Post on 01-Nov-2014
description
November 10, 2001
Underwriting in the Current Market Environment
Bill Rodoni,Vice PresidentCredit Suisse First Boston
Summary Overview
1. Choosing an Investment Bank
– Key Criteria
– The Market Leader
2. Current Market Environment
– Market Indices
– Market Appetite
– IPO Pipeline / IPO Criteria
3. The IPO Process
– Prepping for a Successful IPO
– A Typical Offering
– A Look at Valuation
4. Wrap-Up
1
1. Choosing an Investment Bank
Key Criteria for Selecting Your Underwriter
1. Size Matters! Choosing a relationship with a large, established bank is the beginning of a long-
term relationship Larger balance sheet ensures continuity and diversity of product offerings
2. Equity Research Serves as the primary link between buyside investors and the Company Third party validation is key
3. Variety of Products Breadth and depth of products ensures the most complete corporate finance
advice
4. Retail Distribution Improves transaction success rate Better diversifies shareholder base
5. Strong Track Record Previous success a leading indicator for future success
2
The Global Powerhouses
Source: Annual Reports, 10-K, 10-Q and company websites
83,000+ Employees
937 Offices in 30+ Countries
$871 Billion in Assets Under
Management or Supervision
$25.2 Billion in Equity Capital $671.0 Billion
in Assets
$24.5 Billion in Revenues (LTM)
23,050+ Employees
42 Offices in20+ Countries
$581 Billion in Assets Under
Management or Supervision
$12.7 Billion in Equity Capital
$275.0 Billion in Assets
$32.2 Billion in Revenues (LTM)
62,679+ Employees
603 Offices in 27 Countries
$548 Billion inAssets UnderManagement
or Supervision
$18.7 Billion in Equity Capital$404.1 Billion
in Assets
$42.3 Billion in Revenues (LTM)
3
CSFB: A Leader in All Major Investment Banking Products
Total Equity(1)
IPOs(1)
Convertibles
High Yield Debt
Investment Grade Debt(3)
Source: Securities Data Corporation for the period of 1/1/00 through 9/30/01.
(1) All North American issues.(2) Based on number of Institutional Investor ranked analysts as of 12/31/00.
(3) All U.S. debt (includes all public and Rule 144A debt securities).
(Ranked by Number of Transactions / Dollar Volume)
Research(2)
Announced M&A
#1 / #4
#3 / #3
#1 / #3
#1 / #1
#2 / #3
#1
#1 / #3
#3 / #1
#5 / #2
#2 / #2
#4 / #4
#7 / #7
#5
#3 / #1
#5/ #3
#4 / #5
#3 / #1
#3 / #3
#4 / #6
#3
#5 / #2
4
CSFB: Unparalleled Institutional Sales Capabilities
Institutional Salespeople(1)
2000 Reuters Survey
2000 Institutional Investor
2000 II Technology Sales
2000 - 2001 Equity Offerings*
2000 - 2001 Technology Offerings**
197
560
# 2
# 6
80
17
# 4
Global Tech Salespeople
CSFB has the largest and most effective institutional salesforce on the Street, delivering the most in-depth and intensive coverage to the leading investors…
Largest
Highest Ranked
Most Experienced
Technology Focused
* Domestic equity new issues for the period of 1/1/00 through 9/30/01 (includes IPOs and Follow-On offerings).** Global equity new issues for the period of 01/01/00 through 9/30/01 (includes IPOs and Follow-On offerings).
(1) Includes international high net worth brokers employed by the Credit Suisse Group.
675
# 1
238
# 1
111
26
# 1
154
400
# 3
# 3
81
13
# 2
5
CSFB: The Most Comprehensive Retail Distribution Network
Number of Brokers
Retail Channel
Online Channel
Number of Brokers
Number of Brokers
Broker Ranking *
* Barrons, March 2001(1) Includes high net brokers employed by the Credit Suisse Group.
… and the breadth of CSFB’s retail coverage is unmatched.
U.S. High Net Worth
Intl. High Net Worth(1)
Traditional Retail
Online Distribution
500
GS Online
100
NA
Goldman Sachs
600
500
Pershing
CSFBdirect
750+
17,000
# 1
250
MS Online
11,000
100
Dean Witter
#7
6
Trading Support
NYSE U.S. Listed Stocks
OTC U.S. Stocks*
# of OTC Stock Traded
# of Market Makers
5.5%
450
11.0%
745
5.4%
550
Source: AutEX / Block DATA* Includes OTC stocks traded by CSFB and DLJ.
For CY2000.
Avg # of Stocks/ Market Maker
5.2%8.6% 6.4%
1835 21
2521 26
Rank
%
Rank
%
# 1 # 5 # 4
# 1 # 3 # 5
7
Reputation for High Quality Transactions
Quality of new equity issues
Due diligence on new issues
Pricing of new equity issues
Equitable allocation of new issue product
Quality of research product and service in the aftermarket
Aftermarket performance of equity issues
* In a survey dated July 19, 2000, Reuters surveyed 75 of the largest institutional managers of active US equity funds. They estimate that their sample represents 88% of the active institutional funds invested in mid- and small-cap equities. Responses have been weighted by fund size.
Category 1st Place
Overall Rankings 19992000
23% 11%
Goldman Sachs 17 14
Morgan Stanley Dean Witter 16 14
Merrill Lynch 9 12
Salomon Smith Barney 6 12
Reuters Survey of Fund Managers*
8
2000 - 2001 Total TechnologyFinancing and M&A (Number of Deals)
389
233 232
188
157143
99 98
0
50
100
150
200
250
300
350
400
CSFB GS MS JPM CIT/SSB ML DBAB LEH
2000 - 2001 Total Technology Financing and M&A (Dollars in Billions)
The Clear Leader in Technology Investment Banking
Notes:Transactions announced 1/1/00 through 9/30/01.Includes private placement deals.
$380.9
$350.5
$237.9
$189.7$181.3
$133.1$103.4
$81.0
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
$350.00
$400.00
CSFB MS GS CIT/SSB JPM ML LEH BofA
9
Bankers Who Led Industry-Defining, “First-of-a-Kind” IPOs
1990 1993 1994 1995 1997 1999 2000
1998 2001+
10
2. Current Market Environment
Market Conditions ------- THEN
Market Conditions ------- NOW
40%
50%
60%
70%
80%
90%
100%
110%
120%
130%
12/29 1/29 2/28 3/29 4/29 5/29 6/29 7/29 8/29 9/29 10/29
Dow -13.6%
S&P 500 -17.7%
Nasdaq -29.3%
CSFB Tech
-37.4%
Fed cuts rates: Jan 3: 50bpsJan 31: 50bpsMar 20: 50bpsApril 18: 50bpsMay 15: 50bpsJune 27: 25bpsAug 21: 25bpsSept 17: 50bpsOct 2: 50bps
Weak Equity Markets Further Challenged by the Impact of the Tragic Events
Equity Market Performance
Sept 11 - Terrorist Attacks
The terrorist attacks of September 11th added a new dynamic to markets which were already off significantly YTD
One month later, markets have returned to pre-September 11 levels
Market continues to be characterized by: Increased volatility: extreme intra-day
shifts as market is trading on news and rumors
Recent volumes on both Nasdaq and NYSE greater than year-to-date averages
Expectations of negative pre-announcements
Large redemptions remain a key concern Outflows of $29.5bn for month of
September; consequently, cash reserves at mutual funds are high
YTD
Impact on Volatility and Liquidity
Performance from: Nasdaq Dow S&P 5001/1/01 - 7/31/01 -17.9% -2.4% -8.3%8/1/01 - 9/10/01 -16.4% -8.7% -9.8%9/11/01 - Current 3.0% -2.9% -0.5%YTD -29.3% -13.6% -17.7%
% of Days with Greater Than 3% Movements
1999 2000 2001 YTD Since 9/17NASDAQ 7.8% 29.7% 25.4% 28.6%DJIA 0.0% 2.7% 4.1% 8.6%S&P 0.4% 4.3% 3.6% 5.7%
Average Daily Volume
1999 2000 2001 YTD Since 9/17NASDAQ 1,049 1,667 1,791 1,904NYSE 809 1,042 1,232 1,712
12
98.6
98.8
99.0
99.2
99.4
99.6
99.8
100.0
100.2
100.4
1 2 3 4 5 6 7 8
Q1'01 - Q3'01Q1'90 - Q4'91
6.6% 6.1%
1.6%
-8.5%
-36.6%-39.8%
-47.4%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
Q1 2000 Q2 2000 Q3 2000 Q4 2000 Q1 2001 Q2 2001 Q3 2001
Weakened Earnings Outlook Clouded by Potential Recession
Real GDP (Indexed to Q1 1990)
Periods represent quarters
Concerns over a weakened U.S. and global economy, falling corporate profits and an unstable political environment have intensified
2001 estimates lowered again as likely IT and capital spending freeze expected to remain through remainder of year. 2002 estimates revised to create more realistic expectations for investors
Expected pullback in spending as consumer and business confidence severely shaken – GDP growth estimates lowered for Q3 and Q4 2001
On November 7th, the Fed cut interest rates by half a point to their lowest level since 1961 and, citing a deteriorating economy, suggested more cuts could be in store
Tax cuts will help add liquidity, but will consumers spend or save?
% Change of FY1 EPS Estimates of Tech Companies in S&P 500
Mean First Call EPS Estimates
% of Companies with Lowered Estimates
21% 28% 30% 60% 79% 83% 85%
13
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
1/1/90 4/1/90 7/1/90 10/1/90 1/1/91 4/1/91 7/1/91 10/1/91
Aug 2, 1990: Iraq invades Kuwait
Jan 16 - Feb 28, 1991: Persian Gulf War
1990 - 1991 Equity Market Performance
Nasdaq: 28.9%S&P 500: 18.0%Dow: 15.1%
(1) First terrorist attack on US soil
NASDAQ’s Average Reaction to Major Surprise Attacks
History Indicates Markets Are Likely To Pick Up Over the Long-Term
CSFB’s equity strategist, Tom Galvin, believes the terrorists attacks may accelerate and pull forward a recession, ultimately resulting in a stronger V-shaped recovery as infrastructure is rebuilt – similar pattern seen during the ‘90 - ‘91 recession, Iraqi invasion and Gulf War
History indicates that stock prices have usually risen on average by 25% one year and over 34% two years following a surprise attack
Markets will rebound from current lows: Cash reserves at mutual funds high;
buyside looking for good investment ideas
US economy expected to recover by Q2 2002 as household/consumer confidence restored, lower interest rates expected and expansionary fiscal policy underway
Date Event
8/2/1990 Iraq invades Kuwait - Operation Desert Storm
2/26/1993 World Trade Center bombed (1)
4/19/1995 Oklahoma City Federal Building bombed
9/11/2001 Terrorist Attacks on America
1 Day 1 Week 2 Weeks 1 Year 2 Years 3 Years Later Later Later Later Later Later
8/2/1990 (2.7%) (3.7%) (6.2%) 17.9% 35.4% 64.3%
2/26/1993 (0.2%) 1.6% 3.3% 16.8% 17.9% 65.9%
4/19/1995 0.3% 2.5% 4.1% 39.2% 49.7% 128.6%
9/11/2001 (6.8%) (16.1%) (11.6%) ---- ---- ----
Average (2.3%) (3.9%) (2.6%) 24.6% 34.4% 86.3%
14
$972$1,645
$1,129$1,672
$2,649 $2,884
$3,193
$2,626
$686
$2,119
$1,823
$246
$2,000
$1,754
$15
$40
$114$60
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
9/11 9/17 9/24 10/1 10/8 10/15 10/22 10/29
IPOCVTCOM
New Issue Market is Returning to Life
Weekly New Issue Volumes New issue activity has rebounded since
September 11 Convertibles:
• 25 deals for $9.8bn• Given low Treasury yields and high
equity volatility, the convertible market has been extremely active
Follow-Ons:• 51 deals for $10.9bn• Average discount to last trade is -2.6%• Average % change from offer to current
is 7.0% IPOs:
• 8 deals for $4.0bn• Average 1st day appreciation is 14.2%
Technology new issuance has been limited to converts and follow-ons thus far
Convertibles: EDS ($780mm), FNSR ($100mm), SYMC ($525mm), ASML ($500mm), TER ($350mm), LSI ($450mm), MOT ($1,050mm), AV ($400mm), FCS ($200MM)
Follow-Ons: ISIL ($441mm), INKT ($53mm), ACS ($648mm), MXO ($103mm)
Backlog is Building Across All Sectors (1)
% of Total16%40%43%
(1) Deals on file for less than 180 days
Amt # of Iss Amt # of Iss Amt # of IssHealthcare $2,786 18 $957 8 $3,743 26Telecommunications $0 0 $1,177 2 $1,177 2Insurance $1,850 1 $25 1 $1,875 2Technology $702 10 $1,094 6 $1,796 16Financial Institutions $244 7 $858 9 $1,102 16Real Estate $564 2 $228 5 $792 7Professional Services $740 5 $0 0 $740 5Energy $671 7 $0 0 $671 7Retail $590 3 $0 0 $590 3Consumer Products $0 0 $0 0 $0 0
Total (Top 10) $8,147 53 $4,339 31 $12,486 84Total $8,349 55 $5,091 40 $15,301 100
IPO Follow-ons Total
15
Institutional Investors Are Receptive to New Issues
Portfolio Managers will buy stories with all pieces in place
Large and growing market opportunity Differentiated technology and/or definable business model Diverse, high quality customer base Management team with impeccable execution track record and vision No “hair”
Companies that are “real” will have a broad institutional audience
Significant revenue base (i.e. ~ $10 mm) during quarter going public High revenue visibility - strong, diverse backlog needed Profitability reached shortly after offering (i.e. 2-3 quarters)
Valuation and structure will be important selling points
Shift from revenue to earnings multiples - ‘02 P/E is very positive Price on cover reflects expected pricing Attractive valuation versus comparable group Other investor issues include: early lockup releases, option dilution and
funding to breakeven
16
IPO Criteria: Then vs. Now
Then
4 to 5 quarters to profitability Growth through R&D spending
was rewarded in exchange for near-term profitability
Profitability 1 to 2 quarters to profitability Strong quarter-over-quarter
growth and strong revenue diversification are required
Revenue multiple
$4-6 million
1-2 customers; possibly equity investors
Buzz surrounding hot sectors provided instant investor attention
Revenue and P/E multiple
$10-15 million
Quality, diversified customer base Well-financed customers
Unique market opportunity necessary
Infrastructure in place to grow to profitability
Solid management team
Valuation
Revenue in Q prior to IPO
Customer Base
Type of Entrant
Q4 2000
Now
August 2001
Vague visibility towards steady state model
Investors comfortable with soft targets and vague references to long-term financial performance goals
Near-term visibility towards steady state model
Investors expect specifics regarding achievement of steady state
Long-term Financial
Model
17
Tech IPO Snapshot
LOOKING BACK:
Of the IPOs Completed from May 15, 2000 (i.e. the beginning of the recent correction):
Average IPO performance: (54.6%)
IPOs trading below issue price: 83.1%
Average loss of IPOs below issue: (73.6%)
IPOs below 1st day close: 90.0%
TODAY:
In 2001, only 15 tech IPOs have been completed
Aftermarket trading performance of these stocks has exceeded the tech IPO classes of 1999 and 2000 --- 2001 IPOs are down 5.1% from offer to current
Technology Research UniversePerformance by Sector
Amount # of IPO Midpoint Offer to
Tech IPOs ($MM) Offerings Market Value to Offer Day 1 Current
2001 $8,736 15 $44,325 -7.9% 20.5% -5.1%2000 $29,589 223 $227,328 20.1% 77.3% -61.6%
1999 $32,051 327 $203,761 25.5% 92.8% -32.8%
% Change in Price Amount Offer from 1st Day
Date Issuer ($MM) Orig. Mdpt Day 1 Current to Current
8/9/2001 Mykrolis Corp 105.0$ (6.3%) 8.3% (32.3%) (37.5%)7/30/2001 HPL Technologies 66.0$ 0.0% 21.4% 13.7% (6.3%)7/26/2001 PDF Solutions, Inc. 54.0$ 0.0% 26.3% 36.8% 8.3%7/18/2001 Accenture Ltd. 1,667.5$ 3.6% 4.6% 21.5% 16.2%6/27/2001 Monolithic System Technology 50.0$ 0.0% 12.2% 19.7% 6.7%6/20/2001 Multilink Technology Corp. 72.0$ 0.0% 24.3% (53.7%) (62.7%)6/7/2001 Alliance Data Systems Corp 156.0$ (7.7%) 16.7% 32.7% 13.7%5/17/2001 Instinet Group LLC 464.0$ 16.0% 21.7% (32.9%) (44.9%)5/16/2001 Tellium Inc. 135.0$ 7.1% 39.5% (47.7%) (62.5%)5/1/2001 Simplex Solutions Inc. 48.0$ 9.1% 76.7% 16.8% (33.9%)3/27/2001 Agere Systems Inc. 3,600.0$ (53.8%) 0.3% (15.0%) (15.3%)3/20/2001 Verisity Ltd. 23.3$ (22.2%) 14.3% 42.9% 25.0%3/8/2001 Loudcloud, Inc. 150.0$ (45.5%) 2.6% (59.2%) (60.2%)2/15/2001 Riverstone Networks Inc. 120.0$ 0.0% 8.9% 13.8% 4.5%2/7/2001 KPMG Consulting, Inc 2,024.7$ (19.4%) 30.5% (33.6%) (49.1%)
Average (7.9%) 20.5% (5.1%) (19.9%)
Offer to
% Change in Price
CSFB Technology Research Sectors# of Co's
YTD 2001 2000
Since 9/11
52-Week High
Since 9/11 Mkt. Adj.
Storage and Data Networking 14 -48.5% -22.5% 29.7% -76.1% 25.4%
Telecom Equipment - Wireline 32 -68.7% 13.0% 21.2% -84.2% 16.9%
Data Services 9 -41.6% -45.8% 20.7% -80.1% 16.4%
Internet and eBusiness Infrastructure 18 -40.9% -19.3% 16.9% -70.1% 12.6%
Telecom Equipment - Wireless 31 -56.7% -24.7% 14.6% -75.1% 10.3%
eCommerce 31 -31.3% -14.8% 14.4% -62.1% 10.0%
Electronic Components and Distributors 19 -8.6% -11.0% 8.5% -46.4% 4.2%
Electronic Infrastructure / Tech. Software 12 -8.0% -13.9% 7.1% -42.4% 2.8%
Business Software Applications 21 -69.5% -12.4% 6.1% -82.1% 1.8%
Semiconductors 33 -5.1% -1.0% 5.8% -50.2% 1.5%
Internet Infrastructure Software 22 -58.8% -45.7% 5.1% -80.7% 0.7%
Optical Components 4 -76.9% -11.8% 1.2% -87.8% -3.1%
PC & Enterprise Hardware 10 -14.2% -43.7% 0.9% -51.3% -3.5%
Contract Manufacturing 13 -43.7% -1.4% -0.4% -70.2% -4.8%
Comm. Software and Enhanced Services 9 -44.9% 2.8% -1.0% -68.5% -5.4%
IT Consulting & Computer Services 30 -19.5% -59.1% -1.1% -53.3% -5.5%
Software 14 -53.4% 25.5% -1.5% -76.0% -5.9%
Semiconductor Capital Equipment 18 0.0% -28.2% -1.8% -42.6% -6.1%
Internet / New Media & eCommerce 30 8.4% -71.7% -5.0% -61.2% -9.3%
Test & Measurement 8 -38.9% -29.0% -5.2% -62.9% -9.6%
Latin America Internet 4 -38.7% -85.2% -10.4% -82.9% -14.7%
Communications ICs 16 -47.3% -0.4% -11.2% -73.2% -15.5%
Imaging 7 -21.6% -33.3% -18.4% -50.1% -22.7%
All Technology Sectors 405 -34.2% -22.1% 6.3% -65.6% 1.9%
18
Technology IPO Activity And Performance Have Declined
Technology IPO Volume Original Midpoint to Offer Price
1st Day Trading Performance Offer Price to Current Performance
Technology IPO Data - Monthly
$0$105
$1,788
$278
$647
$0
$605
$1,211
$2,534
$3,782$3,612
$1,005
$2,026
$8,297
$4,322
$191
$2,145
$3,773
$952
$0$0
$1,050
$0
$2,000
$4,000
$6,000
$8,000
$10,000
OC
T
SE
P
AU
G
JUL
JUN
MA
Y
AP
R
MA
R
FE
B
JAN
01
DE
C
NO
V
OC
T
SE
P
AU
G
JUL
JUN
MA
Y
AP
R
MA
R
FE
B
JAN
00
11 34 40 21 12 18 29 13 6 8 1 030 0 2 3 0 3 3 3 1 0
-6.3%
1.2%
-2.6%
10.7%
-40.5%
-9.7%
18.3%
-7.2%-6.9%
45.1%
51.9%52.2%
2.9%
10.3%
-6.4%
8.9%
-19.2%
1.7%
-50.0%
-30.0%
-10.0%
10.0%
30.0%
50.0%
70.0%
OC
T
SE
P
AU
G
JU
L
JU
N
MA
Y
AP
R
MA
R
FE
B
JA
N 0
1
DE
C
NO
V
OC
T
SE
P
AU
G
JU
L
JU
N
MA
Y
AP
R
MA
R
FE
B
JA
N 0
0
8.3%
17.4%17.7%
5.7%
19.7%
46.9%50.0%
47.1%
105.1%
140.2%
144.2%
24.1%
67.4%
61.5%
46.0%
33.5%
25.4%
34.6%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
160.0%
OC
T
SE
P
AU
G
JUL
JUN
MA
Y
AP
R
MA
R
FE
B
JAN
01
DE
C
NO
V
OC
T
SE
P
AU
G
JUL
JUN
MA
Y
AP
R
MA
R
FE
B
JAN
00
-0.4%
-21.3%
-45.5%
-64.1%
-69.7%
-63.1%
-53.2%-54.9%
-65.4%
-76.0%
-14.9%-10.4%
24.0%
-77.3%
-9.9%
-32.3%
-52.8%-53.1%
-100.0%
-90.0%
-80.0%
-70.0%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
OC
T
SE
P
AU
G
JU
L
JU
N
MA
Y
AP
R
MA
R
FE
B
JA
N 0
1
DE
C
NO
V
OC
T
SE
P
AU
G
JU
L
JU
N
MA
Y
AP
R
MA
R
FE
B
JA
N 0
0
19
3. The IPO Process
Valuation Overview -- It’s a Buyer’s Market
Concerns over a slowing economy, earnings warnings, low visibility and recent political instability continue to test the markets in 2001 with the Nasdaq currently down over 29% (1) from the beginning of the year
IT purchases and budgets have been severely disrupted– September quarter software sales, already weak from the poor economic
environment, have been particularly hard-hit after the terrorist attacks– Two separate components: short-term disruption to purchasing decisions and
longer-term macroeconomic risk that extends at least into next year– CY 2002 visibility is low at the moment, as is sales linearity within quarters
In 2001, only 15 tech IPOs have been completed, of which 13 are below issue price
(1) Through 11/2/0120
IPO Process --- THEN
IPO Process --- NOW
Valuation Methodology
Review and refine Company projections to create “street case” Typical “haircuts” between 15-30% based on:
Analysis and diligence of Company’s financials Company’s track record Macro spending conditions
Apply three valuation frameworks to triangulate a fully distributed trading value Comparable Company Analysis, Recent IPO Analysis and Intrinsic Value
Analysis Assumptions
An offering that takes place in early ’02 will be valued on ’03 multiples at that time
Filing/Pricing multiple discounted 20-25% from fully distributed trading multiples
21
Valuation Frameworks
Identify peer group: Infrastructure Management Software Vendors
Calculate trading multiples
Apply relevant multiples to Company’s results to determine potential fully-distributed value
Comparable Company Analysis
Identify pricing statistics for recent IPOs of peer group companies
Calculate filing, pricing and trading multiples
Apply relevant multiples to Company’s results to determine marketing approach and potential filing, pricing, and trading values
Recent IPO Analysis
Project out future cash flows
Determine discount rate and intrinsic value multiples
Apply relevant multiples to Company’s results to determine potential value
Intrinsic ValueAnalysis
22
Typical IPO Structure
Lead Manager / Bookrunner: Credit Suisse First Boston
Co-Managers: 2 - TBD (primarily research-driven)
Economics: 50% / 25% / 25% (2 Co-Managers)
Deal Size: $50-60MM; 15% Greenshoe
Shares Offered: 100% primary recommended
Domestic / International Split: 80% / 20%
Institutional / Retail Split: 80% / 20%
Directed Shares: Up to 5%
Lockup: 180 days
23
Representative IPO Timetable
Denotes Holiday
24
Global Penetration
Powerful Institutional
Relationships
Technology Specialist CoverageGameplan
Establish Early Momentum
Design High-Impact Marketing Schedule
Motivated Management Structure
Generate Strong “Online” Demand
Key Marketing Variables
25
Typical Marketing Objective
Roadshow Schedule: Focus on Key Accounts
8-9 day Roadshow targeting 40-50 investores for one-on-one meetings
2-3 day European Roadshow targeting 10-15 investors for one-on-one meetings
Generate Key Early Orders to Establish Momentum
Qualify with Aftermarket Feedback
Provide Strong Trading Support
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Post-IPO Support
Detailed initiation report; quarterly updates; real-time electronic dissemination of intra-quarter news
Commitment to be leading market maker; willingness to use capital
Institutional investor follow-up road shows to broaden investor base
Post-IPO technology conferences
M&A ideas, analysis and execution
Introduction to strategic partners
Financing alternatives (secondary, convertible, debt, bridge financing)
Employee stock option hedging program
CREDIT SUISSE FIRST BOSTON CORPORATION
Wendell Laidley (415) 836-7716 wendel.laidley@csfb.com
Strong Buy
Equity Research - Americas CREDIT SUISSE FIRST BOSTON CORPORATION
Jim Marks (212) 325-6550 jim.marks@csfb.com
Strong Buy
Equity Research - Americas CREDIT SUISSE FIRST BOSTON CORPORATION
Life-Altering Technology Curt Schilling (212) 555-9000curt.schilling@csfb.com
Equity Research - Americas
Buy
Empowering Change
“COMPANY”
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The Role of Research
Significant “front-end” effort to position company’s story in prospectus and roadshow
Sales force “teach-in” to begin communicating the Company opportunity
Active involvement on roadshow
Prepare management for key accounts
Direct follow-up with key investors after one-on-one meetings
Detailed report issued immediately after 25-day quiet period expires
Timely communication with the market as company events dictate (e.g., high profile customer wins, acquisitions, significant industry events)
Frequent updating to institutional salesforce to ensure institutions
Monthly First Call Notes
Quarterly earnings reports
Pre-IPO IPO Marketing Post-IPO
CREDIT SUISSE FIRST BOSTON CORPORATION
Wendell Laidley (415) 836-7716 wendel.laidley@csfb.com
Strong Buy
Equity Research - Americas
Jim Marks (212) 325-6550 jim.marks@csfb.com
Strong Buy
Equity Research - AmericasCREDIT SUISSE FIRST BOSTON CORPORATION
Life-Altering Technology Randy Johnson (212) 555-9000Randy.johnson@csfb.com
Equity Research - Americas
Buy
“COMPANY”
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4. Wrap-Up
Summary of Key Ideas
It is important to choose an investment bank that can meet your needs today and in the future
– Reputation - successful record of previous transactions enhances your credibility
– Size - helps ensure ease of execution
– Complete Suite of Product Offerings
– Aftermarket Support from Equity Research and Trading
Difficult market conditions have drastically reduced that number of IPOs in 2001
– Criteria for going public has become more stringent -- back to fundamentals
– A buyer’s market
The “right” companies can still access the public equity markets!
Biography - Bill Rodoni
Bill Rodoni is a Vice President in the Investment Banking Division of the Credit Suisse First Boston Technology Group (CSFB) where he focuses on raising private capital for both privately-held and public technology companies. The CSFB Private Equity Group, of which Bill is a member, has completed 77 transactions in the past 5 years and has raised over $4.7 billion for its clients during this timeframe. While at CSFB, Bill has raised money for such notable clients as Plumtree Software, Packet Video and Storageway.
Prior to joining CSFB, Bill was a senior attorney in the Corporate Securities Group at Gray, Cary, Ware & Freidenrich, one of the largest law firms in the country, where he represented both privately-held and public technology companies in a wide range of transactions including public offerings, mergers and acquisitions, private placements and technology licensing. While at Gray Cary, Bill's client base included Ascend Communications, The Vantive Corporation, Aspect Development and 3Com. Prior to joining Gray Cary, Bill was a financial/legal analyst at First Pacific Company in Hong Kong, a large, multinational Asia-based conglomerate. Bill has both a J.D. (summa cum laude) and a B.S. in Finance from Santa Clara University.
Bill can be reached via phone at 415-249-8893 or via email at bill.rodoni@csfb.com.
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