Flexible Packaging Association

The Financing and M&A Environment for the Packaging Industry

Tim WildingCIBC World Markets Corp.

212-856-6783

2

Agenda

> Macroeconomic Environment

> Financing Markets

> M&A Market

> Summary Conclusions

Macroeconomic Environment

4

Macroeconomic Environment – Executive Summary

> The packaging industry has proved relatively recession resistant

> Eventual economic recovery will support improved unit growth particularly in industrial end markets

> One of the more significant near and medium term issues will be raw material prices

> We have seen dramatic resin price increases so far this year

• This is a reaction to record oil and gas prices – but importantly it is more than just a short term phenomenon

5

GDP Trends

-2

0

2

4

6

8

01.Q1 01.Q3 02.Q1 02.Q3 03.Q1 03.Q3-2

0

2

4

6

8

Real GDP Annualized Growth Unemployment Rate

% %

average GDP growth during unemploymentstability 1999-2000

Forecast

Source: CIBC World Markets

6

Consumer Spending> Consumer spending continued to grow in 2002 driving

economic growth

-2

0

2

4

Employment/Payrolls

RealDisposable

Income

PersonalConsumption

Canada US

y/y % chg (as of '02:Q3)

Source: CIBC World Markets

7

Borrowing Against Home Equity

0

6

12

18

MortgageRefinancing

Home EquityLoans

Total

Increase since Jan 2000$ Bn

> Personal consumption and consumer vitality have been underwritten by the real estate market

Source: Equifax, CIBC World Markets

8

Capital Spending

30

40

50

60

70

80

90

Nov-96 May-98 Nov-99 May-01 Nov-02

Orders Non-Defence Cap Goods (ex aircft)

Machinery/equip sales + bus construction

$bn

> The industrial economy is not as good looking

Source: CIBC World Markets

9

Raw Material Pricing – The Big Picture

> Raw material prices will provide a significant challenge

$0.25

$0.30

$0.35

$0.40

$0.45

$0.50

$0.55

Q1'00

Q2'00

Q3'00

Q4'00

Q1'01

Q2'01

Q3'01

Q4'01

Q1'02

Q2'02

Q3'02

Q4'02

Q1'03

Q2'03

Q3'03

Q4'03

Q1'04

Q2'04

Q3'04

Q4'04

Q1'05

Q2'05

Q3'05

Q4'05

Q1'06

Q2'06

Q3'06

Q4'06

Q1'07

Q2'07

Q3'07

Q4'07

$/l

bs.

Polypropylene Polyethylene, Low Density

Polyethylene, Linear Low Density (Butene) Polyethylene, Linear Low Density (Octene)

Polyethylene, High Density

We have seen a significant rise in resin prices as we

start 2003

Pricing cycle should peak in

2005

The summer of '02 saw a run up in prices due to double digit growth as

inventories were re-built

Source: CMAI

10

Capacity Utilization Rates Drive Resin Pricing

0.0

2.0

4.0

6.0

8.0

10.0

12.0

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 20060

10

20

30

40

50

60

81% 83% 82% 86% 82% 75% 74% 79% 86% 91% 90%

LLDPE Production LLDPE Price %= utilizationLLDPE Capacity

Source: CMAI

Case Study - LLDPE

> Pricing is expected to peak in 2005

11

Raw Material Pricing – Current Environment

> Record oil and gas prices

> Capacity shutdown

> No significant new resin capacity on the horizon

> Several years of trough market conditions for resin suppliers

> Management under pressure

RESULT = SIGNIFICANT RESIN PRICE INCREASES

12

Raw Material Pricing – Current Environment

> 2003 has seen a series of resin price increases

> Resin producers are in no position to compromise

Price Increases (cents/lb)

+3-5+3+3+3Polypropylene

+5+6+5--Polyethylene

+5*+1¾+2¼--Ethylene

3/032/031/0312/02

*Announced by Equistar

Financing Markets

14

Financing Markets – Executive Summary

> M&A activity in the packaging sector will be largely dependent on continued access to the capital markets

> Approximately 75% of all rated U.S. packaging issues are non-investment grade

> The sector has performed exceptionally well in 2002 in both the debt and equity markets

> 2002 was a year of improving credit quality

> We have seen significant recent financing activity in the bank, bond and equity markets

> The markets are open and receptive to packaging credits and equity stories

15

S&P Commentary

> “Amid sluggish economic indicators across the world and concerns about a slowdown in consumer spending in the U.S., the packaging sector has remained rather buoyant, reflecting therelatively recession-resistant nature of food, beverage, and consumer product end markets.”

> Highlights:• In 2002, the median corporate credit rating was restored to

2000 levels of 'BB-', from 'B+' in 2001• 2002 saw fewer defaults and rating downgrades• 65% of rated U.S. companies now have stable or positive

outlooks • Pactiv Corp. and Printpack Inc. were upgraded, the first sign

of positive rating activity since 1999

Improving Credit Profile For The Packaging Industry In 2002

16

Interest Rates Are At Near Record Lows,…

0.0 %

1.0 %

2.0 %

3.0 %

4.0 %

5.0 %

6.0 %

7.0 %

8.0 %

9.0 %

2/19

/93

8/19

/93

2/19

/94

8/19

/94

2/19/9

5

8/19/9

5

2/19/9

6

8/19/9

6

2/19

/97

8/19

/97

2/19

/98

8/19

/98

2/19

/99

8/19

/99

2/19

/00

8/19

/00

2/19

/01

8/19

/01

2/19

/02

8/19

/02

2/19/0

3

Inte

rest

Rate

s

LIBOR 10 Year Treasury 30 Year Treasury

17

…However Credit Spreads Have Trended Upwards

220 225 230

253 255

300 300 305

275 275

325

293306

319

220

250 253

335

313

298

328

295

315

355

400

338

383

333335342342

333

306300

338

335

258

344

340

359

313

263

383

367

394385

350

330340

355

285

270

400

425

400

367

383388

368 370360

275278

150.0

200.0

250.0

300.0

350.0

400.0

450.0

FYE9

71Q

982Q

983Q

984Q

981Q

992Q

993Q

994Q

991Q

002Q

003Q

004Q

001Q

012Q

013Q

014Q

011Q

022Q

023Q

024Q

02

Bas

is P

oints

ove

r LI

BO

R

BB BB/B B

Source: Loan Pricing Corp.

> Historical Bank Term Loan B Pricing

18

The Leveraged Loan Market Has Changed

Leveraged Loan Investors> Over the past six years, the

traditional lending market has split into two distinct markets

> Both markets have very different lending objectives

• Pro rata lenders are generally focused on both relationship development with the borrower in order to create additional fee generating business and return on investment

• Institutional lenders are strictly focused on return on investment

Loan Market Characteristics Then and Now

Institutional Market(Term Loan B, etc.)

Mutual FundsMoney ManagersInsurance CompaniesFinance Companies

Pro Rata Market

(Revolving Credit & Term Loan A)

U.S. Money Center Banks

U.S. Regional Banks

“Old” Loan Market “New” Loan Market> Opaque (information closely held)

> No credit ratings or third-party research

> Club lending with specialized credit knowledge

> Negotiated or “relationship” pricing

> Bank plays both intermediary and investor roles

> “Buy and hold” lenders

> Documentation and distribution protocols unique toagent bank

> $20 MM minimum assignments required

> Transparent (information widely available)

> Credit ratings, independent data and research

> Numerous investors (institutional majority)

> Competitive pricing with comparative pricingand MTM information available

> Intermediary and investor roles more distinct

> Portfolio theory and secondary trading used tomanage portfolios

> Standardized instruments and establishedtrading protocols

> $1 MM or smaller assignment sizes widespread

19

Syndicated Loan Volume In The U.S.

66163 186

81 101 135194

273 320 310218

265

227

298

354 228200

301

637195

123 150

254 312

511

463

440

552

368

491

561

810

678

$137

$284$333

$241 $234

$375 $389

$665

$817

$888

$1,112

$872

$1,017

$1,196

$1,107

$969

2158 40 28

17

43

4442

11 47 58 4158

1017

25

64

12

15

25

16

823

1717

79

1742

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

($ b

illion

s)

Leveraged Debt Repayment Specialty Finance General Corporate

Source: Loan Pricing Corp.

> 2002 saw a reduction in loan volume from the previous year

20

Leveraged Loans – Current Market Conditions

> Strong demand for senior secured assets is driving a robust bank market in 2003

> Investors have good liquidity due to:

• Repayments resulting from recent High Yield issuance, and

• Fewer bank transactions during November and December

> Ten collateralized loan obligation vehicles ("CLO"s) are in the process of ramping-up, which will provide further liquidity to the loan market

> Improving secondary levels have driven more favorable pricing for primary issuers

> A number of new transactions have reduced pricing following retail syndication due to strong demand

> Several of these transactions were oversubscribed within two days of launch due to the perceived strength of the issuer

• Houghton Mifflin, Fisher Scientific, Central Parking, Casella Waste, Jack-in-the-Box

> Smaller transactions are more challenging and don’t have access to the institutional market

21

Recent Packaging Bank Loans

Company Date Rating Amount Price Type Purpose Investment Grade: Bemis Jan-03 A $215.0 L+35 Revolver Corp. Purp. Sonoco Products Jul-02 A- $450.0 L+37.5 Revolver Corp. Purp. Sealed Air Mar-01 BBB $375.0 L+125 Revolver Corp. Purp. Pactiv Jan-03 BBB $265.0 L+100 Revolver Corp. Purp.

Non- Investment Grade:

Crown Cork & Seal In Market B $550.0 $500.0

L+400 L+425

Revolver Term-B

Refinance

Silgan Container In Market BB- $10.0 L+200 Term-B Add-on Graham Packaging Jan-03 B $150.0

$695.0 L+325 L+325

Revolver Term-B

Refinance

Atlantis Plastics Dec-02 NR $35.0 $35.0 $40.0

L+375 L+375 L+425

Revolver Term-A Term-B

Refinance

Ball Corp. Dec-02 BB+ $500.0 $250.0 $350.0 $300.0

L+200 L+200 L+225 L+250

Revolver Term-A Term-B Term-C

Acquisition

ConStar Int. Nov-02 BB- $100.0 $150.0

L+300 L+450

Revolver Term-B

IPO Related

Berry Plastics Jul-02 B+ $100.0 $330.0 $50.0

L+275 L+300 L+275

Revolver Term-B Term-C

LBO

Printpack Mar-02 BB $100.0 $100.0 $200.0

L+275 L+275 L+275

Revolver Term-A Term-B

Refinance

Source: CIBC World Markets

22

U.S. High Yield Bond Market

$39

$64

$34$41

$64

$110

$140

$103

$50

$91

$68

$13

$0

$20

$40

$60

$80

$100

$120

$140

$160

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003YTD

($ b

illio

ns)

Source: CIBC World Markets

> 2003 YTD issuances are 32% ahead of the level this time last year

23

The Packaging Industry Was The Top Performing Sector In The U.S. High Yield Market In 2002

-40.0

-30.0

-20.0

-10.0

0.0

10.0

20.0

Tran

sportat

ion

UTILI

TIES

Cable

TECH

& TE

LECO

M

Tech

nolog

y

Wire

line

HY IN

DEX

Wire

less

Energ

y

Healt

hcare

Food

& Bev

erage

Finan

cial

Metals & Mini

ng

Div.

Manufa

cturin

g

CONS

UMER

Media

Consum

er Pro

ducts

INDU

STRIAL

Chem

icals

Busin

ess S

ervice

sBu

ilding Au

to

Gaming

, Lod

ging

Pape

r & Fo

rest

Retail

Packag

ing

Hig

h Y

ield

Bond R

eturn

s %

Source: Commscan DebtDesk

24

High Yield – 2002 Overview And Current Conditions

> Corporate mismanagement and evidence of a slower-than-expected economic recovery resulted in volatile capital markets in late-June/August

• 11 week string of outflows from High Yield mutual funds ($2.5B)

• Primary issuance in the High Yield market slowed dramatically

> November/December saw net High Yield mutual fund inflows of $4.4B

> Investors remain focused on liquidity, ~95% of the total 2002 U.S. High Yield issuance were more than $150.0M in proceeds

> Transactions for smaller companies (i.e. <$100M of EBITDA) were well received in 2002

• 68 transactions priced, with total proceeds of $10.8B

> Positive investor sentiment during Q4 2002 carried over into 2003

• High cash levels combined with a lack of offerings in the secondary market resulted in strong primary demand

• 40 transactions have priced for aggregate proceeds of $12.8 billion year-to-date

• This pace is 32% ahead of the same period in 2002

> For smaller issues there is an active and vibrant private placement market as an alternative to the High Yield bond market

25

Significant Recent Bond Issuance By The Packaging Industry

2/15/12

6/01/10

6/01/09

6/15/10

7/01/12

7/15/12

11/01/12

12/15/12

3/01/13

3/01/11

3/01/11

8/15/08

11/15/13

1/15/33

1/15/13

Maturity

Investment Grade:

4.875%$250.0A1/14/03Avery Dennison

6.000%$150.0A1/14/03Avery Dennison

6.500%$250.0A-10/30/01Sonoco Products

6.500%$250.0A8/07/01Bemis

High Yield:

10.250%$306.1B+2/11/03Crown Cork & Seal

9.375%

13.000%

9.000%

12.750%

8.375%

10.750%

11.000%

6.875%

10.875%

9.500%

Coupon

$155.0

$100.0

$200.0

$40.0

$400.0

$250.0

$175.0

$300.0

$725.0

$1,085.0

Amount

B2/06/02Kloeckner Pentaplast

B-4/05/02Pliant Corporation

B4/23/02Silgan Holdings

B-5/01/02Tekni-Plex

B6/19/02Stone Container

B-7/17/02Berry Plastics

B11/15/02Constar International

BB12/05/02Ball Corp.

B2/11/03Crown Cork & Seal

B+2/11/03Crown Cork & Seal

RatingIssue DateCompany

26

Equity Market Overview

21.3 x

16.9 x

970.4

1,570.4

7,908.3

1997

28.0 x

15.6 x

1,229.2

2,192.7

9,181.4

1998

19.6 x29.4 x24.3 x29.7 xS&P 500 P/E

12.6 x15.0 x10.3 x14.2 xPackaging Index 1

P/E

879.81,148.11,320.31,469.3S&P 500

1,335.51,950.42,470.54,069.3NASDAQ

8,341.610,021.510,786.911,497.1Dow Jones Industrials

2002200120001999(as of December 31)

1Packaging Index consists of AEP Industries, Amcor, Applied Extrusion, AptarGroup, Atlantis Plastics,Avery Dennison, Ball, Bemis, CCL, Crown Cork & Seal, Huhtamaki, Intertape Polymer, Pactiv, Pechiney,Owens-Illinois, Sealed Air, Silgan Holdings, Sonoco Products and Winpak.

> The equity market has now returned to 1997 levels

27

Packaging Equities Significantly Outperformed The S&P 500 In 2002

60

70

80

90

100

110

120

130

2/19/99 8/2/99 1/11/00 6/21/00 11/30/00 5/11/01 10/22/01 4/2/02 9/11/02 2/20/03

Index

ed P

rice

s

S&P 500 Packaging Composite

Packaging Composite consists of AEP Industries, Amcor, Applied Extrusion, AptarGroup, Atlantis Plastics,Avery Dennison, Ball, Bemis, CCL, Crown Cork & Seal, Huhtamaki, Intertape Polymer, Pactiv, Pechiney,Owens-Illinois, Sealed Air, Silgan Holdings, Sonoco Products and Winpak.

The packaging sector starts to outperform the S&P 500

28

Equity Market – 2002 Overview And Current Conditions

> In 2002, 79 IPOs priced raising $25B

> IPOs in 2002 outperformed the broader equity markets

• Average Day 1 performance +9%

• Average Offer to current performance +3%

> The IPO market in 2003 has been relatively slow with only 4 deals raising $880M to date

• 3 IPOs priced the week of February 10th raising $284M

> 384 Follow-on offerings raised $69B in 2002

• Follow-ons priced in 2002 traded down 11% from their offer price, compared to the Nasdaq Composite which was down 32% for the year

> 38 Follow-on offerings have priced 2003 YTD raising $6B

• 4 Follow-on offerings priced the week of February 17th raising $207M

> Shelf filings remain a significant percentage of total filings

> The current equity backlog consists of 19 deals

29

Recent Packaging Industry Equity Issuance

(Filed) $250.0IPOPendingGraham Packaging

$144.0IPO11/14/02Constar International

AmountType of SecurityDateCompany

Constar Case Study

> Description: Constar was a 100% carve-out IPO from Crown Cork & Seal a manufacturer of PET and HDPE plastic containers, metal and plastic closures and health and beauty care packaging

• Crown Cork & Seal did not retain any ownership in Constar

> Offering was downsized from $136.5M to $126.0M

> Filing range was $14.00 - $16.00

> Priced at $12.00 per share, a 20% discount to the filing range midpoint of $15.00

• Currently trading at $7.94, a loss of 33.8% since pricing

30

Canadian Income Funds – An Alternative IPO Market?

> Tax efficient structure for distributing cash to investors seeking stable and predictable cash flows

> Can result in premium valuations, value based on yield of pre-tax cash flow

> Market currently comprised of 93 funds• Aggregate market capitalization of ~C$43 billion

> Recently gained popularity among retail and institutional investors• Low interest rate environment• Demand for conservative, income generating investments• Improving business fundamentals: growing distributions• Increased investor vigilance regarding corporate governance

> C$6.9 billion issued in 2002 - 29 IPOs and 32 follow-on offerings as compared to C$4.4 billion issued in 2001 - 8 IPOs and 50 follow-on offerings

> Significant pipeline of new issuance> CIBC World Markets is the market leader in income fund underwriting,

trading and research and has developed a U.S. product

31

Canadian Income Fund Candidate Characteristics

> Stable historical and forecasted operating net cash flows

> Strong market position

> No major corporate events or industry changes anticipated

> Low and predictable capital expenditure requirements

> Modest growth opportunities

> Strong sponsorship

> Conclusion: Many packaging companies meet these characteristics

M&A Market

33

M&A Market – Executive Summary

Drivers Of M&A Activity In The Packaging Industry:

> Push towards further consolidation

• Economies of scale

• Product offering

• Customer focus

> Economic recovery

> Improved credit profile

> Access to capital markets

> Healthy public market valuations

> Active buyer universe, including private equity funds

34

Global M&A Market Overview

> Activity has slowed significantly from a peak in 1999

Source: SDC

$553 $660

$1,119

$1,882

$2,780

$3,767

$1,936

$1,253$1,291

$4,283

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Volu

me i

n B

illion

s

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Nu

mb

er

of

Tra

nsa

ctio

ns

Volume in Billions Number of Transactions

35

Packaging Industry Global M&A Market Overview

Source: SDCExcludes deals < $25 million.

> 2002 saw a rebound in the value of M&A transactions in the packaging industry

$2,212

$9,661 $9,889

$7,928$7,391

$4,544

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

1997 1998 1999 2000 2001 2002

Volu

me i

n M

illion

s

0

4

8

12

16

20

24

28

32

36

40

Nu

mb

er

of

Tra

nsa

ctio

ns

Volume in Millions Number of Transactions

36

Flexible Packaging M&A Transactions

> Recent transactions have been completed in the 6.0 - 7.0x EBITDA range

Trans. Val. / Year Acquirer Target Trans. Val. Revenue EBITDA EBIT

($ mil.)Pending Alcan VAW Packaging (FlexPac) $345 0.5x 6.9x NA2003 Rock-Tennessee Cartem Wilco 65 1.1 6.9 NA2002 Alcoa Ivex 790 1.2 7.9 13.0x2002 Bemis Walki Films (UPM-Kymmenee) 69 0.6 6.0 NA2001 Amcor Danisco Flexible Packaging 306 0.6 6.8 NA2001 Cinven Pentaplast Group (Klockner-Werke) 925 1.1 7.0 NA2001 SCA Tuscarora 284 1.1 6.2 10.4 2000 Mail-Well American Business Products 334 0.7 NA NA2000 Chase Equity Partners Pliant (Huntsman Packaging) 1,070 1.3 NA NA2000 Bemis Viskase 226 1.5 NA NA2000 Pechiney International JPS Packaging 44 0.5 4.3 NA2000 Sealed Air Dolphin Packaging 118 1.4 6.6 NA2000 MY Holdings Low & Bonar 120 0.7 9.4 NA1999 Candover Clondalkin 515 0.8 6.5 9.0 1999 Tenneco Amoco Plastic Container 310 1.1 7.2 NA1998 Investor Group KNP BT (Packaging) 1,700 1.2 9.7 13.7 1998 Sealed Air Cryovac Packaging (W.R. Grace) 5,000 2.7 NA NA1998 Huntsman Packaging Blessings 270 1.5 NA NA1998 Huhtamaki Sealright 226 0.9 9.8 NA

Mean 1.1x 7.2x 11.5xMedian 1.1 6.9 11.7

37

Public Market Valuations

LTM EBITDA Margin

0%

5%

10%

15%

20%

25%

PTV SEE Winpak BMS AVY ITP AETC AGH AEPI

Average: 15.1%

> Public values are highly correlated to EBITDA margin

> Transactions in the 6.0 – 7.0x EBITDA range should be accretive to earnings

> The 3 year average FV/LTM EBITDA multiple is 7.9x

FV / LTM EBITDA

0.0x

3.0x

6.0x

9.0x

12.0x

AVY Winpak AETC SEE BMS PTV ITP AEPI AGH

Average: 7.8x

38

Significant Financial Buyer Interest In The Sector

> Many other private equity firms are looking for a platform investment in the packaging industry

> Rationale:• Relatively recession resistant• Good cash generators• Industry consolidation

Pentaplast GroupCinven

Atlantis Plastics, Jet Industries, PlasseinTrivest

ClondalkinCandover

AEP IndustriesKKR

Dor Chemicals (acquired Trespaphan, OPP Films)Bain Capital

Berry PlasticsGoldman Sachs

Consolidated ContainerVestar

Packaging Corp. of America (with Pactiv)Madison Dearborn

Graham PackagingBlackstone

Tekni-PlexWeston Presidio

Berry Plastics, Pentaplast Group, Pliant, etc. JPMorgan Partners

Kranson IndustriesCode Hennessy

Portfolio Company / InvestmentPrivate Equity Fund

39

Anatomy Of A 2003 Packaging LBO

> Minimum equity contribution 30%

> Total debt / EBITDA 4.5–4.75x

• Maximum bank debt / EBITDA 2.75x

• Non-bank debt / EBITDA 1.75–2.0x

> Targeted IRR Minimum 25%

> Exit 3-5 years

> Exit alternatives: trade sale, IPO, re-capitalization or income fund

> Ideal candidate is a platform for add-on acquisitions

2003 LBOs are more conservatively structured than the halcyon years of the late 1980’s

40

Average Debt Multiples Of Highly Leveraged Loans

4.7

3.4 3.42.6 2.7

3.3 3.5 3.6 3.5 3.3 2.92.2 2.4 2.4 2.6

4.1

3.53.3

2.0

2.4 2.5 2.5 1.92.3 2.1

1.71.2

1.2

1.5 1.4 1.3 1.2

8.8

6.7

5.0 5.2 5.3 5.2

5.8 5.7

4.5

3.7 3.8 3.8

2.83.7

3.7*4.0*

5.3*5.3*

7.1*

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

1987 1988 1989 1990 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 3Q02 4Q02

Bank Debt/EBITDA Non-Bank Debt/EBITDA

Criteria: Pre-1996: L+250 and Higher; 1996 to Date: L+225 and Higher; Media and Telecom Loans Excluded. There were too few deals in 1991 to form a meaningful sample.

* Represents rounding errorsSource: Portfolio Management Data

> Highly leveraged loans are now less leveraged!

41

Average Equity Contribution To Leveraged Buyouts

3.3% 3.5% 4.1% 3.9% 5.5% 2.7% 4.2%

7.0%9.7%

13.4%

20.7%22.0%

25.2% 26.2%23.7%

30.0%31.6%

35.7%37.8%

40.6% 40.0% 40.9% 41.0%

1.9%

22.9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1987 1988 1989 1990 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 3Q02 4Q02

Equity

as

a P

erce

nt

of

Tota

l Sourc

e

Rollover Equity Contributed Equity

> Equity includes common equity and preferred stock as well as holding company debt and seller note proceeds downstreamed to the operating company as common equity; Rollover Equity prior to 1996 is not available; There were too few deals in 1991 to form a meaningful sample.

Source: Portfolio Management Data

> As mentioned, we have come a long way from the thinly capitalized structures of the late 1980’s

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M&A/LBO Case Study - Clondalkin Group

Company is currently for saleStrategic and financial buyers are interested

2003 Exit

Revenue and EBITDA have grown from €595M and €75M to €708M and €90M respectively. Clondalkin acquired EPH in April 2001. (2001 EBITDA contribution=€14M)

Since Private

September 1999: Candover & Clondalkin Group made a cash offer of €9.10 per share (€487.5M total), a premium of 30.0% to the average share price for the three months prior to announcement. This represented a multiple of approximately 6.5x EBITDATransaction was financed with approximately 23.1% equity and levered at 5.0x EBITDA. (Senior Bank=3.4x; Mezzanine=1.6x)

Going Private/LBO

Previously listed on the Dublin Stock Exchange. The stock traded from €4.8 to €10.0 over the two years prior to the LBO

Background

European manufacturer of flexible packaging and specialty packaging. ~45% of sales are from plastic/polymer based products, with paper and paperboard-based products accounting for ~35% and foils/coatings the remaining

Description

Summary Conclusions

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Summary Conclusions

> The industry has proved relatively recession resistant

> Renewed economic growth will provide a positive boost

> Raw material price increases will remain a near and medium term challenge

> The capital markets are open and receptive to packaging transactions

> M&A activity is likely to accelerate

Flexible Packaging Association

The Financing and M&A Environment for the Packaging Industry

Tim WildingCIBC World Markets Corp.

212-856-6783

FPA’s 2003 Annual Meeting