1. M&A Report, October 2013
M&A Report, October 2013
IT Services, Outsourcing and Distribution

2. Company Background
Service Focus
•
Equity transactions in software and Internet industry``
•
Sell-side representation
•
M&A advisory and sale of significant stakes to strategic or financial
buyers
Team Strength
•
Founded by senior tech industry banker and executives
•
Directors with both operational and M&A experience
•
Supported by London based research and financial analysts
Sector Specialisation
•
Research oriented firm
•
Sector Principals – active domain experts
•
Industry sector focus
October 2013

3. Focus Areas
Hampleton is a highly focused firm that concentrates on specific segments of the IT industry.
Our international team of experienced sector principals provide in-depth analysis and
research into our focus areas.
October 2013

4. IT Services, Outsourcing and Distribution
“The IT services
segment continues to
have higher valuations
for their companies, up
18% since Jan 2011”
$35 M
`
Median value of
all disclosed value
transactions:
Jan 2011-July 2013
$450 M
Total disclosed
value of this focus
area: Jan 2011-July
2013
October 2013

5. Market Outlook
Total transaction count and median revenue
multiples: January 2011 – July 2013
200
1.1x
1.1x
1.1x
0.9x
Sub-Sector Overview
1.3x
IT Outsourcing
35%
150
Integration Services
34%
100
31%
50
0
1H 2011
2H 2011
Deal Counts
1H 2012
2H 2012
1H 2013
Distribution &
Technological Supports
The chart above shows the total number of deal
counts for each sub-sector between 1H 2011 and 1H
2013.
Median revenue multiple
The IT services segment, which comprises Integration Services, Distribution and Outsourcing in our report, has continued
to perform well since Jan 2011 with its highest multiple of the period at the end of July 2013 at 1.3x. One of the notable
deals that buoyed the median multiple in the sector was the Accenture acquisition of the digital marketing and
eCommerce services company, Acquity Group Ltd. [NYSE MKT: AQ], for 2.0x times revenues.
October 2013

6. Geography of Transactions
Headquarters of Acquirers
purchasing European Targets
Target Headquarters
$7.2 B
Europe
Total disclosed value of
European Target
transactions
4%
70%
19%
50%
46%
11%
50%
Percentage of European
targets purchased by
European acquirers
European targets in the IT services segment have become more attractive to
acquirers. After a downward trend in volume from Jan 2011 – 2012, European
target M&A transactions are up 5% in the last two half-years. Data from the
first six months of 2013 suggests that European targets accounted for 20% of
worldwide transaction volume in IT services.
European targets are more likely to be acquired by European companies. Pure
European acquisitions accounted for 50% of the volume in the sector.
Norwegian Atea ASA was the most active buyer, acquiring 3 Integration
Services companies since 2011.
October 2013

7. Sub-Sector Breakdown
Distribution & Technology Supports
IT Outsourcing
60
60
50
50
40
40
30
30
20
20
10
10
0
1H 2011 2H 2011 1H 2012 2H 2012 1H 2013
Total Transaction Count
Integration Services
60
50
1H 2011 2H 2011 1H 2012 2H 2012 1H 2013
Total Transaction Count
Within IT Services throughout the five-half year period, Outsourcing had the
largest number of completed deals at 195. Moreover, both its median value and
median revenue multiple were the highest of the three sub-sectors at $59 million
and 1.4x respectively.
Integration Services had the highest transaction volume among the sub-sectors in
the first six months of 2013. 24 transactions were completed with a median value
of $10 million per transaction.
40
30
20
10
0
0
80% of European IT
Outsourcing targets
were acquired by
European companies,
with only 20% being
acquired by North
American buyers during
the first half 2013.
1H 2011 2H 2011 1H 2012 2H 2012 1H 2013
Total Transaction Count
The Distribution & Technology Supports sub-sector accounted for 18 transactions
during the first half of 2013. While deal volume remained steady from July
2011-12 and then dropped, the median revenue multiple of 2.0x climbed to its
highest level since Jan 2011.
October 2013

8. Contact Details
Jo Goodson
Miro Parizek
Senior Director
jo@hampletonpartners.com
Mobile: +44 7551-156452
Skype: jogood1964
Principal Partner
miro@hampletonpartners.com
Mobile: +44-7551-156-453
Skype: miro.parizek
16 Hanover Square
London
W11 SLT
United Kingdom
October 2013

9. Hampleton Professionals
Jo Goodson
Senior Director
Thomas Berglund
Associate Partner
Lynda Tripp
Senior Editor
Henrik Jeberg
Director
Frank Berger
Associate Partner
Neal McCleave
Sector Principal
Rachel Muzyczka
Analyst
Miro Parizek
Principal Partner
Axel Brill
Director
Christian Daher
Sector Principal
Vu Nguyen
Analyst
Alexander Franke
Sector Principal
Ramakanth Desai
Senior Advisor
October 2013

10. Hampleton provides independent M&A and corporate finance advice to owners of Internet, IT Services and Software
companies. Our research aim to provide our clients with current analysis of the transactions, trends and valuations
within our focus areas.
Data Source: We have based our findings on data provided by industry recognised sources. Data and information
for this publication was collated from the 451 Research database (www.451research.com), a division of The 451 Group.
Disclaimer: This publication contains general information only and Hampleton Ltd. is not, by means of this
publication, rendering professional advice or services. Before making any decision or taking any action that may affect
your finances or your business, you should consult a qualified professional adviser. Hampleton Limited shall not be
responsible for any loss whatsoever sustained by any person who relies on this publication.
© 2013. For more information, contact Hampleton Ltd.
London
16 Hanover Square
W1S1HT
United Kingdom
San Francisco
1 Sutter St
CA 94104
United States
Email jo.goodson@hampletonpartners.com
October 2013