TECHNOLOGY MONTHLY FEBRUARY 2021 Our technology & tech-enabled services practice advises leading private and publicly traded technology companies including many of the world’s most respected IT consulting, managed services, technical staffing and enterprise software providers. ITS Offshore ITS Managed Services IT Staffing Transaction Processing Info Services VAR HEADLINE TRANSACTIONS TARGET ACQUIROR ACQUISITION SYNOPSIS • McKinsey & Company, a US based management consulting firm, acquired Candid Partners, a US based provider of cloud consulting services • The acquisition scales McKinsey's technical cloud capabilities, which will enable it to generate better client outcomes with regards to cloud adoption • Pamlico Capital, a US based middle market private equity firm, made a growth investment in Protera Technologies, a US based provider of application management and migration services focused on the SAP platform • Pamlico's backing provides the capital needed to expand Protera's market reach and service offering • CoreBTS (backed by Tailwind Capital), a US based IT solutions and managed services provider, acquired Skyline Technologies, a US based provider of Microsoft cloud, data analytics and application development consulting services • The acquisition broadens Core BTS' ability to drive cloud transformation through customized data analytics and application IT Services development • IBM (NYSE: IBM), a global integrated solutions and services company, acquired 7Summits, a US based Salesforce digital solutions consulting firm backed by Sverica Capital • The acquisition is a part of IBM's continuing strategy to improve its capabilities around digital transformation through hybrid cloud and AI • Genpact (NYSE: G), a Bermuda based BPO and IT services provider, acquired Enquero, a provider of data engineering and data-led digital transformation services • The acquisition enhances Genpact’s digital transformation abilities specifically by increasing the depth of its data and analytics teams • Court Square Capital Partners, a US based middle market private equity firm, acquired a majority stake in Thrive, a US based provider of managed IT services backed by MC Partners • Court Square's backing accelerates Thrive's investments in ServiceNow, Automation and AI, and also enables it to expand its product offering and sales/marketing team • Logically (backed by The Riverside Company), a US based provider of managed IT services, acquired Network Support Co., a US based customer-centric managed IT services provider • The acquisition is in line with Logically's strategy to acquire culturally similar MSPs that will expand its offering and enable it to run faster and more efficiently Manafed ServicesManafed • Thrive, (now backed by Court Square Capital Partners), a US based outsourced managed IT services provider, acquired Apex IT, a US based managed IT services provider • The acquisition expands Thrive's Cloud & Cyber NextGen platform into Apex's client base, thereby establishing a presence in the Mid-Atlantic market • Navisite (backed by Madison Dearborn Partners), a US based provider of application services, enterprise hosting and managed cloud services, acquired Velocity, a US based provider of enterprise and business application hosting services backed by Sumeru Equity Partners • The acquisition solidifies Navisite’s position as a leader in managed cloud and ERP services through the addition of Velocity’s enterprise application and cloud expertise TECHNOLOGY GROWTH & VALUATION TRENDS Enterprise Value / LTM Revenue Enterprise Value / LTM EBITDA 5.0x 25.0x 4.0x 4.0x 20.0x 19.6x 16.5x 3.0x 2.9x 15.0x 12.6x 13.5x 2.1x 1.8x 9.5x 2.0x 10.0x 1.4x 7.8x 5.3x 1.0x 5.0x 0.3x 0.3x ITS Offshore Managed IT Transaction Info VAR ITS Offshore Managed IT Transaction Info VAR ITS Services Staffing Processing Services ITS Services Staffing Processing Services LTM Revenue Growth LTM Gross & EBITDA Margin* 60.0% 59.8% 2 7.0% 24.0% 21.0% 50.0% 48.4% 16.2% 18.0% 43.5% 15.0% 40.1% 40.0% 12.0% 33.7% 9.0% 8.0% 29.1% 6.0% 4.0% 30.0% 25.8% 2.1% 2.3% 3.0% 22.8% 23.3% 0.0% 20.0% (3.0%) (3.2%) 12.6% (6.0%) 17.0% (6.6%) 2.3% (9.0%) 10.0% 11.4% 3.8% (12.0%) ITS Offshore Managed IT Transaction Info VAR ITS Offshore Managed IT Transaction Info VAR ITS Services Staffing Processing Services ITS Services Staffing Processing Services *EBITDA Margins shown as the gray line. TEV / EBITDA 25.0x25.0x 20.0x20.0x 19.6x 16.5x 15.0x15.0x 13.5x 12.6x 10.0x10.0x TEV EBITDA / 9.5x 7.8x 5.0x5.0x 5.3x 0.0x0.0x Q3Q3’17 2017 Q4Q4’17 2017 Q1Q1’18 2018 Q2Q2’18 2018 Q3’18Q3 2018 Q4’18Q4 2018Q1’19Q1 2019Q2’19Q2 2019Q3’19Q3 2019Q4’19 Q4 2019Q1’2020Q1 2020Q2’2020Q2 2020Q3’2020Q3 2020 Q4’2020Q4 2020 JanJan’21 2021 Transaction Processing Info Services Offshore ITS IT Staffing ITS Managed Services VAR 12.6x ITS 13.5x Offshore ITS 5.3x Managed Services 7.8x IT Staffing 19.6x Transaction Processing 16.5x Info Services 9.5x VAR SELECTED TECHNOLOGY TRANSACTIONS Annc. Date Sector Acquiror Target Enterprise Value Acquisition Synopsis • eMids Technologies (backed by New Mountain Capital), a US based provider of healthcare technology expertise and consulting eMids Macadamian services, acquired Macadamian, a Canada based healthcare-focused software design and development consulting firm 1/28/2021 IT Services NA Technologies Technologies • Macadamian's design-first approach complements eMids' existing capabilities well and will improve its offerings to payer, provider and life sciences partners EBITDA Multiples Over Time Evergreen • Sunstone Partners, a US based middle market private equity firm, acquired Evergreen Systems, Cerna Solutions and Novo/Scale, Sunstone Systems, Cerna three ServiceNow partners 1/26/2021 IT Services 21.0x NA Partners 19.0xSolutions, Novo/ • Under Sunstone, the combined company, which will be branded Thirdera, will be the will be the largest independent consulting 17.7x 17.0xScale partner focused exclusively on enabling ServiceNow across its client base 15.0x 17.6x 13.0x 11.5x 11.0x • HSO (backed by The Carlyle Group), a Netherlands based Microsoft cloud business applications partner, acquired SAGlobal and 11.4x SAGlobal, 360 1/21/2021 IT Services HSO EBITDA / TEV 9.0x NA their 360 Solutions Group, a provider of Microsoft Dynamics 365 and Power Platform solutions Solutions Group 8.2x 7.0x • The acquisition expands HSO's North American presence and strengthens its go-to-market strategy 7.9x 5.0x 5.4x 3.0x Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 BV • BV Investment Partners, a US based middle market IT-focused private equity firm, invested in PixelMEDIA, a US based provider of 1/19/2021 IT Services Investment PixelMEDIA TransactionNA Processingdigital commerce servicesInfo Services focused on the SalesforceOffshore platform ITS IT Staffing ITS Managed Services VAR Partners • BV's backing will enable PixelMEDIA to accelerate its growth strategy and execute on its long-term goals • Apps AssociatesSelect (backed Technology by BV Investment Transactions Partners), a US based Announced provider of IT services in March to Fortune 2019 1000 clients, acquired Ethos Apps Solutions, a US based provider of IT services specializing in Salesforce implementations, customizations and integrations 1/19/2021 IT Services TargetEthos Solutions SectorNA Acquiror Target Enterprise Value Comments Associates • The acquisition bolsters Apps Associates' Salesforce offering, which helps it address rapidly growing customer demand in this 3/29/2019 Managed Calligoarea Limited Connected NA • "Calligo Limited (backed by Investcorp Bank), a UK based provider of cloud solutions for Services Technologies businesses, has acquired Connected Technologies Inc, a Canadian provider of managed IT Inc. solutions, cloud hosting, network services, and technical support • The combined client base also gives Calligo the largest concentration of CPA customers in the Data Center and • Digital Fortress, a US based enterprise level colocation provider,region acquired and the the Data longest Center track and record Colocation in serving Business the industry’sof Atmosera, IT, acloud and data residency needs" 1/19/2021 IT Services Digital Fortress Colocation Business NA hybrid managed services provider 3/28/2019of Atmosera Managed Nixu• The Oyj acquisition addsEzenta three A/S data centersNA to Digital Fortress, and• "Nixu it allows Oyj Atmosera (HLSE:NIXU), to focus a Finlandon its core based Azure provider services of segment IT security services, has acquired Ezenta Services A/S, a Danish provider of information technology consulting services • The Ezenta acquisition strengthens Nixu’s Danish cybersecurity market presence and enables Nixu to offer cybersecurity services to Danish customers and use Ezenta’s technologies to build • itelligence (owned by NTT Data), a Germany based provider of SAPand supportsupport solutions,IT security acquired infrastructure" My Supply Chain Group, a provider My Supply Chain 1/15/2021 IT Services itelligence NA of IT consulting services for supply chain management companies 3/15/2019Group IT Services Audius AG IT Competence NA • "Audius AG, a Germany based provider of customer relationship management software • The acquisition expandsGroup itelligence's supply chain planning andsolutions execution for capabilities, service, maintenance, especially in the and US facility market management industries, has acquired a majority stake in IT Competence Group SE (DB:3IT), backed by Navigator Equity Solutions (BST:NUQA), a German provider