ITGroup Investment OpportunityMMB ADVISORS | BENJ BERSCHE | MELVYN THREATT-PETERS | MILTON PARRA

Company OverviewITGROUP Well-positioned firm that provides IT Consulting and related services to large corporates

as well as manufacture semiconductors and components ~$538M in 2015 revenue forecasted to increase to ~$900M in 2019 EBITDA Margin of 16.5% in 2014 and estimated margin of ~17.5% in 2015IT SERVICES UNIT Well-respected market leader in IT Consulting Core unit drives ~80% of revenue Potential for geographic expansion: projected to increase top line growth ~7%SSIT UNIT Generates ~20% of ITGroup’s revenue EBITDA Margin of ~10% (historical performance has lagged comparable companies) Bleak future return expectations of 1.5-2.0% growth & challenging competitive

environment

Why Are We Here?Fundamental valuations and comparable review

IT GroupSSIT Unit

Outline available investment options for ITGroupProvide recommendation & next steps

IT Group: Fundamental Valuation*

* All values in Millions except Multiple Information

2011 2012 2013 2014 2015E 2016P 2017P 2018P 2019PEBITDA $ 48.08 $ 70.53 $ 77.78 $ 95.01 $ 108.35 $ 122.75 $ 138.78 $ 164.51 $ 193.65

EBIT 48.29 70.60 77.58 94.67 107.83 122.04 137.85 163.38 192.31 Income Taxes (40%) 19.31 28.24 31.03 37.87 43.13 48.81 55.14 65.35 76.92 Tax Effected EBIT/EBIAT (NOPAT) 28.97 42.36 46.55 56.80 64.70 73.22 82.71 98.03 115.39 Plus:Depreciation & Amortization 1.25 1.38 1.64 1.79 1.97 2.16 2.37 2.58 2.79 Plus/Minus: Changes in Net Working Capital (32.98) (40.29) (48.71) (32.98) (35.35) (41.77) (49.40) (58.48)Unlevered CFO's 30.22 10.77 7.90 9.88 33.69 40.04 43.31 51.20 59.70 Minus: Capital Expenditures 3.23 2.46 4.11 3.44 5.52 6.43 7.91 8.70 9.57 Unlevered FCF's $ 33.45 $ 13.22 $ 12.01 $ 13.32 $ 39.21 $ 46.47 $ 51.23 $ 59.90 $ 69.28

WACC (Range from Comps) 6.3% 8.2% 12.0%DCF Value (5 Year) $ 218.62 $ 206.79 $ 185.90

Terminal Value $ 2,099.32 $ 1,118.69 $ 646.35

Enterprise Value (EV) $ 2,317.93 $ 1,325.48 $ 832.25

Implied Equity Value $ 2,472.65 $ 1,480.20 $ 986.96

EV/EBITDA Multiple 11.97 6.84 4.30 EV/Revenue Multiple 2.56 1.46 0.92

IT Group: Comparable AnalysisWe can consolidate the IT Group slides into one if desired

($20.00)

($10.00)

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$3.49

$12.85 $16.49

$0.62

$9.72

$22.39

$38.28

$2.78

EBITDA/RevenueP/EEV/EBITEV/EBITDA

Operating PerformanceComparable Companies Revenue Gross

Profit EBITDA Net Income

Low $ 450.21 $ 151.86 $ 25.46 $ 7.76

High

4,064.00

372.00

281.00 128.00

Median

812.19

211.73

69.55

21.86

Mean

1,377.33

230.67

117.59

41.99

ITGroup '14 $ 568.98 $ 114.70 $ 95.01 $ 54.45

Balance Sheet StatsComparable Companies Total Assets NI ROA NI ROE NWC

Max $ 2,158.00 8.57% 34.22% $ 183.00

Min

450.82 2.40% 0.31% 38.32

Mean

956.91 5.31% 10.92% 93.95

Median

522.66 5.05% 6.87% 79.18

ITGroup '14 $ 292.69 18.60% 28.72% $ 163.88

SSIT Unit: Fundamental Valuation*

* All values in Millions except Multiple Information

2011 2012 2013 2014 2015E 2016P 2017P 2018P 2019PEBITDA $ 4.07 $ 4.27 $ 5.89 $ 5.19 $ 6.00 $ 6.19 $ 6.90 $ 8.20 $ 9.53

EBIT 3.55 3.60 5.26 4.52 5.30 5.46 6.14 7.37 8.63 Income Taxes (40%) 1.42 1.44 2.10 1.81 2.12 2.19 2.45 2.95 3.45

Tax Effected EBIT/EBIAT (NOPAT) 2.13 2.16 3.16 2.71 3.18 3.28 3.68 4.42 5.18 Plus:Depreciation & Amortization 0.52 0.58 0.63 0.67 0.70 0.73 0.77 0.83 0.90 Plus/Minus: Changes in Net Working Capital 0.61 (0.25) (0.20) (0.63) (0.85) (0.90) (0.96) (1.03)

Unlevered CFO's 2.65 3.35 3.53 3.18 3.24 3.15 3.55 4.29 5.05 Minus: Capital Expenditures 1.49 1.86 2.86 2.49 2.55 2.97 3.66 4.02 4.42 Unlevered FCF's $ 4.14 $ 5.21 $ 6.39 $ 5.67 $ 5.80 $ 6.13 $ 7.20 $ 8.31 $ 9.47

WACC (Range from Comps) 11.1% 13.7% 17.1%DCF Value (5 Year) $ 26.48 $ 24.69 $ 22.63

Terminal Value $ 98.11 $ 77.03 $ 60.13

Enterprise Value $ 124.59 $ 101.72 $ 82.76

Implied Equity Value $ 114.11 $ 91.24 $ 72.28

EV/EBITDA Multiple 13.07 10.67 8.68 EV/Revenue Multiple 1.18 0.96 0.78

SSIT Unit: Comparable Analysis

($20.00)

($10.00)

$0.00

$10.00

$20.00

$30.00

$2.98

$9.12

$14.15

$0.30

$9.66

$23.46

$19.24

$1.24

EV/EBITDA

EV/EBIT

P/E EBITDA/Rev-enue

Operating PerformanceComparable Companies Revenue Gross

Profit EBITDA Net Income

Low $ 321.16 $ 151.86 $ 20.58 $ (116.10)

High

2,067.45

372.00

210.90

94.70

Median

801.70

102.41

69.55

(10.47)

Mean

981.29

204.97

117.59

(12.38)

SSIT Unit '14 $ 83.64 $ 12.93 $ 5.24 $ 1.84

Balance Sheet StatsComparable Companies Total Assets NI ROA NI ROE NWC

Max $ 1,590.50 8.94% 16.66% $ 462.91

Min

308.54 -1.63% -17.58% 33.60

Mean

890.30 2.67% -0.33% 186.18

Median

1,081.99 2.76% -3.99% 101.01

SSIT '14 $ 54.01 3.41% 11.81% $ 9.41

Strategic Options IPO as isDivest SSITKeep the status quo: remain privately held Postpone IPO: enhance firm value

Strategic Option 1: IPO As Is ITGroup is a viable IPO candidate However, current EV/EBITDA multiple is in bottom quadrant of comparable transactions We propose a 51% ownership stake in public company for Smith’s Family

Takes ownership from 65% to 51% Creates liquidity event for Smith of ~$207M

Target EV / EV /Enterprise Value Revenue EBITDA

Min $ 13.4 0.3x 6.0xMax 4,453.6 4.0x 17.9x

Median 93.9 1.0x 13.9xMean 689.0 1.4x 12.2x

IT Group $ 1,480.20 1.46X 6.84X

Median Mean Transaction 10 Transaction 5 IT Group0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

1.02 1.42 1.021.82 1.46

13.8712.23

10.90

14.92

6.84

Precedent Transactions: Multiples

IT Group EV / Revenue IT Group EV / EBITDA

Strategic Option II: Divest SSIT We are not in favor of divesting the SSIT Unit

Synergies driven by increased cross-selling initiatives and marketing reach Add’l top-line growth generated by retaining the unit exceeds current equity value Provides sound comparable ratios to peers

Additional costs associated with spin-off of SSIT Unit are unnecessary $5M Back office function costs $3M One-time start up expenses $?M Spin-off advisory fees

Looking ahead Develop cross-selling initiatives Improve underlying EBITDA Margin

Median Mean Transaction 3 Transaction 2 SSIT Unit0.00

2.00

4.00

6.00

8.00

10.00

12.00

1.32 1.340.48 0.67 0.96

6.86 7.14

4.08

5.76

10.67

Precedent Transactions: Multiples

SSIT EV / Revenue SSIT EV / EBITDA

Strategic Option III: Remain Privately Held Non-financial considerations are main drivers for IPO

Smith’s desire to leave a legacy Liquidity and value

Liquidity can be provided with a special dividend Value is not diminished by remaining private

Margins can be improved upon to further drive income/profit Declare one time special cash dividend of 15% using cash or via debt issuance

$20M of cash Results in $13M dividend to the Smith family

Strategic Option IV: Postpone IPO Enhance firm value through top-down improvements

EBITDA improvement of SSIT Devote increased resources to cross-selling efforts ($2M/year)

Expand geographic footprint Increase of $4M in capital expenditures in 2016 and 2017 Projected to result in ~7% topline growth

3% in 2016: ~$18.75M 5% in 2017: ~$35.50M 7% in 2018: ~$56.00M

Expand cross-selling efforts 50% increase firm revenue from cross-selling activities at 2% of sales Projected NPV of Net Income increase of ~$13M over next four years

Recommendation*

Shares LTM LTM Enterprise Stock Price Outstanding EBITDA Earnings Value

Acxiom Corp $ 22.12 77.90 $ 157.53 $ 67.66 $ 1,514.84 Virtusa Corp $ 57.43 29.70 $ 69.55 $ 56.22 $ 1,704.59

Additional Value Driven by Operating Improvements ~$305 Million

Before After

WACC (Range from Comps) 8.2% 8.2%

DCF Value (5 Year) $ 206.79 $ 215.19

Terminal Value $ 1,118.69 $ 1,417.23

Enterprise Value (EV) $ 1,325.48 $ 1,632.42

Equity Value $ 1,480.20 $ 1,787.13

EV/EBITDA Multiple 6.84 7.46

EV/Revenue Multiple 1.46 1.64

S/0 EPS Before Offer Price EPS After Offer Price50M $ 2.45 $ 29.60 $ 2.63 $ 31.61 60M $ 2.04 $ 24.67 $ 2.19 $ 26.34 70M $ 1.75 $ 21.15 $ 1.88 $ 22.58 80M $ 1.53 $ 18.50 $ 1.64 $ 19.76

* All values in Millions except Multiple, Stock Price, and EPS information

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