and

welcome you to our webcast:

Competitive Midmarket Auctions

Introduction

Moderator:

Mary Kathleen Flynn Senior Editor/Video ProducerThe Deal LLC

REMINDER: Listeners will be in listen-only mode. We would like to keep the webcast interactive. We encourage listeners to e-mail questions via the Q&A panel box to the

right of your screen. Select questions will be answered during the last 10 minutes of the program.

We will be providing several poll questions throughout the discussion. These questions will also appear in a panel

box on the right of your screen.

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Ira Cohen Managing Director

Signal Hill Capital

Scott PerperManaging Partner

Pamlico Capital

James RosenerManaging Partner

Pepper Hamilton LLP

John ZieserChief Development Officer, General Counsel

Meredith Corp.

EXPERT PANEL

• The middle market comprises businesses with revenue between $5 million and $1 billion

•369,122 companies constituted America's middle market in 2007—double the number registered in 1992

• Private equity owns 48% of midmarket businesses, up from 23% in 1997

• The U.S. witnessed about 5,300 middle-market M&A deals in 2010, totaling $347 billion. That compared with 185 large-cap deals

Source: University of South Florida's Center for Economic Development

Research

Perspectives on 2011 midmarket auctions

Breakdown of Leading Sectors of Midmarket Auctions in Varying Stages Year-to-Date

Industry Number of DealsRetail 38

Manufacturing 27

Technology/Internet 27

Financial services 21

Leisure 19

Media 17

Energy 15

Real estate 12

Healthcare 10

Food 10

Source: The Deal Pipeline

PE going down-market to put money to work 

Length of time and quality of midmarket companies on the

auction block

Auction duration of latest midmarket auction deals

No. TARGET BIDDERS WINNING BIDDER

APPROXIMATE TRANSACTION

VALUE (In millions)

AUCTION DURATION

1. Capital Gold Corp.

Four bidders including: 1. Gammon Gold Inc. 2. Timmins Gold Corp.

Awaiting shareholder approval on offer from Gammon

$347 6 months, 1 weekAug. 23, 2010-March 1, 2011

2. Dynamex Inc. 1. Greenbriar Equity Group LLC2. TransForce Inc.

TransForce Inc. $248 3 weeksNov. 23, 2010-Dec. 15, 2010

3. Conexant Systems Inc.

Six bidders including: 1. Standard Microsystems Corp.4. Golden Gate Private Equity Inc.

Golden Gate Private Equity Inc.To close in second quarter of 2011

$311 4 monthsOct. 22, 2010- Feb. 23, 2011

4. Phoenix Technologies Ltd.

Four bidders including:1. Marlin Equity Partners2. Gores Capital Partners III LP

Marlin Equity Partners

$152 6 months, 1 weekMarch 15, 2010- Sept. 22, 2010

5. Symyx Technologies Inc.

1. Accelrys Inc.2. Competitor3. Unnamed PE fund

Accelrys Inc. $195 1 month, 2 weeksApril 7, 2010-May 17, 2010

6. Canplats Resources Corp.

1. Goldcorp Inc.2. Minera Penmont S de RL de CV

Goldcorp Inc. $308 1 month, 1 weekDec. 23, 2009-Feb. 4, 2010

7. Amicas Inc. 1. Thoma Bravo LLC2. Merge Healthcare Inc.

Merge Healthcare Inc.

$248 1 monthFeb. 2, 2010- March 5, 2010

8. Otix Global Inc. 1. William Demant Holdings A/S2. Company D3. GN ReSound

William Demant Holdings A/S

$64.5 1 monthSept. 27, 2010- Oct. 25, 2010

9. CKE Restaurants Inc.

1. Thomas H Lee Partners LP2. Apollo ManagementVII LP

Apollo ManagementVII LP (through Columbia Lake Acquisition Holdings Inc.)

$694 1 weekApril 19, 2010- April 25, 2010

10. Crystal River Capital Inc.

1. Brookfield Asset Management Inc.2. Laurel Canyon Partners LLC

Brookfield Asset Management Inc.

$13.7 2 weeksMarch 17, 2010- April 1, 2010

Source: Pepper Hamilton

How do buyers in midmarket auctions expect to pay for an

acquisition?

AUDIENCE SURVEY QUESTION:

A. Cash

B. Equity

C. Debt

D. Combination of all three

Bidding wars: Private equity’s dry powder vs. strategic’s. Who

has the upper hand?

Levers firms pull to make their offers more attractive

Deal financing: Then and now

Pre-emptive bids vs. competitive auctions

Do you see midmarket cross-border auctions becoming a bigger part of your strategy in 2011 and

beyond?

AUDIENCE SURVEY QUESTION:

A.Yes

B. No

C. Uncertain

The world is getting smaller: Cross-border midmarket deals

The effects of turmoil in the Middle East and Japan’s natural disaster on midmarket auctions

Closing remarks:Outlook for midmarket

auctions

•The Deal LLC and Pepper Hamilton LLP thank you for joining our

webcast

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