Business Services Update

Transcription

1 - Business Services Update December 2014 The Mufson Howe Hunter Business Services Update is designed to provide business leaders, investors and industry professionals with current market trends and important developments within the Business Services industry. This monthly report contains recent news, analysis, and M&A activity on selected companies and in-depth coverage of the primary sectors. Primary Business Services Contacts Peter J. Hill Managing Director Michael J. Mufson Managing Director Michael J. Howe Managing Director Anthony J. Lopez-Ona Managing Director Joseph M. Manko, Jr. Managing Director Mufson Howe Hunter & Company LLC is a middle-market focused investment bank providing M&A, capital raising and financial advisory services. Member SIPC FINRA

2 TABLE OF CONTENTS Section 1 Human Resources Outsourcing... 1 Section 2 Contact Center Services... 6 Section 3 Fixed Asset Management The Mufson Howe Hunter Human Resources Outsourcing Index is currently comprised of The Advisory Board Co., AMN Healthcare Services, Inc., Automatic Data Processing, Barrett Business Services, Inc., CBIZ, Inc., CDI Corp., Computer Task Group, Inc., Corporate Executive Board Co., CRA International, Inc., Cross Country Healthcare, Inc., CT Partners, Exponent, Inc., Fair Isaac Corp., FTI Consulting, Inc., Heidrick & Struggles Intl. Inc., Hudson Global, Inc., Huron Consulting, Insperity, Inc., Kelly Services, Inc., Kforce, Inc., Korn/Ferry International Inc., Manpower, Inc., Navigant Consulting, Inc., On Assignment, Inc., Paychex, Inc., RCM Technologies, Inc., Resources Connection, Inc., Robert Half International, Inc., Team Health Holdings, Inc., Towers Watson & Co. and TrueBlue, Inc. The Mufson Howe Hunter Contact Center Services Index is currently comprised of Convergys Corporation, Exlservice Holdings, Inc., Genpact Ltd., StarTek, Inc., Sykes Enterprises, Incorporated, TeleTech Holdings Inc., West Corporation and WNS (Holdings) Ltd. The Mufson Howe Hunter Fixed Asset Management Index is currently comprised of ABM Industries Inc., Aramark, Berendsen plc, Brinks Co., Casella Waste Systems Inc., Chemed Corp., Cintas Corporation, Clean Harbors, Inc., Comfort Systems USA Inc., Command Security Corp., Compass Group PLC, Corrections Corporation of America, EMCOR Group Inc., FirstService Corp., G&K Services Inc., G4S plc, Healthcare Services Group Inc., Heritage-Crystal Clean, Inc., Prosegur Compania de Seguridad SA, Rentokil Initial plc, Republic Services, Inc., Rollins Inc., Securitas AB, Sodexo, SP Plus Corporation, Stericycle, Inc., The GEO Group, Inc., UniFirst Corp., Waste Connections Inc. and Waste Management, Inc. The companies that comprise each Index periodically change as a result of mergers, acquisitions, initial public offerings and other transactions; therefore, comparisons to historical time periods and historical performance for each Index may not entirely correspond and correlate to the Index s current performance. Historical performance is not a guarantee or prediction of future results. The information and statistical data contained herein have been obtained from sources that Mufson Howe Hunter believes are reliable, but Mufson Howe Hunter makes no representation or warranty as to the accuracy or completeness of any such information and data and expressly disclaims any and all liability relating to or resulting from your use of these materials. The information and data contained herein are current and only as of the date(s) indicated and Mufson Howe Hunter has no intention, obligation or duty to update these materials after such date(s). These materials do not constitute an offer to sell or the solicitation of an offer to buy any securities. Copyright December 2014 Mufson Howe Hunter & Company LLC. All rights reserved. Business Services Update is produced monthly by Mufson Howe Hunter. Mufson Howe Hunter provides a full range of investment banking services to Business Services companies. For more information, visit

3 Human Resources Outsourcing Temporary staffing, HR Outsourcing and Professional Consulting related services for a variety of end-user markets. Comparative Index Performance The Mufson Howe Hunter Human Resources Outsourcing Index (a) increased by 1.7% in November of Last Three Years Daily from November 30, 2011 to November 28, 2014 Price as Percent of Base (November 30, 2011 = 0%) 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% -10% Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 MHH Human Resources Outsourcing NASDAQ S&P 500 Last Twelve Months Daily from November 29, 2013 to November 28, 2014 Price as Percent of Base (November 29, 2013 = 0%) 20% 15% 10% 5% 0% -5% -10% Nov-13 Feb-14 May-14 Aug-14 Nov-14 MHH Human Resources Outsourcing NASDAQ S&P 500 Price Appreciation 3-Year LTM 1 Month Mufson Howe Hunter Human Resources Outsourcing Index (a) 69.8% 5.2% 1.7% NASDAQ 82.9% 18.0% 3.5% S&P % 14.5% 2.5% (a) Market cap weighted index assuming no dividend reinvestment. Mufson Howe Hunter Human Resources Outsourcing Index is comprised of all companies listed on the following two pages. 1

4 Human Resources Outsourcing Selected Valuation Metrics ($ in millions, except per share data) Market & Capitalization LTM Performance (3) Valuation Margins Equity Enterprise Enterprise Value/ Price/ Gross Company Price (1) Value Value (2) Revenue EBITDA (4) EPS Revenue EBITDA EPS Profit EBITDA Commercial Staffing Manpower, Inc. (MAN) $66.86 $5,291.3 $5,114.5 $20,893.8 $807.7 $ x 6.3 x 12.6 x 16.8% 3.9% TrueBlue, Inc. (TBI) , , x 11.0 x 19.6 x 25.8% 5.3% Kelly Services, Inc. (KELY.A) , x 10.5 x 26.9 x 16.4% 1.1% Mean $2,283.1 $2,285.3 $9,449.6 $322.9 $ x 9.3 x 19.7 x 19.7% 3.4% Median , , x 10.5 x 19.6 x 16.8% 3.9% Professional Staffing Robert Half International, Inc. (RHI) $56.79 $7,719.1 $7,429.5 $4,557.4 $516.3 $ x 14.4 x 26.4 x 40.9% 11.3% Kforce, Inc. (KFRC) , x 11.7 x 22.7 x 31.0% 4.9% Resources Connection, Inc. (RECN) x 10.0 x 22.1 x 38.4% 8.3% CDI Corp. (CDI) , x 8.0 x 20.7 x 18.6% 3.3% Hudson Global, Inc. (HSON) (5.0) (0.23) 0.12 x NM NM 35.6% -0.7% Mean $1,888.1 $1,802.6 $1,642.1 $131.7 $ x 11.0 x 23.0 x 32.9% 5.4% Median , x 10.8 x 22.4 x 35.6% 4.9% Healthcare Staffing Team Health Holdings, Inc. (TMH) $57.16 $4,064.6 $4,769.4 $2,650.8 $282.1 $ x 16.9 x 31.9 x 19.3% 10.6% On Assignment, Inc. (ASGN) , , , x 11.1 x 20.8 x 31.8% 9.9% AMN Healthcare Services, Inc. (AHS) , x 11.1 x 21.2 x 30.4% 8.4% Cross Country Healthcare, Inc. (CCRN) (0.12) 0.73 x NM NM 25.7% 2.1% Mean $1,701.3 $2,019.5 $1,501.0 $139.0 $ x 13.0 x 24.7 x 26.8% 7.7% Median 1, , , x 11.1 x 21.2 x 28.1% 9.1% IT Staffing Computer Task Group, Inc. (CTG) $9.32 $172.9 $144.7 $397.7 $23.4 $ x 6.2 x 11.5 x 21.0% 5.9% RCM Technologies, Inc. (RCMT) x 8.1 x 7.2 x 26.4% 6.0% Mean $137.1 $118.8 $294.0 $17.4 $ x 7.2 x 9.4 x 23.7% 5.9% Median x 7.2 x 9.4 x 23.7% 5.9% Executive Search Korn/Ferry International, Inc. (KFY) $27.15 $1,365.6 $1,109.4 $983.1 $126.4 $ x 8.8 x 18.7 x 28.7% 12.9% Heidrick & Struggles Intl. Inc. (HSII) x 5.9 x 23.8 x 31.6% 8.2% CT Partners (CTP) x 11.3 x 20.6 x 26.9% 9.1% Mean $628.3 $505.0 $546.3 $60.6 $ x 8.6 x 21.0 x 29.1% 10.1% Median x 8.8 x 20.6 x 28.7% 9.1% (continued on next page) NA = Not Available; NM = Not Meaningful; LTM = Latest Twelve Months (1) As of close on November 28, = excluded from Mean and Median calculations (2) Enterprise value is defined as equity value plus net debt, preferred stock and minority interests. Net Debt includes Source: Public Filings, Press Releases and Published Research Reports. long term debt, short term debt, postretirement benefits and unfunded pensions, if applicable, less cash and cash equivalents. (3) As of September 30, 2014 except KELY.A (Setember 29, 2014); RCMT (September 28, 2014); CTG and TBI (September 26, 2014); and KFY (July 31, 2014). (4) Excludes non-recurring and discontinued operations. 2

5 Human Resources Outsourcing ($ in millions, except per share data) Market & Capitalization LTM Performance (3) Valuation Margins Equity Enterprise Enterprise Value/ Price/ Gross Company Price (1) Value Value (2) Revenue EBITDA (4) EPS Revenue EBITDA EPS Profit EBITDA HR Outsourcing Automatic Data Processing (ADP) $85.64 $41,283.4 $40,751.8 $12,418.3 $2,613.6 $ x 15.6 x 28.5 x 48.8% 21.0% Paychex, Inc. (PAYX) , , , , x 15.1 x 27.7 x 70.6% 42.8% Towers Watson & Co. (TW) , , , x 11.7 x 25.2 x 32.7% 18.4% Insperity, Inc. (NSP) , x 9.3 x 27.4 x 16.9% 2.8% Barrett Business Services (BBSI) (49.8) (4.49) 0.12 x NM NM 8.1% -8.2% Mean $13,477.8 $13,137.0 $4,293.1 $876.6 $ x 12.9 x 27.2 x 35.4% 15.4% Median 7, , , x 13.4 x 27.5 x 32.7% 18.4% Professional & Consulting Corporate Executive Board (CEB) $73.21 $2,462.8 $2,883.9 $892.3 $187.5 $ x 15.4 x NM 63.9% 21.0% Fair Isaac Corp. (FICO) , , x 13.8 x 29.1 x 68.4% 25.2% FTI Consulting, Inc. (FCN) , , , x 9.8 x 20.4 x 35.2% 12.4% Huron Consulting (HURN) , , x 10.0 x 19.6 x 39.0% 19.8% The Advisory Board Co. (ABCO) , , x 24.6 x NM 47.8% 11.1% Exponent, Inc. (EXPO) x 12.5 x 25.3 x 35.8% 23.2% Navigant Consulting, Inc. (NCI) x 7.1 x 12.7 x 32.9% 15.7% CBIZ, Inc. (CBZ) x 8.7 x 15.4 x 12.2% 10.0% CRA International (CRAI) x 8.1 x 21.0 x 32.3% 9.8% Mean $1,308.0 $1,494.7 $763.7 $123.9 $ x 10.7 x 20.5 x 40.8% 16.5% Median 1, , x 9.9 x 20.4 x 35.8% 15.7% NA = Not Available; NM = Not Meaningful; LTM = Latest Twelve Months (1) As of close on November 28, = excluded from Mean and Median calculations (2) Enterprise value is defined as equity value plus net debt, preferred stock and minority interests. Net Debt includes Source: Public Filings, Press Releases and Published Research Reports. long term debt, short term debt, postretirement benefits and unfunded pensions, if applicable, less cash and cash equivalents. (3) As of September 30, 2014 except EXPO (October 3, 2014); CRAI (September 27, 2014); and PAYX (August 31, 2014). (4) Excludes non-recurring and discontinued operations. Selected M&A Transactions Announced Target Target Description Acquirer Value November 11 UniConsult Integrated Business Services, A.I.E. Provider of outplacement and career transition services Right Management Spain, S.L.U. ND November 10 Legal ediscovery Business of Hudson Global, Inc. Provider of information management and legal process outsourcing services Document Technologies, Inc. $23.0 November 6 Weekes & Callaway Inc. Provider of insurance and risk management services CBIZ, Inc. (NYSE:CBZ) ND November 3 Platt, Sparks & Associates Consulting Petroleum Engineers, Inc. Provider of petroleum engineering solutions FTI Consulting, Inc. (NYSE:FCN) ND ND Not disclosed. Transaction values in millions. 3

6 Human Resources Outsourcing Selected News Corporate Executive Board Co. (NYSE:CEB) has announced the appointment of Stacey Rauch to the Company s Board of Directors. Cross Country Healthcare, Inc. (NasdaqGS:CCRN) reported third quarter net income of ($7.6) million for fiscal year 2014 as compared to $0.9 million for the prior year period. Earnings per share were ($0.24) versus $0.03 for the prior year period. Revenues for the quarter increased to $188.9 million from $108.0 million for the same period in fiscal year CTPartners Executive Search Inc. (AMEX:CTP) reported third quarter net income of $1.3 million for fiscal year 2014 as compared to $0.7 million for the prior year period. Earnings per share were $0.17 versus $0.09 for the prior year period. Revenues for the quarter increased to $45.4 million from $32.6 million for the same period in fiscal year Fair Isaac Corporation (NYSE:FICO) reported net income of $94.9 million for fiscal year 2014 as compared to $90.1 million for the prior year. Earnings per share were $2.72 versus $2.48 for the prior year. Revenues for the year increased to $789.0 million from $743.4 million for fiscal year Hudson Global, Inc (NasdaqGS:HSON) reported third quarter net income of ($7.0) million for fiscal year 2014 as compared to ($5.0) million for the prior year period. Earnings per share were ($0.21) versus ($0.15) for the prior year period. Revenues for the quarter increased to $149.3 million from $139.3 million for the same period in fiscal year Insperity, Inc. (NYSE:NSP) reported third quarter net income of $8.4 million for fiscal year 2014 as compared to $10.1 million for the prior year period. Earnings per share were $0.33 versus $0.39 for the prior year period. Revenues for the quarter increased to $560.3 million from $539.9 million for the same period in fiscal year Kelly Services, Inc. (NasdaqGS:KELY.A) reported third quarter net income of $1.4 million for fiscal year 2014 as compared to $18.8 million for the prior year period. Earnings per share were $0.03 versus $0.49 for the prior year period. Revenues for the quarter increased to $1,396.4 million from $1,345.6 million for the same period in fiscal year Korn/Ferry International (NYSE:KFY) has announced the appointment of Olof Pripp as Vice Chairman, Board member and CEO Services EMEA. RCM Technologies Inc. (NasdaqGM:RCMT) reported third quarter net income of $1.9 million for fiscal year 2014 as compared to $1.1 million for the prior year period. Earnings per share were $0.15 versus $0.09 for the prior year period. Revenues for the quarter increased to $46.4 million from $41.3 million for the same period in fiscal year Team Health Holdings, Inc. (NYSE:TMH) reported third quarter net income of $27.6 million for fiscal year 2014 as compared to $29.4 million for the prior year period. Earnings per share were $0.38 versus $0.41 for the prior year period. Revenues for the quarter increased to $712.2 million from $606.1 million for the same period in fiscal year The Advisory Board Company (NasdaqGS:ABCO) reported second quarter net income of $6.5 million for fiscal year 2015 as compared to $9.0 million for the prior year period. Earnings per share were $0.18 versus $0.24 for the prior year period. Revenues for the quarter increased to $144.2 million from $128.3 million for the same period in fiscal 4

7 Human Resources Outsourcing year Towers Watson & Co. (NYSE:TW) reported first quarter net income of $81.6 million for fiscal year 2015 as compared to $88.2 million for the prior year period. Earnings per share were $1.16 versus $1.24 for the prior year period. Revenues for the quarter increased to $878.1 million from $809.9 million for the same period in fiscal year Note: All per share results are reported on a fully diluted basis. 5

8 Contact Center Services Outsourced customer management and business process outsourcing services, including: customer care, fulfillment, marketing, technical support and acquisition services. Comparative Index Performance The Mufson Howe Hunter Contact Center Services Index (a) increased by 0.7% in November of Last Three Years Daily from November 30, 2011 to November 28, 2014 Price as Percent of Base (November 30, 2011 = 0%) 100% 80% 60% 40% 20% 0% -20% Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 MHH Contact Center Services NASDAQ S&P 500 Last Twelve Months Daily from November 29, 2013 to November 28, 2014 Price as Percent of Base (November 29, 2013 = 0%) 20% 15% 10% 5% 0% -5% -10% -15% Nov-13 Feb-14 May-14 Aug-14 Nov-14 MHH Contact Center Services NASDAQ S&P 500 Price Appreciation 3-Year LTM 1 Month Mufson Howe Hunter Contact Center Services Index (a) 41.7% 6.3% 0.7% NASDAQ 82.9% 18.0% 3.5% S&P % 14.5% 2.5% (a) Market cap weighted index assuming no dividend reinvestment. Mufson Howe Hunter Contact Center Services Index is comprised of all companies listed on the following page. 6

9 Contact Center Services Selected Valuation Metrics ($ in millions, except per share data) Market & Capitalization LTM Performance (3) Valuation Margins Equity Enterprise Enterprise Value/ Price/ Gross Company Price (1) Value Value (2) Revenue EBITDA (4) EPS Revenue EBITDA EPS Profit EBITDA On-Shore West Corporation (WSTC) $31.24 $2,629.7 $6,222.6 $2,768.0 $687.5 $ x 9.1 x 16.7 x 52.5% 24.8% Convergys Corporation (CVG) , , , x 7.0 x 22.3 x 36.1% 12.4% TeleTech Holdings Inc. (TTEC) , , , x 7.6 x 22.3 x 29.0% 12.7% Sykes Enterprises, Incorporated (SYKE) , , x 6.7 x 23.9 x 32.2% 9.9% StarTek, Inc. (SRT) x 10.8 x NM 12.9% 4.7% Mean $1,398.6 $2,131.0 $1,634.2 $261.6 $ x 8.2 x 21.3 x 32.5% 12.9% Median 1, , , x 7.6 x 22.3 x 32.2% 12.4% Off-Shore Genpact Limited (G) $18.02 $3,903.0 $4,299.8 $2,236.4 $371.6 $ x 11.6 x NM 39.0% 16.6% WNS (Holdings) Ltd. (WNS) , x 9.2 x 24.1 x 36.0% 20.0% Exlservice Holdings, Inc. (EXLS) x 9.9 x NM 35.8% 15.6% Mean $1,959.9 $2,006.4 $1,082.3 $184.1 $ x 10.2 x 24.1 x 36.9% 17.4% Median 1, x 9.9 x 24.1 x 36.0% 16.6% All Companies Mean $1,609.1 $2,084.3 $1,427.2 $232.5 $ x 9.0 x 21.8 x 34.2% 14.6% Median 1, , , x 9.1 x 22.3 x 35.9% 14.1% NA = Not Available; NM = Not Meaningful; LTM = Latest Twelve Months (1) As of close November 28, = excluded from Mean and Median calculations (2) Enterprise value is defined as equity value plus net debt, preferred stock and minority interests. Net Debt Source: Public Filings, Press Releases and Published Research Reports. includes long term debt, short term debt, postretirement benefits and unfunded pensions, if applicable, less cash and cash equivalents. (3) As of September 30, (4) Excludes non-recurring and discontinued operations. Selected M&A Transactions Announced Target Target Description Acquirer Value November 3 GroupCast, L.L.C. Provider of software-as-a-service based mass notification and custom interactive voice response solutions ND Not disclosed. Transaction values in millions. West Corporation (NasdaqGS:WSTC) $13.5 7

10 Contact Center Services Selected News Convergys Corporation (NYSE:CVG) reported third quarter net income of $32.8 million for fiscal year 2014 as compared to $33.9 million for the prior year period. Earnings per share were $0.31 versus $0.31 for the prior year period. Revenues for the quarter increased to $749.5 million from $521.0 million for the same period in fiscal year Convergys Corporation (NYSE:CVG) has announced the appointment of Marjorie Connelly as Chief Operating Officer. Genpact Limited (NYSE:G) reported third quarter net income of $46.7 million for fiscal year 2014 as compared to $70.3 million for the prior year period. Earnings per share were $0.21 versus $0.30 for the prior year period. Revenues for the quarter increased to $588.1 million from $534.9 million for the same period in fiscal year StarTek, Inc. (NYSE:SRT) reported third quarter net income of ($0.1) million for fiscal year 2014 as compared to ($1.8) million for the prior year period. Earnings per share were ($0.01) versus ($0.12) for the prior year period. Revenues for the quarter increased to $61.4 million from $58.4 million for the same period in fiscal year Sykes Enterprises, Incorporated (NasdaqGS:SYKE) reported third quarter net income of $16.6 million for fiscal year 2014 as compared to $14.1 million for the prior year period. Earnings per share were $0.39 versus $0.33 for the prior year period. Revenues for the quarter increased to $332.7 million from $322.1 million for the same period in fiscal year TeleTech Holdings Inc. (NasdaqGS:TTEC) reported third quarter net income of $13.2 million for fiscal year 2014 as compared to $17.6 million for the prior year period. Earnings per share were $0.27 versus $0.34 for the prior year period. Revenues for the quarter increased to $305.9 million from $297.0 million for the same period in fiscal year West Corporation (NasdaqGS:WSTC) reported third quarter net income of $16.1 million for fiscal year 2014 as compared to $46.1 million for the prior year period. Earnings per share were $0.19 versus $0.54 for the prior year period. Revenues for the quarter increased to $713.2 million from $665.4 million for the same period in fiscal year Note: All per share results are reported on a fully diluted basis. 8

11 Contact Center Services Historical Enterprise Value-to-LTM EBITDA Multiples 12.0x 10.0x 8.0x 6.0x 4.0x 6.3x 7.0x 7.3x 7.2x 6.8x 6.5x 6.8x 6.7x 6.1x 4.6x 5.4x 5.2x 5.3x 3.8x 5.5x 7.3x 8.0x 8.0x 8.2x 7.7x 9.1x 7.8x 7.6x 2.0x 0.0x Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Nov'14 Historical Price-to-LTM EBITDA Multiples 40.0x 32.0x 28.1 x 24.0x 16.0x 16.5 x 17.9 x 17.5 x 14.7 x 15.1 x 17.6 x 17.6 x 22.2 x 13.0 x 14.1 x 15.6 x 15.3 x 15.0 x 17.9 x 20.6 x 22.3 x 19.1 x 19.8 x 17.3 x 22.9 x 20.8 x 22.3x 8.0x 0.0x Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1'11 Q2 '11 Q3 '11 Q4 '11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Nov'14 9

12 Fixed Asset Management Outsourced facility management services including: facility maintenance, food service contracting, manned security services, uniform/linen rental and waste management services. Comparative Index Performance The Mufson Howe Hunter Fixed Asset Management Index (a) increased by 2.3% in November of Last Three Years Daily from November 30, 2011 to November 28, 2014 Price as Percent of Base (November 30, 2011 = 0%) 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% -10% Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 MHH Fixed Asset Management NASDAQ S&P 500 Last Twelve Months Daily from November 29, 2013 to November 28, 2014 Price as Percent of Base (November 29, 2013 = 0%) 20% 15% 10% 5% 0% -5% Nov-13 Feb-14 May-14 Aug-14 Nov-14 MHH Fixed Asset Management NASDAQ S&P 500 Price Appreciation 3-Year LTM 1 Month Mufson Howe Hunter Fixed Asset Management Index (a) 56.5% 8.3% 2.3% NASDAQ 82.9% 18.0% 3.5% S&P % 14.5% 2.5% (a) Market cap weighted index assuming no dividend reinvestment. Mufson Howe Hunter Fixed Asset Management Index is comprised of all companies listed on the following two pages. 10

13 Fixed Asset Management Selected Valuation Metrics ($ in millions, except per share data) Market & Capitalization LTM Performance (3) Valuation Margins Equity Enterprise Enterprise Value/ Price/ Gross Company Price (1) Value Value (2) Revenue EBITDA (4) EPS Revenue EBITDA EPS Profit EBITDA Facility Maintenance Rentokil Initial plc (LSE:RTO) $1.86 $3,385.0 $4,737.3 $3,912.1 $775.0 $ x 6.1x 15.7x 89.5% 19.8% Rollins Inc. (ROL) , , , x 18.1x 35.5x 49.7% 18.4% EMCOR Group Inc. (EME) , , , x 7.7x 17.8x 13.8% 5.5% FirstService Corporation (TSX:FSV) , , , x 12.5x NM 36.4% 7.7% Healthcare Services Group Inc. (HCSG) , , , x NM NM 10.1% 1.7% Chemed Corp. (CHE) , , , x 11.0x 20.8x 28.6% 12.9% ABM Industries Incorporated (ABM) , , , x 9.8x 20.1x 10.3% 3.7% SP Plus Corporation (SP) x 8.9x 25.0x 20.6% 9.5% Comfort Systems USA Inc. (FIX) , x 9.8x 32.2x 17.5% 4.1% Mean $2,149.0 $2,411.2 $2,689.1 $234.1 $ x 9.4x 23.9x 30.7% 9.2% Median 1, , , x 9.8x 20.8x 20.6% 7.7% Food Services Compass Group PLC (LSE:CPG) $17.05 $28,437.7 $32,176.5 $27,671.3 $2,472.2 $ x 13.0x 26.5x 23.0% 8.9% Sodexo S.A. (ENXTPA:SW) , , , , x 10.8x 26.0x 15.3% 6.4% Aramark (NYSE:ARMK) , , , , x 11.4x NM 9.9% 7.3% Mean $16,965.0 $20,343.2 $22,063.1 $1,694.5 $ x 11.7x 26.2x 16.1% 7.6% Median 15, , , , x 11.4x 26.2x 15.3% 7.3% Manned Security Services G4S plc (LSE:GFS) $4.32 $6,678.8 $9,452.4 $12,438.2 $590.1 $ x 16.0x NM 18.2% 4.7% Securitas AB (OM:SECU B) , , , x 10.1x 18.4x 17.3% 6.3% Corrections Corporation of America (CXW) , , , x 14.4x 30.3x 29.0% 22.8% The GEO Group, Inc. (GEO) , , , x 14.3x 31.7x 26.2% 19.2% Prosegur Compañía de Seguridad, S.A. (CATS:PSG) , , , x 7.5x 14.0x 23.4% 12.5% The Brink's Company (BCO) , , , x 4.4x 10.4x 18.6% 8.1% Command Security Corp. (MOC) x 6.7x 10.2x 13.6% 2.3% Mean $3,274.3 $4,448.0 $4,835.2 $395.9 $ x 10.5x 19.2x 20.9% 10.8% Median 3, , , x 10.1x 16.2x 18.6% 8.1% Uniform / Linen Rentals Cintas Corporation (CTAS) $73.15 $8,557.0 $9,275.6 $4,553.6 $805.2 $ x 11.5x 26.0x 42.5% 17.7% Berendsen plc (LSE:BRSN) , , , x 5.9x 22.6x 50.1% 31.8% UniFirst Corp. (UNF) , , , x 7.7x 18.2x 38.5% 19.1% G&K Services Inc. (GK) , , x 11.0x 22.4x 33.9% 15.2% Mean $3,705.5 $4,056.9 $2,163.8 $445.1 $ x 9.0x 22.3x 41.3% 20.9% Median 2, , , x 9.4x 22.5x 40.5% 18.4% (continued on next page) NA = Not Available; NM = Not Meaningful; LTM = Latest Twelve Months (1) As of close November 28, = excluded from Mean and Median calculations (2) Enterprise value is defined as equity value plus net debt, preferred stock and minority interests. Net Debt includes Source: Public Filings, Press Releases and Published Research Reports. long term debt, short term debt, postretirement benefits and unfunded pensions, if applicable, less cash and cash equivalents. (3) As of September 30, 2014 except ARMK (October 3, 2014); GK (September 27, 2014); CTAS and SW (August 31, 2014); UNF (August 30, 2014); ABM (July 31, 2014); BRSN, GFS and RTO (June 30, 2014). (4) Excludes non-recurring and discontinued operations. 11

14 Fixed Asset Management ($ in millions, except per share data) Market & Capitalization LTM Performance (3) Valuation Margins Equity Enterprise Enterprise Value/ Price/ Gross Company Price (1) Value Value (2) Revenue EBITDA (4) EPS Revenue EBITDA EPS Profit EBITDA Waste Management Services Waste Management, Inc. (WM) $48.73 $22,314.5 $32,594.5 $14,059.0 $3,479.0 $ x 9.4 x 22.8 x 35.3% 24.7% Republic Services, Inc. (RSG) , , , , x 8.5 x 19.8 x 38.3% 28.6% Stericycle, Inc. (SRCL) , , , x 18.1 x 33.8 x 45.7% 28.5% Waste Connections Inc. (WCN) , , , x 11.1 x 24.6 x 45.2% 34.3% Clean Harbors, Inc. (CLH) , , , x 7.5 x 25.8 x 28.3% 15.3% Casella Waste Systems Inc. (CWST) (0.19) 1.31 x 8.3 x NM 28.2% 15.8% Heritage-Crystal Clean, Inc (HCCI) x 13.6 x 68.0 x 17.8% 7.3% Mean $8,067.8 $11,269.5 $4,501.3 $1,141.7 $ x 9.7 x 25.4 x 34.1% 22.1% Median 5, , , x 8.9 x 24.6 x 35.3% 24.7% NA = Not Available; NM = Not Meaningful; LTM = Latest Twelve Months (1) As of close November 28, = excluded from Mean and Median calculations (2) Enterprise value is defined as equity value plus net debt, preferred stock and minority interests. Net Debt includes Source: Public Filings, Press Releases and Published Research Reports. long term debt, short term debt, postretirement benefits and unfunded pensions, if applicable, less cash and cash equivalents. (3) As of September 30, 2014 except HCCI (September 6, 2014) and CWST (July 31, 2014). (4) Excludes non-recurring and discontinued operations. Selected M&A Transactions Announced Target Target Description Acquirer Value November 12 G4S Government Solutions, Inc. Provider of security, fire and emergency services A&M Capital Advisors, LLC $135.0 November 6 Cintas Corporation, Document Storage and Imaging Businesses Provider of document storage and imaging services Access Corp. ND ND Not disclosed. Transaction values in millions. Selected News Aramark (NYSE:ARMK) reported net income of $149.0 million for fiscal year 2014 as compared to $69.4 million for the prior year. Earnings per share were $0.63 versus $0.34 for the prior year. Revenues for the year increased to $14,832.9 million from $13,945.7 million for fiscal year Clean Harbors, Inc. (NYSE:CLH) reported third quarter net income of ($93.3) million for fiscal year 2014 as compared to $35.4 million for the prior year period. Earnings per share were ($1.55) versus $0.58 for the prior year period. Revenues for the quarter decreased to $851.5 million from $907.5 million for the same period in fiscal year 12

15 Fixed Asset Management Compass Group PLC (LSE:CPG) reported net income of $1,403.2 million for fiscal year 2014 as compared to $694.6 million for the prior year. Earnings per share were $0.79 versus $0.40 for the prior year. Revenues for the year decreased to $27,671.3 million from $28,425.5 million for fiscal year Command Security Corp. (AMEX:MOC) reported second quarter net income of $0.4 million for fiscal year 2015 as compared to $0.6 million for the prior year period. Earnings per share were $0.04 versus $0.07 for the prior year period. Revenues for the quarter decreased to $34.4 million from $40.1 million for the same period in fiscal year Corrections Corporation of America (NYSE:CXW) reported third quarter net income of $57.5 million for fiscal year 2014 as compared to $51.8 million for the prior year period. Earnings per share were $0.49 versus $0.44 for the prior year period. Revenues for the quarter decreased to $408.5 million from $421.5 million for the same period in fiscal year G&K Services Inc. (NasdaqGS:GK) has announced the appointment of Lee Schram to the Company's Board of Directors. Prosegur Compañía de Seguridad, S.A. (CATS:PSG) reported third quarter net income of $53.6 million for fiscal year 2014 as compared to $59.5 million for the prior year period. Earnings per share were $0.12 versus $0.13 for the prior year period. Revenues for the quarter decreased to $1,220.1 million from $1,225.5 million for the same period in fiscal year Securitas AB (OM: SECU B) reported third quarter net income of $79.3 million for fiscal year 2014 as compared to $80.6 million for the prior year period. Earnings per share were $0.22 versus $0.22 for the prior year period. Revenues for the quarter decreased to $2,494.8 million from $2,585.0 million for the same period in fiscal year Sodexo S.A. (ENXTPA:SW) reported net income of $644.2 million for fiscal year 2014 as compared to $579.6 million for the prior year. Earnings per share were $4.19 versus $3.80 for the prior year. Revenues for the year decreased to $23,685.0 million from $24,288.1 million for fiscal year SP Plus Corporation (NasdaqGS:SP) reported third quarter net income of $4.3 million for fiscal year 2014 as compared to $3.7 million for the prior year period. Earnings per share were $0.19 versus $0.17 for the prior year period. Revenues for the quarter increased to $206.9 million from $200.5 million for the same period in fiscal year Stericycle, Inc. (NasdaqGS:SRCL) has announced the appointment of Brent Arnold as Chief Operating Officer. The GEO Group, Inc. (NYSE:GEO) reported third quarter net income of $39.0 million for fiscal year 2014 as compared to $29.9 million for the prior year period. Earnings per share were $0.54 versus $0.42 for the prior year period. Revenues for the quarter increased to $457.9 million from $379.8 million for the same period in fiscal year Note: All per share results are reported on a fully diluted basis. 13

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