The 451 2011 Tech Banking Review

Tech M&A Banking Review2011

ANALYZING THE BUSINESSOF ENTERPRISE IT INNOVATION

FEBRUARY 2012

451 RESEARCH: M&A KNOWLEDGEBASE I © 2012 451 RESEARCH, LLC AND/OR ITS AFFILIATES. ALL RIGHTS RESERVED.

ABOUT 451 RESEARCH 451 Research, a division of The 451 Group, is a leading global analyst and data company focused on the business of enterprise IT innovation. Clients of the company — at end-user, service-provider, vendor and investor organizations — rely on 451 Research’s insight through a range of syndicated research and advisory services to support both strategic and tactical decision-making.

© 2012 451 Research, LLC and/or its Affiliates. All Rights Reserved. Reproduction and distribution

of this publication, in whole or in part, in any form without prior written permission is forbidden.

The terms of use regarding distribution, both internally and externally, shall be governed by the

terms laid out in your Service Agreement with 451 Research and/or its Affiliates. The information

contained herein has been obtained from sources believed to be reliable. 451 Research disclaims

all warranties as to the accuracy, completeness or adequacy of such information. Although 451

Research may discuss legal issues related to the information technology business, 451 Research

does not provide legal advice or services and their research should not be construed or used as

such. 451 Research shall have no liability for errors, omissions or inadequacies in the informa-

tion contained herein or for interpretations thereof. The reader assumes sole responsibility for

the selection of these materials to achieve its intended results. The opinions expressed herein are

subject to change without notice.

New York20 West 37th Street, 6th FloorNew York, NY 10018Phone: 212.505.3030Fax: 212.505.2630

San Francisco140 Geary Street, 9th FloorSan Francisco, CA 94108Phone: 415.989.1555Fax: 415.989.1558

London37-41 Gower StreetLondon, UK WC1E 6HHPhone: +44 (0)20.7299.7765Fax: +44 (0)20.7299.7799

Boston125 Broad Street, 4th FloorBoston, MA 02109Phone: 617.275.8818Fax: 617.261.0688

II TECH M&A BANKING REVIEW 2011© 2012 451 RESEARCH, LLC AND/OR ITS AFFILIATES. ALL RIGHTS RESERVED.

ABOUT THE 451 M&A KNOWLEDGEBASEThe 451 M&A KnowledgeBase is a transaction database that offers precise categoriza-tion of technology-related M&A deals for more than 600 sectors, along with proprietary estimates of valuations for key unannounced private transactions — with linkage to our proprietary analysis of deal rationales and the outlook for additional related transactions. The KnowledgeBase incorporates insight from more than 45 analysts of 451 Research.

!

To request more information or a complimentary demonstration of the KnowledgeBase,

please email [email protected] or call 415-989-1555 x110 or 212-505-3030 x103.

mailto:[email protected]

451 RESEARCH: M&A KNOWLEDGEBASE III © 2012 451 RESEARCH, LLC AND/OR ITS AFFILIATES. ALL RIGHTS RESERVED.

TABLE OF CONTENTS

SECTION 1: REPORT INTRODUCTION & OVERVIEW 1

1.1 SPENDING AND ACTIVITY BOTH UP AGAIN IN 2011 . . . . . . . . . . 2

FIGURE 1.1: Technology Advisory At A Glance: US Advisory In 2011 By Deals And Dollars . . . . . . . . . . . . . . . . 3

FIGURE 1.2: Technology Advisory At A Glance: US Advisory In 2011 By Deals And Dollars . . . . . . . . . . . . . . . . . . . 4

SECTION 2: BANKING LANDSCAPE 5

FIGURE 2.1: Expected Changes In Investment Banking Landscape: Banker Survey . . . . . . . . . . . . . . . . . . . . . 6

FIGURE 2.2: Expected Change In Pipeline Of Sell-Side M&A Mandates, 2006-2011 . . . . . . . . . . . . . . . . . . . . . . 6

2.1 M&A ADVISORY MARKET SHARE BY CATEGORY: BOUTIQUES CONTINUE TO TAKE MARKET SHARE FROM BULGE BANKS. . . . . . . 7

FIGURE 2.3: M&A Advisory Market Share By Investment Bank Category 2011 . . . . . . . . . . . . . . . . . . . 7

FIGURE 2.4A: Investment Bank Market Share: Advised Spending By Bank Category – 2008-2011 . . . . . . . . . . . . . . . 8

FIGURE 2.4B: M&A Advisory Market Share By Investment Bank Category . . 8

SECTION 3: ADVISING ON DEALS THAT REALLY MATTER 9

FIGURE 3.1: Who’s Selling To Whom: Sell-Side Advisers To The Big 10 In 2011 . . . . . . . . . . . . . . . . . . . . . 9

FIGURE 3.2: Advisers To Three Or More VC-Backed Targets In 2011 . . . . 9

Using This Report And The 451 M&A Knowledgebase To Help Select The Right Deal Advisers . . . . . . . . . . . . .10

SECTION 4: TOP TECH DEALMAKERS 2011 11

FIGURE 4.1: Leading Advisers To US IT Transactions By Deal Value . . . . 11

FIGURE 4.2: Leading Advisers To US IT Transactions Ranked By Number Of Deals . . . . . . . . . . . . . . . . . . . 11

IV TECH M&A BANKING REVIEW 2011© 2012 451 RESEARCH, LLC AND/OR ITS AFFILIATES. ALL RIGHTS RESERVED.

SECTION 5 12

5.1 SECTOR LEADERS 2011: APPLICATION SOFTWARE, INFORMATION MANAGEMENT & INFRASTRUCTURE MANAGEMENT . . . . . . . . . 12

5.2 SECTOR LEADERS 2011: INTERNET CONTENT & COMMERCE . . . . . . . 13

5.3 SECTOR LEADERS 2011: IT OUTSOURCING & BUSINESS SERVICES . . . . 14

5.4 SECTOR LEADERS 2011: MOBILITY . . . . . . . . . . . . . . . . 15

5.5 SECTOR LEADERS 2011: SECURITY & ENTERPRISE NETWORKING . . . . . 16

5.6 SECTOR LEADERS 2011: SEMICONDUCTORS . . . . . . . . . . . . . 17

5.7 SECTOR LEADERS 2011: STORAGE, SYSTEMS & MEDIA TECHNOLOGIES . . 18

5.8 SECTOR LEADERS 2011: HOSTED SERVICES . . . . . . . . . . . . . 19

SECTION 6: MORE INFORMATION ON THE TECH M&A BANKING REVIEW 20

451 RESEARCH: M&A KNOWLEDGEBASE 1 © 2012 451 RESEARCH, LLC AND/OR ITS AFFILIATES. ALL RIGHTS RESERVED.

SECTION 1Report Introduction & Overview

As expected, the list of top 10 advisers by deal value in our 2011 tech banking league table was dominated by the bulge-bracket banks. Most of the notable names in tech banking retained their top 10 status, with little shuffling among the rankings. A couple of new banks cracked the top 10 list in our 2011 tech banking league table, but the first- and second-place finishers remained unchanged from 2010.

Morgan Stanley was again the number one adviser to US technology deals by both number and value of deals. The number of transac-tions Morgan Stanley advised on (30) remained unchanged from 2010; however, the total value for those deals rose nearly 20% to $39bn last year. Meanwhile, Goldman Sachs, which took the number two seat in our league table, advised on 22 transactions in 2011 worth a total deal value of $32bn. As it did in the previous year, Morgan Stanley worked six of 2011’s 10 largest transactions, while Goldman Sachs had a hand in just four. But both of the top two banks had their own strengths. Morgan Stanley dominated software advisory, while Goldman Sachs topped security and networking. We’d note that our ranking was built from data using only US-based targets, excluding telecommunications, where deals were announced in 2011, rather than completed. Advised deal value and volume includes aggregated buy- and sell-side credits.

Qatalyst Partners, the ‘bulge boutique’ led by Frank Quattrone, is again to be lauded as a top 10 firm. In 2010, Qatalyst landed in the lower half of the top 10, but it catapulted to the number three position in 2011. The firm advised on 18 deals worth a total $31.8bn, placing the bank just $250m shy of Goldman’s total advised value. The leading boutique bank’s boost last year came from working two of 2011’s largest transactions: Google’s $12.5bn purchase of Motorola Mobility in August and Texas Instruments’ $6.5bn reach for National Semiconductor in April. In all, Qatalyst led the rankings in both the mobility and semiconductor sectors.

Barclays Capital retained its fourth-place position thanks to its work on Motorola Mobil-ity’s sale to Google. What’s notable is that Barclays nearly doubled its workload in both volume and value, working eight deals worth $15bn in 2010 and 14 transactions valued

ABOUT THE TECH M&A BANKING REVIEW

The core objective of the Tech M&A Banking Review is to help buyers and sellers identify financial advisers that have experience in relevant markets, which should make for a more efficient deal. The report draws on data from The 451 M&A KnowledgeBase, a transactions database that focuses exclusively on the IT and communications sectors. The KnowledgeBase tracks 30,000 M&A deals that are searchable by more than 600 technology segments, enabling industry professionals to identify advisers that have worked on comparable transactions in those sectors. Additionally, the KnowledgeBase provides analysis of important enterprise IT deals and offers proprietary estimates of undisclosed deal value or trailing revenue for key transactions.

2 TECH M&A BANKING REVIEW 2011© 2012 451 RESEARCH, LLC AND/OR ITS AFFILIATES. ALL RIGHTS RESERVED.

at $28bn in 2011. Bank of America Merrill Lynch’s rank also remained unchanged at number five, with 22 deals worth slightly more than $25bn.

Lazard, which was absent from 2010’s top 10, ranked sixth, due almost entirely to its work on the Motorola Mobility sale (almost 95% of its $13.1bn total is attribut-able to advising Google on that transaction). Credit Suisse Securities slid one notch to the seventh position, although its $12.8bn worth of advisory credits was up slightly from 2010’s total. Centerview Partners, a newcomer to the top 10 list, finished less than $200m behind Credit Suisse, despite working only two deals the entire year. JP Morgan tumbled six positions from its 2010 rank to land in ninth place, a continued fall from 2009, when the firm led the rankings by advised deal value. Citigroup Global Markets took a more modest drop, dipping from the ninth position in 2010 to tenth in 2011. JP Morgan and Citigroup each advised on only one of the top 10 tech transactions of 2011.

1.1 SPENDING AND ACTIVITY BOTH UP AGAIN IN 2011

Overall spending and deal volume in tech M&A for all deals, including telecom and regardless of whether or not an adviser was involved, were both on the upswing again in 2011, although the spike was not as dramatic as it was in 2010. Spending rose 17% to $219.2bn, up from $186.6bn in 2010. The number of transactions in 2011 ticked up 13% to 3,696 from the 3,261 we saw in 2010. Focusing specifically on US-based targets (excluding telecom), the gains were a bit more modest, with spending up 11% to $115.2bn and deal volume up 7% to 2,055.

In our annual 451 Research Tech Banking Outlook Survey of senior bankers, conducted in December 2011, we asked bankers about their pipeline in 2012, and two-thirds expected an increase in sell-side mandates, down from 84% the previous year.


FIGURE 1.1: TECHNOLOGY ADVISORY AT A GLANCE: US ADVISORY IN 2011 BY DEALS AND DOLLARS ($M)

30

20

15

10

5$0 $5,000 $10,000 $15,000 $20,000

Houlihan Lokey

Credit Suisse

UBS

Bank of America $25,236

Deutsche Bank

ArchPoint

Morgan Stanley $38,967

JP Morgan

Barclays $27,790

Pagemill

Jordan Edmiston

Boutique Midmarket Bulge Bracket Bulge Boutique

Goldman Sachs $32,124

Petsky Prunier

GCA Savvian

Madison Park Group

KippsDeSanto

Morgan Keegan

Robert W. Baird

Stifel Nicolaus Weisel

America’s Growth Capital

Jefferies

N/A

TOTAL KNOWN DEAL VALUE ADVISED ($M)

TOTA

L A

DVIS

ED D

EALS

BANK CATEGORY

Qatalyst Partners $31,875

EvercoreRBC Capital Markets

Signal Hill

Raymond JamesWilliam Blair

Citigroup

Wells FargoBMO Capital Markets

Needham

Montgomery

Healthcare Growth Partners

Moelis


FIGURE 1.2: TECHNOLOGY ADVISORY AT A GLANCE: US ADVISORY IN 2011 BY DEALS AND DOLLARS ($M)

The graphic is limited to banks that advised on three or more transactions announced in 2011. Space limitations do not allow us to display the many other advisory firms that participated in less than three technology M&A transaction in 2011.

6

5

4

3

2$0 $100 $200 $300 $400 $500

Boutique Midmarket Bulge Bracket Bulge Boutique

N/A

TOTAL KNOWN DEAL VALUE ADVISED ($M)

TOTA

L A

DVIS

ED D

EALS

BANK CATEGORY

Corum

DecisionPoint

St. Charles Capital

Lazard $13,166

Harris Williams

CHILDS Advisory PartnersMooreland

BB&T

Bowen Advisors

Catapult Advisors

WWC SecuritiesBoston Meridian

Triple TreeCanaccord Genuity

Oppenheimer $959

Spurrier Capital Partners

Sagent

ThinkEquity

Ernst & Young $654

Pacific Crest

Lincoln International LUMA Partners

Q Advisors

Software Equity Group

Morgan Joseph TriArtisan

GrowthPoint Technology

Berkery Noyes

GridleyCogent Growth Partners

The McLean Group

Portico CapitalJanney Montgomery Scott

Craig-HallumHeadwaters


SECTION 2Banking Landscape

The number of investment banks advising on at least one US tech transaction in 2011 hit an all-time high of 197, a 20% jump from the prior year. However, established tech banks shouldn’t be afraid of what at first glance seems like an influx of tech advisers. While we did see a number of new names pop up on our list of financial advisers, the majority – 88 – of these firms printed only one tombstone in 2011. To us, this reads as either lifestyle firms that were satisfied with doing only one deal per year, or that the one tech transaction each of these banks announced was a simple one-time move outside of their core industry focus. We wouldn’t be surprised if many of these firms don’t announce any technology prints in 2012. In fact, tech bankers overall expect the number of boutique banks to dwindle this year. In our latest Banking Outlook Survey, 60% of respondents said they expect an increase in the failure or shutdown of boutiques in 2012, while only 6% expected a decrease.

There were some success stories, however. Headwaters MB, which renewed its tech practice in late 2010, announced seven deals in 2011. And after a quiet 2010, Boston Meridian printed three transactions last year. LUMA Partners, which was founded in 2010 and worked two deals that year, announced a half-dozen transactions in 2011. And new bank CODE Advisors, which was formed in early 2010 and announced its first deal at the end of the year, announced another transaction last year. Although it hasn’t yet announced an advisory credit, another new entrant is La Honda Advisors, set up by David Ketsdever, former head of tech investment banking at Cowen and Company.

As we saw a number of new entrants, we also witnessed a sprinkling of consolida-tion in the industry. In December 2011, Duff & Phelps announced that it would acquire Palo Alto, California-based boutique investment bank Pagemill Partners to expand its own tech practice. More recently, in January, Raymond James & Associates announced that it was buying Morgan Keegan, which itself had picked up tech boutique Revolu-tion Partners in December 2008. And although not technically an acquisition, all four bankers of Newforth Partners’ M&A team have joined Woodside Capital Partners.


FIGURE 2.1: EXPECTED CHANGES IN INVESTMENT BANKING LANDSCAPE: BANKER SURVEY

Source: The 451 Tech Banking Outlook Survey, December 2011

FIGURE 2.2: EXPECTED CHANGE IN PIPELINE OF SELL-SIDE M&A MANDATES, 2006-2011

2006 2007 2008 2009 2010 2011

INCREASE 84% 70% 39% 68% 84% 64%

INCREASE 25%+ 58% 31% 9% 39% 37% 33%

DECREASE 4% 13% 34% 19% 2% 12%

Source: The 451 Tech Banking Outlook Survey, 2006-2011

-100% -75% -50% -25% 0 25% 50% 75% 100%

Withdrawal of top-20 banks from tech banking

Failures or shutdowns of boutiques

Entry of new boutique startups

Acquisitions of US boutiques by larger banks

Acquisitions of US boutiques by non-US firms

Entry to US market by non-US banks

Mergers among boutiques of similar size

IPOs of US or non-US investment banks

20112010

Percentage of bankers saying activity: Will decrease Will increase


2.1 M&A ADVISORY MARKET SHARE BY CATEGORY: BOUTIQUES CONTINUE TO TAKE MARKET SHARE FROM BULGE BANKS

In 2011, boutique and bulge boutique banks together took a 10% market share from the bulge bracket, while full-service banks’ share remained relatively unchanged. The top 20 busiest banks, which are comprised of players from all banking categories, advised on 91% of 2011 deal flow by value, up from 86% in 2010. Altogether, some 197 banks advised on at least one transaction in 2011 – 46 more than in 2010. A total of 126 boutique banks advised on at least one tech deal in the US in 2011, up from 96 the previous year. Boutique-advised transactions accounted for a total of $14.6bn worth of deals, or 14% of the total value of advised acquisitions.

We divide the banking market into four main categories: bulge, full-service midmarket, bulge boutique and boutique.

Bulge bracket – After shooting up to a 74% market share in 2009, this group’s share shrank to 66% in 2010, and fell again in 2011 to 57%, the sector’s lowest share ever.

Full-service midmarket – The segment’s share fell to13%, its average over the past five years.

Boutiques – Banks in this sector advised on 304 transactions, 30 more that in 2010 and 110 more than in 2009.

Bulge boutiques – These high-profile advisory firms posted the most dramatic increase of the year, resulting in these six non-bulge banks taking a 16% market share.

FIGURE 2.3: M&A ADVISORY MARKET SHARE BY INVESTMENT BANK CATEGORY 2011 ($B)

Bulge Bracket (9)

Bulge Boutique (6)

Full-Service Midmarket (40)

Boutique (96)

$14.6

$17.2

$13.1

$60.3


FIGURE 2.4A: INVESTMENT BANK MARKET SHARE: ADVISED SPENDING BY BANK CATEGORY – 2008-2011

FIGURE 2.4B: M&A ADVISORY MARKET SHARE BY INVESTMENT BANK CATEGORY

2008 2009 2010 2011

BOUTIQUE 11% 6% 10% 14%

BULGE BOUTIQUE 6% 11% 10% 16%

FULL-SERVICE MIDMARKET 14% 9% 15% 12%

BULGE BRACKET 69% 74% 66% 57%

Definitions:

Bulge Bracket: Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, JP Morgan, UBS

Bulge Boutiques: High-end boutiques – Blackstone, Evercore, Greenhill & Co., Lazard, Moelis, Qatalyst

Full-Service Midmarket: Midmarket broker-dealers

Boutiques: Small firms focusing wholly or in large part on M&A advisory

2008 2009 2010 2011

80%

70%

60%

50%

40%

30%

20%

10%

0%

Perc

ent

of M

arke

t Sh

are

Bulge Bracket Full-Service Midmarket

Bulge Boutique Boutique

9%

69%

14%

10%

6%

11%

6%

74%

10% 10%

15%

66%

57%

14%16%

12%


SECTION 3Advising On Deals That Really Matter

This section of the Tech M&A Banking Review lists bankers that assisted sellers of tech nology companies within certain important categories in the past year. The tables below include:

Investment banks that helped sell companies to the large and active acquirers on 451 Research’s Big 10 list.

Bankers advising VC-backed sellers.

As with all of the information in this report, we provide this data to help sellers and buyers make more informed decisions when choosing investment bankers.

FIGURE 3.1: WHO’S SELLING TO WHOM: SELL-SIDE ADVISERS TO THE BIG 10 IN 2011

CISCO Boston Meridian, RBC Capital Markets

DELL Bank of America, Deutsche Bank, JP Morgan

EMC America's Growth Capital

GOOGLE Centerview Partners, Barclays, GCA Savvian, Headwaters, Peter Solomon, Qatalyst Partners, Sikich Investment Banking

HEWLETT-PACKARD Bank of America, Citigroup, Goldman Sachs, JP Morgan, Jefferies, Qatalyst Partners, UBS

IBM Credit Suisse, Goldman Sachs, Jefferies, Qatalyst Partners, Shea & Company. Union Square Advisors

MICROSOFT Goldman Sachs, JP Morgan

ORACLE Morgan Keegan, Morgan Stanley, Portico Capital

SAP Morgan Stanley

YAHOO Evercore, GCA Savvian (2), LUMA Partners

Note: Global targets, including telecommunications Source: The 451 M&A KnowledgeBase

FIGURE 3.2: ADVISERS TO THREE OR MORE VC-BACKED TARGETS IN 2011

America's Growth Capital GrowthPoint Technology Pacific Crest

ArchPoint JP Morgan Pagemill

Arma Partners Jefferies Piper Jaffray

Bank of America Jordan Edmiston Qatalyst Partners

Canaccord Genuity Montgomery Raymond James

Corum Mooreland Redwood Capital

Deutsche Bank Morgan Keegan Signal Hill

Evercore Morgan Stanley Spurrier Capital Partners

GCA Savvian Needham Stifel Nicolaus Weisel

Goldman Sachs Oppenheimer ThinkEquity


USING THIS REPORT AND THE 451 M&A KNOWLEDGEBASE TO HELP SELECT THE RIGHT DEAL ADVISERS

Getting good deals done in the IT sector is a complicated process. The number of potential acquirers is often large and diverse. The technology landscape itself is complex and volatile, with new technologies and business models periodically disrupting the market. The entry of private equity (PE) and international buyers adds further complexity.

A major objective of the Tech M&A Banking Review is to assist buyers and sellers in choosing appropriate banking or legal advisers for their technology transactions. Buyers and sellers also can do their own research on advisers in The 451 M&A Knowl-edgeBase, the transactions database that provides the data used in this report.

Here are some ways to use this report and the KnowledgeBase to find advisers with relevant experience:

Find bankers or attorneys with experience in specific sectors: Locating advisers experienced with the ins and outs of a specific sector is one of the most impor tant tasks for a buyer or seller. 451 Research takes great care in assigning transac tions to our more than 600 sector categories. Use our sector tables in this report to find top advisers by sector. Use the KnowledgeBase for more customized research, as illustrated in the final bullet point below.

Identify advisers experienced in dealing with key disruptive technologies and business models: In addition to tracking transactions by sector, the KnowledgeBase can guide advisers to companies that follow certain business models or industry ‘themes’ that are not industry segments, per se. For example, the KnowledgeBase tracks acquired companies that employ open source or SaaS business models or whose offerings are related to cloud computing or regulatory or financial compliance.

Find professionals who have worked with key acquirers or on signature deals: A seller targeting a big-name acquirer is likely to benefit from working with a banker or attorney who’s been up the learning curve with that buyer in the past. Within a matter of minutes, the KnowledgeBase can generate a list of advisory firms that have advised sellers to Microsoft, Google, Cisco or any other acquirer.

‘Roll your own’ search using the KnowledgeBase: Use the database to generate a list of advisers that have worked on PE-related deals or have advised VC-backed sellers. Look for advisers for any combination of more than 600 sectors and subsectors, geographies, date ranges and vertical markets ranging from travel to healthcare. Or find advisers to small, large or midsized deals, to transactions that had earnout arrangements, or to all-stock or all-cash acquisitions.

In sum, while this report offers a snapshot of deal adviser activity, The 451 M&A KnowledgeBase offers hundreds of additional ways to slice and dice the data in order to locate the most appropriate bankers in the complex world of IT M&A.


SECTION 4Top Tech Dealmakers 2011

FIGURE 4.1: LEADING ADVISERS TO US IT TRANSACTIONS BY DEAL VALUE

VALUE ($M) NUMBER 2010 RANK

1 Morgan Stanley $38,967 30 1

2 Goldman Sachs $32,124 23 23 Qatalyst Partners $31,875 18 104 Barclays $27,790 14 45 Bank of America $25,236 22 56 Lazard $13,166 4 117 Credit Suisse $12,815 19 68 Centerview Partners $12,672 2 299 JP Morgan $12,085 20 310 Citigroup $8,645 9 911 UBS $7,822 15 712 Houlihan Lokey $7,086 18 2613 Jefferies $6,191 16 1214 Deutsche Bank $4,872 17 815 RBC Capital Markets $4,611 13 1316 Evercore $4,374 14 2017 Blackstone $3,160 2 1818 Wells Fargo $3,048 8 4119 Peter Solomon $2,551 2 N/A20 Moelis $1,946 6 62

FIGURE 4.2: LEADING ADVISERS TO US IT TRANSACTIONS RANKED BY NUMBER OF DEALS

NUMBER VALUE ($M) 2010 RANK

1 Morgan Stanley 30 $38,967 1

2 Goldman Sachs 23 $32,124 23 Bank of America 22 $25,236 54 JP Morgan 20 $12,085 245 Credit Suisse 19 $12,815 136 Qatalyst Partners 18 $31,875 317 Houlihan Lokey 18 $7,086 128 Deutsche Bank 17 $4,872 159 Jefferies 16 $6,191 310 UBS 15 $7,822 1711 GCA Savvian 15 $538 912 America's Growth Capital 15 $290 713 Pagemill 15 $290 614 Barclays 14 $27,790 2015 Evercore 14 $4,374 6016 RBC Capital Markets 13 $4,611 2717 Signal Hill 13 $115 1018 Morgan Keegan 12 $478 2819 Raymond James 10 $1,870 1820 William Blair 10 $480 8


SECTION 55.1 SECTOR LEADERS 2011: APPLICATION SOFTWARE, INFORMATION

MANAGEMENT & INFRASTRUCTURE MANAGEMENTTOP DEALMAKERS BY DEAL VALUE

VALUE ($M)

NUMBER 2010 RANK


2 Bank of America $8,771 7 2

3 Barclays $8,254 8 1

4 JP Morgan $6,266 6 5

5 Citigroup $5,145 4 N/A

6 RBC Capital Markets $4,545 9 12

7 Credit Suisse $4,401 10 7

8 UBS $3,000 2 9

9 Blackstone $3,000 1 17

10 Goldman Sachs $2,826 6 3

TOP DEALMAKERS BY DEAL VOLUME

NUMBER VALUE ($M)

2010 RANK


2 Credit Suisse 10 $4,401 9

3 RBC Capital Markets 9 $4,545 52

4 Barclays 8 $8,254 13

5 Bank of America 7 $8,771 7

6 BMO Capital Markets 7 $1,035 65

7 Morgan Keegan 7 $448 28

8 Pagemill 7 $31 5

9 JP Morgan 6 $6,266 8

10 Goldman Sachs 6 $2,826 1

*Advisers ranked by number of deals advised, then (in case of a tie) by total deal value of those deals.

SECTOR MEDIAN MULTIPLES*

*Multiple of deal value / TTM revenue

3.5

3.0

2.5

2.0

1.5

1.0

6.0

5.0

4.0

3.0

2.0

1.0

Med

ian

mul

tiple

for

advi

sed

targ

ets

Med

ian

mul

tiple

for

non-

advi

sed

targ

ets

2009 2010 2011

Num

ber

of d

eals

$50

$40

$30

$20

$10

$0

650

600

550

500

450

400

M&A TREND

Valu

e of

dea

ls ($B

)

2009 2010 2011

100%

80%

60%

40%

20%

0%

100%

80%

60%

40%

20%

0%

PERCENT OF TRANSACTIONS WITH AT LEAST ONE ADVISER ON EITHER SIDE

Valu

e of

dea

ls

Num

ber

of d

eals

2009 2010 2011


5.2 SECTOR LEADERS 2011: INTERNET CONTENT & COMMERCE

TOP DEALMAKERS BY DEAL VALUE

VALUE ($M)

NUMBER 2010 RANK



3 Peter Solomon $2,551 2 NA

4 Evercore $2,270 5 10

5 UBS $2,230 4 6

6 JP Morgan $1,728 4 36

7 Qatalyst Partners $1,248 4 NA

8 Allen & Co. $1,079 2 14

9 Bank of America $902 4 8

10 Deutsche Bank $688 3 38


NUMBER VALUE ($M)

2010 RANK

1 GCA Savvian 7 $28 15

2 Evercore 5 $2,270 22


4 UBS 4 $2,230 21

5 JP Morgan 4 $1,728 16

6 Qatalyst Partners 4 $1,248 NA

7 Bank of America 4 $902 4

8 Montgomery 4 $280 38

9 Petsky Prunier 4 NA 7

10 Deutsche Bank 3 $688 38



$15

$12

$9

$6

$3

$0

500

450

400

350

300

250

M&A TREND

Valu

e of

dea

ls ($B

)

Num

ber

of d

eals

2009 2010 2011

100%

80%

60%

40%

20%

0%

100%

80%

60%

40%

20%

0%


Valu

e of

dea

ls

Num

ber

of d

eals

2009 2010 2011


3.0

2.5

2.0

1.5

1.0

0.5

5

4

3

2

1

0

Med

ian

mul

tiple

for

advi

sed

targ

ets

Med

ian

mul

tiple

for

non-

advi

sed

targ

ets

2009 2010 2011


5.3 SECTOR LEADERS 2011: IT OUTSOURCING & BUSINESS SERVICES


VALUE ($M)

NUMBER 2010 RANK

1 Citigroup $2,980 4 3



4 Houlihan Lokey $2,254 6 18

5 Morgan Stanley $950 2 1

6 UBS $855 3 6

7 Credit Suisse $816 3 3

8 Stifel Nicolaus Weisel $431 3 23

9 Raymond James $397 2 15

10 Jefferies $386 4 13


NUMBERVALUE ($M)

2010 RANK

1 Houlihan Lokey 6 $2,254 16

2 KippsDeSanto 6 $233 6

3 Robert Baird 5 $268 4

4 Citigroup 4 $2,980 7

5 Jefferies 4 $386 5

6 Lincoln International 4 $290 28

7 Signal Hill 4 $115 N/A

8 Cogent Growth Partners 4 N/A N/A





100%

80%

60%

40%

20%

0%

100%

80%

60%

40%

20%

0%


Valu

e of

dea

ls

Num

ber

of d

eals

2009 2010 2011


1.5

1.2

0.9

0.6

0.3

0

1.5

1.2

0.9

0.6

0.3

0

Med

ian

mul

tiple

for

advi

sed

targ

ets

Med

ian

mul

tiple

for

non-

advi

sed

targ

ets

2009 2010 2011

$20

$16

$12

$8

$4

$0

500

450

400

350

300

250

M&A TREND

Valu

e of

dea

ls ($B

)

Num

ber

of d

eals

2009 2010 2011


5.4 SECTOR LEADERS 2011: MOBILITY


VALUE ($M)

NUMBER 2010 RANK

1 Qatalyst Partners $12,740 2 1

2 Barclays $12,500 1 N/A

3 Centerview Partners $12,500 1 N/A

4 Lazard $12,500 1 N/A

5 Harris Williams $415 1 N/A

6 Wells Fargo $415 1 N/A

7 Morgan Stanley $104 1 N/A

8 Houlihan Lokey $45 1 5

9 Northland Securities $45 1 N/A

10 Headwaters $42 1 N/A


NUMBERVALUE ($M)

2010 RANK

1 Qatalyst Partners 2 $12,740 6

2 Barclays 1 $12,500 N/A

3 Centerview Partners 1 $12,500 N/A

4 Lazard 1 $12,500 N/A

5 Harris Williams 1 $415 N/A

6 Wells Fargo 1 $415 N/A

7 Morgan Stanley 1 $104 N/A

8 Houlihan Lokey 1 $45 7

9 Northland Securities 1 $45 N/A

10 Headwaters 1 $42 N/A



100%

80%

60%

40%

20%

0%

100%

80%

60%

40%

20%

0%


Valu

e of

dea

ls

Num

ber

of d

eals

2009 2010 2011


5

4

3

2

1

0

10

8

6

4

2

0

Med

ian

mul

tiple

for

advi

sed

targ

ets

Med

ian

mul

tiple

for

non-

advi

sed

targ

ets

2009 2010 2011

$20

$16

$12

$8

$4

$0

100

90

80

70

60

50

M&A TREND

Valu

e of

dea

ls ($B

)

Num

ber

of d

eals

2009 2010 2011


5.5 SECTOR LEADERS 2011: SECURITY & ENTERPRISE NETWORKING


VALUE ($M)

NUMBER 2010 RANK


2 Jefferies $1,300 2 30

3 Bank of America $612 1 14

4 JP Morgan $225 2 4

5 Boston Meridian $210 3 N/A

6 Houlihan Lokey $162 2 24

7 Blackstone $160 1 N/A

8 Morgan Stanley $89 1 2

9 ArchPoint $82 1 N/A

10 KPMG $72 1 N/A


NUMBERVALUE ($M)

2010 RANK


2 Boston Meridian 3 $210 N/A

3 Jefferies 2 $1,300 12

4 JP Morgan 2 $225 4


6 America's Growth Capital 2 $35 1

7 Bowen Advisors 2 N/A N/A

8 Bank of America 1 $612 5

9 Blackstone 1 $160 N/A

10 Morgan Stanley 1 $89 3


100%

80%

60%

40%

20%

0%

100%

80%

60%

40%

20%

0%


Valu

e of

dea

ls

Num

ber

of d

eals

2009 2010 2011


*Multiple of deal value / TTM revenue **Median multiple for unadvised targets unavailable for 2010

5

4

3

2

1

0

20

16

12

8

4

0

Med

ian

mul

tiple

for

advi

sed

targ

ets

Med

ian

mul

tiple

for

non-

advi

sed

targ

ets

2009 2010 2011

$20

$16

$12

$8

$4

$0

150

120

90

60

30

0

M&A TREND

Valu

e of

dea

ls ($B

)

Num

ber

of d

eals

2009 2010 2011


5.6 SECTOR LEADERS 2011: SEMICONDUCTORS


VALUE ($M)

NUMBER 2010 RANK

1 Qatalyst Partners $15,048 6 N/A



4 Credit Suisse $5,170 2 N/A

5 Houlihan Lokey $4,319 3 12

6 Barclays $4,220 2 10

7 Bank of America $3,635 2 N/A

8 UBS $1,399 3 N/A

9 JP Morgan $1,194 3 3

10 Needham $679 5 9


NUMBERVALUE ($M)

2010 RANK

1 Qatalyst Partners 6 $15,048 N/A

2 Needham 5 $679 6

3 Pagemill 5 $157 7



6 Houlihan Lokey 3 $4,319 15

7 UBS 3 $1,399 N/A

8 JP Morgan 3 $1,194 5

9 Credit Suisse 2 $5,170 N/A

10 Barclays 2 $4,220 13

*Advisers ranked by number of deals advised, then (in case of a tie) by total deal value of those deals. SECTOR MEDIAN MULTIPLES*

100%

80%

60%

40%

20%

0%

100%

80%

60%

40%

20%

0%


Valu

e of

dea

ls

Num

ber

of d

eals

2009 2010 2011


**Median multiple for unadvised targets unavailable for 2010

2.5

2.0

1.5

1.0

0.5

0

2.5

2.0

1.5

1.0

0.5

0

Med

ian

mul

tiple

for

advi

sed

targ

ets

Med

ian

mul

tiple

for

non-

advi

sed

targ

ets

2009 2010 2011

$30

$24

$18

$12

$6

$0

120

100

80

60

40

20

M&A TREND

Valu

e of

dea

ls ($B

)

Num

ber

of d

eals

2009 2010 2011


5.7 SECTOR LEADERS 2011: STORAGE, SYSTEMS & MEDIA TECHNOLOGIES


VALUE ($M)

NUMBER 2010 RANK




4 JP Morgan $1,800 2 3

5 Jefferies $1,282 2 10

6 Atlas Advisors $1,200 1 N/A

7SunTrust Robinson Humphrey

$1,200 1 N/A

8 Credit Suisse $600 1 N/A

9 Wells Fargo $600 1 N/A

10 Deutsche Bank $520 1 N/A


NUMBERVALUE ($M)

2010 RANK



3 America's Growth Capital 3 $125 15


5 JP Morgan 2 $1,800 2

6 Jefferies 2 $1,282 8

7 UBS 2 $306 6


9 Pagemill 2 $70 16

10 GrowthPoint Technology 2 $6 21




3.0

2.5

2.0

1.5

1.0

0.5

3.0

2.5

2.0

1.5

1.0

0.5

Med

ian

mul

tiple

for

advi

sed

targ

ets

Med

ian

mul

tiple

for

non-

advi

sed

targ

ets

2009 2010 2011

100%

80%

60%

40%

20%

0%

100%

80%

60%

40%

20%

0%


Valu

e of

dea

ls

Num

ber

of d

eals

2009 2010 2011

$20

$16

$12

$8

$4

$0

200

160

120

80

40

0

M&A TREND

Valu

e of

dea

ls ($B

)

Num

ber

of d

eals

2009 2010 2011


5.8 SECTOR LEADERS 2011: HOSTED SERVICES


VALUE ($M)

NUMBER 2010 RANK

1 Bank of America $3,052 2 N/A

2 Morgan Stanley $2,768 3 N/A

3 Barclays $2,500 2 6

4 Goldman Sachs $1,952 2 N/A

5 Credit Suisse $1,400 2 N/A

6 Deutsche Bank $782 3 N/A

7 JP Morgan $552 1 N/A

8 Wells Fargo $552 1 14

9 Raymond James $230 1 N/A

10 Bank Street Group $167 1 10


NUMBERVALUE ($M)

2010 RANK

1 Morgan Stanley 3 $2,768 N/A

2 Deutsche Bank 3 $782 N/A

3 Stifel Nicolaus Weisel 3 $95 17

4 Bank of America 2 $3,052 N/A

5 Barclays 2 $2,500 7

6 Goldman Sachs 2 $1,952 N/A

7 Credit Suisse 2 $1,400 N/A

8 D.H. Capital 2 $100 4

9 RBC Capital Markets 2 N/A 2

10 JP Morgan 1 $552 9


**Transactions included in hosted services include colocation, content delivery networks, disaster recovery, Internet peering, managed hosting and Web hosting.

100%

80%

60%

40%

20%

0%

100%

80%

60%

40%

20%

0%


Valu

e of

dea

ls

Num

ber

of d

eals

2009 2010 2011

$10

$8

$6

$4

$2

$0

75

60

45

30

15

0

M&A TREND

Valu

e of

dea

ls ($B

)

Num

ber

of d

eals

2009 2010 2011


SECTION 6 More Information On The Tech M&A Banking Review

This 451 Research report covers all IT-related M&A transactions announced – but not necessarily closed – between January 1, 2011 and December 31, 2011 that involve the purchase of 50.1% or more of targets based in the US. It does not cover joint ventures, spinoffs or minority investments unless the transaction involves the purchase of a majority of a company.

Data is drawn from The 451 M&A KnowledgeBase, a proprietary database of roughly 30,000 IT and telecom deals from 2002 to present.

This report focuses only on the IT segment, which includes the full range of products and services such as hardware, software, IT services, technology-enabled outsourcing, and Internet e-commerce and content companies. It does not include telecom carriers, telecom service providers or telecom hardware or software vendors. Our definition of IT does not include categories like electromechanical equipment, biomedical equipment or life sciences.

Transactions are valued as of the date of the deal announcement, and in the case of mergers, deal value is based on the company that is the target of the transaction. Earnouts or other contingent payments not assured at the time of announcement are not included in the deal value.

Each adviser is given credit for the full value of the transaction advised. Both merger advisory and fairness opinion credits are included; however, a given adviser that provides both merger advisory and fairness opinion for a deal is given only a single credit for that transaction.

Total deal value numbers in this report include proprietary estimates prepared by 451 Research for some transactions. The KnowledgeBase includes hundreds of deal value and TTM revenue estimates prepared by our analysts and validated with sources close to the deal. Transactions with no officially announced or estimated value are, of course, included in all deal counts.

451 Research is committed to offering the industry’s most accurate, granular and comprehensive review of technology M&A advisory activity. To ensure that we have complete coverage of all investment banks, our researchers have contacted each advisory firm at least twice to identify or validate our records of that firm’s advisory credits. Further, we have invited each firm to include us on its regular mailing list so that we can keep advisory data current in the KnowledgeBase. We can only ensure inclusion of advisory credits that are submitted to us before midnight PST on the last day of the period being measured (e.g., for our next annual report, midnight PST on December 31, 2012). The Tech M&A Banking Review reflects the 451 Research team’s best efforts to gather, compile and classify transaction data; any errors of omission or commission are unintended. For more information on how to contribute advisory information, please contact Adam Phipps at adam.phipps@ 451research.com or (415) 989-1555 x106.


The 2011 Tech M&A Banking Review was compiled and written by a team led by Adam Phipps that also included Ben Kolada, Brian Satterfield and other 451 Research M&A analysts. A special thanks to the 45-plus analysts from 451 Research and Tier1 Research who write hundreds of deal analyses every year, help validate estimated deal values and assist the M&A team in classifying acquired companies into the correct industry categories.

Date post:	15-Dec-2015
Category:	Documents
Upload:	oliver
View:	20 times
Download:	11 times

The 451 2011 Tech Banking Review

Documents