leaders

Online Gambling Interactive Entertainment




8 Source: Capital IQ, 9 August 2013.

Chinese Internet Leaders 30.2%

Content Providers / Communities 24.5%

Online Travel 19.2%

Interactive Entertainment 17.5%

Online Gambling 16.7%

Online Classifieds 15.9%

Ecommerce 8.4%

Online Marketing 7.0%

Intermediation and Comparison 6.4%

Global Internet Leaders 5.2%

Ecommerce 115.8%

Online Travel 84.7%

Online Gambling 76.3%

Content Providers / Communities 69.4%

Chinese Internet Leaders 57.0%

Interactive Entertainment 48.7%

Online Classifieds 47.3%

Online Marketing 29.2%

Intermediation and Comparison 25.1%

Global Internet Leaders 18.4%


(Continued)




Global Internet Leaders

Apple 412,866 387,149 31.6% 3.1% 2.3x 2.1x 7.2x 6.7x 11.8x 10.4x

Google 296,525 250,293 36.1% 12.6% 4.2x 3.7x 11.7x 9.9x 20.5x 17.3x

Microsoft 272,390 212,466 39.8% 11.3% 2.6x 2.5x 6.6x 6.3x 12.0x 11.2x

Amazon 135,813 131,392 6.7% 19.8% 1.8x 1.5x 26.5x 19.3x NM NM

Facebook 93,760 85,675 55.3% 45.6% 11.7x 9.0x 21.2x 16.4x NM 41.2x

eBay 69,037 63,134 33.7% 15.0% 3.9x 3.4x 11.6x 10.0x 19.6x 16.7x

Baidu 48,335 44,918 44.8% 42.0% 9.0x 6.8x 20.0x 15.9x 27.8x 22.6x

Yahoo! 28,242 25,713 35.6% 0.6% 5.7x 5.6x 16.1x 15.3x 19.0x 16.4x

Yandex 10,785 10,568 45.5% 29.0% 8.7x 7.0x 19.2x 15.5x 29.2x 23.5x

Mean 36.6% 19.9% 5.5x 4.6x 15.6x 12.8x 20.0x 19.9x

Median 36.1% 15.0% 4.2x 3.7x 16.1x 15.3x 19.6x 17.0x

Ecommerce

Amazon 135,813 131,392 6.7% 19.8% 1.8x 1.5x 26.5x 19.3x NM NM

Facebook 93,760 85,675 55.3% 45.6% 11.7x 9.0x 21.2x 16.4x NM 41.2x

eBay 69,037 63,134 33.7% 15.0% 3.9x 3.4x 11.6x 10.0x 19.6x 16.7x

Netflix 14,893 14,313 10.6% 20.7% 3.3x 2.8x 31.2x 27.7x NM NM

Groupon 7,061 5,877 12.4% 9.5% 2.3x 2.0x 18.5x 14.5x NM 36.5x

Mail.ru 6,681 5,732 54.5% 265.4% 2.3x 1.7x 4.2x 3.4x 6.7x 5.3x

Mercadolibre 5,460 5,273 35.9% 25.3% 11.2x 9.1x 31.2x 24.9x 44.6x 35.2x

IAC 4,183 4,192 19.6% 15.2% 1.3x 1.2x 6.7x 5.6x 13.2x 11.1x

Ocado 2,539 2,585 5.6% 11.8% 2.2x 1.8x 38.7x 23.6x NM NM

Shutterfly 2,088 1,961 19.1% 30.4% 2.5x 2.1x 13.2x 10.9x 40.0x 34.3x

YOOX 1,942 1,933 9.8% 27.3% 3.1x 2.5x 31.5x 23.5x NM NM

Vistaprint 1,816 2,004 12.5% 10.7% 1.6x 1.5x 13.2x 10.3x 22.2x 17.9x

OpenTable 1,578 1,486 42.3% 16.7% 7.9x 6.7x 18.7x 15.4x 36.4x 31.1x

Overstock 712 627 3.3% 15.2% 0.5x 0.5x 14.9x 12.7x 30.6x 24.6x

Digital River 610 344 8.1% 3.7% 0.9x 0.9x 10.6x 6.5x 29.9x 24.3x

Blue Nile 468 421 5.1% 11.8% 0.9x 0.8x 18.0x 14.6x 45.8x 35.6x

Mean 20.9% 34.0% 3.6x 3.0x 19.4x 15.0x 28.9x 26.2x

Median 12.4% 15.9% 2.3x 1.9x 18.3x 14.6x 30.2x 27.8x

Online Travel

Priceline 49,950 46,300 37.9% 27.4% 6.9x 5.6x 18.2x 14.5x 24.3x 19.7x

Amadeus 14,846 16,624 38.6% 7.1% 4.1x 3.8x 10.6x 9.9x 18.3x 16.8x

Tripadvisor 11,573 11,562 40.1% 24.6% 12.2x 9.9x 30.5x 23.4x 47.2x 36.2x

Expedia 6,892 6,339 17.5% 18.1% 1.3x 1.2x 7.7x 6.6x 16.3x 14.0x

Ctrip 5,487 4,796 22.4% 27.7% 5.6x 4.5x 24.9x 19.1x 32.7x 25.9x

Orbitz 1,280 1,508 16.6% 9.3% 1.8x 1.7x 10.7x 9.6x 8.0x 32.3x

Travelzoo 459 386 19.1% 7.8% 2.4x 2.2x 12.5x 10.8x 25.9x 22.2x

Mean 27.4% 17.4% 4.9x 4.1x 16.4x 13.4x 24.7x 23.9x

Median 22.4% 18.1% 4.1x 3.8x 12.5x 10.8x 24.3x 22.2x

Online Marketing

HomeAway 2,589 2,253 27.9% 21.8% 6.6x 5.5x 23.7x 19.0x NM NM

ValueClick 1,574 1,550 34.3% 6.4% 2.2x 2.0x 6.4x 5.9x 13.0x 11.1x

Constant Contact 539 440 15.7% 13.7% 1.5x 1.4x 9.8x 8.1x 26.1x 20.8x

Marchex 246 227 8.4% 7.8% 1.5x 1.4x 18.3x 13.8x 47.7x 34.0x

1000mercis 194 150 31.9% 7.9% 2.9x 2.6x 9.1x 8.2x 16.0x 13.9x

TradeDoubler 141 115 4.3% (11.3%) 0.4x 0.3x 8.2x 7.1x 17.7x 14.8x

Hi-Media 106 133 7.9% 4.0% 0.5x 0.5x 6.2x 5.5x 11.8x 10.4x

ad pepper media 24 11 (2.3%) (1.6%) 0.1x 0.1x NM 7.6x NM 43.8x

Mean 14.6% 6.6% 1.8x 1.6x 11.7x 9.9x 22.0x 22.0x

Median 8.4% 7.8% 1.5x 1.4x 9.4x 8.1x 17.7x 17.8x

Content Providers / Communities

LinkedIn 26,098 25,224 24.2% 59.8% 16.7x 11.8x NM 44.9x NM NM

Pandora Media 3,444 3,368 2.6% 48.8% 5.3x 3.9x NM 49.3x NM NM

Perform Group 2,213 2,174 25.7% 34.4% 6.6x 5.4x 25.6x 18.8x 35.3x 26.3x

WebMD Health 1,640 1,414 22.1% 10.6% 2.8x 2.6x 12.5x 10.8x 40.6x 29.3x

Move 563 531 12.4% 14.8% 2.3x 2.1x 18.9x 13.8x 32.9x 22.4x

Demand Media 554 504 23.6% 6.0% 1.3x 1.1x 5.3x 4.9x 21.0x 18.9x

XING 527 441 29.0% 14.8% 4.0x 3.6x 13.7x 11.1x 37.0x 27.1x

Meetic 382 297 23.7% 17.9% 1.1x NA 4.7x NA 9.6x NA

XO Group 297 214 20.2% 4.3% 1.6x 1.5x 7.8x 7.0x 23.9x 22.1x

Mean 20.4% 23.5% 4.6x 4.0x 12.7x 20.1x 28.6x 24.4x

Median 23.6% 14.8% 2.8x 3.1x 12.5x 12.5x 32.9x 24.3x



(Continued)




Intermediation and Comparison

Zillow 3,284 3,114 11.4% 65.9% 16.5x 11.9x NM NM NM NM

Bankrate 1,725 1,807 26.3% (2.9%) 4.0x 3.5x 15.0x 12.4x 32.6x 23.8x

Moneysupermarket 1,556 1,516 35.4% 4.2% 4.4x 4.1x 12.4x 11.2x 17.5x 15.7x

Angie's List 1,413 1,362 (5.0%) 59.5% 5.5x 4.0x NM 42.9x NM NM

Liquidity Services 964 901 21.5% (1.3%) 1.8x 1.7x 8.5x 7.4x 17.1x 15.1x

eHealth 530 440 14.2% 10.9% 2.5x 2.2x 17.9x 11.6x 44.8x 28.5x

Gruppo MutuiOnline 184 159 17.0% 15.6% 2.7x 2.1x 16.1x 10.4x 37.1x 17.5x

Mean 17.3% 21.7% 5.3x 4.2x 14.0x 16.0x 29.8x 20.1x

Median 17.0% 10.9% 4.0x 3.5x 15.0x 11.4x 32.6x 17.5x

Online Classifieds

Rightmove 3,659 3,649 74.4% 12.9% 17.1x 14.9x 23.0x 19.9x 31.4x 26.4x

Yelp 3,382 3,285 12.4% 64.6% 14.6x 10.0x NM NM NM NM

SouFun 3,148 3,227 51.6% 39.5% 5.5x 4.7x 10.6x 9.1x 14.4x 12.4x

SEEK 2,854 3,381 38.6% 14.3% 5.4x 4.6x 14.0x 11.9x 20.5x 17.4x

Carsales.au 2,131 2,110 55.1% 2.7% 9.8x 8.7x 17.8x 15.5x 25.7x 22.2x

51job 2,003 1,535 34.5% 12.1% 5.9x 5.0x 17.0x 13.4x 24.7x 18.8x

Monster 523 583 18.4% (10.0%) 0.7x 0.7x 3.9x 3.7x 13.9x 12.6x

Dice 511 497 35.1% 8.1% 2.4x 2.2x 6.8x 6.1x 16.2x 14.2x

Mean 40.0% 18.0% 7.7x 6.3x 13.3x 11.4x 21.0x 17.7x

Median 36.8% 12.5% 5.7x 4.8x 14.0x 11.9x 20.5x 17.4x

Chinese Internet Leaders

Tencent 84,695 83,967 37.4% 39.9% 8.6x 6.7x 22.9x 18.9x 32.0x 26.3x

Baidu 48,335 44,918 44.8% 42.0% 9.0x 6.8x 20.0x 15.9x 27.8x 22.6x

Netease 7,842 5,370 51.0% 16.1% 3.5x 3.1x 6.9x 5.9x 11.3x 10.1x

Sina 5,211 4,536 10.4% 18.7% 7.3x 5.8x NM 30.2x NM 46.4x

Youku Tudou 3,863 3,296 (7.6%) 76.7% 6.6x 4.5x NM 34.4x NM NM

SouFun 3,148 3,227 51.6% 39.5% 5.5x 4.7x 10.6x 9.1x 14.4x 12.4x

Sohu 2,372 2,026 24.2% 30.5% 1.5x 1.3x 6.1x 5.2x 25.5x 17.8x

Renren 1,458 604 (37.9%) 38.1% 2.5x 1.9x NM NM NM NM

Dangdang 814 721 (4.3%) 25.4% 0.7x 0.6x NM NM NM NM

Jiayuan 250 160 16.1% 25.9% 2.0x 1.7x 12.1x 10.2x 24.3x 20.6x

Taomee 189 73 8.3% (3.4%) 1.9x 1.7x 22.5x NA 33.7x 38.3x

Mean 17.6% 288.0% 4.5x 3.5x 14.5x 16.2x 24.1x 24.3x

Median 16.1% 30.5% 3.5x 3.1x 12.1x 18.2x 25.5x 21.6x

Online Gambling

Playtech 3,140 3,067 45.7% 11.5% 6.3x 5.7x 13.8x 13.2x 16.2x 15.1x

bwin.party digital entertainment 1,727 1,556 19.8% (9.7%) 1.6x 1.6x 8.3x 7.4x 13.6x 12.0x

Betfair 1,513 1,253 21.9% (2.2%) 2.1x 2.0x 9.5x 9.1x 22.6x 20.2x

888 897 816 18.0% 5.9% 2.1x 2.0x 11.4x 10.8x 18.4x 17.5x

Mean 26.4% 1.4% 3.0x 2.8x 10.8x 10.1x 17.7x 16.2x

Median 20.9% 1.8% 2.1x 2.0x 10.5x 9.9x 17.3x 16.3x

Interactive Entertainment

Activision 19,288 14,742 33.7% (10.5%) 3.4x 3.2x 10.2x 8.7x 19.6x 14.4x

Electronic Arts 8,171 7,324 22.3% 11.5% 1.7x 1.8x 7.7x 10.1x 16.4x 20.2x

Zynga 2,413 1,298 2.1% (28.8%) 1.5x 1.7x NM 28.4x NM NM

Take-Two Interactive Software 1,725 1,654 3.6% 14.2% 1.4x 0.9x 37.6x 4.9x 7.5x 9.7x

Ubisoft Entertainment 1,531 1,384 29.7% 12.2% 0.8x 0.7x 2.5x 1.9x 13.9x 14.0x

Mean 18.3% (0.3%) 1.8x 1.6x 14.5x 10.8x 14.4x 14.6x

Median 22.3% 11.5% 1.5x 1.7x 8.9x 8.7x 15.2x 14.2x


Harris Williams & Co. (www.harriswilliams.com) is a preeminent middle market investment bank focused on the advisory

needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering

commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board

advisory, private placements, and capital markets advisory services.

Investment banking services are provided by Harris Williams LLC and Harris Williams & Co. Ltd. Harris Williams & Co. is a

trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.

Harris Williams LLC is a registered broker-dealer and member of FINRA and SIPC.

Harris Williams & Co. Ltd is a private limited company incorporated under English law having its registered office at 5th

floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under

company number 7078852. Directors: Mr. Christopher Williams, Mr. Ned Valentine, Mr. Paul Poggi and Mr. Thierry

Monjauze, authorised and regulated by the Financial Conduct Authority.

THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS AND

COPYRIGHTS OWNED BY THIRD-PARTY INFORMATION PROVIDERS. NONE OF THE THIRD PARTY

INFORMATION PROVIDERS IS ENDORSING THE OFFERING OF, AND SHALL NOT IN ANY WAY BE DEEMED

AN ISSUER OR UNDERWRITER OF, THE SECURITIES, FINANCIAL INSTRUMENTS OR OTHER

INVESTMENTS DISCUSSED IN THIS REPORT AND SHALL NOT HAVE ANY LIABILITY OR RESPONSIBILITY

FOR ANY STATEMENTS MADE IN THE REPORT OR FOR ANY FINANCIAL STATEMENTS, FINANCIAL

PROJECTIONS OR OTHER FINANCIAL INFORMATION CONTAINED OR ATTACHED AS AN EXHIBIT TO THE

REPORT. FOR MORE INFORMATION ABOUT THE MATERIALS PROVIDED BY SUCH THIRD PARTIES,

PLEASE CONTACT US AT +44 (0) 20 7518 8900.

The information and views contained in this report were prepared by Harris Williams & Co. Ltd (“Harris Williams”). It is not

a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only.

It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to

participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable

but Harris Williams makes no representation as to the accuracy or completeness of such information.

Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in

and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to

provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective

officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial

products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’

judgment and are subject to change without notice. The financial instruments discussed in this report may not be suitable for

all investors and investors must make their own investment decisions using their own independent advisors as they believe

necessary and based upon their specific financial situations and investment objectives. Also, past performance is not

necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or

redistributed, without Harris Williams’ prior written consent.

Copyright © 2013 Harris Williams & Co., all rights reserved.

TMT Group Overview

and Disclosures

Thierry Monjauze

Managing Director

63 Brook Street

London W1K 4HS

United Kingdom

Phone: +44 (0) 20 7518 8900

[email protected]

Jeff Bistrong

Managing Director

Two International Place, 24th Floor

Boston, MA 02110

USA

Phone: +1 (617) 482-7501

[email protected]

Our Technology, Media & Telecom (TMT) Group is dedicated to providing superior merger & acquisition

and capital markets advisory services to market leading companies. Our extensive industry knowledge and

transaction leadership experience spans the software, digital media, IT services and communications

sectors. Our professionals in London, Boston and San Francisco have global relationships with leading

technology companies and financial investors. Thoughtful advice, deep experience and technology

expertise, creativity and attention to detail from our senior technology bankers have resulted in a track

record of consistently exceeding our clients' expectations.

1001 Haxall Point

9th Floor

Richmond, VA 23219

USA

Phone: +1 (804) 648-0072

Fax: +1 (804) 648-0073

Two International Place

24th Floor

Boston, MA 02110

USA

Phone: +1 (617) 482-7501

Fax: +1 (617) 482-7503

1900 East 9th Street

20th Floor

Cleveland, OH 44114

USA

Phone: +1 (216) 689-2400

Fax: +1 (216) 689-2401

63 Brook St

London, W1K 4HS

United Kingdom

Phone: +44 (0) 20 7518 8900

Fax: +44 (0) 20 7526 2187

222 South Ninth Street

Suite 3350

Minneapolis, MN 55402

USA

Phone: +1 (612) 359-2700

Fax: +1 (612) 359-2701

1600 Market Street

21st Floor

Philadelphia, PA 19103

USA

Phone: +1 (267) 675-5900

Fax: +1 (267) 675-5901

575 Market Street

31st Floor

San Francisco, CA 94105

USA

Phone: +1 (415) 288-4260

Fax: +1 (415) 288-4269

Michael Wilkins

Managing Director

575 Market Street, 31st Floor

San Francisco, CA 94105

USA

Phone: +1 (415) 288-4260

[email protected] An der Welle 4

60322 Frankfurt am Main

Germany

Phone: +49 69 7593 7166

Fax: +49 69 2557 7415

www.harriswilliams.com

european technology update

Documents