Technology M & A Report Winter 2017

 

We at Sikich Investment Banking would like to wish everyone a happy and prosperous New Year. As has become a tradition with the Winter Technology Report, I provide some predictions for the upcoming year—as well as evaluate how last year’s predictions matched with reality. Additionally, we highlight some “good news” in technology for 2016. Finally, we proudly present an article by Dr. Jon Morse, CEO of the BoldlyGo Institute, an organization dedicated to advancing basic research and discovery from space with privately funded missions and public-private partnerships.

Below are my predictions for 2016 along with what actually happened. Not surprisingly, I got some right, but was way off on a few.

1. Unemployment by year-end: 4.5% (4.9%)
2. Prime rate of 4.25% by EOY (3.75%)
3. Increased spending in outsourced services (TBD)
4. 10-20% more M&A activity (by deal count)
than in 2015 (TBD)
5. GDP growth of 2.1% (3.5% annualized for
3Q 2016)
6. Sikich tech Index outpaces the DJIA (TBD)
7. Trump v. Clinton for US Presidency; Trump with
the win (surprisingly, got this one right)
8. NCAA Football: Alabama (Alabama)
9. NCAA Basketball: Michigan State (Villanova)
10. NFL: Carolina Panthers (Denver Broncos)
11. NHL: Blackhawks (Pittsburgh Penguins)
12. NBA: Golden State repeats (Cleveland Cavaliers)
13. MLB: Cubbies finally win it all (the curse was
finally broken!)

Economic predictions for 2017 are optimistic—largely due to what is believed to be a business-friendly administration and all sport-related predictions are being made (and not changed) on January 1:

1. Unemployment will drop to 4% or less
2. Prime rate will increase to 4.25%
3. DOW will close over 21,000
4. Annualized GDP of over 4%
5. NCAA Football: Clemson Tigers
6. NCAA Basketball: Gonzaga Bulldogs
7. NFL: Green Bay Packers
8. NHL: Chicago Blackhawks
9. NBA: Golden State Warriors
10. MLB: Cubbies again!

As always, we wish to remind all of our readers that the predictions are for fun only— they are not recommendations. Please do not make any investments or sports bets based in any way on what you have read here.

Reminder that the M&A Technology Report is now issued two times a year. The next issue will be distributed in July 2017.


In this issue of the Technology M&A Report from Sikich Investment Banking:


A Universe of Possibilities for Private Space Science

by: Jon Morse, CEO, BoldlyGo Institute

As the new administration takes office, the NASA transition team has been evaluating the programs of record and formulating recommendations for carrying out the administration’s civil space priorities. While there are complex challenges within the portfolio, NASA will continue to drive major initiatives in both robotic and human space exploration that will spawn opportunities for public-private partnerships. Meanwhile, the private sector has never been more active in space, as new capabilities become available that lower the cost for access to space and in-space operations. Combining these with the initiatives at NASA and other government space agencies points to a new age in space exploration with significant opportunities for progress and cooperation.


In the astrophysics community, exoplanet research is one of hottest fields. The search for habitable worlds around other stars addresses one of humanity’s most profound questions: Are we alone in the universe?


I am an astrophysicist and believe that basic research in the space sciences holds essentially limitless potential for tackling profound questions of our existence and opening the doors of exploration, innovation and future economic opportunity. Space science continues to generate extraordinary discoveries, whether roving Mars, investigating the fundamental physics of the universe or discovering new planets. As a result of extraordinary missions during the past decade, public interest in space – enriched through blockbuster movies, highly popular conventions, online social media and crowdfunding campaigns – remains high.

 

I run a nonprofit organization called BoldlyGo Institute that is dedicated to flying ground-breaking space missions using private funding and public-private partnerships. The projects BoldlyGo takes on derive from priorities recommended by the National Academy of Sciences. They are designed to achieve high-impact scientific results, stimulate future research and missions, and utilize state-of-the-art technologies — achieving historic firsts while enhancing the national portfolio of missions. BoldlyGo primarily uses charitable donations to advance its scientific missions, but each project owes its feasibility to the technology investments made by the government and commercial space companies.

In the astrophysics community, exoplanet research is one of hottest fields. The search for habitable worlds around other stars addresses one of humanity’s most profound questions: Are we alone in the universe? Tremendous progress has been made this decade, particularly by NASA’s Kepler mission, a space-based observatory that has discovered (through indirect detection) thousands of planets orbiting their parent stars. We now have sufficient evidence to show that small, rocky planets like the Earth are plentiful throughout our Milky Way galaxy, and we have even identified a number of such planets in the so-called ‘habitable zone’ around their parent stars – the goldilocks distance from the star where liquid water can exist on the planet’s surface. Life on Earth can be found just about everywhere there’s water, and finding water on exoplanets may be a giant step towards discovering extraterrestrial life.

Our Project Blue mission is conceived to photograph an Earthlike exoplanet in the Alpha Centauri system, our nearest stellar neighbor; to return a “pale blue dot” image by 2022. The mission concept relies on several key technologies to make such a daunting observation possible and affordable. Project Blue employs a telescope with a ~45 cm diameter main optic. This is similar to the modest space telescopes now being manufactured for large Earth imaging constellations used for a wide variety of commercial and governmental needs such as for tracking ships, precision agriculture, fighting wildfires, and intelligence gathering. Project Blue then uses a technique called coronagraphy to


 

dim the light from the parent star in order to see its much fainter planetary companions. The figure below shows a schematic of a telescope.

A key technology for keeping the images very sharp and stable so hat the star’s light can be suppressed to reveal its planets is the deformable mirror. Imagine ten thousand little actuators attached to a flexible mirror the size of a cracker that can shape the mirror’s surface to compensate for slight optical imperfections in the telescope. Fed by the deformable mirror, the telescope plus coronagraph system then delivers a processed, high-precision image to a sensitive, ultra-low-noise detector that records the picture in a digital photograph. Such devices have many other uses, both terrestrial and space-based, ranging from materials characterization to medical imaging to national security applications.

Dr. Jon A. Morse is a former Senior Policy Analyst in the Division of Physical Sciences & Engineering at the Office of Science & Technology Policy in the Executive Office of the President (2006-2007), former director of the Astrophysics Division in the Science Mission Directorate at NASA Headquarters (2007-2011), former Professor of Physics, Applied Physics & Astronomy and Associate Vice President for Research for Physical Sciences & Engineering at the Rensselaer Polytechnic Institute (2011-2013), and current Research Associate in the Solar, Stellar, and Planetary Sciences Division at the Harvard-Smithsonian Center for Astrophysics. Since 2013 he has been the Chief Executive Officer of the non-profit BoldlyGo Institute, which is dedicated to advancing basic research and discovery from space with privately funded missions and public-private partnerships.

Good News in Technology: 2016 was a great year for developments in science and technology.

We pulled out some of our favorite "good news" stories here, and welcome your feedback on what you see as the most exciting developments for 2017.

Amazon Go, A grocery store that allows customers to walk in, take what they want, and walk outwithout going through a formal check-out process — was debuted in December. Using video and sensor fusion technology and linking payments to customer’s phones enables this unique store. The first store is located in Seattle and is only for Amazon employees, but will open to the public early this year.

Brain Implants provided hope to people suffering from paralysis. In one case, a 19 year old man from Ohio who was paralyzed from the neck down was able to play Guitar Hero using brain implants developed by Battelle and The Ohio State University Wexner Medical Center.

Artificial Intelligence continued to make inroads into multiple applications like self driving cars, factories, stores, and even gaming (Google’s AI, AlphaGo, recently won 4 of 5 matches with Go the Korean champion).

Solar Impulse 2, a one-man solar powered airplane spent 23 days in the air in an around-the-world journey of nearly 25,000 miles.

Gravitational Waves, predicted by Einstein 100 years ago were proven to exist.

Solar Cells developed at the University of South Wales reached a new record of 34.5% efficiency. This broke the old record by over 40%.

Super Strong Silk was created by feeding silkworms graphene (a substance 200 time stronger than steel). Silk produced in this manner was twice as tough as a normal. Further, silk made in this manner was also able to conduct electricity.

The Antarctic Ozone Hole was found to be healing as a result of international efforts to reduce ozone depleting gasses.

Proxima B, a potential earth-like planet, was recently discovered only 4.24 light years away from Earth, orbiting Proxima Centauri. Proxima B is located in the “Goldilocks Zone” and has the potential of having life sustaining water.

 

 

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Kurt Estes

Director,
Sikich Investment Banking

Contact:

Ph: 312.648.6665  |  Email

 

Securities are offered through Sikich Corporate Finance LLC, a registered broker/dealer with the Securities and Exchange Commission and a member of FINRA and SIPC.

This document is a result of the efforts of Sikich Investment Banking (“Sikich”) and is for informational purposes only. It is not intended as an offer or solicitation with respect to the sale or purchase of a security. The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of Sikich. Sikich shall not be liable for damages resulting from the use of or reliance upon the information presented herein.


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