Sectorwatch Salesforce Partners - July 2018
Sectorwatch Salesforce Partners - July 2018
Salesforce Partners
July 2018
Salesforce Partners
July 2018
Sector Dashboard [4]
Appendix [14]
7 Mile Advisors appreciates the opportunity to present this confidential information to the Company. This document is meant to be delivered only in
conjunction with a verbal presentation, and is not authorized for distribution. Please see the Confidentiality Notice & Disclaimer at the end of the document. All
data cited in this document was believed to be accurate at the time of authorship and came from publicly available sources. Neither 7 Mile Advisors nor 7M
Securities make warranties or representations as to the accuracy or completeness of third-party data contained herein. This document should be treated as
confidential and for the use of the intended recipient only. Please notify 7 Mile Advisors if it was distributed in error. 2
Overview
7MA provides Investment Banking & Advisory Services to the Business Services and Technology
Industries globally. We advise on M&A and private capital transactions, and provide market assessments
and benchmarking. As a close knit team with a long history together and a laser focus on our target
markets, we help our clients sell their companies, raise capital, grow through acquisitions, and evaluate
new markets. We publish our sectorwatch, a review of M&A and operational trends in the industries we
focus.
3
Dashboard
Operating Metrics
Revenue Growth Momentum
1 - year revenue growth compared to revenue growth
0.005 average for last 3 years
Median LTM GP Margin % 34.7%
Current revenue growth rate exceeds the average of the last 3 years by this
amount, indicating that market momentum is increasing
Median LTM EBITDA Margin % 20.8%
4
Public Basket
Rev TEV /
LTM Rev Growth EBITDA TEV / EBITDA Rev /
Company TEV $m $m YoY GP % % Rev X X # FTEs FTE $k
Perficient, Inc. 1,005 483 5% 35% 12% 2.1 18.0 3,024 160
HCL Technologies Limited 18,369 7,838 12% 34% 23% 2.5 10.9 120,081 65
Capgemini SE 24,468 15,360 2% 26% 13% 1.6 12.9 199,698 77
Infosys Limited 38,812 11,119 7% 35% 27% 3.5 13.1 204,107 54
Cognizant Technology Solutions Corporation 43,817 15,176 10% 38% 21% 2.9 13.9 260,000 58
Accenture plc 104,155 38,574 13% 31% 16% 2.7 16.6 425,000 91
Tata Consultancy Services Limited 105,545 18,660 8% 44% 27% 5.7 21.2 394,998 47
International Business Machines Corporation 167,679 80,056 1% 46% 21% 2.1 10.1 366,600 218
5
0x
2x
4x
6x
8x
10x
12x
14x
16x
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
TEV/EBITDA - Median
TEV/EBITDA - Average
Jan-16
2.5x
Apr-16
12.4x
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
TEV/Revenue - Median
TEV/Revenue - Average
Jan-18
Apr-18
Jul-18
0x
5x
10x
15x
0.0x
0.5x
1.0x
1.5x
2.5x
3.0x
2.0x
Oct-13 Oct-13
Jan-14 Jan-14
Apr-14 Apr-14
Jul-14 Jul-14
Oct-14 Oct-14
Jan-15 Jan-15
Apr-15 Apr-15
Jul-15 Jul-15
TEV/EBITDA - Median
TEV/Revenue - Median
Oct-15 Oct-15
Public Basket Valuation Trends
Jan-16 Jan-16
Apr-16 Apr-16
Jul-16 Jul-16
Oct-16 Oct-16
Jan-17 Jan-17
Apr-17 Apr-17
Jul-17 Jul-17
Oct-17 Oct-17
Jan-18 Jan-18
TEV/EBITDA - Average
TEV/Revenue - Average
Apr-18 Apr-18
Public EBITDA Multiples over Time
Jul-18 Jul-18
Public Revenue Multiples over Time
6
Operational Metrics
LTM Gross Profit Margin % LTM EBITDA %
International Business Machines
Corporation Infosys Limited
Cognizant Technology
Infosys Limited
Solutions Corporation
International Business
Perficient, Inc.
Machines Corporation
Median Median
7
Operational Metrics
LTM Revenue per
LTM Revenue Growth %
Full Time Employee x 000’s
International Business Machines
Accenture plc Corporation
Median Median
8
Operational Metrics
Average Days
Accounts Receivable Turnover
Sales Outstanding
International Business Tata Consultancy
Machines Corporation Services Limited
Cognizant Technology
HCL Technologies Limited
Solutions Corporation
Median Median
0x 2x 4x 6x 8x 10x 0 20 40 60 80 100
9
Valuation
TEV / LTM Revenue TEV / LTM EBITDA
Cognizant Technology
Accenture plc
Solutions Corporation
Cognizant Technology
Accenture plc
Solutions Corporation
HCL Technologies
Infosys Limited
Limited
International Business
Capgemini SE
Machines Corporation
HCL Technologies
Perficient, Inc.
Limited
International Business
Capgemini SE
Machines Corporation
Median Median
10
Valuation
TEV / LTM EBIT Price / LTM Earnings
Tata Consultancy
Services Limited Cognizant Technology
Solutions Corporation
Accenture plc
Tata Consultancy
Services Limited
Cognizant Technology
Solutions Corporation
Accenture plc
Capgemini SE
Capgemini SE
Infosys Limited
International Business
International Business Machines Corporation
Machines Corporation
Median Median
11
Valuation
Historical Valuation Multiples Historical Valuation Multiples
versus Gross Profit versus Revenue Growth Rate
15% 0.8%
4.9% 4%
5x 10% 5x
EBITDA(x)
EBITDA(x)
LTM GP%
LTM RGR%
2%
5% 2.0%
10x 11x 13x 13x 14x 17x 18x 21x 10x 11x 13x 13x 14x 17x 18x 21x
0x 0% 0x 0%
12
Recent Transactions Total
Transaction Target TEV / TEV /
Date Target Buyer / Investor Value Revenue Revenue EBITDA
13
Salesforce Partners
July 2018
APPENDIX:
Public Basket
Constituents
7 Mile Advisors appreciates the opportunity to present this confidential information to the Company. This document is meant to be delivered only in
conjunction with a verbal presentation, and is not authorized for distribution. Please see the Confidentiality Notice & Disclaimer at the end of the document. All
data cited in this document was believed to be accurate at the time of authorship and came from publicly available sources. Neither 7 Mile Advisors nor 7M
Securities make warranties or representations as to the accuracy or completeness of third-party data contained herein. This document should be treated as
confidential and for the use of the intended recipient only. Please notify 7 Mile Advisors if it was distributed in error. 14
Revenue Multiples - Perficient, Inc.
Public Basket 3x
2x
1x
Perficient, Inc. 0x
20x
15
Revenue Multiples - HCL Technologies
Public Basket 8x
6x
Limited
4x
2x
HCL Technologies Limited 0x
16
Revenue Multiples - Capgemini SE
Public Basket
3x
2x
1x
Capgemini SE 0x
17
Revenue Multiples - Infosys Limited
Public Basket
5x
4x
3x
2x
1x
Infosys Limited 0x
18
Revenue Multiples - Cognizant Technology
Public Basket
10x
Solutions Corporation
8x
6x
4x
2x
Cognizant Technology Solutions Corporation 0x
TEV/EBITDA Average
19
Revenue Multiples - Accenture plc
Public Basket
4x
3x
2x
1x
Accenture plc 0x
20
Revenue Multiples - Tata Consultancy
Public Basket
10x
Services Limited
8x
6x
4x
2x
Tata Consultancy Services Limited 0x
21
Revenue Multiples - International Business
Public Basket 5x
4x
Machines Corporation
3x
2x
1x
International Business Machines Corporation 0x
International Business Machines Corporation operates as an
integrated technology and services company worldwide. Its
TEV/Revenue Average
Cognitive Solutions segment offers Watson, a cognitive
computing platform that interacts in natural language, processes
big data, and learns from interactions with people and EBITDA Multiples - International Business
computers. This segment also offers data and analytics 30x Machines Corporation
solutions, including analytics and data management platforms, 24x
cloud data services, enterprise social software, talent 18x
management solutions, and solutions tailored by industry; and 12x
transaction processing software that runs mission-critical 6x
systems in banking, airlines, and retail industries. International 0x
Business Machines Corporation was founded in 1911 and is
headquartered in Armonk, New York.
TEV/EBITDA Average
22
Contact Information
7MA provides Investment Banking & Advisory Services to the Business Services and Technology Industries globally.
We advise on M&A and private capital transactions, and provide market assessments and benchmarking. As a close-
knit team with a long history together and a laser focus on our target markets, we help our clients sell their
companies, raise capital, grow through acquisitions, and evaluate new markets. Securities offered through 7M
Securities LLC.
Leroy Davis, Partner 704.899.5962 leroy@7mileadvisors.com
23