|
|
| Home - Software M&A Review - Jun 05 Issue |
Software M&A - A Glimpse into Q2
continued... page 2 |
Dassault (NASDAQ: DASTY) acquires ABAQUS
Category: Computer Aided Design
Purchase Price: $413,000,000
Seller Revenue: $100,000,000 (Estimate)
Revenue Multiple: 4.1x
Payment Terms: Cash
SEG’s Perspective:
Dassault Systemes, a leading provider of high-end engineering design and product lifecycle management (PLM) products, acquires ABAQUS, a developer of engineering software for finite element analysis. Dassault, which estimates the simulation market will grow at a 12% CAGR, will use ABAQUS to enhance its enterprise CAD offering and gain market share from large competitors (UGS, Parametric), best-of-breed competitors (Ansys, MSC Software), and custom-developed solutions. Dassault had been under pressure by investors to make use of its $786 million in cash and ABAQUS was a safe bet with an estimated 90% of its revenue recurring. The purchase price is rich considering the CAD/CAM/CAE software category rarely has M&A multiples exceeding two times trailing twelve months revenue for healthy, growing companies.
Lawson Software (NASDAQ: LWSN) acquires Intentia (Stockholm: INTB)
Category: Enterprise Resource Planning
Purchase Price: $480,000,000
Seller Revenue: $406,000,000
Revenue Multiple: 1.2x
Payment Terms: Stock
SEG’s Perspective:
Lawson, feeling the heat from Oracle and clearly uncomfortable as the only remaining mid cap ERP vendor, acquires Intentia, a public (Swedish Stock Exchange) ERP provider with 3000 customers in 40 countries. Billed as a merger of equals, the combined company will focus on the opportune mid-tier market, attempting to fend off Oracle and SAP as the two behemoths move down market, and Microsoft and Sage Group as they move up market. Although the purchase price represents a 36% premium over Intentia’s closing stock price prior to announcement, on a revenue basis 1.2x is a modest multiple when compared to Oracle/Peoplesoft (3.9x) and Infor/Mapics (2.0x). Lawson, whose stock price closed at $5.95 prior to announcement and $5.26 post announcement, has struggled to excite investors since going public in 2001 at $14 per share.
Quest Software (NASDAQ: QSFT) acquires Imceda
Category: Database Tools/Utilities
Purchase Price: $61,000,000
Seller Revenue: $8,000,000 (Estimate)
Revenue Multiple: 7.6x
Payment Terms: Cash, Stock
SEG’s Perspective:
Quest, provider of heterogeneous database management tools for Oracle, IBM and Microsoft database platforms, acquires Imceda, a vendor of SQL Server database management solutions. Quest’s strong footprint in Oracle database management tools has left Quest vulnerable as Oracle continues to expand its own toolset and consume some of the market available to Quest. As a result, Quest has shifted focus as a provider of management tools for heterogeneous database environments to SQL Server. MS SQL Server, which saw 22% growth in 2004, is considerably greater than Oracle’s 15% and IBM’s 8% growth rates. Imceda will enhance Quest MS SQL Server toolset ahead of Microsoft’s introduction of SQL Server 2005. The purchase price is a nice return for Imceda investors who invested $9 million in 2004.
EV: Enterprise Value = equity purchase price, plus seller’s interest bearing debt, minus seller’s cash & cash equivalents
This report was prepared by Software Equity Group, L.L.C. (SEG), a mergers and acquisitions advisory firm serving the software, life science and technology sectors. SEG is solely responsible for its content. This material is based on data obtained from sources we deem to be reliable; it is not guaranteed as to its accuracy and does not purport to be complete. This information is not to be used as the primary basis of investment decisions. For more details, please visit www.softwareequity.com, or phone (858) 509-2800.
 
|
|
|
