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M&A SNAPSHOT
Q3 2013
OCTOBER 7TH, 2013

M&A SNAPSHOT
OVERVIEW COMMENTARY
After a noticeably slow start in the rst half of 2013, M&A activity is trending upward in Q3. There were 41 M&A transactions within the $25mm - $1b range, up 24% from the 33 deals in the previous quarter. Total consideration paid for these 41 deals was $8.1b, up 15% from Q2. U.S.-based M&A deals accounted for 54% of transactions in Q3, which is the rst time since Q1 2012 that over half of the M&A deals were based in the United States. Q3 witnessed the growing importance placed on real-time bidding (RTB) and programmatic ad buying technology, as industry veterans and new tech incumbents alike made strategic moves to position themselves for the $3.3b programmatic ad buying market. AOL paid $405mm for Adap.tv, a leading video ad platform, representing an 8.4x return to investors. Twitter spent $350mm to acquire mobile ad exchange MoPub, representing an 18.9x return to investors. Millennial Media also participated in the action by acquiring mobile ad company Jumptap for $237mm, which is 3.7x Jumptaps 2012 revenue. Yahoo continues its M&A shopping spree into Q3 with 8 announced deals, making it to the top of our most active leader board for the third consecutive quarter. Yahoo is bolstering its technology and team in many dierent areas, encompassing fantasy sports league applications (Bignoggins Productions), image recognition engine (IQ Engines), mobile advertising technology (AdMovate) and desktop browser software (RockMelt), among others. Apple also picked up its M&A pace in Q3 by acquiring 5 companies. Three of Apples acquisitions are geared toward improving its mapping and local business capabilities, including Locationary, Hopstop and Embark.

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 represent successful business-building endeavors.
68 61

MARKET TONE
Rebounding after a slow start to 2013.

2011 Q3 Q4
63 57

Q1
41

2012 Q2 Q3
57 44

Q4
63

Q1
41 34

2013 Q2
33

Q3
41

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

$14 $12 $11 $12 $9 $14 $12 $10
$12 $6 $7 $8

Total Consideration Paid ($b)............................................................... 27

23

23

19
12

16

15

14

12

13

11

14

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

$98 $113 $80 $90

$103

$127

$107

$92

$103

$104

$130

$112

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

48% 49% 52% 42%
56% 46% 47% 48%
56% 42% 42% 54%

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

457$

482$

450$

417$

440$ 352$ 364$

466$
352$ 387$ 327$

406$

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 third quarter of 2013.

ACQUIRER

# 8 5 4 3 3 3 3 2 2 2 2 2

TARGETS

NOTABLE ACQUIRERS (continued)

ACQUIRER # 2 1 1 1 1 1 1 1 1 1 1 1 1
5
(Devices and Services Business)

TARGETS

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

M&A transactions that have announced values between $25mm and $1b announced in Q3 2013 within the Internet | mobile | digital media sectors.
# ANNOUNCED DATE BUYER TARGET TRANSACTION VALUE ($MM) TARGET DESCRIPTION AP INSIGHT SM M&A ALERT VCBACKED

NON SERVICE PROVIDER TRANSACTIONS 1 09/30/2013 Vista Equity Partners The Active Network $908 Provides Internet-based applications for activity and participant management. San Diego, CA-based. !

09/26/2013

PayPal

Braintree

$800

Enables merchants and businesses to accept payments on their web sites or mobile apps. Chicago, IL-based.

09/09/2013

HGST (Western Digital Subsidiary)

Virident Systems

$685

Provides server-side flash storage solutions for virtualization, cloud computing and webscale applications. Milipitas, CA-based.

09/10/2013

Cisco

WhipTail Technologies

$415

Produces storage systems based on flash memory chips, which allow data to move through servers with greater speed, efficiency and volume. Whippany, NJbased. Offers a technology platform that automates the process of buying and selling online video advertising on the Web, mobile devices and connected TVs. San Mateo, CA-based. Mobile ad exchange platform that helps mobile app publishers manage and sell their ad inventory. Products include the MoPub Marketplace, which is a real-time bidding (RTB) exchange. San Francisco, CA-based. Develops mobile games. China-based.

08/07/2013

AOL

Adap.tv

$405

09/09/2013

Twitter

MoPub

$350

07/22/2013

Ourpalm

Beijing to play the crab Technology Co.

$325

08/30/2013

Cumulus Media

Dial Global

$268

Operates as an independent, full-service network radio company in the United States. The company distributes, produces and syndicates programming and services to radio stations. NYC-based. Operates a mobile ad network. Boston, MA-based. !

08/13/2013

Millennial Media

Jumptap

$240

10

08/30/2013

Townsquare Media

Cumulus Media

$238

Comprises 53 radio broadcasting stations. Atlanta, GA-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)

# 11 ANNOUNCED DATE 08/26/2013 BUYER Tangel Publishing TARGET Beijing Magic Universe Network Arsys Internet S.L. TRANSACTION VALUE ($MM) $225 TARGET DESCRIPTION Develops mobile games. Beijing-based. AP INSIGHT SM M&A ALERT VCBACKED

12

08/19/2013

1&1 Internet AG

$187

Offers public, private and hybrid cloud hosting, managed hosting, marketing tools, e-Commerce solutions and domain registration. Spain-based.

13

09/12/2013

Extreme Networks

Enterasys Networks

$180

Provides wired and wireless network infrastructure and security solutions encompassing voice and video, cloud computing, compliance and networking for data centers. Salem, MA-based. Offers mobile device protection that helps consumers safeguard their personal data from fraudulent activities. Also offers mobile phone and gadget insurance products and data backup. UK-based. Develops and markets infrastructure Software as a Service solutions for the mortgage and real estate industry. Los Angeles, CA-based.

14

09/05/2013

Assurant

Lifestyle Services Group

$167

15

08/21/2013

Altisource Portfolio Solutions

Equator

$150

16

09/23/2013

ACI Worldwide

Official Payments Holdings

$148

Provides electronic payment solutions, which enable clients to accept payments by credit card, debit card and electronic check via mobile devices, the Internet, telephone and PoS devices. Norcross, GA-based. Provides interactive voice response (IVR) and Voice over IP (VoIP) solutions to enterprises. Orlando, FL-based. Provides software that allows mobile operators to cost effectively plan and operate their wireless networks while ensuring high quality of service to customers. London-based. Provides creative content production, media sales and digital merchandising. Canada-based. !

17

07/10/2013

Aspect Software

Voxeo

$145

18

09/03/2013

Amdocs

Actix

$120

19

07/17/2013

Cineplex

EK3 Technologies

$113

20

07/08/2013

Hasbro

Backflip Studios

$112

Develops iPhone game apps. Boulder, CO-based.

21

07/22/2013

Huayi Brothers Media

Guangzhou Yin Han Technology Company Limited

$108

Develops and distributes mobile games via instant messaging web-based communities. China-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)

# 22 ANNOUNCED DATE 08/26/2013 BUYER Newcap TARGET Bell Media TRANSACTION VALUE ($MM) $107 TARGET DESCRIPTION Comprises five radio broadcasting stations in Toronto and Vancouver. Canadabased. Interactive website that provides information about films, new releases and the box office numbers for both France and the United States. Includes an online ticket ordering service. Paris-based. Operates print and online community media franchises. Publishes daily and weekly newspapers, magazines and Internet sites. Campbell Hall, NY-based. AP INSIGHT SM M&A ALERT VCBACKED

23

07/16/2013

F. Marc de Lacharrire (Fimalac) Socit Anonyme Newcastle Investment Corp.

AlloCin SA

$88

24

09/03/2013

Dow Jones Local Media Group

$87

25

07/16/2013

Hubbard Radio

Sandusky Radio

$86

Owns and operates radio stations. Bellevue, WA-based.

26

08/03/2013

New York Times Company

The New England Media Group and 49% Stake in Metro Boston Locu

$70

Owns and operates subscription, news and informational websites. Boston, MAbased.

27

08/19/2013

Go Daddy Group

$70

Helps local businesses such as restaurants, spas, salons, photographers, accountants and home-remodeling companies manage listing data regarding their businesses on search engines and local review sites. Cambridge, MA-based. Comprises a portfolio of brands such as Benaughty.com, Flirt.com and a number of other casual dating sites. UK-based.

28

07/15/2013

Grendall Investment Limited

Cupid plc, Casual Dating Businesses

$65

29

07/03/2013

Perform Group

Opta Sportsdata

$61

Operates as a compiler of sports performance data for newspapers, mobile data feeds, Internet applications, television programs and fantasy games. Londonbased. Designs and develops applications for iPhones, iPads, Android, BlackBerry, Windows Phone and HTML5. London-based.

30

09/05/2013

Monitise Create Limited

Grapple Mobile Limited

$60

31

08/19/2013

Zillow

NMD Interactive

$50

Operates a real estate site which lists properties for sale. Offers criteria such as price, location, bedrooms and other basics for users to search for a sale or rental listing. NYC-based. Offers Internet-based poker education services. The company provides learning materials and online poker games. Gibralter-based.

32

07/11/2013

Playtech Limited

Swerford Holdings

$50

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)

# 33 ANNOUNCED DATE 09/17/2013 BUYER Google TARGET Bump Technologies TRANSACTION VALUE ($MM) $45 TARGET DESCRIPTION Offers Bump, an application that enables users to share data by tapping smartphones. Mountain View, CA-based. AP INSIGHT SM M&A ALERT VCBACKED !

34

09/04/2013

Cinram Group

Saffron Digital

$45

Online video platform for the digital entertainment industry. Powers end-to-end digital rights management (DRM) video solutions for carriers, OEMs and retailers. London-based. Develops gesture recognition and body tracking software solutions for customers to add gesture-based interfaces to their products. Israel-based.

35

07/16/2013

Intel

Omek Interactive

$40

36

07/29/2013

Bauer Consumer Media

TIML Radio

$34

Operates a radio station in the United Kingdom under the name Absolute Radio. It offers competitions, music, community and football programs. London-based.

37

09/04/2013

Palatine Private Equity

Icelolly Marketing Limited

$27

Operates a holiday price comparison site for users to search and compare holiday deals. Bradford, UK-based.

SERVICE PROVIDER TRANSACTIONS 1 07/19/2013 Cinven Limited Host Europe WVS Limited $668 Operates as an Internet hosting company, providing full monitoring and management of operating systems, daily or weekly backups, firewall services and load balancing. UK-based. Provides Internet services. Australia-based.

08/05/2013

iiNet

Adam Internet Holdings

$53

08/27/2013

JSC TransTeleCom Company

Maginfo JSC

$45

Provides fixed broadband and cable TV services. Russia-based.

09/04/2013

Fusion Telecommunications International

Cypress Communications. and BroadvoxGo!

$32

Cypress Communications and BroadvoxGo! offer hosted and managed communications solutions and integrated telecommunication services. Based in Atlanta, GA and Cleveland, OH.

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 third quarter of 2013 with consideration in excess of $1b or with unannounced transaction values.
# 1 ANNOUNCED DATE 08/09/2013 BUYER America Movil S.A.B. de C.V. Telefnica Deutschland Holding AG Microsoft TARGET Koninklijke KPN N.V. TRANSACTION VALUE ($MM) $28,510 TARGET DESCRIPTION Offers fixed and mobile telephony, broadband Internet and television service, as well as mobile access portfolio of voice, SMS and data services. Netherlandsbased. Offers mobile voice and data services including phone, email, multimedia, prepaid calling cards and Internet access. Germany-based. Comprises devices and services business which include mobile phone handset manufacturing, license Nokias patents and use of Nokias mapping services. Finland-based. Provides digital wireless services under the Cricket brand name. Offers unlimited local and long distance services, text messaging, mobile web, 411, navigation and data back-up services. San Diego, CA-based. Provides platform for access to email, voice, instant messaging, short message service and Internet-based applications. Canada-based. Provides intelligent cybersecurity technologies. Columbia, MD-based. Operates geostationary satellites and provides wireless voice, two-way radio, push-to-track, mobile data and fax services. Reston, VA-based. Focuses on local business data for mobile and web content, search, daily deals and navigation applications. Canada-based. Operates an online app that rewards users for buying products. Enables shoppers to earn rewards for staying loyal to their favorite brands. San Mateo, CA-based. Operates Decide.com, a price prediction and shopping engine. Its shopping service tells shoppers when to buy with confidence, or wait for a price drop or newer model to be released for the purchase of electronics. Seattle, WA-based. Develops and delivers speech translation technology to mobile devices and tablets. Offers Jibbigo, a self-contained speech-to-speech translation app for iPhones, iPods and iPads. Pittsburg, PA-based. Community marketplace where people discover, book and host activities inspired by their personal passions. NYC-based. ! ! AP INSIGHT SM M&A ALERT VCBACKED

07/23/2013

E-Plus Mobilfunk GmbH & Co. KG Nokia Corporation, Devices & Services Business Leap Wireless

$6,992

09/02/2013

$5,000

07/12/2013

AT&T

$4,590

09/23/2013

Hamblin Watsa Investment Counsel Cisco Dish Network

BlackBerry

$4,175

6 7

07/23/2013 07/23/2013

Sourcefire LightSquared LP

$2,395 $2,220

8 9

07/19/2013 07/20/2013

Apple Dropbox

Locationary Endorse

10

09/06/2013

eBay

Decide

11

08/12/2013

Facebook

Mobile Technologies

12

09/18/2013

Groupon

Arootz

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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