MelCap Partners, LLC Presentation to Northwest Ohio Manufacturing Forum and EXPO Private Capital Market Analysis November 12, 2010 Securities offered through Burch & Company, Inc. Member FINRA/SIPC.
1 MelCap Partners, LLC Confidential I. Overview of MelCap Partners
2 MelCap Partners, LLC Confidential Qualifications MelCap Partners, LLC (“MelCap”) is a specialized investment-banking advisory firm involved in providing the following financial advisory services to middle- market companies with net sales/transaction values between $10mm to $100mm: Mergers, acquisitions, and divestitures; Private placement of debt and equity capital; General advisory services including business valuations, turnaround plans, and feasibility assessments. The principals of MelCap, along with its financial advisory board, have extensive experience in completing a wide variety of transactions. MelCap is also involved in a number of industry organizations including: I. Overview Alliance of Merger & Acquisition Advisors Association for Corporate Growth American Bankruptcy Institute Turnaround Management Association Commercial Finance Association
3 MelCap Partners, LLC Confidential Qualifications (Continued) I. Overview It should be noted that MelCap is not licensed as a securities broker or dealer by any state or federal government agency. Any services that require a securities license offered herein shall be effected through MelCap’s registered broker-dealer, Burch & Company, Inc. (“BurchCo”), a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investors Protection Corporation (“SIPC”). Albert D. Melchiorre, President of MelCap, is a Registered Principal of BurchCo and Sean T. Demlow, Vice President of MelCap, is a Registered Agent of BurchCo. MelCap and BurchCo are not affiliated entities.
4 MelCap Partners, LLC Confidential Qualifications (Continued) MelCap has been successful in assisting its clients in a variety of assignments. Set forth below is a list of some of our client engagements: I. Overview
5 MelCap Partners, LLC Confidential II. Market Overview
6 MelCap Partners, LLC Confidential II. Market Overview Current State of M&A Market Source: Mergerstat Review
7 MelCap Partners, LLC Confidential II. Market Overview Current State of M&A Market Source: Mergerstat Review
8 MelCap Partners, LLC Confidential II. Market Overview Some of the Key Factors or Drivers Slowly Improving Economy Availability of Bank Debt Interest Rates/Cost of Capital Private Equity Availability
9 MelCap Partners, LLC Confidential Improving Economy II. Market Overview Source: Econstats
10 MelCap Partners, LLC Confidential II. Market Overview Source: S&P/Portfolio Management Data Availability of Bank Debt
11 MelCap Partners, LLC Confidential Interest Rates / Lower Cost of Capital II. Market Overview Source: Federal Reserve Bank
12 MelCap Partners, LLC Confidential II. Market Overview Source: Yahoo! Finance Public Equity
13 MelCap Partners, LLC Confidential Private Equity II. Market Overview Source: Private Equity Analyst
14 MelCap Partners, LLC Confidential Private Equity by Fund Type II. Market Overview Source: Private Equity Analyst
15 MelCap Partners, LLC Confidential II. Market Overview Source: S&P/Portfolio Management Data Increasing Equity Contribution
16 MelCap Partners, LLC Confidential Increased Bankruptcy Filings II. Market Overview Source:American Bankruptcy Institute (“ABI”)
17 MelCap Partners, LLC Confidential Conclusion II. Market Overview Over the next several months, business owners will be planning to exit and, therefore, M&A activity will increase due to of the following factors: Economy – Showing signs of improvement during 2010: Retail Sales – up 7.7% from 2009; New Home Sales – up 6.6% in September ‘10; Intel’s Sales – up 18% in 3 rd quarter 2010; Durable Goods – up 3.3% in September ‘10; Exports – up 5% in 3 rd quarter Capital Gains Tax Rate – Set to increase in 2011, which will drive retirement aged business owners to consider selling; Increased Availability of Capital – Banks return to lending and PEGs need to deploy capital in order to raise new fund.
18 MelCap Partners, LLC Confidential Contact Information Sean T. Demlow Vice President For additional information on MelCap Partners, please feel free to visit our website: Normandy Park Drive ● Suite 285 ● Medina, Ohio Phone 330/ ● Fax 330/ Thank you!