2008 Annual Report Riverside

2008 Year In Review, A Record Year

2008 Year In Review, A Record Year

Completed 31 acquisitions spanning all four Riverside fund families:

11 by the Riverside Europe Fund (“REF”)

11 by the Riverside Capital Appreciation Funds

(“RCAF”)

7 by the Riverside Micro-Cap Fund (“RMCF”)

2 by the Riverside Asia Fund (“RAF”)

Global expansion:

New offices in Brussels, Stockholm and Hong Kong

Realised Investments:

Richter Chemie-Technik (Germany) - Grew EBITDA

by 60% during Riverside’s ownership

IndustrieHansa (Germany) - Achieved an EBITDA

CAGR of 37% due to organic growth and an

add-on acquisition

Universal Air Filter (USA) - Generated a 80%

gross IRR and a 4.8x gross cash-on-cash return

Moss (USA) - Generated a 33% gross IRR

and a 4.2x gross cash-on-cash return

The Riverside Company, the largest private equity firm focused on the smaller end of the middle

market, marked its 20th anniversary year with a record acquisition pace and continued growth

and expansion across Europe. In 2008, Riverside was THE most acquisitive firm active in the middle

market, completing 31 acquisitions across 4 continents. In addition, Riverside successfully exited

four platform companies and raised over US$1 billion across three funds. Riverside currently has

US$2.7 billion assets under management and almost 200 employees worldwide.

P A R T N E R S H I P , G R O W T H , I N T E G R I T Y

Riverside Deal Flow 2008

4,381 Deals Considered

1,350 Deal Write-Ups

357 Company Visits

51 Letters of

Intent Issued

31 Deals Closed

Raised over US$1 billion in capital across three funds. *All figures accurate as of 31/12/2008.

Pablo FuenteAssistant Director

Marketing & Communications

Brussels

Eva OrbayManager of European

AdministrationBrussels

Riverside Europe Fund (‘REF’) 2008 Highlights

Meet the Europe Team

EM Test

Switzerland

Acquired: March 2008

EM Test is a leading global manufacturer and supplier

of electromagnetic compatibility (“EMC”) test and

measurement instrumentation for the automotive,

industrial, telecom and other industries.

www.emtest.com

Sage Holdings

Germany

Acquired: February 2008

Sage Holdings provides corporate financial

communication and proxy solicitation services.

www.sageholdings.com

InvestmentsREF III - Platform Acquisitions

Tensator Group

United Kingdom

Acquired: August 2008

Tensator provides custom space management

solutions that accelerate queues, reduce wait times,

generate marketing value and improve sales.

www.tensator.com

Vokes Air Group

Sweden

Acquired: July 2008

Vokes-Air Group is a manufacturer and distributor

of air filters for use in a variety of commercial and

industrial applications.

www.vokesair.com

Summit Medical

United Kingdom


Summit Medical makes disposable orthopaedic and

infection-control medical products.

www.summit-medical.co.uk

Riverside’s European fund family currently consists of 16 platform acquisitions and seven

add-ons. In 2008 Riverside completed 11 acquisitions in key European markets – up from four in

2007. We also realised two investments and celebrated office openings in Brussels and Stockholm.

Béla SzigethyCo-CEO

New York

Karsten Langer PartnerBrussels

Origination

Transaction

Operating Legal Marketing Administration

Lars ErikssonRegional Director

Stockholm

Juan Barnechea AldatzVice President

Madrid

Pawel OkonskiVice President

Warsaw

Ivica TurzaVice President

Munich

William JaworskiAssociateBrussels

Damien GaudinAnalyst Brussels

Áron SzabóAnalystBrussels

Kai KoeppenPartnerMunich

Ferenc VidovszkyPartner

Budapest

Eric van den Eijnden Partner

Eindhoven

Radim StachPartnerPrague

Volker SchmidtPartnerMunich

Thomas BlomqvistPartner

Stockholm

Marcos LladóPartnerMadrid

Tomasz GlowackiPartnerBrussels

Peter SchabergerPrincipalMunich

Dominik HeerVice President

Munich

Ludek PalataVice President

Prague

Vladimír PavalaVice President

Prague

Adam PietruszkiewiczVice President

Warsaw

Balázs TahyVice President

Budapest

Peter ParmentierDirector European

Tax & Legal Counsel Brussels

Jeroen LenssenSenior Associate

Eindhoven

Annick VandenbergenAssociate Legal Counsel

Brussels

Marcin GoszykAssociateWarsaw

Justin S. KentAssociateMunich

Rafael Álvarez-NovoaAssociateMadrid

Nils SchanderAssociateStockholm

Sven SchulzeAnalystMunich

Fabio PesiriCFO Riverside Europe

Brussels

Stewart Kohl Co-CEO

Cleveland

Antonio Alvares Cabral Managing Partner

Brussels


Riverside in Europe

Since 1997, Riverside Europe has invested in 35 companies in 12 countries,

including 8 add-on acquisitions.

Riverside’s European staff numbers 48 including a dedicated origination

function, 21 transacting professionals and team of operating personnel

and advisors. For a private equity firm focused on small-to-medium sized

businesses, the Riverside team has a unique blend of corporate finance

and operating experience. Several of our investment professionals have

personal prior experience running companies, a factor, which we believe

makes building partnerships with portfolio company managers more

straightforward. We have lived many of the issues managers face.

Funds: REF IV (2008); REF III (2005); REF II (2002);

RCEF (1997)

Target Acquisitions:

European companies with EBITDA of between

€3 million and €15 million.

Offices: Brussels, Budapest, Eindhoven, Madrid,

Munich, Prague, Stockholm and Warsaw.

REF Deal Flow 2008


429 Deal Write-Ups

104 Company Visits

12 Letters of

Intent Issued

11 Deals Closed

RealisationsRichter Chemie-Technik

Germany

Acquired: January 2006

Exited: October 2008

Results: Grew EBITDA by 60%

“The organic expansion went even better than

expected. There was a very good and trusting

relationship with Riverside. From the very beginning

we were always on top of our plans. It was a very

positive situation. The experience gained with

Riverside will stand me in very good stead for that.

What we did in those three years was incredible.”

Günter Naasner, CEO, Richter

IndustrieHansa

Germany

Acquired: December 2006

Exited: July 2008

Results: 136% gross IRR

5.0x gross cash-on-cash return

“Our partnership with Riverside afforded us the

opportunity to build IndustrieHansa as its own

brand. In addition, we were able to secure new

blue chip customers such as Audi and Ford, which

positioned the company at a new level. Coupled

with expanding our competencies into the product

lifecycle management area, we have found the

support of Riverside to have been very successful

for the company.”

Uwe Hihn, CEO, IndustrieHansa

Investments cont.REF III – Add-On Acquisitions

Capital Precision

United Kingdom

Add-On to: Sage Holdings

Acquired: November 2008

www.capitalprecision.com

Hallvarsson & Halvarsson

Sweden


Acquired: October 2008

www.halvarsson.se/en

Metrolab

Argentina

Add-On to: IVD Group/Diatron


www.metrolab.com

MekoTeknik AB

Sweden

Add-On to: Keycast

Acquired: July 2008

www.mekoteknik.se

AICAT Technologies

Germany

Add-On to: AIS Group

Acquired: June 2008

Exited: October 2008 as part of IndustrieHansa

www.aicat.de

D.F. King

USA



www.dfking.com

“The acquisition of Metrolab accelerates Diatron’s strategy to create a powerful group in the IVD field. Metrolab has the potential to significantly extend our geographical reach and the companies are expected to bring new markets to each other.” Gábor Lengyel, Head of Sales, Diatron

Tensator: Expanding A Unique Market Position

“Tensator has proven capable of identifying

needs in the queuing industry, then innovatively

meeting those needs with new products. The

company offers more than 500 SKUs and is poised

for continued growth. One area of focus will be

further international expansion, both through

organic growth, as well as through potential add-

on acquisitions which we will actively seek out.”

Eric van den Eijnden, Partner, Riverside

www.tensator.com

Since being acquired by Riverside in 2008, Tensator

has added French distribution company, Bory

Moreau S.A., to its portfolio. Bory Moreau, the

primary distributor of Tensator products in the

French market, presented Tensator with a well-

established customer base (Air France, Aeroports

de Paris, Euro Disney and the Parisian mass

transportation authority RATP among others) upon

which it can build further. Tensator is also in the

process of establishing its sales office in Spain

and analyzing manufacturing solutions that could

substantially decrease its variable cost base.

Available in more than 170 countries worldwide, Tensator, together with its U.S. subsidiary Lawrence

Metal Products, is the world leader in queue management products and services. Since 2002, the

company has pioneered custom space management solutions that reduce both real and perceived

in-queue waiting times, generate marketing value and increase sales and operational efficiency.

Tensator’s flagship product, Tensabarrier®, is omnipresent in airports, banks, entertainment venues,

retail spaces and other queuing areas around the globe. Tensabarrier®, consisting of a metal post

with a retractable, customizable sleeve that interconnects with other posts, provides a dynamic

queuing solution for a diverse range of end-users such as Heathrow Airport, Barclays, Macy’s,

Southwest Airlines, Target and The Empire State Building.

“We are excited about what Riverside’s global capabilities and expertise in growing companies can do for our business. We are looking forward to assistance from Riverside for Asia sourcing and expansion and will rely on their experience in this area in order to strengthen our leadership position in the queue management market.” Alan McPherson, Group CEO, Tensator


C A S E S T U D Y

Riverside Capital Appreciation Fund (‘RCAF’) Highlights

HerbThyme Farms

USA

Acquired: April 2008

HerbThyme Farms is the largest year-round grower,

shipper and marketer of conventional and certified

organic fresh culinary herbs in the United States.

www.herbthyme.com

InvestmentsRCAF - Platform Acquisitions

Coeur

USA


Coeur designs, manufactures and assembles a

variety of products for the medical and commercial

marketplace.

www.coeurinc.com

DuBois Chemicals

USA

Acquired: September 2008

DuBois Chemicals is a high-quality manufacturer of

specialty chemicals and solutions for manufacturing

problems and lean initiatives.

www.duboischemicals.com

ITEL Laboratories

USA

Acquired: May 2008

ITEL is an independent testing laboratory servicing

the property insurance industry.

www.itelinc.com

At present, Riverside’s Capital Appreciation Fund family has 32 platform companies and 32 add-on

acquisitions. In 2008, we acquired 11 new companies and successfully exited three.

Priority One

USA

Add-On to: Veritext


www.veritext.com

Electro-Mec

USA

Add-On to: Integrated Power Services


ww.electro-mec.com

RealisationsMoss

USA


Exited: July 2008



Universal Air Filter

USA


Exited: June 2008



HCPro

USA


Exited: February 2008



Investments cont.RCAF – Add-on Acquisitions

The Herbal Garden

USA

Add-On to: HerbThyme Farms

Acquired: November 2008

www.theherbalgarden.com

TRICO TCWIND

USA



www.tricotcwind.com

The Monarch Group

USA



www.monarch-electric.com

CFM Corporation

USA

Add-On to: Monessen Hearth Systems

Acquired: July 2008

www.monessenhearth.com

Shuttlewagon

USA

Add-On to: Nordco

Acquired: April 2008

www.shuttlewagon.com


“In the midst of a very challenging 2008, we are gratified to have seen record-setting activities at Riverside. The firm’s performance was a direct result of the efforts of the Riverside team, over 180 strong, and our unique capabilities in building great small companies, even on a global scale.”Béla Szigethy, Co-CEO, Riverside

Funds: RCAF V (2008), RCAF 2003, RCAF 2000,

RCAF 1998, RCAF 1995, Pre-RCAF ‘95


North American companies generally with

$5 million to $15 million of LTM EBITDA.

Offices: Atlanta, Chicago, Cleveland, Dallas,

Los Angeles, New York and San Francisco.

RCAF Deal Flow 2008


395 Deal Write-Ups

72 Company Visits

19 Letters of

Intent Issued

11 Deals Closed

Riverside Asia Fund (‘RAF’) Highlights

InvestmentsRAF Investments

Wiz Korea

Korea


Focusing on students from two to seven years of age, Wiz

Korea operates the largest learning-oriented preschool

education franchise in Korea with 53 franchises and

three company-owned locations, including 52 within

Korea and four located internationally.

www.wizkorea.co.kr

Shinsouki

Japan

Acquired: January 2008

Shinsouki is the largest parking lot operator in

Niigata City, Japan. Combining knowledge of the

area and close relations with landowners, Shinsouki

operates more than 3,000 parking spaces in the

Niigata prefecture.

www.sinsouki.jp

Asian Operating StrategyIn addition to seeking acquisitions, Riverside’s Asian

efforts are part of a larger focused operating strategy

unique to Riverside. The Asian Operating Strategy is

highlighted by a Hong Kong-based expert dedicated

to helping Riverside’s global stable of 68 portfolio

companies succeed and leverage opportunity in Asia.

Riverside opened its first Asian office in Tokyo in April 2007 followed by an office in Seoul in October

2007. RAF acquires companies with less than $10 million of EBITDA in Asia’s mature economies.

Riverside Micro-Cap Fund (‘RMCF’) Highlights

GTI Diagnostics

USA

Acquired: July 2008

GTI Diagnostics is a developer, manufacturer and marketer

of specialty test kits for the in vitro diagnostics industry.

www.gtidiagnostics.com

Universal SmartComp

USA


Universal SmartComp is a U.S. Best-In Class Physical

Medicine network that is setting the standard for

decreasing the spiralling costs of physical medicine

in workers compensation.

www.universalsmartcomp.com

RMCF – Add-on Acquisitions

JSL Communications, LLC

USA

Add-On to: Health & Safety Institute


www.jslcom.com

TrainingPro

USA

Add-On to: OnCourse Holdings


www.trainingpro.com

InvestmentsRMCF - Platform Acquisitions

Eemax

USA


Eemax is the leading manufacturer of tankless

water heaters for commercial, industrial and

residential markets.

www.eemaxinc.com

HEALTHCAREfirst

USA


HEALTHCAREfirst provides software and services

exclusively to the home care and hospice

industries.

www.healthcarefirst.com

Results Weight Loss

USA


With 11 dedicated weight loss centres, Results

Weight Loss provides a variety of weight loss plans

where clients meet with highly trained counsellors

that are focused on both education and motivation.

www.resultsweightloss.info

RMCF made its first investment in 2005. This fund family seeks fast growing North American

“micro” companies with up to $5 million in EBITDA and provides intense operating resources to help

companies achieve their potential. The fund currently comprises 19 platform companies and eight

add-on acquisitions.


RAF Deal Flow 2008

302 Deals Considered

138 Deal Write-Ups

56 Company Visits

5 Letters of

Intent Issued

2 Deals Closed

RMCF Deal Flow 2008


388 Deal Write-Ups

140 Company Visits

16 Letters of

Intent Issued

7 Deals Closed

Funds: RAF (2008)


Primarily Japanese and South Korean companies

with less than $10 million of LTM EBITDA.

Offices: Hong Kong, Seoul, Tokyo

Funds: RMCF I (2005)


North American companies generally with less

than $5 million of LTM EBITDA.

Offices: Atlanta, Chicago, Cleveland, Los

Angeles and New York.

“Riverside Asia Fund applies the firm’s proven processes and strategies to the developed economies of Asia.” Stewart Kohl, Co-CEO, Riverside


“We’ve had a record-setting year for acquisitions and have strengthened our infrastructure in Europe with continued expansion. Riverside’s proven strategy of buying and building leading companies, partnering with management and maintaining solid financial relationships has allowed us to weather many financial cycles.” Tony Cabral, Managing Partner, Riverside

Our Company

The Riverside Company is the largest global private equity firm focused

on the lower end of the middle market and is one of the industry’s most

experienced leveraged buyout investors.

Riverside invests in premier SME companies valued up to €150 million

and partners with strong management teams to build companies through

acquisitions and value-added growth.

Since its founding in 1988, Riverside has invested in 208 transactions,

with a total enterprise value of more than €4.0 billion. Riverside’s current

portfolio in Europe, North America and Asia consists of 68 companies with

combined annual sales of more than €2.3 billion, EBITDA of approximately

€360 million and more than 14,000 employees worldwide.

SAGE: Creating A Global Niche Leader

In early 2009, Sage grouped all Investor Relations

services under the Taylor Rafferty brand and

established a dedicated team for business

development.

Sage Holdings employs over 900 professionals

serving over 1,000 clients from offices in New York,

London, Munich, Stockholm, Dubai, Hong Kong,

Manila, Taipei and Tokyo.

“Sage is poised to become the most comprehensive

shareholder management services firm globally –

this is a unique strategy based on the developing

needs of corporations in dealing with a global

capital market structure.”

Kai Koeppen, Partner, Riverside

www.sageholdings.com

Sage is structured along three business segments:

consulting; analytics & technology; and stakeholder

fulfilment. The company is focused on building a

business of significant value in these areas through

further complementary acquisitions in each of the

world’s major financial centres.

Since its creation in June 2007, Sage has grown by

acquisition to become the world’s leading financial

communications and stakeholder management

firm. Sage Holding companies currently include:

leading proxy solicitation company D.F. King;

Europe’s fastest-growing financial communications

consultancy M:Communications; top-ranked

Scandinavian communications firm Hallvarsson

& Halvarsson; Wall Street investor and media

relations consultancy Broadgate Consultants;

UK-based markets intelligence specialist Capital

Precision; and leading international investor

relations firm Taylor Rafferty.

Sage Holdings (“Sage”) was created to meet the changing communications challenges arising from

the consolidation of stock exchanges, migration of corporate governance regulation and increased

levels of shareholder activism. The strategy is to assemble and support the growth and integration

of a range of international communication businesses through acquisitions, investments, joint-

ventures, strategic alliances and organic growth.

“With more than 900 staff members serving over 1,000 clients located in more than 30 countries, it has taken under a year for Sage to become the world’s leading financial communications and stakeholder management firm.”Dr. Oliver Niedermaier, President and CEO, Sage Holdings

C A S E S T U D Y

Office Locations EuropeBrussels, Belgium7. Ave. Lloyd GeorgeB-1000 BrusselBelgiqueT: +32 2 626 21 21

Budapest, Hungary Riverside Kft. 1015-BudapestBatthyány u. 49.Hungary T: +36 1 224 9050

Eindhoven, Netherlands Ten Hagestraat 5-B5611 EG EindhovenNetherlandsT: +31-40-20-347-10

Madrid, Spain Serrano 120-3°dcha28006, MadridEspañaT: +34 91 590 1337

Munich, Germany Alter Hof 580331 MünchenDeutschlandT:+49 89 24 22 48 90

Prague, Czech Republic Václavské nám. 832/19110 00 Praha 1Česká RepublikaT: +420 224 890 166

Stockholm, Sweden Blasieholmsgatan 4A114 48 StockholmSverigeT: +46 8 545 0 3030

Warsaw, Poland ul. Zielna 37/c00-108 WarszawaPolskaT: +48 22 320 4820

North AmericaAtlanta, Georgia 561 Vinings Estates DriveAtlanta, GA 30126T: +1 770 948 4256

Chicago, Illinois 4545 N. Hermitage AvenueChicago, IL 60640T: +1 773 334 7518

Cleveland, Ohio Terminal Tower50 Public Square, 29th FloorSuite 4000Cleveland, OH 44113T: +1 216 344 1040

Dallas, Texas 3131 McKinney AvenueSuite 160Dallas, TX 75204T: +1 214 871 9640

Los Angeles, California1453 3rd Street PromenadeSuite 305Santa Monica, CA 90401T: +310 499 5080

New York, New York 45 Rockefeller Center,630 Fifth Avenue, Suite 2400New York, NY 10111T: +1 212 265 6575

San Francisco, California 455 Market Street Suite 1520San Francisco, CA 94105T: +1 415 348 9560

AsiaHong Kong, ChinaRoom 2910 Shell TowerTimes Square1 Matheson StCauseway Bay, Hong KongT: +85 2 2159 7489

Seoul, South Korea21 FL Seoul Finance CenterTaepyeongro 1-ga,Jung-gu Seoul 100-768 Korea T: +82 2 3782 6820

Tokyo, JapanAkasaka Garden City, 4th Floor4-15-1 Akasaka, Minato-kuTokyo 107-0052 JapanT: +81 3 5574 7290

Riverside has 18 offices, in 12 countries, across three continents. This gives us global reach with a

local presence. It also provides us with exceptional insight into local conditions, culture and business

practices, making Riverside better investors and business partners.

P R A G U E

S T O C K H O L M

W A R S A W

B U D A P E S T

M U N I C H

E I N D H O V E N

B R U S S E L S

N E W Y O R K

C L E V E L A N D

M A D R I D

A T L A N T A

D A L L A S H O N G K O N G

S E O U L

T O K Y OS A N F R A N C I S C O

L O S A N G E L E S

C H I C A G O

“In 2008 Riverside strengthened its position as a pan-European leader in lower mid-market buyouts, by adding key team members and reviewing over 1,100 investment opportunities. With 11 acquisitions and two exits, we were one of Europe’s most active PE houses.” Karsten Langer, Partner, Riverside

© The Riverside Company 2009Riverside and The Riverside Company are trademarks or registered trademarks of Riverside Partners L.L.C. in the USA and other countries and may not be used without permission. Although Riverside uses reasonable efforts to obtain information from reliable sources, Riverside makes no representation that the information or opinions contained in this brochure are accurate, reliable, complete or up to date, and such information and opinions are subject to change without notice. Information regarding the past performance of Riverside’s portfolio companies is not necessarily indicative of future results, and there can be no assurance that Riverside will achieve comparable results on subsequent investments.

www.riversideeurope.com

2008 Annual Report Riverside

Economy & Finance

riverside company

riverside team

riverside fund families

riverside europe fund

riverside deal flow

european companies

ref deal flow

record year