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Capital for Entrepreneurs
since 1956
Legal Notice

• This is not an offer to sell or a solicitation of an offer to
  buy securities.
• Securities are offered through Corporate Finance
  Securities, Inc.
• Corporate Finance Securities, Inc. is a member firm of
  FINRA and SIPC.
Current Market Conditions

•   Improving deal activity
•   Premium for larger deals
•   No premium for quality
•   More debt, less equity
•   Lower interest rates
•   Higher taxes
Deal Activity
                                   Deals per Year
250

200

150

100

50

 0
          2007                2008         2009     2010   2011

      Source: GF Data Resources
Buyout Multiples by Industry
                                  EBITDA Multiples by Industry
7.5


7.0


6.5


6.0


5.5


5.0
          2007                 2008                2009          2010           2011
        Health Care Services          Business Services   Manufacturing   Distribution
      Source: GF Data Resources
Buyout Multiples by Deal Size
                                     EBITDA Multiples
8.0

7.0

6.0

5.0

4.0
        2007                  2008            2009          2010            2011
              10-25 mil           25-50 mil    50-100 mil     100-250 mil

      Source: GF Data Resources
Premium for Larger Deals
                             Buyout Multiples by Deal Size
 8

7.5

 7

6.5

 6

5.5

 5
           2007                   2008         2009         2010   2011
                                     10-50 mil      50-250 mil
      Source: GF Data Resources
Premium for Quality Deals
                           Buyout Multiples by Deal Quality
 7


6.5


 6


5.5


 5
           2007                   2008       2009       2010   2011
                                    Above Average   Other
      Source: GF Data Resources
More Debt
                                          Debt Multiples
4.0x

3.0x           0.8x
                                   0.9x                            0.9x
                                                            0.7x
2.0x                                             0.8x
               2.8x
1.0x                               2.3x                     2.3x   2.4x
                                                 1.7x

0.0x
              2007                 2008         2009        2010   2011

                       Sub Debt/EBITDA            Sr Debt/EBITDA


       Source: GF Data Resources
Less Equity
                      Equity and Debt Contributions


                    36.8%        29.3%        36.9%     37.4%
43.6%
                                 17.9%        12.1%
                    15.8%                               14.5%
13.7%

42.7%               47.3%        52.8%        51.0%     48.2%


2007                 2008         2009         2010      2011
                                                      Senior Debt
                                                      Sub Debt
Source: GF Data Resources LLC
                                                      Equity
Lower Interest
                               Senior Debt
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%




            Q4
            Q2
            Q3
            Q4

            Q2
            Q3
            Q4

            Q2
            Q3
            Q4

            Q2
            Q3



            Q2
            Q3
            Q4
       2008 Q1
       2007 Q1




       2009 Q1




       2010 Q1




       2011 Q1
                              90-Day LIBOR   Spread
  Source: GF Data Resources
Higher Taxes
               Top Federal Tax Rates

45.0
40.0
35.0
30.0
                                              Partner Income
25.0
                                              S Corp Income
20.0
                                              C Corp Income
15.0
                                              Capital Gains
10.0
 5.0
 0.0
       2010    2011      2012          2013
Recent Transactions
Corporate Finance Associates
One of America’s oldest and largest
 mid-market M & A advisory firms




       www.cfaw-houston.com

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ASA Presentation 2012

  • 2. Legal Notice • This is not an offer to sell or a solicitation of an offer to buy securities. • Securities are offered through Corporate Finance Securities, Inc. • Corporate Finance Securities, Inc. is a member firm of FINRA and SIPC.
  • 3. Current Market Conditions • Improving deal activity • Premium for larger deals • No premium for quality • More debt, less equity • Lower interest rates • Higher taxes
  • 4. Deal Activity Deals per Year 250 200 150 100 50 0 2007 2008 2009 2010 2011 Source: GF Data Resources
  • 5. Buyout Multiples by Industry EBITDA Multiples by Industry 7.5 7.0 6.5 6.0 5.5 5.0 2007 2008 2009 2010 2011 Health Care Services Business Services Manufacturing Distribution Source: GF Data Resources
  • 6. Buyout Multiples by Deal Size EBITDA Multiples 8.0 7.0 6.0 5.0 4.0 2007 2008 2009 2010 2011 10-25 mil 25-50 mil 50-100 mil 100-250 mil Source: GF Data Resources
  • 7. Premium for Larger Deals Buyout Multiples by Deal Size 8 7.5 7 6.5 6 5.5 5 2007 2008 2009 2010 2011 10-50 mil 50-250 mil Source: GF Data Resources
  • 8. Premium for Quality Deals Buyout Multiples by Deal Quality 7 6.5 6 5.5 5 2007 2008 2009 2010 2011 Above Average Other Source: GF Data Resources
  • 9. More Debt Debt Multiples 4.0x 3.0x 0.8x 0.9x 0.9x 0.7x 2.0x 0.8x 2.8x 1.0x 2.3x 2.3x 2.4x 1.7x 0.0x 2007 2008 2009 2010 2011 Sub Debt/EBITDA Sr Debt/EBITDA Source: GF Data Resources
  • 10. Less Equity Equity and Debt Contributions 36.8% 29.3% 36.9% 37.4% 43.6% 17.9% 12.1% 15.8% 14.5% 13.7% 42.7% 47.3% 52.8% 51.0% 48.2% 2007 2008 2009 2010 2011 Senior Debt Sub Debt Source: GF Data Resources LLC Equity
  • 11. Lower Interest Senior Debt 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q4 Q2 Q3 Q2 Q3 Q4 2008 Q1 2007 Q1 2009 Q1 2010 Q1 2011 Q1 90-Day LIBOR Spread Source: GF Data Resources
  • 12. Higher Taxes Top Federal Tax Rates 45.0 40.0 35.0 30.0 Partner Income 25.0 S Corp Income 20.0 C Corp Income 15.0 Capital Gains 10.0 5.0 0.0 2010 2011 2012 2013
  • 15. One of America’s oldest and largest mid-market M & A advisory firms www.cfaw-houston.com

Editor's Notes

  1. Updated,
  2. Updated, graph replaced
  3. Updated
  4. Updated
  5. Updated
  6. Updated
  7. Updated
  8. Updated
  9. Assuming already updated