Information Services Group, Inc. · NASDAQ:III
Information Services — Merger or Acquisition (December 2016)
17 slides from Information Services's merger presentation, Dec 2, 2016
Slide 1: Forward-looking statements
This communication contains “forward-looking statements” which represent the current expectations and beliefs of management of ISG concerning the acquisition of Alsbridge Holdings, Inc. (“Alsbridge”) and other future events and their potential effects on ISG and Alsbridge. Statements contained herei
Slide 2: A Highly Compelling Combination
Leader in Sourcing Research and Advisory is acquiring a highly complementary, scale player ISG knows the Alsbridge DNA: its business culture and values, its employees and its clients; knowledge that de-risks the integration Complementary fit across multiple dimensions: service lines, clients and geo
Slide 3: ISG Combines with a U.S. Leader in Sourcing Advisory
Combination strengthens ISG’s leading position in the industry, increases U.S. client base “New” ISG: Combined capabilities highly differentiated vs. rivals (Big 4, Gartner and others) Substantial cost synergies to be realized SG&A, overlapping expenses, costs to manage Reduces start-up costs associ
Slide 4: ISG Knows Alsbridge
ISG knows Alsbridge and its people Original heritage of both firms in outsourcing advisory; TPI (now integrated into ISG) was formed in 1989 and is regarded as the founder of the sourcing advisory industry; Alsbridge was founded in 2003 Shared culture and values: integrity, client-first approach, en
Slide 5: Highly Complementary Fit: Service Lines, Clients, Geographies
Service Lines Adds two new revenue areas to ISG – Network Services and Robotic Process Automation (RPA) Two additional areas build on ISG’s presence in Outsourcing Advisory and Provider Services Enhances subscription-based recurring revenue stream opportunities - software and analytics Clients ISG w
Slide 6: Highly Complementary Fit: Alsbridge Service Lines
Highly Complementary Fit: Alsbridge Service Lines Robotic Process Automation (RPA) Outsourcing Advisory Provider Services Provides services that help CIO and CXO clients manage more than $1.5 billion in annual spend with carriers, with an average savings per client of more than 20%; success fee mode
Slide 7: Highly Complementary Fit: Clients
ISG Alsbridge Opportunity Enterprise & Government Cross-selling opportunities Digital, cloud and automation solutions Service & Technology Providers Access to world’s largest sourcing database Research for informed opinion on markets, tech Highly Complementary Fit: Clients Serving 700 clients, provi
Slide 8: 'New' ISG: Geographies
‘New’ ISG: Geographies Revenue % Employees Americas 60% Europe 31% Asia Pacific 9% Americas 550 Europe 300 Asia Pacific 450 The ‘New’ ISG The ‘New’ ISG Asia Pacific 11% Americas 53% Europe 36% Asia Pacific 400 Americas 400 Europe 300 ISG Before ISG Before
Slide 9: Redefines sourcing advisory and research space for the digital age
Redefines sourcing advisory and research space for the digital age Creates a new leader in technology research and digital advisory services; adds RPA Enables ‘new’ ISG to accelerate growth in the highest-demand, fastest-growing area of sourcing advisory industry: digital transformation services Str
Slide 10: A Stronger ISG: 2017 Preliminary Outlook
2016 ISG LTM vs. 2017 “New” ISG Outlook ($ in millions) A Stronger ISG Transformational acquisition delivering Revenue scale Significant gains in Adjusted EBITDA in 2017 and beyond Additional recurring revenue opportunities Revenues from $216 to $285-$300 million Adjusted EBITDA from $23 to $36-$38
Slide 11: The 'New' ISG: 2017 Bridge to Preliminary Outlook
Forecast $216 $62 $278 The ‘New’ ISG: 2017 Bridge to Preliminary Outlook Adjusted EBITDA 2016 2017 2016 2017 ($in millions) ($5) $273 Revenue $12 - $27 $285 - $300 $23 $7 $30 $36 - $38 Consensus Est. Forecast Consensus Est. Leakage Base Organic Growth ‘New’ ISG Combined Leakage Base Organic Growth +
Slide 12: Robust Synergy Opportunities
2017- 2018 Outlook Drivers Within 18 months: 13% cost takeout 1. SG&A Consolidation right-size back office eliminate duplication expand India leverage 2. Cost-to-Manage reduced 3. Non-personnel expense reduced duplicate marketing, licenses, real estate 4. Revenue Synergies not included, would be ups
Slide 13: Total consideration is $74 million comprised of cash and stock
Total consideration is $74 million comprised of cash and stock $56 million in cash, 3.2 million common shares, and a $7 million seller’s note (2% interest, due September 2018) Synergized EBITDA multiple: 5.3x(1) Q4 charge of approximately $6 million (severance, fees, etc.) A significant portion of A
Slide 14: Valuation Multiples for Subscription & Consulting Peer Group
Valuation Multiples for Subscription & Consulting Peer Group Includes Advisory Board Co. (ABCO), Corporate Executive Board (CEB), Forrester (FORR), Gartner (IT), Information Services Group (III), Booz Allen (BAH), FTI Consulting (FCN), Hackett (HCKT) and Huron (HURN). Source: FactSet Note: As of 11/
Slide 15: The 'New' ISG
A transformational combination creates a “new,” stronger ISG with greater industry leadership Expect a material impact on 2017 financials Preliminary 2017 guidance: EBITDA up 60%; Revenue up 35% Recurring revenue expansion opportunities increase with subscriptions and software licenses Portfolio of
Slide 16: About ISG (Information Services Group)
ISG (Information Services Group) (NASDAQ: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including 75 of the top 100 enterprises in the world, ISG is committed to helping corporations, public sector organizations, and service and
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