Business Services Industry Update June 2014

Transcription

1 Business Industry Update Member FINRA/SIPC

2 Business Industry Update What we are Reading... TrueBlue to Acquire SeatonCorp TrueBlue, Inc. announced that it has agreed to purchase privately held SeatonCorp, adding complementary outsourcing solutions such as high-volume employee recruitment, managed services provider and strategic outsourced workforce management to its leading specialized staffing and onsite workforce management offerings. The acquisition will make TrueBlue the largest industrial staffing firm in the U.S. Solera to Acquire Insurance and Division of Pittsburgh Glass Works Solera Holdings, Inc., a leading global provider of software and services to the automobile insurance claims processing and decision support industries, announced that it has signed a definitive agreement to acquire the Insurance and Division of Pittsburgh Glass Works, LLC ( I&S ). I&S is a leading provider of software and business management tools, third-party claims administration, first notice of loss and network management services to the U.S. auto and property repair industries, specializing in glass claims. The acquisition is subject to certain closing conditions, including Hart-Scott-Rodino clearance, and is expected to close in the fourth quarter of Solera s fiscal year ending June 30, Navigant Acquires Cymetrix Navigant announced that it has acquired Cymetrix Corporation, a privately held revenue cycle management firm that specializes in providing outsourcing services to hospital and healthcare networks. The addition of Cymetrix s approximately 600 business process outsourcing employees significantly enhances Navigant Healthcare s existing physician revenue cycle outsourcing capabilities, which are offered through Navigant s Alleviant subsidiary, and establishes Navigant Healthcare as a leading provider of end-to-end revenue cycle management services. The newly acquired company will operate as Navigant Healthcare Cymetrix. Xerox to Purchase ISG to Expand Workers Compensation Offerings Xerox signed a definitive agreement to buy ISG Holdings, in a transaction valued at approximately $225M, as part of its plan to build a comprehensive workers compensation suite of offerings for property and casualty insurance industry clients. Post-takeover, Xerox will add two ISG subsidiaries and their offerings to its portfolio, including California-based StrataCare that offers comprehensive web-based medical bill review software, workflow and outsourcing solutions. PNC Releases National Economic Outlook U.S. growth disappointed in the first quarter of 2014 with real GDP expanding just 0.1% at a seasonallyadjusted annualized rate. The expectation was that growth in the first quarter would be soft because of the bad weather in much of the country, but this was much worse than the consensus view for growth around 1%. Despite the disappointing GDP report, the Federal Open Market Committee again reduced purchases of long-term Treasuries and mortgage-backed securities by $10 billion at their late-april meeting. The FOMC also said again that reductions in asset purchses are expected to come in further measured steps at future meetings. Continued recovery in the housing market will support economic and employment growth in In addition to the direct impact of homebuilding on GDP and jobs, higher home values will boost household wealth and bolster consumer spending. PNC is forecasting inflation-adjusted GDP growth of 2.4% from the fourth quarter of 2013 to the fourth quarter of 2014; this down from 2.7% growth in the April forecast, largely as a result of the weak first quarter. Less drag from Federal fiscal policy, continued gains in consumer spending, an improving global economy, and a pickup in business investment will also support economic growth this year. CONTENTS BUSINESS SERVICES UPDATE EQUITY TRADING OVERVIEW ECONOMIC TRENDS M&A MARKET TRENDS PUBLIC COMPARABLES HW&Co. TRANSACTIONS GROUP OVERVIEW Harris Williams & Co. is a leading advisor to the business services market. Our significant experience covers a broad range of end markets, industries, and business models. This particular report focuses on trends and metrics in the following areas: Business Process Outsourcing Consulting Human Resources Insurance, Legal, and Risk Marketing and Information Transaction Processing Education and Training Facility CONTACTS Derek Lewis Managing Director [email protected] +1 (804) Bob Baltimore Managing Director [email protected] +1 (804) Dave Kennedy Director [email protected] +1 (804) John Klim Vice President [email protected] +1 (804) Marshall Croft Vice President [email protected] +1 (804)

3 12-month % Change in Stock Price EV/2014E EBITDA Multiple Business Equity Trading Overview Key Trading Statistics (detail begins on page 5) Sector Number of Companies Median Enterprise Value ($mm) Change in Stock Price LTM Multiples 3 mos. 12 mos. EV/EBITDA P/E EV/EBITDA P/E Business Process Outsourcing 11 $3,763 (2.2%) 24.5% 9.8x 21.0x 8.6x 16.8x Consulting 10 1,329 (5.4%) 17.9% 9.8x 19.2x 9.8x 18.4x 2014E Human Resources 17 1,351 (1.8%) 36.6% 13.4x 24.7x 10.2x 19.4x Insurance, Legal, and Risk 7 8,369 (0.5%) 8.1% 10.9x 21.0x 10.0x 16.5x Marketing & Information 30 5, % 14.5% 11.6x 23.2x 10.5x 18.2x Transaction Processing 9 7, % 23.7% 12.6x 25.2x 10.1x 17.2x Education & Training (9.0%) 5.7% 8.9x 23.5x 7.4x 17.4x Facility 14 6, % 39.6% 11.4x 24.4x 9.5x 18.2x Business Index 116 $4,503 (1.1%) 20.8% 11.1x 23.3x 9.9x 17.8x Public Company Sector Performance 45% 40% 35% 30% 9.5x 10.2x 8.6x 10.1x 9.9x 9.8x 9.8x 10.5x 10.0x 11.0x 10.0x 9.0x 25% 7.4x 8.0x 20% 7.0x 15% 10% 6.0x 5% 5.0x 0% Facility Human Resources Business Transaction Process Processing Outsourcing Business Index S&P 500 Consulting Marketing & Information Insurance, Legal, and Risk Education & Training 4.0x 12-month % Change in Stock Price EV/2014E EBITDA Multiple 2

4 Year over Year Change GDP Consumer Confidence Economic Trends A Snapshot of Key Economic Indicators (in trillions of chained 2009 dollars) $16.0 $15.5 $15.0 $14.5 $14.0 U.S. GDP Growth % 5.0% 0.0% (5.0%) $13.5 $13.0 (10.0%) Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Annual Percentage Growth Cons. Confidence and Unemployment Rate % % 10.0% % % % % Consumer Confidence Unemployment Rate % Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Unemployment Rate Series2 (1) U.S. Bureau of Economic Analysis Annual Percentage Growth (2) The Conference Board and U.S. Bureau of Labor Statistics Non-Farm Payrolls 3 U.S. Initial Jobless Claims 4 (Payrolls in 000s) (Claims in 000s) +288K , , , K 0 500,000 (200) 400,000 (400) 300,000 (600) 200,000 (800) 100,000 (1,000) Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 0 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 (3) Bureau of Labor Statistics (4) United States Department of Labor Consumer Price Index 5 ISM Non-Manufacturing Index 6 6.0% % 4.0% 3.0% 2.0% % % % -1.0% -2.0% -3.0% Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 (5) Bureau of Labor Statistics (6) The Institute for Supply Management 3

5 M&A Market Trends Select Recent M&A Transactions Date Target Business Description Acquirer 5/20/2014 Newman Crane & Associates Insurance, Inc. Newman Crane & Associates Insurance, Inc. provides personal and commercial insurance services. The Hilb Group, LLC 5/14/2014 Cymetrix Cymetrix provides revenue cycle outsourcing solutions for healthcare organizations and hospital-affiliated physician practices in the United States. Navigant Consulting Inc. 5/12/2014 Pittsburgh Glass Works LLC, Insurance and Division Pittsburgh Glass Works's I&S Division provides third-party claims administration, first notice of loss, and network management services to the U.S. auto and property repair industries, specializing in glass claims. Solera Holdings, Inc. 5/6/2014 ISG Holdings, Inc. ISG Holdings, Inc. provides bill review and managed care programs for the workers compensation industry. Xerox Corporation 5/1/2014 Reliance Industrial Investments Ltd. Reliance Industrial Investments Ltd. offers a full range of products and services including design and manufacturing, hydraulic and mechanical repair, and oilfield, hydraulic and safety products. Applied Industrial Technologies, Inc. 4/30/2014 Inktank Storage, Inc. Inktank Storage, Inc. provides professional services and support services to enterprises, service providers, cloud platform providers, and storage appliance manufacturers. Red Hat, Inc. 4/22/2014 PSC Environmental, LLC PSC Environmental, LLC provides recycling, industrial cleaning and environmental services. Stericycle, Inc. M&A Volume Quarterly Activity 1 $4, Volume: 10, Volume: 9, Volume: 9, Volume: 9, Volume: 8, Volume: 9,600 $3,500 $3,000 2,897 2,856 2,839 $2,500 $2,000 2,130 2,044 2,260 2,459 2,573 2,480 2,281 2,515 2,569 2,515 2,496 2,448 2,345 2,105 2,086 2,151 2,653 2,259 2,226 2,560 2,555 2,410 $1,500 $1,000 $500 $0 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Undisclosed Under $100mm $100-$250mm $250-$500mm Above $500mm Note: No transaction value provided for undisclosed deals. Source: Thomson Financial. (1) Represents all United States and Canada M&A transactions. 4

6 Public Comparables Public Company Performance Price at As a % of Market Enterprise EBITDA EV / LTM EV / 2014E ($ in millions, except per share data) Ticker 6/6/14 52-wk High Cap Value (EV) Margins Revenue EBITDA Revenue EBITDA Business Process Outsourcing Tata Consultancy Limited BSE: $ % $69,077 $66, % 4.87x 15.8x 4.12x 13.8x Cognizant Technology Solutions Corporation CTSH $ % $30,319 $26, % 2.86x 13.5x 2.47x 12.0x Wipro Ltd. BSE: $ % $21,051 $18, % 2.59x 11.6x 2.30x 9.8x Computer Sciences Corporation CSC $ % $9,211 $9, % 0.74x 4.9x 0.74x 4.5x Computershare Limited CPU $ % $6,552 $7, % 3.78x 16.7x 3.72x 13.0x Genpact Limited G $ % $3,669 $3, % 1.74x 9.8x 1.65x 9.9x Convergys Corporation CVG $ % $2,260 $2, % 1.27x 10.1x 0.89x 7.4x TeleTech Holdings Inc. TTEC $ % $1,379 $1, % 1.13x 8.7x 1.07x 8.1x WNS (Holdings) Ltd. WNS $ % $908 $ % 1.74x 9.1x 1.73x 8.6x Sykes Enterprises, Incorporated SYKE $ % $912 $ % 0.62x 6.7x 0.59x 5.8x Exlservice Holdings, Inc. EXLS $ % $987 $ % 1.73x 8.8x 1.70x 8.3x Mean 90.0% $13,302 $12, % 2.10x 10.5x 1.91x 9.2x Median 91.2% $3,669 $3, % 1.74x 9.8x 1.70x 8.6x Consulting Accenture plc ACN $ % $52,880 $49, % 1.71x 11.1x 1.61x 9.8x Corporate Executive Board Co. CEB $ % $2,381 $2, % 3.27x 15.6x 2.91x 11.9x The Advisory Board Company ABCO $ % $1,867 $1, % 3.54x 29.3x 3.08x 18.1x FTI Consulting, Inc. FCN $ % $1,353 $2, % 1.21x 8.6x 1.16x 10.3x Huron Consulting Group Inc. HURN $ % $1,549 $1, % 2.20x 10.5x 2.11x 11.8x Navigant Consulting Inc. NCI $ % $850 $ % 1.33x 8.3x 1.08x 7.6x ICF International Inc. ICFI $ % $766 $ % 0.91x 10.0x 0.82x 8.2x Resources Connection Inc. RECN $ % $484 $ % 0.68x 9.3x 0.65x 6.9x CBIZ, Inc. CBZ $ % $435 $ % 0.93x 9.5x 0.88x NA CRA International Inc. CRAI $ % $225 $ % 0.66x 7.2x 0.67x 5.2x Mean 86.3% $6,279 $6, % 1.64x 11.9x 1.50x 10.0x Median 87.2% $1,102 $1, % 1.27x 9.8x 1.12x 9.8x Human Resources Randstad Holding NV ENXTAM:RAND $ % $10,784 $11, % 0.51x 14.1x 0.49x 10.2x Towers Watson & Co. TW $ % $7,805 $7, % 2.05x 11.0x 2.04x 10.2x ManpowerGroup Inc. MAN $ % $6,790 $6, % 0.32x 9.1x 0.31x 7.9x Robert Half International Inc. RHI $ % $6,407 $6, % 1.43x 13.4x 1.31x 11.3x Hays plc LSE:HAS $ % $3,676 $3, % 0.63x 16.5x 0.59x 12.9x Michael Page International plc LSE:MPI $ % $2,434 $2, % 1.38x 17.5x 1.32x 13.5x 51job Inc. JOBS $ % $1,835 $1, % 4.88x 15.4x 4.09x 11.6x On Assignment Inc. ASGN $ % $1,975 $2, % 1.39x 14.8x 1.21x 11.1x Korn/Ferry International KFY $ % $1,605 $1, % 1.44x 11.7x 1.10x 9.0x USG People NV ENXTAM:USG $ % $1,345 $1, % 0.51x 13.5x 0.49x 10.1x TrueBlue, Inc. TBI $ % $1,177 $1, % 0.61x 11.3x 0.48x 9.0x Kelly, Inc. KELY.A $ % $680 $ % 0.12x 8.5x 0.12x 7.7x Insperity, Inc. NSP $ % $852 $ % 0.26x 8.2x 0.24x 8.0x SThree Plc. LSE:STHR $ % $822 $ % 0.78x 20.7x 0.69x 12.5x Barrett Business Inc. BBSI $ % $346 $ % 0.46x 10.2x 0.07x 6.7x Kforce Inc. KFRC $ % $774 $ % 0.70x 14.3x 0.63x 10.2x Heidrick & Struggles International Inc. HSII $ % $341 $ % 0.58x 7.6x 0.55x 6.3x Mean 86.9% $2,920 $2, % 1.06x 12.8x 0.93x 9.9x Median 89.7% $1,605 $1, % 0.63x 13.4x 0.59x 10.2x Insurance, Legal, and Risk Marsh & McLennan Companies, Inc. MMC $ % $28,063 $29, % 2.40x 11.8x 2.29x 10.5x Aon plc AON $ % $26,836 $31, % 2.64x 13.5x 2.54x 11.6x Willis Group Holdings Public Limited Company WSH $ % $7,665 $9, % 2.52x 10.9x 2.39x 10.0x Arthur J Gallagher & Co. AJG $ % $7,215 $8, % 2.47x 15.8x 2.00x 10.8x Brown & Brown Inc. BRO $ % $4,461 $4, % 3.38x 10.1x 2.89x 8.5x Epiq Systems, Inc. EPIQ $ % $439 $ % 1.61x 10.7x 1.44x 6.7x Crawford & Company CRD.B $ % $499 $ % 0.55x 6.0x 0.52x 5.3x Mean 89.4% $10,740 $12, % 2.22x 11.3x 2.01x 9.0x Median 90.8% $7,215 $8, % 2.47x 10.9x 2.29x 10.0x 5

7 Public Comparables Public Company Performance Price at As a % of Market Enterprise EBITDA EV / LTM EV / 2014E ($ in millions, except per share data) Ticker 6/6/14 52-wk High Cap Value (EV) Margins Revenue EBITDA Revenue EBITDA Marketing & Information Thomson Reuters Corporation TSX:TRI $ % $28,304 $35, % 2.82x 13.8x 2.80x 10.2x WPP plc LSE: WPP $ % $28,139 $31, % 1.74x 10.4x 1.72x 9.8x Publicis Groupe SA ENXTPA:PUB $ % $17,251 $16, % 1.72x 8.9x 1.66x 9.0x Omnicom Group Inc. OMC $ % $18,349 $20, % 1.38x 9.4x 1.32x 8.8x Experian plc EXPN $ % $17,228 $21, % 4.37x 12.7x 4.16x 12.1x Nielsen N.V. NLSN $ % $18,094 $24, % 4.16x 17.6x 3.79x 12.8x Moody's Corporation MCO $ % $18,592 $18, % 6.22x 13.5x 5.74x 12.3x Alliance Data Systems Corporation ADS $ % $14,430 $23, % 5.23x 18.2x 4.36x 14.4x Verisk Analytics, Inc. VRSK $ % $10,206 $11, % 6.79x 14.9x 6.09x 13.1x Equifax Inc. EFX $ % $8,773 $10, % 4.44x 12.6x 4.13x 11.7x Wolters Kluwer NV ENXTAM:WKL $ % $8,759 $11, % 2.34x 9.4x 2.35x 9.5x IHS Inc. IHS $ % $8,847 $10, % 5.39x 25.3x 4.73x 15.1x The Interpublic Group of Companies, Inc. IPG $ % $8,261 $9, % 1.27x 10.8x 1.21x 9.2x Informa plc LSE:INF $ % $5,248 $6, % 3.49x 10.7x 3.42x 10.8x CoStar Group Inc. CSGP $ % $5,380 $5, % 11.63x 45.7x 8.73x 28.5x Dun & Bradstreet Corp. DNB $ % $3,937 $5, % 3.13x 10.3x 3.07x 9.9x FactSet Research Systems Inc. FDS $ % $4,660 $4, % 5.16x 13.8x 4.80x 12.7x DST Systems Inc. DST $ % $3,658 $4, % 1.57x 9.8x 2.08x 8.8x Morningstar Inc. MORN $ % $3,232 $2, % 4.18x 13.4x 3.91x 12.8x Havas ENXTPA:HAV $ % $3,474 $3, % 1.54x 10.2x 1.52x 9.4x CoreLogic, Inc. CLGX $ % $2,707 $4, % 3.12x 17.0x 2.89x 10.0x Acxiom Corporation ACXM $ % $1,715 $1, % 1.47x 8.1x 1.57x 7.8x UBM plc UBM $ % $2,708 $3, % 2.63x 11.1x 2.73x 11.0x Fair Isaac Corporation FICO $ % $2,008 $2, % 3.20x 12.2x 3.05x 10.7x Conversant, Inc. CNVR $ % $1,627 $1, % 2.73x 7.8x 2.55x 7.4x comscore, Inc. SCOR $ % $1,156 $1, % 3.82x 44.5x 3.34x 16.5x Forrester Research Inc. FORR $ % $735 $ % 1.93x 18.3x 1.85x 16.3x Viad Corp VVI $ % $483 $ % 0.45x 7.1x 0.43x 6.2x Harte-Hanks Inc. HHS $ % $439 $ % 0.80x 7.5x 0.79x 6.4x QuinStreet, Inc. QNST $ % $237 $ % 0.68x 9.4x 0.70x 7.0x Mean 87.5% $8,288 $9, % 3.31x 14.5x 3.05x 11.3x Median 89.2% $4,954 $5, % 2.97x 11.6x 2.85x 10.5x Transaction Processing Automatic Data Processing, Inc. ADP $ % $38,380 $36, % 3.07x 14.7x 2.85x 13.7x Paychex, Inc. PAYX $ % $14,986 $14, % 5.90x 13.5x 5.57x 12.7x Fidelity National Information, Inc. FIS $ % $15,849 $19, % 3.25x 12.6x 3.07x 10.1x The Western Union Company WU $ % $8,763 $10, % 1.96x 7.7x 1.91x 7.9x Total System, Inc. TSS $ % $5,879 $7, % 3.11x 13.5x 2.84x 9.2x Jack Henry & Associates Inc. JKHY $ % $4,942 $4, % 4.10x 12.0x 3.81x 11.4x Vantiv, Inc. VNTV $ % $4,694 $6, % 2.96x 11.8x 4.81x 9.7x VeriFone Systems, Inc. PAY $ % $4,102 $4, % 2.75x 26.6x 2.51x 14.4x Heartland Payment Systems, Inc. HPY $ % $1,516 $1, % 0.75x 9.9x 2.46x 10.1x Mean 92.5% $11,012 $11, % 3.10x 13.6x 3.31x 11.0x Median 93.4% $5,879 $7, % 3.07x 12.6x 2.85x 10.1x 6

8 Public Comparables Public Company Performance Price at As a % of Market Enterprise EBITDA EV / LTM EV / 2014E ($ in millions, except per share data) Ticker 6/6/14 52-wk High Cap Value (EV) Margins Revenue EBITDA Revenue EBITDA Education & Training Pearson plc LSE:PSON $ % $15,544 $18, % 2.15x 13.3x 2.16x 12.6x Apollo Education Group, Inc. APOL $ % $3,103 $2, % 0.71x 3.4x 0.82x 4.4x John Wiley & Sons Inc. JW.A $ % $3,322 $3, % 2.06x 11.5x 2.02x 9.6x DeVry Education Group Inc. DV $ % $2,697 $2, % 1.20x 8.0x 1.18x 7.3x Grand Canyon Education, Inc. LOPE $ % $2,053 $1, % 3.12x 10.9x 2.81x 9.2x Scholastic Corporation SCHL $ % $1,033 $1, % 0.67x 7.7x 0.65x 7.4x Bridgepoint Education, Inc. BPI $ % $619 $ % 0.50x 9.4x 0.54x 9.6x K12, Inc. LRN $ % $943 $ % 0.89x 10.3x 0.82x 5.9x ITT Educational Inc. ESI $ % $425 $ % 0.24x 1.3x 0.27x 2.2x Capella Education Co. CPLA $ % $690 $ % 1.37x 8.2x 1.35x 6.5x American Public Education, Inc. APEI $ % $604 $ % 1.51x 6.3x 1.42x 6.2x GP Strategies Corp. GPX $ % $484 $ % 1.06x 10.5x 0.97x 9.9x Strayer Education Inc. STRA $ % $598 $ % 1.23x 5.0x 1.38x 6.5x Universal Technical Institute, Inc. UTI $ % $291 $ % 0.62x 10.9x 0.61x 8.6x Franklin Covey Co. FC $ % $377 $ % 2.03x 14.1x 1.81x 10.3x Corinthian Colleges Inc. COCO $ % $69 $ % 0.12x 2.6x 0.14x 2.2x Lincoln Educational Corporation LINC $ % $89 $ % 0.36x 8.5x 0.35x 11.8x Cambium Learning Group, Inc. ABCD $ % $93 $ % 1.51x 10.5x NA NA Mean 75.0% $1,835 $1, % 1.19x 8.5x 1.14x 7.6x Median 79.9% $612 $ % 1.13x 8.9x 0.97x 7.4x Facility Compass Group PLC LSE:CPG $ % $30,287 $32, % 1.13x 12.8x 1.11x 12.1x Sodexo S.A. ENXTPA:SW $ % $16,438 $18, % 0.74x 12.0x 0.72x 10.0x Cintas Corporation CTAS $ % $7,588 $8, % 1.89x 10.8x 1.84x 10.2x ISS A/S CPSE:ISS $ % $6,593 $9, % 0.66x 12.3x 0.68x 10.3x Aramark NYSE:ARMK $ % $6,186 $11, % 0.82x 10.8x 0.78x 9.0x Rentokil Initial plc LSE:RTO $ % $3,561 $5, % 1.37x 6.8x 1.76x 7.4x EMCOR Group Inc. EME $ % $3,151 $3, % 0.48x 10.0x 0.45x 8.1x Berendsen plc LSE:BRSN $ % $2,970 $3, % 2.10x 6.7x 2.04x 6.3x MITIE Group PLC LSE:MTO $ % $1,972 $2, % 0.62x 12.0x 0.60x 8.6x FirstService Corporation TSX:FSV $ % $1,846 $2, % 0.92x 12.0x 0.83x 9.9x ABM Industries Incorporated ABM $ % $1,529 $1, % 0.37x 10.2x 0.36x 8.1x G&K Inc. GK $ % $1,052 $1, % 1.26x 8.7x 1.26x 8.4x Comfort Systems Inc. FIX $ % $623 $ % 0.44x 9.7x 0.40x 7.6x TRC Companies Inc. TRR $ % $158 $ % 0.41x 5.6x 0.40x 5.5x Mean 95.1% $8,059 $9, % 1.07x 10.6x 1.08x 9.2x Median 96.7% $4,874 $6, % 0.87x 11.4x 0.81x 9.5x 7

9 Recent HW&Co. Business Transactions has merged with and Towne Park Provider of valet parking, parking management, and hospitality services. PMSI Provider of specialty managed care services and products to the workers compensation industry. USIC Provider of outsourced sub-surface utility locating services in the U.S. Jawood National business process solutions and IT consulting firm. Garretson Provider of party-neutral outsourced medical lien resolution and complex settlement administration services. MicroStar Leading provider of keg management and logistics services to the U.S. craft beer industry. Centerplate Provider of event hospitality services to North America s premier sports facilities, convention centers and entertainment venues. RMP Leading provider of healthcare accounts receivable management services Qualawash Provider of environmental services to the bulk transportation industry. CPI Training organization specializing in the safe management of crisis situations. PSSI Provider of outsourced cleaning and sanitation services for the food processing industry. Encore Provider of a broad range of discovery services to major law firms and corporate legal departments across the U.S. 8

10 Business Two International Place 24th Floor Boston, MA Phone: +1 (617) Fax: +1 (617) East 9th Street 20th Floor Cleveland, OH Phone: +1 (216) Fax: +1 (216) Sources: Bloomberg CNBC Manufacturers Alliance for Productivity and Innovation The Atlantic The Economist The Wall Street Journal Reuters CNBC Federal Reserve PNC Economic Outlook S&P Capital IQ Thomson Financial SDC Database United States Census Bureau Bockenheimer Landstrasse Frankfurt am Main Germany Phone: Fax: Brook St London, W1K 4HS United Kingdom Phone: +44 (0) Fax: +44 (0) South Ninth Street Suite 3350 Minneapolis, MN Phone: +1 (612) Fax: +1 (612) Market Street 21st Floor Philadelphia, PA Phone: +1 (267) Fax: +1 (267) Haxall Point 9th Floor Richmond, VA Phone: +1 (804) Fax: +1 (804) Market Street 31st Floor San Francisco, CA Phone: +1 (415) Fax: +1 (415) Harris Williams & Co. ( is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services. Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct its business. THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS AND COPYRIGHTS OWNED BY THIRD-PARTY INFORMATION PROVIDERS. NONE OF THE THIRD-PARTY INFORMATION PROVIDERS IS ENDORSING THE OFFERING OF, AND SHALL NOT IN ANY WAY BE DEEMED AN ISSUER OR UNDERWRITER OF, THE SECURITIES, FINANCIAL INSTRUMENTS OR OTHER INVESTMENTS DISCUSSED IN THIS REPORT, AND SHALL NOT HAVE ANY LIABILITY OR RESPONSIBILITY FOR ANY STATEMENTS MADE IN THE REPORT OR FOR ANY FINANCIAL STATEMENTS, FINANCIAL PROJECTIONS OR OTHER FINANCIAL INFORMATION CONTAINED OR ATTACHED AS AN EXHIBIT TO THE REPORT. FOR MORE INFORMATION ABOUT THE MATERIALS PROVIDED BY SUCH THIRD PARTIES, PLEASE CONTACT US AT THE ABOVE ADDRESSES OR NUMBERS. The information and views contained in this report were prepared by Harris Williams & Co. ( Harris Williams ). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable, but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams judgment and are subject to change without notice. The financial instruments discussed in this report may not be suitable for all investors, and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams prior written consent. Copyright 2014 Harris Williams & Co., all rights reserved. 9