Page 1

TRIPLE TREE INVESTMENT BANKING

QUARTER

3

2009

Technology Healthcare Business Services

QUARTERLY VALUE TRACKER WWW.TRIPLE-TREE.COM

MINNEAPOLIS


TRIPLE TREE INVESTMENT BANKING

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Q U A R T E R LY V A L U E T R A C K E R V A L U A T I O N A N A LY S I S F O R T E C H N O L O G Y, H E A LT H C A R E , A N D B U S I N E S S S E R V I C E S

The uncertainty of healthcare reform, the rising unemployment rate, and the talk of another large government bailout are all major themes making headlines in recent weeks. At the end of Q3, market indicators continued to be mixed: the S&P index was up nearly 10%, the Deloitte Consumer Spending Index rose to a two year high; the unemployment and foreclosure rates continued to rise. However, the M&A market indicators are positive. M&A multiples continue to rebound and overall M&A transaction volume is up again, compared with late '08 and early '09 lows.

3

2009

(NYSE:PER), Cisco (NASDAQ: CSCO) acquired Tandberg (OB: TAA) and Xerox (NYSE:XRX) acquired Affiliated Computer Service (NYSE:ACS) to expand their portfolios. Large firms flush with cash such as Dell (NYSE:DELL) and VMware (NYSE: VMW) are moving opportunistically to acquire both best-in-class and firms that may have become distressed as a result of current economic conditions. Quickly growing healthcare firms that have experienced strong organic growth are also moving to acquire best-in-class mid-market firms to expand their solutions. For example, athenahealth's (NASDAQ: ATHN) recently acquired SaaS-based healthcare analytics firm Anodyne. Looking forward into Q4, the economic outlook is still uncertain. However, there is evidence that the market is beginning to recover.

TECHNOLOGY TripleTree’s Technology sector contains three major sub - sectors – Software, IT Services, and Wireless/Mobile Internet

SOFTWARE Technology M&A activity has seen resurgence in the third quarter with $31.8B worth of announced acquisitions, double the amount from Q2. As expected, acquisitions were propped up by a host of global acquirers acting opportunistically and seeking high growth assets in the technology sector. In the public markets, the quarter showed encouraging signs; the Nasdaq rose 15% and software companies experienced similar trend. The month of September experienced the highest level of technology M&A spending of any month so far this year with approximately $22B of the total $35B worth of Q3 deal flow. In the largest deal of the quarter and an acquisition that will markedly accelerate their size in the BPO market, Xerox (NYSE: XRX) acquired ACS WWW.TRIPLE-TREE.COM

(NYSE: ACS) for $6.4B (1.3x TEV/Revenue). Many other game-changing acquisitions surfaced late in Q3 with Dell's (NASDAQ: DELL) acquisition of Perot (NYSE: PER) for $3.9B (1.4x TEV/Revenue) - the largest in Dell's history and one that will better position Dell with a strong services arm focused on healthcare to compete with the likes of IBM and HP. Adobe (NASDAQ: ADBE) acquired Omniture (NASDAQ: OMTR) for $1.8B (5.2x TEV/Revenue) emphasizing the value and uniqueness of large SaaS platforms and building a stronger online presence to manage and measure content and analytics. IBM (NYSE: IBM) has acquired SPSS (NASDAQ: SPSS) for $1.2B (2.9x TEV/Revenue) expanding its focus on business analytics in hopes of meeting growing customer needs. 952.253.5300

Q3 2009 VALUE TRACKER, PAGE 2

TECHNOLOGY

The technology marketplace continues to experience consolidation among software vendors and Outsourcing/IT service providers. Large software firms are attempting to become master brands by offering customers a one-stop shop for their IT software and services needs. In the third quarter Dell (NYSE:DELL) acquired Perot

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Enterprise Software

acquiring SaaS-based financial management provider Mint for $170M. Further, while PE spending accounted for only 13% of M&A, Silver Lake Partners is leading the transaction with eBay-owned (NASDAQ: EBAY) Skype for $2B, the largest PE deal of the year. SaaS-based remote access and helpdesk services company, LogMeIn (NASAQ: LOGM), raised $107M through its IPO and is experiencing stability on the public market with a valuation of 6.4x TEV/Revenue. LogMeIn is in the top 6 of best-returning IPOs for the quarter with a 14% return on Q3 close. While the number of IPOs in Q3 2009 has increased 240% compared to Q3 2008, technology IPOs have accounted for only 2 of the 17 IPOs in the current quarter, compared to half of the 12 public offerings in Q2. The 17 U.S. IPOs in the third quarter raised $5.5b compared to the $1.6B raised in Q2. These numbers hint that public markets have renewed confidence and that the IPO market is generating momentum.

($ millions, except share price) (Multiples over 100x have been excluded as not meaningful “NM”)

Ticker Company name PLATFORM & DATABASE AAPL Apple Inc. HPQ Hewlett-Packard Company IBM International Business Machines Corp. MSFT Microsoft Corporation NOVL Novell Inc. ORCL Oracle Corp. PVSW Pervasive Software Inc. JAVA Sun Microsystems Inc. SY Sybase, Inc. UIS Unisys Corporation VMW VMware, Inc.

Market Price 30-Sep-09

Market Cap.

Enterprise Value

LTM Revenue

LTM EBITDA

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

$185.35 $47.21 $119.61 $25.72 $4.51 $20.84 $4.95 $9.09 $38.90 $2.67 $40.17

166,040 111,938 156,795 229,631 1,564 104,474 89 6,848 3,149 989 15,945

141,818 115,531 173,735 205,480 643 98,977 45 5,240 2,817 1,602 14,119

34,562 116,836 94,811 58,437 891 22,975 47 11,449 1,135 4,821 1,913

7,520 15,444 23,250 23,267 128 10,761 8 392 308 291 452

5,175 7,324 12,648 14,569 27 5,640 5 (2,234) 153 (79) 297

4.1x 1.0x 1.8x 3.5x 0.7x 4.3x 1.0x 0.5x 2.5x 0.3x 7.4x

18.9x 7.5x 7.5x 8.8x 5.0x 9.2x 5.5x 13.4x 9.1x 5.5x 31.2x

32.1x 15.3x 12.4x 15.8x 58.7x 18.5x 16.7x NA 20.6x NA 53.6x

Average Median

2.5x 1.8x

11.1x 8.8x

27.1x 18.5x

Source: CapitalIQ WWW.TRIPLE-TREE.COM

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Q3 2009 VALUE TRACKER, PAGE 3

TECHNOLOGY

Other prominent tech shoppers were also active this quarter. Technology giant Cisco (NASDAQ: CSCO) announced its acquisition of video conferencing leader Tandberg (OB: TAA) for $3B (3.6x TEV/Revenue). Oracle (NASDAQ: ORCL) announced late in the quarter that it will acquire the leading provider of financial reporting acceleration software, HyperRoll. McAfee (NYSE: MFE) expanded its SaaS email management solutions with the purchase of MX Logic for $140M (4.0x TEV/Revenue). A few other noteworthy acquisitions this quarter include insurance software provider Ebix (NASDAQ: EBIX) acquiring Peak Performance Solutions, SaaS-based insurance EDI, for $8M, and E-Z Data, on-demand CRM for financial services, for $50.4M, VMWare (NYSE: VMW) acquiring open source software company SpringSource for $420M (14.0x TEV/Revenue), Actimize (TASE: NICE) acquiring leading analyticsbased fraud and compliance provider Fortent for $73.5M (2.5x TEV/Revenue), and Intuit (NASDAQ: INTU)

3

2009

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QUARTER

ERP SOFTWARE AMSW.A American Software, Inc. EPIC Epicor Software Corporation IFR IFR Capital Plc INTU Intuit Inc. JDAS JDA Software Group Inc. LWSN Lawson Software, Inc. QADI QAD Inc. DB:SAP SAP AG

CRM SOFTWARE ARTG Art Technology Group Inc. HHS Harte-Hanks Inc. RNOW Rightnow Technologies Inc. CRM Salesforce.com UNCA Unica Corp.

Market Price 30-Sep-09

Market Cap.

Enterprise Value

LTM Revenue

LTM EBITDA

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

$6.53 $6.37 $0.23 $28.50 $21.94 $6.24 $4.55 $36.26

165 389 97 9,175 701 1,008 141 59,178

120 566 281 8,828 659 841 118 58,769

77 457 1,110 3,183 378 735 233 16,585

9 72 64 957 95 116 7 5,189

4 0 (109) 447 6 29 (25) 2,738

1.6x 1.2x 0.3x 2.8x 1.7x 1.1x 0.5x 3.5x

13.3x 7.9x 4.4x 9.2x 6.9x 7.3x 16.3x 11.3x

46.1x NM NA 20.5x NM 35.3x NA 21.6x

Average Median

1.6x 1.4x

9.6x 8.6x

30.9x 28.4x

12 51 1 64 (30)

2.4x 1.1x 2.5x 5.6x 1.0x

18.5x 8.1x 59.0x 52.5x NA

41.3x 17.2x NM NM NA

Average Median

2.5x 2.4x

34.5x 35.5x

29.3x 29.3x

(5) 6 (7) 25 (16)

0.7x 2.2x 0.6x 4.5x 0.3x

30.2x 20.1x NA 29.2x NA

NA 57.5x NA 50.1x NA

Average Median

1.7x 0.7x

26.5x 29.2x

53.8x 53.8x

(3) 21 11 39 2 6

2.6x 3.6x 0.3x 1.2x 1.5x 1.3x

28.0x 14.1x 4.1x 6.0x 9.2x 12.2x

NA 14.5x 11.6x 9.2x 55.0x 75.9x

Average Median

1.8x 1.4x

12.3x 10.7x

33.2x 14.5x

$3.86 $13.83 $14.44 $56.93 $7.62

CUSTOMER CARE CHRD Chordiant Software, Inc. ININ Interactive Intelligence, Inc. KANA KANA Software Inc. PEGA Pegasystems Inc. SPRT support.com, Inc.

$3.89 $19.11 $0.80 $34.53 $2.40

SUPPLY CHAIN ARBA Ariba Inc. TSX:DSG Descartes Systems Group Inc. PLUS ePlus Inc. ITWO I2 Technologies, Inc. LSE:KWL Kewill plc MANH Manhattan Associates, Inc.

$11.60 $5.74 $15.55 $16.04 $1.64 $20.20

Infrastructure Software

492 879 458 7,059 157

117 327 33 1,255 112

1,025 304 128 360 134 455

420 1,061 368 6,665 109

61 273 34 1,065 15

896 251 157 293 127 367

173 973 145 1,187 105

91 124 53 238 54

340 69 616 242 85 278

23 130 6 127 (1)

2 14 (3) 36 (16)

32 18 38 49 14 30

($ millions, except share price) (Multiples over 100x have been excluded as not meaningful “NM”)

Source: CapitalIQ WWW.TRIPLE-TREE.COM

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Q3 2009 VALUE TRACKER, PAGE 4

TECHNOLOGY

Ticker Company name

3

2009

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V A L U A T I O N A N A LY S I S F O R T E C H N O L O G Y, H E A LT H C A R E , A N D B U S I N E S S S E R V I C E S

ASSET LIFECYCLE MANAGEMENT ANSS Ansys, Inc. ADSK Autodesk, Inc. MSCS MSC Software Corp. PMTC Parametric Technology Corporation

Infrastructure Software

Market Price 30-Sep-09

Market Cap.

Enterprise Value

LTM Revenue

LTM EBITDA

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

$37.42 $23.80 $8.41 $13.82

3,296 5,468 383 1,606

3,280 4,531 235 1,430

496 1,938 234 991

223 340 20 135

106 (23) (22) 52

6.6x 2.3x 1.0x 1.4x

14.7x 13.3x 11.9x 10.6x

31.1x NA NA 30.8x

Average Median

2.9x 1.9x

12.6x 12.6x

31.0x 31.0x

($ millions, except share price) (Multiples over 100x have been excluded as not meaningful “NM”)

DEVELOPMENT TOOLS PRGS Progress Software Corp.

$22.65

OSS / BSS COMMUNICATION SOFTWARE DOX Amdocs Ltd. AIM:BILL Billing Services Group Limited CSGS CSG Systems International Inc. EVOL Evolving Systems Inc. LSE:ITL Intec Telecom Systems plc MNDO MIND C.T.I., Ltd. NSR NeuStar, Inc. SNCR Synchronoss Technologies, Inc. SVR Syniverse Holdings Inc. TTIL TTI Team Telecom International Ltd.

SECURITY SOFTWARE CHKP Check Point Software Technologies Ltd. MFE McAfee, Inc. SNWL SonicWALL, Inc. SYMC Symantec Corporation TSE:4704 Trend Micro Inc. VRSN VeriSign Inc. WBSN Websense, Inc.

908

$26.88 $0.39 $16.01 $6.95 $1.57 $1.46 $22.60 $12.47 $17.50 $1.27

$28.35 $43.79 $8.40 $16.47 $28.99 $23.69 $16.80

5,483 108 562 68 479 28 1,680 387 1,203 20

5,917 6,884 452 13,415 4,996 4,569 742

722

4,504 168 583 67 396 17 1,432 320 1,528 (5)

4,896 6,121 279 12,991 3,635 3,878 777

497

2,980 149 490 38 253 18 480 118 485 47

836 1,750 203 5,932 1,086 996 316

92

602 35 115 8 42 2 210 23 184 3

432 371 22 1,833 395 386 64

23

1.5x

7.8x

40.3x

Average Median

1.5x 1.5x

7.8x 7.8x

40.3x 40.3x

323 12 60 4 25 (6) 35 10 75 (2)

1.5x 1.1x 1.2x 1.8x 1.6x 0.9x 3.0x 2.7x 3.1x NA

7.5x 4.8x 5.1x 9.0x 9.4x 7.5x 6.8x 13.7x 8.3x NA

17.0x 9.0x 9.3x 15.2x 19.0x NA 48.4x 39.9x 16.0x NA

Average Median

1.9x 1.6x

8.0x 7.5x

21.7x 16.5x

323 176 9 (6,828) 219 (198) (17)

5.9x 3.5x 1.4x 2.2x 3.3x 3.9x 2.5x

11.3x NA 12.4x 7.1x 9.2x 10.0x 12.1x

18.3x 39.0x 49.3x NA 22.8x NA NA

Average Median

3.2x 3.3x

10.4x 10.7x

32.4x 30.9x

Source: CapitalIQ

WWW.TRIPLE-TREE.COM

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Q3 2009 VALUE TRACKER, PAGE 5

TECHNOLOGY

Ticker Company name

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SYSTEMS INFRASTRUCTURE MANAGEMENT BMC BMC Software Inc. CA CA, Inc. CPWR Compuware Corp. KEYN Keynote Systems Inc. QSFT Quest Software Inc.

WEB/LEGACY ENABLEMENT CTXS Citrix Systems, Inc. JCDA Jacada Ltd.

CONTENT & KNOWLEDGE MGT ADBE Adobe Systems Inc. LSE:AU. Autonomy Corp. plc CNVR Convera Corp. NCR NCR Corp. OTEX Open Text Corp.

Market Cap.

Enterprise Value

LTM Revenue

LTM EBITDA

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

$37.53 $21.99 $7.33 $9.43 $16.85

6,905 11,518 1,741 137 1,486

6,022 10,458 1,350 81 1,203

1,884 4,234 1,006 81 719

609 1,393 221 10 161

319 693 156 2 77

3.2x 2.5x 1.3x 1.0x 1.7x

9.9x 7.5x 6.1x 7.9x 7.5x

21.6x 16.6x 11.2x 65.4x 19.3x

Average Median

1.9x 1.7x

7.8x 7.5x

26.8x 19.3x

159 (10)

4.2x 0.2x

21.1x NA

45.2x NA

Average Median

2.2x 2.2x

21.1x 21.1x

45.2x 45.2x

$39.23 $1.80

Information Management BUSINESS INTELLIGENCE ACTU Actuate Corp. INFA Informatica Corp. MSTR MicroStrategy Inc. NYSE:NZ Netezza Corporation OMTR Omniture Inc.

Market Price 30-Sep-09

7,181 30

6,601 5

1,576 19

312 (9)

($ millions, except share price) (Multiples over 100x have been excluded as not meaningful “NM”) $5.77 $22.58 $71.54 $11.24 $21.44

$33.04 $25.91 $0.24 $13.82 $37.33

262 1,995 851 681 1,656

17,346 6,213 13 2,196 2,096

218 1,775 675 571 1,554

15,139 6,256 (5) 1,821 2,123

126 465 354 190 336

3,104 597 1 4,932 786

21 101 73 15 34

1,120 273 (14) 327 205

13 56 58 27 (38)

1.7x 3.8x 1.9x 3.0x 4.6x

10.2x 17.6x 9.2x 38.9x 45.2x

19.6x 35.4x 14.6x 25.5x NA

Average Median

3.0x 3.0x

24.2x 17.6x

23.8x 22.5x

664 170 (20) 144 57

4.9x 10.5x NA 0.4x 2.7x

13.5x 22.9x 0.4x 5.6x 10.3x

26.1x 36.5x NA 15.2x 36.8x

Average Median

4.6x 3.8x

10.5x 10.3x

28.7x 31.3x

Source: CapitalIQ WWW.TRIPLE-TREE.COM

952.253.5300

Q3 2009 VALUE TRACKER, PAGE 6

TECHNOLOGY

Ticker Company name

3

2009

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NETWORK EQUPIMENT VENDORS COMS 3Com Corporation ALU Alcatel-Lucent CSCO Cisco Systems, Inc. ERIC Ericsson JDSU JDS Uniphase Corp. JNPR Juniper Networks, Inc. MOT Motorola Inc. NOK1V Nokia Corp. QCOM QUALCOMM Inc. DB:SIE Siemens AG

STORAGE TECHNOLOGY DTLK Datalink Corp. HILL Dot Hill Systems Corp. EMC EMC Corporation FALC Falconstor Software Inc. NTAP NetApp, Inc.

SEARCH ENGINE / E-COMMERCE GOOG Google Inc. INSP InfoSpace Inc. LOOK LookSmart, Ltd. YHOO Yahoo! Inc.

Market Price 30-Sep-09

Market Cap.

Enterprise Value

LTM Revenue

LTM EBITDA

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

$5.23 $4.54 $23.54 $10.02 $7.11 $27.02 $8.59 $15.05 $44.98 $94.64

2,045 10,257 136,360 60,000 1,582 14,164 19,717 55,325 74,771 81,998

1,579 11,149 111,684 52,000 1,260 12,186 17,341 55,656 65,062 96,992

1,265 24,532 36,117 31,451 1,294 3,421 25,484 65,457 11,060 116,686

142 1,203 9,153 4,958 40 738 1,051 7,675 4,300 10,483

42 (6,414) 6,134 1,339 (866) 291 (4,259) 3,215 1,668 1,425

1.2x 0.5x 3.1x 1.7x 1.0x 3.6x 0.7x 0.9x 5.9x 0.8x

11.1x 9.3x 12.2x 10.5x 31.6x 16.5x 16.5x 7.3x 15.1x 9.3x

48.3x NA 22.2x 44.8x NA 48.6x NA 17.2x 44.8x 57.5x

Average Median

1.9x 1.1x

13.9x 11.7x

40.5x 45.1x

2 (20) 1,133 (1) 103

0.1x 0.1x 2.2x 2.1x 2.1x

5.0x NA 12.5x 52.4x 18.7x

29.1x NA 30.4x NA 86.7x

Average Median

1.3x 2.1x

22.2x 15.6x

48.8x 30.4x

4,580 (20) (17) 15

6.2x 0.5x NA 3.1x

15.6x 7.8x 1.6x 16.2x

34.3x NA NA NM

Average Median

3.3x 3.1x

10.3x 11.7x

34.3x 34.3x

$3.60 $1.74 $17.04 $4.97 $26.68

$495.85 $7.72 $1.16 $17.81

47 84 34,456 222 8,974

156,972 273 20 24,994

20 28 30,636 185 7,378

137,628 72 (7) 21,224

182 257 14,140 88 3,504

22,274 159 57 6,746

4 (10) 2,444 4 395

8,817 9 (4) 1,313

Source: CapitalIQ WWW.TRIPLE-TREE.COM

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Q3 2009 VALUE TRACKER, PAGE 7

TECHNOLOGY

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TECHNOLOGY

Enterprise Applications Relative Performance % 145 135 125

115

105

Software

95

85 Jul-09

Aug-09

S&P 5 00

Cus tomer Ca re

M&A Activity (07/01/09 - 09/30/09)

Sep-09

As se t Life cycle Ma nagemen t

CRM Softwa re

Supp ly C hain

ERP So ftware

Total # of Transactions # Reporting P/R Multiples Average P/R Median P/R

P latfo rm & Data ba se

137 21 2.2x 2.0x

Information Applications Relative Performance % 145

135

125

115

105

95

85 Jul-09

Aug-09 S&P 50 0

Bus in es s Inte lligen ce

Sep-09 C on te nt & Kn owle dge Mgt

Stora ge Techno logy

Sea rch Engin e

Infrastru ctur e App lication s Relat ive Perfo rmance % 145

135

125

115

105

95

85 Jul-09

Aug-09 S&P 500 Development Tool s OSS / BSS Co mmu nica ti on Software

Sep-09 Sys tems In frastructu re Ma nagemen t I ntegration Security Software

WWW.TRIPLE-TREE.COM

Web /Legacy Enab lemen t Network Equ ipme nt Ven dors

*TripleTree's software research covers the following segments: Platform & Database, ERP, CRM, Customer Care, Supply Chain, Asset Lifecycle Management, Development Tools, Web/Legacy Enablement, Systems/Infrastructure Management, Security, Business Intelligence, Content & Knowledge Management, Storage Technology, Search Engine/E-commerce, Software as a Service, OSS/BSS Communication Software, and Network Equipment vendors. ** For additional information on how this data might apply to your business, please contact Dave Henderson or Brian Klemenhagen at 952.253.5300.

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Q3 2009 VALUE TRACKER, PAGE 8


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Software as a Service

ATHN BBBB CNQR CTCT TRAK DMAN KNXA LPSN LOOP MDSO N OMTR LOGM OPEN RNOW SLRY CRM SFSF SNCR TLEO ULTI VOCS

Athenahealth, Inc. Blackboard Inc. Concur Technologies, Inc. Constant Contact, Inc. DealerTrack Holdings, Inc. DemandTec, Inc. Kenexa Corp. LivePerson Inc. LoopNet, Inc. Medidata Solutions, Inc. NetSuite, Inc. Omniture Inc. LogMeIn, Inc. OpenTable, Inc. Rightnow Technologies Inc. Salary.com, Inc. Salesforce.com SuccessFactors, Inc. Synchronoss Technologies, Inc. Taleo Corp. Ultimate Software Group Inc. Vocus Inc.

($ millions, except share price) (Multiples over 100x have been excluded as not meaningful “NM”) Market Price 30-Sep-09

Market Cap.

Enterprise Value

LTM Revenue

LTM EBITDA

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

$38.37 $37.78 $39.76 $19.25 $18.91 $8.83 $13.48 $5.04 $9.04 $15.15 $15.30 $21.44 $18.31 $27.56 $14.44 $3.18 $56.93 $14.07 $12.47 $22.64 $28.72 $20.89

1,289 1,209 1,934 545 764 250 304 241 312 343 948 1,656 405 614 458 51 7,059 806 387 715 707 403

1,204 1,303 1,693 438 585 182 257 210 240 269 832 1,554 411 550 368 40 6,665 698 320 654 679 313

166 347 240 107 229 78 148 79 83 127 164 336 66 61 145 44 1,187 135 118 192 190 82

22 69 59 3 23 (4) 22 11 24 10 (11) 34 9 7 6 (17) 127 (32) 23 16 7 5

30 3 25 (3) (7) (9) (148) (21) 14 (2) (19) (38) 6 (0) 1 (25) 64 (34) 10 (11) (3) 1

7.3x 3.8x 7.0x 4.1x 2.6x 2.3x 1.7x 2.6x 2.9x 2.1x 5.1x 4.6x 6.3x 9.0x 2.5x 0.9x 5.6x 5.2x 2.7x 3.4x 3.6x 3.8x

54.9x 19.0x 28.5x NM 25.0x NA 11.5x 18.5x 9.8x 26.8x NA 45.2x 46.3x 80.3x 59.0x NA 52.5x NA 13.7x 39.9x NM 62.8x

43.5x NM 76.0x NA NA NA NA NA 23.0x NA NA NA 70.8x NA NM NA NM NA 39.9x NA NA NM

Average Median

4.1x 3.7x

37.1x 34.2x

50.7x 43.5x

S o f t w a r e a s a S e r v i c e Tr a n s i t i o n ( H y b r i d M o d e l ) ($ millions, except share price) (Multiples over 100x have been excluded as not meaningful “NM”) Ticker Company name AMZN ARBA EPAY CSCO CTXS DSG

Amazon.com Inc. Ariba Inc. Bottomline Technologies Inc. Cisco Systems, Inc. Citrix Systems, Inc. Descartes Systems Group Inc.

Market Price 30-Sep-09

Market Cap.

Enterprise Value

LTM Revenue

LTM EBITDA

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

$93.36 $11.60 $12.90 $23.54 $39.23 $5.57

40,314 1,025 327 136,360 7,181 295

37,211 896 276 111,684 6,601 243

20,509 340 138 36,117 1,576 69

943 32 10 9,153 312 18

663 (3) (12) 6,134 159 21

1.8x 2.6x 2.0x 3.1x 4.2x 3.5x

39.5x 28.0x 28.5x 12.2x 21.1x 13.7x

60.8x NA NA 22.2x 45.2x 14.0x

Average Median

3.1x 3.1x

20.7x 21.1x

27.2x 22.2x

Source: CapitalIQ

WWW.TRIPLE-TREE.COM

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Q3 2009 VALUE TRACKER, PAGE 9

TECHNOLOGY

Ticker Company name

3


TRIPLE TREE INVESTMENT BANKING

KNOWLEDGE. VISION. RESULTS.

Q U A R T E R LY V A L U E T R A C K E R

QUARTER

2009

V A L U A T I O N A N A LY S I S F O R T E C H N O L O G Y, H E A LT H C A R E , A N D B U S I N E S S S E R V I C E S

* TripleTree's software research covers the following segments: Platform & Database, ERP, CRM, Customer Care, Supply Chain, Asset Lifecycle Management, Integration, Development Tools, Web/Legacy Enablement, Systems/Infrastructure Management, Security, Business Intelligence, Content & Knowledge Management, Storage Technology, Search Engine/E-commerce and Software as a Service.

1 30 1 25 1 20 1 15 1 10 1 05 1 00 95

** For additional infomration on how this data might apply to your business, please contact Dave Henderson or Brian Klemenhagen at 952.253.5300.

90 85 Jul-0 9

Aug-09

Sep-09 S&P 500

IT SERVICES

Softwa re as a Service

($ millions, except share price)

Ticker Company name COMMERCIAL-FOCUSED IT CONSULTING ACN Accenture plc BE Brompton Equity Split Corp. CBR CIBER, Inc. DTPI Diamond Mgmt & Technology Consultants ELOY eLoyalty Corp. LSE:LOG Logica PLC TMNG Management Network Group Inc. PRFT Perficient Inc. SAPE Sapient Corp.

GOVERNMENT SERVICES CAI Cairo Communication SpA MANT ManTech International Corp. MMS MAXIMUS, Inc. NCIT NCI, Inc. EGOV NIC Inc. SINT SinterCast AB SRX SRA International Inc. TIER Tier Technologies Inc. TYL Tyler Technologies, Inc.

(Multiples over 100x have been excluded as not meaningful “NM”)

Market Price 30-Sep-09

Market Cap.

Enterprise Value

LTM Revenue

LTM EBITDA

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

$37.27 $9.45 $4.00 $6.85 $8.01 $2.06 $0.64 $8.27 $8.04

22,894 17 278 188 114 3,304 22 259 1,062

19,542 34 358 140 107 4,030 10 228 888

21,577 0 1,050 151 96 6,079 63 200 632

3,392 0 53 (9) (9) 549 (0) 15 82

1,590 (17) 25 (8) (16) 90 (9) 4 56

0.9x NM 0.3x 0.9x 1.1x 0.7x 0.2x 1.1x 1.4x

5.8x NM 6.7x NA NA 7.3x NA 14.9x 10.9x

14.4x NA 11.2x NA NA 36.7x NA 71.0x 19.0x

Average Median

0.8x 0.9x

9.1x 7.3x

30.5x 19.0x

16 101 13 19 13 (2) 58 (19) 24

0.7x 0.9x 1.0x 1.0x 4.6x 35.7x 0.8x 0.9x 2.2x

7.1x 9.0x 8.1x 11.1x 22.0x NA 9.6x NA 12.4x

16.8x 16.6x 62.7x 20.2x 41.9x NA 21.3x NA 24.8x

Average Median

5.3x 1.0x

11.3x 9.6x

29.2x 21.3x

$3.49 $47.10 $46.60 $28.66 $8.89 $5.49 $21.59 $8.48 $17.09

271 1,680 816 386 561 103 1,238 157 604

202 1,667 725 411 504 101 1,238 117 616

308 1,944 739 416 109 3 1,541 125 280

29 185 90 37 23 (1) 129 (2) 50

Source: CapitalIQ WWW.TRIPLE-TREE.COM

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Q3 2009 VALUE TRACKER, PAGE 10

TECHNOLOGY

Software as a Service Relative Performance %

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V A L U A T I O N A N A LY S I S F O R T E C H N O L O G Y, H E A LT H C A R E , A N D B U S I N E S S S E R V I C E S

OFFSHORE SERVICES PROVIDERS CTSH Cognizant Technology Solutions Corp. Infosys Technologies Ltd. NSTC Ness Technologies Inc. Satyam Computer Services Ltd. SYNT Syntel Inc. Wipro Ltd.

IT STAFF AUGMENTATION ANLY Analysts International Corp. MPS MPS Group Inc.

Market Price 30-Sep-09

Market Cap.

Enterprise Value

LTM Revenue

LTM EBITDA

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

$38.66 $49.52 $7.89 $2.55 $47.73 $12.91

11,336 28,391 303 3,002 1,983 18,928

10,352 25,797 339 1,909 1,824 18,352

3,010 4,630 608 2,163 405 5,358

659 1,573 32 498 125 1,094

480 1,286 23 437 101 767

3.4x 5.6x 0.6x 0.9x 4.5x 3.4x

x 15.7x 16.4x 10.7x 3.8x 14.6x 16.8x

23.6x 22.1x 13.2x 6.9x 19.6x 24.7x

Average Median

3.1x 3.4x

13.0x 15.2x

18.3x 20.8x

(17) (271)

0.1x 0.4x

NA 10.5x

NA NA

Average Median

0.3x 0.3x

10.5x 10.5x

NA NA

$0.72 $10.52

18 980

13 856

205 1,912

(3) 81

Source: CapitalIQ

IT Services Relative Performance % 145

IT Services

135

M&A Activity (07/01/09 - 09/30/09)

125

115

Total # of Transactions # Reporting P/R Multiples Average P/R Median P/R

105

95

138 11 0.9x 0.8x

85 Jul-09 S&P 500

Aug-09 Commerci al -Focused IT Consulti ng

Sep-09 Government Servi ces

IT Staff Augmentati on

Offshor e Servi ce Pr ovi ders

* TripleTree's IT Services research covers the following segments: Project-Based Consulting, Government Services, Offshore Service Providers, and IT Staff Augmentation. ** For additional information on how this data might apply to your business, please contact Dave Henderson or Kevin Green at 952.253.5300.

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TECHNOLOGY

Ticker Company name

3


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QUARTER

3

2009

WIRELESS/MOBILE INTERNET

TECHNOLOGY

Public valuations continue to make slight gains, with a year-to-date 5% increase in relative performance of the balance of all mobile/ wireless indices. The Mobile/Wireless M&A market experienced a rise from 29 transactions in Q2 to 40 in Q3. The largest disclosed deal of the quarter was Sprint (NYSE: S) acquiring Virgin Mobile (NYSE: VM) for $420M (0.5x TEV/Revenue and 3.8x TEV/EBITDA). AT&T's (NSYE:T) continues to be active with the purchase of mobile widget development software company Plusmo. Third quarter saw numerous transactions in the mobile advertising and marketing space. NAVTEQ/Nokia (HLSE: NOK1) acquired Acuity Mobile whose location-based and interactive marketing solutions will enhance NAVTEQ's digital map navigation. Shutterfly (NASDAQ: SFLY) acquired picture and video sharing application developer Tiny Pictures for $1.3M. Neither transaction disclosed valuation multiples. Since TripleTree's initial forays into this sector over four years ago, innovations in Wireless and Mobile and the adjacent areas within technology have grown markedly. TripleTree is expecting tremendous momentum from the high-tech sector in driving the next wave of innovation in Wireless and Mobile Health (mHealth) and this is discussed in our recent report entitled "Wireless & Mobile Health: Applications, devices, services, and infrastructure converge as patients and providers take responsibility for cost, quality, and access to healthcare." TripleTree has co-founded the Wireless-Life Sciences Alliance (WLSA) to create and promote an ongoing and expanding dialogue around the many opportunities using wireless technologies to advance the delivery of healthcare.

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QUARTER

Wireless/Mobile Internet

($ millions, except share price) (Multiples over 100x have been excluded as not meaningful “NM”)

WIRELESS SOFTWARE & SOLUTIONS DOX Amdocs Ltd. IPAS iPass Inc. OPWV Openwave Systems Inc. PCTI PCTEL, Inc. SY Sybase, Inc. SVR Syniverse Holdings Inc.

Market Cap.

$26.88 $1.38 $2.60 $6.25 $38.90 $17.50

WIRELESS HARDWARE/DEVICE VENDORS VOXX Audiovox Corp. MOT Motorola Inc. PALM Palm, Inc. RIMM Research In Motion Ltd. UTSI UTStarcom, Inc.

$6.85 $8.59 $17.46 $67.63 $2.09

WIRELESS INFRASTRUCTURE ALVR Alvarion Ltd. BRCM Broadcom Corp. CSCO Cisco Systems, Inc. FEIM Frequency Electronics Inc. NVTL Novatel Wireless Inc. QCOM QUALCOMM Inc. SWIR Sierra Wireless Inc.

$4.13 $30.69 $23.54 $4.63 $11.36 $44.98 $9.98

WIRELESS NETWORK OPERATORS CYCL Centennial Communications Corp. LEAP Leap Wireless International Inc. USM United States Cellular Corp.

5,483 86 217 117 3,149 1,203

157 19,717 2,834 0 268

256 15,219 136,360 38 348 74,771 405

$7.98 $19.55 $39.07

887 1,513 3,394

Enterprise Value

LTM Revenue

LTM EBITDA

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

4,504 16 108 49 2,817 1,528

2,980 183 192 66 1,135 485

602 5 5 3 308 184

323 (91) (86) (3) 153 75

1.5x 0.1x 0.6x 0.7x 2.5x 3.1x

7.5x 3.1x 22.1x 14.2x 9.1x 8.3x

17.0x NA NA NA 20.6x 16.0x

Average Median

1.4x 1.1x

10.7x 8.7x

17.9x 17.0

(65) (4,259) (854) 2,033 (289)

0.2x 0.7x 7.6x 0.0x NA

30.8x 16.5x NA 0.0x 0.0x

NA NA NA 0.0x NA

Average Median

2.1x 0.4x

11.8x 8.3x

0.0x 0.0x

(9) (73) 6,134 (10) (7) 1,668 12

0.5x 3.0x 3.1x 0.5x 0.7x 5.9x 0.6x

NM 70.5x 12.2x NA NA 15.1x 21.1x

NA NA 22.2x NA NA 44.8x 32.7x

Average Median

2.0x 0.7x

29.8x 18.1x

33.2x 32.7x

67 (215) 58

2.6x 1.7x 1.0x

6.7x 9.5x 4.2x

13.2x NA 58.7x

Average Median

1.7x 1.7x

6.8x 6.7x

36.0x 36.0x

110 17,341 3,300 0 (7)

124 13,012 111,684 24 223 65,062 317

2,694 3,638 4,183

578 25,484 437 13,194 621

271 4,318 36,117 52 298 11,060 516

1,052 2,200 4,240

4 1,051 (316) 3,363 (170)

0 184 9,153 (2) (0) 4,300 15

404 384 1,005

Source: CapitalIQ WWW.TRIPLE-TREE.COM

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Q3 2009 VALUE TRACKER, PAGE 13

TECHNOLOGY

Market Price 30-Sep-09

Ticker Company name

3

2009

V A L U A T I O N A N A LY S I S F O R T E C H N O L O G Y, H E A LT H C A R E , A N D B U S I N E S S S E R V I C E S


TRIPLE TREE INVESTMENT BANKING

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Q U A R T E R LY V A L U E T R A C K E R

QUARTER

2009

V A L U A T I O N A N A LY S I S F O R T E C H N O L O G Y, H E A LT H C A R E , A N D B U S I N E S S S E R V I C E S

WIRELESS INTEGRATED NETWORK OPERATORS T AT&T, Inc. ELNK EarthLink Inc. S Sprint Nextel Corp. VZ Verizon Communications Inc.

Market Cap.

$27.01 $8.41 $3.95 $30.27

159,359 893 11,360 84,756

Enterprise Value

LTM Revenue

LTM EBITDA

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

229,134 518 27,742 188,634

111,225 832 33,596 102,849

41,570 266 7,080 34,537

11,958 151 (2,925) 6,032

2.1x 0.6x 0.8x 1.8x

5.5x 1.9x 3.9x 5.5x

13.3x 5.9x NA 14.1x

Average Median

1.3x 1.3x

4.2x 4.7x

11.1x 13.3x

Source: CapitalIQ

Mobile/Wireless Relative Performance %

Wireless/Mobile Internet

145 135 125

M&A Activity (07/01/09 - 09/30/09)

115 105

Total # of Transactions # Reporting P/R Multiples Average P/R Median P/R

95 85 75 Jul-09

Aug-09

Sep-09

S&P 500

Wireless Software & Solutions

Wireless In frastructure

Wireless Hardware/Device Vendors

Wireless In tegrated Network Operators

Wireless Network Operators

34 7 2.1x 2.2x

* TripleTree's wireless/mobile research covers the following segments: Wireless Software & Solutions, Wireless Hardware/Device Vendors, Wireless Infrastructure, Wireless Network Operators, and Wireless Integrated Network Operators. ** For additional information on how this data might apply to your business, please contact Kevin Green or Ryan Stewart at 952.253.5300. WWW.TRIPLE-TREE.COM

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Q3 2009 VALUE TRACKER, PAGE 14

TECHNOLOGY

Market Price 30-Sep-09

Ticker Company name

3


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Q U A R T E R LY V A L U E T R A C K E R V A L U A T I O N A N A LY S I S F O R T E C H N O L O G Y, H E A LT H C A R E , A N D B U S I N E S S S E R V I C E S

QUARTER

3

2009

H E A LT H C A R E TripleTree divides its healthcare sector into three major categories - Healthcare IT & Outsourcing, Healthcare Services., and Population Health Management.

H E A LT H C A R E I T & O U T S O U R C I N G Healthcare IT & Outsourcing sector experienced significant market value gains of over 20% in Q3 and performing almost 10% above the S&P 500. With an overall struggling economy, all eyes and ears have been focused on what will happen to the healthcare industry as a result of potential government forces. With President Obama still encouraging significant spend on Healthcare IT, many sector constituents remain bullish on the healthcare market in hopes of a looming financial injection.

Xerox's growth in BPO market, increases customer diversity by adding multiple healthcare clients and boosts its recurring revenue to over 75% of total revenue. Another large transaction this quarter was Dell's (NASDAQ: DELL) acquisition of Perot Systems (NYSE:PER) for $3.9B (1.4x P/R). With over 45% of Perot System's revenues in healthcare, Dell is expanding its offerings and customer base for immediate and long-term growth.

HEALTHCARE

M&A activity in the Healthcare IT & Outsourcing slightly improved in Q3 with 17 completed transactions, up from 13 in Q2. With limited transactions reporting valuation Covidien's (NYSE:COV) acquisition of Aspect Medical Systems (NASDAQ: ASPM), a provider of brain monitoring technology topped the charts at $190M enterprise value (1.9x P/R). With healthcare reform top-of-mind for many, a relatively stable industry in a down economy has led to a few interesting transactions: MedAssurant's acquisition of Catalyst Technologies, a healthcare clinical quality outcomes analysis provider; Salesforce.com's (NYSE:CRM) acquisition of Practice Fusion, a SaaS-based EHR software provider for $10M; and Verisk Health's acquisition of TierMed Systems, a provider of HEDIS software solutions to payers. Finally, a few blockbuster outsourcing transactions occurred toward the end of Q3. Xerox (NYSE:XRX) acquired Affiliated Computer Services (NYSE:ACS) for $6.4B (1.3x P/R). This transaction accelerates

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Market Price 30-Sep-09

Ticker Company name

HEALTHCARE SOFTWARE & OUTSOURCING SOLUTIONS MDRX Allscripts-Misys Healthcare Solutions, Inc. AMCS AMICAS Inc. ATHN Athenahealth, Inc. CERN Cerner Corp. CPSI Computer Programs & Systems Inc. ECLP Eclipsys Corp. HLTH HLTH Corporation HMSY HMS Holdings Corp. MCK McKesson Corp. MDAS MedAssets, Inc. MEDW Mediware Information Systems Inc. MEDQ MedQuist Inc. MRGE Merge Healthcare Incorporated. OMCL Omnicell Inc. QDHC Quadramed Corp. QSII Quality Systems Inc. ZIXI Zix Corp.

$20.27 $3.60 $38.37 $74.80 $41.41 $19.30 $14.61 $38.23 $59.55 $22.57 $7.23 $6.36 $4.11 $11.14 $7.00 $61.57 $2.20

3

Enterprise Value

LTM Revenue

LTM EBITDA

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

2,937 127 1,289 6,062 454 1,090 1,536 1,001 15,849 1,264 56 239 272 353 58 1,759 139

2,894 93 1,204 5,826 431 1,075 1,618 959 15,714 1,515 35 185 267 226 134 1,681 127

621 59 166 1,650 123 519 405 205 106,585 323 41 317 60 231 148 257 29

74 (2) 22 421 27 42 45 56 2,178 87 3 44 30 19 16 76 (5)

34 (37) 30 201 17 86 97 26 876 14 2 (59) 6 5 7 45 (6)

4.7x 1.6x 7.3x 3.5x 3.5x 2.1x 4.0x 4.7x 0.1x 4.7x 0.9x 0.6x 4.4x 1.0x 0.9x 6.5x 4.5x

38.9x NA 54.9x 13.8x 16.0x 25.9x 36.2x 17.0x 7.2x 17.5x 10.7x 4.2x 8.9x 11.9x 8.6x 22.2x NA

87.6x NA 43.5x 30.1x 27.5x 12.7x 15.8x 39.2x 18.1x 91.6x 35.3x NA 48.2x 66.9x 7.9x 38.8x NA

Average Median

3.2x 3.5x

19.6x 16.0x

40.2x 37.1x

Source: CapitalIQ

Health IT & Outsourcing Solutions Relative Performance % 125

Healthcare IT & Outsourcing

120

M&A Activity (07/01/09 - 09/30/09)

115 110

Total # of Transactions # Reporting P/R Multiples Average P/R Median P/R

105 100 95 90 Jul-09

Aug-09 S&P 500

17 2 1.5x 1.5x

Sep-09 Healthcare IT & Outsourcing Solutions

* TripleTree's Healthcare IT & Outsourcing research covers Healthcare Software & Outsourcing Solutions. ** For additional information on how this data might apply to your business, please contact Kevin Green or Scott Tudor at 952.253.5300. WWW.TRIPLE-TREE.COM

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Q3 2009 VALUE TRACKER, PAGE 16

HEALTHCARE

Market Cap.


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3

2009

V A L U A T I O N A N A LY S I S F O R T E C H N O L O G Y, H E A LT H C A R E , A N D B U S I N E S S S E R V I C E S

H E A LT H C A R E S E R V I C E S

Healthcare Services Ticker Company name HEALTH INSURERS AET Aetna Inc. AGP AMERIGROUP Corp. CI CIGNA Corp. CVH Coventry Health Care Inc. HNT Health Net Inc. HUM Humana Inc. UNH Unitedhealth Group, Inc. WLP WellPoint Inc.

All PBMs in TripleTree's PBM index fared very well in Q3, including Medco (NYSE:MHS) up 21%, Express Scripts (Nasdaq: ESRX) up 13% and CVS Caremark (NYSE:CVS) up 12%. While the effects of reform on the PBM sector are unknown, they seem less risky than the potential revamp of the Managed Care industry. The PBMs seem very focused on building (or acquiring) capabilities around specialty pharmacy, disease management, mail distribution, etc., all of which can help lower costs and create value-added programs for their clients. From an M&A perspective, Q3 was not an active one for the Healthcare Services sector with seven announced transactions. The few notable transactions included Aetna (NYSE: AET) announcing its intention to acquire Horizon Behavioral Services, the EAP business of Psychiatric Solutions (Nasdaq:PSYS) for $70M. Also during the quarter Oxford Health Plans announced its intent to acquire Health Net of the Northeast from Health Net (NYSE:HNT) for $180M.

($ millions, except share price) (Multiples over 100x have been excluded as not meaningful “NM”) Market Price 30-Sep-09

Market Cap.

Enterprise Value

LTM Revenue

LTM EBITDA

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

$27.83 $22.17 $28.09 $19.96 $15.40 $37.30 $25.04 $47.36

12,148 1,164 7,660 2,986 1,599 6,328 29,107 22,499

14,774 757 9,213 3,080 1,650 6,580 33,579 29,946

29,793 4,848 17,220 11,742 15,594 29,554 77,392 57,652

2,620 262 1,135 559 390 1,611 7,245 4,171

1,256 166 605 236 116 845 3,489 2,426

0.5x 0.2x 0.5x 0.3x 0.1x 0.2x 0.4x 0.5x

5.6x 2.9x 8.1x 5.5x 4.2x 4.1x 4.6x 7.2x

9.7x 7.0x 12.7x 12.6x 13.8x 7.5x 8.3x 9.3x

Average Median

0.3x 0.3x

5.3x 5.1x

10.1x 9.5x

Source: CapitalIQ

`

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Q3 2009 VALUE TRACKER, PAGE 17

HEALTHCARE

With the greater public markets performing quite well, there were mixed results among TripleTree's Healthcare Services indices. The PBM index was up 15% but the Health Insurers index was up only a mere 1%. The under market performance of the Insurers index really comes as no surprise as there continues to be a great deal of uncertainty on the legislative front as President Obama and Congress are in the middle of health reform discussions. As the individual insurers go, there were a number which had a strong 3rd quarter including CIGNA (NYSE: CI) up 17%, Aetna (NYSE:AET) up 11% and Humana (NYSE: HUM) up 16%. UnitedHealth Group, Inc. (NYSE: UNH) ended the quarter basically flat and H E A LT H C A R E S E R V I C E S WellPoint (NYSE: WLP) lost 7% of its value. Look for Q4 to be similar as there remains much uncertainty around how healthcare reform will affect the industry. There has been a lot of talk about the creation of exchanges and some sort of a national plan which could reset the fundamentals and priorities for the industry. This could increase the importance of insurers building direct-to-consumer distribution capabilities, something that has not traditionally been a strength for this sector.


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Ticker Company name PRESCRIPTION BENEFITS MANAGEMENT BIOS BioScrip Inc. CVS CVS Caremark Corporation ESRX Express Scripts Inc. CHSI Catalyst Health Solutions, Inc. MHS MedcoHealth Solutions Inc.

3

Market Price 30-Sep-09

Market Cap.

Enterprise Value

LTM Revenue

LTM EBITDA

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

$6.76 $35.74 $77.58 $29.15 $55.31

262 51,581 21,289 1,282 26,203

295 61,393 20,518 1,163 28,663

1,380 93,271 21,883 2,761 55,285

22 7,595 1,488 99 2,599

(68) 3,314 816 57 1,173

0.2x 0.7x 0.9x 0.4x 0.5x

13.5x 8.1x 13.8x 11.7x 11.0x

NA 15.6x 26.1x 22.6x 22.3x

Average Median

0.5x 0.5x

11.6x 11.7x

21.6x 22.5x

Source: CapitalIQ

HEALTHCARE

Healthcare Services Relative Performance % 120

115

Healthcare Services

110

M&A Activity (07/01/09 - 09/30/09)

105

Total # of Transactions # Reporting P/R Multiples Average P/R Median P/R

100

95

90 Jul-09

Aug-09 S&P 50 0

7 0 -

Sep-09 PBMs

Health Insurers

* TripleTree's Healthcare Services research covers the following segments: Health Insurers and Prescription Benefit Management, ** For additional information on how this data might apply to your business, please contact Scott Tudor or Kevin Green at 952.253.5300.

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Q3 2009 VALUE TRACKER, PAGE 18


TRIPLE TREE INVESTMENT BANKING

KNOWLEDGE. VISION. RESULTS.

Q U A R T E R LY V A L U E T R A C K E R V A L U A T I O N A N A LY S I S F O R T E C H N O L O G Y, H E A LT H C A R E , A N D B U S I N E S S S E R V I C E S

QUARTER

3

2009

POPULATION HEALTH MANAGEMENT After a tough end to 2008 and a challenging opening quarter to 2009, the S&P 500 saw an uptick of 13% in Q2, followed with a 14% gain in Q3. Many believe we are starting to crawl our way out of a recession that has plagued the overall markets for the past year or so. With the overall economy faring well, TripleTree's Population Health Management index also increased its value in the quarter, but not as much as the S&P 500 as it finished up 8% from Q2.

The other notable transaction of the quarter was Aetna (NYSE: AET) announcing its intention to acquire Horizon Behavioral Services, the EAP business of Psychiatric Solutions (NasdaqGS:PSYS) for $70M. In the first six months of 2009 the EAP business recorded $22.6M of revenue which extrapolates to ~$45M of revenue for 2009 and a TEV/Revenue multiple of 1.6x. "We believe this acquisition will significantly enhance Aetna's ability to provide a greater variety of EAP services to our customers and will position Aetna as a key player in the domestic EAP business," said Louise Murphy, Vice President and Head of Behavioral Health for Aetna.

From an M&A perspective, Q3 2009 was slow with a total of four announced or closed transactions. An interesting transaction was Inverness, the acquisition machine, acquired Free & Clear for $100M cash with a potential earn-out of $30M. Free & Clear's roots and the majority of its business are smoking cessation programs and just recently expanded service offerings to include programs for obesity, stress, nutrition, and WWW.TRIPLE-TREE.COM

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Q3 2009 VALUE TRACKER, PAGE 19

HEALTHCARE

A big driver for the increase in value in the Population Health Management index was Healthways (NASDAQ:HWAY), which continued to bounce back from a difficult 2008. Healthways saw a 53% increase in Q2 and followed that up with a 14% increase in value in Q3. Inverness Medical Innovations (NYSE:IMA) continued its strong market performance as it gained 9% closing out the quarter trading just shy of $39 per share, up from a 52 week low of ~$12. Another large player in the sector, WebMD (NASDAQ:WBMD), saw its value increase 11%. The other companies in our index include Adam Inc. (NASDAQ:ADAM) up 21%, American Medical Alert Corp. (NASDAQ:AMAC) up 5%, Health Grades (NASDAQ:HGRD) up 27%, Health Fitness Corp. (AMEX: FIT) down 10%, and Magellan (NASDAQ:MGLN) down 5%.

fitness. This transaction represents the fourth for Inverness within the PHM space as it has also acquired Alere, ParadigmHealth, and Matria. In 2008, Free & Clear had revenues of $47.1M which equates to a 2.1x TEV/Revenue multiple with the full earn-out netting a 2.7x multiple.


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Population Health Management

($ millions, except share price) (Multiples over 100x have been excluded as not meaningful “NM”)

Market Price 30-Sep-09

Ticker Company name POPULATION HEALTH MANAGEMENT ADAM ADAM Inc. AMAC American Medical Alert Corp. HGRD Health Grades Inc. FIT Health Fitness Corp. HWAY Healthways Inc. IMA Inverness Medical Innovations Inc. MGLN Magellan Health Services Inc. WBMD WebMD Health Corp.

3

2009

V A L U A T I O N A N A LY S I S F O R T E C H N O L O G Y, H E A LT H C A R E , A N D B U S I N E S S S E R V I C E S

Market Cap.

$3.48 $5.89 $4.95 $5.59 $15.32 $38.73 $31.06 $33.12

34 56 147 57 517 3,116 1,096 1,936

Enterprise Value

41 55 133 52 811 5,276 810 1,689

LTM Revenue

LTM EBITDA

28 39 46 78 721 1,802 2,574 405

5 8 10 7 101 401 161 71

Source: Capital IQ

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

(15) 2 6 3 (30) 24 79 49

1.5x 1.4x 2.9x 0.7x 1.1x 2.9x 0.3x 4.2x

8.5x 6.6x 13.8x 7.3x 8.1x 13.2x 5.0x 23.9x

NA 29.4x 25.9x 16.7x NA NM 13.9x 39.8x

Average Median

1.9x 1.4x

10.8x 8.3x

25.1x 25.9x

HEALTHCARE

P opulat ion Health Management Relative Performance % 120

Population Health Management

115

M&A Activity (07/01/09 - 09/30/09)

110 105

Total # of Transactions # Reporting P/R Multiples Average P/R Median P/R

100 95 90

4 3 1.6x 1.6x

85 Jul-09

Aug-09

Sep-09

S&P 500

Population Health Management

*

TripleTree's Population Health Management research covers the following segments: Disease Management, Health & Productivity Management, Behavioral Healthcare, Onsite Occupational Retail Healthcare, and Online Health Content & Services. ** For additional information on how this data might apply to your business, please contact Peter Erickson at 952.253.5300.

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Q3 2009 VALUE TRACKER, PAGE 20


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QUARTER

3

2009

V A L U A T I O N A N A LY S I S F O R T E C H N O L O G Y, H E A LT H C A R E , A N D B U S I N E S S S E R V I C E S

BUSINESS SERVICES TripleTree’s Business Services sector contains two major sub-sectors - Human Capital and Outsourcing

HUMAN CAPITAL MANAGEMENT TripleTree's Human Capital Management sector maintained a steady climb upward in the third quarter. The Staffing, HR Technology and HR Consulting sectors all out-paced the S&P 500 and improved month-over-month resulting in an average increase of 25% from June 30th. HR Technology ended Q3 up over 30%, leading the Human Capital Management sector. A few large transactions were consummated this quarter, but HR Technology saw the greatest investments. Axel Springer (DB:SPR) acquired StepStone (OB:STP), HR management software provider for $184M (0.9x P/R) in the HR Technology sector. SaaS-based businesses saw many transactions this quarter including Salary.com's (NASDAQ:SLRY) purchase of Makana Solutions, a SaaS sales compensation management software startup; Taleo Corp's (NASDAQ: TLEO) acquisition of Worldwide Compensation, a compensation management SaaS provider; OpenPortal Software's acquisition of TriviumSoft, a SaaS-based employee management software provider; and Replicon's acquisition of MySchedule.net, an employee scheduling SaaS provider. Overall the sector saw Human Capital Management

HR OUTSOURCING ADP Automatic Data Processing, Inc. FADV First Advantage Corporation HEW Hewitt Associates Inc. PAYX Paychex Inc.

While the United States saw an unemployment rate of 9.5% in Q3, the Staffing sector was up around 25%. In these slow times, businesses rely on temporary employees allowing staffing companies to help employers find great workers and taking care of the extensive logistics. As a result, many companies were acquisitive, including Adecco SA (SWX: ADEN), which acquired Spring Group (LSE: SRG), an IT staffing services provider for $179M (0.1x P/R) and American CyberSystems which acquired SURVIS Group, an IT staffing services provider. TripleTree's HR Consulting and HR Outsourcing sectors both improved slightly this quarter with HR Consulting valuation climbing from 6.9x in Q2 to 8.0x TEV/EBITDA. The HR Outsourcing sector also saw increases with all the companies improving their valuations. Overall this market has seen steady improvements since the start of 2009 and with a quiet M&A quarter, a burst of transactions is quite possible for Q4.

($ millions, except share price) (Multiples over 100x have been excluded as not meaningful “NM”)

Market Price Market 30-Sep-09 Cap.

$39.30 $18.55 $36.43 $29.05

19,735 1,109 3,361 10,498

Enterprise Value

LTM Revenue

LTM EBITDA

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

18,214 1,131 3,450 10,169

8,257 711 3,053 1,984

2,206 123 595 860

1,333 33 232 508

2.2x 1.6x 1.1x 5.1x

8.3x 9.2x 5.8x 11.8x

14.8x 33.9x 14.5x 20.6x

Average Median

2.5x 1.9x

8.8x 8.7x

20.9x 17.7x

Source: CapitalIQ WWW.TRIPLE-TREE.COM

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Q3 2009 VALUE TRACKER, PAGE 21

BUSINESS SERVICES

Ticker Company name

limited blockbuster acquisitions but maintained a steady flow of transactions over the quarter.


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QUARTER

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V A L U A T I O N A N A LY S I S F O R T E C H N O L O G Y, H E A LT H C A R E , A N D B U S I N E S S S E R V I C E S

Ticker Company name HR CONSULTING MMC Marsh & McLennan Companies, Inc. WW Watson Wyatt Worldwide, Inc.

HR TECHNOLOGIES CALD Callidus Software Inc. MWW Monster Worldwide, Inc. SABA Saba Software Inc. ULTI Ultimate Software Group Inc. WSTM Workstream Inc.

STAFFING ASF HSII KFRC KFY MAN RHI SFN

Market Price 30-Sep-09

Market Cap.

Enterprise Value

$24.73 $43.56

12,954 1,859

15,293 1,649

$3.01 $17.48 $4.21 $28.72 $0.30

Administaff Inc. Heidrick & Struggles International Inc. Kforce Inc. Korn/Ferry International Manpower Inc. Robert Half International Inc. Spherion Corp.

90 2,201 117 707 17

$26.27 $23.26 $12.02 $14.59 $56.71 $25.02 $6.21

671 396 461 666 4,445 3,800 320

51 2,047 96 679 36

489 331 489 474 4,212 3,416 320

3

LTM Revenue

LTM EBITDA

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

10,768 1,676

1,562 264

55 146

1.4x 1.0x

9.8x 6.2x

NM 12.7x

Average Median

1.2x 1.2x

8.0x 8.0x

12.7x 12.7x

(12) 60 1 (3) (5)

0.5x 1.9x 0.9x 3.6x 1.7x

NA 11.5x 10.1x NM NA

NA 36.9x NM NA NA

Average Median

1.7x 1.7x

10.8x 10.8x

36.9x 36.9x

35 (15) (93) (40) 58 119 (129)

0.3x 0.7x 0.5x 0.9x 0.2x 0.9x 0.2x

7.0x 16.0x 10.9x 17.8x 8.3x 12.1x 9.3x

19.1x NA NA NA 77.2x 31.9x NA

Average Median

0.5x 0.5x

12.0x 10.9x

48.1x 48.1x

104 1,100 103 190 22

1,714 476 949 549 17,705 3,723 1,885

(5) 179 10 7 (2)

69 21 45 27 506 281 34

Source: CapitalIQ

Human Capital Management Relative Performance % 140

Human Capital Management

130

110

Total # of Transactions # Reporting P/R Multiples Average P/R Median P/R

100

90

80 Jul-09

Aug-09 S&P 500

Staffing

28 2 0.8x 0.8x

Sep-09 HR Technologies

HR Consulting

HR Outsourcing

* TripleTree's Human Capital Management research covers the following segments: HR Outsourcing, HR Consulting, HR Technologies, and Staffing. ** For additional information on how this data might apply to your business, please contact Peter Erickson at 952.253.5300. WWW.TRIPLE-TREE.COM

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Q3 2009 VALUE TRACKER, PAGE 22

BUSINESS SERVICES

M&A Activity (07/01/09 - 09/30/09)

120


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2009

V A L U A T I O N A N A LY S I S F O R T E C H N O L O G Y, H E A LT H C A R E , A N D B U S I N E S S S E R V I C E S

OUTSOURCING TripleTree's Outsourcing Index continued to follow the overall market in the third quarter. All components of the index, Managed Services, Platform IT Outsourcing, and BPO were up after starting off down nearly 5% in the opening weeks of Q3. The Managed Services and Platform IT Outsourcing indexes both outperformed the market (S&P 500). However, the BPO index lagged behind the S&P 500. The Platform IT Outsourcing index observed a strong rally in mid-September driven by Dell's (NYSE:DELL) announced acquisition of Perot (NYSE:PER) for $3.9B in cash.

(NYSE:XRX) acquisition of Affiliated Computer Service (NYSE:ACS) for $6.4B, a total enterprise value of $8.7B (1.3x TEV/Revenue or 8.0x TEV/EBITDA). Through this acquisition Xerox expands its footprint beyond document management and will be better able to compete in the broader technology market.

Overall Outsourcing and Managed Services M&A activity increased in Q3 as companies look to make opportunist moves while values are still suppressed. As a result, the majority of M&A transactions continue to exhibit weak M&A metrics. In the third quarter reported TEV/REV multiples ranged from 0.1x to 3.3x. One of the most notable and largest M&A transaction was Xerox's Outsourcing

($ millions, except share price) (Multiples over 100x have been excluded as not meaningful “NM”)

Ticker Company name

$39.30 $9.94 $44.80 $29.14 $48.20 $2.06 $6.17 $29.05 $19.68 $16.11

Market Cap.

19,735 1,221 2,228 3,683 7,441 3,304 185 10,498 3,760 3,176

WWW.TRIPLE-TREE.COM

Enterprise Value

18,214 1,493 3,300 4,785 11,012 4,030 320 10,169 3,646 3,067

LTM Revenue

8,257 2,757 1,618 1,839 4,217 6,079 152 1,984 1,085 1,472

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LTM EBITDA

2,206 149 445 613 1,236 549 26 860 423 452

LTM Net Income

EV/ Revenue

EV/ EBITDA

Price/ Earnings

1,333 (202) 243 250 383 90 6 508 120 230

2.2x 0.5x 2.0x 2.6x 2.6x 0.7x 2.1x 5.1x 3.4x 2.1x

8.3x 10.0x 7.4x 7.8x 8.9x 7.3x 12.2x 11.8x 8.6x 6.8x

14.8x NA 9.2x 14.7x 19.4x 36.7x 33.7x 20.6x 31.4x 13.8x

Average Median

2.2x 2.1x

8.7x 8.3x

20.9x 17.3x

Q3 2009 VALUE TRACKER, PAGE 23

BUSINESS SERVICES

BUSINESS PROCESS OUTSOURCING ADP Automatic Data Processing, Inc. CVG Convergys Corporation DST DST Systems Inc. EFX Equifax Inc. FISV Fiserv Inc. LOG Logica PLC ORCC Online Resources Corp. PAYX Paychex Inc. SEIC SEI Investments Co. TSS Total System Services, Inc.

Market Price 30-Sep-09


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Ticker Company name PLATFORM IT OUTSOURCING GIB.A CGI Group, Inc. CSC Computer Sciences Corporation PER Perot Systems Corp.

MANAGED SERVICES EQIX Equinix Inc. INAP Internap Network Services Corp. NAVI NaviSite Inc. TSX:PIX Peer 1 Network Enterprises, Inc. SVVS SAVVIS Inc. SDXC Switch & Data Facilities Co., Inc. TMRK Terremark Worldwide, Inc.

3

2009

V A L U A T I O N A N A LY S I S F O R T E C H N O L O G Y, H E A LT H C A R E , A N D B U S I N E S S S E R V I C E S

Market Price 30-Sep-09

Market Cap.

Enterprise Value

LTM Revenue

LTM EBITDA

LTM Net Income

EV/ Revenue

$12.19 $52.71 $29.70

3,698 7,996 3,603

3,733 10,407 3,453

3,722 16,201 2,643

592 2,419 278

299 1,125 118

1.0x 0.6x 1.3x

6.3x 4.3x 12.4x

12.4x 7.1x 30.5x

Average Median

1.0x 1.0x

7.7x 6.3x

16.7x 12.4x

160 (170) (8) 6 3 (9) (28)

5.6x 0.5x 1.5x 1.4x 1.5x 3.5x 2.7x

14.7x 4.4x 7.9x 5.0x 6.6x 12.6x 12.6x

22.2x NA NA 22.1x NM NA NA

Average Median

2.4x 1.5x

9.1x 7.9x

22.2x 22.2x

$92.00 $3.21 $2.19 $1.06 $15.82 $13.61 $6.22

3,552 163 78 126 859 471 402

4,423 132 230 126 1,280 649 706

787 258 155 92 882 186 260

Source: Capital IQ

300 30 29 25 195 51 56

EV/ EBITDA

Price/ Earnings

Outsourcing Index Relative Performance %

Outsourcing

1 45 1 35

M&A Activity (07/01/09 - 09/30/09)

1 25

1 05

95 85 Jul-0 9

Aug-09 S&P 50 0

25 5 1.3x 1.3x

Se p-09

Mana ged Services

Platform IT Outs ourcing

BPO

* TripleTree's outsourcing research covers the following segments: Business Process Outsourcing, Managed IT Services, and Platform IT Outsourcing. ** For additional information on how this data might apply to your business, please contact Dave Henderson or Scott Tudor at 952.253.5300. WWW.TRIPLE-TREE.COM

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Q3 2009 VALUE TRACKER, PAGE 24

BUSINESS SERVICES

Total # of Transactions # Reporting P/R Multiples Average P/R Median P/R

1 15


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2009

V A L U A T I O N A N A LY S I S F O R T E C H N O L O G Y, H E A LT H C A R E , A N D B U S I N E S S S E R V I C E S

TripleTree, LLC is an independent, middle market investment banking firm focused on mergers and acquisitions, financial restructuring, principal investing, and strategic advisory services for healthcare and technology companies. The firm specializes in growth businesses, vertical industry specialization, and disruptive technology delivery models. For over a decade, TripleTree Research has been a cornerstone of our investment banking model. Copyright Š 2009 by TripleTree, LLC. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, without permission in writing to TripleTree, LLC. The information contained herein has been obtained from sources believed to be reliable, but the accuracy and completeness of the information, and that of the opinions based thereon, are not guaranteed. TripleTree, LLC may perform or seek to perform investment banking services for any company referenced in this document.

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Q3 2009 VALUE TRACKER, PAGE 25

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