Valuation of Steinkeller Solutions

1. Executive Summary
Alec Glynn| Zach Narcross| Andy Newman| Collin O’Sullivan
Steinkeller
Solutions
2019 William Blair Case Competition − October 21, 2019

2. Table of Contents
Company Overview
Appendix
Valuation Analysis
Strategic Options
Final Thoughts
Industry Drivers
Executive Summary

3. Executive Summary

4. Company Overview
• Steinkeller Solutions offers specialized consulting
services focused around staffing and hiring within four
niche focus areas including: Energy, Healthcare IT, Life
Sciences, and Information Technology.
• They also offer services such as consultation on training
and project management as well as ERP and technology
implementation.
Service Offerings From Consultants
• Information Technologies: ERP implementation,
training, support, and project management.
• Life Sciences: Management solutions for highly
regulated FDA compliance projects.
• Healthcare IT: Non-clinical IT implementation,
upgrades, and optimization.
• Energy: General consulting around the rapidly changing
electric, oil, and gas utilities.
Value Proposition
• High-quality knowledge and insights into four highly
specialized, high-margin, and mission-critical industries.
• Direct long-term customer relationships which fosters trust
and repeat use. This provides visibility on the company side,
which Steinkeller can then relay to their consultants.
• Access to urgent, high-stakes positions that require
immediate focus as shown in their 24-48 hour turnaround.
• Proprietary personnel development process to train
consultants that need to be highly-skilled and quickly
deployed.
Key Selling Points
• Ability to expand by specializing even further into already
penetrated markets by targeting sub-markets that fit their
proven criteria for success.
• Excellent reputation for providing top talent, enabling
valuable client relationships that allows for a proactive and
continuous dialogue.
• Fully established infrastructure that allows for growth.
• Proprietary personnel development to quickly train the
consultants that are being drawn in due to Steinkeller’s
knowledge of upcoming projects within niche verticals.
Competitive Advantages

5. SWOT
Strengths
Opportunities
Weaknesses
Threats
• Strong historical gross margins of +30% within
the past several years.
• Deep understanding of highly-specialized
verticals.
• Valued reputation across both prospective
consultants and clients.
• Proprietary personnel development program.
• Expand into sub-markets, especially within the
energy and healthcare sectors.
• Expand into new markets as needs arise within
specialized fields, similar to the expansion into
ERP implementation.
• Acquisition of target offering access to a market
similar to Steinkeller’s current verticals where
Steinkeller is seeking visibility.
• Limited exposure to the energy market.
• National coverage model unique to Steinkeller;
regional offices would increase visibility even
further.
• Despite confidence in organic growth,
management team is seeking inorganic growth
through acquisition in the near future.
• Further growth from digital staffing solutions
may impact the competitive landscape and limit
growth.
• Increasing regulation within Steinkeller’s niche
industries.
• Increased focus on UX/UI for medical
technologies may limit need for IT staffing.

6. Growth Initiatives
Acquisitions for Inorganic Growth
• Continued growth using existing model: embedded producer ramping,
investment in further talent development, and new producer hiring.
• Expansion into existing markets: capture greater market share as current
verticals continue their long-term growth.
• Target growth into sub-markets: further specialize and split divisions further,
in accordance with current company culture.
• Tackle new markets: address new opportunities using advantageous visibility
and encouraging performance from desks.
Focuses for Maximizing Sales
• To maximize the value within their sales process, Steinkeller
Solutions needs to focus on the growth they can achieve by
expanding into subsectors.
• By focusing on their niche sectors and diving further into
them, Steinkeller Solutions is utilizing their unique value
proposition and maintaining focus on what they do best.
• In an acquisition, Steinkeller should seek to buy a highly-
rated company that would give increased exposure to sub-
sectors within IT. This is not only the industry with the
greatest projected growth, but also the industry that will
continue to change and require specialized knowledge that
only a select number of staffing companies have access to.
Top Initiatives
Description Rationale
Culver Careers is a staffing
company which focuses on
information technology, sales,
marketing, and manufacturing.
Edgelink, LLC is a highly rated
staffing company with focuses
spanning information technology,
medical technology, and energy
industries.
With a strong reputation for talented information technology staffing, Culver
Careers offers the chance to expand further into the highest growth area of
Steinkeller’s business. Focus around cloud computing, cybersecurity, and
digital design provides valuable new knowledge and insight.
Edgelink provides a strong focus around R&D within the IT space that would
bring deeper knowledge to Steinkeller Solutions. As a ClearlyRated Best of
Staffing winner 10 years in a row, Edgelink provides customer loyalty similar
to that of Steinkeller Solutions.

7. Professional Staffing Industry Highlights
Growth by Volume Breakdown
Professional Staffing CompaniesIndustry Overview
5-Year CAGR 12.00%
Technologies
5-Year CAGR 21.00%
Life Sciences
5-Year CAGR 3.00%
Healthcare IT
5-Year CAGR 5.00%
Energy
Historical
5-Year CAGR 16.00%
Technologies
5-Year CAGR 10.00%
Life Sciences
5-Year CAGR 5.00%
Healthcare IT
5-Year CAGR 8.00%
Energy
Projected
Sources: Bloomberg, Staffing Industry Analyst, Deloitte, MarketWatch, American
Staffing
• Staffing is usually broken into four main areas: temporary and
contract staffing. recruiting and permanent placement,
outsourcing and outplacement, human resource consulting
• In the U.S., there is a saturated market of about 20,000 staffing and
recruiting
• Approximately 55% of companies and 74% of offices are in the
temporary and contract staffing sector of the industry
• Temporary staffing is growing at an exponential rate and
outpacing permanent staffing roles

8. Professional Staffing Industry Macroeconomic Trends
• Half (49%) of staffing employees say it’s a way to get a
permanent job
• Nine out 10 said professional staffing work made them
more employable
• One-third (35%) were offered a permanent job by a
client where they worked on an assignment, and two-
thirds (66%) of those accepted the offers of permanent
employment.
Industry Sales Increased 3.9% in 2018Industry Trends
• Main drivers: number of temporary employees,
national unemployment rate, corporate profit, business
sentiment index
• Referrals from existing candidates jumped to the top of
the list of single best talent sources this year—nearly
30% of respondents said referrals were the absolute
best source of high-quality talent
• The market correlates relatively similar to the overall
business market; the market lags when
Market Risks
• Increased complications with background screening processes – to
protect individuals’ interests and those of their clients
• Social media is disrupting the industry; some firms are bypassing
professional firms and directly marketing to individuals
• Additional legislative guidelines are being implemented for
workers, specifically centering around compensation and benefits
• Digital Staffing Platforms and Automation may cause disruption
within the industry
Market Drivers
0
50
100
150
200
2011 2012 2013 2014 2015 2016 2017 2018
Temporary and Contract Search and Placement
Sources: Bloomberg, Staffing Industry Analyst, IBIS, Silverstone Group, CNBC

9. Professional Staffing Industry Trends and Drivers
• Strong push for STEM skills, specifically focusing on big data and IT
services
• Strong focus on SAP, Oracle, Workday, and ServiceNow
• New shift in a desire for talent to have some experience in
automation and artificial intelligence
• Approximately 2.75 million Americans make up the workforce
• Over 80% of U.S countries are in need of a technology role to be filled
Life Sciences
• Strong focus on Regulatory & Scientific, Pharmaceutical, and Medical
Device
• 94% of all life science companies are actively hiring; hiring at least
one employee in the last twelve months
• Industrial Biotech and Drugs & Pharmaceuticals are the placement
leaders
• Consolidation of the pharmacy benefit management and
reimbursement sectors is putting more pressure on controlling
healthcare costs at large and on drug prices in particular
Technologies
• Healthcare staffing is an $11.1 billion industry in the United States, with
expected growth due to aging population, increased insured population
through the Affordable Care Act, and professional shortages
• 9% of all temporary employed professional staffers; average duration of
15 weeks per assignment
• Strong focus on Epic and Cerner
• Issues pressing the field center around medical device regulations,
uncertainty around reimbursement rates, end to end compliance, and
quality system upgrades / deployments
Energy
• Strong focus on Construction, Professional and Business,
Manufacturing, and Wholesale Trade
• Oil and Gas production added the most new jobs in the traditional
energy sectors as efficiencies and increased prices brought
thousands of workers back into the oil and gas fields
• Traditional Energy and Energy Efficiency sectors in 2018 employed
approximately 6.7 million Americans or 4.6% of a workforce of
roughly 147 million.
Healthcare IT
Sources: Harris Williams, Utility Drive, ASA, Bloomberg

10. Comparable Company Analysis
Derived ValuationCommentary
• Steinkeller’s hyper-specialization lends itself to
smaller revenues than many available comparables,
despite similar business lines and offerings
• Comparable companies reflect traditional staffing
and general staffing
• Steinkeller’s unique niche between the two
commands an optimistic multiple

11. Precedent Transaction Analysis
Derived ValuationCommentary
• Precedent transactions reflect traditional staffing
and general staffing
• Steinkeller’s diverse staffing placements may require
a more specific financial or strategic buyer
• Recent transactions have centered around strategic buyer
opportunities rather than financial sponsors

12. Discounted Cash Flow

13. Leveraged Buyout Analysis

14. Valuation Overview

17. Targeted Strategic Buyers

18. Targeted Financial Buyers

19. Targeted Financial Buyers

20. Selected Buyers
StrategicFinancial
FFL Partners is a PE firm focused on middle-market growth investments. FFL encourages
investment and involvement of existing management teams, as well as continuing to acquire
add-ons that will grow the business. Additionally, FFL has a multi-year investment focus of
HR & consulting services that have top-level management teams, high growth potential, and
differentiated offerings. FFL is a clear financial leader in investments of this type, having
invested nearly $800M in similar companies over two decades. Steinkeller Solutions is a
prime candidate to continue to meet FFL’s high growth & profitability expectations, while
FFL is poised well to be the partner Steinkeller needs for the next level.
APEX Systems is an established market leader in highly-specialized staffing services across
eleven industries – four of which are common to Steinkeller Solutions (energy & utilities,
healthcare, life sciences, and technology). APEX’s combination of advanced tech resources,
industry recognition, and wide scope provide the foundation to successfully roll out new
Steinkeller platforms under one umbrella. Additionally, APEX’s company network, ASGN,
helps to provide ample cash flow, acquisition experience, and subsidiaries to drive a
successful transaction and future growth.

21. Appendix

22. Pro-Forma Statement of Income

23. Pro-Forma Balance Sheet

24. Discounted Cash Flows

25. Leveraged Buyout Analysis