STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI NORDHAVEN STOCKHOLM OSLO HELSINKI STOCKH
Quarterly Software Report
Q2 2018
2
IDENTIFIED TRANSACTIONS
• There were 23 transactions in the software space in the Nordics in Q2/18 vs.
28 in the previous quarter.
• The performance of the Nordic Technology EUR GI index was very strong in
Q2/18 with an increase of 15.5% for the second quarter.
• The largest deal activity within Nordic software could be found in Sweden, with
8 identified deals, followed by Finland (6 deals), (Norway (5 deals) and
Denmark (4 deals).
• Strategic buyers were again the leading buyer group, completing 13 of the 23
deals, while private equity buyers completed 10.
• Nordic buyers continued to dominate in Q2 with 18 (78.3%) of the 23 deals,
while US and Canadian buyers were the second most active with 4 deals.
• The Nordic discount gap has widened to 50.7% compared with international
software companies, based on EV / SALES 2018E multiples.
Inclusion criteria
Announced transactions where a Norwegian, Swedish, Finnish or Danish-based
software company has been sold during the quarter. The company sold must have
the majority of its operations in either of these countries. Consultancy and IT-
service (no software) transactions are not included. Minority transactions or
transactions that does not create a "change-of-control" situation have also been
excluded. Merger Market is our primary source for identifying eligible transactions.
NORDIC TECHNOLOGY EUR GI
25
21 2118
2022
1820
24
1719
28
33
13
21
28
23
Jan. 14 Jan. 15 Jan. 16 Jan. 17 Jan. 18
2014 2015 2016 2017 2018
Jan 14 – Jul 18
Source: Merger Market, Thomson Reuters and Factset
EXECUTIVE SUMMARY
23transactions
in Q2/18
6.7xEV/ sales
international
software
companies
EV / SALES INTERNATIONAL SOFTWARE COMPANIES
5,6x
Q4
2016
Q2
2016
6,7x
Q1
2015
Q2
2015
Q3
2016
Q3
2015
4,3x
Q4
2015
Q2
2018*
Q1
2016
Q1
2017
4,6x
Q3
2017
Q4
2017
6,1x
Q1
2018
3,9x4,7x 4,9x 4,9x
6,9x5,8x 6,1x
6,7x
800
1000
1200
1400
1600
Jun. 18
* Median based on revised selection of international software companies (appendix 1)
NORDIC SOFTWARE TRANSACTIONSOVERVIEW OF Q2 2018
3
DEALS BY ACQUIRER’S COUNTRY
DEALS BY EXIT TYPE
DEALS BY TARGET’S COUNTRY
• Nordhaven has identified 23 Nordic software transactions in Q2 2018.
• 57.0% of the companies were acquired by industrials, which is in line with the
historical average.
• Of the equity-backed deals, 7 were platform and 3 were add-on investments.
• Sweden completed 8 deals, representing 34.7% of the total deal activity for the
period.
• 78.3% of the companies were sold to entities in the Nordics, followed by 17.4% of
acquirers in the US and Canada.
COMMENTS
Source: Merger Market and Nordhaven analysis
PE – Add-on
PE - Platform
Industrial
Denmark Norway
FinlandSweden Nordics
US / Canada
Rest of Europe
Rest of World
3
713
18
1
40
5
8
6
4
NORDIC SOFTWARE TRANSACTIONSQUARTER-BY-QUARTER DEVELOPMENT
4
NUMBER OF TRANSACTIONS
BREAKDOWN OF DEALS BY TARGET’S COUNTRY
BREAKDOWN OF DEALS BY ACQUIROR’S REGION
Source: Merger Market and Nordhaven analysis
BREAKDOWN OF DEALS BY EXIT TYPE
Q4 16
33%26%
14%
61%72%
6%
22%
Q3 17
42%
Q3 16
57%
32%
Q1 17
25%
71%
12%
52%
30%
36%
Q2 17
0%
38%
62%
24%
43%
Q4 17
14%
14%
Q1 18
13%
Q2 18
PE - add-on PE - platform Industrial
14%
21%
28%
22%
21%
Q1 18
21%
28%
22%
Q3 16
42%
16%
Q4 16
48%36% 35%
29%
18%
18%
31%
Q1 17
8%
15%
42%
Q2 18
27%
Q3 17
9%
22%
Q2 17
46%
32%0%
38%
14%
Q4 17
36%
18%
17%
26%
Sweden FinlandDenmark Norway
24%
5%
Q2 17Q4 16
69%
Q4 17
21%
11%
4%6%
0%
Q3 16
58%
11%
68%
25%
4%
71%58%
Q1 17
30%
6%
46%
6% 31%
8%
15%
Q3 17
0%
25%
54%
18%
25%
4% 4%
Q1 18
17%0%
Q2 18
78%
US / Canada
Nordics
Rest of World
Rest of Europe
1719
28
33
13
21
28
23
Q2 18Q3 16 Q4 16 Q3 17Q1 17 Q2 17 Q4 17 Q1 18
NOTABLE TRANSACTIONS DURING Q2 2018
5
Low-code development platform
publisher
Cloud-based software solutions
for the construction industry
Global signing solutions and
cloud compliance provider
Develops and delivers
software solutions
Cloud-based medical record
company
Manufacturing operations and
warehouse management
software
Supplier of eHealth systems
to Norwegian hospitals
2,6
2,1
3,1
37,1
17,7
11,4
4,7
3,6
TARGET ACQUIROR REVENUE 2017 (MEUR) SELLER
Founders
Founders
Source: Merger Market and Nordhaven analysis
Hagberg Holding AS
Founders
Founders
Founders
Administrative software for
various craft industries.
Founders
SELECTED SOFTWARE TRANSACTION MULTIPLES (EV / SALES) – LAST 12 MONTHS
6
3,5x
3,6x
3,8x
4,0x
18,6x
4,0x
5,7x
4,6x
1,2x
3,1x
1,8x
Q2 2017
Q4 2017
Q2 2017
Q3 2017
Q2 2017
Q1 2017
Q4 2017
Q3 2017
Q3 2017
Software for strategic sourcing
Telecom software provider
Software for 3D simulation and training
Software for documentation of chemicals
Software for vehicle trip logs / fleet mgmt.
Software for smart grid / customer interaction
Open-source software for web design
Software for document sharing
Software for payment solutions
Software for customs clearance and freight forw.Q4 2017
Source: Merger Market and Nordhaven analysis
Q2 2018 Mobile payment solutions
TRADING MULTIPLES OF SELECTED NORDIC AND INTERNATIONAL SOFTWARE COMPANIES
7
Vitec Software TobiiSimCorp HMS NetworkHexagon Micro SystemationBasware F-Secure
2,9x
CLX Communication
8,0x
7,3x
1,4x
5,2x 5,0x
6,0x5,5x
3,2x 3,4x
2,8x
3,9x3,6x
2,7x3,1x
1,6x
2,7x 2,6x
2017
2018E
Median: 3.4x
Source: Merger Market and Factset
13,1x
AutodeskAdobe Systems Workday GuideWire Ultimate SoftwareSalesforce Microsoft Citrix
6,7x
SAP
16,0x
14,4x 14,3x
16,9x
12,5x13,2x
10,4x
12,3x
9,9x8,9x
7,5x8,2x
5,4x 5,2x 4,8x 4,8x
2017
2018E
NORDIC
EV/ SALES
INTERNATIONAL
EV/ SALES
Median: 6.7x*
* Median based on full selection of international software companies
(appendix 1)
LIST OF IDENTIFIED NORDIC SOFTWARE TRANSACTIONS IN Q2 2018
8
# TARGET TARGET COUNTRY BIDDER BIDDER COUNTRY DATE EXIT TYPE
1 Virtusize AB Sweden Almi Invest AB Sweden June PE - Platform
2 Neptune Software AS Norway Standout Capital Sweden June PE - Platform
3 Smartdok AS Norway Visma AS Norway June Industrial
4 Cito IT A/S Denmark Vitec Software Group AB Sweden May Industrial
5 ITaito Oy Finland Dustin Group AB Sweden May Industrial
6 Hantverksdata Sverige AB Sweden Adelis Equity Partners AB Sweden May PE – Platform
7 Miradore Oy Finland Standout Capital Sweden May PE - Platform
8 iZettle AB Sweden PayPal Holdings, Inc. USA May Industrial
9 Eatech Oy Finland Etteplan Oyj Finland May Industrial
10 Hove Medical Systems AS Norway PasientSky AS Norway May Industrial
11 Introduce.se Sweden ABG Sundal Collier Holding ASA Norway May Industrial
12 Oscar Software Oy Finland Panostaja Oyj Finland May PE - Platform
13 SmartWeb ApS Denmark Combell NV Belgium May PE – Add-on
14 Trustweaver AB Sweden Sovos Compliance, LLC USA May Industrial
15 Findify AB Sweden Namaste Technologies Inc. Canada May Industrial
16 Spiir A/S Denmark Danske Bank Denmark May Industrial
17 Centsoft AB Sweden Palette Software AB Sweden May Industrial
18 Roima Intelligence Oy Finland Intera Partners Oy Finland April PE - Platform
19 Agrando AS (97.2% Stake) Norway Vitec Software Group AB Sweden April Industrial
20 Evimeria EMR AB Sweden Apptix ASA Norway April Industrial
21 Dips AS (65% Stake) Norway Awilhelmsen AS Norway April PE - Platform
22 Kide Clinical Systems Oy Finland Topcon Healthcare Solutions, Inc. USA April Industrial
23 Continia A/S Denmark VIA Equity A/S and Private Investor Denmark April PE – Platform
Source: Merger Market and Nordhaven analysis
NORDHAVEN IN SHORT CORE SECTOR EXPERTICE
NORDHAVEN IS THE LEADING INDEPENDENT M&A FINANCE ADVISOR IN THE NORDIC MARKET
9
NORDHAVEN SERVICE OFFERING
We operate as a strategic financial advisor and partner to owners, board members and
management throughout the business life cycles.
MERGERS & ACQUISITIONS
Planning and execution of mergers and acquisitions, divestments and other corporate
finance transactions are our core expertise.
DEBT & CAPITAL ADVISORY
We give advice on our clients’ debt and capital structures, negotiate and execute
fundraising for companies executing their M&A transactions as well as for organic
growth plans. We provide advice also at the time of distress.
INCENTIVE ADVISORY
We advise in the design and implementation of tailored, equity-based long-term
incentive plans that are linked to strategy execution and total returns to shareholders.
SERVICES
CONSUMER
HEALTHCARE
INDUSTRIALS
TMT
Systems
Professionals
Sweet spot
deal value
Years experience
Transactions
advised
+20
+300
+400
MEUR
10-100
FAR-REACHING INTERNATIONAL NETWORK WITH 34 PARTNER OFFICES WORLD WIDE
Nordhaven has been the exclusive partner of Clairfield International in Finland, Sweden and Norway
since 2012. Clairfield International have local partners in over 20 countries.
Through Clairfield International we have global connectivity, and foreign markets are our home markets.
Together we are stronger.
10
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HELSINKI
Eteläranta 12
+358 207 613 910
OSLO
H. Heyerdahls gate 1
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STOCKHOLM
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+46 85 025 6700
APPENDIX 1: FULL SELECTION OF INTERNATIONAL SOFTWARE COMPANIESEV/ SALES
12Source: Merger Market, Thomson Reuters and Factset
* EV/ Sales forecast per 20.08.2018
2017 2018E
Workday 16,9x 12,5x
Adobe Systems 16,0x 13,1x
Autodesk 14,4x 14,3x
ServiceNow 11,3x 12,2x
GuideWire 13,2x 10,4x
Salesforce 12,3x 9,9x
Dessault Systems 10,1x 9,5x
Intuit Inc 7,3x 8,4x
Ultimate Software 8,9x 7,5x
Tableau Software 8,3x 7,4x
Check Point Software 7,1x 7,4x
Red Hat 8,1x 6,9x
Microsoft 8,2x 6,7x
Vmware 6,5x 6,7x
eGain Corporation 6,7x 6,4x
Cornerstone Ondemand 6,4x 5,9x
Enghouse Systems 4,6x 5,4x
Citrix 5,4x 5,2x
Constellation Software 5,1x 4,9x
SAP 4,8x 4,8x
Oracle 4,8x 4,6x
Cerner 4,1x 3,9x
Sage Group 5,3x 3,9x
Nuance Communications 3,3x 3,2x
Symantec Corporation 4,3x 3,0x
Progress Software 1,6x 1,3x
Median 6,9x 6,7x
Revised selection of international companies due to recent stock listings and developments in the software market