Iflr Webinar Ipos-2

8/3/2019 Iflr Webinar Ipos-2

1/59

IPO

s:

IstheWindowOp

en?

May18,2010

NY2-672999


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Thisis MoFo. | 2

Panelists

Nicholas Pettifer, Americas Editor, IFLR

Grant Miller, Managing Director - Equity Capital Markets, Cowenand Company, LLC

David Ryan, Assurance Partner, PricewaterhouseCoopers LLP

David Lynn, Partner, Morrison & Foerster LLP


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I. Financing Environment


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2

U.S. Macro Economic Drivers

S&P / Case-Shiller Home Price Index

I.FINANCING

ENVIRON

MENT

U.S. Economic Growth

U.S. Unemployment

S&P 500 Earnings PowerReal GDP was positive for the

third consecutive quarter in Q1

2010, growing at an annualized

pace of 3.2%, as consumer

spending rebounded to its

highest level in three years

After bottoming at 9.9x

forward earnings in late 2008,the S&P 500 now trades at

13.7x twelve-month forward

earnings

Home prices were flat in

February and are currently

perched above their April 2009

low point after falling 30%

from their July 2006 highs

Initial jobless claims are down

3% since the beginning of the

year and have fallen 32% since

peaking in March 2009

50

100

150

200

250

Jan-00 Feb-02 Feb-04 Feb-06 Feb-08 Feb-10

(3.0)

(2.0)

(1.0)

0.0

1.0

2.0

3.0%

(Index) (Monthly % Chng)

Source: Bloomberg and FactSet as of May 14, 2010.

(25.0)

(20.0)

(15.0)

(10.0)

(5.0)

0.0

5.0

10.0

15.0

20.0

$25.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0x

Actual Expected

(Reported EPS)

201020092007 2008

Q1 Q2 Q3

(Forward P/E)

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q 3 Q4 Q1 Q2 Q3 Q4(7.0)

(6.0)

(5.0)

(4.0)

(3.0)

(2.0)

(1.0)

0.0

1.0

2.0

3.0

4.0

5.0

6.0%

Actual Expected2008

(GDP QoQ % Change)

201020092007

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

0.5

1.5

2.5

3.5

4.5

5.5

6.5

7.5

8.5

9.5

10.5%

Jan-07 Jul-07 Feb-08 Aug-08 Mar-09 Oct-09 Apr-10

250

300

350

400

450

500550

600

650

7009.9%

(% Unemployment) (Initial Jobless Claims)

444


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3

Euro Zone Debt Crisis Threatening Economic Growth

I.FINANCING

ENVIRON

MENT

PIIGS Intra European Lending Web

IRELAND

GREECE

ITALY

PORTUGAL

SPAIN

EU Deficits as a % of GDP

Euro / US$ Exchange Rate

(12.8)%

(14.7)%

(12.3)%

(10.1)%

(8.0)%

(16.0)

(14.0)

(12.0)

(10.0)

(8.0)

(6.0)

(4.0)

(2.0)

0.0%

Ireland

GreatBritain

Greece

Spain

Portugal

(Deficit as a % of 2010 GDP)

EU Average: (7.5)%

Source: New York Times, SeekingAlpha.

1.20

1.25

1.30

1.35

1.40

1.45

1.50

$1.55

01/01/09 05/03/09 09/03/09 01/04/10 05/07/10

(Euro / USD Exchange Rate)

Current: $1.243


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4

Equity Market Internals

Broad Market Volatility Since 2009

I.FINANCING

ENVIRON

MENT

Bear Markets Recoveries(a)

Source: Bloomberg and FactSet as of May 14, 2010.

(a) Based on number of calendar days from bull market peak to bear market trough.

Indices Since 2009

Sector Performance Since 2009

The Dow Jones Industrial

Average has risen 19% since

the beginning of 2009 and

63% since its March 2009

lows, representing the most

powerful rebound since the

epic crash of 1929

Though the equity market hadrallied recently, the recent

spike in volatili ty and broad

market sell-off left one sectors

in the red (since the start of

2009)

The VIX recently touched its

lowest point since 2007 and

despite recent sharply-

increased volatility, overall

recessionary concerns have

ebbed and systemic risk in the

financial system has dissipated

0

10

20

30

40

50

60

70

80

90

100

0 250 500 750 1,000 1,250

Crash of 1929 1973 Oil Crisis

Tech Crash Global Financial Crisis

(Indexed)

Tech Crash

1973 Oil Crisis

Global Financial Crisis

Crash of '29

(89.2)%

(47.9)%

(53.9)%

(44.1)%

(37.8)%

10/9/07 - ???

1/11/73 - 10/3/74

1/14/00 - 10/9/02

9/3/29 - 7/8/32

Day

60

70

80

90

100

110

120

130

140

150

160

170

01/01/09 05/05/09 09/07/09 01/09/10 05/14/10

S&P 500 DJIA NASDAQ Russell 2000

(Indexed)

23.5%

18.5%

44.2%

28.7%

53.6%57.7%

38.8%

31.1%

22.3%

13.8%12.0%8.9%

(5.9)%

2.3%

(10.0)

0.0

10.0

20.0

30.0

40.0

50.0

60.0%

InfoTech.

Materials

Cons.

Disc.

Industrials

Financials

Cons.

Stp.

HealthCare

Energy

Utilities

Telecom

(% Change)

10

20

30

40

50

60

01/01/09 05/05/09 09/07/09 01/09/10 05/14/10

LTM Avg. = 23.6

5-Yr Avg. = 21.9

(VIX)


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5

March Lows in

Equity Markets

1,000

1,500

2,000

2,500

3,000

Jan-07 Apr-07 Jul-07 Nov-07 Feb-08 May-08 Sep-08 Dec-08 Mar-09 Jul-09 Oct-09 Jan-10 May-10

5

15

25

35

45

55

65

75

85

(NASDAQ ) (VXN)

I.FINANCING

ENVIRON

MENT

Lower Volatility Enhanced Equity Financing Conditions

Source: ECM Analytics, FactSet and PlacementTracker as of May 14, 2010.

Note: Excludes strategic transactions and deals with proceeds raised and market values below $5 million.

Equity Financings by Product Type

NASDAQ versus VXNAlthough the May 14th 32.9%

increase in volatili ty represents

the highest single-day spike

since September 2008, news of

the EUs financial support

package stabilized recessionary

concerns and will likely

revitalize the equity financing

market

The equity financing

environment has been

particularly active since May

2009, corresponding with a

narrowing of discounts as

financial markets have rall ied

81 84

69

107

98

55

62

58

24

55

66

86 89

64

36

58

78

58

81

108

79

61

9892

32

1921172118

25

3533

42

5861

4943

2723

70

0

15

30

45

60

75

90

105

120

Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10

Follow-Ons Registered Directs Equity PIPEs

(# of Deals)


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8

IPO Market Activity

Source: ECM Analytics as of May 14, 2010. Excludes closed-end funds, REITs, units, best efforts offerings, non-U.S. offerings and offerings less than $10 million. Proceeds include over-allotment amount.

Note: Growth sectors defined as aerospace and defense, alternative energy, consumer, health care, technology and telecommunications.A.

IPO

IPO Pricings, Filings and Withdrawals

SEC Registered IPO VolumeDespite substantial

improvements in the IPO

market, recent lower-than-

expected IPO pricings (relative

to filing range midpoints)

suggests that investors

continue to take a disciplined

approach to their deal

selections and push for widerdiscounts

The one-year rolling IPO

backlog has grown in recent

weeks, with 7 companies

submitting their initial S-1/F-1

filings during the week ended

May 14 and 10 IPOs expectedto price prior to May 20

$5.2$6.9 $6.3

$7.4

$4.4 $5.0

$1.9

$3.1

$4.5 $5.2$4.8

$19.7

$1.2$0.8$0.1

$0.7 $0.4

$0.9 $1.2

$0.7$2.2

$0.0

$3.3

$11.5

$0.7

$0.2

$0.0 $0.0

$0.20.0

3.0

6.0

9.0

12.0

15.0

18.0

$21.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Growth Sector Proceeds Non-Growth Sector Proceeds Visa IPO

(US$ in billions)

2007 2008 2009 2010

40

18

46

24

51

3131

126

10

315

1

30

5

30

9

24

10

47

64

38

87

78

54

42

58

11115

1515

31

12

19

2628

1016

10 10

0

20

40

60

80

100

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Pricings Filings Withdrawn Marketed and Failed to Price

2007 2008 2009 2010

(# of Deals)

Current IPO Backlog:

89 Filings for $20.1 BN


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9

IPO Pricing Trends

Source: ECM Analytics as of May 14, 2010. Excludes closed-end funds, REITs, units, best efforts offerings, non-U.S. offerings and offerings less than $10 million.

(a) Based on number of pricings/fil ings.(b) Excludes life sciences offerings.A

.IPO

% Downsized / Upsized(a) Median % Returns

Pricing Dynamics(a)(b)

40.0%55.6%

40.0%

100.0%

45.2%36.4%

50.0%

75.0%

38.7%45.5%

10.0%22.2%

16.1% 18.2%

0.0%

16.7%10.0%

53.3%

0.0%

60.0%

30.0%

22.2%

100.0%

33.3%

0.0%

8.3%

60.0%

13.3%

0.0%

0.0

20.0

40.0

60.0

80.0

100.0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Below Range Within Range Above Range

(% of Total)

2008 2009 2010

(3.9)%

10.1%

(1.3)%(6.4)%

1.3%0.6%

23.2%

0.0% 3.1% 0.0%

(2.1)%

2.3% 5.1%

(15.2)%

56.0%

109.7%102.2%

(48.9)%(57.6)%

5.2%

(80.0)

(40.0)

0.0

40.0

80.0

120.0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Offer/1 Day Offer/Current

(Median %)

2008 2009 2010

20.0%22.2%

25.0%22.2%

0.0% 0.0% 0.0% 0.0%

16.7%

6.5%

20.0%

33.3%

0.0% 0.0%

27.8%

40.0%

10.0%

58.3%

19.4%

100.0%

0.0

20.0

40.0

60.0

80.0

100.0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

% Downsized % Upsized

(% of Total)

2008 2009 2010

The IPO pricing environment has improved since March

67% of IPOs since March 1st have priced within or

above their ranges

70% of deals in Jan-Feb priced below their ranges

IPO pricing conditions remain situation specific, with

investors pressuring valuations in cases where growth

prospects are more binary

Tech IPOs have priced well and generally traded up Pre-commercial biotech IPOs have struggled due to

clinical risk of drug approval


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10

IPO Structural Trends

Source: ECM Analytics as of May 14, 2010. Excludes closed-end funds, REITs, units, best efforts offerings, non-U.S. offerings and offerings less than $10 million.

(a) Small and Unprofitable designation based on issuers that are not profitable and have less than $100 million in revenue for the most recent year end data at the time of IPO.A.

IPO

Number of IPOs by Market CapNumber of IPOs by Sector

Number of IPOs by % SecondaryNumber ofSmall and Unprofitable IPOs(a)

8.7%

14.2%

13.1%

4.0%

19.7%

21.7% 12.0%16.7%

14.3%

24.0%39.9%

28.0%24.1%

38.1%

26.8%

15.2%

32.0% 31.5% 31.0%

2.2% 1.5% 0.0%3.7%

0.0%

4.0%

2.4%

4.4%16.0% 3.7% 2.4%4.5%

8.0%16.7%

11.9%

3.7%

0.0

20.0

40.0

60.0

80.0

100.0%

2006 2007 2008 2009 2010 YTD

A&D Alt. Energy Consumer Finance Health Care TMT Other

(% of Total)

50.8%

28.0%

13.0%

28.6%

19.7%

34.3%

28.0%

31.5%

38.1%

38.4%

37.0%

7.7% 8.1%

20.0% 18.5%

19.2%

21.9%

24.0%

31.0%

2.4%

0.0

20.0

40.0

60.0

80.0

100.0%

2006 2007 2008 2009 2010 YTD

$2BN

(% of Total)

59.0%53.5% 56.0%

40.7%

59.5%

14.2% 24.7%12.0%

13.0%

15.8%11.6%

16.0%

14.8%

16.7%

19.0%

6.6% 6.1% 2.4%

22.2%

4.0%

2.4%9.3%12.0%4.0%4.4%

0.0

20.0

40.0

60.0

80.0

100.0%

2006 2007 2008 2009 2010 YTD

No Secondary 75%

(% of Total)

69.1%

84.0%90.7%

30.9% 33.9%

16.0%9.3%

23.8%

76.2%66.1%

0.0

20.0

40.0

60.0

80.0

100.0%

2006 2007 2008 2009 2010 YTD

"Large or Profitable" "Small and Unprofitable"

(% of Total)


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11

U.S. IPO Activity 2010 Year-to-Date

A.

IPO

Company Characteristics Above/

Pricing Critial Mass > 40%Rev. Market Proceeds/ % Below/ % Chng Offer/

Date Issuer Sector ($100m+ Rev) Growth Profitability Proceeds Value Mkt Value Secondary In Range 1 Day Current

05/14/10 Kingtone Wirelessinfo Solution Software $ 16.0 $ 56.0 28.6% 0.0% Below (1.5)% (1.5)%

05/13/10 JinkoSolar Alt. Energy 64.2 239.1 26.9 0.0 Above 0.1 0.1

05/13/10 Noranda Aluminum Metal & Steel-Processing 80.0 430.3 18.6 0.0 Below 10.0 10.0

05/13/10 TeleNav Navigation Products 56.0 339.0 16.5 21.4 Below 22.5 15.0

05/12/10 Express Specialty Retail 272.0 1,602.0 17.0 34.4 Below (1.5) (6.7)

05/12/10 Roadrunner Transportation Systems Transportation-Services 148.4 435.9 34.0 15.1 In Range (1.8) (1.1)

05/04/10 Charm Communications Avertising 74.2 371.1 20.0 0.0 In Range (1.1) (4.1)%

05/04/10 Douglas Dynamics Automobile Equipment 112.5 239.1 47.0 35.0 Below 0.4 2.8

04/28/10 Alpha & Omega Semiconductor Semiconductors 105.3 336.4 31.3 33.2 In Range (1.7) (18.3)

04/28/10 Convio Software 53.1 146.5 36.3 29.2 Below 13.8 6.8

04/21/10 Alimera Sciences Life Sciences 72.1 341.6 21.1 0.0 Below 0.0 (4.5)

04/21/10 Codexis Life Sciences 78.0 440.8 17.7 0.0 In Range 2.0 0.2

04/21/10 DynaVox Software 140.6 444.2 31.7 0.0 In Range 0.0 (2.1)

04/21/10 Global Geophysical Servic es Oil & Gas 90.0 430.5 20.9 6.7 Below 0.0 (12.8)

04/21/10 Mitel Networks Comm. Equipment 147.4 623.0 23.7 0.0 Below (12.1) (17.8)

04/21/10 SPS Commerce Software 49.2 131.1 37.5 39.0 In Range 13.3 8.304/09/10 Tengion Life Sciences 31.0 31.8 97.5 0.0 Below 0.4 (19.4)

04/08/10 Metals USA Metal Distributor 240.0 777.1 30.9 0.0 Above (8.6) (25.1)

03/31/10 Primerica Life Insurance 368.5 1,125.0 32.8 100.0 Above 31.0 63.7

03/30/10 Meru Networks Comm Equipment 75.7 233.3 32.4 18.5 In Range 27.8 1.3

03/30/10 Scorpio Tankers Shipping 168.4 241.0 69.9 0.0 Below (3.4) (14.5)

03/30/10 SS&C Technologies FinTech 185.0 1,062.0 17.4 23.3 In Range 0.5 11.3

03/25/10 China Lodging Group Hotels & Motels 126.8 738.1 17.2 0.0 In Range 13.6 19.8

03/23/10 Calix Comm. Equipment 94.6 484.2 19.5 34.2 In Range 16.2 (16.2)

03/23/10 F irst Interstate BancSys tem Commercia l Banks 166.8 619.8 26.9 0.0 In Range 8.3 9.2

03/23/10 MaxLinear Semiconductor 103.8 436.6 23.8 20.1 Above 33.6 12.4

03/15/10 Financial Engines Financial Technology 146.3 482.9 30.3 44.6 Above 43.8 29.5

03/11/10 AVEO Pharmaceuticals Life Sciences 89.7 275.5 32.6 0.0 Below (0.1) (5.6)

03/11/10 Crude Carriers Shipping 256.5 294.5 87.1 0.0 In Range (2.4) (5.8)

03/10/10 Sensata Technologies Industrial Technology 654.1 3,080.9 21.2 16.7 In Range 2.8 6.9

03/09/10 Baltic Trading Ltd Shipping 228.2 314.5 72.6 0.0 In Range (0.3) (8.3)03/01/10 Anthera Pharmaceuticals Inc Life Sciences 46.2 155.3 29.8 0.0 Below 0.1 (1.4)

02/10/10 Generac Holdings Inc Electrical Machinery 269.1 876.0 30.7 0.0 Below (1.2) 3.7

02/10/10 Graham Packaging Co Inc Industrial 182.3 630.1 28.9 0.0 Below 2.0 22.3

02/10/10 QuinStreet Inc Internet Marketing 150.0 673.7 22.3 0.0 Below 0.0 9.0

02/02/10 Ironwood Pharmaceuticals Inc Life Sciences 215.6 1,095.9 19.7 0.0 Below 3.6 17.4

01/28/10 China Electric Motor Inc Industrial Technology 25.9 90.5 28.6 0.0 Below (1.1) 66.4

01/27/10 IFM Investments Ltd (Century 21 China)Mortgage Broker 87.4 116.6 75.0 0.0 Below 4.3 (26.4)

01/25/10 Andatee China Marine Fuel Services CorpOil & Gas 22.7 60.5 37.5 0.0 Above (8.4) (11.9)

01/25/10 China Hydroelectric Corp Electric Power 96.0 766.9 12.5 0.0 In Range (6.1) (35.9)

01/21/10 Cellu Tissue Holdings Inc Pulp & Paper 107.9 261.6 41.2 67.8 Below (8.5) (26.9)

01/21/10 Symetra Financial Corp Life Insurance 419.5 1,415.9 29.6 31.9 In Range 6.3 6.6

Mean $ 145.6 $ 546.3 33.2% 13.6% 4.7% 1.3%

Median 106.6 430.4 29.3 0.0 0.1 (0.5)


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ConsiderationsinDeciding

toGo

Public


13/59

Thisis MoFo. | 13

Access to cash and capital markets for future financings andgrowth.

Create a currency for future tax free acquisitions. Liquidity for investors (after lock-up period).

Provide a vehicle for performance-linked employeecompensation.

Raise the companys profile and credibility with customers andsuppliers.

Potentially maintain founder and management control of thecompanys future.

Considerationsin Deciding to Go Public

Why you should go public:


14/59

Thisis MoFo. | 14

Possible higher valuation if technology is strong butearnings potential is weak.

More certain cash-out of existing investors.Avoiding time and cost of the going public process.

Avoiding the burdens of living as a public company.

Ability to keep things confidential.

No need to fill out management team.

Considerationsin Deciding to Go Public

Pre-IPO exitstrategy as an alternative:


15/59

Thisis MoFo. | 15

Going PublicAdditional Considerations

Upfront costs.

Management timeboth before and after.

Increased disclosure and reporting obligations.

Corporate governance requirements. Trading restrictions on insiders and directors.

Compliance costs.

Public shareholdersactivism and litigation threats.

Investor relations.

Uncertaintylegislative and regulatory changes.


16/59

LaunchingaSuccessf

ulIP


17/59

Thisis MoFo. | 17

Launching a Successful IPOGet your corporate house in order before running up

your costs:

Assemble an experienced management team.

Recruit independent members of the board of directors.

Prepare necessary financial statements. Implement appropriate executive compensation policies.

Clean up the capital structure.

Organize corporate records, minute books and stock ledgers.

Document material agreements.

Adopt appropriate defensive measures.

Identify potential issues earlyno surprises.


18/59

Thisis MoFo. | 18

Launching a Successful IPOGet your businessin order before you getdistracted by

the IPO process

Make sure your intellectual property is protected.

Make sure your balance sheet is strong enough to

withstand delays and expenses. Will your results be impacted by the focus of management

on the IPO?

Do your projections take into account the costs of being apublic company?

Address risk management and insurance issues.

Deal with potential cheap stock issues.


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Thisis MoFo. | 19

Launching a Successful IPO

The Business of being a public companyact like apublic company, starting now!

Does your board look and feel like a public companyboard?

Are your internal controls adequate for public companyrequirements?

Will your executive compensation programs and policieswithstand scrutiny?

Are there related party transactions that must beeliminated?

Are you prepared to deal with public stockholders?


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Thisis MoFo. | 20

Launching a Successful IPOFive waysto make your IPO a success:

1. Every team needs a captain that plays the whole game.

2. Dont hold your organizational meeting until people have

seen a good draft of the business section of yourprospectus.

3. Know what kind of shape your financial statements arein, and develop reasonable expectations about when theaudit will be completed.

4. Establish a realistic timetable that involves no moredrafting sessions than are really required.

5. Avoid surprises.


21/59

II. IPO Valuation and Structure


22/59

A. IPO Example #1: GTEC


23/59

13

Global Defense Technology & Systems, Inc. (GTEC) Overview

A.

IPOEXAMPLE#1:G

TEC

Global Defense Technology & Systems, Inc.

(GTEC) provides mission-critical

technology-based systems, solutions, and

services for national security agencies and

programs of the U.S. government

The Companys services and solutions

address counter-terrorism and intel ligence

analysis, command, control and decisionsupport systems and solutions for the

design, engineering and integration of

highly mobile mission support system

Globals objective was to create a liquidity

event for certain insiders and their parent

company GLOBAL while using the remaining

proceeds raised from primary shares to de-

leverage the Company's balance sheet

Situation Overview and Objectives

Transaction and Marketing Highlights

Consensus Estimates

Global filed its S-1 on September 1, 2009

and launched its roadshow on November 9,

2009

Management marketed for 9 days in 13

European and U.S. cities, with 48 investor

one-on-ones and 7 group meetings

Represented the first defense services IPO

since SAIC in October 2006

2008A 2009E 2010E

Revenues $189.4 $ 212.0 $250.0

EBITDA 18.4 15.6 20.3

EPS $ 0.18 $ 1.01 $ 1.01


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14

GTEC: Valuation Driven by EBITDA and Earnings

Comparable Company Valuation (US$ in millions, except per share data)

A.

IPOEXAMPLE#1:G

TEC

EV as Multiple of Price/

Stock Price % of Market Enterprise EBITDA(c) Earnings(c)

(US$ in millions) (11/3/09) 52W High Value(a) Value(a)(b) CY09E CY10P CY09E CY10P

CACI International $48.29 99% $1,465 $1,795 7.0x 6.6x 15.1x 13.8x

ManTech 44.82 74 1,616 1,564 7.6 7.0 14.4 13.2

SAIC Inc. 17.84 87 7,159 7,314 6.8 6.2 14.0 12.2

SRA International 18.97 82 1,073 1,073 7.1 6.5 16.6 14.3

ICF International $28.54 92% $445 $663 9.6x 8.0x 21.2x 17.3x

NCI 26.40 77 369 411 10.0 8.7 17.6 15.6

Stanley 29.29 81 725 865 9.7 9.1 15.9 14.8

Overall

Median 7.6x 7.0x 15.9x 14.3x

Mean 8.3 7.4 16.4 14.4

Core Peer Group: Micro Cap

Median 9.7x 8.7x 17.6x 15.6x

Mean 9.8 8.6 18.2 15.9

GTEC $14.00 NA $129 $130 8.3x 6.4x NM 14.0x

GTEC 15.00 NA 138 136 8.8 6.7 NM 15.0GTEC 16.00 NA 148 143 9.2 7.1 NM 16.0


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15

IPO Valuation

A.

IPOEXAMPLE#1:G

TEC

(a) Includes $12.6 million in term loans, $8.6 million drawn on line of credit, $0.3 million deferred interest and $0.1 million of cash as of December 31, 2008.

GTEC Median Core Group Range of Prices

Valuation Metric Statistic Comp Multiple $14.00 $15.00 $16.00

2010P EBITDA Multiple $20.3 8.7x 6.4x 6.7x 7.1x

Premium/(Discount) to CorePeerGroup Comparables (26.2%) (22.3%) (18.5%)

2010P Adjusted P/E Multiple $11.3 14.1x 11.4x 12.2x 13.0x

Premium/(Discount) to CorePeerGroup Comparables (19.3%) (13.3%) (7.4%)

Marketing Range (US$ in millions, except per share data)

2010 EBITDA IPO Valuation (US$ in millions, except per share data)

IPO Step-up Valuation Low Mid High

2010E EBITDA 20.3$ 20.3$ 20.3$

EBITDA Trading Multiple 7.4x 7.7x 8.2x

Fully-Traded Enterprise Value 149.6$ 156.6$ 166.0$

Less: Pre-IPO Net Debt(a) (21.3) (21.3) (21.3)

Plus: Net IPO Proceeds to GNA 22.8 22.8 22.8

Fully-Traded Equity Value 151.0$ 158.0$ 167.4$

Less: IPO discount 15.0% 15.0% 15.0%

Equity Value at Pricing Equity Value at Pricing 131.3$ 137.4$ 145.5$

New Investor % Ownership 38.1% 36.4% 34.4%

Enterprise Value at Pricing 129.9$ 136.0$ 144.1$

Implied EBITDA Multiple at Pricing 6.4x 6.7x 7.1x

Public Market Equity Valuation

Enterprise Value at Pricing


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16

Global Defense Technology & Systems, Inc. (GTEC) $62.9 Million IPO

A.

IPOEXAMPLE#1:G

TEC

Transaction and Marketing Highlights Transaction Overview

Multiples at Pricing(a)

(a) Comparable Companies include: CACI International, ICF International, ManTech, NCI, SAIC, SRA International and Stanley.

Global priced a full size offering at $13.00,

or 7.1% below the low end of the range

The offering was well-received by investors

The order book was almost 1.5x

subscribed

25% of conference calls/meetings

resulted in orders

NCI Inc, one of Globals closest comps,

traded down (6.1)% the day before pricing

and (7.3)% over the marketing period

creating an additional challenge in pricing

the deal

November 19, 2009

Base Shares Offered 4,600,000

Green Shoe (Exercised) 236,726

Filing Range $14.00 - $16.00

Issue Price $13.00

Total Amount Raised $62,877,438

Mkt Val at Issue $117,473,616

Proceeds as a % of Mkt Val 50.9%% Secondary 34.8%

2008A 2009E 2010E

EBITDA Multiple NA 7.7x 5.9x

P/E Multiple NA NM 12.9

(Multiples)

Median Peer EBITDA 8.7x 7.5x 6.9xMedian Peer P/E 17.3 15.1 13.6


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17

GTEC: Current Valuation Compared to Comparables

GTEC Valuation (US$ in millions, except per share data)

A.

IPOEXAMPLE#1:G

TEC

Enterprise Value as a Multiple of Price/

Stock Price % of Market Enterprise Revenue(c) EBIT(c) EBITDA(c) Earnings(c)

(5/14/10) 52W High Value(a)

Value(b)

CY10E CY11P CY10E CY11P CY10E CY11P CY10E CY11P

Defense Services

CACI International $48.39 91% $1,479 $1,833 0.6x 0.5x 9.2x 8.2x 7.2x 6.5x 13.6x 12.2x

Dynamics Research 12.43 87 125 146 0.5 0.5 6.8 6.4 5.4 5.2 10.0 9.2

Global Defense Tech & Systems 15.20 90 139 139 0.6 0.5 9.7 7.8 7.1 6.2 15.5 13.2

ManTech 43.43 79 1,571 1,679 0.6 0.6 7.8 7.1 6.9 6.4 12.7 11.9

NCI 21.31 62 298 327 0.6 0.5 8.4 7.4 7.4 6.5 12.7 11.5

SAIC Inc. 17.22 87 6,710 6,955 0.6 0.6 7.7 7.1 6.9 6.4 12.8 11.0SRA International 21.79 91 1,246 1,205 0.7 0.7 9.7 8.4 7.9 7.0 15.8 14.5

Median 0.6x 0.5x 8.4x 7.4x 7.1x 6.4x 12.8x 11.9x

Mean 0.6 0.6 8.5 7.5 7.0 6.3 13.3 11.9


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B. IPO Example #2: ALIM


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19

Alimera Sciences, Inc. (ALIM) Overview

B.

IPOEXAMPLE#2:A

LIM

Alimera Sciences, Inc. is a Phase III

biopharmaceutical company developing

ophthalmic pharmaceuticals focused on

diseases affecting the back of the eye, or

retina

Lack of effective treatment for retinal

damage creates large market opportunity

for Alimera

Alimeras lead product Iluvien potential to

be first drug approved for Diabetic Macular

Edema (DME)

Phase III data in DME in hand at the

time of IPO; revenues beginning in

2011

There were six Iluvien trials ongoing at the

time of the IPO, as the Company evaluated

the drugs use in the treatment of a variety

of ophthalmic diseases

Wet age-related macular degeneration

(AMD), dry AMD, and retinal vein

occlusion (RVO)

Situation Overview and Objectives

Marketing Re-Cap

Financials

Alimera filed an amended S-1 on April 9th,

signaling they were planning to offer

6,000,000 shares in a range of $15-$17

Management marketed for 10 days in 12

European and U.S. cities, with 57 investor

one-on-ones and 4 group meetings

2010A 2011E 2012E 2012E

Revenue $ 0.0 $ 15.0 $ 65.0 $ 110.0EBITDA (26.0) (22.8) 7.2 35.3Net Inc $ (25.5) $ (22.5) $ 4.8 $ 23.3


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1

Alimera Valuation Based On Various Methodologies

Summary(a)

Alimera Valuation Based On Various Methodologies Summary (US$ in millions)

(a) Supporting schedules on following pages.

(b) Value discounted back 1 year at 25%.

Pre-Money Equity Value Range

Methodology Low Mean High

Comparable Company Analysis:

Revenue (2011 Estimates) $ 285.2 $343.2 $ 401.3

Net Income (2011 Estimates)(b) $ 455.0 $ 492.9 $ 530.7

Historical Analysis of Companies with Phase III Data $ 176.0 $414.9 $ 976.4

IPOs of NDA Stage Companies $ 131.7 $304.5 $ 774.4


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20

ALIM: Valuation Driven by Revenue

B.

IPOEXAMPLE#2:A

LIM

Stock Price % of Market Enterprise EV as Multiple of Revenue

(US$ in millions) (11/3/09) 52W High Value(a) Value(a)(b) CY10E CY11P CY12P CY13P

Ophthalmology Companies

Inspire Pharmaceuticals $6.23 88% $518 $414 3.8x 3.4x 2.3x 1.7x

QLT Inc. 5.25 96 282 94 1.9 1.9 2.5 1.4

Ista Pharmaceuticals 3.96 58 132 92 0.6 0.5 0.5 0.4

InSite Vision Inc 0.42 64 40 75 NA NA NA NA

Median 76% $243 $169 2.1x 1.9x 1.7x 1.2x

Mean 76% $207 $93 1.9 1.9 2.3 1.4

Near Term New Drug Comparnies

Auxilium Pharmaceuticals $30.63 82% $1,481 $1,296 5.5x 3.5x 2.7x 2.2x

Acorda Therapeutics 35.90 98 1,433 1,166 9.6 4.4 3.0 2.2

Savient Pharmaceuticals 14.61 88 1,008 900 NM 8.3 5.2 3.7

VIVUS Inc 8.82 69 731 543 14.7 6.9 4.0 2.9

Affymax Inc 23.33 91 569 397 2.9 2.0 1.6 1.1

Cadence Pharmaceuticals 9.00 71 463 386 NM 6.5 2.6 1.5

Arena Pharmaceuticals 3.19 54 323 342 17.9 3.5 3.2 2.0

Orexigen Therapeutics 5.99 55 286 201 10.0 4.3 1.9 1.0

Median 76% $787 $654 10.1x 4.9x 3.0x 2.1x

Mean 77% $650 $470 9.8 4.3 2.9 2.1

ALIM $15.00 NA $489 $571 NA NA 8.8x 5.2x

ALIM 16.00 NA 522 609 NA NA 9.4 5.5

ALIM 17.00 NA 554 648 NA NA 10.0 5.9

Comparable Company Valuation (US$ in millions, except per share data)


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22

Historical Analysis of Companies With Phase III Data(a)

B.

IPOEXAMPLE#2:A

LIM

Historical Analysis of Companies With Phase III Data (US$ in millions)

(a) Includes Companies with Phase III data announcements. Pre-Money Enterprise Value based on day after final Phase III data announcement.

(b) Cash and debt figures as of October 21, 2009 per Alimera Sciences Management.(c) Represents the day after Phase III data announcement.

(d) Represents the companys stock price one day after their Phase III data announcement.

Historical Analysis of Companies With Phase III Data (US$ in millions)Price Post

One Day Equity EnterpriseCompany Date(c) Post Ann.(d) Value Cash Debt Value

Savient Pharmaceuticals Inc. 05/08/08 $ 23.90 $ 1,293.8 $ 127.1 $ 0.2 $ 1,166.9

AMAG Pharmaceuticals Inc. 04/12/07 71.34 1,009.5 190.0 819.5

AcordaTherapeutics Inc. 09/16/09 25.15 957.3 212.7 7.0 751.6

Allos Therapeutics Inc. 12/08/08 5.04 409.0 92.3 316.6

VIVUS Inc. 11/19/09 8.34 671.8 226.9 20.1 465.0

Arena Pharmaceuticals Inc. 10/28/09 3.85 356.6 143.5 86.7 299.8

Cadence Pharmaceuticals Inc. 12/18/08 6.90 264.7 63.3 15.8 217.3

Orexigen Therapeutics Inc. 07/21/09 7.52 260.9 46.0 13.0 227.9

Dyax Corp. 08/18/08 5.00 303.2 63.8 31.1 270.5

Mean $ 17.45 $ 614.1 $ 129.5 $ 19.3 $ 503.9Median 7.52 409.0 127.1 13.0 316.6

Low Mean High

Comparable Companies Pre-Money Enterprise Value $217.3 $503.9 $1,166.9

Less: 20% IPO Discount 20.0% 20.0% 20.0%

Pre-Money Enterprise Value $181.1 $419.9 $ 972.4

Plus: Cash(b) 9.9 9.9 9.9

Less: Debt(b) (15.0) (15.0) (15.0)

Pre-Money Equity Valuation $176.0 $414.9 $ 967.4

Plus: Gross Proceeds 75.0 75.0 75.0

Implied Post-Money Equity Valuation $251.0 $489.9 $1,042.4


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7

IPOs of NDA Stage Companies 20042010 YTD(a)

IPOs of NDA Stage Companies 20042010 YTD (US$ in millions)

(a) Includes NDA stage companies at time of IPO.

(b) Cash and debt figures as of October 21, 2009 per Alimera Sciences Management.

IPOs of NDA Stage Companies 20042010 YTD (US$ in millions)

Initial Public Offering% Change From File

to Offer(d)

Development Status Diluted Valuation% ChangeOffer to

Pricing Filing Offer Amount Amount Trans. Indications of Pre-Mon. Post-Mon. IPO CurrentIssuer Date

(b)Price

(c)Price Filed Offered Price Amount Lead Product(s) Value Value Step-Up

(f)Price

Targanta Therapeutics 10/10/07 13.00 10.00 $ 74.8 $ 57.5 (23.1)% (23.1)% Gram-Positive Infections $ 166.3 $ 2 23.8 1.1 NA

Replidyne 06/28/06 15.00 10.00 75.0 45.0 (33.3) (40.0) Sinusitis, Pneumonia 231.8 276.8 1.2 NA

Momenta Pharmaceuticals 06/22/04 14.00 6.50 74.9 34.8 (53.6) (53.6) Deep Vein Thrombosis 131.7 166.5 1.0 124.6%

Santarus 04/01/04 12.00 9.00 85.2 54.0 (25.0) (36.6) Heartburn 218.5 272.5 2.0 (58.1)

Eyetech Pharmaceuticals 01/30/04 19.00 21.00 123.5 136.5 10.5 10.5 Wet AMD 774.4 910.9 2.9 NA

20042010 YTD

Median 75.0 54.0 (25.0) (36.6) 218.5 272.5 1.2 33.3Mean 86.7 65.6 (24.9) (28.5) 304.5 370.1 1.7 33.3

Low Mean High

Pre-Money Equity Valuation at Pricing $131.7 $304.5 $774.4

Plus: Gross IPO Proceeds 75.0 75.0 75.0

Implied Post-Money Equity Valuation $ 206.7 $379.5 $ 849.4


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23

Alimera priced a full size offering at $11.00,

representing a 26.7% discount to the low

end of the range

Insiders contributed $20 mill ion to the

order book, helping the Company

achieve a minimum proceed threshold

Investors placed a lower than expected

valuation on Alimera due to the pre-commercial status of its lead product and

current lack of tangible revenue

The Company was marketed as prepared for

an NDA filing imminently, with an FDA

decision on Iluviens approval status pending

Alimera Sciences, Inc. (ALIM) $72.0 Million IPO

B.

IPOEXAMPLE#2:A

LIM

Transaction and Marketing Highlights Financials

Multiples at Pricing(a)

2009E 2010E

EV / Revenue 6.9x 4.1x

April 21, 2010

Base Shares Offered 6,550,000

Green Shoe (Not exercised)982,500

Filing Range $15.00 - $17.00

Issue Price $11.00

Total Amount Raised $72,050,000

Mkt Val at Issue $341,561,605

Proceeds as a % of Mkt Val 21.1%% Secondary 0.0%


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TheIPOProcess


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Thisis MoFo. | 36

Outside LawyersWhat Do They Do?

Company counsel

Pre-IPO housekeepingand preparation.

Prepare the company for

due diligence process.Legal requirements.

Manage drafting.

Submit filings andresponses to SEC.

Post-IPO obligations anddisclosure.

Underwriter counselConduct due diligence.

FINRA filings.

Assist in drafting.

Selling stockholder counselLegal opinion.

Selling stockholderdocumentation.


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Thisis MoFo. | 37

6-12 monthsbefore IPO

Company rounds outmanagement team (ifnecessary); focus oncorporate cleanup

Companyformallydecides to do

IPO appoint

underwriter publicity

restrictionscommence

4-6 monthsbefore IPO

due diligence prospectus

drafting adopt public

co. policies/controls/procedures ifnot done

already complete

audit andreview ofinterimfinancials

corporategovernancematters

3-6 weeks beforefirst SECfiling

fileForm S-1 with SECand submitapplication

to exchange file

confidentialtreatmentrequest, ifnecessary

receive first

round ofcommentsfrom SEC

respond to2nd (and3rd, 4th and5th) roundofcommentsfrom SEC

4 weeksafterfiling

Comments at

2-4 weekintervals

resolvematerialSECcomments

listingapproval

bulk printpreliminary(red)prospectus

road show

price deal commence

publicoffering

print finalprospectusand closeoffering

Typically 3-5 monthsafterfirst filing

Initial filing

resubmitrevised S-1

1-2 weeksafter receiptof comments

Typically 2-3weeks

Typical IPO TimelineNasdaq/NYSE


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Thisis MoFo. | 38

Insiders View of SECs Division ofCorporation FinanceStructure lawyers and accountants

Underlying focus is on shareholder protection

Assignment of filing within SEC groups

Autonomy of Corp Fin Offices

Review focus full scope, limited scope or special review

Secondary reviewer s tructure

Key to understand nothing special about your filing

Gifts to SEC Staff

SEC Review Process


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Thisis MoFo. | 39

Pointsto consider priorto andduring the SECs reviewofthe companys Form S-1

Pre-IPO Filing

Considerations

Post-IPO Filing

Considerations

Brainstorming session on disclosure matters Strategy on pre-filing letters Cold review of Form S-1 SECs knowledge of company based on Form S-1 andwebsite

Initial communication establish contact with SEC reviewer Edgar search on SEC reviewer comments

Calls with SEC to discuss specific issues Issues management Comment letters Appeals process

SEC Review Process


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Thisis MoFo. | 40

SEC Review Process: Who is BehindtheCurtain?

The Division of Corporation Finance Review Team

Legal (Examiner and Reviewer)

Accounting (Examiner and Reviewer)

Branch Chiefs, Assistant Chief Accountant, Senior Assistant Chief

Accountant, Special Counsel and Assistant Director What are they looking for?

How does the staff review your registration statement?

What is the comment letter process?

What are the timing considerations? How do you manage the review process?


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PublicCompa

nyFinancial

Reportingand

Sarban

es-O


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Thisis MoFo. | 42

The basic financial reporting timeline for an IPO

Key Phases ofthe IPO Process

Phase I

- Assessing readinessallows for increasedaccuracy inmanagements IPO

planning and timing.

Phase 1 Phase 2 Phase 3

ReadinessAssessment

Planning

Going

PublicActivities

Being Public Activities

Pre-Filing Post-Filing

Phase II

- Planning to set overall horizonand key milestones.

- Going public activities, includingpreparation and audit of relevant

historical financial data,prospectus drafting and SECreview process.

Phase II and III

Being public involves corporategovernance, 404 compliance,developing and sustainingquarterly close procedures.


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Thisis MoFo. | 43

Benefits of assessing readiness atstart of IPO process

Assessing Readiness

Anticipate issues and avoid untimely delays in external financial reporting process that can lead to:

A decrease in the markets confidence in management,

- Damage brand image,

- Difficulties in raising capital, and

- Ultimately a lower market value for current and future capital market transactions.

Assess state of readiness for life as public company in following areas:

Accounting FinancialClose andReporting

Governance InternalControl

Legal InformationTechnology

Other

Accountingstandards and

uniformity

Close efficiency /

effectiveness

Structure ofBoard and

committees

Controls overfinancial

reporting andother key areas

General counsel Governance Investor relations

Gap to GAAPConsolidation

process

Code ofbusinessconduct

404 MonitoringSecuritiescounsel

General andapplication

controls

Treasury andrisk

management

Technicalaccounting andissue resolution

Externalreporting

Riskmanagement

302 processes Fraud oversightInformation

systemresources

Income taxes


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Thisis MoFo. | 44

Registrant would be requiredto meetthe followingreporting requirements:

SEC Financial Reporting

SEC Reporting Requirements

Baseline statements 3 years

Unaudited interim statements Updated after 135 days of previous period

Disclosures Full US GAAP and SEC compliant

Selected financial data 5 years

MD&A 2 years + interim

Pro-forma financial statements Most recent balance sheet date and year-end andinterim income statement

Significant acquisitions Required - S-X 3-05

Significant equity investees Required - S-X 3-09 and 4-08(g)


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Thisis MoFo. | 45

Common complex accounting and reporting mattersthat companies oftenaddressduring the IPO offering process (including the SEC review process):

Differences between SEC GAAP and US GAAP (e.g., push down, carve-out, and disclosurerules)

Quarterly financial dataStock compensation and cheap stock issues

Other complex equity transactions with shareholders

Segment disclosures

Earnings per share

Business combinations, intangible asset recognition and valuationsRevenue recognition

Complex or numerous pro forma adjustments

SEC Financial Reporting


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Thisis MoFo. | 46

Requires quarterly certification by the CEO/CFO regarding thecompleteness and accuracy of reportsfiled under Section 13(a) and 15(d) ofthe Securities Act of 1934 as well asthe nature and effectiveness ofinternalcontrolssupporting the quality ofinformation includedin such reports.

Section 302

Section 404

Requires an annual report by both management and external auditors regarding theeffectiveness ofthe companysinternal controls overfinancial reporting.

302 reporting begins once acompany is an SEC registrant

404 reporting begins with second

annual filing with SEC

Sarbanes-Oxley Act of 2002


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Thisis MoFo. | 47

Internal Control and ProcessConsiderations

Key process andinternal controls considerations

Ensure Sarbanes-Oxley success begins prior to the filing

Gain common understanding of key business risks

Focus on key process and systems beyond financial reporting

Address systems and process scalability

Understand overall compliance requirements

Develop key policies and related management practices

Plan for training and education

Set up monitoring processesDevelop communication practices


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Thisis MoFo. | 48

Requires quarterly certification by the CEO/CFOregarding the completeness and accuracy ofreportsfiled under Section 13(a) and 15(d) ofthe Securities Act of 1934 as well asthe nature

and effectiveness ofinternal controlssupporting the quality ofinformation includedin such reports.

Internal Control Considerations

Avoiding surprises is key to success as a public company


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III. IPO Execution


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25

Managing the IPO Process

Targeted First Filing (whenever unaudited financials ready)

Expected SEC Review (median for IPOs since 2009 is 75 days(a)

Re-File With Range (at the outset of marketing, based on market conditions)

Marketing (European / US roadshow over 2 week time period which does not interfere with any major market holidays)

Potential for early lockup release follow-on (once full audit complete)

IPO Timing Considerations

Proposed IPO Timeline

III.IPO

EXECUTION

Pre-Filing Period Post-Effective PeriodPre-Effective Period

All HandsOrganizational Meeting

Management DueDiligence at Company

Prospectus Drafting

Ongoing Due Diligence(Financial, Auditors,etc.)

Customer DueDiligence

File RegistrationStatement with SEC

SEC Review Period

Roadshow Preparation

Receive and Respondto SEC Comments andFile Amendments

Print and DistributeRed HerringProspectus

ManagementPresentations toUnderwriters SalesForces

International andDomestic Roadshow

RegistrationStatement DeclaredEffective by SEC

Price Offering andBegin Trading

Closing 3 Days AfterPricing

Quiet Period Begins

Week 1 Weeks 28 Weeks 918 Weeks 1920 Weeks 2021

Denotes market holiday.

Denotes typical market slowdown.(a) Excludes offerings put on hold due to market conditions.

April 2010

S M T W T F S

1 2 3

4 5 6 7 8 9 10

11 12 13 14 15 16 17

18 19 20 21 22 23 24

25 26 27 28 29 30

May 2010

S M T W T F S

1

2 3 4 5 6 7 8

9 10 11 12 13 14 15

16 17 18 19 20 21 22

23 24 25 26 27 28 29

30 31

June 2010

S M T W T F S

1 2 3 4 5

6 7 8 9 10 11 12

13 14 15 16 17 18 19

20 21 22 23 24 25 26

27 28 29 30

July 2010

S M T W T F S

1 2 3

4 5 6 7 8 9 10

11 12 13 14 15 16 17

18 19 20 21 22 23 24

25 26 27 28 29 30 31

October 2010

S M T W T F S

1 2

3 4 5 6 7 8 9

10 11 12 13 14 15 16

17 18 19 20 21 22 23

24 25 26 27 28 29 30

31

November 2010

S M T W T F S

1 2 3 4 5 6

7 8 9 10 11 12 1 3

14 15 16 17 18 19 20

21 22 23 24 25 26 27

28 29 30

August 2010

S M T W T F S

1 2 3 4 5 6 7

8 9 10 11 12 13 14

15 16 17 18 19 20 21

22 23 24 25 26 27 28

29 30 31

September 2010

S M T W T F S

1 2 3 4

5 6 7 8 9 1 0 11

12 13 14 15 16 17 18

19 20 21 22 23 24 25

26 27 28 29 30


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26

Marketing Program: The Roadshow

Opportunity for company to articulate story and investment opportunity face-to-face withinvestors

U.S. Roadshow:

810 days, with approximately 100+ one-on-one meetings

International Roadshow:

24 days, with approximately 2050 one-on-one meetings

Investors prepare for meeting by reading the offering prospectus, having discussions withresearch analysts and salespeople prior to meeting management

Critical focus on MD&A and analysis of comparable companies

Most sophisticated investors and institutions wil l spend time building earnings and valuationmodels to test investment thesis

Market environment plays critical role in investment appetite

Critical juncture in deal process

Investors ask everything required to make an informed investment decision

III.IPO

EXECUTION

Marketing the Company


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27

The Roadshow Presentation

Company and Underwriters will develop the roadshow presentation during the weeks fol lowinginitial filing with the SEC, and while awaiting the first round of SEC comments

Key components of a roadshow presentation:

Tagline or mission statement

Brief overview of Company

Description of the market opportunity

Highlights of Company strategy

Discussion of products/services and product/service roadmap

Discussion of customers, design wins, partners, etc.

Overview of competition and competitive differentiation/barriers to entry

Review of historical financial results and projected financial model (i.e., gross margins,operating expenses as a % of revenues, operating margin, net margin)

Roadshow presentation should be approximately 25 minutes long

Critical to leave plenty of time during roadshow meetings for investor Q&A

Company management and Underwriters will rehearse roadshow presentation and Q&A numerous

times in advance of actual roadshow

III.IPO

EXECUTION

Elements of the Roadshow Presentation


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28

Illustrative Roadshow Schedule and Targeted Accounts

III.IPO

EXECUTION

7X7 Asset Mgmt.Artis Capital Mgmt.Ascend CapitalCapital Research GlobalCavalry Asset Mgmt.Crosslink CapitalFarallon Capital Mgmt.Franklin AdvisersJ&W SeligmanPalo Alto InvestorsPartner Fund Mgmt.Passport CapitalRCM CapitalRS Investment Mgmt.Security Global Investors

San Francisco

Alkeon Capital Mgmt.AllianceBernstein Capital Mgmt.Balyasny Asset Mgmt.BlackRock AdvisorsCastlerock Mgmt.CaxtonChilton InvestmentsClearBridge AdvisorsColumbus CircleDE ShawDeutsche Asset Mgmt.Duquesne Capital Mgmt.Federated KaufmannFred Alger Mgmt.FrontPoint PartnersGeorge Weiss AssociatesGilder, Gagnon, Howe & Co.Goldman Sachs Asset Mgmt.Highbridge Capital Mgmt.ING InvestmentsIntrepid Capital Mgmt.J. & W. Seligman & Co.Jennison AssociatesJP Morgan Asset Mgmt.Kingdon Capital Mgmt.Lord AbbettMaverick CapitalMoon Capital Mgmt.

Morgan Stanley Investment Mgmt.Neuberger BermanNorthern TrustOch-Ziff Capital Mgmt.OppenheimerFundsPalisade Capital Mgmt.Royce & AssociatesS.A.C. CapitalSchroder Investment Mgmt.Straus Asset Mgmt.TIAA-CREFTudor InvestmentsUBS Global Asset Mgmt.Visium Asset Mgmt.Weiss Multi-Strategy AdvisersYork Capital Mgmt.Ziff Asset Mgmt

New York Area

Boston

Adage CapitalAlydar CapitalBlackRock AdvisorsBoston PartnersColumbia Mgmt.Constitution ResearchCopper Rock Capital PartnersEaton Vance Mgmt.Essex Investment Mgmt.Evergreen Investment Mgmt.Fidelity Mgmt. & ResearchFortis Private Investment Mgmt.

Grantham, Mayo, Van OtterlooLee Munder InvestmentsLoomis SaylesMFC Global Investment Mgmt.MFS Investment Mgmt.Putnam Investment Mgmt.Sirios Capital Mgmt.State Street Global AdvisorsThe Boston Company Asset Mgmt.Vinik Asset Mgmt.Wellington Mgmt.Westfield Capital Mgmt.

Arrowpoint

Denver Investment AdvisorsJanus Capital Mgmt.Marsico Capital Mgmt.Platte River CapitalWasatch AdvisorsWells Capital Mgmt.

Denver/Salt Lake City

AIG Sun America Asset Mgmt.Capital GuardianCapital InternationalCapital WorldEvolution Capital Mgmt.Jacaranda PartnersNicholas-Applegate Capital Mgmt.PRIMECAP Mgmt.TCW Asset Mgmt.Wall Street Associates

Los Angeles/San Diego

Aberdeen Asset Mgmt.Blackrock AdvisorsChartwell Inv. PartnersColumbia PartnersDelaware Investment AdvisersFederated Investment Mgmt.Friess AssociatesLegg Mason Fund AdvisorsRedstone InvestmentsSands Capital Mgmt.T. Rowe Price AssociatesTurner Investment Partners

Mid-Atlantic

American CenturyArbor Capital Mgmt.Artisan PartnersCalamos AdvisorsCastleark Mgmt.Citadel Investment GroupColumbia WangerCortina Asset MgmtDriehaus Capital MgmtFAF AdvisorsM&I Investment Mgmt.

Midwest

Magnetar FinancialNext Century GrowthNorthern TrustOberweis Asset Mgmt.Peregrine Capital Mgmt.RiverSource InvestmentsSegall Bryant HamillSkylands Capital LlcThrivent Investment Mgmt.UBS OConnorWilliam Blair

Note: Bold denotes top Cowen recommended accounts.

Columbia Mgmt.Mazama Capital Mgmt.Rainier Investment Mgmt.Roxbury Capital Mgmt.Tygh Capital

Seattle/Portland

AIM Mgmt. GroupAmerican Century Investment Mgmt.BrazosHighside Capital Mgmt.Kornitzer Capital Mgmt.Security InvestorsVan KampenWaddell & Reed Investment Mgmt.

Texas/Kansas City

Preliminary Roadshow

Day 1 New York Mgmt Presentations/1x1 Mtgs

Day 2 Frankfurt/London 1x1 Mtgs

Day 3 London 1x1 Mtgs/Group Lunch

Day 4 Mid-Atlantic 1x1 Mtgs

Day 5 Boston 1x1 Mtgs/Group Lunch

Day 6 New York 1x1 Mtgs

Day 7 New York 1x1 Mtgs/Group Lunch

Day 8 KC/ Denver 1x1 Mtgs

Day 9 San Franc isco 1x1 Mtgs/Group Lunch

Day 10 Portland/L.A. 1x1 Mtgs

Day 11 Chicago/Minneapolis 1x1 Mtgs

(Conference calls will be scheduled as needed)


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Selected Targeted Institutions in Europe

U.K. and Ireland

AegonBallie GiffordIgnis Asset Mgmt.Martin CurrieScottish Widows

Scotland

Bank of Ireland Asset Mgmt.BloxhamEagle StarIrish LifePioneerSetanta

Ireland

Aerion Fund Mgmt.AXA FramlingtonBaringsBAE SystemsBlackrock Investment Mgmt.British Airways Pension Inv Mgmt.Cheyne CapitalEcofin LtdF&C ManagementFirst State InvestmentsGartmore Investment Mgmt.GLG PartnersGuinness AtkinsonHenderson

Insight Investment Mgmt.Kuwait Investment OfficeLegal and GeneralNeptune Investment Mgmt.Newton Investment Mgmt.Pictet Asset Mgmt.Polar Capital PartnersRCM CapitalSAC CapitalSmith and Williamson Asset Mgmt.Threadneedle Asset Mgmt.

London

Aureo GestioniBipemme SGRBPU UbibancaEurizon

Italy

APG InvestmentsDelta Lloyd/Cyrte InvestmentsING GroepInterpolisRobeco

The Netherlands

Benelux Region

Dexia SAINGKBC Asset Mgmt.

Brussels

Bank Julius Baer

Credit Suisse Asset Mgmt.Lombard Odier Darier Hentsch CieSAM Sustainable Asset Mgmt.UBS Global Asset Mgmt.

Switzerland

Scandinavia

Lannebo FonderManticoreSEB Wealth Mgmt.Swedbank Robur

Sweden

Bank Invest Asset Mgmt.Carnegie Asset Mgmt.Danske BankNordea Investment Mgmt.Norges Bank Investment Mgmt.

Denmark

DnBNOR Asset Mgmt.

Norway

Allianz Global InvestorsDWS Investment GmbHDEKA Investment GmbHINVESCO Kapitalanlage GmbHMetzler InvestmentsUnion Investment GmbH

Germany

III.IPO

EXECUTION

Note: Bold denotes top Cowen recommended accounts.


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Illustrative Roadshow Example

Summary Statistics

III.IPO

EXECUTION

# Of RoadshowDays:

11

# of Cities: 12

# of One-on-Ones/Two-on-Ones:

56

# of Conference

Calls:

13

# of Three-on-Ones/GroupMeetings:

5


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Marketing: Attack the Market to Create Excitement and Demand

Work extensively with management on roadshow presentation

Compelling story

Effective graphics

Comfortable and convincing voice-over

Robust Q&A prep

Institutional sales memo

Pertinent deal information

Sales points and positions

Anticipate investor questions

Management teach-in

Educate salesforce Preview of anticipated Q&A

Net roadshow

Deal captain teach-in

Complements analyst teach-in with the investor hooks

Real-time adjustment to positioning based on feedback

Targeting effort

Identify top prospects

Communicate aggressively

Strategic design ofroadshow Shape roadshow to tap every pocket of demand

Schedule cities to generate early order momentum and buzz

Feedback loop to management

Leverage proprietary Cowen insight and senior-level relationships to drive anchor orderconversion

Develop and capitalize on demand tension

Strategic messaging to investors during roadshow

Find investors who will drive price

The Issuers story will be

well received by

institutional investors, but it

will not sell itself

Growth funds

Tech specialists

Small cap specialists

GARP funds

Long-term oriented hedge funds

III.IPO

EXECUTION


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Pricing and Allocation of Shares

Registration statement declared effective following clearance of SEC comments

Shortly before pricing, Underwriters conduct final bring down due dil igence call with Companymanagement

Pricing call occurs shortly after being declared effective by the SEC

Changes in offering size or price:

Depending on the magnitude of changes, those changes may need to be fi led as anamendment with the SEC and approved before proceeding with the offering

Execution and delivery of Underwriting Agreement

Printing and distribution of Final Prospectus

III.IPO

EXECUTION

Pricing Considerations

Allocation Considerations

Allocations made by the bookrunner of the transaction

Bookrunner utilizes allocations as a tool to ensure strong aftermarket performance of the stock,acting in both the issuers and investors best interests

Through allocations, bookrunner controls the institutional, retail and geographic distribution of theoffering

Allocates investors based on the following criteria:

Quality of institution

History of long-term holding and continued aftermarket interest in both previous IPOs and

comparable companies

Timing of order

Size of order

Anticipated aftermarket demand

Bookrunner utilizes allocation to ensure strong aftermarket performance of the share

Allocations that seed investors

Reduces supply in aftermarket, stimulates aftermarket buying

Investor confidence in aftermarket price and liquidity

The Bookrunners CapitalMarkets team will be the

source of pricing and

allocation advise as well as

a liaison between

management and the

salesforce


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Aftermarket Support Key Ingredients

StrongAftermarket

Support

Create a liquid two-way marketfor shares of the company

Capital commitment

Provide investors with readyliquidity for their investment(increases or decreases)

Sales and Trading

Provide regular flow ofinformation on country, sectorand the company to investors

Sponsor and organizeroadshow presentations for thecompany to update investorson ongoing developments

Investor Relations

Creation of excess demand anda large syndicate short positionthrough overallotment creates demand in theaftermarket

Repurchasing of shares fromthe Market

Stabilization

Continue regular publication ofresearch reports and meetings/conference calls with investors,

updating them on the company Provide company with ongoing

feedback from investors

Monitor the research effort ofsyndicate members duringoffering process and in theaftermarket

Research

III.IPO

EXECUTION


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Over-Allotment Option Overview

Leaves underwriters with a 750,000 share short position

Stock trades above deal price: underwriters buy 750,000 shares from the issuer at deal price up

to 30 days after trade date (i.e. demand greater than supply)

Over-allotment option proceeds are delivered to the issuer

Stock trades below deal price: underwriters use the 750,000 share short position to stabilize the

stock (i.e. demand less than supply buy stock in the open market as buyer of last resort)

Over-allotment option proceeds are not delivered to the issuer

Stock trades around deal price: underwriters may use a portion of the 750,000 share short

position to buy over-allotment shares from the issuer at deal price (i.e. demand equal to supply)

Over-allotment proceeds may be delivered to the issuer

III.IPO

EXECUTION

Post pricing of the initialpublic offering, market

conditions and other factors

create three options

available to the underwriter

to support the issuer

Post Pricing

At Pricing

Pricing Call: Underwriters Buy 5,000,000 Shares

Allocations: Underwriters allocate 5,750,000 shares at deal price (includes 15% over-allotment option)

Settlement (T+3): Underwriters pay for 5,000,000 shares from company

Documents

Iflr Webinar Ipos-2