Doing Business in the USA Mid-Market M&A Mr. Thomas M. Braun Executive Vice President The March Group

Introduction The March Group Leading global investment banking firm specializing in mergers, acquisitions, divestitures and capital raising for the U.S. private mid-market Offices throughout North America 23+ years of mid-market experience

The March Group

Leading global investment banking firm specializing in mergers, acquisitions, divestitures and capital raising for the U.S. private mid-market

Offices throughout North America

23+ years of mid-market experience

Events of the Day Attributes of the market Benefits to buyers worldwide Current acquisition and investment climate U.S. Private Mid-Market

Attributes of the market

Benefits to buyers worldwide

Current acquisition and investment climate

Keynote Speaker Arthur Ward, Jr. VP, M&A Advisor The March Group Over three decades of successful business experience as an entrepreneur, negotiator and corporate executive As an entrepreneur, acquired, grew and sold six midsize companies. Deal-making experience spans 20 years and includes 2,000+ transactions As a corporate executive, served as IBM senior manager and Exxon senior vice president. At IBM, developed strategies to ensure effective, profitable introduction of new products and services. At Exxon, led development and implementation of business growth strategy resulting in acquisition of 33 companies in four years

Over three decades of successful business experience as an entrepreneur, negotiator and corporate executive

As an entrepreneur, acquired, grew and sold six midsize companies. Deal-making experience spans 20 years and includes 2,000+ transactions

As a corporate executive, served as IBM senior manager and Exxon senior vice president. At IBM, developed strategies to ensure effective, profitable introduction of new products and services. At Exxon, led development and implementation of business growth strategy resulting in acquisition of 33 companies in four years

Keynote Speaker Arthur Ward, Jr. VP, M&A Advisor The March Group Art Ward has been quoted in dozen of business publications, including The Chicago Tribune, Business Week, Nation’s Business, Florida Trend and Inc. Magazine . He is a fellow of the Reed Institute of Chicago and has spoken to hundreds of groups.

Art Ward has been quoted in dozen of business publications, including The Chicago Tribune, Business Week, Nation’s Business, Florida Trend and Inc. Magazine .

He is a fellow of the Reed Institute of Chicago and has spoken to hundreds of groups.

Acquisition Opportunities Why Invest in the U.S.? Why the Mid-Market? Current Trends

Why Invest in the U.S.?

Why the Mid-Market?

Current Trends

Attributes Scale Economy Labor Market Culture Growth Trends Exchange Rates

Scale

Economy

Labor Market

Culture

Growth Trends

Exchange Rates

Scale Population (millions) Per Capita GDP per capita income Source: IMF, 2007 GDP ($ tt) Consumer Base U. S. 305 $45,845 13.9 Germany 82 $34,181 2.8 U. K. 61 $35,134 2.1 France 64 $33,281 1.9 Ireland 5 $43,144 1.8 Italy 59 $30,448 1.8 Spain 46 $30,120 1.3 Canada 34 $38,400 1.3

Scale World GDP: U.S. represents 26% U.S. and Canada represent 29% Source: IMF, 2007

World GDP:

U.S. represents 26%

U.S. and Canada represent 29%

Deal Activity Global M&A Transactions Source: Mergerstat Review, 2006, 2007, 2008

Labor Market Source: The Economist, Pocket World in Figures, 2008 Edition Employment Costs for production employees: $ per hour

Labor Market Source: OECD Factbook 2008: Economic, Environment and Social Statistics Percent of labor cost per employee:

Labor Market Source: OECD Factbook 2008: Economic, Environment and Social Statistics Percent of workforce with advanced education:

Labor Market Source: 2007 Global Competitiveness Report Percent of workforce that are union members:

Exchange Rates Source: Oanda.com The U.S. Dollar Two years ended January 1, 2009, the dollar has declined… 5% against the pound sterling 14% against the Euro The U.S. is on sale!

The U.S. Dollar

Two years ended January 1, 2009, the dollar has declined…

5% against the pound sterling

14% against the Euro

The U.S. is on sale!

Private mid-market Over 1 million mid-market companies in the US Revenues up to $500 million Make up 80% of US economy Make up 88% of all deals done (by volume) in the U.S. Source: Dun & Bradstreet

Over 1 million mid-market companies in the US

Revenues up to $500 million

Make up 80% of US economy

Make up 88% of all deals done (by volume) in the U.S.

U.S. Mid-Market 99.6% Private 1,037,880 companies 0.4% Public 4,163 companies Source: Dun & Bradstreet, 2007 Turnover: $2M – $500M > 1m companies

Mid-Market M&A Strategic buyers looking for smaller targets Ease of finance Ease of board approval Shareholders apprehensive towards larger deals Relatively fewer integration issues Risk spread across number of smaller deals Empirical data supports better returns

Strategic buyers looking for smaller targets

Ease of finance

Ease of board approval

Shareholders apprehensive towards larger deals

Relatively fewer integration issues

Risk spread across number of smaller deals

Empirical data supports better returns

Mid-Market M&A Over a 20 year horizon, small buyouts returned 25% versus 11% for mega buyouts Source: http://money.cnn.com/2007/04/11/magazines/fortune/demos_privateequity.fortune/index.htm ROI

Over a 20 year horizon, small buyouts returned 25% versus 11% for mega buyouts

Mid-Market Transactions Deals Closed Below $500 Million Source: Mergerstat Review 2008 and Mergerstat Review 2006

Mid-Market Transactions Percentage of Deals with Disclosed Value by Range Source: Mergerstat Review 2008 and Mergerstat and Mergerstat Review 2006 Deal Value (US$MM) $0 - $25 $25 - $50 $50 - $100 $100 - $500 Over $500

Mid-Market Transactions Type of Payment Other Stock Combination Cash 47% 31% 21% 1% Source: Mergerstat Review 2008

Offshore Transactions Involving Private Target Companies: 1984 – 2007 Source: Mergerstat 0% 10% 20% 30% 40% 50% 60% 70% 80% '84 '85 '86 '87 '88 89 ‘ 90 ‘ 91 ‘ 92 '93 '94 '95 '96 '97 '98 '99 ‘ 00 ‘ 01 ‘ 02 '03 '04 Percentage of Global Transactions 90% '05 '06 '07

Offshore Transactions 31% 16% 18% 27% 8% $0 - $25 $25 - $50 $50 - $100 $100 - $500 Over $500 Source: FactSet Mergerstat Custom Report Deal Value (US$MM)

The Acquisition Process Identification of Target Local Incentives Confidentiality Agreement Financing Alternatives Confidential Discussions/ Negotiations Letter of Intent or Term Sheet? Due Diligence Additional Negotiations Purchase Agreement Pre-Closing Closing Post-Closing Integration with Purchaser Similar to Acquisitions around the globe

Summary Tremendous opportunity No better time than now Currency Exchange Rates Tax Rates Interest Rates Baby Boomer Bonanza for Buyers North American Private Middle Market

Tremendous opportunity

No better time than now

Currency Exchange Rates

Tax Rates

Interest Rates

Baby Boomer Bonanza for Buyers

Baby Boomer Bonanza “ The baby boomer generation is aging. Over the next 10-15 years small businesses will be sold at a pace that dwarfs any previous activity… In the next 10 years, however, we will be moving into a buyer’s market .” San Antonio Business Journal, 2007

“ The baby boomer generation is aging. Over the next 10-15 years small businesses will be sold at a pace that dwarfs any previous activity…

In the next 10 years, however, we will be moving into a buyer’s market .”

San Antonio Business Journal, 2007

The March Group — An Overview Mr. Art Ward, Jr. Vice President The March Group January 14, 2009

The March Group – Overview A leading global investment banking firm for the private middle market Offering unique coverage across the U.S. and around the world Primary focus: North American private companies with Revenues up to $200m Profitable operations 23+ years in the mid-market

A leading global investment banking firm for the private middle market

Offering unique coverage across the U.S. and around the world

Primary focus: North American private companies with

Revenues up to $200m

Profitable operations

23+ years in the mid-market

The March Group – Overview We specialize in North American and trans-Atlantic mid-market M&A and Corporate Finance The best access to the North American mid-market Insight into thousands of private companies Relationships with thousands of US buyers, investors and access to their multi-company portfolios

We specialize in North American and trans-Atlantic mid-market M&A and Corporate Finance

The best access to the North American mid-market

Insight into thousands of private companies

Relationships with thousands of US buyers, investors and access to their multi-company portfolios

The March Group: A Deeply Resourced Organization Offices North American HQ: South Florida Additional offices throughout the world Professionals Over 175 professionals & support staff Research team dedicated to the mid-market and niche industries Experienced dealmakers Hundreds of years of cumulative experience

Offices

North American HQ: South Florida

Additional offices throughout the world

Professionals

Over 175 professionals & support staff

Research team dedicated to the mid-market and niche industries

Experienced dealmakers

Hundreds of years of cumulative experience

The March Group Currently in the market with over 250 mandates in over 50 different industry niches We assist buyers and investors in making sense of the North American mid-market and identify appropriate targets and opportunities

Currently in the market with over 250 mandates in over 50 different industry niches

We assist buyers and investors in making sense of the North American mid-market and identify appropriate targets and opportunities

We assist in arranging financing either in the US or Europe either at the parent level or at the acquisition target level We assist when other major investment banks have no interest in the transaction The March Group

We assist in arranging financing either in the US or Europe either at the parent level or at the acquisition target level

We assist when other major investment banks have no interest in the transaction

North American Coverage

General Industry Coverage Agriculture, Forestry & Fishing 0.5% Building Materials & Construction 17% Manufacturing 24% Transportation, Utilities & Communications 6% Wholesale & Retail 26% Finance, Insurance & Real Estate 0.5% Services 26% Aerospace Trucking & automotive Logistics Financial services Consulting Food Metals & mining Energy & utilities Biotechnology Telecom, cable, & wireless Printing & publishing Textiles, fabrics, materials Retail services Business Services Chemicals Hospitality Technology Building products Construction services Engineering Machining & tools Textiles Paper & packaging Paints & coatings Agricultural equipment Measuring devices Environmental services Software Staffing Security systems Healthcare services Architecture Wholesale distribution Consumer products Industry Sub-Sectors

Aerospace

Trucking & automotive

Logistics

Financial services

Consulting

Food

Metals & mining

Energy & utilities

Biotechnology

Telecom, cable, & wireless

Printing & publishing

Textiles, fabrics, materials

Retail services

Business Services

Chemicals

Hospitality

Technology

Building products

Construction services

Engineering

Machining & tools

Textiles

Paper & packaging

Paints & coatings

Agricultural equipment

Measuring devices

Environmental services

Software

Staffing

Security systems

Healthcare services

Architecture

Wholesale distribution

Consumer products

Capabilities MAXIMIZE VALUE Mergers & Acquisitions Capital Raises Leveraged Buyouts Divestitures Cross-Border Valuations

Expertise – Sell-side North American privately owned middle-market companies where owners want to retire or to diversify North American private equity backed businesses which are part of a maturing portfolio US ‘orphan’ / non-core businesses owned by large multi-nationals

North American privately owned middle-market companies where owners want to retire or to diversify

North American private equity backed businesses which are part of a maturing portfolio

US ‘orphan’ / non-core businesses owned by large multi-nationals

Expertise – Buy-side Identifying and managing the acquisition process for North American targets on behalf of U.K. And EU groups Introducing U.K. And EU targets to US strategic and financial groups interested in offshore deals and managing the acquisition process Capital raising in North America for US and EU companies to support acquisitions and introducing the acquirer to new sources of financing

Identifying and managing the acquisition process for North American targets on behalf of U.K. And EU groups

Introducing U.K. And EU targets to US strategic and financial groups interested in offshore deals and managing the acquisition process

Capital raising in North America for US and EU companies to support acquisitions and introducing the acquirer to new sources of financing

Why The March Group? Mandate matching seller inventory ready for acquisition On the ground value assessment Multiple funding options and choices Accelerated closing resources Coverage in all major North American markets

Mandate matching seller inventory ready for acquisition

On the ground value assessment

Multiple funding options and choices

Accelerated closing resources

Coverage in all major North American markets

Typical Acquisition Timeline Research Solicitation 2-3 Months Information Gathering LOI Due Diligence & Closing Typically 3-5 Months Process & Timetable Engage The March Group Confirm acquisition criteria Research target population meeting acquisition criteria Present target profiles Prioritize targets Confirm tactics for approaches Create buyer overview Make approaches to agreed prioritized targets Provide result feedback Determine if genuine sellers Introduce buyer Obtain financial and commercial information Assess and visit Evaluate and determine whether to submit LOI Submit LOI Negotiate LOI Countersign LOI Coordinate due diligence process and timescale Start exclusivity period Explore financing if necessary Continue negotiation of legal documentation Complete due diligence Raise capital if necessary Plan integration Close

Engage The March Group

Confirm acquisition criteria

Research target population meeting acquisition criteria

Present target profiles

Prioritize targets

Confirm tactics for approaches

Create buyer overview

Make approaches to agreed prioritized targets

Provide result feedback

Determine if genuine sellers

Introduce buyer

Obtain financial and commercial information

Assess and visit

Evaluate and determine whether to submit LOI

Submit LOI

Negotiate LOI

Countersign LOI

Coordinate due diligence process and timescale

Start exclusivity period

Explore financing if necessary

Continue negotiation of legal documentation

Complete due diligence

Raise capital if necessary

Plan integration

Close

Prepared Sellers Financially Committed Clients pay a sizable retainer prior to buyers being contacted Reasonable Expectations Clients receive a detailed valuation prior to buyers being contacted Efficient Process Financial information and other due diligence items are professionally prepared in advance Constantly adding new deal flow New sellers acquired monthly

Financially Committed

Clients pay a sizable retainer prior to buyers being contacted

Reasonable Expectations

Clients receive a detailed valuation prior to buyers being contacted

Efficient Process

Financial information and other due diligence items are professionally prepared in advance

Constantly adding new deal flow

New sellers acquired monthly

Access to Sellers www.corporations4sale.com www.corporations4sale.com/comingattractions

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