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Similar to Europe usa m&a, presentation to nordic v cs, may 11 2012
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Europe usa m&a, presentation to nordic v cs, may 11 2012
- 1. Presentation to Nordic Venture Capital Tour May 11, 2012
- 2. Technology Investment Banking At GrowthPoint Technology Partners, we’re invested in you. As former CEOs, executives, board members, investors and advisors, we know value when we see it. Our experience also gives us the perspective to look at every transaction from both sides of the term sheet. So our M&A, fundraising, and strategic advisory services all have just one goal in mind: Your success. London Palo Alto Tel Aviv 2
- 3. M&A and Advisory Experts for the Technology Industry Technology Advisory: ! M&A As former CEOs, executives, board members, ! Fundraising investors and advisors, we bring a wealth of strategic and financial experience to our clients ! Strategic advisory ! Software & Digital Media ! Information technology ! Mobile / App technologies ! Energy technologies 3
- 4. Recent Transactions Jan 2012 Nov 2011 Nov 2011 Nov 2011 Oct 2011 Aug 2011 Jul 2011 private private private selected assets placement acquired by placement placement acquired by acquired by acquired by Jul 2011 Jul 2011 Jun 2011 Jan 2011 Dec 2010 Nov 2010 Oct 2010 private acquired by placement acquired by acquired by acquired by acquired by acquired by Jun 2010 Mar 2010 Mar 2010 Dec 2009 Jan 2009 Oct 2008 Aug 2008 HyperSpace, HyperCore & Radar Networks acquired by acquired by acquired by acquired by acquired by Phoenix Flip assets acquired by acquired by Sensormati c a division of tyco Jul 2008 Mar 2008 Feb 2008 Aug 2007 July 2007 July 2007 April 2007 Investment by acquired by Sold Data Intel Capital, Converter acquired by acquired by Steelpoint Capital acquired by acquired by IP Business Unit Partners Ridgewood to Capital $22,000,0000 4
- 5. Selected Earlier Transactions Dec 2006 Oct 2006 Sept 2006 Jul 2006 Jun 2006 Dec 2005 Jul 2005 The power of embedded systems Private Placement Private Placement with Benchmark acquired by Investment by with DFJ acquired by acquired by Capital VantagePoint, acquired by E-‐Planet Tudor Draper Fisher Investment Corp. Baytech Venture Jurvetson, JP Morgan, £10,000,000 Capital Private Investors $10,000,000 $40,000,000 Jul 2005 Jun 2005 Apr 2005 Feb 2005 Jan 2005 Dec 2004 Dec 2004 acquired by acquired by acquired by merger with acquired by acquired by acquired by Dec 2004 Nov 2004 Nov 2004 Nov 2004 Oct 2004 Oct 2004 Oct 2004 Rhetorical Stream Systems, $9,200,000 Theory, Inc. Inc. Series B Has sold substanUally acquired by acquired by ConverUble all assets to acquired by acquired by acquired by Preferred Stock Sep 2004 Aug 2004 Aug 2004 Aug 2004 Aug 2004 Jul 2004 Jul 2004 Installshield So[ware has sold selected sold its voIP and has sold its NanoPro CorporaUon assets to sold its VPN Broadbend router assets Division to acquired by assets to to $29,800,000 acquired by Series C ConverUble Preferred Stock 5
- 6. GrowthPoint has done meaningful transactions with all the major acquirers Technical Established Knowledge Relationships Deal Personalized Execution Attention Experience 6
- 7. Top Tens: Revenues, Acquisitions, Multiples 7
- 8. Top Tech Acquirers – Multiples, # Deals, Market Capitalization 8
- 9. EU-US: Total # of M&A Transactions EU companies acquired by US buyer 968 7,417 5,548 EU companies US companies acquired by EU buyer acquired by US buyer 602 US companies acquired by EU buyer Technology M&A, 2007-2011, CapIQ, GrowthPoint 9
- 10. EU-US: Total Reported Transaction Value ($Billions USD) US acquisitions of EU companies $50bn $330bn $83bn EU acquisitions US acquisitions of of EU companies US companies $35bn EU acquisitions of US companies Technology M&A, 2007-2011, CapIQ, GrowthPoint 10
- 11. EU-US: Median Revenue Multiples in M&A Transactions Multiple paid by US buyer for EU companies 1.5X 1.7X 1.2X Multiple paid by EU Multiple paid by buyer for EU companies US buyer for US companies 2.0X Multiple paid by EU buyer for US companies Technology M&A, 2007-2011, CapIQ, GrowthPoint 11
- 12. Nordic Countries-US: Total # of M&A Transactions 105 Nordic companies acquired by US buyers 832 Nordic companies acquired by Nordic buyers 164 Nordic companies acquired by EU buyers Technology M&A, 2007-2011, CapIQ, GrowthPoint 12
- 13. Nordic Countries-US: Total Reported Transaction Value ($Billions USD) $6.5bn Nordic companies $6.2bn acquired by US buyers Nordic companies acquired by Nordic buyers $7.1bn Nordic companies acquired by EU buyers Technology M&A, 2007-2011, CapIQ, GrowthPoint 13
- 14. Cloud Computing Acquirer Landscape Software as a Service Infrastructure as a Service Storage as a Service DR as a Service File Sharing as a Service Platform as a Service Integration as a Service Cloud Management Cloud Services Security as a Service 14
- 15. Digital Media Acquirer Landscape Mobile and Media Devices Consumer Internet Web Communities & Social Networking Digital Media & Entertainment Content Programming & Publishing Content Management & Collaboration Content Delivery & Networking Solutions Operator Solutions / Infrastructure Telecommunications 15
- 16. Bay Area - Fully-developed ecosystem For startup formation, Technology growth, and Investment Banks exit Venture Debt Private Equity Firms Part-Time C-Level Service Providers Wealth Outsourced Management Operations & Services Firms Advisory Board Members Headhunters Patent Attorneys Public Relations Accountants Groups Corporate Attorneys Venture Capitalists Networking Events Xerox PARC Seminars Angel Investors Universities (Office of Technology & Licensing) Ideas Company Series “A” Growth Exit Formation Round 16
- 17. M&A for early stage tech companies is unique & differentiated ! Non-Tech Company Valuations: PV analysis of future cash flows Project Future Cash Flows Apply Multiple Discount To The Present Value Strategic Fit Growth ! Technology Companies: Story Geography Valuation derived from more complex Talent Viral distillation of many factors IP buzz / traction Synergies Positioning Multiples 17 Valuation
- 18. How long does M&A really take? It depends… 18
- 19. We guide you through the Acquisition Process Once the decision has been made to launch the process, anticipate a 6 to 9 month timetable Months 1-2 Months 2 to X Months X to X+2 Phase I Process Preparation Prospect Analysis Prepare Materials Phase II Contact Strategic Partners Refine Positioning Partner Analysis Site Visits/Follow-on Meetings Preliminary Due Diligence Phase III Negotiations Term Sheet Pre-Definitive Due Diligence Documentation/Definitive Agreement Closing GrowthPoint Driven Collaborative 19
- 20. Europe produces strong technology companies ! Strong technology orientation • Often understated in explaining the value of their technology when compared to US companies • This understatement gets worse as one travels north ! Excellent engineering teams • Generally more people and better experience when compared to US ! Often need support with trans-Atlantic marketing, relationship-building, and competitive positioning 20
- 21. A sampling of issues we often see in “westbound” cross border transactions ! Questions around internationalization • Proving that solution extends across borders, scalability / relevant accounts • Physical presence in the US ! Cultural Divides that can make relationship-building difficult • “Cowboy” mentality of US buyers can be off-putting to EU sellers ! Strengthened “marketing” orientation needed • Incorporate a balanced PR campaign as part of company strategy • Analyst awareness needs to be key component of getting “known” to the acquirers • Visibility at key partnering shows – ie. Oracle World, Dreamforce, etc. ! Balance sheet strength is key • Need enough runway to work an effective process ! Intellectual Property can be a prime driver behind transactions • There is a growing Importance of Patents & IP in technology M&A • Titans are paying more attention to IP: Motorola & Google, Apple & Samsung, Oracle & Google, FB & Yahoo. • Patents have become “a currency for technology…a bargaining chip in negotiations with venture capitalists…and potential buyers…they’re seen as value that can live beyond the life of an actual company.” Washington Post, May 4, 2012 21
- 22. Guidance at key decision points Capitalize on optimal timing and the value you have M&A Leverage partner’s created. Deliver a return to distribution and sales shareholders, eliminate risk channels, while creating Partner the foundation for future acquisitions Fundraise Raise capital and remain independent. Right for many, but this is dilutive and achieving scale can be risky GrowthPoint has the knowledge and experience to advise you at these critical junctures 22
- 23. Guidance at key Strategic inflection points along the company lifecycle Revenue Typically the best ROI Zone for tech companies that do not IPO Start-up Growth Maturation Decline Time ! Strategic positioning: to maximize shareholder value ! Optimal exit timing: high growth expectations & synergy with acquirers 23