scm & logistics technology m&a

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Nat Burgess

Nat joined Corum in 1996 and brings a diverse background in technology M&A and law. While with the Enforcement Division of the U.S. Securities and Exchange Commission, Nat helped identify and build cases against securities fraud schemes. With the Strategic Development Division of Morgan Stanley's M&A group, Nat worked on cross-border acquisitions of U.S. and European companies by Japanese firms, and on financings by large Japanese public companies. Nat moved to Morgan Stanley's Tokyo office, where he reported directly to the President of Morgan Stanley, Japan Ltd. and focused exclusively on cross-border M&A.

After Morgan Stanley, Nat co-founded Postcard Software, a creator of advertiser-driven bilingual (English and Japanese) Internet content. At Activision, Nat led the company's on-line business development.

Nat earned an undergraduate degree in Japanese literature from Yale College and a law degree from UCLA. While in law school, Nat wrote articles for the International Forum at Yale, Tokyo Journal.

President

Agenda• Introduction• SCM & Logistics Technology M&A Report• Buyer Interviews

• Matt Grabow, Director, Corporate Development M&A – Infor• Ed Gardner, EVP, Corporate Development – Descartes

• Q&A

Yasmin Khodamoradi

Yasmin joined Corum Group in 2015 as a research analyst. Previously she worked as a finance and operations coordinator at a financial technology startup and provided writing services to an institutional investment advisory firm.

Yasmin graduated from the Foster School of Business at the University of Washington, specializing in Finance and International Business.

Research Analyst

SCM Public Company Multiples

6.00 x

8.00 x

10.00 x

12.00 x

14.00 x

16.00 x

18.00 x

20.00 x

22.00 x

24.00 x

26.00 x

1.50 x

2.50 x

3.50 x

4.50 x

5.50 x

6.50 x

7.50 x

8.50 x

EV/EBITDA EV/S

Source: Capital IQ

SCM M&A Activity (2012-2015)

H1 H2 H1 H2 H1 H2 H12012 2012 2013 2013 2014 2014 2015

0

1

2

3

4

5

6

7

0

5

10

15

20

25

30

35

40

Total Disclosed Deal Value ($B) Total Deal Count

Source: Capital IQ & 451 Research

Geographic Distribution of Sellers

2014

EuropeUnited States and CanadaAfrica / Middle EastAsia / PacificLatin America and Caribbean

2015

EuropeUnited States and CanadaAfrica / Middle EastAsia / PacificLatin America and Caribbean


Number of Deals by Transaction Size

<$10M $10-50M $50-100M $100-500M $500M-$1B $1B+0

2

4

6

8

10

12

14

2012 2013 2014 2015 (thru. Q3)Source: Capital IQ & 451 Research

Top Buyers by Deal Value (2015 Q1-Q3)

Mill

ions


Infor Pitney Bowes Insight Venture Partners Stamps.com0

100

200

300

400

500

600

700

800

Sold to

Target: GT Nexus [USA]Acquirer: Infor [USA]Transaction value: $675M

‒ Cloud-based supply chain management software for manufacturers and retailers

‒ Accelerates Infor’s shift to the cloud and helps strengthen their position as the retail industry moves toward contract-based manufacturing

Sold to

Target: Borderfree [USA]Acquirer: Pitney Bowes Inc. [USA]Transaction value: $448M

‒ Cross-border e-commerce platform

‒ Complements and expands Pitney Bowe’s existing e-commerce capabilities and helps reduce complexity of cross-border ecommerce

Descartes Systems Group Trimble Navigation Perfect Commerce Accenture0

2

4

6

8

10

12

Top Buyers by Deal Count(2012-2015 YTD)


Sold to

Target: BearWare [USA]Acquirer: Descartes [Canada]Transaction value: $11.2M

‒ Mobile tracking system to enable better collaboration between retailers and logistics service providers

‒ Complements Descartes’ Airclic product, a cloud-based mobile automation solution


Sold to

Target: Trimble [USA]Acquirer: Fifth Element Oy [Finland]

‒ Forestry and transportation logistics SaaS

‒ Enhances capabilities of Trimble’s Connected Forest and expands forestry presence in Northern Europe.


Sold to

Target: HubWoo [France]Acquirer: Perfect Commerce [USA]Transaction value: $30M

‒ E-procurement and SCM SaaS

‒ Extends suite of procurement and sourcing solutions in new vertical and geographic markets


Sold to

Target: Accenture [USA]Acquirer: Gapso [Brazil]

‒ Brazilian SCM analytics software

‒ Extends the reach of Accenture Analytics in the Brazilian natural resources and agribusiness sectors


Sold to

Target: SeeControl [USA]Acquirer: Autodesk [USA]‒ Enterprise Internet of Things platform

‒ Should enhance capabilities of Autodesk PLM360 suite

Sold to

Target: TierConnect [USA]Acquirer: Mojix Inc. [USA]‒ SCM RFID tracking systems

‒ Adds expertise in big data and bridges gap between its RFID platform and IoT


SCM M&A Revenue Multiples

<2.5 x 2.5-4 x >4 x0

2

4

6

8

10

12

EV/S Multiples

Freq

uenc

y

Commodity

Commercial Execution

Breakout

Commodity: • Niche & Regional Players• Generally less than $10M in TTM revenue

Commercial Execution: • Purchased for scale• SaaS income, highly recurring revenues• Generally $20-100M TTM revenue

Breakout: • No disclosed transactions in this range since 2013• SAP/Ariba megadeal falls into this category


Matt Grabow

Matt Grabow leads the M&A group at Infor, including transaction execution and integration of acquired assets. Matt joined Infor in 2008, and previously as an M&A and research associate at Piper Jaffray. He holds an MBA from the University of St. Thomas, and a degree in Economics from Gustavus Adolphus.

DirectorCorporate Development M&A

Infor – HistorySmall-time ERP grows out of the four walls of manufacting and moves into retail with the assistance of acquisitions like Lawson and GT Nexus.

Infor – Representative Deals 2002-2015GT Nexus Inc. Single Source Systems SSA Global

Technologies, Inc.MAPICS, Inc.

Saleslogix assets ENXSuite (product line) Systems Union Group plc

Mercia Software

GRASP Systems International, Inc.

Approva Corporation IBS Espana S.L. Lilly Software Associates

PeopleAnswers, Inc. Lawson Software, Inc. IBS Danmark A/S IncoDev Software-Entwicklung GmbH

TDCI Ltd. Qurius NV IBS France Aperum

CERTPOINT Systems Inc.

Bridgelogix Datastream Systems Inc.

NxTrend Technology, Inc.

Orbis Global SoftBrands, Inc. Geac Computer Corporation Ltd

Varial Software GmbH

Group Laurier ShipLogix, Inc. Alpine Systems daly.commerce

Easy RMS Hansen Information Technologies

Formation Systems Infor Business Solutions AG

RSVP Business Systems Quality Control Solution

Workbrain Corporation Hallco 1390 Ltd. Future Three Software, Inc.

Local.ly Extensity Inc. Intuita Holdings Ltd. Brain AG, Substantially All Assets

Infor – M&A Strategy• Gaps in product offerings• Deeper into verticals• Expand horizontal offerings

Infor – View of the Market• Mature market consolidation

• SCM is the first of the edge apps (gives way to HCM and CRM)

• Innovative companies in this space still exist

Infor – M&A desirables• Product fit? Filling a gap?• Different? Need it to keep up with competing

products?

Infor – M&A Red Flags• Old technology/architecture• Bypass “nice to have” opportunities to focus on

deals that give existing customers value

Ed Gardner

Ed Gardner is the Executive Vice president of Corporate Development at Descartes Systems Group, Inc. He joined Descartes in 2003 where he first held a number of senior roles within our corporate finance organization. In his current role as Executive Vice President, Corporate Development, Mr. Gardner is responsible for the development and execution of our M&A strategy. Mr. Gardner's previous experience includes both practical logistics experience where he worked in a senior leadership position at a third party logistics provider (3PL) as well as deal execution and integration experience as part of Ernst & Young's Transaction Advisory Services practice in London, England.

Executive Vice PresidentCorporate Development

Descartes – What do we do?Global Logistics Network• 200,000 trading partners• lots of documents, people, processes, assets,

parties, countries, etc involved in shipment• Connect Automate Value Added Applications

Descartes – SCM & Logistics Deals 2012-2015• Bearwear• MK Data Services LLC• Pentant Limited• e-customs Inc.• Airclic• CUSTOMS Info• Computer Management USA• Impatex Freight Software Ltd• KSD Software Norway AS• Integrated Export Systems• Infodis B.V.

Descartes - M&A key driving factors• Omni Channel retail influence on customer

expectations• The “Amazon effect”

• Mobility• Collecting real-time data for use in the field as well as to

communicate with customers

• Last mile and customer experience

Descartes - M&A key driving factorsTrade Data Content to differentiate “the network”Examples:Customs infoMK Data

Descartes - M&A Red Flags• Adjusted EBITDA and cashflow ratio with high

fluctuation• Descartes is proud of its slow and steady 15%/year

growth

• Skewed EBITDA

Descartes - M&A Financial Metrics• Recurring revenue trends• EBITDA Margin• Combined company revenue• Making Money Day 1• Financial, strategic and cultural fit

Descartes – M&A desirables• Network and connections

• New community?• Vertical reach?• Functionality?• Geographic

• Cross-border activity will continue

Nat Burgess

Nat joined Corum in 1996 and brings a diverse background in technology M&A and law. While with the Enforcement Division of the U.S. Securities and Exchange Commission, Nat helped identify and build cases against securities fraud schemes. With the Strategic Development Division of Morgan Stanley's M&A group, Nat worked on cross-border acquisitions of U.S. and European companies by Japanese firms, and on financings by large Japanese public companies. Nat moved to Morgan Stanley's Tokyo office, where he reported directly to the President of Morgan Stanley, Japan Ltd. and focused exclusively on cross-border M&A.

After Morgan Stanley, Nat co-founded Postcard Software, a creator of advertiser-driven bilingual (English and Japanese) Internet content. At Activision, Nat led the company's on-line business development.

Nat earned an undergraduate degree in Japanese literature from Yale College and a law degree from UCLA. While in law school, Nat wrote articles for the International Forum at Yale, Tokyo Journal.

President

Attributes of a Valuable SCM Acquisition

1. Build to Scale2. Focus on Recurring Revenue3. Build for Profitability4. Be Different5. Global Exchange of Data

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