Integrity Expertise Results John Hill hill@hydeparkcapital.com (813) 383-0205 John McDonald mcdonald@hydeparkcapital.com (813) 383-0206 Human Capital Services Industry Update February 2012 Keith Hodgdon Senior Vice President hodgdon@hydeparkcapital.com (813) 383-0208 Jeffrey Bridge Vice President bridge@hydeparkcapital.com (813) 383-0204 Michael Mariani Associate mariani@hydeparkcapital.com (813) 597-2649 Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL 33602 Tel: 813-383-0202 www.hydeparkcapital.com Member FINRA/SIPC
Human Capital Services Industry Update Commentary As of February 23, 2012, the performance of the Human Capital Services industry s sectors: HR & Outsourcing (up 6%), HR Technology (up 2%), and Staffing & Recruiting (down 21%), varied in their public market performance during the past year. A few notable completed M&A transactions include Randstad North America s purchase of SFN Group, Inc. for more than $700 million and Recruit Co. s acquisition of Staffmark Holdings, Inc. for nearly $300 million. 150% 140% 6.1% 2.2% Nearly of major U.S. cities had lower unemployment rates in January 2012 than the same month in the prior year. The U.S. unemployment rate has continued to decline over the past 18 months, reaching 8.3% in January 2012, reflecting stronger hiring levels nationwide. Select Private Equity M&A Transactions Close Date Target/Issuer Buyers/Investors Staffing Industry Implied Pending American Dental Partners, Inc. JLL Partners Staffing & Recruiting $390.0 1.4x 8.0x Jul-11 Red Commerce, Ltd. Dunedin Capital Partners, Ltd. Staffing & Recruiting $70.7 NA 8.0x 60% 50% HR & Outsourcing Index Staffing & Recruiting Index HR Technology Index 12.0% 10.0% U.S. Unemployment Rate 20.8% May-11 Employbridge Holdings Co., Inc. Morgan Stanley Capital Partners Staffing & Recruiting NA NA NA Dec-10 COMFORCE Corp. ABRY Partners, LLC Staffing & Recruiting $153.7 0.2x 9.0x Dec-10 Sterling Infosystems, Inc. Calera Capital HR Technology NA NA NA Dec-10 Eliassen Group Riverside Partners, LLC HR Technology NA NA NA Dec-10 Asperity Employee Benefits, Ltd. Inflexion Private Equity Partners, LLP HR & Outsourcing $39.8 NA NA Oct-10 Fieldglass, Inc. Madison Dearborn Partners HR Technology $201.0 NA NA 8.0% 6.0% 4.0% 8.3% Sep-10 Intelligence, Ltd. Kohlberg Kravis Roberts & Co. HR & Outsourcing $358.1 0.5x NA Sep-10 Hospitality Staffing Solutions, LLC Frontenac Co. Staffing & Recruiting $80.0 NA NA 2.0% Jul-10 Global Employment Solutions, Inc. Madison Capital Partners Staffing & Recruiting NA NA NA Jun-10 Insight Global, Inc. Harvest Partners Staffing & Recruiting NA NA NA. Bureau of Labor Statistics (seasonally adjusted). 0.0% Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 2
Human Capital Services Recent M&A Transactions Profiled SFN Group, Inc. (NYSE: SFN) SFN Group, Inc. operates as a strategic workforce solutions provider offering professional and staffing services, including temporary staffing, outsourcing and other permanent placement services across the U.S. and Canada. On August 29, 2011 SFN Group was strategically acquired by Randstad North America, Inc. for approximately $690 million in cash. Randstad provides staffing solutions, including temporary and permanent placement services, across the U.S. The offer represents a purchase price of $14.00 per share on a fully diluted basis, a 53% premium over the closing price of $9.17 per share on July 18, 2011, one day before SFN Group publicly announced the Merger Agreement with Randstad. Staffmark Holdings, Inc. Staffmark Holdings, Inc. provides various staffing services to small and middle-market companies, local firms and large corporations in the light industrial and clerical industries throughout the U.S. On October 17, 2011 Recruit Co., Ltd. acquired Staffmark Holdings from Compass Diversified Holdings (NYSE:CODI), a public investment firm, for total enterprise value of $295. Recruit Co. provides job information services through magazines, Internet and mobile communications in Japan. Transaction Details Financial Profile Transaction Analysis LTM Income Statement 6/30/2011 Purchase Price (Equity) $686.4 $2,089.0 Plus Net Debt ($3.9) Total Rights/Warrants/Options $49.7 $72.0 Net Income $26.6 Implied $740.1 As of Balance Sheet 6/30/2011 Implied Purchase Multiples Cash $10.7 0.4 x Debt $6.8 10.3 x Net Debt ($3.9) Net Income 25.8 x Transaction Details Financial Profile Transaction Analysis LTM Income Statement 3/31/2011 Purchase Price (Equity) $242.3 $1,031.9 $35.8 Plus Net Debt $52.7 Net Income $12.9 Implied $295.0 As of Balance Sheet 3/31/2011 Implied Purchase Multiples The proceeds from the transactions will be used to repay substantially all of the outstanding debt of Compass Diversified Holdings revolving credit facility. Cash $0.0 0.3 x Debt $52.7 8.2 x Net Debt $52.7 Net Income 18.8 x 3
Staffing & Recruiting ($ in millions, except share value) Public Company Analysis Closing Price % of 52 Equity / LTM LTM Margins LTM Company Ticker 2/23/12 Week High Gross Profit Gross Profit Adecco S.A. ADEN $50.72 69.6% $9,718 $11,281 $27,357 $4,747 $1,247 17.4% 4.6% 0.4x 9.0x Randstad Holding NV ENXTAM:RAND $37.00 68.4% $6,376 $8,069 $21,078 $3,842 $827 18.2% 3.9% 0.4x 9.8x Robert Half International, Inc. RHI $29.14 85.3% $4,132 $3,854 $3,777 $1,490 $301 39.4% 8.0% 1.0x 12.8x ManpowerGroup MAN $44.24 63.5% $3,663 $3,783 $22,006 $3,706 $629 16.8% 2.9% 0.2x 6.0x Team Health Holdings, Inc. TMH $21.02 87.1% $1,400 $1,810 $3,142 $1,727 $176 55.0% 5.6% 0.6x 10.3x Kforce, Inc. KFRC $14.22 73.9% $552 $602 $1,111 $346 $57 31.2% 5.2% 0.5x 10.5x TrueBlue, Inc. TBI $16.69 92.8% $706 $597 $1,316 $347 $64 26.4% 4.9% 0.5x 9.3x On Assignment, Inc. ASGN $13.75 95.9% $519 $594 $597 $200 $53 33.5% 8.9% 1.0x 11.2x Kelly Services, Inc. KELY.A $15.71 68.3% $578 $593 $5,551 $894 $92 16.1% 1.7% 0.1x 6.5x Korn/Ferry International KFY $16.36 66.0% $766 $548 $824 $241 $112 29.2% 13.6% 0.7x 4.9x Resources Connection, Inc. RECN $13.35 63.7% $608 $488 $566 $214 $39 37.7% 6.9% 0.9x 12.5x AMN Healthcare Services, Inc. AHS $5.49 58.8% $217 $451 $927 $264 $59 28.4% 6.3% 0.5x 7.7x CDI Corp. CDI $15.55 76.5% $297 $301 $1,040 $221 $31 21.3% 3.0% 0.3x 9.8x Heidrick & Struggles International, Inc. HSII $21.72 72.3% $385 $251 $553 $158 $36 28.6% 6.6% 0.5x 6.9x Cross Country Healthcare, Inc. CCRN $5.83 62.6% $182 $211 $493 $136 $21 27.6% 4.3% 0.4x 10.1x Hudson Highland Group, Inc. HHGP $4.71 66.2% $150 $135 $930 $353 $20 37.9% 2.2% 0.1x 6.6x Average 29.0% 5.5% 0.5x 9.0x Median 28.5% 5.0% 0.5x 9.5x Select M&A Transactions Staffing & Recruiting Closed Date Target Buyer Pending Trustaff, Inc. Medical Connections Holdings, Inc. $26.7 0.6x NA Pending Actief Interim NV Gilde Equity Management Benelux B.V. $154.9 0.8x NA Dec-11 International Plant Services, LLC Global NuTech, Inc. $13.2 NA NA Dec-11 Advantage Resourcing Recruit Co., Ltd. $410.0 NA NA Nov-11 TS Staffing Services, Inc. Corporate Resource Services, Inc. $64.1 0.4x NA 20.8% 60% 50% 40% Oct-11 Allied Healthcare International, Inc. Saga Group, Ltd. $140.4 0.5x 7.7x Oct-11 Staffmark Holdings, Inc. Recruit Co., Ltd. $295.0 0.3x 8.2x Aug-11 Healthcare Partners, Inc. VISTA Staffing Solutions, Inc. $18.7 NA NA Jul-11 Red Commerce, Ltd. Dunedin Capital Partners, Ltd. $70.7 NA NA Jun-11 Contract Connections, Ltd. Interquest Group, plc $7.4 0.5x NA Jun-11 REACH HR Manpower Group (NYSE:MAN) NA NA NA Jun-11 A-1 Staffing & Recruiting Agency, Inc. TrueBlue, Inc. (NYSE:TBI) NA NA NA May-11 Team24, Ltd Capita, plc $42.7 0.8x NA Apr-11 Nederlandse Interim Groep B.V. DPA Group NV $53.5 NA NA Feb-11 Valesta, S.L. Lab Support NV $23.6 NA NA Feb-11 Wynnwith Group, Ltd. Morson Group plc $13.1 NA NA Staffing & Recruiting Index Jan-11 Diamond Staffing Services, Inc. Corporate Resource Services, Inc. $38.2 0.4x 12.8x Jan-11 Aston Carter Allegis Group, Inc. $89.0 NA NA 4
HR & Outsourcing ($ in millions, except share value) Public Company Analysis Closing Price % of 52 Equity / LTM LTM Margins LTM Company Ticker 2/23/12 Week High Gross Profit Gross Profit Automatic Data Processing, Inc. ADP $53.86 94.3% $26,755 $25,436 $10,350 $5,139 $2,199 49.7% 21.2% 2.5x 11.6x Paychex, Inc. PAYX $31.31 92.3% $11,359 $10,948 $2,163 $1,496 $925 69.2% 42.8% 5.1x 11.8x Towers Watson & Co. TW $63.94 95.0% $4,515 $4,275 $3,407 $1,097 $636 32.2% 18.7% 1.3x 6.7x Insperity, Inc. NSP $30.70 94.8% $783 $515 $1,976 $352 $73 17.8% 3.7% 0.3x 7.1x Barrett Business Services, Inc. BBSI $17.22 81.6% $175 $108 $315 $43 $5 1 1.7% 0.3x NM Average 36.5% 17.6% 1.9x 9.3x Median 32.2% 18.7% 1.3x 9.3x Select M&A Transactions HR & Outsourcing 6.1% Closed Date Target Buyer Pending Fullcast Marketing Co., Ltd. Tokyo Weld Co., Ltd. $17.5 0.2x NA Pending Stream Global Services, Inc. (AMEX:SGS) Trillium Capital, LLC $578.3 0.7x 8.3x Oct-11 PayFlex Systems USA, Inc. Aetna, Inc. (NYSE:AET) $202.0 NA NA Sep-11 Drake Beam Morin, Inc. Lee Hecht Harrison LLC $216.1 1.8x NA Aug-11 SFN Group, Inc. Randstad North America, LP $740.1 0.4x 10.3x Aug-11 Connextions, Inc. OptumHealth, Inc. $325.0 NA NA Jul-11 Jobpartners, plc Taleo Corp. $37.4 NA NA Jun-11 Versult Group, Inc. Ceridian Corp. NA NA NA Jun-11 Corporate Benefit Consultants, LLC Brown & Brown of Connecticut, Inc. $13.5 NA NA May-11 Decision HR USA, Inc. Bankers Employer Services, Inc. NA NA NA May-11 Advantec - HR Oasis Outsourcing, Inc. NA NA NA May-11 eplan Services, Inc. Paychex, Inc. $15.2 NA NA Apr-11 I.Q. BackOffice, LLC HRMall Inc. $12.5 NA NA HR & Outsourcing Index Apr-11 Blue Water Benefits, Inc. Arthur J Gallagher & Co. (NYSE:AJG) $13.0 NA NA Feb-11 Ross Human Directions, Ltd. Chandler Macleod Group, Ltd. $66.8 0.2x 6.4x Feb-11 Code X, Inc. Stefanini IT Solutions $16.0 0.4x NA Feb-11 SurePayroll, Inc. Paychex, Inc. $114.9 NA NA 5
HR Technology ($ in millions, except share value) Public Company Analysis Closing Price % of 52 Equity / LTM LTM Margins LTM Company Ticker 2/23/12 Week High Gross Profit Gross Profit SuccessFactors, Inc. SFSF $40.00 98.9% $3,161 $2,913 $292 $197 ($27) 67.6% NM 10.0x NM Concur Technologies, Inc. CNQR $56.79 90.7% $3,060 $2,834 $370 $265 $42 71.6% 11.4% 7.7x 67.3x The Ultimate Software Group, Inc. ULTI $68.94 95.8% $1,917 $1,868 $269 $153 $28 56.8% 10.4% 6.9x 66.6x Taleo Corp. TLEO $45.68 99.7% $1,875 $1,759 $315 $217 $25 68.7% 7.9% 5.6x 70.4x 51job Inc. JOBS $45.00 64.5% $1,328 $1,028 $193 $136 $68 70.2% 35.3% 5.3x 15.1x Monster Worldwide, Inc. MWW $6.99 35.4% $866 $805 $1,040 $524 $139 50.4% 13.4% 0.8x 5.8x Kenexa Corp. KNXA $27.72 83.5% $708 $624 $283 $171 $33 60.4% 11.8% 2.2x 18.7x Dice Holdings, Inc. DHX $8.95 47.7% $627 $582 $179 $166 $73 92.7% 40.7% 3.2x 8.0x Saba Software, Inc. SABA $12.04 97.4% $342 $327 $121 $76 ($10) 62.9% NM 2.7x NM Average 66.8% 18.7% 4.9x 36.0x Median 67.6% 11.8% 5.3x 18.7x Select M&A Transactions HR Technology Closed Date Target Buyer 2.2% Pending ClearPoint Business Resources, Inc. Comvest Investment Partners $7.5 NA NA Pending VCG, LLC Bond International Software, plc $8.4 NA NA Pending Jobs DB, Inc. Consolidated Media Holdings, Ltd. $387.3 NA NA Feb-12 SuccessFactors, Inc. SAP America, Inc. $3,516.1 12.0x NA Dec-11 Jobs2Web, Inc. SuccessFactors, Inc. (NYSE:SFSF) $110.0 NA NA Sep-11 Worldwide Information, Inc Confidential NA NA NA Jul-11 GlobalExpense, Ltd. Concur Technologies, Inc. $23.0 NA NA Jul-11 OneNeck IT Services Cor. TDS Hosted & Managed Services, LLC $95.0 2.6x NA Jun-11 Jobpartners plc Taleo Corp. (Nasdaq:TLEO) $37.4 NA NA Apr-11 JobsCentral Pte, Ltd. CareerBuilder, Inc. NA NA NA 60% 50% HR Technology Index Apr-11 Cytiva Software, Inc. Taleo Corp. (Nasdaq:TLEO) $11.6 1.7x NA Mar-11 Jambok, Inc. SuccessFactors, Inc. $9.8 NA NA Jan-11 PreVisor, Inc. SHL Group, Ltd. NA NA NA Jan-11 HumanConcepts, LLC Administaff, Inc. $12.0 NA NA Jan-11 Patni Computer Systems, Ltd. Igate Corp. (Nasdaq:IGTE) $1,390.7 2.0x 10.0x 6
Integrity Expertise Results Recent Transactions John Hill hill@hydeparkcapital.com (813) 383-0205 John McDonald mcdonald@hydeparkcapital.com (813) 383-0206 has been acquired by has been recapitalized by Harbert Mezzanine Partners has been acquired by has been acquired by has acquired ADG Acquisition Holdings, LLC Keith Hodgdon Senior Vice President hodgdon@hydeparkcapital.com (813) 383-0208 Jeffrey Bridge Vice President bridge@hydeparkcapital.com (813) 383-0204 has been acquired by has been acquired by has been acquired by has been recapitalized by has merged with Michael Mariani Associate mariani@hydeparkcapital.com (813) 597-2649 has been recapitalized by has acquired has been recapitalized by has been acquired by has been acquired by Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL 33602 Tel: 813-383-0202 www.hydeparkcapital.com Member FINRA/SIPC Sage Compliance Services, Inc.