NEW VENTURES BC. May 6 th, 2015

Transcription

1 NEW VENTURES BC May 6 th, 2015

2 TALKING ABOUT EXITS! Garibaldi Capital Advisors What Do We Do?! What We All Aspire To The Big Exits! Types of Exits! Strategies to Maximize Value! What You Need To Do To Be Ready! War Stories and Questions 2

3 GARIBALDI CAPITAL ADVISORS FAST FACTS! Founded in January 2013 in Vancouver by Brent Holliday, Andrew Jones and Paul Kedrosky! Completed nine transactions in its first 24 months of operations, 10 th is closing! Five M&A transactions and four capital raises completed to date! Rapid success largely due to a different and meaningful approach to advisory services, completely tailored to the needs of private technology companies in Canada! Expanded team to five members in Vancouver! Added a new team member in Toronto and becoming registered in Ontario for national expansion! Believers in and supporters of the Canadian technology ecosystem 3

4 CENTER OF THE TECHNOLOGY M&A UNIVERSE 4

5 CORE TEAM EXPERIENCE TECHNOLOGY TRANSACTIONS February 2015 February 2015 July 2014 June 2014 March 2014 Debt Re- Financing/Equity Secondary Share Sale Capital Advisor M&A Advisor to the Seller Capital Advisor to the Selling Shareholders M&A Advisor to the Seller M&A Advisor to the Seller January 2014 December 2013 April 2013 June 2013 September 2012 Growth Equity Financing Secondary Share Sale Growth Equity Financing Capital Co- Advisor Capital Advisor to the Selling Shareholder M&A Advisor to the Buyer Capital / M&A Advisor to the Seller Exclusive Capital Advisor October 2011 September 2010 September 2010 September 2010 July 2010 Growth Equity and RecapitalizaNon Growth Equity Financing M&A Co- Advisor to Seller Capital Advisor M&A Advisor to Seller M&A Advisor to Seller Capital Advisor Garibaldi Transactions (All others with previous firms, involving Garibaldi personnel) 5

6 All-Time BC Tech M&A Top Ten (Public & Private) CDN 1. ID Biomedical 2005 $1,844M 2. Creo Products 2005 $1,219M 3. Crystal Decisions 2003 $1,179M 4. Abatis Systems 2000 $937M 5. Aspreva Pharma 2007 $932M 6. AnorMED 2006 $643M 7. Peer1 Networks 2012 $602M 8. Xantrex Power 2008 $512M 9. Coastal Contacts 2014 $435M 10. HotHaus Technologies 1999 $425M 6

7 All-Time BC Tech M&A Top Ten (Private Exits) CDN 1. Crystal Decisions 2003 $1,179M 2. Abatis Systems 2000 $937M 3. HotHaus Technologies 1999 $425M 4. Club Penguin 2007 $374M 5. CTF Technologies 2012 $192M 6. Datum Telegraphic 2000 $185M 7. Octiga Bay Systems 2004 $183M 8. Convedia 2006 $164M 9. Layer 7 Technologies 2013 $159M 10. Immgenics 2000 $122M 7

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10 BIGGEST EXITS IN TECHNOLOGY Bootstrapped or venture funded to billions: IPOs are exits too they generate liquidity for early shareholders and investors. Generally they are more favourable than M&A because value can still increase from the IPO value 10

11 TYPES OF EXITS M&A means Mergers & Acquisitions mergers don t generally involve cash Shares vs. Assets Partial Sale (Secondary) Control Sale Financing is a form of sale You are issuing stock in the amount that represents the cash raised. Spin-In Going Public 11

12 HOW TO BE A NARWHAL AND GET FABULOUSLY RICH The secret to a BIG exit is Build a GREAT COMPANY 12

13 HOW TO BE A NARWHAL AND GET FABULOUSLY RICH BE BOUGHT don t sell FOCUS ON GROWTH if you are acquiring customers and growing rapidly, buyers will notice FOCUS ON VALUE CREATION what about your business drives value? IP/patents Customer list Distribution Team and Talent Growth rates Profitable business economics Creating a new category LET PEOPLE KNOW you have to have an effective communications strategy to let the buyers know who you are Buyers often come from companies that know you well, partners, customers, suppliers so make sure you partner with potential buyers 13

14 VALUE FROM THE PERSPECTIVE OF A BUYER Value is viewed very differently from an investor to a buyer: Total Enterprise Value STRATEGIC VALUE SYNERGISTIC VALUE FINANCIAL VALUE Specific to the deal: CompeNNve threat IP or other Goodwill Talent Specific to the deal: Cost synergy Revenue potennal Financial metrics: EBITDA Revenue Gross Margins Growth Rates 14

15 STRATEGIES FOR VALUE MAXIMIZATION AT THE DEAL Number one way to extract strategic value: have an auction, because it creates competitive tension Competitive tension is an art and must be managed carefully DO NOT lose deal momentum: Number one killer of all deals is time take too much time and the buyer moves on Have all your company data organized and ready Be audited once you hit $2m+ in revenue Best foot forward: Have amazing presentation materials ready Keep growing the business during a transaction (slow down in business is death) 15

16 BE PREPARED FOR AN EXIT Start-ups can be ready from the get go: Use an on-line folder system for all documents and get everyone to use it. Employment documents, NDAs, Customer contracts all get places in a file, not attached to an and forgotten! Have great accounting and controls: Hire a controller almost immediately when you have sales. Hire a VP Finance or CFO part time and then full time when you are being audited Have a good financial forecast model, built with defensible assumptions: Be able to show it historically against budget and use it going forward to extract more value All directional data from KPIs to support your model assumptions need to be ready to present to buyers 16

17 REALITY SHOW WAR STORIES FROM THE TRENCHES I got this don t hire an advisor and do it all yourself Fire sale scramble < $10m deals hard to do Earn Outs - ugh Unreasonable value expectations every time Big companies can pay $20m it s a rounding error uh-huh Conceptual sale finger in the air Multiple Investor round waterfall complexity beyond reason Not everyone is on board the drag along 17

18 Call Brent Holliday at