in this month’s newsletter€¦ · business services monthly february 2016 – monthly commentary...

Monthly Commentary and Summary

Recent Industry News

Loan Market Update & Technical Conditions

Revolver and Term Loan Recent Issuance

Investment Grade Bond Market Update & Outlook

Investment Grade Recent Bond Issuance

Investment Grade Debt Comparables

High Yield Bond Market Update & Outlook

High Yield Recent Bond Issuance

High Yield Debt Comparables

Equity Capital Markets Update & Outlook

Equity Capital Markets Relative Valuation

Equity Capital Markets Recent Issuance

Operating Statistics

Macroeconomic Indicators

Current Interest Rate Environment

Notable Mergers and Acquisitions Activity

KeyCorp & KBCM Overview & Capabilities

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In this month’s newsletter:

Knowledge-Based Cons. Non-Heavy Equip. Rental

Printing Services Auction Services

Diversified / Other

Heavy Equipment Rental Data-Based Consulting

Facility Services Advertising / Marketing

Disclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member NYSE/FINRA/SIPC, and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities

products and services are offered by KeyBanc Capital Markets Inc. and its licensed securities representatives, who may also be employees of KeyBank N.A. Banking products and services are offered by KeyBank N.A. This report was not issued by our research department. The information

contained in this report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. This report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer

to buy or sell any securities. This report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation and particular needs of any individual person or entity.

Business Services Monthly

February 2016 – Monthly Commentary

Stock Performance EV / EBITDA As % of Revenue

1 Month 1 Year 3 Year

% of 52

Week High LTM NTM

Gross

Profit

Operating

Income SG&A

Data-Based Consulting 3.3% 19.3% 31.9% 93.7% 18.6x 15.1x 62.9% 21.3% 29.4%

Knowledge-Based Consulting 3.3% 29.4% 44.6% 95.1% 12.9x 11.8x 31.5% 8.4% 23.2%

Advertising / Marketing 3.5% (4.2%) (27.3%) 75.7% 9.2x 8.3x 31.2% 12.2% 21.9%

Heavy Equipment Rental 7.8% 61.0% 45.3% 79.4% 9.9x 8.7x 43.6% 21.8% 15.5%

Non-Heavy Equipment Rental 8.8% 35.1% 83.5% 99.0% 14.2x 13.4x 41.3% 13.4% 25.1%

Facility Services (1.2%) 1.2% 45.5% 86.3% 13.8x 9.9x 20.9% 9.5% 9.3%

Printing Services (4.6%) 6.7% 10.8% 72.1% 6.2x 6.2x 25.8% 4.1% 15.4%

Auction Services 4.3% 35.6% 93.1% 96.6% 18.4x 16.6x 48.4% 23.7% 18.9%

Diversified / Other Business Services (3.2%) (3.7%) 43.1% 83.3% 11.3x 8.6x 29.6% 12.2% 19.9%

KeyBanc Business Services Index 2.5% 20.0% 41.2% 86.3% 12.9x 9.9x 31.5% 12.2% 19.9%

S&P 500 2.2% 12.2% 28.4% 94.2% 12.6x 10.7x 37.6% 14.6% 15.5%

The KeyBanc Business Services Index (“KBBS”) was up for the second straight month, registering a 2.5% move, which

outpaced the 2.2% gain posted by the S&P 500. Six of the nine tracked subsectors finished the month up (pg. 23)

Debt market activity continued to remain healthy for business services companies. Revolver and term loan activity was flat

m/m, the IG bond market saw 4 issuers come to market, and HY issuers stayed on the sidelines. The IG market has now had

activity in six of the past nine months, with HY activity in nine of the past eleven months (pg. 8, 13, & 19)

The Professional & Business Services (“P&B”) sector added 31,000 jobs in May. Year over year, the P&B sector continues to

outpace overall nonfarm payroll growth, 2.4% vs. 1.6%, respectively (pg. 29)

The interest rate curve fell as the 3 month LIBOR rate dropped 4 bps to 2.32% while the 30 year treasury rate declined 11 bps

to 3.00%. The belly of the curve remained active with the 5 year treasury rate also dropping 11 bps to 2.68% (pg. 2 & 32)

The business services M&A market remained active and was up when compared to activity this time last year (pg. 33)

Tax reform, record low volatility, and improved economic forecasts, amongst other factors, contributed to the market grinding

higher throughout 2017. Although there are some geopolitical and global trade tensions, along with economic uncertainties

abroad, market participants have continued to focus on domestic themes, which are mostly favorable

Monthly Commentary

Sources: Bloomberg, Dealogic, S&P Capital IQ, SEC Filings, Thomson Reuters, Company Presentations, KBCM Estimates & Analysis

Indices Exchange Rates

Business Services Summary (as of 5/31/2018)

Move translucent box

as needed

Interest Rates

2

As of % Change vs. USD

5/31/2018 1 Month 1 Year 3 Years

Euro 1.166 (3.4)% 3.8% 6.2%

CAD 0.770 (1.2)% 4.1% (3.7)%

Renminbi 0.156 (1.2)% 6.2% (3.3)%

Peso 0.050 (6.2)% (6.5)% (23.0)%

Yen 0.009 0.5% 1.7% 14.0%

Pound 1.329 (3.4)% 3.0% (13.0)%

As of Bps Change


3m Libor 2.32% (4) 111 204

1y r T-Rate 2.23% (1) 106 197

3y r T-Rate 2.54% (8) 110 160

5y r T-Rate 2.68% (11) 93 119

7y r T-Rate 2.78% (13) 76 92

10y r T-Rate 2.83% (12) 62 71

30y r T-Rate 3.00% (11) 13 12

As of % Change


DJIA 24,415.8 1.0% 16.2% 35.6%

S&P 500 2,705.3 2.2% 12.2% 28.4%

Nasdaq 7,442.1 5.3% 20.1% 46.8%

NYSE 12,527.1 0.1% 8.0% 13.3%

AMEX 2,751.8 5.3% 5.4% 13.3%

Russell 2000 1,633.6 5.9% 19.2% 31.1%

Russell 3000 1,610.7 2.6% 12.9% 27.9%

The KeyBanc Business Services Index (“KBBS”) was up for

the month, registering a 3.1% move, which outpaced the 0.5%

gain recorded by the S&P 500. Six of the nine tracked

subsectors posted gains for June (pg. 23)

Debt market activity continued to remain healthy for business

services companies. Numerous revolvers and term loans

placed, along with one investment grade tranche. The high

yield bond market took a breather and was inactive for the

first time in 16 months (pg. 8, 13, & 19)

Professional & Business Services (“P&B”) companies added

35,000 jobs in June. Year over year, the P&B’s sector

continues to outpace overall nonfarm payroll growth, 3.1% vs.

1.6%, respectively (pg. 29)

The interest rate curve continued to flatten throughout the

month, with the 3 month LIBOR rate increasing 9 bps to

1.30%, while the 30 year treasury rate fell 3 bps to 2.84% (pg.

2 & 32)

The business services M&A market was dominated by smaller

transactions, but had its largest transaction count since February

(pg. 33)

Elevated economic and monetary policy uncertainty in the

U.S., along with geopolitical tensions abroad, continues to

keep the overall market in a slightly tepid mood. Until there is

more clarity around these issues, continue to expect a

cautious approach from market participants

The KeyBanc Business Services Index (“KBBS”) was down for the month, registering a (0.8)% move, which lagged the 2.2%

gain by the S&P 500. Four of the nine tracked subsectors posted gains (pg. 22)

Debt market activity continued to remain healthy for business services companies. Although revolver and term loan activity

was soft, it was comparable to the same period a year ago. One investment grade bond tranches priced, along with two high

yield bond tranches. This activity continues the high yield markets positive momentum - bringing the three month high yield

bond issuance total to $5.7bn (pg. 8, 12, & 18)

Professional & Business Services (“P&B”) companies added 13,000 jobs in September. Year over year, the P&B’s sector

continues to outpace overall nonfarm payroll growth, 2.6% vs. 1.2%, respectively (pg. 28)

The interest rate curve steepened as the 3 month LIBOR rate increased 2 bp to 1.33% while the 30 year treasury rate climbed

13 bps to 2.86%. The belly of the curve was active with the 10 year treasury rate spiking 21 bps to 2.33% (pg. 2 & 31)

The business services M&A market remained active in September, roughly in line with activity during this time last year (pg. 32)

Elevated economic and monetary policy uncertainty in the U.S., along with geopolitical tensions abroad, continues to keep the

overall market in a slightly tepid mood. Until there is more clarity around these issues, continue to expect a cautious approach

from market participants

. How those market

participants digest recent

volatility may have an

impact on near-term and

mid-term market activity

and general market

sentiment

The KeyBanc Business Services Index (“KBBS”) was down for

the month, registering a (0.3)% move, which outperformed the

(2.7)% loss the S&P 500 posted. Five of the nine tracked

subsectors finished the month up (pg. 22)

Debt market activity continued to remain healthy for business

services companies, picking up from last month’s slowdown.

Revolver and term loan activity was up m/m and when

compared to the same period a year ago. One investment

grade bond priced, marking IG activity for the fourth time in six

months, while three high yield bonds came to market (pg. 8,

12, & 18)

Professional & Business Services (“P&B”) companies added

50,000 jobs in February. Year over year, the P&B’s sector

continues to outpace overall nonfarm payroll growth, 2.4% vs.

1.6%, respectively (pg. 28)

The interest rate curve steepened as the 3 month LIBOR rate

increased 24 bps to 2.02% while the 30 year treasury rate rose

18 bps to 3.13%. The belly of the curve remained active with the

5 year treasury rate increasing 13 bps to 2.65% (pg. 2 & 31)

The business services M&A market remained active, but was

slightly down when compared to activity this time last year (pg. 32)

Tax reform, record low volatility, and improved economic

forecasts, amongst other factors, contributed to the market

grinding higher throughout 2017. Although there are some

geopolitical tensions and economic uncertainties abroad, market

participants have chosen to focus on domestic themes, which

are mostly favorable


February 2016 – News

(5/17) U.S. corporations spent $23 billion on analytics work in 2017 (Source Global Research)

A new report revealed that of the $23 billion spent by U.S. corporations on analytics work, around $10 billion, or 43%,

was spent on building up in-house analytics capabilities, while the remaining 57% was spent on external analytics

consultants. U.S. executives are investing in data and analytics for revenue growth and cost efficiencies

(5/24) S&P Global announced plans to build a stand-alone ratings business in China, the first major credit rating

agency to explicitly outlay plans. S&P’s grades of Chinese companies could open the local yuan-denominated

bond market to international investors and provide Chinese businesses with access to lower-cost capital (WSJ)

(5/21) IHS Markit announced its intent to acquire Ipreo, a leading financial services solutions and data provider, for

$1.855 billion, from PE funds managed by Blackstone, Goldman Sachs Merchant Banking Division (IHS Markit)

(5/3) According to a survey by Dun & Bradstreet and Forrester Consulting, the number one priority for sales and

marketing teams over the next year is to increase their use of data and analytics (Dun & Bradstreet)


Data-Based Consulting

Knowledge-Based Consulting

(5/30) According to Korn/Ferry, CEOs are seeing the highest compensation increases since the recession (Korn/Ferry)

The study examines pay for CEOs at the nation’s 300 largest publicly traded companies. Median total direct

compensation for CEOs increased 8.7% to $13.4 million, doubling the previous year’s 4.2% increase in total direct

compensation. This year marked the highest percentage increase since 2010, the first year post-recession. A large

percentage of the increase was due to increases in annual bonuses and long-term incentives, rather than base pay

(5/22) The Big Four accounting firms increase their audit fees year-over-year as the length of time that they’re

auditing companies increases (Accounting Today)

(5/2) ICF reported first quarter revenue of $303 million, up 2% over the first quarter last year. The Company reported

a pipeline of $4.4 billion and opportunities with FEMA and HUD (PR Newswire)

(5/1) Huron Consulting released first quarter revenue of $193.7 million, a 2.6% increase over the year-ago period.

Revenues for the Business Advisory and Education segments increased 16.2% and 13.3%, respectively (Huron)

Advertising / Marketing

(5/23) Accenture Interactive plans to launch a Programmatic Services practice (WSJ)

The new division will incorporate the planning, buying, and management of programmatic ad campaigns. Consulting

firms and advertising agencies have been competing more directly for business recently, as consulting firms, like

Accenture, have acquired ad agencies. In response, ad agencies have opened consulting businesses. Accenture

Interactive’s revenue grew 35% to $6.5 billion in 2017

(5/22) According to research released by IAB, 65% of brand marketers that purchase digital ads programmatically

have either completely moved programmatic buying in-house or have begun the process of doing so (IAB)

(5/10) MDC reported disappointing first quarter revenue of $327 million, down 5% from a year ago. The Company’s

CEO blamed slow development of new business, client cutbacks, and new accounting regulations (WSJ)

(5/10) Total U.S. digital ad spend reached a record $88 billion in 2017. On mobile devices, video revenue increased

64% to $6.2 billion, the first time that mobile video revenues have surpassed desktop video (IAB)

3


$ in millions, unless otherwise noted

For each month

– reset

paragraph

spacing in each

section

https://www.sourceglobalresearch.com/content/us-corporations-spent-23bn-on-analytics-work-in-2017

https://www.wsj.com/articles/s-p-global-moves-to-start-ratings-business-in-china-1527158400

http://investor.ihsmarkit.com/phoenix.zhtml?c=188457&p=irol-newsArticle&ID=2349947

http://investor.ihsmarkit.com/phoenix.zhtml?c=188457&p=irol-newsArticle&ID=2349947

http://investor.dnb.com/news-releases/news-release-details/sales-and-marketing-teams-see-higher-returns-effective-data

https://www.kornferry.com/press/performance-pays-ceos-see-highest-compensation-increases-since-the-recession-according-to-new-korn-ferry-study/

https://www.kornferry.com/press/performance-pays-ceos-see-highest-compensation-increases-since-the-recession-according-to-new-korn-ferry-study/

https://www.accountingtoday.com/news/big-four-audit-firms-increase-fees-as-tenure-grows

https://www.prnewswire.com/news-releases/icf-reports-first-quarter-2018-results-300641409.html

http://ir.huronconsultinggroup.com/news-releases/news-release-details/huron-announces-first-quarter-2018-financial-results-and-affirms

https://www.wsj.com/articles/accenture-interactive-opens-digital-ad-buying-division-further-encroaching-on-agencies-turf-1527073200

https://www.iab.com/news/nearly-two-thirds-of-brands-purchasing-ads-through-programmatic-means-have-fully-or-partially-moved-the-function-in-house-according-to-iab-research/

https://www.wsj.com/articles/ad-company-mdcs-shares-tumble-after-gloomy-earnings-report-1525973519

https://www.iab.com/news/digital-ad-spend-reaches-all-time-high-88-billion-2017-mobile-upswing-unabated-accounting-57-revenue/



(5/24) April new business volume flat year-over-year, down 13% from March (ELFA)

According to the ELFA Monthly Leasing and Finance Index, overall new business volume for April was $7.9 billion,

unchanged from April 2017, and down 13% from $9.1 billion in March. Year-to-date, cumulative new business volume

is up 9% vs. 2017. “Responding members continue to show solid growth in new business volume, reflecting sound

fundamentals in the U.S. economy. Effects of new tax legislation signed into law late last year … are serving to buoy

business confidence and contribute to healthy capex levels,” said ELFA President and CEO Ralph Petta

(5/30) The Association of General Contractors analyzed recent employment data and found that construction

employment increased in 256 of 358 metro areas between April 2017 and April 2018 (RER)

(5/21) In the American Rental Association’s latest 5-year forecast, U.S. equipment and event rental industry revenue

will reach $64.1 billion by 2022 due to economic growth and capital spending (RER)

(5/8) Textainer reported first quarter results. Lease rental revenue increased 3% from the prior quarter (Business Wire)

4


Heavy Equipment Rental

Non-Heavy Equipment Rental

(5/22) Cintas announced fiscal 2018 third quarter results; revenue increased 26.6% y/y (Cintas)

The Company reported revenue for the quarter of $1.59 billion, representing an organic growth rate (which adjusts for

the impacts of acquisitions and foreign currency exchange rate fluctuations) of 7.8%. Scott Farmer, CEO of Cintas,

commented that Cintas is continuing to make progress on the G&K acquisition and implementation of an ERP system

(6/4) With unemployment at an 18-year low, event rental operators are scrambling to find workers willing and able to

work long hours at the current pay rate (Special Events)

(5/21) Cintas was recently named to the Fortune 500 list for the first time, making it the ninth Cincinnati-based

company to make the list (Cincinnati.com)

(5/9) Superior Group of Companies agreed to acquire CID Resources Inc. for approximately $88.4 million,

representing a price of 1.35x 2017 sales. CID provides branded medical uniforms and is based in Coppell,

Texas (ALN)

Facility Services

(5/1) ServiceMaster announced first quarter results and appointed a CEO of AHS (ServiceMaster) (ServiceMaster)

Revenue increased 5% to $675 million for the quarter. ServiceMaster completed the previously announced $92 million

acquisition of Copesan Services. American Home Shield, expected to be spun off in Q3, reported a 9% y/y revenue

increase for the first quarter. ServiceMaster named Rex Tibbens as American Home Shield CEO & President

(5/21) Rentokil Steritech finalized a deal to acquire Advanced Pest Management, based in Elkton, Maryland. The

acquisition further expands Rentokil Steritech’s reach in the northeastern U.S. (PCT)

(5/17) Rollins announced that it has acquired Guardian Pest Control in the U.K. to expand its footprint there. Terms

were not disclosed (Rollins)

(5/2) SP Plus announced first quarter results, including a 3% decline in gross profit over the year-ago period. The

Company’s CEO remarked that results “met our expectations, despite some challenging winter weather and a

non-cash write-off related to an unanticipated early termination of a long-term lease contract” (SP Plus)



https://www.elfaonline.org/news/press-room/press-releases/details/2018/05/24/equipment-leasing-and-finance-association-s-survey-of-economic-activity-monthly-leasing-and-finance-index

http://rermag.com/contractor-news/construction-employment-increases-most-metro-areas

http://rermag.com/headline-news/us-equipment-and-event-rental-hit-641-billion-2022-ara-projects-0

https://www.businesswire.com/news/home/20180508005468/en/

https://www.cintas.com/news/press-releases/cintas-corporation-announces-fiscal-2018-third-quarter-results/

http://www.specialevents.com/rental/event-rental-operators-grapple-tight-labor-market

https://www.cincinnati.com/story/money/2018/05/21/cintas-makes-fortune-500-cincinnati-keeps-eight-total/627982002/

https://americanlaundrynews.com/articles/superior-acquires-cid-resources

http://news.servicemaster.com/press-release/servicemaster-appoints-rex-tibbens-president-and-chief-executive-officer-american

http://news.servicemaster.com/press-release/servicemaster-delivers-solid-first-quarter-2018-results-strong-growth-ahs-and-fsg-and

http://www.pctonline.com/article/rentokil-steritech-acquires-apm/

http://www.rollins.com/news/2018/05-17-2018-211951199

http://ir.spplus.com/news-releases/news-release-details/sp-plus-corporation-announces-first-quarter-2018-results



(5/9) Deluxe announced the acquisition of LogoMix for $43 million in cash (Business Wire)

LogoMix, based in Boston, is a provider of logo design and other small business branding and marketing services.

More than 60% of the firm’s customers are outside of the U.S., so the acquisition will expand Deluxe’s reach, while

strengthening its innovative small business marketing services. Deluxe will also implement LogoMix’s artificial

intelligence capabilities, which will give Deluxe the ability to better cross-sell products

(5/29) Cimpress announced a private offering of $400 million Senior Notes due 2026 (Business Wire)

(5/2) Quad/Graphics announced a multi-year, multi-million-dollar contract with U.S. Bank to manage credit card

acquisition programs for hundreds of its small and mid-size regional banks. Quad will produce mailpieces that

are personalized with data elements relevant to each individual recipient (Quad/Graphics)

(5/2) LSC Communications and RRD agreed that LSC will acquire the Print Logistics component of RRD’s Logistics

business. This is LSC’s third logistics-focused acquisition in the last 12 months (Business Wire)

5


Printing Services

Auction Services

(5/17) Ritchie Bros. sold $44 million of equipment in its Fort Worth, Texas auction (Ritchie Bros.)

Ritchie Bros. sold over $44 million of equipment at its May Fort Worth auction. There were over 4,750 bidders from 59

countries. Dolan Aucoin, Sales Director for Ritchie Bros., commented, “We had a great turnout this week – with

attendance up approximately 12% year over year – resulting in strong pricing across most equipment categories”

(5/23) Copart announced third quarter fiscal 2018 results. Revenue was $478.2 million, an increase of 27.9%

compared to the same quarter last year. Results were adversely affected by $7.4 million for the quarter, related

to Hurricane Harvey (Copart)

(5/17) Copart fulfilled its promise to clear hazardous scrap tires from the former Safe Tire Disposal Corp. in San

Antonio, Texas. Copart announced the purchase of this location in January (Copart)

(5/8) KAR announced first quarter revenue of $950.5 million, a 10% improvement over the first quarter of 2017 (KAR)

Diversified / Other Business Services

(5/31) Brink’s announced the acquisition of rival Dunbar Armored for approximately $520 million (WSJ)

In 2017, Brink’s made six acquisitions for roughly $365 million; earlier this year, the Company announced the $145

million acquisition of Brazil-based Rodoban. With this acquisition, Brink’s says it will be the nation’s and world’s largest

cash-management company. Dunbar had LTM revenue and EBITDA of approximately $390 million and $43 million,

respectively. The transaction will be funded with cash and is expected to close by year-end

(5/31) Sabre announced it will offer NDC-enabled solutions by the end of 2018 to bring value to travelers (Sabre)

(5/30) Iron Mountain acquired EvoSwitch Netherlands B.V and EvoSwitch Global Services B.V. The acquisition

provides 11 megawatts of existing data center capacity in the Netherlands. Transaction consideration of €205

($235) million was financed by debt and represents a multiple of ~14x 2018 EBITDA (Iron Mountain)

(5/1) Cardiff Lexington agreed to acquire Red Rock Travel Group, a provider of timeshare and travel club leads in the

U.S. (Globe Newswire)



https://www.businesswire.com/news/home/20180509005115/en/Deluxe-Corp.-Acquires-LogoMix-Provider-Custom-Marketing


http://investors.qg.com/phoenix.zhtml?c=231687&p=irol-newsArticle&ID=2346342


https://www.rbauction.com/news-releases/20180517-ritchie-bros-sells-us44-million-of-equipment-in-fort-worth-tx-auction



https://www.copart.com/content/us/en/press-releases/copart-reports-third-quarter-fy18-earnings

https://www.copart.com/content/us/en/press-releases/copart-fulfills-promise-to-clear-hazardous-tires

http://karauctionservices.com/wp-content/uploads/2018/05/KAR-Auction-Services-Inc-Reports-First-Quarter-2018-Financial-Results.pdf

https://www.wsj.com/articles/brinks-to-buy-cash-management-firm-dunbar-for-520-million-1527766018

https://www.sabre.com/insights/releases/sabre-to-offer-ndc-enabled-solutions-in-2018/

http://www.ironmountain.com/about-us/news-events/news-categories/press-releases/2018/may/iron-mountain-acquires-dutch-evoswitch-data-center-business-for-205-235-million-

https://globenewswire.com/news-release/2018/05/01/1494320/0/en/Cardiff-Lexington-Corporation-Acquires-Red-Rock-Travel-Group.html


February 2016 – Debt Capital Markets, Loans

Leveraged Loans Market Update & Commentary

Loan funds reported an inflow totaling $275 million last week – the lightest inflow in five weeks

For the week ended May 31st, $5.6 billion priced from 11 loans vs. $6.1 billion the week prior and $29.7 billion two weeks ago

YTD volume totals $361.4 billion, a 23.1% decrease compared to $469.9 billion the year prior

1Q18 volume improved from 4Q17, driven by M&A activity

– Acquisition-related activity jumped 24% q/q to $47.1B while refinancing remained essentially flat q/q at approximately

$59B

– Repricings totaled $139.0B, up slightly q/q, with over 50% of the issuers repricing for the first time since the original deal

LBO leverage reached 5.9x in 1Q18, the highest level since 2007

LIBOR rate increases, up 60 bps in 1Q18 to 231 bps, are counteracting declining spreads

Loan Technical Conditions

Demand

– New-issue CLO strength has continued, with five additional CLOs pricing, bringing the MTD total to $11.2 billion and YTD

to $54.2 billion

– CLO investors are anticipating the second half of the year to include more resets and a continued stream of new issues

– 2018 CLO estimates currently range from $100.0 – $150.0 billion. The removal of risk retention regulations is likely to

bolster issuance through 2018

Supply

– The forward calendar fell to $56.1 billion last week, which still remains well above the LTM average of $37.6 billion. M&A

serves as the primary driver of activity, with $45.1 billion across 37 transactions

– With the calendar’s continued strength, supply provides support for investors’ heavy demand

6

Loans – Market Update & Technical Conditions

($ in billions)

Broadly Syndicated Loans - Quarterly Volume



* Not connected to a repricing

$56

$150

$67$51

$41

$119

$153$164

$340

-

$50

$100

$150

$200

$250

$300

$350

$400

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q17

Repricing via Amendment Re-Syndicated Repricing New-Issue *



85.0

87.5

90.0

92.5

95.0

97.5

100.0

Jun

-15

Sep

-15

De

c-15

Ma

r-1

6

Jun

-16

Sep

-16

De

c-16

Ma

r-1

7

Jun

-17

Sep

-17

De

c-17

Ma

r-1

8

98.3

$32$29$28

$33 $34

$45$46$51

$45

$37$38$43

$48

$60$64

$74

$61$56

$0

$10

$20

$30

$40

$50

$60

$70

$80

1/31

/201

8

2/7/

2018

2/14

/201

8

2/21

/201

8

2/28

/201

8

3/7/

2018

3/14

/201

8

3/21

/201

8

3/28

/201

8

4/4/

2018

4/11

/201

6

4/18

/201

8

4/25

/201

8

5/3/

2018

5/9/

2018

5/16

/201

8

5/23

/201

8

5/30

/201

8

$37.6bn LTM weekly average

4Q17 1Q18

Last

month 5/24/18 5/31/18

Overall 5.02% 5.27% 5.84% 5.77% 5.78%

BB-rated 3.92% 4.34% 4.69% 4.55% 4.54%

B-rated 5.45% 5.54% 6.25% 623.00% 6.25%

Large Corporate 4.85% 5.09% 5.70% 5.63% 5.63%

Middle Market 6.06% 6.21% 6.67% 6.65% 6.69%

Quarter-to-date

6.2x

4.9x

4.0x

4.7x5.2x 5.3x 5.4x

5.8x 5.7x 5.5x5.8x 5.9x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1Q18

First Lien Second Lien / Other Debt

$168

$160

$134

$67

$94

$140

$117

$73

$91

$128

$141

$121

$209

$166

$145

$124

$167

$0

$50

$100

$150

$200

$250

1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18

Institutional Prorata

7

Loans – Monthly Market Statistics

Leveraged Yields Weekly Institutional Forward Calendar ($BN)



[1] S&P/LSTA US Leveraged Loan 100 Index

Leveraged Loan Volume ($BN) – New Money Large Corporate LBO Leverage

Secondary Market [1]



4/27/2018 TransUnion Corp TRU 4/27/2022 TLA Yes $400 Acq. Fin. Yes n/d Yes Ba2 BB+

4/27/2018 TransUnion Corp TRU 4/27/2025 TLB Yes 1,000 Acq. Fin. Yes n/d Yes Ba2 BB+

3/7/2018 NeuStar Inc - 1/2/2020 TLB Yes 129 GCP Yes L + 275 Yes Ba3 BB



5/22/2018 Global Sales Alliance - 5/22/2021 Rev n/d $5 WC No n/d No nr/na nr/na

5/22/2018 Global Sales Alliance - 5/22/2021 Rev n/d 4 WC No n/d No nr/na nr/na

5/22/2018 Global Sales Alliance - 5/22/2023 TL n/d 11 WC No n/d No nr/na nr/na

5/22/2018 Global Sales Alliance - 5/22/2021 SLOC n/d 2 WC No n/d No nr/na nr/na

5/8/2018 PriceWaterhouseCoopers LLP - 5/8/2019 Rev No 400 GCP No L + 125 Yes nr/na nr/na

5/7/2018 TransPerfect Translations Intl - n/a Rev Yes 25 Mgmt. Buy-Out No n/d Yes nr/na nr/na

5/7/2018 TransPerfect Translations Intl - n/a TL Yes 420 Mgmt. Buy-Out No n/d Yes nr/na nr/na

4/30/2018 AlixPartners LLP - 3/27/2024 TLB Yes 170 Div. Recap. Yes L + 275 Yes B2 B+

4/24/2018 Press Ganey Holdings Inc - 10/23/2023 TLB Yes 838 GCP Yes L + 275 Yes B2 B

4/24/2018 Press Ganey Holdings Inc - 10/23/2023 TLB Yes 90 GCP Yes L + 275 Yes B2 B

4/18/2018 Teneo Holdings - 4/18/2023 Rev No 25 GCP Yes L + 225 Yes nr/na nr/na

4/18/2018 Teneo Holdings - 4/18/2023 TLA Yes 128 GCP Yes L + 225 Yes nr/na nr/na

4/13/2018 LegalShield - n/a Rev Yes 50 Spon. Buyout No n/d Yes B1 B

4/13/2018 LegalShield - 4/13/2025 TLB Yes 550 Spon. Buyout No L + 325 Yes B1 B

4/13/2018 LegalShield - 4/13/2026 TL Yes 150 Spon. Buyout No L + 750 Yes Caa1 B-

4/3/2018 CBIZ Inc CBZ 4/3/2023 Rev No 400 WC Yes L + 125 No nr/na nr/na

3/23/2018 Huron Consulting Group Inc HURN 3/23/2023 Rev Yes 600 WC Yes L + 175 Yes nr/na nr/na

3/16/2018 PwC - 3/16/2023 Rev n/d 50 GCP No n/d Yes B1 B

3/16/2018 PwC - 3/16/2025 TLB n/d 315 GCP No L + 325 Yes B1 B

3/16/2018 PwC - 3/16/2026 TL n/d 105 GCP No L + 750 Yes Caa1 CCC+

3/7/2018 Engage2Excel Inc - 3/7/2023 Rev Yes 12 Acq. Fin. No L + 650 Yes nr/na nr/na

3/7/2018 Engage2Excel Inc - 3/7/2023 TL Yes 105 Acq. Fin. No L + 650 Yes nr/na nr/na

3/1/2018 Polsinelli PC - 3/1/2021 Rev No 90 GCP No L + 200 Yes nr/na nr/na

3/1/2018 Polsinelli PC - 3/1/2021 Rev No 30 GCP No L + 200 Yes nr/na nr/na

8


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Offering Details Facility Ratings

Close Date Issuer Ticker Maturity Type Secured Amount Primary UoP Amended

Initial All-In

Spread Leveraged Moodys S&P

The May 2018 revolver and term loan market saw 10 companies amend/issue 23 tranches. Recall that in April, 11

companies amended/issued 19 tranches

Of note:

– Omnia Partners (Other) closed $565mm in financing, consisting of a $30mm revolver, a $390mm first-lien TLB at L+375,

and a $145mm second-lien TL at L+750. Proceeds are tagged to refinance debt and back the acquisition of U.S.

Communities. Omnia Partners is a group-purchasing organization in procurement and supply chain management

– TransPerfect Translations Intl (Knowledge) issued $445mm, comprised of a $420mm TL and $25mm revolver, to

support the management-led buyout

Sources: Bloomberg, Dealogic, S&P Capital IQ, SEC Filings, Thomson Reuters, Thomson Financial, Company Presentations, KBCM Estimates & Analysis


Last 3 Months

Search close date and

announced date – if

you don’t, some

transactions might slip

through

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Initial All-In




Last 3 Months

5/31/2017 KAR Auction Services Inc KAR 3/9/2021 Rev Yes $350 GCP Yes L + 200 Yes nr/na nr/na

5/31/2017 KAR Auction Services Inc KAR 3/9/2023 TLB Yes 1,050 GCP Yes L + 250 Yes Ba2 BB-

5/31/2017 KAR Auction Services Inc KAR 5/31/2024 TLB Yes 717 GCP Yes L + 225 Yes Ba2 BB-

Auc

tion

9/27/2017 Interpublic Group Of Cos Inc IPG 9/27/2022 Rev No $1,500 Refi. Yes L + 130 No nr/na nr/na

9/25/2017 Authentic Brands Group - 9/25/2022 Rev Yes 75 Div. Recap. No n/d Yes B1 B

9/25/2017 Authentic Brands Group - 9/25/2024 TLB Yes 725 Div. Recap. No L + 400 Yes B1 B

9/25/2017 Authentic Brands Group - 9/25/2025 TL Yes 270 Div. Recap. No L + 800 Yes Caa1 CCC+Adv

./ M

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5/31/2018 ARAMARK Corp ARMK 3/11/2025 TLB Yes $1,781 GCP Yes L + 175 Yes Ba2 BB+

5/18/2018 ARAMARK Corp ARMK 3/29/2024 TLB Yes 1,411 GCP Yes L + 175 Yes Ba2 BB+

5/11/2018 PYE Barker Fire & Safety Inc - 5/11/2023 Rev No 8 WC Yes L + 550 Yes nr/na nr/na

5/11/2018 PYE Barker Fire & Safety Inc - 5/11/2023 TL No 36 WC Yes L + 550 Yes nr/na nr/na

5/11/2018 PYE Barker Fire & Safety Inc - 5/11/2023 DDTL No 25 WC Yes L + 550 Yes nr/na nr/na

3/30/2018 JENSEN HUGHES Inc - 3/22/2024 TLB Yes 30 GCP Yes L + 450 Yes nr/na nr/na

3/30/2018 JENSEN HUGHES Inc - 3/22/2024 DDTL Yes 36 GCP Yes L + 450 Yes nr/na nr/na

3/21/2018 US Security Associates Inc - 7/28/2023 TLB Yes 595 GCP Yes L + 350 Yes B2 B

3/21/2018 US Security Associates Inc - 7/14/2021 Rev No 80 GCP Yes L + 350 Yes B2 nr/na

3/15/2018 CPI Security Systems Inc - 3/15/2021 Rev No 200 GCP Yes L + 150 No nr/na nr/na

3/9/2018 Kellermeyer Bergensons Svc LLC - 10/29/2021 TLB Yes 40 Acq. Fin. Yes L + 500 Yes nr/na B

3/1/2018 Impact Facility Services LLC - 4/13/2023 Rev Yes 10 GCP Yes L + 450 Yes nr/na nr/na

3/1/2018 Impact Facility Services LLC - 4/13/2023 TL Yes 32 GCP Yes L + 450 Yes nr/na nr/na

3/1/2018 Impact Facility Services LLC - 4/13/2023 DDTL Yes 40 GCP Yes L + 450 Yes nr/na nr/na

3/1/2018 Impact Facility Services LLC - 4/13/2023 TL Yes 34 Acq. Fin. Yes L + 450 Yes nr/na nr/na

Fac

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5/22/2018 Satellite Shelters Inc - 5/22/2022 Rev No $120 GCP Yes L + 200 Yes nr/na nr/na

5/2/2018 Air Lease Corp AL 5/5/2022 Rev No 3,992 GCP Yes L + 105 No nr/na BBB

4/27/2018 Mike Albert Leasing Co - 4/26/2019 364d Rev No 25 GCP No L + 125 No nr/na nr/na

4/26/2018 Aviation Capital Group Corp - 4/26/2023 Rev No 1,500 GCP Yes L + 112.5 No nr/na A-

4/13/2018 Nesco Sales & Rentals Inc - 9/30/2020 Rev Yes 250 GCP Yes L + 287.5 Yes nr/na nr/na

4/12/2018 GenServe Inc - 4/12/2024 Rev Yes 5 LBO No L + 575 Yes nr/na nr/na

4/12/2018 GenServe Inc - 4/12/2024 TLA Yes 34 LBO No L + 575 Yes nr/na nr/na

4/12/2018 GenServe Inc - 4/12/2024 DDTL Yes 15 LBO No L + 575 Yes nr/na nr/na

3/24/2018 Sasser Family Holdings Inc - 3/24/2023 Rev No 625 GCP No L + 175 Yes nr/na nr/na

3/24/2018 Sasser Family Holdings Inc - 3/24/2023 TLA No 50 GCP No L + 225 Yes nr/na nr/na

3/14/2018 Rental Holdings LLC - 3/14/2023 Rev No 250 GCP No L + 350 No nr/na nr/na

Hea

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2/21/2018 Algeco Scotsman Inc - n/a Rev Yes $400 Refi. No n/d No nr/na nr/na

2/9/2018 Coinmach Service Corp - 11/14/2022 TLB Yes 1,560 GCP Yes L + 325 Yes B2 B

NH

5/14/2018 Atlas Sign Industries Inc. - 5/14/2023 TL Yes $18 GCP No L + 950 Yes nr/na nr/na

3/15/2018 HS2 Solutions Inc - 3/15/2022 Rev No 3 GCP No n/d No nr/na nr/na

3/15/2018 HS2 Solutions Inc - 3/15/2022 TL No 26 GCP No n/d No nr/na nr/na

3/9/2018 Nationwide Mail Marketing Inc - 6/1/2021 TL Yes 87 GCP Yes L + 500 Yes nr/na nr/na

3/9/2018 Nationwide Mail Marketing Inc - 6/1/2021 Rev Yes 10 GCP Yes L + 500 Yes nr/na nr/na

3/9/2018 Nationwide Mail Marketing Inc - 6/1/2021 TL Yes 29 Acq. Fin. Yes L + 500 Yes nr/na nr/na

3/9/2018 Nationwide Mail Marketing Inc - 12/1/2021 TL Yes 8 Acq. Fin. Yes L + 875 Yes nr/na nr/na

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3/21/2018 Deluxe Corp DLX 3/21/2023 Rev No $950 GCP No L + 125 No nr/na nr/na

10


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7.73



Initial All-In




Last 3 Months

5/31/2017 KAR Auction Services Inc KAR 3/9/2021 Rev Yes $350 GCP Yes L + 200 Yes nr/na nr/na

5/31/2017 KAR Auction Services Inc KAR 3/9/2023 TLB Yes 1,050 GCP Yes L + 250 Yes Ba2 BB-

5/31/2017 KAR Auction Services Inc KAR 5/31/2024 TLB Yes 717 GCP Yes L + 225 Yes Ba2 BB-

Auc

tion

9/27/2017 Interpublic Group Of Cos Inc IPG 9/27/2022 Rev No $1,500 Refi. Yes L + 130 No nr/na nr/na

9/25/2017 Authentic Brands Group - 9/25/2022 Rev Yes 75 Div. Recap. No n/d Yes B1 B

9/25/2017 Authentic Brands Group - 9/25/2024 TLB Yes 725 Div. Recap. No L + 400 Yes B1 B

9/25/2017 Authentic Brands Group - 9/25/2025 TL Yes 270 Div. Recap. No L + 800 Yes Caa1 CCC+Adv

./ M

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5/31/2018 PODS Enterprises Inc - 11/21/2024 TLB n/d $781 GCP Yes L + 275 Yes B2 B+

5/31/2018 PODS Enterprises Inc - 11/21/2024 TLB n/d 60 Acq. Fin. Yes L + 275 Yes B2 B+

5/16/2018 Omnia Partners - n/a Rev Yes 30 Acq. Fin. No n/d Yes B2 B

5/16/2018 Omnia Partners - n/a TLB Yes 390 Acq. Fin. No L + 400 Yes B2 B

5/16/2018 Omnia Partners - n/a TL Yes 145 Acq. Fin. No L + 800 Yes B2 B

5/9/2018 Opus Solutions Holdings LP - 5/9/2023 Rev Yes 5 Acq. Fin. No n/d No nr/na nr/na

5/9/2018 Opus Solutions Holdings LP - 5/9/2023 TL Yes 3 Acq. Fin. No n/d No nr/na nr/na

5/9/2018 Opus Solutions Holdings LP - 5/9/2023 TL Yes 21 Acq. Fin. No n/d No nr/na nr/na

4/16/2018 United Talent Agency Inc - 4/16/2023 Rev No 120 GCP Yes L + 300 Yes nr/na nr/na

4/16/2018 United Talent Agency Inc - 4/16/2023 TLA No 100 GCP Yes L + 300 Yes nr/na nr/na

3/28/2018 West Corp - 10/10/2024 TLB Yes 700 Acq. Fin. Yes L + 350 Yes Ba3 B

3/22/2018 Iron Mountain Inc IRM 1/2/2026 TLB Yes 700 GCP No L + 175 Yes Ba3 BB

3/16/2018 Direct Travel Inc - 12/1/2021 TLB Yes 25 GCP Yes L + 650 Yes nr/na nr/na

3/16/2018 Direct Travel Inc - 12/1/2021 DDTL Yes 50 GCP Yes L + 650 Yes nr/na nr/na

3/9/2018 AWP Inc - 6/16/2021 TLB n/a 8 Acq. Fin. Yes L + 425 Yes nr/na nr/na

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February 2016 – Debt Capital Markets, Bonds, Investment Grade

$156

$84

$122

$96

$130

$118 $117

$26

$126

$95

$123$116 $118

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

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

($ in billions)

2018 volume is expected to see overall issuance of about $1.3 trillion

– June issuance is estimated at $95.0 billion

– May issuance totaled $118.4 billion compared to $156.2 billion in May 2017

IG spreads reached a 2018 low at +112 bps on February 2nd and are averaging +138 bps in the second quarter of 2018

The 2018 new issue market has experienced softening as evidenced by widening spreads, smaller oversubscriptions,

higher new issue concessions, and less spread compression from IPT to pricing in the primary market

– US IG book oversubscriptions have averaged 2.8x YTD 2018, down from 3.1x in FY 2017

– Average weekly new issue concessions currently stand at 5 bps for 2018 vs. the 1 bp average in 2017

– Spread compression for IG deals has averaged 15 bps for YTD 2018

11

Investment Grade – Bond Market Update & Outlook

Investment Grade – Monthly Volume

Sources: Bloomberg, Dealogic, S&P Capital IQ, Moody’s, SEC Filings, Thomson Reuters, Company Presentations, KBCM Estimates & Analysis




110 bps

130 bps

150 bps

170 bps

190 bps

210 bps

230 bps

250 bps

270 bps

Nov-15 May-16 Nov-16 May-17 Nov-17 May-18

60 bps

80 bps

100 bps

120 bps

140 bps

160 bps

180 bps

200 bps

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

IG - BBB IG - All IG - Business / Consumer Services IG - A IG - AA

126

141

171

118

90

12

Investment Grade – Spreads

FOMC Rate Hike Expectations Investment Grade Spreads at Recent Lows

Sources: Bloomberg, Dealogic, S&P Capital IQ, Moody’s, SEC Filings, Thomson Reuters, Company Presentations, J.P. Morgan Markets, KBCM Estimates & Analysis


50 bps

75 bps

100 bps

125 bps

150 bps

Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17

2 - 10-Year UST 10 - 30-Year UST

Quarter Average Spread

Q3 2017 +139 bps

Q4 2017 +129 bps

Q1 2018 +123 bps

Q2 2018 +138 bps

Probability of Effective Fed Funds Rate

1.50-1.75% 1.75-2% 2-2.25% 2.25-2.5% 2.5% +

Current 1 Hike 2 Hikes 3 Hikes 4 Hikes

Jun 18 - 84.0% 16.0% - -

Aug 18 - 82.3% 17.7% 0.3% -

Sep 18 - 24.7% 75.3% 12.5% 0.2%

Nov 18 - 22.7% 77.3% 17.6% 1.2%

Dec 18 - 13.7% 86.3% 41.4% 7.8%

Jan 19 - 12.8% 87.1% 44.0% 9.7%

Meeting

Date



Offering Details Pricing Details Bond Ratings

Trade Date Issuer Ticker Maturity Amount General UoP Price Coupon Yield Spread Moody's S&P

5/23/2018 Equifax Inc EFX 8/15/2021 $300 Refinancing 100.000 L + 87 FRN FRN Baa1 BBB+

5/23/2018 Equifax Inc EFX 8/15/2021 300 Refinancing 99.640 3.600% 3.716% T + 105 Baa1 BBB+

5/23/2018 Equifax Inc EFX 6/15/2023 400 Refinancing 98.968 3.950% 4.178% T + 135 Baa1 BBB+

5/7/2018 Penske Truck Leasing Co LP - 2/1/2024 450 Refinancing 99.796 3.900% 3.941% T + 115 Baa2 BBB

5/3/2018 GATX Corp GATX 11/7/2028 300 Refinancing 100.000 4.550% 4.550% T + 160 Baa2 BBB

5/3/2018 S&P Global Inc SPGI 5/15/2048 500 Refinancing 98.751 4.500% 4.577% T + 145 Baa1 NR

3/9/2018 RELX Capital LSE:REL 3/15/2023 700 Refinancing 99.578 3.500% 3.593% T + 95 Baa1 BBB+


11/2/2017 GATX Corp GATX 11/5/2021 200 GCP 100.000 L + 72 FRN FRN Baa2 BBB



9/12/2017 Pitney Bowes PBI 9/15/2020 300 Acquisition 99.764 3.625% 3.709% T + 225 Ba1 BBB-

9/12/2017 Pitney Bowes PBI 4/1/2023 400 Acquisition 99.756 4.700% 4.750% T + 300 Ba1 BBB-

6/1/2017 Moody's Corp. MCO 1/15/2023 500 Acquisition 99.766 2.625% 2.670% T + 90 nr/na BBB+

6/1/2017 Moody's Corp. MCO 1/15/2028 500 Acquisition 98.918 3.250% 3.372% T + 115 nr/na BBB+

5/3/2017 Pitney Bowes PBI 5/15/2022 400 Refinancing 99.543 3.875% 3.976% T + 215 Baa3 BBB-


3/9/2017 Cintas Corporation CTAS 4/1/2022 650 Acquisition 99.870 2.900% 2.930% T + 80 A3 BBB+

3/9/2017 Cintas Corporation CTAS 4/1/2027 1,000 Acquisition 99.620 3.700% 3.750% T + 115 A3 BBB+

2/27/2017 Moody's Corp. MCO 9/4/2018 300 GCP 100.000 L + 35 FRN FRN nr/na BBB+

2/27/2017 Moody's Corp. MCO 12/15/2021 500 GCP 99.690 2.750% 2.820% T + 95 nr/na BBB+


10/26/2016 Penske Truck Leasing Co LP - 11/15/2026 600 Refinancing 99.695 3.400% 3.436% T + 165 Baa2 BBB-

9/19/2016 S&P Global Inc SPGI 1/22/2027 500 Refinancing 99.157 2.950% 3.046% T + 135 Baa1 nr/na

9/15/2016 Pitney Bowes PBI 10/1/2021 600 Recap 99.724 3.375% 3.435% T + 225 Baa3 BBB

13

Investment Grade – Recent Bond Issuance

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DC

The business services investment grade sector rebounded in May after a quiet April, with four issuers coming to market

issuing a total of $2.25bn. Highlights:

– Equifax (Data) printed $1bn of debt across three tranches, ranging from 3 to 5 years. The offering was used to refinance

existing debt and for general corporate purposes

– Penske Truck (Heavy) issued $450mm of ~5.75 year notes with a coupon of 3.90% and a yield of 3.941%. Similar to

Equifax, the offering was used to refinance existing debt and for general corporate purposes

The investment grade market has seen ~$6.5bn in bonds issued over the past 12 months vs. ~$6.1bn this time last year



Located in Gallo Team

Folder – located there so

can access from

Bloomberg terminal to

update comps

KC

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Recall in March:

– Cintas (Non-Heavy Equipment)

issued three separate

tranches: (1) $650mm of

2.900% notes due 4/1/2022, (2)

$1.0bn of 3.700% notes due

4/1/2027 and (3) $50mm tap of

3.250% notes due 6/1/2022

(not shown below). Proceeds

were used to complete the

acquisition of G&K Services

– Penske Truck (Heavy

Equipment) returned to market

with a $500mm tranche (Baa2 /

BBB) maturing in April 2027.

The issue priced at 99.860 with

a coupon of 4.200% to yield

4.217%. Proceeds were

earmarked to refinance existing

debt

DC

D

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HE

The business services

investment grade market had

two issuers come to market in

September, the first activity in

the space since June when

Moody’s issued two tranches

totaling $1bn

Recall in June that Moody’s

(Data) issued two $500mm

senior note tranches maturing in

January 2023 and 2028

– The notes priced at 99.766

& 98.918 with 2.625% &

3.250% coupons for a yield

of 2.670% & 3.372%,

respectively

– Proceeds were used to help

fund the ~€3 billion

acquisition of Bureau van

Dijk Electronic Publishing

B.V., which Moody’s

purchased for ~22x

EBITDA

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Equifax Inc EFX 6/1/2021 $500 Sr Unsecured 2.300% Baa1 BBB+ 96.453 3.568% T + 91

Equifax Inc EFX 8/15/2021 300 Sr Unsecured 3.600% Baa1 BBB+ 99.914 3.625% T + 97






S&P Global Inc SPGI 8/14/2020 700 Sr Unsecured 3.300% Baa1 nr/na 100.236 3.182% T + 66






Moody's Corp MCO 7/15/2019 450 Sr Unsecured 2.750% nr/na BBB+ 99.886 2.855% T + 33








RELX PLC LSE:REL 1/15/2019 400 Sr Unsecured 8.625% Baa1 BBB+ 103.315 2.950% T + 43





RELX PLC LSE:REL 8/1/2027 200 Sr Unsecured 7.200% nr/na BBB+ 117.870 4.764% T + 180

Verisk Analytics Inc VRSK 1/15/2019 250 Sr Unsecured 4.875% Baa2 BBB- 101.188 2.841% T + 32





The investment grade spread and services spread indices rose for the third time in four months, 9 bps and 7 bps,

respectively

– Recall that last month both indices were flat, changing less than 1 bp each

The investment grade spread index is now up 2 bps y/y, while the services spread is lower by 12 bps y/y

14

Investment Grade – Debt Comparables

7.7 width D

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Issue Details Rating Trading Levels M/M Change

Company Ticker Maturity Amount Security Coupon Moody's S&P Price Yield Spread

Kno

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The investment grade spread and

services spread indices fell for the

fourth straight month, 6 bps and 9

bps, respectively

Recall in March, the indices

experienced monthly gains for the

first time since September 2016

Compared to this time last year, the

indices are lower by 53 and 41 bps,

respectively



15


Issuer, Ratings, Security, Amount Outstanding,

Maturity, Coupon, Price, YTW, Spread, EBITDA/Interest,

(EBITDA-CapEx) – Interest, Total Debt / EBITDA, Net

Debt / EBITDA





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The Interpublic Group of Companies IPG 3/15/2022 $250 Sr Unsecured 4.000% Baa2 BBB 100.804 3.767% T + 96

The Interpublic Group of Companies IPG 2/15/2023 500 Sr Unsecured 3.750% Baa2 BBB 99.188 3.941% T + 113

The Interpublic Group of Companies IPG 4/15/2024 500 Sr Unsecured 4.200% Baa2 BBB 100.479 4.106% T + 130

Omnicom Group Inc OMC 7/15/2019 500 Sr Unsecured 6.250% Baa1 BBB+ 103.548 2.929% T + 41

Omnicom Group Inc OMC 8/15/2020 1,000 Sr Unsecured 4.450% Baa1 BBB+ 102.828 3.095% T + 58


Omnicom Group Inc OMC 11/1/2024 750 Sr Unsecured 3.650% Baa1 BBB+ 97.452 4.107% T + 130


GATX Corp GATX 7/30/2018 $250 Sr Unsecured 2.375% Baa2 BBB 100.034 2.394% T + 29

GATX Corp GATX 3/15/2019 300 Sr Unsecured 2.500% Baa2 BBB 99.798 2.767% T + 25












Penske Truck / PTL Finance - 7/17/2018 500 Sr Unsecured 2.875% Baa2 BBB 100.041 2.436% T + 34













TTX Co - 2/1/2019 300 Sr Unsecured 2.250% Baa1 A 99.612 2.865% T + 34













Cintas Corp CTAS 6/1/2021 $250 Sr Unsecured 4.300% A3 BBB+ 102.919 3.261% T + 60

Cintas Corp CTAS 4/1/2022 650 Sr Unsecured 2.900% A3 BBB+ 97.980 3.470% T + 66


Cintas Corp CTAS 4/1/2027 1,000 Sr Unsecured 3.700% A3 BBB+ 98.744 3.869% T + 90


16


Issuer, Ratings, Security, Amount Outstanding,

Maturity, Coupon, Price, YTW, Spread, EBITDA/Interest,

(EBITDA-CapEx) – Interest, Total Debt / EBITDA, Net

Debt / EBITDA





NH

Eq.

Ren

tal

7.7 width


February 2016 – Debt Capital Markets, Bonds, High Yield

$25

$17

$7

$16

$35

$20

$27

$19

$25

$10

$22

$14 $14

$0

$5

$10

$15

$20

$25

$30

$35

$40

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

($ in billions)

Despite significant widening in high yield bond spreads on Tuesday, spreads recovered in the latter half of the week amid

news on Italy’s formation of a new populist government

High yield bond yields and spreads are now at 6.63% and 398 bps, a YTD high and surpassing the recent April 25th high of

6.61%

High yield new issue volume has been light; March, traditionally the busiest month of the year, was off 37% YoY, and May

issuance of $13.6 billion trailed last year’s figure by 46%

17

High Yield – Bond Market Update & Outlook

High Yield – Monthly Volume





350 bps

400 bps

450 bps

500 bps

5.5%

6.0%

6.5%

7.0%

1-J

an

-17

1-F

eb

-17

1-M

ar-

17

1-A

pr-

17

1-M

ay-1

7

1-J

un

-17

1-J

ul-

17

1-A

ug-1

7

1-S

ep-1

7

1-O

ct-

17

1-N

ov-1

7

1-D

ec-1

7

1-J

an

-18

1-F

eb

-18

1-M

ar-

18

1-A

pr-

18

1-M

ay-1

8

1-J

un

-18

HY Index Yield HY Index Spread

200 bps

300 bps

400 bps

500 bps

600 bps

700 bps

800 bps

900 bps

1,000 bps

1,100 bps

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

HY - CCC / Split CCC HY - Services HY - All HY - B HY - BB

403

271

448

738

417

18

High Yield – Spreads

High Yield Index Yield & Spread Weekly High Yield Issuance ($ in Billions) [1]

Sources: Bloomberg, Dealogic, S&P Capital IQ, Moody’s, SEC Filings, Thomson Reuters, Company Presentations, J.P. Morgan Markets, KBCM Estimates & Analysis


[1] Includes all High Yield Domestic Issuance, excluding split-rated new issuances and USD foreign issuers

Current:

Yield: 6.63%

Spread: 398 bps

Yield: 5.83%

Spread: 419 bps

$4.7 bn LTM

weekly

average

$0.9

$2.3

$4.7 $4.2

$2.3

$3.4

$4.3

$2.3

$3.8

$5.8

$1.1

$5.7

$11.9

$3.5

$4.6

$0.5

$2.4

$7.5

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

1-J

un

-18

25

-Ma

y-1

8

18

-Ma

y-1

8

11

-Ma

y-1

8

4-M

ay-1

8

27

-Apr-

18

20

-Apr-

18

13

-Apr-

18

6-A

pr-

18

30

-Ma

r-1

8

23

-Ma

r-1

8

16

-Ma

r-1

8

9-M

ar-

18

2-M

ar-

18

23

-Fe

b-1

8

16

-Fe

b-1

8

9-F

eb

-18

2-F

eb

-18



Offering Details Pricing & Break Details Bond Ratings

Trade

Date Issuer Ticker Maturity Structure Issue Security Amount Use of Proceeds Price Coupon Yield Spread

Break

Price Moody's S&P

3/1/2018 Garda World Security - 5/15/2025 7nc3 Add-on Senior Unsecured $125 M&A/Acquisition 105.250 8.750% 7.780% 470 n/a Caa2 CCC+

2/9/2018 Flexi-Van Leasing Inc - 2/15/2023 5nc2 2nd lien Secured 300 Refinancing 94.417 10.000% 11.500% 902 99.750 Caa1 B-

2/6/2018 Algeco Scotsman Group - 2/15/2023 5nc2 Senior Notes Secured 520 Refinancing 97.997 8.000% 8.500% 597 99.875 B2 B-

2/6/2018 Algeco Scotsman Group - 8/15/2023 5.5nc2 Senior Notes Unsecured 305 Refinancing 94.008 10.000% 11.500% 745 98.500 Caa1 CCC

1/10/2018 Aramark Corp ARMK 2/1/2028 10nc5 Senior Notes Unsecured 1,150 M&A/Acquisition 100.000 5.000% 5.000% 244 100.250 Ba3 BB

12/12/2017 Iron Mountain Inc IRM 3/15/2028 10nc5 Senior Notes Unsecured 825 M&A/Acquisition 100.000 5.250% 5.250% 285 100.625 Ba3 BB-

11/28/2017 IHS Markit Ltd INFO 3/1/2026 8ncL Senior Notes Unsecured 500 Refinancing 100.000 4.000% 4.000% 171 101.125 Ba1 BB+

11/21/2017 Williams Scotsman Inc WSC 12/15/2022 5nc2 Senior Secured Notes Secured 300 M&A/Acquisition 100.000 7.875% 7.875% 576 102.250 B2 B-

11/20/2017 H&E Equipment Services HEES 9/1/2025 8nc2.8 Add-on Senior Unsecured 200 M&A/Acquisition 104.250 5.625% 4.958% na/nm 104.750 B2 BB-

10/31/2017 Harland Clarke Corp - 8/15/2022 5nc1.4 Add-on Secured Secured 450 Refinancing 104.750 8.375% 6.733% 498 105.125 B1 BB-

10/5/2017 The Brinks Company BCO 10/15/2027 10nc5 Senior Notes Unsecured 600 Refinancing 100.000 4.625% 4.625% 228 100.375 Ba2 BB

9/8/2017 United Rentals Inc URI 10/15/2025 8nc3 Senior Notes Unsecured 750 M&A/Acquisition 100.000 4.625% 4.625% 265 101.500 Ba3 BB-

9/8/2017 United Rentals Inc URI 1/15/2028 10nc5.3 Add-on Senior Unsecured 750 M&A/Acquisition 100.250 4.875% 4.844% 281 101.125 Ba3 BB-

9/6/2017 Iron Mountain Inc IRM 9/15/2027 10nc5 Senior Notes Unsecured 1,000 Refinancing 100.000 4.875% 4.875% 277 100.500 Ba3 BB-

8/17/2017 H&E Equipment Services HEES 9/1/2025 8nc3 Senior Notes Unsecured 750 Refinancing 100.000 5.625% 5.625% 351 101.500 B2 BB-

8/2/2017 Ashtead Group Plc LSE:AHT 8/15/2025 8nc3 2nd lien Secured 600 Refinancing 100.000 4.125% 4.125% 196 100.375 Ba2 BBB-

8/2/2017 Ashtead Group Plc LSE:AHT 8/15/2027 10nc5 2nd lien Secured 600 Refinancing 100.000 4.375% 4.375% 212 100.625 Ba2 BBB-

7/28/2017 United Rentals Inc URI 1/15/2028 10nc5.5 Senior Notes Unsecured 925 Refinancing 100.000 4.875% 4.875% 258 100.125 Ba3 BB-

7/10/2017 IHS Markit Ltd INFO 2/15/2025 7ncL Add-on Senior Unsecured 300 Corp Purpose 105.500 4.750% 3.882% 165 106.000 Ba1 BB+

5/22/2017 KAR Auction Services Inc KAR 6/1/2025 8nc3 Senior Notes Unsecured 950 Refinancing 100.000 5.125% 5.125% 297 101.000 B3 B

5/10/2017 Cloud Crane - 8/1/2024 7nc2 Add-on 2nd Lien Secured 75 M&A/Acquisition 106.750 10.125% 8.483% 655 108.000 B3 B

4/27/2017 Garda World Security - 5/15/2025 8nc3 Senior Notes Unsecured 500 Recap/General Recap 99.278 8.750% 8.875% 667 101.250 Caa2 CCC+

4/20/2017 Booz Allen Hamilton Inc BAH 5/1/2025 8nc3 Senior Notes Unsecured 350 Refinancing 100.000 5.125% 5.125% 298 101.000 B1 B+

3/16/2017 Gartner Inc IT 4/1/2025 8nc3 Senior Notes Unsecured 800 M&A/Acquisition 100.000 5.125% 5.125% 267 100.000 B1 BB-

3/9/2017 Aramark Corp ARMK 4/1/2025 8nc3 Senior Notes Unsecured 600 Refinancing 100.000 5.000% 5.000% 251 100.250 Ba3 BB+

19

High Yield – Recent Bond Issuance

- Copy and paste from File – width to 7.7

- Box should be same height as linked

file

- Align top with box

The HY business services market was quiet again, with no issuers coming to market for the second straight month. Recall that

March had one issuer place HY debt (shown below), while February and January had two and one, respectively

– Garda World Security (Facility) placed add-on notes expected to fund acquisitions. Terms: $125mm, unsecured, 7nc3,

8.750%, Caa2 / CCC+, issued at 105.250 for a yield of 7.780%

The HY business services market has now issued ~$11bn in bonds over the past 12 months, with an average tranche size of

more than $500mm



Located in Gallo Team Folder –

located there so can access from

Bloomberg terminal to update comps

KC

A

/M

HE

N

H

F

P

O

A

DC

Ritchie Bros. Auctioneers completed a senior notes

offering. Proceeds will help fund the $750mm+ acquisition

of IronPlanet

– Terms: $500mm, 8nc3, 5.375% yield, B2 / BB-

Carlson Wagonlit issued three tranches, two of which were

dollar-denominated. Proceeds will be used to refinance

outstanding notes

– Terms, Senior Secured Notes: $415mm, 7nc3, 6.750%

yield, B2 / B

– Terms, Senior Notes: $250mm, 8nc3, 9.500% yield,

Caa1 / CCC+

F

DC

K

C

F

A

HE

The HY business services market continued its

strong momentum, experiencing its 15th straight

month with activity

Including this month’s two tranches of debt, the

HY business services market has now issued

over $11bn in bonds over the past 12 months,

with an average tranche size of more than

$500mm

– KAR Auction Services (Auction) completed

a senior note offering earmarked to back a

refinancing of existing debt and general

corporate purposes. The deal was upsized

by $150mm from an original offer of

$800mm. Terms: $950mm, 8nc3, 5.125%,

B3 / B, issued at 100.000 for a yield of

5.125%

– Cloud Crane issued an add-on second lien

note to fund the acquisition of Coast

Crane, which was announced on April 21st,

for a purchase price of $72.5mm. Terms:

$75mm, 7nc2, 10.125%, B3 / B, issued at

106.750 for a yield of 8.483%

DC

H

E

HE

H

E

HE

O

H

E

HE

O

O

D

C

HE

H

E

The HYBS market has issued over $14bn in bonds over the

past 12 months, with an average tranche size of ~$600mm

O

F

HE

H

E

HE

2017 saw ~$14.3bn in HY business services bonds

price vs. ~$10.5bn in 2016, equaling a mid-30%

increase in volume, excluding an outsized $3.1bn

Prime Security Services second lien note issued in

2016. Including the Prime Security note, issuance

volume was still up mid-single digits

F



Ahern Rentals Inc - 5/15/2023 $550 2nd lien 7.375% B3 B- 99.268 7.554% T + 474 5/15/2023

Algeco Scotsman Group - 2/15/2023 520 Secured 8.000% B2 B- 101.686 7.462% T + 465 2/15/2022

Algeco Scotsman Group - 8/15/2023 305 Subordinated 10.000% Caa1 CCC 100.991 9.665% T + 685 2/15/2022

Ashtead Capital Inc LSE:AHT 10/1/2024 500 2nd lien 5.625% Ba2 BBB- 103.457 4.726% T + 192 10/1/2022



BlueLine Rental - 3/15/2024 1,100 2nd lien 9.250% Caa1 B 107.199 7.032% T + 422 3/15/2022

Cloud Crane LLC - 8/1/2024 545 2nd lien 10.125% B3 B 109.244 7.481% T + 467 8/1/2022

Direct ChassisLink Inc - 6/15/2023 325 2nd lien 10.000% B3 BB- 107.268 7.228% T + 471 6/15/2020

Flexi-Van Leasing Inc - 2/15/2023 300 2nd lien 10.000% Caa1 B- 95.446 11.270% T + 846 2/15/2023

H&E Equipment Services Inc HEES 9/1/2025 950 Sr Unsecured 5.625% B2 BB- 100.044 5.613% T + 280 9/1/2023

Herc Rentals Inc HRI 6/1/2022 488 2nd lien 7.500% B3 B+ 106.609 4.302% T + 178 6/1/2019

Herc Rentals Inc HRI 6/1/2024 500 2nd lien 7.750% B3 B+ 108.042 5.074% T + 255 6/1/2019

Mobile Mini Inc MINI 7/1/2024 250 Sr Unsecured 5.875% B2 BB- 102.857 5.085% T + 227 7/1/2022

NCSG Crane & Heavy Haul Services - 8/15/2019 305 2nd lien 9.500% nr/na D 56.120 76.544% T + 7402 8/15/2019

NESCO LLC - 2/15/2021 525 2nd lien 6.875% Caa3 CCC- 96.638 8.294% T + 564 2/15/2021

United Rentals Inc URI 7/15/2023 1,000 2nd lien 4.625% Ba1 BBB- 101.269 4.182% T + 152 7/15/2021

United Rentals Inc URI 11/15/2024 850 Sr Unsecured 5.750% Ba3 BB 103.505 4.760% T + 195 5/15/2022

Acosta Inc - 10/1/2022 $800 Sr Unsecured 7.750% Caa3 CCC- 60.362 22.609% T + 1980 10/1/2022

Affinion Group Inc - 11/10/2022 637 Sr Unsecured 12.500% Caa3 CCC- 89.945 17.729% T + 1492 11/10/2022

Alliance Data Systems Corp ADS 11/1/2021 500 Sr Unsecured 5.875% nr/na nr/na 102.066 4.945% T + 242 11/1/2020



MDC Partners Inc MDCA 5/1/2024 900 Sr Unsecured 6.500% B3 B 88.663 9.021% T + 621 5/1/2024

National CineMedia LLC NCMI 4/15/2022 400 1st lien 6.000% Ba3 B+ 102.029 4.687% T + 217 4/15/2019

National CineMedia LLC NCMI 8/15/2026 250 Sr Unsecured 5.750% B3 B- 92.167 7.024% T + 406 8/15/2026

Booz Allen Hamilton Inc BAH 5/1/2025 $350 Sr Unsecured 5.125% B1 B+ 98.498 5.388% T + 242 5/1/2025

FTI Consulting Inc FCN 11/15/2022 300 Sr Unsecured 6.000% Ba3 BB+ 102.802 3.996% T + 170 11/15/2018

Clarivate Analytics - 10/15/2024 $500 Sr Unsecured 7.875% Caa2 B- 101.970 7.197% T + 454 10/15/2021

Gartner Inc IT 4/1/2025 800 Sr Unsecured 5.125% B1 BB- 99.837 5.152% T + 219 4/1/2025

IHS Markit Ltd INFO 11/1/2022 743 Sr Unsecured 5.000% Ba1 BBB- 102.867 4.238% T + 143 8/1/2022



Nielsen Holdings NLSN 10/1/2020 797 Sr Unsecured 4.500% B1 BB+ 100.288 3.517% T + 122 10/1/2018


Nielsen Holdings NLSN 4/15/2022 2,300 Sr Unsecured 5.000% B1 BB+ 99.127 5.252% T + 244 4/15/2022


The Dun & Bradstreet Corp DNB 6/15/2020 300 Sr Unsecured 4.250% nr/na BB+ 100.447 4.008% T + 149 5/15/2020

The Dun & Bradstreet Corp DNB 12/1/2022 300 Sr Unsecured 4.625% nr/na BB+ 101.046 4.352% T + 154 9/1/2022

The high yield market and services spreads both jumped last month, with the services sector up 32 bps while the overall

market increased 16 bps

– This marks the third time this year were both indices increased concurrently, after happening only three times in 2017

Notable rating action:

– Pitney Bowes’ (Other) corporate credit rating and unsecured notes were downgraded at S&P to BB+ from BBB, with a

negative outlook. Per S&P, “The downgrade reflects Pitney Bowes' elevated adjusted leverage, at 3.6x as of March 31,

2018, due to the continued transition of its business to the growing e-commerce markets and the ongoing declines in its

traditional SMB mail business”

20

High Yield – Debt Comparables




Company Ticker Maturity Amount Security Coupon Moody's S&P Price Yield Spread YTW Date

Change Bloomberg Master –

HY rows to 15 on first page, 16

on second

Kno

w.


– Affinion Group

(Advertising /

Marketing) senior

unsecured notes

downgraded at S&P

to C from CCC-,

after the company

announced its intent

to exchange current

debt for a new PIK

toggle facility

The high yield market and services

spreads both increased this month, with

the high yield market spread having its

worst month since June 2016,

increasing 25 bps vs. an increase of 1

bp for the overall high yield market

Year over year, the high yield market is

lagging the services sector, having

fallen 228 bps vs. 266 bps, respectively


– Flexi-Van Leasing (Heavy) was

downgraded at S&P since the

company “has not been able to

refinance its $275mm ABL credit

facility.” The corporate credit rating

was downgraded from B to CCC

and the unsecured rating from B- to

CCC-

Dat

a-B

ased

Con

sulti

ng

Adv

ertis

ing

/ Mar

ketin

g H

eavy

Equ

ipm

ent R

enta

l

Year over year, the services sector

has fallen behind the overall high

yield market, tightening 33 bps vs.

46 bps, respectively

The high yield market and

services spreads both last

month, with the services

sector adding 23 bps while

the overall market added 21

bps. The 21 bps

experienced by the overall

market index was the largest

increase since a 26 bps

increase in August 2017

– Recall that in February,

the high yield market

spread was up 29 bps,

its worst month since

June 2016


– RR Donnelley & Sons

(Printing) corporate

credit rating and

unsecured notes were

downgraded at Moody’s

to B2 and B3 from B1

and B2, respectively.

Per Moody’s, “We

downgraded RR

Donnelley because

Moody's adjusted

leverage is elevated, at

4.7x, and we do not

expect significant

improvement in

operating results or

credit metrics over the

next two years that

could fuel material de-

levering”



The Brink's Company BCO 10/15/2027 $600 Sr Unsecured 4.625% Ba2 BB 93.486 5.526% T + 256 10/15/2027

Carlson Travel Inc - 12/15/2023 415 Secured 6.750% B2 B 99.159 6.936% T + 413 12/15/2023

Carlson Travel Inc - 12/15/2024 250 Sr Unsecured 9.500% Caa1 CCC+ 92.073 11.249% T + 844 12/15/2024

Corporate Risk Holdings LLC - 7/1/2019 744 1st lien 9.500% nr/na B- 105.428 n/a n/a 7/2/2018

Harland Clarke Holdings Corp - 3/1/2020 275 1st lien 6.875% B1 BB- 100.991 5.441% T + 292 3/1/2019

Harland Clarke Holdings Corp - 3/1/2021 715 Sr Unsecured 9.250% Caa1 B- 99.887 9.287% T + 663 3/1/2021

Harland Clarke Holdings Corp - 8/15/2022 800 1st lien 8.375% B1 BB- 100.081 8.332% T + 567 2/15/2021

Iron Mountain Inc IRM 6/1/2021 500 Sr Unsecured 4.375% Ba3 BB- 100.761 3.969% T + 145 6/1/2020


Iron Mountain Inc IRM 8/15/2024 1,000 Sr Subordinated 5.750% B2 B 99.078 5.929% T + 312 8/15/2024


Iron Mountain Inc IRM 9/15/2027 1,000 Sr Unsecured 4.875% Ba3 BB- 92.348 5.961% T + 299 9/15/2027


Pitney Bowes Inc PBI 3/15/2019 300 Sr Unsecured 6.250% Ba1 BB+ 102.340 3.107% T + 59 3/15/2019






Sabre Holdings SABR 4/15/2023 530 1st lien 5.375% Ba2 BB 101.471 4.813% T + 215 4/15/2021

Sabre Holdings SABR 11/15/2023 500 1st lien 5.250% Ba2 BB 101.103 4.895% T + 224 11/15/2021

KAR Auction Services Inc KAR 6/1/2025 $950 Sr Unsecured 5.125% B3 B 96.521 5.737% T + 277 6/1/2025

Ritchie Bros Auctioneers Inc RBA 1/15/2025 500 Sr Unsecured 5.375% B2 BB- 97.995 5.743% T + 278 1/15/2025

Cimpress NV CMPR 4/1/2022 $275 Sr Unsecured 7.000% B1 B+ 105.483 1.934% n/a 6/28/2018

LSC Communications Inc LKSD 10/15/2023 450 1st lien 8.750% B1 B 100.524 8.597% T + 579 10/15/2022

Quad/Graphics Inc QUAD 5/1/2022 243 Sr Unsecured 7.000% B2 B 101.287 6.616% T + 381 5/1/2022

RR Donnelley & Sons Co RRD 6/15/2020 238 Sr Unsecured 7.625% B3 B 103.977 5.508% T + 299 6/15/2020






Aramark Services Inc ARMK 1/15/2024 $900 Sr Unsecured 5.125% Ba3 BB 101.681 4.611% T + 180 1/15/2022

Aramark Services Inc ARMK 4/1/2025 600 Sr Unsecured 5.000% Ba3 BB 100.972 4.770% T + 196 4/1/2023

Aramark Services Inc ARMK 6/1/2026 500 Sr Unsecured 4.750% Ba3 BB 97.686 5.107% T + 214 6/1/2026

Aramark Services Inc ARMK 2/1/2028 1,150 Sr Unsecured 5.000% Ba3 BB 97.464 5.339% T + 237 2/1/2028

Garda World Security Corp - 11/15/2021 147 Sr Unsecured 7.250% Caa2 CCC+ 101.500 6.132% T + 361 11/15/2019



Monitronics International Inc - 4/1/2020 585 Sr Unsecured 9.125% Caa2 CCC 70.907 31.373% T + 2885 4/1/2020

Prime Security Services - 5/15/2023 2,546 2nd lien 9.250% B3 B- 106.433 6.772% T + 425 5/15/2020

ServiceMaster Global Holdings SERV 11/15/2024 750 Sr Unsecured 5.125% B1 BB- 97.633 5.567% T + 276 11/15/2024

ServiceMaster Global Holdings SERV 8/15/2027 195 Sr Unsecured 7.450% B2 B 107.074 6.416% T + 345 8/15/2027

ServiceMaster Global Holdings SERV 3/1/2038 83 Sr Unsecured 7.250% B2 B 100.029 7.246% T + 414 3/1/2038



United Rentals Inc URI 9/15/2026 1,000 Sr Unsecured 5.875% Ba3 BB 103.204 5.266% T + 245 9/15/2024



Williams Scotsman International Inc WSC 12/15/2022 300 Secured 7.875% B2 B+ 104.887 6.301% T + 364 12/15/2021

21

High Yield – Debt Comparables




Company Ticker Maturity Amount Security Coupon Moody's S&P Price Yield Spread YTW Date

Auc

. P

rintin

g S

ervi

ces

Fac

ility

Ser

vice

s H

e. E

q. (

Con

t.)

Div

ersi

fied

/ Oth

er


February 2016 – Equity Capital Markets

(6%)

(4%)

(2%)

0%

2%

4%

6%

8%

10%

12%

14%

16%

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

1 Day

1 Week

1 Month

(5%)

0%

5%

10%

15%

20%

25%


Renaissance IPO Index

Russell 2000 Index

S&P 500

-

$5.0

$10.0

$15.0

$20.0

$25.0


Prior Period

Current Period

2-Year Av g. Monthly Volume

FO Pricings by Month 48 38 5143 52446445 64335853

-

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0


Prior Period

Current Period

2-Year Av g. Monthly Volume

IPO Pricings by Month 16 9 82 1371812 161078

22

Equity Capital Markets – Update & Outlook

Major U.S. Indices have retreated from record highs

– While the recent correction has been steep, most S&P 500 sectors remain positive over the last 12 months

– After several years of low volatility, the VIX recently spiked to multi-year highs

Corporate profits remain robust and outperform estimates

– S&P 500 earnings continue to outperform estimates

The political environment could impact the market

– Investors remain concerned over Federal Reserve interest rate increases and international trade tensions

LTM Initial Public Offerings ($BN) LTM Follow-On Offerings ($BN)

Relative IPO Aftermarket Performance LTM Aftermarket Follow-On Performance





(60%)

(50%)

(40%)

(30%)

(20%)

(10%)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

Facility Services

Heavy Equipment

Rental

Printing Services

Diversified / Other S&P 500


Knowledge-Based

Consulting

Non-Heavy Equipment

Rental

Auction Services

Advertising / MarketingKBBS Index

3 Year

1 Month

93.1%

4.3%

44.6%

3.3%

83.5%

8.8%

45.5%

(1.2%)

45.3%

7.8%

43.1%

(3.2%)

41.2%

2.5%

31.9%

3.3%

28.4%

2.2%

10.8%

(4.6%)

(27.3%)

3.5%

1 Year

6 Month

35.6% 29.4% 35.1% 1.2% 61.0% (3.7%) 20.0% 19.3% 12.2% 6.7% (4.2%)

20.1% 13.3% 12.2% (11.4%) 10.1% (12.9%) 3.6% 4.8% 2.2% (7.0%) 2.9%

Returns

The KeyBanc Business Services (“KBBS”) Index and S&P 500 both continued to climb last month after gaining in April

Overall, six of the nine tracked subsectors posted gains for the month. Non-Heavy Equipment Rental had the largest monthly

gain at 8.8%, while Heavy Equipment Rental was runner-up with a 7.8% monthly gain

Notable stats:

– The KBBS Index was up 2.5% m/m and is up 20.0% y/y vs. an S&P 500 gain of 2.2% and 12.2%, respectively

– EV / EBITDA valuations drifted higher in May, with five subsectors posting gains for the month and five trading above their

LTM averages. Although the majority of subsectors posted a gain, the average LTM premium stayed at 1%, which

matched April and is slightly below the 2% premium seen in March

23

Equity Capital Markets – Business Services Subsector Update

Subsector Indices vs. S&P 500 (Three Year Candlestick Chart as of 5/31/2018)

Update date in title

Resize graphs to

width of 8.2



[1] Monthly return boxes in the candlestick chart and data in the table may not match due to rebalancing

The graphic below displays the 3 year high and low total return range for each sub-segment, shown by the vertical line.

The graphic also shows the monthly return for each sub-segment, shown by the boxes.

A green box indicates a positive monthly return while a red box indicates a negative return; the size of the box indicates the magnitude of the return.

The table below the graphic shows the rebalanced 3 year, 1 year, 6 month, and 1 month sub-segment return data.[1]

– After seeing HER post the

largest gain the past three

months, Facility Services

decided to claim the top spot,

posting a 7.0% m/m advance.

The strong showing was

attributable to SP Plus

Corporation exceeding earnings

expectations, posting quarterly

revenue and EBITDA of $219.5

and $27.3, versus expectations

of $218.0 and $24.5,

respectively

– EV / EBITDA valuations

drifted lower in April, with

eight subsectors posting

gains for the month, and six

trading above their LTM

averages. Consequently,

the average LTM premium

jumped to 8%, vs. February

and January’s premiums of

6% and 7%, respectively

Recall that two companies

were delisted in March

following their acquisition by

another public company

followed in this newsletter

– CEB Inc. (Knowledge-

Based Consulting) was

acquired by Gartner, Inc.

(Data-Based Consulting)

– G&K Services, Inc. (Non-

Heavy Equipment

Rental) was acquired by

Cintas Corporation (Non-

Heavy Equipment

Rental)

The KeyBanc Business Services (“KBBS”) Index retreated from last month’s three year high, posting a slight drop. However, the

S&P 500 posted a gain for the month while finishing near a three year high again

Overall, four of the nine tracked subsectors posted gains. Advertising / Marketing posted the largest monthly gain, a spike of

10.7%, while Knowledge-Based Consulting was the tough-luck runner-up, posting an equally impressive 9.0% climb.

Uncharacteristically, Data-Based Consulting was the month’s laggard, with a gain of just 1.1%. Excluding the 25% drop from the

Equifax scandal, the sector would have posted gains of ~4%

Notable stats:

– The KBBS Index was up 6.1% m/m and is now up 20.4% y/y vs. an S&P 500 gain of 1.9% and 16.2%, respectively

– EV / EBITDA valuations drifted higher in September, with all nine subsectors posting gains for the month and eight

trading above their LTM averages. Consequently, the average LTM premium climbed to 9%, vs. August and July’s 7% and

6%, respectively

Facility Services was the month’s

laggard, with a loss of 1.4%.

ABM was the subsector’s largest

drag, dropping more than 12%

during the month due to missed

earnings and lower than

expected guidance

– Overall, the average LTM

premium narrowed to 1%, down

from 2% in March and 3% in

February



0.5x

1.5x

2.5x

3.5x

4.5x

5.5x

6.5x

Heavy Equipment

Rental KBBS Index

Knowledge-Based

Consulting

Non-Heavy Equipment

RentalDiversified /

OtherS&P 500Advertising / Marketing


Auction Services

Printing Services

Facility Services

3 Years Ago

Current

1 Year Ago

6 Months Ago

Indicates 1 Year Average

1.3x

1.4x

1.3x

1.4x

1.3x

1.2x

1.2x

1.3x

2.1x

2.5x

2.4x

2.5x

1.5x

1.7x

1.7x

1.8x

1.9x

2.6x

2.2x

2.6x

1.7x

2.6x

2.4x

2.6x

2.7x

3.0x

2.8x

3.0x

3.3x

2.7x

2.7x

2.7x

4.4x

4.5x

3.9x

4.5x

4.2x

5.6x

5.0x

5.3x

4.5x

5.1x

4.5x

5.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

18.0x

20.0x


Non-Heavy Equipment

Rental

Heavy Equipment

Rental

Knowledge-Based

ConsultingAdvertising / Marketing

Diversified / OtherKBBS Index

Facility Services

Auction Services

Printing ServicesS&P 500

3 Years Ago

Current

1 Year Ago

6 Months Ago

Indicates 1 Year Average

8.9x

10.1x

9.3x

10.6x

8.1x

9.0x

8.8x

10.9x

10.5x

10.9x

10.2x

10.9x

12.7x

10.8x

10.9x

10.7x

9.8x

12.6x

10.7x

12.1x

10.7x

12.6x

12.2x

12.7x

10.3x

14.2x

12.1x

14.3x

11.2x

13.1x

12.0x

13.2x

14.6x

15.9x

13.7x

15.4x

13.0x

17.2x

15.4x

16.1x

13.1x

16.8x

16.8x

17.6x

24

Relative Valuation – LTM EV / EBITDA (Three Year Candlestick Chart as of 5/31/2018)

Relative Valuation – LTM EV / Revenue (Three Year Candlestick Chart as of 5/31/2018)




The graphics below display the 3 year high and low range for each sub-segment’s valuation metric, shown by the vertical line.

The graphics also show the monthly movement for each valuation metric, shown by the box.

A green box indicates a positive monthly movement while a red box indicates a negative movement; the size of the box indicates the magnitude of the movement.

The tables below the graphics display what the valuation metrics were 3 years ago, 1 year ago, and 6 months ago, in addition to the current value.




3/8/2018 Emerald Expositions Events Inc EEX Follow-On $18.50 $111.0 5.6x 13.0x $20.45 5.8x 13.6x

3/5/2018 TransUnion TRU Follow-On $57.80 1,150.0 6.7x 18.1x $68.60 7.4x 20.4x

12/12/2017 Iron Mountain Inc IRM Follow-On $37.00 537.0 4.4x 13.4x $33.29 4.4x 13.1x

10/30/2017 TransUnion TRU Follow-On $52.35 394.0 6.3x 17.0x $68.60 7.4x 20.4x

9/7/2017 Triton International Ltd TRTN Follow-On $32.75 201.0 8.7x 10.3x $34.81 7.7x 8.1x

7/31/2017 TransUnion TRU Follow-On $45.83 1,186.0 5.9x 16.1x $68.60 7.4x 20.4x

6/22/2017 SP Plus Corp SP Follow-On $28.85 39.0 0.9x 8.6x $36.00 1.0x 9.0x

5/10/2017 SP Plus Corp SP Follow-On $30.00 108.0 0.9x 8.6x $36.00 1.0x 9.0x

4/27/2017 Emerald Expositions Events Inc EEX IPO $17.00 303.0 5.9x 13.0x $20.45 5.8x 13.6x


3/22/2017 LSC Communications Inc LKSD Follow-On $20.25 145.4 0.4x 3.9x $12.66 0.3x 7.1x


12/1/2016 Booz Allen Hamilton Holding Corp BAH Follow-On $36.75 612.3 1.2x 13.2x $45.09 1.3x 13.8x





2/25/2016 Sabre Corp SABR Follow-On $27.35 547.0 3.6x 12.1x $24.51 2.7x 10.3x

11/6/2015 ServiceMaster Global Holdings Inc SERV Follow-On $34.00 984.7 2.8x 12.1x $57.14 3.4x 15.0x



8/18/2015 Aramark ARMK Follow-On $32.45 729.1 0.9x 11.7x $38.82 1.1x 13.8x


6/24/2015 TransUnion TRU IPO $22.50 764.5 5.6x 18.5x $68.60 7.4x 20.4x

6/19/2015 West Corp WSTC Follow-On $30.75 215.3 2.7x 9.3x na/nm na/nm na/nm

Offering Details Valuation at Offer Date As of 5/31/2018

Offer Date Issuer Ticker Type

Offer

Price

Deal Value

($mm)

EV /

Revenue

EV /

EBITDA

Share

Price

EV /

Revenue

EV /

EBITDA

Equity Capital Markets – Recent Issuance

Copy and paste from


Box should be same

height as linked file

Align top with box

25



KC

A

/M

HE

N

H

F

P

O

A

DC

The business services equity market did not have any issuers come to market in May, mirroring last month. Recall in March:

– Emerald Expositions (Other) came to market to issue a $111mm follow-on at $18.50. All net proceeds went to selling

shareholders. As of May 31st, the shares were trading up at $20.45

– TransUnion (Data) returned to market to issue a $1,150mm follow-on at $57.80. All net proceeds went to selling

shareholders. As of May 31st, the shares were up at $68.60

DC

K

C

DC

O

F

K

C

O

F

O

DC

O

D

C

KC

P

D

C

O

DC

Emerald IPO –

issued below 18-

20 range.

33.33% of shares

sold by

stockholders

F

F

DC

The business services

equity market had one

issuer come to market in

July, following one issuer in

both June and May

– TransUnion returned to

market to issue a

$1,185mm follow-on at

$45.83. As of July 31st,

the shares were up to

$30.55. All net

proceeds went to

selling shareholders

– Last month, SP Plus

returned to market to

issue a $39mm follow-

on at $28.85. All net

proceeds went to

selling shareholders

Recall that three months

ago, Emerald Expositions

issued a $303mm IPO at

$17.00, which was the first

business services company

to go public since

TransUnion in June 2015.

As of July 31st, the shares

were trading up at $22.89

HE

D

C

O

DC

O

The business services equity market had two

issuers come to market in March, following

none in February or January

– Proceeds went to help finance the

acquisition of IO Data Centers for

~$1.4bn. As of February 28th, the shares

were trading down at $31.46


February 2016 – Company Statistics

S&P Global Inc. SPGI $197.50 97.4% $49,631.8 $52,856.8 $6,177.0 $2,988.0 48.4% 17.7x 16.3x 71.8% 45.4% 23.4%

Moody's Corporation MCO 170.57 97.1% 32,732.4 37,082.5 4,355.6 2,051.7 47.1% 18.1x 16.1x 71.0% 43.1% 23.9%

IHS Markit Ltd. * INFO 49.28 93.7% 19,284.5 23,416.8 3,687.6 1,161.9 31.5% 20.2x 15.1x 62.8% 17.9% 30.3%

Verisk Analytics, Inc. VRSK 106.24 97.2% 17,557.1 20,185.5 2,223.8 1,011.2 45.5% 20.0x 17.4x 63.0% 36.6% 15.0%

Nielsen Holdings plc NLSN 30.17 69.2% 10,747.3 19,131.3 6,656.0 1,993.0 29.9% 9.6x 9.1x 57.6% 19.5% 28.2%

Equifax Inc. EFX 113.96 77.5% 13,707.6 16,148.6 3,395.7 1,048.0 30.9% 15.4x 13.4x 63.1% 22.1% 32.3%

TransUnion * TRU 68.60 98.4% 12,622.4 14,964.9 2,016.2 735.2 36.5% 20.4x 17.1x 66.4% 24.2% 30.0%

Gartner, Inc. * IT 132.74 93.4% 12,111.2 14,897.0 3,649.9 417.7 11.4% 35.7x 19.7x 60.6% 3.7% 48.8%

The Dun & Bradstreet Corporation DNB 122.81 93.8% 4,554.4 5,713.3 1,779.2 520.3 29.2% 11.0x 10.8x 67.9% 26.1% 37.2%

Morningstar, Inc. MORN 120.01 99.3% 5,102.5 4,897.1 945.7 255.0 27.0% 19.2x na/nm 58.5% 20.4% 28.8%

Forrester Research, Inc. FORR 42.25 88.5% 759.8 623.5 338.2 29.9 8.8% 20.9x 13.4x 58.7% 6.5% 49.9%

The Hackett Group, Inc. HCKT 16.10 83.7% 473.5 468.8 265.7 41.4 15.6% 11.3x 9.1x 38.4% 13.8% 24.6%

Median 93.7% 30.4% 18.6x 15.1x 62.9% 21.3% 29.4%

Of the business services companies that have reported CY Q1 earnings, 88% saw an increase in LTM revenue q/q, while

68% saw an increase in LTM EBITDA

26





Bold indicates KBCM equity research coverage

* Excluded from “EV/Revenue”, “EV/EBITDA”, and “Subsector Indices vs. S&P 500” charts and tables

Knowledge-Based Consulting

Of the business services

companies that have

reported CY Q3 earnings,

80% saw an increase in

LTM revenue q/q, while 80%

saw an increase in LTM

EBITDA for the same period

LTM EV as a multiple of As % of Revenue

Company Name Ticker

% of 52

Week High

Market

Cap.

Enterprise

Value Revenue EBITDA % Margin

LTM

EBITDA

NTM

EBITDA

Gross

Profit

Operating

Income SG&A

Share

price

5/31/18

Accenture plc ACN $155.74 94.1% $100,154.4 $97,340.5 $37,125.7 $6,030.7 16.2% 16.1x 14.1x 31.5% 14.7% 16.9%

Booz Allen Hamilton Holding Corporation BAH 45.09 99.4% 6,464.5 8,075.4 6,171.9 584.8 9.5% 13.8x 12.9x 23.4% 8.4% 13.9%

Korn/Ferry International KFY 54.68 97.3% 3,090.8 2,943.5 1,697.9 239.9 14.1% 12.3x 10.5x 27.3% 10.6% 13.9%

FTI Consulting, Inc. FCN 61.99 97.5% 2,283.5 2,573.0 1,859.2 220.9 11.9% 11.6x 13.4x 34.0% 10.1% 23.4%

ICF International, Inc. ICFI 70.65 98.2% 1,328.7 1,540.9 1,235.6 113.1 9.2% 13.6x 12.3x 37.1% 6.9% 28.0%

CBIZ, Inc. CBZ 20.65 98.0% 1,120.4 1,337.6 880.0 101.0 11.5% 13.2x 11.8x 12.8% 8.8% 3.9%

Navigant Consulting, Inc. NCI 24.36 97.6% 1,100.8 1,278.5 947.3 123.4 13.0% 10.4x 9.8x 30.9% 9.2% 17.8%

Huron Consulting Group Inc. HURN 40.50 90.3% 870.4 1,242.5 737.4 90.1 12.2% 13.8x 12.4x 36.0% 5.8% 23.8%

Heidrick & Struggles International, Inc. HSII 37.80 95.1% 715.3 653.9 641.5 61.5 9.6% 10.6x 9.1x 30.1% 7.4% 22.7%

Resources Connection, Inc. RECN 16.65 97.9% 524.7 544.5 619.0 63.6 10.3% 8.6x 10.6x 40.3% 9.4% 30.0%

CRA International, Inc. * CRAI 54.10 92.1% 437.1 436.6 381.4 26.8 7.0% 16.3x na/nm 30.3% 4.6% 23.2%

Franklin Covey Co. FC 28.05 89.9% 389.8 427.0 197.8 6.6 3.3% na/nm 24.5x 69.3% (1.4%) 66.0%

GP Strategies Corporation GPX 19.25 61.6% 317.5 369.3 511.8 28.7 5.6% 12.9x 9.9x 15.7% 4.2% 11.5%

Information Services Group, Inc. III 4.03 87.0% 178.7 259.8 271.9 23.7 8.7% 11.0x 6.8x 41.5% 4.4% 32.8%

Collectors Universe Inc. CLCT 14.90 48.3% 134.3 128.2 69.3 10.0 14.4% 12.9x na/nm 58.7% 12.4% 46.3%

Median 95.1% 10.3% 12.9x 11.8x 31.5% 8.4% 23.2%



27






Cintas Corporation CTAS $182.25 98.9% $19,449.9 $21,985.9 $6,337.4 $1,262.0 19.9% 17.4x 15.8x 44.7% 15.7% 29.1%

UniFirst Corporation UNF 177.60 99.2% 3,397.8 3,010.1 1,648.5 275.9 16.7% 10.9x 10.9x 37.8% 11.1% 21.2%

Median 99.0% 18.3% 14.2x 13.4x 41.3% 13.4% 25.1%

Non-Heavy Equipment Rental


Company Name Ticker

% of 52

Week High

Market

Cap.

Enterprise


LTM

EBITDA

NTM

EBITDA

Gross

Profit

Operating

Income SG&A

Share

price

5/31/18

Advertising / Marketing

Alliance Data Systems Corporation ADS $210.82 75.7% $11,679.4 $32,825.6 $7,724.6 $2,165.0 28.0% 15.2x 14.7x 24.7% 17.5% na/nm

Omnicom Group Inc. OMC 72.08 84.4% 16,383.0 19,535.7 15,315.8 2,344.5 15.3% 8.3x 7.7x 18.2% 13.5% 2.9%

The Interpublic Group of Companies, Inc. IPG 22.60 86.9% 8,712.7 10,483.8 7,987.7 1,139.8 14.3% 9.2x 8.2x 35.4% 12.2% 23.0%

Clear Channel Outdoor Holdings, Inc. CCO 4.35 75.7% 1,572.6 6,848.8 2,645.3 555.3 21.0% 12.3x 11.6x 45.8% 8.4% 24.8%

National CineMedia, Inc. NCMI 7.41 89.2% 585.3 1,751.8 434.4 191.9 44.2% 9.1x 8.5x 71.0% 36.9% 25.4%

MDC Partners Inc. * MDCA 4.15 33.9% 248.2 1,357.6 1,496.0 148.5 9.9% 9.1x 6.2x 31.2% 7.5% 20.8%

Harte Hanks, Inc. * HHS 10.89 75.6% 68.1 55.0 370.2 4.8 1.3% 11.4x na/nm 11.7% (1.4%) 10.4%

Median 75.7% 15.3% 9.2x 8.3x 31.2% 12.2% 21.9%

Heavy Equipment Rental

United Rentals, Inc. URI $159.57 83.7% $13,339.5 $22,199.5 $7,019.0 $3,256.6 46.4% 6.8x 5.9x 42.7% 25.5% 13.4%

Triton International Limited * TRTN 34.81 79.4% 2,814.6 9,757.7 1,259.7 1,207.4 95.8% 8.1x 7.7x 95.9% 48.3% 6.9%

GATX Corporation GATX 71.90 94.3% 2,710.6 6,853.6 1,366.1 643.7 47.1% 10.6x 10.6x 61.8% 23.0% 13.4%

Textainer Group Holdings Limited TGH 16.95 64.0% 967.8 4,016.6 507.4 392.1 77.3% 10.2x 8.7x 86.3% 33.0% 7.6%

Herc Holdings Inc. * HRI 54.65 74.9% 1,553.3 3,700.9 1,796.4 604.8 33.7% 6.1x 5.6x 25.0% 7.5% 17.5%

Mobile Mini, Inc. MINI 45.60 94.9% 2,034.5 2,948.3 550.7 184.9 33.6% 15.9x 13.6x 33.6% 21.8% na/nm

CAI International, Inc. CAI 24.01 59.9% 492.1 2,184.0 362.3 233.3 64.4% 9.4x 7.1x 43.6% 33.3% 12.6%

H&E Equipment Services, Inc. HEES 34.57 78.1% 1,232.6 2,168.3 1,063.7 332.8 31.3% 6.5x 5.8x 35.2% 12.5% 22.7%

McGrath Rentcorp MGRC 65.08 99.7% 1,569.7 1,865.8 472.3 162.9 34.5% 11.5x 9.8x 45.4% 21.7% 23.7%

WillScot Corporation * WSC 12.20 78.2% 1,032.7 1,742.2 481.4 108.8 22.6% 16.0x 10.1x 37.1% 3.8% 30.8%

General Finance Corporation GFN 10.75 95.1% 287.6 757.1 326.8 76.7 23.5% 9.9x 9.0x 45.8% 11.1% 22.5%

Median 79.4% 34.5% 9.9x 8.7x 43.6% 21.8% 15.5%

Facility Services

Aramark * ARMK $38.82 84.2% $9,543.2 $17,189.6 $15,151.8 $1,248.4 8.2% 13.8x 9.9x 10.6% 4.8% 2.2%

Rollins, Inc. ROL 49.77 91.7% 10,859.2 10,774.9 1,707.5 355.8 20.8% 30.3x 27.9x 51.0% 17.3% 30.1%

ServiceMaster Global Holdings, Inc. * SERV 57.14 97.8% 7,737.2 10,041.2 2,944.0 669.0 22.7% 15.0x 14.0x 46.8% 19.3% 26.6%

ABM Industries Incorporated ABM 28.46 63.1% 1,869.8 2,981.6 5,715.2 272.6 4.8% 10.9x 8.3x 10.5% 2.3% 7.4%

SP Plus Corporation SP 36.00 86.3% 803.9 921.5 882.3 102.3 11.6% 9.0x 9.5x 20.9% 9.5% 9.3%

Median 86.3% 11.6% 13.8x 9.9x 20.9% 9.5% 9.3%



Copart, Inc. CPRT $54.83 96.6% $12,735.8 $12,932.3 $1,735.1 $703.8 40.6% 18.4x 17.1x 48.4% 37.5% 10.9%

KAR Auction Services, Inc. KAR 52.77 93.0% 7,122.0 10,826.5 3,541.9 850.7 24.0% 12.7x 11.7x 42.9% 16.4% 18.9%

Ritchie Bros. Auctioneers Incorporated RBA 34.08 96.9% 3,672.8 4,192.3 671.3 204.5 30.5% 20.5x 16.6x 84.5% 23.7% 52.2%

Median 96.6% 30.5% 18.4x 16.6x 48.4% 23.7% 18.9%

28






Auction Services

Diversified / Other Business Services

Printing Services


Company Name Ticker

% of 52

Week High

Market

Cap.

Enterprise


LTM

EBITDA

NTM

EBITDA

Gross

Profit

Operating

Income SG&A

Share

price

5/31/18

Cimpress N.V. CMPR $139.23 81.1% $4,276.6 $5,278.4 $2,525.7 $214.8 8.5% 24.6x 14.3x 50.8% 2.8% 36.2%

Deluxe Corporation DLX 66.54 84.4% 3,183.6 3,858.4 1,969.7 487.3 24.7% 7.9x 7.1x 61.9% 20.3% 41.6%

Transcontinental Inc. TCL.A 29.22 91.4% 2,570.3 2,604.8 2,005.3 438.2 21.9% 5.9x 6.9x 18.7% 13.4% 1.0%

R.R. Donnelley & Sons Company * RRD 6.24 19.4% 438.7 2,406.5 6,988.5 428.0 6.1% 5.6x 5.1x 18.4% 3.7% 12.0%

LSC Communications, Inc. * LKSD 12.66 56.4% 442.6 2,109.6 3,711.0 297.0 8.0% 7.1x 6.2x 15.3% 3.9% 7.1%

Quad/Graphics, Inc. QUAD 19.77 63.2% 1,059.7 2,086.5 4,100.3 406.2 9.9% 5.1x 4.9x 20.2% 4.3% 10.3%

Ennis, Inc. EBF 18.25 84.9% 464.5 398.3 370.2 61.6 16.6% 6.5x na/nm 31.6% 12.8% 18.8%

ARC Document Solutions, Inc. ARC 1.95 40.3% 88.3 220.0 393.6 47.6 12.1% 4.6x 4.7x 31.3% 3.9% 26.4%

Median 72.1% 11.0% 6.2x 6.2x 25.8% 4.1% 15.4%

Iron Mountain Incorporated IRM $33.29 80.2% $9,518.4 $17,328.6 $3,949.2 $1,322.9 33.5% 13.1x 11.7x 57.1% 19.1% 23.9%

Sabre Corporation * SABR 24.51 98.0% 6,758.4 9,850.6 3,671.5 959.5 26.1% 10.3x 8.9x 29.6% 15.3% 14.2%

The Brink's Company BCO 79.25 90.0% 4,034.2 4,751.8 3,437.7 370.6 10.8% 12.8x 8.6x 21.7% 6.4% 15.4%

Pitney Bowes Inc. PBI 8.90 55.2% 1,669.2 4,470.3 3,696.5 638.3 17.3% 7.0x 7.6x 49.0% 12.2% 33.4%

Emerald Expositions Events, Inc. * EEX 20.45 83.3% 1,489.4 2,015.8 348.2 148.5 42.6% 13.6x 12.2x 71.5% 30.4% 28.5%

Viad Corp VVI 52.90 85.5% 1,083.4 1,292.7 1,258.6 114.9 9.1% 11.3x 8.3x 5.6% 4.7% 1.0%

InnerWorkings, Inc. INWK 8.79 73.1% 469.7 567.5 1,136.3 53.9 4.7% 10.5x 7.6x 24.5% 3.5% 19.9%

Median 83.3% 17.3% 11.3x 8.6x 29.6% 12.2% 19.9%


February 2016 – Macroeconomic Indicators

May nonfarm payrolls rose 223,000, exceeding expectations. Employers have added an average of 207,000 jobs per month

through the first five months of 2018, including revisions. May’s increase marks the 92nd consecutive month in which

employers have added jobs. The unemployment rate dipped to 3.8%, matching April 2000 as the lowest reading since 1969

– The Professional & Business Services (“P&B”) sector nonfarm payrolls increased 31,000 in May

– Year over year, the P&B sector continues to outpace overall nonfarm payroll growth, 2.4% vs. 1.6%, respectively

– Year over year, average hourly earnings for All Employees and the P&B sector increased by 2.3% and 2.7%, respectively.

Month over month, average hourly earnings for All Employees increased 0.3%, while the P&B sector remained flat

29


Jobs Report

http://blogs.wsj.com/economics/2016/03/0

4/economists-react-to-the-february-jobs-

report-concerns-over-recession-are-

overblown/?mod=djemRTE_h

Nonfarm Payrolls

Average Hourly Earnings



www.mam.econoday.com

(0.5)%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

(50)

-

50

100

150

200

250

300

350

400

5/15 8/15 11/15 2/16 5/16 8/16 11/16 2/17 5/17 8/17 11/17 2/18 5/18

Total Monthly Change (L) Professional & Business Services Monthly Change (L)

Total Yearly Change (R) Y/Y Professional & Business Services (R)

(in thousands)

(0.5)%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

5/15 8/15 11/15 2/16 5/16 8/16 11/16 2/17 5/17 8/17 11/17 2/18 5/18

M/M All Employees M/M Professional & Business Services

Y/Y All Employees Y/Y Professional & Business Services



30


http://blogs.wsj.com/economics/2016/03/0

4/economists-react-to-the-february-jobs-

report-concerns-over-recession-are-

overblown/?mod=djemRTE_h

GDP

Conference Board Leading Index ISM Indices

GDP Price Index

The latest Q1 GDP estimate landed at 2.2%, matching the consensus. Consumer spending ticked downward to 1.0%

– The ISM Non-Manufacturing and ISM Manufacturing indices registered moves of (2.0) and 1.5 points, respectively. New

manufacturing orders improved both m/m and y/y, 1.6% and 9.1%, respectively

– The Conference Board Leading Index increased 0.4% in April to 109.4. The 6-month annualized growth rate slowed to

6.7%, from 8.8%. “April’s increase and continued uptrend in the U.S. LEI suggest solid growth should continue in the

2H2018. However, the LEI’s six-month growth rate has recently moderated somewhat, suggesting growth is unlikely to

strongly accelerate,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board



Consumer spending - econoday

(10.0)%

(8.0)%

(6.0)%

(4.0)%

(2.0)%

0.0%

2.0%

4.0%

6.0%

8.0%

Q1.

18

Q3.

17

Q1.

17

Q3.

16

Q1.

16

Q3.

15

Q1.

15

Q3.

14

Q1.

14

Q3.

13

Q1.

13

Q3.

12

Q1.

12

Q3.

11

Q1.

11

Q3.

10

Q1.

10

Q3.

09

Q1.

09

Q/Q Y/Y

(1.0)%

(0.5)%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Q1.

18

Q3.

17

Q1.

17

Q3.

16

Q1.

16

Q3.

15

Q1.

15

Q3.

14

Q1.

14

Q3.

13

Q1.

13

Q3.

12

Q1.

12

Q3.

11

Q1.

11

Q3.

10

Q1.

10

Q3.

09

Q1.

09

Q/Q Y/Y

40

42

44

46

48

50

52

54

56

58

60

62

64

4/15

7/15

10/1

5

1/16

4/16

7/16

10/1

6

1/17

4/17

7/17

10/1

7

1/18

4/18

Non-Manufacturing Manufacturing

> 50 = expansion

< 50 = contraction

(2.0)%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

4/15

7/15

10/1

5

1/16

4/16

7/16

10/1

6

1/17

4/17

7/17

10/1

7

1/18

4/18

M/M 6M Annualized Growth Rate



Month over month, both the PPI Final Demand Index and the PPI Final Demand Less Foods & Energy Index saw increases of

0.1% and 0.2%, respectively. Both indices increased year over year, 2.6% and 2.3%, respectively

– Business expectations for inflation dipped slightly to 2.0% in May, from 2.3% in April

– Small business optimism, as reported by the NFIB, rose a tenth of a point to 104.80 in April. “Never in the history of this

survey have we seen profit trends so high. The optimism small business owners have about the economy is turning into

new job creation, increased wages and benefits, and investment,” said NFIB President and CEO Juanita Duggan

31


NFIB Small Business Optimism ATL Fed – Business Expectations for Inflation

PPI Final Demand



85

90

95

100

105

110

4/15

7/15

10/1

5

1/16

4/16

7/16

10/1

6

1/17

4/17

7/17

10/1

7

1/18

4/18

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

5/15

8/15

11/1

5

2/16

5/16

8/16

11/1

6

2/17

5/17

8/17

11/1

7

2/18

5/18

(2.0)%

(1.5)%

(1.0)%

(0.5)%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4/15 7/15 10/15 1/16 4/16 7/16 10/16 1/17 4/17 7/17 10/17 1/18 4/18

M/M Final Demand M/M Final Demand Less Foods & Energy

Y/Y Final Demand Y/Y Final Demand Less Foods & Energy


February 2016 – Interest Rate Environment

0.2%4.4%

9.8%14.0%

16.4%22.3%

32.1%

38.9%

44.2%

51.0%

58.2%

64.2%

71.3%

77.9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1.5

0%

2.0

0%

2.5

0%

3.0

0%

3.5

0%

4.0

0%

4.5

0%

5.0

0%

5.5

0%

6.0

0%

6.5

0%

7.0

0%

7.5

0%

8.0

0%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

Jun

-13

No

v-13

Ma

y-14

No

v-14

Ma

y-15

No

v-15

Ma

y-16

No

v-16

Ma

y-17

No

v-17

Ma

y-18

0.00%

0.25%

0.50%

0.75%

1.00%

1.25%

1.50%

1.75%

2.00%

2.25%

2.50%

2.75%

3.00%

3.25%

Jun

-18

De

c-18

Jun

-19

De

c-19

Jun

-20

De

c-20

Jun

-21

De

c-21

Jun

-22

De

c-22

Jun

-23

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

3 Mo 6 Mo 12 Mo 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 30 Yr

Forward Yield Curve - June 30

Yield Curve - May 31

Forward Yield Curve - 5/31/2019

The Fed meets again on June 12. Currently, Fed Fund futures show a near certainty of at least 1 rate hike (pg. 12)

Recall that on May 2, the Fed maintained the Fed Funds target rate at 1.50% - 1.75%, with a 8-0 vote. Excerpts from the

press release:

– “Inflation on a 12-month basis is expected to run near the Committee’s symmetric 2 percent objective over the medium

term. Risks to the economic outlook appear roughly balanced”

– “In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee

will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent

inflation … The Committee expects that economic conditions will evolve in a manner that will warrant further gradual

increases in the federal funds rate”

32

Current Interest Rate Environment

Yield Curve Suggests Low Rate Environment Forward LIBOR Rate

10yr UST Yield Down in May % of Time 10yr UST Below a Yield Since 1962

Sources: Bloomberg, Dealogic, S&P Capital IQ, SEC Filings, Thomson Reuters, Company Presentations, KBCM Estimates & Analysis, Federal Reserve


. Only 41% of trading

days saw the yield rise,

and the trading range

was 26 bps throughout

the month. The average

up day saw a bps

increase of 4.3, while the

average down day saw a

bps decline of 2.9. From

the 13th to the 15th, the 10

year UST yield rose 12

bps, due to the FOMC

rate hike and increased

2017 rate expectations

All eyes will be on the Fed on June 14th, when the

FOMC decides whether to maintain or raise the Fed

Funds target rate. As of now, Fed Fund futures point to

a ~91% chance of the target rate getting hiked to 1.00%

- 1.25% (pg. 12)

Remember that on May 3rd, the FOMC announced that

they would keep the Fed Funds target rate at 0.75% -

1.00%. Key takeaways:

– The committee stated that the slowing in the first

quarter was likely “transitory” and that it expects

economic activity to expand “at a moderate pace”

– After the announcement, the probability of a June

hike spiked to the low-90s, from a

preannouncement level of around 60%

– Barring any unforeseen negative economic data or

political showdowns, it seems safe to assume a rate

hike will come at the FOMC meeting starting June

13th, with the announcement on the 14th

On July 26th, the Fed maintained the Fed

Funds target rate at 1.00% - 1.25%. This

outcome was expected and did not surprise

the market

Key takeaway:

– The Fed increased its 2017 GDP estimate

to 2.2% vs. the 2.1% estimated in March,

while decreasing inflation expectations

from 1.9% to 1.6% and unemployment rate

expectations from 4.5% to 4.3%

Recall that in June, the FOMC noted that the

balance sheet normalization program is

expected to be implemented later this year. The

program “would gradually reduce the Federal

Reserve's securities holdings by decreasing

reinvestment of principal payments from those

securities.” Context: the Fed balance sheet

currently sits at more than $4 trillion, compared

to less than $1 trillion in 2008. The Fed’s plan is

to initially cap roll-off of assets at $10bn a month

($6bn for treasuries, $4bn for MBS), eventually

reaching $50bn a month, ($30bn and $20bn,

respectively) which is targeted for 12 months

after initial implementation

As of now, expectations are at ~42% for at

least one more rate hike by the end of the year

(pg. 11)

Longer-run projections

represent each

participant’s

assessment of the rate

to which each variable

would be expected to

converge under

appropriate monetary

policy and in the

absence of further

shocks to the

economy

The Fed hiking rates to 1.75% - 2.00% at

the June meeting are a near certainty.

The question now – how many more rate

hikes in 2018? (pg. 12)


February 2016 – Mergers and Acquisitions

5/21/2018 Alston Hunt Floyd & Ing Law firm Dentons US LLP Law firm - - -

5/31/2018 Jackson Hewitt Tax Service Inc. Tax return preparation and filing services Corsair Capital LLC PE firm - - -

5/30/2018 Risk Management America, LLC Risk consulting services SUNZ Holdings, LLCPolicy administration, claims administration,

and customer support- - -

5/29/2018 Rylander, Clay & Opitz, LLP Accounting and auditing services BKD, LLP Accounting and auditing services - - -

5/23/2018 RIA in a Box LLCRegistration and compliance consulting

servicesAquiline Capital Partners LLC PE firm - - -

5/23/2018 Del Conte, Hyde, Annello & Schuch P.C. Accounting and auditing services UHY Advisors, Inc.Financial accounting and business advisory

services- - -

5/22/2018 Corporate Benefit Audits Inc. Auditing of insurance claims Risk Strategies Company, Inc. Insurance brokerage services - - -

5/21/2018 PowerPlan, Inc. Regulatory, tax, and budgeting solutions Roper Technologies, Inc. (NYSE:ROP)Designs and develops software, and

engineered products and solutions$1,100.0 - -

5/17/2018 Wilson Legal Solutions, Inc.Consulting services and software solutions to

law firmsStanton Allen Ltd.

Customer relationship management and

data consulting services- - -

5/16/2018Audit and Tax Divisions of Local Office of

Grant Thornton LLPAccounting and auditing services BKD, LLP Accounting and auditing services - - -

5/16/2018 Susan E. Crocker, Inc. HR and employee benefits consulting OneDigital Health and Benefits, Inc. Employee benefits agency - - -

5/15/2018 Smith & Gesteland, LLP Accounting and auditing services BDO USA, LLP Accounting and auditing services - - -

5/14/2018 Source One Management Services, LLC Procurement consulting services Corcentric, LLCProcurement, accounts payable, and billing

solutions- - -

5/9/2018 Best Lawyers, LLCPublishes peer-review and recommended

lawyers guideLevine Leichtman Capital Partners PE firm - - -

5/9/2018 Inspired Solutions, LLC Technical and business consulting services L. Keeley Construction Co., Inc. Construction services - - -

5/7/2018 BoardProspects, Inc. Executive-level news and education platform Osprey Capital, LLC PE firm - - -

5/4/2018 Bay Talent Group Inc.Executive search, staffing, and HR

consulting servicesGIC Merchant Bank Corp.

Strategic consulting services, capital raising

services, M&A advisory- - -

33

Mergers and Acquisitions – Notable Activity

In May, the M&A market saw 76 transactions announced in the business services space, compared to 97 last month, and 77

in May of last year. Of note:

– Brink’s (Other) announced its intent to acquire Dunbar Armored (Other) for $520mm in cash. With the acquisition, Brink’s

says it will be the nation’s and world’s largest cash-management company. The purchase price represents LTM revenue

and EBITDA multiples of 1.3x and 12.1x, respectively. The transaction is expected to close by the end of 2018

– IHS Markit (Data) announced its plan to acquire Ipreo Holdings (Data) for $1,855mm from The Blackstone Group and

Goldman Sachs Group Merchant Banking Division. The transaction will be financed through bank financing and is

expected to close in the second half of the year

Solid economic fundamentals and rising confidence, spurned by tax reform and robust expectations for business investment,

have continued to create a positive backdrop for M&A activity

Target Acquiror Transaction Details

Date

Announced Name Description Name Description Implied EV

Revenue

Multiple

EBITDA

Multiple



Kno

wle

dge-

Bas

ed C

onsu

lting

7.72 width

5/31/2018 Fulcrum Financial Data, LLCProvides legal analysis, news and

commentaryFitch Group, Inc. Credit ratings agency services - - -

5/21/2018 Ipreo Holdings LLC

Provides market intelligence, data, and

technology solutions to capital markets

participants

Markit North America, Inc.Asset pricing, forecasting, and research

services to the financial sector$1,855.0 - -

5/17/2018 MaassMedia, LLC Digital analytics consulting HERO Digital LLCDigital consultancy services to marketers

and businesses- - -

5/11/2018 Ovation Credit Services, Inc.Credit report repair and correction

consultingLendingTree, Inc. (NasdaqGS:TREE)

Online loan marketplace for consumers

seeking loans$20.8 - -

5/10/2018 Red Books LLCProvides intelligence, lead generation,

market dataList Partners, Inc. Develops lead generation software solutions - - -D

ata-

Bas

ed C

onsu

lting



34



Date


Revenue

Multiple

EBITDA

Multiple



7.72 width

5/3/2018National Insurance Services of Wisconsin,

Inc.

Employee benefits consulting and brokerage

servicesAssuredPartners, Inc. Provides property and casualty insurance - - -

5/1/2018 RPX Corporation (NasdaqGS:RPXC)Patent risk management and discovery

servicesHGGC, LLC PE firm $384.9 1.2x 3.4x

5/1/2018 Laffer & Gottlieb Accounting and auditing services CliftonLarsonAllen LLP Accounting and auditing services - - -

5/7/2018Employee Training Content Business

Operations Of Prositions, Inc.

Provides micro-learning, eLearning, and

technology solutionsMedia Partners Corporation

Develops and distributes online and video-

based learnings- - -

Kno

w. (

cont

.)

5/30/2018 North Star Marketing, Inc.Sales and integrated demand generation

agencyFigmints Delicious Design LLC. Brand and digital agency - - -

5/18/2018 360 Brand Machine, LLC Brand development and advertising services UNISON, Inc. Develops and operates stakeholder insights - - -

5/17/2018 Impression X, IncConnected television advertising technology

servicesGood Life Networks Inc. (TSXV:GOOD) Digital branding and advertising services $6.0 - -

5/16/2018 The Brand Experience Brand experiencing and marketing services Hyperquake LLC Brand evolution agency for non-profits - - -

5/15/2018 Desert Class Marketing Search engine marketing agency services Digital Radar, LLC Digital marketing services - - -

5/14/2018 Equestrian Marketing, LLC Sports marketing and management services Mixed Digital LLC Digital marketing services - - -

5/11/2018 Watershed Communications Group Ltd. Advertising and communications services Spring Advertising Advertising services - - -

5/10/2018 Videology, Inc.Video advertising technology platforms and

solutionsAmobee, Inc. Marketing technology services - - -

5/10/2018 FRWD Co.Media services, strategy services, consulting

servicesBain & Company, Inc. Consulting services - - -

5/9/2018 LogoMix Inc.Self-service marketing and branding

platformDeluxe Corporation (NYSE:DLX)

Checks, forms, marketing solutions, and

other products and services$43.0 - -

5/8/2018Referral and Reward Business of

RewardStream Solutions Inc.Referral marketing services BuyaPowa Limited

Platform that allows design, launch,

management, and analysis of social sales

campaigns

$0.1 - -

5/8/2018 Media Fusion, Inc.Media production and institutional support

services

The Creek Indian Enterprises Development

AuthorityEconomic development agency - - -

5/4/2018 RhinoFish Media LLCOutsourced pay-per-click consulting and

management servicesAffiliatemanager.com Affiliate management services - - -

5/3/2018 Adcel LLC Digital media and advertising services engage:BDR Limited (ASX:EN1)Internet-based marketplace platform and

technology solution provider$4.0 - -

5/2/2018 CreaxionAdvertising, PR, and event marketing

servicesImagine Exhibitions, Inc. Produces exhibitions - - -

5/1/2018 Perennial Inc.Graphic designing and store designing

services

DATA Communications Management Corp.

(TSX:DCM)Business communication solutions $10.3 1.9x -

5/1/2018 Thornley Creative CommunicationsAdvertising, branding, marketing, and web

designing servicesStudiothink, LLC Marketing services - - -

Adv

ertis

ing

/ Mar

ketin

g

5/15/2018 Spot Cooling Systems, Inc. HVAC equipment rental American Spot Cooling Inc. HVAC equipment rental - - -

5/9/2018 Patten Industries, Inc.Sells, rents, and provides services for new

and used equipmentAltorfer, Inc.

Distributes and rents agriculture and

construction equipment- - -H

eavy

5/21/2018Environmental Earthscapes Inc dba The

Groundskepeer

Commercial landscape maintenance,

construction, tree care, and irrigation

services

BrightView Landscapes, LLCCommercial landscape maintenance

services- - -

5/16/2018 Whitbeck's Treescape, LLCLandscaping, property maintenance, and

tree servicesSheridan Landscaping, Inc.

Hardscape, landscape, and grounds

maintenance services- - -

5/15/2018American Leak Detection South Florida

Franchise

Detecting, finding, and remediating water

leaksWater Intelligence plc (AIM:WATR)

Leak detection and remediation products

and services- - -F

acili

ty S

ervi

ces



5/31/2018 Dunbar Armored, Inc.Cash management, logistics, and loss

prevention solutionsThe Brink's Company (NYSE:BCO)

Secure transportation, cash management,

and other security-related services$520.0 1.3x 12.1x

5/29/2018 Clink Events LLC Designs and coordinates special events Capers DMCDestination management and event

production company- - -

5/25/2018 HireRight, LLCON-demand employment background

checks and screensGeneral Information Services, Inc. Background screening services - - -

5/25/2018 Iconic Group, Inc. Professional event photography services Fenway Partners LLC PE firm - - -

5/23/2018 SIRVA, Inc. Relocation services Madison Dearborn Partners, LLC PE firm - - -

5/23/2018 Conservation Solutions, inc.Historic object testing, condition

assessment, and preservationEvergreene Architectural Arts, Inc.

Historic preservation, restoration, and

conservation solutions- - -

5/18/2018 Action Artwork Rental, LLC Renting cleared art to the film industryZombie Cat Productions, L.L.C.; Second

Hand Interesting Things LLC

Owns and operates a traveling curiosity shop

and museum; Full-service fabrication shop- - -

5/17/2018 trueNorth Records Management Corp.Records management, storage, and

destruction services

Access Information Management of Canada,

ULC

Records storage and information

management services- - -

5/16/2018 BGTV LIVE Events Agency Hosting of events and weddings BGTV Direct - Worldwide Media SolutionsContent services across various advertising

platforms- - -

5/15/2018 AMC, Inc.Hosts trade markets, trade shows,

conventions, special eventsInternational Market Centers, L.P. Operates showroom spaces - - -

5/14/2018 Naples Transportation & Tours, LLC Transportation services Osprey Capital, LLC Family office - - -

5/14/2018 Kelly's Car Service Transportation services Ollies Taxi & Airport Services Taxi services - - -

5/11/2018

Northern Virginia, Maryland Domestic,

Commercial And Storage Operations of

Suddath Van Lines, Inc.

Relocation services Hilldrup Companies, Inc. Relocation services - - -

5/10/2018 Mas Event + Design, L.L.C. Event design and management services Opus Events Agency LLC Brand management and marketing services - - -

5/9/2018

Calgary Archives Corp./Phoenix

Recycling/B.C Records/Crown Enterprises

Ltd./DocuGuard/FileBank

Document storage and records

management servicesAccess CIG, LLC

Records and information management

services- - -

5/8/2018 Matchpoint Agency Charity and sports event execution services Lagardère Plus Marketing services - - -

5/7/2018 TheMIGroup, Ltd. Relocation services Weichert Workforce Mobility Inc. Workforce mobility management services - - -

5/4/2018 Villain LLC Event production services Vice Media, LLC Global youth media company - - -

5/3/2018 Lynn Moving and Storage, Inc. Relocation services Individual - - - -

5/2/2018 InLine Engineers, a Gray CompanyProduction, packaging, and facility

management servicesGray Construction, Inc. Design-build services - - -

5/1/2018 Interior Specialists, Inc.Interior design and installation services for

floor covering industryInterior Logic Group, Inc

Turn-key design center services and interior

finish solutions- - -

5/1/2018 Red Rock Travel Group LLC Travel and tourism servicesCardiff Lexington Corporation

(OTCPK:CDIX)

Owns and operates Romeo's NY Pizza

restaurants- - -

5/1/2018 InvisoUSA Corporation Real estate photography services VHT Studios, Inc.Professional photography and image

management services- - -

5/17/2018 HALO Branded Solutions, Inc. Distributes promotional products TPG Growth PE firm - - -

5/14/2018 eCompanyStore, Inc.Designs and produces custom creative

promotional merchandiseCorporate Imaging Concepts, Inc.

Strategic planning, branding, advertising

services- - -

5/7/2018 Cimetrix Solutions Inc.3D printing, rapid prototyping, and 3D laser

scanning and designing servicesJavelin Technologies Inc.

Designs and provides solutions for 3D

design, data management, 3D printing- - -

5/2/2018Logistics Business of R.R. Donnelley & Sons

CompanyLogistics services and technologies LSC Communications, Inc. (NYSE:LKSD)

Provides traditional and digital print services

and office products- - -

5/2/2018Retail Offset Printing Facilities of LSC

CommunicationsRetail offset printing facilities and services Trend Offset Printing Services, Inc. Commercial printing services - - -

35



Date


Revenue

Multiple

EBITDA

Multiple



7.72 width

4/26/2018Drill Pipe Rental Division of Premium Oilfield

Services, LLCDrill pipe rental services Drilling Tools International, Inc. Manufactures downhole drilling tools - - -

4/16/2018 GenServe, Inc.Sells, services, and rents industrial

generatorsGenNx360 Capital Partners PE firm - - -

4/12/2018 Hoover Ferguson Group, Inc.Manufactures and rents intermediate bulk

containersFirst Reserve Corporation PE firm - - -

4/9/2018 Acorn Storage Trailers, Inc. Storage containers and storage trailers Pac-Van, Inc.Sells and rents storage containers and office

spaces- - -

4/4/2018 Assets of Jaxx, LLCSales and rental of pressure hydraulic

equipmentBallard Industrial Hardware store warehouse - - -

4/3/2018 MegaSales and rental of modular structures for the

entertainment industryIndividuals - - - -

He.

Eq.

Ren

tal

4/19/2018Advanced Lighting & Production Services,

Inc.Stage and theatrical lighting rental services 4Wall Entertainment, Inc. Stage and theatrical lighting services - - -

4/5/2018 Full Throttle Films Inc. Electronic equipment rentals Production Resource Group, L.L.C.Entertainment and event technology

solutions- - -

4/5/2018 Liberty Party Rental, Inc. Event and party rental services CE Rental, Inc. Event rental services - - -

4/3/2018 Reed Rigging, Inc.Entertainment rigging equipment rental and

salesSenior management - - - -

NH

Eq.

Ren

tal

Prin

ting

Ser

vice

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.

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KBCM Overview

Co-Documentation Agent

$350,000,000

Senior Credit Facility

December 2015

36

127 Public Square

Cleveland, OH 44114

For additional information on KeyBanc Capital Markets,

please contact any of the individuals listed below

Diversified Industries Investment Banking Team

Select Business Services Transactions

Disclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member NYSE/FINRA/SIPC, and KeyBank National Association (“KeyBank N.A.”), are marketed.

Securities products and services are offered by KeyBanc Capital Markets Inc. and its licensed securities representatives, who may also be employees of KeyBank N.A. Banking products and services are offered by KeyBank N.A. This report was not issued by our research department.

The information contained in this report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. This report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer

or a solicitation of an offer to buy or sell any securities. This report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation and particular needs of any individual person or entity.

Mike Jackson

Segment Head & Managing Director, East & Northwest

Cleveland, Ohio

(216) 689-4441

[email protected]

John Cavalaris

Managing Director, Midwest

Chicago, Illinois

(312) 730-2751

[email protected]

Ron Gale

Managing Director

New York, New York

(212) 476-7453

[email protected]

Dan Gallo

Associate

(216) 689-4506

[email protected]

Jeremy Lee

Analyst

(312) 730-2789

[email protected]

Sara Yeagley Analyst

(216) 689-5757

[email protected]

Jeff Geuther Managing Director, Southwest

Houston, Texas

(713) 221-6197

[email protected]

Tad Little

Managing Director, Southeast

Atlanta, Georgia

(770) 510-2171

[email protected]

Chad Riddle

Director

Portland, Oregon

(503) 790-7659

[email protected]

Co-Manager

$300,000,000

Medium Term Notes

January 2016

Sell-Side Advisor

March 2016

a portfolio company of

has been acquired by

Fairness Opinion

announced the acquisition of

August 2016

Joint Lead Arranger,

Joint Bookrunner &

Administrative Agent

$525,000,000

Senior Secured

Credit Facilities

July 2016

Co-Documentation Agent

$1,650,000,000

Senior Credit Facilities

March 2016


Joint Bookrunner &

Co-Syndication Agent

$300,000,000


March 2016

Co-Manager

$1,400,000,000

Senior Notes

April 2016

Participant

$600,000,000


May 2016

Co-Manager

$300,000,000

Senior Notes

February 2017

Joint Bookrunner

$1,700,000,000

Senior Notes

March 2017

Sell-Side Advisor

April 2017



Joint Lead Arranger &

Joint Bookrunner

$850,000,000

Senior Secured

Credit Facilities

April 2017

Co-Manager

$950,000,000

Senior Notes

May 2017

Joint Bookrunner

$600,000,000

Senior Notes

May 2017


Joint Bookrunner &


$652,000,000

Senior Secured

Credit Facilities

July 2017


Sole Lead Arranger,

Sole Bookrunner &


$45,000,000

Delayed Draw

Term Loan Facility

September 2017

Joint Bookrunner

$600,000,000

4.875% Sr. Notes

due 2025

September 2017

Co-Manager

$600,000,000

Senior Notes

October 2017


Syndication Agent &


$250,000,000

Senior Unsecured

Credit Facility

October 2017

Co-Manager

$300,000,000

Senior Notes

October 2017

Joint Bookrunner

$1,700,000,000

Senior Notes

March 2017

Sell-Side Advisor

April 2017



Joint Lead Arranger &

Joint Bookrunner

$850,000,000

Senior Secured

Credit Facilities

April 2017

Co-Manager

$950,000,000

Senior Notes

May 2017

Joint Bookrunner

$600,000,000

Senior Notes

May 2017


Joint Bookrunner &


$652,000,000

Senior Secured

Credit Facilities

July 2017


Sole Lead Arranger,

Sole Bookrunner &


$45,000,000

Delayed Draw

Term Loan Facility

September 2017

Joint Bookrunner

$600,000,000

Senior Notes

September 2017

Co-Manager

$600,000,000

Senior Notes

October 2017

Check with

groups for

marketing

releases

Sole Lender

$37,050,000

Senior Secured

Asset-Based Credit Facility

February 2018

No marketing release for

mercury air group as of 4.3.18

Lead Arranger,

Syndication Agent, &


$250,000,000

Senior Unsecured

Credit Facility

October 2017

Gerry Barredo

Managing Director, California

San Francisco, California

(415) 486-3424

[email protected]

Co-Manager

May 2018

$300,000,000

Senior Notes

Co-Manager

$300,000,000

Senior Notes

October 2017

Joint Bookrunner

$600,000,000

Senior Notes

$500,000,000

Senior Notes

November 2017

Joint Bookrunner

$550,000,000

Senior Notes

$700,000,000

Senior Notes

January 2018


Joint Bookrunner &


$673,766,875

Senior Secured

Credit Facilities

March 2018


Sell-Side Advisor

April 2018




KBCM Overview

37

Disclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member NYSE/FINRA/SIPC, and KeyBank National Association (“KeyBank N.A.”), are marketed.

Securities products and services are offered by KeyBanc Capital Markets Inc. and its licensed securities representatives, who may also be employees of KeyBank N.A. Banking products and services are offered by KeyBank N.A. This report was not issued by our research department.

The information contained in this report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. This report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer

or a solicitation of an offer to buy or sell any securities. This report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation and particular needs of any individual person or entity.

KeyCorp Overview

Market Capitalization of $21.8 billion (NYSE:KEY)

Total Assets of $137.0 billion as of March 31, 2018

Approximately 18,500 employees

Nearly 1,200 full-service retail branches across 15

states

Tier 1 Risk-Based Capital Ratio of 10.8%

15th largest U.S. commercial bank

KeyCorp’s CEO, Beth Mooney, is the first female

CEO of a Top 20 US financial institution

Corporate and Investment bank focused on the

middle market

Capital markets products and services:

– Debt Capital Markets

– Equity Capital Markets

– Financial Sponsor Coverage

– Leveraged Finance

– Mergers & Acquisitions

– Sales & Trading

Over 740 bankers with offices in Atlanta,

Beijing, Boston, Charlotte, Chicago, Cleveland,

Dallas, Houston, London, Los Angeles,

Nashville, New York, Portland, San Francisco,

Seattle, and Stamford

Bankers organized by industry focus and

transaction expertise

Over 95 senior and associate equity research

analysts, tracking more than 700 companies

across six industry sectors

Clean Technology

Communications & Infrastructure

Internet & Digital Media

Semiconductors

Software & Security

eCommerce / Travel

Food & Beverage

Food Distribution

Gaming

Healthy & Active

Home Environment

Restaurants

Retail / Apparel

Business Services

Financial Services

Insurance

Media & Telecom

Alternative Energy

Downstream

Midstream

Oil & Gas Producers

Utilities

Aerospace & Defense

Automotive

Building Products

Construction & Engineering

Industrial Technology

Multi-Industrial

Metals & Mining

Packaging

Specialty Chemicals

Transportation & Logistics

Facility Based Services

Healthcare Information Technology

Medical Products

Payor Services

Pharma Support & Distribution

Services

Provider Outsourcing Services

Sole Corporate Bank Offices (12 States)

Combined Corporate and Community Banking Offices (15 States)

KBCM Office Location

Headquarters: Cleveland, OH

KeyBanc Capital Markets Overview (KBCM) Focus Industries

Technology Consumer & Retail

Diversified Industries Energy

Industrial Healthcare

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