Attached files
| file | filename |
|---|---|
| 8-K/A - 8-K/A - Marketo, Inc. | a14-6211_18ka.htm |
| EX-23.1 - EX-23.1 - Marketo, Inc. | a14-6211_1ex23d1.htm |
| EX-99.1 - EX-99.1 - Marketo, Inc. | a14-6211_1ex99d1.htm |
| EX-99.2 - EX-99.2 - Marketo, Inc. | a14-6211_1ex99d2.htm |
Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
On December 19, 2013, Marketo, Inc. (the “Company”) completed its acquisition of Insightera Ltd. (“Insightera”), a company organized under the laws of the State of Israel. Insightera, a software-as-a-service (“SaaS”) company, provides a platform that allows its customers to track and compile data about users visiting their internet websites with the purpose of displaying the website information in response to the needs of the users.
As a result of the acquisition, the Company acquired all of the issued and outstanding shares of Insightera, and Insightera became a wholly owned subsidiary of the Company. Consideration consisted of a) $10.0 million of cash, subject to a decrease of approximately $159,000 based on Insightera’s cash balance as of the consummation of the acquisition relative to an agreed target and b) 427,761 shares of common stock of the Company valued at the closing market price of $32.89.
The following unaudited pro forma condensed combined balance sheet as of September 30, 2013 and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2012 and for the nine months ended September 30, 2013 are based on the historical financial statements of the Company and Insightera after giving effect to the Company’s acquisition of Insightera on December 19, 2013 as more fully described at Item 2.01 of this Form 8-K/A and applying the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial statements.
The unaudited pro forma condensed combined balance sheet as of September 30, 2013 is presented as if the acquisition of Insightera had occurred on September 30, 2013.
The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2013 and for the year ended December 31, 2012 are presented as if the Insightera acquisition had occurred on January 1, 2012 and were carried forward through each of the respective periods.
The unaudited pro forma condensed combined financial statements have been prepared by management for illustrative purposes only in accordance with Article 11 of SEC Regulation S-X and are not necessarily indicative of the consolidated financial position or results of operation in future periods or the results that actually would have been realized had the Company and Insightera been a combined company during the specified periods.
MARKETO, INC.
PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of September 30, 2013
(In thousands)
(Unaudited)
|
|
|
Historical |
|
Pro Forma |
| |||||||||
|
|
|
Marketo |
|
Insightera |
|
Adjustments |
|
|
Combined |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
ASSETS |
|
|
|
|
|
|
|
|
|
| ||||
|
Current assets: |
|
|
|
|
|
|
|
|
|
| ||||
|
Cash and cash equivalents |
|
$ |
140,920 |
|
$ |
4,585 |
|
$ |
(9,841 |
) |
(1) |
$ |
135,664 |
|
|
Accounts receivable, net of allowances |
|
13,398 |
|
73 |
|
— |
|
|
13,471 |
| ||||
|
Prepaid expenses and other current assets |
|
4,441 |
|
76 |
|
— |
|
|
4,517 |
| ||||
|
Total current assets |
|
158,759 |
|
4,734 |
|
(9,841 |
) |
|
153,652 |
| ||||
|
Property and equipment, net |
|
13,072 |
|
70 |
|
— |
|
|
13,142 |
| ||||
|
Goodwill |
|
9,537 |
|
— |
|
15,401 |
|
(3) |
24,938 |
| ||||
|
Intangible assets, net |
|
2,584 |
|
— |
|
4,600 |
|
(2) |
7,184 |
| ||||
|
Other assets |
|
524 |
|
18 |
|
— |
|
|
542 |
| ||||
|
Total assets |
|
$ |
184,476 |
|
$ |
4,822 |
|
$ |
10,160 |
|
|
$ |
199,458 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
| ||||
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
| ||||
|
Accounts payable |
|
$ |
4,108 |
|
$ |
42 |
|
$ |
— |
|
|
$ |
4,150 |
|
|
Accrued expenses and other current liabilities |
|
15,471 |
|
262 |
|
1,468 |
|
(4) (6) (7) |
17,201 |
| ||||
|
Deferred revenue |
|
30,585 |
|
59 |
|
— |
|
|
30,644 |
| ||||
|
Current portion of credit facility |
|
1,814 |
|
— |
|
— |
|
|
1,814 |
| ||||
|
Total current liabilities |
|
51,978 |
|
363 |
|
1,468 |
|
|
53,809 |
| ||||
|
Credit facility, net of current portion |
|
6,035 |
|
— |
|
— |
|
|
6,035 |
| ||||
|
Deferred rent |
|
1,481 |
|
— |
|
— |
|
|
1,481 |
| ||||
|
Deferred tax liability |
|
— |
|
— |
|
374 |
|
(5) |
374 |
| ||||
|
Other long-term liabilities |
|
— |
|
24 |
|
— |
|
|
24 |
| ||||
|
Total liabilities |
|
59,494 |
|
387 |
|
1,842 |
|
|
61,723 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Stockholder’s equity: |
|
|
|
|
|
|
|
|
|
| ||||
|
Convertible preferred stock |
|
— |
|
13 |
|
(13 |
) |
(8) |
— |
| ||||
|
Common stock |
|
4 |
|
1 |
|
(1 |
) |
(1) (8) |
4 |
| ||||
|
Additional paid-in capital |
|
238,923 |
|
6,434 |
|
7,409 |
|
(1) (7) (8) |
252,766 |
| ||||
|
Accumulated other comprehensive income |
|
121 |
|
— |
|
— |
|
|
121 |
| ||||
|
Accumulated deficit |
|
(114,066 |
) |
(2,013 |
) |
923 |
|
(6) (8) |
(115,156 |
) | ||||
|
Total stockholders’ equity |
|
124,982 |
|
4,435 |
|
8,318 |
|
|
137,735 |
| ||||
|
Total liabilities and stockholders’ equity |
|
$ |
184,476 |
|
$ |
4,822 |
|
$ |
10,160 |
|
|
$ |
199,458 |
|
See accompanying notes to the unaudited pro forma condensed combined financial statements.
MARKETO, INC.
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
For the year ended December 31, 2012
(In thousands, except per share data)
(Unaudited)
|
|
|
Historical |
|
Pro Forma |
| |||||||||
|
|
|
Marketo |
|
Insightera |
|
Adjustments |
|
|
Combined |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Revenue: |
|
|
|
|
|
|
|
|
|
| ||||
|
Subscription and support |
|
$ |
52,756 |
|
$ |
166 |
|
$ |
— |
|
|
$ |
52,922 |
|
|
Professional services and other |
|
5,657 |
|
— |
|
— |
|
|
5,657 |
| ||||
|
Total revenue |
|
58,413 |
|
166 |
|
— |
|
|
58,579 |
| ||||
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
| ||||
|
Subscription and support |
|
16,216 |
|
37 |
|
913 |
|
(9) |
17,166 |
| ||||
|
Professional services and other |
|
8,442 |
|
— |
|
— |
|
|
8,442 |
| ||||
|
Total cost of revenue |
|
24,658 |
|
37 |
|
913 |
|
|
25,608 |
| ||||
|
Gross profit: |
|
|
|
|
|
|
|
|
|
| ||||
|
Subscription and support |
|
36,540 |
|
129 |
|
(913 |
) |
|
35,756 |
| ||||
|
Professional services and other |
|
(2,785 |
) |
— |
|
— |
|
|
(2,785 |
) | ||||
|
Total gross profit |
|
33,755 |
|
129 |
|
(913 |
) |
|
32,971 |
| ||||
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
| ||||
|
Research and development |
|
18,799 |
|
203 |
|
— |
|
|
19,002 |
| ||||
|
Sales and marketing |
|
37,776 |
|
362 |
|
233 |
|
(9) |
38,371 |
| ||||
|
General and administrative |
|
11,388 |
|
159 |
|
83 |
|
(9) |
11,630 |
| ||||
|
Total operating expenses |
|
67,963 |
|
724 |
|
316 |
|
|
69,003 |
| ||||
|
Loss from operations |
|
(34,208 |
) |
(595 |
) |
(1,229 |
) |
|
(36,032 |
) | ||||
|
Other income (expense), net |
|
(158 |
) |
(5 |
) |
|
|
|
(163 |
) | ||||
|
Loss before provision for income taxes |
|
(34,366 |
) |
(600 |
) |
(1,229 |
) |
|
(36,195 |
) | ||||
|
Provision for income taxes |
|
19 |
|
— |
|
(435 |
) |
(10) |
(416 |
) | ||||
|
Net loss |
|
$ |
(34,385 |
) |
$ |
(600 |
) |
$ |
(794 |
) |
|
$ |
(35,779 |
) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net loss per share of common stock, basic and diluted |
|
$ |
(12.26 |
) |
|
|
|
|
|
$ |
(11.07 |
) | ||
|
Shares used in computing net loss per share of common stock, basic and diluted |
|
2,806 |
|
|
|
|
|
(11) |
3,233 |
| ||||
See accompanying notes to the unaudited pro forma condensed combined financial statements.
MARKETO, INC.
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
For the nine months ended September 30, 2013
(In thousands, except per share data)
(Unaudited)
|
|
|
Historical |
|
Pro Forma |
| |||||||||
|
|
|
Marketo |
|
Insightera |
|
Adjustments |
|
|
Combined |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Revenue: |
|
|
|
|
|
|
|
|
|
| ||||
|
Subscription and support |
|
$ |
59,942 |
|
$ |
235 |
|
$ |
— |
|
|
$ |
60,177 |
|
|
Professional services and other |
|
7,805 |
|
— |
|
— |
|
|
7,805 |
| ||||
|
Total revenue |
|
67,747 |
|
235 |
|
|
|
|
67,982 |
| ||||
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
| ||||
|
Subscription and support |
|
18,386 |
|
77 |
|
684 |
|
(9) |
19,147 |
| ||||
|
Professional services and other |
|
9,307 |
|
— |
|
— |
|
|
9,307 |
| ||||
|
Total cost of revenue |
|
27,693 |
|
77 |
|
684 |
|
|
28,454 |
| ||||
|
Gross profit: |
|
|
|
|
|
|
|
|
|
| ||||
|
Subscription and support |
|
41,556 |
|
158 |
|
(684 |
) |
|
41,030 |
| ||||
|
Professional services and other |
|
(1,502 |
) |
— |
|
— |
|
|
(1,502 |
) | ||||
|
Total gross profit |
|
40,054 |
|
158 |
|
(684 |
) |
|
39,528 |
| ||||
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
| ||||
|
Research and development |
|
16,919 |
|
418 |
|
— |
|
|
17,337 |
| ||||
|
Sales and marketing |
|
43,050 |
|
410 |
|
175 |
|
(9) |
43,635 |
| ||||
|
General and administrative |
|
11,659 |
|
757 |
|
63 |
|
(9) |
12,479 |
| ||||
|
Total operating expenses |
|
71,628 |
|
1,585 |
|
238 |
|
|
73,451 |
| ||||
|
Loss from operations |
|
(31,574 |
) |
(1,427 |
) |
(922 |
) |
|
(33,923 |
) | ||||
|
Other income (expense), net |
|
(245 |
) |
8 |
|
— |
|
|
(237 |
) | ||||
|
Loss before provision for income taxes |
|
(31,819 |
) |
(1,419 |
) |
(922 |
) |
|
(34,160 |
) | ||||
|
Provision for income taxes |
|
46 |
|
— |
|
(665 |
) |
(10) |
(619 |
) | ||||
|
Net loss |
|
$ |
(31,865 |
) |
$ |
(1,419 |
) |
$ |
(257 |
) |
|
$ |
(33,541 |
) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net loss per share of common stock, basic and diluted |
|
$ |
(1.58 |
) |
|
|
|
|
|
$ |
(1.63 |
) | ||
|
Shares used in computing net loss per share of common stock, basic and diluted |
|
20,144 |
|
|
|
|
|
(11) |
20,572 |
| ||||
See accompanying notes to the unaudited pro forma condensed combined financial statements.
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(Unaudited)
Note 1—Basis of Presentation
The pro forma data included herein is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have occurred had the transaction been consummated as of January 1, 2012. The pro forma adjustments included herein reflect only those adjustments that are directly attributable to the Insightera acquisition and factually supportable, and with respect to the unaudited pro forma condensed combined statements of operations, expected to have a continuing impact on the Company. The preliminary allocations of the purchase price consideration to tangible and intangible assets acquired and liabilities assumed herein were based upon preliminary valuations and our estimates and assumptions are still subject to change.
Note 2—Preliminary Purchase Price Allocation
The acquisition of Insightera was accounted for using the acquisition method of accounting under which assets and liabilities of Insightera were recorded at their respective fair values including an amount for goodwill representing the difference between the acquisition consideration and the fair value of the identifiable net assets.
The total purchase price was allocated to the tangible and identified intangible assets acquired and liabilities assumed as of the closing date of the acquisition based upon their respective fair values. The allocation of the total purchase price has been prepared on a preliminary basis, and the preliminary estimates and assumptions used to determine the preliminary purchase price allocation are subject to change during the measurement period, which is the time after the acquisition during which the acquirer obtains the information needed to identify and measure the consideration transferred, the assets acquired, the liabilities assumed, not to exceed one year from the acquisition date.
A summary of the preliminary purchase price allocation for the acquisition of Insightera is as follows:
|
|
|
Purchase Price |
| |
|
Tangible assets: |
|
|
| |
|
Cash and cash equivalents |
|
$ |
4,585 |
|
|
Other current assets |
|
149 |
| |
|
Other assets |
|
88 |
| |
|
|
|
|
| |
|
Total tangible assets |
|
4,822 |
| |
|
Liabilities assumed: |
|
|
| |
|
Current liabilities |
|
(515 |
) | |
|
Other long-term liabilities |
|
(24 |
) | |
|
Deferred tax liability |
|
(374 |
) | |
|
|
|
|
| |
|
Total liabilities assumed |
|
(913 |
) | |
|
Intangible assets |
|
4,600 |
| |
|
Goodwill |
|
15,401 |
| |
|
|
|
|
| |
|
Total preliminary purchase price |
|
$ |
23,910 |
|
Note 3—Pro Forma Adjustments
The following pro forma adjustments are included in the unaudited pro forma condensed combined balance sheet as of September 30, 2013:
(1) Adjustment to record cash of $9.8 million and common stock consideration, valued at $14.1 million using the closing stock price on the date of acquisition of $32.89, paid in connection with the acquisition.
(2) Adjustment to record fair value of intangible assets acquired as follows:
|
|
|
Estimated |
|
Amount |
| |
|
Developed technology |
|
4 |
|
$ |
3,650 |
|
|
Domain names |
|
3 |
|
250 |
| |
|
Customer relationships |
|
3 |
|
700 |
| |
|
Total intangible assets |
|
|
|
$ |
4,600 |
|
(3) Adjustment to record goodwill of $15.4 million as a result of purchase consideration in excess of the fair value of assets acquired and liabilities assumed.
(4) Adjustment to record liability of approximately $152,000 related to the repayment of amounts to the Office of Chief Scientist in Israel that were received by Insightera for research and development efforts and will be paid subsequent to the closing of the acquisition.
(5) Adjustment to record the estimated deferred tax liability associated with acquired intangible assets.
(6) Adjustment to reflect direct and incremental acquisition-related costs of approximately $734,000 and $356,000 incurred by the Company and Insightera, respectively, expected to be incurred in the fourth quarter of 2013 not yet reflected in the historical financial statements.
(7) Adjustment to reflect the cost incurred of approximately $226,000 associated with the registration of common stock issued in connection with the acquisition.
(8) Adjustment to eliminate historical stockholders’ equity of Insightera.
The following pro forma adjustments are included in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2012 and for the nine months ended September 30, 2013:
(9) Adjustment to record amortization expense for the $4.6 million of acquired identifiable intangibles assets on a straight-line basis.
(10) Adjustment to the income tax provision for the reduction in the deferred tax liability resulting from the amortization of the acquired intangible assets, the generation of net operating losses and research and development credits.
(11) Adjustment to reflect the impact of 427,761 shares of common stock issued as consideration in connection with acquisition.