Q Market Report

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1 Q3 218 Market Report Mergers & Acquisitions Private Equity Financial Advisory 441 Northside Parkway Suite 395 Atlanta, Georgia 3327 (44) Member SIPC and FINRA

2 CONTACT US Frank H. Bo Briggs, III (44) Edward S. Croft, III (44) OVERVIEW Since 1996, Croft & Bender has provided superior M&A, private capital raising, and financial advisory services to middle-market and emerging growth companies. The senior professionals have completed more than 1, corporate finance engagements, resulting in deep experience across a broad set of industries and types of transactions. In addition, the firm manages C&B Capital, three growth equity funds with over $82 million under management. R. Neale Fisher nfisher@croft-bender.com (44) Ronald B. Goldman rgoldman@croft-bender.com (44) Steve B. Tye stye@croft-bender.com (44) Erik M. Zalenski ezalenski@croft-bender.com (44) BUSINESS SERVICES Information Services Marketing Services Financial Services Outsourced Services A/R Management Staffing Consulting BROAD INDUSTRY EXPERTISE TECHNOLOGY Software/SaaS Financial Technology Human Capital Management Internet Marketing E-Commerce Security/Compliance Business Intelligence Telecommunications INDUSTRIAL General Manufacturing Building Products Logistics Specialty Contracting Distribution Industrial Services Chemicals Durable Goods Michael J. Janovec Vice President mjanovec@croft-bender.com (44) Kyle C. Schickner Vice President kschickner@croft-bender.com (44) HEALTHCARE Healthcare IT Clinical Services Outsourced Services Alternate Site Care Medical Products/Distribution CONSUMER Products/Services Franchising Restaurants Retail Entertainment/Leisure Matthew A. Veal Vice President mveal@croft-bender.com (44) W. Christopher Schatzman Business Development cschatzman@croft-bender.com (44) MERGERS & ACQUISITIONS Buy side/sell side Enterprise Values up to $3 million Exceptions to typical EBITDA criteria: High growth companies Technology companies Special situations DEAL CRITERIA EQUITY & DEBT CAPITAL RAISES Middle-market companies Emerging growth businesses Large market opportunity Experienced management team Differentiated product or service Greater than $1 million capital need 441 Northside Parkway Suite 395 Atlanta, Georgia 3327 Phone: (44) Fax: (44) Member SIPC and FINRA 2

3 REPRESENTATIVE TRANSACTIONS BUSINESS SERVICES TECHNOLOGY INDUSTRIAL HEALTHCARE CONSUMER * * Secretariat is a leading provider of dispute resolution advisory services to public and private sector clients across the world. Sayers is a leading provider of data center infrastructure, cybersecurity solutions, professional services and other IT products and solutions. Regent is a leading manufacturer and distributor of custom cabinets and countertops to the multi-family construction industry. HCSC is a leading provider of hospice and palliative care services in the Southeast. Carousel Designs is a leading online provider of original and customdesigned baby bedding, fabric and nursery décor. * has merged with a portfolio company of Mudlick Mail provides data-driven, direct mail and related marketing solutions to small and medium-sized businesses. ControlScan is a leading provider of security and compliance solutions. The Erosion Company provides erosion control and related site services to the construction industry. Dominion Youth Services a leading provider of behavioral and mental health support services to the youth and adolescent market. Service Brands is a leading multiconcept residential services franchisor. has sold Harris Research, Inc. Franchisor of to Juniper Landscaping is a leading provider of landscaping services to commercial customers. ACP is a leading provider of full-featured thin client management and location-based mobility software. VNS is a leading supplier and manufacturer of building products. Nuesoft Technologies is a leading provider of SaaS solutions and RCM services for the healthcare industry. HRI is a leading franchisor of in-home consumer services. * a portfolio company of has received an equity investment from has acquired multiple franchisee markets Coverall is a leading franchisor of commercial cleaning services. Bridge2 Solutions provides the leading SaaS platform enabling the redemption of loyalty reward points for goods and services. USPack is a leading provider of assetlight, same-day delivery and last mile logistics services. ML Healthcare provides financing and access to care for patients unable to afford medical services. PODS is a leading provider of moving and portable storage for consumers and corporations. *Represents transactions in which C&B Capital participated as an investor 3

4 FEATURED TRANSACTION COMPANY OVERVIEW Dominion Youth Services ( DYS ) is a leading provider of behavioral and mental health support services primarily to the youth and adolescent market in the Commonwealth of Virginia The Company employs approximately 7 highly-trained and credentialed healthcare professionals who provide personalized care in a combination of community-, home-, and facility-based settings Dominion Youth Services a leading provider of behavioral and mental health support services primarily to the youth and adolescent market. DEAL OVERVIEW Croft & Bender was engaged to help DYS evaluate strategic alternatives, with a focus on providing liquidity to the current owners who were not active in the business, while providing management a partner to help facilitate growth Croft & Bender worked with the Company to build a financial model, develop marketing materials, conduct management presentations, manage the diligence process and negotiate with potential buyers Croft & Bender successfully negotiated the sale of the Company to Century Park Capital Partners 4

5 KEYCAPITAL MARKETS DATA Public Equity Markets Middle Market Deal Volume ($ in billions) 8.% 6.% 4.% 74.2% 62.5% 51.9% $342 $347 $347 $327 $396 $385 $385 $38 $28 $27 2.%.% (2.%) 9/15 3/16 9/16 3/17 9/17 3/18 9/18 S&P 5 NASDAQ Dow Jones ($ in billions) Private Equity Dry Powder '1 '11 '12 '13 '14 '15 '16 '17 YTD YTD Q3 '17 Cash on Corporate Balance Sheets ($ in trillions) $615 $594 $557 $669 $681 $743 $83 $1,14 $1,29 $5.3 $5.4 $5.6 $5.9 $6. $5.7 $5.9 $6.4 $6.1 '1 '11 '12 '13 '14 '15 '16 '17 Middle Market EBITDA Multiples '1 '11 '12 '13 '14 '15 '16 '17 Middle Market Leverage Multiples x x x 4.5x x 5.3x 5.3x 5.5x 5. '1 '11 '12 '13 '14 '15 '16 '17 LTM Note: Middle-market transactions are defined as those with a disclosed transaction value of less than $1 billion. '1 '11 '12 '13 '14 '15 '16 '17 YTD 5

6 KEY ECONOMIC DATA Real GDP Growth Industrial Production (1) 5.% 11 4.% 18 3.% 16 2.% 14 1.% 12.% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Consumer Confidence (2) Unemployment Rate 13 8.% 12 7.% % 5.% 8 4.% 7 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 3.% Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3 Retail Sales Consumer Spending ($ in billions) $1,4 $1,3 $1,2 $1,1 ($ in trillions) $15 $14 $13 $12 $11 $1, Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3 $1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 [1] Indexed relative to 212. [2] Indexed relative to

7 AVERAGE PUBLIC MULTIPLES & U.S. DEAL ACTIVITY BY SELECT INDUSTRY GROUPS General Industrial IT Consulting & Other Services 1 1x x 2,414 2,37 2,128 2,115 2,16 11.x x 9.9x 1.5x 1.3x x * Building Products 3, 2,5 2, 1,5 1, x x x 1.7x 11.5x 11.9x 1.7x x * Trading Companies & Distributors x x x 11.1x 1.7x x x * x x x x * Retailing Consumer Services 15x 1x 5x x x x 13.5x x 1.5x 1.5x * x x 1,18 1, x x 13.9x 12.9x 2.3x 2.3x 2.5x * 1,2 1, *Latest twelve months as of September 3, 218 Note: EV = Enterprise Value 7

8 AVERAGE PUBLIC MULTIPLES & U.S. DEAL ACTIVITY BY SELECT INDUSTRY GROUPS Healthcare Facilities Healthcare Software 1 1 1x x x x x 1.9x x * Healthcare Services 3x x x 25.9x 27.x 24.x 1x 21.1x x x 4.1x 4.5x 5x x * Data Processing & Outsourced Services 1 1x x x 1.1x x 1.x 1.x 1.x x 1x 5x x 15.x 15.9x 4.7x 4.5x 4.7x 2.5x 19.5x 5.9x x * x * Application Software General Software & Services 3x 25x 15x 1x 5x x x x 5.1x , x 1x 5x 1,376 1,519 1,314 1,45 1,6 1,364 1, x 17.9x x x 3.x 3. 4.x 4. 4 x * x * *Latest twelve months as of September 3, 218 Note: EV = Enterprise Value 8

9 $299 $346 $382 $448 $537 $563 $614 $637 $467 $18 $23 $22 $22 $39 $44 $39 $43 $47 $31 $45 $42 $48 $71 $82 $76 $82 $84 PRIVATE CAPITAL DATA U.S. VC Activity by Year Median VC Round Size by Stage $1 $9 $8 $7 $6 $5 $4 $3 $2 $1 $ Deal value ($B) # of deals closed 9,272 7,871 6,752 5,399 1,544 1,661 9,259 9,87 6,583 '1 '11 '12 '13 '14 '15 '16 '17 YTD 12, 1, 8, 6, 4, 2, ($ in millions) $14 $12 $1 $8 $6 $4 $2 $ Angel/Seed Early VC Later VC $1. $5.6 $12. $7. $1. $1.2 '1 '11 '12 '13 '14 '15 '16 '17 YTD U.S. Growth Equity Activity by Year U.S. Growth Equity Deal Size Metrics $5 $45 $4 $35 $3 54 Deal value ($B) # of deals closed , ($ in millions) $2 $15 Median pre-money valuation Median deal size $162.5 $19. $25 5 $1 $2 $15 $ $5 $4. $46. $5 1 $ '1 '11 '12 '13 '14 '15 '16 '17 YTD $ '1 '11 '12 '13 '14 '15 '16 '17 YTD $8 $7 $6 $5 $4 $3 $2 $1 $ U.S. Private Equity Activity by Year Deal value ($B) # of deals closed 4,291 4,443 4,437 4,542 3,56 3,167 3,469 3,269 2,811 '1 '11 '12 '13 '14 '15 '16 '17 YTD 5,5 5, 4,5 4, 3,5 3, 2,5 2, 1,5 1, 5 U.S. Private Equity Deals by Deal Size (# of deals) 2,5 2, 1,5 1, 5 Under $25M $25M-$1M $1M-$5M '1 '11 '12 '13 '14 '15 '16 '17 YTD 9

10 DISCLOSURES Croft & Bender LP ( is a leading middle market investment bank focused on the advisory needs of clients nationwide. The firm has extensive industry knowledge, transaction expertise, and a commitment to its clients success. Croft & Bender LP provides sell-side and buy-side advisory, capital raising, and financial advisory. Investment banking services are provided by Croft & Bender, a registered broker-dealer and member of FINRA and SIPC. THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS AND COPYRIGHTS OWNED BY THIRD-PARTY INFORMATION PROVIDERS. NONE OF THE THIRD-PARTY INFORMATION PROVIDERS IS ENDORSING THE OFFERING OF, AND SHALL NOT IN ANY WAY BE DEEMED AN ISSUER OR UNDERWRITER OF, THE SECURITIES, FINANCIAL INSTRUMENTS OR OTHER INVESTMENTS DISCUSSED IN THIS REPORT, AND SHALL NOT HAVE ANY LIABILITY OR RESPONSIBILITY FOR ANY STATEMENTS MADE IN THE REPORT OR FOR ANY FINANCIAL STATEMENTS, FINANCIAL PROJECTIONS OR OTHER FINANCIAL INFORMATION CONTAINED OR ATTACHED AS AN EXHIBIT TO THE REPORT. FOR MORE INFORMATION ABOUT THE MATERIALS PROVIDED BY SUCH THIRD PARTIES, PLEASE CONTACT US AT THE ADDRESSES OR NUMBERS AT THE BEGINNING OF THE REPORT. The information and views contained in this report were prepared by Croft & Bender LP. It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Croft & Bender to be reliable, but Croft & Bender makes no representation as to the accuracy or completeness of such information. Transaction numbers include those transactions that closed during the year they appear under and the industry classification assigned to the target by S&P Capital IQ. Croft & Bender and/or its affiliates act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Croft & Bender and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Croft & Bender s judgment and are subject to change without notice. The financial instruments discussed in this report may not be suitable for all investors, and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Croft & Bender s prior written consent. Sources of information include S&P Capital IQ and Pitchbook. 1