Booz-Allen & Hamilton and Lehman Brothers Launch Alliance to Provide Services and Capital to Early-Stage Companies.

Business Editors

NEW YORK--(BUSINESS WIRE)--Oct. 31, 2000

Alliance Named Innovate@ Lehman Brothers / Booz-Allen

Lehman Brothers Inc., a leading global investment bank, and Booz-Allen & Hamilton Inc., a leading international management and technology consulting firm, announced today the launch of a global alliance to provide start-up and spin-out ventures with funding, as well as a wide range of strategic, technical, executive, and financial services.

The new venture is called Innovate@ Lehman Brothers / Booz-Allen, and is designed to provide emerging companies with business and financial consulting services typically unavailable to early-stage companies. Booz-Allen and Lehman Brothers will leverage their extensive expertise and client relationships in developing portfolio companies.

Booz-Allen & Hamilton is considered one of the world's foremost consultancy firms. "With more than 2,500 business experts and 7,000 technologists, Booz-Allen will offer early-stage companies access to resources normally available only to our well-established clients. We offer a powerful value proposition that combines investment, services and market access," said Dan Lewis, President of Booz-Allen's Worldwide Commercial Business.

Lehman Brothers has built a highly successful venture capital investing business. "Combining the financial advisory experience of a global institutional bank like Lehman Brothers, with the management consulting expertise of Booz-Allen, provides new businesses unparalleled access to a unique and powerful set of services," said Mike Odrich, Head of Private Equity at Lehman Brothers.

"With Innovate@ Lehman Brothers / Booz-Allen, emerging companies simultaneously get talent, knowledge, network and capital in one shot, so they can place all of their energy on building a winning business," said Bill Jackson, a Vice President of Booz-Allen & Hamilton. He noted that Booz-Allen's extensive activities in management and technology consulting can provide new businesses with networking opportunities, strategic and operational skills, industry expertise and contacts, and business and technology building capabilities.

"We will target early-stage opportunities where both our firms have terrific industry expertise and can add substantial value," said Leo Russell, Managing Director at Lehman Brothers. "We will seek opportunities with differentiated product, sustainable value, management strength, scalability and barriers to entry."

Lehman Brothers also offers networking and industry expertise, as well as financial advice and fund raising capabilities. "Through this alliance, we can help an emerging company refine and test its business model, drive tactical business development, provide interim management and support a company through an IPO," said Scott Freidheim, Managing Director at Lehman Brothers.

The two firms announced that Innovate@ Lehman Brothers / Booz-Allen will make investments in companies primarily in - but not limited to - the communications, media and technology industries. The alliance intends to make individual investments ranging from $1 million to $5 million. While Lehman Brothers and Booz-Allen & Hamilton will fund the investments jointly, the alliance is considering establishing a fund for outside investors at a later date.

The venture will be staffed by teams of professionals from the two participating firms, leveraging Booz-Allen's local offices and Lehman Brothers' New York and London hubs. Managing Directors Scott Freidheim and Leo Russell from Lehman Brothers and Vice Presidents Bill Jackson, Sajai Krishnan and Steffen Leistner from Booz-Allen will manage the alliance. Innovate@ Lehman Brothers / Booz-Allen will also benefit from the offices and professionals of both firms, creating a global network of resources for portfolio companies.

The Web site for Innovate@ Lehman Brothers / Booz-Allen is www.innovate-at.com.

Founded in 1914, Booz-Allen & Hamilton pioneered the business of management consulting. Today, it is one of the world's leading international management and technology consulting firms, with more than 10,000 employees in over 100 offices worldwide. Booz-Allen & Hamilton corporate headquarters are located in McLean, Virginia. Booz-Allen's client base includes many of the world's largest industrial and service corporations, as well as major institutions and government bodies around the world, including most U.S. departments and agencies. Booz-Allen provides services in strategy, systems, operations and technology to clients on six continents. The firm delivers a powerful combination of strategy, e-business expertise, industry knowledge, functional capabilities, implementation expertise and technical know-how to companies facing the challenges of the new economy. Visit the Booz-Allen Web site at www.boozallen.com or the strategy+business Web site at www.strategy-business.com.

Lehman Brothers, an innovator in global finance, focuses on serving the financial needs of corporations, governments and municipalities, institutional clients, and high-net-worth individuals worldwide. Founded in 1850, Lehman Brothers maintains leadership positions in equity and fixed income sales, trading and research, investment banking, private equity, and private client services. The Firm is headquartered in New York, London, and Tokyo and operates in 49 offices around the world. For further information about Lehman Brothers, visit its Web site at www.lehman.com.

Innovate@ Lehman Brothers / Booz-Allen Fact Sheet

Description:

Innovate@ Lehman Brothers / Booz-Allen is an alliance between Booz-Allen & Hamilton and Lehman Brothers, designed to provide start-up and spin-out ventures with a wide range of strategic, technical, executive and financial consulting services, as well as financial support.

The alliance's core services include:

-- Business model development and testing

-- Tactical business development

-- Alliance support and development

-- Access to equity research

-- Interim management

-- CEO counseling

-- Access to investment banking and advisory services

-- Information technology (IT) management

-- Venture capital roadshow assistance

-- Geographic expansion

-- Recruiting and retention

-- IPO road-mapping

-- Wealth Management

Additional Services:

Innovate@ Lehman Brothers / Booz-Allen will facilitate learning and collaboration among portfolio companies through shared customer bases, cross-selling, offering mentoring and support, and offering opportunities to establish alliances with one another.