M&A Snapshot Q2 2015

Web: architectpartners.com | Email: info@architectpartners.com

M&A SNAPSHOT
Q2 - 2015
Q2
The uptrend continues in Q2
2015 and China gets even
hotter.
Core M&A activity was up by 36%
year over year with non-U.S.based activity leading the growth.
As we observed last quarter,
China M&A has taken off in the
past 18 months in terms of both
number of transactions and size.
Almost entirely comprised of
Chinese acquirers acquiring
Chinese-based targets, 22% of
the core M&A transactions this
quarter are Chinese deals. While
U.S. activity is strong, activity
levels are essentially flat over the
past four quarters.

Q3

201

2014

2013
Q4

Q1

Q2

Q3

Q4

Q1

32

406

41

494

464

509

Q2

Total M&A Exits (a)

466

38

Core M&A Exits (b)

33

41

78

Core M&A Exits Up 36%

Year-Over-Year

61

70

74

45

63

86

76

Total Consideration $B (b)

$18.5
$7.0

$8.1

$9.6

$9.4

$12.3

$20.0
$13.8

$13.5

Average Consideration $230mm.

Up 31% Year-Over-Year

Proportion Premium Value (c)

% of Total
% of Core

3
32

5
42

2
17

3
18

4
29

4
27

4
20

4
26

3
16

Source: Architect Partners LLC, Capital IQ, company filings and public information
a) M&A exits within Mobile | Internet | Digital Media sectors
b) Core M&A exits are defined as transactions with announced or estimated values between $25 million and $1 billion in consideration, as these typically represent successful
business- building endeavors
c) Premium value transactions are defined as greater than 5 times invested equity capital or 5 times estimated last twelve months revenue (LTM)

M&A BY SECTOR
Q2 - 2015

Service
App
Provider Developmen
Commerce
Consumer
7% 3%
Application
12%
9%
Analytics
Media
2%
Application
1%
Security

Enterprise Applications and Digital Marketing continue to lead by activity

levels and the most strategically interesting transactions this past quarter
were largely within those categories.
The acquisition of AOL by Verizon was the marquee transaction (our M&A
Alert) of the quarter by size and strategic importance. As we highlight in our
M&A Alert, Verizon has crossed two bright lines with this transaction 1)
moving more into the content business, and 2) using its customer data for ad
targeting.

6%

Network
Infrastructure 7%

Twitter continued its thoughtful M&A strategy with the acquisition of TellApart,
designed to enhance their ad monetization by better understanding and
targeting their audience. Also of note, Uber has demonstrated an ambitious
intent to "own" its own maps and logistics capabilities via the acquisition of
Microsoft's map business this quarter which closely follows the acquisition of
deCarta's turn-by-turn navigation platform and its participation the auction for
Nokia's HERE business.

Enterprise

29% Application

6%
Hardware

Number of
Deals by
Sector

17%
Digital
Marketing

Core Transactions by Sector

SECTOR
Consumer Application
Enterprise Application
Analytics Application
Network Infrastructure
App Development
Security
Commerce
Digital Marketing
Media
Hardware

$2,183

$5,883

Total sector M&A value in $mm

$600 $1,062 $153 $1,000

$2,376

$2,675

$1,282 $1,494 $1,064

Source: Architect Partners LLC, Capital IQ, company filings and public information

Service Provider
3

PREMIUM VALUE DEALS

Q2 - 2015

Premium Value is defined as greater than 5 times invested equity

capital or 5 times the estimated last 12 months revenue (LTM)

Target | Acquirer

x LTM Revenue

Treatwell | Recruit
Momo | Huatai Ruilian
Menulog | JUST EAT
wahanda.com | Recruit
Jiuzhi Tianxia | Hunan TV
Renren | CEO-Led Buyout
lynda.com | LinkedIn
CryptoLogic | NYX Gaming Group
Altera | Intel
Telecity | Equinix
Stucco | Market Tech
Qihoo 360 | CEO-Led Buyout
Cervalis | CyrusOne
Rally Software | CA
TellApart | Twitter
Bronto Software | NetSuite

148x
48x
33x
29x

LTM revenue multiple of

the target at the time of
acquisition
LTM revenue multiple of
the acquirer at the time
of acquisition, if
available

37x

Target | Acquirer

10

12

14

16

18

20

x Invested Capital

TrustWave | Singapore Telecom

Clusterk | Amazon
TellApart | Twitter
Virtustream | EMC
lynda.com | LinkedIn

81x
42x

12

16

Source: Architect Partners LLC, Capital IQ, company filings and public information

20

24

28

32

36

40
4

MOST ACTIVE
ACQUIRERS
LTM
(In terms of number of acquisitions)

1.

2.
3 / 14 | N/A
Agawi
Timeful
Pulse.io

6.

3 / 11 |
$2.5B
6 Wunderkinder GmbH
BlueStripe Software
Datazen Software

7.

11.
3 / 4 | $450mm
Accelyst Solutions
Letsgomo Labs
MartMobi

4.
3 / 8 | $533mm

None

TellApart
tenXer
Whetlab

9.

2 / 5 | $18.9B
Altera
Recon
Instruments

12.
1 / 4 | $2.6B
ConteXtream

5.

0 / 10 | $648mm

8.

2 / 5 | $1.7B
lynda.com
Refresh

3.

3 / 6 | N/A
Blue Box Group
Explorys
Phytel

10.

2 / 5 | N/A

1 / 5 | $1.4B

0 / 5 | $367mm

Coherent Navigation
Metaio

Voyagin

None

13.

14.

15.

1 / 4 | N/A

0 / 4 | N/A

0 / 4 | $500mm

SoThree

None

None

Number of new deals in Q1 / total deals last 4 quarters | total spend last 4 quarters (a)
a) A number of transactions do not have disclosed acquisition price, so aggregate value of deals over the last twelve months is likely understated.
Source: Architect Partners LLC, Capital IQ, company filings and public information

CORE TRANSACTIONS
Q2 - 2015

Premium Value M&A

BUYER

TARGET

TRANSACTION
VALUE ($MM)

TARGET DESCRIPTION

8x8 (Nasdaq:EGHT)

DXI

25

Cloud-based enterprise and contact centre communication solutions.

Based in London, United Kingdom.

Accton Technology
(TSEC:2345)

SMC Networks

26

Manufactures and sells network solutions, primarily hardwares, to

households and enterprises.

SimonsVoss Technologies
GmbH

235

Access control and biometry systems worldwide. Based in

Unterfoehring, Germany.

Shanghai Snowfish Tech

248

Mobile entertainment, primarily gaming. Based in Shanghai, China.

Yes

Amazon
(Nasdaq:AMZN)

Clusterk

50

Amazon AWS cloud computing management.

Yes

Amdocs (Nasdaq:DOX)

Comverse, BusinessSupport System

272

Billing and customer management systems for service providers.

Apax Partners

Zap Group

37

Operates various directory and information websites in Israel and

internationally. Based in Ramat Gan, Israel.

ASSA ABLOY AB
(OM:ASSA B)

Flexim Security Oy

39

Security and attendance monitoring products. Based in Espoo,

Finland.

Automattic

Bubblestorm Management

30

Develops and offers a software plug-in that enables websites for

ecommerce. Based in Belville, South Africa.

AVG Technologies
(NYSE:AVG)

HideMyAss.com

60

Main product of Privax, a VPN encryption company.

BlackBerry (TSX:BB)

WatchDox

70

Enterprise file synchronization and sharing platforms.

Yes

BlueFocus
Communication (SZSE:
300058)

Domob Network Technology

109

Mobile and internet advertising platform. Based in Beijing, China.

Yes

Allegion Luxembourg
Holding and Financing
S. r.l.
Allwin
Telecommunication
(SZSE:002231)

Mobile | Internet | Digital Media M&A transactions with announced or estimated consideration between $25 million and $1 billion.

AP M&A
ALERT

VCBACKED
Yes

Yes

CORE TRANSACTIONS

(CONTINUED)

Q2 - 2015

Premium Value M&A

BUYER

TARGET

TRANSACTION
VALUE ($MM)

Brand Networks

SHIFT

50

Real-time collaboration platform for people from multiple parties to

work together on projects (ad campaign).

CA (Nasdaq:CA)

Rally Software
(NYSE:RALY)

534

Management solutions for Agile software development worldwide.

Cathay Capital Private

Equity

SAS Smartadserver

40

Develops adserving technologies. Based in Paris, France.

CEO-Led Buyout

Kongzhong (Nasdaq:KZ)

353

Digital entertainment services, with emphasis on gaming, in China.

Based in Beijing, China.

CEO-Led Buyout

AirMedia Group
(Nasdaq:AMCN)

247

Digital media ad network (digital screens) in high-traffic locations

(airports, etc) in China. Based in Chaoyang, China.

CEO-Led Buyout

iDreamSky (Nasdaq:DSKY)

492

Licenses and operates mobile games, with multiple being globally

renowned in Apple App Store. Based in China.

CEO-Led Buyout

China Information
Technology (Nasdaq:CNIT)

157

Cloud-based data solutions to enterprises.

CEO-Led Buyout

Renren (NYSE:RENN)

990

Social networking internet platform in China. Based in Beijing, China.

CEO-Led Buyout

Vimicro (NasdaqGM:VIMC)

342

Develops semiconductor product with multimedia applications,

specifically video processing.

Charter Communications
(Nasdaq:CHTR)

ActiveVideo Networks

135

Develops cloud-based HTML5-powered video-streaming software

across platforms.

Cisco (Nasdaq:CSCO)

OpenDNS

635

Extends the Domain Name System by adding features such as

phishing protection and optional content filtering.

Ciena (NYSE:CIEN)

Cyan (NYSE:CYNI)

275

Major performance upgrade services for legacy network companies.

TARGET DESCRIPTION

Compagnie Generale
DES Etablissements
Online car tire retailer that offers automobile tires for consumers in
blackcircles.com
76
Michelin SCA
the United Kingdom. Based in Edinburgh, United Kingdom.
(ENXTPA:ML)
Mobile | Internet | Digital Media M&A transactions with announced or estimated consideration between $25 million and $1 billion.

AP M&A
ALERT

VCBACKED
Yes

CORE TRANSACTIONS

(CONTINUED)

Q2 - 2015

Premium Value M&A

BUYER

TARGET

TRANSACTION
VALUE ($MM)

Comverse
(NasdaqGM:CNSI)

Acision Global

210

Messaging softwares for communication service providers and

enterprises. Based in Reading, United Kingdom.

Continental
Aktiengesellschaft
(DB:CON)

Elektrobit Automotive GmbH

668

Frontier embedded softwares for the automobiles. Based in

Erlangen, Germany.

CoStar Realty
Information

Network Communications

170

Publishes information for the real estate market in North America.

Crowd Mobile
(ASX:CM8)

Track Concepts B.V.

30

Mobile payments solutions for telecommunication companies

globally. Based in Amsterdam, Netherlands.

ctrip.com

eLong (Nasdaq:LONG)

682

Online travel services in China. Based in Beijing, China.

Cypress Semiconductor
(Nasdaq:CY)

Integrated Silicon Solution

(Nasdaq:ISSI)

634

Fabless semiconductor company, that designs and markets

integrated circuits.

CyrusOne

Cervalis

400

Provides data center services.

Dean Drako, CEO of

Eagle Eye

Brivo Systems

50

Provides SaaS applications for security management.

Dun & Bradstreet

Dun & Bradstreet Credibility

350

Credit building and credibility solutions for businesses.

Eckoh (AIM:ECK)

Netcall (AIM:NET)

138

Communications, workforce, and business process management

software internationally. Based in Hemel Hempstead, the United
Kingdom.

Envestnet (NYSE:ENV)

Oltis Software

32

Customized financial planning and client management solutions for

financial industry.

Epiq Systems

Iris Data Services

134

Data and electronic discovery services, such as data collection and

forensics.

TARGET DESCRIPTION

Mobile | Internet | Digital Media M&A transactions with announced or estimated consideration between $25 million and $1 billion.

AP M&A
ALERT

VCBACKED

Yes

CORE TRANSACTIONS

(CONTINUED)

Q2 - 2015

Premium Value M&A

BUYER

TARGET

TRANSACTION
VALUE ($MM)

Fortinet (Nasdaq:FTNT)

Meru Networks
(NasdaqGM:MERU)

42

Virtualized wireless local area network (LAN) solutions.

Francisco Partners
Management

ClickSoftware
(Nasdaq:CKSW)

421

Software for workforce management worldwide. Based in Petach

Tikva, Israel.

Francisco Partners
Management

Procera Networks

238

Network performance solutions based on Deep Packet Inspection

(DPI) to network operators worldwide.

GigOptix (AMEX:GIG)

GSI Technology
(Nasdaq:GSIT)

152

Develops and markets high-performance memory products primarily

for the telecommunications industry.

Gosuncn Technology
Group

Guangzhou Goldmessage
Technology

40

Provides data security software and solutions. Based in Guangzhou

City, China.

Grupo Ezentis SA
(CATS:EZE)

Ability Tecnologia e Servios

S/A

62

Operates fixed line telecommunication networks in Sao Paulo.

Based in So Paulo, Brazil.

Guangdong Sky Dragon

Printing Ink Group
(SZSE:300063)

Yutang Lianchuang

209

Internet and search engine media marketing services. Based in

China.

Hotspring Ventures

Treatwell Holding BV

38

Online reservation site for hair and beauty treatments. Based in

Amsterdam, the Netherlands.

Hunan TV & Broadcast

Intermediary (SZSE:
000917)

Jiuzhi Tianxia Technology

52

Operates an Android application store, a mobile game distribution

platform, and a mobile browser. Based in Shenzhen, China.

Infinera (Nasdaq:INFN)

Transmode AB (OM:TRMO)

346

Packet-optical networking solutions to manage the capacity needs in

video and data traffic. Based in Stockholm, Sweden.

Infosys (BSE:500209)

Skava

120

E-commerce platforms, including mobile websites and apps.

Jasper Infotech

Accelyst Solutions

450

Online mobile recharge services. Based in Mumbai, India.

TARGET DESCRIPTION

Mobile | Internet | Digital Media M&A transactions with announced or estimated consideration between $25 million and $1 billion.

AP M&A
ALERT

VCBACKED

Yes

Yes

Yes

CORE TRANSACTIONS

(CONTINUED)

Q2 - 2015

Premium Value M&A

BUYER

TARGET

TRANSACTION
VALUE ($MM)

TARGET DESCRIPTION

JUST EAT (LSE:JE.)

Menulog Group

687

Online takeaway food and home delivery platform. Based in Sydney,

Australia.

Keysight Technologies
Netherlands B.V.

Anite (LSE:AIE)

584

Mobile device, infrastructure and network testing systems to the

wireless market worldwide. Based in Fleet, United Kingdom.

KION GROUP AG
(DB:KGX)

Egemin International NV,

Handling Automation
Division

81

Internal logistics automation solutions. Based in Belgium.

Yes

Knowles (NYSE:KN)

Audience (Nasdaq:ADNC)

131

Voice and audio hardware solutions for mobile devices worldwide.

Yes

M2 Group (ASX:MTU)

Call Plus & 2Talk

186

Broadband and fixed voice services. Based in New Zealand.

Market Tech (AIM:MKT)

Stucco Media

43

Data-driven e-commerce marketing platform. Based in Tel Aviv,

Israel.

MasterCard (NYSE:MA)

Applied Predictive
Technologies

600

Cloud-based predictive analytics software solutions, with emphasis

in profit measurement.

Millicom International
Cellular SA
(OTCPK:MIIC.F)

Zanzibar Telecom

74

Fixed, mobile, and data communications services primarily in Africa.

Based in Zanzibar, Tanzania.

NameFind

Marchex, Domain Name

Portfolio Business

28

Domain name registration services.

Netia S.A. (WSE:NET)

Telekomunikacja Kolejowa
Splka z o.o.

62

Public telecommunications carrier in Poland. Based in Warsaw,

Poland.

NetSuite (NYSE:N)

Bronto Software

200

Automated marketing platform for companies.

Novatel Wireless
(Nasdaq:MIFI)

DigiCore (JSE:DGC)

93

GPS/GSM fleet management and vehicle tracking solutions,

primarily in South Africa. Based in Centurion, South Africa.

Mobile | Internet | Digital Media M&A transactions with announced or estimated consideration between $25 million and $1 billion.

AP M&A
ALERT

VCBACKED
Yes

Yes

10

CORE TRANSACTIONS

(CONTINUED)

Q2 - 2015

Premium Value M&A

BUYER

TARGET

TRANSACTION
VALUE ($MM)

NYX Gaming Group

(TSXV:NYX)

CryptoLogic

119

Gaming applications and entertainment content in North America

and Europe. Based in Dublin, Ireland.

Orient Securities

China Mobile Games and

Entertainment
(NasdaqGM:CMGE)

703

Develops and operates mobile games primarily in China. Based in

Guangzhou, China.

Orient Securities

Taomee (NYSE:TAOM)

99

Operates as a childrens entertainment, media and products

company in China. Based in Beijing, China.

Perfect Commerce

Hubwoo (ENXTPA:HBW)

29

Spend management and collaborative business process automation.

Based in Paris, France.

Pitney Bowes
(NYSE:PBI)

Borderfree (Nasdaq:BRDR)

465

Cross-border ecommerce solutions.

Qiwi (Nasdaq:QIWI)

SAER

167

Electronic payment services. Based in Moscow, Russia.

Quality Technology
Services

Carpathia Hosting

326

Cloud services and managed hosting for enterprises worldwide.

Yes

Recruit Holdings (TSE:

6098)

Hotspring Ventures

170

Beauty treatment website. Based in London, United Kingdom.

Yes

Red Ventures Holdco

Imagitas

310

Online and offline direct marketing solutions for advertisers.

Yes

Redknee Solutions
(TSX:RKN)

Orga Systems GmbH

43

Real-time charging and adminstration software for mobile

telecommunication industry. Based in Paderborn, Germany.

Rogers Communications
(TSX:RCI.B)

Data & Audio-Visual

Enterprises Holdings

355

Wireless telecommunication services in Canada. Based in Vaughan,

Canada.

Yes

Singapore
Telecommunications
(SGX:Z74)

TrustWave Holdings

810

Provides data security and compliance management solutions to

businesses.

Yes

TARGET DESCRIPTION

Mobile | Internet | Digital Media M&A transactions with announced or estimated consideration between $25 million and $1 billion.

AP M&A
ALERT

VCBACKED

11

CORE TRANSACTIONS
Q2 - 2015

Premium Value M&A

BUYER

TARGET

TRANSACTION
VALUE ($MM)

SolarWinds (NYSE:SWI)

Papertrail

41

Hosted log management.

Talkweb Information
System (SZSE:002261)

Shandong Changzheng
Education Technology

117

Software for pre-school education. Based in Zibo, China.

Tieto Oyj (HLSE:TIE1V)

Software Innovation ASA

78

Enterprise content and information management software. Based in

Fornebu, Norway.

Yes

Twitter (NYSE:TWTR)

TellApart

533

Online marketing applications for e-commerce retailers worldwide.

Yes

Valid USA

Marketing Software
Company

41

Integrated database marketing services.

Vista Equity Partners

Pearson Education, Student

Information Systems
Businesses

350

Web-based information systems for schools.

Visteon Technical And

Services Centre

Visteon Automotive Systems

India, EPG Business

50

Electronic program guides (EPG) software for automobiles. Based in

India.

Wowo
(NasdaqGM:WOWO)

Join Me Group

524

B2B procurement platform for the foodservice industry in China.

Based in Hong Kong

Yes

Yellow Pages (TSX:Y)

ComFree/DuProprio
Network

38

A flat-fee real-estate discovery and buying platform. Based in

Canada.

Yes

Youzu Interactive
(SZSE:002174)

Guangzhou Zhangtao
Network Technology

87

Various big-data services in the mobile internet field. Based in China.

Zhejiang New Jialian

Electronics (SZSE:
002188)

Bus Online

272

TV network on buses in China. Based in Shanghai, China.

Zoopla Property Group

(LSE:ZPLA)

Ulysses

292

Comparison website for internet-associated consumer products and

services, such as laptops and broadband. Based in London, United
Kingdom.

TARGET DESCRIPTION

Mobile | Internet | Digital Media M&A transactions with announced or estimated consideration between $25 million and $1 billion.

AP M&A
ALERT

VCBACKED

Yes

12

OTHER NOTABLE DEALS

Q2 - 2015

Premium Value M&A

BUYER

TARGET

TRANSACTION
VALUE ($MM)

Adobe (Nasdaq:ADBE)

Tumri

Advertising platform for highly-targeted messages to consumers.

Adobe (Nasdaq:ADBE)

Mixamo

3D computer graphics technology company, focusing on automated

animation.

Yes

App Annie

Mobidia

Tracks actual usage of millions of IOS and Android apps.

Yes

Apple (Nasdaq:APPL)

Metaio

Augmented reality software technology and solutions.

Yes

Avago (Nasdaq:AVGO)

Broadcom (Nasdaq:BRCM)

36,698

Provides semiconductor solutions for wired and wireless

communications.

CEO-Led Buyout

Momo (Nasdaq:MOMO)

1,863

A social-network company, focusing on expanding social circle

based on location and interest. Based in Beijing, China.

CEO-Led Buyout

Qihoo 360 (NYSE:QIHU)

9,913

Provides internet services in China and mainly offers various security

products. Based in Beijing, China.

Charter Communications
(Nasdaq:CHTR)

Time Warner Cable

(NYSE:TWC)

78,428

Provides video, high-speed data, and voice services in the United

States.

Cisco (Nasdaq:CSCO)

Tropo

Platform enabling web developers to write communication

applications in various programming languages.

Cox Automotive

Dealertrack (Nasdaq:TRAK)

4,547

Provides web-based software solutions and services to the

automotive retail industry in the United States and Canada.

EMC Corporation
(NYSE:EMC)

Virtustream

1,200

Provides enterprise-class cloud software and services worldwide.

Equinix (Nasdaq:EQIX)

Telecity Group (LON:TCY)

4,064

Offer co-location and related services in multiple European

countries. Based in London, United Kingdom.

Google (Nasdaq:GOOG)

Timeful

Time management app to increase productivity, with data-driven

approach.

Yes

Google (Nasdaq:GOOG)

Agawi

Platform allowing people to access apps on their phones without

downloading them.

Yes

Google (Nasdaq:GOOG)

Pulse.io

Mobile apps performance monitering platform.

Yes

TARGET DESCRIPTION

Mobile | Internet | Digital Media M&A transactions with announced or estimated consideration in excess of $1 billion.

AP M&A
ALERT

VCBACKED

Yes

13

OTHER NOTABLE DEALS

Q2 - 2015

Premium Value M&A

BUYER

TARGET

TRANSACTION
VALUE ($MM)

Hewlett-Packard
(NYSE:HP)

ConteXtream

Hua Capital Led

Acquisition

OmniVision (Nasdaq:OVTI)

1,900

Intel (Nasdaq: INTC)

Recon Instruments

Intel (Nasdaq: INTC)

Altera (Nasdaq:ALTR)

18,220

A semiconductor company that designs and sells customized

integrated circuits.

Iron Mountain
(NYSE:IRM)

Recall (ASE:REC)

2,594

Provides information management solutions worldwide. Based in

Alexandria, Australia.

LinkedIn (NYSE:LNKD)

Refresh

LinkedIn (NYSE:LNKD)

lynda.com

Nokia (NYSE:NOK)

TARGET DESCRIPTION
Develops software-defined networking (SDN) and network-function
virtualization (NFV) software.

AP M&A
ALERT

VCBACKED
Yes

Designs, develops, manufactures and markets semiconductor

image-sensor devices worldwide.
Smartglasses and heads-up display solutions, delivering information
like activity metrics and maps to users eyes.

Yes

Data-driven social networking company, providing insight about

relationships between contacts.

Yes

1,500

Provides instructional videos and courses to enterprises and

individuals.

Yes

Alcatel-Lucent (NYSE:ALU)

22,390

Provides broadband access worldwide. Based in BoulogneBillancourt, France.

Permira Advisers &

Canada Pension Plan
Investment

Informatica (Nasdaq:INFA)

5,321

Provides enterprise data integration software and services

worldwide.

SalesForce
(NYSE:CRM)

Toopher

Enterprise multifactor authentication platform.

Rakuten (TYO:4755)

Voyagin

Online traveling platform. Based in Tokyo, Japan.

Telenet (EBR:TNET)

BASE Company nv

1,425

Uber

Microsoft, Bing Map Division

Verizon (NYSE:VZ)

AOL (NYSE:AOL)

4,759

Yes

Provides mobile telephony, TV, internet, and fixed telephony

solutions. Based in Brussels, Belgium.
Map applications, and map APIs.
Provides various digital brands and products to consumers
worldwide.

Mobile | Internet | Digital Media M&A transactions with announced or estimated consideration in excess of $1 billion.

14

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