Quarterly Update - Bowstring Advisors · Business Services & Technology M&A volume was up in 1Q 2014 vs. 4Q 2013 and up year-over-year. We noted a total of 1,384 transactions in 1Q

Quarterly Update

INSIDE THIS ISSUE

The First Word: Conference Attendees Bullish

CHILDS Advisory Partners recently hosted the 5th annual CHILDS Conference in Atlanta on May

1st. It was our best event yet with over 250 people attending, including over 70 private equity

professionals.

Our keynote speaker, Mike Ettling (CEO of SAP HR), addressed the global trends in both HR tech

and cloud computing. Mike’s perspective was especially enlightening due to the recent trend

toward SaaS that is impacting every category of both the software and services industries. SAP’s

acquisition of Fieldglass is a great example of the increasing importance of this space.

We were also lucky enough to have Sandra Notardonato from Gartner, Inc. discuss the

worldwide growth of end-user IT spending and the drivers of growth for the transforming IT

landscape. Clearly, there is a shift within IT spending towards more marketing and specialized

strategy influence as social media and mobile rule the day on both the B2C and B2B fronts.

Gartner was nice enough to post some its most relevant research on our website for you to

access (CHILDSAdvisoryPartners.com).

Ed Lenz, Senior Counsel for the American Staffing Association and one of the foremost

authorities on the Affordable Care Act (“Obamacare”), led a panel on the influence of the new

legislation and its impact to both services and technology firms. Understandably, this event was

standing room only. While Obamacare does present some challenges, it also offers

opportunities for firms in benefits administration and workforce management.

The conference concluded with sportscaster Bill Macatee sharing some great stories from his

experiences working behind the scenes at the Masters and US Open tennis tournament. Not

only is Bill well known from his work in television, but he has also become a very savvy investor.

Besides shameless self-promotion, our objective for the conference is to provide a safe and

candid environment where business owners can meet peers and swap ideas to drive value in

their own businesses. As Steve Covey preaches, “Begin With the End in Mind.” This is great

advice for anyone who has personal or business goals they want to achieve. I am pleased the

day was valuable to all who attended and I am hoping we are able to host an even better event

next spring.

We have closed 8 transactions thus far in 2014, including two in Europe, for our best start ever.

In June, two new Managing Directors join our team along with our latest Analyst class, which

will bring our team of bankers to 25 strong. We expect the positive start to continue through

the rest of 2014 as debt continues to be attractive, private equity continues to be active, and

business results trend positive. Thank you to all of our clients who have trusted us to deliver

superior results for them and their shareholders.

Have a great summer!

Jim Childs

The First Word 1

Selected Transactions 2

Market Update 3

Sector Updates 4

About CHILDS 12

CHILDS News and Events

5/9/14 CHILDS advises iSense on its sale to Manpower 5/2/14 CHILDS advises Vonlay on its sale to Huron Consulting 5/1/14 CHILDS hosts the 5th Annual CHILDS Conference in Atlanta, GA 4/23/14 CHILDS advises Nexus IS on its sale to Dimension Data 4/4/14 CHILDS advises Workforce Insight on its recapitalization by Baird Capital 4/4/14 CHILDS advises Counsel On Call on its recapitalization by Gridiron Capital 2/27/14 CHILDS advises ettain on its recapitalization by New MainStream Capital 2/14/14 CHILDS advises Vistex on its acquisition of Counterpoint Systems 2/4/14 CHILDS advises Vistex on its acquisition of hawkeye Channel 12/20/13 CHILDS advises Symmetry on its recapitalization by Great Hill Partners 12/17/13 CHILDS wins award for 2013 “Corporate/Strategic Acquisition of the Year ($50 - $250 million)” at M&A Advisor Awards Gala CHILDS Advisory Partners 3438 Peachtree Road NE Phipps Tower, Suite 1400 Atlanta, GA 30326 Phone: 404.751.3000 Fax: 404.751.3001 www.childsadvisorypartners.com

1Q 2014

http://www.childsadvisorypartners.com/about/2014CAPconferenceV2.php

Page | 2

CHILDS Quarterly Update: 1Q 2014

Recent CHILDS Transactions

October 2012

has been recapitalized by

February 2013

has been acquired by

March 2013

has merged with aa subsidiary of

ConversionCapital

August 2013


May 2013


October 2013


March 2013


A Portfolio Company of Kayne Anderson

September 2013


July 2013


November 2013

has merged with

November 2013


A portfolio company of Snow Phipps

December 2013


February 2014


February 2014


February 2014


April 2014


April 2014


April 2014


May 2014


May 2014


Page | 3


Business Services & Technology Market Update

CHILDS Advisory Partners (“CHILDS”) tracks a list of publicly traded companies in our core sectors. The CHILDS Business Services

& Technology Index has outperformed the S&P 500 Index by approximately 17% over the past year.

Note: The CHILDS Business Services & Technology Index is made up of select public companies in the following sectors: IT/Professional Services, Software, Business

Process Outsourcing, Human Capital Management, Marketing & Information Services and Facilities Services. Index data as of May 15, 2014.

Business Services & Technology M&A Transactions by Quarter (2005 – 1Q 2014)

Business Services & Technology M&A volume was up in 1Q 2014 vs. 4Q 2013 and up year-over-year. We noted a total of 1,384

transactions in 1Q 2014 compared to 1,379 transactions noted in 4Q 2013 and 1,324 in 1Q 2013.

Source: CHILDS database and Capital IQ

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Sector Update: Technology and Professional Services

IT/Professional Services Comparable Public Company Analysis

Public Company Stock Performance Over the past year, the Mid-Market Consulting, VARs/System Integrators, and Federal IT Services indices outperformed the S&P 500 by approximately 19%, 12%, and 2%, respectively. The Managed Services index continues to lag the market, underperforming the S&P by approximately 20%.

Mid-Market Consulting Federal IT Services

The average LTM EBITDA multiple is 10.1x, which is lower than last quarter’s multiple of 10.5x.

The average LTM EBITDA multiple increased to 8.3x in the first quarter, up from 7.7x in the fourth quarter.

Managed Services VARs/System Integrators

The average LTM EBITDA multiple has increased to 11.6x in 1Q 2014 from 9.0x in the fourth quarter.

The average LTM EBITDA multiple is 6.5x, a decrease from last quarter’s multiple of 8.1x.

*Excluded from average calculations. LTM = Last Twelve Months. Data obtained from Capital IQ. Stock prices as of May 15, 2014 in US$.

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Mid-Market Consulting Services Federal IT Services Managed Services VARs/System Integrators S&P 500 Index

Enterprise Value /

Company Name Stock Price

% of 52

Wk High

LTM

Revenue

LTM

EBITDA

Ciber, Inc. $4.35 88.6% 0.4x 11.8x

CRA International Inc. $20.40 85.6% 0.6x 6.4x

Edgewater Technology Inc. $7.42 83.6% 0.7x 8.3x

Exponent Inc. $66.72 82.9% 2.6x 11.5x

FTI Consulting, Inc. $29.58 63.3% 1.1x 8.0x

Huron Consulting Group Inc. $65.01 90.7% 2.1x 9.9x

Mattersight Corporation $4.90 62.4% 2.9x NM

Navigant Consulting Inc. $16.54 83.6% 1.3x 8.0x

Perficient Inc. $16.82 69.8% 1.7x 12.9x

Resources Connection Inc. $12.42 77.9% 0.7x 9.2x

Sapient Corp. $17.05 95.0% 1.6x 12.8x

The Hackett Group, Inc. $5.99 80.1% 1.0x 11.4x

Towers Watson & Co. $109.48 83.1% 2.0x 10.9x

Average 80.5% 1.4x 10.1x

Enterprise Value /


% of 52

Wk High

LTM

Revenue

LTM

EBITDA

CACI International Inc. $71.60 88.6% 0.8x 8.9x

ICF International Inc. $35.75 80.6% 0.9x 9.4x

ManTech International $29.77 95.1% 0.5x 6.7x

Science Applications International $37.52 93.8% 0.5x 8.1x

Tyler Technologies, Inc. $76.81 71.1% 5.6x 28.8x *

Average 85.9% 1.7x 8.3x

Enterprise Value /


% of 52

Wk High

LTM

Revenue

LTM

EBITDA

CenturyLink, Inc. $37.83 99.4% 2.3x 5.8x

Equinix, Inc. $195.92 84.9% 6.1x 14.7x

Internap Network Services Corp. $7.16 78.7% 2.4x 15.6x

Limelight Networks, Inc. $2.07 80.9% 0.5x NM

Rackspace Hosting, Inc. $30.68 56.6% 2.6x 10.0x

Average 80.1% 2.8x 11.6x

Enterprise Value /


% of 52

Wk High

LTM

Revenue

LTM

EBITDA

Atos S.A. $82.70 84.3% 0.6x 5.4x

Black Box Corporation $21.79 69.0% 0.5x 7.3x

Cap Gemini S.A. $69.56 87.6% 0.7x 7.8x

Datalink Corporation $8.82 55.7% 0.2x 6.0x

ePlus inc. $49.79 74.3% 0.5x 6.1x

Average 74.2% 0.5x 6.5x

Page | 5


BPO Comparable Public Company Analysis

Public Company Stock Performance In the last twelve months, the Major BPO and Teleservices, and Mid-Market BPO segments have outperformed the S&P 500 by approximately 9%, 7%, and 1%, respectively.

Major BPO Mid-Market BPO

The average LTM EBITDA multiple is 9.8x this quarter, down from last quarter’s multiple of 9.9x.

The average LTM EBITDA multiple is 9.2x this quarter, a decrease from last quarter’s multiple of 10.0x.

Teleservices

The average LTM EBITDA multiple has increased to 8.6x from 7.8x in the fourth quarter of 2013.


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Major BPO Mid-Market BPO Teleservices S&P 500 Index


% of 52

Wk High

LTM

Revenue

LTM

EBITDA

Accenture plc $78.42 91.3% 1.6x 10.5x

CGI Group, Inc. $33.79 88.7% 1.4x 8.9x

Cognizant Technology Solutions Corporation$47.18 87.4% 2.7x 12.7x

Computer Sciences Corporation $61.23 94.6% 0.7x 4.3x

Convergys Corporation $21.81 89.3% 1.2x 9.9x

Genpact Limited $17.17 80.6% 1.8x 9.9x

Infosys Ltd. $55.13 85.0% 3.2x 11.6x

Iron Mountain Inc. $29.60 75.6% 3.2x 11.4x

Pitney Bowes Inc. $25.85 93.7% 2.0x 9.6x

Tata Consultancy Services Limited $36.97 92.0% 5.1x * 16.5x

Unisys Corporation $22.17 61.5% 0.2x 3.2x

Wipro Ltd. $8.70 84.6% 2.6x 11.6x

Xerox Corporation $11.86 93.8% 1.0x 7.7x

Average 86.0% 1.8x 9.8x

Enterprise Value /


% of 52

Wk High

LTM

Revenue

LTM

EBITDA

Aditya Birla Nuvo Limited $19.54 89.9% 1.0x 5.9x

Epiq Systems, Inc. $12.41 73.9% 1.6x 10.7x

HCL Technologies Ltd. $23.66 88.4% 3.2x 12.5x

Hexaware Technologies Limited $2.32 76.4% 1.5x 6.7x

iGATE Corporation $35.50 85.7% 2.8x 11.9x

ITC Limited $6.20 96.8% 9.0x * 25.3x *

MphasiS Limited $6.57 76.0% 1.1x 6.3x

Syntel, Inc. $78.13 80.4% 3.2x 9.1x

Tech Mahindra Limited $30.84 94.5% 2.1x 10.3x

Average 84.7% 2.1x 9.2x

Enterprise Value /


% of 52

Wk High

LTM

Revenue

LTM

EBITDA

Convergys Corporation $21.81 89.3% 1.2x 9.9x

StarTek, Inc. $6.89 92.1% 0.4x 10.0x

Sykes Enterprises, Incorporated $20.04 86.0% 0.6x 6.4x

TeleTech Holdings Inc. $25.90 95.7% 1.1x 8.1x

Average 90.8% 0.8x 8.6x

Enterprise Value /

Page | 6


IT/Professional Services and BPO Notable Transactions

Date

Closed Buyer Target Target Description/Comment

4/21/2014 Dimension Data Nexus IS National provider of professional, cloud, consulting, and managed services for advanced IT solutions

4/10/2014 Cancom DIDAS Business Services IT services and solutions in the fields of professional, managed, and cloud services

4/08/2014 Baird Capital Workforce Insight Strategic workforce management consulting and implementation services

03/17/2014 ICF International CITYTECH Digital interactive consultancy

03/05/2014 L-3 Communications Data Tactics Provides solutions for data analysis, cloud computing, cybersecurity, research, and software development

03/04/2014 KPMG Synergy Systems Mobility services business and digital experience company

02/27/2014 Cancom HPM Operates as a value-added reseller in the cloud infrastructure environment

02/19/2014 ManTech International Corporation

Allied Technology Group Engineering and information management solutions company

02/17/2014 PricewaterhouseCoopers Mokum Change Management

IT consultancy focused on implementing Oracle applications, managing services and other associated software

02/03/2014 Accenture ClientHouse Independent provider of salesforce.com and Veeva Systems solutions

01/06/2014 Virtusa TradeTech Consulting and IT services provider specializing in treasury and asset management

Page | 7


Software Comparable Public Company Analysis

Public Company Stock Performance Over the last twelve months, the Auto Tech index outperformed the S&P 500 by approximately 11%, while the Engineering and ERP indices matched the market. The Industrial and HR Tech indices underperformed the S&P 500 by approximately 6% and 11%, respectively.

HR Technology Engineering

The average LTM EBITDA multiple this quarter has decreased to 20.7x from 26.6x in the fourth quarter of 2013.

The average LTM EBITDA multiple for 1Q 2014 is 22.9x, down from 30.0x in the fourth quarter of 2013.

Enterprise Resource Planning Automotive OEM and Dealership Systems

The average LTM EBITDA multiple decreased to 12.7x in the first quarter, down from 14.4x in the fourth quarter of 2013.

The average LTM EBITDA multiple this quarter has increased to 22.9x from 19.6x in the fourth quarter of 2013.


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Auto Tech Engineering ERP HR Tech Industrial Automation S&P 500 Index

Enterprise Value /


% of 52 Wk

High

LTM

Revenue

LTM

EBITDA

51job Inc. $61.63 71.7% 4.9x 15.3x

Automatic Data Processing, Inc. $76.75 91.6% 3.0x 14.2x

Bond International Software plc $2.18 94.9% 1.5x 16.4x

Callidus Software Inc. $10.31 66.5% 3.9x NM

Cornerstone OnDemand, Inc. $38.52 62.3% 9.6x NM

Dice Holdings, Inc. $6.95 70.5% 2.1x 7.6x

Halogen Software Inc. $8.22 55.7% 2.5x NM

Healthstream Inc. $24.69 62.1% 4.1x 24.2x

LinkedIn Corporation $147.86 57.4% 9.4x 94.4x *

Saba Software, Inc. $9.80 70.5% 0.0x NM

Paychex, Inc. $40.42 88.0% 5.8x 13.2x

Paylocity Holding Corporation $16.41 52.9% 7.2x NM

The Ultimate Software Group, Inc. $117.21 68.2% 7.5x 51.0x

WageWorks, Inc. $37.82 55.4% 4.4x 23.9x

Workday, Inc. $70.69 60.7% 24.8x * NM

Average 68.5% 4.7x 20.7x

Enterprise Value /


% of 52 Wk

High

LTM

Revenue

LTM

EBITDA

3D Systems Corp. $47.83 49.2% 8.3x 43.0x

Ansys, Inc. $73.71 82.2% 6.8x 14.5x

Aspen Technology, Inc. $44.49 91.9% 10.3x * 34.2x

Autodesk, Inc. $47.82 81.5% 4.1x 24.2x

Aveva Group plc $36.31 81.0% 5.6x 18.9x

Cadence Design Systems Inc. $15.55 95.7% 2.8x 14.4x

Dassault Systemes SA $123.22 87.2% 4.7x 15.7x

ESI Group SA $39.79 98.3% 1.5x 22.3x

Exa Corporation $8.88 54.1% 1.8x 47.7x

Mentor Graphics Corp. $20.18 83.0% 1.9x 9.3x

Nemetschek AG $89.89 97.3% 2.9x 14.0x

PDF Solutions Inc. $18.62 69.7% 4.5x 12.8x

PTC Inc. $34.89 86.4% 3.2x 13.7x

Stratasys Ltd. $88.44 64.0% 7.0x 44.5x

Synopsys Inc. $37.88 91.0% 2.6x 14.0x

The ExOne Company $25.50 32.4% 7.5x NM

Average 77.8% 4.4x 22.9x

Enterprise Value /


% of 52 Wk

High

LTM

Revenue

LTM

EBITDA

American Software, Inc. $9.04 81.3% 1.9x 11.4x

Concur Technologies, Inc. $79.01 60.6% 6.9x 170.2x *

E2open, Inc. $16.25 54.5% 5.9x NM

Exact Holding NV $36.17 92.6% 2.5x 12.3x

Industrial & Financial Systems IFS AB $29.24 96.5% 1.6x 12.7x

Microsoft Corporation $39.60 95.1% 3.2x 8.2x

NetSuite Inc. $71.78 59.4% 11.8x * NM

Oracle Corporation $41.93 99.4% 4.6x 10.6x

QAD Inc. $19.87 91.8% 0.9x 18.0x

Sage Group plc $6.59 89.2% 3.5x 11.9x

SAP AG $76.14 86.7% 3.9x 11.3x

Selectica, Inc. $6.00 66.7% 1.5x NM

The Descartes Systems Group Inc $12.62 80.7% 5.0x 17.9x

Average 81.1% 3.5x 12.7x

Enterprise Value /


% of 52 Wk

High

LTM

Revenue

LTM

EBITDA

Autobytel Inc. $11.75 62.4% 1.2x 17.4x

AutoNation Inc. $54.32 96.8% 0.6x 13.3x

AutoZone, Inc. $524.28 93.4% 2.3x 10.5x

Dealertrack Technologies, Inc. $38.66 65.7% 5.0x 50.3x

Equifax Inc. $70.39 96.6% 4.4x 12.5x

Exa Corporation $8.88 54.1% 1.8x 47.7x

LKQ Corp. $28.36 82.6% 1.9x 15.3xSolera Holdings Inc. $65.39 91.9% 6.3x 16.3x

Average 80.4% 2.9x 22.9x

Page | 8


Industrial Automation

The average LTM EBITDA multiple this quarter has decreased to 10.6x, down from 11.0x in the fourth quarter of 2013.


Software Notable Transactions

Date


04/16/2014 GE Healthcare Information Technologies

CHCA Computer Systems Operating room management and analytics solutions provider

04/02/2014 John Wiley & Sons Profiles International Provider of employment assessment and talent management solutions

03/27/2014 SAP Fieldglass Provider of Vendor Management System services deployed in the cloud

02/17/2014 Vistex Counterpoint Systems Software solutions for rights management, royalty processing, and licensing for the music, media, and entertainment industries

02/04/2014 Vistex hawkeye Channel Software solutions that drive channel revenue growth for enterprise marketers

01/28/2014 AOL Project Rover Multi-screen content optimization and personalization

01/23/2014 Demandware Mainstreet Commerce Provider of cloud-based order management solutions

01/23/2014 The Gores Group Zmags Global provider of digital publishing and eCommerce Software-as-a-Service solutions

01/21/2014 Yahoo! Inc. Sparq Mobile marketing service provider

Enterprise Value /


% of 52 Wk

High

LTM

Revenue

LTM

EBITDA

ABB Ltd. $23.70 85.0% 1.4x 10.5x

Echelon Corporation $2.42 57.9% 0.7x NM

Honeywell International Inc. $91.16 95.1% 1.9x 11.1x

International Business Machines Corporation$186.46 88.0% 2.3x 8.9x

National Instruments Corporation $27.54 83.6% 2.6x 19.2x *

Rockwell Automation Inc. $119.77 93.2% 2.5x 13.2x

Schneider Electric S.A. $90.61 93.5% 1.7x 10.8x

Siemens Aktiengesellschaft $132.49 95.4% 1.2x 11.0xYokogawa Electric Corp. $12.40 72.1% 0.9x 8.9x

Average 84.9% 1.7x 10.6x

Page | 9


Sector Update: Business Services

HCM Comparable Public Company Analysis

Public Company Stock Performance The HCM segments that we track have outperformed or matched the S&P 500 over the past twelve months. The Search, Commercial/Multi-line, and IT/Professional segments outperformed the market by approximately 48%, 26%, and 12%, respectively. The HRO segments matched the performance of the S&P over the past twelve months.

es

Commercial & Multi-Line Staffing IT & Professional Staffing

The average LTM EBITDA multiple for 1Q 2014 has decreased to 10.5x from 11.9x in the fourth quarter of 2013.

The average LTM EBITDA multiple remained at 10.9x for the first quarter of 2014.

Executive Search HR Outsourcing

The average LTM EBITDA multiple increased to 9.0x this quarter from 7.1x in the fourth quarter of 2013.

The average LTM EBITDA multiple is 10.8x for the first quarter, down from 11.3x in the fourth quarter of 2013.

*Excluded from average calculations. LTM = Last Twelve Months. Data obtained from Capital IQ. Stock price as of May 15, 2014 in US$.

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C/ML IT/Prof Search HRO S&P 500 Index

Enterprise Value /


% of 52 Wk

High

LTM

Revenue

LTM

EBITDA

Adecco S.A. $81.21 90.5% 0.6x 12.2x

Kelly Services, Inc. $18.25 69.7% 0.1x 8.9x

ManpowerGroup Inc. $80.17 92.0% 0.3x 8.6x

Randstad Holding NV $55.42 81.0% 0.5x 13.1x

TrueBlue, Inc. $25.55 83.4% 0.5x 10.0x

Average 83.3% 0.4x 10.5x

Enterprise Value /


% of 52 Wk

High

LTM

Revenue

LTM

EBITDA

CDI Corp. $13.77 71.8% 0.3x 8.4x

Computer Task Group Inc. $15.34 58.8% 0.6x 9.7x

Kforce Inc. $21.59 90.7% 0.7x 13.5x

Mastech Holdings, Inc. $16.82 84.2% 0.7x 12.3x

On Assignment Inc. $35.09 88.0% 1.3x 14.3x

RCM Technologies Inc. $6.20 85.9% 0.4x 7.7x

Robert Half International Inc. $44.54 97.5% 1.4x 12.8x

AMN Healthcare Services Inc. $10.90 67.3% 0.7x 8.3xCross Country Healthcare, Inc. $5.57 48.3% 0.4x 34.1x *

Average 76.9% 0.7x 10.9x

Enterprise Value /


% of 52 Wk

High

LTM

Revenue

LTM

EBITDA

CTPartners Executive Search Inc. $9.24 76.9% 0.6x 9.7x

Heidrick & Struggles International Inc. $18.19 87.2% 0.6x 7.3x

Korn/Ferry International $28.91 94.0% 1.3x 10.1x

Average 86.0% 0.8x 9.0x

Enterprise Value /


% of 52 Wk

High

LTM

Revenue

LTM

EBITDA

Automatic Data Processing, Inc. $76.75 91.6% 3.0x 14.2x

Barrett Business Services Inc. $43.24 42.3% 0.4x 8.8x

Capita plc $18.53 94.8% 2.2x 16.4x

Insperity, Inc. $30.56 77.0% 0.2x 7.3x

Paychex, Inc. $40.42 88.0% 5.8x 13.2x

Towers Watson & Co. $109.48 83.1% 2.0x 10.9x

Xchanging PLC $2.59 81.2% 0.4x 4.6x

Average 79.7% 2.0x 10.8x

Page | 10


HCM Notable Transactions

Date


04/18/2014 Addison Group Hire Strategy Professional staffing and consulting

04/04/2014 Gridiron Capital Counsel On Call Provider of legal process outsourcing and managed services to corporations and law firms

04/03/2014 Adcorp Holdings Kelly Group Limited Provider of IT/Staffing solutions

04/01/2014 TZP Group Global Employment Solutions

Offers IT and professional staffing and consulting solutions

03/19/2014 Dice Holdings Oil Careers Oil & gas staffing services

02/27/2014 New MainStream Capital ettain Group Specializes in IT staffing and consulting

02/26/2014 Mitsui The Delta Companies Healthcare staffing firm offering locum tenens and allied staffing services

02/03/2014 Corporate Resource Services

Staff Management Group Commercial and light industrial staffing solutions

01/27/2014 Caymus Equity Hospitality Staffing Solutions

Commercial and light industrial staffing solutions for the hotel and hospitality industry

01/08/2014 IQ Navigator Procure Staff Technologies

VMS solutions for the staffing industry

Page | 11


Facilities Services Comparable Public Company Analysis

Public Company Stock Performance

The Facilities Services and Security Services indices have outperformed the S&P 500 by approximately 8% and 4%, respectively, over the past twelve months.

Facilities Services Security Services

The average LTM EBITDA multiple was 8.8x this quarter, a decrease from 9.5x in 4Q 2013.

The average LTM EBITDA multiple was 9.4x this quarter, an increase from 7.7x in 4Q 2013.

*Excluded from average calculations. LTM = Last Twelve Months. Data obtained from Capital IQ. Stock price as of May 15, 2014 in US$.

Facilities Services Notable Transactions Date

Closed

Buyer

Target

Target Description/Comment

04/22/2014 Stericycle PSC Environmental Services

Recycling, cleaning, and environmental services

03/10/2014 Universal Services of America

Hannon Security Services

Security and guard services

02/28/2014 Interserve Rentokil Initial (Initial Facilities Business)

Facilities services businesses of Rentokil Initial plc

02/11/2014 Pro Park America WinPark Management Parking management and consulting

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Facilities Services Index Securities Services S&P 500 Index


% of 52

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LTM

Revenue

LTM

EBITDA

ABM Industries Incorporated $26.26 89.0% 0.4x 9.5x

EMCOR Group Inc. $44.39 92.5% 0.5x 9.5x

Fluor Corporation $74.21 88.4% 0.4x 7.5x

Johnson Controls Inc. $44.63 85.0% 0.8x 8.2x

MITIE Group PLC $5.23 90.0% 0.6x 12.4x

Pike Electric Corporation $8.61 64.4% 0.6x 7.3x

Rentokil Initial plc $2.10 93.4% 1.4x * 6.9x

Average 86.1% 0.5x 8.8x

Enterprise Value /


% of 52

Wk High

LTM

Revenue

LTM

EBITDA

G4S plc $4.29 96.2% 0.8x 15.9x

National Security Group Inc. $10.07 93.7% 0.7x 3.4x

Securitas AB $11.44 94.1% 0.6x 9.0x

Average 94.7% 0.7x 9.4x

Enterprise Value /

Page | 12


About CHILDS Advisory Partners

CHILDS Advisory Partners provides exceptional investment banking services to high-performing business services and technology companies. Our unique combination of global sector focus, process excellence and strength of team allow us to maximize value—and achieve successful outcomes for our clients. Collectively, our senior bankers have executed over 450 M&A and financing transactions. CHILDS is a member of FINRA and SIPC and is a registered broker-dealer.

Our Services

Sell-side Advisory: When you desire to sell or merge your business, we help you prepare, position and execute the process with confidentiality and speed to obtain maximum results.

Buyouts & Recapitalizations: We know the private equity groups interested in the sector and can help you prepare for due diligence and transaction success.

Buy-side Advisory: CHILDS can source deals, qualify them and negotiate them on your behalf. Our sourcing “engine”, market knowledge and experience in creative deal structures will ensure that you see as many deals as possible and have the ability to get them done.

Debt/Equity Capital Raises: We advise companies seeking equity or debt capital for growth, recapitalization or restructuring. CHILDS can help you negotiate with your existing lenders to renew or restructure debt facilities. If needed, we can tap into our many banking relationships to solicit and negotiate term sheets with other potential lenders as well.

Financial & Strategic Advisory: We provide an objective and disciplined methodology to help your team develop a winning plan for short-term performance and long-term value creation. Whether it’s a Value Creation Road Map, Strategic Alternatives Assessment, Employee Stock Ownership Plan, or Fairness Opinion, we provide insight to the options available for company owners to maximize value and liquidity.

Sector Focus

es

Contact Information

Jim Childs Managing Director Phone: (404) 751-3002 Email: [email protected]

Tom Donahue Managing Director Technology & Professional Services Phone: (617) 290-5433 Email: [email protected]

Cooper Mills Managing Director Business Services Phone: (404) 751-3003 Email: [email protected]

Don Holbrook Managing Director Technology & Professional Services Phone: (949) 276-8715 Email: [email protected]

Jimmy Secretarski Managing Director Technology & Professional Services Phone: (404) 751-3005 Email: [email protected]

Ross DeDeyn Managing Director Healthcare Services Phone: (404) 751-3018 Email: [email protected]

Dave Phillips Director Business Services Phone: (904) 292-9305 Email: [email protected]

Alan Bugler Director Business Services Phone: (404) 751-3004 Email: [email protected]

IT/Professional Services

Human Capital Management

Software Facilities Services

Consulting

Managed Services

Federal

VARs/System Integrators

IT Outsourcing

Staffing

Human Resource Outsourcing

Professional Employment Organization

HCM Technology

HCM

Automotive

Engineering

Enterprise Resource Planning

Industrial Automation

Facilities Management

Security

Building & Janitorial

Engineering & Maintenance

Environmental Services

Logistics

Technology & Professional Services

Business Process Outsourcing

Revenue Cycle Management

Legal Process Outsourcing

Teleservices

Knowledge Process Outsourcing

Collections / Receivables

Tech-enabled Business Services

Business Services

Documents

Quarterly Update - Bowstring Advisors · Business Services & Technology M&A volume was up in 1Q 2014 vs. 4Q 2013 and up year-over-year. We noted a total of 1,384 transactions in 1Q