The Lyndhurst Partners Review

Transcription

1 The Lyndhurst Partners Review A Summary of Quarterly M&A Activity for IT Professional Service Organizations 2Q, 2014 Published: September, 2014 The Lyndhurst Partners Review Copyright 2003 Lyndhurst Partners, Inc.

2 Table of Contents Slide Title Slide Number Lyndhurst Partners 3 Corporate Overview 4-6 Quarterly Transaction Activity 7 Summary of Transaction Activity 8 Transactions by Sector 9 Transactions by Buyer Ownership Type 10 Transactions by International Influence 11 Transactions by Service Type Transactions by Enterprise Application 14 Transactions by Vertical 15 Performance of Market Indices & Statistics 16 Domestic Stock Market Indices 17 International Stock Market Indices 18 General Market Statistics 19 Articles of Interest 19 Public Comparables 20 IT Consulting: Commercial IT Consulting: Government Offshore Outsourcing IT Staffing Software-as-a-Service 31 Contact Information 32 Lyndhurst Partners Contact Information 33 Lyndhurst Partners Review: 2Q,

3 Lyndhurst Partners

4 Corporate Overview ABOUT LYNDHURST PARTNERS SERVICES Lyndhurst Partners is a Mergers and Acquisitions (M&A) consulting firm serving Information Technology Professional Service Organizations (ITPSOs), exclusively. With a North American focus and global experience, Lyndhurst Partners provides M&A advisory (buy and sell-side) and management consulting services to consulting, offshore, outsourcing, and staffing service providers in the Middle Market. We serve established and emerging IT service companies as advisor and consultant, working together with management in their pursuit of strategic corporate expansion or sale. To our clients, we provide extensive industry knowledge, an established network of existing global relationships, insightful, proprietary research and international transactional experience. Our mission is clear. We desire to be a leading M&A strategic advisor to ITPSOs in the Middle Market. To meet this challenge, Lyndhurst Partners intentionally restricts our commitments to a limited number of clients. This selectivity enables us to devote the attention and resources necessary to pursue our clients objectives vigorously and tenaciously. Lyndhurst Partners positions itself alongside ownership, executive management and investors, embracing clients as strategic partners. In the end both client and advisor measure success similarly; it is the realization of each individual client s specific strategic objective. Lyndhurst Partners is defined by six organizational characteristics: Singular Market Focus, Extensive Industry Knowledge, Established Relational Infrastructure, Efficient Professional Process, Relevant Transactional Experience and Consistent Exemplary Character. If you have interest in learning more about either Lyndhurst Partners or our additional proprietary research please contact us. FOR ADDITIONAL INFORMATION / RESOURCES Randall Snyder, Managing Director Lyndhurst Partners and Dragonfly Capital Partners* 1819 Lyndhurst Avenue, Suite 100 Charlotte, NC Phone: x2# twitter.com/itservicesmanda meetme.so/randallsnyder *All transaction-related services are provided via Dragonfly Capital Partners, LLC. LYNDHURST ADVANTAGE on M&A Strategic Advisory Sell-Side M&A Strategic Advisory Buy-Side Management Consulting Corporate Value Creation For sell-side engagements, Lyndhurst Partners applies a consistent approach, modified appropriately for the unique needs of individual clients, in the evaluation and completion of each initiative. We accurately assess market-driven M&A opportunity, properly benchmark an organization s likelihood of success, effectively leverage established and developing relationships, appropriately advise clients through the process of corporate relationship development, and successfully enable executive-level management to execute a transaction. For buy-side engagements, Lyndhurst Partners combines the competitive intelligence gathering capabilities of a market research firm with the advisory capabilities of a traditional investment bank. We work in partnership with our clients executive management teams and corporate development departments to identify, pre-qualify, and pursue acquisition candidates. Despite the simplicity of the traditional corporate valuation equation (corporate value = annualized revenue or EBITDA * the industry transaction multiple), there exists considerable misunderstanding among business owners regarding premium corporate value. This misunderstanding is based on foundational misconceptions regarding the relationship of corporate value to premium corporate value, as well as the erroneous acceptance of partial truths related to the creation, determination and realization of it. As a consequence, many business owners labor under the false assumption that they, one day, will be provided an opportunity to sell their organization for a premium. Unknowingly, these same owners develop organizations inconsistent with that objective, companies that are frequently out of balance in regards to the predictable and verifiable building blocks of premium value. Through our Corporate Value Creation Practice and proprietary 5e Methodology, we help business owners and executives align their corporate execution strategies with their ultimate objective.exiting at a premium value. Lyndhurst Partners Review: 2Q,

5 Recent Transaction LOS ANGELES, Nov. 12, Cal Net Technology Group, the premier provider of outsourced IT and Unified Communications services to the Southern California SMB market, has announced an investment from Olympic Valley Capital and Boathouse Capital to accelerate its growth. As part of the investment, Zack Schuler, Cal Net's Founder, has bolstered the management team, promoting Luca Jacobellis to the role of President and recruiting Brian Kreiner to the role of Chief Executive Officer. "The IT landscape is constantly in flux, and to adapt to these changes we are making investments in our business, in our people, and in our capabilities to ensure that we continue to grow with our clients. I am extremely excited for our future. The goal is to enhance Cal Net's capabilities significantly, and we are realizing that vision," said Zack Schuler. has been recapitalized by Brian Kreiner brings to Cal Net significant experience growing middle market businesses. He commented, "There is an enormous need in the Southern California area for top-tier expertise that can address the complex IT needs of SMB organizations. Cal Net has built a sterling track record as a partner for these organizations, earning their trust in caring for their critical systems. With the team we have built and the added resources from our investment, Cal Net's future is very bright." Luca Jacobellis, who has led Cal Net's service delivery arm since 2000, remarked "What has made Cal Net special is our ability to couple an unparalleled level of technical expertise with fanatical customer service to ensure that our client's environments are maintained at the highest standards. With this expansion of our team we can continue to deliver an unmatched level of service while growing our offering for our clients." Cal Net has earned the distinction of Microsoft's 2013 Western Region SMB Partner of the Year, is a Microsoft Gold Partner, a ShoreTel Gold Partner, and is one of eight organizations on ShoreTel's advisory board. The group has been named to the World Wide MSP Mentor top 100, is a member of CRN Magazine's Fast Growth 150 List, and is an Ingram Micro top 500 SMB honoree. Additionally, Cal Net has been named as one of the top 100 "best places to work" and "fastest growing private companies" since 2009 by the San Fernando Valley Business Journal and Los Angeles Business Journal. Together, the team plans to rapidly grow the well-respected business by recruiting additional sales and engineering staff, introducing new product and service offerings, and increasing its depth and expertise in its end-markets of focus in current and new territories. Financial Advisory to the Seller Randy Snyder, Managing Partner at Lyndhurst Partners, advised Zack Schuler and Cal Net on the transaction in his capacity as a registered investment banking agent of Dragonfly Capital Partners, LLC. Andrew Apfelberg, Partner at Greenberg Glusker, provided legal counsel. Commenting on his advisory team Zach Schuler stated, As I considered the potential for an investment in Cal Net, it was my desire to identify a strategic partner that would appropriately value both Cal Net s strong financial history as well as it unique opportunity for future growth. Additionally, I wanted to complete a transaction that both enhanced career opportunities for my existing employees and positioned the company well for further success. In identifying and closing a transaction with Olympic Valley Capital and Boathouse Capital, Randy and Andrew did an excellent job in accomplishing those objectives. Throughout the process, I had complete confidence in regards to their industry knowledge, professional capabilities and personal integrity. I feel very fortunate to have assembled and worked with this advisory team. I was very well represented. About Cal Net Technology Group Cal Net Technology Group is the premier provider of outsourced IT and Unified Communications in the Southern California market, servicing organizations with employees. Through its TECManage, COManage, SYSManage service offerings, and ShoreTel implementation and support services, Cal Net excels in tackling the complexities of partially and fully outsourced IT and voice systems implementation and support services with onsite and remote delivery models. Lyndhurst Partners Review: 2Q,

6 Historical Transactions (partial) Has been acquired by Has been acquired by has acquired Has acquired Financial Advisory to the Seller Financial Advisory to the Seller Financial Advisory to the Buyer Financial Advisory to the Buyer Enterprise Network Systems, an igate Captial operating company Has been acquired by has been acquired by has acquired Has merged with Financial Advisory to the Seller Financial Advisory to the Seller Financial Advisory to the Buyer Financial Advisory to Enterprise Network Systems Lyndhurst Partners Review: 2Q,

7 Quarterly Transaction Activity 2Q, 2014

8 Summary of Transaction Activity M&A Transaction Statistics Source: LPI 1 2Q, Q, 2013 Classification April May June Total April May June Total Consulting Offshore 1 1 Outsourcing Staffing Total Commercial Government Summary of Public Comparables Category EV LTM Revenue EV / LTM EBITDA Revenue Growth Source: Yahoo Finance 2Q 14 2Q 13 2Q 14 2Q 13 2Q 14 (yoy) Consulting - Commercial % Large % Medium % Small % Consulting - Government % Large % Medium % Offshore % Large (India) % Medium (India) % Medium (China) % Outsourcing % Large % Medium % SaaS % Staffing % Large % Medium % Small NM NM -0.2% Deals by Geography 1 Target Number Percent Mid Atlantic 2 2% Midwest 17 17% Northeast 22 22% Northwest 3 3% Rocky Mountains 4 4% Southeast 22 22% Southwest 10 10% West 14 14% International 5 5% Unknown 1 1% Total % Acquirer Statistics 1 Acquirer Type Number Percent Public Acquirers % Private Acquirers % Private Equity Acquirers % International Acquirers 9 9.0% Foreign Exchange (as of 6/30/14) Currency Exchng Rt USD Qtr Change Indian Rupee % Chinese Yuan % European Euro % Lyndhurst Partners Randall Snyder, Managing Director rsnyder@lyndhurstpartners.com 319 South Sharon Amity Rd., Suite 200-G Charlotte, NC Phone: twitter.com/itservicesmanda Quarterly Summary During the second quarter of 2014, M&A activity among IT Professional Service Organizations (ITPSOs) increased both as compared to the prior quarter Randall Snyder (47.1%) as well as compared to the same quarter one year ago (104.1%). Statistical highlights include: Buyers: Private companies represented the majority of buyside activity during the quarter (72 transactions, 72.0%). Public firms account for the balance (28, 28.0%). Foreign Buyers accounted for nine transactions (9.0%). Services: Creative / Digital Strategy (18 deals) accounted for the greatest number of transactions followed by Managed Services (11 transactions). Enterprise Applications: There were six transactions involving Microsoft-focused consultancies (5 of which involved Microsoft Dynamics). Vertical Markets: The Federal Government and Healthcare sectors were the most active vertical markets with 7 transactions each. Lyndhurst Partners Review: 2Q,

9 Transactions by Sector Quarterly total of 100 transactions is 47.1% greater than the prior quarter (68). Quarterly total is 104.1% greater than same quarter one year ago (49). Fast Facts Consulting-focused transactions represented 55.0% (55) of total deal flow. Outsourcing-focused transactions represented 40.0% (40) of total deal flow. Staffing-focused transactions accounted for 5.0% (5) of quarterly deal flow. There was one (1.0%) offshore transaction during the quarter. Trailing twelve month (TTM) transaction volume is 275. TTM transaction total increased 22.9% as compared to the prior quarter (223), and 12.8% as compared to the same quarter a year ago (243). Regionally, transaction volume was as follows: Northeast (22), Southeast (22), Midwest (17), West (14), Southwest (10), Rocky Mountains (4), Northwest (3), Mid Atlantic (2), and unknown (1). There were 5 International transactions. Lyndhurst Partners Review: 2Q,

10 Transactions by Buyer Ownership Type Fast Facts Of the 100 quarterly transactions, 72 (72.0%) were completed by privately-held companies and 28 (28.0%) by publicly-held organizations (or associated subsidiaries). Publicly-traded organizations (or subsidiaries of publicly-traded companies) active during the quarter include: Accenture Cognizant Dimension Data (sub NTT) EPAM Systems F5 Networks Globo Huron Consulting Group Ingram Micro Jacobs Engineering Group Kellton Tech Solutions KPIT Technologies Lionbridge Manpower Group ManTech International Navigant Consulting Perficient Progress Software Quintiles Red Hat Staffing 360 Solutions TMT Investments Xerox Lyndhurst Partners Review: 2Q,

11 Transactions by International Influence Fast Facts Ten of the 100 transactions, 9 (9.0%) were completed by non US-based buyers. Non-US buyers include companies headquartered in: Canada (3) India (2) China (1) Germany (1) Ireland (1) United Kingdom (1) Five of the quarterly transactions included non U.S. targets. Acquisitions occurred in the following countries: The Netherlands (2) China (1) Costa Rica (1) United Kingdome (1) Aggregate International Influence (international buyers + targets) was 14.0% (14 total transactions). Lyndhurst Partners Review: 2Q,

12 Transactions by Service Type Transaction Metrics: By Service Type and Quarter Service Type 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 Consulting (General) Cloud / Virtualization Creative / Digital Strategy Data / Storage Defense Enterprise Applications BI BSM CPM CRM CRM / ERP ECM ERP HCM 1 IDM SOA SCM 1 Other / Multiple Infrastructure / Network Management Consulting 1 2 SaaS Security SEO Testing VOIP / Communications Source: Lyndhurst Partners, Inc. Consulting Total Lyndhurst Partners Review: 2Q,

13 Transactions by Service Type (continued) Transaction Metrics: By Service Type and Quarter Service Type 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 Offshore (General) Application Development Outsourcing (General) Application Development Cloud / Virtualization Coding Data / Storage Data Center 1 3 Enterprise Application Hosting ISP 1 1 MSP / MSSP / MPP Infrastructure / Network 1 SaaS / IaaS Security 1 SOA Telephony 2 5 Testing Staffing Page Total Consulting Total Source: Lyndhurst Partners, Inc. Grand Total Lyndhurst Partners Review: 2Q,

14 Transactions by Enterprise Application Transaction Metrics: By Enterprise Application and Quarter Enterprise Application 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 BMC Google IBM Cognos Lotus Websphere 1 Lawson 1 Microsoft BI BPM Dynamics Exchange.Net Sharepoint 0.5 Multiple / Unknown 1 1 Oracle HCM Hyperion ERP IDM Peoplesoft Multiple / Unknown 1 2 SAGE Salesforce SAP BI BPM ERP 1 SCM Testing Multiple / Unknown 1 3 Other / Unknown / Multiple Source: Lyndhurst Partners, Inc. Total Lyndhurst Partners Review: 2Q,

15 Transactions by Vertical Market Construction Transaction Metrics: By Known Vertical Market and Quarter Vertical Market 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 Education Energy / Oil & Gas 1 Financial Services 2.5 Government Federal State / Local 1 1 Both Unknown Health Insurance Legal 2 Pharmaceutical 1 1 Retail 1 Telecommunications Transportation 0.5 Utility 1.5 Other Source: Lyndhurst Partners, Inc. Total Lyndhurst Partners Review: 2Q,

16 Performance of Market Indices & Statistics 2Q, 2014

17 Domestic Stock Market Indices ITPSO Stock Performance Category 2Q, 2014 Trailing 12 Months + - Unch Avg % Change + - Unch Avg % Change Consulting - Commercial % % Large % % Medium % % Small % % Consulting - Government % % Large % % Medium % % Offshore % % Large (India) % % Medium (India) % % Medium (China) % % Outsourcing % % Large % % Medium % % SaaS % % Staffing % % Large % % Medium % % Small % % Total ITPSO % % Percent 38.9% 61.1% 0.0% 77.8% 22.2% 0.0% Lyndhurst Partners Review: 2Q,

18 International Stock Market Indices Region Country Market Index Name 6/30/14 2ndQ 2014 YTD TTM Americas United States New York Stock Exchange DJIA 16,827 2% 2% 13% United States New York Stock Exchange / NASDAQ S&P 500 1,960 5% 6% 22% United States NASDAQ NASDAQ Computer 2,247 8% 10% 39% Argentina Buenos Aires Stock Exchange MerVal Index 7,887 24% 46% 165% Brazil BM&F Bovespa Bovespa 53,168 5% 3% 12% Canada Toronto Stock Exchange S&P / TSX Composite 15,146 6% 11% 25% Mexico Mexican Stock Exchange Mexican Bolsa Index (IPC) 42,737 6% 0% 5% Asia / Pacific Australia Australian Stock Exchange S&P / ASX 200 5,396 0% 1% 12% China Shanghai Stock Exchange Shanghai Composite 2,048 1% -3% 3% Honk Kong Hong Kong stock market Hang Seng 23,191 5% 0% 11% India Bombay Stock Exchange BSE 30 25,414 14% 20% 31% Indonesia Indonesia Stock Exchange Jakarta Composite 4,879 2% 14% 1% Japan Tokyo Stock Exchange Nikkei ,162 2% -7% 11% New Zealand New Zealand Exchange Limited NZSE 50 5,141 0% 9% 16% Russia MICEX Stock Exchange MICEX 10 3,243 8% -1% 7% Singapore Singapore Exchange Limited Straits Times Index 3,256 2% 3% 3% South Korea Korean Stock Exchange KOSPI Index 2,002 1% 0% 7% Taiwan Taiwan Stock Exchange TWSE (TAIEX) 9,393 6% 9% 17% Europe Austria Vienna Stock Exchange ATX Index 2,501 1% -2% 12% Belgium Euronext Brussels BEL20 3,127 0% 8% 24% England London Stock Exchange FTSE 100 Index 6,744 2% 0% 9% France Euronext Paris CAC 40 4,423 1% 3% 18% Germany Frankfurt Stock Exchange DAX Index 9,833 3% 3% 24% Norway Oslo Stock Exchange Oslo All-Share Index % 15% 35% Spain Madrid Stock Exchange Madrid General Index 1,116 6% 10% 43% Sweden Stockholm Stock Exchange OMX Stockholm Index 449 2% 6% 24% Switzerland SWX Swiss Exchange Swiss Market Index 8,555 1% 4% 11% The Netherlands Amsterdam Exchange AEX Index 413 2% 3% 20% Turkey Istanbul Stock Exchange ISE National ,489 13% 16% 3% Africa / Middle East Israel Tel Aviv Stock Exchange Tel Aviv 100 Index 1,253-2% 4% 17% Lyndhurst Partners Review: 2Q,

19 General Market Statistics As of 6/30/14 Rupee Yuan 6.20 Euro 0.73 Lyndhurst Partners Review: 2Q,

20 Public Comparables IT Consulting (Commercial / Government), Offshore, Outsourcing, IT Staffing, Software-as-a-Service

21 Public Comparables: IT Consulting (Commercial) EV / LTM Revenue Transactions by Quarter EV / EBITDA Revenue Quarterly YoY Revenue Growth News / Notable Deals Notable Deals Hitachi Solutions > Customer Effective mcaconnect > SalesMetrix The Herjavec Group > Galaxy Tech Signature Technology Group > GlassHouse Technologies (US Consulting Division) Kellton Tech Solutions > evantage Technologies Makeable > ShiftEight Dimension Data > Nexus Huron Consulting Group > Vonlay KPIT Technologies > I- Cubed Novacoast > XCEND Group Magnet 360 > American Data Company Perficient > Trifecta Technologies Quintiles > Encore Health Resources Navigant Consulting > Cymetrix Accenture > Enkitec Lionbridge > Darwin Zone Cloudera > Gazzang KPMG > Zannett Commercial Solutions LaSalle Capital > Avtex Solutions Lyndhurst Partners Review: 2Q,

22 Public Comparables: Consulting (Commercial) Corporate Information Stock Information Enterprise Value (EV) Revenue and EBITDA EPS and P/E Valuation Multiples ($in millions except per share amounts) Ticker Q** Revenue: $1 billion plus Stock Price (6/30) 2nd Q 52-Week Change Change 3 Market Cap (6/30/14) Total Cash+ Total Debt+ EV 3 Revenue* Qtrly Rev Growth (yoy) EBITDA* EBITDA*% Qtrly Earnings Growth (yoy) Diluted EPS* Trailing P/E* Forward P/E 1 Mkt Cap / Rev* EV / EV / Rev* EBITDA* 3 Sapient SAPE 3/ % 24.4% 2, ,020 1, % % 130.3% Revenue: $100 million - ~$1 billion Mean -4.8% 24.4% 16.7% 130.3% Median -4.8% 24.4% 16.7% 130.3% Hacket Group HCKT 3/ % 47.9% % % 143.0% -0.2 N/A Perficient PRFT 3/ % 15.0% % % N/A RCM Technologies RCMT 3/ % 46.0% % % -26.1% CIBER CBR 3/ % 17.1% % 9 5.1% 25.3% N/A Revenue: Less than $100 million Mean 2.4% 31.5% 8.3% 47.4% Median 3.7% 31.6% 8.0% 25.3% Edgewater EDGW 3/ % 74.6% % 8 8.0% N/A Helios & Matheson NA HMNY 3/ % -13.1% % 0 1.5% N/A N/A Mattersight Corp MATR 3/ % 89.6% % % N/A -0.7 N/A N/A NM Management Network Group TMNG 6/ % 41.8% % % N/A 0.0 N/A N/A NM Mean -10.4% 48.2% -0.3% #DIV/ Median -11.1% 58.2% -0.6% #NUM! C&I (Commercial) Mean -5.6% 36.9% 6.1% 43.2% C&I (Commercial) Median -2.5% 33.1% 11.1% 25.3% # Gainers # Losers Data provided by Capital IQ (via Yahoo finance) unless otherwise 1 = Data provided by Thomson * = Trailing Twelve Months DISCLAIMER: This information is obtained from sources believed to be reliable, but cannot be guaranteed 2 = Data provided by EDGAR Online ** = Information for quarter ending mm/dd/2014 to be completely accurate. The information is subject to change without notice. The information 3 = Data derived from multiple sources or calculated by Yahoo! + = Most Recent Quarter herein is not sufficient for investment purposes and should not be so utilized. 4 = Data provided by Computershare N/A = Not Available 5 = Data provided by Hemscott Americas Lyndhurst Partners Review: 2Q,

23 Public Comparables: IT Consulting (Government) EV / LTM Revenue Transactions by Quarter EV / EBITDA Revenue Quarterly YoY Revenue Growth News / Notable Deals Notable Deals Public Consulting Group > Hubbert Systems Consulting Vencore > QinetiQ (NA Services and Solutions Group) Jacobs Engineering Group > Federal Network Systems ManTech International > 7Delta Endgame > Onyxware Dovel Technologies > RNSolutions Trowbridge & Trowbridge > EMW (GSA Alliant Small Business Contract) Lyndhurst Partners Review: 2Q,

24 Public Comparables: Consulting (Government) Corporate Information Stock Information Enterprise Value (EV) Revenue and EBITDA EPS and P/E Valuation Multiples ($in millions except per share amounts) Ticker Revenue: $2 billion plus Q** Stock Price (6/30) 2nd Q 52-Week Change Change 3 Market Cap (6/30/14) Total Cash+ Total Debt+ EV 3 Revenue* Qtrly Rev Growth (yoy) EBITDA* EBITDA*% Qtrly Earnings Growth (yoy) Diluted EPS* Trailing P/E* Forward P/E 1 Mkt Cap / Rev* EV / EV / Rev* EBITDA* 3 CACI International CACI 3/ % 10.6% 1, ,320 2,91 3, % % -19.6% ManTech International MANT 3/ % 13.0% 1, ,02 2, % % -52.3% -0.5 N/A Revenue: $100 million - $2 billion Mean -2.3% 11.8% -15.3% -36.0% Median -2.3% 11.8% -15.3% -36.0% Maximus MMS 3/ % 15.6% 2, ,77 1, % % 30.0% Tyler Technologies TYL 3/ % 33.1% 3, % % 39.9% Mean 2.5% 24.4% 26.1% 35.0% Median 2.5% 24.4% 26.1% 35.0% C&I (Commercial) Mean 0.1% 18.1% 5.4% -0.5% C&I (Commercial) Median -1.9% 14.3% 8.5% 5.2% # Gainers # Losers Data provided by Capital IQ (via Yahoo finance) unless otherwise noted. 1 = Data provided by Thomson * = Trailing Twelve Months DISCLAIMER: This information is obtained from sources believed to be reliable, but cannot be guaranteed 2 = Data provided by EDGAR Online ** = Information for quarter ending mm/dd/2014 to be completely accurate. The information is subject to change without notice. The information 3 = Data derived from multiple sources or calculated by Ya- + = Most Recent Quarter herein is not sufficient for investment purposes and should not be so utilized. 4 = Data provided by Computershare N/A = Not Available 5 = Data provided by Hemscott Americas Lyndhurst Partners Review: 2Q,

25 Public Comparables: Offshore EV / LTM Revenue EV / EBITDA Revenue News / Notable Deals Notable Deals Various Investors > isoftstone Transactions by Quarter Quarterly YoY Revenue Growth Lyndhurst Partners Review: 2Q,

26 Public Comparables: Offshore Corporate Information Stock Information Enterprise Value (EV) Revenue and EBITDA EPS and P/E Valuation Multiples ($in millions except per share amounts) Ticker Revenue: $1 billion plus (India) Q** Stock Price (6/30) 2nd Q 52-Week Change Change 3 Market Cap (6/30/14) Total Cash+ Total Debt+ EV 3 Revenue* Qtrly Rev Growth (yoy) EBITDA* EBITDA*% Qtrly Earnings Growth (yoy) Diluted Trailing Forward EPS* P/E* P/E 1 Mkt Cap / Rev* EV / EV / Rev* EBITDA* 3 Cognizant CTSH 3/ % -21.9% 29,760 3,860-26,130 9, % 1, % 22.8% Infosys INFY 3/ % 30.5% 30,720 4,840-25,850 8, % 2, % 9.7% Wipro WIT 3/ % 63.3% 29,130 3, ,740 7, % 1, % 28.8% Revenue: $100 million - $1 billion (India) Mean -5.1% 24.0% 16.9% 20.4% Median -3.3% 30.5% 19.9% 22.8% Syntel SYNT 3/ % 36.7% 3, , % % 25.3% Virtusa VRTU 3/ % 61.6% 1, % % 10.5% Revenue: Greater than $50 million (China) Mean 1.2% 49.2% 19.8% 17.9% Median 1.2% 49.2% 19.8% 17.9% China Information Security CNIT 12/31/ % 67.6% % % N/A -4.4 N/A N/A NM Mean -10.4% 67.6% -33.9% #DIV/ NM Median -10.4% 67.6% -33.9% #NUM! NM C&I (Commercial) Mean -3.9% 39.6% 9.4% 19.4% C&I (Commercial) Median -3.9% 49.2% 18.0% 22.8% # Gainers # Losers Data provided by Capital IQ (via Yahoo finance) unless otherwise noted. 1 = Data provided by Thomson * = Trailing Twelve Months DISCLAIMER: This information is obtained from sources believed to be reliable, but cannot be guaranteed 2 = Data provided by EDGAR Online ** = Information for quarter ending mm/dd/2014 to be completely accurate. The information is subject to change without notice. The information 3 = Data derived from multiple sources or calculated by + = Most Recent Quarter herein is not sufficient for investment purposes and should not be so utilized. 4 = Data provided by Computershare N/A = Not Available 5 = Data provided by Hemscott Americas Lyndhurst Partners Review: 2Q,

27 Public Comparables: Outsourcing EV / LTM Revenue Transactions by Quarter EV / EBITDA Revenue Quarterly YoY Revenue Growth News / Notable Deals Notable Deals Velocity Technology Solutions > Titan Technology Partners Digitel > JTECH Networks Xerox > Smart Data Consulting Birch Communications > Cbeyond Cognizant > itaas NetCenergy > Landon Group Red Hat > Inktank Storage Brook Venture / Blue Heron Capital > PC Networks Services Silver Oak Services Partners > isystems Synoptek > Critigen (MSP Division) The Greentree Group > Midwest Design Computers GI Partners > Peak 10 Holdings Clearlake Capital > ConvergeOne F5 Networks > Defense.net UST Global > Xpanxion Hover Networks > Voyss Solutions EPAM Systems > GGA Software Services Level 3 > tw telecom Ingram Micro > Rollouts Lyndhurst Partners Review: 2Q,

28 Public Comparables: Outsourcing Corporate Information Stock Information Enterprise Value (EV) Revenue and EBITDA EPS and P/E Valuation Multiples ($in millions except per share amounts) Ticker Q** Revenue: $2 billion plus Stock Price (6/30) 2nd Q 52-Week Change Change 3 Market Cap (6/30/14) Total Cash+ Total Debt+ EV 3 Revenue* Qtrly Rev Growth (yoy) EBITDA* EBITDA*% Qtrly Earnings Growth (yoy) Diluted EPS* Trailing Forward P/E* P/E 1 Mkt Cap / Rev* EV / EV / Rev* EBITDA* 3 Accenture ACN 5/ % 12.3% 51,180 4, ,480 29, % 4, % 0.9% CGI Group GIB 3/ % 21.1% 10, ,670 13,460 9, % 1, % 102.2% Computer Sciences CSC 3/ % 45.0% 9,160 2,440 2,890 9,600 13, % 1, % -38.1% Unisys UIS 3/ % 12.1% 1, , % % N/A Revenue: $100 million - $2 billion Mean 0.3% 22.6% 2.6% 21.7% Median 2.7% 16.7% 1.0% 0.9% igate IGTE 3/ % 121.6% 2, ,890 1, % % -9.0% Lionbridge Technolo- LIOX 3/ % 104.8% % % N/A Mean 2.0% 113.2% 7.8% -9.0% Median 2.0% 113.2% 7.8% -9.0% C&I (Commercial) Mean 0.9% 52.8% 4.4% 14.0% C&I (Commercial) Median 2.7% 33.1% 6.4% -4.1% # Gainers # Losers Data provided by Capital IQ (via Yahoo finance) unless otherwise noted. 1 = Data provided by Thomson * = Trailing Twelve Months DISCLAIMER: This information is obtained from sources believed to be reliable, but cannot be guaranteed 2 = Data provided by EDGAR Online ** = Information for quarter ending mm/dd/2014 to be completely accurate. The information is subject to change without notice. The information 3 = Data derived from multiple sources or calculated by + = Most Recent Quarter herein is not sufficient for investment purposes and should not be so utilized. 4 = Data provided by Computershare N/A = Not Available 5 = Data provided by Hemscott Americas Lyndhurst Partners Review: 2Q,

29 Public Comparables: IT Staffing EV / LTM Revenue EV / EBITDA Revenue News / Notable Deals Notable Deals Next Step Systems > Parallel Partners Manpower Group > isense ICT Professionals Staffing 360 Solutions > PeopleSERVE MCPc > Forquer Group TechDigital > AJASA Technologies Transactions by Quarter Quarterly YoY Revenue Growth Lyndhurst Partners Review: 2Q,

30 Public Comparables: Staffing Corporate Information Stock Information Enterprise Value (EV) Revenue and EBITDA EPS and P/E Valuation Multiples ($in millions except per share amounts) Ticker Revenue: ~$1 billion plus Q** Stock Price (6/30) 2nd Q 52-Week Change Change 3 Market Cap (6/30/14) Total Cash+ Total Debt+ EV 3 Revenue* Qtrly Rev Growth (yoy) Qtrly Earnings Growth EBITDA* EBITDA*% (yoy) Diluted EPS* Trailing P/E* Forward P/E 1 Mkt Cap / Rev* EV / EV / Rev* EBITDA* 3 CDI Corporation CDI 3/ % 1.8% , % % -18.2% Compuware CPWR 3/ % -3.4% 2, , N/A % N/A Kforce KFRC 3/ % 48.5% , % % 102.0% Revenue: $100 million - $1 billion Mean -6.4% 15.6% 8.7% 41.9% Median -4.9% 1.8% 8.7% 41.9% Computer Task Group CTG 3/ % -28.3% % % -22.0% Revenue: Less than $100 million Mean -3.1% -28.3% -9.8% -22.0% Median -3.1% -28.3% -9.8% -22.0% General Employment JOB 3/ % -40.0% % % N/A -0.1 N/A N/A NM TSR TSRI 2/ % -0.7% % % N/A 0.0 N/A N/A NM Mean -16.4% -20.4% -0.2% N/A NM Median -16.4% -20.4% -0.2% N/A NM C&I (Commercial) Mean -9.2% -3.7% 1.4% 20.6% C&I (Commercial) Median -8.1% -2.1% 2.5% -18.2% # Gainers # Losers Data provided by Capital IQ (via Yahoo finance) unless otherwise noted. 1 = Data provided by Thomson * = Trailing Twelve Months DISCLAIMER: This information is obtained from sources believed to be reliable, but cannot be guaranteed 2 = Data provided by EDGAR Online ** = Information for quarter ending mm/dd/2014 to be completely accurate. The information is subject to change without notice. The information 3 = Data derived from multiple sources or calculated by Ya- + = Most Recent Quarter herein is not sufficient for investment purposes and should not be so utilized. 4 = Data provided by Computershare N/A = Not Available 5 = Data provided by Hemscott Americas Lyndhurst Partners Review: 2Q,

31 Public Comparables: SaaS Corporate Information Stock Information Enterprise Value (EV) Revenue and EBITDA EPS and P/E Valuation Multiples ($in millions except per share amounts) Ticker Revenue: ~$500 million plus Q** Stock Price (6/30) 2nd Q 52-Week Change Change 3 Market Cap (6/30/14) Total Cash+ Total Debt+ EV 3 Revenue* Qtrly Rev Growth (yoy) Qtrly Earnings Growth EBITDA* EBITDA*% (yoy) Diluted Trailing Forward EPS* P/E* P/E 1 Mkt Cap / Rev* EV / EV / Rev* EBITDA* 3 Citrix Systems CTXS 3/ % 3.6% % % -6.3% Concur Technologies CNQR 3/ % 14.7% % % N/A -1.5 N/A NetSuite N 3/ % -5.3% % % N/A -1.1 N/A NM Salesforce.com CRM 4/ % 52.1% % % N/A -0.4 N/A NM Mean -0.9% 16.3% 29.1% -6.3% Median -2.1% 9.2% 33.7% -6.3% C&I (Commercial) Mean -0.9% 16.3% 29.1% -6.3% C&I (Commercial) Median -2.1% 9.2% 33.7% -6.3% # Gainers # Losers Data provided by Capital IQ (via Yahoo finance) unless otherwise noted. 1 = Data provided by Thomson * = Trailing Twelve Months DISCLAIMER: This information is obtained from sources believed to be reliable, but cannot be guaranteed 2 = Data provided by EDGAR Online ** = Information for quarter ending mm/dd/2014 to be completely accurate. The information is subject to change without notice. The information 3 = Data derived from multiple sources or calculated by + = Most Recent Quarter herein is not sufficient for investment purposes and should not be so utilized. 4 = Data provided by Computershare N/A = Not Available 5 = Data provided by Hemscott Americas Lyndhurst Partners Review: 2Q,

32 Contact Information Lyndhurst Partners

33 Contact Information For Further Information Contact Randall Snyder, Managing Director Lyndhurst Partners and Dragonfly Capital Partners* 319 South Sharon Amity Road, Suite 200-G Charlotte, NC Phone: x2# twitter.com/itservicesmanda meetme.so/randallsnyder *All transaction-related services are provided via Dragonfly Capital Partners, LLC. Lyndhurst Partners Review: 2Q,