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 June 4, 2013
Transaction Analysis
Salesforce.com to Acquire ExactTarget for $2.5 Billion
 
Financial Overview:
  • Transaction Value:                                            $2.50 billion
  • Implied Enterprise Value:                                $2.35 billion
  • Implied Enterprise Value/LTM Revenue:                    7.1x
  • Transaction Structure:                                                  Cash

 martinwolf Analysis:

  • Salesforce.com, Inc. (NYSE:CRM) yesterday signed a definitive agreement to acquire ExactTarget, Inc. (NYSE:ET), a provider of marketing software services, for $2.5 billion in cash.
  • The offer per share is $33.75, close to a 53 percent premium over ExactTarget's closing price on Monday, June 3rd, resulting in an enterprise value of 7.1 times 12 months of revenue.
  • At that multiple, this acquisition falls near the middle of the upper range for major SaaS acquisitions in 2012 and 2013, which we noted in our latest report on SaaS leaders as being between 5.7 and 12 times 12 months trailing revenue. The report is based on our proprietary MW IT Index�, which tracks enterprise values of IT companies in various sectors, including SaaS. 
  • With this acquisition, Salesforce.com is looking to build on two previous acquisitions in the space. Last year, the company bought Buddy Media, a social media manager, for $689 million. Two years ago, it purchased Radian6, a company that provides a platform for customers to measure their effectiveness on social sites such as Facebook and Twitter.
  • This latest acquisition of ExactTarget -- the largest ever for Salesforce.com -- was not unexpected. In March, Salesforce.com announced that it would raise $1 billion in debt specifically for acquisitions by issuing convertible notes due in 2018.
  • Raising debt for acquisitions, and this transaction, reflect that Salesforce.com knows it must take aggressive action to stay competitive with large traditional software companies such as IBM, Oracle and SAP -- all of whom have made billion-plus acquisitions to bolster and expand their SaaS portfolios. ExactTarget no doubt would have been an attractive acquisition opportunity for one of these software titans had Salesforce.com not made the move first.
  • The purchase also reflects that the SaaS space is maturing and SaaS companies themselves must look to acquisitions to continue their high rates of growth.
  • For these reasons, we would expect to see even more M&A activity over the next 12 to 18 months in the SaaS space -- a sector that has already been very acquisitive in the past two years.
  • To underscore the pace of acquisitions in the SaaS/cloud industry, today IBM announced that it has agreed to buy SoftLayer Technologies, a cloud computing company, for a reported $2 billion.
To view the press release, click here.

Source of Financial Overview data: CapitalIQ

 

martinwolf was not the adviser in this transaction.

 

To learn more about martinwolf contact Matthew Putzulu at mputzulu@martinwolf.com.  

About martinwolf    

 

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With offices in San Francisco and Bangalore, India, martinwolf is a leading middle market M&A Advisory focused on companies with services-based business models. Since 1997, our team has completed more than 115 transactions in six countries. We are a five-year member of the Merrill Lynch PS Referral Network, and were selected as ICICI Bank's (India's leading private bank) exclusive strategic partner for acquiring U.S. IT companies. martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com.

 

May 1, 2013

Publicly traded Veramark Technologies, Inc. (VERA:OTCB), a Rochester, NY-based provider of Telecom Expense Management (TEM) solutions, announced it has agreed to be taken private by Varsity Acquisition LCC and All Big Ten Holdings, Inc., a wholly owned subsidiary of Varsity. martinwolf acted as the financial advisor to Varsity in this transaction. Veramark works with companies to take the complexity and expense out of telecom, including managing costly mobile devices and networks. All of the company's solutions are hosted SaaS or available as on-premise software..

Please click here to view the announcement.  


November 6, 2012

Rolta, through its subsidiary Rolta International, Inc. announced that it acquired 

AdvizeX Technologies, LLC, a US company providing a comprehensive set of IT products and services ranging from roadmap planning to cloud-computing implementation strategy. With the acquisition, Rolta is now one of the top national partners of Oracle, Microsoft, HP, EMC and VMware in the US. Rolta was represented by martinwolf in the transaction. 

Please click here to view the announcement.

 

June 15, 2012

glendonTodd Capital LLC announced that it acquired Aztec Systems, a leading provider of enterprise technology solutions to hundreds of U.S. middle-market companies. Aztec was represented by martinwolf in this transaction. Aztec, a member of Microsoft's Presidents Club, was recently ranked 27th in revenue on Bob Scott's 2012 Top 100 VARS list and serves more than 700 middle-market clients. Terms of the transaction were not disclosed. Please click here to view the announcement.

 

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