GLOBAL ALTERNATIVE ASSET MANAGEMENT CASE STUDY How Carlyle Creates Value Deep industry expertise. Global scale and presence. Extensive network of Operating Executives. And a wealth of investment portfolio data; we call it The Carlyle Edge. These are the four pillars of Carlyle’s value creation model. By leveraging these core capabilities and resources—Carlyle has established a 25-year overall track record of investing in companies, working to make them better and serving our investors’ needs. Tapping Carlyle’s operational expertise and network, an internationally acclaimed visual effects company expanded its global footprint and implemented a focused strategy to drive long-term growth. About The Mill and the Transaction AT A GLANCE In partnership with the company’s founders, Carlyle purchased Mill Digital Media Limited (The Mill) in February 2007. Carlyle exited its investment in April 2011 Mill Digital Media Limited through a sale to Barclays Private Equity. During Carlyle’s ownership, The Mill pro- duced high-end visual effects and moving image advertising content for consumer Industry: Telecommunications & Media and corporate brands for all video channels, and created high-end visual effects Region/Country: United Kingdom solutions for television, feature films and the video game industry. As of April 2011, The Mill employed approximately 625 creative professionals and operated out Fund: Carlyle Europe Technology Partners, L.P. of three important global advertising hubs: London, New York and Los Angeles. During Carlyle’s four years of ownership, revenues at the company nearly doubled Acquired: February 2007 and headcount increased by 172%. Status: Exited Key Value Creation Metrics • Invested in new product and service lines, including digital/interactive, video games and direct brand relationships. • Increased revenues from £40 million in 2006 to £74 million in 2010, main- taining profit margins in excess of 20% (despite the global recession). • Increased headcount from 230 to 625 employees, a 172% increase. • Strengthened the management team with a new Finance Director and head of a key business unit. • Utilized the One Carlyle global network to establish a direct local presence in Los Angeles and Singapore and to position the company for further expan- sion into Brazil, China and India. THE CARLYLE GROUP 1001 PENNSYLVANIA AVENUE, NW WASHINGTON, DC 20004-2505 202-729-5626 WWW.CARLYLE.COM Expanding the Company’s Customer Proposition With Carlyle’s investment and support, The Mill achieved a key strategic objective 40% growth by expanding its core visual effects offering to include all aspects of digital video XX lorem content creation, management and distribution. The Mill offered customers a full The Mill’s Los Angeles office, menu of tailored solutions: supporting the development of creative ideas; directing whichDunt vulputpat opened in augiam, 2007, exeros live action film shoots; adapting core content for different markets and geogra- generateddolortie minim annual duisi growth blaore of tie phies; developing high-end video content for the internet and other interactive 40%te dolorper as of June sequis 2010, aut firmly verilla channels; and distributing finished work to broadcasters, internet sites and retail positioningaugait lor inis the er office accum as aquis major outlets. nos non ulput augiam, velenim revenue generator. As of April In particular, The Mill enhanced product distribution by focusing on its proprietary 2011,veraesecte North venim America iriure accounted dolore global video content distribution capability called “Beam.” Through this tool, forexerit 42% lummy of group nonsequat. revenue. The Mill provided video content (in any format) to screens anywhere in the world. Developed by The Mill, Beam also included a digital asset management system for storing and sharing video content that was used to monitor and manage produc- tion workflow. ABOUT THE CARLYLE GROUP Establishing Long-Term Client Relationships The Carlyle Group (NASDAQ: CG) is a global Since it was founded in 1990, The Mill has built strong relationships with a broad alternative asset manager with $170 billion of range of global and local advertising agencies, covering both traditional and assets under management across 113 funds interactive digital advertising channels. These clients provide a solid revenue base and 67 fund of funds vehicles as of December 31, 2012. Carlyle’s purpose is to invest wisely for The Mill and, in 2010, around 85% of total revenues came from repeat clients. and create value on behalf of our investors, The Mill also developed and formalized its relationships with other client groups, many of whom are public pensions. Carlyle including well known brand owners (such as Unilever and Reckitt Benckiser), televi- invests across four segments – Corporate Private Equity, Real Assets, Global Market sion production companies and video game publishers. Strategies and Solutions – in Africa, Asia, Through the One Carlyle network, Carlyle introduced The Mill and its capabilities Australia, Europe, the Middle East, North America and South America. Carlyle has to some of its branded portfolio companies, including Dunkin’ Brands, Hertz and expertise in various industries, including: philosophy. aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, technology & business Building The Mill’s Presence in Los Angeles services, telecommunications & media With an increasingly global client base, The Mill identified the need to build a and transportation. The Carlyle Group presence on the West Coast of North America as a key strategic initiative. With employs 1,400 people in 33 offices across six continents. support and investment from Carlyle, the company opened its Los Angeles office in 2007. The Mill selectively migrated management and creative talent from Set forth herein is a selected case study that Carlyle believes illus- trate its ability to create value at, and improve the performance London to Los Angeles, where local visual effects professionals were also recruited of, its portfolio companies. The performance of these portfolio companies is not necessarily indicative of the performance of all of and integrated into the business. In 2010, the Los Angeles office delivered annual Carlyle’s portfolio companies. The information provided herein is for informational purposes only and is not and may not be relied revenue growth of 43%, establishing it as a significant player in its local market and on in any manner as advice or as an offer to sell or a solicitation of an offer to buy interests (the “Interests”) in any fund or other as a significant revenue generator for The Mill. As of April 2011, eight years after product sponsored or managed by T.C. Group, L.L.C. or any of its affiliates (together, “Carlyle”). Any such offer or solicitation shall The Mill opened its first North American office in New York, its combined North only be made pursuant to a final confidential private placement memorandum (as amended and/or restated from time to time) American operations accounted for approximately 42% of total revenue. and the applicable fund’s subscription documents, which will be furnished to qualified investors on a confidential basis at their request for their consideration in connection with such offering. .