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Robert Koven Leonis Partners 4th Quarter 2017 IT Services Analysis

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LEONIS CREDENTIALS & SERVICES
▪ Leonis solely focuses on providing M&A and Growth Capital advisory services to both high-growth and well- established technology and technology services companies
▪ Leonis core areas of focus include:
▪ Sell-side M&A: represent companies looking to be acquired by a strategic or go through a fulsome liquidity event with a financial sponsor
▪ Capital Raises:
• Majority Equity Raises: Recapitalizations from private equity & growth equity firms who understand the sector and will be able to partner with management to inject capital and provide expertise to maximize the company’s growth
• Minority Equity Raises: Equity investments from private equity and strategic partners who bring capital and market expertise to bear
▪ Retained Advisory Services: strategic guidance to assist management in maximizing firm value ahead of a potential liquidity event, as well as manage inbound offers and solicitations

FIRM OVERVIEW
▪ Bankers with over 50 years of combined experience in bulge bracket Wall Street firms and Middle Market
▪ Team has executed over 105 M&A, restructuring and capital raising deals with cumulative transaction values over $170 billion
▪ Team executed eight deals in the last twelve months with an 85% close rate
▪ Deep knowledge of strategic and financial buyers with a proprietary database of more than 4,200 private equity investors and 1,800 strategic acquirers
▪ Team with experience advising, operating and investing in businesses within the firm’s core areas provides an unbiased view of how “the other side” will look at a deal

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Robert Koven Leonis Partners 4th Quarter 2017 IT Services Analysis

  1. 1. LEONIS PARTNERS: 4RD QUARTER 2017 IT SERVICES ANALYSIS A NALY SIS O F I T S ERVIC ES VALUAT IONS & K EY DRIVERS IN PUB LIC AND PRIVAT E MARK ET S
  2. 2. LEONIS PARTNERS EXPERIENCED IT SERVICES ADVISORS ▪ Leonis solely focuses on providing M&A and Growth Capital advisory services to both high-growth and well- established technology and technology services companies ▪ Leonis core areas of focus include: ▪ Sell-side M&A: represent companies looking to be acquired by a strategic or go through a fulsome liquidity event with a financial sponsor ▪ Capital Raises: • Majority Equity Raises: Recapitalizations from private equity & growth equity firms who understand the sector and will be able to partner with management to inject capital and provide expertise to maximize the company’s growth • Minority Equity Raises: Equity investments from private equity and strategic partners who bring capital and market expertise to bear ▪ Retained Advisory Services: strategic guidance to assist management in maximizing firm value ahead of a potential liquidity event, as well as manage inbound offers and solicitations For more information or inquiries, please contact us at info@leonispartners.com 2 TECHNOLOGY SERVICES TOMBSTONES FIRM OVERVIEW ▪ Bankers with over 50 years of combined experience in bulge bracket Wall Street firms and Middle Market ▪ Team has executed over 105 M&A, restructuring and capital raising deals with cumulative transaction values over $170 billion ▪ Team executed eight deals in the last twelve months with an 85% close rate ▪ Deep knowledge of strategic and financial buyers with a proprietary database of more than 4,200 private equity investors and 1,800 strategic acquirers ▪ Team with experience advising, operating and investing in businesses within the firm’s core areas provides an unbiased view of how “the other side” will look at a deal Has Acquired LEONIS CREDENTIALS & SERVICES Has Been Acquired By Equity Capital Raise Equity Capital Raise Has Been Acquired By Has Been Acquired By Has Acquired Has Been Recapitalized By
  3. 3. LEONIS IT SERVICES INDEX Q4 2017 INDEX SUMMARY ▪ Leonis’s proprietary IT Services Index is comprised of 34 publicly traded IT Services companies ▪ These 34 companies make fall into four distinct verticals: ‒ IT Consulting Services ‒ Managed Services ‒ Management Consulting ‒ Value-added Resellers (VARs) ▪ The Leonis IT Services Index is an equally-weight index • In 2017, the Leonis IT Services Index increased 36.9% and registered robust performance across the board • Trading and transaction multiples in every subcategory were up on a year-over-year basis • VARs registered the largest increase in multiples in 2017 • Key growth drivers and trends emerging in 2017 were: • Robust private equity interest and strategic M&A driving valuations to multi-decade highs • AWS continuing to prevail in shift to cloud infrastructure • Continuing need for UI/UX talent resulting from corporate digital transformations and mobility needs • ServiceNow (NOW) prevailing in the IT Service Management market as companies are looking for solutions to hybrid cloud and on-prem infrastructure 3 IT SERVICES PERFORMANCE IT SERVICES EBITDA MULTIPLES OVER TIMETHE LEONIS IT SERVICES INDEX Source: Pitchbook, Leonis Proprietary Transaction Database, Federal Reserve Economic Data. Note: Market Data as of 12/31/2017. (20.00%) (10.00%) 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Leonis IT Services Index Nasdaq Index 9.8x 9.7x 9.7x 9.8x 10.4x 10.4x 10.2x 10.7x 10.8x 9.0x 9.5x 10.0x 10.5x 11.0x 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Avg. EV/EBITDA Multiple
  4. 4. LEONIS IT SERVICES INDEX SUMMARY METRICS 4 SUMMARY METRICS Source: Pitchbook and Leonis Proprietary Transaction Database. Note: Market Data as of 12/31/2017. KEY METRICS 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Revenue Growth 10.7% 12.0% 13.1% 12.7% 10.0% 8.3% 6.2% 5.6% 5.6% Gross Margin 33.2% 33.3% 33.0% 33.5% 33.2% 32.1% 32.8% 32.8% 32.8% EBITDA Margin 15.1% 14.5% 14.6% 13.8% 13.1% 12.7% 10.7% 11.0% 10.8% EV/EBITDA 10.6x 10.6x 10.6x 10.5x 10.8x 10.1x 9.5x 10.3x 10.9x Revenue Growth 2.2% 2.1% 3.6% 4.1% 5.5% 4.6% 3.4% 3.4% 3.7% Gross Margin 32.5% 32.5% 32.4% 32.3% 32.2% 31.7% 31.4% 31.5% 31.5% EBITDA Margin 11.0% 11.1% 11.5% 11.9% 12.0% 11.3% 9.8% 9.6% 9.5% EV/EBITDA 9.0x 9.4x 9.3x 9.3x 10.2x 10.6x 11.4x 11.1x 11.7x Revenue Growth 8.8% 9.2% 9.5% 9.9% 10.5% 10.1% 10.0% 11.3% 11.3% Gross Margin 60.0% 59.3% 59.6% 59.6% 59.9% 60.6% 61.3% 62.1% 62.1% EBITDA Margin 26.6% 25.4% 19.8% 15.2% 15.8% 16.2% 22.0% 27.9% 26.9% EV/Revenue 4.2x 4.3x 3.8x 3.9x 4.3x 4.4x 4.7x 4.6x 4.7x Revenue Growth 1.7% 4.7% 5.6% 6.3% 7.0% 6.5% 7.0% 7.1% 8.3% Gross Margin 21.9% 21.6% 21.8% 21.4% 21.3% 21.5% 21.2% 15.1% 15.1% EBITDA Margin (0.4%) (2.6%) (2.6%) 2.7% 2.5% 4.3% 3.7% 3.2% 3.2% EV/EBITDA 6.8x 6.7x 6.7x 7.6x 8.0x 9.7x 10.1x 10.8x 10.0x Managed Services VARs SECTOR IT Consulting Management Consulting
  5. 5. ▪ IT Service valuations are highly correlated to profitability, especially at the gross margin level ▪ The distribution of EV/Rev multiples is skewed by Managed Service providers but is centered at ~1.5x EV/ Revenue with average gross margins rates centered around 25% - 30% ▪ Regression of bucketed average gross margins exhibits direct correlation with valuation multiples, yielding an R- squared of .92, extremely high for financial statistics 5 KEY INDUSTRY KPIS(1) THE IMPORTANCE OF GROWTH IN VALUATIONS RECENT TRENDS AND OBSERVATIONS VALUATIONS ALIGNED TO GROSS MARGIN PROFITABILITY ▪ When companies are grouped into ranges, 92% of the change in the valuation is driven by a change in the average gross margin for the bucketed companies (as shown to the left) ▪ When companies are ungrouped, Leonis analysis produces an R- squared of .54 when regressing companies’ gross margin versus their EV/Revenue multiple. A similar analysis for EBITDA produces and R-squared of .49. While a comparable analysis for year-over-year growth produce only a .09 r-squared (as shown below) ▪ The net take-away is clear: in the IT Services Industry, the level of profitability, on average, is a far more critical determinant of value Source: Pitchbook and Leonis Proprietary Transaction Database. Note: Market Data as of 12/31/2017. (1) Excludes Equinix & Limelight Networks EV / EBITDA VS. TOP- LINE GROWTH 7 7 5 3 2 8 12.7% 26.9% 25.9% 34.0% 34.5% 35.4% y = 0.1249ln(x) + 0.1453 R² = 0.921 0% 10% 20% 30% 40% 0 3 6 9 12 15 <0.5x 0.5x -1.0x 1.0x -1.5x 1.5x -2.0x 2.0x -2.5x 2.5x+ EV/Revenue Median Gross Margin Log. (Median Gross Margin) R² = 0.087 R² = 0.5401 R² = 0.4936 (20%) (10%) 0% 10% 20% 30% 40% 50% 60% 70% 80% 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x YoY Revenue Growth Gross Margin EBITDA Margin
  6. 6. LEONIS IT SERVICES INDEX COMPANIES 6
  7. 7. 7 KEY OBSERVATIONS RELEVANT TRANSACTIONS IT CONSULTING TRADING & PRECEDENT MULTIPLES Source: Pitchbook and Leonis Proprietary Transaction Database. Note: Market Data as of 12/31/2017. IT Consulting includes the following company tickers: CTSH, INFY, WIT, TECHM, EPAM, SYNT, TTEC, GLOB, VRTU, ICFI, HURN, PRFT, HCKT, PFSW, EDGW, CTG. IT CONSULTING ▪ Transaction multiples in the IT Consulting landscape continue to remain robust as strategic interest remains strong with growing interest across all size ranges from private equity funds (see Apollo/West and HIG Capital / NIC transaction) - Transaction multiples in this space are highly driven by gross margin for financial buyers and by the type of talent being acquired for the strategic buyers - Vertically-focused IT Consulting businesses still receive a premium relative to their generalist peers ▪ Best in-class providers are posting high thirty percent to mid forty percent gross margins ▪ Q4 saw a pronounced uptick in trading and transaction valuations Date Announced Target Acquirer Deal Size EV / EBITDA Multiple 11/30/17 Aricent Altran Technologies $2,029.7 14.43x 10/10/17 West Apollo Global Management $2,000.0 8.44x 08/14/17 NCI H.I.G. Capital $283.0 15.98x 04/27/15 iGATE Capgemini North America $4,600.8 17.90x Average EV/EBITDA Multiple over last seven years: 12.20x 10.6x 10.6x 10.6x 10.5x 10.8x 10.1x 9.5x 10.3x 10.9x 15% 14% 15% 14% 13% 13% 11% 11% 11% 33% 33% 33% 33% 33% 32% 33% 33% 33% 10% 15% 20% 25% 30% 35% 8.0x 8.5x 9.0x 9.5x 10.0x 10.5x 11.0x 11.5x 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 EV/EBITDA EBITDA Margin Gross Margin
  8. 8. 8 RELEVANT TRANSACTIONS MANAGED SERVICES TRADING & PRECEDENT MULTIPLES Source: Pitchbook and Leonis Proprietary Transaction Database. Note: Market Data as of 12/31/2017. Managed Services includes the following company tickers: EQIX, AKAM, JCOM, LLNW, INAP. MANAGED SERVICES KEY OBSERVATIONS ▪ Unlike the rest of their IT Service peers, Managed Services Providers (MSPs) continue to trade publicly with an anchor to revenue-based multiples, while in the M&A market MSPs receive valuations based on a triangulation of EBITDA and Revenue based valuations - This nuance is driven by the fact that these providers tend to have highly predictable recurring revenue streams and often tend to operate at gross margins meaningfully higher than other IT Service subcategories - In the M&A market, there is a tendency to place a revenue multiple on the managed services revenue and an EBITDA- based multiple on the non-recurring, project-based revenue streams yielding a sum-of-the-parts valuation for businesses that have both recurring and non-recurring revenue streams Date Announced Target Acquirer Deal Size EV / EBITDA Multiple 07/03/17 NCI H.I.G. Capital $289.2 9.61x 03/21/17 Cologix Stonepeak Infrastructure Partners $500.0 17.86x 11/07/16 Datalink Insight Enterprises $297.9 11.72x 11/03/16 Rackspace Apollo, Searchlight Capital $4,300.0 7.00x Average EV/EBITDA Multiple over last seven years: 13.84x 4.2x 4.3x 3.8x 3.9x 4.3x 4.4x 4.7x 4.6x 4.7x60% 59% 60% 60% 60% 61% 61% 62% 62% 9% 9% 10% 10% 10% 10% 10% 11% 11% 8% 18% 28% 38% 48% 58% 68% 3.0x 3.2x 3.4x 3.6x 3.8x 4.0x 4.2x 4.4x 4.6x 4.8x 5.0x 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 EV/Rev Gross Margin YoY Growth
  9. 9. 9 RELEVANT TRANSACTIONS MANAGEMENT CONSULTING TRADING & PRECEDENT MULTIPLES Source: Pitchbook and Leonis Proprietary Transaction Database. Note: Market Data as of 12/31/2017. Management Consulting includes the following company tickers: CAN, CRAI, FCN, NCI, RECN. ▪ Management Consulting businesses have seen some of the most pronounced appreciation in their valuations in the last year, with the average EV/EBITDA trading multiple rising from 9.3x at the end of Q3 2017 to 11.7x at the end of 2017 - This run-up in valuations has been triggered to some extent by upside surprises in earnings for many of the large players in the last 12 months - M&A activity has not been as active in this area as some of the other IT Service subcategories, but the valuations have been at the higher end of the spectrum when transactions do transpire - Indicative of scarcity of great assets in the space MANAGEMENT CONSULTING KEY OBSERVATIONS Date Announced Target Acquirer Deal Size EV / EBITDA Multiple 02/28/17 MediaLink Ascential $207.0 14.79x 11/02/16 Kurt Salmon Accenture $194.0 23.95x 10/31/16 AssetMark Huatai Securities $780.0 12.00x 11/30/15 SRA International Computer Sciences $390.0 9.23x Average EV/EBITDA Multiple over last seven years: 10.54x 9.0x 9.4x 9.3x 9.3x 10.2x 10.6x 11.4x 11.1x 11.7x 11% 11% 12% 12% 12% 11% 10% 10% 10% 33% 33% 32% 32% 32% 32% 31% 32% 32% 9% 14% 19% 24% 29% 34% 8.0x 8.5x 9.0x 9.5x 10.0x 10.5x 11.0x 11.5x 12.0x 12.5x 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 EV/EBITDA EBITDA Margin Gross Margin
  10. 10. 10 RELEVANT TRANSACTIONS VALUE-ADDED RESELLERS (VARS) TRADING & PRECEDENT MULTIPLES Source: Pitchbook and Leonis Proprietary Transaction Database. Note: Market Data as of 12/31/2017. VARs includes the following company tickers: NSIT, PLUS, BBOX, TECD, CDW, ALSN, CNXN, PCMI. VALUE-ADDED RESELLERS (VARS) KEY OBSERVATIONS ▪ Value-Added Resellers (VARs) have seen some of the most pronounced run-up in valuations in the last 12 to 18 months - In the public markets, robust overperformance has led to higher profitability levels, yielding more cash on balance sheets and higher valuations of these companies’ shares - High valuation of stock and stockpiles of cash have led strategic players to accelerate their consolidation of a fragmented subcategory and, in turn, these acquisitions have driven valuation multiples up meaningfully to all-time highs - Private equity players have also driven up multiples as they seek to find platforms and bolt-on acquisitions to execute large-scale roll-up strategies Date Announced Target Acquirer Deal Size EV / EBITDA Multiple 09/29/17 OnX Cincinnati Bell $201.0 6.93x 02/27/17 Avnet Tech Tech Data $2,593.0 8.20x 01/06/17 Datalink Insight Enterprises $267.9 11.13x 09/01/16 Mphasis Blackstone Group $818.1 5.96x Average EV/EBITDA Multiple over last seven years: 7.59x 6.8x 6.7x 6.7x 7.6x 8.0x 9.7x 10.1x 10.8x 10.0x 2% 1% 1% 3% 3% 4% 3% 3% 3% 15% 15% 15% 15% 15% 15% 15% 15% 15% 0% 2% 4% 6% 8% 10% 12% 14% 16% 3.0x 4.0x 5.0x 6.0x 7.0x 8.0x 9.0x 10.0x 11.0x 12.0x 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 EV/EBITDA EBITDA Margin Gross Margin
  11. 11. APPENDIX 11 I. IT SERVICES INDEX TRADING INFORMATION
  12. 12. TRADING METRICS – IT SERVICES 12 Source: Pitchbook and Leonis Proprietary Transaction Database. Note: Market Data as of 12/31/2017. IT Consulting (USD millions, except per share date) Net Debt / Share Price Market (Cash) /LTM EV/Revenue EV/EBITDA P/E Company 12/31/2017 Cap EBITDA CY2017E CY2018E CY2017E CY2018E CY2017E CY2018E PEG Cognizant Technology Solutions $71.02 $41,876.6 (0.3x) 2.6x 2.3x 14.4x 11.0x 27.9x 18.3x 2.0x Infosys $16.22 $35,525.0 (0.8x) 2.8x 2.6x 10.9x 10.5x 17.3x 16.0x 2.8x Wipro $5.47 $23,686.6 0.8x 2.3x 2.2x 11.4x 11.2x 21.1x 19.2x 6.0x Tech Mahindra $7.87 $7,700.2 (0.4x) 1.4x 1.3x 9.3x 9.4x 16.7x 13.9x 1.4x EPAM Systems $107.43 $5,673.7 (2.8x) 3.6x 3.0x NM 16.3x 57.4x 32.4x 1.4x Syntel $22.99 $1,904.8 1.3x 2.4x 2.5x 7.7x 9.5x NM 12.7x NM Teletech Holdings $40.25 $1,845.4 1.3x 1.4x 1.3x 16.1x 9.6x 56.7x 20.0x 2.1x Globant $46.46 $1,630.7 (0.6x) 3.9x 3.3x NM 18.9x 46.0x 43.4x 1.7x Virtusa $44.08 $1,294.4 (0.9x) 1.4x 1.2x NM 18.3x 113.0x 54.8x 2.2x ICF $52.50 $978.7 2.0x 1.0x 1.0x 10.6x 9.6x 21.9x 18.1x 10.0x Huron Consulting Group $40.45 $895.1 (3.0x) 1.7x 1.7x 10.3x 11.4x 23.0x 31.4x NM Perficient $19.07 $665.7 1.3x 1.5x 1.4x 14.5x 9.2x 32.9x 25.4x NM The Hackett Group $15.71 $450.2 0.2x 1.6x 1.5x 12.0x 8.7x 23.8x 20.1x 34.8x PFSweb $7.43 $141.3 6.7x 0.6x 0.5x 22.8x 7.1x NM 39.1x 8.8x Edgewater Technology $6.24 $87.5 5.8x 0.7x 0.7x 12.3x 9.4x NM NM NA Computer Task Group $5.10 $79.0 (2.0x) 0.2x 0.2x NM 8.0x NM 18.9x NM Average $7,777.2 0.5x 1.8x 1.7x 12.7x 11.1x 38.1x 25.6x 6.7x Median $1,462.6 (0.1x) 1.6x 1.5x 11.7x 9.6x 25.8x 20.0x 2.2x
  13. 13. TRADING METRICS – IT SERVICES (CONTINUED) 13 Source: Pitchbook and Leonis Proprietary Transaction Database. Note: Market Data as of 12/31/2017. Managed Services (USD millions, except per share date) Net Debt / Share Price Market (Cash) /LTM EV/Revenue EV/EBITDA P/E Company 12/31/2017 Cap EBITDA CY2017E CY2018E CY2017E CY2018E CY2017E CY2018E PEG Equinix $453.22 $35,457.1 5.0x 10.1x 8.7x NM 18.0x NM 69.3x 3.3x Akamai Technologies $65.04 $11,001.6 0.4x 4.4x 4.0x 13.7x 11.3x 36.3x 40.9x 6.2x j2 Global $75.03 $3,632.1 2.0x 3.8x 3.6x 11.3x 8.4x 24.0x 19.3x 0.7x Limelight Networks $4.41 $485.8 (2.1x) 2.3x 2.2x NM 12.9x NM NM NA Internap Network Services $15.71 $327.5 7.0x 3.0x 3.0x NM 8.7x NM NM NA Average $10,180.8 2.5x 4.7x 4.3x 12.5x 11.9x 30.2x 43.2x 3.4x Median $3,632.1 2.0x 3.8x 3.6x 12.5x 11.3x 30.2x 40.9x 3.3x Management Consulting (USD millions, except per share date) Net Debt / Share Price Market (Cash) /LTM EV/Revenue EV/EBITDA P/E Company 12/31/2017 Cap EBITDA CY2017E CY2018E CY2017E CY2018E CY2017E CY2018E PEG Accenture $153.09 $94,405.7 (0.7x) 2.5x 2.3x 17.0x 14.0x 28.1x 23.0x 3.3x FTI Consulting $42.96 $1,630.6 2.2x 1.1x 1.0x 9.8x 8.9x 21.0x 18.4x NM Navigant Consulting $19.41 $891.3 1.4x 1.1x 1.1x 7.6x 7.4x 16.3x 15.7x 3.7x Resources Connection $15.45 $484.7 (0.4x) 0.8x 0.7x 12.8x 11.8x 27.6x 21.2x NM Charles River Associates $44.95 $364.5 (0.7x) 0.9x 0.9x 11.4x 5.6x 30.2x 23.5x 2.1x Average $19,555.4 0.4x 1.3x 1.2x 11.7x 9.5x 24.6x 20.3x 3.0x Median $891.3 (0.4x) 1.1x 1.0x 11.4x 8.9x 27.6x 21.2x 3.3x
  14. 14. TRADING METRICS – IT SERVICES (CONTINUED) 14 Source: Pitchbook and Leonis Proprietary Transaction Database. Note: Market Data as of 12/31/2017. VARs (USD millions, except per share date) Net Debt / Share Price Market (Cash) /LTM EV/Revenue EV/EBITDA P/E Company 12/31/2017 Cap EBITDA CY2017E CY2018E CY2017E CY2018E CY2017E CY2018E PEG CDW $69.49 $10,636.3 3.2x 0.9x 0.9x 13.0x 11.2x 27.1x 20.8x 3.1x Tech Data $97.97 $3,737.9 2.8x 0.1x 0.1x 14.6x 7.1x 17.8x 16.7x 0.6x Also Holding $136.87 $1,754.8 1.1x 0.2x 0.2x 12.1x 9.2x 19.0x 14.8x 6.8x Insight Enterprises $38.29 $1,370.5 1.5x 0.3x 0.2x 9.1x 6.3x 16.5x 10.9x 0.6x ePlus $75.20 $1,065.7 (0.2x) 0.7x 0.7x 10.5x 10.5x 20.9x 20.0x 2.0x PC Connection $26.21 $702.8 (0.7x) 0.2x 0.2x 7.0x 6.0x 14.6x 12.5x 1.4x PCM $9.90 $116.6 5.6x 0.1x 0.1x 6.2x 5.7x 7.1x 7.0x 2.1x Black Box $3.55 $53.7 116.3x 0.2x 0.2x 8.6x NM NM NM NA Average $2,429.8 16.2x 0.3x 0.3x 10.1x 8.0x 17.6x 14.7x 2.4x Median $1,218.1 2.1x 0.2x 0.2x 9.8x 7.1x 17.8x 14.8x 2.0x
  15. 15. OPERATING STATISTICS – IT SERVICES 15 Source: Pitchbook and Leonis Proprietary Transaction Database. Note: Market Data as of 12/31/2017. IT Consulting (USD millions, except per share date) Market Enterprise Debt / LTM Revenue Growth 2017E Margin (%) Company Cap Cash Debt Value Total Cap Revenue Y-o-Y 3-yr CAGR Gross EBITDA Cognizant Technology Solutions $41,876.6 $1,577.0 $823.0 $37,986.6 1.9% $14,444.0 8.9% 13.5% 36.3% 17.8% Infosys $35,525.0 $3,573.2 $1,086.9 $31,166.4 3.0% $10,505.1 5.7% 7.2% 34.1% 25.8% Wipro $23,686.6 $786.6 $2,224.0 $20,065.6 8.6% $8,318.8 3.2% 3.5% 27.4% 20.4% Tech Mahindra $7,700.2 $535.1 $219.6 $6,647.4 2.8% $4,560.7 10.1% 10.6% 25.7% 14.9% EPAM Systems $5,673.7 $512.5 $25.0 $5,186.2 0.4% $1,364.7 23.3% 25.8% 29.2% 10.0% Syntel $1,904.8 $75.4 $388.0 $2,183.8 16.9% $921.9 (6.2%) 0.8% 41.3% 31.5% Teletech Holdings $1,845.4 $78.8 $255.0 $2,028.7 12.1% $1,395.7 9.7% 4.5% 23.3% 8.8% Globant $1,630.7 $35.3 $10.6 $1,596.3 0.6% $385.3 25.4% 26.4% 32.3% 15.2% Virtusa $1,294.4 $162.3 $105.2 $1,358.9 7.5% $918.7 24.5% 27.6% 24.5% 5.0% ICF $978.7 $6.5 $230.1 $1,202.3 19.0% $1,197.5 1.8% 6.1% 36.2% 9.3% Huron Consulting Group $895.1 $8.7 $374.3 $1,260.8 29.5% $797.7 (0.9%) 3.5% 37.3% 16.7% Perficient $665.7 $2.4 $65.0 $728.2 8.9% $471.4 (5.9%) 3.2% 31.2% 10.4% The Hackett Group $450.2 $16.2 $22.0 $456.0 4.7% $286.5 0.6% 7.8% 34.0% 13.4% PFSweb $141.3 $12.8 $51.2 $179.7 26.6% $336.6 4.5% 12.7% 22.5% 2.4% Edgewater Technology $87.5 $12.8 $5.0 $79.7 5.4% $116.6 (6.9%) 1.2% 40.7% 5.7% Computer Task Group $79.0 $11.4 $0.0 $67.6 0.0% $304.1 (8.3%) (8.6%) 19.7% (10.6%) Average $462.9 $367.8 $7,012.1 9.2% $2,895.3 5.6% 9.1% 31.0% 12.3% Median $55.4 $162.4 $1,477.6 6.5% $920.3 3.8% 6.6% 31.7% 11.9%
  16. 16. 16 OPERATING STATISTICS – IT SERVICES (CONTINUED) Source: Pitchbook and Leonis Proprietary Transaction Database. Note: Market Data as of 12/31/2017. Management Consulting (USD millions, except per share date) Market Enterprise Debt / LTM Revenue Growth 2017E Margin (%) Company Cap Cash Debt Value Total Cap Revenue Y-o-Y 3-yr CAGR Gross EBITDA Accenture $94,405.7 $3,681.7 $25.2 $91,539.8 0.0% $37,814.4 7.0% 5.3% 30.7% 15.0% FTI Consulting $1,630.6 $158.0 $461.1 $1,933.8 22.0% $1,781.9 (1.6%) 0.7% 33.5% 11.0% Navigant Consulting $891.3 $9.0 $176.7 $1,059.0 16.5% $1,043.1 4.2% 7.4% 71.5% 14.5% Resources Connection $484.7 $56.3 $48.0 $484.7 9.0% $433.7 (26.5%) (9.5%) 35.7% 6.1% Charles River Associates $364.5 $20.9 $0.0 $344.4 0.0% $352.6 11.0% 5.1% 26.9% 8.3% Average $785.2 $142.2 $19,072.3 9.5% $8,285.1 (1.2%) 1.8% 39.7% 11.0% Median $56.3 $48.0 $1,059.0 9.0% $1,043.1 4.2% 5.1% 33.5% 11.0% Managed Services (USD millions, except per share date) Market Enterprise Debt / LTM Revenue Growth 2017E Margin (%) Company Cap Cash Debt Value Total Cap Revenue Y-o-Y 3-yr CAGR Gross EBITDA Equinix $35,457.1 $1,600.0 $10,025.6 $43,853.1 22.0% $4,110.9 20.9% 20.1% 41.1% 31.8% Akamai Technologies $11,001.6 $368.2 $657.1 $10,906.8 5.6% $2,455.7 6.6% 9.6% 72.3% 32.1% j2 Global $3,632.1 $237.7 $999.2 $4,228.8 21.6% $1,053.3 27.3% 22.7% 64.7% 33.4% Limelight Networks $485.8 $20.7 $0.0 $428.2 0.0% $180.0 7.6% 3.2% 38.8% (28.3%) Internap Network Services $327.5 $12.0 $507.6 $827.1 60.8% $284.8 (6.0%) (4.3%) 50.8% (5.9%) Average $447.7 $2,437.9 $12,048.8 22.0% $1,616.9 11.3% 10.3% 53.5% 12.6% Median $237.7 $657.1 $4,228.8 21.6% $1,053.3 7.6% 9.6% 50.8% 31.8%
  17. 17. 17 OPERATING STATISTICS – IT SERVICES (CONTINUED) Source: Pitchbook and Leonis Proprietary Transaction Database. Note: Market Data as of 12/31/2017. VARs (USD millions, except per share date) Market Enterprise Debt / LTM Revenue Growth 2017E Margin (%) Company Cap Cash Debt Value Total Cap Revenue Y-o-Y 3-yr CAGR Gross EBITDA CDW $10,636.3 $97.9 $3,429.9 $13,968.3 24.4% $14,845.4 6.7% 8.1% 15.3% 7.1% Tech Data $3,737.9 $562.6 $1,919.9 $5,095.1 33.9% $33,110.0 25.9% 5.4% 3.7% 1.0% Also Holding $1,754.8 $58.6 $226.2 $1,922.5 11.4% $8,832.9 2.2% 0.6% 5.4% 1.5% Insight Enterprises $1,370.5 $236.4 $549.7 $1,683.8 28.6% $6,387.1 18.2% 6.7% 11.2% 2.8% ePlus $1,065.7 $60.2 $37.1 $1,042.6 3.4% $1,397.4 10.2% 7.8% 21.2% 7.0% PC Connection $702.8 $62.3 $0.0 $640.5 0.0% $2,885.2 9.2% 6.2% 12.7% 3.1% PCM $116.6 $8.3 $205.6 $313.9 63.8% $2,216.6 3.3% 18.1% 14.4% 2.3% Black Box $53.7 $30.5 $129.2 $152.4 70.6% $804.3 (9.0%) (6.1%) 30.6% 2.2% Average $139.6 $812.2 $3,102.4 29.5% $8,809.9 8.3% 5.8% 14.3% 3.4% Median $61.3 $215.9 $1,363.2 26.5% $4,636.1 8.0% 6.4% 13.6% 2.5%

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