First Half 2014 Shows Further Upswing in Technology M&A Transactions

We noted a further uptick in announced mergers and acquisitions for technology companies in Q2 2014.  Technology mergers and acquisitions worldwide more than doubled in the first half of 2014, with deals worth $383.4 billion in that span, up 122% from the year-earlier figure, according to Mergermarket.

The majority of technology deals happened in the U.S., trailed by the Asia Pacific.

More than half of the M&A activity this year was during Q2 2014. The value of M&A's in Q2 tripled to $200.9 billion from $67 billion in Q2 2013.

Yahoo! (NASDAQ:YHOO), Google (NASDAQ:GOOG) and Facebook (NASDAQ:FB) have been especially active in M&A this year as they all expand into new businesses and technologies. The telecommunications sector also showed a heavy uptick as it further consolidated.


For more information regarding Technology M&A, please contact us: mergers@generationequityadvisors.com


Generation Equity Advisors is a Los Angeles based technology and digital media M&A advisor and investment banking firm. Its professionals have completed over $20 billion in M&A transactions and are experienced investment bankers. For more information about Generation Equity Advisors, please go to: www.generationequityadvisors.com

Technology Mergers on Upswing in Q1 2014

2014 is off to a strong start for technology M&A announcements. We noted a number of new transactions announced in January and early February 2014. According to several M&A research reports and surveys, including KPMG's 2014 M&A Survey, we expect a solid year for technology M&A announcements.  These efforts will reflect a better global economy and market conditions than were available in previous years. In addition, the top reasons as to why we will see more M&A transactions in 2014 include:

• Large amounts of cash sitting on corporate balance sheets and in PE funds
• Opportunities in emerging markets
• Availability of credit and favorable terms
• Improved customer (and executive) confidence
• Improving equity markets
• Improved employment numbers
• Recovery of certain industry sectors, including financial services

A well executed integration plan, reasonable deal price/value, effective due diligence and positive economic conditions are all important factors in M&A success.

We see an uptick in dealflow for the first half of Q1 2014 within software, IT services, cloud services, digital media and financial technology and expect it to increase further.

Due to this expected uptick for M&A in 2014, Generation Equity Advisors plans to continue its growth and efforts to lead and advise on technology M&A transactions by adding additional talent and expertise to its experienced staff.  In addition, it plans to form strategic partnerships with companies that can enhance its M&A reach to the global markets.

For further information, please contact its M&A team at mergers@generationequityadvisors.com

Tarang Shah will be a speaker at the Mobile Host Show - The Mobile Summit for Hospitality and Retail

Tarang Shah, Managing Director at Generation Equity Advisors, will be speaking at the 2013 Mobile Host Show - The Mobile Summit for Hospitality and Retail held in Las Vegas, NV on May 23, 2013 at The Mirage Hotel and Casino.



He will be covering the subject "The Future of Mobile Payments for Hospitality and Retail." Mobile payments, also known as mobile money or mobile wallet, are expected to be one of the greatest growth areas in the near future. We will sort through all the options that compose mobile payments and what you can expect from future technologies that will drive sales.


The presentation will be posted on the www.generationequityadvisors.com website shortly after the event.


About Tarang Shah

Tarang Shah is a Managing Director at Generation Equity Advisors, a Los Angeles-based independent investment bank and mergers & acquisitions advisory firm focused exclusively on technology companies, where he covers the mobile technology sector.  He is a former Softbank venture capital professional as well as a former program manager for Ericsson,  Qualcomm and NEC. Mr. Shah holds two degrees in Engineering and two MBA degrees. You can contact Tarang Shah at tshah@generationequityadvisors.com for more information.

Generation Equity Advisors Expands its Technology M&A team, hires Tarang Shah and Nicolas Teboul

Los Angeles, CA - Generation Equity Advisors, LLC ("GEA") a leading technology and digital media focused investment bank and M&A advisor, announced the hiring of two new professionals to expand its M&A practice.  It hired Tarang Shah as a Managing Director and Nicolas Teboul as a Vice President.

"We are very pleased with our latest additions to our technology M&A team," noted Aaron Solganick, CEO and Founder of Generation Equity Advisors.  "Our efforts to build a premier technology focused M&A firm is on track. Both Tarang Shah and Nicolas Teboul will add significant value to our clients M&A and growth initiatives."

Prior to joining GEA, Tarang Shah was a venture capital and investment banking professional and author of an entrepreneurship and venture investing book, “Venture Capitalists At Work” (http://amzn.com/B006C9EM1Q). He is currently advising growth companies on fundraising, growth strategy and M&A.

At SoftBank Capital, a venture capital fund, Mr. Shah helped with investments in mobile, digital media and enterprise software startups totaling $50 million. In his venture career, he has reviewed 1,000+ startups and served as a board member and CEO advisor for dozen plus startups. His primary responsibility at SoftBank included deal sourcing, diligence and support of the U.S. west coast and to provide business development support to software and mobile portfolio companies. He worked side by side with the fund partners in all aspects of deal lifecycle including sourcing, diligence, term sheet negotiations, board participation, growth strategy and exits and acquisitions.

He led diligence for SoftBank Capital’s investments in ThumbPlay (mobile content), xAD (mobile search/directory), AdInFuse (mobile advertising), PureVideo (web video), Foomojo (virtual pets), DanceJam (dance video), Insider Pages (user reviews; acquired by Citysearch) and Communicado (enterprise VoIP) and served as a Board observer for AdInFuse (acquired by Velti; LSE-AIM:VEL), Foomojo, Communicado (acquired by Americom and Tone Software) and DanceJam.

At Bank of America, Tarang served as SVP of Startup Innovation and was responsible for strategic partnership development and risk/opportunity assessment of the tech startups in mobile payment, commerce and other emerging technology verticals. He also built a startup risk assessment practice leveraging his venture model and conducted 80+ startup/private vendor risk diligences.

Mr. Shah started his career as a product marketing manager for Qualcomm’s CDMA technology where he marketed CDMA technology to wireless carriers in Asia Pacific and won two product marketing awards. At Ericsson, he was a technical marketing manager and marketed 3G technology to customers worldwide. He was promoted to lead Ericsson’s first 3G (CDMA2000) wireless system of $200M in R&D as a systems product manager, which he helped bring to market with leading customers like China Unicom and Tata Wireless (India). At Ericsson, he was a go-to-guy for business cases for new products and technologies and secured funding for CDMA450, a $15M R&D product line. Tarang led commercialization of this product line with a cross-functional team of 30 members and secured customer trials around the world before joining SoftBank Capital in 2005.

He passed the CFA Level II in 2005 and holds MBA from Thunderbird and an MBA and BSEE from Gujarat University (India). He has developed a venture model, Startup Analysis Model (SAM) for assessing success potential of the startups. Tarang is also co-founder of a VC consulting firm Ariants and startup assessment firm Startup Meter (www.startup-meter.com).

Mr. Shah is based in Newport Beach, CA and will cover the mobile software, applications and internet sectors.

Nicolas Teboul is an experienced technology investment banker and joins GEA from Demers Beaulne (Montreal), G4 Solutions (Montreal) and Alternative Finance (Paris) where he focused on the origination of and execution of technology industry mergers and acquisitions. 

Mr. Teboul earned an MBA degree from Cornell University, a Master's degree in Economics from Institut d’Etudes Politiques de Paris (France) and a Bachelor's of Administration degree in Corporate Finance from Universite Paris Dauphine, Paris (France).

Mr. Teboul will be based in both Ithaca, NY and Montreal, Canada and will cover technology companies in the Northeast U.S., Canada and France. He is fluent in French and English.

About Generation Equity Advisors, LLC

Generation Equity Advisors is a leading technology and digital media focused investment bank and M&A advisor. Based in Los Angeles, CA, the firm specializes in providing M&A origination and execution for software, IT services, digital media, internet and mobile software companies globally. Its professionals have completed over $20 billion in transactions to date and are experienced M&A professionals.

www.generationequityadvisors.com

www.techmediamergers.com

Private Technology Companies Leading M&A with 2,277 Deals Completed in 2012

According to research and analytic's firm CB Insights, private technology firms announced 2,277 M&A deals globally in 2012. In deals with disclosed valuations, $46.8B was paid for private technology companies. 30% of deals account for 80% of that value. Eight private companies purchased for more than $1B in 2012 with 6 being US-based. The year noted 190 M&A transactions per month on average for technology companies.

In summary, the following technology M&A trends were reported in 2012:

• 76% of technology companies acquired in 2012 had not raised institutional investment prior to acquisition.
• More than 50% of M&A deals are less than $50M and more than 80% of the acquisitions are less than $200M.
• (Only) Eight private technology companies acquired for $1B+
• California noted the most private technology companies acquired in 2012, followed by New York (#2) and Texas (#3).
• Google and Facebook were the most active acquirers announcing 12 acquisitions.
• 94% of acquisitions were made by strategic buyers. PE firms and financial sponsors comprised a small 6% of deal volume.
• The UK led international markets with the most private technology company acquisitions in 2012 followed by Canada (#2) and India (#3).
• On average, companies raised $25.4M and were acquired for an average of $172.0M.
• Medians: companies raised $16.6M and were acquired for $73.5M (medians are a better measure).
• eCommerce/mCommerce announced the highest level of acquisition activity followed by ad related businesses. Fifteen different industries saw more than 30 acquisitions showing the diversity of technology sub-areas seeing activity.

Overall, we expect the technology M&A market to improve in 2013. Especially in the U.S. where its economy is in recovery mode.

IT Services M&A Update - Q4 2012

Generation Equity Advisors has published its latest IT Services M&A Update for Q4 2012.

IT Services M&A Transaction Highlights

Buyers in the IT Services sector were very active in Q4 2012.

Highlights of IT Services M&A transactions in Q4 2012 include:

ü  CSC sells three of its divisions including its Italy unit, Credit Services unit and its Australian IT Staffing unit.

ü  Deloitte acquires two companies: The Monitor Group and Recumbinant Data Corp.

ü  Cognizant acquires six C1 Group subsidiaries in Germany and Switzerland.

ü  Hitachi Consulting acquires Celerant Consulting (Jan 2, 2013).

ü  AON Hewitt acquires Workday specialist IT services firm OmniPoint.

ü  PriceWaterhouseCoopers acquires Govt. IT services firm Ray Group International.

We believe companies in the IT Services sector will continue to consolidate in 2013 as the economy improves globally and uncertainty is settled.  China and Brazil are likely active buyers of U.S. based companies looking to expand. Although, we noted a number of U.S. based IT Services firms active in 2012. We expect this trend to continue in 2013.

Q4 2012 – M&A Update

Q4 2012 was not as disappointing as Q2 and Q3. Comparing October and November 2011 to the same period in 2012, announced deal value increased by 29% to US$394 Billion. Deal announcements, which fell by 15% to 1,801 in the period, have been slower to recover. Nonetheless, there were a few pockets of noteworthy activity – the U.S. Presidential Election followed by uncertainty in the U.S. “fiscal cliff” negotiations in Congress did not help M&A activity overall.

Technology companies, striving to keep their competitive edge alongside industry giants like Apple and Google, continue to use M&A to expand in-house innovation and operational capacity with an increased focus on more transformative acquisitions.

Cisco Systems announced three acquisitions in November 2012 alone and five total acquisitions for Q4 2012. These deals, carrying sizeable price-tags, aim to broaden Cisco’s networking equipment capabilities. The company’s largest acquisition helped Cisco move to acquire cloud computing company Meraki for US$1.2 Billion. The deal will help to expand Cisco’s Wi-Fi deployment models and reduce service costs to mid-market clients.

For the complete report, go to:  www.generationequityadvisors.com

 

Generation Equity Advisors, LLC

10940 Wilshire Blvd, Ste 1600

Los Angeles, CA 90024

 

Internet and Digital Media M&A Update - November 2012

We noted a number of recent M&A and financing announcements in the Internet and Digital Media industry sectors over the past few months.

 

Most notably, the following transactions were announced:

 

• Priceline to acquire Kayak for $40/share in cash & stock, or $1.8 billion (Nov 8, 2012).
• Eyeing An IPO, marketing software giant HubSpot raises $35M For international growth, M&A and more from Altimeter Capital, Cross Creek Capital, and previous investors. It has raised a total of $100 million since its founding in 2006 (Nov 5, 2012).
• Disney acquires Lucas Film for $4.05 billion (Oct 30, 2012).
• Yahoo! acquires Stamped for an undisclosed amount (Oct 26, 2012).
• Yelp pays $50 million to acquire its European rival, Qype (Oct 24, 2012).
• Microsoft invests $300 million in Nook Media (Oct 5, 2012).
• Google acquires Frommers, Viewdle, Snapseed, Nik Software, Wildfire Interactive and VirusTotal.com (Aug - Nov 2012).
• Facebook acquires Threadsy, a social aggregator and maker of social marketing tool Swaylo (Aug 24, 2012).
• IAC acquires About.com for $300 million from the New York Times (Aug 26, 2012).

 

As the end of the U.S. election clears the path to economic certainty again, we believe companies will pick up the M&A pace as large amounts of cash sits idol on balance sheets.

 

We expect 2013 to show an increase in the amount and number of M&A and IPO transactions announced in the Internet and Digital Media industry sectors.

About Generation Equity Advisors

Generation Equity Advisors is an independent investment banking and M&A advisory firm focused on the technology and digital media industry sectors exclusively. Our expertise is providing mergers and acquisition advisory services to companies, entrepreneurs, private equity firms and shareholders globally. We started in 2009 with the idea to focus on specific industry sectors and to avoid any "large firm" conflicts. We have successfully completed several M&A transactions for our clients and continue to grow into a leading global technology and digital media focused M&A advisory and investment banking firm.

Our professionals have completed over $20 billion in transactions and are highly experienced in Mergers and Acquisitions, Corporate Finance and Capital Markets. All professionals have worked with large tier-one and middle-market investment banking firms and have many years of experience managing all phases of the M&A transaction process from start to finish.

For More Info:  Generation Equity Advisors

Q2 2012 - Private Equity Investments and Exits Decrease

The latest research from PitchBook - Merrill Datasite shows that PE firms have reported a continuing decrease in both their investments and exits as of Q2 2012.

• Deal volume fell by 17% in 2Q 2012 compared to the previous quarter and has been in a steady downward trend for more than a year.
• The $51 billion invested during 2Q was the lowest for any individual quarter since 2009.
• PE firms have demonstrated an increased focus on B2B, IT, and Healthcare investing.
• Both exit volume and capital exited plummeted in 2Q 2012, declining by 16% and 42% respectively, compared to the previous quarter.

The amount of capital invested in Q2 decreased by 8% from the previous quarter but the more drastic decline came in deal volume, which fell 17%. When comparing Q2 2012 to the same period in 2011, the results are even worse: a decline of 39% in deal volume and 37% in capital invested. In fact, the $51 billion invested during Q2 was the lowest level for any individual quarter since the post-bubble year of 2009, and with just 303 deals, it was the worst quarter by
volume since before 2006.

Deal-making was fairly consistent throughout 2011, but levels have slipped through the first half of 2012. Compared to Q2 2010, deal flow was down 48% and capital invested declined 58% in Q2 2012. Halfway through the year, PE firms are on track to close just 1,332 deals in 2012, which would be the lowest level since 2003.

“For all of the headwinds facing PE and the economy at large, two irrefutable forces will continue to compel PE firms to action: the more than $430 billion in dry powder reserves and the more than 6,300 companies currently in portfolios,” says Richard A. Martin, Jr., Senior Director at Merrill DataSite. “Regardless of the macroeconomic environment, PE firms will have to act in order to exit longstanding investments and deploy capital before their investing window closes.”

In terms of capital, exit activity has been a mixed bag so far in 2012. The Energy industry has emerged as a definitive bright spot for PE exit activity. In the first half of 2012, PE firms sold 24 Energy investments for a total of $28.2 billion, which is already more than any year on record. Exit activity in Information Technology has been strong as well; firms have already realized more than $14 billion in exited investments in 2012, nearly surpassing the 2011 total. Furthermore, PE firms have already exited more Financial Services companies in 2012 than in all of 2011. On the other hand, 2012 is shaping up to be one of the slowest years in recent memory for both B2B and B2C. Halfway through the year, total exited capital in both of the industries is approximately one quarter of the amount reached in 2011.

To access the complete report (free), please go to the "Research" section at: Generation Equity Advisors

Generation Equity Advisors, LLC