The Latest M&A Outlook & Business Value Drivers

Transcription

1 The Latest M&A Outlk & Business Value Drivers Anthny M. Girdan BKD Crprate Finance Daniel A. Barder BKD, LLP

2 T Receive CPE Credit Participate in entire webinar Answer plls when they are prvided If yu are viewing this webinar in a grup Cmplete grup attendance frm with Title & date f live webinar Yur cmpany name Yur printed name, signature & address All grup attendance sheets must be submitted t Training@bkd.cm within 24 hurs f live webinar Answer plls when they are prvided If all eligibility requirements are met, each participant will be ed their CPE certificates within 15 business days f live webinar

3 The Latest M&A Outlk & Business Value Drivers Anthny M. Girdan BKD Crprate Finance Daniel A. Barder BKD, LLP

4 BKD Crprate Finance Prfile Subsidiary f BKD, LLP 17-year histry Member f FINRA & SIPC Prfessinal team includes Investment bankers Financial analysts Market analysts

5 BKD, LLP Breadth & Depth f Resurces 30 ffices in 12 states Apprximately 250 partners Mre than 2,000 emplyees Six industry niche grups Health Care, Financial Services, Cnstructin & Real Estate, Manufacturing & Distributin, Nt-fr-Prfit, and Energy Clients in all 50 states & internatinally End-t-end client service prpsitin

6 Services

7 Tny Girdan Bigraphy Jined BKDCF in 2007 Mre than 25 years f financial advisry services experience Managed investment & cmmercial banking transactins ttaling ver $1 billin Experience in many industries, including M&D, fd & beverage, technlgy, telecm, media, retail, hspitality, cnstructin, real estate, health care & insurance

8 Daniel Barder Bigraphy Mre than 15 years f prfessinal experience in variety f industries & rles Member f BKD s transactin services team Prvides essential cnsulting service by assisting private equity firms & crprate buyers in evaluating ptential acquisitin targets Prvides cnsulting services t sellers lking t imprve value thrugh the due diligence prcess In charge f ver 100 engagements with transactin values ranging frm $7 millin t ver $750 millin Cnsulting experience includes prviding evaluatins f pst-transactin matters such as purchase accunting, wrking capital analysis & related negtiatins t variety f industries

9 Cmpleted Engagements Since May 2009 Type f Business Industry Segment Service Prvided Envirmental Cnsulting Firm Cn/Eng Sell-side Quarry & Landfill Cn/Eng Sell-side Cmmerical Bank FS Sell-side Trust Cmpany FS Sell-side Cmmunity Bank FS Sell-side Skilled Nursing & Assisted Living HC Sell-side Skilled Nursing Facility HC Sell-side Open MRI Facility HC Sell-side Skilled Nursing & Assisted Living HC Sell-side Medical Labratry HC Sell-side DME Stre HC Buy-side Hspital / DME Stre HC Cnsulting Lng Term Acute Care Hspital HC Cnsulting Critical Access Hspital HC Cnsulting Lng Term Acute Care Hspital HC Financing Medical Supplies Distributr HC Financing/Cnsulting Explsives Cmpnents M&D Sell-side Chemical Distributin M&D Sell-side Bankruptcy Sftware Develper M&D Sell-side Industrial Equipment & Supplies M&D Sell-side Machine Tl Manufacturer M&D Sell-side Mfg. f Schl Supplies M&D Buy-side Wireless Electrnics Cmpany M&D Cnsulting Healthcare Supply Chain Management M&D Cnsulting Mfg. f Pressure Vessels M&D Cnsulting Mfg f Welded Stainless Steel Tubing M&D Cnsulting Mfg f Water Cntrl Values M&D Cnsulting Mfg. f Light Metal Prducts M&D Cnsulting Prduct Marking Cmpany M&D Financing Steel Service Center M&D Financing Full Service Steel Prducts Manufacturer M&D Financing Presrt Mail Service Other Sell-side SEO / Internet Marketing Other Cnsulting 33 client engagements clsed since May 09

10 CURRENT M&A & CAPITAL MARKET CONDITIONS

11 Number f Deals Deal Value ($ in billins) U.S. Middle Market M&A Activity Crprate & PEG 7,000 $600 6,166 6,000 5,305 $500 5,000 4,000 4,632 4,011 4,236 4,525 4,464 4,539 4,524 4,759 4,129 $400 $300 3,000 2,000 $200 1,000 $ <$50M 3,327 2,835 2,857 2,903 2,772 2,713 2,567 3,138 3,075 4,592 3,668 $50-250M 1, ,065 1,219 1,268 1,291 1,331 1, ,119 1,154 $ M Deal Value $279 $257 $291 $352 $364 $420 $465 $356 $238 $367 $386 $- Surce: Dealgic and William Blair & Cmpany, L.L.C. Mergers and Acquisitins market analysis

12 M&A Deal Vlume Ttal middle market deal value fr 2011 was apprximately $386B Number f Deals Deal Value % Chg. '11 % Chg. ' vs. ' vs. '10 < $50M 3,075 4,592 3,668-20% $ 38,357 $ 45,922 $ 44, % $50M-$250M 787 1,119 1,154 3% $ 89,582 $ 128,704 $ 135, % $250M-$750M % $ 109,644 $ 192,284 $ 205, % Ttal Middle Market 4,129 6,166 5,305-14% $ 237,583 $ 366,910 $ 385, % > $750M % $ 647,486 $ 674,147 $ 818, % Undisclsed 5,024 6,108 7,561 24% Ttal Deals 9,309 12,559 13,135 5% $ 885,069 $ 1,041,056 $ 1,204, % Surce: Dealgic and William Blair & Cmpany, L.L.C. Mergers and Acquisitins market analysis

13 U.S. Middle Market Deal Statistics Telecmmunicatin Services 2% Utilities 1% Infrmatin Technlgy 15% Materials 9% Cnsumer Prducts 26% Industrials 15% Healthcare 15% Financials 10% Energy 7% Middle market disclsed transactins (enterprise value between $10 & $500 millin) Surce: Capital IQ

14 Middle Market EBITDA Multiples Middle Market Average EV/EBITDA Transactin Multiples Strategic and Private Equity Grups x 7.8x 7.6x 8.2x 7.2x 7.2x 7.5x x Surce: S&P Transactins between $10 & $250 millin with EV/EBITDA multiples < 15x; excludes technlgy, media & telecm

15 Private Equity EBITDA Multiples GF Data Resurces is subscriptin database that tracks deal activity fr apprximately 185 middle market private equity firms 6.5 U.S. PEG Middle Market Deal Statistics x 6.0x 6.0x 6.2x 6.2x 6.0x 5.9x 5.9x 6.1x Surce: GF Data Resurces

16 U.S. PEG Middle Market Deal Statistics U.S. PEG Middle Market Deal Statistics 8.8x 8.2x 7.4x 7.4x 6.8x 6.5x 6.7x 6.5x 6.3x 6.3x 6.0x 6.4x 6.1x 5.4x 5.5x 5.6x 5.5x 5.2x 5.5x 4.7x $10 - $25 MM $25 - $50 MM $50 - $100 MM $100 - $250 MM Surce: GF Data Resurces

17 GF Data Market Update TEV/EBITDA INDUSTRY Ttal N = Manufacturing Business Services Health Care Services Retail Distributin Publishing/Media Technlgy Other N = Surce: GF Data Resurces

18 M&D Market Update GDP grew at 3% annual rate in Q4 f 2011, fastest grwth since Q2 f 2010 Accrding t Manufacturing ISM Reprt On Business: Ecnmic activity in manufacturing sectr expanded in January fr 30th cnsecutive mnth Overall ecnmy grew fr 32nd cnsecutive mnth New Orders Index increased in January, reflecting 33rd cnsecutive mnth f grwth in new rders

19 Histrical Manufacturing Valuatins TOTAL ENTERPRISE VALUE (TEV)/EBITDA Manufacturing TEV Ttal N = N/A N/A Ttal N = * Based n Private Equity transactins Surce: GF Data Resurces

20 Histrical Distributin Valuatins TOTAL ENTERPRISE VALUE (TEV)/EBITDA DISTRIBUTION TEV Ttal N = N/A N/A N/A Ttal N = * Based n Private Equity transactins Surce: GF Data Resurces

21 CAPITAL MARKETS

22 Financing Surces & Transactin Structures Cash n balance sheets f nnfinancial S&P 500 cmpanies ($1.1 trillin) Private equity capital Debt financing (senir & subrdinated) Alternative funding surces BDCs, SBICs, hedge funds, etc. Other financing structures Earn-uts Seller ntes Ryalties

23 $ in millins Private Equity Grup Fundraising $350,000 $300,000 $307,188 $311,122 $250,000 $215,854 $200,000 $150,000 $100,000 $137,973 $142,401 $88,763 $102,928 $50,000 $ Surce: Pitchbk, 2012 Reprt

24 $ in billins PE Investrs Sitting n $425B f Dry Pwder $140 $600 $120 $ $425 Billin $500 $100 $400 $80 $77.64 $67.80 $63.46 $76.11 $300 $60 $40 $20 $24.22 $200 $100 $ $0 Cumulative Overhang Under $100M $100M-$250M $250M-$500M $500M-$1B $1B-$5B $5B+ Surce: Pitchbk, 2012 Reprt

25 Credit Markets (Crprate & PEG) x Adjusted Credit Statistics f Middle Market LBO Lans Issuers with EBITDA f Less than $50 Millin 3.6x 3.5x 3.9x 4.1x 4.4x 3.9x 5.0x 4.9x 4.4x 4.8x 5.3x 4.6x 4.4x 3.4x 4.1x x 3.0x 3.3x 3.4x 3.3x 3.1x 3.4x x Ttal Debt/EBITDA Senir Debt/EBITDA Surce: Dealgic and William Blair & Cmpany, L.L.C. Mergers and Acquisitins market analysis

26 Credit Markets (PEG nly) Histrical Leverage Multiples x 3.3x 2.8x 2.9x 3.3x x 2.3x 1.8x 2.2x 2.4x x 1.0x 1.0x 0.9x 0.7x Sub Debt/EBITDA Sr Debt/EBITDA Surce: GF Data Resurces

27 Credit Markets (PEG nly) 120.0% Equity & Debt Cntributins 100.0% 80.0% 60.0% 42.1% 46.0% 53.1% 51.1% 48.2% 40.0% 43.9% 37.5% 29.4% 36.8% 37.4% 20.0% 0.0% 13.6% 16.6% 17.4% 12.1% 14.5% Sub Debt Senir Debt Equity Surce: GF Data Resurces

28 Bank Term Sheet Cmparisn (Oct. 11) Manufacturing Cmpany Term Sheet Bank 1 Bank 2 Bank 3 Bank 4 CREDIT FACILITY REVOLVER $ 25,000,000 $ 25,000,000 $ 30,000,000 $ 1,500,000 TERM $ - $ - $ - $ 12,000,000 TOTAL $ 25,000,000 $ 25,000,000 $ 30,000,000 $ 13,500,000 Estimated Brrwing Base at Clse $ 15,900,000 $ 16,500,000 $ 17,000,000 $ 13,500,000 INTEREST RATES Varius LIBOR LIBOR LIBOR LIBOR N RATE PLUS (LIBOR) 2.75% 4.00% 2.75% 0.00% Base Rate Prime Prime NA PRIME RATE PLUS 1.50% 3.00% NA 0.00% TERM/AMORT. (IN MONTHS) REVOLVER Annual BORROWING BASE % A/R 85.00% 85.00% 85.00% 80.00% INVENTORY 65.00% Varius 65.00% NA OTHER PREPAYM ENT PENALTY (%) 3%-2%-1% 1% Nne - 3%-2%-1%-0.5% CLOS ING FEES - CLOSING FEE % f Revlver Cmmitment 1.00% 1.50% 0.75% 1.00% COVENANTS M INIM UN NET WORTH UNKNOWN NO NO YES M INIM UN DEBT SERVICE COVERAGE UNKNOWN YES YES YES SENIOR FUNDED DEBT TO EBITDA N 3.00 N 2.75 Ttal FUNDED DEBT TO EBITDA N 0.00 N 3.50 DEBT SERVICE (INT & PRINC)

29 Bank Term Sheet Cmparisn (July 11) Metal & Plastics Fabricatin - Term Sheet Summary Bank 1 Bank 2 CREDIT FACILITY REVOLVER $ 3,000,000 $ 3,000,000 LETTER OF CREDIT $ - $ - ENTERPRISE VALUE TERM LOAN $ 1,500,000 $ 1,500,000 REAL ESTATE $ 200,000 $ - EQUIP & REAL ESTATE $ 1,500,000 $ 1,500,000 CAP EXP - EQUIP $ - $ - TOTAL $ 6,200,000 $ 6,000,000 INTEREST RATES REVOLVER - LIBOR LIBOR LIBOR RATE PLUS (LIBOR) 0.00% 0.00% REVOLVER - BEGIN. RATE (LIBOR) 0.00% 0.00% Base Rate Prime Prime RATE PLUS 0.50% 1.25% RATE PLUS (Flr) Prime 4.50% NA EV - Term Lan Term-Lan - LIBOR LIBOR Prime RATE PLUS (LIBOR) 5.50% 3.00% FLOOR 6.50% N FIXED RATE OPTION-TERM Yes N Fixed Rate 7.00% 0.00%

30 Bank Term Sheet Cmparisn Metal & Plastics Fabricatin - Term Sheet Summary Bank 1 Bank 2 TERM/AMORT. (IN MONTHS) REVOLVER TERM (ENTERPRISE VALUE LOAN) BORROWING BASE % A/R 85.00% 85.00% INVENTORY 60.00% 60.00% OTHER PREPAYM ENT PENALTY (%) 2%-1%-0.5% 3%-2%-1.0% CLOS ING FEES CLOSING FEE $ 15,000 45,000 COVENANTS M INIM UN NET WORTH TBD TBD M INIM UM TANGIBLE CAPITAL FUNDS UNKNOWN TBD M INIM UN DEBT SERVICE COVERAGE UNKNOWN YES SENIOR FUNDED DEBT TO EBITDA 4.00 TBD DEBT SERVICE (INT & PRINC) TBD CAPITAL EXPENDITURES LIM IT Yes Yes Excess Cash Flw recapture N Yes

31 Private Equity Client Terms Summary (Sept 11) Sr. Lender Sr. Sub Debt (3) Jr. Sub(2) Equity (4) CREDIT FACILITY REVOLVER $ 2,000,000 Term Lan $ 5,000,000 $ 2,373,000 CAP EXP - EQUIP Cmmn Equity $ 51,665 Security Senir 2nd Lien Unsecured TOTAL INTEREST RATES LIBOR OR PRIME Prime RATE PLUS (LIBOR-PRIM E)* 0.50% REVOLVER - BEGIN. RATE 4.00% M ezz Lenders 13.00% 10.00% UNUSED LINE FEE (%) 0.25% DEFAULT RATE 2.00% 5.00% TERM/AMORT. (IN MONTHS) M ATURITY DATE REVOLVER/Mezz 3 Year Term Mezz 5 Year 7 Year

32 Private Equity Client Terms Summary Sr. Lender BORROWING BASE % A/R 85.00% INVENTORY 50.00% INVENTORY SUB LIM IT EQUIPM ENT (ORDERLY LIQ VALUE) 75.00% BUILDING Sr. Sub Debt (3) Jr. Sub(2) OTHER PREPAYM ENT PENALTY (%) PERSONAL GUARANTEE N Crprate CLOS ING FEES CLOSING FEE $ 10,000 $ 125,000 $ 100,000 COVENANTS M INIM UN NET WORTH Yes Yes Yes TRAILING 12 M O EBITDA M INIM UM TANGIBLE CAPITAL FUNDS M INIM UN DEBT SERVICE COVERAGE TOTAL FUNDED DEBT TO EBITDA (1) 4.0 t t t 1 DEBT SERVICE (INT & PRINC) 1.25 CAPITAL EXPENDITURES LIM IT (1) Interest decline at 0.25% based n declining Funded Debt t EBITDA rati. (2) PEG Investr Grup 36% warrant psitin - High Net Wrth Individuals (3) Sr. Mezz 16.7% warrant psitin (4) PEG Principals & Selling Sharehlder cmmn equity investment.

33 Subrdinated Debt Pricing TEV 1Q Q Q Q Q Q Q Q 2011 N = % 12.9% 12.7% 12.5% 11.1% 12.6% 12.5% 12.5% N/A 12.7% 13.4% 13.0% 12.4% 11.3% 12.0% 12.0% % 12.0% 13.5% 12.7% 12.4% 12.5% 12.5% 12.5% % N/A 11.5% 12.3% 12.6% N/A N/A N/A 17 Ttal 11.7% 12.7% 13.0% 12.7% 11.9% 12.3% 12.3% 12.3% N = Day LIBOR 0.3% 0.5% 0.3% 0.3% 0.3% 0.2% 0.4% 0.6% Spread vs. LIBOR 11.4% 12.2% 12.7% 12.4% 11.6% 12.0% 12.0% 11.7% All-in return in mid t high teens (15-18%) after cnsidering PIK, warrants & ther fees Surce: GF Data Resurces

34 Summary Deal activity intensified in secnd half f 2010 & early 2011 with sme slw dwn in secnd half f 2011 Interest rates remain lw & credit markets active Excess grwth & buyut capital is available & needs t be invested Deals are taking lnger t clse everything frm due diligence t financing M&A: six- t nine-mnth prcess Financing: three- t six-mnth prcess Baby bmer-wned cmpanies are cming t market in increasing numbers estimated 8.4 millin in next years Imprving U.S. market cnditins shuld cntinue t supprt strnger business perating results & crprate valuatins Hw will M&A & credit markets react t glbal ecnmic & plitical uncertainty?

35 What t Expect Extensin f Bush tax laws gave wners tw year windw t plan & cmplete sale r recap (sell minrity r majrity stake, dividend recap) Still nine mnths t cmplete transactin Excess investment capital will supprt active M&A market & attractive valuatins fr remainder f 2012 & int 2013 Dwnside risk in frefrnt f buyers minds attempting t alleviate dwnside risk thrugh Mre meticulus due diligence Structuring f deals mre recaps, earn-uts, seller ntes & ther deferred cmp. Credit markets culd ptentially tighten due t glbal uncertainly, impacting number f transactins & their valuatins

36 TOOLS FOR BUILDING VALUE

37 Identify Stakehlder Gals Identify gals f wnership, management &/r crprate bard Retain sme wnership while having cntinued invlvement in business peratins majrity sale/recap Sell 100% & help assist with wnership transitin N invlvement after sale Transitin cmpany t family members r emplyees

38 Cmpany M&A Optins Hw seller participates will typically determine ptential buyer/investr & deal structure Outright sale (strategic r financial) Sale f majrity interest r recap (financial) mst likely require seller invlvement pst transactin Grwth capital minrity interest (financial) require seller invlvement pst transactin Management/emplyees (MBO/ESOP) Transfer wnership t family members

39 Team f Advisrs CPA, financial planner, M&A experienced attrney, investment banker, business cnsultant Help minimize taxes, ensure cverage f legal & transactin issues A cmpetitive prcess can lead t higher valuatin, favrable deal structure & terms Sell n yur terms, nt buyer s terms Net prceeds frm transactin that meets yur bjectives Early planning with yur advisrs can cver all yur bases

40 Tls fr Building Value Plans t Accelerate Value Mld strng management team Business plan Financial statements Invest in the future Imprve margins & prfitability Custmer cncentratin Balance sheet Cntrlled wnership Pre-due diligence/ sell-side diligence Timing * See appendix fr additinal infrmatin n the abve

41 IMPROVING COMPANY VALUE

42 Identify Value Drivers Assess quality f cmpany s earnings What prtin f cmpany s earnings are repeatable pst-transactin? Identify ptential earnings adjustments Gather back-up dcumentatin t supprt adjustments Identify ptential earnings issues & remedies t crrect issues prir t ptential buyer finding them

43 Intensifying Buyer Scrutiny With increase in deal activity Buyers are putting mre f their wn capital int deals Greater risk that small issues can turn int big prblems Lenders are less tlerant f ptential issues Being prepared fr buy-side diligence prcess is best way t ensure successful transactin

44 Seller Benefits Culd impact deal EBITDA Culd impact deal multiple Culd reduce deal fatigue by shrtening buyer s due diligence prcess Culd attract mre/different types f ptential buyers Culd identify tax strategies that are mutually beneficial Culd supprt internal resurces s they can fcus n running business

45 Other Imprtant Due Diligence Fcus Pints Drafting Letter f Intent Deal Structure Asset vs. Stck, etc. Wrking Capital Trends Incme Statement Revenue trends Margin trends Gaining new r lsing custmers earnings impact? Vendr accessibility & availability Related-party transactins

46 Other Imprtant Due Diligence Fcus Pints Balance sheet expsure areas Assets included/excluded Apprpriateness f reserves Inventry requirements Liabilities assumed/excluded Tax expsure areas State & lcal taxes Federal tax successr liability

47 Other Imprtant Due Diligence Fcus Pints Infrmatin Technlgy Des it prduce reliable data? Is it cmpatible? Is it scalable? Operatins What efficiencies can be develped? What synergies can be leveraged?

48 Overall Benefits We Have Seen Smth ut deal prcess Prepares buyer fr what s t cme with buyside diligence Reduce number f surprises at negtiatin table Lwer hld-backs Gives sense f security, credibility

49 Recent Examples Identified risks relating t budgeting prcess f target cmpany in cnstructin industry Budgets prvided by management included Numerus clerical errrs Aggressive bkings assumptins Assumptins that recent unfavrable trends wuld smehw be recvered with n supprting detail Takeaway Get in frnt f issue & take time t cmplete accurate & reasnable budgets

50 Recent Examples Identified risks related t lack f reprting accuracy Target was very prfitable & had numerus nnrecurring expenses Due diligence resulted in Adjusted EBITDA $1.5 millin higher than Reprted EBITDA Takeaway We were able t shw ptential buyers issues prir t LOI stage s they did nt becme reasns t renegtiate deal

51 Recent Examples Identified risks related t seasnality f target cmpany in manufacturing industry Target experienced high vlumes during summer mnths & lw vlumes during winter mnths NWC target was based n TTM average & clsing was expected during dwn time, resulting in reduced purchase price Takeaway Utilize clear wrding in purchase agreement & cnsider all factrs that may influence purchase price

52 BKD Transactin Services Overview Multidisciplinary buy-side diligence Financial Federal, state & lcal tax Infrmatin technlgy Operatinal Incentives Sell-side diligence preparatin Business & tax structuring Wrking capital reviews Audits f beginning & ending balance sheets

53 POLLING QUESTIONS

54 Plling Questin 1 Example? *Nte: questins can nly have 126 ttal characters in them Yes *Nte: answers can nly have 60 ttal characters N Unsure 54

55 Plling Questin 2 Example? *Nte: questins can nly have 126 ttal characters in them Yes *Nte: answers can nly have 60 ttal characters N Unsure 55

56 Plling Questin 3 Example? *Nte: questins can nly have 126 ttal characters in them Yes *Nte: answers can nly have 60 ttal characters N Unsure 56

57 Plling Questin 4 Example? *Nte: questins can nly have 126 ttal characters in them Yes *Nte: answers can nly have 60 ttal characters N Unsure 57

58 CPE Credit Up t 1 CPE credit will be awarded upn verificatin f participant attendance; hwever, credits may vary depending n state guidelines Fr questins, cmplaints r cmments regarding CPE credit, please BKD Learning & Develpment department at Training@bkd.cm 58

59 APPENDIX

60 Mld a Strng Management Team Success f cmpany shuld depend n entire rganizatin, nt a few peple Lss f ne r tw key persnnel shuld nt negatively affect cmpany Need strng secnd-in-cmmand & junir-level management

61 Business Plan Develp business plan reasnable & attainable assumptins Clearly define internal & external grwth pprtunities Identify & explain peratin r margin imprvements (investment in technlgy, imprved supplier terms) Identify capital expenditures Capital requirement (internal CF, utside capital) Hit yur numbers

62 Financial Statements Effective financial cntrls Audited r reviewed financial statements GAAP internal financial statements Dependable accunting department Gives sense f security, credibility Lwers due diligence csts Lwers hldbacks

63 Invest in the Future Putting ff needed expenses may nt add value Review & address peratinal prcesses Ensure systems & cntrls are in place Investment in technlgy r equipment Give best appearance pssible Als applies t investment in human capital Management Other persnnel

64 Imprve Margins & Prfitability Eliminate unprfitable prducts &/r custmers Examine expenses (excessive, persnal/family related, nnrecurring expenses) Review & imprve supplier cntracts Sell divisins r lcatins if they significantly lwer earnings & are nt strategic Manage wrking capital

65 Custmer Cncentratin T much revenue with t few custmers can give appearance that business may be risky Imprve quality (prfitability) & diversificatin f custmers Attempt t get sales cntracts r agreements Be prepared fr hldbacks in transactin

66 Balance Sheet Clean up Manage wrking capital Obslete inventry Lans t sharehlders Will clarify assets & liabilities in transactin

67 Cntrlled Ownership Different wners = different bjectives Beneficial t buy ut minrity sharehlders Can ensure smther transactin & may increase value

68 Pre-Due Diligence Litigatin Crprate recrds Cntracts Financial recrds Allw time t fix what might impact value

69 Timing If selling yur cmpany is yur exit plan, timing can be single mst imprtant factr t cnsider Buy lw, sell high applies t business sales as well Sell n yur wn terms In difficult market, deal structure & partner ging frward critical Dn t be a Lne Ranger

70 Anthny Girdan Vice President Daniel Barder Supervising Cnsultant r dbarder@bkd.cm

71 Cntinuing Prfessinal Educatin (CPE) Credits BKD, LLP is registered with the Natinal Assciatin f State Bards f Accuntancy (NASBA) as a spnsr f cntinuing prfessinal educatin n the Natinal Registry f CPE Spnsrs. State bards f accuntancy have final authrity n the acceptance f individual curses fr CPE credit. Cmplaints regarding registered spnsrs may be submitted t the Natinal Registry f CPE Spnsrs thrugh its website: The infrmatin in BKD webinars is presented by BKD prfessinals, but applying specific infrmatin t yur situatin requires careful cnsideratin f facts & circumstances. Cnsult yur BKD advisr befre acting n any matters cvered in these webinars. 71

72 CPE Credit Up t 1 CPE credit will be awarded upn verificatin f participant attendance; hwever, credits may vary depending n state guidelines Fr questins, cmplaints r cmments regarding CPE credit, please the BKD Learning & Develpment Department at training@bkd.cm 72