lbo-long-form

8/7/2019 lbo-long-form

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($ in millions, except per share data)

#NAME? #NAME?

2005 2006 2007 2008 2009 2010

Total Revenue ) $370.8 $380.8 $402.5 $458.1 $468.0 $470.5

% Growth NA 0.0 0.1 0.1 0.0 0.0

COGS ) 182.5 188.6 207.7 239.6 249.8 252.2

% of Sales 0.5 0.5 0.5 0.5 0.5 0.5

Gross Profit $188.3 $192.2 $194.8 $218.5 $218.2 $218.3

% Margin 0.5 0.5 0.5 0.5 0.5 0.5

SG&A ) 46.6 61.9 74.8 88.3 91.7 92.4% of Sales 0.1 0.2 0.2 0.2 0.2 0.2

EBITDA $141.7 $130.3 $120.0 $130.2 $126.5 $125.9

% Margin 0.4 0.3 0.3 0.3 0.3 0.3

Depreciation ) 14.0 11.1 12.1 14.1 14.1 14.1

% of Sales 0.0 0.0 0.0 0.0 0.0 0.0

Amortization ) 25.7 18.2 18.6 19.6 19.9 20.0

% of Sales 0.1 0.0 0.0 0.0 0.0 0.0

Total D&A 39.7 29.3 30.7 33.7 34.0 34.1

% of Sales 0.1 0.1 0.1 0.1 0.1 0.1

Stock-Based Comp ) 16.5 13.4 11.3 10.8 10.6 10.7

% of Sales 0.0 0.0 0.0 0.0 0.0 0.0

EBIT $85.5 $87.6 $78.0 $85.7 $81.9 $81.1

% Margin 0.2 0.2 0.2 0.2 0.2 0.2

EBITA $127.7 $119.2 $107.9 $116.1 $112.4 $111.8

% Margin 0.3 0.3 0.3 0.3 0.2 0.2

Interest (Income) / Expense ) 4.9 0.9 - (2.4) - -

Equity (Income) - - - - - -

Minority Interest - - - - - -

Other (Income) / Expense ) 0.1 - - (0.1) - -

Income Before Taxes $122.7 $118.3 $107.9 $118.6 $112.4 $111.8

Provision for Tax ) 42.9 41.4 37.8 41.5 39.3 39.1

% Tax Rate 35.00% 0.4 0.4 0.4 0.4 0.4

Cash Net Income $79.8 $76.9 $70.1 $77.1 $73.1 $72.7

% Margin 0.2 0.2 0.2 0.2 0.2 0.2

Cash Diluted EPS $2.27 $2.27 $1.97 $2.14 $2.00 $1.99

Diluted Shares Out 35.064 33.880 35.580 36.080 36.580 36.580

Cash to GAAP Reconciliation:

Amortization $16.7 $11.8 $12.1 $12.7 $12.9 $13.0

Stock-Based Comp 10.7 8.7 7.3 7.0 6.9 7.0

One-Time Charges 8.2 3.4 0.7 0.1 - -

GAAP Net Income $44.1 $53.0 $50.0 $57.2 $53.2 $52.7

% Margin 0.1 0.1 0.1 0.1 0.1 0.1


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GAAP Diluted EPS $1.26 $1.56 $1.41 $1.59 $1.46 $1.44

Capex ) $26.0 $12.5 $18.0 $16.0 $14.1 $14.2

% of Sales 0.1 0.0 0.0 0.0 0.0 0.0


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CAGR

2011E 2012E 2008-2012

$475.2 $480.0 0.0

1.00% 0.0

254.7 257.3

0.5 0.5

$220.5 $222.7 0.0

0.5 0.5

93.3 94.30.2 0.2

$127.2 $128.4 (0.0)

0.3 0.3

14.2 14.4

0.0 0.020.0 20.0

0.0 0.0

34.2 34.4

0.1 0.1

10.8 10.9

0.0 0.0

$82.1 $83.1 (0.0)

0.2 0.2

$112.9 $114.0 (0.0)

0.2 0.2

- -

- -

- -

- -

$112.9 $114.0 (0.0)

39.5 39.9

0.4 0.4

$73.4 $74.1 (0.0)

0.2 0.2

$2.01 $2.03 (0.0)

36.580 36.580

$13.0 $13.0

7.0 7.1

- -

$53.4 $54.0 (0.0)

0.1 0.1


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$1.46 $1.48 (0.0)

$14.3 $14.5

0.0 0.0


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TargetCo LBO Valuation($ in millions, except per share data)

Sources and Uses of Funds

% of Mult. of Interest

$ mm Total EBITDA Rate Spread Years PIKSources of Funds

Excess Cash $116.6 0.1 0.97 0.02 - -

Debt Assumed 230.0 0.3 1.91 0.03 - 0

Minority Interest Assumed 0.0 0.0 0.00 NA ) - -

Debt

Revolver 0.0 0.0 0.00 0.07 L + 425 0

Term Loan - A 150.0 18.40% 1.24 0.08 L + 479 0

Term Loan - B 0.0 0.00% 0.00 0.09 L + 600 0

Senior Note 75.0 9.20% 0.62 0.09 L + 650 0

Subordinated Note 0.0 0.00% 0.00 0.10 - 5

Mezzanine 0.0 0.00% 0.00 0.11 - 0

Seller Note 0.0 0.00% 0.00 0.11 - 2

Preferred

Preferred Stock - A 10.0 0.0 0.08 0.14 - 3

Preferred Stock - B 0.0 0.0 0.00 0.14 - 3

Equity

Common - Sponsor 233.6 0.3 1.94 Current Interest Rates

Management Rollover 0.0 0.0 0.00

Investor Rollover 0.0 0.0 0.00 3-Month LIBOR 2.78%

Other 0.0 0.0 0.00 10-Year Treasury 4.50%

Total Sources $815.2 1.0 6.76 Interest on Excess Cash 2.00%

Uses of Funds Refinance Target DebtEquity Purchase Price

Existing Shareholders $563.0 0.7 4.67 Refinance?

Investor Rollover 0.0 0.0 0.00

Other Uses Minimum Cash / Revolver

Fund Cash Balance 0.0 0.0 0.00

Assume Debt 230.0 28.21% 1.91 Minimum Cash Balance $30.0

Refinance Debt 0.0 0.00% 0.00 Total Bank Commitment $100.0

Assume Minority Int. 0.0 0.00% 0.00

Purchase Minority Int. 0.0 0.00% 0.00 Scenario

Fees & Expenses 22.3 2.73% 0.18

Other 0.0 0.00% 0.00 Financing Case 4

Total Uses $815.2 1.0 6.76

Summary Credit Statistics

Year 1 Year 2 Year 3 Year 4 Year 5

LTM 2008 2009 2010 2011 2012

Leverage Statistics

Total Debt / EBITDA Err:522 Err:522 Err:522 Err:522 Err:522

Senior Debt / EBITDA Err:522 Err:522 Err:522 Err:522 Err:522


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Net Debt / EBITDA Err:522 Err:522 Err:522 Err:522 Err:522

Interest Coverage

EBITDA / Senior Interest Err:522 Err:522 Err:522 Err:522 Err:522

EBITDA / Total Interest Err:522 Err:522 Err:522 Err:522 Err:522

EBITDA - Capex / Total Interest Err:522 Err:522 Err:522 Err:522 Err:522

Cumulative Senior Debt Paydown Err:522 Err:522 Err:522 Err:522 Err:522

Capital Structu


LTM/

Closing

Operating Data

EBITDA $120.6

Capex

Increase / (Decrease) in Working Capital

Debt Summary

Debt Assumed $230.0Revolver 0.0

Term Loan 150.0

Senior Note 75.0

Total Senior Debt $455.0

Subordinated Debt 0.0

Preferred Stock 10.0

Non-Controlling (Minority) Interest 0.0

Capital Leases 0.0

Total Debt $465.0

Cash 30.0

Net Debt $435.0

Interest Expense & Preferred Dividends

Interest on Assumed Debt

Senior Interest

Subordinated Interest

Preferred Dividends

Total Interest Expense & Preferred Dividends

Cash Interest Expense

Leverage Statistics

Total Debt / EBITDA 3.86Senior Debt / EBITDA 3.77

Net Debt / EBITDA 3.61

Total Debt / EBITDA - Capex NA

Interest Coverage

EBITDA / Senior Interest

EBITDA / Total Interest

EBITDA / Cash Interest


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EBITDA - Capex / Senior Interest

EBITDA - Capex / Total Interest

EBITDA - Capex / Cash Interest

EBITDA - Capex - WC / Senior Interest

EBITDA - Capex - WC / Total Interest

EBITDA - Capex - WC / Cash Interest

Debt Paydown

Cumulative Senior Debt Paydown

Cumulative Debt Paydown (excl. Preferred and Minority Interest)

Returns

Return on Equity (ROE)

Return on Assets (ROA)

Liquidity Ratios

Current Ratio 1.9

Quick ("Acid Test") Ratio 1.7

Asset UtilizationTotal Asset Turnover

Fixed Asset Turnover

Working Capital Assumptions

Inventory Turnover

Accounts Receivable Turnover

Accounts Payable Turnover

Inventory Holding Period (days)

Days Receivable

Days Payable


Historical FYs Ended Sep 30; LTM 2 Mos.

Year 0 Ended Ending

2005 2006 2007 3/31/2008 9/30/2008

Net Sales $370.8 $380.8 $402.5 $420.4 $76.4

% Growth NA 0.0 0.1 NA NA

COGS 182.5 188.6 207.7 219.3 39.9

% of Sales ) 0.5 0.5 0.5 0.5 0.5

SG&A 46.6 61.9 74.8 80.5 14.7

% of Sales ) 0.1 0.2 0.2 0.2 0.2 Other 0.0 0.0 0.0 0.0 0.0

% of Sales ) 0.0 0.0 0.0 0.0 0.0

EBITDA $141.7 $130.3 $120.0 $120.6 $21.7

% Margin ) 0.4 0.3 0.3 0.3 0.3

Existing Depreciation 14.0 11.1 12.1 13.1 2.4

% of Sales ) 0.0 0.0 0.0 0.0 0.0

Depreciation of Fixed Asset Write-Up 0.0 0.0 0.0 0.0 0.1

% of Sales ) 0.0 0.0 0.0 0.0 0.0


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EBITA $127.7 $119.2 $107.9 $107.5 $19.3

% Margin ) 0.3 0.3 0.3 0.3 0.3

Existing Amortization 25.7 18.2 18.6 19.1 3.3

% of Sales ) 0.1 0.0 0.0 0.0 0.0

New Intangibles Amortization 0.0 0.0 0.0 0.0 0.8

% of Sales ) 0.0 0.0 0.0 0.0 0.0

Stock-Based Compensation 16.5 13.4 11.3 11.5 1.8% of Sales ) 0.0 0.0 0.0 0.0 0.0

EBIT $85.5 $87.6 $78.0 $76.9 $13.4

% Margin ) 0.2 0.2 0.2 0.2 0.2

Interest Expense

Debt Assumed Err:522

Revolver Err:522

Term Loan - A 1.8

Term Loan - B 0.0

Senior Note 1.2

Subordinated Note 0.0

Mezzanine 0.0Seller Note 0.0

Total Interest Expense Err:522

Other (Income) / Expense Rate

Interest Income 0.02 Err:522

Amortization of Capitalized Financing Costs 0.2

Equity Income 0.0

Sponsor Management Fee 0.0

(Gain) / Loss on Sale of Assets 0.0

Other Expense / (Income) 1.2

Total Other (Income) / Expense Err:522

Income Before Tax Err:522

Income Tax Expense / (Benefit) Err:522

Effective Tax Rate Err:522

Pro Forma GAAP Net Income Err:522

% Margin ) Err:522

Preferred Stock - A Dividend 0.14 Err:522

Preferred Stock - B Dividend 0.14 Err:522

Common Stock Dividend 0.0

Non-Controlling (Minority) Interest 0.0

Pro Forma GAAP Net Income Available to Common Shareholders Err:522

Existing Fully Diluted Shares Outstanding 36.080

Shares Issued to Contributors of New Equity Capital 15.215

Pro Forma Fully Diluted Shares Outstanding 51.295

Pro Forma GAAP EPS

Standalone GAAP EPS


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$ Accretion / (Dilution)

% Accretion / (Dilution)

Pre-Tax Non-Cash Items

Less: Tax Impact

After-Tax Non-Cash Adjustments

Pro Forma Cash Net Income Available to Common Shareholders

Pro Forma Cash EPS

Standalone Cash EPS

$ Accretion / (Dilution)

% Accretion / (Dilution)

Wor


Historical

Year 0

2007Sales $402.5

COGS 207.7

Assumptions

Non-Cash Current Asset Projections Method FY2007

Accounts Receivable % of Sales 0.3 $120.2

Inventories % of COGS 0.0 0.0

Deferred Income Taxes % of Sales 0.0 10.7

Prepaid Expenses & Other % of COGS 0.0 8.5

Non-Debt Current Liabilities Projections

Accounts Payable % of COGS 0.1 $18.4

Accrued Liabilities % of COGS 0.1 21.0Client Deposits % of Sales 0.1 26.7

Other Current Liabilities % of COGS 0.1 25.1


Historical Adjustments Pro Forma

Year 0 Mar 31 GAAP/ Closing

2007 2008 Financing Other 7/31/2008

Assets

Cash & Equivalents $132.8 $146.6 ($116.6 $30.0

Accounts Receivable 120.2 131.4 131.4Inventories 0.0 0.0 0.0

Deferred Income Taxes 10.7 8.8 8.8

Prepaid Expenses & Other 8.5 8.2 8.2

Total Current Assets $272.2 $295.1 $178.5

PP&E, gross $168.9 $175.4 $15.0 $190.4

(Accumluated Depreciation) (136.2) (142.4) (142.4)

PP&E, net $32.7 $33.0 $48.0


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Equity Investments 0.0 0.0 0.0

Capitalized Financing Costs 0.0 0.0 6.4 6.4

Goodwill, net 60.7 61.1 0.0 440.9

Intangible Assets, net 40.2 37.5 140.7 153.8

Operating Rights, net 0.0 0.0 0.0

Other Long-Term Assets 16.6 14.3 14.3

Total Assets $422.4 $440.9 $841.9

Liabilities

Short-Term Debt $0.0 $0.0 $0.0 $0.0

Accounts Payable 18.4 20.7 20.7

Accrued Liabilities 21.0 15.4 15.4

Client Deposits 26.7 0.0 0.0

Other Current Liabilities 25.1 59.1 59.1

Total Current Liabilities $91.2 $95.2 $95.2

Deferred Income Taxes $0.0 $0.0 $54.5 $54.5

Capital Leases 0.0 0.0 0.0

Other Long-Term Liabilities 18.7 17.9 17.9

Revolver 0.0 0.0 0.0 0.0

Existing LT Debt (excl. current portion) 230.0 230.0 0.0 230.0

Term Loan - A 0.0 0.0 150.0 150.0

Term Loan - B 0.0 0.0 0.0 0.0

Senior Note 0.0 0.0 75.0 75.0

Subordinated Note 0.0 0.0 0.0 0.0

Mezzanine 0.0 0.0 0.0 0.0

Seller Note 0.0 0.0 0.0 0.0

Total Liabilities $339.9 $343.1 $622.6

Shareholders' Equity

Existing Shareholders' Equity $82.5 $97.9 $0.0 $97.9

Non-Controlling (Minority) Interest 0.0 0.0 0.0 0.0

Preferred Stock - A 0.0 0.0 10.0 10.0

Preferred Stock - B 0.0 0.0 0.0 0.0

Common - Sponsor 0.0 0.0 233.6 233.6

Management Rollover 0.0 0.0 0.0 0.0

Investor Rollover 0.0 0.0 0.0 0.0

Other 0.0 0.0 0.0 0.0

Additional Paid-In Capital 0.0 0.0 0.0

Retained Earnings 0.0 0.0 (15.8) (15.8)

Total Shareholders' Equity $82.5 $97.9 $325.7

Liabilities & Shareholders' Equity $422.4 $440.9 $948.3

Net Working Capital $48.2 $53.3 $53.3

Change in Net Working Capital

Check 0.000 0.000 106.415



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Operating Activities

Net Income

Income Statement Adjustments

Depreciation

Amortization of IntangiblesAmortization of Capitalized Financing Costs

Stock-Based Compensation

Non-Controlling (Minority) Interest Years PIK

Accrual of Subordinated Note 5

Accural of Mezzanine 0

Accural of Seller Notes 2

Accrual of Preferred Stock - A 3

Accrual of Preferred Stock - B 3

Balance Sheet Adjustments

(Increase) / Decrease in Working Capital

Increase / (Decrease) in Non-Current Net DTL

Increase / (Decrease) in Other LT LiabilitiesCash Flow from Operating Activities

Investing Activities

Capital Expenditures

Proceeds from the Sale of Assets

Dividends from Equity Investments

Cash Flow from Investing Activities

Cash Flow Available for Debt Repayment

Financing Activities

RevolverDebt Assumed

Term Loan - A

Term Loan - B

Senior Note

Subordinated Note

Mezzanine

Seller Note

Preferred Stock - A

Preferred Stock - B

Cash Flow from Financing Activities

Change in Cash


Libor Curve


12/64

Interest Rate Assumptions LIBOR +

Assumed Debt

Revolver 4.25%

Term Loan - A 4.79%

Term Loan - B 6.00%

Senior Note 6.50%

Subordinated NoteMezzanine

Seller Note

Preferred Stock - A

Preferred Stock - B

Revolver Undrawn Commitment Fee 0.50%

Debt Amortization Schedule Beginning Scheduled

Balance Amort. Prepay? Bullet Year Years PIK

Assumed Debt 230.0 0.00% 2013 0

Term Loan - A 150.0 0.2 1 2013 0

Term Loan - B 0.0 5.00% 1 2014 0

Senior Note 75.0 0.00% 2016 0

Subordinated Note 0.0 0.00% 2014 5

Mezzanine 0.0 0.00% 2009 0

Seller Note 0.0 0.00% 1 2011 2

Sources of Funds

Beginning Cash Balance

Less: Minimum Cash Balance

Excess Cash / (Cash Deficit)

Plus: Cash Flow Available for Debt Repayment

Subtotal

Incremental Revolver Borrowing

Total Sources of Funds

Uses of Funds

Mandatory Debt Repayment

Assumed Debt

Term Loan - A

Term Loan - B

Senior Note

Subordinated Note

Mezzanine

Seller Note

Mandatory Repayment Subtotal

Optional Debt Repayment Repay?

Revolver 1

Assumed Debt

Term Loan - A

Term Loan - B

Senior Note

Subordinated Note


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Mezzanine

Seller Note

Optional Repayment Subtotal

Excess Cash Added to Balance Sheet

Total Uses of Funds

Check

Bo


Existing Fixed Assets Beginning Remain. Salvage

Classification Amount Life Value

PP&E $175.4 14.0 $0.0Class 2 0.0 0.0 0.0Class 3 0.0 0.0 0.0

Class 4 0.0 0.0 0.0

Subtotal

Capital Expenditures Useful Salvage

Year CapEx Life Value

2008 $16.0 20.0 $0.0

2009 14.1 20.0 0.0

2010 14.2 20.0 0.0

2011 14.3 20.0 0.0

2012 14.5 20.0 0.0

2013 14.6 20.0 0.0

2014 14.8 20.0 0.02015 14.9 20.0 0.0

2016 15.0 20.0 0.0

2017 15.2 20.0 0.0

Subtotal

Manual or Computed Depreciation Total Computed Depreciation Expense

0=Manual, 1=Computed Analyst-Projected (Manual) Depreciation Expense

0 Manual

Book Depreciation Expense


Income Tax Rate

Book Deal Structure

Book Taxable Income 0=Stock Purchase, 1=Asset Purchase

+ Adjustments 0 Stock Purchase


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= Adjusted Book Taxable Income

Income Tax Expense Intangibles Amortization

Book Tax

Tax Period (yrs) 5.0 15.0

Book Taxable Income Expense $28.1 $0.0

+ Book Amortization of Intangibles

+ Book Amortization of Goodwill Goodwill Amortization

+ Book Depreciation Book Tax+ Book (Gain) / Loss on Sale of Assets Period (yrs) NA 15.0

+ Non-Deductible Expenses Expense $0.0 $0.0

- Tax Amortization of Intangibles

- Tax Amortization of Goodwill Fixed Asset Depreciation

- Tax Depreciation Book Tax

- Tax (Gain) / Loss on Sale of Assets Period (yrs) 8.0 6.0

= Pre-NOL Taxable Income Expense $1.9 $0.0

- Pre-Deal NOLs Used

- Post-Deal NOLs Used Federal Equity Sec. 382 N

= Post-NOL Taxable Income Rate Value Limit Expiration

Cash Taxes Payable 4.46% $563.0 $25.1 5

Pre-Deal NOL Detail

Beginning NOL Balance $0.0

- Pre-Deal NOLs Used / Acquisition Accounting Adj. 0.0

Ending NOL Balance $0.0

Post-Deal NOL Detail

Beginning NOL Balance

- Post-Deal NOLs Used

+ NOL Carrryforward from Current Period

Ending NOL Balance

Deferred Taxes

Increase / Decrease in Net Deferred Tax Liability


Estimated Sale Proceeds

Book Basis in Assets Sold

Tax Basis in Assets Sold

Book Gain / (Loss) on Sale

Tax Gain / (Loss) on Sale

Allocation to Balance Sheet

PP&E, gross

Equity Investments

Operating Rights, net

Other Long-Term Assets


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Historical

Revenue Growth

Management CaseAnalyst Case

Downside Case

Analyst Case 0.1

COGS (% of Sales)

Management Case

Analyst Case

Downside Case

Analyst Case 0.5

SG&A (% of Sales)Management Case

Analyst Case

Downside Case

Analyst Case 0.2

Other (% of Sales)

Management Case

Analyst Case

Downside Case

Analyst Case 0.0

Capi


Financing Scenarios

Case 1 2 3 4 5

Description No deal Refi A Refi B LBO A LBO B

Sources of Funds

Excess Cash $0.0 $0.0 $0.0 $116.6 $116.6

Debt Assumed 0.0 230.0 230.0 230.0 230.0

Minority Interest Assumed 0.0 0.0 0.0 0.0 0.0Revolver 0.0 0.0 0.0 0.0 0.0

Term Loan - A 0.0 Err:522 Err:522 150.0 0.0

Term Loan - B 0.0 0.0 0.0 0.0 75.0

Senior Note 0.0 50.0 100.0 75.0 100.0

Subordinated Note 0.0 0.0 0.0 0.0 0.0

Mezzanine 0.0 0.0 0.0 0.0 0.0

Seller Note 0.0 0.0 0.0 0.0 0.0

Preferred Stock - A 0.0 0.0 0.0 10.0 75.0

Preferred Stock - B 0.0 0.0 0.0 0.0 0.0


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Common - Sponsor 0.0 0.0 0.0 233.6 217.5

Management Rollover 0.0 0.0 0.0 0.0 0.0

Investor Rollover 0.0 0.0 0.0 0.0 0.0

Other 0.0 0.0 0.0 0.0 0.0

# Total Sources $0.0 Err:522 Err:522 $815.2 $814.1

Uses of Funds

Existing Shareholders ) $0.0 $0.0 $0.0 $563.0 $563.0Investor Rollover ) 0.0 0.0 0.0 0.0 0.0

Fund Cash Balance ) 0.0 10.0 15.0 0.0 0.0

Assume Debt ) 0.0 230.0 230.0 230.0 230.0

Refinance Debt ) 0.0 0.0 0.0 0.0 0.0

Tender / Call Premium ) 0.0 0.0 0.0 0.0 0.0

Assume Minority Int. ) 0.0 0.0 0.0 0.0 0.0

Purchase Minority Int. ) 0.0 0.0 0.0 0.0 0.0

Expensed Transaction Costs ) 0.0 8.5 8.5 15.8 15.8

Capitalized Financing Costs 0.0 Err:522 Err:522 6.4 5.3

Other ) 0.0 0.0 0.0 0.0 0.0

Total Uses $0.0 Err:522 Err:522 $815.2 $814.1

LBO? 1 1

Check 0.000 Err:522 Err:522 0.000 0.000

Transactio


Fees (%) Computation Metric

M&A / Sponsor Fees

Bank Fee 0.65% of Transaction Value (x-Fees & Expenses): )

Sponsor Fee 0.65% of Transaction Value (x-Fees & Expenses): )

Financing Fees

Revolver 1.75% of Total Facility Size (Commitment): )Term Loan - A 2.00% of Total Principal Amount: )

Term Loan - B 1.75% of Total Principal Amount: )

Senior Note 2.25% of Total Principal Amount: )

Subordinated Note 3.00% of Total Principal Amount: )

Mezzanine 0.00% of Total Principal Amount: )

Seller Note 0.00% of Total Principal Amount: )

Preferred Stock - A 0.00% of Total Principal Amount: )

Preferred Stock - B 0.00% of Total Principal Amount: )

Other Miscellaneous Fees

Legal

Accounting

PrintingOther

Target's Expenses

Amortization of Capitalized Financing Costs

Amort. Annual

Period Expense


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Revolver 5.0 $0.4

Term Loan - A 5.0 0.6

Term Loan - B 2,014.0 0.0

Senior Note 2,016.0 0.0

Subordinated Note 2,014.0 0.0

Mezzanine 2,009.0 0.0

Seller Note 2,011.0 0.0

Total Annual Amortization

Disc


2 Mos.

Ending Year 2 Year 3 Year 4 Year 5

9/30/2008 2009 2010 2011 2012 CAGR

Revenue $76.4 $468.0 $470.5 $475.2 $480.0 (0.0)

% Growth 0.1 0.0 0.0 0.0 0.0

EBITDA 21.7 156.5 155.9 157.2 158.4 (0.0)

% Margin 0.3 0.3 0.3 0.3 0.3Less: Depreciation (2.4) (16.0) (16.0) (16.1) (16.3)

EBITA $19.3 $140.5 $139.9 $141.0 $142.2 (0.0)

Tax Rate 0.4 Err:522 Err:522 Err:522 Err:522

Unlevered Net Income $12.5 Err:522 Err:522 Err:522 Err:522 Err:522

Plus: Depreciation 2.4 16.0 16.0 16.1 16.3

Less: Capital Expenditures (2.7) (14.1) (14.2) (14.3) (14.5)

Less: Change in Working Capit (0.6) (2.5) 0.0 (0.5) (0.5)

Less: Change in Deferred Tax Err:522 Err:522 Err:522 Err:522 Err:522

Unlevered Free Cash Flow Err:522 Err:522 Err:522 Err:522 Err:522 Err:522

DCF Analysis: EBITDA Multiple Method

Total Enterprise Value

Terminal EBITDA Multiple Terminal EBITDA Multiple

4.0 4.5 5.0 4.0 4.5 5.0

Discount 0.1 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522

Rate 0.1 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522

(WACC) 0.1 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522

Implied Perpetuity Growth Rate

Terminal EBITDA Multiple Terminal EBITDA Multiple

4.0 4.5 5.0 4.0 4.5 5.0

Discount 0.1 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522Rate 0.1 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522


DCF Analysis: Perpetuity Growth Method

Total Enterprise Value

Terminal Perpetuity Growth Rate Terminal Perpetuity Growth Rate

0.50% 1.00% 1.50% 0.0 0.0 0.0

Total Equity Value (1)

Total Price Per Share (2)

Total Equity Value (1)


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Discount 0.1 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522

Rate 0.1 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522


Implied Terminal EBITDA Multiple

Terminal Perpetuity Growth Rate Terminal Perpetuity Growth Rate

0.0 0.0 0.0 0.0 0.0 0.0

Discount 0.1 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522Rate 0.1 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522



Shares & Options

Pre-Deal Adj. Post-Deal Adj.

Basic Shares / Retained Equity 34.922 (34.922) 0.000 0.000

Options 1.456 (1.456) 0.000 0.000

Sponsor Equity 0.000 14.591 14.591 0.000

Management Rollover 0.000 0.000 0.000 0.000

Investor Rollover 0.000 0.000 0.000 0.000

Other New Equity 0.000 0.000 0.000 0.000

Preferred Stock - A 0.000 0.625 0.625

Preferred Stock - B 0.000 0.000 0.000

Subordinated Debt Equity 0.000 0.000 0.000 0.000

Management Performance Equity 0.000 0.000 0.000 0.000

Total 36.378 15.215

Closing

7/31/2008

Equity Value Calculation

EBITDA Multiple Method

Forward EBITDA Multiple

Exit Year EBITDA Valuation Multiple Net

Exit Year Enterprise Value 0=EBITDA; 1=GAAP P/E Income

Less: Net Debt 0 EBITDA GAAP

Plus: Proceeds from Options Rollover

Total Equity Value at Exit Exit EBITDA GAAP P/E

Year Multiple Multiple

GAAP P/E Multiple Method 2012 5.0 14.0

Forward P/E Multiple

Exit Year GAAP Net Income

Plus: Proceeds from Options Rollover

Total Equity Value at Exit

Equity Value Used in Calculating Equity Returns

Assumptions Used in Equity Returns Calculations

Subordinated Note

Call Premium (%)

Call Premium ($)

Total Price Per Share (2)


19/64

Cash Flows to Contributors of Capital

Subordinated Note

Initial Investment $0.0

Cash Interest Payments

Take-Out Premium

Paydown of Principal

PrincipalEquity Participation at Exit

Total Cash Flows $0.0

XIRR

Preferred Stock - A

Initial Investment ($10.0

Cash Dividends


Principal

Equity Participation at Exit

Total Cash Flows ($10.0

XIRRPreferred Stock - B


Cash Dividends


Principal



XIRR

Management Equity


Cash DividendsPrincipal



XIRR

Investor Rollover Equity


Cash Dividends

Principal



XIRR

Sponsor Equity

Initial Investment ($233.6

Cash Dividends

Principal


Total Cash Flows ($233.6

XIRR


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Valuation Summary Pro Forma Owner

Roll Over Options: 0=Liquidate, 1=Roll Over 0 Sponsor

ManagementCurrent Target Stock Price $12.81 Investor Rollover

Offer Premium 25.00% Other New Equity

Offer Price Per Target Share $16.01 Preferred Stock - A

Preferred Stock - B

Fully Diluted Shares Outstanding (mm) 35.159 Total

Equity Purchase Price $563.0

Target Pro Forma Net Debt 83.4 Sponsor IRR

Pro Forma Enterprise Value $646.4

EBITDA

Pro Forma Enterprise Value Multiples Multiple 2010

Metric Multiple 4.5 0.3

LTM Sales $420.4 1.54 5.0 0.4

FY 2008 PF Sales 458.1 1.41 5.5 0.5

FY 2009 PF Sales 468.0 1.38

Purchase Price Allocatio

LTM EBITDA $120.6 5.4

FY 2008 PF EBITDA 130.2 5.0 % of Excess PP Allocated to Intangibles

FY 2009 PF EBITDA 156.5 4.1 Intangibles Amortization Period (yrs)

Fixed Asset Write-Up

Operating Performance Drivers Fixed Asset Depreciation Period (yrs)

Operating Case: Analyst Case 2 Recap Accounting?

COGS Savings $10.0 Equity Purchase Price

SG&A Savings 20.0 Transaction Fees

Total Savings $30.0 Book Value of Net Assets

Excess Purchase Price to Allocate

Calendarization / Timing Net Asset Step-Ups:

Fixed Asset Write-Up

Last Fiscal Year End 9/30/2007 Indentifiable Intangibles Write-Up

LTM End Date 3/31/2008 Write Off Target's Existing Goodwill

Current Date 5/17/2008 Write Down Target's Existing DTA

Expected Closing Date 7/31/2008 Write Off Target's Existing DTL

Months from Last FYE to LTM End 6 DTL from Asset Write-Ups

Months from Closing to Next FYE 2 Goodwill CreatedStub Allocation 0.2

Model Detail

Other Switches / Assumptions

Target Code Name

Sponsor Management Fee $0.0 Model Created / Modified by:

Percent of Equity Retained 0.00%

Equity to Subordinated Debt at Exit 0.00%

Additional Equity to Management at Exit 0.00% Last Modified:


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File Name: 'file:///opt/scribd/conversion

Circular Reference Breaker / Model Check

To break a circ. reference, toggle average interest off then back on:

Average Interest: 0=No, 1=Yes 1

re, Credit Statistics, & Ratio Analysis

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

2008 2009 2010 2011 2012 2013 2014 2015

$130.2 $156.5 $155.9 $157.2 $158.4 $159.7 $161.0 $162.3

2.7 14.1 14.2 14.3 14.5 14.6 14.8 14.9

0.6 2.5 (0.0) 0.5 0.5 0.5 0.6 0.6

Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522

141.2 56.1 0.0 0.0 0.0 0.0 0.0 0.0

75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0

Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0


0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0






0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0











22/64














9.52 9.89 10.35 10.88 11.47 12.10 12.79 13.56

NM ) NM ) NM ) NM ) NM ) NM ) NM ) NM )

3.57 3.39 3.36 3.37 3.37 3.37 3.37 3.37

12.07 11.27 11.33 11.33 11.33 11.33 11.33 11.33

NM ) NM ) NM ) NM ) NM ) NM ) NM ) NM )

102.4 107.8 108.7 108.4 108.4 108.4 108.4 108.4

30.2 32.4 32.2 32.2 32.2 32.2 32.2 32.2

Income Statement

Projected Fiscal Years Ending September 30;


2008 2009 2010 2011 2012 2013 2014 2015

$458.1 $468.0 $470.5 $475.2 $480.0 $484.8 $489.6 $494.5

0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0

239.6 239.8 242.2 244.7 247.3 249.8 252.4 255.1

0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5

88.3 71.7 72.4 73.3 74.3 75.2 76.2 77.1

0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.20.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

$130.2 $156.5 $155.9 $157.2 $158.4 $159.7 $161.0 $162.3

0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3

14.1 14.1 14.1 14.2 14.4 14.5 14.7 14.8

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.3 1.9 1.9 1.9 1.9 1.9 1.9 1.9

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0


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$115.8 $140.5 $139.9 $141.0 $142.2 $143.3 $144.5 $145.6

0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3

19.6 17.9 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

4.7 28.1 28.1 28.1 28.1 23.5 0.0 0.0

0.0 0.1 0.1 0.1 0.1 0.0 0.0 0.0

10.8 10.6 10.7 10.8 10.9 11.0 11.1 11.20.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

$80.7 $83.9 $101.1 $102.1 $103.1 $108.8 $133.3 $134.4

0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.3



1.8 8.7 2.6 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

1.2 7.9 8.1 8.4 8.5 8.6 8.7 8.7

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0



0.2 1.0 1.0 1.0 1.0 0.8 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

7.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0




0.4 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522





0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0


36.080 36.580 36.580 36.580 36.580 36.580 36.580 36.580

15.215 15.215 15.215 15.215 15.215 15.215 15.215 15.215

51.295 51.795 51.795 51.795 51.795 51.795 51.795 51.795


$1.59 $1.46 $1.44 $1.46 $1.48 NA ) NA ) NA )


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Err:522 Err:522 Err:522 Err:522 Err:522 NA ) NA ) NA )


$35.3 $57.6 $39.8 $39.9 $40.0 $35.3 $11.1 $11.2

(12.3) Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522

$22.9 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522



$2.14 $2.00 $1.99 $2.01 $2.03 NA ) NA ) NA )



king Capital Assumptions



2008 2009 2010 2011 2012 2013 2014 2015$458.1 $468.0 $470.5 $475.2 $480.0 $484.8 $489.6 $494.5

239.6 239.8 242.2 244.7 247.3 249.8 252.4 255.1

$136.8 $139.7 $140.5 $141.9 $143.3 $144.7 $146.2 $147.6

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

12.1 12.4 12.5 12.6 12.7 12.8 13.0 13.1

9.8 9.8 9.9 10.0 10.2 10.3 10.4 10.5

$21.3 $21.3 $21.5 $21.7 $21.9 $22.2 $22.4 $22.6

24.3 24.3 24.5 24.8 25.1 25.3 25.6 25.830.3 31.0 31.2 31.5 31.8 32.1 32.4 32.8

28.9 29.0 29.2 29.5 29.9 30.2 30.5 30.8

Balance Sheet



2008 2009 2010 2011 2012 2013 2014 2015


136.8 139.7 140.5 141.9 143.3 144.7 146.2 147.60.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

12.1 12.4 12.5 12.6 12.7 12.8 13.0 13.1

9.8 9.8 9.9 10.0 10.2 10.3 10.4 10.5


$193.1 $207.2 $221.4 $235.7 $250.1 $264.7 $279.5 $294.4

(144.8) (160.8) (176.8) (192.9) (209.2) (225.6) (242.1) (258.8)

$48.2 $46.4 $44.6 $42.8 $41.0 $39.2 $37.4 $35.6


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0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

6.3 5.3 4.4 3.4 2.5 1.7 1.7 1.7

440.9 440.9 440.9 440.9 440.9 440.9 440.9 440.9

149.7 103.7 75.5 47.4 19.2 (4.2) (4.2) (4.2)

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

14.3 14.3 14.3 14.3 14.3 14.3 14.3 14.3


$0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

21.3 21.3 21.5 21.7 21.9 22.2 22.4 22.6

24.3 24.3 24.5 24.8 25.1 25.3 25.6 25.8

30.3 31.0 31.2 31.5 31.8 32.1 32.4 32.8

28.9 29.0 29.2 29.5 29.9 30.2 30.5 30.8

$104.8 $105.5 $106.4 $107.5 $108.6 $109.7 $110.9 $112.0


0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

17.9 17.9 17.9 17.9 17.9 17.9 17.9 17.9



141.2 56.1 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0


$97.9 $97.9 $97.9 $97.9 $97.9 $97.9 $97.9 $97.9

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0



233.6 233.6 233.6 233.6 233.6 233.6 233.6 233.6

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

1.8 12.4 23.1 33.9 44.8 55.8 67.0 78.2




$53.9 $56.4 $56.4 $57.0 $57.5 $58.1 $58.6 $59.2

0.6 2.5 (0.0) 0.5 0.5 0.5 0.6 0.6


Cash Flow Statement

2 Mos. Projected Fiscal Years Ending September 30;


26/64

Ending Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

9/30/2008 2009 2010 2011 2012 2013 2014 2015


2.4 16.0 16.0 16.1 16.3 16.4 16.5 16.7

4.0 46.0 28.1 28.1 28.1 23.5 0.0 0.00.2 1.0 1.0 1.0 1.0 0.8 0.0 0.0

1.8 10.6 10.7 10.8 10.9 11.0 11.1 11.2

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Err:522 Err:522 Err:522 Err:522 0.0 0.0 0.0 0.0

Err:522 Err:522 Err:522 Err:522 0.0 0.0 0.0 0.0

($0.6 ($2.5 $0.0 ($0.5 ($0.5 ($0.5 ($0.6 ($0.6


0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522

($2.7 ($14.1 ($14.2 ($14.3 ($14.5 ($14.6 ($14.8 ($14.9

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

($2.7 ($14.1 ($14.2 ($14.3 ($14.5 ($14.6 ($14.8 ($14.9



(8.8) (85.1) (56.1) 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0



Debt Schedule



9/30/2008 2009 2010 2011 2012 2013 2014 2015

0.03 4.03% 4.36% 4.65% 4.81% 4.95% 5.05% 5.08%


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0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.07 0.08 0.09 0.09 0.09 0.09 0.09 0.09

0.08 0.09 0.09 0.09 0.10 0.10 0.10 0.10

0.09 0.10 0.10 0.11 0.11 0.11 0.11 0.11

0.09 0.11 0.11 0.11 0.11 0.11 0.12 0.12

10.25% 0.10 0.10 0.10 0.10 0.10 0.10 0.1010.50% 0.11 0.11 0.11 0.11 0.11 0.11 0.11

10.50% 0.11 0.11 0.11 0.11 0.11 0.11 0.11

14.00% 0.14 0.14 0.14 0.14 0.14 0.14 0.14

14.25% 0.14 0.14 0.14 0.14 0.14 0.14 0.14


0.0 0.0 0.0 0.0 0.0 1.0 0.0 0.0

3.33% 0.2 0.2 0.2 0.2 0.2 0.0 0.0

0.83% 0.1 0.1 0.1 0.1 0.1 0.7 0.0

0.00% 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.00% 0.0 0.0 0.0 0.0 0.0 1.0 0.0

0.00% 1.0 0.0 0.0 0.0 0.0 0.0 0.0

0.00% 0.0 0.0 1.0 0.0 0.0 0.0 0.0


(30.0) (30.0) (30.0) (30.0) (30.0) (30.0) (30.0) (30.0)







5.0 30.0 30.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0









28/64







k Depreciation Schedule



9/30/2008 2009 2010 2011 2012 2013 2014 2015

Depreciation of Existing Fixed Assets

$2.1 $12.5 $12.5 $12.5 $12.5 $12.5 $12.5 $12.5

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

$2.1 $12.5 $12.5 $12.5 $12.5 $12.5 $12.5 $12.5

Depreciation of Capital Expenditures

$0.1 $0.8 $0.8 $0.8 $0.8 $0.8 $0.8 $0.8

0.7 0.7 0.7 0.7 0.7 0.7 0.7

0.7 0.7 0.7 0.7 0.7 0.7

0.7 0.7 0.7 0.7 0.7

0.7 0.7 0.7 0.7

0.7 0.7 0.7

0.7 0.70.7

$0.1 $1.5 $2.2 $2.9 $3.7 $4.4 $5.1 $5.9

$2.2 $14.0 $14.7 $15.5 $16.2 $16.9 $17.6 $18.4

2.4 14.1 14.1 14.2 14.4 14.5 14.7 14.8

$2.4 $14.1 $14.1 $14.2 $14.4 $14.5 $14.7 $14.8

Tax Schedule



9/30/2008 2009 2010 2011 2012 2013 2014 2015

35.00% 0.4 0.4 0.4 0.4 0.4 0.4 0.4


0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0


29/64




4.7 28.1 28.1 28.1 28.1 23.5 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.3 1.9 1.9 1.9 1.9 1.9 1.9 1.90.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0


Err:522 Err:522 Err:522 Err:522 Err:522 0.0 0.0 0.0

OL Err:522 Err:522 Err:522 Err:522 Err:522 Err:522




Err:522 Err:522 Err:522 Err:522 Err:522 0.0 0.0 0.0



0.0 0.0 Err:522 Err:522 Err:522 Err:522 Err:522 Err:522




Projected Asset Sales



9/30/2008 2009 2010 2011 2012 2013 2014 2015

$0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

$0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0


30/64

perating Assumptions



2008 2009 2010 2011 2012 2013 2014 2015

14.00% 4.50% 3.60% 2.40% 2.40% 2.40% 2.40% 2.40%0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0

11.00% 2.00% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%

0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0

52.00% 51.50% 51.50% 51.00% 51.00% 51.00% 51.00% 51.00%

0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5

52.50% 53.90% 54.20% 54.50% 54.50% 54.50% 54.50% 54.50%

0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5

19.00% 19.00% 18.90% 18.80% 18.70% 18.70% 18.70% 18.70%

0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2

19.60% 20.00% 20.20% 20.40% 20.50% 20.50% 20.50% 20.50%

0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

tal Structure Assumptions

Active

Case

6 4

LBO C LBO A Mult. of Percent

EBITDA of Total

$116.6 $116.6 0.97 0.1

230.0 230.0 1.91 0.3

0.0 0.0 0.00 0.00%0.0 0.0 0.00 0.00%

50.0 150.0 1.24 18.40%

0.0 0.0 0.00 0.00%

100.0 75.0 0.62 9.20%

50.0 0.0 0.00 0.00%

0.0 0.0 0.00 0.00%

0.0 0.0 0.00 0.00%

0.0 10.0 0.08 1.23%

0.0 0.0 0.00 0.00%


31/64

248.7 233.6 1.94 28.66%

20.0 0.0 0.00 0.00%

0.0 0.0 0.00 0.00%

0.0 0.0 0.00 0.00%

$815.3 $815.2

$563.0 $563.0 4.67 0.70.0 0.0 0.00 0.0

0.0 0.0 0.00 0.00%

230.0 230.0 1.91 28.21%

0.0 0.0 0.00 0.00%

0.0 0.0 0.00 0.00%

0.0 0.0 0.00 0.00%

0.0 0.0 0.00 0.00%

15.8 15.8 0.13 1.94%

6.5 6.4 0.05 0.79%

0.0 0.0 0.00 0.00%

$815.3 $815.2

1 1

0.000 0.000

Fees & Expenses Assumptions

Fees ($) Notes / Assumptions

$563.0 $3.7 Expensed as incurred (in current period) in accordance with FAS 141r

563.0 3.7 Expensed as incurred (in current period) in accordance with FAS 141r

$100.0 $1.8 Capitalized / amortized over life of financing150.0 3.0 Capitalized / amortized over life of financing

0.0 0.0 Capitalized / amortized over life of financing





10.0 0.0 Reduction in Gross Proceeds. Reduction in APIC.


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$0.1 $0.4 $0.4 $0.4 $0.4 $0.3 $0.0 $0.0

0.1 0.6 0.6 0.6 0.6 0.5 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

$0.2 $1.0 $1.0 $1.0 $1.0 $0.8 $0.0 $0.0

unted Cash Flow Analysis

Weighted-Average Cost of Capital (WACC) #NA

Number of

WACC Input Manual Option

0=Manual, 1=Computed WACC Tranche 1 #

0 Manual 12.0% Tranche 2 0.059

Tranche 3 0.221Unlever Beta Tranche 4 0.300

Tranche 5 0.269

Pre-Transaction Levered Beta 0.86 Tranche 6 0.211

Current Stock Price $12.81 Tranche 7 0.187

Tranche 8 0.000

Basic Shares Outstanding 34.922 Tranche 9 0.000

Treasury Method Shares 0.038 Tranche 10 0.000

In-the-Money Convertible Shares 0.000

Fully Diluted Shares Outstanding (mm) 34.960 #NA

Pre-Transaction Market Value of Common Equity $447.8 Face Value

Pre-Transaction Market Value of Debt 230.0 Conversion PricePre-Transaction Market Value of Preferred Stock 0.0 Convertible Shares

Unlevered Beta 0.64

CAPM Calculation

Risk-Free Rate (10 Yr T-Note) 0.05

Market Risk Premium 4.00%

Relevered Beta 1.49

CAPM Cost of Equity 0.10

WACC Computation

Amount Rate Wtd. Rate

Debt Assumed $230.0 0.03 0.01

Revolver 0.0 0.07 0.00%

Term Loan - A 150.0 7.57% 1.06%

Term Loan - B 0.0 8.78% 0.00%

Senior Note 75.0 9.28% 0.65%


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Subordinated Note 0.0 10.25% 0.00%

Mezzanine 0.0 10.50% 0.00%

Seller Note 0.0 10.50% 0.00%

Preferred Stock - A 10.0 0.14 0.00

Preferred Stock - B 0.0 0.14 0.00

Common Equity $233.6 0.10 0.03

WACC 0.06

IRR Analysis

Percent

Exit Ownership

0.000 0.0

0.000 0.00%

14.591 95.90%

0.000 0.00%

0.000 0.00%

0.000 0.00%

0.625 4.10%

0.000 0.00%

0.000 0.00%

0.000 0.00%

15.215 100.0%



2008 2009 2010 2011 2012 2013 2014 2015

5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0

# # # # # # # #

$0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0


0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

# # # # # # #

14.0 14.0 14.0 14.0 14.0 14.0 14.0 14.0


0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0


$0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

$0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0


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$0.0 $0.0 $0.0 $0.0 $0.0 ) ) )

0.0 0.0 0.0 0.0 0.0 ) ) )

0.0 0.0 0.0 0.0 0.0 ) ) )

0.0 0.0 0.0 0.0 0.0 ) ) )0.0 0.0 0.0 0.0 0.0 ) ) )

$0.0 $0.0 $0.0 $0.0 $0.0

) ) ) ) ) ) ) )

Err:522 Err:522 Err:522 Err:522 Err:522 ) ) )

0.0 0.0 0.0 0.0 0.0 ) ) )

0.0 0.0 0.0 0.0 Err:522 ) ) )

0.0 0.0 0.0 0.0 0.0 ) ) )

Err:522 Err:522 Err:522 Err:522 Err:522

) ) ) ) ) ) ) )

Err:522 Err:522 Err:522 Err:522 Err:522 ) ) )

0.0 0.0 0.0 0.0 0.0 ) ) )

0.0 0.0 0.0 0.0 Err:522 ) ) )

0.0 0.0 0.0 0.0 0.0 ) ) )

Err:522 Err:522 Err:522 Err:522 Err:522

) ) ) ) ) ) ) )

$0.0 $0.0 $0.0 $0.0 $0.0 ) ) )0.0 0.0 0.0 0.0 0.0 ) ) )

0.0 0.0 0.0 0.0 0.0 ) ) )

$0.0 $0.0 $0.0 $0.0 $0.0

) ) ) ) ) ) ) )

$0.0 $0.0 $0.0 $0.0 $0.0 ) ) )

0.0 0.0 0.0 0.0 0.0 ) ) )

0.0 0.0 0.0 0.0 0.0 ) ) )

$0.0 $0.0 $0.0 $0.0 $0.0

) ) ) ) ) ) ) )

$0.0 $0.0 $0.0 $0.0 $0.0 ) ) )

0.0 0.0 0.0 0.0 0.0 ) ) )

0.0 0.0 0.0 0.0 0.0 ) ) )

$0.0 $0.0 $0.0 $0.0 $0.0

) ) ) ) ) ) ) )


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Err:522

hip

1.0

0.00%0.00% Options

0.00% Number of Average Treasury

4.10% Options (m) Strike Shares

0.00% Tranche 1 0.209 $9.04 0.091

100.0% Tranche 2 0.059 10.03 0.022

Tranche 3 0.221 11.53 0.062

Tranche 4 0.300 12.69 0.062

Tranche 5 0.269 19.54 0.000

Exit Year Tranche 6 0.211 27.06 0.000

2012 2014 Tranche 7 0.187 45.75 0.000

0.3 0.2 Tranche 8 0.000 0.00 0.0000.3 0.2 Tranche 9 0.000 0.00 0.000

0.3 0.3 Tranche 10 0.000 0.00 0.000

/ Goodwill Convertible Debt

Convert 1 Convert 2

25.00% Face Value $230.0 $0.0

5.0 Conversion Price $26.77 NA )

$15.0 Convertible Shares 8.592 0.000

8.0 Interest Rate 2.50% 0.00%

1 Fully Diluted Shares Outstanding

Basic Shares Outstanding 34.922$563.0 Treasury Method Shares 0.237

0.0 In-the-Money Convertible Shares 0.000

0.0 Fully Diluted Shares Outstanding 35.159

$563.0

Net Debt

$15.0 Non-Convertible Debt $0.0

140.7 Convertible Debt 230.0

(61.1) Minority Interest 0.0

0.0 Cash & Cash Equivalents (146.6)

0.0 Net Debt $83.4

(54.5) ($40.1

$522.8LBO Model Checks

Sources and Uses Balance Err:522

Debt Schedule Balances Err:522

TargetCo Balance Sheet Balances Err:522

Ryan MacGregor Balance Sheet Items > 0 Err:522

[email protected] Revolver Limit Exceeded Err:522

Error Message Err:522

4/14/2011 10:18 AM

www.macacbacus.com
http://www.macacbacus.com/http://www.macacbacus.com/


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/tmp/scratch6080/55824

Err:522

Year 9 Year 10

2016 2017

$163.6 $165.0

15.0 15.2

0.6 0.6

Err:522 Err:522Err:522 Err:522

0.0 0.0

0.0 0.0

Err:522 Err:522

0.0 0.0

Err:522 Err:522

0.0 0.0

0.0 0.0

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

0.0 0.0

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522


Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522


37/64

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

14.34 14.78

NM ) NM )

3.37 3.37

11.33 11.33

NM ) NM )

108.4 108.4

32.2 32.2

LTM Inputs

Err:522 6 Mos. 6 Mos.

Ended Ended

Year 9 Year 10 Mar 31 Mar 31

2016 2017 2007 2008

$499.4 $504.4 $197.4 $215.3

0.0 0.0 NA 0.1

257.7 260.4 100.8 112.4

0.5 0.5 0.5 0.5

78.1 79.1 35.5 41.2

0.2 0.2 0.2 0.20.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0

$163.6 $165.0 $61.1 $61.7

0.3 0.3 0.3 0.3

15.0 15.1 5.7 6.7

0.0 0.0 0.0 0.0

1.6 0.0 0.0 0.0

0.0 0.0 0.0 0.0


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$147.1 $149.9 $55.4 $55.0

0.3 0.3 0.3 0.3

0.0 0.0 9.2 9.7

0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0

11.4 11.5 5.5 5.70.0 0.0 0.0 0.0

$135.8 $138.4 $40.7 $39.6

0.3 0.3 0.2 0.2

Err:522 Err:522

Err:522 Err:522

0.0 0.0

0.0 0.0

4.4 0.0

0.0 0.0

0.0 0.00.0 0.0

Err:522 Err:522

Err:522 Err:522

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

0.0 0.0

0.0 0.0

Err:522 Err:522

36.580 36.580

15.215 15.215

51.795 51.795

Err:522 Err:522

NA ) NA )


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NA ) NA )

NA ) NA )

$11.4 $11.5

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

NA ) NA )

NA ) NA )

NA ) NA )

Err:522

Year 9 Year 10

2016 2017$499.4 $504.4

257.7 260.4

$149.1 $150.6

0.0 0.0

13.2 13.4

10.6 10.7

$22.9 $23.1

26.1 26.433.1 33.4

31.1 31.4

Err:522

Year 9 Year 10

2016 2017

Err:522 Err:522

149.1 150.60.0 0.0

13.2 13.4

10.6 10.7

Err:522 Err:522

$309.4 $324.6

(275.3) (290.5)

$34.1 $34.2


40/64

0.0 0.0

1.7 1.7

440.9 440.9

(4.2) (4.2)

0.0 0.0

14.3 14.3

Err:522 Err:522

$0.0 $0.0

22.9 23.1

26.1 26.4

33.1 33.4

31.1 31.4

$113.2 $114.3

Err:522 Err:522

0.0 0.0

17.9 17.9

Err:522 Err:522

Err:522 Err:522

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

Err:522 Err:522

$97.9 $97.9

0.0 0.0

Err:522 Err:522

Err:522 Err:522

233.6 233.6

0.0 0.0

0.0 0.0

0.0 0.0

89.6 101.1

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

$59.8 $60.3

0.6 0.6

Err:522 Err:522

Err:522


41/64

Year 9 Year 10

2016 2017

Err:522 Err:522

16.5 15.1

0.0 0.00.0 0.0

11.4 11.5

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

($0.6 ($0.6

Err:522 Err:522

0.0 0.0Err:522 Err:522

($15.0 ($15.2

0.0 0.0

0.0 0.0

($15.0 ($15.2

Err:522 Err:522


0.0 0.0

0.0 0.0

(75.0) 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

Err:522 Err:522

Err:522 Err:522

Err:522

Year 9 Year 10

2016 2017

5.15% 5.13%


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0.0 0.0

0.09 0.09

0.10 0.10

0.11 0.11

0.12 0.12

0.10 0.100.11 0.11

0.11 0.11

0.14 0.14

0.14 0.14

Err:522 Err:522

0.0 0.0

0.0 0.0

0.0 0.0

1.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

Err:522 Err:522

(30.0) (30.0)

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

0.0 0.0

0.0 0.0

75.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522


43/64

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522

Year 9 Year 10

2016 2017

$12.5 $12.5

0.0 0.0

0.0 0.0

0.0 0.0

$12.5 $12.5

$0.8 $0.8

0.7 0.7

0.7 0.7

0.7 0.7

0.7 0.7

0.7 0.7

0.7 0.70.7 0.7

0.8 0.8

0.8

$6.6 $7.4

$19.1 $19.9

15.0 15.1

$15.0 $15.1

Err:522

Year 9 Year 10

2016 2017

0.4 0.4

Err:522 Err:522

0.0 0.0


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Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

0.0 0.0

0.0 0.0

1.6 0.00.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

Err:522 Err:522

0.0 0.0

Err:522 Err:522 Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

0.0 0.0

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522 Err:522

Err:522

Year 9 Year 10

2016 2017

$0.0 $0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

$0.0 $0.0

0.0 0.0

0.0 0.0

0.0 0.0


45/64

Err:522

Year 9 Year 10

2016 2017

2.40% 2.40%0.0 0.0

0.50% 0.50%

0.0 0.0

51.00% 51.00%

0.5 0.5

54.50% 54.50%

0.5 0.5

18.70% 18.70%

0.2 0.2

20.50% 20.50%

0.2 0.2

0.00% 0.00%

0.00% 0.00%

0.00% 0.00%

0.0 0.0

Err:522


46/64

Err:522

is fee somewhere

is fee somewhere

Year 9 Year 10

2016 2017


47/64

$0.0 $0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

$0.0 $0.0

Err:522

E?

Average Treasury

s (m) Strike Shares

# #

10.03 0.013

11.53 0.02212.69 0.003

19.54 0.000

27.06 0.000

45.75 0.000

0.00 0.000

0.00 0.000

0.00 0.000

E?

Convert 1 Convert 2

$230.0 $0.0

$26.77 NA )8.592 0.000


48/64

Err:522

Year 9 Year 10

2016 2017

5.0 5.0

# #

$0.0 $0.0

Err:522 Err:522

0.0 0.0

# # #

14.0 14.0

Err:522 Err:522

0.0 0.0

Err:522 Err:522

$0.0 $0.0

0.00% 0.00%

$0.0 $0.0 depending

Instruction


49/64

be sure to h

) )

) ) Exit

) ) EBITDA

) ) Multiple) )

) )

) )

) ) Exit

) ) EBITDA

) ) Multiple

) )

) )

) ) Exit

) ) EBITDA

) ) Multiple

) )

) )) ) Exit

) ) EBITDA

Multiple

) )

) )

) ) Exit

) ) EBITDA

Multiple

) )

) )

) ) Exit

) ) EBITDA

Multiple

) )


50/64


51/64


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IRR Sensitivities

n which method is used to calculate equity value. Upon changing any input to the returns calculations,

s: Only one set of returns tables (e.g. EBITDA method or P/E method) will be correct at a time,


64/64

it F9 to recalculate these tables.

Subordinated Note Subordinated Note

Exit Year Exit Year

) 2010 2012 2014 ) 2010 2012 2014

4.5 Exit 12.0

5.0 GAAP P/E 14.0

5.5 Multiple 16.0

Preferred Stock - A Preferred Stock - A

Exit Year Exit Year

) 2010 2012 2014 ) 2010 2012 2014

4.5 70.22% 42.09% 32.90% Exit 12.0 77.95% 44.58% 34.14%

5.0 77.95% 44.58% 34.14% GAAP P/E 14.0 77.95% 44.58% 34.14%

5.5 85.31% 46.95% 35.33% Multiple 16.0 77.95% 44.58% 34.14%

Preferred Stock - B Preferred Stock - B

Exit Year Exit Year

) 2010 2012 2014 ) 2010 2012 2014

4.5 Exit 12.0

5.0 GAAP P/E 14.0

5.5 Multiple 16.0

Management Equity Management Equity

Exit Year Exit Year

) 2010 2012 2014 ) 2010 2012 20144.5 Exit 12.0

5.0 GAAP P/E 14.0

5.5 Multiple 16.0

Investor Rollover Equity Investor Rollover Equity

Exit Year Exit Year

) 2010 2012 2014 ) 2010 2012 2014

4.5 Exit 12.0

5.0 GAAP P/E 14.0

5.5 Multiple 16.0

Sponsor Equity Sponsor Equity

Exit Year Exit Year

lbo-long-form

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