2016 Mid-Year TECHNOLOGY M&A REVIEW - The · PDF file2016 Mid-Year TECHNOLOGY M&A REVIEW ... and political turmoil sapping confidence on both sides of the Atlantic, ... Symantec Corp

S P E C I A L R E P O R T

2016 Mid-Year

TECHNOLOGY M&AREVIEW

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2016 Mid-YearTECHNOLOGY M&A REVIEWS P E C I A L R E P O R T

Table of Contents

INTRODUCTIONAfter a record-breaking year, a cooldown was expected. But deal-making actually held up well in the first half of 2016.

Page 3

THE YEAR IN TECH SO FARMicrosoft and LinkedIn made the biggest news, China continued to make waves and valuations kept climbing.

Page 4

TOP 10 U.S. TECHNOLOGY M&A DEALSAnnounced and not withdrawn during the First Half of 2016.

Page 7

TOP 5 POTENTIAL M&A TARGETSThe companies still available include prominent names in enterprise software, social media and music.

Page 9

KEY DECISION-MAKERS AT THE TOP FIVE TARGETSInterested in acquiring one of these companies? Here are the key executives and independent direcctors you’ll need to contact.

Page 10

WHERE ARE THEY NOW?Executive and director moves at select merger partners.

Page 15

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2

Microsoft and LinkedIn lead the M&A parade as the

U.S. market stays strong after a record-breaking 2015.

Technology companies are among the largest and

most important economic actors in the U.S., so the

industry generally commands the attention of financial

professionals and the general public.

That attraction is never more powerful than

when two tech giants hook up in a blockbuster

merger. The first half of 2016 saw one of those

major transactions when software behemoth

Microsoft Corp. agreed to acquire LinkedIn Corp.,

the pioneering social media network for business

people, in a transaction valued at $26.2 billion.

Given the ubiquity of both merger partners,

everyone reading this is likely just a click away

from a product supplied by one of them. So the

deal generated some of the biggest headlines

we’ve seen so far this year. The deal seems even

larger and more important given the continued

strength of the M&A market.

Big Names, Big-Ticket Deals and Big Countries Make Big Waves in Technology

INTRODUCTION

32016 Mid-YearTECHNOLOGYM&A REVIEWS P E C I A L R E P O R T

The Year in Tech M&A So Far

After the feverish pace of transactions last year, many experts expected

a letdown. And with the equity markets getting off to an uncertain start

and political turmoil sapping confidence on both sides of the Atlantic,

the falloff might have been dramatic. However, M&A activity has held up

remarkably well.

“Given some of the headwinds we’ve experienced — market volatility,

Brexit, gridlock in Washington — the M&A market has been resilient,” says

David Henkel, vice president and chief technology officer of Toppan Vite, a

global leader in financial communication. “The U.S. technology industry in

particular is producing some significant transactions. And we already have

yet another transformative deal with Verizon acquiring Yahoo.”

Over 1,900 transactions were announced in the first half of 2016, up from

just over 1,400 for the same period a year ago, according to data from The

Deal. In the technology space, nearly 460 deals were announced in the first

half this year, compared to 285 last year. Of that total, 29 deals were valued

at more than $1 billion, and five topped the $10 billion mark.

While Microsoft-LinkedIn is the largest technology deal currently

in the works, the biggest deal of the year won’t happen. In March,

Honeywell International Inc. walked away from its proposed $91

billion acquisition of United Technologies Corp. The target resisted

the unsolicited bid, suggesting that the combination would likely sink

under regulatory scrutiny.

Honeywell Chairman and CEO Dave Cote continued to extol the virtues of

the deal as he announced the end of discussions and the companies have

held merger talks in the past. In addition, UTC’s stock price fell about 5%

after Honeywell pulled out, leading some observers to speculate that the

target might feel pressure to resurrect the potential deal. But many experts

and shareholders share UTC’s regulatory fears, so the deal is unlikely to

show up in the year-end totals.

The Big Numbers First Half

1,900Announced M&A transactions 1st half of 2016

460 (24%)Technology M&A transactions

29 (6%)Valued at more than $1 billion

5 (1%)Topped the $10 billion mark


The Year in Tech M&A Continued

Despite that high-profile collapse, the technology industry continues

to draw attention, investment and takeover bids. And Microsoft and

LinkedIn weren’t the only household names to make M&A news. For

example, car hire service Uber Technologies Inc. in June received a

$3.5 billion infusion from Saudi Arabia’s Public Investment Fund. The

investment, and other recent fundraising efforts, reportedly valued

Uber at more than $60 billion.

Software was a particularly active sector for M&A in the first half,

with the biggest deal being Thoma Bravo LLC’s $3 billion deal for QLik

Technologies Inc. The biggest name, though, was customer relationship

management specialist Salesforce.com Inc., which paid $2.8 billion for

Demandware Inc., just missing the top 10. Other significant software

deals included Vista Equity Partners LLC’s $1.8 billion buyout of Marketo

Inc. and the $509 million acquisition of SciQuest Inc. by Accel-KKR LLC.

Elsewhere, Rovi Corp, which provides guides that allow TV viewers

to search and select programs, paid $1.1 billion in May for TiVo Inc.,

which makes devices that record and stream those TV shows. On the

hardware front, printer maker Lexmark International Inc. agreed in

April to be acquired by a Chinese group led by Apex Technology Co. Ltd.

and PAG Asia Capital.

The Lexmark acquisition highlights another characteristic of this M&A

market: The enthusiastic participation of ambitious buyers from China.

In February, Tianjin Tianhai Investment Co. Ltd. paid $6 billion for Irvine,

Calif.-based Ingram Micro Inc., a distributor of IT products. In April,

a group of investors led by Libin Sun offered to acquire chipmaker

Integrated Device Technology Inc., of San Jose, Calif., for $4 billion.

One word of caution: While the investors reportedly held a stake

in the target, whether the bid is a genuine expression of interest

remains unclear.

Whether the IDT deal materializes, Chinese buyers will likely rank

among the most active as consolidation continues in several

technology sectors, including software and semiconductors.

Software Rising Tech Sector

$3.5 B InvestmentTarget Investor

Uber Technologies Inc.

Saudi Arabia’s Public Investment Fund.

$3 B AcquisitionTarget Buyer

QLik Technologies Inc.

Thoma Bravo LLC

$2.8 B AcquisitionTarget Buyer

Demandware Inc. Salesforce.com Inc.


Marketo Inc. Vista Equity Partners


Tivo Inc. Rovi Corp.


The Year in Tech M&A Continued

“We shouldn’t underestimate the influence China will continue

to exert on the global economy,” notes Henkel of Toppan Vite.

“Companies there are pursuing growth as aggressively as their rivals

around the world.”

The list of potential targets also includes several household names,

chief among them Twitter Inc. The social media and micro-blogging

service has had difficulty convincing Wall Street that it can continue

to add users and increase revenue, raising the question of whether it

should find a larger, more well-heeled partner.

That chatter became louder after the LinkedIn deal, as the

transaction is seen as a model for Twitter. The talk grew louder still

after Salesforce.com CEO Marc Benioff let it be known that he had

considered an acquisition of Twitter before launching his bid for

Demandware, a deal that closed in July.

Other big names potentially on the block include chipmaker Xilinx Inc.

— which could draw interest from larger rivals such as Qualcomm Inc.

or Broadcom Ltd. — and International Game Technology, a Las Vegas-

based casino game maker that is apparently hoping for a better deal

than what might result from its discussions with Italy’s Gtech SpA.

While it’s not clear which, if any, of those companies will end up as

takeover targets, the M&A market should remain strong for the rest

of the year. The next big headlines could come anytime and could

certainly include several well-known companies. Stay tuned.

“Barring some unforeseen event, the M&A market should solidify as

some of the geopolitical clouds begin to clear in the second half,” says

Toppan Vite’s David Henkel. “Risk and uncertainty won’t magically

vanish, but executives should be better able to assess the landscape as

new realities settle in.”

ChinaGeographic Hotspot


Lexmark Interna-tional Inc.

Apex Technology Co. Ltd.

$6 B AcquisitionTarget Buyer

Ingram Micro Inc. Tianjin Tianhai Investment Co. Ltd.

$4 B OfferTarget Potential Buyer

Integrated Device Technology Inc.

Libin Sun


Source: BoardEx

Top Ten U.S. Technology M&A Deals

DATA HIGHLIGHTS

Announced and not withdrawn during the First Half of 2016

01 LinkedIn Corp. Target

$26.2 billionDeal Value

Microsoft Corp.Buyer

Internet Sector

June 13 Date

Sale touched off chatter about a possible deal for Twitter

02 ADT Corp. Target


Apollo Global Management LLC.Buyer

InternetSector

Feb 16Date

Deal continues a long-running consolidation process in home security; target will be com-bined with the buyer’s Protection 1 business

03 Hewlett Packard Enterprise Inc. (Servers, Storage business) Target


Computer Sciences Corp.Buyer

HardwareSector

May 24Date

Sale continues the transformation of a Silicon Valley icon

04 Ingram Micro Inc. Target

$6 billionDeal Value

Tianjin Tianhai Investment Co. Ltd.Buyer

IT ProductsSector

Feb 17Date

Because the target is a distributor, the deal may not draw regulatory scrutiny

05 Leidos Holdings Inc. Target


Lockheed Martin Corp.Buyer

IT ServicesSector

Jan 26Date

Lockheed will combine its government IT ser-vices business with Leidos in a Reverse Morris Trust transaction


Source: BoardEx

Top Ten U.S. Technology M&A Deals

DATA HIGHLIGHTS

Announced and not withdrawn during the First Half of 2016

06 Blue Coat Systems Inc. Target


Symantec Corp.Buyer

Cybersecurity Sector

June 13 Date

Target had been planning an IPO; deal represents buyer’s largest purchase since its 2005 acquisition of Veritas Software

07 Integrated Device Technology Inc.Target


Investor Group Led By Libin SunBuyer

Semiconduc-torsSector

Feb 16Date

Target released a statement casting doubt on the bid’s seriousness

08 Lexmark International Inc. Target


Apex Technology Co. Ltd., PAG Asia Capital, Legend CapitalBuyer

Hardware/SoftwareSector

Apr 19Date

Deal is subject to a U.S. national security review

09 Perot Systems Corp. Target


NTT Data Corp.Buyer

IT ServicesSector

Mar 28Date

Target was part of EMC Corp., which was acquired by Dell Inc. in October 2015

10 Qlik Technologies Inc.Target


Thoma Bravo LLCBuyer

SoftwareSector

June 2Date

Price represents a 40% premium to Qlik’s stock price before activist fund; Elliott Management disclosed a position in the company


Source: BoardEx

Top Five Potential M&A Targets

DATA HIGHLIGHTS

01 Level 3 Communications Inc.Potential Target

$20.5 billion Market Cap

Telecom Sector

Fiber optic network operator is attractive to bandwidth-hungry service provders like Google or Comcast

02 Workday Inc. Potential Target


Software Sector

Enterprise cloud software provider could be in play following the LinkedIn deal; SAP is a possible suitor

04 Pandora Media Inc. Potential Target


Internet Sector

Keith Meister’s Corvex Mangement holds 10% of the online radio company and sees “significant interest” from suitors, most recently from Liberty Media

03 Twitter Inc. Potential Target


Internet Sector

Another potential benficiary of Microsoft’s spending; some investors believe that unsuccessful LinkedIn suitors might look here

05 Aveva Group plc Potential Target


Software Sector

An agreed 2015 merger with Schneider Electric fell through; GE or Emerson Electric may be attracted

Technology Sector


Source: BoardEx

Key Decision-Makers at the Top Five Targets

DATA HIGHLIGHTS

Technology Sector

01Level 3 Communications Inc.

Jeff StoreyCEO

Independent Directors

Kevin (Chili) Patrick Chilton Retired Air Force Generalt

Steven (Terry) Terrell Clontz Former CEO, Starhub Ltd.

James O. Ellis Jr. (Independent Chairman) Retired U.S. Navy Admiral

Irene M. Esteves Former CFO, Time Warner Cable

Kevin W. Mooney EVP, Blackbaud Inc.

Lim (Peter) Huat Seah Former CEO, Singaore Technologies

Peter H. Van Oppen Managing Partner, Trilogy Equity Partners

Michael (Mike) Mahoney Former CEO Commonwealth Telephone Enterprises

Spencer Hays Former SVP/GC Time Warner Inc.

01Level 3 Communications Inc.

Jeff StoreyCEO


Kevin (Chili) Patrick Chilton Retired Air Force General

Steven (Terry) Terrell Clontz Former CEO, Starhub Ltd.

James O. Ellis Jr. (Independent Chairman) Retired U.S. Navy Admiral

Irene M. Esteves Former CFO, Time Warner Cable

Kevin W. Mooney EVP, Blackbaud Inc.

Lim (Peter) Huat Seah Former CEO, Singapore Technologies

Peter H. Van Oppen Managing Partner, Trilogy Equity Partners

Michael (Mike) Mahoney Former CEO, Commonwealth Telephone Enterprises

Spencer Hays Former SVP/GC, Time Warner Inc.


Source: BoardEx


DATA HIGHLIGHTS

Technology Sector

02Workday Inc.

Aneel BhusriCEO


George J. Still Jr. (Lead) Partner Emeritus, Norwest Venture Partners

Albert (Skip) George Battle Former CEO, Ask Jeeves

Christa Davies CFO, Aon plc

Michael (Mike) McNamara Former COO, Flextronics International

Jerry Yang Co-Founder, Yahoo!


Source: BoardEx


DATA HIGHLIGHTS

Technology Sector

03Twitter Inc.

Jack DorseyCEO


Dame Marjorie Scardino (Lead) Former CEO, The Economist

Peter H. Fenton General Partner, Benchmark Capital

Hugh Johnston CFO, Pepsico Inc.

Baroness (Martha) Lane-Fox of Soho Co-Founder, LastMinute.com

Debra L. Lee CEO, BET Networks

David S. Rosenblatt CEO, 1stdibs.com Inc.

Evan Williams CEO, Obvious Corp.


Source: BoardEx


DATA HIGHLIGHTS

Technology Sector

04Pandora Media Inc.

Tim WestergrenCEO


James M.P. Feuille (Independent Chairman) General Partner, Crosslink Capital

Peter Chernin CEO, Chernin Group

Peter Gotcher (Lead) Former Partner, Redpoint Ventures

Roger Faxon Former CEO, EMI Group

Anthony Vinciquerra Former CEO, Fox Networks

Elizabeth (Betsey) Nelson Former CFO, Macromedia

Mickie Rosen Former SVP, Yahoo!


Source: BoardEx


DATA HIGHLIGHTS

Technology Sector

05Aveva Group plc

Richard LongdonCEO


Philip (Phil) Aiken (Chairman) Former Group President, BHP Billiton

Jennifer Allerton Former CIO Unilever NV

Jonathan Brooks Former CFO, ARM Holdings plc

Philip Dayer Former Head of Corporate Finance, Barclays Capital Research

Christopher (Chris) Humphrey Former Group CEO, Anite plc


Where are they now?Executive and Director Moves at Select Merger Partners

Jahangir Mohammad, General Manager(CEO)

Scott Barkley, Division Head(Vice President - Product)

Macario Namie, Division Head(Vice President - Strategy)

Cindy Patterson, Division Head(Chief Customer Officer)

Julian Karl Ong, Executive(Chief Legal Officer)

Daniel Rabinovitsj, Division COO(COO)

Georges Antoun

Barton Burstein

Gaurav Garg

Stewart Grierson

Mohanbir Singh Gyani

Richard Lynch

Steven (Terry) Clontz

Jasper Technologies(Cisco Systems)

Ruckus Wireless(Brocade Communciations)

Executives joining combined entity(Old Title)


Target(Buyer)

Target(Buyer)

Departing directorsDeparting directors

Departing directors


Where are they now?Executive and Director Moves at Select Merger Partners

Daniel Bresingham, Chief of Staff(EVP/CFO)

P. Gray Finney, SVP/Chief Legal Officer(SVP/General Counsel)

Timothy Whall, President/CEO(CEO)

Donald Young, SVP/COO/CIO(SVP/COO/CIO)

Jamie Haenggi, SVP/Chief Marketing Officer(SVP/Chief Marketing Officer)

Naren Gursahaney (President/CEO)

Daniel Bresingham

P. Gray Finney

Timothy Whall

ADT(Temasek/Protection One)


Directors joining combined entityTarget(Buyer)

Departing executives Departing directors

Thomas Colligan

Richard Daley

Timothy Donahue

Robert Dutkowsky

Bruce Gordon

Naren Gursahaney

Bridgette Heller

Kathleen Hyle

Christopher Hylen


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2016 Mid-Year TECHNOLOGY M&A REVIEW - The · PDF file2016 Mid-Year TECHNOLOGY M&A REVIEW ... and political turmoil sapping confidence on both sides of the Atlantic, ... Symantec Corp