monthly business & tech-enabled services sector summary report

1

BUSINESS AND TECH-ENABLED SERVICESSECTOR REPORT

April 2018

2

GCA OVERVIEWBusiness & Tech-Enabled Services Team

Notes:*Stephen Georgiadis and Alessandro Soprano are Managing Directors at GCA Altium Limited, a wholly-owned subsidiary of GCA Corporation.*Akikazu Ida is a Managing Director at GCA Corporation.*Sascha Pfeiffer and Tobias Schultheiss are Managing Directors at GCA Altium AG, a wholly-owned subsidiary of GCA Corporation.*Sameer Jindal is a Managing Director at GCA India Investment Advisors, a wholly-owned subsidiary of GCA Corporation.

For a complete list of GCA’s global offices, visit www.gcaglobal.com.

New York640 Fifth Avenue, 10

thFl.

New York, NY 10019United States

Phone: (212) 999-7090

Tokyo11-1 Marunouchi 1-chome

Chiyoda-ku, Tokyo 100-6230Japan

Phone: +81 (3) 6212-7100

London1 Southampton St.London WC2R0LRUnited Kingdom

Phone:+44 20 7484 4040

FrankfurtThurn-und-Taxis-Platz 6

60313 FrankfurtGermany

Phone: +49 69 204 34 6410

MilanPiazza San Fedele 4

20121 MilanoItaly

Phone: +39 02 76 01 73 40

Mumbai146, Maker Chambers 6

Nariman Point, Mumbai 400 021India

Phone: +91-22-6106-9000

Derek BellManaging Director

Phone: (212) 999-7089Mobile: (914) 953-0689

[email protected]

Stephen Georgiadis *Managing Director

Phone: +44 207 484 4040Mobile: +44 77770 827335

[email protected]

Akikazu Ida *Managing Director

Phone: +81 (3) 6212-7241Mobile: +81 (80) 9027-3023

[email protected]

Sascha Pfeiffer *Managing Director

Phone: +49 69 204 346 415Mobile: +49 177 741 5643

[email protected]

Tobias Schultheiss *Managing Director

Phone: +49 69 204 346 416Mobile: +49 160 534 6278

[email protected]

Alessandro Soprano *Managing Director

Phone: +39 08 7601 7340Mobile: +39 348 231 6056

[email protected]

James Craven *Managing Director

Phone: +44 207 484 4083Mobile: +44 7884 314 630

[email protected]

Sameer Jindal *Managing Director

Phone: +91 22 6106 9001Mobile: +91 90 0441 4205

[email protected]

3

BUSINESS & TECH-ENABLED SERVICES DEAL DASHBOARD

Notes:Source: Capital IQ and PitchBook. Market Data as of 5/18/18.(1) Business & Tech-Enabled Services is comprised of all of the companies listed under Public Company Valuations.

$112.6 Billion 1,068

M&A Volume YTD M&A Transactions YTD

Quarterly M&A Volume ($Bn) and Deal Count Select M&A Transactions

Announced Date Acquirer Target EV ($MM)

4/30/2018HR Consul t i ng & Ac t ua r i a l Bus.

NA

4/26/2018 $365

4/26/2018 $117

4/26/2018 NA

4/24/2018 $150

4/23/2018 NA

4/20/2018 $1,400

4/18/2018 NA

4/16/2018 $413

4/12/2018(remaining 20% interest)

$14,000

4/12/2018 $330

4/9/2018 $215

4/5/2018(Investment)

NA

4/3/2018 $310

3/29/2018 NA

3/29/2018 NA

Last 12 Months Business & Tech-Enabled Services Performance vs. S&P 500 (1)

90.0%

95.0%

100.0%

105.0%

110.0%

115.0%

120.0%

125.0%

May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18

Business & Tech-Enabled Services S&P 500

$21.7

$48.5

$27.4 $37.1

$26.9

$45.1 $45.5

$14.9

$94.4

$18.2

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18

Vo

lum

e (

$B

n)

986901 929 917 875 894

797 788 788

281

0

200

400

600

800

1000

1200

Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18

Dea

l Cou

nt

4

75%

100%

125%

150%

175%

May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18

80%

90%

100%

110%

120%

130%

140%

150%

May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18

RECENT STOCK PERFORMANCEIndex Performance

Last 12 Months Last 3 Years

Notes:Source: Capital IQ. Market Data as of 5/18/18.Advertising & Marketing Services: ADS, HUBS, IPG, IPS, JCOM, KOSE:A030000, MDCA, MDP, MONY, OMC, PUB, QNST, RATE, TREE, TSE:2433, TSE:4324, WPP, YELP, YOU.Consulting & Training: CBZ, CRAI, EXPO, FC, FCN, GPX, HCKT, HURN, ICFI, III, NCI, RECN.Customer Care /CRM Services: ATTO, CVG, RCF, SNX, SYKE, TSE:4708, TSE:6183, TSE:9715, TTEC.Events & Exhibitions: ASCL, EEX, GLO, ITE, MCHN, TRS, UBM, VVI.HR Services: ADP, BBSI, NSP, PAYX, TNET.Information Services: ABCO, ACXM, CLGX, DNB, EFX, ERM, EXPN, FDS, FICO, FORR, INF, INFO, IT, MCO, MORN, MSCI, NLSN, NRCI.B, NWSA, REL, SCOR, SPGI, TRI, TRU, VRSK, WKL.IT & BPO Services: ACN, ATO, BSE:507685, BSE:526299, BSE:532819, BSE:533179, CAP, CNDT, CPI, CTSH, CVON, DXC, EPAM, EXLS, G, GIB.A, GLOB, HCLTECH, HEXAWARE, IBM, INFY, LXFT, PRFT, PSDO, SYNT, TCS, TECHM, TSE:4307, TSE:9613, VRTU, WNS.Staffing & Recruiting: ADEN, ASGN, HAS, HSII, KELY.A, KFRC, KFY, MAN, PAGE, RAND, RHI, TBI, TSE:2181, TSE:6098.

Key Sector 3 Months 1 Year 3 Years

Advertising & Marketing Services (3.7%) 0.4% 2.1%

Events & Exhibitions 1.0% 36.6% 57.2%

Information Services 5.9% 19.5% 43.3%

Consulting & Training 14.7% 15.4% 27.7%

HR Services 10.1% 13.8% 46.7%

Staffing & Recruiting (1.3%) 34.5% 56.3%

IT & BPO Services (0.4%) 16.7% 22.0%

Customer Care / CRM Services (5.4%) 24.7% 57.2%

S&P 500 0.4% 14.6% 29.5%

5

4.6x

3.6x

3.3x

2.1x

1.6x1.3x

0.8x0.7x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

4.5x

5.0x

InformationServices

Events &Exhibitions

HR Services IT & BPOServices

Advertising &MarketingServices

Consulting &Training

CustomerCare / CRM

Services

Staffing &Recruiting

15.5x

14.6x

13.1x

11.7x 11.6x

9.9x

8.9x8.5x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

18.0x

HR Services InformationServices

Events &Exhibitions


IT & BPOServices



CustomerCare / CRM

Services

TRADING COMPARABLESValuation Metrics

EV / 2018E EBITDA EV / 2018E Revenue

Notes:Source: Capital IQ. Market Data as of 5/18/18. Figures reflect median values, except for HR services, which reflects mean values.Advertising & Marketing Services: ADS, HUBS, IPG, IPS, JCOM, KOSE:A030000, MDCA, MDP, MONY, OMC, PUB, QNST, RATE, TREE, TSE:2433, TSE:4324, WPP, YELP, YOU.Consulting & Training: CBZ, CRAI, EXPO, FC, FCN, GPX, HCKT, HURN, ICFI, III, NCI, RECN.Customer Care /CRM Services: ATTO, CVG, RCF, SNX, SYKE, TSE:4708, TSE:6183, TSE:9715, TTEC.Events & Exhibitions: ASCL, EEX, GLO, ITE, MCHN, TRS, UBM, VVI.HR Services: ADP, BBSI, NSP, PAYX, TNET.Information Services: ABCO, ACXM, CLGX, DNB, EFX, ERM, EXPN, FDS, FICO, FORR, INF, INFO, IT, MCO, MORN, MSCI, NLSN, NRCI.B, NWSA, REL, SCOR, SPGI, TRI, TRU, VRSK, WKL.IT & BPO Services: ACN, ATO, BSE:507685, BSE:526299, BSE:532819, BSE:533179, CAP, CNDT, CPI, CTSH, CVON, DXC, EPAM, EXLS, G, GIB.A, GLOB, HCLTECH, HEXAWARE, IBM, INFY, LXFT, PRFT, PSDO, SYNT, TCS, TECHM, TSE:4307, TSE:9613, VRTU, WNS.Staffing & Recruiting: ADEN, ASGN, HAS, HSII, KELY.A, KFRC, KFY, MAN, PAGE, RAND, RHI, TBI, TSE:2181, TSE:6098.

6

31.7%

24.9%

21.8%

17.0% 17.0%

11.8% 10.5%

6.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

InformationServices

Events &Exhibitions




CustomerCare / CRM

Services


TRADING COMPARABLESOperational Metrics

2018E EBITDA Margin 2019E / 2018E Rev. Growth

Notes:Source: Capital IQ. Market Data as of 5/18/18. Figures reflect median values, except for HR services, which reflects mean values.Advertising & Marketing Services: ADS, HUBS, IPG, IPS, JCOM, KOSE:A030000, MDCA, MDP, MONY, OMC, PUB, QNST, RATE, TREE, TSE:2433, TSE:4324, WPP, YELP, YOU.Consulting & Training: CBZ, CRAI, EXPO, FC, FCN, GPX, HCKT, HURN, ICFI, III, NCI, RECN.Customer Care /CRM Services: ATTO, CVG, RCF, SNX, SYKE, TSE:4708, TSE:6183, TSE:9715, TTEC.Events & Exhibitions: ASCL, EEX, GLO, ITE, MCHN, TRS, UBM, VVI.HR Services: ADP, BBSI, NSP, PAYX, TNET.Information Services: ABCO, ACXM, CLGX, DNB, EFX, ERM, EXPN, FDS, FICO, FORR, INF, INFO, IT, MCO, MORN, MSCI, NLSN, NRCI.B, NWSA, REL, SCOR, SPGI, TRI, TRU, VRSK, WKL.IT & BPO Services: ACN, ATO, BSE:507685, BSE:526299, BSE:532819, BSE:533179, CAP, CNDT, CPI, CTSH, CVON, DXC, EPAM, EXLS, G, GIB.A, GLOB, HCLTECH, HEXAWARE, IBM, INFY, LXFT, PRFT, PSDO, SYNT, TCS, TECHM, TSE:4307, TSE:9613, VRTU, WNS.Staffing & Recruiting: ADEN, ASGN, HAS, HSII, KELY.A, KFRC, KFY, MAN, PAGE, RAND, RHI, TBI, TSE:2181, TSE:6098.

8.6%

7.2%

6.3%

5.7% 5.3% 5.3% 5.1%

4.2%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%



InformationServices

CustomerCare / CRM

Services


Events &Exhibitions


7

GCA OVERVIEWDeep Business & Tech-Enabled Services Sector Expertise

Notes:The above transactions represents a compilation of past and current deals that GCA entities have advised on. Generally, GCA Corporation advises Asian-based transactions, while GCA Advisors, LLC advises U.S.-based transactions and GCA Altium advises UK/European-based transactions. At times, multiple GCA entities may be retained to advise on the same transaction.

Acquired

We Advised the Buyer

Acquired by

We Advised the Seller

Acquired by


Acquired by


Acquired by


Hotel, Rental & Event Production Division

Acquired by


Acquired by

Consortium Led by


Acquired


Acquired by


Acquired by


Acquired


Preferred Stock

Financial Advisor

Acquired


Acquired by


IT Services Business

Acquired


Convertible Note Offering

Financial Advisor

Equity Investment

Financial AdvisorWe Advised the Sellers

to

Sold

Acquired by


Received Minority Investment from

Financial AdvisorWe Advised the Buyer

AcquiredAcquired by

We Advised the SellerWe Advised the Seller

A portfolio company of

Acquired by


We Advised AXIO

Acquired by


Acquired by


Acquired by



Acquired by Management and


Acquired byAcquired by


Investment in


Acquired by


Acquired by


Acquired by

We Advised the SellerWe Advised NorthEdge

Investment in


Acquired by


Acquired by

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