Top Banner
Maximizing M&A Exit Value Globally and Where Does Asia Compare Jacob Mullins CEO & Founder, Exitround @jacob
19

Exitround Asia - Echelon 2014 - Jacob Mullins

Aug 23, 2014

Download

Investor Relations

Jacob Mullins

Exitround CEO Jacob Mullins keynote at Echelon 2014 in Singapore, June 10 2014. Announcing Exitround Asia and looking at the current state of M&A activity and opportunity on a global level and how Asia compares.
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1: Exitround Asia - Echelon 2014 - Jacob Mullins

Maximizing M&A Exit Value Globally and Where Does Asia Compare

Jacob Mullins CEO & Founder, Exitround

@jacob

Page 2: Exitround Asia - Echelon 2014 - Jacob Mullins

Global M&A is on FIRE

2014 • 33% increase to $599Bn, ’13 • Most active start since 2011 • TMT M&A highest share of Global

M&A since 2006 • Technology, highest value on

opening qtr by 55% increase, ‘13

*Source: Mergermarket M&A Trend Report: Q1 2014 (link)

Page 3: Exitround Asia - Echelon 2014 - Jacob Mullins

$2,500,000,000• 13 years old / 1 year public • $188M VC / $162M public • $400M revenue 2013 • Thin profitability margin • 6,000 customers, Fortune 500

————————————— • Market leader • Strategic asset for growth

• Customer base • Revenue

• Horizontal platform expansionSources: Bloomberg “ExactTarget Soars in Debut After Initial Public Offering” (link) Crunchbase: ExactTarget (link Inc. “Inside ExactTarget's Journey: From IPO to $2.5 Billion Acquisition” (link)

Acq 2013 by Salesforce

Page 4: Exitround Asia - Echelon 2014 - Jacob Mullins

$3,200,000,000• 3.75 years old • 1.5 years product in market • $80M VC raised • $300M revenue (est.)* • ~300 employees —————————————— • Disruptive business • Top hardware team • Strong early traction in market • Owned mindshareSource: Business Insider “Nest, Google's New Thermostat Company, Is Generating A Stunning $300 Million In Annual Revenue”

Acq 2014 by Google

Page 5: Exitround Asia - Echelon 2014 - Jacob Mullins

$19,000,000,000• 5 years old • $58M VC raised • 450M MAU / 315M DAU • 50B messages per day • 50 employees ———————————— • Tremendous engagement • Surpassing daily global SMS traffic • Potential threat to tech majors

WhatsApp

Source: TechCrunch “Facebook Buying WhatsApp For $19B, Will Keep The Messaging Service Independent"

Acq 2014 by Facebook

Page 6: Exitround Asia - Echelon 2014 - Jacob Mullins

Opportunity

10x Revenue Huge Disruption

EngagementDominance$42 per MAU

Insanely engaged6.25x Revenue Industry leader

Page 7: Exitround Asia - Echelon 2014 - Jacob Mullins

Overall Tech M&A

Landscape

• Mega-deals are < 1% by volume

< 1% deals 88% deals

*Source: Mergermarket M&A Trend Report: Q1 2014 **Source: Woodside Capital Partners “MASiV 2014: The M&A Silicon Valley Gathering Report”

• 88% of all deals are below $100M

Doesn’t mean you can’t make money, in fact…

Page 8: Exitround Asia - Echelon 2014 - Jacob Mullins

Exitround: The Exit Curve

• More money does not equal higher exit • Best return on capital: $2-3M & $5-10M raise

• Consumer ROI: 9.1x average | 4.8x median • Enterprise ROI: 21.1x average | 7.5x median

• Significant increase in value after year four*Source: Exitround “The Exit Curve: Exitround’s Report On Tech M&A” 2014; exitround.com/data

exitround.com/data

Page 9: Exitround Asia - Echelon 2014 - Jacob Mullins

M&A Reaching Stratospheric

Heights• Coming out of global recession,

M&A augments diminished R&D • Cash rich tech “major” acquirers • Non-tech corporations realize

software is the future • Ease of starting company

creates more point solution opps • Increase in seed + angel funding

Page 10: Exitround Asia - Echelon 2014 - Jacob Mullins

Global Tech M&A2013 • Software is 35% of total M&A activity • $188B Tech M&A, 65% up from ’12 • Internet, IT Services & Hardware are

on the upswing ———————————————— 2014 • Tracking 41%+ higher YTD to ’13 • EY on 2014: “Tech M&A to be ‘strong’

at worst, ‘blockbuster’ at best”

*Source: PricewaterhouseCoopers “US technology deal insights Analysis and trends in US technology M&A activity 2014” MarketWatch “U.S. stock market is starting to ride a tech M&A wave”(link) EY “Global technology M&A update, 2013 Year in Review”

Page 11: Exitround Asia - Echelon 2014 - Jacob Mullins

Asia Tech M&A2014 • Q1 M&A value $102B, 36%+ ’13 • TMT M&A up 53% from ’13 • Inbound M&A (from abroad) at

highest levels • US Outbound M&A at highest

levels ever, $169B YTD • Technology M&A 2x 2013 levels

*Source: Mergermarket M&A Trend Report: Q1 2014 (link)

Page 12: Exitround Asia - Echelon 2014 - Jacob Mullins

Today’s M&A Target

Buyer Incentives • Put cash to use: $832B cash sitting w top

25-tech co’s • Internet marketshare growth slowing,

grow top-line through horizontal exp • Mobile, the new frontier • The great Cloud migration

($59B ‘09 —> $149B ’14) !Characteristics of targets • Disrupting status quo • Market leading in mindshare • Engaged users • Quick growth rate, not necessarily largest

Source: MarketWatch “U.S. stock market is starting to ride a tech M&A wave”(link)Deloitte “Top 10 Issues for Technology M&A in 2014” (link)

Page 13: Exitround Asia - Echelon 2014 - Jacob Mullins

Opportunity Engagement Dominance

Large opportunity in Asian markets to expand • Market share • Mobile users & engagement • Shift to SaaS models in software

Take advantage

Page 14: Exitround Asia - Echelon 2014 - Jacob Mullins

Actionable Insights

1. Traits of successful M&A

2. Tips for successful M&A

3. What to expect

Page 15: Exitround Asia - Echelon 2014 - Jacob Mullins

Fundraise or M&A ? Start early

• 2.75 years average time sellers have known buyers

• After fourth year, significant increase in M&A value

• Partners, competitors, other (banker, Exitround)

Find your champion • Identify internal business lead,

beyond corp-dev • Get on “the list” • Build trust over time

Traits of successful M&A

Source: Exitround

Page 16: Exitround Asia - Echelon 2014 - Jacob Mullins

Tips for successful M&APrepare for speed

• Corp docs ready to share • Employee IP

assignments & contracts

• Financing docs • Patents, IP • Key customer contracts

• Up-to-date financials Front load conversations Time-box the opportunity

Page 17: Exitround Asia - Echelon 2014 - Jacob Mullins

What to expect…You… Have a deck & story Shield your team Know your objectives from M&A See a long term mutual vision !Them… Poke around, to many Term sheet, to few Intense diligence Integration

Page 18: Exitround Asia - Echelon 2014 - Jacob Mullins

Optimize for success

• M&A at all time highs • Technology needs

increasing across industries & geographies

• Be active, be prepared • Solve a problem

• Opportunity • Engagement • Dominance

Page 19: Exitround Asia - Echelon 2014 - Jacob Mullins

[email protected]

exitround.com/asia@exitround

facebook.com/exitround