Select Recent HW TMT Transactions

screen_shot_2019-10-21_at_3.24.34_pm.png

Select Recent HW Software Transactions

screen_shot_2019-10-21_at_3.25.45_pm.png

Health & Safety Institute (“HSI”)

  • Leading provider of environmental, health, and safety compliance (“EHS”) training and workflow solutions

Company Overview

  • HSI’s comprehensive platform addresses complex and evolving EHS requirements for organizations to make workplaces safer and more compliant
  • The Company’s solutions reduce both financial and reputational risk, and ensure compliance in an increasingly complex regulatory environment
  • HSI’s platform registered over 4M course completions across 935+ unique online courses in 2018

Relevant Sub-Sectors

  • EHS / Compliance Software
  • SaaS
  • Edtech
screen_shot_2019-10-21_at_4.24.48_pm.png

Computerease

  • Leading provider of construction accounting, project management, and payroll processing solutions

Company Overview

  • ComputerEase’s fully integrated, cloud-based solution is purpose built to meet the unique needs of diverse contractor trades and sizes, with complex and varying union, labor, and equipment requirements
  • The Company’s solutions enable contractors to manage and gain real-time visibility into their company’s operations and financial performance
  • ComputerEase serves more than 4,400 contractors across various trades in the US

Relevant Sub-Sectors

  • ERP Software
  • SaaS
  • AEC Software

Select Software M&A Transactions – 3Q 2019

screen_shot_2019-10-21_at_3.32.45_pm.png

Vista Equity’s Acquisition of AltaReturn

  • AltaReturn provides an end-to-end investment management and reporting platform to over 200 customers in the alternative investment industry.
  • The Company’s SaaS platform offers fund and corporate accounting, portfolio monitoring, CRM, web portals, and business intelligence solutions, enabling LPs, GPs, and fund administrators to simplify and automate back, middle, and front office workflows.
  • Following the acquisition, Vista Equity will merge AltaReturn with existing portfolio company Black Mountain Systems to form Allvue Systems to focus on meeting the needs of both single strategy and multi-asset firms, administrators, and LPs.
screen_shot_2019-10-21_at_3.33.48_pm.png

Apax Digital’s Acquisition of MetaMetrics

  • MetaMetrics provides education technology solutions to offer the only scientifically valid, universal scales for measuring reading, listening, and math levels for both students and testing and instructional materials.
  • The Company’s solutions employ predictive analytics and data science to match students with testing and instructional materials based on their ability level, allowing teachers and parents to link assessment to instruction.
  • Post acquisition, MetaMetrics will leverage Apax’s experience in education, data and analytics, and software to continue delivering increased value to students and educators through new product development and international expansion.
screen_shot_2019-10-21_at_3.34.52_pm.png

TPG Capital’s Pending Acquisition of CollabNet VersionOne

  • CollabNet VersionOne provides Agile planning, DevOps, and Value Stream Management (“VSM”) solutions to developers.
  • The Company’s software development and delivery solutions enable enterprise and government industry leaders to ideate, create, and orchestrate the flow of value through continuous delivery pipelines resulting in measurable business outcomes.
  • Post acquisition, TPG plans to commit up to $500 million of equity capital to create a leading, integrated DevOps platform for enterprise customers.
screen_shot_2019-10-21_at_3.35.49_pm.png

Cinven’s Acquisition of JAGGAER

  • JAGGAER provides a cloud-based spend management platform for large- and medium-sized enterprises, enabling its more than 2,000 clients to connect to a network of 4 million suppliers in 70 countries across the Americas, APAC, and EMEA.
  • The Company’s Source-to-Pay eProcurement and spend management solutions deliver a fluid supply chain for clients, driven by powerful spend analytics, vendor sourcing, CLM, savings tracking, and efficient accounts payable systems.
  • Cinven plans to support JAGGAER’s management team to drive growth through increased investment in R&D to capitalize on the success of recent product launches, as well as to continue to make further acquisitions.
screen_shot_2019-10-21_at_3.36.53_pm.png

Genstar Capital’s Investment in insightsoftware

  • insightsoftware provides enterprise performance management (“EPM”) reporting software to over 375,000 global users across industry verticals.
  • The Company’s financial and operations reporting software complements ERP systems by enabling real-time automated reporting, data syncing, and analytics for hundreds of scenarios, allowing users to focus on analysis and effective business decisions.
  • Under Genstar’s ownership, insightsoftware plans to accelerate growth by expanding into new geographic regions, including EMEA and APAC, and new product categories, such as planning and forecasting.

Software Acquisition Activity – Strategic Acquirers

Most Active Strategic Acquirers of Software Assets by Volume1

screen_shot_2019-10-21_at_3.43.25_pm.png

  • The 10 most active strategic software acquirers registered 45 acquisitions through YTD Sep 2019. Activity among large strategic software acquirers remains on pace with 2018 levels.
  • Microsoft was the most active strategic acquirer through YTD Sep 2019, completing 10 acquisitions.
  • Notable 3Q 2019 strategic software transactions include Salesforce’s pending acquisition of ClickSoftware, Cisco’s pending acquisition of CloudCherry, and Microsoft’s acquisitions of PromoteIQ and BlueTalon.

Global Strategic Acquirer Software M&A Activity by Volume1

screen_shot_2019-10-21_at_3.44.19_pm.png

  • Global strategic software M&A registered 512 acquisitions in 3Q 2019, representing a 25% increase over 3Q 2018.
  • Cash-rich strategics remain highly acquisitive as management teams continue to view inorganic growth as a key value-creation strategy. Many large diversified software companies are pursuing vertical-specific software acquisitions as they look to expand into new markets and add next generation technology.

Note: Includes control investments only.

Software Acquisition Activity – Private Equity

Most Active Private Equity Buyers of New Software Platforms by Volume1

screen_shot_2019-10-21_at_3.52.00_pm.png

  • The 10 most active software investors completed 47 new platform investments through YTD Sep 2019.
  • Thoma Bravo remained the most active software private equity firm through YTD Sep 2019, completing eight platform acquisitions.
  • Notable 3Q 2019 private equity platform acquisitions include Vista Equity’s pending acquisition of Acquia, Francisco Partners’ pending acquisition of LegalZoom, and Warburg Pincus’ acquisition of WebPT.

Global Private Equity New Software platforms M&A Activity by Volume1

screen_shot_2019-10-21_at_3.53.00_pm.png

  • Globally, private equity buyers registered 96 new software platform investments in 3Q 2019, a slight decrease from 2Q 2019.
  • Private equity investment across the software sector continues to exhibit strong momentum as dry powder remains at all-time highs and fundraising activity continues its strong momentum, especially for technology focused funds.

Note: Includes control new platform investments only. Excludes add-on acquisitions.

Application Software – M&A Market Summary

screen_shot_2019-10-21_at_3.54.15_pm.png

  • Application Software M&A registered 400 transactions in 3Q 2019, remaining in line with historical averages.
  • Median reported Application Software M&A transaction multiples decreased slightly to 3.1x revenue in 3Q 2019.

Notable Application Software M&A Transactions1,5

screen_shot_2019-10-21_at_3.55.15_pm.png

  • In 3Q 2019, both strategic and financial buyers were highly active in pursuing application software targets, as vertical-specific software companies remain highly sought after.
  • Notable 3Q 2019 vertical-specific transactions include Advent’s pending acquisition of Transaction Services Group (Membership Management), Lovell Minnick Partners’ acquisition of Inside Real Estate (Real Estate), and Providence Strategic Growth’s acquisition of I’Car Systems (Automotive).

SaaS – M&A Market Summary

screen_shot_2019-10-21_at_3.56.02_pm.png

  • SaaS M&A volume again decreased slightly, registering 50 transactions in 3Q 2019.
  • Median reported SaaS transaction revenue multiples decreased to 4.1x revenue in 3Q 2019.

Notable SaaS M&A Transactions1,5

screen_shot_2019-10-21_at_3.56.49_pm.png

  • Demand for cloud-based delivery models remains strong, resulting in continued robust M&A activity by both strategic and private equity buyers.
  • Notable 3Q 2019 SaaS transactions include Salesforce’s acquisition of ClickSoftware, Vista Equity’s acquisition of AltaReturn, and Roper’s acquisition of iPipeline.

Data and Analytics – M&A Market Summary

screen_shot_2019-10-21_at_3.57.47_pm.png

  • Data and Analytics M&A registered 132 transactions in 3Q 2019, a slight decrease from the prior quarter.
  • Median reported Data and Analytics transaction multiples increased slightly to 2.7x in 3Q 2019.

Notable Data and Analytics M&A Transactions1

screen_shot_2019-10-21_at_3.58.48_pm.png

  • Data and Analytics remained a key focus area for enterprises in 3Q 2019 as companies increasingly seek data-driven insights and visibility to support critical decision-making.
  • Notable 3Q 2019 Data and Analytics transactions include Cisco’s pending acquisition of CloudCherry, Salesforce’s acquisition of Tableau, and Publicis’ acquisition of Epsilon Data Management.

Infrastructure Software – M&A Market Summary

screen_shot_2019-10-21_at_3.59.38_pm.png

  • Infrastructure Software M&A registered 76 transactions in 3Q 2019, a decline from the record high of 101 in 2Q 2019.
  • In 3Q 2019, median reported Infrastructure Software transaction multiples increased to 3.3x revenue.

Notable Infrastructure Software M&A Transactions1

screen_shot_2019-10-21_at_4.00.27_pm.png

  • Infrastructure Software M&A activity remained robust in 3Q 2019, as both private equity investors and established software vendors continue to acquire software assets to build holistic security platforms.
  • Noteworthy Infrastructure Software M&A transactions in 3Q 2019 include Broadcom’s pending acquisition of Symantec’s Enterprise Security Assets, Vmware’s pending acquisition of Pivotal Software, and TPG Capital’s pending acquisition of CollabNet VersionOne.

Private Placement Activity By Software Sector

Private Placements by Software Sub-Sector and New Capital Raised1,4

screen_shot_2019-10-21_at_4.01.46_pm.png

  • There were 1,165 private placement financings in 3Q 2019, which represents a 19% increase over 3Q 2018.
  • Total reported capital investment in the software sector declined slightly in 3Q 2019.

Private Placement Capital Raised by Round1,4 (As Percentage of Total Reported Private Placement Capital)

screen_shot_2019-10-21_at_4.03.00_pm.png

  • In 3Q 2019, the majority of private capital invested was in late stage (C – later) rounds, comprising 58% of total capital invested.
  • Notable late stage rounds included TouchBistro’s $119 million Series E investment led by OMERS, GitLab’s $268 million Series E investment led by Goldman Sachs and ICONIQ, and Lucidworks’ $100 million Series F investment led by Francisco Partners and TPG.

Select Recent Software Private Placements1,4

screen_shot_2019-10-21_at_4.03.55_pm.png

Note: Financial information presented above represents reported capital raised only.

Public Software Valuation Multiples by Sector1

screen_shot_2019-10-21_at_4.04.50_pm.png

Key Metrics by Sector – Comparable Public Software Companies1

screen_shot_2019-10-21_at_4.05.40_pm.png

Summary of Technology IPOs

Recent U.S. Technology IPO Activity (by Offering Size)1

screen_shot_2019-10-21_at_4.06.24_pm.png

  • Continuing the momentum from the previous quarter, IPO activity remained strong with five technology companies listing publicly in 3Q 2019.
  • Public investors have signaled a renewed focus and scrutiny on fundamentals, as unprofitable but highly touted IPOs are trading at or below their IPO price.
  • Notable 3Q 2019 IPOs include Ping Identity, Datadog, Cloudflare, and Dynatrace.

screen_shot_2019-10-21_at_4.07.43_pm.png

Key Performance Metrics for Recent Software IPOs1

screen_shot_2019-10-21_at_4.08.23_pm.png

Debt Market Overview

screen_shot_2019-10-21_at_4.08.56_pm.png

  • Median middle market LBO loan multiples in YTD 2019 decreased slightly to 5.5x total leverage.
  • Middle market LBO loan volume decreased to $1.1 billion in 3Q 2019.

screen_shot_2019-10-21_at_4.09.36_pm.png

  • Technology companies were the largest recipients of middle market LBO loans in YTD 2019, representing 21.3% of new issuance.
  • Median LBO debt percentages again decreased slightly to 46% of total purchase price in YTD 2019.

Select HW TMT Transactions

screen_shot_2019-10-21_at_4.10.20_pm.png

Appendix: Software Sector Public Company Universe1

screen_shot_2019-10-21_at_4.11.01_pm.png

Appendix: Software Sector Public Company Metrics1

screen_shot_2019-10-21_at_4.11.43_pm.png

screen_shot_2019-10-21_at_4.12.10_pm.png

screen_shot_2019-10-21_at_4.12.36_pm.png

screen_shot_2019-10-21_at_4.13.02_pm.png

screen_shot_2019-10-21_at_4.13.36_pm.png

screen_shot_2019-10-21_at_4.14.27_pm.png

screen_shot_2019-10-21_at_4.14.53_pm.png

screen_shot_2019-10-21_at_4.15.24_pm.png

1. FactSet

2. PNC Capital Markets

3. S&P LCD stats

4. PitchBook

5. HW proprietary transaction information

 

The information and views contained in this report were prepared by Harris Williams LLC (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes 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 securities or financial instruments or 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. 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 officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The securities and 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 necessary and based upon their specific financial situations and investment objectives. Also, past performance is not 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.

Harris Williams LLC is a registered broker-dealer and member of FINRA and SIPC. Harris Williams & Co. Ltd is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 07078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. Corporate Finance Advisors GmbH is registered in the commercial register of the local court of Frankfurt am Main, Germany, under HRB 107540. The registered address is Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany (email address: hwgermany@harriswilliams.com). Geschäftsführer/Directors: Jeffery H. Perkins, Paul Poggi. (VAT No. awaited). Harris Williams is a trade name under which Harris Williams LLC, Harris Williams & Co. Ltd and Harris Williams & Co. Corporate Finance Advisors GmbH conduct business.