JON STEELE
Managing Director
Co-Head of Technology Services
617-624-7020
[email protected]
SECTOR SPOTLIGHT
Software/Internet
Outsourcing Services
Transaction/Data Processing
Staffing/Recruiting Services
CHIP KELSO
Managing Director
Head of HCM
404-442-5835
[email protected]
LESLIE ANN B. CURRY
Vice President
Technology Services
404-442-5890
[email protected]
GARRETT DENINNO
Vice President
Technology Services
617-624-7018
[email protected]
Representative Transactions
Sales / Recapitalizations
Private Placements
Public Equity Raises
July 2010 Has been acquired by
April 2011 Has been acquired by
January 2011 Has been acquired by
April 2014 Has received an equity
investment from
Has received an equity investment from
December 2012
Has received an equity investment from
August 2012
Has received an equity investment from
January 2012 June 2014
Has received an equity investment from
December 2014 Has received an equity
investment from
June 2009 Has been acquired by
Has received an equity investment from
May 2012 Has received an equity
investment from
March 2013
September 2013 $150,394,125 Initial Public Offering
Co-Manager
March 2014 $202,240,000 Initial Public Offering
Co-Manager October 2009 $213,900,000 Follow-On Offering Co-Manager Has received an investment from June 2015 December 2014 $61,042,000 Initial Public Offering
Co-Manager
July 2014 $146,510,000 Initial Public Offering
Senior Co-Manager May 2015 $115,000,000 Follow-On Offering Senior Co-Manager May 2015 Follow-On Offering Bookrunner $90,010,000 August 2015 / July 2014 $73,500,000 Follow-On Offering Co-Manager $109,900,560 Follow-On Offering Co-Manager December 2011
Has been acquired by
November 2012 Has sold its subsidiary,
Workday Services, to
December 2014 Has been acquired by Payment and Communication
Services (PCS) Business
Has been acquired by
October 2014 July 2015
Has been acquired by
August 2015 Has been acquired by
August 2015 Has been acquired by
A portfolio company of
September 2015 Has been acquired by
Sept. 2015 / Dec. 2014 $111,265,000 Follow-On Offering Co-Manager $130,200,000 Follow-On Offering Co-Manager March 2014 $137,729,750 Initial Public Offering
Co-Manager
April 2014 Has received an equity
investment from Sept. 2013 / May 2013 $21,000,000 Follow-On Offering Underwriter $63,480,000 Initial Public Offering
Senior Co-Manager October 2015
$33,000,000 Follow-On Offering
80
85
90
95
100
105
110
115
120
125
130
135
12-14
1-15
2-15
3-15
4-15
5-15
6-15
7-15
8-15
9-15
10-15
11-15
12-15
HUMAN CAPITAL MARKET UPDATE
TEV / 2015E Revenue
1-Year Historical Composite Stock Performance (%) as of 12/31/2015
TEV / 2015E EBITDA
P/E 2015E
1.9%
5.7%
6.6%
Nasdaq 5.7% S&P 500 (0.7%) HCM Software / Internet (5.7%) HCM Outsourcing Services 1.9%HCM Transaction / Data Processing 6.6%
Staffing / Recruiting Services 11.5%
Indexed to 100 as of 12/31/2014
Operating / Trading Statistics
11.5%
(0.7%)
Software / Internet
Outsourcing Services
Transaction / Data
Processing
Staffing / Recruiting Services
2015E Revenue Growth
16.1%
2.3%
8.7%
4.5%
2016E Revenue Growth
17.3%
7.8%
7.8%
6.8%
2015E EBITDA Margin
22.9%
17.8%
36.6%
5.1%
2016E EBITDA Margin
23.1%
18.9%
37.3%
5.7%
% 52 Week High
81.1%
86.1%
91.3%
87.3%
Debt / 2015E EBITDA
1.4x
2.2x
1.4x
0.8x
Software / Internet
Outsourcing Services
Transaction / Data
Processing
Staffing / Recruiting Services
Top 3 Performers, by Stock Performance
Last Month
SEEK Li mi ted 11.5% Ins peri ty, Inc. 11.6% Wa geWorks , Inc. 6.7% Huds on Gl oba l , Inc 22.7%Xero Li mi ted. 7.8% ADP -1.8% Veri s k Ana l ytics , Inc. 2.6% USG Peopl e NV 21.3%
Ca s tli ght Hea l th, Inc. 6.7% Tri Net Group, Inc. -2.0% Equi fa x Inc. -0.1% Synergi e SA 10.6%
Last 3 Months
Xero Li mi ted. 41.4% Tri Net Group, Inc. 15.2% Edenred SA 16.4% Hei dri ck & Struggl es 39.9%Pa yl oci ty Hol di ng Corpora tion 35.2% Pa ychex, Inc. 11.0% Equi fa x Inc. 14.6% USG Peopl e NV 37.2%
SEEK Li mi ted 32.8% Ins peri ty, Inc. 9.6% Pa ychex, Inc. 11.0% Proffi ce AB 32.5%
Last 12 Months
Ebi x Inc. 93.0% Ins peri ty, Inc. 42.1% Equi fa x Inc. 37.7% Staffl i ne Group pl c 70.3%XING AG 65.0% CBIZ, Inc. 15.2% Veri s k Ana l ytics , Inc. 20.0% USG Peopl e NV 65.2%
Pa yl oci ty Hol di ng Corpora tion 55.3% Pa ychex, Inc. 14.6% Pa ychex, Inc. 14.6% Pa s ona Group Inc. 60.9%
(5.7%)
4.9x 1.9x 4.7x 0.5x 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x Software / Internet Outsourcing Services Transaction / Data Processing Staffing / Recruiting Services 12.2x 11.9x 15.5x 9.6x 0.0x 4.0x 8.0x 12.0x 16.0x Software / Internet Outsourcing Services Transaction / Data Processing Staffing / Recruiting Services 19.4x 19.6x 25.2x 17.3x 0.0x 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x Software / Internet Outsourcing Services Transaction / Data Processing Staffing / Recruiting Services80 85 90 95 100 105 110 115 120 12-14 1-15 2-15 3-15 4-15 5-15 6-15 7-15 8-15 8-15 9-15 10-15 11-15 12-15 0.0x 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x 35.0x 2011 2012 2013 2014 2015 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x 18.0x 20.0x 2011 2012 2013 2014 2015 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 2011 2012 2013 2014 2015
HCM SOFTWARE / INTERNET
Historical TEV / LTM EBITDA Multiples
Historical TEV / LTM Revenue Multiples
1-Year Historical Stock Performance
Quarterly Revenue Growth
HCM Software /
Internet
S&P 500
NASDAQ
Indexed to 100 as of 12/31/2014 HCM Software / Internet (5.7%) S&P 500 (0.7%) NASDAQ 5.7%5-Year
Median = 4.3x
5-Year
Median = 14.7x
HCM Software / Internet Composite: AIM:BDI, ASUR, ASX:SEK, BNFT, CALD, CSLT, CSOD, DHX, EBIX, EHTH, HSTM, INTU, JOBS, LNKD, LSE:SGE, MWW, NZSE:XRO, ORCL, PAYC, PCTY, SAP, TSX:HGN, ULTI, WDAY, XTRA:O1BC, XTLY
Historical LTM P/E Multiples
5-Year
Median = 25.4x
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 2011 2012 2013 2014 2015 Sequential Year-over-YearSOFTWARE / INTERNET: DETAILED VALUATION MULTIPLES AND METRICS
SOFTWARE / INTERNET: SELECTED M&A AND CAPITAL MARKETS ACTIVITY
Type Key: M&A – Merger & Acquisition, PP – Private Placement, SHLF – Shelf Registration, IPO – Initial Public Offering, EQTY – Follow-on Equity Offering, DEBT – Debt Offering, CVT – Convertible Debt
SOFTWARE / INTERNET: OTHER RECENT NEWS AND EVENTS
Date
Company
News
12/15
(NYSE:LNKD)
LinkedIn, a social network focused around the working world with nearly 400 million members, is well
known for how it uses algorithms to suggest potential business connections and jobs based on user
profiles. Now, it’s injecting more data analytics into another part of its platform: job listings. LinkedIn has
taken the wraps off a new version of its Jobs section, where - alongside details about the job itself - users
can now see more data about the company, who works there, and how they compare to previous
applicants. For LinkedIn, the thinking seems to be that creating a better job hunting experience could lead
to the feature being used more. And in turn, that could lead more employers to paying to post listings in the
first place (or so LinkedIn hopes). And given that there are dozens of places online to look for jobs today,
LinkedIn understands that it needs to go beyond the basics in order to stand out. The new features include
a chance to look at profiles of existing employees at the company who hold similar jobs, and potentially
connect with them. Users can also see who in their network is connected through to the company. Premium
features, which LinkedIn restricts to users of its Premium tier, will give more insights about the company
and wider hiring policies: company’s growth rate, average tenure, and top schools and companies it hires
from “so that you can determine if a company is truly the right fit for you.” The bigger picture with LinkedIn is
that the company is trying to build out a much stronger platform, using its existing strength in big data and
sheer number of data points. (TechCrunch)
Total
Price % of 52 Market Enterprise 2015E 2016E 2015E 2016E 2015E P/E
Company 12/31/2015 Week High Cap ($MM) Value ($MM) Revenue Revenue EBITDA EBITDA 2015E EPS 2016E EPS Growth Rate Oracle Corporation $ 36.53 80.6 % $ 153,470.6 $ 143,483.6 3.8 x 3.8 x 8.3 x 8.3 x 14.4 x 13.6 x 1.7 SAP SE 80.25 97.6 95,928.8 102,277.8 4.6 4.4 12.9 12.3 20.0 18.3 2.0 LinkedIn Corporation 225.08 81.5 29,504.9 27,557.3 9.2 7.1 NM 26.6 NM NM 1.7 Intuit Inc. 96.50 88.4 25,476.4 25,852.4 5.7 5.5 17.2 14.5 31.3 26.1 1.6 Workday, Inc. 79.68 83.7 15,457.9 14,069.6 12.1 9.1 NM NM NM NM NM Sage Group plc 8.90 96.5 9,603.5 10,120.4 4.9 4.6 16.0 15.7 24.1 23.2 2.6 The Ultimate Software Group, Inc. 195.51 90.4 5,602.5 5,481.8 8.9 7.2 NM 28.9 NM NM 2.7 SEEK Limited 11.20 81.0 3,850.7 4,776.5 7.0 6.3 18.3 16.7 27.8 25.1 1.8 Paycom Software, Inc. 37.63 81.2 2,224.1 2,201.6 10.0 7.6 NM NM NM NM 2.7 Paylocity Holding Corporation 40.55 86.5 2,061.4 1,982.7 11.0 8.2 NM NM NM NM 23.2 Cornerstone OnDemand, Inc. 34.53 84.8 1,880.4 1,896.8 5.5 4.3 NM NM NM NM NM Xero Limited. 13.57 74.7 1,838.6 1,695.0 13.2 8.4 NM NM NM NM NM Ebix Inc. 32.79 85.6 1,107.2 1,260.1 4.8 4.6 13.0 12.1 15.0 14.5 1.5 51job Inc. 29.46 77.3 1,730.7 1,158.6 3.6 3.2 11.4 9.7 17.5 16.6 0.8 Benefitfocus, Inc. 36.39 76.6 1,061.0 1,026.6 5.6 4.5 NM NM NM NM NM XING AG 185.39 85.3 1,042.0 952.4 7.3 6.0 23.7 18.1 49.8 37.2 1.2 Callidus Software Inc. 18.57 85.8 1,042.2 946.7 5.5 4.5 NM NM NM NM 2.5 Monster Worldwide, Inc. 5.73 69.6 523.1 680.1 1.0 1.0 6.2 5.1 14.5 9.9 1.3 Healthstream Inc. 22.00 67.9 696.2 551.4 2.7 2.4 16.5 14.3 NM NM 4.1 DHI Group, Inc. 9.17 87.5 482.9 550.6 2.2 2.1 7.4 7.1 21.0 18.0 1.2 Castlight Health, Inc. 4.27 35.6 404.1 256.9 3.4 2.5 NM NM NM NM NM Xactly Corporation 8.53 79.9 248.9 213.3 2.8 2.3 NM NM NM NM NM eHealth, Inc. 9.98 39.4 180.8 118.8 0.7 0.6 10.5 8.0 18.9 20.1 5.1 Halogen Software Inc. 5.15 64.1 113.0 73.4 1.1 1.0 NM NM NM NM NA Bond International Software plc 1.42 65.1 60.8 64.9 0.9 NA 4.8 NA 12.9 NA NA Asure Software, Inc. 4.51 70.6 28.4 42.1 1.6 1.4 9.5 7.3 NM 41.0 NA
Mean 5.4 x 4.5 x 12.6 x 13.7 x 22.3 x 22.0 x 3.4
Median 4.9 4.5 12.2 12.3 19.4 19.2 1.8
Market Price
TEV TEV
Date Transaction
Announced Type Acquiror / Investor Target / Issuer Value ($MM) Revenue EBITDA
12/8/2015 PP Canvas Ventures, Sequoia Capital, Webb Inv. Network Everwise $ 8.0 NA NA
12/8/2015 M&A Careers360 NoPaperForms NA NA NA
12/3/2015 PP Georgian Partners, EDBI, Flare Capital Partners Welltok Inc. 45.0 NA NA
12/2/2015 PP Khosla Ventures, Mercer LLC Pymetrics 5.0 NA NA
11/24/2015 PP Renren, Chicago Ventures, DRW Ventures, others Shiftgig 22.0 NA NA
11/19/2015 M&A Greenhouse Software Parklet NA NA NA
11/16/2015 PP OMERS Ventures, Version One Ventures, Point Nine Capital Octopusapp Inc. (Jobber) 6.0 NA NA
11/12/2015 EQTY NA Paycom Software 187.9 NA NA
11/11/2015 PP Square Peg Capital, Bessemer Venture Partners, others Fiverr 60.0 NA NA
10/28/2015 PP Goldcrest Capital, True Ventures Connectifier, Inc. 6.0 NA NA
10/27/2015 PP Goldman Sachs, Merchant Banking Division TalentSoft SA 27.6 NA NA
10/20/2015 M&A Enrollment Advisors, Inc. HighRoads, Inc., Employer Technology Division NA NA NA 10/20/2015 PP OMERS Ventures, Saturn Partners, prior investors Kaleo Software 7.0 NA NA
10/12/2015 M&A SAP SE Multiposting SASU NA NA NA
10/8/2015 PP Andreessen Horowitz LLC Pulse Software, Inc. (Reflektive) 3.6 NA NA TEV /
85 90 95 100 105 110 115 120 125 12-14 1-15 2-15 3-15 4-15 5-15 6-15 7-15 8-15 8-15 9-15 10-15 11-15 12-15 0.0x 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x 2011 2012 2013 2014 2015 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x 2011 2012 2013 2014 2015 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 2011 2012 2013 2014 2015
OUTSOURCING SERVICES
S&P 500
NASDAQ
HCM Outsourcing Services 1.9% S&P 500 (0.7%) NASDAQ 5.7% Indexed to 100 as of 12/31/2014HCM Outsourcing Services Composite: ADP, AON, CBZ, NSP, PAYX, TNET, TSX:MSI
5-Year
Median = 11.7x
5-Year
Median = 2.1x
5-Year
Median = 22.0x
Historical TEV / LTM EBITDA Multiples
Historical LTM P/E Multiples
Historical TEV / LTM Revenue Multiples
1-Year Historical Stock Performance
Quarterly Revenue Growth
HCM Outsourcing
Services
0.0% 3.0% 6.0% 9.0% 12.0% 15.0% 2011 2012 2013 2014 2015 Sequential Year-over-YearTotal
Price % of 52 Market Enterprise 2015E 2016E 2015E 2016E 2015E P/E
Company 12/31/2015 Week High Cap ($MM) Value ($MM) Revenue Revenue EBITDA EBITDA 2015E EPS 2016E EPS Growth Rate Automatic Data Processing, Inc. $ 84.72 93.4 % $ 39,970.9 $ 38,754.2 3.4 x 3.2 x 17.0 x 15.6 x 28.4 x 24.4 x 2.2 Aon plc 92.21 86.1 26,263.7 31,772.7 2.7 2.6 12.3 11.5 15.3 14.1 1.3 Paychex, Inc. 52.89 96.5 19,230.8 18,754.4 6.6 6.1 15.5 14.4 27.3 24.9 2.5 TriNet Group, Inc. 19.35 50.9 1,410.3 1,768.7 0.7 0.6 11.9 10.1 19.6 15.9 0.8 Insperity, Inc. 48.15 86.9 1,181.1 970.3 0.4 0.3 8.5 7.5 21.3 18.6 1.2 Morneau Shepell Inc. 10.44 79.6 522.3 771.7 1.9 1.8 10.7 9.4 17.4 16.7 NA CBIZ, Inc. 9.86 85.4 513.7 712.0 0.9 0.9 7.9 7.3 14.2 13.1 1.0
Mean 2.4 x 2.2 x 12.0 x 10.8 x 20.5 x 18.2 x 1.5
Median 1.9 1.8 11.9 10.1 19.6 16.7 1.2
Market Price
TEV TEV
OUTSOURCING SERVICES: DETAILED VALUATION MULTIPLES AND METRICS
OUTSOURCING SERVICES: SELECTED M&A AND CAPITAL MARKETS ACTIVITY
Type Key: M&A – Merger & Acquisition, PP – Private Placement, SHLF – Shelf Registration, IPO – Initial Public Offering, EQTY – Follow-on Equity Offering, DEBT – Debt Offering, CVT – Convertible Debt
OUTSOURCING SERVICES: OTHER RECENT NEWS AND EVENTS
Date
Company
News
12/14
Aon
(NYSE:AON)
Aon Risk Solutions is looking to ramp up its multimillion-dollar spending on data analytics research, as the
global insurance broker increases efforts to combat disrupters and keep up with how customers' risks are
rapidly changing. Lambros Lambrou, Australia chief executive of Aon Risk Solutions said traditional
insurance business models are under threat from technology groups eyeing entry into the market, forcing
companies to find new ways to keep their customer bases. Aon is pumping about $US350 million a year
into data analytics, which helps the group finetune its risk management models and understand the trends
impacting clients and its own business. "If we do nothing as an industry, we are going to lose the race," Mr
Lambrou said. "We're focusing on six key areas – talent, retirement, health, risk, capital and data and
analytics. We've spent $US350 million a year on data to better understand and predict trends – and this will
only go up as investments across the other areas also develop.“ The company has built two innovation
centres, in Dublin and Singapore, to tap its database of customers' risk profiles, buying patterns and other
information to understand how risk is being managed and insured. With issues such as cyber threats and
terrorism on the rise, the company is using its data as a way to predict forward trends and better manage
risk. (Sidney Morning Herald)
Date Transaction
Announced Type Acquiror / Investor Target / Issuer Value ($MM) Revenue EBITDA
12/21/2015 M&A Oasis Outsourcing, Inc. Doherty Employment Group, Inc. NA NA NA
12/14/2015 M&A Oasis Outsourcing, Inc. A1HR, LLC NA NA NA
12/1/2015 M&A Paychex Advance Partners NA NA NA
12/1/2015 M&A Morneau Shepell Bensinger, DuPont & Associates NA NA NA
12/1/2015 M&A CBIZ, Inc. The Cottonwood Group NA NA NA
11/24/2015 M&A Entertainment Benefits Group Working Advantage NA NA NA
11/13/2015 M&A Goldman Sachs, Park Square Capital Northgate NGA NA NA NA
11/9/2015 DEBT NA Aon $ 399.2 NA NA
10/23/2015 SHLF NA Paychex, Inc. 387.0 NA NA
10/8/2015 M&A Morgan Stanley Private Equity CoAdvantage, Inc. NA NA NA
10/5/2015 M&A Mercer Human Resources Business Solutions NA NA NA
10/1/2015 M&A CBIZ, Inc. Pension Resource Group, Inc. NA NA NA
9/30/2015 PP Eurazeo Croissance, Accel Partners, others PeopleDoc 28.0 NA NA
9/30/2015 M&A MYOB Group Limited Information Management Services Limited 6.2 NA NA
9/15/2015 PP Kennet Partners ThinkHR 12.0 NA NA
9/9/2015 M&A Tenex Capital Management Progressive Employer Management Company (PEMCO) NA NA NA
9/3/2015 SHLF NA Aon NA NA NA
7/22/2015 M&A Morneau Shepell Inc. Ceridian Health & Welfare Benefits Administration business NA NA NA
7/21/2015 M&A PSI Services LLC Innovative Exams LLC NA NA NA
7/9/2015 M&A Patriot National, Inc. CWIBenefits 7.4 NA NA
7/9/2015 M&A KPMG Towers Watson Human Resources Services Delivery practice NA NA NA
7/9/2015 M&A Willis Group Holdings Towers Watson 8,631.5 2.1x 10.1 x
6/10/2015 M&A Crawford Advisors, LLC workforcetactix, Inc. NA NA NA
6/1/2015 M&A MYOB Holdings Pty Ace Payroll Plus 10.0 NA NA
5/26/2015 M&A Mercer Kepler Associates NA NA NA
5/20/2015 M&A AmWINS Group Impact Interactive NA NA NA
5/4/2015 M&A Zuman SuperiorHR NA NA NA
5/1/2015 M&A Nueterra Benefit Management Inc. (BMI) NA NA NA
4/27/2015 M&A Towers Watson & Co. Saville Consulting Group 63.9 NA NA
4/16/2015 PP Fidelity Management & Research Appirio 35.0 NA NA
4/3/2015 M&A WilsonHCG Head2Head NA NA NA
4/1/2015 M&A Everstone Capital Asia Pacific Payroll Business of Aon NA NA NA
90 95 100 105 110 115 120 125 12-14 1-15 2-15 3-15 4-15 5-15 6-15 7-15 8-15 8-15 9-15 10-15 11-15 12-15 0.0x 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x 35.0x 2011 2012 2013 2014 2015 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x 18.0x 2011 2012 2013 2014 2015 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x 2011 2012 2013 2014 2015
TRANSACTION / DATA PROCESSING
HCM Transaction
/
Data Processing
S&P 500
HCM Transaction / Data Processing 6.6%
S&P 500 (0.7%)
NASDAQ 5.7%
Indexed to 100 as of 12/31/2014
5-Year
Median = 4.1x
HCM Transaction / Data Processing Composite: ADP, CEB, EFX, ENXTPA: EDEN, HAWK, HQY, PAYX, VRSK, WAGE
5-Year
Median = 14.6x
5-Year
Median = 27.8x
Historical TEV / LTM EBITDA Multiples
Historical LTM P/E Multiples
Historical TEV / LTM Revenue Multiples
1-Year Historical Stock Performance
Quarterly Revenue Growth
0.0% 4.0% 8.0% 12.0% 16.0% 20.0% 2011 2012 2013 2014 2015 Sequential Year-over-Year
NASDAQ
Date Transaction
Announced Type Acquiror / Investor Target / Issuer Value ($MM) Revenue EBITDA
11/17/2015 PP Recruit DataRobot NA NA NA
11/16/2015 M&A Protiviti (Robert Half International) Decision First Technologies NA NA NA
11/3/2015 M&A SterlingBackcheck EmployeeScreenIQ NA NA NA
10/23/2015 M&A HealthEquity The Bancorp Bank, Health Savings Account Portfolio $ 34.4 NA NA
9/30/2015 M&A Mercer Comptryx NA NA NA
9/21/2015 EQTY NA HealthEquity 88.5 NA NA
9/18/2015 M&A Equifax Veda Group Limited 1,786.6 7.3 x 19.2 x
9/11/2015 M&A CEB Inc. Wanted Technologies 29.4 3.9 27.9
9/9/2015 SHLF NA HealthEquity 564.6 NA NA
9/8/2015 DEBT NA ADP 999.1 NA NA
9/8/2015 DEBT NA ADP 998.9 NA NA
9/3/2015 M&A Microsoft VoloMetrix NA NA NA
7/29/2015 M&A Great Hill Partners Reward Gateway 218.9 0.7 13.9
7/28/2015 M&A CEB Inc. CEO Forum Group 13.0 1.6 NA
6/29/2015 M&A Silver Lake Cast & Crew Entertainment Services NA NA NA
6/17/2015 M&A CEB Inc. Sunstone Analytics NA NA NA
6/11/2015 M&A Blackhawk Network Holdings, Inc. Achievers, Inc. NA NA NA
3/8/2015 M&A First Colebrook Bank Abikay Business Solutions NA NA NA
3/2/2015 M&A Heartland Payment Systems Payroll 1, Inc. NA NA NA
2/23/2015 M&A Everstone Capital Management Asia/Pacific Payroll Business of Aon Hewitt NA NA NA
12/8/2014 M&A Verisk Analytics, Inc. Maplecroft 31.7 NA NA
11/13/2014 M&A Accurate Background, LLC Hirease, Inc. NA NA NA
11/5/2014 M&A Phoenix Strategy Investments PI Worldwide NA NA NA
10/20/2014 M&A Institutional Shareholder Services Incentive Lab, LLC NA NA NA
10/17/2014 M&A BTS Group AB Fenestra, Inc. 2.5 NA NA
9/23/2014 M&A Webster Financial Corp. HSA Business of JPMorgan Chase Bank NA NA NA
8/4/2014 PP Undisclosed Investors FlexWage Solutions 3.5 NA NA
8/1/2014 M&A WageWorks, Inc. CONEXIS Benefits Administrators 118.0 NA NA
6/5/2014 M&A Lyceum Business Services BenePay NA NA NA
TEV / Total
Price % of 52 Market Enterprise 2015E 2016E 2015E 2016E 2015E P/E
Company 12/31/2015 Week High Cap ($MM) Value ($MM) Revenue Revenue EBITDA EBITDA 2015E EPS 2016E EPS Growth Rate Automatic Data Processing, Inc. $ 84.72 93.4 % $ 39,970.9 $ 38,754.2 3.4 x 3.2 x 17.0 x 15.6 x 28.4 x 24.4 x 2.2 Paychex, Inc. 52.89 96.5 19,230.8 18,754.4 6.6 6.1 15.5 14.4 27.3 24.9 2.5 Verisk Analytics, Inc. 76.88 93.8 12,845.1 15,871.0 7.7 6.7 16.1 14.4 25.6 23.9 1.9 Equifax Inc. 111.37 97.3 13,495.3 14,759.1 5.5 5.2 16.0 14.5 24.9 22.5 2.1 Edenred SA 18.95 64.3 4,378.8 5,380.2 4.7 4.5 12.8 12.1 19.8 18.9 2.2 Blackhawk Network Holdings, Inc. 44.21 91.3 2,466.0 2,731.3 1.5 1.3 14.1 12.1 19.1 16.8 1.0 CEB Inc. 61.39 67.0 2,073.4 2,489.3 2.7 2.5 10.5 9.7 16.1 15.0 1.2 HealthEquity, Inc. 25.07 70.1 1,462.0 1,336.8 10.7 7.9 34.6 23.9 NM NM 1.9 WageWorks, Inc. 45.37 69.2 1,659.5 1,260.5 3.8 3.4 13.5 11.6 37.6 32.8 1.8 Mean 5.2 x 4.5 x 16.7 x 14.3 x 24.8 x 22.4 x 1.9 Median 4.7 4.5 15.5 14.4 25.2 23.2 1.9 Market Price TEV TEV
Date
Company
News
12/10
HealthEquity, Inc.
(NasdaqGS:HQY)
Health savings solution provider, HealthEquity plans to expand at its Utah headquarters adding 200 jobs over
the next six years, according to a statement from the
Governor’s Office of Economic Development.
HealthEquity was founded in 2002 and is currently serving 1.6 million HSAs across 70 of the nations top
health plans. HealthEquity plans to generate up to $6.75 million in capital investment through their expansion,
according to the statement.
“HealthEquity is honored to call Utah home,” said Jon Kessler, HealthEquity
president and CEO. “This great state offers a highly skilled and educated talent pool, proactive communities
and a government that promotes business. These amenities have been central to our continued growth.”
HealthEquity may earn back up to 20 percent of the new state taxes that they will pay over the six years of
the expansion through a post-performance Economic Development Tax Increment Finance (EDTIF) tax credit
rebate. The
Governor’s Office of Economic Development has approved HealthEquity for a rebate of up to
$569,917 as long as they meet the criteria of its agreement with the state. “We congratulate HealthEquity on
their continued growth,” said Val Hale, executive director of GOED. “We’re always thrilled when successful
companies not only start but also stay here. As more company leaders acknowledge Utah’s business-friendly
environment, they see their investment truly pays off.” (Silicon Slopes)
TRANSACTION / DATA PROCESSING: DETAILED VALUATION MULTIPLES AND METRICS
TRANSACTION / DATA PROCESSING: SELECTED M&A AND CAPITAL MARKETS ACTIVITY
Type Key: M&A – Merger & Acquisition, PP – Private Placement, SHLF – Shelf Registration, IPO – Initial Public Offering, EQTY – Follow-on Equity Offering, DEBT – Debt Offering, CVT – Convertible Debt
90 95 100 105 110 115 120 125 130 135 12-14 1-15 2-15 3-15 4-15 5-15 6-15 7-15 8-15 8-15 9-15 10-15 11-15 12-15 0.0x 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x 35.0x 2011 2012 2013 2014 2015 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 2011 2012 2013 2014 2015 0.0x 0.1x 0.2x 0.3x 0.4x 0.5x 0.6x 0.7x 2011 2012 2013 2014 2015 (10.0%) (5.0%) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 2011 2012 2013 2014 2015 Sequential Year-over-Year
STAFFING / RECRUITING SERVICES
Staffing / Recruiting
Services
S&P 500
NASDAQ
Staffing / Recruiting Services 11.5%
S&P 500 (0.7%) NASDAQ 5.7% Indexed to 100 as of 12/31/2014
5-Year
Median = 10.5x
5-Year
Median = 22.6x
HCM Staffing / Recruiting Services Composite: AHS, AIM:IPEL, AIM:MTEC, AIM:STAF, ASGN, CCRN, CDI, CTG, ENXTAM:BRNL, ENXTAM:RAND, ENXTAM:USG, ENXTPA:CEN, ENXTPA:SDG, HSII, HSON, ISE:DQ5, KELY.A, KFRC, KFY, LSE:HAS, LSE:HVN, LSE:MPI, LSE:RWA, LSE:STHR, MAN, OM:PROE B, RECN, RHI, SWX:ADEN, TBI, TSE:2168, TSE:2181,TSE:6098
Historical TEV / LTM EBITDA Multiples
Historical LTM P/E Multiples
Historical TEV / LTM Revenue Multiples
1-Year Historical Stock Performance
Quarterly Revenue Growth
5-Year
Median = 0.5x
Date
Company
News
12/9
Field Nation
Nearly 35% of
today’s total workforce is comprised of non-employee workers - including temps, freelancers and
independent contractors - according to the annual “State of Contingent Workforce Management” research study released
by Field Nation and Ardent Partners. In addition, 70% of enterprises expect the contingent workforce to grow steadily in
the next 12 months. “In today’s market, only 18% of organizations cite ‘strong’ visibility into their worker footprint, which is
defined as visibility into all talent across the entire enterprise, including both traditional full-time employees and
non-employee workers, freelancers and independent talent.” The majority of talent in 2015, 54%, is primarily concentrated in
traditional workers and full-time employees, according to the report; however, that percentage is expected to decrease to
41% in 2017 while the share of talent primarily concentrated in the contingent workforce is expected to rise from 20% to
25%. Organizations with an even concentration of talent will increase from 26% in 2015 to 34% in 2017, the research
found. (staffingindustry.com)
STAFFING / RECRUITING SERVICES: DETAILED VALUATION MULTIPLES AND METRICS
STAFFING / RECRUITING SERVICES: SELECTED M&A AND CAPITAL MARKETS ACTIVITY
Type Key: M&A – Merger & Acquisition, PP – Private Placement, SHLF – Shelf Registration, IPO – Initial Public Offering, EQTY – Follow-on Equity Offering, DEBT – Debt Offering, CVT – Convertible Debt
STAFFING / RECRUITING SERVICES: OTHER RECENT NEWS AND EVENTS
TotalPrice % of 52 Market Enterprise 2015E 2016E 2015E 2016E 2015E P/E
Company 12/31/2015 Week High Cap ($MM) Value ($MM) Revenue Revenue EBITDA EBITDA 2015E EPS 2016E EPS Growth Rate North American Staffing / Recruiting Services
ManpowerGroup Inc. $ 84.29 87.0 % $ 6,637.8 $ 6,929.0 0.4 x 0.3 x 8.9 x 8.3 x 16.0 x 14.3 x 1.2 Robert Half International Inc. 47.14 74.5 6,307.9 6,057.3 1.2 1.1 9.5 8.4 17.6 15.3 1.0 On Assignment Inc. 44.95 88.1 2,371.6 3,127.5 1.5 1.3 13.0 10.5 17.3 14.2 0.9 AMN Healthcare Services Inc. 31.05 82.9 1,511.2 1,714.1 1.2 1.1 10.7 9.4 22.0 19.9 1.4 Korn/Ferry International 33.18 85.2 1,659.7 1,376.9 1.1 0.8 7.6 5.7 16.6 13.9 1.3 TrueBlue, Inc. 25.76 81.8 1,071.8 1,162.5 0.4 0.4 7.9 7.1 14.3 12.8 1.3 Kforce Inc. 25.28 86.2 722.0 802.1 0.6 0.6 9.4 8.4 16.5 14.2 0.3 Kelly Services, Inc. 16.15 88.6 609.3 641.2 0.1 0.1 6.7 7.5 18.5 13.2 NA Cross Country Healthcare, Inc. 16.39 87.4 514.2 562.1 0.7 0.7 15.0 11.2 30.7 22.2 1.3 Resources Connection, Inc. 16.34 87.3 623.0 521.8 0.9 0.8 9.1 8.1 20.4 18.1 0.7 Heidrick & Struggles International Inc. 27.22 88.9 505.8 376.8 0.7 0.7 7.1 6.5 25.6 21.6 2.0 CDI Corp. 6.76 35.1 132.9 109.5 0.1 0.1 12.9 11.3 NM NM NA Computer Task Group Inc. 6.62 68.3 105.5 94.6 0.3 0.2 7.8 6.0 16.6 13.4 1.2 Hudson Global, Inc 2.92 90.1 98.1 62.1 0.1 0.1 NM 10.4 NM NM NA
Mean 0.7 x 0.6 x 9.7 x 8.5 x 19.3 x 16.1 x 1.1
Median 0.7 0.6 9.1 8.3 17.5 14.3 1.2
International Staffing / Recruiting Services
Recruit Holdings Co.,Ltd. $ 29.62 82.5 % $ 16,692.3 $ 14,665.7 1.2 x 1.1 x 9.3 x 8.3 x 29.5 x 28.1 x 4.3 Adecco S.A. 68.82 100.0 12,008.5 13,414.7 0.6 0.5 9.9 9.4 13.8 13.1 1.3 Randstad Holding 62.48 88.5 11,424.8 11,930.0 0.6 0.5 11.6 10.1 17.9 15.0 1.1 Temp Holdings Co., Ltd. 15.68 92.9 3,691.8 3,570.4 0.9 0.8 13.4 11.4 26.8 22.9 NA Hays plc 2.15 96.6 3,100.2 3,148.5 0.5 0.5 11.0 9.9 19.1 15.9 1.0 Michael Page International plc 7.14 85.3 2,217.1 2,059.0 1.3 1.2 13.1 10.6 23.6 19.1 1.0 USG People NV 18.66 99.1 1,518.1 1,744.1 0.6 0.6 13.2 10.5 24.3 16.0 0.0 Groupe CRIT SA 61.84 99.3 686.3 785.8 0.4 0.4 6.1 5.9 9.2 8.9 2.4 Brunel International NV 18.25 80.7 911.2 750.9 0.6 0.6 11.2 10.0 23.3 20.3 NA Synergie SA 28.88 100.0 692.9 674.7 0.3 0.3 6.7 6.3 11.3 10.7 1.1 SThree Plc. 4.81 81.5 648.5 662.9 0.5 0.5 9.7 8.3 17.1 14.4 0.7 Impellam Group PLC 11.80 93.1 575.7 637.1 0.2 0.2 7.6 6.0 9.9 8.0 NA Staffline Group plc 21.90 90.5 540.7 618.0 0.6 0.6 11.9 9.8 16.5 13.7 0.7 Robert Walters PLC 5.31 75.3 431.0 407.9 0.4 0.3 10.2 8.8 19.1 16.5 NA Pasona Group Inc. 7.24 60.5 266.3 300.4 0.2 0.1 5.3 3.7 49.9 17.8 NA Matchtech Group Plc 7.56 87.2 212.4 265.0 0.3 0.3 8.8 7.5 11.2 10.3 NA Proffice AB 2.94 96.9 200.4 207.3 0.4 0.4 11.4 10.6 17.2 15.0 NA CPL Resources plc 6.84 94.1 209.0 175.0 0.4 0.4 10.6 10.0 14.9 13.9 NA Harvey Nash Group plc 1.28 81.0 93.2 117.7 0.1 0.1 6.7 6.3 9.4 8.7 NA
Mean 0.5 x 0.5 x 9.9 x 8.6 x 19.2 x 15.2 x 1.3
Median 0.5 0.5 10.2 9.4 17.2 15.0 1.0
Market Price
TEV TEV
Date Transaction
Announced Type Acquiror / Investor Target / Issuer Value ($MM) Revenue EBITDA
12/31/2015 M&A General Employment Enterprises Inc. Paladin Consulting, Inc. NA NA NA
12/29/2015 M&A System One ALTA IT Services NA NA NA
12/23/2015 M&A Merit Resources, Inc. Portico Staffing Inc. NA NA NA
12/22/2015 M&A Recruit Holdings USG People NV $ 1,826.7 0.7 x 17.9 x
12/15/2015 M&A Lawyer’s Staffing Accent Professional Recruiting NA NA NA
12/14/2015 M&A CorTech, LLC. Integrated Staffing Solutions, Inc. NA NA NA
12/10/2015 M&A ZRG Partners, Inc. Pyramid International SA NA NA NA
12/10/2015 M&A Med-Call Healthcare, Inc. Med Staff On-Call, LLC NA NA NA
12/8/2015 M&A Impellam Group Bartech Holding Corporation 88.0 1.8 6.9
12/3/2015 M&A William Creekmuir Pinnacle Search Partners NA NA NA
12/1/2015 M&A TrueBlue SIMOS Insourcing Solutions 67.5 NA NA