M&A SNAPSHOT

Q2 2012
JULY 2012

M&A SNAPSHOT
OVERVIEW COMMENTARY
Within the $25 million - $1 billion transaction value range, M&A activity in Q2 2012 was up by 39% from Q1 2012. Acquirers spent $14b in total, twice as much as the previous quarter. Median transaction size increased by 23% from $103mm last quarter to $127mm this quarter. As expected, following slowdowns in the previous two quarters, we are seeing an increase in M&A activity. In Q2 2012, Facebook IPOed and announced six acquisitions, leading as the most active acquirer, notably with its $1b purchase of Instagram as the marquee purchase of the quarter. Microsoft also made a second major M&A move with its $1.2b purchase of Yammer. After its absence last quarter, Google announced four tactical acquisitions this quarter. The transformation of marketing and commerce continues as a major M&A theme, accounting for 26% of the total transactions within the $25mm-$1b transaction value range. Strategic acquisitions were made by companies such as Intuit (acquisitions of AisleBuyer and Demandforce), Oracle (acquisitions of Vitrue and and Collective Intellect), Salesforce (acquisitions of Buddy Media and ChoicePass), Groupon (acquisitions of Ditto and Breadcrumb), Facebook (acquisition of TagTile) and Google (acquisitions of TxVia and Kikscore). Managing the challenging demands video places upon mobile networks also continues to be an important M&A theme. Citrix made a very strategic move in this vein to extend its business into the telecom service provider market via its $435mm acquisition of Byte Mobile. Allot Communications also acquired mobile video management capabilities with their acquisition of VC-backed Ortiva Wireless. This past quarter, Architect Partners has published its M&A Alert on ten of the most strategic transactions in the quarter.

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. Q1
38

MARKET TONE
Good. Increased activity and healthy tone in the M&A market. Generally balanced buyer/seller dynamics. 2011 Q2 Q3
61 63

2010 Q2 Q3
68 40

2012 Q4
57 41

Q4
53

Q1
68

Q1

Q2
57

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

$12 $6 $12

$14

$12

$14 $11 $9

$5 27 17 18 16 23 23

$7

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

19 12

12

16

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

$100 $98 $105 $98 $113 $80 $103 $127

$75

$90

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

55% 45% 52% 49% 48% 49% 52% 42% 56% 46%

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

!"#$ !"#$$ !%#$$ !"&$ !'($ !%&$ !"'$ !(#$ %%&$ !"#$

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 in the second quarter of 2012.

ACQUIRER

# 6 4 4 3 2 2 2 2 2 2 2 2

TARGET

AUSTRALIAN INDEPENDENT BUSINESS MEDIA

NOTABLE ACQUIRERS (continued)

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

TARGET

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

Below highlights M&A transactions that have announced values of between $25mm and $1b announced in Q2 2012 within the converging Internet | mobile | digital media sectors.
# ANNOUNCED DATE BUYER TARGET TRANSACTION VALUE ($MM) TARGET DESCRIPTION AP INSIGHT SM M&A ALERT VCBACKED

NON SERVICE PROVIDER TRANSACTIONS 1 04/09/2012 Facebook Instagram $1,000 Enables users to share photos with friends and family on Facebook, Twitter and Tumblr. !

04/09/2012

Cerberus Capital

53% stake in AT&T Advertising Solutions and AT&T Interactive Standard Microsystems

$950

AT&T Advertising publishes printed yellow pages directories and AT&T Interactive offers on-line, mobile and IPTV accessed local search, both seeking to connect local merchants with local customers Develops silicon-based integrated circuits that utilize analog and mixed-signal technologies.

05/02/2012

Microchip Technology

$877

04/17/2012

Toshiba

IBM's Point-of-Sale Terminal Business

$842

IBM's Point-of-Sale Terminal Business comprises cash registers and related devices that collect store data including names of items sold along with the time and quantity purchased. Offers a social media marketing platform which enables brands and marketing agencies to connect and engage with their customers and measure their social marketing campaigns on Facebook, Google, LinkedIn, Twitter and YouTube Provides a suite of real-time voice and data communications services and applications for use in vehicles. !

06/04/2012

salesforce.com

Buddy Media

$745

06/01/2012

Verizon Enterprise Solutions

HUGHES Telematics

$695

04/09/2012

Zhejiang Daily Media Group

Hangzhou Bianfeng Networking

$498

Operates an online portal (www.gameabc.com) for casual games including card games, board games, mahjong and simple arcade games.

06/07/2012

Citrix

Bytemobile

$435

Provides wireless operators with hardware and software to improve the efficiency and quality of web and video traffic over their mobile networks.

04/27/2012

Intuit

Demandforce

$424

Develops a SaaS-based application that allows local small businesses to automate and manage their marketing and customer communications.

10

05/14/2012

DOCOMO

Buongiorno

$389

Develops and deliver mobile content (apps and services including games and music) for multiple mobile devices, operating systems, development languages, and platforms.

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 04/10/2012 BUYER Cobham plc TARGET Thrane & Thrane TRANSACTION VALUE ($MM) $371 TARGET DESCRIPTION Develops equipment and systems including maritime radio and television (TV) communication products and satellite access stations that provide the interface between the satellite systems and the terrestrial networks. Provides hardware and software solutions for television facilities. Enables conversion of transmission signals and content playout automation. AP INSIGHT SM M&A ALERT VCBACKED

12

06/05/2012

Belden

Miranda Technologies

$356

13

05/01/2012

Open Text

EasyLink Services

$319

Provides cloud-based messaging services which enables enterprises to communicate with their customers, trading partners and other third parties. EasyLink manages the movement of data, information and documents. Provides cloud-based social marketing and commerce management software that enables businesses to effectively manage their presence on social networks. !

14

05/23/2012

Oracle

Vitrue

$300

15

05/01/2012

GREE

Funzio

$210

Develops mobile social role-playing cross-platform games for Android and iOS.

16

06/15/2012

Motorola

Psion PLC

$198

Provides enterprise mobile computing solutions, integration services, and product support and maintenance services.

17

05/01/2012

FleetCor Technologies

CTF Technologies

$192

Develops fleet control technology equipment which includes vehicle-sensing units that enable authorized and controlled vehicle refueling, vehicle performance reporting, maintenance scheduling and electronic messaging. PricaGrabber.com offers online shopping comparison services. ClassesUSA offers online degrees available from accredited online schools. LowerMyBills provides online service to compare plans and rates including mortgage, loan, insurance and phone and Internet. paysafecard.com provides prepaid payment solutions that enables customers to pay online without having to share credit card or bank account details.

18

05/10/2012

Ybrant Digital

PriceGrabber.com, Classes USA and LowerMyBills paysafecard.com

$175

19

06/28/2012

Skrill Holdings

$174

20

05/24/2012

Bazaarvoice

PowerReviews

$152

Provides a customer review platform which enables retailers, brands and ecommerce sites to collect, organize and analyze customer ratings, comments and other user-generated content.

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)

# 21 ANNOUNCED DATE 04/17/2012 BUYER DTS TARGET SRS Labs TRANSACTION VALUE ($MM) $148 TARGET DESCRIPTION Develops audio and voice technology solutions including audio rendering, voice, and surround sound technologies. AP INSIGHT SM M&A ALERT VCBACKED

22

05/07/2012

Ixia

Anue Systems

$145

Provides testing solutions that enable telecommunication and cable service providers and corporations with large data centers and enterprise networks to monitor and test networks. Operates as a journalistic money Website that provides MoneySaving guides, tips, tools, and techniques.

23

06/01/2012

Moneysupermarket.com

MoneySavingExpert.com

$135

24

05/23/2012

Seagate Technology

LaCie

$127

Develops storage peripherals and monitors (including hard drives, network storage, BluRay and VDRW drives) for professionals and businesses.

25

05/03/2012

LinkedIn

SlideShare

$119

Enables individuals and enterprises to share presentations, documents, podcasts, Webinars, PDFs, professional videos and Webmeetings. Users can interact with each other on blogs, Twitter, Facebook or LinkedIn. Offer online shopping guides, comparison Websites, shopping search engines and platforms for consumer ratings across multiple brands including leguide.com, dooyoo.com, mercamania.com and antag.com. Polycom's enterprise wireless voice solution business unit includes Wi-Fi and DECT handsets, related infrastructure and accessories.

26

05/07/2012

Lagardere Active

LeGuide.com

$118

27

05/10/2012

Sun Capital Partners

Polycom's Enterprise Wireless Voice Solutions Business Archives.com

$110

28

04/25/2012

Ancestry.com

$100

Provides online ancestral historical records.

29

04/10/2012

Intuit

AisleBuyer

$90

Develops a mobile commerce platform and shopping applications that allow retailers to offer consumers a better in-store experience while collecting valuable data on buying habits. SinglePlatform helps local businesses manage and maintain listing data about their businesses on multiple on-line sites including search engines, local review sites and travel guides such as the Yellow Pages, the New York Times, FourSquare and UrbanSpoon.

30

06/13/2012

Constant Contact

SinglePlatform

$85

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)

# 31 ANNOUNCED DATE 05/21/2012 BUYER LDC; Bridgepoint Development Capital TARGET BigHand TRANSACTION VALUE ($MM) $77 TARGET DESCRIPTION Develops digital dictation software which allows users to dictate directly to network using a handheld recorder, headset, remote device, PDA, mobile phone or via the Web. Develops networking equipment optimized for real-time unified communications. AP INSIGHT SM M&A ALERT VCBACKED

32

06/18/2012

Sonus Networks

Network Equipment Technologies

$76

33

06/10/2012

Mercury Computer Systems

Micronetics

$72

Develops radio frequency (RF) and microwave components and sub-assemblies for defense and commercial customers.

34

05/21/2012

Nippon Mirai Capital

ALC Press

$68

Provides online distance learning solutions.

35

06/21/2012

APN News & Media

brandsExclusive

$67

Offers an online shopping club for fashion, footwear and accessories.

36

05/22/2012

R.R. Donnelley & Sons

EDGAR Online

$65

Creates and distributes financial data and public filings online.

37

06/18/2012

Sierra Wireless

Sagemcom SAS, M2M Business

$56

Sagemcom SAS, M2M Business offers GPRS, EDGE and 3G modules for automotive, smart metering, payment terminals, and alarm and security applications. Operates a network personal computer game platform (www.cga.com.cn) which allows users to find and connect with other players.

38

04/09/2012

Zhejiang Daily Media Group

Shanghai Haofang Online Information Technology Openwave's Mediation and Messaging Product Businesses Worldwide Group

$56

39

04/16/2012

Marlin Equity Partners

$55

Provides network control and content management capabilities to network administrators and services providers.

40

04/13/2012

Daisy Group plc

$44

Provides audio-conferencing solutions with a focus on voice services and data connectivity to business customers.

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)

# 41 ANNOUNCED DATE 05/02/2012 BUYER Zillow TARGET RentJuice TRANSACTION VALUE ($MM) $40 TARGET DESCRIPTION Provides online rental marketing tools for rental brokerages and independent apartment finder. The companys technology allows real estate agents, property managers and brokers to manage and market their inventory and communicate with their clients. Provides testing solutions for cloud applications and network infrastructure. AP INSIGHT SM M&A ALERT VCBACKED !

42

04/20/2012

Spirent Communications

MU Dynamics

$40

43

04/16/2012

A&N Media

Jobrapido

$39

Operates job search engines.

44

05/23/2012

ValueFirst Messaging

Way2Online Interactive

$36

Provides telecom infrastructure solutions in mobile messaging and voice telephony.

45

04/10/2012

Gaintech

Coresonic

$35

Develops digital signal processor (DSP) technology for use in baseband applications.

46

04/24/2012

Ted Hastings and other investors

Tsavo Media

$33

Online content publisher with a large array of websites designed around subjects popular with consumers.

47

05/31/2012

Enghouse Systems

Zeacom

$31

Provides contact center and unified messaging solutions to small and medium size organizations.

48

05/16/2012

Yell Group

Moonfruit

$29

Provides easy to use software that allows small businesses to build a website, create a Facebook store and establish a mobile presence.

49

05/21/2012

Avail-TVN

On Demand Group

$27

Provides Video-On-Demand management services including content acquisition and aggregation, marketing and programming, content processing, software services and on screen promotion. Provides mobile payment technology solutions.

50

06/08/2012

Nationz Technologies

Shenzhen Angelshine

$26

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

10

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 05/21/2012 Kabel Deutschland Tele Columbus $789 Provides cable TV and radio services in Germany.

06/26/2012

Liberty Cablevision of Puerto Rico; Searchlight Capital Partners LIN Television

San Juan Cable

$585

Provides Internet and cable television services. Puerto Rico-based.

05/07/2012

New Vision Television

$342

A television broadcast company. U.S.-based.

06/04/2012

Ringier Axel Springer

Grupa Onet

$272

Internet service provider. Poland-based.

04/16/2012

M2 Telecommunications Group

Primus Telecom

$210

Provides telecommunication services. Australia-based.

04/24/2012

Eros International

B4U Television Network

$72

Operates a cable television network. India-based.

05/13/2012

Skycable

Destiny Cable

$56

Provides cable TV services in the Philippines.

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

11

M&A TRANSACTIONS: OTHER NOTABLE

A number of important transactions were announced in the second quarter of 2012 with consideration in excess of $1b or with unannounced transaction values.
ANNOUNCED DATE 06/25/2012 TRANSACTION VALUE ($MM) $1,200 AP INSIGHT SM M&A ALERT VCBACKED !

# 1

BUYER Microsoft

TARGET Yammer

TARGET DESCRIPTION Provides enterprise social networking including microblogging, profile and group creation, document sharing, messaging, and content tagging services.

06/14/2012

Nokia

Scalado

Provides imaging technologies, applications and engineering services for camera phones.

06/05/2012

Google

Quickoffice

Provides mobile office software solutions for mobile phones/smartphones and tablets.

06/04/2012

Google

Meebo

Offers a Web-based instant messaging. Offers an embeddable IM Window that allows users to chat with site visitors from its Website.

06/01/2012

Google

KikScore

Evaluates the websites and reputations of businesses based on various information that shoppers use when deciding the trustworthiness of online sources. Offers real-time data analysis and reporting software for network-driven businesses. !

05/03/2012

Cisco

Truviso

05/02/2012

IBM

TeaLeaf Technology

Provides online customer experience management solutions. Enables businesses to detect, quantify, and resolve issues and sources of customer struggles; and understand visitor interactions, discover ongoing behavior patterns. Provides video optimization solutions for mobile network operators (MNOs) and managed service providers (MSPs).

05/01/2012

Allot

Ortiva Wireless

04/16/2012

Twitter

Hotspots.io

Offers social media analytics services.

10

04/12/2012

Facebook

Tagtile

Develops mobile loyalty app.

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

12

M&A TRANSACTIONS: OTHER NOTABLE (continued)

# 11 ANNOUNCED DATE 04/11/2012 BUYER Citrix TARGET Podio TRANSACTION VALUE ($MM) TARGET DESCRIPTION Offers a social work platform that enables users to build applications as tools with users own structure, logic, and flow; and create work spaces and invite others to work with their spaces. Develops mobile enterprise platforms for developing, deploying, and managing mobile applications. AP INSIGHT SM M&A ALERT VCBACKED !

12

04/10/2012

SAP

Syclo

13

04/02/2012

Google

TxVia

Offers customizable electronic payment processing solution.

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

13