M&A Impacting Connections between Brands, Consumers - JEGI

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1 since 1987 October 2014 I N DEPEN DENT I N VESTMENT BAN K I N G FO R M E DI A , I N FORMATION, MARKETI NG & TECH NOLOGY Tech M&A Update M&A Impacting Connections between Brands, Consumers and Digital Things This months letter is written by David Clark, Managing Director (see bio below) Here at JEGI we are gearing up for our first annual Connected Conference, centered around the Internet of Things and taking place in November in San Francisco. Were producing the event with the help of our friends from Strategy& (for- merly Booz & Company), which is now part of PwC. Like JEGI, Strategy& is laser focused on trends and opportunities in the technology, marketing, and media worlds and where they intersect. In prior months, our Tech M&A Update covered Always On CRM, Mass Personalization, and The Connected Home, each of which speaks to an increasingly connected and converging world via data, services and devices. With those prior report topics in mind, we revisited some recent sector transactions to gauge the impact that M&A is having on enabling or strengthening connections between brands, consumers and digital things. Always On CRM Traditional CRM implies the use of first-party customer data to better understand who bought what, who might buy, and how that translates into customer value. Always On CRM implies the use of multiple sources of data to draw connections between why someone bought, how they bought, and how they got there (attribution) us- ing ad exposure, search, and device usage data, for example. In the past few months, all of the major marketing data providers (Alliance/Epsilon, Acxiom and Experian) have made notable acquisitions that get them closer to more persistent and connected CRM data. Epsilons September 2014 acqui- sition of Conversant (fka ValueClick) provides Epsilon with direct access to online traffic data from affiliated publisher sites, and via Dotomi (itself a recent acquisition of ValueClicks), direct access to real-time ad serving and ad exposure data, all of which can be used to enrich first party customer data for campaign targeting and optimization. Thats a big connect for Epsilon, whose traditional strong suits are database marketing and loyalty programs. In May 2014, Acxiom acquired LiveRamp, a data onboarding specialist, with the express aim of building a marketing Data Management Platform that (finally) connects offline and online customer data, which Acxiom has a fair amount of. And Experians acquisition of The 41st Parameter is uniquely (and spookily) focused on verifying the connection between consumers and their mobile devices. Which tend to beAlways On. Mass Personalization JEGI Co-President Scott Peters wrote on this topic recently. It is a rapidly evolving field. Version 1 of Mass Personalization might be viewed as credibly customized online ads and offers. For example, its easy to glean that I am in-market for holiday vacation travel, so Im not surprised that youre showing me a targeted ad that features my destination. Version 2 is the very mature recommendation and offer engines that sit behind better built e-commerce sites, or bet- ter built apps that directly connect consumers with day-to-day service providers your bank, 401K, and frequent flyer programs. Today, flawless performance on the part of e-commerce merchants and primary service providers are table stakes. As a provider, you better know who I am when I show up, and you better alert me when there is something I 1

2 need to know. This form of mass personalization is very much embedded in todays e-commerce and online customer care applications. Version 3 is the wild proliferation of subscription-based consumer services that are far more discretionary, such as Amazon, Netflix, Spotify, Pandora, etc. In their current form, these services are about convenience and lifestyle, or in marketing parlance, concierge and curation. But underneath, they are further conditioning consumers to share de- tailed personal profiles (product preferences, purchase intent, financial data and even medical conditions), presaging a new class of digital service providers that consumers will entrust with highly personal decisions and transactions. Big brands will lead in this area and are planting many seeds. Apples acquisition of Booklamp (product recommenda- tion); Yahoos acquisition of Flurry (app subscription and in-app purchase data); and Googles acquisition of Lynx Design (medical monitoring). The services will continue to evolve as consumers become more comfortable with the passive monitoring capabilities that are creeping into stores, your phone, your FitBit, and your home. Connected Devices Connected devices will sit at the center of the Internet of Things. As covered in our most recent update by Joseph Sanborn (JEGIs Co-Head of Technology), Googles recent acquisition of Nest (IP-connected home mon- itoring systems) and Samsungs acquisition of SmartThings (home automation and sensor systems) represent a push into developing the home-based hub for the mobile sensors that we carry around in our pockets and purse, as well as the sensor data that we drag in our wake. Via carrier systems, GPS, WiFi and Bluetooth, our phones and other wearables are constantly connected to networks that certainly know where we are, and increasingly know what were doing. Combined with low-power, low-cost bea- con arrays (courtesy of Apple), our location can be tracked with greater precision. Merchants can see us cross geo-fences around their stores and can see us standing in front of specific displays. Loyalty and Wish List apps can see us, too, and connect with Always On CRM systems to present us with time and placed offers, or maybe after weve seen a reinforc- ing ad at home. And late at night, when our recently purchased Thync (mood monitoring and neuro-signaling device) senses that were feeling flush (this is real!), our device can connect with our home automation system, check that we have room in the closet, and buy that sweater while we sleep. CapitalOne just acquired a UI/UX firm to make sure the payment interface will be pleasing. Experian will verify our identity. Futuristic? Yes. Foreseeable? Yes. All of the ingredientsand connections are in place: the data, the software and hardware, the service providers, and growing consumer acceptance. These topics and developments will be top of mind at our upcoming event, and we look forward to connecting with you then. For more information on the JEGI Connected Conference, click here: http://www.jegi.com/content/2014-jegi- connected-conference. Also, we are pleased to be sponsoring SIIAs upcoming Business Information & Media Summit (BIMS) on November 10-12 in Miami. BIMS will be the largest gathering of information and media leaders in the US, with more than 400 top ex- ecutives anticipated to attend. Please register here: http://siia.net/bims/2014/register.asp, and enter the discount code BIMJEGI100 for $100 off the non-member conference rate. These are our brief highlights for October. Please stay tuned for the next issue of our Tech M&A Update, and dont hesi- tate to contact us to discuss any topics related to JEGIs Tech Coverage or your companys M&A strategy. David Clark, Managing Director Office: (212) 754-0710 Email: [email protected] 2

3 September M&A Transactions in JEGI Tech Coverage Enterprise Buyer Seller Target Description Value ($mm) Deals with Values (by size) Cognizant Technology Provides IT and service solutions for health plans, benefits TriZetto $2,700 Solutions administrators, care providers, hospitals, etc. Ebates Performance Rakuten Offers online cash back shopping services. $1,000 Marketing Otter Media (AT&T, Enables the creation and sharing of video content with the Fullscreen $250 Chernin Group) connected generation through technology and services. Conifer Health Solutions Springfield Service Operates as a revenue cycle management and clinical $235 (Tenet Healthcare) (SPi Global) documentation improvement firm for the healthcare industry. Catalina Marketing Provides load-to-card digital coupons in the consumer packaged Cellfire $100 (Berkshire Partners) goods market. Offers a mobile-based ticket service to improve the live Cox Enterprises Experience $100 experience at concerts, sports games, etc. Provides a mobile ad platform for publishers, developers, media Millenial Media Nexage $88 buyers, agencies and advertisers. Mobli Technologies Offers a mobile app that enables users to share voice notes, Pheed $40 2010 music, photos, videos and text. Provides a cloud-based point of sale and restaurant management ParTech Brink Software $17 software for the hospitality industry. STATS (Vista Equity) BSports (Bloomberg) Provides data and analytics for the sporting industry. $15 Offers DocsPad, a solution that gives developers a way to insert Yahoo! Bookpad $8 Google Docs-style functionality into their apps. TELUS Health ZRx Prescriber, Comprises electronic-prescription healthcare technology $6 Solutions Canadian Operations development rights. Knowledge Capital Provides cloud-based, business process management software Certive Solutions $1 Alliance solutions to the healthcare market. Deals without Announced Values (alphabetical by buyer) Adobe Aviary Offers a mobile photo editing tool. Agile Sports Develops mobile video analysis solutions and applications for UberSense Technologies coaches and athletes. Develops an online application for creating and publishing digital Apple Prss magazines. Aqua (WPP) Applogix Develops powerful web analytics tools. Operates as a population health management company with a Best Doctors Rise Health clinical data technology platform. Cambridge Healthtech Operates a bioinformatics and genomics search and training portal OpenHelix Institute for researchers, institutions, teachers and students. Provides a mobile app that combines public, private and social car2go (Daimler) RideScout ride options on a single platform. Clearstream.TV EngageHD Provides a mobile ad targeting platform. 3

4 Enterprise Buyer Seller Target Description Value ($mm) Connexin Software Offers license and SaaS-based software for electronic health Workflow.com (Bluff Point Associates) records, practice management, document imaging, etc. eSCRIP-SAFE (Scrip- Provides high schools, universities and third-party recipients with Credentials Safe Security) an electronic transcript delivery network. Ultravisual Develops a photo and video editing app with a built-in social Flipboard (Technicolor) network. Provides market intelligence solutions to enable retailers and GfK Cogenta Systems manufacturers to increase sales, monitor pricing data, and more. Provides web marketing software for marketing and sales teams Givex Marqui to manage demand generation campaigns. Creates medical technologies, including Lift Pulse, a tremor Google Lynx Design measurement and monitoring app using sensors in smartphones. Google Polar Provides a mobile survey app with graphics. Offers healthcare software applications for clinical and financial HCA Holdings PatientKeeper workflows to physicians. HealthPort (ABRY, One Source Document Provides customized medical record scanning and copying services Brightwood Capital) Management for release of information. KUBRA Data Transfer Provides integrated multi-channel outsource solutions, including Hearst Magazines (Clairvest Group) document print and mailing, e-billing, payment solutions, etc. Offers an online platform to enable marketers to launch contests, HootSuite Media Brightkit branded galleries and apps on their website, Facebook page, etc. Provides an online application for companies to monitor feedback HootSuite Media Zeetl on social media. Provides an on-demand solution to share a private ride with Lyft Hitch passengers heading in the same direction in San Francisco. Maestro Healthcare WealthCare Provides private health insurance exchange technology. Technology Marketplace (Alegeus) Offers a social commerce platform for large retailers, brands and Mixpo ShopIgniter agencies to inspire their consumers to discover their products. Provides software solutions for the orthotic and prosthetic, durable OPIE Software Futura International medical equipment and dialysis markets. Provides technology and marketing support that enables Piano Media Press+ (R.R. Donnelley) publishers to charge for select web access and digital content. PracticeMax OptiMED Management Provides business management services for physicians. Premiere Global Offers audio and video webcasts, as well as webinars for TalkPoint Holdings Services streaming audio, synchronized slides, interactive Q&A, etc. Apartment Data Ser- Operates as an online data services company that sources and sells Salt Creek Capital vices (Eberhart Capital) real-time, historical and localized apartment rental data. Operates as a real-time mobile game marketing platform with Science Media PlayHaven (Upsight) promotion and monetization. Sharethrough Viral Ad Network Provides an online content distribution platform. Offers kick, a mobile app that offers deals and rewards for SK Telecom Shopkick shopping in various stores. Skyword (American Offers an enterprise-level project management system to help Vidaao Public Media Group) marketing teams manage the production process online. 4

5 Enterprise Buyer Seller Target Description Value ($mm) TELUS Health Provides dispensary management software solutions for XD3 Solutions Solutions pharmacies. Teradata Think Big Analytics Provides big data and advanced analytics consulting services. Ticketmaster Provides online and mobile apps for organizing events, ticketing, Eventjoy (Live Nation) and more. Provides video editing services, including tools to cut video clips Vemory Splice (Path 36) with a drag and drop feature. Develops social networking solutions and behavioral change Viverae OneHealth Solutions programs that drive member engagement to improve health. Vook Byliner Offers online book publishing and subscription services. Offers technology to deliver content relevant to online images and Yahoo! Luminate provide layers of informational content on online images. ZirMed Provides big data analytics to help healthcare organizations achieve MethodCare (Sequoia Capital) financial and clinical excellence. About David Clark David Clark, a Managing Director with JEGI, provides M&A advisory services to traditional and technology-enabled marketing services companies. Mr. Clarks focus and transaction experience also includes companies in adjacent markets, such as business information, market research, application software and information technology services. Mr. Clark has nearly 20 years of experience in investment banking and business development consulting. Prior to joining JEGI, he was a Managing Director at Deloitte & Touche Corporate Finance and a senior member of Deloittes global TMT (Technology, Media & Telecom) industry practice. At Deloitte, Mr. Clark acted as financial and strategic advisor to US and international companies on cross-border M&A assignments, joint ventures and growth capital financings. Previously, he served as Vice President of the Bank of Tokyos New York Investment Banking Group where his responsibilities included managing the banks US venture capital and private equity relationships and investment portfolio. In 2008, Mr. Clark was elected to the Board of Directors of the Massachusetts Information & Technology Exchange (MITX), the leading industry association bringing together digital technology, marketing, and media professionals to engage in what is next for the web and how it impacts the marketing and business worlds. Mr. Clark earned an MBA from the University of Virginia-Colgate Darden School of Business, an MA in International Studies from the University of Virginia College of Arts and Sciences, and a BS in Economics from Washington University in St. Louis. Mr. Clark is a certified NASD representative. 51

6 About The Jordan, Edmiston Group, Inc. The Jordan, Edmiston Group, Inc. (JEGI), headquartered in New York, NY, has been the leading independent investment bank for the global media, information, marketing and technology sectors for nearly 27 years. The firm has completed over 500 high-profile M&A transactions for global corporations; middle-market and emerging companies; entrepreneurial owners; and private equity and venture capital firms. For more information, visit www.jegi.com. Select Recent JEGI Technology Transactions* a full service competitive advertising tracking firm SaaS-based applications a leading tech-enabled search a leading mobile app market a leading provider of shopping for the consumer products and digital marketing agency intelligence and analytics provider has been sold and shopper marketing licensing industry to software and services has been sold has been sold has received has been sold a significant investment to to to a portfolio company of from July 2014 May 2014 October 2013 May 2013 October 2012 a portfolio company of a leading developer of online a global leader in digital a SaaS marketing platform (CRM) shopping solutions for local media the leading SaaS platform for retail has sold engagement specializing in for real-time, multi-stage, and has been sold transaction optimization solutions promotions and loyalty campaigns multi-channel marketing including to across mobile, social and web social media, email, and mobile has been sold a consortium of eight leading media the leading provider and publishing companies: to of sales enablement and business has been sold has been sold intelligence SaaS solutions to Advance Digital, A.H. Belo to Corporation, Cox Media Group, to Gannett Co. Inc., Hearst Corporation, MediaNews Group, & The McClatchy Co., and The Washington Post October 2012 August 2012 May 2012 November 2011 October 2011 the leading provider of consumer shopping predictive targeting data has been sold a pioneer and leader in mobile a pioneer and leading SaaS a leading provider of mobile an online behavioral entertainment services to provider of talent analytics to workforce management solutions targeting network HR and C-level professionals for field service has been sold has been sold has been sold has been sold to to to a divison of to a portfolio company of for $100,000,000 for $52,000,000 for approximately $95,000,000 March 2014 May 2012 *Some of the transactions highlighted above were completed by JEGI Managing Directors Joseph Sanborn and Jeff Becker, prior to joining the firm. Wilma Jordan Scott Peters Tolman Geffs Richard Mead David Clark Amir Akhavan Founder & CEO Co-President Co-President Managing Director Managing Director Managing Director [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] Joseph Sanborn Jeff Becker Tom Pecht Adam Gross Bill Hitzig Tom Creaser Sam Barthelme Managing Director Managing Director Managing Director CMO COO EVP Director [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] 61 150 East 52nd Street, 18th Floor New York, NY 10022 212-754-0710 www.jegi.com

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