monthly business & tech-enabled services sector summary … · sector-focused private equity...

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BUSINESS AND TECH-ENABLED SERVICESSECTOR REPORT

June 2018

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GCA BUSINESS & TECH-ENABLED SERVICES OVERVIEW

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

Representative Focus Areas

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

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

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

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

MARKETING SERVICES

INFORMATION SERVICES

PROFESSIONAL & IT SERVICES

CUSTOMER CARE & CLAIMS SERVICES

Recent Business & Tech-Enabled Services Transactions

Key Contact

We Advised the Seller

Acquired by

Acquired by


Acquired by


Acquired by

We Advised the SellerWe Advised the Seller

Acquired by

Acquired by


Received Minority Investment from

Financial AdvisorWe Advised the Buyer

AcquiredAcquired by


Acquired by

Acquired by


Investment in

We Advised NorthEdge

Acquired by


Acquired by


Acquired by


Acquired by


Acquired by

Risk Mgmt Services Software Services Patent Services IT Services Digital Marketing HR Solutions Digital MarketingMarketing Services IT Services

IT Services Digital Marketing Claims Management Print Services Information Services Loyalty Marketing IT ServicesMarket Research Influencer Marketing

Investment in

We Advised the Buyer

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CASE STUDY: MAJORITY SALE OF RISK INTERNATIONAL

GCA advised Risk International on its majority sale to BV Investment Partners

Transaction

• GCA was retained as exclusive financial adviser in order to identify an investor who would be a true financial partner and has a track record investing in services businesses

• GCA approached a targeted group of middle-market private equity firms and ran a tightly managed process focused on both minority and majority transactions

• BV Investment Partners will partner with management to expand the sales and marketing effort, expand the product and service offering, and execute strategic add-on acquisitions. BV is currently investing its ninth private equity fund. The firm is one of the oldest and most experienced sector-focused private equity firms in North America. Since its founding in 1983, the firm has invested over $3 billion in more than 93 companies, actively targeting investments in the business services and information technology services industries

• GCA advised the management team on all aspects of the transaction including a comprehensive due diligence process and SPA negotiations

Background

• Risk International is an independent, outsourced risk management, benefits advisory, actuarial consulting and claims services provider

• The Company provides expert risk management services for Fortune 500 and middle-market enterprises, helping clients reduce their total cost of risk. More specifically, Risk International undertakes a comprehensive approach to uncover and remedy excessive and inefficient pricing of property and casualty insurance, employee benefits, and associated claims

• Risk International serves approximately 200 clients globally, including portfolio companies of The Carlyle Group, BC Partners, KKR, and AEA Investors, from three office locations in the United States. The Company has helped clients save or reduce their cost of risk by more than $1 billion collectively since opening its doors in 1986

• Risk International has been consistently named one of the of the top three risk management services companies in the U.S. according to Business Insurance magazine

Closing Date

June 2018

Deal Type

Sell-side

Industry

Risk Management

Insurance Services

Cost Containment

Majority Stake

Acquired by

GCA Advised Risk International

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CASE STUDY: SALE OF RPX (NASDAQ: RPXC) TO HGGC

Transaction

• GCA was retained by the board of RPX to evaluate a full range of strategic, financial and capital structure alternatives to best serve the interests of RPX’s stockholders, including a sale and continuing to operate as a standalone public company

• As part of a tightly managed process, GCA approached approximately 50 private equity firms and several strategicsregarding a potential acquisition of the Company

• HGGC conducted substantial due diligence and submitted a complete proposal that included fully committed debt and equity financing

• After considering RPX's current operations and future prospects, the Board unanimously agreed to approve a sale of the Company to HGGC in an all-cash transaction valued at approximately $555 million

• Beyond providing capital, HGGC will bring its resources and operational expertise to help RPX as it strengthens its patent risk and discovery management offerings and identifies ways to better serve its clients

• GCA advised the RPX board and management team on all aspects of the transaction including a comprehensive due diligence process, SPA negotiations, and a fairness opinion

Background

• RPX Corporation (NASDAQ: RPXC) is the leading provider of patent risk and discovery management solutions. Since its founding in 2008, RPX has introduced efficiency to the patent market by providing a rational alternative to litigation. The San Francisco-based company's pioneering approach combines principal capital, deep patent expertise, and client contributions to generate enhanced patent buying power. By acquiring patents and patent rights, RPX helps to mitigate and manage patent risk for its growing client network

• As of March 31, 2018, RPX had invested over $2.4 billion to acquire more than 26,000 US and international patent assets and rights on behalf approximately 320 clients in eight key sectors: automotive, consumer electronics and PCs, E-commerce and software, financial services, media content and distribution, mobile communications and devices, networking, and semiconductors

• RPX subsidiary Inventus is a leading international discovery management provider focused on reducing the costs and risks associated with the discovery process through the effective use of technology solutions. Inventus has been providing litigation support services to corporate legal departments, law firms and government agencies since 1991

Closing Date

June 2018

Deal Type

Sell-side

Industry

Patent Services

eDiscovery

Risk Management

Acquired by

GCA Advised RPX

GCA advised the board and management of RPX on its sale to HGGC

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BUSINESS & TECH-ENABLED SERVICES SECTOR REPORT

Notes:Source: Capital IQ and PitchBook.

− Business & Tech-Enabled Services sector continues to experience significant M&A activity, with over $135 billion in volume across 1,637 transactions in 2018 YTD

− June saw three large strategic acquisitions in the call center / CRM services space:

• Synnex / Concentrix acquisition of Convergys

• Webhelp acquisition of Sellbytel Group

• Teleperformance acquisition of Intelenet

− Notable private equity transactions include:

• Temasek acquisition of minority stake in UST Global

• Sirius Capital Group acquisition of Web.com

• Genstar Capital acquisition of Drillinginfo

• Blackstone acquisition of PSAV

• TPG Growth acquisition of ClearResult

• ABRY Partners acquisition of Screen Vision Media

• Warburg Pincus acquisition of Reorg Research

− In addition, the IT services space continues to be very active:

• C Spire acquisition of TekLinks

• Spire Capital investment in Dynamic Quest

• Rizing acquisition of Aasonn

• Mercer acquisition of everBe

• H.I.G. Capital investment in Eze Castle Integration

Executive Summary

Select M&A Transactions

Ann. Date Acquirer Target TEV ($MM)

6/28/18 $2,534

6/27/18(Investment)

NA

6/27/18 NA

6/27/18(Minority stake for $250MM)

NA

6/26/18 NA

6/26/18 NA

6/25/18(DFLT & TAS Practices)

$470

6/21/18 $1,864

6/19/18 NA

6/19/18 NA

6/19/18 NA

6/18/18 NA

6/14/18 $1,000

6/11/18 NA

6/6/18 NA

6/4/18 $375+

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80%

90%

100%

110%

120%

130%

140%

150%

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

BUSINESS & TECH-ENABLED SERVICES LTM STOCK PRICE PERFORMANCE

Notes:Source: Capital IQ as of 07/09/2018.

Advertising & Marketing Services

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

1.4% 9.1% 23.2% 46.5% 34.7% 29.3% 20.5% (0.7%)

LTM Share Price Performance

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5.1x

3.6x

2.2x

1.6x 1.6x1.3x

0.8x 0.7x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

InformationServices

HR Services IT & BPOServices

Advertising& Marketing

Services

Events &Exhibitions

Consulting &Training

CustomerCare / CRM

Services

Staffing &Recruiting

16.4x 16.0x

12.7x 12.4x

10.0x9.0x 8.8x 8.7x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

18.0x

HR Services InformationServices

Consulting &Training

IT & BPOServices

Staffing &Recruiting

Events &Exhibitions

Advertising& Marketing

Services

CustomerCare / CRM

Services

BUSINESS & TECH-ENABLED SERVICES TRADING COMPARABLES

Notes:Multiples represent median values, except for HR Services, which reflects mean values. Source: Capital IQ 07/09/2018.

Advertising & Marketing Services

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

8.8x / 1.6x 9.0x / 1.6x 16.0x / 5.1x 12.7x / 1.3x 16.4x / 3.6x 10.0x / 0.7x 12.4x / 2.2x 8.7x / 0.8x

2018E EBITDA / 2018E Revenue Multiple

EV / 2018E EBITDA EV / 2018E Revenue

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

Notes:Source: Capital IQ and Wall Street Estimates.

($MM)

EV / EBITDA EV / Revenue

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

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

businesses to establish, maintain, promote, and optimize their

online presence

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

and credit union clients

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

desktop platforms to oil and gas industries worldwide

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

brands, agencies and media platforms assess marketing

effectiveness across all channels

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

analysis for distressed debt investors, lawyers, and

restructuring professionals

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

technology solutions to participants in the global capital

markets in the U.S. and internationally

5/15/2018Exhibitions Business

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

including global exhibitions brands Bett and CWIEME

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

service organizations

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

solutions to the P&C and collision repair industries

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

direct marketing services to businesses

3/15/2018 $371 NA NA 7.0x NAUK-based provider of free access to credit reports and scores

and consumer finance matching solutions

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

solutions serving the property due diligence industry

2/12/2018Global Market Intelligence Division

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

financial information from the macro and micro perspectives,

with a focus on data for emerging markets

1/30/2018Financial & Risk Business (55% stake)

$20,000 10.4x NA 3.3x NAOffers critical news, information, and analytics enabling

transactions and connecting communities of trading,

investment, financial, and corporate professionals

1/29/2018PR Solutions & Digital Media Services

$335 13.4x NA 1.7x NAPublic relations, webcasting, and webhosting products,

including GlobeNewswire, Media Intell igence, and Influencers

Database

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


($MM)



1/29/2018 $830 NA NA NA NAProvides context-based business security and fraud prevention

solutions for businesses in various industries worldwide

1/17/2018 $5,902 14.8x 14.5x 4.4x 4.4x Organizes business-to-business events worldwide

12/22/2017 $219 NA NA NA NAProvides eCommerce analytics, with proprietary

technology, for consumer product companies

12/18/2017 $476 5.8x NA 1.0x NA Largest direct mail production provider in North America

11/30/2017 $200 NA NA NA NAProvides market and cost intelligence solutions to

energy companies

11/27/2017 $456 NM 19.6x 2.2x 2.2xProvides marketing tools to retailer and brand clients for

understanding consumer voice

11/22/2017 NA NA NA NA NA Provider of data and analytics for capital markets

11/14/2017 NA NA NA 2.4x NAProvides under-banked consumer risk management and identity

verification services to alternative financial services industry

10/12/2017 NA NA NA NA NAGlobal leader in consumer and business-to-business

digital research data for business decisions

10/5/2017 $70 NM NA 2.7x NALeader in sales intelligence and acceleration for

businesses selling to the public sector

10/2/2017 $1,205 16.5x 16.6x 0.4x 0.4xJapan-based advertising agency and provider of

animation programs

9/26/2017 $558 NA NA NA NAProvides predictive analytics and marketing automation

technology for the automotive industry

9/5/2017 $113 11.2x NA 0.7x NAProvides digital video brand advertising solutions in the

U.S. and internationally

8/29/2017 $1,300 6.3x 6.4x 1.6x 1.6xProvides research, technology, and data-enabled

services to healthcare sector worldwide

8/29/2017 $1,550 NA NA NA NAProvides research and advice to academic, business, and

student leaders at Universities

Mean 12.4x 13.4x 2.9x 2.2x

Median 12.4x 14.5x 2.5x 2.2x

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

Notes:Source: Capital IQ and Wall Street Estimates.(1) Upon the closure of the transaction, Navigant will be a highly concentrated management consulting and managed services firm, focused on rapidly transforming industries including healthcare, energy, and financial services.

($MM)



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

and media, technology, financial services, and other vertical

markets worldwide

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

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

to Global 1000 companies

6/25/2018DFLT and TAS Segments

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

financial services industry

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

settlements, mass tort, solicitation, legal noticing programs,

and bankruptcy cases worldwide

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

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

Caribbean, Europe, and the United Arab Emirates

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

management services

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

customers, individual consumers, and military and government

agencies worldwide

5/21/2018(48% stake)

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

customers worldwide

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

solutions delivering value to clients through a portfolio of

outsourcing and consulting services

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

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

services for clients worldwide

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

solutions and services

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

and compensation management solutions

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

experience design, digital marketing, data science and machine

learning

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

infrastructure platform through commodity hardware, in the

cloud, or both

(1)

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


($MM)



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

tenens staffing

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

Leaders for Today provides interim and permanent leadership

workforce solutions

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

management software and services

3/21/2018 $33 NA NA 1.7x NAProvides Guidewire platform implementation services

to P&C insurance carriers

3/19/2018 $1,180 10.5x 8.1x 0.6x 0.6xProvides title insurance and real estate transaction

services

3/14/2018Data Center and Cloud Services

$405 NA NA 1.7x NARepresents the combined operations of Wipro's datacenter and

cloud services and portion of its datacenter business In

Germany and U.K.

2/12/2018 $9,871 11.7x 12.0x 1.9x 1.8xProvides IT solutions and professional services to its U.S.

government customers to modernize legacy systems, and

protect and enhance networks and assets

2/6/2018Talent Assessment Business

$400 10.5x NA NA NA Formerly SHL, provides talent assessment solutions

2/5/2018 NA NA NA 2.0x NADigital customer engagement firm that specializes in

developing and delivering compelling customer experiences

1/31/2018 $775 11.5x NA 1.3x NAProvides cybersecurity, cloud, DevOps, IT modernization and

advanced science and engineering solutions to government

enterprises

1/11/2018 $5,650 13.1x 12.2x 2.8x 2.6xProvides technology-based information processing and

servicing solutions worldwide

12/22/2017 $185 NA NA NA NAProvider of l itigation support services including electronic

discovery, data management and managed review services

12/11/2017 NA NA NA NA NA Bankruptcy claims and noticing agency in the U.S.

12/6/2017 NA NA NA NA NAProvides claim management, loss adjusting, and risk solutions

to insurers, brokers, and risk managers

12/1/2017 NA NA NA NA NAReverse merger with SPAC to become a Nasdaq-listed

public company

Mean 11.2x 10.0x 2.2x 1.5x

Median 11.5x 10.0x 1.7x 1.4x

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GCA: A LEADING INDEPENDENT GLOBAL INVESTMENT BANK

NEW YORK

ZURICH

MILAN

FRANKFURT

MUNICH

TEL AVIVSAN FRANCISCO

Globally integrated platform with 18

offices across

America, Asia and

Europe

Geographically balanced,

synergistic and

complementary

sector focus areas

across the firm

Strong in key growth and

innovation sectors

such as Technology

and Industrials

Strong cross-border capabilities and

deal flow

LONDON

MANCHESTER

MUMBAI

OSAKA

SHANGHAI

SINGAPORE

TOKYO

DELHI

NAGOYA

400+experienced

professionals

HO CHI MINH CITY

TAIPEI

350+ deals closed

in the last 3 years

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

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

monthly business & tech-enabled services sector summary … · sector-focused private equity...

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