technology market update - marlin & associates · the key to the future for securities...

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M&AM A R L I N & A S S O C I A T E S

F i n a n c i a l Te c h n o l o g yM A R K E TU P D A T E

INVESTMENT BANKING AND STRATEGIC ADVISORY TO THE FINANCIAL TECHNOLOGY AND INFORMATION SERVICES INDUSTRIES

www.MarlinLLC.com © Marlin & Associates Holdings LLC, All Right Reserved

May 2018

Toronto

Washington, D.C.

New York

Dear Clients and Friends,

Our latest Fintech m&a report can be found below. It highlights m&a trends and transactions in the seven segments of the Fintech world that we follow and sometimes lead.

One of those sectors is made up of firms that facilitate the trading, settling and clearing of securities trades - “Securities Exchanges”. As you will see on Page 15 enterprise-value-to-revenue multiples in this segment are among the strongest of any segment we follow.

The average company on the S&P 500 trades at around 2.2x revenue. Canada’s TMX Group trades at about 6.7x 2018E revenue; NASDAQ trades at about 7.3x; LSE is at 7.9x; and ICE trades at 10.0x 2018 revenue. Why such high multiples for a segment that “everyone” says is commoditized – in which “everyone” says margins are being squeezed towards zero? Three reasons:

First, modern securities exchanges are financial technology companies with high levels of “recurring revenue”. Nearly 90% of trades are executed automatically by robots (“algorithms”) and most of the rest is electronic. As the NY Times says: “…robots have been marching into Wall Street for years. That’s especially the case in stock trading…” Firms like this can have high profit margins.

Second, modern security exchanges are leveraging their brand and expertise to become information technology companies. NASDAQ’s recent $705M acquisition of eVestment is an example – bringing in a content and analytics provider used by asset managers, consultants and asset owners to facilitate institutional investment decisions. In that same vein, LSE recently bought The Yield Book - Citi’s bond and data and indexes business for around $685M. And then there is ICE’s series of acquisitions including its $5.2bn purchase of Interactive Data.

Third, in spite of the common wisdom, the combination of tech and brand leverage has made most securities exchanges quite profitable – and in that context, their values look much more reasonable. The average information technology company in the S&P 500 trades at just under 15x LTM EBITDA. NASDAQ with 51% EBITDA margins trades at 14.2x 2018E EBITDA; LSE, with 53% margins, trades at 15.0x; TMX, with 57% EBITDA, trades at 11.6x; ICE, with a whopping 63% EBITDA margin trades at 15.7x 2018E EBITDA.

The key to the future for securities exchanges – and for much of Fintech - is more use of modern technology to bring efficiency to their customers; more focus on value-added information content and analytics aimed at helping their core market make better decisions; and a constant push to increasing profitability – especially as top-line growth slows. If the exchanges – and other Fintech firms can keep pulling it off they will continue to be the highly valued businesses we see today.

A few recent interesting fintech transactions include:

DEAR CLIENTS AND FRIENDS,

Not Your Father’s Stock Exchange: Our May 2018 Fintech Market Update

Marlin & Associates is one of the most active firms advising buyers and sellers of U.S. and international middle-market firms that provide software, data, and related services.The firm is based in New York City, with offices in Washington, D.C., and Toronto, Canada. It has been the recipient of numerous awards including “Boutique Investment Bankof the Year,” “Middle-Market Investment Bank of the Year,” "Middle-Market Financing Agent of the Year – Equity," and “TMT Advisory Bank of the Year.” Marlin & Associates'team of professionals has advised over 200 information-technology transactions.

• Francisco Partners (San Francisco, CA) agreed to acquire VeriFone (NYSE:PAY) for $2.6bn, implying an enterprise value of $3.3bn and valuing the company at an implied 1.8x LTM revenue and 14.6x LTM EBITDA,

• TransUnion (NYSE:TRU) agreed to acquire Callcredit Information Group for £1bn (~$1.4bn),

• Revolut (London, United Kingdom) raised $250mm in a Series C round of funding led by new investor DST Global, and including existing investors Index Ventures and Ribbit Capital,

• OnDeck (New York, NY) raised $100mm in a debt funding round from undisclosed investors.

Kenneth B. Marlin | Managing PartnerMarlin & Associates | www.marlinllc.com

Sincerely,

Please see our May Fintech M&A Update below.

https://qz.com/1078602/why-the-new-york-stock-exchange-nyse-still-has-human-brokers-on-the-trading-floor/

http://www.marlinllc.com/

https://www.linkedin.com/company/marlin-&-associates/

MARLIN & ASSOCIATES: FINTECH MARKET UPDATE

Marlin & Associates3

Sector Analyses10

Banking Software & Processors10

Capital Markets Software & Services11

Data & Analytics – Financial Services12

Insurance Technology13

Payment Technology14

Securities Exchanges15

Technology-Enabled Financial Institutions16

Sector Comparison9

Case Studies17

Events8

Financial Technology is a complex industry that serves a wide range of customers, includingretail, commercial, merchant and investment banks; asset managers; insurance companies;securities exchanges; corporations (treasurers and CFO’s); merchants (payments); and a host ofother financial services industry participants, consumers and intermediaries who interface withthese financial institutions.

MAY 2018

Note: Not a complete list

Ken Marlin

Founder and Managing Partner of M&A• Twice named to II’s Tech 50• Member Market Data Hall of Fame• MD Veronis Suhler Stevenson• CEO of Telesphere Corporation • CEO of Telekurs (NA)• EVP Bridge Information systems• SVP at Dun & Bradstreet• BA from the University of California (Irvine)• MBA from UCLA, post-MBA from New

York University Jason Panzer

Chief Operating Officer of M&A• 20+ years of M&A experience advising

technology and PE firms, globally• VP Business Development at FactSet• M&A attorney of Skadden, Arps, Slate,Meagher and Flom

• CFO of JCF Group• MBA from Columbia Business School• J.D. from Fordham Law School• CFA Charterholder

• 18+ years of investment banking andprivate equity experience

• Named twice to Dealer’s Digest and recently M&A Advisor’s “40-Under-40”

• Founded Marlin & Associates with Ken Marlin

• Formerly at Veronis Suhler Stevenson, Morgan Stanley, and American International Group

• BS from Binghamton University

MARLIN AND ASSOCIATES: WHO WE ARE

OUR SENIOR TEAM BRINGS EXTENSIVE DEPTH, BREADTH AND INDUSTRY EXPERTISE TO OUR CLIENTS

Michael Maxworthy

MAY 2018

"The Marlin & Associates team was a highly valued player in completing our transaction. Their professional expertise and commitment to the process, preparation, positioning, presentation, and leadership got us to the finish line. They’re smart, available whenever needed, and bring the work ethic to get the deal done.”

Roman BrunnerCEO, QuoVadis

Tom Selby

• 18+ years of M&A experience • VP of Business Development at

SunGard• Founder of software company sold to

SunGard • Started career designing trading software

for TD Bank• BaSC, Engineering from University of

Toronto

Sam Levy

• 10+ years of technology investment banking experience

• Experience working with both large corporations and entrepreneurial technology-based companies

• Formerly at BNPParibas,• MBA, NYU Stern, MS from

CentraleSupelec

Tom Selby

Anup Agarwal

• 18+ years of investment banking experience

• Formerly at Lehman Brothers, Bear Stearns and Houlihan Lokey

• MBA, University of Virginia (Darden); BS, Birla Institute of Technology & Science

OUR FOUNDING PARTNER HAS FOUR TIMES BEEN RECOGNIZED AS ONE OF THE MOST INFLUENTIAL PEOPLE IN FINANCIAL TECHNOLOGY

“Deal making is as integral to the evolution of the financial technology industry as thetechnologies themselves and Ken Marlin has been in the thick of it...”

– Institutional Investor 2014

In 2011, Institutional Investor, the international publisher focused primarily oninternational finance, has named M&A’s Founding Partner, Ken Marlin, as one ofInstitutional Investor’s Tech 50, which honored the 50 most “disruptive” figures in thefinancial technology sector

Institutional Investor calls these 50 people disrupters because they're changing theway Wall Street does business

Ken was the only investment banker included on the list

In 2014, Institutional Investor again named Ken as one of the 50 most influentialpeople in financial technology

Ken was, again, the only investment banker included on the list

In 2015 and 2016, Institutional Investor named Ken one of the “35 Most PowerfulDealmakers of 2016”

Institutional Investor calls these 35 people the influential financiers that acceleratefinancial start-up’s paths to commercialization

Candidates were evaluated by four primary sets of attributes: achievements andcontributions over the course of a career; scope and complexity ofresponsibilities; influence and leadership inside and outside the organization;and pure technological innovation.

MAY 2018

M&A Award USA TMT Advisory Firm of the Year (2012, 2015, 2017) – Acquisition International

• Financial Technology Deal of the Year (2012, 2011)• North America Small Mid Markets Corporate Deal of the Year (2013)• Corporate M&A Deal of the Year (2010)• Technologies Deal of the Year (2010)* Firm-wide Awards

• Cross-Border Deal of the Year (2017)*• Cross-Border Boutique Investment Banking Firm of the Year (2016)*• Boutique Investment Banking Firm of the Year (2014, 2015, 2016)*• Advisory Firm of they Year (2015)*• Middle Market International Professional Services (B-to-B) Deal of the Year (2013)• Financial Services Deal of the Year (2013, 2012 and 2011)• Information Technology Deal of the Year (2011)• Middle Market Deal of the Year <$25M (2011)• Corporate and Strategic Acquisition of the Year (2011)• Middle Market Financial Services Deal of the Year (2011 and 2010)• Middle Market Information Technology Deal of the Year (2011 and 2010)• Middle Market International Financial Services Deal of the Year (2013 and 2010)• Middle Market International Information Technology Deal of the Year (2010)• Middle Market Financial Services Turnaround Deal of the Year (2009)• Middle Market Information Technology Turnaround Deal of the Year (2009)• Middle Market International Deal of the Year(2008)• Middle Market Financial Services Deal of the Year (2008)• Middle Market Technology Deal of the Year (2008)• Middle Market Investment Banking Firm of the Year (2008 and 2007)*• Middle Market International/Cross Border Deal of the Year (2007, Below $100M)• Middle Market Financial Services Deal of the Year (2007, Below $100M)• Middle Market Financing Agent of the Year – Equity (2007)*

PEER AND INDUSTRY GROUP RECOGNITION

Boutique Investment Banking Firm of the Year(2014, 2015, 2016) - The M&A Advisor

The M&A Advisor and The M&A Forum have recognized Marlin & Associates for excellence in multiple deal categories including:

The Global M&A Network has recognized Marlin & Associates for excellence in multiple deal categories through its M&A Atlas Awards:

TMT Advisory Firm of the Year (2016)

Boutique Investment Banking Firm of the

Year(2016)

– ACQ5 (Acquisition Finance

Magazine)

“We are always grateful to be recognized for our hard work, but we are more pleased that we areable to help our clients achieve the results that they seek.”

Ken MarlinFounder and Managing Partner

Note: Not a complete list.

MAY 2018


CLIENTS CHOOSE M&A TO ADVISE THEM ON THEIR IMPORTANT STRATEGIC MOVES

MAY 2018

“The team at Marlin & Associates was critical to our completion of this important strategic transaction, providing invaluable guidance throughout every step of the process. Their expertise in financial technology, SaaS, and the Salesforce ecosystem helped us to prepare effectively and best position Tier1CRM to potential investors. Their knowledge of the market helped us to identify the ideal investors as we move into the next phase of growth at Tier1. We could not have closed this transaction without their steady hand throughout,” Mark Notten, CEO, Tier1CRM

has received an equity investment from

Marlin & Associates acted as exclusive strategic and financial advisor to Investment Metrics

has been acquired by

Marlin & Associates acted as exclusive strategic and financial advisor to OptionsCity Software

Toronto, Canada

Atlanta, GA

Marlin & Associates acted as exclusive strategic and financial

advisor to TMX Group

has sold the Atrium wireless and extranet infrastructure

businesses to

a portfolio company of

Hamilton, Bermuda

Marlin & Associates acted as exclusive strategic and financial advisor to QuoVadis and ABRY


London, UKreceived an investment

from


advisor to OpenGamma

New York City, NY




advisor to Advise Technologies, LLC

New York City, NY

Lake Success, NY

Marlin & Associates acted as exclusive strategic and financial advisor to M&O Systems, Inc.


Phoenix, AZ

Boston, MA and San Francisco, CA


advisor to BillingTree

has completed a majority recapitalization with

Salt Lake City, UT

Chicago, IL

Marlin & Associates acted as exclusive strategic and financial advisor to iTransact Group, LLC



advisor to Tier1CRM

has received an equityinvestment from

Marlin & Associates acted as exclusive strategic and

financial advisor to MSCI Inc.

New York, NY

has sold Financial Engineering Associates, Inc. to

A portfolio company ofDallas, TX

Marlin & Associates acted as strategic and financial

advisor to empow

Boston, MA

received a series B investment led by

Boston, MA


CLIENTS CHOOSE M&A TO ADVISE THEM ON THEIR IMPORTANT STRATEGIC MOVES

MAY 2018

“Throughout this process, the team at Marlin & Associates provided great financial and strategic advice. They served as a true strategic partner and integral part of the team as they guided the complex cross-border carve-out project. Marlin & Associates unique industry expertise played a critical role in bringing this project to a successful conclusion for all stakeholders." Eric SinclairPresident, TMX Datalinx



financial advisor to Alacra, Inc.

Palo Alto, CA

New York, NY

Paris, France

Palo Alto, CA


financial advisor to Everteam.

has acquired the Business Process Management

business from

Campbell, CA

received an investment from


advisor to Trunomi.

Boston, MA

Windsor, CT

Marlin & Associates acted as exclusive strategic and financial advisor to Varden Technologies.

has been acquired byNew York, NY

Dublin, Ireland

Marlin & Associates acted as financial advisor to Aquiline

Capital Partners.

has invested in

has sold the assets of

to

Marlin & Associates acted as exclusive strategic and financial advisor to CNO Financial Group.

Dublin, Ireland

London, United KingdomMarlin & Associates acted as

exclusive strategic and financial advisor to Information Mosaic.

has been acquired bySan Francisco, CA

has led a $60 million investment in

New York, NY

Marlin & Associates acted as exclusive financial advisor

Francisco Partners.

Vienna, Austria

received a majority investment from

New York, NY


advisor to AIM Software.

Brentwood, TN


Marlin & Associates acted as strategic and financial advisor to Agilum Healthcare Intelligence

has been acquired bySan Mateo, CA


financial advisor to Xignite.

received a strategicinvestment from

Tokyo, Japan


Port Talbot, United Kingdom

London, United Kingdom


financial advisor to Vizolution.

2018 Fintech Events:

ConferenceDate Location Website

Amsterdam DetailsJune 4-6, 2018

Toronto Details

MAY 2018

Money2020 EuropeMoney20/20 is the world’s largest marketplace for ideas, connections and deals in Payments and Financial Services. It’s where leaders – representing every sector of the industry –come to seize new business opportunities, strengthen partnerships and discover the latest disruptions.

June 27, 2018 Empire Startups Fintech ConferenceHear from those forging new trails in payments, blockchain, lending, robo-advisors, insurance tech, real estate and more. In addition to attracting hundreds of FinTech entrepreneurs, this conference also plays host to the investors and service providers that help accelerate startups. The audience can also look forward to keynotes, panels and demo updates from some of the top FinTech startups in the world.

May 22-24, 2018Data DisruptDataDisrupt is the premier event focused on the impact of large scale data sets, new data sources, advanced analytic techniques, the latest technologies and the most innovative organizations on the financial services sector. The conference will highlight many of the world's leading data analytics companies, and will congregate the ecosystem converging around them.

New York, NY Details

June 19-21, 2018 The Future of FintechThe Future of Fintech 2018 is a one-of-a-kind gathering of the world's largest financial institutions, best fintechstartups, and most active venture investors.Get the latest on blockchain, wealth tech, insurance, lending and a whole lot more.


July 11- 12, 2018 InvestNow in its third year, In|Vest has grown to be the industry’s leading wealth-tech event. In 2017, we expect to attract 1,000+ executives—buyers and sellers—from all facets of the wealth management. This event shares robust content that covers all aspects of the changing industry and features an exhibit hall that showcases the future of wealth management technology from the perspective of both the endemic players in the industry and the upstart competitors disrupting the status quo.


Sept 12, 2018European Financial Information SummitThe European Financial Information Summit is the leading forum providing data executives with the latest strategies to help them meet business, regulatory and technology challenges facing this rapidly evolving industry

London, UK Details

https://europe.money2020.com/registration-pricing-listing

https://www.empirefintechconference.com/pages/to2018

http://www.datadisrupt.com/about-v2/

https://events.cbinsights.com/future-of-fintech

https://www.financial-planning.com/conference/invest-2017/about

http://www.financialinformationsummit.com/eu/static/home

Sources: Marlin & Associates, Capital IQ and Public sources. All market and operating data is sourced as of 4/30/18. These companies are asample of firms in the sector as M&A defines it, and do not comprise a comprehensive list of all firms in the sector. M&A calculates mean andmedian multiples using data from a set of firms that it believes to be reasonable and which may not be identical to the set reflected above.

Enterprise Value / Revenue

Enterprise Value / EBITDA

FINANCIAL TECHNOLOGYSector Comparison Snapshot:

0x 2x 4x 6x 8x 10x

Technology-Enabled Financial Institutions*

Insurance Software

Capital Markets Software & Services

Payment Technology

Banking Software & Processors

Data & Analytics - Financial Services

Securities Exchanges

2017E EV/Revenue 2018E EV/Revenue

0x 5x 10x 15x 20x 25x

Payment Technology


Data & Analytics - Financial Services

Insurance Software


Technology-Enabled Financial Institutions*


2017E EV/EBITDA 2018E EV/EBITDA

*Tech-Enabled Financial Institutions multiples calculated using Market Cap / Revenue and Market Cap / EBT

MAY 2018

Source: Marlin & Associates, Capital IQ and Public sources. All market and operating data is sourced as of 4/30/18. These companies are a sampleof firms in the sector as M&A defines it, and do not comprise a comprehensive list of all firms in the sector. M&A calculates mean and medianmultiples for the sector using data from a set of firms that it believes to be reasonable and which may not be identical to the set reflected above.


Public Market Data

[1] Q2 Holdings (QTWO) added to the index as of IPO 3/20/14

Recent Activity

MAY 2018

90

120

150

180

210

240

270

300

330

May-13 May-14 May-15 May-16 May-17 May-18

5 Year M&A Banking Software Index[1] vs. S&P 500, base = 100

M&A Banking Software Index S&P 500

8x

11x

14x

17x

20x

23x

26x

3.0x

3.5x

4.0x

4.5x

5.0x

5.5x

6.0x


EV /

EBIT

DA

EV /

Reve

nue

5 Year LTM Revenue & EBITDA Multiples[1]

EV / LTM Revenue EV / LTM EBITDA

Company Market Enterprise(USD millions) Cap Value CY2017A CY2018E CY2017A CY2018E CY2017A CY2018E CY2017A CY2018E

FIS 31,720 40,015 4.4x 4.7x 16.0x 12.7x (1%) (6%) 27% 37%Fiserv 29,875 34,039 6.0x 5.8x 19.0x 16.2x 3% 3% 31% 36%Jack Henry & Associates 9,265 9,307 6.3x 6.0x 20.4x 17.4x 6% 6% 31% 34%Temenos 9,134 9,389 12.8x 11.1x 47.1x 28.6x 16% 15% 27% 39%Oracle Financial Services 5,463 5,024 7.4x 6.8x 18.3x 16.1x 1% 10% 41% 42%Ellie Mae 3,449 3,217 7.7x 6.4x 45.7x 24.5x 16% 20% 17% 26%ACI Worldw ide 2,784 3,402 3.3x 3.3x 19.1x 12.9x 2% 2% 17% 25%Q2 Holdings 2,077 1,958 10.1x 8.3x na nm 29% 21% na 9%Bottomline Technologies 1,516 1,563 4.3x 3.9x 37.5x 17.1x 6% 10% 11% 23%Polaris Consulting & Services 722 626 1.7x 1.4x 14.0x 10.9x 23% 22% 12% 13%Sw ord Group 412 389 1.9x 1.7x 13.3x 11.0x 8% 12% 14% 15%Microgen 400 387 4.5x 4.1x 20.5x 16.8x 46% 11% 22% 24%Gresham Technologies 184 172 5.8x 5.4x 34.1x 21.6x 26% 8% 17% 25%

Trim Mean 5,918 6,300 5.6x 5.1x 24.4x 16.7x 12% 11% 22% 27%Median 2,784 3,217 5.8x 5.4x 19.8x 16.5x 8% 10% 20% 25%

EV / Revenue EV / EBITDA Revenue Growth EBITDA Margin

DateAnnounced Acquirer(s) / Investor(s) Target / Issuer Description

11/28/16

QuantGroup (Beijing, China) raised $72mm in a Series C round of funding led by new investor Sunshine Insurance Group, and including participation from GuosenHongsheng Investment Co., Fosun Capital, and other undisclosed investors. QuantGroup provides online financial services in China.

11/16/16

LendingTree (NASDAQ:TREE) acquired Iron Horse Holdings (dba: CompareCards) for $130mm. CompareCards is an online platform enabling consumer credit card comparisons, and providing credit education and credit health management solutions. The transaction consideration consists of $85mm cash at closing and up to $45mm of earn-out payments paid during 2017 and 2018.

11/10/16

Meta Financial Group (NASDAQ:CASH) acquired Specialty Consumer Services (SCS) for $54mm. SCS offers a loan management platform and a proprietary underwriting model that are primarily used to deliver consumer tax advances and other consumer credit services. The transaction consideration consists of approximately $15mm at closing, with potential for additional contingent payments.


4/26/18

Revolut (London, United Kingdom) raised $250mm in a Series C round of funding led by new investor DST Global, and including existing investors Index Ventures and Ribbit Capital. The round valued the company at a post-money valuation of $1.7bn. The company has now raised $340mm to date. Revolut has rapidly expanded offerings from no-fee foreign exchange to travel insurance, crypto trading, and others.

4/15/18

Goldman Sachs (NYSE:GS) acquired Clarity Money for an undisclosed sum. Clarity Money provides a free personal financial management (PFM) application for consumers. Over time, Goldman Sachs plans to rebrand Clarity Money as part of it’s Marcus offering. The acquisition is expected to add more than 1 million consumers to the Marcus business.

4/5/18

Banker’s Toolbox (Austin, TX) acquired MainStreet Technologies for an undisclosed sum. MainStreet Technologies, based in Atlanta, provides banks and credit unions with loan risk management solutions. This is the second add-on acquisition completed by Banker’s Toolbox since Accel-KKR invested in the company in July 2015.



Public Market Data

Recent Activity

MAY 2018

12x

15x

18x

21x

24x

2.5x

3.0x

3.5x

4.0x

4.5x


EV /

EBIT

DA

EV /

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nue

5 Year LTM Revenue & EBITDA Multiples


100

140

180

220

260


5 Year M&A Capital Markets Index vs. S&P 500, base = 100

M&A Capital Markets Index S&P 500


IHS Markit 20,246 24,379 6.8x 6.3x 21.8x 16.0x (1%) 8% 31% 39%Broadridge 12,897 13,753 3.2x 3.2x 17.3x 16.7x 24% 0% 19% 19%SS&C Technologies 10,618 12,531 7.5x 3.8x 19.9x 12.0x 13% 99% 38% 31%Computershare 6,978 8,097 3.6x 3.6x 14.7x 12.4x 10% 2% 25% 29%SimCorp 2,855 2,853 6.9x 6.3x 25.8x 22.7x 16% 10% 27% 28%Envestnet 2,550 2,730 4.0x 3.3x 35.3x 18.0x 18% 20% 11% 19%Fidessa group 2,076 1,951 4.1x 4.1x 21.7x 18.8x 7% (2%) 19% 22%First Derivatives 1,374 1,389 5.9x 5.1x 32.6x 28.7x 21% 15% 18% 18%IRESS 1,361 1,483 4.6x 4.3x 20.2x 15.6x 10% 8% 23% 27%Linedata Services 288 381 1.8x 1.8x 9.1x 7.7x 7% (3%) 19% 24%Cinnober 177 167 4.0x 2.9x na 61.4x 7% 36% na 5%StatPro Group 152 179 2.7x 2.3x 27.6x 14.9x 31% 14% 10% 16%Brady 69 63 2.0x 2.0x na 15.1x (24%) 3% na 13%




4/11/18

NorthStar Financial Services Group (Omaha, NE) agreed to acquire FTJ FundChoice for an undisclosed sum. FTJ FundChoice is a turnkey asset management program (TAMP) with roughly $10bn assets under administration. This is the first acquisitioncompleted by NorthStar since being acquired by TA Associates in 2015.

4/10/18

Symphony Communication Services (Palo Alto, CA) raised $67mm in a round of funding that included new investors Barclays, Bpifrance Investissement, and CLSA Capital Partners, and participation from existing investors. The company has now raised $300mm to-date. Symphony now has more than 300 firms and 320,000 users on its team collaboration platform.

4/5/18

ACA Compliance (New York, NY) acquired Cordium for an undisclosed sum. Cordium is a provider of GRC services to the asset management and securities industries. The acquisition will expand ACA’s presence in European markets. The combined organization will have nearly 700 employees serving more than 4,000 clients globally.


Data & Analytics – Financial Services

Public Market Data

MAY 2018

Recent Activity


S&P Global 47,980 51,205 8.4x 7.9x 17.5x 16.1x 7% 6% 48% 49%Moody's 31,548 35,798 8.5x 7.6x 18.0x 15.8x 17% 12% 47% 48%Thomson Reuters 28,633 35,374 3.1x 3.1x 14.0x 10.2x 1% 1% 22% 30%Experian 21,100 24,507 5.7x 5.1x 16.0x 14.9x (7%) 12% 36% 34%Verisk Analytics 17,989 20,618 9.6x 8.7x 20.9x 18.0x 8% 11% 46% 48%MSCI 13,872 15,101 11.9x 10.6x 22.9x 19.4x 11% 12% 52% 54%Equifax 13,592 16,033 4.8x 4.6x 14.4x 13.6x 7% 4% 33% 34%CoStar Group 13,328 12,397 12.8x 10.4x 49.5x 32.2x 15% 23% 26% 32%TransUnion 12,339 14,635 7.6x 6.7x 20.8x 17.2x 13% 13% 36% 39%FactSet Research Systems 7,535 7,845 6.2x 5.7x 18.4x 16.7x 10% 9% 34% 34%FICO 5,421 6,017 6.3x 5.8x 27.9x 22.7x 5% 10% 23% 25%Morningstar 4,658 4,453 4.9x 5.0x 19.0x 17.2x 14% (2%) 26% 29%Dun & Bradstreet 4,301 5,553 3.2x 3.1x 12.1x 10.6x 2% 2% 26% 29%CoreLogic 4,100 5,647 3.1x 3.0x 14.7x 11.5x (5%) 1% 21% 26%



11x

13x

15x

17x

19x

3.0x

4.0x

5.0x

6.0x

7.0x


EV /

EBIT

DA

EV /

Reve

nue



100

150

200

250


5 Year M&A Data & Analytics Financials Index vs. S&P 500, base = 100

M&A D&A Financial Index S&P 500


4/24/18

Billtrust (Hamilton, NJ) acquired Credit2B for an undisclosed sum. Credit2B leverages crowdsourcing and other technologies to provide up-to-date payment behaviors and financial risk information on common customers, easing the credit decisioning process for suppliers. The transaction expands Billtrust’s credit analytics capabilities.

4/20/18

TransUnion (NYSE:TRU) agreed to acquire Callcredit Information Group for £1bn (~$1.4bn). Callcredit is the second-largest and fastest-growing consumer credit bureau in the U.K. International expansion is a key growth strategy for TransUnion, already doing business in 33 countries.

4/10/18

DTN (Burnsville, MN) acquired Energy Management Institute (“EMI”) for an undisclosed sum. EMI provides education and training services to oil, power, and natural gas companies, utilities, and investment banks. EMI uses its market expertise to publish business-critical indices and newsletters that provide market news and analysis, such as purchasing and hedging advice and pricing.


Insurance Software

Public Market Data

[1] Majesco added to the index as of IPO 6/30/15

Recent Activity

MAY 2018

0x

5x

10x

15x

20x

25x

1.0x

2.0x

3.0x

4.0x

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EV /

EBIT

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EV /

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nue



100

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250

300

350


5 Year M&A Insurance Tech Index[1] vs. S&P 500, base = 100

M&A Insurance Tech Index S&P 500


Guidew ire Softw are 6,504 5,999 10.4x 8.7x nm 47.9x 28% 20% 7% 18%Ebix 2,453 2,815 7.7x 6.3x 22.7x 17.0x 22% 22% 34% 37%CorVel 938 884 1.6x na 12.6x nm 7% na 13% nmSapiens 455 473 1.8x 1.7x 22.0x 12.2x 25% 5% 8% 14%Majesco 185 187 1.6x na nm nm (6%) na 1% nm

Trim Mean 1,282 1,391 3.7x 6.3x 22.0x 17.0x 18% 20% 9% 18%Median 938 884 1.8x 6.3x 22.0x 17.0x 22% 20% 8% 18%



4/26/18Stone Point Capital (Greenwich, CT) agreed to acquire Mitchell International. Mitchell provides technology, connectivity, and information solutions to the property and casualty insurance industry.

4/4/18Accel-KKR (Menlo Park, CA) acquired a majority stake in Insurance Technologies Corporation. ITC provides marketing, rating, and management software and services to the insurance industry.

3/27/18

Oscar Insurance (New York, NY) raised $165mm in a growth funding round, valuing the company at $3.2bn. This round was led by Founders Fund, with participation from Khosla Ventures and CapitalG. Oscar Insurance provides health insurance plans and related services.


Payment Technology

Public Market Data

Recent Activity

MAY 2018

10x

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5 Year M&A Payment Tech Index[1] vs. S&P 500, base = 100

M&A Payment Tech Index S&P 500

Company Market Enterprise(USD millions) Cap Value CY2017E CY2018E CY2017E CY2018E CY2017E CY2018E CY2017E CY2018E

PayPal 90,800 81,289 6.2x 5.3x 33.5x 20.0x 21% 17% 19% 26%Worldpay 25,592 31,235 8.2x 8.1x 18.5x 16.7x 11% 2% 45% 48%FleetCor Technologies 19,329 22,806 10.1x 9.0x 20.4x 17.1x 23% 13% 50% 52%Square 18,744 18,169 18.5x 13.5x nm nm 43% 37% 14% 19%Global Payments 18,092 22,004 5.5x 5.6x 19.9x 16.1x 5% (1%) 28% 35%First Data 17,123 37,407 4.6x 4.4x 13.0x 11.2x 4% 6% 35% 39%Wirecard 16,661 15,555 8.5x 6.8x 33.0x 24.2x 45% 24% 26% 28%Total System Services 15,408 19,183 5.6x 5.1x 19.5x 14.5x 12% 11% 29% 35%Cielo 14,711 16,558 5.1x 4.9x 11.4x 10.8x (6%) 3% 44% 45%Western Union 9,156 11,364 2.1x 2.0x 8.7x 8.1x 2% 4% 24% 24%WEX 7,035 9,105 7.3x 6.4x 20.7x 15.4x 23% 15% 35% 41%Euronet Worldw ide 4,214 3,964 1.8x 1.5x 10.0x 8.3x 15% 14% 18% 19%Blackhaw k Netw ork 2,536 2,911 1.3x 1.2x 15.4x 10.9x 17% 9% 8% 11%EVERTEC 1,339 1,876 4.6x 4.3x 13.5x 9.9x 5% 7% 34% 44%PayPoint 797 760 2.8x 2.8x 9.2x 9.1x (4%) (2%) 30% 31%SafeCharge 673 565 5.1x 4.4x 18.0x 15.1x 7% 15% 28% 29%MoneyGram International 551 1,270 0.8x 0.8x 5.7x 4.6x (2%) 1% 14% 17%



[1] EVERTEC (EVTC) added to the index as of 4/17/13, Blackhawk Network (HAWK) added as of 4/24/13, SafeCharge (SCH) added as of 4/4/14, PayPal (PYPL) added as of 7/7/15, Worldpay (WPG) added as of 10/14/15, First Data (FDC) added as of 10/16/15, Square (SQ) added as of 11/20/15.


4/26/18

Revolut (London, United Kingdom) raised $250mm in a Series C round of funding led by new investor DST Global, and including existing investors Index Ventures and Ribbit Capital. The round valued the company at a post-money valuation of $1.7bn. The company has now raised $340mm to date. Revolut has rapidly expanded offerings from no-fee foreign exchange to travel insurance, crypto trading, and others.

4/12/18

Paysafe (London, United Kingdom) agreed to acquire iPayment for an undisclosed sum. iPayment is a U.S.-based provider of payment and processing solutions for small and medium-sized businesses. The acquisition forms part of Paysafe’s previously stated investment strategy to expand its presence in North America.

4/9/18

Francisco Partners (San Francisco, CA) agreed to acquire VeriFone (NYSE:PAY) for $2.6bn, implying an enterprise value of $3.3bn and valuing the company at an implied 1.8x LTM revenue and 14.6x LTM EBITDA. VeriFone provides payments and commerce solutions at the point of sale (POS) worldwide, with more than 30 million devices in more than 150 countries.



Public Market Data

MAY 2018

Recent Activity

[1] Euronext (ENX) added to the index as of IPO 6/20/14


CME Group 53,729 55,087 15.1x 13.2x 21.9x 17.3x 1% 14% 69% 76%IntercontinentalExchange (ICE) 42,462 48,859 10.9x 10.0x 17.2x 15.7x 3% 6% 61% 63%Hong Kong Exchange 40,602 38,118 27.0x 18.4x 33.1x 24.3x 18% 24% 69% 76%Deutsche Börse Group 24,784 8,679 2.8x 2.7x 5.8x 4.6x 3% 3% 48% 58%London Stock Exchange (LSE) 20,534 22,054 9.8x 7.9x 19.9x 15.0x 18% 6% 42% 53%The Nasdaq OMX Group 14,925 18,435 5.0x 7.3x 14.6x 14.2x 7% (36%) 32% 51%BM&F Bovespa 14,549 15,216 23.1x 11.8x 28.6x 16.8x 58% 23% 51% 71%CBOE 12,034 13,003 na 11.1x 19.7x 16.1x na (47%) 30% 69%Japan Exchange Group (JPX) 9,958 8,881 8.8x 7.6x 12.7x 12.2x 4% 11% 66% 63%Australian Exchange (ASX) 8,535 7,443 10.8x 11.8x 13.2x 15.4x 5% (14%) 77% 77%Singapore Exchange (SGX) 6,208 5,602 9.4x 8.6x 17.3x 15.0x 3% 6% 53% 57%Euronext 4,945 4,845 8.2x 6.7x 14.1x 11.8x 7% 14% 54% 57%TMX Group 3,360 4,162 7.2x 6.7x 12.0x 11.6x 0% 8% 60% 57%



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5 Year M&A Sec Exchanges Index[1] vs. S&P 500, base = 100

M&A Sec Exchanges Index S&P 500


4/5/18

Intercontinental Exchange (NYSE:ICE) agreed to acquire the Chicago Stock Exchange for an undisclosed sum. The Chicago Stock Exchange plans to continue to operate as a registered national securities exchange and expects to benefit from the planned deployment of the NYSE Pillar trading technology in ICE’s Chicago data center.

3/15/18

CME Group (NASDAQ:CME) agreed to acquire NEX Group for £3.9bn (~$5.4bn). NEX Group delivers pricing, analytics, index, and regulatory reporting solutions. The merger plans to extend CME Group’s FX business beyond futures to spot products, and broaden its Treasury offering to include cash products.

2/21/18

The Shenzhen Stock Exchange (Shenzhen, China) and The Shanghai Stock Exchange (Shanghai, China) agreed to acquire a 25% stake in Dhaka Stock Exchange for $119mm, implying an enterprise value of $477mm. The company offers various investment products for investors, such as ordinary shares of listed companies, mutual funds, debentures, and bonds.


Technology-Enabled Financial Institutions

Public Market Data

Recent Activity

[1] Elevate (ELVT) added to the index as of IPO 4/6/17

Company Market Market Cap / Revenue Market Cap / EBT Revenue Growth EBT Margin(USD millions) Cap CY2017A CY2018E CY2017A CY2018E CY2017A CY2018E CY2017A CY2018E

The Charles Schw ab 75,836 8.8x 7.5x 20.8x 15.3x 15% 17% 42% 49%TD Ameritrade 33,111 8.3x 6.0x 20.1x 14.0x 20% 39% 41% 43%E*TRADE 16,244 6.4x 5.6x 16.6x 10.8x 21% 13% 39% 52%MarketAxess 7,525 18.9x 17.0x 37.3x 30.9x 7% 11% 51% 55%BGC Partners 6,399 2.2x 1.7x 12.6x 7.2x 2% 30% 18% 24%Interactive Brokers 5,380 3.4x 2.8x 5.1x 2.9x 10% 24% 67% 94%ICAP 5,089 6.5x 6.1x 20.1x 16.7x 18% 7% 32% 37%IG Group 4,152 5.7x 5.6x 12.4x 11.4x 3% 1% 46% 49%Monex Group 1,821 4.1x 3.8x 40.5x 34.4x 15% 7% 10% 11%LendingClub 1,119 1.8x 1.6x na 13.7x 20% 15% na 12%Investment Technology Group 687 1.4x 1.3x nm 6.2x 4% 6% 1% 22%On Deck 388 1.1x 1.0x na 13.5x 146% 9% na 8%BinckBank 372 1.1x 2.1x 47.8x 9.2x 18% (47%) 2% 23%GAIN Capital 371 1.3x 1.0x na 3.9x (27%) 27% na 26%Elevate Credit 334 0.5x 0.4x nm 2.4x 16% 19% 0% 17%

Trim Mean 6,358 4.0x 3.6x 22.6x 12.0x 13% 14% 28% 31%Median 4,152 3.4x 2.8x 20.1x 11.4x 15% 13% 36% 26%

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5 Year M&A Fintech Sector Index vs. S&P 500, base = 100

M&A Tech-enabled Fin Institutions Index S&P 500


11/16/16

LendingTree (NASDAQ:TREE) acquired Iron Horse Holdings (dba: CompareCards) for $130mm. CompareCards is an online platform enabling consumer credit card comparisons, and providing credit education and credit health management solutions. The transaction consideration consists of $85mm cash at closing and up to $45mm of earn-out payments paid during 2017 and 2018.

11/10/16

Intrum Justitia (STO:IJ) acquired 1st Credit for £130mm ($161mm), valuing the Company at an implied 3.9x 2015 EBITDA. 1st Credit provides debt purchase and outsourced debt collection services for banks, credit card providers, utilities, telecoms, and retail companies.


4/25/18

Deserve (Menlo Park, CA) raised $50mm in a debt funding round led by Keystone National. Deserve offers alternative credit cards to college and university students.The accounts determine credit worthiness on alternative data points to the traditional FICO.

4/24/18 UndisclosedOnDeck (New York, NY) raised $100mm in a debt funding round from undisclosed investors. OnDeck is a technology powered lending company for small and medium sized businesses.

3/28/18

Branch International (San Francisco, CA) raised $70mm in a Series B funding round led by Trinity Ventures. The investment consisted of $50mm in debt and $20mm in equity. The company plans to use the funds to expand their financial offerings to additional countries.

MAY 2018

Marlin & Associates advises OpenGamma on multinational strategic investment – includingparticipation from JPX

M&A formed a team of experts to work with management to craft materials that would communicate the complexity and potential of the large and growing market that OpenGamma addresses, the company’s strong value proposition, and its unique approach to penetrate that market. The team at Marlin then worked with the company to identify and reach out to more than a dozen potential partners in four countries. Ultimately the company decided to take in new capital from the Japanese Exchange Group (“JPX”) as well as additional capital from Accel Partners, NEX (formerly known as ICAP), Euclid Opportunities and ex-SunGard CEO Cristóbal Conde.

JPX is a particularly strong new partner for OpenGamma as it provides both needed capital as well as a strong strategic benefit. JPX is a leading exchange group in Asia. Its affiliates include the Japan Securities Clearing Corporation (“JSCC”), a leader in OTC derivatives transactions. JPX’s involvement and investment together with capital from the other investors is expected to facilitate both geographic and product expansion for OpenGamma and help the company address the increasing demand from financial institutionsworldwide for more efficient use of OTC capital.

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Marlin & Associates acted as OpenGamma’s exclusive strategic and financial advisor for this important transaction, initiated discussions with several parties and worked with the company to negotiate terms, conduct due diligence reviews and complete the transaction. The process involved working with people in the US, UK and Japan as well as OpenGamma’s many stakeholders in disparate locations around the globe which added to the complexity.

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OpenGamma is a London-based pioneer in open source financial software and a leading provider of innovative, SaaS-based derivatives pricing and risk analytics to some of the world’s largest global banks, central counterparties and buy-side firms. The company was founded in 2009 to bring a better way to price and manage risk associated with the $500 Trillion global Over-The-Counter (“OTC”) derivatives market - offering its pricing and risk models via enterprise software as well as via a flexible and cost-effective API. The company quickly attracted financial backing from some of the world’s premier fintech investors including Accel Partners, Firstmark Capital and ICAP, who appreciated the changes occurring in a market that has historically been privately negotiated and loosely regulated, but also one that is moving to become much more regulated and transparent.

In 2016, management and OpenGamma’s board of directors asked Marlin & Associates to advise the firm in an effort to raise additional capital to continue funding the company’s growth. They wanted a new partner to join with existing investors - one that would understand the business and bring more than just money to the table. They wanted a new partner that also would be strategically positioned to help the company continue to build out its comprehensive portfolio of industry-leading products in this rapidly changing regulatory environment.

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advisor to OpenGamma

London, United Kingdom

Mas NakachiVice Chairman

"Throughout this process, the team at Marlin & Associates acted as our trusted financial and our strategic advisor. With their guidance we were able to navigate a great outcome for all stakeholders. They worked closely with our board and management team to support a complex process involving many parties across multiple geographies. They were invaluable to the process.

MAY 2018

Marlin & Associates' client, Advise Technologies, acquired by Compliance Solutions Strategies, aportfolio company of CIP Capital

M&A had the advantage of knowing both the governance risk and compliance (“GRC”) sector and the players including both strategic firms as well as financial sponsors that have targeted the GRC industry for investment. M&A organized a dedicated team to work closely with Management to identify strengths and weaknesses of the Company, and to develop materials that would seamlessly communicate Advise’s story, strategy and growth potential.

With Marlin’s assistance, Advise had a tremendous amount of companies who indicated strong interest in partnering with Advise and ultimately received multiple offers. After careful consideration of several alternatives, Advise chose to negotiate final terms with Compliance Solution Strategies (“CSS”) a GRC company financed by through CIP Capital, a growth-oriented, middle-market private equity firm. The CSS platform was enhanced with two other acquisitions, Ascendant Compliance Management and The MoneyMate Group. Together these firms will be in a strong position to offer a global platform that provides a comprehensive regulatory reporting, data management, outsourced compliance management services, compliance workflow tools, shareholding disclosure, trade monitoring, trading analytics and cybersecurity solutions.

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M&A initiated this transaction, advised the Company through all phases of the process from preparation through negotiations, duediligence reviews and the closing - providing guidance on matters such as partner selection, valuation, structure and key terms. M&A worked diligently with the company to help the company craft materials, identify potential partners, negotiate alternative offers with multiple parties and manage the due diligence review process. Marlin & Associates acted as exclusive strategic and financial advisor to the shareholders and managers of Advise Technologies.

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Advise provides regulatory reporting solutions to hedge funds and investment managers. The company was founded in 2010 by CEO Doug Schwenk. He and current COO/CFO Jeff Faber had worked together at a multibillion dollar hedge fund, with Doug leading the noninvestment side of the business and Jeff in a tech/ops role. Both saw how advances in technology and increasing regulation were converging to create a business opportunity for the right providers. Doug went on to found Advise Technologies in 2010, with Jeff joining the senior team in 2014.

Based in NYC, with offices in Amsterdam, Paris, and London, Advise’s intuitive, easy to use software platform allows clients investment managers and fund administrators) to manage regulatory reporting such as Form PF, AIFMD, CPO-PQR and Form ADV while maintaining complete transparency, accuracy and reliability required by global regulators and authorities.

After six years of strong growth, Advise determined that partnering with a financial sponsor would a logical next step in the company’s evolution. That’s when Advise’s management team approached M&A for assistance in finding a partner that would understand their business and their culture and join with them to help accelerate the company’s growth.

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Jeff FaberCOO and CFO

The senior level attention and focus on execution at M&A was key – M&A knew all the right people in our sector and managed the process exceptionally. The team worked tirelessly to ensure that all of our objectives were achieved.

CASE STUDIES:


New York, NY


advisor to Advise Technologies, LLC


New York, NY

MAY 2018

Marlin & Associates' client, M&O Systems, Inc. acquired by Broadridge Financial Solutions, Inc.

M&A knows the financial technology space, its strategic participants, the financial sponsors that target companies in this industry, and the drivers of their interest and value. With that knowledge, M&A organized a dedicated team to work closely with M&O’s management to develop materials that would seamlessly communicate M&O’s unique value proposition, growth potential, strategy,execution plan and financial projections. Among other things, M&A helped to communicate to potential partners the likely positive impact of the US Department Of Labor (DOL)’s new Fiduciary Rule on financial advisors (M&O’s core target market). M&A then worked with the company’s management to conduct a disciplined sale process – coordinating with each of the potential partners toensure that they fully understood the company’s strengths.

After a careful review of its options, M&O’s shareowners agreed to sell the company to Broadridge Financial Solutions, a leadingprovider of technology-driven solutions for broker-dealers, banks, mutual funds and other corporations. M&O solutions complementBroadridge’s wealth offerings; provide an enhanced career path for M&O’s employees; and offer expanded solutions for M&O’s customers.

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Marlin & Associates advised the company through all phases of the process from preparation through negotiations, due diligence reviews and the closing providing guidance on matters such as partner selection, valuation, structure and key terms. With a relationship spanning more than 10 years, initially, M&A provided only informal guidance. Once timing was optimal, Marlin & Associates worked diligently to help the company craft materials, initiate conversations, negotiate alternative offers with multiple parties, manage the due diligence process and complete final legal documentation swiftly. Marlin & Associates acted as exclusivestrategic and financial advisor to the shareholders and managers of M&O.

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Based in New York City, M&O Systems, Inc. (“M&O”) provides compensation management and compliance solutions that help broker-dealers and wealth management firms manage broker/advisor compensation, open accounts, support advisors and service clients.

M&A had an ongoing dialog with M&O’s CEO and co-founder Bob Minningham for many years. When he died, his widow, who inherited control of the business, approached M&A for strategic advice. After reviewing the situation, M&A guided M&O on steps to take to better position the company for a sale process. Over the next few years M&A maintained a dialog with the company’s shareowners and management as the company brought in new management and strengthened the firm. When the shareowners were ready, M&A then guided them through a disciplined process that resulted in expressions of potential interests from 8 parties. Ultimately Broadridge Financial Solutions, Inc. (NYSE:BR) was selected as the right partner for the firm, its employees, its customers and its shareowners.Ba

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Michael BrodeurPresident

Marlin's advice, consultation and leadership throughout the process directly drove the best outcome for our firm. Their deep industry knowledge and close relationships with prospective acquirers provides unparalleled value as well. They are a principally centered and tireless team of professionals.

CASE STUDIES:

New York City, NY

Lake Success, NY

Marlin & Associates acted as exclusive strategic and financial advisor to M&O Systems, Inc.


MAY 2018

New York | Washington, D.C. | Toronto

www.MarlinLLC.com

INVESTMENT BANKING AND STRATEGIC ADVISORY TO THE FINANCIAL TECHNOLOGY AND

INFORMATION SERVICES INDUSTRIES

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