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This presentation was prepared exclusively for the benefit and internal use of the JPMorgan client to whom it is directly addressed and delivered (including
such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or
transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes
only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by JPMorgan. Neither this
M E TH OD S
presentation nor any of its contents may be used for any other purpose without the prior written consent of JPMorgan.
The information in this presentation may be based upon any management forecasts provided to us and reflects prevailing conditions and our views as of this
date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification,
the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Company or which was
otherwise reviewed by us. In addition, our analyses are not and do not purport to be appraisals of the assets, stock, or business of the Company or any
VAL U ATI O N
other entity. JPMorgan makes no representations as to the actual value which may be received in connection with a transaction nor the legal, tax or
accounting effects of consummating a transaction.
Notwithstanding the foregoing (but subject to any applicable federal or state securities laws), JPMorgan and the Company may disclose to any and all
persons, without limitation, the tax treatment and tax structure of any transaction contemplated hereby and all materials (including opinions or other tax
analyses) relating thereto, so long as such disclosure is not made prior to the earlier of (x) public announcement of discussions relating to the transaction or
of the transaction itself and (y) the execution of an agreement to enter into the transaction.
T O
JPMorgan’s policies prohibit employees from offering, directly or indirectly, a favorable research rating or specific price target, or offering to change a
rating or price target, to a subject company as consideration or inducement for the receipt of business or for compensation. JPMorgan also prohibits its
research analysts from being compensated for involvement in investment banking transactions except to the extent that such participation is intended to
I N T R O D U C TI O N
benefit investors.
JPMorgan is a marketing name for investment banking businesses of J.P. Morgan Chase & Co. and its subsidiaries worldwide. Securities, syndicated loan
arranging, financial advisory and other investment banking activities are performed by J.P. Morgan Securities Inc. and its banking affiliates. JPMorgan deal
team members may be employees of any of the foregoing entities.
Valuation overview 1
LBO analysis 28
VAL U ATI O N
Acquisitions Divestitures
Acquisitions Divestitures
How much should we How much should we
How much should we How much should we
pay to buy the sell our
pay to buy the sell our
company? company/division for?
company? company/division for?
Research
Research Fairness
Fairnessopinions
opinions
Should
Shouldourourclients
clientsbuy,
buy, IsIsthe
theprice
priceoffered
offeredforfor
sell
sellororhold
holdpositions
positionsinina a company/division
company/divisionfair fair
given
givensecurity?
security? (from
(froma afinancial
financialpoint
pointofof
view)?
view)?
Valuation
Hostiledefense
Hostile defense Public
Publicequity
equityofferings
offerings
IsIsour
ourcompany
company For
Forhow
howmuch
muchshould
shouldwe
we
undervalued/
undervalued/ sell
sellour
ourcompany/division
company/division
vulnerabletotoa araider?
vulnerable raider? ininthe
thepublic
publicmarket?
market?
Valuation
methodologies
Publicly traded
Comparable Leveraged
Discounted cash comparable
acquisitions buyout/recap Other
flow analysis companies
analysis analysis
analysis
In
In arriving
arriving at
at a
a preliminary
preliminary valuation
valuation for
for its
its clients,
clients, JPMorgan
JPMorgan utilizes
utilizes several
several methodologies
methodologies that
that are
are
consistent with industry practices
consistent with industry practices
Enterprise value = Market value of all capital invested in a business1 (often referred to as
“transaction value”)
The value of the total enterprise: market value of equity + net debt
Net debt
Enterprise Enterprise
value value
O V E R VI EW
Equity value
Equity
Equity value
value or
or offer
offer value
value Enterprise
Enterprise value
value or
or transaction
transaction value
value
Multiples of Multiples of
Net income Sales
After tax cash flow EBITDA
Book value EBIT
O V E R VI EW
VALUATI O N
Implied
Implied share
share price
price
$64.60 $60.00
$60.00
$54.70 $55.50
$50.50 $55.00
50.00
$45.00 $50.40
$47.10
40.00
$34.75 $38.00
$37.30
$37.60 Current stock
30.00 price = $34.20
20.00
$19.25
O V E R VI EW
10.00
52-week 7.0x—9.0x Analyst price 1.6x LTM sales 7.0x—9.0x With synergies 7.0x—9.0x
trading range 2004E EBITDA target 9.8x LTM EBITDA 2008E EBITDA of $1,500mm 3 25% IRR
13.3x LTM EBIT 8.0%—11.0% LTM EBITDA
Public market Precedent discount rate
comparables 2 comparable transactions DCF analysis LBO
1 Share prices are based on 157.6 million diluted shares outstanding
2 Forecasts are based on JPMorgan research
VALUATI O N
Valuation overview 1
LBO analysis 28
VAL U ATI O N
Projections Project the operating results and free cash flows of a business over the
forecast period. The typical forecast period is 10 years. However, the
Step
Step 11 range can vary from five to 20 years depending on the profitability
horizon.
Step
Step 44
free cash flows and terminal value to the
present.
C A S H
Unlevered free cash flows can be forecast from a firm’s financial projections, even if
those projections include the effects of debt
Start your calculation with EBIT (earnings before interest and taxes)
1 Although beyond the scope of our current discussions, you should only include actual cash taxes paid in the DCF. Depending on the firm and industry, you may want to
adjust for the non-cash (or deferred) portion of a firm’s tax provision. The tax footnote in the financial statements will give you a good idea of whether this is a
meaningful issue for your analysis
Stand-alone
Stand-alone projections
projections for
for Company
Company X
X ($
($ millions)
millions)
Fiscal year ending December 31,
2001 2002 2003 2004E 2005E 2006E 2007E 2008E
Net sales $400.0 $440.0 $484.0 $532.4 $585.6 $644.2 $708.6 $779.5
EBITDA 80.0 88.0 96.8 106.5 117.1 128.8 141.7 155.9
Less: Depreciation 12.0 13.2 14.5 16.0 17.6 19.3 21.3 23.4
EBITA 68.0 74.8 82.3 90.5 99.6 109.5 120.5 132.5
Less: Taxes at marginal rate 27.2 29.9 32.9 36.2 39.8 43.8 48.2 53.0
Tax-effected EBITA $40.8 $44.9 $49.4 $54.3 $59.7 $65.7 $72.3 $79.5
Plus: Depreciation 16.0 17.6 19.3 21.3 23.4
Plus: Deferred taxes — — — — —
Less: Capital expenditures 20.0 22.0 24.2 26.6 29.3
Less: Incr./(decr.) in working capital 10.0 8.5 7.0 5.5 4.0
Unlevered free cash flow 40.3 46.8 53.8 61.4 69.6
Adjustment for deal date (40.3) — — — —
Unlevered FCF to acquirer $0.0 $46.8 $53.8 $61.4 $69.6
Key assumptions:
Deal/valuation date = 12/31/04
Marginal tax rate = 40%
JPMorgan convention is to use the
Discount rate = 10% “mid-year” convention—which
D I S C O UN T E D
Most firms use a combination of debt and equity to fund their operations. The overall cost of
capital is the weighted average of the cost of debt and the cost of equity
WACC = rd * [D *(1-T)] + re * E
D+E D+E
Because interest is tax deductible, the true cost of debt is the after tax rate due to the ability
F L OW
of interest expense to shield taxes. The tax rate used should be the marginal tax rate for each
specific company
C A S H
D I S C O UN T E D
¹ In order to be more accurate, the analyst should try to estimate the current market cost of debt by looking at the market cost of debt of comparable companies (with similar
credit ratings)
- D = E
Equity value Equity value per share1 Implied perpetuity growth rate
Net debt at 2008P EBITDA multiple of at 2008P EBITDA multiple of at 2008P EBITDA multiple of
Discount
rate 12/31/04 6.0x 7.0x 8.0x 6.0X 7.0X 8.0X 6.0x 7.0x 8.0x
8% $100.0 $784.4 $899.0 $1,013.6 $19.17 $21.97 $24.77 0.2% 1.3% 2.1%
9% 100.0 755.8 866.2 976.7 18.47 21.17 23.87 1.1 2.2 3.0
10% 100.0 728.4 834.9 941.4 17.80 20.41 23.01 2.0 3.1 3.9
11% 100.0 702.3 804.9 907.6 17.16 19.67 22.18 2.9 4.0 4.8
F L OW
12% 100.0 677.2 776.3 875.3 16.55 18.97 21.39 3.8 4.9 5.8
C A S H
- D = E
Equity value Equity value per share1 Implied EBITDA exit multiple
Net debt at perpetuity growth rate of at perpetuity growth rate of at perpetuity growth rate of
Discount
rate 12/31/04 2.5% 3.0% 3.5% 2.5% 3.0% 3.5% 2.5% 3.0% 3.5%
8% $100.0 $1,087.8 $1,192.2 $1,319.8 $26.59 $29.14 $32.26 8.6x 9.6x 10.7x
9% 100.0 905.0 977.0 1,062.0 22.12 23.88 25.96 7.4 8.0 8.8
10% 100.0 771.1 823.3 883.6 18.84 20.12 21.59 6.4 6.9 7.5
11% 100.0 668.7 708.1 752.8 16.34 17.31 18.40 5.7 6.1 6.5
12% 100.0 587.9 618.5 652.8 14.37 15.12 15.95 5.1 5.4 5.8
F L OW
FCF * (1+g)
(r - g)
D I S C O UN T E D
Remember
Validate and test projection assumptions
Determine appropriate cash flow stream
Utilize appropriate cost of capital approach
Carefully consider all variables in the calculation of the discount rate
Thoughtfully consider terminal value methodology
Sensitize appropriately (base projection variables, synergies, discount rates,
terminal values, etc.)
F L OW
— NOLs
— Options, warrants, etc.
D I S C O UN T E D
Valuation overview 1
LBO analysis 28
VAL U ATI O N
Once you have chosen the comparable companies, calculate the implied value of
your company by multiplying the company’s historical and projected sales, EBIT,
EBITDA, net income, book value and other key operating statistics by the respective
comparable company multiples
T RAD E D
P U BLIC LY
The key to compiling a trading comparables analysis is to identify companies that are considered comparable
and that closely resemble the composition and function of the Company you are evaluating
SIC code search
Research reports
ANALY SI S
10K
To find comparable companies, look for companies with similar characteristics to those of the business being
valued
C OM P ANY
Operational Financial
Industry Size
Product Leverage
C O M P ARA B L E
Markets Margins
Distribution channels Growth prospects
Customers Shareholder base
Seasonality
Cyclicality
T RAD E D
P U BLIC LY
Even with standard metrics, certain multiples are more relevant for some industries than others
For many industries, FV/EBITDA multiples are the most common trading metric (e.g.
Industrials, Transportation, Distribution, etc.)
For other industries, P/E multiples are more widely followed (Pharmaceuticals, Restaurants,
Biotech, etc.)
ANALY SI S
Reading analyst reports will help you understand the metrics analysts use to value the sector
and the industry
$
$ millions,
millions, except
except for
for per
per share
share data
data
FV/EBITDA4 P/E5
Share % of Equity
Company price1 52-wk. high value2 Firm value3 2004E 2005E 2004E 2005E LTGR5 2004E PEG
Large capitalization
WellPoint $111.05 94.0% $17,926 $19,164 8.9x 7.8x 15.6x 13.6x 15.0% 1.04x
Aetna 87.40 91.9% 14,598 16,211 8.7x 7.8x 12.9x 11.3x 15.0% 0.86x
Anthem 87.35 92.0% 12,264 13,927 7.4x 6.8x 14.0x 12.2x 15.0% 0.94x
ANALY SI S
Cigna 65.22 92.5% 9,273 10,773 7.7x 7.4x 11.3x 10.2x 10.0% 1.13x
Mean 92.6% 8.2x 7.5x 13.5x 11.8x 13.8% 0.99x
Median 92.2% 8.2x 7.6x 13.5x 11.7x 15.0% 0.99x
Mid c apitalization
Oxford $53.62 88.1% $4,561 $4,965 7.8x 7.3x 12.0x 10.9x 12.0% 1.00x
C OM P ANY
PacifiCare 38.25 89.5% 3,752 4,372 7.4x 6.5x 12.5x 10.5x 13.0% 0.96x
Coventry 42.63 90.2% 3,979 4,149 8.9x 7.7x 13.1x 11.4x 15.0% 0.87x
Humana 18.10 75.4% 2,973 3,616 6.8x 6.1x 11.1x 10.1x 13.5% 0.82x
Health Net 26.05 72.8% 3,028 3,427 5.4x 4.8x 9.3x 8.1x 13.5% 0.69x
WellChoice 36.75 94.5% 3,079 3,128 7.3x 6.4x 13.1x 11.5x 15.0% 0.88x
Mean 85.1% 7.3x 6.5x 11.9x 10.4x 13.7% 0.87x
C O M P ARA B L E
UnitedHealth Group $65.41 95.5% $43,979 $46,379 11.2x 9.9x 17.4x 15.0x 17.0% 1.02x
1 As of 4/16/04
2 Based on diluted shares outstanding using the treasury stock method
3 Calculated using equity value plus debt
P U BLIC LY
Ensure you have correctly captured the equity and net debt components
— Diluted shares (includes options using the treasury method and convertibles if in the money)
— Net debt includes preferreds, out of the money converts, capital leases, etc.
Ensure your income statement projections are uniform across your comps
— Adjust for extraordinary items and one time charges
C O M P ARA B L E
Calculate the value correctly (Firm value versus Equity value issue)
P U BLIC LY
Valuation overview 1
LBO analysis 28
VAL U ATI O N
Comparable transactions analysis values a company by reference to other private market sales of
similar businesses.
The trick is to find the right comparable transactions and to ferret out the information required to
do the math. As in comparable companies analysis, look for acquisitions of companies in similar
industry spaces, with comparable operational and financial characteristics
Recent transactions are a more accurate reflection of the values buyers are currently willing to
pay than acquisitions completed in the further in the past because market fundamentals are
subject to dramatic change over the periods of time
Establish relative values of various component businesses i.e., break-up analysis)
Multiples should be based on the latest public financial information available to the acquiror at the
time of the acquisition
ANALY S I S
values
Measure private market value, including control value, strategic
benefits and synergies
T RA N SAC T I O N S
C O MP AR ABL E
10-day LTM
premium 1-year forward¹ Transaction
Transaction paid value/ LTM EBIT /
Date Acquiror/ value (offer/ Transaction value/ Equity value/ adjusted adjusted Long term
announced target ($mm) average) LTM EBITDA net income members2 members2 growth rate3
Cobalt 13.7x
CareFirst 23.3x
LTM/1-year forward
Mean5 11.9% 9.7x 15.3x/14.2x $2,984 $310 13.8%
Period ending
Most recent
Fiscal year + period – one year prior to
most recent
QT-1 QT
ANALY S I S
Q1 Q2 Q3 Q4 Q1 Q2
Annual
T RA N SAC T I O N S
Example:
Example: Terra
Terra Industries
Industries LTM
LTM =
= 6/30/04
6/30/04
Annual Six months Six months LTM
(12/03) + 10-Q (6/04) – 10-Q (6/03) = (6/04)
Total revenue $2,292.2 $1,480.4 $1,447.0 $2,325.6
C O MP AR ABL E
Note: If the third quarter Form 10-Q is being used, revenues for nine months should be used when calculating LTM results, not three months
Valuation overview 1
LBO analysis 28
VAL U ATI O N
A leveraged buyout is an acquisition transaction in which much of the purchase price is funded with
debt; usually done by financial sponsors
This type of capital structure provides the ability to “leverage” returns on a relatively small equity
investment, as cash flows generated during the investment period are used to pay down debt
Financial sponsors profit by exiting three to five years after the transaction
Sell the target to another buyer
Take the target public
Recapitalize the target
Assumptions regarding the investment transaction, the exit and the period between the acquisition
and the exit are critical to determining an appropriate capital structure and potential returns to
equity
Financial sponsors generally analyze a transaction using LBO methodologies in the first instance
(and DCF, comparable companies/transactions analyses thereafter)
LBO valuation may be useful from a competitive point of view, as strategic players vie with
financial sponsors for the same assets
AN A L Y S I S
L B O
Estimate the multiple at which the sponsor can be expected to exit the
Terminal
Terminal value
value investment at the end of the investment period
Pro
Pro forma
forma Determine a transaction structure and a pro forma capital structure that
capitalization
capitalization result in realistic financial coverage
IRR
IRR Calculate returns (IRR) to the equity sponsor
The same financial projections developed for a DCF analysis can be used to build a
basic LBO model
Free cash flows are expected to be used to service debt, with positive flows to
equity typically coming at exit
Amount and predictability of free cash flows dictate whether a company is an
attractive or viable LBO target
Sources should show the entire pro forma capitalization of the company, including
New debt
New equity
Rolled-over debt and equity
Uses of funds should address all parts of the target’s existing capital structure, as
well as transaction-related leakage
Refinancing existing debt
Transaction expenses
Equity purchase price
Debt and equity to be rolled-over
Components
Components of
of capital
capital
Typically supplied by an investment or commercial bank
Senior
Seniordebt
debt Usually secured/most restrictive covenants
Sample inputs
Amortizing 5- to 8-year tenor
Revolving 30%–50% of total
Term capital
First in line at liquidation
LIBOR + 200-400 Lowest coupon
5–8 years
Sample inputs
Sometimes “stapled” to high-yield paper to attract broader investor group
20%–40% of total capital
Minimum annual returns >20%
20%-30% IRR
5–7 year horizon
L B O
$
$ millions
millions
Exit multiple 6.5x 7.0x 7.5x
2008 projected EBITDA $556 $556 $556
Implied 2008 firm value 3,613 $3,891 $4,169
Plus: 2008 cash 36 $36 $36
Less: 2008 total debt (1,154) (1,154) (1,154)
Implied 2008 total equity value $2,496 $2,774 $3,052
Implied 2008 sponsor equity value1 $2,371 $2,635 $2,899
Required return 25% 30% 35% 25% 30% 35% 25% 30% 35%
Implied max. equity contribution $869 $728 $614 $965 $809 $683 $1,062 $890 $751
Plus: Maximum transaction debt
(@ 5.0x LTM EBITDA) $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550 $1,550
Implied firm value2 $2,419 $2,278 $2,164 $2,515 $2,359 $2,233 $2,612 $2,440 $2,301
Implied LTM EBITDA multiple 8.0x 7.5x 7.1x 8.3x 7.8x 7.4x 8.7x 8.1x 7.6x
$
$ millions
millions
No operating Operating Operating
improvement/ improvement/ improvement and
At purchase No arbitrage No arbitrage arbitrage
EBITDA purchase multiple 7.0x
EBITDA on purchase date $100
Firm value at purchase date $700
Debt at purchase (5x EBITDA) 500
Equity value invested 200
Valuation overview 1
LBO analysis 28
VAL U ATI O N
Premiums paid analysis—how does the premium to be paid compare with prior
transactions?
Analysis at various prices (AVP)—At different prices what are the implied premiums
and multiples?
Interloper analysis
On the buyside, tactically it is important to determine which other companies
may be interested in the target
ADDITI O N AL
Once other potential bidders have been identified it is important to analyze their
capacity to pay and the pro forma impact on their earnings
Key measures
Dilution in earnings per share
Pretax synergies required to break even
Leverage/capitalization
MAT E RIA LS
Interest coverage
Post-transaction ownership
VALUA TI O N
ADDITI O N AL
Proforma
Proforma calculation
calculation
Acquiror standalone EPS xxx
Acquiror NI xx
Target NI xx
Combined NI XX A
Transaction adjustments:
Amortization of identifiable intangibles (xx)
Incremental interest expense from transaction debt (xx)
Foregone interest income on cash (xx)
Amortization of transaction fees (xx)
MAT E RIA LS
$
$ millions,
millions, except
except per
per share
share data
data
Premium to Target
100% stock
2004E $—EPS ($0.08) ($0.24) ($0.27) ($0.31)
2004E %—EPS (1.3%) (4.0%) (4.7%) (5.3%)
Add’l pre-tax synergies to break even $5.8 $18.4 $21.5 $24.6
MAT E RIA LS
Pro forma debt/pro forma 2003E EBITDA 1.5x 1.5x 1.5x 1.6x
Pro forma debt/pro forma total cap 31.7% 31.5% 31.5% 31.5%
Note: Target estimates based on equity research, expect EPS, which is based on I/B/E/S; Acquiror estimates based on JPMorgan equity research; Assumes transaction date of 12/31/03, tax rate of 37.0%, 10.0% of excess purchase price
allocated to non-goodwill intangibles and amortized over 10 years, transaction expenses of 0.20% and financing fees of 0.10% for illustrative purposes; Assumes interest expense of 6.5%, existing Target debt is refinanced at this rate
1 Based on I/B/E/S
2 Exchange ratio calculated as offer price per share over Acquiror price of $57.99
3 Includes assumption of $33.3 million in Target debt
Potentially increasing your P/E by acquiring a company with a lower P/E and “bootstrapping”
Acquiror’s P/E
Earnings 2.00
Shares outstanding 1.5
EPS $1.33
Accretive, assuming multiple stays the same
Stock Price $26.66
VALUA TI O N
ADDITI O N AL
1
1 day
day prior
prior to
to announcement
announcement (median
(median %;
%; 2004YTD)
2004YTD) 1
1 month
month prior
prior to
to announcement
announcement (median
(median %;
%; 2004YTD)
2004YTD)
Median: 20% Median: 23%
30%
24% 25% 22% 22% 24%
15%
10%
1
1 day
day prior
prior to
to announcement:
announcement: $0.5bn+
$0.5bn+ 1
1 month
month prior
prior to
to announcement:
announcement: $0.5bn+
$0.5bn+
MAT E RIA LS
1 1
Stock Cash Stock Cash
44% 52%
40% 38%
32% 36%
27% 26% 27% 29% 27% 31% 34% 28%
30%
VALUA TI O N
25%
20% 25%
22%
20% 18% 19% 13%
15%
1999 2000 2001 2002 2003 2004YTD 1999 2000 2001 2002 2003 2004YTD
ADDITI O N AL
$
$ millions,
millions, except
except per
per share
share data
data
Current Offer
Price per share $23.39 $30.00 $32.75 $33.00 $34.00 $35.00 $36.00
Implied premium/(discount) to:
Current price (9/10/04) $23.39 - 28.3% 40.0% 41.1% 45.4% 49.6% 53.9%
52-week high $27.76 (15.7%) 8.1% 18.0% 18.9% 22.5% 26.1% 29.7%
One month prior average price $22.60 3.5% 32.8% 44.9% 46.0% 50.5% 54.9% 59.3%
Three month prior average price $24.61 (5.0%) 21.9% 33.1% 34.1% 38.1% 42.2% 46.3%
Six month prior average price $25.20 (7.2%) 19.0% 30.0% 31.0% 34.9% 38.9% 42.9%
One year prior average price $23.83 (1.9%) 25.9% 37.4% 38.5% 42.7% 46.8% 51.0%
Implied equity value1 $377 $483 $527 $531 $547 $564 $580
Add: Total debt2 30 30 30 30 30 30 30
Implied firm value $407 $513 $558 $562 $578 $594 $610
MAT E RIA LS
Operating
Implied firm value multiples Metrics3
LTM revenue2 $740 0.55x 0.69x 0.75x 0.76x 0.78x 0.80x 0.82x
2004E revenue $744 0.55x 0.69 0.75 0.75 0.78 0.80 0.82
2005E revenue $799 0.51x 0.64 0.70 0.70 0.72 0.74 0.76
VALUA TI O N
LTM EBITDA2 $57 7.2x 9.0x 9.8x 9.9x 10.2x 10.4x 10.7x
2004E EBITDA $58 7.1x 8.9 9.7 9.7 10.0 10.3 10.6
2005E EBITDA $62 6.6x 8.3 9.0 9.1 9.3 9.6 9.9
Implied P/E multiples
LTM EPS2 $2.04 11.5x 14.7x 16.1x 16.2x 16.7x 17.2x 17.6x
ADDITI O N AL
2004E EPS $2.15 10.9x 14.0 15.2 15.4 15.8 16.3 16.8
2005E EPS $2.37 9.9x 12.7 13.8 13.9 14.3 14.8 15.2
1 Based on 16.1mm fully diluted shares outstanding as of 9/5/04 provided by management
2 As of 6/30/04
Contribution
Total
London Umbrella ($mm)
Note: Estimates for London and Umbrella based on projections prepared by Umbrella management; analysis excludes transaction adjustments
ADDITI O N AL
One-month
One-month Three-month
Three-month
Avg. daily trading vol (’000s) 53 Avg. daily trading vol (’000s) 53
Total shares traded (’000s) 1,167 Total shares traded (’000s) 3,320
Peak daily volume (’000s) 180 Peak daily volume (’000s) 180
VWAP $22.51 VWAP $24.60
High price $23.38 High price $27.25
Low price $22.07 Low price $22.07
45% 44%
29%
24% 25%
14%
6% 6% 7%
Six-month
Six-month 1
1 year
year
MAT E RIA LS
Avg. daily trading vol (’000s) 56 Avg. daily trading vol (’000s) 61
Total shares traded (’000s) 7,132 Total shares traded (’000s) 15,420
Peak daily volume (’000s) 266 Peak daily volume (’000s) 266
VWAP $25.17 VWAP $23.57
High price $27.76 High price $27.76
Low price $22.07 Low price $19.75
Note: As of 9/10/04
ADDITI O N AL
Source: Tradeline
Potential acquirors
Apogent Applied BioSystems Mettler-Toledo Thermo-Electron Waters
2003 cash EPS $1.36 $1.07 $2.53 $1.19 $1.60
Accretion/dilution - $ (0.07) 0.01 (0.11) (0.02) (0.08)
Accretion/dilution - % (5.0)% 1.3% (4.1)% (1.6)% (4.8)%
Incremental pretax synergies to break even 15.0 NA 9.5 6.2 20.4
% of target S,G&A 19% NA 12% 8% 26%
Ownership
MAT E RIA LS