Manhattan Atlantic Capital

Manhattan Manhattan Atlantic Atlantic CapitalCapital

Manhattan Atlantic Capital LLCManhattan Atlantic Capital LLCPresentation to PotentialPresentation to Potential

Limited PartnersLimited Partners

Manhattan Manhattan Atlantic Atlantic CapitalCapital DisclaimerDisclaimerThisThis presentationpresentation containscontains forwardforward--lookinglooking informationinformation.. ForwardForward--lookinglooking informationinformation includes,includes, butbut isis notnotlimitedlimited to,to, informationinformation withwith respectrespect toto thethe operations,operations, investmentinvestment strategystrategy andand processesprocesses ofof thethePartnershipPartnership asas wellwell asas thethe PartnershipsPartnerships abilityability toto identifyidentify andand concludeconclude transactionstransactions withwith acquisitionacquisitiontargetstargets andand completecomplete subsequentsubsequent liquidityliquidity eventsevents.. Generally,Generally, forwardforward--lookinglooking informationinformation cancan bebeidentifiedidentified byby thethe useuse ofof forwardforward--lookinglooking terminologyterminology suchsuch asas plans,plans, expects,expects, oror doesdoes notnot expect,expect, isisexpected,expected, budget,budget, scheduled,scheduled, estimates,estimates, forecasts,forecasts, intends,intends, anticipates,anticipates, oror doesdoes notnotanticipate,anticipate, oror believesbelieves oror variationsvariations ofof suchsuch wordswords andand phrasesphrases oror statestate thatthat certaincertain actions,actions, eventsevents ororresultsresults may,may, could,could, would,would, might,might, oror willwill bebe taken,taken, occur,occur, oror bebe achievedachieved.. ForwardForward--lookinglookinginformationinformation isis subjectsubject toto knownknown andand unknownunknown risks,risks, uncertaintiesuncertainties andand otherother factorsfactors thatthat maymay causecause thetheactualactual results,results, levellevel ofof activity,activity, performanceperformance oror achievementsachievements ofof thethe Partnership,Partnership, toto bebe materiallymaterially differentdifferentfromfrom thosethose expressedexpressed oror impliedimplied byby suchsuch forwardforward--lookinglooking information,information, includingincluding risksrisks associatedassociated withwith thetheprivateprivate equityequity industryindustry suchsuch asas economiceconomic andand marketmarket conditions,conditions, thethe abilityability toto raiseraise sufficientsufficient capital,capital, thetheabilityability toto identifyidentify andand concludeconclude acquisitionsacquisitions ofof suitablesuitable investmentinvestment opportunitiesopportunities andand completecomplete liquidityliquidityeventsevents onon favourablefavourable termsterms.. ImplicitImplicit inin thisthis forwardforward--lookinglooking informationinformation areare assumptionsassumptions regardingregarding thethegeneralgeneral economy,economy, debtdebt financingfinancing availability,availability, currencycurrency exchangeexchange rates,rates, interestinterest ratesrates andand opportunitiesopportunities..TheseThese assumptions,assumptions, althoughalthough consideredconsidered reasonablereasonable byby thethe GeneralGeneral PartnerPartner basedbased onon informationinformationcurrentlycurrently availableavailable toto it,it, maymay proveprove toto bebe incorrectincorrect.. AlthoughAlthough thethe GeneralGeneral PartnerPartner hashas attemptedattempted toto identifyidentifyimportantimportant factorsfactors thatthat couldcould causecause actualactual resultsresults toto differdiffer materiallymaterially fromfrom thosethose containedcontained inin forwardforward--lookinglooking information,information, therethere maymay bebe otherother factorsfactors thatthat causecause resultsresults notnot toto bebe asas anticipated,anticipated, estimatedestimated ororintendedintended.. ThereThere cancan bebe nono assuranceassurance thatthat suchsuch forwardforward--lookinglooking informationinformation willwill proveprove toto bebe accurate,accurate, asasactualactual resultsresults andand futurefuture eventsevents couldcould differdiffer materiallymaterially fromfrom thosethose anticipatedanticipated inin suchsuch informationinformation..Accordingly,Accordingly, readersreaders shouldshould notnot placeplace undueundue reliancereliance onon forwardforward--lookinglooking informationinformation.. TheThe GeneralGeneralPartnerPartner doesdoes notnot undertakeundertake toto updateupdate anyany forwardforward--lookinglooking information,information, exceptexcept inin accordanceaccordance withwithapplicableapplicable securitiessecurities lawslaws..


MAC creates sustainable value for its shareholders by maximising MAC creates sustainable value for its shareholders by maximising both the synergies and efficiencies of its portfolio companies in the both the synergies and efficiencies of its portfolio companies in the LatAmLatAm healthcare and consumer sectors

MAC brings together MAC brings together

Capital, managerial Capital, managerial

expertise and novel expertise and novel

ideas to produce ideas to produce

sustainable returns sustainable returns

to its Limited to its Limited

partnerspartners

Novel ideasNovel ideas

ComplementaryComplementary TeamTeam

Sector experienceSector experience

TeamworkTeamwork

IntegrityIntegrity

TransparencyTransparency

ExcellenceExcellence

MeritocracyMeritocracy

Manhattan Manhattan Atlantic Atlantic CapitalCapital Fundraising StrategyFundraising Strategy

~50 % of total fund from local investors; ~50% from International investors

GIC, Singapore SWF, $60m investment Atlantic Pacific Capital, world largest independent fundraiser to fund

raise for MAC

Energy Investors Fund $1.7b Energy Investors Fund $1.7b ARC Financial Corp $1b Riverside Partners $561m International investor interest: GIC, IFC, Pantheon


Augusto Augusto GitiranaGitiranaPartner Partner Manhattan Manhattan Atlantic Atlantic Capital LLCCapital LLC

Vice President at Vice President at IntermedicaIntermedica GroupGroup Executive Director at Brazil Foods (BRF) Executive Director at Brazil Foods (BRF) CEO at Memorial Hospital Sao Jose CEO at Memorial Hospital Sao Jose

Partners ProfilesPartners Profiles

CEO at Memorial Hospital Sao Jose CEO at Memorial Hospital Sao Jose CEO at Martins Group CEO at Martins Group Education Education University of University of PetrobrasPetrobras

-- Master of Petroleum EngineeringMaster of Petroleum Engineering

Federal University of Federal University of PernambucoPernambuco-- BS Mechanical EngineeringBS Mechanical Engineering


Victor SerraVictor SerraPartner Partner Manhattan Manhattan Atlantic Atlantic Capital LLCCapital LLC

CEO at CEO at ScalinaScalina /Carlyle / /Carlyle / BoticarioBoticario Retail chain with R$500m sales, 5,100 employees Retail chain with R$500m sales, 5,100 employees

Vice President at WalVice President at Wal--Mart Mart LatAmLatAm


Consumer Retail with R$1.7b sales, 8,500 employeesConsumer Retail with R$1.7b sales, 8,500 employees

Education Education

University of University of Chicago Booth School of BusinessChicago Booth School of Business-- Financial ManagementFinancial Management

Harvard Business School Harvard Business School -- General Management ProgramGeneral Management Program

University of California Los Angeles University of California Los Angeles -- Master of Business AdministrationMaster of Business Administration

Manhattan Manhattan Atlantic Atlantic CapitalCapital Partners ProfilesPartners Profiles

Luis Fernando VelascoLuis Fernando VelascoPartner Partner Manhattan Atlantic Capital LLCManhattan Atlantic Capital LLC

CFOCFO-- Philips Healthcare Philips Healthcare LtdaLtda LatAmLatAm CFOCFO--ESAB ESAB LatAmLatAm, worlds largest producer of standard , worlds largest producer of standard

welding equipment and consumables welding equipment and consumables

Audit &Corporate Finance Manager Audit &Corporate Finance Manager Arthur AndersenArthur AndersenEducationEducation

IMD(International Institute for Management Development IMD(International Institute for Management Development Executive EducationExecutive Education NorthwesternNorthwestern UniversityUniversity-- Kellogg School of Management Kellogg School of Management Advanced Executive ProgramAdvanced Executive Program FundacaoFundacao GetulioGetulio VargasVargas--Master of Business Master of Business AdminstrationAdminstration


Byron Byron WilsonWilsonPartner Partner Manhattan Manhattan Atlantic Atlantic Capital LLCCapital LLC

Vice President of Vice President of ClairfieldClairfield InternationalInternational Healthcare Investment Banking Healthcare Investment Banking

Director at Putnam Private EquityDirector at Putnam Private Equity


Director at Putnam Private EquityDirector at Putnam Private Equity

Healthcare private equity & venture capitalHealthcare private equity & venture capital

Education Education

University of CambridgeUniversity of Cambridge-- Master of Business AdministrationMaster of Business Administration

University of Michigan University of Michigan -- Master of Public AdministrationMaster of Public Administration-- EconomicsEconomics

The Johns Hopkins University The Johns Hopkins University -- MS Strategic MarketingMS Strategic Marketing

Manhattan Manhattan Atlantic Atlantic CapitalCapital MACS COMPETITIVE ADVANTAGEMACS COMPETITIVE ADVANTAGE

Return DriverReturn Driver Source of profitSource of profit Skill RequiredSkill Required

ArbitrageArbitragePricing multiple differential Pricing multiple differential between private market and between private market and public/M&A marketpublic/M&A market

Investment or Merchant Investment or Merchant Banking ConsultancyBanking Consultancy

LeverageLeverageLeverage a company with Leverage a company with stable earningsstable earnings

Investment BankingInvestment Banking

Increase earnings throughIncrease earnings through Corporate Operations, Corporate Operations, Earnings growthEarnings growth

Increase earnings throughIncrease earnings throughexpansion or acquisitionexpansion or acquisition

Corporate Operations, Corporate Operations, Entrepreneurial, ConsultingEntrepreneurial, Consulting

Margin expansionMargin expansion

Increased profits viaIncreased profits viaimproved efficiency orimproved efficiency orshifting product to highershifting product to highermargin nichemargin niche


Transparency &Transparency &

GovernanceGovernance

Earnings attract a higher Earnings attract a higher price, as buyers feel more price, as buyers feel more informed and protectedinformed and protected


Multiple expansion Multiple expansion

due to growth or due to growth or

ProfitProfit

Earnings of company attractEarnings of company attracta higher P/E,EBITDAa higher P/E,EBITDAmultiplemultiple

Private Equity Private Equity acquireacquirebased on what you can sellbased on what you can sell

Manhattan Manhattan Atlantic Atlantic CapitalCapital INVESTMENT APPROACHINVESTMENT APPROACH

Deal SourcingDeal Sourcing Risk AnalysisRisk AnalysisInvestment Investment

CriteriaCriteriaStructuringStructuring

Closing Closing Strategic Strategic Due DiligenceDue Diligence

Healthcare Healthcare assetsassets$15m $15m to to $70m$70mSales; 5 Sales; 5 yrsyrsoperations.operations.

Healthcare Healthcare ExecutivesExecutives

Investment BanksInvestment Banks

AccountantsAccountants

Combines all Combines all aspects of aspects of transaction to transaction to identify default identify default risks and risks and

DemandDemandassessmentassessment

CustomerCustomerassessmentassessment

GP aims to GP aims to maximise equity maximise equity return while return while providing providing sufficient debt sufficient debt

Signing all Signing all documents documents

operations.operations.

Operations Operations ImprovementsImprovements

Product Product innovationinnovation

BroadeningBroadeningDistributionDistribution

Strengthening Strengthening customer customer communicationcommunication

AccountantsAccountants

Own networkOwn network

risks and risks and recovery rates.recovery rates.

assessmentassessment

CompetitionCompetitionassessmentassessment

ManagementManagementassessmentassessment

RegulatoryRegulatoryassessmentassessment

sufficient debt sufficient debt protection.protection.

Manhattan Manhattan Atlantic Atlantic CapitalCapital WhyWhy LatAmLatAm HC & ConsumerHC & Consumer

Better exit opportunities as LatAm indices are skewed towards financials and mining

Manhattan Manhattan Atlantic Atlantic CapitalCapital WhyWhy LatAmLatAm HC & ConsumerHC & Consumer

570m total population with 50m more people to be added to middle class in next 7 years

High GDP and GDP per capita growth rates LatAm Private equity investment as a percentage of GDP is lower than

that of other regionsthat of other regions


2 Examples to be considered more closely:

Dental Insurance and Service

Opportunities Opportunities HC & ConsumerHC & Consumer

Consumer



Dental Dental InsuranceInsurance and and ServiceService

Opportunities Opportunities HC & ConsumerHC & Consumer

Consumer

Manhattan Manhattan Atlantic Atlantic CapitalCapital Dental Market Evolution & SizeDental Market Evolution & Size

2010 13.6million members, Dental plan members for 2011 and 2012 are expected to be 16.48million and 18.8million respectively

Dental Insurance Sales GrowthDental Insurance Sales Growth

R$1.3b in 2009; this represents 2 per cent of Brazilian Healthcare plans industry

0202 0404 0606 0808 1010

19% 19% CAGRCAGR

Manhattan Manhattan Atlantic Atlantic CapitalCapital Key Growth DriversKey Growth Drivers

Imbalance between the supply and demand of services

The lack of a public service alternativeThe lack of a public service alternative

The growing inclusion of dental plans in the benefits

packages of corporations

The opportunities created by the growing interest from new distribution channels

Evolving regulations

Brazils growing middle class


Dental Cost Structure v Health Dental Cost Structure v Health PlansPlans

Source: OdontoPrev

Manhattan Manhattan Atlantic Atlantic CapitalCapital Key PlayersKey Players

Strategy

Expansion through cross selling

Sul AmericaSul America

Largest Brazilian dental provider; 5.5 million members; FY2011sales R$793m

Increase dental members through increased corp. participation; 70% growth from BradescoIncrease dental plans members by employing sales teams and selective acquisitions

OdontoprevOdontoprev

Tempo AssistTempo AssistBrazilian dental provider; 833,000 members; FY11 Sales R$71.5m

Developed monitoring system to better understand consumer behaviourExpansion through new services distribution channels such as retail stores, banks etc

Sul AmericaSul AmericaBrazilian dental provider; 246,000 members; FY2009 sales R$1.325b (not only dental)

Strategy

Increasing its presence in the underserved North and N. Eastern Brazil through acquisitionsExpansion through cross selling

Strategy

Offer low cost dental premiums at high quality; 30-35% come from non cross sell

Manhattan Manhattan Atlantic Atlantic CapitalCapital Consolidation Pays OffConsolidation Pays Off

OdontoPrevs consolidation has grown from 224,000 members in 1999 to 4.5 million members in 2010.17% E Membership increase from 2011 to 2012


OdontoPrevs adjusted EBITDA has experienced a CAGR of 23.9 per cent from 2002 to 2008.


Since its IPO in 2006, OdontoPrev has garnered a shareholder return of 250 per cent versus Bovespas 73 per cent over the same period. Factoring in share buybacks and dividends as well as other shareholder remuneration schemes, OdontoPrevs total shareholder return to its shareholders from 2006 to 2010 was 307 per cent


Consolidation Pays OffConsolidation Pays Off

Manhattan Manhattan Atlantic Atlantic CapitalCapital OpportunityOpportunity

For 2011, 9 per cent Brazilian penetration rate v 55 per cent U.S. penetration rate;

Expected to reach 21.7% in 2022

19 per cent CAGR from 2002 to 2010

64 per cent of Brazilian dental plans holders live in South East region

Room for consolidation 451 dental insurers as of June 201063.7 %63.7 %

SouthSouth North North EastEast Sao PauloSao Paulo South South EastEast

------------

------------

------------

9.3%9.3%

17.4 %17.4 %

42 %42 %

55

77

11

33

Po

pu

lati

on

of

Mil

lion

sP

op

ula

tio

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f M

illio

ns


OpportunityOpportunity

Manhattan Manhattan Atlantic Atlantic CapitalCapital Potential TargetsPotential Targets

Phosphorus is one of the largest Brazilian pure play dental insurance companies

Sales FY2008 R$21m; Sales FY2009 R$43m; 105%YOY increase; Sales FY2010 R$73.1m; Sales FY2011 R$64.9m

EBITDA Margin FY2010 9.5%; FY2011 10.7%EBITDA Margin FY2010 9.5%; FY2011 10.7%Expected to 650,000 members in 2010 and 1million members in 2012Its focus is small to medium sized companies


Thallium is a Bovespa listed healthcare company comprised of specialized assistance services, home care and dental plans units

Sales FY2011 R$74; Sales FY2012 R$77m; EBITDA Margin FY2011 4.8%; FY2012 4.3%Divestiture of dental plans unit from parent company Divestiture of dental plans unit from parent company Its focus is corporate clients


Groundwork for GrowthGroundwork for GrowthStrategyStrategy

Expansion of Phosphorus into Expansion of Phosphorus into underserved underserved NE, NE, S S regions via regions via cross sellingcross selling

Establish annual budgetEstablish annual budget

Perform strategic due diligencePerform strategic due diligenceMake Phosphorus one of the top Make Phosphorus one of the top three Brazilian dental providers by three Brazilian dental providers by sales via consolidationsales via consolidation

Growth potential is evidenced by Growth potential is evidenced by 63.7% concentration in 63.7% concentration in SESE

Evaluate various means of value Evaluate various means of value creationcreation

Perform strategic due diligencePerform strategic due diligence

Optimize working capital by focusing Optimize working capital by focusing on noncash itemson noncash items

Standardize back office systemsStandardize back office systems


Growth & ConsolidationGrowth & Consolidation

Target fast growing SME Target fast growing SME segmentssegments

Use bank platforms to cross sell Use bank platforms to cross sell dental insurancedental insurance

Target clinics, hospitals and Target clinics, hospitals and

Margin ExpansionMargin Expansion

Implement ABC system to assign Implement ABC system to assign costs to various departmentscosts to various departments

Align executive compensation Align executive compensation with with EBITDA margin EBITDA margin expansionexpansion

Target clinics, hospitals and Target clinics, hospitals and dentistsdentists

Embark on Embark on NE NE & S dental & S dental insurance acquisitionsinsurance acquisitions

Form team to integrate acquired Form team to integrate acquired dental targets and implement dental targets and implement organic growth between organic growth between acquisitionsacquisitions

Reduce interest payments by Reduce interest payments by switching from unsecured debt to switching from unsecured debt to secured debtsecured debt

Assess price elasticity of dental Assess price elasticity of dental premiums (R$20 per month)premiums (R$20 per month)

Shed or support further Shed or support further geographic or service or geographic or service or distribution expansiondistribution expansion

With scale, renegotiate with With scale, renegotiate with partnerships and third party partnerships and third party supplierssuppliers

Standardize monitoring and Standardize monitoring and reporting routinesreporting routines



Create an investor relations department to liaise with institutional investorsCreate an investor relations department to liaise with institutional investors

Comply with Bovespa financial reporting rulesComply with Bovespa financial reporting rulesComply with Bovespa financial reporting rulesComply with Bovespa financial reporting rules

Disclose ownership structureDisclose ownership structure

Publication of executive compensationPublication of executive compensation

Board and management structure and processBoard and management structure and process



Dental Insurance

OpportunitiesOpportunities HC & ConsumerHC & Consumer

ConsumerConsumer

Manhattan Manhattan Atlantic Atlantic CapitalCapital LatAmLatAm Consumer Consumer Market

$3.7trl $3.7trl LatAmLatAm household consumer buying power household consumer buying power

Long term growth rate ~ 10 per cent CAGRLong term growth rate ~ 10 per cent CAGR

Manhattan Manhattan Atlantic Atlantic CapitalCapital Key Growth DriversKey Growth Drivers

Burgeoning LatAm middle class

Access to creditAccess to credit

LatAm housing demand outstrips supply

LatAm employment is consistently high

Increase in real house hold incomes

Uneven per capita LatAm consumption: per capita consumption of the average Brazilian is 11 times that of the average Mexicans

Stable inflation

Manhattan Manhattan Atlantic Atlantic CapitalCapital Potential TargetPotential Target

Takino is a leading Brazilian food company that produces sauces, condiments and beverages

Sales FY2010 R$130m; Sales FY2011 R$138mEBITDA Margin FY2010 10%; FY2011 5.3%100% revenues are Brazilian, leaving room for LatAm exposure100% revenues are Brazilian, leaving room for LatAm exposureProduction process lends itself to primarily to tomato based products, affording further product diversification


Groundwork for GrowthGroundwork for GrowthStrategyStrategy

Expansion Expansion of of TakinoTakino into Mexico, into Mexico, Colombia Colombia etcetc via cross border via cross border acquisitions and/or joint venturesacquisitions and/or joint ventures

Establish Establish annual budgetannual budget

Update processing facility for selling Update processing facility for selling

Further consolidation of Brazilian Further consolidation of Brazilian condiments, sauces marketcondiments, sauces market

Update processing facility for selling Update processing facility for selling variety of productsvariety of products

Optimize working capital by focusing Optimize working capital by focusing on noncash itemson noncash items

Standardize back office Standardize back office systemssystems


Margin ExpansionMargin ExpansionGrowth & ConsolidationGrowth & Consolidation

Acquire larger processing plant Acquire larger processing plant with scale & cross sell abilitywith scale & cross sell ability

Increased purchasing power with Increased purchasing power with suppliers due to larger scalesuppliers due to larger scale

Align executive compensation with Align executive compensation with Acquire processing plant in wider Acquire processing plant in wider LatAmLatAm region to distribute to other region to distribute to other LatAmLatAm countriescountries

Align executive compensation with Align executive compensation with EBITDA margin improvementEBITDA margin improvement

Optimize working capital by focusing Optimize working capital by focusing on noncash on noncash itemsitems

Implement ABC system and assign Implement ABC system and assign costs to various departs for reviewcosts to various departs for review



Create an investor relations department to liaise with institutional investorsCreate an investor relations department to liaise with institutional investors

Comply with Bovespa financial reporting rulesComply with Bovespa financial reporting rulesComply with Bovespa financial reporting rulesComply with Bovespa financial reporting rules

Disclose ownership structureDisclose ownership structure

Publication of executive compensationPublication of executive compensation

Board and management structure and processBoard and management structure and process

Manhattan Manhattan Atlantic Atlantic CapitalCapital Risk MitigationRisk Mitigation

Stress testing under worse case scenariosSecuritization of receivablesSale lease back of real estateDiversified revenues streamsDiversified geographic presenceDiversified geographic presenceRigorous due diligence processDevils advocateNo more than 15% of AUM on one MAC portfolio company


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