ENVIRONMENTAL, HEALTH & SAFETY - SOFTWARE CONTACTS David Bench Managing Director (949) 460-6431 dbench@capstonellc.com Teak Murphy Director (310) 746-5006 tmurphy@capstonellc.com Christopher Cardinale Associate (949) 460-6433 ccardinale@capstonellc.com BOSTON CHICAGO LONDON LOS ANGELES NEW YORK ORANGE COUNTY PHILADELPHIA SAN DIEGO SILICON VALLEY TAMPA Q1 2016 MERGERS & ACQUISITIONS Whether the concern is employee training and safety, emissions governance, or contamination prevention, the public demand for a successful and reliable EH&S policy is on the rise. One strong growth area of the EH&S industry is software and management technology. In a 2013 study published by EHS Today, only 5% of organizations rate their EH&S programs as “world class.” There is strong demand for the betterment of corporate EH&S programs, and organizations are increasingly implementing software as an integral part towards that improvement. As such, according to the analyst firm Verdantix, corporate spending on EH&S software is anticipated to grow 15% per year to $1 billion by 2018, spearheaded by oil & gas companies, which will account for 43% of that total spend. Due to this growth in EH&S technology, large software providers, such as SAP, are either developing EH&S platforms or acquiring boutique designers already active in the space. Also, EH&S consulting firms, such as Trinity Consultants, are increasingly providing software and automation as a service element. However, the market is highly fragmented, with smaller players, such as Enviance, retaining strong brand preference. Constant innovation allows this fragmentation to continue in an environment that was once consolidated by the major software players of the 1990s, according to Verdantix. These innovations fueled M&A in 2015 and will continue for 2016 as the market moves back towards a consolidated state. Market indicators predict another strong year for EH&S software M&A in 2016. Not only are corporations purchasing software companies, but the industry continues to garner interest from the private equity community. According to The Wall Street Journal, private equity deals accounted for nearly half of software M&A transaction value through the first half of 2015, with the median EBITDA multiple increasing from 13.7x to 20.7x for the same time period in 2014. EH&S has gained attention from the private equity community as well, as seen by Battery Ventures’ February 2015 investment in Enviance, and HarbourVest Partners’ August 2015 investment in Intelex Technologies, among others. In both corporate and financial acquisitions, EH&S software transaction values since January 1st, 2011 have a median EBITDA and revenue multiple of 12.3x and 2.2x, respectively. As a subset of the software industry, SaaS experienced nearly a doubling of M&A deals from 333 in 2012 to 621 in 2014. The total transaction value in Q3 2015 increased by 24% over Q2 2015. Moreover, vertically-focused SaaS providers, such as EH&S, trade at a premium of 35%. As mentioned, the market demand towards subscription carries on, and valuation multiples reflect that trend. Sources: Capstone Partners LLC Research, The Wall Street Journal, Environmental Compliance Alert, NAEM, Verdantix EH&S - Software Q1 2016 KEY INDUSTRY TRENDS The software industry as a whole is built upon innovation. EH&S is no different, often requiring quicker and more dynamic change due to geopolitical and regulatory conditions. Some key trends identified for 2016 and beyond are: SOFTWARE-AS-A-SERVICE: The movement towards subscription continues, as smaller companies become more concerned with EH&S, and therefore require lower cost of entry and fixed expenditures. Also, the need for remote access and cloud applications continues to increase. Customers are seeking large-scale integration to maximize value. OPERATIONAL RISK MANAGEMENT: In the early 2000s, environmental compliance and information systems were prominent within the EH&S services industry. Although compliance is still a top concern, a movement towards operational risk management has taken place. Concerns with incident management and plant shut downs, as seen with the BP oil spill, are a strong driver towards continued EH&S investment. BUYING DECISIONS Heading into 2016 and beyond, buyers within the organizations that control EH&S purchasing decisions are considering these key factors, among others: CONSOLIDATED DATA: Establishing a single source for global EH&S data analysis ENHANCED REPORTING CAPABILITIES: Avoiding non-compliance remains as a key consideration SIMPLE UPDATES: Buyers seek a system that is easy to update and maintain USER-FRIENDLY INTERFACE: A leading decision characteristic, it must be easy to enter data When comparing first-time buyers with returning buyers, some key differentiators are identified. From a 2015 study conducted by NAEM, the main goal of returning buyers when considering new software is the centralization of data collection efforts at 21%, with only a 6% rate for first-time buyers. Also, 17% of returning buyers indicated collecting data for internal and external reporting as a top business objective, vs. 6% for first-time buyers. These differences demonstrate that data consolidation and reporting becomes higher priority when considering a switch between software providers as opposed to the first expenditure. The market indicates broadly that current EH&S software vendors need to enhance data capabilities in order to retain customers post-implementation. Sources: Verdantix, Capital IQ, Capstone Partners LLC Research, NAEM, EHS Today Capstone Partners LLC 2 EH&S - Software Q1 2016 SELECTED M&A DEAL BRIEFS Several dynamic transactions occurred during 2015 in EH&S software and related solutions. Selected transaction profiles are outline below, followed by a more comprehensive list in the subsequent tables. ENVIANCE ACQUIRES REMEDY INTERACTIVE – Enviance, Inc., a private company based near San Diego, CA, provides cloud-based environmental enterprise planning software solutions to measure, manage, report and mitigate environmental performance. Enviance acquired Remedy Interactive, Inc., a developer of software solutions that mitigate workplace injuries, including risk identification, automated prevention solutions, and safety program management. “Bringing Remedy Interactive into the fold enables Enviance to offer new and existing clients a broader suite of offerings to meet their rapidly evolving health and safety needs,” said David Muse, CEO of Enviance. “By making strategic technology acquisitions such as Remedy Interactive, we will complement our commitment to environmental compliance and operational risk management and rapidly achieve greater market leadership by leveraging new technologies.” BOEING AQUIRES PETERS SOFTWARE – The Boeing Company acquired Peters Software, a German company that develops training and safety software for commercial and private pilots, specializing in materials for pilots operating in the European Aviation Safety Agency. Its solutions support the safety of pilots, airlines, passengers, and employees. Boeing trains approximately 1,200 flight, maintenance and cabin safety personnel daily throughout its global network. Stan Deal, SVP at Boeing Commercial Airplanes, said: “The high-quality software that Peters Software develops enhances Boeing's customized pilot training content to meet specific needs of our customers.” INFLEXION ACQUIRES ALCUMUS HOLDINGS – Inflexion Private Equity Partners, a private equity firm based in London, acquired Alcumus Holdings Ltd. For $141 million. Alcumus, also based in the United Kingdom, provides compliance, risk management, and occupational health & safety consulting to European companies, in addition to compliance management software and social responsibility management. Simon Turner, Managing Partner at Inflexion, commented: “We have been tracking Alcumus for a number of years and are delighted to be able to join forces with such an accomplished team. The UK compliance and certification market is growing strongly and with Alcumus’ proven track record of diversifying its suite of services to offer the most value to its clients, it is well-placed to grow market share under our ownership.” Sources: Capstone Partners LLC Research, The Boeing Company, Inflexion Private Equity Partners, Enviance, Inc. Capstone Partners LLC 3 EH&S - Software Q1 2016 ENVIRONMENTAL, HEALTH AND SAFETY - SOFTWARE: SELECT M&A TRANSACTIONS Date EV / LTM Enterprise Value Revenue EBITDA (mm) Target Acquiror Target Business Description 12/15/2015 Software Ingenieros S.L. Alhambra Systems S.A. Develops information management software and solutions for the defense, police, and public safety sectors. - - - 12/10/2015 CSI Software, Inc. DAXKO LLC Provides software and services for health and fitness clubs and wellness centers. - - - 12/03/2015 HEALTH-e Workforce Solutions Pty Ltd. Smartgroup Corporation Ltd. Provides software products that organizes, manages, and analysis for workforces, data, and organizations. $8 - 8.6x 11/30/2015 Appriss Inc. Insight Venture Partners Offers SaaS based public safety, risk and compliance, health information, and insurance solutions. - - - 11/20/2015 Law Enforcement Zuercher Technology Technologies LLC Group, Inc. Develops cloud-based software solutions for the law enforcement and public safety sectors. - - - 11/17/2015 Aircraft Technical Maranon Capital, Publishers Parkergate Capital Provides information solutions, software, and web-based hosting solutions for aviation safety and compliance. - - - 11/17/2015 Bobo Software S.R.L. Banzai Media S.R.L. Owns and operates an online platform that provides information solutions on health and well-being. - - - 11/17/2015 4tell Solutions, LLC Rubicon Technology Develops and implements sustainable software solutions, including energy mgmt. and emission control. Partners - - - 11/16/2015 New World Systems Corporation Tyler Technologies, Inc. Develops and markets software solutions for public safety, law enforcement, and utility management applications. $675 - - 11/05/2015 Thunisoft Credit Beijing Thunisoft Software Co. Ltd. Corporation Limited (49%) Develops software and solutions for local food safety authorities. $61 5.6x - 11/02/2015 Cardno Limited (39%) Provides environmental assessments and planning, as well as software and technology solutions to engineers and planners. $621 0.6x 9.0x 10/22/2015 Lavender & Wyatt Netsmart Systems Inc. Technologies Inc. Provides behavioral health electronic medical record software and solutions. - - - 10/21/2015 Energent Incorporated Rodan Energy Solutions Inc. Develops software and applications for energy informatics solutions, including energy mgmt. and optimization. - - - 10/12/2015 Peters Software GmbH The Boeing Company Develops training software for commercial and private pilots aligned with the European Aviation Safety Agency. - - - 10/12/2015 Alcumus Holdings Inflexion Private Ltd. Equity Partners $141 - - 09/23/2015 The Learning Clinic Limited System C Healthcare Develops software solutions for healthcare providers focused on patient safety and infection outbreak control. plc - - - 09/14/2015 TotalMobile Limited Lyceum Capital Partners Provides mobile working solutions for field workers, including software for community safety and regulatory compliance. - - - 09/09/2015 TOTVS S.A. (5%) Harris Associates L.P. Develops integrated mgmt. systems including energy and environmental mgmt. - - - 09/01/2015 GenoLogics Life Sciences Software, Inc. Illumina Inc. Provides laboratory software for the mgmt. of information, regulatory compliance, workflow tracking and safety. - - - 08/24/2015 Ingegneria Designs and develops software specific for the mgmt., and Biomedica Santa Patheon Holdco Ltd. safety of biomedical and scientific equipment. Lucia S.p.A. - - - 08/18/2015 Trinity Levine Leichtman Consultants, Inc. Capital Partners - - - Crescent Capital Investments Pty Limited Provides compliance solutions, web-based information solutions, and health & safety software, Operating as an environmental consulting firm, offers software and compliance solutions for EH&S management. Capstone Partners LLC 4 EH&S - Software Q1 2016 ENVIRONMENTAL, HEALTH AND SAFETY - SOFTWARE: SELECT M&A TRANSACTIONS (CONTINUED) Date Target Acquiror EV / LTM Enterprise Value Revenue EBITDA (mm) Target Business Description 08/13/2015 Intelex HarbourVest Partners Develops web and application software solutions for Technologies, Inc. / JMI Equity management of EH&S, quality, risk, and suppliers. - - - 08/12/2015 Zuercher TriTech Software Technologies, LLC Systems, Inc. Develops software for law enforcement, including modules that provides jail mgmt., warrant tracking, and data reports. - - - 07/21/2015 Emergency ESO Solutions, Inc. Technologies, Inc. Designs public safety application software for fire departments and EMS agencies. - - - 06/15/2015 Emergency Communications Veritas Capital Network, LLC Provides SaaS solutions for mass notification, including critical communications for evacuations and active shooters. - - - 06/07/2015 Nexus Technical Services Corporation Provides fire protection services, including software for nuclear inspection and safety mgmt. programs. - - - 06/01/2015 PJA Solutions Pty. The Citadel Group Ltd. Limited Develops and supports software products and training for clinical applications and public health laboratories. $48 - - 05/27/2015 ABB Ltd. (3%) Cevian Capital Provides power and automation technologies for industrial customers, including software applicable to EH&S. - - - 05/18/2015 Healthy Communities Institute Corp. Xerox Corporation Provides a SaaS health improvement platform for health departments and community coalitions. - - - 05/04/2015 CBR Associates, Inc. symplr Develops health software programs for credentials, occurrence tracking, risk mgmt., and incident tracking. - - - 05/04/2015 Stock Informatik Gmbh CompuGroup Develops software for occupational and preventative health Medical Deutschland mgmt., corporate health mgmt., and work safety. AG - - - 04/30/2015 Remedy Interactive, Inc. Enviance, Inc. Provides software solutions that mitigate workplace injuries for small and mid-size organizations. - - - 04/14/2015 Environmental Systems, Inc. CBRE Group, Inc. Provides system integration services, and software in the areas of energy mgmt., life safety, and data analytics. - - - 04/07/2015 Metis Secure Solutions, LLC Mircom Technologies Develops and delivers emergency notification, Ltd. communications, and command center software. - - - 04/02/2015 BAIR Analytics Inc. LexisNexis Risk Solutions Inc. Provides analytical software and safety services for law enforcement and defense. - - - 03/10/2015 InterAct 911 Corporation N. Harris Computer Corporation Develops incident response, emergency mgmt., and public safety software to support first responders and dispatchers. - - - 03/04/2015 Innov8 Safety Solutions Limited Lucion Environmental Provides construction mgmt. and site safety solutions, Ltd. including safety audit software and EH&S consulting. - - - 02/12/2015 Emergency CallWorx, Inc. Motorola Solutions, Inc. Develops software solutions for call receiving, dispatching, and transmission of critical information during emergencies. - - - 02/09/2015 Exo2 Projects Ltd Alltech, Inc. Provides environmental and carbon assessment services, including bespoke software for a variety of companies. - - - 02/06/2015 CompuDyne Public Safety & Justice, Inc. TriTech Software Systems, Inc. Provides computer aided safety mgmt., and dispatch public safety software that assists in dispatch and mobility applications. - - - 02/02/2015 Enviance, Inc. Battery Ventures Provides resource planning software that includes emission analysis, chemical mgmt., and incident mgmt. - - - 01/13/2015 Gael Limited Ideagen PLC Designs and develops quality mgmt. solutions, including online and live training solutions. $28 2.2x 11.2x JENSEN HUGHES, Inc. Capstone Partners LLC 5 EH&S - Software Q1 2016 2016 YEAR TO COME - MAJOR M&A PLAYERS Many large, diversified business services companies continue to remain active in EH&S M&A. Below are a few anticipated to continue implementing M&A strategies. UL LLC – UL LLC, a private company based in Illinois, provides safety science services globally. The company operates in six segments, including Environment and Workplace Health & Safety. Serving a variety of industries, its Environment segment assists companies in capturing the value of sustainability strategies from training to transparency. Its Workplace Health & Safety segment improves business performance and culture through education, program management, and software solutions. With over 50 historical acquisitions, and multiple software-related buys, UL is a major player in the EH&S M&A marketplace. The company has made a major push towards software integration as a service offering, including products such as Occupational Health Manager, PureSafety, and SYSTOC, all designed to increase employee efficiency and productivity. Capstone Partners forecasts continued M&A activity by UL LLC with respect to EH&S. Honeywell – Honeywell International, a diversified technology and manufacturing company based in New Jersey, provides multiple products and services geared towards the automation, safety, and performance of companies, among other initatives. Its Safety segment focuses on safety technology with workplace, aviation, and emergency management applications. With over 25 acquisitions since 2009, Honeywell is very active in M&A, particularly with respect to technology and software. The company has consummated multiple software acquisitions, including Aviaso, Inc. in September 2015, a developer of software solutions that supports fuel efficiency and emissions control for the aviation industry. IHS, Inc. – IHS, Inc., a diversified consulting company based in Colorado, provides critical information, insights, and analytics for companies worldwide, including strategic planning, EH&S risk management, customer workflows, and operational excellence, among others. IHS offers a robust software platform, including 43 different solutions for EH&S. IHS is among the most active in M&A, with over 70 acquisitions and 10 since the start of 2014. Multiple software related transactions, as well as acquisitions within the EH&S space, including its 2011 acquisition of Dyadem International for $49mm, a provider of risk management software, including EH&S. Capstone Partners expects IHS to continue integrating M&A as a part of the corporate growth strategy. Sources: Capital IQ, Capstone Partners LLC Research, UL LLC, Honeywell International, Inc., IHS, Inc. Capstone Partners LLC 6 EH&S - Software Q1 2016 2016 YEAR TO COME – RISING M&A STARS Capstone Partners not only identifies the obvious buyers, but strives to recognize those M&A players on the rise. Often recent funding or capital raises brings to light these parties, as well as increased activity within the marketplace. Below are a few smaller companies that are more narrowly focused on EH&S software and anticipated to implement M&A growth strategies. Medgate, Inc. – Medgate, Inc., a private company based in Toronto, develops and provides EH&S software suites that enable users to track medical trends, manage compliance and regulatory issues, mitigate incidents, and analyze current programs. It offers Safety Management, Industrial Hygiene, and Ergonomics software suites, among others. It also provides Environmental software to streamline the collection and analysis of environmental data. Medgate has completed 1 acquisition, Tempus Software in 2012, a provider of occupational health and safety software. Medgate is funded by Adventure Capital, a Canadian venture capital firm. Capstone anticipates Medgate will continue to grow its presence within the marketplace. Enviance, Inc. – As discussed before, Enviance provides cloud-based environmental enterprise planning software solutions to measure, manage, report and mitigate environmental performance. Enviance has demonstrated an M&A strategy with its recent acquisition of Remedy Interactive. Moreover, Enviance recently received funding from Battery Ventures, a large private equity and venture capital firm based in Boston. According to Enviance. “Remedy represents Enviance’s first strategic acquisition and the first step towards the company’s ultimate goal of becoming the leading enterprise EH&S vendor. The acquisition is in line with Enviance’s strategy to pursue growth opportunities that complement the company’s product, technology and services portfolio.” Trinity Consultants, Inc. – Trinity Consultants, based in Dallas, is the most active and diversified company on the rising stars list, operating as an EH&S services and consulting company. Trinity has established a propensity for technological integration, such as its BREEZE software, Tank Emissions calculators, and other EH&S management solutions, in addition to traditional consulting services. Trinity has a history of M&A, with 9 historical acquisition and 2 in 2015. Moreover, in August 2015, Levine Leichtman Capital acquired Trinity. This trend of recent acquisitions, in addition to the private equity investment, suggests continued involvement in the M&A market going forward. Capstone forecasts Trinity Consultants as a company to watch for 2016 EH&S acquisitions. Sources: Capital IQ, Capstone Partners LLC Research, Medgate, Inc., Enviance, Inc., Trinity Consultants, Inc. Capstone Partners LLC 7 EH&S - Software Q1 2016 CAPSTONE AT A GLANCE Capstone Partners is a trusted advisor to the owners and stakeholders of privately held businesses. We offer a fully integrated suite of investment banking and corporate finance advisory services in the form of capital raises, liquidity events, and shareholder exits. SERVICES MERGERS & ACQUISITIONS PRIVATE CORPORATE ADVISORY PLACEMENTS RESTRUCTURING SERVICES DEDICATED INDUSTRY EXPERTISE Capstone’s dedicated industry practices have developed deep domain expertise to deliver enhanced transaction success rates, accelerated speed of execution, and maximum valuation premiums. Capstone is uniquely focused on the intersection between EH&S and software, with industry-focused research reports and numerous completed transactions within their respective segments. EH&S Software INDUSTRIAL & MANUFACTURING Chemicals Environmental, Health & Safety Facilities Maintenance, Repair, & Operations Industrial Equipment Infrastructure TECHNOLOGY & TELECOM Cloud Software & Services Data Analytics & Intelligence Enterprise SaaS/ Software IT & Data Center Infrastructure Telecom Equipment & Services Capstone Partners LLC 8 EH&S - Software Q1 2016 INFORMATION MANAGEMENT CORPORATION CAPSTONE PARTNERS CASE STUDIES: INFORMATION MANAGEMENT CORPORATION AND WEBGEN SYSTEMS Capstone was retained by the shareholders of Information Management Corporation (IMC), a leading niche provider of public safety software, to secure a financial or strategic acquirer for the business. 12 indications of interest were received for the Company, with 5 management discussions conducted prior to moving forward with a West Coast-based strategic buyer, TriTech Software Systems, which was backed by a local private equity firm, WestView Capital Partners. The Company sold 100% of its stock and secured ongoing employment agreements for key management, in addition to a consulting agreement for IMC’s primary shareholder. has been acquired by The undersigned represented INFORMATION MANAGEMENT CORPORATION “Capstone’s performance greatly exceeded our expectations…and feel they earned every bit of their fee.” Bernard Noe, President - IMC Capstone was retained by the Board of WebGen, a leading provider of commercial energy management software, to raise growth capital for the Company to aid in its technology development and enhance its sales efforts. Capstone contacted 96 parties through the process: 75 financial sponsors and 21 strategic investors. 13 management discussions were conducted prior to moving forward with one new investor. The Company raised $9.5 million: $5.0 million from new investors and $4.5 from existing investors. Through the fund raising process several strategic parties indicated an interest in acquisition. Capstone effectively managed a “dual-pronged” process. has recapitalized through the issuance of $9,500,000 Of Series B Senior Participating Convertible Preferred Stock WEBGEN SYSTEMS, INC. “We received comprehensive and thoughtful advice, good industry knowledge and overall process management such that the Board could make appropriate decisions.” The undersigned represented WEBGEN SYSTEMS, INC. Mark Noyes, CEO - WebGen Systems, Inc. Capstone Partners LLC 9 EH&S - Software Q1 2016 CAPSTONE PARTNERS CASE STUDIES: E-MON AND SAFETY SERVICES COMPANY a division of HUNT POWER Capstone was retained by Hunt Power to assist in realigning its strategic initiatives. Its division, E-Mon, is a leading provider of submetering technology and energy management software used for monitoring electrical usage. Capstone received 10 indications of interest, invited 4 parties to participate in management meetings and due diligence, and received 4 letters of intent for the division. Winning bidder was a private equity firm that was working with the former president of E-Mon (who had been introduced to the firm by Capstone). E-MON has been acquired by The undersigned represented HUNT POWER, L.P. “We always got top-notch advice, with outstanding industry knowledge, good foresight, and ferocious attention to detail. Senior level attention remained at 100% throughout.” Enrique Marroquin - Finance Director, Hunt Power Capstone was retained by Safety Sam, Inc. dba Safety Services Company. Safety Services is a leading provider of OSHA-required compliance and employee safety training materials and solutions for small-to mid-sized companies in the US and Canada. To best achieve the sole shareholder’s goals of a premium market price, retaining the culture & management, and securing resources to pursue growth opportunities, the shareholder decided to keep a minority interest and partner with a private equity investor. has been acquired by Winning bidder was Serent Capital, a private equity firm based in San Francisco. “What I actually experienced in completing a transaction makes me so grateful I didn’t try this on my own…Without question, the fee we paid for your services was worth every penny.” SAFETY SAM, INC. The undersigned represented SAFETY SAM, INC. Devon Dickinson – Founder, Safety Sam, Inc. Capstone Partners LLC 10 EH&S - Software Q1 2016 CAPSTONE PARTNERS: SELECT SOFTWARE TRANSACTIONS has been acquired by has acquired has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has acquired has acquired has been acquired by has been acquired by has acquired has been acquired by has been acquired by UNDISCLOSED has been acquired by has been acquired by has acquired assets from has acquired has been acquired by Capstone Partners LLC 11 EH&S - Software Q1 2016 CAPSTONE PARTNERS: SELECT SOFTWARE TRANSACTIONS initial pubic offering has acquired has been acquired by has been acquired by has merged with has been acquired by strategic investment has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has acquired has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by Informa Group plc $167,440,000 L-1 Investment Partners, LLC Capstone Partners LLC 12 EH&S - Software Q1 2016 CAPSTONE PARTNERS: SELECT EH&S TRANSACTIONS Applied Energy Systems, Inc. has been acquired by has divested assets to has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by Jarex Distribution LLC has been acquired by DOE & INGALLS MANAGEMENT has been acquired by has been acquired by has recapitalized with has recapitalized with has been acquired by has been acquired by has secured $9,500,000 has been acquired by has been acquired by has been acquired by SERIES B CONVERTIBLE PREFERRED STOCK Hyde Park Holdings LLC Capstone Partners LLC 13 EH&S - Software Q1 2016 THE CAPSTONE DIFFERENCE SENIOR LEVEL ATTENTION INDUSTRY MIDDLE MARKET NATIONAL GLOBAL SPECIALIZATION FOCUS PRESENCE REACH CLIENT VALIDATION 2015 LEADING M&A DEAL MAKER OF THE YEAR 98% Capstone 98% Capstone delivered senior level attention 96% Capstone maximized the value of the Company. 2015 US MIDDLE MARKET INVESTMENT BANKING FIRM OF THE YEAR 95% 96% was the right investment banking partner for the transaction. 2015 BOUTIQUE M&A INVESTMENT BANK OF THE YEAR during each stage of the transaction. Capstone increased the probability and speed of closure. 2014 BOUTIQUE INVESTMENT BANKING FIRM OF THE YEAR Cumulative client performance rating across all categories over two decades. THE INTERNATIONAL M&A AWARDS GLOBAL REACH CAPSTONE OFFICES PARTNER OFFICES Boston Chicago Argentina Belgium Bosnia Brazil Canada Chile London Los Angeles New York Orange County China Croatia Czech Republic Denmark Egypt Finland France Germany Hungary Ireland Italy Ivory Coast Japan Mexico Morocco Netherlands Norway Philadelphia San Diego Silicon Valley Tampa Peru Poland Portugal Russia Senegal Serbia Slovakia Slovenia Spain Sweden Switzerland Turkey United Kingdom United States Vietnam Capstone Partners LLC 14 EH&S - Software Q1 2016 THE EH&S SOFTWARE TEAM David Bench, Managing Director dbench@capstonellc.com • (949) 460-6431 David is a Managing Director in charge of the Western Region, based out of Orange County, CA. Prior to Capstone, David managed the Western region for Morgan Stanley Smith Barney’s Capital Strategies Group and its predecessor, Citi Capital Strategies. David has focused on middle market investment banking for nearly 30 years and has been the lead banker in over 250 M&A transactions involving both domestic and foreign corporate buyers, as well as leveraged recaps with private equity sponsors. David’s achievements in investment banking have gained national recognition by The M&A Advisor: one of his transactions was awarded the “Private Equity Deal of the Year,” while another was recognized as the “Energy Deal of the Year.” Mr. Bench has also been awarded “Middle Market Financing Professional of the Year,” an award recognizing M&A’s most accomplished professionals. Mr. Bench holds a BS and an MBA in Finance from Brigham Young University. He is a Series 7 and 63 Registered Securities Representative and a Series 24 Registered Securities Principal. Teak Murphy, Director tmuprhy@capstonellc.com • (310) 746-5006 Teak works in the Technology & Telecom Group, based out of Santa Monica, and is involved in all aspects of transaction execution from initial business development and market research through financial diligence, marketing, negotiation and closing of transactions. He has spent over 15 years assisting technology companies on mergers, acquisitions, IPOs and capital raises. His prior experience includes positions at leading technology-focus investment banks including SagePoint Advisors, Montgomery & Co., and Cowen and Co. Teak also worked as a Senior Associate with Enterprise Partners Venture Capital, a Southern California based VC firm, where he evaluated investment opportunities and worked closely with senior management and board members to successfully grow portfolio companies. Teak's experience working on mergers and acquisitions, fund raising, and initial public offerings as both an advisor and investor provides unique insight into the needs of both venture-backed and founder owned companies. Teak holds a BS in Finance from the University of Southern California. Christopher Cardinale, Associate ccardinale@capstonellc.com • (949) 460-6433 Christopher is an Associate in the Los Angeles office. He supports management and clients in the Western Region. Christopher is engaged in the execution and advisory of mergers, acquisitions and strategic capital raises. Prior to joining Capstone, he was an associate with a boutique M&A firm focused on valuation, M&A advisory, corporate finance, acquisition target research and exit-planning strategy. His industry experience includes manufacturing, healthcare, TMT and consumer. Christopher was also a research analyst in the M&A department at United Capital Financial Advisors. He earned a BA in Finance from the University of San Diego. Christopher is a Registered Securities Representative having passed the FINRA Series 79 and 63 examinations. Capstone Partners LLC 15 ABOUT CAPSTONE PARTNERS Capstone Partners LLC is a premier investment banking firm dedicated to serving the corporate finance needs of middle market business owners, investors and creditors. The firm provides M&A, corporate restructuring, private placement and financial advisory services. Headquartered in Boston, Capstone has offices in Chicago, London, Los Angeles, Philadelphia, San Diego, Silicon Valley and Tampa with an international presence that spans 450+ professionals in close to 40 countries. For more information about our services and expertise, please visit www.capstonellc.com World Class Wall Street Expertise. Built for the Middle Market.. © 2016 Capstone Partners LLC. All rights reserved.