DP Slides Vf6 Usc

Potential Acquisition of
Strategic Analysis and Valuation
Team Members: Carson Lam, Dekel Sherman, Max Teles

Faculty Advisor: Julia Plotts
February 27, 2014
Agenda
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
Executive Summary
Company Overview
Industry Overview
Economic Overview
Deliverable 1: SpringLogix Valuation
Deliverable 2: Transfer Pricing
Conclusion
Appendix
3
5
8
12
16
46
54
57
I. Executive Summary
Executive Summary
Attractive Acquisition Opportunity of SpringLogix
SpringLogixs equity is priced at an all-time low (40% drop in stock price)
Growth of high-margin software-as-a-service (SaaS) sector and opportunity for operational improvements for
SpringLogix
Private equity firm has attractive financing options due to low interest rates and increasing levels of leverage in
U.S. economy
Valuation of SpringLogix from Seller and Buyer Perspectives
Suggested enterprise valuation range of $1.5B - $2.0B based on discounted cash flow, public comparables,
precedent transactions, and leverage buyout analyses
Recommended bid for SpringLogix of $42.95 per share, representing a 69% premium over current
share price, implying an enterprise value of $1.6B
Transfer Pricing Implications on SpringLogix Valuation
Implementation of transfer pricing boosts SpringLogixs valuation
Lower corporate tax rate in Ireland leads to a higher European and overall NOPLAT
There is an increase in our valuation using a DCF of $316M with a transfer pricing rate of 3.0%
Source: Management Projections
II. Company Overview
SpringLogix Overview
Summary
Background:
Founded in 1993 by computer programming graduate students from the

Georgia Institute of Technology; headquartered in Atlanta, GA
Products:
Enterprise software and technology services; specialty in planning and

financial reporting software solutions through a license, maintenance, and
service sales model
Geography:
International operations with large presence in U.S. and Europe
U.S. vs. Europe Sales
Revenue Mix (in $mm, LTM)
SpringLogix Overview
Historical Financial Overview
Consolidated P&L
USD ($mm)
License
Maintenance
Service
Total Revenue
2009A
174
302
36
512
Total Expenses
EBITDA
Depreciation
EBIT
Capex
100.0%
2010A
192
333
41
566
100.0%
2011A
198
364
43
605
-352
-68.8%
-386
-68.2%
160
-5
155
31.3%
31.8%
30.3%
180
-5
175
0.8%
34.0%
59.0%
7.0%
-1.0%
100.0%
2012A
184
374
41
599
-411
-67.9%
32.1%
30.9%
194
-5
189
0.9%
33.9%
58.8%
7.2%
-0.9%
100.0%
2013A
174
379
39
592
100.0%
-418
-69.8%
-428
-72.3%
30.2%
29.4%
164
-5
159
27.7%
31.2%
181
-5
176
1.0%
1.2%
1.2%
32.7%
60.2%
7.1%
-0.8%
30.7%
62.4%
6.8%
-0.8%
29.4%
64.0%
6.6%
-0.8%
26.9%
SpringLogix has seen revenue declines in the preceding years due to its inability to compete
with SaaS and cloud service providers
Customer concentration, despite high margins, poses risk as industry moves away from
traditional licensing model
Market cap has decreased from $1.7B to $1.0B since 2012 due to poor performance
III. Industry Overview
Industry Overview
Enterprise Software Industry
Cloud Computing Industry
$342.6B market growing at a CAGR

of 6.3% from 2012 to 2017
$112B market growing at a CAGR of

17% from 2012 to 2017
Mature market characterized by a steady

state growth rate, few established
players, and industry consolidation
SaaS is a $15B market with an

annualized growth rate of 15-20%
SaaS is expected to account for 25% of

the overall software market in 5 years
Enterprise Software Revenue Forecast
Cloud Computing Revenue Forecast
Source: BCG, Gartner, S&P CapitalIQ
Industry Trends
Movement Towards SaaS Solutions
Growing popularity of the Internet across organizations of all sizes has enabled
movement away from proprietary software and towards non-traditional software
Enterprise customers are increasingly recognizing the benefits of adopting cloudcomputing models, including increased flexible subscription pricing, vendor accountability,
and lower deployment and support costs
Budget for Cloud as Percentage of Annual IT Spending
Key Market Trends
76% enterprises have a

formal cloud strategy
84% of net new software is
now SaaS
90% cloud decisions and
operations involve IT
10
Source: KPMG Global Cloud Industry Report 2012
Industry Takeaways
SaaS is a More Attractive Sector than License Software
SaaS commands an EBITDA margin of 35-40% while license software EBITDA margins
range between 25-30%
The higher margins in SaaS present value for a potential acquirer in a business like
SpringLogix, which traditionally had low margins but now has the opportunity to
increase them by entering the SaaS space
SaaS companies have much higher EV/Revenue exit multiples (~4.0x) than those of the
overall enterprise software market (~2.0x)
Median EV/Revenue Exit Multiples
11
Source: SoftwareEquity Industry Report
IV. Economic Overview
12
Economic Overview
Recent Leveraged Buyout Trends
LBO leverage has steadily been increasing since the financial crisis in 2008
Leverage levels peaked in 2007 at 8.4x Debt/EBITDA
During 2013, leverage bounced back to the highest levels seen in years, nearing 7.2x
Debt/EBITDA for the top 20% of levered transactions
Debt/EBITDA Multiple Overview
13
EV/EBITDA Multiple Breakdown
Source: S&P CapitalIQ , PitchBook
Economic Overview
Private Equity Activity in Software Industry
Broad shift in technology M&A away from hardware-focused transactions to cloudbased technologies has led to increased activity in software
Software represents the most active vertical in private equity deal volume and deal value
(35% and 36% respectively)
Cloud powered, software-defined businesses will be likely deal makers or targets in near-future
14
Source: PwC Technology M&A Report
Economic Conclusions
Acquisition Opportunity of SpringLogix
Due to increasing levels of leverage, private equity firms have more opportunity to
contribute lower levels of equity into companies across their funds
Debt is still issued at low prices relative to historical averages, meaning the cash flows of a
company are more likely to cover both interest and principal payments
Average premium of just over 30% for the past three years for leveraged buyout deals
Realize the ability to turn SpringLogixs performance around by implementing an

aggressive SaaS growth strategy and achieving cost-saving synergies
Depressed Stock
Price
Attractive
Investment
(SPLX)
Turnaround
Strategy via SaaS
Leverage
15
Source: Bloomberg News
V. Deliverable 1: SpringLogix Valuation
16
Valuation Summary
Valuation From Both Buyer and Seller Perspectives
To determine the most appropriate valuation of SPLX, we considered both the buy-side
and sell-side value perspectives
The buyers perspective was considered through a leveraged buyout methodology
The sellers perspective was considered through a precedent transactions, public
comparables, and discounted cash flow methodologies
Using our analyses, we determined an approximate valuation of $1.6B
LTM EBITDA
9.8x
Multiple
10.1x 14.1x
Leveraged Buyout
Precedent Transactions
6.0x 10.7x
Public Comparables
8.1x 11.8x
9.0x 12.2x
Discounted Cash Flow

$500
17
$1,000
$1,500
$2,000
$2,500
$3,000
Valuation Assumptions
Projected Income Statements - U.S.
United States P&L
USD ($mm)
License
Maintenance
Service
SaaS Subscription
SaaS Service
Total Revenue
YoY Growth
2014E
104
220
25
18
7
374
(18)
(247)
(265)
Net Pre-Tax Synergies

EBITDA
Depreciation
EBIT
109
(3)
106
Cannibalization of license sales

due to SaaS shift (5%-10% off
mgmt. projections)
18
58.8%
6.7%
4.9%
2.0%
100.0%
2015E
98
216
24
38
15
391
25.1%
55.2%
6.1%
9.7%
3.9%
100.0%
2016E
94
212
24
88
35
453
4.62%
SaaS-related Expenses
Base Expenses
Total Expenses
SaaS Acquisition
Base Capex
27.7%
28
3
-66.0%
29.0%
0
28.2%
7.5%
0.8%
(38)
(242)
(280)
18
129
(3)
126
28
3
-61.8%
4.6%
32.9%
-0.8%
32.2%
7.2%
0.8%
20.7%
46.8%
5.3%
19.5%
7.8%
100.0%
2017E
96
208
23
98
39
464
15.77%
(89)
(237)
(326)
18
145
(3)
142
28
4
-52.3%
4.0%
32.0%
-0.7%
31.3%
2018E
98
204
23
108
43
476
20.7%
44.8%
5.0%
21.1%
8.5%
100.0%
2.50%
(99)
(223)
(322)
18
160
(3)
157
-48.0%
3.9%
34.5%
-0.6%
33.9%
20.7%
42.9%
4.8%
22.6%
9.0%
100.0%
2019E
101
201
23
117
47
488
2.50%
(109)
(220)
(329)
18
165
(3)
162
-46.2%
3.8%
34.7%
-0.6%
34.1%
20.7%
41.2%
4.7%
23.9%
9.6%
100.0%
2.50%
(118)
(214)
(332)
18
174
(3)
171
-43.9%
3.7%
35.7%
-0.6%
35.1%
6.2%
0.9%
SaaS Subscription and Services as

% of Total Revenue increase 26%
over six years
0.6%
0.6%
0.6%
Revenue weights six years out

reflect changing product strategy
Projected Income Statements - U.S. (contd)
United States P&L
USD ($mm)
License
Maintenance
Service
SaaS Subscription
SaaS Service
Total Revenue
YoY Growth
2014E
104
220
25
18
7
374
58.8%
6.7%
4.9%
2.0%
100.0%
2015E
98
216
24
38
15
391
25.1%
55.2%
6.1%
9.7%
3.9%
100.0%
2016E
94
212
24
88
35
453
4.62%
Base Expenses
Total Expenses
(18)
(247)
(265)

EBITDA
Depreciation
EBIT
109
(3)
106
SaaS Acquisition
Base Capex
27.7%
28
3
-66.0%
29.0%
0
28.2%
7.5%
0.8%
(38)
(242)
(280)
18
129
(3)
126
28
3
-61.8%
4.6%
32.9%
-0.8%
32.2%
7.2%
0.8%
20.7%
46.8%
5.3%
19.5%
7.8%
100.0%
15.77%
(89)
(237)
(326)
18
145
(3)
142
28
4
-52.3%
4.0%
32.0%
-0.7%
31.3%
2018E
98
204
23
108
43
476
20.7%
44.8%
5.0%
21.1%
8.5%
100.0%
2.50%
(99)
(223)
(322)
18
160
(3)
157
-48.0%
3.9%
34.5%
-0.6%
33.9%
20.7%
42.9%
4.8%
22.6%
9.0%
100.0%
2019E
101
201
23
117
47
488
2.50%
(109)
(220)
(329)
18
165
(3)
162
-46.2%
3.8%
34.7%
-0.6%
34.1%
20.7%
41.2%
4.7%
23.9%
9.6%
100.0%
2.50%
(118)
(214)
(332)
18
174
(3)
171
-43.9%
3.7%
35.7%
-0.6%
35.1%
6.2%
0.9%
SaaS-related revenues generate

35% EBITDA margins
19
2017E
96
208
23
98
39
464
0.6%
0.6%
0.6%
2.50% long term growth rate

realized in 2017E
Projected Income Statements - Europe
Europe P&L
USD ($mm)
License
Maintenance
Service
SaaS Subscription
SaaS Service
Total Revenue
YoY Growth
Base Expenses
Total Expenses
EBITDA
Depreciation
EBIT
SaaS Acquisition
Base Capex
Cannibalization of license
sales due to SaaS shift (5%10% off mgmt. projections)
20
2014E
55
149
13
12
5
234
23.5%
63.6%
5.6%
5.2%
2.1%
100.0%
2015E
52
144
12
25
10
243
21.3%
59.2%
4.9%
10.4%
4.2%
100.0%
2016E
49
139
12
59
24
282
3.94%
(12)
(165)
(177)
-70.5%
57
(2)
55
19
2
(26)
(159)
(185)
23.4%
12
71
(2)
69
0.9%
19
2
24.3%
0
-65.3%
(59)
(153)
(212)
28.2%
0.8%
19
2
-0.8%
49.3%
4.3%
20.9%
8.3%
100.0%
2017E
50
134
11
66
27
288
15.85%
12
82
(2)
80
4.9%
29.1%
17.2%
-54.3%
(67)
(143)
(210)
28.2%
0.7%
-0.7%
SaaS Subscription and Services

as % of Total Revenue increase
30% over six years
46.6%
3.8%
23.1%
9.2%
100.0%
2018E
51
129
11
73
29
293
2.00%
12
89
(2)
87
4.3%
28.9%
17.2%
-49.7%
(74)
(139)
(213)
30.4%
0.7%
-0.7%
44.0%
3.8%
25.0%
10.0%
100.0%
2019E
52
125
11
80
32
299
2.00%
12
92
(2)
90
4.2%
31.1%
17.2%
-47.4%
(80)
(134)
(214)
30.7%
0.7%
-0.7%
41.8%
3.7%
26.6%
10.7%
100.0%
2.00%
12
97
(2)
95
4.1%
31.4%
17.2%
-44.8%
4.0%
32.3%
-0.7%
31.6%
0.7%
Revenue weights six years out

reflect changing product
strategy
Projected Income Statements - Europe (contd)
Europe P&L
USD ($mm)
License
Maintenance
Service
SaaS Subscription
SaaS Service
Total Revenue
YoY Growth
Base Expenses
Total Expenses
EBITDA
Depreciation
EBIT
SaaS Acquisition
Base Capex
2014E
55
149
13
12
5
234
23.5%
63.6%
5.6%
5.2%
2.1%
100.0%
2015E
52
144
12
25
10
243
21.3%
59.2%
4.9%
10.4%
4.2%
100.0%
2016E
49
139
12
59
24
282
3.94%
(12)
(165)
(177)
-70.5%
57
(2)
55
19
2
(26)
(159)
(185)
23.4%
12
71
(2)
69
0.9%
19
2
24.3%
0
-65.3%
(59)
(153)
(212)
28.2%
0.8%
19
2
-0.8%
49.3%
4.3%
20.9%
8.3%
100.0%
-54.3%
(67)
(143)
(210)
28.2%
0.7%
-0.7%
17.2%
46.6%
3.8%
23.1%
9.2%
100.0%
2018E
51
129
11
73
29
293
2.00%
12
89
(2)
87
4.3%
28.9%
SaaS-related revenues generate

35% EBITDA margins
21
2017E
50
134
11
66
27
288
15.85%
12
82
(2)
80
4.9%
29.1%
17.2%
-49.7%
(74)
(139)
(213)
30.4%
0.7%
-0.7%
44.0%
3.8%
25.0%
10.0%
100.0%
2019E
52
125
11
80
32
299
2.00%
12
92
(2)
90
4.2%
31.1%
17.2%
-47.4%
(80)
(134)
(214)
30.7%
0.7%
-0.7%
41.8%
3.7%
26.6%
10.7%
100.0%
2.00%
12
97
(2)
95
4.1%
31.4%
17.2%
-44.8%
4.0%
32.3%
-0.7%
31.6%
0.7%
2.00% long term growth rate

realized in 2017E

Discounted Cash Flow Model
USD ($mm)
2014E
2015E
2016E
2017E
2018E
2019E
Total Revenue
608
635
735
752
769
787
Total Expenses
Total Synergies
EBITDA
(443)
166
(465)
30
200
(538)
30
227
(532)
30
250
(542)
30
257
(546)
30
271
Depreciation
EBIT
(5)
161
(5)
195
(5)
222
(5)
245
(5)
252
(5)
266
Adj. Taxes @ 40%

NOPLAT
(64)
96
(78)
117
(89)
133
(98)
147
(101)
151
(106)
160
Plus: Noncash Charges

Less: Increase in NWC
Less: Total Capex
Unlevered Free Cash Flow
5
3
(52)
52
5
6
(52)
76
5
20
(53)
105
5
0
(5)
147
5
3
(5)
154
5
2
(5)
162
1.091
48
1.191
64
1.300
81
1.419
104
1.548
100
1.690
96
Discount Factor
Discounted FCF
22
Terminal
Value
1421
Projected Net Working Capital
Net Working Capital Assumptions
FYE 2013
FYE 2014
FYE 2015
FYE 2016
FYE 2017
FYE 2018
FYE 2019
Days Sales Outstanding

Prepaid Expenses/Total Expenses
OCA/Sales
53.02
6.54%
4.90%
53.02
6.54%
4.90%
53.02
6.54%
4.90%
53.02
6.54%
4.90%
53.02
6.54%
4.90%
53.02
6.54%
4.90%
53.02
6.54%
4.90%
Days Payables Outstanding

Accrued Expenses/Total Expenses
Deferred Revenue/Sales
OCL/Total Expenses
11.94
12.15%
27.20%
8.18%
11.94
12.15%
27.20%
7.94%
11.94
12.15%
27.20%
7.94%
11.94
12.15%
27.20%
7.94%
11.94
12.15%
27.20%
7.94%
11.94
12.15%
27.20%
7.94%
11.94
12.15%
27.20%
7.94%
FY 2013 NWC ratios (DSO, DPO, etc.) held constant for projection period
23
Transition to SaaS business should have negligible impact on cash cycle, as the existing
revenue sources will still account for over 65% of Total Revenue in 2019
Year over year drivers of working capital items lead to decreases in NWC; represents a cash inflow
in the DCF
Projected Balance Sheet
Consolidated Balance Sheet
USD ($mm)
FYE 2013
92
86
28
29
235
FYE 2014
20
88
29
30
167
FYE 2015
20
92
30
31
174
FYE 2016
20
107
35
36
198
FYE 2017
20
109
35
37
201
FYE 2018
20
112
35
38
205
FYE 2019
20
114
36
39
209
Deferred Financing Fees

Net PP&E
Intangibles
Goodwill
Other Assets
Total LT Assets
51
46
19
1,598
62
1,776
46
46
66
1,598
62
1,817
41
46
112
1,598
62
1,859
36
47
159
1,598
62
1,902
31
47
159
1,598
62
1,896
26
47
159
1,598
62
1,891
20
47
159
1,598
62
1,886
Total Assets
2,011
1,985
2,033
2,100
2,097
2,096
2,095
Accounts Payable
Accrued Expenses
Deferred Revenue
Current Portion of LT Debt
Other Current Liabilities
Total Current Liabilities
14
52
161
35
262
14
54
165
35
269
15
57
173
37
281
18
65
200
43
326
17
65
205
42
329
18
66
209
43
336
18
66
214
43
342
Revolving Line of Credit

Term Loan A
Term Loan B
LT Debt + Current
Other LT Liabilities
427
427
427
34
379
384
423
34
379
342
418
34
351
299
414
34
282
256
410
34
225
192
406
34
159
128
401
34
1,577
1,489
1,455
1,424
1,311
1,193
1,064
434
496
578
675
787
903
1,030
2,011
-
1,985
-
2,033
-
2,100
-
2,097
-
2,096
-
2,095
-
Cash
Accounts Receivable
Prepaid Expenses
Other Current Assets
Total Current Assets
Total Liabilities
Equity
Total Liabilities & Equity
Ck
24
Cash balance remains at

minimum as debt is paid
down with free cash flow
PP&E and Intangibles
account for Capex/Depr.
and R&D purchases,
respectively
Debt paid down in LBO to

build equity

WACC Calculation
WACC Breakdown
Beta & Debt Breakdown
Ke
E/V
11.50%
71.45%
Kd
D/V
t
5.38%
28.55%
40.00%
WACC
9.14%
Ke Breakdown
Risk-Free Rate
Beta Levered
SPLX
0.85
39.95%
0.68
BBB
29%
Cost of Debt triangulated using debt comps
0.85
Long term credit rating of BBB (S&P), corresponds

with Baa (Moodys)
7.93%
Size Premium
1.73%
25
Beta Decomposition
Kd Decomposition
Beta Lev.
D/E
Beta Unlev S&P Rating
D/V
0.55
72.30%
0.38
BB
42%
0.76
4.20%
0.74
AAA
4%
1.14
93.90%
0.73
48%
0.57
64.70%
0.41
BBB
39%
0.91
89.50%
0.59
47%
1.41
82.10%
0.94
BBB+
45%
0.58
14.10%
0.53
BBB+
12%
0.97
20.60%
0.86
AAA
17%
1.17
41.00%
0.94
A+
29%
0.95
0.00%
0.95
0.51
28.00%
0.44
22%
3.04%
Market Risk Premium
Ke
Company
ACI Worldwide, Inc. (NasdaqGS:ACIW)
Automatic Data Processing, Inc. (NasdaqGS:ADP)
DST Systems Inc. (NYSE:DST)
Fidelity National Information Services, Inc. (NYSE:FIS)
Global Payments Inc. (NYSE:GPN)
Hewlett-Packard Company (NYSE:HPQ)
Intuit Inc. (NasdaqGS:INTU)
Microsoft Corporation (NasdaqGS:MSFT)
Oracle Corporation (NYSE:ORCL)
Paychex, Inc. (NasdaqGS:PAYX)
SAP AG (DB:SAP)
Baa corporate bonds yielded 5.38% at 12/31/13
11.50%
Source: Moodys Baa Y Charts

WACC Calculation
WACC Breakdown
Ke
E/V
11.50%
71.45%
Kd
D/V
t
5.38%
28.55%
40.00%
WACC
9.14%
Ke Breakdown
Company
SAP AG (DB:SAP)
SPLX
Beta Decomposition
Kd Decomposition
Beta Lev.
D/E
D/V
0.55
72.30%
0.38
BB
42%
0.76
4.20%
0.74
AAA
4%
1.14
93.90%
0.73
48%
0.57
64.70%
0.41
BBB
39%
0.91
89.50%
0.59
47%
1.41
82.10%
0.94
BBB+
45%
0.58
14.10%
0.53
BBB+
12%
0.97
20.60%
0.86
AAA
17%
1.17
41.00%
0.94
A+
29%
0.95
0.00%
0.95
0.51
28.00%
0.44
22%
0.85
39.95%
0.68
3.04%
Debt weight triangulated using debt comps
0.85
Long term Debt-to-Value of 28.55%
Market Risk Premium
7.93%
40% tax deductibility of interest payments
Size Premium
1.73%
Risk-Free Rate
Beta Levered
Ke
26
BBB
29%
11.50%
Source: Moodys Baa Y Charts

WACC Calculation
WACC Breakdown
Ke
E/V
11.50%
71.45%
Kd
D/V
t
5.38%
28.55%
40.00%
WACC
9.14%
Ke Breakdown
SPLX
Risk-Free Rate
3.04%
0.85
Market Risk Premium
7.93%
Size Premium
1.73%
Beta Levered
Ke
27
Company
SAP AG (DB:SAP)
Beta Decomposition
Kd Decomposition
Beta Lev.
D/E
D/V
0.55
72.30%
0.38
BB
42%
0.76
4.20%
0.74
AAA
4%
1.14
93.90%
0.73
48%
0.57
64.70%
0.41
BBB
39%
0.91
89.50%
0.59
47%
1.41
82.10%
0.94
BBB+
45%
0.58
14.10%
0.53
BBB+
12%
0.97
20.60%
0.86
AAA
17%
1.17
41.00%
0.94
A+
29%
0.95
0.00%
0.95
0.51
28.00%
0.44
22%
0.85
39.95%
0.68
BBB
29%
Beta is unlevered and relevered using comps to better

identify technology industry risks with respect to
benchmark indices
Average comparable asset beta is 0.68
Relevered to the target Debt-to-Equity, levered beta is 0.85
11.50%
Source: CapitalIQ

WACC Calculation
WACC Breakdown
Ke
E/V
11.50%
71.45%
Kd
D/V
t
5.38%
28.55%
40.00%
WACC
9.14%
Ke Breakdown
Risk-Free Rate
SPLX
Beta Levered
39.95%
0.68
BBB
29%
10-Year Treasury Yield at 12/31/13
0.85
Damodaran, historical average premium over T-Bill (19282013)
Size premium applied to account for extra risk of small

company. Size premium based on Ibbotson NYSE DecileSize Premium Data
1.73%
28
0.85
7.93%
Ke
Beta Decomposition
Kd Decomposition
Beta Lev.
D/E
D/V
0.55
72.30%
0.38
BB
42%
0.76
4.20%
0.74
AAA
4%
1.14
93.90%
0.73
48%
0.57
64.70%
0.41
BBB
39%
0.91
89.50%
0.59
47%
1.41
82.10%
0.94
BBB+
45%
0.58
14.10%
0.53
BBB+
12%
0.97
20.60%
0.86
AAA
17%
1.17
41.00%
0.94
A+
29%
0.95
0.00%
0.95
0.51
28.00%
0.44
22%
3.04%
Market Risk Premium

c
Size Premium
Company
SAP AG (DB:SAP)
11.50%
Source: Ibbotsons Research, CapitalIQ

USD ($mm)
2014E
2015E
2016E
2017E
2018E
2019E
Total Revenue
608
635
735
752
769
787
Total Expenses
Total Synergies
EBITDA
(443)
166
(465)
30
200
(538)
30
227
(532)
30
250
(542)
30
257
(546)
30
271
Depreciation
EBIT
(5)
161
(5)
195
(5)
222
(5)
245
(5)
252
(5)
266
Adj. Taxes @ 40%

NOPLAT
(64)
96
(78)
117
(89)
133
(98)
147
(101)
151
(106)
160

Less: Total Capex
5
3
(52)
52
5
6
(52)
76
5
20
(53)
105
5
0
(5)
147
5
3
(5)
154
5
2
(5)
162
1.091
48
1.191
64
1.300
81
1.419
104
1.548
100
1.690
96
Discount Factor
Discounted FCF
Base CapEx + CapEx related

to SaaS acquisitions
29
Terminal
Value
Terminal Value Breakdown

USD ($mm)
FCF (2019E)
WACC
Terminal Growth Rate
Implied Terminal Value
162
9.14%
2.25%
2401
Discounted Terminal Value
1420.8
Implied EBITDA Multiple

TV / EV
8.66x
74.28%
1421
Blend of 2.0% European

growth and 2.5% U.S. growth
into perpetuity

Discounted Cash Flow Sensitivity
Terminal Value / Enterprise Value
Enterprise Value
Terminal
Growth
Rate
1.75%
2.00%
2.25%
2.50%
2.75%
7.14%
2,299
2,392
2,494
2,607
2,733
8.14%
2,016
2,082
2,154
2,232
2,317
WACC
9.14%
1,810
1,859
1,913
1,970
2,031
10.14%
1,653
1,691
1,732
1,776
1,823
11.14%
1,529
1,560
1,593
1,627
1,664
Terminal
Growth
Rate
1.75%
2.00%
2.25%
2.50%
2.75%
7.14%
79%
79%
80%
81%
82%
8.14%
76%
76%
77%
78%
79%
WACC
9.14%
73%
74%
74%
75%
76%
10.14% 11.14%
70%
68%
71%
68%
72%
69%
72%
70%
73%
70%
Enterprise value sensitivity is based on our target WACC and terminal growth rates, with
corresponding changes of 1.0% and .25%
From our analysis, WACC has a larger impact on Enterprise Value than does the terminal
growth rate
A 2.25% terminal growth rate implies an exit multiple of 8.7x 2019E EBITDA
As a result, our DCF implies a valuation range of $1.5B to $2.7B
30
Public Comparables
Selection Criteria for Comparable Companies
Industry sector
Financial profile
Business model
Geography
Customers
Peer group consists of two major market segments in the software industry: applications
software and systems software
Applications software comprises programs that perform specific functions
Systems software comprises operating systems and data center management
SpringLogix is comparable to application software companies because it specializes in
planning, budgeting, and financial reporting software solutions
Management states that SpringLogixs primary competition comes from large software
providers that offer similar products, which fall in line with systems software companies
To determine the most comparable metrics, we used different weights for each market
segment: 30% for Applications Software and 70% for Systems Software
31
Source: S&P CapitalIQ Software Industry Report
Public Comparables
Public Comparables Analysis
Financial Metric
any
me
Price
Market
Value of
Equity
Shares
Company
Outstanding
Name
Financial Metric
Market
Enterprise
Shares LTM
Enterprise NTM
LTM
Price
Value of
NTM
Value
Outstanding
Sales Equity EBITDAValue SalesSales
NTM
NTM
EBITDA
EBITDA
EV as a multiple of
EV as a multiple of
LTM
NTM
Sales
Sales
LTM
NTM
EBITDA
EBITDA
NTM
Sales
3.7x
2.8x
3.3x
3.1x
2.1x
1.6x
3.0x
3.2x
2.0x
2.2x
4.4x
4.8x
5.9x
6.2x
15.0x
9.3x
15.9x
15.1x
8.8x
10.2x
9.9x
12.4x
9.5x
10.3x
11.2x
14.1x
13.4x
14.3x
2.8x
3.1x
2.1x
3.0x
2.0x
4.4x
5.9x
0.6x
0.6x
3.0x
2.8x
4.1x
3.9x
4.1x
3.9x
5.0x
4.8x
7.7x
7.7x
9.5x
7.9x
12.6x
10.6x
0.6x
2.8x
3.9x
3.9x
Averaged Weighted Multiples

4.7x
13.6x
3.1x
10.0x
3.5x
10.3x
0.9x
6.6x
4.5x
3.0x
3.2x
1.0x
USD ($mm)
Applications Software
GS:ACIW)
60.88
38.5 $
2,346.7
ACI Worldwide,$Inc.
(NasdaqGS:ACIW)
nc. (NasdaqGS:ADP)
76.97
481.4
37,055.3
Automatic Data$Processing,
Inc. (NasdaqGS:ADP)
DST Systems Inc.
$ (NYSE:DST)
88.76
42.2
3,743.0
National
Services,
n Services, Inc. Fidelity
(NYSE:FIS)
$ Information
50.84
291.1Inc. (NYSE:FIS)
14,801.2
Global Payments
(NYSE:GPN) 71.9
GPN)
$ Inc.
66.91
4,812.2
$ 73.24
284.9
20,866.3
YX)
$ 42.08
364.2
15,326.0
NYSE:HPQ)
aqGS:MSFT)
RCL)
Systems Software
$ 28.49
1,908.8
$ 36.81
8,300.7
$
37.11
Oracle Corporation (NYSE:ORCL)4,497.4
$ 77.57
1,193.5
SAP AG (DB:SAP)
25.3
SPRINGLOGIX CORPORATION
Category
Systems Software
40.0
Weights
30%
70%
Market segment weights to

determine most comparable
multiples
32
54,381.1
305,508.1
166,898.8
92,581.3
$ $60.882,944.5
38,300.1
$ 76.97
$ 88.764,196.1
$ 50.84
18,971.9
$ 66.915,301.4
$ 73.24
20,249.3
$ 42.08
14,862.6
$
$
$
$
1013.6
65,299.1
$
$
196.0
$ 1,054.3
$
38.5 805.9
$
2,346.7
$
2,944.5
$ 1,054.3
11,512.2
481.4
37,055.3 2,411.7
38,300.112,306.3
12,306.3
42.22,649.93,743.0 409.54,196.1 1,983.1
1,983.1
291.15,992.3
14,801.2 1,529.1
18,971.9 6,282.0
6,282.0
71.92,460.94,812.2 516.85,301.4 2,632.7
2,632.7
284.94,231.0
20,866.3 1,437.0
20,249.3 4,557.3
4,557.3
364.22,397.0
15,326.0 1,040.8
14,862.6 2,538.4
2,538.4
$ 112,298.0
$ 13,029.0
$ 109,155.5
$ 316.8
316.8
2,543.1
2,543.1
474.5
474.5
1,922.9
1,922.9
556.1
556.1
1,812.0
1,812.0
1,110.9
1,110.9
$ 13,469.5
28.49
1,908.8 $ 54,381.1 $ 65,299.1 $ 109,155.5 $ 13,469.5
246,211.1
83,433.0
31,828.0
88,596.7
31,850.5
36.81
8,300.7
305,508.1
246,211.1
88,596.7
31,850.5
154,568.8
37,552.0
16,289.0
39,311.3
37.11
4,497.4
166,898.8
154,568.8
39,311.3 19,508.2
19,508.2
94,655.91,193.5
23,013.3
77.57
92,581.3 7,529.3
94,655.924,502.9
24,502.9 8,911.8
8,911.8
25.3
40.0 592.01013.6
164.0
605.1605.1
High
Average
Median
Low
162.5
162.5
Based valuation primarily on NTM

EBITDA multiples because we expect
Comparables need to be
Implied EV using "High" multiples
significant changes to2806.9
be made 2224.6
in the
normalized to
adjust
for "Average" multiples
Implied
EV using
1849.5
1646.9
EV using "Median" multiples
1682.0
next twelve months 2054.5
for SpringLogix
multipleImplied
outliers
Implied EV using "Low" multiples
522.2
1079.5
Source: CapitalIQ
2728.3
1788.7
1954.9
618.9
Public Comparables
Most Comparable Companies
Financial Metric
Company
Name
Price
Market
Value of
Equity
Shares
Outstanding
Enterprise
Value
NTM
Sales
NTM
EBITDA
EV as a multiple of
NTM
Sales
NTM
EBITDA
316.8
2,543.1
474.5
1,922.9
556.1
1,812.0
1,110.9
2.8x
3.1x
2.1x
3.0x
2.0x
4.4x
5.9x
9.3x
15.1x
8.8x
9.9x
9.5x
11.2x
13.4x
$ 13,469.5
31,850.5
19,508.2
8,911.8
0.6x
2.8x
3.9x
3.9x
4.8x
7.7x
7.9x
10.6x
USD ($mm)
$
$
$
$
$
$
$
60.88
76.97
88.76
50.84
66.91
73.24
42.08
38.5
481.4
42.2
291.1
71.9
284.9
364.2
2,346.7
37,055.3
3,743.0
14,801.2
4,812.2
20,866.3
15,326.0
2,944.5
38,300.1
4,196.1
18,971.9
5,301.4
20,249.3
14,862.6
Systems Software
SAP AG (DB:SAP)
$
$
$
$
28.49
36.81
37.11
77.57
1,908.8
8,300.7
4,497.4
1,193.5
54,381.1
305,508.1
166,898.8
92,581.3
65,299.1
246,211.1
154,568.8
94,655.9
Company
25.3
40.0
1013.6
1,054.3
12,306.3
1,983.1
6,282.0
2,632.7
4,557.3
2,538.4
$ 109,155.5
88,596.7
39,311.3
24,502.9
605.1
162.5
Reasons for Comparability

Started off with traditional licensing model for financial planning and
budgeting software. Recently began to develop software on SaaS
Primarily known for financial management software; also licenses
database, cloud application, and business process applications
33
Source: CapitalIQ
Public Comparables
Market Valuation of SpringLogix
Financial Metric
Company
Name
Price
Market
Value of
Equity
Shares
Outstanding
Enterprise
Value
NTM
Sales
NTM
EBITDA
EV as a multiple of
NTM
Sales
NTM
EBITDA
316.8
2,543.1
474.5
1,922.9
556.1
1,812.0
1,110.9
2.8x
3.1x
2.1x
3.0x
2.0x
4.4x
5.9x
9.3x
15.1x
8.8x
9.9x
9.5x
11.2x
13.4x
$ 13,469.5
31,850.5
19,508.2
8,911.8
0.6x
2.8x
3.9x
3.9x
4.8x
7.7x
7.9x
10.6x
USD ($mm)
$
$
$
$
$
$
$
60.88
76.97
88.76
50.84
66.91
73.24
42.08
38.5
481.4
42.2
291.1
71.9
284.9
364.2
2,346.7
37,055.3
3,743.0
14,801.2
4,812.2
20,866.3
15,326.0
2,944.5
38,300.1
4,196.1
18,971.9
5,301.4
20,249.3
14,862.6
Systems Software
SAP AG (DB:SAP)
$
$
$
$
28.49
36.81
37.11
77.57
1,908.8
8,300.7
4,497.4
1,193.5
54,381.1
305,508.1
166,898.8
92,581.3
65,299.1
246,211.1
154,568.8
94,655.9
Metric
NTM Sales
NTM EBITDA
SpringLogix
605.1
162.5
25.3
Multiple Range
1.0x - 4.1x
6.0x - 10.8x
Enterprise Value Range

$1.0B $1.8B
34
40.0
Implied EV
$618.9 - 2472.1
$982.9 - 1753.5
1013.6
1,054.3
12,306.3
1,983.1
6,282.0
2,632.7
4,557.3
2,538.4
$ 109,155.5
88,596.7
39,311.3
24,502.9
605.1
162.5
Normalized Averaged Weighted Multiples

High
4.1x
Average
2.8x
Median
3.2x
Low
1.0x
10.8x
8.4x
8.3x
6.0x

Implied EV using "Average" multiples
Implied EV using "Median" multiples
1753.5
1360.4
1355.4
982.9
2472.1
1705.4
1913.7
618.9
Source: CapitalIQ
Selection Criteria for Precedent Transactions
Industry sector
Financial profile
Transaction size
Market timing
Deal dynamics
Considered both financial and strategic buyers:

Financial buyers often purchased target companies through leveraged buyouts, which led
to high implied valuation multiples
Strategic buyers, while traditionally pay higher control premiums for acquisitions, had
lower implied valuation multiples
Acquisitions involve target companies in the application software sector
35
Source: S&P CapitalIQ Software Industry Report
Precedent Transactions Analysis
Acquirer
Target
Deal Player
Date
Vista Equity Partners

Golden Gate Capital
Apax Partners LLP
Polaris Capital
Archer Capital Pty Ltd., HarbourVest Partners, LLC
Golden Gate Capital
Advanced Computer Software plc
Unit 4 Agresso N.V.
Misys plc
CDC Software Corporation
Lawson Software, Inc.
Epicor Software Corporation
Works Applications Co., Ltd.
MYOB Holdings Pty Limited
Geac Computer Corporation Limited
COA Solutions Ltd.
CODA Ltd.
Financial
Financial
Financial
Financial
Financial
Financial
Financial
Strategic
Strategic
6/1/2012
4/11/2012
7/5/2011
5/13/2011
3/15/2011
1/12/2009
3/14/2006
2/11/2010
3/5/2008
Financial Metric
Percentage Enterprise
LTM
LTM
LTM
Acquired
Value
Sales
EBITDA
EBIT
100% $ 2,226.5 $
669.8 $
129.7 $
79.2
87%
250.5
218.9
21.8
1.5
100%
2081.5
755.2
132.5
76.7
100%
1041.9
453.3
54.4
20.3
100%
249.7
225.2
22.1
16.6
100%
393.0
186.3
71.9
28.2
100%
970.2
443.4
88.0
73.9
100%
165.8
99.2
20.4
100%
260.6
91.6
22.0
15.3
normalized to adjust for
multiple outliers
36
592.0
Based valuation mostly on

LTM EBITDA multiples due
to comparability across
transactions and proximity to
free cash flow
LTM
Sales
3.3x
1.1x
2.8x
2.3x
1.1x
2.1x
2.2x
1.7x
2.8x
EV as a multiple of
LTM
LTM
EBITDA
EBIT
17.2x
28.1x
11.5x
167.0x
15.7x
27.1x
19.2x
51.3x
11.3x
15.0x
5.5x
13.9x
11.0x
13.1x
8.1x
11.8x
17.0x
164.0
Did not use EBIT multiples

due to inconsistent values
across precedent transactions
Source: CapitalIQ
Most Comparable Transactions
Acquirer
Target
Deal Player
Date

Golden Gate Capital
Apax Partners LLP
Polaris Capital
Golden Gate Capital
Unit 4 Agresso N.V.
Misys plc
COA Solutions Ltd.
CODA Ltd.
Financial
Financial
Financial
Financial
Financial
Financial
Financial
Strategic
Strategic
6/1/2012
4/11/2012
7/5/2011
5/13/2011
3/15/2011
1/12/2009
3/14/2006
2/11/2010
3/5/2008
Acquirer
Financial Metric
LTM
LTM
LTM
Acquired
Value
Sales
EBITDA
EBIT
100% $ 2,226.5 $
669.8 $
129.7 $
79.2
87%
250.5
218.9
21.8
1.5
100%
2081.5
755.2
132.5
76.7
100%
1041.9
453.3
54.4
20.3
100%
249.7
225.2
22.1
16.6
100%
393.0
186.3
71.9
28.2
100%
970.2
443.4
88.0
73.9
100%
165.8
99.2
20.4
100%
260.6
91.6
22.0
15.3
592.0
Target
LTM
Sales
3.3x
1.1x
2.8x
2.3x
1.1x
2.1x
2.2x
1.7x
2.8x
EV as a multiple of
LTM
LTM
EBITDA
EBIT
17.2x
28.1x
11.5x
167.0x
15.7x
27.1x
19.2x
51.3x
11.3x
15.0x
5.5x
13.9x
11.0x
13.1x
8.1x
11.8x
17.0x
164.0
Reasons for Comparability

One of the most recent transactions (2012); target focuses
on ERP software
Most similar financial profile (about $400 million in sales and
$100 million in EBITDA)
37
Source: CapitalIQ
Market Valuation of SpringLogix
Acquirer
Target
Deal Player
Date

Golden Gate Capital
Apax Partners LLP
Polaris Capital
Golden Gate Capital
Unit 4 Agresso N.V.
Misys plc
COA Solutions Ltd.
CODA Ltd.
Financial
Financial
Financial
Financial
Financial
Financial
Financial
Strategic
Strategic
6/1/2012
4/11/2012
7/5/2011
5/13/2011
3/15/2011
1/12/2009
3/14/2006
2/11/2010
3/5/2008
Financial Metric
LTM
LTM
LTM
Acquired
Value
Sales
EBITDA
EBIT
100% $ 2,226.5 $
669.8 $
129.7 $
79.2
87%
250.5
218.9
21.8
1.5
100%
2081.5
755.2
132.5
76.7
100%
1041.9
453.3
54.4
20.3
100%
249.7
225.2
22.1
16.6
100%
393.0
186.3
71.9
28.2
100%
970.2
443.4
88.0
73.9
100%
165.8
99.2
20.4
100%
260.6
91.6
22.0
15.3
592.0
High
Average
Median
Low
Final Precedent Transactions:

3 financial buyer deals
2 strategic buyer deals
Metric
LTM Sales
LTM EBITDA
38
SpringLogix
592.0
164.0
Multiple Range
1,1x - 2.8x
8.1x - 11.8x
EV as a multiple of
LTM
LTM
EBITDA
EBIT
17.2x
28.1x
11.5x
167.0x
15.7x
27.1x
19.2x
51.3x
11.3x
15.0x
5.5x
13.9x
11.0x
13.1x
8.1x
11.8x
17.0x
164.0
Normalized Average Weighted Multiples

2.8x
11.8x
1.8x
10.8x
1.7x
11.3x
1.1x
8.1x

Implied EV
$656.4 - 1683.9
$1333.1 - 1942.3
LTM
Sales
3.3x
1.1x
2.8x
2.3x
1.1x
2.1x
2.2x
1.7x
2.8x
1683.9
1060.5
989.6
656.4
1,942.3
1,764.1
1,852.8
1,333.1

$1.3B $1.9B
Source: CapitalIQ
167.0x
53.0x
16.0x
13.1x
Sell-side Valuation Perspective

Comparing Income and Market Approaches
Discounted Cash Flow valuation relies on optimistic management projections with a volatile
capital structure in the next 5-7 years
SPLX will be experiencing significant changes in their business line to transition to SaaS and
adapt to current market conditions
Public Comparables valuation benchmarks SpringLogix within the software industry
Comparable companies based on industry, financial profile, business model, geography, and
customer allowed for comparable financial metrics
Weighing system between application software and systems software allows for most
comparable multiples
Precedent Transactions valuation considers both strategic and financial buyers from previous
M&A deals
39
Allows us to understand deal dynamics behind each M&A transaction

High multiples paid for financial sponsors acquisitions of software companies
Leveraged Buyout
Overview
Toggles
Purchase Price Scenario
Financing Scenario
4
3
LBO Financing Structure

USD ($mm)
50% D/P
1
Sources:
Term Loan A
Term Loan B
Cash on Hand
Sponsor Equity Contribution
$1,815
Uses:
Purchase SpringLogix Equity
Retire Existing Debt
Transaction Fees
Financing Fees
1690
54
35
36
Total Uses
Ck
Purchase Price Scenario
Current Share Price

25% Premium
50% Premium
67% Premium
40
60% D/P
2
302
302
302
80
827
Total Sources
$1,815
-
Price
$25.34
$31.68
$38.01
$42.24
67% Premium
70% D/P
Equity Value
$1,014
$1,267
$1,520
$1,690
70% D/P
3
364
427
427
427
80
469
c364
364
80
649
$1,822
Debt load split evenly

between three tranches
$1,830
1690
54
35
44
1690
54
35
51
$1,822
-
Enterprise Value
$896
$1,149
$1,402
$1,572
Ran 12 different
purchase price/leverage
scenarios
$1,830
-
1
2
3
4
$54mm in existing debt

is refinanced per typical
M&A transaction
Shares will be tendered
between current price
and 52 week high (prior
to 40% drop)
Leveraged Buyout
Debt Schedule
Consolidated Debt Schedule
USD ($mm)
2014E
Forward Treasury Yield
Cash Flow from Operations
Cash Flow from Investing Activities
Cash Available for Debt Service
Mandatory Payments
Cash from Balance Sheet
Cash Available for Optional Payments
Cash Min.
20
2015E
2016E
2017E
2018E
0.13%
0.38%
0.78%
1.20%
1.75%
2.10%
75
(52)
23
98
(52)
47
128
(53)
75
122
(5)
117
130
(5)
125
139
(5)
134
(47)
72
48
(47)
(0)
(47)
0
28
(47)
0
70
(68)
(0)
56
(68)
0
66
Transaction structure includes 3 tranches of senior debt (revolver, TLa, TLb)

Revolver for flexibility; TLa & TLb to reduce equity contribution
Senior debt, per typical covenants, priced at Base + Spread

Benchmarked to Treasury Yield
Yield found from 10-Year Treasury Yield Curve at 12/31/13
Expected to rise in todays era of record low interest rates
Cash minimum set to $20mm, providing a conservative cushion for unexpected expenses
Debt priced using online research, debt comps, and Mergers & Inquisitions guides
41
2019E
Leveraged Buyout
Credit Ratings
Credit Ratings
"Out of the Box"
Leverage Ratios:
Debt/EBITDA
Debt/(EBITDA-Capex)
Net Debt/EBITDA
Debt to Capital
Coverage Ratios:
Cash Coverage
Interest Coverage
(EBITDA-Capex)/Int.
(EBIT-Capex)/Int.
7.81x
8.16x
7.25x
74.7%
FYE 2014
FYE 2015
FYE 2016
FYE 2017
FYE 2018
FYE 2019
7.16x
10.42x
7.04x
70.5%
5.71x
7.70x
5.61x
66.3%
4.70x
6.12x
4.61x
61.2%
3.80x
3.87x
3.72x
54.6%
3.20x
3.26x
3.12x
47.7%
2.54x
2.59x
2.47x
40.1%
3.16x
2.96x
2.17x
1.98x
3.81x
3.62x
2.82x
2.63x
4.19x
4.00x
3.21x
3.03x
4.61x
4.42x
4.52x
4.33x
4.84x
4.65x
4.74x
4.55x
5.54x
5.34x
5.44x
5.23x
Ratings are useful for potential creditors to fund and price debt used in the LBO
Out of the Box leverage is relatively high, but strong free cash flow projections allow
SpringLogix to quickly pay down the debt load
Cash coverage ratios are strong due to the SaaS business improvements
42
Leveraged Buyout
Sponsor Returns Schedule
Sponsor Returns Schedule
USD ($mm)
FYE 2014
FYE 2015
FYE 2016
FYE 2017
FYE 2018
FYE 2019
166
1,572
200
1,896
227
2,152
250
2,372
257
2,446
271
2,573
20
1,186
20
1,139
20
1,064
20
948
20
823
20
689
406
777
1,108
1,444
1,643
1,905
Cash-on-Cash Return
0.87x
1.66x
2.36x
3.08x
3.50x
4.06x
Initial Equity Contribution

Aggregate Return:
(469)
406
-13%
(469)
777
29%
(469)
1,108
33%
(469)
1,444
32%
(469)
1,643
29%
(469)
1,905
26%
Yes
Yes
Yes
Yes
Purchase Multiple
9.58x
Exit Multiple
EBITDA
Implied Enterprise Value at Exit
9.50x
Plus: Cash
Less: Debt
Implied Equity Value at Exit
Internal Rate of Return
Investment Criteria
Investment Decision
C-o-C Hurdle IRR Hurdle

2.0x
25.0%
No
No
Conservative exit multiple of 9.50x given industry trends and our other valuation analyses
Supporting economics make SpringLogix an attractive investment for required Cash-on-Cash

and IRR returns
43
Leveraged Buyout
Sensitivity Analysis
Transaction Values for 25% Price Premium
Debt-to-Purchase Price
50%
60%
70%
30.00% 1,307.7 1,413.7 1,520.8
IRR
27.50% 1,374.4 1,476.2 1,578.9
HURDLE
25.00% 1,451.0 1,547.8 1,645.6
RATE
22.50% 1,539.1 1,630.2 1,722.3
20.00% 1,640.7 1,725.3 1,810.8

50%
60%
70%
30.00% 1,406.9 1,533.5 1,661.4
IRR
27.50% 1,469.6 1,591.1 1,713.9
HURDLE 25.00% 1,541.6 1,657.2 1,774.2
RATE
22.50% 1,624.4 1,733.2 1,843.4
20.00% 1,719.8 1,821.0 1,923.4

50%
60%
70%
30.00% 1,473.3 1,613.7 1,755.4
IRR
27.50% 1,533.3 1,668.1 1,804.2
HURDLE 25.00% 1,602.2 1,730.5 1,860.1
RATE
22.50% 1,681.4 1,802.3 1,924.5
20.00% 1,772.8 1,885.1 1,998.7
Sensitized purchase price to IRR Hurdle Rates & Leverage

With highest leverage and premium, implied LBO Valuation is $2.0B
With lowest leverage and premium, implied LBO Valuation is $1.3B
Risks to LBO include:

Securing financing at low rates given leverage levels
Unanticipated declines in the SaaS or traditional licensing sources of revenue
Declines in software company valuations in 5-7 years (exit multiple affected)
Inability to realize synergies in management projections
Given the inherent risks and upside, our analysis implies an enterprise value of $1.6B
44
Valuation Conclusion
Recommended Bid for SpringLogix
Buyer vs. Sellers Perspective
Strategic vs. Financial Buyer
Comps, Precedents, and DCF support what

SPLXs owners expect
LBO Valuation analyzes a financial sponsors
perspective
Given the conservative LBO assumptions and
similar valuation outputs, both parties should
agree with the $1.6B valuation
Opportunity to realize synergies as both a

financial or strategic buyer
However, a SaaS buyer would experience more
cannibalization from licensing
Financial buyer could best combine SaaS and
non-SaaS portfolio companies
Therefore, strategic buyers would not outbid
financial buyers for SPLX
Valuation
Methodology
Public Comparables
Leveraged Buyout
Enterprise Value
EBITDA Multiple
High
High
Low
Low
2,299 $
1,664
14.0x
10.1x
1,754 $
983
10.7x
6.0x
1,942 $
1,333
11.8x
8.1x
1,999 $
1,473
12.2x
9.0x
Our recommended valuation is $1.6B at 9.76x LTM EBITDA, an attractive price to

both SpringLogix and a potential financial buyer
45
VI. Deliverable 2: Transfer Pricing
46
Transfer Pricing
Overview
After Jacket Tech acquired SpringLogix in 2002, it branded all products under the European
SpringLogix trademark
Management has recently discovered an issue and seeks to determine the relevant transfer
pricing to the European operation for trademark rights
Analysis of comparable companies, based on industry, royalty base, and independent licensees,
has yielded a median royalty rate of 3.00% of revenues that we believe can be applied to
SpringLogix payments from the US to Europe
47
Transfer Pricing
Comparable Pricing Analysis
Finalized Comparables
Licensor
Licensee
Industry
Royalty Rate Base
BETHESDA SOFTWORKS LLC

BLIDEO, INC.
MEDIA INTERNATIONAL INC
METAMORPHIX INC
TRAZER TECHNOLOGIES, INC.
INTERPLAY ENTERTAINMENT CORP.

ESPRE SOLUTIONS INC
IPUBLISHING, INC.
VIDREV TECHNOLOGIES, INC.
CYBEX INTERNATIONAL, INC.
Computers: Software
Computers: Software
Computers: Cloud Computing
Computers: Services
Computers: Software
Revenue
Revenue
Revenue
Revenue
Revenue
SpringLogix Corp. (EU)
Jacket Tech (SpringLogix USA)
Computers: Software
Revenue
Royalty Rate
3.50%
1.00%
3.50%
2.70%
3.00%
3.00%
Given a list of potential comparable royalty rates, we determined five of the agreements to be
most comparable
When selecting comps, we decided to include only those with a revenue royalty base, those in a
similar industry to SpringLogix, and ensured that the Licensor and Licensee were independent
parties
Our estimated royalty rate for SpringLogix is the median of our finalized list of comparable
transactions
48
Transfer Pricing
Projected Income Statements - U.S.
United States P&L
USD ($mm)
License
Maintenance
Service
SaaS Subscription
SaaS Service
Total Revenue
YoY Growth
Royalty Expenses
Base Expenses
Total Expenses
EBITDA
Depreciation
EBIT
Taxes
NOPLAT
40%
SaaS Acquisition
Base Capex
49
2014E
104
220
25
18
7
374
27.7%
58.8%
6.7%
4.9%
2.0%
100.0%
2015E
98
216
24
38
15
391
25.1%
55.2%
6.1%
9.7%
3.9%
100.0%
2016E
94
212
24
88
35
453
4.62%
(11)
(18)
(247)
(277)
-66.0%
97
(3)
94
26.0%
-0.8%
25.2%
(37.78)
57
28
3
(12)
(38)
(242)
(292)
18
117
(3)
114
-61.8%
4.6%
29.9%
-0.8%
29.2%
(45.66)
68
7.5%
0.8%
28
3
20.7%
46.8%
5.3%
19.5%
7.8%
100.0%
0.8%
20.7%
44.8%
5.0%
21.1%
8.5%
100.0%
15.77%
(14)
(89)
(237)
(340)
18
131
(3)
128
-52.3%
4.0%
29.0%
-0.7%
28.3%
(51.36)
77
7.2%
2017E
96
208
23
98
39
464
28
4
2018E
98
204
23
108
43
476
2.50%
(14)
(99)
(223)
(336)
18
146
(3)
143
-48.0%
3.9%
31.5%
-0.6%
30.9%
(57.32)
86
20.7%
42.9%
4.8%
22.6%
9.0%
100.0%
2019E
101
201
23
117
47
488
2.50%
(14)
(109)
(220)
(343)
18
151
(3)
148
-46.2%
3.8%
31.7%
-0.6%
31.1%
(59.21)
89
20.7%
41.2%
4.7%
23.9%
9.6%
100.0%
2.50%
(15)
(118)
(214)
(346)
18
160
(3)
157
-43.9%
3.7%
32.7%
-0.6%
32.1%
(62.64)
94
6.2%
0.9%
Royalty expenses projected at 3.0% of total U.S. revenues

Domestic corporate tax rate assumed to be 40%
NOPLAT calculated independent of Europe to reflect unique tax rate
0.6%
0.6%
0.6%
Transfer Pricing
Projected Income Statements - Europe
Europe P&L
USD ($mm)
License
Maintenance
Service
SaaS Subscription
SaaS Service
Royalty Income
Total Revenue
YoY Growth
Base Expenses
Total Expenses
EBITDA
Depreciation
EBIT
Taxes
NOPLAT
12.50%
SaaS Acquisition
Base Capex
50
2014E
55
149
13
12
5
11
245
22.5%
60.7%
5.3%
5.0%
2.0%
4.6%
100.0%
2015E
52
144
12
25
10
12
255
20.3%
56.5%
4.7%
10.0%
4.0%
4.6%
100.0%
2016E
49
139
12
59
24
14
296
3.97%
(12)
(165)
(177)
-67.2%
68
(2)
66
27.7%
-0.8%
26.9%
(8.26)
58
19
2
(26)
(159)
(185)
12
82
(2)
80
-62.3%
4.7%
32.3%
-0.8%
31.5%
(10.06)
70
0.9%
19
2
16.4%
47.0%
4.1%
19.9%
8.0%
4.6%
100.0%
15.85%
(59)
(153)
(212)
12
95
(2)
93
-51.8%
4.1%
32.2%
-0.7%
31.5%
(11.64)
81
0.8%
2017E
50
134
11
66
27
14
301
19
2
16.4%
44.4%
3.6%
22.0%
8.8%
4.6%
100.0%
2.02%
(67)
(143)
(210)
12
103
(2)
101
16.4%
41.9%
3.6%
23.9%
9.5%
4.6%
100.0%
2019E
52
125
11
80
32
15
314
2.02%
(74)
(139)
(213)
-47.4%
12
106
(2)
104
4.0%
34.3%
-0.7%
33.6%
(12.68)
89
0.7%
2018E
51
129
11
73
29
14
308
-45.2%
3.9%
34.6%
-0.7%
34.0%
(13.06)
91
0.7%
16.4%
39.8%
3.5%
25.4%
10.2%
4.7%
100.0%
2.02%
(80)
(134)
(214)
12
111
(2)
109
-42.7%
3.8%
35.5%
-0.6%
34.8%
(13.66)
96
0.7%
Royalty income based on 3.0% of total U.S. revenues

Assumed Irish corporate tax rate of 12.5%
NOPLAT calculated independently of US in order to reflect unique tax rate
Source: Irish Taxes & Customs Information, revenue.ie
0.7%
Transfer Pricing
DCF Valuation with Royalties
USD ($mm)
2014E
51
2016E
2017E
2018E
2019E
Total Revenue
619
646
749
766
784
802
Total Expenses
Total Synergies
EBITDA
(454)
166
(477)
30
200
(552)
30
227
(546)
30
250
(556)
30
257
(561)
30
271
Depreciation
EBIT
(5)
161
(5)
195
(5)
222
(5)
245
(5)
252
(5)
266
Consolidated NOPLAT
114
139
159
175
180
190

Less: Total Capex
5
3
(52)
71
5
6
(52)
98
5
20
(53)
131
5
0
(5)
175
5
3
(5)
183
5
2
(5)
192
1.093
65
1.195
82
1.306
100
1.427
123
1.560
117
1.705
112
Discount Factor
Discounted FCF
2015E
Terminal
Value
1629
Adjusted DCF calculates combines NOPLAT of US & Europe

Similar WACC assumptions, though the tax rate lowered to reflect 60/40 split of US/European
rates going forward (t = 29.0%)
Increases WACC, since the tax shield on debt decreased
Terminal value assumptions are the same as the original DCF, with the new WACC incorporated
Transfer Pricing Impact on Valuation

SpringLogix DCF Valuation with Royalties
Impact of Transfer Pricing on Valuation
Stand-Alone WACC
New WACC
9.14%
9.30%
Stand-Alone Enterprise Value

New Enterprise Value
Increase in Enterprise Value
1913
2,229
316
After layering in royalties, our target valuation increased by $316mm to $2.2B from
$1.9B
The marginal increase in WACC was not enough to offset the increase in NOPLAT
due to the lower corporate tax rate in Ireland, leading to an increase in our overall
valuation
WACC
52
7.29%
8.29%
9.29%
10.29%
11.29%
0.85%
3,143
2,591
2,198
1,902
1,673
Royalty Rate
1.85%
2.85%
3,166
3,190
2,611
2,631
2,214
2,231
1,917
1,932
1,686
1,699
3.85%
3,213
2,650
2,248
1,946
1,712
4.85%
3,237
2,670
2,265
1,961
1,725
The sensitivity analysis reveals that

incremental changes in royalty rates have
minimal impact on the valuation, while
WACC creates a much larger variation
Transfer Pricing Considerations

Strategic Alternatives
SpringLogix Corp must consider both the benefits and risks of implementing a high and low
royalty rate
Benefits of a High Royalty Rate
Risks of a High Royalty Rate
Higher royalty rate sends more revenue

to Europe, which has a lower effective
tax rate
May not be deemed arms length and

therefore become invalidated by tax
authorities
Intrinsic valuation of firm increases

mainly due to saved taxes
Government authority to adjust pricing

and possibly impose penalties
Company creates precedent for higher

royalty charge in the future
Double taxation may occur if one

country does not accept taxes imposed
by the other
53
VII. Conclusion
54
Recommendations
Key Questions
Analysis
How attractive is SpringLogix as a potential acquisition target?

What is a fair price to pay for SpringLogix?
How will transfer pricing impact the valuation of SpringLogix?
Internal & External
Analysis
Companys equity is
priced at an all-time low
Industry changes in
enterprise software led
by SaaS growth
High leverage levels and
low interest rates create
attractive financing
options
Recommendation
SpringLogix
Valuation
Transfer Pricing
Analysis
Valuation from both

buyer and seller
perspectives
Lower corporate tax

rates in Ireland will lead
to higher valuation
Considered both
strategic & financial
buyers as potential
bidders
Implementation of
transfer pricing boosts
SpringLogix valuation
Acquire SpringLogix for $42.95 per share and implement turnaround plan with
management changes and SaaS growth strategy
Transfer pricing will increase valuation by $316M
55
Potential Acquisition of
Strategic Analysis and Valuation
Team Members: Carson Lam, Dekel Sherman, Max Teles

Faculty Advisor: Julia Plotts
February 27, 2014
VIII. Appendix
57
Appendix
Presentation Slides:
Executive Summary
Company Overview
Industry Overview
Economic Overview
Deliverable 1: SpringLogix Valuation
Valuation Summary
Valuation Assumptions U.S.
Valuation Assumptions Europe
Valuation Assumptions NWC
Valuation Assumptions B/S
Discounted Cash Flow WACC
Public Comparables
Precedent Transactions Analysis
Sell-side Valuation Overview
Leveraged Buyout
Leveraged Buyout Debt Schedule
Leveraged Buyout Returns Schedule
Buy-side vs. Sell-side
58
Deliverable 2: Transfer Pricing

Appendix:
Transfer Pricing Overview
General
Comparable Pricing Analysis
SaaS vs. Traditional Licensing
Transfer Pricing Assumptions U.S.
Turnaround Strategy
Transfer Pricing Assumptions Europe
Transfer Pricing Impact on DCF
Income Valuation
Transfer Pricing Impact Considerations
Projected Cash Flows Statement
Conclusion
Recommendation Overview
Market Valuation
Normalizing Public Comps
Normalizing Precedents
LBO Valuation
Term Loan A
Term Loan B
Deferred Financing Fee Schedule
Public Comparables
Normalizing Comparable Companies
Financial Metric
Company
Name
Price
Market
Value of
Equity
Shares
Outstanding
Enterprise
Value
NTM
Sales
NTM
EBITDA
EV as a multiple of
NTM
Sales
NTM
EBITDA
316.8
2,543.1
474.5
1,922.9
556.1
1,812.0
1,110.9
2.8x
3.1x
2.1x
3.0x
2.0x
4.4x
5.9x
9.3x
15.1x
8.8x
9.9x
9.5x
11.2x
13.4x
$ 13,469.5
31,850.5
19,508.2
8,911.8
0.6x
2.8x
3.9x
3.9x
4.8x
7.7x
7.9x
10.6x
USD ($mm)
$
$
$
$
$
$
$
60.88
76.97
88.76
50.84
66.91
73.24
42.08
38.5
481.4
42.2
291.1
71.9
284.9
364.2
2,346.7
37,055.3
3,743.0
14,801.2
4,812.2
20,866.3
15,326.0
2,944.5
38,300.1
4,196.1
18,971.9
5,301.4
20,249.3
14,862.6
Systems Software
SAP AG (DB:SAP)
$
$
$
$
28.49
36.81
37.11
77.57
1,908.8
8,300.7
4,497.4
1,193.5
54,381.1
305,508.1
166,898.8
92,581.3
65,299.1
246,211.1
154,568.8
94,655.9
Company
59
25.3
40.0
1013.6
1,054.3
12,306.3
1,983.1
6,282.0
2,632.7
4,557.3
2,538.4
$ 109,155.5
88,596.7
39,311.3
24,502.9
605.1
162.5
Strategic Reasons
Financial Reasons
Business outsourcing solutions for human

resources and administration functions
Low EBITDA margin (21%)
Business process outsourcing for payroll and

tax services
Highest EBITDA margin (44%)

Source: CapitalIQ
Normalizing Comparable Transactions
Acquirer
Target
Deal Player
Date

Golden Gate Capital
Apax Partners LLP
Polaris Capital
Golden Gate Capital
Unit 4 Agresso N.V.
Misys plc
COA Solutions Ltd.
CODA Ltd.
Financial
Financial
Financial
Financial
Financial
Financial
Financial
Strategic
Strategic
6/1/2012
4/11/2012
7/5/2011
5/13/2011
3/15/2011
1/12/2009
3/14/2006
2/11/2010
3/5/2008
Financial Metric
LTM
LTM
LTM
Acquired
Value
Sales
EBITDA
EBIT
100% $ 2,226.5 $
669.8 $
129.7 $
79.2
87%
250.5
218.9
21.8
1.5
100%
2081.5
755.2
132.5
76.7
100%
1041.9
453.3
54.4
20.3
100%
249.7
225.2
22.1
16.6
100%
393.0
186.3
71.9
28.2
100%
970.2
443.4
88.0
73.9
100%
165.8
99.2
20.4
100%
260.6
91.6
22.0
15.3
Acquirer
60
592.0
Target
LTM
Sales
3.3x
1.1x
2.8x
2.3x
1.1x
2.1x
2.2x
1.7x
2.8x
EV as a multiple of
LTM
LTM
EBITDA
EBIT
17.2x
28.1x
11.5x
167.0x
15.7x
27.1x
19.2x
51.3x
11.3x
15.0x
5.5x
13.9x
11.0x
13.1x
8.1x
11.8x
17.0x
164.0
Strategic Reason
Financial Reasons
Target offers broad range of enterprise

software; does not specialize in finance
Low sales and EBITDA
Target offers broad range of enterprise

software; does not specialize in finance
Low EBITDA
Target served mostly banks with

wholesale and retail banking
Low EBITDA Margin (19%)
Target focused in accounting software
High EBITDA Margin (39%)
Source: CapitalIQ
Appendix: Projected Cash Flow Statements

Projected Cash Flows Statement
Consolidated Cash Flows
USD ($mm)
2014E
61
2015E
2016E
2017E
2018E
2019E
Operating Activities:
Net Income
Depreciation
Amortization of Deferred Financing Fees
62
5
5
82
5
5
97
5
5
111
5
5
116
5
5
127
5
5
(Increase)/Decrease in Receivables
(Increase)/Decrease in Prepaids
(Increase)/Decrease in OCA
Increase/(Decrease) in Payables
Increase/(Decrease) in Accruals
Increase/(Decrease) in Deferred Rev.
Increase/(Decrease) in OCL
(2)
(1)
(1)
0
2
4
0
(4)
(1)
(1)
1
3
7
2
(15)
(5)
(5)
2
9
27
6
(2)
0
(1)
(0)
(1)
5
(0)
(3)
(1)
(1)
0
1
5
1
(3)
(0)
(1)
0
1
5
0
Cash Flow from Operating Activities
75
98
128
122
130
139
Investing Activities:
Base Capital Expenditures
R&D Investments
Capital Asset Divestments
(5)
(47)
-
(5)
(47)
-
(6)
(47)
-
Cash Flow from Investing Activities
(52)
(52)
(53)
(5)
(5)
(5)
Financing Activities:
Principal Pay-down
Debt Issued
Equity Issued
Dividends
(95)
-
(47)
-
(75)
-
(117)
-
(125)
-
(134)
-
Cash Flow from Financing Activities
(95)
(47)
(75)
(117)
(125)
(134)
Net Change in Cash

Beginning Cash Balance
Ending Cash Balance
(72)
92
20
0
20
20
(0)
20
20
0
20
20
20
20
(5)
(5)
-
(5)
-
20
20
Appendix: Revolving Line Credit

Revolving Line Credit
Allowance
Size
Spread
Term
Commitment Fee on Unused
Mid-Year Interest? (Y/N)
500
427
3.00%
8
0.25%
Yes
Beginning Balance
Drawdown/(Repayment)
Ending Balance
Effective Interest Rate
Interest Expense
Commitment Expense
427
(48)
379
379
0
379
379
(28)
351
351
(70)
282
282
(56)
225
225
(66)
159
3.13%
13
0.30
3.38%
13
0.30
3.78%
14
0.37
4.20%
13
0.55
4.75%
12
0.69
5.10%
10
0.85
Revolver allows the sponsor to both:

A) Minimize equity contribution
B) Provide flexible financing that can be drawn or paid down easily
Priced at T + 300 bps, with 25 bps commitment fee for unfunded portion
Average interest rate engaged
62
Appendix: Term Loan A

Term Loan A
Term Loan A
Size
Spread
Term
427
4.50%
8
Yes
Amortization Schedule
10%
10%
10%
10%
15%
15%
Beginning Balance
Mandatory Amortization
Optional Sweep
Ending Balance
427
(43)
384
384
(43)
342
342
(43)
299
299
(43)
256
256
(64)
192
192
(64)
128
4.63%
19
4.88%
18
5.28%
17
5.70%
16
6.25%
14
6.60%
11

Interest Expense
Roughly even amortization schedule (typical of TLa), with loan life of 8 calendar years
Priced at T + 450 bps
63
Appendix: Term Loan B

Term Loan B
Term Loan B
Size
Spread
Term
427
4.75%
10
Yes
Amortization Schedule
Beginning Balance
Mandatory Amortization
Optional Sweep
Ending Balance
Interest Expense
1%
1%
1%
1%
1%
1%
427
(4)
423
423
(4)
418
418
(4)
414
414
(4)
410
410
(4)
406
406
(4)
401
4.88%
21
5.13%
22
5.53%
23
5.95%
25
6.50%
27
6.85%
28
Nominal amortization schedule (typical of TLb), with loan life of 10 calendar years
Priced at T + 475 bps
64
Appendix: Deferred Financing Fee Schedule

USD ($mm)
Deferred Financing Amortization
Beginning Capitalized Fees
Amortization
Ending Capitalized Fee Balance
FYE 2014
FYE 2015
FYE 2016
FYE 2017
FYE 2018
FYE 2019
51
5
46
46
5
41
41
5
36
36
5
31
31
5
26
26
5
20
10.00%
Financing fees (4% of debt issued in transaction) capitalized on the balance sheet
Amortized and recognized as non-cash interest expense at a rate of (1/L); where L = Life of
longest loan term financed
65
Appendix: SaaS vs. Traditional Licensing

SaaS vs. Traditional Software Licensing Model
Advantages of SaaS
Lower initial costs

Painless upgrades
Flexible configuration
Faster to deploy
Backups, data recovery, and security provided
Advantages of Traditional Model
Disadvantages of SaaS
66
Third parties are handling confidential data

Lack of full control over data and processes
Subscription service could be expensive over
time and as business grows
Customization and integration with custom
systems could be an issue
Control over all systems/data

Corporate data is stored and handled internally
Dedicated IT staff for maintenance and support
Disadvantages of Traditional Model
Lack of resources to build an infrastructure

Licensing costs too expensive for SMBs
Lack of technical know-how to maximize
benefits for a start-up
Source: GFI Software White Paper
Public Comparables
Financial Metric
Company
Name
Price
Market
Value of
Equity
Shares
Outstanding
Enterprise
Value
LTM
Sales
LTM
EBITDA
EV as a multiple of
NTM
Sales
NTM
EBITDA
LTM
Sales
LTM
EBITDA
NTM
Sales
NTM
EBITDA
316.8
2,543.1
474.5
1,922.9
556.1
1,812.0
1,110.9
3.7x
3.3x
1.6x
3.2x
2.2x
4.8x
6.2x
15.0x
15.9x
10.2x
12.4x
10.3x
14.1x
14.3x
2.8x
3.1x
2.1x
3.0x
2.0x
4.4x
5.9x
9.3x
15.1x
8.8x
9.9x
9.5x
11.2x
13.4x
$ 13,469.5
31,850.5
19,508.2
8,911.8
0.6x
3.0x
4.1x
4.1x
5.0x
7.7x
9.5x
12.6x
0.6x
2.8x
3.9x
3.9x
4.8x
7.7x
7.9x
10.6x

4.7x
13.6x
3.1x
10.0x
3.5x
10.3x
0.9x
6.6x
4.5x
3.0x
3.2x
1.0x
12.0x
8.8x
8.4x
6.0x
USD ($mm)
$
$
$
$
$
$
$
60.88
76.97
88.76
50.84
66.91
73.24
42.08
38.5
481.4
42.2
291.1
71.9
284.9
364.2
2,346.7
37,055.3
3,743.0
14,801.2
4,812.2
20,866.3
15,326.0
2,944.5
38,300.1
4,196.1
18,971.9
5,301.4
20,249.3
14,862.6
Systems Software
SAP AG (DB:SAP)
$
$
$
$
28.49
36.81
37.11
77.57
1,908.8
8,300.7
4,497.4
1,193.5
54,381.1
305,508.1
166,898.8
92,581.3
65,299.1
246,211.1
154,568.8
94,655.9
25.3
40.0
Category
Systems Software
Weights
30%
70%
Market segment weights to

determine best comparable
multiples
67
1013.6
805.9
11,512.2
2,649.9
5,992.3
2,460.9
4,231.0
2,397.0
$ 112,298.0
83,433.0
37,552.0
23,013.3
196.0
2,411.7
409.5
1,529.1
516.8
1,437.0
1,040.8
$ 13,029.0
31,828.0
16,289.0
7,529.3
592.0
164.0
1,054.3
12,306.3
1,983.1
6,282.0
2,632.7
4,557.3
2,538.4
$ 109,155.5
88,596.7
39,311.3
24,502.9
605.1
High
Average
Median
Low
normalized to adjust for
multiple outliers
162.5
2806.9
2224.6
2728.3
1943.0
Based valuation
primarily
on
1849.5
1646.9
1788.7
1422.8
1682.0
1954.9
1371.7
NTM2054.5
EBITDA
multiples
522.2
1079.5
618.9
982.9
because we expect significant
changes to be made in the next
twelve months for SpringLogix
Source: CapitalIQ
Public Comparables
Financial Metric
Company
Name
Price
Market
Value of
Equity
Shares
Outstanding
Enterprise
Value
LTM
Sales
LTM
EBITDA
EV as a multiple of
NTM
Sales
NTM
EBITDA
LTM
Sales
LTM
EBITDA
NTM
Sales
NTM
EBITDA
316.8
2,543.1
474.5
1,922.9
556.1
1,812.0
1,110.9
3.7x
3.3x
1.6x
3.2x
2.2x
4.8x
6.2x
15.0x
15.9x
10.2x
12.4x
10.3x
14.1x
14.3x
2.8x
3.1x
2.1x
3.0x
2.0x
4.4x
5.9x
9.3x
15.1x
8.8x
9.9x
9.5x
11.2x
13.4x
$ 13,469.5
31,850.5
19,508.2
8,911.8
0.6x
3.0x
4.1x
4.1x
5.0x
7.7x
9.5x
12.6x
0.6x
2.8x
3.9x
3.9x
4.8x
7.7x
7.9x
10.6x

4.7x
13.6x
3.1x
10.0x
3.5x
10.3x
0.9x
6.6x
4.5x
3.0x
3.2x
1.0x
12.0x
8.8x
8.4x
6.0x
USD ($mm)
$
$
$
$
$
$
$
60.88
76.97
88.76
50.84
66.91
73.24
42.08
38.5
481.4
42.2
291.1
71.9
284.9
364.2
2,346.7
37,055.3
3,743.0
14,801.2
4,812.2
20,866.3
15,326.0
2,944.5
38,300.1
4,196.1
18,971.9
5,301.4
20,249.3
14,862.6
Systems Software
SAP AG (DB:SAP)
$
$
$
$
28.49
36.81
37.11
77.57
1,908.8
8,300.7
4,497.4
1,193.5
54,381.1
305,508.1
166,898.8
92,581.3
65,299.1
246,211.1
154,568.8
94,655.9
Company
68
25.3
40.0
Category
Systems Software
Weights
30%
70%
1013.6
Strategic Reason
805.9
11,512.2
2,649.9
5,992.3
2,460.9
4,231.0
2,397.0
$ 112,298.0
83,433.0
37,552.0
23,013.3
196.0
2,411.7
409.5
1,529.1
516.8
1,437.0
1,040.8
$ 13,029.0
31,828.0
16,289.0
7,529.3
592.0
164.0
1,054.3
12,306.3
1,983.1
6,282.0
2,632.7
4,557.3
2,538.4
$ 109,155.5
88,596.7
39,311.3
24,502.9
605.1
High
Average
Median
Low
162.5
Financial Reasons
2806.9
1849.5
2054.5
522.2
2224.6
1646.9
1682.0
1079.5
2728.3
1788.7
1954.9
618.9
1943.0
1422.8
1371.7
982.9
Business outsourcing solutions for human

resources and administration functions
Highest EBITDA multiples in comps list
Business process outsourcing for payroll

and tax services
Highest sales multiples in comps list
Source: CapitalIQ
Public Comparables
Financial Metric
Company
Name
Price
Market
Value of
Equity
Shares
Outstanding
Enterprise
Value
LTM
Sales
LTM
EBITDA
EV as a multiple of
NTM
Sales
NTM
EBITDA
LTM
Sales
LTM
EBITDA
NTM
Sales
NTM
EBITDA
316.8
2,543.1
474.5
1,922.9
556.1
1,812.0
1,110.9
3.7x
3.3x
1.6x
3.2x
2.2x
4.8x
6.2x
15.0x
15.9x
10.2x
12.4x
10.3x
14.1x
14.3x
2.8x
3.1x
2.1x
3.0x
2.0x
4.4x
5.9x
9.3x
15.1x
8.8x
9.9x
9.5x
11.2x
13.4x
$ 13,469.5
31,850.5
19,508.2
8,911.8
0.6x
3.0x
4.1x
4.1x
5.0x
7.7x
9.5x
12.6x
0.6x
2.8x
3.9x
3.9x
4.8x
7.7x
7.9x
10.6x
Normalized
Averaged
Weighted Multiples
Averaged
Weighted
Multiples
4.3x
13.3x
4.1x
4.7x
13.6x
4.5x
3.0x
9.8x
2.8x
3.1x
10.0x
3.0x
3.4x
9.8x
3.5x
10.3x
3.2x
0.9x
6.6x
1.0x
10.8x
12.0x
8.4x
8.8x
8.3x
8.4x
6.0x
USD ($mm)
$
$
$
$
$
$
$
60.88
76.97
88.76
50.84
66.91
73.24
42.08
38.5
481.4
42.2
291.1
71.9
284.9
364.2
2,346.7
37,055.3
3,743.0
14,801.2
4,812.2
20,866.3
15,326.0
2,944.5
38,300.1
4,196.1
18,971.9
5,301.4
20,249.3
14,862.6
Systems Software
SAP AG (DB:SAP)
$
$
$
$
28.49
36.81
37.11
77.57
1,908.8
8,300.7
4,497.4
1,193.5
54,381.1
305,508.1
166,898.8
92,581.3
65,299.1
246,211.1
154,568.8
94,655.9
25.3
40.0
Category
Systems Software
Weights
30%
70%
1013.6
69
SpringLogix
592.0
164.0
605.1
162.5
Multiple Range
0.9x - 4.3x
6.6x - 13.3x
1.0x - 4.1x
6.0x - 10.8x
805.9
11,512.2
2,649.9
5,992.3
2,460.9
4,231.0
2,397.0
$ 112,298.0
83,433.0
37,552.0
23,013.3
196.0
2,411.7
409.5
1,529.1
516.8
1,437.0
1,040.8
$ 13,029.0
31,828.0
16,289.0
7,529.3
592.0
High
High
Average Average
Median Median
Low
Low
Final Public Comparables

5 application software companies
4 system software companies
Metric
LTM Sales
LTM EBITDA
NTM Sales
NTM EBITDA
164.0
1,054.3
12,306.3
1,983.1
6,282.0
2,632.7
4,557.3
2,538.4
$ 109,155.5
88,596.7
39,311.3
24,502.9
605.1
162.5
Implied
usingmultiples
"High" multiples
Implied EV
using EV
"High"
Implied
using "Average"
Implied EV
using EV
"Average"
multiplesmultiples
Implied
using "Median"
Implied EV
using EV
"Median"
multiplesmultiples
Implied
using
"Low" multiples
Implied EV
using EV
"Low"
multiples
Implied EV
$522.2 - 2555.7
$1079.5 - 2182.4
$618.9 - 2472.1
$982.9 - 1753.5
2555.7
2806.9
1763.5
1849.5
2026.0
2054.5
522.2
522.2
2182.4
2224.6
1609.3
1646.9
1599.1
1682.0
1079.5
1079.5
2472.1
2728.3
1705.4
1788.7
1913.7
1954.9
618.9
618.9

$0.98B $1.75B
Source: CapitalIQ
1753.5
1943.0
1360.4
1422.8
1355.4
1371.7
982.9
982.9
Turnaround Strategy
Investment Committees Turnaround Plan for SpringLogix
70

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Potential Acquisition of

Strategic Analysis and Valuation

Team Members: Carson Lam, Dekel Sherman, Max Teles

SpringLogixs equity is priced at an all-time low (40% drop in stock price)

Valuation of SpringLogix from Seller and Buyer Perspectives

Transfer Pricing Implications on SpringLogix Valuation

Implementation of transfer pricing boosts SpringLogixs valuation

Source: Management Projections

II. Company Overview

Founded in 1993 by computer programming graduate students from the

Enterprise software and technology services; specialty in planning and

International operations with large presence in U.S. and Europe

U.S. vs. Europe Sales

Revenue Mix (in $mm, LTM)

Source: Management Projections

III. Industry Overview

Cloud Computing Industry

$342.6B market growing at a CAGR

$112B market growing at a CAGR of

Mature market characterized by a steady

SaaS is a $15B market with an

SaaS is expected to account for 25% of

Enterprise Software Revenue Forecast

Cloud Computing Revenue Forecast

Source: BCG, Gartner, S&P CapitalIQ

Key Market Trends

76% enterprises have a

Source: KPMG Global Cloud Industry Report 2012

Source: SoftwareEquity Industry Report

IV. Economic Overview

Leverage levels peaked in 2007 at 8.4x Debt/EBITDA

EV/EBITDA Multiple Breakdown

Source: S&P CapitalIQ , PitchBook

Source: PwC Technology M&A Report

Realize the ability to turn SpringLogixs performance around by implementing an

Source: Bloomberg News

V. Deliverable 1: SpringLogix Valuation

Discounted Cash Flow

Net Pre-Tax Synergies

Cannibalization of license sales

SaaS Subscription and Services as

Revenue weights six years out

Source: Management Projections

Net Pre-Tax Synergies

SaaS-related revenues generate

2.50% long term growth rate

Source: Management Projections

SaaS Subscription and Services

Revenue weights six years out

SaaS-related revenues generate

2.00% long term growth rate

Source: Management Projections

Discounted Cash Flow

Adj. Taxes @ 40%

Plus: Noncash Charges

Source: Management Projections

Days Sales Outstanding

Days Payables Outstanding

Source: Management Projections

Deferred Financing Fees

Revolving Line of Credit

Cash balance remains at

Debt paid down in LBO to