BOSTON

CHICAGO

LONDON

LOS ANGELES

PHILADELPHIA

SAN DIEGO

SILICON VALLEY

TAMPA

Q1 2015 STAFFING & TALENT MANAGEMENT

CONTACTS John Ferrara Founder, President (617) 619‐3325 jferrara@capstonellc.com Daniel Schultz Director of Business Development (617) 619-3368 dschultz@capstonellc.com

MERGERS AND ACQUISITIONS: 2014 REVIEW

Merger & acquisition activity in the staffing sector outperformed other segments in 2014, as the industry benefitted from a much improved employment situation, making acquisitions more attractive. Capstone’s research indicates that 182 staffing & talent management transactions were reported in 2014, the highest figure since 2007 and a new industry record. Staffing industry employment has now returned to pre-recession levels as businesses continue to increase the size of their flexible and permanent workforces in response to a rise in demand for their products and services. A favorable operating environment and positive financial results for industry participants have attracted both corporate and private equity buyers. All sectors of the industry are represented in recent transactions, including temporary and permanent staffing, executive search and recruitment, PEO and others. In addition, there is healthy activity in the various market verticals including IT, healthcare, legal, finance & accounting, commercial and industrial staffing. Sellers of high performing staffing businesses are attracting strong interest from multiple buyers, resulting in healthy valuations and attractive offers. 2015 OUTLOOK

U.S economic growth is expected to accelerate in 2015, resulting in the most favorable hiring outlook since 2006. With such positive conditions as a backdrop, Capstone expects strong M&A activity in the industry in 2015, driven by eager, well-capitalized buyers. These include corporate buyers, who as a group have an unprecedented level of cash on their balance sheets, as well as private equity firms, which collectively have an estimated $535 billion of capital to deploy. The M&A cycle appears to be entering its “boom” phase, during which activity – and valuation premiums – often rise sharply. The deal closing pace has improved, with the due diligence and documentation timeline becoming more accelerated. The end result is a very attractive seller’s market, which could yield exceptional opportunities for privately held middle-market companies.

Staffing & Talent Management Industry: M&A Transaction Volume

Sources: Capstone Partners LLC research, Capital IQ, Thomson Reuters

138 125

139

87 73

91 87 103

133

182

0

20

40

60

80

100

120

140

160

180

200

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Trends in hiring practices

indicate that the staffing

industry will continue to

play an increasingly

vital role in the U.S.

employment market.

Capstone Partners LLC 2

Staffing & Talent Management Q1 2015

INDUSTRY GROWTH SUPPORTS M&A ACTIVITY

The staffing industry is sensitive to economic conditions, with industry results improving along with advancements in the economy. The industry gained substantial momentum over the last five years, outpacing economic growth and expanding at a CAGR of approximately 7% over that period. The $134 billion industry is projected to grow at a 4% compound annual rate to $163 billion in 2019.

The industry is expected to remain strong for the next several years, supported by better economic conditions, falling unemployment and improved business sentiment. Trends in hiring practices indicate that the staffing industry will continue to play an increasingly vital role in the U.S. employment market, particularly among labor-intensive businesses seeking to improve the quality and flexibility of their workforces in order to more effectively compete and adjust to changing market conditions. Temporary staffing, executive recruitment and permanent staffing services are all expected to be in high demand, as are the various vertical markets shown below.

Source: IBIS World

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$Bill

ion

s

U.S. Staffing Industry Revenue and Projected Growth, 2005 – 2019

Industrial & Warehouse 27%

Office, Clerical & Admin. 23% Healthcare 14%

IT 13%

Engineering & Science 5%

Accounting & Financial 4%

Other 14%

Source: IBIS World

Industry Revenue by Market

As customer demands

increase, staffing firms are

looking to differentiate

their offerings by making

acquisitions to expand

their services, add vertical

market expertise, and

expand their geographic

reach.

Capstone Partners LLC 3

Staffing & Talent Management Q1 2015

STAFFING INDUSTRY GROWTH DRIVERS

Several market conditions are converging to support healthy growth in the staffing & talent management industry, including those outlined below.

Economic & Job Growth: Employers in the U.S. added nearly 3 million jobs in 2014, making it the best year for job growth since 1999. Both CEO optimism and hiring plans are trending up for 2015, according to the Institute of Supply Management. Manufacturing employment is expected to increase 1.5% in 2015 and non-manufacturing employment is expected to rise 1.7%. Employment gains will be driven by GDP growth, which the National Association for Business Economics (NABE) predicts will reach 3.1% in 2015, a marked improvement over the 2.2% rate in 2014. Such economic growth is likely to sustain strong job growth and accelerate wage increases, all positive indicators for the staffing industry.

Talent Shortage: As the economy improves and hiring needs grow, employers are expected to rely more on the staffing industry for qualified job candidates. Difficulty locating talent and a lack of skills among applicants are some of the most significant issues that employers face. This “talent crunch” has resulted in businesses turning to staffing professionals to find, hire and train employees.

Healthcare Reform: The implementation of the Patient Protection and Affordable Care Act (“PPACA”), which requires employers with more than 50 full-time employees to provide affordable healthcare to workers, is also affecting demand. The burden of providing health insurance has provided another incentive for businesses to use temporary labor, which typically requires only minimal levels of essential coverage.

Human Resources Outsourcing Trends: Staffing agencies are providing more complete HR outsourcing and value-added services that increase the length and depth of their relationships with customers. These services include Managed Service Provider (“MSP”) and Recruitment Process Outsourcing (“RPO”) solutions, both of which offer efficiency and cost savings benefits to employers.

Increased Role of Technology: The use of technology in the recruitment and hiring process is substantial, from automated screening processes to psychometric online evaluations. As a result, employers are turning to the expertise of staffing firms to manage the more sophisticated hiring process.

Business Process Outsourcing: As companies seek to outsource a greater share of their internal business processes, they are likely to utilize more temporary employees who possess the necessary skillset and background to complete specific tasks.

Growing Professions: The increasing complexity of information technology systems and the migration to cloud-based systems is driving demand for IT staffing services. At the same time, demographic trends in the U.S. along with the impact of PPACA, is increasing demand for healthcare services, with hospitals continually under pressure to keep talented personnel on staff. These dynamics bode well for staffing companies active in the IT and healthcare markets.

As customer demands increase, staffing firms are looking to differentiate their offerings, using acquisitions to expand their services, add vertical market expertise and expand their geographic reach. Companies with a track record of strong growth and margins, talented management teams, deep client relationships and a diversified base of customers are in high demand by acquirers.

SELECT M&A TRANSACTIONS

Capstone Partners LLC 4

Staffing & Talent Management Q1 2015

Enterprise Value ($mm)

EV / LTM

Revenue EBITDA Date Target Acquirer Target Business Description

02/05/15 CTPartners Executive Search

DHR International Provides retained executive search services worldwide.

$75.3 0.4x 4.4x

02/05/15 Haney/Lowderman The Wetrich Group Provides career transition services to healthcare executives.

- - -

01/20/15 Precision Professionals

CRMPoint.net Provides IT search services to multi-national firms and growing organizations in the United States.

- - -

01/19/15 VISTA Staffing Solutions

EmCare Provides temporary physician staffing and permanent physician search services.

$123.0 0.9x -

01/05/15 EmployBridge Holding Company

Eastern Staffing Provides industry-specific staffing solutions and workforce management strategies.

$410.0 - -

12/22/14 Apollo Consultants BANK W Holdings Operates as a staffing firm serving the accounting and finance sectors.

- - -

12/17/14 Onward Healthcare AMN Healthcare Provides integrated travel and local per diem staffing for nursing and allied health professionals.

$82.5 - -

12/16/14 Whitney Partners Penrhyn International Provides executive search services to financial institutions, funds and MNCs.

- - -

12/12/14 Scribe Solutions General Employment Enterprises

Engages in recruiting, staffing and managing emergency department medical scribes.

- - -

12/04/14 Veredus Corporation Hays A technical staffing company, provides information technology (IT) staffing services in the United States.

$44.0 - 8.3x

11/20/14 Oasis Outsourcing Stone Point Capital A professional employer organization, provides workforce solutions in the United States.

- - -

11/18/14 Bridge Employment Services

Employee Solutions Offers full-service employment agency services. - - -

11/14/14 Hyperspring and 50% interest in IntelliQlik

GSE Power Systems Provides staff augmentation, training and development and plant operations support services.

$11.9 - -

11/13/14 Hirease Accurate Background Operates as a background screening company that provides pre-employment verification services.

- - -

11/01/14 Shipyard Staffing ARC Industries; Succession Capital

Provides recruitment & placement of skilled tradesmen for the shipyard/marine industry.

- - -

11/01/14 Gaines International Allen Austin Provides executive search and recruitment services. - - -

10/30/14 PRO Unlimited Investcorp Bank Develops contingent workforce management solutions for Global and Fortune 500 companies worldwide.

$300.0 - -

10/22/14 Premier Physician Services

Team Health Holdings Provides emergency department (ED) management and staffing services.

- - -

10/13/14 Priority Staffing Services

PriorityWorkforce Provides temporary placement services. - - -

10/03/14 Vaco Quad-C Management Provides placement services for senior-level accounting, financial, IT & administrative staff.

- - -

10/03/14 AdminHR Lyons HR A professional employer organization, provides human resources services for small to mid-sized businesses.

- - -

10/02/14 Internships Chegg Interactive tools & services to enable students, employers and educators to optimize internships.

$11.0 - -

09/30/14 The Johnsson Group Salo Project Provides financial and human resources staffing. - - -

09/29/14 Kwik Jobs Labor Smart Provides temporary skilled/unskilled manpower for general contractors and related companies.

- - -

09/26/14 Clearwater Legal Staffing

Choice Legal Solutions

Provides staffing services to legal companies. - - -

09/22/14 Discovery Services eTERA Consulting Provides managed review and legal staffing solutions to law firms, legal departments and government.

- - -

09/18/14 Synergy Seven Xtreme Consulting Group

Provides contract technical placement, professional services/solutions, direct hiring and HR services.

- - -

SELECT M&A TRANSACTIONS (CONTINUED)

Capstone Partners LLC 5

Staffing & Talent Management Q1 2015

Enterprise Value ($mm)

EV / LTM

Revenue EBITDA Date Target Acquirer Target Business Description

09/15/14 Allied Health Division of PARX Group

Accountable Healthcare

Provides healthcare staffing solutions. - - -

09/10/14 Emergency Medicine Specialists

Team Health Holdings Provides physician staffing solutions to hospitals. - - -

09/09/14 Gulf-to-Bay Anesthesiology

Team Health Holdings Provides anesthesia and pain management services to hospitals and surgery centers.

- - -

09/08/14 Heartland Anesthesia Team Health Holdings Offers anesthesia management services for hospitals. - - -

09/04/14 Las Vegas branch of Elite Resources

Millenium Staffing Solutions

Provides staffing services to businesses in the Las Vegas, Nevada area.

- - -

09/03/14 Teaneck Emergency Physicians

Team Health Holdings Manages and staffs emergency departments. - - -

09/03/14 Cavoure Chartwell Partners Provides executive search services for clients across multiple industries.

- - -

09/02/14 CVPartners Addison Group Offers executive recruiting services for senior level positions in technical fields.

- - -

09/02/14 Trident Emergency Physicians

Team Health Holdings

Offers staff for physician practices and manages hospital emergency departments.

- - -

08/21/14 SumTotal Skillsoft Provides integrated human resources solutions to customers worldwide.

- - -

08/20/14 Sound Advice Consulting Services

Aequor Technologies Offers staff augmentation services to the life sciences sector in the United States.

- - -

08/06/14 Sally White & Associates

IMPACT Group Provides spouse/partner career management, relocation assistance and outplacement solutions.

- - -

08/04/14 himagine solutions (Kforce Healthcare)

Beecken Petty O'Keefe & Company

Offers staffing, consulting and outsourcing services for health information technology.

$119.0 - -

08/01/14 RISE Therapy Services TNR Staffing Provides therapists staffing services for geriatric home care settings.

- - -

07/31/14 Professional Computer Resources

CRG Workforce Offers staffing services specializing in IT staffing. - - -

07/31/14 HLP Solutions Mitchell Martin Provides contract-to-hire, temporary-to-hire, direct hire and contingency workforce recruiting services.

- - -

07/20/14 Spencer Reed Group, Commercial Staffing

Elwood Staffing Services

Provides temporary commercial staffing services. - - -

07/11/14 Metz&Baum Healthcare

Source One Healthcare Professionals

Provides healthcare staffing services in various specialties.

- - -

07/08/14 RezBiz Talent Provides professional resume writing services, LinkedIn makeover and related career services.

- - -

07/07/14 MedAscend Accountable Healthcare Staffing

Provides medical staffing services in various medical specialties including physicians and nurses.

- - -

07/01/14 Actium Consulting Peoplelink Staffing Solutions

Provides project-driven IT staffing and consulting services.

- - -

07/01/14 Personnel Profiling Mountjoy Chilton Medley

Provides employment assessments, employment screening and hiring assistance.

- - -

07/01/14 Retail Search Group PrincetonOne Provides recruiting services for the retail industry. - - -

07/01/14 bkoAustin HireBetter Provides chief financial officers and chief information officers on an interim or project basis.

- - -

06/30/14 Rollouts Ingram Micro Provides technical staff for cable rollout and facility projects in the United States and Canada.

- - -

06/28/14 CECOR Staffing Essential Personnel Provides temp, temp-to-hire, permanent placement, contract, executive search and direct to hire staffing.

- - -

06/26/14 Sullivan Healthcare Consulting

Jackson Healthcare Provides interim staffing to hospitals and ambulatory surgical centers in the United States and Canada.

- - -

SELECT M&A TRANSACTIONS (CONTINUED)

Capstone Partners LLC 6

Staffing & Talent Management Q1 2015

Enterprise Value ($mm)

EV / LTM

Revenue EBITDA Date Target Acquirer Target Business Description

06/25/14 AJASA Technologies TechDigital Corporation

Provides staffing and managed services for the technology consulting community.

- - -

06/15/14 My Therapy Company Shore Capital Partners Offers therapists and special education teachers for schools.

- - -

06/04/14 Performance-Based Selection

PSI Services Provides employee selection, development and retention services.

- - -

06/02/14 Medical Staffing Network Healthcare

Cross Country Healthcare

Provides healthcare staffing solutions on a temporary and contract basis.

$48.3 0.2x -

06/02/14 Seaton TrueBlue Provides HR outsourcing and recruiting services in the United States and internationally.

$310.0 0.5x 15.2x

05/20/14 Hire Talent Arrow Strategies Offers recruitment services for information technology and engineering professionals.

- - -

05/12/14 Acclaimd eBoss Online Recruitment Solutions

Provides social media-based human resource recruiting tools.

- - -

05/09/14 Advance Employment Enterprises

AccessPoint Specializes in recruiting, screening, qualifying and evaluating potential employees.

- - -

05/02/14 FD Careers Bright Mountain Holdings

Operates a job search and career website for firefighters in the United States.

- - -

04/28/14 PartnerJD TrustPoint International

Provides e-Discovery and litigation support staffing solutions for law firms and corporations.

- - -

04/25/14 Boxwood Technology Naylor Provides online career centers, career fairs and career-related services to employers.

- - -

04/22/14 Montgomery Professional Services

Global Upside Offers recruiting, temporary staffing and onsite outsourced accounting services.

- - -

04/18/14 HireStrategy Addison Group Provides contract, direct hire and executive search solutions for IT, accounting and other positions.

- - -

04/10/14 Integral Resources Noor Provides finance, IT and legal recruiting services for the legal community.

- - -

04/09/14 Parallel Partners Next Step Systems Engages in the recruitment of information technology personnel for direct hire positions.

- - -

04/01/14 Profiles International John Wiley & Sons Provides employment assessments and human resource management solutions.

$51.0 1.8x 9.6x

03/27/14 PeopleAdmin Vista Equity Partners Provides talent and performance management solutions for higher education and government.

- - -

03/13/14 Engineering Laboratories

ASG Renaissance Offers engineering and technical staffing services. - - -

03/13/14 SchoolSpring Netchemia Provides online employment solutions for job seekers and recruiters in the education market.

- - -

03/12/14 ProSearch Marcum Search Provides staffing services to small businesses and large corporations in the United States.

- - -

03/03/14 Nationwide Screening Services

Corporate Resource Services

Provides employee, tenant and vendor screening services.

- - -

03/03/14 Total Rehab Services Lutheran Social Services of Michigan

Provides therapy staffing services to hospitals, home care agencies, school systems and others.

- - -

02/28/14 W2 Financial Staffing CRG Workforce Provides staffing services for professionals in the fields of accounting, finance and human resources.

- - -

02/27/14 New Directions Search

ZRG Partners Offers executive recruitment consulting and search services to manufacturing and service companies.

- - -

02/26/14 The Delta Companies Mitsui & Co. Provides permanent and temporary staffing services for physicians and allied healthcare professionals.

- - -

02/24/14 TalentBin Monster Worldwide Operates a talent search engine to assist HR recruiters in finding candidates.

- - -

LTM = Last Twelve Months; EV = Enterprise Value Source: Capstone Partners LLC research, Capital IQ, Bloomberg, company public filings and press releases

EV = enterprise value; LTM = last twelve months

$ in millions, except per share data

NM = Not Meaningful; NA = Not Available

PUBLIC COMPANY TRADING & OPERATING DATA

Last Twelve Month Margin Performance

Source: Capital IQ as of February 15, 2015

Staffing & Talent Management Q1 2015

Capstone Partners LLC 7

Price Market Enterprise LTM EV / LTM

Company 2/15/15 Cap Value Revenue EBITDA Margin Revenue EBITDA

Adecco S.A. $76.22 $ 13,650.3 $ 15,145.3 $ 25,002.8 $ 975.0 3.9% 0.6x 15.5x

AMN Healthcare Services Inc. $20.56 $ 958.8 $ 1,095.3 $ 1,005.0 $ 84.0 8.4% 1.1x 13.0x

CDI Corp. $18.02 $ 353.5 $ 313.2 $ 1,133.4 $ 37.2 3.3% 0.3x 8.4x

Cross Country Healthcare, Inc. $11.13 $ 347.9 $ 405.8 $ 538.9 $ 11.3 2.1% 0.8x 36.0x

Heidrick & Struggles International $23.30 $ 425.1 $ 296.4 $ 491.0 $ 40.3 8.2% 0.6x 7.4x

Kelly Services, Inc. $18.00 $ 677.4 $ 686.2 $ 5,562.7 $ 55.6 1.0% 0.1x 12.3x

Kforce Inc. $23.24 $ 710.9 $ 803.5 $ 1,217.3 $ 58.9 4.8% 0.7x 13.6x

Korn/Ferry International $30.35 $ 1,528.6 $ 1,254.5 $ 1,000.8 $ 129.7 13.0% 1.3x 9.7x

ManpowerGroup Inc. $77.51 $ 6,134.1 $ 5,904.0 $ 20,762.8 $ 803.7 3.9% 0.3x 7.3x

On Assignment Inc. $37.69 $ 1,973.0 $ 2,346.8 $ 1,809.3 $ 178.7 9.9% 1.3x 13.1x

Randstad Holding NV $54.18 $ 9,743.4 $ 10,497.7 $ 21,495.6 $ 661.3 3.1% 0.5x 15.9x

Resources Connection Inc. $17.46 $ 657.3 $ 554.0 $ 584.5 $ 49.9 8.5% 0.9x 11.1x

Robert Half International Inc. $61.42 $ 8,152.6 $ 7,866.8 $ 4,695.0 $ 546.3 11.6% 1.7x 14.4x

TrueBlue, Inc. $22.79 $ 968.9 $ 1,148.5 $ 2,174.0 $ 111.2 5.1% 0.5x 10.3x

Mean 6.2% 0.8x 13.4x

Median 5.0% 0.6x 12.7x

Harmonic Mean 3.8% 0.5x 11.5x

3.9%

8.4%

3.3% 2.1%

8.2%

1.0%

4.8%

13.0%

3.9%

9.9%

3.1%

8.5%

11.6%

5.1%

18.4%

30.4%

18.6%

25.7%

31.6%

16.3%

30.8% 28.6%

16.8%

31.8%

18.3%

38.4% 41.0%

24.7%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%EBITDA Margin Gross Margin %

Capstone’s professionals have completed several transactions in the staffing & talent management sector, including

business sales, debt financing, and the provision of valuation advisory and acquisition services. Capstone has represented

clients across various specialties including staffing, onboarding support, on-site workforce management solutions,

corporate training and consulting. This focus allows Capstone to provide staffing & talent management companies with

real-time transaction feedback and immediate access to key decision makers among acquirers and investors.

valuation & financial advisory

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CERTIFIED IT & ITRICITY FREEDOM DATA

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ITRICITY FREEDOM DATA

debt financing

NORTHERN HEALTHCARE CAPITAL

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Capstone Partners LLC 8

CAPSTONE PARTNERS: STAFFING & TALENT MANAGEMENT TRANSACTIONS

has been acquired by

has been acquired by

has recapitalized with

CONFIDENTIAL

corporate sale (IN PROCESS)

Temporary & Permanent

Staffing Services

CONFIDENTIAL

corporate sale (IN PROCESS)

Temporary Staffing Services

Staffing & Talent Management Q1 2015

ABOUT CAPSTONE PARTNERS

Capstone Partners LLC is a premier investment banking firm dedicated to serving

the corporate finance needs of middle market business owners, investors and

creditors. The firm provides corporate sale & divestiture, merger & acquisition,

private placement, corporate restructuring, valuation and financial advisory

services. Capstone maintains various industry specialties including one in the

Staffing & Talent Management industry. The firm also has a merchant banking

capability to actively co-invest in transactions. Headquartered in Boston,

Capstone has offices in Chicago, London, Los Angeles, Philadelphia, San Diego,

Silicon Valley and Tampa.

© 2015 Capstone Partners LLC. All rights reserved.

World Class Wall Street Expertise. Built for the Middle Market.

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3rd Floor

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(813) 251-7285

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please visit

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