Private Equity and Recruitment Gary Tipper, Palatine Private Equity Ian Langley, Air Energi Group

Palatine Private Equity  Independent private equity house, owned and controlled by the Partners  Entrepreneurial team with over 50 years private equity experience  £100m maiden fund raised in 2007 fully invested in nine deals  £150m second Fund now raised and being invested  Equity investments from £10m to £25m  Offices in Manchester, London and Bristol  All deals led by the decision makers 2

What is Private Equity ?  Medium to long term funding in return for an equity stake in a business  There are a lot of different private equity firms ◦ Different fund sizes ◦ Different types of deals ◦ Different returns expectations  Typically private equity investors look at an investment period of 3 to 5 years  A shareholder relationship not just a source of funding 3

What can private equity funding do ?  Management buyouts  Shareholder restructurings  Cash out / equity release  Fund acquisitions / buy and build strategy  Growth capital 4

Why recruitment / staffing ?  Ability to dominate a sector and/or functional niche  Control of scarce resource  Potential for rapid organic growth  Drive scale  Sector and sub sector consolidation, acquisitions, buy and builds  International expansion  Low capex requirements 5

Air Energi Group  AEG provides expertise to the energy industries. This includes contract, project and staff hire teams and individual engineers and technical persons together with full global compliance and logistical support services.  AEG places around 2,500 consultants/contractors on both upstream and downstream energy projects  Palatine backed the management buyout in August 2009  Ian Langley, Chairman, led the deal  Provided an exit for some legacy shareholders  Enables other legacy share holders to realise some value from the business 6

Air Energi Group – Post Deal  Appointed a independent Non Executive Director  Completed two acquisitions – PMG and Indonesia  Refinanced with HSBC $50M global facility  Broadened the global operating network – 25 offices  Grew profitability to more than £1-m at exti from £5m at entry  Completed a secondary buyout with LGV in October 2012  An overall return of 3x cash in just over 3 years for PE and Legacy Shareholders  New Management shareholders saw a 10x+ return 7

What do we look for ?  Quality management team, strength in depth  Well thought through and deliverable business plan  Businesses operating in a niche (functional or sector)  Scalable business  Good margins  Strong pipeline, good visibility of earnings 8

Be prepared  Get your business in good shape for a transaction  Legal, compliance, paperwork in order ◦ Banking ◦ Insurance ◦ Contracts ◦ Tax ◦ All jurisdictions  Financials ◦ P&L ◦ Balance Sheet ◦ Ebitda ◦ Margins ◦ Cashflows ◦ Cost structure ◦ Geographies 9

Be prepared  Get good advisors ◦ Corporate Finance Advisor (someone who understands your sector) ◦ Accountant / Tax / Audit ◦ Lawyer ◦ People that you trust  Due diligence ◦ Financial ◦ Legal ◦ Management assessment ◦ Commercial/market  Deals and due diligence takes time ◦ Meetings ◦ Management time / long hours ◦ There will be bumps along the way 10

Be prepared  Do your own due diligence on potential funders ◦ Speak to management teams they have backed ◦ Speak to other advisors that have worked with them  Choosing the right funder is crucial ◦ You’re going to work together for 3-5 years ◦ Chemistry needs to work 11

Summary  Private equity can be a good source of funding to accelerate growth  It is not something to be rushed into, consider properly and assess your options  Have a deliverable business plan  Be clear about what the funding is for and how it will be used  Be prepared, have the business ready  Do your own homework on potential funders 12

Gary Tipper Managing Partner Ian Langley Chairman