M&A MARKET UPDATE - Marlin & Associates · PDF fileFintech Market update , I noted that, in...

JANUARY 2017

M&AM A R L I N & A S S O C I A T E S

M A R K E TU P D AT E

INVESTMENT BANKING AND STRATEGIC ADVISORY TO THE TECHNOLOGY, INFORMATION AND HEALTHCARE INDUSTRIES

www.MarlinLLC.com © Marlin & Associates Holdings LLC, All Right Reserved

Toronto

Washington, D.C.

San Francisco

New York

Dear Clients and Friends:

Welcome to the New Year. Last year was a strong one for mid-market infotech m&a. We’re still looking good. A week or so ago, in our Fintech Market update, I noted that, in spite of the rise of populism and Russia, the mess in the Middle East, the uncertainty of Donald Trump, Brexit and what may be the beginning of the end of a united Europe, interest rates have remained low, equity markets havereached record highs, businesses have continued to grow, and many investors are flush with cash.

Innovation is all around us: The Internet of Things; platform architectures, big data analytics; distributed ledgers; AI; cloud computing; enhanced networks and mobile technology; social platforms; cybersecurity and more all combine to make it easier and more affordable for people to find and buy cars, homes, insurance, or fund a college education – or a business. Investor confidence remains high. And that’s important.

In November, our Stephen Shankman had a great blog post on one key to investor confidence – “It’s all about Trust”. Our COO Jason Panzer reinforced that theme in his blog post last month on “The Value of Predictability Combined with Growth.” We hate drama. Last week, my partner Michael Maxworthy had another great blog post on a different theme – “Time Kills All Deals”. It’s true too.

Trust, predictability and momentum are all equally important in getting deals done. Once you lose any of them it’s really tough to recover. We’ve seen it too many times. (To subscribe to our blog click here.)

As 2017 begins, our clients continue to have faith in a bright future. As long as that momentum continues, good deals will get done and we’ll continue to help. A few of the more interesting recent deals include:

Marlin & Associates is one of the most active firms advising buyers and sellers of U.S. and international middle-market firms that provide software, data,and related services. The firm is based in New York City, with offices in San Francisco, CA, Washington, D.C., and Toronto, Canada. It has been therecipient of numerous awards including “Boutique Investment Bank of the Year,” “Middle-Market Investment Bank of the Year,” "Middle-Market FinancingAgent of the Year – Equity," and “TMT Advisory Bank of the Year.” Marlin & Associates' team of professionals has advised over 200 information-technology transactions.

DEAR CLIENTS AND FRIENDS,

Sincerely,

• Golden Gate agreed to acquire Neustar (NYSE:NSR) for $2.9bn valuing the Company at an implied 2.5x LTM revenue and 6.8x LTM EBITDA,

• Roper Technologies (Sarasota, FL) agreed to acquire Deltek for $2.8bn,

• Synchronoss Technologies (Nasdaq:SNCR) agreed to acquire Intralinks for $854mm (2.9x LTM Revenue),

• Istituto Centrale delle Banche Popolari Italiane (Milan, Italy) acquired Bassilichi, valuing the Company at €230mm ($245mm),

• Guidewire Software (NYSE:GWRE) acquired ISCS for $160mm,• SS&C (Nasdaq:SSNC) acquired Conifer Financial Services for

$89mm,• FactSet (NYSE:FDS) acquired Vermilion Software for $67mm.

Trust, Predictability and Momentum. Deals need it all. Our January 2017 General Market Update

Kenneth B. Marlin | Managing PartnerMarlin & Associates | www.marlinllc.com

We look forward to working with you in the New Year.

P.S. My book: “The Marine Corps Way To Win on Wall Street” does a pretty good job of showing what we do that is different than most firms – and why. For more please visit www.MarlinLLC.com.

http://www.marlinllc.com/blog/five-fintech-trends-for-2017-our-january-2017-fintech-market-update/

http://www.marlinllc.com/blog/hitting-the-mark-its-all-about-trust/

http://www.marlinllc.com/blog/the-value-of-predictability-combined-with-growth/

http://www.marlinllc.com/blog/time-kills-all-deals/

http://www.marlinllc.com/press-newsletters

http://www.marlinllc.com/

http://www.marlinllc.com/marine-corps-way

http://www.marlinllc.com/marine-corps-way

Source: Marlin & Associates, Capital IQ and Public sources. All market and operating data is sourced as of 12/29/16. These companies are asample of firms in the sector as M&A defines it, and do not comprise a comprehensive list of all firms in the sector. M&A calculates mean andmedian multiples for the sector using data from a set of firms that it believes to be reasonable and which may not be identical to the set reflectedabove.

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Sector Comparison Snapshot

Sector Analyses

Application Software

B2B E-commerce & Marketing Technologies

Banking Software & Processors

Business Intelligence Software

Capital Markets Software & Services

Data & Analytics – Financial Services

Healthcare Information Software Systems

Information & Market Research

Insurance Technology

Payment Technology

Securities Exchanges

Security Software

Technology-Enabled Financial Institutions

Technology-Enabled Healthcare Services

Merger-and-Acquisition Activity Trends

MARLIN & ASSOCIATES MARKET UPDATE

JANUARY 2017

02


0x 2x 4x 6x 8x 10x

Tech-enabled Healthcare Services


Tech-enabled Financial Institutions *




Payment Technology

Security Software



Healthcare Info Software


Data & Analytics - Financial Services


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SECTOR COMPARISON SNAPSHOT:CURRENT REVENUE & EBITDA MULTIPLESEnterprise Value / 2017 Revenue

Enterprise Value / 2017 EBITDA

*Tech-enabled Financial Institutions multiples calculated using Market Cap / Revenue and Market Cap / EBT

JANUARY 2017

0x 5x 10x 15x 20x 25x

Tech-enabled Financial Institutions *

Payment Technology


Tech-enabled Healthcare Services



Data & Analytics - Financial Services


Healthcare Info Software





Security Software



Public Market Data

04

JANUARY 2017

Recent Activity

DateAnnounced Acquirer(s) / Investor(s) Target / Issuer Description

11/16/16Infor (New York, NY) raised more than $2bn in funding from Koch Equity Development. The investment was a combination of preferred and common equity. Infor plans to use the proceeds to accelerate innovation and expand distribution.

11/15/16MacroPoint LLC (Cleveland, OH) raised $44mm in funding from Susquehanna Growth Equity. MacroPoint develops automated location tracking solutions for freight brokers, third party logistic firms and shippers.

10/27/16 Aspen Technology (Nasdaq:AZPN) acquired Mtelligence for $37mm. Mtelligenceprovides asset performance optimization software to manufacturers and utilities.

Company Market Enterprise EV / Revenue EV / EBITDA Revenue Growth EBITDA Margin(USD millions) Cap Value CY2016E CY2017E CY2016E CY2017E CY2016E CY2017E CY2016E CY2017E

Oracle 161,298 157,802 n/a 4.1x 9.5x 9.3x n/a n/a n/a 44%SAP 104,085 106,876 4.6x 4.3x 13.7x 12.8x 6% 7% 34% 34%Salesforce 47,269 48,584 5.8x 4.8x 28.3x 22.9x 26% 22% 20% 21%Intuit 29,569 30,064 6.1x 5.7x 16.9x 14.9x 10% 7% 36% 39%CA Technologies 13,185 12,689 3.1x 3.1x 7.9x 8.0x 0% 1% 40% 39%Workday 13,184 11,797 7.5x 5.9x na 53.6x 34% 28% 9% 11%Constellation Softw are 9,782 9,803 4.6x 4.1x 18.0x 15.9x 16% 13% 26% 26%Amdocs 8,678 7,783 2.1x 2.0x 10.5x 10.2x 3% 4% 20% 20%NICE Systems 4,180 3,492 3.4x 2.6x 12.2x 9.8x 11% 32% 28% 26%Manhattan Associates 3,805 3,694 6.1x 5.6x 16.9x 15.3x 9% 9% 36% 36%Softw are AG 2,762 2,664 2.9x 2.8x 9.2x 9.0x 1% 2% 31% 32%Paycom Softw are 2,680 2,635 8.0x 6.2x 29.6x 22.8x 46% 29% 27% 27%Zendesk 1,995 1,783 5.7x 4.3x na na 49% 32% 2% 3%Paylocity 1,537 1,459 5.6x 4.4x 46.2x 34.2x 40% 26% 12% 13%Callidus Softw are 975 788 3.8x 3.2x 34.1x 23.7x 19% 18% 11% 14%

Trim Mean 18,670 18,717 4.9x 4.2x 18.1x 16.7x 18% 16% 24% 26%Median 8,678 7,783 5.1x 4.3x 16.9x 15.1x 13% 16% 26% 26%

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5 Year M&A Application Software Index vs. S&P 500, base = 100

M&A Application Software Index S&P 500

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EV /

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5 Year LTM Revenue & EBITDA Multiples

EV / LTM Revenue EV / LTM EBITDA


12/06/16

Roper Technologies (Sarasota, FL) agreed to acquire Deltek for $2.8bn. Deltekprovides enterprise software and information solutions for project-based businesses. Deltek will operate as a distinct company within Roper Technologies name, while its brands and office locations will not change as a result of the transaction.

11/16/16Infor (New York, NY) raised more than $2bn in funding from Koch Equity Development. The investment was a combination of preferred and common equity. Infor plans to use the proceeds to accelerate innovation and expand distribution.

11/15/16MacroPoint LLC (Cleveland, OH) raised $44mm in funding from Susquehanna Growth Equity. MacroPoint develops automated location tracking solutions for freight brokers, third party logistic firms and shippers.



Public Market Data

05

[1] Shopify (SHOP) added to the index as of IPO 5/21/15

JANUARY 2017

Recent Activity

Date Announced Acquirer(s) / Investor(s) Target / Issuer Description

11/17/16SendGrid (Denver, CO) raised $33mm in series D funding led by Bain Capital Ventures. SendGrid provides a cloud-based platform that provides email services to solve the challenges of reliably delivering emails on behalf of growing companies.

10/4/16

Criteo (NASDAQ:CRTO) acquired HookLogic for $250mm. HookLogic provides performance marketing services to manufacturers and hotels, offers retail search exchange/native advertising, paid product listings integration, and closed-loop advertising solutions to e-commerce site owners through its platform.

9/26/16

Vista Equity (Austin, TX) acquired GovDelivery from Actua for $153mm. GovDeliveryis a digital marketing platform that connects national, regional, and local governments with citizens in order to promote the usage of services, enhance public awareness, and increase the contributions and involvement of citizen communities.

Company Market Enterprise(USD millions) Cap Value CY2016A CY2017E CY2016A CY2017E CY2016A CY2017E CY2016A CY2017E

Adobe 59,309 56,450 9.6x 7.9x 31.0x 20.4x 22% 21% 31% 39%Mercadolibre 9,311 9,138 10.8x 7.9x 40.8x 30.5x 30% 37% 27% 26%Shopify 4,476 4,080 10.5x 6.8x nm nm 90% 54% nm 0%NeuStar 2,129 2,016 7.4x 5.7x nm nm 49% 30% nm 1%HubSpot 1,865 2,628 2.2x 2.1x 5.7x 4.4x 15% 5% 38% 47%ChannelAdvisor 296 235 2.1x 1.9x nm 35.2x 13% 9% nm 5%Mediagrif Interactive 184 201 3.5x 3.3x 10.5x 8.8x 7% 7% 34% 38%QuinStreet 148 110 0.4x 0.4x nm 5.5x 6% 3% nm 7%


EV / Revenue EV / EBITDA Revenue Growth EBITDA Margin

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5 Year M&A eCommerce Index[1] vs. S&P 500, base = 100

M&A eCommerce Index S&P 500


12/14/16

Golden Gate agreed to acquire Neustar (NYSE:NSR) for $2.9bn valuing the Company at an implied 2.5x LTM revenue and 6.8x LTM EBITDA. An affiliate of GIC (Government of Singapore Investment Corporation) will also invest in Neustar and will become a minority owner of the Company following closing of the transaction.

11/17/16SendGrid (Denver, CO) raised $33mm in series D funding led by Bain Capital Ventures. SendGrid provides a cloud-based platform that provides email services to solve the challenges of reliably delivering emails on behalf of growing companies.

10/4/16

Criteo (NASDAQ:CRTO) acquired HookLogic for $250mm. HookLogic provides performance marketing services to manufacturers and hotels, offers retail search exchange/native advertising, paid product listings integration, and closed-loop advertising solutions to e-commerce site owners through its platform.



Public Market Data

06

[1] Q2 Holdings (QTWO) added to the index as of IPO 3/20/14

Recent Activity

JANUARY 2017


11/28/16

QuantGroup (Beijing, China) raised $72mm in a Series C round of funding led by new investor Sunshine Insurance Group, and including participation from GuosenHongsheng Investment Co., Fosun Capital, and other undisclosed investors. QuantGroup provides online financial services in China.

11/16/16

LendingTree (Nasdaq:TREE) acquired Iron Horse Holdings (dba: CompareCards) for $130mm. CompareCards is an online platform enabling consumer credit card comparisons, and providing credit education and credit health management solutions. The transaction consideration consists of $85mm cash at closing and up to $45mm of earn-out payments paid during 2017 and 2018.

11/10/16

Meta Financial Group (Nasdaq:CASH) acquired Specialty Consumer Services (SCS) for $54mm. SCS offers a loan management platform and a proprietary underwriting model that are primarily used to deliver consumer tax advances and other consumer credit services. The transaction consideration consists of approximately $15mm at closing, with potential for additional contingent payments.

Company Market Enterprise(USD millions) Cap Value CY2016E CY2017E CY2016E CY2017E CY2016E CY2017E CY2016E CY2017E

FIS 24,961 35,144 3.7x 3.6x 11.9x 11.1x 3% 3% 31% 32%Fiserv 23,669 27,974 5.1x 4.8x 14.5x 13.6x 5% 5% 35% 35%Jack Henry & Associates 7,000 6,915 5.0x 4.7x 13.5x 13.4x 7% 5% 37% 35%Temenos 4,963 5,236 8.3x 7.6x 22.3x 19.9x 16% 9% 37% 38%Oracle Financial Services 3,881 3,457 5.4x 4.8x 13.4x 11.9x 9% 11% 40% 41%Ellie Mae 2,802 2,415 6.8x 5.5x 21.7x 16.9x 39% 23% 31% 33%ACI Worldw ide 2,108 2,809 2.9x 2.7x 11.9x 11.1x (6%) 5% 24% 25%Q2 Holdings 1,150 1,058 7.1x 5.5x nm nm 37% 29% na 4%Bottomline Technologies 949 995 2.9x 2.8x 12.9x 13.0x 2% 5% 22% 21%Sw ord Group 288 261 1.5x 1.4x 10.0x 8.9x 17% 11% 16% 16%Polaris Consulting & Services 225 156 nm nm nm nm na na na naMicrogen 138 137 2.8x 2.8x 11.4x 10.9x 24% 2% 25% 26%Gresham Computing 103 98 4.6x 4.0x 20.7x 15.2x 17% 16% 22% 26%



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5 Year M&A Banking Software Index[1] vs. S&P 500, base = 100

M&A Banking Software Index S&P 500

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12/12/16

Fiserv (Nasdaq:FISV) acquired Online Banking Solutions for an undisclosed sum. The acquisition will bolster Fiserv’s cash management and digital business banking solutions. Online Banking Solutions offers digital fraud prevention tools, as well as a secure platform that serves as a gateway for commercial customers to connect with financial institution applications.

12/7/16

Nubank (São Paulo, Brazil) raised $80mm in a Series D round of funding, led by new investor DST Global; and including participation from new investors RedpointVentures and Ribbit Capital; and existing investors Sequoia Capital, QED Investors, The Founders Fund, and Tiger Global Management. Nubank provides fee-free credit cards managed exclusively through a mobile app.

12/5/16 Undisclosed Investors

Leveris (Dublin, Ireland) raised €15mm in a Series A round of funding. Leveris seeks to deliver a cloud-based, end-to-end digital banking and lending tool. The company’s platform is designed using open APIs to allow banks to integrate with third-party products and services. The company is preparing for an international product lease and has expanded headcount to roughly 200 employees.



Public Market Data

07

[1] Tableau Software (DATA) added to the index as of IPO 5/17/13, Hortonworks (HDP) added to the index as of IPO 12/12/14

Recent Activity

JANUARY 2017


11/17/16Connotate Technologies (New Brunswick, NJ) raised $11mm in a Series B1 round led by Long River Ventures. Connotate provides a Web data extraction platform provider for the information services industry and data-centric businesses.

10/12/16

Metamarkets (San Francisco, CA) raised $14mm in a debt round led by Wellington Financial. Metamarkets Group develops a real-time analytics platform for the digital advertising space. The capital will help Metamarkets expand its engineering team and invest even further in its real-time data processing infrastructure.

10/4/16

Wavefront (Palo Alto, CA) raised $53mm in a funding round led by Tenaya Capital. Wavefront operates a cloud-based analytics platform for managing data centers. Its platform enables users to ask new questions; get real-time answers; send data points every day; localize an issue by identifying and addressing the culprit during a crisis; prevent downtime; and get alerts on various situations.


Open Text 7,564 8,848 4.5x 4.0x 12.9x 10.7x 6% 12% 35% 38%Splunk 6,935 5,996 6.4x 5.0x nm 47.9x 39% 28% 9% 11%Tableau Softw are 3,207 2,342 2.9x 2.7x 36.0x 36.2x 23% 8% 8% 7%Microstrategy 2,274 1,695 3.3x 3.2x 12.7x 11.2x (3%) 2% 26% 29%Verint Systems 2,217 2,670 2.5x 2.4x 11.6x 10.2x (6%) 6% 22% 23%Talend 621 531 5.1x 3.9x na na 38% 29% na naHortonw orks 498 414 2.3x 1.8x na na 48% 30% na na



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5 Year M&A BI Index[1] vs. S&P 500, base = 100

M&A BI Index S&P 500


12/14/16

Databricks (San Francisco, CA) raised $60mm in a Series C round led by return investor New Enterprise Associates. Databricks delivers a just-in-time data platform in the cloud powered by Apache Spark to simplify data integration, real-time exploration, and robust deployment of production applications. The new funding round brings Databricks' total funding to date to $107.5 million.

11/17/16Connotate Technologies (New Brunswick, NJ) raised $11mm in a Series B round led by Long River Ventures. Connotate provides a Web data extraction platform provider for the information services industry and data-centric businesses.

10/12/16

Metamarkets (San Francisco, CA) raised $14mm in a debt round led by Wellington Financial. Metamarkets Group develops a real-time analytics platform for the digital advertising space. The capital will help Metamarkets expand its engineering team and invest even further in its real-time data processing infrastructure.



Public Market Data

08

Recent Activity

JANUARY 2017


IHS Markit 12,043 15,186 4.2x 4.3x 11.3x 11.0x 10% (3%) 37% 39%Broadridge 8,062 8,960 2.6x 2.1x 13.1x 11.2x 25% 22% 20% 19%SS&C Technologies 5,910 8,298 5.5x 5.0x 13.7x 11.5x 52% 9% 40% 43%Computershare 5,059 6,361 3.1x 2.9x 11.9x 11.8x 5% 6% 26% 25%DST 3,536 3,467 2.1x 2.3x 9.2x 9.1x (20%) (7%) 23% 25%SimCorp 1,964 1,928 6.4x 6.0x 26.4x 24.9x 5% 5% 24% 24%Envestnet 1,513 1,753 3.0x 2.6x 17.4x 13.1x 37% 16% 17% 20%IRESS 1,409 1,527 5.4x 4.8x 17.7x 15.6x 8% 12% 30% 31%Fidessa group 1,074 993 2.5x 2.3x 9.3x 8.6x 11% 6% 27% 27%First Derivatives 666 686 4.2x 3.7x 21.7x 19.3x 24% 13% 19% 19%Linedata Services 355 369 2.1x 2.1x 7.2x 7.1x (2%) 2% 29% 29%Cinnober 143 141 3.6x 2.9x nm 27.5x 19% 24% 3% 11%StatPro Group 84 95 2.2x 2.1x 15.7x 14.0x 17% 4% 14% 15%Brady 71 63 1.7x 1.6x 11.7x 10.3x 11% 5% 15% 16%Lombard Risk Management 38 29 0.8x 0.6x nm 5.3x 26% 27% 0% 12%



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5 Year M&A Capital Markets Index vs. S&P 500, base = 100

M&A Capital Markets Index S&P 500


12/20/16

FactSet (NYSE:FDS) acquired Vermilion Software for $67mm. Vermilion provides client reporting and communications solutions to the asset management industry, and is expected to help FactSet satisfy the increased demand for client reporting driven by new and increasingly sophisticated regulatory rquirements.

12/15/16

SS&C (Nasdaq:SSNC) acquired Conifer Financial Services for $89mm. Conifer is an asset servicing firm with more than $110bn of total assets under administration, serving the administrative needs of pensions, endowments, foundations, family offices, RIAs, asset managers, private equity, and hedge funds.

12/6/16

Synchronoss Technologies (Nasdaq:SNCR) agreed to acquire Intralinks for $854mm valuing the company at an implied 2.9x LTM Revenue. Intralinks provides secure, cloud-based virtual data rooms and collaboration platforms. Synchronoss anticipatesthe realization of $40mm of total synergies within the first year after closing. The transaction is expected to close late Q1 2017.


Data & Analytics – Financial Services

Public Market Data

09

JANUARY 2017

Recent Activity


11/21/16

London Stock Exchange Group (LSE:LSE) acquired Mergent for an undisclosed sum. Mergent is a leading provider of business and financial information on public and private companies and adds to LSEG’s data and analytics capabilities. The Mergentbusiness will form part of LSEG’s Information Services Division which includes FTSE Russell, among other real time and reference data products.

11/10/16

eVestment Alliance (New York, NY) acquired Public Plan IQ for an undisclosed sum. Public Plan IQ is a SaaS-based platform that provides access to public pension plan reporting and board documents and houses more than 10,000 documents. The acquisition builds upon eVestment’s intelligence offering to institutional investors, consultants and managers.

11/1/16

Strategic Insight (New York, NY) acquired BrightScope for an undisclosed sum. BrightScope is a financial information company that provides a suite of proprietary datasets, data management capabilities and analytics to asset managers, record-keepers, financial advisors, and other market participants. The transaction follows Strategic Insight’s recent acquisitions of Market Metrics and Matrix Solutions.

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5 Year M&A Data & Analytics Financials Index vs. S&P 500, base = 100

M&A D&A Financial Index S&P 500


Thomson Reuters 33,155 41,993 3.7x 3.7x 13.3x 12.6x (8%) 2% 28% 29%S&P Global 28,530 31,063 5.6x 5.5x 12.6x 11.8x 5% 1% 44% 46%Moody's 18,317 19,865 5.6x 5.3x 12.4x 11.6x 2% 6% 45% 45%Experian 18,164 21,317 na 4.4x na 12.4x na n/a na 36%Equifax 14,341 17,114 5.4x 5.0x 15.3x 13.8x 18% 9% 36% 36%Verisk Analytics 13,944 16,062 8.0x 7.6x 16.1x 15.0x (3%) 6% 50% 51%MSCI 7,521 8,622 7.5x 7.0x 15.2x 13.8x 7% 7% 50% 51%FactSet Research Systems 6,554 6,724 5.9x 5.5x 16.4x 15.6x 11% 6% 36% 35%CoStar Group 6,115 5,929 7.1x 6.3x 23.2x 20.3x 18% 13% 31% 31%Dun & Bradstreet 4,440 5,733 3.4x 3.3x 11.6x 11.1x 4% 3% 29% 29%FICO 3,841 4,336 4.9x 4.6x 20.8x 20.5x 5% 5% 23% 23%CoreLogic 3,285 4,742 2.4x 2.5x 9.6x 9.4x 27% (1%) 26% 26%Morningstar 3,185 2,980 3.8x 3.6x 11.9x 11.0x 0% 5% 32% 33%




12/9/16

comdirect bank (XTRA:COM) acquired OnVista from Boursorama for an undisclosed sum. OnVista comprises an online broker, OnVista Bank, and a comprehensive financial information portal for active investors and traders, OnVista Media. The acquisition strengthens comdirect’s position as a market leader in the brokerage business in Germany.

12/7/16

Finicity (Murray, UT) raised $42mm in a Series B funding round led by new investor Experian and including existing investors. Finicity, a provider of real-time financial data aggregation, plans to use the capital to expand the size of its engineering and support teams in order to accelerate the development of solutions built on its platform.

11/29/16

QUICK (Tokyo, Japan), a subsidiary of Nikkei, acquired a 33.5% stake in RIM Intelligence for an undisclosed sum. RIM Intelligence, a price reporting agency based in Japan, issues various indexes daily including the “RIM price”, which is a reference price utilized in trading of oil products in the Japanese domestic market.


Healthcare Information Software Systems

Public Market Data

10

[1] Benefitfocus added to the index as of IPO 9/18/13, Veeva added on 10/16/13, and Imprivata added on 6/24/14

Recent Activity

JANUARY 2017


11/16/16

ContextMedia (Chicago, IL) acquired AccentHealth for an undisclosed sum. AccentHealth provides patient education at the point of care; its content is produced by CNN's Medical Unit, hosted by Dr. Sanjay Gupta, and by Harvard Medical School. AccentHealth was acquired by M/C Ventures Partners and Bank of America Capital for approximately $120mm in 2008.

11/15/16

CareCloud (Miami, FL) raised $31.5mm in Series C funding led by Blue Cloud Ventures and included participation from PNC Financial Services and First Data Corp, in addition to a number of existing investors. CareCloud provides EMR and RCM solutions to physicians. Including this round, CareCloud has raised approximately $130mm in capital.

11/8/16

Practice Fusion (San Francisco, CA) raised an undisclosed amount of funding from new investor ORIX Growth Capital. Practice Fusion provides cloud-based electronic health records to more than 30,000 doctors. ORIX Growth Capital is related to ORIX Corp, which is a large, diversified financial institution listed on the Tokyo Stock Exchange. Prior to this round, Practice Fusion has raised over $160mm in capital.


Cerner 16,334 16,214 3.4x 3.1x 10.4x 9.3x 10% 9% 33% 33%Veeva Systems 6,001 5,490 10.2x 8.4x 32.8x 27.1x 32% 21% 31% 31%athenahealth 4,207 4,368 4.0x 3.3x 18.0x 14.1x 19% 19% 22% 24%Medidata 2,868 2,798 6.0x 5.1x 26.3x 22.0x 18% 19% 23% 23%Health Equity 2,434 2,268 12.8x 10.2x 36.8x 28.6x 40% 26% 35% 36%CompuGroup Medical 2,076 2,415 4.1x 3.7x 18.1x 15.4x 1% 10% 23% 24%Allscripts 1,901 3,473 2.2x 2.1x 12.3x 10.6x 12% 9% 18% 19%Inovalon 1,561 1,118 2.6x 2.5x 11.3x 10.4x (2%) 7% 23% 24%The Advisory Board 1,346 1,857 2.3x 2.3x 9.9x 9.4x 5% 1% 23% 24%NantHeatlh 1,205 1,001 9.4x 5.3x nm na 83% 77% na naBenefitfocus 881 896 3.8x 3.2x nm na 26% 20% na 4%Quality Systems 816 838 1.7x 1.6x 10.4x 9.8x 2% 4% 16% 16%iRhythm Technologies 633 760 12.1x 8.9x nm na 74% 35% na naComputer Programs & Systems 315 467 1.7x 1.7x 9.1x 8.9x 47% 1% 19% 19%



10x

20x

30x

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3.0x

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100

120

140

160

180


5 Year M&A HISS Index[1] vs. S&P 500, base = 100

M&A HISS Index S&P 500


12/20/16

TPG Capital (Fort Worth, TX) agreed to acquire Mediware Information Systems for an undisclosed sum. Mediware provides information software systems used by hospitals, long-term care facilities, payors and other community-based sites of care. Mediwarewas acquired by Thoma Bravo in 2012 for $193mm, implying a 2.4x LTM revenue and 11.2x EBITDA valuation.

12/8/16

Augmedix (San Francisco, CA) raised $23mm in funding from new investors McKesson Ventures and OrbiMed, and included participation from existing investors. Augmedix is a smartglass-based physician productivity platform that started as Google Glass for medicine. Prior to this round, Augmedix had raised approximately $43mm from both strategic and institutional investors.

12/6/16

PatientPing (Boston, MA) raised $31.6mm in Series B funding led by Andreesen Horowitz and Leerink Transformation Partners. PatientPing develops a national care coordination network connecting providers with real-time notifications (“Pings”) wherever patients receive care. Prior to this round, PatientPing had raised approximately $10mm.



Public Market Data

11

JANUARY 2017

Recent Activity


11/14/16

Verisk Analytics (NasdaqGS:VRSK) acquired The GeoInformation Group for an undisclosed sum. The GeoInformation Group offers large-scale mapping services and geospatial data and analytic solutions to a broad set of companies and more than 300 public sector organizations. The acquisition bolsters Verisk’s presence in the United Kingdom as a data and analytics provider across multiple markets.

11/9/16

Gartner (NYSE:IT) acquired Machina Research for an undisclosed sum. Machina Research provides market intelligence and strategic insight on Internet of Things (IoT), Machine-to-Machine (M2M), and big data opportunities. The acquisition is part of Gartner’s strategy of investing further in IoT capabilities.

10/17/1620/20 Research (Nashville, TN) acquired iModerate for an undisclosed sum. iModerate offers online qualitative market research services and fits strategically with 20/20’s QualBoard discussion and QualMeeting interview platforms.


Reed Elsevier (RELX Group) 35,687 40,188 4.8x 4.6x 13.7x 12.5x 15% 5% 35% 37%Nielsen 15,126 22,838 3.6x 3.6x 11.9x 11.6x 2% 1% 30% 31%Wolters Kluw er 10,697 12,631 2.8x 2.7x 10.9x 10.2x 2% 4% 26% 27%Gartner 8,470 8,756 3.6x 3.2x 18.9x 16.7x 13% 11% 19% 19%Pearson 8,086 8,616 1.6x 1.5x 9.4x 7.9x 1% 5% 17% 19%Informa 5,360 6,641 3.9x 3.0x 12.2x 9.1x 15% 28% 32% 33%UBM 3,913 3,969 3.9x 3.5x 13.5x 11.6x 8% 13% 29% 30%Euromoney Institutional Investor 1,758 1,719 3.5x 3.4x 13.3x 12.8x 1% 3% 26% 26%comScore 1,245 1,131 2.2x 1.9x 9.5x 7.4x 41% 13% 23% 26%Forrester Research 792 656 2.0x 1.9x 16.3x 14.5x 4% 6% 12% 13%



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100

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140

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5 Year M&A Info & Mkt Research Index vs. S&P 500, base = 100

M&A Info & Mkt Research Index S&P 500


12/20/16

Nielsen (NYSE:NLSN) agreed to acquire Gracenote from Tribune Media Company for $560mm. Gracenote is a leading provider of media and entertainment metadata, including reference information for more than 12 million movie and television listings and 200 million music tracks.

12/13/16

UBM (LSE:UBM) agreed to acquired Allworld Exhibitions Alliance for $485mm,valuing the company at an implied 5.0x LTM revenue and 12.9x LTM EBITDA. Allworld is a leading privately-owned, Asian exhibitions business operating 51 tradeshows in 11 countries and across nine industry sectors and strengthens UBM’s position in Asia.

12/8/16

Funds managed by KKR & Co (NYSE:KKR) launched a voluntary public tender offer for GfK at an implied valuation of €43.5 per share. Under the terms of the public tender offer, holders of GfK shares will receive a premium of ~44% on the estimated volume weighted three-month average price of GfK’s shares prior to the announcement.



Public Market Data

12

[1] Connecture added to the index as of IPO 12/12/14

Recent Activity

JANUARY 2017


11/28/16The Allstate Corporation (NYSE:ALL) acquired SquareTrade for $14bn. SquareTradeprovides consumer protection plans that distributes through many of America’s major retailers.

11/17/16CoverWallet (New York, NY) raised $7.8mm in a Series A round led by Union Square Ventures. CoverWallet buys and manages insurance for small businesses. The company has raised $9.5mm to date.

11/3/16 EasyPolicy (Noida, India) raised $10.0mm in a Series B round led by UnilazerVentures. EasyPolicy provides an online marketplace for insurance plans in India.

0x

5x

10x

15x

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40x

1.0x

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enue



100

130

160

190

220

250


5 Year M&A Insurance Tech Index[1] vs. S&P 500, base = 100

M&A Insurance Tech Index S&P 500


Guidew ire Softw are 3,616 3,085 7.0x 5.9x 39.5x 29.0x 12% 18% 18% 20%Ebix 1,866 2,030 6.9x 6.4x 18.2x 16.6x 11% 9% 38% 38%CorVel 722 681 nm nm nm nm na na na naSapiens 715 634 2.9x 2.6x 19.9x 17.1x 16% 15% 15% 15%msg life 124 100 0.8x 0.8x 8.9x 7.9x 5% 3% 9% 10%Connecture 38 107 1.2x 1.1x nm 14.0x (10%) 10% na 8%

Trim Mean 857 863 3.7x 3.2x 19.1x 15.9x 9% 11% 16% 15%Median 719 658 2.9x 2.6x 19.1x 16.6x 11% 10% 16% 15%



12/19/16Guidewire Software (NYSE:GWRE) acquired ISCS for $160mm. ISCS develops a web-based policy administration suite and caters to the US property and casualty insurance market.

12/14/16

Hippo (Mountain View, CA) raised $14mm in a Series A funding round led by Horizons Ventures and included RPM Ventures, Propel Venture Partners, GGV Capital and Pineline Capital. Hippo uses modern technology to provide home insurance.

12/5/16

Lemonade (New York, NA) raised $34mm in a Series B funding round led by General Catalyst and included GV, Thrive Capital, Tusk Ventures and existing investors. Lemonade is a licensed insurance carrier, offering homeowners and renters insurance powered by artificial intelligence and behavioral economics.


Payment Technology

Public Market Data

13

[1] SafeCharge (SCH) added to the index as of IPO 4/1/14. PayPal (PYPL) added to the index as of IPO 7/20/15

Recent Activity

JANUARY 2017


11/10/16

Vantiv (NYSE:VNTV) acquired Moneris Solutions, Inc. (the US business of Moneris) for $425mm. Moneris offers credit, debit, wireless and online payment services for merchants in virtually every industry segment and processed approximately $12bn in US transaction volume in 2015.

11/7/16

GTCR (Chicago, IL) acquired RevSpring and committed up to $400mm to complete this as well as pursue complementary acquisitions. RevSpring is a leading provider of multi-channel billing and communications solutions to the healthcare and financial services industries.

10/20/16

Cardtronics (Nasdaq:CATM) acquired DirectCash Payments for $460mm. The purchase included First Data’s Australian ATM portfolio, which DirectCash acquired on September 30. DirectCash is a leading provider of prepaid card products, ATM services, and debit terminals.

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enue




PayPal 47,917 42,829 4.0x 3.4x 15.6x 13.5x 17% 16% 25% 25%FleetCor Technologies 13,488 16,939 9.3x 7.8x 17.7x 14.5x 7% 19% 52% 54%Vantiv 11,766 14,911 7.9x 7.3x 16.4x 15.3x 14% 8% 48% 48%Global Payments 10,689 14,804 5.4x 4.4x 17.1x 13.2x (4%) 24% 32% 33%Western Union 10,649 12,575 2.3x 2.3x 9.4x 9.2x (1%) 2% 25% 25%Total System Services 9,011 11,949 2.9x 2.5x 11.7x 10.7x 50% 16% 24% 23%Wirecard 5,304 4,458 4.1x 3.2x 13.6x 10.6x 28% 28% 30% 30%WEX 4,784 6,548 6.5x 5.4x 17.8x 13.3x 18% 19% 37% 41%Euronet Worldw ide 3,949 3,827 2.0x 1.8x 11.0x 9.5x 10% 9% 18% 19%Blackhaw k Netw ork Holdings 2,097 2,378 1.2x 1.1x 11.6x 9.3x 8% 15% 11% 11%EVERTEC 1,319 1,911 5.0x 4.9x 10.3x 10.4x 3% 2% 48% 47%PayPoint 838 775 2.9x 3.0x 10.5x 10.0x (2%) (4%) 28% 30%Cass Information Systems 829 526 nm nm nm nm na na na naMoneygram International 784 1,548 1.0x 1.0x 5.8x 5.5x 6% 6% 18% 17%SafeCharge 384 256 2.4x 2.1x 7.4x 6.4x 6% 13% 32% 33%




12/23/16

Volkswagen Financial Services (Braunschweig, Germany) acquired PayPoint's Mobile Payments Business for €26.5mm ($32.5mm). The business contracts with parking authorities to provide mobile phone payment of parking charges in the UK, USA, Canada, France and Switzerland.

12/6/16

Istituto Centrale delle Banche Popolari Italiane (ICBPI) (Milan, Italy) acquired Bassilichi, valuing the Company at €230mm ($245mm). Bassilichi is one of the main outsourcers in the payments sector, offering a range of solutions for banks, enterprises and the public.

11/10/16

Vantiv (NYSE: VNTV) acquired Moneris Solutions (the US business of Moneris) for $425mm. Moneris offers credit, debit, wireless and online payment services for merchants in virtually every industry segment and processed approximately $12bn in US transaction volume in 2015.

100

125

150

175

200

225

250


5 Year M&A Payment Tech Index[1] vs. S&P 500, base = 100

M&A Payment Tech Index S&P 500



Public Market Data

14

JANUARY 2017

Recent Activity


11/21/16

London Stock Exchange Group (LSE:LSE) acquired Mergent for an undisclosed sum. Mergent is a leading provider of business and financial information on public and private companies and adds to LSEG’s data and analytics capabilities. The Mergentbusiness will form part of LSEG’s Information Services Division which includes FTSE Russell, among other real time and reference data products.

11/10/16 Asian Gateway Investments

Singapore Exchange Limited (SGX:S68) acquired Asian Gateway Investments (Singapore) for $99mm. Asian Gateway Investments operates an online security trading platform.

9/26/16IG Group (LSE:IGG) entered into an asset purchase agreement to acquire DailyFXfrom Forex Capital Markets for $40mm. IG Group aims to boost customer count with the acquisition.

8x

10x

12x

14x

16x

6.0x

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8.0x

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12.0x


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DA

EV /

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enue



90

105

120

135

150

165

180


5 Year M&A Sec Exchanges Index vs. S&P 500, base = 100

M&A Sec Exchanges Index S&P 500


CME Group 39,120 39,847 11.2x 10.6x 16.0x 15.0x 7% 6% 70% 71%IntercontinentalExchange (ICE) 33,852 39,741 8.8x 8.4x 14.3x 13.1x 35% 5% 62% 64%Hong Kong Exchange 28,700 27,372 18.8x 16.6x 27.1x 23.4x (12%) 13% 69% 71%Deutsche Börse Group 15,110 16,448 6.4x 6.0x 12.2x 10.9x (11%) 6% 52% 55%London Stock Exchange (LSE) 12,296 12,906 6.8x 6.2x 13.9x 12.2x (12%) 9% 49% 51%The Nasdaq OMX Group 11,377 14,639 6.4x 5.9x 12.8x 11.7x 20% 8% 50% 51%BM&F Bovespa 9,270 9,009 12.6x 10.7x 20.1x 16.6x 4% 17% 62% 65%Australian Exchange (ASX) 7,112 6,388 11.7x 11.1x 15.2x 14.4x 1% 6% 77% 77%CBOE 6,006 5,933 9.3x 8.3x 16.9x 13.5x 1% 12% 55% 61%Singapore Exchange (SGX) 5,349 4,694 8.4x 8.1x 15.2x 14.0x (3%) 4% 56% 58%TMX Group 2,970 3,501 6.3x 6.1x 12.6x 11.7x (3%) 3% 50% 52%




12/24/16 A Chinese consortium acquired a 40% stake in Pakistan Stock Exchange for $85mm. Pakistan Stock Exchange provides securities exchange services in Pakistan.

12/14/16NYSE (New York, NY) acquired National Stock Exchange for an undisclosed amount. The National Stock Exchange operates an electronic securities exchange that trades equity securities and equity derivatives in the United States

11/21/16

London Stock Exchange Group (LSE:LSE) agreed to acquire Mergent for an undisclosed amount. Mergent provides business and financial information on global publically listed companies and its business will form part of London Stock Exchange Group Information Services division.


Security Software

Public Market Data

Recent Activity

15

JANUARY 2017


11/20/16

Symantec (Nasdaq:SYMC) acquired LifeLock (NYSE:LOCK) for $2.5bn valuing the Company at an implied 3.6x LTM revenue and 50x LTM EBITDA, in a deal that Symantec hopes will prop up sales at its Norton cybersecurity unit. In August, Symantec bought Blue Coat, which helps firms maintain security over the internet, in a $4.7bn deal.

11/17/16Prevalent Networks (Warren, NJ) raised $60mm in a Series C round led by Insight Venture Partners. Prevalent offers third-party risk assessment, monitoring, and collaboration.

10/28/16

RiskIQ (San Francisco, CA) raised $30mm in a Series C round led by Georgian Partners and included Battery Ventures, Summit Partners and MassMutual Ventures. RiskIQ applies machine learning and data sciences to improve platform intelligence and broaden functionality by leveraging big data, customer usage and attack activity.

Company Market Enterprise EV / Revenue EV / EBITDA Revenue Growth EBITDA Margin(USD millions) Cap Value CY2016E CY2017E CY2016E CY2017E CY2016E CY2017E CY2016E CY2017E

Symantec 14,812 16,369 4.3x 4.3x 8.4x 8.4x (38%) (38%) 51% 51%Check Point Softw are 14,517 13,287 7.7x 7.3x 13.9x 13.4x 6% 6% 55% 54%Palo Alto Netw orks 11,229 10,346 6.6x 5.0x 31.0x 20.0x 37% 30% 21% 25%F5 Netw orks 9,589 8,707 4.3x 4.0x 10.9x 10.1x 4% 8% 40% 39%Fortinet 5,359 4,329 3.4x 2.9x 20.2x 16.0x 25% 17% 17% 18%Proofpoint 2,975 2,924 7.8x 6.0x nm 58.8x 41% 30% 10% 10%FireEye 1,960 1,766 2.5x 2.2x na 58.8x 16% 10% na 4%CyberArk 1,637 1,385 6.4x 5.3x 23.3x 19.8x 34% 22% 28% 26%Imperva 1,246 987 3.9x 3.2x na nm 9% 19% na 4%Barracuda Netw orks 1,157 967 2.8x 2.6x 12.6x 11.2x 12% 7% 22% 23%mimecast 1,047 941 5.6x 4.5x nm 57.9x 24% 24% 5% 8%Axw ay Softw are 675 668 2.1x 1.9x 12.7x 11.2x 9% 7% 16% 17%Radw are 638 431 2.2x 2.2x 33.4x 31.0x (10%) 2% 7% 7%VASCO Data Security 544 402 2.1x 1.9x 16.6x 14.6x (21%) 10% 13% 13%Zix 263 238 4.0x 3.6x 14.6x 13.7x 10% 9% 27% 26%Absolute Softw are 188 156 1.8x 1.6x 19.1x 17.4x (4%) 10% 9% 9%

Trim Mean 3,774 3,384 4.1x 3.6x 17.5x 22.7x 11% 13% 22% 20%Median 1,442 1,186 n 3.9x 3.4x 15.6x 16.0x 10% 10% 19% 18%

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260


5 Year M&A Security Index vs. S&P 500, base = 100

M&A Security Index S&P 500


12/6/16KKR (NYSE: KKR) agreed to acquire a majority stake in Optiv Security from Investcorp Bank. Financial terms weren’t announced but press reports pegged the deal at $1.9 billion.

12/6/16Secdo (Ra’anana, Israel) raised $10mm in Series A round led by Rafael Development Corporation. Secdo develops cyber solutions that enable security operations teams to detect, investigate, and remediate advanced threats.

11/20/16

Symantec (Nasdaq:SYMC) acquired LifeLock (NYSE:LOCK) for $2.5bn valuing the Company at an implied 3.6x LTM revenue and 50x LTM EBITDA, in a deal that Symantec hopes will prop up sales at its Norton cybersecurity unit. In August, Symantec bought Blue Coat, which helps firms maintain security over the internet, in a $4.7bn deal.


Technology-Enabled Financial Institutions

Public Market Data

16

Recent Activity

JANUARY 2017


11/16/16

LendingTree (Nasdaq:TREE) acquired Iron Horse Holdings (dba: CompareCards) for $130mm. CompareCards is an online platform enabling consumer credit card comparisons, and providing credit education and credit health management solutions. The transaction consideration consists of $85mm cash at closing and up to $45mm of earn-out payments paid during 2017 and 2018.

11/10/16

Intrum Justitia (STO:IJ) acquired 1st Credit for £130mm ($161mm), valuing the Company at an implied 3.9x 2015 EBITDA. 1st Credit provides debt purchase and outsourced debt collection services for banks, credit card providers, utilities, telecoms, and retail companies.

10/26/16 UndisclosedAX Trading Group (New York, NY) raised $20mm to expand the firm’s global market position. AX provides a platform for institutional traders to proactively reach out to targeted counterparties in a way that protects their trading intentions and their identity.

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Market Cap / LTM Revenue Market Cap / LTM EBT


12/15/16

SS&C (Nasdaq:SSNC) acquired Conifer Financial Services for $89mm. Conifer is an asset servicing firm with more than $110bn of total assets under administration, serving the administrative needs of pensions, endowments, foundations, family offices, RIAs, asset managers, private equity, and hedge funds.

12/5/16

Community Bank System (NYSE:CBU) acquired Northeast Retirement Services (NRS) for approximately $140mm. The acquisition of NRS will create an organization with more than $80mm in annual revenue, more than $50bn in trust assets and 3,800 retirement and other employee benefit plan administration clients.

11/16/16LendingTree (NASDAQ: TREE) acquired CompareCards for $130mm. CompareCardsis a leading online source for side-by-side credit card comparison, comprehensive credit education and credit health management.

Company Market Market Cap / Revenue Market Cap / EBT Revenue Growth EBT Margin(USD millions) Cap CY2016E CY2017E CY2016E CY2017E CY2016E CY2017E CY2016E CY2017E

Charles Schw ab 52,653 7.0x 6.2x 15.8x 12.4x 19% 14% 45% 50%TD Ameritrade 23,064 6.9x 6.4x 15.2x 13.4x 5% 8% 45% 48%E*TRADE 9,545 4.9x 4.5x 12.3x 11.1x 5% 11% 40% 40%MarketAxess 5,552 15.2x 13.6x 27.1x 24.1x 21% 11% 56% 57%ICAP 2,169 2.6x 3.3x 7.1x 7.3x na (21%) 37% 46%IG Group 2,218 3.8x 3.5x 8.0x 7.9x 9% 6% 47% 45%BGC Partners 3,807 1.5x 1.4x 7.9x 6.8x 3% 7% 19% 20%Interactive Brokers Group 2,500 1.8x 1.5x 2.4x 2.4x (1%) 19% 76% 64%LendingClub 2,055 4.2x 3.5x nm 33.5x 13% 20% na 10%Tullett Prebon 0 0.0x 0.0x nm nm 9% 34% 17% 21%Monex Group 785 1.9x 1.9x nm nm (4%) (1%) na naInvestment Technology Group 646 1.4x 1.3x nm nm (27%) 9% na naBinckBank 409 2.7x 2.6x nm nm (25%) 3% na naOn Deck Capital 329 1.1x 0.9x nm nm 62% 32% na naGAIN Capital 320 0.8x 0.9x 5.2x 5.6x (9%) (3%) 16% 15%FXCM 39 nm nm nm nm na na na na

Trim Mean 3,817 3.1x 2.9x 10.2x 11.1x 4% 10% 38% 38%Median 2,112 2.6x 2.6x 8.0x 9.5x 5% 9% 42% 45%

80

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240


5 Year M&A Fintech Sector Index vs. S&P 500, base = 100

M&A Tech-enabled Fin Institutions Index S&P 500


Technology-Enabled Healthcare Services

Public Market Data

17

JANUARY 2017

Recent Activity


11/18/16

nThrive (Alpharetta, GA) acquired Adreima for an undisclosed sum. Adreima primarily provides clinically-integrated revenue cycle services that help patients find coverage and meet their financial obligations. Adreima was backed by Bregal Sagemount and Waud Capital. nThrive was formerly the MedAssests/Precyse businesses that Pamplona Capital acquired in 2015.

11/9/16

Evolent Health (NYSE:EVH) acquired Aldera for $34mm, consisting of $24.5mm in cash and 500,000 shares of Evolent common stock. Aldera provides back-end benefit administration and claims management solutions to healthcare companies, including Valence Health. Evolent acquired Valence in October 2016 and had negotiated an option to purchase Aldera, a primary software provider on the Valence platform.

11/7/16

GTCR (Chicago, IL) acquired RevSpring and commits up to $400mm to complete this as well as pursue complementary acquisitions. RevSpring is a leading provider of multi-channel billing and communications solutions to the healthcare and financial services industries.


McKesson 32,023 36,181 0.2x 0.2x 7.7x 8.0x 4% 1% 2% 2%Cotiviti 3,103 3,847 6.2x 5.6x 16.3x 14.5x 14% 11% 38% 39%WebMD 2,768 2,774 3.9x 3.7x 12.1x 11.2x 11% 5% 33% 33%HMS Holdings 1,541 1,567 3.1x 2.9x 13.4x 11.6x 5% 7% 23% 25%Evolent Health 998 1,033 4.1x 2.6x nm n/a 159% 61% na n/aHealthw ays 0 250 0.5x 0.5x 2.5x 2.1x (35%) 9% 20% 21%MINDBODY 851 781 5.6x 4.3x nm n/a 37% 29% na 3%HealthStream 804 704 3.1x 2.8x 23.1x 19.0x 9% 11% 13% 15%Teladoc 757 726 5.9x 3.9x nm n/a 58% 52% na n/aEmis 738 741 3.7x 3.5x 12.1x 10.8x 5% 7% 30% 32%Castlight Health 511 394 3.9x 3.2x nm n/a 34% 23% na n/aVocera Communication 500 379 3.0x 2.4x nm 49.5x 22% 25% 3% 5%Tabula Rasa Healthcare 243 319 3.5x 2.7x 24.9x 17.1x 32% 27% 14% 16%Accretive Health 230 195 0.9x 0.6x nm n/a 79% 67% na 1%Cranew are 171 122 2.3x 2.0x 7.2x 6.4x 16% 14% 32% 31%

Trim Mean 1,254 1,273 3.4x 2.7x 13.1x 12.3x 24% 22% 23% 20%Median 780 734 3.5x 2.8x 12.1x 11.4x 17% 18% 23% 21%


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80

100

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140

160

180


5 Year M&A Tech-Enabled HCS Sector Index[1] vs. S&P 500, base = 100

M&A Tech-Enabled HCS Index S&P 500


12/20/16

GreatCall (San Diego, CA) acquired Healthsense for an undisclosed sum. Healthsense provides passive remote monitoring services for senior care and was backed by Merck Global Health Innovation Fund, Mansa Capital, Radius ventures and others. Healthsense had raised close to $30mm prior to being acquired.

12/12/16

VSS Medical Technologies (Danbury, CT) acquired a majority interest in Legato Healthcare Marketing for an undisclosed sum. Legato is a healthcare marketing agency with specialized solutions to rural organizations, specialty clinics and medical equipment companies.

12/8/16

Vida Health (San Francisco, CA) raised $18mm in Series B funding led by Canvas Ventures, with participation from other investors. Vida is a digital health coaching platform that helps chronic care patient manage their conditions; Vida users are paired with a human health coach who is an expert in behavioral changes. Prior to this round, Vida had raised $5mm in funding.


18

MERGER AND ACQUISITION TRANSACTIONS

Software and Services Transaction Activity

Software and Services Transaction Multiples

JANUARY 2017

Note: Mid-market M&A defined as transactions with enterprise values below $1 billion.

(1)

(1)

(1)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

0

50

100

150

200

250

300

350

400

450

500

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2014 2015 2016

Aggr

egat

e Va

lue

($bn

)

Num

ber o

f Tra

nsac

tions

Number of Transactions Aggregate Value

0x

1x

2x

3x

4x

5x

6x

0x

10x

20x

30x

40x

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2014 2015 2016

EV /

Rev

enue

EV /

EBIT

DA

EV / EBITDA EV / Revenue

Note: Not a complete list

CLIENTS CHOOSE M&A TO ADVISE THEM ON THEIR IMPORTANT STRATEGIC MOVES

19

has invested in

Marlin & Associates acted as strategic and financial advisor to Aquiline Capital

Partners.

Dublin, Ireland

New York, NY

has been acquired by

Marlin & Associates acted as exclusive strategic and financial advisor to Varden Technologies Inc.

Windsor, CT

Boston, MA


Marlin & Associates acted as exclusive strategic and financial advisor

to Alacra, Inc.

Pa lo A lto, CA

New York, NY

rece ived an investment from

Marlin & Associates acted as exclusive strategic and financial advisor

to Trunomi.

Campbell, CA

Brentwood, TN

a portfolio company of

Marlin & Associates acted as strategic and financial advisor to Agilum Healthcare Intelligence.


JANUARY 2017

New York City, NY

Lake Success, NY

Marlin & Associates acted as exclusive strategic and financial advisor to M&O Systems, Inc.


"The Marlin & Associates team was a highly valued player in completing our transaction. Their professional expertise and commitment to the process, preparation, positioning, presentation, and leadership got us to the finish line. They’re smart, available whenever needed, and bring the work ethic to get the deal done.”

Stephen HallManaging Partner and CEO, iTransact

Phoenix, AZ

Boston, MA and San Francisco, CA

Marlin & Associates acted as exclusive strategic and

financial advisor to BillingTree

has completed a majority recapitalization with

Salt Lake City, UT

Chicago, ILMarlin & Associates acted as

exclusive strategic and financial advisor to iTransact Group, LLC

has been acquired byreceived an investment from

Port Talbot, United Kingdom

London, United Kingdom

Marlin & Associates acted as exclusive strategic and financial

advisor to Vizolution.

San Mateo, CA

Marlin & Associates acted asexclusive strategic and

financial advisor to Xignite.

received a strategicinvestment fom

Tokyo, Japan

Paris, France

Palo Alto, CA


advisor to Everteam.

has acquired the Business Process Management business from

Lucca, Italysecured a $36 million

investment from

Milan, ItalyMarlin & Associates acted as

exclusive strategic and financial advisor to Tagetik Software srl.

Hong Kong, China

Hong Kong, China

Marlin & Associates acted as strategic and financial advisor to

Wisers Information Limited.

has raised capital fromWixom, MI

has acquired

Hamilton, NJMarlin & Associates acted as

exclusive strategic and financial advisor to RevSpring Inc.

Washington, D.C.



Marlin & Associates acted as exclusive strategic and financial advisor to Current Analysis, Inc.

Woburn, MA


Chicago, IL

Marlin & Associates acted as exclusive strategic and financial advisor to ByAllAccounts, Inc.

Chicago, IL


New York, NY

Marlin & Associates acted as exclusive strategic and financial advisor to

SpyWare LLC.

Port Washington, NY

Boulder, Colorado


advisor to NPD Group.

has acquired

has sold

Chicago, IL

to

Stockholm, Sweden


advisor to MarketAxess.

Marlin & Associates acted as exclusive strategic and financial advisor to Bain Capital Ventures.

a portfolio company of Bain Capital Ventures and Lemhi Ventures

has merged with

New York, NY

New York, NY


advisor to SR Labs.

secured a $53 million investment from

Dublin, Ireland


Marlin & Associates acted as exclusive strategic and financial advisor to

Information Mosaic.


M&A Award USA TMT Advisory Firm of the Year (2012, 2015) – Acquisition International

• Financial Technology Deal of the Year (2012, 2011)• North America Small Mid Markets Corporate Deal of the Year (2013)• Corporate M&A Deal of the Year (2010)• Technologies Deal of the Year (2010)* Firm-wide Awards

• Cross-Border Boutique Investment Banking Firm of the Year (2016)*• Boutique Investment Banking Firm of the Year (2014, 2015, 2016)*• Advisory Firm of they Year (2015)*• Middle Market International Professional Services (B-to-B) Deal of the Year (2013)• Financial Services Deal of the Year (2013, 2012 and 2011)• Information Technology Deal of the Year (2011)• Middle Market Deal of the Year <$25M (2011)• Corporate and Strategic Acquisition of the Year (2011)• Middle Market Financial Services Deal of the Year (2011 and 2010)• Middle Market Information Technology Deal of the Year (2011 and 2010)• Middle Market International Financial Services Deal of the Year (2013 and 2010)• Middle Market International Information Technology Deal of the Year (2010)• Middle Market Financial Services Turnaround Deal of the Year (2009)• Middle Market Information Technology Turnaround Deal of the Year (2009)• Middle Market International Deal of the Year(2008)• Middle Market Financial Services Deal of the Year (2008)• Middle Market Technology Deal of the Year (2008)• Middle Market Investment Banking Firm of the Year (2008 and 2007)*• Middle Market International/Cross Border Deal of the Year (2007, Below $100M)• Middle Market Financial Services Deal of the Year (2007, Below $100M)• Middle Market Financing Agent of the Year – Equity (2007)*• Middle Market Computer and Information Technology Deal of the Year (2007)

PEER AND INDUSTRY GROUP RECOGNITION

20

Boutique Investment Banking Firm of the Year(2014, 2015, 2016) - The M&A Advisor

The M&A Advisor and The M&A Forum have recognized Marlin & Associates for excellence in multiple deal categories including:

The Global M&A Network has recognized Marlin & Associates for excellence in multiple deal categories through its M&A Atlas Awards:

TMT Advisory Firm of the Year (2016)

Boutique Investment Banking Firm of the

Year(2016)

– ACQ5 (Acquisition Finance

Magazine)

“We are always grateful to be recognized for our hard work, but we are more pleased that we areable to help our clients achieve the results that they seek.”

Ken MarlinFounder and Managing Partner

JANUARY 2017

Note: Not a complete list

Ken Marlin

Founder and Managing Partner of M&A• Twice named to II’s Tech 50• Member Market Data Hall of Fame• MD Veronis Suhler Stevenson• CEO of Telesphere Corporation • CEO of Telekurs (NA)• EVP Bridge Information systems• SVP at Dun & Bradstreet• BA from the University of California (Irvine)• MBA from UCLA, post-MBA from New

York University Jason Panzer

Chief Operating Officer of M&A• 20+ years of M&A experience advising

technology and PE firms, globally• VP Business Development at FactSet• M&A attorney of Skadden, Arps, Slate,Meagher and Flom• CFO of JCF Group• MBA from Columbia Business School• J.D. from Fordham Law School• CFA Charterholder

Paul Friday

• 20+ years of investment banking experience• Experience working with both large

corporations and entrepreneurial technology-based companies

• Formerly at Robertson Stephens and PaineWebber (UBS)

• BS, Finance from Pennsylvania State University

• 18+ years of investment banking andprivate equity experience• Named twice to Dealer’s Digest and

recently M&A Advisor’s “40-Under-40”• Founded Marlin & Associates with Ken

Marlin• Formerly at Veronis Suhler Stevenson,

Morgan Stanley, and American International Group

• BS from Binghamton University

Tom Selby

• 12+ years of M&A experience • VP of Business Development at SunGard• Founder of software company sold to

SunGard • Started career designing trading software

for TD Bank• BaSC, Engineering from University of

Toronto

Jonathan Kaufman

• 15+ years of corporate finance experience

• Thought leader in Fintech• 8+ years in investment banking at UBS and Deutsche Bank• BS from Union College• MBA from University of Virginia’s Darden

School of Business• Named to Deal’s Digest “40-Under-40”

MARLIN AND ASSOCIATES: WHO WE ARE

OUR SENIOR TEAM BRINGS EXTENSIVE DEPTH, BREADTH AND INDUSTRY EXPERTISE TO OUR CLIENTS

Michael Maxworthy

Paul Friday

21

JANUARY 2017

“Marlin's advice, consultation and leadership throughout the process directly drove the best outcome for our firm. Their deep industry knowledge and close relationships with prospective acquirers provides unparalleled value as well. They are a principally centered and tireless team of professionals.”

Michael Brodeur, President, M&O Systems


New York | San Francisco | Washington, D.C. | Toronto

www.MarlinLLC.com

22

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