Presentation to: Global M&A Outlook March 7, 2012 · 4 CONFIDENTIAL Global M&A Volume Has Recovered Global M&A is up 22% YTD. Value of deals ($ in billions) Global M&A Activity –

© 2013 Navidar Group LLC

Member: FINRA/SIPC

Presentation to:

Global M&A Outlook

March 7, 2012

2 CONFIDENTIAL

Disclaimer

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3 CONFIDENTIAL

I Global Markets Overview


4 CONFIDENTIAL

Global M&A Volume Has Recovered

Global M&A is up 22% YTD.

Value of deals

($ in billions)

Global M&A Activity – Quarterly

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European M&A US M&A Asia-Pacific ex Jp M&A RoW M&A Volume

Volume of deals

Source: Mergermarket, as of September 30, 2011.


5 CONFIDENTIAL

Middle Market M&A Activity

M&A Transactions With Disclosed Deal Values Between $100 And $400M – US & Canada

$ Volume ($M) Year Over Year Growth% # of Deals Year Over Year Growth%

2011YTD(1) 109,747 21.0% 601 15.6%

Q3’11 39,367 -3.0% 194 -5.8%

Q2’11 46,430 26.9% 223 25.3%

Q1’11 38,238 44.5% 184 35.3%

2010 148,044 70.8% 738 67.3%

2009 86,702 -31.9% 441 -30.6%

2008 127,410 -24.5% 635 -22.7%

2007 168,821 11.8% 821 11.7%

M&A Transactions With Disclosed Deal Values Greater Than $400M – US & Canada(2)

$ Volume ($M) Year Over Year Growth% # of Deals Year Over Year Growth%

2011YTD(1) 774,062 29.1% 330 14.2%

Q3’11 233,189 3.4% 90 -21.7%

Q2’11 251,337 34.8% 126 20.0%

Q1’11 289,537 54.2% 114 65.2%

2010 796,771 50.6% 415 70.8%

2009 529,132 -41.8% 243 -28.9%

2008 909,769 -42.3% 342 -47.5%

2007 1,575,632 13.3% 651 17.5%

Source: CapitalIQ, only includes transactions with disclosed deal values.

(1) As of 9/30/11

(2) Excludes transactions $50B and above.

Middle Market Deal Volume Remains Strong.


6 CONFIDENTIAL

Energy & Power,

$396

Industrials, $299

Financial Services,

$209

Healthcare, $161

Consumer, $143

Telecommunications,

$126

Media , $34

Technology, $113

Other, $60

Business Services, $76

Transportation, $39

Real Estate, $67

Global M&A Activity by Sector


Global M&A By Sector - $1,723B YoY Change (%)

Energy and Power +7.9%

Industrials +69.2%

Financial Services +37.5%

Healthcare +40.5%

Consumer +18.3%

Telecommunications -9.6%

Technology +69.6%

Business Services -17.0%

Real Estate +68.9%

Transportation -25.9%

Media +22.4%

9%

8%

7%

7%

2%

4%

2%

4%

12%

17%

23%

3%

Technology, Healthcare, and Industrials Are Among the Most Active Sectors.


7 CONFIDENTIAL

Acquisition Valuations Are at Attractive Levels

EBITDA Multiples Rising Again

11.0x

11.4x

10.9x 11.0x

11.8x

9.0x

12.0x

6.0x

7.0x

8.0x

9.0x

10.0x

11.0x

12.0x

2007 2008 2009 2010 Q1 '11 Q2 '11 Q3 '11

LTM EBITDA Multiple – Average

Note: US targets only.

Source: CapitalIQ all deals greater than $100M with disclosed EBITDA multiples. Excludes EBITDA multiples that are greater than 25.0x.

Acquirers Are Paying a Premium for Attractive M&A Growth Opportunities.


8 CONFIDENTIAL

Significant Cash Still Remains on Sidelines

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: Wall Street Journal, October 2011.

’02 – ’07 Bull Market Average: 5.0%

7.4%

Cash and Cash Equivalents as a Percent of Market Cap


9 CONFIDENTIAL

Global Buyside Financial Sponsor Activity

Global Buyside Financial Sponsor Activity is Up 42% YTD and Has Returned to 2008

Levels.

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0%

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35%

Europe (Value) US (Value) Asia-Pacific ex Japan (Value)

Rest of the World (Value) Buyouts (% of Total M&A)

Value of Deals ($ in billions)

Global Private Equity Buyout Activity – Quarterly

Percentage of Global M&A



10 CONFIDENTIAL

Venture Capital Firms Continue to Deploy Capital

7.9 7.77.3

5.9

3.8

4.75.3

5.95.2

7.2

5.35.7

6.4

7.9

7.0

0.0

2.0

4.0

6.0

8.0

10.0

Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11

0

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Total Amount Invested ($ in billions) # Deals

Source: National Venture Capital Association, MoneyTree Report.


11 CONFIDENTIAL

Venture Capital Investment Activity by Industry

$855

$429

$625

$284

$1,627

$1,319

$804

$893

$767

$1,120

$682$728$749

$2,008

$1,079

$0

$500

$1,000

$1,500

$2,000

$2,500

Software Biotechnology Industrial/Energy Medical Devices and

Equipment

Media and Entertainment

Q3 2010 Q2 2011 Q3 2011

Total amount invested ($ in millions)

Source: National Venture Capital Association, MoneyTree Report


12 CONFIDENTIAL

VC Investment by Stage – Quarterly Data From 2009 – 2011

$308$544 $512 $385 $409

$780$304 $233 $146

$403$179

$723

$1,143 $1,200$1,710

$1,095

$1,697

$1,294 $1,469 $1,796

$2,113

$1,957

$1,185

$1,709 $1,800

$1,954

$2,012

$2,812

$1,710

$2,574 $2,114

$2,459

$2,497

$1,560

$1,325

$1,803

$1,805

$1,681

$1,882

$1,969

$1,412$2,351

$2,914

$2,320

0

2,000

4,000

6,000

8,000

1Q '09 2Q '09 3Q '09 4Q '09 1Q '10 2Q '10 3Q '10 4Q '10 1Q '11 2Q '11 3Q '11

Seed Early Stage Expansion Later Stage

Amount invested by stage ($ in millions)

Source: National Venture Capital Association, MoneyTree Report


13 CONFIDENTIAL

II Midwest Deal Activity


14 CONFIDENTIAL

North America Heat Chart

West South Mid-Atlantic Midwest Canada New England Total

TMT 423 188 148 69 61 71 960

Energy Mining, Oil & Gas 207 244 55 59 294 26 885

Life Sciences & Healthcare 170 158 137 125 37 79 706

Financial Services 92 229 91 78 25 35 550

Industrials, Chemicals & Engineering 102 110 80 108 60 30 480

Consumer 127 112 82 76 49 31 477

Business Services 105 121 47 46 33 40 392

Leisure 67 71 36 52 20 10 256

Defense 34 66 39 11 23 173

Transportation 12 15 9 10 6 3 55

Construction 6 7 3 13 12 2 43

Real Estate 13 8 6 10 5 0 40

Government 4 10 0 3 3 20

Agriculture 4 4 1 2 4 0 15

Other 0 0 1 0 0 1

Total 1,366 1,333 733 662 606 353 5,053

99th 66th

88th 55th

77th 44th

33rd

22nd

11th

Hot Warm Cold

Percentile ranking

The Heat Chart is based on ‘companies for sale’ stories tracked by mergermarket.com in 1H 2011.

Opportunities are captured according to the dominant sector and geography/region of the potential target company.


15 CONFIDENTIAL

M&A Deal Activity in Midwest

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2005 2006 2007 2008 2009 2010 H1 2011

$5m-$14m $15m-$100m $101m-$250m

$251m-$500m >$501m

Midwest M&A Split by Deal Size

Value ($ in millions)

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Volume ($ in millions)

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1,000

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2005 2006 2007 2008 2009 2010 H1 2011

Value not disclosed $5m-$14m $15m-$100m

$101m-$250m $251m-$500m >$501m

Source: Mergermarket, 1H 2011.


16 CONFIDENTIAL

M&A Midwest Deal Activity by Sector – 1H 2011

Mix of Deals by Industry Sector – $ Value

Industrials, Chemicals &

Engineering, 58.1%

Financial Services, 3.5%

Business Services, 3.9%

Consumer, 4.7%

Energy, Mining, Oil & Gas,

21.3%

Leisure, 0.4%

Construction, 0.5%

TMT, 4.0%

Transportation, 0.2%

Life Sciences & Healthcare,

6.4%Real Estate, 1.9%

$99.3B in 1H 2011

Source: Mergermarket, 1H 2011.


17 CONFIDENTIAL

III The Insider Look


18 CONFIDENTIAL

MWM Acoustics Acquisition Overview

MWM Overview:

A leading provider of innovative, high-performance ODM/OEM voice communication acoustic

solutions

Experts in the design and deployment of small-scale acoustic components & systems for voice

communication

Strong customer relationships and highly differentiated products have resulted in significant revenue

and EBITDA growth

Founded in 1997 by three former Bell Labs engineers; Headquartered in Indianapolis, Indiana with

Offices in Mainland China, Hong Kong, Taiwan and San Diego, California

Harman Overview:

Leading global provider of premium audio and infotainment solution

Array of brands that includes Harman Kardon®, JBL®, Mark Levinson® and Infinity®

Customers include the top names in entertainment, automotive and venue design

Public company headquartered in Stamford, CT with nearly $4B of annual revenue

Deal Rationale:

Highly complementary expertise where MWM is strong in microphones and Harman in speakers –

ample opportunities for synergy:

Harman has many relationships in Computing and Automotive that MWM can leverage to expand its

footprint

Large and growing end-markets such as tablet computers, smart phones, internet-TV that MWM/Harman

could jointly penetrate with microphones and speakers

MWM has strong relationships at leading consumer OEMs that would look favorably at a Harman/MWM

design approach

MWM is an acoustical “idea factory” that can provide years of new product innovation to multiple

existing Harman brands

MWM Finalized Its Sale to Harman in July 2011.

has been

acquired by

$137 Million


19 CONFIDENTIAL

The most logical buyers are often not the ones that end up doing the

deal

Conducting a sophisticated sale process is critical to maximizing value

The M&A market is highly imperfect

• Making imperfection work for your company creates additional value

There are many points of real value to be negotiated in these deals

• Key terms in the merger agreement

• Earnout structure and terms

• Employment Agreement and Non-Compete provisions

• Integration discussions and planning

Lessons Learned in MWM’s Sale Process


20 CONFIDENTIAL

Common Mistakes to Avoid in the M&A Process

One-off Negotiations, Disjointed Process

Contacting buyers at different times (or not getting everyone on the same timetable)

Negotiating with only one party or going exclusive too soon

Poorly orchestrated timing can hurt the competitive process and reduce negotiating leverage

Not Understanding Your Acquirer’s Mindset, Process or Customer Pain Points

Do they see the acquisition as tactical, strategic, platform, driven by synergies?

Know the right questions to ask - When do you walk away?

Improperly Marketing Your Story/Poor Positioning

Marketing yourself to prospective acquirers by focusing on the topics that matter most to Company’s clients, rather

than what matters to potential acquirers

Poor Communication

Divulging too much information, the wrong information and providing information too quickly

Positioning the process improperly thereby showing weakness or creating problems

Misunderstanding M&A Market Dynamics

What am I really worth? What can I do to enhance my value?

What metrics do you emphasize? (recurring revenue, bookings, renewal rates, know how, IP, customers)

Disconnect Between Market Opportunity and Financial Projections

Saying you are highly differentiated and serving a huge and growing market, yet projected year over year revenue

growth is below the market growth rate


21 CONFIDENTIAL

Keys to a Successful M&A Process

Assemble the Right Team

Investment Banking

Legal

Accounting

Start the Process Early

Financial model and system / ability to slice and dice financials / assumptions can be defended

Know what your customers will say (3rd party professional customer survey)

What really drives your business – the right metrics to track

Develop Relationships with Potential Acquirers

Understand investor / buyer profiles

Have Key Items in Place

Story – investor facing not customer facing

Financial model that matches story / bridges built for gaps

Prepare company materials

Audit and Revenue Recognition


22 CONFIDENTIAL

Creating Value Is More Art Than Science

Source: Grant Thornton and Navidar

Price V (S C) e

“Scientific” Value

(Baseline)

Story

(Developing a

Compelling

Story )

Competition (Using a

Competitive Process)

emotion (Evoking Buyer Emotion)

+ + =

Other Important Factors In Driving the Best Price

• Effective and Customized Process

• Avoid Process Mistakes

• Negotiate From Position of Strength


23 CONFIDENTIAL

Different Buyers Have Differing Valuation Frameworks

Price

Market Position

Proprietary Technology

Company Specific EBITDA Revenue Growth

Market Position

Proprietary Technology

Recognized Brand

Global Footprint

Strategic Value:

The opportunity to leverage

some or all of a company’s

assets

Value To You Value To Buyer A Value To Buyer B

Synergies

Synergies

Use the Imperfections of the Private Markets To Your Advantage.

Source: Grant Thornton and Navidar.


24 CONFIDENTIAL

IV Navidar Observations On the Market


25 CONFIDENTIAL

Middle Market M&A is Active

Prepare Early for the Sale Process

Positioning Your Story Properly is Critical to Success

Financial Models Undergo Heavy Scrutiny

Understand the Mindset of the Investor/Acquirer

Competitive Processes Result in the Best Outcomes

Concluding Observations


Documents

Presentation to: Global M&A Outlook March 7, 2012 · 4 CONFIDENTIAL Global M&A Volume Has Recovered Global M&A is up 22% YTD. Value of deals ($ in billions) Global M&A Activity –