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NOVEMBER 21, 2005 PERELLA, MEGUID SEEN STARTING UP M&A SHOP VOL. XXXI, NO. 46 Joseph Perella, a former vice chairman at and In the News veteran M&A banker, and Terry Meguid, former head of Some LBOs Squeeze Through 2 at the firm, are in the process of setting M&A Volumes Soar 2 up an advisory firm that will launch soon after their non- SPACs Get Sweetened 4 compete agreements expire at the end of the year. The Citi MD Alleges Retaliation 4 two, along with several other bankers, left the AMEX Relents On SPAC Listings 5 investment bank in April amidst a big shakeup that CapitalSource Exec Wary culminated with the ouster of Phil Purcell. Of Housing Sector 5 Soon after resigning from the firm Perella independently advised credit card company MBNA in its /LBO News $35 billion takeover by in July. Several calls to Gryphon Recoups Through Recap 6 (continued on page 15) Pension Makes Room For Buyout Hedgies 6 E*TRADE FINANCING GIVES OUTRIGHTS A LIFT Indiana Retirement Looks To VC 6 Outright investors, those whose strategy involves holding convertibles, gobbled up a M&A News sizable chunk of a $450 million of mandatory convertible preferred offering from E*Trade Medical Co. Scouts For Targets 7 last week. The deal, part of a $1.65 billion financing to pay for the acquisition of online Friendster To Fetch Under $50M 7 broker BrownCo, was priced at the cheap end of price talk and enjoyed an aftermarket lift on Thursday. Financing Strategies “There was a ton of outright demand,” said one capital markets executive of the KKR Exits Willis Group 11 convertible tranche, which was oversubscribed by more than two times. “They like the story Eagle Bulk Shipping Trims and right now they’re the ones that have the money,” he added, comparing the fundamental Equity Sale 11 investors to arbitrage hedge funds, which have been struggling with redemptions this year. Myriad Raises R&D Equity 11 Ravi Malik, senior portfolio manager at Froley Levy Investment Co., which oversees $3.5 Flavor-Maker Sells Shares 11 billion in convertibles, was among the fundamental investors that put in for the deal. “It was Columbus McKinnon Chips Away (continued on page 16) At Debt 13 Departments NEW TURNAROUNDS PREP FOR DISTRESSED WAVE M&A Record 9 A batch of turnaround buyout shops have recently opened their doors and begun marketing Nuggets 13 new funds under the assumption the current boom in buyout Financing Record 14 activity and the expansion of credit markets will bring them plenty of distressed companies in the next few COPYRIGHT NOTICE: No part of this publication may years. be copied, photocopied or duplicated in any form or by any means without ’s prior written “Historically, this is a relatively underserved space,” consent. Copying of this publication is in violation of the said Kevin Prokop, a director in the private equity Federal Copyright Law (17 USC 101 et seq.). Violators may be subject to criminal penalties as well as liability group at Questor Management Company, which runs for substantial monetary damages, including statutory a group of funds in Southfield, Mich. “And [some damages up to $100,000 per infringement, costs and attorney’s fees. Copyright 2005 Institutional Investor, firms] are aware of the opportunity there in the next few Inc. All rights reserved. ISSN# 1064-1912 years as the leveraged loan market comes home to roost,” he For information regarding subscription rates and electronic licenses, please contact Dan Lalor at (continued on page 15) (212) 224-3045.

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Corporate Financing Week www.corporatefinancingweek.com November 21, 2005

In The News

Pretty Please? EDITORIAL PUBLISHING TOM LAMONT ELAYNE GLICK Editor Publisher LBO Issuers Adjust Junk Terms (212) 224-3069 STEVE MURRAY Deputy Editor AMANDA CATERINA LBO issuers had to make hefty adjustments to their deal terms last week to get Associate Marketing Manager their money in the high-yield market. “A lot of them had covenant changes. Some PETER THOMPSON (212) 224-3096 Executive Editor [] VINCENT YESENOSKY were aided by the strength of the loan market, which absorbed whatever couldn’t (773) 439-1090 Senior Fulfillment Manager get done in high-yield,” said one syndicate banker. DANIEL SHIRAI Managing Editor SUBSCRIPTIONS/ Kohlberg Kravis Roberts’ Accellent downsized its $325 million deal to $305, (212) 224-3254 ELECTRONIC LICENSES [email protected] One year - $2,595 (in Canada add $30 the rest of which was taken out in a loan. The 10 1/2% 10-year notes (B-/Caa1) postage, others outside U.S. add $75). MATTHEW CRAFT were priced at 98.67. Senior Reporter DAN LALOR (212) 224-3278 Director of Sales (212) 224-3045 [email protected] Team Health, backed by Apollo Advisors and Banc of America Equity CHARLES PANOFF Partners, also moved some of its funding into the loan market and raised $215 PRIYA MALHOTRA Account Executive Reporter 212-224-3030 million in 11 1/4% notes at par. (212) 224-3516 [email protected] TOM GANNAGÉ-STEWART Account Executive [London] Other offerings such as Network Communications, backed by JONATHAN STEIMAN (44 -20) 7779-8998 Intern , and Avago, a Singapore-based television network which also SABEENA NAYYAR (212) 224-3933 Account Executive [] [email protected] counts KKR as its backer, weren’t as lucky and will be trying again this week. (852) 2842-6929 “They’ll have until Wednesday morning at the very latest to get these done,” said ELINOR COMLAY (44-20) 7303-1738, REPRINTS VENILIA BATISTA the banker. DEWEY PALMIERI (44-20) 7303-1718 Reprint & Permission Manager London Bureau Chiefs (212) 224-3675 A Cornucopia JANA BRENNING, KIERON BLACK [email protected] Sketch Artists CORPORATE M&A Soars As Year-End Approaches PRODUCTION CHRISTOPHER BROWN Chief Executive Officer Last week was the fourth busiest in M&A so far this year as several mega deals were DANY PEÑA Director DAVID E. ANTIN Chief Operating Officer announced or confirmed. From Nov. 13-18, the combined value of 115 U.S. LYNETTE STOCK, DEBORAH ZAKEN Managers ROBERT TONCHUK transactions totaled $47 billion, according to Thomson Financial. That’s compared Director/Central Operations & Fulfillment MICHELLE TOM, ILIJA MILADINOV, Customer Service: PO Box 5016, with $70 billion during the week of Jan. 23, the busiest of the year. Last week MELISSA ENSMINGER, Brentwood, TN 37024-5016. BRIAN STONE, JAMES BAMBARA recorded fewer deals than any of the top 16 M&A weeks this year, suggesting deal Tel: 1-800-715-9195. Fax: 1-615-377-0525 Associates UK: 44 20 7779 8704 sizes were particularly large. JENNY LO Hong Kong: 852 2842 6950 E-mail: [email protected] Leading the pack was Johnson & Johnson’s agreement to purchase Guidant Web Production & Design Manager Editorial Offices: 225 Park Avenue MARIA JODICE for $21.5 billion, $4 billion below last year’s original offer. In another high- South, , NY 10003. Advertising Production Manager Tel: (212) 224-3254 profile transaction, Koch Industries, a tightly controlled family conglomerate, (212) 224-3267 Email: [email protected] ADVERTISING Corporate Financing Week is a announced its acquisition of papermaker Georgia Pacific for $13.2 billion. At general circulation newsweekly. No the end of the week, Cisco Systems unveiled plans to acquire cable TV JONATHAN WRIGHT statement in this issue is to be construed Advertising Director as a recommendation to buy or sell technology firm Scientific-Atlanta for $6.6 billion in one of the largest (212) 224 3566 securities or to provide investment advice. [email protected] Corporate Financing Week ©2005 technology deals of the year. PAT BERTUCCI, ADRIENNE BILLS, Institutional Investor, Inc. ISSN# 1064-1912 PHILIP COX, MAGGIE DIAZ Warren Gouk, head of M&A at Cascadia Capital in Seattle, said there is a Associate Publishers Copying prohibited without the generally a big push to get things done before Thanksgiving. “It’s a sign of things to permission of the Publisher. come,” said Gouk, adding that the markets have been hotter during the past three weeks compared with any other period this year.

Tell Us What You Think! Questions? Comments? Criticisms? Do you have something to say about a story that appeared in CFW? Or is there information you’d like to see published? Whether you would like to discuss a new business strategy or crow about a big hire, give us a call. Managing Editor Dan Shirai can be reached at 212 224 3254 or [email protected].

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Corporate Financing Week www.corporatefinancingweek.com November 21, 2005

Citi’s Menon Says Firing Securities, an underwriter, is said to have come up with a structure in which one class of shares represents 2 warrants, Was Retaliatory which is typical, while a second class represents 10 warrants but Ramesh Menon, the former head of Citigroup’s structured with no claim on the escrowed funds. Ira Greenspan at Brenner products group who was fired over a week ago, told CFW his didn’t return calls. dismissal was directly linked to the fact he filed a $138 million A third maneuver is to have management put its own money lawsuit against the firm. Last month, in the suit, he alleged into the trust which they would only get back if the deal was individuals at the firm discriminated against him on the basis of consummated. That strategy differs from officers buying warrants racial and cultural origin (CFW 11/07). in the deal, which has been common practice over the past year “I believe that my firing was transparently retaliatory and pretextual [sic], and I strongly dispute the basis for my U.S. Debt Underwriting Leaders termination,” he said. Ranked by Number of Issues A Citi spokeswoman would not comment directly, but Thurs. Nov. 10-Thurs. Nov. 17 stressed the part of a company statement on the matter which Proceeds Amount + suggests the two incidents were not connected, and that Menon Book Runner Number of Issues Overallotment Sold (US$ Mil) was fired for failing to meet standards of professional conduct, JP Morgan 16 4,897.2 Merrill Lynch & Co Inc 14 1,019.1 including failing to show up to work on a regular basis, and that Citigroup 11 3,887.9 he’d been given a warning some weeks prior. & Co 8 1,742.5 Morgan Stanley 8 908.3 “We are aware that Mr. Menon recently filed a lawsuit against AG 7 2,211.2 the company. We respect that right, but he also, like all Banc of America Securities LLC 6 858.4 First Boston 5 606.8 employees, needs to come to work regularly and do his job. As ABN AMRO 4 623.0 we have stated previously, we believe the lawsuit is without merit, UBS 4 678.1 Wachovia Corp 3 282.4 its allegations are false, and we will contest it vigorously,” said the 3 632.4 statement, which also included a more detailed explanation for Capital 2 583.0 HSBC Holdings PLC 2 225.0 the reasons behind the firing. & Co Inc 2 54.7 Menon said the move only adds ammunition to his suit. “This Williams Capital Group LP 1 166.4 Blaylock & Partners LP 1 166.4 very much strengthens the case I have regarding retaliation,” he BNP Paribas SA 1 124.3 said. KeyCorp/McDonald Investments 1 481.4 BB&T Corp 1 20.3 Industry Total 66 20,168.6 Bankers Tweak Terms On U.S. Equity Underwriting Leaders Acquisition Funds Ranked By Number Of Issues As more management teams and investment banks look to float Thurs. Nov. 10-Thurs. Nov. 17 specified purpose acquisition companies, some deal engineers are

adding sweeteners to make the vehicles more attractive to Proceeds Amount + investors, according to a panel of experts that spoke at the Book Runner Number of Issues Overallotment Sold (US$ Mil) JP Morgan 4 658.5 Reverse Merger & SPAC Summit in New York last week. UBS 3 248.1 “Some banks are aligning themselves with the SPAC by Lehman Brothers 3 254.7 Goldman Sachs & Co 3 481.3 deferring part of their fee to the ‘back end,’” said Mitchell Morgan Stanley 3 651.2 Littman, a partner at Littman Krooks. He was referring to Credit Suisse First Boston 2 274.5 Deutsche Bank AG 2 246.0 the final stage of a SPAC’s life when it consummates an Citigroup 2 316.0 acquisition. In a SPAC, money is raised with investors and Banc of America Securities LLC 1 123.5 MDB Capital Corp 1 14.0 then put in a trust until the vehicle’s managers find a target Merrill Lynch & Co Inc 1 126.0 and consummate an acquisition. Deutsche Bank deferred part AG Edwards & Sons Inc 1 66.8 Bear Stearns & Co Inc 1 38.3 of its compensation in Cold Spring Capital, a SPAC that Sandler O’Neill Partners 1 37.5 went public this month. Ryan Beck & Co 1 41.1 Another innovation has been to create a hierarchy of Industry Total 19 3,577.5

securities, similar to preferred and common shares, which gives Source: Thomson Financial investors a larger exposure to appreciation. HCFP Brenner

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November 21, 2005 www.corporatefinancingweek.com Corporate Financing Week

and a half. Under this stricter policy, any proceeds management If the AMEX had maintained its previous position not to spends on expenses related to deal searches would be returned to allow SPACs, these vehicles would be stuck with only the OTC investors in addition to the 90% or so of the funds that sit in an option, which is limiting because the exchange’s listings aren’t escrow account. The move dramatically reduces any downside for recognized by a number of U.S. states. That reduces the listed investors, said Littman. companies’ liquidity and access to capital. AMEX officials didn’t return calls by press time. AMEX Accepts Acquisition Vehicles The American Stock Exchange is accepting applications for Lenders Eye Housing Sector specified purpose acquisition companies, according to executives With Caution close to the exchange. The AMEX had previously said it wouldn’t Lenders will likely be leery of making loans to building products accept the vehicles, but Cold Spring Capital, a Deutsche Bank- and durable consumer products companies next year because of led SPAC, began trading on the exchange this month, marking a indications the housing market is softening, said Joe Kenary, departure from the typical route taken by these vehicles, which president of CapitalSource’s corporate finance group. The group involves a listing on the Over The Counter Bulletin Board writes senior and mezzanine cash flow loans for the Chevy exchange (CFW, 10/31). Chase, Md.-based middle market lender. While no official statements have been released on the matter, Kenary mentioned two indications of the softening exchange officials confirmed they would be accepting housing market. In a survey conducted earlier this month, applications from other blank check issuers, according to real estate consulting firm Real Trends found the number of executives who spoke on a panel at the Reverse Merger & SPAC home-purchase contracts signed in October fell 8% Summit in New York last week. compared with a year earlier at 48 of the nation’s large real- SPACs are publicly traded shell companies run by estate brokerage firms. Also, home builder Toll Brothers management teams whose mandate is to seek out an acquisition, recently reduced its sales forecast for fiscal 2006, blaming usually within 18 months following its IPO. weaker demand in several markets.

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Corporate Financing Week www.corporatefinancingweek.com November 21, 2005

Private Equity/LBO News Gryphon Gets Back Half said the fund is looking for niche strategies where there is an information advantage the manager can exploit. In Six Months Because convergence is a new strategy, managers do not have Gryphon Investors recently recouped half of its $40 million long track records so a lot of due diligence needs to be done, said equity investment in Update Legal, a legal staffing company it Clayton Young, assistant treasurer. Economou expects picked up in May, through a dividend recapitalization. Nick convergence strategies to have higher returns and higher volatility Orum, a partner in San Francisco, said Gryphon decided to take than other hedge fund strategies. a dividend out for a couple of reasons. “The company is One example of a hedge fund morphing into a buyout firm is performing ahead of expectations. And we desired to generate a Edward Lampert’s ESL Investments. The 42-year-old billionaire return for our investors.” is credited with orchestrating the merger of Kmart and Sears, Gryphon is in the middle of raising a reported $750 million Roebuck and Co. last year. Highfields Capital Management, a fund. Orum declined to comment on the fund-raising effort. Boston-based hedge fund, offered $17 a share for Circuit City in But the payout generated from recapitalizing Update Legal February. Earlier this year, the tussle for Toys ‘R’ Us pitted an nudges up the existing fund’s rate of return, a selling point in investment group including hedge fund Cerberus Capital raising a successor fund. Management against a number of private equity bidders Details of the most recent deal weren’t disclosed because including veteran buyout house Kohlberg Kravis Roberts. Gryphon doesn’t want to reveal the company’s earnings, Orum said. The senior debt, provided by Madison Capital Indiana May Add More Venture Funding, amounted to 2.5X EBITDA. The mezzanine slice, provided by 1818 Mezzanine Fund and AlpInvest Partners, Capital Next Year amounted to 2X EBITDA. The $12.7 billion Indiana Public Employees Retirement Fund Gryphon has experience in acquiring staffing companies and will likely invest in venture capital next year as it works toward bulking them up through add-on acquisitions. The firm has used filling its roughly $635 million target to alternatives. So far, the Nursefinders as a platform in the medical staffing business, buying fund has around $190 million in its alternatives bucket, with Linde Healthcare and Kendall & Davis as add-ons earlier this year. $24.5 committed to firms investing in venture capital and the Orum said he expects to find acquisitions to fold into Update Legal, rest in private equity. Jeffry Carter, spokesman, said the board especially companies that would expand its geographic reach. likes venture capital because it’s a more conservative way to invest in alternatives and boost returns without getting tangled up in Pension Builds Exposure To Private complicated strategies, such as hedge funds, which the plan doesn’t invest in. He said it’s too soon to speculate on how large Equity Via Hedge Funds future venture capital mandates may be and there is no timetable ITT Industries is building an allocation for its to for meeting the target. David Adams, executive director, did not “convergence” strategies—hedge funds participating in private return calls. Mercer Investment Consulting advises the fund. equity-style investing. Hedge funds are moving toward illiquid The plan has 45% in domestic equity, 11% in international investments, such as buyouts, because there is a barrier to equity, 9% in global equity, 20% in core fixed-income, 10% in accessing company-specific data, so managers in the know have TIPS and 5% in alternatives. more of an edge, said Theodore Economou, assistant treasurer. “That’s probably the next frontier in the hedge fund space.” The NOW GET corporate financing week EVERY FRIDAY! fund is discussing what size allocation it wants to build and is Paid subscribers now have access to a PDF of likely to place mandates by mid-2006. the upcoming Monday’s newsletter on The engineering and manufacturing company in White CFW’s Web site every Friday afternoon Plains, N.Y., views 20% of its pension portfolio as an alpha before 5 p.m. EDT. That’s a 64 hour jump on mail delivery, even when the post engine, which should consistently outperform cash by 300-500 office is on time! Read the news online basis points with low volatility. Convergence strategies will sit at your desk or print out a copy to read at within this pool, which includes hedge funds and also long-only your leisure over the weekend. Either way, strategies that have high information ratios. ITT will likely you’ll be getting our breaking news even enlarge the alpha portfolio as it finds new managers. Economou sooner and starting your week off fully informed!

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November 21, 2005 www.corporatefinancingweek.com Corporate Financing Week

M&A News Medical Management Co. company purchased Health IQ Diagnostics, a Chicago health support company. Seeks Acquisitions American Healthways, a medical management company in Friendster Seen Fetching Nashville, Tenn., is looking to acquire healthcare services companies promoting healthier lifestyles and healthcare Less Than $50M technology players. Paul Wallace, senior v.p. of strategic Online social networking company Friendster, which is development, said the company is interested in purchases reportedly up for sale, will probably fetch a price below costing $5-500 million and is also open to a merger. The $50 million because it has few unique offerings in a crowded business has a $1.4 billion market capitalization. marketplace, according to Michael Maxworthy, founding The desire for acquisitions stems from a customer partner of Marlin & Associates, a New York investment bank preference to have all healthcare management services under specializing in the media and IT sectors. Last week, several one roof, said Wallace. That means providing employers and reports said Friendster had hired investment bank Montgomery health plans with a full range of services, such as & Co. and was looking to sell itself for $50-100 million. assisting cancer patients and recovering alcoholics. Friendster has little else to offer aside from a customer base American Healthways is interested in service providers of 21 million user profiles, said Maxworthy. It is not the that for instance help people quit smoking, said Wallace, leader in its space and doesn’t cater to a specific niche, he adding he’s also attracted to technology companies that have added. In addition, its venture capital backers, which include tools to help assess the needs of patients over the phone. Kleiner Perkins Caufield & Byers, Benchmark Capital and Acquisitions might be financed by a variety of instruments Battery Ventures, have only poured in $13 million into the including bank debt or the public markets. In July, the company since 2003. A price of $50-100 million would mean

You

read JUNE 13, 2005 WALL STREET JOURNAL it WARBURG RAISES $7.8B PRIVATE AUGUST 15, 2005 EQUITY FUND Warburg to Unveil $8 Billion For Warburg Pincus has raised a $7.8 billion buyout fund, which will give the private equity firm a top three slot in the ranking New Private-Equity Fund here Investing firm of the big funds. The only U.S. firms with larger funds are today to announce Warburga new private-equity Pincus fund with Goldman Sachs which raised $8.5 billion and The Carlyle approximately $8 billion in capital, accordingLLC is expected to a person Group, which raised two funds worth a combined $10 billion familiar with the matter, the latest in a line of big-ticket first! (CFW, 4/11). The final size of the Warburg fund may vary fund raising. slightly, according to an industry official. These are flush times for private-equity houses, whose The Warburg fund should be announced soon, the investors—primarily pension funds, universities and We stay ahead industry official said. A spokeswoman at Warburg declined tohigh-income individuals—have proved eager to take on comment. The New York firm’s previous fund is the $5.3 increasingly larger deals even while overall private-equity returns level off and competition intensifies. of our competition billion Warburg Pincus Equity Partners VIII raised in 2001, In the last year alone, Warburg was part of groups so you can stay according to Capital IQ. Its most high-profile deal this yearthat purchased retailer was the $5.1 billion buyout of luxury retailer Neiman Marcus$5.1 billion, and technologyNieman company Marcus Group ahead of yours. with Texas Pacific Group. Technologies Inc. for This year buyout players have raised mega-funds as part of a broaderInc. explosion for $1.3 ofbillion. private Those equity,Telcordia deals which were in just the investors have been looking for returns that beat the public markets. They’ve also benefited from investors flocking to To Subscribe Call 212firms 224 with 3570 the (USA), best returns. + 44 20 7779 8999 (UK), EMAIL: [email protected] CAPAD_tugbw_8x10.5_0223 3/8/04 9:50 AM Page 1

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M&A News (cont’d) a multiple of four to seven times that investment, a high expand their social networking offerings, said Maxworthy. number for a mediocre company like Friendster, he said. “It Interactive owns Match.com, United owns Classmates.com, doesn’t smell quite right,” said Maxworthy, adding it’s strange and Spark owns AmericanSingles.com. Also, Yahoo!, which that the VCs are looking to cash out only two years after their has yet to make a foray into the social networking space, initial investment. might look at Friendster as a way to enter the market. IAC/Interactive Corp., United Online and Spark Representatives from Friendster and Interactive Corp. Networks are some companies that might be potentially declined to comment while representatives from the other interested in acquiring Friendster to add new customers and companies didn’t return calls.

Mergers and Acquisitions Record (NOV. 9 - NOV. 16) Source: Capital IQ, a division of S&P ANNOUNCED TRANSACTION DATE COMPANY NAME SIZE($ MLNS) BUYER SELLER BUYER ADVISOR SELLER ADVISOR 11/16/2005 Axes Technologies 54.00 Mahindra British Telecom Avendus Advisors 11/16/2005 10 Non Core Brands 57.00 Cenuco Inc. Playtex Products Inc. Hermes Group LLC, The; Stanford Group Company 11/16/2005 North American Magnet 125.00 Rea Magnet Wire Co. Inc. Phelps Dodge Corp. Wire Assets 11/16/2005 Columbian Chemicals Company 600.00 DC Chemical Co. Ltd., Phelps Dodge Corp. One Equity Partners 11/16/2005 Intellisync Corp. 487.89 Nokia Corp. 11/16/2005 SNB Bancshares Inc. 231.50 Prosperity Bancshares Inc. Sandler O’Neill 11/15/2005 Learning Care Group Inc. 158.27 ABC Learning Centres Ltd. Jacobson Partners 11/15/2005 nMatrix, Inc. 125.00 EPIQ Systems Inc. 11/15/2005 BAX Global Inc. 1,120.00 Deutsche Bahn AG Brinks Co. 11/15/2005 Automotive.com Inc. 72.50 PRIMEDIA Inc.(80% stake) 11/15/2005 Excelsior Radio Networks, Inc. 60.00 Lincolnshire Management, Inc. Sunshine Wireless Co. (Undisclosed Majority Stake) 11/15/2005 Compass Productions Inc. 51.80 Somerset Entertainment BMO Nesbitt Burns, Inc. Income Fund 11/14/2005 Southern Graphic Systems, Inc. 410.00 Citigroup Venture Capital, Ltd. Reynolds Metals Company Deutsche Bank Securities Inc. (Financial Advisor) 11/14/2005 Sara Lee Branded Apparel 321.67 Sun Capital Partners, Inc. Sara Lee Corp. Goldman, Sachs & Co. (Financial Advisor) 11/14/2005 New York Marriott East Side 287.00 Prime Property Fund, LLC Strategic Hotel Capital Inc. Morgan Stanley & Co Inc. - 11/14/2005 Precise Technology, Inc. 275.50 Rexam plc Code Hennessy & Simmons, L.L.C. Citigroup Inc. 11/14/2005 Enterasys Networks Inc. 380.43 Gores Technology Group, LLC; Tennenbaum Capital Partners, 11/14/2005 Funk Software, Inc. 122.00 Juniper Networks, Inc. 11/14/2005 Compex Technologies Inc. 102.66 Encore Medical Corp. First Albany Corporation 11/14/2005 National Business Furniture, Inc. 82.00 K + K America Corporation 11/14/2005 38 Luxury and Upper Upscale Hotels 4,095.76 Host Marriott Corp. Starwood Hotels & Resorts; Goldman, Sachs & Co. Bear, Stearns & Co. Inc.; Deutsche Starwood Hotels & Resorts Bank Securities Inc. Worldwide Inc. 11/13/2005 Georgia Pacific Corp. 24,111.90 Koch Forest Products, Inc. Citigroup CIB 11/11/2005 Serena Software, Inc. 1,419.92 Silver Lake Partners, L.L.C. Lehman Brothers Holdings Inc. ; Merrill Lynch & Co. Inc. 11/10/2005 Gold Banc Corp Inc. 706.89 Marshall & Ilsley Corp. (WI) 11/10/2005 Alamo Corporation Texas 86.21 Cullen/Frost Bankers Inc. 11/10/2005 Guardian International Inc. 65.50 Devcon International Corp. Lehman Brothers Inc. 11/10/2005 Hughes Network Systems, Inc. 100.00 SkyTerra Communications Inc. DirecTV Group Inc.(50% stake) 11/10/2005 Coastal Security Systems, Inc. 50.40 Devcon Security Holdings, Inc. 11/08/2005 The Westin Philadelphia 89.00 HEI Hospitality, LLC Starwood Hotels & Resorts Worldwide Inc. * denotes proprietary information Chart contains deals of $50 million or more involving U.S.-based targets.

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Financing Strategies KKR Wraps Up Fund With Final chosen because they are active in the maritime sector. The two firms also underwrote the company’s IPO. Insurance Secondary Kohlberg Kravis Roberts monetized the last of its ownership in Biotech Raises R&D Cash Willis Group Holdings, a U.K.-based insurer, by selling 6.1 million shares at $36.41 on Nov. 8. It marks Willis’ sixth Myriad Genetics, a biotech company in Salt Lake City, Utah, public offering since it was acquired by the buyout shop in recently sold more than eight million shares, netting 1998. KKR’s remaining 5% stake in Willis, worth close to $139.7 million for product development. With a drug for $220 million, is also the last outstanding position held by the Alzheimer’s disease in late stage clinical trials and $103 million $6 billion KKR 1996 Fund. in cash at the end of the third quarter, Jay Moyes, cfo, said he The offering marks the end of what one executive called a figured it was a good time to raise money. The shares were textbook private equity investment. The company, acquired in priced at $18.50, a $0.45 discount to the previous day’s close. Moyes said on the road show, investors were attracted to the 1998, went public in 2001 at $13.50, and over the next four predictive medicine business, the use of genetics to determine a years KKR sold off shares at $24.25, $28.25, $31.00 and person’s risk for a disease, and Myriad’s position in that market. $38.27. While this last offering was sold at a lower price than Myriad holds numerous patents and has few competitors. He the previous monetization, the overall pattern shows the shop also said the company could file one or two investigational new took full advantage of an increasingly profitable business that drug applications—possibly for an HIV drug—with the Food nearly tripled its market capitalization over the life of the and Drug Administration in the next two quarters. Filing an investment. “It was probably a smart move to have held onto IND is an early step in putting new drugs through clinical trails. [Willis, as opposed to selling it,]” said an equity capital markets JPMorgan led the offering. Bear Stearns and UBS Investment managing director who works with financial sponsors. A KKR Bank were the co-lead managers. Piper Jaffray, First Albany spokeswoman declined to comment. Capital and JMP Securities were the co-managers. Moyes pointed While part of the reason for coming to the market this month to the company’s longstanding relationship with Charles Duncan, was driven by an interest in closing out the 1996 fund, Ian equity analyst at JPMorgan, as one reason his company picked the Warner, group treasurer at Willis, noted recent developments firm to lead. “We want a mutually beneficial relationship. Actually, have contributed to an opportune moment for issuance. “The we want to have a mutually beneficial relationship with all of analyst perspective has changed and market favor improved for them. That’s why we had six hands on the offering.” the sector looking towards results for 2006,” said Warner, adding a slew of hurricanes inevitably leads to higher insurance rates. Citigroup and Lehman Brothers, both relationship firms of Calif. Co. Raises Equity For Willis Group, led the offering. Flavor Research Senomyx recently sold more than four million shares, netting Shipping Co. Downsizes Follow-On $57.2 million for research and development for its flavors and Eagle Bulk Shipping downsized an equity offering to 5.5 flavor-enhancers for food and beverage companies. The La Jolla, million shares from the originally-planned six million target Calif.-based company sold the common stock to Deutsche Bank because of lower-than-expected demand. Alan Ginsberg, cfo of for $14.20 per share. The investment bank then sold them to the New York marine company, declined to explain the reason the public for $14.60. for the sluggish demand, but said he was pleased the shares were The proceeds will help push four current projects: savory, sweet, priced at a premium to their June IPO price of $14. a salt enhancer and a bitter taste modulator. In March, the Flavor On Oct. 28 Eagle Bulk sold shares at $14.50, $0.02 premium and Extract Manufacturers Association approved its savory line, to the last day. The company generated gross proceeds of $79.8 meant to replace monosodium glutamate, or MSG, in packaged million and netted $75.8 million, said Ginsberg. The underwriters foods. Gwen Rosenberg, Senomyx’s executive director of investor have an over-allotment option to purchase up to 500,000 primary relations, said the products should be commercialized in 2006. shares and 325,000 secondary shares. If the greenshoe is exercised, Rosenberg said Deutsche Bank proposed the bought deal as the company will raise the amount it had originally targeted. the most efficient use of executives’ time. “The advantage is that The majority of the proceeds will be used to fund the they could get it done quickly, which allows managers to acquisition of two ships purchased last month for $70 million, concentrate on business. They don’t have to go around the said Ginsberg. UBS and Bear Stearns led the offering and were country talking to investors.” Deutsche Bank was a natural fit

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for the deal after serving as one of the underwriters in the and decided to raise the cash while its shares had been trading up. company’s last equity sale, its $36 million initial public offering The shares were priced at $20.00, a $1.78 discount to the in June 2004, she added. Executives have been in frequent previous day’s close. contact with the investment bank since the IPO. “We’ve been focusing on improving our debt to equity The proceeds nearly triple Senomyx’s cash. The offering balance and generate cash to pay down debt. We figured this was raises holdings to $87 million, after ending the third quarter a good time to accelerate the process,” said Howard. The with $30 million. company plans to bring debt to total capital ratio down to 50% and, eventually, around 30%. Once exercised, the clawback Manufacturer Taps Equity For should put the ratio closer to 30%, she said. The remaining $26 million from the equity offering could be Debt Reduction used for a few purposes. Howard said the company is Columbus McKinnon recently sold three million shares as part considering acquiring companies that will expand its reach into of a plan to pay down debt. The manufacturer of cranes, hoists newly industrialized countries in Eastern Europe or in Asia or and other products based in Amherst, N.Y., netted $56 million companies that sell complementary products. from the offering. Karen Howard, cfo, said $40 million will be Credit Suisse First Boston led the offering. Robert Baird and used to pay a portion of $115 million in 10% senior secured Needham & Co. were the co-managers. Howard said part of the notes (B-) due in 2010. She explained the company had until reason for picking CSFB was its work in underwriting previous August next year to exercise a 35% clawback option on the bonds private debt offerings for the company.

Nuggets Nuggets are a summary of important news impacting the capital markets over the last week. The information has been obtained from sources believed to be reliable, but CFW does not guarantee its completeness or accuracy.

Investment Banking • Goodman Fielder, the Australian maker of Buttercup bread • Goldman Sachs’ role in the merger between the New York and Meadow Lea margarine, has chosen to float $1.5 billion Stock Exchange and Archiplego was rebuked by a New York worth of shares and rejected a $2.6 billion takeover offer from judge. The NYSE was ordered to get a new fairness opinion Bain Capital, Goldman Sachs and Pacific Equity Partners. from an “unbiased” investment bank. • Kohlberg Kravis Roberts made its first foray into Italy, taking • Morgan Stanley has plans to cut as many as two dozen senior over automotive lubricant maker F. L. Selenia for $976 million investment bankers, said an insider. The layoffs are part of ceo (€835 million). The seller, New York-based Vestar Capital John Mack’s turnaround plan and come on the heels of the Partners, bought Selenia two years ago for €670 million cutting of 1,000 broker positions. • General Atlantic LLC agreed to purchase 10% of Nymex • Morgan Stanley, which controls roughly $1.24 billion of Holding, the parent of the New York Mercantile Exchange, for China’s $126 billion of bad loans, has halted purchases of non- $135 million. performing Chinese loans, citing high prices. • Bill Gates’ Cascade Investment invested $84 million for a 27% stake in Pacific Ethanol. The proceeds are earmarked for Deals the construction of a fuel-additives plant in California. • Koch Industries, a tightly controlled family-owned conglomerate, agreed to acquire papermaker Georgia Pacific for Corporations $13.2 billion, nearly a 40% premium above closing price the • Knight Ridder, the owner of 32 newspapers including The day before the deal was announced. The deal will lift Koch’s Miami Herald and The San Jose Mercury News, has hired revenues to $80 billion, propelling it past agricultural Goldman Sachs to explore a potential sale. conglomerate Cargill as the largest private U.S. company. • Intel launched a $50 million venture fund for start-ups based • Johnson & Johnson lowered its acquisition price for Guidant in Middle Eastern countries, like Egypt, Saudi Arabia, Turkey by almost $4 billion to $21.5 billion, ending the standoff over and the United Arab Emirates. the value of the pacemaker and defibrillator manufacturer. • Boeing launched an updated 747 jumbo-jet model to compete • Host Marriot agreed to purchase 38 properties from with the Airbus A380. Eighteen planes, which amount to Starwood Hotels & Resorts for $4.4 billion. $5 billion at list price, have been ordered by two cargo companies.

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Corporate Financing Week www.corporatefinancingweek.com November 21, 2005

Corporate Financing Record (OCTOBER 20—OCTOBER 27) Debt PRINC. GROSS SELLING UNDER AMT. SECURITY OFFER BP SPRD. CON. WRITING MGMT. ISSUER DATE ($ MILS) CPN. TYPE MATURITY PRICE YIELD SPRD. M S&P F MANAGER FEE % FEE % FEE % FEE % Ohio Power Company 11/10/05 200 5.3 Sr Unsecurd Nts 11/1/10 99.865 5.331 80 A3 BBB BBB+ MERRILL-MORGAN-STANLEY 0.6 0.35 Comb. Comb. Boston Scientific Corp 11/14/05 350 6.25 Sr Unsecurd Nts 11/15/35 99.41 6.294 150 A3 A A DEUTSCHE-BK-SEC-JPM-UBS-I 0.875 0.5 Comb. Comb NV-BANK Boston Scientific Corp 11/14/05 400 5.5 Sr Unsecurd Nts 11/15/15 99.228 5.602 100 A3 A A DEUTSCHE-BK-SEC-JPM- 0.65 0.4 Comb. Comb. UBS-INV-BANK Commercial Net Lease Realty 11/14/05 150 6.15 Senior Notes 12/15/15 99.74 6.185 158 Baa3 BBB- BBB- CS-FB-CS-WACHOVIA-SEC 0.65 0.4 Comb. Comb. Consolidated Edison Co of NY 11/14/05 350 5.375 Debentures 12/15/15 99.77 5.405 80 A1 A A+ MORGAN-STANLEY-CS-FB- 0.65 0.4 Comb. Comb CS-MERRILL ■ Great Plains Energy Inc 11/14/05 250 6.05 Senior Notes 11/15/35 99.398 6.094 130 A3 BBB NR BNP-PARIBAS-JPM na ■ Compton Petroleum Corp 11/15/05 300 7.625 Senior Notes 12/1/13 99.26 7.75 328 B2 B NR CS-FB-CS-MERRILL na ■ El Pollo Loco 11/15/05 125 11.75 Senior Notes 11/15/13 98.74 11.999 740 Caa1 CCC+ NR MORGAN-STANLEY-BA-SEC-LLC na Private Export Funding Corp 11/15/05 250 4.95 Secured Notes 11/15/15 99.978 4.953 40 Aaa AAA NR LA-SALLE-BK-NA na ■ Stanley Works Inc 11/15/05 450 5.902 Notes 12/1/45 100 5.902 140 Baa1 BBB NR CITIGROUP-GS-UBS-INV-BANK na Wisconsin Gas 11/15/05 90 5.9 Global Notes 12/1/35 99.759 5.917 118 A1 A- A+ MORGAN-STANLEY 0.875 0.5 Comb. Comb. CIT Group Inc 11/16/05 500 5 Global Notes 11/24/08 99.854 5.053 63 A2 A A BLAYLOCK-PTRNS-WILLIAMS na CAP-LEH E Trade Financial Corp 11/16/05 300 7.875 Senior Notes 12/1/15 100 7.875 335 B1 B+ NR MORGAN-STANLEY-JPM na Encore Acquisition Co 11/16/05 150 7.25 Sr Sub Notes 12/1/17 98.039 7.5 302 B2 B NR CITIGROUP na ■ Greenbrier Cos Inc 11/16/05 60 8.375 Senior Notes 5/15/15 100 8.375 383 NR NR NR BA-SEC-LLC-BEAR na Residential Capital Corp 11/16/05 750 6.125 Notes 11/21/08 99.862 6.176 175 Baa3 BBB- BBB- BARCLAYS-CAP-DEUTSCHE- na BK-SEC-LEH Residential Capital Corp 11/16/05 500 Floats Float Rate Nts 11/21/08 100 Floats Baa3 BBB- BBB- BARCLAYS-CAP-DEUTSCHE- na BK-SEC-LEH Vectren Utility Holdings Inc 11/16/05 75 5.45 Sr Unsecurd Nts 12/1/15 99.799 5.476 100 Baa2 A- NR LA-SALLE-BK-NA na Vectren Utility Holdings Inc 11/16/05 75 6.1 Sr Unsecurd Nts 12/1/35 99.799 6.115 145 Baa2 A- NR LA-SALLE-BK-NA na

Common PRINC. TOTAL TOTAL UNDER AMT GLOBAL SECONDARY OFFER GROSS SELL WRITING MGMT. ISSUER DATE ($ MIL SHARES SHARES PRICE $ MANAGER SPREAD % CON. % FEE % FEE % ▲ Clear Channel Outdoor Holdings 11/10/05 630 35,000,000 18 GS-DEUTSCHE-BK-SEC-JPM 4.15 2.7 0.622 0.828 MERRILL-UBS-INV-BANK ▲ IHS Inc 11/10/05 232.2 14,515,000 14,515,000 16 GS-CITIGROUP 6.6 3.96 1.32 1.32 ▲ Cold Spring Capital Inc 11/11/05 120 20,000,000 6 DEUTSCHE-BK-SEC 7.5 4.16667 1.333 2 Celanese Corp 11/14/05 205.2 12,000,000 12,000,000 17.1 CS-FB-CS na ▲ Vimicro International Corp 11/14/05 87 8,697,063 1,947,063 10 MORGAN-STANLEY 7 4.2 Comb. Comb. Capital Title Group Inc 11/15/05 41.1 6,850,000 1,850,000 6 RYAN-BECK 6.5 3.66667 1.133 1.2 Crosstex Energy LP 11/15/05 116.4 3,500,000 33.25 LEH 4.25 0.851 0.851 Digene Corp 11/15/05 84 3,000,000 1,000,000 28 JPM 6 3.60714 Comb. Comb. Environmental Power Corp 11/15/05 14 2,000,000 7 MDB-CAPITAL na ▲ IntercontinentalExchange Inc 11/15/05 416 16,000,000 13,500,000 26 MORGAN-STANLEY-GS 6.5 4.23077 Comb. Comb. Omega Healthcare Investors Inc 11/15/05 53.1 4,500,000 11.8 UBS-INV-BANK na United Community Banks,GA 11/15/05 37.5 1,350,000 27.75 SANDLER-ONEILL na WPS Resources Corp 11/15/05 247 4,600,000 2,700,000 53.7 JPM-BA-SEC-LLC na Axis Capital Holdings Ltd 11/15/05 199.9 6,800,000 29.4 CITIGROUP na E Trade Financial Corp 11/16/05 650 36,111,111 18 MORGAN-STANLEY-JPM 3.25 Comb. Comb. Enbridge Energy Partners LP 11/16/05 138 3,000,000 46 UBS-INV-BANK-LEH 4 0.804 0.804 Hiland Partners LP 11/16/05 66.8 1,600,000 41.77 A-G-EDWARDS 4.999 Comb. Comb. ▲ SunPower Corp 11/16/05 138.6 7,700,000 18 CS-FB-CS-LEH 7 1.4 1.4 SYNNEX Corp 11/16/05 38.3 2,500,000 2,500,000 15.32 BEAR na

Source: Thomson Financial/Securities Data. For more information, call Rich Peterson at (973) 645-9701. Comb. - fee is combined; NR - not rated; Na - not available; ■ 144A; ▲ IPO // Manager responsible for running the books; Contains offerings of $2 million or more; * More managers, but not listed.

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NEW TURNAROUNDS An executive who is currently selling turnaround funds to investors said part of the pitch is that the rush of buyouts in the (continued from page 1) last two years will inevitably lead to more broken deals. “Every added, pointing to the expectation that lower-quality companies presentation includes a segment that says, ‘look at how many will begin to trip their covenants or have a hard time refinancing buyout deals have been done. If the same percentage go bad, as interest rates rise. Questor was co-founded by Dan Lufkin. we’ll be here to sift through the rubble.’” Michael Madden, the former co-head of investment banking —Matthew Craft at Lehman Brothers, recently left Questor to start his own turnaround private equity shop, BlackEagle Partners. His shop has picked Probitas Partners to raise a fund with a $250 million PERELLA, MEGUID target. Other turnaround firms currently marketing their first (continued from page 1) funds include Industrial Opportunity Partners and Monomoy Perella’s residence were not returned. Meguid could not be reached Capital Partners. Jerry Levin, the former ceo of Sunbeam and for comment. A Morgan Stanley spokesman declined to comment. Revlon, is reportedly launching a fund. Many of the newbies are Richard Roth, a lawyer at The Roth Law Firm in New York veterans of the established shops, such as KPS Special Situations who has worked on several investment banking-related Funds and Questor, which plans to raise a new fund next year. employment cases, said bankers interested in setting up their “Look at the [bond] new issue market,” Prokop said. “Triple own shops waste little time in launching once their non- C rated paper spiked in 2004-2005. And historically, 35-40% compete agreements come to an end because they want to of all this paper defaults within three years.” Citing data from preserve their relationships with clients. Professor Edward Altman at New York University’s Stern “It’s like letting the horses out of the gate,” said Roth, School of Business, Prokop said a threefold increase in referring to bankers’ aggressiveness once their non-competes maturities of single-B paper is coming due in the next two years terminate. compared to 2004 and 2005. “There are going to be a lot more Perella started Wasserstein Perella with Bruce Wasserstein in opportunities in a couple of years.” 1985 after over a decade at First Boston. In 1993, he joined

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JANUARY 12, 2004 TITLE FIRM VOL. XXX, NO. 2 A New Threat To Fees Burke Whitman, cfo of COMPANIES INCREASINGLY GO IT ALONE ON M&A Triad Hospitals Just when bankers were beginning to believe in the deal market’s revival comes a sobering realization: an This Dartmouth man, former bulge bracket banker and increase in the number of completed mergers Marine Corps officer and acquisitions done without an who served in both investment bank. Thirteen percent of Gulf wars and Bosnia, completed deals in 2003 were done without shares with CFW his ADDRESS views on service and an advisor, up from 8.2% in 2002 and less than 5% in 2001, according to leadership, national Richard healthcare policy, and the future financing Peterson, chief market strategist at outlook of one of the country’s largest hospital operators. See Financially Speaking, p. 12 (continued on page 16) In The News Land Grab! Harris Nesbitt Growing Asset Backed CITY/STATE POSTAL CODE/ZIP COUNTRY Securities Group 3 A Satisfied Customer Financing Strategies HERSHA EYES EQUITY OFFER; UBS, CITI ON Nabi Biopharmaceuticals Sees Stock INSIDE TRACK Soar After Equity Deal 4 Hersha Hospitality Trust Gibraltar Steel Seizes High Stock will consider a $100-150 million equity offering later this year, potentially doubling the current size of the company, according to Price To Issue Equity 5 Though Hersha has not committed to specific underwriters, Ashish Parikh, cfo. M&A News Bank, the leads on its last offering, will have a leg up in winningCitigroup the mandate,and UBS Parikh Investment said. TEL FAX E-MAIL La Quinta Seeks $500m “We were very happy with their work and I would be surprised if we didn’t use them as In Acquisitions 8 joint-bookrunners,” Parikh said. The potential equity offering for the New Cumberland, Penn.-based real estate investment Departments Underwriting League Tables 3 M&A Record 9 (continued on page 15) Financing Calendar 14 SELF-STORAGE COMPANY PLANS IPO, SHOPS FOR UNDERWRITERS COPYRIGHT NOTICE: No part of this publication may be copied, photocopied or duplicated in any form or by Private self-storage company Options for payment: any means without Institutional Investor’s prior w Extra Space is planning an approximately $500 million initial consent. Copying of this publication is in violationritten of the public offering and reportedly has been in talks with six to eight investment banks, including Federal Copyright Law (17 USC 101 et seq.). Violators Goldman Sachs may be subject to criminal penalties as w , Citigroup, Wachovia for substantial monetary damages, includingell asstatutory liability Christiansen and Merrill Lynch, as possible underwriters. damages up to $100,000 per infringement, costs and , cfo of the Salt Lake City company, did not return repeated calls and bankersKen ❍ ❍ attorney’s fees. Copyright 2004 Institutional Investor, either declined to comment or did not return calls. Bill me Check enclosed (please make check payable to Institutional Investor News) Inc. All rights reserved. Bankers and industry peers said the company is highly regarded for its unique technology For information regarding individual subscription rates, and management style and has expanded its reach on the East and West coasts in recent please contact Joe Mattiello at (212) 224-3457. For information regarding group subscription rates years. “They have good and diversified properties and a unique management software system and electronic licenses, please contact Dan Lalor at ❍ ❍ ❍ ❍ (212) 224-3045. I am paying by credit card: Visa Amex Mastercard (continued on page 15) Check our Web site www.corporatefinancingweek.com during the week for breaking news and updates

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Morgan Stanley as a senior banker and member of the management committee. Meguid was with Morgan Stanley for T HE C LOSING BELL 27 years and served as deputy to Perella for close to a decade. What does it all mean? That’s what —Priya Malhotra investors in hybrid securities often say to themselves when Street firms E*TRADE FINANCING come up with a new acronym for (continued from page 1) their proprietary securities. The an interesting, substantially sized deal that was brought on names vary from the mundane to the highly cheap,” he said. Price talk on the coupon was at 5 5/8 to 6 1/8% allegorical. Merrill Lynch can be credited with having with a premium of 20-25%. The deal was printed at 6 1/8% up some of the more involved names which, like its ‘Be 21.2% and traded up in the aftermarket. Convertible executives Bullish’ logo, conjure up images of power and strength. said offerings have been coming out with more buyer-friendly Merrill’s LYONs [liquid yield option notes] were followed terms lately because of an increased sensitivity to price. by its PRIDES [preferred redemption increased dividend While Malik is an outright, his fund benefited from the equity securities] which in turn were modified to create the arbitrageurs who pushed the stock price down ahead of the FELINE PRIDES [flexible equity linked exchangeable pricing as they looked to secure short positions. “This offering PRIDES]. enjoyed a double effect of the stock price, which was already Some investors joke about whether the product is [recovering] from the short selling, as well as the cheap terms.” worthy of the name. “Do they spend more time designing E*Trade stock rose 5.3% on Thursday despite the $650 the structure or coming up with the name?” said Hart million common offering the night before, while the new junk Woodson, senior v.p. of convertibles at GAMCO in Rye, bonds (B+/B1), priced at par with a 7 7/8% coupon, traded as N.Y., and author of Global Convertible Investing The high as 101 1/4. The financing package was co-led by JPMorgan Gabelli Way. “One guy comes up with the structure and and Morgan Stanley. then the rest all copy it. After that, all they need is a brand Elsewhere in the convertible market, investors said Sonic name.” Automotive, an auto dealer, was looking to price $150 million in The ocean has been a source of inspiration for some of convertible sub-notes at 3 3/4 to 4 1/4% up 20-25% and EDO, Credit Suisse First Boston’s hybrids such as the TIDES a defense company, was shopping around a 3 1/2 to 4% [term income deferrable equity securities] and SAILs [stock convertible sub-note at at a 28-32% premium. C&D appreciation income-linked securities.] Technologies and The Pantry priced deals totaling $195 million. Citigroup’s William Ortner, credited with coming up —Dan Shirai with SynDECS, a variation on his shop’s existing dividend Quote Of The Week enhanced common stock securities, said the idea is to make them sound appealing and easy to remember. Who could “It doesn’t smell quite right.”—Michael Maxworthy, partner at forget a name like ICONs [integrated convertible option Marlin & Associates in New York, referring to Friendster’s VCs notes?] apparent desire to cash out two years after their initial investment (see story, page 9). Here are some others you can test yourself with, and a more complete list can be found in Woodson’s book: One Year Ago In Corporate Financing Week BUCS - Beneficial Unsecured Convertible Securities Boston-based TA Associates was aiming to pump $900 million into 12-14 companies across a wide range of industries in 2005. CRESTS -Convertible Redeemable Equity Structured Trust Securities [TA is on track to do 11 investments this year for approximately EPPICS - Equity Providing Preferred Income Convertible Securities $850 million.] Convertible TOPrS - Convertible Trust Originated Preferred Securities SPURS - Shared Preference Redeemable Securities Five Years Ago ACES - Automatically Convertible Equity Securities United American Energy and Duke Energy were seeking to TRACES - Trust ACES — Tax Advantaged ACES issue either bonds or equity under the name American Ref-Fuel, TrENDS - Trust Enhanced Distribution Securities a company the two were purchasing from Allied Waste Industries as a joint venture.

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