Software was the Most Active and Highest Value Segment in 3Q17 with 606 Transactions Totaling $29.4 Billion in Reported Deal Value

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1 jd1 3Q17 Summary of M&A and Investment Activity in the : 814 Totaling a $49.4 Billion Software was the Most Active and Highest Value Segment in 3Q17 with 606 Totaling $29.4 Billion in Deal Value During 3Q17, Petsky Prunier tracked 814 M&A and investment transactions for a total of $49.4 billion across three broad segments: Software, Information, and Business & IT Services. Software was the most active segment, accounting for 74 percent of total volume during the third quarter of the year, with 606 deals announced. Of those, 385 reported $29.4 billion in value. The Information and Business & IT Services segments reported values of $7.7 billion and $12.3 billion, respectively, in 3Q17. 3Q16 3Q17 M&A and Investment Activity $ in Billions 3Q17 M&A and Investment Activity $ in Millions DOLLAR VALUE $58.7 NetSuite / Oracle HPE Software / Micro Systems $38.0 TeamHealth/ Blackstone $42.3 $55.9 $49.4 Information $7,739 Business & IT Services $12,282 DEAL VOLUME Software $29,391 3Q16 4Q16 1Q17 2Q17 3Q17 * valued at $6 billion or more have been excluded from totals to limit comparative distortions. The aggregate total for 3Q16 does not include Oracle s $9.3 billion acquisition of NetSuite and Micro Focus $8.8 billion acquisition of Hewlett Packard Enterprises Software business. The aggregate total for 4Q16 does not include Blackstone s $6.1 billion acquisition of Team Health. Page 1

2 M&A Activity Acquisitions accounted for 48 percent of total transaction activity in 3Q17, with 388 majority transactions announced, 82 of which were reported for $40.0 billion in aggregate value. The majority of the quarter s largest deals were completed by private equity firms. M&A activity in the third quarter of the year was up 15 percent compared with 2Q17, while volume decreased 15 percent. Software was the most active M&A segment in 3Q17 with 228 transactions, of which 48 were reported worth $21.6 billion. The Financial Software and Healthcare Software subsegments accounted for nearly 30 percent of the segment s activity with 38 and 29 deals announced, respectively. Financial Software was the highest value subsegment with 12 transactions reporting $9.6 billion. in the segment during 3Q17 included: Thoma Bravo backed Digicert s acquisition of Symantec s Website Security business for $950 million The $850 million acquisition of accounting software developer Intacct by Sage Group Germany based Korber s acquisition of supply chain software company HighJump Software for $750 million The $705 million Nasdaq acquisition of evestment Alliance, a provider of analytics solutions to asset managers and investment consultants, from Insight Venture Partners Cisco s $320 million acquisition of data management and hyperconvergence software company Springpath The Information segment reported 13 M&A transactions, including five worth a reported $7.4 billion. Nearly half of all acquisitions in the segment occurred within the Healthcare Information subsegment with six transactions announced. in the segment during 3Q17 included: The pending acquisition of WebMD by KKR in a transaction valuing the company at $3.7 billion The Advisory Board s sale of its health division to UnitedHealth Group for $1.3 billion PRA Healthcare Sciences $530 million acquisition of Symphony Health Solutions The acquisition of B to B data provider Zoom Information by Great Hills Partners for a reported $240 million The Business & IT Services segment had 147 M&A transactions during 3Q17, of which 29 were valued at $11.0 billion. The IT Consulting/Systems Integration subsegment accounted for more than half of the segment s activity with 79 transactions, of which 13 were worth a reported $1.4 billion in value. The Corporate Training subsegment also was active with 13 acquisitions announced. in the segment during 3Q17 included: Leonard Green & Partners pending acquisition of intellectual property and legal support services company CPA Global in a transaction valued at a reported $3.1 billion, including debt Evotec s acquisition of drug discovery and research services provider Aptuit from Welsh, Carson, Anderson & Stowe for $300 million Telus acquisition of customer experience and technical support services company Voxpro for $177 million The $155 million acquisition of Microsoft Dynamics 365 solutions and managed cloud services company Tribridge by DXC Technology Capgemini s acquisition of digital and commerce service provider Lyons Consulting Group Page 2

3 Investment Activity There were 426 investments announced in 3Q17, of which 373 were reported for $9.4 billion in aggregate value. Software was the most active investment segment with 378 deals, of which 337 reported $7.8 billion in value. The Financial and Security Software subsegments, together, accounted for 39 percent of investment activity in the segment during the third quarter of the year with 89 and 60 transactions, respectively. Financial Software was the highest value subsegment, with 72 transactions worth a reported $2.1 billion. Investments in the segment during 3Q17 included: The $250 million investment received by payments solutions company Klarna from Permira at a reported valuation of $2.5 billion Slack Technologies $250 million round of funding at a reported valuation of $5.1 billion from SoftBank and Accel Partners The Andreessen Horowitz led $140 million round of funding in data extraction and analysis company Databricks Restaurant management and point of sale platform Toast s $101 million round of funding from Bessemer Venture Partners, Generation Investment Management, and Lead Edge Capital Warburg Pincus $100 million investment in managed detection and security solutions company esentire The Business & IT Services segment reported 35 investments, of which 24 were worth $1.3 billion in value. Investment activity was driven by the Corporate Training subsegment, which accounted for more than onethird of the segment s volume with 13 transactions. Business & IT Services investments during 3Q17 included: The $233 million in equity funding received by Vets First Choice, a provider of tech enabled services for veterinary practitioners, from Clayton, Dubilier & Rice IMG Financial s $40 million investment in wealth management services and software company Personal Capital Corporation The $21 million round of funding raised by online classes and education benefits company Guild from Bessemer Venture Partners, Redpoint Ventures, Harrison Metal, and Cowboy Ventures Buyer & Investor Activity Strategic buyers announced 339 deals during the third quarter of the year, of which 67 were reported for $22.8 billion in aggregate value. Software was the most active and largest value segment with 198 transactions, 43 of which were worth a reported $16.1 billion in value. Strategic buyers completed 131 Business & IT Services deals, of which 21 were worth $3.2 billion in reported value. Buyout firms completed 49 acquisitions in 3Q17, with 15 transactions reporting $17.3 billion in aggregate value. The Software segment accounted for more than 60 percent of transaction activity. In addition to KKR s pending $3.7 billion acquisition of WebMD and Leonard Green & Partners pending $3.1 billion acquisition of CPA Global, buyout transactions in 3Q17 included: Page 3

4 Vista Equity Partners $1.6 billion acquisition of Advisory Board s Education assets Clearlake Capital s sale of data integration software company Syncsort to Centerbridge Partners for a reported $1.3 billion The $1 billion acquisition of third party logistics services and transportation management company Transplace by TPG Capital 3Q17 Most Active Strategic Buyers by Buyer Representative Targets The reported value of transactions completed by venture and growth capital investors in 3Q17 increased five percent compared to the second quarter of 2017, while activity remained flat. New Enterprise Associates was the most active investor with 16 investments reporting $415 million in value. Page 4

5 3Q17 Most Active Investors by Investor Representative Investments IPO Activity China based logistics company Best Logistics completed the only IPO in the Software, Information, and Business & IT Services segments in 3Q17. Open source database developer MongoDB submitted its IPO filings during the third quarter of the year, but has yet to price. *All values as of 5pm ET on 9/30/2017. Transaction values include only reported up front cash payments and do not account for any potential future performance based compensation unless noted. Page 5

6 Quarterly M&A and Investment Activity by Segment Most Active Software Subsegments 2Q17 3Q17 LTM 3Q17 vs 2Q17 (% Change) Subsegment Financial 97 8, , ,547 31% 37% Healthcare 80 2, , ,445 6% (55%) Security 73 1, , ,246 12% 70% HR ,680 21% (2%) Data Management ,424 46% 59% ERP 40 3, , ,866 (5%) (37%) Big Data 31 1, , ,474 (6%) 30% Software Development Tools ,663 (26%) (75%) Credit/Risk ,706 (27%) 27% Other 113 4, , ,349 (5%) 90% Total , ,391 2,109 99,400 7% 23% Most Active Business & IT Services Subsegments 2Q17 3Q17 LTM 3Q17 vs 2Q17 (% Change) Subsegment IT Consulting 69 2, , ,350 25% (49%) Corporate Training 26 3, ,063 0% (79%) Healthcare Consulting 11 10, , ,058 36% (86%) Staffing , % 27% Legal Consulting ,183 60% 49% Logistics 9 1, , ,866 (11%) 20% Management Consulting NM NM HR Consulting , % NM Financial Consulting , , % 101% Engineering Consulting (50%) NM Other 18 8, , ,899 (72%) (51%) Total , , ,817 20% (56%) Most Active Information Subsegments 2Q17 3Q17 LTM 3Q17 vs 2Q17 (% Change) Subsegment Healthcare Information , ,048 63% 877% Financial Information 15 3, ,120 (80%) (92%) Credit/Risk Management Information , % (86%) Engineering/Scientific/Tech Information (33%) (61%) Legal Information % NM Product/Price Information (33%) (85%) Geo-Demographic Information (50%) NM HR Information ,383 NM NM IT Information (100%) NM Total 34 4, , ,312 (24%) 81% About Petsky Prunier LLC Petsky Prunier is one of the leading investment banks in the technology, media, marketing, ecommerce, and healthcare industries. Our firm's merger and acquisition and private placement advisory services reflect a unique blend of product specialization and industry expertise. Together with strategic consulting firm Winterberry Group, a Petsky Prunier company, our organization represents one of the largest industry specific advisors providing strategic and transactional services. We offer global reach supplemented through our partnerships with investment bank The Mountain Capital Group in China, as well as Allegro Advisors and o3 Capital in India. Securities transactions are processed through Petsky Prunier Securities LLC, a member of FINRA and an affiliated entity. For press inquiries, please contact Amy LaBan at or alaban@petskyprunier.com. Page 6

7 Representative Recent *Approximate Transaction Value Page 7