Software and IT Services - Q2/21 Sector Report Digital Technology Sector Focus: Application Software
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Q2/21 Sector Report Digital Technology Software and IT Services Sector Focus: Application Software
Agenda
1. Introduction Page 3
2. Application Software Market
− Overview Page 5
− Valuation and M&A activity Page 10
3. IT / Software Market
− Overview Page 17
− Valuation and M&A activity Page 20
4. Introduction to IMAP and relevant expertise Page 29
5. Appendix
− Application SW: Transactions Page 34
− IT / Software: Transactions Page 37
Introduction
▪ We are pleased to present the IT/ Software Report Q2 2021. This report provides insights and analysis on
current market trends, valuation developments as well as M&A dynamics within the Software and IT Services
sector in Q2 2021
▪ This edition includes a special sector focus on Application software. It provides an overview of market
segments, trends and players in Application software as well as data on recent M&A activity and valuations
− Overall, the horizontal application software sector has developed positively over the last twelve months; in
particular, the segments "Tele- / Communication" and "SCM / Logistics" have performed strongly during the
Covid pandemic. More traditional segments such as "ERP" have moved rather sideways
− Among vertical application software segments, "Energy / Mining" performed particularly well due to the
accelerated digitization processes. "Healthcare" and "Finance / Insurance" recorded moderate growth,
while "Real Estate / Construction" lost ground due to the implications of the Covid pandemic
Digital technology team
Dr. Carsten Lehmann Andreas Widholz Nils Keller Martin Michalek Lennart Hunold
Managing Partner Partner Director Vice President Associate
Agenda
1. Introduction Page 3
2. Application Software Market
− Overview Page 5
− Valuation and M&A activity Page 10
3. IT / Software Market
− Overview Page 17
− Valuation and M&A activity Page 20
4. Introduction to IMAP and relevant expertise Page 29
5. Appendix
− Application SW: Transactions Page 34
− IT / Software: Transactions Page 37
Introduction to the Application Software Market
Horizontal vs. vertical application software segmentation
Horizontal Application Software Vertical Application Software
▪ Horizontal application software is used across industries and generally ▪ Vertical application software is industry-specific and focused on
does not require market or industry specific customization. Examples of particular market requirements. Examples of vertical application
horizontal application software include communication, ERP, HCM, SCM, software domains include energy, finance, telecommunications,
PLM or CRM applications healthcare, automotive, manufacturing, etc.
▪ Progressive digitization as well as efficiency enhancement and cost- ▪ Drivers and trends of vertical application software cannot be generalized
cutting measures have contributed to strong growth for the horizontal across industries. Some industries such as the healthcare software sector
application software market in recent years, reflected in high valuations have benefited from the Covid pandemic, while real estate management
and favorable stock performance software did not record stock growth during the last twelve moths. In
addition to global megatrends such as advancing digitization, industry-
▪ The universe of horizontal application software is not limited to the
specific drivers and trends have a major influence on the respective
segments shown in this report. A brief overview of four selected sub-
vertical segment
segments reflects the dynamics of this multi-faceted market:
▪ This report covers 4 vertical industries, representing only a fraction of
CRM: Companies providing application software designed to
the vertical software market:
systematically manage relationships and interactions with existing
and potential customers Energy / Mining: Companies offering software collecting and
applying energy data for reporting, monitoring and engagement
ERP: Companies offering application software that supports all purposes
processes such as procurement, production, sales or plant
management within organizations Finance / Insurance: Companies providing software dealing with
accounting, monetary transactions, and insurance
Tele- / Communication: Companies providing application software
Healthcare: Companies that provide software used in a medical
that enables the exchange of messages in text, audio and / or
context
video formats between computers or users
Real Estate / Construction: Companies providing software for the
SCM / Logistics: Companies that offer software executing supply real estate and construction sector
chain transactions, managing supplier relationships and controlling
logistic processes
July 2021 5
Application Software Universe
Overview of selected public horizontal and vertical application software players
CRM ERP Tele- / Communications SCM / Logistics
Mcap: EV/Rev: EV/EBITDA: Mcap: EV/Rev: EV/EBITDA: Mcap: EV/Rev: EV/EBITDA: Mcap: EV/Rev: EV/EBITDA:
€1,271m 10.4x 31.7x €1,893m 5.4x 15.2x €3,055m 5.2x 21.7x €3,020m 9.1x 32.7x
Energy Finance / Insurance Healthcare Real Estate / Construction
Mcap: EV/Rev: EV/EBITDA: Mcap: EV/Rev: EV/EBITDA: Mcap: EV/Rev: EV/EBITDA: Mcap: EV/Rev: EV/EBITDA:
€2,252m 6.4x 23.4x €3,428m 4.5x 19.2x €1,862m 2.6x 15.8x €15,118m 13.5x 51.4x
Source: CIQ Note: All numbers are median figures based on 2021e July 2021 6
Application Software Trends
Horizontal application software trends & drivers
CRM ERP
▪ Increasing applications of artificial Global market volume (In EUR bn) ▪ Rising demand for cloud-based ERP Global market volume (In EUR bn)
intelligence within CRM (e.g., applications decentralizing data
identification of patterns in CAGR: 10.6% access CAGR: 9.8%
customer behavior) 82,0
▪ Two-tier ERP allows companies to 77,1
▪ Growing demand for mobile access deploy different ERP systems at the
to complex CRM software driven by group level than at the subsidiary
increased adoption of level 40,1
40,4
telecommuting ▪ ERP App Stores consolidate all
▪ Augmented and Virtual Reality business applications in one place
enables customers to experience providing quick and easy access
products remotely before the
purchase decision
2021 2028 2021 2028
Tele- / Communications SCM / Logistics
▪ The expansion of 5G deployment Global market volume (In EUR bn) ▪ Improved supply chain visibility Global market volume (In EUR bn)
facilitates the use of highly data- allows businesses to precisely
CAGR: 5.4% CAGR: 17.3%
demanding applications like the monitor performance and increase
Internet of Things (IoT) 2.095,1 agility 13,7
▪ Intelligent Automation simplifies the ▪ Integration of blockchain technology
handling of operational tasks 1.450,5 in SCM enables companies to gain
guaranteeing shorter waiting periods real-time ledger of transactions for
for customers and lower costs for all participants of their network
businesses 4,5
▪ IoT applications enhance supply
▪ Network Virtualization allows chain transparency and improve the
adaptation to growing resource efficiency of inventory management
requirements by replacing hardware
elements with software 2021 2028 2021 2028
Source: Grand View Research, Allied Market Research July 2021 7
Application Software Trends
Vertical application software trends & drivers
Energy Financial
▪ Energy management software Global market volume (In EUR bn) ▪ IoT allows banks and financial Global market volume (In EUR bn)
enables customers to monitor institutions to prevent fraud and CAGR: 7.9%
energy consumption more precisely CAGR: 17.4% increase operational efficiency
through immense data-processing 138,7
▪ The Internet of Energy (IoE) allows 99,6
energy production to move forward capacity
more efficiently and cleanly with the ▪ Cybersecurity applications not only 94,9
least amount of waste keep customer data secure but also
▪ Energy-as-a-Service (EaaS) uses a 44,6 help businesses comply with finance
combination of AI and IoT to allow regulatory standards
for the transition from selling ▪ Cloud computing stores and enables
electricity to selling services such as instant access to data and provides
optimization of production on-demand availability of computer
2020 2025 resources 2020 2025
Healthcare Real Estate / Construction
▪ Telemedicine enables patients to Global market volume (In EUR bn) ▪ Smart homes are systems of sensor- Global market volume (In EUR bn)
consult medical professionals equipped devices gathering and
remotely via virtual appointments CAGR: 10.7% analyzing data to provide a more CAGR: 10.5%
▪ Augmented and virtual reality allows convenient customer experience
104,28
better understanding of data and ▪ Property Management Software
more realistic surgical training provides real estate owners a
centralized database that can store 20,52
▪ Wearable technology with 62,73
companion apps enables tracking several management tools
12,45
and monitoring of the personal ▪ Increasing popularity of construction
health record management software and the
application of lean management to
meet requirements for large scale
2020 2025 projects and to reduce design time 2021 2025
Source: Grand View Research, Business Wire July 2021 8Agenda
1. Introduction Page 3
2. Application Software Market
− Overview Page 5
− Valuation and M&A activity Page 10
3. IT / Software Market
− Overview Page 17
− Valuation and M&A activity Page 20
4. Introduction to IMAP and relevant expertise Page 29
5. Appendix
− Application SW: Transactions Page 34
− IT / Software: Transactions Page 37Stock Performance – Horizontal
Segmented, indexed stock performance1
Q2 2020 – Q2 2021 indexed stock performance
240%
220%
200%
180%
160%
140%
120%
100%
80%
60%
Date Aug-20 Sep-20 Nov-20 Dec-20 Jan-21 Mar-21 Apr-21 Jun-21
CRM / Marketing ERP Tele- / Communication SCM / Logistics
LTM +23% +10% +45% +34%
Growth
1) Weighting of shares based on market capitalization July 2021 10Application Software Valuation – Horizontal (I/II)
Median segment valuation metrics in 2021E
EV/Revenue 2021E Revenue growth 2021E
10,4x
20%
9,1x
16%
5,4x 5,2x 11%
4%
CRM / Marketing ERP Tele- / Communication SCM / Logistics CRM / Marketing ERP Tele- / Communication SCM / Logistics
EV/EBITDA 2021E EBITDA-margin 2021E
31,7x 32,7x 27%
25%
22%
21,7x
15,2x 14%
CRM / Marketing ERP Tele- / Communication SCM / Logistics CRM / Marketing ERP Tele- / Communication SCM / Logistics
July 2021 11Application Software Valuation – Horizontal (II/II)
Development of the median segment valuation metrics between 2021E and 2023E
EV/Revenue 2021E-2023E Revenue growth 2021E-2023E
10,4x
9,1x
20%
8,5x 19% 19%
8,2x 16%
7,3x 15%
7,0x 5,2x 14%
5,4x 5,1x 4,6x 11% 11%
4,7x 10%
4,0x 8%
6%
4%
CRM / Marketing ERP Tele- / Communication SCM / Logistics CRM / Marketing ERP Tele- / Communication SCM / Logistics
2021E 2022E 2023E 2021E 2022E 2023E
EV/EBITDA 2021E-2023E EBITDA-margin 2021E-2023E
31,7x 32,7x 27% 28% 27%
25% 28%
30,9x
27,9x 29,7x 22% 24% 24%
26,4x 21,7x 23%
20%
19,6x
16%
15,1x 14%
15,2x 15,8x
14,1x
CRM / Marketing ERP Tele- / Communication SCM / Logistics CRM / Marketing ERP Tele- / Communication SCM / Logistics
2021E 2022E 2023E 2021E 2022E 2023E
Source: CIQ July 2021 12Stock Performance – Vertical
Segmented, indexed stock performance1
Q2 2020 – Q2 2021 indexed stock performance
160%
140%
120%
100%
80%
60%
Date Aug-20 Sep-20 Nov-20 Dec-20 Feb-21 Mar-21 Apr-21 Jun-21
Energy / Mining Finance / Insurance Healthcare Real Estate / Construction
LTM +32% +8% +12% -2%
Growth
1) Weighting of shares based on market capitalization July 2021 13Application Software Valuation – Vertical (I/II)
Median segment valuation metrics in 2021E
EV/Revenue 2021E Revenue growth 2021E
13,5x
19%
12%
6,4x 9%
4,6x
2,5x 4%
Energy / Mining Finance / Insurance Healthcare Real Estate / Energy / Mining Finance / Insurance Healthcare Real Estate /
Construction Construction
EV/EBITDA 2021E EBITDA-margin 2021E
47,6x 25% 25%
22%
20%
23,4x
18,3x
15,9x
Energy / Mining Finance / Insurance Healthcare Real Estate / Energy / Mining Finance / Insurance Healthcare Real Estate /
Construction Construction
July 2021 14Application Software Valuation – Vertical (II/II)
Development of the median segment valuation metrics between 2021E and 2023E
EV/Revenue 2021E-2023E Revenue growth 2021E-2023E
13,5x
19% 19%
11,3x 17%
9,7x
6,4x 12%
10% 9% 9%
5,6x 8%
8% 7% 7%
4,9x 4,6x 4,3x 4,1x
2,5x
2,1x 4%
2,0x
Energy / Mining Finance / Insurance Healthcare Real Estate / Energy / Mining Finance / Insurance Healthcare Real Estate /
Construction Construction
2021E 2022E 2023E 2021E 2022E 2023E
EV/EBITDA 2021E-2023E EBITDA-margin 2021E-2023E
47,6x 29%
25% 27% 25% 26%
42,4x 22% 25%
23% 22%
22%
20% 20%
23,4x 30,8x
22,5x 16,8x 15,9x
17,6x 18,3x
15,3x 12,1x
10,7x
Energy / Mining Finance / Insurance Healthcare Real Estate / Energy / Mining Finance / Insurance Healthcare Real Estate /
Construction Construction
2021E 2022E 2023E 2021E 2022E 2023E
Source: CIQ July 2021 15Agenda
1. Introduction Page 3
2. Application Software Market
− Overview Page 5
− Valuation and M&A activity Page 10
3. IT / Software Market
− Overview Page 17
− Valuation and M&A activity Page 20
4. Introduction to IMAP and relevant expertise Page 29
5. Appendix
− Application SW: Transactions Page 34
− IT / Software: Transactions Page 37Introduction | Executive Summary to the IT/Software Market
Overview of IMAP Germany‘s Software Industry Report
Introduction Executive Summary
▪ This section of the digital technology report provides an overview on ▪ European M&A deal count continued to grow in Q2-2021 with 276 deals,
valuation developments as well as M&A dynamics within certain sub-sectors representing a +81% y-o-y increase. Germany also saw a high number
of the IT / Software space which we have decided to summarize as follows: deals since 2018 with 40 deals in Q2-2021, a slight decrease compared to
Infrastructure and Cloud (Infrastructure): companies providing 43 deals in Q1-2021.
hardware, software or services related to running and maintaining ▪ European deal value increased to 16bn EUR in Q2, which corresponds to
infrastructure and cloud environments a fourfold increase compared to the same period a year ago. With
Software as a Service (SaaS): companies following a subscription- c. 2.2bn EUR deal value in Q2-2021, German deal value decreased
based business model compared to the previous quarter, but still well above the average since
2018
Application software (Application): companies providing application
software ▪ Average deal sizes in Europe in Q2 2021 amounted to c. 58m EUR, and c.
54m EUR in Germany
SW development: companies active in software development, either
as service or technology providers ▪ Transaction valuations slightly decreased in Q2-2021, reflecting slightly
lower overall valuations since the beginning of the Covid Crisis.
IT service: companies providing a broader spectrum of IT services Transaction valuations with 3.7x revenues and 14.8x EBITDA in Q2 2021
Conglomerates: a collection of software and IT companies with a are in line with the average of the last 5 years
market cap. in excess of USD100bn ▪ Stock prices of Technology companies continued to increase in Q2 2021,
▪ IMAP Technology sector experts have advised on 170+ deals since 2015. with Application Software (+11%) and Software Development (+10%)
Largest sub-sectors are Software, IT Service & Consulting, showing the strongest quarterly growth
Telecommunication Services and Internet Software & Services ▪ Compared to previous quarter, relative valuations of listed companies
▪ In 2020, IMAP advised on 30 technology deals, representing 14% of IMAP saw an increase across all subsegments in terms of EV/EBITDA
total deal volume and thus the largest share of any industry valuations, except IT Service remaining stable; a similar picture emerges
for EV/Revenue multiples
▪ Total reported deal value was approx. 2.9bn USD, leading to an average
deal size of approx. 90 mn USD ▪ The IMAP Cross segment index grew by +5% in Q2 2021. Slowing stock
price increases also affected overall index growth, with MSCI World,
▪ One third of transactions were cross-border. More than 75% of target TECDAX and NASDAQ moderately increasing between 3% to 7% in Q2
companies were European and c. 20% North American 2021
▪ The Technology sector is covered by c. 80 IMAP Professionals with strong
networks and a global reach
July 2021 17Key Trends & Drivers
Global trends and drivers boost the software/ IT sector
+22% global Cloud spending forecasted for 2021 +10% expected CAGR in custom software development (2020-2025)
Global end-user spending on public cloud services surged in 20/21 due to the Software development is about integrating top-notch technologies and applying
implications of the Covid-19 pandemic; rising demand for emerging the latest development methods to meet customer requirements and maintain
technologies such as containerization, virtualization, and edge computing as a competitive edge. In 2021, the industry is mainly driven by rising demand for
well as increasing threats from cyberattacks and the resulting rise in the advanced cybersecurity programs, artificial intelligence for improved customer
importance of data security. experience and increasing use of IoT devices.
Cloud computing revenue (EUR bn)
Most widely utilized programming languages (2020)
CAGR: 20%
276 330 JavaScript 68%
217 227
129 167 HTML/CSS 63%
95 110
SQL 55%
Python 44%
2015 2016 2017 2018 2019 2020 2021E 2022P
Java 40%
+19% global SaaS revenue growth between 2020 and 2021 +9% global IT service spending projected for 2021
The benefits of SaaS, such as increased agility, simplified access from any The Covid pandemic has boosted digital acceptance and the transition to the
device, inherent scalability, or increased cost efficiency enable innovative cloud, driving the development of new products and services.
companies to extend their competitive advantage and to drive performance. Growth in the IT services sector is estimated to be between 8-9% p.a. in the
Demand for SaaS remains high and is driven by current trends such as AI, coming years, compared to 4-6% before COVID and will move towards digital
centralized analytics and vertical SaaS. services.
Global SaaS revenue (EUR bn) Global IT services spending (EUR bn)
CAGR: 21% CAGR: 4%
929 978 1.061
121 780 805 824 842 900
85 85 102
71
32 40 49
2015 2016 2017 2018 2019 2020 2021E 2022P 2015 2016 2017 2018 2019 2020 2021E 2022P
Source: Gartner, Statista July 2021 18Agenda
1. Introduction Page 3
2. Application Software Market
− Overview Page 5
− Valuation and M&A activity Page 10
3. IT / Software Market
− Overview Page 17
− Valuation and M&A activity Page 20
4. Introduction to IMAP and relevant expertise Page 29
5. Appendix
− Application SW: Transactions Page 34
− IT / Software: Transactions Page 37Public Company Valuation
Selected public companies by sub-sector
Infrastructure SaaS Application
MCap: EV/Revenue: EV/EBITDA: MCap: EV/Revenue: EV/EBITDA: MCap: EV/Revenue: EV/EBITDA:
EURm 12,765 4.8x 12.4x EURm 8,445 8.2x 23.3x EURm 35,484 9.7x 28.0x
Software Development IT Services Conglomerates
MCap: EV/Revenue: EV/EBITDA: MCap: EV/Revenue: EV/EBITDA: MCap: EV/Revenue: EV/EBITDA:
EURm 24,307 3.6x 15.8x EURm 7,473 1.3x 10.4x EURm 213,250 6.4x 16.3x
Σ MCap: ∅ EV/Revenue 2020: ∅ EV/EBITDA 2020:
XY XY XY
Source: CIQ Development of respective Note: Median figures based on 2021 July 2021 20
=
multiple from Q1 2021 to Q2 2021Stock Performance (I/II)
Segmented, indexed stock performance1
Q2 2020 – Q2 2021 indexed stock performance
160%
150%
140%
130%
120%
110%
100%
90%
80%
Date Aug-20 Sep-20 Nov-20 Dec-20 Feb-21 Mar-21 Apr-21 Jun-21
Infrastructure SaaS Application Software Developer IT Services Conglomerates
Performance
LTM +13% +19% +28% +30% +18% +33%
Q1 +5% +8% +11% +10% +4% +8%
Source: CIQ 1) Weighting of shares based on market capitalization July 2021 21Stock Performance (II/II)
Performance of the cross-segment index1 by our definition (“IMAP”) against key market indices
Q2 2020 – Q2 2021 indexed stock performance
200%
180%
160%
140%
120%
100%
80%
Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21
Cross segment index MSCI World TECDAX NASDAQ
Performance
LTM +33% +36% +19% +41%
Q1 +5% +7% +3% +7%
Source: CIQ 1) Weighting of shares based on market capitalization July 2021 22Segment Valuation (I/IV)
Median segment valuation metrics in 2021E
EV/Revenue 2021E Revenue growth 2021E
13%
12% 12%
9,7x
10%
8,2x
8%
6,4x
7%
4,8x
3,6x
1,3x
Infrastructure & SaaS Application Software IT Service Conglomerates Infrastructure & SaaS Application Software IT Service Conglomerates
Cloud Developer Cloud Developer
EV/EBITDA 2021E EBITDA-margin 2021E
28,0x 37% 38%
23,3x 33%
15,8x 16,3x 21% 20%
12,4x
10,4x 14%
Infrastructure & SaaS Application Software IT Service Conglomerates Infrastructure & SaaS Application Software IT Service Conglomerates
Cloud Developer Cloud Developer
Source: CIQ July 2021 23Segment Valuation (II/IV)
Development of the median segment valuation metrics between 2021E and 2023E
EV/Revenue 2021E-2023E Revenue growth 2021E-2023E
9,7x 15%15%
13% 12% 12% 12%
8,2x 7,7x 10% 10% 10%
7,1x 6,4x 10% 9%
7,0x 5,8x 8%
4,8x 6,0x 8%
7% 7%
4,4x 3,6x 5,3x 7% 6% 6%
4,2x 3,2x
3,0x 1,3x
1,2x
1,2x
Infrastructure & SaaS Application Software IT Service Conglomerates Infrastructure & SaaS Application Software IT Service Conglomerates
Cloud Developer Cloud Developer
2021E 2022E 2023E 2021E 2022E 2023E
EV/EBITDA 2021E-2023E EBITDA-margin 2021E-2023E
38%
37% 36% 36% 38% 37%
37%
29,3x 28,0x 34%
33%
24,6x
23,3x 24,2x
21,0x 21%
15,8x 16,3x 22% 20% 20%
21% 20%
12,4x 14,7x 14,9x 14%
11,4x 13,8x 10,4x 13,5x 15%16%
10,9x 9,7x
9,3x
Infrastructure & SaaS Application Software IT Service Conglomerates Infrastructure & SaaS Application Software IT Service Conglomerates
Cloud Developer Cloud Developer
2021E 2022E 2023E 2021E 2022E 2023E
Source: CIQ July 2021 24Segment Valuation (III/IV)
5-year historical development of median NTM EV/EBITDA multiple
Infrastructure Software Developer
15,0x 20,0x
13,0x Ø 11,7x
15,0x Ø 11,9x
11,0x
10,0x
9,0x
7,0x 5,0x
5,0x 0,0x
Jun. 16 Jun. 17 Jun. 18 Jun. 19 Jun. 20 Jun. 21 Jun. 16 Jun. 17 Jun. 18 Jun. 19 Jun. 20 Jun. 21
EV/EBITDA Median EBITDA EV/EBITDA Median EBITDA
SaaS IT Service
40,0x 15,0x
Ø 27,4x Ø 9,6x
30,0x
10,0x
20,0x
5,0x
10,0x
0,0x 0,0x
Jun. 16 Jun. 17 Jun. 18 Jun. 19 Jun. 20 Jun. 21 Jun. 16 Jun. 17 Jun. 18 Jun. 19 Jun. 20 Jun. 21
EV/EBITDA Median EBITDA EV/EBITDA Median EBITDA
Application Conglomerates
40,0x 30,0x
30,0x Ø 22,0x Ø 18,5x
20,0x
20,0x
10,0x
10,0x
0,0x 0,0x
Jun. 16 Jun. 17 Jun. 18 Jun. 19 Jun. 20 Jun. 21 Jun. 16 Jun. 17 Jun. 18 Jun. 19 Jun. 20 Jun. 21
EV/EBITDA Median EBITDA EV/EBITDA Median EBITDA
Source: CIQ July 2021 25Segment Valuation (IV/IV)
Correlation between EV/Revenue 2022E and revenue growth 2022E
Infrastructure Software Developer
10,0x 10,0x
GLOB
ENV ZEN BLKB INFY
EV/2022E Revenue
EV/2022E Revenue
5,0x BOX ADBE PSTG 5,0x CTSH ACN
DOCU PRGS EPAM
NFLX CRM DBX
WDAY PFPT HCLTECH
GWRE
QADA GIB.A NRO
0,0x 0,0x
-5,0% 0,0% 5,0% 10,0% 15,0% -5,0% 0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0%
2022E Revenue Growth 2022E Revenue Growth
SaaS IT Service
30,0x 8,0x
25,0x DOCU
6,0x TCS
EV/2022E Revenue
EV/2022E Revenue
20,0x GWRE ADBE INFY
DBX PFPT WDAY GIB.A
15,0x 4,0x CAP
IBM ACN
D6H
10,0x QADA ZEN SOP CTSH
NFLX CRM 2,0x ATO
5,0x BLKB NTT DVT COK ADN1
BC8
0,0x
ENV ZUO PSTG 0,0x
IDR
BOX CCC AEIN
0,0% 10,0% 20,0% 30,0% 40,0% 50,0% 0,0% 4,0% 8,0% 12,0% 16,0%
(2,0x)
2022E Revenue Growth 2022E Revenue Growth
Application Conglomerates
20,0x 15,0x
15,0x ANSS ADBE
EV/2022E Revenue
EV/2022E Revenue
10,0x MSFT
HEXA B INTU GOOG.L
DSY MSFT WDAY IBM
10,0x
SNPS PEGA AAPL FB
5,0x
5,0x SAP ORCL QADA CSU ORCL
ADP AMZN
OTEX PSAN INTC CSCO
0,0x 0,0x
0,0% 5,0% 10,0% 15,0% 20,0% 25,0% -5,0% -1,0% 3,0% 7,0% 11,0% 15,0% 19,0% 23,0% 27,0%
2022E Revenue Growth 2022E Revenue Growth
Source: CIQ July 2021 26Deal Dashboard
Application and system software market
Selected European transactions European M&A value in EUR bn1 German M&A value in EUR bn Selected German transactions
EV/ 15 16 4,0 EV/
Buyer Target EV 3,3 Buyer Target EV
EBITDA 12 12 EBITDA
2,3 2,5 2,2
8 8 7 8 7
5 1,4 1,4
€3,183m n.a. 4 4 4 €9,012m n.a.
0,0 0,2 0,3 0,4 0,4 0,1 +others
€1,800m n.a. Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 €2,454m n.a.
+others
18 18 18 19 19 19 19 20 20 20 20 21 21 18 18 18 19 19 19 19 20 20 20 20 21 21
€1,395m 31.8x €2,219m 35.5x
European M&A Deal Count1 German M&A deal count
€1,000m n.a. €140m n.a.
265 267 276
184
162 152 161 183 152 196
€828m n.a. 135 170 151 43 40 €95m n.a.
26 26 36 32 33
11 25 24 21
22 18
€559m n.a. €50m n.a.
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
€415m n.a. 18 18 18 19 19 19 19 20 20 20 20 21 21 18 18 18 19 19 19 19 20 20 20 20 21 21 €22m n.a.
Quarterly multiples between 2017 and Q1 2021 Europe2
24.7x
18.9x
16.4x 17.2x 15.0x
15.7x 15.4x 15.3x 15.8x 16.1x 14.9x 15.2x 15.6x 15.1x 14.4x
13.6x 14.6x 16.6x
16.0x 14.0x 14.8x
13.3x 11.9x 11.3x 14.7x 11.5x 11.5x
10.6x 11.0x 10.4x
11.7x 8.9x
4.6x 4.7x 3.7x
1,9x 3.0x 2.5x 2.4x 2.4x 2.7x 3.2x 3.1x 2.4x 2.8x 3.4x 3.0x 2.6x 2.9x 2.9x
2.3x 2,2x 2.1x 2,1x 1.9x 2.3x 2.3x
2.4x 2.3x 2.9x 3.6x 3.0x 3.3x
2.2x
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2015 2016 2017 2018 2019 2020 2021
EV/Revenue EV/EBITDA Moving Average EV/EBITDA Moving Average EV/Revenue
Source: Merger Market 1) Excl. German Transactions July 2021 27
2) Adjusted for extraordinary outliersAgenda
1. Introduction Page 3
2. Application Software Market
− Overview Page 5
− Valuation and M&A activity Page 10
3. IT / Software Market
− Overview Page 17
− Valuation and M&A activity Page 20
4. Introduction to IMAP and relevant expertise Page 29
5. Appendix
− Application SW: Transactions Page 34
− IT / Software: Transactions Page 37IMAP is specialized on mid-cap M&A transactions for privately owned companies
With > 200 transactions annually, we are one of the leading global M&A organizations
Our Core Values
Global M&A- > 450 professionals Ø > 200 deals p.a. deal value p.a. Execution
Organization thereof approx. globally globally
with 60 offices 40 in Germany c. EUR 10 bn
Ø 20-25 deals p.a.
in 43 countries in Germany
Ø deal value
c. 80% sell-side c. EUR 50 m
Dedication
24
Years
Informality
Successful in the Managed by International Regularly ranked
German market partners with sector teams among Top 10
since 1997 strong deal connected via M&A advisory
experience, who global IT platform firms
are only responsible
Talent
to the client
July 2021 29IMAP International
Approx. 65 cross-border transactions with over 450 professionals in 43 countries completed in 2020
Transactions by sectors (2020 - # Deals: 218) Global partnership
Technology ▪ Access to local knowledge and contacts in all
others important international markets
14% Industrials
21% ▪ Proven collaboration routines according to high
Consumer & Retail performance standards
12% ▪ International sector- and project teams
Business Services
4% ▪ Integrated IT platform for collaboration and as
Healthcare knowledge pool for all sector specific projects
5%
9% Food & Beverage ▪ Globally rotating IMAP conferences & symposia
6%
Transport & Logistics ▪ Access to all relevant national and international
6% 9% databases
7% 7% Materials, Chemicals & Mining
Building Products
Automotive
International presence Publications
Europe & Africa
▪ 24 offices in the EU Q1/21 Sector Report Q4/20 Sector Report
IT / Software
▪ 1 office each in UK, Serbia and Bosnia and Digital Technology
IMAP Herzegovina
Germany
▪ 9 offices in Africa
▪ over 280 M&A professionals
North and South America
▪ 17 offices in USA, 2 offices in Canada
▪ 1 office each in Argentina, Brazil, Chile, Colombia, 2021 Sector Report
HEALTHCARE
Mexico and Peru
▪ over 170 M&A professionals
Asia
▪ 2 offices in Japan, 1 office each in China, India and
Thailand
▪ over 50 M&A professionals
July 2021 30IMAP Global Technology Team
Globally active with experienced sector experts
International sector coverage IMAP Technology Deal Statistics
170+ deals in the technology sector
since 2015
Expert team
Expert team Germany Expert team Ø 25 deals p.a.
North America UK & Ireland
>30% cross-border
> 70% European targets
# dealmakers: # dealmakers:
10
# dealmakers: 6
14 $105mn avg. deal size in 2020
Expert team Expert team
Deal split by Technology sub-sector
South America Nordics
Electronic Equipment
Expert team Expert team Expert team Expert team 13 & Parts
France BeNeLux S/E Europe Asia 46 20 Internet Software &
# dealmakers: # dealmakers: Services
IT Services &
9 4
Consulting
33 Software
24
# dealmakers: # dealmakers: # dealmakers: # dealmakers:
3 7 13 2 36 Telecommunications
Services
IMAP Germany Technology Team
Dr. Carsten Lehmann Andreas Widholz Nils Keller Martin Michalek Lennart Hunold
Managing Director Partner Director Vice President Associate
carsten.lehmann@imap.de andreas.widholz@imap.de nils.keller@imap.de martin.michalek@imap.de lennart.hunold@imap.de
July 2021 31IMAP IT/Software Deals
Selected IMAP international deals since 2018
Private Investors
Acquired Investment Acquired Majority Acquired Majority Has entered into a
Acquired 100% Acquired 100% Acquired 100% Acquired 100%
Interest Control Shares Partnership
Advisor to tesa scribos Advisor to Datac Advisor to Pharmagest Advisor to CEMA Advisor to Adelis Advisor to EXA Advisor to NBD Biblion Advisor to raynet
Acquired Majority Has been acquired in
Acquired 100% Acquired 100% Acquired 100% Acquired 100% Acquired 100% Acquired 100%
Control an MBO from
Advisor to Cyfrowy Advisor to Canorama Advisor to Inovatec Advisor to StratoZen Advisor to Vitec Advisor to Indofin Advisor to ETC Advisor to RS
A Portfolio Company of
Acquired Investment Acquired a Minority Acquired Majority
Acquired 100% Strategic investment Acquired 100% Acquired 100%
Interest stake Control
Acquired 100%
Advisor to Catalysts Advisor to Promedico Advisor to AOE Advisor to Maximum Advisor to Cedacri Advisor to Chatmeter Advisor to EI Towers Advisor to neurio
Acquired a Majority
Acquired 50% Acquired 100% Acquired 100% Acquired 100% Acquired 100% Acquired 100% Acquired 100%
Stake
Advisor to Lomitel Advisor to INOBAS Advisor to Teletronika Advisor to SemVox Advisor to Shoper Advisor to Highland Advisor to Ametras Advisor to Awetis
July 2021 32Agenda
1. Introduction Page 3
2. Application Software Market
− Overview Page 5
− Valuation and M&A activity Page 10
3. IT / Software Market
− Overview Page 17
− Valuation and M&A activity Page 20
4. Introduction to IMAP and relevant expertise Page 29
5. Appendix
− Application SW: Transactions Page 34
− IT / Software: Transactions Page 37Selected Application Software Transactions (I/II)
European transactions in the last 6 months
EV EV EV EV
Segment Date Target company Country Buyer Target Description mEUR' Revenue EBITDA EBIT
Application Germany-based provider of technical
(horizontal; 10.06.2021 Germany enterprise resource planning (ERP) software 222.6 8.7x 35.5x 71.2x
RIB Software SE
ERP) solutions
(9.09% Stake) Schneider Electric SE
Application UK-based company that operates a
(vertical; 03.06.2021 United Kingdom subscription based mobile healthcare 3,182.6 48.8x n.a. n.a.
Babylon Healthcare Services Alkuri Global Acquisition
healthcare) application
Limited Corp.
Application France-based B2B provider of software for
(vertical; 03.06.2021 France managing financial, tax and regulatory 50.0 2.5x n.a. n.a.
Sagard; ISAI Gestion;
finance) information
Invoke Bpifrance
Application
Germany-based provider of mobile apps to
(vertical; 01.06.2021 Germany 531.6 21.0x n.a. n.a.
Eurazeo; Partners Group compare insurances
insurance)
wefox Germany GmbH Holding; LGT
Application Germany-based provider of picture archiving
(vertical; 01.06.2021 Germany and communication systems (PACS) and 50.0 2.7x n.a. n.a.
healthcare) healthcare content management solutions
VISUS Health IT GmbH CompuGroup Medical SE
Application
Sweden-based healthcare practice
(vertical; 25.05.2021 Sweden 10.6 3.8x 53.4x n.a.
management software firm
healthcare)
Metodika AB Carasent ASA
Application
France-based privately owned medical image
(vertical; 11.05.2021 France 100.0 6.7x 14.3x n.a.
software management company
healthcare)
EDL Abenex Capital SA
Application UK-based provider of patient flow
(vertical; 15.04.2021 United Kingdom management software for the healthcare 6.1 0.5x n.a. n.a.
healthcare) sector
ExtraMed Limited Alcidion Group Limited
Application
(horizontal; UK-based fleet telematics and software
30.03.2021 United Kingdom 70.3 n.a. 15.0x n.a.
telecom- Bridges Fund provider for connected fleet technology
munication) Matrix Telematics Limited Management Ltd.
Application Sweden-based provider of software solutions
(vertical; 29.03.2021 Sweden for the financial industry in the areas of 2,600.0 12.5x 24.7x 50.5x
Broadridge Financial
financial) advanced trading and connectivity
Itiviti Group AB Solutions, Inc.
July 2021 34Selected Application Software Transactions (II/II)
European transactions in the last 6 months
EV EV EV EV
Segment Date Target company Country Buyer Target Description mEUR' Revenue EBITDA EBIT
Application
US-based provider of logistics supply chain
(vertical; 26.03.2021 USA 380.0 3.6x n.a. n.a.
execution software solutions
SCM)
Navis LLC Accel-KKR LLC
Application
US-based company engaged in providing
(vertical; 22.03.2021 USA 3,147.8 n.a. 37.5x n.a.
financial market software solutions
financial)
Calypso Technology, Inc. Thoma Bravo, LLC
Application Netherlands-based provider of enterprise
(horizontal; 22.03.2021 Netherlands resource planning (ERP) and financial 1,678.8 4.1x 15.3x n.a.
TA Associates; Partners
ERP) management software
UNIT4 N.V. Group Holding
Application
Belgium-based provider of big data
(horizontal;
17.03.2021 Belgium applications and software for marketing, sales 10.4 2.1x 8.0x n.a.
telecom- Seamless Distribution
and distribution networks of telecom operators
munication) Riaktr Systems AB
Application UK-based software company providing
(horizontal; 03.03.2021 United Kingdom solutions enhancing digital customer 46.5 11.8x n.a. n.a.
Gamma Communications
CRM) experiences
Mission Labs Limited plc
Application UK-based company that develops and
(vertical; 01.03.2021 United Kingdom distributes laboratory informatics software 9.8 3.1x n.a. n.a.
The Edge Software
healthcare) solutions for the pharmaceutical sector
Consultancy Ltd Instem PLC
Application US-based provider of enterprise resource
(horizontal; 24.02.2021 USA planning (ERP) software for media, broadcast 4.9 0.7x n.a. 12.1x
Xytech Systems
ERP) and transmission businesses
VizuAll Inc Corporation
Application Norway-based company offering personnel
(vertical; 15.02.2021 Norway and material logistics software and related 155.0 3.1x n.a. n.a.
TietoEVRY (oil and gas Quorum Business
energy) services for the oil and gas industry
software business) Solutions, Inc.
Application
Sweden-based company engaged in providing
(vertical; 15.02.2021 Sweden 14.9 1.8x 15.0x n.a.
software solutions for emergency response
healthcare)
Carmenta Public Safety AB CSAM Health Group AS
Application
Switzerland-based company that develops and
(vertical; 29.01.2021 Switzerland 278.1 3.8x 23.7x n.a.
Avaloq Group AG provides software for core banking
financial)
(14% Stake) JICT Co., Ltd.
July 2021 35Agenda
1. Introduction Page 3
2. Application Software Market
− Overview Page 5
− Valuation and M&A activity Page 10
3. IT / Software Market
− Overview Page 17
− Valuation and M&A activity Page 20
4. Introduction to IMAP and relevant expertise Page 29
5. Appendix
− Application SW: Transactions Page 34
− IT / Software: Transactions Page 37Selected Transactions (I/IV)
Q2 2021 with a focus on European MidCap transactions
EV EV EV EV
Segment Date Target company Country Buyer Target Description mEUR' Revenue EBITDA EBIT
Germany-based company providing IT
IT Service 29.06.2021 Germany consultancy, enterprise management, and big 22.0 n.a. 9.5x n.a.
data analytics services
it-novum GmbH Allgeier SE
UK-based provider of healthcare workforce
management software for workforce rostering,
Application 28.06.2021 United Kingdom 1,130.0 n.a. n.a. n.a.
time and attendance, and associated
Allocate Software Limited RLDatix compliance workflows
Netherlands-based provider of software-as-a-
SaaS 25.06.2021 Netherlands service (SaaS) solutions for companies in the n.a. n.a. n.a. n.a.
cleaning and facility management sector
Leviy B.V. zvoove Group GmbH
Finland-based real estate software-as-a-service
SaaS 25.06.2021 Finland 36.8 4.5x 21.4x n.a.
(SaaS) company
Rapal Oy Orn Software AS
Sweden-based cloud-based open banking
Infrastructure 24.06.2021 Sweden platform enabling banks, fintechs and startups 1,800.0 n.a. n.a. n.a.
to develop data-driven financial services
Tink AB Visa Inc.
Spain-based company providing business
management software for cloud-based CRM,
Application 22.06.2021 Spain n.a. n.a. n.a. n.a.
Primavera Business task management, accounting and client billing
Billage Software, S.L. Software Solutions, S.A. solutions
UK-based IT systems integration company
IT Service 18.06.2021 United Kingdom engaged in providing hardware, software, and n.a. n.a. n.a. n.a.
Inflexion Private Equity
managed services
ANS Group Ltd Partners LLP
Spain-based provider of business software
solutions such as business operating systems
Application 17.06.2021 Spain 120.0 n.a. n.a. n.a.
for invoicing, project management, inventory,
Holded Technologies S.L Visma AS and accounting
Germany-based provider of solutions for
IT Service 10.06.2021 Germany digitized working environments with Microsoft n.a. n.a. n.a. n.a.
datac Kommunikations-
365 and Microsoft Teams
systeme GmbH q. beyond AG
Germany-based provider of technical
Application 10.06.2021 Germany enterprise resource planning software 2219.0 8.7x 35.5x 71.2x
RIB Software SE
solutions
(9.09% Stake) Schneider Electric SE
July 2021 37Selected Transactions (II/IV)
Q2 2021 with a focus on European MidCap transactions
EV EV EV EV
Segment Date Target company Country Buyer Target Description mEUR' Revenue EBITDA EBIT
UK-based company engaged in developing
Application 07.06.2021 United Kingdom software solutions for location and address 12.2 n.a. n.a. n.a.
management
Aligned Assets Limited Idox plc
Italy-based developer of ERP and management
Application 07.06.2021 Italy solutions for companies in the manufacturing, n.a. n.a. n.a. n.a.
service, and banking sectors
Axioma Srl (65% Stake) Zucchetti s.p.a.
Norway-based service provider for cloud-based
IT Service 07.06.2021 Norway n.a. n.a. n.a. n.a.
platforms
The Cloud People AS Longship AS
UK-based company that operates a
Application 03.06.2021 United Kingdom subscription based mobile healthcare 3,182.6 48.8x n.a. n.a.
Babylon Healthcare Services Alkuri Global Acquisition
application
Limited Corp.
UK-based IT managed services provider owning
IT Service 03.06.2021 United Kingdom n.a. n.a. n.a. n.a.
and operating data centers
ONI Ltd Thrive Operations, LLC
Finland-based company providing software-as-
a-service (SaaS) for digital planning, sourcing,
SaaS 01.06.2021 Finland 102.5 11.1x n.a. n.a.
and contract and supplier management
Cloudia Oy Mercell Holding AS solutions
Germany-based service providers and software
Cloudwurdig GmbH; Germany; Germany; developers engaged in supporting customers
Infrastructure 28.05.2021 n.a. n.a. n.a. n.a.
Innovations ON GmbH; Germany with their cloud infrastructure and developing
DI-ON.solutions GmbH NORD Holding cloud-native apps and software
France-based developer of software-as-a-
service (SaaS) platform for small and medium-
SaaS 27.05.2021 France 410.0 n.a. n.a. n.a.
Partech; BlackFin; sized businesses to manage and forecast their
Agicap SAS Greenoaks cashflow
Germany-based provider of software-as-a-
SaaS 27.05.2021 Germany n.a. n.a. n.a. n.a.
service (SaaS) medication safety solutions
Dosing GmbH Dedalus Holding S.p.A.
France-based publisher of the software-as-a-
SaaS 26.05.2021 France service (SaaS) cybersecurity solution protecting n.a. n.a. n.a. n.a.
ISAI Gestion, SAS;
websites from bot traffic
DataDome Elephant Partners
July 2021 38Selected Transactions (III/IV)
Q2 2021 with a focus on European MidCap transactions
EV EV EV EV
Segment Date Target company Country Buyer Target Description mEUR' Revenue EBITDA EBIT
Sweden-based healthcare practice
Application 25.05.2021 Sweden 10.6 3.8x 53.4x n.a.
management software firm
Metodika AB Carasent ASA
Switzerland-based company engaged in
Development 18.05.2021 Switzerland developing software (JSU Automation Suite for n.a. n.a. n.a. n.a.
Jira Workflows)
Beecom AG Eficode Oy
Sweden-based company engaged in software
Development 18.05.2021 Sweden development and consultancy services within n.a. n.a. n.a. n.a.
the medical sector
Health Solutions AB BCB Medical Oy
Denmark-based IT infrastructure provider and
Infrastructure 12.05.2021 Denmark IT integration and consulting services n.a. n.a. n.a. n.a.
specialists
Edgemo A/S Danoffice IT ApS
Ireland-based provider of enterprise safety and
Application 12.05.2021 Ireland (Republic) n.a. n.a. n.a. n.a.
risk management software solutions
OneLook Systems Limited VelocityEHS Holdings Inc.
UK-based provider of cloud-based proprietary
Application 12.05.2021 United Kingdom 14.0 n.a. n.a. n.a.
workflow software and data insights solutions
Terrafirma IDC Limited Dye & Durham Limited
Denmark-based provider of software-based
Application 11.05.2021 Denmark enterprise resource planning and customer n.a. n.a. n.a. n.a.
relationship management business solutions
Bredana Solutions A/S 9altitudes
Sweden-based IT consulting company
Application 11.05.2021 Sweden n.a. n.a. n.a. n.a.
specialized in the field of cloud solutions
Omegapoint Group AB FSN Capital Partners AS
France-based technology company that
provides AI-powered platforms and
SaaS 11.05.2021 France n.a. n.a. n.a. n.a.
applications for on-demand and paratransit
Padam Mobility Siemens Mobility GmbH services
Germany-based digitalization consulting
IT Service 11.05.2021 Germany company focused on IT-consulting, agile n.a. n.a. n.a. n.a.
software development, and cloud technology
Scandio GmbH HiQ International AB
July 2021 39Selected Transactions (IV/IV)
Q2 2021 with a focus on European MidCap transactions
EV EV EV EV
Segment Date Target company Country Buyer Target Description mEUR' Revenue EBITDA EBIT
Sweden-based company engaged in software
Development 11.05.2021 Sweden 9.9 0.9x n.a. 7.1x
development and agile change management
Squeed AB Semcon AB
Belgium-based provider of IT software and
IT Service 10.05.2021 Belgium n.a. n.a. n.a. n.a.
solutions, as well as IT consulting services
Synergics NV Wortell Group BV
Switzerland-based company engaged in
Application 04.05.2021 Switzerland providing cyber protection and hybrid cloud 2,079.2 n.a. n.a. n.a.
CVC Capital Partners
storage services
Acronis International GmbH Limited
Germany-based software-as-a-service (SaaS)
SaaS 27.04.2021 Germany company engaged in providing customer n.a. n.a. n.a. n.a.
Userlike UG
messaging solutions
(90% Stake) Lime Technologies AB
Netherland-based IT company developing
IT Service 23.04.2021 Netherlands n.a. n.a. n.a. n.a.
software and providing IT services
HCS Company B.V. Axxes NV
Netherlands-based software developer of
standard course, exam and training software,
Application 22.04.2021 Netherlands n.a. n.a. n.a. n.a.
tailor-made web portals and administration
C4 Software BV Stichting eX: plain software for associations
UK-based provider of patient flow
Application 15.04.2021 United Kingdom management software for the healthcare 6.1 0.5x n.a. n.a.
sector
ExtraMed Limited Alcidion Group Limited
Sweden-based company engaged in software
Development 14.04.2021 Sweden development and digital services in areas such 12.9 1.5x n.a. n.a.
Evolve Technology Sweden
as medtech, finance, retail and cyber security
AB AF Poyry AB
Denmark-based software development and
Development 08.04.2021 Denmark consulting company specialized in Microsoft n.a. n.a. n.a. n.a.
technologies
Copenhagen Software A/S IT Relation A/S
Switzerland-based business unit of a British
company engaged in the development,
Application 06.04.2021 Switzerland 45.2 1.5x n.a. 9.6x
distribution and support of business
Sage Schweiz AG Infoniqa Holding GmbH management software
July 2021 40IMAP M&A Consultants AG
Offices
IMAP M&A Consultants AG
Mannheim
Harrlachweg 1
68163 Mannheim
Telefon: +49 621 3286-0
Fax: +49 621 3286-100
E-mail: info@imap.de
Internet: www.imap.de
Frankfurt am Main
Junghofstraße 24
60311 Frankfurt am Main
Telefon: +49 69 2999276-600
München
Bernhard-Wicki-Straße 3
80636 München
Telefon: +49 89 5402273-0
July 2021 41July 2021 42
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