Selling out vs. Scaling up Software buyers findings & The 3 hats Paddy MccGwire, Managing Director E: pm@silverpeakib.com T: +44 (0) 20 7659 0310 London, 31 st January 2018 LONDON | PARIS | MILAN | HAMBURG | MUNICH | BERLIN Silverpeak LLP is an authorised representative of Silverpeak Capital Ltd, which is authorised and regulated by the Financial Conduct Authority
Geographical distribution of software leaders: US dominates USA 2% China 2% 4% 6% 3% 3% UK 9% 1% Canada 1% Germany Israel France Japan New Zealand Switzerland 69% Note: based on HQ location, source: CapitalIQ page | CONFIDENTIAL 2 LONDON | PARIS | MILAN | HAMBURG | MUNICH | BERLIN
Ranking by acquisition propensity of software leaders Aggregate number of acquisitions per company since 2012 TIER 1 [50-100] 100 80 60 TIER 2 [21-50] 40 TIER 3 [11-20] TIER 4 [0-10] 20 0 page | CONFIDENTIAL 3 LONDON | PARIS | MILAN | HAMBURG | MUNICH | BERLIN
Acquisition trends across years Aggregate number of acquisitions per company since 2012 TIER 1 TIER 2 TIER 3 TIER 4 Commentaries: 95 ▪ 2017 has seen a decrease in 87 83 the number of deals across all 76 tiers of buyers ▪ More marked for Tier 1 buyers 66 66 66 65 60 ▪ Tiers 3 and 4 are more stable and have similar levels 49 43 42 41 ▪ 2015 and 2016 have seen very 40 40 37 36 36 35 active Tier 1 buyers 34 33 32 30 26 ▪ 2013 has seen a peak of activity for Tier 2 buyers 2012 2013 2014 2015 2016 2017 As of 11 th December 2017, source: CapitalIQ, Silverpeak analysis page | CONFIDENTIAL 4 LONDON | PARIS | MILAN | HAMBURG | MUNICH | BERLIN
Take away points ▪ Of European software exits: ▪ Dassault is the most acquisitive European large software company ― 25% to US buyers (Ranked #9) ― 65% to European buyers ▪ 9 of the 16 most active buyers ▪ Financial buyers completed c.10% of software companies are NOT of all deals within the last 3 years one of the 69 global software leaders ▪ Few strategic and financial acquirers are repeat-buyers of European software businesses page | CONFIDENTIAL 5 LONDON | PARIS | MILAN | HAMBURG | MUNICH | BERLIN
The 3 hats Company Shareholder Management Identify individual objectives page | CONFIDENTIAL 6 LONDON | PARIS | MILAN | HAMBURG | MUNICH | BERLIN
Different positive outcomes Shareholder refresh Artificial Intelligence IT consultancy €20m growth capital €25m existing share sale sold to sold to Private Equity page | CONFIDENTIAL 7 LONDON | PARIS | MILAN | HAMBURG | MUNICH | BERLIN
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