As the strongest market ever for sellers of technology companies continued, if you were at all considering the sale of your technology company, you didn't want to miss a unique opportunity to hear from fellow founders, owners and CEOs who recently sold. During our annual Seller’s Panel, we heard from international software executives and owners like you, who successfully navigated the M&A process and sold their companies to a global array of buyers. Learn how they did it, what they learned, what surprised them—and what you could do to increase your value. Panelists include:

  • Dennis Gurock, co-founder of Gurock Software, acquired by Idera
  • Luc Pettett, Founder & CEO of, acquired by News Corp

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Bruce Milne 

Good day and thank you for joining us. I'm Bruce Milne, CEO of the Corum Group. Welcome to our Tech M&A Monthly for March 2017. We have a jam-packed agenda that takes us from Berlin to Brisbane to Barcelona with special reports, our March 2017 research report, and our annual seller's panel.

As those of you who joined us earlier this year know, we had our annual buyer's report, an hour on all the markets segments we cover, with Microsoft, SAP, and Salesforce, followed last month by our PE panel, which was led by Vista Equity, the largest buyer in the world in the last two years. Now we have our seller's panel, with two very interesting sellers, Denis Gurock of Gurock Software, which was acquired by IDERA, a TA-backed company, and Luc Pettett of Punters, who sold to News Corporation.  

But first let's begin by talking about some recent events we attended. Corum does over 150-200 events a year, but we also attend all major industry conferences, either directly or through our 500-strong World Technology Counsel advisory board. Let's hear from Dan Bernstein and the report from the RSA Security Conference in San Francisco. Dan?  

Special Report: RSA Security Conference

Dan Bernstein  

This year's RSA in San Francisco was a packed event, with over 40,000 attendees and vendors in the security space. This was a great opportunity for our client to meet prospective buyers, and we were particularly busy this year. Information security is a hot topic, with state-sponsored and high profile hacks making this both an anxious time and an opportunistic one to innovate in front. End-point security, software-defined networks and ransomware were hot topics at the conference, with AI being used on a massive scale to solve some of the world's most pressing cyber security challenges.  

Bruce Milne  

Thanks, Dan. Also in San Francisco was the GDC Conference, and on that we'll hear from Jim Perkins. Jim?  

Special Report: GDC Conference

Jim Perkins  

The annual GDC in San Francisco last week saw record attendance, especially from the overseas game industry. Highlights included major announcements and product showcasing in the areas of virtual reality, augmented reality, and data science monetization. It is clear that Asian buyers continue their aggressive search for the best of the best in mobile and PC online game studios. The Chinese government continues to carefully review the flow of funds for M&A. However, we do not expect that this will slow Chinese financial and strategic buyers from doing deals.  

Also notable was the significant increase in M&A interest from Korean strategic buyers for game companies in the US and Europe.  

Bruce Milne  

Thanks, Jim.  

At these conferences around the world we are not only often the experts giving presentations or running panels on M&A in the space, but we also use these events to meet with buyers who have done a lot of transactions at these events and will continue to do so.  

Now let's go to the HIMSS conference in the healthcare field in Orlando, Florida and hear from Dave Levine.  

Special Report: HIMSS Conference  

Dave Levine

The HIMS conference in Orlando's vibrant and hot tech areas included data security, ransomware prevention, and population health management. Focused floor space was designated specifically to showcase interoperability operation and cyber security command centers. Conversations around M&A and growth were pervasive as companies in the sector look to scale in a dynamic, yet slow-moving market that has resisted rapid change.  

Investment and M&A in this sector continues at a strong pace, as companies look to disintermediate the existing technology infrastructure and create better ways to deliver care to the always-connected patient.  

Bruce Milne  

Thanks, Dave. Now to Barcelona and the Mobile World Congress and Nina Seghatoleslami. Nina?  

Special Report: Mobile World Congress  

Nina Seghatoleslami

Yes, thank you. Last week was an exciting one for Barcelona, as 100,000 individuals from all around the globe traveled here to participate in the Mobile World Congress, which is not just about mobile phones anymore, as special attention was drawn to autonomous vehicles, drones, augmented reality, virtual reality, and there were a lot of talks about 5G.  

The biggest announcement came from Nokia, bringing back its classic 3310 handset. Let's see how that goes.  

AI also took a center stage this year with the Motorola-Amazon Alexa partnership and LG being the first non-Pixel phone to incorporate the Google assistant. Given increased M&A activity in AI, buyers from all around the world were looking for new targets in this space, and we expect continued M&A momentum for AI and machine learning in 2017.  

Overall it was a very interesting show and we look forward to next year's edition.  

Bruce Milne  

Thank you, Nina, and by the way, congratulations on being promoted to VP of Client Services. Great report.  

Now let's go to our monthly research report, with Amber Stoner and Yasmin Khodamoradi. By the way, I want you to pay attention to the number of buyers, and the number of them that you don't know as we go through this report. Amber?  

March 2017 Corum Research Report: Cross-border Deals Surge  

Amber Stoner

Thanks, Bruce. We begin with the surging public markets, which continued setting new records in February as the Dow broke 21k and other indices hit new heights too, carrying the long Bull market up to its 8th year this week, with combined market values trillions of dollars higher than just a few months ago. With interest rates likely to rise and other looming uncertainties, we advise tech execs considering exit to go through a process to at least calibrate the value of their assets while these favorable conditions hold. We’ll revisit these market factors in more detail next month for our Quarterly Report.  

Looking at our Corum Index, megadeal volume has held steady with buyers focusing on opportunities to move the needle while overall transaction numbers were lower year over year, with that megadeal momentum taking up the majority of deal flow bandwidth.  

Private equity activity remains high as PEs continue to shift toward tech-based strategic behavior, especially for those looking to enhance portfolio companies with bolt-on acquisitions.  

Cross-border transactions—which are typically stable—made up nearly half of all deals in February, up from a third a year ago. Forty percent of February’s cross-border deals had US-based companies as buyers, with a majority of the targets coming from Europe, illustrating the importance of conducting a global search as part of your M&A process.  

The Internet sector kicked off its megadeal count with online Earth-imagery delivery and analytics platform DigitalGlobe, being bought by Canadian satellite tech vendor MDA for $2.4B at 5x sales. As the geospatial segment moves deeper into value-added image analytics, we are likely to observe more consolidation in this space.  

Yasmin, what else happened in Internet?  

Internet Software Market Valuations

Yasmin Khodamoradi

Sales multiples are up after last year’s Q4 dip, with EBITDA trailing closely behind. Social networking and travel in particular, continue attracting transactions in the sector. For instance, DeviantArt, the premiere online community for designers and artists, was grabbed by Wix for $36M, combining Deviantart’s community of 40 million artists with Wix’s 98 million-strong user base of website builders to create an online exchange. This combination of ecosystems to match creators and consumers can be a driver of buyer activity across sectors. In another content driven deal, Vietnam-based online video and talent network METUB was acquired by Malaysian YouTube multi-channel network WebTVAsia to expand its footprint across Southeast Asia. Moving on to travel, AirBnB purchased Montreal-based Luxury Retreats in a bid to expand their upscale home rental offerings. They also spent a reported $50M for payments app Tilt to help them sell experiences and tap into its user-base of college students. Elsewhere in travel, Denmark’s Momondo was acquired by Priceline for $550M to bolster its flight metasearch engine, Kayak, in the Nordics. Lastly, Tourico Holidays was picked up by Spain’s Hotelbeds Group to expand its bedbank business into North America.  

How has the Horizontal sector performed?  

Horizontal Software Market Valuations

Amber Stoner

Sales multiples got back to 2016 highs, while consolidation continued in the HR and adtech subsectors.  

There were a number of e-learning deals in the HR space to start the year. Ontario-based performance management SaaS provider Halogen Software was acquired by Saba for over $207M to re-balance Saba’s employee learning platform. The acquisition is an example of two companies with highly complementary solutions combining to create a larger tech suite. Hong Kong-based employee training software developer NetDimensions was picked up by England’s Learning Technologies Group for $67.5M to expand its e-learning portfolio.  

Other HR deals included ServicePower, a UK-based mobile workforce tracking software provider, being taken private by Diversis Capital. And Silver Lining Solutions, also out of England, was nabbed by Genesys to add employee optimization tech to its omnichannel customer care resources.  

The advertising subsector has been riding a wave of consolidation as well. 

Turn, which operates a programmatic data management platform, was bought by Singtel’s digital ad division Amobee for $310M at 3x revenue. CitizenNet, an AI-driven social data and marketing platform, was picked up by Conde Nast to boost the media giant’s audience targeting capabilities. And AdEspresso, a tool for Facebook and Instagram advertising, was acquired by Canada’s HootSuite for $35M at nearly 9x revenue to expand their offerings in paid content and advertising. Digital advertising has hit rough waters lately, but AdEspresso’s 9x sales multiple is a reminder that companies delivering real value are in demand, especially in struggling sectors.  

Finally, in the SCM space, planning and scheduling analytics company Steelwedge was bought by Insight Venture portfolio company E2open to bolster its existing product suite with Sales & Operations Planning solutions.   What’s new in Consumer?  

Consumer Software Market Valuations  

Yasmin Khodamoradi

Sales valuations in Consumer have remained steady despite last year’s turmoil, while EBITDA metrics have started to pick up again.  

Just before Snap’s IPO, Tinder set its sights on Snapchat-esque startup General Specific, known for its personal video sharing app, Wheel. Swiss computer vision firm Dacuda sold its 3D division to augmented reality unicorn Magic Leap, which hopes to gain a foothold in the European tech scene and possibly improve its image capturing abilities in 3D environments. Mozilla made its first-ever acquisition, snapping up the read-it-later service Pocket to save its own spot in the niche which Apple and Facebook’s reading list features comfortably occupy. In gaming, cross-platform developer Escalation Studios was picked up by ZeniMax Media, which might want Escalation to back it up on its VR projects. Irish RPG studio Black Shamrock was purchased by Chinese game content developer Virtuos to speed up its expansion into Europe. And Spain’s Social Point, also known as the Zynga of Europe, was nabbed for $250M by NY-based console game developer Take-Two Interactive, which awoke from its nearly decade long M&A slumber, to break into the lucrative free-to-play mobile game market. This is particularly notable as Chinese buyers have dominated the market over the last few years and also serves as the largest American acquisition of a gaming company since Activision’s purchase of King in 2015.  

Amber Stoner  

Finally, earlier this week, HPE made its first billion dollar acquisition since being spun out in late 2015 and its fourth acquisition this year, paying $1.1B for flash storage company Nimble Storage. Last month we discussed HPE’s need to establish a hybrid cloud line of defense to support its hardware market; this could also be a way to strengthen its hybrid IT offerings and incorporate predictive analytics across its storage portfolio.  

Back to you Bruce.  

Bruce Milne

Thank you Amber and Yasmin. And congratulations on your recent promotion to director of valuation services.  


Sellers Panel 2017: Dennis Gurock & Luc Pettett  

That brings us to our annual seller's panel with Gurock Software and Punters. Let's go to Dennis first. Gurock is the maker of TestRail, which was bought by IDERA, which is backed by TA Associates, one of the biggest VC firms in the world. For this presentation, let's go to Jon Scott in Amsterdam. Jon?  

Jon Scott

I'm here with Dennis Gurock, the co-founder of Gurock software, based in Berlin. Dennis, it's good to chat with you. Tell us a little bit about your company and how you got started.  

Dennis Gurock  

Thanks for having me, Jon. I started the company about 10 years ago with my brother Tobias. We were still working on a few other things back then, including working on our degrees, but we always wanted to build something of our own. The company really took off, and we made our second version of TestRail a couple of years later. It was used by software teams to improve their projects. In various situations over the years we realized that TestRail was doing really well and that we had something people liked using, I think one particular situation comes to mind. That's when we launched TestRail – one company started using it very early on and they grew their usage so much that they now have more than 50 teams using TestRail across many different countries and divisions. That was when we realized that it was really popular and that we had other opportunities to grow the product and the business and the customer base.  

Jon Scott  

So you went from one team to fifty teams. Is that when you began to realize you had something special?  

Dennis Gurock  

That happened across quite a few customers and teams. There were just a few using the product and then they organically grew usage over time and that is when we realized that Gurock was doing really well and we had the opportunity to further grow the business.  

Jon Scott  

Then what got you to decide to consider selling the company?  

Dennis Gurock  

I think every founder is trying to make sure that the company, as in our case, can be as successful as possible. With TestRail's growth and various companies trying it and adopting it every month, at some point we realized that we could further grow and run the company independently if we liked, getting additional outside resources and that would allow us to grow even faster.  

I have to say that in our particular case we didn't really plan to sell the company. That was never our end goal. We were mainly focused on our customers and our product and making sure that we could keep up with growth with the small team that we had. So when we were approached about possible acquisition by interested companies, I think two years ago, we looked at functions and realized this could work really well for us, our product, and our customers, so we decided give the process a try.  

Jon Scott 

One thing, being that Corum helped with the process and you and I were directly involved, I felt you guys were really particularly well prepared, and I think it is because your internal systems and everything you managed the company with was so well refined. While you might not have been thinking about selling the company, I think that really helped quite a bit.  

Dennis Gurock  

I think specifically in that regard even though we didn't really prepare for an acquisition, I think looking back the fact that we were persistent in our area over the years prepared us for the acquisition, even if we didn't keep it in mind.  

Jon Scott  

That was clear by how you managed a company. You guys also had one of the best sets of metrics and measurements that I've seen in a company, and could explain the different elements of the business.  

So, what can you tell us about how the deal came together?  

Dennis Gurock 

As I mentioned, we weren't really seeking out any outside investors or an acquisition back then, but we were approached by a company in 2015 for the first time and decided to give the process a try and see if it would be a good fit. That first we didn't really have any experience negotiating such a deal, and we decided to look into getting help with the process, and that's when we approached Corum to help us with the M&A process. As any company that can tell you that has been through the process, the due diligence process is intense, especially after we had to run the business at the same time with our small team, so we didn't have many people who could deal with that full time. During that process we discovered that this company had a similar vision as we did, a similar operation model, and it was a great fit.  

Jon Scott  

We talked about how well prepared you seemed to be in the process, but what most surprised you about the M&A process.  

Dennis Gurock  

As I mentioned, the due diligence process was quite intense and stressful. In the end, looking back, it was suprising that the acquisition itself was pretty straight forward. Sure, there were some roadblocks and we had some things to face we hadn't prepared for, but ultimately because both sides had the same goal, it was still relatively easy to come to an agreement. While it was stressful at times, I think that having a small team and, in our particular case, a simple company structure, that helped keep things simple.  

Jon Scott  

I think that's true. Now, just as we wrap up here, what advice would you have for technology CEOs that are considering selling their companies?  

Dennis Gurock  

Back then, when we were approached, we did quite a bit of research before entering the acquisition and due diligence process, and the number one thing we found out over and over again was to get an M&A advisor who knows what they are doing, rather than just a legal advisor. I think it's important to realize that you as a company founder or CEO go through this process only once or twice in a lifetime, and you should work with someone who has more experience with it, just like your acquirer does. In our case, that was specifically critical for us with Corum as we still had to run our day-to-day business.  

Another thing I would like to add is that getting feedback from our peers has been very important for us during the process. If you are working on an acquisition for many months it is easy to lose track of your goals and it is always frustrating to change them or if you're unsure how to proceed, especially if that many lawyers are involved in general, so asking other business owners back then who were in a similar position for their feedback was very important for us. Looking back I think that every founder or CEO thinking of selling their company should try to find peers to bounce ideas off of. It's important to your decision.   

Jon Scott  

Dennis, we appreciate your time, it was good to chat with you. Let me turn it back over to Bruce.  

Bruce Milne  

Thank you Jon, and thank you Dennis, great advice for other entrepreneurs looking to sell, the importance of preparation and research, how that feeds into doing a better job in due diligence, and the stress involved in the most important transaction of your life and how to handle that.  

Now let's go halfway around the world to Luc Pettett at Punters who sold his company to Rupert Murdoch. It's the middle of the night for Luc, so he recorded this for us. You might hear waves in the background.


Luc Pettett 

Hi, I'm Luc Pettett, the founder and CEO of, Australia's largest publisher in horse racing. We have quite a popular app that's listed here in Australia for horse racing, it is called Punters and it allows a user to connect with the sport of horse racing.  

If you are unaware, horse racing in Australia is our second largest sport, and we also are the third-largest wagering market in the world. It's a large market at AUS $29B.  

We are not a bookmaker. We don't take bets, but we publish providing news and insight and the bookmakers compete heavily to advertise on our website.

Our business was founded in 2008, really just as a blog. I saw a problem in the sport, that was that people, once they left the racetrack, could not continue to connect with it, and also in the industry, which was largely responsible for marketing the sport, it wasn't doing enough, they weren't innovating in technology. I had that experience, I was a software engineer. Fortunately I could solve that problem in the early days. Little did I realize how big it would become. I'm very proud of what we've achieved.  

So, knowing that we had a very good business, why did we decide to sell the company? Those opportunities don't come along very often, and it was obvious that we needed to sell, but we didn't have an exit strategy in the first five years or so. It was finally obvious that we needed to plan for the future, we didn't want to take the business too far and not be able to take it further without an acquirer.  

There are a number of other reasons to sell a company, including personal reasons. It is good to realize your future and everyone has a certain level of funds in the bank that they would be comfortable living off. We were fortunate enough to meet Corum. I'll tell you about that, because my previous investors had both gone through a successful process, sold to ESPN, really ran a good M&A process, with their banker, based in Sydney. They also learned from that experience and brought that to the table. From the beginning, Nathan said to me we just needed to deal with an American broker. That was where a lot of successful exits occurred and there were lots of successful startups in the US, that kind of experience, combined with someone who dealt directly with technology was beneficial, but in the end what it came down to for us was knowing an Australian broker versus an American broker with a difference of just 1% in fees. While I am probably not best of getting into fees in particular, as a founder it's one of the most concerning factors in who you approach, and I have a friend who exited his business recently and in the end he didn't get the results he wanted. I asked him what went wrong and he told me he had poor advice. I asked him why he chose that particular banker, and his answer was that it was because they charged a 1.8% commission. So ultimately if someone has the experience, has the process, has the contacts, has a research team and a successful number of exits and you're only talking a small percentage figure in terms of fees, that was one of the biggest reasons we approached Corum. We were fortunate enough to cross paths with them here in Melbourne.  

We engaged with Corum a little over a year ago. We exited four months ago. It was quite a speedy process. It was very clear they knew the process. They reiterated the steps that were required from executive summary all the way to the final negotiations, and all of that was effectively how it ran for us. It was surprising, really, that we never went too far off course from their originally outlined process.  

From there, really, we went international first. For us, that was the US and Europe, giving us time to warm up those buyers. It worked. There were a few interested parties. Then we took the business domestically to Australia and it didn't take long to get a couple of interested parties, namely NewsCorp. It was quite interesting timing and it goes to show you can't plan for this in the beginning.  

NewsCorp had decided to get together a team of the top minds in news and sit down and work through a strategy. Out of that came wagering, out of that came this obvious business that they had known of and some of them had used quite regularly. So before we even engaged with them this happened, and I found this out recently, we were very fortunate in that our paper landed on a desk two weeks after they had decided strategically to move into wagering. A year before we were scratching our heads wondering if this was the right time to go to market and we didn't know, but ultimately we tried and News was very interested in us. They made that known, they do run a very good M&A process, they had a good team of nine staff based in Sydney just on M&A. You could tell they were experienced, they put forward a very fair initial offer and ultimately that came to fruition a few months later after exclusivity and a few other negotiations in between. We entered a binding agreement with them. It took a few months to satisfy a few other conditions, but we closed in December of 2016, just a few months ago, and we had final completion just a few weeks ago.  

In terms of advice, for tech CEOs who are considering this process, preparation is key. Certainly Dan helped me with that, I even had a few early calls with him prior to really important phone conversations, or 5 minutes before an exec from NewsCorp, coaching me in what I should or should not say, how I should approach it, what questions might come up, and I think that is really helpful, having someone there to be able to lean on. Corum taught me to never stop selling, and while you're going through the M&A process you don't want to get caught up in negotiations or what is going on with the lawyers, you want to stay hot on what you're doing, what your business is doing, what you're excited about.  

Thanks again, and thanks to Corum and Dan for letting me join in today. I appreciated the chance to share my insights and hopefully it helps.  

Bruce Milne  

That's great stuff, Luc, thank you.  

It is a lot of work to go through these things and its one of the reasons why we put five people on an account, to make sure that the client is not burdened by the process, because it can wear you out. And you have to go global, you absolutely have to do that to get those valuations.  

It's interesting, we did another transaction that same week with Rupert Murdoch - they're on a buying tear. Particularly good advice there on not presupposing what the buyer wants. They will always change and change again. In this case, they had just decided to enter this market, one they had previously ruled out. Also on timing, you need to pay attention to timing. Markets consolidate quickly. Right now we're at a peak, but we don't know how long it is going to last.  

We are right at our 30 minute limit, and we have a few questions we will have to deal with offline. Let me hand it off to Tim briefly to address that.  

Timothy Goddard

In fact one of the questions we got was, “How, as a seller, do you value your business? How do you figure out what price you should get?” That is obviously a very complicated topic and one that we cover at our Merge Briefings and Selling Up, Selling Out events coming up globally. We have a number of events in Europe and the US as well as one in Mexico City. We hope you can join us at one of those events. In addition to those live events, you can also ask us for our 2017 Annual Report, which is another way you can get a sense of what value you might be able to expect. As always, you're welcome to reach out to us.

Bruce Milne

Thanks, Tim. As Amber said, the bulk of transactions are international. The biggest buyers are in the US. We see a lot of international conferences here. Both of our presenters today attended our events. I will personally be in Reading, outside London, and in Paris in two weeks. We look forward to seeing some of you there. Remember, the better prepared you are, the greater your chances for an optimal outcome, so we look forward to seeing you at one of these events.  

We're at our time limit, thank you for joining us today and we'll see you next time.