Lifeminders 8 27a 1999

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LifeMinders pitch FROM (DB) Alex Brown to lead the IPO

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Lifeminders 8 27a 1999

  1. 1. Presentation to: August 27, 1999
  2. 2. TABLE OF CONTENTS Executive Summary 1 Internet and Direct Marketing Expertise 2 Equity Credentials 3 Deutsche Bank Momentum 4 LifeMinders Positioning 5 LifeMinders Valuation 6 Appendices Current IPO Market Conditions A M&A Capabilities B
  3. 3. <ul><li>Executive Summary </li></ul>
  4. 4. Research Chris Feiss Managing Director - Marketing Services Shaun Andrikopoulos Director - Internet Research DB ALEX. BROWN/ LIFEMINDERS TEAM Corporate Finance Mayo Shattuck Co-Head of Investment Banking Internet Investment Banking Jay Eastman Co-Head of Internet Investment Banking Mark Kaufman Vice President Syndicate Michael Ott Head of Syndicate Institutional Sales George Bolton Head of Internet/ Technology Sales Capital Markets Frank Comas Director
  5. 5. EXECUTIVE SUMMARY <ul><li>I. Recommendation </li></ul><ul><ul><li>Fall 1999 IPO with a fully distributed valuation of $349 - $414 million, given existing market conditions (p. 70) </li></ul></ul><ul><ul><li>$50 million IPO, mostly primary shares </li></ul></ul><ul><ul><li>File transaction in mid-September, price in early November </li></ul></ul><ul><li>II. Internet Transaction Team </li></ul><ul><ul><li>Jay Eastman, Co-Head of Internet Banking; Mark Kaufman, Vice President </li></ul></ul><ul><ul><li>Chris Feiss, Managing Director of Marketing Services Research; Shaun Andrikopoulos, Director of Internet </li></ul></ul><ul><ul><li>Research </li></ul></ul><ul><li>III. DB Alex. Brown Qualifications </li></ul><ul><ul><li>Internet Expertise : </li></ul></ul><ul><ul><ul><li>Marketing Services Underwritings </li></ul></ul></ul><ul><ul><ul><li>Completed - DoubleClick, Flycast, Realty Information Group </li></ul></ul></ul><ul><ul><ul><li>Pending - FreeShop, YesMail, Luminant, Circle.com (spin-off) </li></ul></ul></ul><ul><ul><ul><li>Other notable underwritings - AOL, Amazon.com, @Home, Marketwatch, Sportsline, WebVan (Pending) </li></ul></ul></ul><ul><ul><ul><li>Over 15 notable internet M&A transactions including NBC/ Snap/ Xoom.com and CDNow/ Sony/ Time </li></ul></ul></ul><ul><ul><ul><li>Warner (p. 18) </li></ul></ul></ul><ul><ul><li>Direct Marketing Expertise : </li></ul></ul><ul><ul><ul><li>Recent Transactions: Sky Alland Marketing, InfoUSA, Equifax, Memberworks, Foster & </li></ul></ul></ul><ul><ul><ul><li>Gallagher </li></ul></ul></ul><ul><ul><li>Unparalleled Internet Equity Record: </li></ul></ul><ul><ul><ul><li>#3 since 1995 in lead-managed Internet equity transactions (34 deals) (p. 27) </li></ul></ul></ul><ul><ul><ul><li>#3 since 1995 in all Internet equity transactions (69 deals) </li></ul></ul></ul><ul><ul><ul><li>Over the last 12 months, DB Alex. Brown lead-managed 12 Internet transactions; DLJ, H&Q and Weisel </li></ul></ul></ul><ul><ul><ul><li>lead-managed 10, 9 and 0 respectively </li></ul></ul></ul>
  6. 6. EXECUTIVE SUMMARY <ul><ul><li>Excellent Aftermarket Stock Performance : </li></ul></ul><ul><ul><ul><li>237% aftermarket performance for all Internet equity offerings over the last twelve months (p.28) </li></ul></ul></ul><ul><ul><ul><li>DB Alex. Brown’s aftermarket performance exceeds all other underwriters except Morgan Stanley and </li></ul></ul></ul><ul><ul><ul><li>Goldman Sachs </li></ul></ul></ul><ul><ul><ul><li>DLJ, H&Q and Weisel posted 218%, 144% and 119% aftermarket gains over the same period </li></ul></ul></ul><ul><ul><ul><li>DB Alex. Brown rated #1 in the 1998 Greenwhich Survey of small and mid-cap fund managers (p31) </li></ul></ul></ul><ul><ul><li>Dedicated Aftermarket Trading : </li></ul></ul><ul><ul><ul><li>DB Alex. Brown is a top three market maker in 87.6% of its lead-managed IPOs over the last </li></ul></ul></ul><ul><ul><ul><li>twelve months (p. 30) </li></ul></ul></ul><ul><ul><ul><li>DB Alex. Brown aftermarket trading support exceeds all other underwriters including DLJ and H&Q. </li></ul></ul></ul><ul><ul><li>Exceptional Performance in a Tough Market : </li></ul></ul><ul><ul><ul><li>Since June 1, 38 of 103 Internet-related IPOs were priced at or below the midpoint of their initial range </li></ul></ul></ul><ul><ul><ul><li>The low point spanned the two weeks ended August 13 with 28 of an expected 61 deals completed </li></ul></ul></ul><ul><ul><ul><li>During this period, DB Alex. Brown completed 3 of its 4 expected IPOs </li></ul></ul></ul><ul><ul><ul><li>These deals have appreciated 65% in the aftermarket (p. 35) </li></ul></ul></ul>
  7. 7. EXECUTIVE SUMMARY <ul><li>IV. Analyst Positioning </li></ul><ul><ul><li>Large Market Opportunity </li></ul></ul><ul><ul><ul><li>$5.3 billion in direct marketing spending on the Internet in 2003 </li></ul></ul></ul><ul><ul><ul><li>Evolution from brand advertising to direct response </li></ul></ul></ul><ul><ul><ul><li>Pervasive use of email marketing makes it increasingly difficult to reach the consumer </li></ul></ul></ul><ul><ul><li>Eminders - Messages Worth Reading </li></ul></ul><ul><ul><ul><li>Relevant information </li></ul></ul></ul><ul><ul><ul><li>High degree of personalization </li></ul></ul></ul><ul><ul><ul><li>Contextualized marketing message </li></ul></ul></ul><ul><ul><li>Superior Marketing Solution </li></ul></ul><ul><ul><ul><li>Proven effectiveness - 40-50% opened and read </li></ul></ul></ul><ul><ul><ul><li>Higher retention - 85%+ after 90 days </li></ul></ul></ul><ul><ul><ul><li>Improved response rates - 10% - highest in sector </li></ul></ul></ul><ul><ul><li>Powerful Consumer Database </li></ul></ul><ul><ul><ul><li>Deep, user-provided profile information - 10+ million profiles to date </li></ul></ul></ul><ul><ul><ul><li>Broad demographics </li></ul></ul></ul><ul><ul><ul><li>Ongoing user behavior </li></ul></ul></ul><ul><ul><li>Attractive Business Model </li></ul></ul><ul><ul><ul><li>Low customer acquisition cost </li></ul></ul></ul><ul><ul><ul><li>Rapid payback and high lifetime value </li></ul></ul></ul><ul><ul><ul><li>Multiple expansion opportunities - new categories, new revenue streams </li></ul></ul></ul><ul><ul><ul><li>Leverageable direct marketing infrastructure </li></ul></ul></ul>
  8. 8. EXECUTIVE SUMMARY <ul><li>V. LifeMinders is a critical Marketing Services Transaction for DB Alex. Brown’s Francise </li></ul><ul><ul><li>Senior Internet and Direct Marketing Focus </li></ul></ul><ul><ul><li>Committed Capital Markets Attention </li></ul></ul><ul><ul><li>We Will Add Value to LifeMinders </li></ul></ul><ul><li>VI. Valuation </li></ul>An investment opportunity with scarcity value <ul><ul><li>Broad Advertiser and Partner Base </li></ul></ul><ul><ul><ul><li>60+ advertisers - limited revenue concentration </li></ul></ul></ul><ul><ul><ul><li>Opt-in partners - offsets acquisition cost </li></ul></ul></ul><ul><ul><ul><li>Distribution partners - Excite, Yahoo </li></ul></ul></ul><ul><ul><li>Strong Growth and Momentum </li></ul></ul><ul><ul><li>Experienced Management Team with Strong Venture Backing </li></ul></ul>
  9. 9. <ul><li>Internet and Direct Marketing Expertise </li></ul>
  10. 10. RESEARCH COVERAGE America Online @Home Corporation Excite Flycast Communications Infoseek Lycos Yahoo! MNAs Amazon.com Autobytel.com CDnow Cyberian Outpost DoubleClick* Digital River eBay YesMail* FreeShop* Internet Commerce @Home Corporation MarketWatch.com SoftNet Systems Terayon Broadband Services Offline Electronic Content * Pending ** Pending acquisition of NetGravity YesMail* FreeShop* Circle.com* Acxiom Realty Information Group Online Direct Marketing Wilmar Industries, Inc. Cendant Harte-Hanks Info USA Snyder Communications World Color Press Offline Direct Marketing CNET MarketWatch.com Sportsline USA ZDNet* Internet Content Shaun Andrikopoulos Larry Marcus Acclaim Entertainment Activision, Inc. Electronic Arts General Instrument Gemstar Intuit Inc. The Learning Company The 3DO Company Scientific-Atlanta Inc. Chris Feiss
  11. 11. RESEARCH COVERAGE * Pending Ameritrade Checkfree Holdings Corp. DLJ direct* E*trade Group National Discount Brokers Charles Schwab Corp. Online Commerce & Finance Equifax Inc. First Data Corp. Galileo International Sabre Group Holdings Sykes Enterprises Offline Digital Commerce Covad Communications Exodus Communications Rhythms Netconnections Primus Telecommunications OneMain.com Teleglobe USinterworking IDT Corp. Intermedia Communications e.spire Communications Net2Phone* Netcentric Communications Telecommunications James Marks Star Telecom AT&T Corp. QLT Phototherapeutics MCI Worldcom Equant NV Business Objects SA Pacific Gateway US West Bell Atlantic Bellsouth Kevin Moore
  12. 12. HIGHEST QUALITY INTERNET CLIENTS
  13. 13. SELECTED DB ALEX. BROWN INTERNET INITIAL PUBLIC OFFERINGS $106,260,000 DB Alex. Brown April 8, 1999 $100,000,000 Pending DB Alex. Brown $57,500,000 Pending DB Alex. Brown $345,000,000 Pending DB Alex. Brown $72,000,000 DB Alex. Brown May 6, 1999 $75,000,000 DB Alex. Brown May 3, 1999 $63,000,000 DB Alex. Brown September 24, 1998 $140,400,000 DB Alex. Brown January 21, 1999 $80,000,000 DB Alex. Brown April 29,1999 $48,000,000 DB Alex. Brown April 26, 1999 March 26, 1999 $103,500,000 DB Alex. Brown $108,700,000 DB Alex. Brown July 12, 1997 DB Alex. Brown April 17, 1997 $17,250,000 $47,700,000 DB Alex. Brown June 11, 1996 $55,200,000 DB Alex. Brown April 1, 1996 $54,000,000 DB Alex. Brown May 15, 1997 $25,500,000 DB Alex. Brown August 11, 1998 $39,000,000 DB Alex. Brown August 17, 1998 $75,400,000 DB Alex. Brown February 9, 1998 $40,600,000 DB Alex. Brown June 10,1998 $59,500,000 DB Alex. Brown February 20, 1998 $77,600,000 DB Alex. Brown March 18, 1998 $72,000,000 DB Alex. Brown July 30, 1998 $46,750,000 DB Alex. Brown January 15, 1999 $187,000,000 DB Alex. Brown March 25, 1999 $58,500,000 DB Alex. Brown April 19, 1999 $320,000,000 May 25, 1999 DB Alex. Brown $180,000,000 August 4, 1999 DB Alex. Brown $46,000,000 Pending DB Alex. Brown Undisclosed Pending DB Alex. Brown $56,500,000 August 11, 1999 DB Alex. Brown $46,000,000 DB Alex. Brown Pending $115,000,000 Pending DB Alex. Brown $60,000,000 August 19, 1999 DB Alex. Brown $24,000,000 August 10, 1999 DB Alex. Brown $175,000,000 Pending DB Alex. Brown Luminant Worldwide $81,000,000 DB Alex. Brown July 28, 1999 $172,500,000 DB Alex. Brown Pending e2e.net $46,000,000 Pending DB Alex. Brown $60,000,000 Pending DB Alex. Brown $46,000,000 Pending DB Alex. Brown $115,000,000 June 22, 1999 DB Alex. Brown
  14. 14. SELECTED DB ALEX. BROWN INTERNET FOLLOW-ON, HIGH YIELD AND CONVERTIBLE OFFERINGS $304,000,000 DB Alex. Brown August 4, 1999 Follow-on $98,670,000 DB Alex. Brown June 21, 1999 Follow-on $285, 000,000 DB Alex. Brown June 16, 1999 Follow-on $133, 000,000 DB Alex. Brown May 4, 1999 Follow-on $150, 000,000 DB Alex. Brown April 24, 1999 Follow-on $1,100,000,000 DB Alex. Brown April 12, 1999 Follow-on $123,500,000 DB Alex. Brown January 21, 1999 Follow-on $86,100,000 DB Alex. Brown December 11, 1998 Follow-on $70,500,000 DB Alex. Brown December 11, 1998 Follow-on $420,000,000 DB Alex. Brown November 18, 1998 Follow-on $115,300,000 DB Alex. Brown August 12, 1998 Follow-on $24,605,000 July 24, 1998 DB Alex. Brown Follow-on $64,975,000 DB Alex. Brown October 23, 1997 Follow-on $132,300,000 DB Alex. Brown January 29, 1998 Follow-on DB Alex. Brown September 16, 1997 $92,000,000 Follow-on $46,400,000 DB Alex. Brown February 12, 1998 Follow-on $416,875,000 DB Alex. Brown February 25, 1997 Follow-on $150,000,000 DB Alex. Brown March 19, 1999 Convertible Preferred $200,000,000 DB Alex. Brown February 25, 1999 Convertible Preferred $350,000,000 DB Alex. Brown November 12, 1997 Convertible Preferred DB Alex. Brown $215,000,000 February 11, 1999 High Yield DB Alex. Brown $260,000,000 March 6, 1998 High Yield $100,000,000 DB Alex. Brown February 12, 1998 High Yield $200,000,000 DB Alex. Brown February 25, 1999 Convertible Preferred DB Alex. Brown $200,000,000 June 11, 1998 High Yield $260,000,000 DB Alex. Brown July 14, 1999 Convertible Preferred
  15. 15. SELECTED DB ALEX. BROWN INTERNET PRIVATE PLACEMENTS AND STRATEGIC PARTNERSHIPS $21,400,000 June 14, 1998 Financing from Series D Investors Financing from Series D Investors $22,970,000 August 12, 1998 Financing from Series D Investors $14,016,000 January 30, 1998 $19,800,000 December 1997 Financing from Series B Investors $10,000,000 August 1997 Series B Financing from $24,600,000 October 31, 1997 Series C Financing from $15,000,000 November 1996 $15,553,000 June 24, 1998 $22,000,000 March 16, 1998 Financing from Series C Investors Series A Financing from $7,000,000 December 18, 1998 $6,000,000 November 1997 Bridge Notes with Warrants Financing from Series C Investors $42,000,000 May 14, 1999 Financing from Series B Investors $20,000,000 Pending VWR Not Disclosed March, 1999 VRW has taken an equity stake in Financing from Series B Investors $25,000,000 Pending Financing from Series C Investors $25,000,000 May 21, 1999 Financing from Series C Investors $20,000,000 Pending
  16. 16. SELECTED DEUTSCHE BANC ALEX. BROWN INTERNET M&A TRANSACTIONS merged with $2,400,000,000 Pending has acquired Undisclosed Pending $715,000,000 GTE Corporation June 10, 1997 acquired by $91,000,000 October 21, 1997 acquired by $283,500,000 ICG Communications January 21, 1998 acquired by $154,000,000 March 15, 1998 acquired by $50,000,000 April 3, 1998 acquired by $64,000,000 June 8, 1998 NBC has made Strategic investments in acquired by $329,700,000 July 28, 1998 merged with $264,000,000 March 17, 1999 merged with Undisclosed January 29, 1999 HomeArts acquired by $305,000,000 April 10, 1999 acquired by $47,000,000 March 24, 1999 acquired by $166,000,000 June 9, 1999 $4,000,000,000 Pending NBC has merged its Internet properties with $135,000,000 Pending acquired by
  17. 17. PENDING INTERNET MARKETING SEVICES TRANSACTIONS Size: Transaction: Description: Investors: Timing: Analyst: $46,000,000 Deutsche Banc Alex. Brown Lead Managed IPO Provider of consumer-driven direct marketing. Freeshop, allows consumers to seek out new products on their own and try them for free rather than rely on marketers to reach them with broad advertising campaigns. Federated Stores (Fingerhut Companies) Late September, 1999 Chris Feiss / Shaun Andrikopoulos Size: Transaction: Description: Investors: Timing: Analyst: $46,000,000 Deutsche Banc Alex. Brown Lead Managed IPO Provider of permission e-mail direct marketing services to about 90 corporate clients (AT&T, eToys). The company has more than 7 million subscribers. Platinum Venture Partners Late September, 1999 Chris Feiss / Shaun Andrikopoulos Size: Transaction: Description: Investors: Timing: Analyst: N/A Tax Free, Tracking Stock Spin-Off; Deutsche Banc Alex. Brown as Sole Advisor Provider of customer relationship management services over the Internet. Services include, consumer research, online event planning and automated marketing systems. Snyder Communications September, 1999 Chris Feiss
  18. 18. COMPLETED INTERNET MARKETING SERVICES TRANSACTIONS Size: Transaction: Description: Investors: Timing: Analyst: $75,000,000 Deutsche Banc Alex. Brown Lead Managed IPO The company offers Web advertising-campaign management. Flycast's products and services provide media buyers and sellers with complete realtime control over Web ad-campaign planning, market testing, execution, and performance monitoring. BellSouth, Bessemer, Charles River, Comdisco, SBC Communications, St. Paul Ventures, US West May, 1999 Shaun Andrikopoulos Size: Transaction: Description: Investors: Timing: Analyst: $59,500,000 Deutsche Banc Alex. Brown Co-Managed IPO Provider of an Internet advertising network. The company’s network solution centralizes planning, execution, control, tracking, and reporting for high-impact online media campaigns. ABS Capital, Bain Capital, Canaan Partners, Greylock Capital, Venrock Assoc., Weiss Peck & Greer February, 1998 Shaun Andrikopoulos Size: Transaction: Description: Investors: $115,575,000 Deutsche Banc Alex. Brown Co-Lead Managed Follow-On Offering The company provides building-specific information to the US commercial real estate industry and related industries to disseminate information and facilitate transactions. Texas Pacific Group, Allen & Company Timing: Analyst: May, 1999 Chris Feiss
  19. 19. SELECTED DIRECT MARKETING TRANSACTIONS $20,000,000 Not Disclosed BT Alex. Brown $75,000,000 Leading Healthcare Marketing Company $240,000,000 BT Alex. Brown World Color Press $93,000,000 BT Alex. Brown $35,000,000 Senior Bank Facility BT Alex. Brown $65,000,000 acquired by Response Marketing $116,000,000 BT Alex. Brown World Color Press $100,000,000 High Yield Debt BT Alex. Brown $105,000,000 Big Flower Press Holdings BT Alex. Brown Not Disclosed Pro CD has acquired Private Placement Private Placement Follow-on IPO Follow-on Follow-on Follow-on BT Alex. Brown BT Alex. Brown $100,000,000 High Yield Debt BT Alex. Brown $250,000,000 High Yield Debt BT Alex. Brown Big Flower Press Holdings $300,000,000 High Yield Debt BT Alex. Brown World Color Press $115,000,000 High Yield Debt BT Alex. Brown $625,000,000 American Transtech has sold $78,000,000 acquired by Blau Marketing Tech. $100,000,000 (convertible preferred) BT Alex. Brown Big Flower Press Holdings $100,000,000 Senior Bank Facility BT Alex. Brown Not Disclosed acquired by Sampling Corporation Not Disclosed Coverdell & Company has acquired
  20. 20. SELECTED DIRECT MARKETING TRANSACTIONS $59,000,000 BT Alex. Brown May & Speh $86,000,000 $550,000,000 Convertible Subordinated Notes BT Alex. Brown CUC International $200,000,000 Senior Subordinated Notes BT Alex. Brown Big Flower Press Holdings $132,000,000 Convertible Subordinated Notes BT Alex. Brown World Color Press $85,000,000 acquired by Brann Holdings $322,000,000 Mitre plc merged with IPO IPO Follow-on $85,000,000 BT Alex. Brown BT Alex. Brown $37,000,000 Teleaction SA has acquired $162,000,000 merged with DiMark Not Disclosed acquired by Gall’s Not Disclosed acquired by Troll Learn and Play Foster & Gallagher Not Disclosed acquired by The Reliable Corporation (mail order division) $133,000,000 BT Alex. Brown Follow-on $118,000,000 BT Alex. Brown Follow-on $55,000,000 BT Alex. Brown Follow-on $107,000,000 BT Alex. Brown Follow-on $108,000,000 BT Alex. Brown Follow-on $43,000,000 BT Alex. Brown IPO
  21. 21. <ul><li>Equity Credentials </li></ul>
  22. 22. EQUITY CREDENTIALS <ul><li>Consistently one of the top three lead-managed underwriters of equity for Internet companies </li></ul><ul><li>Extremely strong aftermarket performance record </li></ul><ul><li>Dedicated aftermarket trading support </li></ul><ul><li>Ability to complete transactions even in difficult markets </li></ul><ul><li>DB Alex. Brown has underwritten more e-Commerce companies than its competitors </li></ul><ul><li>Increased equity strength since merger with Deutsche Bank </li></ul>
  23. 23. LEADING EQUITY UNDERWRITER FOR INTERNET COMPANIES Lead or Co-Managed Internet Equity Offerings January 1, 1995 to Date Source: SDC Platinum. Data through June 30, 1999. Number of Transactions Lead Managed Internet Equity Offerings January 1, 1995 to Date 17 35 35 34 27 22 15 14 12 10 8 7 6 0 5 10 15 20 25 30 35 40 Goldman Sachs BB Robertson Stephens Deutsche Banc Alex. Brown H&Q Morgan Stanley CS First Boston Bear, Stearns Merrill Lynch DLJ Banc America Securities Salomon Smith Barney JP Morgan Lehman Brothers 11 11 16 17 17 20 21 21 26 26 27 29 34 39 44 69 75 91 39 0 10 20 30 40 50 60 70 80 90 BB Robertson Stephens H&Q Deutsche Banc Alex. Brown Goldman Sachs Bear, Stearns DLJ Banc America Securities Morgan Stanley CS First Boston Merrill Lynch Dain Raucher Wessels SG Cowen Salomon Smith Barney Volpe Piper Jaffray Thomas Weisel Lehman CIBC Oppenheimer Thomas Weisel Thomas Weisel 0
  24. 24. AFTERMARKET PERFORMANCE OF LEAD AND CO-MANAGED INTERNET IPOs (1) To Date, Thomas Weisel Partners has not lead-managed any Internet IPOs. Source: Equidesk and Securities Data Company. Lead-managed IPOs between 7/1/98 and 6/30/99. Lead and Co-Managed Performance of Major and Bulge Bracket firms over the last twelve months Goldman, Sachs Morgan Stanley DW Merrill Lynch Lehman Hambrecht & Quist BB Robertson Stephens CS First Boston Bear, Stearns DLJ Thomas Weisel (1) 0% 50% 100% 150% 200% 250% 300% 350% 5 10 15 20 25 30 35 40 45 0
  25. 25. AFTERMARKET PERFORMANCE OF LEAD-MANAGED INTERNET IPOs (1) To Date, Thomas Weisel Partners has not lead-managed any Internet IPOs. Source: Equidesk and Securities Data Company. Lead-managed IPOs between 7/1/98 and 6/30/99. Lead-Managed Performance of Major and Bulge Bracket firms over the last twelve months Goldman, Sachs Morgan Stanley DW Merrill Lynch Lehman Hambrecht & Quist BB Robertson Stephens CS First Boston Bear, Stearns DLJ 0% 50% 100% 150% 200% 250% 300% 350% 400% 5 10 15 20 25 Thomas Weisel (1) 0
  26. 26. AFTERMARKET PERFORMANCE OF LEAD-MANAGED INTERNET IPOs (1) To Date, Thomas Weisel Partners has not lead-managed any Internet IPOs. Source: Equidesk and Securities Data Company. Lead-managed IPOs between 1/1/95 and 6/30/99. Goldman, Sachs Morgan Stanley DW Merrill Lynch Bank of America Hambrecht & Quist BB Robertson Stephens CS First Boston Bear, Stearns DLJ 0% 100% 200% 300% 400% 500% 600% 700% 800% 900% 0 5 10 15 20 25 30 Lead-Managed Aftermarket Performance of Major and Bulge Bracket firms over the long run Thomas Weisel (1)
  27. 27. DB ALEX. BROWN AFTERMARKET TRADING SUPPORT 1998 Trading Rankings for Lead-Managed IPOs Completed January 1, 1995 to June 30, 1998 Source: Autex-Block Data Sal. BB Morgan Goldman NB Merrill Smith Rob. Lehman Stanley Sachs Mont. Lynch H&Q CSFB Barney Steph. Bros. DW Ranked #1 63.9% 54.3% 54.0% 53.8% 53.8% 52.7% 52.3% 48.7% 46.4% 33.9% Ranked #2 16.5% 13.4% 18.4% 22.0% 15.4% 10.9% 16.5% 12.8% 26.8% 20.2% Ranked #3 7.2% 6.3% 6.9% 4.4% 7.7% 3.6% 6.4% 7.7% 7.1% 8.1% 87.6% 74.0% 79.3% 80.2% 76.9% 67.3% 75.2% 69.2% 80.4% 62.1% DB Alex. Brown Percentage Ranked #1, #2, #3
  28. 28. DB ALEX. BROWN AFTERMARKET SUPPORT Note: Rankings are the results of a national survey of 98 small and medium capitalization portfolio managers. (1) Categories with * did not exist at time of survey. DB Alex. Brown continues to receive praise from small and mid-cap fund managers DB Alex. Brown continues to be the dominant firm for small and mid-cap investors <ul><li>“ DB Alex. Brown ranks decisively 1st in a leading small and mid-cap fund manager survey - a measure of overall service quality covering an aggregate research, sales and trading service profile - with a score of 604 versus par of 500. DB Alex. Brown is clearly the leader in number of ‘Outstanding’ evaluations and has very few low ratings” </li></ul><ul><li>“ 1st - again - as a very important (or ‘top 5’) research provider” </li></ul><ul><li>“ 1st - again - on the capability of sales professionals. The firm is particularly strong both in the large number of accounts that rate it ‘Excellent’ and in the small number that give it low ratings” </li></ul><ul><li>“ 1st - up from 2nd - on the level of service given by analysts. The firm’s analysts earn both more higher ratings and fewer lower ratings than do competitors” </li></ul>DB Alex. Brown Equity Rankings 1995 1996 1997 1998 Research Quality of Research 1st 1st 1st 1st Creative Investment Ideas 1st 2nd 1st 2nd Most Frequent Analyst Contact (1) * * 1st 1st Most Effective Analyst Calls (1) * * 1st 1st Sales Representative Capability 1st 1st 1st 1st Call Most Often 1st 1st 1st 1st Follow-up Promptly 1st 1st 1st 1st Sales Marketing Skill 1st 1st 1st 1st Access To Management 1st 2nd 1st 1st Sales Underwriting
  29. 29. ABILITY TO COMPLETE TRANSACTIONS IN DIFFICULT MARKETS 75 80 85 90 95 100 105 07/08/1999 07/14/1999 07/20/1999 07/26/1999 07/30/1999 08/05/1999 08/13/1999 08/17/1999 08/23/1999 Internet Index Daily from July 8, 1999 - August 25, 1999 <ul><li>Since June 1, 38 of 103 Internet-related IPOs were priced at or below the midpoint of their initial range </li></ul><ul><li>The low point spanned the two weeks ended August 13 with 28 of </li></ul><ul><li>an expected 61 deals completed. </li></ul><ul><li>During this period, DB Alex. Brown completed 3 of its 4 expected </li></ul><ul><li>IPOs </li></ul><ul><li>These deals have appreciated 65% in the aftermarket </li></ul>Indexed Prices
  30. 30. ABILITY TO COMPLETE TRANSACTIONS IN DIFFICULT MARKETS 11-Jun 18-Jun 25-Jun 2-Jul 9-Jul 16-Jul 23-Jul 30-Jul 6-Aug 13-Aug 20-Aug Weeks Ended Initial Public Offering Trends From June 18, 1999 through August 20, 1999 10 12 17 17 6 10 19 22 12 11 6 5 11 6 2 6 8 6 10 23 11 16 0 5 10 15 20 25 30 35 Number of Deals Completed Number of Deals Not Completed
  31. 31. ABILITY TO COMPLETE TRANSACTIONS IN DIFFICULT MARKETS Percentage of Lead-Managed IPOs Completed August 2, 1999 through August 13, 1999 75% 66% 60% 50% 33% Deutsche Banc Alex.Brown Hambrecht & Quist Goldman Sachs Banc Boston RS Morgan Stanely Dean Witter 50% DLJ 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
  32. 32. ABILITY TO COMPLETE TRANSACTIONS IN DIFFICULT MARKETS After Market Performance of The Lead-Managed IPOs Completed by Deutsche Banc Alex. Brown Offer Price Current Price (as of 8/26/99) After market Performance $8.00 $17.94 124% $15.00 $14.81 -1% $11.00 $19.00 73%
  33. 33. LEADING UNDERWRITER FOR E-COMMERCE COMPANIES 0 5 4 2 0 5 6 10 0 2 4 6 8 10 12 DBAB DLJ H&Q TWP Technology eCommerce iTurf Inc. Marketwatch.com, Inc. NetObjects, Inc. Flycast Communications Autobytel.com, Inc. Private Business, Inc. OneMain.com, Inc. Proxicom, Inc. Ditech Communications Cyberian Outpost, Inc. Digital River, Inc. Terayon Communications Systems Globespan Inc. ZDNet Group Marketwatch.com, Inc. Media Metrix, Inc. Network Access Solutions Neon Systems, Inc. Sagent Technology, Inc. Goto.com Inc. NextCard, Inc. DLJdirect Appnet Systems Inc. SalesLogix Corp. iTurf Inc. Launch Media, Inc. F5 Networks Inc. ESPS, Inc. @plan.inc. nFront, Inc Adforce, Inc. Infospace.com Last twelve months Lead-Managed Internet IPOs
  34. 34. LEADING UNDERWRITER FOR BUSINESS-TO-BUSINESS E-COMMERCE COMPANIES Ariba, Inc. Digital River (lead) DoubleClick, Inc. e2enet (lead)* Flycast Communications (lead) Freeshop.com (lead)* HotJobs.com (lead) Internet Capital Group Yesmail.com (lead)* beFree (lead)* DoubleClick, Inc. Goto.com (lead) @plan, Inc. (lead) Adforce, Inc. (lead) beFree* Careerbuilder, Inc. NetCentives* VerticalNet 5 4 1 3 0 6 2 2 5 6 3 9 0 1 2 3 4 5 6 7 8 9 10 DBAB DLJ H&Q TWP Co Lead Total * Pending Goto.com Inc. Media Metrix, Inc. MapQuest.com Netcentives* Yesmail.com* Last twelve months Lead and Co-Managed Internet IPOs
  35. 35. <ul><li>Deutsche Bank Momentum </li></ul>
  36. 36. <ul><li>Enhanced equity momentum: </li></ul><ul><ul><li>94 deals priced since the merger announcement </li></ul></ul><ul><ul><li>19 deals currently in registration </li></ul></ul><ul><ul><li>$29.7 billion raised since the merger announcement </li></ul></ul><ul><li>Continued Internet Group strength since merger announcement </li></ul><ul><ul><li>Additional Internet Analyst: Jim Marks (e-Finance), Jeetil Patel (e-Tailing), Mark D’Annolfo (Internet IT Services), Connan Laughlin (Internet Healthcare). </li></ul></ul><ul><ul><li>34 Internet equity deals priced since the merger announcement </li></ul></ul><ul><ul><li>12 Internet deals currently in registration </li></ul></ul><ul><ul><li>$4.8 billion raised since announcement </li></ul></ul><ul><ul><li>9 Internet M&A deals completed/pending since the merger announcement </li></ul></ul><ul><ul><li>16 Internet private placements completed/pending since the merger announcement </li></ul></ul>GREATER STRENGTH AFTER THE DEUTSCHE BANK MERGER
  37. 37. <ul><li>Adams Capital Management </li></ul><ul><li>AIG </li></ul><ul><li>AT&T Ventures </li></ul><ul><li>Bell South </li></ul><ul><li>Benchmark Capital </li></ul><ul><li>Bessemer Venture Partners </li></ul><ul><li>Boston Millennia Partners </li></ul><ul><li>CBS </li></ul><ul><li>Charles River Venture Partners </li></ul><ul><li>Comdisco </li></ul><ul><li>Contifinancial Group </li></ul><ul><li>Crosspoint Venture Partners </li></ul><ul><li>FBR Technology Venture Partners </li></ul><ul><li>GE Capital </li></ul><ul><li>General Atlantic Partners </li></ul><ul><li>Generation Partners </li></ul><ul><li>IBM </li></ul>GREATER STRENGTH AFTER THE DEUTSCHE BANK MERGER NBC NextLevel Systems Novell Norwest Venture Partners Particof & Co. Perseus LLC Platinum Venture Partners J&W Seligman Scientific -Atlanta St. Paul Ventures Toshiba U.S. West Van Wagoner Capital Venrock Associates VantagePoint Venture Partners Warburg Pincus Since the announcement of our merger with Deutsche Bank, the following Venture Sources have selected Deutsche Banc Alex. Brown to lead-manage the initial public offerings of their Internet-related companies
  38. 38. DB Alex. Brown advisory assignments announced in the last eight weeks Purchase DB Alex. Brown client in bold. GREATER STRENGTH AFTER THE DEUTSCHE BANK MERGER Target Acquiror Price Allied Signal (laminate business) Rutgers AG 425,000,000 $ Avex Electronics, Inc. Benchmark Electronics 290,000,000 $ Benckiser NV Reckitt & Coleman Plc. 7,400,000,000 $ BOC Air Liquide/ Air Products 11,200,000,000 $ CDNow Columbia House 2,300,000,000 Cendant Corp. Avis Rent-A-Car, Inc. 5,300,000,000 $ Coach USA, Inc. Stagecoach Holdings Plc. 1,240,000,000 $ Corporate Express, Inc. Buhrmann NV 2,300,000,000 $ CRC Evans Pipeline International, Inc. Louisville Gas & Electric Co. 83,200,000 $ Donnelley Marketing (First Data Corporation) Info USA 200,000,000 $ First Marathon, Inc. National Bank of Canada 488,000,000 $ General Industrial Technologies RHI AG 500,000,000 $ Hambo Steel Nabors Industries 582,000,000 $ Host Marriott Services Corp. Autogrill SpA 929,000,000 $ IMEDIA, Inc. Terayon Communication Systems 100,000,000 $ Information Advantage, Inc. Sterling Software Inc. 164,000,000 $ Inn Business Group Plc. Punch Taverns Investments Plc. 107,000,000 $ International Air Parts Corp. Allstar Capital Corp. ND King Ranch Energy, Inc. The St. Mary Land and Exploration Company 60,300,000 $ Mark VII Inc. Ocean Group Plc. 227,000,000 $ Morland Plc. Greene King Plc. 182,000,000 $ Netcore Systems Inc. Tellabs Inc. 575,000,000 $ Outdoor Systems Inc. Infinity Broadcasting Corp. 8,300,000,000 $ Power Circuits, Inc. Pacific Circuits, Inc. ND Sinclair Broadcast Group (43 radio stations) Entercom Communications Corp. 821,500,000 $ Superior Services, Inc. Vivendi SA 1,000,000,000 $ TD Technologies Structural Dynamics Research Corp. 12,600,000 $ Techforce Corp. Equant NV 74,000,000 $ Telogy Netorks, Inc. Texas Instruments 437,000,000 $ Unilab Corporation UC Acquisition Sub., Inc. 420,000,000 $ VWR Scientific Products Corp. Merck KGA 625,000,000 $ Witco Corporation (oleochemicals and derivatives group) SKW Trostberg and Thomas Goldschmidt ND Ontap.com Iturf . 20,000,000 $ $
  39. 39. <ul><li>LifeMinders Positioning </li></ul>
  40. 40. LIFEMINDERS POSITIONING Eminders - e-mail worth reading
  41. 41. LARGE MARKET OPPORTUNITY Source: Direct Marketing Association Total US Marketing 1998 Expenditures = $285 billion Brand Advertising Direct Marketing Direct Marketing is the Largest Segment of U.S. Marketing Expenditures...
  42. 42. LARGE MARKET OPPORTUNITY Source: Jupiter Communications, DB Alex. Brown Research … and the Fastest Growing Segment of Internet Advertising
  43. 43. EVOLUTION OF INTERNET MARKETING SERVICES Access to Individual Customers Degree Of Focus … as Advertisers Seek One-to-One Contact With Customers. Search Engine Banners E-mail Marketing
  44. 44. E-Minders - Cutting Through the Clutter Relevant information High degree of personalization Contextualized marketing message LIFEMINDERS SOLUTION Lower acquisition cost Higher retention Improved response rates Higher ROI
  45. 45. LIFEMINDERS SOLUTION Messages Worth Reading Home Personal Events Personal Finance Family Entertainment Health Pet Auto Personal Events User Profile Interests Address Purchased Information (Weather/Child Development) Sponsor Provided Information (Home Depot ) Editorial Content User Generated Information (Birthdays )
  46. 46. THE POWER OF ONE-TO-ONE MARKETING SERVICES Response Rates 0.5% - 1.0% 1.0% - 2.0% 5.0% - 10.0% 8.0% - 12.0% Search Engine Banners E-mail Marketing Personal Agents
  47. 47. THE POWER OF EMINDERS Clear Benefits Better for Marketers <ul><li>Opt-in consumer controlled </li></ul><ul><li>Value added content </li></ul><ul><li>Highly focused on consumers interests </li></ul>Better for Consumers <ul><li>Trusted “Infomediary” </li></ul><ul><li>Superior response rates </li></ul><ul><li>Rapid response and tracking </li></ul>
  48. 48. POWERFUL CONSUMER DATABASE <ul><li>Deep, Relevant Profiles </li></ul><ul><li>Broad Demographics </li></ul><ul><li>Unusually High Response Rates </li></ul><ul><li>Active, Dynamic Partnerships </li></ul>
  49. 49. ATTRACTIVE BUSINESS MODEL <ul><li>Superior Per Use Economics </li></ul><ul><ul><li>Low Acquisition Cost </li></ul></ul><ul><ul><li>High Lifetime Value </li></ul></ul><ul><li>Proven Effectiveness </li></ul><ul><ul><li>40-50% of Eminders are Opened and Read </li></ul></ul><ul><ul><li>10% Response Rates, Highest in Sector </li></ul></ul><ul><ul><li>Strong Word of Mouth, 1of 3 Sign Up a Friend </li></ul></ul><ul><li>Multiple Expansion Opportunities </li></ul><ul><ul><li>New Categories - Cooking, Computing </li></ul></ul><ul><ul><li>New Revenue Streams - Sponsorship, etc. </li></ul></ul><ul><li>Highly Leverageable Direct Marketing Infrastructure </li></ul>
  50. 50. BROAD ADVERTISER AND PARTNER BASE Advertisers Distribution Partners Opt-In Partners
  51. 51. DRAMATIC GROWTH, POISED FOR FURTHER ACCELERATION ($ millions) Cumulative Profiles by Month Revenues by Quarter ($ millions)
  52. 52. Conclusions <ul><li>Large Market Opportunity </li></ul><ul><li>Differentiated Value-added Strategy </li></ul><ul><li>Attractive Business Model </li></ul><ul><li>Large and Growing Database </li></ul><ul><li>Leverageable Direct Marketing Infrastructure </li></ul><ul><li>Strong Growth and Momentum </li></ul><ul><li>Experienced Management Team </li></ul>LIFEMINDERS, THE E-MAIL CATEGORY KILLER
  53. 53. <ul><li>LifeMinders Valuation </li></ul>
  54. 54. INITIAL PUBLIC OFFERING PROPOSAL <ul><li>$50 Million Public Offering </li></ul><ul><li>Assumes Management Estimates </li></ul><ul><ul><li>2000 Revenue of $35.2 Million </li></ul></ul><ul><ul><li>Long Term Operating Margin of 15% </li></ul></ul><ul><li>Timing: Q4 1999 </li></ul>
  55. 55. VALUATION METHODOLOGY <ul><li>Methodology </li></ul><ul><ul><li>Recent and 6 month average trading levels </li></ul></ul><ul><ul><li>Theoretical P/E multiples, P/E to Growth Rate and Revenues </li></ul></ul><ul><ul><li>IPO discount </li></ul></ul><ul><li>Principal Quantitative Criteria </li></ul><ul><ul><li>Historical and projected revenue and earnings </li></ul></ul><ul><ul><li>Visibility/credibility of forecast </li></ul></ul><ul><ul><ul><li>Revenue ramp rates, sponsorship bookings/ backlog visibility of long-term operating model </li></ul></ul></ul><ul><ul><ul><li>Cost of customer acquisition </li></ul></ul></ul><ul><ul><ul><li>Customer recurring visibility, eyeball traffic, per transaction economics </li></ul></ul></ul><ul><ul><li>Years to break-even </li></ul></ul><ul><li>Principal Qualitative Criteria </li></ul><ul><ul><li>Market growth potential and relative competitive positioning </li></ul></ul><ul><ul><li>Depth, breadth and experience of management team </li></ul></ul><ul><ul><li>Corporate infrastructure (i.e., ability to manage growth) </li></ul></ul><ul><ul><li>Strategic relationships (online and other) </li></ul></ul><ul><ul><li>Quality of Board of Directors </li></ul></ul>
  56. 56. “TEMA” ANALYSIS T heoretical E arnings M ultiple A nalysis What is it? How does it work? 2000 Revenue $35.2 MM Long-term Operating Margin 15% X = Tax Affected 60% X Theoretical Net Income $3.2MM Why does it matter? <ul><li>Revenue multiples do not account for differing margins </li></ul><ul><li>The “per user” methodologies often used to value Internet companies are better employed when valuing companies with regularly paying customers (AOL, @Home, etc.) </li></ul><ul><li>In the E-commerce realm, just because a user is “registered” does not guarantee they will lead to a direct revenue dollar </li></ul><ul><li>In the Internet universe, there are too many uncertainties to give a comforting long-term, NPV-based analysis </li></ul><ul><li>Traditional P/E valuations fail to capture the true potential of an Internet company as it moves from the “scaling” phase into the “harvest and leverage” phase </li></ul><ul><li>TEMA gives us a relative sense for the earnings power of a business based on the revenue that it is delivering near-term </li></ul>
  57. 57. COMPARABLE COMPANY ANALYSIS <ul><li>Capitalizing on growth of advertising </li></ul><ul><li>Similar corporate client base </li></ul><ul><li>Core competency in marketing/data warehousing </li></ul><ul><li>Business to business vs. branded consumer model </li></ul><ul><li>Capitalize on other’s traffic versus own </li></ul><ul><li>Open vs. proprietary networks </li></ul><ul><li>Branded consumer strategy </li></ul><ul><li>Ad-driver revenue stream </li></ul><ul><li>Similar corporate client base </li></ul><ul><li>Proprietary editorial capabilities </li></ul><ul><li>Selling own inventory vs. others </li></ul><ul><li>Limited core competency in </li></ul><ul><li>marketing/data warehousing </li></ul>Marketing Services Content E-Mail Services <ul><li>Capitalizing on growth of e-mail </li></ul><ul><li>Business to bussines solution vs. </li></ul><ul><li>marketing service </li></ul><ul><li>Significant amount of fee based vs. </li></ul><ul><li>ad-based revenue </li></ul>
  58. 58. COMPARABLE COMPANY ANALYSIS
  59. 59. COMPARABLE COMPANY ANALYSIS
  60. 60. LIFEMINDERS VALUATION AT IPO
  61. 61. LIFEMINDERS VALUATION - FULLY DISTRIBUTED
  62. 62. INTERNET SYNDICATE STRATEGY <ul><li>Momentum Drives Internet Valuations </li></ul><ul><li>Few, if Any, Constraints Created by Red Herring Valuation </li></ul><ul><li>Benefits to Compelling Initial Filing Range, </li></ul><ul><li>Risks in Aggressive Initial Valuation </li></ul>Internet Pricing Trends
  63. 63. INTERNET SYNDICATE STRATEGY <ul><li>File without a price </li></ul><ul><li>Print the reds at a compelling valuation </li></ul><ul><ul><li>Get investors to the road show </li></ul></ul><ul><ul><li>Balance current and historical trading levels </li></ul></ul><ul><li>File a second amendment with an increased range: 2-3 days from pricing </li></ul><ul><li>Price at or above the high end of the revised range </li></ul><ul><li>Early trades at least 30% above pricing </li></ul>Syndicate Marketing Model
  64. 64. SYNDICATE STRATEGY: PRICE PROGRESSION Revenue Multiples / Theoretical P/E Multiples Red Herring Momentum Pricing Aftermarket Trading 7.9x / 104.1x 10.3x / 130.5x 6.9x / 92.1x 25% 25% 30% Post IPO Value $293 million $330 million $414 million
  65. 65. ISSUES FOR DISCUSSION <ul><li>Market conditions </li></ul><ul><li>Marketing services calendar </li></ul><ul><ul><li>Additional value metrics </li></ul></ul><ul><li>Projections and long term operating margin </li></ul><ul><li>Brand spending </li></ul><ul><ul><li>Impact on model </li></ul></ul><ul><ul><li>Extent of identification of spending </li></ul></ul><ul><li>Strategic partner extensions </li></ul><ul><li>Completion and make-up of financing round currently being </li></ul><ul><li>marketed </li></ul>
  66. 66. <ul><li>Current IPO Market Conditions </li></ul>
  67. 67. <ul><ul><ul><li>The Internet sector rallied again last week after 4 consecutive weeks of losses. The Inter@ctive Week Internet Index is up over 32.8% YTD and the Bloomberg U.S. Internet Index is up 39.1%. </li></ul></ul></ul><ul><ul><ul><li>Thus far in 1999, there have been 181 IPOs completed for Internet-related companies raising $15.3 billion. In all of 1998, there were 38 IPOs for Internet-related companies raising $1.9 billion. </li></ul></ul></ul><ul><ul><ul><li>It appears that the sector will maintain its dominant presence in the new issuance market. </li></ul></ul></ul><ul><ul><ul><ul><li>The Internet sector rallied again last week after 4 consecutive weeks of losses. The Inter@ctive Week Internet Index is up over 32.8% YTD and the Bloomberg U.S. Internet Index is up 39.1%. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Thus far in 1999, there have been 181 IPOs completed for Internet-related companies raising $15.3 billion. In all of 1998, there were 38 IPOs for Internet-related companies raising $1.9 billion. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>It appears that the sector will maintain its dominant presence in the new issuance market. </li></ul></ul></ul></ul><ul><ul><ul><li>Although the sector has been extremely strong in 1999, some issues have underperformed. </li></ul></ul></ul><ul><ul><ul><ul><li>June 1, 38 of 103 Internet-related IPOs were priced at or below the midpoint of their initial range. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>32% (58 out of 181 deals) of all 1999 Internet-related IPOs are currently trading at or below their issue price, with 45 of those deals trading more than 10% below their IPO price. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Also, 36% (65 or 181 deals) are trading more than 50% off their historical high price. </li></ul></ul></ul></ul><ul><ul><ul><li>Over the last 2 weeks only 15 of the 25 expected Internet related IPOs have been completed. All of the uncompleted deals have been pushed forward into September which may cause additional crowding. Of the 15 completed deals, 7 priced below their filed midpoint. </li></ul></ul></ul>INTERNET IPO MARKET CONDITIONS
  68. 68. * Aftermarket performance is the percent change from offer price to the first weekly closing price. January 1, 1999 through August 20, 1999 WEEKLY INTERNET-RELATED IPO PERFORMANCE % Change File to Offer % Change in Aftermarket
  69. 69. January 1, 1999 through August 20, 1999 WEEKLY INTERNET-RELATED IPO PRICING ACTIVITY Number of Offerings Dollars Raised ($ millions)
  70. 70. January 1, 1999 through August 20, 1999 MONTHLY PRICING RELATIVE TO MIDPOINT OF RANGE
  71. 71. January 1, 1999 through August 20, 1999 MONTHLY AND YTD INTERNET-RELATED IPO PERFORMANCE
  72. 72. January 1, 1999 through August 20, 1999 MONTHLY INTERNET-RELATED IPO PRICING ACTIVITY ($ millions) Number of Offerings Dollars Raised
  73. 73. THE IPO MARKET HAS BEEN NARROW IN 1999 Percent Change Price Vs. Midpoint Internet-Related Non-Internet Related Percent Price Change Offer/Current Dollars Raised Number of Deals As of 8/20/99 ($ billions) As of 4/9/99 As of 8/20/99 As of 4/9/99 ($ billions) As of 8/20/99 As of 4/23/99 As of 8/20/99 As of 4/9/99
  74. 74. Internet-Dominated IPO Backlog THE IPO MARKET HAS BEEN NARROW IN 1999 Dollars Filed Number of Deals As of 4/9/99 As of 4/9/99 Dollars Filed Number of Deals As of 4/9/99 As of 4/9/99 Internet-Related Non-Internet Related ($ billions) ($ billions) As of 8/20/99 As of 8/20/99 As of 8/20/99 As of 8/20/99
  75. 75. <ul><li>M&A Capabilities </li></ul>
  76. 76. DEUTSCHE BANC ALEX. BROWN M&A CREDENTIALS Worldwide Completed M&A Transactions Since January 1, 1996 0 200 400 600 800 1,000 1,200 Morgan Stanley DW Goldman Sachs Deutsche Bank Merrill Lynch Salomon Smith Barney Warburg Dillon Read CS First Boston DLJ JP Morgan Lehman Brothers Number of transactions Source: Securities Data Corporation. Credit to both target and acquirer advisers. Excludes accounting firms. 1,027 1,019 996 981 980 866 833 729 680 615
  77. 77. FULL RANGE OF TRANSACTION SIZES Source: Internal data from January 1, 1996 to June 30, 1999. Aggregate Value ($ millions) Transaction Size Number of Completed M&A Transactions $1 Billion and Up $500MM - $999MM $250MM - $499MM $50MM - $249MM $0 - $49MM Undisclosed 74 79 124 326 196 197 $260,133 $53,795 $42,265 $41,215 $4,276 -- Deutsche Banc Alex. Brown has particular expertise in executing transactions for start-up and growth companies in the middle market.
  78. 78. Internet and Technology M&A Transactions Since January 1, 1996 *Source: Securities Data Corp. Transactions greater than $50 million. Excludes Deutsche Bank transactions. Data as of December 31, 1998. LEADING INTERNET AND TECHNOLOGY M&A ADVISOR 39 43 61 61 37 32 32 32 DMG H&Q DB Alex.Brown Morgan Stanley DW Broadview Merrill Lynch BB Rob Stephens Sal. Smith Barney Lehman Goldman, Sachs 59 43 0 10 20 30 40 50 60 70

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