technology & business...

Strategic Market Insights – Q1 2017 Report

Technology & Business Services

www.g2cap.com 2

G2 Capital Advisors is pleased to present its Technology & Business Services industry update for Q1 2017,

providing commentary and analysis on M&A and market trends within the Technology & Business Services

industry. We hope you find this report helpful and encourage you to contact us directly if you would like to

discuss our perspective on the current market environment, trends, or our relevant industry experience.

G2 OverviewInvestment Banking and Restructuring Advisory

THIRTY-FIVE professionals

across SIX offices

FOUR Industry Practice Groups

Transportation & Logistics / Supply Chain

Industrials / Manufacturing

Technology / Business Services

Aerospace & Defense / Security

FIVE Service Offerings

Securities

Sell-Side

Buy-Side

Operational

Restructuring

Financial

Restructuring

G2 offers clients an operational, experience-based approach within

each of its practice sectors.

G2 is focused in four sectors; each practice group headed by a leader with 20+ years of C-level operating

experience. G2’s managing directors have navigated all stages of the corporate lifecycle, from growth to

maturity, and apply that experience to provide advisory services to our clients.

Sector-Focused; Experience-Based

Transportation &

Logistics / Supply Chain

Industrials /

Manufacturing

Technology /

Business Services

Aerospace & Defense /

Security

Led by Ron Lentz Led by Jack Shields Led by Matt Konkle Led by Bob Kinder

▪ Freight Forwarding

▪ Trucking / Final Mile

▪ Warehousing / Distribution

▪ Third Party Logistics (3PL)

▪ e-Commerce Fulfillment

▪ Manufacturing / Distribution

▪ Flooring

▪ Plastics / Packaging

▪ Consumer Products

▪ Metals

▪ Tech-enabled Services

▪ BPO

▪ Managed Services

▪ Internet & Digital Media

▪ Business Services

▪ Cyber Security

▪ Defense Robotics

▪ UAV, C4ISR, Hardware

▪ Aerospace Electronics

▪ Aerospace Components

G2 Overview

www.g2cap.com 3

Company Title Role

COO

Led the reorganization of the company’s e-Commerce fulfillment,

customer care and supply chain services business units following the

acquisition of Fifth Gear.

President

End-to-end e-Commerce services company specializing in complex

order fulfillment and BPO. Led the go-to-market strategy and growth of

the business before selling for $65 million or 15x earnings.

President

Enterprise software company specializing in order management

technology for direct-to-consumer retailers. Transformed the business

through multiple acquisitions and launch of offshore operations in India.

CFO

Pioneer in early warning notification software and services for Public

Safety industry. Led the sale of the company to Golden Gate Capital

for 3x trailing twelve month revenue.

Controller

Enterprise software company that created the Enterprise Marketing

Management (EMM) category. Acquired by Teradata Corporation for

$550M or 6x trailing twelve month revenue.

Technology & Business ServicesMatt Konkle, Managing Director

Matt Konkle brings 20+ years of C-level operating experience to G2’s Technology & Business Services

practice group. Deep industry background in e-Commerce, supply chain and logistics, enterprise

software, and business services, with operational expertise in tech-enabled services, business process

outsourcing and managed services.

Matt KonklePractice Leader

Technology & Business

Services

Market UpdateG2 Insights

Below highlights a few key trends in the Technology & Business Services industries:

▪ e-Commerce sales grew 14.6% in the first quarter of 2017 compared to the same period of 2016. In

addition to disrupting traditional retail, e-Commerce growth is driving innovation across its technology and

service providers. Consumer demand for faster, cheaper service and personalized brand experience allows

service providers that leverage technology, data and process automation to gain a competitive advantage.

▪ More businesses are implementing Cloud managed services to reduce the operational and infrastructural

costs of their core business processes. The managed mobility services segment is expected to grow at a

higher rate than business, network, security, and data services over the next five years due to adoption of

the Internet of Things (IoT) and Bring Your Own Device (BYOD).

▪ Despite increasing global economic concern and talent shortages, staffing and recruiting professionals

remain bullish for 2017 and expect performance similar to 2016. Improving revenue growth and overall

profitability are key priorities for staffing firms, which are leveraging M&A to expand geographically, add

complementary services and diversify their client base.

▪ Many industries are slated for regulatory changes under the new administration, creating opportunity for

consulting and professional services firms, particularly midmarket firms with expertise in niche

markets. Freelance and network-based models are redrawing industry lines, pushing traditional

consultancies to collaborate and explore new business models. Competing for talent, firms are turning to

technology-based solutions to enable their consulting capabilities and enhance recruitment.

www.g2cap.com 4

Technology & Business ServicesM&A Activity – Middle Market

M&A transaction multiples are the median North American M&A activity independent of target / acquirer industry and enterprise

value. The dataset has been restricted to multiples between 0.0x and 30.0x EBITDA; sourced through Pitchbook’s 2017 Q1 Report.

The U.S. Middle Market as shown in this chart has been defined as companies with an enterprise value between $25MM and

$1,000MM, and headquartered in the United States.

M&A Transaction Multiples

U.S. Middle Market Private Equity Activity

Data sourced through PitchBook 2017 Q1 Report

Total deal activity has remained steady since Q2 2013; overall deal multiples remain strong. Though

there has been some pullback in M&A, debt remains a strong driver of transaction valuations.

6.1

x

4.1

x

4.9

x

5.7

x

4.9

x

5.2

x

4.0

x 5.8

x

4.7

x

5.7

x

5.9

x

6.2

x

4.9

x

4.8

x

5.8

x

5.4

x

5.9

x

4.3

x

2.6

x

3.8

x 3.6

x

3.7

x

3.4

x

4.2

x

4.0

x

4.7

x 4.3

x

4.8

x

3.3

x

5.0

x

4.8

x

5.7

x

4.7

x

3.9

x

10.4x

6.7x

8.8x9.3x

8.6x 8.6x8.2x

9.8x9.3x

10.0x10.7x

9.5x9.9x

9.6x

11.5x

10.1x9.8x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

2013 2014 2015 2016 2017

Multip

les o

f E

BIT

DA

Debt/EBITDA Equity/EBITDA Valuation/EBITDA

$71

$59

$81

$89

$115

$104

$115

$113

$94

$102

$100

$104

$89

$96

$85

$87

$91

$364$333

$505 $507

$595

$518

$566

$507 $502$537

$571 $570 $559 $553

$469

$541

$422

0

100

200

300

400

500

600

700

$0

$20

$40

$60

$80

$100

$120

$140

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

2013 2014 2015 2016 2017*

Deal Value ($B) # of Deals Closed

Deal V

alu

e (

$B

N)

To

tal D

eal C

ount

www.g2cap.com 5

Selected Industry Deals 2017 Q1

Key Trading Statistics

Several notable transactions have already been completed or announced in the Technology &

Business Services industry through 2017 Q1. G2 has outlined select transactions below, followed by

a more comprehensive list on the following tables.



Sector Summary in Millions USD (converted where necessary)

Data sourced from S&P Capital IQ on Friday, March 31, 2016

FY 20171 LTM2

SectorNumber of

Companies

Median Enterprise

Value (MM)

Median

Revenue

Growth

Median

EBITDA

Growth*

EV /

Revenue

EV /

EBITDA

BPO 17 6,013 8.2% 12.0% 2.6x 12.6x

Business Intelligence 10 5,884 31.1% 10.8% 5.5x 17.4x

Consulting Services 15 1,199 6.1% 23.4% 1.8x 12.5x

Cloud Software &

Services13 6,089 27.6% 58.5% 6.3x NM

e-Commerce Services 8 30,045 19.0% 62.0% 4.1x 20.8x

Mobile Wireless 20 2,162 6.8% 13.5% 2.5x 9.4x

1 Estimated – 2017 Fiscal Year2 LTM Multiples as at Friday, March 31, 2016

* YoY growth calculations exclude companies with negative margins in either period

considered.

▪ Innosight acquired by Huron (March 2017) – Innosight Holdings LLC, a growth strategy firm focused

on helping companies navigate disruptive change, enable innovation and manage strategic

transformation has been acquired by Huron, a global professional services firm. Huron and

Innosight will use their strategic, operational and technology capabilities to help clients across

multiple industries develop pioneering solutions to address disruption and achieve sustained

growth. The transaction is valued at $134MM, with $100MM cash at close and the remainder in an

earn out structure.

▪ eNom acquired by Tucows Inc. (January 2017) – eNom, a wholesale domain name registrar has

been acquired by Tucows, a provider of network access, domain names and other Internet services

from Rightside, a leading provider of domain name services for $83.5MM. The transaction will give

Tucows a total network of over 40,000 resellers globally and 29 million domains under

management, making it the second largest domain registrar in the world.

▪ DSM Computing Solutions acquired by Apogee IT Services (January 2017) – DSM Computing

Solutions Inc., an IT services provider and pioneer in cloud computing based in Toronto, Ontario

has been acquired by Apogee IT Services, a managed IT services provider that serves over 375

small and medium-sized businesses across the Northeast. The addition will continue the strategic

extension of Apogee’s IT service offerings across northeastern North America. No transaction

valuations are disclosed.

www.g2cap.com 6

Technology & Business ServicesRecent M&A Activity – Pending & Closed

BPO



Date Closed Target Acquirer / InvestorImplied Enterprise

Value (MM)EV / EBITDA EV / Revenue

PendingUrban Fulfillment Services,

LLCHCL Technologies Limited - - -

Pending EDL Consulting, Inc. Simplus - - -

Pending Ciber, Inc. AMERI Holdings, Inc. $97.9 NM 0.1x

PendingRagingWire Data Centers,

Inc.

NTT Communications

Corporation- - -

PendingPreferred Systems Solutions,

Inc.STG Group, Inc. $119.5 - -

Pending SourceHOV LLC HGM, LLC - - -

Pending Novitex Enterprise Solutions Apollo Global Management - - -

Apr-17 Nonik Technologies, Inc.Doberman Technologies

LLC- - -

Mar-17Geneva Technical Services,

LLCHalo Group, LLC - - -

Mar-17 TalentBridge Holdings, LLCEmployee Relations

Associates, Inc- - -

Mar-17 ATCG Solutions, LLC AMERI Holdings, Inc. - - -

Mar-17 Maintech, Incorporated Oak Lane Partners, LLC $18.3 - -

Mar-17Network Access Products,

Inc.

Comm-Works Holdings,

LLC- - -

Mar-17 Information Innovators Inc. Salient CRGT, Inc. - - -

Feb-17 Orion Financial Group, Inc. MetaSource, LLC - - -

Feb-17 Titan Computer Services, Inc. Undisclosed $0.1 - 13.1x

Jan-17 Congruity LLC Procurri LLC - - -

Jan-17DSM Computing Solutions

Inc.Apogee IT Services, Inc. - - -

Jan-17 Navantis, Inc. Datavail Corporation - - -

Jan-17 True North Service, Inc. LogiGear Corporation - - -

Jan-17 Tech-Pro, Inc.Artech Information

Systems LLC- - -

Jan-17 Payroll Specialties NW, Inc. Asure Software, Inc. $3.5 NM 2.1x

Jan-17 Incepture Inc. HM Health Solutions, Inc. - - -

Jan-17Personnel Management

Systems, Inc.Asure Software, Inc. $5.0 - -

Dec-16 Stratiform, Inc. PCM, Inc. $2.9 - 0.7x

www.g2cap.com 7






Pending Cloud Cruiser, Inc.Hewlett Packard Enterprise

Company- - -

Mar-17 AppDynamics, Inc. Cisco Systems, Inc. $3,902.9 NM 18.9x

Jan-17 MarketSight LLC Reimagine Holdings Group - - -

Jan-17 Omniata Inc. Activision Blizzard, Inc. - - -

Jan-17 DestiMetrics, LLCSterling Valley Systems,

Inc.- - -

Jan-17 Yodil, Inc. Duck Creek Technologies - - -

Business Intelligence

Consulting ServicesDate Closed Target Acquirer / Investor

Implied Enterprise


Pending Fuld & Company, Inc.Accretio Investments Pte.

Ltd.$3.8 - -

Pending BBVI Consulting, LLCMedical Innovation

Holdings, Inc.- - -

PendingFarmers Edge Precision

Consulting Inc.

Hamblin Watsa Investment

Counsel Ltd.- - -

Pending KPFF, LLCApple Growth Partners,

Inc.- - -

Mar-17First Annapolis Consulting,

Inc.Accenture plc - - -

Mar-17Magnus Management Group,

LLCNXTKey Corporation - - -

Mar-17Geneva Technical Services,

LLCHalo Group, LLC - - -

Mar-17Northeast Association

Management, Inc.

York Risk Services Group,

Inc.- - -

Mar-17 Solutions-IES, Inc.Draper Aden Associates,

Inc.- - -

Mar-17Consulting Services Support

CorporationCardiff International, Inc. $1.5 - -

Mar-17AdvancedEPM Consulting,

Inc.Datavail Corporation - - -

Mar-17 OverMont Consulting, LLC Whitley Penn LLP - - -

Mar-17 Innosight LLCHuron Consulting Group

Inc.$134.3 - -

Feb-17 Eclipsecurity, LLC HALOCK Security Labs - - -

Feb-17 ORTECH Consulting Inc. Kontrol Energy Corp. $3.5 4.9x 0.9x

Feb-17Sunpark Consulting Group,

Inc.NetAccess Systems, Inc. - - -

Jan-17 M&S Technologies, Inc. Kudelski Security - - -

Jan-17 CynergisTek, Inc. Auxilio, Inc. $31.7 6.3x 2.1x

Jan-17 BEworks Inc. kyu - - -

Jan-17Natural Resource

Technology, Inc.O'brien & Gere Limited - - -

Jan-17 R.A.S. Associates, Inc. Perficient, Inc. - - -

Jan-17 Alcyon, Inc. Alutiiq, LLC - - -

www.g2cap.com 8




Cloud & Software Services



Pending Halogen Software Inc.Saba Software, Inc.;

6883621 Canada Inc.$170.6 26.9x 2.4x

Pending BlueCat Networks, Inc.Madison Dearborn

Partners, LLC- - -

PendingProSmart Sports

Development, Inc.Sora Capital Corp. $6.2 - -

Pending ClicksMob, Inc.ExciteAd Digital Marketing

Ltd$5.1 - 0.3x

Pending AudioEye, Inc. Undisclosed $13.7 NM 13.7x

Pending iMicron Web Services LLC. Techwave Consulting Inc. $1.1 - -

Pending GreedyRates.ca Inc. XLMedia PLC $9.3 - -

Apr-17 Ifwe Inc.MeetMe, Inc. (nka:The

Meet Group, Inc.)$60.0 - 1.4x

Apr-17 Veracode, Inc. CA, Inc. $614.0 - -

Feb-17 GreatDay, Inc., PotCircles South American Gold Corp. $0.9 - -

Feb-17 Infoaxe, Inc. Revcontent, LLC $30.0 - -

Feb-17 DeviantArt, Inc. Wix.com Ltd. $36.0 - -

Jan-17 Axiometrics Inc. MPF Research Inc. $80.0 - -

Jan-17Performance Assessment

Network, Inc.PSI Services LLC $271.0 - -

Jan-17 eNom Inc. Tucows Inc. $83.5 61.6x 0.5x

Jan-17 ShareASale.com, Inc. Digital Window Ltd. $45.0 - 3.2x

Jan-17 Avention, Inc.The Dun & Bradstreet

Corporation$150.0 - 2.5x

Jan-17 Meetoou LLC Net2Phone, Inc. - - -

Jan-17 DestiMetrics, LLCSterling Valley Systems,

Inc.- - -

Jan-17 Wow Media Products, Inc. Undisclosed - - -

Jan-17 LocateAR, LLC The Glimpse Group, Inc. - - -

Jan-17 iGuideCA San Diego DigitalRealtyX, Inc. - - -

www.g2cap.com 9




e-Commerce Services



Pending

Quotit Corporation And

HealthCompare Insurance

Services, Inc.

National General Holdings

Corp.- - -

Pending TaskStream, LLC Tk20, Inc. - - -

Mar-17 GiveForward Inc. YouCaring Dot Com, LLC - - -

Mar-17 NetSource Communications Venture Technologies - - -

Mar-17 Dog Vacay, Inc. A Place for Rover, Inc. - - -

Mar-17 GiveForward Inc. YouCaring Dot Com, LLC - - -

Mar-17 comparehotels.online eMedia Group Inc. - - -

Mar-17 MyBuilder Limited HomeAdvisors - - -

Feb-17 HomeStars HomeAdvisor - - -

Feb-17 Tilt.com, Inc. Airbnb, Inc. - - -

Feb-17 LiftMetrix, Inc. HootSuite Media Inc.

Feb-17 CommonKindness, Inc. makeena, inc. - - -

Jan-17 Tiketscript BV Eventbrite - - -

Jan-17 CrowdRise, Inc. GoFundMe, Inc - - -

Jan-17 CameraLends LLC KitSplit Inc. - - -

Jan-17 Limos.com, Inc. On Demand iCars, Inc. - - -

Mobile Wireless



Pending Pareteum Corporation Undisclosed $29.8 NM 2.3x

Pending Lumos Networks Corp.EQT Partners AB; EQT

Infrastructure, L.P.$869.1 10.3x 4.2x

Pending YourLink Inc.Xplornet Communications

Inc.$21.5 - -

Feb-17 Fonality Inc. NetFortris, Inc. - - -

Jan-17Detel Computer Solutions Llc

And Broadplex LLC

Conterra Ultra Broadband,

LLC- - -

Jan-17Midwest Underground

Solutions, Specific AssetsFTE Networks, Inc. - - -

www.g2cap.com 10

Technology & Business ServicesPublic Trading Metrics – BPO

IndustryEnterprise

Value

Market

CapCash

LTM

Revenue

LTM

EBITDAEBITDA Margin LT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean 17,198 16,964 1,001 6,316 1,309 17.2% 1,659 1.6x 2.6x 12.6x

Median 6,013 6,857 423 2,914 654 19.8% 612 1.4x 2.2x 12.5x

Company Ticker

Size (Millions USD)

EBITDA Margin

Leverage Valuation

Enterprise

Value

Market

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Accenture plc NYSE:ACN 71,773 74,336 3,239 33,757 5,721 16.9% 25 0.0x 2.1x 12.5x

Automatic Data Processing, Inc. NASDAQGS:ADP 45,219 45,963 2,705 12,051 2,733 22.7% 2,003 0.7x 3.8x 16.5x

Cognizant Technology

Solutions CorporationNasdaqGS:CTSH 31,935 36,226 2,034 13,487 2,668 19.8% 797 0.3x 2.4x 12.0x

Convergys Corporation NYSE:CVG 2,148 2,000 139 2,914 365 12.5% 297 0.8x 0.7x 5.9x

Equifax Inc. NYSE: EFX 19,110 16,509 129 3,145 1,123 35.7% 2,087 1.9x 6.1x 17.0x

ExlService Holdings, Inc. NasdaqGS:EXLS 1,420 1,601 213 686 99 14.4% 35 0.4x 2.1x 14.3x

Fidelity National Information

Services, Inc.NYSE:FIS 36,076 26,177 683 9,241 2,270 24.6% 10,146 4.5x 3.9x 15.9x

Genpact Limited NYSE:G 5,407 4,927 423 2,571 421 16.4% 698 1.7x 2.1x 12.9x

Global Payments Inc. NYSE:GPN 16,120 12,303 1,163 3,776 989 26.2% 4,261 4.3x 4.3x 16.3x

Infosys Limited NSEI:INFY 31,357 36,060 3,489 10,208 2,774 27.2% NA NA 3.1x 11.3x

StarTek, Inc. NYSE:SRT 171 137 1 307 15 5.0% 1 0.1x 0.6x 11.0x

Sykes Enterprises,

IncorporatedNasdaqGS:SYKE 1,240 1,240 267 1,460 164 11.2% 267 1.6x 0.8x 7.6x

TeleTech Holdings, Inc. NasdaqGS:TTEC 1,528 1,358 55 1,275 158 12.4% 217 1.4x 1.2x 9.7x

West Corporation NasdaqGS:WSTC 5,022 2,035 183 2,292 654 28.5% 3,130 4.8x 2.2x 7.7x

Wipro Limited BSE:507685 16,558 19,224 813 8,495 1,698 20.0% 303 0.2x 1.9x 9.8x

Wirecard AG XTRA:WDI 6,013 6,857 1,407 1,117 310 27.8% 612 2.0x 5.4x 19.4x

WNS (Holdings) Ltd. NYSE:WNS 1,276 1,429 71 586 91 15.5% NA NA 2.2x 14.1x


Charts show average daily multiples for each year


15.0x

10.7x

8.3x

10.5x11.0x

12.0x

11.2x

11.6x

13.6x13.6x13.1x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

EV

/ E

BIT

DA

S&P 500

3.5x

2.1x

1.7x

2.3x2.2x

1.9x

2.2x2.4x

2.7x 2.7x 2.7x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

EV

/ T

OT

AL

RE

VE

NU

E

S&P 500

www.g2cap.com 11

Technology & Business ServicesPublic Trading Metrics – Business Intelligence

IndustryEnterprise

Value

Market

CapCash

LTM

Revenue

LTM


LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean 8,376 7,840 340 2,024 582 18.9% 1,367 3.3x 5.5x 17.4x

Median 5,884 5,927 187 1,787 150 -0.3% 1,126 2.7x 6.7x 16.9x

Company Ticker

Size (Millions USD)

EBITDA Margin

Leverage Valuation

Enterprise

Value

Market

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

CACI International Inc NYSE:CACI 4,155 2,861 54 4,331 377 8.7% 1,231 3.3x 1.0x 11.0x

FireEye, Inc. NasdaqGS:FEYE 2,045 2,238 163 720 (219) -30.5% 751 -3.4x 2.8x NM

Gartner, Inc. NYSE:IT 9,181 8,961 1,228 2,512 396 15.8% 1,606 4.1x 3.7x 23.2x

IHS Markit Ltd. NasdaqGS:INFO 20,541 16,909 155 3,031 871 28.7% 3,146 3.6x 6.8x 23.6x

New Relic, Inc. NYSE:NEWR 1,761 1,957 88 263 (42) -16.1% NA NA 6.7x NM

Proofpoint, Inc. NasdaqGM:PFPT 3,189 3,220 382 410 (33) -8.2% 372 -11.1x 7.8x NM

Science Applications

International CorporationNYSE:SAIC 4,079 3,242 210 4,450 334 7.5% 1,022 3.1x 0.9x 12.2x

Splunk Inc. NasdaqGS:SPLK 7,614 8,611 421 950 (300) -31.6% NA NA 8.0x NM

Verisk Analytics, Inc. NasdaqGS:VRSK 15,748 13,500 155 2,005 934 46.6% 2,274 2.4x 7.9x 16.9x

Workday, Inc. NYSE:WDAY 15,444 16,906 540 1,569 (274) -17.4% 534 -2.0x 9.8x NM




22.9x 23.1x

15.4x

24.3x

22.8x

19.6x

15.9x

17.1x18.0x

18.1x 18.4x

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

EV

/ E

BIT

DA

S&P 5004.6x

4.9x

3.7x

5.2x 5.4x

6.8x

9.1x 9.3x

8.0x

5.6x 5.6x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

10.0x

EV

/ T

OT

AL

RE

VE

NU

E

S&P 500

www.g2cap.com 12

Technology & Business ServicesPublic Trading Metrics – Consulting Services

IndustryEnterprise

Value

Market

CapCash

LTM

Revenue

LTM


LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean 7,995 8,094 811 4,429 665 12.3% 692 1.5x 1.8x 12.5x

Median 1,199 1,072 54 726 124 13.0% 135 1.0x 1.4x 11.7x

Company Ticker

Size (Millions USD)

EBITDA Margin

Leverage Valuation

Enterprise

Value

Market

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Booz Allen Hamilton Holding

CorporationNYSE: BAH 6,521 5,307 350 5,647 520 9.2% 1,485 2.9x 1.2x 12.5x

Accenture plc NYSE:ACN 71,773 74,336 3,239 33,757 5,721 16.9% 25 0.0x 2.1x 12.5x

Cap Gemini S.A.ENXTPA:CAP

16,860 15,167 1,879 12,539 1,582 12.6% 3,273 2.1x 1.3x 10.7x

CRA International, Inc. NasdaqGS:CRAI 249 302 54 325 27 8.2% NA NA 0.8x 9.3x

Ecology & Environment, Inc. NasdaqGM:EEI 33 43 12 102 5 5.1% 0 0.0x 0.3x 6.3x

Exponent, Inc. NasdaqGS:EXPO 1,351 1,524 87 300 66 22.1% NA NA 4.5x 20.3x

Huron Consulting Group Inc. Nasdaq: HURN 1,169 894 17 726 128 17.6% 292 2.3x 1.6x 9.2x

Navigant Consulting, Inc. NYSE:NCI 1,199 1,072 8 939 142 15.1% 135 1.0x 1.3x 8.4x

NV5 Global, Inc. NasdaqCM:NVEE 395 398 36 224 26 11.6% 22 0.8x 1.8x 15.2x

Resources Connection, Inc. NasdaqGS:RECN 492 498 45 587 46 7.9% 48 1.0x 0.8x 10.6x

TechnipFMC plc NYSE:FTI 11,431 15,164 5,948 8,313 1,085 13.0% 1,573 1.5x 1.4x 10.5x

The Advisory Board Company Nasdaq: ABCO 2,377 1,883 91 803 124 15.4% 536 4.3x 3.0x 19.2x

The Dun & Bradstreet

CorporationNYSE: DNB 5,261 3,983 353 1,704 450 26.4% 1,595 3.5x 3.1x 11.7x

The Hackett Group, Inc. NasdaqGS:HCKT 556 569 20 260 39 15.1% 7 0.2x 2.1x 14.1x

Willdan Group, Inc. Nasdaq: WLDN 255 271 23 209 15 7.1% 2 0.1x 1.2x 17.2x




14.2x

9.0x

7.6x

13.3x

9.4x

8.8x

10.0x

12.8x13.5x

11.4x 11.6x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

EV

/ E

BIT

DA

S&P 500

2.0x

1.4x

1.0x1.1x

1.2x 1.2x1.3x

1.5x

1.7x 1.7x 1.7x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

EV

/ T

OT

AL

RE

VE

NU

E

S&P 500

www.g2cap.com 13

Technology & Business ServicesPublic Trading Metrics – Cloud Software & Services

IndustryEnterprise

Value

Market

CapCash

LTM

Revenue

LTM


LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean 48,736 52,040 1,204 8,495 4,175 14.4% 6,710 5.2x 6.5x NM

Median 6,089 5,731 401 1,391 48 3.8% 926 1.1x 7.0x NM

Company Ticker

Size (Millions USD)

EBITDA Margin

Leverage Valuation

Enterprise

Value

Market

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Box, Inc. NYSE:BOX 2,011 2,113 177 399 (115) -28.9% 40 -0.3x 5.0x NM

Cornerstone OnDemand, Inc. NasdaqGS:CSOD 2,140 2,203 83 423 (46) -10.9% 238 -5.2x 5.1x NM

IAC/InterActiveCorp NasdaqGS:IAC 6,089 5,731 1,329 3,140 420 13.4% 1,582 3.8x 1.9x NM

Microsoft Corporation NasdaqGS:MSFT 475,536 508,935 8,468 85,688 27,738 32.4% 59,306 2.1x 5.5x NM

Qualys, Inc. NasdaqGS:QLYS 1,134 1,378 87 198 48 24.2% NA NA 5.7x NM

Salesforce.com, inc. NYSE:CRM 58,862 58,362 1,607 8,392 505 6.0% 2,008 4.0x 7.0x NM

ServiceNow, Inc. NYSE:NOW 14,303 14,695 401 1,391 (69) -4.9% 508 -7.4x 10.3x NM

Twilio Inc. NYSE:TWLO 2,221 2,527 306 277 (34) -12.3% NA NA 8.0x NM

Twitter, Inc. NYSE:TWTR 8,703 10,791 1,192 2,483 95 3.8% 1,560 16.5x 3.5x NM

Tyler Technologies, Inc. NYSE:TYL 5,681 5,727 36 756 159 21.1% 10 0.1x 7.5x NM

Workday, Inc. NYSE:WDAY 15,444 16,906 540 1,569 (274) -17.4% 534 -2.0x 9.8x NM

Yahoo! Inc. NasdaqGS:YHOO 38,905 44,391 1,329 5,409 261 4.8% 1,317 5.1x 7.2x NM

Zendesk, Inc. NYSE:ZEN 2,534 2,759 94 312 (84) -27.0% NA NA 8.1x NM



*Multiples less than 30.0x included


15.5x

11.1x

9.8x

11.8x10.7x

20.5x20.3x

26.1x26.6x

28.9x

22.5x

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

35.0x

EV

/ E

BIT

DA

S&P 5004.8x

3.6x

2.5x

3.6x

5.7x

7.1x

10.8x10.6x

9.0x

7.2x 7.1x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

EV

/ T

OT

AL

RE

VE

NU

E

S&P 500

www.g2cap.com 14

Technology & Business ServicesPublic Trading Metrics – e-Commerce Services

IndustryEnterprise

Value

Market

CapCash

LTM

Revenue

LTM


LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean 100,980 101,940 5,484 24,578 3,465 14.4% 4,864 2.2x 4.1x 20.8x

Median 30,045 27,714 2,047 9,059 1,915 12.8% 4,975 1.8x 3.4x 20.0x

Company Ticker

Size (Millions USD)

EBITDA Margin

Leverage Valuation

Enterprise

Value

Market

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Alibaba Group Holding Limited NYSE: BABA 268,330 269,575 20,876 22,987 8,491 36.9% 11,159 1.3x 11.7x NM

Amazon.com, Inc. Nasdaq: AMZN 417,463 423,031 15,440 142,573 12,221 8.6% 7,691 0.6x 2.9x NM

Baidu, Inc. Nasdaq: BIDU 55,111 59,949 2,115 10,402 2,728 26.2% 4,975 1.8x 5.3x 20.2x

eBay Inc. Nasdaq: EBAY 38,303 36,492 1,979 9,059 2,935 32.4% 6,756 2.3x 4.2x 13.1x

Etsy, Inc. Nasdaq: ETSY 964 1,234 195 380 28 7.4% NA NA 2.5x 34.1x

EVINE Live Inc. Nasdaq: EVLV 131 78 33 666 14 2.1% 82 5.8x 0.2x 9.2x

Expedia, Inc. Nasdaq: EXPE 21,787 18,936 2,503 9,058 1,102 12.2% 3,171 2.9x 2.4x 19.8x

TripAdvisor, Inc. Nasdaq: TRIP 5,747 6,222 731 1,500 202 13.5% 210 1.0x 3.8x 28.5x



*Multiples less than 30.0x included


19.3x

17.7x 18.8x

9.6x

15.5x15.9x

15.2x

19.3x18.2x

20.2x20.0x

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

EV

/ E

BIT

DA

S&P 500

3.2x

7.8x

4.8x

8.0x

7.5x

5.1x4.9x

8.1x

5.9x

4.6x 4.6x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

EV

/ T

OT

AL

RE

VE

NU

E

S&P 500

www.g2cap.com 15

Technology & Business ServicesPublic Trading Metrics – Mobile Wireless

IndustryEnterprise

Value

Market

CapCash

LTM

Revenue

LTM


LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Mean 44,189 28,482 1,115 19,380 6,050 22.7% 17,729 4.0x 2.5x 9.4x

Median 2,162 1,161 240 670 231 29.3% 1,116 3.2x 2.2x 7.8x

Company Ticker

Size (Millions USD)

EBITDA Margin

Leverage Valuation

Enterprise

Value

Market

CapCash

LTM

Revenue

LTM

EBITDALT Debt

LT Debt /

EBITDA

EV / LTM

Revenue

EV / LTM

EBITDA

Alaska Communications

Systems Group, Inc.Nasdaq: ALSK 256 96 21 227 55 24.0% 175 3.2x 1.1x 4.7x

AT&T Inc. NYSE: T 377,518 255,182 5,788 163,786 49,740 30.4% 117,562 2.4x 2.3x 7.6x

ATN International, Inc. Nasdaq: ATNI 1,146 1,137 270 457 148 32.4% 144 1.0x 2.5x 7.7x

CenturyLink, Inc. NYSE: CTL 32,349 12,883 222 17,470 6,488 37.1% 18,185 2.8x 1.9x 5.0x

Cogent Communications

Holdings, Inc.Nasdaq: CCOI 2,349 1,922 274 438 135 30.9% 560 4.1x 5.4x 17.4x

Consolidated Communications

Holdings, Inc.Nasdaq: CNSL 2,556 1,185 27 743 263 35.4% 1,366 5.2x 3.4x 9.7x

Fairpoint Communications, Inc. Nasdaq: FRP 1,323 449 35 824 444 53.9% 898 2.0x 1.6x 3.0x

General Communication, Inc. Nasdaq: GNCM.A 2,154 746 19 934 273 29.2% 1,333 4.9x 2.3x 7.9x

Gogo Inc. Nasdaq: GOGO 1,299 949 117 597 79 13.2% 801 10.1x 2.2x 16.4x

Hawaiian Telcom Holdco, Inc. Nasdaq: HCOM 543 264 16 393 110 28.0% 290 2.6x 1.4x 4.9x

Iridium Communications Inc. Nasdaq: IRDM 2,186 940 371 434 226 52.1% 1,657 7.3x 5.0x 9.7x

NII Holdings, Inc. Nasdaq: NIHD 556 131 257 985 32 3.2% 216 6.8x 0.6x 17.4x

ORBCOMM Inc. Nasdaq: ORBC 807 682 25 187 37 19.7% 149 4.0x 4.3x 22.0x

Shenandoah

Telecommunications CompanyNasdaq: SHEN 2,170 1,377 36 535 236 44.0% 797 3.4x 4.1x 9.2x

Silicon Motion Technology

CorporationNasdaq: SIMO 1,396 1,649 274 556 147 26.4% NA NA 2.5x 9.5x

Spok Holdings, Inc. Nasdaq: SPOK 264 390 126 180 37 20.4% NA NA 1.5x 7.2x

Sprint Corporation NYSE: S 65,866 34,609 3,707 32,879 9,633 29.3% 30,759 3.2x 2.0x 6.8x

Telephone and Data Systems,

Inc.NYSE: TDS 5,072 2,920 900 5,104 917 18.0% 2,433 2.7x 1.0x 5.5x

T-Mobile US, Inc. Nasdaq: TMUS 78,292 53,385 5,500 37,242 9,314 25.0% 28,962 3.1x 2.1x 8.4x

Verizon Communications Inc. NYSE: VZ 305,683 198,741 4,307 123,623 42,685 34.5% 112,839 2.6x 2.5x 7.2x




14.8x

6.8x

5.6x

6.9x 6.9x6.4x

14.5x15.0x

13.9x

10.2x

10.0x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

EV

/ E

BIT

DA

S&P 500

3.8x

2.3x

1.9x2.1x 2.1x

1.9x2.1x

2.5x 2.4x 2.4x 2.5x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

4.5x

EV

/ T

OT

AL

RE

VE

NU

E

S&P 500

www.g2cap.com 16

Economic & Industry Trends

Last 5 Year EV / EBITDA Trend by Industry


Data sourced through S&P Capital IQ on Friday, March 31, 2017

Data sourced through S&P Capital IQ on Friday, March 31, 2017

% Change in Personal DPI

200

205

210

215

220

225

230

235

240

245

250

Q1 '07 Q1' 08 Q1 '09 Q1 '10 Q1 '11 Q1 '12 Q1 '13 Q1 '14 Q1 '15 Q1 '16 Q1' 17

Ind

ex 1

982-1

984=

100

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

Q1 '12 Q3 '12 Q1 '13 Q3 '13 Q1 '14 Q3 '14 Q1 '15 Q3 '15 Q1 '16 Q3 '16 Q1 '17

EV

/ E

BIT

DA

^SPX BPO e-Commerce Services

Consulting Services Mobile Wireless Business Intelligence

www.g2cap.com 17

ReferenceContact & Glossary of Terms

For more information about G2, please visit: www.g2cap.com

Our corporate headquarters is located at: 535 Boylston Street, Suite 701, Boston, MA 02116

Boston | Chicago | Indianapolis | Los Angeles | Naples | San Francisco

The information included in this Presentation is not a complete analysis of all material facts regarding any company, industry,

or security and does not constitute investment advice. Opinions expressed or implied by the materials here presented reflect

only the judgement of its author as of the date of the Presentation and is subject to change without notice. The information in

this Presentation has been obtained from sources which G2 generally considers reliable, but we make no representation or

warranty, express or implied, as to the accuracy or completeness of any information herein. This Presentation has been

prepared for informational purposes only and upon the express understanding that it will be used only for the purposes set

forth in the Section captioned G2 Overview above. G2 expressly disclaims any and all liability which may be based on such

information, errors therein or omissions there from. Securities offered through Western International Securities, Inc. Member

FINRA & SiPC. G2 Securities and Western International Securities are separate and unaffiliated entities.

Matt Konkle, Managing Director Jeffrey Unger, CEO

[email protected] [email protected]

317.371.6608617.918.7929

Shubz Chandna, Analyst

[email protected]

617.417.5891

Term Definition

Revenue

Total revenue from the sale of goods and services rendered during the reporting period, in normal course of

business, reduced by sales returns and allowances, and sales discounts. For banks, this item is defined as net

interest income after loan loss provisions

EBITDAEarnings before interest, taxes, depreciation, and amortization. Calculated as Revenue – Expenses, excluding

interest, taxes, depreciation and amortization

Market CapMarket value of a company using most recently reported basic weighted average shares outstanding.

Calculated as Market Price (as of period end) * Basic Weighted Average Shares Outstanding

Long-Term DebtSum of the carrying values as of the balance sheet date of long-term debt with a maturity beyond one year or

the normal operating cycle, if longer

Net DebtNet Debt shows the company’s overall debt situation by netting the value of debts with cash and other similar

liquid assets. Calculated as Total Debt – Cash & Cash Equivalents and Short Term Investments

Enterprise Value

Enterprise Value represents the combined economic value of a company as of the most recent fiscal year end.

Calculated as Diluted Market Capitalization + Total Debt + Minority Interest + Preferred Stock – Cash and Short

Term investments

P/EA valuation ratio of a company stock price compared to its per share earnings. Calculated as Market Price /

Earnings per Share for the last annual period

Tangible Book Value Total Shareholder’s Equity – Goodwill and Intangible Assets

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