M&A, Corporate Finance and Strategic Advice for the
Software, Digital Media and IT Services Sectors
Sector Snapshot:
Enterprise Content and Document Management
July 2015
Enterprise Content Management Overview
Enterprise content and docment management has evolved dramatically over the past several years,
now incorporating a variety of new capabilities including social software, collaboration and cloud
based document creation.
Key Points
• Evolution Driving M&A: The dramatic changes taking place
in enterprise content management (ECM) have forced larger players to turn to M&A to bolster their platforms while smaller start-ups have had the opportunity to capture share with innovative new solutions.
• Mid-Size and New Public Players Driving Consolidation:
Our landscape matrix on page 6 and 7 of this report shows more than a dozen mid-size players (page 7), many with new, strong public currencies (e.g. Box) that will be aggressive in leveraging their stock to build out more complete solutions.
• Shake-Out Likely Among Small Players: A number of
newer segments such as cloud file sharing and online
collaboration have become extremely crowded. Many smaller players have begun to drop out and we expect the shakeout to force players to become cash flow positive as further funding for smaller players in these segments vanishes.
• Mobility & Security Impacting Everything: Nearly every
solution throughout the ECM landscape is having to manage a number of key dynamics, most notably mobility and security as enterprises are highly focused on both protecting data and making it widely available to users.
ECM Includes a Broad Suite of Solutions
ECM & EDM encompass an increasingly broad array of software based solutions for managing
content in a variety of media.
Key Points
• Constantly Evolving: Content management covers a wide
range of continuously evolving solutions, given the increasing breadth of content utilized within the enterprise.
• Integration with the IT Stack: Content management
solutions increasingly integrate with related systems within the enterprise IT stack. This is critical as enterprises look to capture more data that flows through the organization and eliminate the need for redundant input or re-creation.
• Application vs Infrastructure: Given the need for greater
integration, content management systems are no longer stand-alone solutions but have become core infrastructure upon which other applications can be built.
• Workflow: CMS solutions are designed around the workflow
to better optimize business processes. As many workers’ primary jobs involve some aspect of creating, managing or accessing enterprise content, solutions carefully designed to follow the workflow provide substantial operational efficiencies.
• Multi-Lingual Content a Growing Challenge: As companies
migrate more content to the web and make it available for global users, managing multilingual content and keeping it current in all languages has become an enormous task. Companies poised to provide automated solutions to solve these challenges are seeing rapid growth.
Enterprise Content Management Landscape
Marketing Automation
Document Management
Web Content Management
Enterprise Mobile Content
Portals & Integration Sales Enablement & Webinar
Language Translation ECM & Cloud File Sharing
Enterprise Collaboration & Social Software
Diversified, Full Suite Providers
Customer Engagement Topology
ECM is built around 5 key pillars: capture, manage, store, deliver & preserve. Virtually any content can
be thought about in this lifecycle.
Acquirers Leading The Consolidation
•
Expanding Point Players
•
Konica
•
Ricoh
•
Financial
•
Large Integrators
Multilingual
Content
Document Management
Web Content Mgmt/
Analytics
Financial Players
Competitive Landscape – Broad Content Management Players
The sector’s largest players, sown below, have broad content management suites facilitating integration
to leverage data. However, in nearly all cases, they still have gaps in their offerings and will likely to
continue to expand their product portfolios through M&A.
Company Web Content & Experience Mgmt
Enterprise Mobile Technology
Marketing Automation & Social Tech
Enterprise Collaboration & Social
Software
ECM & Cloud File Sharing
Portals & Content Integration
Digital & Media Asset Mgmt
Adobe Adobe AEM Sites PhoneGap Adobe Marketing Cloud Scene7, Experience Mgr
DAM
EMC Documentum, Syncplicity Documentum Digital
Asset Manager
HP TeamSite HP WorkSite MediaBin
IBM IBM Web Content
Manager Worklight Foundation
IBM EMM/SMA,
SilverPop Engage IBM Connections FileNet P8 Platform WebSphere Portal Server
Microsoft SharePoint 2013 WCM Yammer, SharePoint
Server 2013 / Office 365 SharePoint 2013 SharePoint 2013
OpenText OpenText Web
Experience Management Content Suite OpenText Portal
OpenText Media Management
Oracle WebCenter Sites Mobile Platform Eloqua Marketing Cloud,
Social Relationship Mgmt WebCenter/OSN WebCenter Content WebCenter Portal WebCenter Content
Salesforce site.com Salesforce1 Platform ExactTarget, Radian6,
Buddy Media, Social.com Chatter
SAP Mobile Platform SAP NetWeaver
Competitive Landscape – Broad Content Management Players
There are many mid-size players with strong platforms in selected areas that have yet to expand into
adjacent segments. Some of these players, including Box and Citrix, have strong public currencies to
leverage and will likely be the leaders in driving further consolidation in the ECM space going forward.
Company
Web Content & Experience Management
Enterprise Mobile Technology
Marketing Automation & Social Technology
Enterprise Collaboration & Social
Software
ECM & Cloud File Sharing
Portals & Content Integration
Digital & Media Asset Management
Alfresco Enterprise Edition
Atlassian Confluence
Box Box
Citrix GoToMeeting ShareFile
Ektron Ektron CMS
Google Google Apps
Harris Broadcast Nexio
SDL SDL Tridion SM2
TIBCO Software tibbr
Sector Profile: ECM Suites
• Core Platform Market Largely Consolidated: ECM suites represent core
platforms for players, and constantly require enhancements and new functionality as new forms of content (video, messaging) and features (security, social, mobile, multilingual) become more important to users.
• New Innovations Driving M&A: To keep their platforms current and
competitive, established players have turned to M&A to acquire important new technologies (see deals at right and on pages 13 thru 15.
• Growth in SMB Market: Historically focused primarily on larger enterprises,
the SMB market is seeing a number of players providing ECM solutions to meet the growing needs of small and mid-sized enterprises.
• Lexmark Very Acquisitive in EDM: Lexmark has been highly acquisitive,
buying a number of players to build a strong ECM suite to leverage its computer and printer businesses.
Trends and Commentary
Key Transactions
Target
Acquirer
Price
Rev
Mult
OpenText Nstein Tech $33,485,500 1.5x
Lexmark Perceptive
Software $280,000,000 3.3x
Lexmark Saperion $72,000,000 NA
OpenText Resonate
Knowledge $20,000,000 NA
Emerging and Niche Players
Leaders & Players of Scale
Number of Players Concentrated
but Growing
Future M&A Activity High
Importance to Major Players
Critical – Core part of IT
stack
Interest by Financial Investors Moderate
Activity Benchmarks
Sector Profile: Web Content Management
• Analytics and Personalization Key Areas of Focus: We expect the leading
WCM players to focus on personalization and analytics over the next few years as this will be a key area for M&A.
• Mobile Now A Must: Given that mobile is a “must” capability, we expect to
see significant investment and acquisition by leading WCM players in mobile, such as SDL’s acquisition of bemoko.
• Customer Experience : Because WCM is primarily about marketing, having
the key analytics necessary to understand a site/s effectiveness based on traffic behavior is critical. We expect further M&A and investment in players
incorporating analytics and personalization around web sites and web content.
• Multilingual Capabilities Are Critical: As enterprises put websites in more
and more languages and perform greater levels of customer interaction online, keeping multiple language sites synced with the base language site will require automated tools and a more integrated translation process.
Trends and Commentary
Key Transactions
Target
Acquirer
Price
Rev
Mult
Day Software Adobe 217.0 5.1Vignette Open Text 162.0 1.0
Fatwire Oracle 160.0 4.3
Number of Players Numerous
Future M&A Activity Moderate
Importance to Major Players Critical
Activity Benchmarks
Sector Profile: Language Translation and Multilingual Content
• Automated Tools Required to Keep Multilingual Content in Sync: Content
is much more dynamic than in the past due to web and cloud environments. Websites are changing constantly, causing companies to struggle with keeping multi-language content in sync with the source document.
• Machine Translation Requires Human Assistance: While machine translation
has improved, it still falls short for complex content (legal, marketing, websites, technical) where accuracy of translation is critical.
• Traditional Approaches to Translation Can’t Keep Up: Software platforms
are rapidly overtaking the slow, traditional approach for human assisted translation.
• Tech-Enabled Service Model: A human assisted approach to automating
translation involves a tech-enabled services model which strong gross margins for translation where the supply of experienced translators with domain expertise (legal, technology) is fairly limited.
Trends and Commentary
Key Transactions
Target
Acquirer
Price
Rev
Mult
SDL Alterian $107,000,000 1.9x Lionbridge CLS Comm $77,000,000 0.9x SDL Language Weaver $42,000,000 NAServices Focus
Software Focus
Number of Players Limited new
players
Future M&A Activity High
Importance to Major Players Becoming
Critical
Interest by Financial Investors Moderate
Activity Benchmarks
Sector Profile: Document Management
• Storage is Not Management: While a number of leading players (Box,
DropBox) have emerged from the crowded online storage space and currently carry lofty valuations, they will need to develop or acquire significant document management capabilities around creation, secure sharing, and collaboration.
• Incorporation of Collaboration is Critical: As document creation, storage
and sharing have moved online, collaboration has become a critical element many players now need to incorporate into their solutions.
• Vertical Solutions: Many document management players have developed
strong vertical market solutions, tailoring to the needs of the financial services, insurance, medical or government markets.
• Workflow: Solutions that are designed to manage a document online with the
natural workflow within the organization will offer superior efficiencies to users.
Trends and Commentary
Key Transactions
Target
Acquirer
Price
Rev
Mult
Box Inc. Crocodoc $13.2m NA
Nemetschek Bluebeam $96.5m NA
OpenText Informative
Graphics $39.1m 2.3x Lexmark ReadSof $264.4m 2.1x
FormPipe Traen A/S $44.5m 1.4x
Number of Players Moderate
Future M&A Activity High
Importance to Major Players High
Activity Benchmarks
Sector Profile: Enterprise Collaboration & Social Software
• Wide Range of Functionality: Collaboration and social activity in the
enterprise includes a wide variety of interactions including messaging feeds, collaboration, conferencing, file sharing & syncing, and task management. Players are incorporating different functionality to target different vertical needs.
• People vs. Document Centric: A primary distinction is whether companies
take a people centric approach to their platform (focusing on interaction among individuals) or a document centric approach (where interaction is around collaborating on a specific piece of content).
• Verticalization: Many smaller players have built vertical solutions similar to
project management platforms that offer automation and process optimization around specific workflows.
Trends and Commentary
Key Transactions
Target
Acquirer
Price
Rev
Mult
Yammer Microsoft $1.2b NA Podio Citrix $45m NA Assitly Salesforce $55m NA EventRobot VMware NA NA CubeTree SuccessFactors $49m NANumber of Players High
Future M&A Activity High
Importance to Major Players Increasing but
early
Interest by Financial Investors
Moderate – waiting maturation
Activity Benchmarks
Emerging and Niche Players
Leaders & Players of Scale
M&A Activity
The M&A market for content management has been extremely strong, as enterprises need new
solutions to manage increased content in a new, cloud based environment.
Acquirer Target Deal Amt
(Millions). Target Abstract EV/Rev EV/EBITDA
Polycom Accordent Technologies 50.0 Enterprise video management software 5.6 OpenText Corp Actuate Corporation 330.0 Business intelligence analytics software 2.5 SDL International Alterian 106.0 Web content management software 1.9
Hewlett-Packard Autonomy Corporation 11,700.0 Information retrieval software provider 11.8 25.3 Nemetschek Bluebeam Software 96.5 Editable PDF document software
Lexmark Brainware 148.0 Data capture software provider Recall Holdings Business Records Mgmt 77.0 Document management BPO services Autonomy Corporation CA, Inc. (information
governance business) 19.0 Information governance software assets
Lionbridge Technologies CLS Communication 77.0 Swiss language translation services 0.9 Oracle Compendium 15.0 Content marketing SaaS vendor 7.5
OpenText Corp Cordys Software 33.0 BPM software, SaaS & PaaS
Box Inc. Crocodoc 13.2 Document conversion software provider
M&A Activity
Acquirer Target Deal Amt. Target Abstract EV/Rev EV/EBITDA
Adobe Systems Efficient Frontier 400.0 Advertising campaign management SaaS 5.3
Top Image Systems eGistics 18.0 EDI & document management SaaS 11.8 Accel-KKR Ektron 75.0 Web content management SaaS 2.0
Oracle FatWire Software 160.0 Web content management software 4.0 OpenText Corp Global 360 260.0 BPM software provider 2.9 Logica Grupo Gesfor 33.9 Spanish systems integrator 0.5 OpenText Corp Informative Graphics 39.1 Document management software provider 2.3
Autonomy
Iron Mountain (digital archiving, eDiscovery and online backup assets)
380.0 E-discovery & backup software assets
Qumu Kulu Valley 15.0 Video presentation creation SaaS 2.7 SDL International Language Weaver 42.5 Translation software provider
Xerox Lateral Data 30.0 E-discovery software provider
Permira Funds Metalogix Software 250.0 Content management & migration software 3.8 OpenText Corp Metastorm, 182.0 Business process management software 2.4 EchoStar Move Network 45.0 Streaming video software assets
M&A Activity
Acquirer Target Deal Amt. Target Abstract EV/Rev EV/EBITDA
Miranda Technologies OmniBus Systems $4676 Video content management software 1.7 10.4 Kenexa Corp OutStart 38.9 Content management SaaS provider
Lexmark Perceptive Software 280.0 Content management software provider 3.3 IBM Corporation PSS Systems 65.0 E-discovery software provider 4.1
Accelrys QUMAS 50.0
Document compliance management software
Yahoo! RayV 70.0 Streaming video network SaaS 10.0
Lexmark ReadSof 264.4 Document management software provider 2.1 57.9 OpenText Corp Resonate Knowledge Tech 20.0
Content management customization software
Citrix Systems RightSignatur 37.5 Electronic signature SaaS 5.4 Lexmark Saperion 72.0 ECM & BPM software & SaaS
Kofax Softpro 31.2 Electronic signature software & SaaS AOL Studionow 36.5 Content management SaaS provider
FormPipe Software Traen A/S 44.4 Document management software provider 1.4 OpenText Corp weComm 20.56 Mobile application development software
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