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Equity Investment Banking
Robert Castle, Principal
© 2006 Piper Jaffray & Co. Since 1895. Member SIPC and NYSE .
Introduction
Robert Castle, Principal – Investment
Banking
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In seventh year at Piper Jaffray
– Associate for 2 ½ years
– Vice President for 3 years
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Previously with Conseco Finance and Morgan Stanley
MBA in Finance, University of St. Thomas
BS in Mortuary Science, University of Minnesota
Little Known Facts
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Nickname is Digger
Enjoy golf, tennis and reading mystery novels
Live in Eagan with wife and two boys (9 and 2 years old)
Former model and actor
Introduction
Typical Week Day (Non-Traveling)
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Wake up at 5:00am
Exercise from 5:15am to 6:30am
Arrive at work around 8:30am
Have multiple client meetings/calls throughout day
Place calls into new/prospective clients
Arrive at home in between 7:00pm and 8:00pm
Read documents or other work at home before bed
Typical Week
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60 – 70 hours per week with travel
Two to three days per week of travel
Introduction
Attributes of a Successful Banker
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Client focused
Analytical and critical thinker
Good listener
Excellent communicator (orally and written)
Ability to delegate
Team player and mentor for junior staff
Unflappable
Banker Objectives
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Become clients’ trusted advisor
Build our core base of five to ten key clients
Clients
Who they are
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Small and middle-market companies
– Typically up t0 $2.0 billion in market capitalization
– Private, growth companies
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Financial sponsors
– Private equity firms
– Venture capitalists
Value Piper Jaffray provides them
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Provide customized, tailored and trusted advice
– No “cookie cutter” approach to our business
How they are assigned
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By industry expertise and sub-sector specialization
Clients
Alternative Energy
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Clean Technology
Distributed Power Generation
Ethanol/Bio-Fuels
Fuel Cells
Solar Power
Wind
Business Services
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Business Information Services
Facilities Services
Human Resource Services
Industrial Services
Learning Services
Marketing Services
Professional Services
Consumer
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Apparel, Footwear & Softline Retail
Consumer Products
Food & Beverage
Restaurants
Specialty & Hardlines Retail
Financial Institutions
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Asset Management
Broker-Dealers
Depository Institutions
Financial Technology & Services
Insurance
Specialty Finance
Health Care
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BioPharmaceuticals
Health Care Services
Information-Driven Health Care
Life Sciences Tools/Diagnostics
Medical Technology
Industrial Growth
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Aerospace
Automotive Products
Building Products
Flow & Process Controls
Industrial Distribution
Metal Processing
Packaging
Plastic Processing
Security & Safety
Specialty Chemicals
Specialty Vehicles
Other Manufacturing & Services
Technology
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Computer Hardware & Semiconductors
Enterprise Software
Internet
IT Services
Wireline & Wireless Communications
Financing/Products/Services
Piper Jaffray has expertise in providing
“cradle to grave” financing advice
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Start up or private equity capital
Initial public offerings (“IPOs”)
Follow-on or secondary offerings
Debt capital
– Senior, subordinated and convertible debt
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Financial advisory services
– Mergers & Acquisitions
– Divestitures
– Defensive Advisory
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Corporate and venture services
Restructuring (a/k/a Bankruptcy)
Financing/Products/Services
Most common and least common financing
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Approximately 50% of revenue comes from raising capital (i.e., IPOs, follow-offerings, convertible
securities) and 50% comes from advisory services (M&A and private capital)
Underwriting
Mergers & Acquisition Advisory
(IPOs, Follow-ons, ADRs & Convertibles)
Focus Sectors
Rank
1
2
3
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5
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15
Manager
J.P. Morgan Securities
Merrill Lynch
Citigroup Global Markets
Goldman Sachs
UBS Securities
Morgan Stanley
Lehman Brothers
Banc of America Securities
Credit Suisse First Boston
Piper Jaffray
Wachovia Capital Markets
CIBC World Markets
Deutsche Bank Securities
SG Cowen Securities
Bear Stearns
# of Deals
106
90
88
83
82
79
78
75
65
64
59
59
51
51
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Piper Jaffray finished 2005 ranked 15th in the number of Lead and Co-managed
equity offerings completed – 10th overall in our focus sectors
Middle-Market Advisors*
Houlihan Lokey Howard & Zukin
Jefferies & Co.
Wachovia
Piper Jaffray
M& A International
Keefe Bruyette & Woods
William Blair & Co.
Sandler O’Neill & Partners
Lincoln Partners
Daniels & Associates
BB& T
KPMG Corporate Finance
Goldsmith Agio Helms & Co.
Raymond James
CIBC World Markets
Number of
Deals Closed
126
76
69
48
40
38
36
35
33
32
30
27
26
24
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Source: T homson Financial and Piper Jaffray; U.S. based buyers/sellers only
* Excludes Investment Banks with Average Deal Size>$500 million
Financing/Products/Services
How is our research product used?
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Provides investment banking clients with a “voice” on the Street
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Ability to provide company specific and industry specific knowledge to
new/prospective clients
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Enables bankers to keep informed of key company events
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Utilized by institutional sales force to keep in front of their clients and to sell
new offerings
Financing/Products/Services
How is our research product used?
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Our research analysts are independent from our investment bankers and develop their opinions
based on the results and merits of a covered company.
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Our research analysts, together with research management, make their own coverage decisions,
including decisions to initiate or terminate coverage. Our investment bankers do not have any
input into company-specific coverage decisions.
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Piper Jaffray does not offer favorable research or specific ratings or price targets in consideration
of, or as an inducement for investment banking business.
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Our research analysts do not participate in efforts to solicit investment banking business.
Consumer
Financial
Health Care
T hinkEquity
Harris Nesbitt
WR Hambrecht
Wedbush M organ
A.G. Edwards
M organ Stanley
Pacific Growth
Goldman Sachs
Sandler O'Neill
William Blair
JM P Securities
Deutsche Bank
Adams Harkness
First Albany
UBS
Robert W. Baird
CSFB
Citigroup
Suntrust Robinson
Stifel Nicolaus
Bear Stearns
KBW
Wachovia
M errill Lynch
Jefferies
Banc of America
Raymond James
RBC
Needham
Friedman, Billings
Lehman
SG Cowen
T homas Weisel
CIBC
J.P. M organ
Piper Jaffray
Financing/Products/Services
How is our research product used?
Equity Research Coverage – Consumer, Financial, Health Care and Technology
Number of Companies Under Coverage Less than $2 Billion
400
350
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Technology
Sector classifications via Global Industry Classification Standard (GICS)
Source: bigdough; data as of 12/31/2005
Financing/Products/Services
Conferences that Investment Banking has
access to:
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Industry conferences sponsored by trade associations
Piper Jaffray sponsored conferences
Conference
Date
Location
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Financial Conference
China Internet & Technology Conference
Hardware & Technology Conference
Health Care Conference
Consumer Conference
March
March
May
June
June
New York, NY
Beijing, China
New York, NY
London, England
New York, NY
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Digital Media Technology Conference
Software & Business Services Conference
Retail, Apparel & Footwear Conference
Financial Services Conference
Health Care Conference
September
September
October
November
November
New York, NY
New York, NY
London, England
Boston, MA
New York, NY
Partnerships
Internal
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Product specialists
– Equity capital markets (i.e, syndication)
– Convertible securities
– Debt capital markets
– Corporate and venture services
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Industry team
– Analysts, Associates, Vice Presidents, Principals and Managing Directors
External
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Accountants, attorneys, printers, financial sponsors
Partnerships
Specialty
Finance
MD
Minneapolis
Analyst
Specialty
Insurance
Chicago
Principal
Seamless
Teamwork &
Integrated
Client Focus
Associate
New
York
VP
Depository
Institutions
Financial
Technology
& Services
Revenue
Is created by:
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Working hand-in-hand with clients
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Providing thoughtful, value-added advice
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Constantly developing existing and new/prospective client relationships.
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Being retained to represent companies on transformative events
– IPOs (typically 7.0% commission)
– Follow-on offerings (typically 5-6% commission)
– Private capital offerings (typically 3-6% commission)
– Advisory assignments (1-2% of transaction value)
– Debt offerings (.50% to 3% commission)
Questions