Global CF Strategy'

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Excellence in financiering in Initial Public
Offerings in Private Equity in Venture
Capital in MA
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Excellence in financiering
Bas van Werven BNR Nieuwsradio
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Program

• Private Equity, Going Public or MA any
  difference?
• Daan Witteveen (Partner Deloitte Corporate
  Finance)
• Galápagos N.V.
• Onno van de Stolpe (CEO)
• Vedior N.V.
• Frits Vervoort (CFO)
• Capital Markets versus Private Equity
• Mark de Graaf (Managing Director ECM ING)

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Private Equity, Going Public or MA any
difference?
Daan Witteveen Partner Deloitte Corporate Finance
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MA, Private Equity and IPOs are triggered by
value creation opportunities - though require
excellence to realise the full potential
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Excellence creates options Private Equity, IPO
or MA ?
DC PE
IPO
MA

• Motivated management team capable of executing
  the strategic plan and managing growth
• Audited financial information
• High quality internal controls and financial
  reporting
• Sustainable competitive advantage
• Attractive market opportunity
• Cash flow
• Sector multiples

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Excellence creates options Private Equity, IPO
or MA ?
DC PE
IPO
MA

• Motivated management team capable of executing
  the strategic plan and managing growth
• Audited financial information
• High quality internal controls and financial
  reporting
• Sustainable competitive advantage
• Attractive market opportunity
• Cash flow
• Sector multiples

• A strong track record of management
• Motivated management team capable of executing
  the strategic plan and managing growth
• Audited financial information
• High quality internal controls and financial
  reporting
• Sustainable competitive advantage
• Attractive market opportunity
• Availability of expansion opportunities (Buy and
  Build)
• Cash Flow, IRR, Cash multiple
• Exit strategy

• A strong track record of management
• Motivated management team capable of meeting
  expectations of stock market
• Audited financial information (3yr)
• High quality internal controls and financial
  reporting
• Disclosure controls procedures
• Sustainable competitive advantage
• Attractive market opportunity
• Availability of expansion opportunities (Buy and
  Build)
• Price / earnings, Earnings growth, Market cap
• Corporate Governance
• Free Float

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Monetising MA opportunities- corporates versus
private equity
Best practice
Poor practice
Deloitte indicative rating
1 2 3
4 5 6
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Clarity / Consistency of MA strategy Corporate
centre / divisional interworking Pre-deal
integration planning Valuation /
Diligence Technical negotiationkills Manageme
nt team selection Iincentivisation Corporate
centre / divisional interworking Measurement
accountability Delivering planned profit
improvements Disciplined portfolio
evaluation Sale Preparation Exit
Clarity of M A strategy, staff turnover and
conflicting objectives were common problems
Pre-deal
Pre-deal integration planning, valuation and
technical execution skills generally appeared in
line with Private Equity
Measurement accountability consistently
problematic, with many corporates defeated by
complexity of post-merger factors
Post-deal
Sharp divergence in practice corporates viewing
divestment as a necessary evil not a value
creation event
Portfolio
Sample mean
9
Operational inprovements increasingly
determinereturns of private equity
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Private Equity, Going Public or MA any
difference?

• MA, Private Equity and IPOs all require
  excellence to fully monetise on value creation
  opportunities
• Excellence creates value !
• Freedom to benefit from IPO, Private Equity or
  MA windows
• Operational inprovements increasingly
  determinereturns of private equity ( likewise
  corporates!)

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Galápagos N.V.
Onno van de Stolpe CEO Galápagos
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Galapagos fact sheetRapid growth

• 1999 founded by Crucell Tibotec
• 2002 VC financing specialised life science
  investors
• 2005 IPO on EuroNext, acquired BioFocus through
  shares
• 2006 Private placements 3 acquisitions
• DPI assets, Inpharmatica, ProSkelia

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Capital raised

• 6 M by founders Crucell Tibotec in 1999-2001
• 23 M venture capital financing in 2002
• 22 M raised in IPO 2005
• 11 M placement in September 2006
• 31 M placement in December 2006

Price paid per share
4
6.3
8.5
7
8.1
8.8
8.95
99-01 Founders
02 VC A-round
06 Secondary
05 IPO
05 BioFocus acquisition
Inpharmatica acquisition
ProSkelia acquisition
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Business model

Top 5 service provider Profitable
services products
Drug discovery platform


Novel drug candidates
bone joint diseases
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High growth, increasing loss
33
60-64
Revenues
RD investment
Loss
0
16
35.2
15.9
35
2
14
30
3.6
12
04
25
10
6
6.5
20
8.9
08
7.3
15
06
8
11.2
04
10
7.8
10
02
11.3
05
12
00
00
04
05
06
04
05
06
04
05
06
07 guidance
07 guidance
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IPO financing vs VC

• Advantages
• Length of process - 5 months vs 1 year
• Use of paper to build business - 3 companies
  acquired though all shares
• Capability to (always) raise additional capital -
  46 raised since IPO
• Visibility
• Disadvantages
• Glass house
• No control on investor base vs (selected) expert
  investors
• CEO/CFO time for investors

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Vedior N.V.
Frits Vervoort CFO Vedior
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Sales Breakdown Q3 2007
By Geography
By Sector
Revenues 2006 EUR 7.7 billion Net profit
2006 EUR 186 million Number of
offices 2.534 Number of countries 50
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Vedior Timeline

• Acquisition of BIS (France)
• IPO

Sale of cleaning services business,490 million
Acquisition of Select for 1,825 million
97
00
01
02
03
04
05
06
98
99
07

2002 2003 2004 2005 2006
2007 Number of Acquisitions 9 3 4 8
12 6Revenues (EUR million) 75 5 54 63 331 136
Consideration (EUR million) 39 1 12 44 159 110
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Strategic PositioningLong term drivers staffing
market
Geographic Exposure

• Cyclical Structural growth driven by
  deregulation and demographic trends
• Vedior Balanced revenue stream / Expansion into
  Asia, Eastern Europe, Latin America

Sector Exposure

• Growth potential greatest in professional
  staffing and permanent placement
• Vedior Focus on professional and executive
  staffing

• Expansion into new segments and/or markets
  pricing discipline is key
• Vedior Bolt-ons in professional segments with
  management retaining minority share

MA Strategy

• Clear strategy Simple and measurable targets
• Vedior Target operating margins by geography /
  Overall 4.6 - 5.6 EBIT margin

Management andStrategy

• Ability to deliver cash flow generation across
  cycle, incl buy-back increased dividend
• Vedior Objective to increase dividend each
  year/Free cash flow used for acquisitions

Shareholder ValueFriendly

• Return of cash across the cycle
• FCF reinvestment into small to medium sized
  acquisitions a potential source of upside
• Vedior Use of debt to finance working capital /
  Conservative financing policy

Balance Sheet
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Balance Sheet

• Solid investment grade balance sheet over the
  cycle
• Net debt / trade receivables 25-50 (Q3 27)
• Interest cover gt 6.0x (Q3 12.8x)
• Net debt / EBITDA lt 2.5x
  (Q3 1.2x)
• Diversification of funding sources and maturities
• Committed Bank Facilities
• Local uncommitted credit lines for working
  capital
• Private debt placements

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Member of Deloitte Touche Tohmatsu