ACG Growth Conference –
 Specialty Investing Panel
       June 3, 2009
Moderator Biography – Mr Bill Roman
                      Mr.
Name     Background



         • Mr. Roman manages Harris W...
Panelist Biography – Mr John Black
                     Mr.
Name                 Background


 Mr. John Black
 Managing Di...
Exclusively Devoted to the Middle Market
• T
  Transactions from $25 to $500 million of enterprise value
         ti    f ...
H.I.G. Family of Funds
                              Leading Middle Market Focused Private Investment Firm
               ...
Panelist Biography – Mr Charles Cherington
                     Mr.
Name                     Background

Mr. Charles Cheri...
Intervale Overview
               • Intervale was founded in 2007 by Curtis Huff and Charles Cherington, two
             ...
Intervale Overview

                • Represents the backbone of the energy industry
  Oilfield      • Virtually all activ...
Panelist Biography – Mr Richard D. Tadler
                     Mr.        D
Name                    Background


Mr. Richa...
Overview of TA Associates

Founded in 1968

Offices in Boston, Menlo Park, London and Mumbai

110 employees

$12 billion u...
1-1
Market Overview – Economic Conditions
  Although general market conditions remain challenging, key indicators suggest the
...
Market Overview – Equity Market Conditions
Although still well below record highs, equity markets are up significantly fro...
1-4
Market Overview – Debt Market Conditions
   The credit market remains tight…
       • Over the past 18 months, leverage mu...
Market Overview – Debt Market Conditions (continued)
… but is showing signs of life.
  • Investors have bid up the seconda...
Market Overview – Middle Market M&A Activity
                               In concert with the general economy, debt mark...
Market Overview – Middle Market M&A Valuations
Market forces have pushed M&A multiples down over the past 12 – 18 months.
...
Market Overview – Buyer Health
      Financial and strategic buyers appear to be well positioned to increase acquisition
 ...
Upcoming SlideShare
Loading in …5
×

Microsoft PowerPoint - 00 - Cover Bios v4.ppt [Compatibility Mode]

1,061 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,061
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
17
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Microsoft PowerPoint - 00 - Cover Bios v4.ppt [Compatibility Mode]

  1. 1. ACG Growth Conference – Specialty Investing Panel June 3, 2009
  2. 2. Moderator Biography – Mr Bill Roman Mr. Name Background • Mr. Roman manages Harris Williams & Co.'s Boston Office. Mr. Roman has been engaged in a variety of advisory and fi i f d i d financial engagements since commencing hi i i l i i his investment b ki career banking in 1979. • Previous experience includes Managing Director and head of the Boston Investment Banking office of Dean Witter Reynolds, Inc. (now Morgan Stanley). Prior to joining Harris Williams & Co., Mr. Roman was co-Head of I C M R H d f Investment B ki at T k A th t t Banking t Tucker Anthony S t (Sutro (now RBC Capital Markets). • Mr. Roman earned an M.B.A. at the Darden Graduate School of Business Administration at the University of Virginia and a B.A. with Honors at Brown University. Harris Williams & Co. is one of the country’s leading M&A advisors focused exclusively on the middle market. Services include private company sales, corporate divestitures, acquisitions, management buyouts, fairness opinions, restructuring advisory, and complex valuations. Harris Williams & Co. represents private equity groups as well as publicly and privately held companies worldwide. The firm was named “Middle Market Investment Bank of the Year” in 2008 by Investment Dealers’ Digest. For more information visit, www.harriswilliams.com. Member FINRA/SIPC.
  3. 3. Panelist Biography – Mr John Black Mr. Name Background Mr. John Black Managing Director • Mr. Black is a Managing Director of H.I.G. Capital and heads the Firm’s Boston Office. • Since joining H.I.G. in 1996, Mr. Black has led more than 35 middle market transactions including acquisitions, leveraged recapitalizations and industry consolidations of both public and private companies. • Prior to H.I.G., Mr. Black was a senior professional with several leading consulting firms, working with middle market companies to develop and implement strategic and operational business plans. • Mr. Black is a graduate of Harvard University with a dual degree in applied mathematics and economics. H.I.G. Capital is a leading global private equity firm focused on management buyouts and recapitalizations of leading middle market companies as well as growth equity investments. With more than $7.5 billion of equity capital under management and more than 150 investment professionals, H.I.G. professionals H I G is dedicated to using its in house operating expertise to help talented in-house management teams and entrepreneurs build companies of significant value. H.I.G. works closely with its portfolio companies and provides capital, operating and strategic expertise, and a network of strategic industry contacts to help them become industry leaders. H.I.G. is a significant investor in over fifty companies in the U.S. and Europe in a diverse range of industries, with combined annual revenues in excess of $7 billion.
  4. 4. Exclusively Devoted to the Middle Market • T Transactions from $25 to $500 million of enterprise value ti f t illi f t i l • $10 to $100 million in EBITDA at closing or a “highly visible” path to $10 million in EBITDA through short-term operating improvements or immediate acquisitions • H I G specializes in complex transactions where we identify opportunities for value creation H.I.G. • Over 150 investment professionals, half of which have consulting / operating backgrounds • Transactions typically have one or more of the following characteristics: - Corporate divestitures - Contingent / simultaneous mergers - Owner operated recapitalizations - Bankruptcy (363 or reorganization) - “Buy and build” consolidation plays - Restructuring - O Operational opportunities / t ti l t iti turnarounds d - St t l / transactional complexity Structural t ti l l it - Industry in transition - Public-to-private transactions - Managerial transition / deficiency - Growth capital infusions H.I.G. provides flexible transaction structures to the middle market in a wide range of business situations where we can create value for all stakeholders by utilizing our extensive operational and restructuring process experience
  5. 5. H.I.G. Family of Funds Leading Middle Market Focused Private Investment Firm Leading Middle Market Focused Private Investment Firm US / EUR PE Distressed Debt Venture Capital Hedge Fund Real Estate $2.3 Billion $3.5 Billion $0.5 Billion $1.0 Billion $0.2 Billion Traditional Buyouts Chapter 11, Plan of  Minority Ownership  Small and Mid‐ Distressed Situations Buy‐and‐Build /  Reorganization Positions in Rapidly  Capitalization Publicly  Lender / Developer  Consolidation  Chapter 11, §363 Sales Growing Businesses Traded Companies Divestitures  Strategies St t i Out‐of‐Court  Expansion Capital E i C it l Limited Liquidity, Non‐ Li it d Li idit N Sectors and Markets  Corporate Divestitures  Restructurings /  Founder Liquidity Control Situations with Improving  w/ or w/o  Turnarounds PIPEs (Acquisition or  Fundamentals  Add‐On Acquisitions Infrastructure Public‐to‐Private  Liquidity Financing) Performing and Non‐ Early Stage Institutional  Performing Loans  Owner Operator  Transactions Funding Long / Short Positions Recapitalizations Equity Investments Equity Investments Preferred Stock  Preferred Stock Urban Housing  g Public‐to‐Private  Purchase of Distressed  Investments Asset Repositioning /  Transactions Securities Turnaround  Operational  Special Situation  Real Estate Dependent  Turnarounds Lending Business (Long‐Term  Add‐On Acquisitions Care, Hotels, Etc.) Bridge Loans Bridge Loans Debtor‐in‐Possession  Financings $7.5 Billion Under Management
  6. 6. Panelist Biography – Mr Charles Cherington Mr. Name Background Mr. Charles Cherington Managing Partner • Mr. Cherington co-founded Intervale Capital to build on the success of Cherington Capital, a private equity fi f i i firm focused on i d investments i middle market energy companies. in iddl k i • Prior to founding Cherington Capital, Mr. Cherington co-founded a smaller fund which also focused on middle market buyouts. • Before launching his first fund, Mr. Cherington spent several years as a vice president at the Vietnam Fund, a British private equity fund. • Mr. Cherington also worked for CS First Boston in New York and Vietnam. • Mr. Cherington earned an M.B.A., with honors, from the University of Chicago and a B.A. in History from Wesleyan University. Intervale Capital is a private equity firm, based in Houston and Boston, focusing exclusively on investments in middle-market oilfield services companies and related technologies. Intervale, together with its predecessor entities, manages eight platform investments, and is currently investing out of its $280 million fund fund.
  7. 7. Intervale Overview • Intervale was founded in 2007 by Curtis Huff and Charles Cherington, two seasoned energy services investors Background • Four senior investment professionals operating out of Boston and Houston • M Managing P t i Partners hhave ddeep shared hi t h d history – Eight transactions executed together since Intervale formed • Lower middle market buyouts and growth capital focused on oilfield services capital, • Only fund building oilfield services platforms with proprietary add-on technologies Intervale • $281MM fund, closed May 2008 Overview • $24MM GP commitment • 28% of capital invested as of Q1 2009 • 6.8x ROI and 33% IRR track record by Cherington and Huff Track – $328MM invested generating total value of $2.2B+ • Since 2003, Cherington and Huff have invested $125MM, including over $30MM Record of personal money, acquiring 10 platform companies and 6 add-ons CONFIDENTIAL 1
  8. 8. Intervale Overview • Represents the backbone of the energy industry Oilfield • Virtually all activities at the wellhead are outsourced Services, Services • Typical energy funds adopt a multi-sector approach (necessary to invest multi- billion dollar funds) Not E&P • Intervale focuses on an inefficient niche, to seek to maximize returns, not fund size • Depleted reservoirs require enhanced technology • New technologies lower the cost of drilling and enable market share capture Technology • Operators are reluctant to buy from start-ups, creating opportunity for larger Focused platforms to acquire and deploy new technology • Innovation and activity, not cycle, drive investment performance • Intervale buys platforms, builds management and adds technology to achieve exceptional results Proven • Target companies in specific verticals with favorable characteristics Model • Proven history of sourcing deals outside of auctions • Portfolio companies continue to outperform the oilfield services industry CONFIDENTIAL 2
  9. 9. Panelist Biography – Mr Richard D. Tadler Mr. D Name Background Mr. Richard D. Tadler Managing Partner • Mr. Tadler is a Managing Director of TA Associates. Mr. Tadler heads the Boston office Healthcare G H lh Group, specializing i h l h i li i in healthcare and service-related b i d i l d businesses, and h i also a d he is l member of TA Associates’ executive committee. • Prior to joining the firm in 1987, he was a General Partner with Investments Orange Nassau Inc. He has also served as an Assistant to the President of several divisions at Armco Inc. • Mr. Tadler received a M.B.A. in from The Wharton School at the University of Pennsylvania, and a B.S., with distinction, in Finance from the University of Virginia. Founded in 1968, TA Associates is one of the largest and most experienced private equity firms. , g p p q y With offices in Boston, Menlo Park and London, the firm manages $10 billion in capital and has invested in more than 360 companies. TA Associates provides growth equity capital, leveraged recapitalization and management buyout financing primarily for technology, financial services, business services, consumer and healthcare businesses.
  10. 10. Overview of TA Associates Founded in 1968 Offices in Boston, Menlo Park, London and Mumbai 110 employees $12 billion under management; $6 billion in active funds Investment size generally $60 - $350 million Invest in profitable growth companies, entrepreneurial managers, proprietary products or services Industry focus on technology, financial services, healthcare, business services and consumer industries Confidential
  11. 11. 1-1
  12. 12. Market Overview – Economic Conditions Although general market conditions remain challenging, key indicators suggest the market may have bottomed. • The quarterly decline in GDP appears to have stabilized in the first quarter. • The Consumer Confidence Index has rebounded after hitting an all-time low in February 2009. Economic Conditions – GDP Consumer Confidence and Unemployment1 For the Last Five Years Ended Q1 2009 and Projected Q2 – Q4 2009 For the Months Ended January 2000 – April 2009 ($ in trillions) Real GDP Projected GDP $12.0 10% Actual Year-Over-Year Change 10.0% 160 Projected Year-Over-Year Change Projected Unemployment Rate 8% 9.0% 140 6% 8.0% 120 $11.5 Unemployment Rate 7.0% Cons 4% 100 sumer confidence 6.0% 2% 5.0% 80 0% 4.0% $11.0 60 -2% 3.0% 40 2.0% Stabilization? 4% -4% 20 1.0% Consumer Confidence $10.5 -6% 0.0% 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2004 2005 2006 2007 2008 2009E Source: Capital IQ. Source: The Conference Board and U.S. Bureau of Labor Statistics. 1-2
  13. 13. Market Overview – Equity Market Conditions Although still well below record highs, equity markets are up significantly from first quarter lows. • D it recent market weakness, th S&P 500 h risen 34 0% since M h 9th 2009 Despite t k t k the has i 34.0% i March 9th, 2009. Equity Market Performance – S&P 500 Equity Market Performance – S&P 500 For the Period of January 1, 2004 – May 28, 2009 For the Period of January 1, 2009 – May 28, 2009 1,700 1,000 1,600 S&P (18.2%) since 2004 Stimulus bill 1,500 signed into law. 1,400 1 400 900 1,300 1,200 800 1,100 34.0% 1,000 Increase Administration 900 700 announces plan 800 Obama budget to bail out introduced into automakers. 700 Congress. 600 600 Jan 04 Jul 04 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jan-09 Feb-09 Mar-09 Apr-09 p May-09 y Source: Capital IQ. Source: Capital IQ. 1-3
  14. 14. 1-4
  15. 15. Market Overview – Debt Market Conditions The credit market remains tight… • Over the past 18 months, leverage multiples have contracted materially from peak levels, availability has evaporated and loan defaults have accelerated evaporated, accelerated. Middle Market Debt/EBITDA Multiples1 Lagging 12-month Default Rate by Number of Issuers For the Years Ended December 31, 2001 – 2008; H1 and H2 2008; and For the Period of December 1998 – April 2009 Q Q1 2009 6.0x 5.6x Average: 4.3x Recessions 4.8x 4.9x 5.0x 4.7x 9.0% 4.1x 4.5x 3.8x 8.0% 8 0% 4.0x 3.7x Current: 5.4% 3.5x 7.0% 3.5x 6.0% 3.0x 5.0% 4.0% 2.0x 3.0% 1.0x 2.0% 1.0% 0.0x 0.0% 2001 2002 2003 2004 2005 2006 2007 H1 H2 Q1 2008 2008 2009 Source: Standard & Poor’s and industry research. Source: Standard & Poor’s. For Q1 2009 data represents HW&Co. internal estimate. (1) For issuers with less than $50 million EBITDA. 1-5
  16. 16. Market Overview – Debt Market Conditions (continued) … but is showing signs of life. • Investors have bid up the secondary market in recent months, and leverage loan issuances appear t h to have rebounded, if only marginally. b d d l i ll New Leveraged Loan Issuances and Average Institutional Flow-Name Loan Bid For the P i d f A il 2 F th Period of April 2, 2008 – M 28 2009 May 28, ($ in billions; bid price in cents relative to $1.00 par value) $30 95 Current: 83.8 lions) $25 90 Leveraged Loan Volume (in bill Average Secon 85 $20 Low: 63.5 80 $15 ndary Bid 75 $10 70 $5 65 $0 60 Leveraged Loan - New Issuances Avg. Avg Institutional Flow Name Bid Source: S&P LCD. 1-6
  17. 17. Market Overview – Middle Market M&A Activity In concert with the general economy, debt markets, and equity markets, M&A activity has declined significantly from its 2006/2007 peak. • M&A volume declined throughout 2008 and into the first quarter of 2009 but the market appears 2009, to have found a floor. Middle Market M&A Transaction Activity1 Middle Market M&A Transaction Activity1 For the Years Ended 1989 – 2008 & for the First Quarters 2008 & 2009 For the Months Ended January 2008 through April 2009 y g p $300 2,500 $50 500 $250 2,000 $40 400 De al Value ($ in billions) Deal Value ($ in billions) ` $200 # of Transactions ` 1,500 # of Transactions $30 300 $150 1,000 $20 200 $100 V s 500 $10 100 $50 $0 0 $0 0 Deal Value Number of Transactions Deal Value Number of Transactions Source: Thomson Financial – SDC database. Source: Thomson Financial – SDC database. (1) Includes transactions valued between $25 - $500 million with the target based in the United States (1) Includes transactions valued between $25 - $500 million with the target based in the United States or Canada. Excludes financial institutions. or Canada. Excludes financial institutions. 1-7
  18. 18. Market Overview – Middle Market M&A Valuations Market forces have pushed M&A multiples down over the past 12 – 18 months. Average Purchase Price Multiple for Transactions below $500 Million1 For the Years Ended December 31, 2001 – 2008 and YTD 2009 9.0x 9 0x 8.4x 8.5x 8.0x 8-Year Average: 7.1x 7.8x 7.6x 7.5x 7.5x 7.0x 6.8x 6.5x 6.5x 6.3x 6.3x 6.0x 6.0x 5.5x 5.0x 4.5x 4.0x 2001 2002 2003 2004 2005 2006 2007 2008 2009YTD Source: Standard & Poor’s and industry research. (1) Purchase price multiple calculated as average purchase price / pro forma trailing EBITDA. 1-8
  19. 19. Market Overview – Buyer Health Financial and strategic buyers appear to be well positioned to increase acquisition activity. • Deal activity remains limited despite a significant amount of uninvested private equity capital and corporate cash on the sidelines. Private Equity Buyers Strategic Buyers Cumulative Uninvested Private Equity Capital S&P 500 – Aggregate Cash Balance For the Years Ended December 31, 1998 – 2008 For the Years Ended December 31, 1998 – 2008 ($ in billions) ($ in billions) $550 $507 Billion $1,200 $1.1 Trillion $500 Uninvested in Aggregate Cash $1,000 sted Private Equity Ca pital___ $450 $400 Significant $350 $800 Available $300 Capital… $600 $250 $200 $400 $ $150 Uninves $100 $200 $50 $0 $0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: Buyouts and Thomson Financial Financial. Source: CapitalIQ CapitalIQ. Public vs. Private Valuation Disconnect …but with Bottlenecks Focus on Value/Distressed Opportunities Lack of Debt Financing Maintaining Liquidity 1-9

×