Avalara Q2 2022 Financial Analysis

Avalara Appears to Present an Inaccurate Revenue Multiple The Vista transaction represents a top decile revenue multiple compared to the broad set of historical software transactions U.S. Public Software All-Cash Transaction >$1bn Since 2012 (2) Median Transaction NTM EV/ Revenue Avalara 90th percentile 8.6 x 75th Percentile 50th Percentile 7.4x 5.1 x 2.5 x 2012 5.4 x 2013 3.7 x 2014 5.0 x 4.5 x 3.5 x 6.2 x 5.7 x Vista Transaction implied Multiple (Prior to the effect of 02 earnings and likely downward guidance revision): 8.8x 8.0 x 5.2 x 7.2 x 2015 2016 2017 2018 2019 2020 2021 2022YTD Source: FactSet, Avalora employee FAQ filed as a DEFA 14A as of 20-Sep-2022 Note: Precedent software NTM revenue multiples compiled from FactSet. Avalora transcction implied multiple as disclosed in the employee FAQ fled os o DEFAIJA. Total Transaction Value / NTM EBITDA1 Per Share Consideration x Common Shares Outstanding Total Equity Value Plus: Total Debt Less: Cash Total Transaction Value Divided by: Analyst consensus NTM Revenue (as of July 31) TTV/NTM Revenue: 1 2 $93.50 88,557,882 $8,280 3 $1,019 $1,461 $7,838 $957.5 8.2x Avalara appears to be using an inaccurate revenue multiple. Based on our calculations (shown below), the Total Transaction Value / NTM EBITDA is 8.2x,1 not 8.8x, as Avalara optimistically states. (If the deal were truly at 8.8x, the value to shareholders would be $100 per share.) We find it curious that Avalara would cite as its source for this data an employee FAQ, rather than analyst consensus estimates, as it uses for comparable transactions Again, Avalara appears to be using a 10-year look-back period, which is inconsistent with the methodology used by its financial advisor in its fairness opinion² - The universe of comparable transactions - all U.S. software companies – is, in our view, far too broad and likely contains dozens of irrelevant deals In its fairness opinion, Goldman selected 23 precedent transactions,³ most of which involved high-growth, SaaS-based businesses like Avalara's It is worth noting that the median multiples for these selected transactions were 8.9x NTM Revenue, 4 which is substantially higher than the 8.2x NTM Revenue multiple for Avalara 1 Source: FactSet and Company filings. Data as of August 5, 2022 ("Transaction Date"). 2 Source: Avalara's Definitive Proxy Statement, filed with the SEC on September 12, 2022, at page 56 ("Goldman Sachs calculated and compared the implied EV/NTM revenue multiple... at the time each such transaction was announced."). 9 3 ld. 4 ld. Altair US, LLC

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