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  • 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 21 18

    20 22

    18 20

    24

    17 19

    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

    23 transactions

    in Q2/18

    6.7x EV/ 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

    3,9x 4,7x 4,9x 4,9x

    6,9x 5,8x 6,1x

    6,7x

    800

    1000

    1200

    1400

    1600

    Jun. 18

    * Median based on revised selection of international software companies (appendix 1)

  • NORDIC SOFTWARE TRANSACTIONS OVERVIEW 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

    Finland Sweden Nordics

    US / Canada

    Rest of Europe

    Rest of World

    3

    713

    18

    1

    4 0

    5

    8

    6

    4

  • NORDIC SOFTWARE TRANSACTIONS QUARTER-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

    17 19

    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

    6,0x 5,5x

    3,2x 3,4x

    2,8x

    3,9x 3,6x

    2,7x 3,1x

    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

    12,5x 13,2x

    10,4x

    12,3x

    9,9x 8,9x

    7,5x 8,2x

    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 I

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