HR Technology Insights - William Blair

HR Technology Special Edition August 2012

Robert Metzger Partner and Managing Director [email protected] +1 312 364 8517

HR Technology Insights M&A and Capital Markets Perspective on the HR Technology Industry

Andrew Arno Director [email protected] +1 415 248 5905

William Blair & Company

Table of Contents Introduction .............................................................................................................................................................................................................................................. 1 Summary .................................................................................................................................................................................................................................................... 3 M&A Activity ............................................................................................................................................................................................................................................. 6 Public Company Analysis ..................................................................................................................................................................................................................... 8 Venture Capital Activity ..................................................................................................................................................................................................................... 10 William Blair Selected HR Technology Transactions............................................................................................................................................................. 11 William Blair HR Technology Equity Research Coverage .................................................................................................................................................... 12 William Blair HR Technology Contacts ........................................................................................................................................................................................ 13 Disclosures ............................................................................................................................................................................................................................................... 14

HR Technology Table of Contents


Introduction Welcome to the first of edition of William Blair’s HR Technology Insights, a periodic newsletter in which we will analyze M&A and capital markets activity and valuations of technology companies providing solutions that affect the sourcing, recruiting, development, engagement, and management of talent within organizations and enterprises. Over the last 18 months, activity in HR technology has surged. LinkedIn and Cornerstone OnDemand completed successful IPOs in 2011 and have continued to experience dramatic revenue growth and user adoption. M&A activity highlights include the acquisitions of SuccessFactors by SAP and shortly thereafter Taleo by Oracle; not unnoticed was salesforce.com’s acquisition of social performance management provider Rypple, a comparatively small acquisition but a signal nonetheless of the SaaS bellwether’s entrance into the human capital management (HCM) market. In the private capital markets, WorkDay completed an $85 million round of financing, presumably its last before going public in the not‐too‐distant future. All of these activities are just highlights of a dynamic sector in which William Blair has been quite active. HR technology solutions have evolved beyond simple automation of human resources business processes. The combination of cloud‐ based consumer‐friendly application interfaces with industrial‐strength analytical capabilities is enabling widespread adoption across the enterprise (from rank‐and‐file employees to the CEO). HR technology now has a meaningful, strategic impact on organizations, providing HR professionals with the tools to measure impact and demonstrate change with data.

Outlook We expect the industry to continue to grow rapidly and evolve. The underlying fundamentals driving the growing need for HR technology solutions include: •

acute scarcity of talent;

•

proliferation of social and mobile;

•

rise of the millennial workforce; and

•

evolution of where and how people work.

Despite the acceleration of vendor consolidation in recent years, the HR technology landscape is still rather fragmented. We are tracking hundreds of companies in this space and expect continued growth and innovation with new categories and subcategories emerging as start‐ups proliferate in the healthy venture environment. Technology IPOs in general have been mixed this year, but we expect the public markets will reward companies with rapid growth, large addressable markets, and defensible competitive positions. Similarly, we expect M&A activity to continue its rapid pace as strategics look to build our their technology, capture greater market share, gain vertical expertise, and expand geographically.

We welcome your feedback on this newsletter and, as always, encourage you to contact us if we may be of assistance with your business, portfolio companies, or clients.

Best regards,

Robert Metzger Partner and Managing Director [email protected]

Andrew Arno Director [email protected]

HR Technology Introduction 1


Defining the HR Technology Landscape Strategic Talent Management Online Employment Solutions

Screening & Assessment

Services Procurement

Resume DB Access

Criminal Background Check

Recruiting

Career Development Website

Verification

Job Board / Portal

Performance Management

Learning and Development

Compensation

Applicant Tracking

Competency Management / Reviews

Learning Management System (LMS)

Managed Services

Workforce Planning

Career Planning

I9 Processing / Validation

Staffing

Sourcing

Social / Career Community

Drug Testing

Security and Compliance

Job Distribution

Skills Assessment

Vendor Management Systems

Video Interview Online Reference Check

Recruiting

Workforce Management

Benefits Solutions

Salary Comparison (Industry)

Time and Attendance

Automated Enrollment

Online Learning

Salary Analysis (Internal)

Absence Management

Benefit Eligibility / Verification

Goals

Instructor Led Training (ILT)

Sales Performance Management

Workforce Scheduling

Fulfillment / Comm.

Onboarding

“Agile” Performance Management

Virtual Classrooms

Incentive Compensation Management

Social Recruiting / Networking

Succession Planning

Automated Development Planning

Stock Option Allocation

Recruiter CRM / Analytics

Organization Charting

Learning Content Management

Employee Recognition Social / Rewards Merchandise Rewards

Wellness Platform

Social Collaboration Mobile Learning Certification Management

Compliance

Payroll

Employee Records

Salary Admin

HR Technology 2 Introduction

Human Resource Management Systems

SelfService

Jobs and Positions

Case Management


Summary HR Technology Mergers & Acquisitions M&A activity over the last 12 months ending July 31, 2012, was strong, with 90 HR technology M&A transactions announced totaling $8.9 billion in disclosed transaction value. This level of activity compares favorably with the year‐ago period, when there were 73 transactions totaling $2.3 billion in disclosed transaction value. Since the beginning of 2012, 58 M&A transactions have been announced with $3.8 billion in disclosed transaction volume. At the same time last year, 50 M&A transactions with $1.2 billion in transaction volume had been announced. Notable M&A transactions in the last 12 months include:

Last 12 Months – Selected HR Technology Mergers & Acquisitions Date Announced Completed

Implied Trans. Value Enterprise ($ MM) Value ($ MM)

Target Company

Acquirer Company

07/02/12

07/09/12

$660.0

$660.0

SHL Group

The Corporate Executive Board Company

06/25/12

‐

$335.0

$335.0

Fidelity National Information Services, Healthcare Benefit Solutions Business

06/14/12

06/14/12

‐

‐

05/29/12

06/21/12

$22.5

$140.6

05/01/12

05/01/12

‐

‐

04/13/12

05/23/12

$172.0

04/04/12

04/04/12

03/20/12

Enterprise Value LTM LTM Revenue EBITDA

Vertical

3.1 x

11.6 x


Lightyear Capital

‐

‐

Benefits Solutions

Bullhorn

Vista Equity Partners

‐

‐

Recruiting

Online Career Center Mexico

SEEK Limited

‐

‐

Online Employment Solutions

Compupay

BenefitMall

‐

‐

HRMS

$172.0

Varicent Software

IBM

~3.8 x

‐

Compensation

$173.3

$132.0

Totaljobs Group

StepStone

‐

‐


03/19/12

$23.5

$23.5

HumanConcepts

Saba Software

‐

‐


03/08/12

04/09/12

$14.0

$14.0

Sonar

Cornerstone OnDemand

‐

‐


02/28/12

04/02/12

$340.0

$340.0

eScreen

Alere

2.8 x

‐


02/09/12

04/05/12

$1,921.4

$1,805.5

Taleo

Oracle Corporation

5.7 x

60.9 x

02/07/12

04/02/12

‐

‐

Dayforce

Ceridian Corporation

‐

‐


12/15/11

02/01/12

$60.0

$60.0

2Catalyze (Rypple)

Salesforce.com

~30.0 x

‐


12/09/11

03/02/12

$63.4

$63.4

Workplace Systems International

LDC

3.9 x

84.9 x


12/05/11

02/01/12

$74.0

$74.0

Acxiom Information Security Services

Sterling Infosystems

1.5 x

‐


12/05/11

12/09/11

$110.0

$110.0

Jobs2Web

SuccessFactors

~5.5 x

‐

Recruiting

12/02/11

02/15/12

$3,764.4

$3,764.4

SuccessFactors

SAP

12.0 x

‐

Talent Management

12/02/11

02/07/12

$160.0

$160.0

Merced Systems

NICE Systems

2.9 x

‐


10/14/11

10/14/11

$110.0

$110.0

Element K

Skillsoft

1.3 x

‐

Learning & Development

08/24/11

08/24/11

$527.7

$527.7

Raet

CVC Capital Partners

3.0 x

‐

HRMS

08/01/11

09/20/11

$52.8

$52.8

cadooz

Euronet Worldwide

0.6 x

‐

Employee Recognition

Talent Management

Sources: CapitalIQ, public news sources, and third‐party estimates

HR Technology Summary 3


HR Technology Equity Performance For the last 12 months ending August 15, 2012, the broad HR Technology group increased 24.6%, outperforming the Nasdaq, which was up 15.6%. The SaaS HCM Solutions group was up a substantial 67.3%, while the Online Employment Solutions group was up only 5.7%. The Screening & Assessment and Payroll & Benefits groups were both up considerably, increasing 36.3% and 20.4%, respectively.

Indexed Stock Price Performance Index

LTM

SaaS HCM Solutions

2012 YTD

+67.3%

+33.5%

+5.7%

+33.0%


+36.3%

+15.7%

Payroll & Benefits

+20.4%

+7.7%

All HR Technology

+24.6%

+14.9%

NASDAQ

+15.6%

+15.5%

S&P 500

+13.2%

+9.7%


HR Technology Venture Capital In the 12 months ending July 31, 2012, there were 28 HR technology venture investments with a total disclosed transaction value of $462 million. This was a strong increase from the year‐ago period, in which 21 transactions were announced with a total disclosed transaction value of $279 million.

Notable HR Technology Venture Capital Announced Date Target 06/19/12 Bright

Trans. Value ($ in MM) $16.0

05/25/12

Identified

04/12/12

Business Description Online job search portal

Investors Not Disclosed

$20.9

Web‐based social job searching network

VantagePoint Capital Partners; Capricorn Investment Group; Innovation Endeavors

Viadeo

$24.0

Social networking website focusing on Allianz Capital Partners; Fonds Stratégique d'Investissement; professionals IDInvest Partners; Jefferies Group; Ventech

04/04/12

Liazon Corporation

$18.2

Consumer‐centric employee benefit solutions and services

Bessemer Venture Partners; Rand Capital SBIC; Beacon Bioventures; Bain Capital Ventures

03/28/12

SilkRoad Technology

$35.0

Talent management and recruiting solutions

03/21/12

oDesk Corporation

$15.0

Online employment platform

Foundation Capital; CrossLink Capital; Azure Capital Partners; Intel Capital; Tenaya Capital; NTT Investment Partners; Keating Capital Benchmark Capital; Globespan Capital Partners; Sigma Partners; T. Rowe Price Group

03/14/12

Adaptive Planning

$22.0

On‐demand business performance management solutions

Norwest Venture Partners; Onset Ventures; Cardinal Venture Capital; Monitor Ventures; Clairmont Capital

01/23/12

Elance

$16.0

Online employment platform

Kleiner Perkins Caufield Byers; New Enterprise Associates; Stripes Group

01/03/12

iCIMS

$35.9

Applicant tracking and human resource Susquehanna Growth Equity recruiting software

12/13/11

TaskRabbit

$17.8

Contract work system for skilled workers and project managers to network

Lightspeed Venture Partners; Allen & Company; Shasta Ventures; First Round Capital; The Tornante Company; FLOODGATE; Baseline Ventures; 500 Startups; Collaborative Fund

12/07/11

OneWire

$28.9

Career management and networking tool

Not Disclosed

11/29/11

WorkForce Software

$17.0

Workforce management solutions

Triangle Capital Corporation; K1 Capital Advisors

10/13/11

Workday

$85.0

SaaS enterprise business management T. Rowe Price Group; Janus Capital Group; Morgan Stanley solutions Investment Management; Bezos Expeditions

Note: Figures exclude transactions less than $3 million in transaction value Sources: Capital IQ and VentureSource

HR Technology 4 Summary


M&A Activity Detail

Number of Transactions

2007

2008

2009

Dollar Value ($ in MM) 2010

2011

LTM 07/11

LTM 07/12

Annual Disclosed

19

25

21

28

34

29

33

Annual Undisclosed

12

32

37

38

50

44

57

Total

31

57

58

66

84

73

90

2007

2008

2009

2010

2011

LTM 07/11

LTM 07/12

$2,231

$1,234

$1,037

$1,678

$6,276

$2,251

$8,908

‐ $2,231

‐

‐

$1,234

$1,037

‐ $1,678

‐

‐

$6,276

$2,251

‐ $8,908

Source: Capital IQ

Annual M&A Detail ($ in millions)

Transaction Value

# of Transactions

Number of Transactions 100

Transaction Value $10,000 $7,500

75

$5,000

50

$2,500

25

$0 Transaction Value Number of Transactions

0 2007

2008

2009

2010

2011

LTM 07/11

LTM 07/12

$2,231

$1,234

$1,037

$1,678

$6,276

$2,251

$8,908

31

57

58

66

84

73

90

Source: Capital IQ

HR Technology Summary 5


M&A Activity M&A Valuation Analysis ($ in millions)

Annual 2007

Volume

2008

2009

2010

2011

LTM 07/11

LTM 07/12

Number of Announced Transactions

31

Number of Disclosed Transactions

57

58

66

84

73

90

19

25

21

28

34

29

34

$2,231

$1,234

$1,037

$1,678

$6,276

$2,251

$8,908

Average Transaction Size

$117

$49

$51

$60

$224

$78

$298

EV/LTM Revenues

5

10

10

16

18

17

14

Mean

2.98x

5.66x

2.21x

3.89x

3.21x

2.74x

3.40x

Median

1.63x

1.68x

1.67x

2.70x

2.67x

2.60x

2.87x

EV/LTM EBITDA

Total Dollar Volume



3

2

4

6

4

4

6

Mean

13.1x

30.0x

16.2x

13.7x

57.8x

12.3x

50.9x

Median

13.7x

30.0x

13.2x

14.5x

47.5x

11.4x

36.5x

Source: Capital IQ

M&A Activity by Target Ownership (Percentage of Transactions)

Private – Sponsor Backed

Private – Independent

Public

75.0%

50.0%

25.0%

0.0%

2007

2008

2009

2010

2011

LTM 07/11

LTM 07/12

Private – Sponsor Backed

29%

37%

28%

29%

38%

31%

42%

Private – Independent

65%

58%

67%

65%

59%

67%

52%

6%

5%

5%

6%

4%

3%

5%

Public Source: Capital IQ

HR Technology 6 M&A Activity


M&A Activity by Consideration (Percentage of Transactions)

Not Disclosed

Cash

Stock

75.0%

50.0%

25.0%

0.0%

2007

2008

2009

2010

2011

LTM 07/11

LTM 07/12

Not Disclosed

32%

54%

66%

62%

61%

68%

58%

Cash

55%

39%

29%

33%

36%

31%

39%

Stock

13%

7%

5%

5%

2%

1%

3%

Source: Capital IQ

HR Technology M&A Activity 7


Public Company Analysis •

Year‐to‐date as of August 15, 2012, the HR Technology index was up 14.9%, on par with the Nasdaq, which was up 15.5%.

•

In the same period, the SaaS HCM Solutions and Online Employment Solutions groups increased significantly, up 33.5% and 33.0%, respectively. The Screening & Assessment and Payroll & Benefits groups increased more modestly, up 15.7% and 7.7%, respectively.

HR Technology Indexed Stock Price Performance (2012 YTD) SaaS HCM Solutions (+33.5%)

Online Employment Solutions (+33.0%)

Screening & Assessment (+15.7%)

Payroll & Benefits (+7.7%)

All HR Technology (+14.9%)

NASDAQ (+15.5%)

160 150 140 130 120 110 100 90

SaaS HCM Solutions consists of: CALD, CSOD, HSTM, KNXA, SABA, ULTI Online Employment Solutions consists of: DHX, JOBS, LNKD, MWW, O1BC, SEK Screening & Assessment consists of: DNB, EFX, EXPN, FICO Payroll & Benefits consists of: ADP, NSP, PAYX, PUI, WAGE Source: FactSet as of August 15, 2012

Valuation Overview SaaS HCM Solutions


Screening and Assessment

Payroll and Benefits

40.0x 30.1x

4.3x

17.3x 2.6x

2.9x

2.5x

EV / 2012E Revenue

8.5x

EV / 2012E EBITDA

Note: Data points represent median multiples; median multiples exclude LinkedIn Source: FactSet as of August 15, 2012

HR Technology 8 Public Company Analysis

9.2x

17.0x

18.0x

11.6x

EV / 2012E FCF


Comparable Company Analysis

Market Close Cap 08/15/12 ($ MM)

Enterprise Value Enterprise Value / Revenue Enterprise Value / EBITDA Enterprise Value / FCF ($ MM) LTM 2012E 2013E LTM 2012E 2013E LTM 2012E 2013E

'11A '12E 2012E Revenue EBITDA Growth Margin

SaaS HCM Solutions The Ultimate Software Group

$94.33

$2,525.1

$2,464.1

8.27x

7.42x

6.10x

nmf

44.7x

32.2x

nmf

nmf

59.4x

23.4%

16.6%


$25.00

$1,253.9

$1,191.9 12.80x

10.19x

7.18x

nmf

nmf

nmf

nmf

nmf

nmf

60.2%

‐7.0%

Healthstream

$28.09

$735.2

$643.3

6.99x

6.33x

5.29x

35.4x

30.1x

24.7x

nmf

57.7x

34.2x

23.9%

21.0%

Kenexa

$32.59

$893.5

$836.9

2.63x

2.30x

1.98x

21.4x

13.6x

10.9x

31.4x

22.2x

17.6x

28.5%

16.9%

Saba Software

$7.71

$229.7

$215.5

1.76x

1.51x

na

nmf

nmf

na

42.2x

na

na

22.6%

1.2%

Callidus Software

$4.24

$149.3

$178.5

2.00x

1.89x

1.64x

nmf

nmf

33.3x

nmf

nmf

nmf

12.9%

‐1.3%

Mean

5.74x

4.94x

4.44x

28.4x

29.5x

25.2x

36.8x

40.0 x

37.1 x

28.6%

7.9%

Median

4.81x

4.31x

5.29x

28.4x

30.1x

28.4x

36.8x

40.0 x

34.2 x

23.7%

8.9%

$10,189.1 14.08x

20.6%

Online Employment Solutions LinkedIn SEEK Limited 51job Monster Worldwide Dice Holdings XING

$102.23

$10,806.2

10.95x

7.34x

nmf

53.1x

30.9x

nmf

nmf

nmf

78.2%

$6.79

$2,287.2

$2,624.5

6.29x

5.78x

4.61x

14.6x

13.2x

10.9x

28.6x

24.2x

18.6x

22.7%

43.7%

$41.39

$1,192.1

$833.3

3.81x

3.67x

3.13x

10.6x

10.4x

8.2x

17.4x

16.1x

8.8x

12.6%

35.4%

$6.89

$814.9

$826.9

0.83x

0.87x

0.86x

8.1x

5.9x

5.4x

21.8x

17.3x

9.6x

‐8.5%

14.7%

$8.20

$509.4

$467.9

2.48x

2.48x

2.34x

6.1x

6.3x

5.9x

7.9x

8.6x

7.9x

5.4%

39.5%

$48.03

$301.2

$233.0

2.60x

2.59x

2.35x

8.1x

8.5x

6.7x

18.8x

19.0x

16.8x

6.5%

30.4%

Mean (1)

3.20x

3.08x

2.66x

9.5x

8.9x

7.4x

18.9x

17.1 x

12.4 x

7.8%

32.8%

Median (1)

2.60x

2.59x

2.35x

8.1x

8.5x

6.7x

18.8x

17.3 x

9.6 x

6.5%

35.4%

Screening and Assessment Experian

$15.73

$15,649.3

$17,747.8

3.71x

3.96x

3.75x

11.9x

11.4x

10.3x

20.0x

19.3x

17.1x

15.4%

34.7%

Equifax

$45.93

$5,505.3

$6,313.6

3.07x

2.94x

2.74x

9.4x

9.0x

8.3x

16.7x

17.7x

16.1x

9.5%

32.8%

Dun & Bradstreet

$82.22

$3,690.2

$4,589.0

2.66x

2.75x

2.68x

8.6x

7.9x

7.5x

11.3x

16.4x

15.2x

‐5.1%

34.9%

Fair Isaac

$43.96

$1,487.7

$1,841.0

2.83x

2.79x

2.70x

9.8x

9.4x

9.2x

15.9x

15.1x

14.3x

4.0%

29.6%

Mean

3.07x

3.11x

2.97x

9.9x

9.4x

8.8x

16.0x

17.1 x

15.7 x

6.0%

33.0%

Median

2.95x

2.87x

2.72x

9.6x

9.2x

8.8x

16.3x

17.0 x

15.7 x

6.8%

33.8%

Payroll and Benefits Automatic Data Processing

$57.84

$28,288.7

$26,727.0

2.51x

2.42x

2.27x

12.0x

11.5x

10.8x

19.0x

16.9x

16.8x

6.6%

21.0%

Paychex

$32.84

$11,913.0

$11,596.7

5.20x

5.05x

4.77x

12.2x

11.8x

11.2x

20.1x

19.1x

18.2x

6.0%

42.8%

Insperity

$24.75

$636.6

$398.8

0.19x

0.18x

0.17x

5.0x

4.4x

3.8x

11.3x

6.0x

5.5x

10.8%

4.1%

WageWorks

$16.73

$447.1

$443.2

2.87x

2.55x

2.37x

14.4x

11.6x

9.8x

55.4x

36.4x

12.3x

28.4%

21.9%

Personal & Informatik (P&I)

$35.91

$278.0

$235.9

2.51x

na

na

8.5x

na

na

4.8x

na

na

na

na

Mean

2.65x

2.55x

2.39x

10.4x

9.8x

8.9x

22.1x

19.6 x

13.2 x

12.9%

22.5%

Median

2.51x

2.48x

2.32x

12.0x

11.6x

10.3x

19.0x

18.0 x

14.5 x

8.7%

21.5%

Mean

4.29x

3.93x

3.38x

12.3x

15.5x

13.3x

21.4x

20.8 x

18.0 x

18.2%

22.7%

Median

2.83x

2.77x

2.70x

10.2x

11.4x

10.0x

18.9x

17.7 x

16.5 x

12.7%

21.5%

Overall

(1) Mean and median metrics exclude LinkedIn Source: FactSet as of August 15, 2012

HR Technology Public Company Analysis 9


Venture Capital Activity The total number of venture investments increased 33% and total disclosed transaction value increased 66% when comparing LTM at July 2012 to LTM July 2011. The disproportionate increase in disclosed transaction value can be partly attributed to a few large transactions that occurred in 2012, including an $85 million financing by Workday, a $36 million financing by iCIMS, and a $35 million financing by SilkRoad Technology.

Annual Venture Capital Detail ($ in millions)

Transaction Value

# of Transactions


Transaction Value $500

30

$400

25 20

$300

15

$200

10

$100

5

$0

0

2007

2008

2009

2010

2011

LTM 07/11

LTM 07/12

Transaction Value

$216

$235

$232

$111

$385

$279

$462

20

18

15

13

23

21

28


Note: Figures exclude transactions less than $3 million in transaction value Source: Capital IQ

HR Technology 10 Venture Capital Activity


William Blair Selected HR Technology Transactions

Not Disclosed

$67,275,000

$60,734,375

$156,975,000

has merged with

$115,000,000

has been acquired by

Initial Public Offering

Follow‐On Offering


Not Disclosed

$34,499,985

Not Disclosed

$114,712,500

$148,350,000

received a significant investment from


Private Placement



Not Disclosed

Not Disclosed


has acquired

$54,000,000

$62,625,000

Valuation Analysis

Private Placement


Not Disclosed

$166,118,000

$20,200,000


Convertible Preferred Stock

$59,850,000

$119,500,000




$56,000,000

$8,000,000

$473,800,000

Common Stock PIPEs Sole Mgr.

Private Placement


HR Technology William Blair Selected HR Technology Transactions 11


William Blair HR Technology Equity Research Coverage HR Technology Equity Research Company

Ticker

Analyst

Aon

AON

Adam Klauber

Automatic Data Processing

ADP

Timothy McHugh


CSOD

Laura Lederman

CTPartners Executive Search

CTP

Timothy McHugh

Dice Holdings

DHX

Timothy McHugh

51job

JOBS

Timothy McHugh

HealthStream

HSTM

Ryan Daniels

Heidrick & Struggles International

HSII

Timothy McHugh

Intuit

INTU

Laura Lederman

Kenexa

KNXA

Laura Lederman

Korn/Ferry International

KFY

Timothy McHugh

LinkedIn

LNKD

Timothy McHugh

Paychex

PAYX

Timothy McHugh

Robert Half International

RHI

Timothy McHugh

Towers Watson

TW

Timothy McHugh

Ultimate Software Group

ULTI

Laura Lederman

WageWorks

WAGE

Robert Napoli

HR Technology 12 William Blair HR Technology Equity Research Coverage


William Blair HR Technology Contacts Brent Gledhill Global Head of Corporate Finance [email protected] +1 312 364 5475

John Ettelson Chief Executive Officer [email protected] +1 312 364 8620

North America

Andrew Arno [email protected] +1 415 248 5905

Robert Metzger [email protected] +1 312 364 8517

Mark McNay [email protected] +1 415 248 5902

Britt Trukenbrod [email protected] +1 312 364 8840

Dan Connolly [email protected] +1 312 364 8544

Laura Van Peenan [email protected] +1 312 364 8665

U.S. VC Coverage

Brandon Lower [email protected] +1 212 237 2716

Charles Watson [email protected] +1 312 364 8997

Jamie Wildman [email protected] +1 312 364 8076

Jonathan Skinner [email protected] +1 312 364 7522

Pat Prendergast Anu Sharma [email protected] [email protected] +1 415 248 5907 +1 415 248 5912

Europe

Raphael Grunschlag Matt Gooch [email protected] [email protected] +44 20 7868 4501 +44 20 7868 4478

Stewart Licudi [email protected] +44 20 7868 4512

AsiaPacific

Andrew Kaye [email protected] +011 86 21 2327 2233

Mergers & Acquisitions

Mark Brady [email protected] +1 312 364 8853

Robert Abbe [email protected] +1 415 248 2876

Equity Capital Markets Brett Paschke [email protected] +1 312 364 8657

Institutional Sales & Trading

John Moore [email protected] +1 312 364 8836

Private Capital

Kelly Martin [email protected] +1 312 364 8832

Equity Research

Laura Lederman [email protected] +1 312 364 8223

Tim McHugh [email protected] +1 312 364 8229

HR Technology William Blair HR Technology Contacts 13


Disclosures

William Blair is a trade name for William Blair & Company, L.L.C. and William Blair International, Limited. William Blair Company, L.L.C., is a Delaware Company and is regulated by the Securities and Exchange Commission, the financial industry regulatory authority, and other principal exchanges. William Blair International Limited is authorised and regulated by the Financial Services Authority ("FSA") in the United Kingdom. William Blair & Company® only offers products and services where it is permitted to do so. Some of these products and services are only offered to persons or institutions situated within the United States and are not offered to persons or institutions outside of the United States. This material has been approved for distribution in the United Kingdom by William Blair International Limited, and is directed only at, professional clients and eligible counterparties (as defined in cobs 3.5 and 3.6 of the FDA handbook). This advertisement is not intended to be investment advice. William Blair & Company | 222 West Adams Street | Chicago, Illinois 60606 | +1 312 236 1600 | williamblair.com Augsut 21, 2012

HR Technology 14 Disclosures

International

Headquarters Chicago 222 West Adams Street Chicago, IL 60606 +1 312 236 1600 +1 800 621 0687 [email protected] www.williamblair.com United States Boston 125 High Street Oliver Street Tower Suite 1901 Boston, MA 02110 +1 617 235 7500

Hartford Putnam Place 100 Great Meadow Road Suite 606 Wethers�ield, CT 06109 +1 800 596 2028 New York 666 Fifth Avenue 14th Floor New York, NY 10103 + 1 212 237 2700

San Francisco 343 Sansome Street 12th Floor San Francisco, CA 94104 +1 415 986 5596 +1 415 986 1719 (fax) Wilmington 500 Delaware Avenue Suite 720 Wilmington, DE 19801 +1 302 573 5000 +1 302 573 5168 (fax)

London William Blair International, Limited 3 St. Helen’s Place London EC3A 6AB United Kingdom Equity Sales: +44 20 7868 4400 Equity Sales: +44 20 7868 4420 (fax) Corporate Finance: +44 20 7868 4444 Corporate Finance: +44 20 7868 4488 (fax)

40 Bruton Street London W1J 6QZ United Kingdom Investment Management: +44 20 7297 4700 Investment Management: +44 20 7297 4777 (fax)

São Paulo William Blair Do Brasil Assessoria Financeira Ltda. Av. Brigadeiro Faria Lima 3729, room 511 São Paulo, SP Brazil 04538-905 +55 11 3443 6472 +55 11 3443 6201 (fax) Shanghai William Blair & Company, L.L.C. Shanghai Representative Of�ice Unit 16-18, 11th Floor Building One, Corporate Avenue 222 Hubin Road Shanghai 200021 P.R. China +86 21 2327 2222 Zurich Stockerstrasse 46 8002 Zurich Switzerland +41 44 287 9020 +41 44 201 0511 (fax)

William Blair & Company is a global investment banking and asset management firm. We are committed to building enduring relationships with our clients and providing expertise and solutions to meet their evolving needs. An independent and employee-owned firm, William Blair is based in Chicago, with 10 office locations including London, New York, Shanghai, and Zurich. For more information, please visit williamblair.com.

December 2011 Monthly Update

Mark McNay Partner & Managing Director [email protected] +1 415 248 5902 Andrew Arno Director [email protected] +1 415 248 5905

Cloud Insights M&A and Capital Markets Perspective on the Cloud Computing Industries: •

Software-as-a-service

•

Platform-as-a-service

•

Infrastructure as-a-service

Patrick Vihtelic Associate [email protected] + 1 415 248 5911 Paul Huber Senior Analyst [email protected] +1 415 248 5901