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M&A SNAPSHOT
Q1 2013
APRIL 2nd, 2013

M&A SNAPSHOT
OVERVIEW COMMENTARY
M&A activity slowed considerably in Q1 2013, however, we believe levels are likely to rebound in the next quarter or two. Given the long lead times from initiation of M&A conversations to public announcement, looking back to Q3 and Q4 of 2012 gives us some answers to Q1 2013 lackluster levels. Economic uncertainty adversely impacts the condence of boards and senior management. We believe the U.S. budget paralysis and ongoing concerns about European economies played a material role in sapping the strength out of the M&A market over the past quarter. M&A activity within the $25mm - $1b range in Q1 2013 declined by a considerable 46% from Q4 2012 and was down 17% year-over-year from Q1 2012. Total consideration paid also declined by 40%, from $10b in Q4 2012 to $6b in the rst quarter of 2013. The evolution of commerce continues to be a signicant M&A theme, as 15% of transactions within the $25mm - $1b range were driven by this trend. Notable deals include Ingenicos $485mm acquisition of Ogone, ACI Worldwides $266mm acquisition of Online Resources, Googles $125mm acquisition of Channel Intelligence and FISs $120mm acquisition of mFoundry. In addition to e-commerce, proliferation of mobile device usage has prompted wireless carriers to explore methods to relieve the stress on mobile networks. In that vein, there were four network performance-enhancing transactions in Q1, including Ciscos $475mm acquisition of Intucell, Opera Softwares $155mm acquisition of Skyre Labs and Procera Networks $28mm acquisition of Vineyard Networks.

FOLLOWING ANALYSIS
M&A DASHBOARD: NOTABLE ACQUIRERS: M&A TRANSACTIONS: OTHER NOTABLE TRANSACTIONS:
SUMMARY OF QUARTERLY ACTIVITY IN NUMBERS AND TONE ACTIVE INFLUENTIAL BUYER ACTIVITY SUMMARY OF TRANSACTIONS BETWEEN $25MM-$1B IN VALUE SUMMARY OF NOTABLE TRANSACTIONS WITHOUT ANNOUNCED VALUE OR ABOVE $1B.

COMING SOON
ANALYSIS OF VC-BACKED M&A EXITS

M&A DASHBOARD
COVERAGE
Architect Partners tracks M&A activity within the converging Internet | mobile | digital media sectors. The following assessment is focused on M&A transactions with announced values of between $25mm and $1B as these typically re p re s e n t s u c c e s s f u l b u s i n e s s - b u i l d i n g endeavors.

MARKET TONE
Slowed, but anticipate moderate increase in activity levels as we move into 2013. 2011 Q2 Q3
61 63

Q1
68

Q4
57

Q1
41

2012 Q2 Q3
57 44 41

Q4
63
57

2013 Q1

34

M&A Exits (#)1...........................................................................................

$14

$12

$11

$12 $9

$14

$12

$12

$14

$10

$12 $6

Total Consideration Paid ($b)...............................................................

27 23 23 19

12

16

12

15

17

14

18 13

Venture-Backed M&A Exits (#)............................................................

$98 $113 $80 $90
$103 $127

$103 $107

$127
$92

$107

$104

Median Transaction Size ($mm)..........................................................

48% 49% 52% 42%
56% 46%
56%

47%

46%

48%

47%

41%

U.S.-based Target (%).............................................................................

457$

482$

450$

417$

440$ 352$
352$

364$

440$

466$
364$ 387$

All Internet | Mobile | Digital Media M&A Exits(1)............................

Note: 1) Includes all Internet | mobile | digital media transactions regardless of transaction value. Transaction values within a range are presented as a mid-point value Source: Architect Partners, Capital IQ, company lings and public information

NOTABLE ACQUIRERS
The following acquirers are generally active or inuential buyers within the Internet | mobile | digital media sectors. Below, we highlight announced acquisitions by the most active players in the rst quarter of 2013.

ACQUIRER

# 4 3 3 2 2 2 2 2 2 2 2 2

TARGETS

NOTABLE ACQUIRERS (continued)

ACQUIRER # 2 2 2 2 2 2 2 2 1 1 1 1 1
5

TARGETS

M&A TRANSACTIONS: $25MM-$1B

M&A transactions that have announced values between $25mm and $1b announced in Q1 2013 within the Internet | mobile | digital media sectors.
# ANNOUNCED DATE BUYER TARGET TRANSACTION VALUE ($MM) TARGET DESCRIPTION AP INSIGHT SM M&A ALERT VCBACKED

NON SERVICE PROVIDER TRANSACTIONS 1 01/29/2013 Ingenico Ogone $485 Leading payment service provider in Europe offering e-commerce, ticketing, call centers, airlines and travel solutions. Brussels, Belgium-based. !

01/23/2013

Cisco

Intucell

$475

Provides self-optimizing network (SON) software that assists mobile carriers in managing and optimizing their cellular networks in response to changing conditions. Raanana, Israel-based. Develops and supplies a proprietary Digital Payment Framework to enable ePayment choices between consumers and financial institutions, creditors and billers. Chantilly, Virginia-based. Lifestyle Entertainment business includes audio, video, multimedia and accessories.

01/31/2013

ACI Worldwide

Online Resources

$266

01/29/2013

Funai Electric

02/15/2013

Opera Software

Koninklijke Philips Electronics NV, Lifestyle Entertainment Business Skyfire Labs

$202

$155

Offers Rocket Optimizer, which enables mobile carriers to optimize video or other multimedia content on crowded cellular networks. Also offers Horizon, a mobile browser extension and toolbar platform that allows users to personalize their mobile browsing experience. Mountain View, CA-based. Social site that discusses and recommends books. Santa Monica, CA-based.

03/28/2013

Amazon

Goodreads

$150

01/28/2013

Netgear

Sierra Wireless, AirCard Business

$145

Comprises intellectual property for manufacturing USB modems to provide mobile broadband connectivity to any computer. Carlsbad, California and Richmond, Canada-based. Develops and markets online games. Guangzhou, China-based.

02/05/2013

Ourpalm

Dovo Technology

$130

02/06/2013

Google

Channel Intelligence

$125

Offers a Where-to-Buy feature, which allows companies to commerce-enable any digital marketing asset, including websites, display ads, video reviews, email, Facebook and other social media. Orlando, FL-based.

Note: Transaction values within a range are presented as a mid-point value. Source: Architect Partners, Capital IQ, company lings and public information

M&A TRANSACTIONS: $25MM-$1B (continued)

# ANNOUNCED DATE BUYER TARGET TRANSACTION VALUE ($MM) TARGET DESCRIPTION AP INSIGHT SM M&A ALERT VCBACKED NON SERVICE PROVIDER TRANSACTIONS 10 01/31/2013 Fidelity National Information Services (FIS) Genesys Telecommunications Laboratories JDS Uniphase Canada mFoundry $120 Provides SaaS-based mobile banking and payments solutions to financial institutions and clients who use its services to power their mobile applications, digital wallets and NFC payments technology. Larkspur, CA-based. Offers cloud-based customer experience management (CEM) solutions, including in-bound and out-bound interactive voice response (IVR), virtual call centre, voice biometrics and payment processing solutions. Vienna, Virginia-based. Provides subscriber experience geo-location, capital budget management and automatic network optimization solutions for wireless operators and service providers. Newbury, UK-based. Generates social TV analytics by evaluating how and when people use social media in conjunction with their TV viewing. Cambridge, MA-based. ! !

11

02/26/2013

Angel.com Inc.

$110

12

03/08/2013

Arieso

$89

13

02/06/2013

Twitter

Bluefin Labs

$85

14

03/19/2013

NC2 Media

Lonely Planet Publications

$78

Publishes guidebooks, digital books, city guides and maps that provide travel details to travelers. Footscray, Australia-based.

15

03/15/2013

Dropbox

Orchestra

$75

Offers Mailbox, a mobile email app that aims to simplify the way in which users interact and sort through their email messages. Palo Alto, CA-based.

16

02/22/2013

Elbrus Capital

OSG Records Management ZAO

$48

Provides document and data management solutions, including i-Archive paper document archive, scanning and digitizing documents, e-Archive e-document archive, document workflow design and advice. Moscow, Russia-based. CBS Bizhub develops and provides e-commerce solutions and platforms. PT. Panpages owns and operates a Web portal. British Virgin Islands-based.

17

03/01/2013

KV Asia Capital

CBS Bizhub and PT. Panpages and PanPages Twistage and AccessVia

$39

18

03/05/2013

Perceptive Software

$32

Twistage provides an online video platform (OVP) for enterprises and digital publishers (New York, NY-based). AccessVia offers a publishing platform that allows retailers to deliver print and digital promotions (Seattle, Washingtonbased). Develops iPhone application that allows instant summarization of any Webpage or article. London, UK-based. !

19

03/25/2013

Yahoo

Summly

$30

Note: Transaction values within a range are presented as a mid-point value. Source: Architect Partners, Capital IQ, company lings and public information

M&A TRANSACTIONS: $25MM-$1B (continued)

# ANNOUNCED DATE BUYER TARGET TRANSACTION VALUE ($MM) TARGET DESCRIPTION AP INSIGHT SM M&A ALERT VCBACKED NON SERVICE PROVIDER TRANSACTIONS 20 01/07/2013 Procera Networks Vineyard Networks $28 Provides Deep Packet Inspection (DPI) and application classification technology, a method through which network operators can manage network traffic by prioritizing classes of traffic. Kelowna, Canada-based. Volition develops action adventure game Saints Row. Champaign, Illinois-based.

21

01/23/2013

Koch Media

Volition

$28

22

01/23/2013

Sega

THQ Canada

$26

Doing business as Relic Entertainment, the company develops games for PCs and consoles. Vancouver, Canada-based.

23

03/19/2013

Euromoney Institutional Investor

Insider Publishing Limited

$25

Publishes a weekly electronic newsletter, provides breaking news alerts, premium news alert and a Web application to access the latest news and issues on iPad. London, UK-based.

Note: Transaction values within a range are presented as a mid-point value. Source: Architect Partners, Capital IQ, company lings and public information

M&A TRANSACTIONS: $25MM-$1B (continued)

# ANNOUNCED DATE BUYER TARGET TRANSACTION VALUE ($MM) TARGET DESCRIPTION AP INSIGHT SM M&A ALERT VCBACKED SERVICE PROVIDER TRANSACTIONS 1 01/21/2013 ZON Multimdia Servios de Telecomunicaes e Multimdia AT&T Optimus SGPS SA $878 Operates mobile network and fixed communications network which includes transmission, backbone and local access. Maia, Portugal-based.

01/22/2013

Allied Wireless Communications Corporation, Alltel Assets Shaw Hamilton Ltd

$780

Wireless properties, including licences, network assets, retail stores and more than half a million subscribers. Includes spectrum in the 700MHz, 850MHz and 1900MHz bands covering primarily rural areas in the states of Georgia, Idaho, Illinois, North Carolina, Ohio and South Carolina. Provides communication services including digital and HDTV, high-speed Internet, Web hosting, international long-distance, phone, Internet and TV. Hamilton, Canada-based. Provides mobile and broadband services such as text, media messaging, games, music and video, as well as data connections via GPRS, HSDPA, 3G and WLAN. Slough, UK-based. Offers residential and commercial video, high speed Internet, voice, and data services. Fort Mill, South Carolina-based. !

01/14/2013

Rogers Communications

$406

03/01/2013

British Sky Broadcasting Group

Telefnica UK

$300

02/26/2013

TDS Telecommunications

Baja Broadband

$268

03/18/2013

M2 Telecommunications Group

Dodo Australia

$212

Provides telecommunication services including broadband Internet, wireless broadband, dial-up Internet, home phone, wireless telephony, Internet and VOIP services. Melbourne, Australia-based. Designs and sells Internet protocol (IP)-based telecommunications infrastructure products. Beijing, China-based. !

03/27/2013

Shah Capital Management

UTStarcom Holdings Corp

$99

01/22/2013

Intermedia.net

Telanetix

$53

Operates as a cloud based Internet protocol (IP) voice services company. Bellevue, WA-based.

03/18/2013

M2 Telecommunications Group

EFTEL Limited

$50

Provides broadband, wireless broadband, mobile, home phone, and VoIP services. Melbourne, Australia-based.

10

01/28/2013

Anite

Elektrobit System Test and Certain Related Assets in the United States and China Kentrox

$42

Provides radio channel emulation tools and testing solutions for the development of the wireless technologies. Oulu, Finland-based with certain related assets in the United States and China. Provides site monitoring, management and control solutions for wireless and fixed line telecommunications carriers, cable and broadband network providers and utility companies. Dublin, Ohio-based.

11

03/18/2013

Westell Technologies

Note: Transaction values within a range are presented as a mid-point value. Source: Architect Partners, Capital IQ, company lings and public information

M&A TRANSACTIONS: OTHER NOTABLE

A number of important transactions were announced in the rst quarter of 2013 with consideration in excess of $1b or with unannounced transaction values.
# 1 ANNOUNCED DATE 02/05/2013 BUYER Silver Lake Partners TARGET Dell TRANSACTION VALUE ($MM) $29,755 TARGET DESCRIPTION Develops, manufactures and markets mobility and desktop products, including notebooks, workstations, tablets, smartphones and desktop PCs, as well as servers and networking products. Round Rock, Texas-based. Provides entertainment and communications services, including cable broadband Internet, television and fixed line telephone services under the Virgin Media brand. New York, NY-based. Provides fourth generation wireless broadband services. Builds and operates mobile broadband networks that offer high-speed mobile Internet and residential Internet access services. Bellevue, WA-based. Engages in the ownership and operation of cable television systems in Colorado, Wyoming, Montana and Utah. Also provides broadband telecommunications services. Purchase, New York-based. Operates as an alternative telecom operator offering GSM, mobile, fixed broadband and telephony services. Moscow, Russia-based. ! AP INSIGHT SM M&A ALERT VCBACKED

02/05/2013

Liberty Global

Virgin Media

$24,182

01/08/2013

Dish Networks

Clearwire

$10,422

02/07/2013

Charter Communications

Bresnan Broadband

$2,621

03/27/2013

VTB Bank, Investment Arm

Tele2 Russia Telecom

$2,400

02/04/2013

Oracle

Acme Packets

$2,004

Provides session delivery network solutions that enable the delivery of voice, video, data and unified communications services and applications across Internet protocol (IP) networks. Bedford, MA-based. Provides telecommunications services, including local and international telecommunications services, mobile services and roaming services. Taipa, Macaubased. Provides policy management, diameter and SIP signaling, subscriber data management, performance intelligence center and SS7 signaling products. Morrisvile, North Carolina-based. Develops SaaS based social-media marketing software solutions that enable small and medium-sized businesses to create and manage their social networking profiles and promotions. Orem, Utah-based.

01/13/2013

CITIC Telecom International

Companhia de Telecomunicacoes de Macau Tekelec

$1,161

03/25/2013

Oracle

01/22/2013

Infusionsoft

GroSocial

Note: Transaction values within a range are presented as a mid-point value. Source: Architect Partners, Capital IQ, company lings and public information

10

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