Embed Size (px)
Citation preview
CONFIDENTIAL
Global Capital Markets & Industry Outlook
April 12, 2016
CONFIDENTIAL
Bryan Dow, Executive Director (Silicon Valley)
Senior member of Mooreland Partners Industrial Technology Group
Lead Mooreland’s Drone Coverage
Advise companies in mergers, acquisitions, sales and raising growth capital
11+ years in technology M&A with over 50 completed transactions
–Previously Head of the Clean Energy and Industrial Technology Investment Banking Group at ThinkEquity
–Prior to ThinkEquity, member of the Technology Investment Banking Group at Needham & Company
–Completed over 50 transactions
BS from the Leavey School of Business at Santa Clara University
Mooreland Presenter
2
October 2015
has been acquired by
has acquired
September 2015
June 2015
has been acquired by
CONFIDENTIAL
Mooreland Overview
Technology FocusedIndustrial Technology | Digital Media and Internet
| Communications Technology | Enterprise Software
100% Partner Owned
Founded 2002One Global P&L
Global ReachServing North American, European and Asian
markets from offices in Silicon Valley, New York and London
Team of 4813 Nationalities
10 Languages Spoken
Ranked #1in Mid-Market
Technology M&A28 deals completed in 2015
UnrivalledExperience
1,000+ Deals Closed in Combined Careers
3
CONFIDENTIAL
Focus on Key Technology Sectors
Energy EfficiencyEnergy Storage & Alternative
Energy
Emerging Technologies
Semiconductors & Components
Advanced Manufacturing
Supply Chain Services
Monitoring, Analytics
& Controls
Energy AnalyticsPower & Energy
Devices and Systems
Electronics& Materials
Recycling
Optics &Photonics
Additive Manufacturing / 3D Printing
DesignServices
Smart Sensors
Energy Management
& SecuritySolar & Wind Fuel Cells PCB & Flex
Automation Systems and
Software
Advanced Manufacturing
Services
Control Systems & Software
Advanced Lighting
Distributed Generation
Services
Energy Harvesting
MEMS &Semiconductors
Process Equipment & Analytical
InstrumentationEMS
Industrial Internet of ThingsTe
chn
olo
gies
, So
luti
on
s &
Se
rvic
es
Gro
wth
Mar
kets
SmartMobility
DronesAdvanced
Robotics and Automation
Connected Factories &
Offices
INDUSTRIAL TECHNOLOGIES& ELECTRONICS
ENTERPRISE SOFTWARE & SERVICES
COMMUNICATIONS TECHNOLOGIES
DIGITAL MEDIA
Industrial Technologies & Electronics
4
CONFIDENTIAL
Extensive Experience in Industrial Technology M&A
Deals led by senior bankers at previous firm
December 2009
has acquired
has been acquired by
July 2011
has been acquired by
May 2010
a subsidiary of
has acquired
June 2010
has divested its consumer xenon flash business to
June 2010
a portfolio company of GGV Capital
has been acquired by
January 2011
has secured $15.0 millionin Series E Funding
December 2010
has acquired
January 2011
has been acquired by
April 2011
has been acquired by
June 2011
has been acquired by
February 2011
has been acquired by
May 2009
has secured €12.5 millionin equity financing
July 2009 November 2008
has sold LFCC Technology to
October 2008
has acquired has been acquired by
January 2008
has been acquired by
August 2008
has sold its Circuit Protection Business to
October 2008
has been acquired by
January 2008 November 2007
has acquired
has been acquired by
May 2012
has been acquired by
March 2012June 2012
has been acquired byhas been acquired by
September 2011
has divested its Spire
Semiconductor Business
March 2012June 2012
has been acquired by
June 2012
has been acquired by
July 2012
has secured an undisclosed round of funding
December 2012
has acquired
March 2013
has been acquired by
has divested its Semiconductor Systems
Business to
May 2013May 2013
has been acquired by
August 2013
has been acquired by
June 2013
has been acquired by
July 2013
has been acquired by
October 2013
Acquisition of majority interest and investment by
has been acquired by
February 2014
has been acquired by
April 2014
has been acquired by
April 2014
and portfolio company
July 2014
has divested its Disc Publishing business to
May 2015
has merged with has secured growth equity investment from
October 2014
has been acquired by
October 2014January 2015
has been acquired by
February 2015
has been acquired by
WIOT Technologies Oya holding company
backed by has acquired
March 2015
has been acquired by
April 2015
a portfolio company of
June 2015
has been acquired by
October 2015
has been acquired by
has acquired
September 2015
5
Advanced Robotics and Automation
CONFIDENTIAL
The industrial segment will continue to represent the majority of near-term revenue, however…
Technological advances are enabling new markets and applications
Increased start-up activity with funding from VCs, strategic investors and government
Emergence of “out of segment buyers” (i.e. Teradyne, Google, Amazon) targeting very large new market opportunities
Robot is becoming a symbiotic partner to humans with the accelerating adoption of “Cobots” into integrated work environments
Emerging “Blue Ocean” market applications likely to be larger than legacy industrial market
The Robotics Industry Has Been Experiencing a “Renaissance”
Enabling Technologies
Advanced Sensors and Detectors
Advanced Precision and Motion Control
Intelligent Navigation
Mapping SystemsConnectivity and
Smart Device Enabled
Data AnalyticsVision Technologies
Cooperative Ability with Humans
Advanced Processors and
Microcontrollers
Predictive Motion Planning
Force Sensing
Speech Recognition
12
CONFIDENTIAL
Robotics Markets are Evolving - Emerging “Blue Ocean” Opportunities
Market Example Applications Example End Customers Major Players
• Industrial
• Machine Tending
• Pick-and-place
• Packaging
• Process Application
• Assembly
• Assembly/Machine Tending
• Product Testing
• Large enterprises: lighter payload apps that require precision and safety
• Small to medium size enterprises –mainly mfg. and material handling Collaborative /
/
• Cleaning
• Smart Home Technology
• Outdoor Maintenance
• Video Collaboration
• Robotic Kiosks
• Mapping / Navigation
• Security / Safety
• Consumers
• Schools
• Retail
Consumer
• Precision Agriculture
• Film / Photo / Video
• Inspection / Monitoring
• Mapping / Surveying
• Public Safety
• First Response
• Consumers and Prosumers
• Government / Defence / Safety
• Surveillance organizations
• Agriculture Drones
• Self-Driving Cars
• Underwater Vehicles
• Consumers and prosumers
• Oil and gas companies
• Mapping and navigation companies
• Defence organizationsOther
Autonomous
• Material transport
• Logistics Management
• Mfg line replenishment
• Security / Defense
• Asset tracking • Manufacturing operations
• Warehouse and logistic operations
• Defence & Public securityMobile
/
• Surgical Procedures
• Surgical Training
• Telemedicine
• Caregiver Support
• Bionics• Hospital
• Healthcare facilities
Med / Surg.
Auris Surgical Robotics
8
CONFIDENTIAL 9
China is the world’s largest consumer of robotics
Market will continue to be a growth market as robotics penetration is still very low vs. more advanced markets
– 23 robots per 10,000 workers vs. over 300 robots per 10,000 workers in Japan & S. Korea
Government support and subsidies driving growth
–Goal of creating 4 or 5 robotic “champions”
–Goal of supplying 1/3 of domestic demand from domestic robotic suppliers (on track)
–Handing out RMB200-500 million /yr subsidies
Number of Chinese Robotics growing rapidly
– ~420 domestic robotics companies
Increasing M&A and funding interest
– Investments in robotics are to hit record levels -$500M+ in 2015
– Increased interest in global M&A as a means to acquire technologies and enter the market
China is Now the World’s Largest Market for RobotsChina Robotics Market Dynamics Global Robot Stock – Significant Growth in China Expected
182
311
237
428
343292
0
100
200
300
400
500
China EU North America
2014 2017
Un
its
in ‘0
00
s
Select Chinese Robotics and Automation Players
Public Private
Market Cap: $6.2BEV/LTM Rev.: 22.4xEV/LTM EBITDA.: NM
Market Cap: $962MEV/LTM Rev.: 12.8xEV/LTM EBITDA.: NM
Market Cap: $1.2BEV/LTM Rev.: 1.9xEV/LTM EBITDA.: 6.5x
Market Cap: $926MEV/LTM Rev.: 3.7xEV/LTM EBITDA.: 62.5x (Drones)
(Drones)(Consumer)
(Consumer)(Industrial)
(Industrial and Consumer)
Source: International Federation of Robotics
CONFIDENTIAL
Movement of Private Capital into the Sector has Accelerated
Robotics and Automation private placement fundings have risen significantly since 2014, in both volume and $ amount (a record of $923M was invested in Robotics and Automation in 2015)
The market has also witnessed an influx of strategic investors (i.e. Bosch, KUKA, Mitsui, GE, Flextronics, iRobot, ABB, Nike, Foxconn, Alibaba, QUALCOMM, SanDisk, Shanghai Electric, etc…)
10
Sources: CapitalIQ, 451 Research, Press Releases, Internal Estimates
Private Placement in Robotics Since 2008 - Present
2008 2009 2010 2011 2012 2013 2014 2015
Total Funding $42 $76 $85 $224 $198 $269 $447 $923
# of Investments 10 18 17 30 29 45 71 75
10
18 17
30 29
45
7175
0
10
20
30
40
50
60
70
80
2008 2009 2010 2011 2012 2013 2014 2015
(# o
f fu
nd
ings
)
CONFIDENTIAL 11
Select Robotics Private Placements – Focus on New ApplicationsCompany Investors Category Date Amount Raised Total Raised
Mitsubishi UFJ Capital Co. Ltd. Mar-2016 $10.6M $10.6M
Accel Partners Mar-2016 Undisclosed Undisclosed
EDB Investments Pte. Ltd., Intel Capital, Northern Light Venture Capital
Jan-2016 $15.0M $17.0M
Haiyin Venture Partners, Taylor Ventures Dec-2015 $9.5M $9.5M
Pontifax Ltd., Khosla Ventures, Syngenta Ventures, Innovation Endeavors, Data Collective, Monsanto Growth Ventures
Nov-2015 $17.1M $30.4M
Summit Partners Oct-2015 $46M $46M
BlueTree Capital, Eagle Ventures, Hercules, Pittsburgh Life Sciences Greenhouse, Slater Technology
Sep-2015 $25M $134M
SoftBank Capital, Shasta Ventures, O'Reilly AlphaTech Ventures Jun-2015 $20M $23M
Andreessen Horowitz, First Round, GE Ventures, Kleiner Perkins Caufield & Byers
Jun-2015 Undisclosed $40M
ABB, Formation8, NIKE Jun-2015 $15M ~$20M
Intel Capital Apr-2015 $75M $135M
J.F. Shea, Mayfield, QUALCOMM, Atlantic Bridge, O'Reilly AlphaTech, True Ventures, Foundry Group; WestSummit, SanDisk
Feb-2015 $64M ~$100M
UAV
Gripper
UAV
UAV
Mobile
Healthcare
UAV
Gripper
Agricultural
Mobile
Mobile
Gripper
CONFIDENTIAL
Robotics M&A activity is growing but still relatively small
Historically acquisitions had focused on consolidation
However, buyers are starting to focus on emerging tech and next gen apps
“Out-of-segment” buyers increasing
Notable M&A Transactions
12
8
1412
2119
23
2010 2011 2012 2013 2014 2015
Nu
mb
er
of
Tran
sact
ion
s
Robotics and Automation M&A Activity
(1)
Notes:1. 2013 total transactions include 8 successive acquisitions by Google * Mooreland Estimate
Acquirer Target Category DateTransaction
Size (EV)EV/Rev.
Feb’16 $45m Conf.
Oct’15 $201m 3.6x
Jul’15 Conf. Conf.
May’15 $350m 9.2x
Apr’15 Conf. Conf.
Feb’15 Conf. Conf.
Sep’14 $390m 0.5x
Jul’14 $347m 1.5x
Mar’14 $20m Conf.
Apr’14 Conf. Conf.
Dec’13 Conf. Conf.
Collaborative
Collaborative
Consolidation
Services
UAV
UAV
Consolidation
UAV
Motion Control
Industrial and Mobile
(Defense & Security Business)
Defense
CONFIDENTIAL
• Robotics and Automation public valuation has retracted from last year’s high and is now trading below the Nasdaq
• Current public players, mostly selling traditional industrial technologies into slowing growing markets, will need to organically and/or inorganically develop solutions for new emerging markets and find growth
Robotics and Automation – Broad Equity Market Performance
Broader Robotics Indices – 36 Months Relative Performance
Google acquired 8 robotics companies
13
CONFIDENTIAL 14
Robotics and Automation – Equity Market Performance in China
• Chinese public Robotics and Automation companies have experienced significant correction following unprecedented run-up in 2015
• However, these stocks are still very highly valued vs. all other markets
• Still very significant disparity with Western stock markets, which results in tempting arbitrage opportunity for Chinese companies to acquire foreign robotics companies
China Robotics Index – 36 Months Relative Performance
CONFIDENTIAL
Mooreland Taxonomy for Robotics and AutomationV
ert
ical
Pla
tfo
rms
Sem
ico
nd
uct
or
De
fen
ce &
Secu
rity
Au
tom
oti
ve
Co
nsu
me
r
Spe
cial
ty
Ro
bo
t P
latf
orm
s
Fixed Robotics
Mobile RoboticsMedical and
Surgical Robotics
Par
ts,
Co
mp
on
en
ts
& A
cce
sso
rie
s
Modules & Parts (Grippers, Vacuum Pumps, Hands, Rotary Units, etc.)Components (Sensors, Actuators, etc.)
Controllers
System
Inte
grators
Manufacturing Execution Systems
Supply Chain Management Software
ERP Software
Surg
ical
War
eh
ou
se &
In
ven
tory
Mgm
t.
Collaborative Robotics
Drone / UAV(1)
Sola
r
Ele
ctro
nic
s M
fg.
& F
acto
ry
Au
tom
atio
n
Foo
d &
Be
vera
ge
Min
ing
&
Agr
icu
ltu
re
He
alth
care
& L
ife
Sc
ien
ces
Logi
stic
s
Other Autonomous
(Underwater, Satellite, Self-Driving
Vehicles)
(1) UAV = Unmanned Aerial Vehicle
15
CONFIDENTIAL
Robotics Market Landscape – Robots, Parts, Accessories & Components
Ro
bo
t P
latf
orm
s
Fixed Robotics
Mobile Robotics UAVCollaborative
RoboticsMedical and
Surgical RoboticsOther
Autonomous
Par
ts, C
om
po
ne
nts
&
Acc
ess
ori
es
Controllers ComponentsModules and Parts
16
CONFIDENTIAL
Robotics and Automation Landscape - Vertical Platforms
Automotive Consumer Defense and Security Electronics Mfg. / Factory Automation
Food and Beverage LogisticsHealthcare / Life Sciences Mining & Agriculture
Solar SurgicalSpecialty Warehouse / Inventory Mgmt.
Auris Surgical Robotics
17
CONFIDENTIAL
Commercial Drones
CONFIDENTIAL
Commercial Drones - New Opportunity Taking Flight
19
Multifaceted and complex connected vehicles built with sensors
that collect data and carry payloads for specific commercial
purposes
Basically another IoT node
FAA expects the number of drones flying in U.S. domestic
airspace to hit 30,000 by 2020
FAA also brings regulation, which is still shaping up
Enormous potential in key industries and applications
Key Applications
Precision Agriculture
Film / Photo / Video
Inspection / Monitoring
Mapping / Surveying
Public Safety / First Responders
Drones, Unmanned Aerial Vehicles (UAVs), & Unmanned Aircraft Systems (UASs)
CONFIDENTIAL
UAV – The Big Picture
20
UAVs continue as the most dynamic growth sector of the world aerospace industry
Development of UAVs for different applications, by different industries has led to a wide variety of airframes and capabilities
Key external drivers
– Gov’t funding for military
– ↑ sophistication and ↓ price of components
M&A trends
– Expansion within verticals
– Node in IoT
– Internet to remote geographies
Financing trends
– Inspection
– Delivery/logistics
– Cloud services
Source: Teal Group, 2014
UAV Classification
0 – 200 ft.Low-speed, low altitude missions,
film and inspection
500 – Above ft.Manned aircraft; military grade
drones
200 – 400 ft.High-speed transit
zone for sophisticated drones (e.g. delivery drones)
400 – 500 ft.No-fly zone
CONFIDENTIAL
Commercial Drone Landscape
21
Software Only ServicesSystems & Software
CONFIDENTIAL
Drone Market Size
22
Over $6 billion /year spent on
military and commercial drones
Estimated to grow to $8.6 billion by
2019, representing a 6% CAGR
$0.7
$5.1
2014 2015 2016 2017 2018 2019
Commercial Drone Spending
$, Billions
$6.4
$8.6
2014 2015 2016 2017 2018 2019
Total Military & Commercial Drone Spending$, Billions
Key Observations
Commercial estimated to grow to
$5.1 billion by 2019, representing a
51% CAGR
Commercial to grow from ~10% of
the market today to ~60% by 2019
CONFIDENTIAL
Country Drone Governing Body Registered Commercial Drones
Federal Aviation Authority (FAA) ~3,850 Drones
French Civil Aviation Authority (DGAC) ~2,200 Drones
Civil Aviation Authority (CAA) ~1,400 Drones
Civil Aviation Safety Authority (CASA) ~500 Drones
Market Share & Commercial Drone Use
23
Major commercial use is aerial photography and video, however infrastructure inspection, construction, and agriculture are emerging uses
In the US, DJI has established a significant leadership position with its Phantom 3 (~$500 ASP)
Although small, the number of people and organizations authorized to operate commercial drones is growing rapidly in the US. (~4,500 by year end)
Proposed Drone Missions in the US Approved Under FAA 333
Key Observations
Commercial Drone Penetration in the US
Source: Oppenheimer February 2016, TechCrunch, April 2015
2,550
1,250
1,100
900
600
400
400
400
350
250
Photography & Video
Inspection
Survey
Real Estate
Search & Rescue
Agriculture
Data Collection
Mapping
Construction
Drone Training
United Kingdom
France
United States
Australia
(2%)
(1%)
(2%)
(84%)
(11%)
CONFIDENTIAL
Drones Face Hurdles to Growth
24
- FAA Regulation -Speed of expansion relies heavily on federal rules
- Air Safety -Growing number of drones seen flying
dangerously close to commercial aircraft
- Civilian Privacy Concerns -17 states passed drone-related privacy legislation
- New Legal & Insurance Implications -Heightened risk of property damage and liability
Challenges facing commercial drone industry
- Unproven Business Models -How will companies actually use drones to make
money?
Source: CBS Money Watch, August 2015
CONFIDENTIAL
Drone M&A Deal Volume and Selected Transactions
25
Source: CapIQ data as of April 5, 2016
Acquirer Target Date Transaction Description
Jan’16
• Aerial mapping and surveying• Accelerates the development of
Intel visual sensing technologies
Dec’15
• Fully autonomous drones with obstacle avoidance technology
• GoPro is using as a platform
Jan’15
• Small drones • Platform to develop low-cost,
replaceable and expendable UAVs
Apr’14
• Solar-powered high-altitude long-endurance drones
• Google using drones to deploy internet in remote locations
Mar’14
• Solar powered long-endurance drones
• Facebook using to deploy internet in remote locations
Jul’12
• Aerial imaging drones• Parrot to expand presence in the
commercial UAVs
Drone M&A Activity
Number of Transactions
32
56
4
9
15
6
2009 2010 2011 2012 2013 2014 2015 2016YTD
M&A activity growing but still relatively small
Historically focused on military
Notable “out-of-segment” buyers
Recent activity around flight control software and autopilot systems
CONFIDENTIAL
Venture Community Heavily Engaged
26
Venture funding for UAV-related startups rose to $476M in 2015; a 148% YoY increase from 2014
VCs have jumped into the commercial drone market in a big way in 2015
Many VCs more focused on software, not hardware
Main categories includes:
Inspection (e.g. mapping, precision agriculture, infrastructure, energy, mining), delivery/logistics, insurance and cloud services
Source: CapIQ, PrivCo, TechCrunch November 2014, CB Insights 2015
Drone Funding Activity
6 1326
38
78
23$12 $36
$83
$192
$478
2011 2012 2013 2014 2015 2016 YTDNumber of Investments Total Annual Investment in $M
Selected Venture-Backed Companies2011- 2016 YTD
Companies $ Raised
DJI Technology $105M
3D Robotics $99M
Airware $75M
Yuneec $60M
Aeronautics $53M
EHang (Ghost Drone) $52M
Skycatch $46M
Aeryon Labs $46M
CyPhy Works $37M
FLYPRO $36M
CONFIDENTIAL
Concentrated Investments from Select VCs
27
While there have been a significant number of investments made by venture capital firms, only a select group of firms have made multiple investments in drones.
Venture Investors Investments
CONFIDENTIAL
FAA regulations to continue to roll out, but will take longer than expected
– This brings uncertainty are can stifle innovation
–Needed in order for commercial drones to be ubiquitous and safe
Strategic and VC private investments to continue to ramp
– Significant uptick in strategic interest as strategies get worked out at the BU level
–VCs are more cautious in hardware investments in this environment; into capital light models
At least one major IPO in 2016 as there are already “public ready” companies
– Eventually will provide more choices for public investors
– Increases buyer universe driving further M&A
Near-term M&A to be driven by large technology conglomerates, niche consumer electronics players and mil/aero companies moving down market
– They have been on the sidelines for too long; starting to enter
–Outsiders, especially large cap players, bring further validation and clout to the industry
What We Expect From the Drone Market…
28
CONFIDENTIAL 29
Bryan G. Dow Executive Director
950 Tower Lane, Suite 1950 Foster City, CA 94404 tel: +1 (650) 330-3788 [email protected]
Mooreland Partners LLC is a member of FINRA / SIPC
SILICON VALLEY950 Tower Lane, Suite 1950
Foster City, CA 94404Tel: +1 (650) 330-3790
NEW YORK140 East 45th Street, 18th Floor
New York, NY 10017Tel: +1 (212) 653-0800
LONDON13 Charles II Street, 2nd Floor
London SW1Y 4QUTel: +44 (0) 20 7484 1350
www.moorelandpartners.com
