IPOM

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IPO/MAWarren Henson Managing DirectorGreen
Manning BunchFebruary 17, 2005
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Green Manning Bunch

• Established in 1988
• Middle-market focused, with transactions ranging
  from 10-500 million
• Offices in Denver and Phoenix
• 20 transaction and staff professionals

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Green Manning Bunch

• The senior professionals combined have over 150
  years of transaction experience and have
  completed more than 200 investment banking
  transactions with an aggregate value of close to
  15 billion
• Services include
• - Mergers and acquisitions advisory
• - Private placements of equity and debt
• - General financial advisory services
• GMB is a registered broker-dealer under the
  Securities Exchange Act of 1934, and is a member
  firm of the National Association of Securities
  Dealers, Inc. (NASD)

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Initial Public Offering
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IPO IPO Dollar Value
Source Renaissance Capitals IPOhome.com
(2/14/2005)
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IPO YTD - 2004 vs 2005

• In addition, there are currently 91 registered
  IPOs, although it is difficult to predict how
  many will actually complete their IPO

Source Renaissance Capitals IPOhome.com
(2/14/2005)
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2004 IPO Activity by Industry

• The 2004 market for health care IPOs equaled 25
  of deal volume

Materials 5
Energy 5
Financial 30
Transportation 5
Technology 10
Consumer 10
Communications 10
Health Care 25
Source Renaissance Capitals IPOhome.com
(12/31/2004)
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Historical IPO Activity
Source Renaissance Capitals IPOhom.com
(12/31/2004)
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2004 Biotech IPO Activity

• A number of biotech IPOs performed poorly in 2004
• Approximately 26 biotech IPOs in 2004
• Several came to market at discounted prices to
  their original proposed ranges

Source Renaissance Capitals IPOhome.com
(12/31/2004)
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2004 Medical Devices IPO Activity

• IPOs for medical device firms performed well in
  2004
• Approximately 18 medical devices IPOs in 2004
• Despite some losers, most medical device IPOs
  posted impressive returns

Source Renaissance Capitals IPOhome.com
(12/31/2004)
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2004 IPO Size and Returns

• Medical device IPOs performed better than biotech
  IPOs in 2004

Source Renaissance Capitals IPOhome.com
(2/15/2004)
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The IPO Dream
Source CartoonStock.com
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Mergers Acquisitions
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MA Market

• The MA market improved in 2004 due to the
  following reasons
• Financial buyers remain active and aggressive in
  the MA Market
• Private equity (PE) firms have approximately 100
  Billion available for investments
• Higher leverage multiples and aggressive
  financing packages Private equity sponsors have
  been able to achieve higher levels of leverage
  not seen since 1999
• Private Equity Firms have been able to exit
  investments due to improvements in the IPO
  market, aggressive interest from other PE firms
  and strategic buyer participation

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MA Market

• The MA market improved in 2004 due to the
  following reasons
• Strategic buyers have returned and are creating
  extremely competitive auction processes due to
  the following factors
• Improvements in the economy and stock market have
  caused selected strategic buyers to aggressively
  pursue acquisitions
• Demand for growth is pressuring companies to seek
  external opportunities
• Strength in the capital markets is giving
  companies readily available access to financing

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Merger Activity1991 - 2004
Source Securities Data Corporation
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Number of MA Transactions by Size
Source Mergerstat (12/31/2004)
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EBITDA Multiplesfor deals sizes 50-500 Million
8.1x
7.8x
7.0x
6.6x
6.7x
6.3x
Source Securities Data Corporation
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2004 U.S. MA Activity by Industry
Source Mergerstat (12/31/2004) Dollar Amounts
in Billions
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Controlled Auction Process
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MA Idea Stage
Source CartoonStock.com