Cisco Acquires AppDynamics for $3.9 Billion

Cisco acquired “unicorn” AppDynamics just prior to their IPO on Tuesday, January 24th. AppDynamics’ best-of-breed cloud application intelligence platform complements Cisco’s network performance management suite to provide customers with enhanced visibility and optimization of their entire IT infrastructure stack.

Cisco’s offer ($3.9 billion Enterprise Value, 18.9x TTM revenue) is nearly 130% higher than AppDynamics’ projected $1.7 billion IPO valuation and nearly 400% higher than the median 5.0x TTM revenue multiple for all publicly traded SaaS companies in 4Q16.

Brief Transaction Details:

Enterprise Value (mm) $3,902.9
TTM Seller Revenue (mm) $206.2
TTM Seller EBITDA (mm) -$105.3
TTM Revenue Multiple 18.9x
TTM EBITDA Multiple
Seller Business Description

AppDynamics, Inc. provides an integrated suite of software application and IT infrastructure monitoring and analytics products.

Buyer Business Description

Cisco is a leading provider of IT infrastructure software and hardware.

For more information, visit CiscoTechCrunch or Bloomberg.

Software M&A Volume Hits All-Time High in 2016

2016 was a record year for software industry M&A activity since we began publishing our reports 15 years ago. In fact, each of the past three years marked new highs in terms of aggregate deal activity and reached 2,280 M&A deals in 2016. We expect 2017 M&A activity will remain strong as strategic buyers and private equity firms continue to aggressively compete for deals.

View 4Q16 Software Industry Financial Report

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Software Equity Group’s Client, Verdazo, Acquired by Pason

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Software Equity Group (SEG) is delighted to announce the sale of our client, Verdazo Analytics, Inc., a leading software provider of analytics solutions to the oil & gas sector, to Pason Systems, Inc. (TSX:PSI). SEG acted as the exclusive M&A advisor to Verdazo Analytics. For additional information about the transaction, please see the press release.

SOFTWARE EQUITY GROUP ANNOUNCED AS FINALIST FOR ADVISOR OF THE YEAR AWARDS

SAN DIEGO (October 21, 2015) — Software Equity Group is pleased to announce it has been selected as a finalist for the inaugural Advisor of the Year award. This award acknowledges local middle market mergers and acquisitions professionals who have significantly contributed to the successful sale, expansion or recapitalization of their clients’ companies. Winners will be invited as featured speakers at subsequent events, including the November Association for Corporate Growth conference “The Art of the Deal.”

The awards program will be held at the world-renowned La Jolla Institute for Allergy and Immunology on Thursday, October 22 starting at 4:00 p.m. with the Women-Grown Businesses panel discussion followed by the Advisor of the Year program at 5:30 p.m. Net proceeds from the event will go to the Institute.

“We look forward to formally recognizing these finalists,” says Paul Thiel, managing director for title sponsor BNY Mellon Wealth Management. “They are instrumental in the success of the M&A community in San Diego and, until now, have largely gone unnoticed.”

Judges assessed finalists on their professional contribution in the sale, expansion or recapitalization of their clients’ companies. Led by Broadcom chairman John Major, judges included representatives of the Rady School and the La Jolla Institute, as well as several successfully exited entrepreneurs who have been through the M&A process.

Awards categories include best sell-side legal representation in sale to a public company; best sell-side legal representation in a sale to a private company; best long-term strategic planning for exit; best financial and tax strategy and structuring of a deal; best buy-side legal representation; best recapitalization design and execution by a team of advisors; best expansion capital design and execution by a tam of advisors; best sell-side marketing by an investment banker or broker; best sell-side CPA representation of support; and best deal facilitator.

The Advisor of the Year program is the result of a partnership between the San Diego offices of BNY Mellon Wealth Management, Sheppard Mullin Richter & Hampton, Objective Capital Partners and marketing technology firm Departure, in cooperation with the Rady School of Management at the University of California San Diego and the Association for Corporate Growth, San Diego.

“This consortium is a vehicle not only for recognition,” says Bob Copeland, partner at Sheppard Mullin, the presenting sponsor, “It is also an educational organization that will organize ongoing M&A seminars and conferences, filling an important niche in San Diego.”

“We see the Advisor of the Year program as a great platform for helping owners of middle-market businesses become educated about the options they have when it comes to exiting, planning for succession or entering a new stage of growth,” says Trever Acers of program partner Objective Capital. “We are thrilled to be able to play a role this inaugural year.”

For more information, please visit sdadvisoroftheyear.com or email info@sdadvisoroftheyear.com.

SEG Publishes Q2 2015 Software Industry Financial Report

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Software Equity Group’s complimentary 2Q15 Software Industry Financial Report is available for download. Our 2Q15 Report provides the facts, data and insight you need to keep your finger on the software industry’s pulse.  We’ve assessed how public software, Internet and SaaS companies performed in Q2; how they’ve performed amid the current macro environment and technological disruptions driven by mobile and cloud computing and how their stock prices and market valuations have responded.  Our 2Q15 Report also measures M&A deal volume and exit valuations overall and by software product category.  Our goal is to provide timely information and insight about the financial health, market performance, and acquisition activity of the software industry’s key players and product sectors.

Software Equity Group’s Quarterly and Monthly Reports are widely recognized as the best way to keep your finger on the financial pulse of the software industry.  As testament, our reports are now read and relied upon by more than 70K+ software industry executives, entrepreneurs, venture capitalists, private equity investors and professional advisors in 70+ countries around the globe. Shouldn’t you know what they know?

To obtain your complimentary copy, please click here.

Today’s Public Software Valuation and Financial Performance: The SEG Software Index – Engineering & PLM Product Category

SEG’s Monthly Flash Reports track the financial performance and valuations of approximately 300 software companies, categorized in nearly 30 product categories across the on-premise software, SaaS and Internet sectors.  This post highlights the performance of the SEG Software Index – Engineering & PLM product category as shown in the SEG July Monthly Flash Report.  To view the performance of dozens of other product categories, download the latest complimentary Monthly Flash Report here: http://www.softwareequity.com/research_flash_reports.aspx

In the month of June, the Engineering & PLM product category achieved a median EV/Revenue multiple of 3.7x, TTM Revenue Growth of 8.7%, and EBITDA Margin of 21.4%.  Notable companies outperforming their respective category include:

  • Aspen Technology with a 8.6x EV/Revenue multiple
  • Stratasys with a 43.4% revenue growth
  • ANSYS with a 46.0% EBITDA margin

Monthly Report:  SEG Software Index – Engineering & PLM, Engineering & PLM, Public, Valuations, Financial Performance, ANSYS, Aspen Technology, Autodesk, Cadence Design Systems, Dassault Systemes, GSE Systems, Mentor Graphics, Parametric Technology, PDF Solutions, Stratasys, Synopsys