welcome you to our webcast: M&A Market Review

and welcome you to our webcast: M&A Market Review

Introduction Moderator: Mary Kathleen Flynn senior editor The Deal LLC

Expert Panel Mark Brady global head of M&A William Blair & Co. LLC

Expert Panel Richard Lawson managing director Huntsman Gay Global Capital LLC

Expert Panel John Jones Jr. partner Pepper Hamilton LLP

Expert Panel Martyn Curragh U.S. transaction services leader PricewaterhouseCoopers

Favorable fundamentals led to strong M&A activity in first-half 2011, followed by decline in Q3 run rate • Relatively modest increase in deal volume • Significant increase in deal value

Megadeal activity fueled by corporate or strategic acquirers • Increase in deal size driven by PE buyers • Corporate divestitures continue to be key component of dealflow

Average deal value 369 340 301 242 229 233 $ Millions Source: Thomson Reuters/PricewaterhouseCoopers

Deal volume 12,069 11,368 10,072 8,098 8,684 8,739 Source: Thomson Reuters/PricewaterhouseCoopers

Pressures coming to bear on M&A • Continuing economic downturn • Private equity fundraising cycle • Supply vs. demand • Debt markets

Trends in M&A • Vendor due diligence (quality-of-earnings reports, environmental reports) • Third-party commercial due diligence

AUDIENCE POLL QUESTION How will M&A activity in 2012 compare to 2011? A) A slightly higher level of activity B) A slightly lower level of activity C) A large increase in activity D) A large decrease in activity E) The level will remain largely the same

Reasons many auctions are failing • Due to tightening of lending markets in second-half 2011, buyers are finding they can’t find financing • Some buyers are walking away because prices are too high, particularly in light of return objectives

More strategic deals vs. private equity • Well-capitalized companies secure financing • Significant cash reserves • Credit increasingly more available

Two major reasons for dramatic upward pricing trend • Excess of cash on balance sheets of strategics • Significant capital overhang—nearly half-a-trillion dollars

Lower midmarket vs. upper midmarket

AUDIENCE POLLING QUESTION What sector will see the greatest level of activity in 2012? A) Healthcare B) Energy C) TechnologyD) Real estate E) Consumer and retail F) Industrials G) Other

Sector spotlight: Healthcare most-active sectors • Long-term care • Medical devices • Hospital and pharma • Physician practices

Deficit reduction plan and its effect on M&A

The impact of 2012 elections on M&A

Near-term outlook

AUDIENCE Q&A

THE DEAL WEBCAST SERIESUpcoming Event Brought to you by The Deal LLC and Conway MacKenzie, this complimentary event, “Bankruptcy and Restructuring Outlook,”on Thursday,Nov. 3, at 2 p.m. ET looks at the biggest trends in the sector. The discussion will include experts Harvey Miller of Weil Gotshal, co-founder of Conway MacKenzie Don MacKenzie and Tiffany Kosch of HIG Capital.

and thank you for joining our webcast.

welcome you to our webcast: M&A Market Review