1.  Business Recovery Services TMA Meeting – Brighton 7 th March 2007

2.  Business Recovery Services Securing Value for Intangibles in Turnaround AMA – A Different Way 7 March 2007 Business Recovery Services

3. PricewaterhouseCoopers LLP Avoid going too low 3 Who am I? Karen Dukes – Director Specialist in business reviews, exits and work-outs since 1990 in the mid-market Leads the BRS practice in Kent, Surrey and Sussex, part of South Deal Team Examples of assignments include: advising management of £60m turnover retail group on management strategy for return to profitability, and expansion into foreign markets, the AMA of Accuracy International Ltd a manufacturer of precision rifles, the managed exit of an investment in a £10m turnover manufacturer, and the AMA of Zenith Entertainment Limited in 2006.

4. PricewaterhouseCoopers LLP Avoid going too low 4 Agenda 1.Key Messages 2.Why are intangibles important 3.Matrix of issues 4.What is AMA? 5.Case Study 6.Questions

5. PricewaterhouseCoopers LLP Avoid going too low 5 Key Messages Several ways of preserving value of intangibles Timing is important AMA is a tool TDs can trust; maximises value There is always time to investigate an AMA Requires an advisor who knows the market place

6. PricewaterhouseCoopers LLP Avoid going too low 6 Background Britain in 1960 Britain in 2007 Manufacturing Heavy Industry Mining B2B Media B2C

7. PricewaterhouseCoopers LLP Avoid going too low 7 The corporate life cycle © IDEA M&A ACTIVITY GOING PUBLIC RAPID GROWTH MATURITY Fix it Flog it Finish it

8. PricewaterhouseCoopers LLP Avoid going too low 8 Intangible Assets: a matrix Impairment Review Knowhow Ownership Commodity Or “USP”? Third Party Risk Lifetime Of Asset Location, Location FinancialOperational Security of Asset Commercial Reality Brand Valuation Relationship Management Registration Licences Evidence

9. PricewaterhouseCoopers LLP Avoid going too low 9 Historical Playing Field The Usual Game IP introduced to client in difficulty Significant intangible value IP recommends an insolvency appointment Tries to sell the company’s assets to recover the chargeholder debt The Final Score Loss of intangible value Loss of jobs Loss of reputation An unhappy outcome

10. PricewaterhouseCoopers LLP Avoid going too low 10 What is AMA?

11. PricewaterhouseCoopers LLP Avoid going too low 11 When is AMA appropriate? Potential AMA assignment Problems trading in insolvency Burning platform Value in parts of business but not all Value in goodwill Few tangible assets / many intangible Overgeared / Cashburn Company experiencing difficulties Non-core Activities

12. PricewaterhouseCoopers LLP Avoid going too low 12 Interested parties sought Confidentiality letters issued Offers reviewed and contract issued Sale documentation agreed Administration order and sale completed IM issued Data room opened Offer deadline Buyer due diligence 1/022/0224/02 6/027/0214/0215/0216/02 What actually happens in the process? MarketingNegotiationCompletionStrategy

13. PricewaterhouseCoopers LLP Avoid going too low 13 Window – Case Study Group of Media Companies £17m turnover History of successful programmes Lack of commissioning in 2005/2006 End of a key series Failed share sale Immediate cash crunch!

14. PricewaterhouseCoopers LLP Avoid going too low 14 Window – Issues and Solutions Potential AMA assignment Other assets to sell Comfort in market exposure Vendor Due Diligence Competing purchasers Acceleration Directors Personal risks – wrongful trading Nature of contracts

15. PricewaterhouseCoopers LLP Avoid going too low 15 Window – Benefits Benefits Preserved intangible asset values – goodwill – contracts Robust and reliable process Avoids tyre kickers Stakeholders on course to be repaid Preservation of jobs Avoids adverse publicity, key in reputational business

16. PricewaterhouseCoopers LLP Avoid going too low 16 Key Messages Several ways of preserving value of intangibles Timing is important AMA is a tool TDs can trust; maximises value There is always time to investigate an AMA Requires an advisor who knows the market place

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