baird m&a update (may 2009)

8/14/2019 Baird M&A update (May 2009)

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M&A Market AnalysisMay 2009

Global M&A Monthly

A Middle-Market Perspective on U.S., Europe, and AsiaMergers & Acquisitions

Christopher C. McMahon Brian P. McDonagh Howard P. LanserManaging Director Managing Director Director, Mergers & AcquisitionsHead of Global M&A Co-Head of M&A Head of Business [email protected] [email protected] [email protected] 704.998.5757 312.609.5478

J. David Cumberland, CFA Jamie C. Kaplan Thomas J. GaulDirector, M&A Research Associate, Mergers & Acquisitions M&A Market [email protected] [email protected] [email protected] 312.609.5451 312.609.4978


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In This Issue Page

Please refer to Appendix Disclaimers and Other Disclosures on page 32.

Global M& A Commentary and Deal Statistics ...................................................... 1The number of global M&A transactions dropped 39.1%, which was the largest percentage decline in monthly deal count thisdecade. Dollar volume was 43.3% below the year-ago level.

U.S. M&A Commentary and Deal Statist ics ......................................................... 5The total of 518 deals announced in April represented a 35.3% decline from the prior-year period and was well below thelast 12 month (LTM) average of 693 deals. Dollar volume was $65.0 billion, a 33.0% decrease from the year-ago period.

Europe M&A Commentary and Deal Statistics................................................... 10The negative trend for M&A activity worsened in April. The deal count of 543 was 52.5% below the year-ago level, resultingin the largest percentage decrease in monthly deal count for Europe in over a decade.

U.K. Cross-Border M&A Activity ........................................................................ 14Year to date, there was a total of 709 announced U.K. transactions, a 46.7% decrease from the year-ago period. Dollarvolume dropped 40.7% to $55.1 billion through April.

Germany Cross-Border M&A Activity ................................................................ 15A total of 404 German M&A transactions were announced for the year-to-date period, a 25.6% decrease compared to thefirst four months of 2008.

As ia Commentary and Deal Statist ics ............................................................... 16Asia has not escaped the global slowdown in M&A activity. The number of transactions in Asia (ex. Japan) declined 31.1% inApril.

China M&A Activity and Deal Statistics ............................................................. 17China deal activity declined 29.3% through April. Dollar volume of $21.3 billion was down 48.3% compared to the year-agoperiod.

India M&A Activity and Deal Statistics ............................................................. 19Year to date, there was a total of 199 announced India M&A transactions, a 46.9% drop from the year-ago period. IndiaM&A dollar volume decreased 89.1% and totaled a mere $1.4 billion through April.

Japan M&A Act iv ity .......................................................................................... 21Japan M&A performed relatively better than the other regions of the world in the first four months of 2009, with a 16.4%decrease in the number of deals and a 27.9% drop in dollar volume.

Economic Commentary ..................................................................................... 22The incoming economic data continues to paint a picture of recession, although its grip appears to be weakening. Theeconomy shed another 539,000 jobs in April, the sixth consecutive month in which more than half-a-million jobs were lost,but also 200,000 fewer than the nearly three-quarters of a million jobs that were lost in January.

Restructuring New s .......................................................................................... 24The Baird CDS Index declined in April for the second consecutive month, which indicates that the cost to insure against acredit default for non-investment grade companies outside of the financial sector has now fallen for two months in a row.The Index decreased by 16.5% in April, falling to 1320.4 on April 30, a drop of 260.1 points from 1580.5 on March 31.

Transaction Spotlight Sale of Orion Corporation to J ohn Crane (SmithsGroup plc) ........................................................................................................ 25Orion Corporation recently completed its sale to John Crane Inc., a division of Smiths Group plc. The transaction closed inMay 2009, and terms were not disclosed.

Recent Baird M&A Transactions ....................................................................... 26A summary of Bairds announced M&A Transactions over the past 12 months. Baird U.S. Equity Research Coverage ............................................................... 27

In April 2009, Baird added 2 companies to coverage, bringing the total coverage to 520 companies.

Investment Bank ing Contact List ..................................................................... 31Please note that historical M& A data presented in this months issue is differentfrom the information published in previous months. After a thorough duediligence process, Baird has switched to Dealogic as its provider of M& A data.


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Global M&A Commentary

Robert W. Baird & Co. 1

On paper, April global M&A activity continued to add tothe overall gloomy M&A environment. However, theemergence of positive trends in key M&A variables hasinstilled a sense of cautious optimism for M&A activityin the second half of 2009. In terms of the statistics,the number of transactions dropped 39.1%, which was

the largest percentage decline in monthly deal countthis decade. Dollar volume was 43.3% below the year-ago level. The middle-market again witnessed a largefall-off in April, with deal activity down 33.1% anddollar volume declining 54.8%.

Year to date through April, the number of announceddeals declined 32.2%. Dollar volume fell 38.8% in thefirst four months of 2009. The middle-market haslagged overall activity in 2009, with deal count down35.7% and transaction value 53.0% below the year-ago figure.

The continued decline in M&A coincides with ongoingweakness across global economies and tight credit

markets in the U.S. and Europe. The Organization forEconomic Cooperation and Development (OECD) isprojecting economic contraction of 4.3% in its 30member nations during 2009. However, the head ofthe OECD recently noted signs of bottoming amongeconomic indicators and potential for recovery to begintoward the end of this year.

In terms of the U.S. credit markets, the high-yield andleveraged loan markets appear to be thawing, withrelatively high levels of inflows and primary issuances.If fundamentals in these key markets continue toimprove in the second quarter, we would expect morecapital to flow into M&A, thus accelerating deal activity

in the second half of 2009. In contrast, Europeancredit markets have not shown much improvement,and sentiment remains low as additional banking crisesin Germany and Eastern Europe seem imminent.

The rebound in the equity markets, which began inMarch, carried through April. The five major indicespresented in the chart below gained an average of11.2% in April (after rising 7.2% in March). Eventhough equity values remain well below peak levelsfrom 2008, the new issuance market has shown signs

of life, helping inject confidence into the overallmarket, including M&A.

The latest semi-annual survey of middle-marketmerger professionals conducted by the Association forCorporate Growth (ACG) and Thomson Reutersunderscored the impact of challenging global economicand credit conditions on deal activity. Among the 700+respondents, 45% described the current environmentfor M&A as poor, with only 12% characterizing thelandscape as good or excellent. Half of the participantsviewed the recession or the credit crunch as thebiggest obstacle to M&A activity.

Despite recent challenges, participants in the survey

expect an uptick in deal flow in the near term. Amongrespondents, 56% forecast an increase in the numberof transactions over the next six months, and only10% anticipate a decline. Slight improvement in debtmarkets (as predicted by 71% for the upcoming sixmonths) would contribute to a faster pace of M&Aactivity, as noted previously.

Although signals are still mixed, continued positivemomentum in the credit and equity markets coupledwith a sense that the world economies have bottomedcould be the catalyst for a revival of M&A activity in Q32009.

Note: See pages 5, 10, and 16 for specific U.S., Europe, and Asia commentary.

Relative Performance of Global Market Indices

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

110.0%

1/1/08 3/1/08 5/1/08 6/30/08 8/30/08 10/30/08 12/29/08 2/28/09 4/30/09

S&P 500 FTSE 100 DAX Hang Seng Nikkei 225

(43.6%)

(38.2%)(38.9%)

(33.2%)

(39.9%)

_____________________Source: Capital IQ.


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Global M&A Commentary


Global M&A Activity

21,70324,309

21,458 19,964 18,395

24,166

31,770

28,015

7,041

20,824

28,198

10,382

0

10,000

20,000

30,000

40,000

#ofDeals

$0

$1,000

$2,000

$3,000

$4,000

DealValue

# of Deals Undisclosed # of Deals Middle-Market # of Deals >$1B Deal Value

Total 21,703 24,309 21,458 19,964 18,395 20,824 24,166 28,198 31,770 28,015 10,382 7,041

# of Deals >$1B 387 436 235 187 201 299 390 538 643 342 135 57

# of Deals Middle-Market 9,448 11,967 9,830 9,095 8,987 10,267 11,977 13,121 14,348 12,915 4,714 3,030

# of Deals Undisclosed 11,868 11,906 11,393 10,682 9,207 10,258 11,799 14,539 16,779 14,758 5,533 3,954

Deal Value $2,762 $2,802 $1,447 $1,053 $1,189 $1,713 $2,448 $3,314 $3,633 $2,241 $757 $463

1999 2000 2001 2002 2003 2004 2005 2006 2007 20084/08

YTD

4/09

YTD

($ in billions)

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis.Note: Middle-market transactions defined as those with a disclosed transaction value of less than $1 billion.

Global Middle-Market M&A Activity

9,448

11,967

9,830 9,095 8,987

11,97713,121 12,915

4,7143,030

14,348

10,267

0

5,000

10,000

15,000

#ofDeals

$0

$500

$1,000

$1,500

DealValue

# of Transactions


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Global M&A Deal Statistics


($ in millions)Number of Deals April Deal Value April

2008 2009 % Change 2008 2009 % Change

North America 940 593 (36.9%) $101,342 $66,987 (33.9%)

U.S. 800 518 (35.3%) $96,981 $65,004 (33.0%)

Central / South America 79 45 (43.0%) $6,687 $7,182 7.4%

Europe 1,142 543 (52.5%) $64,303 $22,241 (65.4%)

U.K. 395 154 (61.0%) $19,674 $6,327 (67.8%)

Germany 140 77 (45.0%) $7,689 $3,993 (48.1%)

Africa / Middle East 70 28 (60.0%) $5,276 $862 (83.7%)

Asia-Pacific (ex. Japan) 512 353 (31.1%) $17,297 $14,939 (13.6%)

China 231 166 (28.1%) $10,372 $7,637 (26.4%)

India 95 49 (48.4%) $1,776 $762 (57.1%)

Japan 146 127 (13.0%) $10,378 $7,031 (32.2%)

Global Total 2,637 1,605 (39.1%) $181,876 $103,118 (43.3%)_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis.Note: Global Total will not equal the sum of the individual regions listed above, as cross-border transactions are reflected in both the targets and acquirors respective regions.

($ in millions) Number of Deals YTD Deal Value YTD

2008 2009 % Change 2008 2009 % Change

North America 3,975 2,706 (31.9%) $393,503 $276,852 (29.6%)

U.S. 3,447 2,385 (30.8%) $373,080 $242,248 (35.1%)

Central / South America 289 160 (44.6%) $38,171 $14,236 (62.7%)

Europe 4,140 2,618 (36.8%) $271,589 $125,858 (53.7%)

U.K. 1,329 709 (46.7%) $92,981 $55,107 (40.7%)

Germany 543 404 (25.6%) $17,721 $22,888 29.2%

Africa / Middle East 270 145 (46.3%) $19,789 $12,350 (37.6%)

Asia-Pacific (ex. Japan) 1,906 1,289 (32.4%) $86,741 $39,787 (54.1%)

China 841 595 (29.3%) $41,288 $21,331 (48.3%)

India 375 199 (46.9%) $12,848 $1,404 (89.1%)

Japan 719 601 (16.4%) $40,616 $29,279 (27.9%)

Global Total 10,382 7,041 (32.2%) $756,506 $462,719 (38.8%)

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis. YTD as of April 30.Note: Global Total will not equal the sum of the individual regions listed above, as cross-border transactions are reflected in both the targets and acquirors respective regions.


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Global Middle-Market M&A Deal Statistics


($ in millions)Number of Deals April Deal Value April

2008 2009 % Change 2008 2009 % Change

North America 396 278 (29.8%) $35,038 $13,236 (62.2%)

U.S. 302 229 (24.2%) $30,676 $11,254 (63.3%)


Europe 422 177 (58.1%) $32,985 $11,666 (64.6%)

U.K. 191 69 (63.9%) $12,092 $2,727 (77.5%)

Germany 31 18 (41.9%) $3,566 $2,318 (35.0%)

Africa / Middle East 42 18 (57.1%) $1,813 $862 (52.5%)

Asia-Pacific (ex. Japan) 330 250 (24.2%) $13,817 $9,241 (33.1%)

China 173 138 (20.2%) $8,155 $6,431 (21.1%)

India 44 13 (70.5%) $1,776 $762 (57.1%)

Japan 62 64 3.2% $1,932 $2,199 13.9%

Global Total 1,189 795 (33.1%) $78,183 $35,309 (54.8%)_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis.Note: Global Total will not equal the sum of the individual regions listed above, as cross-border transactions are reflected in both the targets and acquirors respective regions.

($ in millions)Number of Deals YTD Deal Value YTD

2008 2009 % Change 2008 2009 % Change

North America 1,611 1,102 (31.6%) $128,287 $55,626 (56.6%)

U.S. 1,289 917 (28.9%) $116,921 $49,304 (57.8%)


Europe 1,525 747 (51.0%) $123,160 $46,146 (62.5%)

U.K. 664 251 (62.2%) $43,985 $13,959 (68.3%)

Germany 126 76 (39.7%) $13,597 $7,286 (46.4%)

Africa / Middle East 153 69 (54.9%) $11,729 $6,061 (48.3%)

Asia-Pacific (ex. Japan) 1,281 832 (35.1%) $56,427 $29,278 (48.1%)

China 632 467 (26.1%) $30,122 $17,292 (42.6%)

India 181 55 (69.6%) $7,312 $1,404 (80.8%)

Japan 388 348 (10.3%) $20,457 $17,589 (14.0%)

Global Total 4,714 3,030 (35.7%) $310,355 $145,896 (53.0%)

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis. YTD as of April 30.Note: Global Total will not equal the sum of the individual regions listed above, as cross-border transactions are reflected in both the targets and acquirors respective regions.


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U.S. M&A Commentary


MAJOR M&A DOWNTURN EXTENDS INTO APRIL

The landscape for M&A in the U.S. remained rocky inApril. The number of announced U.S. transactions fell35.3%, which represented modest deteriorationcompared to the average decline of 28.2% in theprevious six months. Overall dollar volume decreased33.0%. The U.S. middle-market deal count was down24.2%. Middle-market dollar volume declined 63.3%due largely to the 60.6% drop in the number of largerdeals ($100 million to $1 billion).

Extensive economic weakness year to date in the U.S.has caused the Federal Reserve to lower its 2009 GDPprojection to down 1.3-2.0% from its previous forecastof down 0.5-1.3%. A slight increase in GDP is stillexpected in the second half of the year as stimulusspending is implemented to a greater extent. While theunemployment rate rose to 8.9% (from 8.5%), the

reduction in payrolls (539,000) was below the six-month average (656,000). According to outplacementconsultancy Challenger, Gray & Christmas, the numberof planned layoffs announced in April was 12% underthe March figure and the lowest level since October2008. These updates reinforce recent perceptions thatthe rate of economic deterioration has stabilized.

The S&P 500 rose 9.4% in April for the best monthlyperformance for this index in nine years. The rally(which began in March) reflects signs of bottoming forsome economic indicators along with improvement insentiment among consumers and business leaders.Although management teams are still coping with heftydeclines in equity values over the past year (S&P 500 -

37.0% in the 12 months through April), the marketrebound has resulted in a sizable increase in follow-onofferings, potentially providing needed capital for M&A.

Credit markets still remain a constraint to deal activity,but the latest metrics are somewhat encouragingrelative to early 2009. In the Federal Reserves Aprilsurvey of senior loan officers, fewer respondents(compared to the prior survey in January) notedhaving recently tightened standards for loans tobusinesses. This improving tone for the credit marketsis evident in sequential declines in TED spreads andLIBOR as well as increasing inflows into the high-yieldand leveraged loan markets. Firmer footing for thecredit markets on a broader basis likely depends onstabilization for delinquency rates, which havecontinued to rise.

The latest CEO survey conducted by the BusinessCouncil (an association of business leaders) could bodewell for an upturn in the U.S. M&A market. One-thirdof respondents expect business conditions in the U.Sto improve in the next six months (compared to 9% inthe early 2009 survey), while only 16% anticipateworsening conditions (down from nearly two-thirds inpreviously). With CEO confidence a crucial determiningfactor for M&A activity, we view the survey as apotential leading indicator of better deal flow.

U.S. M&A Activity

The total of 518 deals announced in Aprirepresented a 35.3% decline from the prior-yeaperiod and was well below the last 12 month(LTM) average of 693 deals. Dollar volume totaled$65.0 billion, a 33.0% decrease from the year-ago period.

Through the first four months of 2009, thenumber of U.S. M&A deals was 2,385, a 30.8%decline compared to January-April 2008. Dollavolume totaled $242.2 billion, a 35.1% drop fromlast year.

Year to date, there was a total of 24 billion-dollar-plus deals compared to 49 in 2009. Billion-dollarplus deal value has decreased 24.7%.

U.S. Middle-Market Activity

In April, there was a total of 229 announced U.Smiddle-market M&A transactions, representing a24.2% decrease from April 2008. Middle-markedollar volume dropped 63.3% to $11.3 billion.

On a year-to-date basis, the middle-markeexperienced a 28.9% decline in the number odeals and a 57.8% fall-off in dollar volume.

For all announced U.S. middle-marketransactions across industry sectors over the las12 months, the median Enterprise Value/EBITDAmultiple was 7.1x, compared to a multiple of 8.4xin 2008 and 10.5x in 2007. Of note, valuationshave dropped significantly over the first foumonths of 2009, with the median multiple sinkingto 5.9x.


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U.S. M&A Activity


U.S. M&A Activity

11,416 11,206

8,8587,900 7,856

8,918

11,089 11,619

9,369

3,4472,385

8,887

0

5,000

10,000

15,000

#ofDeals

$0

$400

$800

$1,200

$1,600

$2,000

DealValue


Total 11,416 11,206 8,858 7,900 7,856 8,887 8,918 11,089 11,619 9,369 3,447 2,385

# of Deals >$1B 243 226 141 74 91 161 188 249 308 129 49 24

# of Deals Middle-Market 4,557 5,851 3,954 3,429 3,706 3,966 3,861 3,847 3,591 3,527 1,289 917


Deal Value $1,632 $1,551 $841 $504 $612 $897 $1,226 $1,592 $1,641 $977 $373 $242

1999 2000 2001 2002 2003 2004 2005 2006 2007 20084/08

YTD

4/09

YTD

($ in billions)


U.S. Middle-Market M&A Activity

3,9543,429

3,706 3,966 3,861 3,847 3,591 3,527

1,289917

5,851

4,557

0

2,000

4,000

6,000

#ofDeals

$0

$150

$300

$450

$600

DealValue

# of Transactions


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U.S. Middle-Market M&A Deal Statistics


Number of Deals Deal Value

2008 2009 % Change ($ in millions) 2008 2009 % Change

April April

$1B $66,305 $53,750 (18.9%)

Undisclosed 486 275 (43.4%) Undisclosed ** ** **

Total 800 518 (35.3% ) Total $96,981 $65,004 (33.0%)

LTM Monthly Average 948 693 (26.9%) LTM Monthly Average $113,292 $70,800 (37.5% )

YTD YTD

$1B $256,159 $192,944 (24.7%)

Undisclosed 2,109 1,444 (31.5%) Undisclosed ** ** **

Total 3,447 2,385 (30.8%) Total $373,080 $242,248 (35.1% )

LTM LTM

$1B $942,879 $627,426 (33.5%)


Total 11,370 8,314 (26.9%) Total $1,359,501 $849,606 (37.5% )

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis.YTD and LTM as of April 30.


U.S. Middle-Market Enterprise Value to Median EBITDA, EBIT, and Revenue Multiples

Transaction Size 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008LTM2009

EV/EBITDA


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U.S. Middle-Market M&A Deal Statistics


U.S. Middle-Market Median Acquisition P remiums

15.0%

25.0%

35.0%

45.0%

55.0% 1-Week Premium 4-Week Premium

1-Week Premium 35.1% 37.7% 40.4% 37.0% 35.4% 30.3% 29.4% 27.4% 27.9% 33.9% 39.0%

4-Week Premium 42.1% 43.5% 43.7% 39.3% 39.2% 33.1% 33.5% 31.9% 29.8% 34.4% 38.7%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 LTM 2009

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis. LTM as of April 30.

U.S. Middle-Market Transaction Composi tion Strategic vs. Sponsor Deal Value

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

%o

fDealValue

Strategic Sponsor

Sponsor 13.9% 14.9% 16.8% 24.4% 27.3% 32.2% 32.6% 29.8% 30.2% 27.3% 28.5% 16.3%

Strategic 86.1% 85.1% 83.2% 75.6% 72.7% 67.8% 67.4% 70.2% 69.8% 72.7% 71.5% 83.7%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 4/08 4/09

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis.

U.S. Middle-Market M&A Payment Method by Number of Deals

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

%o

fDeals

Cash Stock Cash/Stock

Cash/Stock 6.4% 6.1% 6.6% 5.8% 5.5% 6.6% 6.2% 4.5% 6.0% 4.2% 3.8% 2.5%

Stock 27.4% 24.9% 25.5% 18.4% 15.0% 14.9% 13.1% 9.9% 11.2% 10.2% 9.1% 7.6%

Cash 66.2% 69.0% 67.9% 75.8% 79.5% 78.6% 80.7% 85.6% 82.8% 85.6% 87.1% 89.9%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 4/08 YTD 4/09 YTD



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U.S. Cross-Border M&A Activity


U.S. Inbound and Outbound M& A Activity

771

1,413

887 800

1,082822

1,003 941

784 580

1,023

1,2381,382

1,2291,067

1,515

1,1771,048 1,266

1,5311,463

1,205

0

500

1,000

1,500

2,000

#ofDeals

$0

$50

$100

$150

$200

$250$300

$350

DealValue

Inbound M&A Outbound M&A Inbound Deal Value Outbound Deal Value

Inbound M&A 822 1,003 941 784 580 771 1,023 1,238 1,382 1,229 1,067

Outbound M&A 1,413 1,515 1,177 887 800 1,048 1,082 1,266 1,531 1,463 1,205

Inbound Deal Value $263 $294 $102 $72 $55 $93 $122 $199 $324 $181 $164

Outbound Deal Value $148 $112 $110 $58 $73 $87 $102 $120 $181 $102 $73

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 4/09 LTM

($ in billions)

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis.Note: Inbound M&A represents U.S. target/non-U.S. acquiror; Outbound M&A represents non-U.S. target/U.S. acquiror.

Top 10 U.S.Target Industries Acquiredby Non-U.S. Companies -

YTD

Top 10 Non-U.S.Acquirors of U.S. Targets -

YTD

Top 10 Non-U.S. TargetIndustries Acquired by U.S.

Companies - YTD

Industry# of

Deals Country# of

Deals Industry# of

Deal

1. Computers & Electronics 54 1. Canada 78 1. Computers & Electronics 66

2. Healthcare 45 2. United Kingdom 43 2. Professional Services 53

3. Mining 25 3. Japan 24 3. Healthcare 33

4. Professional Services 22 4. Germany 15 4. Telecommunications 18

5. Utility & Energy 14 5. Australia 15 5. Food and Beverage 13

6. Oil & Gas 13 6. Switzerland 14 6. Consumer Products 13

7. Telecommunications 12 7. France 12 7. Mining 13

8. Finance 11 8. India 8 8. Oil & Gas 12

9. Chemicals 10 9. Sweden 7 9. Transportation 11

10. Retail 10 10. Netherlands 6 10. Chemicals 9

_____________________

Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis. YTD as of April 30, 2009.


12/35

Europe M&A Commentary


The negative trends in European M&A activityworsened in April. The deal count of 543 was 52.5%below the year-ago level, resulting in the largestpercentage decrease in monthly deal count for Europein over a decade. Reported dollar volume plunged65.4% to $22.2 billion. The pace of deal activity lagged

further in the middle-market, as the number of dealsfell 58.1%. Middle-market dollar volume dropped64.6%.

Year to date, there were 2,618 announced EuropeanM&A transactions, a 36.8% decrease compared to theyear-ago period. Dollar volume experienced a 53.7%decline through April.

The downturn in M&A largely reflects continuedeconomic deterioration in Europe. The EuropeanCommission recently cut its 2009 economic outlook forthe European Union, forecasting contraction of 4.0%(previously projected a decline of 1.9%). Thecommission cited the usual suspects: the globaleconomic crisis, weak global trade, and plummeting

home values. The commission is not optimistic about areturn to growth in 2010 (as is anticipated in othermajor regions), with the eurozone economy expectedto shrink 0.1% next year.

For the 12 month period through April, the medianEV/EBITDA multiple for European middle-market dealsstood at 7.8x, which compares to median valuations o8.8x in 2008 and 10.0x for 2007. Interestinglyvaluation levels in Europe have declined at a slowerate than in the U.S.

Year to date, there was a total of 709 announced U.Ktransactions, a 46.7% decrease from the year-agoperiod. Dollar volume dropped 40.7% to $55.1 billionthrough April. Domestic M&A represented 64.6% ototal deal activity.

A total of 404 German M&A transactions wereannounced for the year-to-date period, a 25.6%decrease compared to the first four months of 2008Dollar volume was up 29.2% due to RWE AGs $12.6billion acquisition of Essent N.V.; this transactionaccounted for approximately 55% of year-to-datedollar volume. Domestic M&A represented 52.0% oyear-to-date activity.

Europe M&A Activity

8,477

10,8499,782

8,6067,324

9,78010,629

11,95010,490

4,140

2,618

8,065

0

5,000

10,000

15,000

#

ofDeals

$0

$400

$800

$1,200

$1,600

$2,000

DealVal

ue


Total 8,477 10,849 9,782 8,606 7,324 8,065 9,780 10,629 11,950 10,490 4,140 2,618

# of Deals >$1B 156 219 86 101 94 108 177 212 283 175 69 19

# of Deals Middle-Market 3,676 4,592 4,020 3,518 3,130 3,505 4,193 4,577 4,721 3,823 1,525 747


Deal Value $1,233 $1,252 $536 $481 $456 $629 $973 $1,358 $1,650 $984 $272 $126

1999 2000 2001 2002 2003 2004 2005 2006 2007 20084/08

YTD

4/09

YTD

($ in billions)



13/35

Europe Middle-Market M&A Deal Statistics


Number of Deals Deal Value

2008 2009 % Change ($ in millions) 2008 2009 % Change

April April

$1B $31,319 $10,575 (66.2%)

Undisclosed 704 362 (48.6%) Undisclosed ** ** **

Total 1,142 543 (52.5%) Total $64,303 $22,241 (65.4% )

LTM Monthly Average 1,030 747 (27.5%) LTM Monthly Average $111,793 $69,796 (37.6%)

YTD YTD

$1B $148,429 $79,712 (46.3%)


Total 4,140 2,618 (36.8%) Total $271,589 $125,858 (53.7% )

LTM LTM

$1B $878,758 $603,254 (31.4%)


Total 12,362 8,967 (27.5%) Total $1,341,517 $837,546 (37.6% )



Europe Middle-Market Enterprise Value to Median EBITDA, EBIT, and Revenue Multiples

Transaction Size 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008LTM2009

EV/EBITDA


14/35

Europe Middle-Market M&A Deal Statistics


Europe Middle-Market Median Acquisition Premiums

0.0%

20.0%

40.0%

60.0%1-Week Premium 4-Week Premium

1-Week Premium 30.1% 31.6% 28.4% 29.0% 25.8% 23.6% 23.5% 20.4% 26.8% 35.9% 36.2%

4-Week Premium 37.1% 38.2% 34.2% 33.2% 30.2% 26.5% 28.5% 26.3% 31.7% 38.0% 35.9%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 LTM 2009

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis. LTM as of April 30.

Europe Middle-Market Transaction Composition Strategic vs. Sponsor Deal Value

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

%o

fDealValue

Strategic Sponsor

Sponsor 17.8% 17.6% 19.6% 22.3% 27.1% 34.3% 30.4% 23.8% 23.9% 22.3% 25.0% 16.6%

Strategic 82.2% 82.4% 80.4% 77.7% 72.9% 65.7% 69.6% 76.2% 76.1% 77.7% 75.0% 83.4%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 4/08 4/09


Europe Middle-Market M&A Payment Method by Number of Deals

0.0%20.0%40.0%60.0%80.0%

100.0%

%o

fDeals

Cash Stock Cash/Stock

Cash/Stock 6.9% 7.2% 6.0% 3.3% 2.4% 4.1% 3.9% 3.3% 3.9% 3.0% 3.5% 2.1%

Stock 15.9% 23.2% 18.1% 11.0% 8.8% 10.5% 10.8% 8.9% 8.8% 7.5% 7.5% 9.2%

Cash 77.2% 69.6% 75.9% 85.7% 88.9% 85.4% 85.3% 87.9% 87.2% 89.6% 88.9% 88.6%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 4/08 4/09



15/35

Europe Cross-Border M&A Activity


Europe Inbound and Outbound M&A

1,043 1,198 1,1401,035

845996

9371,063

1,1891,098

872927757

980

1,235

1,006

540726

1,1251,290 1,172 1,005

0

500

1,000

1,500

#ofDeals

$0

$100

$200

$300

$400

DealValue

Inbound M&A Outbound M&A Inbound Deal Value Outbound Deal Value

Inbound M&A 1,043 1,198 1,140 1035 845 996 937 1,063 1,189 1,098 872

Outbound M&A 980 1,235 1,006 757 540 726 927 1,125 1,290 1,172 1,005

Inbound Deal Value $116 $93 $78 $64 $74 $91 $121 $169 $181 $115 $77

Outbound Deal Value $268 $357 $104 $71 $38 $72 $119 $175 $342 $176 $160

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 4/09 LTM

($ in billions)

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis.Note: Inbound M&A represents European target/non-European acquiror; Outbound M&A represents non-European target/European acquiror.

Top 10 European Target Countries Acquiredby Non-European Companies - YTD

Top 10 European Target Industries Acquiredby Non-European Companies - YTD

Country # of Deals Indus try # of Deals

1. United Kingdom 71 1. Computers & Electronics 43

2. Germany 25 2. Professional Services 28

3. France 20 3. Healthcare 17

4. Spain 12 4. Consumer Products 14

5. Russian Federation 9 5. Telecommunications 13

6. Sweden 8 6. Auto/Truck 10

7. Netherlands 7 7. Food and Beverage 10

8. Belgium 7 8. Machinery 9

9. Finland 6 9. Mining 8

10. Switzerland 5 10. Transportation 8

Top 10 Non-European Target CountriesAcquired by European Companies - YTD

Top 10 Non-European Target IndustriesAcquired by European Companies - YTD

Country # of Deals Indus try # of Deals

1. United States of America 119 1. Healthcare 36

2. Australia 17 2. Computers & Electronics 31

3. China 15 3. Professional Services 27

4. Canada 13 4. Chemicals 16

5. Brazil 11 5. Consumer Products 14

6. India 10 6. Finance 14

7. Mexico 6 7. Construction/Building 13

8. New Zealand 4 8. Telecommunications 13

9. Singapore 4 9. Mining 13

10. United Arab Emirates 4 10. Oil & Gas 12

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis. YTD as of April 30, 2009.


16/35

U.K. Cross-Border M&A Activity


U.K. Number of Deals (Domestic/Outbound/ Inbound)

3,040

3,828

3,3342,994

2,4672,763

3,346 3,3943,717

2,951

1,329

709

0

1,000

2,000

3,000

4,000

#ofDeals

Domestic M&A Outbound M&A Inbound M&A

Total 3,040 3,828 3,334 2,994 2,467 2,763 3,346 3,394 3,717 2,951 1,329 709

Inbound M&A 646 892 699 579 433 488 576 626 718 629 293 115

Outbound M&A 743 845 725 545 487 581 764 757 870 679 268 136

Domestic M&A 1,651 2,091 1,910 1,870 1,547 1,694 2,006 2,011 2,129 1,643 768 458

1999 2000 2001 2002 2003 2004 2005 2006 2007 20084/08

YTD

4/09

YTD

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis.Note: Domestic M&A represents U.K. target/U.K. acquiror; Outbound M&A represents non-U.K. target/U.K. acquiror; Inbound M&A represents U.K. target/non-U.K. acquiror.

U.K. Deal Value (Domestic/Outbound/ Inbound)

$643 $613

$197 $201$159

$231

$363$408

$666

$277

$93$55

$0

$250

$500

$750

DealValue


Total $643 $613 $197 $201 $159 $231 $363 $408 $666 $277 $93 $55

Inbound M&A $143 $173 $76 $50 $34 $78 $135 $176 $171 $80 $26 $2

Outbound M&A $354 $154 $35 $53 $28 $45 $84 $71 $280 $61 $34 $12

Domestic M&A $146 $287 $86 $99 $97 $108 $144 $161 $215 $136 $33 $42

1999 2000 2001 2002 2003 2004 2005 2006 2007 20084/08

YTD

4/09

YTD

($ in billions)

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis.Note: Domestic M&A represents U.K. target/U.K. acquiror; Outbound M&A represents non-U.K. target/U.K. acquiror; Inbound M&A represents U.K. target/non-U.K. acquiror.


17/35

Germany Cross-Border M&A Activity


Germany Number of Deals (Domestic/ Outbound/ Inbound)

1,202

1,633

1,2781,111

9931,140 1,126

1,335

1,979

1,587

543404

0

500

1000

1500

2000

#ofDeals


Total 1,202 1,633 1,278 1,111 993 1,140 1,126 1,335 1,979 1,587 543 404

Inbound M&A 335 418 397 394 329 388 402 442 675 458 161 88

Outbound M&A 386 537 375 269 224 268 313 354 478 443 165 106

Domestic M&A 481 678 506 448 440 484 411 539 826 686 217 210

1999 2000 2001 2002 2003 2004 2005 2006 2007 20084/08

YTD

4/09

YTD

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis.Note: Domestic M&A represents Germany target/Germany acquiror; Outbound M&A represents non-Germany target/Germany acquiror; Inbound M&A represents Germanytarget/non-Germany acquiror.

Germany Deal Value (Domestic/ Outbound/ Inbound)

$206

$108$73 $59

$84

$132

$180

$256

$159

$18 $23

$377

$0

$100

$200

$300

$400

DealValue


Total $377 $206 $108 $73 $59 $84 $132 $180 $256 $159 $18 $23

Inbound M&A $242 $58 $28 $34 $19 $24 $51 $58 $66 $23 $5 $2

Outbound M&A $98 $98 $45 $22 $13 $22 $35 $58 $119 $35 $6 $18

Domestic M&A $36 $51 $36 $17 $27 $38 $46 $64 $70 $100 $7 $3

1999 2000 2001 2002 2003 2004 2005 2006 2007 20084/08

YTD

4/09

YTD

($ in billions)

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis.Note: Domestic M&A represents Germany target/Germany acquiror; Outbound M&A represents non-Germany target/Germany acquiror; Inbound M&A represents Germanytarget/non-Germany acquiror.


18/35

Asia M&A Commentary


Asia has not escaped the global slowdown in M&Aactivity. The number of transactions in Asia (ex. Japan)declined 31.1% in April. The deal count fell 28.1% inChina, which accounts for nearly half of deal activity inAsia (ex. Japan). Dollar volume for the month wasdown 13.6%.

Year to date, there was a total of 1,289 announcedAsia (ex. Japan) M&A transactions, a 32.4% drop fromthe prior-year period. The middle-market accounted forabout 65% of this deal activity. Dollar volume totaled$39.8 billion, a 54.1% decrease compared to the year-ago figure.

Deal activity has stalled as the economies of Asiacontend with severe deterioration in global trade. TheInternational Monetary Fund (IMF) recently predictedthat economic growth across Asia would decelerate to1.3% in 2009 from 5.1% in 2008. The IMF highlightedthe collapse in exports to advanced economies as thecritical constraint to growth. For example, exports from

China to the U.S. declined 16% in April. The IMFprojects economic improvement in late 2009 (withAsias domestic demand supported by fiscal policyefforts) and in 2010 (growth of 4.1% projected),expecting a revival that runs in parallel with trends inthe U.S.

China deal activity declined 29.3% through April.Dollar volume of $21.3 billion was down 48.3%compared to the year-ago period. Domestic M&Adeals represented 77.3% of the total deal count.

The China middle-market experienced declines

similar to the overall market, with the number ofdeals down 26.1% and dollar volume off 42.6%Middle-market deals represented nearly 79% of totadeal activity.

Year to date, there was a total of 199 announcedIndia M&A transactions, a 46.9% drop from theyear-ago period. India M&A dollar volume decreased89.1% and totaled a mere $1.4 billion through April.

Similarly, Indias middle-market activity continued todeteriorate: the number of deals was down nearly70%, while dollar volume experienced an 80.8%decrease for the year-to-date period.

In contrast, for the year-to-date period, Japan M&A

performed relatively better than the other regions ofthe world in the first four months of 2009, with a16.4% decrease in the number of deals and a 27.9%drop in dollar volume. Domestic, middle-market M&Aaccounted for 51.6% of the year-to-date deaactivity.

Asia (ex. Japan) M&A Activity

1,1151,629 1,486

1,833 1,701

3,017

3,973

5,222 5,494

1,9061,289

2,158

0

2,000

4,000

6,000

#ofDea

ls

$0

$100

$200

$300

$400

D

ealValue


Total 1,115 1,629 1,486 1,833 1,701 2,158 3,017 3,973 5,222 5,494 1,906 1,289

# of Deals >$1B 13 23 15 13 13 21 19 42 42 40 18 6

# of Deals Middle-Market 689 1,000 900 1,165 1,180 1,544 2,145 2,822 3,756 3,715 1,281 832

# of Deals Undisclosed 413 606 571 655 508 593 853 1,109 1,424 1,739 607 451

Deal Value $78 $161 $90 $74 $76 $111 $129 $223 $307 $270 $87 $40

1999 2000 2001 2002 2003 2004 2005 2006 2007 20084/08

YTD

4/09

YTD

($ in billions)



19/35

China M&A Activity


China M&A Activity

325505 478

746 651

1,2741,698

2,3382,511

841595

890

0

500

1,000

1,500

2,000

2,500

3,000

#ofDeals

$0

$40

$80

$120

$160

$200

DealValue


Total 325 505 478 746 651 890 1,274 1,698 2,338 2,511 841 595

# of Deals >$1B 4 8 6 8 7 12 9 17 13 20 7 3

# of Deals Middle-Market 202 343 311 500 459 665 967 1,346 1,899 1,956 632 467

# of Deals Undisclosed 119 154 161 238 185 213 298 335 426 535 202 125Deal Value $31 $101 $33 $40 $39 $59 $56 $89 $115 $160 $41 $21

1999 2000 2001 2002 2003 2004 2005 2006 2007 20084/08

YTD

4/09

YTD

($ in billions)


China Number of Deals (Domestic/ Outbound/ Inbound)

325505 478

746 651890

1,274

1,698

2,3382,511

841595

0

1,000

2,000

3,000

#ofDeals


Total 325 505 478 746 651 890 1,274 1,698 2,338 2,511 841 595

Inbound M&A 98 134 119 157 151 271 356 412 448 474 163 82

Outbound M&A 65 99 68 67 62 81 95 125 177 184 76 53

Domestic M&A 162 272 291 522 438 538 823 1,161 1,713 1,853 602 460

1999 2000 2001 2002 2003 2004 2005 2006 2007 20084/08

YTD

4/09

YTD

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis.Note: Domestic M&A represents China target/China acquiror; Outbound M&A represents non-China target/China acquiror; Inbound M&A represents China target/non-Chinaacquiror.


20/35

China M&A Deal Statistics


China Number of Deals

Domestic Outbound Inbound Total

2008 2009 2008 2009 2008 2009 2008 2009

April

Middle-Market 134 118 13 10 26 10 173 138

>$1B 2 0 0 1 0 0 2 1

Undisclosed 33 14 5 2 18 11 56 27

Total 169 132 18 13 44 21 231 166

YTD

Middle-Market 484 386 56 37 92 44 632 467

>$1B 4 2 2 1 1 0 7 3

Undisclosed 114 72 18 15 70 38 202 125

Total 602 460 76 53 163 82 841 595

LTM

Middle-Market 1,647 1,461 144 109 290 221 2,081 1,791

>$1B 10 10 3 4 1 2 14 16

Undisclosed 275 240 54 48 183 169 512 457

Total 1,932 1,711 201 161 474 392 2,607 2,264_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis. YTD and LTM as of April 30.Note: Domestic M&A represents China target/China acquiror; Outbound M&A represents non-China target/China acquiror; Inbound M&A represents China target/non-Chinaacquiror.

China Deal Value

($ in millions) Domestic Outbound Inbound Total

2008 2009 2008 2009 2008 2009 2008 2009

April

Middle-Market $5,881 $5,056 $1,647 $802 $627 $573 $8,155 $6,431

>$1B $2,217 $0 $0 $1,206 $0 $0 $2,217 $1,206

Total $8,098 $5,056 $1,647 $2,008 $627 $573 $10,372 $7,637

YTD

Middle-Market $22,163 $13,970 $5,183 $1,798 $2,776 $1,524 $30,122 $17,292

>$1B $5,220 $2,833 $4,346 $1,206 $1,601 $0 $11,167 $4,039

Total $27,383 $16,803 $9,529 $3,004 $4,376 $1,524 $41,288 $21,331

LTM

Middle-Market $73,297 $53,207 $14,604 $7,440 $10,855 $8,979 $98,757 $69,626

>$1B $16,200 $58,065 $5,378 $8,765 $1,601 $3,300 $23,179 $70,129

Total $89,497 $111,272 $19,983 $16,205 $12,456 $12,279 $121,935 $139,756_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis. YTD and LTM as of April 30.Note: Domestic M&A represents China target/China acquiror; Outbound M&A represents non-China target/China acquiror; Inbound M&A represents China target/non-Chinaacquiror.


21/35

India M&A Activity


India M&A Activity

158267

194 209 218

415

636

884 938

375

199216

0

200

400

600

800

1,000

#ofDeals

$0

$10

$20

$30

$40$50

$60

DealValue


Total 158 267 194 209 218 216 415 636 884 938 375 199

# of Deals >$1B 2 0 1 0 0 0 1 6 6 9 3 0

# of Deals Middle-Market 94 147 116 130 139 117 220 303 421 429 181 55

# of Deals Undisclosed 62 120 77 79 79 99 194 327 457 500 191 144

Deal Value $5 $7 $4 $3 $3 $4 $14 $36 $56 $37 $13 $1

1999 2000 2001 2002 2003 2004 2005 2006 2007 20084/08

YTD

4/09

YTD

($ in billions)


India Number of Deals (Domestic, Outbound, Inbound)

158267

194 209 218 216

415

636

884938

375

199

0

200

400

600

800

1,000

#ofDeals


Total 158 267 194 209 218 216 415 636 884 938 375 199

Inbound M&A 65 90 69 61 74 58 95 139 170 175 69 24

Outbound M&A 9 41 23 21 39 36 117 161 203 217 84 28

Domestic M&A 84 136 102 127 105 122 203 336 511 546 222 147

1999 2000 2001 2002 2003 2004 2005 2006 2007 20084/08

YTD

4/09

YTD

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis.Note: Domestic M&A represents India target/India acquiror; Outbound M&A represents non-India target/India acquiror; Inbound M&A represents India target/non-India acquiror.


22/35

India M&A Deal Statistics


India Number of Deals

Domestic Outbound Inbound Total

2008 2009 2008 2009 2008 2009 2008 2009

April

Middle-Market 22 10 14 1 8 2 44 13

>$1B 0 0 0 0 0 0 0 0

Undisclosed 28 29 14 3 9 4 51 36

Total 50 39 28 4 17 6 95 49

YTD

Middle-Market 96 34 42 10 43 11 181 55

>$1B 1 0 2 0 0 0 3 0

Undisclosed 125 113 40 18 26 13 191 144

Total 222 147 84 28 69 24 375 199

LTM

Middle-Market 274 169 121 65 101 69 496 303

>$1B 2 1 3 3 0 2 5 6

Undisclosed 320 301 113 93 79 59 512 453

Total 596 471 237 161 180 130 1,013 762_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis. YTD and LTM as of April 30.Note: Domestic M&A represents India target/India acquiror; Outbound M&A represents non-India target/India acquiror; Inbound M&A represents India target/non-India acquiror.

India Deal Value

($ in millions) Domestic Outbound Inbound Total

2008 2009 2008 2009 2008 2009 2008 2009

April

Middle-Market $430 $754 $925 $2 $422 $7 $1,776 $762

>$1B $0 $0 $0 $0 $0 $0 $0 $0

Total $430 $754 $925 $2 $422 $7 $1,776 $762

YTD

Middle-Market $2,681 $986 $2,261 $216 $2,369 $201 $7,312 $1,404

>$1B $2,231 $0 $3,305 $0 $0 $0 $5,536 $0

Total $4,912 $986 $5,566 $216 $2,369 $201 $12,848 $1,404

LTM

Middle-Market $8,480 $5,523 $8,650 $3,553 $5,452 $2,356 $22,582 $11,432

>$1B $10,956 $1,040 $4,483 $6,324 $0 $6,630 $15,439 $13,994

Total $19,436 $6,563 $13,133 $9,877 $5,452 $8,986 $38,021 $25,426

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis. YTD and LTM as of April 30.Note: Domestic M&A represents India target/India acquiror; Outbound M&A represents non-India target/India acquiror; Inbound M&A represents India target/non-India acquiror.


23/35

Japan M&A Activity


Japan M&A Activity

524718

8881,068 1,094

1,9442,230 2,110

1,940

719 601

1,505

0

500

1,000

1,500

2,000

2,500

#ofDeals

$0

$40

$80

$120

$160

$200

DealValue


Total 524 718 888 1,068 1,094 1,505 1,944 2,230 2,110 1,940 719 601

# of Deals >$1B 12 14 9 6 11 20 24 33 28 21 8 6

# of Deals Middle-Market 211 336 418 517 566 829 1,138 1,323 1,247 1,084 388 348

# of Deals Undisclosed 301 368 461 545 517 656 782 874 835 835 323 247Deal Value $84 $83 $52 $30 $72 $92 $182 $184 $122 $120 $41 $29

1999 2000 2001 2002 2003 2004 2005 2006 2007 20084/08

YTD

4/09

YTD

($ in billions)


Japan Number of Deals (Domestic/ Outbound/ Inbound)

524718

8881,068 1,094

1,505

1,9442,230 2,110

1,940

719 601

0

500

1,000

1,500

2,000

2,500

#ofDeals


Total 524 718 888 1,068 1,094 1,505 1,944 2,230 2,110 1,940 719 601

Inbound M&A 47 82 76 68 68 83 52 75 119 79 31 25

Outbound M&A 86 93 88 100 78 102 164 210 178 216 67 59

Domestic M&A 391 543 724 900 948 1,320 1,728 1,945 1,813 1,645 621 517

1999 2000 2001 2002 2003 2004 2005 2006 2007 20084/08

YTD

4/09

YTD

_____________________Source: Dealogic and Robert W. Baird & Co. Incorporated M&A Market Analysis.Note: Domestic M&A represents Japan target/Japan acquiror; Outbound M&A represents non-Japan target/Japan acquiror; Inbound M&A represents Japan target/non-Japanacquiror.


24/35

Economic Commentary


ECONOMY:

U.S. stocks have enjoyed a strong run over the pasttwo months, with gains fueled by the excessivepessimism that is almost by definition present at abottom and the increasingly firm conviction that thepoint of maximum downside momentum in theeconomy was passing. As the rally began investorswere liquidating their equity exposure and moving cashto the sidelines, while expectations for the economywere so depressed that moderation in the rate ofdecline (the much talked about second derivative orthe change in the change) was viewed as a positive.While stocks were not quite priced for Armageddon,they seemed to be anticipating a near-facsimile of suchan outcome. Even as the rally was in its early stages,investors, most of whom were still on the sidelines,remained skeptical, and the lack of participation in the

rally meant there was little follow-through when sellingemerged. Now, however, the real work is beginning.Investors have grown more optimistic, although notexcessively so, and cash has been moved off of thesidelines.

Perhaps more importantly, expectations for theeconomy have shifted dramatically. No longer is thepervasive question Will the recession ever end?, butit is now Has the recession already ended? Someprognosticators are now on record as believing that theNBER will ultimately decide that April represented thetrough in the economy. We think not, but with stocksincreasingly eyeing an economic recovery, data that ismerely less bad will not likely provide much

satisfaction. Output and consumption data that isworse than expected may spark a disappointingreaction in the market. While not in the camp that seesthe recession as already having ended, the massiveamounts of fiscal and monetary stimulus that are nowworking through the system could alone be sufficientto produce a return to growth sometime this summer.The key question in our view is still not if or when therecession will end but what, over the course of thenext year or two, the ensuing recovery will look like.

The incoming economic data continues to paint apicture of recession, although its grip appears to beweakening. The economy shed another 539,000 jobs in

April, the sixth consecutive month in which more thanhalf-a-million jobs were lost, but also 200,000 fewerthan the nearly three-quarters of a million jobs thatwere lost in January. The unemployment rate rosefrom 8.5% in March to 8.9% in April, although this risewas entirely fueled by formerly discouraged workersre-entering the labor force and looking for jobs. Thehousehold survey (from which the unemployment rateis derived) measure of employment showed anincrease in April, its first in a year. This behavior,disgruntled workers re-entering the labor force,

typically occurs towards the end of recessions and theearly stages of a recovery, and is the primary reasonthat the unemployment rate continues to rise evenafter a recession ends. The weekly initial jobless claimsdata offers a more timely snapshot of the economy andis generally viewed as a leading indicator. The trend ininitial claims appears to have peaked in April, althoughthe steep decline in claims that typically signalsimproving conditions has yet to emerge.

Data from the housing market continues to hint amarginal improvement. The yearly change in theCase/Shiller home price index increased in February fothe first time since October 2005, suggesting thadownside momentum in home prices, just as in theoverall economy, is easing. The Feds efforts to drivedown mortgage rates appear to be having the desired

effect, as anecdotal reports suggest that the areas othe country that have been hardest hit in the housingdownturn are seeing a surge in demand.

STOCK MARKET: The rally that emerged in Marchwhich has subsequently been identified as a cyclicabull market, was preceded by, and has subsequentlybeen accompanied by a number of strong breadthreadings. First, while the S&P 500 and Dow Industrialswere plumbing new lows in March, a number odivergences were emerging. Our international indextrend indicator remained well above its late-2008 lowand the NYSE advance/decline line was stronger thanthe indexes during the late-2008 rally, and failed to

match the degree of decline seen in early-2009. Greatconviction that a turning point had occurred came onthe accumulation of up-side breadth thrustsHistorically, single-day breadth thrusts (of more than10 times as much upside volume as downside volumeor vice versa) have signaled important turning pointsfor the stock market. The rise in volatility in recenyears (which is unlikely to fully dissipate anytime soonhas made these breadth thrusts much more commonGiven this new reality, we monitor the accumulation osuch days. In late 2008, upside thrusts were typicallyfollowed in short order by even more substantiadownside thrusts, evidence that selling pressure hadyet to be exhausted. Since the March lows, upside

thrusts have accumulated, and the few downsidethrusts that have emerged have been followed soon byupside thrusts. As the bull market has continuedadditional bullish breadth readings have emerged. The40-day advance/decline ratio on the NYSE had surgedthrough well-tested resistance and surpassed the peakseen as the 2003 rally was gaining strength. Furtherthe percentage of industry groups and sub-industries inup-trends has continued to expand, indicating that therally is carrying most areas of the market higherStrength in the broad market, both in the U.S. and


25/35

Economic Commentary


globally, suggests that the indexes have further to run.

Within the stock market, emphasis should be placed oncyclical sectors and those areas of the global stockmarket that could benefit from the return of thecommodity bull market. Our relative strength rankings

show sector leadership from Consumer Discretionary,Information Technology, and Financials (excludingREITs). Defensive areas of the market, like ConsumerStaples, Utilities, and Health Care are faring poorly inthe rankings. Global investors should continue to tiltequity exposure away from the United States (which isnear the bottom of our global rankings) and towardsEmerging Markets. Regional preferences are fading,although the Americas and Asia are still favored overEurope. Size and style leadership, as is customary inadvance of a turn higher in the economy, remains withsmall-cap and mid-cap growth. Fixed income investorsshould continue to tilt away from Treasuries andtowards higher grade Corporates and Municipals.

Finally, the ECB has joined the Bank of England andthe Federal Reserve in powering up its printing press,providing ample opportunity for paper currencies ingeneral to be further devalued. This suggests thatstrategic investors should continue to look to addcommodity exposure to their portfolios, either asequity investments in the Materials sector or directinvestment in commodities themselves. The traditionalway to hedge against currencies is through gold, atactic that we favor here.

Originally published in Bairds Investment StrategyOutlook: May 2009.

Bruce A. BittlesDirector of Investment Strategy615.341.7114

William A . Delwiche, CFAAssociate Investment Strategy414.298.7802


26/35

Restructuring News


The Baird CDS Index

The graph below shows the Baird CDS Index for thethree-year period ending April 30, 2009. Thisproprietary index of 36 credit default swap contractsreferences non-investment grade debt of non-financial

companies using pricing information from Bloomberg.Green shoots seems to be the increasingly pervasivecharacterization of what has appeared in the equity andcredit markets over the past several weeks. Thepowerful rally in equities, the tightening risk premiumsin corporate debt issues and the overall positive tone ofthe bank stress tests has led many commentators,including the Fed Chairman, to observe cautiously thatthe worst of the meltdown in the financial markets mayhave passed.

Consistent with this theme and representing anothergreen shoot, the Baird CDS Index declined in April forthe second consecutive month, which indicates that the

cost to insure against a credit default for non-investment grade companies outside of the financialsector has now fallen for two months in a row. Thismarks the first time that this has happened in almost ayear. The Index decreased by 16.5% in April, falling to1320.4 on April 30, a drop of 260.1 points from 1580.5on March 31. This brings the Index down by 22.5%from its all time record high of 1703.8 set on February28.

While the movement of the Baird CDS Index in Marand April represents more welcome news on the staof the financial markets, and more specifically on tprice of risk for non-investment grade companies, t

absolute level of the Index on April 30 remained at third-highest level since we began tracking this damore than three years ago. Thus, the healing procein the credit markets has a very long way to go befodebt capital will be accessible by non-investment graborrowers on terms approaching those that wewidely available before 2008.

More germane to corporate restructurings, StandardPoors now expects the non-investment grade defarate to reach 14.3% by March 2010, of which wourepresent an all-time high, and a trough-to-peincrease unprecedented since S&P began trackdefault rate cycles 1981. With Chrysler filing bankruptcy and with GM probably right behind it, t

expected impact of the shutdown of North Americassembly operations will likely cause another round automotive supplier bankruptcies and employee layo dislocations in the real economy that the financmarkets have apparently already discounted.

Baird Non-Investment Grade CDS* Index

0.0

600.0

1,200.0

1,800.0

1/06 4/06 7/06 10/06 2/07 5/07 8/07 11/07 3/08 6/08 9/08 12/08 4/09

Month/Year

Index

_____________________Source: Bloomberg L.P.

*A credit default swap ("CDS") is a derivative whereby one party to a swap agreement transfers credit risk to the counterparty for a periodic fee. Under the swap agreement, theCDS buyer pays a fixed periodic fee in return for a contingent payment by the CDS seller in the event of a credit default, and thus is similar to an insurance policy on the referencdebt. In its simplest form, if there is a default on the reference debt, the CDS buyer puts the debt to the CDS seller in exchange for a payment by the CDS seller of the outstandiprincipal and unpaid interest. In theory, the market's assessment of the likelihood of default for the reference debt should have a close positive correlation with the price of a CDfor that debt. Thus, the Baird CDS Index should increase as the perceived risk of credit default for the reference debt increases, and should decrease as the perceived risk of creddefault for the reference debt decreases. Accordingly, the Baird CDS Index should be a leading indicator of the prospects for restructuring opportunities with respect to the referedebt and, by implication, the overall climate for restructuring opportunities with respect to the debt of financially weaker credits in the wider market. The Baird CDS Index isunmanaged and is not eligible for investment.

William G. WelnhoferManaging Director, Head of Financial Restructuring GroupRobert W. Baird & Co., [email protected]

Justin ShapiroFinancial AnalystRobert W. Baird & Co., Inc.

[email protected]


27/35

Transaction Spotlight Sale of Orion Corporation to John Crane(Smiths Group plc)


Acquiring Company

Headquar t e rs

Orion Corporation

Grafton, WI

Target Company

Headquar t e rs

John Crane (Smiths Group plc)

Morton Grove, IL (London, United Kingdom)

Industry Sector Industrial Hydrodynamic Bearings

Transaction Overview Orion Corporation (Orion or the Company) recently completed its sale to John CraneInc., a division of Smiths Group plc. The transaction closed in May 2009, and termswere not disclosed.

Target CompanyDescription

Founded in 1968, privately-owned and headquartered in Grafton, Wisconsin, Orion is aleading designer and manufacturer of highly-engineered hydrodynamic bearings fohigh speed rotating machinery, such as turbines, compressors, generators and geardrives. Orion manufactures an extensive product line of standard and customhydrodynamic bearings for power generation, oil & gas, petrochemical, marine andother industrial markets.

Acquiring Company

Description

John Crane, Inc. manufactures mechanical seals and associated products for use in

rotating equipment applications. It offers various mechanical seals and sealing supportsystems, bearing isolators, mechanical packing products, power transmission couplingsand centralized lubrication systems. The company also provides training and repairservices. John Crane, Inc. serves customers in petroleum, chemical, pharmaceuticalpulp and paper, power generation, food and beverage, mining and minerals,transportation, industrial, water and waste, refrigeration, automotive, and appliancemarkets worldwide. Orion complements and extends John Crane Bearing Technology,formed after the acquisition of a German-based bearings firm in October 2007. Thecompany is headquartered in Morton Grove, Illinois and has locations in Africa, Asia,Canada, Europe, Latin America, the Middle East, and United States.

Parent CompanyDescription

Smiths Group plc is a global technology company listed on the London Stock Exchange.A world leader in the practical application of advanced technologies, Smiths Groupdelivers products and services for the threat & contraband detection, energy, medicadevices, communications and engineered components markets worldwide. Orion wil

become part of Smiths Groups John Crane business. Smiths Group plc isheadquartered in London, UK, and employs more than 20,000 people in over 50countries.

Advisory Role Robert W. Baird & Co. served as the financial advisor to Orion Corporation on thistransaction. For more information, please contact: Steve Booth, Managing Director, at414.298.7661 or [email protected]; Tom Lacy, Managing Director, at 414.298.7648or [email protected]; or Adam Czaia, Vice President, at 414.298.7358 [email protected].


28/35

Recent Baird M&A Transactions


DateAnnounced Baird Client Client Description Transaction Description

Deal Value($ in

millions) Industry

4/20/09 Chesapeake UtilitiesCorporation

Diversified utility company Acquisition of Florida PublicUtilities Company

*** Utilities

3/26/09 Orion Corporation Manufacturer of hydrodynamicbearings

Sale to John Crane (SmithsGroup plc)

** Industrial

2/12/09 North American Scientific Manufacturer of radioisotopic productsfor the treatment of cancer

Sale to Best Theratronics, Ltd. $5.0 Healthcare

1/29/09 Meade Europe (Meade

Instruments)

Manufacturer of optical products Sale to a management-led buy

out group (Bresser GmbH)

$12.4 Consumer

1/28/09 Appliances ComponentsCompanies Spain S.A.

Manufacturer of commercialrefrigeration compressors

Sale to Compressor AcquisitionCompany Limited

** Industrial

12/31/08 GSE Scale Systems (SPX

Corporation)

Manufacturer of test and measurement

products

Sale to Illinois Tool Works, Inc. ** Industrial

12/31/08 Palombos Med-RitePharmacy (Ricetta Rx)

Pharmaceutical services Sale to Omnicare, Inc. ** Healthcare

12/31/08 Revenue Cycle Solutions,Inc.

Revenue cycle management Acquisition of Cash RetrieverSystems, Inc.

** Healthcare

11/26/08 McKechnie VehicleComponents USA, Inc.

Manufacturer of automotive products Sale MVC Holdings LLC ** Industrial

11/21/08 Coachmen Industries, Inc. Manufacturer of recreational vehicles Sale to Forest River, Inc. ** Consumer

11/11/08 Independent Bank Corp. Bank holding company Acquisition of Benjamin FranklinBancorp.

$84.5 Financial Services

10/21/08 Integrated Device

Technology, Inc.

Digital media Acquisition of assets of Silicon

Optix

** Technology

10/13/08 TRUMPF InternationalBeteiligungs-GmbH

Industrial lasers and laser systems Acquisition of SPI Lasers plc ** Industrial

10/7/08 FCX Performance, Inc. Distributor of flow control products Sale to Sterling InvestmentPartners

** IndustrialDistribution

10/1/08 Methode Electronics, Inc. Manufactures electro-mechanicaldevices

Acquisition of assets of HetronicHolding, LLC

$53.6 Industrial

9/30/08 Norwesco, Inc. Liquid containment solutions Sale to Olympus Partners ** Industrial

9/10/08 Richter Chemie-TechnikGmbH

Industrial pumps and valves Sale to IDEX Corporation 71.0 Industrial

9/8/08 Gehl Company Construction and agriculturalequipment

Sale to Manitou BF, S.A. $449.9 Industrial

9/2/08 Avery Weigh-TronixHoldings Limited

Industrial weighing products Sale to Illinois Tool Works Inc. ** Industrial

8/4/08 Unipac Business Unit(Illinois Tool Works)

Laminated liners for plastic containers Sale to Selig Sealing Products,Inc.

** Industrial

8/4/08 Amafilter Group HoldingB.V.

Manufactures filtration products Sale to MAHLE Group ** Filtration

7/8/08 TopWorx, Inc. Designer of valve control equipment Sale to Emerson Electric ** Industrial

7/2/08 GTI Diagnostics (Blood

Center of WisconsinResearch Foundation)

Manufactures medical diagnostics

assays

Sale to The Riverside Company ** Healthcare

6/16/08 Primrose Holdings, Inc. Early childhood education Sale to Roark Capital Group ** Education Services

6/13/08 Simmons OutdoorCorporation (MeadeInstruments)

Manufacturer of optical products Sale to Bushnell, Inc. ** Consumer Products

6/5/08 Chamberlin Edmonds &Associates

Revenue cycle management Sale to Charterhouse Group,Inc. (Financial SponsorConsortium)

** Healthcare

5/27/08 STRATTEC SecurityCorporation (in combowith JV WITTE and VAST)

Vehicular access control products Acquisition of Assets of DelphiCorporations Power Products

$7.8 Automotive

5/27/08 Driessen Aerospace GroupN.Y.

Manufacturer of galleys and air cargoequipment

Sale to Zodiac S.A. ** Industrial

_____________________Source: Robert W. Baird & Co. Incorporated M&A Market Analysis.**Closed transactions with undisclosed value; *** Announced and pending transactions with undisclosed value.


29/35

Baird U.S. Equity Research Coverage


BAIRD U.S.EQUITY RESEARCH COVERAGE MONTHLY REPORTS

In April 2009, Baird added 2 companies to coverage,bringing the total coverage to 520 companies. Coveredcompanies have a median and average marketcapitalization of $1.2 billion and $4.8 billion,respectively. In the past three years, Baird hasincreased the number of companies under coverage bymore than 28%.

In April 2009, there were 113 upward and 160downward adjustments to current-year earningsestimates (generally calendar-year 2009). There were94 upward and 143 downward revisions to forward-year (generally calendar-year 2010) earningsestimates.

Sector: Automotivehttp://www.rwbaird.com/docs/yourreports/cruisin.pdf

Sector: Consumer ProductsContact Thomas Gaul at [email protected]

Sector: Diversified Industrial and Machineryhttps://baird.bluematrix.com/docs/pdf/77704.pdf

Sector: Education Serviceshttp://www.rwbaird.com/docs/CN5-09.pdf

Sector: Human Capital Serviceswww.rwbaird.com/docs/yourreports/HCSMAP.pdf

Sector: Radio Frequency Identification (RFID)http://www.rwbaird.com/docs/RFID_Monthly_-_May_2009.pdf

Sector: Retail, Restaurants, Apparel & FootwearContact Thomas Gaul at [email protected]

Sector: Utilitieshttps://baird.bluematrix.com/docs/pdf/78855.pdf


30/35



Business Services

Business Process Outsourcing

Convergys Corporation CVG

DST Systems, Inc. DST

ExlService Holdings, Inc. EXLS

Fidelity National Information Services FIS

Fiserv, Inc. FISV

Genpact Limited GGlobal Payments, Inc. GPN

Heartland Payment Systems, Inc. HPY

ICT Group ICTG

Jack Henry & Associates JKHY

MasterCard Incorporated MA

Metavante Technologies, Inc. MV

Net 1 UEPS Technologies Inc. UEPS

Sykes Enterprises, Inc. SYKE

Visa Inc. V

WNS (Holdings) Limited WNS

Education Services

Apollo Group, Inc. APOL

Blackboard, Inc. BBBB

Capella Education Company CPLA

Career Education Corporation CECO

Corinthian Colleges, Inc. COCO

New Oriental Education & Technology Grp EDU

DeVry, Inc. DV

ITT Educational Services, Inc. ESI

K12 Inc. LRN

Lincoln Education Services Corp. LINC

School Specialty, Inc. SCHS

Strayer Education, Inc. STRA

Marketing & I nformation Services

Acxiom Corporation ACXM

Alliance Data Systems Corporation ADS

The Corporate Executive Board Co. EXBD

Equifax Inc. EFX

FTI Consulting, Inc. FCN

Harte-Hanks, Inc. HHS

Huron Consulting Group, Inc. HURN

Journal Communications, Inc. JRN

Navigant Consulting, Inc. NCI

Valassis Communications, Inc. VCI

Facility Services

AECOM Technology Corporation ACM

Cintas Corporation CTAS

Ecolab, Inc. ECL

G&K Services, Inc. GKSRA

Iron Mountain Incorporated IRM

Pike Electric Corporation PEC

Quanta Services Inc. PWR

UniFirst Corporation UNF

URS Corporation URS

Human Capital Services

Administaff, Inc. ASF

Automatic Data Processing ADP

COMSYS IT Partners CITP

First Advantage Corporation FADV

Heidrick & Struggles International HSII

Hewitt Associates, Inc. HEW

Hudson Highland Group, Inc. HHGP

Kforce Inc. KFRC

Korn/Ferry International KFY

Manpower Inc. MAN

Monster Worldwide, Inc. MWW

MPS Group, Inc MPS

Paychex Inc. PAYX

Resources Connection, Inc. RECN

Robert Half International RHI

Human Capital Services (co n t d )

Spherion Corporation SFN

Taleo Corporation TLEO

TrueBlue, Inc. TBI

The Ultimate Software Group Inc. ULTI

Watson Wyatt & Company WW

Industrial Services

American Reprographics Co. ARPClean Harbors, Inc. CLHB

Mobile Mini, Inc. MINI

RSC Holdings Inc. RRR

Stericycle, Inc. SRCL

Communications

Communications Services - Carriers

AT&T, Inc. T

Leap Wireless International, Inc. LEAP

MetroPCS Communications, Inc. PCS

Sprint Nextel Corporation S

Telephone and Data Systems, Inc. TDS

United States Cellular Corp. USM

Verizon Communications, Inc. VZ

Network Technology

ADC Telecommunications, Inc. ADCTD

ADTRAN, Inc. ADTNAlcatel-Lucent ALU

Cisco Systems, Inc. CSCO

CommScope, Inc. CTV

F5 Networks, Inc. FFIV

Juniper Networks, Inc. JNPR

Nortel Networks Corporation NT

PCTEL, Inc. PCTI

Powerwave Technologies, Inc. PWAV

Riverbed Technology, Inc. RVBD

SonicWALL, Inc. SNWL

Sonus Networks Inc. SONS

Tekelec TKLC

Tellabs TLAB

Communications Services Software & Services

Amdocs Limited DOX

Comverse Technology, Inc. CMVT

NeuStar, Inc. NSR

Neutral Tandem Inc. TNDM

Research in Motion Limited RIMM

Synchronoss Technologies, Inc. SNCR

Syniverse Holdings, Inc. SVR

Consumer

Automotive Services

ATC Technology Corporation ATAC

CarMax, Inc. KMX

Copart, Inc. CPRT

LKQ Corporation LKQX

Ritchie Bros. Auctioneers, Inc. RBA

Consumer Leisure

Arctic Cat, Inc. ACAT

Briggs & Stratton Corp. BGG

Harley-Davidson, Inc. HOG

Polaris Industries, Inc. PII

Thor Industries THO

Winnebago Industries, Inc. WGO

Consumer Products

RC2 Corporation RCRC

Footwear, Apparel & Accessories

Columbia Sportswear COLM

Crocs, Inc. CROX

Deckers Outdoors DECK

Genesco, Inc. GCO

Nike Inc. NKE

Rocky Brands, Inc. RCKY

Quiksilver Inc. 2QKTimberland Co. TBL

Under Armour Inc. UA

VF Corporation VFC

Volcom Inc. VLCM

Wolverine World Wide WWW

Restaurants

BJs Restaurant, Inc. BJRI

Burger King Holdings, Inc. BKC

Buffalo Wild Wings, Inc. BWLD

California Pizza Kitchen, Inc. CPKI

Caribou Coffee Company, Inc. CBOU

The Cheesecake Factory Inc. CAKE

Chipotle Mexican Grill, Inc. CMG

Darden Restaurants, Inc. DRI

McDonalds Corporation MCD

P.F. Changs China Bistro, Inc. PFCB

Panera Bread Company PNRAPeets Coffee & Tea, Inc. PEET

Starbucks Corporation SBUX

Texas Roadhouse, Inc. TXRH

YUM! Brands, Inc. YUM

Retail

Abercrombie & Fitch ANF

Advance Auto Parts, Inc. AAP

AutoZone, Inc. AZO

Dicks Sporting Goods, Inc. DKS

Hibbett Sports, Inc. HIBB

Kohls Corporation KSS

OReilly Automotive, Inc. ORLY

Pacific Sunwear of California Inc. PSUN

PetSmart, Inc. PETM

Regis Corporation RGS

Sally Beauty Holdings, Inc. SBH

Tractor Supply Company TSCO

Ulta Salon, Cosmetics & Fragrance, Inc. ULTA

Zumiez, Inc. ZUMZ

Select Growth

HNI Corporation HNI

Schawk, Inc. SGK

Energy

Utilities

Alliant Energy Corporation LNT

Aqua America, Inc. WTR

California Water Service Group CWT

Chesapeake Utilities Corp. CPK

DPL Inc. DPL

FPL Group, Inc. FPL

Hawaiian Electric Industries HE

Integrys Energy Group TEG

MDU Resources Group Inc. MDU

Nicor Inc. GAS

Otter Tail Corporation OTTR

Piedmont Natural Gas Company, Inc. PNY

PNM Resources, Inc. PNM

Progress Energy, Inc. PGN

TECO Energy, Inc. TE

UIL Holdings Corporation UIL

Vectren Corporation VVC

Wisconsin Energy Corporation WEC

Xcel Energy Inc. XEL


31/35



Industrial

Automotive and Truck Supplies

ArvinMeritor, Inc. ARM

Autoliv, Inc. ALV

BorgWarner, Inc. BWA

Commercial Vehicle Group CVGI

Gentex Corporation GNTX

Harman International Industries, Inc. HAR

Johnson Controls, Inc. JCI

Methode Electronics Inc. MEI

Modine Manufacturing Co. MODI

Stoneridge, Inc. SRI

STRATTEC SECURITY CORP. STRT

Tenneco Inc. TEN

Consumer Building Products

Acuity Brands, Inc. AYI

American Woodmark Corporation AMWD

The Black & Decker Corporation BDK

Fortune Brands, Inc. FO

Simpson Manufacturing SSD

Quanex Building Products Corp. NX

Diversified Industrial & Machinery

Actuant Corporation ATU

Astec Industries, Inc. ASTE

Brady Corporation BRC

Bucyrus International, Inc. BUCY

Caterpillar Inc. CAT

Deere & Company DE

Dover Corporation DOV

Illinois Tool Works Inc. ITW

Ingersoll-Rand Company IR

Joy Global Inc. JOYG

Manitowoc Company Inc. MTW

Oshkosh Corporation OSK

Parker Hannifin Corporation PH

Snap-on Incorporated SNA

Sun Hydraulics Corporation SNHY

Terex Corporation TEX

Titan Machinery Inc. TITN

General Industrial

Barnes Group, Inc. B

Carlisle Companies, Inc. CLS

Columbus McKinnon Corp. CMCO

Gibraltar Industries, Inc. ROCK

Kaydon Corporation KDN

Masco Corporation MAS

Middleby Corporation MIDD

RBC Bearings Incorporated ROLL

The Stanley Works SWK

Twin Disc, Inc. TWIN

Woodward Governor Company WGOV

Industrial Distribution

Airgas, Inc. ARG

Anixter International, Inc. AXE

Beacon Roofing Supply, Inc. BECN

Builders FirstSource, Inc. BLDR

Fastenal Company FAST

Grainger, W.W., Inc. GWW

Houston Wire & Cable Company HWCC

Interline Brands, Inc. IBIMSC Industrial Direct Co. MSM

Pool Corporation POOL

Industrial Distribution ( cont d )

Watsco, Inc. WSO

WESCO International, Inc. WCC

Process Controls

Altra Holdings, Inc. AIMC

A.O. Smith Corporation AOS

Baldor Electric Company BEZ

CIRCOR International, Inc. CIRColfax Corporation CFX

Emerson Electric Co. EMR

Flowserve Corporation FLS

Franklin Electric Co., Inc. FELE

Gardner Denver, Inc. GDI

Graco Inc. GGG

IDEX Corporation IEX

ITT Industries, Inc. ITT

Mueller Water Products, Inc. MWA

Pentair, Inc. PNR

Regal-Beloit Corporation RBC

Robbins & Myers, Inc. RBN

Roper Industries, Inc. ROP

Watts Water Technologies, Inc. WTS

Transportation/ Logistics

Arkansas Best Corp. ABFS

C.H. Robinson Worldwide Inc. CHRW

Con-way, Inc. CNW

Expeditors International of Washington EXPD

FedEx Corporation FDX

Forward Air Corporation FWRD

Heartland Express, Inc. HTLD

Hub Group, Inc. HUBG

JB Hunt Transport Services Inc. JBHT

Knight Transportation, Inc. KNX

Landstar Systems Inc. LSTR

Old Dominion Freight Line ODFL

Pacer International, Inc. PACR

Ryder System, Inc. R

TAL International Group TAL

United Parcel Service UPS

UTi Worldwide, Inc. UTIW

Werner Enterprises WERN

YRC Worldwide YRCW

Technology

Computer Hardware & Storage

3PAR Inc. PAR

Brocade Communications BRCD

CommVault Systems, Inc. CVLT

Data Domain, Inc. DDUP

Dell Inc. DELL

EMC Corporation EMC

Emulex Corporation ELX

Hewlett-Packard Company HPQ

NetApp Inc. NTAP

Netezza Corporation NZ

QLogic Corporation QLGC

Seagate Technology STX

VMware VMW

Western Digital Corporation WDC

Xyratex, Ltd. XRTX

Software & Services

Adobe Systems Inc. ADB

ANSYS, Inc. ANSS

Autodesk, Inc. ADSK

Citrix Systems, Inc. CTXS

Concur Technologies, Inc. CNQR

McAfee, Inc. MFE

Omniture, Inc. OMTRRed Hat, Inc. RHT

RightNow Technologies, Inc. RNOW

Salesforce.com, Inc. CRM

SPSS, Inc. SPSSE

Symantec Corp. SYMC

VeriSign Inc. VRSN

Vocus, Inc. VRSN

EMS & Electronics

Littelfuse Inc. LFUS

Plexus Corp. PLXS

Process Technology

Agilent Technologies, Inc. A

AMETEK, Inc. AME

Badger Meter, Inc. BMI

CLARCOR, Inc. CLC

Cognex Corporation CGNX

Danaher Corporation DHRDionex Corporation DNEX

Donaldson Company, Inc. DCI

ESCO Technologies Inc. ESE

FARO Technologies, Inc. FARO

Mettler-Toledo Intl, Inc. MTD

Mine Safety Appliances Company MSA

Nalco Holding Company NLC

National Instruments Corp. NATI

Pall Corporation PLL

Polypore International, Inc. PPO

Rockwell Automation Inc. ROK

Tetra Tech, Inc. TTEK

Varian, Inc. VARI

Semiconductor Components

Altera Corp. ALTR

Analog Devices, Inc. ADI

Broadcom Corp. BRCMDiodes Incorporated DIOD

Fairchild Semiconductor Intl, Inc. FCS

GSI Technology GSIT

Intel Corporation INTC

Lattice Semiconductor Corp. LSCC

Micron Technology, Inc. MU

OmniVision Technologies, Inc. OVTI

ON Semiconductor ONNN

SanDisk Corporation SNDK

Sigma Designs, Inc. SIGM

STMicroelectronics NV STM

Texas Instruments, Inc. TXN

Xilinx Inc. XLNX

Supply Chain Technology

Avery Dennison Corporation AVY

Avocent Corp. AVCT

Bemis Company DDUP

Checkpoint Systems, Inc. CKP

Diebold, Inc. DBD

Garmin Ltd. GRMN

Intermec, Inc. IN


32/35



Technology (co n t d )

Supply Chain Technology ( cont d )

NCR Corporation NCR

Plantronics, Inc. PLT

ScanSource, Inc. SCSC

Sealed Air Corporation SEE

Zebra Technologies Corporation ZBRA

Healthcare/Life Sciences

Biotechnology

Affymax, Inc. AFFY

AMAG Pharmaceuticals, Inc. AMAG

Amgen, Inc. AMGN

Amylin Pharmaceuticals, Inc. AMLN

Array BioPharma Inc. ARRY

Biogen Idec Inc. BIIB

BioMarin Pharmaceutical, Inc. BMRN

Celgene Corporation CELG

Cerus Corporation CERS

Cubist Pharmaceuticals, Inc. CBST

Genzyme Corporation GENZ

Gilead Sciences, Inc. GILD

Human Genome Sciences, Inc. HGSI

Incyte Corporation INCY

Infinity Pharmaceuticals, Inc. INFI

InterMune, Inc. ITMNMannKind Corporation MNKD

Optimer Pharmaceuticals, Inc. OPTR

Pharmasset, Inc. VRUS

Regeneron Pharmaceuticals REGN

Theravance, Inc. THRX

Vertex Pharmaceuticals, Inc. VRTX

Distribution & Services

AmerisourceBergen Corporation ABC

Cardinal Health, Inc. CAH

Charles River Laboratories CRL

Covance Inc. CVD

ICON plc ICLR

IMS Health Incorporated RX

Kendle International Inc. KNDL

McKesson Corporation MCK

MedAssets, Inc. MDAS

Owens & Minor, Inc. OMIPAREXEL International Corp. PRXL

Pharmaceutical Product Development PPDI

PSS World Medical, Inc. PSSI

Facilities

baird m&a update (may 2009)

Documents