1Q13 Mobile Software M&A Overview with Mobile Landscape

1Q13 Mobile Software M&A
Market Update
Brad Weekes
Vi P id tVice President
Software Equity Group, LLC
© Software Equity Group, LLC 2013
858 509-2800
www.softwareequity.com

Disclaimer
The information contained in this Report is obtained from
sources we believe to be reliable, but no representation or, p
guarantee is made about the accuracy or completeness of such
information, or the opinions expressed herein. Nothing in this
R t i i t d d t b d ti f ifi itReport is intended to be a recommendation of a specific security
or company or intended to constitute an offer to buy or sell, or
the solicitation of an offer to buy or sell, any security. Softwarey , y y
Equity Group LLC may have an interest in one or more of the
securities or companies discussed herein. Financial data
id d b C it l IQprovided by Capital IQ.
This Report may not be reproduced in whole or in part withoutp y p p
the expressed prior written authorization of Software Equity
Group, L.L.C.

Mobile Landscape
Marketing & AdvertisingMarketing & Advertising Commerce & PaymentsCommerce & Payments Content & EntertainmentContent & Entertainment Carriers
Social & MessagingSocial & Messaging EnterpriseEnterprise HealthHealth Devices
InfrastructureInfrastructure
Development
Platforms
Security Optimization LBS Analytics
* Some of the companies in the landscape above have been acquired but the seller logos were retained since the brand is better recognized as mobile first

Software M&A Overview
Traditional on premise and Internet M&A represent the ast majorit ( 70%) of o erall soft are• Traditional on-premise and Internet M&A represent the vast majority (~70%) of overall software
M&A transactions
• However, on-premise and Internet M&A transactions have been in decline over the past year while
Mobile and SaaS M&A is growing rapidly
• As a % of total software M&A transactions, SaaS and Mobile M&A account for approximately 15%
each
• In 1Q13, mobile software M&A had its biggest quarter on record (87 transactions), while SaaS M&A
volume ticked down slightly. 2013’s projected mobile software M&A transactions will likely exceedg y p j y
the number of SaaS transactions for the year
On‐premise SaaS Internet Mobile
Software Industry M&A by SectorSoftware Industry M&A by Sector Mobile & SaaS as a % of Total Software M&AMobile & SaaS as a % of Total Software M&A
300
350
400
450
sactions
12 0%
14.0%
16.0%
18.0%
e Deals
Mobile SaaS
50
100
150
200
250
# of M&A Trans
4.0%
6.0%
8.0%
10.0%
12.0%
% of Total Software
0
50
0.0%
2.0%
%

Mobile Software M&A Volume
“Mobile first” dri ing man b ers to shift foc s from SaaS to mobile• “Mobile first” driving many buyers to shift focus from SaaS to mobile
• Many buyers are still seeking basic mobile competency to help navigate the challenging mobile
development and distribution ecosystem
• The diversity of mobile buyers is astounding, coming from a number of different focus areas within
traditional technology providers as well as those without a technology portfolio entering into the
mobile arena
• FY 2013 M&A volume is on pace to reach 348 transactions, a marked increase over 2012’s 235
transactions
M&A Volume by YearM&A Volume by Year M&A Volume by QuarterM&A Volume by Quarter
• Mobile software M&A now accounts for 15.9% of all software M&A transactions, up from only 3.7%
in 1Q10
M&A Volume by YearM&A Volume by Year M&A Volume by QuarterM&A Volume by Quarter
300
350
400
s
90
100
2010 2011 2012 2013
150
200
250
300
M&A Transactions
40
50
60
70
80
&A Transactions
0
50
100
2010 2011 2012 2013 (F)
# of
0
10
20
30
40
Q1 Q2 Q3 Q4
# of M&
2010 2011 2012 2013 (F) Q1 Q2 Q3 Q4

Mobile Software M&A Exit Multiples
E it m ltiples and deal str ct res (more on the latter in s bseq ent slides) for mobile soft are• Exit multiples and deal structures (more on the latter in subsequent slides) for mobile software
companies are wide ranging, as evidenced by the difference between the average and median
EV/Revenue exit multiples (4.0x vs. 2.7x in 2012)
• The lower median can be attributed to the large number of small, private mobile software
companies lured to the opportunity in the mobile space but struggling to gain adoption and
ultimately forced to exit the business at sub optimal exit multiples
• Mobile software leaders are getting significant premiums in the market as demonstrated by the 5.0x
median EV/Revenue exit multiple achieved in transactions over $100Mp $
• Given the allure and need for mobile competency, even if unproven in the market, a select few, less
established mobile software providers can garner attractive multiples as well, as demonstrated by
the average EV/Revenue exit multiple of 5.7x for deals under $10M in size (median is 1.4x)
EV/Revenue Exit Multiples by SizeEV/Revenue Exit Multiples by SizeEV/Revenue Exit MultiplesEV/Revenue Exit Multiples
5 0x
Median Average
Median Average
3.0x
3.5x
4.0x
4.5x
5.0x
e Multiple
4.0X
5.0X
6.0X
7.0X
ue Multiple
0.5x
1.0x
1.5x
2.0x
2.5x
EV/Revenue
0.0X
1.0X
2.0X
3.0X
EV <= $10 EV > $10 EV > $20 EV > $50 EV > $100
EV/Reven
0.0x
2011 2012
&
EV <= $20
&
EV <= $50
&
EV <= $100
Enterprise Value Range ($ millions)

Mobile Software M&A by Product Category
• Over the past two years, the three most active mobile software M&A categories have been Marketing & Advertising,Over the past two years, the three most active mobile software M&A categories have been Marketing & Advertising,
Infrastructure, and Content & Entertainment
• Marketing & Advertising M&A is currently driven by the unique targeting approaches afforded by mobile which is
distinct from other channels. The market segment is heavily fragmented with a large number of companies offering
new and innovative approaches and formats effectively reach and convert consumers
• Infrastructure M&A is currently driven by buyers seeking innovative solutions to help mobile operators deal with the
exponential increase in data through compression, offload and QoS solutions
• Content & Entertainment M&A is largely driven by Gaming content. Gaming is hit or miss, but if it’s a hit, gaming
offers the best monetization opportunities for mobile consumer applications
M bil t i M&A h l d d i 2012 F TEM MDM/MAM MDAP b iti i th l• Mobile enterprise M&A has exploded in 2012. From TEM, MDM/MAM, MDAP, buyers are positioning themselves as
enterprises struggle with the BYOD phenomenon and potential for mobile apps/web to accelerate their business.
• Although it accounted for only 9% of total mobile M&A deals in 2012, we expect Social & Messaging deals to ramp
considerably in 2013 as OTT messaging is positioned for huge growth
2012 Mobile Software M&A By Product Category2012 Mobile Software M&A By Product Category2011 Mobile Software M&A By Product Category2011 Mobile Software M&A By Product Category
31%
7%
5%
10%Marketing & Advertising
Content & Entertainment
Infrastructure
22%
8%
2%
9% Marketing & Advertising
Infrastructure
Content & Entertainment
15%
8%
Infrastructure
Commerce & Payments
Enterprise
Social & Messaging
Oth
22%
14%
9% Enterprise
Social & Messaging
Commerce & Payments
Health
24%Other
16% Other

Select Active Mobile Software Buyers
Buyer Targets

Select Active Mobile Software Buyers
Buyer Targets
TEM Business

D t
Top 10 Mobile Software M&A Transactions by Enterprise Value (EV)
StockBuyer TargetDate EV EV/Rev Cash Earnout
5/17/2007 $5,746 11.6x $5,746 - -
5/12/2010 $5,423 4.5x $5,423 - -
10/13/2009 $2,420 7.9x $2,420 - -
2/04/2013 $1,645 6.0x $1,645 - -
7/12/2011 $1,301 7.5x $651 $100 $550
6/14/2011 $1,150 1.5x $1,150 - -$ , $ ,
11/14/2011 $1,050 5.5x $1,050 - -
4/09/2012 $1,000 - $300 $700 -
6/24/2008 $790 - $790 - -
12/08/2005 $705 10.7x $705 - --

D t
Top 10 Mobile Software M&A Transactions by EV/Revenue Multiple
StockBuyer TargetDate EV EV/Rev Cash Earnout
9/20/2010
$42 66.9x $0.5 $16.5 $25
2/15/2013 $147 35.0x $76 $71 -
10/13/2010 $70 25.0x $70 - -
1/31/2012 $70 20.0x $70 - -
11/09/2009 $674 15.0x - $674 -
5/17/2007 $5,746 11.7x $5,746 - -
1/31/2011 $150 11.2x $100 - $50
12/08/2005 $705 10.7x $705 - -
6/07/2012 $435 10.0x $435 - -
3/26/2012 $144 10.0x - $144 -

Select Mobile Software M&A Transactions and Deal Structures
D t StockBuyer TargetDate EV EV/Rev Cash Earnout
8/8/2012 $44.0 $29.2 $14.8
3/26/2012 $174.4 10.0x $174.4
2/16/2012 $50.0 $18.0 $32.02/16/2012 $50.0 $18.0 $32.0
2/16/2012 $14.5 $8.0 $6.5
1/3/2012 $45.1 2.7x $45.1
11/15/2011 $59.0 3.0x $20.0 $5.0 $34.0
10/10/2011 $90.0 4.5x $60.0 $30.0
8/4/2011 $60.0 6.7x $4.0 $38.5 $27.5
3/18/2011 $150.0 11.4x $100.0 $50.0

Mobile Software M&A Deals – 1Q13
Date Target Buyer EV EV/Revenue EV/EBITDAg y
03/28/2013 CheckMate Room 77, Inc. - - -
03/25/2013 Summly Limited Yahoo! Inc. (NasdaqGS:YHOO) $30 - -
03/25/2013 Maporama Solutions SAS TIBCO International Holdings, B.V. - - -
03/24/2013 Wifislam, Inc. Apple Inc. (NasdaqGS:AAPL) - - -
03/21/2013 PlaySay, Inc. Lesson Nine GmbH - - -
03/20/2013 Micro Librarian Systems Ltd. Capita plc (LSE:CPI) - - -
03/20/2013 Socialize, Inc. ShareThis, Inc. - - -
03/20/2013 Livestar Pinterest - - -
03/19/2013 Open Mile, Inc. Echo Global Logistics, Inc. (NasdaqGS:ECHO) - - -
03/19/2013 Datria Systems, Inc. Knighted, Inc. - - -
03/18/2013 MetroFax, Inc. j2 Global, Inc. (NasdaqGS:JCOM) - - -
03/18/2013 mBlox, Inc., Premium SMS Business OpenMarket Inc. - - -
03/18/2013 Mobile Marketing NL Adformatie Groep03/18/2013 Mobile Marketing NL Adformatie Groep - - -
03/18/2013 Zynk Gestão de Conteúdo Ltda. A Zenvia - - -
03/15/2013 Orchestra, Inc. Dropbox, Inc. $100 - -
03/15/2013 Adexcite, LLC Q1Media - - -
03/14/2013 Clk2c.com ValueFirst Messaging Pvt. Ltd. - - -
03/14/2013 Hot Studio Inc. Facebook, Inc. (NasdaqGS:FB) - - -
03/13/2013 Duff Research, LLC PayPal, Inc. - - -, y ,
03/12/2013 LIQUID Barcodes AS Telenor ASA (OB:TEL) - - -
03/12/2013 Telenav, Inc., Enterprise Business Unit Fleetcor Technologies Operating Company, Llc $10 - -
03/12/2013 Cellbroker Solutiontech - Consultoria e Projetos em Informática Ltda. $1 1.4x -
03/11/2013 conTgo limited Concur Technologies, Inc. (NasdaqGS:CNQR) - - -
03/11/2013 Nellymoser, Inc. Brow n Printing Company - - -
03/08/2013 Arieso Ltd. JDS Uniphase Corporation (NasdaqGS:JDSU) $85 - -
03/08/2013 Chaotic Moon, L.P. Silver Lake; William Morris Endeavor Entertainment, LLC - - -
03/07/2013 Motopia Limited (ASX:MOT) Priority Processing Systems Pty Ltd - - -
03/07/2013 MeNetw ork, Inc. Spindle, Inc. (OTCPK:SPDL) $11 - -
03/06/2013 Bemoko Ltd. SDL plc (LSE:SDL) $3 - -
03/06/2013 Ubiquity Corporation Ubiquity Broadcasting Corporation (OTCBB:UBIQ) - - -
03/05/2013 Dephasium Corp. (OTCPK:DPHS) Dephasium Ltd. - - -
03/05/2013 Tw istage Inc Perceptive Softw are Inc03/05/2013 Tw istage, Inc. Perceptive Softw are, Inc. - - -
03/03/2013 Kids Games Club Ltd. TabTale Ltd. $4 - -
02/28/2013 Sw ipe & Tap Limited Apposing Limited - - -

Mobile Software M&A Deals – 1Q13 (con’t)
Date Target Buyer EV EV/Revenue EV/EBITDAg y
02/27/2013 Strike Media Proprietary Limited Ogilvy South Africa (Proprietary) Limited - - -
02/26/2013 lonelybrand, LLC HY Connect Inc. - - -
02/22/2013 Sazneo Limited Access UK Limited - - -
02/21/2013 N4 Systems Incorporated Master Lock Canada Inc. - - -
02/20/2013 Tigga Studios LLC Hanover Portfolio Acquisitions, Inc. (OTCBB:HVPA) - - -
02/20/2013 FlyCast Inc., HTML5 Development Tools Division Intel Corporation (NasdaqGS:INTC) - - -
02/19/2013 SNRLabs, Inc. SEVEN Netw orks, Inc. - - -
02/14/2013 Skyfire Labs, Inc. Opera Softw are ASA (OB:OPERA) $147 35.9x -
02/12/2013 Propeld, Inc. Yahoo! Inc. (NasdaqGS:YHOO) - - -
02/11/2013 M.dot, Inc. The Go Daddy Group, Inc. - - -
02/05/2013 Show Uhow , Inc. SellPoint, Inc. - - -
02/04/2013 Acme Packet, Inc. Oracle Corporation (NasdaqGS:ORCL) $1,646 6.0x 181.4x
02/03/2013 Riptide Games Inc Mercury Active Inc02/03/2013 Riptide Games, Inc. Mercury Active Inc. - - -
02/01/2013 GoMiso, Inc. Dijit Media Inc. - - -
01/31/2013 mFoundry, Inc. Fidelity National Information Services, Inc. (NYSE:FIS) $154 - -
01/31/2013 Shift Global Inc. Engauge Communication, Inc. - - -
01/29/2013 Foodspotting Inc. OpenTable, Inc. (NasdaqGS:OPEN) $10 - -
01/28/2013 Crashlytics Inc. Tw itter, Inc. - - -
01/25/2013 Mobvalue Prisma Média - - -
01/25/2013 Mobspire Inc. Aarki, Inc. - - -
01/24/2013 IVONA Softw are Sp. z o.o. Amazon.com Inc. (NasdaqGS:AMZN) - - -
01/24/2013 NextBus Inc. Cubic Transportation Systems, Inc. $21 - -
01/23/2013 Intucell Ltd. Cisco Systems, Inc. (NasdaqGS:CSCO) $475 - -
01/23/2013 IBEE Softw are Solutions Pvt. Ltd. XBT Holding LTD. - - -
01/23/2013 Eat it Now Group Limited hungryhouse.com limited - - -
/ / C01/22/2013 Lascaux Co., Inc. Etsy, Inc. - - -
01/19/2013 Pushpins, Inc. Performance Marketing Brands, Inc. - - -
01/17/2013 Energy Today Inc. (OTCPK:NRGT) QED Connect, Inc. (OTCPK:QEDN) $0 0.4x 11.1x
01/17/2013 Mynet Japan Inc., CRM Business for Mobile Devices Yahoo Japan Corporation (TSE:4689) $4 - -
01/16/2013 Mozes, Inc. ePrize, Inc. - - -
01/15/2013 Exploding Barrel Games Inc. Kabam, Inc. - - -
01/15/2013 RedMas LLC AdsMovil LLC - - -01/15/2013 RedMas LLC AdsMovil LLC
01/11/2013 Ansible Technologies, Inc. Groupon, Inc. (NasdaqGS:GRPN) - - -
01/10/2013 Retail Anyw here Inc. NetSuite Inc. (NYSE:N) - - -
01/10/2013 Anpulo Food Development, Inc. - $0 - -

Mobile Software M&A Deals – 1Q13 (con’t)
Date Target Buyer EV EV/Revenue EV/EBITDAate a get uye / e e ue /
01/10/2013 12snap AG plan.net Gruppe für digitale Kommunikation GmbH & Co.
KG
- - -
01/09/2013 Tresys Technology LLC Behrman Capital - - -
01/09/2013 Active Life App, LLC DAXKO, Inc. - - -
01/08/2013 Overlay Media Limited InMobi - - -
01/08/2013 Fanminder, Inc. Total Merchant Services, Inc. - - -
01/07/2013 Epocrates, Inc. athenahealth, Inc. (NasdaqGS:ATHN) $216 2.0x 38.2x
01/07/2013 Name.com LLC Demand Media, Inc. (NYSE:DMD) - - -
01/07/2013 4ORCEDigital Manifest Digital, Inc. - - -
01/07/2013 McMurry, Inc. McMurry/TMG, LLC - - -
01/07/2013 mobcast ec inc. mobcast inc. (TSE:3664) $7 - -
01/03/2013 ALK Technologies, Inc. Trimble Navigation Limited (NasdaqGS:TRMB) - - -
01/03/2013 PLAY Communication Pty Ltd Group M Worldw ide Inc01/03/2013 PLAY Communication Pty Ltd Group M Worldw ide, Inc. - - -
01/03/2013 Commodity Update, LLC Farm Journal, Inc. - - -
01/02/2013 Crossbridge Solutions Inc. Telit Communications PLC (AIM:TCM) - - -
01/02/2013 UAB Mokus Byggleverandorene AS - - -
01/02/2013 Globant, Inc. WPPplc (LSE:WPP) $350 - -
01/02/2013 TapIt! Media Group, Inc. Phunw are, Inc. $23 - -
01/02/2013 Sports Asylum, Inc. SearchCore, Inc. (OTCPK:SRER) $1 - -p y , , ( ) $

B i f S f E iBrief Software Equity
Group Overviewp

• Industry leading boutique investment bank, founded in
Leaders in Software M&A
1992, representing public and private software and
internet companies seeking:
• Strategic exit
• Growth capital
We Do Deals.
G o t cap ta
• Buyout
• Inorganic growth via acquisition
• Buy and sell-side mentoring
• Fairness opinions and valuations• Fairness opinions and valuations
• Sell-side client revenue range: $5 - 75 million
• Clients span virtually every technology, product
category, delivery model and vertical market
• Global presence providing advice and guidance to morep p g g
than 2,000 private and public companies throughout
US, Canada, Europe, Asia-Pacific, Africa and Israel
• Strong cross-functional team leveraging transactionStrong cross functional team leveraging transaction,
operating, legal and engineering experience
• Unparalleled software industry reputation and track
record
record.
• Highly referenceable base of past clients

Extensive Global Reach
Current Sell-side Representation
• SEG currently represents software companies in the
United States, Canada, France, Germany, Australia &
Saudi Arabia
Recent Sell-side Representation
Saudi Arabia
• In addition to the countries listed above, SEG has
recently represented software companies in the United
Kingdom, France, Netherlands, Israel, and South Africa
SEG Research Distribution
• SEG’s Quarterly and Annual Software Industry Equity
Reports and Monthly Flash Reports are distributed to
i li f 50 000 bli f CEOan opt-in list of 50,000 public software company CEOs,
software entrepreneurs, private equity managing
directors, VCs, high tech corporate lawyers, public
accountants, etc. in 76 countries.

A little about me…
Over 15 years of operational and investment bankingOver 15 years of operational and investment banking
experience in mobile, wireless and software sectors
Nearly 10 years of operational experience in mobiley y p p
specifically, working closely with a number of vendors in
the space
Product lead for award winning mobile music serviceProduct lead for award winning mobile music service
Strategic consultant for mobile browser and widget
runtime providerp
MBA, UCLA Anderson School of Management
M. Eng, Electrical Engineering, UCSD
B S Computer Engineering UCSDB.S., Computer Engineering, UCSD

To discuss the mobile ecosystem, M&A transactions
and/or your mobile business, please contact me at:and/or your mobile business, please contact me at:
P: 858.509.2800
C: 858.945.3032C: 858.945.3032
Email: bweekes@softwareequity.com
http://www.linkedin.com/in/bradweekeshttp://www.linkedin.com/in/bradweekes
Twitter: @bradweekes

1Q13 Mobile Software M&A Overview with Mobile Landscape

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