Trends in Technology: What’s Hot and What’s Not

M&A International Inc. Global Technology Briefing

LONDON · JUNE 9, 2011

M&A International Inc. – the world's leading M&A alliance

1. Introduction

2. Trends and Drivers in the Technology Sector

3. What’s Hot? Integration Software

4. What’s Hot? Internet/Digital Media

5. What’s Hot? Marketing Automation Software

6. What’s Hot? Social Networking

7. What’s Hot? IT Services

8. What’s Hot? Storage

9. Summary and Outlook

Presentation Outline

1

Introduction

M&A International Inc. – the world's leading M&A alliance

Speaker Bios

Bradford A. Adams, CFA– Managing Director, TM Capital - Boston

– Head of M&A International’s Technology Group

– Member of MAI International’s Executive Committee

– 19 years of investment banking experience

– Prior investment banking experience at Advest, Salomon SmithBarney and KPMG

Milledge Hart– Managing Director, Pagemill Partners

– Co-leads Pagemill’s Software, Services, and Digital Media practice

– CEO of multiple companies, most recently Tukaroo which was soldto Ask (now IAC) in 2004

– Prior investment banking experience at Dillon Read & Company(now UBS)

3

Trends and Drivers in the Technology Sector

M&A International Inc. – the world's leading M&A alliance

Technology and Healthcare Dominate Mid-Market M&A

2009 2010

Technology26%

Healthcare16%

Professional Services10%

RE & Property6%

Oil & Gas5%

Finance5%

Utility & Energy4%

Telecom3%

Mining3%

All Others22%

Technology27%

Healthcare17%

Professional Services8%

Oil & Gas6%

Finance5%

Telecom5%

RE & Property5%

Utility & Energy3%

Mining3%

All Others21%

Transactions with disclosed values between $25 million and $1 billionSource: Wall St. Research

5

M&A International Inc. – the world's leading M&A alliance

Ranking of IT priorities that CIOs selected as one of their Top 5 priorities in 2010

Evolving CIO IT Priorities – Moving to the Cloud….

* Not in Top 10 of rankingsSource: Gartner

Ranking 2010 2009 2008 2007

Virtualization 1 3 3 5

Cloud computing 2 16 * *

Web 2.0 3 15 15 *

Networking, voice and data communications 4 6 7 4

Business intelligence 5 1 1 1

Mobile technologies 6 12 12 11

Data and document management and storage 7 10 9 9

Security technologies 8 8 5 6

Service-oriented applications and architecture 9 9 10 7

IT management 10 * * *

Enterprise applications 11 2 2 2

6

M&A International Inc. – the world's leading M&A alliance

IT Spending Changes, by Industry, 2010 to 2011 (Average) 2011 Expected IT Spending as % of Total Operating Expenses

Looking Forward- Which Industries Show Promise?

Source: Gartner, January 2010

7

M&A International Inc. – the world's leading M&A alliance

Some New Faces in the IT Sector M&A Scene…

Strategic AcquirerNo. of Deals Top Targets

17

14

7

6

6

6

6

5

5

5

Source: Capital IQ and company press releases

8

M&A International Inc. – the world's leading M&A alliance

Select Private Equity Interest in the IT Sector

Source: Capital IQ and company press releases

Strategic Acquirer No. of Deals Top Targets

5

4

3

3

3

3

2

2

2

2

9

What’s Hot? Integration Software

M&A International Inc. – the world's leading M&A alliance

Converging Worlds in Integration Software

BPM

ApplicationServers

BI & CPM ECM

Integration

Servers

DataIntegration

EAI

Structured Data Unstructured Data

ETL &Warehousing

Data

Quality

Rules

BAM

Modelers

PredictiveAnalytics

ESBs

DataVisualization Text

MiningDRM

WCM

DAM

Workflow

Collaboration

GRC

11

M&A International Inc. – the world's leading M&A alliance

Gartner’s Magic Quadrant: Business Intelligence Platforms MAI Commentary

• Evolving market as classic BI tools adoption becomes mainstream

• The traditional BI market is relatively mature and is dominated by a few large players

• Predictive analytics and data visualization have become extremely popular

• Shift in business user interest from just measurement to analysis, forecasting and optimization

• BI is expected to remain one of the fastest growing segments of the enterprise software market

• A number of sizeable players have yet to make an acquisition – and the “acquirable” pure play BI opportunities have become fewer and fewer

• Tremendous scarcity value for quality BI solution providers

The Business Intelligence Platform Market

Source: Gartner

12

M&A International Inc. – the world's leading M&A alliance

TEV / LTM Revenue Multiples over Time

TEV / LTM EBITDA Multiples Over Time

1.3x 1.6x

2.2x 2.4x 2.3x 2.3x

3.1x 3.3x 3.8x 3.8x

—

1.0x

2.0x

3.0x

4.0x

5.0xM

ar-0

9

Jun-

09

Sep-

09

Dec

-09

Mar

-10

Jun-

10

Sep-

10

Dec

-10

Mar

-11

7.1x 9.2x

10.4x 10.3x 11.2x 11.2x 12.6x 12.7x

14.3x 15.1x

—

4.0x

8.0x

12.0x

16.0x

20.0x

Mar

-09

Jun-

09

Sep-

09

Dec

-09

Mar

-10

Jun-

10

Sep-

10

Dec

-10

Mar

-11

TEV /

LTM

Rev

enue

TEV /

LTM

EBIT

DA

Public Valuations in Integration Software

13

M&A International Inc. – the world's leading M&A alliance

Company Acquiror(s) Transaction Metrics Commentary

Date: 5/9/11TEV / Rev: NATEV / EBITDA: NA

• Oco, provides SaaS based BI and analytics solutions• Deloitte Consulting is one of the leading global SIs• Services firm acquires a SaaS tool to add managed analytics

capabilities

Date: 2/2/11TEV / Rev: NATEV / EBITDA: NA

• Metastorm is one of the last remaining pure-play BPM vendors• Open Text is a leading ECM solution provider• Illustrates convergence between ECM and BPM• Completes the full consolidation of the BPM sector

Date: 5/24/10TEV / Rev: NATEV / EBITDA: NA

• IBM acquired Sterling Commerce from AT&T for $1.4 billion• Sterling Commerce provides integration solutions and supply

chain applications that optimize customers’ business collaboration networks

• Complements other IBM acquisitions such as Cognos, SPSS, CoreMetrics and Unica

Date: 6/8/10TEV / Rev: 3.0xTEV / EBITDA: 20.8x

• Exalead provides enterprise and Web search software• Dassault Systemes provides Product Lifecycle Mgmt. solutions• Combo yields a new class of search-based applications for

collaborative communities

Notable M&A Transactions

14

What’s Hot? Internet/Digital Media

M&A International Inc. – the world's leading M&A alliance16

Even as major stock market indexes have reached their highest levels in three years, recent Internet and Digital Media IPOs have come to market at significantly higher than expected prices

─ Responsys, an interactive marketing suite company, priced at ~30% above the midpoint of its initial range and now has a market cap of approximately $803M, trading at slightly more than 9x LTM revenue

Key Internet/Digital Media Trends

Companies like Netflix and OpenTable are experiencing strong share price gains and are priced at the high end of sector comparables

─ Netflix is up approximately 140% over the last twelve months to $266 per share (5.8x revenue)

─ OpenTable, which priced at $20 when the Company went public in May 2009, has increased by 339% to nearly $80 a share (18x revenue)

Source: Capital IQ as of 5/25/2011

Offer IPO Amount Return SinceCompany Date Price Raised ($M) IPOYandex 5/23/2011 $25.0 $1,305.0 37.8%Phoenix New Media 5/18/2011 11.0 140.8 3.4%Responsys 5/10/2011 12.0 79.2 44.4%Qihoo 360 5/10/2011 14.5 175.5 78.2%Demand Media 1/25/2011 17.0 151.3 -15%Amadeus 4/27/2010 14.6 1,746.4 37%

Selected Internet/Digital Media IPOs

M&A International Inc. – the world's leading M&A alliance17

Active Internet/Digital Media Acquirers

CompanyNumber of

Acquisitions(Last 3 Years)

Cash Balance ($M) Recent Transactions

14 $6,881

12 $382

17 $6,765

16 NA

53 $36,675

15 $1,318

14 $2,789

Source: Capital IQ and The 451 Group as of 5/25/2011

M&A International Inc. – the world's leading M&A alliance18

Selected LTM Internet/Digital Media M&A Transactions

Acquirer Target Enterprise Value ($M)

LTM Revenue Multiple

Transaction Rationale

$2,190 1.6x

“The acquisition of GSI, which offers the mostcomprehensive integrated suite of online commerce and interactive marketing services available, will significantly strengthen our ability to connect buyers and sellers worldwide.”

$720 7.0x

“The combined company will be able to power the next generation of digital entertainment offeringswith content discovery, delivery, and enhancedinteractivity capabilities that support advertisingand drive consumer engagement.”

$563 NA

“By acquiring Playdom, Disney will strengthen itsalready-robust digital gaming portfolio, acquire a first-rate management team and provide consumers new ways to interact with the company on popularsocial networks like Facebook and MySpace.”

$410 NA

“Our acquisition of drugstore.com todaysignificantly accelerates our online strategy to leverage the best community store network inAmerica by becoming the most convenient choice for health and daily living needs whether customers shop online or in our stores.”

$315 NA“The acquisition of The Huffington Post will create a next-generation American media company with global reach that combines content, community, and social experiences for consumers ...”

Source: Capital IQ and The 451 Group as of 5/25/2011

M&A International Inc. – the world's leading M&A alliance19

Internet & Digital Media – Capital Markets Update

LTM Performance

Historical Trading Multiples

NASDAQ Internet Index (QNET)

44.04%

NASDAQ Composite Index

25.75%

S&P 500 Index23.65%

80.00

90.00

100.00

110.00

120.00

130.00

140.00

150.00

160.00 S&P 500 Index (^SPX) - Index Value

NASDAQ Composite Index (^COMP) - Index Value

Dow Jones - Internet Composite Index - Index Value

Source: Capital IQ as of 5/25/2011

What’s Hot? Marketing Automation Software

M&A International Inc. – the world's leading M&A alliance21

Sector Landscape

Loyalty & Event Management

Marketing Resource Management (MRM)

Marketing Performance Management

Campaign Management & Interactive Marketing

Multi-Discipline Marketing Pureplays

CRM, Analytical Data Warehousing & Analytics ERP Platforms, ECM & BPM

Lead Management

Community Marketing

Email MarketingMulti-Channel

Content CreationAgencies

Design Tools

Content Optimization

Web Marketing & Analytics

Mobile Marketing

BI & Predictive Analytics

M&A International Inc. – the world's leading M&A alliance

Industry growth accelerated coming out of the recession, but customer adoption continues to outpace user adoption

Mainstream SaaS adoption in the pure-play arena, while platform vendors have been less successful with this model

“Verticalized” strategies have gained momentum

DAM, MRM, content creation, content optimization and social media CRM are gaining mindshare in the B2C segment

Lead management, event management and MPM are capturing the lion’s share of the B2B marketing wallets

Role-based application delivery is driving R&D strategies

MSPs, agencies & SIs count for 60-70% of implementation costs

Tactical investments with rapid deployment cycles and measurable ROI remain in vogue

22

Industry Observations

M&A International Inc. – the world's leading M&A alliance23

Consolidation Trends

Source: TM Capital and Capital IQ

Most Active Acquirors since 2006 in Marketing

AutomationAcquirer No. of

AcquisitionsYahoo! 10Acxiom 6Alterian 5Google 5Oracle 5Salesforce.com 5DoubleClick 4Omniture 4Responsys 4Unica 4Adobe 3IBM 3Microsoft 3Open Text 3Autonomy 2SAS 2EMC 1Teradata 1

Platform vendors are driving the evolution towards holistic marketing suites that encompass MRM, MCCM, Event Management, Loyalty Management, Community Management, etc.

Encroachment from larger industry bellwethers will take years to materialize, but is likely to start delaying sales cycles for the pure-plays

Next step in the consolidation cycle will be to converge creative brand management with traditional analytics

Eventual goal is a platform that consists of a marketing database, a single DAM repository, one set of workflow tools, one set of analytical dashboards, a common UI and one code base built on J2EE or .NET

M&A International Inc. – the world's leading M&A alliance

TEV / Revenue Multiples over Time

Comparable Company Analysis

24

2.7x 3.1x

1.4x 1.6x

4.9x

—

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

Dec

-08

Mar

-09

Jun-

09

Sep

-09

Dec

-09

Mar

-10

Jun-

10

Sep

-10

Dec

-10

Mar

-11

TEV

/ LT

M R

even

ue

Marketing Sof tware BI, Analytics and ECM MSPs Agencies SaaS

M&A International Inc. – the world's leading M&A alliance

Company Acquiror(s) Transaction Metrics Commentary

Date: 12/21/10TEV / Rev: 7.1xTEV / EBITDA: NA

• Aprimo provides cloud-based integrated marketing software• Teradata provides enterprise DW solutions• Combines leading DW player with leading marketing analytics

solution – critical given increasing volume of marketing data

Date: 11/2/10TEV / Rev: 4.5xTEV / EBITDA: 32.1x

• Art Technology Group develops and markets e-commerce software solutions

• Enables Oracle to integrate CRM, retail and e-commerce• Unified marketing, merchandising, services, order

management and supply chain – personalized customer experience

Date: 9/1/10TEV / Rev: NATEV / EBITDA: NA

• Intrepid is a social media analytics and market research consultancy

• Alterian provides marketing analysis software• Exemplifies the consultancy sale element of MAS

Date: 8/12/10TEV / Rev: 4.1xTEV / EBITDA: 44.3x

• Unica provides on-demand enterprise marketing management solutions

• Leverages IBM’s previous acquisitions – SPSS, CoreMetricsand Netezza

• Dominant solution – marketing management and analytics

Notable M&A Transactions

25

What’s Hot? Social Networking

M&A International Inc. – the world's leading M&A alliance27

Social Media offers brands a powerful medium to engage & measure online activity

─ Social networks are a completely new media from a marketing perspective – the amount and extent of detailed user information enable very effective new forms of marketing

─ Social Media is an enabler for more engaging, relevant, real-time and better targeted marketing

─ Social Media provides powerful platforms for brands to advertise, measure trends, and manage brand equity

As Social Media continues to attract audiences worldwide, companies have shifted their online advertising strategy towards Social Media

─ Average usage time on social media in 2009 was 5:35 hours per month, almost 3 times the 2007 figure. Facebook (FB) users show even higher usage

─ Facebook has become the #1 online destination with 540 million unique users and 570 billion page views (April 2010)

─ Twitter is currently the fastest growing online service with over 80m users (+300% year on year)

Key Social Networking Trends

Demand for solutions that enhance Social Media advertising and measure brand engagement is expected to increase significantly over the next few years as Social Media market further develops

─ Social Media advertising reached $2.2B in 2009 and is expected to grow by 12x to $25.7B by 2014

Social Media Advertising Forecast

$ bi

llion

sSource: Capital IQ and 451 Group as of 5/25/2011

M&A International Inc. – the world's leading M&A alliance28

Several Social Networking companies have recently gone public with strong results

─ Shares of LinkedIn, which rose as much as 171% in their first day of trading and closed at $94.25, more than 109% above the $45 IPO price

─ Renren Inc, one of the biggest social networking companies in China, surged 28.6% in its sizable IPO

Key Social Networking Trends (cont.)

These IPOs have set the stage for other private social networking companies to go public, who have already received high valuations from private investors and on the secondary markets (e.g., Sharespost)

─ Facebook raised $500M in a transaction that valued the company at $50B

─ Latest auction of Twitter shares on Sharespost valued the company at $7.7B

─ Groupon has hired underwriters and could file to go public as early as the second half of 2011 – some investors believe that its initial public offering could reach $15B to $20B

─ Zynga is raising a new round of funding that values the company at between $7B and $9B

Offer IPO Amount Return SinceCompany Date Price Raised ($M) IPOThe Active Network 5/24/2011 $15.0 $165.0 8.5%LinkedIn 5/18/2011 45.0 351.0 91.9%FriendFinder 5/10/2011 10.0 50.0 -44.2%Jiayuan.com 5/10/2011 11.0 78.1 27.3%Renren 5/3/2011 14.0 743.4 -9.4%Youku.com 12/8/2010 12.8 202.9 233%Mail.ru Group 11/8/2010 27.7 911.3 25%

Selected Social Networking IPOs

Source: Capital IQ and 451 Group as of 5/25/2011

M&A International Inc. – the world's leading M&A alliance

Key Social Networking Trends (cont.)

Company Select Investors Amount Raised ($M)

Last Raise Amount ($M)

Last Raise Date

Insight Venture Partners $17.5 $17.5 6/20/2010

Google, Pinnacle, Canaan Partners, Intel Capital, Betfair, SK Telecom $124.5 $85.0 5/26/2011

Austin Ventures $22.0 $22.0 3/3/2010

Bessemer, GSR Ventures, Lightspeed, NEA, New World Ventures, Disney (parent company) $76 Acquired July 2010 Acquired July

2010

MeriTech Capital Partners $22.5 $22.5 10/7/2009

Partners, Bezos Expeditions, Columbia Capital, Felicis Ventures, Greylock Partners, Novak Biddle Venture Partners, The Founders Fund, TomorrowVentures

$17.0 Acquired April 2011 Acquired April 2011

Andreessen Horowitz, Avalon, Foundry, Globespan, Google, IVP, KPCB, Mail.ru Group, SOFTBANK, Tiger Global Management, Union Square Ventures

416.0 $153.7 6/14/2010

Within Social Media, social gaming has also attracted high valuations and a significant amount of investment

─ According to comScore, social network users make up more than two-thirds of total Internet users and the current penetration of games on social networks remains less than 10%

─ The global social gaming market has the potential to grow from $1B in 2009 to $3B+ in 2012, representing a CAGR of 45%

29

What’s Hot? IT Services

M&A International Inc. – the world's leading M&A alliance

The IT Services Barbell Market MAI Commentary

Polarized marketplace

Regional players trying to scale and differentiate offerings

Global SI’s continue to look into the left hand side of the barbell for “tip of the spear” type acquisitions

Tremendous scarcity value in mid-tier sector of the market

Market Forces Continue to Polarize the Industry

Small Regional Consultancies Mid-Tier System Integrators Global System Integrators

• Domain or vertical experts• Geographically focused• Challenged by global delivery• Revenues sub - $100 million

• Evolving to a global SI model• “Scarcity Value”• Revenues: $100 - $500 million

• Multiple practices – Industry, Functional and Application

• M&A is core to growth strategy• Revenues $500 million +

COMPLEXITY

PR

OJE

CT

VALU

E

31

M&A International Inc. – the world's leading M&A alliance

Trends and Drivers in the IT Services Sector

2010 - recovery year for most players in the IT services sector– Average revenue performance increased approximately 6% over 2009– 2009 performance was down 10-15% versus 2008 levels

The 2009 dilemma - adjust headcount to the lower revenue levels orsacrifice profitability by maintaining a bench

In 2011, industry fundamentals have strengthened, and we are seeing a noticeable up-tick in demand

The 2011 challenge – where can we find the resources?

Offshore services continue to gather momentum due to the efficiency of their economic model and ability to price engagements aggressively

Noticeable increase in interest in managed services, outsourcing and IT services businesses by PE investors – Infrastructure outsourcing is hot!

Tier 1 vendors will continue to look at M&A to bolster growth and defend business models – Business Intelligence Services is hot!

32

M&A International Inc. – the world's leading M&A alliance

Onshore TEV / EBITDA Multiples Over Time

Offshore TEV / EBITDA Multiples Over Time

TEV

/ LTM

EBI

TDA

TEV

/ LTM

EBI

TDA

Public Valuations

Source: Capital IQ

8.3x 7.8x 7.2x

8.9x

—

2.0x

4.0x

6.0x

8.0x

10.0x

Mar

-09

Jun-

09

Sep-

09

Dec

-09

Mar

-10

Jun-

10

Sep-

10

Dec

-10

Mar

-11

NA ITS Euro ITS Gov't ITS Specialty/Strategy

14.8x

8.0x

21.4x

10.7x 9.4x

—

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

35.0x

Mar

-09

Jun-

09

Sep-

09

Dec

-09

Mar

-10

Jun -

10

Sep-

10

Dec

-10

Mar

-11

>$1B Indian Of fshore <$1B Indian Of fshore China Of fshore BPO OPD

33

M&A International Inc. – the world's leading M&A alliance

Company Acquiror(s) Transaction Metrics Commentary

Date: 4/6/11TEV / Rev: 2.1xTEV / EBITDA: NA

• Headstrong provides consulting and technology services for financial services, public sector, and service industries

• Genpact is a provider of business process consulting services• Scarcity value, offshore and FS vertical focus drove valuation

Date: 12/14/10TEV / Rev: NATEV / EBITDA: NA

• Atos Origin acquired the Siemens IT Solutions and Services division from Siemens AG for approximately 860 million euros

• Siemens IT Solutions and Services offers BI, CRM, ESM, ERP, and other application software solutions

• Aggressive landscape-changing acquisition in Europe

Date: 11/2/10TEV / Rev: 0.5xTEV / EBITDA: 17.5x

• TechTeam Global provides IT outsourcing and BPO services• Stefanini IT Solutions provides infrastructure and applications

outsourcing, as well as BPO services• Aggressive US play by a Latin American services provider

Date: 10/29/10TEV / Rev: NATEV / EBITDA: NA

• Keane provides IT consulting and outsourcing services• NTT Data provides IT services and solutions in Japan and

internationally• Aggressive US/India acquisition by a Japanese market leader• Not a huge win for Keane investors despite relatively low price

paid when taken public in 2007

Notable M&A Transactions

34

What’s Hot? Storage

M&A International Inc. – the world's leading M&A alliance36

Key Storage Market Trends

The broader storage market is in transition as several factors combine to drive significant change in the coming years

─ Proliferation of video is increasing capacity requirements exponentially

─ Paradigm shifts in infrastructure technology (i.e. Cloud computing, Virtualization, etc.) require corresponding changes in enterprise storage

─ Government regulation and litigation preparedness create opportunities in archiving and eDiscovery

Efficiency is paramount as increases in storage costs outstrip IT budgets

Consolidation will continue as diversified vendors seek to:

─ Accelerate time to market

─ Foster near-term growth

─ Supplement core solutions with specific functionality

M&A International Inc. – the world's leading M&A alliance37

Active Storage Acquirers

CompanyNumber of

Acquisitions(Last 3 Years)

Cash Balance ($M) Notable Storage Transactions

4 $1,070

12 $14,479

10 $5,594

14 $12,738

27 $13,279

3 $5,175

11 $2,958

Source: Capital IQ and The 451 Group as of 5/25/2011

(Information Governance Software)(Digital Archiving Business)

(Engenio Storage Systems)

M&A International Inc. – the world's leading M&A alliance38

Selected LTM Storage M&A Transactions

Acquirer Target Enterprise Value ($M)

LTM Revenue Multiple

Transaction Rationale

$390 7.0x“…further increases Symantec's ability to get the right information, to the right people, at the right time, while reducing overall legal review costs and limiting Risk…”

$899 6.1x“The Compellent storage platform enables Dell to provide customers additional mid- and high-end network storage solutions that simplify and reducethe cost of data management”

$2,401 13.7x“…The unmistakable waves of cloud computing and ‘Big Data’ are upon us…EMC & Isilon…help customers get the absolute most out of what cloud computing has to offer."

$1,593 7.1x“Netezza strongly complements IBM’s business analytics capabilities and client base. Together, we have the opportunity to quickly leverage the technology and accelerate the offering.”

$2,216 10.9x

“The addition of 3PAR’s next-generation storage architecture will accelerate HP’s winning Converged Infrastructure strategy, which provides customers with an unmatched portfolio of intellectual property across storage, server and networking Solutions.”

$60 12.0x“Akorri further strengthens NetApp's data management capabilities to achieve greater quality of service and performance in their virtual and cloud environments...”

Source: Capital IQ and The 451 Group as of 5/25/2011

M&A International Inc. – the world's leading M&A alliance39

Storage – Capital Markets Update

LTM Performance

Historical Trading Multiples

1.2x 1.2x 1.0x 0.7x 0.6x 0.9x 0.9x 1.2x 1.3x 1.0x 1.1x 1.1x 0.9x

5.9x

6.7x

5.6x

3.7x 3.7x

5.8x

8.0x8.6x 8.8x

8.0x 8.2x 8.3x7.4x

Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011

Avg TEV/Total Revenue Avg TEV/EBITDA

S&P Composite 1500 Computer Storage & Peripherals:

+40.51%

NASDAQ Composite Index:

+25.75%

S&P 500 Index: +24.13%

-10.00

0.00

10.00

20.00

30.00

40.00

50.00 NASDAQ Composite Index

S&P Composite 1500 Computer Storage & Peripherals

S&P 500 Index

Summary and Outlook

M&A International Inc. – the world's leading M&A alliance41

Observations from the Trenches

Increasing M&A activity – formal processes, mini-processes/market checks and one-on-one conversations

─ Some concern about potential distraction of a full process

─ Sellers are interested in listening to viable ideas from qualified acquirers

After a slow start to the year, deal flow has increased substantially for both ibanks and PE buyers

─ Most ibanks are extremely busy and pipelines are as strong as they’ve been for some time

─ PE firms are starting to see a dramatic increase in acquisition opportunities –becoming a crowded marketplace once again

Strength in the financing market is enabling attractive dividend recaps for many companies as alternatives to sale transactions

─ Opportunity to take capital off the table today and maintain a “second bite of the apple” with an ownership stake going forward

M&A International Inc. – the world's leading M&A alliance42

Observations from the Trenches (cont.)

Large strategic acquirers remain aggressive on the acquisition front but are also interested in streamlining operations and divesting non-core assets

─ Potentially complex transactions, but interesting opportunities for both strategic and financial acquirers

Technology M&A has become a global market – especially in the middle market

─ International acquirers are extremely active and are beginning to play major roles in the sell side processes of most U.S. targets

The IPO process – really an M&A process in disguise?

─ Ibanks are pitching flexibility throughout the IPO process – potential for a sale or recap in the event an IPO isn’t the best option

M&A International Inc. – the world's leading M&A alliance43

Outlook for 2011

Extremely bullish about the remainder of the year

─ Seeing strong buyer interest with existing deals in the market

─ Many ongoing conversations with prospects, formally and informally, about evaluating strategic alternatives sometime this year

─ Time to harvest returns for many private equity firms

Improving financial performance by corporations

─ Positive earning reports

─ Anecdotal evidence of improving sales and hiring at most clients and prospects –finding talent is tough again

Uncertainty in the capital markets – debt and equity

─ Favorable conditions now – can it continue?

─ Potential for overheating – high yield and leveraged loans

─ International concerns – Japan? Sovereign debt?

M&A International Inc. – the world's leading M&A alliance44

Outlook for 2011 (cont.)

Continued tension between buyers and sellers – “nothing is easy”

─ Buyers – extensive due diligence, past, present and future – substance over presentation?

─ Sellers – valuation (multiples and base), structure and terms – will there be a retrade?

Transactions will continue to be complex and will require creativity to get done

─ Need to bridge valuation gaps and navigate legal, accounting and tax obstacles

─ Requires experienced advisors – financial, legal, accounting, etc.

M&A will continue to be a global business at all transaction levels –large cap and middle market

─ Need advisors with a global reach and international expertise

M&A International Inc. – the world's leading M&A alliance

Global Technology Briefing· June 9, 2011

Thank You!