1. 1 Merger & Acquisitions Strategies Jim Perkins Director, Corum Group

2. 2  M&A specialists since 1985 – only software/related tech  Only works on sell-side with privately held firms  Offices globally – 60% of transactions cross border  Developed the “Optimal Outcome” M&A process  Employs a team approach (5) to offloads clients  Senior negotiators are former CEOs – selling/results oriented  Largest educator in the world – helps build buyer relations  Largest proprietary buyer database – provides client advantage M&A specialists since 1985. We only work with: Privately-held firms on the sell-side. Software and related tech companies.

3. 3  M&A specialists since 1985 – only software/related tech  Only works on sell-side with privately held firms  Offices globally – 60% of transactions cross border  Developed the “Optimal Outcome” M&A process  Employs a team approach (5) to offloads clients  Senior negotiators are former CEOs – selling/results oriented  Largest educator in the world – helps build buyer relations  Largest proprietary buyer database – provides client advantage Offices globally – 60% of transactions cross border

4. 4 Optimal Outcome process Team approach Largest tech M&A educator Largest database Sold more software-related firms than anyone

5. 5 1 1 What International Buyers Want Today FINANCIAL  Revenue  Earnings  Growth Rate  Cash Flow  Balance Sheet  Leadership  Talent/Skills  Product/Technology  Sales Channels  Customer Base ORGANIZATIONAL  Market Growth  Market Position  Level of Competition  Barriers to Entry/ Exit  Market Beach-head MARKET

6. 6 Recent Corum Transactions

7. 7 has acquired JAPANFRANCESWEDEN SPAINKOREAJAPAN

8. 8 Overview - Market Perspective M&A Valuations Optimal Outcome Avoiding the Deal Disasters Improve Your Odds Closing Thoughts

9. 9 OVERVIEW MARKET PERSPECTIVE

10. 10 disruptive We are in an age of technology

11. 11 M&A ACTIVITY VALUATIONS

12. 12 Excess Cash Driving M&A Cash ReservesIncreaseHeld Offshore 20072012AmountPercentAmountPercent $9$121*$112*1244%*$83*68%* $6$67*$61*1017%*$58*87%* $6$32*$26*433%*$25*80%* $6$45$39650%$2044% $3$46$421050%$4189% $9 $15$667%$747% $4$9$5125%$556% All estimates in US $Billions *As of Dec. 2012

13. 13 Top Strategic Acquirers: 2012

14. 14 How much uncommitted funds do the strategic buyers have available? $350B Source: Corum Group Research

15. 15 Top Private Equity Acquirers: 2012

16. 16 How much uncommitted funds does Private Equity have available? $1 Trillion Source: Prequin

17. 17 1.Extraordinary change – interrelated mega trends 2.Strategic buyers have record cash 3.Debt is at lowest cost ever 4.Private equity - over $1 trillion available 5.New Asian buyers 10 Reasons Tech M&A Will Remain Strong

18. 18 6.Entrance of new non-tech buyers (e.g. Bosch) 7.The JOBS Act - Crowdfunding 8.American companies are relatively cheap 9.Most US buyers cash is international (e.g. Skype) 10.Software rising in importance (e.g. HP, IBM, Dell) 10 Reasons Tech M&A Will Remain Strong

19. 19 Asia’s Growing Leadership  Game technology innovators  Mobile industry leaders  Expanding IT services companies  State-of-the-art manufacturing  Ecommerce ecosystems  Growing online media presence

20. 20 ACHIEVING AN OPTIMAL OUTCOME

21. 21 What is an Optimal Outcome?

22. 22 Valuation Maximization

23. 23 Creating the best transaction structure

24. 24 Minimizing personal liability/risk

25. 25 Reducing tax liability and holdbacks

26. 26 Structuring ideal employment/non-competes

27. 27 Providing for proper integration

28. 28 1 1 8 Stages for an Optimal Outcome

29. 29 1 1  Set tasks, timeline  Allocate staff resources  Conduct internal due diligence  Compile business/marketing plan  Ready financials/projections  Ready presentation materials  Begin collecting due diligence materials Stage 1: Preparation

30. 30 1 1 Stage 2: Research  Prepare buyers list (A&B level, financial, non tech)  Perform strategic analysis on each buyer  Prepare preliminary valuation  Determine proper contact (Execs, EA’s, advisors)  Outside advisor/board/investor influencers  Prepare position statement for each buyer

31. 31 1 1 Stage 3: Contact  Create introductory correspondence  Draft/customize executive summary  Execute NDAs and non-solicitations  Screen initial interest, valuation expectations  Establish log on all communications  Refine position/process based on feedback

32. 32 1 1 Stage 4: Discovery  Coordinate conference calls, site visits, and meetings  Establish technology review process  Prepare formal valuation report  Develop synergy and contribution analysis  Set up NDA with customers, contractors, etc.  Finish due diligence on buyer

33. 33 1 1 Stage 5: Negotiation  Organize and host final visits  Provide structure & valuation guidance  Create an auction environment  Negotiate with top bidder(s)  Sign Letter of Intent (L.O.I.)  Inform other bidders of No Shop

34. 34 1 1 Stage 6: Due Diligence  Verification of financial statements/ projections  Determine if outside advisors/opinions needed  Establish confidential data room  Technical/Legal/Ownership due diligence  Written explanation of business model/methodologies  Complete definitive agreement/ attachments

35. 35 1 1 Stage 7: Closing  Final reps & warranties  Determine escrow hold-backs  Final opinion(s)  Sign contracts  Arrange payment/distribution  Regulatory filings  Disclosure Schedules

36. 36 1 1 Stage 8: Integration  Advanced planning – during negotiation  Determine synergies  Best practices analysis  Interim transition team  Employee retention plan  Set up monitoring/reporting

37. 37 In a global search, what percentage of the time will other buyers be willing to pay more than the first party that approached you? 75% Source: Corum Group Research

38. 38 Resell/License Do you want to buy my company? J.V./Alliance M&A Uniquely Allows Entry to Top Execs CEO MKTFINMANF DIV The only time you can go straight to the top

39. 39 5 Major Benefits of a Professional Process Model The preparation process will help forge a better business model for your firm 1 Research Your strategic position will improve from the research/ positioning process 2 Market Feedback Invaluable data/insights straight from the top will help improve your value 3 Relation- ships 70% of parties that go under NDA may not be able to buy—but could partner, adding value 4 Exit The merger, asset sale, or financial recap of your company 5 39

40. 40 AVOIDING THE DEAL DISASTERS

41. 41 Workload, Value Destroyers, Deal Killers Top 60 Documents and Projects Top 5 Value Destroyers Top 10 Deal Killers This M&A process workload and pitfall analysis is based on data supplied by the World Technology Council (WTC), Corum’s 400-member advisory board of past sellers, industry experts, buyers and investors.

42. 42 1.Confidentiality—internal/external 2.Theft of technology 3.Loss of staff (non-solicitation) 4.Wear on CEO/management 5.Business drop-off—lack of focus 6.Going to market too late Top 6 Value Destroyers

43. 43 Top 10 Deal Killers 1.Dealing with only one buyer 2.Misalignment: shareholders/empl/mgmt 3.Contact at the wrong level 4.Improper research of potential buyers 5.Misunderstanding buyer process/models

44. 44 Top 10 Deal Killers 6.Inability to portray value properly 7.Improper due diligence preparation 8.Not qualifying buyers properly 9.Not orchestrating all buyers properly 10.Ego – Greed – Arrogance

45. 45 THE MOST IMPORTANT TRANSACTION OF YOUR LIFE CLOSING THOUGHTS

46. 46 What percentage of self-managed M&A transactions fail? 80% Source: Corum Group Research You need a professional process to improve your odds

47. 47 This seller is serious. Leverage using a Professional Intermediary I may not be the only bidder. PotentialAcquirer Seller Intermediary Wonderful if I buy you, terrible if I don’t.

48. 48 What is the average improvement from first offer to LOI (Letter of Intent) with a professional M&A process (i.e., creating an auction environment)? 48% Source: Corum Group Research

49. 49 After the Deal – Celebration

50. 50 Contact Information Visit our website at: www.corumgroup.com Corum Group Ltd. 19805 North Creek Parkway Suite 300 Bothell, WA 98011 USA +1 425-455-8281 Corum Group International S.à.r.l. Buechenstr. 9 8185 Winkel Switzerland +41 43 888 7590