Schulte Roth & Zabel Private Equity Buyer/Public Target M&A Deal

Schulte Roth & Zabel Private Equity Buyer/Public Target M&A Deal Study 2013-14 Review and Comparative Analysis

Private Equity Buyer/Public Target M&A Deal Study 2013–14 Review and Comparative Analysis

In this edition of the Schulte Roth & Zabel Private Equity Buyer/Public Target M&A Deal Study, we survey private equity buyer acquisitions of U.S. public companies from 2013 to 2014. Focusing on key terms in middle and large market acquisitions valued at over $100 million, we also compare our findings with our previous analysis of transactions from 2010 to 2012. TheDeal Study identifies key market practices and deal trends, and its appendices present additional data that will be helpful to participants in today’s M&A markets.

Table of Contents

Survey Methodology 2

Key Takeaways 3

Market Activity — Number and Value of Transactions 5

Deal Structure — One-Step Merger vs. Two-Step Tender Offer/Back-End Merger 6

Target Fiduciary Duty Issues — “Go-Shop” Provisions 7

Deal Protections for Buyer 8

Deal Certainty Provisions for the Target 13

Appendix A — Surveyed Transactions 17

Appendix B — Marketing Periods 23

Appendix C — Break-Up Fees and Reverse Termination Fees 24

Authors and About SRZ’s Mergers & Acquisitions Group 29

Survey Methodology

This survey was conducted as follows:

• We reviewed the treatment of certain key deal terms in all private equity buyer/public target cash merger transactions entered into during 2013 and 2014 involving consideration of at least $100 million, totaling 42 transactions, which we refer to as “2013–14 Transactions,” divided for purposes of our analysis of certain deal points into the following two groups:

-- Transactions involving consideration of at least $100 million but less than $500 million in enterprise value1 (totaling 18 transactions, which we refer to as “2013–14 Middle Market Transactions”); and

-- Transactions involving consideration of at least $500 million in enterprise value (totaling 24 transactions, which we refer to as “2013–14 Large Market Transactions”).

• We then compared the treatment of such deal terms with the deal terms in similarly sized private equity buyer/ public company-target cash merger transactions entered into between 2010 and 2012 (which we refer to as “2010–12 Transactions,” divided similarly into “2010–12 Middle Market Transactions” and “2010–12 Large Market Transactions”) and, where applicable, set forth detailed analysis of any notable changes in the deal terms.

Please note that (i) the findings of our survey are not intended to be an exhaustive review of all terms in the transactions — instead, we report only on those matters that we believe would be most interesting to the deal community; (ii) our observations are based on a review of publicly available information for the transactions; (iii) the transactions accounted for only a portion of M&A activity during the periods and may not be representative of the broader M&A market; and (iv) our comparative analysis is affected by the data sets not being of the same sample size.

A list of the surveyed transactions can be found in Appendix A.

1 The enterprise values of the 2013–14 Large Market Transactions ranged from $512 million to $28 billion, and the enterprise values of the 2013–14 Middle Market Transactions ranged from $109 million to $395 million.

2 | Schulte Roth & Zabel Key Takeaways

As expected, we continue to observe a “market practice” -- All of the 2013–14 Transactions provided the regarding a number of the key deal terms. buyer with match rights and “last look” match rights. • Deal Structure -- All of the 2013–14 Transactions included a -- Approximately 71% of the 2013–14 “tail provision” that applied in the event the Transactions were structured as one-step merger agreement was terminated under mergers. certain circumstances. -- However, tender offers are becoming -- The target’s break-up fees have grown (on a significantly more prevalent — the two-step mean/median basis): tender offer/back-end merger structure was used in 29% of the 2013–14 Transactions oo For the 2013–14 Large Market Transactions as compared to only 7% of the 2010–12 the mean break-up fee was 3.3% of target Transactions. equity value (median: 3.2%) as compared to 3.1% (median: 3.0%) for 2010–12 Large -- More targets are engaging in pre-signing Market Transactions.4 market checks2 — leading to fewer “go- shop” provisions. “Go-shop” provisions were oo For the 2013–14 Middle Market included in 29% of the 2013–14 Large Market Transactions the mean break-up fee was Transactions and 22% of the 2013–14 Middle 3.5% of target equity value (median: 3.6%) Market Transactions as compared to 47% as compared to 3.3% (median: 3.1%) for of the 2010–12 Large Market Transactions 2010–12 Middle Market Transactions. and 31% of the 2010–12 Middle Market Transactions. • Target Deal Protections oo The “go-shop” periods have shortened. -- Approximately 81% of the 2013–14 In the 2013–14 Transactions, the “go- Transactions (83% of the 2013–14 Large shop” period was on average 33 days Market Transactions and 78% of the 2013-14 (median: 30 days) as compared to 39 Middle Market Transactions) gave the target days (median: 40 days) for the 2010–12 company a limited specific performance Transactions. right that was available only if (i) the buyer’s • Buyer Financing closing conditions to the merger agreement were satisfied; and (ii) the buyer’s debt -- None of the 2013–14 Transactions provided financing was available. the buyer with a financing closing condition. -- The buyer’s reverse termination fees (“RTFs”) -- However, approximately 83% of the 2013–14 have remained consistent — at approximately Large Market Transactions contained 6.5% of the target’s equity value — for the “marketing period” provisions.3 deals with single-tier RTFs. (Note that most • Buyer Deal Protections surveyed transactions used a single-tier RTF structure as compared to a two-tier -- None of the 2013–14 Transactions included a structure.) traditional “force the vote” provision. -- None of the 2013–14 Transactions provided the buyer with a closing condition regarding appraisal rights.

2 For purposes of this Deal Study, we characterized a deal as involving a “pre-signing market check” if the “background of the merger” discussion in the applicable proxy statement or Schedule 14D-9 disclosed that (i) the target solicited interest from at least 25 possible bidders pursuant to an active process prior to execution of the applicable merger agreement; (ii) the target was in discussion with five or more possible bidders without engaging in a broader solicitation of interest; or (iii) the target issued a public announcement to the effect that it was exploring “strategic alternatives.”

3 In the middle market deals, such provisions are considerably more scarce: Only 44% of the 2013–14 Middle Market Transactions contained “marketing period” provisions as 2 compared to 23% of the 2010–12 Middle Market Transactions.

4 3 We note that the transactions with the high (WCA Waste Corporation/Macquarie Infrastructure4 Partners) and low (Quest Software, Inc./Insight Venture Partners) data points for 2010–12 break-up fees are statistical outliers (10.7% and 0.3%, respectively) and have not been included in the calculations above.

Private Equity Buyer/Public Target M&A Deal Study: 2013–14 Review and Comparative Analysis | 3 -- Interestingly, for those deals with a two- -- Uncapped damages for buyers’ “willful tier RTF structure, the higher-tier RTF breach” are becoming exceedingly rare — only has decreased in size (as a percentage of 5% of the 2013–14 Large Market Transactions the target’s equity value) — from 12.0% and 17% of the 2013–14 Middle Market mean/7.2% median for the 2010–12 Large Transactions provided for uncapped damages Market Transactions to 9.2% mean/4.7% in the case of a buyer’s willful breach as median for the 2013–14 Large Market compared to 20% of 2010–12 Large Market Transactions, and from 7.9% mean/9% median Transactions and 42% of 2010–12 Middle for the 2010–12 Middle Market Transactions Market Transactions. to 6.4% mean/6.0% median for the 2013–14 Middle Market Transactions — perhaps converging on the 6.5% single-tier RTF norm.

2013–14 “What’s Market” Summary Guide

Deal Term Large Market Middle Market

One-Step Merger Structure  

“Window Shop” Provision  

“Marketing Period” Provision  

No Financing Condition  

Target Only Has a “Limited Specific Performance” Right  

No Appraisal Rights Closing Condition  

Match/“Last Look” Match Rights  

Mean Target Break-Up Fee 3.3% 3.5%

Use of a “Single-Tier” Buyer RTF Mechanism  5

Mean Buyer RTF (Single-Tier Structure) 6.4% 6.7%

Damages for Buyer Breach Capped at RTF  

Note: Check marks indicate consistency in 75% or more of the relevant deals.5

5 Note that of the surveyed 2013–14 Middle Market Transactions and 2010–12 Middle Market Transactions, 73% and 80%, respectively, used a single-tier RTF structure.

4 | Schulte Roth & Zabel Market Activity — Number and Value of Transactions

As noted in the chart below:

• Overall, the number of announced transactions within our parameters in 2013–14 decreased (on a yearly basis) as compared to 2010–2012 — by 28% for the Large Market Transactions and by 32% for the Middle Market Transactions.

• The deal value, however, increased — from $1.5 billion mean/$956.0 million median for the 2010–12 Large Market Transactions to $4.0 billion mean/$1.0 billion median for the 2013–14 Large Market Transactions, and from $231.3 million mean/$216.9 million median for the 2010–12 Middle Market Transactions to $285.8 million mean/$308.4 million median for the 2013–14 Middle Market Transactions.6

Quarterly Deal Volume and Mean Equity Value

2010-12 Mean Equity Value

2013-14 Mean Equity Value

3.0 Number of Transactions 40 36

) 35 2.5 32

27 30

2.0 25 22 ansactions lue ($ in billions 1.5 20 15 15 1.0

10 Number of Tr

Mean Equity Va .5 5

0 2010 2011 2012 2013 2014

6 We note that the two high data points (Dell Inc./Silver Lake Partners and H. J. Heinz Company/Berkshire Hathaway Inc.) contribute significantly to the difference between the mean and median for 2013–2014 Large Market Transactions.

Private Equity Buyer/Public Target M&A Deal Study: 2013–14 Review and Comparative Analysis | 5 Deal Structure — One-Step Merger vs. Two-Step Tender Offer/Back-End Merger

We reviewed the 2013–14 Transactions to determine Historically, private equity buyers have been reluctant whether they were structured as one-step statutory to use the two-step structure because, among other mergers or two-step tender offer/back-end mergers. things, the margin rules limiting borrowing to 50% of the value of the collateral pledged to secure the Overall, the two-step tender offer/back-end merger loan made it difficult to obtain acquisition financing structure was used more frequently in the 2013–14 to fund the tender offer. Several developments have Transactions than in the 2010–12 Transactions (21% made tender offers more attractive: vs. 7%). In particular, 21% of the 2013–14 Large Market Transactions and 22% of the 2013–14 Middle Market • In 2006, the SEC clarified that the “all holders/ best price rule” (Rule 14d-10 under the Transactions used this structure as compared to 8% of Securities Exchange Act of 1934) does not 2010–12 Large Market Transactions and 5% of the 2010–12 apply to employment compensation, severance Middle Market Transactions. or other employee benefit arrangements that meet certain criteria, which provided comfort Large Market Deals to private equity buyers concerned about the treatment of target management post-closing Seventy-five percent (75%) of the 2013–14 Large Market arrangements. Transactions were structured as reverse triangular The use of the top-up option, which allowed the mergers, and 25% were structured as tender offers. • buyer to ensure that it will reach the ownership In comparison, 82% of the 2010–12 Large Market threshold needed to complete a short-form Transactions were structured as reverse triangular merger, allowed private equity buyers to mergers, and 18% were structured as tender offers. structure financing in a way that navigates the margin rules. Delaware decisions7 have provided Middle Market Deals guidance on properly structuring a top-up option to withstand stockholder litigation. Sixty-seven percent (67%) of the 2013–14 Middle Market Transactions were structured as reverse triangular • Section 251(h) to the Delaware General Corporation Law became effective in August mergers, and 33% were structured as tender offers. 2013 (and was amended in August 2014, In comparison, 77% of the 2010–12 Middle Market clarifying a number of issues in a pro-buyer Transactions were structured as reverse triangular fashion),8 effectively removing the need for mergers, and 23% were structured as tender offers. a top-up option by allowing for a back-end merger to be consummated after a tender offer if, among other requirements, the acquirer owns the amount of target’s stock necessary to adopt the merger agreement (which is typically 50% plus one share, unless the target’s charter or the merger agreement sets a higher threshold), rather than 90% of the target’s stock required prior to adoption of Section 251(h).

• Tender offers can provide an advantage in dealing with stockholder opposition to a transaction. While delay of a stockholder meeting to solicit additional votes in the face of opposition is possible, it is more vulnerable to court challenge. In contrast, a tender offer can easily be extended repeatedly until the minimum tender offer condition is satisfied.

8 7 See Joanne Olson v. ev3, Inc., C.A. No. 5583 (Del. Ch. Feb. 21, 2011) and In re Cogent, Inc. Shareholder Litigation, Cons. C.A. No. 5780 (Del. Ch. Oct. 5, 2010).

8 The August 2014 amendments eliminated the “interested stockholder” exclusion, clarified that shares tendered into a tender offer do not count toward the buyer’s ownership unless they are physically delivered, and confirmed that a merger agreement may permit or require the merger to be effected under Section 251(h).

6 | Schulte Roth & Zabel Target Fiduciary Duty Issues — “Go-Shop” Provisions

We reviewed the 2013–14 Transactions to determine which of them included a “go-shop” provision.

A “go-shop” provision grants the target the affirmative right — during a specified period of time — to solicit alternative acquisition proposals.

“Go-shop” provisions were used significantly less often in 2013–14 Transactions as compared to the 2010–12 Transactions (29% for 2013–14 Large Market Transactions vs. 47% for 2010–12 Large Market Transactions, and 22% for 2013–14 Middle Market Transactions vs. 31% for 2010–12 Middle Market Transactions) as increasingly more targets are engaging in pre- signing market checks. As noted in the “Length of ‘Go-Shop’ Periods” chart:

• The “go-shop” periods have shortened. In 2013–14 Transactions, the “go-shop” period was on average 33 days (median: 30 days) as compared to 39 days (median: 40 days) for 2010–12 Transactions.9

• All 11 of the 2013–14 Transactions with “go-shop” provisions had language that permitted the target board to continue negotiations with an “excluded party” (generally defined as any party that made a written acquisition proposal during the “go-shop” period) without the need for the target board to determine whether the excluded party’s offer constituted, or was reasonably likely to constitute, a superior proposal. In comparison, 78% of 2010–12 Transactions with “go-shop” provisions (29 of 37) contained this language.10

Length of “Go-Shop” Periods

60 2010 Deals 2011 Deals 2012 Deals

40 Mean = 39 days

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40 Mean = 33 days

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9 For the 2013–14 Middle Market Transactions, the mean and median were 35 days and 30 days, respectively (range: 30 days to 50 days), while for the 2013–14 Large Market Transactions both the mean and median were 32 days (range: 14 days to 45 days). For the 2010–12 Middle Market Transactions both the mean and median were 40 days (range: 30 days to 55 days), and for the 2010–12 Large Market Transactions the mean and median were 38 days and 40 days, respectively (range: 21 days to 60 days).

10 In the 2013–14 Transactions, 4 of the 11 “go-shop” provisions with language permitting continued negotiations with an “excluded party” were found in middle market deals (36%), and 7 were in large market deals (64%). In the 2010–12 Transactions, 12 of the 29 “excluded party” provisions were found in middle market deals (41%), while 17 were in large market deals (59%).

Private Equity Buyer/Public Target M&A Deal Study: 2013–14 Review and Comparative Analysis | 7 Deal Protections for Buyer

We reviewed the 2013–14 Transactions for provisions The terms of “last look” match rights were also generally designed to protect the buyer against topping bids and consistent across 2013–14 Transactions and 2010–12 target stockholder opposition. Transactions. All 2013–14 Transactions had “last look” match rights. The range of “last look” match rights was Match Rights and “Last Look” Rights 1 to 5 business days (mean: 2.4 business days; median: 2 business days), which is exactly the same as in the 2010– We reviewed the 2013–14 Transactions to determine 12 Transactions. whether the buyer had initial match rights and “last look” match rights under the merger agreement. “Force the Vote” Provision

Initial match rights provide the buyer with an Similar to the 2010–12 Transactions, none of the 2013–14 opportunity to negotiate with the target board Transactions included a traditional, unqualified “force during a specific period of time after receipt of the vote” (“FTV”) provision. However, use of the limited notice from the target board of an intended change FTV provision increased slightly for 2013–14 Large Market in recommendation (“CIR”) and to propose modified Transactions (50% of which had a limited FTV provision as terms that are sufficiently improved so as to preclude compared to 44% in 2010–12 Large Market Transactions) the target from effecting a CIR. We note that in In re but decreased considerably in 2013–14 Middle Market Smurfit-Stone Container Corp. Shareholder Litigation, Transactions (33% of which had a limited FTV provision as C.A. No. 6164 (Del. Ch. May 20, 2011), Vice Chancellor compared to 59% of 2010–12 Middle Market Transactions). Parsons of the Delaware Chancery Court determined that the deal protections agreed to by the target, An FTV provision requires the target board to submit which included a 3-day initial match right, were the proposed transaction to a vote of its stockholders “standard” whether considered alone or as a group.11 even if the target’s board has made a CIR.

“Last look” match rights provide the buyer with a A traditional FTV requires the target board to do further right to negotiate in the event that the other so unconditionally (even if it receives a superior bidder revises its proposed terms. proposal) and does not permit the target to terminate the merger agreement to accept such superior The terms of the initial match rights were generally proposal. A traditional FTV is a pro-buyer provision consistent across 2013–14 Transactions and 2010–12 because it can discourage other bidders from making Transactions. Of the 2013–14 Transactions: a topping bid, given that the target cannot promptly terminate the agreement to accept a superior • All had initial match rights (similar to 99% of the proposal but must prepare and file with the SEC a 2010–12 Transactions).12 proxy statement and hold its stockholder meeting. • The mean and median of initial match rights This creates delay and potential uncertainty, which were 3.5 business days and 3 business days, can lead bidders to determine that it is not worth respectively,13 which is generally consistent with investing the time and resources to make a topping the initial match rights parameters in the 2010–12 bid. Transactions. By contrast, a limited FTV provision does not prevent the target from terminating the merger agreement to accept a superior proposal and requires the target to hold the stockholder vote on the transaction (despite a CIR) only if the agreement is not so terminated. A limited FTV provision offers little protection to a buyer when the target is terminating the agreement 11 The other deal protection provisions included a “no-shop” clause and a break-up fee to enter into an agreement for a superior proposal, of approximately 3.4% of the target equity value. but may offer some protection to a buyer in the 12 All 2010–12 Large Market Transactions had initial match rights as compared to 98% of context of a CIR for an intervening event that does the 2010–12 Middle Market Transactions. not otherwise give rise to a termination right. 13 For the 2013–14 Large Market Transactions, the mean and median were 3.5 business days and 3 business days, respectively. For the 2013–14 Middle Market Transactions, the mean and median were 3.8 business days and 4 business days, respectively.

8 | Schulte Roth & Zabel Break-Up Fee Payable by the Target As noted in the “Break-Up Fees” charts: • For the 2013–14 Large Market Transactions the We reviewed the 2013–14 Transactions to calculate the mean and median for break-up fees were 3.3% size of the target’s break-up fee (as a percentage of and 3.2% of equity value, respectively, which was equity value) in the event the target chose to terminate slightly higher than 3.1% and 3.0%, respectively, the merger agreement in order to accept a superior for the 2010–12 Large Market Transactions. proposal. • For the 2013–14 Middle Market Transactions the As with other deal protection devices, Delaware mean and median for break-up fees were 3.5% courts have not provided any bright-line rules and 3.6% of equity value, respectively, which was regarding when a break-up fee will be deemed slightly higher than 3.3% and 3.1%, respectively, for unreasonable in amount. Nevertheless, practitioners the 2010–12 Middle Market Transactions. can take comfort that fees in the range of 2.0% to 4.0% of equity value are generally permissible. Delaware jurisprudence, most recently in the In re Cogent Inc. Shareholder Litigation, suggests that equity value may be the appropriate metric for calculating a break-up fee where a target has minimal debt. Conversely, where the buyer is assuming a significant amount of a target’s debt, enterprise value may be the appropriate metric. This difference is illustrated by the 2011 Macquarie/WCA Waste Corporation transaction, which had an enterprise value of $526 million but an equity value of only $154 million because of the target’s significant debt. The Macquarie/WCA transaction had a two-tier break- up fee: $11 million (2.1% of enterprise value and 7% of equity value) payable in the event of termination for entering into an alternative transaction, and $16.5 million (3.2% of enterprise value and 10.7% of equity value) for other specified terminations.

Private Equity Buyer/Public Target M&A Deal Study: 2013–14 Review and Comparative Analysis | 9 Break-Up6% Fees General Mean = 3.1% General Break-Up Fee “Go -Shop” Break-Up Fee “Go-Shop” Mean = 1.8% 5%

4% 2010 Deals 6% General Mean = 3.1% alues General Break-Up Fee “Go -Shop” Break-Up Fee 3% “Go-Shop” Mean = 1.8% 5%

2% 4% % Equity V alues 1% 3%

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alues 6%

5% General Mean = 3.2% 8% 4% 2011 Deals (other than WCA)

% Equity V 3% “Go-Shop” Mean = 1.5% 7%

alues 6%

1% 5% 0% 4% or d elec e-Paid al/Metro Epic Kinetic PPD Pr Rur PRIMEDIA Blackboar epts Tek % Equity V Conc 3% or SRA CKx BJ’s EMSC Immuc Emdeon Blue Coat 99 Cents Only 2% Wholesale

0% or d elec e-Paid al/Metro Epic Kinetic PPD Pr Rur PRIMEDIA Blackboar epts Tek Conc or SRA CKx BJ’s EMSC Immuc Emdeon Blue Coat 99 Cents Only Wholesale

7% 2012 Deals General Mean = 3.1%

6% “Go-Shop” Mean = 2.6%

4% alues

3% 7%

2% General Mean = 3.1%

6% % Equity V “Go-Shop” Mean = 2.6% 1%

5% 0% e om e oup .c ar 4% ys – Quest e Collectiv MModal estry n Edelman Talbots Mediw FirstCity ar ands TPC Gr Anc atio Br Duff & Phelps Financial Financialtion alues he Pep Bo Softw Corpor oup Informationems ra T y, Moe & Jack Gr Syst olf o erline Par TNS ch aMed Corpo Mann Int eutical Deltek egr 3% eat W P.F. Chang's ands eResear Int oung Westway Gr Br Benihana Y tions oup Resorts China Bistr Pharmac Technology America va Gr Companies Inno

2% % Equity V

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6% General Mean = 3.3% General Break-Up Fee “Go -Shop” Break-Up Fee “Go-Shop” Mean = 1.8% 5%

4% alues

2% % Equity V

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3% 6% General Mean = 3.5% 2% “Go-Shop” Mean = 1.5% 5% % Equity V

1% 4% alues

0% 3%

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4% alues

2% % Equity V

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4% alues

2% % Equity V

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General Mean = 3.2% 8% 6% General Mean = 3.1% “Go-Shop” Mean = 1.5% 7% General Break-Up Fee “Go -Shop” Break-Up Fee “Go-Shop” Mean = 1.8% 5%

alues 6%

alues 5%

3% 4%

% Equity V 2% 3% % Equity V

1% 2%

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alues 6%

% Equity V 3%

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4% alues

2% % Equity V 7% 1% General Mean = 3.1% 6% “Go-Shop” Mean = 2.6% 0% 5% e om e oup .c ar ys – Quest e Collectiv MModal estry n Edelman Talbots Mediw FirstCity ar ands TPC Gr Anc atio 4% Br Duff & Phelps Financial Financialtion he Pep Bo Softw Corpor oup Informationems ra Talues y, Moe & Jack Gr Syst olf o erline Par TNS ch aMed Corpo Mann Int eutical Deltek egr 3% eat W P.F. Chang's ands eResear Int oung Westway Gr Br Benihana Y tions oup Resorts China Bistr Pharmac Technology America va Gr Companies Inno 2% % Equity V

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6% General Mean = 3.3% General Break-Up Fee “Go -Shop” Break-Up Fee “Go-Shop” Mean = 1.8% 5% 6% 2013 Deals General Mean = 3.3% General Break-Up Fee “Go -Shop” Break-Up Fee “Go-Shop” Mean = 1.8% 5% 4% alues 4%

alues 3% 3%

2% 2% % Equity V % Equity V

1%1%

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6% General Mean = 3.5% “Go-Shop” Mean = 1.5% 5% 2014 Deals 6% General Mean = 3.5% 4%

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2%4% alues % Equity V

1%3%

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Private Equity Buyer/Public Target M&A Deal Study: 2013–14 Review and Comparative Analysis | 11 Given a wide range of fees and deal sizes, we grouped the 2013–14 Transactions by deal size and noted the range of break-up fees (as a percentage of deal size). We note that the break-up fees as a percentage of equity value on a mean/ median basis did not decrease as deal size increased. In fact, the highest break-up fees on a mean basis were in the $1-billion to $3-billion range.14

Deal Size Break-Up Fees14 (Equity Value) Range Mean Median

2013–14 Middle Market Transactions

$100 Million – $250 Million 2.3% – 4.4% 3.6% 3.7%

$250 Million – $500 Million 1.0% – 5.5% 3.4% 3.2%

2013–14 Large Market Transactions

$500 Million – $1 Billion 2.1% – 4.0% 3.3% 3.5%

$1 Billion – $3 Billion 3.0% – 5.5% 3.9% 3.5%

$3 Billion and Above 1.9% – 4.0% 2.9% 3.0%

14 Figures are based on a percentage of equity value.

12 | Schulte Roth & Zabel Deal Certainty Provisions for the Target

We reviewed the 2013–14 Transactions for certain Middle Market Deals provisions that are intended to provide the target with additional certainty of closing. Similarly, the vast majority (94%) of the 2013–14 Middle Market Transactions gave the target specific performance rights, with a limited specific performance provision Target’s Ability to Obtain Specific Performance used in 78% of the deals, and a full-specific performance Against the Buyer provision used in 17% of the deals.16 This is consistent with the data from the 2010–12 period: 83% of the 2010–12 We reviewed the 2013–14 Transactions to determine the Middle Market Transactions gave the target specific specific performance rights afforded to the target. Each performance rights, with limited specific performance had at least a limited specific performance remedy (i.e., provisions used in 38% of the deals, and full specific no deal allowed the buyer to walk away by simply paying performance provisions used in 45% of the deals.17 a reverse termination fee). Set forth below is a chart showing the type of specific The limited specific performance remedy is a performance remedy available to the target in the 2013-14 provision which conditions the target’s ability surveyed transactions. to force the buyer to close on the buyer’s debt financing being available at closing. Target Specific Performance Rights — Cumulative Large Market Deals 2013 Transactions and 2014 Transactions Eighty-three percent (83%) of the 2013–14 Large Market Transactions provided the target with a limited specific performance right against the buyer, and 17% provided the target with a full specific performance right. These findings are consistent with recent trends, with limited specific performance rights becoming overwhelmingly more popular: 88% of the 2010–12 Large Market Transactions provided the target with specific performance rights (with a limited specific performance provision used in 82% and full specific performance used in 6% of the deals).15

15 The remaining 12% of the 2010–12 Large Market Transactions had no specific performance provision.

16 The figures for limited specific performance and full specific performance do not total 94% due to rounding. The remaining 6% of the 2013–14 Middle Market Transactions had no specific performance provision. 16 17 The remaining 17% of the 2010–12 Middle Market Transactions had no specific performance provision. 17

Private Equity Buyer/Public Target M&A Deal Study: 2013–14 Review and Comparative Analysis | 13 Reverse Termination Fees With respect to the size of the RTFs: We reviewed the 2013–14 Transactions to analyze the For transactions with a single-tier RTF, the structure (single-tier vs. two-tier) and the size of the • mean and median were 6.4% and 6.3% of target RTFs (expressed as a percentage of the target’s equity equity value, respectively (range: 4.3% to 8.0%), value) required to be paid by the buyer in connection as compared to 6.4% and 6.2% (range: 0.5% to with the termination of the merger agreement. 10.7%) for the 2010–12 Large Market Transactions.

• For transactions with a two-tier RTF: A two-tiered RTF structure is typically used to afford additional deal certainty to the target by requiring -- The mean and median for the lower-tier the buyer to pay a higher RTF if the buyer willfully RTF were 3.4% and 2.1% of equity value, breaches the merger agreement or if antitrust respectively (range: 1.0% to 7.2%), as approval for the deal is not obtained. compared to 5.4% and 3.7% (range: 1.1% to 15.2%) for the 2010–12 Large Market Transactions. In general, the buyer’s RTFs have remained consistent — at approximately 6.5% of the target’s equity value — for -- The mean and median for the higher-tier RTF the deals with single-tier RTFs. (Note that most surveyed (which in all but one of these transactions was transactions used a single-tier RTF structure as compared triggered by the buyer’s willful breach)18 were to a two-tier structure.) 9.2% and 4.7%, respectively (range: 3.1% to 19.8%), as compared to 12.0% and 7.2% (range: Interestingly, for those deals with a two-tier RTF structure, 4.5% to 37.9%) for the 2010–12 Large Market the higher-tier RTF has decreased in size (as a percentage Transactions (in each case, also triggered by of the target’s equity value) — from 12.0% mean/7.2% the buyer’s willful breach). median for the 2010–12 Large Market Transactions to Middle Market Deals 9.2% mean/4.7% median for the 2013–14 Large Market Transactions, and from 7.9% mean/9% median for the • Eighty-three percent (83%) of the 2013–14 Middle 2010–12 Middle Market Transactions to 6.4% mean/6.0% Market Transactions (15 of 18) had RTFs (as median for the 2013–14 Middle Market Transactions — compared to 63% for the 2010–12 Middle Market perhaps converging on the 6.5% single-tier RTF norm. Transactions), of which:

Below is a summary of our findings. -- Seventy-three percent (73%) (11 of 15) had single-tier RTFs, as compared to 80% for the Large Market Deals 2010–12 Middle Market Transactions.

• Ninety-two percent (92%) of the 2013–14 Large -- Twenty-seven percent (27%) (4 of 15) had Market Transactions (22 of 24) had an RTF (as two-tier RTFs (as compared to 20% for the compared to 100% for the 2010–12 Large Market 2010–12 Middle Market Transactions), with Transactions), of which: triggering events for the higher-fee tier due to:

-- Eighty-six percent (86%) (19 of 22) had oo Buyer’s willful breach — 2 of the 4 a single-tier RTF (as compared to 80% transactions (50% of the subset). (40 of 50) for the 2010–12 Large Market oo Transactions). Buyer’s failure to consummate the transaction after receiving clearance -- Fourteen percent (14%) (3 of 22) had a under the Hart-Scott-Rodino Act (“HSR”) two-tier RTF (in each case, triggered by — 2 of the 4 transactions (50% of the the buyer’s willful breach) (as compared to subset). 20% (10 of 50) for the 2010–12 Large Market Transactions, in each case, also triggered by the buyer’s willful breach).

18 The higher-tier RTF in the Dell transaction was triggered by a flat buyer breach (the provision does not specify that it has to be willful).

14 | Schulte Roth & Zabel With respect to the size of the RTFs: Reverse Termination Fee Triggers19 • For transactions with single-tier RTFs, the mean We reviewed the 2013–14 Transactions with RTFs to and median were 6.7% and 6.2% of target equity analyze the types of RTF triggers. Below is a summary of value, respectively (range: 2.3% to 14.4%), as our findings. compared to 5.9% and 5.4%, respectively (range: 3.0% to 11.9%), for the 2010–12 Middle Market 2013–14 Large Market Transactions with RTFs Transactions. • In all transactions with an RTF, the RTF was • For transactions with two-tier RTFs: triggered by buyer’s failure to close when -- The mean and median for the lower-tier required to do so for any reason, including a RTF were 3.6% and 3.8% of equity value, financing failure. respectively (range: 1.8% to 5.0%), as • In 86% of the transactions (19 of 22), an RTF was compared to 4.9% and 4.5% (range: 3.4% triggered by the buyer’s material breach of a to 6.9%) for the 2010–12 Middle Market representation, warranty or a covenant in the Transactions. merger agreement.

-- The mean and median for the higher-tier • In 9% of the transactions (2 of 22), an RTF RTF were 6.4% and 6.0% of equity value, was triggered by the failure to obtain respectively (range: 5.2% to 8.0%), as antitrust approval. compared to 7.9% and 9.0% (range: 4.3% to 11.5%) for the 2010–12 Middle Market 2013–14 Middle Market Transactions with RTFs Transactions. With respect to the separate trigger events for the higher-tier RTF, the • In 87% of the transactions (13 of 15), an RTF was ranges were as follows: triggered by the buyer’s failure to close when required to do so for any reason, including a oo In the event of willful breach — 5.2% to financing failure. 8.0% (mean: 6.6%; median: 6.0%); and • In 73% of the transactions (11 of 15), an RTF was oo In the event of buyer’s failure to triggered by the buyer’s material breach of a consummate after receiving HSR representation, warranty or covenant in the clearance — 6.0%. merger agreement.

• None of the transactions had an RTF trigger for Reverse Termination Fees failure to obtain antitrust approval. Treatment of Buyer’s Willful Breach

We reviewed the 2013–14 Transactions to see whether the target’s damages for the buyer’s willful breach were capped and, in the applicable deals with RTFs, whether “willful breach” was defined. We observed a decrease in both the large and middle markets in the number of deals that contained uncapped damages for a buyer’s willful breach:

• Ninety-six percent (96%) of the 2013–14 Large Market Transactions (23 of 24) contained a cap on damages as compared to 80% of the 2010–12 Large Market Transactions; and

• Eighty-three percent (83%) of the 2013–14 Middle Market Transactions (15 of 18) contained a cap on damages as compared to 58% of the 2010–12 Middle Market Transactions.

19 RTF triggers were not tracked in our previous studies; however, due to strong interest from our reader base, we have included data on RTF triggers in this Deal Study and intend to continue tracking such data going forward. 19

Private Equity Buyer/Public Target M&A Deal Study: 2013–14 Review and Comparative Analysis | 15 2013–14 Large Market Transactions with RTFs 2013–14 Middle Market Transactions with RTFs

• In all 22 deals with RTFs (92% of all 2013–14 Large • In 87% of the transactions (13 of 15), damages Market Transactions), damages for the buyer’s for the buyer’s willful breach were limited to the willful breach were limited to the amount of the amount of the RTF. RTF. Of these transactions, 13% (3 of 22) had a • In 13% of the transactions (2 of 15), damages for two-tier RTF, with damages for the buyer’s willful the buyer’s willful breach were uncapped. breach limited to the higher RTF. • “Willful breach” was defined in 3 transactions • In 5% of the transactions (1 of 22), damages for (Globecomm Systems Inc./Wasserstein Partners the buyer’s willful breach were uncapped. III, LP; DFC Global Corp./Lone Star Fund • “Willful breach” was defined in 27% of the VIII (U.S.), L.P.; and Vocus, Inc./GTCR Valor transactions (6 of 22), and the definitions can be Companies, Inc.). All 3 transactions defined categorized as follows: “willful breach” as an act taken with actual knowledge that it would cause a breach of the -- Two of the 6 transactions (EnergySolutions, merger agreement, but without any requirement Inc./Energy Capital Partners II-A, LP and that the act have been taken with the intent to AsiaInfo-Linkage/CITIC Capital Partners) cause a breach. defined “willful breach” to require an act knowingly undertaken with the intent of causing a breach of the agreement.

-- Four of the 6 transactions (PetSmart, Inc./ BC Partners; CEC Entertainment, Inc./Apollo Global Management; TMS International Corp./Pritzker Group; and National Financial Partners Corp./Madison Dearborn Capital Partners) defined “willful breach” as an act taken with actual knowledge that it would cause a breach of the merger agreement, but without any requirement that the act have been taken with the intent to cause a breach.

The definition of “willful breach” used in these deals is generally consistent with Delaware Chancery Court Vice Chancellor Lamb’s definition of a “knowing and intentional breach” in Hexion Specialty Chemicals v. Huntsman Corp., C.A. No. 3841 (Del. Ch. Sept. 29, 2008), holding that a “knowing and intentional” breach means “the taking of a deliberate act, which act constitutes in and of itself a breach of the merger agreement, even if breaching was not the conscious object of the act.” We note that the “knowing and intentional” formulation in Hexion and in these transactions is target-friendly in that it avoids any need to establish that a buyer acted with the intent of breaching the merger agreement, which may be very difficult to prove.

16 | Schulte Roth & Zabel Appendix A — Surveyed Transactions

Large Market Transactions

Target Acquirer Signing Date Enterprise Value Equity Value

PetSmart, Inc. BC Partners, Inc. Dec. 14, 2014 $8,700,000,000 $8,251,138,896 Riverbed Technology, Inc. Thoma Bravo, LLC and Teachers’ Dec. 14, 2014 $3,600,000,000 $3,257,311,428 Private Capital Digital River, Inc. Siris Capital Group, LLC Oct. 23, 2014 $840,000,000 $829,088,546 Tibco Software Inc. Vista Equity Partners Sept. 27, 2014 $4,300,000,000 $3,929,726,184 Compuware Corporation Thoma Bravo, LLC Sept. 2, 2014 $2,500,000,000 $2,303,499,741 Safeway Inc. Albertson’s Holdings LLC and March 6, 2014 $9,400,000,000 $7,557,350,000 a consortium led by Cerberus Capital Management, L.P. CEC Entertainment, Inc. Queso Holdings Inc. Jan. 15, 2014 $1,300,000,000 $946,670,000 The Jones Group Inc. Sycamore Partners, L.P. and Dec. 19, 2013 $2,200,000,000 $1,195,490,000 Sycamore Partners A, L.P. Tellabs, Inc. Marlin Equity III, L.P. and Marlin Oct. 18, 2013 $891,000,000 $891,110,000 Equity IV, L.P. The Active Network, Inc. Vista Equity Partners Fund III, L.P. Sept. 28, 2013 $1,050,000,000 $991,980,000 and Vista Equity Partners Fund IV, L.P. Greenway Medical Technologies, Vista Equity Partners Fund IV, L.P. Sept. 23, 2013 $644,000,000 $644,000,000 Inc. TMS International Corp. F.L.P. Trust #14, P.G. Gigi Trust Aug. 23, 2013 $1,000,000,000 $687,640,000 M, F.L.P. Trust #11, P.G. Tom Trust M and P.G. Tom Trust, business interests of Tom Pritzker and Gigi Pritzker Steinway Musical Instruments, Paulson & Co. Inc. Aug. 14, 2013 $512,000,000 $501,940,000 Inc. rue21, Inc. Apax VIII-A L.P., Apax VIII-B L.P., May 23, 2013 $1,100,000,000 $1,020,830,000 Apax VIII-1 L.P. and Apax VIII-2 L.P. Websense, Inc. Vista Equity Partners Fund IV, L.P. May 19, 2013 $1,000,000,000 $955,750,000 AsiaInfo-Linkage, Inc. CITIC Capital Partners May 12, 2013 $890,000,000 $873,533,148 True Religion Apparel, Inc. TowerBrook Investors III, L.P., May 10, 2013 $835,000,000 $834,840,000 TowerBrook Investors III (Parallel), L.P. and TowerBrook Investors III Executive Fund, L.P. BMC Software, Inc. Bain Capital Fund X, L.P., Golden May 6, 2013 $6,900,000,000 $6,983,740,000 Gate Capital Opportunity Fund, L.P., Westhorpe Investment Pte Ltd, Insight Venture Partners VII, L.P., Insight Venture Partners (Cayman) VII, L.P., Insight Venture Partners VII (Co-Investors), L.P., Insight Venture Partners (Delaware) VII, L.P. and Insight Venture Partners Coinvestment Fund II, L.P.

Private Equity Buyer/Public Target M&A Deal Study: 2013–14 Review and Comparative Analysis | 17 Target Acquirer Signing Date Enterprise Value Equity Value

National Financial Partners Corp. Madison Dearborn Capital April 14, 2013 $1,300,000,000 $1,036,440,000 Partners VI-A, L.P., Madison Dearborn Capital Partners VI- C, L.P. and Madison Dearborn Capital Partners VI Executive-A, L.P. Gardner Denver, Inc. KKR North America Fund XI L.P. March 7, 2013 $3,900,000,000 $3,735,030,000 Hot Topic, Inc. Sycamore Partners, L.P. and March 6, 2013 $600,000,000 $563,870,000 Sycamore Partners A, L.P. H. J. Heinz Company Berkshire Hathaway Inc. and 3G Feb. 13, 2013 $28,000,000,000 $23,407,310,000 Special Situations Fund III, L.P. Dell Inc. Silver Lake Partners III, L.P. and Feb. 5, 2013 $24,400,000,000 $24,302,600,000 Silver Lake Partners IV, L.P. (the Equity Investors) and Michael S. Dell EnergySolutions, Inc. Energy Capital Partners II-A, LP Jan. 7, 2013 $1,220,000,000 $377,990,000 Duff & Phelps Corporation The Carlyle Group, Stone Point Dec. 30, 2012 $665,500,000 $669,120,000 Capital, LLC, Pictet & Cie, Edmond de Rothschild Group TNS, Inc. Siris Partners II, L.P. Dec. 11, 2012 $862,000,000 $528,240,000 Ancestry.com Inc. Permira Funds Oct. 21, 2012 $1,600,000,000 $1,444,980,000 Deltek, Inc. Thoma Bravo, LLC Aug. 26, 2012 $1,100,000,000 $892,050,000 TPC Group Inc. First Reserve Corporation, SK Aug. 24, 2012 $930,000,000 $732,070,000 Capital Partners Par Pharmaceutical Companies, TPG Partners VI, L.P. July 14, 2012 $1,900,000,000 $1,855,300,000 Inc. MModal Inc. One Equity Partners V, L.P. July 2, 2012 $1,100,000,000 $797,240,000 Interline Brands, Inc. GS Capital Partners VI Fund, L.P. May 29, 2012 $1,100,000,000 $832,550,000 and P2 Capital Master Fund I, L.P. P.F. Chang’s China Bistro, Inc. Centerbridge Capital Partners II, May 1, 2012 $1,100,000,000 $1,093,570,000 L.P. Collective Brands, Inc. Blum Strategic Partners IV, May 1, 2012 $2,000,000,000 $1,324,380,000 L.P. and Golden Gate Capital Opportunity Fund, L.P. Quest Software, Inc. Insight Venture Partners VII, March 8, 2012 $2,000,000,000 $1,927,010,000 L.P., Insight Venture Partners (Cayman) VII, L.P., Insight Venture Partners (Co-Investors) VII, L.P., Insight Venture Partners (Delaware) VII, L.P. and Insight Venture Partners Coinvestment Fund II, L.P. Great Wolf Resorts, Inc. Apollo Investment Fund VII, L.P., March 8, 2012 $740,000,000 $262,420,000 Apollo Overseas Partners VII, L.P., Apollo Overseas Partners (Delaware) VII, L.P., Apollo Overseas Partners (Delaware 892) VII, L.P. and Apollo Investment Fund (PB) VII, L.P. The Pep Boys – Manny, Moe & The Gores Group, LLC Jan. 29, 2012 $1,000,000,000 $802,760,000 Jack WCA Waste Corporation Macquarie Infrastructure Partners Dec. 21, 2011 $526,000,000 $154,000,000 II, U.S. L.P. and Macquarie Infrastructure Partners II International, L.P.

18 | Schulte Roth & Zabel Target Acquirer Signing Date Enterprise Value Equity Value

Blue Coat Systems, Inc. Thoma Bravo, LLC Dec. 8, 2011 $1,300,000,000 $1,145,000,000 and Ontario Teachers’ Private Pension Plan Tekelec Siris Capital Group, LLC Nov. 6, 2011 $780,000,000 $777,000,000 99 Cents Only Stores Ares Corporate Opportunities Oct. 11, 2011 $1,600,000,000 $1,561,620,000 Fund III, L.P. and Canada Pension Plan Investment Board Pharmaceutical Product The Carlyle Group and Hellman & Oct. 3, 2011 $3,900,000,000 $3,796,760,000 Development, Inc. Friedman Advisors, LLC Emdeon Inc. Blackstone Capital Partners VI Aug. 4, 2011 $3,400,000,000 $2,202,000,000 L.P. Kinetic Concepts, Inc. Apax Europe VII-A, L.P., Apax July 12, 2011 $6,300,000,000 $5,009,000,000 Europe VII-B, L.P., Apax Europe VII-1, L.P., Apax US VII, L.P., Port- aux-Choix Private Investments Inc. and CPP Investment Board (USRE V) Inc. Immucor, Inc. TPG Partners VI, L.P. July 2, 2011 $2,000,000,000 $1,919,000,000 Blackboard Inc. Providence Equity Partners VI L.P. June 30, 2011 $1,600,000,000 $1,585,000,000 and Providence Equity Partners VI-A L.P. BJ’s Wholesale Club, Inc. Leonard Green & Partners, June 28, 2011 $2,700,000,000 $2,815,000,000 L.P. and CVC Capital Partners Advisory (U.S.), Inc. PRIMEDIA Inc. TPG Partners VI, L.P. May 15, 2011 $525,000,000 $322,330,000 CKx, Inc. Apollo Global Management May 10, 2011 $560,000,000 $509,370,000 Epicor Software Corporation Apax US VII, L.P., Apax Europe April 4, 2011 $976,000,000 $802,080,000 VII-A, L.P., Apax Europe VII-B, L.P. and Apax Europe VII-1, L.P. SRA International, Inc. Providence Equity Partners VI L.P. March 31, 2011 $1,880,000,000 $1,820,670,000 and Providence Equity Partners VI-A L.P. Rural/Metro Corporation Warburg Pincus Private Equity March 28, 2011 $701,000,000 $443,260,000 X, L.P. Emergency Medical Services Clayton, Dubilier & Rice Fund VIII, Feb. 13, 2011 $3,200,000,000 $2,834,450,000 Corporation L.P. Pre-Paid Legal Services, Inc. MidOcean Partners III, L.P., Jan. 30, 2011 $650,000,000 $649,320,000 MidOcean Partners III-A, L.P. and MidOcean Partners III-D, L.P. Jo-Ann Stores, Inc. Green Equity Investors V, L.P. and Dec. 23, 2010 $1,600,000,000 $1,606,280,000 Green Equity Investors Side V, L.P. CPI International, Inc. The Veritas Capital Fund IV, L.P. Nov. 24, 2010 $525,000,000 $331,440,000 Del Monte Foods Company KKR 2006 Fund L.P., Vestar Nov. 24, 2010 $5,300,000,000 $3,820,010,000 Capital Partners V, L.P., Centerview Capital, L.P. and Centerview Employees, L.P. J. Crew Group, Inc. TPG Partners VI, L.P., Green Nov. 23, 2010 $3,000,000,000 $2,781,170,000 Equity Investors V, L.P. and Green Equity Investors Side V, L.P. Syniverse Holdings, Inc. Carlyle Partners V, L.P. Oct. 28, 2010 $2,600,000,000 $2,176,610,000 CommScope, Inc. Carlyle Partners V, L.P. Oct. 26, 2010 $3,900,000,000 $3,053,120,000

Private Equity Buyer/Public Target M&A Deal Study: 2013–14 Review and Comparative Analysis | 19 Target Acquirer Signing Date Enterprise Value Equity Value

American Commercial Lines Inc. Platinum Equity Capital Oct. 18, 2010 $777,000,000 $436,360,000 Partners II, L.P. The Gymboree Corporation Bain Capital Fund X, L.P. Oct. 11, 2010 $1,800,000,000 $1,788,990,000 Internet Brands, Inc. Hellman & Friedman Capital Sept. 17, 2010 $640,000,000 $624,870,000 Partners VI, L.P. Burger King Holdings, Inc. 3G Special Situations Fund II L.P. Sept. 2, 2010 $4,000,000,000 $3,311,660,000 NBTY, Inc. Carlyle Partners V, L.P. July 15, 2010 $3,800,000,000 $3,487,580,000 SonicWALL, Inc. Thoma Bravo Fund IX, L.P. and June 2, 2010 $717,000,000 $636,550,000 Ontario Teachers’ Pension Plan Board inVentiv Health, Inc. Thomas H. Lee Equity Fund VI, May 6, 2010 $1,100,000,000 $910,630,000 L.P. Interactive Data Corporation Silver Lake Partners III, L.P., May 3, 2010 $3,400,000,000 $3,245,320,000 Warburg Pincus Private Equity X, L.P. and Warburg Pincus X Partners, L.P. Protection One, Inc. GTCR Fund IX/A, L.P. April 26, 2010 $828,000,000 $395,840,000 CKE Restaurants, Inc. Apollo Management VII, L.P. April 18, 2010 $1,000,000,000 $693,900,000 DynCorp International Inc. Cerberus Series Four Holdings, April 11, 2010 $1,500,000,000 $1,002,000,000 LLC BWAY Holding Company Madison Dearborn Partners, L.L.C. March 28, 2010 $915,000,000 $447,430,000 infoGroup Inc. CCMP Capital Advisors, LLC March 8, 2010 $635,000,000 $463,230,000 RCN Corporation ABRY Partners VI, L.P. March 5, 2010 $1,200,000,000 $561,400,000

“Enterprise Value” is used primarily in circumstances requiring a business valuation (such as in the acquisition of a target company) and reflects the economic value of a company at a point in time, typically based on an analysis of a company’s earnings or EBITDA multiplied by an appropriate multiple (usually determined based on the company’s industry). The average enterprise value for the 2013–14 Large Market Transactions was approximately $4.8 billion as compared to $1.8 billion for the 2010–12 Large Market Transactions.

“Equity Value,” on the other hand, is a measure of the value of a company’s common equity, typically on a fully diluted basis. Equity value can be expressed as the company’s enterprise value less its outstanding preferred stock and funded debt plus the company’s cash and cash equivalents. The average equity value for targets in the 2013–14 Large Market Transactions was $4.0 billion as compared to $1.5 billion for the 2010–12 Large Market Transactions.

On average, for the 2013–14 Large Market Transactions, the target’s enterprise value was 1.09 times its equity value; with one significant outlier: EnergySolutions, Inc., the enterprise value of which was approximately $1.2 billion, which is more than 3 times greater than its equity of approximately $378 million.

20 | Schulte Roth & Zabel Middle Market Transactions

Target Acquirer Signing Date Enterprise Value Equity Value

MicroFinancial Incorporated Fortress Investment Group LLC Dec. 13, 2014 $147,220,000 $147,218,170 ChyronHego Corporation Vector Capital Management, L.P. Nov. 17, 2014 $114,000,000 $113,513,366 Pike Corporation Court Square Capital Partners Aug. 4, 2014 $383,000,000 $385,043,832 and Mr. J. Eric Pike R.G. Barry Corporation MRGB Hold Co. May 1, 2014 Not Available $238,350,000 Chindex International, Inc. Healthy Harmony Holdings, L.P., April 18, 2014 $438,100,000 $434,290,000 an affiliate of TPG Capital, L.P. Vocus, Inc. GTCR Valor Companies, Inc. April 6, 2014 $351,000,000 $389,500,000 DFC Global Corp. Lone Star Fund VIII (U.S.), L.P. April 1, 2014 $1,175,000,000 $376,620,000 American Pacific Corporation Flamingo Parent Corp. Jan. 9, 2014 Not Available $375,110,000 Arden Group, Inc. TPG Partners VI, L.P. Dec. 20, 2013 $394,000,000 $388,480,000 Innotrac Corporation Sterling Capital Partners IV, L.P. Nov. 14, 2013 $108,610,000 $108,610,000 Anaren, Inc. The Veritas Capital Fund IV, L.P. Nov. 4, 2013 $381,000,000 $273,350,000 Flow International Corporation American Industrial Partners Sept. 25, 2013 $200,000,000 $203,480,000 Capital Fund IV, L.P. and American Industrial Partners Capital Fund V, L.P. Globecomm Systems Inc. Wasserstein Partners III, LP Aug. 25, 2013 $340,000,000 $338,520,000 National Technical Systems, Inc. Aurora Pacific Equity Partners Aug. 15, 2013 $267,000,000 $269,440,000 Inc. Keynote Systems, Inc. Thoma Bravo Fund X, L.P. June 23, 2013 $395,000,000 $385,100,000 Telular Corporation Avista Capital Partners III, L.P. and April 29, 2013 $253,000,000 $225,620,000 Avista Capital Partners (Offshore) III, L.P. Assisted Living Concepts, Inc. TPG Partners VI, L.P. Feb. 25, 2013 $278,000,000 $278,250,000 BioClinica, Inc. JLL Partners Fund VI, L.P. Jan. 29, 2013 $123,000,000 $113,720,000 Westway Group, Inc. EQT Infrastructure II Limited Dec. 20, 2012 $419,300,000 $189,100,000 Partnership FirstCity Financial Corporation Vӓrde Partners, Inc. Dec. 20, 2012 $224,900,000 $108,190,000 Young Innovations, Inc. Linden Capital Partners II LP Dec. 3, 2012 $314,000,000 $319,170,000 Mediware Information Systems, Thoma Bravo Fund X, L.P. Sept. 11, 2012 $195,000,000 $186,930,000 Inc. IntegraMed America, Inc. Sagard Capital Partners, L.P. June 10, 2012 $169,500,000 $168,410,000 The Talbots, Inc. Sycamore Partners Management, May 30, 2012 $369,000,000 $199,080,000 L.L.C. Benihana Inc. Angelo, Gordon & Co., L.P. May 22, 2012 $296,000,000 $291,750,000 Edelman Financial Group Inc. Lee Equity Partners April 16, 2012 $258,000,000 $261,940,000 eResearch Technology, Inc. Genstar Capital, LLC April 9, 2012 $400,000,000 $395,120,000 American Dental Partners, Inc. JLL Partners, Inc. Nov. 4, 2011 $398,000,000 $295,030,000 Renaissance Learning, Inc. Permira Funds Aug. 15, 2011 $455,000,000 $485,120,000 Global Traffic Network, Inc. GTCR, LLC Aug. 2, 2011 $267,000,000 $266,844,900 APAC Customer Services, Inc. One Equity Partners July 6, 2011 $468,500,000 $457,589,700 Ness Technologies, Inc. Citi Venture Capital International June 10, 2011 $307,000,000 $295,654,700 Gerber Scientific, Inc. Vector Capital June 10, 2011 $281,800,000 $276,051,400 California Pizza Kitchen, Inc. Golden Gate Capital May 24, 2011 $470,000,000 $454,850,000

Private Equity Buyer/Public Target M&A Deal Study: 2013–14 Review and Comparative Analysis | 21 Target Acquirer Signing Date Enterprise Value Equity Value

China Fire & Security Group, Inc. Bain Capital Partners, LLC May 20, 2011 $265,500,000 $250,703,400 Nobel Learning Communities, Leeds Equity Partners May 17, 2011 $149,000,000 $124,720,000 Inc. Global Defense Technology & Ares Management LLC March 2, 2011 $315,000,000 $224,160,000 Systems, Inc. Tollgrade Communications, Inc. Golden Gate Capital Feb. 21, 2011 $137,000,000 $132,580,000 Conexant Systems, Inc. Golden Gate Capital Feb. 20, 2011 $300,000,000 $206,070,000 Answers Corporation Summit Partners Feb. 2, 2011 $127,000,000 $85,399,330 RAE Systems Inc. Vector Capital Jan. 18, 2011 $133,900,000 $133,900,000 Playboy Enterprises, Inc. Hugh M. Hefner Jan. 9, 2011 $207,000,000 $207,630,000 Cypress Bioscience, Inc. Ramius LLC and Royalty Pharma Dec. 14, 2010 $255,000,000 $251,470,000 Rewards Network Inc. Equity Group Investments Oct. 28, 2010 $126,000,000 $121,220,000 Thermadyne Holdings Irving Place Capital Oct. 5, 2010 $422,000,000 $209,730,000 Corporation Polymer Group, Inc. Blackstone Group LP and Oct. 4, 2010 $326,200,000 $331,140,000 Blackstone Capital Partners V, L.P. Dynamex Inc. Greenbriar Equity Group LLC Oct. 1, 2010 $237,800,000 $237,940,000 Res-Care, Inc. Onex Partners Sept. 6, 2010 $340,000,000 $389,820,000 Phoenix Technologies Ltd. Marlin Equity Partners Aug. 17, 2010 $152,000,000 $147,490,000 Prospect Medical Holdings, Inc. Leonard Green & Partners, L.P. Aug. 16, 2010 $363,000,000 $180,390,000 Health Grades, Inc. Vestar Capital Partners V, L.P. July 27, 2010 $294,000,000 $250,380,000 Alloy, Inc. ZM Capital, L.P. June 23, 2010 $126,500,000 $138,330,000 Omni Energy Services Corp. Wellspring Capital Management June 3, 2010 $122,000,000 $62,558,490 Virtual Radiologic Corporation Providence Equity Partners May 16, 2010 $294,000,000 $281,634,000 Plato Learning, Inc. Thoma Bravo March 25, 2010 $143,000,000 $136,707,500 Sport Supply Group, Inc. ONCAP March 15, 2010 $170,000,000 $169,690,000 SouthWest Water Company Water Asset Management, LLC March 2, 2010 $427,000,000 $272,736,400 Lodgian, Inc. Lone Star Funds Jan. 22, 2010 $270,000,000 $54,190,000

“Enterprise Value” is used primarily in circumstances requiring a business valuation (such as in the acquisition of a target company) and reflects the economic value of a company at a point in time, typically based on an analysis of a company’s earnings or EBITDA multiplied by an appropriate multiple (usually determined based on the company’s industry). The average enterprise value for the 2013–14 Middle Market Transactions was approximately $260 million, as compared to $275 million for the 2010–12 Middle Market Transactions.

“Equity Value,” on the other hand, is a measure of the value of a company’s common equity, typically on a fully diluted basis. Equity value can be expressed as the company’s enterprise value less its outstanding preferred stock and funded debt, plus the company’s cash and cash equivalents. The average equity value for targets in the 2013–14 Middle Market Transactions was $285 million (or roughly the same as their average equity value), as compared to $231 million for the 2010–12 Middle Market Transactions.

22 | Schulte Roth & Zabel Appendix B — Marketing Periods

30 2013 Deals ays 25

20 Mean = 19 Business Days

Length in Business D 0 he en dner BMC TMS T Telular w oup Gar er e ebsense e he Flo Anar Dell H. J. Heinz Hot v ar True W rue21 way ctiv T den Gr gySolutions Den National een A Ar Softw ernationalGr ork Jones Ener Topic el Int Medical ernational Financial Religion Netw oup Int Partners Appar Gr Technologies

30 2014 Deals ays 25

Length in Business D 0 are C Vocus e CEC o erbed American DF Pik way ibc Pacific T e Riv Safe Compuw ar PetSmart Global ertainment Technology Ent Softw

Private Equity Buyer/Public Target M&A Deal Study: 2013–14 Review and Comparative Analysis | 23 Appendix C — Break-Up Fees and Reverse Termination Fees20

2010 Transactions Appendix C — Break-Up Fees and Reverse Termination Fees20

Break-Up RTF as % of Target Sponsor Break-Up Fee Fee as % of RTF Equity Value Equity RCN Corporation ABRY Partners VI, L.P. $10.0 1.8% $30.0 5.3% $17.5 3.2% infoGroup Inc. CCMP Capital Advisors, LLC $15.8 3.4% $25.4 5.5%

BWAY Holding Madison Dearborn Partners, L.L.C. $5.0 1.1% $5.0 1.1% Company $12.5 2.8% $27.5 6.2% DynCorp International Cerberus Series Four Holdings, LLC $30.0 3.0% $100.0 10.0% Inc. $300.0 29.9% CKE Restaurants, Inc. Apollo Management VII, L.P. $15.5 2.2% $15.5 2.2% $30.9 4.5% Protection One, Inc. GTCR Fund IX/A, L.P. $8.0 2.0% $60.0 15.2% $150.0 37.9% Interactive Data Silver Lake Partners III, L.P., Warburg $120.0 3.7% $225.0 6.9% Corporation Pincus Private Equity X, L.P. and Warburg Pincus X Partners, L.P.

inVentiv Health, Inc. Thomas H. Lee Equity Fund VI, L.P. $27.5 3.0% $55.0 6.0%

SonicWALL, Inc. Thoma Bravo Fund IX, L.P. and Ontario $25.0 3.9% $60.0 9.4% Teachers’ Pension Plan Board NBTY, Inc. Carlyle Partners V, L.P. $53.6 1.5% $98.2 2.8% $214.2 6.1% Burger King Holdings, 3G Special Situations Fund II L.P. $50.0 1.5% Inc. $95.0 2.9% $175.0 5.3% Internet Brands, Inc. Hellman & Friedman Capital Partners $23.0 3.7% $38.0 6.1% VI, L.P.

The Gymboree Bain Capital Fund X, L.P. $30.0 1.7% Corporation $50.0 2.8% $50.0 2.8% American Commercial Platinum Equity Capital Partners II, L.P. $12.0 2.8% $16.0 3.7% Lines Inc. $14.0 3.2% $20.0 4.6%

CommScope, Inc. Carlyle Partners V, L.P. $43.3 1.4% $103.9 3.4% $233.8 7. 7 % Syniverse Holdings, Inc. Carlyle Partners V, L.P. $60.0 2.8% $60.0 2.8% $120.0 5.5% J. Crew Group, Inc. TPG Partners VI, L.P., Green Equity 1.9% Investors V, L.P. and Green Equity $ 2 7. 0 1.0% $200.0 7. 2 % Investors Side V, L.P. $54.0 CPI International, Inc. The Veritas Capital Fund IV, L.P. $13.0 3.92% $22.5 6.8% $15.0 4.53% $27.5 8.3% Del Monte Foods KKR 2006 Fund L.P., Vestar Capital Company Partners V, L.P., Centerview Capital, L.P. $60.0 1.6% $249.0 6.5% and Centerview Employees, L.P $120.0 3.1% Jo-Ann Stores, Inc. Green Equity Investors V, L.P. and $20.0 1.2% Green Equity Investors Side V, L.P. $44.9 2.8% $90.0 5.6%

20 All dollar amounts are in millions. For two-tiered fees, the first number is the lowest tier and the second number is the higher tier.

24 | Schulte Roth & Zabel 2011 Transactions

Break-Up RTF as % of Target Sponsor Break-Up Fee Fee as % of RTF Equity Value Equity

Pre-Paid Legal Services, MidOcean Partners III, L.P., MidOcean $21.5 3.3% $50.0 7. 7 % Partners III-A, L.P. and MidOcean Inc. Partners III-D, L.P.

Emergency Medical Clayton, Dubilier & Rice Fund VIII, L.P. $116.5 4.1% $203.9 7. 2 % Services Corporation

Rural/Metro Warburg Pincus Private Equity X, L.P. $16.9 3.8% $33.8 7. 6 % Corporation SRA International, Inc. Providence Equity Partners VI L.P. and $28.2 1.6% $112.9 6.2% Providence Equity Partners VI-A L.P. $ 47. 0 2.6%

Epicor Software Apax US VII, L.P., Apax Europe $15.0 1.9% $20.0 2.5% Corporation VII-A, L.P., Apax Europe VII-B, L.P. and $40.0 5.0% $60.0 7.5% Apax Europe VII-1, L.P.

CKx, Inc. Apollo Global Management $20.0 3.9% $40.0 7.9%

PRIMEDIA Inc. TPG Partners VI, L.P. $8.0 2.5% $30.0 9.3%

BJ’s Wholesale Club, Leonard Green & Partners, L.P. $80.0 2.8% $175.0 6.2% Inc. and CVC Capital Partners Advisory (U.S.), Inc.

Blackboard Inc. Providence Equity Partners VI L.P. and $49.1 3.1% $106.4 6.7% Providence Equity Partners VI-A L.P.

Immucor, Inc. TPG Partners VI, L.P. $25.0 1.3% $90.0 4.7% $45.0 2.3%

Kinetic Concepts, Inc. Apax Europe VII-A, L.P., Apax Europe $51.8 1.0% $317.2 6.3% VII-B, L.P., Apax Europe VII-1, L.P., Apax $155.4 3.1% US VII, L.P., Port-aux-Choix Private Investments Inc. and CPP Investment Board (USRE V) Inc.

Emdeon Inc. Blackstone Capital Partners VI L.P. $65.0 3.0% $80.0 3.6% $153.0 7.0%

Pharmaceutical Product The Carlyle Group and Hellman & $116.2 3.1% $251.8 6.6% Development, Inc. Friedman Advisors, LLC

99 Cents Only Stores Ares Corporate Opportunities Fund $47.3 3.0% $94.5 6.1% III, L.P. and Canada Pension Plan Investment Board

Tekelec Siris Capital Group, LLC $15.0 1.9% $40.0 5.2% Blue CoatSystems, Inc. Thoma Bravo, LLC and Ontario $39.0 3.4% $73.0 6.4% Teachers’ Private Pension Plan

WCA Waste Macquarie Infrastructure Partners II, $16.5 10.7% $16.5 10.7% Corporation U.S. L.P. and Macquarie Infrastructure Partners II International, L.P.

Private Equity Buyer/Public Target M&A Deal Study: 2013–14 Review and Comparative Analysis | 25 2012 Transactions

Break-Up RTF as % of Target Sponsor Break-Up Fee Fee as % of RTF Equity Value Equity

The Pep Boys – Manny, The Gores Group, LLC $25.0 3.1% $50.0 6.2% Moe & Jack

Great Wolf Resorts, Inc. Apollo Investment Fund VII, L.P., Apollo $5.3 2.0% $20.0 5.7% Overseas Partners VII, L.P., Apollo Overseas Partners (Delaware) VII, L.P., Apollo Overseas Partners (Delaware 892) VII, L.P. and Apollo Investment Fund (PB) VII, L.P. Quest Software, Inc. Insight Venture Partners VII, L.P., Insight $6.3 0.3% $9.0 0.5% Venture Partners (Cayman) VII, L.P., Insight Venture Partners (Co-Investors) VII, L.P., Insight Venture Partners (Delaware) VII, L.P. and Insight Venture Partners Coinvestment Fund II, L.P. P.F. Chang’s China Bistro, Centerbridge Capital Partners II, L.P. $37.0 3.3% $67.4 6.2% Inc.

Collective Brands, Inc. Blum Strategic Partners IV, L.P. and $44.0 3.3% $84.0 6.3% Golden Gate Capital Opportunity Fund, L.P.

Interline Brands, Inc. GS Capital Partners VI Fund, L.P. and P2 $29.9 3.6% $51.3 6.2% Capital Master Fund I, L.P.

MModal Inc. One Equity Partners V, L.P. $28.7 3.6% $57.4 7.2%

Par Pharmaceutical TPG Partners VI, L.P. $48.0 2.6% $119.0 6.4% Companies, Inc.

TPC Group Inc. First Reserve Corporation, SK Capital $19.0 2.6% $45.0 6.2% Partners

Deltek, Inc. Thoma Bravo, LLC $32.1 3.6% $59.6 6.7%

Ancestry.com Inc. Permira Funds $37.8 2.6% $75.6 5.2%

TNS, Inc. Siris Partners II, L.P. $18.7 3.5% $32.0 6.1%

Duff & Phelps Corporation The Carlyle Group, Stone Point $19.9 3.0% $39.9 6.0% Capital, LLC, Pictet & Cie, Edmond de Rothschild Group

26 | Schulte Roth & Zabel 2013 Transactions

Break-Up Fee RTF as % of Target Sponsor Break-Up Fee as % of RTF Equity Value Equity EnergySolutions, Inc. Energy Capital Partners II-A, LP $13.6 3.6% $27.2 7.2%

Dell Inc. Silver Lake Partners III, L.P. and Silver $450.0 1.9% $250.0 1.0% Lake Partners IV, L.P. (the Equity Investors) and Michael S. Dell

H. J. Heinz Company Berkshire Hathaway Inc. and 3G Special $750.0 3.2% $1,400.0 6.0% Situations Fund III, L.P.

Hot Topic, Inc. Sycamore Partners, L.P. and Sycamore $21.0 3.7% $42.0 7.5% Partners A, L.P.

Gardner Denver, Inc. KKR North America Fund XI L.P. $103.4 2.8% $263.1 7.0%

National Financial Madison Dearborn Capital Partners $41.6 4.0% $83.3 8.0% Partners Corp. VI-A, L.P., Madison Dearborn Capital Partners VI-C, L.P. and Madison Dearborn Capital Partners VI Executive-A, L.P. BMC Software, Inc. Bain Capital Fund X, L.P., Golden $210.0 3.0% $420.0 6.0% Gate Capital Opportunity Fund, L.P., Westhorpe Investment Pte Ltd, Insight Venture Partners VII, L.P., Insight Venture Partners (Cayman) VII, L.P., Insight Venture Partners VII (Co- Investors), L.P., Insight Venture Partners (Delaware) VII, L.P. and Insight Venture Partners Coinvestment Fund II, L.P. True Religion Apparel, Inc. TowerBrook Investors III, L.P., $29.2 3.5% $58.4 7.0% TowerBrook Investors III (Parallel), L.P. and TowerBrook Investors III Executive Fund, L.P. AsiaInfo-Linkage, Inc. CITIC Capital Partners $18.0 2.1% $18.0 2.1%

Websense, Inc. Vista Equity Partners Fund IV, L.P. $34.5 3.6% $68.9 7.2%

rue21, Inc. Apax VIII-A L.P., Apax VIII-B L.P., Apax $31.3 3.1% $62.7 6.1% VIII-1 L.P. and Apax VIII-2 L.P.

Steinway Musical Paulson & Co. Inc. $13.3 2.7% $31.1 6.2% Instruments, Inc.

TMS International Corp. F.L.P. Trust #14, P.G. Gigi Trust M, F.L.P. $26.0 3.8% $45.1 6.6% Trust #11, P.G. Tom Trust M and P.G. Tom Trust, business interests of Tom Pritzker Early Break- and Gigi Pritzker Up Fee

$6.9

Private Equity Buyer/Public Target M&A Deal Study: 2013–14 Review and Comparative Analysis | 27 Break-Up Fee RTF as % of Target Sponsor Break-Up Fee as % of RTF Equity Value Equity Greenway Medical Vista Equity Partners Fund IV, L.P. $24.1 4.0% $48.2 7.5% Technologies, Inc.

The Active Network, Inc. Vista Equity Partners Fund III, L.P. and $32.0 3.2% $64.0 6.5% Vista Equity Partners Fund IV, L.P. Tellabs, Inc. Marlin Equity III, L.P. and Marlin Equity $26.7 3.0% N/A N/A IV, L.P.

The Jones Group Inc. Sycamore Partners, L.P. and Sycamore $36.0 3.0% $60.0 5.0% Partners A, L.P.

2014 Transactions

Break-Up RTF as % of Target Sponsor Break-Up Fee Fee as % of RTF Equity Value Equity CEC Entertainment, Inc. Queso Holdings Inc. $45.5 3.5% $385.2 5%

Safeway Inc. AB Acquisition LLC, Albertson’s $250.0 2.7% $400.0 4.3% Holdings LLC, Albertson’s LLC and Saturn Acquisition Merger Sub, Inc.

Compuware Corporation Thoma Bravo, LLC $126.0 5.5% $153.0 6.1%

Tibco Software Inc. Vista Equity Partners $116.7 3.0% N/A N/A

Digital River, Inc. Siris Capital Group, LLC $27.2 3.3% $50.4 6.0%

Riverbed Technology, Inc. Thoma Bravo, LLC and Teachers’ $126.0 3.9% $252.0 7.0% Private Capital

PetSmart, Inc. BC Partners, Inc. $255.0 3.1% $510.0 5.9%

28 | Schulte Roth & Zabel Authors and About SRZ’s Mergers & Acquisitions Group

Principal Author Co-Authors John M. Pollack Associates Pavel A. Shaitanoff, Todd B. Kornreich, Partner Colin S. McKeon and Nicholas Scott co-authored +1 212.756.2372 | [email protected] the Deal Study.

Other Contributors A team of other Schulte Roth & Zabel associates contributed to this deal study, including Edward Chu, Lowell K. Dyer, Mark L. Garibyan, Brandon S. Gold, Evelyn Liristis, Darren Sandler, Michael P. Stromquist, Sarah M. Sullivan and David White.

M&A Group Contacts

Stuart D. Freedman Robert Goldstein +1 212.756.2407 +1 212.756.2519 [email protected] [email protected]

Peter Jonathan Halasz Christopher S. Harrison +1 212.756.2238 +1 212.756.2191 [email protected] [email protected]

Eleazer Klein Michael R. Littenberg +1 212.756.2376 +1 212.756.2524 [email protected] [email protected]

Robert B. Loper John M. Pollack +1 212.756.2138 +1 212.756.2372 [email protected] [email protected]

Richard A. Presutti Marc Weingarten +1 212.756.2063 +1 212.756.2280 [email protected] [email protected]

Private Equity Buyer/Public Target M&A Deal Study: 2013–14 Review and Comparative Analysis | 29 SRZ’s Mergers & Acquisitions Group helps clients achieve their business objectives by structuring and GETTING executing complex deals across a range of industries. From public and private M&A transactions including leveraged buyouts, “going private” and cross-border THE COMPLEX transactions to tender offers, proxy contests and leveraged recapitalizations, we represent private investment funds, portfolio companies and publicly traded companies in DEALS DONE award-winning deals, year after year.

Founded in 1969, Schulte Roth & Zabel LLP is a multidisciplinary firm with offices in New York, Washington, D.C. and London that is widely regarded as one of the premier legal advisers to private investment funds. Our M&A Group was recognized in January 2015 by FactSet on its list of “Top U.S. Advisers — Legal Advisers,” based on U.S. announced deals in 2014, citing 31 total deals with a transaction value of more than $22 billion.

Our lawyers work seamlessly across practice groups to address all aspects of complex mergers and acquisitions, from employment and environmental to antitrust and tax issues. When it comes to the ins and outs of M&A activity, our practical solutions solve the full range of business-critical issues to move deals forward. 30 | Schulte Roth & Zabel Representative Deals

We have successfully represented clients in some of the most challenging M&A deals. Our work ranges across a broad spectrum of industries and market sectors, and includes both domestic and international transactions. Where our clients pool efforts with other financial sponsors or strategic partners, we frequently represent the resulting consortiums. We regularly act as counsel to our clients’ portfolio companies, particularly for M&A transactions, bank financings and capital markets transactions, including high-yield offerings and initial and follow-on public offerings. We pride ourselves on being part of a client’s team, integrating business and legal objectives, and providing sensible and straightforward advice and solutions. Some of our most recent transactions include:

The sale of The sale of The sale of The acquisition of

Baker & Taylor YBP Library Services Marketing Services U.S. Blue Bird Corp. Origen Financial Inc. February 2015 and Baker & Taylor $490 million $47 million Publishing Group February 2015 January 2015 February 2015

The acquisition of The acquisition of The sale of The acquisition of

and subsequent sale of its Safeway Inc. U.K. franchise CRGT Inc. EMCORE’s Space $9 billion $348 million (sale) December 2014 Photovoltaics business January 2015 July 2014 (acquisition) / $150 million December 2014 (sale) December 2014

The acquisition of The acquisition of The acquisition of The sale of non-performing loan portfolio from

A majority of Visteon BeyondTrust Software Inc. AeroFlex Holding Corp. Corporation’s global $310 million $1.4 billion Ireland’s National Asset automotive interiors business September 2014 September 2014 Management Agency November 2014 September 2014

The sale of The sale of a majority stake The sale of The sale of in 47 U.S. hotels

Capario Pretium Packaging Great Lakes Caring Home July 2014 $958 million June 2014 Health & Hospice June 2014 May 2014

Private Equity Buyer/Public Target M&A Deal Study: 2013–14 Review and Comparative Analysis | 31 Representative Deals

The acquisition of a The acquisition of The acquisition of The acquisition of distressed property loan portfolio from

QinetiQ Group’s Ireland’s National Asset Simpler Consulting U.S. Services division McCann Aerospace Machining Management Agency April 2014 $165 million April 2014 $7.5 billion April 2014 April 2014

The acquisition of The sale of The acquisition of The acquisition of

Anchor Drilling Fluids USA Shenick Network Systems $234 million Nobles Worldwide Inc. February 2014 Gold Star Foods Inc. March 2014 April 2014 March 2014

The sale of The acquisition of The sale of The acquisition of

Kokusai Kogyo Co. United Supermarkets Midstate Berkshire Tellabs $1.37 billion February 2014 January 2014 $891 million February 2014 December 2013

The acquisition of The sale of The acquisition of The sale of

Precise Machining & Telanetix Inc. Bookmasters Inc. North American Bus Manufacturing $55 million July 2013 Industries Inc. November 2013 September 2013 $80 million June 2013

The acquisition of The acquisition of The sale of The acquisition of

Nokia Siemens Networks’ Applied Communications LNR Property Albertsons Inc., SUPERVALU optical networks business Sciences $1.05 billion INC. – five retail chains May 2013 May 2013 April 2013 $3.3 billion March 2013

32 | Schulte Roth & Zabel This information has been prepared by Schulte Roth & Zabel LLP (“SRZ”) for general informational purposes only. It does not constitute legal advice, and is presented without any representation or warranty as to its accuracy, completeness or timeliness. Transmission or receipt of this information does not create an attorney-client relationship with SRZ. Electronic mail or other communications with SRZ cannot be guaranteed to be confidential and will not (without SRZ agreement) create an attorney-client relationship with SRZ. Parties seeking advice should consult with legal counsel familiar with their particular circumstances. The contents of these materials may constitute attorney advertising under the regulations of various jurisdictions. In some jurisdictions, this document may be considered attorney advertising. Past representations are no guarantee of future outcomes.

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