TECHNOLOGY SERVICES MONTHLY Healthcare IT: Patient …€¦ · MHH | Technology Services Group 5...

TECHNOLOGY SERVICES MONTHLY

1717 Arch Street, 39th Floor · Philadelphia, PA 19103 · www.mhhco.com

September 2017

Healthcare IT: Patient Engagement

MHH | Technology Services Group 2

Welcome to the September edition of the Mufson Howe HunterTechnology Services Monthly. This month, we focus on patientengagement technology. Each month, our team aims to provide you with anewsletter that contains thought-provoking content and analysis, as well asupdates on macroeconomic themes, equity capital market performance,private capital market trends and noteworthy M&A activity–all of which isrelevant to our core industry sectors:

Our Technology Services practice serves growth-oriented, rapidly scalablebusinesses that leverage proprietary and enabling technologies to addressthe evolving needs of modern enterprise customers. We apply deepindustry expertise and broad transaction experience to provide thoughtful,tailored advice and solutions for our clients. Our clients turn to us foroutstanding M&A advisory and capital-raising execution.

We hope you find this information valuable, and we welcome anycomments or suggestions.

Sincerely,

Brandon K. EckManaging Director, Head of Technology Services

Cloud Services Healthcare IT Infrastructure Services Specialty Consulting

Digital Agencies Information Services IT OutsourcingTech-Enabled Business

Process Outsourcing

Tech-Enabled Solutions

InternetOutsourcing

ServicesMobile

Enterprise Software

Welcome to the MHH Technology Services Newsletter!

Select 2017 Franchise Themes

Cloud Brokerage Services & Cloud Enablement: The convergence of IT services,outsourcing, hosting, managed services and cloud business models continues tocause significant change in sourcing strategies. This will benefit IT Outsourcers thatembrace flexible pricing strategies, including the delivery of offerings "as a service.”It will also drive demand for third-party outsourced tools and services.

Offshore Providers’ Transformation: The current political landscape and increasingclient demand for more automated and agile solutions is driving offshore providers toincrease their functional capabilities in cloud-based services that augment anddifferentiate existing delivery models. According to Information Services Group (ISG),As-a-Service annual contract value now represents 36% of the combined global marketfor sourcing services, nearly double early 2014 (ISG, 2016).

IoT-Optimized Infrastructure Services: “Connected things” will streamline vendoroperational models while reducing customer costs. IoT will introduce even more usefuldata to the cloud that needs to be captured and effectively managed. IaaS and PaaScompanies will be a direct beneficiary of this trend. Cisco expects database, analyticsand IoT workloads to account for 22% of the total workloads by 2020 (Cisco, 2016).

Healthcare Consumerism & Patient Engagement: The rising costs of healthcarepremiums and increased out-of-pocket consumer spend from rising deductibles areshifting healthcare consumer behaviors toward a more cost-conscious mentality. Inturn, payors and providers continue to focus on patient engagement-relatedtechnologies that improve the digital consumer experience.

What we are reading…

Population Health Management: Population health management continues to be atop priority for healthcare organizations, as the overall responsibility for keeping apopulation of patients healthy shifts to the provider. This, coupled with the economicmotivation of the risk-based, value-driven reimbursement model, is driving providerdemand for more actionable data about the patients they serve and data relating totheir post-acute care.

US Rescinds Federal Oversight of AIG

Gartner Public Cloud IaaS Market Share

How Tech Can Create Jobs While Giving Healthcare to the World's Poor

Amazon Sells $1.6m in Whole Foods' Brand Products in First Month

The Massive Hedge Fund Betting on AI

Carlyle Group in Talks to Sell TCW Group Stake


https://www.wsj.com/articles/u-s-rescinds-federal-oversight-of-aig-1506722576

https://www.channele2e.com/news/gartner-public-cloud-iaas-market-share-amazon-aws-microsoft-azure-google-growth/

http://fortune.com/2017/09/25/health-care-technology-ceo-initiative/

https://www.wsj.com/articles/amazon-sells-1-6-million-in-whole-foods-store-brand-products-in-first-month-1506682802

https://www.bloomberg.com/news/features/2017-09-27/the-massive-hedge-fund-betting-on-ai

https://www.wsj.com/articles/carlyle-group-in-talks-to-sell-tcw-group-stake-1506529823?tesla=y


The Mufson Howe Hunter Technology Services Group serves growth-oriented, rapidly scalable businesses that leverage proprietary and enabling technologies to address the evolving needs of modern enterprise customers. We apply deep industry expertise and broad transaction experience to provide thoughtful, tailored

advice and solutions for our clients. Our clients turn to us for outstanding M&A advisory and capital-raising execution.

Brandon EckManaging Director,Head of Technology Services

Prior Experience:

Managing Director, Head of Technology & Services, Janney Montgomery Scott

Principal, Katalyst Securities

Principal, RCW Mirus

215.399.5411 [email protected]

18+ Years of Experience

60+ Transactions Completed

Education:

Gettysburg College (BA)

Senior Banking Team Sector Coverage

Andrew WilsonVice President,Technology Services

Prior Experience:

Senior Associate, Technology & Services, Janney Montgomery Scott

Associate, TMT, J.P. Morgan

Attorney, M&A, Wilson Sonsini Goodrich & Rosati


8+ Years of Experience

20+ Transactions Completed

Education:

Duke University (JD, MBA)

U. North Carolina, Chapel Hill (BA)

Sell-side Advisory

Buy-side Assignments

Private Placements

Recapitalizations

Financial Advisory

Fairness Opinions

Tech-Enabled Solutions

Internet

Outsourcing Services

Mobile

Enterprise Software

IT Outsourcing

Healthcare IT

Digital Agencies

SpecialtyConsulting

InformationServices

InfrastructureServices

Tech-Enabled BPO

Cloud Services

TECHNOLOGY SERVICES PRACTICE OVERVIEW

Business Model Coverage


PATIENT ENGAGEMENT TECHNOLOGY

What is Patient Engagement Technology?

Patient engagement technology (PET) consists of various technologies designed to

better connect patients and providers, while encouraging patients to be more fully

engaged in the management of their own health.

Electronic portals are the prevailing patient engagement platforms in use today. Patient

portals are typically built by HER (electronic health records) vendors to serve as patient

engagement tools, and patients can use these portals to schedule appointments, check

test results, request prescription refills, and securely email their physicians. However,

patient portals are far from a patient engagement panacea, and the future state of PET

will likely move well beyond portals.

Mobile applications include a wide range of nutrition, fitness and general wellness

tracking apps, many of which interface with consumer wearables (e.g., Fitbit). However,

the mobile PET ecosystem is moving beyond those basic consumer functions to apps

that connect patients and providers, allowing providers to communicate with and track

progress of patients between visits.

Remote patient monitoring devices have shown great promise, particularly in

improving chronic disease management.

1 Capital Blue Cross, 2016

What do you consider to be the top three benefits of using patient engagement technology?

Support patients in

efforts to be healthy

Allow providers to track

patients between visits

Predictive analytics and

more timely intervention

Replace personnel-

intensive procedures

for patient monitoring19%

51%

60%

67%

Source: NEJM Catalyst (catalyst.nejm.org)

Which of the following technologies do you consider effective or very effective in engaging patients in their own care?

Biometric measurement

devices (e.g., wireless

scales or glucometers)

Mobile Apps

Wearables

Email

58%

63%

65%

68%

70%

75%

85%


Web-based interactive

programs (e.g., cognitive

behavioral therapy)

Portals

Texting

Benefits and Use Cases for PET

Patient “Ownership” of Their Own Health Management: PET tools empower patients –

as both consumers of healthcare services and as sources of relevant information that

physicians can use to deliver better care.

Predictive Analytics: The ability to continuously monitor key indicators of an individual

patient’s welfare enables providers to predict major health issues before they arise and

take preventative action. One recent study showed that use of remote monitoring

devices allowed heart failure patients to reduce hospitalizations by nearly a third,

while reducing annual patient care costs by more than $8,000 per patient.1

Streamlined Scheduling and Reduced Waiting Times: Portals allow patients to schedule

appointments, and centralized electronic storage of personal health records reduces

wasted time filling out redundant forms.

Prescription Compliance and Behavior Monitoring: Mobile applications allow patients

to easily track their medication use, exercise and dietary information, for example, and

share that information with their healthcare providers. Automatic text messages serve

as reminders for medication adherence.

Mental Health: Web-based interactive programs allow mental health professionals to

have more day-to-day interaction with patients than would be possible in a traditional

clinical setting.


PATIENT ENGAGEMENT TECHNOLOGY

Present State: Presently, the only PET technology that has seen widespreaddeployment are patient portals. According to a recent study, 88% of healthcareorganizations surveyed currently use or have plans to implement a patient portal.1

While portals provide some useful features, “effective, easy-to-use tools for helpingconsumers choose the right health plan, find the right physician, and make thehealthiest choices are few and far between.”2 In their current state, patient portalsare typically tied to a particular health system, as opposed to the individual patient –who likely has relevant health information in multiple systems. With regard to otherapproaches, such as patient-generated data, social networks and wireless/wearabledevices, most efforts are still in pilot or planning stages.

Future State: In the future, PET will extend well beyond health-system-based patientportals. While point solutions will continue to exist, and even further proliferate,interoperability will be the name of the game going forward, with a heavy emphasison applications that can integrate multiple touch points (e.g., portals) into a single,easy-to-use interface. The coming years will likely see an increased prevalence ofmobile solutions and apps, with an increasing focus on patient-providercommunication, including the continued expansion of telemedicine capabilities. Wecan also expect a deeper integration of wearables within the PET ecosystem, as thesedevices become more capable and the related applications more robust.

What are the top three barriers preventing providers from recommending technology tools for patient engagement?

Providers do not know

what to recommend

Unclear impact on

quality outcomes

Process not in place

for providers to

recommend tools

Difficulty integrating PET

tools with EMR systems

26%

29%

34%

37%

42%

67%


Cost to patient

Worried that there will be

too much data to digest1 Healthcare-Informatics.com2 Chilmark Research Analyst, Brian Eastwood

Patient Engagement Technology – Present State, Future State and the Hurdles in Between

Recent Relevant Investments

Acq

uir

or

Targ

et

Jun-2017 Apr-2017Jul-2017 Jun-2017

De

scri

pti

on • Later Stage VC

• Clinical communication platform for healthcare orgs.

Sep-2017

• Corporate• Digital healthcare

platform for patient health management

• Early Stage VC• Software platform for

healthcare-referral services

Sep-2017

• Early Stage VC• Cloud-based home

healthcare software

• Early Stage VC• Cloud-based

healthcare automation software

• Corporate• Healthcare platform

for improved diagnostics

Jun-2017

• Early Stage VC• Mobile patient

engagement platform for care management

Aug-2017

• Early Stage VC• Virtual care

platform for obstetrics


-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 Apr-17 Aug-17

S&P 500 NASDAQ Dow Jones Industrial Average

U.S. PPI, CPI and PCE

10-Year Treasury Rate

U.S. Unemployment & Labor

U.S. Market Indices

Sources: CapitalIQ , Federal Reserve Bank of St. Louis

U.S. ECONOMIC INDICATORS

Unemployment Rate

Labor Participation Rate

SP500 NSDQ DJIA

August 0.1% 1.3% 0.3%

LTM 13.9% 23.3% 19.3%

3-Year 23.4% 40.4% 28.4%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%


10-Year Teasury Rate

-3.0%

-2.5%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%


Consumer Price Index Producer Price Index Personal Consumption Expenditures

62.0%

62.2%

62.4%

62.6%

62.8%

63.0%

63.2%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%


Unemployment Rate Labor Participation Rate


Company Investor Date Sector

Aug 29Information

Services

Aug 28Information

Services

Aug 23 IT Outsourcing

Aug 17 IT Outsourcing

Aug 15Tech-Enabled

BPO

Aug 11 Healthcare IT

Source: Pitchbook*For deals with announced transaction value**Please contact the MHH Technology Services Group directly for any information regarding valuation and deal size

U.S. TECH SERVICES MIDDLE-MARKET PRIVATE EQUITY: BUY-OUT ACTIVITYSelect August 2017 Buy-Outs** PE Buy-Outs, Trailing 8 Quarters, as of August 31

PE Buy-Outs, by Deal Size PE Buy-Outs, Historical Annual, as of August 31

36%

17%14%

33%$0-25mm

$25-50mm

$50-100mm

$100-250mm

$0.0B

$0.5B

$1.0B

$1.5B

$2.0B

$2.5B

$3.0B

$3.5B

$4.0B

$4.5B

-

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017

Total CapitalNumber of Deals

Deal Count Total Capital Invested*

$0.0B

$0.2B

$0.4B

$0.6B

$0.8B

$1.0B

$1.2B

-

20

40

60

80

100

120

140

4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17


Add-Ons Platform Total Capital Invested*


Company Stage Date Sector

PE Growth / Expansion

Aug 25Information

Services

Later Stage VC


Later Stage VC

Aug 22Infrastructure

Services

Later Stage VC


PE Growth / Expansion

Aug 16Information

Services

Early Stage VC


U.S. TECH SERVICES MIDDLE-MARKET PRIVATE EQUITY: MINORITY ACTIVITYSelect August 2017 Minority Deals** PE Minority, Trailing 8 Quarters, as of August 31

PE Minority, by Stage PE Minority, Historical Annual, as of August 31

Source: Pitchbook*For deals with announced transaction value**Please contact the MHH Technology Services Group directly for any information regarding valuation, deal size, and investors

$0.0B

$0.5B

$1.0B

$1.5B

$2.0B

$2.5B

-

50

100

150

200

250

300

4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17



48%

27%

18%

7%

Angel / Seed

Early Stage VC

Later Stage VC

PE Growth/Expansion

$0.0B

$1.0B

$2.0B

$3.0B

$4.0B

$5.0B

$6.0B

$7.0B

$8.0B

0

200

400

600

800

1,000

1,200

2010 2011 2012 2013 2014 2015 2016 2017




-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%


Source: CapitalIQ

VALUATION & PERFORMANCE METRICS

Median Operational KPIs

Median Valuation Metrics

IT Outsourcing: technology services and consulting solutions, including engineering, application development, knowledge management and business process management

Business Process Outsourcing: services for administering and managing select technology-enabled business processes, including outsourced product development, finance and accounting, human resources, research and analytics, and other industry-specific processes

Infrastructure Services: providers of managed, hosting and consulting services around planning, designing, implementing and managing mission-critical IT infrastructure

Information Services: providers of independent rating, benchmarking, research and data analytic services

Healthcare IT: software and technology-related services focused on the design, development, creation, use and maintenance of information systems for the healthcare industry

ITO

BPO

IFS

IS

HIT

Sector Indices Performance, as of August 31, 2017

SP500 NSDQ ITO BPO IFS IS HIT

August 0.1% 1.3% 0.2% (9.3%) 2.8% 0.2% 1.8%

LTM 13.9% 23.3% 13.9% 17.4% 32.5% 19.7% 12.0%

3-Year 23.4% 40.4% 31.9% 37.8% 75.2% 65.9% 11.5%

16.0x

24.5x

19.4x

24.1x

29.7x

ITO BPO IFS IS HIT

FWD PRICE/EARNINGS

9.3%

7.5%

16.0%

16.0%

8.6%

HIT

IS

IFS

BPO

ITO

2017E REVENUE GROWTH

58.2%

62.5%

64.4%

37.6%

32.2%

HIT

IS

IFS

BPO

ITO

LTM GROSS MARGIN

11.8%

40.5%

24.5%

14.3%

18.3%

HIT

IS

IFS

BPO

ITO

LTM EBITDA MARGIN

2.1x2.5x

4.5x

6.6x

3.3x

ITO BPO IFS IS HIT

EV/2017E REVENUE

10.0x

14.1x12.7x

15.3x14.3x

ITO BPO IFS IS HIT

EV/2017E EBITDA


Valuation Metrics Relative Valuation

Select August 2017 Precedent Transactions*

Source: CapitalIQ*Please contact the MHH Technology Services Group directly for any information regarding valuation and deal size

Announced Acquirer Target Description

August 31 Security-focused IT consultancy services

August 23 Salesforce implementation and support

August 23 Digital solutions consultancy

August 9 Strategy and marketing services

August 3 Design services

($ in millions) Operating Metrics Valuation Multiples

LTM LTM

Market Revenue Gross EBITDA(2) EBITDA EV / Revenue EV / EBITDA

Company Cap (1) 2017E 2018E Margin 2017E 2018E Margin LTM 2017E 2018E LTM 2017E 2018E

Accenture plc (ACN) $80,808 $35,278 $37,698 31.6% $5,994 $6,455 17.0% 2.3x 2.2x 2.1x 11.9 x 13.0 x 12.1 x

Cognizant Technology Solutions Corporation (CTSH) $41,798 $14,797 $16,161 39.1% $2,945 $3,432 19.6% 2.7x 2.6x 2.4x 12.9 x 13.0 x 11.2 x

Infosys Limited (INFY) $32,682 $10,867 $11,555 35.4% $2,898 $3,046 27.1% 2.6x 2.5x 2.4x 9.7 x 9.5 x 9.0 x

HCL Technologies Limited (HCLTECH) $22,617 $8,646 $8,804 28.8% $1,788 $1,662 19.8% 2.2x 2.2x 2.2x 11.2 x 10.7 x 11.5 x

Wipro Limited (WIT) $19,296 $7,863 $8,300 33.7% $1,788 $1,811 22.4% 2.5x 2.3x 2.2x 11.2 x 10.1 x 9.9 x

Atos SE (ENXTPA:ATO) $16,115 $15,217 $15,527 13.9% $1,901 $2,034 13.3% 1.2x 1.1x 1.1x 8.4 x 8.6 x 8.0 x

Atos SE (ATO) $14,759 $9,037 $9,242 30.1% $1,629 $1,725 16.8% 1.9x 1.8x 1.7x 10.6 x 9.8 x 9.2 x

Syntel, Inc. (SYNT) $1,511 $884 $883 38.0% $219 $226 26.7% 2.0x 2.1x 2.1x 7.1 x 8.3 x 8.1 x

Virtusa Corporation (VRTU) $1,063 $933 $1,013 28.0% $64 $93 6.0% 1.3x 1.2x 1.1x 15.5 x 18.0 x 12.3 x

Perficient, Inc. (PRFT) $643 $494 $530 32.8% $71 $83 10.5% 1.6x 1.4x 1.3x 11.5 x 9.9 x 8.5 x

Mean $23,129 $10,402 $10,971 31.1% $1,930 $2,057 17.9% 2.0x 1.9x 1.8x 11.0x 11.1x 10.0x

Median $17,706 $8,841 $9,023 32.2% $1,788 $1,768 18.3% 2.1x 2.1x 2.1x 11.2x 10.0x 9.6x

NA = Not Available; NM = Not Meaningful; LTM = Latest Twelve Months As of close August 31, 2017.

‡ = excluded from Mean and Median calculations Excludes non-recurring, discontinued operations and stock-based compensation

Source: Public Filings, Press Releases and Published Research Reports

(1)

(2)

ACN CTSH

INFY

HCLTECH

WIT

ATOGIB.A

SYNT

VRTU

PRFT

0.0 x

2.0 x

4.0 x

6.0 x

8.0 x

10.0 x

12.0 x

14.0 x

16.0 x

18.0 x

20.0 x

-20.0% -10.0% 0.0% 10.0% 20.0% 30.0%

EV/EBITDA (2017E)

Revenue Growth (2017E)

ACN

CTSH INFY

HCLTECHWIT

ATO

GIB.A

SYNT

VRTU

PRFT

0.0 x

0.5 x

1.0 x

1.5 x

2.0 x

2.5 x

3.0 x

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

EV/Revenue (2017E)

Revenue Growth (2017E) + EBITDA Margin (LTM)

IT OUTSOURCING


3.

Valuation Metrics


BUSINESS PROCESS OUTSOURCING


August 24 HR recruiting and tracking software solutions

August 21 HR consulting services

August 16 Inbound call center services

August 2 . Photo inspection software platform for P&C

insurance carriers

August 2 Executive benefit plan solutions

Source: CapitalIQ*Please contact the MHH Technology Services Group directly for any information regarding valuation and deal size

Relative Valuation


LTM LTM



Automatic Data Processing, Inc. (ADP) $47,313 $12,676 $13,410 43.1% $2,603 $2,904 22.0% 3.8x 3.7x 3.5x 16.3 x 17.9 x 16.0 x

Genpact Limited (G) $5,488 $2,693 $2,870 39.2% $448 $487 16.7% 2.4x 2.3x 2.2x 13.7 x 14.1 x 13.0 x

EPAM Systems, Inc. (EPAM) $4,272 $1,430 $1,722 36.5% $257 $318 14.3% 3.0x 2.7x 2.2x 16.2 x 15.0 x 12.1 x

ExlService Holdings, Inc. (EXLS) $1,899 $757 $829 34.3% $129 $150 14.0% 2.4x 2.3x 2.1x 14.0 x 13.2 x 11.4 x

WNS (Holdings) Limited (WNS) $1,769 $679 $760 32.3% $128 $144 13.6% 2.7x 2.5x 2.2x 15.3 x 13.3 x 11.7 x

Luxoft Holding, Inc. (LXFT) $1,696 $885 $1,051 38.2% $136 $181 10.9% 2.0x 1.8x 1.5x 13.2 x 11.7 x 8.8 x

Globant S.A. (GLOB) $1,358 $401 $482 37.6% $63 $81 14.5% 3.7x 3.3x 2.8x 22.0 x 21.0 x 16.4 x

Mean $9,114 $2,789 $3,018 37.3% $538 $609 15.1% 2.8x 2.7x 2.4x 15.8x 15.2x 12.8x

Median $1,899 $885 $1,051 37.6% $136 $181 14.3% 2.7x 2.5x 2.2x 15.3x 14.1x 12.1x




(1)

(2)

ADP

G EPAM

EXLS WNS LXFT

GLOB

0.0 x

5.0 x

10.0 x

15.0 x

20.0 x

25.0 x

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

EV/EBITDA (2017E)


ADP

G EPAM

EXLS

WNS

LXFT

GLOB

0.0 x

0.5 x

1.0 x

1.5 x

2.0 x

2.5 x

3.0 x

3.5 x

4.0 x

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

EV/Revenue (2017E)



Valuation Metrics


INFRASTRUCTURE SERVICES

Source: CapitalIQ*Please contact the MHH Technology Services Group directly for any information regarding valuation and deal size**Excluded: WIX


August 25 . Cloud hosting services

August 21 2 U.S. enterprise-grade data centers

August 21 Data management software

August 9 Cloud services for enterprise applications and

data management

August 8 Data networking solutions

Relative Valuation**


LTM LTM



Equinix, Inc. (EQIX) $36,510 $4,324 $4,937 50.4% $2,036 $2,394 42.0% 11.5x 10.3x 9.1x 24.9 x 22.0 x 18.7 x

United Internet AG (UTDI) $11,882 $4,989 $5,566 34.5% $1,113 $1,296 21.5% 3.0x 2.8x 2.5x 14.0 x 12.5 x 10.8 x

Zayo Group Holdings, Inc. (ZAYO) $8,422 $2,480 $2,657 64.4% $1,235 $1,349 45.5% 6.3x 5.6x 5.2x 12.4 x 11.2 x 10.3 x

VeriSign, Inc. (VRSN) $10,367 $1,161 $1,202 82.9% $810 $851 65.0% 9.1x 9.0x 8.7x 13.0 x 12.9 x 12.2 x

GoDaddy Inc. (GDDY) $4,986 $2,221 $2,542 64.4% $543 $667 11.9% 3.8x 3.4x 3.0x 24.8 x 14.0 x 11.4 x

DuPont Fabros Technology, Inc. (DFT) $5,042 $576 $652 66.7% $362 $412 61.2% 13.7x 12.9x 11.4x 21.9 x 20.6 x 18.1 x

Endurance International Group Holdings, Inc. (EIGI) $1,102 $1,169 $1,191 50.2% $332 $339 24.0% 2.6x 2.6x 2.5x 8.8 x 9.1 x 8.9 x

Wix.com Ltd. (WIX) $2,959 $423 $558 84.1% $76 $134 -10.1% 7.8x 6.6x 5.0x NM 36.5 x 20.6 x

Web.com Group, Inc. (WEB) $1,107 $756 $787 68.8% $192 $206 20.1% 2.3x 2.3x 2.2x 10.0 x 8.9 x 8.3 x

Internap Corporation (INAP) $347 $282 $280 49.6% $88 $90 24.5% 2.8x 2.9x 2.9x 11.1 x 9.3 x 9.1 x

Mean $8,272 $1,838 $2,037 61.6% $679 $774 35.1% 6.3x 5.8x 5.3x 15.7x 15.7x 12.8x

Median $5,014 $1,165 $1,196 64.4% $453 $540 24.5% 5.0x 4.5x 4.0x 13.0x 12.7x 11.1x




(1)

(2)

EQIX

UTDI ZAYO

VRSN GDDY

DFT

EIGI WEB

INAP

0.0 x

5.0 x

10.0 x

15.0 x

20.0 x

25.0 x

-10.0% 0.0% 10.0% 20.0% 30.0%

EV/EBITDA (2017E)


EQIX

UTDI

ZAYO

VRSN

GDDY

DFT

EIGI

WEB

INAP

0.0 x

2.0 x

4.0 x

6.0 x

8.0 x

10.0 x

12.0 x

14.0 x

0.0% 20.0% 40.0% 60.0% 80.0%

EV/Revenue (2017E)



TECHNOLOGY SERVICES: INFORMATION SERVICES

Valuation Metrics


INFORMATION SERVICES

Source: CapitalIQ*Please contact the MHH Technology Services Group directly for any information regarding valuation and deal size**Gartner (IT) y/y growth rate pro forma adjusted for the acquisition of CEB, Inc.


August 29 Best practices research and data-enabled

services

August 24 Bankruptcy risk prediction and management

tools

August 21 Insurance software solutions

August 7 Predictive social data analytics

August 2 Real-time analysis of cloud usage data



LTM LTM



S&P Global Inc. (SPGI) $39,663 $5,874 $6,214 70.6% $2,757 $2,947 45.9% 7.2x 7.2x 6.8x 15.3 x 15.2 x 14.3 x

Quintiles IMS Holdings, Inc. (Q) $20,793 $8,032 $8,518 41.6% $2,003 $2,177 21.6% 4.2x 3.6x 3.4x 17.9 x 14.5 x 13.3 x

Moody's Corporation (MCO) $25,600 $3,983 $4,303 71.8% $1,886 $2,067 47.9% 7.1x 6.9x 6.4x 14.1 x 14.5 x 13.2 x

IHS Markit Ltd. (INFO) $18,580 $3,546 $3,707 61.5% $1,393 $1,503 29.1% 6.7x 6.3x 6.1x 17.9 x 16.1 x 14.9 x

Verisk Analytics, Inc. (VRSK) $13,337 $2,094 $2,224 63.6% $1,019 $1,099 46.4% 7.7x 7.4x 7.0x 16.7 x 15.3 x 14.2 x

Gartner, Inc. (IT) $10,925 $3,328 $4,036 60.2% $699 $852 13.6% 5.0x 4.1x 3.4x 30.8 x 19.7 x 16.1 x

MSCI Inc. (MSCI) $10,322 $1,267 $1,379 78.1% $658 $734 50.7% 9.7x 9.2x 8.4x 18.1 x 17.7 x 15.9 x

FactSet Research Systems Inc. (FDS) $6,166 $1,262 $1,360 55.5% $430 $463 35.0% 5.5x 5.2x 4.8x 14.8 x 15.2 x 14.1 x

Mean $18,173 $3,673 $3,968 62.8% $1,356 $1,480 36.3% 6.7x 6.2x 5.8x 18.2x 16.0x 14.5x

Median $15,959 $3,437 $3,871 62.5% $1,206 $1,301 40.5% 6.9x 6.6x 6.2x 17.3x 15.3x 14.2x




(1)

(2)

SPGI

Q MCO

INFO

VRSK

IT MSCI

FDS

0.0 x

4.0 x

8.0 x

12.0 x

16.0 x

20.0 x

24.0 x

0.0% 5.0% 10.0% 15.0%

EV/EBITDA (2017E)


SPGI

Q

MCO INFO

VRSK

IT

MSCI

FDS

0.0 x

1.0 x

2.0 x

3.0 x

4.0 x

5.0 x

6.0 x

7.0 x

8.0 x

9.0 x

10.0 x

0.0% 20.0% 40.0% 60.0% 80.0%

EV/Revenue (2017E)


(Healthcare Division)


TECHNOLOGY SERVICES: INFORMATION SERVICES


August 17 Cloud-based healthcare technology

August 8 Enterprise cloud-based technologies

August 4 Healthcare IT services

August 3 Portfolio of EHR, RCM and content management

assets

August 1 Virtual inventory healthcare software

Valuation Metrics


HEALTHCARE IT

Source: CapitalIQ*Please contact the MHH Technology Services Group directly for any information regarding valuation and deal size**Excluded: CSLT



LTM LTM



Cerner Corporation (CERN) $22,475 $5,206 $5,637 85.2% $1,709 $1,873 28.0% 4.6x 4.3x 4.0x 15.4 x 13.1 x 12.0 x

Veeva Systems Inc. (VEEV) $8,315 $674 $805 69.3% $219 $265 25.0% 12.3x 11.3x 9.4x 37.5 x 34.6 x 28.6 x

athenahealth, Inc. (ATHN) $5,627 $1,225 $1,390 51.7% $267 $314 11.1% 5.1x 4.8x 4.2x 29.8 x 21.9 x 18.6 x

Allscripts Healthcare Solutions, Inc. (MDRX) $2,373 $1,786 $2,090 49.6% $369 $414 9.7% 2.5x 2.3x 2.0x 20.1 x 11.1 x 9.9 x

WebMD Health Corp. (WBMD) $2,470 $726 $745 63.4% $240 $247 26.0% 3.4x 3.3x 3.2x 11.2 x 10.0 x 9.7 x

Inovalon Holdings, Inc. (INOV) $1,976 $452 $492 64.4% $110 $125 16.0% 4.0x 3.8x 3.4x 21.1 x 15.5 x 13.6 x

Quality Systems, Inc. (QSII) $998 $524 $538 56.5% $79 $86 11.8% 2.0x 1.9x 1.9x 14.6 x 12.9 x 11.8 x

National Research Corporation (NRCI.B) $863 $119 $128 58.2% $40 $44 34.2% 7.3x 7.0x 6.5x 20.5 x 20.9 x 18.9 x

HealthStream, Inc. (HSTM) $749 $247 $270 56.5% $36 $43 9.9% 2.7x 2.6x 2.3x 24.8 x 17.4 x 14.8 x

Computer Programs and Systems, Inc. (CPSI) $414 $269 $282 52.7% $48 $53 10.9% 2.1x 2.1x 2.0x 16.4 x 11.6 x 10.5 x

Castlight Health, Inc. (CSLT) $514 $133 $170 67.8% ($26) ($12) -42.3% 3.7x 3.2x 2.5x NM NM NM

Mean $4,626 $1,123 $1,238 60.7% $312 $346 18.3% 4.6x 4.3x 3.9x 21.1x 16.9x 14.8x

Median $1,976 $524 $538 58.2% $110 $125 11.8% 3.7x 3.3x 3.2x 20.3x 14.3x 12.8x




(1)

(2)

CERN

VEEV

ATHN

MDRX WBMD

INOV QSII

NRCI.B

HSTM

CPSI

0.0 x

5.0 x

10.0 x

15.0 x

20.0 x

25.0 x

30.0 x

35.0 x

40.0 x

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

EV/EBITDA (2017E)


CERN

VEEV

ATHN

MDRX

WBMD

INOV

QSII

NRCI.B

HSTM CPSI

0.0 x

2.0 x

4.0 x

6.0 x

8.0 x

10.0 x

12.0 x

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

EV/Revenue (2017E)


(Information Solutions)


The Mufson Howe Hunter Technology Services IndicesIT Outsourcing is currently comprised of: ACN, CTSH, INFY, NESI:HCLTECH, GIB.A, WIT, ENXTPA:ATO, SYNT, VRTU, PRFT; Business Process Outsourcing Index is currently comprised of: ADP, G, EPAM, LXFT, EXLS, WNS,GLOB; Infrastructure Services Index is currently comprised of: EQIX, ZAYO, UTDI, VRSN, DFT, GDDY, EIGI, WIX, WEB, INAP; Information Services Index is currently comprised of: SPGI, Q, MCO, INFO, VRSK, IT, MSCI, FDS;and, Healthcare IT is currently comprised of: CERN, VEEV, ATHN, MDRX, WBMD, INOV, QSII, HSTM, NRCI.B, CPSI, CSLT.

The companies that comprise each Index periodically change as a result of mergers, acquisitions, initial public offerings and other transactions; therefore, comparisons to historical time periods and historicalperformance for each Index may not entirely correspond and correlate to the Index’s current performance. Historical performance is not a guarantee or prediction of future results. The information and statistical datacontained herein have been obtained from sources that Mufson Howe Hunter believes are reliable, but Mufson Howe Hunter makes no representation or warranty as to the accuracy or completeness of any suchinformation and data and expressly disclaims any and all liability relating to or resulting from your use of these materials. The information and data contained herein are current only as of the date(s) indicated andMufson Howe Hunter has no intention, obligation or duty to update these materials after such date(s). These materials do not constitute an offer to sell or the solicitation of an offer to buy any securities.

Copyright © August 2017 Mufson Howe Hunter & Company LLC. All rights reserved. Technology Services Monthly is produced monthly by Mufson Howe Hunter. Mufson Howe Hunter provides a full range of investment

banking services to Technology Services companies. For more information, visit www.mhhco.com.Icons by Flaticon.

1717 Arch Street, 39th Floor · Philadelphia, PA 19103 · www.mhhco.com

Brandon EckManaging Director,

Head of Technology Services


For more information, please contact:

Andrew WilsonVice President,

Technology Services


TECHNOLOGY SERVICES MONTHLY Healthcare IT: Patient …€¦ · MHH | Technology Services Group 5...

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