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HUMAN CAPITAL MANAGEMENT TECHNOLOGY MARKET UPDATE HUMAN CAPITAL MANAGEMENT (HCM) TECHNOLOGY INDUSTRY OVERVIEW The second quarter of 2018 featured 26 M&A transactions in the HCM technology space the most in a quarter in recent memory. Notable deals included Recruit s purchase of Glassdoor, Workday s pending acquisition of Adaptive Insights, PeopleFluent s sale to Learning Technologies Group, the pending merger between HireRight and GIS, and the pending acquisition of Conduent s HR consulting and actuarial business HIG Capital. The tight labor market is driving strong demand for HCM technology solutions. In particular, employers are prioritizing talent acquisition and management tools that increase connectivity with contingent workers and help identify internal and known talent, as well as learning management systems. In terms of workforce management, employers are focused on productivity and collaboration enhancers, automated risk management and compliance tools, and verticalspecific platforms. HARRIS WILLIAMS & CO. MARKET ANALYSIS: GLOBAL HEALTH AND WELLNESS One of the key ways employers are seeking to attract and retain the best workforces is boosting their health and wellness. Indeed, health and wellness is a $220+ billion opportunity, providing growth potential across technology, healthcare and consumer industries. See the factors driving growth, three essential practices for success, and recent transactions in the space. KEY CONTACTS HCM TECHNOLOGY Erik Szyndlar Director eszyndlar@harriswilliams.com +1 (415) 217-3418 UNITED STATES Jeff Bistrong jbistrong@harriswilliams.com +1 (617) 654-2102 Mike Wilkins mwilkins@harriswilliams.com +1 (415) 217-3411 Sam Hendler shendler@harriswilliams.com +1 (617) 654-2117 Tyler Dewing tdewing@harriswilliams.com +1 (617) 654-2133 EUROPE Thierry Monjauze tmonjauze@harriswilliams.com +44 (0) 20 7518 8901 TO SUBSCRIBE PLEASE EMAIL: tmt_reader@harriswilliams.com PAGE 1
HCM TECHNOLOGY ACQUISITION ACTIVITY (1)(2) KEY STRATEGIC ACQUIRERS OF HCM TECHNOLOGY ASSETS BY VOLUME The key strategic acquirers have combined for 33 HCM technology related acquisitions since 2015, but three of them (IBM, Oracle and Ultimate) have not completed a HCM acquisition since 2016 Key acquirers announced or completed three transactions in Q2: Workday / Adaptive Insights, SAP / Coresystems, and Workday / Rallyteam # of Transactions 3 2 4 6 1 3 4 2 8 2018 2017 2016 2015 GLOBAL HCM TECHNOLOGY M&A ACTIVITY HCM M&A experienced another breakout quarter with 26 transactions, setting the record for quarterly activity in recent times HCM technology companies remain highly attractive to both strategic and financial acquirers Deal volume is robust supported tuck in acquisitions and platform building # of Transactions 45 43 16 12 7 55 20 49 6 45 12 59 21 51 57 12 12 59 14 49 11 51 51 14 12 54 17 69 26 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Deals 4Q Trailing Average PAGE 2
SELECT HCM TECHNOLOGY M&A TRANSACTIONS Q2 2018 (2)(3)(4) Ent. Value: $1.2b Revenue: $171m Closed June 21, 2018 EV / Rev: 7.0x EV / EBITDA: NM Recruit has acquired Glassdoor Glassdoor is a leading job and recruiting company well known for providing greater workplace transparency. The Company s unique platform aims to allow applicants to directly access employee reviews of potential employers. Recruit Holdings intends to operate Glassdoor as an independent entity and provide the resources required to continue growing the organization. Announced June 11, 2018 Ent. Value: $1.6b Revenue: $114m EV / Rev: 13.9x EV / EBITDA: Not Public Workday has announced its pending acquisition of Adaptive Insights Adaptive Insights provides a leading cloud-based platform for modernizing business planning. The Company s Business Planning Cloud platform enables organizations of all sizes to adapt to changing business conditions with confidence and agility. The combination of Adaptive Insights Business Planning Cloud and Workday accelerates the goal to drive holistic business planning and digital transformation for customers. Ent. Value: $150m Revenue: $107m Ent. Value: Not Public Revenue: Not Public Ent. Value: Not Public Revenue: $278m Closed May 31, 2018 EV / Rev: 1.4x EV / EBITDA: Not Public Announced May 25, 2018 EV / Rev: Not Public EV / EBITDA: Not Public Announced April 30, 2018 EV / Rev: Not Public EV / EBITDA: Not Public Learning Technologies Group has acquired PeopleFluent PeopleFluent is a leading independent provider of cloud-based integrated recruiting, talent management and compensation management solutions. By deeply integrating video, strategic analytics, and collaborative social technologies into its suite of Talent Management applications, the Company redefines employee engagement to boost productivity and improve financial results. Learning Technologies Group will extend its product line with the addition of PeopleFluent s recruiting, compensation, performance, and succession offerings. HireRight and GIS have announced a pending merger HireRight provides employment background checks, drug testing, employment and education verification, and electronic onboarding and compliance solutions through an innovative platform to help companies hire the right candidates. As an NAPBS-accredited employment background screening company, GIS helps companies mitigate risk and hire smarter. The Company provides comprehensive national and international background checks, as well as industry-specific services. The merger accelerates a united strategy building upon HireRight s strong integration into over 25 applicant tracking systems and GIS investments in additional research and development to enhance product offerings and operational efficiency. HIG Capital has announced its pending acquisition of Conduent s HR consulting and actuarial business Conduent is selling its consulting and actuarial business, formerly Buck Consultants, which focuses on advisory, technology, and administration solutions to help clients manage their talent management programs. The Company is selling these assets as part of a plan to divest up to $500 million in revenue in 2018 associated with non-core assets in order to sharpen the focus of the Company going forward. HIG Capital has acquired the assets in order to augment its existing portfolio of companies in the HR consulting and actuarial space. PAGE 3
RECENT HCM SOFTWARE TRANSACTIONS (1)(2) ($ in millions) HCM Technology Date Enterprise LTM Financials LTM Multiples Closed Target Acquirer Value Revenue EBITDA Revenue EBITDA Pending Adaptive Insights, Inc. Workday, Inc. $1,585 $114 NA 13.9x NA Pending HireRight General Information Services, Inc. Non-Public NAInformation Pending Pen-Cal Administrators, Inc. Voya Financial, Inc. Non-Public NAInformation Pending Conduent, Inc. /HR & Actuarial Business H.I.G. Capital LLC NA $278 NA 06/21/2018 Glassdoor, Inc. Recruit Holdings Co., Ltd. $1,200 $171 NA 7.0x NA 06/20/2018 Pathgather, Inc. Degreed, Inc. Non-Public NAInformation 06/14/2018 insightsoftware.com Ltd. TA Associates Management LP NA $12 NA 06/08/2018 Hyperfish, Inc. LiveTiles Ltd. $9 06/08/2018 Rallyteam, Inc. Workday, Inc. Non-Public NAInformation 06/05/2018 Coresystems AG SAP SE Non-Public NAInformation 06/04/2018 EMS LLC Accruent LLC Non-Public NAInformation 05/31/2018 PeopleFluent, Inc. Learning Technologies Group Plc $150 $107 NA 1.4x NA 05/22/2018 RedBrick Health / Virgin Pulse, Inc. Marlin Equity Partners Non-Public NAInformation 05/14/2018 Professional Development Associates, Inc. TransForce, Inc. Non-Public NAInformation 05/03/2018 Select International, Inc. PSI Services LLC Non-Public NAInformation 05/01/2018 CEB, Inc. /Workforce Surveys & Analytics/ CultureIQ, Inc. Non-Public NAInformation 04/30/2018 Motion Recruitment Partners LLC Littlejohn & Co., LLC Non-Public NAInformation 04/24/2018 Convergence Training Vector Solutions, Inc. Non-Public NAInformation 04/23/2018 TMP Worldwide Advertising & Communications LLC Gemspring Capital Non-Public NAInformation 04/09/2018 OccupEye Ltd. Asure, Inc. Non-Public NAInformation 04/09/2018 Phillips DiPisa & Associates, Inc. AMN Healthcare Services, Inc. $30 $23 $5 1.3x 6.5x 04/05/2018 Callidus, Inc. SAP SE $2,242 $253 NM 8.9x NM 04/03/2018 CEB Talent Assessment Exponent Private Equity LLP $400 NA $38 NA 10.5x 04/02/2018 ECS Federal LLC On Assignment, Inc. $775 $586 $68 1.3x 11.5x 04/02/2018 U.S. Retirement Partners, Inc. Kohlberg & Co. LLC Non-Public NAInformation 04/02/2018 Austin HR LLC Asure, Inc. $6 Median $400 $143 $38 4.2x 10.5x Multiples less than 0.0x or greater than 30.0x are deemed NM or Not Meaningful PAGE 4
SELECT RECENT HCM PRIVATE PLACEMENTS (1)(2)(3) FINANCING SPOTLIGHT TRANSACTION Announced April 12, 2018 Round: C Round Size: $100m Total Raised: $149m Checkr raises $100m T. Rowe Price, Y Combinator, and Accel Checkr provides modern and compliant background checks for global enterprises and startups through automating the background check process. Founded in 2014, Checkr s latest round of funding was led new investor T. Rowe Price with participation existing investors Accel and Y Combinator. Checkr plans to use the additional funding to accelerate enterprise expansion as the Company looks to help enterprises utilize technology to understand the demands of the changing workforce and build a better future for workers. DATE COMPANY Stage ROUND SIZE ($M) TOTAL RAISED ($M) INVESTORS (CURRENT ROUND) DESCRIPTION 06/26/18 Later $11 $14 Activate Capital Partners, Home Depot, Bialla Venture Partners, Florida Funders, FAN Fund, Engage Ventures Provider of an on-demand property maintenance platform intended to provide instant access to handymen, electrical, HVAC, and plumbing services. 06/20/18 Later $30 $133 Investment Management Corp of Ontario Provider of marketplace for recruiting software engineers. 06/07/18 Later $20 $29 Bain Capital Ventures 05/29/18 Later $12 $38 Arrowroot Capital 05/28/18 Early $22 $34 AXA Venture Partners 05/28/18 Later $13 $15 Daphni, Kima Ventures, Otium, TheFamily 05/22/18 Early $10 $10 05/04/18 Early $10 $20 Undisclosed Atomic Labs, Cherubic Ventures, Craft Ventures, Thiel Capital Developer of employee scheduling software intended to help people track timesheets. Facilitates employee interaction and engagement via its workforce communication application. Provider of a talent relationship marketing platform to help people find jobs. Provider of an online resource to help companies attract freelance workers. Provider of an online platform that helps companies source and hire engineers abroad. Developer of a talent acquisition system which offers recruitment services, user training, rotation programs, talent watch services, and competitor build services. 04/17/18 Early $13 $21 Base10 Partners, Persol Holdings Company, Sequoia Capital Operates an on-demand staffing platform intended to connect companies with temporary workers. 04/05/18 Later $117 $356 Everyday Health, Emergence Capital Partners, Developer of a SaaS consumer health enterprise platform designed to Flare Capital Partners, Ziff Davis, NF Trinity Capital, drive audience engagement in healthy activities. ITOCHU Corp 04/03/18 Early $107 (1) $160 NextGen, Reciprocal Ventures, 500 Startups, SVB, Cantos Ventures Ranch.vc Developer of an independent contractor management platform designed to empower freelancers with the financial services they need to thrive. (1) $107 million round size includes $102 million in debt financing led Route 66. Note: Financial information presented above represents reported capital raised only. PAGE 5
HCM TECHNOLOGY MARKET OBSERVATIONS (1)(2)(3)(4) TALENT ACQUISITION AND MANAGEMENT Select Market Participants WORKFORCE MANAGEMENT Select Market Participants Transaction Spotlight Closed May 1, 2018 Enterprise Value: Not Public Revenue Multiple: Not Public Observations Employee recruitment, engagement, and retention remain top of mind - especially as job market tightens Data-driven / market place tools are increasing connectivity for both enterprises and their contingent / on-demand workers Talent tools adopting machine learning, predictive analytics, assessment algorithms, and artificial intelligence Identification and recruitment of internal and known talent are corporate strategic initiatives Learning management systems and corporate learning, training and compliance content increasingly core to HR suite In The News Pluralsight Pops as Trading Begins; IPO Raises $310.5 Million Two Facebook and Google Geniuses are Combining Search and AI to Transform HR Degreed Moves Further into the Workplace Learning Market Transaction Spotlight Closed May 22, 2018 Enterprise Value: Not Public Revenue Multiple: Not Public Observations Workforce as a Strategy is increasingly driving companies to adopt data-driven technologies that remove friction the employee journey Benefits and payroll solutions are fundamental to employee / employer connectivity with engagement and wellness proliferating HRIS automation is table-stakes as employers now shifting focus to productivity and collaboration enhancers Automated and comprehensive risk management / compliance tools continue to experience strong adoption Back office HR Capabilities for on-demand labor market is an emerging market opportunity Leading vertical-specific platforms remain highly attractive to investors and acquirers (e.g., retail, healthcare, and hospitality) In The News Maker Ceridian Tops IPO Range to get $462 Million Workplace Facebook Partners with ADP and Paychex Disrupting the Paycheck, Gusto s Flexible Pay Allows Employees to Pick when Paid PAGE 6
Diversified Platforms Benefits Technology HR HUMAN CAPITAL MANAGEMENT TECHNOLOGY SECTOR REVIEW HCM TECHNOLOGY MARKET VALUATION (1)(2) Key Public Comps EV/2018P REV 8.0x TEV/NTM REV 6.0x 0.8x 7.0x 10.7x 4.0x 2.0x Key Public Comps EV/2018P REV 8.0x TEV/NTM REV 6.0x 1.8x 3.5x 16.4x 4.0x 2.0x Key Public Comps EV/2018P REV 8.0x TEV/NTM REV 4.4x 4.9x 6.2x 6.0x 4.0x Legend Min Median Max 2.0x (1) As of June 29 th, 2018 PAGE 7
PUBLIC COMPARABLES ANALYSIS (1)(2)(5) OPERATIONAL AND VALUATION METRICS OF PUBLIC COMPARABLES As of June 30th, 2018 Multiples Summary ($ in 000s) Market Enterprise Revenue LTM EBITDA Margin Revenue EBITDA Company Capitalization Value LTM 2018P Gross Margin LTM 2018P 2017 2018P 2017 2018P HR Automatic Data Processing, Inc. $59,197,348 $59,235,250 $13,072,100 $13,765,465 45.0% 21.5% 22.3% 4.8x 4.3x 22.6x 19.3x Paychex, Inc. 24,552,010 24,143,340 3,380,900 3,509,771 68.8% 42.2% 42.0% 7.1x 6.9x 16.6x 16.4x Workday, Inc. Class A 26,094,425 23,691,250 2,281,674 2,650,133 70.6% NM 18.6% 11.1x 8.9x NM NM Ultimate Group, Inc. 7,884,635 7,792,234 988,993 1,117,647 62.7% 10.0% 25.0% 8.3x 7.0x 34.4x 27.9x Ceridian HCM Holding, Inc. 4,545,375 5,939,481 772,600 733,200 42.6% 15.0% 20.5% 8.9x 8.1x NM NM Paycom, Inc. 5,848,418 5,842,767 467,455 546,793 80.9% 24.0% 40.7% 13.5x 10.7x 31.5x 26.3x Paylocity Holding Corp. 3,102,841 3,126,045 356,972 414,857 59.8% 12.5% 22.1% 10.4x 7.5x NM 34.1x Cornerstone OnDemand, Inc. 2,738,687 2,655,535 503,516 510,016 71.0% NM 16.4% 5.5x 5.2x NM 31.7x Pluralsight, Inc. 3,232,085 1,990,322 179,229 216,076 69.3% NM NM 11.9x 9.2x NM NM Asure, Inc. 239,652 294,878 63,019 90,996 66.7% 16.9% 22.9% 5.4x 3.2x 25.6x 14.1x DHI Group, Inc. 120,212 133,932 198,831 163,239 80.2% 15.3% 20.3% 0.6x 0.8x 3.2x 4.0x Median $4,545,375 $5,842,767 $503,516 $546,793 68.8% 16.1% 22.2% 8.3x 7.0x 24.1x 22.8x Benefits Technology HealthEquity Inc $4,663,378 $4,560,661 $244,008 $278,005 57.5% 31.2% 38.6% 19.9x 16.4x NM NM WageWorks, Inc. 1,981,850 1,369,332 461,689 513,912 57.4% 24.7% 31.6% 2.9x 2.7x 9.4x 8.4x Benefitfocus, Inc. 1,066,409 1,131,668 261,475 255,267 52.8% NM 3.3% 4.4x 4.4x NM NM Castlight Health, Inc. Class B 573,600 280,643 140,205 153,651 61.4% NM NM 2.1x 1.8x NM NM Median $1,524,130 $1,250,500 $252,742 $266,636 57.4% 27.9% 31.6% 3.6x 3.5x 9.4x 8.4x Diversified Platforms Microsoft Corporation $759,676,250 $717,940,220 $98,980,000 $115,128,824 62.6% 42.3% 41.6% 7.4x 6.2x 18.9x 15.0x Oracle Corporation 175,807,813 179,649,920 39,831,000 40,452,664 75.6% 42.9% 46.9% 4.5x 4.4x 9.7x 9.5x SAP SE 141,927,953 137,480,985 27,295,439 28,166,006 67.8% 23.2% 32.1% 4.7x 4.9x 15.5x 15.2x Median $175,807,813 $179,649,920 $39,831,000 $40,452,664 67.8% 42.3% 41.6% 4.7x 4.9x 15.5x 15.0x Values less than 0.0x or greater than 30.0x are denoted NM or Not Meaningful EBITDA Margins less than 0.0% are noted NM or Not Meaningful PAGE 8
Focused Solutions Platforms HUMAN CAPITAL MANAGEMENT TECHNOLOGY SECTOR REVIEW HCM TECHNOLOGY TAXONOMY ERP-Focused Platforms HCM-Focused Platforms Talent Acquisition Sourcing Talent Management Training & Learning Workforce Management Payroll & Benefits Recruiting & Assessments Screening & Onboarding To receive the latest Human Capital Management Technology market Performance map, please & contact HW&Co. at tmt_reader@harriswilliams.com Succession Engagement & Wellbeing Rewards & Recognition Time & Attendance Workplace Management Vendor & Supply Chain GRC & EHS PAGE 9
STRONG TRANSACTION EXPERIENCE IN HCM TECHNOLOGY HW&CO. HCM TECHNOLOGY TRANSACTION EXPERIENCE has received a majority investment has made a majority investment in has been has acquired a majority stake in ERP, HR and Payroll Workforce Management Workforce Management Workplace Compliance and Training Solutions Employee Benefits Management ERP, HR and Payroll Healthcare Information Systems, HR and Payroll and has been recapitalized HR Compliance and Learning Management Solutions Post Acute Compliance and Learning Management Corporate Grant Management and Employee Engagement Commercial Talent Payroll Benefit Management Solutions Talent Sourcing and Acquisition Solutions Talent Acquisition Talent Management Workforce Management PAGE 10
HW&CO. S TMT GROUP: M&A ADVISOR OF CHOICE FOR MARKET LEADING TECHNOLOGY COMPANIES The Identity and Access Management Business of a wholly-owned affiliate of invested in strategic investment investment acquired merged with investment a wholly-owned affiliate of Undisclosed Investors Undisclosed Investors acquired investment acquired majority investment growth Investment majority investment Undisclosed Strategic Buyer B2C majority investment recapitalized acquired recapitalized acquired a majority stake in majority investment minority investment merged with strategic investment significant equity investment merged with recapitalized management majority recapitalization recapitalized significant equity investment acquired significant equity investment and GFI Energy Group a division of minority investment minority investment strategic investment and and PAGE 11
HARRIS WILLIAMS & CO. OVERVIEW HARRIS WILLIAMS & CO. (HW&CO.) GLOBAL ADVISORY PLATFORM KEY FACTS Over 130 transactions closed in the past 24 months Approximately 275 professionals across eight offices in the U.S. and Europe 10 industry groups 2017 Investment Bank of the Year Mergers & Acquisitions, HW&CO. TECHNOLOGY, MEDIA & TELECOM (TMT) GROUP FOCUS AREAS Enterprise Infrastructure Data & Analytics Education Technology Engineered Solutions 2016 PE Investment Bank of the Year Global M&A Network SOFTWARE / SAAS Deal of the Year Buyouts Magazine Data Center & Managed Services IT & Tech-Enabled Services Financial Technology Healthcare IT Deal of the Year Global M&A Network TMT VERTICAL FOCUS AREAS Consumer Internet Digital Media & Content Human Capital Management Professional Services HW&Co. Office INTERNET & DIGITAL MEDIA ecommerce Online Marketing Public Sector & Non-Profit Supply Chain, Transportation, & Logistics KEY CONTACTS HCM TECHNOLOGY Erik Szyndlar Director eszyndlar@harriswilliams.com +1 (415) 217-3418 UNITED STATES Jeff Bistrong jbistrong@harriswilliams.com +1 (617) 654-2102 Mike Wilkins mwilkins@harriswilliams.com +1 (415) 217-3411 Sam Hendler shendler@harriswilliams.com +1 (617) 654-2117 Tyler Dewing tdewing@harriswilliams.com +1 (617) 654-2133 EUROPE Thierry Monjauze tmonjauze@harriswilliams.com +44 (0) 20 7518 8901 TO SUBSCRIBE PLEASE EMAIL: tmt_reader@harriswilliams.com SELECT RECENT HW&CO. TMT TRANSACTIONS a wholly-owned affiliate of invested in strategic investment investment acquired merged with Undisclosed Investors Undisclosed Investors www.harriswilliams.com PAGE 12
OUR FIRM Harris Williams & Co. has a broad range of industry expertise, which create powerful opportunities. Our clients benefit form our deep-sector experience, integrated industry intelligence and collaboration across the firm, and our commitment to learning what makes them unique. For more information, visit our website at www.harriswilliams.com/industries. Aerospace, Defense & Government Services Building Products & Materials Business Services Consumer Energy, Power & Infrastructure Healthcare & Life Sciences Industrials Specialty Distribution Technology, Media & Telecom Transportation & Logistics HARRIS WILLIAMS & CO. OFFICE LOCATIONS Boston One International Place Suite 2620 Boston, Massachusetts 02110 Phone: +1 (617) 482-7501 Cleveland 1900 East 9th Street 20th Floor Cleveland, Ohio 44114 Phone: +1 (216) 689-2400 UNITED STATES Richmond (Headquarters) 1001 Haxall Point 9th Floor Richmond, Virginia 23219 Phone: +1 (804) 648-0072 San Francisco 575 Market Street 31st Floor San Francisco, California 94105 Phone: +1 (415) 288-4260 EUROPE Frankfurt Bockenheimer Landstrasse 33-35 60325 Frankfurt Germany Phone: +49 069 3650638 00 London 63 Brook Street London W1K 4HS, England Phone: +44 (0) 20 7518 8900 Minneapolis 222 South 9th Street Suite 3350 Minneapolis, Minnesota 55402 Phone: +1 (612) 359-2700 Washington, D.C. 800 17th St. NW 2nd Floor Washington, D.C. 20006 Phone: +1 202-207-2300 Beijing NETWORK OFFICES New Delhi Hong Kong Shanghai Mumbai PAGE 13
HARRIS WILLIAMS & CO. HUMAN CAPITAL MANAGEMENT TECHNOLOGY SECTOR REVIEW SOURCES 1) FactSet 2) PitchBook 3) Mergermarket 4) BusinessWire 5) HW&Co. proprietary transaction information DISCLOSURES Harris Williams & Co. (www.harriswilliams.com) is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services. Investment banking services are provided Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 07078852). Harris Williams & Co. Ltd is authorized and regulated the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business. THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS AND COPYRIGHTS OWNED BY THIRD-PARTY INFORMATION PROVIDERS. NONE OF THE THIRD- PARTY INFORMATION PROVIDERS IS ENDORSING THE OFFERING OF, AND SHALL NOT IN ANY WAY BE DEEMED AN ISSUER OR UNDERWRITER OF, THE SECURITIES, FINANCIAL INSTRUMENTS OR OTHER INVESTMENTS DISCUSSED IN THIS REPORT, AND SHALL NOT HAVE ANY LIABILITY OR RESPONSIBILITY FOR ANY STATEMENTS MADE IN THE REPORT OR FOR ANY FINANCIAL STATEMENTS, FINANCIAL PROJECTIONS OR OTHER FINANCIAL INFORMATION CONTAINED OR ATTACHED AS AN EXHIBIT TO THE REPORT. FOR MORE INFORMATION ABOUT THE MATERIALS PROVIDED BY SUCH THIRD PARTIES, PLEASE CONTACT US AT THE ABOVE ADDRESSES OR NUMBERS. The information and views contained in this report were prepared Harris Williams & Co. ( Harris Williams ). It is not a research report, as such term is defined applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. The information contained herein is believed Harris Williams to be reliable, but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams judgment and are subject to change without notice. The financial instruments discussed in this report may not be suitable for all investors, and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or any means, or redistributed, without Harris Williams prior written consent. Copyright 2019 Harris Williams & Co., all rights reserved. PAGE 14