SEC Hot Topics Seminar

State of the Capital MarketsSeptember 14, 2010

2

Economic outlook

April 2010

November 2009

April 2010

November 2009

Downturn to end within 12 months

Confidence in local economy

Downturn in industries to end within 12 months

40%Of companies believe the global downturn will end within the next 12 months compared with 30% in 2009

64%Of companies feel more confident about the prospects for their local economy than six months ago, the most optimistic being Australia61%Of respondents expect the downturn in their own industries to end within 12 months, compared to just 49% six months ago

*Data presented in slides 2-10 is based on an April 2010 survey of 817 executives by Ernst & Young LLP.

3

Capital-related issues are top-of-mind in boardrooms and C-suites

Operational efficiencies/cost reduction

Customer segmentation and profitability

Performance monitoring of subsidiary businesses

Supply chain risks/performance

Balance between fixed and variable costs

Integrating previously acquired business

4

Priorities for investing capital

5

Preserving capitalCompanies are operationally restructuring to focus on performance improvement

Wave of refinancing expected

When restructuring what will be your priority? How soon are you likely to refinance loans or other debt obligations?

11%

26%

35%

28%

0 5 10 15 20 25 30 35 40

3-4 years

1-2 years

6 - 12 months

Within 6 months

November 2009

Other20%

Liquidity and working capital

management30%

Performance improvement

50%

Operational restructuring

24%

Performance improvement

42%

Capital/debt structure

14%

Other7%

Liquidity and working capital management

13%

April 2010

6

Raising capital

Those with access to funding will be well placed to take advantage of opportunities

As a result of the downturn, deal processes continue to evolve

For companies that need access to funding for capital projects, when do you think this will become available?

How likely is your company to execute divestments in the following time periods?

1-2 years6 -12 months0-6 months

25%

37%

30%

6%

1%1%

Within 6 months

6 –12 months

1 –2 years

3 –5 years

Not in the foreseeable future

More than 5 years

7

Capital markets

26% of all respondents stated that access to funding is not a problem for their company

Wave of refinancing is expected with 58% of companies needing to refinance loans or other debt within the next four years

Driving operational fitness and working capital management remains critical – 35% still need to restructure core business

62% expect financing to fund major projects available in the next 12 months

61%Of companies say that credit and capital conditions have improved in the last six months

8

Focusing on growth

April 2010

76%Of companies are focusing on growth, up 56% compared to six months ago

9

Optimistic deal market

6-12 months 0-6 months

Likelihood of acquisitions

57%Expect to make an acquisition in the next 12 months, up from 33%

47%Expect to do so in the next 6 months, up from 25%

10

IPO Market Overview

Summary Annual U.S. IPO Market Statistics

• After almost disappearing entirely at the end of 2008 and early 2009, the IPO market has begun to return over the past several quarters

• There is significant investor interest around IPO’s showing strong growth profiles, clear differentiation, compelling customer value propositions and experienced management teams

• In the first eight months of 2010, IPO volume totaled $65.9 billion across 210 deals compared to $15.9 billion and 46 deals over the same period last year

Quarterly U.S. IPO Market Statistics

$ 841 $ 3,002

$ 6,672

$ 12,892

$ 5,067 $ 5,030 $ 3,276

3

15

20

32

31

38

23

1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q TD

Dollars Raised ($ millions) Number of IPOs

$ 43,212

$ 48,073

$ 26,215 $ 28,379

$ 13,373

195216

37

7092

2006 2007 2008 2009 2010 YTD

Dollars Raised ($ millions)Number of IPOs

11

Follow-On Market Overview

Summary Annual U.S. Follow-On Market Statistics

• Although the markets are open for business, investors are highly selective with the companies they chose to invest

• The number of follow-on’s has remained stable but the amount of dollars invested has come off the highs of the latter quarters of 2009 which exhibit the pent up demand of investors

• In the first eight months of 2010, FO volume totaled $129.6 billion across 595 deals compared to $252.0 billion and 613 deals over the same period last year

Quarterly U.S. Follow-On Market Statistics

$ 11,157

$ 115,708

$ 49,350

$ 72,884

$ 27,047 $ 29,765 $ 12,949

63

247262

217

177 172

64

1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q TD

Dollars Raised ($ millions) Number of FOs

$ 105,229 $ 114,853

$ 176,032

$ 249,098

$ 69,786

559526

336

789

412

2006 2007 2008 2009 2010 YTD

Dollars Raised ($ millions)Number of FOs

12

Current IPO Backlog

Industry # Current Value ($M) Avg ($M)Computers & Electronics 23 $ 4,909.3 $ 213.4

Finance 20 3,757.7 187.9

Healthcare 17 6,274.6 369.1

Real Estate/Property 15 4,057.8 270.5

Transportation 6 1,360.0 226.7

Professional Services 6 733.3 122.2

Chemicals 5 675.0 135.0

Retail 3 1,231.3 410.4

Construction/Building 3 943.8 314.6

Auto/Truck 3 530.0 176.7

Dinning & Lodging 3 472.5 157.5

Mining 3 139.9 46.6

Food & Beverage 3 100.0 33.3

Telecommunications 2 200.0 100.0

Consumer Products 2 185.0 92.5

Machinery 1 400.0 400.0

Metal & Steel 1 150.0 150.0

Insurance 1 100.0 100.0

Aerospace 1 75.0 75.0

Textile 1 25.0 25.0

Forestry & Paper 1 23.0 23.0

Leisure & Recreation 1 15.6 15.6

Agribusiness 1 0.0 0.0

Total 122 $ 26,358.6 $ 216.1

13

Current Follow-On Backlog

Industry # Current Value ($M) Avg ($M)Computers & Electronics 6 $ 612.4 $ 102.1

Finance 6 444.0 74.0

Utility & Energy 4 602.0 150.5

Real Estate/Property 3 615.5 205.2

Professional Services 3 602.2 200.7

Oil & Gas 3 398.7 132.9

Telecommunications 2 3,052.3 1,526.1

Chemicals 2 230.0 115.0

Transportation 2 191.5 95.8

Healthcare 2 48.0 24.0

Construction/Building 2 45.9 23.0

Consumer Products 2 45.0 22.5

Retail 2 42.0 21.0

Forestry & Paper 1 60.0 60.0

Leaisure & Recreation 1 10.7 10.7

Dining & Lodging 1 2.7 2.7

Total 42 $ 7,002.8 $ 166.7

14

IPO and Follow-On Post Deal Performance

IPOs Above/In Range/Below Deals % Change Offer / 1 Day Deals % Change Offer / 1 Day

Above 10 21.21% 7 25.76%In Range 40 4.40 14 7.74 Below 46 1.90 2 2.36 Total 96 5.27 23 13.33

2010 2009

FOs Above/In Range/Below Deals % Change Offer / 1 Day Deals % Change Offer / 1 Day

Above 30 0.29% 15 6.67%In Range 1 2.57 4 3.33 Below 337 2.27 373 3.82 Total 368 2.15 392 3.95

2010 2009

15

Re-IPO Case Study

Share Price Performance vs. S&P 500

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1,000

2,000

3,000

4,000

5,000

6,000

0

2

4

6

8

10

12

14

16

Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10

Th

ous

ands

KITD Share Volume KITD Share Price

16

Follow-On Case Study• Kid Brands Inc., formerly known as Russ Berrie and Company, is a designer, importer,

marketer and distributor of infant and juvenile consumer products, with a complete platform offering of 5,300 products for customers Toy “R” Us, Target, Walmart and others

• D. E. Shaw Laminar Portfolios decided to divest their interest in Kid Brands after having held the position since 2006

• Through a collaborative marketing strategy involving Kid Brands, Roth was able to place D.E Shaw’s position to 51 institutional investors at a 6.9% discount to the previous days closing price, broadening the company’s shareholder base and improving liquidity of its common shares

• On June 10, Kid Brands announced that D.E. Shaw had priced an underwritten secondary offering of approximately 4.4 million shares, or 20.4 % of common stock outstanding, for $7.25 per share, through a confidentially-marketed follow-on transaction managed solely by Roth

Share Price Performance vs. S&P 500

Kid Brands Subsidiaries

0

500

1,000

1,500

2,000

2,500

3,000

3,500

0.00

2.00

4.00

6.00

8.00

10.00

12.00

Dec-09 Feb-10 Apr-10 Jun-10 Aug-10

Th

ous

ands

KID Share Volume KID Share Pricing

17

Confidence returning to the markets

Funding becoming more available

Heightened uncertainty continues

Investor focus on capital allocation

Pent-up demand/supply in M&A markets

Industries bifurcating: consolidators and consolidatees

Deal processes continue to evolve

In conclusion