nasdaq 6,340.23 3.8% 26.8% mergers & acquisitions ... · terminus, of atlanta, is an account...

MERGERS & ACQUISITIONS • CAPITAL RAISES • FINANCIAL & STRATEGIC ADVISORY

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TRADING MULTIPLES

MARKETING TECHNOLOGY UPDATE – Q2 2017

UPDATE FROM SCOTT RHODES

▪ Google and Facebook accounted for all revenue growth inadvertising spending

▪ Given the high amount of capital raised for marketing techcompanies and the strong public company, M&A activity islighter than we would have expected

▪ In April, Marketo acquired sales engagement tool,ToutApp. Signals greater effort to bring sales andmarketing departments together

▪ In June, DexMedia acquired YP Holdings to expand itsSMB marketing automation platform. DexYP will combinelocal marketing automation with print

▪ NinthDecimal acquired MoLOGIQ in June for tools, talentand device reach. Gives it largest mobile device reach ofany U.S. location intelligence company

MAJOR INDICES & RATES

% Change

3 Month 12 Month

Marketing Tech (CAP) 55,860.13 7.0% 26.0%

Product/Supply Chain (CAP)89,119.74 5.7% 37.1%

Dow Jones 21,993.71 3.0% 19.1%

NYSE 11,856.06 2.1% 12.1%

NASDAQ 6,340.23 3.8% 26.8%

AMEX 2,508.53 2.3% 5.9%

S&P 500 2,465.84 2.3% 15.5%

Russell 2000 1,394.31 2.4% 22.9%

USD/Euro 0.88 (6.0%) (2.7%)

USD/Yen 112.34 0.9% 9.4%

USD/Pound 0.77 (3.9%) 2.4%

U.S. Prime Rate 4.250% 25.00 Bps 75.00 Bps

U.S. Treasury - 10 Year 2.310% (11.00 Bps) 82.00 Bps

LIBOR - 3 month 1.299% 15.16 Bps 64.51 Bps

Fed Funds Overnight Rate 1.060% 15.00 Bps 76.00 Bps

Close as of

6/30/2017

Enterprise Value

LTM Revenue LTM EBITDA

Sales & Marketing Tech 4.63x 15.7x

Product & Supply Chain 5.81x 18.0x

CHILDS CASE STUDY

▪ In May 2017, Terminus raised a $10 million Series B roundled by Edison Partners, which is private equity investoractive in marketing tech. Also participating were AtlantaVentures (David Cummings) and existing investors. Totalcapital raised to date of $19.6 million

▪ Terminus, of Atlanta, is an account based marketing (ABM)platform led by CEO and co-founder, Eric Spett. Funds willfurther build out its platform, its cloud partner programand add a West coast office

▪ Their SaaS ABM platform enables B2B marketers to runscalable campaigns to accounts in CRM systems

▪ Now leveraging predictive analytics and machine learningto find best fit target accounts which most look like existingcustomers across multiple dimensions

▪ Last year revenues increased by 600% as marketers putmore money into ABM strategies

Our senior bankers will be attending Dreamforce in San Francisco in November. Let us know if interested in meeting to discuss M&A and later stage capital raising

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CHILDS Advisory Partners

MARKETING TECH CATEGORY REMAINS ACTIVE

-ACQUISITION-

Creates visual content platform for marketers and advertisers

Transaction Date: 7/7/17

Total EV: $50M

Key Metrics (Buyer):

– Revenue: $518M

– EBITDA: $58M

– Market Cap: $1,152M

-ACQUISITION-

Provides digital advertising solutions

Announced Date: 7/18/17

Total EV: $147M

Key Metrics:

– Target Rev: $421M

– EBITDA: ($17M)

– EV/Rev: 0.3x

Buyer Financial Sponsors:

($ in millions)

-ACQUISITION-

Develops SaaS analytics solutions for brand advertisers and publishers

Announced Date: 4/18/17

Total EV: Not disclosed

Seller Financial Sponsors:

-CAPITAL RAISE-

Develops account-based marketing platform for B2B marketers


Investment Size: $10M

Total Raised: $20M

Representative Investors:

-CAPITAL RAISE-

Provides an online solution to understand the customer experience



Total Raised: $27M


-CAPITAL RAISE-

Provides B2B marketing solutions



Total Raised: $128M


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Buyer TargetEnterprise Value ($M)

Q2 2017

Adama Technologies Corporation ELEMENT99 ND

Shutterstock (NYSELSSTK) FlashStock Technology Corp. $50

RhythmOne (AIM:RTHM) RadiumOne, Certain Assets $26

Sizmek Rocket Fuel (NasdaqGS:FUEL) $147

Fidelity National Financial (NYSE:FNF) Real Geeks ND

Time (NYSE:TIME) Adelphic ND

Inmar [ABRY Partners] Collective Bias [Updata Partners] ND

Upland Software (NasdaqGS:UPLD) Waterfall International $26

Oracle Corporation (NYSE:ORCL) Moat ND

Deloitte Digital Web Decisions ND

Vista Equity Partners Market Track ND

Marketo ToutApp ND

Insight Venture Partners Zyme [Susquehanna Growth Equity] ND

Time Inc (NYSE:TIME) Adelphic, Inc. $25

Inmar [ABRY Partners] Collective Bias [Updata Partners] ND

Hybris AG [SAP] Abakus, Inc. ND

The Carlyle Group (NasdaqGS:CG) VXI Global Solutions ND

Yelp Inc. (NYSE:YELP) Turnstyle Solutions, Inc. $20

iProspect, Inc. Leapfrog Online, Inc. ND

Marketo ToutApp ND

Dex Media YP Holdings ND

NinthDecimal MoLOGIQ ND

Q1 2017

SintecMedia [Francisco Partners] Operative $200

Aprimo ADAM Software ND

AcuityAds Holdings Inc. (TSXV:AT) Visible Measures Corporation $10

Globant S.A. (NYSE:GLOB) Ratio Interactive LLC ND

Nielsen Holdings plc (NYSE:NLSN) Rhiza, Inc. ND

Surefire Local Promio [Fulcrum Equity Partners] ND

RECENT MARKETING TECHNOLOGY M&A TRANSACTIONS

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Representative Investors CompanyCurrent Raise

($M)

Q2 2017

[Unknown] Allbound ND

[Unknown] Branded Online $4

Silicon Valley Bank BounceX $31

Sageview Capital, Silver Lake Waterman, Adobe Systems, Altos Ventures, Greenspring Associates

Demandbase $65

GV, Salesforce Ventures Fullstory $15

Atlanta Ventures, Edison Partners, Hyde Park Venture Partners, Arthur Ventures, Knoll Ventures

Terminus Software $10

Vanedge Capital, Sierra Ventures, Data Collective, Resonant VC, Geekdom Bitfusion $5

SaaS Capital TapClicks $3

Starfish Ventures; Safeguard Scientifics (NYSE:SFE) Aktana $18

Insight Venture Partners; Point Nine Capital GoSpotCheck $17

Q1 2017

Salesforce Ventures Chute $4

Andreessen Horowitz, Geekdom Fund, Pat Condon Tenfold $16

Undisclosed Signdat, LLC ND

Toba Capital SmartZip Analytics, Inc. ND

Schooner Capital LLC MediaSilo, Inc. $7

RRE Ventures Knock $33

Columbus Nova; ServiceNow Ventures; Salesforce Ventures; Greycroft Partners MapAnything $33

Polaris Partners; Microsoft Accelerator, Kleiner Perkins Caufield & Byers; QuestMark Partners

InsideSales.com $50

Q4 2016

Spectrum Equity Rain King Software $67

IDG Capital Partners; Sequoia Capital; Lakestar; Lightspeed China Partners EverString Technology $65

Silversmith Capital ActiveCampaign $20

RECENT MARKETING TECHNOLOGY CAPITAL RAISES

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EV/EBITDA

CAPITAL MARKETS AND M&A ACTIVITY


Source: Capital IQ

SALES AND MARKETING SOFTWARE M&A VOLUME – QUARTERLY TRENDS

▪ Marketing technology stocks performedstrongly in second quarter with the CHILDSindices for marketing technology and product /supply chain increasing by 7.0% and 5.7%respectively, compared to an increase of 2.3%for S&P 500

▪ Many of the marketing technology publiccompanies are traded near their 52 week highs

▪ MarTech M&A volume ticked up slightly in Q22017 from 12 to 14 transactions and remainsrelatively consistent with prior quarters

▪ Valuations for M&A transactions involvingsoftware companies remained flat at 2.4x timesrevenue, on average when reported

▪ Valuations for publicly traded softwarecompanies increased slightly in Q2. Averagemultiples at end of Q2 for MarTech, SaaS andEnterprise Software were 3.3x, 5.4x, and 4.2xrevenue

EV/Revenue

SOFTWARE M&A VALUATIONS

SOFTWARE PUBLIC MARKET VALUATIONS

EV/Revenue

16

13

16

20 2019

1514 14

18

26

18

11

19

12 12

14

0

5

10

15

20

25

30

2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17

4.2x

5.3x

3.2x

4.0x

5.0x

2.8x

4.2x

5.4x

3.2x

4.2x

5.4x

3.3x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

Enterprise Software SaaS Sales & Marketing Tech

Q3 2016 Q4 2016 Q1 2017 Q2 2017

2.40x

2.49x 2.49x

2.25x

2.40x 2.38x

2.10x

2.15x

2.20x

2.25x

2.30x

2.35x

2.40x

2.45x

2.50x

2.55x

2012 2013 2014 2015 2016 2017 YTD

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PUBLIC TRADING STATISTICS

Sources: Capital IQ* Denotes figure excluded from mean calculation

SALES & MARKETING TECHNOLOGY

PRODUCT AND SUPPLY CHAIN

(USD in millions, except for stock price)

(USD in millions, except for stock price)

UPCOMING MARKETING TECH CONFERENCES [1]

[1]: Green font represents planned attendance by CHILDS Advisory Partners

Market Data Operating Statistics EV as a Multiple of: Growth

Stock Price LTM LTM CY2017 16 - '17

Company Name 6/30/17 Revenue EBITDA % Margin Revenue EBITDA Revenue EBITDA GrowthAverage

Adobe Systems Incorporated $141.44 95.9% $69,787.3 $66,744.2 $6,526.2 $2,141.5 32.8% 10.23x 31.2x 8.18x 19.2x 23.2% 16.7%

Salesforce.com, inc. 86.60 94.1% 61,601.9 60,917.9 8,863.0 448.9 5.1% 6.87x 135.7x * 5.16x 23.5x 22.9% 26.2%

Amdocs Limited 64.46 97.0% 9,440.4 8,491.0 3,828.1 712.6 18.6% 2.24x 11.9x 2.03x 10.0x 4.0% 2.9%

Criteo S.A. 49.05 87.6% 3,176.2 2,971.8 2,049.4 186.3 9.1% 1.55x 16.6x 2.61x 8.0x 32.8% 44.5%

HubSpot, Inc. 65.75 83.8% 2,403.5 2,281.8 318.4 (34.7) (10.9%) 7.75x NM * 5.21x 78.0x * 35.5% 50.3%

Callidus Software Inc. 24.20 97.4% 1,569.9 1,386.6 228.0 (7.8) (3.4%) 6.41x NM * 4.94x 32.7x 20.2% 22.4%

LivePerson, Inc. 11.00 92.1% 642.9 595.1 215.6 8.2 3.8% 2.73x 75.5x * 3.13x 28.6x (3.4%) 40.5%

Bazaarvoice, Inc. 4.95 80.7% 417.2 358.0 201.2 (4.9) (2.4%) 1.78x NM * 1.58x 13.0x 0.2% 6.2%

ChannelAdvisor Corporation 11.55 72.6% 304.1 242.0 118.1 (4.6) (3.9%) 2.10x NM * 1.63x 23.7x 9.4% 15.2%

The Rubicon Project, Inc. 5.14 35.2% 249.0 61.0 227.4 7.1 3.1% 0.24x * 3.2x NM * NM * (29.6%) 31.7%

QuinStreet, Inc. 4.17 90.1% 189.6 147.8 299.8 3.2 1.1% 0.50x * NM * 0.39x * 4.7x 3.4% 2.0%

Rocket Fuel Inc. 2.75 46.6% 127.7 150.9 420.5 (16.6) (3.9%) 0.34x * NM * 0.49x * NM * (23.8%) 10.1%

Marin Software Incorporated 1.30 46.1% 51.2 21.4 86.0 (11.6) (13.5%) 0.23x * NM * 0.00x * 0.0x * (100.0%) (1.0%)

Mean 78.4% $1,798.6 $263.7 2.7% 4.63x 15.7x 3.83x 18.1x (0.4%) 20.6%

Median 87.6% $299.8 $3.2 1.1% 2.73x 14.2x 3.13x 19.2x 4.0% 16.7%

3 Year Rev CAGR

% of 52Week High

Market Cap.Enterprise

Value

Market Data Operating Statistics EV as a Multiple of: Growth

Stock Price LTM LTM CY2017 16 - '17

Company Name 6/30/17 Revenue EBITDA % Margin Revenue EBITDA Revenue EBITDA GrowthAverage

Autodesk, Inc. $100.82 87.9% $22,219.9 $21,900.1 $2,004.8 ($294.2) (14.7%) 10.92x NM * 9.20x 48.9x * 0.8% (4.4%)

Dassault Systèmes SE 78.49 91.9% 19,961.6 18,132.6 3,176.4 800.7 25.2% 5.80x 21.6x 5.47x 16.2x 7.5% 14.5%

Veeva Systems Inc. 61.31 90.1% 8,568.2 7,904.3 582.2 141.4 24.3% 13.58x 55.9x * 10.17x 31.7x 24.1% 35.5%

Shopify Inc. 86.90 86.2% 8,492.5 8,096.8 509.0 (34.5) (6.8%) 18.24x * NM * 8.98x 189.2x * 70.8% 0.0%

Open Text Corporation 31.54 89.6% 8,324.2 10,494.8 2,291.1 631.7 27.6% 4.97x 17.5x 3.80x 10.1x 31.6% 12.1%

Splunk Inc. 56.89 82.2% 7,871.9 6,868.6 1,006.5 (288.4) (28.7%) 6.82x NM * 4.72x 37.3x * 26.3% 44.8%

PTC Inc. 55.12 91.5% 6,367.6 6,812.7 1,143.3 90.6 7.9% 5.96x 75.2x * 5.41x 21.3x 3.5% (4.5%)

Manhattan Associates, Inc. 48.06 70.7% 3,337.5 3,236.2 597.4 202.1 33.8% 5.41x 16.0x 4.73x 13.1x (2.0%) 27.2%

The Descartes Systems Group Inc 24.35 95.7% 2,396.8 2,322.5 209.4 70.1 33.5% 8.11x 24.2x 0.00x * 0.0x * NM 9.8%

MicroStrategy Incorporated 191.67 92.5% 2,193.7 1,575.2 511.2 109.2 21.4% 3.07x 13.7x NM * NM * (1.9%) (4.5%)

Kinaxis Inc. 80.74 87.8% 2,041.9 1,852.7 125.6 22.0 17.5% 11.45x 68.6x * 7.47x 26.1x 14.4% 24.3%

SPS Commerce, Inc. 63.76 85.2% 1,096.2 941.9 206.6 22.9 11.1% 4.72x 44.8x * 3.36x 21.6x 14.4% 21.6%

PROS Holdings, Inc. 27.39 89.8% 861.0 867.1 158.8 (55.2) (34.8%) 5.58x NM * 4.61x NM * 10.3% (0.4%)

Workiva Inc. 19.05 94.5% 788.2 744.3 192.4 (32.4) (16.8%) 4.00x NM * 3.29x NM * 15.6% 24.6%

QAD Inc. 32.05 96.0% 593.4 454.4 284.0 10.1 3.6% 1.60x 45.0x * 1.43x 25.3x 4.8% 1.3%

ChannelAdvisor Corporation 11.55 72.6% 304.1 242.0 118.1 (4.6) (3.9%) 2.10x NM * 1.63x 23.7x 9.4% 15.2%

American Software, Inc. 10.29 85.1% 303.3 217.9 106.3 10.3 9.7% 2.05x 15.1x 1.64x 9.1x (2.4%) 1.8%

Datawatch Corporation 9.30 95.9% 111.8 84.1 34.7 (3.9) (11.2%) 2.55x NM * 2.32x 93.2x * 16.8% (0.2%)

Mean 88.1% $736.5 $77.7 5.5% 5.81x 18.0x 4.89x 19.8x 14.4% 12.1%

Median 89.7% $396.5 $16.1 8.8% 5.41x 16.7x 4.66x 21.5x 10.3% 11.0%

% of 52Week High

Market Cap.Enterprise

Value3 Year

Rev CAGR

DATES EVENT LOCATION

Sept 25 – 28 Inbound Boston, MA

Oct 23 - 25 Hero London

Nov 6 -9 Dreamforce San Francisco, CA

Dec 6 - 8 Advocamp San Francisco, CA

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(20.0%)

(10.0%)

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Marketing Tech Product and Supply Chain S&P 500

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

Marketing Tech Product and Supply Chain


STOCK MARKET FUNDAMENTALS

Marketing Tech: ADBE, BV, CALD, CRTO, CRM, DOX, ECOM, FUEL, HUBS, LPSN, MRIN, QNST, RUBI Product and Supply Chain: DSY, ADSK, OTEX, SPLK, VEEV, SHOP, PTC, MANH, MSTR, DSGX, KXS, SPSC, PRO, WK, QADA, AMSW.A, ECOM, DWCH

SUBSECTOR INDEXES VS. S&P 500

VALUATION TREND DATA (EV/LTM REVENUE)

63.6%

4.63x

63.4%

5.81x

23.6%

3 mos. 12 mos. 3 yrs

S&P 500 2.3% 15.5% 23.6%

Marketing Tech 7.0% 26.0% 63.6%

Product & Supply Chain 5.6% 36.9% 63.4%

3 mos. 12 mos. 3 yrs

Marketing Tech 5.9% 8.7% (7.0%)

Product and Supply Chain (4.9%) 7.2% 6.7%

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FIRM OVERVIEW

MERGERS & ACQUISITIONS

CAPITAL RAISESFINANCIAL &

STRATEGIC ADVISORY

CHILDS ADVISORY PARTNERS’ SERVICES

• 41 professionals across four offices in the U.S. with headquarters in Atlanta

• 72 total transactions closed since the beginning of 2014 with 26 in the technology space

• Over 450 transactions completed in the middle market (Enterprise Value less than $1.0 billion)

• 60% transactions since 2013 have involved a strategic buyer; 40% a financial sponsor

QUICK FACTS

• 2016 U.S. Boutique Investment Bank of the Year by The M&A Advisor

• 2016 Ranked #1 by 451 Group for IT Services transactions in the U.S.

• 2014 Cross-Border Transaction of the Year Finalist

• 2014 Professional Services Transaction of the Year Finalist

• 2013 Strategic Acquisition of the Year Winner

• 2013 U.S. Boutique Investment Bank of the Year Finalist

ACCOLADES

CORE COVERAGE

Process Outsourcing

Human Capital

Industrial Services

BUSINESSSERVICES HEALTHCARE TECHNOLOGY

IT Professional Services

Software

Sales

Marketing

Product

Supply Chain

Human Resources

Marketing

Healthcare

SOFTWARE MARKETING

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TEAM’S EXTENSIVE EXPERIENCE IN MARKETING TECHNOLOGY

Buy-Side Advisory▪ Kepware develops software solutions to help bridge the communication gap between

diverse hardware and software applications for the industrial automation industry globally

Sell-Side Advisory▪ Cloud-based channel data management solution provides manufacturers real-=time

channel information to anticipate ongoing or changing channel business needs including management of rebate programs

Sell-Side Advisory▪ Provider of SaaS CRM software and sales automation solutions providing a view of

customer interactions across sales and marketing

Sell-Side Advisory▪ Cloud based RFID and data solutions to automate retail supply chains

Buy-Side Advisory▪ Counterpoint Systems is a provider of rights and royalty management software for the

media and entertainment, music, publishing, record label and distribution, and brand licensing/merchandising industries

Buy-Side Advisory▪ Hawkeye Channel is a provider of sales and marketing solutions to engage indirect sales

channels enabled through SaaS platforms

Sell-Side Advisory▪ Provider of web-=based retail ticketing, RFID, and software solutions for retailers,

suppliers, and manufacturers worldwide

Sell-Side Advisory▪ Leading enterprise mobile application development provider focused on delivering sales

enablement applications and tools to the financial services industry

Sell-Side Advisory▪ Provider of business acceleration services for the digital economy, offering digital

transformation consulting services focused on sales and marketing

Sell-Side Advisory▪ Provider of marketing services and solutions for the technology channel, including

advertising, managed marketing, marketing automation services and management of co-op marketing and market development funds

*Buyer listed to the left

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CHILDS’ MARKETING TECHNOLOGY TEAM

CHILDS Advisory Partners | 3438 Peachtree Road, Suite 1400 Phipps Tower | Atlanta, GA 30326 | ph: 404.751.3000 | www.childsadvisorypartners.com

CHILDS OFFERS THE SENIOR LEVEL ATTENTION AND ADVISORY FOCUS OF A BOUTIQUE FIRM

COUPLED WITH BANKERS WITH BULGE BRACKET EXPERIENCE

\

▪ Former Corporate Development executive for two S&P 500 companies, Equifax and Waste Management

▪ CEO of private equity backed business called Bagster sold to strategic Fortune 500

▪ 14 years of investment banking experience including Citigroup and Bank of America with over 80 M&A and capital markets transactions

▪ MBA from Kellogg School at Northwestern University (Beta Gamma Sigma) and BA from UNC Chapel Hill (Phi Beta Kappa)

▪ Co-founder of Bulger Capital Partners

▪ Co-head of East Coast Services and Software for Needham & Company

▪ 18 years of investment banking experience executing M&A transactions and raising capital

▪ MBA from F.W. Olin School of Business at Babson College and a BA from Hobart College

▪ 7 years of investment banking experience with Morgan Stanley and KPMG

▪ Executed 15 M&A and capital markets transactions (over $15 billion in value)

▪ MBA from Darden School of Business at the University of Virginia and undergraduate from the University of Virginia

Scott RhodesManaging [email protected]

Tom DonahueManaging [email protected]

Justin BentleyVice [email protected]

▪ 8 years of investment banking experience

▪ Current and past clients include companies such as Nexus, Bear Data, Aggressor and Utopia

▪ Former investment banker at SunTrust Robinson Humphrey

▪ Graduated cum laude from Washington & Lee University

Steve CarrVice President [email protected]

▪ Former M&A investment banker at SunTrust Robinson Humphrey

▪ Prior to joining SunTrust, Mr. Silverman was an analyst in the technology group at Canaan Partners, a venture capital firm based in California

▪ M.A.c.c. and B.B.A. from the University of Georgia

▪ CPA earned in 2013

Kenny [email protected]

▪ 7 years of investment banking experience

▪ Current and past clients include companies such as Peoplenet Channelinsight, McKinnis, Aggressor, FineLine Technologies, and Solstice Mobile

▪ Graduated cum laude from the University of Georgia

R.B. McCutcheonVice President [email protected]

nasdaq 6,340.23 3.8% 26.8% mergers & acquisitions ... · terminus, of atlanta, is an account...

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