Public Equity Performance: Enterprise Application Providers Continue to Outperform Broader Indices
The first nine months of 2007 picked up where 2006 left off, delivering strong returns. In the most recent quarter, however, application stocks (and the overall market) have become increasingly volatile amid credit concerns, uncertainty of monetary policy and the possibility of economic contraction… read more >>

M&A Activity: Voracious Appetite by Large Consolidators
Consolidation in the enterprise application sector continues apace as valuations and deal sizes have risen significantly even as the number of deals has fallen slightly due to a scarcity of high quality targets… read more >>

Featured Sub-Sector: Business Analytics / Business Intelligence
Organizations continue to demand applications that mine and process their critical data to yield “dashboards” of meaningful information… read more >>

Featured Trend: The Importance of Vertical Expertise
Of several trends that are occurring right now in enterprise application software, we would like to highlight one: the premium that the market is increasingly placing on vertically focused companies... read more >>

Enterprise Application Software Public Company Valuations
Relevant financial data for publicly traded enterprise application software companies... read more >>

Enterprise Application Software M&A Transactions YTD 2007
Selected enterprise application software company M&A transactions in the SaaS, business intelligence, enterprise resource planning and supply chain management sub-sectors, including deal values and multiples when disclosed... read more >>

 

The first nine months of 2007 picked up where 2006 left off, delivering strong returns. In the third quarter of 2007, however, application software stocks (and the overall market) have become increasingly volatile amid credit concerns, uncertainty of monetary policy and the possibility of economic contraction. Publicly-traded companies within the enterprise applications software sector continued to outperform broader market indices over the past twelve months. For the 12 month period ending September, 63 companies comprising Updata’s Enterprise Applications Software Index (UEASI) increased approximately 20%, slightly more than the Nasdaq and 6% and 9% more than the S&P 500 and Dow Jones Software Index, respectively.

Month Relative Stock Price Performance
UEASI - Enterprise Applications (1)	20.1%
Nasdaq Index	19.6%
Dow Jones Software Index (2)	11.2%
S&P 550 Index	14.3%

1.UEASI (Updata Enterprise Applications Software Index) consists of 63 companies and includes the following sub-sectors: Business Analytics (BA), Customer Relationship Management (CRM), Enterprise Content Management (ECM), Enterprise Resource Planning (ERP), Human Capital Management (HCM), Product Lifecycle Management (PLM) and Supply Chain Management (SCM).

2.Dow Jones Software Composite consists of 91 U.S based mid to large cap companies drawn from all across the software sector.

From our perspective, investors in applications companies continue to reward growth, recurring revenue and visibility (as demonstrated by SaaS company performances), vertical market expertise and profitability. Within the enterprise applications sector, companies in the Human Capital Management (HCM) and Enterprise Content Management (ECM) sub-sectors have led the charge, specifically Concur and Taleo in HCM and Vignette, Open Text and Document Sciences, all up over 40%, in ECM. Valuation across sub-sectors varies widely, with HCM and CRM trading at greater than 30x LTM EBITDA and Product Lifecycle Management (PLM) and Supply Chain Management (SCM) in the low teens.

The disparity in sub-sector valuations stems from any number of reasons. ECM’s superior valuation is likely due to the relative scarcity of brand-name providers and the fact that, according to Forrester Research, the market is expected to grow at 18% over the next year. For CRM, the stellar performance of salesforce.com (up 43% over the twelve months ended September 30, 2007 and trading at 8.6x 2007 revenue) drives the sub-sector. The business intelligence sector is also trading well, as industry consolidation has focused attention (and speculation) on the remaining players and as younger public market companies like Omniture have posted stellar growth. SAP’s offer to acquire Business Objects on October 7, 2007 at an 18% premium to its previous close will likely create more attention for names in the space (Cognos, Informatica, MicroStrategy, Actuate, etc.).

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Consolidation in the enterprise application sector continues apace as valuations and deal sizes have risen significantly even as the number of deals has fallen slightly due to a scarcity of high quality targets. From 2004 to the twelve months ended Q3 2007, the median EV / LTM Revenue multiple paid by acquirers increased 68% from 1.7x to 2.9x. Median transaction values have also increased from $13 to $45 million over the same period due to acquisition sprees by the largest strategic buyers and private equity buyers that are flush with capital. This jump in size and valuation is slightly offset by a small decrease in the number of annual transactions completed, as fewer “best of breed” targets remain. (Please note, however, that exact numbers of transactions are hard to quantify because there are many small transactions that are not widely or uniformly reported.

This aggressive consolidation activity by strategics, as well as going private transactions, has decreased the number of public application software companies by approximately 40%, from 103 in 2005 to 62 as of May 31, 2007.

Acquisitions are of course driven by countless factors. We would like to highlight a few factors that we believe have recently played an important role:

1. Technologies in high demand – e.g. SaaS, collaboration software and business analytics. In March 2007, Cisco announced its acquisition of WebEx, the leading provider of online collaboration services. This transaction has been the largest SaaS acquisition to date, valued at nearly $3 billion.
    
2. Large vendors seeking to enter a vertical. Customers like vertically focused applications as they tend to be functionality-rich and address unique domain concerns. Different industries can have very specific needs, and the vendors who can provide specific functionality will continue to be the preferred providers. In April 2007, Oracle announced its acquisition of Lodestar, a provider of meter data management software for the utilities industry. This acquisition allowed Oracle to continue to build its vertical expertise and challenge SAP in the vertical market.
    
3. Strategic acquirers view M&A as the preferred path to growth. As the overall software industry matures, particularly for the large cap consolidators, companies would rather use their cash for M&A, and believe it to be a superior allocation of capital versus share buy-backs or dividends.
    
4. Defensive deals. In March 2007, Oracle acquired Hyperion, a vendor that had apparently been coveted by SAP well. In response, SAP just announced its acquisition of Business Objects, one of world’s leading BI companies with 82% of Fortune 500 companies as clients and 50,000+ users worldwide. Earlier, SAP paid an undisclosed – but by all estimates robust – multiple to acquire rival BI provider OutlookSoft.

*Transactions made by SSA Global Technologies, now part of Infor.

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Organizations continue to demand applications that mine and process their critical data to yield “dashboards” of meaningful information. Business Intelligence – or, to use Updata Advisors’ preferred term, Business Analytics – is one of the more active sub-sectors in enterprise applications software. Updata sees the following trends in BI / BA:

Increased demand and growth:
The Business Analytics sector is squarely in the sights of enterprise IT managers these days. According to IDC, the sector has grown from approximately $4.6 billion in 2003 to approximately $6.4 billion in 2006, a compound annual growth rate of 12.0%. The market is projected to grow another $1.8 billion over the next three years, leading to a projected total market of $8.2 billion in 2009.

In a poll conducted by IDC published in May 2007, 65% of respondents believe that BI is a high priority and critical to their company over the next year, while an additional 12% believe BI will become critical over a span of three to five years.

Innovation – capability and delivery advancements:
Organizations are moving past simple query and reporting tools and looking to BA to provide forecasting and optimization. BA tools are increasingly beginning to provide predictive analytics. As opposed to looking in the “rear view mirror,” enterprises now seek to anticipate future needs, better allocate resources and quickly spot trends affecting their businesses. The ultimate goal of these “analytical applications” is to improve business processes and make better decisions based on “real time” data.

Further, Software as a Service (SaaS) is beginning to make inroads into Business Analytics. Business Objects made a high profile announcement on September 17, 2007, that it plans to offer its core application suite on-demand to its 50,000+ customer base. The Company also announced that it has partnered with salesforce.com to deliver and share BI reports via AppExchange, allowing users the opportunity to gain greater insight into sales and CRM data. In addition to BOBJ, early stage pure play BA companies such as LucidEra, LogiXML and Host Analytics offer their solution through an on-demand delivery model as well. Of note, LucidEra announced in late June that its solution was going to be available through salesforce.com’s AppExchange, three months earlier than Business Objects’ similar news.

Consolidation:
The BA sector is consolidating briskly, as was recently reaffirmed by SAP’s announced acquisition of Business Objects. SAP’s offer to buy BOBJ is the largest deal to date in the space, with a value of $6.8 million, or 4.0x LTM revenue. SAP CEO Henning Kagermann said “Customers have demanded an integrated, end-to-end business process landscape.” Business Objects’ solution will be more closely aligned with SAP’s going forward, but will also continue to be offered on a stand-alone basis. This is SAP’s second BA acquisition this year, after acquiring Outlooksoft which itself had been viewed a response to Oracle’s Hyperion acquisition.

SAP/Business Objects combined will have approximately 17% of the BA market; leader Oracle/Hyperion now controls approximately 26%. Pure play provider Cognos has 8%, followed by Infor with 6% and SAS with 5%; the top 5 companies account for 63%. 37% of the market share is still fragmented and available for strategic consolidation.

Infor, the fourth largest BA provider and third largest ERP vendor, has demonstrated its focus and commitment to BA with new products and experienced management. Infor has added a new workforce analytics module to its WMS application that allows companies to plan and predict warehouse demand. Jon Pilkington, Infor's new performance management group head recently hired from Cognos, is clearly determined to expand Infor’s BA solutions that it acquired through Extensity and Systems Union Group.

The table below contains YTD 2007 transactions in the BA space.

Selected Business Analytics Precedent Transactions

($ in millions)

Announce Date	Seller	Buyer	EV	EV/ Rev	EV/ EBITDA
Oct-07	Business Objects	SAP AG	$ 5,582.0	4.0x	22.7x
Sep-07	Longview Solutions	Exact Software NV	$ 51.5	1.8x	7.9x
Sep-07	Offermatica	Omniture, Inc	$ 65.0	7.2x	NA
Sep-07	FUZZY! Informatik	Business Objects	NA	NA	NA
Sep-07	Applix, Inc	Cognos	$ 306.0	5.0x	35.5x
Jun-07	Applied Financial Technology	Fidelity National Information Services, Inc	NA	NA	NA
May-07	Inxight Software, Inc	Business Objects SA	$ 75.0	3.0x	NA
May-07	OutlookSoft Corporation (1)	SAP AG	$ 490.0	8.9x	NA
May-07	Spotfire Inc.	TIBCO Software Inc	$ 195.0	4.3x	NA
Apr-07	Cartesis S.A.	Business Objects	$ 300.0	2.4x	NA
Mar-07	Hyperion Solutions Corporation	Oracle Corporation	$ 2,805.0	3.4x	20.5x
Mar-07	Sharp Analytics	iCrossing Inc	NA	NA	NA
Feb-07	Intelligent Results	First Data Corp	NA	NA	NA
Feb-07	Touch Clarity	Omniture, Inc	$ 57.0	NA	NA
Feb-07	Pilot Software	SAP AG	NA	NA	NA
Jan-07	Decisioneering	Hyperion Solutions Corp	NA	NA	NA
Jan-07	Instadia	Omniture Inc	NA	NA	NA
Jan-07	Celequest Inc	Cognos Inc	$ 11.0	2.8x	NA
			Mean:	4.3x	21.7x
			Median:	3.7x	21.6x

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“You’re always struggling if you’re #2 in a vertical.” – Andrew Griffith, Head of M&A, Sage Software

Of several trends that are occurring right now in enterprise application software, we would like to highlight one: the premium that the market is increasingly placing on vertically focused companies. Vertically focused software plays are receiving greater attention as the market values companies that “own a domain” at a premium. Some examples of public applications companies that are focused on a particular industry are:

• AspenTech in process manufacturing
• Advent Software in financial services
• Blackbaud in non-profits
• Blackboard in education
• DealerTrack in automotive
• Retalix in grocery and convenience stores
• Trizetto Group in healthcare

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Relevant financial data for publicly traded enterprise application software companies.

Business Analytics
($ in millions)

	Market Value				Financial Data				Enterprise Value /
Ticker	Price 9/28/07	% of 52 Week High	Mkt Value of Equity	Enterprise Value	LTM Revenue	MRQ Rev. Growth YoY	LTM Gross Margin	LTM EBITDA Margin	Revenues		EBITDA		LT EPS Growth	P/E/G Ratio CY 2008P
									LTM	CY 2007E	LTM	CY 2007E
ACTU	$6.45	89.0%	$479.4	$408.8	$133.7	9.6%	79.2%	12.5%	3.1x	2.9x	24.4x	14.0x	20.0%	0.9x
BOBJ	$44.87	95.5%	$4,867.7	$4,553.0	$1,378.6	23.3%	76.2%	16.0%	3.3x	3.0x	20.7x	15.4x	14.8%	1.4x
CHRD	$13.86	83.8%	$549.1	$475.7	$114.1	36.0%	71.4%	NM	4.2x	3.6x	NM	26.8x	22.5%	0.9x
COGN	$41.53	91.7%	$4,007.5	$3,353.5	$998.9	9.0%	78.2%	15.5%	3.4x	3.1x	21.6x	15.5x	14.2%	1.3x
DMAN	$13.65	99.8%	$467.8	$394.4	$50.9	40.5%	66.3%	NM	7.7x	6.8x	NM	NM	22.5%	4.7x
FIC	$36.11	84.0%	$2,108.0	$2,336.4	$822.3	-0.7%	64.9%	25.9%	2.8x	2.8x	11.0x	11.3x	12.3%	1.6x
INFA	$15.70	98.0%	$1,622.4	$1,411.2	$352.1	16.6%	79.6%	14.5%	4.0x	3.7x	27.6x	23.7x	18.2%	1.2x
MSTR	$79.34	59.6%	$1,046.6	$970.4	$327.5	14.4%	83.3%	29.2%	3.0x	2.8x	10.1x	10.8x	16.6%	0.9x
OMTR	$30.32	96.5%	$2,002.9	$1,917.2	$107.1	77.9%	61.7%	6.3%	17.9x	13.6x	NM	93.5x	40.6%	2.2x
OTEX	$25.97	95.7%	$1,503.8	$1,731.6	$595.7	66.5%	66.2%	23.2%	2.9x	2.7x	12.5x	11.0x	10.0%	1.5x
PRO	$12.07	82.2%	$294.4	$242.1	$53.5	36.9%	67.8%	17.3%	4.5x	4.0x	24.1x	22.3x	NA	NA
SPSS	$41.14	85.9%	$840.2	$711.8	$274.9	8.6%	93.4%	21.9%	2.6x	2.4x	11.8x	11.8x	15.9%	1.4x
VSCN	$14.44	72.7%	$318.4	$310.5	$75.8	28.9%	72.5%	5.5%	4.1x	3.8x	NM	18.2x	30.5%	0.7x
Mean		88.5%				28.2%	74.0%	17.1%	3.8x	3.5x	18.2x	16.5x	19.8%	1.3x
Median		90.3%				20.0%	73.8%	16.0%	3.4x	3.1x	20.7x	15.5x	17.4%	1.4x

Customer Relationship Management
($ in millions)

	Market Value				Financial Data				Enterprise Value /
Ticker	Price 9/28/07	% of 52 Week High	Mkt Value of Equity	Enterprise Value	LTM Revenue	MRQ Rev. Growth  YoY	LTM Gross Margin	LTM EBITDA Margin	Revenues		EBITDA		LT EPS Growth	P/E/G Ratio CY 2008P
									LTM	CY 2007E	LTM	CY 2007E
ARTG	$3.02	88.8%	$416.1	$375.0	$115.9	29.3%	63.5%	2.2%	3.2x	2.9x	58.5x	42.4x	22.5%	1.3x
BVSN	$2.20	48.1%	$268.5	$222.4	$52.6	4.2%	81.8%	38.3%	4.2x	NA	NM	NA	NA	NA
FPTI	$4.00	30.8%	$30.3	$27.8	$4.5	-49.8%	52.2%	NM	NM	NA	5.7x	NA	NA	NA
IMNY	$2.88	100.0%	$157.0	$142.2	$30.3	9.6%	40.6%	NM	4.7x	3.7x	NM	NM	30.0%	1.9x
KANA	$3.13	83.0%	$112.7	$107.4	$55.5	14.3%	75.6%	NM	1.9x	1.8x	NM	NM	25.0%	1.5x
RNOW	$16.09	87.5%	$561.3	$474.6	$111.0	-1.6%	67.1%	NM	4.3x	4.4x	NM	NM	28.6%	NM
CRM	$51.32	99.2%	$6,458.6	$6,150.7	$613.3	49.5%	76.2%	8.7%	10.0x	8.6x	NM	70.8x	45.0%	4.5x
UNCA	$11.23	62.5%	$252.2	$200.7	$97.0	6.1%	78.4%	3.5%	2.1x	1.9x	58.5x	22.2x	27.0%	1.0x
VOCS	$29.24	95.8%	$608.6	$553.3	$49.6	53.2%	80.5%	9.1%	11.2x	9.8x	NM	57.9x	24.4%	2.3x
Mean		66.9%				-1.7%	59.5%	12.4%	4.4x	4.7x	58.5x	48.3x	28.9%	1.6x
Median		68.5%				6.9%	57.8%	8.7%	4.2x	3.7x	58.5x	50.1x	27.0%	1.7x

Enterprise Resource Planning
($ in millions)

	Market Value				Financial Data				Enterprise Value /
Ticker	Price 9/28/07	% of 52 Week High	Mkt Value of Equity	Enterprise Value	LTM Revenue	MRQ Rev. Growth  YoY	LTM Gross Margin	LTM EBITDA Margin	Revenues		EBITDA		LT EPS Growth	P/E/G Ratio CY 2008P
									LTM	CY 2007E	LTM	CY 2007E
CHINA	$7.33	64.0%	$979.1	$733.2	$308.8	42.9%	53.7%	9.6%	2.4x	1.8x	19.5x	19.1x	22.0%	0.7x
BAS1V-FI	$12.95	92.5%	$209.5	$199.8	$84.6	25.9%	96.0%	15.3%	2.4x	2.0x	7.1x	12.0x	NA	NA
EPIC	$13.77	88.4%	$788.3	$824.0	$407.1	6.2%	51.2%	15.2%	2.0x	1.9x	24.8x	NA	15.5%	0.9x
INTU	$30.30	84.2%	$11,320.5	$11,014.6	$2,712.4	26.2%	80.5%	27.7%	4.1x	3.9x	14.7x	12.2x	15.6%	1.2x
LWSN	$10.01	93.2%	$1,809.0	$1,580.6	$750.4	68.8%	46.8%	4.8%	2.1x	2.0x	43.9x	14.2x	15.0%	1.5x
ORCL	$21.65	97.7%	$115,862.1	$116,435.1	$17,996.0	20.2%	76.7%	40.9%	6.5x	5.8x	15.8x	13.2x	14.2%	1.2x
QADI	$8.66	84.8%	$305.7	$276.3	$244.7	10.0%	58.9%	5.4%	1.1x	1.1x	20.9x	11.8x	16.5%	1.4x
SGE-GB	$2.49	89.2%	$6,576.6	$6,417.0	$2,877.2	146.3%	92.4%	11.8%	2.2x	2.6x	62.0x	10.1x	NA	NA
SAP	$58.67	99.4%	$71,730.8	$67,935.7	$13,684.7	17.6%	68.0%	30.2%	5.0x	4.8x	16.4x	16.3x	14.2%	1.7x
SBN	$1.90	81.2%	$78.5	$115.9	$89.1	46.5%	58.9%	3.0%	1.3x	1.2x	47.2x	11.3x	17.5%	NA
Mean		87.5%				41.1%	68.3%	16.4%	2.5x	2.4x	29.5x	13.4x	16.3%	1.2x
Median		88.8%				26.0%	63.5%	13.5%	2.3x	2.0x	20.2x	12.2x	15.5%	1.2x

Product Lifecycle Management
($ in millions)

	Market Value				Financial Data				Enterprise Value /
Ticker	Price 9/28/07	% of 52 Week High	Mkt Value of Equity	Enterprise Value	LTM Revenue	MRQ Rev. Growth  YoY	LTM Gross Margin	LTM EBITDA Margin	Revenues		EBITDA		LT EPS Growth	P/E/G Ratio CY 2008P
									LTM	CY 2007E	LTM	CY 2007E
ANST	$32.82	93.3%	$872.7	$834.6	$91.7	14.9%	97.7%	37.5%	9.1x	8.6x	24.2x	NA	23.0%	1.3x
ANSS	$37.54	98.4%	$2,982.3	$2,942.8	$335.4	48.1%	77.9%	38.2%	8.8x	7.9x	23.0x	NA	18.0%	1.5x
ADSK	$50.80	99.0%	$12,286.1	$11,892.5	$1,988.7	17.0%	89.2%	24.5%	6.0x	5.6x	24.4x	NA	16.7%	1.4x
CIMT	$2.59	54.8%	$20.8	$12.6	$21.9	9.3%	84.3%	1.6%	0.6x	NA	35.2x	NA	NA	NA
DASTY	$67.72	98.2%	$8,073.0	$7,619.7	$1,595.8	17.1%	83.1%	20.4%	4.8x	4.4x	23.4x	15.2x	10.0%	2.4x
DLC-GB	$3.42	75.2%	$95.5	$46.1	$110.5	21.0%	65.2%	11.8%	0.4x	0.4x	3.5x	3.7x	NA	NA
MFLO	$17.97	73.5%	$228.7	$163.5	$64.8	-9.7%	80.7%	12.8%	2.5x	NA	19.6x	NA	NA	NA
MSCS	$14.29	89.3%	$640.2	$517.9	$242.8	-10.6%	80.7%	3.4%	2.1x	2.1x	62.5x	NM	10.0%	5.4x
PMTC	$19.00	87.1%	$2,219.3	$1,959.4	$923.4	5.3%	68.5%	14.4%	2.1x	2.1x	14.7x	11.0x	6.1%	2.8x
Mean		85.4%				12.5%	80.8%	18.3%	5.1x	5.1x	28.4x	10.0x	14.0%	2.5x
Median		89.3%				14.9%	80.7%	14.4%	2.5x	4.4x	23.4x	11.0x	13.4%	1.9x

Supply Chain Management
($ in millions)

	Market Value				Financial Data				Enterprise Value /
Ticker	Price 9/28/07	% of 52 Week High	Mkt Value of Equity	Enterprise Value	LTM Revenue	MRQ Rev. Growth  YoY	LTM Gross Margin	LTM EBITDA Margin	Revenues		EBITDA		LT EPS Growth	P/E/G Ratio CY 2008P
									LTM	CY 2007E	LTM	CY 2007E
ARBA	$10.78	96.4%	$888.1	$743.2	$298.6	2.6%	43.8%	NM	2.5x	2.4x	NM	27.9x	15.0%	1.5x
AZPN	$14.32	90.2%	$1,421.8	$1,321.3	$320.7	4.1%	70.4%	20.9%	4.1x	3.7x	19.7x	14.2x	16.6%	1.0x
DSGX	$4.73	99.4%	$230.0	$186.5	$53.6	13.7%	66.5%	20.0%	3.5x	3.2x	17.4x	14.2x	15.0%	1.2x
GSOL	$22.17	89.3%	$964.1	$790.6	$169.1	17.2%	41.5%	16.1%	4.7x	4.3x	29.0x	23.5x	22.5%	1.1x
ITWH	$15.25	55.5%	$ 447.7	$522.7	$281.5	0.5%	58.7%	13.2%	1.9x	2.0x	14.2x	NA	10.0%	1.7x
JDAS	$20.66	87.4%	$782.3	$873.0	$359.3	75.3%	59.8%	20.3%	2.4x	2.4x	12.0x	10.8x	17.9%	0.9x
KWL.L	$1.16	87.9%	$144.8	$134.5	$78.7	NA	90.8%	13.0%	1.7x	1.3x	13.2x	9.4x	NA	NA
LGTY	$11.75	88.7%	$189.4	$157.1	$43.8	27.6%	67.1%	28.9%	3.6x	3.2x	12.4x	NA	NA	NA
MANH	$27.41	86.7%	$827.8	$748.1	$316.0	15.1%	57.3%	17.6%	2.4x	2.2x	13.4x	12.1x	14.7%	1.4x
VERT	$5.08	56.6%	$9.6	$14.7	$14.9	-18.4%	51.4%	NM	1.0x	NA	NM	NA	NA	NA
Mean		86.8%				19.5%	61.8%	18.7%	2.8x	2.8x	16.4x	16.0x	16.0%	1.3x
Median		88.7%				14.4%	59.8%	18.8%	2.5x	2.4x	13.8x	14.2x	15.0%	1.2x

Software-as-a-Service (SaaS)
($ in millions)

	Market Value				Financial Data				Enterprise Value /
Ticker	Price 9/28/07	% of 52 Week Hi	Mkt Value of Equity	Enterprise Value	LTM Revenue	MRQ Rev Growth YoY	LTM Gross Margin	LTM EBITDA Margin	Revenues		EBITDA		LT EPS Growth	P/E/G Ratio CY 2008P
									LTM	CY 2007E	LTM	CY 2007E
BLKB	$25.99	93.0%	$1,172.8	$1,171.4	$218.6	30.8%	67.0%	24.9%	5.4x	4.6x	21.5x	18.4x	13.0%	1.9x
BBBB	$46.76	97.7%	$1,416.9	$1,407.9	$216.5	36.3%	71.6%	17.3%	6.5x	5.9x	37.6x	23.6x	25.0%	1.7x
CNQR	$34.81	98.2%	$1,380.3	$1,366.5	$120.9	23.8%	64.9%	19.4%	11.3x	9.5x	58.3x	45.0x	23.1%	3.0x
TRAK	$49.09	100.0%	$1,913.7	$1,827.0	$202.2	34.8%	58.5%	27.7%	9.0x	7.8x	32.6x	26.7x	23.0%	1.5x
DMAN	$16.59	89.4%	$467.8	$394.4	$50.9	40.5%	66.3%	NM	7.7x	6.8x	NM	NM	22.5%	4.7x
HIRE	$10.99	72.5%	$95.3	$110.3	$64.1	21.0%	46.4%	14.5%	1.7x	1.6x	12.7x	11.4x	21.8%	0.7x
KNXA	$33.48	78.9%	$856.8	$748.7	$151.8	82.8%	71.9%	20.7%	4.9x	3.9x	23.8x	16.3x	24.4%	0.9x
LPSN	$6.40	80.7%	$316.8	$290.3	$41.9	57.2%	75.1%	11.3%	6.9x	5.6x	61.5x	27.8x	31.0%	1.6x
OMTR	$33.25	90.6%	$2,002.9	$1,917.2	$107.1	77.9%	61.7%	6.3%	17.9x	13.6x	NM	NM	40.6%	2.2x
RHT	$21.39	84.7%	$4,554.3	$4,286.9	$435.5	41.5%	84.0%	18.7%	9.8x	8.6x	52.7x	31.1x	22.8%	1.1x
RNOW	$17.02	92.6%	$561.3	$474.6	$111.0	-1.6%	67.1%	NM	4.3x	4.4x	NM	NM	28.6%	NM
SLRY	$15.90	98.5%	$219.2	$179.2	$25.4	41.8%	77.6%	NM	7.1x	5.7x	NM	NA	23.3%	NM
CRM	$57.06	99.2%	$6,458.6	$6,150.7	$613.3	49.5%	76.2%	8.7%	10.0x	8.6x	NM	NM	45.0%	4.5x
TLEO	$27.64	96.2%	$730.8	$661.9	$111.1	31.9%	68.4%	4.6%	6.0x	5.3x	NM	44.4x	27.9%	1.6x
TZIX	$17.29	78.8%	$1,109.4	$1,333.0	$403.2	30.9%	50.3%	12.4%	3.3x	2.9x	26.6x	13.7x	23.5%	1.1x
ULTI	$33.94	92.7%	$891.9	$876.1	$133.3	23.4%	56.4%	8.6%	6.6x	5.8x	76.5x	34.5x	23.9%	1.9x
VSCN	$17.06	85.9%	$318.4	$310.5	$75.8	28.9%	72.5%	5.5%	4.1x	3.8x	NM	18.2x	30.5%	0.7x
VOCS	$31.92	96.1%	$608.6	$553.3	$49.6	53.2%	80.5%	9.1%	11.2x	9.8x	NM	57.9x	24.4%	2.3x
WBSN	$20.24	71.6%	$975.9	$947.4	$193.6	14.3%	90.6%	14.4%	4.9x	4.3x	28.9x	15.3x	14.7%	1.3x
Mean		89.1%				38.2%	68.9%	14.0%	7.6x	6.5x	35.6x	27.4x	25.7%	1.9x
Median		91.6%				35.5%	70.0%	13.4%	6.6x	5.7x	32.6x	25.2x	23.9%	1.6x

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Selected enterprise application software company M&A transactions, including deal values and multiples.

 
($ in millions)

Announce Date	Seller	Buyer	EV	EV/Rev	EV/EBITDA
Sep-07	Hawthorne Benefit Technologies Inc	Paychex, Inc.	NA	NA	NA
Sep-07	iEmployee	Asure Software	$10.7	1.8x	NA
Sep-07	Advectis, Inc	Xerox Corporation	32.0	4.4x	NA
Aug-07	PlassoTech	Autodesk, Inc.	NA	NA	NA
Aug-07	Mobisoft Oy	Digital Dispatch Systems Inc.	7.7	NA	NA
Aug-07	Decision Management International Inc	Emerson Process Management	NA	NA	NA
Aug-07	Skymatter Limited	Autodesk, Inc.	NA	NA	NA
Aug-07	Prize Corporation/ReckonUp	Logix Microsystems Ltd	4.0	NA	NA
Jul-07	ITG Competency Group, LLC	Salary.com, Inc.	2.0	NA	NA
Jul-07	Gelco Information Network, Inc	Concur Technologies, Inc	170.0	2.8x	14.9x
Jul-07	Prairie Voice Services, Inc.	CSG Systems International, Inc.	39.0	NA	NA
Jul-07	Recruiter Norge AS	StepStone	1.7	NA	NA
Jul-07	Xhive	EMC Corporation	NA	NA	NA
Jun-07	Immediacy Limited	Mediasurface plc	11.2	1.6x	NA
Jun-07	Zorch, Inc	First Consulting Group	2.0	NA	NA
Jun-07	Opticore	Autodesk, Inc.	NA	NA	NA
Jun-07	WisdomNet	Watson Wyatt Worldwide	NA	NA	NA
Jun-07	Captor	Kronos Incorporated	NA	NA	NA
Jun-07	Accord Human Resources	Virgo Capital	NA	NA	NA
Jun-07	Alignent Software Inc	Sopheon plc	4.8	1.6x	NA
Jun-07	StraightSource	Kenexa Corporation	NA	NA	NA
May-07	RMI	Carlyle Group	NA	NA	NA
May-07	NavisWorks	Autodesk, Inc.	25.0	NA	NA
May-07	Silk Systems Inc	Activant Solutions Inc	NA	NA	NA
May-07	NC Graphics Ltd	PTC	NA	NA	NA
May-07	Agile Software Corp	Oracle Corporation	330.6	2.5x	NM
May-07	ICR Limited, L.C	Salary.com, Inc.	10.0	NA	NA
May-07	Hansen Information Technologies	Infor Global Solutions	NA	NA	NA
May-07	Wicom Communications	SAP AG	NA	NA	NA
May-07	TDV GmbH	Bentley Systems	NA	NA	NA
May-07	Snowdrop Systems Limited	Sage Group plc	34.0	2.3x	15.5x
May-07	Vtrenz	Silverpop	NA	NA	NA
May-07	Agile Software	Oracle	330.6	2.5x	NM
May-07	CIMNET	Invensys, PLC	22.1	4.2x	32.7x
May-07	Marketing Solutions, Inc	Fidelity National Information Services, Inc	NA	NA	NA
May-07	Blue Agave Software, Inc	i2 Technologies, Inc.	NA	NA	NA
Apr-07	ICEM	Dassault Systèmes	70.0	NA	NA
Apr-07	Tridion BV	SDL International	72.0	2.5x	NA
Apr-07	Saratoga Systems	CDC Software	NA	NA	NA
Apr-07	Mobius Management Systems, Inc	Allen Systems Group	150.0	1.6x	55.8x
Apr-07	GISquadrat AG	Intergraph Corporation	NA	NA	NA
Apr-07	PulseOne Solutions Group	Scancode Systems Inc	NA	NA	NA
Apr-07	Workbrain Corp.	Infor Global Solutions	153.7	1.6x	NM
Mar-07	Koral	Salesforce.com	NA	NA	NA
Mar-07	Kronos Incorporated	Hellman & Friedman Capital	1,760.0	2.9x	26.6x
Mar-07	Econometrix Inc	COMSYS IT Partners Inc	6.0	NA	NA
Mar-07	MapInfo Corporation	Pitney Bowes Inc.	422.0	2.5x	20.2x
Mar-07	CrossBorder Solutions	Thomson Corporation	NA	NA	NA
Mar-07	SevenThree	Maxima Holdings Plc	NA	NA	NA
Mar-07	Ocean Tariff Bureau and Blue Pacific	Descartes Systems Group	1.0	NA	NA
Mar-07	Momentum Systems, Inc	Open Text Corporation	4.0	NA	NA
Feb-07	BeVocal	Nuance Communications, Inc.	140.0	5.4x	NA
Feb-07	Nuvosoft Inc	Plateau Systems	NA	NA	NA
Feb-07	Graphical Data Capture, Ltd	MapInfo Corporation	9.8	NA	NA
Feb-07	Respond Group, Ltd.	CDC Software	NA	NA	NA
Feb-07	IPACS e-Solutions Group	Kewill Systems, plc.	3.6	NA	NA
Feb-07	INPHO GmbH	Trimble	NA	NA	NA
Feb-07	LogicTools	ILOG	15.0	NA	NA
Feb-07	Witness Systems, Inc	Verint Systems Inc.	950.0	4.6x	32.5x
Feb-07	LeadROI, Inc	Root Markets Inc	NA	NA	NA
Feb-07	CambridgeDocs	Document Sciences Corporation	NA	NA	NA
Jan-07	KIWI Software	Bentley Systems	NA	NA	NA
Jan-07	UGS	Siemens	3,500.0	2.9x	11.7x
Jan-07	Mincom Limited	Francisco Partners	250.0	NA	NA
Jan-07	GetActive Software, Inc	Convio, Inc	NA	NA	NA
			Mean:	2.8x	26.2x
			Median:	2.5x	23.4x

*Includes Customer Relationship Management, Human Capital, Management, Enterprise Resource Planning, Enterprise Content Management, Product Lifecycle Management and Supply Chain Management.

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For more information, contact:

Greg Ager: gager@updata.com
Chase Sanders: csanders@updata.com
Carlos Sava: csava@updata.com


Updata Advisors, Inc. Disclaimer
The information and opinions in this report were prepared by Updata Capital, Inc. ("Updata"). The information herein is believed by Updata to be reliable and has been obtained from and based upon public sources believed to be reliable, but Updata makes no representation as to the accuracy or completeness of such information. Updata may provide, may have provided or may seek to provide M&A advisory services to one or more companies mentioned herein. In addition, employees of Updata may have purchased or may purchase securities in one or more companies mentioned in this report. Opinions, estimates and analyses in this report constitute the current judgment of the author as of the date of this report. They do not necessarily reflect the opinions of Updata and are subject to change without notice. Updata has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, estimate, forecast or analysis set forth herein, changes or subsequently becomes inaccurate. This report is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy in any jurisdiction.

Data cited herein is sourced from Updata’s database and derived from publicly available sources – additional information is available on request.