equity investment banking robert castle, principal © 2006 piper jaffray & co. since 1895....

Equity Investment BankingRobert Castle, Principal

© 2006 Piper Jaffray & Co. Since 1895. Member SIPC and NYSE.

Introduction

Robert Castle, Principal – Investment Banking• In seventh year at Piper Jaffray

– Associate for 2 ½ years– Vice President for 3 years

• Previously with Conseco Finance and Morgan Stanley

• MBA in Finance, University of St. Thomas• BS in Mortuary Science, University of MinnesotaLittle Known Facts• Nickname is Digger• Enjoy golf, tennis and reading mystery novels• Live in Eagan with wife and two boys (9 and 2 years

old)• Former model and actor

Introduction

Typical Week Day (Non-Traveling)• Wake up at 5:00am• Exercise from 5:15am to 6:30am• Arrive at work around 8:30am• Have multiple client meetings/calls throughout

day• Place calls into new/prospective clients• Arrive at home in between 7:00pm and 8:00pm• Read documents or other work at home before

bed

Typical Week• 60 – 70 hours per week with travel• Two to three days per week of travel

Introduction

Attributes of a Successful Banker• Client focused• Analytical and critical thinker• Good listener• Excellent communicator (orally and written)• Ability to delegate• Team player and mentor for junior staff• Unflappable

Banker Objectives• Become clients’ trusted advisor• Build our core base of five to ten key clients

Clients

Who they are• Small and middle-market companies

– Typically up t0 $2.0 billion in market capitalization– Private, growth companies

• Financial sponsors– Private equity firms– Venture capitalists

Value Piper Jaffray provides them• Provide customized, tailored and trusted advice

– No “cookie cutter” approach to our business

How they are assigned• By industry expertise and sub-sector

specialization

Clients• BioPharmaceuticals• Health Care Services• Information-Driven Health Care• Life Sciences Tools/Diagnostics• Medical Technology

• Asset Management• Broker-Dealers• Depository Institutions• Financial Technology &

Services• Insurance• Specialty Finance

Financial Institutions

Consumer

Health Care

• Apparel, Footwear & Softline Retail

• Consumer Products• Food & Beverage• Restaurants• Specialty & Hardlines Retail

• Computer Hardware & Semiconductors

• Enterprise Software• Internet• IT Services• Wireline & Wireless

Communications

Technology

• Business Information Services• Facilities Services• Human Resource Services• Industrial Services• Learning Services• Marketing Services• Professional Services

Business Services

• Clean Technology• Distributed Power Generation• Ethanol/Bio-Fuels• Fuel Cells• Solar Power• Wind

Alternative Energy

• Aerospace• Automotive Products• Building Products• Flow & Process Controls• Industrial Distribution• Metal Processing• Packaging• Plastic Processing• Security & Safety• Specialty Chemicals• Specialty Vehicles• Other Manufacturing & Services

Industrial Growth

Financing/Products/Services

Piper Jaffray has expertise in providing “cradle to grave” financing advice• Start up or private equity capital• Initial public offerings (“IPOs”)• Follow-on or secondary offerings• Debt capital

– Senior, subordinated and convertible debt• Financial advisory services

– Mergers & Acquisitions– Divestitures– Defensive Advisory

• Corporate and venture services• Restructuring (a/k/a Bankruptcy)

Most common and least common financing

• Approximately 50% of revenue comes from raising capital (i.e., IPOs, follow-offerings, convertible securities) and 50% comes from advisory services (M&A and private capital) Mergers & Acquisition AdvisoryUnderwriting

(IPOs, Follow-ons, ADRs & Convertibles)

1 J .P. Morgan Securities 1062 Merrill Lynch 903 Citigroup Global Markets 884 Goldman Sachs 835 UBS Securities 826 Morgan Stanley 797 Lehman Brothers 788 Banc of America Securities 759 Credit Suisse First Boston 6510 Piper Jaffray 6411 Wachovia Capital Markets 5911 CIBC World Markets 5913 Deutsche Bank Securities 5113 SG Cowen Securities 5115 Bear Stearns 44

Focus SectorsRank Manager # of Deals

Piper Jaffray finished 2005 ranked 15th in the number of Lead and Co-managed equity offerings completed – 10th overall in our focus sectors

Houlihan Lokey Howard & Zukin 126Jefferies & Co. 76Wachovia 69Piper Jaffray 48M&A International 40Keefe Bruyette & Woods 38William Blair & Co. 36Sandler O’Neill & Partners 35Lincoln Partners 33Daniels & Associates 32BB&T 30KPMG Corporate Finance 27Goldsmith Agio Helms & Co. 26Raymond James 24CIBC World Markets 24

Number ofMiddle-Market Advisors* Deals Closed

Source: Thomson Financial and Piper Jaffray; U.S. based buyers/sellers only* Excludes Investment Banks with Average Deal Size>$500 million

Underwriting (IPOs, Follow-ons, ADRs & Convertibles)





Piper Jaffray finished 2005 ranked 15th in the number of Lead and Co-managed equity offerings completed – 10th overall in our focus sectors





Source: Thomson Financial and Piper Jaffray; U.S. based buyers/sellers only* Excludes Investment Banks with Average Deal Size>$500 million


How is our research product used?• Provides investment banking clients with a

“voice” on the Street

• Ability to provide company specific and industry specific knowledge to new/prospective clients

• Enables bankers to keep informed of key company events

• Utilized by institutional sales force to keep in front of their clients and to sell new offerings


How is our research product used?• Our research analysts are independent from our

investment bankers and develop their opinions based on the results and merits of a covered company.

• Our research analysts, together with research management, make their own coverage decisions, including decisions to initiate or terminate coverage. Our investment bankers do not have any input into company-specific coverage decisions.

• Piper Jaffray does not offer favorable research or specific ratings or price targets in consideration of, or as an inducement for investment banking business.

• Our research analysts do not participate in efforts to solicit investment banking business.



Number of Companies Under Coverage Less than $2 Billion

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Equity Research Coverage – Consumer, Financial, Health Care and Technology

Sector classifications via Global Industry Classification Standard (GICS)Source: bigdough; data as of 12/31/2005

How is our research product used?

Conferences that Investment Banking has access to:• Industry conferences sponsored by trade

associations• Piper Jaffray sponsored conferences


• Financial Conference March New York, NY

• China Internet & Technology Conference MarchBeijing, China

• Hardware & Technology Conference May New York, NY

• Health Care Conference June London, England

• Consumer Conference June New York, NY

• Digital Media Technology Conference SeptemberNew York, NY

• Software & Business Services Conference SeptemberNew York, NY

• Retail, Apparel & Footwear Conference OctoberLondon, England

• Financial Services Conference November Boston, MA

• Health Care Conference November New York, NY

Conference Date Location

Partnerships

Internal• Product specialists

– Equity capital markets (i.e, syndication)– Convertible securities– Debt capital markets– Corporate and venture services

• Industry team– Analysts, Associates, Vice Presidents, Principals

and Managing Directors

External• Accountants, attorneys, printers, financial

sponsors

Partnerships

Seamless Teamwork & Integrated

Client Focus

Minneapolis

NewYork

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DepositoryInstitutions

VP

FinancialTechnology& Services

Principal

SpecialtyInsurance

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Revenue

Is created by:

• Working hand-in-hand with clients

• Providing thoughtful, value-added advice

• Constantly developing existing and new/prospective client relationships.

• Being retained to represent companies on transformative events

– IPOs (typically 7.0% commission)

– Follow-on offerings (typically 5-6% commission)

– Private capital offerings (typically 3-6% commission)

– Advisory assignments (1-2% of transaction value)

– Debt offerings (.50% to 3% commission)

Questions

equity investment banking robert castle, principal © 2006 piper jaffray & co. since 1895....

Documents

week of travel slide

actor slide

piper jaffray associate

newprospective clients

key clients

clients trusted advisor

introduction robert

bed typical week