GAP

GAPBRIDGING

THE

Investment Banking AdvisorsCapstone Partners

WALL STREET EXPERTISE – BUILT FOR THE MIDDLE MARKET ™

WE ENGINEER TRANSACTIONS…

CAP • STONE(1) a crowning achievement, a culmination; (2) a final touch, a finishing stroke; (3) a high point, a peak; (4) a summit stone possessing certain powers.

CAPSTONE PARTNERS LLC IS A PREMIER NATIONAL INVESTMENT BANKING FIRM DEDICATED TO DELIVERING WORLD CLASS WALL STREET EXPERTISE TO LEADING MIDDLE-MARKET COMPANIES. WE LEAD BUSINESS OWNERS, MANAGEMENT TEAMS AND INVESTORS THROUGH HIGHLY COMPLEX, MISSION-CRITICAL CAPITAL MARKETS TRANSACTIONS.

F I R M O V E R V I E W

…FOR INDUSTRY LEADERS

WE ENGINEER TRANSACTIONS…

PRIVATEPLACEMENTS

ACQUISITIONADVISORY

SALES &DIVESTITURES BOARD

ADVISORY

CORPORATEVALUATIONS

INDUSTRYRESEARCH

SALES & DIVESTITURESCapstone is one of the most active and aggres-sive middle-market investment banking firms in the country. We specialize in liquidity events and pride ourselves in representing “David v. Goliath” – the privately owned business negotiating with the large, blue chip acquirers and investors.

We have been successful in executing liquidity transactions at premium valuations for numer-ous #1 ranked companies and marquee private investment firms in the following transactions:

Sales: providing a full exit strategy for owners and investors while securing the optimal long-term strategic partner for the company

Recapitalizations: achieving partial liquidity to diversify ownership risk and secure additional capital to accelerate growth opportunities

Divestitures: the sale of portfolio companies, divisions or assets that are non-core to gener-ate growth capital and maintain a focused business strategy

Mergers: combining companies to establish a more competitive entity by filling strategic gaps in market presence, sales force and distribution channels

ACQUISITION ADVISORYOur client-partners run the gamut from acquisi-tive middle-market companies to the Fortune 1000. Capstone dedicates significant resources to its buy-side advisory business. We leverage our industry research initiatives to help our client-partners identify and prioritize various potential acquisition opportunities. By marrying these opportunities to the criteria of our client-partners, we have the ability to facilitate and successfully complete acquisition programs.

Through our frequent involvement in the stra-tegic planning processes of our client-partners, Capstone is able to proactively approach target companies that fill our client-partners’ strategic acquisition needs. Our buy-side capabilities include:

4 Strategic Planning

4 Market Research

4 Target Identification

4 Valuation & Structuring

4 Transaction Management

4 Business Due Diligence

4 Negotiations & Closing

PRIVATE PLACEMENTSBeyond our ability to make direct investments, Capstone assists companies with securing growth and acquisition capital. Through our registered broker dealer, we have established close relationships with the leading venture capital and private equity firms globally.

Capstone works with companies to engineer the optimal long-term capital structure across various sources of available debt and equity capital, including:

Bridge Financing: short term debt financing with equity enhancers

Senior Secured Debt: term debt leveraged against fixed assets

Senior Unsecured Debt: term debt leveraged against future cash flows

Mezzanine Debt: subordinated debt with PIK options and equity warrants

Preferred Stock: equity capital with priority liquidation and protective rights

Common Stock: equity capital with rights on par with existing shares

INTEGRATED EXPERTISECapstone has created a uniquely focused firm that has been built specifically for the needs of middle-market entrepreneurs. Our integrated capabilities allow Capstone to deliver expertise throughout all aspects of a transaction – strategy development, pre-planning, positioning, execution, negotiations, structuring, closing, wealth preservation and risk management.

T R A N S A C T I O N S E R V I C E S

BOARD ADVISORYCapstone is committed to forging long-term relationships with leading companies in the industries we cover. We invest in these relationships by helping owners, investors and management teams develop the business in a manner which will maximize the long-term equity value of the firm.

Our strategic advisory services have been developed to deliver deep industry and capital markets expertise combined with seasoned operational perspectives. We help formulate and execute strategies across the enterprise, including:

Market Analysis: assessing emerging trends and implications on the business

Competitive Positioning: determining how value is being created

Strategic Growth Plan: formalizing short and long-term growth initiatives

Capital Markets Monitoring: tracking transaction activity for optimal timing

Capital Budgeting: developing rigor around capital management

Opportunity Assessment: defining market, product and distribution initiatives

Special Projects: responding to ad hoc decisions and analyses

INDUSTRY RESEARCHAt the heart of Capstone’s transaction execution capabilities is our commitment to research-centric industry expertise. Our unique approach delivers proprietary market intelligence to help our clients engineer the best transactions under the optimal market conditions.

The research we develop - and the intelligence it yields - provides board members, investors and other shareholders with real-time, real-world insights on emerging industry dynamics and transaction trends. Leveraging this intel-lectual capital base, Capstone works to ensure precise market timing and asset positioning with immediate access to key decision makers.

Ultimately, we utilize our research team to deliver the industry knowledge that pre-qualifies transactions to maximize probability and speed to closure.

We deliver our market intelligence via two forms of research:

Coverage Reports: provide a robust view of various capital market dynamics

Sector Snapshots: offer a preview into the markets we serve

CORPORATE VALUATIONSBecause we are constantly active in the capital markets and deeply knowledgeable within specific industries, Capstone is in a unique position to provide market based valuation and appraisal advisory services to shareholders, boards of directors and other interested parties.

Our valuations and fairness opinions can be used for a variety of purposes, including:

4 Mergers & Acquisitions

4 Corporate Sales & Divestitures

4 Purchase & Sale Agreements

4 Liquidation & Insolvency Analyses

4 Purchase Price Allocations

4 Stock Options & ESOPs

4 Expert Opinions & Testimony

4 New Investments & Financings

4 Joint Venture Agreements

4 Dispute Avoidance/Resolution

4 Estate Planning & Gifting

TECHNOLOGY & MEDIA3

BUSINESS SERVICES1

COMMS & NETWORKINGElectronic Instruments

Network EquipmentSemiconductors

Semi Cap EquipmentTelecom Equipment

Wireless Infrastructure

MEDIA & INTERNETContent Creation

Content ManagementData Analytics

Digital Media & e-MarketingDirect Marketing & Printing

Retail & Entertainment

SOFTWAREEnterprise

InfrastructureFinancial Services

HealthcarePublic Safety

Security

PROCESS OUTSOURCINGFacilities Management

Human ResourcesSpecialty Distribution

Supply Chain ManagementThird Party Logistics

Transaction Processing

CONSULTING & SOLUTIONSEngineering Services

IT ServicesManagement Consulting

Marketing ServicesResearch & TestingStaff Augmentation

EDUCATION & TRAININGAllied HealthAllied Trade

Cosmetology/SpaInformation Technology

ProfessionalTechnical

HEALTH & MEDICALMedical Devices

Supplies & EquipmentDiagnosticsHome Care

ImagingLife Sciences

INDUSTRIALBuilding Products

Connectors & ComponentsElectrical Equipment

Motion & Flow ControlTools & Instrumentation

Testing & Assembly

CONSUMERAutomotive Aftermarket

Food & BeverageHealth & BeautyHome & GardenSpecialty Retail

Sports & Leisure

SPECIALTY PRODUCTS2

SUPERIOR TRANSACTION

CLOSURE RATESCapstone is able to post superior transaction closure rates because we dedicate our resources to three specific industry verticals. Within these industry vertical groups, Capstone has forged deep relationships with the leading acquirers and investors while also maintaining real-time intimacy with emerging sector trends and transaction strategies.

INDUSTRY COVERAGE

A D V I S O R Y S E R V I C E S

OURCOMMITMENT…

CAPSTONE IS ENGAGED TO CLOSE TRANSACTIONS that are typically among the most critical corporate events our client-partners experience. As a firm, Capstone understands the impact that these transactions can have on the business as well as the personal lives of our client-partners.

To our knowledge, Capstone’s transaction closure rate is amongst the highest in our industry. We engage in a limited number of transactions and only accept new client-partners if we are confident enough to make our own investment. As a team, we subscribe to professional values that we feel make a difference in our client-partner relationships and the quality of their representation in the marketplace.

GRITWE ROLL UP OUR SLEEVES AND WORK WHILE OTHERS REST

PERFECTIONWE MANAGE EVERY TRANSACTION AS IF IT WERE OUR OWN

FORESIGHTWE STAY A STEP AHEAD IN BOTH THEORY AND EXECUTION

INTEGRITYWE TREAT PEOPLE WITH CANDOR AND RESPECT

PASSIONWE COME TO PLAY AND GIVE 100%

SUCCESSWE BUILD VALUE AND STRIVE TO OVER-DELIVER

O U R P H I L O S O P H Y

…MAKES THEDIFFERENCE

OURCOMMITMENT…

CAPSTONE’S PRACTICE WAS FOUNDED IN THE 1990’S when, as part of Arthur Andersen, we built one of the fastest growing, most successful middle-market corporate finance practices in the country. Since spinning the practice out of Andersen, we have continued to engineer highly successful transactions for our client-partners.

Capstone’s success and growing reputation have attracted some of the industry’s best senior executive talent. We have expanded our team by drawing upon many of the leading financial advisory firms in the world, with collective talents sourced from such firms as Lehman Brothers, Morgan Stanley, Montgomery Securities, Banc of America Securities, SG Cowen and Robertson Stephens, among others. This ensures that our client-partners receive the expert advice that they deserve.

Today, we possess over 100 years of transac-tion experience, spanning hundreds of M&A and financing transactions valued in excess of $25 billion. As a result of our efforts to build a leading middle-market firm, Capstone has gained recogni-tion among the industry’s elite. Over the past three years, Capstone has ranked in the Top 20 nation-ally, and Top 3 regionally, among the “Most Active Investment Banking Firms.”

WE PRIDE OURSELVES ON

OUR COMMITMENT TO

MIDDLE-MARKET

COMPANIES:CAPSTONE

WILL DELIVER THE BEST TEAM AND THE HIGHEST QUALITY

EXECUTION AVAILABLE IN THE MARKET.

O U R L E G A C Y

OURCOMMITMENT…

Has beenacquired by

MEDTRONIC, INC.(NYSE: MDT)

Acquisition advisory

ALTAWORKS CORPORATION

Has recapitalized with

GREY MOUNTAIN PARTNERS LLC

Has divested assets to

MEDTRONIC, INC. (NYSE: MDT)


FIRST ENERGY CORPORATION

Has beenacquired by

SUNGARD DATASYSTEMS, INC.

(NYSE: SDS)

Has beenacquired by

REGIS CORPORATION (NYSE: RGS)


FIDELITY CAPiTAL INVESTORS

Has divested assets to

ROMEO RIM, INCTHE RESERVE GROUP

Has beenacquired by

BRANFORD CASTLE, INC.

E-MonEnergy Monitoring Products

ACROSS 10 TRANSACTION COMPETENCY CATEGORIES, OUR CLIENT-PARTNERS HAVE RATED CAPSTONE’S PERFORMANCE ON THEIR TRANSACTIONS AT A CUMULATIVE 93% SATISFACTION LEVEL.

“I have used a number of investment banks over the past 17 years including Merrill Lynch, Goldman Sachs and DLJ amongst others and the Capstone team not only far exceeded my expectations, but also clearly outperformed any of those firms.”John Calnan CFO, Shareholder netDecide Corporation, VA

“Capstone demonstrated passion from the start; this deal was going to get done! The key to this transaction was their creative problem solving capabilities – obstacle by obstacle. This trans-action would not have been completed without Capstone and I am looking forward to working with them again.”Marc Goldberg General Partner BioVentures Investors, LLC, MA

“I was very impressed with Capstone’s rapid turnaround time. They always seemed to be first out of the gate in identifying the most prominent transaction issues and recommending solutions. Their approach was unassuming and intelligently focused. The quality of the advice Capstone provided us was outstanding.”Richard Lockman Principal Shareholder Ross Learning LLC, MI

“Capstone has a style and approach that is remarkable to watch. They have a way of rop-ing in wayward issues with complete finesse. Bottom line – a phenomenal job. We did not have one moment of regret in our decision to engage Capstone.”Peter Pierce CEO, Principal Shareholder Punch Software, MO

C L I E N T - P A R T N E R T E S T I M O N I A L S

…MAKES THEDIFFERENCE

OURCOMMITMENT…

Has beenacquired by

REGIS CORPORATION (NYSE: RGS)


THE RIVERSIDECOMPANY

Has beenacquired by

INFORMA GROUP PLC (LSE: INF.L)

Has beenacquired by

RESPIRONICS, INC.

Has beenacquired by

COLLEGIATE FUNDING SERVICES, INC.

(NASDAQ: CFSI)


ALAN JAMESGROUP

Has secured$9,500,000

SERIES B SENIORPARTICIPATING CONVERTIBLE

PREFERRED STOCK

Has recapitalizedwith

INSIGHT VENTURE PARTNERS

Has beenacquired by

CASTLE ISLAND PARTNERS, LLC

Has beenacquired by

FRIEND SKOLER & CO.

“My transaction has become noted as the best in the industry. Capstone did it. What more can I say about them?”Henri Blaine CEO, Principal Shareholder Blaine Career Schools, MA

“I have been involved in numerous transactions throughout my long career. I chose Capstone because they understood the industry and, most importantly, their senior officers committed their full personal participation. That commitment made a big difference for us. I give Capstone top marks across the board.”Leon Hirsch Former CEO, U.S. Surgical Corporation General Partner, JHK Investments, LLC, CT

“I hired Capstone because of their track record and industry focus, which I believe made a difference. Capstone committed their best resources to us and delivered. The personality and professionalism of the firm are stellar.”Arnold Heinrich CEO, Principal Shareholder SBPA Systems, TX

“I was very pleased with Capstone’s ability to negotiate on our behalf. Capstone has demonstrated a real commitment to clearly understand our expectations and requirements as we continue our use of M&A as a core strategy. This desire to be close partners will ensure that our M&A efforts go smoothly. I look forward to using Capstone again as a core member of our M&A team.” Alain Cohen President and CTO OPNET Technologies, Inc., MD

OUR CLIENT-PARTNERS BELIEVE STRONGLY THAT CAPSTONE MAXIMIZED THE VALUE OF THE COMPANY (92%) AND INCREASED THE PROBABILITY OF TRANSACTION CLOSURE (96%).

C L I E N T - P A R T N E R T E S T I M O N I A L S

LEADERSHIP TEAMWith our proven track record of success and a commitment to excellence, our entire team is dedicated to delivering superior results while creating maximum value for our client-partners.

O U R P E O P L E

John Ferrara President, Managing Partner

[email protected]

John is the founder and Chief Executive of Capstone. Over his extensive career in investment banking, venture capital and management consulting, John has executed over 100 related engagements representing in excess of $6 billion in value.

John was formerly a Regional Managing Partner with Andersen Corporate Finance, where he founded the Boston office and held various national and global leadership positions. He started his career in Lehman Brothers’ M&A group in New York, London and Riyadh. John later became a founding member of Rodman & Renshaw’s M&A practice in New York. After a break to compete in Australian semi-professional baseball, John joined the Deloitte Consulting Group in Los Angeles. While with Deloitte, he focused on turnaround and interim management engagements to develop refined operations, strategy and finance expertise. John earned his MBA in Entrepreneurial Studies from the Anderson School at UCLA and the London School of Economics, during which time he founded and operated a corporate advisory boutique, JG Atlas Advisors, and its related investment fund, Atlantis Capital Partners. He holds dual BA degrees from Wesleyan University and is qualified as a General Securities Principal.

We always received top-notch advice, with outstanding industry knowledge, good foresight, and ferocious attention to detail. Senior level attention remained at 100% throughout when other firms would have punted to a junior associate. Enrique Marroquin, Director of Finance, Hunt Power, L.P., TX

” ”

Their industry expertise was very important to us. During the transaction, they made recommendations on positioning and market timing that had a significantly positive impact on the deal. The Managing Director was in the trenches with us on a daily basis during the most critical aspects of the process. Capstone provided us with the trusted, objective advice and technical experience we were looking for. Jim Cegelski, CEO and Principal Shareholder, Accessories Marketing, Inc., CA” ”

I knew how to run a business, but very little about how to sell one. The team at Capstone gave me the confidence to proceed with speed into a perfectly timed marketplace. There were many times during the process that honest, confidential advice was needed. We always felt comfortable that we could trust Capstone with anything. You need that support during one of the most significant events that will ever happen in your lifetime. Edward Caselden, Chief Executive Officer, L-Com, Inc., MA”

”

Kevin has over 14 years of investment banking, syndicated bank loan and corporate finance experience. He leads Capstone’s Specialty Products industry practice and is a member of the firm’s Board of Directors.

Prior to joining Capstone, Kevin was in the Investment Banking Group at Adams Harkness, where he completed over 20 transactions including private placements, public offerings, mergers and acquisitions and advisory assignments. He also served as an Associate in the Debt Capital Markets Group at FleetBoston Robertson Stephens, Inc. Before FleetBoston, Kevin was at Textron Inc. where he worked in the Strategic Planning, Internal Audit and Mergers & Acquisitions departments. He also has four years of finance experience with Oracle Corporation. Kevin received his MBA from the University of Pennsylvania’s Wharton School and his BA from Brown University. He is qualified as a General Securities Representative.

Kevin JolleyHead of Speciality Products

[email protected]

Mark YoungHead of Business [email protected]

Mark is the head of Capstone’s Business Services industry practice and is a member of the Board of Directors. He has over 18 years of investment banking transaction experience involving middle market companies.

Prior to joining Capstone, Mark served as a Managing Director in the investment banking division of Adams Harkness, Inc. He joined Adams Harkness in 1988, helping to establish their corporate finance practice as well as their public company M&A and lead-managed equity financing capabilities. Mark served as the head of Adams Harkness’ west coast office and was a key contributor to the firm’s growth and investment banking strategy, having founded and managed the Adams Harkness Technology Manufacturing Solutions franchise that became one of the firm’s most successful banking efforts. During his tenure, Mark participated in more than 100 assignments across multiple industries, including industrial manufacturers and service providers, consumer products, healthcare and technology. Mark earned his BA from the University of Virginia and is qualified as a General Securities Principal.

Tim has over 18 years of experience in mergers and acquisitions, private and public capital raising and principal investing. He leads Capstone’s Technology and Media industry practice and is a member of the firm’s Board of Directors.

Tim has successfully completed more than 70 strategic advisory and capital raising assignments, focusing on several sectors including communications equipment and data communications/networking, telecommunications services, financial services, application software and semiconductors. Prior to joining Capstone, Tim was an Executive Director at Morgan Stanley, focusing on building strategic advisory and financing-based relationships with technology companies in the New England area. Tim also served in senior positions at Banc of America Securities and Montgomery Securities where he was instrumental in building their east coast technology investment banking practices. Tim began his career at Lehman Brothers spending five years in the firm’s M&A group. He earned his MBA from the University of North Carolina at Chapel Hill and his AB from Kenyon College.

Timothy HarnedHead of Technology & Media

[email protected]

Capstone has built its reputation in the market amongst leading acquirers and investment firms based upon the quality of the companies we represent. We have earned a reputation with our client-partners based upon the quality of that representation. Partnering with Capstone yields the following benefits:

ALIGNMENTCapstone puts its own capital at risk and prefers to be compensated based only on our success. Our client-partners benefit from having advisors that stand behind their value.

EXPERTISECapstone is industry focused with deep relationships in the sectors we cover. Our client-partners benefit from precise positioning and immediate access to key market decision makers.

DEDICATIONEach transaction is staffed with our most senior professionals. Our client-partners benefit from the creative skills that our seasoned deal teams bring to the table.

PRESENCECapstone maintains active relationships with the leading acquirers and investors across the U.S. and abroad. Our client-partners benefit from our exhaustive distribution capabilities.

WHY CAPSTONE?

PERFORMANCE RATINGS

At the conclusion of each transaction, Capstone seeks immediate and direct feedback from our client-partners. We ask them to rate our expertise across 10 core transaction competencies on a scale of 100%.

GENERAL PERFORMANCE

Capstone was the right investment banking partner for our transaction.

Capstone exceeded our expectations with respect to effort and results.

PROFESSIONAL REPRESENTATION

Capstone delivered senior level attention during each stage of our transaction.

Capstone represented us with passion, commitment and integrity.

INDUSTRY EXPERTISE

Capstone demonstrated a deep understanding of our industry.

Capstone positioned our company well to the right audience.

TRANSACTION EXPERTISE

Capstone accessed key decision makers and delivered competitive bids.

Capstone delivered technical deal expertise and negotiated effectively.

TRANSACTION RESULTS

Capstone maximized the value of our company.

Capstone increased the probability of closure.

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96%

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O U R V A L U E

CLIENT SITES

NATIONAL PRESENCE

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