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SORTIS INVEST

Corporate Presentation

Sofia
July 2009
Overview
SORTIS Invest is financial and investment advisor to businesses, venture
capital and private equity funds, institutional and individual investors
for their activities in Bulgaria.

 Areas of expertise :
 Private equity & venture capital
 Mergers & acquisitions
 Corporate finance
 EU grants funding programs

 SORTIS Invest structures investment schemes that enable:


 Investors to benefit from attractive business opportunities
 Entrepreneurs to implement their investment plans
 Experienced team in equity investments, real estate and corporate
restructuring projects in Bulgaria and internationally
 Proven reputation and professional ethics
 Owned and managed by Martin Paev, CFA – an investment banker with
significant M&A, private equity, asset management and real estate experience

Corporate Presentation 2
SORTIS Group
SORTIS Invest is part of the SORTIS Group that also comprises:

Real Estate Investment Management Credit and Leasing Advisory Company


Company with expertise in: with expertise in:
 Real estate investment advisory  Mortgage loans
 Real estate portfolio management  Investment loans
 Property fund management  Consumer loans
 Mezzanine real estate financing  Leasing
 Refinancing
SORTIS Real Estate structures individual and
collective investment schemes that enable its SORTIS Credit offers advisory services for bank
client-investors to benefit from the real estate loans and leasing to businesses and
opportunities the company has sourced and individuals.
secured.
Partnership agreements with the leading
Active in all major real estate sectors, commercial banks, leasing companies and
including residential, office, retail, industrial non-bank financial institutions in Bulgaria.
and hotels.

Corporate Presentation 3
Services
 SORTIS Invest assists entrepreneurs in selecting and obtaining the most
appropriate type of financing for their investment plans
 SORTIS is able to arrange the full spectrum of financing options and
secure100% of the investment needed through:
 Private equity
 Venture capital
 Mezzanine loans
 Bank loans and other debt capital; leasing
 EU grants funding

 Additional services to corporate clients include consulting on:


 Mergers & acquisitions
 Corporate finance
 Company restructuring

 SORTIS Invest also works on behalf of investors to identify high-yield


investment opportunities that match predefined investment criteria

Corporate Presentation 4
Private Equity
 In a private equity or venture capital deal the investor:
 Buys shares in the investee company
 Does not receive regular installments like interest on loans
 Assumes part of the business risk of the entrepreneur
 Makes money only when the entrepreneur also makes money

 Venture Capital is given to growing companies that need external


financing in order to continue their expansion

 Private Equity investors look for profitable and cash-flow positive


companies

 Sources of funding:
 Strategic Investors
 Venture Capital Funds
 Private Equity Funds
 Buyout Funds
 “Business Angels”, etc.

Corporate Presentation 5
Mezzanine Loans
 Mezzanine financing is a way of attaining financing without ceding
ownership of the company. It is a blend of traditional debt financing
and equity financing, reaping some benefits of both

 Mezzanine financing is an unsecured debt, requiring no collateral to


be put up, unlike traditional bank loans

 Like debt, mezzanine financing is very fluid and does not necessarily
involve giving up an interest in the company

 Very high interest rates - often in the 20-30% range

 Lenders often have the right to convert their stake to equity


ownership in the event of a default on the mezzanine loan

 Mezzanine financing facilitates bank financing for the project, as it is


subordinated to the senior debt

Corporate Presentation 6
Project Finance
 Project Finance is financing for a particular project (such as a mine,
toll road, railway, pipeline, power station, etc.) which is repaid from
the cash flow of that project

 The financier principally looks at the assets and revenues of the


project in order to secure servicing of the loan on a stand-alone basis

 Little or no recourse to the non-project assets of the borrower or the


sponsors of the project

 The credit risk associated with the borrower


is not as important as in ordinary loan
transactions

 Identification, analysis, allocation and


management of every risk associated
with the project is of paramount importance

Corporate Presentation 7
Corporate Finance
 SORTIS Invest helps its corporate finance clients to maximize the value
of their companies while keeping an eye on the firm's financial risks

 Corporate Finance Services:


 Mergers and Acquisitions
 Business sales and disposals
 Public company and take-over advice
 Management buy-outs
 Management buy-ins
 Strategic alliances
 Valuations, fairness opinions and appraisals
 Debt-raising and restructuring advice

 SORTIS assists companies in their strategic choices aimed at growth,


market penetration and/or exit

Corporate Presentation 8
EU Grants Funding
 SORTIS Invest assists companies in obtaining
grant financing from EU’s Operational
Programmes that are active in Bulgaria

 The SORTIS EU Grants services include:


 Eligibility evaluation
 Competent choice of the most appropriate scheme for the Client’s
project
 Preparation of a professional business plan and financial model that
demonstrate explicitly the project’s business sense and profitability
 Putting together the physical application and organizing all necessary
documentation
 Assistance in attracting the needed co-financing – securing 100% of the
investment required to implement the project

Corporate Presentation 9
Approach
 Before taking a mandate and presenting an investment opportunity to
potential investors, SORTIS Invest makes an internal assessment of the
project in order to determine its:
 Feasibility
 Bankability and finance-ability
 Project Sponsor’s creditworthiness

 SORTIS Invest suggests a financing structure, which best serves the


Client’s interests and at the same time meets the investment policies
and requirements of potential funders
 Equity
 Mezzanine loans
 Project financing

 Credibility and trust are a main factor in the decision making process
of all financial investors

 Investors heavily rely on the discretion of SORTIS Invest in selecting and


proposing them high-quality projects

Corporate Presentation 10
Pre- & Post- Investment Support

 SORTIS helps its advisory clients determine and


refine a winning business strategy and then
implement it

 Business strategy is determined based on


assessment of the Client’s competitive position
and taking into consideration global and local
market conditions and long-term trends

 Careful analysis of:


 Competitive advantages of the Client
 Problem areas
 Strategic positioning
 Market trends
 Project characteristics

Corporate Presentation 11
Investment Funds
 SORTIS Invest has built up an extensive network of investment funds
comprised of:
 Private equity funds
 Buy-out funds
 Mezzanine funds
 Venture capital funds
 Seed capital funds
 Business angels
 High net worth individuals

 Network of ca. 120 investment funds throughout countries in Europe,


North America, Middle East and Asia
 SORTIS’s relationships with a wide range of investment funds
facilitates investment process by finding the optimal solution for the
Client

Corporate Presentation 12
Funds Investment Criteria
 Partnering funds bring to companies and businesses exposure to a
broad variety of investment criteria:
 Equity investment size: from €1mln to € 150+mln
 Investment horizon: usually 3 to 7 years, maximum 15 years
 Variety of sectors on focus
 Ownership stake: controlling, majority or significant minority
 Transaction types: leveraged buy-outs, management buy-outs and buy-
ins, growth capital, seed and early-stage

Corporate Presentation 13
Strategic Investors
 SORTIS Invest works with a network of strategic investors that could
convey to companies and businesses substantial benefit by:
 Adding value to investments
 Strategic partners that operate in major industries such as healthcare,
telecommunications, technology, retail, food processing, beverages, etc.
 Providing industry know-how and business expertise
 Strategic investor may possess a brand name recognized in many
countries
 Strategic investor typically brings to the firm valuable experience in
marketing, operations and sales
 Providing valuable training to company employees and management
 Strategic investor also provides industry and personal connections that
are beneficial for bringing in additional capital and/or assisting with the
sale of the company's products and services

Corporate Presentation 14
Management
Mr. Martin Paev, CFA
Born 1975, Bulgarian
Owner and General Manager

Martin Paev has 10+ years of investment banking, M&A and asset management
experience gained at the ING Barings investment bank in Frankfurt/Main
(Germany), ETEBA (the investment banking arm of National Bank of Greece),
Balkan Advisory Company (an independent investment banking boutique in
South-Eastern Europe).
Mr. Paev structured the first Real Estate Investment Trust in Bulgaria (TBI-BAC REIT)
and acted as the REIT’s Executive Director from its establishment until he joined
ADDRESS Group as Executive Director of ADDRESS Investment & Development in
2005. In November 2006 he established his investment advisory firm, SORTIS Invest.
In March 2007 SORTIS Real Estate was set up as a real estate asset management
and investment advisory company.
Educated in Bulgaria, the Netherlands and Germany, Mr. Paev holds a Master’s
degree in Banking and Finance and a Bachelor’s degree in Business
Administration. He is CFA® Charterholder and served two mandates as Board
member of the Bulgarian CFA Society.

Corporate Presentation 15
Key Team Members
Dimcho G. Dimitrov, Investment Banking Associate, brings experience to the
SORTIS team in strategic market research, analysis and forecasting, new
product market sizing through financial modeling and company due diligence
on M&A transactions. Prior to joining SORTIS, Dimcho was Strategy Analyst with
W. R. Grace & Co., a $3B public specialty chemicals company, where he
provided analytical support for the organic and external growth initiatives of
the organization. Mr. Dimitrov holds a Master of Business Administration (MBA)
degree from Northeastern University, Boston, USA.

Krasimir Goranov, Investment Banking Associate, is an expert in finance and


accounting, including investment analysis, project and company valuations,
hedging and risk control and portfolio management. Prior to joining SORTIS
Invest, Krasimir worked in the US as a Financial Analyst for Q Investments, L.P., a
privately-held hedge fund with $2.7B of assets under management. Mr.
Goranov held similar positions also at Bear Stearns & Co. and William C. Connor
Educational Investment Fund. Mr. Goranov completed his Bachelor’s degree in
Accounting and Finance at Texas Christian University, Fort Worth, USA.

Corporate Presentation 16
Track Record
Selected private equity and venture capital deals:

Speedy Net

WiMax Telecom Operator LAN Internet Provider Risk Management Software

Investor: Dekol Investor: Advance Equity Investor: New Europe


Holding Venture Equity (NEVEQ)
Amount: n.a.
Amount: € 4,000,000 Amount: $ 5,000,000
Financial Advisor to
Atlantis.bg (Project Sponsor) Financial Advisor to Financial Advisor to
Speedy Net FinAnalytica

August 2007 December 2007 March 2008

As well as projects in food processing, retail trade,


information and communication technologies, healthcare and other sectors.

Corporate Presentation 17
Contacts

Mr. Martin Paev, CFA


General Manager
E-mail: paev@sortis.bg
Cell: +359 88 50 50 200

49 Madrid Blvd., Floor 1 Tel: +359 2 943 90 70


Sofia 1505, Bulgaria Fax: +359 2 943 90 71

www.sortis.bg
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