D2 Capital Partners: General Intro To Scope Of Services

Introduction to D2 Capital Partners

Scope of Services Presentation

D2 Capital Partners

D2 Capital Partners
Creation ∙ Deployment ∙ Structuring

Onshore Access • Global Platform D2 Capital Partners

D2 Capital is an independent, privately owned, investment and advisory
partnership. It is active across the spectrum of investment assets whilst
simultaneously applying he accumulated global capital market experience of its
team to a diverse range of advisory situations. D2C is unencumbered by
convention. It is flexible, focused and innovative in the provision of niche solutions.

Where we fit into the capital process :

I. Creation – we raise capital for companies
II. Deployment – we assist strategic and financial investors with
deployment of capital
III. Structuring – we structure the best-fit, most effective and
innovative solutions

Creation ∙ Deployment ∙ Structuring 2
www.d2capitalpartners.com

Venture Capital & Private Equity
Investments D2 Capital Partners

From VC to PE, we help accelerate the growth path Venture Capital involves start-up and early stage
through growth capital raises… companies requiring funds for growth

 PURPOSE: Raising growth capital:
 At the earliest stages of the life-cycle
 Forging synergistic relationships between
companies Growth Cash Flow
Start-up
 Structure financial investment partnerships to Company Positive
prepare a company for IPO exit
 D2C ROLE: We act as both advisors to
buyers and sellers, management in our
principle investments and consultants in Private Equity involves private profitable companies
post-deal monitoring services seeking expansion capital or strategic partnerships
 COUNTERPARTIES: We advise companies
in raising capital or advise private equity Financial Strategic
investors in their deployment strategy. Investment Partnership

 PROCESS: We in assist in designing
business plans, writing information
memorandums, building financial models Seller
and drafting term sheets


More on Venture Capital: Incubation D2 Capital Partners

Leveraging Vietnam’s Entrepreneurial Spirit Aiming to be the leading business partner
 PURPOSE: Create and start new ventures
 D2C ROLE: Apply creative intelligence,
Domestic
vast network and market knowledge to Partners
starting, funding and managing new
ventures
 COUNTERPARTIES: Foreign / domestic
investment funds, domestic / foreign
companies, local / expat professional Professional New Investors

Venture
experts / management Management

 PROCESS: Develop the business plan,
build financial forecasts, research the
target market, hire management team,
establish local and foreign partnerships,
Foreign
obtain licensing, connect customers and Partners
raise venture capital.


Mergers & Acquisitions (M&A) D2 Capital Partners

To partake in Vietnam’s across-the-board growth curve, MERGERS are the combination of two companies into one
strategic interest is driving M&A demand… larger entity…

 PURPOSE: Assist global / domestic
Company
companies structure partnerships via: A

 Direct purchase of ownership
 Issuance of new shares for growth capital Company
 Setup of new Joint Ventures A-B
 D2C ROLE: We act as advisors to either Company
the buyer seeking acquisition targets or B

sellers requiring strategic partners
ACQUISITIONS are the purchases of part or all of an asset
 COUNTERPARTIES: Transactions involve or company by another company…
global and / or domestic companies
acting as either buyers / sellers
 PROCESS: The scope of work requires Acquirer
extensive preparation of investor
documentation, regulatory filings,
Target A Target B Target C
financial due diligence, marketing
(90% Stake) (100% Stake) (70% Stake)
materials and road-shows spanning
many months and even beyond a year


Restructurings & Divestments:
Shedding Fat for Leaner Growth D2 Capital Partners

Sometimes more is less; Allocate capital where it grows best
Need capital to fund growth but don’t want to sell equity or raise debt?
Not enough management resources to scale higher growth core business?
 Restructurings allow companies to unlock capital trapped in underperforming assets
 Divestments in businesses where management is inexperienced to focus on core growth
 Immediate value creation that can be realized by the capital markets (i.e. stock price)

Non-Core Asset
Pre-Asset Post-Asset
Disposal Disposal
Ca$h Proceeds


Sell-Side Advisory: Managing the Capital
Raising Process D2 Capital Partners

DOCUMENT PREP (3 – 4 WEEKS):
• Draft Business Plan / Investment Memo
• Financial Forecasts
• Valuation Model

NEGOTIATIONS (2 – 4 WEEKS): MARKETING PREP (1 – 2 WEEKS):
• Finalize Purchase Agreements • Finalize Potential Buyers List
• Finalize Shareholder Agreements • Draft Teasers
• Obtain regulatory approvals • Write and Coach Investor Presentation

DUE-DILIGENCE (6 – 12 WEEKS): MARKETING (3 – 4 WEEKS):
• Management Meetings • Teaser Dissemination
• Facility Tours • NDA & Investor Document Release
• Data Room Visits • Presentation to Investors

BIDDING PROCESS (1 – 2 WEEKS):
• Determination of Final Round Investors
TOTAL TIME FRAME:
• Draft Term Sheet 16 – 28 WEEKS
• Coordinate Investor Due-Diligence


Buy-Side Advisory: Capital
Deployment Strategy & Execution D2 Capital Partners

INDUSTRY / SECTOR ANALYSIS:
• Determine industry / sector trends
• Segment value-chains
• Identify growth drivers
TARGET MAPPING:
Locking in • Categorize key players
• Matrix SWOT and comparable metrics
the Target!!! • Short-list preferred targets
COMPANY MEETINGS / PROFILES:
• Gather key operating metrics
• Business model descriptions
• Trends and developments
INVESTMENT DUE DILIGENCE:
• Stress test forecast assumptions
• Comprehensive valuation models
• Coordinate legal due diligence
NEGOTIATIONS & STRUCTURING:
• Customize deal structure
• Buffer hostility through intermediation
• Negotiate buyer’s terms & conditions


Our Partnership Lasts Through-out
the Entire Company Lifecycle D2 Capital Partners

Restructurings /
M&A Divestments
• Takeovers • Asset Disposal
• De-listing
Listing • Carve-outs
• Consolidation • Privatization
• Initial Public Offering
Private Equity (IPO)
• Secondary Issuance
• Capital Raise
• Strategic Partnership

Venture Capital
• Start-Up
• Early Stage


Common Ground:
Elements of a Successful Deal D2 Capital Partners

 Timing
 Approaching the market when it is favourable increases your
likelihood of success.
 Pricing
 Understanding the relationship between the value of the company
and the context of the market will assist in deriving a reasonable
price.
 Broad Scope
 Willingness to accept a broad range of partners.
 Representation and Marketing
 Positioning is critical with investors; professional representation will
improve likelihood of a successful transaction.


Our Track Record in Vietnam D2 Capital Partners

CASE 1: Growth Capital Financing into Vietnamese Media Group
 Investor : International Private Equity Group  Our Role : Represented the seller
 Target : Leading Vietnamese Media Group  Deal Size: Initial round of approx. US$ 5mn

 Our Services : Preparation of a detailed business plan, stress testing the financial forecasts,
structuring key terms and conditions and conducting all face-to-face negotiations with the buyer.
 Outcome: The deal was successfully closed and growth capital provided for the next phase of
expansion of the Group.

CASE 2: Strategic Partner for Vietnamese Consumer Goods Company
 Investor : Global Investment Bank  Our Role : Represented the seller
 Target : FMCG manufacturer and distributor  Deal Size: Approximately US$ 20mn

 Our Services : D2 Capital represented the company in selling equity to a global bank. This was
the first investment in Vietnam undertaken by the bank and the transaction required intense
periods of document preparation as well as negotiations with both the offshore investment
committee and onshore opposing counsel.
 Outcome: Terms were concluded to the satisfaction of both sides and the bank continues to be a
shareholder three years later.



CASE 3: Growth Capital Financing of Vietnamese Technology Company
 Investor: Malaysian Financial Investor  Our Role: Represented Buyer (“Investor “)
 Target: Leading Vietnamese Tech Company  Deal Size: Approx. US$ 2mn

 Our Services: Represented investor in structuring, performing due diligence and negotiating an
equity investment.
 Outcome: D2 Capital worked with both sides to bridge cultural differences to find common
ground for investment.

CASE 4: Growth Capital Financing of Vietnamese Healthcare Company
 Investor: Singaporean Financial Investor  Our Role: Represented the Seller (“Target”)
 Target: Vietnamese Healthcare Company  Deal Size: Under US$ 5mn

 Our Services: Prepared all investment marketing materials, financial and valuation models; D2
Capital marketed the transaction globally, identifying over 15 interested investors.
 Outcome: The company selected one investor, and D2 Capital negotiated on behalf of the
company to achieve a very successful fund raising.



CASE 5: Strategic Acquisition of Vietnamese Construction Company
 Investor: European Strategic Investor  Our Role: Represented Buyer (“Investor”)
 Target: Publicly Listed Vietnamese Company  Deal Size: Over US$ 10mn

 Our Services: Executed the acquisition on behalf of the buyer for all of the outstanding shares of
the target company through open market trading and negotiated block purchases.
 Outcome: D2 Capital negotiated with all shareholders and completed the acquisition of all of the
outstanding shares of the company.

CASE 6: Strategic Partnership for Vietnamese FMCG Distributer
 Investor: Korean Strategic Investor  Our Role: Represented Seller (“Target”)
 Target: Vietnamese FMCG distributor  Deal Size: Under US$ 5mn

 Our Services: Prepared detailed business plan, financial model and investment structure options
on behalf of the seller to secure growth capital and strategic partnership
 Outcome: Transaction negotiated and closed within less than three months. In a gesture of good
faith, the Korean investor provided bridge financing for the seller until all legal procedures were
completed in order to support growth prior to official disbursement of capital.



CASE 7: Advisory of Japanese Strategic Investment into Sector Leader
 Investor: Japanese Strategic Investor  Our Role: Represented Seller (“Target”)
 Target: Construction Materials FIE  Deal Size: Over US$ 10mn

 Our Services: D2 Capital packaged the seller and worked with management to coach them on
how to speak with the investors; Assisted in the structuring and negotiation of the strategic
partnership and equity sale to a Japanese conglomerate (over 100x larger than the target).
 Outcome: We worked between management and legal teams to find the ideal solution for our
client.

CASE 8: Advisory of South African Strategic Investor into Vietnam Companies
 Investor: South African Strategic Investor  Our Role: Represent Buyer (“Investor”)
 Target: Vietnamese Technology Companies  Deal Size: N / A

 Our Services: Represent the foreign buyer in seeking Vietnamese companies for strategic
investment offering industry mapping, valuation and negotiation services; D2 Capital met with
30 leading Vietnamese companies, and recommended acquisition targets, valuation and
structuring.
 Outcome: Negotiations currently underway


Bringing Great Companies to Investors D2 Capital Partners

 The principals at D2 Capital have decades of experience working with
management teams of both large and small companies.

 We are specialists in preparing and structuring companies for
introduction to institutional and strategic investors.

 We have completed over 120 company road shows globally, comprising
of thousands of meetings, and raising billions of dollars.


...a few of our Marketing Clients. D2 Capital Partners


End Game D2 Capital Partners

Ultimately, D2 Capital Partners seeks to:
 Execute quickly; we do not want to waste your time or ours.
 Achieve maximum valuation; we want the best price as we
have incentives to do so.
 Create longevity; we consider our clients as partners with
the potential for follow-on business opportunities.
 Establish credibility; by showcasing our clients as reliable
business partners, they can access the capital markets for
future transactions with better terms.


V. Appendices D2 Capital Partners

With more than forty years of combined, international, capital
market experience, D2C is defined by Capital :

 Creation
 Deployment
 Structuring


The Scope of Our Partnership D2 Capital Partners

VC and PE Investment
Business Plan Preparation
Capital Structuring
Deal Negotiation
Due Diligence
Industry Mapping & Competitive Analysis
Post Deal Monitoring
Strategic Advisory


What Has Changed D2 Capital Partners

The Bad News
 VN remains on periphery of regional investment universe
 Risk appetite of overseas funds for high risk, emerging assets is still
depressed
 The quality of onshore capital market advisors lags far behind that of
lawyers and accountants
The Good News
 Strategic investor interest is rising
 Specialist financial investors get more access opportunity
 Funding costs are low
 Less noise = more deals can be done but …
 Preparation and structuring is critical


Poor Access + Uncertain Legal Framework = D2 Capital Partners

Vietnam M&A Slowdown… Declining Capital Flows…
Units in 1H 2009 1H 2008 % Change 2000 20
USD bn M&A M&A
1500 15

USD millions
World 914.04 1,573.33 -41.9%
1000 10
USA 289.36 569.07 -49.2%
China 38.29 62.33 38.6% 500 5

SE Asia 18.56 49.94 -62.8% 0 0
Vietnam 0.23 0.471 -50.7% 2003 2004 2005 2006 2007 2008
Total Value (USD mn) Average Deal Value

Vietnam Has Seen V Little … Shrinking Size …
70,000 -38.6% YoY 60.0 -61.5% YoY
60,000 50.0 -22.5% YoY
-62.8% YoY
50,000

USD millions
40.0
USD millions

40,000
-50.7%% 30.0
30,000 -76.3%
YoY 20.0
20,000 YoY
10,000 10.0

0 -
China SE Asia Vietnam China SE Asia Vietnam
Transaction Value (1H 2009) Transaction Value (1H 2008) Average M&A Deal Size 1H 2009 Average M&A Deal Size 1H 2008

SOURCE: Reuters, Price Water House Coopers, D2C Research


Rational Behaviour, Finally D2 Capital Partners

Investors into VN are more cautious, and getting much better
prepared, than at anytime in the past .

 Competitive and industry analysis
 Substantially more comprehensive terms, reps and warranties
 Detailed due diligence
 Post Deal monitoring

This requires that sellers step up to the challenge and meet these
needs if they want the capital.


Improving Probability of Completion D2 Capital Partners

Preparation is Key Seek Professional Help
 Detailed Business Plan  Improve credibility
 Growth strategy  Expedite investment process
 Use of proceeds  Magnify marketing coverage
 Clear exit options
 Outsource non-core competencies
 Financial Forecast Model & Valuation  Enhance position in negotiations
 De-risked model assumptions
 Return profile sensitivities
 Expand financing options
 Structure  Receive expert coaching
 Equity, Debt, Hybrid  Obtain protection

Flexible Pricing Transparency
 Convey rationality  Expect post-deal monitoring by
 Understand / Satisfy your partner Partner or third-party contractors
 Bridge the gap  Solidify trustworthy relationship
 Opportunity cost / Time value  Instill culture of Corporate Governance
 Loosen terms & conditions  Leverage network synergies
 Engineer alternative financing  Minimize misunderstandings


Most Common Deal Tripwires D2 Capital Partners

Deals tend to flounder on a regular series of factors, many of which
may be international practice - but in VN it is all innovation …

 Emotional Seller Premium
 Contingent Risks – especially from earlier raise
 Validity of Documents – are licenses even real ?
 Failure to Launch – understand the need
 Veto Rights – some things require permission
 Options – to put or call

Avoid/fix these and your chances just improved sharply


Case Study 1: Proactive Preparation D2 Capital Partners

Easing Investor Pain Strategic sales still attractive
Background 4.30% IPO
4.30% Trade Sale
CONTEXT: Secondary Sal
13.10% 30.40%
Strategic Investors in Education, Media, Alternative Energy MBO
and Construction Materials, sought / seeking potential JV
Refinancing
and / or M&A targets in Vietnam.
26.20% Other
PREPARATION: 21.70% Most Attractive /
 Macro Overview Achievable Exit Strategy
 Industry Analysis
 Sub-sector analysis
 Competitive Analysis Key Takeaways
 Target DD
 Lack of information hindering deals
STRUCTURE: requiring strategic investors to pay for
 Potential JVs professional insight and intelligence.
 M&A  Companies providing better cooperation
calm investor concerns
EXECUTION:
 Industry / Sector mapping, interviews
 Strategic Investors are actively preparing
 Potential JV Partner / Target Negotiations
for potential partnerships and so should
interested companies: improve your ranking
on investors’ list of priorities!
SOURCE: Grant Thornton Private Equity Survey 2009, D2C Research


Case Study 2: Professional Help D2 Capital Partners

Appear Serious Addressing Investor Concerns
Transparency in business activities
Background 2.00%
Operational / Cultural Fit
4.10% Growth story / Forecasts
CONTEXT: 4.10%
4.10% 22.40%
Target's management support
Strategic fit
FMCG distributor & retailer sought equity capital raise to 8.20%
Cash flow
expand into mass distribution. Regulatory hindrances in
10.20% Speed which value can be created
sensitive sector to foreign participation required extensive 18.40% Tax shields and investment savings
professional advice. Transaction closed in <3 months Brands / Products
12.20%
Track record
PREPARATION: 14.30% Investor Concerns When
 Investment Teaser Investing in Vietnam
 Business Plan Formulation
 Detailed Forecasts & Valuation Model Key Takeaways
STRUCTURE:  International caliber work and document
 Straight Equity packs enhanced management credibility
 Convertible Bond (Loan) Bridge Financing  Professional sell-side advisory services
Call Option for Ownership Rights to FMCG Co. ensured necessary provision of information
EXECUTION: to investors for faster decision turnaround
 Investor Road Show  Structuring advice provided multiple
 Term Sheet Discussions solutions to potential deal killers
 Coaching of management enhanced
negotiation techniques with investors


Case Study 3: Flexible Pricing D2 Capital Partners

Structuring Investor Returns Returns Attract Investors
Background 4%
IRR obtained on exit
8% Dividends received
CONTEXT: 8%
Professional Services Company sought capital raise with Successful integration
structured equity bonus conversion feature. 13% Improved revenue
PREPARATION: 67% Cost savings
 Investment Teaser Measuring Investment
 Business Plan / Investment Memorandum Drafting Success in Vietnam
Investor Presentation & Coaching
 Detailed Forecasts & Valuation Model

STRUCTURE:
Key Takeaways
 Standard Terms & Conditions  Detailed strategy & model frame-worked
 Convertible Bond and expedited discussions
 KPI Benchmark Bonus Equity Kicker  Management flexibility and rationality
instilled greater trust in management
EXECUTION:  Return windfall protection alleviated
 Investor Road Show
investor concerns
 Term Sheet Structuring
 Negotiations  KPI benchmark linked performance ensured
alignment of interests with investor



Case Study 4: Corporate Governance D2 Capital Partners

The Truth Reveals Itself Being fair and open matters
Background Corporate Governance

15.70% Skills / Experience of
CONTEXT: 21.40% existing management
Well established and rapidly growing services company Lack of transparency
sought equity capital for new venture; however, clause in 11.40%
shareholders agreement from previous investor presented 11.40% 21.40% Finance / debt issues
considerable risk and liability to new investors.
18.70% Important Investment
PREPARATION: Considerations / Factors
 Investment Due Diligence Report
 Model Assumptions Sensitivity Testing
 Legal Due Diligence Report Key Takeaways
STRUCTURE:  Unwillingness to provide full transparency on legal
 Standard Terms & Conditions documents can endanger deal
 Straight Equity at Holdings Group Level  Eventual cooperation by management lead to a
 MBO / LBO carve out at Subsidiary Level partnership with the new investor for MBO / LBO
of existing shareholders in Holdings subsidiary
EXECUTION:  Offshore investors now requiring extensive
 Location Inspections professional due diligence support and buy-side
 D2C Supported Negotiations advisory services.
 Third party post-deal monitoring also becoming of
greater importance to offshore investors with
limited man power, experience and resources in VN


Contact Information D2 Capital Partners

Vietnam Office:
5th Floor, Nam Minh Long Building
61A Vo Van Tan, District 3
HCMC, Vietnam

Spencer White, Managing Partner Christian Leitzinger, Managing Partner
Email: sdw@d2capitalpartners.com Email: cwl@d2capitalpartners.com
Mobile: +84-907-009-112 Mobile: +84-902-250-393
Ian Nguyen, Vice President Tat Sun Ho, Vice President
Email: ian@d2capitalpartners.com Email: tat@d2capitalpartners.com
Mobile: +84-934-164-716 Mobile: +84-121-728-8080


D2 Capital Partners: General Intro To Scope Of Services

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