FIVE QUESTIONS WITH…David Santoni managing director, Goldsmith Agio Helms –

1. We’ve just come off a record-breaking year in the buyout industry. Do you think the buyouts industry will sustain these levels in 2006? How would you describe market conditions?

Market conditions remain strong. The buyout industry has had back-to-back record years in terms of total dollar value in 2004 and 2005, although the number of transactions has remained relatively flat over the same time period. The current pipeline of M&A transactions is at an all-time high, and barring unforeseen political or economic events, we believe the buyouts industry will sustain these levels in 2006.

2. How much are strategic buyers affecting the market?

Over the past two years, strategic buyers have been increasingly involved in our processes, following an 18- month period from the beginning of 2003 through the first half of 2004 when they were conspicuously absent. Strategic buyers are playing a very important role in today’s buyout market, albeit often in a “supporting actor” role. They are aggressively pursuing selective acquisitions but are oftentimes being outbid by financial buyers in competitive processes.

3. Purchase price multiples have gone as high as 9x in some cases. Do you expect that to continue to be the case?

Purchase price multiples have exceeded 10x in many cases. Purchase price multiples are a reflection of a company’s growth prospects and quality of earnings and differ widely by industry and by size of deal. Having said that, unlike the late 90’s when even challenged deals were trading for high multiples, today’s market has taken on more of a “dumbbell” shape, with challenged deals trading at low multiples and premium companies trading at much higher multiples. We expect purchase price multiples to remain consistent, continuing to ride the wave of favorable credit markets.

4. Do you think this market is peaking?

We do not believe that the market is peaking. It has been consistently strong for close to two years. The unprecedented number of portfolio companies owned by private equity groups has created its own market and will continue to fuel buyout activity. In addition, we have witnessed increased cross-border M&A activity as the buyouts market continues to grow globally. As long as the economy continues its course of slow, steady growth and the Fed does not make any unforeseen changes to interest rates, we will continue to see high levels of buyout activity.

5. Who do you think is going to win the Super Bowl?

Finally, a question that I know something about! Now that Peyton Manning has done his best Dan Marino impression and failed to win the AFC, the Super Bowl is up for grabs. Before the playoffs started, I predicted that Carolina and Denver would meet in the Super Bowl. Something tells me that Jake Delhomme will be added to the list of great Super Bowl winning quarterbacks along with Mark Rypien, Trent Dilfer, Doug Williams and Brett Favre (just kidding Green Bay fans). I will go out on a limb and take Carolina.