Equity Financing Decreased to 50.8% for Large Corporate in 2021-Q2

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2021-Q2 Private Equity Trends Table of Contents

Page Deal Activity 3 Deal Financing and Pricing 6 Fundraising 11 Exits 13

PAGE 2 2021-Q2 Investment volume and number of deals increased by 60% and 61% respectively from 2020-Q2

Deal Value (Bil.) No. of Deals

$800

6,000 $700 $753 $745

$684 5,000 $600 $648 $596 $500 4,000 $533 $505 $400

$441 3,000

$300 $380 $345 2,000

$200 $283

1,000 $175 $100 $173

$0 - 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 Q2 2021 2021

PAGE 3

Source: PitchBook The 10 largest U.S. private equity deals in 2021-Q2 accounted for 29% of total deal value

Investment Value Rank Company Description Date Financial Sponsor (Bil.)

Business/Productivity RealPage 4/22/2021 $10.20 Thoma Bravo 1 Software

IT Consulting and Perspecta 5/06/2021 $7.10 Peraton, Veritas Capital 2 Outsourcing

Apollo Global Management, Certares, Hertz Road 5/12/2021 $6.50 3 Knighthead Capital Management

Insight Partners, Norwest Venture Partners, CoreLogic Other Commercial Services 6/04/2021 $6.00 4 Stone Point Capital

BayPine, StepStone Group, TSG Mavis Tire Supply Automotive 5/04/2021 $6.00 5 Consumer 6 Michaels Stores Specialty Retail 4/15/2021 $5.00 Apollo Global Management 7 Pluralsight Educational Software 4/06/2021 $3.50 Vista Equity Partners

Elliott Management, Evergreen Coast Cubic Aerospace and Defense 5/25/2021 $3.10 8 Capital, Veritas Capital

9 A Cloud Guru Educational Software 6/02/2021 $2.00 Pluralsight, Vista Equity Partners

Network Management ThycoticCentrify 4/13/2021 $1.40 Centrify, TPG 10 Software

Note: The list above only reflects completed private equity transactions with disclosed investment values PAGE 4

Source: PitchBook, Web search The average proportion of equity financing for LBO transactions decreased to 51.1% in 2021-Q2

Contributed Equity Rollover Equity Debt Other Sources of Financing 100%

80% 48.2% 49.9% 51.3% 51.3% 51.6% 55.6% 54.8% 55.0% 57.7% 56.1% 56.2% 56.3% 59.6% 60.2% 61.4% 54.5% 65.4% 61.8% 65.7% 60% 66.4% 0.6% 2.7% 0.8% 1.9% 5.1% 1.6%

40% 2.4% 2.4% 1.9% 1.6% 3.8% 3.6% 1.6% 1.5% 4.7% 1.4% 2.7% 2.5% 2.0% 2.3% 50.5%

20% 47.2% 46.8% 45.5% 45.5% 42.1% 41.4% 41.1% 40.5% 40.4% 38.8% 38.3% 38.0% 37.0% 35.7% 34.8% 32.6% 31.0% 30.8% 29.8%

0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 Q2 2021 2021

Note: Contributed equity is equity provided by LBO sponsors. Rollover equity is equity in the pre-LBO company that is not cashed out, but rolled over and reinvested into the post-LBO company. Debt includes bank debt, secured debt, senior unsecured debt, public/high yield debt, bridge loan and mezzanine debt. Other represents cash held by the target company. PAGE 5

Source: Standard and Poor’s Capital IQ Leveraged Commentary and Data 6

Equity financing decreased to 50.8% for large corporate in 2021-Q2

Equity Financing Middle Market Large Corporate

70%

60%

50% 58.5% 51.4% 50.8% 50.1% 49.3% 40% 48.9% 47.3% 47.2% 45.9% 45.7% 45.5% 45.3% 45.3% 45.0% 42.9% 42.5% 42.1% 42.0% 41.5% 41.4% 41.3% 40.7% 40.3% 30% 39.2% 37.7% 37.0% 35.2% 34.2% 32.3% 31.5% 20%

10% 0.0% 0.0% N/A N/A N/A 0% N/A 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 Q2 2021 2021

Note: Large corporate issuers have EBITDAs of more than $50 million. Middle market issuers have EBITDAs of $50 million or less.

PAGE 6

Source: Standard and Poor’s Capital IQ Leveraged Commentary and Data U.S. LBO loan volume in 2021-Q2 increased 258.2% to $40 billion as compared to 2020-Q2

Loan Volume (Bil.)

$150 $113

$100 $97 $85 $78 $78 $76 $73 $67 $59 $51 $47 $50 $46 $40 $31 $5

$0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 Q2 2021 2021

Note: Data above reflect all loans syndicated in the U.S. market for the purpose of LBOs. Ex-U.S. companies are excluded.

PAGE 7

Source: Standard and Poor’s Capital IQ Leveraged Commentary and Data The 10 largest U.S. LBO loans in 2021-Q2 accounted for 52% of the total LBO loan volume

Rank Company Description Launch Date1 Loan Value (Bil.) Financial Sponsor

1 McAfee Enterprise Computers & Electronics 4/16/2021 $2.95 Symphony Technology Group 2 Proofpoint Computers & Electronics 6/1/2021 $2.85 Thoma Bravo LLC 3 First Student /First Transit Transportation 6/28/2021 $2.52 EQT Partners

Manufacturing & Culligan Holding 6/7/2021 $2.48 BDT Capital Partners LLC 4 Machinery 5 Cubic Computers & Electronics 4/16/2021 $2.18 Veritas Capital 6 Mavis Tire Express Services Retail 4/19/2021 $2.12 BayPine LP 7 Conair Corporation Home Furnishings 5/6/2021 $1.67 American Securities Capital Partners 8 ACProducts Forest Product 4/26/2021 $1.60 Platinum Equity 9 Wells Fargo Asset Management Services & Leasing 4/13/2021 $1.41 GTCR Golder Rauner 10 Ascensus Services & Leasing 5/12/2021 $1.23 Stone Point Capital

Note: The ranked list is based on a sample of all loans syndicated in the U.S. market for the purpose of LBOs. Ex-U.S. companies are excluded. Companies with loans in the table above may be involved in transactions that are still ongoing and therefore, will not appear in the list of top 10 private equity transactions (slide 4). 1 Date of loan syndication. PAGE 8

Source: Standard and Poor’s Capital IQ Leveraged Commentary and Data, Web search Average debt multiples for U.S. LBOs increased to 5.9x in 2021-Q2 as compared to 4.9x in 2020-Q2

Debt/EBITDA 7x

6x 6.2x 6.1x 5.9x 5.8x 5.8x 5.7x 5.7x 5.7x

5x 5.6x 5.4x 5.4x 5.3x 5.3x 5.1x 5.0x 4.9x 4x 4.6x 3.8x 3x

0x 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 Q2 2021 2021 Note: EBITDA is adjusted for cost savings and synergies. Debt includes senior debt and subordinated debt.

PAGE 9

Source: Standard and Poor’s Capital IQ Leveraged Commentary and Data The average purchase price multiples for U.S. LBOs decreased to 11.5x in 2021-Q2 from 11.9x in 2021-Q1

Equity/EBITDA Senior Debt/EBITDA Sub Debt/EBITDA Others

Purchase Price Multiple

14x 11.9x 11.5x 11.5x

12x 11.4x 10.6x 10.6x 10.3x 10.0x 9.7x 10x 9.7x 9.1x 8.8x 8.8x 8.7x 8.5x 8.4x 8.4x

8x 7.7x

2x NA 0x 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 Q2 Q2 2021 2021 2021 M&A 1 Note: EBITDA is adjusted for cost savings and synergies. 1 Average purchase price multiples for six months ending Jun, 2021.

PAGE 10

Source: Standard and Poor’s Capital IQ Leveraged Commentary and Data Annual U.S. private equity fundraising volume reached $180 billion in 2021-H1

Capital Raised (Bil.) Capital Raised (Bil.) No. of Funds No. of Funds

$350 600

$300 $332 500

$250

$275 400 $252 $200 $223 300 $208

$150 $185 $180 $178 $162 $161 200 $100 $110

$101 100 $50 $72 $56

$0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 1H 2021 Note: Graph above reflects data from buyout, diversified equity, growth equity, infrastructure and energy funds.

PAGE 11

Source: PitchBook U.S. callable capital reserves (“dry powder”) of private equity funds decreased to $736 billion as of December 2020

Dry Powder

Dry Powder (Bil.)

$800

$700 $760 $736 $714 $600 $614 $500 $530

$400 $471 $411 $407 $396 $392

$300 $376 $363 $354 $347 $342

$200

$100

$0 Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Note: Dry powder figures are global and not specific to the United States.

PAGE 12

Source: Pitchbook Annual U.S. exit volume increased 160% from 2020-Q2 to $141 billion in 2021-Q2

Exit Amount (Bil.) Exit Amount (Bil.) No. of Exits No. of Exits

$450 1600

$400 $421

$350 $407

$383 1200 $381

$300 $358 $361 $323 $318 $250

$272 800 $200 $231

$150 $187 400

$100 $149 $141 $129

$50 $93

$0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 Q2 2021 2021

PAGE 13

Source: PitchBook Two of the ten largest U.S. private equity exits during 2021-Q2 were strategic M&As

Rank Company Name Exit Type1 Date Exit Size (Bil.) Sellers 1 RealPage Financial M&A 4/22/2021 $10.20 Apax Partners, Serent Capital, Volition Capital 2 Blue Yonder (Arizona) Strategic M&A 4/23/2021 $7.10 New Mountain Capital, The Blackstone Group 3 CoreLogic Financial M&A 6/4/2021 $6.00 Cannae Holdings, Senator Investment Group InTandem Capital Partners, PennantPark Floating Cano Health Strategic M&A 6/4/2021 $4.4 4 Rate Capital, PennantPark Investment Griffin Gaming Partners, John Burbank, Kohlberg Kravis Roberts, Maynard Webb, Nimble Ventures, AppLovin Public Offering 4/15/2021 $2.00 5 Orient Hontai Capital, Streamlined Ventures, Synetro Group, Ullas Naik, Webb Investment Network 4/15/2021 6 Agilon Health Public Offering $1.07 Clayton, Dubilier & Rice 7 LifeStance Health Public Offering 6/10/2021 $0.72 Silversmith Capital Partners, Summit Partners, TPG 8 Mister Car Wash Public Offering 6/25/2021 $0.65 Leonard Green & Partners, Penfund Canada Pension Plan Investment Board, Fidelity Endeavor Public Offering 4/29/2021 $0.51 Mgmt & Research, Fisher Lynch Capital, GIC, Saudi 9 Arabia's Public Investment Fund, Silver Lake, SoftBank 32 Equity, Annox Capital, Bond Capital, Booking Holdings, Delta Air Lines, Durable Capital Partners, General Atlantic, IPD Capital, J Ventures, Jump DC, CLEAR Public Offering 6/29/2021 $0.41 Liberty Media, LionTree Partners, LMM, Partnership 10 Fund for New York City, Revolution, RiverPark Ventures, Sterling Equities, T. Rowe Price, Union Square Hospitality, United Airlines

1 Financial M&A includes secondary buyouts and investor buyouts by management. Public offering includes initial public offerings and secondary offerings. Strategic M&A includes corporate acquisitions and merger of equals. Includes partial exits. PAGE 14

Source: PitchBook, Web search Public Offerings accounted for 60% of all U.S. private equity exits in 2021-Q2, up from 43% in 2020-Q2

Exit Amount Public offering Strategic M&A Financial M&A

100%

17% 20% 17% 28% 30% 34% 34% 80% 36% 39% 38% 40% 44% 48% 53% 23%

60% 48% 42% 40% 35% 32%

40% 40% 47% 55% 49% 51% 44% 41% 36% 60%

20% 37% 34% 32% 34% 34% 21% 17% 11% 12% 11% 11% 12% 11% 0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 Q2 2021 2021

Note: Financial M&A includes secondary buyouts and investor buyouts by management. Public offering includes initial public offerings and secondary offerings. Strategic M&A includes corporate acquisitions and merger of equals. PAGE 15

Source: PitchBook Annual proceeds raised from U.S. private equity-backed IPOs increased 263% from 2020-Q2 to $84 billion in 2021- Q2 Proceeds raised (Bil.) No. of IPOs Proceeds raised (Bil.) No. of IPOs $140 90

80 $120 70 $122 $100

$110 60

$80 50 $87 $84

$60 40

30 $56

$40 $53 $74 $45 $44 20 $38 $35 $32

$20 $31 $30 10

$0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q1 2021 Q2

PAGE 16

Source: PitchBook The largest U.S. private equity-backed public offering during 2021-Q2 raised $2.0 billion in proceeds

Proceeds Raised Rank Company Date Sellers (Bil.)

1 AppLovin 4/15/2021 $2.00 Griffin Gaming Partners, John Burbank, et. Al.1 2 Agilon Health 4/15/2021 S1.07 Clayton, Dublier & Rice 3 LifeStance Health 6/10/2021 $0.72 Silversmith Capital Partners, Summit Partners, TPG 4 Mister Car Wash 6/25/2021 $0.65 Leonard Green & Partners, Penfund 5 Frontier Airlines 4/01/2021 $0.57 Indigo Partners 6 Aveanna Healthcare 4/29/2021 $0.46 J.H. Whitney Capital Partners Annox Capital, Brighton Health, Cardinal Partners, Morgan Privia Health 4/29/2021 $0.45 Noble Healthcare Partners, Pamplona Capital 7 Management, Goldman Sachs Group 8 First Advantage 6/23/2021 $0.44 Silver Lake 9 The Honest Company 5/05/2021 $0.41 Alliance Bernstein, Argonautic Ventures, et. Al.2 10 CLEAR 6/30/2021 $0.41 32 Equity, Annox Capital, Bond Capital, et. Al.3

1 Kohlberg Kravis Roberts, Maynard Webb, Nimble Ventures, Orient Hontai Capital, Streamlined Ventures, Synetro Group, Ullas Naik, Webb Investment Network 2 BAM Ventures, Brookside Equity Partners, Bryant Stibel, Chaotic Investments, Dragoneer Investment Group, Fidelity Investments, General Catalyst, Glade Brook Capital Partners, Hartford Financial Services Group, ICONIQ Capital, IVP, Lawrence Hsu, L Catterton, Lightspeed Venture Partners, MicroVentures, Plus Capital, Prizker Group Venture Capital, Sfventures, Struck Capital, Tower Equity, Unilever, Wellington Management PAGE 17

3 Booking Holdings, Delta Airlines, Durable Capital Partners, General Atlantic, IPD Capital, Jump DC, J Ventures, Liberty Media, LionTree Source: PitchBook and Web search Partners, LMM, Partnership Fund for New York City, Revolution, RiverPark Ventures, Sterling Equities, T. Rowe Price, Union Square Hospitality Group, United Airlines Holdings 1 U.S. private equity-backed companies filed for bankruptcy during 2021-Q2 No. of Bankrupt Companies 80 70 60 68 67 62 59 50 55 40 41 30 37 33 36 20 24 4 10 1 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 Q2 2021 2021

Bankruptcies of U.S. Private Equity-Backed Companies in 2021-Q2 Company Description Date The Collected Group Apparel and Accessories 4/5/2021

PAGE 18 Source: PitchBook, Web search One bankrupt U.S. company received private equity investment in 2021-Q2

No. of Companies 40

30 32

10 14 10 9 8 9 9 6 1 1 0 1 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 Q2 2021 2021

Private Equity Investment in Bankrupt U.S. Companies in 2021-Q2 No. of Investment Company Description Date Financial Sponsor Employees Value (Mil.) Apollo Global Management, Commercial Hertz 16,960 5/12/2021 $6,500 Certares, Knighthead Capital Transportation Management

PAGE 19

Source: PitchBook, Web search Leveraged loan volume for U.S. issuers increased by 111% in 2021-H1 to $376 billion from 2020-H1

Loan Volume (Bil.)

$600 $564

$500 $555 $540 $510 $469 $400 $464 $449 $433 $412 $380 $376 $354 $300 $354 $291

$200 $248 $216 $178

$100 $159 $148 $137 $136 $67 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 H1 H1 2020 2021 Note: For the purpose of this report, leveraged loans include speculative-grade loans or unrated loans priced at or above LIBOR+125 basis points. 2018 Quarterly data is not equal to total 2018 data PAGE 20

Source: Standard & Poor’s Capital IQ Leveraged Commentary and Data 799 9th Street NW, Suite 200 Washington, DC 20001

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