US bancorp PIPER JAFFRAY
COMPANIES
U.S. BANCORP ACQUIRES
PIPER JAFFRAY COMPANIES INC.
DECEMBER 15, 1997
STRATEGIC OVERVIEW
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o Focuses on our clients' needs
-- Equity and debt underwriting
-- Equity research, sales & trading
-- M&A advisory services
-- Expanded private financial services
-- Expanded retail brokerage network
o Regionally based -- nationally competitive
o Provides business line synergies
o Builds shareholder value - IRR > 16%
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TRANSACTION SUMMARY
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Subsidiary Name: U.S. Bancorp Piper Jaffray
Addison L. Piper, Chairman & CEO
Purchase Price: $730 million
Payment Method: Cash
Per Share: $37.25
Accounting Treatment: Purchase accounting
Due Diligence: Completed
Anticipated Closing: 2Q98
Employee Retention: Retention bonuses to key employees
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PRICING
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RECENT REGIONAL PUBLICLY
ACQUISITION SECURITIES FIRM TRADED
MULTIPLE ACQUISITIONS(C) PEERS(D)
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Last 12 months revenues 1.2x 1.3x 1.6x
Last 12 months net income 13.5x(a) 14.4x 18.1x
Estimated 1998 net income 11.2x(b) 16.0x
Book Value 4.2x 4.3x 3.1x
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(a) Represents latest 12 months net income adjusted to a normalized operating
margin (15%).
(b) Represents purchase price divided by 1998 estimated net income plus fully
phased in cost savings.
(c) Alex Brown, Dillon Read, Robertson Stephens, Montgomery Securities,
Oppenheimer & Co., Wheat First, Furman Selz. Source: Company presentations
(d) Raymond James, EVEREN, Interra, Morgan Keegan and McDonald & Co. Source:
Company 10Qs. Stock prices as of 12/12/97.
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EXCELLENT GEOGRAPHIC FIT
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o 1,000 U.S. Bank offices combined with 89 Piper Jaffray retail offices in 19
states.
o Will comprise the 11th largest retail brokerage network in the U.S.
MAJOR CITIES:
Minneapolis/St. Paul
Denver
Seattle
Portland
Milwaukee [Map of U.S.]
Kansas City
San Francisco
Des Moines
Phoenix
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COMPLEMENTARY BUSINESS STRENGTHS
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VALUE ADDED BY PIPER JAFFRAY VALUE ADDED BY U.S. BANCORP
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o Corporate finance capabilities o Extensive regional corporate
relationships
-- Underwriting - debt & equity -- 40,500 middle market customers
-- Research -- Middle market strength
-- M&A advisory -- Commercial banking products &
services
o Over $12 billion of assets under o Over $55 billion of assets
management under management
o Private client services/products o 52,000 private banking and personal
o Trading expertise trust relationships
o Retail and corporate customers o Significantly greater distribution
-- $42.8 billion of clients funds channels
-- 122,000 households -- Retail banking products &
services
-- 4.0 million households
o Technology investment
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Leading diversified financial services provider to
corporations, municipalities and individuals in our
geographic territory.
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CAPITAL MARKETS CAPABILITIES
INVESTMENT BANKING
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FIXED INCOME MERGERS & ACQUISITIONS EQUITY
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- -- Managed/co-managed 785 -- 28 transactions worth -- Managed/co-managed 38
offerings raising $14 $2.6 billion in 1997 public offerings raising
billion in fiscal 1997 -- Focused industry $2.9 billion in fiscal 1997
- -- Among top ten tax-exempt expertise -- Raised over $265 million in
underwriters private equity in recent years
INSTITUTIONAL SALES & TRADING RESEARCH
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- -- One of the largest non-New York based -- Industry focused
sales and Nasdaq trading firms -- Institutionally driven
- -- 1.9 billion Nasdaq shares traded in fiscal product
1997 -- 50 research analysts
- -- 38 institutional equity sales executives
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RETAIL BROKERAGE AND
PRIVATE BANKING CAPABILITIES
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o 1,235 investment executives in 89 offices
o $6.2 billion in individual assets under management
o 400,000 total retail accounts
o $42.8 billion of client funds in brokerage accounts
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[Bar graph titled TOTAL ASSETS UNDER MANAGEMENT showing the following
information]
Year Total Assets
($ billions)
1990 12.9
1991 15.0
1992 17.3
1993 21.7
1994 24.6
1995 29.2
1996 39.3
3Q97 55.3
Pro Forma 68.1
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SUMMARY
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o Focuses on our clients' needs
- Equity and debt underwriting
- Equity research, sales & trading
- M&A advisory services
- Expanded private financial services
- Expanded retail brokerage network
o Regionally based -- nationally competitive
o Provides business line synergies
o Builds shareholder value - IRR > 16%
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