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  1. 1. Capstone Partners Investment Banking Advisors WALL STREET EXPERTISE – BUILT FOR THE MIDDLE MARKET ™ BRIDGING THE GAP
  4. 4. TRANSACTION SERVICES INTEGRATED EXPERTISE Capstone has created a uniquely focused firm that has been built specifically for the needs of middle-market entrepreneurs. Our integrated capabilities allow Capstone to deliver expertise throughout all aspects of a transaction – strategy development, pre-planning, positioning, execution, negotiations, structuring, closing, wealth preservation and risk management. SALES & DIVESTITURES ACQUISITION ADVISORY PRIVATE PLACEMENTS Capstone is one of the most active and aggres- Our client-partners run the gamut from acquisi- Beyond our ability to make direct investments, sive middle-market investment banking firms tive middle-market companies to the Fortune Capstone assists companies with securing in the country. We specialize in liquidity events 1000. Capstone dedicates significant resources growth and acquisition capital. Through our and pride ourselves in representing “David to its buy-side advisory business. We leverage registered broker dealer, we have established v. Goliath” – the privately owned business our industry research initiatives to help our close relationships with the leading venture negotiating with the large, blue chip acquirers client-partners identify and prioritize various capital and private equity firms globally. and investors. potential acquisition opportunities. By marrying Capstone works with companies to engineer these opportunities to the criteria of our client- We have been successful in executing liquidity the optimal long-term capital structure across partners, we have the ability to facilitate and transactions at premium valuations for numer- various sources of available debt and equity successfully complete acquisition programs. ous #1 ranked companies and marquee private capital, including: investment firms in the following transactions: Through our frequent involvement in the stra- Bridge Financing: short term debt financing tegic planning processes of our client-partners, Sales: providing a full exit strategy for owners with equity enhancers Capstone is able to proactively approach target and investors while securing the optimal long- companies that fill our client-partners’ strategic Senior Secured Debt: term debt leveraged term strategic partner for the company acquisition needs. Our buy-side capabilities against fixed assets Recapitalizations: achieving partial liquidity to include: Senior Unsecured Debt: term debt leveraged diversify ownership risk and secure additional 4 Strategic Planning against future cash flows capital to accelerate growth opportunities 4 Market Research Mezzanine Debt: subordinated debt with PIK Divestitures: the sale of portfolio companies, options and equity warrants divisions or assets that are non-core to gener- 4 Target Identification ate growth capital and maintain a focused Preferred Stock: equity capital with priority 4 Valuation & Structuring business strategy liquidation and protective rights 4 Transaction Management Mergers: combining companies to establish Common Stock: equity capital with rights on a more competitive entity by filling strategic 4 Business Due Diligence par with existing shares gaps in market presence, sales force and 4 Negotiations & Closing distribution channels
  5. 5. ADVISORY SERVICES BOARD ADVISORY INDUSTRY RESEARCH CORPORATE VALUATIONS Capstone is committed to forging long-term At the heart of Capstone’s transaction execution Because we are constantly active in the capital relationships with leading companies in capabilities is our commitment to research- markets and deeply knowledgeable within the industries we cover. We invest in these centric industry expertise. Our unique approach specific industries, Capstone is in a unique relationships by helping owners, investors delivers proprietary market intelligence to help position to provide market based valuation and and management teams develop the business our clients engineer the best transactions under appraisal advisory services to shareholders, in a manner which will maximize the long-term the optimal market conditions. boards of directors and other interested parties. equity value of the firm. The research we develop - and the intelligence Our valuations and fairness opinions can be Our strategic advisory services have been it yields - provides board members, investors used for a variety of purposes, including: developed to deliver deep industry and capital and other shareholders with real-time, real- 4 Mergers & Acquisitions markets expertise combined with seasoned world insights on emerging industry dynamics operational perspectives. We help formulate and transaction trends. Leveraging this intel- 4 Corporate Sales & Divestitures and execute strategies across the enterprise, lectual capital base, Capstone works to ensure 4 Purchase & Sale Agreements including: precise market timing and asset positioning with immediate access to key decision makers. 4 Liquidation & Insolvency Analyses Market Analysis: assessing emerging trends and implications on the business Ultimately, we utilize our research team 4 Purchase Price Allocations to deliver the industry knowledge that pre- 4 Stock Options & ESOPs Competitive Positioning: determining how qualifies transactions to maximize probability value is being created 4 Expert Opinions & Testimony and speed to closure. Strategic Growth Plan: formalizing short and 4 New Investments & Financings We deliver our market intelligence via two long-term growth initiatives forms of research: 4 Joint Venture Agreements Capital Markets Monitoring: tracking Coverage Reports: provide a robust view 4 Dispute Avoidance/Resolution transaction activity for optimal timing of various capital market dynamics Capital Budgeting: developing rigor around 4 Estate Planning & Gifting Sector Snapshots: offer a preview into capital management SUPERIOR the markets we serve Opportunity Assessment: defining market, TRANSACTION product and distribution initiatives Special Projects: responding to ad hoc CLOSURE RATES decisions and analyses Capstone is able to post superior transaction closure rates because we dedicate our resources to three specific industry INDUSTRY COVERAGE verticals. Within these industry vertical groups, Capstone has forged deep relationships with the leading acquirers and investors while also maintaining real-time intimacy with emerging sector trends and transaction strategies. 1 EDUCATION & TRAINING CONSULTING & SOLUTIONS PROCESS OUTSOURCING Allied Health Engineering Services Facilities Management Allied Trade IT Services Human Resources BUSINESS Cosmetology/Spa Management Consulting Specialty Distribution SERVICES Information Technology Professional Marketing Services Research & Testing Supply Chain Management Third Party Logistics Technical Staff Augmentation Transaction Processing 2 CONSUMER INDUSTRIAL HEALTH & MEDICAL SPECIALTY Automotive Aftermarket Food & Beverage Building Products Connectors & Components Medical Devices Supplies & Equipment PRODUCTS Health & Beauty Home & Garden Electrical Equipment Motion & Flow Control Diagnostics Home Care Specialty Retail Tools & Instrumentation Imaging Sports & Leisure Testing & Assembly Life Sciences 3 SOFTWARE MEDIA & INTERNET COMMS & NETWORKING Enterprise Content Creation Electronic Instruments TECHNOLOGY Infrastructure Financial Services Content Management Data Analytics Network Equipment Semiconductors & MEDIA Healthcare Digital Media & e-Marketing Semi Cap Equipment Public Safety Direct Marketing & Printing Telecom Equipment Security Retail & Entertainment Wireless Infrastructure
  6. 6. OUR PHILOSOPHY CAPSTONE IS ENGAGED TO CLOSE TRANSACTIONS that are typically among the most critical corporate events our client-partners experience. As a firm, Capstone understands the impact that these transactions can have on the business as well as the personal lives of our client-partners. To our knowledge, Capstone’s transaction closure rate is amongst the highest in our industry. We engage in a limited number of transactions and only accept new client-partners if we are confident enough to make our own investment. As a team, we subscribe to professional values that we feel make a difference in our client-partner relationships and the quality of their representation in the marketplace. GRIT WE ROLL UP OUR SLEEVES AND WORK WHILE OTHERS REST OUR PERFECTION WE MANAGE EVERY TRANSACTION AS IF IT WERE OUR OWN COMMITMENT… FORESIGHT WE STAY A STEP AHEAD IN BOTH THEORY AND EXECUTION INTEGRITY WE TREAT PEOPLE WITH CANDOR AND RESPECT PASSION WE COME TO PLAY AND GIVE 100% SUCCESS WE BUILD VALUE AND STRIVE TO OVER-DELIVER
  7. 7. OUR LEGACY CAPSTONE’S PRACTICE WAS FOUNDED IN THE 1990’S when, as part of Arthur Andersen, we built one of the fastest growing, most successful middle-market corporate finance practices in the country. Since spinning the practice out of Andersen, we have continued to engineer highly successful transactions for our client-partners. Capstone’s success and growing reputation have attracted some of the industry’s best senior executive talent. We have expanded our team by drawing upon many of the leading financial advisory firms in the world, with collective talents sourced from such firms as Lehman Brothers, Morgan Stanley, Montgomery Securities, Banc of America Securities, SG Cowen and Robertson Stephens, among others. This ensures that our client-partners receive the expert advice that they deserve. Today, we possess over 100 years of transac- tion experience, spanning hundreds of M&A and financing transactions valued in excess of $25 billion. As a result of our efforts to build a leading middle-market firm, Capstone has gained recogni- tion among the industry’s elite. Over the past three years, Capstone has ranked in the Top 20 nation- ally, and Top 3 regionally, among the “Most Active Investment Banking Firms.” WE PRIDE OURSELVES ON OUR COMMITMENT TO MIDDLE-MARKET …MAKES THE COMPANIES : CAPSTONE DIFFERENCE WILL DELIVER THE BEST TEAM AND THE HIGHEST QUALITY EXECUTION AVAILABLE IN THE MARKET.
  8. 8. C L I E N T- P A R T N E R T E S T I M O N I A L S ACROSS 10 TRANSACTION COMPETENCY CATEGORIES, OUR CLIENT- PARTNERS HAVE RATED CAPSTONE’S PERFORMANCE ON THEIR TRANSACTIONS AT A CUMULATIVE 93% SATISFACTION LEVEL. Has been Has recapitalized acquired by with “I have used a number of investment banks over MEDTRONIC, INC. FIDELITY CAPiTAL the past 17 years including Merrill Lynch, Goldman (NYSE: MDT) INVESTORS Sachs and DLJ amongst others and the Capstone team not only far exceeded my expectations, but also clearly outperformed any of those firms.” John Calnan E-Mon Energy Monitoring Products CFO, Shareholder netDecide Corporation, VA Has been Has been acquired by acquired by “Capstone demonstrated passion from the start; BRANFORD CASTLE, REGIS CORPORATION this deal was going to get done! The key to this INC. (NYSE: RGS) transaction was their creative problem solving capabilities – obstacle by obstacle. This trans- action would not have been completed without Capstone and I am looking forward to working with them again.” Has recapitalized with Has been acquired by Marc Goldberg OUR General Partner BioVentures Investors, LLC, MA GREY MOUNTAIN PARTNERS LLC SUNGARD DATA SYSTEMS, INC. (NYSE: SDS) COMMITMENT… “I was very impressed with Capstone’s rapid turnaround time. They always seemed to be first out of the gate in identifying the most prominent transaction issues and recommending solutions. Their approach was unassuming and intelligently Has divested Acquisition focused. The quality of the advice Capstone assets to advisory provided us was outstanding.” Richard Lockman MEDTRONIC, INC. FIRST ENERGY Principal Shareholder (NYSE: MDT) CORPORATION Ross Learning LLC, MI “Capstone has a style and approach that is remarkable to watch. They have a way of rop- ing in wayward issues with complete finesse. Acquisition advisory Has divested assets to Bottom line – a phenomenal job. We did not have one moment of regret in our decision to engage Capstone.” ALTAWORKS ROMEO RIM, INC CORPORATION THE RESERVE GROUP Peter Pierce CEO, Principal Shareholder Punch Software, MO
  9. 9. C L I E N T- P A R T N E R T E S T I M O N I A L S OUR CLIENT-PARTNERS BELIEVE STRONGLY THAT CAPSTONE MAXIMIZED THE VALUE OF THE COMPANY (92%) AND INCREASED THE PROBABILITY OF TRANSACTION CLOSURE (96%). Has been Has recapitalized acquired by with “My transaction has become noted as the best in the industry. Capstone did it. What more can I say REGIS CORPORATION INSIGHT VENTURE about them?” (NYSE: RGS) PARTNERS Henri Blaine CEO, Principal Shareholder Blaine Career Schools, MA “I have been involved in numerous transactions Has been Acquisition throughout my long career. I chose Capstone acquired by advisory because they understood the industry and, most importantly, their senior officers committed their CASTLE ISLAND ALAN JAMES full personal participation. That commitment PARTNERS, LLC GROUP made a big difference for us. I give Capstone top marks across the board.” Leon Hirsch Former CEO, U.S. Surgical Corporation General Partner, JHK Investments, LLC, CT Has been Has secured acquired by $9,500,000 “I hired Capstone because of their track record and industry focus, which I believe made a difference. INFORMA GROUP PLC (LSE: INF.L) SERIES B SENIOR PARTICIPATING CONVERTIBLE PREFERRED STOCK Capstone committed their best resources to us and delivered. The personality and professionalism of the firm are stellar.” Arnold Heinrich CEO, Principal Shareholder SBPA Systems, TX Has been Has been acquired by acquired by “I was very pleased with Capstone’s ability to negotiate COLLEGIATE FUNDING on our behalf. Capstone has demonstrated a real RESPIRONICS, INC. SERVICES, INC. (NASDAQ: CFSI) commitment to clearly understand our expectations and requirements as we continue our use of M&A as …MAKES THE a core strategy. This desire to be close partners will ensure that our M&A efforts go smoothly. I look forward to using Capstone again as a core member DIFFERENCE of our M&A team.” Has recapitalized Has been with acquired by Alain Cohen President and CTO OPNET Technologies, Inc., MD THE RIVERSIDE FRIEND SKOLER COMPANY & CO.
  10. 10. OUR PEOPLE LEADERSHIP TEAM With our proven track record of success and a commitment to excellence, our entire team is dedicated to delivering superior results while creating maximum value for our client-partners. John is the founder and Chief Executive of Capstone. Over his extensive career in investment banking, venture capital and management consulting, John has executed over 100 related engagements representing in excess of $6 billion in value. John was formerly a Regional Managing Partner with Andersen Corporate Finance, John Ferrara where he founded the Boston office and held various national and global President, Managing Partner leadership positions. He started his career in Lehman Brothers’ M&A group in New York, London and Riyadh. John later became a founding member of Rodman & Renshaw’s M&A practice in New York. After a break to compete in Australian semi-professional baseball, John joined the Deloitte Consulting Group in Los Angeles. While with Deloitte, he focused on turnaround and interim management engagements to develop refined operations, strategy and finance expertise. John earned his MBA in Entrepreneurial Studies from the Anderson School at UCLA and the London School of Economics, during which time he founded and operated a corporate advisory boutique, JG Atlas Advisors, and its related investment fund, Atlantis Capital Partners. He holds dual BA degrees from Wesleyan University and is qualified as a General Securities Principal. ”We always received top-notch advice, with outstanding industrywould have puntedforesight, and ferocious attention to detail. Senior knowledge, good level attention remained at 100% throughout when other firms to a junior associate. Enrique Marroquin, ” Director of Finance, Hunt Power, L.P., TX ”Theirhad a significantly was very impact on theus. During Managing Director wasmadethe trenches with usononpositioning andduring thetiming that industry expertise positive important to deal. The the transaction, they in recommendations a daily basis market most critical aspects of the process. Capstone provided us with the trusted, objective advice and technical experience we were looking for. Jim Cegelski, CEO and Principal Shareholder, Accessories Marketing, Inc., CA ” ”Iinto a perfectlyrun a business, but very little about how to sell one. the processatthat honest, confidentialconfidence toneeded. We always felt knew how to timed marketplace. There were many times during The team Capstone gave me the advice was proceed with speed comfortable that we could trust Capstone with anything. You need that support during one of the most significant events that will ever happen in your lifetime. ” Edward Caselden, Chief Executive Officer, L-Com, Inc., MA
  11. 11. Tim has over 18 years of experience in mergers and acquisitions, private and public capital raising and principal investing. He leads Capstone’s Technology and Media industry practice and is a member of the firm’s Board of Directors. Tim has successfully completed more than 70 strategic advisory and Timothy Harned capital raising assignments, focusing on several sectors including Head of Technology & Media communications equipment and data communications/networking, telecommunications services, financial services, application software and semiconductors. Prior to joining Capstone, Tim was an Executive Director at Morgan Stanley, focusing on building strategic advisory and financing-based relationships with technology companies in the New England area. Tim also served in senior positions at Banc of America Securities and Montgomery Securities where he was instrumental in building their east coast technology investment banking practices. Tim began his career at Lehman Brothers spending five years in the firm’s M&A group. He earned his MBA from the University of North Carolina at Chapel Hill and his AB from Kenyon College. Kevin has over 14 years of investment banking, syndicated bank loan and corporate finance experience. He leads Capstone’s Specialty Products industry practice and is a member of the firm’s Board of Directors. Prior to joining Capstone, Kevin was in the Investment Banking Group at Adams Harkness, where he completed over 20 transactions including Kevin Jolley private placements, public offerings, mergers and acquisitions and Head of Speciality Products advisory assignments. He also served as an Associate in the Debt Capital Markets Group at FleetBoston Robertson Stephens, Inc. Before FleetBoston, Kevin was at Textron Inc. where he worked in the Strategic Planning, Internal Audit and Mergers & Acquisitions departments. He also has four years of finance experience with Oracle Corporation. Kevin received his MBA from the University of Pennsylvania’s Wharton School and his BA from Brown University. He is qualified as a General Securities Representative. Mark is the head of Capstone’s Business Services industry practice and is a member of the Board of Directors. He has over 18 years of investment banking transaction experience involving middle market companies. Prior to joining Capstone, Mark served as a Managing Director in the investment banking division of Adams Harkness, Inc. He joined Adams Mark Young Harkness in 1988, helping to establish their corporate finance practice Head of Business Services as well as their public company M&A and lead-managed equity financing capabilities. Mark served as the head of Adams Harkness’ west coast office and was a key contributor to the firm’s growth and investment banking strategy, having founded and managed the Adams Harkness Technology Manufacturing Solutions franchise that became one of the firm’s most successful banking efforts. During his tenure, Mark participated in more than 100 assignments across multiple industries, including industrial manufacturers and service providers, consumer products, healthcare and technology. Mark earned his BA from the University of Virginia and is qualified as a General Securities Principal.
  12. 12. OUR VALUE WHY CAPSTONE? NATIONAL PRESENCE Capstone has built its reputation in the market amongst leading acquirers and investment firms based upon the quality of the companies we represent. We have earned a reputation with our client-partners based upon the quality of that representation. Partnering with Capstone yields CLIENT SITES the following benefits: ALIGNMENT PERFORMANCE RATINGS Capstone puts its own capital at risk and prefers to At the conclusion of each transaction, be compensated based only on our success. Our Capstone seeks immediate and direct feedback client-partners benefit from having advisors that from our client-partners. We ask them to rate our stand behind their value. expertise across 10 core transaction competencies on a scale of 100%. EXPERTISE GENERAL PERFORMANCE Capstone was the right investment banking partner 98% Capstone is industry focused with deep relationships for our transaction. in the sectors we cover. Our client-partners benefit Capstone exceeded our expectations with respect to 90% from precise positioning and immediate access to key effort and results. market decision makers. PROFESSIONAL REPRESENTATION Capstone delivered senior level attention during 98% DEDICATION each stage of our transaction. Capstone represented us with passion, commitment 96% and integrity. Each transaction is staffed with our most senior professionals. Our client-partners benefit from the INDUSTRY EXPERTISE creative skills that our seasoned deal teams bring Capstone demonstrated a deep understanding of 90% to the table. our industry. Capstone positioned our company well to the right 91% PRESENCE audience. TRANSACTION EXPERTISE Capstone maintains active relationships with the Capstone accessed key decision makers and 92% leading acquirers and investors across the U.S. and delivered competitive bids. abroad. Our client-partners benefit from our exhaustive Capstone delivered technical deal expertise and 94% distribution capabilities. negotiated effectively. TRANSACTION RESULTS Capstone maximized the value of our company. 92% Capstone increased the probability of closure. 96%