Life Cycle of a Transaction Patrick Stone – FDD director Transaction Services FEI Boston Life Cycle of a Transaction Patrick Stone – FDD director Jason Delaney – DDV director Strictly private and confidential Draft 24 March 2017

5 Critical Success Factors 12 6 Integration Challenges 13 Contents Agenda Page 1 Acquisition Mindset 3 2 Impact of Diligence 6 3 Transaction Overview 10 4 Integration Timeline 11 5 Critical Success Factors 12 6 Integration Challenges 13 7 Deal Success and Accountability 14 FEI Boston • Life Cycle of a Transaction 2

Business rationale in deciding to pursue an acquisition Section 1 – Acquisition Mindset Contents Business rationale in deciding to pursue an acquisition Buy or build growth strategies Achieve critical mass Enter new markets / increase market share Acquire technological know-how / intellectual property Complement existing business Diversify product or business portfolio Defense tactics Benefit from synergies Long term investment FEI Boston • Life Cycle of a Transaction 3

Section 1 – Acquisition Mindset Contents FEI Boston • Life Cycle of a Transaction 4

Focus areas for Corporate buyers Section 1 – Acquisition Mindset Contents Focus areas for Corporate buyers How will performance change post acquisition? How does this fit with my existing operations? How should I integrate it and what will be the costs? What cost savings / synergies can I achieve? What is the appropriate management structure and cost base? What is the optimal tax structure? What will the impact of the acquisitions be on my group accounts? FEI Boston • Life Cycle of a Transaction 5

Linking diligence to value Section 2 – Impact of Diligence Contents Linking diligence to value Advantages for acquirers How a due diligence approach impacts valuation – Typical purchase price components: Enterprise value Equity value Purchase - consideration Debt & debt- like items Working capital adjustments Other price adjustments Normal level or estimated closing date WC should be provided by seller Quality of Earnings Debt & Debt-Like Working capital SPA/APA Considerations Post Deal True-Ups: Indebtedness, Working Capital, Other Indemnities: Tax, Litigation, Contingencies As determined by the mechanics of the SPA Most deals “Cash/Debt free” EV commonly based on EBITDA multiple or DCF FEI Boston • Life Cycle of a Transaction 6

Importance of diligence - common areas of focus include… Section 2 – Impact of Diligence Contents Importance of diligence - common areas of focus include… Assessment of quality and sustainability of revenues, earnings and cash flows Assist in the decision process by confirming the existence of any deal breakers Acquisitions are often valued as a multiple of EBITDA Diligence should be designed to uncover unusual trends and non-core transactions to arrive at “normalized” EBITDA. Such items are often removed from EBITDA by buyers and may reduce purchase price. Diligence procedures help to identify significant issues, risks and opportunities, such as: Concentration of revenue, margins and earnings Purchase-supply agreements with parent or other related parties Change of control issues Identification of balance sheet risks and exposures Provide opinions of the quality of management team Assist in drafting selling documents (representations, warranties and indemnities) Consider focus of post-acquisition integration FEI Boston • Life Cycle of a Transaction 7

Types of diligence No access Section 2 – Impact of Diligence Contents Types of diligence No access Conduct high level diligence based on publicly available documents including: Annual and quarterly reports Conference calls, press releases, analyst reports Limited access Typical in an auction process Access to certain information and limited conference calls with management Other detailed information may not be obtained until exclusivity is achieved Critical for focus to be on deal issues vs. “nice to know” information Full access Typical when seller has obtained exclusivity Usually onsite access to Target management Generally obtain information via online dataroom Sensitive information Competitively sensitive situations Certain governmental groups and agencies Clean Room option FEI Boston • Life Cycle of a Transaction 8

Deal Process – Illustrative Phasing Example Section 2 – Impact of Diligence Contents Deal Process – Illustrative Phasing Example Phase I – Pre-exclusivity Phase II Preliminary stage First round Second round Final stage Potential buyers identified Teasers prepared Confidential Information Memorandum prepared Seller prepares dataroom Teasers circulated CIM sent to interested parties (Financial/Trade) First round indicative offers submitted Indication of Interest drafted Shortlist of bidders Shortlisted bidders attend management presentations Access to dataroom Preliminary DD Limited access LOIs submitted & evaluated Preferred acquirer selected Exclusivity period Negotiation Management meetings, site visits Phase II DD Completion FEI Boston • Life Cycle of a Transaction 9

Deal Acquisition Timeline Section 3 – Transaction Overview Contents Deal Acquisition Timeline Strategy Assessment Options Evaluation Target Approach Execution Closing Post-Acquisition Support Closing and Post-Acquisition Support Deal Strategy Target Approach & Execution Strategy advice and assessment Growth strategy Acquisition strategy / Deal business case Investment hypothesis Alignment with Corporate Development Target search, screen and evaluate Strategic fit, synergy analysis Design target approach strategy Initial views on: Valuation/share price implications Accretion/dilution Potential structuring and financing options Target approaches Initial information exchange Refine initial views on valuation, structure and financing options Prepare LOI Due diligence: Financial, HR, pensions Commercial Tax Day-one integration planning Deal structuring (accounting and tax) Deal financing Negotiation support on all key terms BOD presentations Purchase price allocation Accounting conversion Compliance with accounting standards Monitoring of post- closing adjustments Monitoring of tax consequences Integration management/PMO Go-to-market Business processes Legal entities Synergy analysis and tracking Business performance analytics TSA performance monitoring FEI Boston • Life Cycle of a Transaction 10

Due Diligence Kick-off Section 4 – Integration Timeline Contents Integration Timeline Pre-Deal Pre-Close First 100 Days Beyond 100 Days Assess synergies, costs, and risks Assess target operations, systems and supporting processes Assess the management team Identify and quantify costs and synergies Identify risks and opportunities Identify valuation opportunities to improve the bid Set the course Articulate the strategy for the combined company Determine the degree of integration and non-negotiables Identify and protect core operations out of integration scope Customize integration structure and approach Designate integration leadership at all levels and establish the Integration Management Office Develop communication plan and execute early communications Jumpstart the Integration Leverage due diligence findings Formulate an initial integration vision Engage resources to lead integration activities Deploy a structure to govern the integration process Plan for Day One Identify and execute Day One requirements across all functions Identify and resolve Day One risks Develop 100 Day Plan including quick wins Secure resources and implement retention plan Execute 100 Day plan Deliver tactical integration projects Deliver quick wins Capture key insights Obtain operational insights that impact/ drive the deal value Identify operational risks that need to be addressed before integration Create detailed integration plan Consolidate all integration initiatives into an executable plan Ensure plan fits with core business and prioritize with other initiatives Assess resource capacity and requirements Align incentive arrangements with integration objectives Monitor and address dependencies Maximize value through future state implementation Implement, track and monitor integration execution to ensure deal value capture Design the future state Design functional and operational "to be" states Identify, value, and prioritize key integration initiatives and synergies Develop leadership and organization structure Assess cultural differences and develop people change program Due Diligence Kick-off Announcement Deal Close 100 Days Post Close FEI Boston • Life Cycle of a Transaction 11

Critical Success Factors and Top Priorities Section 5 – Critical Success Factors Contents Critical Success Factors and Top Priorities Priority Discussion Topics / Risk Mitigation Set the Vision Define an integration strategy and establish guiding principles Evaluate opportunities for synergy (revenue or cost) and / or market growth Establish a central Integration Management Office (IMO) and assign owners to drive execution Make strategic decisions early in the process (e.g., organizational structure, leadership roles, etc.) Prioritize work that drives strategic initiatives, growth and / or synergies Preserve the Business Focus on business continuity on Day 1 and protect customer base / brand Establish TSA agreements to support the business transition to end state Focus on employees and retaining key talent transferring with the deal Establish a communications and change management program to support the business and the transition Minimize interim processes, be flexible and open minded and take the best from both companies Accelerate the Integration Quickly capture and realize synergies to demonstrate EBITDA impact Exit TSA agreements and establish integrated capabilities for NewCo Communicate early and often to stakeholders including internal (employee) and external (customer / vendor) constituents Manage one-time integration costs through review and tracking Focus on the End State not the near term milestones FEI Boston • Life Cycle of a Transaction 12

Common Challenges that Diminish Value Section 6 – Integration Challenges Contents Common Challenges that Diminish Value Start too Late. Speed is critical to executing the transaction, integrating, and transitioning back to business as usual. Effective acquirers engage functional leaders early in the due diligence process to jumpstart the planning process. Failure to Address the Soft Issues. Poorly run integrations typically focus only on tactical development and execution of workplans. Cultural, communication, and governance components are critical to a large-scale integration. Working in Silos. Effective acquirers develop a single integration strategy that incorporates all functional areas. This ensures consistency of delivery, level-sets expectations, and provides complete visibility of execution across the enterprise. Lost in the Details. Many organizations view integration as a tactical project, focused purely on workplan development and execution to integrate all business functions. Proper time should be spent rethinking the business model prior to executing a generic integration plan. Closed Minded (“We are the best at what we do”). Effective acquirers have no pride of ownership. When executing large-scale mergers, effective acquirers take time to understand the target and collaboratively select the best people, processes, and technology to support the new business. Market Awareness at the Lower Levels. For public companies, the market expects to see value in two quarters after a large acquisition. By educating and holding the integration team to these timelines, the success of the integration is much more likely to achieve shareholder objectives. Delayed Decision-Making. Leadership and Executives need to take active involvement in the integration. Early in the process, regular involvement is critical to make decisions that will guide the overall planning and execution of the integration. Issues that Diminish Deal Value Potential Deal Value Start too Late Failure to Address Soft Issues Working in Silos Lost in Details Closed Minded Market Awareness at Lower Levels Delayed Decision-Making Value can be diminished by through the impact of multiple factors. While acquirers focus their efforts to address the most prevalent issues, they often lose focus of others. FEI Boston • Life Cycle of a Transaction 13

Deal Success and Accountability Section 7 – Deal Success and Accountability Contents Deal Success and Accountability “Board Members and Senior Management are becoming increasing more accountable for deal success” FEI Boston • Life Cycle of a Transaction 14