August 2017 CLIENT BRIEFING

August 2017

CLIENT BRIEFING

HUMAN CAPITAL MANAGEMENT SYMPOSIUM

IN THIS ISSUE

On July 12th, JEGI hosted its 2017 Human Capital Management Symposium with partner S&P Global in New York City. This exclusive event brought together a select group of senior industry executives and investors for an engaging symposium on key topics and trends within the Human Capital Management sector.

The event began with opening remarks by JEGI Founder & CEO, Wilma Jordan and a Human Capital Management overview from JEGI Managing Director & Co-Head of Technology Banking, Jeff Becker. Attendees then heard from JeanMarc Laouchez, Global Managing Director, Strategy & Solutions, Korn Ferry Hay Group and Michael Vaughan, Managing Director & CEO of The Regis Company, in a fireside chat on the topic of Leadership & Talent Development for the New Economy. The evening concluded with a panel titled Looking Ahead: Real Future Growth Opportunities in HCM. Panelists included Robert Schultz, General Manager, IBM Talent Management Solutions, Matt Sigelman, CEO, Burning Glass Technologies, and Bryan Sherwood, Vice President, Talent Acquisition, S&P Global.

The following articles contain insights from this event.

JEGI Human Capital Management Symposium

1 JEGI's HCM Symposium

Overview

2 Looking Ahead:

Real Future Growth Opportunities in HCM

2 Leadership & Talent

Development for the New Economy

3 China Executive Summary 4 JEGI H1 2017 M&A

Overview

8 Exceptional

Transaction Experience

(from left) Bryan Sherwood (S&P), Robert Schultz (IBM), Wilma Jordan (JEGI), Matt Sigelman (Burning Glass), Jeff Becker (JEGI), Jean-Marc Laouchez (Korn Ferry), Michael Vaughan (Regis Company)

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Client Briefing August 2017 | 1

LOOKING AHEAD: REAL FUTURE GROWTH OPPORTUNITIES FOR HCM

Panelists discussed the latest trends and challenges facing HCM and how technology can help, and hinder, those issues; see key takeaways below.

? The expectations of HR leaders are changing ? in a department that is often siloed between talent acquisition, benefits and development, these departments now need to holistically determine who has had an impact. We are near a convergence of HR and Learning.

? AI can help companies do a better job of defining the type of person they should be looking to fill a position. There has never been an analytical framework for success, a way to automate decisions, or a way to provide and process real data as it relates to recruiting and HR in general.

? Hybridization suggests that the skills required for a job are changing rapidly, and we're needing new sets of skills for specific positions. The talent exists, but we need to analyze and redefine the talent, due to the need for new skills.

? HR Analytics should be implemented as support to key framing questions ? implementation itself will not solve any problems. Companies should be able to identify issues and then engage with, process and analyze the data to support employees in developing solutions. Avoid the trap of looking only at operational, processoriented KPIs.

? HR data has been disappointing in the past, because it has been limited to the scope of what is available within an individual HR management system. Big data companies are able to generate granular, actionable insights, because they have access to billions of records.

? AI can help companies optimize their business-as-usual processes through pattern analysis and driving engagement in otherwise tedious tasks.

? Collecting and analyzing both internal and external data develops a framework for shaping current and future talent, and in aligning investments in learning and development. Employers can determine the changing set of skills within each role and what learning and development processes they can implement to better support current employees.

? HR needs to become a strategy function versus the process function it has previously been. A lack of planning around employee engagement and employee experience can cause pain points within organizations.

? In analyzing data collected internally versus externally, companies can arbitrage their current workforce,

(from left) Bryan Sherwood (S&P), Robert Schultz (IBM), Matt Sigelman (Burning Glass)

which is more effective from a time and resource standpoint than external recruitment.

? Company culture needs to drive retention. Current difficulties in external hiring exacerbate the urgent need for data and analytics, from which companies can learn how to drive engagement and development of their existing workforce.

? Employers should use data to look for employees who are capable and have certain predispositions, rather than those who have a specific set of acquired skills. Rather than pushing employees into superfluously created positions, determine their capabilities and then map them into applicable positions.

LEADERSHIP & TALENT DEVELOPMENT FOR THE NEW ECONOMY

Jean-Marc Laouchez and Michael Vaughan provide key insights into the intersection of leadership, talent and learning development ? getting the most out of the human capital that has been attracted to your organization.

Jeff Becker: Amid constant transformation, how can companies think about leadership development as it attributes to long-term success?

Jean-Marc Laouchez: Companies want to know how to lead in this digitallydriven environment. Traditional leaders use blended development: assessing who you are and what you need to do, combined with lessons and lectures. We're seeing companies engage young

people in developing a vision for the future in hopes of understanding the next generation ? we know that they want to be part of the solution. We work with them in defining where we want to go and what we want to achieve, which makes us stronger. Over time, we monitor progress and ensure that what was developed is happening, aligning meaning and being mindful about what they do, rather than forcing it upon them.

Michael Vaughan: One of the shifts we're seeing is the model of skills. Previously, technology focused on the organization, and skills were developed around the job profiles required. Now, technologies are people-centric, because things change so quickly. What's made people successful today may completely change in six months.

Continued on page 7 >

2 | Client Briefing August 2017

CHINA EXECUTIVE SUMMARY

Below are key takeaways on the Chinese Market, excerpted from the client briefing of Clarity, JEGI's U.K. partner.

The Clarity team recently visited China to meet with strategic buyers and investors across our core sectors. Upon returning, they hosted a series of breakfast seminars to share their learnings and insights, discussing Chinese outbound M&A activity, including the current state of the M&A market, the impact of capital controls, and the implications and considerations for deal making in the media, information and technology sectors in 2017 and beyond. For more information on this market, please read Clarity's full report here.

Outbound Chinese M&A hit a record high in 2016, with 463 deals for a total value of $211.2 billion.

Despite restrictions, deals are still happening in the Chinese market, which has led to strong H1 2017 activity when compared to any quarter prior to 2016.

Implications & Key Takeaways

? Great Wall of Capital is not Going Away ? Government continues to emphasize its support of the "Going Out" policy. ? Intervention is expected to be a short term strategy, but underlying structural demand is not going away.

? Chinese More Experienced in Overseas M&A ? Increasingly comfortable in: evaluating overseas acquisition targets; participating in "Western" processes, though many will still be doing it for the first time; executing more complex acquisitions/arranging overseas acquisition financing.

? Who is Buying, Who is Funding? ? Propensity to "partner up" may make it harder to understand who sellers are actually selling to and who the key decision makers are. Make sure to watch out for interrelatedness of buyers. ? Acquisition finance can be complex and less transparent than in the West, with multiple sources contributing.

? Timing will Continue to be a Factor ? While receptive to global processes, longer lead times should be considered. "Warm them up" with fireside chats in advance of process. ? Regulatory approval (if required) means that Chinese buyers will likely still take longer to complete a transaction vs. Western counterparts.

? Premium Valuations ? Often adopt a longer-term investment horizon when evaluating a potential target. ? Ability to unlock Chinese market value that competing acquirers are not able to match. ? Stock market trading arbitrage to continue as domestic capital chases too few investment opportunities.

? Target Management Key ? Consistent with Confucian culture, high importance is placed on building relationships with management before and/or during the transaction process - team harmony is key. ? Strong motivation to retain the seller's management team given less familiar with overseas market dynamics and less capable initially of running the business.



Client Briefing August 2017 | 3

JEGI H1 2017 M&A OVERVIEW: HIGHLY ACTIVE M&A MARKET DRIVEN BY STRATEGIC AND FINANCIAL ACQUIRERS

quarter. Financial acquirers ? including private equity firms and SPACs (Special Purpose Acquisition Companies) ? completed eight of the top 20.

JEGI Very Active in H1 2017

Buoyed by strong consumer and business confidence, mergers and acquisitions in the first half of 2017 across the media, information, marketing, software and tech-enabled services sectors totaled more than 1,000 announced transactions and nearly $100 billion in value.

The pace of M&A in 2017 is on track to surpass 2014 and 2015 levels, but may not match last year's, given the torrid first half of 2016, which saw Microsoft acquire LinkedIn for $29 billion and Quintiles Transnational buy IMS Health for $13.5 billion. In contrast, the largest two deals in H1

2017 were Sinclair Broadcast Group's announced acquisition of Tribune Media for $7.3 billion and Pamplona Capital's announced buyout of PAREXEL, a drug research company, for $5.3 billion. As such, while total deal value decreased in the first half of 2017 compared to H1 2016, it remains 79% higher than the first half of 2015.

Top 20 Deals for H1 2017

Continued strong first half M&A was led by 20 top announcements totaling approximately $50 billion, with 12 of those deals exceeding $1+ billion and 15 of which took place in the second

JEGI saw a strong first half, with eight closings and several others moving toward completion. In Q2, we represented AdExchanger, a leading integrated media and events company with highly acclaimed conferences, in its sale to Access Intelligence (a Veronis Suhler Stevenson portfolio company); HGGC in their acquisition of etouches, a leading provider of event management software in the cloud; and Entrada, a leading provider of integrated mobile solutions that improve healthcare efficiencies and outcomes, in its sale to NextGen, a subsidiary of QSI. Stay tuned for additional deal announcements in the coming months.

We are also pleased to announce that JEGI recently welcomed two new Managing Directors to the firm. Kathleen Thomas, a senior B2B media and events M&A banker, joined JEGI in May. Ms. Thomas has over 20 years of experience specializing in mergers and acquisitions advisory, with expertise

TOP 20 TRANSACTIONS, H1 2017

BUYER Sinclair Broadcast Group Pamplona Capital Management INC Research Holdings Cisco Systems Gartner Vivendi Moody's PetSmart (Argos Holding) Quinpario Acquisition Corp. Hellman & Friedman Apollo Global Management eBay; Microsoft; Tencent Holdings Oracle First Data Capitol Acquisition Corp. III Harland Clarke (MacAndrews & Forbes) Eurazeo; Goldman Sachs FleetCor Technologies Amazon Apollo Global Management

SELLER Tribune Media Company PAREXEL International inVentiv Health AppDynamics CEB Havas Bureau van Dijk Electronic Publishing Chewy Novitex Enterprise Solutions / Source HOV Fairfax Media West Corporation Flipkart Online Services Moat CardConnect Cision (GTCR) RetailMeNot Dominion Web Solutions Cambridge Global Payments Mood Media

TARGET DESCRIPTION Media and entertainment company Contract drug research software Pharmaceutical consulting services IT infrastructure monitoring and analytics Practice insight and technology company Advertising, digital and communications services Publishes electronic business information E-commerce portal for the pet industry Outsourced IT services Digitally progressive media company Customer care and telecom services Online shopping website SaaS analytics solutions Payment processing solutions PR software Savings destination for online and instore purchases Digital marketing solutions Online payment solutions E-commerce platform Creative marketing solutions

Sources: JEGI Transaction Database and 451 Research LLC *Some of these deals are still pending

4 | Client Briefing August 2017

ANNOUNCED DATE* VALUE ($B)

May 2017

$7.3

June 2017

$5.3

May 2017

$4.6

January 2017

$4.0

January 2017

$3.5

May 2017

$3.4

May 2017

$3.4

April 2017

$3.4

February 2017

$2.8

May 2017

$2.5

May 2017

$2.0

April 2017

$1.4

April 2017

$0.9

May 2017

$0.8

March 2017

$0.8

April 2017

$0.7

May 2017

$0.7

May 2017

$0.7

March 2017

$0.7

April 2017

$0.6

the largest transaction in H1 2017: Sinclair Broadcast's acquisition of Tribune Media Company for $7.3 billion. Other notable transactions for Q2 2017 include the: Hellman & Friedman acquisition of Fairfax Media, an Australian media company, for $2.5 billion; and Harland Clarke acquisition of RetailMeNot, a savings destination for online and in-store purchases, for $682 million.

in content and information, trade shows, conferences, digital media and marketing, and the services that support these businesses. Michael Hirsch joined JEGI in early June. Mr. Hirsch is a 15+ year senior banker covering the Internet, digital media and related software sectors, where he will further expand JEGI's global leadership across these core markets.

Looking Ahead

Market conditions remain favorable heading into the second half of the year. The Conference Board's Consumer Confidence Index increased moderately in June, standing currently at 118.9. Lynn Franco, the Director of Economic Indicators at The Conference Board said, "Consumers' assessment of current conditions improved to a nearly 16-year high. Expectations for the short-term have eased somewhat, but are still upbeat. Overall, consumers anticipate the economy will continue expanding in the months ahead, but they do not foresee the pace of growth accelerating." Similarly, the Bureau of Labor Statistics reported that total nonfarm payroll employment increased by 138,000 in May, with an unemployment rate in the US of 4.3%, while average hourly earnings increased only slightly.

Meanwhile, PNC's survey in May showed that 88% of small business owners ? the highest ever ? are optimistic about the U.S. economy,

and 94% are highly optimistic about the near-term outlook for their own business. Consumer and small business confidence drives confidence for larger enterprises to plan and invest, which in turn drives mergers and acquisitions.

M&A Highlights in H1 2017

Removing the Microsoft/LinkedIn transaction from H1 2016 data, deal value for the b2b media and technology sector increased 66% in H1 2017, totaling $1.9 billion vs. $1.2 billion in H1 2016, although the number of transactions was down 24% for the half. H1 2017 M&A activity was driven by the: Blackstone Group acquisition of Global Sources, a B2B media company that provides information and integrated marketing services, for $489 million; Aurora Capital Group acquisition of Randall Reilly, an integrated B2B media company for trucking and construction markets, for $230 million; and KAR Auction Services acquisition of Carco Technologies, an online platform and mobile application that enables automotive dealers to acquire used cars, for $43 million.

Deal volume in the consumer media and technology sector jumped to 118 transactions in H1 2017 vs. 107 deals in H1 2016, while deal value rose significantly to $23.1 billion, up from $3.9 billion in H1 2016. This tremendous increase in deal value was due to several multi-billion dollar transactions in the sector, including

The number of transactions in the database and information services sector declined 19% in the first half of 2017, with 22 transactions, compared to 27 deals in the same period of 2016. Deal value, however, saw a more significant drop in H1 2017 from H1 2016's $34.2 billion. This was due in large measure to the IHS/Markit merger for $7.4 billion that was announced in Q1 2016 and Quintiles Transnational Holdings' acquisition of IMS Health for $13.6 billion, which was announced in Q2 2016. Notable Q2 2017 deals included the: Moody's acquisition of Bureau van Dijk Electronic Publishing, a publisher of electronic business and company information for $3.4 billion; Garmin acquisition of Active Corporation, operator of an electronic marine database, for an undisclosed amount; and Caterpillar acquisition of Yard Club, a platform to find, order, and track rental equipment to construction professionals, for an undisclosed amount.

M&A activity in the exhibitions and conferences sector was relatively steady in terms of deal volume, with 33 transactions in H1 2017 vs. 32 deals in the first half of 2016. Deal value, however, decreased from $2.3 billion in the first half of 2016 to $1.1 billion in H1 2017, due to Vista Equity Partners' acquisition of Cvent, a cloudbased enterprise event management platform, for $1.6 billion in Q2 2016. Notable transactions in H1 2017 included the: Eventbrite acquisition of Ticketfly, a ticketing, marketing and analytics tool for event promoters and venues, for $200 million; Access Intelligence acquisition of AdExchanger, a leading integrated media and events company with highly acclaimed



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