MIDDLE MARKET OPPORTUNITIES IN INTERNATIONAL DEAL-MAKING: Increasingly, business knows no borders, and the pace of international deal making in the middle market is unlikely to slow.

In the feature article below, “International Deal Making: A Growing Phenomenon in the Middle Market,” Gerald Turner, a FOCUS Managing Director, describes how the firm is expanding the reach of its partners to access opportunities worldwide and similarly finding buyers, strategic partners or acquisition candidates for the firm’s US-based clients.

Prior to joining FOCUS, Gerald Turner co-founded and chaired Potomac Capital Group, LLP, and for over ten years, was active in the MBO/MBI arena in the UK. He also served as Vice President and Chief Financial Officer and then Executive Vice President, Tarmac America Inc., a $600 million division of UK-based Tarmac PLC where he raised over $100 million for the UK parent from divestitures.

For twenty years, Mr. Turner enjoyed a diverse career with the American Can Company. He also is Investment Director of Seraphim Capital, a London-based early stage venture capital fund.

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Active FOCUS Deals
Operating nationally and internationally, FOCUS is currently working with buy- and sell-side corporate clients, private equity groups, holding companies and late stage venture capital firms in the following areas:

• Aerospace
• Automotive
• Building Products
• Business Process Outsourcing
• Business Services
• Call Center
• Construction
• Diagnostics
• Distribution
• Education and e-Learning
• Energy, Oil and Gas
• Food and Beverage
• Government Contracting
• Healthcare
• Information Technology Services and Software
• International
• Manufacturing
• Media and Publishing
• Medical Devices and Equipment
• Metals and Mining
• Payment Systems
• Professional Services
• Retail
• RFID Technology
• Satellite Communications
• Security Systems and Services
• Supply Chain Management
• Systems Integration
• Technology
• Telecomm and Wireless
• Transportation

We have executed dozens of transactions in a range of market segments, but the same fundamentals apply across all of them. Our on-going transaction process provides us with up-to-the-minute market knowledge in these sectors that may be of corporate development interest to you.

Inquiries should be addressed via e-mail to info@focusbankers.com, by telephone to 202-470-1973 or by fax to 202-785-9413.

FOCUS CLOSES THREE DEALS

Terra Renewal Services Has Acquired Soil Farming

FOCUS LLC initiated the transaction, acted as financial advisor to, and assisted with the negotiations as the representative of Soil Farming, Inc. of Oklahoma, a diversified oil field services company specializing in the disposal of drilling fluids and solids, utilizing environmentally “green” methods. Terra Renewal Services, a portfolio company of Saw Mill Capital of New York, is one of the largest privately held wastewater residual management companies in the US. Read more....

India-Based Pradot Technologies Has Acquired GroupOne Healthsource
Acquisition Reinforces Trend of Foreign Buyers Buying US Companies through “Dual Shore” Strategy

FOCUS LLC initiated the transaction, acted as financial advisor to, and assisted with the negotiations as the representative of India-based Pradot Technologies, a business process outsourcing (BPO) firm that delivers healthcare administrative support services to small- and medium-sized hospitals and physician practices. GroupOne Healthsource is a full-service healthcare billing, technology and consulting company based in St. Louis, MO.

The acquisition was contingent on a two-month offshore trial of billing and support services from GroupOne Healthsource to Pradot Technologies. The trial period exceeded expectations, and the overseas deal was finalized. “Through this dual shore strategy, Pradot was able to triple its revenue in less than a year, and GroupOne was provided an exit strategy without laying off employees,” said Brad Fleisher, Managing Director, FOCUS. Read more....

Integrity Media is Recapitalized by JP Morgan/Chase

FOCUS LLC initiated the transaction, acted as financial advisor to, and assisted with the negotiations as the representative of Integrity Media, Inc., a communications company that produces, publishes and distributes Christian music, books, greeting cards and other related products. Integrity Media has been recapitalized with a senior secured revolving credit facility by JP Morgan/Chase. Read more....

International Deal Making: A Growing Phenomenon in the Middle Market.

By Gerald Turner, Managing Director, FOCUS

International deal making has played a role at FOCUS for many years, primarily with Canadian and UK firms. Recently, however, with the growth of businesses for which borders are relatively meaningless -- IT, security and web applications, for example -- this modest flow has become a stream and now a flood.

Clearly, the change in relative currency values is playing a role, particularly when it comes to foreign interest in US acquisitions, but the prime reason is that increasingly business knows no borders. To be a player in world markets even relatively young companies need to venture abroad and seize the day.

Nearly Three-Quarters of 2007 FOCUS Deals Involved Buyers from Abroad

Of the 11 most recent FOCUS deals in 2007, eight have involved buyers from abroad. Countries represented include Portugal, India, Sweden and the UK. As this is written, the firm represents a French chateau fine wine producer, and a UK-based specialized aerospace business supplying critical parts to both Boeing and Airbus. Both may find US acquirers. Similarly, a US business intelligence company which we are representing for sale may well find a Western European-based buyer from among the world class companies in that space which are domiciled there.

Capital Raising is Expanding Abroad

Nor has capital raising remained confined within national borders. Over the last three years, for example, more than 70 US companies, usually young technology companies, have found it easier or otherwise advantageous to raise capital (Series B/C) on London’s junior market (AIM). During the last 18 months FOCUS has advised several such companies. Indian and Chinese companies have realized the same opportunity (the first Chinese company was listed on the AIM market in spring, 2006). Additionally, Toronto’s junior market (TSX) actively promotes its merits to US middle market companies.

US Funds Are Opening Offices in Europe and Asia

Even in the world of venture capital, one of whose traditional mantras has been “if I can’t get there in two hours, I’m not interested,” times are changing fast. Many US funds have opened offices in Europe and increasingly in Asia too. FOCUS, through its joint venture with the New Vantage Group (NVG-Focus, LLC), represents a group of US investors, largely private, as a general partner in a London- based venture fund, Seraphim Capital, which invests in UK technology companies. Ten years ago -- even five years ago -- such a concept would have been unthinkable.

Among its senior staff/executives, FOCUS counts individuals from Canada, India, Brazil, Italy and the UK. Local knowledge and experience come into play here, and, in some instances the ability to speak the language is an important factor in establishing the trust that is a necessary precursor to effective deal making.

Membership in M&A Europe is Expanding the Reach of FOCUS Partners

To enhance its position internationally, FOCUS recently has become a correspondent in M&A Europe, a young (founded in 2004) multi-national M&A organization based in Western Europe (www.m-and-a-europe) devoted to M&A deal making in the middle market. Despite its name, M&A Europe is seeking to be a worldwide organization. FOCUS aligns with the group’s philosophy because of the experience level of the participants and the exclusive members from each country.

M&A Europe includes members in Western Europe such as T&T Mergers & Acquisitions, Amsterdam, Holland; MBA Capital, Bordeaux, France; Rokade, Oslo, Norway and M&A Investments, Tel Aviv, Israel. FOCUS expands its reach for US opportunities and similarly to enjoy an enhanced capability to find buyers, strategic partners or acquisition candidates for our US-based clients.

The relative value of currencies will continue to ebb and flow and protectionism may limit international mega deals, but the pace of international deal making in the middle market is unlikely to slow – and FOCUS will be an increasingly active participant.

For more information about FOCUS or to find an investment banker in your industry, please visit www.focusbankers.com.

RECOMMENDED READING: Doug Rodgers Guest Column: “Fear Not the Foreign Investor”

Washington Business Journal (Dec. 21, 2007) features a Guest Column by FOCUS CEO Douglas Rodgers. In the column, Doug concludes, “Despite recession rumors, we predict the US middle market will continue to thrive, thanks to private equity firms offsetting the subprime credit meltdown, changing demographics and increasing foreign investments.” To read the complete column, go to:
http://washington.bizjournals.com/washington/stories/2007/12/24/
editorial1.html.

FOCUS Web Watch
Pradot Case Study Now Available

A fascinating, instructive new Case Study based on the acquisition of GroupOne Healthsource by India-based Pradot Technologies is now available. By purchasing GroupOne Healthsource, Pradot now has a strong US presence, and is increasing service offering and revenue in both countries. The Pradot deal represents an emerging trend among middle market Indian buyers in the US market. To download the new Pradot Case Study, Click Here...