Your Online Recruitment Business for Investment or Acquisition Preparing Your Online Recruitment Business for Investment or Acquisition Getting Bigger or Getting Out By 2017 Randy Mehl Partner Baird Capital 2014 IAEWS Spring Congress

Introduction 2014 IAEWS Spring Congress

Robert W. Baird & Co. 2014 IAEWS Spring Congress Helping clients achieve their asset management, wealth management, capital markets and private equity goals for 95 years 1919 Founded in Milwaukee $100 billion Assets under management* No. 1 “Most Important” provider of small-cap and mid-cap research** More than 2,700 Employees 100+ Office locations on three continents*** 11 Number of consecutive years Baird has been recognized as one of the FORTUNE 100 Best Companies to Work For® A Comprehensive Financial Services Firm Private Equity Capital Markets Europe United States Asia Private Wealth Management Asset Management *As of May 14, 3013. **Greenwich Associates U.S. Equity Investors – Small/Mid-Cap Funds, April 2012. Surveys conducted with 94 U.S. small-cap and mid-cap fund managers. Rankings based on top 10 research firms in survey. ***Baird and its operating affiliates have offices in the United States, Europe and Asia. Robert W. Baird Ltd. and Baird Capital Partners Europe are authorized and regulated in the UK by the Financial Conduct Authority. 2014 IAEWS Spring Congress

Baird and Online Recruitment A leading capital markets firm in the Human Capital and Recruitment sector Baird Capital Investment Banking Equity Research Conferences Solid track record of successful investments in the HCM and Recruitment areas Over 50 dedicated investment bankers in Business and Technology Services, including HCM 27 years of research excellence in the Human Capital sector Longest standing investor conferences addressing HCM and Recruitment 2014 IAEWS Spring Congress

Baird Capital – Global Platform US Private Equity Headquartered in Chicago 15 Investment professionals Raised and managed $880 million China Growth Equity Headquartered in Shanghai Seven investment professionals $72 million under management Global Sourcing Platform Global Portfolio Operations Global Idea Generation US Venture Capital Headquartered in Chicago 5 Investment professionals Raised and managed $272 million UK Private Equity Headquartered in London Four investment professionals Raised and managed £860 million 2014 IAEWS Spring Congress

Agenda 2014 IAEWS Spring Congress Online Recruitment M&A Activity Preparing for a Sale or Investment – Critical Questions Exit Planning – The Long-Term Plan Exit Planning – The Short-Term Plan Closing the Deal 2014 IAEWS Spring Congress

Investment Activity in Online Recruitment 2014 IAEWS Spring Congress

Online Recruitment Activity Acquired Acquired Acquired Received $70M Investment Acquired By Acquired Oct / Nov 2013 September 2012 February 2014 April 2014 June 2012 May 2012 Acquired Initial Public Offering Acquired Acquired Received $10M Investment Acquired February 2014 November 2013 February 2014 April 2012 October 2013 August 2010 Acquired Acquired Acquired Acquired Acquired Acquired March 2014 December 2009 Aug/Sep 2011 December 2011 April 2013 April 2014 2014 IAEWS Spring Congress

Online Recruitment – Why So Active? Attractive market characteristics As economic conditions improve, talent acquisition becomes costly Workforce complexity increasing – part-time, contingent and freelance workforce Disruption factors – aggregators, social, mobile Big guys want to stay relevant Access to the passive candidate e.g., go vertical Address the “hot” areas of social, mobile Empower the employers e.g., data analytics Lots of capital available 2014 IAEWS Spring Congress

Lots of Capital Available Improving economic conditions + easy money policy = More M&A ! Investors are sitting on over $1 trillion in dry powder Credit markets are supportive of increased leverage and offering cheaper interest Corporate balance sheets flush with cash 2014 IAEWS Spring Congress

Preparing For Exit 2014 IAEWS Spring Congress

Preparing for Exit – Critical Questions What are your objectives? Retirement? Portfolio diversification? Financial backing to grow? Strike while the iron is hot? Stop the bleeding? What is your timeframe? How realistic are your expectations? 2014 IAEWS Spring Congress

Exit Planning – The Long-Term Plan Goal is to maximize value! Private Equity buyers value a standalone business… Addressing the most relevant areas of the market Persistent revenue streams e.g., subscription pricing, recurring client demand Good margin and cash flow characteristics Scalable business model Runway Strategic buyers value… Whatever they happen to need to grow at that point (Offense!) Less competition (Defense!) 2014 IAEWS Spring Congress

Exit Planning – The Long-Term Plan Ideas for “Investment” Fill out the management team “Fireside Chats” with strategic buyers, industry experts Position the business to address “future” growth areas e.g., vertical focus, recruiter analytics tools Formalize key functions (BD, marketing, training, HR, Accounting) Consider an audit New business capacity! 2014 IAEWS Spring Congress

Exit Planning – The Short-Term Plan Goal is to close the transaction! Define your objective and stay focused on it! Identify the most likely buyer groups Engage good advisors – intermediary, lawyer, accountant Prepare for some pain Process typically lasts between 60 days to a full year – big distraction Transaction typically costs a small-to-medium sized seller between $300k-$1m 2014 IAEWS Spring Congress

Today’s Buyers – PE versus Strategic 2014 IAEWS Spring Congress

Sale Process Timeline 2014 IAEWS Spring Congress

Closing Checklist 2014 IAEWS Spring Congress

Exit Planning – Close the Transaction Do it right the first time! 2014 IAEWS Spring Congress

Getting Bigger or Getting Out Preparing Your Online Recruitment Business for Investment or Acquisition Getting Bigger or Getting Out Randy Mehl Baird Capital rmehl@rwbaird.com 2014 IAEWS Spring Congress