DTCF Investment Banking Services at Michigan State University

1. Michigan State UniversityTopics in Investment BankingFall 2006 Deloitte & Touche Corporate Finance LLC

2. Agenda • I. DTCF* at a Glance • II. Complex Carve-Outs • III. Strategic Options • Company Valuation Activity • Why Deloitte? *DTCF (Deloitte & Touche Corporate Finance LLC)

3. I. DTCF at a Glance

4. DELOITTE & TOUCHE USA LLP Deloitte & Touche LLP Deloitte Tax LLP Deloitte Consulting LLP Deloitte Financial Advisory Services LLP Deloitte Financial Advisory Services • Corporate Finance • Forensic & Dispute Services • Reorganization Services • Valuation Services

5. DTCF Service Offerings Sale Divestiture Capital Raising • Pre-Sale Due Diligence • Identify Buyers • Prepare Confidential Memorandum • Clear the Market • Deal Negotiation • Coordinate Closing • Assess Alternative Structure • Create a Plan • Identify Appropriate Sources • Transaction Modeling • Deal Negotiation • Coordinate Closing M&A/Due Diligence Services (Deloitte & Touche LLP) (Deloitte Tax LLP) Tax Services (Deloitte Consulting LLP) DTCF Investment Banking Services Corporate DevelopmentAdvisory Consulting and Post Merger Integration Services (Deloitte Consulting LLP) Merger & Acquisition Valuation Services (Deloitte Financial Advisory Services LLP) • Define Acquisition Goals • Target Evaluation • Transaction Modeling • Finance Assistance • Deal Negotiation • Coordinate Closing • Buy-side advisory • Strategic Alternatives Evaluation • Prioritize Shareholder Objectives • Enhance Corporate Finance Capabilities • Develop Financial Models and Analyses All investment banking products and services within the United States are provided exclusively by Deloitte & Touche Corporate Finance LLC All investment banking products and services within the United States are provided exclusively by Deloitte & Touch Corporate Finance LLC

6. Leading Global Investment Bank Deloitte & Touche Corporate Finance ranked #8 among investment banks (in terms of number of deals closed) for the period January 1 through June 30, 2006.

7. Outstanding Global Reach DTCF and the corporate finance practices of the member firms of Deloitte Touche Tohmatsu (DTT) or their affiliates are able to work together to provide industry-specific experience and execution capabilities to assist in the completion of M&A advisory assignments around the globe.* * In all office locations outside the United States listed above, corporate finance services are offered by the DTT member firm of the applicable country or an affiliate thereof. DTCF works closely with these DTT member firms or their affiliates to give clients access to global investment banking coverage. Each of the DTT member firms is a separate and independent legal entity.

8. Industry Specialization DTCF serves the middle-market with experienced professionals in eight specialized industry verticals.

9. DTCF Quarterly Updates • What • Quarterly review of industry specific market data • Focus on public company trading statistics and M&A activity • Who • Internal/External • Client/Non-client • Buyers/Sellers • Referral Sources • Why • Educate potential clients and referral sources of D&TCF industry expertise • Provide thought provoking industry insight and encourage further dialogue with management

10. II. Complex Carve-Outs

11. Illustrative Carve-Out Divestiture Business Line 1 Business Line 2 Parent Company A B C A B C $ • Define business • Identify assets • Create stand-alone financials • Identify organization/ headcount A Business unit carve-out Buyer(Strategic/Financial) Existing Businesses Sale of carved-out business A 1 2 3 Carve-Out Transactions When executed properly, a carve-out allows the seller to successfully divest specific assets without interrupting the business being retained • Potentially complex and disruptive process • Complicated accounting, tax, structural and execution issues • May involve supply agreements between buyer and seller • Impact on remaining business lines can be significant • Unique need for comprehensive planning and execution team

12. M&A Environment Driven by an overall industry push to right-size, focus on core business and strength in the general M&A market, on an annualized basis, 2006 may be one of the busiest years for carve-out activity in recent history. U.S. Divestiture Activity (Deals Announced Between 1999-2006YTD) Source: Thompson

13. DTCF Approach to Carve-Out Transactions Through years of experience, DTCF has developed a unique approach to dealing with typical issues faced in carve-out scenarios. Typical Financial/Accounting Issues to Consider:

14. DTCF Approach to Carve-Out Transactions (Cont’d) Typical Operating/Business Issues to Consider:

15. Select Carve-Out Experience Client: ThyssenKrupp Budd Company Value: Not disclosed Sector: Industrial Manufacturing / Metals Transaction: Sell-side divestiture The Deal: DTCF is pleased to announce its role as the exclusive financial advisor to ThyssenKrupp Budd Company (“TK Budd”) regarding the sale of its wholly owned subsidiary, ThyssenKrupp Stahl Company (“Stahl”), to Speyside Equity LLC (“Speyside”). The stock sale transaction encompasses all of Stahl’s aluminum casting foundries which are located in Kingsville and Warrensburg, Missouri. This transaction is another example of D&TCF’s role as financial advisor to a large corporate entity involved in a carve-out divestiture of non-core assets. Furthermore, the sale highlights DTCF’s experience in the industrial manufacturing segment.

16. III. Strategic Options

17. Strategic Options Analysis(1) Strategic Options Overview Understand Company Needs Review Strategic Alternatives Maintain Capital Structure Recap Sale of Company Strategic Alliances Strategic Acquisition Strategic Buyer Financial Buyer Pvt. Equity Partner Sr./Jr. Debt (1) Note: Certain strategic alternatives above can and often are done in conjunction with one another in order to achieve specific Company objectives.

18. Strategic Options Process Overview Three Phases of a Strategic Options Engagement Phase I Phase II Phase III Strategic Alternatives Evaluation Internal & External Operations Assessment Implementation • Develop and analyze current operating and financial performance of the stand-alone Business • Provide assessment of stand-alone aspects such as strength of management team, IT systems, human resource and other platform considerations • Prepare carve-out “stand-alone” financials considering intercompany sales, external sales, allocation of expenses not “pushed down” (i.e., SGA, benefits, corporate overhead, etc.) • Evaluate the long-term forecasting and projections of the Business in light of industry dynamics • Develop understanding of the products, distribution channels, competitors, customers and current issues impacting the Business • Assist the Company in analyzing the external marketplace and identifying industry dynamics that will impact growth • Assist the Company in analyzing the industry to understand valuation multiples, value drivers, industry trends, recent transactions • Provide value analysis guidance as to current valuation range for the Business and risks to value • Evaluate and discuss how the findings in Phase 1 impact the Company’s overall strategic business plan • Analyze and develop a plan to improve operating and financial performance based on findings in Phase 1 • Analyze the potential sale of the Business, identifying key transaction drivers, value implications and the potential impact of a transaction on the Company • Analyze potential acquisition opportunities for the Business, identifying the financial and strategic impact such an acquisition might have on the Company • Analyze and identify other companies in the marketplace with which a potential joint venture, partnership or other strategic cooperative arrangement may provide additional strategic benefit to the Business • Meet with the Company to discuss the strategic alternatives analyzed • Assist the Company in determining the best possible alternative for the Business • Assist the Company in proceeding with a specific alternative

19. Sample Deliverables Sample Public Company Valuation Metrics

20. Sample Deliverables Sample Precedent Transaction Valuation Metrics

21. Sample Deliverables Sample Discounted Cash Flow Analysis

22. IV. Company Valuation Activity

23. The Case ABC Molecular Imaging is seeking an Investment Bank to advise them on the sale of their company. ABC has invited you, XYZ Corporate Finance, to join the competitive financial advisor selection process. As analysts you have been assigned to assemble a key component of the pitch book that will be presented to the Board of Directors, you need to determine a value at which you believe their company can be sold for. ABC is expecting to see strong supporting analysis of how you arrived at the value. You must also bear in mind that you are competing against other top investment banks, all with the goal of providing the highest value supported by the strongest analysis. In addition, you are always aware of the in-depth review process that takes place when you lose a deal, there is a lot of pressure to win this deal. Using the attached information which includes a company snapshot, public comps, comparable transactions, and a DCF analysis, you need to determine the value to be used in the pitch book. Company Snapshot ABC Molecular Imaging, Inc. manufactures and distributes Positron Emission Tomography (PET) imaging solutions. Its products include PET and CT scanners that assist in the detection and treatment of cancer, neurological disorders, and cardiac diseases. The company also develops and licenses medical image analysis applications, which provide tools for creation, display, and analysis of molecular images. Additionally, it hosts an online portal to facilitate information dissemination among physicians, radiopharmacies, patients, and PET providers. The company offers site planning, installation, preventive maintenance and repair, and technical support services. It caters to hospitals, universities, and research institutions, imaging centers, and cancer treatment centers.

24. Valuation Analysis Valuation Methodologies

25. Comparable Public Companies Valuation Summary Valuation Summary Financial Performance Source: Capital IQ

26. Precedent Transactions Source: Thomson

27. DCF Analysis ABC Company

28. Range of Value Summary

29. Answer Key

30. Answer Key

31. Answer Key

32. Answer Key

33. V. Why Deloitte?

34. Why Join DTCF? Ability to Compete and Create Value for our Clients • Leading middle market global investment bank • Recruited top Wall Street talent • Clients include small and mid-cap companies, as well as Fortune 500 firms • Attractive, unique service offering • Ability to leverage global relationships Commitment to our Employees • Senior bankers employ an “open door” policy at all times • Team approach and feel create a positive working environment • Early career focus on business development • Goal is to develop future senior bankers

35. In the News • BusinessWeek • Best Places to Launch Your Career, 2006 Rankings • #3 Deloitte & Touche USA LLP • #4 Goldman, Sachs & Co. • Kennedy Information • Ranking of Global Service providers of Business Advisory Services • #1 Member Firms of Deloitte Touche Tohmatsu • Ahead of KPMG, PwC, E&Y, IBM, Accenture, Bearing Point and McKinsey. • NBC Nightly News with Brian Williams • Featured the efforts at the Deloitte U.S. Firms to provide innovative flexibility programs in a segment called "Balancing Act.“ • BusinessWeek Features DTCF's Brenda White On Mortgage Lending • Author of Deal Talk, a monthly column in Mortgage Banking magazine. • For More Visit: • www.investmentbanking.deloitte.com

36. DTCF Positions Analyst – Full Time (NY, Detroit, Chicago & LA) Assists Sr. Associates, Vice Presidents and Managing Directors in deal execution, industry and company research/analysis and special internal assignments. • High performing BBA’s with focus on finance & accounting • Strong quantitative & strategic analysis skills • Finance & investment banking experience is a plus

37. Deloitte & Touche Corporate Finance LLC Suite 900 600 Renaissance Center Detroit, MI 48243 USA Tel: +1 313 396 3738 anblanchard@deloitte.com Tony Blanchard Vice-President Deloitte & Touche Corporate Finance LLC Suite 900 600 Renaissance Center Detroit, MI 48243 USA Tel: +1 313 394 5155 mpisani@deloitte.com Deloitte & Touche Corporate Finance LLC Suite 900 600 Renaissance Center Detroit, MI 48243 USA Tel: +1 313 396 3886 dwillard@deloitte.com Deloitte & Touche Corporate Finance LLC Suite 900 600 Renaissance Center Detroit, MI 48243 USA Tel: +1 313 396 3609 maralberts@deloitte.com Mike Pisani Associate Dan Willard Analyst Annabelle Alberts Marketing Contact Information

38. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, its member firms and their respective subsidiaries and affiliates. Deloitte Touche Tohmatsu is an organization of member firms around the world devoted to excellence in providing professional services and advice, focused on client service through a global strategy executed locally in nearly 150 countries. With access to the deep intellectual capital of approximately 135,000 people worldwide, Deloitte delivers services in four professional areas—audit, tax, consulting and financial advisory services—and serves more than one-half of the world’s largest companies, as well as large national enterprises, public institutions, locally important clients, and successful, fast-growing global growth companies. Services are not provided by the Deloitte Touche Tohmatsu Verein, and, for regulatory and other reasons, certain member firms do not provide services in all four professional areas. As a Swiss Verein (association), neither Deloitte Touche Tohmatsu nor any of its member firms has any liability for each other’s acts or omissions. Each of the member firms is a separate and independent legal entity operating under the names “Deloitte”, “Deloitte & Touche”, “Deloitte Touche Tohmatsu” or other related names. In the US, Deloitte & Touche USA LLP is the US member firm of Deloitte Touche Tohmatsu and services are provided by the subsidiaries of Deloitte & Touche USA LLP (Deloitte & Touche LLP, Deloitte Consulting LLP, Deloitte Financial Advisory Services LLP, Deloitte Tax LLP and their subsidiaries), and not by Deloitte & Touche USA LLP. The subsidiaries of the US member firm are among the nation's leading professional services firms, providing audit, tax, consulting and financial advisory services through nearly 30,000 people in more than 80 cities. Known as employers of choice for innovative human resources programs, they are dedicated to helping their clients and their people excel. For more information, please visit the US member firm’s web site at www.deloitte.com/us. All investment banking products and services within the United States are offered exclusively through Deloitte & Touche Corporate Finance LLC. Deloitte & Touche Corporate Finance LLC is a wholly owned subsidiary of Deloitte Financial Advisory Services LLP. Disclosure Deloitte & Touche Corporate Finance LLC (“D&TCF”) is the U.S. corporate finance practice of Deloitte & Touche USA LLP, the US member firm of Deloitte Touche Tohmatsu. D&TCF is a member firm of the National Association of Securities Dealers (NASD). D&TCF is also registered with the SEC as a Securities Broker/Dealer. Sell side advisory services, buy side advisory services, private placement advisory services, transaction sourcing services and general corporate development advisory services are provided by Deloitte & Touche Corporate Finance LLC. Certain related transaction services in support of Deloitte & Touche Corporate Finance LLC engagements are provided by Deloitte Financial Advisory Services LLP, the parent firm of Deloitte & Touche Corporate Finance LLC. These include services related to valuation, regulatory and licensing support and reorganization and restructuring. Consulting services relating to post-merger integration, network optimization, customer relationship management, supply chain management, back office billing systems and MIS solutions and human capital management, are offered by Deloitte Consulting LLP. Transaction due diligence services are offered by Deloitte & Touche LLP. Tax services are offered by Deloitte Tax LLP. Deloitte Consulting LLP, Deloitte Touche LLP and Deloitte Tax LLP are both wholly owned subsidiaries of Deloitte & Touche USA LLP, the parent of Deloitte Financial Advisory Services LLP. The transaction or transaction related experience listed in the foregoing descriptions and tombstones entail engagements in which there was material participation by either Deloitte & Touche Corporate Finance LLC, the Corporate Finance Practice of Deloitte & Touche LLP (the predecessor practice of D&TCF) and / or a non-US corporate finance practice of a member firm of Deloitte Touche Tohmatsu.