European Technology Update 29 September 2011

Transcription

1 European Technology Update 29 September 2011 Member FINRA/SIPC Thierry Monjauze Managing Director 63 Brook Street London W1K 4HS United Kingdom Phone: Francois Morin Director 63 Brook Street London W1K 4HS United Kingdom Phone: This report has been prepared by Harris Williams & Co. Ltd and approved by Sturgeon Ventures LLP in accordance with Conduct Of Business rules COBS 4 of the FSA Handbook. Harris Williams & Co. Ltd is an authorised representative of Sturgeon Ventures LLP which is Authorised and Regulated by the Financial Services Authority. This report is being made by Harris Williams & Co. Ltd. Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business in the U.S. and Europe, respectively.

2 Recent Developments Company Specific News Fundtech, an Israel-based developer of electronic payment solutions, was acquired by GTCR for $390 million Sage s healthcare division, a provider of practice management and electronic health record solutions to physician practices, was acquired by Vista Equity Partners for 205 million CSC acquired AppLabs Technologies, a software testing and quality management service provider, for an estimated $200 million HgCapital has made an offer for listed web hosting company Group NBT valuing it at 153 million Google acquired the German discount online shopping portal DailyDeal for 130 million Glam Media acquired Ning, the social media platform, for an estimated $150 million Tyco International acquired Visonic, a developer and manufacturer of home security systems, for $96 million NICE Systems acquired Fizzback, provider of customer feedback and CEM solutions, for $80 million Salesforce.com acquired Assistly, an instant customer service help desk built for the cloud, for $50 million Rakuten acquired the UK-based e-commerce site Play.com for 25 million Capita acquired Cedar HR Software, provider of HR management software to UK police, for 15 million Telecity Group acquired UK Grid Group, operator of collocation data centers, for 11.7 million Populis acquired Mokono, Germany s largest blog and social media advertising specialist, for 8.2 million Bsquare Corporation acquired MPC Data, a UK-based provider of embedded software engineering services and products, for $5 million Interoute Communications acquired the UK-based provider of IT solutions Quantix Mobile advertising network InMobi raised $200 million from Softbank Corp Rearden Commerce, developer of the e-commerce platforms, has raised $133 million from American Express and J.P. Morgan Data analytics company Opera Solutions raised $84 million from a group of investors including Silver Lake Sumeru, Accel-KKR, Invus Financial Advisors, JGE Capital Management and Tola Capita Adchemy, a leading advertising technology company, raised $61 million from Microsoft, August Capital and the Mayfield Fund Giant Interactive Group invested $50 million in China s e-commerce company Alibaba Restaurant ordering and delivery service GrubHub raised $50 million in a round led by Lightspeed Ventures Andreessen Horowitz led a $40 million investment in Lookout Mobile Security MeLLmo, provider of innovative mobile applications, raised $30 million in a round led by Sequoia Capital GCT Semiconductor, a maker of mobile semiconductor software, filed for an IPO to raise up to $100 million LivingSocial is expected to forgo plans for an IPO in favour of a $200 million new fund raise Research in Motion s profits more than halved year-on-year to $329 million for its latest quarter Facebook s revenues are set to hit $4.3 billion this year, up from $2 billion in 2010, according to emarketer HP's Board has replaced CEO Leo Apotheker with former ebay CEO Meg Whitman Industry Trends Spotify now has more than 2 million paying subscribers worldwide, according to the firm s CEO emarketer estimates that 68% of US adult internet users watch a form of online video at least once a month BIA/Kelsey expects spend on daily deals to hit $2 billion this year Mobile commerce revenues are expected to hit $31 billion globally by 2016, according to Forrester Research Global game advertisement revenue will generate e $3.1 billion in 2011, according to DFC Intelligence emarketer estimates that nearly 9.5% of US adult mobile phone users will redeem a mobile coupon in 2011 Mobile ad spending is predicted to reach $1 billion in 2011 According to Kantar Media, online spending grew 10.4% in the first half of 2011 More than 1 billion people are now using social networks worldwide, according to InSites Consulting Apple s ipad accounts for nearly three quarters of tablet sales in the UK, according to Kantar Worldpanel More US consumers will access the internet via a mobile device than on desktop devices such as a PC by 2015, according to the latest stats from IDC Online video will account for 6.9% of online ads this year, according to emarketer By the end of 2011, the Android system will be installed on 37% of all smartphones,, according to emarketer The use of e-readers has nearly doubled year-on-year, with 15% of the US population now using a device Tablet sales increased 8 year-on-year in Q2, according to a report from Infonetics Research Source: Industry news sources. 1

3 Public Market Trading Statistics Stock Performance Last 30 Days 5% (5%) 2.7% (4. ) (6.8% ) (7.5% ) (9.2% ) () 25 Aug 31 Aug 06 Sep 12 Sep 18 Sep DJ Stoxx 600 Technology Nasdaq Composite Software and IT Services Communications Internet and Digital Media Last Twelve Months () (2) 4.8% (1.9% ) (8.9%) (9.2% ) (26.) (3) Sep 2010 Dec 2010 Mar 2011 Jun 2011 Sep 2011 DJ Stoxx 600 Technology Nasdaq Composite Software and IT Services Communications Internet and Digital Media Comparable Trading Summary Sources: Capital IQ, 23 September 2011; Brokers reports. CY2011E EV / Revenue EV / EBITDA P / E EBITDA Margin Growth CY2011E CY2012E CY2011E CY2012E CY2011E CY2012E Software and IT Services Enterprise Applications 19.2% 3.3% 1.3x 1.2x 6.7x 5.8x 16.4x 11.9x European Large Cap Software 31.9% 5.6% 3.4x 3.1x 10.1x 8.8x 16.0x 13.7x Financial Software 23.6% x 1.7x 7.6x 6.8x 14.6x 12.8x Healthcare Software 20.5% 14.5% 2.0x 1.8x 8.7x 7.5x 20.4x 15.9x Large Cap IT Services % 0.8x 0.7x 5.5x 4.9x 11.0x 9.6x Mid Cap IT Services % 0.6x 0.6x 5.1x 4.9x 7.9x 7.2x Offshore IT Services 21.9% 23.3% 2.6x 2.2x 11.0x 9.4x 16.5x 14.3x Security Software 36.7% 9.9% 3.3x 3.1x 8.4x 7.4x 15.8x 14.0x Communications Digital Broadband 11.1% 2.4% 0.4x 0.4x 4.1x 3.4x 13.0x 7.5x Diversified Communication Equipment 13.2% 9.9% 1.0x 0.9x 8.4x 5.9x 14.1x 11.7x Mobile Content / Solutions Providers 16.7% 37.2% 1.1x 0.9x 6.2x 4.2x 16.3x 11.7x Mobile Infrastructure Software % 1.9x 1.7x 10.7x 7.3x 22.6x 17.5x Internet and Digital Media Chinese Internet Leaders 31.7% 46.3% 5.1x 3.7x 11.3x 13.6x 19.6x 15.8x Online Classifieds 39.4% 27.6% 4.3x 3.7x 10.8x 9.0x 16.7x 17.7x Content Providers / Communities 19.6% 37.7% 4.3x 3.0x 10.4x 7.5x 29.3x 20.5x Ecommerce % 3.3x 2.6x 17.1x 12.6x 29.3x 25.8x Global Internet Leaders 36.3% 3% 34.8% x x 17.8x 13.2x 22.8x 17.5x Interactive Entertainment 19.2% 35.6% 1.0x 1.0x 6.7x 8.2x 18.4x 13.0x Intermediation and Comparison 25.4% 12.1% 2.1x 2.0x 9.3x 8.1x 22.0x 21.3x Online Gambling 27.6% 47.4% 1.6x 1.4x 5.5x 4.7x 12.0x 9.4x Online Marketing 12.4% 18.3% 1.1x 1.0x 7.1x 5.8x 14.7x 13.3x Online Travel 29.6% x 2.9x 11.0x 8.7x 22.0x 14.9x 2

4 Software and IT Services 5% Last 30 Days Performance Healthcare Software (2.4% ) Offshore IT Services (2.4% ) Security Software (3.5% ) Large Cap IT Services (7.1% ) European Large Cap Software (9.1% ) Financial Software (9.7%) Enterprise Applications (12.2% ) Mid Cap IT Services (15.6% ) (5%) () (15%) (2) 24 Aug 30 Aug 05 Sep 11 Sep 17 Sep 23 Sep European Large Cap Software Enterprise Applications Security Software Mid Cap IT Services Financial Software Healthcare Software Large Cap IT Services Offshore IT Services Security Software 6.4% Healthcare Software 6.4% Financial Software (6.4% ) European Large Cap Software (10.7% ) 3 Large Cap IT Services (14.7% ) Et Enterprise Applications (15.4%) Offshore IT Services (16. ) Mid Cap IT Services (24.7% ) 2 Last Twelve Months Performance () (2) (3) Sep 2010 Dec 2010 Mar 2011 Jun 2011 Sep 2011 European Large Cap Software Financial i lsoftware Enterprise Applications Healthcare Software Security Software Large Cap IT Services Mid Cap IT Services Offshore IT Services Source: Capital IQ, 23 September

5 Software and IT Services (Continued) Market Enterprise CY2011E EV / Revenue EV / EBITDA P / E Cap ($m) Value ($m) EBITDA Margin Growth CY2011E CY2012E CY2011E CY2012E CY2011E CY2012E European Large Cap Software SAP 57,868 57, % 14.2% 3.0x 2.8x 8.9x 8.0x 13.7x 12.1x Autonomy (1) 9,496 9, % 19.3% 9.2x 7.9x 19.8x 15.9x 32.0x 25.7x Dassault Systemes 8,514 7, % x 2.8x 9.9x 9.0x 18.5x 16.6x Sage 5,263 5, % x 2.3x 8.7x 8.2x 12.9x 12.1x Software AG 2,749 2, % 3.4% 1.9x 1.8x 6.6x 6.1x 10.0x 9.0x Aveva 1,588 1, % 4.6x 4.2x 14.5x 12.4x 23.9x 20.3x Misys 1,109 1, % (29.2%) 2.0x 1.8x 8.0x 6.7x 13.8x 9.8x Temenos 1,019 1, % 13.5% 2.3x 2.1x 9.1x 6.9x 9.8x 9.2x Micro Focus % (2.2%) 2.2x 2.2x 5.8x 5.7x 9.0x 8.6x Mean 31.9% 5.6% 3.4x 3.1x 10.1x 8.8x 16.0x 13.7x Median 30.9% x 2.3x 8.9x 8.0x 13.7x 12.1x Financial Software Intuit 14,219 13, % 3.4x 3.2x 9.3x 8.5x 17.7x 15.8x Misys 1,109 1, % (29.2%) 2.0x 1.8x 8.0x 6.7x 13.8x 9.8x Temenos 1,019 1, % 13.5% 2.3x 2.1x 9.1x 6.9x 9.8x 9.2x Fidessa % 6.8% 1.8x 1.6x 8.4x 7.8x 19.4x 17.7x SimCorp % 7.4% 2.2x 2.0x 8.8x 7.9x 14.7x 12.6x Innovation % 8.4% 0.9x 0.9x 7.5x 6.7x 19.9x 17.8x Microgen % 15.2% 2.6x 2.4x 9.8x 9.3x 18.5x 17.2x ORC % (3.8%) 0.9x 0.9x 3.9x 3.4x 11.2x 9.3x Linedata % (2.3%) 0.6x 0.6x 2.8x 2.6x 6.7x 6.1x StatPro % 0.7% 1.7x 1.6x 8.8x 7.9x 14.2x 12.5x Mean 23.6% x 1.7x 7.6x 6.8x 14.6x 12.8x Median 24.1% 7.1% 1.9x 1.7x 8.6x 7.4x 14.4x 12.6x Enterprise Applications SDL % 12.5% 1.9x 1.8x 10.1x 9.2x 16.7x 15.1x Unit % 9.2% 1.4x 1.3x 6.7x 6.2x 17.1x 14.2x Exact % (2.5%) 1.5x 1.4x 6.2x 5.9x 11.0x 10.2x Kofax % (15.6%) 1.3x 1.1x 6.4x 5.9x 14.1x 12.5x F-Secure % 10.6% 1.9x 1.7x 9.9x 7.9x 17.2x 13.3x IFS % (0.3%) 0.7x 0.7x 4.7x 4.4x 12.1x 10.8x Cegid % 3.9% 0.8x 0.8x 3.2x 3.0x 6.7x 6.1x Kewill % 5.2% 1.0x 0.9x 5.2x 4.8x 11.2x 10.1x Alterian % 7.1% 1.0x 0.9x 8.1x 4.5x 41.0x 14.7x Mean 19.2% 3.3% 1.3x 1.2x 6.7x 5.8x 16.4x 11.9x Median 18.9% 5.2% 1.3x 1.1x 6.4x 5.9x 14.1x 12.5x Healthcare Software McKesson 18,069 18, % 7.7% 0.2x 0.2x 6.8x 5.7x 13.2x 11.1x Cerner 11,692 11, % 14.2% 5.3x 4.6x 16.5x 13.9x 37.8x 31.4x Allscripts Healthcare Solutions 3,443 3, % 14.4% 2.6x 2.4x 10.0x 8.6x 20.5x 17.2x CompuGroup % 24.9% 1.5x 1.3x 8.0x 6.2x 13.0x 9.0x Cegedim 438 1, % 1.9% 0.8x 0.8x 4.6x 4.3x 5.9x 5.2x Advanced Computer Software % 24.1% 1.7x 1.6x 6.5x 6.2x 31.8x 21.9x Mean 20.5% 14.5% 2.0x 1.8x 8.7x 7.5x 20.4x 15.9x Median 22.3% 14.3% 1.6x 1.5x 7.4x 6.2x 16.8x 14.1x Sources: Capital IQ, 23 September 2011; Brokers reports. (1) Autonomy share price affected by takeover announcement on 18 August

6 Software and IT Services (Continued) Market Enterprise CY2011E EV / Revenue EV / EBITDA P / E Cap ($m) Value ($m) EBITDA Margin Growth CY2011E CY2012E CY2011E CY2012E CY2011E CY2012E Security Software Symantec 12,130 11, % 11.5% 1.8x 1.7x 5.2x 4.7x 10.4x 9.3x Check Point 10,975 9, % 14.6% 7.9x 7.1x 13.3x 12.1x 18.8x 16.9x Trend Micro 3,852 2, % 1.8x 1.7x 5.4x 4.9x 16.8x 16.6x F-Secure % 10.6% 1.9x 1.7x 9.9x 7.9x 17.2x 13.3x Mean 36.7% 9.9% 3.3x 3.1x 8.4x 7.4x 15.8x 14.0x Median 34.1% x 1.7x 7.7x 6.4x 17.0x 15.0x Large Cap IT Services Accenture 32,485 27, % 18.9% 1.1x 1.0x 6.8x 6.2x 14.5x 12.9x Capita Group 6,717 8, % 7.4% 1.9x 1.7x 10.9x 10.0x 14.8x 13.4x Cap Gemini 5,041 4, % 11.9% 0.4x 0.4x 4.0x 3.7x 9.8x 8.6x Computer Sciences 4,037 5, % (0.) 0.3x 0.3x 2.6x 2.2x 6.5x 5.5x Atos Origin 2,910 3, % 0.3x 0.3x 3.3x 2.5x 9.6x 7.7x Mean % 0.8x 0.7x 5.5x 4.9x 11.0x 9.6x Mdi Median 12.7% 11.9% x x x x x x Mid Cap IT Services CGI 4,665 5, % 9.8% 1.3x 1.3x 7.1x 6.6x 11.6x 10.5x Indra Sistemas 2,245 2, % 0.8x 0.7x 6.4x 6.0x 8.5x 8.1x Logica 1,844 2, % 6.5% 0.4x 0.4x 4.8x 4.5x 6.0x 5.5x Tieto 885 1, % 6.4% 0.4x 0.4x 4.3x 4.1x 10.6x 8.3x Sopra (5.3%) 0.6x 0.5x 5.1x 5.1x 7.0x 7.3x Groupe Steria % (0.6%) 0.3x 0.3x 3.5x 3.3x 4.9x 4.4x GFI Informatique % x 0.4x 4.9x 4.6x 6.7x 6.4x Mean % 0.6x 0.6x 5.1x 4.9x 7.9x 7.2x Median 10.3% x 0.4x 4.9x 4.6x 7.0x 7.3x Offshore IT Services Tata 39,287 38, % 27.7% 4.2x 3.6x 14.5x 12.4x 19.0x 16.6x Infosys 27,071 23, % 20.6% 3.8x 3.2x 12.3x 10.9x 18.0x 15.2x Cognizant 18,991 16, % x 2.3x 13.4x 11.0x 22.3x 18.5x Wipro 16,755 15, % x 2.0x 10.9x 9.4x 15.1x 13.3x HCL 5,416 5, % 29.1% 1.5x 1.3x 8.7x 7.7x 13.9x 12.1x Satyam 1,680 1, % 13.6% 0.9x 0.7x 6.4x 5.0x 11.0x 10.0x Mean 21.9% 23.3% 2.6x 2.2x 11.0x 9.4x 16.5x 14.3x Median 20.5% 24.1% 2.5x 2.1x 11.6x 10.1x 16.5x 14.2x Sources: Capital IQ, 23 September 2011; Brokers reports. 5

7 Communications Last 30 Days Performance 15% Mobile Infrastructure Software (3.3% ) Diversified Communication Equipment (6.3% ) Digital Broadband (16.9%) Mobile Content / Solutions Providers (21.) 5% (5%) () (15%) (2) (25%) 24 Aug 30 Aug 05 Sep 11 Sep 17 Sep 23 Sep Digital Broadband Mobile Infrastructure Software Diversified Communication Equipment Mobile Content / Solutions Providers Last Twelve Months Performance 5 4 Mobile Infrastructure Software (18. ) Diversified Communication Equipment (21.1% ) Mobile Content / Solutions Providers (22.2% ) Digital Broadband (44. ) 3 2 () (2) (3) (4) (5) Sep 2010 Dec 2010 Mar 2011 Jun 2011 Sep 2011 Digital Broadband Mobile Infrastructure Software Diversified Communication Equipment Mobile Content / Solutions Providers Source: Capital IQ, 23 September

8 Communications (Continued) Market Enterprise CY2011E EV / Revenue EV / EBITDA P / E Cap ($m) Value ($m) EBITDA Margin Growth CY2011E CY2012E CY2011E CY2012E CY2011E CY2012E Digital Broadband Logitech 1, % 2.3% 0.4x 0.4x 6.9x 4.0x 23.9x 11.6x TomTom 747 1, % (16.) 0.7x 0.7x 4.6x 4.6x 7.1x 6.6x Technicolor 521 1, % 5.2% 0.4x 0.4x 2.8x 2.6x NA NA Kudelski (18.9%) 0.8x 0.7x 6.9x 5.8x 20.6x 11.2x Pace % 22.7% 0.3x 0.3x 3.4x 3.0x 4.6x 3.6x Parrot % 7.1% 0.4x 0.3x 2.4x 2.1x 8.7x 8.0x Advanced Digital Broadcast % 14.1% 0.1x 0.1x 1.8x 1.3x NM 4.1x Mean 11.1% 2.4% 0.4x 0.4x 4.1x 3.4x 13.0x 7.5x Median % 0.4x 0.4x 3.4x 3.0x 8.7x 7.3x Diversified Communication Equipment LM Ericsson Telephone 30,435 23, % x 0.7x 4.7x 4.3x 12.5x 10.6x Nokia 19,694 16, % (8.6%) 0.3x 0.3x 6.0x 4.5x 20.4x 15.2x Alcatel-Lucent 6,683 8, % 0.4x 0.3x 4.0x 3.5x 10.2x 7.8x ADTRAN 1,875 1, % 21.4% x x x x 13.2x 12.2x2 CIENA 1,109 2, % 19.1% 1.2x 1.0x 19.2x 9.9x NM 12.7x Mean 13.2% 9.9% 1.0x 0.9x 8.4x 5.9x 14.1x 11.7x Median x 0.7x 6.0x 4.5x 12.9x 12.2x Mobile Infrastructure Software QUALCOMM 84,336 74, % 4.7x 4.1x 10.8x 9.9x 15.6x 13.8x Amdocs 4,937 3, % 6.2% 1.2x 1.1x 5.8x 5.8x 11.9x 10.8x VeriSign 4,716 3, % 3.9% 5.1x 4.5x 9.5x 8.3x 19.4x 15.6x Comverse Technology 1,526 1, % 5.5% 1.1x 1.0x 7.9x 7.5x 15.9x 11.2x Synchronoss Technologies % 3.5x 2.9x 12.8x 10.2x 29.1x 23.2x Sonus Networks % 12.8% 1.0x 0.9x 27.4x 10.0x NM 27.1x Tekelec % (7.) 0.5x 0.5x 3.5x 3.2x 23.2x 16.7x TeleCommunication Systems % 8.8% 0.6x 0.6x 4.7x 3.9x 23.9x 15.2x Openwave Systems (10.3%) (13.8%) 0.4x 0.4x NM 6.9x NM 28.2x Redknee Solutions % x 0.9x 14.0x 7.4x 41.5x 12.9x Smith Micro Software 54 NM (32.8%) (45.3%) NM NM NM NM NM NM Mean % 1.9x 1.7x 10.7x 7.3x 22.6x 17.5x Median 13.6% 6.2% 1.1x 1.0x 9.5x 7.4x 21.3x 15.4x Mobile Content / Solutions Providers Opera Software % 29.2% 2.8x 2.2x 11.1x 7.3x 21.1x 13.2x GameLoft % 15.1% 1.5x 1.4x 7.1x 6.1x 18.9x 15.2x Buongiorno % 27.2% 0.4x 0.3x 3.3x 2.7x 9.7x 6.0x Danal % x 0.5x 3.7x 2.8x 15.0x 11.0x Dada (29.6%) 0.6x 0.5x 5.0x 4.1x 26.8x 23.1x Synchronica % 158.4% 0.9x 0.6x 6.8x 2.2x 6.0x 2.0x Mean 16.7% 37.2% 1.1x 0.9x 6.2x 4.2x 16.3x 11.7x Median 15.8% 25.1% 0.8x 0.6x 5.9x 3.4x 17.0x 12.1x Sources: Capital IQ, 23 September 2011; Brokers reports. 7

9 Internet and Digital Media Last 30 Days Performance 25% 2 15% Intermediation and Comparison 9.3% Global Internet Leaders 5.2% Interactive Entertainment (0.7% ) Content Providers / Communities (1. ) Online Gambling (2.3%) Ecommerce (5.7%) Online Marketing (8. ) Online Classifieds (9.2%) Online Travel (12.4%) Chinese Internet Leaders (14.5% ) 5% (5%) () (15%) (2) 23 Aug 29 Aug 04 Sep 10 Sep 16 Sep 22 Sep Global Internet Leaders Ecommerce Online Travel Online Marketing Content Providers / Communities Intermediation and Comparison Online Classifieds Chinese Internet Leaders Online Gambling Interactive Entertainment Last Twelve Months Performance 5 Intermediation and Comparison 25.4% Global Internet Leaders 14.3% Ecommerce 2.9% Online Classifieds 2.5% Chinese Internet Leaders 0.4% Online Marketing (5.3%) Content Providers / Communities (6.4% ) Online Travel (9.6% ) Interactive Entertainment (18.2% ) Online Gambling (42.7%) 3 () (3) (5) Sep 2010 Dec 2010 Mar 2011 Jun 2011 Sep 2011 Global Internet Leaders Ecommerce Online Travel Online Marketing Content Providers / Communities Intermediation and Comparison Online Classifieds Chinese Internet Leaders Online Gambling Interactive Entertainment Source: Capital IQ, 23 September

10 Internet and Digital Media (Continued) Market Enterprise CY2011E EV / Revenue EV / EBITDA P / E Cap ($m) Value ($m) EBITDA Margin Growth CY2011E CY2012E CY2011E CY2012E CY2011E CY2012E Global Internet Leaders Apple 374, , % 59.8% 2.9x 2.4x 8.9x 7.8x 13.4x 11.9x Microsoft 209, , % 9.5% 2.4x 2.2x 5.6x 5.0x 8.9x 8.2x Google 169, , % 30.2% 3.6x 3.0x 8.7x 7.2x 14.8x 12.5x Amazon 101,504 95, % 43.1% 1.9x 1.5x 37.4x 27.1x NM NM Baidu 43,059 41, % x 12.6x 33.1x 21.7x 42.9x 28.3x ebay 41,343 39, % 26.3% 3.4x 2.9x 10.5x 8.8x 16.0x 13.8x Yahoo! 18,573 16, % (0.4%) 3.5x 3.5x 11.2x 10.3x 19.5x 17.8x Yandex 8,249 7, % 26.1% 12.3x 8.5x 27.2x 18.0x 43.9x 30.1x Mean 36.3% 34.8% 6.2x 4.6x 17.8x 13.2x 22.8x 17.5x Median 37.3% 28.2% 3.5x 3.0x 10.8x 9.6x 16.0x 13.8x Ecommerce Amazon 101,504 95, % 43.1% 1.9x 1.5x 37.4x 27.1x NM NM ebay 41,343 39, % 26.3% 3.4x 2.9x 10.5x 8.8x 16.0x 13.8x Netflix 6,796 6, % 2.0x 1.5x 12.7x 9.7x 28.1x 19.6x Mail.ru 6,261 6, % 62.1% 12.5x 9.6x 25.7x 19.2x 36.8x 26.3x IAC 3,426 2, % 7% 18.9% 14x 1.4x 12x 1.2x 77x 7.7x 63x 6.3x 20.1x 16.8x Mercadolibre 2,603 2, % x 6.5x 24.3x 17.9x 37.8x 27.1x Asos 1,858 1, % x 1.8x 26.4x 18.6x 45.8x 32.0x Shutterfly 1,641 1, % 63.3% 3.2x 2.5x 16.6x 11.3x NM 33.2x OpenTable 1,129 1, % 45.3% 7.4x 5.7x 18.4x 13.0x 38.4x 28.0x Vistaprint 1, % 24.6% 0.9x 0.7x 5.6x 5.3x 13.7x 13.0x Digital River % 8.5% 1.3x 1.2x 6.3x 5.1x 20.2x 15.8x YOOX % 33.5% 2.1x 1.6x 20.8x 15.0x NM 39.0x Ocado % 19.9% 0.8x 0.7x 14.7x 10.0x NM NM Blue Nile % 8.6% 1.2x 1.1x 16.7x 14.8x 36.1x 31.6x Overstock % 5.2% 0.2x 0.1x 12.3x 6.6x NM 39.7x Mean % 3.3x 2.6x 17.1x 12.6x 29.3x 25.8x Median 16.1% 33.5% 2.0x 1.5x 16.6x 11.3x 32.1x 27.1x Online Travel Priceline 25,612 24, % 39.9% 5.6x 4.5x 16.8x 12.8x 22.8x 17.4x Expedia 7,452 6, % 17.9% 1.8x 1.6x 6.7x 6.1x 14.0x 12.4x Ctrip 4,996 4, % 28.1% 8.0x 6.4x 20.1x 15.7x 24.1x 19.3x Wotif % 3.4% 4.6x 4.2x 8.2x 7.5x 14.9x 13.4x Travelzoo % 35.8% 2.3x 2.0x 8.8x 6.7x 17.2x 13.3x Orbitz % 0.7x 0.7x 4.6x 4.1x 35.3x 17.0x hotel.de % 13.7% 1.0x 0.9x 11.7x 7.8x 26.1x 11.8x Mean 29.6% x 2.9x 11.0x 8.7x 22.0x 14.9x Median 26.4% 17.9% 23x 2.3x 20x 2.0x 88x 8.8x 75x 7.5x 22.8x 13.4x Online Marketing HomeAway 2,736 3, % 48.5% 13.8x 10.9x 49.4x 38.7x NM NM ValueClick 1,294 1, % 27.4% 2.1x 1.8x 7.1x 6.1x 17.7x 14.9x Constant Contact % 23.3% 1.7x 1.4x 10.6x 7.7x 26.0x 18.2x Marchex % 53.5% 2.2x 1.8x 13.8x 11.2x NM NM InfoSpace % (5.3%) 0.3x 0.2x 1.8x 1.9x 16.2x 19.0x LBI % 19.6% 0.9x 0.9x 5.2x 5.1x 7.2x 7.5x 1000mercis NA 21.8% 2.4x 2.1x NA NA 10.6x 9.3x TradeDoubler % 2.4% 0.3x 0.3x 5.6x 5.1x 11.2x 9.9x Hi-Media % 0.5x 0.5x 5.9x 5.1x 10.0x 8.2x Sedo % 12.7% 0.4x 0.4x 6.8x 5.9x 18.6x 13.5x ad pepper media (2.3%) 18.2% 0.3x 0.2x NM 4.4x NM 19.5x Mean 12.4% 18.3% 1.1x 1.0x 7.1x 5.8x 14.7x 13.3x Median 14.1% 18.9% 0.7x 0.7x 6.4x 5.1x 13.7x 13.5x Content Providers / Communities LinkedIn 7,258 6, % 111.5% 13.4x 9.1x NM 49.3x NM NM Pandora Media 1,734 1, % 11.9x 6.3x NM NM NM NM WebMD Health 1,727 1, % 10.3% 2.3x 2.1x 6.9x 6.0x 21.8x 20.3x Perform Group % 51.2% 3.9x 3.1x 25.3x 12.5x 42.7x 22.1x Demand Media % 26.9% 1.6x 1.3x 6.1x 4.4x 30.7x 19.1x Mixi % (5.) 2.3x 1.9x 8.9x 7.6x 38.9x 21.2x Meetic % 1.4% 1.7x 1.6x 7.7x7x 7.2x 13.4x 12.3x XING % 23.7% 3.2x 2.7x 10.2x 8.3x 34.1x 21.5x Move % (2.5%) 1.1x 1.0x 8.4x 7.1x 23.6x 15.7x XO Group % 10.4% 1.3x 1.1x 10.0x 7.3x NM 31.7x Mean 19.6% 37.7% 4.3x 3.0x 10.4x 7.5x 29.3x 20.5x Median 18.5% x 2.0x 8.6x 7.3x 30.7x 20.7x Sources: Capital IQ, 23 September 2011; Brokers reports. 9

11 Internet and Digital Media (Continued) Market Enterprise CY2011E EV / Revenue EV / EBITDA P / E Cap ($m) Value ($m) EBITDA Margin Growth CY2011E CY2012E CY2011E CY2012E CY2011E CY2012E Intermediation and Comparison Bankrate 1,627 1, % x 3.7x 14.7x 11.7x NA NA Moneysupermarket % 20.5% 3.0x 2.8x 11.0x 9.8x 17.9x 16.0x Liquidity Services % 17.8% 2.1x 1.9x 14.1x 11.9x 25.9x 28.4x ehealth % (3.7%) 1.0x 1.0x 6.4x 6.1x 34.6x 32.9x Gruppo MutuiOnline % 2.4x 2.1x 5.7x 4.7x 9.5x 7.9x Mean 25.4% 12.1% 2.1x 2.0x 9.3x 8.1x 22.0x 21.3x Median 21.6% 15.8% 2.3x 2.0x 8.7x 7.9x 21.9x 22.2x Online Classifieds Rightmove 2,034 2, % 15.4% 13.4x 11.8x 19.5x 16.8x 27.5x 23.1x SEEK 1,643 1, % 22.1% 5.2x 4.5x 12.1x 10.2x 14.4x 11.9x 51job 1,330 1, % 5.1x 4.1x 12.4x 10.8x 22.0x 17.4x Carsales.au 1,062 1, % 20.4% 6.4x 5.6x 11.7x 10.3x 17.7x 15.5x SouFun % 59.8% 2.4x 1.9x 5.2x 4.3x 9.0x 7.0x Monster % 14.4% 0.8x 0.7x 4.4x 3.3x 18.0x 10.5x LoopNet % 10.6% 6.9x 6.1x 21.9x 17.6x NM 47.3x Dice % 40.7% 3.2x 2.7x 7.7x7x 6.3x 19.0x 14.2x Mean 39.4% 27.6% 4.3x 3.7x 10.8x 9.0x 16.7x 17.7x Median 41.7% 22.1% 5.1x 4.1x 11.7x 10.2x 17.9x 14.2x Chinese Internet Leaders Baidu 43,059 41, % x 12.6x 33.1x 21.7x 42.9x 28.3x Tencent 37,149 35, % 41.6% 8.1x 6.2x 16.2x 12.3x 21.8x 17.1x Sina 5,724 4, % 19.8% 10.3x 8.2x NM 47.6x NM NM Netease 5,452 3, % 35.4% 3.4x 2.9x 6.9x 5.9x 11.4x 10.3x Alibaba 4,535 3, % 19.8% 3.0x 2.6x 9.0x 7.7x 14.9x 12.7x Focus Media 3,571 2, % 30.8% 4.2x 3.5x 10.8x 8.8x 17.1x 13.9x Sohu 2,253 1, % 2.1x 1.6x 5.4x 4.1x 12.0x 9.8x Renren , % 3.6% 59.5% 6.9x x NM 42.3x NM NM Shanda Interactive 1,849 1, % 33.6% 0.9x 0.8x 5.9x 4.0x 26.2x 16.8x SouFun % 59.8% 2.4x 1.9x 5.2x 4.3x 9.0x 7.0x Dangdang % 50.7% 0.3x 0.2x 14.6x 7.0x NM 32.5x Jiayuan % 95.8% 3.0x 2.1x 11.2x 7.3x 29.8x 14.7x Taomee % 33.2% 2.2x 1.7x 5.9x 4.1x 11.2x 10.7x Mean 31.7% 46.3% 5.1x 3.7x 11.3x 13.6x 19.6x 15.8x Median 37.2% 37.6% 3.0x 2.6x 9.0x 7.3x 16.0x 13.9x Online Gambling bwin.party digital entertainment 1,614 1, % 127.7% 1.1x 1.0x 4.8x 4.1x 9.5x 7.6x Betfair 1, % 15.8% 1.6x 1.5x 7.8x 6.3x 22.5x 15.7x Playtech % 31.7% 3.4x 2.6x 6.0x 5.3x 7.8x 7.0x % 14.4% 0.4x 0.4x 3.4x 3.0x 8.2x 7.2x Mean 27.6% 47.4% 1.6x 1.4x 5.5x 4.7x 12.0x 9.4x Median 21.2% 23.8% 1.3x 1.2x 5.4x 4.7x 8.9x 7.4x Interactive Entertainment Activision 13,394 10, % (10.6%) 2.5x 2.3x 7.3x 6.4x 14.9x 12.5x Electronic Arts 7,102 5, % 10.3% 1.3x 1.2x 9.7x 7.5x 27.8x 18.9x Take-Two Interactive Software 1, % (4.6%) 0.9x 0.9x 9.2x 15.2x 16.0x NM Ubisoft Entertainment % 23.2% 0.2x 0.2x 0.6x 0.5x 14.9x 7.4x THQ (0.7%) 22.9% 0.1x 0.1x NM 11.2x NM NM Mean 19.2% 35.6% x x x x 18.4x 13.0x Median % 0.9x 0.9x 8.3x 7.5x 15.5x 12.5x Sources: Capital IQ, 23 September 2011; Brokers reports. 10

12 TTDM Group Overview and Disclosures 1001 Haxall Point 9th Floor Richmond, VA Phone: +1 (804) Fax: +1 (804) Two International Place 24th Floor Boston, MA Phone: +1 (617) Fax: +1 (617) East 9th Street 20th Floor Cleveland, OH Phone: +1 (216) Fax: +1 (216) Brook St London, W1K 4HS United Kingdom Phone: Fax: Our Technology, Telecom & Digital Media (TTDM) Group is dedicated to providing superior merger & acquisition and capital markets advisory services to market leading companies. Our extensive industry knowledge and transaction leadership experience spans the software, digital media, IT services and communications sectors. Our professionals in London, Boston and San Francisco have global relationships with leading technology companies and financial investors. Thoughtful advice, deep experience and technology expertise, creativity and attention to detail from our senior technology bankers have resulted in a track record of consistently exceeding our clients' expectations. Thierry Monjauze Managing Director 63 Brook Street London W1K 4HS United Kingdom Phone: tmonjauze@harriswilliams.com Jeff Bistrong Managing Director Two International Place, 24 th Floor Boston, MA Phone: +1 (617) jbistrong@harriswilliams.com Michael Wilkins Managing Director 575 Market Street, 31 st Floor San Francisco, CA Phone: +1 (415) mwilkins@harriswilliams.com This report has been prepared by Harris Williams & Co. Ltd and approved by Sturgeon Ventures LLP in accordance with Conduct Of Business rules COBS 4 of the FSA Handbook. Harris Williams & Co. Ltd is an authorised representative of Sturgeon Ventures LLP which is Authorised and Regulated by the Financial Services Authority. This report is being made by Harris Williams & Co. Ltd. Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business in the U.S. and Europe, respectively. Harris Williams & Co. ( a member of The PNC Financial Services Group, Inc. (NYSE:PNC), is the premier middle market advisor with a two-decade legacy of sell side excellence serving clients worldwide. The firm is focused exclusively on the middle market providing sell side and acquisition advisory, restructuring advisory, board advisory, private placements and capital markets advisory services. THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS AND COPYRIGHTS OWNED BY THIRD-PARTY INFORMATION PROVIDERS. NONE OF THE THIRD PARTY 222 South Ninth Street INFORMATION PROVIDERS IS ENDORSING THE OFFERING OF, AND SHALL NOT IN ANY WAY BE DEEMED Suite 3350 AN ISSUER OR UNDERWRITER OF, THE SECURITIES, FINANCIAL INSTRUMENTS OR OTHER Minneapolis, MN INVESTMENTS DISCUSSED IN THIS REPORT AND SHALL NOT HAVE ANY LIABILITY OR RESPONSIBILITY FOR ANY STATEMENTS MADE IN THE REPORT OR FOR ANY FINANCIAL STATEMENTS, FINANCIAL Phone: +1 (612) PROJECTIONS OR OTHER FINANCIAL INFORMATION CONTAINED OR ATTACHED AS AN EXHIBIT TO THE Fax: +1 (612) REPORT. FOR MORE INFORMATION ABOUT THE MATERIALS PROVIDED BY SUCH THIRD PARTIES, PLEASE CONTACT US AT The information and views contained in this report were prepared by Harris Williams & Co. Ltd ( Harris Williams ). It is 1600 Market Street not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes 21st Floor only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or Philadelphia, l PA to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable but Harris Williams makes no representation as to the accuracy or completeness of such information. Phone: +1 (267) Fax: +1 (267) Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective 575 Market Street officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial 31st Floor products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams San Francisco, CA judgment and are subject to change without notice. The financial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions using their own independent advisors as they believe Phone: +1 (415) necessary and based upon their specific financial situations and investment objectives. Also, past performance is not Fax: +1 (415) necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams prior written consent. Copyright 2011 Harris Williams & Co., all rights reserved.