Software M&A Update

Q2 2017 July 10, 2017

Software, SaaS and Cloud M&A Advisory + Investment Banking

Table of Contents

• M&A Market Brief – Page 3-6

• Notable Software M&A Transactions in Q1 – Page 7-9

• Publicly Traded Software Firms (Valuation Table) – Page 10-12

• M&A Spotlight: Lexmark / Thoma Bravo – Page 13

• M&A Spotlight: Omers / Inmar – Page 14

• M&A Spotlight: Aurea / Jive – Page 15

• M&A Spotlight: Cisco / Viptela – Page 16

DISCLAIMER

The information contained herein is of a general nature and is not intended to address the circumstances of any particular company,

individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such

information is accurate as of the date it is received or that it will continue to be accurate in the future. We perform our own research

and also use third party research. No one should act on such information without appropriate professional advice after a thorough

examination of the particular situation. This is not an offer or recommendation to buy or sell securities nor is it a recommendation

to merge, acquire, sell or exit a specific company or entity. We do not hold any equity or debt position in any of the securities listed

herein as of the date of this report.

Sources for our research and data include: Dealogic, ValueWalk, Pwc, Company Websites, SEC Filings, MergerMarket, Berkery Noyes, Deloitte, Fortune, 451 Research, Law360, medium.com, Vista Point, CNBC

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M&A Market Brief Global, U.S. and Software M&A Activity Q2 2017

Worldwide

Global M&A activity in Q2 2017was USD $793.9 billion - dealvalue increased by 6.36%compared to Q1 2017.

The first six months of 2017proved the middle market’s mostproductive first half in 10 years,inking 5,620 deals, according toThompson Reuters.

Global M&A activity has beenmotivated by limited organicgrowth options and the need toaddress the business modeltransformation that is occurringacross industries. Example,Amazon's acquisition of WholeFoods Market.

Technological disruption is animportant deal motivator.Companies involved in M&A aremost interested in acquiringrelevant technologies andresponding to transformation intheir industry as well as a desire toexpand on their products.Established businesses aremodernizing through technologyfocused deals, making traditionalindustry boundaries blurry andunconventional.

High liquidity, access to cheapfinancing, healthy balance sheetsand a need to demonstrate growthto shareholders via M&A allprovide a positive outlook for theremainder of 2017.

United States

Sluggish international growth andglobal uncertainty has made theUnited States a favoreddestination for M&A activity.Western Europe is the nextpreferred destination for M&Adeals.

Large amount of available capital,increased corporate acquisitionactivity and buying power,improved financing markets andexpected policy reforms from thenew administration position 2017 tobe a strong year for M&A activity.

The current administration isexpected to roll back the Dodd-Frank Act and other regulationsthat have arguably stifled M&Aactivity in financial services.Furthermore, these regulatorychanges can also pump in newsources of debt financing for M&A.

Tax reform is expected to be apriority item for 2017. Lowercorporate taxes will enablecompanies to invest more in M&A.A possible tax holiday allowingforeign cash to be repatriated at alower tax rate will also likelybolster M&A activity in the U.S. Thisis, of course, if Congress passessuch legislation.

Software

Software dominated overalltechnology deal value andvolumes during 1st half 2017.Transaction volume in 1st Half2017 increased 12 percent versus2nd Half 2016, from 985 to 1,099.

Infrastructure Softwarecontributes to the largest rise involumn in 1st Half 2017 versus2nd Half 2016 with a 21 percentgain, from 132 to 160 transactions.

The median revenue multiplemoved slightly from 2.5x in 2ndHalf 2016 to 2.3x in 1st Half 2017.

The median EBITDA multipleremained constant during thistimeframe at 13.3x.

Transactions in 1st Half 2017 withenterprise values above $160million received a medianrevenue multiple of 3.9x, whereasthose in the $10 - $20 millionrange had a median revenuemultiple of 2.2x.

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Fig 1. Global M&A Deal Value — Quarterly Comparison

Source: MergerMarket 2017

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Fig 2. Tech Deal Overview

Fig 3. Software M&A Deals – Comparison By Half Year, 2017

Source: Berkery Noyes

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Outlook for the Rest of 2017 The impact of 2016 electoral and referendum outcomes, in addition to a number of key global elections and administration changes slated for 2017, are likely to contribute to regulatory uncertainty. No one really knows what's coming but bulking up bolsters survival chances. With ongoing modest GDP growth, including a reduction in the GDPPP growth rate expected, companies will look externally for opportunities to complement organic growth, benefiting from their experience navigating 2016’s uncertain market conditions. The software industry, which has been one of the most active sectors, should also continue seeing high M&A rates, with continued investment from non-technology buyers, renewed interest from foreign investors and a potential M&A spree from technology giants if cash repatriation via tax reform comes to fruition.

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Table 1. Notable Software M&A Transactions, Q2 2017

Announcement Date Target Acquirer Target Description Deal

Size EV/

Revenue EV/

EBITDA

06/21/17 Mettle's SkyBox Adobe

Developer of virtual reality software products. The company's virtual reality software products offer plug-ins for 360-degree video.

06/12/17 Jive Software Inc. Aurea

Jive Software provides communication and collaboration solutions to businesses, government agencies, and other enterprises.

$462M 2.27x 96.37x

06/08/17 Hexadite Microsoft

Hexadite Ltd. develops a security orchestration and automation solution to investigate and resolve cyber incidents.

$100M

05/26/17 iSystem

Intermediate & Compass HRM

Asure Software

Provider of human resource management software. The company's software tools are used by various organizations for payroll processing, and workforce management.

$61M

05/03/17 Lexmark's

Enterprise Software Business

Thoma Bravo

Developer of business process management and automation software intended to transform and simplify the business critical First Mile of real time, information intensive customer interactions.

$1.5B

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Announcement Date Target Acquirer Target Description Deal

Size EV/

Revenue EV/

EBITDA

05/02/17 Deco Software Airbnb

Deco Software Inc. provides IDE for building react native applications. It also offers react native course.

05/01/17 Viptela Cisco

Viptela, Inc. provides software-defined wide area network (SD-WAN) applications that allows global companies to build carrier agnostic, policy-controlled, and cost-effective WANs.

$610M 6.1x

04/28/17 Guavus, Inc. Thales

Guavus, Inc. designs and develops decision making software solutions. The Company offers solutions for customer segmentation, cost rationalization, and forecasting.

$215M

04/26/17 MSC Software Hexagon AB

Provider of computer aided engineering software. The company's software includes linear and nonlinear finite element analysis (FEA), control systems and many other applications.

$834M 3.63x

04/24/17 RightAnswers Upland Software Inc.

RightAnswers, Inc. provides knowledge management solutions for businesses worldwide.

$17.2M

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Announcement Date Target Acquirer Target Description Deal

Size EV/

Revenue EV/

EBITDA

04/20/17 Cloudyn Software Ltd. Microsoft

Cloudyn Software Ltd. develops and delivers applications and technologies for optimizing the way companies use cloud computing resources.

$60M

04/18/17 TopTix SeatGeek

Developer of a ticketing platform. The company's ticketing platform offers software for automated ticket booking, CRM, marketing, fundraising, reporting and API integrations.

$56M

04/18/17 Intentional Software Microsoft

Intentional Software Corporation operates as a provider of software solutions and technology.

04/17/17 Wercker Oracle

Wercker B.V. develops and operates a cloud based platform which helps developers automate the development of applications.

04/12/17 Deis, Inc. Microsoft

Deis, Inc. builds open source software that helps developers and operators build, deploy, manage, and scale their applications on top of Kubernetes.

04/09/17 Trade Extensions Coupa Software

Developer of strategic sourcing software designed to run projects ranging from routine sourcing to advanced projects involving goods and services.

$45M 4.5x

04/04/17 Inmar Omers Private Equity

Inmar, Inc., a technology company, owns and operates intelligent commerce networks

$1.5B 3.75x

04/03/17 Veracode CA Technologies

Provider of cloud-based application security solutions and services designed for the entire software development lifecycle.

$614M

Source: PitchBook

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Publicly Traded Software Firms, Valuation Table

Enterprise Software Stock Price (as of 6/31)

Market Cap ($USD mm)

Enterprise Value (EV) / Revenue EV/EBITDA

Microsoft Corporation [MSFT] $68.92 $526,307 5.5 15.2

Oracle Corporation [ORCL] $50.14 $203,100 4.9 11.6

Pegasystems Inc. [PEGA] $58.35 $4,524 4.3 42.5

Red Hat, Inc. [RHT] $95.76 $16,830 6.0 33.6

SAP SE [SAP] $104.67 $118,490 4.5 15.9

SS&C [SSNC] $38.41 $7,930 6.2 17.3

Average (Mean) 5.2 22.7

Banking and Financial Software Stock Price (as of 6/31)

Market Cap ($USD mm) EV / Revenue EV/EBITDA

CA Technologies Inc. [CA] $ 34.47 $ 14,390 3.3 9.1

CoreLogic, Inc. [CLGX] $ 43.37 $ 3,690 2.6 13.5

NCR Corp. [NCR] $ 40.84 $ 4,960 1.4 10.2

DST Systems Inc. [DST] $ 61.69 $ 3,800 2.8 7.4

Fidelity National Information [FIS] $ 85.39 $ 28,370 3.8 13.6

Fiserv, Inc. [FISV] $ 122.34 $ 25,970 5.4 15.8

Genpact Limited [G] $ 27.83 $ 5,360 2.3 13.6

Jack Henry & Associates [JKHY] $ 103.92 $ 8,040 5.2 14.0

Average (Mean) 3.4

12.2

Note: Average EV/EBITDA’s are calculated excluding the companies with negative EV/EBITDA

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Security Software Stock Price (as of 6/31)

Market Cap ($USD mm) EV/Revenue EV/EBITDA

CA Technologies Inc. [CA] $34.47 $14,390 3.3 9.1

Check Point Software [CHKP] $109.05 $17,670 9.1 18.4

FireEye Inc. [FEYE] $15.21 $2,067 2.7 N/A

Fortinet, Inc. [FTNT] $37.43 $6,530 4.2 53.8

Imperva, Inc. [IMPV] $47.80 $1,560 3.7 N/A

Progress Software Corporation [PRGS] $30.88 $1,492 3.1 480.4

Red Hat, Inc. [RHT] $95.76 $16,830 6.0 33.6

Symantec Corp. [SYMC] $24.85 $15,230 5.7 48.1

Average (Mean) 4.7 32.6

Software - NEC Stock Price (as of 6/31)

Market Cap ($USD mm) EV/Revenue EV/EBITDA

BroadSoft, Inc. [BSFT] $43.05 $1,310 3.3 32.2

CA Technologies Inc. [CA] $34.47 $14,390 3.3 9.1

CommVault Systems, Inc. [CVLT] $56.45 $2,490 2.9 179.8

PTC Inc. [PTC] $55.10 $6,230 5.7 86.4

Splunk Inc. [SPLK] $56.89 $7,800 7.6 N/A

Average (Mean) 4.6 20.7

CRM Stock Price (as of 6/31)

Market Cap ($USD mm) EV/Revenue EV/EBITDA

Microsoft Corporation [MSFT] $68.92 $526,307 5.5 15.2

Oracle Corporation [ORCL] $50.14 $203,100 4.9 11.6

Salesforce.com, Inc. [CRM] $86.57 $61,250 6.7 80.1

SAP SE [SAP] $104.67 $118,490 4.5 15.9

Average (Mean) 5.4 30.7

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Business Intelligence & Analytics Stock Price (as of 6/31)

Market Cap ($USD mm) EV/Revenue EV/EBITDA

Teradata Corporation [TDC] $29.48 $3,820 2.4 6.0

MicroStrategy Inc. [MSTR] $191.67 $2,120 3.0 12.5

Average (Mean) 2.7 9.3

Source: PitchBook

HR/HCM Software Stock Price (as of 6/31)

Market Cap ($USD mm) EV/Revenue EV/EBITDA

Cornerstone OnDemand [CSOD] $35.76 $1,970 4.9 N/A

Workday Inc. [WDAY] $96.99 $20,080 9.4 N/A

Average (Mean) 7.2 N/A

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M&A Spotlight

Lexmark’s Enterprise Software Business Acquired by Thoma Bravo for $1.5 Billion

May 3, 2017 – Thoma Bravo, a leading private equity firm, today announced it has entered into a definitive

agreement with Lexmark International Inc., a global imaging leader, to acquire Lexmark’s Enterprise

Software business, which is made up of three primary businesses: Kofax, ReadSoft and Perceptive

Software. The closing of the transaction is subject to usual and customary closing conditions and regulatory

approvals, and is expected to occur in the third quarter of 2017. Apex Technology Co Ltd, PAG Asia Capital

and Legend Capital Management Co, LTD, who acquired Lexmark in November of 2016, support the sale

of the Enterprise Software business.

Upon closing of the transaction, the Perceptive Software business, including Perceptive Intelligent Capture,

Acuo VNA, PACSGEAR and Enterprise Medical Image Viewing will be sold to Hyland Software, Inc., an

existing Thoma Bravo portfolio company and leading provider of enterprise content management software

led by President and CEO Bill Priemer. The Kofax and ReadSoft businesses will create a single, newly

independent Thoma Bravo portfolio company under the Kofax brand, and will be led by Reynolds C. Bish,

current President of Lexmark Enterprise Software.

Source: https://thomabravo.com/2017/05/03/thoma-bravo-to-acquire-lexmarks-enterprise-software-business/

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OMERS Private Equity acquired Inmar for $1.5 Billion April 04, 2017 (GLOBE NEWSWIRE) -- OMERS Private Equity ("OPE"), the private equity arm of OMERS, the pension plan for municipal employees in Ontario, together with management, has agreed to acquire Inmar (“Inmar” or the “Company”) from ABRY Partners (“ABRY”). ABRY will continue to be a significant shareholder in the Company.

Founded in 1980 and headquartered in Winston-Salem, North Carolina, Inmar operates intelligent commerce networks, connecting offline and online transactions in real time for the world’s largest retailers, manufacturers and trading partners across multiple industries. Inmar’s customers rely on the Company to securely manage billions of dollars in transactions across its promotions, supply chain, and healthcare platforms. In addition, Inmar’s platforms generate meaningful data and enable the Company to provide clients with actionable analytics and insights to meet the evolving needs of shoppers, patients and businesses.

OPE will support management to continue its impressive track record of profitable growth both organically and through strategic acquisitions.

This transaction is expected to close in the second quarter of 2017.

Source: https://globenewswire.com/news-release/2017/04/04/954083/0/en/OMERS-Private-Equity-acquires-Inmar.html

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Collaboration software company Jive to be acquired by Aurea for $462 million

May 1, 2017 - Jive, a community collaboration software company that was one of the biggest Enterprise 2.0-era success stories, going public in 2011, announced today it had agreed to be acquired by ESW Capital’s Wave Systems for $462 million. It will become part of the Aurea family of companies.

In the end, it appeared to be a kind and healthy exit for Jive shareholders. ESW paid $5.25 a share to purchase the company, representing a 20 percent increase over the average of Jive’s closing stock price for the three months ending on April 28, 2017. It had closed on Friday at $5.05 a share. Needless to say, Jive’s board jumped at the offer and voted unanimously to approve the deal.

The plan is to integrate Jive into Aurea’s customer experience management platform. The acquisition gives Aurea a tool for creating internal and customer-facing communities, a key piece in today’s customer service environment. It also gives them access to Jive’s customer base, which includes T-Mobile, Schneider Electric, McAfee and EMC.

It would appear with this sale we are seeing the official end of the Enterprise 2.0 era, which had its heyday in the 2006-2012 time frame. Jive, along with Yammer, Socialcast, Socialtext and a host of others, came to prominence during this time and brought a lot of promise of changing the way businesses communicate internally and externally.

Source: https://techcrunch.com/2017/05/01/collaboration-software-company-jive-to-be-acquired-by-aurea-for-462-million/

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Cisco Announces Intent to Acquire Viptela for $610 Million

May 1, 2017 – Cisco (NASDAQ: CSCO) announced today its intent to acquire Viptela Inc., a privately held software-defined wide area network (SD-WAN) company based in San Jose. Viptela will expand Cisco's SD-WAN portfolio with increased functionality and simplicity delivered through the cloud.

Viptela provides a compelling SD-WAN solution that simplifies management, increases agility and reduces costs of interconnecting dispersed enterprise networks. Its network management, orchestration and overlay technologies make it easy to deploy and manage SD-WAN. This cloud-first approach also aligns with Cisco’s Digital Network Architecture (DNA) transition to software-driven, automated networks that are more flexible, responsive and dynamic.

With this announcement, Cisco will be able to accelerate the path to developing next generation SD-WAN solutions, by combining Viptela's cloud first network management, orchestration and overlay technologies with industry-leading routing platforms, services, and SD-WAN capabilities from Cisco. Cisco is committed to Viptela's product offering and architecture as well as existing Cisco Intelligent WAN (IWAN) and Meraki SD-WAN solutions. The acquisition of Viptela also supports Cisco's strategic transition toward software-centric solutions that deliver predictable, recurring revenue.

Cisco will acquire Viptela for $610 million in cash and assumed equity awards. The acquisition is expected to close in the second half of calendar 2017, after having completed all of the customary closing conditions and regulatory review.

Source: https://newsroom.cisco.com/press-release-content?type=webcontent&articleId=1841607

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About Solganick & Co.

Solganick & Co., Inc. is an independent investment banking and M&A advisory firm focused exclusively on the global software, IT services and digital media industry sectors. We advise buyers and sellers of companies and efficiently execute M&A transactions that help increase shareholder value. Our professionals have advised on $20+ billion in M&A transactions to date and have current clients and relationships globally with entrepreneurs, companies and leading private equity firms within the sectors we cover.

Please contact us for information regarding this report or to inquire about an M&A transaction.

Solganick & Co., Inc. Los Angeles San Francisco 515 S. Flower St. Ste 50071 Stevenson St, Suite 3600 Los Angeles, CA 90071 San Francisco, CA 94105 +1 (310) 684-3130 www.solganickco.com Aaron Solganick, CEO Alex Khoras, Director of Business Development aaron@solganickco.com akhoras@solganickco.com Rachael Fang, Vice President Amith Guthi, Associate rfang@solganickco.com aguthi@solganickco.com Tapsi Dubey, Associate Lucas Pino, Analyst tdubey@solganickco.com lpino@solganickco.com Victor Liu, Analyst vliu@solganickco.com Follow Us on Twitter: @Solganickco