Valuation Update for the Enterprise Software
Industry

March 31, 2011
Transaction volumes in the enterprise software sector increased when compared to the prior month but decreased against the level of activity reported in March 2010. According to Capital IQ, there were 55 deals announced in the enterprise software sector in March 2011 compared to 37 in the prior month and 63 in March 2010. Despite the moderate level of acquisition activity in March, well-capitalized firms remain interested in strategic expansion.

The following are among the notable transactions announced in the enterprise software sector in March:

• Customer relationship management solutions provider Salesforce.com (NYSE: CRM) announced it has signed a definitive agreement to acquire Radian6 Technologies, Inc. for US$350 million in cash. Canada-based Radian6 provides social media monitoring and analysis solutions for marketing, public relations, and customer support professionals. The acquisition is expected to help Salesforce.com assist customers in better managing the social interactions taking place both inside and outside their companies. (Source: Salesforce.com press release, March 30, 2011)
  
  
• Infrastructure management software provider Tivoli Systems, Inc., a subsidiary of International Business Machine Corp. (NYSE: IBM), entered an agreement to acquire TRIRIGA, Inc. for an undisclosed amount. Nevada-based TRIRIGA provides facility and real estate management software solutions. The acquisition is expected to accelerate Tivoli's growth in the smart buildings solutions market by adding real estate portfolio management, capital project management, and energy and environment sustainability functions. (Source: International Business Machines Corp. press release, March 22, 2011)
  
  
• Enterprise software provider Rocket Software, Inc. acquired Aldon for an undisclosed amount. California-based Aldon provides application lifecycle management for collaboration, change management, and compliance. The acquisition broadens Rocket Software’s application development, integration and modernization solution segment. (Source: Rocket Software press release, March 22, 2011)
  
  
• Product lifecycle management solutions provider Dassault Systemes SA (ENXTPA: DSY) announced it has acquired the remaining 82 percent stake in Intercim, LLC for US$36.5 million. Minnesota-based Intercim provides manufacturing and production operations management software solutions for advanced and highly regulated industries. The acquisition enables Dassault to offer a broader portfolio of solutions to deliver digital continuity from engineering to factory operations. (Source: Dassault Systemes SA press release, March 17, 2011)
  
  
• Business software and services provider Infor Global Solutions, Inc. made an unsolicited offer to acquire Lawson Software, Inc. (NASDAQ: LWSN) for US$1.8 billion. The deal implies a valuation multiple of 2.3x revenue and 13.2x EBITDA based on Lawson’s February 2011 LTM results. Minnesota-based Lawson offers a range of software applications and industry-specific solutions used to enhance enterprise business processes. The potential acquisition would strengthen Infor’s offerings for the health care market as well as its business intelligence solutions. (Source: Lawson Software, Inc. press release, March 11, 2011)
  
  
• Enterprise data warehousing solutions provider Teradata Corporation (NYSE: TDC) entered an agreement to acquire Aster Data Systems, Inc. for US$260 million. California-based Aster Data Systems provides data management and advanced analytics solutions. The acquisition will enable Teradata to add a new class of data-driven applications and non-relational data processing solutions to its existing service offerings. (Source: Teradata Corporation press release, March 3, 2011)
  
  
• Educational assessment solutions publisher CTB/ McGraw-Hill LLC acquired Bookette Software Company, Inc. for an undisclosed amount. California-based Bookette specializes in the development of scalable software to build, administer, score, and report computer-based curriculum assessments for the education market. The acquisition expands CTB/McGraw-Hill's current footprint and will benefit students as the demand for digital testing and assessment solutions continues to grow in the K-12 market. (Source: CTB/ McGraw-Hill LLC press release, March 1, 2011)
  
  

If you have additional colleagues who would like to be added to this monthly distribution or if you would like to be removed from this distribution, please contact one of the professionals listed above.