` 3Q18 Summary of M&A and Investment Activity in the : 990 Totaling a $55.9 Billion Digital Media/Commerce was the Most Active Segment with 427, Followed by Marketing Technology with 260 ; Digital Media/Commerce was the Highest Value Segment with $30.2 Billion in Deal Value During 3Q18, Petsky Prunier tracked 990 M&A and investment transactions for a total of $55.9 billion across five broad segments: Digital Media/Commerce, Digital Advertising, Marketing Technology, Agency & Marketing Services, and Traditional Media. Digital Media/Commerce and Marketing Technology were the most active segments with 427 and 260 transactions, respectively, while Digital Media/Commerce was the highest reported value segment totaling $30.2 billion. 3Q17-3Q18 M&A and Investment Activity $ in Billions 3Q18 M&A and Investment Activity $ in Millions DOLLAR VALUE $114.2 Digital Advertising $2,050 Digital Media / Commerce $30,186 $58.5 Scripps / Discovery 21 st Century Fox / Disney $50.0 YOOX $73.0 Flipkart/ Walmart Ele.me/ Alibaba $55.9 DEAL VOLUME $43.6 $45.2 $43.4 $42.5 $55.9 861 788 880 933 990 3Q17 4Q17 1Q18 2Q18 3Q18 Marketing Technology $11,111 Agency & Marketing Services $6,684 Traditional Media $5,907 * valued at $6 billion or more have been excluded from totals to limit comparative distortions. The aggregate total for 3Q17 does not include Discovery Communications $15 billion acquisition of Scripps Networks. The aggregate total for 4Q17 does not include Disney s pending $69 billion acquisition of 21 st Century Fox. The aggregate total for 2Q18 does not include Walmart s $16 billion majority investment in Flipkart and Alibaba s $9.5 billion acquisition of Ele.me. Page 1
M&A Activity 702 759 769 880 759 Acquisitions accounted for 52 percent of total transactions and value in 3Q18. Digital Media/Commerce was the most active and valuable M&A segment with 149 transactions, of which 30 were reported for $9.5 billion in value. The most active subsegment was ecommerce with 65 acquisitions. Digital Media/Commerce transactions announced during 3Q18 included: The pending acquisition of Pandora by Sirius XM in a transaction valuing the company at $3.3 billion Best Buy s pending $800 million purchase of GreatCall, an online retailer of health and safety solutions for older adults The $220 million acquisition of Latina America online grocery delivery marketplace Cornershop by Walmart The majority stake taken by Movado in online watch retailer MVMT in a transaction valued at $200 million Purch s sale of its B2C business division to Future in a transaction valued at $133 million Marketing Technology was the second most active M&A segment with 117 transactions, of which 19 were reported for $7.7 billion in value. Compared with the second quarter of 2018, reported acquisition value in 3Q18 remained flat while volume was down 12 percent. CRM was the most active subsegment, with 13 transactions in the quarter, followed by Search & Discovery with 10 transactions. in the segment announced during 3Q18 included: Adobe s pending acquisition of Marketo from Vista Equity Partners in a transaction valued at $4.8 billion Marketing intelligence and data analytics platform Datorama s sale to Salesforce for $850 million The acquisition of real estate referral management solutions company Opcity by News Corp.-owned Move in a transaction valued at $210 million Third quarter activity in the Agency & Marketing Services segment was up 30 percent quarter-over-quarter and 25 percent compared with the third quarter of 2017 with 131 M&A transactions announced, of which 21 were reported for $6.4 billion in aggregate value. Select transactions in the segment announced during 3Q18 included: Interpublic Group s pending $2.3 billion acquisition of Acxiom s Marketing Solutions business New Mountain Partners sale of data analytics business Information Resources (IRI) to Swiss investment firm Partners Group in a transaction reported to be valued at more than $2 billion The $350 million acquisition of Netherlands-based creative digital production agency MediaMonks by S4 Capital Air Canada s pending takeover of Aimia s Aeroplan Loyalty Program in a deal valued at $350 million Huntsworth s acquisition of healthcare marketing agency Giant Creative Strategy from Shamrock Capital Partners for $72.2 million in cash and additional value up to $97.2 million (A Petsky Prunier-led transaction) 3Q18 M&A activity in the Traditional Media segment was down 10 percent compared with the second quarter of 2018, while value was down 15 percent with 66 transactions, of which 17 reported $5 billion in value. The Entertainment Media subsegment accounted for more than one-third of the segment s total M&A activity with 23 deals announced. in the Traditional Media segment announced during 3Q18 included: Page 2
Nine Entertainment s acquisition of television broadcasting and production services company Fairfax Media in a transaction valued at $1.9 billion The purchase of OTT content distributor RLJ Entertainment by Digital Entertainment for $195 million Meredith s sale of Time magazine to Salesforce CEO Marc Benioff in a transaction valuing the asset at $190 million EH Media s $32 million sale of its Technology Events business to Emerald Expositions Events Digital Advertising activity in 3Q18 was up more than 20 percent quarter-over-quarter with 51 transactions announced, of which 16 were valued at $1.2 billion. Select transactions in the Digital Advertising segment during 3Q18 included: The acquisition of mobile ordering, payments, and loyalty programs app LevelUp by Groupon for $390 million Scout24 s purchase of Germany-based consumer loans comparison platform Finanzcheck.de in a transaction valuing the company at $333 million The acquisition of student loan comparison marketplace Student Loan Hero for $60 million by LendingTree Halyard Capital s sale of mobile video and branded content advertising company Jun Group to Advantage Solutions (A Petsky Prunier-led transaction) Investment Activity There were 476 investments during 3Q18, of which 418 reported $26.2 billion in value. value for venture and growth capital investments was up 53 percent from the second quarter of 2018, while activity was up eight percent. Eighty-eight percent of third-quarter investments were made in the Digital Media/Commerce and Marketing Technology segments with 278 and 143 deals announced, respectively. Digital Media/Commerce was the highest value segment during the quarter with 253 deals reporting $20.7 billion in value. Investments in the segment during 3Q18 included: The $500 million investments received by Uber and China-based competitor Didi Chuxing from Toyota and Bookings Holdings, respectively Local buying and selling mobile app Letgo s $500 million round of funding from Naspers On-demand delivery company Postmates $300 million investment led by Tiger Global Management at a reported valuation of $1.2 billion Coatue Management and DST Global s $250 million investment in on-demand food delivery service DoorDash at a reported valuation of $4 billion, just five months after the company announced a $535 million round at a reported value of $1.4 billion Unbranded food and consumer products company Brandless $240 million round of funding from SoftBank and GV Marketing Technology was the second most active investment segment with 143 transactions, of which 120 reported $3.4 billion in value. Analytics & Targeting, CRM, and Product/Price investments accounted for nearly Page 3
40 percent of the segment s activity with 32, 13, and 10 investments, respectively. Investments in the segment during 3Q18 included: The $225 million investment received by MediaMath from Searchlight Capital Partners Customer engagement software provider Freshworks $100 million Series G funding from Sequoia Capital, Accel Partners, and CapitalG Insight Venture Partners $80 million investment in business analytics platform Sisense Product experience platform Pendo s $50 million round of funding from Sapphire Ventures, Geodesic Capital, FirstMark Capital, Battery Ventures, and Spark Capital There were 31 investments in the Digital Advertising segment, of which 28 reported more than $800 million in value. The most active subsegments were Ad Networks/Exchanges and Vertical Search, each of which announced seven investments throughout the quarter. Digital Advertising investments during 3Q18 included: The $400 million minority stake purchased by KKR in mobile marketing and advertising company AppLovin at a reported valuation of $2 billion Old Mutual Global Investors $68 million investment in luxury travel flash sales platform Secret Escapes Silver Lake Capital s investment in drug price comparison platform GoodRx, reportedly at a valuation of $2.8 billion for one-third of the company Buyer & Investor Activity Strategic buyers accounted for 91 percent of all control transactions in 3Q18 with 467 strategic deals announced, 90 of which were reported for $27 billion in value. Activity was dominated by the Digital Media/Commerce, Marketing Technology, and Agency & Marketing Services segments throughout the quarter, accounting for 77 percent of total activity. The most active strategic acquirer was advertising holding company WPP with six transactions, followed by Walmart with five transactions announced. Buyout firms completed 46 acquisitions in 3Q18, of which 12 were reported for $2.8 billion in value. Nearly 30 percent of all buyout transactions were in the Agency & Marketing Services segment with 13 deals, of which six were worth $880 billion. Buyout transactions announced in 3Q18 included: Accel-KKR s $1.1 billion sale of content management platform Episerver to Vista Equity Partners The pending take-private of XOXO Group by Permira Advisors and Spectrum Equity-backed WeddingWire in a transaction valued at $810 million Mill Point Capital s $500 million acquisition of Affinion s Insurance Solutions division Exponent Private Equity s purchase of UK-based print and digital publisher Dennis Southfield Capital s acquisition of omnichannel marketing services firm Match Marketing Group from Beringer Capital (A PetskyPrunier-led transaction) The acquisition of Toronto-based, AI-powered marketing tech platform Cluep by grocery sales and marketing agency Impact Group, a portfolio company of CI Capital Partners (A Petsky Prunier-led transaction) Page 4
3Q18 Most Active Strategic Buyers by Buyer Representative Targets 6 India 5 4 3 Marketing Solutions Business 3 Performance Marketing Division 3 3 Venture and growth capital investors accounted for 477 transactions, of which 419 were reported for $26.2 billion in value. Compared to 2Q18, investment value was up 53 percent, while activity was up nine percent. Sequoia Capital and Tencent were the most active investors during 3Q18, completing 14 and 11 investments, respectively. Page 5
3Q18 Most Active Investors by Investor Representative Investments 14 11 9 8 7 6 5 5 IPO Activity Companies headquartered outside the US drove IPO activity in 3Q18. China-based auto services platform Cango, China-based keyboard application CooTek, event technology platform Eventbrite, UK-based fashion ecommerce website Farfetch, China-based online marketplace Meituan Dianping, Norway-based web browser Opera Software, China-based ecommerce marketer Pinduoduo, China-based news app Qutoutiao, and market research company SurveyMonkey completed IPOs in the third quarter of the year. Data analytics company Elastic, freelancer connection platform Upwork, and China-based auto loans company Weidai filed to go public in 3Q18, but have yet to price. * All values as of 5pm ET on 9/28/18. Transaction values include only reported up-front cash payments and do not account for any potential future performance -based compensation unless noted. Page 6
Quarterly M&A and Investment Activity by Segment Most Active Digital Media/Commerce s Value ecommerce 182 16,091 216 22,135 726 70,007 19% 38% Digital Marketplace 67 1,355 63 2,979 228 8,919 (6%) 120% Mobile Content/Apps 48 603 48 1,529 219 4,462 0% 154% Niche Content 42 417 48 1,633 155 3,319 14% 292% Gaming 31 835 31 1,042 129 4,558 0% 25% Social Media/Apps 23 181 18 803 96 5,263 (22%) 344% Other 1 41 3 65 5 106 200% 60% Total 394 19,521 427 30,186 1,558 96,634 8% 55% Most Active Digital Advertising s Vertical Search 19 3,879 18 279 71 4,477 (5%) (93%) Ad Networks/Exchanges 2 8 11 73 26 196 450% 837% Comparison Shopping 8 229 9 402 32 751 13% 76% Mobile Marketing 5 28 9 811 23 2,848 80% 2,849% Digital Promotion/Coupon 7 661 8 129 22 814 14% (81%) Online Lead Generation 6 51 8 43 25 672 33% (14%) Local Search 8 11 7 41 35 122 (13%) 272% Affiliate/CPA Network 6 72 5 50 18 156 (17%) (30%) Search Marketing 0 0 5 122 11 130 NM NM Digital Video 9 63 2 100 22 922 (78%) 60% Total 70 4,999 82 2,050 288 11,160 17% (59%) Most Active Marketing Technology s Analytics & Targeting 36 3,222 41 6,358 150 10,704 14% 97% CRM 21 417 26 248 87 1,152 24% (41%) Search & Discovery 20 1,018 20 160 74 2,063 0% (84%) MRM/Workflow Management 20 149 17 414 63 978 (15%) 177% Social Technology 20 80 17 41 60 1,106 (15%) (49%) Commerce Management 23 1,957 14 351 71 4,517 (39%) (82%) Product/Price Software 9 73 14 271 43 576 56% 274% Content Management 11 148 13 1,142 64 2,102 18% 673% Email/Messaging Software 18 269 13 20 53 546 (28%) (92%) Other 97 3,531 85 2,107 336 10,311 (12%) (40%) Total 275 10,863 260 11,111 1,001 34,056 (5%) 2% Page 7
Most Active Agency & Marketing Services s Digital Agency 43 84 47 466 162 943 9% 454% Specialty Agency 6 6 15 235 29 326 150% 3,634% Loyalty/Retention 14 336 13 1,169 39 7,847 (7%) 248% Public Relations 9 95 12 12 48 107 33% (87%) Healthcare Agency 4 0 8 191 17 301 100% NM Marketing Consulting 6 0 7 0 17 28 17% NM Ad Specialty/Premiums 2 0 6 180 16 180 200% NM Experiential Marketing 5 136 6 105 20 241 20% (23%) Retail Services 1 10 5 0 9 103 400% (100%) B-to-B Agency 3 0 3 8 8 8 0% NM General Agency 3 15 3 0 19 1,409 0% (100%) Social Agency 3 0 3 7 12 7 0% NM Other 14 163 10 4,312 46 5,214 (29%) 2,545% Total 113 846 138 6,684 442 16,713 22% 690% Most Active Traditional Media s Entertainment Media 25 425 34 1,651 121 5,064 36% 288% B-to-B Media 20 705 15 40 56 6,089 (25%) (94%) Traditional Outdoor 5 442 9 543 22 1,264 80% 23% Consumer Magazine Publishing 6 19 6 431 28 3,608 0% 2,123% Radio 2 485 5 158 8 660 150% (67%) Digital Place-Based Media 2 393 4 53 11 596 100% (87%) Newspaper Publishing 9 50 4 1,864 27 2,599 (56%) 3,628% Broadcast Television 7 3,709 3 1,150 20 8,541 (57%) (69%) Consumer Book Publishing 5 8 3 17 9 25 (40%) 105% Total 81 6,238 83 5,907 302 28,446 2% (5%) About Petsky Prunier LLC Petsky Prunier is one of the leading investment banks to the technology, media, marketing, information, 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 in China and India. Securities transactions are processed through Petsky Prunier Securities LLC, a member of FINRA, and an affiliated entity. Page 8
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