Recent Trends in Corporate Finance in Ireland Peter Crowley Chief Executive, IBI Corporate Finance

1. Recent Trends in Corporate Finance in IrelandPeter CrowleyChief Executive, IBI Corporate Finance 30 March 2006

2. Contents • Introduction • Recent Activity in the Irish Market • Trends in the Irish Capital Markets • Looking to the Future • Summary • About IBI

3. Section I • Introduction

4. Introduction • Just completed my 6th year as CEO of IBI – a period characterised by unprecedented levels of market activity and record fee levels • In addition to the historic strength in our plc franchise, a growing driver of activity has been the emergence of a healthy mid-market in private company activity. Ted Webb leads our activities in that area. • Activity driven by all the factors evident in the UK market together with specific local factors in particular the confidence generated by 14/15 years of uninterrupted economic growth

5. Key Drivers Irish Economy M & A Activity • Low corporation tax rates • Low CGT • Strength of property market • Period of uninterrupted economic growth • Educated labour force • International trade/open economy • Strong consumer demand (boosted by SSIA spend) • Boost from immigrant population • Supportive market conditions • Low interest rates • Debt market liquidity and aggressive local banking competition • Availability of private equity • High net-worth investors • Ability to form syndicates • Strong competition for quality assets • Strong management teams • Succession and estate planning • Market consolidation • Diversification

6. Section II • Recent Activity in the Irish Market

7. Recent Activity in the Irish Market Esat Telecom Elan AerFi Group CRH Hibernian Group Hamburg Airport Ocean Communications Chase de Vere Eircell Eircom Esat Digfone IN&M Greencore TSB ICC Golden Vale Jefferson Smurfit Green Property Elan Musgraves First Rate Travel BWG Foods BIAM Golden Pages Allfirst Elan CRH Riverdeep Arnotts Dunloe Ewart Jefferson Smurfit Grafton Group Smurfit/Kappa Danske Bank Jurys Hotels Superquinn Meteor CRH The Savoy Group Kingspan The Savoy Group First Active Clondalkin Group CRH Tullow Oil Kerry Group Jarvis Hotels Waterford Wedgewood

8. Deal Volumes/Type • Upward trend in volume of deal flow from 2000 to 2004 (140% increase overall) • Value of deals continued to rise in 2005 despite lower volume • Growing frequency of smaller but still substantial deals now being undertaken (69% of 2005 disclosed deals valued at less than €50m) • Private equity/MBO deals now form a much more significant portion of the Irish deal landscape – 23% of deals in 2005 compared to 8% in 2000

9. Corporate Finance Activity by Sector • The Industrial and Retail sector accounted for the highest proportion of deals in 2005 (19%), replacing Food and Food Services (down from 20% in 2004 to 10%) • IT and Telecoms sector showing a strong recovery (now up to 14% of deals) after the dot.com crash in the early 2000s • The Financial Services sector is a continuing driver of deal activity (14% of deals) followed by Support Services & Logistics and Leisure & Travel (both at 9%)

10. Deal Types: Cross-Border V Domestic • Due to the open nature of the Irish economy, cross-border deals form the vast majority of transactions in Ireland (74% of deals in 2005). Growth in in-bound activity from 2003 on, indicates strategic buyers comfortable with economic outlook • However, the volume and proportion of domestic and outward bound deals is on the increase with 30 such transactions in 2005 (or 26%), compared to only five in 2000 (8% of total deal activity) • This reflects the increasing scale of Irish companies and the enhanced financial resources available to them

11. Section III • Trends in Capital Markets

12. Overseas Strategic Acquirers Active in Irish Market • Strategic overseas buyers back in the landscape, attracted by the impressive Irish growth rates; examples include the following: • Certain media driven concerns about overheating of the Irish economy have been allayed for Irish investors

13. Irish Companies Active Overseas • Irish companies are increasingly active in overseas markets; prominent examples include the following:

14. Emergence of HNW Investors as Nimble Aggressive Buyers • Irish HNWs have become key players in overseas property transactions and now are also beginning to diversify into non-property related transactions

15. International Private Equity regards Ireland as a 2nd Home Market • The following is a selection of private equity firms who have invested in Ireland:

16. Steady stream of Public to Private Transactions • There has been a relatively high number of take private transactions in Ireland in recent years, notable examples of which include:

17. Company Mkt Cap (€bn) AIB 7.3 BoI 7.0 Elan 4.5 CRH 4.0 Smurfit Group 2.7 Irish Life 1.6 Kerry Group 1.6 Independent News & Media 1.2 AWG 1.0 NIE 1.1 Company Mkt Cap (€bn) AIB 15.7 CRH 13.3 BoI 12.9 Anglo 8.8 Ryanair 6.4 Elan 4.9 IL&P 4.7 Kerry Group 3.5 Grafton 2.2 Eircom 2.1 Company Mkt Cap (€bn) Elan 17.5 AIB 11.5 BoI 10.5 CRH 10.3 Ryanair 5.1 IL&P 3.2 Smurfit Group 2.7 Kerry Group 2.5 Anglo Irish 1.3 Independent News & Media 1.2 Trends in Capital Markets Greater Concentration of Top 10 Companies within ISEQ

18. Trends in Capital Markets Re-emergence of Concentration on Financial Stocks

19. Key Leavers Heitons Green Property Arnotts Jefferson Smurfit Jurys Doyle Trends in Capital Markets Growth in Net Leavers from the ISE Key Leavers ESAT Telecom Golden Vale ICC Bank Jones Group Clondalkin Group

20. Trends in Capital Markets • A number of key trends are noticeable in the ISEQ Index in recent years despite growth in the overall index: • Decrease in the number of listed companies • A general increase in concentration with the top 10 companies now accounting for c. 80% of the overall market cap of the index • Steady stream of take privates has disimproved spread of exposure for investors to the Irish economic story. Financials now account for c. 45% of total index • AIM/IEX emerging as a meaningful source of activity and funding • Now 33 Irish companies on AIM

21. Section IV • Looking to the Future

22. Likely Active Sectors • Healthcare – driven by infrastructure deficit • Waste / Environmental – consolidation and new technologies • Media / New Internet – impacted by global consolidation • Financial Services – new entrants and disintermediation • Business Services – outsourcing • Retail – consolidation of local operators

23. HNW’s to emerge as aggressive non-property investors • Need to diversify from property exposure • Desire for return (and increased interest rates) will focus investors on benefits of equity risk premium in broader corporate deals • Increased sophistication of key players • Wall of liquidity – No repeat of previous boom/bust cycle • High confidence levels and ability to move quickly will give them an edge

24. Crossroads for the ISE? • Ongoing trend of public to privates • Apart from Aer Lingus, few new entrants - possibly Airtricity, Smurfit Kappa in time • Flow of small companies onto IEX/AIM offers some hope • Further concentration of index in the financials not healthy • Position in global exchange consolidation as yet unclear

25. Future Trends / Rules • Irish economic backdrop to remain positive - favour “soft landing” view with low level of accompanying indigestion • Levels of M & A / market activity to remain high – further departures from ISE likely driven by private equity • Biggest potential risk (although limited) is a series of highly levaraged defaults followed by a debt liquidity squeeze • Modest levels of interest rate increases not likely to dampen activity unduly • A drift towards labour market inflexibility through embracing “European-Style” labour laws would cause problems for inward investment • Global liquidity generally and particularly high levels of local market liquidity will continue to drive strong demand/competition for assets

26. Section V • Summary

27. Summary • Irish Stock Exchange at an all-time high • Value of deal activity in the market likely to continue at historically high levels • Ireland is still the fastest-growing economy in the EU, although infrastructure deficiencies and emerging risk of lack of competitiveness remain a concern • Concerns that the Irish economy was overheating have disappeared for international strategic acquirers • Certain sectors remain particularly buoyant, e.g. healthcare, Media/IT, financial services, outsourcing, waste/alternate technologies • Increasing number of overseas financial investors/private equity players looking at Ireland for investment opportunities • Irish high net-worth investors looking abroad for property underpinned opportunities in addition to seeking to diversify away from property investments into trading businesses • Global liquidity equally evident as a market driver in Ireland assisted by particularly high levels of local investor liquidity buoyed by business confidence The Future Remains Bright

28. Section VI • About IBI

29. Introduction to IBI • IBI is Ireland’s longest-standing corporate finance house with 40 years’ experience in the Irish market • IBI is an independent, wholly-owned subsidiary of Bank of Ireland – Market Cap c.€15 billion • IBI has consistently been ranked the leading corporate finance adviser in Ireland and has advised more companies than any other Irish adviser • Only specialist CF adviser operating on a 32 country basis, North and South • We have significantly expanded our private company/client activities in recent years – seek to bring our public company ethos to a broader range of clients • IBI’s team of 23 experienced professionals has an unparalleled long-term track record in advising on a wide range of complex public and private transactions

30. " IBI Corporate Finance was the Merger and Acquisitions adviser with the most deals under its belt last year. It was involved in fourteen deals with more than €1.7bn, according to mergers & acquisition intelligence source, Mergermarket" (RTE Radio, 6 January 2006) Rated No. 1 Irish Corporate Finance Advisor Rated No. 2 Irish Corporate Finance Advisor Rated No. 1 Irish Corporate Finance Advisor Rated No. 1 Irish Corporate Finance Advisor 2005 2004 2003 2002 Introduction to IBI IBI is the leading Irish Corporate Finance house having consistently advised on more transactions in the Irish market than any other player No. 1 Adviser in Irish transactions

31. Govt/Semi-State “Sell-Side”/ Public Offers Take-overs & Buyouts IPO IBI Credentials – Transaction Experience Unrivalled track record of sound advice in high-profile transactions Private Equity

32. Adviser to Jurys Doyle Hotel Group plc on the €1.25bn offer by JDH Acquisitions plc Adviser to Jurys Doyle Hotel Group plc on the €260m Class 1 disposal of the Jurys Ballsbridge Hotel, the Towers and the Berkeley Court apartments to Padholme Acted for Unidare plc in relation to the €55m Class 1 disposal of Daalderop BV, capital distribution and related party transaction Acted as joint lead manager of the C&C Group plc €398m Global Offer and listing on the Irish and London Stock Exchanges Adviser to Green Property plc on the €1.05bn recommended offer by Rodinheights Ltd Adviser to Ryanair plc on its €379.8m flotation on Dublin and NASDAQ Stock Exchanges Adviser to Heiton Group plc on the €353m recommended offer by Grafton Group plc Adviser to the Independent Committee of the Board of Arnotts plc on the €257.3m recommended offer by Nesbitt Acquisitions Ltd Adviser to Kayterm plc on the Stg£159m recommended offer for Jarvis Hotels plc Adviser to Golden Vale plc on the €253m recommended offer by Kerry Group plc Adviser to Murryhill Ltd on its Stg£35.2m recommended cash offer for PGA European Tour Courses plc Adviser to Bank of Ireland Group on its US$184m acquisition of 71.5% of Guggenheim Alternative Asset Management Adviser to Renlin Ltd, the management team's bidding vehicle, on the €25.8m MBO of Sherry FitzGerald Group plc Adviser to e Island plc on its €3bn offer for eircom plc Adviser to the Independent Directors of the Board of Jefferson Smurfit Group plc on the €3.6bn takeover by Madison Dearborn Partners Sample Public Company Deals

33. Adviser to Eason Electronic Ltd on its disposal to Alphyra Group plc Adviser to Kandel Ltd on its €90m disposal to Investcorp Techhnology Ventures & InfoNXX Adviser to SHS Group Ltd on its Stg£36.7m recommended offer for Merrydown plc Adviser to City Hopper Airports Ltd on the disposal of Wolverhampton Airport Ltd to a consortium led by Mar Properties Ltd Adviser to Kish Media Ltd (Channel 6) in a private equity fundraising of €14m Adviser to Portmarnock Hotel & Golf Links Ltd on its €70m disposal to Capel Ltd Adviser to Bank of Scotland (Ireland) Ltd and Barry's Tea on the €62m acquisition of Batchelors Adviser to Brindley Media Group on its disposal to Aegis Group plc Adviser to Donegal Highland Radio Ltd on its €7m disposal to Scottish Radio Holdings plc/Emap plc Sale of Newhill Ltd and co-investment by Newhill's shareholders in the Electra Partners Europe-backed acquisition of BWG, valued at €321m Adviser to Treaty Radio Ltd on its €15.7m acquisition by UTV plc Sample Private Company Deals Adviser to Sigma Communications Group Ltd on its €29.5m disposal of Sigma Wireless Technologies Ltd to US-based PCTEL Inc Adviser to Premier Group on its €9m acquisition of Nigel Lynn Associates Ltd Adviser to CR2 on its management buy-out and private equity fundraising Advisers to management on the buyout of Maybin Support Services on the acquistion by Longhill Investment Ltd