APPLICATION DEVELOPMENT & DEPLOYMENT REMOTE WORKFORCE DRIVES ENTERPRISE NEEDS

October 2020

3 APPLICATION DEVELOPMENT & DEPLOYMENT Remote Workforce Drives Enterprise Needs

TABLE OF CONTENTS INDUSTRY OUTLOOK

 Industry Outlook The pandemic has catalyzed demand for application development (AppDev) and deployment software and services in order to meet the surge of online  Segment Highlight consumers, students, and employees in the remote environment. Globally,  M&A Overview mobile app usage increased 40% year-over-year (YOY) in Q2 and new app  Notable Transactions downloads by consumers reached an all-time high of 35 billion, according to App Annie.1 In the workplace, the pandemic has heightened the need for  Buyer Universe enterprise-wide digital transformations for improved connectivity and  Select Transactions transparency. This has supported industry growth and has driven new  IPO Activity subscribers to platforms which promote workplace collaboration such as (Nasdaq:TEAM) and (NYSE:WORK), who saw revenue for the  COVID-19 Impacts recently closed quarter increase 29% and 49%, respectively (see page 10).  Public Company Data While recessionary dynamics such as downsizing and hiring freezes have  Report Contributors impacted aspects of AppDev & Deployment businesses, the at-home workforce alongside heightened demand for digital sophistication in industries  Firm Track Record such as Healthcare and Education, has proved an overall boon for the industry.

Amid global lockdowns, network security and rapid app deployment have become more pressing requirements for leading industry players. In June, Amazon (Nasdaq:AMZN) released no-code platform HoneyCode followed in July by machine-learning tool CodeGuru, which helps developers verify code quality and streamline an app’s launch. Notably, (Nasdaq:MSFT) CONTACTS also acquired Cyber X, an of Things (IoT)/Operational Technology (OT) security provider to enterprises worldwide (June, undisclosed). The AppDev & David DeSimone Deployment industry is poised for significant long-term growth and Capstone Managing Director expects equally robust merger & acquisition (M&A) activity. 617-619-3324 [email protected] Market Breakdown: Application Development & Development Operations David Michaels 3.7% 1.4% Managing Director 5.5% 858-926-5950 Chat/Video [email protected] Project Management 6.2% Infrastructure Automation Tools 6.2% Test Automation 44.7% Low Code 9.9% Monitoring Other Coding/Building 22.4% Robotic Process Automation

Source: PitchBook 2020 estimates, Gartner, 451 Research, IDC, Forrester, VMware, DataDog, New Relic, Pivotal, and SmartBear.

2 Application Development & Deployment | October 2020

SEGMENT HIGHLIGHT: ENTERPRISE SERVICE MANAGEMENT

Enterprise service management (ESM) has become pivotal in the disparate workforce to strengthen business The current environment has continuity and to promote transparency, productivity, and “ significantly accelerated existing long-term efficiency within teams and across organizations. In trends related to cloud transformation, addition to pandemic-driven demand, the ongoing remote collaboration, and the rise of growth and proliferation of software development managed services. processes such as Agile has made coordinated cross- platform delivery increasingly essential to enhance visibility, reduce costs, and drive value. ” - Netrix CEO Rob Dang August press release4 Coveted differentiators that select ESM providers offer include business workflows, machine learning, and advanced information technology (IT) solutions. Cloud technology has also been a key tool for enhancing As software and service providers in the AppDev & enterprise digitalization at speed and scale. Leading Deployment industry seek to support all aspects of their providers in this space include Atlassian, who began free customers’ successful digital transformation, many have cloud migration trials in March to expedite its transition turned to M&A to augment their software and service to a cloud-first company, and Accenture (NYSE:ACN), who offerings. Capstone expects transaction activity in this announced in September that it would invest $3 billion space to remain strong as demand for sophisticated over the next three years to help clients become cloud technology integration is galvanized by the pandemic. first.2 “COVID-19 has created a new inflection point that requires every company to dramatically accelerate the Recent M&A deals in the ESM segment include: move to the cloud as a foundation for digital transformation to build the resilience, new experiences  OceanSound Partners Acquires Minority Stake in and products, trust, speed, and structural cost reduction Netrix LLC (August, Undisclosed) – Netrix is a leading that the ongoing health, economic, and societal crisis provider of IT solutions ranging from custom demands—and that a better future for all requires,” application development to cloud infrastructure and Accenture CEO Julie Sweet stated in a press release. workplace collaboration. The private equity investment will allow Netrix to expand its offerings The Global Public Cloud Services market is projected to and deploy its acquisition strategy. grow 10.7% annually to reach $364 million from 2019 to 2022, according to Gartner.3 Within this market, the  Atlassian Acquires Mindville (July, $4.1 Million) – Cloud Application Infrastructure Services segment is Mindville is a Swedish company that offers Jira- forecasted to grow at the fastest rate of 17.7% per year to centric asset tracking and configuration management reach $72 million by 2022. to enterprises worldwide. The acquisition will bolster Atlassian’s IT Service Management (ITSM) offerings.

Projected Cloud Services Growth by Segment  ServiceNow, Inc. Acquires Sweagle (June, $28.1 Million) – Sweagle is a Belgium-based provider of Application Business Process data configuration management. The acquisition will System Infrastructure Application Infrastructure enhance ServiceNow’s (NYSE:NOW) DevOps and IT Management and Security Desktop $500 Business Management segments and will advance its newly launched Service Graph roadmap, ultimately $400 $364.1 improving the speed and ease of enterprise $306.9 application data integration. $300 $242.7 $257.9  BMC Software Acquires Compuware Corp. $200 (March, $2 Billion) – Compuware provides mainframe $100 application development, delivery, and support

U.S. Dollars in Thousands solutions. The deal will help customers manage their $0 mainframe as part of their enterprise DevOps and to 2019 2020 2021 2022 integrate it into their enterprise technology stack. Source: Gartner and Capstone Research 3 Application Development & Deployment | October 2020

M&A OVERVIEW

The AppDev & Deployment industry has demonstrated Monthly M&A Transactions resilience and heightened demand throughout the COVID- 2019 2020 19 pandemic, as consumers and businesses around the 20 globe fully embraced digital platforms and mobile applications as way to connect and communicate amid 15 14 social distancing measures and lockdowns. Industry M&A 11 activity increasing 50% YOY in North America and Europe, 10 10 9 9 with 72 announced or closed transactions year-to-date 8 8 (YTD) compared to 48 deals YTD in 2019. 7 5 5 555 5 4 4 44

Number of Transactions Number 3 In addition to increased volume, the industry saw two noteworthy shifts in deal trends. Firstly, the breakdown of 0 buyers transitioned from its two-year average of ~70% Jan. Feb. March April May June July August Sept. strategic acquirers and ~30% financial to 87% strategic YTD and only 13% financial in YTD 2020. This increase of private and public company appetite was likely driven in part by the need for enterprises to adopt and improve digital solutions. Secondly, while the historic blend of targets has been ~75% software companies to ~25% Software & Services M&A Breakdown service providers, this year service providers have been Software Services more frequently targeted, making up 35% of total deals YTD. As companies have sought application development 100% and modernization, both prior to and in the new 25.0% 25.7% 34.7% landscape of the pandemic, AppDev service providers are 75% strengthening their suite of solutions. In two recent examples, technology consulting firms Concord USA 50% (acquired HyperAspect in September) and HTEC Group 75.0% 74.3% (acquired Execom August), noted that their respective 65.3% acquisitions would support increased demand as 25%

disruption from COVID-19 has accelerated customer’s PercentageAcquisitions of urgency for digital initiatives. 0% 2018 2019 2020 YTD We expect M&A activity to remain at an elevated level for the foreseeable future as demand from the digital Note: Year-to-date ended September 18 revolution is accelerated by the impact of the pandemic. Source: Capital IQ, PitchBook, FactSet, and Capstone Research

Key M&A Value Drivers

Enterprise Management Low-Code, No-Code Improve transparency, productivity, and efficiency Enables rapid application deployment without within teams and across organizations. requiring highly skilled software developers.

Cloud Technology Development Continuous Testing Supports migration to the cloud to allow a Utilizes AI and machine learning to monitor for scalable, agile, and holistic digital transformation. threats and reduce unplanned downtimes.

End-to-End Solutions Interoperability Offers software solutions to serve every stage of Ability to connect new and legacy software the complex application development lifecycle. systems to create operational visibility.

4 Application Development & Deployment | October 2020

NOTABLE TRANSACTIONS

Several notable transactions have been announced or completed in the industry to-date in 2020. Select transactions are outlined below, followed by historic notable buyers in the space and a comprehensive list of M&A transactions.

Progress Software Corporation to Acquire Chef, Inc. (September 2020, $220 Million, 3.1x EV/Revenue)

Global application development provider Progress Software (Nasdaq:PRGS) has agreed to acquire Chef, a provider of cloud infrastructure automation solutions, for $220 million or 3.1x EV/Revenue. The transaction is expected to close in October 2020 and will include $120 million in existing cash on hand and $100 million in secured funds from Progress’ existing credit facility. Chef will join Progress’ AppDev & Deployment Segment, enhancing its core offerings by improving response time and efficiency, and is expected to be accretive by Q1 2021. Chef provides DevOps and DevSecOps (Development, Security, Operations) using cloud, multi-cloud, and on-premise infrastructure automation solutions. The To Acquire company serves many blue-chip customers and has an annual recurring revenue of more than $70 million, according to Progress’ press release.

“This acquisition perfectly aligns with our growth strategy and meets the requirements that we’ve previously laid out: a strong recurring revenue model, technology that complements our business, a loyal customer base and the ability to leverage our operating model and infrastructure to run the business more efficiently,” Progress CEO Yogesh Gupta said in the press release.5

Chef CEO Barry Crist added, “Chef and Progress share a vision for the future of DevSecOps and Progress will provide the scale to further drive Chef’s platform forward and deliver additional value to our customers. At the same time, Chef fills a need in the Progress portfolio in DevSecOps, infrastructure, application, and compliance automation that is highly complementary to its existing products. For Chef, this acquisition is our next chapter, and Progress will help enhance our growth potential, support our Open Source vision, and provide broader opportunities for our customers, partners, employees and community.”

Keysight Technologies, Inc. Acquires Eggplant Limited (June 2020, $330 Million, 8.7x EV/Revenue)

California-based Keysight Technologies (NYSE:KEYS), a company with more than $4.3 billion in annual revenue that helps enterprises worldwide to accelerate their technology solutions, has acquired Eggplant Limited for $330 million or 8.7x EV/Revenue from The Carlyle Group. Eggplant utilizes artificial intelligence (AI) and machine learning to create automatic, continuous application testing and to improve application development time-to-market. Formerly known as TestPlant Europe, Eggplant was founded in 2008 and is based in the U.K. with additional locations in Germany and the U.S. Eggplant serves a range of industries including Automotive, Aerospace & Defense, Financial Services, Healthcare, Acquires Telecom & Media, and Retail and works with top-tier customers such as NASA, Cerner Corporation (NasdaqGS:CERN), and Walmart Inc. (NYSE:WMT). The acquisition is highly complementary and will strengthen Keysight’s position as an innovative provider of software solutions.

“As a recognized leader and trusted advisor in layer 1-7 design and test, Keysight is excited to add Eggplant’s test capabilities for the software application layer, aligning with our strategy to grow our first-to-market software-centric solutions,” Keysight CEO Ron Nersesian said in a press release.6

"Joining forces with Keysight gives Eggplant the ability to scale our intelligent automation platform and reach more organizations across the globe," Eggplant CEO Dr. John Bates stated in the press release. "We share a vision to accelerate innovation and together we will be able to help customers on their digital transformation journey.”

5 Application Development & Deployment | October 2020

BUYER UNIVERSE

Over the past five years, Capstone has followed buyers that have been highly acquisitive in the space as well as those that have completed notable AppDev & Deployment transactions. Capstone’s industry expertise and network provides us with unique insights into this buyer universe such as the companies’ industry and growth perspectives.

Leading Strategic Buyers

Leading Financial Buyers

Source: 451 Research, Capital IQ, PitchBook, FactSet, and Capstone Research

6 Application Development & Deployment | October 2020

SELECT TRANSACTIONS

Enterprise EV / LTM Date Target Acquirer Target Business Description Value (mm) Revenue EBITDA

Operates as a software development company and is 09/16/20 Ifective Group Avit Group --- based in the Netherlands. Greenfinch Develops cross-platform mobile apps and developing 09/13/20 TEKenable Technology custom software solutions based in Dublin, Ireland. ---

Fourcast by Devoteam Develops business cloud computing applications 09/08/20 Devoteam (PAR: DVT) intended for organizations. ---

Progress Software Provides cloud-based infrastructure automation 09/08/20 Chef $220.0 3.1x - (Nasdaq:PRGS) solutions.

Operates as a software development and technology 09/02/20 HyperAspect Concord --- consulting company.

Cognizant Provides full stack web development, enterprise 08/25/20 Tin Roof Software --- (Nasdaq:CTSH) solutions, and mobile solutions.

Offers idea, design, production, and maintenance of 08/19/20 Execom HTEC Group --- complex software solutions.

Designs, develops, and implements software 08/17/20 Codice Software Unity Software --- configuration management (SCM) solutions.

Gofore Develops AI-powered cloud based robotic software 08/10/20 Qentinel Finland $12.8 0.9x 6.4x (HLSE:GOFORE) testing platform and is based in Finland.

Provides custom software development services and 08/10/20 JMMJ Uptime Systems --- is based in Poland.

OceanSound Provides solutions including custom software 08/06/20 Netrix --- Partners application, mobile, and wireless device application. izertis Develops mobile, backend and frontend solutions 08/03/20 Solid Gear $1.2 1.2 8.6x (BME:IZER) in Spain.

Operates as a software development company and is 07/24/20 Trivago Spain METRO Markets --- based in Spain. Develops design data management (DM) tools for the 07/20/20 Methodics Perforce Software integrated circuit (IC) design collaboration. ---

QinetiQ Operates a software development and data analytics 07/14/20 Naimuri $31.2 11.3x (LON: QQ.) company located in England.

Bonsai Partners, Offers enterprise resource planning (ERP) and rich 07/13/20 Codeoscopi --- FCR internet applications (RIA) solutions. Develops a visual testing and review platform intended 07/09/20 Percy BrowserStack to detect visual changes in user interfaces. ---

FogChain Global Star Provides an end-to-end software development life 07/08/20 --- (CNSX:FOG) Education Group cycle and quality assurance solutions in Canada. Vertex Software Provides web development services, specializing in 06/29/20 Level 5 Lab (Austin) building online, browser-based software applications. ---

Keysight Tech. Develops an automated software testing tool based in 06/25/20 Eggplant $330.0 8.7x (NYS: KEYS) the U.K.

ServiceNow Develops a SaaS-based platform that consolidates 06/25/20 Sweagle $28.1 (NYS: NOW) configuration data for enterprise applications. --

Microsoft Develops an industrial cybersecurity platform designed 06/22/20 Cyber X $170.0 33.5x (NAS: MSFT) to reduce IIoT and ICS risk.

Improving 06/18/20 iTexico Offers software development services. - - - Holdings Source: Capital IQ, PitchBook, FactSet, and Capstone Research 7 Application Development & Deployment | October 2020

SELECT TRANSACTIONS (CONTINUED)

Enterprise EV / LTM Date Target Acquirer Target Business Description Value (mm) Revenue EBITDA

Numerify, Develops an AI-powered analytics engine for Global 06/16/20 Digital.ai Software --- Inc./Experitest 2000 IT organizations. TestCraft Develops a cloud-based software as a service 06/15/20 Perforce Software Technologies testing platform. ---

06/11/20 Peach Tech GitLab Provides security testing software services. ---

Synopsys Offers data solutions to fabless companies, OSATs, 06/10/20 Qualtera --- (NasdaqGS:SNPS) IDMs, and foundries.

Provides digital strategy, websites, and application 06/01/20 Skylab Inc & Co Ltd --- development services.

nChain Holdings Offers custom software development and 04/14/20 Crea --- Limited implementation services and is based in Slovenia.

Provides outsourced web and application 04/14/20 RocketBuild Recruit Rooster --- development services. Sinch AB Provides AI-based customer messaging SaaS and APIs 03/26/20 Wavy Global $118.9 1.3x (OM:SINCH) to integrated into existing CRM systems. -

Sinch AB Provides AI-enabled multi-lingual chatbots and 03/19/20 Chatlayer $7.4 8.5x (OM:SINCH) voicebot SaaS. -

Hellman & Develops a platform for DevOps and CI environments 03/16/20 Checkmarx $1,150.0 - - Friedman; TPG by redefining security’s role. Provides subscription-based Java virtual machines 03/04/20 Azul Systems Vitruvian Partners $340.0 - (JVM) for enterprise applications. -

Provides software solutions and application practices 03/02/20 Compuware BMC Software, Inc. for IT organizations worldwide. ~$2,000.0 - -

Salesforce.com Provides omni-channel customer relationship 02/25/20 Vlocity $1,400.0 - (NYSE:CRM) management SaaS and application development. -

Segue Tetra Tech, Inc. Offers application development, enterprise data 02/25/20 $50.5 - - Technologies (NasdaqGS:TTEK) management, and cloud-based product development.

Zen3 Infosolutions Tech Mahindra 02/24/20 Specializing In software development and applications. $64.0 1.7x - (America) (Americas), Inc. Infosys Limited Provides cloud integration services designed to help 02/10/20 Simplus $200.0 - (NSEI:INFY) users streamline workflows and business processes. -

Forescout Advent; Crosspoint Provides an agentless approach to network security to 02/06/20 $1,607.5 - Technologies Capital for mobile computing, IoT, and cloud computing. -

Alithya Group Inc. Provides custom software development and quality 02/03/20 Askida $12.1 1.2x - (TSX:ALYA) assurance services. ServiceNow Provides AI-enabled natural language processing (NLP) 01/28/20 Passage AI $33.2 - (NYS: NOW) bots for customer relationship management. -

ServiceNow Provides AI-based log monitoring and analytics 01/22/20 Loom Systems $58.4 - (NYS: NOW) software and SaaS for ITOps and DevOps teams. -

Provides a no-code development platform for 01/14/20 AppSheet Google -- application software. -

Synopsys Provides security-as-a-service based website 01/09/20 Tinfoil Security --- (Nasdaq:SNPS) security solutions. Snap Inc. 01/03/20 AI Factory Designs and develops an application software. $166.0 - - (NYSE:SNAP)

Source: Capital IQ, PitchBook, FactSet, and Capstone Research 8 Application Development & Deployment | October 2020

INITIAL PUBLIC OFFERING ACTIVITY

Following an active year of initial public offerings (IPOs) in 2019, activity slowed in the first half of 2020 amid the COVID-induced market volatility. IPO registrations have recently seen an uptick, with the filings of cloud-native monitoring and troubleshooting platform Sumo Logic (September), cloud data platform Snowflake (September), DevOps platform JFrog (September), and work management platform Asana (August).

Valuation Total Raised Current Enterprise Notable Company Date At IPO (mm) At IPO (mm) Value (mm) Investors Stock Price

• Battery Ventures 09/17/20 ~$2,170.0 $325.6 $2,728.9 (Nasdaq:SUMO) • Tiger Global

• Ventures 09/16/20 $33,320.0 $3,360.0 $64,678.1 • Berkshire Hathaway (NYSE:SNOW)

• Gemini Israel • Dell Technologies 09/16/20 $3,900.0 $352.0 $6,720.3 (Nasdaq:FROG) • Insight Partners • Scale Venture

• Silver Lake Filed ~$1,500.0 ~$413.5 NA • Sequoia Capital NA 08/20/20 (NYSE:ASAN) • D1 Capital Partners

• OpenView Ventures 09/19/19 $7,830.0 $648.0 ~$25,897.2 (Nasdaq:DDOG) • ICONIQ Capital

Filed $4,410.0 $544.0 $11,647.2 • Thoma Bravo (NYSE:DT) 08/01/19

• 06/20/19 $23,250.0 $1,220.0 $14,545.9 • (NYSE:WORK)

IPO Watchlist

Source: Capital IQ, PitchBook, and Capstone Research as of September 19, 2020.

9 Application Development & Deployment | October 2020

COVID-19 IMPACTS ON TOP PUBLIC PLAYERS

“We adapted quickly to operate as a fully-remote company in the face of the COVID-19 pandemic, and empowered many customers to do the same through our mission-critical work management products. (Nasdaq:TEAM) We delivered value to teams at over 174,000 customers, 150,000 of Trading Data (09/21/2020): which are in the cloud. “

Stock Price $177.40 - Atlassian CEO’s Mike Canon-Brooked and Scott Farquhar7 52 Week High $199.50

EV/EBITDA NM Fourth Quarter Fiscal 2020 Results, Ending June 30: Total Q4 revenue was up 29% YOY to $430.5 million EV/Revenue 26.6x 3,046 net new customers added during the quarter Market Capitalization $43,988.6 mm Acquired internal help desk solution Halp for $17.5 million Ratio Analysis

Current Ratio 0.9 Highlights: Year-over-year revenue increased across all segments in Q4, led by Net Debt/EBITDA NM Subscription revenue (+42%) and followed by Maintenance (+16%), Volume (mm) Price Perpetual License (+11%), and Other (+19%), according to its earnings $250 10 release.8 Atlassian offered free editions of Jira Software, Confluence, and $200 8 Jira Service Desk in early March to expedite its mission to become a $150 6 cloud-first company. This drove an 150% YOY increase in sign-ups, with $100 4 95% of its 3,046 net new customers choosing one or more cloud $50 2 products. Atlassian’s focus on the Agile Development, ITSM (IT Service $0 0 Management), and Work Management markets was strengthened 01/02/20 03/02/20 05/02/20 07/02/20 09/02/20 through its acquisitions of Halp (May, $17.6 million) and Mindville (July,

Note: Dotted line indicates date after WHO declared $4.1 million). The company expects a greater impact from COVID-19 in COVID-19 a pandemic on March 11 FY 2021, due to its exposure to the small-and medium-sized business (SMB) economy and heavily-impacted sectors.

“The pandemic has obviously had both positive and negative effects on our business. We believe the positive changes will have greater (NYSE:WORK) impact and will persist as part of a permanent structural shift in the

Trading Data (09/21/2020): way we work, on the other hand the negative effects will dissipate as we emerge from the pandemic and related economic uncertainty. “ Stock Price $26.67

52 Week High $40.07 - Slack CEO & Co-Founder 9

EV/EBITDA NM Second Quarter Fiscal 2021 Results, Ending July 31: EV/Revenue 18.9x Total Q2 revenue was up 49% YOY to $215.9 million Market Capitalization $15,215.9 mm 8,000 net new customers added during the quarter Ratio Analysis ~$4 million in COVID-related concessions and headwind contractions

Current Ratio 3.3 Highlights: Net Debt/EBITDA 2.5 New paid customers began to accelerate in April and grew at a faster Volume (mm) Price pace starting in June, largely attributed to the new work from home era. $50 80 The company also officially launched Slack Connect in June, which $40 60 accounted for ~1,000 of its net new customers in Q2. The company $30 faced some COVID-related headwinds in its installed base, due to 40 $20 customers in impacted industries (~20% of clients) downsizing or stalling $10 20 hiring, which directly impacted per-seat pricing. Slack expects between $0 0 $222-$225 million in revenue during its fiscal third quarter, representing 01/02/20 03/02/20 05/02/20 07/02/20 09/02/20 a YOY increase of ~32%.

Source: Company press releases and Capstone Research 10 Application Development & Deployment | October 2020

PUBLIC COMPANY TRADING & OPERATING DATA: AUTOMATION & WORKFLOW

Price % 52 Wk Market Enterprise LTM EV / LTM Company 10/13/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA Adobe Inc. $510.89 95.2% $245,083.6 $244,545.6 $12,436.3 $4,678.9 37.6% 19.7x 52.3x

Micro Focus International plc $3.53 23.3% $1,181.4 $5,755.4 $3,145.5 $1,000.2 31.8% 1.8x 5.8x

Progress Software Corporation $40.27 76.7% $1,816.2 $1,907.0 $436.8 $160.6 36.8% 4.4x 11.9x

ServiceNow, Inc. $509.09 98.7% $97,644.0 $96,499.7 $3,954.8 $564.6 14.3% 24.4x NM

Synopsys, Inc. $228.93 98.8% $34,742.8 $34,371.7 $3,510.9 $856.0 24.4% 9.8x 40.2x

EV = enterprise value; LTM = last twelve months Mean 29.0% 12.0x 27.5x $ in millions, except per share data Median 31.8% 9.8x 26.0x NM = Not Meaningful Harmonic Mean 25.5% 5.2x 13.2x

PUBLIC COMPANY TRADING & OPERATING DATA: BUSINESS PROCESS

Price % 52 Wk Market Enterprise LTM EV / LTM Company 10/13/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA Anaplan, Inc. $62.79 95.0% $8,776.3 $8,524.5 $398.0 NM NA 21.4x NM

Appian Corporation $76.25 95.6% $5,326.1 $5,122.7 $280.4 NM NA 18.3x NM

Atlassian Corporation Plc $194.27 97.2% $48,171.8 $47,069.3 $1,614.2 $82.4 5.1% NM NM

Dynatrace, Inc. $43.47 89.0% $12,218.2 $12,526.9 $578.8 NM NA 21.6x NM

salesforce.com, inc. $267.07 93.9% $243,033.7 $239,938.7 $19,380.0 $3,120.0 16.1% 12.4x NM

SAP SE $158.71 93.8% $188,996.0 $200,265.7 $31,617.2 $8,835.2 27.9% 6.3x 22.7x

EV = enterprise value; LTM = last twelve months Mean 16.4% 16.0x 22.7x $ in millions, except per share data Median 16.1% 18.3x 22.7x NM = Not Meaningful Harmonic Mean 10.2% 12.9x 22.7x

11 Application Development & Deployment | October 2020

PUBLIC COMPANY TRADING & OPERATING DATA: DATA ANALYTICS

Price % 52 Wk Market Enterprise LTM EV / LTM Company 10/13/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA Alteryx, Inc. $147.36 79.3% $9,751.8 $9,770.3 $464.9 $38.5 8.3% 21.0x NM

Cisco Systems, Inc. $40.36 80.3% $170,861.0 $157,021.0 $49,301.0 $16,476.0 33.4% 3.2x 9.5x

EV = enterprise value; LTM = last twelve months Mean 20.9% 12.1x 9.5x $ in millions, except per share data Median 20.9% 12.1x 9.5x NM = Not Meaningful Harmonic Mean 13.3% 5.5x 9.5x

PUBLIC COMPANY TRADING & OPERATING DATA: IT SERVICES

Price % 52 Wk Market Enterprise LTM EV / LTM Company 10/13/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA Hewlett Packard Enterprise Co. $9.93 56.5% $12,773.8 $24,905.8 $26,989.0 $4,913.7 18.2% 0.9x 5.1x

International Business Machines $127.21 80.1% $113,290.5 $169,088.5 $75,499.0 $17,782.5 23.6% 2.2x 9.5x

Oracle Corporation $61.46 98.2% $185,049.2 $214,161.2 $39,217.0 $16,789.0 42.8% 5.5x 12.8x

Mean 28.2% 2.9x 9.1x

Median 23.6% 2.2x 9.5x

Harmonic Mean 24.8% 1.8x 7.9x

PUBLIC COMPANY TRADING & OPERATING DATA: NETWORK MANAGEMENT

Price % 52 Wk Market Enterprise LTM EV / LTM Company 10/13/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA Akamai Technologies, Inc. $114.09 95.1% $18,563.0 $18,856.6 $3,041.1 $1,148.2 37.8% 6.2x 16.4x

Datadog, Inc. $112.20 97.9% $34,034.2 $33,195.5 $480.8 $32.1 6.7% NM NM

FireEye, Inc. $13.74 74.9% $3,074.2 $3,181.7 $915.6 NM NA 3.5x NM

Qualys, Inc. $102.33 81.7% $4,016.1 $3,625.1 $342.4 $134.1 39.1% 10.6x 27.0x

Rapid7, Inc. $65.56 96.8% $3,344.0 $3,486.0 $368.1 NM NA 9.5x NM

Splunk Inc. $215.34 95.3% $34,539.2 $35,149.0 $2,343.3 NM NA 15.0x NM

Tenable Holdings, Inc. $41.47 98.4% $4,199.4 $4,011.3 $398.8 NM NA 10.1x NM

Mean 27.9% 9.1x 21.7x

Median 37.8% 9.8x 21.7x

Harmonic Mean 14.9% 7.4x 20.4x

12 Application Development & Deployment | October 2020

PUBLIC COMPANY TRADING & OPERATING DATA: OTHER

Price % 52 Wk Market Enterprise LTM EV / LTM Company 10/13/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA Altium Limited $27.58 89.5% $3,619.4 $3,536.7 $189.1 $73.4 38.8% 18.7x 48.2x

ANSYS, Inc. $347.86 98.0% $29,842.6 $29,644.1 $1,520.8 $521.1 34.3% 19.5x 56.9x

Autodesk, Inc. $242.12 92.4% $53,091.9 $53,655.6 $3,540.8 $736.8 20.8% 15.2x 72.8x

Alphabet Inc. $1,564.59 90.6% $1,065,698.6 $960,761.6 $166,030.0 $48,675.0 29.3% 5.8x 19.7x

IAR Systems Group AB $18.33 71.4% $249.9 $251.1 $42.9 $12.7 29.5% 5.8x 19.8x

Microsoft Corporation $221.40 95.1% $1,675,478.4 $1,621,096.4 $143,015.0 $65,259.0 45.6% 11.3x 24.8x

Slack Technologies, Inc. $31.79 79.3% $18,137.0 $17,467.0 $768.1 NM NA 22.7x NM

Zoom Video Communications, Inc. $491.54 92.8% $139,804.3 $138,395.1 $1,346.5 $251.3 18.7% NM NM

EV = enterprise value; LTM = last twelve months Mean 31.0% 14.2x 40.4x $ in millions, except per share data NM = Not Meaningful Median 29.5% 15.2x 36.5x Harmonic Mean 28.4% 10.8x 31.0x

Historic Multiples by Sector EV/Revenue Average EV/EBITDA Average

Automation & Workflow Business Process Data Analytics

60.0x 60.0x 20.0x

50.0x 44.1x 50.0x 38.8x 40.4x 15.0x 13.6x 40.0x 40.0x 12.6x 33.8x 32.1x 33.5x 11.0x 28.0x 29.9x 30.0x 30.0x 10.0x 8.8x

20.0x 20.0x 13.0x 5.0x 3.8x 3.9x 3.6x 8.8x 10.6x 11.0x 10.0x 10.0x 5.7x 6.2x 7.1x 7.7x 2.7x

0.0x 0.0x 0.0x 2017 2018 2019 YTD 2017 2018 2019 YTD 2017 2018 2019 YTD

IT Services Network Management Other

20.0x 30.0x

15.0x 20.4x 18.7x 20.0x 17.9x 17.7x 10.7x 10.2x 9.8x 9.7x 10.0x 9.6x 6.4x 7.0x 4.7x 10.0x 7.7x 5.0x 5.9x 6.5x 6.4x 2.6x 2.6x 2.6x 2.3x NM NM NM NM 0.0x 0.0x 0.0x 2017 2018 2019 YTD 2017 2018 2019 YTD 2017 2018 2019 YTD

NM = not meaningful, above 75x EV/EBITDA Source: Capital IQ as of September 22

13 Application Development & Deployment | October 2020

APPLICATION DEVEOPMENT & DEPLOYMENT REPORT CONTRIBUTORS

David DeSimone Managing Director [email protected] | 617-619-3384

David DeSimone rejoined the Boston office of Capstone Headwaters in 2015 as a Director in the Technology & Telecom Group. David brings more than 15 years of investment banking experience to Capstone and will help expand the firm’s technology sector coverage in the Northeast. David has worked on equity, debt and M&A transactions collectively valued at more than $4 billion. Previously, David was a member of the Capstone team for nearly seven years where he led efforts in the Technology Solutions vertical as a Vice President and Director. Prior to rejoining Capstone, David served as a Principal at Bowen Advisors, an M&A and strategic advisory firm focused on technology companies including communications and healthcare IT. David has also worked as a Vice President at Boenning & Scattergood, a Philadelphia-based middle market investment bank, where he worked with clients across a variety of industries and developed the firm’s technology practice. He spent his early career working at Needham & Company, Robertson Stephens and J.P. Morgan.

David Michaels Managing Director, Head of Technology, Media, & Telecom Practice [email protected] | 858-926-5950

David Michaels is a Managing Director of Capstone Headwaters where he is responsible for managing the firm’s Technology, Media & Telecom Group. David founded SagePoint Advisors in 2008, a boutique investment banking firm focused on providing M&A advisory services to technology and telecom companies. Prior to founding SagePoint, David was a Co-Founder, Partner and Managing Director at Montgomery & Co., a leading investment bank focused on serving emerging-growth technology companies. David co-founded Montgomery’s investment banking business in 1996 and played an instrumental role in building the business to over $50 million in revenues and 80 employees. He also ran the firm’s Communications and Digital Media Technology practice areas prior to his departure. David has intimate knowledge of the strategic landscape, market dynamics and technology underpinnings of several high technology market segments including Mobile Software & Services, Consumer Internet, E-Commerce, Enterprise SaaS, Cloud & Infrastructure Software and Consumer, IT & Telecom Hardware.

Sarah Doherty Vice President of Research [email protected] | 617-619-3310

Sarah joined Capstone Headwaters in 2016 and has more than eight years of research and writing experience. She oversees the firm’s corporate Research Team, which produces more than 150 reports annually on middle-market M&A activity. Sarah specializes in the Healthcare, Education & Training, and Aerospace, Defense, Government, & Security industries. Previously, Sarah was the Data Graphics Specialist at a think tank in Washington, D.C., where she collaborated with economists and industry experts to analyze and present data for congressional testimonies and research publications. She also covered the economy, healthcare, and Capitol Hill as a reporter.

14 Application Development & Deployment | October 2020

FIRM TRACK RECORD

CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL

corporate sale corporate sale corporate sale (in market) (pre-market) (pre-market)

SOFTWARE TESTING LOW-CODE, NO-CODE LOW-CODE, NO-CODE PLATFORM PLATFORM PLATFORM

has been acquired by has been acquired by has been acquired by

a portfolio company of

 Provides application  Source code analysis  Automated embedded service automation software that improves software testing tools for software for managing code quality and security safety-critical industries data center apps

has been acquired by has been acquired by has been acquired by has been acquired by

a portfolio company of a portfolio company of a portfolio company of

 Mobile app  Leading provider of  Leader in end-to-end  Provides application development independent IT testing PHP web and mobile service automation automation platform and quality assurance AppDev & Deployment software for managing for media and sports services solutions data center apps 15 Application Development & Deployment | October 2020

CITATIONS

1. TechCrunch, “Coronavirus Impact Sends App Downloads, Usage, and Consumer Spending to Record Highs in Q2,” https://techcrunch.com/2020/07/09/coronavirus-impact-sends-app-downloads-usage-and-consumer-spending-to- record-highs-in-q2/, accessed September 22, 2020. 2. Accenture, “Accenture Cloud First Launches with $3 Billion Investment to Accelerate Clients’ Move to Cloud and Digital Transformation,” https://newsroom.accenture.com/news/accenture-cloud-first-launches-with-3-billion-investment-to- accelerate-clients-move-to-cloud-and-digital-transformation.htm, accessed September 21, 2020. 3. Gartner, “Gartner Forecasts Worldwide Public Cloud Revenue to Grow 6.3% in 2020,” https://www.gartner.com/en/newsroom/press-releases/2020-07-23-gartner-forecasts-worldwide-public-cloud- revenue-to-grow-6point3-percent-in-2020, accessed September 21, 2020. 4. Cision, “Netrix Recapitalized by OceanSound Partners,” https://www.prnewswire.com/news-releases/netrix- recapitalized-by-oceansound-partners-301107196.html, accessed September 21, 2020. 5. Progress, “Progress Announces Acquisition of Chef,” https://investors.progress.com/news-releases/news-release- details/progress-announces-acquisition-chef, accessed September 20, 2020. 6. Keysight “Keysight Technologies Acquires Eggplant,” https://www.keysight.com/us/en/about/newsroom/news- releases/2020/keysight-technologies-acquires-eggplant-.html, accessed September 20, 2020. 7. Atlassian, “Shareholder Letter Q4 FY20, July 30, 2020,” https://s2.q4cdn.com/141359120/files/doc_financials/2020/q4/TEAM-Q4-2020-Shareholder-Letter.pdf, accessed September 16, 2020. 8. Atlassian, “Atlassian Announces Fourth Quarter and Fiscal Year 2020 Results,” https://s2.q4cdn.com/141359120/files/doc_financials/2020/q4/TEAM-Q4-2020-Earnings-Release.pdf, accessed September 17, 2020. 9. Slack, “FY21 Q2 Earnings Call, September 8, 2020,” https://s23.q4cdn.com/371616720/files/doc_financials/2021/q2/FY21-Q2-Earnings_-CEO-CFO-prepared-remarks.pdf, accessed September 17, 2020.

Disclosure: This report is a periodic compilation of certain economic and corporate information, as well as completed and announced merger and acquisi- tion activity. Information contained in this report should not be construed as a recommendation to sell or buy any security. Any reference to or omission of any reference to any company in this report should not be construed as a recommendation to buy, sell or take any other action with respect to any security of any such company. We are not soliciting any action with respect to any security or company based on this report. The report is published solely for the general information of clients and friends of Capstone Headwaters. It does not take into account the particular investment objectives, financial situation or needs of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for all investors. This report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Prediction of future events is inherently subject to both known and unknown risks and other factors that may cause actual results to vary materially. We are under no obligation to update the information contained in this report. Opinions expressed are our present opinions only and are subject to change without notice. Additional information is available upon request. The companies mentioned in this report may be clients of Capstone Headwaters. The decisions to include any company in this report is unrelated in all respects to any service that Capstone Headwaters may provide to such company. This report may not be copied or reproduced in any form, or redistributed without the prior written consent of Capstone Headwaters. The information contained herein should not be construed as legal advice. 16 INTEGRATED CRISIS MANAGEMENT SOLUTIONS

As a firm, we have mobilized our collective resources to deliver an integrated solution to business owners navigating through these times. We can help frame your decisions, access capital to protect your position, and provide specialty transaction expertise to capture opportunities as they arise.

Our full-service capabilities help companies through every aspect of the business, supported by dedicated industry experts, market intelligence, and private equity coverage.

Mergers & Acquisitions Financial Advisory Capital Access

We can assist opportunist We specialize in performance We help manage through new or acquisitions, execute sales, and improvement and value creation existing lenders or investors and navigate distressed transactions. in difficult situations. secure an optimal solution.

Strategic Acquisitions Board Advisory Debt Financing • Target Identification • Strategic Blueprinting • Bridge / Interim Financing • Valuation & Structure • Evaluate Capital Adequacy • ABL and Cash Flow Revolvers • Buy-Side Due Diligence • Performance Tracking • 1st and 2nd Lien Term Loans • Quality of Earnings • Management Accountability • Subordinated Debt • Buy-Side M&A Execution • Communication • Sale-Leasebacks

Sales & Divestitures Operational Effectiveness Equity Financing • Corporate Valuation • Cost Structure Management • Growth Equity • Market Assessment • Operational Assessment • Secondary Equity Recaps • Transaction Readiness • Management Assessment • Structured Equity • Sell-Side M&A Execution • Sales Augmentation • Acquisition Financing • Asset Divestiture • Organizational Optimization • Investor Management

Distressed Transactions Crises Management Alternatives • Business Unit Divestiture • Turnaround / Interim Mgmt. • Creditor Mediation • Distressed M&A • Corporate Restructuring • DIP and Exit Financing • §363 Sale • Bankruptcy Protection • Government Support Programs

WE ARE ENGINEERED TO MEET THE FULL LIFECYCLE DEMANDS OF PRIVATE COMPANIES BUILD GROW REALIZE SUPPORT

TO LEARN MORE ABOUT OUR SERVICES AND SPEAK TO A MEMBER OF OUR TEAM CONTACT US. 12 BUILT FOR THE MIDDLE MARKET

Capstone Headwaters is one of the largest and most active independent investment banking firms in the United States. The firm has a rich 18+ year history of achieving extraordinary results for middle market entrepreneurs, business owners, investors, and creditors. The firm offers a fully integrated suite of corporate finance services, including merger & acquisition, debt & equity placement, ESOP advisory, corporate restructuring, valuation & fairness opinion, and financial advisory services.

Headquartered in Boston, Capstone Headwaters has over 170 professionals across 16 offices in the U.S. with 16 dedicated industry groups. Capstone has been recognized consistently as one of the top investment banks to work for and “U.S. Middle Market Firm of the Year.”

UNITED STATES

170+ professionals 16 offices INTERNATIONAL Boston  Burlington  Chicago Dallas  Denver  Houston  Los Angeles 450+ professionals New York  Orange County  Philadelphia 60+ offices in 40 countries Richmond  San Diego  San Francisco St Louis  Tampa  Washington DC Asia: China  India  Japan Latin America: Argentina  Brazil  Chile  Colombia  Mexico  Peru Africa: Congo  Egypt  Ghana  Ivory Coast  Mauritius  Morocco  Senegal  South Africa Europe: Belgium  Bosnia  Croatia  Czech Republic  Finland  France  Germany  Herzegovina Hungary  Ireland  Italy   Netherlands  Norway  Poland  Russia  Serbia  Slovenia Spain  Sweden  Switzerland  Turkey  United Kingdom

www.capstoneheadwaters.com

12