Good-morning esteemed panel members.

We are the Team Though Leaders and we are here to

resolve the conundrum faced by Anna Stancil, Principal at PQR Capital in choosing an LBO candidate.
The Companies that have been shortlisted are Columbia Sportswear, An North America outdoor
apparel & footwear firm. Dialog Semiconductor, a UK based Fabless IC designer and Tupperware
Brands, a global D2C holding company in home equipment and personal care products.

Rutvik will begin with the evaluation of the three companies for an LBO followed up with an in-depth
analysis of the chosen company & its macro-economic outlook.

Dharmanshu would then take up the investment highlights for the PQR Capital followed up with a
Comparables Valuation.

I would then move on to the DCF & LBO analysis followed up with a strategic buyer recommendation
for the chosen company in 2021.

Handing over to Rutvik..

We identify Columbia Sportswear as a good LBO candidate due to some reason assigned in the
following slides as well as suggest reason for not picking the other two companies. Then we describ

Columbia Sportswears valuation was arrived at using four methods, while the premium was arrived
using an conservative case estimates for the Buyout. We have also outlined Adidas as a strategic exit
for Columbia Sportswear, which we would look at in depth late in the slides.

Rue 21 acquisition by Apax

Percentile.inc

Percentile

Thanks Dharmanshu!!

Moving on to DCF Analysis:

Speaking of Growth Assumptions:

We have analysed 5 cases:

Base Case with a CAGR of 5.97% as per consensus estimates over the projection period.

Upside Case where the company performs better than the industry with a CAGR of 7.65%

A management case with management projections with a CAGR of 6.01%

And two downside cases, to model systematic & un-systematic risk.

COGS and SG&A & net Working capital have been reduced with historical trends on account of
ongoing ERP implementation being implemented since 2012 & expected to through till 2019.

Moving on to WACC:

Risk Free Rate: 20 year US Treasury Bond Rate at 1.9%, Cost of Pre Tax Debt from Comparable
Companies rated Debt, Equity Risk Premium from Damodaran July, 16 estimates at 6.3% and 5 year
Regression Beta at 0.96

LTM EBIDTA has been taken to value Terminal Value, & our Tornado Chart reveals a valuation range
of 63 to 80 dollars for different simulated cases.

Now going on to LBO Analysis:

Our LBO analysis begins from an estimation of Target Share Price from Comparables & DCF analysis
of 64.5 dollars which is 18.8% premium over September 9 share price & 15.32% premium over past
30 day share price.

As per William Blair Leveraged Market Survey, we have targeted a leverage EBIDTA multiple in the
band of 6.0x to 6.5x.

Debt is broken down into two components Term Loan & High Yield Bond.

The Term Loan of 1.5 billion dollars is at 32% of the total sources of fund. Its interest rate is the sum
of floating libor and a fixed spread. The floating libor is plotted from the Eurodollar futures and fixed
spread of 250 basis points obtained from the debt ratings of comparable companies.

The second part of leverage is High Yield Debt at 8.7% of the total sources of funds.

Exit Multiple is taken at 13.9x equal to the implied entry EBIDTA multiple.

The Revenue & other projections are as taken in the DCF, with five different cases of Base, Sponsor,
Management & two downside cases.

Thus, with the Sponsor case the entire deal yields us an IRR of 24.14% and cash return of 2.948x with
exit in 2021.

Moving on to the Deleveraging Structure:

Our Term loan has been taken to have a tenure of 10 years with a 10% annual amortization structure
& the High Yield Bond having a term of 5 years with a Bullet Payment co-terminus with the PQRs
exit.

Now Analysing the Credit Statistics:

EBIDTA/Total Interest Expense is above the recommended level of 2.0x & (EBIDTA-Capex)/Total
Interest Expense is more than 1.6x. Leverage profile of 6.39x is in line with LBO deals albeit a bit on
the higher side.

Now let us see The IRR in different scenarios:

The sponsor case of 24.14% IRR has been modelled in the previous analysis. But even in the other
scenarios including downside case the IRR is above the hurdle level of 20%.
Moving Further:
This slide presents the summary of our entire valuation procedure. We recommend a final deal price
in the range of 64 to 70 dollars per share. Further in this price band our IRR stays in the range of 20
to 25%.

Going on to Strategic Buyer in 2021:

We prepared our initial shortlist on the basis of Market Cap, at least being twice that of Columbia
Sportswear and in similar industry through Global Industry Classification System & TRBC.

We shortlisted five companies viz Nike, Addidas, VF Corp, Under Armour & Lululemon. We negated
Nike on the basis of a strong US presence and its lack of focus on outdoor adventure sports category.
On the other hand Addidas has shown interest in this segment when it acquired Five Ten USA, a
climbing and hiking apparel & shoes Company. VF Corp was negated as it has directly competing
brands like The North Face & Timberland. Lululemon was negated due to abysmal performance &
low growth prospects. UnderArmour & Addidas both could be a strategic buyer, but Underarmour
was ruled out as 87% of its revenues come from North America, similar to Columbia.

Overall Rationale of the Deal in 2021:

Addidas has developed a comprehensive five year strategic roadmap till 2020 called Creating the
New where they are focussing on organic growth through its brands viz. Addidas, Reebok &
TaylorMade. A key focus being generating strong cash flows.

Bu 2021, Addidas having implemented its plan, would be intent to grow inorganically by acquiring
strong niche sports brands up for sale, while the PQR capital would be looking to make an exit from
Columbia Sportswear.

Moving on to Synergies:

First, Financial Synergies in term of predictable & stable cash flows: At present 75% revenues of
Columbia Sportswear are concentrated in last two quarters, while Addidas has a spike in the first
two.

Second, Geographical & Product Expansion: At present only 20% revenues of Addidas come from
North America, where it has a clear intention of growing. Acquiring Columbia Sportswear would
strengthen In US. Further Addidas would strengthen its position in outdoor adventure sports
category where it is a minor player.

Third, Economies of Scale: Both Addidas & Columbia Sportswear have their manufacturing
outsourced in the China & South-East Asia region. At present COGS of Columbia are 25% of Addidas
in value terms. Merging the two would build economies of scale in production.

Fourth, Acquiring Brand Names: Addidas would acquire four prominent brand names each successful
in its niche segment.

Fifth, Combination of different functional strengths: Columbia is strong in product design including
electronics, material & graphic design while Addidas being strong in marketing, sales, distribution &
supply chain management.

Thus owing to the above factors, we recommend Addidas as the Strategic Buyer of Columbia
Sportswear in 2021.
We first prepared a shortlist of potential acquirers.

[Columbia Sportswears] diversification into a less weather-sensitive company, combined

with a growing direct-to-consumer business (aided by e-commerce), improved ERP system
and an owned outlet network have helped contribute to over 250 basis points in [operating
profit margin] improvement over the past five years, Citi Research analyst Kate McShane
wrote. The markets may stay choppy but [Q4] results further reinforce our belief that
Columbia is headed in the right direction.

The Jones Group Inc, ,