Investment Banking Advisors 2013 AWARD WINNER: MIDDLE MARKET USA BANK OF THE YEAR SaaS & Cloud M&A and Valuation Update Q1 2014 BOSTON CHICAGO LONDON LOS ANGELES PHILADELPHIA SAN DIEGO SILICON VALLEY WORLD CLASS WALL STREET EXPERTISE. BUILT FOR THE MIDDLE MARKET. TM 1 1
Table of Contents Section Introduction Research Coverage: SaaS & Cloud Key Takeaways M&A Activity & Multiples M&A Dollar Volume M&A Transaction Volume 2013 Revenue Multiples Revenue Multiples by Segment Highest Revenue Multiple Transactions for 2013 Notable M&A Transactions Most Active Buyers Public Company Valuation & Operating Metrics SaaS & Cloud 120 Public Company Universe Recent IPOs Stock Price Performance 2013 Revenue, EBITDA & P/E Multiples Revenue, EBITDA and EPS Growth Margin Analysis Best / Worst Performers Notable Transaction Profiles Public Company Trading & Operating Metrics Technology & Telecom Team Page 4 5-6 8 9-11 12-13 14 15 16 17-18 20-21 22-24 25 26-28 29-31 32-33 34-35 37-46 48-53 55-57 2 2
Investment Banking Advisors Observations and Introduction Recommendations WORLD CLASS WALL STREET EXPERTISE. BUILT FOR THE MIDDLE MARKET. TM 3 3
Research Coverage: SaaS & Cloud Capstone s Technology & Telecom Group focuses its research efforts on the following market segments: Enterprise SaaS & Cloud Mobile & Wireless Consumer Internet Analytics / Business Intelligence Cloud & IT Infrastructure Cloud Computing / Storage Communication & Collaboration Content Creation & Management Content Delivery Services CRM & Customer Service ERP, Supply Chain & Commerce Finance & Administration Human Resources Licensed Software Leaders Marketing & Advertising Vertical Markets E-Commerce Consumer, IT & Telecom Hardware 4 4
Key Takeaways M&A Activity & Multiples LTM M&A Dollar Volume of $50.2B sets a new 5 year high Private dollar volume slightly outpaces Public though both segments are very strong LTM transaction volume of 680 deals stands just below 2012 peak Q1 saw 180 deals, a slight decrease from Q4 which had 208 Vertical Market solutions constitute roughly one third all transactions with over 200 deals per year since 2011 The Median LTM Revenue Multiple paid for private company targets continue to grow, reaching 4.0x in LTM and remaining well above 2011 and 2012 levels Hot companies and sectors can see double digit revenue multiple exits but those are the exception with most companies being acquired at more modest multiples The Median LTM Revenue Multiple paid for public company targets above $100M remained consistent at 3.2x Fewer low multiple sub $100M deals boosted the overall LTM revenue multiple to 2.8x Notable M&A transactions in Q1 Advent / Nets($3.1B) Verint / Kana($514M) Infor / PeopleAnswers($200M) Thoma Bravo / TravelClick($930M) Oracle / Bluekai($400M) Wolters Kluwer / Datacert($180M) Verisk Analytics / Eagleview($650M) Equifax / TDX($327M) Renova / Octo($547M) Comcast / Freewheel($320M) The most active buyers include Oracle, IBM, Vista Equity Partners, Cisco, Google, Thoma Bravo, Genesys, Twitter and VMWare Capstone expects the robust M&A activity and attractive exit valuations to continue in SaaS & Cloud in 2014 There is some risk that a market correction could negatively impact activity levels and valuation multiples 5 5
Key Takeaways Public Company Metrics Q1 14 saw 15 SaaS & Cloud IPOs added to the SaaS & Cloud 120 Universe Public offerings performed universally well, opening well above offer prices with strong early momentum Median performance for the SaaS & Cloud 120 is slightly below the SDAQ in LTM and Q1 Q1 saw the SaaS & Cloud 120 median stock price decrease by 2.9% compared to a slight gain in the SDAQ Median LTM Revenue Multiple of 5.3x matches the five year high as the market momentum continues Medians range from 9.0x for Human Resources to a low of 1.6x for Content Delivery Services Median EBITDA multiple rose sharply in LTM and currently stands at 18.9x ERP, CRM & Customer Service and Finance & Administration trade at over 40x Median P/E multiples continue to rebound and now stand at a five year high of 28.8x for LTM CRM & Customer Service, ERP, Supply Chain & Commerce and Human Resources segments trade at medians of more than 50x earnings SaaS & Cloud 120 posted median revenue growth of 18.0% in LTM with growth expected to slow slightly to a still strong 17.6% in NTM The slow down in growth is driven largely by improved prior year numbers, as high growth rates are more difficult to maintain with a SaaS-based model as companies reach greater scale LTM Median EBITDA growth of 8.3% is down from 10.5% in 2013 but is expected to increase to 11.8% in NTM More than half of the segments are expected to achieve greater than 10% EBITDA growth for NTM Median gross margins have stayed relatively constant at 68.4% Content Creation & Management and Cloud & IT Infrastructure top the list at over 80% as newly emerging technologies that enable the cloud to run more efficiently command strong margins Median EBITDA margin dropped slightly to 15.7% as companies reinvest commensurate with growth 6 6
Investment Banking Advisors M&A Observations Activity & and Multiples Recommendations WORLD CLASS WALL STREET EXPERTISE. BUILT FOR THE MIDDLE MARKET. TM 7 7
LTM M&A Dollar Volume LTM M&A Dollar Volume of $50.2B sets a new 5 year high Private dollar volume slightly outpaces Public though both segments are very strong 8 8
LTM M&A Transaction Volume by Segment LTM transaction volume of 680 deals stands just below 2012 peak Q1 saw 180 deals, a slight decrease from Q4 which had 208 Vertical Market solutions constitute roughly one third all transactions with over 200 deals per year since 2011 9 9
LTM M&A Transaction Volume by Deal Size Private Targets Private company deal volume remains healthy with deal mix shifting towards the higher end in recent periods Median deal value stayed constant at its five year high of $25M in LTM 10 10
LTM M&A Transaction Volume by Deal Size Public Targets Public transaction volume has fallen LTM to its lowest level in five years, though median deal value jumped Median deal size of $399M LTM represents a five year high Nearly half of LTM deals were over $500M 11 11
Median LTM Revenue Multiples Private Targets The Median LTM Revenue Multiple paid for private company targets continue to grow, reaching 4.0x in LTM and remaining well above 2011 and 2012 levels Hot companies and sectors can see double digit revenue multiple exits but those are the exception with most companies being acquired at more modest multiples 12 12
Median LTM Revenue Multiples Public Targets The Median LTM Revenue Multiple paid for public company targets above $100M remained consistent at 3.2x Fewer low multiple sub $100M deals boosted the overall LTM revenue multiple to 2.8x With less than 25 public company target data points in a given year, the median multiple shows volatility, making it difficult to draw reliable conclusions on M&A valuation trends based on the data 13 13
Median LTM Revenue Multiples by Segment 2009 to Current Median Revenue Multiples for SaaS segments vary from 2.3x to 4.5x Analytics/Business Intelligence, Finance & Administration and Content Creation & Management targets achieved median multiples of 4.0x or more as these companies are often acquired earlier in their revenue curve at strong multiples Cloud Computing/Storage and Vertical Market Software multiples lag as many acquisition targets have been unable to create highly differentiated products that command premium valuations 14 14
Highest Revenue Multiple Transactions for LTM Ann. Date Buyer Target Segment Target Description Enterprise Value LTM Revenue Multiple Multiple on $ Invested Premium to 1 Mo Prior 8/15/13 Cloud & IT Infrastructure Provides financial anti-fraud software and SaaS to businesses globally $900M 25.7x 90.0x 11/19/13 Cloud Computing / Storage Provides cloud hosting, platform as a service (PaaS) and infrastructure as a service (IaaS) and server provisioning and cloud management software for medium and large businesses and SaaS providers $150M 18.8x 8.1x 6/27/13 Marketing & Advertising Provides marketing automation, social media marketing, mobile marketing, customer analytics and campaign management software to businesses globally $600M 10.3x 17.9x 1/6/14 Content Delivery Services Provides cloud-based video content delivery and advertising enablement software for Web publishers and content providers $49M 9.8x 3/2/14 Marketing & Advertising Operates an online advertising network for TV networks and video content distributors $320M 9.1x 8.7x 7/23/13 Cloud & IT Infrastructure Provides intelligent cybersecurity technologies worldwide $2.39B 8.9x 43.7% 8/20/13 Cloud & IT Infrastructure Provides cloud-based intrusion detection, vulnerability assessment and security log management for businesses $300M 8.3x 6.3x 12/20/13 Marketing & Advertising Provides email marketing campaign design, management and analytics software and SaaS for businesses $1.6B 8.2x 66.3% 6/4/13 Marketing & Advertising Provides email, mobile and social media marketing campaign creation, management and delivery software as a service (SaaS) for businesses $2.4B 7.6x 58.2% 10/17/13 Marketing & Advertising Provides multi-channel Web-based content marketing SaaS for businesses $15M 7.5x 3.9x Excludes deals with Target company revenue less than $2M 15 15
Notable M&A Transactions for Q1 14 Ann. Date Buyer Target Segment Target Description Deal Value LTM Revenue Multiple Multiple on $ Invested Premium to 1 Mo Prior 3/24/14 Cloud & IT Infrastructure Provides payment card transaction processing services for businesses and banks in Europe $3.1B 3/18/14 Vertical Market Hospitality Provides cloud-based online booking, reservations management, property marketing and business intelligence reporting SaaS the hotel and hospitality industry $930M 1/14/14 Vertical Market Construction Provides online aerial 3D roof and wall measurement report data for the insurance and construction industries in US $650M 5.3x 2/5/14 Vertical Market Diversified Manufactures vehicle telematics hardware and Web-based analytics and reporting software for auto insurance companies and enterprise fleet managers $547M 3.3x 1/6/14 CRM & Customer Service Provides customer service management software and SaaS for businesses and government agencies globally $514M 3.8x 12.5x 2/24/14 Marketing & Advertising Provides data management, marketing automation and analytics SaaS for marketers, publishers, advertising agencies and data providers $400M 6.3x 9.5x 1/16/14 Finance & Administration Provides debt collection and revenue management SaaS for the energy, financial services, public sector, healthcare, telecoms and debt collection agencies globally $327M 3.7x 3/2/14 Marketing & Advertising Operates an online advertising network for TV networks and video content distributors $320M 9.1x 8.7x 1/8/14 Human Resources Provides employee and job applicant assessment SaaS for businesses that analyzes employee performance $200M 5.0x 2/26/14 ERP, Supply Chain & Commerce Provides general ERP and case management software, SaaS and services for corporate legal and compliance departments $180M 3.2x 14.4x 16 16
Most Active SaaS/Cloud Buyers Last 2 Years # of Deals SaaS/Cloud Transactions Company SaaS/Cloud Total Date Company Value Date Company Value 14 19 2/24/14 12/20/13 11/18/13 10/23/13 10/17/13 3/13/13 12/20/12 BlueKai Responsys Bitzer Mobile BigMachines Compendium Nimbula Eloqua $400M $1.7B $15M $956M 11/8/12 9/17/12 7/30/12 7/19/12 7/10/12 6/5/12 5/23/12 Instantis SelectMinds Xsigo Systems Skire Involver Collective Intellect Vitrue $220M $325M 12 22 2/24/14 11/13/13 9/19/13 8/15/13 7/9/13 6/4/13 Cloudant Fiberlink Communications Daeja Image Systems Trusteer CSL International SoftLayer Technologies $150M $300M $20M $2.0B 4/22/13 2/1/13 9/24/12 8/27/12 5/2/12 4/13/12 Starbelly Productions Star Analytics Butterfly Software Kenexa TeaLeaf Technology Varicent Software $1.4B $500M $172M 10 23 3/28/14 9/30/13 8/23/13 7/23/13 7/22/13 PeopleAdmin The Active Network Omnitracs Digital Technology International Saxotech $1.1B $800M 5/20/13 8/7/12 6/14/12 5/22/12 5/15/12 Websense Consona Bullhorn Silverchair Learning Systems Essential Learning $1.1B 9 21 12/17/13 7/23/13 6/20/13 3/25/13 11/18/12 Kibits Sourcefire Composite Software SolveDirect Meraki $2.4B $180M $21M $1.2B 11/15/12 10/4/12 9/26/13 5/3/12 Cloupia vcider ThinkSmart Technologies Truviso $125M $4M $20M 7 38 2/6/13 1/17/13 11/28/12 9/7/12 Channel Intelligence SurveyMonkey.com Incentive Targeting VirusTotal $125M $794M 7/31/12 6/5/12 6/4/12 Wildfire Interactive Quickoffice Meebo $350M $100M 17 17
Most Active SaaS/Cloud Buyers Last 2 Years # of Deals SaaS/Cloud Transactions Company SaaS/Cloud Total Date Company Value Date Company Value 7 25 3/27/14 3/18/14 2/5/14 10/9/13 Sohnar TravelClick Global Healthcare Exchange Empirix $930M 7/15/13 7/1/13 6/24/13 Acumen Intuit (IFS Division) Keynote Systems $1.0B $399M 6 8 3/18/14 1/20/14 12/2/13 Solariat Ventriloquist Voran 10/8/13 2/26/13 1/29/13 Echopass Angel.com UTOPY $110M 6 17 3/31/14 3/31/14 8/28/13 Mesagraph SecondSync Trendrr 2/4/13 5/10/12 4/16/12 Bluefin Labs RestEngine Hotspots $67M 6 7 10/15/13 2/11/13 7/23/12 Desktone Virsto Nicira Networks $185M $2.3B 7/2/12 5/22/12 4/24/12 DynamicOps Wanova Cetas Software 18 18
Investment Banking Advisors Public Company Observations and Valuation & Recommendations Operating Metrics WORLD CLASS WALL STREET EXPERTISE. BUILT FOR THE MIDDLE MARKET. TM 19 19
Enterprise SaaS & Cloud 120 Public Company Universe Pt. 1 Analytics / Business Intelligence Cloud & IT Infrastructure Cloud Computing / Storage Communication & Collaboration Content Creation & Management Content Delivery Services CRM & Customer Service 20 20
Enterprise SaaS & Cloud 120 Public Company Universe Pt. 2 ERP, Supply Chain & Commerce Finance & Administration Human Resources Licensed Software Leaders Marketing & Advertising Vertical Markets 21 21
Recent IPOs Amber Road IPO Details Offering Date: 3/20/13 Market Cap: $323.6M Offering Price: $13.00 Offering Size: $96.1M Original Range: $10.50-$12.50 % of Company: 29.7% IPO Performance Open: $17.50 3/31 $/share: $15.40 % Change to Offer: 34.6% % Change to Offer: 18.5% Close: $17.00 % Change to Open: (12.0)% % Change to Offer: 30.8% % Change to Open: (2.9)% Business Description Provides on-demand Global Trade Management (GTM) software and solutions worldwide. The company enables goods to flow unimpeded across international borders in the most efficient, compliant and profitable way. HQ: East Rutherford, NJ Ticker: NYSE: AMBR Stock Performance thru End of Q1 14 Financial & Valuation Metrics LTM Revenue: $52.5M 12-13 Rev Growth: 21.1% LTM EBITDA: $(11.7M) Gross Margin: 57.6% LTM Net Income: $(14.4M) EBITDA Margin: (22.3)% Mkt Cap / $ Invested: N/A Rev Multiple: 7.4x Investors Cross Atlantic Capital Partners; Goldman Sachs Private Capital Investing; Megunticook Management; NJTC Venture Fund; Updata Partners 22 22
Recent IPOs Borderfree IPO Details Offering Date: 3/21/13 Market Cap: $487.6M Offering Price: $16.00 Offering Size: $80.0M Original Range: $14.00-$16.00 % of Company: 16.4% IPO Performance Open: $20.37 3/31 $/share: $18.64 % Change to Offer: 27.3% % Change to Offer: 16.5% Close: $19.26 % Change to Open: (8.5)% % Change to Offer: 20.4% % Change to Open: (5.4)% Business Description Provides cross-border ecommerce solutions; operates a technology and services platform that enables U.S. retailers to transact with consumers in more than 100 countries worldwide. HQ: New York, NY Ticker: NasdaqGS: BRDR Stock Performance thru End of Q1 14 Financial & Valuation Metrics LTM Revenue: $110.5M 12-13 Rev Growth: 35.7% LTM EBITDA: $1.4M Gross Margin: 23.6% LTM Net Income: $(0.7M) EBITDA Margin: 1.2% Mkt Cap / $ Invested: N/A Rev Multiple: 4.7x Investors Adams Street Partners; Arko Holdings; Canaan Partners; Canopy Capital Partners; Delta Ventures; Delta-v Capital 2009 Holdings; On-Line Ventures; Pitango Venture Capital; Poalim Ventures; Vintage Investment Partners; Viola Credit; VSP Capital 23 23
Recent IPOs Q2 Holdings IPO Details Offering Date: 3/19/13 Market Cap: $415.3M Offering Price: $13.00 Offering Size: $100.9M Original Range: $11.00-$13.00 % of Company: 24.3% IPO Performance Open: $16.25 3/31 $/share: $15.53 % Change to Offer: 25.0% % Change to Offer: 19.5% Close: $15.17 % Change to Open: (4.4)% % Change to Offer: 16.7% % Change to Open: (6.6)% Business Description Provides cloud-based virtual banking solutions to regional and community financial institutions (RCFIs) in the United States. HQ: Austin, TX Ticker: NYSE: QTWO Stock Performance thru End of Q1 14 Financial & Valuation Metrics LTM Revenue: $56.9M 12-13 Rev Growth: 38.4% LTM EBITDA: $(13.1) Gross Margin: 38.2% LTM Net Income: $(17.9M) EBITDA Margin: (22.9)% Mkt Cap / $ Invested: 20.8x Rev Multiple: 8.5x Investors Adams Street Partners; Battery Ventures; C&B Capital 24 24
Median Stock Performance SaaS & Cloud 120 Median performance for the SaaS & Cloud 120 is slightly below the SDAQ in LTM and Q1 Q1 saw the SaaS & Cloud 120 median stock price decrease by 2.9% compared to a flat SDAQ CRM & Customer Service posted a median decline of 23.7% for the quarter as egain, Jive and LivePerson all fell over 18% 25 25
Median LTM Revenue Multiples SaaS & Cloud 120 Median LTM Revenue Multiple of 5.3x matches the five year high as the market momentum continues Within SaaS & Cloud, median multiples vary considerably between segments Human Resources, Content Creation & Management, ERP, Supply Chain & Commerce, Cloud & IT Infrastructure and Finance & Administration segments command median multiples of more than 7x Content Delivery Services LTM Revenue multiple lags at 1.6x and represents the lowest multiple within SaaS & Cloud 120 primarily due to its lower margin profile 26 26
Median LTM EBITDA Multiples SaaS & Cloud 120 Median EBITDA multiple rose sharply in LTM and currently stands at 18.9x Five of the SaaS & Cloud segments are trading at medians above 25x LTM EBITDA ERP, CRM & Customer Service and Finance & Administration trade at over 40x The premium multiples for SaaS companies versus Licensed Software Leaders illustrates higher expected growth rates and the market s preference for the more predictable recurring revenue business model 27 27
Median LTM P/E Multiples SaaS & Cloud 120 Median P/E multiples continue to rebound and now stand at a five year high of 28.8x for LTM P/E multiples continue to rise from 2011 as investors increasingly focus on future profitability to value companies CRM & Customer Service, ERP, Supply Chain & Commerce and Human Resources segments trade at medians of more than 50x earnings The next seven segments trade within a tight range of medians of 28-35x earnings 28 28
Median Revenue Growth SaaS & Cloud 120 SaaS & Cloud 120 posted median revenue growth of 18.0% in LTM with growth expected to slow slightly to a still strong 17.6% in NTM The slow down in growth is driven largely by improved prior year numbers, as high growth rates are more difficult to maintain with a SaaS-based model as companies reach greater scale Licensed Software Leaders project just 5.5% growth, reinforcing the market shift towards SaaS-based solutions 29 29
Median EBITDA Growth SaaS & Cloud 120 LTM Median EBITDA growth of 8.3% is down from 10.5% in 2013 but is expected to increase to 11.8% in NTM EBITDA growth drop from 2011 high is more related to stronger prior period performance and increased OpEx spend than a weakening in total profit dollars More than half of the segments are expected to achieve greater than 10% EBITDA growth for NTM Most of the Human Resources companies are investing heavily in growth and not yet solidly profitable 30 30
Median EPS Growth SaaS & Cloud 120 Median EPS growth decreased to 11.3% in LTM and is expected to remain flat at 11.1% in NTM Improved prior period profits coupled with a return to investment in growth after several years of cost cutting results in lower EPS growth than prior periods Content Creation & Management, CRM & Customer Service and Marketing & Advertising project over 20% EPS growth NTM 31 31
Median Gross Margin Trends SaaS & Cloud 120 Median gross margins have stayed relatively constant and now stand at 68.4% Content Creation & Management and Cloud & IT Infrastructure top the list at over 80% as newly emerging technologies that enable the cloud to run more efficiently command strong margins The Finance & Administration segment median is being driven down by Xero which has not yet reached scale while some of the ad networks in the Marketing & Advertising segment are facing pricing pressure 32 32
Median EBITDA Margin Trends SaaS & Cloud 120 Median EBITDA margin dropped slightly to 15.7% as companies reinvest commensurate with growth Several high growth companies in Human Resources and ERP, Supply Chain & Commerce continue to invest heavily in sales and marketing and are early in the process of achieving scale and profitability The License Software Leaders and other more mature segments like Cloud Computing / Storage already have operating leverage 33 33
Best & Worst Performers SaaS & Cloud 120 34 34
Best & Worst Performers SaaS & Cloud 120 (Continued) 35 35
Investment Banking Advisors Notable Observations and Transaction Recommendations Profiles WORLD CLASS WALL STREET EXPERTISE. BUILT FOR THE MIDDLE MARKET. TM 36 36
M&A Transaction Spotlight Acquiror Deal Summary Date: 3/24/2014 Transaction Value: $3.1B % Sought: 100% Consideration: Cash Valuation Metrics Trailing Revenue Multiple: Trailing EBITDA Multiple: 12.3x Multiple on $ Invested: Target Deal Rationale/Commentary Nets is a leading Northern European provider of payments, information and digital identity solutions. The company handles payments in five Nordic countries, supporting more than 33 million payment credit cards and processed over 6 billion card transactions in 2013. Advent International and Bain Capital, along with Danish pension fund ATP, jointly agreed to purchase Nets Holding. Advent and Bain already jointly own British payment processing company WorldPay. The buyers mentioned they expect to provide Nets on a local exchange expanding into Northern Europe, but they did not disclose any information on merging Nets and WorldPay together. Persons familiar with the deal noted Nets had a trailing EBITDA of around $254.9 million which put the deal value of $3.1 billion at 12.3 times trailing EBITDA. The buyout is likely to be backed with a debt-financing package totaling between 6 and 7 times Net s trailing EBITDA. Investors 37 37
M&A Transaction Spotlight Acquiror Deal Summary Date: 3/18/2014 Transaction Value: $930M % Sought: 100% Consideration: Cash Valuation Metrics Trailing Revenue Multiple: 3.1x Trailing EBITDA Multiple: Multiple on $ Invested: Investors Bain Capital Ventures; Genstar Capital Target Deal Rationale/Commentary TravelClick provides cloud-based online booking, reservations management, property marketing and business intelligence reporting SaaS for hoteliers globally. The company has over 37,000 clients across 150 countries and is the prominent B2B travel software provider in the hoteliers space. The acquisition of TravelClick marks Thoma Bravo s third acquisition and one of two vertically focused SaaS acquisitions since the beginning of 2014. Thoma Bravo most recently acquired Global Healthcare Exchange in February 2014, which provided a supply chain SaaS for hospitals. This deal comes as the hotel industry has seen solid growth in its occupancy and hotel rates as well as an increasing interest by investors in travel-related startups worldwide. As a result, investors have placed substantial bets on early consumeroriented companies such as Airbnb, GetYourGuide, HotelTonight, HouseTrip, Hotel Urbano, Ostrovok, Room 77, Tuniu, Wimdu, WorldMate and 17u.cn. Chief Executive, Larry Kutscher, said TravelClick had around $300 million in revenue last year and would be solidly above that figure in 2014. At a value of $930 million, persons familiar with the deal indicate that investor Genstar could realize an approximate 3 times return on investment, equating to a 25% net internal rate of return. 38 38
M&A Transaction Spotlight Acquiror Deal Summary Date: 1/14/2014 Transaction Value: $650M % Sought: 100% Consideration: Cash Valuation Metrics Trailing Revenue Multiple: 5.3x Trailing EBITDA Multiple: 29.1x Multiple on $ Invested: Target Deal Rationale/Commentary EagleView Technologies provides online aerial 3D roof and wall measurement report data for the insurance and construction industries in the US. They also provide online construction project cost estimation software. Verisk Analytics provides risk assessment and management services and software for the financial, healthcare and insurance sectors. With its acquisition of EagleView, they now have an image library which encompasses roughly 90% of US structures. Verisk Analytics has been actively acquiring companies since its IPO in 2009. The purchase of EagleView marks it its seventh transaction since 2010. Verisk CEO Scott Stephenson mentioned, the purchase of EagleView advances our position in the imagery analytics market, adding new municipal and commercial customers. At a deal value of $650 million, the all cash deal equates to 5.3 times trailing revenues and 29.1 times trailing EBITDA. Spectrum Equity Investors Investors 39 39
M&A Transaction Spotlight Acquiror Deal Summary Date: 2/5/2014 Transaction Value: $547M % Sought: 100% Consideration: Cash Valuation Metrics Trailing Revenue Multiple: 3.3x Trailing EBITDA Multiple: Multiple on $ Invested: Target Deal Rationale/Commentary Octo Telematics manufactures vehicle telematics hardware and Web-based analytics and reporting software for auto insurance companies and enterprise fleet managers. Its systems enable the monitoring and remote reporting of mileage, speed and handling of a vehicle by the driver while out in the field. Renova Group is a Russian private equity firm focusing its investments in businesses in Russia in the mining, energy, life sciences and telecommunications industry. The acquisition of Octo will augment its Russian satellite navigation system GLOSS and Renova claims it will focus primairly on the penetration of Octo s technology offerings within the Russian market. The all-cash transaction of $547 million equates to 3.3 times trailing revenues. Investors Amadeus Capital Partners; Charme II, Keensight Capital; Montezemolo & Partners 40 40
M&A Transaction Spotlight Acquiror Deal Summary Date: 1/6/2014 Transaction Value: $514M % Sought: 100% Consideration: Cash Valuation Metrics Trailing Revenue Multiple: 3.8x Trailing EBITDA Multiple: 14.3x Multiple on $ Invested: 12.5x Investors Accel-KKR Target Deal Rationale/Commentary KA provides customer service management software and SaaS for businesses and government agencies worldwide. Their software includes features for call center, email response and live chat management. In 2009, Accel-KKR, a technology focused PE firm, took KA private in an all-cash $41 million deal and through the proceeding years provided resources for the company to acquire 4 different companies. Verint was founded in 1994 and provides contact center engagement analytics, customer surveying, and employee training and workforce management software businesses globally. The acquisition of KA will add key customer relationship management capabilities such as mining emails and web conversations to analyze and maintain customer relations. The deal value at $514 million equates to 3.8 times KA s trailing revenues and 14.3 times trailing EBITDA. Accel-KKR enjoyed a hefty multiple on investment of 12.5 times. After the announcement of the deal, Verint s share price rose 9% to close an all-time high of $46.32. 41 41
M&A Transaction Spotlight Acquiror Deal Summary Date: 2/24/2014 Transaction Value: $400M (*) % Sought: 100% Consideration: Cash Target Deal Rationale/Commentary BlueKai provides data management, marketing automation and analytics SaaS for marketers, publishers, advertising agencies and data providers. In addition, BlueKai operates the world s largest 3 rd party data marketplace that enables businesses to buy and sell Internet user data for the purposes of marketing. Its cloud-based big data platform enables companies to personalize online, offline and mobile marketing campaigns with richer and more actionable information about targeted audiences. (*) Estimate from Capstone research & industry sources Valuation Metrics Trailing Revenue Multiple: 6.3x Multiple on $ Invested: 9.5x (*) (*) Estimate from Capstone research & industry sources Investors Battery Ventures; GGV Capital; Redpoint Ventures Oracle continues its aggressive acquisition spree with its purchase of BlueKai to augment its Oracle Marketing Cloud and Oracle Customer Experience Cloud services. BlueKai s data management technology will tie in with Responsys B2C marketing automation along with Eloqua s B2B marketing automation services. Marketing automation companies continue to be acquired by software giants such as Oracle, Salesforce and Adobe and we expect this trend to carry on. The terms of the deal weren t disclosed, but various analysts speculate the deal value was around $400 million. BlueKai raised $41.8 million in funding, with the deal value representing an aggregate 9.5 times total dollars invested. 42 42
M&A Transaction Spotlight Acquiror Deal Summary Date: 1/16/2014 Transaction Value: $327M % Sought: 100% Consideration: Cash Valuation Metrics Trailing Revenue Multiple: 3.7x Deal Value Per Employee: $948K Multiple on $ Invested: N/A Target Deal Rationale/Commentary TDX Group provides debt collection and revenue management SaaS for the energy, financial services, public sector, healthcare, telecommunication and debt collection agencies. The company was founded in 2004 and is based in Nottingham, UK. Equifax provides online consumer credit reporting, fraud prevention and risk management services for consumers and businesses globally. With its acquisition of TDX, Equifax will able to leverage TDX s technology and platforms to further expand its collections segment and gain a bigger footprint in the UK. The $327 million deal value equates to 3.7 times trailing revenues. Investors Investcorp Technology Partners 43 43
M&A Transaction Spotlight Acquiror Deal Summary Date: 3/2/2014 Transaction Value: $320M % Sought: 100% Consideration: Cash Valuation Metrics Trailing Revenue Multiple: 9.1x Multiple on $ Invested: 8.7x Target Deal Rationale/Commentary FreeWheel Media operates an online advertising network for TV networks and video content distributors. The company has been gaining popularity from TV networks that supply content online as their go-to ad serving platform. The company has an astonishing client base including Amazon, ESPN, Vevo, NBC Universal, etc. Comcast provides cable television, broadband internet and VoIP services for consumers and businesses. In an age where targeted advertising has become the dominant form of marketing, Comcast s strategic acquisition of FreeWheel Media will enable them to regain an edge with video related advertisements. The video ad space has been very active with Tremor Video and YuMe going public in the Summer of 2013 and Adap.tv getting acquired by AOL for $405 million last September. The key players that remain as private companies in the space are LiveRail and BrightRoll. Investors 44 44
M&A Transaction Spotlight Acquiror Deal Summary Date: 1/8/2014 Transaction Value: $200M % Sought: 100% Consideration: Cash Valuation Metrics Trailing Revenue Multiple: 5.0x Multiple on $ Invested: N/A Target Deal Rationale/Commentary PeopleAnswers provides employee and job applicant assessment SaaS for businesses that analyze employee performance. Their software establishes a baseline profile using behavioral science during initial interviews and then measures employees performances against their profiles throughout their employment. PeopleAnswers approach stops job applicants from giving answers employers want to hear by testing their general behavioral traits through a series of algorithmically generated questions. Infor provides various enterprise software and services globally. The acquisition of PeopleAnswers will significantly bolster its HR offerings and will be incorporated into its Human Capital Management software suite. The $200 million all-cash deal was valued at approximately 5 times trailing revenue. Investors 45 45
M&A Transaction Spotlight Acquiror Deal Summary Date: 2/26/2014 Transaction Value: $180M % Sought: 100% Consideration: Cash Valuation Metrics Trailing Revenue Multiple: 3.2x Multiple on $ Invested: 14.4x Investors Target Deal Rationale/Commentary Datacert provides enterprise legal management software, SaaS and services for corporate legal and compliance departments. The company has been recognized as one of the top providers of enterprise legal management software and services along with TyMetrix by Gartner s Magic Quadrant. Wolters Kluwer provides budgeting and forecasting, invoice and document management software for businesses in the legal sector. Wolters Kluwer had previously invested $17 million into Third Coast Holdings, the parent company of Datacert, and this transaction marked its acquisition of all of Third Coast Holding s remaining stake. Wolters Kluwer currently owns the above mentioned enterprise legal management software provider TyMetrix and it plans to combine the two businesses in the near future. Datacert had generated $57 million in revenues for the 2013 calendar year, and the $180 million deal value equates to 3.2 times trailing revenues. 46 46
Investment Banking Advisors Public Company Observations and Trading & Operating Recommendations Metrics WORLD CLASS WALL STREET EXPERTISE. BUILT FOR THE MIDDLE MARKET. TM 47 47
Trading & Operating Metrics ($ in millions, except per share data) $/Share Market Enterprise % Change Ent. Value/Rev. Ent. Value/EBITDA Price/EPS NTM / LTM Growth LTM Margin Company Name 3/31/14 Cap Value Cash Debt LTM LQ LTM NTM LTM NTM LTM NTM Revenue EBITDA EPS Gross EBITDA Net SaaS & Cloud 120 Mean 17,238 16,502 2,872 2,135 39.5 % (2.5)% 10.1 x 6.4 x 31.9 x 21.8 x 40.5 x #VALUE! 25.0% 18.6% 12.5% 64.7 % 6.0 % (20.0)% SaaS & Cloud 120 Median 1,158 1,085 98 6 27.7 % (2.9)% 5.3 x 4.4 x 18.9 x 15.4 x 28.8 x 17.6% 11.8% 11.1% 68.4 % 15.7 % 6.7 % Analytics / Business Intelligence Adobe 65.74 32,721 31,098 3,132 1,510 51.1 % 9.8 % 7.7 x 7.3 x 28.4 x 26.1 x 50.6 x 51.5 x 5.0% 8.8% (1.8)% 85.7 % 27.0 % 16.5 % Bazaarvoice 7.30 538 481 57 0 (0.3)% (7.8)% 2.7 x 2.5 x 6.6% 2.1% 22.4% 68.3 % (8.0)% (11.1)% comscore 32.79 1,133 1,089 68 24 95.4 % 14.6 % 3.8 x 3.4 x 18.1 x 17.0 x 29.3 x 27.5 x 12.9% 6.5% 6.5% 68.6 % 20.9 % 13.4 % Hottlink 17.19 167 158 9 0 (61.4)% 17.7 x 12.9 x 61.0 x 49.4 x 36.5% 23.5% 63.1 % 29.0 % 1.9 % Mattersight 6.93 132 122 13 3 61.5 % 44.7 % 3.6 x 3.4 x 3.5% (39.1)% 68.6 % (2.3)% (16.0)% Splunk 71.49 8,429 7,532 897 0 78.6 % 4.1 % 24.9 x 18.6 x 33.9% 88.9 % 1.8 % (1.4)% Mean 7,187 6,747 696 256 57.3 % 0.7 % 10.0 x 8.0 x 35.9 x 30.9 x 39.9 x 39.5 x 16.4% 10.2% (3.0)% 73.9 % 11.4 % 0.6 % Median 836 785 62 1 61.5 % 6.9 % 5.7 x 5.4 x 28.4 x 26.1 x 39.9 x 39.5 x 9.8% 7.7% 2.3% 68.6 % 11.4 % 0.3 % Cloud & IT Infrastructure Citrix 57.44 10,555 9,820 735 0 (20.4)% (9.2)% 3.4 x 3.1 x 11.8 x 10.9 x 19.0 x 19.7 x 9.1% 8.5% (3.6)% 86.1 % 28.5 % 19.5 % Covisint 7.33 275 220 55 0 (41.6)% 2.2 x 2.2 x 2.3% 13.2% 44.5 % (17.0)% (14.6)% FireEye 61.57 8,875 8,701 174 0 41.2 % 53.9 x 21.4 x 152.0% (94.8)% 56.9% 70.4 % (74.9)% (133.1)% LogMeIn 44.89 1,087 897 190 0 133.6 % 33.8 % 5.4 x 4.4 x 24.6 x 20.8 x 81.6 x 47.7 x 22.6% 18.2% 71.2% 88.7 % 22.0 % 8.1 % Proofpoint 37.08 1,363 1,267 252 155 119.9 % 11.8 % 9.2 x 7.2 x 27.3% (47.7)% 69.9 % (3.1)% (8.3)% Qualys 25.43 825 729 97 1 106.1 % 10.0 % 6.8 x 5.6 x 46.0 x 33.9 x 127.2 x 107.6 x 20.0% 35.9% 18.2% 77.2 % 14.7 % 6.7 % Rally Softw are 13.38 327 238 89 0 (31.2)% 3.2 x 2.6 x 24.2% (204.1)% (23.8)% 77.6 % (16.1)% (33.6)% Red Hat 52.98 10,042 9,060 982 0 4.8 % (5.5)% 5.9 x 5.2 x 21.4 x 18.7 x 35.8 x 34.2 x 13.9% 14.4% 4.8% 84.8 % 27.5 % 18.5 % ServiceNow 59.92 8,455 8,235 635 415 65.5 % 7.0 % 19.4 x 12.8 x 51.7% 81.4% 63.4 % 5.5 % (2.6)% SolarWinds 42.63 3,203 3,058 185 40 (27.9)% 12.7 % 9.1 x 7.4 x 18.3 x 15.8 x 26.2 x 26.5 x 23.9% 15.7% (1.2)% 91.7 % 50.0 % 37.2 % Splunk 71.49 8,429 7,532 897 0 78.6 % 4.1 % 24.9 x 18.6 x 33.9% 88.9 % 1.8 % (1.4)% VMw are 108.02 46,533 40,808 6,175 450 36.9 % 20.4 % 7.8 x 6.8 x 20.4 x 18.9 x 32.0 x 30.5 x 15.9% 7.8% 4.6% 86.0 % 38.5 % 28.1 % WANdisco 17.33 410 384 26 0 42.3 % (14.9)% 47.9 x 26.0 x 84.5% 19.3% (1.8)% 80.3 % (209.9)% (244.9)% Mean 7,721 6,996 807 82 53.9 % 3.0 % 15.3 x 9.5 x 23.7 x 19.8 x 53.6 x 44.4 x 37.0% (9.8)% 8.2% 77.6 % (10.2)% (24.7)% Median 3,203 3,058 190 0 53.9 % 7.0 % 7.8 x 6.8 x 20.9 x 18.8 x 33.9 x 32.4 x 23.9% 15.0% 4.6% 80.3 % 5.5 % (1.4)% *Sorted alphabetically within market segment 48 48
Trading & Operating Metrics ($ in millions, except per share data) $/Share Market Enterprise % Change Ent. Value/Rev. Ent. Value/EBITDA Price/EPS NTM / LTM Growth LTM Margin Company Name 3/31/14 Cap Value Cash Debt LTM LQ LTM NTM LTM NTM LTM NTM Revenue EBITDA EPS Gross EBITDA Net Cloud Computing / Storage Amazon 336.37 154,481 148,170 12,447 6,136 26.2 % (15.7)% 2.0 x 1.6 x 21.5 x 20.7% 32.6% 27.2 % 7.0 % 0.4 % CenturyLink 32.84 18,980 39,778 168 20,966 (6.5)% 3.1 % 2.2 x 2.2 x 5.4 x 5.6 x 11.9 x 13.2 x (0.7)% (4.5)% (10.1)% 61.1 % 41.1 % 9.2 % IBM 192.49 200,448 229,113 11,066 39,731 (9.8)% 2.6 % 2.3 x 2.3 x 8.8 x 8.3 x 11.3 x 10.8 x (0.4)% 6.3% 4.7% 48.6 % 26.1 % 18.8 % Microsoft 40.99 340,247 280,846 83,135 23,734 43.3 % 9.6 % 3.4 x 3.2 x 8.5 x 8.7 x 14.7 x 14.8 x 6.2% (2.4)% (0.6)% 71.5 % 39.7 % 28.1 % Oracle 40.91 182,413 169,365 37,241 24,193 26.5 % 6.9 % 4.5 x 4.3 x 9.1 x 8.5 x 14.5 x 5.0% 7.2% 81.9 % 48.9 % 34.7 % Rackspace 32.82 4,655 4,460 260 65 (35.0)% (16.1)% 2.9 x 2.5 x 8.8 x 7.5 x 54.7 x 16.2% 17.1% 0.8% 67.9 % 33.0 % 5.6 % salesforce.com 57.09 34,831 36,500 839 2,509 27.7 % 3.4 % 9.0 x 6.9 x 62.2 x 43.6 x 163.1 x 115.1 x 29.9% 42.6% 41.7% 76.2 % 14.4 % 5.1 % Verizon 47.57 196,940 236,425 54,129 93,614 (3.2)% (3.2)% 2.0 x 1.9 x 5.6 x 5.3 x 16.8 x 13.7 x 3.8% 5.1% 22.7% 62.8 % 35.3 % 6.8 % Mean 141,624 143,082 24,911 26,368 8.7 % (1.2)% 3.5 x 3.1 x 15.5 x 13.6 x 41.0 x 33.5 x 10.1% 13.0% 9.9% 62.2 % 30.7 % 13.6 % Median 168,447 158,767 11,757 22,350 11.5 % 2.9 % 2.6 x 2.4 x 8.8 x 8.4 x 14.7 x 13.7 x 5.6% 6.8% 2.8% 65.3 % 34.1 % 8.0 % Communication & Collaboration 8x8 10.81 950 776 174 0 57.8 % 6.5 % 6.2 x 5.1 x 44.6 x 49.2 x 56.9 x 76.8 x 22.4% (9.4)% (25.9)% 70.3 % 14.0 % 11.9 % Cisco 22.42 115,466 85,558 47,065 17,157 7.3 % (0.1)% 1.8 x 1.8 x 5.4 x 5.3 x 11.0 x 11.1 x (2.2)% 1.9% (0.9)% 59.4 % 33.3 % 22.9 % Citrix 57.44 10,555 9,820 735 0 (20.4)% (9.2)% 3.4 x 3.1 x 11.8 x 10.9 x 19.0 x 19.7 x 9.1% 8.5% (3.6)% 86.1 % 28.5 % 19.5 % CounterPath 1.50 63 55 8 0 (25.8)% 38.2 % 4.6 x 3.7 x 22.2% 35.6% 45.8% 81.6 % (38.2)% (41.9)% Cybozu 3.47 159 125 34 0 30.1 % (13.2)% 2.5 x 20.6 x 91.1 % 12.3 % 0.0 % Interactive Intel. 72.50 1,504 1,406 98 0 63.5 % 7.6 % 4.4 x 3.8 x 34.1 x 94.2 x 15.2% (47.9)% (61.9)% 64.2 % 13.0 % 5.1 % IntraLinks 10.23 568 558 85 75 60.8 % (15.5)% 2.4 x 2.3 x 15.1 x 14.2 x 4.0% 6.5% 72.3 % 15.7 % 3.1 % j2 Global 50.05 2,368 2,315 299 246 27.6 % 0.1 % 4.4 x 3.9 x 9.9 x 8.9 x 17.6 x 14.9 x 12.8% 11.4% 17.5% 83.3 % 44.7 % 25.2 % Jive Softw are 8.01 563 463 108 8 (47.3)% (28.8)% 3.2 x 2.7 x 18.4% 35.3% 21.6% 62.1 % (14.9)% (25.9)% LivePerson 12.07 660 569 92 0 (11.1)% (18.6)% 3.2 x 2.8 x 28.9 x 26.2 x 54.9 x 52.4 x 13.5% 10.1% 4.6% 76.1 % 11.1 % 6.8 % Microsoft 40.99 340,247 280,846 83,135 23,734 43.3 % 9.6 % 3.4 x 3.2 x 8.5 x 8.7 x 14.7 x 14.8 x 6.2% (2.4)% (0.6)% 71.5 % 39.7 % 28.1 % Premiere Global 12.06 582 807 48 274 9.7 % 4.1 % 1.5 x 1.4 x 8.6 x 7.8 x 15.3 x 14.2 x 7.3% 11.4% 7.6% 56.7 % 17.7 % 7.0 % RingCentral 18.10 1,163 1,081 116 35 (1.5)% 6.7 x 5.3 x 27.7% 26.7% 54.4% 61.7 % (17.5)% (24.2)% Textura 25.21 625 550 77 2 (15.8)% 13.5 x 8.2 x 63.9% 53.6% 71.6% 68.6 % (38.6)% (66.0)% V-cube 44.83 205 186 27 7 (36.7)% 7.7 x 5.8 x 28.6 x 17.2 x 34.3% 66.2% 66.7 % 27.0 % 9.1 % Mean 31,712 25,674 8,807 2,769 16.3 % (4.9)% 4.6 x 3.8 x 19.6 x 16.5 x 35.4 x 29.1 x 18.2% 14.8% 10.9% 71.4 % 9.9 % (1.3)% Median 660 776 98 7 18.7 % (1.5)% 3.4 x 3.5 x 15.1 x 10.9 x 18.3 x 14.9 x 14.3% 10.8% 6.1% 70.3 % 14.0 % 6.8 % Content Creation & Management Adobe 65.74 32,721 31,098 3,132 1,510 51.1 % 9.8 % 7.7 x 7.3 x 28.4 x 26.1 x 50.6 x 51.5 x 5.0% 8.8% (1.8)% 85.7 % 27.0 % 16.5 % Destiny Media 1.04 54 53 2 0 74.5 % (47.9)% 14.4 x 11.0 x 189.4 x 52.9 x 30.5% 258.1% 100.0 % 7.6 % 2.5 % Kudelski 14.48 780 874 113 206 10.0 % (5.2)% 0.9 x 0.9 x 7.7 x 6.9 x 16.8 x 14.7 x 4.3% 12.3% 73.0 % 12.0 % 4.9 % Rovi 22.78 2,199 2,870 522 1,194 6.4 % 15.7 % 5.3 x 5.4 x 11.0 x 11.4 x 12.1 x 13.2 x (1.0)% (3.7)% (7.9)% 82.8 % 48.5 % 34.6 % Sumavision 3.50 1,186 926 264 4 28.0 % 7.1 % 14.5 x 6.5 x 92.6 x 7.0 x 53.6 x 18.0 x 123.6% 1,219.9% 198.2% 72.7 % 15.7 % 34.7 % Wix 22.97 862 760 101 0 (14.5)% 9.5 x 5.9 x 60.4% (80.7)% 46.4% 81.0 % (27.3)% (29.7)% Mean 6,300 6,097 689 485 34.0 % (5.8)% 8.7 x 6.2 x 65.8 x 20.9 x 33.3 x 24.3 x 37.1% 235.8% 58.7% 82.5 % 13.9 % 10.6 % Median 1,024 900 189 105 28.0 % 0.9 % 8.6 x 6.2 x 28.4 x 11.4 x 33.7 x 16.4 x 17.7% 10.6% 22.3% 81.9 % 13.8 % 10.7 % *Sorted alphabetically within market segment 49 49
Trading & Operating Metrics ($ in millions, except per share data) $/Share Market Enterprise % Change Ent. Value/Rev. Ent. Value/EBITDA Price/EPS NTM / LTM Growth LTM Margin Company Name 3/31/14 Cap Value Cash Debt LTM LQ LTM NTM LTM NTM LTM NTM Revenue EBITDA EPS Gross EBITDA Net Content Delivery Services Akamai 58.21 10,393 9,719 674 0 64.8 % 23.4 % 6.2 x 5.2 x 13.9 x 12.2 x 28.8 x 26.0 x 19.6% 14.6% 10.7% 67.6 % 44.2 % 23.3 % Brightcove 9.83 315 279 36 0 58.3 % (30.5)% 2.5 x 2.2 x 16.9% (211.9)% 66.5 % 5.7 % (0.3)% Digital River 17.43 577 283 600 306 23.3 % (5.6)% 0.7 x 0.8 x 8.0 x 5.7 x 31.1 x (4.8)% 38.6% 66.0 % 9.1 % 4.6 % Limelight 2.18 213 96 118 1 4.8 % 10.1 % 0.6 x 0.6 x (10.7)% (6.2)% 48.8 % 1.3 % (12.9)% Mean 2,874 2,594 357 77 37.8 % (0.7)% 2.5 x 2.2 x 11.0 x 9.0 x 30.0 x 26.0 x 5.2% (52.9)% 2.2% 62.2 % 15.1 % 3.7 % Median 446 281 359 0 40.8 % 2.2 % 1.6 x 1.5 x 11.0 x 9.0 x 30.0 x 26.0 x 6.1% 14.6% 2.2% 66.3 % 7.4 % 2.2 % CRM & Customer Service egain 7.06 179 171 12 4 (18.5)% (31.1)% 2.6 x 2.3 x 12.7% 68.9 % 3.1 % (0.8)% Jive Softw are 8.01 563 463 108 8 (47.3)% (28.8)% 3.2 x 2.7 x 18.4% 35.3% 21.6% 62.1 % (14.9)% (25.9)% LivePerson 12.07 660 569 92 0 (11.1)% (18.6)% 3.2 x 2.8 x 28.9 x 26.2 x 54.9 x 52.4 x 13.5% 10.1% 4.6% 76.1 % 11.1 % 6.8 % salesforce.com 57.09 34,831 36,500 839 2,509 27.7 % 3.4 % 9.0 x 6.9 x 62.2 x 43.6 x 163.1 x 115.1 x 29.9% 42.6% 41.7% 76.2 % 14.4 % 5.1 % Mean 9,058 9,426 263 630 (12.3)% (18.7)% 4.5 x 3.7 x 45.5 x 34.9 x 109.0 x 83.8 x 18.6% 29.3% 22.6% 70.8 % 3.4 % (3.7)% Median 612 516 100 6 (14.8)% (23.7)% 3.2 x 2.8 x 45.5 x 34.9 x 109.0 x 83.8 x 16.0% 35.3% 21.6% 72.5 % 7.1 % 2.2 % ERP, Supply Chain & Commerce Amber Road 15.40 382 387 5 10 7.4 x 57.6 % (22.3)% (114.2)% blur Group 8.04 238 225 13 0 220.0 % (14.5)% 55.9 x 23.5 x 138.4% (3.6)% 3.1% 23.6 % (93.1)% (79.7)% Borderfree 18.64 568 525 44 0 4.7 x 23.6 % 1.7 % (14.9)% ChannelAdvisor 37.74 925 823 104 3 (9.5)% 12.1 x 9.7 x 25.4% (101.8)% (19.1)% 73.4 % (13.2)% (16.5)% Demandw are 64.06 2,267 1,992 280 4 152.7 % (0.1)% 19.2 x 13.8 x 39.1% 70.3% 73.0 % (2.1)% (6.8)% E2open 23.57 677 670 12 5 18.2 % (1.4)% 9.6 x 7.8 x 23.9% 23.7% 21.7% 61.3 % (14.7)% (16.8)% Freelancer 1.38 604 582 22 0 11.9 % 34.7 x 24.1 x 384.9 x 496.9 x 44.2% 10.3% 87.6 % 9.0 % 4.8 % JQW 1.49 289 232 57 0 21.7 % 2.8 x 8.9 x 14.5 x 49.6 % 31.9 % 23.5 % SciQuest 27.02 729 694 34 0 12.4 % (5.1)% 7.7 x 6.2 x 33.2 x 30.6 x 73.0 x 63.6 x 24.3% 8.5% 14.7% 69.6 % 23.2 % 9.4 % SLI Systems 1.94 117 105 12 0 26.9 % 5.8 x 5.4 x 7.5% (232.9)% 13.2% (10.8)% (9.7)% (14.6)% SPS Commerce 61.45 994 863 131 0 44.0 % (5.9)% 8.3 x 6.8 x 62.7 x 49.6 x 115.9 x 97.5 x 20.7% 26.3% 18.9% 69.6 % 13.2 % 8.1 % Mean 708 645 65 2 89.5 % 2.7 % 15.3 x 12.1 x 122.4 x 40.1 x 67.8 x 219.4 x 40.4% (38.5)% 17.5% 52.6 % (6.9)% (19.8)% Median 604 582 34 0 44.0 % (1.4)% 8.3 x 8.7 x 47.9 x 40.1 x 73.0 x 97.5 x 24.9% 8.5% 14.7% 61.3 % (2.1)% (14.6)% Finance & Administration Bottomline 35.15 1,312 1,250 206 144 23.3 % (2.8)% 4.6 x 3.9 x 43.0 x 18.5 x 29.3 x 25.2 x 18.8% 132.1% 16.1% 54.7 % 10.8 % 16.0 % Concur 99.07 5,610 5,417 849 656 44.3 % (4.0)% 9.2 x 7.4 x 47.8 x 45.9 x 111.3 x 140.1 x 24.1% 4.2% (20.6)% 69.2 % 19.3 % 8.5 % Intuit 77.73 22,022 21,190 1,331 499 18.4 % 1.8 % 5.1 x 4.5 x 13.8 x 11.0 x 26.5 x 20.4 x 13.6% 25.1% 29.9% 86.2 % 37.2 % 20.9 % NetSuite 94.83 7,164 6,979 452 266 18.4 % (7.9)% 16.8 x 12.9 x 173.7 x 165.7 x 30.2% 4.8% 67.4 % 9.7 % 4.6 % Tangoe 18.59 716 675 43 2 50.0 % 3.2 % 3.6 x 3.0 x 22.7 x 17.9 x 28.6 x 23.3 x 17.4% 27.1% 22.6% 55.0 % 15.7 % 13.9 % Xero 34.15 4,295 4,229 65 0 270.5 % 28.4 % 129.6 x 68.9 x 88.0% (132.3)% (163.1)% 2.9 % (35.5)% (34.9)% Mean 6,853 6,623 491 261 70.8 % 3.1 % 28.2 x 16.8 x 60.2 x 51.8 x 48.9 x 52.3 x 32.0% 10.2% (23.0)% 55.9 % 9.5 % 4.9 % Median 4,953 4,823 329 205 33.8 % (0.5)% 7.2 x 6.0 x 43.0 x 18.5 x 28.9 x 24.3 x 21.4% 15.0% 16.1% 61.2 % 13.2 % 11.2 % *Sorted alphabetically within market segment 50 50
Trading & Operating Metrics ($ in millions, except per share data) $/Share Market Enterprise % Change Ent. Value/Rev. Ent. Value/EBITDA Price/EPS NTM / LTM Growth LTM Margin Company Name 3/31/14 Cap Value Cash Debt LTM LQ LTM NTM LTM NTM LTM NTM Revenue EBITDA EPS Gross EBITDA Net Human Resources Benefitfocus 46.97 1,152 1,098 79 24 (18.7)% 10.5 x 8.2 x 27.1% (141.2)% 35.1% 40.4 % (19.8)% (36.7)% Callidus 12.52 575 555 36 16 174.0 % (8.8)% 4.9 x 4.3 x 40.6 x 38.7 x 13.9% 4.8% 57.5 % 12.2 % 2.4 % Cornerstone 47.87 2,528 2,438 310 220 40.4 % (10.2)% 13.2 x 9.1 x 45.2% 0.7% 71.1 % (0.1)% (6.7)% Freelancer 1.38 604 582 22 0 11.9 % 34.7 x 24.1 x 384.9 x 496.9 x 44.2% 10.3% 87.6 % 9.0 % 4.8 % Halogen 8.84 192 136 56 0 (28.6)% 2.8 x 2.4 x 19.7% (78.7)% 58.3% 74.8 % (6.1)% (33.4)% Personal & Informatik 89.89 677 657 20 0 103.0 % 29.3 % 7.2 x 20.2 x 32.0 x 69.3 % 35.4 % 23.1 % Saba 12.15 362 348 15 1 52.8 % (0.8)% 2.9 x 2.4 x 17.1% 118.1% 62.9 % (13.3)% (3.7)% WageWorks 56.11 1,965 1,634 360 29 124.2 % (5.6)% 7.5 x 6.8 x 28.9 x 24.7 x 74.8 x 65.9 x 10.2% 16.7% 13.6% 62.6 % 25.8 % 12.1 % Workday 91.43 16,823 15,418 1,887 481 48.4 % 9.9 % 32.9 x 21.0 x 56.7% (7.5)% (4.0)% 62.3 % (11.2)% (19.4)% Mean 2,764 2,541 309 86 90.5 % (2.4)% 12.9 x 9.8 x 118.7 x 31.7 x 53.4 x 281.4 x 29.3% (11.1)% 20.8% 65.4 % 3.6 % (6.4)% Median 677 657 56 16 77.9 % (5.6)% 7.5 x 7.5 x 34.7 x 31.7 x 53.4 x 281.4 x 23.4% 4.8% 13.6% 62.9 % (0.1)% (3.7)% Licensed Software Leaders IBM 192.49 200,448 229,113 11,066 39,731 (9.8)% 2.6 % 2.3 x 2.3 x 8.8 x 8.3 x 11.3 x 10.8 x (0.4)% 6.3% 4.7% 48.6 % 26.1 % 18.8 % Microsoft 40.99 340,247 280,846 83,135 23,734 43.3 % 9.6 % 3.4 x 3.2 x 8.5 x 8.7 x 14.7 x 14.8 x 6.2% (2.4)% (0.6)% 71.5 % 39.7 % 28.1 % Oracle 40.91 182,413 169,365 37,241 24,193 26.5 % 6.9 % 4.5 x 4.3 x 9.1 x 8.5 x 14.5 x 5.0% 7.2% 81.9 % 48.9 % 34.7 % SAP 81.09 96,796 98,837 3,837 5,878 1.0 % (5.9)% 4.3 x 4.0 x 11.4 x 11.1 x 18.0 x 16.9 x 5.9% 2.6% 6.6% 72.6 % 37.3 % 23.3 % Mean 204,976 194,540 33,820 23,384 15.3 % 3.3 % 3.6 x 3.4 x 9.5 x 9.2 x 14.6 x 14.2 x 4.2% 3.4% 3.6% 68.6 % 38.0 % 26.2 % Median 191,430 199,239 24,154 23,964 13.8 % 4.8 % 3.8 x 3.6 x 9.0 x 8.6 x 14.6 x 14.8 x 5.5% 4.5% 4.7% 72.0 % 38.5 % 25.7 % *Sorted alphabetically within market segment 51 51
Trading & Operating Metrics ($ in millions, except per share data) $/Share Market Enterprise % Change Ent. Value/Rev. Ent. Value/EBITDA Price/EPS NTM / LTM Growth LTM Margin Company Name 3/31/14 Cap Value Cash Debt LTM LQ LTM NTM LTM NTM LTM NTM Revenue EBITDA EPS Gross EBITDA Net Marketing & Advertising Adobe 65.74 32,721 31,098 3,132 1,510 51.1 % 9.8 % 7.7 x 7.3 x 28.4 x 26.1 x 50.6 x 51.5 x 5.0% 8.8% (1.8)% 85.7 % 27.0 % 16.5 % Bazaarvoice 7.30 538 481 57 0 (0.3)% (7.8)% 2.7 x 2.5 x 6.6% 2.1% 22.4% 68.3 % (8.0)% (11.1)% Callidus 12.52 575 555 36 16 174.0 % (8.8)% 4.9 x 4.3 x 40.6 x 38.7 x 13.9% 4.8% 57.5 % 12.2 % 2.4 % Constant Contact 24.46 765 642 123 0 88.4 % (21.3)% 2.3 x 2.0 x 13.9 x 10.9 x 32.2 x 25.5 x 13.3% 28.0% 26.1% 71.4 % 16.1 % 8.4 % Conversant 28.15 1,896 1,955 81 140 (4.8)% 20.5 % 3.4 x 3.2 x 8.3 x 8.5 x 16.8 x 15.0 x 7.6% (2.2)% 11.6% 68.0 % 40.9 % 21.7 % Criteo 40.55 2,329 2,021 324 16 18.6 % 3.3 x 2.3 x 29.6 x 41.7% 117.8% 35.4 % 5.1 % 0.2 % Jive Softw are 8.01 563 463 108 8 (47.3)% (28.8)% 3.2 x 2.7 x 18.4% 35.3% 21.6% 62.1 % (14.9)% (25.9)% Marchex 10.51 437 406 31 0 149.6 % 21.5 % 2.7 x 2.3 x 30.3 x 26.4 x 15.2% 14.7% 39.8 % 8.8 % 3.9 % Marin Softw are 10.57 349 251 104 6 (35.7)% 3.2 % 3.2 x 2.6 x 23.8% 11.4% 15.3% 59.8 % (34.2)% (37.1)% Marketo 32.67 1,314 1,193 128 8 (11.9)% 12.4 x 8.9 x 40.2% (13.9)% 71.8% 60.4 % (34.4)% (102.6)% Millennial Media 6.92 738 640 99 2 9.0 % (4.8)% 2.5 x 1.5 x 60.9% 40.3 % 3.5 % (1.0)% ReachLocal 9.85 284 204 80 0 (34.2)% (22.5)% 0.4 x 0.4 x 7.5 x 8.3 x 29.0 x 12.9% (9.4)% 50.1 % 5.3 % 1.9 % Rocket Fuel 42.88 1,503 1,417 114 27 (30.3)% 5.9 x 3.3 x 80.0% 47.8 % (1.2)% (3.3)% salesforce.com 57.09 34,831 36,500 839 2,509 27.7 % 3.4 % 9.0 x 6.9 x 62.2 x 43.6 x 163.1 x 115.1 x 29.9% 42.6% 41.7% 76.2 % 14.4 % 5.1 % Sizmek 10.63 324 301 23 0 1.9 x 1.6 x 9.5 x 13.7 x 14.5% (30.6)% 66.5 % 19.6 % 0.8 % TechTarget 7.21 235 205 30 0 47.4 % 5.1 % 2.3 x 2.1 x 22.0 x 16.7 x 45.1 x 10.2% 31.7% 69.3 % 10.6 % 3.9 % Vocus 13.33 288 255 35 1 (5.8)% 17.0 % 1.4 x 1.4 x 20.0 x 11.3 x (2.2)% 77.3% 79.6 % 6.8 % 2.7 % Yahoo! 35.90 36,237 33,977 3,408 1,148 52.6 % (11.2)% 7.3 x 7.5 x 21.7 x 23.4 x 24.0 x 22.7 x (3.2)% (7.3)% 5.7% 71.2 % 33.4 % 34.3 % Mean 6,440 6,254 486 299 33.7 % (2.8)% 4.2 x 3.5 x 24.0 x 21.4 x 52.6 x 45.8 x 21.6% 19.4% 23.8% 61.6 % 6.2 % (4.4)% Median 656 598 102 7 18.3 % (4.8)% 3.2 x 2.6 x 21.7 x 20.1 x 30.6 x 35.3 x 14.2% 10.1% 21.6% 64.3 % 7.8 % 2.2 % *Sorted alphabetically within market segment 52 52
Trading & Operating Metrics ($ in millions, except per share data) $/Share Market Enterprise % Change Ent. Value/Rev. Ent. Value/EBITDA Price/EPS NTM / LTM Growth LTM Margin Company Name 3/31/14 Cap Value Cash Debt LTM LQ LTM NTM LTM NTM LTM NTM Revenue EBITDA EPS Gross EBITDA Net Vertical Market ACI Worldw ide 59.19 2,221 2,897 95 771 21.1 % (8.9)% 3.3 x 2.7 x 12.1 x 9.9 x 27.7 x 23.3 x 23.6% 23.3% 18.9% 60.2 % 27.6 % 9.9 % Advent 29.36 1,509 1,780 34 305 5.0 % (16.0)% 4.6 x 4.4 x 14.4 x 12.8 x 22.2 x 20.9 x 4.5% 13.0% 6.6% 71.1 % 32.2 % 18.4 % Athenahealth 160.24 5,990 6,149 65 224 65.1 % 19.1 % 10.3 x 8.2 x 52.8 x 47.1 x 138.1 x 147.3 x 26.4% 12.1% (6.2)% 59.9 % 19.6 % 7.5 % Blackbaud 31.30 1,412 1,553 12 153 5.6 % (16.9)% 3.1 x 2.8 x 11.2 x 15.2 x 24.5 x 26.5 x 9.6% (26.0)% (7.8)% 53.8 % 27.5 % 11.5 % BSM 2.18 101 98 8 6 77.0 % (26.4)% 4.7 x 3.9 x 24.6 x 17.1 x 58.6 x 23.2 x 20.7% 44.1% 152.2% 60.6 % 19.0 % 6.2 % Cvent 36.15 1,486 1,328 158 0 (0.7)% 11.9 x 9.6 x 100.5 x 100.5 x 24.9% (0.0)% 71.0 % 11.9 % 2.5 % Dealertrack 49.19 2,601 2,638 133 170 67.4 % 2.3 % 5.5 x 3.3 x 22.4 x 14.4 x 37.8 x 33.2 x 67.7% 56.1% 14.0% 42.4 % 24.4 % 12.2 % Descartes 14.00 891 869 63 40 49.6 % 4.7 % 5.7 x 5.0 x 19.5 x 17.0 x 20.3 x 23.4 x 13.9% 15.1% (13.4)% 67.6 % 29.4 % 29.4 % Earthport 0.66 259 246 13 1 101.7 % 10.4 % 31.1 x 16.5 x 88.5% 34.6% 39.9% 76.8 % (155.1)% (157.5)% Ebix 17.07 655 654 57 57 5.2 % 16.0 % 3.2 x 3.1 x 7.8 x 7.8 x 10.5 x 11.1 x 2.5% 1.0% (5.7)% 80.2 % 40.7 % 30.8 % Ellie Mae 28.84 805 726 80 1 19.9 % 7.3 % 5.7 x 4.8 x 18.4 x 15.5 x 29.1 x 26.6 x 17.6% 18.6% 9.5% 74.5 % 30.7 % 22.0 % Envestnet 40.18 1,367 1,317 50 0 129.5 % (0.3)% 5.4 x 3.9 x 34.1 x 24.6 x 74.4 x 56.6 x 37.7% 38.5% 31.5% 27.3 % 15.9 % 7.9 % Fleetmatics 33.45 1,242 1,129 137 24 37.9 % (22.7)% 6.4 x 4.9 x 20.0 x 18.3 x 38.9 x 40.3 x 29.3% 9.0% (3.5)% 75.3 % 31.8 % 18.0 % GameAccount 2.33 129 127 3 0 1.7 % 14.2 x 6.8 x 21.7 x 108.9% 100.0 % (4.0)% 2.4 % Guangdong Qtone 7.30 473 453 21 0 15.9 x 14.2 x 63.3 x 50.5 x 73.9 x 62.9 x 12.4% 25.2% 17.5% 50.6 % 25.1 % 20.8 % Higher One 7.23 341 431 7 97 (18.7)% (25.9)% 2.0 x 1.9 x 7.5 x 7.4 x 12.1 x 11.2 x 8.6% 1.3% 7.1% 57.9 % 27.4 % 13.7 % IDOX 0.64 226 258 5 37 (16.0)% 18.4 % 2.8 x 2.5 x 13.1 x 9.4 x 17.6 x 13.8 x 9.9% 39.2% 28.1% 90.8 % 21.4 % 14.3 % Medidata Solutions 54.34 2,944 2,932 241 230 87.4 % (10.2)% 10.6 x 8.5 x 43.6 x 35.7 x 69.2 x 68.8 x 24.2% 22.3% 0.5% 74.7 % 24.3 % 15.3 % Mix Telematics 0.44 343 273 76 6 9.1 % (8.4)% 2.3 x 2.0 x 10.0 x 8.8 x 20.6 x 25.6 x 18.2% 13.5% (19.6)% 66.2 % 23.2 % 13.3 % NIC 19.31 1,258 1,184 74 0 0.8 % (22.4)% 4.7 x 4.4 x 19.4 x 16.1 x 40.2 x 33.5 x 8.0% 20.4% 20.0% 42.9 % 24.4 % 12.5 % OpenTable 76.93 1,804 1,689 115 0 22.1 % (3.1)% 8.9 x 7.5 x 20.7 x 19.8 x 37.7 x 41.8 x 18.6% 4.6% (9.9)% 74.6 % 42.9 % 25.7 % Playtech 11.28 3,311 2,577 734 0 17.5 % (7.6)% 5.1 x 4.5 x 13.4 x 10.5 x 5.2 x 15.1 x 12.3% 27.5% (65.3)% 100.0 % 38.1 % 125.8 % Q2 Holdings 15.53 496 485 19 8 8.5 x 38.2 % (21.1)% (42.9)% RealPage 18.16 1,419 1,386 35 1 (12.3)% (22.3)% 3.7 x 3.1 x 15.3 x 13.2 x 30.8 x 27.1 x 17.2% 16.4% 13.8% 60.7 % 24.0 % 11.9 % Solera 63.34 4,369 5,367 711 1,709 8.6 % (10.5)% 6.0 x 5.1 x 14.4 x 12.1 x 24.0 x 20.3 x 19.0% 19.4% 18.5% 68.5 % 41.7 % 20.5 % SS&C 40.02 3,311 4,001 84 775 33.5 % (9.6)% 5.6 x 5.2 x 13.7 x 12.5 x 20.2 x 17.6 x 7.6% 9.3% 14.6% 45.4 % 41.0 % 23.8 % Temenos 35.18 2,382 2,477 118 213 48.2 % 24.3 % 5.3 x 4.9 x 15.9 x 15.0 x 28.6 x 24.9 x 8.6% 6.3% 14.8% 70.0 % 33.2 % 18.3 % Textura 25.21 625 550 77 2 (15.8)% 13.5 x 8.2 x 63.9% 53.6% 71.6% 68.6 % (38.6)% (66.0)% Mean 1,570 1,628 115 172 33.3 % (4.7)% 7.5 x 5.6 x 24.5 x 21.3 x 37.5 x 34.6 x 26.1% 19.2% 13.9% 65.4 % 16.4 % 8.2 % Median 1,312 1,250 70 16 21.1 % (8.0)% 5.5 x 4.8 x 17.2 x 15.2 x 28.6 x 25.6 x 18.2% 17.5% 13.8% 68.0 % 24.8 % 13.5 % *Sorted alphabetically within market segment 53 53
Investment Banking Advisors Observations Technology & and Recommendations Telecom Team WORLD CLASS WALL STREET EXPERTISE. BUILT FOR THE MIDDLE MARKET. TM 54 54
Technology & Telecom Team DAVID MICHAELS Managing Director, Head of Technology & Telecom Group Phone: (858) 926-5950 Email: dmichaels@capstonellc.com David Michaels is a Managing Director of Capstone where he is responsible for managing the firm s Technology & Telecom Group (TTG). David founded SagePoint Advisors in 2008, a boutique investment banking firm focused on providing merger, acquisition and strategic advisory services to growth companies in the technology and telecom sectors. Prior to founding SagePoint, David was a Co-Founder, Partner and Managing Director at Montgomery & Co., a leading investment bank focused on serving emerging-growth technology companies and their venture backers. David co-founded Montgomery s investment banking business in 1996 and played an instrumental role in building the business to over $50 million in revenues and 80 employees. Mr. Michaels also ran the firm s Communications and Digital Media Technology practice areas for several years prior to his departure. David has intimate knowledge of the strategic landscape, market dynamics and technology underpinnings of several high technology market segments including Mobile Software & Services, Consumer Internet, E-Commerce, Enterprise SaaS, Cloud & Infrastructure Software and Consumer, IT & Telecom Hardware. Prior to joining Montgomery in 1994, David worked at Bankers Trust Corporate Finance Department, where he helped execute merger and acquisition assignments. Prior to that, Mr. Michaels worked as a structural engineer at General Dynamics, Mr. Michaels received an M.B.A. in entrepreneurship from the Anderson School of Management at UCLA and holds a B.S. in Mechanical Engineering from the University of Michigan. JOHN SNEAD Managing Director, Head of International Phone: 44 (0)7979 704302 Email: jsnead@capstonellc.com John Snead is responsible for managing the firm s international operations as Managing Director of Capstone Grenport Ltd (CGL), focusing on the European technology and private equity markets. In his capacity, John is instrumental the firm s cross border M&A and financing activities. He joins Capstone with 25 years of experience in in the investment banking and financial markets both in London and Silicon Valley. For the seven years prior to joining Capstone, John was the founder and Managing Partner of Grenport Limited, a London-based investment banking boutique serving the strategic and transaction needs of emerging technology companies. Prior to Grenport, John was a Managing Director in Kroll s corporate finance group. He has also served as a senior professional at leading financial advisory firms such as Arthur Andersen, KPMG and Morgan Grenfell. John is particularly experienced in the technology sector where he has advised on more than 80 transactions, primarily in the software and IT services sectors. John holds an MBA, CFA, CF qualifications and is regulated by ICAEW. 55 55
Technology & Telecom Team JOHN FERRARA President and Managing Partner Phone: (617) 619-3325 Email: jferrara@capstonellc.com John serves as the Managing Partner of Capstone, responsible for the firm s investment and merchant banking operations, as well as managing client transactions. During his tenure as Managing Partner, Capstone has completed three acquisitions to expand the firm s presence from Boston to include seven offices internationally, culminating in the Global Investment Banking Boutique of the Year award in 2012. Over his 25+ year career in mergers & acquisitions, venture capital and management consulting, John has executed well over 150 transactions and related engagements. Prior to 2002, when he acquired the practice he initially founded from Arthur Andersen to form Capstone, John served as a Regional Managing Partner with Andersen Corporate Finance LLC. While with Andersen, John held various national and global leadership positions. He started his career in Lehman Brothers' M&A group in New York, London and Riyadh, later becoming a founding member of Rodman & Renshaw's M&A practice in New York. After a break to compete in Australia's semi-professional baseball league, John joined The Deloitte Consulting Group in Los Angeles to focus on turnaround and interim management engagements. John has been recognized as Investment Banker of the Year in 2012, Deal Maker of the Year in 2010 and received the 40 Under 40 award for entrepreneurial excellence in 2006. He is the founder of the Spirit Triumph Cancer Foundation, author of the children s book "Beyond the Waterspout" and former owner in the Holyoke Sox, a baseball franchise in the NECBL. John earned his MBA from The Anderson School at UCLA and the London School of Economics. He holds dual BA degrees from Wesleyan University and is qualified as a General Securities Principal. TEAK MURPHY Vice President, Technology & Telecom Group Phone: (310) 746-5006 Email: tmurphy@capstonellc.com Teak joins Capstone as a Vice President in the Technology & Telecom Group, based out of San Diego. Prior to Capstone s acquisition of SagePoint Advisors, Teak worked at SagePoint as a Senior Associate advising technology companies on mergers, acquisitions and strategic capital raises. Prior to joining SagePoint, Teak worked as a Senior Associate with Enterprise Partners Venture Capital, the largest Southern California based VC firm, where he evaluated investment opportunities and worked closely with senior management and board members to successfully grow portfolio companies. Prior to Enterprise Partners, Teak worked as an Associate in technology investment banking at Montgomery & Co. where he spent three years working closely with SagePoint's founder David Michaels on buy-side and sell-side M&A transactions. Prior to Montgomery, Teak worked at Cowen & Co. advising technology companies on M&A and IPO transactions. Teak's experience working on fund raising, mergers and acquisitions, and initial public offerings as both an advisor and investor provides unique insight into the needs of venture-backed companies. Teak graduated from the University of Southern California with honors, receiving a B.S. in Business Administration/Finance. 56 56
Technology & Telecom Team BRANDON OVERMYER Associate, Technology & Telecom Group Phone: (310) 929-5177 Email: bovermyer@capstonellc.com Brandon is an Associate in the Technology & Telecom Group, working closely with clients to execute and optimize mergers, acquisitions and strategic capital raises. Prior to joining Capstone, Brandon was an Analyst in technology investment banking with ArchPoint Partners in San Francisco, supporting the senior team on middle market domestic and cross-border technology transactions. Brandon has previously worked in varying roles with Apple, LG and a number of startup ventures in addition to civil litigation practice. Brandon received his BA from University of Florida, graduating with distinction in three years. He received his JD from Baylor University School of Law and is a member of the Florida Bar. HIROKI HIGASHIHARA Analyst, Technology & Telecom Group Phone: (310) 929-7415 Email: hhigashihara@capstonellc.com Hiroki works closely with senior team members of the Technology & Telecom Group, as an Analyst, to execute various corporate financing transactions. Prior to joining Capstone, Hiroki interned at an investment management firm, Sage Capital Advisors, conducting back-testing models and investment performance analyses. He also interned at an Internet Security software company, gaining exposure to corporate financial planning and analysis. Hiroki received a BS in Management Science along with a minor in Accounting from University of California, San Diego. Hiroki graduated as a team member of the Thurgood Marshall Honors Program. 57 57