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Dresner Partners' Review of the Transaction Environment
Tuesday, March 20, 2012

Following a very positive 2011, Dresner Partners enters its 21st year in business with many exciting developments. In Investment Banking, we closed multiple transactions for clients including completing two transactions on the last business day of the year. We are equally excited to usher in 2012 with a strong pipeline. Dresner Partners continues to add value for our clients by leveraging our team’s analytical and professional expertise in several verticals including: health care, industrials, financial services, technology and consumer products. By April, we expect to close several additional transactions in industrials, health care, technology and food services. We are also extremely active in our partnership with IMAP, an exclusive global merger and acquisition organization bringing together firms in 40 countries. To better serve our clients, Dresner Partners is also investing in our core investment banking business and making a larger commitment to the New York market by hiring a second senior banker to develop East Coast business opportunities. Our corporate turnaround and financial restructuring practice continues to help clients gain valuable time to reorganize and efficiently allocate resources during changing economic cycles. Our corporate finance group has expanded its efforts in raising capital for clients who are looking for creative solutions involving the debt and equity capital markets.

Dresner Corporate Services, Inc. (DCS), our strategic communications firm specializing in public and investor relations, continued to expand its client base with the addition of several clients including an international consumer products manufacturer and two publicly traded small cap-community banks. DCS also expanded its portfolio with the acquisition of the Investor Relations Company, a prestigious, small-cap focused investor relations consultancy headquartered in Chicago. Further, DCS has added a digital service practice that leverages internet, mobile and social technologies.

THE DRESNER DIFFERENCE

The M&A market has become increasingly more complicated. Dresner Partners has been able to help our clients by structuring transactions to add incremental value. In a recent sell-side transaction, Dresner increased the price our client received by over 30 percent, and in another instance we negotiated an additional $20 million dollars of value for our client. As financial transactions grow in complexity and strategic importance, business executives will appreciate the Dresner Difference and the value we can add to a company. Our core competency at Dresner Partners is serving as a trusted advisor to middle market companies and we take great pride in contributing to the continued advancements being made by middle market companies worldwide. We believe that growth will continue in this country and abroad over the foreseeable future and the M&A markets will be vibrant.

2011- YEAR IN REVIEW

Over the past twelve months we have witnessed major events unfold across the globe. Captivating news headlines ranging from the European sovereign debt crisis to natural disasters created the impression of dislocation and uncertainty throughout the entire year. As we analyze the most recent events and data for middle market companies, it is remarkable to see how resilient both companies and financial markets have been.

Looking at the 2011 results for middle market companies, the numbers suggest a continuation of moderate growth since 2010, and recent statistics show 2012 will likely be even better. Despite the numerous headwinds provided by international macroeconomic news, and the political showmanship leading up to a presidential election, M&A multiples were healthy throughout the year and show signs of improving.

Middle market transaction multiples generally traded between 5.5 to 10 times EBITDA, depending on the industry, size of the company and growth characteristics. Credit markets loosened making financing easier to obtain. Debt to EBITDA multiples for middle market deals grew to roughly 4.5 times, again depending on the industry and the business profile.

Although transaction volumes decreased slightly year-over-year, the dollar value of transactions increased; primarily due to higher multiples and larger transactions taking place. Private equity continues to be active and sponsors have over $500 billion in dry powder. It is our view that the strength of transaction pricing throughout the year is a key indicator of the economic durability of the middle market segment and highlights opportunities moving forward.

2012 OUTLOOK

Business owners and executives are focusing on the age old wisdom of operating with leaner cost structures while attempting to increase organic revenue growth. Looking forward, executives should start planning to enhance their growth strategies by including more M&A activity. A recent survey conducted by RBS Citizens of 432 middle market executives underscores the role M&A may play as a significant source of future growth. One half of executives surveyed said they are currently active in the M&A marketplace. In addition, financial sponsors must use their considerable committed capital to acquire companies or return it unspent to investors. These factors, including ingredients such as a favorable tax and financing climate with a healthy economic growth outlook, all provide a robust outlook for middle market M&A activity in 2012.
Our professionals at Dresner Partners are available to confidentially answer your questions or concerns regarding your company growth and financial objectives. For over twenty years, Dresner Partners has built its reputation on providing the highest quality service to our clients and we welcome all inquiries.

Sincerely,


Steve Dresner
President
Office (312) 780-7206
Email: sdresner@dresnerco.com

Kevin McMurchy
Senior Managing Director
Office: (212) 444-8029
Email: kmcmurchy@dresnerco.com

Omar Diaz
Managing Director
Office: (312) 780-7221
Email: odiaz@dresnerco.com

Jamie Lisac
Managing Director
Office: (312) 780-7232
Email: jlisac@dresnerco.com

 Mitchell Stern
Managing Director
Office: (212) 729-6695
Email: mstern@dresnerco.com

Thomas Pyra
Senior Advisor
Office: (847) 650-1779
Email: tpyra@dresnerco.com