M&A Report: The European Internet Industry 2014

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M&A Report: The European Internet Industry 2014
M&A Report: The European Internet Industry 2014

Hamburg & Munich, February 2015, © CatCap GmbH
M&A Report: The European Internet Industry 2014
CatCap Corporate Finance                                                                                                      Tenzing Partners (co-author)
                  Mark Miller                                                Michael Moritz                                                        Daniel Schneider
                  Managing Partner                                           Managing Partner                                                      Partner
                  Tel.: +49 (0)40 300 836 - 11                               Tel.: +49 (0)40 300 836 - 13                                          Tel.: +352 263 894 61
                  E-Mail: mark.miller@catcap.de                              E-Mail: michael.moritz@catcap.de                                      E-Mail: dschneider@tenzing-partners.com

                  Mischa Krause                                              Philip Goldhahn
                  Project Manager                                            Analyst
                  Tel.: +49 (0)40 300 836 - 24                               Tel.: +49 (0)40 300 836 - 21
                  E-Mail: mischa.krause@catcap.de                            E-Mail: philip.goldhahn@catcap.de

                  Thorsten Kalter
                  Analyst
                  Tel.: +49 (0)40 300 836 - 23
                  E-Mail: thorsten.kalter@catcap.de

Recent Headline Deals

         acquisition of                               sold to                                  sold to                                                                             sold to

                                                                                                                                                                         part of

                                                                                                               2014                                                                              2014

Copyright: No part of this publication may be reproduced transmitted in any form by any means, electronically, mechanically, by photocopying, recording or otherwise, without the prior permission of
CatCap. Please note that the findings, conclusions and recommendations delivered are based on information gathered in good faith from both primary and secondary sources, believed to be reliable, but
which have not been independently verified. CatCap gives no guarantee, representation or warranty and accepts no responsibility or liability as to the accuracy or completeness of the report. The
opinions contained within the report are based upon publicly available information at the time of publication.
© 2015 CatCap GmbH. All rights reserved.

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M&A Report: The European Internet Industry 2014
Table of Content
 1.   Methodology                                                 4
 2.   Overview                                                    6
 3.   Top European M&A-Deals and Equity Investments               19
 4.   Trends and Selected Transactions Presented by Globalscope   28
 5.   Commerce                                                    33
       i.     E-Commerce/Comparison Shopping/Couponing            37
       ii.    Travel/Rental/Housing                               41
       iii.   Jobs/Dating/Classifieds                             45
 6.   IPO Snapshot 2014                                           49
 7.   Valuation Overview                                          55
 8.   About CatCap Corporate Finance / Globalscope Network        58
M&A Report: The European Internet Industry 2014
M&A REPORT: THE EUROPEAN INTERNET INDUSTRY 2014

                                            Structure and methodology
               CatCap Corporate Finance has analysed the M&A market in the Internet Industry

               Regional scope: target company based in Europe1) and a snapshot of Internet IPOs in 2014

               The report is structured into eight sections with particular focus on:
                       Commerce
                       Snapshot IPOs 2014
               S&P Capital IQ and Majunke are the main sources of this report together with CatCap´s and Globalscope´s
                own market knowledge

               The report is updated annually, based on completed transactions. CatCap publishes similar reports on other
                technology sectors:
 Scope of
  report               M&A Report: The European IT Services Industry 2014

                       M&A Report: The European Software Industry 2014

                       M&A Report: The European Life Sciences and Medtech Industry 2014

            1) Albania, Andorra, Austria, Belarus, Belgium, Bosnia, Bulgaria, Channel Islands, Croatia, Cyprus, Czech Republic, Denmark, Estonia,
               Finland, France, Germany, Gibraltar, Greece, Greenland, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg,
               Macedonia, Malta, Moldova, Monaco, Netherlands, Norway, Poland, Portugal, Romania, Russia, San Marino, Serbia, Slovakia,
               Slovenia, Spain, Sweden, Switzerland, Ukraine, UK

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M&A Report: The European Internet Industry 2014
THE EUROPEAN INTERNET INDUSTRY – METHODOLOGY

                        Classification of the European Internet Industry                                               Description

                            Social                                                                          This report divides the European
                                           Blogging/ User        Content/
                         Networking/                                                                        Internet Industry into five sectors
    Consumer                                 Generated        Aggregator/ Ad           Online Gaming
                       Indexing/ Photo/                                                                     based on their respective business
                                           Content/ Rate         Support
                           Sharing                                                                          models.
                                                                                                            Each sector is further broken down
                                                                Lead Gen/               Interactive         into a number of sub-sectors to
 Online Business                          Agencies/ SEM/
                             B2B                                Customer                 Marketing          provide additional a differentiated
     Service                                   SEO
                                                                Acquisition           Services/ E-Mail
                                                                                                            analysis and give further insights
                                                                                                            into specific areas of interest.
                                                                  Mobile                                    Particular focus is given to M&A
                                               Mobile
                                                                Interactive                                 transactions in Commerce sector
      Mobile           Mobile Content     Applications/Pay                             Mobile Games
                                                                Marketing
                                                ment                                                        and Internet IPOs in Europe.
                                                                  Services
                                                                                                            Due to the large size of the
                                                                                                            Commerce sector, the study
                                                                  Web
Enabling/ Analytics/    Ad Serving &      Web Analytics/                              Content Delivery      analyses the following sub-sectors
                                                               Applications/
    Ad Serving          Technology            CMS                                     Networks/ Video       in-depth:
                                                               Enabling/ IT
                                                                                                                 E-Commerce/Comparison
                                                                                                                  Shopping/Couponing
                                                                                       E-Commerce/
                        Transactions/                                                                            Travel/Rental/Housing
                                          Travel/ Rental/     Jobs/Classifieds/         Comparison
    Commerce              Auctions/
                          Payments
                                             Housing               Dating                Shopping/               Jobs/Classifieds/Dating
                                                                                        Couponing

                                                                              CatCap GmbH | M&A Report: The European Internet Industry 2014| 5
M&A Report: The European Internet Industry 2014
The European Internet Industry – Overview
M&A Report: The European Internet Industry 2014
THE EUROPEAN INTERNET INDUSTRY – OVERVIEW

                                         The Internet Industry’s economic impact

                        Internet Industry in % of GDP                                                                                 Description

   GDP (2010, US$bn)                                    GDP (%) 2010 vs. 2016F                           The Internet is a vast assortment of
                                                                                                          different economic activities
                UK │ 2,417                            8.3%                           +4.1%
                                                                                                         Since its formation, the Internet Industry
                                                                                                          has grown tremendously and now
       South Korea │ 1,129                        7.3%                       +0.7%
                                                                                                          contributes significantly to the worldwide
             China │ 8,358                 5.5%                      +1.4%
                                                                                                          Gross Domestic Product (GDP)
                                                                                                         The size of the Internet Industry varies
             Japan │ 5,960               4.7%                +0.9%                                        widely among countries, even among those
                                                                                                          that are at an equal stage of development
               U.S. │ 16,244             4.7%              +0.7%
                                                                                                         Despite structural differences in various
              India │ 1,875            4.1%               +1.5%                                           regions, the Internet Industry drives a
                                                                                                          significant portion of today’s growth
                EU │ 16,673         3.8%                 +1.9%
                                                                                                         Today, size and growth of the Internet
          Australia │ 1,564       3.3%          +0.4%
                                                                                                          Industry is mainly driven by private
                                                                                                          consumption and advertising
          Germany │ 3,426         3.0%          +1.0%                                                    The development of the Internet Industry
                                                                                                          will be leveraged by business-to-business
            Canada │ 1,821        3.0%          +0.6%
                                                                                                          services and products
            France │ 2,611        2.9%        +0.5%                                                      Small and medium enterprises (SMEs) in
                                                                                                          particular are starting to use web
            Mexico │ 1,184       2.5%           +1.7%                                                     technologies heavily, benefiting from lower
                                                                                                          capital costs and increasing efficiency
             Brazil │ 2,254     2.2%          +0.2%
                                                                                                      Source: Economist Intelligence Unit, United Nations

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M&A Report: The European Internet Industry 2014
THE EUROPEAN INTERNET INDUSTRY – OVERVIEW

                                                             Top 3 Internet companies by country
                                                                                                  Country       #3                              #2                       #1

         Russia                                                                                               VK                             Mail Ru                  Yandex

United Kingdom                                                                                                Just Eat                       Rightmove                asos

       Sweden                                                                                                 Klarna                         Spotify                  KING Digital

      Germany                                                                                                 Delivery Hero                  Zalando                  Rocket Internet
        Finland                                                                                               Grand Cru Games                Supercell                Rovio
        Ireland                                                                                               HostelWorld                    Fleetmatics              PaddyPower
        France                                                                                                SeLoger                        Vente Privee             Criteo
          Italy                                                                                               Buongiorno                     Bravofly                 Yoox
         Spain                                                                                                Privalia                       eDreams ODIEGO           Gowex
        Estonia                                                                                               Creative Mobile                Grabcad                  Skype
 Czech Republic                                                                                               Seznam                         Avast                    AVG
       Hungary                                                                                                Prezi                          Ustream                  LogMeIn
        Poland                                                                                                WP.pl group                    Onet                     Allegro
      Denmark
                                                                                                              TrustPilot                     Tradeshift               Unity
       Slovenia
                                                                                                              najdi                          mimovrste                outfit7
   Netherlands
                                                                                                              Marktplaats                    Takeaway                 Coolblue
       Belgium
                                                                                                              Engagor                        Immoweb                  Ogone
       Ukraine
                                                                                                              Paymentwall                    Rozetka                  Cupid Plc
      Lithuania
                                                                                                              Pixelmator                     Vinted                   Getjar
         Latvia
                                                                                                              Infogram                       Draugiem                 Ask FM
        Kosovo
                                                                                                              Goodwerp                       Merrjep                  Telegrafi

                  0.1   1.0           10.0         100.0        1,000.0      10,000.0 100,000.0
                              Historic peak valuation in US$m, logarithmic scale                            Source: World Startup Report and CatCap market research

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M&A Report: The European Internet Industry 2014
THE EUROPEAN INTERNET INDUSTRY – OVERVIEW

                                                    Market trends in 2014
1. European Internet Industry matured in 2014 but still has huge development potential

 Evidence of a maturing European Internet Industry

        Increasing IPO activity - 27 IPOs in 2014 - and the use of the stock market as an exit channel (e.g. AO World, King Digital and
         Zoopla)

        Increasing Private Equity (PE) interest in investing large sums in the Internet Industry (e.g. BC Partners acquisition of online
         car rental platform cartrawler, KKRs acquisition of online retailer The Hut Group and classifieds giant Scout24) to fund
         internationalisation or a buy-and-build strategy

        Large strategic investors buying know how, market share or momentum (e.g. Stepstone bought Evenbase, Bravofly acquired
         lastminute.com)

        Increasing M&A activity with larger deal volumes

 While the European Internet Industry is coming of age there are still plenty of young, game-changing companies. Start-up hubs such
  as London, Paris, Berlin and Stockholm are able to attract young entrepreneurs and to produce companies with innovative concepts
  and cutting edge technology – companies that are regularly receiving large amounts of international risk capital (e.g. victoria plumb,
  Klarna, westwing)

 While European Companies are catching up, they are still having a hard time keeping up with the pace of innovation in Silicon Valley
  with its cluster effects and huge range of funding resources. Thus, execution and quick internationalisation have become critical
  success factors for European players, with Germany’s Rocket Internet flying the highest but by no means being the only example as
  Delivery Hero, Kreditech or Lovoo all illustrate

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M&A Report: The European Internet Industry 2014
THE EUROPEAN INTERNET INDUSTRY – OVERVIEW

                                                     Market trends in 2014
2. The E-Commerce slowdown

 The E-Commerce sector saw a slowdown in the ever increasing number of start-ups as the industry continued to consolidate around
  large players. At the same time the late entry of established offline retailers and manufacturers also meant stiffer competition

 Large online retailers proved their ability to turn their businesses from pure growth towards profitability

 The ongoing offline-to-online shift remained a major trend in E-Commerce, with multi-channel retailing an important success factor

3. Cross-linking of online & offline business – technology enabled the emergence of new marketplaces & elimination of middlemen

 The cross-linking of online and offline businesses remained a major trend not only in E-Commerce - where multi-channel retailers
  continued to emerge - but also in various other sectors

 Key examples were companies like DeliveryHero and Just Eat, operating in the mobile and online food-ordering business, connecting
  pure offline restaurants with online users

 E-Commerce also illustrated the potential pace of consolidation as it has already reached an “end-game” scenario. With the
  acquisition of pizza.de by DeliveryHero, the acquisition of Lieferando by Takeaway.com and Just Eat’s IPO , the European market is
  now almost completely centred around three – financially well-equipped – companies

 Technology enabled the creation of new marketplaces for transportation (such as BlaBlaCar), real estate, care services and travel
  amongst others. Users not only benefit from cost savings by eliminating the middleman, but also increased transparency, trust (via
  ratings) and convenience (via mobilisation and personalisation)

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THE EUROPEAN INTERNET INDUSTRY – OVERVIEW

                                                       Market trends in 2014
4. Fintech is the place to be with start-ups springing up all over

 Not only is the mobile payment landscape undergoing its biggest change since the invention of the credit card, but the entire
  banking industry is currently being reinvented

 The development stage of the Fintech sector can be compared to E-Commerce or Classifieds five years ago with a range of small
  start-ups, mostly founded during the past 2 - 3 years, low entry barriers and very little competition from established offline players,
  i.e. banks

 This led to a large number of fundings including Kreditech, FundingCircle, iZettel, Klarna, adyen, Spotcap, Auxmoney to name just a
  few Fintech start-ups with major funding rounds in 2014

 This trend is likely to continue as Fintech is increasingly the target for international venture capitalists

 There is a high probability that Fintech will follow the same path as the mature Internet Industry, with the formation of large
  European players consolidating the market and banks entering late but reinforcing competition as they are far from short on money

5. Internet industry is increasingly concentrated in a few start-up hubs

 London and Berlin are by far the Internet start-up capitals of Europe in terms of numbers as well as funding with Dublin remaining
  the headquarters for US American Internet companies such as Facebook, Google and Airbnb

 The result is that venture capitalists, PEs, start-ups and established offline companies need to be represented in these cities to
  recruit talent and grab their share of the European Internet Industry

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THE EUROPEAN INTERNET INDUSTRY – OVERVIEW

                                                                   2013 vs. 2014 comparison

                                    Number of deals by sector                                                                    Relative number of deals by sector
                      2013                                                              2014                                     Sector               2013            2014

               111                                                            119                                              Commerce                38%         36% (-2%)
                                   197                                                           245
                                                                     62                                                      Online Business
         41                                                                                                                                            22%         18% (-4%)
                                                                                                                                 Service
              74                                                          137                                                   Consumer               17%         16% (-1%)
                         86                                                                105
                                                                                                                           Enabling/Analytics/
             Total # of Deals: 509                                 Total # of Deals: 668 (+31%)                                                        15%        21% (+6%)
                                                                                                                               Ad Serving
 Commerce          Consumer        Enabling/Analytics/Ad Serving   Mobile           Online Business Service
                                                                                                                                 Mobile                8%          9% (+1%)

                                  Number of deals by deal value                                                                               Description

                                                 2013       2014                                                            Total number of deals increased by approx.
        62
                                                                                                                             31% from 509 to 668 deals
  46                                                                                                                        All sectors saw more deals in 2014 than in
                                                                                                                             2013
                                   22                                                                                       Enabling/Analytics/Ad Serving was the
                          15                       16                                                       17               biggest winner percentage-wise followed by
                                                           9              6         8                  8                     Mobile at the expense of other sectors
                                                                                                                            Huge increase in deals above €100m but
    0 - 10                    10 - 20               20 - 50            50 - 100                        >100                  drop seen in deals between €20m and
                                             Deal value (in €m)                                                              €50m in 2014

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THE EUROPEAN INTERNET INDUSTRY – OVERVIEW

                                                Transactions in Europe’s top Internet countries

                                     Number of transactions3)                                                                                            Description
 +24%   +26%                                      Buyer             Target
                                                                                                             +153%
                                                                                                                            Germany and the UK were the most active
 252    251                                                                                                                  M&A markets followed by France, the
                                                %change                                                      224
               +86%                             prev. year                                                                   Nordics and Spain
 116    105
               167    +13%                                                                                                  Spain and Poland saw good traction and are
                      123                                                                                                    climbing the M&A charts
               74                                                                                            205
                      54
                                  +28%    +0%
                                                 +71%
                                                                                                                            In many countries domestic buyers
                                                             +50%    +46%    -14%
 136    146                        55     53
                                                   41         39       38
                                                                                          +0%   +1%   +50%                   dominated the M&A landscape; exceptions
               93                  20                                           37
                      69                                                                  24    17     15                    were Eastern Europe, Austria and Ireland
                                   35     32       27         28       20       28        12    12            19
                                                                                                       11                    with a high proportion of international
                                                                                                                             buyers

                                                                               Europe2)
                       Nodics1)

                                                                                                              Others3)
                                                                               Eastern                                      Most international buyers in Ireland were
                                                                                                                             UK and US companies taking advantage of
                                           Origin of buyers                                                                  favorable valuations and low language
                                                                                                                             barriers
                                         International              Domestic
                                                                                                                            Compared to 2013, Eastern Europe has
               28%                               22%                                      25%                                evolved from a young Internet market with
 34%                  41%                                             42%
        47%                       47%    52%                 48%                                                             mostly domestic buyers to a more advanced
                                                                                                64%          67%
                                                                               74%                    82%                    market with the second highest percentage
                                                                                                                             of international buyers
               72%                               78%                                      75%
 66%                  59%                                             58%
        53%                       53%    48%                 52%
                                                                                                36%          33%
                                                                               26%                    18%
                                                                             Europe2)
                      Nordics1)

                                                                                                              Others2)
                                                                             Eastern

                                                                                                                         1) Nordics: Denmark, Sweden, Norway, Finland
                                                                                                                         2) Eastern Europe: All eastern countries except Russia and Poland
                                                                                                                         3) 44 deals without disclosed buyer

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THE EUROPEAN INTERNET INDUSTRY – OVERVIEW

                                                 International deal flow

                Others: 11
                                                                                                  USA and Canada dominate
                                     5                                                             the non-European buyer
                                             3        4
                5                                                                                  landscape with 110 of 126
                    51        6 18
                                                                                                   deals
                         11              3
                                                                                                  Despite     its     growing
                    9                                                                              economical      power,   no
                                                                                                   acquisitions by Chinese
                                                                                                   companies have been seen in
                                                                                                   2014
          11                                      6
                                                                                                  Target countries in Europe of
                        110                               3                                        non-European buyers are:
                                                  2
         99                                                                                           UK (51 transactions)
                                     1       3
                              1                                                                       Germany                  (18
                                                                                                       transactions)
                                                                                                      France (11 transactions)
                                                                                                      Spain (9 transactions)

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THE EUROPEAN INTERNET INDUSTRY – OVERVIEW

   Largest European start-up hubs - number of companies receiving venture capital funding
                                                                                                            In terms of venture capital
                                                                                                             funding, London is by far the
                                                                                                             place to be with 187 venture
                                                                                                             capital fundings between the
                                                                                                             beginning of 2013 and
                                                                                                             September 2014
                                                                                                            London is followed closely by
                                                                  21                                         Berlin with 145 venture
                                                                Helsinki                                     capital fundings during the
                                                        22                                                   same period
                                                    Stockholm
                                                                                        29                  Paris is third most important
                                             17                                      Moscow                  European city (66) with
                                     Copenhagen
             32                                                                                              Barcelona and Munich third
             Dublin
                      187                   21     145
                                      Hamburg Berlin                                                         and fourth, respectively
                                     14
                       London Amsterdam

                             66
                             Paris                 32  11
                                           13 Munich Vienna
                                          Zurich

             27         39
                      Barcelona
            Madrid

                                                                                                         Source: Thomson Reuters, EY Research

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THE EUROPEAN INTERNET INDUSTRY – OVERVIEW

                                              The European Internet deal climate
1. M&A deals up 31% in 2014

 The European Internet Industry not only saw the number of deals increase by approx. 31% compared to 2013, but also a deal climate
  characterised by a range of large cap headline deals such as AMAYAs €3.6b acquisition of Rational Group or the Microsoft/Mojang deal
  worth about €1.9bn

 Although there are concerns about the 2015 deal climate the general attitude is bullish towards M&A activity in the Internet Industry

2. PE, Family Offices, Venture Capitalists with big ideas and Corporates seeking to expand into the Internet

 PE, Family Offices, Venture Capitalists as well as Corporates - all competing to provide expansion capital

 Once successful, companies has plenty of access to capital for growth acceleration – even from US West Coast VCs

 With the continuing strength of the stock market and increasing interest from the US and Asia, positive returns are expected

3. The year of the IPO

 2014 the year of the Internet IPO: 27 IPOs across Europe – compared to 9 in 2013 – and proceeds ranging from €1m to a staggering
  €1,400m raised by Rocket Internet, the largest European Internet IPO ever

 IPOs were used as an exit channel for existing shareholders and as a source for further funding to spur profitable growth, e.g. all
  €605m proceeds of the Zalando IPO went to the company with none of the major shareholders exiting

4. US investors invest for growth, European for monetisation

 For US American investors, growth is the buzzword in terms of Internet investment decisions; in contrast European Internet investors
  focus on business models with a track record of monetisation and therefore prefer to invest in fact rather than fiction

 As a result, the European Internet Industry and its financial spine is built on solid foundations with no bubble likely to burst

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THE EUROPEAN INTERNET INDUSTRY – OVERVIEW

                                                                            The European Internet deal climate
     5. PE activity helps to consolidate mature market sectors

  Global PE firms are expected to show increasing interest in mature European Internet market sectors, e.g. Classifieds and E-Commerce

  This will lead to more PE investments, increased M&A activity and acceleration the continuing consolidation process in matured
   sectors of the European Internet Industry as can be seen in Classifieds with Hellmann & Friedmans acquisition of Scout24

     6. Increasing popularity of M&A in Adtech

  Advertising follows the users as their media consumption habits move away from mainstream TV to YouTube, Instagram, Buzzfeed and
   Mobile Games

  After years of land grab in the various areas of Enabling/Analytics/Adserving a very diverse and fragmented environment started to
   consolidate in 2014. Large agencies and networks acquired digital market share and ad technology

  Success will be determined by whoever has the access to usage data and the ability to analyze it. The value chain will shorten via M&A
   improving the economics for publishers and advertisers

     7. Ongoing innovation and convergence fuels further growth of the European Internet Industry

  Internet’s convergence with Health, Automotive and Home (traditionally strong industries in Europe), means every “thing” will be
   “smart” leading to huge opportunities for smart entrepreneurs and smart investors – and thereby keeping the current Kondratiev
   wave1) alive

  Learn more about this in our M&A Reports on The European Software Industry 2014 and The European Life Sciences and Medtech
   Industry 2014

1)    In economics, Kondratiev waves (also called supercycles or the long economic cycle) are supposedly cycle-like phenomena in the modern world economy

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THE EUROPEAN INTERNET INDUSTRY – OVERVIEW

                                                              M&A vs. private placement comparison

                                M&A vs. private placement activity 2014                                                                                             Description

                      M&A deals                                                    Private placements                                  The European Internet Industry has seen a
                                                                                                                                        total of 1,402 private placements in 2014
                  119                                                                   201
                                                                                                                                       Commerce was the most active sector
                                       245                                                               485                            followed by Mobile
            62                                                                   263
                                                                                                                                       While Commerce was also highest in terms
                                                                                                                                        of M&A deals, Mobile was conversely the
                 137
                                 105                                                    243          210                                smallest

             Total # of deals: 665                                             Total # of placements: 1,402
                                                                                                                                       The UK led in overall numbers of M&A deals
                                                                                                                                        and private placements, followed by
      Commerce           Consumer            Enabling/Analytics/Ad Serving        Mobile           Online Business Service              Germany and France
                                                                                                                                       The ratio of M&A deals to private
                  M&A and private placement activity per target region                                                                  placements was nearly identical for the
                                                                                                                                        majority of regions with private placements
449                                            M&A          Private Placement                                                           being approximately twice as many as M&A
      374                                                                                                                               deals
146
      136        293
                 93      200
                          69           143
303                                           109
      238                              35              86                                                                86
                 200                                            68        64       60         56
                         131                           32                                              44       38       19
                                       108     81      54        40       53       40         44                26       67
                                                                                                       17
                                                               Europe2)
                          Nordic1)

                                                                                                                         Others3)
                                                               Eastern

                                                                                                                                    1) Nordic: Denmark, Sweden, Norway, Finland
                                                                                                                                    2) Eastern Europe: All eastern countries except Russia and Poland
                                                                                                                                    3) 86 deals without disclosed target

                                                                                                                  CatCap GmbH | M&A Report: The European Internet Industry 2014| 18
Top European M&A Deals and Equity Investments
THE EUROPEAN INTERNET INDUSTRY – TOP EUROPEAN M&A-DEALS AND
EQUITY INVESTMENTS
                                                 Selected M&A transactions in 2014
                                                                                                                                                Transaction value
Target     Description                                                                             Buyer                 Countries
                                                                                                                                                [€m]

         Amaya Gaming acquired Rational Group, the world's largest poker business and
         owner as well as operator of the PokerStars and Full Tilt Poker brands, for $4.9b
         (sales multiple of 4.5x; EBITDA multiple of 11.7x). The acquisition of Rational by
                                                                                                                                                        3,614
         Amaya created the world’s biggest listed online gaming group. It has been a
         transformative acquisition for Amaya, strengthening its core B2B operations with a
         consumer online powerhouse that creates a scalable global platform for growth.
         Microsoft acquired Mojang, the celebrated Stockholm-based game developer, and
         the company’s iconic “Minecraft” franchise for $2.5b on September 2014. The
         Mojang team will join Microsoft Studios including the studios behind global
         blockbuster franchises like Halo and Forza. Microsoft expects to see an immediate                                                              1,931
         ROI in 2015. Three founders will leave Mojang following the acquisition. The
         decision to sell was designed to help Minecraft continue to grow while freeing up
         the founding team to pursue their other interests.
         Mail.Ru acquired the remaining 48.01% stake of Russia’s most popular social
         network VK.com for a total cash consideration of $1.47b in September 2014. Taking
         into account the price paid for the other 51.99% of VK.Com from the first                                                                      1,065
         investment in 2007 , the total acquisition cost of VK.Com is $2.07b. The acquisition
         puts to bed a lengthy battle for the ownership and control of VK.Com.

         Following the acquisition of Ogone last year for €360m, Ingenico Group, a global
         leader in seamless payments, acquired GlobalCollect, a global online full service
         payment provider, for €820m (sales and EBITDA multiples of 2.7x and 16.4x
                                                                                                                                                        820
         respectively). Fully financed by available cash and bank debt, the transaction
         enhances the group’s position as a global leader in seamless payments with the
         complimentary qualities of both companies.

         The Japanese Internet giant Rakuten acquired the Cyprus-based messaging
         platform & app maker Viber for $900m in February 2014. With this acquisition
         Rakuten entered the global messaging market. Viber is the largest transaction by                                                               658
         Rakuten, an active acquirer in the last few years e.g. buying Kobo for $315m in
         cash.

         BC Partners and Insight Venture Partners acquired the car rental platform
         CarTrawler from the founder PE investor ECI Partners and other individual
         shareholders. BC Partners and Insight Venture Partners acquired majority and                                                                   453
         minority stakes respectively whilst the management team retained a significant
         shareholding. CarTrawler was valued at multiples of 0.9x sales and 20.6x EBITDA.

                                                                                                CatCap GmbH | M&A Report: The European Internet Industry 2014| 20
THE EUROPEAN INTERNET INDUSTRY – TOP EUROPEAN M&A-DEALS AND
     EQUITY INVESTMENTS
                                                                             Selected M&A transactions in 2014
                                                                                                                                                                         Transaction value
     Target                        Description                                                                              Buyer                 Countries
                                                                                                                                                                         [€m]

                                Axel Springer increased its share in the online classified ads business, Axel Springer
                                Digital Classifieds, from 70% to 85% with the option to purchase the remaining
                                shares. If the option is exercised, the global growth investor General Atlantic will                                                             446
                                receive Axel Springer shares as consideration. The purchase price for the 15% was
                                €446m in cash valuing the classifieds business at €2,973m.
                                NASDAQ-listed social gaming firm Zynga bought the Oxford-based game-maker
                                NaturalMotion for $527m in January 2014. NaturalMotion has had a string of
                                mobile game hits such as CSR Racing and Clumsy Ninja. With this acquisition Zynga
                                                                                                                                                                                 387
                                has entered the lucrative mobile games market seen as the next step in
                                transforming the company which has struggled to replicate its previous success
                                with desktop games Farmville and Mafia Wars.

                                Food delivery service company Delivery Hero also stepped up its game with a
                                consolidation play – the acquisition of one of its German rivals Pizza.de. According
                                to rumors the purchase price was approx. €290m. With this acquisition Delivery                                                                   ~290
                                Hero boosted its scale on home turf and core market. It is an open secret that
                                Delivery Hero is considering an IPO following its competitors Just Eat and grubHub.

                                NASDAQ-listed Progress Software acquired Bulgarian Telerik, a leading provider of
                                application development tools, for $262.5m on a sales multiple of 4.4x. Telerik
                                enables its 1.4 million strong developer community to create compelling user
                                                                                                                                                                                 207
                                experiences across cloud, web, mobile and desktop applications. Telerik's revenue
                                for the last twelve months was over $60 million, with annual bookings growth of
                                over 20%.
                                Through its big data division Dunnhumby Tesco, the world’s second-largest retailer,
                                bought into ad tech by acquiring Berlin-based Sociomantic for approx. £120m.
                                Sociomatic is an ad tech company specializing in programmatic and retargeting
                                                                                                                                                                                 ~150
                                advertising with an emphasis on e-commerce. Sociomantic was different to a lot of
                                other ad tech startups in that it had never raised venture funding and was
                                bootstrapped.
                                NMG acquired the Munich-based global online luxury business mytheresa.com.
                                which generates net sales of approx. €100m and delivers exclusively designed
                                fashion merchandise to 120 countries worldwide. The fashion site is successful in
                                                                                                                                                                                 1501)
                                Germany and the rest of Europe, and gaining traction in Asia. With the acquisition
                                NMG is making a step forward in its international and digital expansion plans and to
                                reach more custumers globally through the Internet..
1)    It was reported from different sources that the initial payment was €150m plus an earn-out of up to €50m

                                                                                                                         CatCap GmbH | M&A Report: The European Internet Industry 2014| 21
THE EUROPEAN INTERNET INDUSTRY – TOP EUROPEAN M&A-DEALS AND
EQUITY INVESTMENTS
                                                Selected equity investments in 2014
                                                                                                                                                 Transaction value
Target     Description                                                                              Investor              Countries
                                                                                                                                                 [€m]

         Rocket Internet AG formerly known as Rocket Internet Gmbh is an incubator and
         venture capital firm specializing in incubation, early-stage, and start-ups. The
         company received pre-IPO funding of €435m from United Internet for a 10.7%                                                                      819
         stake. PLDT, a Philippian-based telecom company, saw its stake diluted to 8.3%. The
         transaction valued Rocket Internet at €4.3bn.

         Delivery Hero Holding GmbH, the German online food ordering site, received total
         funding of €392m led by Insight Venture Partners. The funding was the fourth
         largest funding ever received by a European tech company. The funding valued the                                                                392
         company at €1bn and the proceeds will be used to support the growth of Delivery
         Hero.

         Victoria Plumb Ltd. is an online bathroom products retailer. The company received
         funding of €241m from TPG, a leading global private equity firm. According to the
         company TPG’s investment will help the company accelerate its growth and set the                                                                241
         benchmark for the UK bathroom retailing industry. For TPG this was the second
         investment in the bathroom sector after selling Grohe to Lixil Corp. in 2013.

         Adyen B.V provides payment solutions for merchants across the globe. The €200m
         funding, led by General Atlantic, will be used to expand its operations globally with
                                                                                                                                                         200
         a particular focus on North America and Asia Pacific. The funding round valued
         Adyen at a post money valuation of approx. €1.5bn.

         OZON, a Russian online company which operates various sites in sectors such as
         travel, e-commerce and delivery services, received funding of €109m by Sistema, a
         subsidiary of Mobile TeleSystems (MTS). Sistema received a stake of 10.9% and all
                                                                                                                                                         109
         existing shareholders will remain with the company. The proceeds will be used to
         further enhance OZON’s online presence, while MTS will leverage the company’s
         logistic infrastructure.

         momondo, an online travel media & technology company that publishes flight deals
         in the UK and internationally, received €101m in funding from Boston-based PE
         firm Great Hill. The funding valued momondo at more than €180m with Great Hill                                                                  101
         receiving a majority stake. The funding will be used to further focus on growing the
         business and capitalise on the double-digit growth rates in the travel meta market.

                                                                                                 CatCap GmbH | M&A Report: The European Internet Industry 2014| 22
THE EUROPEAN INTERNET INDUSTRY – TOP EUROPEAN M&A-DEALS AND
EQUITY INVESTMENTS
                                                Selected equity investments in 2014
                                                                                                                                                Transaction value
Target     Description                                                                             Investor                Countries
                                                                                                                                                [€m]

         Klarna, based in Sweden, provides payment solutions for online shopping. The
         company received a €90m funding for its purchase of Germany-based Sofort which
         completed in March. While the transaction value was undisclosed, reports indicate                                                               90
         a purchase price of above €100m. With the acquisition, Klarna now provides
         payment solutions to 60% of all German online retailers.

         Takeaway.com, an online food ordering & delivery site, announced a Series B
         funding of €74m co-led by new investor Macquarie Capital and existing investor
                                                                                                                                                         74
         Prime Ventures. The merger of Lieferando and Takeway.com was part of the
         transaction.

         Sarenza SA, a French online retailer of footwear, received €74m funding led by
         bpifrance and HLD. The funding will be used to finance the company’s international                                                              74
                                                                                                              + 2 Family
         expansion and achieve its sales goal of €500m within five years.
                                                                                                              Offices

         BlaBlaCar received €73m in a Series C founding led Index Ventures at a post money
         valuation of more than €750m. BlaBlaCar’s success is based on the increasing
         interest of investors & consumers in the sharing community. It operates an online
         platform that connects drivers who have empty seats with people looking for a ride
         through the largest car share service in Europe.. The funding will be used to                                                                   73
         develop new markets outside Europe, where the company already enjoys
         significant market share in most developed countries. BlaBlaCar only currently
         charges commission for car shares in France and Spain, so the funding will also be
         used to develop the business model in other existing markets.
         Westwing, a German-based e-commerce company with a focus on home and living,
         has secured a €72m funding led Tengelmann Ventures from Germany. Westwing
         Home will also use the funds to reinforce its position as a major player in the home                                                            72
         and living e-commerce market. Furthermore, Westwing will expand its business
         globally with a focus on Brazil, Russia and France.

         Elasticsearch develops and delivers an open source search engine solution for
         developing Web sites or online systems. It has received €51m in a Series C round
                                                                                                                                                         51
         led by new investor New Enterprise Associates. Benchmark Capital and Index
         Ventures were returning investors in the round.
                                                                                                CatCap GmbH | M&A Report: The European Internet Industry 2014| 23
THE EUROPEAN INTERNET INDUSTRY – TOP GERMAN M&A-DEALS AND EQUITY
     INVESTMENTS
                                               Selected M&A transactions in 2014 with German involvement
                                                                                                                                                                         Transaction value
     Target                        Description                                                                              Buyer                 Countries
                                                                                                                                                                         [€m]

                                Axel Springer increased its share in the online classified ads business Axel Springer
                                Digital Classifieds from 70% to 85% with the option to purchase the remaining
                                shares. If the option is exercised, the global growth investor General Atlantic is to                                                            446
                                receive Axel Springer shares as consideration. The purchase price for the 15% was
                                €446m in cash valuing the classifieds business with €2,973m.
                                Food delivery service company Delivery Hero is also participating in the
                                consolidation play by acquiring one of its German rivals Pizza.de. According to
                                rumors the purchase price was approx. €290m. With the acquisition of Pizza.de                                                                    ~290
                                Delivery Hero got a big boost in scale on its home turf being also its core market. It
                                is an open secret that Delivery Hero is also considering an IPO following its
                                competitors Just Eat and grubHub.
                                Through its big data division Dunnhumby Tesco, the world’s second-largest retailer,
                                bought into ad tech acquiring Berlin-based Sociomantic for approx. £120m.
                                Sociomatic is an ad tech company specialized on programmatic and retargeting
                                                                                                                                                                                 ~150
                                advertising with an emphasis on e-commerce. Sociomantic stands apart from a lot
                                of other ad tech startups in that it had never raised venture funding and was
                                bootstrapped.
                                NMG acquired global online luxury business mytheresa.com. The Munich-based
                                mytheresa.com generates net sales of approx. €100m and delivers exclusively
                                designed fashion merchandise to 120 countries worldwide. The fashion site is quite
                                                                                                                                                                                 1501)
                                successful in Germany, has good acceptance in the rest of Europe, and is gaining
                                traction in Asia. With the acquisition NMG is making a step in its international and
                                digital expansions and reach more costumers globally through the Internet.
                                Klarna acquired SOFORT AG, an innovator for secure payments on the Internet,
                                from the majority shareholder Reimann Investors for SEK 1.3b. They will join forces
                                to become one of the leading independent European online payment providers.
                                                                                                                                                                                 145
                                The acquisition was financed using a capital injection from existing shareholders.
                                Both companies will retain their brands. The announcement of the transaction was
                                in 2013, the closing in 2014.
                                Fyber is a Web-based technology advertising service company, empowering
                                application developers to execute smart advertisement monetization strategies
                                across various connected devices through a unified mobile supply side platform.
                                                                                                                                                                                 127
                                RNTS Media N.V. signed an agreement to acquire Fyber in cash and stock. Under
                                the terms of the deal, RNTS paid €12m cash and issued 46m shares as
                                consideration.
1)    It was reported from different sources that the initial payment was €150m plus an earn-out of up to €50m

                                                                                                                         CatCap GmbH | M&A Report: The European Internet Industry 2014| 24
THE EUROPEAN INTERNET INDUSTRY – TOP GERMAN M&A-DEALS AND EQUITY
INVESTMENTS
                     Selected M&A transactions in 2014 with German involvement
                                                                                                                                                Transaction value
Target     Description                                                                             Buyer                 Countries
                                                                                                                                                [€m]

         In May, Daily Mail and General Trust Plc, a British media house, sold its online job
         board business to StepStone, exiting its activities in this area. Among others
         evenbase operates jobsite.co.uk, CityJobs.com and eMedCarreers.com. The deal
                                                                                                                                                        115
         will help StepStone and its parent company Axel Springer Digital Classifieds to
         increase its already large stake in the European online job board market. Evenbase
         will benefit from StepStone’s expertise and scale.
         In June Axel Springer Digital Classifieds signed an agreement to acquire a 51% stake
         in Car & Boat media, a France-based company that operates the leading French
         used car platform LaCentrale.fr and leading market place for boats
                                                                                                                                                         71
         Annoncesbateau.com. While Axel Springer Digital Classifieds will once more
         increase its European footprint in the digital classifieds market, it also adds the
         automotive sector to its classifieds portfolio.
         Econa Shopping operates the coupon portals Sparwelt.de and Deals.de. The entire
         company was acquired for €28m by RTL Interactive. RTL, being already active in the
         online coupon business, will further expand its existing business. As part of the
                                                                                                                                                         28
         transaction the entire management team of Econa will stay with the company and
         keep developing the online portals. Thanks to its media power RTL can increase
         brand awareness of Econa.

         match.com acquired FriendScout24 from Scout24 Holding for €18m on July 17,
         2014. FriendScout24 provides online dating service. match.com, which operates in
         Germany under Neu.de, acquired with FriendScout24 one of its major competitors                                                                  18
         on the German market. match.com pushed with this acquisition the consolidation
         in the online dating industry.

         NASDAQ-listed Telenav acquired skobbler for $23.8m in cash and stock in January
         2014. The consideration comprised $19.2m cash and $4.6m Telenav common stock.
         Telenav expects that all skobbler employees will join Telenav as part of its OSM
                                                                                                                                                         18
         team. skobbler develops and sells smart location-aware applications and map
         technology for mobile devices. The company focuses on the development of
         location technology based on OpenStreetMap.

         Unister – No. 1 in German OTAs – acquired TravelViva the number three in the
         market – to strengthen its position in the German travel market and grab additional                                                            n.a.
         market share. Both companies will benefit from synergies and economies of scale.

                                                                                                CatCap GmbH | M&A Report: The European Internet Industry 2014| 25
THE EUROPEAN INTERNET INDUSTRY – TOP EUROPEAN M&A DEALS AND
EQUITY INVESTMENTS
                                    Selected equity investments in 2014 in Germany
                                                                                                                                                 Transaction value
Target     Description                                                                              Investor              Countries
                                                                                                                                                 [€m]

         Rocket Internet AG formerly known as Rocket Internet Gmbh is an incubator and
         venture capital firm specializing in incubation, early-stage, and start-ups. The
         company received pre-IPO funding of €435m from United Internet for a 10.7%                                                                      819
         stake. PLDT, a Philippian-based telecom company, saw its stake diluted to 8.3%. The
         transaction valued Rocket Internet at €4.3bn.

         Delivery Hero Holding GmbH, the German online food ordering site, received total
         funding of €392m led by Insight Venture Partners. The funding was the fourth
         largest funding ever received by a European tech company. The funding valued the
                                                                                                                                                         392
         company at €1b and the proceeds will be used to support the growth of Delivery
         Hero. Potentially a big part of the funding Delivery Hero invested in the acquisition
         of its German competitor Pizza.de.

         Westwing, a German-based E-Commerce company with a focus on home and living,
         has secured a €72m funding led Tengelmann Ventures from Germany. Westwing
         Home will also use the funds to reinforce its position as a major player in the home                                                             72
         and living E-Commerce market. Furthermore, Westwing will expand its business
         globally with a focus on Brazil, Russia and France.

         Rocket Internet’s foodpanda grabbed $60m in its third round of funding.
         foodpanda operates an online food ordering platform. The company’s platform
         enables to online food ordering from restaurants. It operates in a number of South                                                               45
         American countries, Asia, Eastern Europe, and Africa. This funding round brings the
         total foodpanda has raised so far to $108m.

         Webtrekk GmbH announced that it has received €25 million in its third round of
         funding from new investor DPE Deutsche Private Equity GmbH in June 2014.
                                                                                                                                                          25
         Webtrekk provides digital intelligence solutions enabling companies to optimize
         their digital efforts by offering Web analytics and Website optimization.

         auctionata received $30m funding from its existing shareholders. It is an online
         auction platform for buying and selling unique or collectible items and goods. Its
         services include valuations; catalogue descriptions and photography; storage,
                                                                                                                                                          22
         logistics, and transport; sale at auction or in its gallery; and payment processing.
         Last April the company raised over $20m to boost growth through technology
         upgrades and a New York auction studio.

                                                                                                 CatCap GmbH | M&A Report: The European Internet Industry 2014| 26
THE EUROPEAN INTERNET INDUSTRY – TOP EUROPEAN M&A DEALS AND
EQUITY INVESTMENTS
                                    Selected equity investments in 2014 in Germany
                                                                                                                                                 Transaction value
Target     Description                                                                              Investor              Countries
                                                                                                                                                 [€m]

         GoEuro issued common stock pursuant to an exemption provided under Regulation
         D. The transaction included participation from 18 investors including New
         Enterprise Associates, Battery Ventures Hasso Plattner Ventures and Lakestar.
                                                                                                                                                          21
         GoEuro is a European travel planner platform. GoEuro currently operates in seven
         European countries. The new funding will be used for market expansion and
         ramping up the company’s rate of growth.
         NetVacation announced that it had received €20m in a Series C round in November
         2014. The transaction included participation from new investors Altpoint Ventures
         and Target Ventures and existing investors including Holtzbrinck Ventures Gmbh,
                                                                                                                                                          20
         Hasso Plattner Ventures Management GmbH, and DIMA Ventures. NETVACATION
         operates cruise portals Dreamlines which provides cruises, club ships, river cruises
         and sailing trips.

         The transaction included participation from a new investor Vostok Nafta for $7.5m
         and existing investors, DN Capital, Holtzbrinck Ventures, Texas Atlantic Capital, and
         Sixt family. Quandoo provides a user interface that offers local commerce services
                                                                                                                                                          19
         including booking and cashier services. It will use this cash to extend its market
         Germany, Austria and Italy across Europe as well as launching in APAC and Latin
         America.

         Mediakraft Networks announced it received €16.5m in a second round of equity
         funding led by new investor, Iris Capital, in July 2014. The transaction included
         participation from other new investor, Capnamic Ventures, and existing investor,
                                                                                                                                                          17
         Shortcut Ventures GmbH. Mediakraft Networks provides internet television
         services. Recently Mediakraft had negative press coverage with angry celebrities,
         mismanagement and scaling problems. Hopefully the funding helps to solve that.
         Home24 received €16m in funding in December 2014. The company issued treasury
         shares. The round included participation from new and existing investors.
         Returning investor Rocket Internet AG invested €10m increasing its stake by 0.3% to                                                              16
         49.8%. The round was raised at a post money valuation of €815m. Home24 offers
         home and furniture products online and offers home delivery services.
         Windeln.de announced that it received €15m in an equity round of funding in May
         2014. The transaction included participation from new investor, DB Private Equity
         and existing investors, DN Capital, Acton Capital Partners, MCI Management, and
                                                                                                                                                          15
         360 Capital Partners. In January 2015 Windeln.de received additional €45m in
         funding led by Goldman Sachs and DB Private Equity. Seems the company is
         preparing for an IPO.

                                                                                                 CatCap GmbH | M&A Report: The European Internet Industry 2014| 27
Trends and Selected Transactions Presented by Globalscope
THE EUROPEAN INTERNET INDUSTRY – GLOBALSCOPE PERSPECTIVE

                           Trends and selected transactions presented by Globalscope

Globalscope Partner                      M&A trends Germany 2015                                Top Internet transaction Germany 2014

                           ■   German Internet companies continue to mature and          ■   “My top internet transaction 2014 in Germany was
                               are becoming interesting targets for PE investors             the acquisition of Pizza.de by its rival Delivery Hero.
                           ■   Whilst Mobile companies are practically in their              The transaction was not only one of the largest
                               infancy they often disrupt the market. Therefore we           internet deals in Germany in 2014 but also a big step
                               will see high M&A and fundraising activities in this          in the consolidation of food delivery market. It is a
                               sector                                                        prime example of how quickly company builders
                           ■   Germany, as the growth engine and anchor of                   internationalize. Pizza.de was commonly considered
                               stability in Europe, attracts investors attention with        as the top dog of German food delivery companies.
                               Internet companies being their first European port of         However, it was being overrun by its financially
     Mark Miller
   Partner at CatCap           call                                                          stronger competitors and therefore faced a limited
       Germany                                                                               number of strategic options going forward. ”
                           ■   M&A is no longer just about growth but about
                               synergies, cost reduction and reducing competition

Globalscope Partner                         M&A trends UK 2015                                      Top Internet transaction UK 2014

                           ■   Driven by new technology and changing consumer            ■   “Google’s acquisition of Artificial Intelligence start-up
                               behavior & regulations, we have seen a large influx           DeepMind for more than $400M was one of the most
                               of funding in Fintech over the past few years                 remarkable acquisitions of 2014”
                           ■   With London being the focal point of the European         ■   “Acquiring DeepMind will help Google to compete
                               financial services market, we expect to see                   against other major tech companies as they try to
                               significant M&A activity soon, driven either by VCs           gain business advantages by investing in deep
                               looking for exits or strategic investors snapping up          learning.”
                               their innovative and agile competitors                    ■   “This is expected to help them create new types of
   Paddy MccGwire
  Managing Partner at      ■   As in 2014, SMAC (social, mobile, analytics and               products and services that can understand and learn
Cobalt Corporate Finance       cloud) will remain the main driver of Internet                from the vast amounts of unstructured data clogging
    United Kingdom             transactions in UK                                            up the Web”

                                                                               CatCap GmbH | M&A Report: The European Internet Industry 2014| 29
THE EUROPEAN INTERNET INDUSTRY – GLOBALSCOPE PERSPECTIVE

                        Trends and selected transactions presented by Globalscope

Globalscope Partner                M&A trends France/Belux 2015                            Top Internet transaction France/Belux 2014

                        ■   Accounting for almost one fifth of all transactions in    ■   “Two years ago, rumor has it that Infosys was ready
                            the French and BeLux markets, ad-tech companies               to put €400m on the table to buy Clear2Pay NV until
                            continue to whet the appetite of investors.                   negotiations broke up. Eventually, in 2014, FIS Inc.
                            Advertisers understand the potential from cross-              acquired the company and its state-of-the-art
                            channel campaigns and measurements. Moreover,                 technologies for about €375m. European Fintech
                            Criteo or Teads (whose IPO is scheduled in 2015)              benefits from the harmonized payment system
                            pave the way for continuous consolidation.                    requirements which bolster innovation. Although
                        ■   In 2013, Ingenico’s acquisition of Ogone hit the              London is undoubtedly Europe’s Fintech hub, major
  Daniel Schneider          headlines. Last year, Fintech sector M&A kept its             deals are expected in other countries mainly at banks’
  Partner at Tenzing        momentum and we expect it to accelerate given                 initiative.”
       Partners             PSPs maturity
    Luxembourg

Globalscope Partner               M&A trends the Netherlands 2015                         Top Internet transaction the Netherlands 2014
                        ■   We are seeing an ongoing market consolidation,            ■   “Two examples of ongoing industry consolidation:
                            both autonomous (market leaders outpacing the                   The acquisition of Ziggo by Liberty Global (UPC),
                            average market growth) and via M&A                               a €10b merger of cable companies that creates a
                        ■   PE funds are more and more comfortable with                      dominant player on the Dutch market for
                            Internet companies as many have proven business                  Internet and television
                            models with stable (and growing) cash flows. This               Warner Bros (Time Warner) acquisition of Dutch
                            results in an increase in PE investments in Internet             multi media production company Eyeworks, a
                            companies and an overall increase in deal activity               €200m deal that will create the scale for
                        ■   Long-awaited (and feared) entrance of Amazon into                successful Eyeworks concepts to prosper
    Martijn Peters          the Netherlands? In 2014, Amazon launched its 1st
 Partner, Globalscope                                                                        globally”
                            commercial activities and there is widespread
   the Netherlands
                            speculation about potential acquisitions of leading
                            Dutch e-tailers
                                                                            CatCap GmbH | M&A Report: The European Internet Industry 2014| 30
THE EUROPEAN INTERNET INDUSTRY – GLOBALSCOPE PERSPECTIVE

                           Trends and selected transactions presented by Globalscope

 Globalscope Partner                       M&A trends Spain 2015                                 Top Internet transaction Spain 2014

                           ■   Following the macroeconomic recovery and                 ■   “In March 2014, Schibsted acquired Spanish internet
                               improvement of business conditions, the Spanish              business Milanuncios for €50M, plus a 10% stake of
                               M&A market is expected to steadily grow in 2015              Schibsted Spain. Founded in 2005, Milanuncios is an
                           ■   International M&A players are actively analyzing             online classifieds business. In 2010, Milanuncios
                               investment opportunities in the Spanish market,              overtook Spanish leader Segundamano (already
                               confident that the recovery and growth will                  owned by Schibsted) in web traffic. Today
                               consolidate in the short term                                Milanuncios has 17 million active users and more
                           ■   Likewise, Spanish Private Equity firms have improved         than 60 million visits per month. Schibsted is a
   César Prado López           access to financial sources and raised new funds for         Norwegian media group with operations in 29
Founding Partner at Next       a total (as of Dec 2014) of €4.3 billion (+88%)              countries and revenue of ca. €2billion.”
       Corporate
         Spain

 Globalscope Partner                      M&A trends Poland 2015                                Top Internet transaction Poland 2014

                           ■   The online retail market will continue its rapid         ■   “2014 was marked by disposals of several non-core
                               consolidation, driven by declining margins and the           businesses by Naspers in Poland with the company
                               perceived threat of Amazon’s entry to Poland                 implementing its strategy to focus on the core
                           ■   A massive wave of VC funded startups are maturing            business of Allegro.pl; “
                               and expect to finally be noticed by potential            ■   “2014 was also the year of a number of very exciting
                               acquirers, both internationally and domestically             international M&A deals with targets being acquired
                           ■   Polish startups are increasingly eyeing international        by international players: Kontomierz (Fintech) by
                               markets, once their business model has been tested           Kreditech, Travelist (travel club) by Secret Escapes,
   Marcin Majewski
                               locally, or more and more often target US and EU             Gastronauci (restaurant reviews) by Zomato.”
Deputy Managing Director
   at Augeo Ventures           markets from the outset; as a result we expect a
        Poland                 growing trend for international fund raisings

                                                                              CatCap GmbH | M&A Report: The European Internet Industry 2014| 31
THE EUROPEAN INTERNET INDUSTRY – GLOBALSCOPE PERSPECTIVE

                            Trends and selected transactions presented by Globalscope

Globalscope Partner                        M&A trends Sweden 2015                                  Top Internet transaction Sweden 2014

                            ■   Sweden has seen increasing M&A activity for the            ■   “In September Microsoft acquired the game
                                past few years with 2014 recording the highest                 developer Mojang, the creator of the global online
                                transaction activity since 2008 and 2015 is looking to         success Minecraft, for $2.5b making the Mojang
                                be even stronger                                               owner, Marcus “Notch” Persson, one of the most
                            ■   We are therefore expecting to see high demand for              successful Internet entrepreneurs in history
                                M&A in most parts of the Internet industry, from           ■   “This transaction again confirms Stockholm as a
                                cloud services to e-commerce                                   significant tech hub on a global scale that produces
                            ■   Sweden, and Stockholm in particular, is establishing           truly successful internet companies such as Mojang,
   Johan Frenckner              itself as an international technology center and we            Skype, Spotify, Klarna and King”
  Managing Partner at           are expecting to see increasing interest from
      ScandCap
                                international investors looking to invest in the
       Sweden
                                forefront of the Internet industry

Globalscope Partner                        M&A trends Greece 2015                                  Top Internet transaction Greece 2014

                            ■   Greek Internet companies are maturing and                  ■   “Greek online travel agency Travelplanet24 has
                                becoming interesting targets for Private Equity                received financing of €3.5m from the Elikonos
                                investors                                                      Jeremie and Odyssey Jeremie Partners investment
                            ■   Key areas of focus: online travel, digital advertising,        schemes. The funding received by Travelplanet24 is
                                online food delivery, e-commerce, mobile apps                  said to be the largest capital investment made so far
                                                                                               in Greece through the Jeremie program.”
                            ■   There are 4 active tech VCs, with their investment
                                horizon ending at the end of 2015. They have               ■   “The investment will be directed to the faster growth
                                approximately €35m to invest in 2015 in                        of the company abroad, new technologies and
 Pantelis Papageorgiou
                                tech/internet companies                                        potential acquisitions in countries of strategic
Founding Partner at First
                                                                                               interest,’ the company’s CEO, Philipp Brinkmann, said
Athens Corporate Finance
                                                                                               in an announcement.”
         Greece

                                                                                 CatCap GmbH | M&A Report: The European Internet Industry 2014| 32
Commerce
THE EUROPEAN INTERNET INDUSTRY – COMMERCE

                                                                 2013 vs. 2014 Comparison

                               Number of deals by sub-sector                                                          Relative number of deals by sub-sector
                      2013                                                       2014                                 Sub-sector           2013            2014

                 38                                                       52                                      E-Commerce/
                                                                                                                  Comparison Shopping/      54%         48% (-6%)
                                                                                         118                      Couponing
           35                   107
                                                                     50                                           Jobs/ Classifieds/
                                                                                                                                             9%         10% (+1%)
                                                                                                                  Dating
                 17
                                                                                25                                Transactions/
                                                                                                                                            18%         20% (+2%)
              Total # of Deals: 197                              Total # of Deals: 245 (+24%)                     Auctions/ Payments

 E-Commerce/ Comparison Shopping/     Jobs/Classifieds/      Transactions/ Auctions/    Travel/ Rental/ Housing   Travel/ Rental/
                                                                                                                                            19%         22% (+3%)
 Couponing                            Dating                 Payments                                             Housing

                               Number of deals by deal value                                                                           Comment

          22                                2013          2014                                                     Total number of deals in the commerce
                                                                                                                    sector has increased by approx. 24% from
                                                                                                                    197 to 245 deals

    11
                                                                                                                   All subsectors saw more deals in 2014 than
                          8    9              8                                                 8
                                                                                                                    in 2013
                                                                            6
                                                     4                                                             E-Commerce/      Comparison      Shopping/
                                                                     3
                                                                                         1                          Couponing lost about 6% relative share
                                                                                                                   Huge increase of deals between €0m -
     0 - 10               10 - 20             20 - 50               50 - 100               >100                     €10m and above €100m
                                         Deal Value (in €m)

                                                                                                CatCap GmbH | M&A Report: The European Internet Industry 2014| 34
THE EUROPEAN INTERNET INDUSTRY – COMMERCE

                                           Transactions in Europe’s top Internet countries

                    Number of transactions and origin of buyers                                                                    Description

                                                                                                                 In absolute numbers Germany is the most
                                       Buyer       Target
                                                                                                                  attractive country for acquisitions in Europe –
  48                                                                                                              potentially due to its large number of
         39                                                                                                       inhabitants and economic strength
               29    28                                                                                          The Nordic countries became an attractive
                                                                                                                  target but Nordic companies have also been in
                                                                                                       55         acquisition mode
  47     48
               35    34         10    8                                                                          The UK still remains a significant market for
                                             4      8            5
                                14    13     12                           3                4                      buyers and particularly for foreign players given
                                                    7        8        8        43      4       51       6
                                                                                                                  the low language barrier
                                                                                                                 German companies have also been relatively
                      Nordics

                                                                      Europe

                                                                                                       Others
                                                                     Eastern                                      active in their acquisition efforts resulting in a
                                                                                                                  total of 48 transactions
                                     Buyer’s background                                                          It is interesting to note that approx. 22% of
                                                                                                                  buyers in the Commerce sector are internet
                                                                                                124
                                                                                                                  software and services companies
    54                                                                                                           Last year, internet retail companies were the
                                                                                                                  most active buyers due to the ongoing
                                                                                                                  consolidation in the e-commerce market
                    25                                                                                           E-commerce remains the largest sub-sector in
                                      17
                                                        13                     12                                 terms of deal numbers but also among internet
                                                                                                                  software and services companies taking
                                                                                                                  increasing         interest         in         the
  Internet        Asset          Internet Retail Hotels, Resorts          Publishing           Other              transaction/auction/payments sector
 Software      Management                        and Cruise Lines
and Services   and Custody
                  Banks
                                                                                               CatCap GmbH | M&A Report: The European Internet Industry 2014| 35
THE EUROPEAN INTERNET INDUSTRY – COMMERCE

                                                                 Transactions in Europe’s top Internet countries

                                                       Private placement heatmap                                                                            Description
Average Deal Value (in € m)

                              18                                                                                                  The Private placement heatmap shows a
                                                                    E-Commerce/ Comparison Shopping/                               different picture to M&A activity in Commerce
                              17
                                                                    Couponing1)
                              16                                                                                                  E-Commerce has attracted the most number of
                                                                                                                                   investments in absolute terms as well as in
                              15
                                                                                                                                   average deal value
                              14
                                                                                                                                  In Jobs/Classifieds/Dating a relatively low
                              13                                                                                                   number of fundings can be seen with relatively
                              12                                                                                                   low funding rounds
                              11                                                                                                  Travel/Rental/Housing has nearly doubled the
                              10
                                                                                                                                   number of financing rounds compared to 2013
                                                                                                                                  Transactions/ Auctions/Payments has increased
                               9
                                                                                                                                   the total number of financing rounds as well as
                               8                                                                                                   the average size of the round
                               7                                                                                                  Financial investors have often invested in
                               6                                                                                                   syndicates to minimize their risk
                                                                                  Transactions/ Auctions/
                               5                                                  Payments3)                                      Compared to last year, a significant increase in
                                                Jobs/Classifieds/                                                                  average deal value can be seen for nearly every
                               4                Dating2)                                                                           sub-sector
                               3
                                                                    Travel/ Rental/ Housing4)                                     In addition to generally larger investments, the
                               2
                                                                                                                                   increase has been driven by large fundings for
                               1                                                                                                   companies such as Delivery Hero or Adyen
                               0
                                   0      20   40      60   80       100    120     140    160      180     200   220

                                                                                                Number of Transactions      1)     64 placements undisclosed, average volume refers to remaining 131 placements
                                                                                                                            2)     7 placements undisclosed, average volume refers to remaining 36 placements
                                   2013         2014                                                                        3)     45 placements undisclosed, average volume refers to remaining 117 placements
                                                                                                                            4)     27 placements undisclosed, average volume refers to remaining 59 placements

                                                                                                              CatCap GmbH | M&A Report: The European Internet Industry 2014| 36
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