Cohen & Company Inc. · AMEX:COHN
Cohen & — Merger or Acquisition (November 2009)
28 slides from Cohen &'s merger presentation, November 2009
Slide 1: Building Greater Opportunities For Profitable and Sustained Growth
+ “Building Greater Opportunities For Profitable and Sustained Growth”
Slide 2: Important Information and Where to Find it
Important Information and Where to Find it Alesco Financial Inc. (“AFN”) filed with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4, containing a proxy statement/prospectus in connection with the proposed merger with Cohen Brothers, LLC (“Cohen”), which was an
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain statements, estimates and forecasts with respect to future performance and events. These statements, estimates and forecasts are “forward-looking statements”. In some cases, forward-looking statements can be identified by the use of forwa
Slide 4: Table of Contents
Table of Contents Page 1. Merger Overview 6 2. Rationale for the Transaction 8 3. Overview of Combined Company 12 4. Combined Company’s Businesses A. Capital Markets 18 B. Asset Management 22 5. Financial Summary 24 4
Slide 5: Merger Overview
Section 1 Merger Overview
Slide 6: Merger Overview
Merger Overview Transaction • On February 20, 2009, Alesco Financial Inc. (“AFN”) entered into a merger agreement with Cohen & Company (“Cohen”); Cohen is to merge with a subsidiary of AFN • Combined company will be publicly traded; expect to move listing to NYSE Amex under symbol “COHN” • Subject t
Slide 7: Rationale for the Transaction
Section 2 Rationale for the Transaction
Slide 8: AFN Board's Considerations
AFN Board’s Considerations Credit crisis directly impacted AFN: • Significantly reducing asset values • Severely restricting ability to raise new capital • Preventing the financing of new investments with long-term debt Transformation of AFN’s business model was necessary After considering various o
Slide 9: AFN Reasons for Merger
AFN Reasons for Merger AFN requires additional income to cover its expense base and debt service • AFN has debt of $76.8 million, annual debt service of $6.2 million, and annual G&A of approximately $8.0 million • AFN has very little cash flow from existing investments, which alone does not provide
Slide 10: AFN Reasons for Merger (cont.)
AFN Reasons for Merger (cont.) Cohen has developed contacts and capabilities over the past decade with substantial value • Relationships with small and mid-sized banks (400+) and insurance companies (150+) that are a potential source of advisory and trading revenue • Trading relationships with over
Slide 11: Overview of Combined Company
Section 3 Overview of Combined Company
Slide 12: Overview
Overview • Two main operating businesses – capital markets and asset management • Cohen was founded in 1999 and is expected to merge with AFN in December 2009 • AFN is currently publicly traded on the NYSE under the symbol “AFN”; upon completion of the merger, the combined company is expected to tra
Slide 13: Key Investment Highlights
Key Investment Highlights • Growing, independent firm specializing in credit-related fixed income investments • Generating diversified revenue from institutional sales and trading, asset management and principal investing with significant recurring revenue streams from asset management • Capitalizin
Slide 14: Diversified, Recurring Revenue Streams
Diversified, Recurring Revenue Streams Diverse asset class expertise in institutional sales and trading includes: • High grade corporate bonds • High yield corporate bonds and loans • Mortgage and asset backed securities • Collateralized bond and loan obligations • Commercial mortgage backed securit
Slide 15: Compensation Philosophy for Long-Term Success
Compensation Philosophy for Long-Term Success Compensation structure designed to: • Attract and retain employees • Pay for performance • Provide ownership incentive to align interests with stockholders Ownership achieved primarily through grants of unvested Restricted Stock Units (RSUs) and continui
Slide 16: Strengths
Strengths Revenue Diversification • Revenues diversified by operating business line and asset class • New issue, secondary trading, asset management, and principal investing capabilities Deep Experience • Proven ability to attract new talent, reposition existing talent, and grow company in challengi
Slide 17: Combined Company's Businesses: Capital Markets
Section 4A Combined Company’s Businesses: Capital Markets
Slide 18: Becoming a Market Leader in Secondary Trading of Credit Fixed Income Investments
Becoming a Market Leader in Secondary Trading of Credit Fixed Income Investments • Sales and trading professionals have grown from 6 at the beginning of 2008 to over 50 currently • Riskless trading (brokerage) revenue has increased from $3.2 million in 1Q08 to $11.0 million in 3Q09 • Notional amount
Slide 19: Using Market Rebuilding to Our Advantage
Using Market Rebuilding to Our Advantage Capitalizing on the opportunities in current markets • Hiring the best available talent and increasing intellectual capital, including recent senior hires in the USA and Europe • Recent hires have prior experience at: ¾ Barclays ¾ Jefferies ¾ Bear Stearns ¾ J
Slide 20: Growth Opportunities
Growth Opportunities • Consolidation and cutbacks by competitors are resulting in market share gains for surviving firms • Credit crisis upset traditional Wall Street relationships, reduced the importance of a large balance sheet, and left talented people and ideas as the primary competitive advanta
Slide 21: Combined Company's Businesses: Asset Management
Section 4B Combined Company’s Businesses: Asset Management
Slide 22: Market Opportunity
Market Opportunity • Attractive economics of the alternative asset management model provide recurring management fees and profit participation through incentive fees • Our two alternative investment funds, Brigadier (established 2Q06) and Deep Value (established 4Q08), have annualized life-to-date r
Slide 23: Financial Summary
Section 5 Financial Summary
Slide 24: Statement of Operations – Cohen
Statement of Operations – Cohen • Riskless trading revenue in September 2009 was $4.6 million, or $54.7 million annualized COHEN P&L ($000s) • Riskless trading revenue is projected to be YTD 2009 4Q08 1Q09 2Q09 3Q09 YTD 2009 $42.5 million in 2009, up 86% from 2008 New issue $ 18 $ 227 $ 518 $ 480 $
Slide 25: Statement of Operations Charts – Cohen
Statement of Operations Charts – Cohen Net Revenue ($000s) Operating Income (Loss) ($000s) $24,569 $25,000 4Q08 1Q09 2Q09 3Q09 $20,446 $2,000 $410 $20,000 $0 $16,919 ($2,000) ($1,805) $15,000 ($4,000) ($6,000) $10,000 ($6,337) $7,220 ($8,000) $5,000 ($10,000) ($12,000) $0 ($14,000) 4Q08 1Q09 2Q09 3Q
Slide 26: Balance Sheet – Cohen
Balance Sheet – Cohen COHEN Balance Sheet ($000s) • AFN will add approximately: Cohen 9/30/09 ¾ $86.5 million of cash Cash and cash equivalents $ 14,639 ¾ $76.8 million of par value recourse indebtedness Receivables 3,845 Due from broker 6,616 • Combined company will have substantial cash Investment
Slide 27: Peer Group Market Statistics
Peer Group Market Statistics Cohen ($ in millions, except revenue per employee) Stand-Alone BPSG FBCM KBW OPY Market Capitalization (1) $ 74.0 $ 798.7 $ 410.0 $ 831.4 $ 361.5 Total Capitalization (2) $ 108.2 $ 824.3 $ 410.0 $ 831.4 $ 601.6 Tangible Net Worth (3) $ 28.8 $ 188.5 $ 287.1 $ 443.0 $ 264.
Slide 28: Cohen & Company / Alesco Financial Inc.
COHEN & COMPANY ALESCO FINANCIAL INC.
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