1H16 Summary of M&A and Investment Activity in the : 1,509 Totaling a $74.4 Billion Digital Media/Commerce was the Most Active Segment with 614, Followed by Marketing Technology with 474 ; Digital Media/Commerce was the Highest Value Segment with $37.7 Billion in Deal Value June 30, 2016 New York, NY During 1H16, Petsky Prunier tracked 1,509 M&A and investment transactions for a total of $74.4 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 614 and 474 transactions, respectively, while Digital Media/Commerce was the highest reported value segment totaling $37.7 billion. 2Q15 2Q16 M&A and Investment Activity $ in Billions 1H16 M&A and Investment Activity $ in Millions DOLLAR VALUE $124.5 Bright House /Charter Digital Media/ Commerce $37,657 Traditional Media $14,689 Time Warner /Charter $80.4 LinkedIn/ Microsoft $36.0 $33.4 $30.4 Supercell/ Tencent DEAL VOLUME 879 759 735 762 747 2Q15 3Q15 4Q15 1Q16 2Q16 Digital Advertising $3,934 Marketing Technology $16,433 Agency & Marketing Services $1,708 * valued at $6 billion or more have been excluded from totals to limit comparative distortions. The aggregate total for 2Q15 excludes Charter Communications $78.8 billion acquisition of Time Warner and $10.4 billion acquisition of Bright House Networks. The aggregate total for 2Q16 does not include Microsoft s pending $26.2 billion acquisition of LinkedIn and Tencent s $8.6 billion acquisition of Supercell. Page 1
M&A Activity 702 759 769 880 759 Acquisitions accounted for 42 percent of total transactions and 51 percent of reported value in 1H16. Excluding Microsoft s pending $26.2 billion acquisition of LinkedIn and Tencent s $8.6 billion acquisition of Supercell, Digital Media/Commerce was the most active M&A segment with 181 transactions, of which 42 were reported for $8.8 billion in value. The most active subsegment was ecommerce with 67 acquisitions. in the segment announced during 1H16 included: The $556 million take private of B to B company E Commerce China Dangdang by imiegu Capital Management Verizon and Hearst s acquisition of online publisher Complex Media in a transaction reportedly valued between $250 million and $300 million The acquisition of home rental platform Onefinestay by Accor for $168 million B. Riley Financial s acquisition of consumer products and services provider United Online in a transaction valued at $170 million Marketing Technology was the second most active M&A segment with 162 transactions, of which 28 were reported for $12.1 million in value. Compared with the first half of 2015, reported acquisition value within the segment was up 88 percent. Analytics & Targeting was the most active subsegment throughout 1H16 with 28 acquisitions, a 27 percent increase in volume from the second half of last year. in the segment announced during 1H16 included: Salesforce s pending acquisition of ecommerce solutions company Demandware for approximately $2.8 billion Vista Equity Partners pending take private transactions for marketing automation software company Marketo and event management platform Cvent for approximately $1.8 billion and $1.5 billion, respectively The $940 million purchase of contact center optimization tools developer incontact by NICE Systems Transaction value in the Traditional Media segment was up 59 percent from 2H15 with 71 transactions, of which 24 were reported for more than $14 billion in aggregate value. in the segment announced during 1H16 included: NBC Universal s pending acquisition of DreamWorks Animation in a transaction valued at approximately $3.8 billion Dalian Wanda Group s $3.5 billion acquisition of film production company Legendary Entertainment Sinclair Broadcast Group s acquisition of The Tennis Channel for $350 million The $275 million acquisition of C suite executive peer to peer networking events operator Evanta by CEB from Leeds Equity Partners There were 70 M&A transactions in the Digital Advertising segment in the first half of 2016, of which 16 reported $2 billion in value. The Online Lead Generation and Digital Video subsegments, together, accounted Page 2
for more than one third of the segment s total M&A activity with 13 and 11 transactions, respectively. in the segment announced during 1H16 included: Gannett s acquisition of small and midsized business search marketing solutions provider ReachLocal in a transaction valued at $156 million The acquisition of mobile ad exchange Smaato by China based Spearhead Integrated Marketing Communications for a reported $148 million Comcast s acquisition of video supply side platform StickyADS.tv in a transaction valued at $100 million The $33 million purchase of secondary gift card search platform GiftcardZen by RetailMeNot Investment Activity There were 876 investments during 1H16, of which 828 reported $36.3 billion in value. value for venture and growth capital investments was up 29 percent from the second half of 2015, while activity remained flat. Eighty five percent of investments were made in the Digital Media/Commerce and Marketing Technology segments with 433 and 312 deals announced, respectively. Digital Media/Commerce was the highest value segment during the half with 412 deals reporting $28.9 billion in value. Investments in the segment during 1H16 included: The $3.5 billion raised by Uber from PIF, Saudi Arabia s main investment fund, at a reported valuation of $62.5 billion, unchanged from its last round Snapchat s $1.8 billion round of funding at a reported valuation of $20 billion from General Atlantic, Sequoia Capital, T. Rowe Price, Lone Pine Capital, Coatue Management, and Fidelity Investments The $70 million round of funding raised by audio platform SoundCloud from Twitter at a reported valuation of $700 million The minority stake taken by Verizon in YouTube channel and programming company AwesomenessTV at a reported valuation of more than $650 million Marketing Technology was the second most active investment segment with 312 transactions, of which 292 reported $4.4 billion in value. Analytics & Targeting and Content Management investments accounted for more than one third of the segment s activity with 74 and 33 investments, respectively. Investments in the segment during 1H16 included: The $50 million raised by content creation and sales enablement platform Showpad from Insight Venture Partners, Dawn Capital, and Hummingbird Ventures The Index Ventures led $50 million round of funding in customer communication and eservices platform Intercom Syniverse s $45 million investment in SaaS based mobile marketing platform Vibes Investments in the Digital Advertising segment accounted for 12 percent of all investments during the quarter with 104 transactions announced, of which 103 reported $1.9 billion in value. The most active subsegments were Vertical Search and Digital Video with 32 and 22 investments, respectively. Vertical Search was the highest Page 3
value subsegment with $586 million in reported investment value. Investments from the segment during 1H16 included: Comcast backed Atairos Management s $250 million investment in Groupon Travel search site Skyscanner s $192 million round of funding at a reported valuation of $1.6 billion from Baillie Gifford, Vitruvian Partners, and Yahoo Japan Digital circulars platform Flipp s $61 million round of funding from General Atlantic Buyer & Investor Activity With the exception of Microsoft s $26.2 billion acquisition of LinkedIn and Tencent s $8.6 billion acquisition of Supercell, strategic buyers accounted for 95 percent of all control transactions in 1H16. Of the 599 strategic deals announced, 116 were reported for $30.2 billion in value. Nearly 80 percent of strategic activity was in the Digital Media/Commerce, Marketing Technology, and Agency & Marketing Services segments. The most active strategic acquirers were advertising holding companies Dentsu and WPP with 17 and 14 transactions, respectively. Buyout firms completed 34 acquisitions in 1H16, of which 14 were reported for $7.9 million in value. One third of buyout transactions were in the Marketing Technology segment with 12 deals, of which five reported $6.4 billion in value. Buyout transactions announced in 1H16 included: EQT Holdings majority stake in content management and customer experience management software developer Sitecore at a reported valuation of $1 billion The majority stake taken in branding and creative services agency 160over90 by Searchlight Capital Partners in a transaction valued at $175 million Norwest Venture Partners sale of Clarus Commerce, a leader in ecommerce, subscription commerce, and loyalty marketing solutions, to Trivergence, Falcon Investment Advisors, and Landon Capital Partners (a Petsky Prunier led transaction) Page 4
1H16 Most Active Strategic Buyers by Buyer Representative Targets Venture and growth capital investors accounted for 876 transactions, of which 828 were reported for $36.3 billion in value. Compared to 2H15, investment value was up 29 percent while activity remained flat. Sequoia Capital was the most active investor during 1H16 with 23 investments completed, followed by Accel Partners with 18 investments announced. Page 5
1H16 Most Active Investors by Investor Representative Investments IPO Activity No IPOs were completed and no new filings were submitted in the Marketing, Media, and Technology segments in the first half of 2016. Page 6
2Q16 M&A and Investment Activity In 2Q16, Petsky Prunier tracked 747 M&A and investment transactions, of which 486 were reported for a total $44 billion in aggregate value. Digital Media/Commerce was the most active and highest value segment in 2Q16, accounting for nearly half of all aggregate reported deal value. Excluding Microsoft s pending purchase of LinkedIn, the largest M&A transaction of the quarter was Salesforce s pending $2.8 billion acquisition of Demandware. The largest fundraise in 2Q16 was Uber s $3.5 billion round from Saudi Arabia s PIF investment fund at a reported valuation of more than $62.5 billion. 2Q16 M&A and Investment Activity $ in Millions Digital Media/ Commerce $21,704 Digital Advertising $1,951 Marketing Technology $13,858 Traditional Media $5,988 Agency & Marketing Services $494 *All values as of 12pm ET on 6/29/16. Transaction values include only reported up front cash payments and do not account for any potential future performance based compensation unless noted. Page 7
Quarterly M&A and Investment Activity by Segment Most Active Digital Media/Commerce s Value ecommerce 130 12,795 137 10,909 514 43,077 5% (15%) Mobile Content/Apps 67 1,579 71 7,214 225 11,667 6% 357% Niche Content 24 330 39 724 117 2,400 63% 119% Social Media/Apps 30 429 33 2,175 122 4,723 10% 407% Gaming 23 85 23 434 107 7,347 0% 413% Classifieds/Auctions/P-to-P 21 707 11 164 108 7,589 (48%) (77%) Web Search/Portals 1 20 3 83 7 857 200% 315% Other 1 9 0 0 2 96 (100%) (100%) Total 297 15,953 317 21,704 1,202 77,756 7% 36% Most Active Digital Advertising s Vertical Search 22 503 18 83 79 1,079 (18%) (83%) Digital Video 17 277 16 329 71 5,611 (6%) 19% Local Search 12 423 13 302 46 1,011 8% (29%) Mobile Marketing 8 114 10 205 41 742 25% 79% Online Lead Generation 8 33 9 562 40 926 13% 1,603% Ad Networks/Exchanges 7 440 6 82 33 1,045 (14%) (81%) Digital Promotion/Coupon 4 120 6 353 29 632 50% 194% Affiliate/CPA Network 0 0 2 17 5 45 NM NM Email Services 2 0 1 2 9 79 (50%) NM Game Advertising 2 0 1 1 4 5 (50%) NM Other 9 74 1 16 27 646 (89%) (79%) Total 91 1,983 83 1,951 384 11,819 (9%) (2%) Most Active Marketing Technology s Analytics & Targeting 56 782 46 509 191 2,995 (18%) (35%) Content Management 20 302 28 1,109 103 2,463 40% 267% Commerce Management 16 95 26 3,060 78 4,347 63% 3,111% CRM 22 91 15 1,631 80 2,483 (32%) 1,686% Email/Messaging Software 7 22 14 91 41 1,235 100% 317% Social Technology 21 131 13 91 73 471 (38%) (30%) SFA/Lead Management 4 16 12 1,796 39 2,454 200% 11,267% BI Tools 23 454 11 2,652 53 4,278 (52%) 484% MRM/Workflow Management 16 133 11 87 47 418 (31%) (35%) Other 58 548 55 2,832 236 6,156 (5%) 417% Total 243 2,575 231 13,858 941 27,299 (5%) 438% Page 8
Most Active Agency & Marketing Services s Digital Agency 36 371 32 72 132 599 (11%) (81%) Public Relations 11 15 10 110 42 141 (9%) 633% Specialty Agency 5 335 5 110 12 445 0% (67%) Loyalty/Retention 5 222 4 13 14 281 (20%) (94%) Branded Communications 1 0 3 0 6 0 200% NM Healthcare Agency 5 0 3 190 18 210 (40%) NM Social Agency 2 0 3 0 6 0 50% NM Ad Specialty/Premiums 4 27 2 0 6 27 (50%) (100%) Experiential Marketing 3 0 2 0 13 0 (33%) NM Design Agency 4 4 1 0 10 389 (75%) (100%) Other 15 240 4 0 50 1,353 (73%) (100%) Total 91 1,213 69 494 309 3,445 (24%) (59%) Traditional Media Entertainment Media 12 5,480 17 4,411 48 10,853 42% (20%) B-to-B Media 5 6 11 476 32 556 120% 7,836% Consumer Magazine Publishing 3 0 8 39 20 818 167% NM Broadcast Television 8 2,668 6 1,000 20 4,896 (25%) (63%) Digital Place-Based Media 1 2 2 4 7 5 100% 133% Radio 0 0 2 58 8 494 NM NM Consumer Book Publishing 3 0 1 0 9 27 (67%) NM Other 8 546 0 0 23 5,900 (100%) (100%) Total 40 8,701 47 5,988 167 23,548 18% (31%) About Petsky Prunier LLC Petsky Prunier www.petskyprunier.com 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 Danielle Lindsay at 212.842.6029 or dlindsay@petskyprunier.com. Page 9