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
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