Acg Cup

Khakis ‘R Us

Valuation MBA Investment Bankers LLC

January, 2014

Executive Summary

• Evaluation of NYC Capital Offer

— Comparable Companies Analysis $24.64-$32.90 — Precedent Transaction Analysis $21.99-$30.43 — Discounted Cash Flow Analysis $25.03-$33.74

• Recommendations

— Counteroffer $20/share + Earnout of 75% EBITDA over 3 years $25.18-$30.03 — Defensive Strategy Shareholder Rights Plan + Buyback — One Year From Now About Boots, Valuation Range

Khakis ‘R Us & MBA Investment Bankers LLC Confidential

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Comparable Company Analysis

• • •

Comparables determined by Revenue, EBITDA, and EBIT figures. Narrowed down group to Companies 3 & 8. We chose the companies where the ranges fell within 50% above or below Khaki ‘R Us figures.

•

We used the median EBIT multiplier for the calculation for the low range figure and median EBITDA multiplier for the calculation for the high range figure.

Range: $24.64 – $32.90

Khakis ‘R Us & MBA Investment Bankers LLC Confidential

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Precedent Transactions Analysis

• • For Precedent Transactions, the selection criteria was Revenue and EBITDA. Selected comparable transactions for companies were within 50% of Khakis ‘R Us EBITDA and Revenue. • • Narrowed the selection to transactions 7, 8, 12, & 18. We used the Median figures of Revenue and EBITDA as our range.

Range: $21.99 – $30.43

Khakis ‘R Us & MBA Investment Bankers LLC Confidential

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Discounted Cash Flow (DCF) Analysis

 Beta of 2.235 used by identifying comparable companies based on similar EBITDA and Revenue.  WACC of 13.97%  Revenue CAGR of 5.4%

Range: $25.03 – $33.74

Khakis ‘R Us & MBA Investment Bankers LLC Confidential

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Total Valuation

$200M

$250.3M - $304.3M

$20.00

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$25.03 – $30.43

Executive Summary

• Evaluation of NYC Capital Offer

— Comparable Companies Analysis $24.64-$32.90 — Precedent Transaction Analysis $21.99-$30.43 — Discounted Cash Flow Analysis $25.03-$33.74...