Transaction Case Study Hercules Transaction Case Study The Hercules Tire Rubber Company “Hercules” or the “Company” i

							Transaction Case Study
                                       Hercules Transaction Case Study
                                      The Hercules Tire & Rubber Company (“Hercules” or the “Company”) is a leading marketer and
                                      distributor of replacement tires in the United States, Canada and internationally in over 75
                                      countries. Hercules, headquartered in Findlay, Ohio, evolved from its roots as a private brand
                                      purchasing cooperative to include extensive networks of regional distribution centers in the
The Hercules Tire & Rubber Company    U.S. and Canada through the Company’s Tire Dealer’s Warehouse and Tire Specialists
        has been acquired by          divisions, and the largest independent tire exporter in North America through its Treadway
                                      Exports division. Additionally, the Company’s Hercules private brand program is one of the
                                      most highly regarded and sought after proprietary private brand programs in the replacement
                                      tire industry. Partnering with FdG will enable Hercules to strengthen its financial base, further
                                      develop its private label program, solidify its position in the distribution of private label and
                                      branded tires, and capitalize on growth opportunities.
        FdG Associates
                                       Morgan Keegan’s Role
       the undersigned served
        as financial advisor to       Morgan Keegan served as financial advisor to Hercules in connection with this transaction.
 The Hercules Tire & Rubber Company   Morgan Keegan developed, managed and executed a competitive process that included the
                                      preparation of marketing materials, identification of and introduction to potential strategic and
  MORGAN           KEEGAN             financial investors, facilitating due diligence, as well as negotiating, structuring and closing the
                                      transaction.

                                      Morgan Keegan was highly successful in communicating the value that would be unleashed
                                      upon transitioning from the legacy cooperative structure to a fully profit driven, regional
                                      distribution model. Morgan Keegan was successful in negotiating a substantial working capital
                                      adjustment from prospective bidders based on the Company’s current level of working capital
                                      versus ongoing working capital requirements. Additionally, deferred compensation and change
                                      of control payments upon closing triggered a significant operating loss, providing the buyer with
                                      substantial current and future tax savings. Morgan Keegan was successful in negotiating the
                                      value of these savings as an addition to the total purchase price.
Transaction Case Study
                                 Edgen Transaction Case Study
                                Edgen is a leading global distributor of specialty steel pipe, fittings and flanges for use in niche
                                applications. The Company is the market share leader and preferred distribution channel for
                                these products, with an unparalleled network of vendor relationships, a consistently high level
      a Harvest Partners        of customer service, an unmatched breadth of specialty inventory and a diverse base of
      portfolio company         industry-leading customers. The Company’s products are primarily used in infrastructure
                                expansion, economic extensions of existing facilities or maintenance and repair projects by
     has been acquired by       companies in the oil and gas, power generation and process industries. Morgan Keegan was
                                retained as financial advisor to Harvest Partners on the sale of the Company.


                                 Morgan Keegan’s Role
  Jefferies Capital Partners
                                Morgan Keegan ran a controlled process, contacting almost 300 prospective buyers and
                                presenting a persuasive case for an acquisition of the Company by each individual buyer. We
     the undersigned served     received substantial market interest in Edgen, so we emphasized valuation significantly in the
      as financial advisor to   early stages of the process. We ultimately received 10 initial indications of interest, 3 strategic
       Edgen Corporation        and 7 financial sponsors, in a tight range. From this group, we invited 5 parties to visit
                                facilities, sit in management meetings, conduct due diligence and negotiate a definitive
 MORGAN           KEEGAN        agreement.

                                Because there were certain issues that had arisen in the industry in general and the
                                Company’s operations in particular since distribution of the descriptive materials to buyers,
                                Morgan Keegan recommended to the Board of Directors that we pause the process for a 2-
                                week period. During this time, Morgan Keegan prepared an information supplement
                                positioning these circumstances. We also facilitated increased valuations by more than $7
                                million subsequent to initial indications of interest (15% increase in equity value), obtained
                                substantial concessions on economic terms of the definitive agreement and solidified
                                financing with an effective bridge commitment on a high yield debt offering. At the end of the
                                process, Morgan Keegan exceeded Harvest’s initial valuation parameters and the estimated
                                valuation range materially.
Transaction Case Study
                                 AmerCable Transaction Case Study
                                AmerCable Incorporated is a leading designer, manufacturer and marketer of jacketed
                                electrical cable products used in extreme operating environments, including mining, offshore
                                oil and gas and a variety of specialty industrial applications. AmerCable targets markets that
       a Wingate Partners       place value on specialized solutions rather than commodity markets. The Company’s products
        portfolio company       are designed to exceed exacting industry and customer specifications for a variety of physical
                                properties such as flexibility, tensile strength, abrasion resistance, heat and flame resistance,
      has been acquired by      low smoke and halogen free emissions.

                                 Morgan Keegan’s Role
                                Wingate Partners and AmerCable management engaged Morgan Keegan to recapitalize the
  Industrial Growth Partners
                                business in order to provide Wingate with liquidity for its investment. AmerCable management,
                                who in 2002 partnered with Wingate to acquire the AmerCable division from Associated
     the undersigned served     Materials, sought to maintain a significant ownership interest in the Company going forward.
      as financial advisor to   Morgan Keegan ran a controlled process, contacting over 150 prospective financial buyers and
     AmerCable Incorporated     soliciting initial indications of interest from 15 equity sponsors. From this group, we invited 6
                                parties to visit facilities, attend management meetings and conduct due diligence. We
 MORGAN           KEEGAN        received letters of intent from all 6 parties.

                                After selecting a financial sponsor, Morgan Keegan actively managed the confirmatory due
                                diligence process and negotiation of a definitive agreement. Due to the exercise of
                                management stock options at closing, AmerCable incurred additional compensation expenses
                                which resulted in a significant operating loss at closing and provided the buyer with substantial
                                current and future income tax savings. Morgan Keegan was successful in negotiating the
                                value of these savings as an addition to the total purchase price. Additionally, we were
                                successful in negotiating the replacement of escrowed cash at closing for indemnification of
                                future losses with the proceeds from the income tax savings. This provided Wingate and
                                management with maximum cash proceeds at closing. Morgan Keegan was highly successful
                                in managing a competitive and controlled process and successfully exceeded Wingate’s
                                preliminary valuation expectations for the business.