1. M&A Mid-Market: What After The Credit Crunch? November 2007 7 th M&A Mid-Market Forum, Paris David Bernard Vice-President, Investment Banking & Private Equity david.bernard@thomson.com

2. 1 Has European M&A Activity Peaked? 24.7 % 16.8% 29.7% 25.2% 29.1% 20.1% 17.0% Announced M&A Transactions with European Target, Total Deal Value and Number of Deals, by Announcement Date 16.6% 16.7% 16.4% 18.5% 17.9%20.1% 16.6% Source: Thomson Financial

3. 2 The Credit Crunch Has Had An Impact on European M&A and Private Equity Activity Source: Thomson Financial Announced M&A Transactions with European Target, Total Deal Value and Number of Deals, by Announcement Date

4. 3 Debt Financing at a Standstill Source: Thomson Financial European Leveraged Syndicated Loans, Total Deal Value and Number of Issues European High-Yield Bond Issues, Total Deal Value and Number of Issues

5. 4 IPO Activity in Europe Has Slowed Down in Q3 2007 European IPO Activity Source: Thomson Financial

6. 5 European M&A Deal Volume Has Been Most Affected for Large Deals Total Deal Value by Deal Size, Announced M&A Transactions with a European Target Source: Thomson Financial

7. 6 Similarly, European Mega-Buyout Transactions Have Virtually Disappeared in the Last 3 Months Total Deal Value by Deal Size, Announced Leveraged Buyout Transactions with a European Target Source: Thomson Financial

8. 7 Global Fees Generated from LBOs Had Surpassed Private Equity Exit Fees in 2006 Source: Thomson Financial / Freeman & Co

9. 8 But Fees on PE-Backed Transactions Have Dried Up Post-Summer 07 Global Investment Banking Fees Generated for Private Equity Backed Transactions (M&A, Equity Issues, Bond Issues, Structured Finance, Syndicated Loans Issues) Source: Thomson Financial / Freeman & Co

10. 9 Listed Companies Remain Affordable On Average Evolution of P/E Ratios, European public equity markets Forward values based on aggregate mean broker estimates Source: Thomson Financial  P/E Ratios in the European stock market have been around 15 for the last 3 years  Brokers anticipate earnings to grow more rapidly that stock prices, leading to a target P/E of 11.3 in 3 years’ time

11. 10 And Acquisition Premia Have Stabilised at an Historically Low Level Source: Thomson Financial Average Price Premium (Offer vs. Price 4 Weeks Prior to Announcement) for European M&A Transactions

12. 11 Cash Is Still King – For How Long? Consideration Analysis for European M&A Transactions Source: Thomson Financial

13. 12 Conclusions  Mid-Market Activity Stable  Fundamentals Still Strong  The Right Deals Get Done  Less Competition for Strategic Buyers  Consolidation at Play in Many Sectors  Larger Players (Banks, PE) Coming Back to Mid-Market  Pressure on Fees?

14. 13 Thank You