The Software Industry Financial Report

Transcription

1 The Software Industry Financial Report Software Equity Group, L.L.C El Camino Real Suite 320 San Diego, CA (858)

2

3 Software Equity Group, L.L.C. Q Software Industry Financial Report Contents U.S. ECONOMY: SOFTWARE INDUSTRY MACROECONOMICS... 2 IT SPENDING... 2 INTERNET RETAIL SPENDING AND ADVERTISING... 3 UPDATED SEG INDICES... 3 PUBLIC SOFTWARE/SAAS/INTERNET COMPANY STOCK PERFORMANCE... 3 PUBLIC SOFTWARE COMPANY FINANCIAL PERFORMANCE... 4 PUBLIC SOFTWARE COMPANY MARKET VALUATIONS... 5 PUBLIC SOFTWARE COMPANY FINANCIAL PERFORMANCE: BY PRODUCT CATEGORY... 6 PUBLIC SOFTWARE COMPANY MARKET VALUATIONS: BY PRODUCT CATEGORY... 7 PUBLIC SOFTWARE AS A SERVICE (SAAS) FINANCIAL PERFORMANCE... 8 PUBLIC SOFTWARE AS A SERVICE (SAAS) COMPANY MARKET VALUATIONS... 9 PUBLIC SOFTWARE AS A SERVICE (SAAS) FINANCIAL PERFORMANCE: BY PRODUCT CATEGORY PUBLIC SOFTWARE AS A SERVICE (SAAS) COMPANY MARKET VALUATIONS: BY PRODUCT CATEGORY PUBLIC INTERNET COMPANY FINANCIAL PERFORMANCE PUBLIC INTERNET COMPANY MARKET VALUATIONS PUBLIC INTERNET COMPANY FINANCIAL PERFORMANCE: BY PRODUCT CATEGORY PUBLIC INTERNET COMPANY MARKET VALUATIONS: BY PRODUCT CATEGORY INITIAL PUBLIC OFFERINGS SOFTWARE/SAAS M&A DEAL VOLUME AND SPENDING IMPORTANT CHANGE IN SOFTWARE AND SAAS M&A DATA ACCOUNTING SOFTWARE M&A VALUATIONS SOFTWARE M&A VALUATIONS BY EQUITY STRUCTURE SOFTWARE M&A VALUATIONS BY SIZE SOFTWARE M&A BY VERTICAL AND HORIZONTAL MARKETS M&A VALUATIONS BY SOFTWARE PRODUCT CATEGORY SOFTWARE AS A SERVICE (SAAS) M&A DEAL VOLUME AND VALUATIONS INTERNET M&A DEAL VOLUME AND VALUATIONS This Report may not be reproduced in whole or in part without the expressed prior written authorization of Software Equity Group, L.L.C. Software Equity Group registers each Report with the U.S. Copyright Office and vigorously enforces its intellectual property rights. Copyright 2012 Software Equity Group, L.L.C., All Rights Reserved

4 Software Equity Group, L.L.C. APPENDIX A: 1Q12 PUBLIC SOFTWARE MARKET VALUATIONS AND STATISTICS BY PRODUCT CATEGORY APPENDIX B: 1Q12 PUBLIC SAAS MARKET VALUATIONS AND STATISTICS BY PRODUCT CATEGORY 26 APPENDIX C: 1Q12 PUBLIC INTERNET MARKET VALUATIONS AND STATISTICS BY PRODUCT CATEGORY APPENDIX D: 1Q12 MERGERS AND ACQUISITIONS, SELECT PUBLIC SELLER VALUATIONS APPENDIX E: 1Q12 MERGERS AND ACQUISITIONS, MOST ACTIVE BUYERS APPENDIX F: 1Q12 MERGERS AND ACQUISITIONS, SELECT SOFTWARE INDUSTRY MEGA-DEALS APPENDIX G: 1Q12 MERGERS AND ACQUISITIONS, SELECT SOFTWARE-AS-A-SERVICE SELLERS This Report may not be reproduced in whole or in part without the expressed prior written authorization of Software Equity Group, L.L.C. Software Equity Group registers each Report with the U.S. Copyright Office and vigorously enforces its intellectual property rights. Copyright 2012 Software Equity Group, L.L.C., All Rights Reserved

5 Software Equity Group, L.L.C. Investment Banking / Mergers & Acquisitions Figure 26: U.S. Software Mergers & Acquisition Activity Number of Deals $ $ $ $17.9 $ $12.7 $ $ $ $17.7 $25 $20 $15 $10 Value (BIllions) 100 $2.9 $3.3 $4.6 $ Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 $0 Deals Value SOFTWARE/SAAS M&A DEAL VOLUME AND SPENDING As we went to press, there were 401 software industry M&A transactions reported in the first quarter (Figure 26). We expect the final tally for Q1 to reach 420, since M&A data for the quarter is often revised and released well into the following quarter. Indeed, the updated tally for 4Q11 is 440 software/saas transactions, significantly greater than the 400 deals referenced in our last report. If our projection holds true, 1Q12 deal volume will be in line with 4Q12 s 440 deals and 1Q11 s 426 deals. The quarterly software/saas M&A tally has now exceeded the historically healthy benchmark of 400 for seven straight quarters. A total of $17.7 billion was spent in Q1 on those software/saas transactions with announced price tags, 49% higher than 4Q11 s $11.9 billion, and the third highest quarterly software M&A spend since 1Q09. Software and SaaS mega deals are in large part responsible, as nearly 60% of the aggregate M&A price tag in 1Q12 came from transactions greater than $500 million. Software/SaaS mega deals in the first quarter included Cisco s acquisition of NDS Group ($4.9 billion EV, 5.0x TTM Revenue); Vista Equity Partners acquisition of Misys ($2.0 billion EV, 3.2x TTM Revenue); Insight Venture Partners acquisition of Quest Software ($1.9 billion EV, 2.3x TTM Revenue); and Oracle Corporation s acquisition of Taleo Corp ($1.8 billion EV, 5.7x TTM Revenue). It is noteworthy that two of the four mega-deals for the quarter involved private equity firms, reflecting the large cash stockpile many private equity firms currently have at their disposal. Also noteworthy, 1Q12 marks the second consecutive quarter in which the list of mega-deals included a SaaS target, further evidence that SaaS market adoption is growing and more SaaS providers are achieving critical mass to attract the largest public software companies. Since aggregate M&A spending fluctuates widely each quarter, we rely upon TTM data to provide a more reliable measure of M&A spending trends. And on a TTM basis, the steady increase in total M&A dollars paid is encouraging. 15 2Q11 SOFTWARE INDUSTRY EQUITY REPORT

6 To download the remaining portions of Software Equity Group s complimentary quarterly Software Industry Equity Report, please visit our website: