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Fairness Opinion Advisory Services

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  • 1. Fairness Opinion Advisory ServicesMarch 2013
  • 2. FIRM OVERVIEW Fairness Opinion Services Cassel Salpeter & Co., LLC focuses on providing independent and objective advice to middle market and emerging growth companies. Our investment banking and advisory services include broad capabilities for both private and public companies, such as:  Mergers and Acquisitions  Capital Raising  Restructurings  Fairness Opinions  Valuations  Financial and Strategic Advisory Our senior partners are personally involved at every stage of all assignments, and our professionals have forged relationships and executed transactions nationally and internationally. Cassel Salpeter is an independent provider of fairness opinions. 1
  • 3. WHAT IS A FAIRNESS OPINION Fairness Opinion Services Fairness opinions speak to the fairness of the financial terms of the consideration offered in a transaction as of a specific date and a certain set of assumptions. Fairness opinions help Boards and other Fiduciaries fulfill their fiduciary duties of loyalty and care by enabling them to act on an informed basis, and provides protection under the Business Judgment Rule. Fairness opinions are typically prepared for Directors, Independent Directors, Fiduciaries, Institutional Investors, and Trustees. The perception of fairness opinions and behavior of Directors were transformed in Smith v. Van Gorkom (1985) where it held that the Board breached its fiduciary duty of care by approving a sales transaction proposed by the CEO without adequate information, and that individual Directors bear personal liability for their actions. Fairness opinions are not required by any statute or regulation, but have become a regular feature of corporate transactions since the Smith v. Van Gorkom decision. 2
  • 4. WHAT IS A FAIRNESS OPINION Fairness Opinion Services Fairness opinions may serve as evidence that the Board has acted appropriately under the Business Judgment Rule.  A court will generally not review the actions or decisions of a Corporation’s Board that acts in good faith, on an informed basis, without self-dealing, and in the best interest of shareholders. In situations where the controlling shareholders stand on both sides of a transaction or an inherent conflict of interest exists, the Board will be held to the more stringent Entire Fairness Standard. Under the Entire Fairness Standard, the court will examine both the fairness of the transaction process and the fairness of the consideration.  The burden of proof on whether the transaction meets the Entire Fairness Standard ordinarily rests on the controlling shareholder.  A common measure taken by Board’s is the formation of an Independent Special Committee to oversee, negotiate, and approve the transaction process. Fairness opinions should be based on objective and independent analysis. Today, fairness opinions are viewed as a minimum precaution for Boards and other fiduciaries, as they may provide evidence of the fiduciary’s deliberation process and recommendation. 3
  • 5. WHEN TO GET A FAIRNESS OPINION Fairness Opinion Services Fairness opinions are a highly effective risk management tool in a vast range of corporate transactions, including:  Restructuring  Mergers & Acquisitions  Leveraged and Management Buyouts  Recapitalizations  Going-Private Transactions  Related Party Transactions  Squeeze-Out Mergers  Equity Financings and Private Placements  Joint Ventures  Employee Stock Ownership Plans  Tender Offers  Reverse Mergers 4
  • 6. FINRA RULE 5150 Fairness Opinion Services In 2007, the Financial Industry Regulatory Authority (FINRA) issued Rule 2290 in response to concerns over conflicts of interest with respect to fairness opinions. In 2008, as part of FINRA’s rule book consolidation, Rule 2290 was renumbered to Rule 5150. Under Rule 5150, any FINRA member issuing a fairness opinion must disclose whether it is acting as an advisor on the deal and whether it will receive any compensation contingent on the successful completion of the proposed transaction. In addition, a FINRA member issuing a fairness opinion must have adopted written procedures for approval of any fairness opinion, including processes to determine whether the valuation methods or analyses utilized are appropriate. 5
  • 7. OUR QUALIFICATIONS Fairness Opinion Services Our team has issued over 130 fairness opinions on transactions ranging from simple acquisitions and sales to highly complex transactions. The transaction values range from high hundred million dollar transactions to low million dollar transactions across a wide range of industries. James Cassel and Scott Salpeter, our Co-Founders, each have over twenty-five years of transactional experience providing high quality financial advice. In addition to fairness opinions, the team has issued over 150 corporate valuations, across a broad industry range. 6
  • 8. OUR TEAM Fairness Opinion Services James Cassel Scott SalpeterChairman and Co-Founder President and Co-Founder  Mr. Cassel has extensive experience negotiating,  Mr. Salpeter has extensive experience in mergers structuring, and executing complex financial and acquisitions, financial advisory practices, transactions, including mergers and acquisitions, issuing fairness and solvency opinions, valuations, divestitures, public offerings and private and corporate finance. placements, and financial restructuring.  Previous Experience: MD, Ladenburg Thalmann &  Previous Experience: Vice-Chairman & Head of Co. Inc.; Managing Director and Co-Founder, Investment Banking, Ladenburg Thalmann & Co. Capitalink L.C.; Vice-President, Catalyst Financial; Inc.; Co-Founder, Capitalink, L.C.; President, Senior Financial Officer, Insituform Group Ltd.; Catalyst Financial; Managing Partner – Miami CFO, Evans Environmental; CFO, ALCO Office, and Executive Committee Member, Broad International. and Cassel.  B.S., Washington and Lee University; Accredited  J.D., University of Miami School of Law; B.S., Valuation Analyst. American University; Member of New York and Florida Bars.  Board of Directors, Equity One Inc. (NYSE: EQY); Advisory Board Member, The Launch Pad; Board of Directors, Association for Corporate Growth – South Florida Chapter. 7
  • 9. OUR TEAM Fairness Opinion Services Judit Fabian Joseph “Joey” SmithDirector Director  Ms. Fabian has extensive experience in working  Mr. Smith has substantial capital market with early stage companies in roles from financial experience, spanning over 20 years, with private advisor to Interim Chief Financial Officer. and public middle-market companies in the  Previous Experience: Founder, Global Origo; execution of capital raising and mergers and Interim Chief Financial Officer, Incubated acquisitions. Companies; Financial Analyst, Nextera Enterprises;  Previous Experience: Senior Vice-President, Financial Advisor, Early Stage IT &Internet Catalyst Financial; Managing Director and Companies, InfoAge Business Center; Shareholder, Capital City Partners, LLC; Senior Underwriting Analyst, GMAC Commercial Vice-President and Head of Investment Banking, Mortgage Corporation. First Equity Corporation of Florida; Vice-President,  M.S., American University; B.A., with honors, Shearson Lehman Brothers; Vice-President, Merrill Mount Vernon College, George Washington Lynch. University.  B.A., Hobart College.  Board of Trustees, Miami Science Museum. 8
  • 10. OUR TEAM Fairness Opinion Services Marcus Wai Chris Mansueto, CFA, ASAVice President Associate  Mr. Wai has substantial investment banking and  Mr. Mansueto has extensive experience in financial financial analysis experience, including mergers and modeling and the valuation of securities and intangible acquisitions advisory, issuing fairness and solvency assets primarily for financial reporting purposes. opinions, and capital raising.  Previous Experience: Associate, Ladenburg Thalmann  Previous Experience: Vice President, Ladenburg & Co. Inc.; Senior Valuation Analyst, Kaufman Rossin & Thalmann & Co. Inc.; Vice President, Capitalink L.C.; Co.; Analyst, Duff & Phelps; Valuation Consultant, CBIZ M&A Analyst, Tutor Time Corporation; Investment Valuation Group. Banker, Cameron & Company Limited (Cameron  M.B.A., Rice University; B.S., with distinction, George Partners). Mason University.  M.S., with distinction, and Bachelor, with honors, Massey University. Philip Cassel Laura SalpeterAssociate Analyst  Mr. Cassel has played a role in restructuring projects  Ms. Salpeter has participated in the execution of a across many industries, assisting with cash flow variety of transactions. She is a member of the State modeling, budget planning, due diligence, court filings, Bar of Florida and the District of Columbia Bar. and distressed M&A. He also has experience in private  Previous Experience: Contract Attorney, Conrad & equity and fund management. Scherer; Judicial Clerk for the Honorable Judge Paul  Previous Experience: Analyst, Alvarez & Marsal; Backman, 17th Judicial Circuit, Broward County Associate, Rialto Capital Management. Courthouse; Legal Clerk, Ephraim Roy Hess, P.A.  B.S., Massachusetts Institute of Technology.  J.D., with honors, Nova Southeastern University; M.S. and B.S., University of Central Florida. 9
  • 11. REPRESENTATIVE FAIRNESS OPINIONS Fairness Opinion Services Trio Merger Corp. Fairness Opinion Fairness Opinion Fairness Opinion Solvency Opinion Fairness Opinion Pending Merger with Pending Merger with BFC Merger with Recapitalization Sale to SAExploration Holdings, Inc. Financial Corp. As Seen On TV, Inc. Q.E.P. Co., Inc. December 2012 November 2012 October 2012 July 2012 July 2012 BNS Holding, Inc. Rica Foods, Inc. Fairness Opinion Fairness Opinion Fairness Opinion Fairness Opinion Fairness Opinion Sale of Vessels to Sale of SWH, Inc. to Steel Proposed Merger with BFC Merger with Avicola Sale of Business Assets Navios Maritime Partners Excel, Inc. Financial Corp. Campesinos, Inc. of Encompass Group Affiliates, Inc. June 2012 April 2012 November 2011 August 2011 May 2011 Fairness Opinion Fairness Opinion Solvency Opinion Fairness Opinion Fairness Opinion Sale of Vessels to Acquisition of Shares in Recapitalization Sale of Vessels to Acquisition of Five Vessels Navios Maritime Partners Marfin Investment Group Navios Maritime Partners May 2011 December 2010 December 2010 November 2010 June 2010 10
  • 12. REPRESENTATIVE FAIRNESS OPINIONS Fairness Opinion Services Navios Maritime Acquisition Corporation Fairness Opinion Fairness Opinion Fairness Opinion Fairness Opinion Fairness Opinion Sale of Vessel to Acquisition of Acquisition of Acquisition of Six Vessels Sale of Vessel to Navios Maritime Partners Gregory Mountain Products Thirteen Vessels and Management Company Navios Maritime Partners May 2010 May 2010 April 2010 March 2010 March 2010 Chardan 2008 China BNS Holding, Inc. Acquisition Corp. Fairness Opinion Fairness Opinion Fairness Opinion Fairness Opinion Fairness Opinion Merger with Sale of Majority Ownership Sale of Vessel to Merger with Sale of Vessel to Firecom, Inc. in Collins Industries, Inc. Navios Maritime Partners DAL Group, LLC Navios Maritime Partners January 2010 January 2010 January 2010 December 2009 October 2009 Fairness Opinion Fairness Opinion Fairness Opinion Fairness Opinion Merger with Acquisition of Acquisition of Acquisition of Pernix Therapeutics, Inc. Steel Vault Corporation Avigen, Inc. Ownership Interest in Bulk Energy Transport Limited October 2009 September 2009 August 2009 June 2009 Includes projects by our professionals at prior firms. 11
  • 13. CONTACT INFORMATION Fairness Opinion Services James S. Cassel Scott E. Salpeter Chairman President jcassel@cs-ib.com ssalpeter@cs-ib.com 305-438-7701 305-438-7702 801 Brickell Ave. Suite 650 Miami, Florida 33131 Telephone 305-438-7700 Fax 305-438-7710 www.casselsalpeter.com 12