1. Project Marlin<br />an IT Services Company<br />Executive Summary – October 2010<br />Confidential<br />Steven H. Rothman<br />SCR CONSULTING LLC.<br />Office: 845 634 6663<br />Mobile: 845 304 6272<br />shrothman@scrconsultingllc.com<br />shrothman@aol.com<br />Marlin<br />Confidential Executive Summary<br />1.1 Overview<br />Marlin (or the “Company”) is a privately-held and well-reputed provider of IT Services based in<br />the mid-Atlantic region of the United States. Since its inception in 2000, Marlin has focused on<br />clients in the financial services, government, manufacturing, healthcare and energy verticals and<br />sources over 40% of its $25 million revenue from Fortune 500 clients.<br />Marlin’s long-term client relationships, exceptionally strong sales and management teams,<br />diversified IT services portfolio and stated mission of being a trusted client partner enabled the<br />Company to grow at a CAGR of 100% between 2005 and 2008. The Company’s growth has<br />been largely organic, supplanted by two small strategic acquisitions to bolster delivery capability<br />in niche areas. The company has also benefited from its portfolio of partnerships with software<br />product vendors like SAP in the Enterprise Resource Planning (ERP) and SAS in the Business<br />Intelligence (BI) domains among others.<br />Started as an IT staff augmentation services firm 10 years ago, Marlin today boasts a well rounded<br />portfolio of diversified IT services comprising staff augmentation, turnkey IT solutions,<br />end-to-end ERP consulting services and managed services. The Company has strategically<br />concentrated on growing its business in regional markets with geographic proximity to its<br />headquarters. Marlin is well established in the Washington DC and Virginia area and is a<br />growing player in the mid-Atlantic region of the United States. Marlin’s sales team is distributed<br />between its headquarters location and regional sales offices to render the appropriate levels of<br />client attention and relationship management.<br />Driven by client needs, Marlin added a location in India in 2002 for IT project delivery and<br />recruitment support, a second delivery center in 2007 for ERP project delivery and now executes<br />engagements through an on-site / off-shore model. Marlin projects growth in its off-shore<br />project revenue from the current contribution level of <5%.<br />In the first half of 2009, Marlin experienced a small drop in revenue due to the global economic<br />downturn. However, beginning with the fourth quarter of 2009, Marlin has started posting<br />quarter-over-quarter growth again, benefiting from the economic recovery and new customer<br />acquisition. Marlin has delivered 11% QoQ growth in Q4-2009, 2% QoQ growth in Q1-2010 and<br />an additional 11% QoQ growth in Q2-2010. Currently, Marlin is seeing an annualized run rate of<br />$28 million and expects recent new contracts with large clients to lead to further growth. As a<br />result, management confidently projects growth to realize revenue of $30 million in 2010.<br />Project Marlin – Confidential 2 _Marlin represents an opportunity of exceptional strategic value to prospective buyers that seek a combination of:<br />1. Client relationships with Fortune 500 clients in the mid-Atlantic region<br />2. Strong sales team based in multiple locations close to the customer base<br />3. Brand recognition built through strategic marketing backed by an impeccable service<br />delivery reputation<br />4. Ability to deliver IT projects using on-site as well as on-site / off-shore models<br />5. Partnerships with multiple software package vendors including SAP and SAS<br />6. Professionals that hold Project Management Professional (PMP), Certified Agile Coaches,<br />Six Sigma Green Belt and certifications among others<br />7. A database of 30,000+ qualified and skilled resources<br />1.2 Services Provided<br />Marlin’s suite of services provides its clients a one-stop shop for their IT needs and consists of:<br />1. Staff Augmentation – Provision of skilled functional and technical resources to meet<br />clients’ internal IT requirements. Typical requirements addressed include Project<br />Management, Application Development, Web Development, Business/Systems Analysis,<br />Database Administration, Data Warehousing/Architecture, Quality Assurance/Testing,<br />Technical Writing, SAP, Network Administration, Infrastructure Management, SOA<br />Architecture, Security, Desktop Support and Help Desk Service.<br />2. Turnkey IT Solutions – Custom delivery of IT applications development and maintenance<br />solutions on an end-to-end basis in the following domains: Business Intelligence (BI),<br />Web Portals, Networking, Security and Enterprise Application Integration (EAI).<br />3. Managed Services – Service Level Agreement (SLA) based outsourcing of IT services<br />functionality to support the entire organization-wide IT needs of a client.<br />4. SAP Solutions and Consulting Services – Delivery of custom SAP solutions and consulting<br />services including package selection and procurement, implementation, deployment,<br />upgrades and maintenance support.<br />Staff Augmentation has historically contributed in excess of 50% of total revenue and Marlin<br />forecasts that this service line will continue to be the largest revenue contributor going forward<br />with an annual revenue contribution between 65 and 75%.<br />1.3 Client Profiles<br />Marlin’s geographically focused sales strategy has allowed it to form deep relationships with<br />local clients in the financial services, government, healthcare, energy and IT services verticals.<br />Clients in the financial services vertical have historically contributed the largest share of<br />revenue, and this percentage has increased year over year between 2007 and 2009.<br />Project Marlin – Confidential 3 _<br />Marlin also enjoys a very higher percentage of repeat business with clients. For the year<br />2010, customers with whom Marlin has had a relationship of 4 years or longer have<br />contributed in excess of 70% of revenue. Marlin’s current revenue base is largely<br />sourced from clients that have revenue in excess of $1 billion. These clients tend to<br />have large IT budgets and there is room to expand the current level of revenue<br />sourced from these clients.<br />1.4 Infrastructure and Resources<br />Marlin delivers IT solutions, and ERP and BI engagements from its headquarters in the US, with<br />additional support from its delivery centers in New Delhi and Hyderabad, India, while staff<br />augmentation engagements are typically delivered at client site. Marlin’s distributed sales and<br />delivery infrastructure is underpinned by a pool of 275+ highly skilled resources, which<br />comprises employees as well as contractors. IT solutions, ERP / BI consulting and managed<br />services engagements are typically delivered by salaried employees, while staff augmentation<br />engagements are delivered by a combination of salaried employees, project based hourly<br />employees and contractors.<br />The Company’s executive management, financial management and sales team are<br />fully based in the US. Recruiting management is also based in the US,<br />However the recruiting team is largely located in Marlin’s offshore recruiting<br />office in New Delhi, India. Both, the recruiting office in New Delhi and SAP<br />delivery center in Hyderabad, are managed locally in India by mid-level<br />center heads, who in turn report into VP level executives based in the US headquarters.<br />Marlin is headquartered in a dedicated leased building. All of its branch sales offices in the US<br />and delivery centers in India are located in leased premises. The Company’s operating IT<br />Project Marlin – Confidential 4 _<br />Infrastructure is located in its headquarters and is mirrored with a third-party provider of<br />Infrastructure hosting services to ensure business continuity.<br />1.5 Ownership Structure<br />Marlin is a privately held S-corporation with 1 majority shareholder and 2 minority shareholders.<br />The majority shareholder is the founder of the Company and continues to own 71% of the<br />company’s stock, although he has been retired from an active executive role since 2007. The<br />founder, however, continues to hold the title of Chairman and CEO. The 2 minority<br />Shareholders, each of whom owns 14.5% of the Company’s stock, are angel investors in the<br />Companies who have never been involved in any active management roles. Additionally, Marlin<br />has two 100% owned foreign subsidiaries – one in India and the other in the UK. The Indian<br />subsidiary acts solely as a captive cost-center providing recruiting support services and<br />engagement delivery services to the parent company in the US. The UK subsidiary has been<br />recently set up in anticipation of an opportunity to provide IT services in UK to one of Marlin’s<br />US-based clients. Such services have not been launched yet and the UK subsidiary currently<br />does not have any revenue or significant expenses.<br />1.6 Financial Performance and Projections<br />Marlin has been a high-growth Company that has been consistently profitable. The Company<br />posted a CAGR of 100% between the years 2005 and 2008. In 2009the management executed a series of pro-active and reactive measures to align the Company to the severe impact of the global<br />economic recession on its clients’ business. As a result, the Company was able to return a profit in 2009 despite experiencing a small decline in revenue. Strategic decisions and sales efforts in late 2009 and early 2010 have enabled Marlin to capitalize on growing IT requirements from existing and new clients. Marlin projects revenue growth in excess of 20% in 2010, 2011 and 2012, Coupled with an improvement in profitability.<br />The summary financials below present the performance of the<br />Company for the Fiscal Years 2005 <br />Project Marlin – Confidential 5 _to 2009 and projections for 2010 to 2012.<br />1.7 Transaction Drivers<br />Marlin’s founder started the Company in 2000 after he sold his previous entrepreneurial venture,<br />a successful mid-sized engineering services company, which was acquired by a Fortune 500<br />company in 1998. The founder was active in the operations and growth of Marlin’s business for<br />the first few years and effectively retired from the day-to-management role in 2007. Over the<br />past 3 years, the Company has been run by a professional management team headed by the<br />current President and Chief Operating Officer, who also has been with the Company since 2000.<br />Today, at the age of 71, the founder is in the process of aligning his investment portfolio in<br />keeping with his retirement interests, and is seeking to create value from his shareholding in<br />Marlin. He also believes that Marlin could achieve greater heights should it become part of a<br />larger IT services organization, while giving its current management team a possible opportunity<br />for further growth in a dynamic larger organization.<br />Project Marlin – Confidential 6 _<br />Next Steps<br />Steven H. Rothman is looking for a Capital Partner in Order to Purchase this Company as a “Foundation” for a National Acquisition Strategy.<br />