William Blair Case Competition

BrickDiscovery
Nhat Pham | Jake Cummings | Alexander Alger
1

2
Executive summary 3
Industry drivers 4
Company overview 7
Valuation analysis 10
Strategic options 15
Final thoughts 21
Appendix 22

Executive summary Industry drivers Company overview Valuation analysis Strategic options Final thoughts Appendix
Executive summary
Valuation previewCompelling story & financials
 BrickDiscovery is a leading global provider of end-to-end eDiscovery
services to some of the world’s largest and most sophisticated corporations
 Maintains its market position with a diversified revenue model and blue-chip
client-base, strong management team, proprietary technology for organic
and unorganic growth drivers
 Valuation analyses place BrickDiscovery’s enterprise value between
$433mm-$476mm
 2018E Revenue: $153mm
 2018E EBITDA: $33mm
Sell-side advisory Potential buyers
 Analysis of past transactions and the potential for synergies along with
historically active M&A activities in the current market leads to a
recommendation of pursing a near-term sale to a financial sponsor
 Financial sponsor with capital to scale the company to international market
such as Asia
$320 $380 $440 $500 $560
Precedent Transaction Analysis
Comparable Transaction Analysis
DCF - Exit Multiple
DCF - Perpetuity
Leveraged Buyout Analysis
Valuation range:
$433mm - $476mm
Enterprise value ($ in million)
3

10.76
17.32
5
9
13
17
21
2018E 2023E
$ in billion
A shift in discovery industry
Growth in global legal services market
724
747
786
815
849
886
925
968
1,011
500
650
800
950
1,100
2013 2014 2015 2016 2017 2018* 2019* 2020* 2021*
$ in billion
North America,
41%
Europe, 26%
APAC, 21%
Rest of the
World, 12%
Global eDiscovery Market Share
 North America currently holds the largest market share
 Small and Medium enterprises are adopting technologies at a rapid
race
 Emerging market such as some APAC countries is expected to
witness the highest CAGR in the next 5 years
 Lead to rising demand for eDiscovery to handle digital data
efficiently for faster availability of relevant data during the legal
cases
 The global eDiscovery services
market is a $10.8Bn market that is
expected to grow at a ~10%
CAGR from 2018 to 2023
 The growing competition is making
legal enterprises to use data
management software and
outsourcing
 The global legal services
market is expected to
witness high growth over the
forecast period
 Increase in the number of
legal service providers
Leverage for eDiscovery services growth
eDiscovery market share by region
Executive summary Industry drivers Company overview Valuation analysis Strategic options Final thoughts Appendix 4

Proliferation of electronically stored information (ESI)
3,449
4,678
6,819
9,087
11,558
14,124
17,116
20,555
0
5,000
10,000
15,000
20,000
25,000
2014 2015 2016 2017 2018* 2019* 2020* 2021*
Exabytes
Cloud Data Center Traditional Data Center
Global data center IP traffic 2014-2021, by data center type
Total population of
7.6 billion
4.2 billion active
internet users
7 billion devices have
internet connection
Expect 44 Trillion
gigabytes of ESI in 2020
98%
98% of the Millennials
use internet
35%
The Millennials make up
of 35% of workforce
Strong expansion in the Cloud Convenient internet access
 Development in technology made cloud storage expenses decrease
 Rapid displacement of paper-based files with data in the Internet of
Things era
 Storing data electronically is a method to cut costs and sustain
competitive advantages
 Estimated 20,555 exabyte of global data center IP traffic in 2021 with
the CAGR of 29.05% from 2014 to 2021
 The majority of global population are active internet users and have
convenient access to the internet
 Millennials are the largest population and the largest workforce
 As most of the Millennials use internet, more data will be generated
through different means, including professional use and personal use
 Expectation of 44 Trillion gigabytes of electronically stored information
in 2020

Increasing demand for credible third-party providers
419 447
614
783 781
1,093
1,579
22.9 17.3
91.98 85.61
169.07
36.6
178.96
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2011 2012 2013 2014 2015 2016 2017
Data breaches and exposed records in millions in America
Data breaches Million records exposed
Rising concern in scaled data’s security Drivers for eDiscovery
 Data breaches have gained attention with the increasing use of
digital files and companies and users' large reliance on digital data
 The number of data breaches and the number of exposed records in
the U.S. have reached the highest figures in 2017
 Increasingly stringent regulatory environments around privacy
and security compliance driving need for scaled providers with a
proven track record
 Most cutting-edge eDiscovery technology is exclusively cloud-based
 The cloud technology is being widely adopted by businesses, due to its various
benefits, such as increased storage, scalability, flexibility, security, portability,
and compliance.
 Law firms increasingly outsourcing the eDiscovery process for
optimization/efficiency and standardization across matters
Key players in the industry

Customers and services diversification
EBITDA analysis
29.7%
28.9%
25.6%
15.8%
32.7%
33.6%
29.8%
3.9%
31.2%
40.6%
28.0%
0.1%
31.2%
40.6%
28.0%
0.1%
Forensics / Processing Hosting Managed Review Paper
2016 2018E 2020E
18.0%
23.0%
28.0%
$15
$30
$45
$60
$75
2016 2017 2018E 2019P 2020P 2021P 2022P 2023P
$ in million
EBITDA EBITDA margin
Service offerings breakdown by revenue
Diversified model
 BrickDiscovery provides a comprehensive suite of services, including
forensics, processing, hosting and managed review
 Diversified revenue base with an attractive mix of industries and clients
served
 Highly attractive growth and margin profile
 Blue chip client base with reoccurring revenue model

Proprietary eDiscovery processing system
Long Island Processing Engine Onshore / Offshore model
 50+ project engineers located in India
process electronic data utilizing
BrickDiscovery’s proprietary Long Island
processing engine
 BrickDiscovery has a proprietary eDiscovery processing system
ingests and aggregates electronically stored information from all
custodians
 The engine helps engineers to extract metadata and prepare the
data for further sorting and culling to better define the review
universe
 Enables seamless onshore and offshore integration across offices
 Scalability of throughput with marginal incremental costs and third-party fees
 Designed with a flexible modular design that allows for enhancements and
features to be added to business processes as needed
Service offerings breakdown by revenue Provides consistent 24/7 service that enables the company to
seamlessly address its clients complex eDiscovery needs
Engineers utilize a secure client VPN dashboard, allowing operators to
access data without leaving the U.S, increasing the efficiency
India is also a client-facing extension of BrickDiscovery’s U.S.
operations more than simply an outsourced back office common
among competitors
No travel expenses needed. Relatively low marginal storage
expenses

Company overview
• Data security is always a threat despite steps taken
by BrickDiscovery to protect and encrypt data to
prevent cybercrime
• Inside threats have accounted for 77% of problems in
eDiscovery
• Don’t have a strong foothold internationally, provides
a largely untapped market share they could potentially
acquire
• Government has largest market share in eDiscovery,
but is the smallest by customer type
• New GDPR regulations may make it harder to expand
in EU nations
• With Asia expected to see highest CAGR in coming
years it hurts BrickDiscovery not having a strong
presence internationally
• Rapid growth in litigation cases and need to
decreases costs
• Very strong management team that has provided a
culture of trust and high work ethic with experience in
the industry
• Highly diversified with a wide range of industries and
clients served
S W
TO

Valuation overview
$320 $380 $440 $500 $560
DCF - Exit Multiple
DCF - Perpuity
Leveraged Buyout
Valuation Range:
$433mm - $476mm
2018E EBITDA Multiple 9.6x 11.4x 13.2x 14.9x 16.7x
$320 $380 $440 $500 $560
DCF - Exit Multiple
DCF - Perpetuity
Valuation range:
$433mm - $476mm

Leveraged buyout analysis
Capital structure Assumption
Investor Returns
2019E 2020E 2021E 2022E 2023E
Years of Investment 1.0 2.0 3.0 4.0 5.0
EBITDA $37 $38 $46 $52 $58
x EBITDA Multiple 11.0x 11.2x 11.3x 11.5x 11.6x
Enterprise Value $420 $508 $515 $590 $674
Debt $155 $143 $131 $119 $108
Cash (20) (34) (49) (67) (90)
Net Debt $135 $109 $82 $53 $18
Equity Value $284 $399 $432 $537 $656
Internal Rate of Return 28.2% 34.1% 24.9% 24.8% 24.2%
Cash-on-Cash Return 1.3x 1.8x 1.9x 2.4x 3.0x
$0
$150
$300
$450
$600
$750
$900
2019E 2020E 2021E 2022E 2023E
$ in million
Equity Debt
2018E EBITDA
EBITDA Multiple 10.5x 11.5x
Enterprise Value Range $351.23 $384.68
$33.5
Implied valuation Commentary
 Leveraged assumptions
 Leverage 5.0x EBITDA consisting of 7% fixed interest
 Debt comprised 43% of initial source
 Assumes 11.6x exit multiple with a 11.0x entry multiple

Discounted cash flows analysis
2016 2017 2018E 2019P 2020P 2021P 2022P 2023P
Revenue $139 $144 $153 $172 $192 $214 $239 $266
EBITDA 37 38 46 52 58
Less: Depreciation (4) (4) (4) (5) (5)
EBIT $33 $34 $41 $47 $53
Taxes 7 7 9 10 11
EBIAT $26 $27 $33 $37 $42
Plus: Depreciation 4 4 4 5 5
Less: CapEx (3) (3) (4) (5) (5)
Less: Change in NWC 0 (0) (3) (1) (1)
Unlevered Free Cash Flow $27 $28 $30 $36 $41
Discount Period 1 2 3 4 5
Present Value of Projection Period $25 $23 $23 $25 $25
Present Value of Projection Period $120
Projection PeriodHistorical Period
Implied valuation
Commentary
503.53 2.50% 2.75% 3.00% 3.25% 3.50%
9.3% 514.5 499.7 499.7 514.5 547.7
9.6% 495.5 481.8 481.8 495.5 526.0
9.8% 477.7 465.1 465.1 477.7 505.9
10.1% 461.2 449.4 449.4 461.2 487.2
10.3% 445.7 434.8 434.8 445.7 469.8
WACC
Enterprise Value
Perpetuity Growth Rate
503.5 9.5x 10.0x 10.5x 11.0x 11.5x
8.8% 487.4 468.4 468.4 487.4 525.5
9.3% 477.5 458.9 458.9 477.5 514.7
9.8% 467.8 449.6 449.6 467.8 504.2
10.3% 458.3 440.5 440.5 458.3 493.9
10.8% 449.1 431.7 431.7 449.1 483.9
Enterprise Value
EBITDA Exit Multiple
WACC
 Assumptions
 Revenue growth peaks in 2019 at 12+%
 Normalized EBITDA margin of 21+%
 WACC of 9.8%
 Comparable unlevered betas were used in determining
BrickDiscovery’s systematic risk
 Planning to exit paper-based services in all locations except
Minneapolis by end of 2018 does not affect revenue much as
it currently provides minimal EBITDA contribution

Comparable company analysis
Commentary Implied valuation
Company Name Ticker
Current
Share Price
% of 52-wk.
High
Market Cap.
Enterprise
Value
LTM
Revenue
LTM EBITDA
LTM
EV / EBITDA
LTM
P/E
LTM
EPS
LTM EBITDA
Margin
LTM
Profit Margin
Navigant Consulting Inc NCI $21.83 84.4% 982 1,118 967 112 10.7x 21.6x 1.01 11.6% 5.0%
Resource Connection Inc RECN $17.43 89.4% 550 581 692 50 13.7x 24.2x 0.72 7.2% 3.3%
CRA International INC CRAI $44.09 75.0% 356 368 393 37 12.2x 18.2x 2.42 9.4% 5.2%
FTI Consulting INC FCN $68.64 83.8% 2,623 2,878 13,910 1,941 11.7x 18.0x 3.81 14.0% 3.9%
Progress Software Corp PRGS $33.04 61.6% 1,484 1,463 402 142 10.8x 23.6x 1.40 35.4% 16.4%
Sapiens International Corp SPNS $11.97 82.8% 596 548 287 40 16.2x 28.8x 0.42 14.0% 7.2%
Thomson Reuters TRI $46.61 96.9% 26,196 33,368 8,426 2,424 13.8x 36.3x 1.27 28.8% 10.8%
XEROX Corp XRX $26.87 71.8% 6,855 11,028 10,189 1,693 8.2x 8.8x 3.06 16.6% 7.8%
Conduent Inc CNDT $20.27 86.7% 4,281 5,452 5,780 689 8.7x 164.5x 0.12 11.9% 0.6%
1st Quartile 9.7x 18.1x 0.60 10.51% 3.61%
Median 11.7x 23.6x 1.30 13.95% 5.21%
Mean 11.8x 38.2x 1.60 16.55% 6.69%
3rd Quartile 13.8x 32.6x 2.70 22.70% 9.34%
BrickDiscovery 21.86% 15.00%
 Companies are similar in operation segments, e-consulting, eDiscovery,
and software application
 Companies’ market capital varies from SME to large corporations
 The implied valuation is $386.1mm
Comparable Multiples 11.7x 12.7x
Enterprise Value $391 $425
EV/EBITDA
BrickDiscovery 2018E EBITDA $33.5

Precedent transaction analysis
Implied valuationCommentary
Revenue EBIT EBITDA
Kofax Ltd Lexmark International Inc Strategic 3/24/2015 954.5 (0.1%) 3.3x 92.9x 38.8x
Epiq System Inc Harvest Partners LLC Financial 7/27/2016 1,005.5 0.1% 1.8x 31.5x 11.3x
Computer Science Corp DXC Technology Co Strategic 5/24/2016 11,020.0 0.3% 0.9x 33.9x 6.5x
iGATE Corp Capgemini SE Strategic 4/27/2015 4,387.3 0.0% 3.4x 20.5x 17.3x
Sapient Corp Publicis Groupe SA Strategic 11/3/2014 3,264.7 0.1% 2.3x 26.2x 19.5x
Rackspace Hosting Inc Multiple Acquirers Financial 8/26/2016 4,215.0 0.0% 2.0x 16.1x 6.2x
Informatica LLC Microsoft Corp Financial 4/7/2015 4,894.7 0.0% 4.6x 29.7x 24.3x
Syntel Inc Atos SE Strategic 7/22/2018 3,602.3 0.0% 3.7x 14.3x 13.6x
Transaction Value
Target Company Acquirer
Transaction
Type
Announcement
Date
Transaction
Value
Premium
High 4.6 92.9 38.8
3rd Quartile 3.7 33.3 23.1
Median 2.8 27.9 15.5
Mean 2.7 33.1 17.2
1st Quartile 1.8 17.2 7.7
Low 0.9 14.3 6.2
BrickDiscovery's 2018E EBITDA
Comparable multiple range 15.0x 17.0x
Implied valuation range 501.8 568.65
$33.5 Precedent transactions were chosen in e-consulting, eDiscovery, and
data technology within the range of four years
 Active M&A in the middle market, and most of the deals are undisclosed

Potential acquisition targets
Choose to stay domestically, improve eDiscovery
technology processes and increase their share of
the market
Choose to enter a new market with the help of the
proprietary Long Island processing engine to
establish a rapid growth international subsidiary
 Adds a cybersecurity aspect which may
generates additional revenue for BrickDiscovery
and simultaneously protects them from the threat
of stolen data
 Acts as an expert witness to testify collection
practices and policy disputes
 Private company located in Seattle, WA
 Over 40 years combined experience in litigation
support, data discovery and legal practice.
 Has the capabilities to provide full paper and
electronic evidence processing, in-region hosting
and trial preparation services in Singapore,
Malaysia, Indonesia, Indo-China, India and China
 Private company located in Singapore

Strategic buyer universe
Initial thoughts
 Because of BrickDiscovery’s proprietary Long Island Processing Engine, stellar management team with extensive experience and great reputation in the industry, it
makes the company a great strategic acquisition option domestically and internationally
 Companies are investing more in technology and eDiscovery services due to massive increases in data volume resulting in problems for legal and IT departments
 Rapid growth in data and forensics service outsourcing
E-consulting Litigation services In-house subscription services

Target strategic buyers
Description Metrics Rationale
 Provides a subscription based
On-Premise eDiscovery service
for a full-service customer
experience
 Subsidiary of Peak Rock Capital
 Would combine strengths resulting in increased capabilities with
a more advanced On-Premise service and an integrated
offshore processing through the proprietary Long Island engine
 Provide eDiscovery training services and information guides
 Just awarded a 20 year contract to provide eDiscovery products
and services to federal government agencies
 BrickDiscovery has minimal revenue from government agencies
yet the government makes up over 50% of the industry
 Technology company focused on
digital transformation of litigation
discovery
 Global leader in eDiscovery
management solutions with
offices in 43 locations across
19 countries
 Specialized global professional
services firm that offers the
ability to build, manage and
protect company data
 Since BrickDiscovery has a presence in India it would further
cement an already well diversified global client base
 Provide an Office 365 migration and management
 Serve a wider range of industries including pharmaceutical,
insurance and automotive
 More of international client base, especially in India and Asia
 Could allow BrickDiscovery to expand in India given that they
already have a preliminary office there
 Built in risk and compliance solutions that would be beneficial in
integrating into BrickDiscovery’s core services
 Revenue LTM $2.999Bn
 Privately held
 Privately held
 Revenue LTM $966mm

Financial sponsors universe
Criteria Rationale
 Invests in companies with a deal size of
$10mm - $10Bn
 Only focuses on companies in the
software and technology sectors
 Large private equity fund with an expertise in software and technology industries
 Recently acquired Navex in 2014 and Zapproved in 2017, both of which provide
eDiscovery services
 Pursue companies with annual earnings
greater than $50mm with a strong
management team showing prior
performance
 Middle market valuation of $50mm -
$300mm
 Invests in application and infrastructure software and technology enabled service sectors
 BrickDiscovery would fit in well with the current portfolio, also have stellar management
and proven success
 Have a branch in Europe which would allow BrickDiscovery to expand into international
markets with ease
 Already invested in CloudNine which has a significant portion of cloud-based options and
provides service to 50 of the top 250 Am Law Firms
 Invests in middle market companies
 Look for companies with strong
management teams with an expertise in
business/financial services
 Already invested in an eDiscovery firm called Xact Data Discovery (XDD)
 Looking to invest additional capital in coming years in the eDiscovery industry
 More synergies through a broader service and product offering by combining companies
and client base
 Companies with $50mm - $1Bn in revenue
 Enterprise value of $50mm - $750mm
 Strong competitive position, facing
operational/financial
opportunities/challenges

Financial sponsors universe
 Typically $10mm - $10Bn in deal size
 Only focuses on companies in the
software and technology industries
Rationale
 Made over $1 million-dollar investment in Exterro, a leading provider in information
governance and eDiscovery software
 Usually rely on companies with strong management teams to perform and increase
revenue, which is one of BrickDiscovery’s strong suits
 Based in China, already have infrastructure and clients in Asia which is expected to see
highest CAGR in the eDiscovery industry
 Investments in AI research and engineering could advance eDiscovery and forensics
analysis technology methods
 Owners of Consilio/Advanced Discovery
 The combined company will employ over 2,500 employees, more than 60 offices
spanning 11 countries
 BrickDiscovery matches investment strategy perfectly
 International presence will introduce Brickdiscovery to additional synergies
 Invests in North American middle
market business led by exceptional
management teams
 Deliver 7-11% net average annual
investment return
 Protect their funded status
 Will combine the power and resources of DTI, BrickDiscovery and Epiq eDiscovery
 Epiq and DTI are both major players in eDiscovery with a global reach and a broad
customer base
 Invests in Internet services
 Has extensive portfolio of cloud
computing and many other client-
based services
Criteria

Selected buyers
 Purchased DTI and Epiq – both major eDiscovery firms that operate in the U.S. and internationally
 Epiq offers Antitrust and Second Request Solutions for M&A deals in Canada and the European Union
 DTI offers data/server recovery software and physical hard drive repair – allowing BrickDiscovery to tap into
another similar market
 30% of BrickDiscovery’s revenue comes from Managed Reviews which makes up about 75% of the cost of a
litigation case and a large market opportunity
 OMERS has a very strong and experienced management team that has seen a 10% CAGR on the majority of
their investments
 Recently acquired Xact Data Discovery, a leading international eDiscovery provider
 JLL expects to invest additional capital in the coming years in M&A deals to expand geographically through
organic initiatives
 XDD has a broader focus on litigation services, data redaction and database/project management while
BrickDiscovery puts a higher emphasis on eDiscovery
 BrickDiscovery will be able to expand using pre-established XDD infrastructure and client relations to increase
revenues through a broader selection of services
 Ability to grab a good portion of market share through an incredibly experienced management team able to
guide them on future acquisitions

Favorable time for sale
 eDiscovery industry is currently fragmented
 Combining now will allow BrickDiscovery and acquirer to pull away from
competitors and take control of a significant portion of the market share
 BrickDiscovery is phasing out paper services within coming years but
outsourcing it to partners, which Epiq eDiscovery still plans to continue
Active middle market deal
Commentary
Financial impact
($5.0)
$20.0
$45.0
$70.0
2016 2017 2018E 2019P 2020P 2021P 2022P 2023P
($ in million)
Organic Incremental Addition

Final thoughts
 Selling to a financial sponsor will benefit BrickDiscovery
greater than a strategic buyer
 Both JLL and OMERS already have holdings in
eDiscovery
 More synergies due to similar products and services
 Financial sponsors offer more capital, faster growth
and increased capabilities
 Can capitalize on broader services provided by
companies already under their control
Final recommendation
 We recommend that BrickDiscovery is sold to JLL Partners to capitalize and expand
on the market share Xact Data already controls and move into entirely new project and
data base management
 Sale should be made soon to combine capabilities and take control of a fragmented
eDiscovery industry before an influx of M&A deals are likely to occur
 Implied valuation range of $433mm - $476mm
Valuation overviewFinancial sponsor is recommended
Potential acquirers
 An acquisition of Law & Forensics would add a technology
advance to BrickDiscovery’s current value chain
 Litigation Edge can assist BrickDiscovery to expand to
an emerging market with potential growth in eDiscovery
industry
$320 $380 $440 $500 $560
DCF - Exit Multiple
DCF - Perpetuity
Valuation range:
$433mm - $476mm

Appendix

Pro forma income statement w/o acquisition
(Fiscal Year ended December 31) 2016 2017 2018E 2019P 2020P 2021P 2022P 2023P
Income Statement
Forensics / Processing $41 $45 $50 $56 $60 $68 $76 $85
Hosting 40 45 51 65 78 83 93 104
Managed Review 36 41 46 50 54 62 69 77
Paper 22 13 6 1 0 0 0 0
Total Revenue $139 $144 $153 $172 $192 $214 $239 $266
% Growth 3.7% 6.2% 12.2% 11.6% 11.6% 11.6% 11.6%
Total cost of sales 60 62 65 74 85 90 100 112
Gross Profit $79 $82 $88 $98 $106 $124 $138 $155
% Gross margin 56.6% 57.1% 57.3% 56.8% 55.4% 58.0% 58.0% 58.0%
Sellilng, General & Administrative 53 55 58 65 72 83 92 102
EBIT $25 $28 $30 $33 $34 $41 $47 $53
% Operating margin 18.2% 19.1% 19.6% 19.2% 17.9% 19.3% 19.6% 19.8%
Interest expense 1 1 1 1 1 1
Earning Before Tax $29 $32 $34 $41 $46 $52
Tax provision 6 7 7 9 10 11
Net income $25 $28 $23 $25 $27 $32 $36 $41
% Profit margin 18.2% 19.1% 15.0% 14.8% 13.9% 15.0% 15.3% 15.5%
Metrics & drivers
Forensics / Processing as % of revenue 29.7% 31.4% 32.7% 32.3% 31.2% 31.9% 31.9% 31.9%
Hosting as % of revenue 28.9% 31.1% 33.6% 37.7% 40.6% 39.0% 39.0% 39.0%
Managed Review as % of revenue 25.6% 28.3% 29.8% 29.3% 28.0% 29.0% 29.0% 29.0%
Paper as % of revenue 15.8% 9.2% 3.9% 0.7% 0.1% 0.1% 0.1% 0.1%
Tax Rate 21.0% 21.0% 21.0% 21.0% 21.0% 21.0%
Average interest rate 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%

Pro forma balance sheet
2016 2017 2018E 2019P 2020P 2021P 2022P 2023P
Balance Sheet
Cash $20 $45 $71 $100 $134 $173
Accounts Receivable, Net 31 34 38 43 48 53
Short-term Investment - - - - - - - - - - - -
Other Receivables 14 15 17 19 21 23
Prepaids 6 7 8 9 10 11
Total Current Assets $71 $102 $135 $170 $213 $261
Fix Assets, Net $5 $4 $4 $4 $4 $4
Goodwill 13 13 13 13 13 13
Intangible Assets, Net 13 13 13 13 13 13
Other Long-Term Assets 1 1 1 1 1 1
Total Assets $103 $133 $165 $201 $243 $291
Accounts Payable $18 $21 $24 $25 $28 $31
Other Accrued Expenses 19 21 23 26 29 32
Other Current Liabilities 6 7 8 9 10 11
Total Current Liabilities $42 $48 $54 $59 $66 $74
Long-term Debt $13 $12 $11 $10 $9 $8
Deferred Rent 1 1 1 1 1 1
Other Long-Term Liabilities 1 1 1 1 1 1
Total Liabilities $56 $61 $66 $70 $76 $83
Total Member's Equity 46 72 98 130 167 208
Total Liabilities & Members' Equity $103 $133 $165 $201 $243 $291

Pro forma statement of cash flow
2016 2017 2018E 2019P 2020P 2021P 2022P 2023P
Cashflow Statement
Net Earnings $25 $28 $23 $25 $27 $32 $36 $41
Depreciation 3 4 3 4 4 4 5 5
Change in Working Cpaital 0.4 (0.3) (2.6) (1.3) (1.2)
Cash from Operating Activities $29 $30 $34 $40 $45
Capital Expenditures (3) (3) (3) (3) (3) (4) (5) (5)
Cash from Investing Activities ($3) ($3) ($4) ($5) ($5)
Cash Spent on Long-Term Debt (1.0) (1.0) (1.0) (1.0) (1.0)
Cash from Financing Activities ($1) ($1) ($1) ($1) ($1)
Change in Cash $25 $26 $29 $34 $39
Beginning Cash $20 $45 $71 $100 $134
Ending Cash 20 45 71 100 134 173
Metrics and Drivers:
Free Cash Flow $33 $33 $38 $45 $51
Operating Income 25 28 30 33 34 41 47 53
EBITDA 28 31 33 37 38 46 52 58

Pro forma with acquisition
(Fiscal Year ended December 31) 2016 2017 2018E 2019P 2020P 2021P 2022P 2023P
Income Statement
Forensics / Processing $41 $45 $50 $56 $60 $69 $78 $88
Hosting 40 45 51 65 78 85 95 108
Managed Review 36 41 46 50 54 63 71 80
Paper 22 13 6 1 0 0 0 0
Total Revenue $139 $144 $153 $172 $193 $217 $244 $276
% Growth 3.7% 6.2% 12.2% 12.5% 12.5% 12.5% 13.0%
Total cost of sales 60 62 65 74 85 89 101 113
Gross Profit $79 $82 $88 $98 $108 $128 $143 $164
% Gross margin 56.6% 57.1% 57.3% 57.5% 58.0% 59.0% 58.7% 59.2%
Sellilng, General & Administrative 53 55 58 65 73 83 93 105
Operating Income $25 $28 $30 $32 $34 $46 $51 $59
% Operating margin 18.2% 19.1% 19.3% 18.8% 17.8% 21.0% 20.7% 21.2%
Interest expense 1 1 1 1 1 1
Earning Before Tax $29 $31 $34 $45 $50 $58
Tax provision 6 7 7 9 10 12
Net income $25 $28 $23 $25 $27 $36 $39 $46
% Profit margin 14.8% 14.5% 13.7% 16.3% 16.2% 16.6%
Metrics & drivers
Forensics / Processing as % of revenue 29.7% 31.4% 32.7% 32.3% 30.9% 31.9% 31.9% 31.9%
Hosting as % of revenue 28.9% 31.1% 33.6% 37.7% 40.3% 39.0% 39.0% 39.0%
Managed Review as % of revenue 25.6% 28.3% 29.8% 29.3% 27.8% 29.0% 29.0% 29.0%
Paper as % of revenue 15.8% 9.2% 3.9% 0.7% 0.1% 0.0% 0.0% 0.0%
SG&A as % of Revenue 38.4% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0%
Tax Rate 21.0% 21.0% 21.0% 21.0% 21.0% 21.0%
Average interest rate 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%

WACC calculation
Present Value of Projection Period $120.4
2023E Free Cash Flow $41
Perpetuity Growth Rate 2.75%
Terminal Value $589
Years 5.0
Present Value of Terminal Value $369
Total Entterprise Value $489.11
Implied EBITDA multiple 10.1x
Perpetuity Growth Method
Present Value of Projection Period $120.4
2023E EBITDA $58.1
Implied EBITDA multiple 10.1x
Terminal Value $589
Years 5.0
Present Value of Terminal Value $369
Total Enterprise Value $489.1
Book Value of Debt $13
Market Value of Equity 97
Total Capital $109
Beta 1.0
Market Risk Premium 7.5%
Risk Free Rate 3.2%
Cost of Equity 10.4%
Pre-Tax Cost of Debt 7.0%
Tax Rate 21.0%
Cost of Debt 5.5%
WACC 9.83%
WACC Calculation
Company Name Beta
Navigant Consulting Inc 1.06
Resource Connection Inc 1.18
CRA International INC 0.97
FTI Consulting INC 0.93
Progress Software Corp 0.96
Sapiens International Corp 0.72
Thomson Reuters 0.66
XEROX Corp 1.21
Conduent Inc 0.92
Avg. 0.96

Additional leveraged buyout data
0.4 10.0x 10.5x 11.0x 11.5x 12.0x
4.0x 29.2% 23.5% 23.5% 29.2% 40.2%
4.5x 28.9% 23.2% 23.2% 28.9% 39.9%
5.0x 28.9% 23.2% 23.2% 28.9% 39.9%
5.5x 29.2% 23.5% 23.5% 29.2% 40.2%
6.0x 29.8% 24.1% 24.1% 29.8% 40.8%
IRR sensitivity analysis
Debt
Sources and Uses
Amort % Total Amount
Senior Debt 14.0 43.0% $167
Sponsor's Equity 57.0% 222
Total Sources 100.0% $389
Transaction Value 94.6% $368
Beginning Cash Balance 5.2% 20
Transaction Expenses 0.3% 1
Total Uses 100.0% $389
Debt / EBITDA 5.0x
xEBITDA
5.00x
Debt Schedule
Senior Debt 167 $155 $143 $131 $119
Total Beginning Balance $167 $155 $143 $131 $119
Scheduled Senior Debt Paydown ($12) ($12) ($12) ($12) ($12)
Scheduled Debt Paydown ($12) ($12) ($12) ($12) ($12)
Senior Debt $155 $143 $131 $119 $108
Total Ending Balance $155 $143 $131 $119 $108
Cash Balance
Beginning Balance $20 $34 $49 $67 $90
Plus: Excess Cash Flow 14 15 17 23 28
Total Ending Balance $34 $49 $67 $90 $118
Interest Expense
Senior Debt 161 149 137 125 113
Average Debt Balance $161 $149 $137 $125 $113
Credit Metrics
Senior Debt 7.0% 7.0% 7.0% 7.0% 7.0%
Interest Rates 7.0% 7.0% 7.0% 7.0% 7.0%
Senior Debt 11 10 10 9 8
Total Interest Expense $11 $10 $10 $9 $8

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