DJX VentureSource European Venture Capital Report 4Q 2013

European Venture Capital Fundraising Rises Significantly from 3Q 2013 and 4Q 2012

23 European venture capital funds accumulated €1.4 billion in 4Q 2013, more than doubling the number of
funds and almost tripling the amount raised from the prior quarter.

In contrast with 4Q 2012, though the number of funds fell by 12%, the amount raised rose by 38%. 4Q 2013
represents the highest quarterly figure for amount raised since 4Q 2011 when €2.1 billion was raised.

The largest fund of the quarter was Abingworth Management’s Bioventures VI fund, which raised €240 million
and accounted for 17% of the total amount raised for 4Q 2013.

Venture capital funds raised a total €3.58 billion across 60 funds in 2013, down 8% and 21% from respective figures for 2012.

Investment into European Venture-backed Companies Sees Quarter over Quarter and Year over Year Increase

European companies raised €1.5 billion for 357 deals during 4Q’13, a 6% uptick in the number of deals
completed and an 18% rise in capital raised from the previous quarter.

In contrast with 4Q‘12, deal flow and investment experienced similar improvements, with increases of 5% and 24% respectively.

A total of €5.6 billion were raised during 2013 as a whole, an improvement of 15% on 2012 and 7% on 2011.

In terms of deal flow, 1395 were completed in 2013, equating to an increase of 6% on 2011 and 2012 figures.

Equity Financings into Europe-based, VC-backed Companies, by Industry Group (4Q 2013)

The Consumer Services sector received the largest allocation of investment during 4Q’13 (37%), accumulating €553 million through 106 deals, an increase of 136% from 3Q’13 in capital raised despite deal flow remaining level.

Healthcare placed second in terms of equity financing, taking a 27% share of all 4Q’13 investment. The sector raised €392 million across 55 deals, a rise of 23% and 31% from respective 3Q’13 figures.

Business and Financial Services occupies third, with companies gathering a 15% share of the total amount
invested during the quarter. The sector received €223 million across 92 deals, an uptick of 3% in deal flow but a drop of 29% in capital raised from 3Q’13.

The Consumer Services sector placed first for euros raised during all of 2013, with €1.5 billion equating to a 28% share of investment for the year. Healthcare companies raised €1.4 billion giving the sector a 25% share, while the Information Technology sector placed third with a 19% share of investment (€1.1 billion).

Equity Financings into Europe-based, VC-backed Companies, by Country (4Q 2013)

The U.K. remained the favoured destination for equity financing in 4Q’13 with a 29%
share of all investment into European VC-backed companies. The country received
€427 million across 91 deals, a drop of 26% and 5% from respective 3Q’13 figures.

Germany consolidated its position in second with a 19% share of investment, raising
€277 million across 66 deals, a 59% increase in euros raised and an 18% rise in deal
flow from the previous quarter.

Sweden climbed to third, thanks in large part to Spotify’s November round of financing,
raising €257 million and representing a 17% share of investment. France,
consequently, dropped to fourth spot with a 10% share. The country raised €144
million during 4Q’13, a 20% decline from the previous quarter.

In 2013 as a whole, the U.K. took a 29% share of investment (€1.6 billion), Germany
an 18% share (€992 million), and France received a 14% share (€785 million).

Venture Exits in Europe Experience Overall Uptick in 4Q 2013 Despite M&A Slide

M&As of venture-backed companies in Europe fell slightly during 4Q’13, by 10% from 3Q‘13 and by 5% from
4Q’12 with a total of 36 transactions completed during the quarter.

The largest M&A of 4Q’13 was for Helsinki-based Supercell Oy, which was acquired by GungHo Online
Entertainment Inc. for €1.1 billion.

145 M&As were completed for venture-backed companies in Europe during 2013, up 1% from the 143
completed during the 2012 but falling 26% from the 197 seen during 2011.

Eight venture-backed IPOs took place during 4Q’13, quadrupling the number completed during 3Q’13 and up
by 60% on 4Q’12. A total of 15 IPOs were completed for the year, level with 2011 but down by one from 2012.

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DJX VentureSource U.S. Venture Capital Report for 4Q 2013,

U.S. Venture Investment on the Rise in 4Q 2013

U.S.-based companies raised $8.9 billion from 901 venture capital deals in 4Q 2013, an increase both in capital (2%) and in number of deals (5%) from the previous quarter.

Compared to the same period in 2012, both number of deals and amount invested registered an increase, 3%
and 7% respectively.

Business and Financial Services and Healthcare are the strongest sectors, each having a 26% share of total
amount invested.

In 2013, 3480 deals have been completed raising $33 billion, a respective 5% decrease and 1% increase on
figures posted in 2012.


Equity Financings into U.S.-based, VC-backed Companies, by Industry Group (4Q 2013)

Business and Financial Services saw the largest investment allocation, with 207 deals garnering $2.3 billion and accounting for 26% of total equity investment.

The Healthcare sector raised the second highest proportion of investment for 4Q’13. Healthcare companies
drew $2.3 billion across 188 deals, up 20% and 11% from respective 3Q’13 figures.

Information Technology (IT) placed third with $1.7 billion in 248 deals, dropping significantly from the $2.4 billion accumulated in the previous quarter. The sector’s investment figure represents a 19% share of total equity investment into U.S. VC-backed companies for the quarter.

$1.6 billion were raised by Consumer Services in 177 deals, an increase of 9% in deal flow, while capital invested went up by 3%.

U.S. VC-backed M&As (2011-2013)

U.S. venture capital acquisition activity still on the rise in the fourth quarter of 2013, ending with the highest number of exits for 2013.

115 M&As raised almost $12 billion during 4Q 2013, a 17% increase in M&A valuations despite the number of deals only increasing 1% compared to the previous quarter, when 114 M&As garnered $10.2 billion.

The largest M&A of the quarter was The Climate Corp., which was acquired by Monsanto Co. (NYSE: MON) for
$930 million.

U.S. VC-backed IPOs (2011-2013)

20 venture-backed companies raised $3.6 billion through public offerings in 4Q 2013. Number of deals
decreased by 20%, while capital raised registered a 60% increase from the previous quarter.

The largest IPO of the quarter was Twitter Inc. (NYSE: TWTR), which completed a $1.8 billion IPO.

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DJX VentureSource 4Q’13 China Venture Capital Report

Venture Capital Investment in China Improves During 4Q 2013

Investment into Chinese venture-backed companies markedly improved in 4Q’13, as companies raised $1.5
billion from 106 deals. The gains equate to a 76% increase in capital and a 16% increase in number of deals from the previous quarter.

Compared to 4Q’12, though deal flow improved by 66%, investment dipped by 4%.

314 deals were completed for China-based VC-backed companies during 2013 as a whole, up 20% on the
figure for 2012 but dropping 22% on the number completed during 2011. In terms of capital raised, $3.5 billion were accumulated during 2013, representing an overall decline of 29% from 2012 and 45% from 2011.

Equity Financings into China-based, VC-backed Companies, by Industry Group (4Q 2013)

Consumer Services companies took $985 million through 47 deals during 4Q’13, a 44% and 66% share of
overall deal flow and capital raised for the quarter respectively. The figures equate to a 52% increase in deal flow and 114% in amount raised for the sector from 3Q’13. The amount raised for the quarter also represents over half of total investment for the sector during 2013.

The Information Technology sector raised the second highest proportion of investment during 4Q’13. IT
companies drew $275 million across 28 deals, representing a drop of 28% in deal flow and 7% in capital raised compared with 3Q’13.

Business and Financial Services companies received $154 million through 18 deals during 4Q’13, an uptick of 38% in deals closed and over 3.5 times the amount raised from 3Q’13. The sector’s investment figure represents a 10% share of total equity investment into China-based VC-backed companies for the quarter.

The Consumer Services sector placed first for dollars raised during all of 2013, with $1.9 billion equating to a 54% share of investment for the year. IT companies garnered $762 million giving the sector a 21% share, while Business and Financial Services and Healthcare placed third and fourth respectively with a 10% ($348 million) and 6% share ($229 million).


Venture M&A and IPO Market Activity in China During 4Q 2013

M&A activity for venture-backed companies in China remained stable in 4Q’13 with five completed, the same as in 3Q’13 and three more than in 4Q’12.

A total of 20 venture-backed M&As were completed in 2013, representing an increase of 82% from the number completed both in 2012 and 2011.

12 VC-backed companies went public during 4Q’13 in China, the highest figure in a quarter since 2Q’12. The largest of these was YuanShengTai Dairy Farm Ltd., which raised $340 million for its November listing on the Hong Kong Stock Exchange.

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Four More Reports From Berkery Noyes: ONLINE, SOFTWARE, HEALTHCARE, FINANCE & INFO TECNOLOGY

Horizontal Reports

Online and Mobile Industry Merger & Acquisition Trends For Full Year 2013

Transaction volume in the E-Commerce segment increased nine percent over the past year. One notable E-Commerce deal was Groupon’s acquisition of Ticket Monster from LivingSocial for $241 million, a divestiture that reflects LivingSocial’s strategic focus beyond the daily deals subsector.


Software Industry Merger & Acquisition Trends For Full Year 2013

The Business Software segment underwent a three percent increase in volume on a year-to-year basis. The largest financially sponsored deal in the segment was Advent International's announced acquisition of Unit4 in the enterprise resource planning (ERP) subsector. This transaction, with a purchase price of $1.71 billion, represented a 2.7x revenue multiple and 18.5x EBITDA multiple.


Vertical Reports


Financial Technology and Information Industry Merger & Acquisition Trends For Full Year 2013

Financial sponsors accounted for 18 percent of transaction volume in 2013, which was about the same as in 2012. However, private equity deal value rose from 19 percent to 40 percent of the industry's overall value. This included five of the top ten largest deals in 2013.


Healthcare Industry Merger & Acquisition Trends For Full Year 2013

Healthcare IT as a percentage of the industry’s total deal volume stayed the same at almost 40 percent. Meanwhile, the segment with the largest year-to-year rise in volume was Pharma IT. The number of deals in the Pharma IT segment increased 45 percent, from 22 to 32 transactions.


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Media and Marketing Industry Merger & Acquisition Trends 2013

M&A MARKET OVERVIEW

Berkery Noyes tracked 4,922 Media & Marketing transactions
between 2011 and 2013, of which 1,311 disclosed fi nancial terms,
and calculated the aggregate value to be $191.21 billion. Based on
known transaction values, we project values of 3,611 undisclosed
transactions to be $45.55 billion, totaling $236.77 billion worth
of transactions tracked over the past three years.

Disclosed median enterprise value multiples for all segments
combined in this report during the last 36 months were 1.8x
revenue and 9.2x EBITDA

The most active acquirer by volume in the Entertainment segment,
either directly or through an affi liated business between 2011 and
2013, was Zynga, Inc. with 14 transactions.


2013 KEY HIGHLIGHTS

• Reed Elsevier was the most active B2B Publishing & Information
acquirer with nine transactions in this specifi c segment during
2013.
• There were 156 fi nancially sponsored transactions with an
aggregate value of $21.22 billion, representing nine percent of
the total volume and 22 percent of the total value, respectively.

2013 KEY TRENDS

• Total transaction volume in 2013 remained nearly constant over
2012, from 1,667 to 1,673.
• Total transaction value in 2013 increased by 28 percent over
2012, from $75.81 billion to $97.30 billion. The proposed
merger of Publicis Groupe SA and Omnicom Group Inc.
accounted for 21 percent of the industry’s aggregate deal value
in 2013.
• The median revenue multiple rose from 1.4x in 2012 to 2.0x in
2013. The median EBITDA multiple improved from 8.0x in 2012
to 9.7x in 2013. In both instances, this marked a return to valuations
that were seen in 2011.
• Based on volume, the segment with the largest increase in 2013
over 2012 was Consumer Publishing with a 16 percent rise, from
167 to 193 transactions. Based on value, the segment with the
largest increase was Broadcasting, which more than tripled from
$3.95 billion to $13.34 billion.



Full report

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Education Industry Merger & Acquisition Trends For Full Year 2013

M&A MARKET OVERVIEW

Berkery Noyes tracked 849 Education transactions between 2011
and 2013, of which 255 disclosed fi nancial terms, and calculated
the aggregate value to be $21.77 billion. Based on known
transaction values, we project values of 594 undisclosed
transactions to be $5.86 billion, totaling $27.63 billion worth of
transactions tracked over the past three years.

Disclosed median enterprise value multiples for all segments
combined in this report during the last 36 months were 1.6x
revenue and 11.2x EBITDA.

Based on volume, the most active market segment that Berkery
Noyes tracked between 2011 and 2013 was K-12 Media and Tech
with 158 transactions.

2013 KEY HIGHLIGHTS

• The most active acquirer in 2013 was Pearson plc with six
transactions. The largest of these deals was Pearson plc’s
acquisition of Grupo Multi Holding, an English language training
company headquartered in Brazil, for $829 million.
• Nine of the top ten highest value transactions in 2013 were
based outside of the United States.
• There were 65 financially sponsored transactions with an
aggregate value of $5.51 billion, representing 22 percent of
the total volume and 54 percent of the total value, respectively.

2013 KEY TRENDS

• Total transaction volume in 2013 increased by eight percent
over 2012, from 274 to 295.
• Total transaction value in 2013 rose by 27 percent over 2012,
from $8.04 billion to $10.20 billion.
• The median revenue multiple remained constant at 1.5x. The
median EBITDA multiple declined from 13.5x in 2012 to 11.0x
in 2013, which marked a return to the industry’s 2011 EBITDA
valuation.
• The segment with the largest increase in volume in 2013 over
2012 was Professional Training Technology with a 19 percent
increase, from 31 to 37 transactions.




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Private equity transactions in the Information Industry 2013

M&A MARKET OVERVIEW

Berkery Noyes tracked 1,399 private equity transactions in the
Information Industry between 2011 and 2013, of which 364
disclosed fi nancial terms, and calculated the aggregate value to be
$104.05 billion. Based on known transaction values, we project
values of 1,035 undisclosed transactions to be $20.46 billion,
totaling $124.51 billion worth of transactions tracked over the past
three years.

The largest deal tracked by Berkery Noyes during the last 36 months
was the acquisition of BMC Software by a private investor group, led
by Bain Capital and Golden Gate Capital, for $6.69 billion in 2013.

2013 KEY HIGHLIGHTS

• The most active financial sponsor was Vista Equity Partners with
eighteen transactions in 2013. This included four deals with
disclosed values above $500 million.
• Four of the top ten highest value private equity deals in 2013
occurred in the Finance segment. The largest of these was
Hellman & Friedman’s acquisition of Applied Systems from Bain
Capital for $1.8 billion in the Insurance subsector.
• TPG Capital was the most active private equity firm in the
Healthcare segment with eight transactions in 2013.

2013 KEY TRENDS

• Total transaction volume in 2013 decreased by twelve percent
over 2012, from 512 to 453. However, when compared to 2011,
volume in 2013 underwent a four percent increase.
• Total transaction value in 2013 declined by six percent over
2012, from $43.71 billion to $41.13 billion.
• The median revenue multiple increased from 1.8x in 2012 to
2.3x in 2013. The median EBITDA multiple improved from 9.8x
in 2012 to 11.5x in 2013.
• In terms of secondary buyouts, or transactions completed
between private equity fi rms, deal volume in 2013 decreased
by 27 percent over 2012. This followed a 34 percent increase
from 2011 to 2012

Full report

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