Bruce Milne, CEO of Corum Group Ltd., welcomed attendees to a presentation on technology mergers and acquisitions. The presentation included a report on M&A activity in September 2016 which found increased deals from non-tech buyers. It also outlined 12 steps to a successful company valuation and included a discussion of major tech acquisitions so far in 2016 with deal values ranging from $1.5 billion to $8.8 billion.
2. 2
A leader in the software industry, Bruce has founded or owned four software companies, including the largest vertical
market software company, AMI, an Inc. 500 firm rated by IDC as the fastest growing computer-related company in the
world.
He has served on advisory boards for Microsoft, IBM, DEC, Comdex and Apple, and as board member/founding
investor in some of the most innovative firms in their field, including Blue Coat, Bright Star and Sabaki. Past advisor to
two governors and a senator, a board member of the Washington Technology Center, and founder of the WTIA, the
nation’s most active regional technology trade association.
He worked with the Canadian government to found SoftWorld, and he was recently chosen as one of the 200 most
influential individuals in the IT community in Europe. He was also the only American juror for the recent Tornado 100
Awards given to Europe’s top technology firms
A graduate with Distinction from Harvard Business School, Bruce has written three books on business models for
success, including Power Planning. He is a frequent lecturer and author.
Welcome
Bruce Milne
CEO
Corum Group Ltd.
17. 17
Horizontal Application Software Market
3.7x
18.2x
Public Valuation Multiples
EV
Sales
Since Q2 Corum Analysis
EV
EBITDA
Aug. 2016
Upbeat increase to
multi-year highs…
…with EBITDA taking
a step back, as the
market prioritizes
growth over profits.
19. 19
Horizontal Application Software Market
3.7x
18.2x
Deal Spotlight: Enterprise Resource Planning
EV
Sales
Since Q2 Corum Analysis
EV
EBITDA
Aug. 2016
Upbeat increase to
multi-year highs…
…with EBITDA taking
a step back, as the
market prioritizes
growth over profits.
Target: Greentree International [New Zealand]
Acquirer: MYOB Technology [Bain Capital] [Australia]
Transaction Value: $20.2M
- ERP, CRM, SCM and BI software and SaaS
- Boosts MYOB’s reach into enterprise mid-market
- Likely to kick off MYOB’s further acquisitions in the space
Sold to
20. 20
Horizontal Application Software Market
3.7x
18.2x
Deal Spotlight: Project Portfolio Management
EV
Sales
Since Q2 Corum Analysis
EV
EBITDA
Aug. 2016
Upbeat increase to
multi-year highs…
…with EBITDA taking
a step back, as the
market prioritizes
growth over profits.
Target: Innotas [USA]
Acquirer: Planview [Insight Venture Partners] [USA]
Transaction Value: $80M (5.3x EV/Sales)
- Project & portfolio management SaaS
- Expands Plainview’s business with small and mid-size customers
- Both Innotas and Plainview recognized as leaders in the Gartner Magic Quadrants
Sold to
21. 21
Horizontal Application Software Market
3.7x
18.2x
Deal Spotlights: Horizontal Other
EV
Sales
Since Q2 Corum Analysis
EV
EBITDA
Aug. 2016
Upbeat increase to
multi-year highs…
…with EBITDA taking
a step back, as the
market prioritizes
growth over profits.
Sold to
Sold to
Target: BeyondCore [USA]
Acquirer: salesforce.com [USA]
Transaction Value: $110M (22x EV/Sales)
- Big data and predictive analytics SaaS
Target: Quip [USA]
Acquirer: salesforce.com [USA]
Transaction Value: $410M
- Team collaboration and document management SaaS
22. 22
Horizontal Application Software Market
3.7x
18.2x
Deal Spotlight: Horizontal Other
EV
Sales
Since Q2 Corum Analysis
EV
EBITDA
Aug. 2016
Upbeat increase to
multi-year highs…
…with EBITDA taking
a step back, as the
market prioritizes
growth over profits.
Target: Orbitera [USA]
Acquirer: Google [USA]
Transaction Value: $100M (reported)
- Third-party e-commerce SaaS for ISV and businesses
- Helps Google to withstand Microsoft Azure and AWS’ cloud computing supremacy
- Integrates with Google Cloud Platform
Sold to
24. 24
2.1x
16.2x
Deal Spotlights: Gaming Infrastructure
EV
Sales
Corum Analysis
EV
EBITDA
Consumer Software Market
Both multiples
bounced back to May
levels…
…as rising consumer
spending supports
demand.
Since Q2 Aug. 2016
Target: Curse [USA]
Acquirer: Twitch Interactive [USA]
- MMO gaming add-on and on-line community
Sold to
Target: Beam Interactive Inc. [USA]
Acquirer: Microsoft Corporation [USA]
- Online interactive video game streaming services
Sold to
25. 25
2.1x
16.2x
Deal Spotlights: Gaming Infrastructure
EV
Sales
Corum Analysis
EV
EBITDA
Consumer Software Market
Both multiples
bounced back to May
levels…
…as rising consumer
spending supports
demand.
Since Q2 Aug. 2016
Target: Sandboxr [USA]
Acquirer: WhiteClouds [USA]
- Online service enabling video games players to customize and print in 3D objects from the game
- Sandboxr partnerships include video game studios, Hollywood studios & Amazon
Sold to
26. 26
2.1x
16.2x
Deal Spotlight: Gambling
EV
Sales
Corum Analysis
EV
EBITDA
Consumer Software Market
Both multiples
bounced back to May
levels…
…as rising consumer
spending supports
demand.
Since Q2 Aug. 2016
Target: DEQ Systems [Quebec, Canada]
Acquirer: Scientific Games [USA]
Transaction Value: $20.7M (2.9x EV/Sales)
- Casino gaming systems and related integration services
- Enables buyer to diversify its table games offerings & expand international presence
Sold to
27. 27
2.1x
16.2x
Deal Spotlight: Gaming
EV
Sales
Corum Analysis
EV
EBITDA
Consumer Software Market
Both multiples
bounced back to May
levels…
…as rising consumer
spending supports
demand.
Since Q2 Aug. 2016
Sold to
Target: Kopla Games [Finland]
Acquirer: flaregames [Germany]
- Mobile iOS and Android role playing video games
- The deal followed a successful partnership on Nonstop Knight game
- First acquisition by the German game publisher
28. 28
2.1x
16.2x
Deal Spotlights: Entertainment
EV
Sales
Corum Analysis
EV
EBITDA
Consumer Software Market
Both multiples
bounced back to May
levels…
…as rising consumer
spending supports
demand.
Since Q2 Aug. 2016
Target: Surreal [USA]
Acquirer: STX Entertainment [USA]
- Produces, markets and distributes films, TV shows and digital programs globally
- The deal is deemed to help form STX’s full-scale VR content division
- Comes on heels of investment from Tencent Hong Kong telecom giant PCCW
Sold to
29. 29
Infrastructure Software Market
3.4x
14.0x
Public Valuation Multiples
EV
Sales
Corum Analysis
EV
EBITDA
Relatively stable values
as sector searches for
direction after heavy
consolidation last
year…
…leading to demand for
profits as EBITDA jumps
to highs for the year.
Since Q2 Aug. 2016
30. 30
Infrastructure Software Market
3.4x
14.0x
Deal Spotlights: AI
EV
Sales
Corum Analysis
EV
EBITDA
Relatively stable values
as sector searches for
direction after heavy
consolidation last
year…
…leading to demand for
profits as EBITDA jumps
to highs for the year.
Since Q2 Aug. 2016
Target: Turi [USA]
Acquirer: Apple [USA]
Transaction Value: $200M (reported)
- Open source, big data, machine-learning predictive analysis software
Target: Nervana Systems [USA]
Acquirer: Intel Corporation [USA]
Transaction Value: $400M (reported)
- AI-focused SaaS for robotics, hardware, training of deep neural networks, software development
Sold to
Sold to
31. 31
Infrastructure Software Market
3.4x
14.0x
Deal Spotlights: Security - Identity and Access Management
EV
Sales
Corum Analysis
EV
EBITDA
Relatively stable
values as sector
searches for direction
after heavy
consolidation last
year…
…leading to demand for
profits as EBITDA jumps
to highs for the year.
Since Q2 Aug. 2016Sold to
Target: Sypris Electronics (CSS business) [USA]
Acquirer: Analog Devices [USA]
Transaction value: $42M
- Secure encrypted communications, key management and identity authentication software systems
Sold to
Target: PhenixID [Sweden]
Acquirer: Clavister [Sweden]
Transaction value: $7.6M
- Identity and access management software and services
Sold to
Target: 2FA [USA]
Acquirer: Identity Automation [USA]
- Authentication tokens, card readers and IAM software
32. 32
Infrastructure Software Market
3.4x
14.0x
Deal Spotlight: Enmeshed Systems
EV
Sales
Corum Analysis
EV
EBITDA
Relatively stable values
as sector searches for
direction after heavy
consolidation last
year…
…leading to demand for
profits as EBITDA jumps
to highs for the year.
Since Q2 Aug. 2016
Sold to
Target: Movidius [USA]
Acquirer: Intel Corporation [USA]
- System-on-chip computer vision for drones, AR/VR, robots, security cameras, etc.
- Synergy with Intel’s RealSense camera technology
- Enables machines to see, understand and take action
- Includes algorithms for deep learning, depth processing and natural interactions
37. 37
To plan or settle estate tax issues
To generate settlement in a divorce
To obtain bank financing
To implement an employee stock ownership plan (ESOP)
To fulfill the requirements of a buy / sell agreement
To negotiate with venture investors
To satisfy the curiosity of a business owner
For the purposes of a strategic sale (auction process)
Possible Valuation Purposes
38. 38
10 Ways to Value a Company
Sales multiple – Public peer group
Earnings multiple – Public peer group
Comparable M&A transaction analysis
Discounted cash flow (DCF)
Replacement cost analysis
Dollars per R&D Developer
Internal rate of return (IRR)
Liquidation value
Book value
Internal Transaction Price
39. 39
12 Steps to a Successful Valuation
1. Why do a Valuation?
2. Performing a SWOT Analysis
3. Creating a Company and Market Overview
4. Developing Pro Forma Financials
5. Understanding Valuation Methodologies
6. Mapping Public Peer Groups
7. Finding Comparable Transactions
8. Using Discounted Cash Flow (DCF)
9. Calculating Discount Rates
10. Determining Replacement Value
11. Weighting Valuations
12. When to Present a Valuation
40. 40
Why do a valuation?
Rob Schram
Senior Vice President
Corum Group Ltd.
Rob has over 30 years of executive and entrepreneurial experience in multiple
technologies: Integrated circuit testing, industrial process automation and control,
communications software, security software, and energy software and services.
Rob has founded and sold several companies and engaged in two IPOs. He was
most recently CEO of Evergreen Fuel Technologies, Inc. in the energy sector. Rob
is a broadly skilled strategic development professional with a proven reputation for
targeting, negotiating and developing profitable ventures and a demonstrated
ability to successfully analyze an organization's critical business requirements,
identify deficiencies and opportunities, and develop innovative and cost-effective
solutions for enhancing competitiveness, increasing revenues, and improving
customer relationships.
41. 41
This seller
is serious.
Leverage using a Professional Intermediary
I may not
be the only
bidder.
Potential
Acquirer
Seller Intermediary
Wonderful
if I buy you,
terrible if I
don’t.
42. 42
Perform a SWOT Analysis
Rob Griggs
Vice President
Corum Group Ltd.
As a serial entrepreneur and investment banker, Rob Griggs has had a successful 35+
year career in the high technology arena. Early in his career he was a top performer at
Apple before starting his first software company in the mid-1980’s. As a founder of
Authorware / MacroMedia, NetRadio, Wit Capital, and many other companies, Rob’s
sales, marketing, business development and capital raising skills have been honed over
supporting hundreds of company financial transactions during his career.
His success and extensive experience in software M&A uniquely qualify him as an expert
in building value and realizing wealth. Rob joined Corum Group, the world’s leading
software M&A firm, with a specific focus on educating and helping prospective sellers
maximize the value of their technology companies.
44. 44
Creating a Company/Market Overview
Steve joined Corum after 25 years of executive experience in various high-tech
industries with both public and private venture-backed startups. He has extensive global
experience, opening international markets and growing sales from zero to tens of million
in revenue. He has been on the forefront of selling several companies and spinning off
software divisions, highlighted by the sale of GetFon to Alestra (AT&T Mexico). He is
fluent in Spanish.
Steve was the founding CEO of Solera Networks, a real-time intrusion detection security
company. He also co-founded Auction Trust Network, an eCommerce company for
online exchanges; which he sold to MediaForge (Rakuten Marketing).
Steve is a board member of several software companies and has industry expertise in
several areas: enterprise apps and infrastructure, security, mobile and wireless, media &
entertainment, supply chain, and embedded devices/systems (IoT).
Steve Jones
Vice President
Corum Group Ltd.
45. 45
Developing Pro Forma Financials
Allan Wilson
Vice President
Corum Group Ltd.
Allan has over 30 years of executive and entrepreneurial experience and has built
and sold several software companies in sectors including, manufacturing, supply
chain, big data, predictive analytics and social networks. He has deep understanding
of Aerospace, Automotive, High Tech, Healthcare, Consumer Products and Military
Contracting operating models.
Allan has extensive international experience and lived in Germany for a time working
for SAP, following the sale of his company to them in 2009.
46. 46
Actual Adjustment Recast
Revenue
License $10,000,000 $10,000,000
Support & Maintenance $6,000,000 $6,000,000
Consulting $4,000,000 $4,000,000
Total Revenue $20,000,000 $20,000,000
Cost of Revenue $5,500,000 $5,500,000
Gross Margin $14,500,000 $14,500,000
Operating Expenses
Sales & Marketing $4,800,000 ($4,900) $4,795,100
R&D Expense $2,000,000 $2,000,000
General & Administration $3,600,000 ($1,215,900) $2,384,100
Other Operating Exp. $600,000 ($16,600) $583,400
Total Operating Expense $11,000,000 $9,762,600
Operating Income $3,500,000 $4,737,400
Other Expenses
Interest Expense $250,000 ($50,000) $200,000
Depreciation $150,000 $150,000
Earnings Before Tax $3,100,000 $4,387,400
Developing Pro Forma Financials
Earnings Before Tax $3,100,00 $4,387,400
47. 47
Understanding Valuation Methods
Peter Prince
Vice President
Corum Group Ltd.
Peter Prince has spent the last 27 years involved in starting and growing software
companies or large divisions of international software companies. As well as following
his entrepreneurial spirit he has held a number of senior roles for both privately held and
public companies. He was part of several key acquisitions such as Software Artistry to
IBM, Infinium to SSA GT and SSA Global to Golden Gate (Infor).
He was President of SSA Global EMEA prior to its sale and then CEO of Cogniti.
Peter has a diverse background within the software industry spanning Operations,
Sales, Mergers and Acquisitions and Integration. He’s been retained by some of the
largest Private Equity firms in an advisory capacity.
Peter has also focused on investing both time and funding into start-up and young
companies over the recent years in a diverse range of sectors.
He attended Chiltern University attaining a business degree and later attended Harvard
Business School successfully completing an executive course, Launching New
Ventures.
48. 48
Core Valuation Methods
Sales Multiple (EV/S) – Public Peer Group
Revenue multiple of similar publicly traded companies
Earnings Multiple (EV/EBITDA) – Public Peer Group
Earnings multiple of similar publicly traded companies
Comparable M&A Transactions
Sales multiple of companies like yours that have sold
Discounted Cash Flow
The present value of all future cash flows
Replacement Cost Analysis
How much it would take to replace your product offering
49. 49
Mapping Public Peer Groups
Ivan Ruzic, Ph.D.
Vice President
Corum Group Ltd.
Ivan Ruzic has had a successful 30+ year career in the software business that has
included virtually every senior executive role. His resume spans marquee companies
such as BEA systems, Novell and Borland as well as multiple startups including his own.
His international experience is extensive and in addition to the United States has been
involved in mergers and acquisitions in Europe, Africa and Asia.
His success and extensive experience qualify him as an expert in building value and
realizing wealth. Ivan joined Corum Group, the world’s leading software M&A firm, with a
specific focus on educating and helping prospective sellers maximize the value of their
technology companies.
51. 51
Trailing 12-Month Multiples Forward Multiples
Ticker Company Sales Earnings Sales Earnings
BMC BMC 3.72 x 11.36 x 3.41 x 14.96
CA CA Technologies 2.61 x 7.12 x 2.46 x 12.05
CVG Convergys 0.66 x 12.18 x 0.78 x 11.59
EGAN eGain Communications 0.95 x 5.86 x N/A N/A
ININ Interactive Intelligence 2.89 x 18.90 x 2.30 x 29.23
NICE NICE Systems 2.79 x 18.72 x 2.43 x 17.52
PEGA Pegasystems 3.97 x 41.23 x 2.98 x 28.35
RNOW RightNow Technologies 4.08 x 42.95 x 3.34 x 41.97
SPRT Support.com 6.25 x nm 3.56 x nm
SYMC Symantec 2.32 x 7.97 x 2.16 x 11.29
VRNT Verint Systems Inc 2.40 x 20.38 x 2.21 x 13.43
Median Multiple 2.79 x 15.45 x 2.44 x 14.96 x
After 25% Liquidity Discount 2.10 x 11.59 x 1.83 x 11.22 x
Applied Financial Metric $4,300,000 $900,000 $7,500,000 $1,742,000
Implied Value $9,000,000 $10,400,000 $13,725,000 $19,550,000
*nm (not meaningful) for multiples over 50x or negative
(in $millions)
(in USD Millions)
Comparables – Public Peer Group
After 25% Liquidity Discount 2.10 x 11.59 x 1.83 x 11.22 x
Applied Financial Metric $4,300,000 $900,000 $7,500,000 $1,742,000
Implied Value $9,000,000 $10,400,000 $13,725,000 $19,550,000
52. 52
Finding Comparable Transactions
Peri Pierone has spent the last 25 years creating value in the B2B software marketplace.
He has held numerous strategic roles with large global firms like SAP, Business Objects
and Fiserv where he was part of several key acquisitions and was responsible for
introducing a variety of new applications to market. Peri has also held leading roles in
several small privately held software companies that eventually sold to large private
equity firms or to other strategic buyers. Through the years he has been intimately
involved as an insider on numerous transactions as the acquirer and as the one
positioning itself to be acquired.
Most recently he was CEO of Axiom EPM, where he led the company’s transformation
from a traditional enterprise license business to a true SaaS offering. He was
instrumental in driving the sale of the company in 2014 to strategic buyer, Kaufman Hall.
He received his bachelor’s degree in business from the University of Washington and his
M.B.A from Keller Graduate School.
Peri Pierone
Vice President
Corum Group Ltd.
53. 53
Seller Buyer Deal Value
Target's
Revenue
Buyer Seller
Date
Announced
Purchase
Price
Seller Revenue
TTM
EV/S
Multiple
Consona Corp. [fka Made2Manage Systems] SupportSoft Inc. (Enterprise business)
Apr-09
$20.0 $42.1 0.48 x
SupportSoft's enterprise business, which provides enterprise technical support software and services to digital service
providers, corporate IT departments and managed service providers globally.
Alcatel-Lucent Motive Communications, Inc. Jun-08 $67.8 $64.4 1.05 x
Provides Interent and IP-based cable television service management software to telecommunications service providers.
Oracle Corporation Art Technology Group, Inc.
Nov-10 $1,000.0 $193.9 5.16 xProvides a broad range of e-commerce software and software as a service (SaaS) for businesses globally. Software
provides features for online payments, merchandising, email marketing, business analytics, content management and
customer service automation.
Pitney Bowes Inc. Portrait Software Jun-10 $64.1 $23.3 2.75 x
Provides customer interaction management, analytics and optimization software for businesses globally.
Pegasystems Inc. Chordiant Software, Inc.
Mar-10 $161.5 $76.3 2.12 x
Provides customer experience management (CEM) software for the telecom, healthcare, insurance and financial services
sectors.
Enghouse Systems Limited Mettoni Group Ltd
Apr-10 $22.6 $25.7 0.88 xProvides, through its subsidiaries, call center management and customer care software and telecommunications expense
management software as a service (SaaS) for businesses globally. Software is compatible with Cisco, Nortel and Avaya
systems.
Support.com [fka SupportSoft Inc.] YourTechOnline.com Inc.
May-08 $2.7 $2.3 1.17 x
Provides technology support and repair services to customers in North America. Services are delivered remotely over the
Internet.
Convergys Corporation Intervoice, Inc. [Intervoice-Brite, Inc.] Jul-08 $335.0 $206.2 1.62 x
Provides interactive voice response and call center automation software to enterprises and telecommunications markets.
salesforce.com InStranet
Aug-08 $31.5 $15.0 2.10 xProvides contact center and sales content management software to businesses. Applications automate the dispersal of
customer service-focused information.Customers include 3M, AXA, BNP Paribas, France Telecom, Orange, SFR Cegetel,
Wanadoo and Zurich North
Art Technology Group, Inc. InstantService, Inc. Jan-10 $17.0 $5.5 3.09 x
Provides chat and email-based customer service automation and analytics software as a service (SaaS) for businesses.
OpSource, Inc. LeCayla Technologies Limited Feb-08 $1.0 $0.2 5.00 x
Provides customer metering, on-boarding and billing software for software as a service (SaaS) and web based
applications software providers. Software records and reports software usage allowing providers to offer SaaS on a pay
per use and metered basis.
Median Sales Multiple 2.10x
Implied Value $9,000,000
Comparables - Transactions (in USD Millions)
54. 54
Using Discounted Cash Flow (DCF)
Daniel Bernstein
Vice President
Corum Group Ltd.
Daniel Bernstein has worked in a number of roles over a twenty year career in high
technology, most recently as the founder and CEO of Sandlot Games Corporation, a
leading casual games publisher and developer. Having sold Sandlot Games to Digital
Chocolate in 2011, Daniel started a small games studio and a consulting practice
where he advises larger companies such as RealNetworks and smaller high growth
businesses on product development, strategic initiatives, and M&A opportunities.
Prior to Sandlot Games, Daniel Bernstein held director level positions in companies
such as Wild Tangent and Monolith. An accomplished composer, Daniel also writes
music for most of the games he works on.
Daniel holds a BS in Computer Science and an MA in Music Composition from the
University of Virginia.
56. 56
Calculating Discount Rates
Steve Hassett
Vice President
Corum Group Ltd.
Steve was previously a corporate development executive with Verint Systems, Sage
Group plc, and ran a new ventures group for The Weather Channel. Prior to that he
was CEO of iTendant, a SaaS and mobile software company he co-founded in 2000.
He is the author of the "The Risk Premium Factor: A New Model for Understanding the
Volatile Forces that Drive Stock Prices" (Wiley 2011) and has also published in the
Journal of Applied Corporate Finance, Ad Age, CNBC.com and is a regular
contributing author for the Seeking Alpha investment website. Steve is also inventor of
U.S. Patent 9,378,515, which deals with the availability of mobile content based on a
user's location and the time of transmission.
He holds an MBA from the Darden School of Business at the University of Virginia and
a B.S. from Rensselaer Polytechnic Institute.
57. 57
Determining Replacement Value
David Levine
Vice President
Corum Group Ltd.
Dave joined Corum in 2015 and has a diverse background in technology and life
sciences. As an executive and entrepreneur, Dave has been operating and investing
in companies sitting at the convergence of commerce and eCommerce as well as
innovative life science businesses for over twenty-five years. Recently, Dave was
CEO North America for Gaxsys, an eCommerce and logistics company that is a
leader in last mile logistics and fulfillment for eCommerce marketplaces.
Dave has been on both sides of the mergers and acquisitions table having sold a life
science technology company, facilitated sell side and buy side technology transactions
and has also scaled multiple technology companies globally in the eCommerce, life
sciences and innovation intelligence markets. Dave sits on boards of public and
private companies including one company that recently filed for an IPO.
Dave holds a business degree from the Indiana University, Kelley School of Business.
58. 58
Fully burdened cost per person $100,000
Number of people per year 25
Number of Years in Development 3
$7,500,000
Fully burdened cost per contractor $ 66,000
Number of contractors per year 5
Number of Years in Development 3
$990,000
Fully burdened cost to develop software $8,490,000
Time to Market Factor 1.50x
Valuation Based on Replacement Value $12,735,000
Replacement Value Analysis
59. 59
Weighting Valuations
Jon joined Corum in 2010 out of their Seattle headquarters and is now based in
Amsterdam. He has close to 30 years experience serving high technology companies
with the last 20 mainly in chief operating and chief executive roles. During this time Jon
has become known for his ability to successfully integrate strategies and tactics into
well executed operating plans, building strong teams and achieving excellent results.
Jon has served as President and CEO of The PowerTech Group, a security and
compliance software company sold to Help/Systems in 2008, and Microserv
Technology Services, a nationwide tech services company which was acquired by
Halifax Corporation in 2003. Earlier he served as President and COO of Traveling
Software, a leading developer of communications software in Seattle. Prior to his
operating roles Jon held vice president roles in sales, marketing and business
development for technology companies.
Jon has taught in the software product management program at the University of
Washington and holds a business administration degree from San Francisco State
University.
Jon Scott
Managing Director
Corum Group
International
60. 60
Weighting Valuation Methods
Comparable Public Company Analysis
Financial
Metric
Applied
Multiple
Implied Value Weight Weighted Value
Trailing Multiples
Enterprise Value/TTM Revenue 4,300,000 2.10 x 9,000,000 8.3% 750,000
Trailing P/E 900,000 11.59 x 10,400,000 8.3% 870,000
Forward Multiples
Enterprise Value/FY Revenue 7,500,000 1.83 x 13,725,000 8.3% 1,100,000
Forward P/E - FY Earnings 1,742,000 11.22 x 19,550,000 8.3% 1,600,000
Total
Weighting of
Method
33.3% 4,320,000
Comparable Transaction Analysis 4,300,000 2.1 x 9,000,000 33.3% 3,000,000
Discounted Cash Flow Analysis 21,750,000 33.3% 7,200,000
Assumptions/Definitions:
EV = Enterprise Value (Market Capitalization + Debt - Cash)
Total Weighted Fair Market Value $14,500,000
61. 61
When to Present a Valuation
Entertainment software entrepreneur Jim Perkins is directly responsible for publishing
some of the industry’s biggest franchises, including Unreal, Duke Nukem, Wolfenstein,
Doom, Hunting Unlimited, and Driver. A well-known senior executive with a 22-year
track record of publishing such bestselling hits, he founded and grew two highly
successful software publishing companies (FormGen and ARUSH) from start-ups to
multi-million dollar enterprises.
Jim also launched Radar Group, the first Transmedia Incubation Company to monetize
entertainment franchises across all media, including film and television. His success
and extensive experience in software production, marketing and public relations,
packaging, online and retail distribution and software M&A, uniquely qualify him as an
expert in building value and realizing wealth. Jim joined Corum Group, the world’s
leading software M&A firm, with a specific focus on educating and helping prospective
sellers maximize the value of their digital media companies.Jim Perkins
Executive Vice President
Corum Group, Ltd.
62. 62
Valuation - Present as Late as Possible
The marketplace may spotlight your most
valuable attributes
Buyers may disclose preferred valuation
methods, comparables, structures & reasons
Use the most current growth in revenue &
profits in the analysis
Time for the auction environment to develop
You may never present a valuation
63. 63
12 Steps to a Successful Valuation
1. Why do a Valuation?
2. Performing a SWOT Analysis
3. Creating a Company and Market Overview
4. Developing Pro Forma Financials
5. Understanding Valuation Methodologies
6. Mapping Public Peer Groups
7. Finding Comparable Transactions
8. Using Discounted Cash Flow (DCF)
9. Calculating Discount Rates
10. Determining Replacement Value
11. Weighting Valuations
12. When to Present a Valuation
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Upcoming Conference Schedule
Selling Up Selling Out (SUSO) - Ready to go to market? During this half-day workshop, learn to prepare, position,
research, value, negotiate, and execute due diligence for maximum price and structure. This is the most attended Tech M&A
event ever – participants have done over $1 trillion in transaction value.
Merge Briefing (MB) - The Merge Briefing is a 90-minute executive briefing providing a current M&A market update (trends,
valuations, etc.), as well as a brief overview of the Tech M&A process: “8 Steps To An Optimal Outcome.”
www.CorumGroup.com/Events
Sep. 14: Atlanta – SUSO
Sep. 15: Nashville – MB
Sep 16.: Cincinnati – MB
Sep. 20: Salt Lake City – SUSO
Sep. 21: East Brunswick – MB
Sep. 22: Wilmington – MB
Sep. 27: Barcelona – MB
Sep. 27: Denver – SUSO
Sep. 28: Phoenix – SUSO
Sep. 29: Berlin – SUSO
Oct. 4: Detroit – SUSO
Oct. 13: Munich – SUSO
Oct. 18: Dublin – MB
Oct. 19: Stockholm – SUSO