Capstone Headwaters

3January 2019www.capstoneheadwaters.com

Sources: Capital IQ , Pitchbook, FactSet, and CSHW Research

Capstone Headwaters

As technology continues to drive rapid transformation throughout a wide

spectrum of industries, operators are embracing new ways to work and

businesses are looking for ways to adapt their approach to talent. The evolution

of the employment environment requires the Human Resources (HR) & Staffing

industry to adapt as there is an increased need to deliver optimal solutions to

corporate clients and individuals seeking employment. Additionally, with the US

economy operating at or close to full employment, the HR & Staffing industry

has experienced accelerated demand for comprehensive solutions.

During 2018, Capstone Headwaters identified a corresponding uptick in merger

and acquisition (M&A) activity as operators pursued acquisitive growth

strategies to address operational needs. With 202 transactions announced or

closed, there was a continuance of strong M&A activity seen over the past

several years. Professional staffing companies (including IT, healthcare & life

sciences, engineering and finance) continue to see the most widespread

demand from buyers and investors. From a general standpoint, buyers have

desired companies with a strong blend of both recurring revenue growth and

profitability, with significant attention paid to customer diversification and the

gross margin impact of potential acquisitions. Additionally, proven management

teams desiring to stay on post-transaction remain highly sought after.

TABLE OF CONTENTS

M&A Overview

Employment Environment

Segment Highlight

Notable Transactions

Select Transactions

Public Company Data

Firm Track Record

HUMAN RESOURCES &

STAFFING SERVICES

Q1 2019MERGER & ACQUISITION OVERVIEW

133

182159 153

164

202

0

30

60

90

120

150

180

210

2013 2014 2015 2016 2017 2018

M&A Activity: HR & Staffing

Nu

mb

er

of

Tra

nsa

ctio

ns

CONTRIBUTORS

John Ferrara

Founder & CEO

617-619-3325

[email protected]

Todd McMahon

Managing Director

617-619-3334

[email protected]

Bob Balaban

Managing Director

303-792-9400

[email protected]

Chad Gardiner

Senior Vice President

720-465-8888

[email protected]

3.0%

3.5%

4.0%

4.5%

5.0%

According to the Bureau of Labor Statistics (BLS), the US

unemployment rate was 3.9% in December, a slight

increase from the 10-year low of 3.7% sustained from

September through November.1 High levels of the

workforce employment has resulted in a scarcity of talent.

This need has driven demand for staffing solutions.

Buyers look positively on this trend, as it enables

strategics to augment slower organic growth and private

equity buyers to invest in a stable industry. Additionally,

comprehensive HR solutions play a pivotal role in

recruiting and retaining employees. Operators that

equipped with a sophisticated suite of comprehensive HR

solutions are better suited to retain talent in an

increasingly competitive employment environment.

For the eighth consecutive month, the number of

unemployed civilians was less than the total number of

job openings in the US during November 2018, according

to the BLS. When the ratio of unemployed workers to job

openings dropped below one in April 2018, it was the first

time of such an occurrence since the Labor Department

began collecting data in 2000.2 Further, according to

Federal Reserve data, the amount of time it takes for the

median unemployed person to find their next job is nearly

10 weeks. One reason for the shortfall is that companies

are having trouble finding workers with the exact

qualifications needed. Moving forward, these

unemployment dynamics are expected to serve as a

catalyst for Staffing industry growth moving and the

corresponding M&A activity that will follow.

MERGER & ACQUSITION OVERVIEW (CONTINUED)

UNEMPLOYMENT IN DECEMBER: A

SLIGHT INCREASE FROM HISTORIC LOW3.9%

Human Resources & Staffing Services | Q1 2019

Source: US Bureau of Labor Statistics

WEEKS FOR MEDIAN DURATION OF

UNEMPLOYMENT DURING NOVEMBER9+

2

Un

em

plo

ym

en

t (%

)

4.0

5.0

6.0

7.0

8.0

9.0

Unemployed Job Openings

Nu

mb

er

in M

illio

ns

6.9 million

jobs

6.3 million

workers

EMPLOYMENT ENVIRONMENT

Strategic buyers accounted for 74.8% of deal activity.

Unlike years prior, this activity was largely driven by

lesser-known private companies, as opposed to public

operators who accounted for only 12 transactions in the

space. Strategic buyers have sought opportunistic

acquisitions that can provide new technologies, talent,

and enhancements to growth and profitability.

Meanwhile, private equity groups (PEGs) have also been

active in the space as target companies have, in some

instances, opted for a financial buyer to provide capital

for growth. From the PEG perspective, companies with

scale, excellent historical and projected growth rates, and

motivated management teams seeking to continue the

growth of their businesses are proving to be very

attractive investment platforms for many private equity

investors interested in the space.

5.9%

68.9%

9.9%

15.3%STRATEGIC

Public

Private

FINANCIAL

Direct

Add-on

Buyer Breakdown: HR & Staffing

Sources: Capital IQ , Pitchbook, FactSet, and CSHW Research

MARKET CONSOLIDATION

SEGMENT HIGHLIGHT: LEGAL STAFFING

The challenges that exist in today’s overall job market are

reflected by those that exist in the Legal industry. There is

a constant need for operators to improve processes, skills,

and cost structures, particularly amid an era of continuous

technological change and implementation. This,

compounded with the sophisticated and ever-evolving

nature of the Legal industry, has rendered an

environment of change and growth. In particular, the job

market for paralegals is experiencing significant growth

with the US Bureau of Labor Statistics estimating that

employment of paralegals and legal assistants will grow

15% from 2016 to 2026.

Staffing Industry Analysts (SIA) estimates that the top

eight firms in the industry each generated at least $25

million in revenue and together accounted for 50%

market share with approximately $500 million in revenue.

The three largest companies are Special Counsel, HCMC

Legal, Inc. (Hire Counsel and Mestel & Company), and

Beacon Hill Staffing Group.3


3

Date Target Acquirer Target Description

01/14/19 Omniver Driven Offers eDiscovery services.

12/28/18Kelly Legal

Managed

Trustpoint.

One

Provides employment solutions

for the legal community.

12/14/18Amstemps

Staffing

Hire

Dynamics

Provides professionals for legal

roles, among many others.

07/25/18Link Legal

SearchJurisolutions

Provides strategic executive

search solutions to law firms.

02/28/18JHill’s

Staffing

Marcum

Search

Provides executive recruiting

services for the legal industry.

01/29/18Update

LegalDriven

Provides legal recruiting and

placement services

Select Legal Staffing Transactions

Source: Capital IQ, Pitchbook and Capstone Headwaters Research

While the Legal Staffing sector has experienced relatively

less M&A activity in terms of volume than other areas of

the industry, the quality and importance of the deals has

been robust. In a recent wave of deal activity, the

segment has been reshaped by the acquisitions of

significant players in the space.

In late December 2018, Kelly Services (NasdaqGS: KELYA)

sold its legal staffing business unit to Trustpoint.One

(terms undisclosed). Branded as Kelly Legal Managed

Services, Kelly’s legal operations provides legal recruit and

staffing solutions to the legal community. Trustpoint.One

provides legal services including eDiscovery, managed

review, depositions and translations. This is

Trustpoint.One’s third recent acquisition; it acquired

Alderson Court Reporting and Confluent Translations

during the fourth quarter. With the Kelly acquisition, it

will now have about 150 legal staffing clients globally.

Already in 2019, the Legal segment has experience

significant activity with the acquisition of eDiscovery firm

Omnivere by Driven Inc., a legal eDiscovery and data

management solutions provider based in Falls Church,

Virginia (undisclosed). The newly-combined company

offers law firms and corporate counsel one provider for

software, services, consulting, and staffing across the

OVERVIEW

entire data lifecycle. This includes dynamic technology

and staffing solutions for information governance,

eDiscovery, managed services, and managed document

review. Commenting on the acquisition in the press

release, Driven CEO Ozzy Jimenez said, “The acquisition of

Omnivere further extends [Driven’s] geographical reach

and operational scale.”5 Last year, Driven acquired

Update Legal, the fourth-largest US legal staffing firm

As profitability becomes more

challenging to achieve, corporate

legal departments become

increasingly operationalized and

self-sufficient and competition

diversifies to incorporate alternate

service providers, there is mounting

pressure for law firms to keep pace.

When it comes to the business of

law, there are three keys to success:

innovation, strategic human capital

growth, and prioritization of talent

management.

“

”- Mary Rosenfeld D’Eramo, Vice President of Operations, Mestel

& Company, Legal Industry Snapshot Q3 2018 4

Paychex, Inc. acquires Oasis Outsourcing Holdings, Inc.

(Announced November 2018, $1.0 billion Enterprise Value, 6x NTM Revenue)

On December 20, 2018, Paychex closed its acquisition of Oasis for a purchase price of

approximately $1.0 billion, net of approximately $200.0 million in cash acquired. The acquisition

was financed through a combination of cash on hand of approximately $400.0 million and

temporary borrowings under existing credit facilities of approximately $800.0 million. The

Company is in the process of securing permanent financing for the acquisition.

It was noted in the In the Paychex 10Q: “[Paychex] anticipates that the acquisition of Oasis, will

have an incremental impact to total revenue in the range of $155 million to $175 million in fiscal

2019. Excluding one-time costs related to the acquisition.” 7

Founded in 1996 and headquartered in Florida, Oasis is the nation’s largest privately owned

professional employer organization (PEO) and an industry leader in providing human resources

outsourcing services. Serving more than 8,400 clients nationwide, it specializes in providing human

resources services, employee benefits administration, risk management services and staffing

solutions to small-and-medium-sized businesses.

“This acquisition reinforces Paychex's commitment to meet the HR technology and advisory needs

of [its] clients and their employees in ways that are transforming their experience, and accelerates

top-line growth,” commented Martin Mucci, President and CEO of Paychex in the press

release. “This acquisition will strengthen [Paychex’s] PEO growth strategy, gain scale for new

products with our insurance carrier partners, provide a new client base to offer Paychex retirement

and time and attendance products, and augment [its] experienced management team.” 8

Several notable transactions were announced or completed in the industry in 2018 and early 2019. Select transactions are

outlined below, followed by a more comprehensive list on the following pages.

Acquires

4

NOTABLE TRANSACTIONS

Kelly Services acquires Global Technology Associates and NextGen Resources

(Announced January 2019, undisclosed)

Kelly Services has acquired two companies: Global Technology Associates, LLC (GTA), a leading

provider of engineering, technology and business consulting solutions and services in the

telecommunication industry; and NextGen Global Resources, LLC (NextGen), a leading provider of

telecommunications, wireless and connected technology staffing solutions in the US. Both

companies provide services to the largest carriers and OEMs in the telecommunication industry,

and the acquisitions position Kelly as one of the largest engineering workforce solutions

companies in the fast-growing 5G technology space. Terms of the acquisitions were not disclosed.

The acquisitions expand Kelly’s presence in a niche engineering market, where there is tremendous

room for growth. It was noted in the press release that the telecommunication industry analysts

say $500 billion will be spent between now and 2025 preparing for the onset of 5G technology.

Both GTA and NextGen are positioned to capitalize on that growth.6

“Acquiring NextGen and GTA represent forward-looking investments in a relatively untapped

specialty market that’s primed for growth,” said George Corona, President and CEO of Kelly

Services. “Kelly is committed to being a specialty talent solutions and outcome-based services

provider, and both firms are deeply specialized, bringing together impressive pools of talented

engineers with strong technical, telecom and 5G expertise. Equally important, [Kelly’s] businesses’

core missions and values align: companies that put people at the heart of all we do, and we take

integrity and service excellence seriously.”

Acquires


&

Enterprise EV / LTM

Date Target Acquirer Target Business Description Value (mm) Revenue EBITDA

01/08/18 Bolder StaffingIntermountain

Staffing

Offers recruitment services and recruits for temporary,

temp-to-hire, payroll service, and direct hire positions.- - -

01/07/18 Payroll MaxxEvolution Payroll

Processing

Offers payroll solutions such as payroll processing, HR,

tax solutions, and workforce management services.$10.7 - -

12/28/18Kelly Legal

Managed ServicesTrustpoint.One

Provides employment solutions for the legal

community.- - -

12/20/18 CieloPermira

Advisers

Provides recruitment process outsourcing, and talent

acquisition and management solutions.- - -

12/17/18 ZRG PartnersRFE Investment

Partners

Provides senior level executive search and human

capital management services.- - -

12/13/18Management

Decisions

Motion Recruitment

Partners

Provides IT staffing services and contingent workforce

solutions that supplement in-house resources.- - -

12/17/18 JDC GroupConsulting Solutions

InternationalProvides IT executive search and placement services. - - -

11/26/18Oasis

OutsourcingPaychex

Operates as a professional employer organization that

provides workforce solutions for businesses$1,000.0 6.0x* -

11/20/18 Surge ResourcesGPB Capital

Holdings

Offers human resources services, such as workforce

management programs.- - -

10/29/18 Jensen Partners BuybackOperates as executive recruiters for sourcing capital

raising talent in the alternative investment industry.- - -

10/10/18AddisoinEmerson

Staffing SolutionsCloudteam Provides cable/telecom infrastructure staffing services. - - -

09/19/18Remedy Employer

ServicesCoAdvantage

Provides human resources, payroll administration,

employee benefits, and risk management solutions.- - -

08/28/18 Key ResourcesStaffing 360

SolutionsProvides staffing services. $12.2 0.3x -

08/22/18 REPCRUIT PeopleKeysOffers an online recruitment platform to enable to

replicate top performers and automate hiring process. - - -

08/15/18Pro-Touch

NursesW3global

Provides permanent and temporary nursing and allied

health professionals. - - -

08/09/18 HCS HealthcareHealthCare

Support Staffing

Provider of healthcare recruiting and employee staffing

services.

08/08/18Zogg Insurance

PEOG&A Partners

Provides professional employer organization (PEO) and

administration services in Texas.- - -

08/01/18 CelergoAutomatic Data

ProcessingProvides payroll management services. - - -

08/01/18Five Star

StaffingHIRE Strategies

Provides recruitment services for personnel in the

administrative and accounting profession. - - -

07/25/18Link Legal

SearchJurisolutions

Provides strategic executive search solutions to law

firms and in-house legal departments. - - -

07/20/18 3CiManagement

Analysis & Utilization

Provides information technology (IT) staffing services

for various organizations. - - -

07/19/18 HighGround YouEarnedItProvider of an employee engagement and

performance platform. - - -

07/17/18 charitySTRONGGovernance

MattersOffers recruitment services for board members. - - -

5

SELECT TRANSACTIONS

*NTM Revenue multiple

Source: Capital IQ, Pitchbook, FactSet, and Capstone Headwaters Research


Enterprise EV / LTM

Date Target Acquirer Target Business Description Value (mm) Revenue EBITDA

07/10/18 First Transitions Felix Global Provides career transition services in the US. - - -

07/10/18Accounts of

Platinum ColoradoG&A Partners

Comprises a PEO and human resource outsourcing

business. - - -

07/10/18 Synuity G&A Partners Provider of human resources outsourcing services. - - -

07/05/18Inkinen &

AssociatesHuliau Capital Provides executive search and consulting services. - - -

07/03/18 USA Payroll Asure Software Offers payroll products and services. $3.5 - -

07/02/18Employer

SolutionsINSURICA Operates as a professional employer organization. - - -

07/02/18Paramount

StaffingProman

Provider of recruitment services intended to serve

different staffing needs of clients.- - -

06/29/18 Rake FuseMachinesProvider of a talent acquisition and candidate

engagement platform.- - -

06/21/18Shape

AnalyticsReflektive

Provider of a real-time intelligence and predictive

analytics platform for employee data. - - -

06/21/18 GlassdoorRecruit

Holdings

Provider of an online job searching platform designed

to help people find jobs and companies they love.$1,200.0 7.0x

06/18/18Aequor

Healthcare

DW Healthcare

Partners

Personnel provider, specializes in staffing physicians,

therapists, nurses, technologist, and allied healthcare.CF CF CF

06/11/18 Aasonn RizingDeploys enterprise HR and talent management cloud-

based solutions.- - -

06/07/18 1st Solution USA Optomi Provides IT recruitment services to healthcare sector. - - -

04/09/18PDA & Leaders

For Today

AMN Healthcare

Services

Provide executive search and interim management

staffing to healthcare delivery organizations.$37.0 1.6x -

03/29/18 Asperia AscensusDesigns, administers, and consults third-party

administration services and retirement benefits plans. - - -

03/27/18 Avintus AscensusProvides payroll processing, retirement plan

administrative services, and HR outsourcing solutions. - - -

03/21/18 Anthology Randrr Developer of an anonymous job searching and

recruiting platform. - - -

03/21/18Smart Rhino

LabsRandall-Reilly Offers recruiting services in the trucking industry. - - -

03/07/18 Tempus Webster CapitalOperates as a healthcare staffing company that offers

temporary staffing services to hospitals. - - -

03/06/18The Frontier

Group of Georgia

Career

Management

Provides individual career transition solutions,

redeployment solutions, and executive coaching.- - -

02/28/18JHill's Staffing

ServicesMarcum Search Provides executive recruiting services for legal industry. - - -

02/22/18Cobb Pediatric

Speech ServiceStepping Stones

Provides job placement services for occupational

therapists, physical therapist, and school psychologists. - - -

02/20/18 Vettery AdeccoCreates an online hiring marketplace that helps people

to find jobs. ~$100.0 - -

Note: highlighted deals are Capstone Headwaters transactions; CF=confidential

Source: Capital IQ, Pitchbook, FactSet, and Capstone Headwaters Research

SELECT TRANSACTIONS (CONTINUED)

6


Price % 52 Wk Market Enterprise LTM EV / EBITDA

Company 02/08/19 High Cap Value Revenue EBITDA Margin LTM NTM

Heidrick & Struggles International $32.34 71.4% $613.1 $448.9 $700.1 $74.7 10.7% 6.0x 5.3x

Korn Ferry $45.83 66.4% $2,597.4 $2,437.7 $1,883.7 $265.6 14.1% 9.2x 7.7x

Mean 12.4% 7.6x 6.5x

Median 12.4% 7.6x 6.5x

Harmonic Mean 12.2% 7.3x 6.3x

PUBLIC COMPANY TRADING & OPERATING DATA: PROFESSIONAL & COMMERICAL

Source: Capital IQ as of February 8, 2019 7



Adecco Group AG $50.60 66.0% $8,390.7 $9,803.6 $27,648.4 $1,264.1 4.6% 7.8x 7.5x

ASNG Inc $62.86 66.7% $3,298.7 $4,412.0 $3,149.2 $345.2 11.0% 12.8x 10.0x

Kelly Services, Inc. $22.92 70.9% $887.7 $875.0 $5,521.5 $113.5 2.1% 7.7x 6.8x

Kforce Inc. $35.49 81.6% $878.0 $951.1 $1,418.4 $88.9 6.3% 10.7x 9.6x

ManpowerGroup Inc. $80.28 64.5% $4,963.8 $5,520.9 $21,991.2 $882.5 4.0% 6.3x 6.3x

Randstad Holding NV $49.68 73.5% $9,097.0 $10,718.0 $27,522.7 $1,090.9 4.0% 9.8x 8.0x

Resources Connection, Inc. $16.67 85.5% $528.9 $546.0 $723.6 $63.0 8.7% 8.7x 9.1x

Robert Half International Inc. $63.06 78.9% $7,527.7 $7,166.7 $5,800.3 $653.5 11.3% 11.0x 10.2x

TrueBlue, Inc. $24.71 82.8% $971.2 $1,004.2 $2,499.2 $115.0 4.6% 8.7x 8.1x

Mean 6.3% 9.3x 8.4x

Median 5.6% 8.7x 8.1x


EV = enterprise value; LTM = last twelve months

$ in millions, except per share data

NM = Not Meaningful




AMN Healthcare Services, Inc. $63.00 92.4% $2,952.7 $3,404.5 $2,116.5 $254.9 12.0% 13.4x 12.2x

Cross Country Healthcare, Inc. $9.83 71.6% $356.3 $419.5 $835.3 $34.0 4.1% 12.3x 11.4x

Mean 8.1% 12.8x 11.8x

Median 8.1% 12.8x 11.8x


PUBLIC COMPANY TRADING & OPERATING DATA: HEALTHCARE

PUBLIC COMPANY TRADING & OPERATING DATA: EXECUTIVE & RETAINED SEARCH

FIRM TRACK RECORD

8

has been acquired by has been acquired by has been acquired by

has been acquired byhas been acquired by

camdenvale

has been acquired by

has been acquired by has been acquired by

has been acquired byhas been acquired by

has been acquired by

CERTIFIED IT &

ITRICITY

FREEDOM DATA

has acquired

CERTIFIED I.T.

ITRICITY FREEDOM DATA

has acquired

ARIES GROUP INC.

valuation and

financial advisoryhas been acquired by

NORTHERN

HEALTHCARE CAPITAL

debt financing

has recapitalized with has recapitalized withhas recapitalized with

A PRIVATE

INVESTMENT GROUP

ONLINE PLATFORM

PROVIDING PERMANENT

PLACEMENT TO FINANCIAL

SERVICES

CONFIDENTIAL

corporate sale

(IN PROCESS)

SUPPLEMENTAL

STAFFING SERVICES

CONFIDENTIAL

corporate sale

(IN PROCESS)

has been acquired byhave been acquired by


PROVIDER OF OIL AND

GAS STAFFING SERVICES

CONFIDENTIAL

buy-side engagement

(IN PROCESS)has been acquired by has recapitalized with

http://www.google.com/url?sa=i&rct=j&q=tricore+logo&source=images&cd=&cad=rja&docid=5BnJNF0_g6TytM&tbnid=GLUyEYIygFgpzM:&ved=0CAUQjRw&url=http://www.saba.com/community/content-partners/&ei=rEJwUYTCKNOq4AOc3YC4Cg&bvm=bv.45373924,d.dmg&psig=AFQjCNHPN_IqMOgQTGkAzigsyeSX6zQ4RQ&ust=1366397951127279

http://postcp.com/index.html

http://www.google.com/url?sa=i&rct=j&q=kms+software+company+llc&source=images&cd=&cad=rja&docid=FpxBapfEae6o3M&tbnid=txgLHFkKnTF5PM:&ved=0CAUQjRw&url=http://www.erecruit.com/partners&ei=w4J1UcWOMu_54AOluIH4Bg&bvm=bv.45512109,d.dmg&psig=AFQjCNFCZaC1DwUv6xpfyIt-pwVDp7YaSA&ust=1366742046515338

http://www.google.com/url?sa=i&rct=j&q=SAP&source=images&cd=&cad=rja&docid=hXRsmn0qgaoUbM&tbnid=d1zYaXleJAjzYM:&ved=0CAUQjRw&url=http://www.sapjobsite.com/&ei=9oJ1UbyhH-z54APPnYHwBg&bvm=bv.45512109,d.dmg&psig=AFQjCNGSuikNQPdhnf6hIsxWz0Fn7abwYw&ust=1366742113466811

1. US Bureau of Labor Statistics, “Job Openings and Labor Turnover Survey,” https://www.bls.gov/web/jolts/jlt_

labstatgraphs.pdf, accessed January 17, 2018.

2. US Bureau of Labor Statistics, “The Unemployment Situation,” https://www.bls.gov/news.release/pdf/empsit.pdf, accessed

January 17, 2018.

3. Crain Communications Inc., “Largest Legal Staffing Firm in the United States; 2018 Update,”

https://www2.staffingindustry.com/Research/Research-Reports/Americas/Largest-Legal-Staffing-Firms-in-the-United-

States-2018-Update, accessed January 17, 2018.

4. Mestel & Company, “Legal Industry Snapshot Q3 2018,” http://www.mestel.com/legal-industry-snapshot-q3-2018/,

accessed January 17, 2018.

5. Driven, Inc., “Driven, Inc. Acquires Omnivere,” http://www.driven-inc.com/driven-inc-acquires-omnivere/, January 17,

2018.

6. Kelly Services, “Kelly Services® Expands Engineering Footprint with the Acquisitions of Global Technology Associates, LLC

and NextGen Global Resources, LLC,” https://globenewswire.com/news-release/2019/01/08/1681915/0/en/Kelly-

Services-Expands-Engineering-Footprint-with-the-Acquisitions-of-Global-Technology-Associates-LLC-and-NextGen-

Global-Resources-LLC.html, accessed January 17, 2019.

7. Paychex, Inc., “Form 10-Q,” https://otp.investis.com/clients/us/paychex_inc/SEC/sec-outline.aspx?FilingId=13122524&Cik

=0000723531&PaperOnly=0&HasOriginal=1, February 12, 2019.

8. Paychex, Inc., “Paychex to Acquire Oasis Outsourcing,” https://www.paychex.com/newsroom/news-releases/paychex-to-

acquire-oasis-outsourcing, accessed January 16, 2018.

9

CITATIONS

Disclosure: This report is a periodic compilation of certain economic and corporate information, as well as completed and announced merger and acquisi-

tion activity. Information contained in this report should not be construed as a recommendation to sell or buy any security. Any reference to or omission of

any reference to any company in this report should not be construed as a recommendation to buy, sell or take any other action with respect to any security of

any such company. We are not soliciting any action with respect to any security or company based on this report. The report is published solely for the

general information of clients and friends of Capstone Headwaters. It does not take into account the particular investment objectives, financial situation or

needs of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for all

investors. This report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied

upon as such. Prediction of future events is inherently subject to both known and unknown risks and other factors that may cause actual results to vary

mate- rially. We are under no obligation to update the information contained in this report. Opinions expressed are our present opinions only and are

subject to change without notice. Additional information is available upon request. The companies mentioned in this report may be clients of Capstone

Headwaters. The decisions to include any company in this report is unrelated in all respects to any service that Capstone Headwaters may provide to such

company. This report may not be copied or reproduced in any form, or redistributed without the prior written consent of Capstone Headwaters. The

information contained herein should not be construed as legal advice.


https://www.bls.gov/web/jolts/jlt_labstatgraphs.pdf

https://www.bls.gov/news.release/pdf/empsit.pdf

https://www2.staffingindustry.com/Research/Research-Reports/Americas/Largest-Legal-Staffing-Firms-in-the-United-States-2018-Update

http://www.mestel.com/legal-industry-snapshot-q3-2018/

http://www.driven-inc.com/driven-inc-acquires-omnivere/

https://globenewswire.com/news-release/2019/01/08/1681915/0/en/Kelly-Services-Expands-Engineering-Footprint-with-the-Acquisitions-of-Global-Technology-Associates-LLC-and-NextGen-Global-Resources-LLC.html

https://otp.investis.com/clients/us/paychex_inc/SEC/sec-outline.aspx?FilingId=13122524&Cik=0000723531&PaperOnly=0&HasOriginal=1

https://www.paychex.com/newsroom/news-releases/paychex-to-acquire-oasis-outsourcing

HUMAN RESOURCES & STAFFING SERVICES REPORT CONTRIBUTORS

10


Todd McMahon

Managing Director

[email protected] | 617-619-3334

Todd McMahon possesses over 20 years of transaction, financial services and corporate executive

experience. Prior to Capstone Headwaters, Todd was President of Array Financial Services, a Boston

based boutique M&A advisory firm he founded in 2002. He began his career at Putnam Investments,

later moving to Bank Boston’s investment banking group. Later, Todd served as Managing Director at

Ross Crossland Weston/RCW Mirus, where he was responsible for managing the firm’s technology

investment banking practice. Todd’s investment banking experience is complemented by his

involvement as an entrepreneur and investor where he was involved in various consolidation

transactions, raised over $30mm of debt and equity financing and was responsible for managing all

aspects of operations. He earned his MBA from Boston University and his BA from the University of

Massachusetts.

John Ferrara

Founder & CEO


John Ferrara is the Founder and CEO of Capstone Headwaters and is responsible for the firm’s

investment and merchant banking operations, as well as managing client transactions. John has executed

well over 150 transactions and related engagements and his entrepreneurial endeavors have included

serving as a founding member of seven financial service practices and a principal shareholder in five

startup businesses. Under his leadership, Capstone has expanded to 19 offices in the US, UK, and Brazil

with an international platform that spans more than 300 professionals in 33 countries worldwide.

Prior to 2002, when he acquired the practice he initially founded from Arthur Andersen to form

Capstone, John served as a Regional Managing Partner with Andersen Corporate Finance LLC. While

with Andersen, John held various national and global leadership positions. He started his career in

Lehman Brothers' M&A group in New York, London and Riyadh, later becoming a founding member of

Rodman & Renshaw's M&A practice in New York. After a break to compete in Australia's semi-

professional baseball league, John joined The Deloitte Consulting Group in Los Angeles to focus on

turnaround and interim management engagements.

MIDDLE MARKET INVESTMENT BANK OF THE YEAR

2017

US - DEBT FINANCING ADVISORY OF THE YEAR

2018

US MIDDLE MARKETS INVESTMENT BANK OF THE YEAR

2018

INVESTMENT BANKING FIRM OF THE YEAR

2019

TURNAROUND AWARDS

HUMAN RESOURCES & STAFFING SERVICES REPORT CONTRIBUTORS

11


Bob Balaban

Managing Director


Bob Balaban joined Capstone Headwaters in 2011 and brings over 25 years of investment banking and

operating experience. Bob has served as the lead banker on over 75 merger and acquisition transactions

primarily in the business services marketplace. He has also been involved with over a dozen startup

companies, including Great Plains Accounting Software, Inc., a software company that was ultimately

acquired by Microsoft Corp. as well as InaCom Corp., a distribution company that he helped grow to

several billion dollars in annual revenue before it was acquired by Hewlett Packard. He has appeared in

numerous national business publications, including the Wall Street Journal and Fortune Magazine and on

national television as an expert in mergers and acquisitions.

Chad Gardiner

Senior Vice President


Chad joined in 2012 and brings over 14 years of experience in investment banking and capital markets.

Mr. Gardiner was previously a Vice President at New Century Capital Partners where he focused on

raising capital and advising on mergers and acquisitions. Mr. Gardiner has raised private and public

capital and provided mergers and acquisitions advice for both public and private businesses. Mr.

Gardiner has advised on numerous sell-side and buy-side merger transactions, including: the $1.6 billion

sale of Digital Insight to Intuit, Ad.Venture Partners' acquisition of 180 Connect for $158 million, and

Providea Solutions' recapitalization by WestView Capital Partners.

Prior to New Century Capital Partners, Mr. Gardiner was an associate at Yucaipa Companies, a private

equity firm in Los Angeles, where he was responsible for managing the due diligence processes for

targeted investments. Mr. Gardiner assisted in making the first acquisition for the Yucaipa Global Fund, a

billion dollar fund, and prepared an investment presentation for President Clinton and the Dubai

Investment Group. Mr. Gardiner previously worked at Deutsche Bank and Merrill Lynch, where he

completed private placements and mergers and acquisitions.

MIDDLE MARKET INVESTMENT BANK OF THE YEAR

2017

US - DEBT FINANCING ADVISORY OF THE YEAR

2018

US MIDDLE MARKETS INVESTMENT BANK OF THE YEAR

2018

INVESTMENT BANKING FIRM OF THE YEAR

2019

TURNAROUND AWARDS

12

www.capstoneheadwaters.com

Capstone Headwaters is an elite investment banking firm dedicated to serving the corporate finance needs of middle market

business owners, investors and creditors. Capstone Headwaters provides merger & acquisition, private placement, corporate

restructuring and financial advisory services across 16 industry verticals to meet the life cycle needs of emerging enterprises.

Headquartered in Boston, MA and Denver, CO, Capstone Headwaters has 19 offices in the US, UK and Brazil with a global

reach that includes over 300 professionals in 33 countries.

BUILT FOR THE MIDDLE MARKET

INTERNATIONAL

300+ professionals

37 offices in 33 countries

Argentina Belgium

Brazil Canada Chile China

Colombia Croatia Czech Republic Denmark

Egypt Finland France Germany Hungary India

Ireland Italy Japan Mexico Morocco Netherlands

Norway Peru Poland Russia Spain Sweden Switzerland

Turkey United Arab Emirates United Kingdom Vietnam

UNITED STATES

160+ professionals

17 offices

Boston Boise Burlington Chicago

Dallas Denver Greenwich Houston

Los Angeles New York Orange

County Philadelphia San Diego

San Francisco St Louis Tampa

Washington DC

Documents

Capstone Headwaters