Presentation Uhrig0807

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Recent Trends

in the Mergers & Acquisitions

and Private Equity Markets

August 31, 2007

Charles Uhrig

Managing Director – Raymond James



Section 1

Recent Trends in the Mergers & Acquisitions Market



3

Mergers & Acquisitions Overview

Thru 6/30/07, domestic M&A activity was occurring at a record pace / annualized at ~$1.8 trillionfor 2007

Over $400 billion in bank debt / high-yield backlog is currently causing “digestion” problems

Driven by increased levels of both strategic and financial buyer interest

Key drivers include:

– Availability of higher levels of debt

– Availability of lower cost debt

– Healthy corporate balance sheets

– Activist investor focus on increased profitability and growth

– Dramatic growth in number and size of private equity firms

– Increase in acquisitions in U.S. by non U.S. companies




4


Domestic M&Aactivity hasreboundedstrongly overthe 2002-2006period.

M&A Deal Volume and Number of Transactions(Figures in $ Billions)

*Source: Securities Data Corporation. 2007 YTD is as of 6/30/07.

0

200

400

600

800

1,000

1,200

1,400

1,600

1 9 9 0 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7

YTD

Value ($B)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Transactions

Value of Transactions Number of Transactions



5


Quarterlydomestic M&Aactivity hasincreasedconsistentlysince 2002.

M&A Deal Volume and Number of Transactions(Figures in $ Billions)

*Source: Securities Data Corporation.

0

100

200

300

400

500

600

3/02 6/02 9/02 12/02 3/03 6/03 9/03 12/03 3/04 6/04 9/04 12/04 3/05 6/05 9/05 12/05 3/06 6/06 9/06 12/06 3/07 6/07

Value ($B)

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2,750

3,000

Transactions




6

Common Reasons Given for M&A Activity

Gain economies of scale

Cross selling opportunities

Increased market share / Pricing power

Cost rationalization opportunities / Synergies

Geographic expansion

Vertical integration / Control of supply chain

Diversification




7


The followinggraphiccompares themedianhistoricalacquisitionpurchase priceto EBITDA

multiples paid byfinancial andstrategic buyers.

Trends in Purchase Price to EBITDA Multiples

*Source: Securities Data Corporation. 2007 YTD is as of 6/30/07.

5.0x

6.0x

7.0x

8.0x

9.0x

10.0x

11.0x

12.0x

13.0x

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

YTD

Financial Buyers Strategic Buyers



8

Average Debt Multiples

Average debt multiples have increased consistently since 2001.


*Source: Standard & Poors LCD.

Average Debt Multiples of Highly Leveraged Loans

2.6x 2.7x 2.8x3.3x

3.6x 3.6x3.1x 3.2x 3.1x

2.5x 2.5x 2.7x3.0x

3.6x4.0x 4.1x

5.9x

2.4x2.5x 2.5x

1.9x

2.3x 2.1x

2.0x1.5x

1.2x

1.2x

1.6x1.7x

1.9x

1.8x

1.7x1.8x

1.5x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Q1 07 Q2 07

D

e b t M u l t i p l e

Bank Debt / EBITDA Non-Bank Debt / EBITDA



9

Florida M&A Deal Volume and Number of Transactions(Figures in $ Billions)

Middle market($10-$250million) M&Atransactions in

Florida haveincreased since2001, but not asdramatically asthe overall M&Amarket.

*Source: SDC


1.9

2.7 2.62.8

2.6

4.2

5.6

3.6

7.2

5.2

9.6 9.6

5.6

5.9

2.3 2.2

2.1

2.3 2.9

4.8

6.6

8.9

10.1

7.4

3.8

4.9

0

2

4

6

8

10

12

1 9 8 2 1 9 8 3 1 9 8 4 1 9 8 5 1 9 8 6 1 9 8 7 1 9 8 8 1 9 8 9 1 9 9 0 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 YTD

2 0 0 7

Value ($B)

0

20

40

60

80

100

120

140

160

180

200

Transactions




10

Venture Capital: IPO Market in the U.S.

13 Venture Capital-backed IPOs in 1Q 07

– Same as the year-ago quarter

56 Venture Capital-backed IPOS over the trailing twelve months

– 47 IPOs in previous 12 months

Venture-backed M&A was $9.4 BB in 1Q 07

– Compared to $8.4 BB in 1Q 06

Venture-backed M&A was $32.6 BB over ther trailing twelve months

– Compared to $31.2 BB in previous 12 months




11

U.S. Venture Backed Liquidity Events


Percentage Breakdown of Venture Backed Liquidity Events

0%

20%

40%

60%

80%

100%

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1H07

IPOs M&A



12

Key Drivers of U.S. M&A Activity: Shareholders and Directors

Institutional Investors

– More vocal about their strategies to maximize shareholder value, including potential

restructurings or divestitures

– Proposing that directors be more closely aligned with shareholders and more responsive to

their views

– More willing to vote down management proposals

Board of Directors

– Boards realize that for the courts to grant deference to their decisions, they must act with

independence and integrity

– Directors are more active in the overall business review process

– Directors are more involved in demanding value-enhancing activity and review M&A

proposals more closely




13

Practical Considerations for Acquirers

Institutional shareholders are growth-driven and will reward strategic decisions that are value-accretive, without significantly decreasing Free Cash Flow per Share.

M&A should be a critical component of most companies’ business strategy and an important

contributor to growth targets.

– Seek growth areas that align with strategic focus and competencies

– Divest where necessary to increase focus on core business

Companies should promote internal processes that facilitate capitalism on M&A opportunities.




14

Practical Considerations for Sellers

Focus first on creating value as a stand-alone business

– Do not assume sale is the optimal or only path to liquidity

– Robust businesses garner greater value as acquirers value complete teams and the

availability of an IPO alternative creates a valuation benchmark– Patience is often the key

Key to extracting a premium valuation in a sale of the business is to create competition – must

bring multiple parties to the table.

– Remember that nobody gets married on the first date

– Alternative transactions can be just as effective in creating pressure

Always have sufficient capital and an “escape plan” if a transaction is not successful

Understate and over-deliver on promises

–

Credibility lost cannot be regained– Clean the cupboards; disclose issues and mitigate them

People are important; establish relationships of trust




15

Major Causes of “Failed” Deals

Poor assessment of strategic fit

Lack of ability to manage acquired operations

– Distract from core business

Insufficient due diligence

– Undiscovered financial problems

– Customer/technology issues

Loss of key personnel

Poor analysis of financial consequences of a transaction

Poor cultural fit




16

Where is the M&A Market Headed from Here?

The next six to twelve months should see moderation in M&A activity from recent levels.Strategic buyers will still be active for the following reasons:

– Companies are realizing that they need to scale to ensure business model viability

– Companies are moving away from an internal/restructuring focus to an

external/growth/consolidation strategy

– “Corporate clarity” still a strong theme

– Most industries are only partially through the consolidation process

– Macroeconomic conditions continue to offer a favorable backdrop to M&A activity

– Relatively strong corporate balance sheets

Private Equity buyers are likely to reduce their levels of activity due to:

– Increased cost of debt

– Reduced availability of debt

– Need to close current backlogs

– Potential tax law changes could increase Private Equity hurdle rates




Section 2

Recent Trends in the Private Equity Market



18

Private Equity Environment – 2006 Review

Globally, 612 new funds held a final close during 2006

Raised a record $401 billion in aggregate of new commitments far surpassing the previous record

total of $311 billion set in 2005

311 new U.S. funds comprised 63% of the total commitments ($252 billion)

Europe comprised 27% of all capital raised through 168 funds ($108 billion)

133 funds in the rest of the world raised $41 billion in private equity capital

The ever increasing amount of committed capital has turned the focus of private equity firms tolarge scale deals and has set the stage for the largest deal volume in the history of the industry.




19

Private Equity Environment – Fundraising

U.S. private equity firms have raised $137 billion in 199 funds through the first half of 2007, a 42% increaseover the first half of 2006, and on pace to surpass the record total $252 billion raised in 2006.


U.S. Private Equity Annual Committed Capital

$0.6 $1.5 $3.5 $3.0 $5.2$16.1 $12.8$11.9 $9.5 $7.5 $12.6 $17.8

$24.6$32.8 $37.2

$52.4

$79.4$73.0

$89.6

$65.0

$45.7$38.8

$55.0

$173.5

$252.0

$137.0

$0

$50

$100

$150

$200

$250

$300

1 9 8 2

1 9 8 3

1 9 8 4

1 9 8 5

1 9 8 6

1 9 8 7

1 9 8 8

1 9 8 9

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

1 H 0 7

Source: Venture Economics, The Private Equity Analyst, Buyouts, Private Equity Online and Dow Jones

( $

i n

b i l l i o n s )

1990 5 Buyout firms > $1 Billion

2006 250+ Buyout firms with > $1 Billion



20

Private Equity Overview

Equity securities of companies that are not publicly traded

An umbrella term whose major categories include:

Venture capital

Mezzanine

Buyouts

Strategies include:

Geography (e.g. China)

Industry (e.g. Telecom)

Structure (e.g. Mezzanine)

Situation (e.g. Distressed securities)

Investors include:

Qualified individuals

Pension funds

Investment funds

Corporations




21

Private Equity Overview


Illiquid

High fees (2% annual fee and 20-25% of profits

plus transaction fees typical)

Difficult to mark to market

Rely on leverage to enhance returns

Historically attractive returns

Private – not subject to market gyrations or

distractions

Management / Board of Director / Owneralignment

RisksBenefits



22

Private Equity Environment – Historical Returns


Source: Thomson Financial / National Venture Capital Association

U.S. Private Equity Performance Index

9.26.64.28.210.8S&P

10.16.44.36.24.7Nasdaq

13.911.07.512.723.3All Private Equity12.98.510.414.624.5Buyout

8.56.14.15.012.6Mezzanine

16.6%20.3%1.0%9.1%16.4%Venture

20 Year10 Year5 Year3 Year1 YearFund Type



23

Private Equity Environment – Historical Returns

The private equity market has consistently outperformed the S&P 500 over the last 10 years

However, private equity returns tend to trend with the overall market environment


Source: Thomson Financial Note: Returns calculated based on cumulative return over five years.

LBO Top Quartile Returns Versus S&P Returns

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Top Quartile Returns S&P Weighted Returns



24

Private Equity Environment – 2006 Review

Large scale buyouts and an unprecedented volume of private equity transactions defined 2006, surpassing, intransaction value, all U.S. deals announced in 2003, 2004, 2005 in aggregate.

– According to Dealogic, during 2006, private equity firms announced acquisitions of U.S. companies for a totalvalue of approximately $563 billion.

The private equity market continues to target large scale transactions in the United States and abroad, in order to

invest ever increasing amounts of capital at an increasingly rapid pace.

2006 Large Scale Private Equity Transactions Announced or Closed


$39.0

33.5

26.8

25.6

21.6

17.1

16.6

13.9

11.5

11.2

10.99.0

8.7

8.3

5.9

5.5

5.1

Blackstone

Bain, KKR, ML PE

Bain, TH Lee

Apollo, TPG

GSCP, Carlyle, Riverstone, Management

SuperValu, CVS, Ceberus

Blackstone, Carlyle, Permira, TPG

MDP, Providence, TPG, TH Lee

Blackstone, Carlyle, KKR, TH Lee, H&F, Alpinvest

KKR, Silver Lake, Alpinvest, Bain, Apax

Blackstone, GS, KKR, TPGApollo

Allco, Macquarie, Onex, TPG

GSPC, TH Lee, JPMorgan Partners, Warburg, Management

Bain, Blackstone

Carlyle

KKR, GSCP

Equity Office Properties Trust

HCA Inc

Clear Channel Communications Inc

Harrah’s Entertainment Inc

Kinder Morgan Inc

Albertsons Inc

Freescale Semiconductor Inc

Univision Communications Inc

VNU NV

Philips Semiconductors

BiometRealogy

Qantas Airline

ARAMARK Corp

Michaels Stores Inc

Advanced Semiconductor

Kion Group

Transaction Value

($bn)Sponsors InvolvedTarget Name



25

Private Equity Environment – 2007 Update


$26.5

6.0

46.1

5.6

15.9

10.3

6.48.9

8.1

7.3

27.8

8.1

7.4

7.8

7.1

8.2

25.6

30.8

8.5

6.0

7.4

44.2

9.2

Blackstone

Carlyle

Madison Dearborn, Providence

Onex, Carlyle

BC Partners

Bain Capital, CD&R, Carlyle

Madison Dearborn PartnersFortress, Centerbridge

Silver Lake, TPG

Madison Dearborn Partners

GS, TPG

Blackstone

Cerberus

Apax, OMERS Capital Partners

Clayton Dubilier & Rice, KKR

GS, KKR

BoA Equity Partners, FFL, JC Flowers

KKR

Cerberus

Clayton Dubilier & Rice

KKR

Citigroup, GSPC, KKR, LEH PE, MS PE, TPG

Farallon Capital, Simon Property Group

Hilton Hotels

Manor Care

BCE

Allison transmission

Intelesat

Home Depot Supply

Nuween InvestmentsPenn National Gaming

Avaya

CDW

Alltel

Alliance Data Systems

The Chrysler Group

Thomson Learning

U.S. Foodservice

Herman International Industries

SLM

First Data

Affiliated Computer Services

ServieMaster

Dollar General Corp

TXU

Mills Corp.

Transaction Value($bn)Sponsors InvolvedTarget Name

The private equity market in 2007 continues to deploy capital at unprecedented levels

Transaction sizes have continued to increase, fueled by aggressive leverage packages that have been maintainedthrough the first half of 2007

– Many of these transactions have covenant-lite structures with creative debt features such as the “toggle” note

– The third quarter of 2007 will be a deafening moment for private equity as debt buyers will be inundated withpaper from these large scale transactions



26

Historical Buyout Dollar Volume


Value of Completed U.S. Transactions

$28.9 $33.0

$56.7 $52.5$40.5

$19.5 $21.9

$47.0

$93.9

$130.3

$233.0

$248.3

$393.5

$-

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

$350.0

$400.0

$450.0

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1H07 LTM

Source: Standard & Poor’s

( $

i n

b i l l i o n s )



27

Buyout Volume Share of M&A Activity


Est. Global Private Equity M&A Deal Volume ($bn)

$170.0 $197.0

$120.0$158.0

$203.0

$315.0

$616.0

$985.0

$1,096.0

$0

$200

$400

$600

$800

$1,000

$1,200

1999 2000 2001 2002 2003 2004 2005 2006 2007 Annualized

Private Equity as a % of Total Global M&A Deal Volume

4%5%

6%

12% 13%

14%

20%

24% 24%

0%

5%

10%

15%

20%

25%

30%

1999 2000 2001 2002 2003 2004 2005 2006 2007 YTD

Source: Thomson Financial



28

Private Equity Environment – Average Transaction Size

The size of transactions has increased significantly since 2001, as private equity funds seek to

deploy large sums of capital in larger scale opportunities


Average U.S. LBO Size by Total Sources

$516.0

$361.0 $403.0 $367.0 $351.0 $389.0$540.0

$716.0 $706.0

$972.0

$1,309.0

$2,407.8

$-

$500.0

$1,000.0

$1,500.0

$2,000.0

$2,500.0

$3,000.0

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1H07

Source: S&P

( $ i n m i

l l i o n s )



29

Private Equity Environment – Public to Private Transactions

As the private equity industry has evolved to encompass a larger portion of the total M&A market,

and private equity professionals have raised more capital, the access to public targets hasincreased.

Furthermore, activist hedge funds and stringent corporate governance issues have contributed to

take-private activity.


Source: S&P

( $

i n

b i l l i o n s )

Public to Private Activity

$0

$10

$20

$30

$40

$50

$60

$70

$80

1 Q 9 8

2 Q 9 8

3 Q 9 8

4 Q 9 8

1 Q 9 9

2 Q 9 9

3 Q 9 9

4 Q 9 9

1 Q 0 0

2 Q 0 0

3 Q 0 0

4 Q 0 0

1 Q 0 1

2 Q 0 1

3 Q 0 1

4 Q 0 1

1 Q 0 2

2 Q 0 2

3 Q 0 2

4 Q 0 2

1 Q 0 3

2 Q 0 3

3 Q 0 3

4 Q 0 3

1 Q 0 4

2 Q 0 4

3 Q 0 4

4 Q 0 4

1 Q 0 5

2 Q 0 5

3 Q 0 5

4 Q 0 5

1 Q 0 6

2 Q 0 6

3 Q 0 6

4 Q 0 6

1 Q 0 7

2 Q 0 7



30

Public Valuation Multiples Have Moderated Over Time…


Source: Portfolio Management Data, Morgan Markets, FactSet Note: (1) Average S&P 500 forward PE throughout the year (2) Average S&P 500 EV/LTM EBITDA throughout the year

Average S&P 500 P/E and EV/LTM EBITDA Multiples

24.0x

29.9x28.1x

24.5x

21.1x

18.5x

16.1x 15.9x

12.9x

11.0x 11.5x 11.2x 11.2x10.3x

9.7x 10.0x

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

35.0x

2000 2001 2002 2003 2004 2005 2006 1H07

S&P 500 P/E S&P 500 EV/LTM EBITDA1 2



31

But Private Purchase Multiples Have Expanded


Source: Standard & Poor’s Note: Multiples exclude fees

Average Acquisiton Multiple (Purchase Price/EBITDA) for U.S. Transactions

6.7x

7.5x

7.9x

6.8x

6.4x6.1x

6.5x6.7x

7.1x

8.1x

8.6x

10.0x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1H07



32

Leverage Multiples Increasing


Source: Standard & Poor’s Note: (1) Excludes Media and Telecom loans

Average Total Debt/EBITDA for U.S. Transactions

5.0x4.9x

4.3x4.1x

3.5x

3.9x4.1x

4.6x

5.0x5.1x

6.2x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1H07

(1)



33

Equity Contribution Percentages

Consistent with the receptivity of higher leverage levels by the financing markets, private equity firms

have been decreasing the amount of equity contribution, further enhancing returns.



Equity/Total Enterprise Value for U.S Transactions

22.9%

30.0%31.7%

35.7%

37.8%

40.6% 40.0% 39.5%

35.1%

32.1%31.1%

30.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Q207



34

Credit Quality of LBOs

Attractive capital markets have supported lower-rated and more highly leveraged buyouts

– The strength of the high yield market allowed sponsors to “push the envelope” on leverage ratios

– A significant portion of LBOs have slipped into the “CCC” rating category


Average Leverage of High Yield LBOs

4.7x 4.8x 4.7x 4.6x

5.3x5.5x

6.1x

6.7x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

2000 2001 2002 2003 2004 2005 2006 YTD

2007

(1) (2)

Percent of High Yield LBOs Rated CCC

0.0% 0.0% 0.0%

9.6%

24.1%

41.3%

46.1%

84.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

2000 2001 2002 2003 2004 2005 2006 YTD

2007

(2)

Source: Lehman Brothers High Yield Capital Markets (1) Includes Media and Telecom loans. Excludes LBOs that did not issue high yield.(2) YTD 2007 as of May 21, 2007.



35

Credit Quality of High Yield New Issues


NR

2%

B

58%

BB

20%

CCC

20%

NR

2%

B

68%

BB

21%

CCC

9%

NR

2%

B

58%

BB

19%

CCC

21%

NR

3%

B

49%

BB

24%

CCC

24%

NR

3%

B

43%

CCC

31%

BB

23%

New Issuer Ratings Breakdown (1)

Source: Lehman Brothers High Yield Capital Markets (1) YTD 2007 as of May 21, 2007.

CCC or Lower New Issues Volume ($ in millions)

$2,105.0

$12,962.0

$30,928.0

$23,368.0

$32,597.0$33,756.0

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

2002 2003 2004 2005 2006 YTD 2007

CCC or Lower New Issues Volume as a % of Total

3%

9%

20%21%

24%

33%

0%

5%

10%

15%

20%

25%

30%

35%

2002 2003 2004 2005 2006 YTD 2007

2003 2004 2005 2006 2007 YTD



36

High Yield Spreads


Long-term average(1987-YTD 07) =

541bp

Cheap Money

Spread between lower credit bonds and U.S Treasuries, 1987-2007, in basis points



37

Historical High Yield Outstanding vs. Default Rate


Total Value of All High Yield Outstanding vs. Default Rate

$352.5

$452.1

$571.5

$656.6

$762.6

$955.0

$881.6

$947.1$950.8

$913.2$918.1

$629.4

1.6%1.4%

1.7%

4.0%

4.7%

8.3%

7.3%

3.0%

1.0%

2.6%

1.6%

1.8%

$0.0

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

$700.0

$800.0

$900.0

$1,000.0

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Q207

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Source: JPMorgan High Yield Capital Markets Note: JPMorgan Domestic High Yield Default Rate

( $

i n

b i l l i o n s )



38

Acquisition & Leverage Multiples vs. Default Rate


Source: Standard & Poor’s Note: JPMorgan Domestic High Yield Default Rate. Acquisition and Leverage Multiples are Q3 2006 and Default Rate is LTM 9/3/06.(1) Excludes Media and Telecom loans

Average Purchase Price/EBITDA and Total Debt/EBITDA for U.S. Transactions vs. Default Rate

7.5x7.9x

6.8x6.4x

6.1x6.5x

6.7x7.1x

8.1x

8.6x

10.0x

5.0x 4.9x

4.3x4.1x

3.5x3.9x

4.1x

4.6x5.0x 5.1x

6.2x

1.4%1.7%

4.0%

4.7%

8.3%

7.3%

1.0%

2.6%

1.8%1.6%

3.0%

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Q207

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

Purchase Price/EBITDA DEBT/EBITDA Default Rate



39

The Beginning of the End of a Cycle

Banks providing equity “bridges”

Loans with no amortization

Interest rate “toggle”

“Covenant-lite” loans




40

Covenant-lite transactions and toggle notes may now be a thing of the past



Covenant-Lite Transaction Volume

$1.8 $3.1$0.3 $0.3 $- $- $0.5 $0.1

$2.4

$23.6

$96.6

$-

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

$90.0

$100.0

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 YTD

V o l u m e

( i n $ b i l l i o n s )

0%

5%

10%

15%

20%

25%

30%

35%

% o

f I n s t i t u t i o n a l V o l u m e

Covenant Lite Volume % of Institutional Volume



41

Backlash against Private Equity “Surge”

Press

Shareholders

Sellers

Regulators

Unions

Congress

Boards of Directors




42

Private Equity Environment – Purchase Premiums

Private equity transactions have come under increasing scrutiny as investors claim that premiums

are well below expectations. Private equity firms are being forced to defend themselves against

charges that their transactions rob public shareholders of the potential for higher value.


Source: Weil, Gotshal & Manges

Purchase Price Premium to Market

25%

16%

21% 21%

25%

10%

22%

20%

7%

0%

8%

0%

0%

5%

10%

15%

20%

25%

30%

$0.25bn-$0.5bn $0.5bn-$1bn $1bn-$5bn Over $5bn

( % P

r e m i u m )

1 Day Before Announcment 30 Day Average Before Announcement 52-Week high



43

Public Buyout Board Climate


Independent directors take control of process

Management increasingly perceived as having conflict of

interest

Management excluded from negotiations with P.E. firm

Merger agreements include

– Go shop provision and fiduciary out

– No right to match

– Breakup fee and corresponding reverse breakup fee

– No financing condition

– Limited or no material adverse change out

Exclusive negotiations with management and special

committee of the target board of directors

No announcement until executed definitive mergeragreement

Merger agreement includes:

– No shop provision / fiduciary out

– Breakup fee – 2 to 3% of transaction value

– Financing condition

– True material adverse change out

– Right to match competing offer

TodayPre 2006



44

Outlook

The cost of buyout financing is increasing as spreads widen and the buyer pool is reduced

The terms of financing will become more restrictive – but are really just returning to historical levels

The increased costs of financing mean Private Equity firms can’t hit targeted returns unless theypay lower prices

Sellers / investors will resist the lower purchase prices given the relatively recent higher

comparables

Private equity buyout volume will likely decrease in the short term

Strategic acquirer share – already at 75% - will likely increase due to healthy balance sheets, still

attractive financing terms and availability of cost and revenue synergies.




45

Possible Growth Outlets for Buyout Funds

Distressed debt

International buyouts

Significant minority investments

Add on private company acquisitions for existing portfolio companies




Section 3

Overview of Raymond James

O i f R d J



47

Full-service securities firm founded in 1962 and public since 1983 (“RJF” on NYSE)

Fiscal 2006 revenue in excess of $2.6 billion; net income over $200 million

Equity market cap in excess of $3.8 billion

Major presence in North America and Europe

– Over 5,200 financial advisors, with offices in all 50 states; 1.5 million accounts*

– Member of the Fortune 500. Ranked 11th among securities firms. (2007)

– 27 domestic and international investment banking and institutional sales offices*

– European operations in London, Paris, Geneva, Brussels, and Düsseldorf*

Client Assets of over $200 Billion

Managed Assets of over $36 Billion

Operates a Commercial Bank with Assets in excess of $3.5 Billion



*RJF data as of June 30, 2007.




48

Retail Branch, Institutional Sales and Investment Banking Locations Raymond Jameshas nearly 2,300offices coveringall 50 states andCanada.


Raymond James North American Locations

Raymond James U.S.Investment Banking

St. Petersburg, FLAtlanta, GA

Chicago, ILDallas, TX

Houston, TXNashville, TN

New York, NYPalo Alto, CA

Raymond James Retail Location

Raymond James Institutional Location




49

Opportunities with Raymond James

Over 200 University of Florida graduates work at Raymond James

Headquartered in St. Petersburg but numerous locations throughout the United States.

Selective areas of interest to business students include:

– Corporate Finance / Investment Banking

– Research

– Sales & Trading

– Asset Management

– Retail Brokerage

– Real Estate

– Commercial Banking





50

Raymond James Financial Stock Price Performance


'88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07

100

600

1,100

1,600

2,100

2,600

3,100

Indexed Price to 100 as of 24 Aug 878/24/1987 - 8/24/2007

Raymond James Financial Inc. S&P 500 Index NASDAQ Composite Index

RJF

+2944%

NASDAQ

+470%

S&P

+343%

Presentation Uhrig0807

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