HOW COMPANIES ARE MAXIMIZING VALUE IN A SHIFTING MARKET

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1 HOW COMPANIES ARE MAXIMIZING VALUE IN A SHIFTING MARKET A LOOK AT KEY TRENDS, DEALS, VALUATIONS AND OPERATING PRACTICES AS WE HEAD INTO N O V E M B E R

2 Agenda I INTRODUCTIONS II CURRENT MARKET DYNAMICS III EXIT PLANNING & BEST PRACTICES IV CONTACT INFORMATION

3 ACCELERATING PROFITABLE GROWTH TM FOCUS - GROWTH & EXIT PLANNING Catapult Growth is a leading exit planning consultancy focused on the business services sector with an emphasis on marketing services companies and professional firms. Over the past decade Catapult has helped clients accelerate profitable growth through effective strategy development, practical execution support, and sophisticated talent management. Catapult has an outstanding track record enabling firms to grow and position for exit. We help our clients: Accelerate profitable growth: Strategy and Execution Attract critical talent to grow to the next phase Explore options and feasibility of organic growth and acquisitive growth Prepare the business for a liquidity event / exit catapult growth partners catapultgrowth.com

4 DE ALS DE ALS YE ARS MAXIMIZING SHAREHOLDER VALUE SERVICE OFFERINGS M&A ADVISORY SELL-SIDE & BUY-SIDE REPRESENTATION CAPITAL RAISING & PRIVATE PLACEMENTS FINANCIAL & STRATEGIC ADVISORY % 50 + S I N C E L A S T 1 2 M O N T H S S E L L - S I D E C L O S E R AT E P R O F E S S I O N A L S 20 S I N C E I N C E P T I O N

5 HYPER-FOCUSED SECTOR COVERAGE ADVERTISING & MARKETING BUSINESS & DIGITAL TRANSFORMATION INFORMATION & INTELLIGENCE DIGITAL MEDIA & ECOMMERCE Tech-Enabled Services Software

6 RANKED #1 FOR MID-MARKET INTERNET & ADVERTISING TRANSACTIONS BLOOMBERG M&A LEAGUE TABLES RANK ADVISOR DEAL COUNT 1 Petsky Prunier Goldman Sachs KPMG Corporate Finance 78 4 Morgan Stanley 77 5 PwC 76 6 Jordan Edmiston 74 7 JP Morgan 64 7 GCA Savvian 64 9 Ernst & Young Rothschild 60

7 HAS BEEN SOLD TO A PORTFOLIO COMPANY OF A PORTFOLIO COMPANY OF HAS BEEN SOLD TO HAS SOLD ITS AUTO & HOME INSURANCE, MORTGAGE, AND TECHNOLOGY ASSETS TO HAS RECEIVED AN INVESTMENT FROM UNRIVALED DIGITAL ADVERTISING & HAS RECEIVED AN INVESTMENT FROM HAS BEEN SOLD TO HAS SOLD A MAJORITY STAKE TO HAS RECEIVED A $60MM SERIES B MINORITY INVESTMENT LED BY MARKETING TECHNOLOGY TRANSACTION A PORTFOLIO COMPANY OF A PORTFOLIO COMPANY OF EXPERIENCE HAS BEEN SOLD TO HAS BEEN SOLD TO HAS BEEN SOLD TO HAS BEEN SOLD TO A DIVISION OF

8 TRUSTED B Y L E A D I N G P R I V A T E C A P I T A L F I R M S

9 Agenda I INTRODUCTIONS II CURRENT MARKET DYNAMICS III EXIT PLANNING & BEST PRACTICES IV CONTACT INFORMATION

10 + MARKETING, MEDIA & TECHNOLOGY SECTORS M&A ACTIVITY TRANSACTIONS IN 2018 ARE TRACKING TO OUTPACE 2017 LEVELS BY ~13% YEAR-OVER-YEAR WITH 3,200+ PROJECTED DEALS COMPLETED YTD 836 3,172 Transactions worth $132.9B 3,001 Transactions worth $165.7B 3,227 Transactions worth $161.6B 3,206 Transactions worth $171.5B Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18

11 + MARKETING, MEDIA & TECHNOLOGY SECTORS NOTABLE MID-MARKET TRANSACTIONS MARKETING TECHNOLOGY TARGET EV ACQUIRER ADVERTISING TECHNOLOGY TARGET EV ACQUIRER MARKETING SERVICES TARGET EV ACQUIRER Marketo $4.75B Adobe AppNexus $2.0B AT&T Blackhawk Network $3.8B Silver Lake Partners Callidus Software $2.4B SAP Integral Ad Science $850M Vista Equity Convergys $2.5B SYNNEX Corporation Acxiom Marketing Solutions $2.3B IPG Grapeshot $400M Oracle Web.com Group $1.9B Siris Capital SendGrid $1.8B Twilio WordStream $150M Gannett LSC Communications $1.3B Quad/Graphics Magento $1.7B Adobe Triton Digital $150M E.W. Scripps Aeroplan Loyalty Program $345M Air Canada Datorama $850M Salesforce AdsWizz $145M Pandora BuildASign.com $282M Cimpress Weebly $365M Square AerServ $90M InMobi Communisis $224M Output Services Group

12 + MARKETING, MEDIA & TECHNOLOGY SECTORS NOTABLE MID-MARKET TRANSACTIONS IT/BUSINESS SERVICES TARGET EV ACQUIRER DIGITAL MEDIA TARGET EV ACQUIRER SOFTWARE AS A SERVICE TARGET EV ACQUIRER Jardine Lloyd Thompson $5.6B Marsh & McLennan ZPG $3.4B Silver Lake Management Qualtrics $8.0B SAP DST Systems $5.4B SS&C Technologies Glassdoor $1.2B Recruit Holdings GitHub $7.5B Microsoft Syntel $3.5B Atos SE XO Group $811M WeddingWire MuleSoft $6.6B Salesforce ConvergeOne $1.7B CVC Capital Partners Douyu TV $632M Tencent Holdings Broadsoft $1.9B Cisco Cambium Learning Group $708M Veritas Capital QuoteWizard $370M LendingTree Apptio $1.8B Vista Equity Partners Softvision $550M Cognizant Quartz Media $110M Uzabase Adaptive Insights $1.6B Workday LiquidHub $487M Capgemini Crystalbet $100M GVC Holdings Mattersight $113M NICE

13 $168.9 $77.7 $193.7 $208.3 $249.5 $248.4 $352.1 $321.0 $310.3 $374.2 $178.5 $58.0 $51.3 $64.8 $74.3 $91.2 $79.1 $91.1 $90.7 $77.2 $78.7 $80.6 $84.5 $75.4 $80.5 $74.8 $79.6 $96.6 $87.7 $92.3 $97.6 $106.5 $102.4 $ U.S. MIDDLE MARKET PRIVATE EQUITY DEAL FLOW MIDDLE MARKET PE IS ON PACE TO SURPASS $400B IN TOTAL DEAL VALUE FOR THE FIRST TIME, WITH 2,171 DEALS CLOSED THROUGH Q3 (HIGHEST EVER) AT A TOTAL VALUE OF $312B OR AN AVERAGE DEAL SIZE OF $177M. LIMITED NUMBER OF ASSETS, INCREASING AMOUNTS OF DRY POWDER, AND STRATEGIC COMPETITION HAS RESULTED IN BUYOUT MULTIPLES AND LEVERAGE NEARLY DOUBLING FROM $450 $400 $350 $300 $250 $200 $150 $100 $50 1, Deal Value ($B) Estimated Deal Value ($B) # of Deals Closed Estimated # of Deals Closed 2,565 2,275 2,435 2,273 1,936 1,743 1,510 1,345 2,171 3,500 3,000 2,500 2,000 1,500 1, $120 $100 $80 $60 $40 $20 Deal Value ($B) Estimated Deal Value ($B) # of Deals Closed Estimated # of Deals Closed $ * 0 $0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Source: PitchBook * As of 9/30/2018

14 $97.3 $64.6 $42.5 $75.1 $73.5 $85.8 $111.0 $94.5 $113.5 $115.2 $ U.S. MIDDLE MARKET PRIVATE EQUITY FUNDRAISING 2018 IS ON PACE TO MATCH 2017 S RECORD WITH THE AMOUNT OF MIDDLE MARKET PE CAPITAL RAISED THROUGH Q3 UP 20% FROM THE SAME PERIOD LAST YEAR. FUND COUNT YTD IS DOWN 19%, WITH THE AVERAGE FUND INCREASING FROM $604M IN 2017 TO $890M IN MIDDLE MARKET PE FUNDRAISING IN 2018 REPRESENTS 73% OF PE CAPITAL RAISED, UP FROM 51% IN $140 $120 $100 $80 $60 $40 $ % 90% 80% 70% 60% 50% 40% 30% 20% 10% $ * 0 0% * Capital Raised ($B) # of Funds Closed $100M-$250M $250M-$500M $500M-$1B $1B-$5B Source: PitchBook * As of 9/30/2018

15 U.S. MIDDLE MARKET PRIVATE EQUITY BUY-AND-BUILD STRATEGY WITH ELEVATED MIDDLE MARKET MULTIPLES WE HAVE SEEN A PROLIFERATION OF PRIVATE EQUITY ADD-ON ACQUISITIONS, WHICH NOW ACCOUNT FOR NEARLY TWO-THIRDS OF BUYOUTS. THE BUY AND BUILD APPROACH ALLOWS PRIVATE EQUITY TO ACQUIRE A LARGER PLATFORM IN A COMPETITIVE ENVIRONMENT AND BLEND DOWN THE AGGREGATE ACQUISITION MULTIPLE THROUGH SMALLER ACQUISITIONS. THIS APPROACH IS HIGHLY STRATEGIC AND REQUIRES STRONG MANAGEMENT TEAMS TO DEVELOP AN ACQUISITION ROADMAP, INTEGRATE BUSINESSES AND OPERATE A COMBINED ENTITY % 66.4% 70% BUY-AND BUILD PRIVATE EQUITY CASE STUDY % 50% 40% 30% 20% 10% * 0% *As of 9/30/2018 Add-on Add-On % of Buyout Source: PitchBook

16 ACCELERATING PROFITABLE GROWTH TM Replicating the PE Value Acceleration Model 1. Start with the end in mind 2. Define the full potential 3. Develop the blueprint 4. Accelerate performance 5. Harness the talent 6. Make equity sweat 7. Foster a value creation / Results oriented mindset 8. Impose discipline 16 catapult growth partners catapultgrowth.com

17 Agenda I INTRODUCTIONS II CURRENT MARKET DYNAMICS III EXIT PLANNING & BEST PRACTICES IV CONTACT INFORMATION

18 Two Questions Before You Exit Your Business IS YOUR BUSINESS READY TO SELL? ARE YOU PERSONALLY READY TO EXIT? The Five Step Exit Check List will let you know

19 EXIT PLANNING & BEST PRACTICES THE FOLLOWING WILL HELP YOU DETERMINE IF YOU ARE IN A POSITION TO ENGAGE IN ACQUISITION DISCUSSIONS TO DRIVE A PREMIUM VALUATION & DEAL STRUCTURE AND IMPORTANTLY THE ABILITY TO MAINTAIN CRITICAL MOMENTUM TO COMPLETE A SUCCESSFUL TRANSACTION. THESE GUIDELINES ALSO OUTLINE BEST PRACTICES TO IMPLEMENT, WHICH WILL MAXIMIZE LONG-TERM VALUE AND NEAR-TERM PERFORMANCE. INITIAL CONSIDERATIONS OPERATIONAL MATURITY ORGANIZATIONAL MUSCULARITY FINAL CONSIDERATIONS IS NOW THE RIGHT TIME? ARE YOU PREPARED FOR A TRANSACTION? ARE YOU BUILT FOR SCALE? CAN YOU COMPLETE A TRANSACTION?

20 + INITIAL CONSIDERATIONS IS NOW THE RIGHT TIME? IT S IMPORTANT TO FIRST ANALYZE THESE KEY INITIAL CONSIDERATIONS BEFORE RUNNING A PROCESS OR ENGAGING IN DISCUSSIONS WITH AN INTERESTED PARTY. THESE ELEMENTS CAN HAVE SIGNIFICANT IMPACT IN DETERMINING THE UNIVERSE OF INTERESTED PARTIES, AND IMPORTANTLY, VALUATION AND DEAL STRUCTURE. CLIENT DYNAMICS FINANCIAL PROFILE MATERIAL ADVERSE EVENTS ADDITIONAL CONSIDERATIONS + CONCENTRATION + TOP-LINE GROWTH + LOSS OF LARGE CLIENT + CURRENT OWNERSHIP + RETENTION / CHURN + REVENUE VISIBILITY + LOSS OF KEY EMPLOYEES + RECENT ACQUISITION + QUALITY / SIZE + GROSS MARGINS + 3RD-PARTY RISK + GROWTH PLAN + CONTINUITY OF SPEND + PROFITABILITY + NEAR-TERM CAPEX + INDUSTRY REPUTATION

21 + OPERATIONAL MATURIT Y ARE YOU PREPARED FOR A TRANSACTION? STRATEGIC AND FINANCIAL BUYERS ENGAGE IN RIGOROUS FINANCIAL AND ACCOUNTING DILIGENCE AND OVERWHELMINGLY PREFORM A QUALITY OF EARNINGS. THE FOLLOWING WILL ACCELERATE THIS PROCESS, MAINTAINING CRITICAL DEAL MOMENTUM AND PREVENT UNEXPECTED SURPRISES THAT COULD CAUSE A PARTY TO RE-TRADE OR EVEN TERMINATE A TRANSACTION: STRONG ACCOUNTING PRACTICES + STILL REPORTING ON A CASH- OR GAAP-LIGHT BASIS? IT S TIME TO RIP THE BAND-AID. REVENUE RECOGNITION (ASC 606) ACCRUED LIABILITIES CAPITALIZATION + THREE YEAR AUDIT BY A BIG FOUR OR STRONG REGIONAL ACCOUNTING FIRM. + SELL-SIDE QOE REPORT FOR SIGNIFICANT ADD-BACKS OR COMPLEX REVENUE RECOGNITION ROBUST FINANCE FUNCTIONS + DETAILED MONTHLY REPORTING BY CLIENT, PROJECT, SERVICE, GEOGRAPHY, ETC. REVENUE & GROSS MARGIN UTILIZATION CONTRACTED BACKLOG; TRACKING OF BUDGET COMMITMENTS / UNCONTRACTED REVENUE WEIGHTED PIPELINE + DETAILED ANNUAL BUDGET AND FINANCIAL MODEL. + INDUSTRY SPECIFIC KEY PERFORMANCE INDICATORS

22 + ORGANIZATIONAL MUSCUL A RIT Y ARE YOU BUILT FOR SCALE? HAVING THE SYSTEMS, TECHNOLOGY AND PEOPLE IN PLACE TO SUPPORT NEAR- AND LONG-TERM GROWTH IS CRITICAL IN DRIVING A PREMIUM OUTCOME FOR STAKEHOLDERS. HUMAN CAPITAL + TALENTED, DEEP BENCH OF SENIOR MANAGEMENT UNDERNEATH CURRENT LEADERSHIP + ABILITY TO RECRUIT AND RETAIN TALENT + STRONG AND UNIFIED CULTURE + FINANCIAL CONTROLS AND STAFF COMMITMENT & PLAN FOR GROWTH + INORGANIC AND ORGANIC STRATEGIC ROADMAP + TECHNOLOGY + PIPELINE WITH STRONG VISIBILITY + PARTNERSHIPS AND EXPANSION OPPORTUNITIES + SALES TEAM

23 + FINAL CONSIDERATIONS CAN YOU COMPLETE A TRANSACTION? IF YOU RECEIVE AN INDICATION, DO YOU HAVE THE INTERNAL RESOURCES COMMITTED TO SATISFY BUYER DEMANDS AND 3RD-PARTY ADVISORS TO EFFECTIVELY NEGOTIATE A TRANSACTION AND MANAGE CONFIRMATORY DILIGENCE? CONTRACT NEGOTIATION + LETTER OF INTENT DEAL VALUE & STRUCTURE TAX IMPLICATIONS CLOSING TIMELINE EXCLUSIVITY + EMPLOYMENT AGREEMENTS NON-COMPETE CONTRACT NEGOTIATION + PURCHASE AGREEMENT TRANSACTION TYPE ESCROW AMOUNTS WORKING CAPITAL REPS & WARRANTY INDEMNIFICATION SCHEDULES KEY DILIGENCE WORKSTREAMS + ONSITE BUSINESS DILIGENCE + FINANCE / ACCOUNTING + TAX + INDUSTRY / MARKET STUDY + HR & BENEFITS + LEGAL / COMPLIANCE + TECHNOLOGY AUDIT

24 Five Steps To Get Ready To Exit 1 GET CLEAR ON WHY YOU ARE EXITING ALIGN YOUR EXIT TYPE WITH YOUR WHY FIGURE OUT YOUR NUMBER DECIDE THE LIFE YOU WANT POST EXIT PIN-POINT OUR SPOT ON THE EXIT MATRIX

25 INBOUND INTEREST INTRODUCTORY CALL STRATEGIC: YES PRIVATE EQUITY: DEPENDS INFORMATION REQUEST INITIAL MEETING STRATEGIC ONLY INDICATION OF INTEREST HIRE INVESTMENT BANK ONSITE DILIGENCE LETTER OF INTENT CONFIRMATORY DILIGENCE SIGN & CLOSE AUCTION PROCESS HIRE INVESTMENT BANK MARKETING MATERIALS BUYER/INVESTOR LIST FINANCIAL MODEL GO TO MARKET NDA NEGOTIATION INITIAL DILIGENCE RESPONSES FIRST ROUND BIDS INITIAL NEGOTIATION DOWN SELECTION MANAGEMENT MEETINGS & DATA ROOM ACCESS SECOND ROUND BIDS FINAL NEGOTIATION EXCLUSIVITY CONFIRMATORY DILIGENCE SELECT SIGN & CLOSE OPEN TO EXPLORING A TRANSACTION? MANAGING INFLOW OF ACQUISITION INTEREST

26 ACCELERATING PROFITABLE GROWTH TM How to handle the situation Having limited experience selling a firm may mean you don t get best value from it catapult growth partners 26 catapultgrowth.com

27 ACCELERATING PROFITABLE GROWTH TM How to handle the situation Four Golden Rules to Follow catapult growth partners 27 catapultgrowth.com

28 Agenda I INTRODUCTIONS II CURRENT MARKET DYNAMICS III EXIT PLANNING & BEST PRACTICES IV CONTACT INFORMATION

29 CONTACT INFORMATION 1624 MARKET STREET, SUITE 202 DENVER, CO DOUG JOHNSON FOUNDER & MANAGING DIRECTOR BROAD STREET, 38 TH FLOOR NEW YORK, NY LEXIA SCHWARTZ VICE PRESIDENT CLAYTON YOUNG VICE PRESIDENT