Quarterly Market Insights

2021: Second Quarter

Introduction:

▪ Genesis Capital is pleased to present our

Quarterly Market Insights Report for the Second

Quarter of 2021.

▪ We hope you find this report helpful and

encourage you to contact us directly if you would

like to discuss our perspective on current industry

trends and M&A opportunities.

Table of Contents:

▪ Genesis Capital Overview

➢ Overview of Genesis Capital

➢ Representative and Recent Transaction Experience

▪ Market Insights

➢ Capital Markets Overview

➢ Public Market Valuation

➢ U.S. M&A Market Overview

➢ U.S. M&A Trends by Industry

Inside This Report

Member FINRA / SIPC

1

Market

Insights

Member FINRA / SIPC

Market

Insights

Overview of Genesis CapitalIndependent Investment and Merchant Bank

2

▪ Focused on “Need” not Size

▪ Expertise with Public Corporations

▪ Deep Experience with Family Businesses

▪ Solution Focused vs Product Oriented

▪ Extensive Sell-Side and Buy-Side M&A Experience

▪ National Client Base

▪ Active Cross Border Practice with International Operations

and Buyers

▪ Proven Track Record and Strong References

An Independent Firm Focused On Families & Companies in Growth Sectors of the Economy

Providing a Full Suite of Investment Banking Services Mergers, Acquisitions & Sales

➢ Sell-Side

➢ Buy-Side Acquisition Programs

➢ Management Buyouts

➢ Restructurings

➢ Corporate Divestitures

Financial Advisory Services

➢ Strategic Alternatives Review

➢ Capital and Strategic Planning

➢ Strategic Investments & Joint Ventures

➢ Fairness and Valuation Opinions

➢ Committee Representation

Capitalizations

➢ Recapitalizations

➢ Private Placements

➢ Private Investment in Public Equity (PIPE)

➢ Employee Stock Ownership Plans (ESOP)

Member FINRA / SIPC

Market

Insights

Genesis Capital Track RecordDeep Expertise Across Several Industries

3

and the waste services

division of

(NYSE:WRK)

has acquired

Technology,

Media, Telecom

has been acquired by

a subsidiary of

has been acquired by

a portfolio company of

has received a majority

investment from

Consumer

has acquired

(NYSE: SPB)

has been acquired by

(Nasdaq: PLKI)

(NYSE/TSX: QSR)

has formed a partnership

with and received a majority

investment from

has entered into a long term

agreement with

(NYSE: LYV)

to operate

Leisure &

Entertainment

has acquired

(NASDAQ: SSB)

has been acquired by

Business

Services

has been acquired by

(NYSE:TBI)

has been acquired by

(NYSE: TBI)

a wholly-owned

subsidiary ofand

have been restructured and

rebranded as

Healthcare

has partnered with

a portfolio company of

has been acquired by has acquired

Industrial

(NYSE:KOP)

has been acquired by

has received an investment

from

Member FINRA / SIPC

Market

Insights

$10,839

$18,783

$21,679

$35,079

$50,718

$47,780

93

106

126

114

153 151

0

45

90

135

180

225

270

$0

$12,000

$24,000

$36,000

$48,000

$60,000

2016 2017 2018 2019 2020 YTD 2021

Gross IPO Proceeds IPO Count (#)

$1,549 $5,792

$9,111 $12,042

$75,793

$110,143

8 24

43

59

249

358

0

55

110

165

220

275

330

385

$0

$15,000

$30,000

$45,000

$60,000

$75,000

$90,000

$105,000

$120,000

2016 2017 2018 2019 2020 YTD 2021

Gross SPAC Proceeds SPAC IPO Count (#)

Gro

ss P

roceed

s($

in

Mil

lio

ns

)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Aug-16 Aug-17 Aug-18 Aug-19 Aug-20 Aug-21

Fed Funds Target Rate LIBOR (3 Month) 10 Year Treasury Note

(20.0%)

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

140.0%

160.0%

180.0%

200.0%

220.0%

Aug-16 Aug-17 Aug-18 Aug-19 Aug-20 Aug-21

Dow Jones Industrial Average (^DJI) S&P 500 (^SPX) NASDAQ (^COMP)

Capital Markets Overview

4

Source: S&P Capital IQ, Mergermarket, Preqin, Pitchbook, SPAC Research.

Public Equity Market Indices (1)

Perc

en

tag

e C

ha

ng

e

Interest Rates (1)

Perc

en

tag

e

Notes:

1. Indexed relative to August 2, 2016.

2. YTD as of June 30, 2021.

IPO ActivitySPAC Activity

Gro

ss P

roceed

s($

in

Mil

lio

ns

)

SP

AC

IPO

Vo

lum

e (#

in A

ctu

als

)

(2)

IPO

Vo

lum

e (#

in A

ctu

als

)

Commentary

(2)

▪ On August 2, 2021 the S&P 500

Index closed at 4,387.16, 16.8%

higher than the beginning of the

year, and 36.3% higher than its

average closing price throughout

2020.

▪ The 10-year Treasury Note yield

was 1.20% on August 2, 2021,

27 basis points higher than its

yield of 0.93% at the beginning of

the year, and 31 basis points

above its average closing yield of

0.89% in 2020.

▪ The value of special purpose

acquisition company (SPAC)

gross proceeds in the year to

date (YTD) period ended June

30, 2021 was $110.1 billion.

Gross SPAC proceeds totaled

$75.8 billion in full year 2020.

▪ The value of initial public

offerings (IPO) gross proceeds in

the YTD period ended June 30,

2021 was $47.8 billion, across

151 offerings.

Member FINRA / SIPC

Market

Insights

10.4x11.6x

15.8x

11.0x

16.4x18.8x

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

BusinessServices

Consumer Healthcare Industrial /Manufacturing

Leisure &Entertainment

Technology /Media / Telecom

Q4 '17 Q4 '18 Q4 '19 Q4 '20 Current

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

18.0x

20.0x

Q2 '11 Q2 '12 Q2 '13 Q2 '14 Q2 '15 Q2 '16 Q2 '17 Q2' 18 Q2' 19 Q2 '20 Q2 '21

Mid-Quarter Public Trading EBITDA Multiples (S&P 500)

Public Trading EBITDA Multiples by Select Sector

▪ Since Q3 2011, EBITDA

multiples have increased,

experiencing record highs

through the end of 2017 and into

2018, 2019, 2020 and 2021.

Public Market Valuation

5

▪ Top sectors by EV / EBITDA

valuation:

➢ Technology / Media /

Telecom: 18.8x

➢ Leisure & Entertainment: 16.4x

➢ Healthcare: 15.8x

➢ Consumer: 11.6x

➢ Industrial / Manufacturing: 11.0x

➢ Business Services: 10.4x

EV

/ E

BIT

DA

Low: 7.5x

Q3 2011

EV

/ E

BIT

DA

Commentary

Commentary

10-Yr. Avg. Multiple: 11.3x Current: 16.8x

Source: S&P Capital IQ.Note: Current as of August 2, 2021.

Member FINRA / SIPC

Market

Insights

Private Equity Dry Powder

U.S. M&A Market Overview

6

Source: S&P Capital IQ, Mergermarket, Preqin, Pitchbook.

Notes:

1. U.S. M&A Activity includes closed deals with U.S. targets only; excludes real estate transactions.

2. YTD as of June 30 of 2020 and 2021, respectively.

3. LTM as of June 30, 2021; four quarter rolling median.

Commentary

▪ The value of M&A transactions completed in the

U.S.(1) in the YTD period ended June 30, 2021 was

$661.4 billion, an increase of 30.2% from the

comparable period in 2020. Further, the number of

M&A transactions completed in the U.S. in YTD

through June 30, 2021 increased by 29.8% from the

comparable period in 2020.

▪ The median TEV / EBITDA multiple for U.S. M&A

transactions for LTM ended June 30, 2021

increased to 13.0x.

▪ The median Total Debt / EBITDA multiple for U.S.

M&A transactions for LTM ended June 30, 2021

increased to 6.6x.

U.S. M&A Activity (1)

U.S. M&A Multiples

Dry

Po

wd

er

($ i

n B

illi

on

s)

(3)

Deal

Valu

e (

$ i

n B

illi

on

s)

Deal V

olu

me (#

in A

ctu

als

)

(2)(2)

Member FINRA / SIPC

Market

Insights

7.4x

8.8x

10.2x

7.7x

5.2x

9.8x

1,722

1,704 2,061

1,959 853

1,143

-

1,000

2,000

3,000

4,000

5,000

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

18.0x

2017 2018 2019 2020 YTD2020

YTD2021

12.4x13.1x 12.9x

14.5x

11.9x10.9x

1,251 1,163 1,360 1,333

547 828

-

1,000

2,000

3,000

4,000

5,000

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

18.0x

2017 2018 2019 2020 YTD2020

YTD2021

7.1x

10.0x

11.7x

13.8x14.9x

8.9x

1,575

1,508 1,754 1,652

682 1,002

-

1,000

2,000

3,000

4,000

5,000

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

18.0x

2017 2018 2019 2020 YTD2020

YTD2021

8.1x9.2x

8.6x

7.2x

9.0x 9.4x

1,330 1,383 1,475 1,337

566 759

-

1,000

2,000

3,000

4,000

5,000

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

18.0x

2017 2018 2019 2020 YTD2020

YTD2021

Deal V

olu

me (#

in A

ctu

als

)

TE

V /

EB

ITD

A

Deal V

olu

me (#

in A

ctu

als

)

TE

V /

EB

ITD

A

U.S. M&A Trends by Industry

7

Healthcare Industrial / Manufacturing

Business Services Consumer

TE

V /

EB

ITD

A

Deal V

olu

me (#

in A

ctu

als

)

TE

V /

EB

ITD

A

Deal V

olu

me (#

in A

ctu

als

)

Source: S&P Capital IQ.Note: YTD as of June 30 of 2020 & 2021, respectively.

Member FINRA / SIPC

Market

Insights

9.8x11.1x 11.6x

15.0x

8.6x

20.2x

356 340 395 261 115 170

-

1,000

2,000

3,000

4,000

5,000

0.0x

3.0x

6.0x

9.0x

12.0x

15.0x

18.0x

21.0x

24.0x

27.0x

2017 2018 2019 2020 YTD2020

YTD2021

U.S. M&A Trends by Industry (Continued)

8

Leisure & Entertainment Technology / Media / Telecom

Source: S&P Capital IQ.Note: YTD as of June 30 of 2020 & 2021, respectively.

16.0x16.9x

16.0x

14.4x

9.9x

12.1x

1,836 1,866 1,953 1,810

772 1,125

-

1,000

2,000

3,000

4,000

5,000

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

18.0x

2017 2018 2019 2020 YTD2020

YTD2021

Deal V

olu

me (#

in A

ctu

als

)

TE

V /

EB

ITD

A

TE

V /

EB

ITD

A

Deal V

olu

me (#

in A

ctu

als

)

Member FINRA / SIPC

Market

Insights

Definitions & Disclosure

9

Disclosure:The information contained in this report has been compiled from publicly available sources; it is not a research report and is provided for informational

purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any

particular trading strategy. The information contained herein is believed by Genesis Capital to be reliable, but Genesis Capital makes no representation as to

the accuracy or completeness of such information. Genesis Capital may act as advisers to, have positions in and effect transactions in securities of

companies mentioned herein and also may provide, may have provided, or may seek to provide services for those companies. In addition, Genesis Capital

or their respective officers, directors and employees may hold positions in the securities, options thereon or other related financial products of companies

discussed herein. This is provided as informational only and is not a solicitation for investment in any security whatsoever. Any investment by any investors

must be made using their own investment decisions and criteria using their own independent financial advisors. Also, past performance is not necessarily

indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Genesis Capital’s prior

written consent. Sources of information include but are not limited to, Mergermarket, Pitchbook, Preqin, and S&P Capital IQ.

▪ Last Twelve Months (LTM) — Timeframe of the immediately preceding 12 months.

▪ Year to Date (YTD) — Period of time beginning the first day of the current calendar year or fiscal year up to the current date.

▪ Total Enterprise Value (TEV) — Equity Value (fully-diluted shares outstanding x current market share price) + market value of debt + minority interest -

cash and equivalents.

➢ TEV may include payments to seller(s) in cash or stock, the present value of notes or similar instruments, net long-term debt assumed by a buyer,

and appropriate adjustments for other assets retained by a seller or liabilities assumed by a buyer.

▪ Total Debt — Short-Term Debt (interest-bearing liabilities due in 12 months or less, including, but not limited to, short-term bank loans and lease

payments) + Long-Term Debt (interest-bearing liabilities with a maturity date longer than 12 months, including, but not limited to, bonds, lease payments,

term loans, revolving lines of credit, and notes payable).

▪ EBITDA — Earnings Before Interest, Taxes, Depreciation, and Amortization. It is calculated as: Net Income + Interest + Taxes + Depreciation +

Amortization.

▪ Special Purpose Acquisition Company (SPAC) — It is formed strictly to raise capital through an initial public offering for the purpose of acquiring an

existing company.

▪ Dry Powder — Capital/funds raised by private equity firms that are available to be invested.

▪ Middle Market — Companies having Total Enterprise Values between $10 and $250 million.

▪ Middle Market Financial Sponsor — A Private Equity firm which invests in companies with Total Enterprise Values between $10 and $250 million.

Definitions: