Bringing Efficiency to an Inefficient Market

Source: S&P

Merger & Acquisition Advisory

Corporate Finance Advisory

Strategic Consulting

400 Southpointe Boulevard, Plaza I, Suite 440

Canonsburg, PA 15317 • Tel. 724-743-5800

Fax 724-743-5870 • www.strategicad.com

An Affiliate of BPU Investment Management, Inc. One Oxford Centre, 301 Grant Street, Suite 3300

Pittsburgh, PA 15219 • Tel. 412-288-9150 • Member FINRA, SIPC

2009 Third Quarter

REGIONAL AND SECTOR

M&A OVERVIEW

• PITTSBURGH REGION

• U.S. CONSUMER SECTOR

• U.S. INDUSTRIAL SECTOR

• U.S. MATERIALS SECTOR

Source: S&P

Closed Buyer/Investor Target

Transaction

Value ($MM) Buyer Type

07/01/2009 Allegany HealthCare Group LLC Allegany County Nursing Home and Rehabilitation Center 8.0 Private Co.

07/01/2009 Interstate Waste Services, Inc. (Highstar Waste Holding Corp.) Howell Trucking Company and Kight Sanitation N/A Private Co.

07/01/2009 ColdCypress LLC Red Square Systems Inc. N/A Private Co.

07/06/2009 DynaVox Technologies, LLC Blink Tw ice, Inc. N/A Private Co.

07/08/2009 Reserve Capital Management Commercial Alloys Corporation N/A Private Co.

07/08/2009 Imperial Zinc Corp. Commercial Alloys Corporation N/A Private Co.

07/10/2009 Kirkland Capital Partners Northwest Mailing Service, Inc. N/A Private Equity

07/21/2009 Litigation Solutions LLC (MCMC LLC) RSight Investigations Incorporation N/A Private Co.

07/23/2009 Koppers Holdings Inc. (NYSE: KOP) Crosstie Pre-Plating Business and Related Assets (Coastal Timbers, Inc.) N/A Public Co.

08/03/2009 EnerSys (NYSE: ENS) Keystone Mountaineer Power Systems, Inc. N/A Public Co.

08/04/2009 RedZone Robotics, Inc. ICOMMM, Inc N/A Private Co.

08/05/2009 Guardian Alarm Company Of Michigan, Inc. Barco Security Services Inc. N/A Private Co.

08/11/2009 Pinnacle Treatment Centers, Inc. Health Masters Inc. N/A Private Co.

08/14/2009 PNC Bank, National Association (PNC Financial Services Group Inc. (NYSE: PNC)) Dwelling House Savings and Loan Association N/A Public Co.

08/18/2009 Myers Industries Inc. (NYSE: MYE) Amerikan LLC (Florikan-E.S.A. Corp.) N/A Public Co.

08/23/2009 Mon-Vale Non-Acute Care Services, Inc. Kenric Manor, Inc. 1.3 Private Co.

08/26/2009 University of Pittsburgh Medical Center Beacon Hospital (Beacon Medical Group Ltd.) 34.75 Private Co.

08/31/2009 Lewis-Goetz & Company, Inc. International Gasket Company, Inc. (Leader Global Technologies, Inc.) N/A Private Co.

08/31/2009 Cleveland Clinic Home Care Services Inc. Medina Hospital N/A Private Co.

09/02/2009 I.D. Images, Inc. Concorde Labeling Systems, Inc. N/A Private Co.

09/02/2009 Election Systems & Software, Inc. Election Systems Business (Diebold Inc. (NYSE: DBD)) 5.0 Private Co.

09/08/2009 Paper Converting Machine Company, Inc. (Barry-Wehmiller Companies, Inc.) F.L. Smithe Machine Company, Inc. N/A Private Co.

09/08/2009 Cognizant Technology Solutions Corp. (NASD: CTSH) Pepperweed Advisors, LLC (Pepperweed Consulting, LLC) N/A Public Co.

09/14/2009 Theken Spine, LLC Innovative Spinal Technologies, Inc. 9.25 Private Co.

09/16/2009 Hunt Group Kabobs, Inc. (HJ Heinz Co. (NYSE: HNZ)) N/A Private Equity

09/16/2009 Google Inc. (NASD: GOOG) reCAPTCHA Inc. N/A Public Co.

09/22/2009 TeleTracking Technologies, Inc. RadarFind Corporation N/A Private Co.

09/23/2009 Investment Group LandAmerica Tax and Flood Services, Inc. (LandAmerica OneStop, Inc.) N/A Private Equity

09/24/2009 Xaloy, Inc. Spirex Corp. N/A Private Co.

09/29/2009 Atlas Energy, Inc. (NASD: ATLS) Atlas Energy Resources LLC 1,427.63 Public Co.

Notes:

Bold companies are local and parent companies are in parentheses (if available)

Local Areas include: Pittsburgh, Zanesville, Bradford, Erie, Johnstown, Altoona, Canton, Greensburg, New Castle, Akron, Steubenville, Youngstown, Cumberland, Oil CIty, Clarksburg and Wheeling

Source: S&P and Strategic Advisors

Either buyer, target, or seller must be local and transaction must have had a change in control

� Regional M&A volume decreased 55.2% from 67

deals in 3Q 2008 to 30 deals in 3Q 2009.

� Regional M&A median deal value decreased

61.9% from $22.6MM in 3Q 2008 to $8.6MM in

3Q 2009.

� Industrials (21.5%) and info technology (19.4%)

comprised a majority of the regional targets for

the first 3Qs of 2009.

� Private companies comprised 67% of buyers for

3Q 2009, relative to only 54% in 3Q 2008.

PPIITTTTSSBBUURRGGHH RREEGGIIOONNAALL 33QQ 22000099 MM&&AA TTRRAANNSSAACCTTIIOONNSS

3Q 2009 REGIONAL M&A TRANSACTIONS

3Q 2009 REGIONAL M&A STATISTICS

Business Services

4.3%

Consumer15.1%

Energy4.3%

Financials7.5%

Healthcare10.8%

Industrials21.5%

Info Tech19.4%

Materials

6.5%

Media & Publishing

6.5%

Prof Services

3.2%

Utilities

1.1%

Regional M&A Target Business Sector YTD 3Q09

0%

20%

40%

60%

80%

100%

3Q08 4Q08 1Q09 2Q09 3Q09

54% 47%70% 61% 67%

34% 42%

27%30% 23%

12% 10% 3% 9% 10%

Regional M&A Data by Buyer Type

Private Co. Public Co. Private Equity

67

59

3033

30$22.6

$64.1

$18.1

$7.0 $8.6

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

0

15

30

45

60

75

3Q08 4Q08 1Q09 2Q09 3Q09

Regional M&A Deal Volume and Value

Total Deals Median Deal Size (MM)

Source: S&P

INDUSTRIAL SECTOR

� 2Q 2009 vs. 3Q 2009 - Quarterly

o M&A deals decreased 18.4% from 174 to 142

o M&A median transaction value decreased 2.6% from

$9.5MM to $9.3MM

� 3Q 2008 vs. 3Q 2009 - Annually

o M&A deals decreased 54.0% from 309 to 142

o M&A median transaction value decreased 63.0%

from $25.0MM to $9.3MM

CONSUMER SECTOR

� 2Q 2009 vs. 3Q 2009 - Quarterly

o M&A deals decreased 13.3% from 196 to 170

o M&A median transaction value increased 28.4% from

$4.0MM to $5.1MM

� 3Q 2008 vs. 3Q 2009 - Annually

o M&A deals decreased 51.2% from 357 to 170

o M&A median transaction value decreased 55.3%

from $11.5MM to $5.1MM

MATERIALS SECTOR

� 2Q 2009 vs. 3Q 2009 - Quarterly

o M&A deals increased 7.9% from 38 to 41

o M&A median transaction value increased 9.5% from

$13.5MM to $14.8MM

� 3Q 2008 vs. 3Q 2009 - Annually

o M&A deals decreased 51.2% from 84 to 41

o M&A median transaction value decreased 40.0%

from $24.7MM to $14.8MM

VALUATIONS BUYER COMPOSITION

� Combining all three sectors, median enterprise value / EBITDA

transaction multiples for middle market firms decreased

26.1% from 9.8x through the first 3Qs of 2008 to 7.2x for the

same period in 2009.

� Private equity groups continued to comprise a smaller

percentage of buyers representing 13% of buyers through

the first 3Qs of 2009 relative to 16% for the same period in

2008.

366403

352

47 38 41

126

$25.0

$50.4

$27.8

$2.9

$13.5 $14.8 $8.5

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

0

100

200

300

400

500

2006 2007 2008 1Q09 2Q09 3Q09 YTD 09

U.S. Materials M&A Deal Volume and Median Transaction Value

Total Materials Deals Median Deal Value (MM)

IINNDDUUSSTTRRIIAALL,, CCOONNSSUUMMEERR && MMAATTEERRIIAALLSS CCOOMMBBIINNEEDD DDAATTAA

1,364

1,649

1,312

210 196 170

576

$28.3

$22.9

$13.7

$18.7

$4.0$5.1

$8.0

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

0

400

800

1,200

1,600

2,000

2006 2007 2008 1Q09 2Q09 3Q09 YTD 09

U.S. Consumer M&A Deal Volume and Median Transaction Value

Total Consumer Deals Median Deal Value (MM)

NNAATTIIOONNAALL 33QQ 22000099 MM&&AA BBYY SSEECCTTOORR

0%

20%

40%

60%

80%

100%

2006 2007 2008 1Q09 2Q09 3Q09 YTD 09

53% 52% 59%72% 65% 64% 67%

27% 28%25%

17%20% 22% 19%

20% 20% 16% 11% 14% 14% 13%

U.S. M&A Data by Buyer Type

Industrial, Materials and Consumer Sectors

Private Co. Public Co. Private Equity

8.8x9.8x 10.1x

7.1x 7.1x

12.7x

7.2x

103114

84

102 3

15

0

20

40

60

80

100

120

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

2006 2007 2008 1Q09 2Q09 3Q09 YTD 09

U.S. Middle Market Enterprise Value / EBITDA M&A Transaction MultiplesIndustrial, Materials and Consumer Sectors

Median EV/EBITDA Multiple # of Deals w/ Available Multiples

Includes transactions with enterprise values between $10MM-$500MM

1,184

1,459

1,251

168 174 142

484

$25.0$23.0

$20.2

$12.0$9.5 $9.3 $9.7

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

0

200

400

600

800

1,000

1,200

1,400

1,600

2006 2007 2008 1Q09 2Q09 3Q09 YTD 09

U.S. Industrial M&A Deal Volume and Median Transaction Value

Total Industrial Deals Median Deal Value (MM)

Source: S&P

For more information, please contact any of the professionals listed below or visit

our website at www.strategicad.com

Andy Hays Managing Director

and Founder

arhays@strategicad.com 724-743-5810

Andy Bianco Managing Director

and Founder

ajbianco@strategicad.com 724-743-5820

Matt Dalton Associate mmdalton@strategicad.com 724-743-5840

Matt Steve Associate masteve@strategicad.com 724-743-5830

Strategic Advisors is a middle market investment banking firm that helps clients achieve

financial and business goals by providing merger and acquisition advisory, corporate

finance advisory and strategic consulting services. Our company is one of the few

middle market investment banking firms whose Managing Directors have had

experience investing in and managing their own companies. As a result, Strategic

Advisors not only has expertise in advisory services but also firsthand knowledge of

what stakeholders, investors and lenders expect and desire.

When considering a sale of your business, the acquisition of a business, or the

restructuring or recapitalization of your balance sheet, the best pathway for achieving

your expectations is a well-run sale process that addresses all your personal and

business goals. Strategic Advisors is accustomed to working with business owners to

determine the best pathway to achieve their goals and objectives. Give us a call to

discuss your possibilities.