IT and Tech-Enabled Services Investment Banking + M&A Advisory

IT and Tech-Enabled Services Cloud, Managed Services, Systems Integrators, IT Consulting, IT Outsourcing

Q2 2017 M&A Update July 17, 2017

Table of Contents

M&A Market Brief .............................................................................................................................................................................................. 3

Global M&A YTD 2017 .................................................................................................................................................................................... 4

Exhibit 1 - Global M&A Deal Value & Volume — Quarterly Comparison ................................................................. 4

US IT M&A YTD 2017 ....................................................................................................................................................................................... 5

Exhibit 2 - US M&A Deal Value & Volume — Quarterly Comparison (IT/Tech-Enabled Services)..... 5

IT Services, Cloud and Managed Services M&A Drivers for 2017-2021 ................................................................... 6

Notable Tech-Enabled Services M&A Transactions, Q2 2017 ........................................................................................ 8

Publicly Traded Tech-Enabled Services Firms Valuation Table (as of 06/30/17) ......................................... 9

M&A Spotlight .................................................................................................................................................................................................... 11

DISCLAIMER

The information contained herein is of a general nature and is not intended to address the circumstances of any particular company,

individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such

information is accurate as of the date it is received or that it will continue to be accurate in the future. We perform our own research

and also use third party research. No one should act on such information without appropriate professional advice after a thorough

examination of the particular situation. This is not an offer or recommendation to buy or sell securities nor is it a recommendation

to merge, acquire, sell or exit a specific company or entity. We do not hold any equity or debt position in any of the securities listed

herein as of the date of this report.

Sources for our research and data include: PitchBook, MergerMarket, Wall Street Journal, Company Websites, SEC Filings, Bloomberg, TechCrunch

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M&A Market Brief Worldwide

Global M&A activity in Q2 2017 was USD $793.9 billion - deal value increased by 6.36% compared to Q1 2017. The first six months of 2017 proved the middle market’s most productive first half in 10 years, inking 5,620 deals, according to Thompson Reuters. Global M&A activity has been motivated by limited organic growth options and the need to address the business model transformation that is occurring across industries. Example, Amazon's acquisition of Whole Foods Market. Technological disruption is an important deal motivator. Companies involved in M&A are most interested in acquiring relevant technologies and responding to transformation in their industry as well as a desire to expand on their products. Established businesses are modernizing through technology focused deals, making traditional industry boundaries blurry and unconventional. High liquidity, access to cheap financing, healthy balance sheets and a need to demonstrate growth to shareholders via M&A all provide a positive outlook for the remainder of 2017.

US Market

Sluggish international growth and global uncertainty has made the United States a favored destination for M&A activity. Western Europe is the next preferred destination for M&A deals. Large amount of available capital, increased corporate acquisition activity and buying power, improved financing markets and expected policy reforms from the new administration position 2017 to be a strong year for M&A activity. The total value of U.S. deals fell sharply due to uncertainty about President Donald Trump's tax reform and deregulation agenda. U.S. M&A dropped 36 percent to $281 billion in Q2 2017.

IT and Tech-Enabled Services Sector

Deal volume decreased by 34.09% from 2017 Q1 to 2017 Q2 and 39.58% from 2016 Q2 compared to 2017 Q2. Total U.S. deal value announced in Q2 was above $16.5 billion. The top 3 deals in the U.S. accounted for a total of $14 billion. Median deal multiples for Q2 2017 were 1.61x EV/Revenue and 10.5x EV/EBITDA. We expect consolidation in the IT Services sector to continue at a flat and even pace. The market is mature yet still fueled by the growing need of cloud and security offerings primarily.

Source: Solganick & Co. Analysis, Pitchbook, Thompson Reuters, KPMG M&A Survey, & PwC’s Mid year review and outlook

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Global M&A YTD 2017 Exhibit 1 - Global M&A Deal Value & Volume — Quarterly Comparison

Sources: MergerMarket and Wall Street Journal IB scorecard ( http://graphics.wsj.com/investment-banking-scorecard/)

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US IT M&A YTD 2017 Exhibit 2 - US M&A Deal Value & Volume — Quarterly Comparison (IT/Tech-Enabled Services)

The IT Services industry has experienced increased activity mainly due to an increase in cloud servicing, cybersecurity and healthcare IT success in recent years. Deal count, however, has decreased in 2016 and is expected to decrease again in 2017. This is even though post valuation transaction value sum has increased. In the second quarter of 2017, IT Services transaction exceeded $16.5 billion compared to about $4.4 billion in 2017 Q1 despite experiencing 26 less deals. This is due to fewer but larger deals, as the top 3 deals of the quarter, according to Pitchbook, accounted for $14 billion of the total deal sum. Conclusively, these trends suggest that the industry may be maturing and that deal count may continue to decrease. However, the growing presence of IT in the tech space may sustain continued growth in invested capital going forward. Moreover, growing transaction sums may reflect high success of previous IPO’s and young companies, suggesting a potential for current small to midsized IT Service providers and thus further growth in the industry. Sources Solganick & Co. Analysis, Pitchbook

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IT Services, Cloud and Managed Services M&A Drivers for 2017-2021

Key Highlights

2016 was a great year for IT and Tech-Enabled Services M&A, it saw a rising demand for cloud related services and cyber security transactions announced. This trend has continued in 2017 as transactions are continued to be announced. Disruption to legacy players Most of the recent growth in M&A within this segment has been driven by disrution to legacy players from third-platform service providers, incorporating cloud-based computing, big data analytics, social media and mobile-based services.

Cloud services Many traditional technology services players are using niche acquisitions in cloud services to counter slower revenue generation from traditional on-premise ERP implementations.

Cyber security The continuing shift toward cloud-based computing, and various high-profile cyber-attacks in the year, continue to fuel demand for cyber security solutions. This growth in the market is attracting significant private equity interest.

Convergence with adjacent industries Marketing networks and Management Consulting firms are developing their digital transformation capabilities by acquiring IT consultants with cutting-edge niche capabilities. Large accounting firms are also demanding professional services related to the latest disruptive technologies.

Cloud Services According to Accenture strategy research, cloud accelerates the IT delivery in M&A by 30% on average and reduces the IT costs by nearly the same amount.

At the same time, cloud allows IT to make a transformative leap forward in how it will enable the business post M&A. Signing up with cloud Infrastructure-as-a-service providers not only reduces the lead time to stand up core IT services, it also shifts financial delivery from huge upfront capital expense to ongoing operating expense. Furthermore, working with multiple service providers may allow for greater parallelization of projects and higher throughput. Organizations leverage as-a-service delivery models

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enabled by cloud to perform business functions instead of going through a complex and arduous integration. So, the new rule of the day is transformation during integration. Yet very few companies are actively leveraging cloud strategically when it comes to the M&A process.

Cyber Security

The recent data breaches at several prominent retailers bring to light the importance of companies’ cyber security systems. The need for companies to protect themselves has also served as a catalyst for M&A deals in many sectors. Considering the growing prevalence of Ransomware threats along with other security risks we expect cyber security M&A activity to continue to rise in the next 12 months. Cyber security threats are also growing in many forms that were previously unknown. Information security M&A is on the rise because companies need to acquire innovative and sophisticated technologies to protect against various types of security threats. This requirement increases the demand for targets that offer cutting edge cyber security technology. Technology firms are currently beefing up their product offerings through M&A to respond to their clients varied and extensive needs. Acquiring targets with existing technology is a cost-effective way to address the significant financial and time commitments needed to develop sophisticated solutions for security system breaches. Convergence with adjacent industries With companies looking to diversify their revenue drivers and improve their service offerings, IT services have become an integral part in industry convergence. Particularly, consulting and marketing agencies are acquiring IT services to further develop their capabilities. This is also seen in the human resources space as HRIT has become increasingly more prominent in the industry. Furthermore, serial strategic and financial buyers continue to remain active in the IT services sector. In 2016, 35% of deals were by serial buyers. This trend continues in 2017, as seen with numerous acquisitions by companies such as Accenture and Capgemini.

Sources: Solganick & Co. Analysis, Accenture, Donnelley Financial Solutions, and Equiteq

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Notable Tech-Enabled Services M&A Transactions, Q2 2017

Source: Solganick & Co. Analysis, Pitchbook

6/16/2017Uniserve Communications

Glenbriar Technoloies

Provider of business technology services intended to keep enterprises competitive in an ever-changing technological environment

0.8 0.41x 9.55x

6/16/2017 Red RiverNatoma Technologies

Provider of systems development, integration, cloud application migration and transition, business intelligence, and data analytics solutions. 

6/14/2017 Thoma Bravo ContinuumChannel-exclusive provider of managed IT services

6/13/2017 ContegixBlackMesh Combination

Provider of application management serving the DevOps community as well as a suite of cloud and managed services to enterprise customers

6/13/2017 Peak 10 ViaWestProvider of information technology (IT) and infrastructure solutions for businesses in North America

1,680

6/9/2017 Digital Reality DuPont Fabros Technology

Acquires, develops and operates wholesale data centers

7,600 1.43x 21.65x

6/6/2017 Synnex Westcon-Comstor

Provider of security, collaboration, networking, and data center products to customers in the United States and internationally

600 0.36x 8.99x

5/16/2017GP Investments Acquisitions

Rimini StreetProvider enterprise software support services

775

5/15/2017 Accenture Media Hive

Provider of platform development, systems architecture, and retail experiences creation for the e-commerce industry

5/9/2017 The Hacket Group Jibe Consulting Provider of management and technology consulting services

5/9/2017Apollo Management Group

West Corporation Provider of call center service and solutions

5,100 2.22x 8.44x

4/28/2017 CGI Group ECS Team Provider of strategic consulting, cloud, data analytics and digital transformation services.

4/19/2017 CGI GroupComputer Technology Solutions

Operator of a software consulting firm created to solve complex IT problems with creative and customized approaches

4/12/2017 Accenture SinnerShraderProvider of project management and consulting services

101.2 2.78x 22.97x

4/12/2017 Accenture BeesPath

Provides web-based management platform service that tracks and shares all loan transaction information into one secure place

4/4/2017 WISeKey QuoVadisProvider of online identity-certification services for security technologies

24 1.41x 4.03x

4/3/2017 CA Technologies VeracodeProvider of cloud-based application security services designed for the entire software development lifecycle

614

4/3/2017 Accenture iDefense Security Intelligence Services

Provider of cyber threat intelligence services intented to investigate threats and take actions

4/1/2017 DXC Technology Computer Sciences

Provider of next-generation information technology services intended to offer outsourcing and information technology transformation services

7,607 1.01x 12.55x

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Publicly Traded Tech-Enabled Services Firms Valuation Table (as of 06/30/17)

IT Consulting Ticker Stock Price Market Cap (mm) EV/ Revenue EV/ EBITDA

CRA International CRAI $36.34 $315.21 0.8x 9.8x

FTI Consulting FCN $34.95 $1,320.00 0.9x 9.3x

Huron Consulting Group HURN $43.20 $919.65 1.7x 11.5x

Information Services Group III $4.12 $175.21 0.9x 26.3x

Navigant Consulting NCI $19.75 $939.78 1.2x 9.4x

Resources Connections RECN $13.70 $415.15 0.7x 9.3x

The Advisory Board Company ABCO $51.50 $2,080.00 3.0x 17.5x

The Hackett Group HCKT $15.51 $453.79 2.2x 16.1x

Average 1.43x 13.65x

System Integrators Ticker Stock Price Market Cap (mm)

EV/ Revenue EV/ EBITDA

Accenture ACN $123.71 $76,590.00 2.1x 13.8x

Capgemini CAP.PA $90.45 $14,820.00 1.5x 12.7x

CGI Group GIB $51.07 $14,160.00 2.0x 10.9x

Edgewater Technology EDGW $6.80 $92.87 0.7x 23.6x

The Hackett Group HCKT $15.51 $453.79 2.2x 16.1x

Perficient PRFT $18.63 $664.89 1.3x 13.4x

Average 1.63x 15.08x

Value Added Resellers (VAR) Ticker Stock Price Market Cap (mm) EV/ Revenue EV/

EBITDA

CDW Corporation CDW $62.51 $9,860.00 0.9x 11.6x

ePlus PLUS $74.10 $1,040.00 1.4x 18.3x

Insight Enterprises NSIT $39.97 $1,430.00 0.3x 8.5x

Average 0.87x 12.8x

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Outsourcing Ticker Stock Price Market Cap (mm) EV/ Revenue EV/ EBITDA

Accenture ACN $123.71 $76,590.00 2.1x 13.8x

Atos ATO.PA $122.75 $14,580.00 0.9x 8.2x

Hewlett-Packard HPQ $17.47 $29,740.00 0.7x 9.0x

IBM IBM $153.89 $146,170.00 2.5x 11.2x

Unisys UIS $12.78 $652.77 0.3x 3.4x

Average 1.30x 9.12x

Offshore Ticker Stock Price Market Cap (mm) EV/ Revenue EV/ EBITDA

Cognizant Technology Solutions CTSH $66.41 $39,290.00 2.4x 11.7x

Infosys INFY $15.02 $33,570.00 2.8x 10.4x

Syntel SYNT $16.96 $1,420.00 1.9x 6.6x

Virtusa VRTU $29.39 $890.93 1.1x 21.9x

Wipro WIT $5.21 $19,940.00 2.0x 8.1x

Average 2.04x 11.74x

Sources: Solganick & Co. Analysis, Yahoo Finance

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M&A Spotlight

Apollo Global Management has agreed to buy West Corporation for $5.1 billion May 9, 2017 - Private Equity giant, Apollo Global Management, has agreed to purchase the telecom service provider West Corp for an enterprise value of $5.1B which includes West Corps net debt of over $3 billion. The deal values the company at $23.50 per share, 2.5% below its trading price as of May 9th. Apollo hopes this deal will allow the company to capitalize on consumer migration to cloud-based solution. West Corporation is a global provider of communication and network infrastructure services. The company helps its clients more effectively communicate, collaborate and connect with their audiences through its unified communications services, safety services, interactive services such as automated notifications, telecom services and specialized agent services. West has sales and operations in the United States, Canada, Europe, the Middle East, Asia Pacific and Latin America. West’s board of directors have unanimously approved of the agreement. Apollo also believes West is well positioned to capitalize on consumer shift to cloud-based solutions and continuous to grow in areas such as Safety and Interactive Services. The deal is expected to close by the end of the quarter. Sources: https://globenewswire.com/news-release/2017/05/09/981497/0/en/West-Corporation-Enters-Into-Definitive-Agreement-to-be-Acquired-by-Certain-Funds-Affiliated-With-Apollo-Global-Management-for-23-50-per-share-in-Cash.html http://www.crn.com/news/channel-programs/300084966/private-equity-strikes-again-apollo-global-management-to-buy-west-corp-for-enterprise-value-of-5-1b.htm

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Digital Realty to Buy DuPont Fabros Technology for $7.6 billion June 9, 2017 - The real estate investment trust Digital Reality has agreed to join forces with DuPont Fabros Technology in what will be the company’s biggest-ever deal. The deal would allow Digital Reality to capitalize on companies’ fast migration to cloud-based IT service technology. According to Digital Reality Chief Executive Willian Stein, the company would become “home to the cloud’. Both companies are focused on providing data center and colocation solutions clients across a range of industry verticals. Given the similarity of both parties, this deal serves primarily as an avenue for Digital Realty to gain market share and acquire DuPont Fabros’ customer base in a fast-growing cloud services market. The Washington based DuPont Fabros operates 12 data centers in three major U.S. markets while Digital Realty operates 145 data centers globally. The deal would add companies such as Facebook Inc. (FB.O) and Yahoo Inc (YHOO.O) to Digital Realty’s customer base. The complementarity of both companies is also expected to provide a most comprehensive offering in the data center sector as well as an efficient cost structure leading to $18 million in annual cost synergies. According to DuPont Fabros’ CEO, this acquisition will allow the company to diversify its customer base and expand its geographic presence. The offer is a 14.9 percent premium over DuPont Fabros’ close on Thursday, June 8. The deal is expected to close in the second half of 2017. Source: https://www.reuters.com/article/us-dupont-tech-m-a-digital-realty-idUSKBN1901EI

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Peak 10 buys Shaw’s VieWest server unit for $1.7 billion June 13, 2017 – Shaw Communications Inc. sold its ViaWest data service business to Peak 10 Holding Corp., thereby creating the largest privately held data center provider with access to over 20 domestic and international markets. This deal will give Peak 10 a greater scale and allow it to more effectively challenge traditional colocation providers as well as traditional telecommunication companies like CenturyLink and Verizon. ViaWest offers a suite of IT services ranging from cloud storage solutions and colocation to IT consulting. From Shaw Communication’s perspective, the deal will free up cash that the company can use to continue investing into its wireless business. For Peak 10, being an Infrastructure-as-a-Service provider, the deal will boost its competitive position in the cloud service market. The acquisition enhances the new company's channel strategy and lets partners offer more services and solutions to more locations. Peak 10 wanted to be viewed as a national provider, not just a regional player, and was investing in the channel as way to grow its business. ."The combined company will have more capabilities, services and skills, and thus more choices for partners and their customers. Our expanded geographic reach provides a more complete and consistent solution for our partners, so it's truly a win-win-win scenario," said Peak 10’s Chief Revenue Officer, Jeff Spalding. Truly, the combined company represents one of the largest hybrid IT solution providers in the industry. Source: http://www.crn.com/news/cloud/300087216/partners-peak-10s-move-to-acquire-viawest-will-create-formidable-cloud-competitor-with-a-channel-focus.htm

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Accenture Acquires Media Hive to Expand Its Commerce Capabilities May 15, 2017 – Accenture (NYSE: ACN) has acquired Media Hive, an e-commerce solutions provider with expertise in cross-channel commerce strategy, custom application development, and the creation of innovative retail experiences for any device. The acquisition will strengthen the capabilities of Accenture Interactive around Salesforce Commerce Cloud (previously Demandware) implementations and the delivery of best-in-class commerce experiences for clients. Founded in 2003 by Thomas McGee, co-founder and Greg O’Keeffe, co-founder and chief executive officer, Media Hive is based in Asbury Park, N.J. with a second office in Brooklyn, New York. With a strong competency in information architecture and content strategy, the Media Hive team has delivered transformational commerce work for some of the leading luxury retail brands including, Shiseido Group, Theory, Hanna Anderrson, Lucky Brand, Citizen Watch Company of America, and more. “With the acquisition of Media Hive, we are significantly strengthening our commerce capabilities, particularly in Salesforce Commerce Cloud,” said Glen Hartman, head of Accenture Interactive, North America. Accenture Interactive offers end-to-end commerce services, ranging from digital commerce strategy and design to platform delivery and managed services. It was named a leader in both “The Forrester Wave™: B2B Global Commerce Service Providers, Q1 2015” and “The Forrester Wave™: B2C Global Commerce Service Providers, Q1 2015.”. Source: https://newsroom.accenture.com/news/accenture-acquires-media-hive-to-expand-its-commerce-capabilities.htm

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About Solganick & Co.

Solganick & Co., Inc. is an independent investment banking and M&A advisory firm focused exclusively on the global Software, IT Services and Digital Media industry sectors. We advise buyers and sellers of companies and efficiently execute M&A transactions that help increase shareholder value. Our professionals have advised on $20+ billion in M&A transactions to date and have current clients and relationships globally with entrepreneurs, companies and leading private equity firms within the sectors we cover. Please contact us for information regarding this report or to inquire about an M&A transaction.

Solganick & Co., Inc. Los Angeles: 515 S. Flower St. Ste 500, Los Angeles, CA 90071 San Francisco: 71 Stevenson St Ste 400, San Francisco, CA 94105 Phone: +1 (310) 684-3130 www.solganickco.com Aaron Solganick, CEO Alexander Khoras, Director of Business Development aaron@solganickco.com akhoras@solganickco.com Rachael Fang, Vice President Michael Okayo, Senior Associate rfang@solganickco.com mokayo@solganickco.com Erica Xue, Associate Lucas Pino, Analyst exue@solganickco.com lpino@solganickco.com Victor Liu, Analyst vliu@solganickco.com Follow Us on Twitter: @Solganickco