CAPSTONE S EXTENDED VALUATION INDEX MARCH 2017 EV/EBITDA. EV (Enterprise Value in millions of USD) INDUSTRY EV/REVENUE ABOUT CAPSTONE S EXTENDED INDEX

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1 CAPSTONE S EXTENDED VALUATION INDEX MARCH 2017 BUSINESS SERVICES Todd McMahon tmcmahon@capstonec.com CONSUMER PRODUCTS Tom Eiott teiott@capstonec.com EV (Enterprise Vaue in miions of USD) LTM MULTIPLES EV/EBITDA % CHANGE* $10 - $ x 6.3% $100 - $ x -0.7% $250 - $ x -5.2% READ MORE Page 3 EDUCATION & TRAINING Jacob Voorhees jvoorhees@capstonec.com GOVERNMENT & DEFENSE Ted Pok tpok@capstonec.com HEALTH & MEDICAL Eric Wiiams ewiiams@capstonec.com INDUSTRIAL & MANUFACTURING David Bench dbench@capstonec.com TECHNOLOGY & TELECOM David Michaes dmichaes@capstonec.com INDUSTRY BUSINESS SERVICES 8.2x -10.7% Page 4 CONSUMER PRODUCTS 10.6x 3.1% Page 5 EDUCATION & TRAINING 10.3x 18.2% Page 6 GOVERNMENT & DEFENSE 10.2x -0.6% Page 7 HEALTH & MEDICAL 9.3x 1.9% Page 8 INDUSTRIAL & MANUFACTURING 7.8x -1.6% Page 9 EV/REVENUE TECHNOLOGY & TELECOM 1.3x 0.8% Page 10 Source: A data is from Capita IQ, uness specificay noted otherwise, LTM = ast tweve months ending Apri 1, 2017 *% change is compared to the LTM mutipes ending the month prior ABOUT CAPSTONE S EXTENDED INDEX Capstone s Extended Index tracks vauations across the midde market and in various industries. Two of the primary ways we cacuate vauations are by anayzing the prices paid for recent acquisitions and the avaiabe data from pubic companies, both of which are used here. The Education & Training industry is the ony industry for which we excusivey use pubic company data, since transaction vauations are rarey discosed. In addition, the Technoogy & Teecom index uses EV/Revenue to track vauations, whie the rest use EV/EBITDA. Capstone s index is intended to gauge the state of vauations as compared to previous years, rather than to provide a specific vauation estimate for your company for that, pease reach out to one of our bankers.

2 ESTABLISHED PRESENCE MIDDLE MARKET INVESTMENT BANKING FIRM OF THE YEAR US MIDDLE MARKET INVESTMENT BANK OF THE YEAR USA MID-MARKET INVESTMENT BANKING FIRM OF THE YEAR has recapitaized with Capstone was an invauabe partner in the sae of Penn Foster. They were unreenting in their commitment to securing a dea and remained baanced despite dissenting sharehoder goas. They bridged the transaction when dysfunctiona buyer/seer/management dynamics emerged and defty became psychoogists, mediators and voices of reason a in one. Their temperament and expertise was a very rare combination. We ook forward to a ong-term reationship. Thank you for everything! - FRANK BRITT, CEO, PennFoster "The Capstone team was great to work with; responsive, communicated we and deivered exceent resuts. I aways fet I was getting the straight story which enhanced the trust factor between us. We were pushed to project a stretch budget eary in the process which was great advice as we achieved it and got a higher vauation. - CHUCK DORSEY, CEO, Hao Innovations, Inc. has merged with a portfoio company of has secured financing from Capstone did a great job at heping us to secure an investment from Spectrum Equity. Capstone heped by setting expectations, managing negotiations, working through terms of the LOI and the definitive agreement, and smoothing down the many bumps that aways come up during negotiation. - CRAIG JOHNSON, CEO, Tenstreet

3 ABOUT THE OVERALL MIDDLE MARKET INDEX The reason we incude our Overa Midde Market Index is because vauations vary greaty based on size. Larger companies generay command higher mutipes because: 1. they re higher in demand, 2. buyers wi pay a premium for industry eaders, and 3. enders are wiing to provide more debt on arger transactions, boosting vauations. Beow are transaction mutipes for companies in the midde market, segmented by size of the transaction. MIDDLE MARKET EV/EBITDA TRANSACTION MULTIPLES 9.0x 7.0x 7.8x 9.0x 9.6x 10.7x 10.9x 10.1x 10.1x 10.3x 9.9x 9.9x 9.9x 9.9x 8.9x 8.4x 8.6x 8.7x 8.4x 8.2x Enterprise Vaue (EV) in miions $10 - $100 $100 - $250 $ BUYER BREAKDOWN March 2015 March 2016 March % 24.7% 24.0% 74.8% 75.3% 76.0% Capstone Partners LLC 3

4 BUSINESS SERVICES EV/EBITDA MULTIPLES 8.7x 7.8x 8.6x 8.1x 9.2x 8.2x 24.2% 75.8% Three year EBITDA mutipe average 13.0x 9.0x Capstone Business Services Group S&P 500 Todd McMahon, HEAD OF CAPSTONE S BUSINESS SERVICES PRACTICE Todd has been active in financia services for 25+ years, with a career that has incuded asset management, advisor, entrepreneur, investor and board member. As an advisor, Todd has counseed cients on mergers & acquisitions, recapitaizations and financings Read fu bio Schedue a confidentia discussion with Todd. Capstone Partners LLC 4

5 CONSUMER PRODUCTS EV/EBITDA MULTIPLES 1 8.7x 11.5x 9.8x 9.1x 10.2x 10.6x 21.0% 79.0% Three year EBITDA mutipe average 17.0x 15.0x 13.0x 9.0x Capstone Consumer Products Group S&P 500 Tom Eiott, teiott@capstonec.com HEAD OF CAPSTONE S CONSUMER PRODUCTS PRACTICE Tom has over 20 years of investment banking experience. He eads Capstone's Food and Beverage and Pet Products Groups and has extensive experience representing branded consumer products cients. Additionay, he covers other opportunities in the Southeast United States Read fu bio Schedue a confidentia discussion with Tom. Capstone Partners LLC 5

6 EDUCATION & TRAINING 12.5x 11.5x 10.5x 9.5x 9.0x 8.5x Capstone Education & Training Group S&P 500 Jacob Voorhees, HEAD OF CAPSTONE S EDUCATION & TRAINING PRACTICE Jacob is a founding member of Capstone Partners and oversees the Northeast Region. Jacob has a vast amount of experience in the education and training, consumer products and business services sectors. Over the ast five years, Jacob s transactiona work has resuted in Read fu bio Schedue a confidentia discussion with Jacob. Capstone Partners LLC 6

7 GOVERNMENT & DEFENSE EV/EBITDA MULTIPLES 8.7x 9.8x 7.7x 10.3x 10.3x 10.2x 24.5% 75.5% Three year EBITDA mutipe average 13.0x 12.5x 11.5x 10.5x Capstone Government & Defense Group S&P 500 Ted Pok, HEAD OF CAPSTONE S GOVERNMENT & DEFENSE PRACTICE Ted is a at Capstone and eads the Centra Region. Prior to Capstone, Ted ran the corporate finance practice in the Centra region for Morgan Staney Smith Barney s Capita Strategies Group and its predecessor, Citi Capita Strategies. He has over 20 years of experience Read fu bio Schedue a confidentia discussion with Ted. Capstone Partners LLC 7

8 HEALTH & MEDICAL EV/EBITDA MULTIPLES 9.3x 9.9x 10.3x 8.9x 9.1x 9.3x 28.6% Three year EBITDA mutipe average 71.4% x Capstone Heath & Medica Group S&P 500 Eric Wiiams, ewiiams@capstonec.com HEAD OF CAPSTONE S HEALTH & MEDICAL PRACTICE Eric serves as and Head of the Atantic Region for Capstone, based out of Phiadephia. Prior to Capstone, Eric was responsibe for managing the Eastern region for Morgan Staney Smith Barney s Capita Strategies Group and its predecessor, Citi Capita Strategies. Eric has Read fu bio Schedue a confidentia discussion with Eric. Capstone Partners LLC 8

9 INDUSTRIAL & MANUFACTURING EV/EBITDA MULTIPLES 8.2x 8.2x 8.2x 8.2x 7.8x 23.1% 76.9% Three year EBITDA mutipe average 12.5x 11.5x 10.5x 9.5x Capstone Industria & Manufacturing Group S&P 500 HEAD OF CAPSTONE S INDUSTRIAL & MANUFACTURING PRACTICE David Bench, dbench@capstonec.com David is a in charge of the Western Region, based out of Orange County, CA. Prior to Capstone, David managed the Western region for Morgan Staney Smith Barney s Capita Strategies Group and its predecessor, Citi Capita Strategies. David has focused on midde market companies Read fu bio Schedue a confidentia discussion with David. Capstone Partners LLC 9

10 TECHNOLOGY & TELECOM EV/REVENUE MULTIPLES 1.7x 1.7x 1.6x 1.7x 1.6x 1.5x 1.5x 1.0x 31.4% 0.5x 68.6% Three year EBITDA mutipe average PUBLIC COMPANY EV/REVENUE INDEX 4.5x 3.5x 3.0x 2.5x 1.5x Capstone Technoogy & Teecom Group S&P 500 David Michaes, HEAD OF CAPSTONE S TECHNOLOGY & TELECOM PRACTICE David Michaes is a of Capstone where he is responsibe for managing the firm s Technoogy & Teecom Group (TTG). David founded SagePoint Advisors in 2008, a boutique investment banking firm focused on providing M&A advisory services to technoogy and teecom Read fu bio Schedue a confidentia discussion with David. Capstone Partners LLC 10