Monthly Business & Tech-Enabled Services Sector Summary …...Influencer Marketing, Loyalty Marketing, Direct Marketing, Database Marketing, Experiential Marketing, Market Research

1

BUSINESS AND TECH-ENABLED SERVICESSECTOR REPORT

October 2018

2

GCA BUSINESS & TECH-ENABLED SERVICES OVERVIEW

DEREK BELLManaging DirectorHead of Business & Tech-Enabled [email protected]

Representative Focus Areas

Digital Marketing, Performance Marketing, Account Based Marketing, Search Marketing, Influencer Marketing, Loyalty Marketing, Direct Marketing, Database Marketing, Experiential Marketing, Market Research

Diversified B2B Information Services, Financial / Credit Information Services, Specialized Information Services (Energy, Real Estate, Hospitality, Compliance, Auto, etc.)

Consulting, GRC Services, E-Discovery / Legal Services, Patent Services, HR Services, Corporate Training, Digital Transformation Services, IT & Cloud Services (Implementation, Managed Services, Software Development, VAR), BPO & KPO Services, Language / Localization Services, Print Services

Call Center, Billing & Claims Management / Processing, Accounts Receivable Management

MARKETING SERVICES

INFORMATION SERVICES

PROFESSIONAL & IT SERVICES

CUSTOMER CARE & CLAIMS SERVICES

Recent Business & Tech-Enabled Services Transactions

Key Contact

We Advised the Seller

Acquired byAcquired by


Acquired by


Acquired by

We Advised the SellerWe Advised TCV

Investment in

We Advised the Buyer

AcquiredAcquired by

We Advised the SellerWe Advised the Seller

Acquired by

Acquired by


Acquired by


Investment in

We Advised NorthEdgeWe Advised the Seller

Acquired by


Acquired by

We Advised the Buyer

Investment in


Acquired by

Digital Marketing Information Services Information Services Risk Mgmt Services Software Services Patent Services Digital MarketingIT Services HR Solutions

Marketing Services Digital Marketing IT Services IT Services Digital Marketing Claims Management Loyalty MarketingInformation Services Market Research

Acquired by



Acquired by


Acquired by

3

CASE STUDY: SALE OF QUOTEWIZARD.COM TO LENDINGTREE ( NASDAQGS: TREE)

GCA acted as exclusive finanical advisor to QuoteWizard, provider of a customer acquisition technology platform, on its sale to LendingTree

TRANSACTION DETAILS

Closed

October 2018

$370,200,000

SECTOR

Digital Marketing

DEAL TYPE

M&A

Transaction Summary

▪ On October 4, 2018, QuoteWizard announced it had entered into a definitive agreement to be acquired by LendingTree for up to $370.2MM

− $300MM in up-front consideration at close, payable in cash

− $70.2MM in potential earn-out consideration based on achievement of certain growth milestones in the first 3 years following transaction close

▪ The transaction closed on October 31, 2018

▪ The QuoteWizard management team, led by CEO Scott Peyree, will continue as QuoteWizard leadership

▪ QuoteWizard generated $75.6MM in revenue and $12.8MM in EBITDA for the six-months ending June 30, 2018, implying a 2.0x revenue and 11.7x EBITDA multiple, respectively, not including the earnout consideration – or a 2.4x revenue and 14.5x EBITDA multiple, respectively, including the earnout consideration

Strategic Rationale

▪ QuoteWizard will immediately establish LendingTree as a leader in the high-growth online insurance market

− Since its founding in 2006, QuoteWizard has helped over 40 million consumers compare and find insurance policies online

▪ QuoteWizard’s customer acquisition technology platform and network of over 30 top-tier carriers and nearly 10,000 insurance agents across the country create a scale and network advantage for high-quality insurance lead distribution

− Will significantly expand LendingTree’s relationships with insurance carriers and agents, and enable cross-selling of mortgage / home-related products that are core to LendingTree’s mortgage market

▪ Numerous product and traffic synergies as part of the MyLendingTree platform and overall LendingTree consumer experience

Acquired by

We Advised QuoteWizard

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BUSINESS & TECH-ENABLED SERVICES SECTOR REPORT

Notes:Source: Capital IQ and PitchBook.

− Business & Tech-Enabled Services sector continues to experience significant M&A activity, with over $190.0 billion in volume across 2,873 transactions in 2018 YTD

− One large transaction was announced in October:

• Onex acquisition of 42% stake in Ryan, a global tax services and software provider dedicated to business taxes

− Continued deal momentum in software development and user experience solutions:

• Sverica investment in Gorilla Logic

• OEP acquisition of Orion Business Innovation

• Updata Partners investment in Glassbox

• Cognizant acquisition of Softvision

− Additional noteworthy private equity transactions not shown in the righthand table include:

• Stone-Goff Partners investment in John Staurulakis

• Clarion Capital investment in Premiere Digital Services

• WestView Capital Partners acquisition of The Phia Group

• Bertram Capital investment in Best Version Media

• Frontier Capital investment in PriceSpider

• RLJ Equity Partners acquisition of Crossfuze

• H.I.G. Growth Partners investment in Eruptr

• Enlightenment Capital investment in Emagine IT

Executive Summary

Select M&A Transactions

Ann. Date Acquirer Target TEV ($MM)

10/30/18 NA

10/25/18 NA

10/25/18 (Investment) NA

10/23/18 NA

10/22/18 NA

10/17/18(42% stake)

$1,100

10/16/18 $250

10/15/18 NA

10/10/18(Investment)

NA

10/9/18Citizen Engagement Centers

$400

10/4/18 NA

10/4/18 $370

10/4/18($25MM Investment)

NA

10/4/18 $550

10/2/18 NA

10/1/18 NA

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BUSINESS & TECH-ENABLED SERVICES LTM STOCK PRICE PERFORMANCE

Notes:Source: Capital IQ.

Advertising & Marketing Services

Events & Exhibitions Information Services Consulting & Training HR Services Staffing & Recruiting IT & BPO Services Customer Care / CRM Services

(1.9%) (19.7%) 8.7% 31.0% 19.0% (4.3%) 2.6% (26.6%)

LTM Share Price Performance

70%

80%

90%

100%

110%

120%

130%

140%

150%

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

6

BUSINESS & TECH-ENABLED SERVICES TRADING COMPARABLES

Notes:Multiples represent median values, except for HR Services, which reflects mean values. Source: Capital IQ.

Advertising & Marketing Services

Events & Exhibitions Information Services Consulting & Training HR Services Staffing & Recruiting IT & BPO Services Customer Care / CRM Services

8.7x / 1.7x 9.0x / 2.9x 14.5x / 5.0x 12.9x / 1.4x 15.2x / 3.3x 8.3x / 0.6x 11.4x / 2.0x 7.4x / 0.7x

2018E EBITDA / 2018E Revenue Multiple

EV / 2018E EBITDA EV / 2018E Revenue

5.0x

3.3x2.9x

2.0x1.7x

1.4x

0.7x 0.6x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

InformationServices

HR Services Events &Exhibitions

IT & BPOServices

Advertising& Marketing

Services

Consulting &Training

CustomerCare / CRM

Services

Staffing &Recruiting

15.2x14.5x

12.9x

11.4x

9.0x 8.7x 8.3x7.4x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

HR Services InformationServices

Consulting &Training

IT & BPOServices

Events &Exhibitions

Advertising& Marketing

Services

Staffing &Recruiting

CustomerCare / CRM

Services

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SELECTED RECENT BUSINESS & TECH-ENABLED SERVICES M&A ACTIVITYMarketing & Information Services

($MM)

EV / EBITDA EV / Revenue

Announced Date Acquirer Target Enterprise Value (EV) LTM NTM LTM NTM Target Description

Notes:Source: Capital IQ and Wall Street Estimates.(1) All 4 divisions are based in Germany.

10/4/2018 $370 14.5x NA 2.4x NAOwns and operates an insurance comparison online

marketplace

9/25/2018 $811 35.9x 21.4x 5.0x 4.6xProvides multiplatform media and marketplace services to the

wedding, pregnancy, and parenting markets primarily in the

U.S.

9/20/2018 $4,750 NA NA NA NA Provides cloud-based engagement marketing software platform

9/4/2018 Getty Family $2,840 NA NA NA NACreates and distributes images, audio and video products,

documents, press kits, and other visual content to businesses

worldwide

8/30/2018 $263 37.8x 19.3x 5.5x 5.2xProvides commercial real estate market information and

anlytical tools to real estate professionals in the U.S.

8/8/2018 $6,675 13.1x 12.6x 3.7x 3.8x Provides commercial data, analytics, and insight on businesses

8/2/2018 $18 16.5x NA NA NAPrice Reporting Agency (PRA) for the global wood products

industry

7/30/2018 $123 NA NA 0.5x NAIpsos acquired 4 global divisions of GfK Research: Customer

Experience, Experience Innovatoin, Health, and Public Affairs (1)

7/27/2018 $18 NA NA 1.0x NA Provides digital advertising and marketing services

7/17/2018 $80 11.4x NA 2.5x NAFull-service healthcare marketing agency serving

biopharmaceutical, medical device, and diagnostics companies

7/17/2018 $1,200 19.0x NA 6.5x NADesigns and develops a suite of ethics and compliance

software solutions

7/10/2018 S4 Capital $352 NA NA 2.7x NA

Netherlands-based creative digital production company serving

agencies worldwide

7/9/2018 $2,467 16.9x NA 7.3x NASwitzerland-based provider of sports-related live data and

digital content services

7/3/2018 $550 8.0x NA NA NAProvides marketing strategies and revenue-generating products

and services to the financial services industry

7/2/2018 $2,300 11.5x NA NA NA Provides database marketing services

7/2/2018 $775 NA NA 6.0x NAProvides construction cost analytics, estimating information,

pricing data, and procurement software and services

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SELECTED RECENT BUSINESS & TECH-ENABLED SERVICES M&A ACTIVITYMarketing & Information Services – continued

Notes:Source: Capital IQ and Wall Street Estimates.

($MM)



6/21/2018 $1,864 12.7x 9.8x 2.5x 2.5xOffers a range of Web services and products that enable small

businesses to establish, maintain, promote, and optimize their

online presence

6/20/2018 $34 NA NA 4.4x NAProvides competitive deposit and loan rate intell igence to bank

and credit union clients

6/19/2018 NA NA NA NA NAProvides business-critical insights over mobile, web, and

desktop platforms to oil and gas industries worldwide

6/15/2018 $32 10.9x NA 2.2x NAUK-based global digital subscription business that helps

brands, agencies and media platforms assess marketing

effectiveness across all channels

6/4/2018 $375+ ~20.0x NA NA NAProvides automated docket updates, breaking news, and expert

analysis for distressed debt investors, lawyers, and

restructuring professionals

5/21/2018 $1,855 NA NA NA NADevelops and provides market intell igence, data, and

technology solutions to participants in the global capital

markets in the U.S. and internationally

5/15/2018Exhibitions Business

$405 12.9x NA 3.8x NAUK-based organizer of market-leading B2B exhibitions,

including global exhibitions brands Bett and CWIEME

4/26/2018 $117 NM NM 2.5x 2.3xProvides cloud-based behavioral analytics for customer

service organizations

4/26/2018 NA NA NA NA NAProvides technology, connectivity, and information

solutions to the P&C and collision repair industries

4/20/2018 $1,400 22.2x NA 7.4x NAUK-based provider of consumer information management and

direct marketing services to businesses

3/15/2018 $383 NA NA 7.0x NAUK-based provider of free access to credit reports and scores

and consumer finance matching solutions

3/13/2018 $205 NA NA 2.8x NAProvides environmental risk information services and

solutions serving the property due diligence industry

2/12/2018Global Market Intelligence Division

$181 12.0x NA NA NATwo main units are CEIC and EMIS, which provide global

financial information from the macro and micro perspectives,

with a focus on data for emerging markets

1/30/2018 $3,091 1.6x NA 0.5x NAOffers critical news, information, and analytics enabling

transactions and connecting communities of trading,

investment, financial, and corporate professionals

Mean 16.1x 15.8x 3.8x 3.7x

Median 13.0x 15.9x 3.2x 3.8x

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SELECTED RECENT BUSINESS & TECH-ENABLED SERVICES M&A ACTIVITYProfessional, IT & BPO Services


($MM)



10/22/2018 $69 NA NA NA 2.0xLondon-based provider of RPA, AI, crowd sourcing, and impact

sourcing solutions

10/17/2018(42% stake)

$1,100 NA NA NA NAProvides global tax services and software dedicated exclusively

to business taxes

10/9/2018(Citizen Engagement Centers)

$400 10.0x NA 0.6x NAIncludes certain assets of General Dynamics' large-scale,

citizen-engagement centers in the U.S. Federal civil ian market

10/4/2018 $550 NA NA 3.1x NAProvides software services and creates digital products and

solutions that connect brands with consumers

9/12/2018 $6,700 NA NA NA NAProvides a cloud-based platform for tech-enabled claims and

productivity management solutions to businesses in North

America

9/10/2018 $2,450 13.7x 14.7x 1.3x 1.3xProvides a range of technical services to the U.S. DOD, DOJ,

DOS, FAA, DHS, and space-related and intell igence community

agencies

8/28/2018 $2,650 NA NA NA NAProvides production solutions to television broadcasters, cable

networks, and event producers worldwide

8/3/2018 $480 ~20.0x NA NA NA Provides employee training for the food and retail sectors

7/22/2018 $3,542 13.4x 15.3x 3.7x 3.7xProvides digital transformation, IT, and KPO services

worldwide

7/16/2018 $410 NA NA 3.5x NAManages mission critical business applications for companies

and organizations in Norway and internationally

7/16/2018 $78 10.5x NA 1.1x NAProvides expert localization and technical translation services

for businesses in any fi le format and any language.

6/28/2018 $2,534 7.4x 7.6x 0.9x 1.0xProvides customer management services to communications

and media, technology, financial services, and other vertical

markets worldwide

6/27/2018(Minority Stake for $250MM)

NA NA NA NA NAProvides consulting, product engineering, IT, and BPO services

to Global 1000 companies

6/25/2018DFLT and TAS Segments

$470 11.9x NA 1.5x NAProvides professional services to clients primarily in the

financial services industry

6/19/2018 NA NA NA NA NAProvides legal administrative services for class action

settlements, mass tort, solicitation, legal noticing programs,

and bankruptcy cases worldwide

6/19/2018 NA NA NA NA NAProvides event technology services for the hotel, resort, and

conference center industry in the U.S., Canada, Mexico, the

Caribbean, Europe, and the United Arab Emirates

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SELECTED RECENT BUSINESS & TECH-ENABLED SERVICES M&A ACTIVITYProfessional, IT & BPO Services – continued


($MM)



6/14/2018 $1,000 12.0x NA 2.2x NAIndia-based provider of BPO and customer experience

management services

5/23/2018 NA NA NA NA NAProvides moving and relocation services to corporate

customers, individual consumers, and military and government

agencies worldwide

5/21/2018(48% stake)

$2,000+ NA NA NA NAProvides full-lifecycle product development services to

customers worldwide

5/10/2018 $1,100 NA NA NA NAGlobal provider of talent acquisition and management

solutions delivering value to clients through a portfolio of

outsourcing and consulting services

5/8/2018 $1,200 NA NA 7.0x NA Operates an online jobs and career community

5/1/2018 $385 NM NM 1.2x 1.4xProvides patent risk management and e-discovery

services for clients worldwide

5/1/2018 $240 NA NA NA NADba SCIO Health Analytics, provides healthcare analytics

solutions and services

4/24/2018 $150 11.2x NA 1.4x NAProvides cloud-based integrated recruiting, talent management,

and compensation management solutions

4/16/2018 $413 NA NA 4.1x NAProvides corporate training in web development, user

experience design, digital marketing, data science and machine

learning

4/12/2018 $330 8.6x NA 3.1x NAProvides a data management, integration, and analytics

infrastructure platform through commodity hardware, in the

cloud, or both

4/9/2018 $215 NA NA 1.7x NAProvides health information management and locum

tenens staffing

4/9/2018 $37 NA NA 1.6x NAPhill ips DiPisa is a nationwide executive retained search firm;

Leaders for Today provides interim and permanent leadership

workforce solutions

4/5/2018 NA 15.0x NA NA NAFrance-based provider of intellectual property information and

management software and services

3/21/2018 $33 NA NA 1.7x NAProvides Guidewire platform implementation services to P&C

insurance carriers

Mean 11.4x 12.5x 2.3x 1.9x

Median 11.6x 14.7x 1.7x 1.4x

11

GCA: A LEADING INDEPENDENT GLOBAL INVESTMENT BANK

NEW YORK

ZURICH

MILAN

FRANKFURT

MUNICH

TEL AVIVSAN FRANCISCO

Globally integrated

platform with 18

offices across

America, Asia and

Europe

Geographically balanced,

synergistic and complementary

sector focus areas

across the firm

Strong in key growth and

innovation sectors such as Technology

and Tech-Enabled

Services

Strong cross-border

capabilities and

deal flow

LONDON

MANCHESTER

MUMBAI

OSAKA

SHANGHAI

SINGAPORE

TOKYO

DELHI

NAGOYA

400+

experienced

professionals

HO CHI MINH CITY

TAIPEI

350+ deals closed in the last 3 years

Global investment bank that provides strategic M&A and capital markets advisory services to growth companies and market leaders

GCA operates as GCA in America and Asia, and GCA Altium in Europe

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Monthly Business & Tech-Enabled Services Sector Summary …...Influencer Marketing, Loyalty Marketing, Direct Marketing, Database Marketing, Experiential Marketing, Market Research