Overview of the M&a Process-1

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Overview of The M&A Process

Mark Roble Investments Inc.

Mark Hsu

January 14, 2007


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Mark Roble Investments

Mark Roble Investment (MRI) is a privately held companyregistered in British Virgin Island. MRI aims to offer the massaffluent in Taiwan greater access to oversea alternative

investment vehicles, which can be defined a broadlyinvestment alternatives other than a traditional long fund, e.g.mutual fund. We serve as an intermediary in bringingalternative investment products to our clients.

MRI established in 2006 aims to enhance the dynamics ofinvestment choice in Taiwan. Apart from other commercialbanking or investment companies is our unique investmentopportunities and commitment to long-tern customizedresults. We carry out a thorough selection process andregular reviews of all the products we offer to ensure theyare the best investment choices. Thorough due diligence onour recommended selection is conducted by specialists.


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Mark Hsu

Mark is a graduate of Stanford University, with a B.S. in BiologicalScience and a minor in Economics.

In 1994, Mark co-founded with Sinanet with three Stanford graduate

students. Sinanet later became Sina, the largest Chinese languageportal in the world. Sina currently trades on the Nasdaq, ticker symbolSina.

In 1996, Mark co-founded Envision with his Stanford classmate and

forever changed the education market in Taiwan. Envision became thefirst company to offer "zero" handling fee for language school study.

In 1999, Mark co-founded Envision Internet Media Group, now Skysoft,the maker of KKman and KKcity. KKman is the most popular software

created in Taiwan. In founding Envision Internet Media Group, Marksuccessfully raised US$1.3 million from investors.

Mark specializes in identifying investment opportunities, evaluating

business model and relationship management.


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M&A Strategic Buyer

Strategic Buyer

Established player in the industry

Have an understanding and

commitment to the industry

Have a more strategic view on valuation

Likely to want to participate

management of business and may havestrategic synergy with the Seller

May wish to have a path to control

elaborated at the time of initial

investment, and may require board seat

Jabil Circuit Taiwan Green Point

Nov- 06 100%(US$881m)

Hsinchu BankStandard Chartered

Sep- 06 >51%(US$1,206m)

Four main strategic rationales for acquisition: To acquire newcapacities or add to the existing ones, To establish a newbusiness model, To lower costs, and To improve market position


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M&A Financial Buyer

Private equity firms with interest inSellers industry

Concerned about financial performance

including cash generation potential,ROE, revenue and profit growth rate

Require a clear view of exit (e.g. IPO)

Will rely mainly on current managementteam to run the business

Want control, as likely to exit within 2-5years

Financial Buyer

Nov- 06100%

(US$5,240m)

Carlyle Group ASE

Taiwan BroadbandMacquarie

Jun- 0660%

(US$879m)

Financial buyer purchase a Business where: Private equityfunds the majority of funding, Significant portion of funding fromprior ranking securities, Incumbent/New management have astake in the business, There will be a capitalization event in duecourse


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What is Private Equity Fund?

Private equity provides capital to companies which are not quotedon the stock market, and exits through secondary market, IPO, orprivate placement to earn higher return than public traded equities.

BreakevenRevenue

Profit

Productdevelopment

ProductLaunch

MarketPenetration

Product Maturity

Seed Capital Start Up Expansion Phase Later Stage

Early Stage Expansion/Development/Growth Capital

Buyout

J Curve (Private Equity Segmentation)


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Preliminary Assessment on Potential Buyer

ProductMatch

MarketFocus

Ability toPay

OverallAssessment

Jabil Circuit

Lite-On IT Co.

Mode

rate

Very

LowLowHigh

Very

high

Preliminary Assessment

Market Cap(US$ mn)

Sales(US$ mn)

Earnings(US$ mn)

Net Cash (US$mn) / Gearing

Overview

JabilCircuit

5,998 8,464 281 499 %

US-based EMS providerto OEMs in theautomotive, computing,consumer, medical,networking, peripherals,

and telecommunicationsindustries

Potential Buyer Profile


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Valuation - DCF Overview

Discounted Cash Flow Analysis (DCF):

Net present value of future cash flows, sensitive toassumptions.

Discounted Cash Flow Analysis (DCF)


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Valuation - Multiple Method

Comparable Trading Companies Analysis:

Comparable publicly traded companies as a valuationbenchmark

Precedent Transactions Analysis:

Recent industry precedent transactions as a valuation

benchmark

P / EMultiple

EV / SalesMultiple

EV / EBITMultiple

MarketCap / NAVMultiple

EV /EBITDAMultiple

EV /EBITDARMultiple

Commonly Used Multiples


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Investment Banking M&A Process

Define

objectives

Review

operations

and financialperformance

Develop

preliminaryvaluation

Develop

preliminarystrategy

Define key

selling points;prepare

InformationMemorandum

Evaluate

buyers

Finalise buyerlist

Customise

approach forbuyers

Contact

buyers

Distribute

InformationMemorandum

Receivepreliminary

indications ofinterest

Select

participantsbased on:

Price

Terms

Arrange due

diligencevisits

Receive final

bids

Negotiate anddocument

Announcement

Weeks 13 Weeks 36 Weeks 610 Weeks 1014

Business

andprocessreview

Prepare

marketingmaterials/ strategy

Formalmarketingapproach

Monitor

buyerduediligence

Receive

finalbids andnegotiate

Weeks 1416

Closing


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Cause of success (%) :

Detailed integration plans(76)

Clarity of acquisitionpurpose (76)

Good cultural fit (59) High degree of target

management co-operation(47)

Knowledge of target and itsindustry (41)

Successful and Failed M&A Case Study

Successful M&A Failed M&A

Cause of failure (%) :

Target management attitudesand cultural differences (85)

No post-acquisition integrationplanning (80)

Lack of knowledge of industryor target (45)

Poor management of target (45)

No prior acquisition experience

(30)

Source: Coopers & Lybrand study, 1993


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Q & A

Overview of the M&a Process-1

Documents

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