1
FORUM RETIREMENT PARTNERS, L.P.
PRESENTATION TO THE
SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS
ROBERT A. INNAMORATI & CO.
INVESTMENT & MERCHANT BANKERS
OCTOBER 13, 1995
2
FORUM RETIREMENT PARTNERS, L.P.
TABLE OF CONTENTS
I. OVERVIEW OF ENGAGEMENT
II. VALUATION METHODOLOGIES
A. DISCOUNTED CASH FLOW ANALYSIS
B. CAPITALIZATION OF NET OPERATING INCOME ANALYSIS
C. ANALYSIS OF COMPARABLE PUBLICLY-TRADED COMPANIES
D. ACQUISITION PREMIUM ANALYSIS
III. ADDITIONAL INFORMATION
A. PROPOSED ACQUISITION PRICE VS. HISTORIC TRADING PRICES
ROBERT A. INNAMORATI & CO OCTOBER 13,1995
3
FORUM RETIREMENT PARINERS, L.P.
OVERVIEW OF ENGAGEMENT
- - ROBERT A. INNAMORATI & CO. ("RAI&Co") has been retained by the Special
Committee of the Board of Directors of Forum Retirement, Inc. ("FRI") for the
purpose of rendering a written opinion ("Opinion") as to the fairness, from a
financial point of view, to the unit holders of Forum Retirement Partners,
L.P. ("FRP") of the consideration to be received by such unit holders in the
proposed acquisition by Forum Group, Inc. of units of limited partnership
interest of FRP.
- - In arriving at its Opinion, RAI&Co relied upon and assumed the accuracy
of the following:
- Financial and other information concerning the business, operations and
prospects of FRP obtained by RAI&Co from FRP and its affiliates.
- The terms of the Offer to Purchase as provided by FRP.
- Publicly available information with respect to the securities
outstanding.
- Other information and data obtained by FRP from public sources.
- - In arriving at its Opinion, RAI&Co has not done the following:
- Made or obtained any independent evaluations or appraisals of the assets
or liabilities of FRP,
- Conducted any physical inspection of the properties and facilities of
FRR
ROBERT A. INNAMORATI & CO. October 13,1995
4
FORUM RETIREMENT PARNERS, L.P.
DISCOUNTED CASH FLOW ANALYSIS
BASED ON MANAGEMENT'S 10 - YEAR PROJECTIONS
($'s in millions, except per unit and per room data) 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Average Price Per Room $89 $95 $92 $98 $101 $107 $104 $110 $113 $117
Average Occupancy 94.0% 94.0% 94.0% 94.0% 94.0% 94.0% 94.0% 94.0% 94.0% 94.0%
Units in Place 1,617 1,617 1,617 1,617 1,617 1,617 1,617 1,617 1,617 1,617
Expansion Units 5 105 100 173 195 304 304 304 304 304
Total Revenues $49.1 $55.1 $52.0 $57.9 $60.8 $68.7 $65.5 $71.2 $73.3 $75.5
Net Operating Income $5.4 $7.3 $5.3 $7.5 $8.3 $14.8 $11.9 $15.4 $15.9 $16.4
Net Cash Flow Available For Distributions $0.0 $1.5 $0.0 $1.7 $2.5 $6.1 $9.6 $9.0 $10.1 $10.5
Percentage of Net Cash Flow Distributed 0.0% 0.0% 0.0% 0.0% 0.0% 72.8% 61.2% 73.9% 74.3% 74.8%
Partnership Value
Assuming Capitalization Rate of 10% NOI Debt Cash in Terminal Year
- ----------------------------------- --- ---- ---- -----------------
Value Per Unit
-----------------
NPV @ 12% $54.4 $3.56 $16.4 $35.4 $6.7 $42.9
NPV @ 15% $127.2 $2.80
NPV @ 18% $34.0 $2.23
NPV @ 20% $29.3 $1.91
Partnership Value
Assuming Capitalization Rate of 11% NOI Debt Cash in Terminal Year
- ----------------------------------- --- ---- ---- -----------------
Value Per Unit
-----------------
NPV @ 12% $49.3 $3.22 $16.4 $35.4 $6.7 $112.3
NPV @ 15% $38.9 $2.55
NPV @ 18% $30.9 $2.02
NPV @ 20% $26.6 $1.74
Partnership Value
Assuming Capitalization Rate of 12% NOI Debt Cash in Terminal Year
- ----------------------------------- --- ---- ---- -----------------
Value Per Unit
-----------------
NPV @ 12% $45.1 $2.95 $16.4 $35.4 $6.7 $99.9
NPV @ 15% $35.6 $2.33
NPV @ 18% $28.3 $1.85
NPV @ 20% $24.4 $1.60
Notes:
(1) NPV = Net Present Value
(2) Per unit calculation assum es 15,285,248 units outstanding
(3) Projections w ere prepared by the General Partner
5
FORUM RETIREMENT PARNERS, L.P.
DISCOUNTED CASH FLOW ANALYSIS
BASED ON MANAGEMENT'S 7 - YEAR PROJECTIONS
($'s in millions, except per unit and per room data) 1995 1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- ---- ----
Average Price Per Room $89 $95 $92 $98 $101 $107 $104
Average Occupancy 94.0% 94.0% 94.0% 94.0% 94.0% 94.0% 94.0%
Units in Place 1,617 1,617 1,617 1,617 1,617 1,617 1,617
Expansion Units 5 105 100 173 195 304 304
Total Revenues $49.1 $55.1 $52.0 $57.9 $60.8 $68.7 $65.5
Net Operating Income $5.4 $7.3 $5.3 $7.5 $8.3 $14.8 $11.9
Net Cash Flow Available For Distributions $0.0 $1.5 $0.0 $1.7 $2.5 $6.1 $9.6
Percentage of Net Cash Flow Distributed 0.0% 0.0% 0.0% 0.0% 0.0% 72.8% 61.2%
Partnership Value
Assuming Capitalization Rate of 10% NOI Debt Cash in Terminal Year
- ----------------------------------- --- ---- ---- -----------------
Value Per Unit
-----------------
NPV @ 12% $51.5 $3.37 $14.8 $41.2 $5.8 $103.4
NPV @ 15% $43.4 $2.84
NPV @ 18% $36.8 $2.41
NPV @ 20% $33.0 $2.16
Partnership Value
Assuming Capitalization Rate of 11% NOI Debt Cash in Terminal Year
- ----------------------------------- --- ---- ---- -----------------
Value Per Unit
-----------------
NPV @ 12% $45.1 $2.95 $14.8 $41.2 $5.8 $90.0
NPV @ 15% $38.0 $2.49
NPV @ 18% $32.2 $2.11
NPV @ 20% $28.9 $1.89
Partnership Value
Assuming Capitalization Rate of 12% NOI Debt Cash in Terminal Year
- ----------------------------------- --- ---- ---- -----------------
Value Per Unit
-----------------
NPV @ 12% $39.7 $2.60 $14.8 $41.2 $5.8 $78.7
NPV @ 15% $33.5 $2.19
NPV @ 18% $28.4 $1.85
NPV @ 20% $25.4 $1.66
Notes:
(1) NPV = Net Present Value
(2) Per unit calculation assum es 15,285,248 units outstanding
(3) Projections were prepared by the General Partner
6
FORUM RETIREMENT PARNERS, L.P.
DISCOUNTED CASH FLOW ANALYSIS
BASED ON MANAGEMENT'S 5 - YEAR PROJECTIONS
($'s in millions, except per unit and per room data) 1995 1996 1997 1998 1999
---- ---- ---- ---- ----
Average Price Per Room $89 $95 $92 $98 $101
Average Occupancy 94.0% 94.0% 94.0% 94.0% 94.0%
Units in Place 1,617 1,617 1,617 1,617 1,617
Expansion Units 5 105 100 173 195
Total Revenues $49.1 $55.1 $52.0 $57.9 $60.8
Net Operating Income $5.4 $7.3 $5.3 $7.5 $8.3
Net Cash Flow Available For Distributions $0.0 $1.5 $0.0 $1.7 $2.5
Percentage of Net Cash Flow Distributed 0.0% 0.0% 0.0% 0.0% 0.0%
Partnership Value
Assuming Capitalization Rate of 10% NOI(1) Debt Cash in Terminal Year
- ----------------------------------- ------ ---- ---- -----------------
Value Per Unit
-----------------
NPV @ 12% $39.1 $2.55 $12.0 $44.2 $5.3 $65.0
NPV @ 15% $34.7 $2.27
NPV @ 18% $30.9 $2.02
NPV @ 20% $28.6 $1.87
Partnership Value
Assuming Capitalization Rate of 11% NOI(1) Debt Cash in Terminal Year
- ----------------------------------- ------ ---- ---- -----------------
Value Per Unit
-----------------
NPV @ 12% $32.5 $2.13 $12.0 $44.2 $5.3 $54.1
NPV @ 15% $28.9 $1.89
NPV @ 18% $25.7 $1.68
NPV @ 20% $23.8 $1.56
Partnership Value
Assuming Capitalization Rate of 12% NOI(1) Debt Cash in Terminal Year
- ----------------------------------- ------ ---- ---- -----------------
Value Per Unit
-----------------
NPV @ 12% $27.1 $1.77 $12.0 $44.2 $5.3 $45.1
NPV @ 15% $24.0 $1.57
NPV @ 18% $21.4 $1.40
NPV @ 20% $19.8 $1.30
Notes:
(1) NOI IN 1999 excludes the effect of capital expenditures
(2) NPV = Net Present Value
(3) Per unit calculation assum es 15,285,248 units outstanding
(4) Projections were prepared by the General Partner
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FORUM RETIREMENT PARNERS, L.P.
CAPITALIZATION OF NET OPERATING INCOME ANALYSIS
LAST 12 MONTHS ENDING JUNE 30, 1995
($'S IN THOUSANDS, EXCEPT PER UNIT DATA)
Net Operating Income (1): $7,5 74
CAPITALIZATION RATES
---------------------------------------------------------------------
8.00% 9.00% 10.00% 11.00% 12.00% 13.00%
---------------------------------------------------------------------
Hypothetical Enterp rise Value $94,675 $84,156 $75,740 $68,855 $63,117 $58,262
Minus LTD as of June 30, 1995 $49,482 $49,482 $49,482 $49,482 $49,482 $49,482
Plus Cash as of June 30, 1995 $6,273 $6,273 $6,273 $6,273 $6,273 $6,273
Hypothetical Equity Value $51,466 $40,947 $32,531 $25,646 $19,908 $15,053
Resulting Value Per Unit (2) $3.37 $2.68 $2.13 $1.68 $1.30 $0.98
(1) Based on FRP's perform ance for the 12 m onths ended June 30, 1995. Net
operating income is defined as earnings before interest, taxes, depreciation
and amortization, less ordinary annual capital expenditures of $1,000 per
unit.
(2) Based on 15,285,248 units outstanding.
(3) LTD is long term debt including current maturities.
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FORUM RETIREMENT PARNERS, L.P.
CAPITALIZATION OF NET OPERATING INCOME ANALYSIS
LAST 12 MONTHS ENDING DECEMBER 31, 1995
($'S IN THOUSANDS, EXCEPT PER UNIT DATA)
Net Operating Income (1): $7,8 84
CAPITALIZATION RATES
---------------------------------------------------------------------
8.00% 9.00% 10.00% 11.00% 12.00% 13.00%
---------------------------------------------------------------------
Hypothetical Enterprise Value $98,550 $87,600 $78,840 $71,673 $65,700 $60,646
Minus LTD as of 12/31/95 (2) $49,007 $49,007 $49,007 $49,007 $49,007 $49,007
Plus Cash as of 12/31/95 (3) $5,500 $5,500 $5,500 $5,500 $5,500 $5,500
Hypothetical Equity Value $55,043 $44,093 $35,333 $28,166 $22,193 $17,139
Resulting Value Per Unit (4) $3.60 $2.88 $2.31 $1.84 $1.45 $1.12
(1) Based on FRP's estim ated perform ance for the 12 months ended 12/31/95.
Net operating incom e is defined as earnings before interest, taxes,
depreciation and am ortization, less ordinary annual capital expenditures of
$1,000 per unit.
(2) LTD is long term debt including current m aturities.
(3) Management of FRP verbally estimated cash balance between $5 and $6 million
at 12/31/95.
(4) Based on 15,285,248 units outstanding.
9
FORUM RETIREMENT PARNERS, L.P.
ANALYSIS OF COMPARABLE PUBLICLY-TRADED COMPANIES
COMPARABLE COMPANY DESCRIPTIONS
10
FORUM RETIREMENT PARNERS, L.P.
ANALYSIS OF COMPARABLE PUBLICLY-TRADED COMPANIES
COMPARABLE COMPANY DESCRIPTIONS
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FORUM RETIREMENT PARNERS, L.P.
ANALYSIS OF COMPARABLE PUBLICLY-TRADED COMPANIES
COMPARABLE COMPANY DESCRIPTIONS
12
FORUM RETIREMENT PARNERS, L.P.
ANALYSIS OF COMPARABLE PUBLICLY-TRADED COMPANIES
COMPARABLE VALUE SUMMARY
($'S IN THOUSANDS, EXCEPT PER UNIT DATA)
Based on FRP's
Based on FRP's
Valuation Method Last 12 Month Based on FRP's 1 2/31/94 FYE Results Results Ended 6 /3 0/9 5 1 2/31/95 FYE Forecast
Applying Last 12 Months Operating Data of Comparables:
Current Market Capitalization (1) $71.8 $72.1 $77.4
12 Month Average Market Capitalization (2) $73.3 $73.7 $79.0
Applying Annual Historical Operating Data of Comparables:
Current Market Capitalization (1) $88.1 $88.5 $94.6
12 Month Average Market Capitalization (2) $91.6 $92.0 $98.4
Average Enterprise Value (3) $81.2 $81.6 $87.3
Value Per Unit Calculation:
Less Long Term Debt of $48.5 million (as of 6/30/95) (4) $32.7 $33.1 $38.8
Plus Cash and Equivalents (as of 6/30/95) $39.0 $39.3 $45.1
Partnership Equity Value per Unit (5) $2.55 $2.57 $2.95
(1) Current Market Capitalization is defined as the current num ber of shares
outstanding m ultiplied by the current m arket price per share.
(2) The Twelve Month Average Market Capitalization is calculated by multiplying
the average price for the period by the average shares outstanding for the
period. Please note that the 12 Month Average Market Cap. for Community
Care is really for a 2 month period, the period since it went public.
(3) Enterprise Value is defined as market capitalization plus long term debt
less cash and equivalents.
(4) Long term debt excludes current maturities.
(5) Assuming 15,285,248 partnership units outstanding.
13
FORUM RETIREMENT PARNERS, L.P.
ANALYSIS OF COMPARABLE PUBLICLY-TRADED COMPANIES
COMPARABLE VALUE SUMMARY
($'S IN THOUSANDS, EXCEPT PER UNIT DATA)
For the For the
For Fiscal Year Last Twelve Months Fiscal Year
Ended 12/31/94 Ended 6/30/9 5 Ended 12/31/95E
Net Revenues (1) $47.1 $48.9 $49.4
EBITDA (2) $9.2 $9.2 $9.5
$9.191
EBIT (3) $5.7 $5.7 $5.8
Net Income $0.3 $0.4 $1.4
(1) Other incom e in 12/31/95E assumed to be $240,000
(2) Earnings before interest, taxes, depreciation and amortization
(3) Earnings before interest and taxes
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FORUM RETIREMENT PARNERS, L.P.
Target Company FRP Alpine Meadow s of Tahoe Inc
Acquirer Providence Health Care Inc FGI(2) Pow dr Corp Multicare Cos Inc
Date Announced 09/25/95 01/21/94 02/01/94
Completed/Pending ("C" / "P") P C C
Offer Price/Share (Unit) $2.83 $10.67 $7.50
Total Value (mil.) $16.6 (3) $37.2 $27.7
Stock Premium : Prior Periods
1 Day (%) 41.5% 64.2% 122.2%
1 Week (%) 50.9% 64.2%
4 Weeks (%) 130.8% 41.5% 64.2% 130.8%
Offer Price Per Share (Unit) $2.83 $10.67 $7.50
to EPS 116.6 x 35.5 x -
Stock Price 4 Weeks Prior $2.00 $6.50
to Book Value $3.25 0.8 x - 1.9 x
to EPS 82.4 x 21.7 x -
Total Equity Value (m il.) $39.0 $34.1
to Net Income $31.8 105.1 x 29.4 x
Long-Term Debt to -
Stockholder's Equity 1.3 x 0.9 x
Total Liabilities to 4.2 x
Stockholder's Equity 1.8 x 1.6 x
Stockholders' Equity 6.3 x
as a% of Total Assets 35.2% 37.9% 13.6%
Total Enterprise Value (m il.) $76.7 $49.4 $55.7
to Sales 1.6 x 1.5 x
to Cash Flow (EBITDA) 1.6 x 8.3 x - -
(1) Data provided by Securities Data Company, Inc. Eighteen transactions were
identified for the period 1/1/94 to 10/3/95 in the total value range of
$10 to $50 m illion.
(2) Based on LTM data available at 6/30/95.
(3) $2.50 x number of units not already owned by Forum Group, Inc.
ROBERT A. INNAMORATI & CO. October 13, 1995
15
FORUM RETIREMENT PARNERS, L.P.
Target Company Banyan Mortgage Investors LP General Cable(Cie Gen de Eaux)
Acquirer Indianapolis New spapers THSP Inc W assall PLC Central New spapers Inc
Date Announced 04/19/94 05/05/94
Com pleted/Pending ("C" / "P") 06/24/94 C C C
Offering Price/Share (Unit) $2.50 $6.00
Total Value (m il.) $10,000.00 $24.3 $35.9 $35.9
Stock Prem ium : Prior Periods
1 Day (%) - 17.1% -
1 Week (%) - 21.5%
4 Weeks (%) - - 11.6% -
Offer Price Per Share (Unit) $2.50 $6.00
to Book Value $10,000.00 - 0.6 x
to EPS - -
Stock Price 4 Weeks Prior - $5.38
to Book Value - 0.5 x
to EPS - - - -
Total Equity Value (m il.) $28.1 $77.8
to Net Income $57.7 - - -
Long-Term Debt to
Stockholder's Equity - 2.1 x -
Stockholder's Equity - 3.4 x
Stockholders' Equity -
as a% of Total Assets - 22.5% -
to Sales - 0.5 x
to Cash Flow (EBITDA) - - 16.2 x -
to Operating Income - 155.3 x -
(1) Data provided by Securities Data Company, Inc. Eighteen transactions were
identified for the period 1/1/94 to 10/3/95 in the total value range of
$10 to $50 m illion.
ROBERT A. INNAMORATI & CO. October 13, 1995
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FORUM RETIREMENT PARNERS, L.P.
Target Company R2 Medical System s Inc Service Fracturing Co
Acquirer Sam son Energy Co LP Cardiotronics System s Inc Now sco W ell Service Ltd Sam son Properties Inc
Date Announced 08/15/94 08/25/94
Com pleted/Pending ("C" / "P") 09/02/94 C C C
Offering Price/Share (Unit) $6.50 $4.55
Total Value (m il.) $11.50 $14.4 $23.4 $41.3
Stock Prem ium : Prior Periods
1 Day (%) 225.0% 51.7% 29.6%
1 Week (%) 188.9% 30.0%
4 Weeks (%) 26.0% 225.0% 30.0% 24.3%
Offer Price Per Share (Unit) $6.50 $4.55
to Book Value $11.50 3.8 x 3.9 x 1.5 x
to EPS 130.0 x -
Stock Price 4 Weeks Prior 2.3 x $2.00 $3.50 $9.25
to Book Value 1.2 x 2.9 x
to EPS 1.2 x 40.0 x -13.0 x 1.9 x
Total Equity Value (m il.) $17.2 $24.3
to Net Income $53.7 131.5 x - 2.3 x
Long-Term Debt to
Stockholder's Equity - 0.0 x 0.1 x
Stockholder's Equity 0.1 x 0.2 x
Stockholders' Equity -
as a% of Total Assets 93.8% 24.2% 93.5%
to Sales 3.5 x 1.2 x
to Cash Flow (EBITDA) 1.4 x 28.9 x 30.3 x 1.7 x
to Operating Income 36.8 x - 2.4 x
(1) Data provided by Securities Data Company, Inc. Eighteen transactions were
identified for the period 1/1/94 to 10/3/95 in the total value range of $10 to
$50 m illion.
ROBERT A. INNAMORATI & CO. October 13, 1995
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FORUM RETIREMENT PARNERS, L.P.
Target Company Inform ation Am erica Inc Laser Precision Corp
Acquirer Providential W est Publishing Co GN Great Nordic Ltd W ilm ington Svgs Fund Society
Date Announced 10/03/94 10/04/94
Com pleted/Pending ("C" / "P") 10/12/94 C C C
Offering Price/Share (Unit) $6.00 $8.00
Total Value (m il.) $4.00 $29.3 $38.7 $24.4
Stock Prem ium : Prior Periods
1 Day (%) 54.8% 36.2% 45.5%
1 Week (%) 65.5% 45.5%
4 Weeks (%) 60.0% 84.6% 39.1% 60.0%
Offer Price Per Share (Unit) $6.00 $8.00
to Book Value $4.00 1.7 x 1.9 x 9.3 x
to EPS - 26.6 x
Stock Price 4 Weeks Prior - $3.25 $5.75 $2.50
to Book Value 0.9 x 1.4 x
to EPS 6.3 x -23.2 x 19.2 x -0.4 x
Total Equity Value (m il.) $29.5 $39.8
to Net Income $373.2 - 27.1 x -
Long-Term Debt to
Stockholder's Equity 0.2 x - -
Stockholder's Equity 0.6 x 0.1 x
Stockholders' Equity 0.0 x
as a% of Total Assets 61.1% 88.1% 98.5%
to Sales 1.1 x 1.3 x
to Cash Flow (EBITDA) 66.2 x 6.7 x 9.6 x -
to Operating Income - 13.2 x -
(1) Data provided by Securities Data Company, Inc. Eighteen transactions were
identified for the period 1/1/94 to 10/3/95 in the total value range of $10 to
$50 m illion.
ROBERT A. INNAMORATI & CO. October 13, 1995
18
FORUM RETIREMENT PARNERS, L.P.
Target Company Galveston-Houston Co Pet Products
Acquirer A Pea in the Pod Inc GHX Acquisition Co Hartz Mountain Corp(Hartz Grp) Mothers W ork Inc
Date Announced 12/14/94 12/27/94
Com pleted/Pending ("C" / "P") 03/06/95 C C C
Offering Price/Share (Unit) $2.25 $5.25
Total Value (m il.) $5.50 $37.0 $17.3 $22.5
Stock Prem ium : Prior Periods
1 Day (%) 28.6% 200.0% 37.5%
1 Week (%) 38.5% 265.2%
4 Weeks (%) 83.3% 28.6% 162.5% 57.1%
Offer Price Per Share (Unit) $2.25 $5.25 $5.50
to EPS 75.0 x 43.7 x -
Stock Price 4 Weeks Prior $1.75 $2.00
to Book Value $3.50 0.7 x 0.8 x 1.7 x
to EPS 58.3 x 16.7 x -14.0 x
Total Equity Value (m il.) $38.2 $16.1
to Net Income $22.5 101.0 x 43.1 x
Long-Term Debt to -
Stockholder's Equity 0.1 x 0.2 x
Total Liabilities to -
Stockholder's Equity 0.4 x 0.6 x
Stockholders' Equity 1.0 x
as a% of Total Assets 72.9% 64.0% 49.7%
Total Enterprise Value (m il.) $42.7 $16.9 $25.3
to Sales 0.6 x 1.2 x
to Cash Flow (EBITDA) 0.8 x 8.9 x 16.7 x 113.3 x
(1) Data provided by Securities Data Company, Inc. Eighteen transactions were
identified for the period 1/1/94 to 10/3/95 in the total value range of $10 to
$50 m illion.
ROBERT A. INNAMORATI & CO. October 13, 1995
19
FORUM RETIREMENT PARNERS, L.P.
Target Company Resource Recycling Techs Inc Paco Pharm aceutical Services
Acquirer NuVision Inc W aste Managem ent Inc W est Co Inc Am erican Vision Centers Inc
Date Announced 03/17/95 03/24/95
Com pleted/Pending ("C" / "P") 04/28/95 C C C
Offering Price/Share (Unit) $11.50 $12.25
Total Value (m il.) $7.60 $30.8 $49.0 $20.5
Stock Prem ium : Prior Periods
1 Day (%) 37.3% 66.1% 32.2%
1 Week (%) 50.8% 66.1%
4 Weeks (%) 38.2% 46.0% 58.1% 35.1%
Offer Price Per Share (Unit) $11.50 $12.25
to Book Value $7.60 3.4 x 1.1 x 1.5 x
to EPS 34.3 x 21.8 x
Stock Price 4 Weeks Prior - $7.88 $7.75 $5.63
to Book Value 2.3 x 0.7 x
to EPS 1.1 x 23.5 x 13.8 x -11.9 x
Total Equity Value (m il.) $30.3 $49.0
to Net Income $20.5 33.8 x 21.4 x -
Long-Term Debt to
Stockholder's Equity 0.2 x 0.1 x -
Stockholder's Equity 1.0 x 0.3 x
Stockholders' Equity 0.4 x
as a% of Total Assets 48.6% 74.7% 70.7%
to Sales 0.8 x 0.8 x
to Cash Flow (EBITDA) 0.4 x 17.5 x 6.9 x 11.6 x
to Operating Income 33.1 x 15.8 x -
(1) Data provided by Securities Data Company, Inc. Eighteen transactions were
identified for the period 1/1/94 to 10/3/95 in the total value range of $10 to
$50 m illion.
ROBERT A. INNAMORATI & CO. October 13, 1995
20
FORUM RETIREMENT PARNERS, L.P.
Target Company Bestop Inc
_________ Acquirer _________________________________ Douglas & Lom ason Co
Date Announced 05/04/95
Com pleted/Pending ("C" / "P") C
Offering Price/Share (Unit) $12.75
Total Value (m il.) $44.0
Stock Prem ium : Prior Periods
1 Day (%) 22.0%
1 Week (%) 18.6%
4 Weeks (%) 27.5%
Offer Price Per Share (Unit) $12.75
to Book Value 3.0 x
to EPS 10.8 x
Stock Price 4 Weeks Prior $10.00
to Book Value 2.4 x
to EPS 8.5 x
Total Equity Value (m il.) $44.0
to Net Income 10.9 x
Long-Term Debt to
Stockholder's Equity -
Stockholder's Equity 0.5 x
Stockholders' Equity
as a% of Total Assets 67.6%
to Sales 0.7 x
to Cash Flow (EBITDA) 5.8 x
to Operating Income 6.4 x
(1) Data provided by Securities Data Company, Inc. Eighteen transactions were
identified for the period 1/1/94 to 10/3/95 in the total value range of
$10 to $50 m illion.
21
FORUM RETIREMENT PARTNERS, L.P.
PROPOSED ACQUISITION PRICE VS. HISTORIC TRADING PRICES
FRP Prosposed Acquisition Price/Unit: $2.83
Historical Information
FRP Price over 24 Months(1)
(9/25/93 - 9/25/95)
Selected Ratios (2)
Price to Bood ($2.50/unit):
Price to EBITDA ($0.60/unit):
Price to Revenues ($3.22/unit)