1. business and industrial

15 May 2015
Information & Communication Technology
Pricing Multiples
Forward Price Earnings Multiples (monthly to 30.04.15)1 Source: S&P Capital IQ
Multiples in the Information & Communication Technology (ICT) sector held steady over the month. At the end of April, the ICT sector traded on a
forward PE of 18.3x, compared to the ASX200 on 17.0x.
Average Values and Trading Multiples (as at 15.05.15) Source: S&P Capital IQ
Enterprise
Value
EV/EBITDA
FY2015
EV/EBIT
FY2015
Price /
Earnings
FY2015
Application Software
Equipment
Data Processing and Outsourced Services
Internet Software and Services
IT Consulting and Other Services
3,025
370
10,233
1,635
4,016
15.7x
7.2x
16.0x
9.4x
9.6x
18.6x
10.3x
19.1x
15.7x
11.4x
23.0x
13.0x
23.1x
19.4x
14.4x
Telecommunications & wireless
103,021
11.2x
16.5x
20.9x
Subsector
Note: Multiples are based on the forward year of the unreported period, this is currently FY2015.
1
The InterFinancial ICT Index set is an unweighted index comprising ICT related companies trading on the Australian Securities Exchange (ASX). Estimates are sourced
from S&P Capital IQ.
Merger & Acquisition News…

Vocus Communications has acquired a 14.5% stake in Macquarie Telecom Group for $15.62m via an equity swap. No material impact is
expected to Vocus’ statement of financial position and consolidated income statement from its acquisition of the relevant interest.

Fidelity Investments and Smallco have purchased stakes in WiseTech Global, the Australian software developer, ahead of its upcoming IPO,
reported to be valued at $785m. Fidelity and Smallco secured 11.3m shares for $35m representing approximately 4.5% of total capital.

M2 Group is believed to have lodged an all-scrip offer for IiNet to counter rival TPG Telecom’s $1.4bn all-cash bid. The new bid is structured as
an all-stock proposal with a $0.75 per share special dividend. M2 shares dropped 4.5% on the news, putting the implied offer price at $9.60
compared to TPG’s revised up to $9.55 per share deal (with iiNet shareholders able to elect to receive either $8.60 in cash per iiNet share or
0.969 TPG shares per iiNet share plus a special dividend of $0.75 per iiNet share payable under both options). iiNet’s directors have unanimously
recommended the revised deal from TPG.

TPG Telecom has acquired an additional 11.9% stake in Amcom at an offer of $2.76 per share for $87.5m in an effort to block the takeover bid
by Vocus.

Modun Resources has executed a conditional Sale and Purchase Agreement to acquire LiveTiles from Rhipe Limited. LiveTiles is a software
tool that enables organisations to build user interfaces that deploy on top of Microsoft’s cloud collaboration platforms, including SharePoint,
Office365 and Azure, enabling organisations to rapidly build and deploy modern business solutions, including intranets and extranets. LiveTiles is
reported to be valued at $33.75m and will be acquired in exchange for shares in Modun.

Freelancer.com, the Australian listed freelancing and crowdsourcing marketplace, has acquired Escrow.com from a private investor for USD
7.5m in cash and completed a $10m placement of ordinary shares to institutional investors. Escrow.com provides secure online payments and
online transaction management for consumers and businesses on the internet and reported FY14 revenue of USD 5m and EBITDA of USD 1.2m,
equating the purchase price to a 1.5x trailing revenue multiple and a 6.25x trailing EBITDA multiple.

PHW Consolidated, which is poised to acquire Tomizone, has entered into partnership with STQRY. STQRY’s technology offers location aware
customised content built on Tomizone’s Wi-Fi software platform.

Iron Mountain has agreed in principle to acquire Recall Holdings by the way of a recommended court approved Scheme of Arrangement for
0.1722 of an Iron Mountain common share for each Recall share or a $8.50 per share cash option (subject to a total cash pool available of
$225m), with preference given to each Recall shareholder’s first 5,000 shares. The proposed purchase price represents a 13.0x trailing EBITDA
multiple.

Brookfield Asset Management is believed to have partnered with Digital Bridge Holdings to bid for Crown Castle Australia, the Australian
telecommunications tower owner.

Babjob Services, a Bangalore, India-based company that runs an internet job portal, has raised USD 10m from SEEK, an Australian online
employment marketplace, for an undisclosed minority stake.

Integrated Research has paid USD 5m to buy IQ Services, the US-based unified communications testing company.

Legend Corporation has acquired selected assets of System Control Engineering for $17.9m. Legend will acquire SCE for $10.2m initially
with the remaining $1m payable by December 31, 2015. The vendors will remain with the business and can achieve a total in deferred payments
of up to $7.7m based on the EBIT results for FY16 through FY19.

TechnologyOne has acquired Digital Mapping Solutions for $12m in cash with a significant proportion of the purchase price payable upon the
achievement of an earn-out. DMS’s software allows for the storage, retrieval and management of spatial data for local government, government
and asset intensive organisations.

Promesa has exercised its option to acquire Thredit and its subsidiaries. Thredit are the developers of the meta-social platform and unified
social messaging app named Thred.

Wolseley Private Equity has sold Cartridge World in a deal valued between $10m and $20m. Wolseley purchased 80% of Cartridge World
eight years ago.

Hansen Technologies has acquired TeleBilling A/S from DICO A/S and others for $30.2m in cash and stock. Hansen will raise $15m to
partially repay debt used to fund the transaction. TeleBilling is a customer care and billing solutions provider.

SurfStich has acquired Magicseaweed and Stab Magazine for a total consideration of $13.8m and 4.8m shares in SurfStich. A fully
underwritten institutional placement of ordinary shares to raise $37.5m has also been launched, with proceeds being used (in part) to fund the
acquisitions.

Sydney start-up Airtasker has raised a further $6.5m in funding led by Shanghai-based Morning Crest Capital, the NRMA, and Australian
venture capital firms Exto Partners, Carthona Capital and Black Sheep Capital. Morning Crest Capital has invested in a number of Australian
start-ups including Pocketbook, GoCatch and SchoolPlaces.
Going Viral…

Bevan Slattery’s Superloop Limited has lodged a prospectus to raise $17.5m through an IPO on the ASX. Prior to founding Superloop, Mr
Slattery was also founder and CEO of NEXTDC Limited and co-founder and CEO of PIPE Networks, acquired by TPG Telecom in 2010. In
addition to Mr Slattery as Executive Chairman, the Superloop board includes CEO Daniel Abrahams (ex Aurizon and Energex) and NEDs
Michael Malone (ex-iiNet), Greg Baynton (ex-PIPE Networks and NEXTDC) and Louise Bolger (telco and media lawyer). At the $1.00 offer price,
Superloop will have a market cap of $90m.

Mitula, the Madrid-based digital classifieds business, has undertaken an $8m pre-IPO raising to fund a UK-based acquisition.

Nine Entertainment is on the verge of selling its Nine Live business to Affinity Equity Partners for around $640m. An agreement is thought to
have been signed for the division, which includes the ticketing business, Ticketek. The price represents a multiple of around 16.0x EBIT.

Seven West Media’s $612m capital raising has positioned the business to pursue acquisitions, should opportunities arise.

Entropolis, a privately-held curated online marketplace, will begin seeking investors to take a minority equity stake in the start-up business in
May, to help fund the platform’s global launch by year-end, said founding CEO Tania Price.

Brinks, the US-based security logistics business, and Armaguard, the security logistics business owned by Linfox, have been mentioned as
potential bidders for Recall, the Australia-based document management business.

Envato, the privately held online marketplace for digital content, is considering self-funded plans to expand in non-English speaking markets,
Director of Growth and Revenue Ben Chan said.

Future Fibre Technologies, an Australian security technology company, will seek to raise $21m in its initial public offering at $0.70 per share.

goCatch, the Australia-based taxi booking app, has engaged advisors to sell the business and are expecting to secure an offer of around $20m.

Ten Network is believed to be considering a deal in which Foxtel would buy 14.9% of the business at $0.18 per share. Bruce Gordon has also
offered to inject $70m to $100m into Ten in return for two board seats.

Oneflare, a privately held Australian online employment marketplace, is planning to revive its plans to raise capital in six months to fund
expansion in Australia and to enter the UK, CEO and co-founder Marcus Lim said. The company is currently undertaking a soft launch in the UK
and hopes to enter that market this calendar year.

Xero would only look to acquisitions to add functionalities to its existing IPO rather than acquiring customers, said Australian MD Chris Rudd. It is
also reaching significant milestones towards a likely 2016 IPO.

Techniche, a Brisbane technology investment company, is actively looking for bolt-on targets for its UK-based field management software
business Urgent Technology, as well as other strategic investments for the company.

Phoenix Business Consulting, an IT services provider for SAP systems and software, expects a cash sale in the USD 10m range “within a year
or two”, said Founder and CEO Hanif Sarangi.

Seera, an Australian cloud talent management software and services company, is seeking to raise GBP 2m-3m via its UK-based holding
company in August/September 2015, said Chairman Stuart Cole.

GBST Holdings, an Australian financial services software company, will consider acquisitions to enter markets in line with its global growth
aspirations, said CFO Patrick Salis.

Private equity and trade buyers are said to have expressed interest in rescuing NewSat by funding the completion of its Jabiru-1 satellite project
or taking capacity on the satellite once it is launched into orbit. The remainder of NewSat’s Jabiru-1 project, which is 75% complete, will cost
between USD 150m to USD 200m.

AHAlife, a luxury online marketplace about to list on the ASX via a reverse takeover by listed vehicle INT Corporation, will consider acquiring
complementary online marketplaces in the next six to 12 months.

Menulog, the Australian food home delivery service, is up for sale for up to $500m. The owners have not ruled out listing the business, but a
trade sale is considered more likely and may sell at a multiple of 10x to 12x revenue.

China Unicom is in talks with Telstra over forming a JV to be engaged in internet of vehicles and related big data services.

Universal Communications Group, an Australia-owned telecommunications services company, could look at entering international markets
before a possible mid-term trade sale, CEO and MD Rafael Luna said.

121cast, Melbourne-based Radio app creator, will be looking to hire a financial advisor and will pursue a capital raise in 12-18 months to grow
the company, CEO and co-founder Edward Hooper said.

Reffind, the Australian referral-driven recruitment platform, is planning to conduct an ASX float valued at approximately $10m.

Silverhorse Technologies, a governance integration technology company, is in talks with two Australia-based targets regarding an acquisition
and hopes to sign a deal by 4Q15, Chief Executive Officer Raymond Weeda said.

Industrie IT, the privately held Australian business consulting and investment firm, will review whether or not it will take external investors onboard in 12 months as it focuses on expanding in Asia, CEO Con Zeritis said.

Nearmap, an Australian aerial map technology company, is on the lookout for acquisitions of companies that can extend its core IP or with IP that
can take it into related areas, said CEO Simon Crowther.

Maestrano, Australia-based technology and cloud-based services company, can entertain a $10m+ capital raise in the next 12 months to fund its
international growth, co-founder and CEO Stephane Ibos said.

webqem, the privately held IT services company, is considering acquisitions and partnership strategies, including joint ventures, as options to
increase in size, owner and COO Larry Adler said.
If you are interested in specific information regarding merger and acquisitions in this sector, please contact Sharon Doyle or Hyun-ju Johnson.
Contact Details
Name
Position
Phone
Email
Paul Keehan
Chairman
(07) 3218 9100
[email protected]
Sharon Doyle
Managing Director
(07) 3218 9122
[email protected]
Brett Plant
Director
(07) 3218 9106
[email protected]
David Hassum
Director
(07) 3218 9108
[email protected]
Ted Marchant
Director
(07) 3218 9113
[email protected]
Andrew Wheeler
Director
(07) 3218 9107
[email protected]
Mark Steinhardt
Associate Director
(07) 3218 9105
[email protected]
Hyun-ju Johnson
Associate Director
(07) 3218 9109
[email protected]
Maree Klemm
Consultant
(07) 3218 9107
[email protected]
Anna Grant
Consultant
(07) 3218 9112
[email protected]
This information has been sourced from the ASX, mergermarket.com and various other public information sources. Forecasts are consensus forecasts
sourced from S&P Capital IQ.
Important Disclaimer – This may affect your legal rights: Because this document has been prepared without consideration of any specific persons financial situation,
particular needs and investment objectives, a financial services licensee or investment adviser should be consulted before any investment decision is made. While this
document is based on information from sources which are considered reliable, InterFinancial, its directors, employees and consultants do not represent, warrant or
guarantee, expressly or impliedly, that the information contained in this document is complete or accurate. Nor does InterFinancial accept any responsibility to inform you of
any matter that subsequently comes to notice, which may affect any of the information contained in this document. This document is a private communication to clients and
is not intended for public circulation or for the use of any third party, without the prior approval of InterFinancial. This report does not constitute advice to any person.
Disclosure. InterFinancial has no interest in any of the securities mentioned in this publication. However, its directors, executives or consultants may have an interest in
some of the securities, directly or indirectly, which are mentioned.