Strategic Market Insights – Q2 2017 Report
Technology & Business Services
www.g2cap.com 2
IT Consulting – Claiming over seven transactions in the second quarter of 2017 alone, IT
consulting firms continue to draw significant interest from both strategic and financial buyers.
Though primarily project driven, IT consulting business models typically yield higher margins with
managed service offerings such as cybersecurity and cloud services.
Niche Specialty – Not dissimilar to consolidation trends for IT consulting firms, other niche
consulting firms specializing in sectors such as, financial/accounting, risk & advisory, crypto-
currency, litigation, engineering, and environmental have seen an increase in acquisitions as larger
strategic firms such as Huron Consulting, Navigant, FTI Consulting, and CBIZ attempt to acquire
new clientele and service offerings.
G2 Mandates – G2 is currently retained on both sell-side and buy-side capacities for an IT
consulting services provider, financial advisory services provider, energy consultancy, IT
staffing and augmentation provider, and specialty finance and technology consulting firm.
Source: G2 Insights, S&P Capital IQ
G2 Insights – Specialty Consulting
Specialty Consulting, in the form of both IT services and niche professional services encompassing
litigation, financial advisory, and environmental consulting, has seen increased interest from larger
strategic and financial buyers amid industry consolidation to drive inorganic growth.
Technology & Business ServicesG2 Insights – Cloud Services
Source: G2 Insights, Gartner 2017
The cloud services market remains relatively undeveloped and is poised for both growth and
consolidation through 2018. Within the cloud sector, managed service providers (MSPs) are expected
to continue to grow to address hyperscale cloud ecosystems.
Sub-Sector Summary – As MSPs tack on value-added capabilities, cloud infrastructure as a service
(IaaS) offerings have emerged to allow businesses to compute, store, and analyze resources,
complimenting existing platforms as a service (PaaS) providers. This cloud ecosystem often requires
“stickier” contracts from MSPs.
Foundation - Types of IaaS + PaaS providers – Amazon Web Services (AWS), Microsoft Azure,
and Google Cloud Platform (GCP) all provide hyperscale integrated IaaS+PaaS eco systems with
opportunities for third party MSPs to consult and maintain such systems
MSP Opportunity – Cloud MSPs use cloud management platforms (CMPs) to service, automate,
and customize the aforementioned IaaS and PaaS products, differentiating them from data center
outsourcing (DCO) providers
Additional Value-Added Offerings – Outlined by Gartner, Cloud MSPs can ideally provide a
management portal with a cloud service expense management (CSEM) function, qualified technical
support, and professional services with the ability to customize architecture, data migration, and
DevOps automation.
Cloud MSP
Leaders
Technology & Business Services
www.g2cap.com 3
Key Trading Statistics
Selected Industry Deals Q2 2017
Technology & Business Services
Technology & Business Services
Sector Summary in Millions USD (converted where necessary)
Data sourced from S&P Capital IQ on June 30, 2017
FY 20171 LTM2
SectorNumber of
Companies
Median Enterprise
Value (MM)
Median
Revenue
Growth
Median
EBITDA
Growth*
EV /
Revenue
EV /
EBITDA
Business Process
Outsourcing16 11,657 8.1% 7.0% 2.5x 13.0x
Human Capital
Management16 931 5.3% 6.0% 0.5x 9.9x
Cloud Software &
Services20 2,432 15.4% 19.8% 5.0x NM
Consulting Services 18 1,059 7.7% 5.7% 1.3x 10.8x
E-Commerce &
Enterprise 21 3,236 11.7% 36.5% 4.8x 17.1x
1 Compared with values at June 30, 20162 LTM Multiples as at June 30, 2016
* YoY growth calculations exclude companies with negative margins in either period
considered.
Several notable transactions have already been completed or announced in the Technology &
Business Services industry through Q2 2017. G2 has outlined select transactions below, followed by
a more comprehensive list on the following tables.
POS Portal acquired by ScanSource,, Inc. (Nasdaq:SCSC) (June 2017) – POS Portal, Inc., a
distributor of point of sales equipment and integration services for warehousing and supply chain
applications, was acquired by ScanSource, a technology distributor with point of sale, barcoding,
networking & security, and hosting services divisions. The transaction size was $158.1MM with
$26.2MM in total earnouts. ScanSource’s acquisition was in line with their corporate development
initiatives as the company looked to growth via organic means augmented by strategic acquisitions.
Xactly Corporation acquired by Vista Equity Partners (May 2017) – Xactly Corporation, a provider of
cloud-based incentive compensation for employees and other performance management services,
was acquired by Vista Equity Partners, a private equity firm focused on middle and upper middle
market investments. The transaction size was $574.8MM at a 5.5x revenue multiple with $34.6MM
in warrants and options. Vista Equity Partners funded the acquisition through their Vista Fund IV, a
$3.5B fund that closed in May of 2012.
SNI Companies acquired by GEE Group Inc. (AMEX:JOB) (April 2017) – SNI Companies, a
professional staffing and recruitment services provider, was acquired by GEE Group Inc. for
$86.0MM. The deal was structured as $44.7MM in cash, $28.8MM in convertible preferred stock,
and $12.5MM of convertible subordinated notes. The deal broadens GEE’s foothold in Iowa,
Louisiana, Minnesota, New Jersey, and Pennsylvania.Source: CRN, S&P Capital IQ
www.g2cap.com 4
Technology & Business ServicesSelect M&A Activity – Pending & Closed
Business Process Outsourcing
Sector Summary in Millions USD (converted where necessary)
Data sourced from S&P Capital IQ on June 30, 2017
Date Closed Target Acquirer / InvestorImplied Enterprise
Value (MM)EV / EBITDA EV / Revenue
Pending GC Pivotal LLC GTT Americas, LLC $157.8 - -
Pending TMG Health, Inc.Cognizant Technology
Solutions Corporation- - -
PendingUrban Fulfillment Services,
LLCHCL Technologies Limited - - -
PendingBlue Vase Marketing LLC,
Call Center CapabilitiesGreat Falls Marketing, LLC - - -
Jul-17 Kofax Limited Thoma Bravo, LLC $1,350.0 - 0.3x
Jun-17 Output Services Group, Inc.Aquiline Capital Partners
LLC- - -
May-17
Vertex Business Services,
LLC, BPO And Contact
Center Operations
Faneuil, Inc. $12.7 - -
May-17Paradigm Technology
Consulting, LLC
Geisinger Medical
Management Corporation- NM -
Apr-17 EXCELTO Solutions LLC Trimax Americas - - -
Apr-17 National Legal Services, LLC Ontellus - - -
Apr-17 Connextions, Inc.TeleTech Healthcare
Solutions, Inc.$80.0 - -
Human Capital Management
Date Closed Target Acquirer / InvestorImplied Enterprise
Value (MM)EV / EBITDA EV / Revenue
PendingPeople Store Staffing
Solutions Inc.
Peoplesource Staffing
Solutions, Inc.- - -
Pending RCK, LLC Corps Team Services, LLC - - -
Jul-17 intraFUSION, Inc. McKesson Specialty Health - - -
Jul-17 Advantage RN, LLCCross Country Healthcare,
Inc.$86.8 8.7x 0.9x
Jun-17Virtual Resource
Management Corporation
Industrial Staffing Services,
Inc.- - -
Jun-17 TriCore Solutions, LLC Rackspace Hosting, Inc. - - -
Jun-17 Medical Solutions L.L.C. TPG Growth - - -
May-17 Jibe Consulting, Inc. The Hackett Group, Inc. $20.0 - -
May-17
PrideStaff, Inc., Staffing and
Employment Agency in San
Diego, California
Undisclosed - - -
www.g2cap.com 5
Technology & Business ServicesSelect M&A Activity – Pending & Closed
Sector Summary in Millions USD (converted where necessary)
Data sourced from S&P Capital IQ on June 30, 2017
Human Capital Management (continued)
Cloud & Software Services
Date Closed Target Acquirer / Investor
Implied
Enterprise
Value (MM)
EV / EBITDA EV / Revenue
Pending West Corporation Apollo Global Management, LLC $4,887.4 7.7x 2.1x
Pending Saggezza Inc. Cisco Systems, Inc. - - -
PendingVerizon Communications Inc., Cloud
and Hosting Service Business
International Business Machines
Corporation- - -
Pending Viptela, Inc. Cisco Systems, Inc. $610.0 - -
Pending Guavus, Inc. Thales S.A. $215.0 - 7.2x
Pending Synchronoss Technologies, Inc. Siris Capital Group, LLC $986.1 18.2x 2.1x
Pending ViaWest, Inc. Peak 10 Holding Corporation $1,675.0 - -
Jul-17 Broadview Networks Holdings, Inc. Windstream Holdings, Inc. $196.1 4.3x 0.7x
Jul-17 Cloudyn Software Ltd.Microsoft Israel Research And
Development (2002) Ltd- - -
Jun-17 Jive Software, Inc. Wave Systems Corp. $343.5 69.1x 1.7x
Jun-17 Quality Technology Solutions, Inc.Axispoint Technology Solutions
Group, Inc.- - -
Jun-17 Riskonnect, Inc.Thoma Bravo, LLC; Thoma
Bravo Discover Fund Partnership- - -
Jun-17 Continuum Managed Services, LLCThoma Bravo, LLC; Thoma
Bravo Discover Fund Partnership- - -
May-17Oracle Corporation, Oracle Analytics
CloudinterRel Consulting Partners, LLP - - -
May-17 OneCloud Consulting Inc. ePlus Technology, inc. $13.3 - -
Apr-17 iDevices, LLC Hubbell Incorporated $60.0 - -
Apr-17 Spanning Cloud Apps, LLC Insight Venture Partners LLC - - -
Date Closed Target Acquirer / InvestorImplied Enterprise
Value (MM)EV / EBITDA EV / Revenue
May-17PrideStaff, Inc., Staffing and
Employment Agency in DallasUndisclosed - - -
May-17Synergy Emergency
Physicians, Inc.Team Health, Inc. - - -
Apr-17 Dahl Consulting, Inc.Doherty Staffing Solutions,
Inc.- - -
Apr-17 EXCELTO Solutions LLC Trimax Americas - - -
Apr-17 Zycron, Inc. BG Staffing, LLC $23.0 - 0.6x
Apr-17 Global HR Research, LLC Renovo Capital, LLC $30.0 - -
Apr-17 entero LLCBucher & Christian
Consulting, Inc.- - -
Apr-17 SNI Companies Inc. Gee Group Inc. $86.0 - 0.8x
www.g2cap.com 6
Technology & Business ServicesSelect M&A Activity – Pending & Closed
Sector Summary in Millions USD (converted where necessary)
Data sourced from S&P Capital IQ on June 30, 2017
Consulting Services
Date Closed Target Acquirer / InvestorImplied Enterprise
Value (MM)EV / EBITDA EV / Revenue
Pending Legends Hospitality LLC New Mountain Capital, LLC - - -
Pending InfomartMeltwater News Canada
Inc.$38.3 - -
PendingPhase One Consulting Group,
Inc.
Accenture Federal
Services LLC- - -
Jun-17 LabAnswer Government LLC Accenture plc $93 - -
Jun-17 Clarity Consulting, Inc. Perficient, Inc. $9.4 - 0.3x
Jun-17Doman Networking Services
Inc.
Coordinated Business
Systems, Ltd. of Minnesota- - -
Jun-17 The Crypto Company CROE, INC. $25.3 - -
Jun-17 CMF Associates, LLC CBIZ, Inc. - - -
Jun-17 Lux Research, Inc. Bregal Sagemount - - -
Jun-17 Ciber, Inc. HTC Global Ventures, LLC $93 - -
Jun-17Vicenti, Lloyd & Stutzman
LLPCliftonLarsonAllen LLP - - -
Jun-17Ciber, Inc., Substantially All
AssetsHTC Global Ventures, LLC - - -
May-17 Paragon Audit & Consulting BKD, LLP - - -
May-17 McGee Partners, Inc.Vanasse Hangen Brustlin,
Inc.- - -
May-17 Robert Gregory Partners, LLC Franklin Covey Co. $8.0 - -
May-17 The Paciello Group, LLP Freedom Scientific Inc. - NM -
May-17 AIM Consulting Group, LLC Addison Group, LLC - - -
Apr-17Computer Technology
Solutions, Inc.CGI Group Inc. - - -
Apr-17Advanced Technology
Solutions, Inc.
IMAGINiT Technologies
Inc.- - -
Apr-17 ADI Strategies, Inc.Huron Consulting Group
Inc.- - -
www.g2cap.com 7
Technology & Business ServicesSelect M&A Activity – Pending & Closed
Sector Summary in Millions USD (converted where necessary)
Data sourced from S&P Capital IQ on June 30, 2017
E-Commerce & Enterprise
Date Closed Target Acquirer / InvestorImplied Enterprise
Value (MM)EV / EBITDA EV / Revenue
Pending LLamasoft, Inc. TPG Capital, L.P. - - -
Pending ECommerce Systems, Inc. CGI Group Inc. - - -
Pending Wavefront, Inc. VMware, Inc. - - -
Pending GENBAND US LLC Sonus Networks, Inc. $338.5 14.3x 0.8x
Pending Erecruit Holdings, LLCBond International
Software plc- - -
Pending Mercury Network, LLC CoreLogic, Inc. - - -
Pending TeleSign CorporationBelgacom International
Carrier Services SA$230.0 - 2.3x
Pending Angie's List, Inc. HomeAdvisor, Inc. $566.8 NM 1.9x
Jul-17 Covisint Corporation Open Text Corporation $69.2 NM 1.0x
Jul-17 Xactly Corporation
Vista Equity Partners LLC;
Vista Equity Partners Fund
VI, L.P.
$530.6 NM 5.5x
Jun-17FMT Consultants, LLC, SAP
Business ByDesignVistaVu Solutions Ltd. - - -
Jun-17 TradeMotion, LLCThe Reynolds and
Reynolds Company- - -
Jun-17 FDM Software Ltd. Aptean, Inc. - - -
Jun-17 SolutionsIQ, Inc. Accenture plc - - -
Jun-17 Pipeline Group, Inc.Prometheus Group
Enterprises, LLC- - -
May-17 Kony, Inc.Diebold Nixdorf,
Incorporated- - -
May-17 Lochbridge, Inc. Digital Management, Inc. - - -
May-17 HubLogix, Inc.ChannelAdvisor
Corporation- - -
May-17 Tomont Solutions Inc. KPMG LLP (Canada) - - -
May-17 Apprise Software, Inc. Aptean, Inc. - - -
Apr-17 PayVisors LLC Zift LLC - - -
Apr-17 Govenda, LLCDigital Evolution Group
LLC- - -
Apr-17 Echo Cloud Solutions, LLC Online Tech, Inc. - - -
Apr-17 Mainstream Software Inc. CBRE Group, Inc. - - -
www.g2cap.com 8
Technology & Business ServicesPublic Trading Metrics – Business Process Outsourcing
Sector Summary in Millions USD (converted where necessary)
Charts show average daily multiples for each year
Data sourced from S&P Capital IQ on June 30, 2017
IndustryEnterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDA
EBITDA
MarginLT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
Mean15,615 15,130 925 5,190 1,112 17.5% 1,780 1.9x 2.5x 12.5x
Median11,657 10,814 614 3,107 638 19.7% 747 1.6x 2.5x 13.0x
Company Ticker
Size (Millions USD)
EBITDA
Margin
Leverage Valuation
Enterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDALT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
Automatic Data Processing,
Inc.NASDAQGS:ADP 44,853 45,842 2,780 12,380 2,722 22.0% 2,002 0.7x 3.6x 16.5x
Cognizant Technology
Solutions CorporationNasdaqGS:CTSH 36,044 39,109 1,157 14,131 2,775 19.6% 747 0.3x 2.6x 13.0x
Convergys Corporation NYSE:CVG 2,394 2,238 177 2,919 367 12.6% 343 0.9x 0.8x 6.5x
Equifax Inc. NYSE: EFX 19,129 16,519 404 3,294 1,220 37.0% 2,038 1.7x NM 15.7x
ExlService Holdings, Inc. NasdaqGS:EXLS 1,699 1,872 89 721 101 14.0% 35 0.3x 2.4x 16.8x
DXC Technology Company NYSE:DXC 23,817 21,838 1,263 7,607 640 8.4% 2,159 3.4x 3.1x NM
Fidelity National Information
Services, Inc.NYSE:FIS 37,144 28,232 786 9,351 2,499 26.7% 9,415 3.8x 4.0x 14.9x
Genpact Limited NYSE:G 6,069 5,364 441 2,624 427 16.3% 1,026 2.4x 2.3x 14.2x
Global Payments Inc. NYSE:GPN 17,335 13,772 1,081 4,189 1,148 27.4% 4,175 3.6x 4.1x 15.1x
Infosys Limited NSEI:INFY 28,048 33,089 3,579 10,358 2,811 27.1% NA NA 2.7x 10.0x
Sykes Enterprises,
IncorporatedNasdaqGS:SYKE 1,390 1,410 287 1,523 172 11.3% 267 1.6x 0.9x 8.1x
TeleTech Holdings, Inc. NasdaqGS:TTEC 1,984 1,861 66 1,301 163 12.6% 182 1.1x 1.5x 12.1x
West Corporation NasdaqGS:WSTC 4,968 1,986 192 2,286 636 27.8% 3,065 4.8x 2.2x 7.8x
Wipro Limited BSE:507685 16,281 19,373 840 8,521 1,691 19.8% 503 0.3x 1.9x 9.6x
Wirecard AG XTRA:WDI 7,033 7,855 1,551 1,204 335 27.8% 659 2.0x NM NM
WNS (Holdings) Limited NYSE:WNS 1,653 1,718 105 635 86 13.6% 89 1.0x 2.6x NM
11.8x10.9x
8.9x
10.8x11.1x
9.9x
11.1x
10.7x
12.2x
12.7x12.5x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
EV
/ E
BIT
DA
S&P 500
2.7x
2.3x
1.9x
3.0x
2.4x2.1x
2.4x2.6x
2.9x
2.5x2.5x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
EV
/ R
EV
EN
UE
S&P 500
www.g2cap.com 9
Technology & Business ServicesPublic Trading Metrics – Human Capital Management
Sector Summary in Millions USD (converted where necessary)
Charts show average daily multiples for each year
Data sourced from S&P Capital IQ on June 30, 2017
IndustryEnterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDA
EBITDA
MarginLT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
Mean 3,195 3,022 196 6,143 336 5.0% 426 1.0x 0.5x 9.0x
Median 931 928 23 2,003 113 4.9% 104 0.8x 0.5x 9.3x
Company Ticker
Size (Millions USD)
EBITDA
Margin
Leverage Valuation
Enterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDALT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
Adecco Group AG SWX:ADEN 13,885 12,957 1,270 24,707 1,305 5.3% 1,787 1.4x 0.6x 10.6x
Barrett Business Services,
Inc.NASDAQ:BBSI 401 415 18 860 28 3.2% NA NA 0.5x 14.5x
BG Staffing, Inc. AMEX:BGSF 172 152 0 257 22 8.7% 39 1.7x 0.7x 7.6x
CDI Corp. NYSE:CDI 117 109 7 818 (8) -1.0% NA NA 0.1x NM
Computer Task Group,
IncorporatedNASDAQ:CTG 77 87 12 308 6 1.9% 3 0.5x 0.2x 13.1x
Hays plc LSE:HAS 3,049 3,111 141 5,768 379 6.6% 80 0.2x 0.5x 8.1x
Hudson Global, Inc NASDAQ:HSON 39 42 15 425 4 0.9% NA NA 0.1x 9.8x
Kelly Services, Inc. NASDAQ:KELY.A 813 859 46 5,217 92 1.8% NA NA 0.2x 8.9x
Kforce Inc. NASDAQ:KFRC 628 495 4 1,337 74 5.5% 128 1.7x 0.5x 8.5x
ManpowerGroup Inc. NYSE:MAN 7,685 7,489 573 19,976 853 4.3% 455 0.5x 0.4x 9.0x
On Assignment, Inc. NYSE:ASGN 3,453 2,860 19 2,530 265 10.5% 580 2.2x 1.4x 13.0x
PageGroup plc LSE:PAGE 1,790 1,911 115 1,477 134 9.1% NA NA 1.2x 13.3x
Randstad Holding NV ENXTAM:RAND 11,985 10,688 374 25,439 1,138 4.5% 1,135 1.0x 0.5x 10.5x
Robert Half International Inc. NYSE:RHI 5,836 6,096 298 5,199 592 11.4% 1 0.0x 1.1x 9.9x
TrueBlue, Inc. NYSE:TBI 1,050 996 26 2,673 143 5.3% 55 0.4x 0.4x 7.4x
Volt Information Sciences,
Inc.AMEX:VISI 149 83 21 1,288 6 0.4% NA NA 0.1x NM
0.7x
0.4x0.3x
0.5x0.5x0.5x0.6x0.6x0.6x
0.5x0.5x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
EV
/ R
EV
EN
UE
S&P 5009.9x
5.4x6.7x
11.6x10.7x
8.7x
10.9x
11.1x
10.4x
8.9x 9.0x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
EV
/ E
BIT
DA
S&P 500
www.g2cap.com 10
Technology & Business ServicesPublic Trading Metrics – Cloud Software & Services
Sector Summary in Millions USD (converted where necessary)
Charts show average daily multiples for each year
Data sourced from S&P Capital IQ on June 30, 2017
IndustryEnterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDA
EBITDA
MarginLT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
Mean 41,159 44,768 1,240 8,502 4,610 17.6% 8,348 2.7x 4.2x 13.4x
Median 2,432 2,692 156 461 31 3.5% 674 1.2x 4.7x 12.2x
Company Ticker
Size (Millions USD)EBITDA
Margin
Leverage Valuation
Enterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDALT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
Adobe Systems Incorporated NASDAQ:ADBE 66,744 69,787 1,317 6,526 2,141 32.8% 1,888 0.9x NM NM
Aerohive Networks, Inc. NYSE:HIVE 209 264 35 161 (24) -14.8% 20 -0.8x 1.3x -8.8x
Akamai Technologies, Inc. NASDAQ:AKAM 8,411 8,611 353 2,418 691 28.6% 651 0.9x 3.5x 12.2x
Amber Road, Inc. NYSE:AMBR 240 232 11 76 (11) -14.2% 19 -1.8x 3.1x NM
athenahealth, Inc. NASDAQ:ATHN 5,784 5,599 71 1,151 128 11.1% 264 2.1x 5.0x NM
Box, Inc. NYSE:BOX 2,362 2,465 184 426 (117) -27.4% 40 -0.3x 5.5x NM
Cisco Systems, Inc. NASDAQ:CSCO 120,998 156,502 8,116 48,510 15,048 31.0% 28,222 1.9x 2.5x 8.0x
Citrix Systems, Inc. NASDAQ:CTXS 12,072 12,028 845 3,441 987 28.7% 1,367 1.4x 3.5x 12.2x
Cogint, Inc. NASDAQ:COGT 318 277 22 198 (14) -7.1% 60 -4.3x 1.6x NM
Cornerstone OnDemand, Inc. NasdaqGS:CSOD 1,982 2,031 107 445 (45) -10.2% NA NA 4.5x NM
Instructure, Inc. NYSE:INST 815 853 26 134 (47) -35.4% NA NA 6.1x NM
Microsoft Corporation NasdaqGS:MSFT 496,594 532,175 7,663 89,950 30,432 33.8% 76,073 2.5x 5.5x 16.3x
Qualys, Inc. NasdaqGS:QLYS 1,266 1,511 131 212 52 24.8% NA NA 6.0x NM
Salesforce.com, inc. NYSE:CRM 60,918 61,602 2,025 8,863 449 5.1% 696 1.6x 6.9x NM
ServiceNow, Inc. NYSE:NOW 17,548 18,007 1,173 1,632 (32) -2.0% 1,140 -35.4x NM NM
Symantec Corporation NASDAQ:SYMC 21,113 17,183 2,306 4,310 714 16.6% 6,202 8.7x 4.9x NM
Synchronoss Technologies,
Inc.NASDAQ:SNCR 887 763 181 477 54 11.4% 226 4.2x 1.9x 16.3x
Twilio Inc. NYSE:TWLO 2,345 2,634 118 305 (41) -13.3% NA NA 7.7x NM
Wayside Technology Group,
Inc.NASDAQ:WSTG 77 88 10 435 9 2.0% NA NA 0.2x 8.7x
Zendesk, Inc. NYSE:ZEN 2,501 2,749 103 364 (84) -23.0% NA NA 6.9x NM
5.7x
4.3x
3.3x
4.4x4.3x
3.9x4.2x
4.4x4.7x
4.5x4.2x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
EV
/ R
EV
EN
UE
S&P 500
13.9x
11.1x
9.7x
12.8x
10.6x10.8x
12.2x
10.3x
10.4x
11.1x
13.4x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
EV
/ E
BIT
DA
S&P 500
www.g2cap.com 11
Technology & Business ServicesPublic Trading Metrics – Consulting Services
Sector Summary in Millions USD (converted where necessary)
Charts show average daily multiples for each year
Data sourced from S&P Capital IQ on June 30, 2017
IndustryEnterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDA
EBITDA
MarginLT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
Mean 6,204 6,077 325 3,529 512 10.1% 489 1.9x 1.5x 12.0x
Median 1,059 844 30 658 82 10.9% 135 1.7x 1.3x 10.8x
Company Ticker
Size (Millions USD)
EBITDA
Margin
Leverage Valuation
Enterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDALT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
Accenture plc NYSE:ACN 73,785 76,433 3,382 34,189 5,804 17.0% 25 0.0x 2.2x 12.7x
Booz Allen Hamilton Holding
CorporationNYSE:BAH 6,273 4,828 337 5,875 559 9.5% 1,799 3.2x 1.1x 11.2x
Capgemini SE ENXTPA:CAP 18,722 16,916 1,505 14,483 1,843 12.7% 3,695 2.0x 1.3x 10.2x
CBIZ, Inc. NYSE:CBZ 1,014 803 1 831 92 11.0% 211 2.3x 1.2x 11.1x
CRA International, Inc. NasdaqGS:CRAI 296 311 22 332 27 8.3% NA NA 0.9x 10.8x
Ecology & Environment, Inc. NasdaqGM:EEI 44 54 11 101 6 5.6% 0 0.0x 0.4x 7.7x
Exponent, Inc. NasdaqGS:EXPO 1,353 1,508 90 312 72 23.1% NA NA 4.3x NM
Franklin Covey Co. NYSE:FC 298 267 8 191 7 3.8% 32 4.5x 1.6x NM
FTI Consulting, Inc. NYSE:FCN 1,610 1,328 139 1,771 149 8.4% 481 3.2x 0.9x 10.8x
Huron Consulting Group Inc. Nasdaq: HURN 1,327 918 14 732 112 15.3% 400 3.6x 1.8x 11.8x
ICF International, Inc. NASDAQ:ICFI 1,153 885 9 1,199 115 9.6% 278 2.4x 1.0x 10.0x
Navigant Consulting, Inc. NYSE:NCI 1,103 934 7 948 131 13.8% 185 1.4x 1.2x 8.4x
NV5 Global, Inc. NasdaqCM:NVEE 447 450 34 243 26 10.9% 21 0.8x 1.8x 16.9x
Resources Connection, Inc. NasdaqGS:RECN 410 406 62 583 42 7.2% 48 1.1x 0.7x 9.8x
Ricardo plc LSE:RCDO 597 536 35 422 58 13.8% 86 1.5x 1.4x 10.2x
The Advisory Board Company Nasdaq: ABCO 2,544 2,090 150 797 118 14.8% 549 4.6x 3.2x NM
The Hackett Group, Inc. NasdaqGS:HCKT 445 453 17 263 40 15.3% 9 0.2x 1.7x 11.0x
Willdan Group, Inc. Nasdaq: WLDN 249 263 26 256 16 6.2% 2 0.1x 1.0x 15.7x
9.9x
8.7x
7.6x
8.4x 8.4x
7.4x8.2x
10.0x10.9x
10.9x12.0x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
EV
/ E
BIT
DA
S&P 500
1.3x
1.2x
0.9x1.0x
1.1x1.1x
1.2x1.3x
1.5x 1.4x
1.5x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
EV
/ R
EV
EN
UE
S&P 500
www.g2cap.com 12
Technology & Business ServicesPublic Trading Metrics – E-Commerce & Enterprise Software
Sector Summary in Millions USD (converted where necessary)
Charts show average daily multiples for each year
Data sourced from S&P Capital IQ on June 30, 2017
IndustryEnterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDA
EBITDA
MarginLT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
Mean 54,218 53,884 2,692 12,579 4,081 21.9% 12,789 4.3x 4.0x 16.0x
Median 3,236 2,816 132 597 124 23.2% 1,155 2.3x 4.6x 16.5x
Company Ticker
Size (Millions USD)EBITDA
Margin
Leverage Valuation
Enterprise
Value
Market
CapCash
LTM
Revenue
LTM
EBITDALT Debt
LT Debt /
EBITDA
EV / LTM
Revenue
EV / LTM
EBITDA
American Software, Inc.NASDAQ:AMSW.
A218 303 66 106 10 9.7% NA NA 2.1x 21.2x
ARI Network Services, Inc. NASDAQ:ARIS 129 119 6 51 7 12.8% 13 1.9x 2.5x 19.7x
BlackBerry Limited TSX:BB 3,838 5,295 933 1,144 124 10.8% 809 6.5x 3.4x NM
Ebix, Inc. NASDAQ:EBIX 1,898 1,700 120 306 111 36.3% 297 2.7x 6.2x 17.1x
First Data Corporation NYSE:FDC 37,834 16,727 0 7,960 2,780 34.9% NA NA 4.8x 13.6x
Global Payments Inc. NYSE:GPN 17,335 13,772 1,081 4,189 1,148 27.4% 4,175 3.6x 4.1x 15.1x
International Business
Machines CorporationNYSE:IBM 176,735 144,523 11,696 78,439 17,194 21.9% 37,615 2.2x 2.3x 10.3x
Intuit Inc. NASDAQ:INTU 32,935 34,028 1,350 5,089 1,580 31.0% 450 0.3x 6.5x 20.8x
Kinaxis Inc. TSX:KXS 1,426 1,571 142 121 20 16.7% NA NA NM NM
Manhattan Associates, Inc. NASDAQ:MANH 3,236 3,337 77 597 202 33.8% NA NA 5.4x 16.0x
Microsoft Corporation NASDAQ:MSFT 496,594 532,175 7,663 89,950 30,432 33.8% 76,073 2.5x 5.5x 16.3x
MobileIron, Inc. NASDAQ:MOBL 467 558 86 172 (50) -29.2% NA NA 2.7x NM
ModusLink Global Solutions,
Inc.NASDAQ:MLNK 29 94 112 438 (11) -2.5% 59 -5.3x 0.1x -2.7x
Oracle Corporation NYSE:ORCL 199,630 207,413 21,784 37,728 14,669 38.9% 48,112 3.3x 5.3x 13.6x
Park City Group, Inc. NASDAQ:PCYG 226 236 14 18 4 23.2% 1 0.1x NM NM
Pitney Bowes Inc. NYSE:PBI 5,318 2,816 841 3,384 714 21.1% 2,543 3.6x 1.6x 7.4x
SAP SE NYSE:SAP 126,476 125,588 4,833 26,428 6,585 24.9% 7,102 1.1x 4.8x 19.2x
Sophos Group plc LSE:SOPH 2,942 2,654 68 530 11 2.0% 296 27.9x 5.6x NM
SPS Commerce, Inc. NASDAQ:SPSC 942 1,096 132 207 23 11.1% NA NA 4.6x NM
The Descartes Systems Group
IncTSX:DSG 1,787 1,844 54 209 70 33.5% NA NA 8.5x 25.5x
VMware, Inc. NYSE:VMW 28,595 35,707 2,790 7,093 1,850 26.1% 1,500 0.8x 4.0x 15.5x
12.6x
9.5x
8.7x
9.6x9.3x
9.8x10.9x
12.5x13.4x
14.9x
16.0x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
EV
/ E
BIT
DA
S&P 500
3.4x3.2x
2.7x
2.8x2.7x
3.1x
3.5x3.7x
4.1x 4.0x 4.0x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
4.0x
4.5x
EV
/ R
EV
EN
UE
S&P 500
www.g2cap.com 13
Economic & Industry Trends
Last 5 Year EV / EBITDA Trend by Industry
Technology & Business Services
Data sourced through S&P Capital IQ on June 30, 2017
Data sourced through S&P Capital IQ on June 30, 2017
% Change in Personal DPI
0.0x
5.0x
10.0x
15.0x
20.0x
Q1 '12 Q3 '12 Q1 '13 Q3 '13 Q1 '14 Q3 '14 Q1 '15 Q3 '15 Q1 '16 Q3 '16 Q1 '17
EV
/ E
BIT
DA
^SPX BPO Business & Human Resources
Consulting Services Cloud E-Commerce & Enterprise
200
205
210
215
220
225
230
235
240
245
250
Q1 '07 Q1' 08 Q1 '09 Q1 '10 Q1 '11 Q1 '12 Q1 '13 Q1 '14 Q1 '15 Q1 '16 Q1' 17
Index 1
982-1
984=
100
www.g2cap.com 14
Technology & Business ServicesM&A Activity – Middle Market
M&A transaction multiples are the median North American M&A activity independent of target / acquirer industry and enterprise
value. The dataset has been restricted to multiples between 0.0x and 30.0x EBITDA; sourced through Pitchbook’s Q2 2017 Report.
M&A Transaction Multiples
M&A Activity by Acquirer Type
Data sourced through PitchBook Q2 2017 Report
Acquisitions across the Middle Market have fallen, similar to Q3 2016 numbers. Though deal volume
has decreased, deal valuations have steadily increased over the last three years, chiefly due to the
abundance of cheap debt.
1,2
72
1,1
49
1,1
13
1,4
28
1,1
21
1,1
29
1,2
29
1,3
09
1,4
34
1,4
07
1,4
95
1,4
47
1,5
66
1,4
95
1,4
94
1,5
30
1,3
85
1,3
50
976
1,5
33
1,3
85
1,0
56
3,4
35
3,3
38
3,3
17
3,6
46
3,4
72
3,2
78
3,4
19
3,5
02
4,1
22
4,2
07
3,8
20
3,6
41
4,3
90
4,1
54
4,4
05
4,2
83
4,0
87
3,1
65
2,1
58
3,6
90
4,0
87
2,4
82
0%
5%
10%
15%
20%
25%
30%
35%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2012 2013 2014 2015 2016 2017
% S
ponsor-
Backed
To
tal D
eal C
ount
Sponsor-Backed Corporate M&A % Sponsor-Backed
4.5
x
4.1
x
4.0
x
4.6
x
5.0
x
4.9
x
4.2
x
4.9
x
4.4
x
4.8
x
5.0
x
5.4
x
4.2
x
4.5
x
4.8
x
5.0
x
4.8
x 5.9
x
2.8
x
2.7
x
3.2
x 3.5
x 3.7
x
3.0
x
4.3
x 3.8
x
4.4
x
3.6
x 4.1
x
3.8
x
4.2
x 4.7
x
4.7
x
4.8
x
3.6
x
4.1
x
0x
2x
4x
6x
8x
10x
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2013 2014 2015 2016 2017
Multip
les o
f E
BIT
DA
Debt / EBITDA Equity / EBITDA
www.g2cap.com 15
Selected Ongoing G2 Projects
Technology & Business ServicesSelected Q2 Transaction Highlight
Project Rover
Sell-Side
Human Capital Management
Project Rover – G2 is currently advising a leading IT
staffing and service provider based in North America on a
sell-side process. The company also offers IT,
engineering, life sciences staff augmentation, payroll,
high hazard payroll and 1099 compliance services. Prior
to G2’s sell-side mandate, the Client retained G2 as a
buy-side advisor and successfully executed a bolt-on
acquisition in 2017.
Project Bot
Buy-Side
E-Commerce Fulfillment
Project Bot – G2 is currently advising an advanced, AMR,
E-commerce fulfillment and logistics provider in a buy-
side process. Search criteria includes:
Core Services: Fulfillment & distribution, pick-
pack-ship services, warehousing services
Value-Added Services: Freight, and billing
management, EDI/Integration, Customer Care
G2 Capital Advisors acted as the exclusive Financial Advisor to:
in its divestiture of: to:
G2 successfully advised the carve out of a business process outsourcing / contact center services
from its corporate parent.
Client – Integrated Distribution and Logistics Direct, LLC, dba SP Express, a Third-Party Logistics
service provider, sought to divest TMP Direct, LLC, a value-add customer contact center. For over 26
years, TMP Direct has assisted clients with acquiring and retaining customers through its fully integrated
solutions. Located in New Jersey, TMP Direct and its team act as an extension to their clients’ team,
building relationships with client customers and prospects across a broad set of industries, and with a
differentiated focus on high-touch, top tier brands.
Situation – SP Express is jointly owned by management and Cadre Partners, a management advisory
and investment firm based in Arizona. Management completed a strategic assessment in the summer of
2016 and decided to divest the non-core business and focus solely on its core e-commerce and Third-
Party Logistics offerings.
Engagement – G2 Capital Advisors was engaged by SP Express to run a targeted, highly involved sales
process to a select set of strategic and financial buyers. G2 worked closely with TMP Direct’s existing
management team, SP Express, and prospective buyers to structure and execute the carve-out
transaction in an efficient and expedited manner.
Outcome – The transaction was successfully consummated through a sale to Vertex Altruist Group Co.,
a leading, privately held Business Process Outsourcing, Customer Management Outsourcing and IT
Services company based in India, with over 12,000 employees and 12 office locations
Source: G2 Insights
Source: G2 Insights
Technology & Business Services
www.g2cap.com 16
G2 Capital Advisors is pleased to present its Technology & Business Services industry update for Q2 2017,
providing commentary and analysis on M&A and market trends within the Technology & Business Services
industry. We hope you find this report helpful and encourage you to contact us directly if you would like to
discuss our perspective on the current market environment, trends, or our relevant industry experience.
G2 OverviewInvestment Banking and Restructuring Advisory
THIRTY-FIVE professionals
across SIX offices
FOUR Industry Practice Groups
Transportation & Logistics / Supply Chain
Industrials / Manufacturing
Technology / Business Services
Aerospace & Defense / Security
FIVE Service Offerings
Securities
Sell-Side
Buy-Side
Operational
Restructuring
Financial
Restructuring
G2 Capital Advisors offers an integrated and complementary set of financial and corporate advisory
services to assist our clients through the lifecycle of a business.
G2 is focused in four sectors; each practice group headed by a leader with 20+ years of C-level operating
experience. G2’s managing directors have navigated all stages of the corporate lifecycle, from growth to
maturity, and apply that experience to provide advisory services to our clients.
Sector-Focused; Experience-Based
Transportation &
Logistics / Supply Chain
Industrials /
Manufacturing
Technology /
Business Services
Aerospace & Defense /
Security
Led by Ron Lentz Led by Jack Shields Led by Matt Konkle Led by Bob Kinder
Freight Forwarding
Trucking / Final Mile
Warehousing / Distribution
Third Party Logistics (3PL)
e-Commerce Fulfillment
Manufacturing / Distribution
Flooring
Plastics / Packaging
Consumer Products
Metals
Tech-enabled Services
BPO
Managed Services
Internet & Digital Media
Business Services
Cyber Security
Defense Robotics
UAV, C4ISR, Hardware
Aerospace Electronics
Aerospace Components
G2 Overview
www.g2cap.com 17
Company Title Role
Chairman
Full service third party logistics (3PL) company in North
America specializing in value-add warehousing and
distribution, brokerage and transportation. Led the
divestiture of non-core business units and revitalization
strategy of the company
COO
Led the reorganization of the company’s e-Commerce
fulfillment, customer care and supply chain services
business units following the acquisition of Fifth Gear.
President
End-to-end e-Commerce services company specializing
in complex order fulfillment and BPO. Led the go-to-
market strategy and growth of the business before selling
for $65 million or 15x earnings.
President
Enterprise software company specializing in order
management technology for direct-to-consumer retailers.
Transformed the business through multiple acquisitions
and launch of offshore operations in India.
CFO
Pioneer in early warning notification software and services
for Public Safety industry. Led the sale of the company to
Golden Gate Capital for 3x trailing twelve month revenue.
Matt Konkle brings 20+ years of C-level operating experience to G2’s Technology & Business Services
practice group. Deep industry background in e-Commerce, supply chain and logistics, enterprise software,
and business services, with operational expertise in tech-enabled services, business process outsourcing
and managed services.
Matt KonklePractice Leader
Technology &
Business Services
G2 OverviewMatt Konkle, Managing Director
www.g2cap.com 18
ReferenceContact & Glossary of Terms
For more information about G2, please visit: www.g2cap.com
Our corporate headquarters is located at: 535 Boylston Street, 11th Floor, Boston, MA 02116
Boston | Chicago | Indianapolis | Los Angeles | Naples | San Francisco
The information included in this Presentation is not a complete analysis of all material facts regarding any company, industry,
or security and does not constitute investment advice. Opinions expressed or implied by the materials here presented reflect
only the judgement of its author as of the date of the Presentation and is subject to change without notice. The information in
this Presentation has been obtained from sources which G2 generally considers reliable, but we make no representation or
warranty, express or implied, as to the accuracy or completeness of any information herein. This Presentation has been
prepared for informational purposes only and upon the express understanding that it will be used only for the purposes set
forth in the Section captioned G2 Overview above. G2 expressly disclaims any and all liability which may be based on such
information, errors therein or omissions there from. Securities offered through Western International Securities, Inc. Member
FINRA & SiPC. G2 Securities and Western International Securities are separate and unaffiliated entities.
Term Definition
Revenue
Total revenue from the sale of goods and services rendered during the reporting period, in normal course of
business, reduced by sales returns and allowances, and sales discounts. For banks, this item is defined as net
interest income after loan loss provisions
EBITDAEarnings before interest, taxes, depreciation, and amortization. Calculated as Revenue – Expenses, excluding
interest, taxes, depreciation and amortization
Market CapMarket value of a company using most recently reported basic weighted average shares outstanding.
Calculated as Market Price (as of period end) * Basic Weighted Average Shares Outstanding
Long-Term DebtSum of the carrying values as of the balance sheet date of long-term debt with a maturity beyond one year or
the normal operating cycle, if longer
Net DebtNet Debt shows the company’s overall debt situation by netting the value of debts with cash and other similar
liquid assets. Calculated as Total Debt – Cash & Cash Equivalents and Short Term Investments
Enterprise Value
Enterprise Value represents the combined economic value of a company as of the most recent fiscal year end.
Calculated as Diluted Market Capitalization + Total Debt + Minority Interest + Preferred Stock – Cash and Short
Term investments
P/EA valuation ratio of a company stock price compared to its per share earnings. Calculated as Market Price /
Earnings per Share for the last annual period
Tangible Book Value Total Shareholder’s Equity – Goodwill and Intangible Assets
Matt Konkle, Managing Director Jeffrey Unger, CEO
[email protected] [email protected]
317.371.6608 617.918.7929
Victoria Arrigoni, Director
617.918.7934
Theodore Bang, Analyst
617.610.0918