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NORDHAVEN QUARTERLY SOFTWARE REPORT
Q1 2019
2
KEY OBSERVATIONS Q1 2019
IDENTIFIED # OF NORDIC SOFTWARE TRANSACTIONS
MEDIAN EV / SALES FOR SELECTED NORDIC TRANSACTIONS1
24
1719
28
33
13
21
28
23
29
20
24
Q12017
Q42017
Q22016
Q22018
Q32016
Q4 2016
Q2 2017
Q32017
Q12018
Q32018
Q42018
Q12019
EV / SALES INTERNATIONAL SOFTWARE COMPANIES
Q22016
Q22018
Q32016
6.9x
Q12018
Q4 2016
Q12017
Q2 2017
6.7x
Q42017
Q32018
Q42018
Q12019
5.6x4.6x
5.8x 6.1x 6.1x 5.7x6.7x 6.3x 6.3x
Q2 2016 – Q1 2019
Q32017
Q4 2016
Q32016
Q42017
Q22016
Q12017
Q12018
2.4x
Q2 2017
Q22018
Q32018
3.1x
Q42018
Q12019
2.2x
3.7x 3.5x
4.0x
1.8x
4.6x
2.3x2.0x
3.7x
3.1x
▪ There were 24 transactions in the software space in the Nordics in Q1 2019 vs. 20 inthe previous quarter.
▪ The largest deal activity within Nordic software could be found in Demark with 9identified transactions, followed by Sweden with 7 identified transactions
▪ PE buyers were the leading buyer group, completing 14 of the 24 deals.
▪ North American buyers dominated in Q1 with 10 (42%) of the 24 deals, Nordic buyersrepresented 9 (38%) of the transactions
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. Transactions below 5 MEUR have not been included.
24
transactions
in Q1 2019
6.3x
EV / SALES1
1) Median for 3 selected transaction per quarter, extreme “outliers” excluded. Backward looking multiples. 2)Median based on revised selection of international software companies
(appendix 1). Source: Mergermarket, FactSet and Nordhaven analysis
OVERVIEW OF Q1 2019
3
NORDIC SOFTWARE TRANSACTIONS
COMMENTS
▪ Nordhaven has identified 24 Nordic software transactions in Q1 2019
▪ 42% of the companies were acquired by trade buyers, which is somewhat lower than historical average
▪ Of the equity-backed deals, 9 were platform and 5 were add-on investments
▪ Sweden, Norway and Finland completed 15 deals, representing 63% of the total deal activity in Nordics for the period
▪ 38% of the companies were sold to entities in the Nordics and we observe as much as 42% acquirers from US/Canada
DEALS BY EXIT TYPE
DEALS BY TARGET’S COUNTRY DEALS BY ACQUIRER’S REGION
10
9
Trade Buyer
PE - Platform
PE - Add-on
5
2
76
Denmark
SwedenFinland
9
Norway
0
Iceland Rest of World
Rest of Europe
US / Canada
8Nordics
10
4
1
Source: Mergermaket and Nordhaven analysis
QUARTER-BY-QUARTER DEVELOPMENT 2017 - 2019
4
NORDIC SOFTWARE TRANSACTIONS
BREAKDOWN OF DEALS BY EXIT TYPE BREAKDOWN OF DEALS BY TARGET’S COUNTRY
BREAKDOWN OF DEALS BY ACQUIROR’S REGION NUMBER OF TRANSACTIONS
12%
61%
Q32017
Q2 2017
21%25%
38%14%
Q12017
Q22018
52%
36%
0%
38%
57%62%
13%24%
71%
33%
43%
Q42017
14%
14%
55%
Q12018
30%
7%
48%
45%
Q32018
25%
20%
Q42018
42%
Q12019
PE - Add-on PE - Platform Trade buyer
46%
27%
29%
9%
36% 38%
Q12017
25%
18% 8%
18%
42%
21%
Q2 2017
26%
31%28%
32%
36%
Q42017
15%8%
Q32017
48%
0%
38%
14%
18%
14%
Q12018
Q42018
35%
17%
22%
21%
Q22018
10% 3%0%
38%
Q32018
25%
20%
25%
25%
5%
29%
Q12019
NorwaySweden IcelandDenmark Finland
68%
17%
54%
25%
34%6%
Q22018
78%
6%
Q12017
4% 4%
Q12019
58%
30%
46%
0%
18%31%
8%17%
38%
15%
Q32017
Q12018
71%
5%
24%
0%
Q42017
7%
25%
4% 4%
45%
Q2 2017
42%
0%14%
Q32018
40%
40%
20%
Q42018
4%
Rest of EuropeUS / CanadaNordics Rest of World
28
33
13
21
28
23
29
20
24
Q32018
Q12017
Q12018
Q2 2017
Q32017
Q42017
Q42018
Q22018
Q12019
Source: Mergermaket and Nordhaven analysis
5
NOTABLE TRANSACTIONS DURING Q1 2019
Denmark-based provider of a SaaS platform that allows
marketing departments to create, launch and measure
social media campaigns in real time
Denmark-based company that provides software and
hardware solutions for supply chain management
Denmark-based workplace software developer
Finland-based provider of cash flow automation
solutions and integration solutions to banks,
businesses, and public sector organizations
Finland-based mobile multimedia reporting
specialist
4.0
64.8
8.0
10.1
23.6
4.0
3.4
2.9
TARGET ACQUIRORREVENUE 2018 (MEUR) SELLER
Corporate
Private
Private
PrivateNorway-based provider of property management
systems for hotels, activity centres and camping
sites
Corporate
Private
PrivateFinland-based developer of software for
organizational development
NA
Sweden-based provider of mobile solutions for planning,
registration and monitoring within home care, special
accommodation and personal assistance
Private
70%
Source: Mergermaket, FacSet and Nordhaven analysis
6
SELECTED SOFTWARE TRANSACTIONS MULTIPLES) – LAST 12 MONTHS
Developer of software suite for time tracking, resource
management and budgeting
Provides software and hardware solutions for supply chain
management
Marketplace technology solutions for the exchanges, banks
and brokerage companies
Engaged in developing mobile apps and web user interfaces for
IoT applications and also develops a cloud-based analytics
platform for processing data
Video games developer
3.8x
5.1x
0.9x5
3.1x
4.7x
14.5x2
3.1x3
2.7x
2.4x
2.2x4Software for mobile solutions and mobile services
Software providing web content management etc
Software for interactive entertainment
Provider of a SaaS platform that allows marketing departments
to create, launch and measure social media campaigns in real
time
TARGET ACQUIROREXIT MULTIPLE (EV/SALES)1
Workplace software developer
1) Backward looking multiples. 2) Assumed 34% growth in sales FY 2016-2017. 3) Assumed no debt. 4) LTM Q2 2018. 5) Manufacturing products and software provider Source:
Mergermaket, FacSet, Valu8 and Nordhaven analysis
7
TRADING MULTIPLES FOR SELECTED INTERNATIONAL AND NORDIC SOFTWARE COMPANIES1
28.4x
10.2x
42.7x
76.0x
17.4x11.0x
16.5x
34.6x
41.3x
13.4x
MEDIAN
EV/SALES:
6.3x2
5.1x4.0x
12.2x
4.4x
12.5x
2.9x
14.2x 14.6x
8.0x 7.5x
EV/SALES 2019E1
MEDIAN
EV/EBITDA:
19.4x2
EV/EBITDA 2019E1
1) Forward looking multiples. 2) Median based on full selection of software companies, see appendix 1. Source: FacSet
8
LIST OF IDENTIFIED NORDIC SOFTWARE TRANSATIONS Q1 2019
# TARGET TARGET COUNTRY BIDDER BIDDER COUNTRY DATE TYPE
1 Compuverde AB Sweden Pure Storage, Inc. USA March Trade Buyer
2 eBuilder Travel AB Sweden MobileXpense SA Belgium March PE - Add-on
3 OpusCapita Solutions Oy Finland Providence Equity Partners L.L.C. USA March PE - Platform
4 Avoine Oy Finland Vitec Software Group AB Sweden March Trade Buyer
5 IntraPhone AB Sweden Addnode AB Sweden March Trade Buyer
6 VisBook AS (70% Stake) Norway Standout Capital Sweden February PE - Platform
7 Infobric AB Sweden Summa Equity AB Norway February PE - Platform
8 Xstream A/S Denmark SeaChange International Inc USA February Trade Buyer
9 DMDD A/S Denmark SYNLAB International GmbH Germany February PE - Add-on
10 Dixa ApS1 Denmark Seed Capital Denmark; Project A Ventures GmbH & Co. KG Denmark; Germany February PE - Platform
11 Tink AB Sweden SEB; Nordea AB etc. Multiple February Trade Buyer
12 in4mo Oy Finland Solera Holdings, Inc. USA February PE – Add-on
13 RELEX Solutions1 Finland Technology Crossover Ventures USA February PE - Platform
14 Wizdom A/S Denmark LiveTiles Limited USA February Trade Buyer
15 Cambio Healthcare Systems AB Sweden Investcorp Bahrain February PE - Platform
16 PCSYS A/S Denmark TECSYS Inc. Canada February Trade Buyer
17 Artificial Solutions Scandinavia AB Sweden Indentive AB Sweden January Trade Buyer
18 Oy Samlink Ab Finland Cognizant Technology Solutions Corporation USA January Trade Buyer
19 Leapwork A/S Denmark e.ventures; DN Capital Limited UK;,USA January PE - Platform
20 Scanmarket A/S Denmark Verdane Capital Advisors AS Norway January PE - Platform
21 ClinicCare Denmark EG A/S Denmark January PE - Add-on
22 Leiki Ltd. Finland DoubleVerify, Inc. USA January PE - Add-on
23 Wellit AS (60% Stake) Norway Norvestor Equity AS Norway January PE - Platform
24 Falcon.io ApS Denmark Cision Ltd. USA January Trade Buyer
Source: Mergermaket, FacSet and Nordhaven analysis. 1) Undisclosed minority investment, but included due to the size of the investment at 175 MEUR
9
CONSUMER
SERVICES
TMT
Systems
Professionals Years of
experience
Transactions
advised
~40 300+ 20
INDUSTRIALS
NORDHAVEN IN SHORT
Nordhaven service offering
CORE SECTOR EXPERTISE
What we believe in
We operate as a strategic financial advisor and partner to owners,
board members and management throughout the business life cycles.
▪ MERGERS & ACQUISITIONS
▪ DEBT & CAPITAL ADVISORY
▪ INCENTIVE ADVISORY
Announced partnership with Capillar Advisory (former UB Capital) to further strengthen pan-
Nordic coverage
▪ M&A is a particular craftmanship we only will be good at if we stay focused, are well prepared
and strive to stay ahead of the pack
▪ We love technology and we admire founders – that is also our own heritage
▪ We seek added value for our clients through identifying and arguing for strong business logic
and strategic rationale in the deals that we advise
NORDHAVEN IS THE LEADING INDEPENDENT M&A SPECIALIST IN THE NORDIC
Source: MergerMarket, sell-side 2018 Norway, Sweden, and Finland
INDEPENDENT M&A ADVISORS BY NUMBER OF PRIVATE DEALS*
RECENT TMT DEALS
1
0
14
11
10
7
7
7
6
5
4
CONSISTENTLY STRONG RATINGS
2/3 Industrial
2/3 Crossborder
Source: MergerMarket, sell-side 2018 Norway, Sweden, and Finland
ONE OF THE LEADING INDEPENDENT M&A ADVISORY FIRMS IN THE MID-MARKET SEGMENT
Western EuropeBelgium
France
Germany
Italy
The Netherlands
Spain
Switzerland
United Kingdom
Northern EuropeDenmark
Finland
Norway
Sweden
Central & Eastern
EuropeAustria
Hungary
Poland
Russia
Transactions
closed in 2018
The AmericasBrazil
Canada
Chile
Mexico
USA
Middle EastIsrael
Turkey
Asia-PacificAustralia
China
130Professionals
300Cumulative value of
transactions closed
in 2018
€3.3bn
1
1
We have been exclusive
Nordic partner of Clairfield
International since 2012,
and we have local partners
in over 20 countries.
Through the Clairfield
250+ professionals we
have global connectivity,
and local access to
counterparts.
High ranking in the league
tables:
# 15 worldwide
# 9 in EMEA
#1 in EMEA Technology
sector
PARTNER OF CLAIRFIELD INTERNATIONAL
12
APPENDIX 1: SELECTED NORDIC AND INTERNATIONAL LISTED SOFTWARE COMPANIES
# TICKER FACTSET COMPANY NAME EV/SALES 2019E EV/EBITDA2019E
1 WDAY Workday 14,19x 76,02x2 ADBE Adobe Systems 12,50x 28,36x3 ADSK Autodesk 12,24x 42,71x4 NOW ServiceNow 23,95x 87,24x5 CRM Salesforce 7,97x 34,60x6 DSY-FR Dassault Systems 8,67x 25,07x7 INTU Intuit Inc 9,65x 26,18x8 ULTI Ultimate Software Delisted Delisted9 DATA Tableau Software 7,86x 48,11x
10 CHKP Check Point Software 8,54x 16,63x11 RHT Red Hat 8,56x 31,86x12 MSFT Microsoft 7,51x 17,40x13 VMW Vmware 8,70x 23,08x14 EGAN-US eGain Corporation 3,58x 32,37x15 CSOD-US Cornerstone Ondemand 6,33x 29,25x16 ENGH-CA Enghouse Systems 4,37x 14,44x17 CTXS-US Citrix 4,02x 10,96x18 CSU-CA Constellation Software 5,10x 19,44x19 SAP-DE SAP 5,14x 16,52x20 ORCL Oracle 5,50x 12,14x21 CERN-US Cerner 3,90x 13,36x22 SGB-GB Sage Group 4,24x 16,03x23 NUAN-US Nuance Communications 3,42x 11,32x24 SYMC Symantec Corporation 3,20x 7,98x25 PRGS Progress Software 5,56x 14,48x26 FNOX.MTF-SE Fortnox 14,55x 41,29x27 HEXA.B-SE Hexagon 4,39x 13,37x28 VIT.B-SE Vitec 2,93x 10,15x
Source: FacSet
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