1. TAITWALKER.CO.UK TAIT WALKER What’s happening in the market ?

2. 2 TAITWALKER.CO.UK CONTENTS  Funding market changes  Sources of Funding  Private Equity Funding

3. 20122014 Personal injection42% Reported credit issues12% Use of external finance46% Happy non seekers of finance 73% Loan application successful 58% Access to finance a Major Obstacle 12% 3 29% 7% 37% 82% 65% 6% FUNDING MARKET CONTINUES TO CHANGE… 3

4. TAITWALKER.CO.UK Pre Credit Crunch (9 years) Post Credit Crunch (6 years) Annual decrease Deals 14178(20%) Acquisitions 5628(25%) MBOs 5810(74%) …AND DEAL FUNDING HAS CHANGED HUGELY 4

5.  Management Buy Outs are becoming more viable  UK SMEs are acquiring UK companies  Investment in the long term is increasing (despite a pre election blip)  …there is a shortage of good SMEs / opportunities for Funds to invest …AND THERE IS MORE DEMAND THIS YEAR 5

6. Low High Anticipated Investor Return Financial/Operational control Low High  Personal  Family  Internal Grants Bank Financing Private Equity SOURCES OF FUNDING 6

7. WHEN TO USE DIFFERENT FUNDING SOURCES 7

8. Seed / Venture Capital UK Steel Private Equity Angels Crowd funding Business Growth Fund JEREMIE Funders PRIVATE EQUITY – DIFFERENT TYPES 8

9.  Funding a step change − Rapid, organic growth − ‘Buy and build’  Effecting a change of management or control − Buy-in − Buy-out − Cash out  Funding long term development AND  Where there is a funding gap which banks /other sources can not meet PRIVATE EQUITY – WHEN TO USE 9

10. UK Steel Enterprise: Investment for Growth and Management Buy - Outs

11. Who are we? What do we do? Business finance – Investment Fund Criteria / clients / contacts

12. Who are we? Part of Tata Steel Core part of Group corporate citizenship policies Invests in steel-making areas of UK Established for 40 years Not for profit / self funding

13. What do we do? Investment Fund - providing both loan and equity finance Business & Innovation Centres Community Support Initiatives Response to Tata Steel re-structuring

14. Loans Up to £50,000 unsecured at interest rates of (typically) from 7% Up to £100,000 for established profitable companies EFG loans – if eligible Fixed interest rates Term typically 3-5 years Security & personal guarantees not necessarily required

15. Equity Fund Backed by UK Steel Enterprise & RGF: The Growth Fund - equity/loan up to £1m Early Stage Fund - equity/loan up typically to £100,000

16. Growth Fund Up to £1m – equity/loan package For growing businesses creating jobs Minority stake required Discounted pricing Leaves control with management Flexible about exit

17. Criteria Must be new jobs can include some safeguarding Not restricted to capex Tees Valley plus Derwentside and West Cumbria

18. Other Criteria Sectors - manufacturing, technology & industrial service sectors, B2B not retail. Purpose - working capital, equipment, premises, relocations, MBO/MBIs, acquisitions, early stage etc

19. Application Process Business plan and up to date financials Simple application form and details Initial meeting Due diligence done locally in the main Different sign offs for different size investments Aim to give an early indication of appetite

20. Some of our clients

21. £400,000 invested to facilitate MBO Specialist Roofline Contractor Good management team Set for significant growth

22. Over £250,000 invested over a series of transactions over a 20 year period Chemical Toll Processing Expansion: working capital Most recent transaction MBO and acquisition Exwold Technology Limited

23. £500,000 invested to grow Scunthorpe site Supplier of frozen food products Rapidly growing - £4m to £10m Expansion: working capital / new premises / small acquisition

24. Durable Technologies Limited Innovative design of lighting control systems Early Stage Equity Growth Fund application Working capital for Growth £100,000 equity and loan investment

25. Our ideal clients? Growth: Turnover £1m - £10m Profitable & growing Planning to create jobs Prepared to sell equity eg step growth or MBO Early stage: Some revenue Need finance to grow Good growth prospects Planning to create jobs Prepared to sell equity

26. Why go to UK Steel Enterprise? We don’t usually require security or personal guarantees Improved terms We leave control in hands of management Flexible about exit A more sympathetic approach to VC

27. Contacts Peter Taylorpeter@uksteelenterprise.co.uk Sarah Thorpesarah@uksteelenterprise.co.uk Tel01642 777888

29. FIRST

30. FRIENDLY

31. INNOVATIVE

32. RESPONSIVE

33. SAFE

34. TEAM

36. Friendly Innovative Responsible Safe Team Friendly – We Love our Customers We are the Irresistible Choice We have Fantastic Community Engagement Innovative – We Challenge Perceptions We have Excellent Market Awareness We Embrace Innovation Responsible – We Keep our Promises We are Responsible about Money We have Intelligent Customers We are Fully Engaged with our Supply Chain Safe – We Never Compromise on Safety Team – Our Business is truly Aligned This is a Great Place to Work We Positively Communicate

37. THANK YOU !