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Investment Memorandum

March 2014

Executive Summary Company Synopsis:

Industry: Trade Shows / Event Staging

Number of Employees: 130

Company Background:

• Headquartered in Townsville, United States

• Founded in 1983

• S-Corporation, 100% Family Owned

Investment Rationale

• Fragmented industry; Positive growth trends

• Attractively priced: 3.9x 2014E EBITDA

– Weighted AVG IRR 25.6%

Return Potential

• Winner: IRR 30.4%

• Walking Wounded: 26.7%

• Wipeout: 12.0%

Buy and Build Strategy:

• Maintain existing business plan while expanding ancillary service offering

• Realize cost and revenue synergies • Reduced freight expense

• Technology sharing

• Concerted sales effort

• Highly diversified equipment portfolio

• Continue to service and support existing customer base • Modest investment in Sales & Marketing to activate sales

pipeline

Expected Case Financials

• 2013 net revenue of $28M (2014E - $30M)

• 2014E EBITDA margin of 15.9% (2019P 23.8%)

Risks

• GSA initiative to result in a $500K cap on government spending for individual trade shows.

Deal Structure

• Asset deal, treated as Stock Deal

• $18.5 M purchase price

• 80 / 20 Leveraged Recapitalization • $2.5 M Equity Rollover

• $5M ABL, $6 Mezzanine Debt, $5 Co-Sponsor Equity

• LOI in Hand

• Management to remain in place through exit

• All associated reps and warranties

Disclaimer: All information contained herein is private and confidential 2

C o m p a n y O v e r v i e w

&

H i s t o r i c a l P e r f o r m a n c e

I

Core Operations


Staging

• Detailed Design and Production

• Full-Service Audio and Video

Trade Shows

• Individual Exhibits and Booths

• Long-term Recurring Clients

Systems Integration

• Permanent Display Installations

• Contract Service Revenues

• Value-Added Design

• Project Management

• Account Management

• Technical Support

• Creative Content

Primary Divisions Ancillary Services

Equipment Portfolio

• Plasma & LCD Displays

• HD Projection Systems

• Lighting and Sound

• LED Walls

• Touch-screen Technology

• Laptops and Computers

CorPorate Structure and History


Year Event

1983 Company Founded

1995 John Smith becomes CEO

2005 Launch of Staging Division

2009 Launch of Systems Integration Division

Key Management:

John Smith, President and CEO

• Founding member

• 27 years experience

John Doe, Vice President and CFO

• Head of Labor Relations and Logistics

• Member since 1996

Bob Jones, Director of Operations

• Manages Labor Agreements

Jim Smith, Director of Staging and Events

• Grew Staging Sales by over $7 million

Salaried Hourly Total

% of

Total

Corporate, General and Administrative

Senior Management (1) 5 0 5 3.7%

General Managers - Facilities 3 3 6 4.4%

Sales Manager 1 0 1 0.7%

Account Executives / Sales 18 0 18 13.3%

Accounting 2 0 2 1.5%

Administrative & Clerical 5 1 6 4.4%

Corporate, General and Admin Total 34 4 38 28.1%

Operations (2)

Engineers 3 0 3 2.2%

Creative Services 3 0 3 2.2%

Equipment & Asset Management 2 1 3 2.2%

Project Managers 5 2 7 5.2%

Technical Director 1 0 1 0.7%

Technicians 5 29 34 25.2%

Warehouse 1 6 7 5.2%

Delivery & Installation 0 37 37 27.4%

Dispatch 1 1 2 1.5%

Operations Total 21 76 97 71.9%

Total 55 80 135 100.0%

% of Total 40.7% 59.3% 100.0%

Function

6 strategically located

facilities in:

• Chicago

• Las Vegas

• Los Angeles

• Orlando

• San Francisco

• Washington D.C.

Detail of Employee Distribution


Client Profile Newco caters its services to:

• Associations

• Government Agencies

• Private Companies

• General Service Contractors

- Secured Preferred Vendor Status with over 400 trade shows

- No single customer represents more than 16% of total revenue

Exhibitors and

Event Organizers

General Service

Contractors

Outsourced

Services

Direct

Engagement

Sales Pipeline


Growth Potential

Bolster Service Offering

• Foster Cross-selling between Core Divisions

• Build-out Ancillary Design and Management Services

Improve Quotation System

• Reduce Travel and Freight expenses

• Enhance Bidding Process

Concerted Marketing Efforts

• Harness SEO and Online Presence

• Scale Regional Sales Initiatives

Growth through Acquisitions:

• Leverage current relationships

• Facilitated Negotiations

• Diversify Industry Specializations

• Solidify Presence in Prime Events Markets

• Fill in new geographies and/or complement

operations of current facilities

• Hand-chosen Targets

Industry Dynamics


Fragmentation

• 4,500 companies represent $10 billion in

revenue

• Top 50 companies represent 45% of total

revenue

Growth Metrics

• 14 consecutive periods of quarterly growth

• Forecasted 6% CAGR through 2018

• Q4 2014 posted year over year growth of 3%

• Professional Attendance: YOY increase of 5.8%

Key Indicators:

• Corporate Profits: +3.0% • Increase in discretionary corporate spending

• Real GDP • Macroeconomic trends drive performance

• CEIR Index • Aggregates changes in net square footage, gross revenue,

number of exhibitors and attendees

Source: First Research, Center for Exhibition Industry Research (CEIR)

Center for Exhibition Industry Research

Performance Index

Financial Performance


2010 2011 2012 2013

ASSETS

Current Assets

Cash $111 $1 $318 $422

Accounts Receivable, net 4,144 3,773 3,479 1,965

Prepaid expenses 0 241 274 297

Total Current Assets 4,254 4,016 4,071 2,684

Rental equipment, net 5,088 5,130 3,794 3,602

Property and equipment, net 564 627 938 950

Other assets 95 95 89 90

Total Assets $10,001 $9,869 $8,892 $7,326

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities

Current Portion of long-term debt $1,324 $1,544 $1,103 $0

Note payable to bank 980 980 980 480

Accounts payable 1,744 1,912 1,779 1,397

Sales tax payable 49 39 16 63

Accrued expenses 382 521 555 321

Total Current Liabilities 4,479 4,996 4,433 2,261

Long-term debt 1,663 1,415 483 1,221

Mortgage payable 0 0 0 0

Due to shareholder 656 736 699 575

Security deposits 7 7 7 0

Total Liabilities $6,805 $7,153 $5,622 $4,058

Shareholders' Equity

Capital stock, no par value 1 1 1 1

Additional paid-in-capital 92 92 92 92

Treasury stock (420) (420) (420) (420)

Retained earnings 3,524 3,043 3,596 3,596

Total Shareholders' Equity $3,196 $2,715 $3,269 $3,269

Total Liabilities and Shareholders' Equity $10,001 $9,869 $8,892 $7,326

Fiscal Year Ended December 31,

2010 2011 2012 2013

Net Sales $30,636 $30,376 $29,612 $27,677

% Growth -0.8% -2.5% -6.5%

Cost of Sales 21,104 22,877 20,606 18,302

Depreciation 2,888 1,923 2,178 1,695

Gross Profit $6,644 $5,576 $6,828 $11,070

% of Net Sales 21.7% 18.4% 23.1% 40.0%

Operating Expenses 5,352 5,537 5,793 10,105

Depreciation and Amortization 165 141 149 104

Operating Income $1,128 ($102) $886 $1,069

% of Net Sales 3.7% -0.3% 3.0% 3.9%

Operating Income $1,128 ($102) $886 $1,069

Depreciation and Amortization 3,053 2,064 2,327 2,109

EBITDA $4,180 $1,962 $3,213 $3,178

% of Net Sales 13.6% 6.5% 10.9% 11.5%

Adjustements to EBITDA

Family Vehicle Leases 44 34 34 34

Non-Active Employee 54 54 54 54

Miscellaneous Family Expenses 200 176 192 237

Advertising 17 22 28 46

Life Insurance 39 69 27 226

Total Adjustments to EBITDA $355 $355 $336 $597

Adjusted EBITDA $4,535 $2,317 $3,549 $3,775

% of Net Sales 14.8% 7.6% 12.0% 13.6%

Historical Balance Sheet Historical Income Statement

I n v e s t m e n t R a t i o n a l e

&

P r o j e c t i o n s

II

Investment Rationale

• Attractively Priced

– 3.9x 2014E EBITDA

• Return Potential

– Weighted AVG IRR: 25.6%

• Positive Industry Trends

• Experienced Management

Team and Employees

– Average 20 years experience

• Good Pipeline Visibility

– Long-term Recurring Client

Relationships

• Organic Growth and Growth

through Acquisition


5-Year Sensitivity of IRR - Mezzanine

Exit Multiple and Scenario Exit Multiple and Scenario

### 4.0x 4.5x 5.0x 5.5x 6.0x

1 25.2% 25.3% 25.4% 25.5% 25.6%

2 25.4% 25.5% 25.6% 25.7% 25.8%

3 26.1% 26.2% 26.3% 26.3% 26.4%

5-Year Sensitivity of IRR - Equity

Exit Multiple and Scenario Exit Multiple and Scenario

### 4.0x 4.5x 5.0x 5.5x 6.0x

1 23.1% 26.9% 30.4% 33.6% 36.4%

2 18.7% 23.0% 26.7% 30.1% 33.1%

3 12.0% 15.6% 18.9% 21.7% 24.3%

Key Objectives

• Centralize Finance and HR

• Increase Asset Utilization

• Eliminate Facility Redundancies

• Scale Back Capital Expenditures

• Reduce Freight Costs

• Crystalize Outbound Marketing

Add-on Opportunities


Alias Nearest City LTM Revenue EBITDANumber of

Employees

Target FL I Orlando, FL $6,600,000 $1,000,000 18

Target FL II Miami, FL $3,500,000 $750,000 17

Target TX I Houston, TX $7,000,000 $1,400,000 25

Target TX II San Antonio, TX $9,000,000 $1,250,000 40

Target CA I Anaheim, CA $2,900,000 $500,000 12

Target CA II San Diego, CA $25,000,000 $3,000,000 55

Target MW I Columbus, OH $12,000,000 $1,700,000 50

Target MW II Columbus, OH $9,000,000 $1,400,000 45

Target MW III Cleveland, OH $8,000,000 $1,120,000 -

Target MW IV Detroit, MI $13,000,000 $1,820,000 -

Target MN I Minneapolis, MN $3,800,000 $500,000 15

Target MN II Minneapolis, MN $4,000,000 $850,000 18

VEGAS SALES FORCE Target NV I Las Vegas, NV $2,900,000 $550,000 15

NORTH CAROLINA

STAGING OPPORTUNITYTarget NC I Raleigh, NC $4,000,000 $800,000 20

Target ME I New York, NY $10,000,000 $1,500,000 30

Target ME II Randolf, NJ $10,000,000 $1,500,000 30

Target ME III Baltimore, MD $4,000,000 $800,000 30

Target CHI I Chicago, IL $3,300,000 $750,000 20

Target CHI II Chicago, IL $4,200,000 $750,000 20

CHICAGO TRADESHOW

MARKET

CALIFORNIA PLATFORM

TEXAS GAP MARKET

FLORIDA TRADESHOW &

LIVE EVENT MARKET

OHIO A / V PLAYER

MINNESOTA SALES FORCE

NEW YORK PRODUCTION &

SALES

Sources and Uses of Funds


Sources and Uses of Funds at Closing Summary of Inputs

% of Tot Rate

Amount Capital (Cash/PIK)

SOURCES:

Revolver $0.00 0.0% 6.50%

New Bank Term Loan 5.00 27.0% 6.50%

Senior Debt $5.00 27.0%

Mezzanine 6.00 32.4% 12.00% / 12.00%

Total Debt $11.00 59%

Management Equity 2.50 13.5% ----

Funding Co- Sponsor Equity 5.00 27.0% ----

Total Equity 7.50 40.5%

Total Sources of Funds $18.50 100.0%

USES:

Cash to Seller $15.72 84.9%

Management Rollover 0.22 1.2%

Repay Existing Debt 2.28 12.3%

Fees & Expenses 0.29 1.5%

Total Uses of Funds $18.50 100.0%

Platform Deal

• $5 million, ABL

• $6 million, Mezzanine

• $5 million, Equity

• $2.5 million, Rollover

Add-Ons Summary

Target FL II Target TX I Target CA I Target CHI I Target MN II Target NV I

Revenue $3.50 $7.00 $2.90 $3.30 $4.00 $2.90

EBITDA $0.75 $1.40 $0.50 $0.75 $0.85 $0.55

EBITDA Margin 21% 20% 17% 23% 21% 19%

EV/EBITDA Multiple 4.00x 4.00x 4.00x 4.00x 4.00x 4.00x

Enterprise Value 3.0 5.6 2.0 3.0 3.4 2.2

Plus: Fees 0.1 0.2 0.1 0.1 0.1 0.1

Purchase Price $3.1 $5.8 $2.1 $3.1 $3.5 $2.3

Equity, 50% 1.6 2.9 1.0 1.6 1.8 1.1

Mezzanine, 50% 1.6 2.9 1.0 1.6 1.8 1.1


Exit Strategy Strategic Bids received from:

• SmartSource @ $15-16M

• PRG @ $20-22M

• ANC @ $25M

• SWANK @ $28M

• PSAV

• Significant interest shown by

strategics in the space

• Retain EBITDA margins of 18-20%

on up to $80M of revenue

• Bids at 6-7x EBITDA already

received

Ownership Summary

Primary Warrants Fully-Diluted

Newco Sponsor 0% 10% 10.0%

Mezzanine 0% 2% 2.0%

Co-Sponsor 80% 0 70.4%

Newco MGMT 20% 0 17.6%

P r o J e c t e d F I n a n c I a l s

III

Winner: 6 Add-Ons


IRR: 30.4%

Wounded: 4 Add-Ons


IRR: 26.7%

Walking

Wipeout: No Add-Ons


IRR: 12.0%

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