The document discusses trends in valuation multiples across different industries from 2006 to 2009 based on data from private and public company transactions. Valuation multiples, which compare a company's enterprise value to metrics like EBITDA, generally declined across industries during this period. The median debt leverage multiples that banks were willing to provide also decreased from 2006 to the present day, as lenders focused more on collateral, liquidity and cash flow.

1. Enterprise Valuation Trends in Valuation Multiples Brad M. Cashion, CFA Managing Director The Mentor Group, Inc. Direct – 949-297-4094 Franz Fleischli, JD Managing Director The Mentor Group, Inc. Direct – 707-473-4747 February 4, 2010

2. Agenda Valuation Multiples – All SIC Codes Valuation Multiples - Software Valuation Multiples – Medical Device Valuation Multiples – Basic Manufacturing Lending / Debt Multiples

3. Valuation Multiples All SIC Codes – Private Companies Year Volume % Median Mean Increase EBITDA EBITDA 2006 10.1% 5.9x 20.35x 2007 8.2% 4.9x 13.85x 11.7% 3.4x 12.77x -58.1% 2.7x 11.78x

4. Valuation Multiples All SIC Codes – Public Companies Year Volume % Median Mean Increase EBITDA EBITDA 2006 6.3% 14.13x 25.77x 2007 -3.7% 14.44x 28.86x 20.6% 16.24x 25.43x -70.3% 12.41x 17.31x

5. Valuation Multiples Software – Private Companies Year Volume % Median Increase EBITDA 2006 7.8% 16.53x 2007 -26.5% 8.89x -11.1% 8.19x -75.1% 6.81x

6. Valuation Multiples Software – Public Companies Year Volume % Median Increase EBITDA 2006 5.7% 25.43x 2007 -56.5% 23.96x 60.0% 23.08x -31.3% 22.63x

7. Valuation Multiples Manufacturing – Private Companies Year Volume % Median Increase EBITDA 2006 9.2% 7.12x 2007 1.2% 6.76x -20.8% 6.31x -73.6% 9.99x

8. Valuation Multiples Manufacturing – Public Companies Year Volume % Median Increase EBITDA 2006 11.7% 16.15x 2007 -46.2% 13.68x -10.5% 15.65x -52.9% 14.08x

9. Valuation Multiples Medical Devices – Private Companies Year Volume % Median Increase EBITDA 2006 8.2% 7.42x 2007 -14.8% 6.86x 34.8% 6.83x -67.7% 8.34x

10. Leverage Multiples Single Bank Market – Relationship Focused Year Low Median High Median EBITDA EBITDA 2006 4x 6x 2007 4x 6x 2008 3x 5x 2009 2x 4x Current coverage ratio is 1.3x or greater. Lenders are looking at what the collateral is, how much liquidity the business has and the direction of cash flow. Leverage may be higher based on the income statement if the balance sheet leverage is low, meaning there is significant liquidity