Internet Monthly
January 2010
NEWS BYTES
• • 2010 is off to a busy start for financing activity, with several private placements completed for companies of all stages and four IPO filings (including ReachLocal’s December filing) While M&A got off to a slower start, we expect activity to pick up for a number of reasons – (i) a significant number of media companies emerging from restructurings are focused on growing the digital side of their businesses, (ii) public market valuations have rebounded faster than underlying fundamentals, which should drive acquisition-based growth strategies and (iii) the opening of the IPO market as a viable liquidity alternative creates a dual-track process for every late stage financing. Facebook recently announced the integration of Pay With Facebook, its virtual goods micro transaction payments platform, with Zynga’s popular FarmVille game (75M active monthly players and 25M active daily players!), with the likely intention to become the default payment system for all virtual goods and micro transactions on Facebook, and possibly beyond its borders. Transactions will carry a 30% fee, generating significant revenue for Facebook, possibly exceeding its advertising revenue (US virtual goods market expected to reach $1.6 bn in 2010) and has incredible potential beyond Facebook, due to the significant and growing number of sites using FacebookConnect and the sheer size and daily engagement of its user base, which exceeds 110 million people in the US. Here are some of the trends we see for 2010:
NOTEWORTHY FINANCING ACTIVITY (Q1 ‘10)
• 1/27/10: Yelp announces it has raised up to $100mm in a fifth round of funding led by Elevation Partners, including $25mm of proceeds to the Company and up to $75mm to selling shareholders • 1/26/10: QuinStreet files amended registration statement for IPO with proceeds of up to $190mm ($808mm market cap and $716mm TEV at midpoint, or 2.5x CY 2009 revenue and 10.7x CY 2009 EBITDA) • 1/22/10: Motricity files a registration statement for IPO with proceeds of up to $250mm • 1/22/10: Everyday Health (Waterfront Media) files a registration statement for IPO with proceeds of up to $100mm • 1/21/10: Aircell announces it has raised $176mm in a round of funding from new and existing investors • 1/4/10: Quantcast announces it has raised $27.5mm in a third round of funding led by Cisco Systems and Polaris Venture Partners • 12/22/09: ReachLocal files registration statement for IPO with proceeds of up to $100mm
•
•
Availability of data is significantly impacting online marketing. Improving ability to target and track campaigns will increase a shift towards performance-based display marketing, away from CPM pricing. Publishers will increasingly view and use their data as an asset and revenue source. Longer term, we believe this will impact television advertising, which will be held to a similar performance-based standard. Local and hyperlocal models grow rapidly. The proliferation of smart phones and other location-aware devices will foster a new wave of location-based services. In addition, the decline of the local print industry (directories and newspapers) will spur growth of online models, giving rise to a number of hyperlocal news/content/services businesses. Rise of recession-driven businesses. The challenging economy will continue to support the growth of recent deal/discount and cost-savings oriented business models. Many of these businesses took off in 2009 and will continue to grow rapidly in 2010, such as couponing (coupons.com, groupon, buywithme), private/sample sales (gilt, hautelook, ideeli, ruelala), offer-based marketing (offerpal, superrewards, trialplay) and personal cost savings tools (mint, billshrink, creditcards.com). Growth of online video will accelerate. As a result of over-the-top solutions, there will be a faster shift of video-based brand advertising online. Additionally, on demand video content consumption (DVR, VOD, internet, mobile) is spurring the development of companies building new advertising technology to better track, deliver and report media, and performance.
NOTEWORTHY M&A ACTIVITY (Q1 ‘10)
• 1/22/10: AOL announces it has acquired StudioNow for $36.5mm • 1/20/10: Opera announces it has acquired Ad Marvel for $23mm • 1/11/10: Shanda Games announces it has acquired Mochi Media for $80mm • 1/5/10: Apple announces it has acquired Quattro Wireless for $275mm (~13.8x Revenue) • 1/4/10: Flixster announces it has acquired Rotten Tomatoes (price not disclosed)
PUBLIC EQUITY STOCK PRICE PERFORMANCE
INDEX Content Commerce/Services Search/Marketing Travel Infrastructure/Software NASDAQ
Source: Capital IQ as of 1/28/2010
YTD (3.7)% (5.5)% (9.6)% (13.5)% (6.4)% (5.6)%
Q4 ’09 (13.1)% 9.2% 1.3% 16.8% 16.3% 10.3% KEVIN SCHEETZ Semiconductors; Hardware 310-443-2314 kevin.scheetz@moelis.com
LTM 29.6% 78.6% 46.1% 161.1% 56.6% 44.5%
JUSTIN LANCER Internet/Digital Media 310-443-2363 November 2007 justin.lancer@moelis.com LOS ANGELES 1999 Avenue of the Stars Suite 1900 Los Angeles, CA 90067 NEW YORK 399 Park Avenue 5th Floor New York, NY 10022
STUART GOLDSTEIN Software 310-443-2380 stuart.goldstein@moelis.com CHICAGO 77 W. Wacker Drive 32nd Floor Chicago, IL 60601 BOSTON 1 Post Office Square Boston, MA 02109
LONDON 1 Berkeley Street London W1J 6DJ
AUSTRALIA Level 34 50 Bridge St Sydney , NSW 2000
I. Market Update
Equity Market Conditions – Week of January 19, 2010
After posting a 23.5% return in 2009, the S&P 500 is off to one of the best starts on record, S&P 500 PERFORMANCE
despite the late-week sell-off mainly attributable to concerns among financials
1,750 1,500 1,250 1,000 750 500 1/07 8/07 3/08 10/08 6/09 1/10
• YTD, the S&P has returned 1.9% vs. (5.6%) over the same period in 2009 • Earnings posted by JPMorgan showed that its retail bank was still struggling, which
caused concern among market participants that the U.S. economy and consumer may have further progress to make before a full recovery takes hold
The Federal Reserve Beige Book, a report issued by each of the 12 Federal Reserve districts,
reported economic conditions across the districts have improved more broadly
• Ten districts reported increasing/improving conditions, while two—Philadelphia and
Richmond—reported little change/mixed conditions vs. the previous report in which eight reported improving conditions and four reported mixed conditions
VOLATILITY INDEX (VIX)
80 60 40 20 0 1/07 8/07 3/08 10/08 6/09 1/10
• Labor conditions remain generally weak, with only a few districts reporting modest
wage improvement
The latest declaration from the Federal Reserve is that financial markets are healthy
enough to remove most emergency aid
• General expectations across the Street are for the Fed to wait at least six months before
raising borrowing costs
• Citigroup and Wells Fargo recently priced follow-on offerings for $17bn and $12bn,
respectively, to repay government funds
With a 4th quarter annualized GDP consensus of 4.3%, market participants feel that one of
the longest recessions in U.S. history is finally over after 3rd quarter GDP grew 2.2%
ANNUAL NEW ISSUE VOLUME (EQUITY & RELATED) ($BN)
$400 $350 $300 $250 $200 $150 $100 $50 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 YTD '09 YTD '10 $5 $7 $301 $260 $183 $204 $211 $218 $259 $345 $294 $314
• Key economic releases this week focus on housing starts, producer prices, and jobless
claims
The equity capital markets in 2009 surpassed 2008 issuance by $23bn • IPO issuance for 2009 decreased ~12% to $27bn in 64 deals vs. 2008 where 51 deals
raised $31bn
• Follow-on issuance in 2009 increased ~24% to $250bn in 661 deals, vs. 2008 where 275
deals raised $202bn
• Convertible issuance in 2009 decreased ~36% to $38bn in 113 deals vs. 2008 where 95
deals raised $59bn
[3]
Initial Public Offerings – Recent Deals (Q4 ’09) & Forward Calendar (Q1 ’10)
($ in millions, except per share data) Pricing Date Issuer Ticker Offer Price
Secondary Vs. Shares Proceeds or Div % Range
1st Day Close
Offer / Current
% of Mkt Cap
Mkt Cap LTM Multiples¹ @ Issue P/Sales P/E Sector
Bookrunners
Forward Calendar Week of 1/25 China Electric Motor Week of 1/25 China Hydroelectric 1/26/10 1/26/10 1/26/10 1/27/10 Terreno Realty QuinStreet FriendFinder Networks CELM CHC TRNO QNST FFN $6.00 $16.00 $7.00 $20.00 $19.00 $11.00 4.3 4.4 2.5 15.0 10.0 23.0 $26 $70 $18 $300 $190 $253 Manufacturing Energy / Electric Oil & Gas Real Estate Internet / Software Internet / Software Roth, WestPark Broadband, Merriman Rodman, Newbridge KeyBanc, Baird, Stifel BAML, CS, JPM Renaissance, Ledgemont
Andatee China Marine Fuel ServicAMCF
In Registration TBD TBD TBD TBD Everday Health Motricity ReachLocal VRingo EVDV MOTR NA VRNGU $100 $250 $100 $10 Internet / Software Internet / Software Internet / Software Internet / Software GS, JPM, JEFF, NDHM BAR, DB, GS, JPM, RBC BAML, JPM, CITI Maxim Group
Internet/Software 12/9/09 11/19/09 11/17/09 AOL, Inc. Archipelago Learning Fortinet AOL ARCL FTNT $23.50 $16.50 $12.50 11.4 6.3 12.5 $268 $103 $156 0% 54% Below Above 0.1% 13.8% 33.0% (0.6%) 8.1% 42.4% 10.8% 24.9% 19.4% $2,484 $414 $805 0.7x 9.8x 3.3x 4.4x 58.3x 33.3x Technology Technology Technology BAML, WMB MS, JPM, DB 50% In-High
Source: Company filings, Capital IQ, Dealogic Note: 1 At time of offering
[4]
Initial Public Offerings – Recent Deals (Q4 ’09)
($ in millions, except per share data) Pricing Date Issuer Ticker Offer Price
Shares
Proceeds
Secondary or Div %
Vs. Range
1st Day Close
Offer / Current
% of Mkt Cap
Mkt Cap @ Issue
LTM Multiples¹ P/Sales P/E
Sector
Bookrunners
Recent Transactions 1/22/10 1/22/10 1/22/10 12/17/09 12/15/09 12/15/09 12/11/09 12/11/09 12/9/09 11/19/09 11/19/09 11/19/09 11/13/09 11/12/09 11/6/09 11/6/09 11/5/09 10/27/09 10/27/09 10/22/09 10/20/09 10/12/09 10/7/09 10/7/09 10/6/09 10/1/09 10/1/09 Cellu Tissue Holdings Chesapeake Lodging Trust Symetra Financial Kraton Performance Polymers Cobalt International Energy Team Health Holdings Concord Medical Services KAR Holdings Pebblebrook Hotel Trust Cloud Peak Energy Global Defense Technology 7 Days Group Holdings rue21 Dollar General Duoyuan Printing STR Holdings LLC Hyatt Hotels Addus HomeCare Corp Vitamin Shoppe Invesco Mortgage Capital Inc. AGA Medical RailAmerica Mistras Group Inc Omeros Corp Verisk Analytics Inc Echo Global Logistics Education Management CLU CHSP SYA KRA CIE TMH CCM KAR PEB CLD GTEC SVN RUE DG DYP STRI H ADUS VSI DOLE AGAM RA MG OMER VRSK ECHO EDMC $13.00 $20.00 $12.00 $13.50 $13.50 $12.00 $11.00 $12.00 $20.00 $15.00 $13.00 $11.00 $19.00 $21.00 $8.50 $10.00 $25.00 $10.00 $17.00 $12.50 $14.50 $15.00 $12.50 $10.00 $22.00 $14.00 $18.00 8.3 7.5 30.4 10.3 63.0 15.3 12.0 25.0 17.5 30.6 4.6 10.1 7.8 39.2 6.5 12.3 38.0 5.4 9.1 35.7 13.8 11.5 8.7 6.8 98.0 5.7 20.0 $108 $150 $365 $139 $851 $184 $132 $300 $350 $459 $60 $111 $148 $824 $55 $123 $950 $54 $155 $447 $199 $173 $109 $68 $2,156 $80 $360 68% 0% 32% 0% 0% 0% 0% 0% 0% 0% 35% 0% 76% 33% 0% 73% 100% 0% 16% 0% 53% 52% 23% 0% 100% 0% 0% Below In-Mid In-Low Below Below Below In-Mid Below In-Mid Below Below In-High Above In-Low In-Low Below In-mid Below Above Below Below Below Below In-Low Above In-mid In-high (8.5%) (5.0%) 6.3% 0.7% 6.8% (13.6%) 0.2% 2.3% (1.1%) 0.6% 13.6% 27.9% 8.2% (8.6%) 31.0% 12.0% (15.1%) 5.6% (1.8%) 0.7% (8.3%) 0.6% (12.7%) 23.7% 0.4% 20.9% (8.5%) (5.0%) (0.7%) 1.6% 6.5% 22.8% (10.5%) 16.0% 2.3% (3.6%) 13.8% 9.2% 45.4% 13.5% (5.2%) 63.7% 19.3% (11.8%) 18.4% (7.0%) (1.2%) (17.7%) 15.5% (43.1%) 30.8% (12.6%) 17.2% NA 81.3% 26.8% 34.6% 18.7% 24.5% 24.4% 19.0% 36.1% 97.1% 50.9% 20.7% 34.6% 11.5% 20.6% 68.9% 21.9% 51.4% 34.2% 40.9% 27.5% 21.2% 66.9% 32.0% 55.0% 26.5% 16.7% NA $185 $1,361 $401 $4,538 $749 $541 $1,582 $970 $473 $117 $537 $428 $7,154 $267 $179 $4,344 $105 $452 $1,093 $725 $815 $163 $213 $3,920 $301 $2,156 NM NM 0.8x 0.4x NM 0.5x 13.4x 0.9x NM 0.3x 0.6x 3.1x 1.0x 0.6x 2.5x 0.3x 1.1x 0.4x 0.7x 0.2x 4.0x 1.8x 0.8x 170.3x 4.1x 1.4x 1.1x NM NM 14.9x NM NM 15.0x 28.9x NM NM 2.1x 30.9x NM 27.1x 28.5x 8.2x 9.7x NM 18.4x 39.6x 11.5x 290.1x 26.3x 29.5x NM 23.3x 143.3x 20.6x Paper Mills Real Estate Financial Services Industrials Oil & Gas Healthcare Healthcare Industrials Real Estate Mining Industrials Leisure Consumer Consumer Printing Oil & Gas Lodging Healthcare Retailer Consumer Products Healthcare Transportation Construction Healthcare Technology Transportation Education BAML, Baird, Blair JPM, DB, FBR BAML, JPM, GS, BAR CS, BAML, MS CS, GS, JPM CS, DB, UBS, MK, MS, JPM, China Int'l GS, CS, BAML, JPM BAML, RJ, WF CS, MS, RBC Cowen & Company JPM, CITI BAML, GS, JPM C, GS, BAML PJC, Roth CS, GS GS RB, OPP JPM, BAML, BAR GS, BAML, DB BAML, CITI, DB CITI JPM, CS, BAML DB, WEDBUSH BAML, MS MS, CS GS, JPM, BAML
Source: Company filings, Capital IQ, Dealogic Note: 1 At time of offering
[5]
Follow-On Offerings – Recent Deals & Forward Calendar (Q1 ‘10)
($ in millions, except per share data)
Pricing Date Issuer Ticker
Offer Price Shares Proceeds
File Price
File-to-
Disc-to- Offer-to-
% of
Market Cap
Days Tr @ 90ADTV
Filing Date Sector Bookrunners
Offer Last Trade Current Mkt Cap
Forward Calendar
Week of 1/25 1/26/10 1/26/10 TBA TBA 1/21/10 1/22/10 1/22/10 1/22/10 1/22/10 1/21/10 1/21/10 1/21/10 1/20/10 1/20/10 1/20/10 1/20/10 1/20/10 1/15/10 1/14/10 1/14/10 1/14/10 1/14/10 1/14/10 1/14/10 1/14/10 1/13/10 1/13/10 1/13/10 1/13/10 1/12/10 1/12/10 1/12/10 1/12/10 1/12/10 1/11/10 1/8/10 1/8/10 1/7/10 1/7/10 1/6/10 1/6/10 1/5/10 1/4/10 Flagstar Bancorp Inc Ares Capital Corp Concho Resources Inc Colony Financial Inc Ultimate Escapes Inc KIT Digital Inc Achillion Pharmaceuticals Inc Curis Inc Fifth Street Finance Corp Centene Corp Vantage Drilling Co AMAG Pharmaceuticals Inc Cinemark Holdings Inc InterMune Inc Inergy LP Charles Schwab Corp Aastrom Biosciences Inc Berry Petroleum Co Broadwind Energy Inc DexCom Inc Hersha Hospitality Trust Kayne Anderson MLP Rex Energy Corp El Paso Pipeline Partners LP First Midwest Bancorp Inc Main Street Capital Corp Targa Resources Partners LP Associated Estates Realty Corp Associated Banc-Corp Legacy Reserves LP Orient-Express Hotels Ltd TransMontaigne Partners LP Invesco Mortgage Capital Solta Medical Inc Synta Pharmaceuticals Corp ZymoGenetics Inc Enterprise Products Partners LP Energy Transfer Partners LP Beazer Homes USA Inc Tortoise Energy Capital Corp First Community Bank Corp FBC ARCC CXO CLNY UEI KITD ACHN CRIS FSC CNC VTG AMAG CNK ITMN NRGY SCHW ASTM BRY BWEN DXCM HT KYN REXX EPB FMBI MAIN NGLS AEC ASBC LGCY OEH TLP IVR SLTM SNTA ZGEN EPD ETP BZH TYY FCFL $10.50 $2.08 $2.52 $11.20 $30.50 $19.25 $30.50 $1.49 $48.25 $14.55 $14.10 $36.25 $19.00 $0.26 $29.25 $5.75 $8.75 $21.50 $3.00 $23.61 $12.25 $24.48 $11.00 $14.75 $23.14 $11.10 $11.15 $20.42 $10.00 $26.60 $21.25 $2.02 $4.50 $6.00 $32.42 $44.72 $4.60 $22.70 $33.33 3.0 10.3 6.4 7.0 4.0 5.0 2.8 30.0 3.6 7.5 5.0 5.0 26.3 46.2 8.0 15.0 3.5 8.5 45.0 5.5 6.0 8.8 18.8 2.5 5.5 5.2 44.8 4.9 12.0 2.0 8.1 8.5 5.6 16.1 9.5 9.8 22.4 1.2 0.6 $416 $250 $205 $288 $40 $31 $21 $16 $78 $122 $96 $84 $45 $174 $109 $71 $181 $500 $12 $234 $86 $31 $183 $135 $130 $74 $214 $207 $37 $127 $57 $500 $100 $120 $54 $171 $17 $25 $97 $308 $437 $103 $28 $20 $10.80 $2.60 $2.37 $11.74 $32.65 $21.00 $30.65 $1.45 $49.99 $15.07 $14.81 $37.53 $19.29 $0.34 $29.23 $5.84 $9.22 $22.98 $3.70 $25.28 $12.04 $25.50 $10.95 $14.92 $24.16 $11.93 $11.48 $21.50 $10.98 $28.00 $23.99 $2.10 $5.46 $6.77 $33.08 $46.10 $5.42 $24.13 $2.78 (2.8%) (20.0%) 6.3% (4.6%) (6.6%) (8.3%) (0.5%) 2.8% (3.5%) (3.5%) (4.8%) (3.4%) (1.5%) (23.1%) 0.1% (1.5%) (5.1%) (6.4%) (18.9%) (6.6%) 1.7% (4.0%) 0.5% (1.1%) (4.2%) (7.0%) (2.9%) (5.0%) (8.9%) (5.0%) (11.4%) (3.8%) (17.6%) (11.4%) (2.0%) (3.0%) (15.1%) (5.9%) nm (1.7%) (8.8%) 6.3% 0.5% 0.6% (0.8%) (0.5%) 0.0% (2.1%) 1.5% (3.4%) (1.2%) (0.1%) 7.6% (0.6%) (9.7%) (5.1%) (2.4%) (9.6%) (0.6%) (2.4%) 0.1% (4.2%) 0.1% 0.2% (1.6%) (7.2%) (1.4%) (0.5%) 0.0% (1.2%) (3.8%) (0.4%) (1.8%) 0.5% (1.3%) (3.6%) (5.9%) nm 0.4% (12.6%) 5.4% 1.5% 0.9% (1.4%) 1.7% 0.7% 7.9% 0.3% (7.2%) 0.9% 3.1% 23.8% 7.4% (3.0%) (5.3%) (9.0%) (18.7%) 0.9% (1.4%) 0.7% (17.8%) 2.1% (2.8%) (7.0%) (13.2%) 1.8% (0.6%) (1.5%) (7.3%) 12.2% 4.9% 0.2% 4.4% (0.7%) 13.9% (1.4%) nm 21.1% 25.3% 9.3% 15.7% 9.5% 11.5% 11.6% 14.9% 20.3% 6.9% 10.3% 8.2% 2.3% 22.6% 15.4% 14.0% 7.2% 38.6% 70.5% 10.7% 15.9% 6.5% 32.8% 20.7% 8.9% 30.5% 32.4% 12.3% 12.1% 14.2% 89.5% 17.1% 16.3% 19.0% 1.5% 5.1% 54.3% 6.5% nm $148 $84 $175 $500 $1,279 $839 $725 $301 $857 $1,589 $681 $2,198 $22,103 $53 $1,524 $616 $424 $473 $192 $1,218 $462 $3,279 $630 $178 $1,424 $188 $1,542 $810 $993 $378 $191 $101 $154 $508 $19,993 $8,506 $190 $432 $10 46.6 18.2 13.9 18.8 6.7 9.4 18.5 25.6 6.6 14.8 8.4 16.6 2.2 18.8 12.6 35.2 10.6 25.0 48.5 20.5 10.2 22.1 19.5 48.9 14.0 32.8 15.4 17.4 15.0 29.2 45.0 100.5 20.9 37.6 7.8 12.0 6.2 14.3 61.0 12/30/09 1/25/10 1/25/10 1/15/10 1/15/10 1/20/10 1/21/10 1/22/10 1/21/10 1/21/10 1/19/10 1/21/10 1/15/10 1/19/10 1/19/10 1/19/10 1/19/10 1/19/10 1/14/10 1/11/10 10/30/09 1/14/10 12/31/09 1/11/10 1/13/10 1/12/10 1/12/10 1/12/10 1/12/10 1/12/10 1/11/10 1/11/10 1/11/10 1/11/10 1/11/10 12/23/09 1/8/10 1/7/10 1/6/10 1/6/10 1/5/10 1/5/10 1/5/10 11/18/09 Financial Services Financial Services Oil & Gas Real Estate Dining & Lodging Technology Healthcare Healthcare Financial Services Transportation Healthcare Financial Services Oil & Gas Healthcare Leisure Healthcare Oil & Gas Financial Services Healthcare Oil & Gas Machinery Healthcare Real Estate Real Estate Closed End Funds Oil & Gas Energy & Utility Financial Services Financial Services Energy & Utility Real Estate Financial Services Oil & Gas Dining & Lodging Oil & Gas Real Estate Healthcare Healthcare Healthcare Energy & Utility Energy & Utility Homebuilding Financial Services Financial Services BAML, JPM, SunTrust BAML, JPM, UBS Roth, Think, Merriman Roth RBC, Rodman WF, UBS, Stifel, RBC MS BAML, GS, JPM UBS, BAML, BAR Johnson Rice, Pareto MS, JPM, GS MS GS UBS, BAML, MS, WF UBS, CITI, JPM, CS Oppenheimer CS, JPM, WF Macquarie, JPM Canaccord MS, JEFF, WF, CITI BAML, RJ, UBS UBS, BAML, CITI, MS KeyBanc, RBC CITI, BAML, BAR, UBS GS, KBW MK BAML, BAR, CITI, DB CITI, RJ CS WF, BAML, UBS DB, BAR MS, WF CS, MS Morgan Keegan LAZ, RBC Leerink, WED, WMB MS, BAR, CITI CITI, BAML, CS CITI, CS, DB, UBS, MOES Stifel RJA
Internet / Software
Recent Transactions
Nordic American Tanker Shipping NAT Tortoise Energy Infrastructure CorpTYG
Government Properties Income Tr. GOV
Source: Company filings, Capital IQ, Dealogic
[6]
Internet Trading Comparables
Moelis & Company Internet Trading Comparables ($ in millions, except per share data)
Prices as of (01/28/10)
% of 52 Company Content / Vertical Information Yahoo! Inc.² AOL, Inc. Move, Inc. Internet Brands, Inc. The Knot, Inc. TechTarget, Inc. Local.com Corp. Blinkx plc Answers Corporation Geeknet, Inc. TheStreet.com, Inc. $15.44 23.37 1.79 7.56 9.28 5.35 5.82 0.25 7.94 1.32 3.11 86% 87% 56% 85% 77% 67% 89% 63% 72% 85% 91% (8%) 0% 8% (3%) (8%) (5%) 0% (7%) (9%) 11% 30% $21,632 2,514 277 357 313 227 85 77 62 77 95 ($3,795) (3) 59 (63) (129) (68) (7) (11) (8) (35) (65) $7,237 2,511 336 294 184 159 77 66 53 43 30 3.6x 0.8x 1.6x 2.9x 1.7x 1.8x 1.4x 2.5x 2.5x 0.7x 0.5x Stock Price Week High YTD Performance Market Cap Net Debt¹ Enterprise Value CY'09E Revenue
Enterprise Value EBITDA CY'10E CY'09E CY'10E CY'09E Price/EPS CY'10E
3.5x 0.9x 1.8x 2.6x 1.7x 1.7x 1.1x 1.5x 2.0x 0.6x 0.5x
12.9x 2.5x 14.3x 8.0x 12.6x 9.9x 37.7x NM 7.0x NM 6.2x
9.8x 3.6x 18.1x 7.0x 10.2x 8.1x 12.1x 28.1x 6.0x NA 3.6x
32.0x 7.8x 23.9x 29.8x NM 28.2x NM NM NM NM NM
25.9x 15.3x 37.3x 23.5x NM 22.5x NM NM 18.0x NM 51.8x
Mean Median Commerce / Services Amazon.com Inc. eBay Inc. Netflix, Inc. Vistaprint GSI Commerce Inc. Ticketmaster Entertainment, Inc. IAC/InterActiveCorp. Blue Nile Inc. Ancestry.com Inc. CoStar Group Inc. Digital River Inc. Drugstore.com Inc. Overstock.com Inc. Shutterfly, Inc. LoopNet, Inc. 1-800-Flowers.com Inc. PC Mall Inc. RealNetworks Inc. Stamps.com Inc. zipRealty Inc. $126.03 23.33 63.04 53.37 22.75 15.40 20.28 53.29 13.88 40.62 25.38 2.97 11.92 15.90 9.44 2.00 5.04 4.54 8.90 4.08 86% 90% 102% 89% 87% 97% 91% 79% 85% 91% 62% 83% 66% 84% 82% 41% 56% 96% 85% 93% (6%) (1%) 14% (6%) (10%) 26% (1%) (16%) (1%) (3%) (6%) (4%) (12%) (11%) (5%) (25%) (3%) 22% (1%) 9% $54,569 30,165 3,445 2,269 1,366 884 2,700 776 600 836 981 298 272 411 340 127 63 612 140 83 Mean Median ($3,885) (4,944) (117) (129) 69 329 (1,643) (47) 54 (224) (403) (34) (18) (112) (77) 114 36 (368) (45) (44) $50,684 25,221 3,328 2,140 1,435 1,213 1,057 729 655 612 578 264 254 299 262 241 99 244 95 39
1.8x 1.7x
1.6x 1.7x
12.3x 9.9x
10.6x 8.9x
24.3x 28.2x
27.8x 23.5x
2.1x 2.8x 2.0x 3.8x 1.5x 0.8x 0.8x 2.4x 2.9x 2.9x 1.5x 0.7x 0.3x 1.3x 3.4x 0.3x 0.1x 0.4x 1.2x 0.3x 1.6x 1.4x
1.7x 2.5x 1.6x 3.0x 1.1x 0.8x 0.7x 2.1x 2.7x 2.8x 1.7x 0.6x 0.3x 1.2x 3.5x 0.3x 0.1x 0.4x 1.1x 0.3x 1.4x 1.2x
34.1x 7.7x 14.7x 17.5x 19.4x 5.0x 6.4x 33.0x 9.5x 13.4x 5.5x NM 11.8x 7.3x 9.4x 8.3x 6.2x NM 10.1x NM 12.9x 9.5x
27.4x 7.0x 12.6x 13.4x 12.3x 4.4x 5.2x 25.1x 8.3x 13.0x 7.7x 17.6x 9.7x 5.9x 9.4x 5.3x 4.7x NM 10.7x NM 11.1x 9.5x
NM 14.0x 33.5x 31.5x NM 18.6x 39.7x NM 19.8x 43.4x 14.7x NM 35.8x NM 36.6x NM 11.2x NM 15.6x NM 26.2x 25.6x
48.6x 12.8x 28.3x 24.0x NM 13.9x 28.4x 47.7x 20.5x 41.1x 22.9x NM 22.1x NM 37.8x 9.2x 7.2x NM 16.1x NM 25.4x 22.9x
Source: Company Filings, Capital IQ Notes: 1 Net Debt includes all outstanding debt, minority interest, and preferred equity 2 Enterprise value adjusted for market value of stake in Alibaba and Yahoo Japan! which stood at approximately $10.6 billion as of 1/26/2010 per Wall Street research
[7]
Internet Trading Comparables (cont’d)
Moelis & Company Internet Trading Comparables ($ in millions, except per share data)
Prices as of (01/28/10)
Enterprise Value Stock Price % of 52 Week High YTD Performance Market Cap Net Debt¹ Enterprise Value Revenue CY'09E CY'10E CY'09E EBITDA CY'10E CY'09E Price/EPS CY'10E
Company Search / Marketing Services Microsoft Corporation Google Inc. Yahoo! Inc.² AOL, Inc. Monster Worldwide, Inc. ValueClick Inc. comScore, Inc. Constant Contact, Inc. Dice Holdings, Inc. Web.com Group, Inc. Marchex, Inc. Unica Corp. Answers Corporation
$29.16 534.29 15.44 23.37 15.60 9.39 13.85 18.01 5.81 5.69 5.50 7.75 7.94
93% 85% 86% 87% 81% 67% 71% 78% 81% 72% 92% 89% 72%
(4%) (14%) (8%) 0% (10%) (7%) (21%) 13% (11%) (13%) 8% 0% (9%)
$258,915 169,514 21,632 2,514 1,961 804 424 514 376 156 194 167 62 Mean Median
($27,471) (24,485) (3,795) (3) (158) (159) (83) (110) 7 (37) (33) (50) (8)
$231,444 145,030 7,236.9 2,511 1,803 645 342 404 383 120 161 117 53
3.9x 7.0x 3.6x 0.8x 2.0x 1.2x 2.7x 3.1x 3.5x 1.1x 1.7x 1.2x 2.5x 2.7x 2.5x
3.7x 6.1x 3.5x 0.9x 2.0x 1.2x 2.4x 2.4x 3.6x 1.1x 1.8x 1.1x 2.0x 2.4x 2.0x
10.4x 11.2x 12.9x 2.5x 23.0x 5.1x 12.1x 33.7x 8.8x 5.9x 13.0x 27.2x 7.0x 13.3x 11.2x
9.3x 9.9x 9.8x 3.6x 17.3x 5.3x 10.0x 18.7x 9.3x 5.3x 13.6x NA 6.0x 9.8x 9.5x
17.6x 19.5x 32.0x 7.8x NM 12.4x NM NM 30.7x 8.5x 49.5x NM NM 22.3x 18.6x
14.9x 17.0x 25.9x 15.3x NM 14.6x 51.1x 49.5x 27.7x 8.0x 49.5x 35.1x 18.0x 27.2x 22.0x
Travel Priceline.com Inc. Expedia Inc. Ctrip.com International Ltd. Orbitz Worldwide, Inc. Travelzoo Inc. $201.68 21.68 32.98 6.14 10.72 87% 67% 84% 76% 70% (8%) (16%) (8%) (16%) (13%) $8,864 6,387 8,851 522 176 Mean Median Infrastructure / Software Adobe Systems Inc. Salesforce.com Akamai Technologies Inc. Rovi Corporation SuccessFactors, Inc. TiVo Inc. Taleo Corp. OpenTable, Inc. Limelight Networks, Inc. Internap Network Services Corp. OpenTV Corp. DivX, Inc. $32.89 64.16 25.31 29.62 16.61 9.28 20.94 24.93 3.55 4.60 1.53 5.60 86% 85% 93% 85% 85% 73% 81% 70% 61% 88% 84% 85% (11%) (13%) (0%) (7%) 0% (9%) (11%) (2%) (9%) (2%) 13% (1%) $17,238 8,014 4,335 3,089 1,191 1,020 832 564 309 233 211 183 Mean Median ($904) (416) (380) 232 (112) (245) (76) (67) (153) (52) (108) (139) $16,334 7,598 3,955 3,321 1,079 775 756 497 156 182 103 44 4.5x 5.9x 4.6x 6.9x 7.2x 3.9x 3.8x 7.4x 1.2x 0.7x NA 0.6x 4.3x 4.5x 4.1x 5.0x 4.2x 6.3x 6.1x 3.7x 3.4x 6.2x 1.1x 0.7x NA 0.6x 3.8x 4.1x 10.7x 44.1x 9.9x 15.8x NM NM NM 34.4x 7.5x 6.8x NA 6.2x 16.9x 10.3x 9.6x 32.5x 9.2x 13.2x NM NM NM 22.7x 7.7x 5.9x NA 7.3x 13.5x 9.4x 18.2x NM 15.5x 20.0x NM NM 29.0x NM NM NM NA NM 20.7x 19.1x 15.9x NM 22.9x 15.8x NM NM 27.5x 59.4x NM NM NA NM 28.3x 22.9x ($448) 74 (33) 528 (16) $8,416 6,461 8,818 1,050 160 3.6x 2.2x 29.7x 1.5x 1.7x 7.7x 2.2x 3.0x 2.0x 21.7x 1.4x 1.6x 5.9x 2.0x 16.0x 7.5x NM NM 14.7x 12.7x 14.7x 12.2x 6.8x NM 6.9x NA 8.6x 6.9x 24.4x 15.9x 47.7x NM NA 29.3x 24.4x 19.6x 14.2x 34.5x 26.6x 35.7x 26.1x 26.6x
Source: Company Filings, Capital IQ Notes: 1 Net Debt includes all outstanding debt, minority interest, and preferred equity 2 Enterprise value adjusted for market value of stake in Alibaba and Yahoo Japan! which stood at approximately $10.6 billion as of 1/26/2010 per Wall Street research
[8]
Internet Comparable Company Estimates
Moelis & Company Internet Comparable Company Estimates ($ in millions) 5-Year Revenue Company Content / Vertical Information Yahoo! Inc. AOL, Inc. Move, Inc. Internet Brands, Inc. The Knot, Inc. TechTarget, Inc. Blinkx plc Local.com Corp. Answers Corporation Geeknet, Inc. TheStreet.com, Inc. Mean Median Commerce / Services Amazon.com Inc. eBay Inc. Netflix, Inc. Ticketmaster Entertainment, Inc. IAC/InterActiveCorp. Vistaprint GSI Commerce Inc. Digital River Inc. Blue Nile Inc. CoStar Group Inc. RealNetworks Inc. Shutterfly, Inc. Overstock.com Inc. LoopNet, Inc. Drugstore.com Inc. 1-800-Flowers.com Inc. Stamps.com Inc. zipRealty Inc. PC Mall Inc. Mean Median $23,982 8,651 1,671 1,471 1,348 583 985 395 305 209 560 229 839 76 404 701 82 122 1,115 $30,270 9,033 2,052 1,545 1,424 712 1,276 343 351 216 562 252 922 75 450 713 84 144 1,180 26.2% 4.4% 22.7% 5.0% 5.6% 22.1% 29.5% (13.3%) 15.0% 3.6% 0.4% 10.2% 9.8% (1.9%) 11.3% 1.8% 2.3% 18.2% 5.9% 8.5% 5.7% $1,506 3,025 226 235 164 130 74 105 22 45 (12) 41 22 28 5 30 9 (7) 16 $1,941 3,240 265 261 202 160 116 75 29 47 (24) 50 26 28 15 46 9 0 21 28.9% 7.1% 17.3% 11.2% 22.6% 23.4% 57.7% (28.8%) 31.4% 3.1% NM 23.4% 21.5% (0.2%) 189.8% 55.2% (5.7%) NM 30.7% 28.7% 22.0% 6.3% 35.0% 13.5% 15.9% 12.2% 22.2% 7.5% 26.5% 7.2% 21.8% NM 17.8% 2.6% 36.6% 1.3% 4.2% 11.5% NM 1.4% 14.8% 12.9% 6.4% 35.9% 12.9% 16.9% 14.2% 22.5% 9.1% 21.8% 8.3% 21.7% NM 20.0% 2.8% 37.3% 3.3% 6.4% 10.6% 0.1% 1.8% 14.4% 12.9% 26.6% 12.0% 15.5% 12.7% 11.5% 24.1% 20.3% 13.0% 18.4% 14.7% 6.7% 16.2% 25.0% 23.8% NA NA 18.0% 20.0% 15.0% 16.7% 15.9% $4,657 3,213 210 100 107 86 26 55 20 60 56 $4,839 2,703 190 115 110 91 43 71 25 68 59 3.9% (15.9%) (9.3%) 15.2% 3.0% 5.7% 66.7% 28.8% 24.1% 13.6% 4.3% 12.8% 5.7% $1,162 987 23 37 15 16 (10) 2 7 (6) NA $1,347 696 19 42 19 20 2 6 8 NA 2 16.0% (29.5%) (21.0%) 14.7% 30.2% 22.2% NM 211.9% 15.8% NA NA 32.5% 15.9% 24.9% 30.7% 11.2% 36.9% 13.7% 18.5% NM 3.7% 36.1% NM NA 22.0% 21.7% 27.8% 25.7% 9.7% 36.7% 17.3% 21.4% 5.4% 9.0% 33.7% NA 3.9% 19.1% 19.4% 17.7% NA 17.7% 25.0% 20.4% 17.7% NA NA NA NA NA 19.7% 17.7% CY'09E CY'10E 09-'10 Growth CY'09E EBITDA CY'10E 09-'10 Growth EBITDA Margin CY'09E CY'10E Est EPS Growth
Source: IBES, Company Filings, Capital IQ
[9]
Internet Comparable Company Estimates (cont’d)
Moelis & Company Internet Comparable Company Estimates ($ in millions) Revenue CY'10E EBITDA CY'10E EBITDA Margin CY'09E CY'10E 5-Year Est EPS Growth
Company Search / Marketing Services Microsoft Corporation Google Inc. Yahoo! Inc. AOL, Inc. Monster Worldwide, Inc. ValueClick Inc. comScore, Inc. Constant Contact, Inc. Dice Holdings, Inc. Web.com Group, Inc. Marchex, Inc. Unica Corp. Answers Corporation
CY'09E
09-'10 Growth
CY'09E
09-'10 Growth
$58,539 17,430 4,657 3,213 906 529 128 129 109 107 92 100 20
$62,562 20,525 4,839 2,703 898 534 145 170 106 111 91 111 25
6.9% 17.8% 3.9% (15.9%) (0.9%) 1.0% 13.4% 32.3% (2.8%) 4.1% (1.6%) 11.3% 24.1%
$22,674 10,939 1,162 987 78 126 28 12 43 20 12 4 7
$24,859 12,779 1,347 696 104 122 34 22 41 23 12 NA 8
9.6% 16.8% 16.0% (29.5%) 32.4% (3.1%) 21.1% 79.7% (5.1%) 14.4% (4.2%) NA 15.8%
38.7% 62.8% 24.9% 30.7% 8.7% 23.7% 22.1% 9.3% 40.0% 18.9% 13.4% 4.3% 36.1%
39.7% 62.3% 27.8% 25.7% 11.6% 22.8% 23.6% 12.7% 39.0% 20.8% 13.1% NA 33.7%
11.0% 20.9% 17.7% NA 37.0% 14.0% 22.2% 36.3% 10.0% 16.3% 17.6% 35.0% NA
Mean Median Travel Priceline.com Inc. Expedia Inc. Ctrip.com International Ltd. Orbitz Worldwide, Inc. Travelzoo Inc. Mean Median Infrastructure / Software Adobe Systems Inc. Salesforce.com Akamai Technologies Inc. Rovi Corporation SuccessFactors, Inc. TiVo Inc. Taleo Corp. OpenTable, Inc. Limelight Networks, Inc. OpenTV Corp. Internap Network Services Corp. DivX, Inc. Mean Median $3,595 1,294 855 478 151 196 199 67 131 NA 256 69 $3,956 1,504 939 529 177 203 224 80 138 NA 254 75 $2,324 2,946 292 719 95 $2,813 3,272 400 756 100
7.2% 4.1%
13.7% 15.1%
25.7% 23.7%
27.7% 24.7%
21.6% 17.7%
21.1% 11.1% 37.0% 5.1% 5.4% 15.9% 11.1%
$525 861 114 (81) 11
$694 948 160 153 NA
32.2% 10.1% 39.8% NM NA 27.3% 32.2%
22.6% 29.2% 39.2% NM 11.5% 25.6% 25.9%
24.7% 29.0% 40.0% 20.2% NA 28.5% 26.8%
19.4% 11.2% 29.2% 12.3% NA 18.0% 15.8%
10.0% 16.3% 9.8% 10.8% 17.4% 3.8% 12.6% 19.6% 5.1% NA (0.8%) 8.8% 10.3% 10.0%
$1,535 176 398 210 1 (8) 45 14 21 NA 27 7
$1,709 246 431 252 10 (3) 54 22 20 NA 31 6
11.4% 39.4% 8.4% 19.6% 638.6% NM 18.6% 51.5% (3.1%) NA 15.7% (14.3%) 78.6% 17.1%
42.7% 13.6% 46.5% 44.1% 0.9% NM 22.8% 21.5% 15.8% NA 10.4% 10.2% 22.8% 18.7%
43.2% 16.3% 45.9% 47.6% 5.8% NM 24.0% 27.2% 14.6% NA 12.1% 8.0% 24.5% 20.2%
12.5% 35.9% 10.3% 15.8% 23.3% NA 22.8% 48.2% 11.8% 57.0% 6.0% 20.0% 24.0% 20.0%
Source: IBES, Company Filings, Capital IQ
[ 10 ]
Selected Recent Internet Private Placement Activity (Q1 ’10)
Amount Raised ($ mm) $4.6 2.0 100.0 21.0 176.0 17.5 5.5 5.0 12.0 25.0 2.3 2.0 20.0 20.0 1.6 6.0 4.3 0.8 22.0 3.5 20.0 17.4 8.7 7.0 2.0 16.0 8.9 2.0 1.9 1.0 10.0 9.0 2.0 16.0 10.8 1.3 1.3 27.5 2.4
Date 1/29/10 1/28/10 1/27/10 1/25/10 1/22/10 1/21/10 1/21/10 1/21/10 1/20/10 1/19/10 1/19/10 1/19/10 1/18/10 1/18/10 1/15/10 1/14/10 1/14/10 1/14/10 1/13/10 1/13/10 1/12/10 1/12/10 1/12/10 1/12/10 1/12/10 1/11/10 1/11/10 1/11/10 1/8/10 1/8/10 1/6/10 1/6/10 1/6/10 1/5/10 1/5/10 1/5/10 1/5/10 1/4/10 1/4/10 Apisphere Beyond the Rack Yelp Mimecast Aircell 6 Waves BuyWithMe Crowd Flower SMS GupShup Boku CareCloud.com Sway Guvera KupiVIP.RU Blippy Impact Radius Inc. Eyeka SocialGo Visible Technologies, Inc.
Issuer
Investors NA Oleg Tscheltzoff; Oliver Jung Elevation Partners Dawn Capital, Index Ventures NA Insight Venture Partners Matrix Trinity Charles River Ventures; Helion Venture Partners; Globespan Partners Benchmark Capital; DAG Ventures; Index Ventures; Khosla Ventures NA Origin Ventures AMMA Private Investment Accel Partners; Mangrove Capital Partners Charles River Ventures Redpoint Ventures I-Source Gestion; Ventech; DN Capital Limited; SFR Développement SAS Veddis Ventures In-Q-Tel, Inc.; Ignition Partners; Investor Growth Capital; Centurion Holdings LLC; WPP Digital NA TrustBridge Partners Endeavor Vision; Highland Capital Partners Bessemer Venture Partners; Kleiner, Perkins, Caufield & Byers DFJ, Interwest, Union Square Ventures Gabriel Venture Partners Austin Ventures; Institutional Venture Partners; Shasta Ventures NA NA NA Maven Capital Partners UK LLP Sequoia Capital China Kleiner, Perkins, Caufield & Byers; OVP Venture Partners; DAG Ventures, LLC NA Greylock Partners Ignition Partners ff Asset Management LLC. Commonwealth Capital Ventures; Argos Management Cisco Systems; Polaris Venture Partners Claremont Creek Ventures
Round NA NA 5 2 2 NA 1 1 NA 3 NA 1 NA 2 1 1 2 1 3 NA 3 2 2 2 NA 3 NA NA NA NA NA 3 NA NA NA 1 NA NA NA
Get Satisfaction, Inc. Beijing Sanji Wuxian Internet Technology Co. Spartoo.com ReputationDefender, Inc. Flurry iForem Inc. Spiceworks, Inc. Infraware Inc. (KOSE:A041020) Modavox Inc. (OTCBB:MDVX) HootSuite Paver Downes Associates Ltd. Beijing Jiuhe Shangpin Technology Co., Ltd. Aggregate Knowledge, Inc. Jelli, Inc. Rally Software Development Corp. DataSphere Technologies, Inc. ClearPath Immigration, LLC The Echo Nest Corporation Quantcast EcoFactor, Inc.
Source: Company Filings, Capital IQ, PE Hub
[ 11 ]
Selected Recent Internet M&A Activity (Q1 ’10)
Date Annc'd 1/25/10 1/25/10 1/25/10 1/20/10 1/19/10 1/14/10 1/12/10 1/11/10 1/11/10 1/8/10 1/6/10 1/6/10 1/5/10 1/5/10 1/5/10 1/4/10 1/4/10 1/4/10 Target StudioNow Nuconomy Abnormal Returns Ad Marvel Style Feeder Cake Financial InstantService, Inc. Komplett Bv Mochi Media Yokel Inc. TIG Global, LLC CustomFlashGames.com Quattro Wireless, Inc. Softonic International S.L. Les productions Eventia Inc. Rotten Tomatoes Abso, Inc. Cheap Online Shipping.com Acquirer AOL LivePerson StockTwits Opera Time Warner E*Trade Art Technology Group Inc. (NasdaqGM:ARTG) Paradigit Holding B.V. Shanda Games Citysquares Online, Inc. MICROS Systems, Inc. (NasdaqGS:MCRS) Cascadia Investments, Inc. (OTCPK:CDIV) Apple Inc. (NasdaqGS:AAPL) Digital River Inc. (NasdaqGS:DRIV) Intema Solutions Inc. (TSXV:ITM) Flixster, Inc. Sterling Infosystems, Inc. myFreightWorld LLC Transaction Value ($ mm) $36.5 $3.0 NA $23.0 NA NA $17.0 NA $80.0 NA NA NA $275.0 $26.0 $0.9 NA NA $0.3 Valuation Data
~ 13.8x LTM Revenue 1.0x LTM Revenue 2.1x LTM Revenue
Source: Company Filings, Capital IQ
[ 12 ]
II. Selected Moelis & Company Credentials
Moelis & Company Overview
Aerospace & Defense Automotive & Transportation Building Products Chemicals Consumer & Retail
NEW YORK | BOSTON | CHICAGO | LONDON | LOS ANGELES | SYDNEY
Global investment bank founded in July 2007
Entertainment Financial Institutions Financial Sponsors Gaming Healthcare Homebuilding Insurance Internet / Digital Media Media & Broadcasting Metals & Mining Real Estate Restaurants & Leisure Technology Telecom
Grown to 300+ employees covering every major industry sector
Financial advisory services on M&A, capital raises, restructurings and strategic matters
Integrates advisory and capital markets expertise with merchant banking platform
Leading U.S. M&A advisor with $160+ billion in announced M&A deals since inception
Ranked Top 2 Restructuring advisor since 2008
$2.0 billion of capital to support clients and source unique investment opportunities
~110 mandated deals in the pipeline across a number of industries and transaction types
[ 14 ]
Recent Selected Transactions
Pending
December 2009
November 2009
November 2009
November 2009
Sale to MultiPlan Exclusive Financial Advisor
Sale to Jacobs Engineering Exclusive Financial Advisor
$1.2bn Sale to Tilman J. Fertitta Exclusive Financial Advisor and Fairness Opinion Provider November 2009
A$700mm ($646mm) Equity Capital Raising and Capital Management Initiatives Sole Financial Advisor
$127mm Sale to Churchill Downs Exclusive Financial Advisor and Fairness Opinion Provider October 2009
November 2009
November 2009
October 2009
Christcott USA
$75mm Acquisition of Barzel Industries Financial Advisor Sale to GE Aviation $18mm Sale of Enterprise IT Division to QuinStreet Financial Advisor $673mm Sale to American Securities $380mm Acquisition of Charlotte Russe Exclusive Financial Advisor September 2009
Exclusive Financial Advisor October 2009
Financial Advisor and Fairness Opinion Provider September 2009
October 2009
October 2009
$218mm Exchange Offer
$44mm Acquisition of Agilent Technologies’ N2X Data Networks Testing Business Exclusive Financial Advisor
$33mm Sale to A. Raymond Et Cie
$650mm (€444mm) Shareholder Redemption
$450mm Sale to Danaher
Financial Advisor and Joint Dealer Manager
Exclusive Financial Advisor
Fairness Opinion Provider
Financial Advisor
[ 15 ]
Recent Selected Transactions (cont’d)
September 2009
September 2009
September 2009
August 2009
August 2009
$300mm Mandatory Convertible Preferred Stock Co-Manager
$250mm Senior notes
$80mm Term loan facility
$412mm Senior Notes Financial Advisor to the Sponsors and Co-Dealer Manager July 2009
$71mm Disposition of founder’s minority state Financial Advisor
Co-Manager
Sole Placement Agent
July 2009
July 2009
July 2009
June 2009
$450mm Senior notes
$75mm Sale of J. Jill brand to Golden Gate Capital Financial Advisor
$45mm Acquisition of WQXR-FM radio station Exclusive Financial Advisor April 2009
Sale of Thule Towing Systems LLC to GRLC LLC Financial Advisor
Sale to Court Square Capital Partners Financial Advisor
Co-Manager
May 2009
May 2009
April 2009
April 2009
$535mm Follow-on Equity Offering
$150mm Senior convertible note offering $91mm Follow-on equity offering Financial Advisor and Co-Manager
$8.5bn Agreement to complete CityCenter project Financial Advisor
$320mm Non-participating convertible preferred investment by Crown Ltd Financial Advisor
Spin-off of Walter Mortgage Company and the merger of that business with Hanover Capital Mortgage Holdings
Financial Advisor
Financial Advisor
[ 16 ]
Committed Recapitalization & Restructuring Group
Pending
Pending
Pending
Pending
Pending
Restructuring
$3.7bn Recapitalization
$2.9bn Chapter 11 Reorganization
$2.7bn Chapter 11 Reorganization
$1.7bn Recapitalization
Financial Advisor Pending
Financial Advisor to the Company Pending
Financial Advisor to the Company Pending
Financial Advisor to the Company December 2009
Financial Advisor to the Company December 2009
$700mm Chapter 11 Reorganization
$462mm Chapter 11 Reorganization
$200mm Sale of Tropicana Casino Atlantic City Assets Financial Advisor to the Trustee and Conservator October 2009
$9.8bn Chapter 11 Reorganization
$2.7bn Chapter 11 Reorganization
Financial Advisor to the Company October 2009
Financial Advisor to the Company November 2009
Financial Advisor to the Company October 2009
Financial Advisor to the Company September 2009
$350mm Chapter 11 Reorganization
$88mm Restructuring
$206mm Senior Secured Term Loan $73mm Senior Note Repurchase Exclusive Financial Advisor to the Company
$210mm Exchange Offer Financial Advisor to the Company and Joint Dealer Manager
¥58.9bn ($765mm) Refinancing & Restructuring of Debt & Derivative Facilities Financial Advisor
Financial Advisor to the Company
Exclusive Financial Advisor to the Company
[ 17 ]
Expertise in Internet / Digital Media
November 2009 June 2008 May 2008 February 2008
(Internet.com assets)
$18mm Sale to
$30mm Private Placement
$40mm Sale to
$44.6bn Unsolicited proposal from M&A Advisor
July 2007
M&A Advisor
September 2007
M&A Advisor
August 2007
M&A Advisor
August 2007
$225mm Acquisition of Switchboard assets from M&A Advisor
December 2006
Joint Venture with
$60mm Sale to
$374mm Sale to
Financial Advisor
October 2005
M&A Advisor
March 2005
M&A Advisor
January 2005
Strategic investment from and partnership with Viacom’s Financial Advisor
$756mm Sale to
$1.9bn Sale to
$519mm Sale to
M&A Advisor
M&A Advisor
M&A Advisor
[ 18 ]
Seasoned Technology Team with Broad Expertise
SOFTWARE NETWORKING
$695mm Sale to
$279mm Sale to
$45mm Sale to
$1.6bnm Acquisition of
$44mm Acquisition of Indigo Division of
$8.1bn Acquisition of
$330mm Sale to
$730mm Sale to
$1.3bn Sale to
$10.3bn Sale to
$86mm Sale to
$635mm Acquisition of
$210mm Acquisition of
Joint Venture with
$1.9bn Acquisition of
$170mm Sale to
Financial Advisor October 2004
$140mm Sale to
$210mm Acquisition of
$151mm Sale to
$200mm Sale to
Acquisition of
Sale to
$1.5bn Acquisition of
Acquisition of
M&A Advisor
SEMICONDUCTORS
ELECTRONICS/HARDWARE/COMPONENTS
$4.2bn Joint Venture with
$750mm 6.9% Senior Notes
$150mm Investment in the JV between
$35mm Acquisition of
$3.6bn Acquisition of
$2.6bn Sale to
$900mm Acquisition of
$1.4bn Sale to
$620mm PIPE Investment by
$900mm Sale of India-based networking software business to
$350mm Sale of Krone cabling business to
$500mm Merger with
[ 19 ]
Strong Track Record in Private Placements
2008 $103mm Common Stock
2008 Convertible Preferred Stock
2008 $65mm Convertible Preferred
2008 $30mm Convertible Preferred
2007 $159mm Common Stock
2007 $150mmConvertible Preferred
2007 $300mm Convertible Preferred
2007 $35mm Convertible Preferred
2007, 2006 and 2005 $20mm Common Stock $48mm Common Stock $35mm Senior Secured Convertible Notes
2006 $19mm Convertible Preferred
2005 $26mm Convertible Preferred
2005 $27mm Convertible Preferred
2005 $30mm Convertible Preferred
2005 Convertible Preferred Shares
2004 $19mm Convertible Preferred
2004 and 2003 $82mm Common Stock $25mm Common Stock
2004 and 2003 $225mm Senior Unsecured Convertible Notes $77mm Common Stock
2003 and 2002 $100mm Convertible Preferred $50mm Common Stock $60mm Convertible Preferred
2002 $11mm Senior Secured Convertible Debentures
2001 $38mm Convertible Preferred
2000 $37mm Convertible Preferred
2000 $24mm Convertible Preferred
1999 $27mm Convertible Preferred
1998 $40mm Convertible Preferred
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Contact Info / Important Disclosures
Moelis & Company LLC (“Moelis & Company”) has prepared this material for distribution in the United States of America to institutional investors. This material is not a research report. It is for our clients’ informational purposes only, and should not be considered as a recommendation, an offer to sell or the solicitation of an offer to buy any security. We are not soliciting any action based on this material. Moelis & Company does not provide investment, tax, accounting, or legal advice. To be removed from this distribution, forward this message to compliance@moelis.com and include the word ‘remove’ in the subject line of your message. Past performance is not a guarantee or even an indication of future results, and Moelis & Company makes no representation or warranty, express or implied, regarding future performance of any security mentioned in this report. Securities that are denominated in foreign currency, or whose price or value is influenced by foreign currencies (such as ADRs), are subject to currency risk and their prices, values, and any income they produce may fluctuate and/or be adversely affected by exchange rates. Although Moelis & Company makes reasonable efforts to obtain reliable content from third parties, we do not guarantee the accuracy of or endorse the views or opinions given by any third party content provider. Moelis & Company provides investment management as well as mergers and acquisitions and other advisory services to clients, and its personnel may make statements or provide advice that is contrary to information contained in this material. Our proprietary interests may conflict with your interests. In addition, Moelis & Company may from time to time have positions in or effect transactions in securities listed in this material (or derivatives of such securities), or serve as a director of companies mentioned in this material. Moelis & Company may have advised, may seek to advise and may in the future advise or invest in companies listed in this material. ©2008, Moelis & Company LLC member of FINRA (website: http://www.finra.org/) and SIPC. All rights reserved. Absent Moelis & Company’s prior written consent, this material, whether in whole or in part, may not be copied, photocopied, or duplicated in any form by any means, or redistributed. You may obtain information about SIPC, including the SIPC brochure, by contacting SIPC (website: http://www.sipc.org/) phone: 202.371.8300).
CONTACT Justin Lancer Internet/Digital Media Stuart Goldstein Software Kevin Scheetz Semiconductors; Hardware Chris Ryan Equity Capital Markets Dom Petrosino Debt Capital Markets Stan Lai Private Placement Group Ed Chiang Private Placement Group Andrew Lebovitz Technology Group
TELEPHONE 310-443-2363
E-MAIL justin.lancer@moelis.com
310-443-2380
stuart.goldstein@moelis.com
310-443-2314
kevin.scheetz@moelis.com
212-883-3555
chris.ryan@moelis.com
212-883-4550
dom.petrosino@moelis.com
212-883-3550
stan.lai@moelis.com
212-883-3554
ed.chiang@moelis.com
310-443-2385
andrew.lebovitz@moelis.com
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