www.harriswilliams.com 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 authorised 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 business.
HW&CO. DEAL SPOTLIGHT a portfolio company of is being acquired by a portfolio company of is being acquired by TRENDS WE ARE SEEING TRANSFORMATION OF THE STAFFING & COMMERCIAL BROKERAGE INDUSTRIES An increasing number of traditional staffing companies have been utilizing M&A to broaden the spectrum of their service offering. Traditional staffing firms are increasingly developing strategies that include both pure staffing solutions, as well as on-site employee management services. TrueBlue s acquisition of SIMOS, a provider of workforce efficiency insourcing solutions, is one example of such an acquisition. Read the article here. In December 2014, Insight Global, a major player in the staffing services industry, acquired Monument Consulting, which expanded Insight Global s solution to include management of contingent labor spend. We have observed a similar trend in the commercial real estate brokerage industry. Traditional commercial brokers, such as JLL and Cushman & Wakefield, are increasingly expanding their stable of services to become fully outsourced providers. For example, CBRE acquired Johnson Controls, Inc. s Global WorkPlace Solutions division, which provides facilities maintenance services to commercial real estate owners. Read the article here. WHAT WE RE READING Harris Williams & Co. served as the advisor to GCA Group ( GCA ) in its pending sale to Goldman Sachs and Thomas H. Lee Partners. The Company is the nation s premier provider of custodial services, facilities maintenance, grounds management, and other outsourced workforce solutions to education and commercial end markets. Founded in 2003, GCA has over 35,000 employees and serves over 960 customers. Read about it here. Harris Williams & Co. served as the advisor to Inventus Solutions, Inc. ( Inventus ) in its pending sale to RPX Corporation (NASDAQ: RPXC). The Company is a premier provider of ediscovery solutions to Fortune 500 companies, global law firms, and government entities. Inventus offers multi-matter data management, ediscovery, attorney review, and managed services in the United States and internationally. Read about it here. TROVER SOLUTIONS COULD BE ACQUIRED BY NEW MOUNTAIN CAPITAL Trover Solutions, a Louisville, Kentucky-based provider of cost containment services and software to the private healthcare payor and property and casualty insurance industries, is to be acquired by New Mountain Capital. The sale was cleared by the Federal Trade Commission on December 8 th. Read the article here. CONTENTS BUSINESS SERVICES UPDATE EQUITY TRADING OVERVIEW ECONOMIC TRENDS M&A MARKET TRENDS PUBLIC COMPARABLES 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 dlewis@harriswilliams.com +1 (804) 915-1118 Bob Baltimore Managing Director bbaltimore@harriswilliams.com +1 (804) 915-1129 John Klim Director jklim@harriswilliams.com +1 (804) 915-0136 Marshall Croft Vice President mcroft@harriswilliams.com +1 (804) 915-0161 CIB MANAGEMENT AND CIB TO BE ACQUIRED BY JLL CIB Management, the largest commercial property manager in the Greater Baltimore area, and CIB, a leading provider of brokerage services, have agreed to be acquired by JLL (NYSE: JLL). The acquisition will significantly increase JLL s size and scope of services in the region. The combined companies will manage approximately 15 million square feet of property in the city. Mark Levy, a Managing Director in JLL s Baltimore office, stated that it s a very complimentary acquisition there s not a lot of overlap. Read the article here. www.harriswilliams.com PAGE 1
12-month % Change in Stock Price BUSINESS SERVICES EQUITY TRADING OVERVIEW KEY TRADING STATISTICS 1,2 Sector Number of Companies Median Enterprise Value ($mm) Change in Stock Price LTM Multiples 2015E 3 mos. 12 mos. EV/EBITDA P/E EV/EBITDA P/E Business Process Outsourcing 11 $5,019 0.1% 25.8% 14.1x 23.3x 11.8x 18.4x Consulting 10 1,285 8.2% (2.4%) 9.6x 22.5x 8.7x 17.4x Human Resources 17 1,352 12.7% 20.5% 11.4x 21.2x 9.1x 15.9x Insurance, Legal, and Risk 7 9,679 3.9% 9.2% 12.4x 21.5x 10.1x 16.1x Marketing & Information 29 6,705 9.8% 12.9% 13.3x 25.9x 12.3x 18.6x Transaction Processing 9 11,301 14.4% 28.8% 15.8x 28.5x 12.8x 21.6x Education & Training 17 339 (7.1%) (30.7%) 5.6x 14.1x 5.8x 14.7x Business Index 100 $5,019 8.2% 12.9% 12.4x 22.5x 10.1x 17.4x As of December 9, 2015 PUBLIC COMPANY SECTOR PERFORMANCE 1,2 40.0% 14.0x 12.6x 13.0x 30.0% 11.9x 12.0x 12.0x 20.0% 10.0% 0.0% 8.6x 10.1x 10.1x 9.8x 8.8x 11.0x 10.0x 9.0x 8.0x 7.0x EV/2015E EBITDA Multiple (10.0%) 5.9x 6.0x 5.0x (20.0%) Business Process Outsourcing Transaction Processing Human Resources Business Index Marketing & Information Insurance, Legal, and Risk NM S&P 500 Consulting Education & Training 4.0x 12-month % Change in Stock Price EV/2015E EBITDA Multiple As of December 9, 2015 PAGE 2
YOY Change Initial Claims Consumer Confidence BUSINESS SERVICES ECONOMIC TRENDS A SNAPSHOT OF KEY ECONOMIC INDICATORS U.S. GDP GROWTH 3 CONS. CONFIDENCE AND UNEMPLOYMENT RATE 4,5 (In trillions of chained 2009 dollars) $16.5 $16.0 10.0% 120.0 100.0 14.0% 12.0% GDP $15.5 $15.0 $14.5 $14.0 $13.5 $13.0 Sep-06 Sep-08 Sep-10 Sep-12 Sep-14 GDP Value Annual Percentage Growth Sources: (1) U.S. Bureau of Economic Analysis 5.0% 0.0% (5.0%) (10.0%) Annual Percentage Growth 80.0 8.0% 60.0 6.0% 40.0 4.0% 20.0 2.0% Consumer Confidence Unemployment Rate 0.0 0.0% Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Sources: (2) The Conference Board and U.S. Bureau of Labor Statistics 10.0% Unemployment Rate NON-FARM PAYROLLS (1-MONTH NET CHANGE) 5 U.S. INITIAL JOBLESS CLAIMS 6 (Payrolls in 000s) (Claims in 000s) 600 400 200 0 (200) (400) (600) (800) Nov 15: 211 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 Nov 15: 276,000 (1,000) Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Sources: (3) Bureau of Labor Statistics Sources: (4) United States Department of Labor CONSUMER PRICE INDEX 5 ISM NON-MANUFACTURING INDEX 7 6.0% 5.0% 4.0% Nov 15 YOY Change: 0.2% 70.0 60.0 Nov 15: 55.9 3.0% 50.0 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 40.0 30.0 20.0 10.0 0.0 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Sources: (5) Bureau of Labor Statistics Sources: (6) The Institute for Supply Management PAGE 3
Number of Deals BUSINESS SERVICES M&A MARKET TRENDS SELECT RECENT M&A TRANSACTIONS Date Target Business Description Acquirer Pending GCA Group, Inc. GCA Group, Inc. provides facility services in the United States and Puerto Rico. Thomas H. Lee Partners, L.P.; The Goldman Sachs Group, Inc. Pending CIB Management, LLC and CIB, LLC CIB Management, LLC and CIB, LLC provides real estate management and brokerage services. Jones Lang LaSalle Incorporated Pending Kurt Salmon US Inc., Certain Operations Kurt Salmon US Inc., provides management consulting services in the United States and internationally. Solucom SA Pending Inventus Solutions, Inc. Inventus Solutions, Inc. provides ediscovery servies to Fortune 500 Companies, Law Firms, and Government entities in the United States and internationally. RPX Corporation 12/15/2015 Beacon Consulting Group, Inc. 12/14/2015 CapTech Ventures, Inc. 12/8/2015 Texas Teachers of Tomorrow, LLC Beacon Consulting Group, Inc. provides advisory and management consulting services to financial and investment firms. CapTech Ventures, Inc., an IT management consulting company, provides transformation, customer engagement, data and analytics, and custom IT solutions for Fortune 500 and government agencies in the United States. Texas teachers of Tomorrow, LLC is a leading alternate certification program that enables individuals to become certified teachers. Accenture plc Markel Ventures Gauge Capital, LLC 12/1/2015 SIMOS Insourcing Solutions, Inc. SIMOS Insourcing Solutions, Inc. provides labor management solutions for manufacturers and distribution centers to control their labor costs. TrueBlue, Inc. 12/1/2015 Advanced Language Translation Inc. Advanced Language Translation, Inc. provides translation services for documents, software, websites, and multimedia projects. Morningside Translations, Inc. 11/9/2015 Precision Resource Company 11/4/2015 TLK Group LLC Precision Resource Company provides staffing services to power generating, transmission, refining, and production facilities in the United States. TLK Group LLC provides call center services focusing on the cable telecommunications industry. System One Holdings, LLC One Equity Partners LLC 10/22/2015 Verisure Holding AB Verisure Holding AB develops, supplies, and installs home security systems in Europe, South America, and internationally. Hellman & Friedman LLC BUSINESS SERVICES M&A VOLUME (BY YEAR) 1,2 3,000 2,500 2,675 2,306 2,460 2,556 2,789 2,340 2,601 2,613 2,000 1,860 1,500 1,000 500 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD Undisclosed <$100M >$100M & <$250M >$250M & <$500M >$500M & <$1.0B >$1.0B+ Source: Capital IQ (1) Represents all announced or closed M&A transactions in the United States and Canada (2) No transaction value provided for undisclosed deals PAGE 4
PUBLIC COMPARABLES PUBLIC COMPANY PERFORMANCE 1,2 Price at As a % of Market Enterprise EBITDA ($ in millions, except per share data) 12/16/15 52-wk High Cap Value (EV) Margins Revenue EBITDA Revenue EBITDA Business Process Outsourcing Tata Consultancy Limited $36.09 85.2% $71,105 $67,897 25.5% 4.4x 17.2x 4.3x 15.1x Cognizant Technology Solutions Corporation 62.42 89.4% 37,956 34,855 19.9% 2.9x 14.7x 2.8x 13.9x Wipro Ltd. 8.32 81.5% 20,419 17,603 22.0% 2.4x 10.7x 2.4x 10.5x Genpact Limited 24.85 95.7% 5,285 5,625 16.9% 2.3x 13.8x 2.3x 13.2x Computershare Limited 8.09 81.7% 4,443 5,656 27.0% 2.9x 10.6x 3.1x 10.5x Computer Sciences Corporation 31.37 42.8% 4,354 5,146 8.5% 0.5x 5.3x 0.5x 2.9x Convergys Corporation 26.40 99.3% 2,575 2,719 12.5% 0.9x 7.3x 0.9x 7.3x WNS (Holdings) Ltd. 31.40 91.4% 1,607 1,478 18.0% 2.7x 15.1x 2.8x 13.1x Exlservice Holdings, Inc. 47.73 99.6% 1,573 1,460 14.7% 2.4x 16.6x 2.3x 13.4x TeleTech Holdings Inc. 29.10 94.6% 1,408 1,438 12.8% 1.1x 8.8x 1.1x 8.8x Sykes Enterprises, Incorporated 31.78 96.3% 1,355 1,198 11.9% 0.9x 7.8x 0.9x 7.9x Mean 87.1% $13,825 $13,189 17.2% 2.1x 11.6x 2.1x 10.6x Median 91.4% $4,354 $5,146 16.9% 2.4x 10.7x 2.3x 10.5x Consulting Accenture plc $109.08 99.3% $68,493 $65,445 16.7% 2.1x 12.6x 2.1x 12.8x CEB Inc. 64.24 70.2% 2,126 2,542 23.6% 2.7x 11.7x 2.7x 10.8x The Advisory Board Company 49.91 82.7% 2,091 2,594 10.5% 3.6x 34.1x 3.3x 15.3x FTI Consulting, Inc. 35.38 76.9% 1,484 1,899 11.4% 1.1x 9.5x 1.1x 9.2x Huron Consulting Group Inc. 56.34 71.4% 1,235 1,641 19.6% 2.0x 10.3x 2.0x 9.5x Navigant Consulting Inc. 16.74 93.3% 797 939 14.7% 1.1x 7.8x 1.1x 8.1x ICF International Inc. 35.41 81.0% 681 1,007 9.9% 0.9x 9.1x 0.9x 8.9x Resources Connection, Inc. 17.25 92.2% 641 539 9.6% 0.9x 9.5x 0.9x 9.5x CBIZ, Inc. 10.37 89.9% 542 741 11.5% 1.0x 8.7x 1.0x 8.3x CRA International Inc. 18.49 56.9% 166 145 9.1% 0.5x 5.2x 0.5x 3.0x Mean 81.4% $7,825 $7,749 13.6% 1.6x 11.8x 1.6x 9.5x Median 81.8% $1,016 $1,324 11.4% 1.1x 9.5x 1.1x 9.3x Human Resources Randstad Holding NV $61.41 86.6% $11,222 $11,727 4.3% 0.6x 13.0x 0.6x 11.3x Towers Watson & Co. 132.49 93.4% 9,200 8,795 19.9% 2.4x 12.1x 2.4x 11.4x ManpowerGroup Inc. 86.67 89.5% 6,380 6,606 4.0% 0.3x 8.5x 0.3x 8.5x Robert Half International Inc. 46.71 73.8% 6,198 5,947 12.4% 1.2x 9.6x 1.2x 9.3x Hays plc 2.11 94.9% 3,015 3,063 4.4% 0.5x 11.5x 0.5x 10.5x On Assignment Inc. 44.72 87.7% 2,361 3,117 10.4% 1.5x 14.5x 1.5x 12.9x Michael Page International plc 7.37 87.7% 2,274 2,116 8.4% 1.3x 15.1x 1.3x 13.2x Korn/Ferry International 34.60 88.9% 1,775 1,492 14.6% 1.4x 9.6x 1.2x 8.2x 51job Inc. 29.58 77.6% 1,738 1,164 30.1% 3.8x 12.5x 3.6x 11.4x USG People NV 14.76 78.0% 1,197 1,420 3.7% 0.5x 13.9x 0.5x 10.7x Insperity, Inc. 47.67 86.0% 1,157 946 3.8% 0.4x 9.8x 0.4x 8.3x TrueBlue, Inc. 26.93 85.5% 1,130 1,221 5.5% 0.5x 8.6x 0.5x 8.3x Kforce Inc. 24.78 84.5% 717 797 5.8% 0.6x 10.5x 0.6x 9.4x SThree Plc. 4.82 81.5% 623 638 4.6% 0.5x 11.2x 0.5x 9.4x Kelly, Inc. 15.94 87.5% 606 638 1.3% 0.1x 9.0x 0.1x 6.6x Heidrick & Struggles International Inc. 27.59 90.1% 507 378 9.5% 0.7x 7.8x 0.7x 7.1x Barrett Business Inc. 44.85 84.6% 323 336 5.4% 0.5x 8.6x 0.1x 7.7x Mean 85.8% $2,966 $2,965 8.7% 1.0x 10.9x 0.9x 9.7x Median 86.6% $1,738 $1,420 5.5% 0.6x 10.5x 0.6x 9.4x Insurance, Legal, and Risk Marsh & McLennan Companies, Inc. $57.33 95.6% $29,906 $33,060 21.7% 2.6x 11.9x 2.6x 11.6x Aon plc 96.92 90.5% 26,548 31,998 21.5% 2.7x 12.8x 2.7x 12.4x Willis Group Holdings Public Limited Company 46.42 92.9% 8,366 10,471 22.0% 2.8x 12.6x 2.7x 12.4x Arthur J Gallagher & Co. 42.53 85.8% 7,515 9,538 14.2% 1.8x 12.9x 1.8x 11.2x Brown & Brown Inc. 32.16 93.0% 4,533 5,234 33.5% 3.2x 9.5x 3.2x 9.7x Epiq Systems, Inc. 14.03 73.5% 526 913 13.3% 1.9x 14.4x 1.8x 8.6x Crawford & Company 5.80 53.9% 305 506 7.1% 0.4x 6.1x 0.4x 5.1x EV / LTM EV / 2015E Mean 83.6% $11,100 $13,103 19.0% 2.2x 11.4x 2.2x 10.1x Median 90.5% $7,515 $9,538 21.5% 2.6x 12.6x 2.6x 11.2x As of December 16, 2015 PAGE 5
PUBLIC COMPARABLES PUBLIC COMPANY PERFORMANCE 1,2 Price at As a % of Market Enterprise EBITDA EV / LTM EV / 2015E ($ in millions, except per share data) 12/16/15 52-wk High Cap Value (EV) Margins Revenue EBITDA Revenue EBITDA Marketing & Information Thomson Reuters Corporation $38.59 95.6% $29,633 $37,608 21.1% 3.1x 14.5x 3.1x 11.0x WPP plc 22.81 95.4% 29,533 34,851 19.2% 1.9x 9.7x 1.9x 11.6x Moody's Corporation 99.32 87.2% 19,636 20,819 45.8% 6.0x 13.0x 6.0x 13.0x Omnicom Group Inc. 74.73 92.3% 18,104 21,305 14.7% 1.4x 9.6x 1.4x 9.6x Nielsen Holdings plc 46.98 95.2% 17,103 24,213 24.9% 3.9x 15.7x 3.9x 13.1x Alliance Data Systems Corporation 273.30 87.6% 16,709 31,027 26.0% 5.0x 19.3x 4.8x 16.4x Experian plc 17.26 92.3% 16,629 19,969 31.9% 4.3x 13.4x 4.3x 11.1x Publicis Groupe SA 65.68 75.8% 13,672 16,899 18.3% 1.8x 9.8x 1.6x 9.3x Equifax Inc. 112.95 98.7% 13,382 14,606 34.8% 5.6x 16.0x 5.5x 15.8x Verisk Analytics, Inc. 78.82 96.1% 13,354 16,380 46.8% 8.3x 17.8x 7.9x 16.6x Wolters Kluwer NV 33.43 91.3% 9,755 12,048 24.9% 2.7x 11.0x 2.7x 10.6x The Interpublic Group of Companies, Inc. 22.83 96.2% 9,277 10,147 13.2% 1.3x 10.1x 1.3x 9.8x IHS Inc. 118.77 87.9% 8,098 9,942 25.3% 4.3x 17.0x 4.3x 13.5x CoStar Group Inc. 207.98 93.1% 6,757 6,752 11.7% 10.0x 85.2x 9.5x 55.3x FactSet Research Systems Inc. 161.80 91.3% 6,699 6,795 35.8% 6.6x 18.3x 6.6x 18.0x Informa plc 8.98 95.8% 5,822 7,256 30.7% 3.9x 12.7x 4.0x 12.6x DST Systems Inc. 116.56 86.6% 4,033 4,646 14.6% 1.7x 11.3x 2.1x 10.6x Dun & Bradstreet Corp. 105.88 77.1% 3,826 5,292 25.1% 3.1x 12.4x 3.2x 10.9x Morningstar Inc. 82.28 94.7% 3,638 3,375 31.6% 4.3x 13.6x 4.3x 13.2x Havas 8.38 90.6% 3,500 3,647 16.2% 1.6x 10.0x 1.5x 9.3x UBM plc 7.52 86.9% 3,328 4,155 23.2% 3.1x 13.6x 2.9x 10.9x CoreLogic, Inc. 37.31 88.2% 3,289 4,514 22.7% 3.0x 13.4x 3.0x 10.7x Fair Isaac Corporation 92.85 95.2% 2,885 3,407 22.6% 4.1x 18.0x 4.0x 17.3x Acxiom Corporation 22.35 95.4% 1,740 1,769 15.2% 1.7x 11.2x 2.0x 11.9x comscore, Inc. 38.06 58.6% 1,483 1,372 6.4% 3.8x 59.6x 3.7x 14.9x Viad Corp 30.10 91.5% 606 648 7.4% 0.6x 8.2x 0.6x 8.0x Forrester Research Inc. 29.72 73.9% 527 423 11.1% 1.4x 12.1x 1.4x 13.0x Harte-Hanks Inc. 3.53 42.7% 216 267 9.0% 0.5x 5.8x 0.5x 6.5x QuinStreet, Inc. 4.73 69.3% 213 167 NM 0.6x NM 0.6x 18.1x Mean 87.0% $9,084 $11,183 22.5% 3.4x 17.2x 3.4x 13.9x Median 91.3% $6,699 $6,795 22.6% 3.1x 13.2x 3.1x 11.9x Transaction Processing Automatic Data Processing, Inc. $86.20 95.1% $39,756 $38,539 20.9% 3.5x 16.7x 3.4x 16.9x Fidelity National Information, Inc. 62.03 84.3% 20,246 24,775 25.9% 3.9x 14.9x 3.8x 12.3x Paychex, Inc. 54.06 98.7% 19,491 19,014 42.8% 6.7x 15.6x 6.7x 15.7x Total System, Inc. 55.88 98.6% 10,281 11,253 24.2% 4.2x 17.2x 4.1x 13.5x The Western Union Company 18.52 81.1% 9,358 11,308 25.5% 2.1x 8.1x 2.1x 8.1x Vantiv, Inc. 49.70 93.0% 7,763 10,641 22.4% 3.5x 15.6x 6.4x 13.1x Jack Henry & Associates Inc. 77.74 97.3% 6,214 6,130 35.1% 4.8x 13.7x 4.7x 13.6x Heartland Payment Systems, Inc. 94.97 98.4% 3,491 3,946 7.8% 1.5x 19.5x 4.8x 17.7x VeriFone Systems, Inc. 26.38 67.2% 3,032 3,623 14.0% 1.8x 12.9x 1.8x 10.0x Mean 90.4% $13,292 $14,359 24.3% 3.5x 14.9x 4.2x 13.4x Median 95.1% $9,358 $11,253 24.2% 3.5x 15.6x 4.1x 13.5x As of December 16, 2015 PAGE 6
PUBLIC COMPARABLES PUBLIC COMPANY PERFORMANCE 1,2 Price at As a % of Market Enterprise EBITDA ($ in millions, except per share data) 12/16/15 52-wk High Cap Value (EV) Margins Revenue EBITDA Revenue EBITDA Education & Training Pearson plc $11.16 49.7% $9,049 $12,837 11.4% 1.6x 14.3x 1.7x 9.6x John Wiley & Sons Inc. 44.99 68.7% 2,611 3,193 18.5% 1.8x 9.8x 1.8x 8.4x Grand Canyon Education, Inc. 39.55 81.9% 1,864 1,785 31.1% 2.4x 7.6x 2.3x 7.2x DeVry Education Group Inc. 25.23 51.7% 1,601 1,165 15.2% 0.6x 4.1x 0.6x 4.1x Scholastic Corporation 41.19 89.0% 1,472 1,132 5.1% 0.7x 13.6x 0.7x 9.1x Apollo Education Group, Inc. 7.77 22.5% 837 184 13.1% 0.1x 0.5x 0.1x 0.6x Strayer Education Inc. 58.05 77.4% 640 553 20.4% 1.3x 6.2x 1.3x 6.2x Capella Education Co. 48.68 62.9% 581 454 17.5% 1.1x 6.0x 1.1x 5.0x GP Strategies Corp. 25.64 67.7% 437 484 8.9% 1.0x 11.1x 1.0x 12.1x K12, Inc. 9.39 53.0% 366 242 5.9% 0.3x 4.4x 0.3x 2.8x Bridgepoint Education, Inc. 7.79 67.3% 357 92 8.7% 0.2x 1.8x 0.2x 2.1x American Public Education, Inc. 20.81 55.6% 339 225 22.1% 0.7x 3.1x 0.7x 3.2x Franklin Covey Co. 16.26 77.7% 264 274 13.9% 1.3x 9.4x 1.3x 9.1x Cambium Learning Group, Inc. 5.06 84.8% 231 338 16.0% 2.4x 14.8x NA NA Universal Technical Institute, Inc. 3.97 38.0% 96 83 5.5% 0.2x 4.2x 0.2x 4.4x ITT Educational Inc. 3.62 35.8% 86 203 16.4% 0.2x 1.4x 0.2x 2.2x Lincoln Educational Corporation 2.04 63.6% 49 96 6.7% 0.3x 4.6x 0.3x 7.1x Mean 61.6% $1,228 $1,373 13.9% 0.9x 6.9x 0.9x 5.8x Median 63.6% $437 $338 13.9% 0.7x 6.0x 0.7x 5.6x Facility Compass Group PLC $17.24 95.3% $28,363 $32,389 9.1% 1.2x 13.4x 1.2x 12.8x Sodexo S.A. 99.04 94.1% 15,081 16,326 7.1% 0.7x 10.4x 0.8x 10.7x Cintas Corporation 91.24 96.7% 9,850 10,478 19.2% 2.2x 11.7x 2.2x 11.9x Aramark 32.67 93.2% 7,858 13,087 8.0% 0.9x 11.4x 0.9x 10.1x ISS A/S 35.87 95.9% 6,596 8,687 6.4% 0.7x 11.6x 0.7x 11.4x Rentokil Initial plc 2.33 97.0% 4,238 5,364 22.8% 2.0x 8.6x 2.0x 8.7x EMCOR Group Inc. 48.88 93.3% 3,066 2,942 5.3% 0.4x 8.3x 0.4x 8.2x Berendsen plc 15.82 92.1% 2,684 3,311 31.5% 2.1x 6.6x 2.2x 6.7x ABM Industries Incorporated 29.11 85.6% 1,635 1,738 3.0% 0.4x 11.8x 0.3x 8.1x MITIE Group PLC 4.53 89.7% 1,607 1,947 6.3% 0.6x 8.9x 0.6x 8.5x FirstService Corporation 41.89 99.5% 1,508 1,657 5.9% 1.3x 22.8x 1.3x 15.8x G&K Inc. 64.89 87.6% 1,299 1,538 15.0% 1.6x 10.9x 1.6x 9.4x Comfort Systems USA Inc. 31.10 88.9% 1,160 1,126 6.7% 0.7x 10.9x 0.7x 10.4x TRC Companies Inc. 10.06 81.8% 310 262 10.0% 0.6x 6.3x NA NA EV / LTM EV / 2015E Mean 93.3% $8,098 $9,627 11.9% 1.1x 10.3x 1.1x 9.7x Median 93.7% $5,417 $7,026 7.6% 0.8x 10.9x 0.8x 9.4x As of December 16, 2015 PAGE 7
OUR FIRM Harris Williams & Co. has a broad range of industry expertise, which creates powerful opportunities. Our clients benefit from our deep-sector experience, integrated industry intelligence and collaboration across the firm, and our commitment to learning what makes them unique. For more information, visit our website at www.harriswilliams.com/industries. Aerospace, Defense & Government Building Products & Materials Business Consumer Energy, Power & Infrastructure Healthcare & Life Sciences Industrials Specialty Distribution Technology, Media & Telecom Transportation & Logistics HARRIS WILLIAMS & CO. OFFICE LOCATIONS Boston Two International Place 24th Floor Boston, Massachusetts 02110 Phone: +1 (617) 482-7501 Cleveland 1900 East 9th Street 20th Floor Cleveland, Ohio 44114 Phone: +1 (216) 689-2400 Minneapolis 222 South 9th Street Suite 3350 Minneapolis, Minnesota 55402 Phone: +1 (612) 359-2700 UNITED STATES Richmond (Headquarters) 1001 Haxall Point 9th Floor Richmond, Virginia 23219 Phone: +1 (804) 648-0072 San Francisco 575 Market Street 31st Floor San Francisco, California 94105 Phone: +1 (415) 288-4260 EUROPE Frankfurt Bockenheimer Landstrasse 33-35 60325 Frankfurt Germany Phone: +49 069 3650638 00 London 63 Brook Street London W1K 4HS, England Phone: +44 (0) 20 7518 8900 Beijing Hong Kong Mumbai NETWORK OFFICES New Delhi Shanghai PAGE 8
HARRIS WILLIAMS & CO. BUSINESS SERVICES SOURCES (1) S&P Capital IQ (2) Thompson Reuters (3) U.S. Bureau of Economic Analysis (4) The Conference Board (5) U.S. Bureau of Labor Statistics (6) U.S. Department of Labor (7) Business Wire (8) Street Insider (9) Angelo, Gordon & Co. (10) Baltimore Business Journal DISCLOSURES Harris Williams & Co. (www.harriswilliams.com) 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 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 2015 Harris Williams & Co., all rights reserved. PAGE 10