Safeguard Scientifics is a publicly traded holding company that provides capital and expertise to help entrepreneurs accelerate growth and build value in healthcare and technology companies. It has successfully invested in and supported over 200 companies since 1953. Safeguard focuses on partner companies with high growth potential and strong competitive positions. Its current partner companies have a combined revenue run rate of over $500 million and represent over $150 million in capital deployed across healthcare and technology sectors. Safeguard aims to continue supporting partner company growth, realizing successful exits, and returning excess cash to shareholders in 2015.
2. About Safeguard Scientifics (NYSE:SFE)
> Founded in 1953
> NYSE-listed since 1971
> Proven Partner for entrepreneurs looking to accelerate growth and
build long-term value in their businesses
> Industry Focus on healthcare and technology
> Successful Track Record includes $765M realized since 2006
> Deep Domain Expertise as financiers and entrepreneurs
> Strong Balance Sheet and Liquidity
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3. Why Own Safeguard (NYSE:SFE)?
> Full Value Yet to be Realized or Recognized
> Ownership Stakes in Exciting Partner Companies
> Top Performance of Proven Team
> Financial Strength, Flexibility and Liquidity
> Strong Alignment of Interests
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7. Partner Companies By Sector
* % represents allocation of capital deployed in current partner companies as of September 30, 2014. Safeguard has deployed a total of $233M in current partner companies.
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10. Partner Company Update:
SEPT 2010
Initial Capital
Deployed
$12.0M
Total Capital Deployed
1/100
Babies born with a
genetic disorder
30%
SFE Primary
Ownership
Med Tech
Sector
High
Traction
Revenue Stage
> Molecular genetic information company
> Genetic carrier screening tests based on
next-generation sequencing technology
> GoodStart SelectTM ― Screens for all 23
genetic disorders recommended for
screening by leading medical societies
> Results in higher carrier detection rates
regardless of ethnicity
> Exclusive commercial partnership with
PerkinElmer
> Opportunity to expand tests beyond IVF
(i.e. – OB/Gyn and maternal fetal
medicine)
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11. Partner Company Update:
> Global digital marketing operating
system for agencies and enterprises
> Pioneer in demand-side platform (DSP)
> Raised more than $175M in equity and
debt to fund global growth of its digital
marketing operating system
> 12 offices globally with 500+ employees
> Serving 4500+ advertisers in 46
countries
> Projecting $100M+ software revenues
(2014); EBITDA profitable since 2012
JULY 2009
Initial Capital
Deployed
$25.5M
Total Capital Deployed
$124B
Digital advertising
estimated CAGR 16%
(2013-2017)
21%
SFE Primary
Ownership
Digital Media
Sector
High Traction
Revenue Stage
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12. Partner Company Update:
> Rapidly growing specialty
pharmaceutical company
> Developing high-quality, cost-effective
generic medicines for pets
> To date, commercialized 5 FDA-approved
veterinary generic products in
3 different dose forms
> Projecting launch of up to 15 new
products (2015-2017)
> Approx. 240% revenue growth (2009-
2013); projecting revenue by YE’18 of
$190M and $40M+ EBITDA
SEPT. 2011
Initial Capital
Deployed
$14.9M
Total Capital Deployed
$2B
Estimated market
opportunity for generic
pet prescriptions.
28%
SFE Primary
Ownership
Specialty
Pharma
Sector
High
Traction
Revenue Stage
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17. Equity Incentive Compensation
> Key Goals
• Structured to align with shareholder interest
• Consistent with carried interest methodology
• 75% of vesting based on performance criteria
> Performance Vesting
• Upon achievement of cash-on-cash return thresholds (2.4x-3.0x) on pools of capital
deployed
> Insider Ownership
• 46% of outstanding grants are vested
• Ownership requirements of 2x-4x base salary for senior management
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19. 2015 Goals and Objectives
> Increase total number of partner companies to approximately 30
> Realize continued growth in partner company aggregate revenue
> Deploy $40M - $60M in new partner companies
> Deploy $25M - $45M in follow-on funding for current partner companies
> Continue to realize successful exits
> Return excess cash to shareholders
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20. John E. Shave III
SENIOR VICE PRESIDENT,
INVESTOR RELATIONS &
CORPORATE COMMUNICATIONS
P 610.975.4952
E jshave@safeguard.com
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21. Forward Looking Statements
Statements contained in this presentation that are not historical facts are forward looking
statements which involve certain risks and uncertainties including, but not limited to, risks
associated with our ability to make good decisions about the deployment of capital, the
fact that our partner companies may vary from period to period, our substantial capital
requirements and absence of liquidity from our partner company holdings, fluctuations in
the market prices of our publicly traded partner company holdings, competition, our
inability to obtain maximum value for our partner company holdings, our ability to attract
and retain qualified employees, market valuations in sectors in which our partner
companies operate may decline, our inability to control our partner companies, our need to
manage our assets to avoid registration under the Investment Company Act of 1940, and
risks associated with our partner companies, and other uncertainties as described in our
filings with the Securities and Exchange Commission, including our Annual Report on
Form 10-K. Many of these factors are beyond our ability to predict or control. As a result of
these and other factors, our past financial performance should not be relied on as an
indication of future performance.
Safeguard does not assume any obligation to update any forward looking statements or
other information contained in this presentation. predicted or controlled. You should not
rely on these statements as indicative of the partner company’s future results, and all
forward looking statements are qualified by this cautionary statement. All information is as
of the date indicated or as of the date of this presentation, and none of the partner
companies assumes any obligation to update or revise the information presented.
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