STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI STOCKH

Quarterly Software Report

Q4 2017

21 TRANSACTIONS IDENTIFIED IN Q4/17 (19 IN Q4/16) – TOTAL OF 95 TRANSACTIONS IN 2017 (80 IN 2016)

2

DEVELOPMENT IN NUMBER OF IDENTIFIED TRANSACTIONS

EXECUTIVE SUMMARY

▪ As we projected after the disappointing Q3, the market did return to a growth path in Q4

with a total of 21 software transactions, 2 more than Q4/16.

▪ This brought the total for the year to 95 transactions, up 20 % from the previous year.

▪ Also this year the OMX Nordic 40 index ended the year on a sad note. The root cause is

again to be found outside of the software space, with companies like Nokia dropping

about 20 % and Acando being down about 10 %, while software companies did a much

better showing with f.ex. Basware being up 15 %.

▪ As a result of the limited impact of software in the Nordic Tech Index, Nordhaven has

decided to introduce our own Nordic software index, which will be launched in the

Q1/2018 report.

▪ Quite surprisingly (and probably by chance…) there were no deals announced in Denmark

in the quarter, while Sweden again topped the list with 10 deals. Norway had 8 and

Finland 3.

▪ Private equity buyers were back in the drivers seat in the quarter, completing 12 of the

21 deals.

▪ Nordic buyers dominated in Q4 with 15 of the 21 deals, partially driven by private equity.

▪ DISCOUNT GAP: As we have projected, the discount gap between the traditional and the

cloud-born companies has now been closed, as both categories are now priced at 6.1 x

Revenue. Consequently, we will merge the international software companies going

forward into one group.

▪ The Nordic discount is now 40 % compared with international software companies. This

should imply transaction willingness among industry trade buyers, or upside potential for

PE in taking the Nordic companies “outside their comfort zone”…

▪ Please do not hesitate to provide us with feedback on this report and interesting

perspectives on the Nordic software players.

▪ We wish all of you good luck in the Olympic Games! Our estimate is that there will be

more Norwegian medals in the Olympics than the number of software transactions in

Q1/2018. If the opposite is true, the software M&A market will be very busy…

NASDAQ OMX TECHNOLOGY INDEX: Jan 14 – Dec 17

2125

21 2118

2022

1820

24

1721

13

33

28

19

Q1 16Q4 15Q3 15Q2 15Q1 15Q4 14 Q1 17 Q4 17Q3 17Q2 17Q4 16Q3 16Q2 16Q3 14Q2 14Q1 14

1,700

1,600

1,500

1,400

1,300

1,200

1,100

1,000

900Jan. 14 Jun. 14 Dec. 14 Jun. 15 Dec. 15 jun. 16 dec. 16 jun. 17 dec. 17

OVERVIEW OF Q4 2017 NORDIC SOFTWARE TRANSACTIONS

3

BREAKDOWN OF DEALS BY ACQUIROR’S REGION

BREAKDOWN OF DEALS BY EXIT TYPE

BREAKDOWN OF DEALS BY TARGET’S COUNTRY

Source: Merger Market and Nordhaven analysis

COMMENTS

▪ Nordhaven has identified 21 Nordic Software transactions in Q4 2017

▪ Approximately 40% of the companies were acquired by industrials which is

lower than the historical average

▪ Strong activity from Private Equity, with platforms investments representing 1/3

of the deals and add-on investments 1/4 of the deals

▪ Nearly 50% of the targets were based in Sweden and nearly 40% were based in

Norway – modest activity in Finland and no deals announced in Denmark

▪ Nearly 3/4 of the companies are sold to entities in the Nordics, thus limited

activity from companies outside of Europe

10

Finland

Sweden

Denmark

8

03

Norway

5

PE - add-on

PE - platform

7

Industrial9

US / Canada

Nordics

1

5

Rest of Europe

15

Rest of world

0

QUARTER-BY-QUARTER DEVELOPMENT IN NORDIC SOFTWARE TRANSACTIONS

4

NUMBER OF TRANSACTIONS

BREAKDOWN OF DEALS BY TARGET’S COUNTRY

BREAKDOWN OF DEALS BY ACQUIROR’S REGION

Source: Merger Market and Nordhaven analysis

BREAKDOWN OF DEALS BY EXIT TYPE

17%

25%

72%

22%

6%

42%

26%

32%

Q1 16

38%

29%

Q4 17

43%

24%

33%

Q3 17

62%

38%

0%

Q2 17

36%

52%

12%

Q1 17

61%

14%

25%

58%

33%

Q4 16Q3 16Q2 16

PE - platform IndustrialPE - add-on

Q3 17

15%

31%

46%

Q2 17

27%

Q4 17

38%

0%

48%

20% 17%28%

16% 18%9% 8%

14%

Q1 16

25%

30%

25%

21%

42%

Q1 17

18%

29%

36%

Q4 16

21%

42%

21%

Q3 16

22%

22%

28%

Q2 16

4%

38%

42%

NorwayDenmarkSweden Finland

46%

Q2 17

30%

6%

Q4 17

24%

5%

71%

Q3 17

69%

Q2 16

21%

25%

46%

Q1 16

58%

Q1 17

4%

25%

68%

Q4 16

5% 4%11%8% 6% 6%

15%

25% 8%

55%

21%

11%

58%

15%

25%

0%31%

0%

Q3 16

Rest of WorldRest of EuropeUS / CanadaNordics

2024

17 19

2833

13

21

Q4 17Q3 17Q2 17Q1 17Q4 16Q3 16Q2 16Q1 16

ANNUAL DEVELOPMENT IN NORDIC SOFTWARE TRANSACTIONS

5

NUMBER OF TRANSACTIONS

BREAKDOWN OF DEALS BY TARGET’S COUNTRY

BREAKDOWN OF DEALS BY ACQUIROR’S REGION

Source: Merger Market and Nordhaven analysis

BREAKDOWN OF DEALS BY EXIT TYPE

25%

16%

51%

24%

25%

48%

35%

17%

2014

24%

67%60%

9%

201720162015

PE - platform IndustrialPE - add-on

17% 14% 20%13%

2014

24%

28%

31%

2017

25%

20%

42%

2016

18%

33%

30%

2015

26%

30%

30%

NorwayDenmarkSweden Finland

54%

2015

19%

29%

49%

2014 2017

6% 5%3% 8%

24%

41%

18%

15%

62%

30%

23%

16%

2016

Rest of WorldRest of EuropeUS / CanadaNordics

8877 80

95

2017201620152014

NOTABLE TRANSACTIONS DURING Q4 2017

6

Document sharing software

REVENUE (MEUR)TARGET ACQUIROR SELLER

Enterprise software

Financial reconciliation

software

Finance and payment solution

software

Application manager for

Freight Forwarders

Mobile parking and payment

solutions

Micro-life insurance products

for mobile operators

Software solutions for 3D

simulation

Source: Merger Market and Nordhaven analysis

Music software

Founders

Founders

Founders

5

1

33

4

4

8

6

9

0.1

Founders

SELECTED SOFTWARE TRANSACTION MULTIPLES (EV / SALES) – LAST 12 MONTHS

7Source: Merger Market and Nordhaven analysis

5,8x

5,7x

4,6x

4,0x

4,0x

3,8x

3,6x

3,5x

3,1x

2,0x

1,8x

1,2x

Q1 2017

Q2 2017

Q4 2017

Q2 2017

Q3 2017

Q2 2017

Q1 2017

Q4 2017

Q1 2017

Q3 2017

Q3 2017

Software for strategic sourcing

Telecom software provider

Online marketplace for professional services

Software for 3D simulation and training

Software for documentation of chemicals

Software for vehicle trip logs / fleet mgmt.

Software for smart grid / customer interaction

Open-source software for web design

Software for telecom expense management

Software for document sharing

Software for payment solutions

Software for customs clearance and freight forw.Q4 2017

OBSERVED TRADING MULTIPLES- DISCOUNT GAP FOR TRADITIONAL VS CLOUD ELIMINATED, WHILE NORDIC COMPANIES ARE STILL SIGNIFICANTLY LOWER

8Source: Merger Market and Nordhaven analysis

MEDIAN EV / SALES - CURRENT FINANCIAL YEAR (2018E)

NORDICS

INTERNATIONAL – «TRADITIONAL SOFTWARE»

INTERNATIONAL – CLOUDBASED/SAAS

5,1x4,4x 4,3x 4,3x

3,0x 2,9x 2,6x 2,5x1,3x

5,4x

Vitec SoftwareMicro

Systemation

BaswareHMS NetworkHexagonSimCorp CLX

Communication

CxenseTobiiF-Secure

4,2x4,5x4,7x4,9x5,0x6,1x6,4x

7,4x7,9x

10,0x10,8x

MicrosoftDassaultIntuitCheck PointAutodeskAdobe SymantecSAPCitrix SystemsOracleSage Group

9,3x 8,3x 8,2x6,4x 6,1x 5,4x 4,4x 4,1x 4,1x 3,7x

13,5x

Atlassiansalesforce.comGuideWireWorkdayServiceNowUltimate

Software

J2 GlobalAthenaHealthPegaSystemsCornerStoneLogMeIn

Median: 3.6x

Median: 6.1x

Median: 6.1x

LIST OF IDENTIFIED NORDIC SOFTWARE TRANSACTIONS IN Q4 2017

9Source: Merger Market and Nordhaven analysis

# Target Target Country Bidder Bidder Country Date Exit type

1 Admincontrol Norway Visma Norway October PE - platform

2 FEO Media Sweden MAG Interavtive Sweden October Industrial

3

Computational Industry Technologies Norway DNV Global Norway October Industrial

4 Adfenix Sweden Industrifonden Sweden October PE - platform

5 Adra Software Norway Trintech US November PE - add-on

6 Databyrån for infobehandling Sweden CSAM Health Norway November PE - add-on

7 Konsulent Data & Restaurant Norway OpenSolutions Nordic Sweden November PE - add-on

8 Tacton Systems Sweden Kirk Kapital / GRO Capital Denmark November PE - platform

9 Vidispine Sweden Arvato Systems Germany November Industrial

10 Odin Kapital Norway Melin Medical Norway November Industrial

11 Soundtrap Sweden Spotify Sweden November PE - add-on

12 Digpro Sweden Litorina Sweden November PE - platform

13 IStone Sweden Columbus Denmark November Industrial

14 Propentus Finland Cygate Finland November Industrial

15 Emma Systems Norway Vind Lv Norway December PE - platform

16 Easy Park Norway Vitruvian Partners UK December PE - platform

17 Maritech Systems Norway Broodstock Norway December PE - platform

18 Atollic Sweden STMicrolectronics Netherlands December Industrial

19 Milvik AB (minority stake) Sweden Allianz Germany December Industrial

20 Visual Components Finland KUKA AG Germany December Industrial

21 Finnpos Systems Finland OpenSolutions Nordic Sweden December PE - add-on

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Through Clairfield International, we have local partners in more than 20

countries around the world.

Together we are

stronger.

11

Nordhaven team

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