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Publ¡c to Private Transactions

Public to Private Transactions

November 11,2OO2

Morganostantey
Public to Private
Transactions
Successful Public to Private Ch aracteristics

. Characteristics are substantially the same as traditional LBO's

- Stable cash flows

- Free cash flow positive / deleveraging

- Aggregate value in the [6-8x] EBITDA range

- Potential private equity returns in the 20-30Vo range

- Minimum equity equal to 30vo of total capitalisation

- Strong management/management solution

' Key difference: Access/relationship(s) with management, board of directors

and/or shareholder(s)

- Friendly transaction nature requires support of key constituents

- Limited diligence compared to an auction requires buy-in/support of

knowledgeable parties
. Targeted transaction size in excess of €800MM

- Generates attractive risk/reward tradeoff for non-investment grade capital

commitments

Morgañstanley
Public to Private
Transactions
Case Study: Jefferson Smurfit Group plc

Madison Dearborn's public to Company Overview Transaction Overview

private of JSG is the largest
ever LBO in Europe
Highly successful
transaction in the bank and
bond markets
Deutsche Bank and Merrill
Lynch acted as sole M&A
and financing
advisors/providers
€250 MM gross fee pool
- M&A Fees
- Lvg. Loan Fees
- HY Bridge & Bond Fees
- FVHedging Revenues
JSG is the largest European-based integrated manufacturer
containerboard and comrgated containers
Global operations in Europe, Latin America and the United
States and Canada
LTM revenue and EBITDA of €4,838 MM
June 30, 2002
e642MM, respectively
of July 5, 2002: Madison Dearborn ("MD) commences public
tender for all issued shares ofJSG
Sept. 3, 2002: MD offer declared unconditional after
receiving 9l.4Vo on all shares, squeeze-out commenced, and
and Smurfit Stone shares distribured via spin-off
Sept. 23,2002: Successful pricing of€900MM ofHy bonds
in $'s and €'s, marking the largest Hy issue of 2002
Ocl 2002: Syndicarion of bank facili ries closes successful ly
with strong demand lrom US Funds and European Funds and
Retail Banks. Oversubscription estimated at 257o
Management to invest up to €75MM of equity
€MM

€425MM Revolving Credit Facitity €0.0 AcquisitionConsideration c2,368.7

Senior Term Loans 1,505.8 Refinance Existing Debt 892.4
Remaining Debt 636.9 Remaining Debt 636.9
HY Bonds 896.4 Fees and Expenses 248.5
PIK Facility 250.4
Equity 857.0
Total €4,146.5 Total €4,146.5

Morgan"Stanley