2017 William Blair Investment Banking Case Competition, Honorable Mention

Patterson Education Group
Joe Braun | Garret Markey | Noah Slade | Jake White
10th Annual William Blair Investment Banking Case Competition

Patterson Education Group |2
Industry Dynamics
Final Thoughts
Company Overview
Valuation
Strategic Options
Appendix
Executive Summary 3
5
8
13
19
25
27

Executive Summary

Executive Summary Industry Dynamics Company Overview Valuation Strategic Options Final Thoughts Appendix |4
$300 $350 $400 $450 $500 $550 $600 $650 $700 $750
DCF - Exit Multiple (5 New Schools)
DCF - Perpetuity Method (5 New Schools)
Comparables - 2017E Adjusted EBITDA
Comparables - 2017E Revenue
Precedents - 2017E Adjusted EBITDA
Precedents - 2017E Revenue
Leveraged Buyout (0 New Schools)
($ in millions)
Executive Summary
Football Field Analysis
 PEG is a leader in the education
services industry with minimal
competition
 Ideal business model for expansion
in domestic and international
markets
Positioned for Growth Company Financials Recommendation
 Valuation analyses places PEG’s
enterprise value between
$490mm - $540mm
 2017E Revenue: $195.8mm
 2017E EBITDA: $17.0mm
 Examining past transactions and
possible synergies, we believe a
sale to a financial sponsor would
optimize growth potential for PEG
 Potential financial sponsors
include…
Source: Bloomberg, Team Projections

Industry Dynamics

Industry Dynamics
5
10.2
16.2
PEG Private Public
0%
10%
20%
30%
40%
1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012
20th 50th 90th
 Significant growth in high-income family enrollment
 Private school locations follow population distribution
patterns
 Smaller class size means closer interaction and PEG is a
clear leader in the category
 With only 24.8% of student enrollment, the secular
school segment still produces 48% of industry revenue
Key Takeaways
Student/Teacher Ratio by Market
Growth in High Income Enrollment
23%
29%
48%
Catholic Schools
Other Religious
Schools
Secular Schools
$68.7bn
Revenue Segmentation
0%
10%
20%
30%
Establishments Population
Private Schools Follow Population
Source: Bloomberg, IBIS World

Hire and retain
quality
teachers
Ability to
attract local
support
Availability of
financial
resources
Small class
sizes
Industry Revenue Growth External Drivers
Key Factors to Industry Success
$45,000
$50,000
$55,000
$60,000
$65,000
$70,000
$75,000
 Households earning more than $100,000 a
year expected to increase
▫ Increases demand for private schools
 High school retention rate expected to remain
stagnant in 2017
 Number of school aged children expected to
increase
▫ Opportunity for industry operators to
acquire these students
Industry Drivers

Company Overview

Company Description
 Nationally accredited, premium private school
platform offering grade levels 9-12
 9,500+ students
 60 locations across the United States regions
 Premium learning experience with each class
containing on average 5 students
 NCAA approved courses in all subjects
 Proprietary cloud-based online curriculum
 High impact on student wellness and success
Industry Positioning
 Students ages 14-17 seeking premium
education experience with more direct teacher
engagement
 Household income of 150,000 +
 Almost 100% private pay
End Customer Demographics
Adjusted EBITDA Margin
Average Student Lifetime Value
Entry Grade Full-Time Part-Time
9th $65,200 $12,200
10th $53,200 $9,600
11th $49,500 $6,200
12th $21,000 $3,100
Weighted Average $53,600 $9,400
Patterson Education’s Profile
0%
5%
10%
15%
20%
25%
0
10
20
30
40
50
60
70
80
2015 2016 2017 2018 2019 2020 2021
ADJUSTEDEBITDA($INMILLIONS)
Adjusted EBITDA Adjusted EBITDA Margin
Source: Company Materials, Company Financials

Product Offerings
Four Part Offering
1,100
1,800
3,000
3,400
0
1,000
2,000
3,000
4,000
YE A R 1 YE A R 2 YE A R 3 YE A R 5
REVENUE($INTHOUSANDS)
Average School Performance
Broad and Deep Curriculum
 More than 300
courses offered
 Over 150 College
Prep or Honors
courses
 Robust NCAA
approved core course
list
Enrichment Offerings
 Academic skill courses
 Wellness courses
 Preparation for
postsecondary success
Holistic Experiences
 Clubs and Societies
 Field Trips and
Activities
Anatomy of PEG School
 Approximately 10,000
square feet per school
 Approximately 10
classrooms
 State of the Art Science
labs and music stations
Direct GPA Enhancement
2.79
3.73
GPA Prior to PEG GPA at PEG
PEG Approach
 Competency-based approach and tech-enabled
platform allows PEG to tailor instruction and
maximize individual potential
 Small classroom setting allows teachers to
focus on building meaning relationships with
students
 Proven business model with highly attractive
growth profile and unit economics
 Operates on a 4-day, 8 hours per day schedule
Approximately 75% at or exceed Unit Model by Year 3

Untapped Market Opportunities
 Low penetration rates allow for an increase in
penetration in high priority areas
 Increase enrollment
 Raise tuition prices and professionalize
additional services
Fasting Growing Top Line
New Market Opportunities
 Expand into high priority metropolitan areas
 Grow internationally where people are seeking
additional education alternatives
 Grow technology suite allowing students to
utilize when not near a PEG campus
New School Openings
 Positive cash flow by year 1
 ROIC by year 5 of approximately 1-2x
 Roughly a 50% IRR
Growth Positioning
0
50
100
150
200
250
300
350
400
2015 2016 2017 2018 2019 2020 2021
Revenue($inMillions)
Existing Market Opportunities
 $1.08B of
immediate white
space
 Over 200 priority
locations for new
schools
1,000
1,700
2,250
2,800
3,300
0
1,000
2,000
3,000
4,000
YE A R 1 YE A R 2 YE A R 3 YE A R 4 YE A R 5
REVENUE($INHUNDREDS)
*Blue shows existing states while gray shows strong grow opportunities

Situation Analysis
S
O T
W
 Scalable platform with few direct competitors
of scale; only small group model with national
accreditation
 Unique student profile and favorable target
demographic lowers cyclicality
 Embedded growth built into platform with
new schools ramping up
 Localized buying decision where distance is
under 10 mile radius
 High tuition prices that have significantly
outpaced inflation result in paying a premium
for high quality educational services
 Current landscape is a patchwork of regulatory
and geographic entities
 Total US addressable market of over $2B that
is underserved by education providers
 Meaningful opportunity to grow
internationally
 Enhancement and further development of
current offerings
 Increased government support of charter
schools will cause competition
 Mounting regulations have lead to higher
barriers of entry and increased costs
 Decrease in private school enrollment due to
increased public funding
Strengths Weaknesses
Opportunities Threats

Valuation

Valuation Overview
$250 $300 $350 $400 $450 $500 $550 $600 $650 $700 $750
10.5x - 11.5x
DCF - Perpetuity Growth (0 New Schools)
10.1x - 11.7x
8.5x - 9.5x
8.7x - 10.1x
8.0x - 9.0x
7.3x - 8.5x
19.5x - 23.7x
2.8x - 3.8x
22.4x - 26.4x
3.4x - 4.4x
22.4x - 26.4x
22.4x - 26.4x
22.4x - 26.4x
($ in millions)
Source: Bloomberg, Company Financials, Team Projections

Comparable Companies Analysis
Valuation Commentary
PEG's 2017E Adjusted EBITDA $17.0
EV/EBITDA Multiple 19.7x ---------- 23.7x
Enterprise Value $335.7 ---------- $403.9
PEG's 2017E Revenue $195.8
EV/Revenue 3.1x ---------- 3.6x
 Comparable companies were chosen
based on similar verticals as PEG
 Many companies carry very little debt on
balance sheet
2017E 2018E
EBITDA Revenue 2017EEBITDA 2018EEBITDA 2017ERevenue 2018ERevenue
LaureateEducationInc LAUR $14.0 $2,621.8 $3,137.1 $5,758.9 $647.8 $4,244.2 15.3% 1.9% 8.9x 7.3x 1.4x 0.1x
GrandCanyonEducationInc LOPE 88.1 4,238.7 (1,485.8) 2,752.9 282.9 873.3 32.4% 34.4% 9.7x 8.3x 3.2x 2.9x
StrayerEducationInc STRA 89.0 993.6 (147.9) 845.7 75.3 441.1 17.1% 17.5% 11.2x 10.5x 1.9x 1.8x
CapellaEducationCo CPLA 68.1 794.9 (179.5) 615.4 89.6 429.4 20.9% 19.9% 6.9x 7.0x 1.4x 1.4x
CareerEducationCorp CECO 10.7 741.2 (163.6) 577.6 (9.6) 704.4 (1.4%) (1.7%) (60.2x) (115.5x) 0.8x 1.9x
BrightHorizonsFamilySolutions BFAM 85.1 5,035.5 1,094.3 6,129.8 282.5 1,569.8 18.0% 18.7% 21.7x 18.9x 3.9x 3.5x
AdtalemGlobalEducationInc ATGE 35.9 2,209.9 (121.0) 2,088.9 222.7 1,809.8 12.3% 18.3% 9.4x 6.4x 1.2x 1.2x
2UInc TWOU 60.2 3,095.5 (37.4) 3,058.1 (11.3) 205.9 (5.5%) 3.8% (270.6x) 285.8x 14.9x 10.8x
PattersonEducationGroup $9.6 $195.8 4.9% 8.4%
High $89.0 $5,035.5 $3,137.1 $6,129.8 $647.8 $4,244.2 32.4% 34.4% 21.7x 285.8x 14.9x 10.8x
3rdQuartile 85.9 3,381.3 245.5 3,733.3 282.6 1,629.8 18.7% 19.0% 10.1x 12.6x 3.3x 3.0x
Median 64.1 2,415.9 (134.5) 2,420.9 156.2 788.9 16.2% 17.9% 9.1x 7.8x 1.7x 1.9x
Mean 56.4 2,466.4 262.0 2,728.4 197.5 1,284.7 13.6% 14.1% (32.9x) 28.6x 3.6x 2.9x
1stQuartile 30.4 943.9 (167.6) 788.1 54.1 438.2 8.9% 3.3% (9.9x) 6.8x 1.3x 1.3x
Low 10.7 741.2 (1,485.8) 577.6 (11.3) 205.9 (5.5%) (1.7%) (270.6x) (115.5x) 0.8x 0.1x
2017E
EBITDAMargin
EnterpriseValue EnterpriseValue
EnterpriseValueCompanyName Ticker SharePrice MarketCap NetDebt
Implied Valuation

Precedent Transactions Analysis
Valuation Commentary Implied Valuation
PEG's 2017E Adjusted EBITDA $17.0
EV/EBITDA Multiple 22.4x ---------- 26.4x
PEG's 2017E Revenue $195.8
EV/Revenue Multiple 2.7x ---------- 3.2x
 Precedent transaction targets operated
in similar verticals as PEG
 Financial sponsors have been very active
in the space, as they can acquire these
companies on attractive terms
LTMRevenue LTMEBITDA
AnhangueraEducacional KrotonEducacional StrategicTakeover 4/1/2013 3381.22 $824.7 $138.3 16.8% 4.1x 24.4x
NordAgliaEducation CanadaPensionPlanInvestmentBoard FinancialSponsor 4/1/2017 1122.89 $290.2 $55.0 19.0% 3.9x 20.4x
NobelLearningCommunities InvestcorpBank FinancialSponsor 4/1/2015 405 $316.4 $18.5 5.8% 1.3x 21.9x
ArchipilagoLearningInc EdmentumHoldingsInc FinancialSponsor 3/1/2012 324.4 $73.2 $20.4 27.9% 4.4x 15.9x
ApolloEducationGroupInc ApolloGlobalManagementLLC FinancialSponsor 2/1/2016 322.96 $2,484.3 $125.7 5.1% 0.1x 2.6x
SomosEducacaoSA TarponInvestimentos FinancialSponsor 2/1/2015 240.2 $91.0 $21.9 24.1% 2.6x 11.0x
GlobalEducation&TechGroupLtd PearsonPLC StrategicTakeover 11/1/2011 153.27 $48.2 $6.3 13.1% 3.2x 24.4x
MegaStudyCoLtd H&QAsiaPacificCo FinancialSponsor 2/1/2012 57.21 $28.0 $8.0 28.5% 2.0x 7.2x
High $2,484.3 $138.3 28.5% 4.4x 24.4x
3rdQuartile $443.5 $72.7 25.0% 3.9x 22.5x
Median $190.6 $21.2 17.9% 2.9x 18.2x
Mean $28.0 $6.3 5.1% 0.1x 2.6x
1stQuartile $67.0 $15.9 11.3% 1.9x 10.0x
Low $28.0 $6.3 5.1% 0.1x 2.6x
EnterpriseValue
LTMRevenue LTMEBITDA PremiumPaidTarget Acquier TransactionType TransactionDate TransactionValue

Discounted Cash Flow Analysis
689.8 1.5% 2.0% 2.5% 3.0% 3.5%
8.6% $715 $760 $813 $876 $950
9.1% $664 $702 $747 $799 $860
9.6% $619 $652 $690 $734 $785
10.1% $579 $608 $641 $678 $721
10.6% $544 $569 $598 $630 $667
Perpetuity Growth
WACC
697.6 10.0x 10.5x 11.0x 11.5x 12.0x
8.6% $676 $702 $728 $754 $780
9.1% $662 $687 $713 $738 $764
9.6% $648 $673 $698 $723 $748
10.1% $634 $659 $683 $707 $732
10.6% $621 $645 $669 $693 $717
Exit Multiple
WACC
In $millions 2018P 2019P 2020P 2021P 2022P
EBIT 8.0 21.5 44.3 60.1 63.7
Taxes 2.2 6.0 12.3 16.7 17.7
NOPAT 5.8 15.6 32.0 43.4 46.0
D&A 12.4 14.0 14.9 14.3 15.2
Capex (2.0) (2.3) (2.4) (3.0) (3.2)
∆ in NWC 0.7 0.4 0.8 0.9 1.3
UFCF 16.9 27.7 45.3 55.7 59.3
PV of UFCF 15.5 23.0 34.4 38.6 37.5
DCF Valuation
Projected Capital Structure
Debt 0.7%
Equity 99.3%
Beta 0.76
Market Risk Premium 9.7%
Risk Free Rate 2.3%
Cost of Equity 9.7%
Pretax Cost of Debt 2.1%
Cost of Debt 1.5%
WACC 9.6%
WACC Calculation
Implied Valuation & Sensitivity Analysis
2.5%
855
541
149
$689.8
Present Value of Future FCF
Perpetuity Growth Method
Enterprise Value
Perpetuity Growth Rate
Terminal Value
PV of Terminal Value
11.0x
868
549
149
$697.6
Present Value of Future FCF
Enterprise Value
Exit Multiple Method
Exit Multiple
Terminal Value
PV of Terminal Value

Leveraged Buyout Analysis
Source of Funds Amount Percentage LTM Multiple
Senior Debt $199.4 46.8% 11.7x
Revolver $8.5 2.0% 0.5x
Sponsor's Equity $218.4 51.2% 12.8x
Total Sources $426.3 100.0%
- - - -
Transaction Value $404.5 94.9%
Beginning Cash Balance $20.0 4.7%
Transaction Expenses $1.8 0.4%
Total Uses $426.3 100.0%
Debt / EBITDA 12.2x
Leverage Assumptions
$0
$200
$400
$600
$800
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
2017 2018 2019 2020 2021
% Debt % Equity Equity Value
LBO Capital Structure Valuation Commentary
0.0 8.7x 9.2x 9.7x 10.2x 10.7x
21.0% $437 $450 $466 $481 $496
23.0% $420 $431 $445 $460 $471
25.0% $403 $414 $426 $440 $452
27.0% $389 $399 $411 $423 $433
29.0% $374 $385 $396 $406 $416
TargetIRR
Exit Multiple
Exit Multiple Sensitivity Analysis
 PEG makes for a strong LBO candidate
due to strong free cash flow generation
and significant room for growth
 With an investment horizon of five years
a sponsor can anticipate a 3.1x cash on
cash multiple with these assumptions

Strategic Options

Strategic Acquirers
Description Metrics Reasoning
Laureate Education offers
undergraduate and graduate degree
programs to over one million
students worldwide with nearly 70
campus-based and online
universities.
Capella Education Company is an
education services holding company
that owns Capella University and
other assets. Capella University is a
pioneer in developing high-quality,
professionally aligned online degree
programs for adult learners.
TTM Revenue
$4.24bn
Market Cap
$2.63bn
Laurate Education has an
international presence offering
college degrees through a similar
platform to PEG and can help further
develop PEG offerings as well as grow
PEG’s top line.
TTM Revenue
$438mm
Market Cap
$810mm
Capella Education has made two
acquisitions to date in the online
learning space while also operating
other online learning platforms.
Capella can help PEG achieve top line
growth while furthering PEG’s online
and technological capabilities.
Acquirer
Graham Holdings Company delivers
quality products and services to
today’s students, viewers, customers
and advertisers. Graham owns
Kaplan, Graham Media Group,
SocialCode as well as promising
smaller operations.
TTM Revenue
$2.51bn
Market Cap
$3.09bn
Graham Holdings has made five
acquisitions to date and owns Kaplan
as well as other promising education
platforms. Graham would allow PEG
to better market current offerings as
well as further develop product
offerings through Kaplan, one of the
world’s largest providers of
educational services.
K12 is an education company that
sells online schooling and curriculum
to state and local governments. K12 is
an alternative to traditional schooling
from kindergarten to 12th grade and
is paid for from taxes.
TTM Revenue
$888mm
Market Cap
$712mm
K12 has made four acquisitions to
date in the education space. K12
would allow PEG to further develop
software and technology furthering
top line growth. PEG would pair well
with K12’s current offerings and
allow K12 to have physical locations.

Strategic Acquirers
Description Metrics ReasoningAcquirer
Strayer Education is an education
services holding company that owns
Strayer University. Strayer allows
students the opportunity to take
classes on campus, online or both.
TTM Revenue
$449mm
Market Cap
$993mm
Strayer Education operates Strayer
University which can help PEG grow
their product offering to the adult
learner. Operating under a similar
platform as PEG, Strayer can also help
further develop PEG’s technologies.
Bright Horizons is leading provider of
early education and preschools,
employer-sponsored child care, back-
up care, educational advisory
services and other work and life
solutions.
TTM Revenue
$1.65bn
Market Cap
$5.04bn
Bright Horizons has acquired four
players in the child care space to help
expand product offerings. PEG would
pair well with Bright Horizon’s
current offerings and would allow
PEG to expand to new markets.
Estacio Participacoes is a Brazil-
based educational services provider.
Estacio Participacoes focuses on post-
secondary education through on-
campus and distant learning courses
with a focus in business training.
TTM Revenue
3.29bn BRL
Market Cap
10.05bn BRL
Estacio Participacoes has a strong
presence in Brazil and would allow
PEG to expand their geographical
presence and product offering
resulting in top line growth.
G8 Education is the largest ASX listed
child care center operator in
Australia. G8 Education provides
development and educational child
care services.
TTM Revenue
785mm AUD
Market Cap
1.94bn AUD
G8 Education has made two
acquisitions to date in the child care
and education space. G8 Education
companies would pair well with PEG
and allow PEG to grow top line
growth through international
expansion.
Virscend Education is a Hong Kong
based holding company that operates
over five schools ranging from
kindergarten to college. They mainly
operates in Southwest China through
physical locations.
TTM Revenue
1.03bn HKD
Market Cap
15.44bn HKD
Virscend Education is a major player
in Southwest China education and
would allow PEG to expand
internationally in a growing market
and increase physical locations.

Financial Sponsors
Investment Criteria ReasoningSponsor
Investment Range: $100mm - $175mm
Preferred EBITDA: $20mm - $50mm
Investcorp targets growing business that operate in
fragmented industries with the potential to expand
internationally or domestically through multiple avenues of
growth and cash flow generation. Investcorp holds Nobel
Learning Communities in their portfolio and specializes in
business services, industrials and consumer products.
Brentwood Associates looks to invest in proven and
differentiated consumer-focuses businesses with defining
brands and high customer loyalty, significant potential growth
in multiple channels and strong company cultures. Brentwood
has an area of focus in education and currently holds
Excelligence Learning, ClassWallet and The Teaching Company
in their portfolio.
Preferred EBITDA: Over$2mm
Preferred Revenue: Over $10mm
Boathouse Capital doesn’t invest in turnaround situations but
rather with already excelling companies that have high growth
and room for margin improvement. Boathouse Capital has
experience in the education industry with Atomic Learning and
MIS Training Institute in their portfolio.
Sterling Partners seeks to create value by investing in
transformational growth. Sterling Partners Education Opportunity
Fund was launched to help promote a more purposeful path for
students. In the Education Opportunity Fund Sterling currently
holds NRCCUA, Panopto and Amerigo.
Leeds Equity Partners is a pioneer in investing in the knowledge
sector. The firm invests in established companies that address high
stakes challenges, have differentiated products and services,
provide measurable outcomes, and have minimal intermediation by
third parties. Their current holdings include Campus Management,
Knowledge Factor, and past include Nobel Learning Communities.

Financial Sponsors
Investment Criteria ReasoningSponsor
Gauge Capital seeks to invest in the services sector of the
economy. Their primary aim is long-term, sustainable value
creation through transformational change as well as organic
and strategically acquired growth. Gauge has experience in the
education services industry and currently holds eDynamic
Learning and Teachers of Tomorrow.
Preferred Revenue: $25mm - $250mm
Clearlight Partners looks to invest in a variety of industries
including industrials, business services, consumer products,
healthcare and education. Clearlight invests in companies
operating in industries with tailwinds propelling future
growth. Clearlight once held U.S. Education Corporation in
their portfolio where U.S. Education grew into a leading career
education company.
Preferred Revenue: $5mm - $20mm
Education Growth Partners is dedicated to high potential
education companies that offer compelling solutions to unmet
needs in education. The Education Growth Partners team is
composed of investors who have a passion for education.
Education Growth Partners holds eScholar, The Gordian Group
and Apex Learning in their portfolio.
Providence Equity’s objective is to build extraordinary
companies that will shape the future of the media,
communications, education and information industries and will
create attractive returns for our investors. The firm currently
holds ten education company's including AcadeMedia,
Archipelago Learning, Blackboard, and NACE Schools.
Preferred EV: Less than $250mm
Primus is a growth-oriented firm focused on investing in
leading healthcare, software, and technology-enabled
companies with a specific focus in education technology.
Primus is invested in the education space currently holding
American Institute.

Market Overview
Market Median EV/EBITDA
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
EV/EBITDA
M&A Market Volume & Value
Market Commentary
 The market for M&A activity has remained
stagnant over the past year
 Valuations for middle market companies have
recently shown static growth
 The education market for M&A transactions
has seen growth in value and number of
transactions
0
200
400
600
800
1,000
1,200
1,400
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
Volume
DealVaule
Deal Volume Aggregate Deal Volume
Education Market Dynamics
0
20
40
60
80
100
120
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
DealVolume
DealValue
Deal Value # of Deals

Final Thoughts

Final Thoughts
 Sale to a sponsor offers PEG optimal benefits
 PEGs strong management team is more likely to be
retained
 Possibility for synergies with other portfolio
companies
 PEG can continue to focus on their high growth
implementation strategy
Strategic vs. Sponsor Final Recommendation
 We recommend PEG pursues a sale to Providence
Equity
 Familiarity within education services industry
in regards to previous and current portfolio
companies
 Combined with technological and international
portfolio companies, PEG could encounter
important synergies and international growth
opportunities
 Implied valuation range 490mm – 550mm
$300 $350 $400 $450 $500 $550 $600 $650 $700 $750
($ in millions)
Football Field Analysis
Source: Bloomberg, Team Projections

Appendix

Pro Forma Income Statement
Estimated
2015 2016 2017 2018 2019 2020 2021 2022
Revenue $118.5 $156.4 $195.8 $242.2 $278.2 $328.4 $362.9 $384.7
Direct Costs 39.8 53.6 64.6 90.1 103.7 121.5 133.0 142.3
Indirect Costs 58.3 77.9 96.3 99.2 101.4 105.3 110.1 115.4
Corporate Overhead 18.1 21.7 25.3 32.5 37.6 42.4 45.4 48.1
Depreciation & Amortization 6.3 8.8 11.1 12.4 14.0 14.9 14.3 15.2
EBIT ($4.0) ($5.6) ($1.5) $8.0 $21.5 $44.3 $60.1 $63.7
Interest Expense - - - - 5.4 5.4 5.4 5.4 5.4 5.4
Corporate Taxes (1.1) (1.6) 1.1 3.7 7.5 13.8 18.2 19.2
Net Income ($2.9) ($4.1) ($2.6) $4.3 $14.1 $30.5 $41.9 $44.5
Depreciation & Amortization $6.3 $8.8 $11.1 $12.4 $14.0 $14.9 $14.3 $15.2
Capital Expenditures 4.9 7.5 8.0 2.0 2.3 2.4 3.0 3.2
EBITDA $2.3 $3.2 $9.6 $20.4 $35.5 $59.2 $74.4 $78.9
New School Development Addback $3.8 $5.0 $4.4 - - - - - - - - - -
Other Addbacks 4.1 3.1 3.0 2.9 1.1 1.1 1.1 1.1
Adjusted EBITDA $10.2 $11.3 $17.0 $23.3 $36.6 $60.3 $75.5 $80.0
Growth Analysis
Revenue 32.0% 25.2% 23.7% 14.9% 18.0% 10.5% 6.0%
EBITDA 39.3% 205.1% 112.0% 73.8% 66.7% 25.7% 6.0%
Adjusted EBITDA 10.7% 51.3% 37.0% 57.0% 64.7% 25.2% 5.9%
Margin Analysis
EBITDA 1.9% 2.0% 4.9% 8.4% 12.8% 18.0% 20.5% 20.5%
Adjusted EBITDA 8.6% 7.2% 8.7% 9.6% 13.2% 18.4% 20.8% 20.8%
D&A 5.4% 5.7% 5.7% 5.1% 5.0% 4.5% 3.9% 4.0%
Capital Expenditures 4.1% 4.8% 4.1% 0.8% 0.8% 0.7% 0.8% 0.8%
NWC (8.1%) (8.4%) (21.1%) (16.8%) (14.5%) (12.0%) (10.6%) (9.7%)
EBIT (3.4%) (3.6%) (0.7%) 3.3% 7.7% 13.5% 16.6% 16.6%
Cost of Sales
Direct Costs 33.6% 34.3% 33.0% 37.2% 37.3% 37.0% 36.6% 37.0%
Indirect Costs 49.2% 49.8% 49.2% 41.0% 36.4% 32.1% 30.3% 30.0%
Corporate Overhead 15.3% 13.9% 12.9% 13.4% 13.5% 12.9% 12.5% 12.5%
Tax Rate 27.8% 27.8% 27.8% 27.8% 27.8% 27.8% 27.8% 27.8%
Average Interest Rate - - - - 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%
Historical Projected

Pro Forma Balance Sheet
Estimated
2017E 2018P 2019P 2020P 2021P 2022P
Assets
Cash and Cash Equivalents $35.3 $50.0 $51.6 $95.4 $149.6 $207.4
Restricted Cash 4.4 4.4 4.4 4.4 4.4 4.4
Accounts Receivable 11.9 14.7 16.9 23.4 27.5 32.6
Short-Term Investments 1.3 1.3 1.3 1.3 1.3 1.3
Other Receivables 8.6 10.7 10.7 10.7 10.7 10.7
Prepaids 4.3 5.3 5.3 5.3 5.3 5.3
Total Current Assets $65.8 $86.4 $90.2 $140.5 $198.8 $261.7
Net Property, Plant & Equipment $61.8 $51.4 $39.7 $27.2 $15.9 $3.9
Goodwill 6.3 6.3 6.3 6.3 6.3 6.3
Intangible Assets 12.2 12.2 12.2 12.2 12.2 12.2
Other Long-Term Assets 5.5 5.5 5.5 5.5 5.5 5.5
Total Other Assets $85.8 $75.4 $63.7 $51.2 $39.9 $27.9
Total Assets $151.6 $161.8 $153.9 $191.7 $238.7 $289.6
Liabilities & Equity
Accounts Payable $1.5 $1.9 $2.2 $2.6 $2.9 $3.1
Other Accrued Expenses 14.5 17.4 18.4 21.3 22.9 24.2
Other Current Liabilities 6.1 6.8 7.0 8.2 8.3 8.8
Customer Deposits 2.4 3.3 4.1 5.3 6.9 9.0
Current Lease Allowance 2.3 2.9 2.9 3.3 3.6 4.1
Deferred Revenue 44.1 45.3 45.6 46.6 47.9 49.6
Total Current Liabilities $70.9 $77.6 $80.2 $87.4 $92.5 $98.9
Bank Revolver $25.3 $24.6 - - - - - - - -
Deferred Tax Liability 3.4 3.4 3.4 3.4 3.4 3.4
Capital Leases and Other 31.1 31.1 31.1 31.1 31.1 31.1
Total Liabilities $130.7 $136.6 $114.7 $121.9 $127.0 $133.4
Total Member's Equity $20.8 $25.1 $39.2 $69.7 $111.6 $156.1
Total Liabilities and Equity $151.5 $161.7 $153.8 $191.6 $238.6 $289.5
Projected

Pro Forma Statement of Cash Flows
2018 2019 2020 2021 2022
NetEarnings $4.3 $14.1 $30.5 $41.9 $44.5
Depreciation&Amortization 12.4 14.0 14.9 14.3 15.2
∆inWorkingCapital 0.7 0.4 0.8 0.9 1.3
CashFromOperatingActivities $17 $28 $46 $57 $61
CapitalExpenditures (2.0) (2.3) (2.4) (3.0) (3.2)
CashFromInvestingActivities ($2) ($2) ($2) ($3) ($3)
∆ inRevolver (0.7) (24.6) -- -- --
CashFromFinancingActivities ($0.7) ($24.6) -- -- --
∆inCash $14.7 $1.6 $43.8 $54.2 $57.8
BeginningCash $35.3 $50.0 $51.6 $95.4 $149.6
EndingCash 35.3 50.0 51.6 95.4 149.6 207.4
Projected

2017 William Blair Investment Banking Case Competition, Honorable Mention

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