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TECHNOLOGY SERVICES MONTHLYELECTRONIC HEALTH RECORDS

1717 Arch Street, 39th Floor · Philadelphia, PA 19103 · www.mhhco.com

June 2018

MHH | Technology Services Group 2

Welcome to the June edition of the Mufson Howe Hunter TechnologyServices Monthly. This month, we highlight key themes and growth driversin the electronic health records space. Each month, our team aims toprovide you with a newsletter that contains thought-provoking contentand analysis, as well as updates on macroeconomic themes, equity capitalmarket performance, private capital market trends and noteworthy M&Aactivity–all of which is relevant to our core industry sectors:

We hope you find this information valuable, and we welcome anycomments or suggestions.

Sincerely,

Brandon K. EckManaging Director, Head of Technology Services

Cloud Services Healthcare IT Infrastructure Services Specialty Consulting

Digital Agencies Information Services IT OutsourcingTech-Enabled Business

Process Outsourcing

Tech-Enabled Solutions

InternetOutsourcing

ServicesMobile

Enterprise Software

Welcome to the MHH Technology Services Newsletter!

Select 2018 Franchise Themes

What we are reading…

Healthcare IT: The sweeping paradigm shift toward population health managementand value-based reimbursement models – will continue to drive robust demand forhealthcare IT products and services. Consulting Services, Data Analytics and PatientEngagement Technology will comprise a growing portion of the overall HCIT market,reaching an estimated $74 billion in annual spending by 2021 (Markets and Marketsand MHH calculations). Service providers and solutions that improve interoperabilityamong myriad disparate systems will be in high demand for many years to come. Foradditional insight see our May 2017 and September 2017 TSM.

Digital Transformation & Advisory: Business processes will continue to migrate fromlegacy systems to modern technology (cloud, edge computing, analytics, IoT,blockchain, AI, etc.). We expect to see continued growth in the digital transformationconsulting (DTC) channel. Trusted advisors with the ability to sell across seniorbusiness stakeholders within an organization (CMO, CRO, CCO, COO, CIO) and whoprovide thought leadership, commercial insights, targeted research and proprietary IPwill be leaders in the category. For additional insight see our November 2017 TSM.

IoT-Optimized Infrastructure Services: “Connected things” will streamline vendoroperational models while reducing customer costs. IoT will introduce tons of usefuldata to the cloud that needs to be captured and effectively managed. IaaS and PaaScompanies will be a direct beneficiary of this trend. Cisco expects database, analyticsand IoT workloads to account for 22% of total workloads by 2020 (Cisco, 2016). Foradditional insight, see our June 2017 TSM.

Next-gen EHRs: Epic, Allscripts and others reveal future of electronic health records

Halifax Health integrates EHR, cloud decision support to combat sepsis

A New Model of Interaction for Regulatory Technologies

What is the IoT? Everything you need to know about the Internet of Things right now

TECHNOLOGY SERVICES MONTHLY

Blockchain in Financial Services & Beyond: Although most widely associated withcryptocurrencies, some of the largest financial services firms are exploring usingblockchain technology to improve high-risk and/or time-consuming operations,including cross-border payments, AML & KYC compliance, IAM security protocols andsmart contracts. We also expect to see further adoption across a variety of otherindustries, including healthcare, automotive, manufacturing and retail, among others.For additional insight see our December 2017 TSM.

Regulation Technology: The rapid proliferation of new and increasingly complexregulations will continue to drive demand for RegTech solutions that provideoperational efficiencies and cost benefits when applied to compliance and riskmanagement practices. Increased regulation isn’t just a temporary challenge forglobal financial institutions – it’s the new reality. Financial services firms’ averagecosts to meet their obligations are $60 million; some are spending up to $500 millionon compliance with KYC and Customer Due Diligence (Thomson Reuters). Foradditional insight see our August 2017 TSM.

http://www.mhhco.com/publication_pdfs/Technology Services Monthly - May 2017 Draft V7.pdf

http://www.mhhco.com/publication_pdfs/Technology Services Monthly - September 2017 v7.pdf

http://files.constantcontact.com/07e77b89001/4d746220-10ae-436a-b23a-bbe775e0f45c.pdf

http://www.mhhco.com/publication_pdfs/Technology Services Monthly - June 2017 - FINAL.pdf

http://www.healthcareitnews.com/news/next-gen-ehrs-epic-allscripts-and-others-reveal-future-electronic-health-records

http://www.healthcareitnews.com/news/halifax-health-integrates-ehr-cloud-decision-support-combat-sepsis

https://financeandriskblog.accenture.com/regulatory-insights/reg-tech/a-new-model-of-interaction-for-regulatory-technologies

https://www.zdnet.com/article/what-is-the-internet-of-things-everything-you-need-to-know-about-the-iot-right-now/

http://www.mhhco.com/publication_pdfs/Technology Services Monthly - December 2017 v6 (1).pdf

http://www.mhhco.com/publication_pdfs/Technology Services Monthly - August 2017_2xiwbq.pdf


The Mufson Howe Hunter Technology Services Group serves growth-oriented, rapidly scalable businesses that leverage proprietary and enabling technologies to address the evolving needs of modern enterprise customers. We apply deep industry expertise and broad transaction experience to provide thoughtful, tailored

advice and solutions for our clients. Our clients turn to us for outstanding M&A advisory and capital-raising execution.

Brandon EckManaging Director,Head of Technology Services

Prior Experience:

Managing Director, Head of Technology & Services, Janney Montgomery Scott

Principal, Katalyst Securities

Principal, RCW Mirus

215.399.5411 [email protected]

18+ Years of Experience

60+ Transactions Completed

Education:

Gettysburg College (BA)

Senior Banking Team Sector Coverage

Andrew WilsonVice President,Technology Services

Prior Experience:

Senior Associate, Technology & Services, Janney Montgomery Scott

Associate, TMT, J.P. Morgan

Attorney, M&A, Wilson Sonsini Goodrich & Rosati


8+ Years of Experience

20+ Transactions Completed

Education:

Duke University (JD, MBA)

U. North Carolina, Chapel Hill (BA)

Sell-side Advisory

Buy-side Assignments

Private Placements

Recapitalizations

Financial Advisory

Fairness Opinions

Tech-Enabled Solutions

Internet

Outsourcing Services

Mobile

Enterprise Software

IT Outsourcing

Healthcare IT

Digital Agencies

SpecialtyConsulting

InformationServices

InfrastructureServices

Tech-Enabled BPO

Cloud Services

TECHNOLOGY SERVICES PRACTICE OVERVIEW

Business Model Coverage

4

What is EHR?

EHR: A PHYSICIAN’S POINT OF VIEW

MHH | Technology Services Group

Electronic health record (EHR) systems are a central element of a sweeping effort to digitize the collection and sharing of medical records and treatment history – replacing archaic, paper-based charts with electronic records that can be updated in real time and travel with the patient.

The industry-wide push to establish a standards-based, population health management paradigm of care delivery demands that patient information be easily collected, aggregated, analyzed and shared across myriad providers and systems. In 2009, The American Recovery and Reinvestment Act mandated that all healthcare providers adopt and demonstrate meaningful use of EHR systems, as defined by a sequential series of escalating milestones.

The industry as a whole has also come to recognize that encouraging patients to take greater ownership in managing their own health is a powerful lever in improving long-term health outcomes and reducing expenditures on high-cost emergency care. Accordingly, most major EHR vendors also offer various elements of patient engagement technology (PET) to complement their core EHR offerings.

As emphasis continues to move “beyond the four walls” of the hospital setting toward a more holistic, clinically-integrated network model of care delivery, EHR vendors are increasingly expected to offer cloud-based, mobile-enabled platforms.

2.6

2.8

2.8

2.9

2.9

3.0

3.0

3.1

3.1

3.1

3.3

3.4

3.4

3.5

3.5

3.8

3.8

3.8

Top Rated EHR for Satisfaction 3

1 Healthcare Informatica, 2017 | 2 2018 CIO Agenda: Healthcare Provider Industry Insights, 2017 | 3 Medscape EHR Report 2016: Physicians Rate Top EHRs | 4 Rand, “Factors Affecting Physician Professional Satisfaction and Their Implications for Patient Care, Health Systems, and Health Policy”,2016 | 5 The Institute, “Focusing on Ways to Improve Electronic Health Records”, 2016

Where do EHR Vendors Need to Improve?

1 EHR vendors do not allow physicians to customize products to their specific needs 4

2 Physicians report low levels of technical support from vendors 4

3 EHR systems do not consistently support clinicians in providing “real care” or “substantially change the ways doctors think and access information, dividing tasks in ways not consistent with how physicians work” 5

4 EHR vendors do not allow physicians to customize products to their specific needs 434%

37%

72%

77%Improve Patient Billing 1

Eases communications with Payers 1

Detracts from Patient Care 2

Satisfaction with EHR vendor 2

How Physicians Feel about Their EHR

MARKETPLACE DYNAMICS & MARKET SHARE

10

115

8

359

636

10

1092

22

27

235

869

462

1050

3K

8K

12K

1K

25K

19K

3K

14K

17K

33K

83K

7K

15K

Market Dynamics

Consolidation

Vendor Consolidation: Large vendors and private equity players have been acquiring small to mid-size vendors.

Practice Consolidation: Small and solo medical practices are being acquired by hospitals and larger physician groups who mandate use of their EHR technology.

FragmentedMarket

According to Office of the National Coordinator’s dashboard, there are 632 EHR vendors providing certified EHR technology to physicians attesting for meaningful use.

The Top 10 vendors account for 65% of the physician practice EHR market, leaving 35% of the market with 622 vendors.

These vendors dominate the smaller physician practice market – 10 physicians (small) to 50+ (large).

Hospital Owned vs.

IndependentPractices

Hospital-Owned Practices: Population Health-driven trend lean toward selecting vendors with integrated healthcare information systems (HIS).

Independent Practices: Owned by physicians and more likely to select vendors without an HIS.

Bu

yers

Targ

et

Jan-2018 Sep-2017 Jun-2017 May-2016

23%

9%

7%

5%

5%4%4%

3%

2%

2%

35%

Market Share 1

“Cross Over” Vendors 1

Other

Physician Practice Market Share

MD Practices Hospitals


1 2017 MD Vendor Overview, HIS Professionals, LLC, 2017


-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

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

S&P 500 NASDAQ Dow Jones Industrial Average

SP500 NSDQ DJIA

May 2.2% 5.3% 1.0%

LTM 12.2% 20.1% 16.6%

3-Year 28.4% 46.8% 35.6%

U.S. PPI, CPI and PCE

10-Year Treasury Rate

U.S. Unemployment & Labor

Sources: CapitalIQ , Federal Reserve Bank of St. Louis

U.S. ECONOMIC INDICATORS

Unemployment Rate

Labor Participation Rate

U.S. Market Indices

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%


10-Year Teasury Rate

61.8%

62.0%

62.2%

62.4%

62.6%

62.8%

63.0%

63.2%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%


Unemployment Rate Labor Participation Rate

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%


Consumer Price Index Producer Price Index Personal Consumption Expenditures


Company Investor Date Sector

May 29Infrastructure

Services

May 29Infrastructure

Services

May 17Information

Services

May 16 Healthcare IT

May 14 Healthcare IT

May 3 Healthcare IT

Source: Pitchbook*For deals with announced transaction value**Please contact the MHH Technology Services Group directly for any information regarding valuation and deal size

U.S. TECH SERVICES MIDDLE-MARKET PRIVATE EQUITY: BUY-OUT ACTIVITYPE Buy-Outs, Trailing 8 Quarters, as of May 31

PE Buy-Outs, by Deal Size PE Buy-Outs, Historical Annual, as of May 31

Select May 2018 Buy-Outs**

30%

17%

11%

43%$0-25mm

$25-50mm

$50-100mm

$100-250mm

$0.0B

$0.2B

$0.4B

$0.6B

$0.8B

$1.0B

$1.2B

-

20

40

60

80

100

120

140

3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18

Total CapitalNumber of Deals

Add-Ons Platform Total Capital Invested*

$0.0B

$0.5B

$1.0B

$1.5B

$2.0B

$2.5B

$3.0B

$3.5B

$4.0B

$4.5B

-

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017 2018


Deal Count Total Capital Invested*


U.S. TECH SERVICES MIDDLE-MARKET PRIVATE EQUITY: MINORITY ACTIVITY

Source: Pitchbook*For deals with announced transaction value**Please contact the MHH Technology Services Group directly for any information regarding valuation, deal size, and investors

Company Stage Date Sector

Early Stage VC May 29Infrastructure

Services

Early Stage VC May 22Information

Services

Late Stage VC May 9 Healthcare IT




PE Minority, by Stage PE Minority, Historical Annual, as of May 31

PE Minority, Trailing 8 Quarters, as of May 31Select May 2018 Minority Deals**

49%

26%

19%

6%

Angel / Seed

Early Stage VC

Later Stage VC

PE Growth/Expansion

$0.0B

$0.5B

$1.0B

$1.5B

$2.0B

$2.5B

-

50

100

150

200

250

300

3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18



$0.0B

$1.0B

$2.0B

$3.0B

$4.0B

$5.0B

$6.0B

$7.0B

$8.0B

$9.0B

0

200

400

600

800

1,000

1,200

2010 2011 2012 2013 2014 2015 2016 2017 2018




-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%


Source: CapitalIQ

VALUATION & PERFORMANCE METRICS

Median Operational KPIs

Median Valuation Metrics

IT Outsourcing: technology services and consulting solutions, including engineering, application development, knowledge management and business process management

Business Process Outsourcing: services for administering and managing select technology-enabled business processes, including outsourced product development, finance and accounting, human resources, research and analytics, and other industry-specific processes

Infrastructure Services: providers of managed, hosting and consulting services around planning, designing, implementing and managing mission-critical IT infrastructure

Information Services: providers of independent rating, benchmarking, research and data analytic services

Healthcare IT: software and technology-related services focused on the design, development, creation, use and maintenance of information systems for the healthcare industry

ITO

BPO

IFS

IS

HIT

Sector Indices Performance, as of May 31, 2018

SP500 NSDQ ITO BPO IFS IS HIT

May 2.2% 5.3% (2.4%) 7.7% 0.4% 4.3% 8.0%

LTM 12.2% 20.1% 16.0% 24.8% 10.5% 29.5% 2.8%

3-Year 28.4% 46.8% 27.0% 50.8% 55.3% 69.0% 7.8%

2.1x

3.1x

5.0x

7.0x

2.7x

ITO BPO IFS IS HIT

EV/2018E REVENUE

11.6x

14.4x

10.8x

17.0x

12.7x

ITO BPO IFS IS HIT

EV/2018E EBITDA

16.8x

27.5x

24.1x 23.1x

27.6x

ITO BPO IFS IS HIT

FWD PRICE/EARNINGS

10.9%

9.9%

15.2%

11.6%

6.1%

HIT

IS

IFS

BPO

ITO

2018E REVENUE GROWTH

57.7%

62.9%

63.8%

36.5%

31.5%

HIT

IS

IFS

BPO

ITO

LTM GROSS MARGIN

13.0%

39.2%

27.2%

14.5%

19.9%

HIT

IS

IFS

BPO

ITO

LTM EBITDA MARGIN


Valuation Metrics Relative Valuation

Select May 2018 Precedent Transactions*

Source: CapitalIQ*Please contact the MHH Technology Services Group directly for any information regarding valuation and deal size

Announced Acquirer Target Description

May 23 Provides digital marketing and IT services

May 16 Provides IT consulting services

May 15 Provides IT consulting services

May 2 Provides consulting and analytics services

May 1 Information security consulting and advisory

services

IT OUTSOURCING

ACN

INFY

DXC

HCLTECH

GIB.A

BSE:507685

ENXTPA:ATO

SYNT

VRTU

PRFT

0.0 x

2.0 x

4.0 x

6.0 x

8.0 x

10.0 x

12.0 x

14.0 x

16.0 x

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

EV/EBITDA (2018E)

Revenue Growth (2018E)

ACN

CTSH

INFY

DXC

HCLTECH

GIB.A

BSE:507685

ENXTPA:ATO

SYNT

VRTU

PRFT

0.0 x

0.5 x

1.0 x

1.5 x

2.0 x

2.5 x

3.0 x

3.5 x

0.0% 10.0% 20.0% 30.0% 40.0%

EV/Revenue (2018E)

Revenue Growth (2018E) + EBITDA Margin (LTM)

($ in millions) Operating Metrics Valuation Multiples

LTM LTM

Market Revenue Gross EBITDA(2) EBITDA EV / Revenue EV / EBITDA

Company Cap (1) 2018E 2019E Margin 2018E 2019E Margin LTM 2018E 2019E LTM 2018E 2019E

Accenture plc (ACN) $100,154 $39,836 $42,462 31.5% $6,796 $7,328 16.2% 2.6x 2.4x 2.3x 14.0 x 14.3 x 13.3 x

Cognizant Technology Solutions Corporation (CTSH) $44,147 $16,237 $17,661 38.3% $3,420 $3,901 20.8% 2.6x 2.5x 2.3x 11.8 x 11.7 x 10.3 x

Infosys Limited (INFY) $39,205 $11,130 $12,070 34.8% $2,923 $3,135 27.0% 3.2x 3.2x 2.9x 11.9 x 12.1 x 11.3 x

DXC Technology Company (DXC) $26,232 $22,484 $21,984 26.9% $4,862 $4,982 20.4% 1.3x 1.4x 1.5x 6.3 x 6.6 x 6.5 x

FALSE $16,987 $8,833 $9,087 29.4% $1,612 $1,686 16.6% 2.1x 2.1x 2.0x 12.0 x 11.3 x 10.8 x

HCL Technologies Limited (NSEI:HCLTECH) $18,563 $8,141 $8,978 34.3% $1,910 $2,044 22.6% 2.2x 2.1x 1.9x 9.7 x 9.0 x 8.4 x

Wipro Limited (BSE:507685) $17,263 $8,211 $8,677 29.3% $1,583 $1,695 19.9% 1.9x 1.8x 1.7x 9.3 x 9.5 x 8.9 x

Atos SE (ATO) $14,196 $14,308 $14,926 14.5% $2,057 $2,208 12.6% 1.0x 1.0x 1.0x 7.4 x 7.0 x 6.6 x

Syntel, Inc. (SYNT) $2,613 $953 $969 38.1% $243 $250 27.6% 3.0x 3.0x 2.9x 10.5 x 11.6 x 11.2 x

Virtusa Corporation (VRTU) $1,441 $1,205 $1,370 28.9% $103 $133 7.2% 1.6x 1.3x 1.2x 16.0 x 15.7 x 12.2 x

Perficient, Inc. (PRFT) $915 $500 $528 34.6% $69 $78 11.6% 2.0x 1.9x 1.8x 13.6 x 14.0 x 12.5 x

Mean $25,611 $11,985 $12,610 31.0% $2,325 $2,495 18.4% 2.1x 2.1x 2.0x 11.2x 11.2x 10.2x

Median $17,263 $8,833 $9,087 31.5% $1,910 $2,044 19.9% 2.1x 2.1x 1.9x 11.8x 11.6x 10.8x

NA = Not Available; NM = Not Meaningful; LTM = Latest Twelve Months As of close May 31, 2018.

‡ = excluded from Mean and Median calculations Excludes non-recurring, discontinued operations and stock-based compensation

Source: Public Filings, Press Releases and Published Research Reports

(1)

(2)


3.

Valuation Metrics


BUSINESS PROCESS OUTSOURCING


May 31 Offers outsourced document management

services

May 29 Offers outsourced subscription-based analytics

services

May 24 Engages in B2B e-procurement business

May 14 Provides procurement consulting services

May 9 Provides outsourced telecommunications and

strategy services


Relative Valuation


LTM LTM



Automatic Data Processing, Inc. (ADP) $57,277 $13,767 $14,701 42.8% $3,047 $3,441 21.3% 4.4x 4.1x 3.9x 19.4 x 18.7 x 16.6 x

Genpact Limited (G) $5,717 $2,975 $3,210 37.8% $494 $542 14.9% 2.4x 2.2x 2.1x 14.5 x 13.4 x 12.2 x

EPAM Systems, Inc. (EPAM) $6,578 $1,847 $2,245 36.0% $328 $406 14.5% 3.9x 3.3x 2.7x 21.9 x 18.5 x 14.9 x

WNS (Holdings) Limited (WNS) $2,579 $801 $885 33.6% $170 $204 14.5% 3.2x 3.1x 2.8x 17.4 x 14.4 x 12.0 x

Globant S.A. (GLOB) $1,840 $508 $609 36.5% $88 $106 13.6% 4.1x 3.5x 3.0x 23.4 x 20.4 x 17.0 x

ExlService Holdings, Inc. (EXLS) $1,950 $851 $926 34.5% $150 $167 14.4% 2.3x 2.1x 1.9x 13.2 x 11.8 x 10.7 x

Luxoft Holding, Inc. (LXFT) $1,224 $930 $1,050 37.4% $118 $150 10.8% 1.2x 1.2x 1.1x 8.9 x 9.5 x 7.5 x

Mean $11,024 $3,097 $3,375 37.0% $628 $717 14.8% 3.1x 2.8x 2.5x 16.9x 15.3x 13.0x

Median $2,579 $930 $1,050 36.5% $170 $204 14.5% 3.2x 3.1x 2.7x 17.4x 14.4x 12.2x




(1)

(2)

ADP

G EPAM

WNS

GLOB

EXLS

LXFT

0.0 x

5.0 x

10.0 x

15.0 x

20.0 x

25.0 x

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

EV/EBITDA (2018E)


ADP

G

EPAM

WNS GLOB

EXLS

LXFT

0.0 x

0.5 x

1.0 x

1.5 x

2.0 x

2.5 x

3.0 x

3.5 x

4.0 x

4.5 x

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

EV/Revenue (2018E)



Valuation Metrics


INFRASTRUCTURE SERVICES



May 30 Provides end-to-end automation services

May 29 Provides cloud computing and infrastructure

solutions

May 8 Provides data hosting and IaaS services

May 7 Provides data center services

May 3 Provides cloud-based business and storage

solutions

Relative Valuation

EQIX VRSN

UTDI ZAYO

GDDY

WIX

EIGI

WEB

INAP

0.0 x

5.0 x

10.0 x

15.0 x

20.0 x

25.0 x

30.0 x

35.0 x

40.0 x

-10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

EV/EBITDA (2018E)


EQIX

VRSN

UTDI

ZAYO GDDY

WIX

EIGI

WEB INAP

0.0 x

2.0 x

4.0 x

6.0 x

8.0 x

10.0 x

12.0 x

14.0 x

0.0% 20.0% 40.0% 60.0% 80.0%

EV/Revenue (2018E)



LTM LTM



Equinix, Inc. (REIT) (EQIX) $31,533 $5,106 $5,682 49.4% $2,418 $2,738 44.2% 8.8x 8.0x 7.1x 18.2 x 16.8 x 14.8 x

VeriSign, Inc. (VRSN) $16,055 $1,213 $1,260 83.8% $866 $897 65.2% 13.7x 13.3x 12.8x 19.6 x 18.6 x 18.0 x

United Internet AG (UTDI) $12,779 $5,970 $6,335 35.3% $1,404 $1,534 22.3% 2.9x 2.5x 2.4x 12.7 x 10.7 x 9.8 x

Zayo Group Holdings, Inc. (ZAYO) $8,650 $2,636 $2,759 63.8% $1,315 $1,409 45.8% 5.5x 5.4x 5.1x 11.1 x 10.8 x 10.0 x

GoDaddy Inc. (GDDY) $11,227 $2,634 $2,945 65.7% $748 $807 14.3% 5.6x 5.0x 4.5x 30.7 x 17.7 x 16.4 x

Wix.com Ltd. (WIX) $4,077 $597 $753 82.2% $108 $172 -8.2% 8.1x 6.4x 5.1x NM 35.2 x 22.2 x

Endurance International Group Holdings, Inc. (EIGI) $1,277 $1,154 $1,166 51.5% $315 $320 25.1% 2.6x 2.7x 2.6x 8.8 x 9.8 x 9.6 x

Web.com Group, Inc. (WEB) $851 $749 $766 67.8% $186 $196 19.5% 2.0x 2.0x 1.9x 8.8 x 8.0 x 7.6 x

Internap Corporation (INAP) $214 $323 $340 54.7% $111 $119 29.3% 3.1x 2.7x 2.6x 10.1 x 7.8 x 7.3 x

Mean $9,629 $2,265 $2,445 61.6% $830 $910 29.7% 5.8x 5.3x 4.9x 15.0x 15.0x 12.9x

Median $8,650 $1,213 $1,260 63.8% $748 $807 27.2% 5.5x 5.0x 4.5x 11.9x 10.8x 10.0x




(1)

(2)


TECHNOLOGY SERVICES: INFORMATION SERVICES

Valuation Metrics


INFORMATION SERVICES



May 31 Provides analytics and news for credit market

professionals

May 17 . Provides ratings and research services

May 11 Provides credit reporting services

May 3 Provides shareholder engagement consulting

services

May 1 Provides patent risk management and discovery

services

Relative Valuation

SPGI

MCO Q

INFO

VRSK

MSCI IT

FDS

0.0 x

4.0 x

8.0 x

12.0 x

16.0 x

20.0 x

24.0 x

-30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0%

EV/EBITDA (2018E)


SPGI MCO

Q

INFO

VRSK

IT

FDS

0.0 x

1.0 x

2.0 x

3.0 x

4.0 x

5.0 x

6.0 x

7.0 x

8.0 x

9.0 x

10.0 x

0.0% 20.0% 40.0% 60.0% 80.0%

EV/Revenue (2018E)



LTM LTM



S&P Global Inc. (SPGI) $49,632 $6,459 $6,849 71.8% $3,185 $3,407 48.4% 8.6x 8.2x 7.7x 17.2 x 16.6 x 15.5 x

Moody's Corporation (MCO) $32,732 $4,692 $5,002 71.0% $2,271 $2,461 47.1% 8.5x 7.9x 7.4x 17.0 x 16.3 x 15.1 x

IQVIA Holdings Inc. (Q) $20,245 $10,246 $10,760 42.5% $2,185 $2,361 21.0% 3.6x 2.9x 2.8x 16.3 x 13.7 x 12.7 x

IHS Markit Ltd. (INFO) $19,284 $3,872 $4,095 62.8% $1,522 $1,653 31.5% 6.4x 6.0x 5.7x 16.6 x 15.4 x 14.2 x

Verisk Analytics, Inc. (VRSK) $17,557 $2,384 $2,552 63.0% $1,130 $1,224 45.5% 9.1x 8.5x 7.9x 19.9 x 17.9 x 16.5 x

MSCI Inc. (MSCI) $14,473 $1,440 $1,573 79.0% $788 $881 52.4% 11.9x 10.9x 10.0x 21.5 x 19.9 x 17.8 x

Gartner, Inc. (IT) $12,111 $3,989 $4,403 60.6% $741 $841 11.4% 4.1x 3.7x 3.4x 29.5 x 20.1 x 17.7 x

FactSet Research Systems Inc. (FDS) $7,814 $1,373 $1,470 52.0% $469 $512 32.8% 6.2x 5.9x 5.5x 17.5 x 17.3 x 15.9 x

Mean $21,731 $4,307 $4,588 62.8% $1,536 $1,667 36.3% 7.3x 6.8x 6.3x 19.4x 17.2x 15.7x

Median $18,421 $3,930 $4,249 62.9% $1,326 $1,438 39.2% 7.4x 7.0x 6.6x 17.3x 17.0x 15.7x




(1)

(2)


TECHNOLOGY SERVICES: INFORMATION SERVICES


May 31 Provides performance management software

solutions for healthcare practices

May 29 Develops web and mobile medical billing

solutions

May 9 Designs and develops user experience solutions

for monitoring patient compliance

May 4 Develops software solutions for health

information exchanges and patient engagement

May 2 Developer of a cloud-based solution for

laboratory management

Valuation Metrics


HEALTHCARE IT

Source: CapitalIQ*Please contact the MHH Technology Services Group directly for any information regarding valuation and deal size**Excluded: CSLT

Relative Valuation**

(aka Zone3W Inc.)


LTM LTM



Cerner Corporation (CERN) $19,803 $5,371 $5,820 84.5% $1,626 $1,783 26.2% 3.8x 3.6x 3.3x 13.6 x 11.9 x 10.8 x

Veeva Systems Inc. (VEEV) $11,075 $829 $975 69.1% $277 $327 23.6% 14.1x 12.2x 10.4x 44.2 x 36.7 x 31.1 x

athenahealth, Inc. (ATHN) $6,080 $1,354 $1,485 54.1% $376 $418 16.8% 4.9x 4.6x 4.2x 23.1 x 16.5 x 14.8 x

Allscripts Healthcare Solutions, Inc. (MDRX) $2,251 $2,178 $2,288 49.6% $432 $468 7.6% 2.3x 2.0x 1.9x 22.8 x 10.0 x 9.2 x

Inovalon Holdings, Inc. (INOV) $1,584 $564 $644 66.3% $161 $194 12.8% 3.2x 2.4x 2.1x 18.8 x 8.6 x 7.1 x

Quality Systems, Inc. (QSII) $1,124 $537 $563 54.5% $84 $89 8.4% 2.1x 2.1x 2.0x 19.9 x 13.4 x 12.7 x

National Research Corporation (NRC) $848 NA NA 58.2% NA NA 32.1% 6.9x NM NM 20.4 x NM NM

HealthStream, Inc. (HSTM) $900 $229 $239 57.3% $39 $43 11.0% 2.8x 3.1x 3.0x 24.0 x 17.9 x 16.4 x

Computer Programs and Systems, Inc. (CPSI) $440 $291 $301 55.6% $52 $51 13.1% 2.0x 2.0x 1.9x 12.9 x 11.1 x 11.3 x

Castlight Health, Inc. (CSLT) $490 $154 $181 61.4% ($14) $7 -38.1% 3.0x 2.7x 2.3x NM NM NM

Mean $4,459 $1,279 $1,388 61.1% $337 $376 11.3% 4.5x 3.9x 3.5x 22.2x 15.8x 14.2x

Median $1,354 $564 $644 57.7% $161 $194 13.0% 3.1x 2.7x 2.3x 20.4x 12.7x 12.0x




(1)

(2)

CERN

VEEV

ATHN

MDRX INOV

QSII

NRC

0.0 x

5.0 x

10.0 x

15.0 x

20.0 x

25.0 x

30.0 x

35.0 x

40.0 x

0.0% 10.0% 20.0% 30.0%

EV/EBITDA (2018E)


CERN

VEEV

ATHN

MDRX

INOV

QSII NRC

0.0 x

2.0 x

4.0 x

6.0 x

8.0 x

10.0 x

12.0 x

14.0 x

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

EV/Revenue (2017E)


TECHNOLOGY SERVICES MONTHLY

The Mufson Howe Hunter Technology Services IndicesIT Outsourcing is currently comprised of: ACN, CTSH, INFY, NESI:HCLTECH, GIB.A, WIT, ENXTPA:ATO, SYNT, VRTU, PRFT; Business Process Outsourcing Index is currently comprised of: ADP, G, EPAM, LXFT, EXLS, WNS,GLOB; Infrastructure Services Index is currently comprised of: EQIX, ZAYO, UTDI, VRSN, DFT, GDDY, EIGI, WIX, WEB, INAP; Information Services Index is currently comprised of: SPGI, Q, MCO, INFO, VRSK, IT, MSCI, FDS;and, Healthcare IT is currently comprised of: CERN, VEEV, ATHN, MDRX, WBMD, INOV, QSII, HSTM, NRCI.B, CPSI, CSLT.

The companies that comprise each Index periodically change as a result of mergers, acquisitions, initial public offerings and other transactions; therefore, comparisons to historical time periods and historicalperformance for each Index may not entirely correspond and correlate to the Index’s current performance. Historical performance is not a guarantee or prediction of future results. The information and statistical datacontained herein have been obtained from sources that Mufson Howe Hunter believes are reliable, but Mufson Howe Hunter makes no representation or warranty as to the accuracy or completeness of any suchinformation and data and expressly disclaims any and all liability relating to or resulting from your use of these materials. The information and data contained herein are current only as of the date(s) indicated andMufson Howe Hunter has no intention, obligation or duty to update these materials after such date(s). These materials do not constitute an offer to sell or the solicitation of an offer to buy any securities.

Copyright © January 2018 Mufson Howe Hunter & Company LLC. All rights reserved. Technology Services Monthly is produced monthly by Mufson Howe Hunter. Mufson Howe Hunter provides a full range of investment

banking services to Technology Services companies. For more information, visit www.mhhco.com.Icons by Flaticon.

1717 Arch Street, 39th Floor · Philadelphia, PA 19103 · www.mhhco.com

Brandon EckManaging Director,

Head of Technology Services


For more information, please contact:

Andrew WilsonVice President,

Technology Services


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