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INDUSTRY REPORTHR & EMPLOYMENT SERVICESQ1, 2020TechnologyIn This Issue: Industry News Transactions State of the Industry About Mirus Mirus Business Services Mirus Capital Advisors, Inc. 2020Spotlight200 SUMMIT DRIVE, 4TH FLOOR, BURLINGTON, MA 01803 781.418.5900 MERGER.COM1
HR & Employment ServicesIndustry News2020 Business and Professional Services TrendsRSM Full ArticleBusiness and professional services firms all over the world continue todemonstrate their commitment to evolving with the times. This is no small feat,given the current climate of rapid technological advancement and continualpolitical and economic change. Firms are also under tremendous pressure togain and maintain competitiveness, from both an innovation standpoint as wellas a fiscal one.Kellermeyer Bergensons Services Acquires Hospitality Staffing SolutionsBloomberg Full ArticleKellermeyer Bergensons Services, LLC, a leading provider of technologyenabled, integrated facility management services, today announced itsacquisition of Hospitality Staffing Solutions, LLC, a leading provider ofoutsourced housekeeping and related services to the hospitality sector.“This combination represents a significant step forward for both KBS and HSS,”said Mark Minasian, Chief Executive Officer of KBS. “HSS is already the marketleader in hospitality services, and joining forces with KBS further enhances itsservice offering, scale, and technology capabilities. Together, KBS and HSS canoffer hospitality customers an unparalleled suite of high-quality, tech-enabledsolutions tailored to their business needs.”Kelly Services Acquires Insight, Expanding its Education Specialty BusinessGlobeNewswire Full ArticleKelly Services announced the acquisition of Insight, an education servicestaffing company with experience in partnering with school districts in Illinois,Massachusetts, New Jersey and Pennsylvania. The acquisition further expandsKelly's leadership position in the education workforce solutions industry, whereKelly Education is ranked the top provider across the U.S., filling nearly four millionPreK-12 classrooms every school year.“The acquisition of Insight demonstrates how Kelly is investing its capital towardsbeing a specialty talent company and a leader in the education market,” saidPeter Quigley, president and chief executive officer, Kelly Services. “Insight hasthe geographic and service footprint to complement Kelly Education’s currentreach. Their commitment to putting students first and delivering serviceexcellence aligns perfectly with Kelly's culture and priorities."2
HR & Employment ServicesClosed Transactions120Willis TowersWatson deal100806040200Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1201520162017Closed Transactions2018Target2020Aggregate Transaction Value ( M)Selected HR & Employment Services TransactionsDate 02,0001,000-Aggregate Transaction Value ( M)HR & Employment Services M&ABuyers/Investors3/26/2020 CareerBuilder Employment Screening, LLCAccurate Background, LLCEnterpriseValue ( M)-EV / LTMRevenue EBITDA--3/13/2020 Learning Curve Group LimitedAgilitas Private Equity Services Limited---3/11/2020 LegalPartners, LLCEureka Equity Partners, L.P.---3/10/2020 Solve HR LimitedLaw At Work---Third Summit Corporation---3/9/2020 Pope Ventures, Inc.2/24/2020 Frontline Recruitment Group Pty LtdExpress Services, Inc.---2/19/2020 Allay Inc.Novo Benefits, LLC---2/17/2020 Moonlight Work, Inc.PullRequest, Inc.---2/12/2020 Metro Staffing & Service Co IncCorTech, LLC---2/10/2020 Avesta Systems, Inc.OnShift, Inc.---2/10/2020 Penflex, Inc.2/5/2020 Ideal Panamá, S.A.McNeil & Company, Inc.Carso Energy, S.A. de C.V.---153--1/31/2020 ComputerSearch Payroll ServicesEmployee Benefit Concepts, Inc.---1/28/2020 Lincoln Associates, SASThe Talent Club of Companies S.L.---1/20/2020 Event Workforce Group Pty LtdMiles Per Hour Pty Ltd---1/16/2020 Concord Recruitment LimitedThe Classroom Partnership Limited---1/16/2020 Chairman Mentors International Limited MW&L Capital Partners Limited---1/14/2020 Insight Workforce Solutions, LLCKelly Educational Staffing Inc.---1/10/2020 Hospitality Staffing Solutions, LLCKellermeyer Bergensons Services, LLC---1/6/2020 Pro Carrier Agent Co., Ltd.Good Life Company,Inc. (JASDAQ:2970)1/3/2020 Shift Human Capital Management, Inc. andVensure Employer Services, Inc.---19--1/3/2020 Norris Training Systems, Inc.Surge Private Equity LLC---1/3/2020 Staff Matters, Inc.NSC Technologies, Inc.---1/1/2020 Benefit Insights, LLCEconomic Group Pension Services, Inc.------10410.8x-1/1/2020 Everest Search PartnersKingsley Gate Partners, LLC1/1/2020 OpenWork Inc.Link and Motivation Inc. (TSE:2170)3
Business ServicesAs middle-market deal makers continue to face challenges in 2020, the M&Aoutlook remains guarded. Record levels of dry powder are being offset by agrowing desire for cash preservation as companies seek to weather the COVID19 crisis. With no vaccine in sight, data driven decision making, a hallmark ofthe business services industry, is set to play a key role in the coming year.100Percent Change8060Business Services Index - Percent ChangeS&P 500 Index - Percent Change40200-203/31/2020Company NameTickerABM Industries IncorporatedNYSE:ABMACCO Brands CorporationNYSE:ACCOBarrett Business Services, Inc.NasdaqGS:BBSIBrady CorporationNYSE:BRCCBIZ, Inc.NYSE:CBZCintas CorporationNasdaqGS:CTASClean Harbors, Inc.NYSE:CLHCopart, Inc.NasdaqGS:CPRTDeluxe CorporationNYSE:DLXEquifax Inc.NYSE:EFXFTI Consulting, Inc.NYSE:FCNHealthcare Services Group, Inc.NasdaqGS:HCSGHerman Miller, Inc.NasdaqGS:MLHRHNI CorporationNYSE:HNIHuron Consulting Group Inc.NasdaqGS:HURNICF International, Inc.NasdaqGS:ICFIInnerWorkings, Inc.NasdaqGS:INWKInsperity, Inc.NYSE:NSPInterface, Inc.NasdaqGS:TILEKelly Services, Inc.NasdaqGS:KELY.AKforce Inc.NasdaqGS:KFRCKnoll, Inc.NYSE:KNLKorn/Ferry InternationalNYSE:KFYManpowerGroup Inc.NYSE:MANMatthews International CorporationNasdaqGS:MATWOn Assignment, Inc.NYSE:ASGNPitney Bowes Inc.NYSE:PBIQuad/Graphics, Inc.NYSE:QUADR.R. Donnelley & Sons CompanyNYSE:RRDRobert Half International Inc.NYSE:RHIRollins, Inc.NYSE:ROLSP Plus CorporationNasdaqGS:SPSteelcase Inc.NYSE:SCSStericycle, Inc.NasdaqGS:SRCLTeam, Inc.NYSE:TISITetra Tech, Inc.NasdaqGS:TTEKThe Brink's CompanyNYSE:BCOTransUnionNYSE:TRUTriNet Group, Inc.NYSE:TNETTrueBlue, Inc.NYSE:TBIUniFirst CorporationNYSE:UNFViad CorpNYSE:VVIVSE CorporationNasdaqGS:VSECEnterprise Value Revenue 2,619 6,504 1,382 1,946 200 943 2,219 1,149 1,410 956 20,812 7,259 4,211 3,490 16,439 2,225 1,952 1,996 17,696 3,619 4,494 2,406 1,688 1,814 1,727 2,682 1,277 2,236 1,253 895 1,606 1,496 231 1,158 1,410 4,391 1,072 1,343 535 5,234 618 1,356 1,058 1,435 1,423 1,983 3,634 20,438 1,764 1,511 2,911 3,991 2,096 3,206 1,288 3,785 1,919 6,164 4,282 6,113 12,245 2,074 1,265 923 1,357 3,724 7,518 3,264 588 1,163 4,338 2,449 4,258 3,651 16,127 2,724 2,764 3,970 518 2,311 2,549 1,863 901 1,392 476 760LTM FinancialsGross Profit EBITDA 769 342 620 273 640 53 573 191 148 127 3,349 1,642 1,060 551 1,041 898 1,184 365 2,071 885 818 334 241 116 995 326 840 224 301 106 528 126 262 33 740 208 525 190 940 110 396 83 548 173 545 270 3,294 737 526 156 1,147 414 1,248 373 733 320 1,186 392 2,534 671 1,047 405 223 121 1,215 322 1,167 535 328 48 420 241 828 367 1,833 1,012 716 331 606 95 692 327 92 126 87 91MedianMeanValuation MetricsEV / Revenue EV / x0.6x7.1x0.6x5.2x0.7x1.4x7.4x9.4xLTM MarginsGross Margin EBITDA 6.6%9.1%11.4%12.0%31.9%32.0%11.0%12.2%4
Business ServicesState of the IndustryS&P North America BMI Commercial & Professional Services 2016Q3Q4Q1Q22017Q3Q4Q1Q22018Q3Q4Q120192020Source: Capital IQS&P 500 Professional Services Q4Q1Q22017Q3Q4Q1Q22018Q3Q4Q120192020Source: Capital 1Q2Q3Q4Q12015Q2Q3Q4Q12016Q2Q3Q4Q12017Source: Capital IQQ2Q3Q4Q12018EV / EBITDAQ2Q3Q420190.0xQ12020EV / RevenueBusiness Services Transaction VolumeTransaction : Capital Q4Q120205EV / RevenueEV / EBITDAIndustry Valuations
The Value ofAccomplishmentThe highest level of expertise and hardwork is what accomplishment requires.It’s what you deserve and what we do.We sweat the small stuff.Take a 3:00am call.Say yes.Say no.Dig deeper when things get tough.And celebrate with you when yourefforts pay off and you can reflect onit all and say, “It’s really remarkablewhat we’ve accomplished here.” Then and only then, will we know thatwe’ve accomplished somethingmeaningful, too. About MirusOur global Business Services Group understands the challenges of servicedelivery, client demands and market dynamics in this sector, with a clearappreciation for how these factors drive value and investor interest. Mirusprovides direct access to sector-specific expertise, as well as global buyers andsellers. Our professionals have deep experience and expertise in the followingBusiness Services subsectors: Business Process Outsourcing, Human CapitalManagement, Tech-Enabled Services and Professional Services.Partner SpotlightAn investment banker to middle market firms since 2004,Brendan Kiernan has worked on more than 75 M&Aengagements, managing deals for business services,technology, software and healthcare clients. Brendan isa graduate of Boston College and earned his MBA fromBentley’s McCallum Graduate School of Business. Heholds series 7, 79 and 63 certifications from FINRA.Brendan Kiernan781-418-5926kiernan@merger.com“I hired Mirus to represent me in the sale of my family’s life sciences servicescompany. Mirus delivered great value. Its team was highly professional andactively involved in all aspects of the negotiation, from diligence preparationand tactical advice to deal strategy, resulting in a successful sale to a 2 billionpublic acquirer. The Mirus team is very good at what they do and I’d happilyrecommend them to other business owners.” - Peter Harris, Principal Shareholder,B&V Testing Services6
Mirus Business Services SpotlightCrystal Rock is a 100 year old direct-to-consumer home and office water,coffee, filtration and office supply service delivery business. The companybottles and distributes Crystal Rock Waters purified water, Vermont Pure natural spring water, Cool Beans coffee, and other break room items tothe commercial office and residential customers throughout New York andNew England. Cott is a route-based service company with a leadingvolume-based national presence in the North America and European homeand office bottled water delivery industry and a leader in custom coffeeroasting, blending of iced tea, and extract solutions for the U.S. foodserviceindustry.Virtual is a leading technology-focused association management company,which combines advanced systems, industry best practices, and innovationto deliver strategic guidance, execution, and world-class businessoperations to tech and standards organizations. Through an investment byStriker Partners, Virtual joined forces with Drohan Management Group andProfessional Credential Services to form a newly combined firm providingprofessional services to technology and standards-setting organizations,business and trade associations, scientific professional societies, stategovernments, and professional licensing associations.FleetLogix provides outsourced labor to rental car agencies across the U.S.The company uses a proprietary technology platform to track and analyzeperformance at each site, to ensure quality and efficiency in its servicedelivery, and to provide data and metrics to its managers and its clients.Striker Partners is a private, family-based investment firm formed to makemajority equity investments in profitable and growing businesses. StrikerPartners brings technology expertise to the company and represents a greatcultural fit.State Cleaning Service, Inc. is a full-service janitorial and buildingmaintenance expert providing a full array of services to general officebuildings, life science properties and manufacturing buildings. PritchardIndustries, Inc. is the largest privately-held facility maintenance company inthe United States. Since 1914, the Company has been a full-service providerof cost-effective, precision building services and facility maintenance tocommercial office buildings, corporate facilities, industrial plants,educational facilities, medical complexes, and entertainment arenas7
1/31/2020 ComputerSearch Payroll Services Employee Benefit Concepts, Inc. - - - 1/28/2020 Lincoln Associates, SAS The Talent Club of Companies S.L. - - - 1/20/2020 Event Workforce Group Pty Ltd Miles Per Hour Pty Ltd - - - 1/16/2020 Concord Re
