ASA Technology M&A Update Presentation November 2014 MERGERS & ACQUISITIONS CAPITAL MARKETS FINANCIAL RESTRUCTURING FINANCIAL ADVISORY SERVICES HL.com 0
ASA Technology M&A Disclaimer Update Presentation These materials, and any oral or video presentation that may supplement them (collectively, the “materials”) are being provided to you by Houlihan Lokey for discussion purposes only and may not be relied upon by any person or entity for any purpose except as expressly permitted by Houlihan Lokey’s engagement letter (if any). The materials are provided on a confidential basis and may not be disclosed, summarized, reproduced, disseminated or quoted or otherwise referred to, in whole or in part, without our express prior written consent. The information used in preparing the materials was obtained from or through various sources, and Houlihan Lokey makes no representations as to the accuracy or completeness of such information and expressly disclaims any liability associated therewith. Houlihan Lokey assumes no responsibility for independent verification of such information and has relied on such information being true, complete and accurate. To the extent such information includes estimates and forecasts of future financial performance, we have assumed that such estimates and forecasts have been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of the management that provided such information (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). Any analyses contained herein (as well as any suggestions or recommendations contained herein and/or derived from the content of the materials) are preliminary in nature, speak as of the date hereof, and are subject to reconsideration and modification. Any statements and estimates contained in the materials constitute Houlihan Lokey’s judgment and should be regarded as indicative, preliminary and for illustrative purposes only. In addition, our analyses are not and do not purport to be appraisals of the assets, stock, or business of any company or opinions concerning the fairness of any proposal or “offer” price that may be referred to herein. Houlihan Lokey makes no representations as to the actual value which may be received in connection with any transaction. The materials should not be considered a recommendation with respect to any transaction or other matter. Houlihan Lokey undertakes no obligation to update, revise or reaffirm the materials. Houlihan Lokey is a trade name for Houlihan Lokey, Inc. and its subsidiaries and certain of its affiliates. Houlihan Lokey and its affiliates, including ORIX USA Corporation and its subsidiaries and affiliates (collectively, the “Houlihan Lokey Group”), engage in providing investment banking, securities trading, financing, and financial advisory services and other commercial and investment banking products and services to a wide range of institutions and individuals. The materials do not constitute an offer or solicitation to sell or purchase any securities and are not a commitment by the Houlihan Lokey Group to provide or arrange any financing for any transaction or to purchase any security in connection therewith. In the ordinary course of business, the Houlihan Lokey Group and certain of its employees, as well as investment funds in which they may have financial interests or with which they may co-invest, may acquire, hold or sell, long or short positions, or trade or otherwise effect transactions, in debt, equity, and other securities and financial instruments (including bank loans and other obligations) of, or investments in, your company or any other party that may be involved in the matters mentioned in the materials or have other relationships with such parties. With respect to any such securities, financial instruments and/or investments, all rights in respect of such securities, financial instruments and investments, including any voting rights, will be exercised by the holder of the rights, in its sole discretion. In addition, the Houlihan Lokey Group may in the past have had, and may currently or in the future have, financial advisory or other investment banking relationships with parties involved in the matters mentioned in the materials, including parties that may have interests with respect to your company, any transaction or other parties involved in any transaction, from which conflicting interests or duties may arise. Although the Houlihan Lokey Group in the course of such other activities and relationships may acquire information about your company, any transaction or such other parties, or that otherwise may be of interest to your company, the Houlihan Lokey Group shall have no obligation to, and may not be contractually permitted to, disclose such information, or the fact that the Houlihan Lokey Group is in possession of such information, to your company or to use such information on your company’s behalf. 1
Technology M&A Speaker Biographies Breakfast Presentation Susan Blanco – Managing Director, Houlihan Lokey Ms. Blanco is a Managing Director in Houlihan Lokey’s Technology Group. She has spent her entire career focused on technology and technology investment banking. Ms. Blanco is based in the firm’s San Francisco office. Before joining Houlihan Lokey, Ms. Blanco was a co-founder of ArchPoint Partners, LLC, a boutique investment bank focused on providing mergers and acquisitions and capital raising advisory services to technology companies. She has completed numerous transactions for public and private companies in the technology sector. Ms. Blanco’s extensive investment banking background includes mergers and acquisitions, public and private equity issues, and debt transactions. She has completed transactions with leading private equity sponsors and venture capital firms, as well as strategic transactions with global corporations, including IBM, Intuit Inc., McKesson Corp., Verisk Analytics, Inc., Infineon Technologies AG, British Telecommunications, Virgin Mobile, and Google. Prior to founding ArchPoint, Ms. Blanco worked for Montgomery & Co., where she sourced, evaluated, and executed mergers and capital raises for growth companies in the software and technology sectors. Before joining Montgomery, she was a Managing Director at The NASDAQ Stock Market. Prior to that, she was a Vice President in investment banking at JPMorgan, where she executed several billion dollars in M&A transactions and equity and debt transactions with clients in the technology, media, and telecom sectors. Ms. Blanco started her banking career as an associate at Hambrect & Quist. She has a technology operations background and worked in the storage industry in a variety of international and domestic business development roles. Ms. Blanco serves on the Finance Committee of the Second Harvest Food Bank of Santa Clara and San Mateo Counties and is the Membership Chair of the San Francisco Opera Guild (Peninsula Chapter). Ms. Blanco holds a B.S. in Engineering Physics from the University of California, Berkeley and an M.S. in Materials Science and Engineering from Stanford University. 2
ASA Technology M&A Technology Sector M&A Overview Update Presentation Commentary A number of industry trends are driving shareholders to anticipate increased M&A deal volume Technology sector change is opening up new market opportunities and driving significant disruption at an accelerating rate: Growing availability of Internet access around the globe Proliferation of alternative access channels have led to an increasingly connected consumer base, including: – Mobile devices – Social media networks – Spread of user-generated content Advancements in processor speed and storage Increasing proliferation of alternative operating systems, devices and platforms, demanding greater integration capabilities Start-ups leading large tech players to move more quickly to remain ahead of newcomers Technology companies are responding to customer and market needs (often through M&A) in seven areas: Scale Cloud Services Mobility Big Data Integration Eliminate Enhance Existing Capabilities Competitors Products 3 Source: Deloitte – Top 10 Issues for Technology M&A in 2014
ASA Technology M&A Global Technology Sector M&A Trends Update Presentation Commentary Even compared to a recent strong M&A landscape, the technology market has shown tremendous performance in recent years In Q1 2014, aggregate deal value was at $66.6 billion, up 41% sequentially and 83% YOY Average deal value increased 50% sequentially to $304 million, but was down 2% YOY from $309 million in Q1 2013 Deals under $100 million increased 64% YOY in volume and 86% in value Deals between $100 and $500 million grew 114% in volume and 137% in value Q1 2014 Aggregate Value of Announced Deals by Deal Size Q1 14 $66.6bn 6% 16% 11% 68% $3.8bn $10.5bn $7.3bn $45.0bn 149 deals 47 deals 10 deals 13 deals Q1 2013 Aggregate Value of Announced Deals by Deal Size Q1 13 $36.4bn 6% 12% 2% 81% $2.0bn $4.4bn $0.7bn $29.3bn 91 deals 22 deals 1 deal 4 deals <$100m $100m-$500m $500m-$1b $1b+ Note: Denotes number of deals with values disclosed 4 Source: EY analysis of The 451 Group Research M&A KnowledgeBase, accessed 4 April 2014
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