1H 2013 Private Equity ExitsPresentation Slide Deck

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Source:PitchBook

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Source:PitchBook

2012 marked the third consecutive year of improved PE exit activity and was the best year ever for U.S. exit volume. Much of this can be attributed to the unprecedented exit activity that took place in 4Q.

Source:PitchBook

There has Been Persistent Improvement in Exit Activity Since 2009

U.S. PE Annual Exit Flow

2004 2005 2006 2007 2008 2009 2010 2011 2012$0

$20

$40

$60

$80

$100

$120

$140

$160

0

100

200

300

400

500

600

700

$65 $75 $139 $142 $71 $40 $108 $116 $134

364

442494

578

374

219

486524

626

Capital Exited ($B) # of Exits

Source:PitchBook

Impending Tax Increases Led to the Most Active Quarter Ever for Exits in 4Q 2012

U.S. PE Quarterly Exit Flow

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q2007 2008 2009 2010 2011 2012

$0

$10

$20

$30

$40

$50

$60

0

50

100

150

200

250

$30 $34 $28 $49 $20 $11 $36 $5 $13 $4 $6 $17 $17 $25 $25 $42 $22 $34 $26 $34 $27 $30 $20 $57

153145 141139

117

82

118

5747 54

42

7693

104108

181

97

135138154152

143

129

202

Capital Exited ($B) # of Exits

Source:PitchBook

Ratio of Deals to Exits Dropped Below 2x in 2012, Curtailing the Increase in Inventory of PE-Backed

CompaniesU.S. Deals (excluding add-ons) vs. Exits

2005 2006 2007 2008 2009 2010 2011 20120

500

1000

1500

2000

2500

0

1

2

3

4

5

3.24 3.58 3.50 4.12 4.47 2.75 2.55 1.89

Ratio of Deals to Exits # of Deals (excluding add-ons) # of Exits

New Deals

Exits

Source:PitchBook

Exit Valuation Multiples Have Held Steady Recently

Median Valuation/EBITDA

2003 2004 2005 2006 2007 2008 2009 2010 2011 20127x

7.2x

7.4x

7.6x

7.8x

8x

8.2x

8.4x

8.6x

8.8x

9x

7.3x

8x7.8x

7.4x

8.9x 8.8x

7.9x

8x8.1x

8x

Source:PitchBook

A Growing Need for Liquidity Has Led More Investors to Pursue SBOs as an Exit Strategy

Exits by Type

2004 2005 2006 2007 2008 2009 2010 2011 2012 -

100

200

300

400

500

600

700

Corporate Acquisition IPO Secondary Buyout

38

298

290

Source:PitchBook

The Proportion of Exits Accounted for by SBOs has Almost Doubled from 2009 to 2012

Percent of Exits (#) by Type

2006 2007 2008 2009 2010 2011 20120

0.1

0.2

0.3

0.4

0.5

0.6

0.7

55%

63%

56%

48%

13%

3%

11%6% 6%

38%34%

26%

40% 46%

Corporate Acquisition IPO Secondary Buyout

Source:PitchBook

The Median Time to Exit Has Crept Above 5 Years, Intensifying the Urgency for Liquidity

Median Time to Exit (years)

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

1

2

3

4

5

6

4.24 4.014.36

4.06 3.84 3.613.93 4.02

4.79 4.985.36

Year of Exit

# o

f Ye

ars

Hel

d

Source:PitchBook

The Median Holding Period Has Been Creeping Up

for All Exit TypesMedian Holding Period (years) by Exit Type

2006 2007 2008 2009 2010 2011 20122

3

4

5

6

Corporate Acquisition Secondary Buyout IPOYear of Exit

Source:PitchBook

Sellers Through SBOs are Still Able to Realize Sizable Exits DealsMedian Exit Size ($M) by Exit Type

2006 2007 2008 2009 2010 2011 2012$0

$50

$100

$150

$200

$250

$300

$158 $152$158

$75

$220$200

$132$107

$255$240

$168

$203

$162$180

Corporate Acquisitions Secondary Buyouts IPOs

Corporate Acquisition Exit Details

Source:PitchBook

Though Corporate Acquisitions have Increased Each Year Since 2009, They have Represented a Shrinking

Proportion of ExitsCorporate Acquisitions by Year

2006 2007 2008 2009 2010 2011 2012 $-

$10

$20

$30

$40

$50

$60

$70

$80

$90

0

50

100

150

200

250

300

350

$83 $65 $55 $28 $77 $78 $79

242

316

235

139

272285

298

Capital Exited ($B) # of Exits

Source:PitchBook

The Distribution of Corporate Acquisitions by Industry Did Not Change Dramatically from 2011

to 2012Corporate Acquisitions by Industry

28%

19%12%

5%

15%

17%4%

31%

21%11%

5%

14%

12%

5%B2B

B2C

Energy

Financial Services

Healthcare

IT

Materials & Resources

2011

2012

Source:PitchBook

The Median Deal Size has Grown Significantly Since Its Nadir in 2009

Median Corporate Acquisition Size ($M) by Year

2006 2007 2008 2009 2010 2011 2012$50

$100

$150

$200

$250

$158 $152 $158

$75

$200

$233$220

Secondary Buyouts Exit Details

Source:PitchBook

Private Equity Firms Have Increasingly Turned to Each Other For Deal and Exit Sourcing

Secondary Buyouts by Year

2006 2007 2008 2009 2010 2011 2012 $-

$10

$20

$30

$40

$50

$60

$70

0

50

100

150

200

250

300

350

$35 $63 $12 $5 $22 $22 $46

189215

127

56

173208

290

Capital Exited ($B) # of Exits

Source:PitchBook

Secondary Buyouts are Most Popular in the Bedrock

PE Industries: B2B and B2CSecondary Buyouts by Industry

41%

23%

5%2%

12%

10%7% 38%

22%

4%3%

10%

15%

8%B2B

B2C

Energy

Financial Services

Healthcare

IT

Materials & Resources

2011

2012

Source:PitchBook

Secondary Buyout Sizes Have Consistently Been Larger Than Corporate Acquisitions

Median Secondary Buyout Size ($M) by Year

2006 2007 2008 2009 2010 2011 2012$50

$100

$150

$200

$250

$300

$200

$250

$132

$107

$241$255

$240

IPOs Exit Details

Source:PitchBook

While Capital Raised Through IPOs was Down, 2012 Saw the Second Most PE-Backed IPOs

Since 2007PE-Backed IPOs by Year

2006 2007 2008 2009 2010 2011 2012 $-

$5

$10

$15

$20

$25

0

10

20

30

40

50

60

70

$22 $14 $4 $8 $9 $16 $9

63

47

12

24

41

3138

Capital Exited ($B) # of Exits

Source:PitchBook

Energy and B2C Continued to Make-up the Lion’s Share of IPOsPE-Backed IPOs by Industry

19%

29%23%

10%

13%6%

0%

16%

29%

24%

16%

8%

8%B2B

B2C

Energy

Financial Services

Healthcare

IT

Materials & Resources

2011

2012

Source:PitchBook

While Capital Raised Through IPOs Fell in 2012, the Median Public Offering Size Grew

Median PE-Backed IPO Size ($M) by Year

2006 2007 2008 2009 2010 2011 2012$140

$160

$180

$200

$220

$168

$195$203

$180

$162$170

$180

Exits by Size and Type

Source:PitchBook

The Core and Lower Middle Markets were the Sweet Spots for IPOs in 2012

Percentage of Exits (#) by Size and Type

Under $25M $25M-$100M $100M-$500M

$500M-$1B $1B-$2.5B $2.5B+0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Corporate Acquisitions IPOs Secondary Buyouts

Source:PitchBook

The Trend of Increasing Deal Sizes Continued in 2012

Percentage of Exits (#) by Size

2006 2007 2008 2009 2010 2011 20120%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

$2.5B+

$1B-$2.5B

$500M-$1B

$100M-$500M

$25M-$100M

Under $25M

Source:PitchBook

SBOs were the Preferred Exit Strategy for Three Industries: B2B, IT, and Materials & Resources

Percentage of Exits (#) by Type and Industry

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Corporate Acquisitions IPOs Secondary Buyouts

Source:PitchBook

B2B and B2C Have Been Responsible for Nearly All of the Exit Growth Over the Last Three Years

Exits (#) by Industry

2006 2007 2008 2009 2010 2011 2012 -

100

200

300

400

500

600

700

B2B

B2C

Energy

Financial Services

Healthcare

IT

Materials & Resources

Source:PitchBook

The South and the Great Lakes Greatly Improved their Share of Exits from 2011

Exits (#) by Region

21%

7%

16%15%

3%

17%

6%

15%

18%

5%

14%

19%3%

19%

6%

16% Mid-At-lantic

New Eng-land

Southeast

South

Midwest

Great Lakes

Mountain

West Coast

2011

2012

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