Halliwells had a successful year in 2008 despite challenging market conditions. They maintained their deal volume from 2007, completing 192 deals worth £4.6 billion compared to 202 deals worth £5.4 billion in 2007. Their deal value only fell 15% while the overall UK market fell 54%. Halliwells also improved their ranking in the Sunday Times from 9th to 5th for UK deals. Looking ahead to 2009, the review expects it to be an extremely challenging year for deals as access to credit remains difficult.

1. Corporate Review 2008

2. 02
We went from 9th to 5th in the Sunday Times deal makers
list, we retained our market leadership in the North West
and we had a fantastic first year of operation in Yorkshire.

3. 03
Welcome to Halliwells Corporate Executive Summary
Group’s review of deal activity 2008. The key highlight of the year for us has been achieving
a deal volume of 192 deals for 2008, only 10 fewer than
In putting this review together, we wanted to take a look
we worked on in 2007. This performance was helped
back at our own activity in the transactional market in
enormously by a record Q1 and a strong finish to the
2008, look at the deals we have done in our 4 core focus
year. Since June, 2008 has been the worst market
areas – M&A, private equity, capital markets and finance
that most of our partners have ever worked in. During
– and to offer a view on what 2008 tells us about what to
this period, we have cemented our market leadership
expect in 2009.
position in the North West and continued to grow our
For many people active in the corporate finance market business more widely in the UK as a whole – evidenced
in 2009, the economic firestorm of the second half of by our recent Sunday Times number 5 ranking for UK
2008 is the first serious downturn that they have worked wide deals in 2008.
through. This is a challenge in itself, but the rapid
• Number 5 Corporate Law Firm UK wide –
deterioration in the global economic climate
The Sunday Times
and the issues that presents for UK plc means
that the transaction landscape has changed for • UK Top 10 on MBO / MBI 2006-2008 – Corpfin
the foreseeable future. • Number 1 AIM Law firm in the North
2000-2008 – Corpfin
In analysing our deal activity in 2008, we have used
both externally available statistics (mostly from Corpfin/ • Shortlisted for Corporate Law Firm of the Year 2008 –
Experian) and our own internal statistics. Many of the Insider Dealmakers Awards
deals we work on are, for one reason or another, not • Number 1 Corporate Team in North West 2007,
publically disclosed. These deals are measured using 2008 and 2009 – Insider
the Corpfin criteria and we use them to look at our • Number 2 in North West on MBO / MBI
performance from year to year. 2006-2008 - Corpfin
For the UK as a whole in 2008, Corfin reported a 21.5% • Number 1 for IPOs and Public Fundraisings in North
fall in deal volume and a 54% fall in deal value. Worst hit West 2006-2008 - Corpfin
appear to have been the very large, leveraged deals, but • Number 1 for Development Capital deals in North
the value falls have affected the market as a whole. West 2006-2008 - Corpfin
2008 was a good year for Halliwells: we went from 9th These successes come down to two things: the strength
to 5th in the Sunday Times deal makers list, we retained and breadth of our client relationships; and the strength
our market leadership in the North West and we had a in depth of our team. Be they corporate, institutional,
fantastic first year of operation in Yorkshire. Probably management or entrepreneurial clients, our relationship
the best achievement of all, we all but maintained our with a wide spread of clients is the cornerstone of our
deal volume 2007 to 2008, seeing only a 5% reduction. practice and something we believe has allowed us to
Equally as pleasing given the 54% UK wide fall in deal maintain our deal volume performance. The ICAEW
value was our performance in seeing only a 15% fall in Corporate Finance qualification that a number of our
overall deal value, reflecting the quality of deals of which partners hold, coupled with our approach of becoming
we worked. our clients’ trusted legal AND business adviser, are
illustrative of the added value we deliver and which we
believe differentiates us from our competitors.
Halliwells’ Corporate Review 2008

4. 04
2008: A Year of Two Halves The result of this was that 2008 was a turbulent year
but, in the end, one that was a success for us. Based
Overview on our own internal statistics, we advised on 192 (2007:
202) transactions with an aggregate value of £4.6
In April 2008, the business and legal/accountancy trade Billion (2007: £5.4 Billion). Corpfin is reporting a 21.5%
press was full of stories about record deal volumes decrease in deal volume UK-wide in 2007. Our average
in March on the back of the change in the Capital deal value is £24m (2007: £27m).
Gains Tax regime. Indeed we enjoyed our best ever
Q1 performance – 67 deals worth £2.2 Billion. The tax In a very difficult market, especially on the back of
change simply accelerated deal flow such that many some terrible economic news in the second half, we are
deals that would have taken place in April, May and very pleased to have all but maintained our annual deal
perhaps June were sucked into Q1 by the 10% tax rate volume at the 2007 level and seen only an 11% fall in
which sellers were understandably focussed on securing. average deal value.
Q2 as a result was quiet, but there was still a decent Another feature of 2008 was the increasing geographic
level of activity, such that by the end of June we had spread of our activity. We are well known in the North
done 113 deals, 58% of the total for the full year. For West through our long established offices in Manchester
us, that dropped off significantly in Q3 – the traditionally and Liverpool, but elsewhere we are still relatively early
busy Q4 though, after a slow start in October, came in the development of our offices. We have not seen this
through well, with December being a particularly strong hinder our ability to win good deals throughout the UK
month for deal completions. as our national reputation continues to grow.
Legal Advisers: Deals by Volume National
2008 2007 Deals
1 (1) DLA Piper 186
2 (2) Eversheds 157
3 (3) Allen & Overy 95
4 (7) Pinsent Masons 94
5 (9) Halliwells 91
6 (5) Linklaters 79
7 (4) Clifford Chance 76
8 (-) Jones Day 73
9 (-) Hammonds 72
10 (-) Norton Rose 67
Source – The Sunday Times - 4 Jan 09
Halliwells’ Corporate Review 2008

5. 05
Legal Advisers: Deals by Volume North West Legal Advisers: Deals by Volume Yorkshire
2008 2007 Deals 2008 2007 Deals
1 (1) Halliwells 59 1 (2) DLA Piper 28
2 (3) DLA Piper 46 2 (6) Hammonds 21
3 (7) Brabners 42 3 (3) Addleshaw Goddard 19
4 (2) Eversheds 30 4 (4) Pinsent Masons 19
5 (5) DWF 24 5 (1) Eversheds 18
6 (9) Cobbetts 23 6 (7) Halliwells 15
7 (8) Pinsent Masons 22 7 (5) Walker Morris 15
8 (4) Addleshaw Goddard 20 8 (8) Cobbetts 13
9 (-) Pannone 18 9 (-) Dickinson Dees 7
10 (6) Hammonds 15 10 (-) Dundas & Wilson 7
Source – Corpfin Source – Corpfin
Legal Advisers: Deals by Volume South West Legal Advisers: Deals by Volume Midlands
2008 2007 Deals 2008 2007 Deals
1 (6) Ashfords 25 1 (2) Eversheds 47
2 (2) Eversheds 15 2 (1) DLA Piper 34
3 (8) Allen & Overy 14 3 (4) Wragge & Co 23
4 (1) Clifford Chance 14 4 (3) Pinsent Masons 22
5 (-) Halliwells 14 5 (5) HBJ Gateley Wareing 15
6 (-) Linklaters 12 6 (9) Halliwells 14
7 (3) Osborne Clark 12 7 (-) Cobbetts 12
8 (8) DLA Piper 12 8 (-) Lovells 11
9 (9) Jones Day 11 9 (8) Hammonds 11
10 (10) BPE 11 10 (-) Dundas & Wilson 11
Source – Corpfin Source – Corpfin
Halliwells’ Corporate Review 2008

6. 06
M&A and International Highlights This ranges from IPO work (albeit there is very little of
this at the moment) through to strategic review projects
We had a good year in 2008, both in the UK and the first foray of Chinese companies into acquisitions
and on cross border deals. in Western Europe.
Our involvement in 3 significant deals in the travel sector We have a dedicated Asia team comprising both UK and
emphasises our growing market share in that area as Chinese professionals. The team completed 6 IPO’s of
we begin to become recognised as a leading adviser Chinese companies on AIM over the last 3 years and
to travel businesses. Similarly in the transport sector, undertook a range of M&A and other projects for its
our work with Stobart Group has enabled us to expand Asian clients.
both our reputation and our relationships. We see both
sectors continuing to consolidate. We also began to benefit from efforts invested into India.
We advised on two substantial Indian deals in 2008
Internationally, we advised on projects in, amongst valued at a combined £190m. Each of these was
others, India, China, Singapore, Australia, USA, a complex, multi-jurisdiction transaction.
Canada, Ireland, France, Spain, Italy, Montenegro,
Nigeria and Sudan. We have an extensive network of overseas law firms
with whom we work on international projects. This is a
We continued to secure business in the Asia Pacific bespoke Halliwells network of “good friends”.
region (mainly China) and are involved in a number of
significant projects on behalf of Chinese companies.
Sale mandates Acquisitions
Company Sector Enterprise Value Target Sector Enterprise Value
Global Travel Group Travel £100m James Irlam Transport £60m
Pontin’s Leisure £46m London Southend Airport Transport £21m
Brookhouse Aerospace £43m Burns Anderson plc Financial Services £14m
Richardson Projects Construction £40m Roadferry Transport £10m
Tekton Software £21m WA Developments Transport £10m
PCMG Business Services £n/d WFCA Integrated Media £8m
Elegant Resorts Travel £n/d CPBEC Consumer Products £8m
Carrier Travel £n/d Autogen Bioclear Biotech £6m
M&A Highlights M&A Highlights
Halliwells’ Corporate Review 2008

7. 07
Private Equity We also advised on the formation of 3 new funds and
have a number of current mandates to advise on the set
Without doubt, the environment for private equity deals up of “turnaround funds” – a sign of the times.
changed radically during 2008 as the availability of
the levels of debt that the sector has become used to Our private equity practice is well balanced in that we
effectively dried up. Certainly, the really big deals just advise private equity houses, PE-backed companies,
did not happen but for the most part though, historically, banks and management teams. Through this broad
this has not been an area where we have applied our spread of roles on private equity deals, we are able to
primary resource. Our focus has been on the mid-market provide high quality input on our projects with a full
and this saw us advising Zeus Private Equity, Infinity understanding of the sometimes competing interests
Asset Management, NBGI Private Equity and Isis Equity of the various parties involved.
Partners in 2008.
Client Deal
Zeus Private Equity Investment in XLN Telecom
Isis Equity Partners Investment in Carnell
Zeus Private Equity Further investment in Hallmark Hotels
NBGI Private Equity Investment in T Jolly
Infinity Asset Management Fund formation
20:20 Mobile Group Equity Restructuring
Fishawack MBO
Training for Travel Investment by Aberdeen Development Capital
Infinity Asset Management Investment in Goldshield
Private Equity
Halliwells’ Corporate Review 2008

8. 08
We continue to advise a portfolio
of 55 AIM quoted Clients.

9. 09
Capital Markets Company Deal Enterprise Value
Begbies Traynor Placing £15m
In a year when IPO’s were all but impossible, we worked
with our Main Market and AIM quoted portfolio to secure Cantono Placing and disposal £5m
secondary fundraisings, support their deal activity
and focus on critical compliance and corporate Byotrol Placing £4m
governance issues.
Carr’s Milling Placing £3m
Our flagship capital markets deal for 2008 was advising
Main Market listed Stobart Group on its £75m placing Capital Markets
and open offer. We also advised Stobart on a £21m
We continue to advise a portfolio of 55 AIM quoted
placing in December to support its acquisition of
companies and grow our list of Main Market clients
London Southend Airport. Other deals include:
which now includes companies such as JJB Sports,
Stobart Group and JD Sports Fashion.
Finance
Our finance team has always split its work between Our finance team also plays a critical role for us in advising
advising lender and borrower and this continued in 2008. our corporate clients on their borrowing arrangements,
It was an extremely tough year in the banking sector, whether in connection with acquisitions and other projects
and this will no doubt continue into 2009 as the banks or their day to day working capital facilities.
and other financial institutions have limited capital to Despite the doom and gloom, we advised a wide
lend and they concentrate on their existing range of banks and other financial institutions on
lending relationships. a number of standout deals in 2008:
We have continued to win panel appointments and
now provide support for most of the UK’s major
financial institutions.
Client Deal Enterprise Value
Bank of Scotland Development finance £410m
UK Building Society Property finance £300m
Bank of Scotland Restructure and property finance £115m
RBS/HSBC/Rothschild Loan facilities £84m
National Australia Bank Property financing £46m
Lloyds TSB Acquisition and development capital £22m
Barclays Invoice discounting £15m
Yorkshire Bank MBO £12m
RBS Property financing £11m
Alliance & Leicester Term loan £6m
Finance

10. 10
Emerging Companies 2009: What Next?
and Venture Capital
There can be little doubt that 2009 is going to be an
Halliwells has a long track record of advising emerging,
extremely challenging year for the UK economy as a
high growth companies and their funders. In many cases,
whole – and of course this will have an impact on deal
we have worked with companies from their early stages,
volumes and values. We believe that deal volume in the
through acquisitions and into private equity deals, trade
first half of 2009 will be down on that in the second half
sales or IPO’s. We continue to work with a wide variety
of 2008, with the prospect of more activity only if the UK
of clients in the broad technology sector, specialist
economy and business confidence in general can begin
technology areas such as healthcare and life sciences
its recovery from Q2 onwards. In terms of our own deal
and in other areas of innovation.
volume in 2009, we see maintaining our strong 2008
We regularly advise some of the UK’s most active performance as being a major challenge.
venture capital funds including RisingStars Growth
Much will depend on the way the banks behave and their
Fund, YFM and Coalfields Enterprise Fund. Our
appetite for deals once they re-enter the market. Pricing
corporate client list features some of the UK’s most
expectations are on their way down to a new “realistic”
exciting young companies such as The Hut, winner
level, which should help – but renewed confidence will
of the Sunday Times/Bank of Scotland Entrepreneur
be required across the economy in general before the
of the Year award in 2008.
market becomes more settled.
For our part, we believe that our focus on the wide
range of clients we advise, our “hands on” style and the
resultant ability we have to differentiate our offering will
serve us well in this difficult market.
Halliwells’ Corporate Review 2008

11. 11
We believe that deal volume in the first half of 2009 will
be down on that in the second half of 2008, with the
prospect of more activity only if the UK economy and
business confidence in general can begin its recovery
from Q2 onwards.

12. www.halliwells.com
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