DISCUSSION ON EQUITY CAPITAL MARKETS

Tuesday, December 12th, 2006

Chris Christina

Principal (612) 303-8521 Christie.L.Christina@pjc.com

Elissa Kluever

Associate (612) 303-6378 Elissa.M.Kluever@pjc.com

PIPER JAFFRAY MANAGEMENT COMMITTEE
Andrew Duff
Chairman & Chief Executive Officer

Tom Schnettler
Vice Chairman & Chief Financial Officer

Todd Firebaugh
Chief Administrative Officer

Jim Chosy
General Counsel

Jon Salveson
Head of Investment Banking

Frank Fairman
Head of Public Finance Services

Bob Peterson
Head of Equities

Capital Markets

Ben May
Head of High -Yield & Structured Products

Institutional Sales & Sales Trading Trading Research
2

CORPORATE & INSTITUTIONAL SERVICES Investment Banking and Equities Groups Investment Banking Existing Industries  Consumer  FIG  Health Care  Technology New Industries  Alternative Energy  Business Services  Industrial Growth Equities Capital Markets Equity Capital Markets Convertible Originations Corporate & Venture Services Distribution Institutional Sales & Sales Trading Research Investment Research (Equity & Fixed Income) Trading 3 .

EQUITY CAPITAL MARKETS TEAM Organization Chart Chad Abraham Head of Equity Capital Markets Maura Stoltz Hasan Executive Assistant Origination John Baumgartner Principal Consumer & FIG Execution Chris Christina Principal Consumer & FIG Steve Schmidt Vice President Technology Neil Riley Vice President Health Care & Technology John Crowther Associate Elissa Kluever Associate Greg Klancher Associate Jonathan Jewett Analyst PIPEs / RDs David Stadinski Managing Director Chris Christina Principal Eric Helenek Vice President Chad Huber Analyst 4 .

raising nearly $33 billion in capital • Piper has completed 28 IPOs in 2006. raising over $4 billion in capital • The average number of IPOs completed since 2000 has been 163.EQUITY CAPITAL MARKETS Type of Transactions Completed on the Equity Capital Markets (ECM) Desk Types of transactions completed through the Piper Jaffray Equity Capital Markets desk Initial Public Offerings • An initial public offering (IPO) is when a private company sells its stock for the FIRST time in the public markets • 146 IPOs have been completed in 2006. with a high of 373 completed in 2000 and a low of 70 completed in 2002 5 .

raising over $7 billion in capital • The average number of follow-ons completed since 2000 has been 416. raising nearly $92 billion in capital • Piper has completed 43 follow-ons in 2006. either primary shares or shares from selling shareholders. with a high of 520 completed in 2004 and a low of 346 completed in 2002 Additional Types of Offerings – (Follow-on Offerings) • Underwritten Shelf Takedowns • 144 Block Trades • PIPEs (Private Investment in Public Equity) • Registered Direct Offerings 6 .EQUITY CAPITAL MARKETS Type of Transactions Completed on the Equity Capital Markets (ECM) Desk Types of transactions completed through the Piper Jaffray Equity Capital Markets desk Follow-on Offerings • A follow-on offering is when an already public company sells its stock. in the public markets • 457 follow-ons have been completed in 2006.

000 Initial Public Offering May 6th.000. 2000 PIPE August 9th. 2005 Traditional Follow-on November 8th. 2005 Bought Deal June 14th. 2006 7 .932 $95.000 $17.500 Initial Public Offering Traditional Follow-on Rule 144 Block Trade Initial Public Offering Rule 144 Block Trades Bought Deal June 25th.615.000 $40.BROAD DEPTH OF EQUITY OFFERING ALTERNATIVES There is a Growing Continuum of Offering Alternatives for Equity Issuers… Traditional Follow-on Initial Public Offering (IPO) Registered Direct (RD) Underwritten Shelf Takedown Bought Deal Private Investment in Public Equity (PIPE) Block Trade (Rule 144 Institutional) $64.710.000. 2004 August 26th.000 $120.000 $16.232. 2006 $54. 2005 August/Sept 2005 June 15th. 2004 January 28th. 2006 Initial Public Offering May 1st.338 $57.000 $12.960.089.737.500 $44.687.845. 1999 May 25th.500 $97.740.

receives differentiated economics on the deal and a better position on the cover • Co-Manager: most junior participating management position with no bookrun responsibilities. Co-Lead Manager and Co-Manager depending upon the deal Piper Roles • Sole-Bookrunner: ECM desk functions as the lead manager on the deal and is responsible for coordinating the roadshow.EQUITY CAPITAL MARKETS Piper’s Involvement in Equity Capital Markets Offerings Piper functions as a Bookrunner. allocating stock. billing & delivering the stock offered in the issue and stabilization in the immediate aftermarket. offers additional sponsorship to issuer. receives senior economic fees on the deal and furthest to the left on the cover • Joint-Bookrunner: same responsibilities as sole-bookrunner. pricing the deal. but split with another manager • Co-Lead Manager: no bookrunning responsibilities. building indications of interest. receives junior economics and far right position on cover 8 Deal economics depend upon the status and maturity of the issuer . however.

underwriting and management fees fixed • Bought Deal Spread: bank’s principal capital put at risk to buy shares from the issuer/selling shareholder at a discount to last trade and in turn sold to institutions at a discount from last trade and a premium to the price paid to the issuer/selling shareholder Deal economics depend upon the status and maturity of the issuer 9 . CoLead Manager and Co-Manager depending upon the deal Deal Economics • Fixed Economics: set gross spread to the banks on the offering. underwriting fees. which is comprised of management fees.EQUITY CAPITAL MARKETS Piper’s Involvement in Equity Capital Markets Offerings Piper functions as a Bookrunner. bookrunner(s) frequently capped. and the selling concession • Jump-Ball: subset of the selling concession based on who the designated account gives credit for the sale.

PIPER JAFFRAY COVER POSITIONS Piper as Sole-Bookrunner Piper as Joint-Bookrunner Piper as Co-Lead Manager Piper as Co-Manager 10 .

338 $20.560.779.925.032 $16.737.845.817.500 $247.966 Follow-on August 2006 Follow-on August 2006 Registered Direct August 2006 $62.000 $44.000 IPO June 2006 Follow-on June 2006 Follow-on June 2006 11 .PIPER JAFFRAY BOOKRUN OFFERINGS $95.

EQUITY CAPITAL MARKETS Overview of Equity Capital Markets Primary roles of the groups within Equity Capital Markets – Origination and Execution Origination of Transaction with Investment Banking Origination Execution Discussion of Economics and Number of Managers on Deal Size and Time of Transaction Constant Communication with Management during the Roadshow Marketing the Deal with Sales – Roadshow Layout Distribution Strategy Allocation Decisions Deal Pricing Opening and Trading Process 12 .

CORPORATE CLIENT COMMUNICATION The Role of the Equity Capital Markets Team Situation Client Targeting. and Industry Conferences Role Update of Equity Capital Markets Conditions/Trends Deal Strategy. Pitches. Structure & Timing Company Positioning & Piper Jaffray Marketing Valuation Discussion Introduction Process Presentation Coaching Sales Force Education Institutional Sales Feedback Research Analyst Feedback Order Book Updates Market Updates Institutional Account Profiles Recap of Roadshow and Order Book Offering Distribution Overview Aftermarket Trading Intelligence Trading Updates Green Shoe Management Trading Monitoring/Account Intelligence 13 Prior to Roadshow During Roadshow Pricing Aftermarket .

EQUITY CAPITAL MARKETS Equity Capital Markets Role in deal offering The role of Equity Capital Markets in the pricing of an offering is to balance the desires of the corporate client and institutional client Equity Capital Markets Desk Corporate Client & Investment Banker  Wants to sell for the highest price  Maximize offering value for the corporate client  Maximize profit for the firm Institutional Client & Sales Force  Wants to buy for the lowest price  Generate increased value for the Institutional client  Increase likelihood of long-term stock appreciation The goal is to find the so-called “market-clearing” price that pleases both parties 14 .

82 (+32% from IPO) • • • Order Book 1 Day Aftermarket Performance Post-IPO/ Aftermarket 15 .542.000 1.333. +33% from offer price Piper Jaffray served as the sole sell-side advisor to Golf Galaxy in their sale to Dick’s Sporting Goods (11/13/06) at a price of $18.00. Golf Galaxy Inc.$13. 2005 $63. Open = $17.05.000.500 3.00 .000 4. Edwards. apparel and accessories • • • • Use of Proceeds Fund new store openings.000 • The Company is headquartered in Eden Prairie.00 $11. 90 orders of 10% or greater Offer = $14.595.6 million initial public offering at $14.000 3. 85% of 1-on-1 meetings converted into orders.61.GOLF GALAXY CASE STUDY Golf Galaxy priced an upsized. Close = $18.00. 14 Cities (Domestic Only). pay all accrued and unpaid dividends due to preferred shareholders Transaction Highlights • Roadshow 9 Days.950.542.00 3. general corporate purposes. Minnesota and is a leading specialty retailer of golf equipment.500 $148. Wedbush Morgan Piper Jaffray Sole Bookrun Initial Public Offering July 29th. approximately 175 accounts on the roadshow via 62 institutional 1-on-1 meetings and 6 group functions 16x oversubscribed. 210 accounts indicating on the deal.G.9 million Piper Jaffray William Blair A. (NASDAQ: GGXY) • • • • • Initial Public Offering Filing Range Shares Filed Shares Offered Shares Offered with Green Shoe – Primary – Secondary Post-Deal Market Capitalization Sole Bookrunner Co-Lead Manager Co-Managers 7/29/2005 at $14. one point above its $11 $13 filed range $63.

Baltimore and Philadelphia. San Francisco. San Diego. Roadshow ends on Thursday afternoon. The company management travels with the Piper Jaffray investment banker and a member of the institutional sales force. Company continues its roadshow through Boston. Los Angeles.00 per share – above the $11-$13 filing range. This is the same presentation that will be used on the IPO roadshow with institutional investors. 85% of 1-on-1 meeting attendees submit and order to Piper Jaffray. New York. 16 . Golf Galaxy travels to the Piper Jaffray office and presents its story to the sales force. The roadshow begins in Chicago and continues through Kansas City. Piper Jaffray research analyst gives a “teach-in” to the sales force giving them a better understanding of the business and its growth outlook. The roadshow will take them to institutional investors throughout the United States. All-in-all. Piper Jaffray’s Equity Capital Markets team works to allocate all of the shares to the institutional investors. Denver. Golf Galaxy presented in front of 175 institutional investors via 62 1-on-1 appointments and 6 group functions Week of July 13th Week of July 20th Week of July 27th Pricing on July 29th IPO is priced at $14.GOLF GALAXY CASE STUDY IPO Execution Timeline Week of May 16th Introduction File IPO Deal kick-off. Piper Jaffray receives orders for 16x the number of shares that are being offered in the deal. Golf Galaxy begins its roadshow. Minneapolis and Milwaukee.

L. Lehman Brothers Wachovia Capital Markets LLC Thomas Weisel Partners L. 46 40 35 34 32 32 32 31 29 28 28 27 26 24 24 19 17 13 12 12 12 11 11 8 7 .. Goldman Sachs & Co. LLC Piper Jaffray & Co Morgan Stanley Bear Stearns & Co Inc. CIBC World Markets Jefferies & Co Inc. Follow-ons & Convertibles in 2006 YTD Rank 1 1 3 4 5 6 6 8 9 10 11 12 13 14 15 16 17 18 19 19 21 22 23 23 25 Manager J.C. Inc N o.G. Raymond James Thomas Weisel Partners L.EQUITY CAPITAL MARKETS OVERVIEW Piper Jaffray has consistently been a Top Equity Underwriter… IPOs. Raymond James RBC Capital Markets William Blair & Co Keefe Bruyette & Woods Inc. 160 160 150 149 137 124 124 121 119 118 110 80 78 71 66 62 59 54 47 47 37 36 35 35 32 IPOs in 2006 YTD Rank 1 2 3 4 5 5 5 8 9 10 10 12 13 14 14 16 17 18 19 19 19 22 22 24 25 Manager J. Morgan Securities Inc. Deutsche Bank Securities Inc. Credit Suisse Lehman Brothers Morgan Stanley Deutsche Bank Securities Inc. Stifel Nicolaus & Co JMP Securities LLC Robert W. UBS Securities Inc. Cowen & Co.P.L.C. UBS Securities Inc. Credit Suisse Banc of America Securities Merrill Lynch & Co.. Edwards & Sons Inc. Citigroup Global Markets Inc. Banc of America Securities Merrill Lynch & Co. Wachovia Capital Markets LLC Goldman Sachs & Co. JMP Securities LLC Pacific Growth Equities Lazard Capital Markets N o.G. Bear Stearns & Co Inc. Morgan Securities Inc. Piper Jaffray & Co Cowen & Co. LLC Jefferies & Co Inc.P. Baird & Co. RBC Capital Markets CIBC World Markets A. KeyBanc Capital Markets Keefe Bruyette & Woods Inc. A. Edwards & Sons Inc. Citigroup Global Markets Inc.

C. Wachovia Capital Markets LLC Banc of America Securities J. Morgan Securities Inc.L. N o. Citigroup Global Markets Inc.L.P.P. Banc of America Securities Merrill Lynch & Co. Sandler. Cowen & Co. Citigroup Global Markets Inc. Rodman & Renshaw.P. Morgan Securities Inc.L. 28 26 23 22 21 21 21 20 19 17 16 15 18 . Deutsche Bank Securities Inc.. CIBC World Markets Banc of America Securities Morgan Stanley Merrill Lynch & Co. Deutsche Bank Securities Inc. 36 31 25 22 21 21 20 20 20 15 15 12 Health Care Rank 1 2 3 3 5 6 6 8 9 9 11 11 Manager Cowen & Co. Credit Suisse UBS Securities Inc.P. L. Morgan Securities Inc. J. LLC Piper Jaffray & Co UBS Securities Inc..C. LLC Lehman Brothers Credit Suisse Thomas Weisel Partners L. Lehman Brothers Goldman Sachs & Co. 27 25 21 21 20 19 19 17 16 16 15 15 Technology Rank 1 2 3 4 5 5 5 8 9 10 11 12 Manager Credit Suisse Goldman Sachs & Co. Merrill Lynch & Co. N o.EQUITY CAPITAL MARKETS OVERVIEW Sector Rank – IPOs & Follow-On Offerings Completed in 2006 Consumer Financial Manager Wachovia Capital Markets LLC Piper Jaffray & Co J. Citigroup Global Markets Inc. Deutsche Bank Securities Inc. Thomas Weisel Partners L. Goldman Sachs & Co. Thomas Weisel Partners L. Inc.C. Cowen & Co. Piper Jaffray & Co N o. Banc of America Securities N o. 17 16 16 15 13 13 12 10 10 10 9 8 Piper Jaffray continues to be one of the most active managers across key growth sectors Rank 1 2 2 4 5 5 7 8 8 8 11 12 Rank 1 2 3 4 5 5 7 7 7 10 10 15 Manager Keefe Bruyette & Woods Inc. LLC UBS Securities Inc.P.. Bear Stearns & Co Inc. Morgan Stanley Lehman Brothers Piper Jaffray & Co J. O'Neill & Partners. Morgan Securities Inc.

6 $37.4 $40 $20 $14.2 $71.0 $33.9 $42.5 $0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 YTD 19 .1 $35.EQUITY CAPITAL MARKETS OVERVIEW Historical IPO Volume Number of IPOs by Year Number of IPOs Completed 600 500 409 400 300 200 100 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 YTD 80 70 76 252 531 450 373 210 170 146 IPO Capital Raised by Year $80 $69.8 $39.2 Capital Raised ($B) $60 $46.0 $24.8 $44.

0 $92.3 $85.3 $68.2 $111.4 $84.EQUITY CAPITAL MARKETS OVERVIEW Historical Follow-on Volume Number of Follow-ons by Year 700 Number of FOs Completed 617 628 520 464 415 398 374 431 346 424 457 600 500 400 300 200 100 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 YTD Follow-on Capital Raised by Year $150 Capital Raised ($B) $125 $100 $74.8 $90.2 $75.2 $69.8 $75 $50 $25 $0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 YTD 20 .9 $124.6 $81.

company/underwriter’s counsel. and broader market information/color – Equity Capital Markets provides a weekly update of the following: Week in Review Deal Commentary YTD Performance Tables Week Pricings Week Filings Withdrawn/Postponed Industry Calendar YTD Deal Performance Current Backlog League Tables Piper Transactions – Equity Capital Markets works with Investment Banking to tailor the best advice/approach for IPOs. and other equity-linked transactions – Equity Capital Markets works with our corporate clients. and Institutional Sales and Sales Trading to manage all aspects of the deal execution process 21 .EQUITY CAPITAL MARKETS What is Equity Capital Markets to You? Equity Capital Markets is a dedicated resource for equity offering information and analysis – Equity Capital Markets is a dedicated resource for equity offering information and analysis. related trading intelligence. follow-on offerings. Investment Banking.

EQUITY CAPITAL MARKETS Questions? Comments? 22 .

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