1. Presentation to the Board of Directors January 29, 2010
Project Aardvark
Presentation to the Board of Directors
January 29, 2010

2. Table Of Contents
Executive Summary 3 Aardvark Valuation 5 Potential Acquisitions 11 Process Recommendations 16 Appendix 19

3. Executive Summary

4. Executive Summary
As of January 29, 2010, Aardvark’s share price and valuation are at all-time highs, having more than doubled since early 2009
As Aardvark’s stock price has soared in value, it has also generated over $35B in cash & cash-equivalents
As Aardvark’s cash balance grows, it is likely to face shareholder pressure to re- invest the cash in its business and to make significant acquisitions
Given Aardvark’s strong currency and cash balance, it could easily make several “tuck-in” acquisitions – or larger-scale acquisitions to acquire customers
Such a strategy would allow Aardvark to capture more of the smartphone, laptop, and desktop markets, and significantly improve its software offerings
Given Aardvark’s cash position, such acquisitions could be made with 100% cash – or in the case of a larger deal, stock could also be used

5. Aardvark Valuation

6. Valuation Summary
Aardvark’s current share price of $ far exceeds the value implied by comparable public companies
Recent comparable transactions show higher implied valuation ranges due to flurry of consolidation and hardware M&A activity over 2009
Discounted Cash Flow Analysis under base-case assumptions shows implied valuation on-par with Aardvark’s current share price, implying that share price is justified
All valuation analysis is based on “base-case” financial projections in line with Wall Street analyst expectations
Given Aardvark’s cash balance and high valuation multiples vs. similar public companies, few competitors are well-positioned to make substantial acquisitions

7. Aardvark Valuation Summary

8. Aardvark Comparable Public Companies
Comparable Public Companies – Operating Metrics
Comparable Public Companies – Valuation Multiples

9. Aardvark Precedent Transactions

10. Aardvark Discounted Cash Flow Analysis
DCF Assumptions:
Discount Rate: %
Terminal EBITDA Multiple: x
Model Uses “Base Case” Financial Projections
Mid-Year Convention Used For PV Of Cash Flows

11. Potential Acquisitions

12. Potential Acquisitions
Given Aardvark’s large cash balance, it could make a wide variety of acquisitions – ranging from small “tuck-in” deals to acquire technology and IP to larger deals driven by customer or market share acquisition
Tier 1 Potential Acquisitions
“Tier 1” acquisition candidates are worth over $1 billion and would significantly boost Aardvark’s market share or result in substantial revenue or cost synergies
Leading candidates include ARM, for its chipset technology and integration with Aardvark’s existing products, and Research in Motion – to capture additional share in the corporate smartphone market
Tier 2 Potential Acquisitions
“Tier 2” acquisition candidates are worth less than $1 billion and would enhance Aardvark’s core technology and fill in gaps in existing products
Potential acquisitions include specialized chipset and semiconductor companies as well as Web 2.0, social media, and mobile software companies

13. Potential Acquisition Candidates
Tier 1 Acquisition Candidates
Tier 2 Acquisition Candidates

14. Financial Information:
Company Profile: ARM
Management Team:
Warren East CEO
Tudor Brown President
Graham Budd COO
Mike Muller CTO
Tim Score CFO
John Cornish EVP, Systems
Ian Drew EVP, Marketing
Antonio Viana EVP, Sales
ARM Holdings
Headquarters: Cambridge, UK
Employees: 1700
Founded: 1990
ARM Holdings is a supplier of semiconductor intellectual property and components of digital electronic products. It designs and licenses intellectual property rather than manufacturing and selling semiconductor chips, and it licenses its IP to a wide network of hardware, mobile, and networking companies. It also provides tools to optimize system-on-chip designs.
Key Partners:
Electronic Arts, LSI Logic, Microsoft, National Semiconductor, Nokia, NVIDIA, Rambus, Real Networks, Samsung, and Toshiba.
Financial Information:
Market Cap: $2.5B
Cash: $204M
2009 Revenue: $490M
2009 EPS: $7.85
2010E Revenue: $531M
2010E EPS: $10.97
Products:
Processors – ARM provides 32-bit embedded microprocessors based on a common architecture that delivers high-performance, power efficiency, and reduced system cost.
System IP – Serves as the connection between processors, memory, and peripherals to ensure optimum performance.
Multimedia – ARM provides graphics processors that enable embedded graphics, audio, and video applications.
Physical IP – Provides SoC integrated circuits and logic, embedded memory, and interface IP.
Tools – ARM subsidiaries provide compilers, debuggers, simulators, and other optimization tools for a wide variety of chip and processor families.

15. Company Profile: Research In Motion
Management Team:
Research In Motion designs the BlackBerry smartphone and creates solutions for the worldwide mobile communications market, including a variety of software for the BlackBerry device. In addition to its line of BlackBerry devices, the company also provides enterprise server software to support businesses using the device.
Jim Balsillie Co-CEO
Mike Lazaridis Co-CEO
Don Morrison COO
Robin Bienfait CIO
Brian Bidulka CFO
David Yach CTO
Research In Motion
Headquarters: Waterloo, ON
Employees: 12,000
Founded: 1984
Financial Information:
Products:
BlackBerry Pearl 3G – Provides Trackpad and dedicated media keys as well as SureType technology and 3G network support.
BlackBerry Bold – Provides extended battery life as well as GPS, Wi-Fi, and 3G network support.
BlackBerry Curve 8500 – Includes Trackpad and dedicated media keys, easy media sharing, and 2.0 MP camera.
BlackBerry Tour 9630 – Provides GPS, worldwide compatibility, and 3.2 MP camera.
BlackBerry Storm – Features Wi-Fi, SurePress technology, and 3G network support.
BlackBerry Curve 8900 – Features thin, lightweight design as well as GPS and Wi-Fi support and 3.2 MP camera.
Market Cap: $36B
Cash: $2.5B
2009 Revenue: $13B
2009 EPS: $3.70
2010E Revenue: $17B
2010E EPS: $5.03
Key Partners:
AT&T, Brightstar, Digital China, GPXS, Hewlett-Packard, IBM, Skype, Sprint, Tata Indicom, T-Mobile, Verizon, Virgin, and Vodafone,

16. Process Recommendations

17. Key Recommendations Targeted Buy-Side M&A Broad Buy-Side M&A
We recommend engaging in targeted discussions with the Tier 1 acquisition candidates and assessing their receptiveness to M&A discussions
At the same time, Goldman Stanley will reach out to Tier 2 candidates and introduce Aardvark as a potential acquirer
M&A process with Tier 1 candidates will take significantly longer due to the scale of the companies, so we recommend conducting both processes simultaneously
Depending on responses from Tier 1 and Tier 2 candidates, Goldman Stanley and Aardvark may do additional research to determine other potential acquisitions and then approach them
Targeted Buy-Side M&A
Broad Buy-Side M&A
Fewer than 5 parties contacted
Ranges from 10 to hundreds of companies
6 months to 1 year
Time required is highly variable
Close-ended
Iterative process
Higher success probability
Lower success probability

18. Process Recommendation
Broad Marketing

19. Appendix

20. Aardvark Projected Income Statement

21. Aardvark Comparable Public Companies

22. Aardvark DCF Analysis – WACC Calculation