17 Confidential Real Estate Technology Ecosystem (Abbreviated) Company Acquired Public Company Payments Home Services Lead Gen Data/Information Services Broker CRM/Marketing Mortgage Orig. / Finance Property Search/Lead Gen Property Mgmt Investment Mgmt Commercial Construction Residential Construction Facilities Design/AEC IWMS & Facilities Mgmt
32
Embed
Fall 2013 Real Estate Software Ecosystem & Market Update (Valuations and Trends)
Real Estate Software Industry Market and M&A Data. Insight into industry valuation trends and M&A activity
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
17
Confidential
Real Estate Technology Ecosystem (Abbreviated)
Company Acquired
Public Company
Construction
Payments
Home Services Lead Gen
Data/Information Services
Broker CRM/Marketing Mortgage Orig. / Finance Property Search/Lead Gen
Property Mgmt Investment Mgmt
Commercial Construction Residential Construction Facilities Design/AEC IWMS & Facilities Mgmt
The information contained in this Report is obtained from sources we believe to be reliable, but no representation or guarantee is made about the accuracy or completeness of such information, or the opinions expressed herein. Nothing in this Report is intended to be a recommendation of a specific security or company or intended to constitute an offer to buy or sell, or the solicitation of an offer to buy or sell, any security. Software Equity Group LLC may have an interest in one or more of the securities or companies discussed herein. Financial data provided by Capital IQ. This Report may not be reproduced in whole or in part without the expressed prior written authorization of Software Equity Group, L.L.C.
Disclaimer
3
Confidential
Overview
• Introduction to Software Equity Group (SEG)
• Public SaaS Company Financial and Valuation Performance
Provider of real estate investment budgeting and forecasting solutions to property managers, REITs & PE firms
Facilities Management SaaS Provider of facilities management solutions to the global corporate and commercial property market
Commercial Construction SaaS Provider of project management, collaboration and bid
management solutions for retail store design and construction
Facilities Design On-premise Provider of plant and facility design and engineering software
IWMS On-premise Provider of Integrated Workplace solutions (IWMS)
Buyer Business Description Client Category Delivery Model
7
Confidential
Recent SaaS Experience
Commercial Real Estate
Provider of SaaS facilities management solutions to the global corporate and commercial property market
Commercial Real Estate
Provider of SaaS project management, collaboration and bid management solutions for retail store design and construction
Multifamily Real Estate
Provider of subscription-based vendor risk management and compliance services to the multifamily housing industry
Vertical Real Estate Provider of SaaS resident, community and facility management solutions for long-term care properties
Nonprofit Provider of SaaS multi-channel (web, mobile and social) fundraising solutions for nonprofits and charities around the world
Education Provider of subscription-based workflow management systems for authoring, evaluating and publishing scholarly research
Insurance Provider of SaaS-based healthcare benefits administration and insurance claims management software
HR / Talent Management
Provider of on-demand employee talent recruitment and performance management solutions
HR / Workforce Management Provider of subscription-based workforce management solutions
Expense Management Provider of cloud-based shipping and expense management solutions
Higher-Ed / Talent Management
Provider of SaaS solutions to automate scheduling, evaluation and reporting at undergraduate and graduate healthcare programs
Buyer Business Description Client Category
8
Confidential
Recent PE Experience
With approximately $70 billion in capital commitments, Apax Partners is an independent global partnership focused solely on long-term investment in growth companies.
With approximately $7 billion in capital commitments, Vista Equity Partners is a leading private equity firm focused on investing in software and technology-enabled businesses.
With approximately $4 billion in capital commitments, Thoma Bravo invests in many industries and has particular expertise in software, business and financial services, and education.
With approximately $1.7 billion in capital commitments, Arsenal Capital Partners invests in middle-market companies with revenues ranging from $30 to $400 million.
With over 9 billion in capital commitments, New Mountain is a generalist firm that pursues attractive investment opportunities across a full spectrum of industries and styles.
dmg :: information comprises a portfolio of high growth, innovative, must-have information media businesses in the property, education, energy and commodity and structured finance sectors. -
With over $2.6 billion in capital commitments, Marlin Equity Partners is a leading private equity firm focused on investments in technology, healthcare services, business services and several other industries.
Pequot Capital Management was a multi-billion dollar hedge fund sponsor founded in 1998 that announced it was closing in 2009.
Pender is a Canadian investment group focused across a number of asset classes, including early stage technology investments.
-
The Carlyle Group is a global alternative asset manager with more than $180 billion in assets under management across 118 funds and 81 fund of funds vehicles.
PUBLIC SaaS COMPANY FINANCIAL AND VALUATION PERFORMANCE:
THE SEG SaaS INDEX
10
Confidential
• The SEG SaaS Index tracks public companies that primarily offer hosted, on-demand software under a subscription and/or transaction based pricing model
• The SEG SaaS Index is currently comprised of 40 public pure-play SaaS companies
EV/Revenue Multiples vs. TTM EBITDA Margins EV/Revenue Multiples vs. TTM Revenue Growth Rates
• There is a clear and direct correlation between the median TTM revenue growth rate and median EV/Revenue multiple of public SaaS companies.
• Public SaaS companies growing TTM revenue in excess of 50% achieved a median EV/Revenue multiple of 11.5x.
• The premium EV/Rev market multiples awarded rapidly growing public SaaS companies, which is driving their increased spending on sales & marketing.
• There is an inverse correlation between EBITDA margins and median EV/Revenue multiples.
• In the current market, SaaS profitability is penalized, as investors perceive profitability to be at the expense of growth, which they deem all important.
• As proof, public SaaS companies with no profitability boasted a remarkable 8.8x median EV/Revenue multiple in 2Q13.
0.0x
1.7x
3.4x4.4x
7.4x
2.8x
11.5x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
<= 0% > 0%<= 10%
> 10%<= 20%
> 20%<= 30%
> 30%<= 40%
> 40%<= 50%
> 50%
Med
ian
EV/R
even
ue
TTM Revenue Growth
8.8x
4.5x
3.4x
5.3x
4.1x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
10.0x
<= 0% > 0%<= 10%
> 10%<= 20%
> 20%<= 30%
> 30%
Med
ian
EV/R
even
ue
TTM EBITDA Margin
12
Confidential
SaaS MERGERS & ACQUISITIONS
13
Confidential
SaaS M&A: DEAL VOLUME AND EXIT MULTIPLES
• There were 104 SaaS M&A transactions in 2Q13. At the half-year mark, there have been 190 SaaS M&A transactions, on pace to exceed SEG’s 2013 projection of 344, and 2012’s record breaking total of 311.
• After a steady rise from 2009 – 2012, the median TTM EV/Revenue exit multiple of SaaS transactions has held relatively steady over the past five quarters, closing 2Q13 at 4.0x.
• The median SaaS exit multiple was 120% greater than the median on-premise exit multiple in 1Q13 (4.0x vs.1.8x), the second highest valuation disparity on record.
Median SaaS EV/Revenue Exit Multiples SaaS M&A Volume
3039
2639
45 48
68 6559
94 9486
104
0%
5%
10%
15%
20%
25%
30%
0
20
40
60
80
100
120
SaaS
M&
A De
als
as a
% o
f Tot
al
Soft
war
e M
&A
Deal
s
# of
Saa
S M
&A
Deal
s
SaaS M&A Deals SaaS as % of Software
4.0x
3.9x
4.1x
4.0x 4.0x
2Q12 3Q12 4Q12 1Q13 2Q13
14
Confidential
SaaS M&A BY PRODUCT CATEGORY
• CRM, Marketing & Sales was the most active SaaS product category, accounting for 12.0% of all M&A transactions in the second quarter.
• Buyers are seeking targets that will help them capitalize on the rapid growth in spending on marketing technology. According to Gartner, by 2017 the CMO will purchase more IT than the CIO.
• After two years of claiming almost 20% of all SaaS transactions, the HR & Workforce Mgmt product category had its second consecutive lackluster quarter, closing 2Q13 with only 6% of SaaS transactions. After a period of rapid consolidation by the large HR software providers, the M&A window for many smaller HR providers is rapidly closing.
• The Systems Management (10%) and BI, Risk and Compliance (9%) product categories also exhibited strength in 2Q13. Both categories are benefiting from adoption of SaaS deployed solutions, which should continue for the foreseeable future.
Content & Document Mgmt6%
CRM, Marketing & Sales12%
Data Mgmt & Integration2%
eCommerce4%
Engineering, PLM & CAD1%
HR & Workforce Mgmt6%
Messaging, Conferencing & Communications
4%
Multimedia, Graphics & Communications
2%
Network Performance Mgmt1%
Security3%
Systems Mgmt10%Supply Chain Mgmt & Logistics
6%
Automotive2%
Construction2%
Education8%
Financial Services6%
Healthcare2%
Insurance4%
Real Estate4%
Telecommunications1%
Other Verticals8%
Billing & Service Provisioning1%
BI, Risk & Compliance9%
Vert
ical
s
15
Confidential
SaaS M&A (Last 2 Years)
2.5x
3.5x4.2x
5.6x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
Revenue <$10M
$10M <Revenue<
$20M
$21M <Revenue<
$49M
Revenue >$50M
SaaS Exit Multiple by Company Size (Last 2 Years) SaaS Exit Multiple by Distribution (Last 2 Years)
Real Estate (Market Cap) - Index Value NASDAQ Composite Index (^COMP) - Index Value
Real Estate: Public Market Performance Stock Performance
Trading Multiples (EV/Rev)
Real estate significantly outperforming Nasdaq
Real estate significantly outperforming Nasdaq
Real Estate Index Ellie Mae, Inc. (NYSE:ELLI) RealPage, Inc. (NasdaqGS:RP) CoStar Group Inc. (NasdaqGS:CSGP) Experian plc (LSE:EXPN) Zillow, Inc. (NasdaqGS:Z) Trulia, Inc. (NYSE:TRLA)
20
Confidential
Enterprise Value /EBITDA
0.0x 0.0x
28.3x
58.8x
8.1x
33.6x
23.6x
Enterprise Value /Revenue
22.5x
14.8x
4.5x
10.3x
1.9x 2.6x
5.7x
EBITDA Margin
-1.6% -0.7%
15.8%17.8%
21.3%
7.0%
23.6%
Revenue Growth
69.9%
81.1%
20.7%
44.1%
14.1% 12.1%
57.2%
Public Company Comparables: Real Estate Financial Performance
Trading Multiples
No multiple since they are
unproftiable
Median: 15.8% Average: 11.9%
Median: 5.7x Average: 8.9x
Median: 28.3x Average: 30.5x
Median: 44.1% Average: 42.7%
21
Confidential
5/2/2012 $37.4 102.4x - RentJuice Corporation provides online Rental Relationship Management (RRM) software for real estate professionals.
4/27/2011 $654.2 5.5x 20.3x LoopNet, Inc. operates an online marketplace for commercial real estate in the United States.
5/5/2011 - 5.5x - Compliance Depot provides vendor risk and compliance management solutions to property managers in the multi-family housing sector.
8/22/2011 $74.9 4.5x - MyNewPlaceoffers operates an apartment and home rentals Web site.
5/8/2013 $314.3 4.4x Market Leader, Inc., provides SaaS CRM and marketing solutions for real estate professionals in the United States and Canada.
7/29/2011 $14.8 3.5x - Senior-Living.com, Inc. provides search and information services to the senior care community in the United States.
1/11/2011 $266.3 3.2x 7.9x RP Data Ltd provides property information, analytics, and risk management services primarily in Australia and New Zealand.
4/2/2012 $18.7 3.2x Top Rural S.L. operates as a rural accommodation search engine in Europe.
Select Real Estate M&A Activity
Business Description Buyer Target Date EV (mm) EV/ Rev
EV/ EBTIDA
*Applied 33% public to private discount to Marketleader, LoopNet & RP Data Multiples
22
Confidential
11/3/2010 $62.0 2.7x - Level One Inc. provides outsourced contact solutions for the multi-family apartment industry.
5/15/2011 $526.8 2.3x 7.8x Primedia operates real estate Websites and mobile applications for consumers to find apartments, houses for rent, or new homes for sale.
12/1/2009 $128.0 1.7x - MRI Software LLC provides business management software solutions for the multifamily and commercial property industry worldwide.
Business Description Buyer Target Date EV (mm) EV/ Rev
EV/ EBTIDA
*Applied 33% public to private discount to
Select Real Estate M&A Activity
23
Confidential
To discuss the real estate software sector, M&A transactions and/or your business, please contact me at:
Public Real Estate Company Snapshot: CoStar COSTAR GROUP INC. (NASDAQGS:CSGP)COMPANY INFORMATIONCoStar Group, Inc. provides information, analytics, and marketing services to the commercial real estate industry in the United States, the United Kingdom, and France. Its services include CoStar PropertyProfessional service that offers inventory of office, industrial, retail, and multifamily properties and land; CoStar COMPS Professional, which provides coverage of comparable sales information; CoStar Tenant, an onlinebusiness-to-business prospecting and analytical tool; CoStarGo, an iPad application that integrates its property, tenant, and comparable sales information; and CoStar Advertising to market a space for lease or a propertyfor sale. The company’s services also comprise PPR Portal, a delivery platform for research, forecasts, analytics, and granular data; PPR COMPASS, a commercial real estate risk management tool; Resolve PortfolioMaximizer, a real estate portfolio management software solution; Resolve Request, a business intelligence software solution; VP Corporate Edition and VP Retail Edition, which are real estate management softwaresolutions. In addition, its services include LoopNet Premium Lister designed for commercial real estate professionals and other customers; LoopNet Premium Searcher designed for members searching for commercial real estate;LoopLink LoopLink, an online real estate marketing and database services suite; LandsofAmerica and LandAndFarm, which are online marketplaces for rural land for sale; BizBuySell and BizQuest that are onlinemarketplaces for operating businesses for sale; FOCUS, a digital online service; and Observatoire Immobilier D’ Entreprise, which provides commercial property availability. The company serves commercial real estatebrokers, as well as owners, landlords, financial institutions, retailers, vendors, appraisers, investment banks, governmental agencies, and other parties involved in commercial real estate. CoStar Group, Inc. was foundedin 1987 and is headquartered in Washington, District of Columbia.
Stock Exchange NasdaqGS Latest Fiscal Year 12/31/2012 Primary Industry Internet Software and ServicNext Earnings Date n/aWebsite http://www.costar.com Latest Fiscal Quarter 6/30/2013 S&P LT Rating n/a S&P STARS Ranking n/aEmployees 1,965 LTM as of 6/30/2013 S&P LT Rating Date n/a S&P Quality Ranking B-Current Investors
Pending Investors
VALUATION PRICE/VOLUME GRAPH(in millions, except per share data)Valuation Market DataCurrent Price (Aug 29 2013) 150.78 Dividend Yield #VALUE! 52 Week High (Aug 08, 2013) 164.63 5 Year Beta 1.20 52 Week Low (Oct 23, 2012) 76.41 Float 27.4Total Basic Common Shares 28.6 Float % 95.7%Market Capitalization 4,316.1 Short Int. as a % of S/O 2.3%Plus: Total Debt 161.9 Shares Sold Short 0.7Plus: Preferred Stock n/a Days Cover Short 5.7Plus: Minority Interest n/a Average Trading VolumeLess: Cash and ST Investments (190.1) Last Week 8/22/13 0.1Enterprise Value 4,287.9 Last Month 7/29/13 0.1Relative Performance Last 3 Months 5/29/13 0.1csgp YTD 68.7% 12/31/12 Last 6 Months 2/28/13 0.1S&P 500 Index YTD 14.9% Last Year 8/29/12 0.1
CAPITAL STRUCTURE FINANCIAL SUMMARYCapital Structure Fiscal Year Ending, LTM Fiscal Year Ending,Commercial Paper n/a Unamortized Premium n/a 12/31/10 12/31/11 12/31/12 6/30/13 2013E 2014ERevolving Credit 0.0 Unamortized Discount n/a Term Loans 170.6 Adjustments n/aSnr. Bonds and Notes n/a Total Debt 170.6 Revenue 226.3 251.7 349.9 409.1 442.1 497.4Sub Bonds and Notes n/a EBITDA 40.5 49.0 65.3 72.9 125.7 154.2Trust Preferred n/a Undrawn Revolver 50.0 Margin (%) 17.9% 19.5% 18.7% 17.8% 28.4% 31.0%Capital Leases n/a Undrawn Commercial Paper n/a EBIT 26.9 36.3 32.7 31.6 bility Needed)bility Needed)Other n/a Undrawn Term Loans n/a Margin (%) 11.9% 14.4% 9.4% 7.7% NA NATotal Principal Due 170.6 Other Available Credit n/a Net Income 13.3 14.7 9.9 17.4 bility Needed)bility Needed)
Total Undrawn Credit 50.0 Margin (%) 5.9% 5.8% 2.8% 4.2% NA NA
Fiscal Year Ending, LTM Fiscal Year Ending,12/31/10 12/31/11 12/31/12 6/30/13 2013E 2014E Cash from Operations 39.3 25.7 86.1 97.1 bility Needed)bility Needed)
TEV / Revenue 4.5x 4.7x 8.1x 9.6x 9.6x 8.6x Cash from Investing (40.5) 58.4 (640.4) (12.7)TEV / EBITDA 25.6x 27.4x 41.0x 61.7x 33.9x 27.6x Cash from Finaning 2.0 254.8 164.9 2.2TEV / EBIT 40.5x 39.9x 68.6x 181.2x NA NA Change in Cash 0.6 338.9 (389.3) 86.8P / E 89.7x 113.7x 229.5x NM 63.8x 51.2xP / BV 3.2x 2.6x 3.1x 4.3x NA NA Balance Sheet Latest1 Year GrowthTotal Revenue 7.9% 11.3% 39.0% 44.1% 26.3% 12.5% Total Assets 439.6 771.0 1,165.1 1,197.0EBITDA (12.9%) 21.0% 33.1% 42.1% 92.6% 22.7% Total Liabilities 58.1 111.9 338.8 330.4EBIT (15.6%) 35.0% (9.8%) (6.3%) NA NA Total Equity 381.5 659.2 826.3 866.6Net Income (28.9%) 10.3% (32.3%) 194.1% NA NAEPS (31.9%) (3.1%) (40.3%) 169.8% 535.5% 24.5%
VALUATION MULTIPLES CHART FINANCIAL SUMMARY CHART
NA
NA
Income Statement
Cash Flow Statement
7.9%11.3%
39.0%
26.3%
12.5%
0.0%5.0%
10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%
2010 2011 2012 2013E 2014E
YOY Growth
Total Revenue
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
0
100
200
300
400
500
600
2010 2011 2012 2013E 2014E
(in $
mill
ions
)
Valuation
Revenue TEV / Revenue
0.00.10.10.20.20.30.30.40.40.5
150.00
152.00
154.00
156.00
158.00
160.00
162.00
164.00
8/12
Volu
me(
in m
illio
ns)
Pric
e
Volume csgp Price
26
Confidential
Public Real Estate Company Snapshot: RealPage REALPAGE, INC. (NASDAQGS:RP)COMPANY INFORMATIONRealPage, Inc. provides on demand software solutions for the rental housing industry in North America. It offers property management systems, including OneSite to serve the specific needs of conventionalmulti-family, affordable housing and urban development (HUD), affordable tax credit, rural housing, privatized military housing, student housing, and commercial sectors; and Propertyware for accounting, maintenance and workorder management, marketing spend management, and portal services, as well as screening, renter’s insurance, and payment solutions. The company also provides on premise property management systems that include TenantPro to serve the needs of small conventional properties; Spectra, a conventional apartment and commercial modular property management system; and i-CAM and Management Plus property management software to automate andstreamline rental activities. In addition, it offers software-enabled value-added services, such as LeaseStar, a multichannel managed marketing system that manages marketing and leasing operations and enablesowners and managers to originate, capture, track, manage, and close leads; YieldStar, a scientific yield management solution, which enables owners and managers to optimize rents; LeasingDesk, a risk mitigation solutionto reduce delinquency, liability, and property damage risk; Velocity that offers billing and utility management services; OpsTechnology that offers spend management solutions that enable owners and managers tocontrol costs; shared cloud services, which are integrated with property management systems and software-enabled valued added services; and RealPage Senior Living, an integrated care management, community management, anmarketing management platform. Further, the company offers consulting and implementation services; and training programs. RealPage, Inc. sells its software and services directly through its sales force. The companyis headquartered in Carrollton, Texas.
Stock Exchange NasdaqGS Latest Fiscal Year 12/31/2012 Primary Industry Application Software Next Earnings Date n/aWebsite http://www.realpage.com Latest Fiscal Quarter 6/30/2013 S&P LT Rating n/a S&P STARS Ranking n/aEmployees 2,893 LTM as of 6/30/2013 S&P LT Rating Date n/a S&P Quality Ranking n/aCurrent Investors
Pending Investors
VALUATION PRICE/VOLUME GRAPH(in millions, except per share data)Valuation Market DataCurrent Price (Aug 29 2013) 20.86 Dividend Yield #VALUE! 52 Week High (Sep 13, 2012) 26.99 5 Year Beta 1.55 52 Week Low (Jun 11, 2013) 16.88 Float 49.5Total Basic Common Shares 77.0 Float % 64.2%Market Capitalization 1,607.0 Short Int. as a % of S/O 5.8%Plus: Total Debt 0.0 Shares Sold Short 4.5Plus: Preferred Stock n/a Days Cover Short 12.6Plus: Minority Interest n/a Average Trading VolumeLess: Cash and ST Investments (34.3) Last Week 8/22/13 0.3Enterprise Value 1,572.7 Last Month 7/29/13 0.4Relative Performance Last 3 Months 5/29/13 0.4rp YTD (3.3%) 12/31/12 Last 6 Months 2/28/13 0.3S&P 500 Index YTD 14.9% Last Year 8/29/12 0.3
CAPITAL STRUCTURE FINANCIAL SUMMARYCapital Structure Fiscal Year Ending, LTM Fiscal Year Ending,Commercial Paper n/a Unamortized Premium n/a 12/31/10 12/31/11 12/31/12 6/30/13 2013E 2014ERevolving Credit 10.0 Unamortized Discount n/a Term Loans n/a Adjustments n/aSnr. Bonds and Notes n/a Total Debt 10.0 Revenue 188.3 258.0 322.2 352.4 387.1 458.2Sub Bonds and Notes n/a EBITDA 25.9 30.5 52.9 55.5 90.2 112.8Trust Preferred n/a Undrawn Revolver 140.0 Margin (%) 13.8% 11.8% 16.4% 15.8% 23.3% 24.6%Capital Leases 0.0 Undrawn Commercial Paper n/a EBIT 6.3 3.1 21.6 24.8 bility Needed)bility Needed)Other n/a Undrawn Term Loans n/a Margin (%) 3.3% 1.2% 6.7% 7.0% NA NATotal Principal Due 10.0 Other Available Credit n/a Net Income 0.1 (1.2) 5.2 11.5 bility Needed)bility Needed)
Total Undrawn Credit 140.0 Margin (%) 0.0% (0.5%) 1.6% 3.3% NA NA
Public Real Estate Company Snapshot: Trulia TRULIA, INC. (NYSE:TRLA)COMPANY INFORMATIONTrulia, Inc. provides tools to research homes and neighborhoods for consumers through Web and mobile applications. The company, through its tools, also enables real estate professionals to market their listings. Itprovides subscription and free products for real estate professionals, as well as sells display media advertising. In addition, the company offers information on schools, crime, neighborhood amenities, home values,and other communities. It serves buyers, sellers, and renters. The company was formerly known Realwide, Inc. and changed its name to Trulia, Inc. in September 2005. Trulia, Inc. was founded in 2005 and isheadquartered in San Francisco, California.
Stock Exchange NYSE Latest Fiscal Year 12/31/2012 Primary Industry Internet Software and ServicNext Earnings Date n/aWebsite http://www.trulia.com Latest Fiscal Quarter 6/30/2013 S&P LT Rating n/a S&P STARS Ranking n/aEmployees 519 LTM as of 6/30/2013 S&P LT Rating Date n/a S&P Quality Ranking n/aCurrent Investors
Pending Investors
VALUATION PRICE/VOLUME GRAPH(in millions, except per share data)Valuation Market DataCurrent Price (Aug 29 2013) 41.67 Dividend Yield #VALUE! 52 Week High (Aug 05, 2013) 48.40 5 Year Beta n/a 52 Week Low (Nov 16, 2012) 14.69 Float 29.0Total Basic Common Shares 32.5 Float % 89.3%Market Capitalization 1,355.6 Short Int. as a % of S/O 20.6%Plus: Total Debt 9.0 Shares Sold Short 6.7Plus: Preferred Stock n/a Days Cover Short 9.9Plus: Minority Interest n/a Average Trading VolumeLess: Cash and ST Investments (215.7) Last Week 8/22/13 0.6Enterprise Value 1,148.8 Last Month 7/29/13 1.0Relative Performance Last 3 Months 5/29/13 0.7trla YTD 156.6% 12/31/12 Last 6 Months 2/28/13 0.7S&P 500 Index YTD 14.9% Last Year 8/29/12 0.5
CAPITAL STRUCTURE FINANCIAL SUMMARYCapital Structure Fiscal Year Ending, LTM Fiscal Year Ending,Commercial Paper n/a Unamortized Premium n/a 12/31/10 12/31/11 12/31/12 6/30/13 2013E 2014ERevolving Credit n/a Unamortized Discount (0.2) Term Loans 10.0 Adjustments n/aSnr. Bonds and Notes n/a Total Debt 10.0 Revenue 19.8 38.5 68.1 92.8 125.2 189.9Sub Bonds and Notes n/a EBITDA (3.1) (4.0) (7.0) (0.7) 14.0 40.4Trust Preferred n/a Undrawn Revolver n/a Margin (%) (15.5%) (10.3%) (10.3%) (0.7%) 11.2% 21.3%Capital Leases 0.2 Undrawn Commercial Paper n/a EBIT (3.7) (5.8) (9.5) (4.4)bility Needed)bility Needed)Other n/a Undrawn Term Loans n/a Margin (%) (18.5%) (15.0%) (14.0%) (4.7%) NA NATotal Principal Due 10.2 Other Available Credit n/a Net Income (3.8) (6.2) (10.9) (7.7)bility Needed)bility Needed)
Total Undrawn Credit n/a Margin (%) (19.4%) (16.0%) (16.0%) (8.3%) NA NA
Fiscal Year Ending, LTM Fiscal Year Ending,12/31/10 12/31/11 12/31/12 6/30/13 2013E 2014E Cash from Operations (1.1) 1.1 4.2 8.5 bility Needed)bility Needed)
TEV / Revenue n/a n/a 5.9x 10.0x 8.9x 5.8x Cash from Investing (3.5) (6.6) (2.0) (7.5)TEV / EBITDA n/a n/a NM NM 79.1x 27.5x Cash from Finaning 1.4 8.2 90.8 205.3TEV / EBIT n/a n/a NM NM NA NA Change in Cash (3.2) 2.6 93.0 206.3P / E n/a n/a NM NM 199.0x 52.5xP / BV n/a n/a 5.1x 5.0x NA NA Balance Sheet Latest1 Year GrowthTotal Revenue 91.4% 94.7% 76.8% 81.1% 83.9% 51.6% Total Assets 15.7 24.2 119.0 240.4EBITDA NM NM NM NM NM 187.7% Total Liabilities 8.6 21.2 32.4 39.5EBIT NM NM NM NM NA NA Total Equity 7.1 3.0 86.5 201.0Net Income NM NM NM NM NA NAEPS NM NM NM NM NM 279.2%
VALUATION MULTIPLES CHART FINANCIAL SUMMARY CHART
Accel Management Co, Inc., Caledonia (Private) Investments Pty Limited, Deep Fork Capital, Fayez Sarofim & Co., Polaris Partners, Sequoia Capital
NA
Income Statement
Cash Flow Statement
91.4% 94.7%
76.8%83.9%
51.6%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
2010 2011 2012 2013E 2014E
YOY Growth
Total Revenue
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
0
50
100
150
200
2010 2011 2012 2013E 2014E
(in $
mill
ions
)
Valuation
Revenue TEV / Revenue
0.0
2.0
4.0
6.0
8.0
10.0
12.0
150.00
170.00
190.00
210.00
230.00
250.00
270.00
290.00
310.00
9/12
Volu
me(
in m
illio
ns)
Pric
e
Volume trla Price
28
Confidential
Public Real Estate Company Snapshot: Zillow ZILLOW, INC. (NASDAQGS:Z)COMPANY INFORMATIONZillow, Inc. engages in the operation of a real estate and home-related information marketplace on mobile and the Web in the United States. The company owns and operates Zillow.com; Zillow Mobile, a suite ofhome-related mobile applications; Zillow Mortgage marketplace, where borrowers connect with lenders to find loans and get mortgage rates; Zillow Digs, a home improvement marketplace for consumers to find visual inspirationand local cost estimates; and Zillow Rentals, a marketplace and suite of tools for rental professionals, Postlets, Solutions, Buyfolio, Mortech, and HotPads. It also offers current home value and rental priceestimates; and for sale and rental listings. In addition, the company provides Premier Agent program, which offers a suite of marketing and business technology solutions for real estate agents; and display advertisingservices, including graphical mobile and Web advertising services on its home page and on individual Web pages, as well as information products and services to make decisions about homes. Further, it offers consumerswith ratings and contact information for the listing agent and local buyer’s agents alongside home profiles and listings for homes for evaluating and selecting the real estate agent suited for them; and home-relatedadvice and discussions through Zillow Advice section of its Zillow.com Website that captures questions and discussion topics from users, including consumers and real estate, mortgage, and rental professionals. Thecompany’s customers include advertisers primarily in the real estate industry, including real estate brokerages, home builders, mortgage lenders, and home services providers; and advertising customers comprisingtelecommunications, automotive, insurance, and consumer products companies. Zillow, Inc. was incorporated in 2004 and is headquartered in Seattle, Washington.
Stock Exchange NasdaqGS Latest Fiscal Year 12/31/2012 Primary Industry Internet Software and ServicNext Earnings Date n/aWebsite http://www.zillow.com Latest Fiscal Quarter 6/30/2013 S&P LT Rating n/a S&P STARS Ranking n/aEmployees 560 LTM as of 6/30/2013 S&P LT Rating Date n/a S&P Quality Ranking n/aCurrent Investors
Pending Investors
VALUATION PRICE/VOLUME GRAPH(in millions, except per share data)Valuation Market DataCurrent Price (Aug 29 2013) 95.62 Dividend Yield #VALUE! 52 Week High (Aug 29, 2013) 98.40 5 Year Beta 1.91 52 Week Low (Nov 16, 2012) 23.00 Float 28.6Total Basic Common Shares 37.6 Float % 76.3%Market Capitalization 3,590.6 Short Int. as a % of S/O 13.4%Plus: Total Debt 0.0 Shares Sold Short 5.0Plus: Preferred Stock n/a Days Cover Short 5.7Plus: Minority Interest n/a Average Trading VolumeLess: Cash and ST Investments (169.7) Last Week 8/22/13 1.0Enterprise Value 3,420.9 Last Month 7/29/13 1.4Relative Performance Last 3 Months 5/29/13 0.9z YTD 244.6% 12/31/12 Last 6 Months 2/28/13 0.8S&P 500 Index YTD 14.9% Last Year 8/29/12 0.9
CAPITAL STRUCTURE FINANCIAL SUMMARYCapital Structure Fiscal Year Ending, LTM Fiscal Year Ending,Commercial Paper n/a Unamortized Premium n/a 12/31/10 12/31/11 12/31/12 6/30/13 2013E 2014ERevolving Credit 0.0 Unamortized Discount n/a Term Loans n/a Adjustments n/aSnr. Bonds and Notes n/a Total Debt 0.0 Revenue 30.5 66.1 116.9 152.1 189.0 264.5Sub Bonds and Notes n/a EBITDA (5.2) 5.8 12.4 (2.4) 21.4 47.2Trust Preferred n/a Undrawn Revolver 26.5 Margin (%) (17.0%) 8.8% 10.6% (1.6%) 11.3% 17.8%Capital Leases n/a Undrawn Commercial Paper n/a EBIT (6.8) 2.7 7.0 (10.1)bility Needed)bility Needed)Other n/a Undrawn Term Loans n/a Margin (%) (22.4%) 4.1% 6.0% (6.7%) NA NATotal Principal Due 0.0 Other Available Credit n/a Net Income (6.8) 1.1 5.9 (11.1)bility Needed)bility Needed)
Total Undrawn Credit 26.5 Margin (%) (22.2%) 1.7% 5.1% (7.3%) NA NA
Fiscal Year Ending, LTM Fiscal Year Ending,12/31/10 12/31/11 12/31/12 6/30/13 2013E 2014E Cash from Operations 2.3 14.8 32.3 23.8 bility Needed)bility Needed)
TEV / Revenue n/a 9.4x 6.6x 13.1x 16.8x 12.0x Cash from Investing 4.6 (58.4) (94.4) (86.3)TEV / EBITDA n/a 121.1x 56.4x 214.7x 148.3x 67.2x Cash from Finaning 1.0 79.2 164.2 168.3TEV / EBIT n/a NM 93.9x NM NA NA Change in Cash 7.8 35.6 102.1 105.8P / E n/a NM 159.4x NM NA 157.7xP / BV n/a 6.3x 3.0x 6.7x NA NA Balance Sheet Latest1 Year GrowthTotal Revenue 74.2% 116.8% 76.9% 69.9% 61.7% 39.9% Total Assets 24.0 116.7 304.2 317.5EBITDA NM NM 112.4% NM 72.9% 120.6% Total Liabilities 6.6 15.5 23.9 25.9EBIT NM NM 155.9% NM NA NA Total Equity 17.4 101.2 280.3 291.6Net Income NM NM 438.9% NM NA NAEPS NM NM NM NM (97.3%) 11298.8%
VALUATION MULTIPLES CHART FINANCIAL SUMMARY CHART
Legg Mason Capital Management LLC, PAR Capital Management, Inc., Technology Crossover Ventures
NA
Income Statement
Cash Flow Statement
74.2%
116.8%
76.9%61.7%
39.9%
0.0%20.0%40.0%60.0%80.0%
100.0%120.0%140.0%
2010 2011 2012 2013E 2014E
YOY Growth
Total Revenue
0.0x2.0x4.0x6.0x8.0x10.0x12.0x14.0x16.0x18.0x
0
50
100
150
200
250
300
2010 2011 2012 2013E 2014E
(in $
mill
ions
)
Valuation
Revenue TEV / Revenue
0.01.02.03.04.05.06.07.08.09.0
150.00
170.00
190.00
210.00
230.00
250.00
270.00
290.00
310.00
8/12
Volu
me(
in m
illio
ns)
Pric
e
Volume z Price
29
Confidential
Additional Real Estate M&A Activity
Date Buyer SellerEV
(mm)EV/ REV
EV/ EBITDA
02/03/12 - CallSource, Inc., Multifamily Housing Division - - -09/14/11 - LPS Real Estate Group Inc., Assets (nka:Real Estate Digital) - - -05/18/11 - FIO SYSTEMS AG - - -04/01/11 - Orion Softw are Inc. - - -04/02/12 Alere Inc. (NYSE:ALR) eScreen $340.0 2.8x -06/06/10 Altegrity, Inc. Kroll, Inc. $1,130.0 1.7x -08/19/11 California Regional Multiple Listing Service, Inc. SoCalMLS Inc. - - -02/06/07 Consumer Source Holdings, Inc. RentalHouses.com, Inc. - - -04/24/13 CoreLogic, Inc. Fiserv, Inc., Case-Shiller $6.0 - -01/11/11 CoreLogic, Inc. RP Data Pty Ltd. $266.3 3.2x 11.8x11/04/10 CoreLogic, Inc. RealtyBid International, Inc. $19.0 - -04/27/11 CoStar Group Inc. LoopNet, Inc. $654.2 5.5x 20.3x05/14/12 Documotive Limited Fusion Information Systems Ltd - - -05/15/13 DocuSign, Inc. Cartavi, Inc. - - -08/01/07 Domin-8 Enterprise Solutions, LLC Spectra Computer Services Ltd. - - -03/21/07 Dominion Enterprises, Inc. eNeighborhoods, LLC - - -06/24/10 Experian plc RentBureau, LLC - - -01/03/13 Hanley Wood Market Intelligence, LLC (nka:Metrostudy Inc.) Metrostudy Inc. - - -07/09/12 Haufe-Lexw are GmbH & Co. KG ESS EDV-Softw are-Service AG - - -04/08/13 HomeAdvisor, Inc. Werkspot B.V. - - -04/02/12 HomeAw ay Spain S.L. Top Rural S.L. $18.7 3.2x -05/11/11 HomeAw ay, Inc. Second Porch Inc. $3.0 - -04/04/11 HomeAw ay, Inc. REA Group Ltd., realholidays.com.au $2.1 - -10/20/10 HomeAw ay, Inc. Escapia, Inc. $10.3 - -10/05/10 HomeAw ay, Inc. Instant, Inc. $27.2 - -02/21/06 Homestore, Inc. (nka:Move, Inc.) Moving.com, Inc. $8.9 - -11/05/07 Housevalues Inc. (nka:Market Leader, Inc.) Realty Generator, LLC $12.2 - -10/31/05 Housevalues Inc. (nka:Market Leader, Inc.) The Loan Page, Inc. $7.1 - -05/21/07 Immonet GmbH FIO SYSTEMS AG - - -06/11/13 Immow are24 GmbH AWImmow are GmbH - - -08/23/12 ImovelWeb Imóvel PRO - - -06/04/02 Intuit Inc. Intuit Real Estate Solutions, Inc. (nka:MRI Softw are LLC) $92.0 - -11/08/12 Lasso Data Systems Inc. UFollow Up LLC - - -03/31/10 LoopNet, Inc. Reaction Web, Inc. - - -04/08/08 LoopNet, Inc. REApplications, Inc. $9.2 - -08/02/07 LoopNet, Inc. Cityfeet.com, Inc. $18.0 - -
30
Confidential
Additional Real Estate M&A Activity (Cont.)
Date Buyer SellerEV
(mm)EV/ REV
EV/ EBITDA
09/21/11 Market Leader, Inc. RealEstate.com, Inc. $8.3 - -08/04/11 Market Leader, Inc. SharperAgent Inc. $2.0 0.6x -01/20/11 Market Leader, Inc. kw kly, LLC $1.3 - -10/28/10 Market Leader, Inc. ActiveRain Corp. $2.5 - -09/07/10 MediFAX-EDI Holding Company, Inc. Chamberlin Edw ards & Assoc. $254.1 2.9x 11.7x09/04/12 Move Sales, Inc. TigerLead Solutions, LLC $22.0 - -09/21/10 Move Sales, Inc. Threew ide Corporation $13.1 - -05/02/13 Move, Inc. ABC Holdings, LLC $2.3 - -10/11/12 Moving.com, Inc. Relocation.com LLC $11.5 - -12/21/11 MRI Softw are LLC Realty DataTrust Corporation - - -10/03/11 MRI Softw are LLC Bostonpost Technology - - -06/27/11 MRI Softw are LLC Workspeed Management, LLC - - -06/04/11 Onthehouse Holdings Limited Console Australia Pty. Ltd. $37.6 - -03/22/12 PRIMEDIA Inc. (nka:RentPath Inc.) Viva Group, Inc. $145.0 - -01/31/06 PRIMEDIA's Consumer Guides Group Rentals, Inc. - - -02/17/12 Private Equity Consortium Transunion $3,202.6 3.1x 9.1x11/14/12 Qube Global Softw are Ltd. SPA Microsystems Ltd - - -03/31/07 RE FormsNet, LLC (nka:zipLogix, Inc.) Real Estate Business Technologies, LLC - - -07/23/12 RealPage, Inc. Rent Mine Online Inc. $15.5 10.3x -01/04/12 RealPage, Inc. Vigilan Incorporated $5.0 - -08/22/11 RealPage, Inc. Multifamily Technology Solutions, Inc. $74.9 4.5x -07/29/11 RealPage, Inc. Senior-Living.com, Inc. $14.8 3.5x -05/05/11 RealPage, Inc. Compliance Depot LLC - 5.5x -11/03/10 RealPage, Inc. Level One Inc. $62.0 2.7x -02/01/10 RealPage, Inc. Domin-8 Enterprise Solutions, LLC $12.9 - -11/10/09 RealPage, Inc. Propertyw are, Inc. $12.5 - -09/23/09 RealPage, Inc. EverGreen Solutions, Inc. $0.9 - -09/21/09 RealPage, Inc. A.L. Wizard, Inc. $2.8 - -10/14/08 RealPage, Inc. OpsTechnology, Inc. $23.0 - -01/07/05 RentPayment.com, Inc. eRentPayer, Inc. - - -05/12/08 re-plus Inc. Visual Research Co. Ltd. $8.0 0.7x -02/03/13 Reply! Inc. HomeGain.com, Inc. - - -05/31/12 Reply! Inc. QualitySmith, Inc. - - -01/25/11 Reply! Inc. FastRoofingBids.com and FastRoofingLeads.com and Agitantis LLC - - -06/07/10 Reply! Inc. Contractors.Com, Certain Assets - - -09/14/10 RETransform PropertyView Solutions, Inc. - - -
31
Confidential
Additional Real Estate M&A Activity (Cont.)
Date Buyer SellerEV
(mm)EV/ REV
EV/ EBITDA
12/05/11 Sterling Infosystems Acxiom ISS, Inc. $74.0 1.5x -02/05/07 Stew art Transaction Solutions, Inc. Reveal Systems, Inc. - - -07/02/12 The Corporate Executive Board Company (UK) Ltd. SHL Group Ltd. $660.0 3.2x 11.6x01/20/12 The Home Depot, Inc. Red Beacon, Inc. - - -05/15/11 TPG Capital PRIMEDIA Inc. (nka:RentPath Inc.) $526.8 2.3x 7.8x05/08/13 Trulia, Inc. Market Leader, Inc. $314.3 4.4x -12/21/10 Trulia, Inc. Movity.com - - -12/01/09 Vista Equity Partners, Vista Equity Fund III, L.P. Intuit Real Estate Solutions, Inc. (nka:MRI Softw are LLC) $128.0 1.7x -05/10/12 Xceligent, Inc. ePropertyData.com LLC - - -09/19/11 YapStone, Inc. PropertyBridge, Inc. - - -04/30/01 YapStone, Inc. RentPayment.com, Inc. - - -07/03/13 Yardi Systems, Inc. Pierce-Eislen, Inc. - - -05/17/12 Yardi Systems, Inc. ista North America, Inc., Multifamily Services Group - - -04/03/12 Yardi Systems, Inc. Lead Tracking Solutions Corporation - - -01/05/12 Yardi Systems, Inc. ALMSA Corporation - - -08/16/11 Yardi Systems, Inc. Peak Insurance Advisors, LLC - - -02/01/11 Yardi Systems, Inc. Real Estate Electronic Publishing Company Inc. - - -09/30/10 Yardi Systems, Inc. Point2 Technologies Inc. - - -08/04/10 Yardi Systems, Inc. Information Systems & Services, Inc. - - -05/05/10 Yardi Systems, Inc. DIY Real Estate Solutions Inc. - - -03/30/10 Yardi Systems, Inc. Property Research Partners LLC - - -02/16/10 Yardi Systems, Inc. RentGrow , Inc. - - -12/07/09 Yardi Systems, Inc. Commercial Property Executive and Multi-Housing New s - - -10/01/09 Yardi Systems, Inc. Energy Billing Systems, Inc. - - -04/28/08 Yardi Systems, Inc. ARGUS Softw are, ARGUS Property Management and ARGUS INSIGHT Reporting - - -07/09/07 Yardi Systems, Inc. SiteStuff, Inc. - - -04/05/06 Yardi Systems, Inc. rCash, Inc. - - -04/23/03 Yardi Systems, Inc. Realm Business Solutions Inc., Realm Enterprise and BJ Murray Product Lines - - -11/26/12 Zillow , Inc. HotPads, Inc. $15.9 - -11/05/12 Zillow , Inc. Mortech Inc. $17.4 - -10/31/12 Zillow , Inc. Buyfolio, Inc. - - -05/02/12 Zillow , Inc. RentJuice Corporation $37.4 102.4x -11/02/11 Zillow , Inc. Diverse Solutions, Inc. $7.5 - -04/11/11 Zillow , Inc. Postlets, Inc. - - -08/01/11 zipLogix, Inc. Realfast, Inc. - - -06/26/09 Zoopla Ltd. Propertyfinder Holdings Limited - - -