Mergers & Acquisitions

Mergers & Acquisitions

Mergers & Acquisitions Our Signature Story Since 1926, we have been a trusted business partner to our clients and have earned our reputation as one of the most respected and socially responsible accounting firms in southern California. Our professionals deliver high-value accounting and consulting services and are committed to our clients and their organizations. The strength of our practice and comprehensive expertise, coupled with our global network, enables us to provide our clients with business solutions focused on their continued success at fees that represent outstanding value. Windes has 17 partners and over 140 personnel in a variety of disciplines within our three southern California offices. Our firm serves over 2,500 businesses and more than 1,500 individuals. The Windes Approach The majority of our clients are acquired through referrals from existing clients, friends, or business associates of the firm. Many of our client relationships have lasted for generations. Significant partner involvement and low personnel turnover are keys to our success. Given our local decision-making, we are able to deliver our engagement services to meet your needs without using a one-size-fits-all approach. The Windes Difference Established in 1926, we have been serving clients for almost nine decades. Local technical and engagement decision-making is made with significant partner involvement. Strong client relationships and exceptional service on the delivery of financial statements and tax returns. A combination of national firm technical expertise with the responsiveness, rate structure, and dedication to client satisfaction that makes our services an outstanding value. Dedicated employee benefit professionals with experience in mergers & acquisition issues and transactions. Global Reach: Our Baker Tilly International Network provides cultural knowledge, expertise, and resources in 133 countries worldwide. Acknowledged by Inside Public Accounting (IPA) as one of the top 25 Best of the Best accounting firms in the country and listed as one of IPA s All-Star Firms for Long-Range Planning. Motivated and hard-working staff: Consistently ranked as a Best Accounting Firms to Work For in the country by Accounting Today, one of the Best Places to Work in Los Angeles and Orange Counties by the Los Angeles Business Journal and Orange County Business Journal, respectively. Windes has been flawless in their responsiveness and deliverables, which speaks highly to the fact that as a regional accounting firm, they are able to provide nimble and cost-effective services while incorporating an integrated tax planning strategy between my two businesses. I highly recommend their services to interested parties. - CEO of a communication services company

Mergers & Acquisitions Mergers & Acquisitions Expertise How well the potential tax implications of a merger or acquisition are addressed can make all the difference in how smoothly your transaction achieves the financial and tax results you expect. Windes Mergers & Acquisitions Group has extensive experience in all facets of these complex transactions, representing buyers and sellers, as well as all parties of interest. Buy-side Services Financial and tax diligence on target including quality of earnings reports and review of financial records history and internal fiscal statements Assistance with negotiation of purchase terms, review and revise the draft agreement, focusing on tax provisions, working capital, representations and warranties, elections, allocations, indemnifications, and calculations Advisory services related to the evaluation of debt and equity financing vehicles Assistance with tax and book purchase price allocation, including reconciliation of tax allocations to book allocations Projection/forecasting assistance Review of target company s qualified and nonqualified employee benefit programs for potential liability and conformity with regulations Analysis of working capital adjustments, post transactional business and tax due diligence to be used in the execution of the negotiated indemnifications Sell-side Services Analysis of the environment before going to market to determine potential tax, operational, labor, and regulatory issues Analysis of quality of earnings to determine nonrecurring gains or losses and prevent surprises Mitigation of potential delays and the risk of re-trading the transaction with effective organization of financial data to help the buyer understand and consent to the terms of the agreement, thereby reducing the due diligence process for the buyers Careful planning and identification of the most effective tax structure for the transaction and assessing its impact on both parties Assistance with ensuring your internal resources remain focused on efficient operation of the business Projection/forecasting assistance Analysis of hold-back risks Analysis of sale s impact on current retirement benefits, merger, spinoff and termination documents and plan filings Review of any parachute payments for compliance with regulations Post-transaction Services Assistance with tax reporting, including bringing the target company into compliance with federal, state, and international tax filings discovered in the due diligence process Assistance with efficiently merging accounting methods and tax systems Identification with internal control weaknesses in operations, systems, departmental personnel, and sales-force organization Plan termination documentation and filings Restructuring Services Help with examining and understanding the complexities of restructuring options Expertise in evaluating the tax effects of troubled debt restructurings and minimization of debt cancellation income Assistance with negotiating terms of debt modification agreements Mitigation of limitations on the use of next operating losses

Mergers & Acquisitions How Does Windes Compare? (1) Big Four / National Firm (2) Windes Quality High High Reputation Mixed Excellent Expertise / Technical National Experts National Experts Service Mixed Exceptional Private Equity Clients Yes Yes Footprint Global Global Cost High Reasonable Risk Management Internal Firm Focused Client Focused (1) Big Four / national firm - centralized decision making. (2) Windes - local decision making. Our Global Reach As an independent member of Baker Tilly International, Windes has access to the cultural understanding, knowledge, and expertise our clients need to succeed on a global level Baker Tilly International is the 8th largest network of accountancy and business services firms in the world, with revenues of $3.6 billion Represented by 154 independent member firms with 27,000 professionals in 133 countries worldwide Headquarters 111 West Ocean Boulevard Twenty-Second Floor Long Beach, CA 90802 Tel: 562.435.1191 Orange County 18201 Von Karman Avenue Suite 1060 Irvine, CA 92612 Tel: 949.271.2600 Los Angeles 601 South Figueroa Street Suite 4950 Los Angeles, CA 90017 Tel: 213.239.9745

Gary L. Curtis, CPA Partner, Tax & Accounting Services Mergers & Acquisitions Group Practice Leader Over 30 years of tax experience representing buyers and sellers in merger, acquisition, divestiture and reorganization transactions. Over 20 years in dedicated practices in mergers and acquisitions for national firms. Representations of buyers and sellers in the following areas: 18201 Von Karman Ave. Suite 1060 Irvine, CA 92612 949.271.2600 gcurtis@windes.com Due diligence with identification and assessment of business and tax issues in purchases and mergers, including reverse due diligence with respect to C-Corporations, S-Corporations, partnerships and LLC s Structuring of taxable transactions to achieve desired tax and financial results, including taxable forward and reverse transactions, asset sales and deemed asset sales, and sales of divisions Structuring of non-taxable mergers, which includes acquisitive and divisive reorganizations Tax planning, that encompasses disposition of unwanted assets through non-taxable spin-offs Document review focusing on indemnifications, representations and warranties, elections, asset allocations and working capital adjustments Additional seller side representation in pre-sale tax planning and negotiations Assistance with tax reporting, including review and preparation of short-period returns and bringing company into compliance for federal, state and local and international issues discovered during due diligence Representations of buyers and sellers of financially troubled companies Services to buyers, sellers, banks and unsecured creditors Analysis of net operating loss carryforwards to determine impact of various debt and equity structures Minimization of debt cancellation income American Institute of Certified Public Accountants, Member Association for Corporate Growth, Member California Society of Certified Public Accountants, Member

Robert M. Corbin, CPA, MST, CGMA Partner, Tax & Accounting Services Robert has over 22 years of tax experience representing middle-market clients in both Big Four and regional firms. Throughout his career, he has represented clients on mergers, acquisitions and reorganizations including structuring exit strategies. He is currently the National Chairman for Baker Tilly International s State and Local Tax Committee and sits on the firm s Board of Directors. Transactional Experience 18201 Von Karman Ave. Suite 1060 Irvine, CA 92612 949.271.2600 rcorbin@windes.com $40 million acquisition of medical device manufacturer assisted in due diligence to determine income, franchise, sales and use, property and escheat tax liabilities $20 million sell-side medical contracting company with international operations structured both debt and equity proceeds to be tax efficient for federal and state filings $15 million acquisition of spice packaging company to national food manufacturing conglomerate - reviewed state tax credits and incentives to offset resultant gains $60 million acquisition of real estate and hotel operations, including analysis of negotiated local incentive credits granted by city to offset sales taxes Assisted with $60 million leveraged ESOP transaction of manufacturer for sale to plan and resultant gain deferral for shareholders Due diligence on workforce of NASA contractor to maximize state and federal workforce opportunity credits Sales tax due diligence on $40 million retailer prior to sale winning over 30 voluntary tax disclosures abating penalties of over $500K Restructure of $50 million real estate portfolio to minimize reassessment of value for property tax Analyzed qualified activities of $45 million manufacturer resulting in over $2 million of research and development tax credits Federal, state and local due diligence for $45 million sushi kiosk franchise prior to sale American Institute of Certified Public Accountants, Member Association for Corporate Growth, Member Baker Tilly International, North American State and Local Tax Committee, Chairman California Society of Certified Public Accountants, Member

James A. Cordova, CPA, MST Partner and Chairman, Tax & Accounting Services Jim has more than 24 years of experience in public accounting and is chairman of the firm s Tax & Accounting Services department. He also serves on the Windes Board of Directors and is a member of the firm s Corporate Governance Committee. 111 West Ocean Blvd. 22nd Floor Long Beach, CA 90802 562.435.1191 jcordova@windes.com Jim specializes in analysis and selection of business entities, tax factors and implications related to business dissolutions, tax factors associated with inbound and outbound reorganizations, mergers and acquisitions consulting, multi-state taxation issues and planning, foreign parent and subsidiary compliance, and tax strategies involving real property transactions. Transactional Experience Assisted with leverage buy out of technology equipment manufacturer including structure planning and due diligence $50 million sale side due diligence of large safety equipment wholesaler. Including tax structure consulting, multi state nexus and sales and use tax issues, and 338(h)10 calculations $55 million sale side due diligence of advertising company. Reorganization and structure issues, including tax planning for built in gains issues $75 million buy side due diligence including multinational issues and deal structure planning for multinational developer $40 million structure planning engagement for divorcing partners. Including deferred gain, property tax planning, and basis considerations for tax minimizing strategy Assisted in taking $120 million machine manufacturer to market representing buyer to various private equity groups Buy side due diligence and review of feasibility study of $16 million residential development. Including structure planning and property tax considerations Extensive experience on buy side structure planning of real estate funds with capital raises from $5-$50 million. Including structure planning, carried interest issues, and debt structuring issues $45 million restructure and leverage buy out of automotive parts manufacturer. Represented seller in all aspects of tax due diligence including structure planning and purchase price allocation. American Institute of Certified Public Accountants, Member California Society of Certified Public Accountants, Member Memorial Medical Center Foundation, Former Executive Committee and Board Member Tax Practice Management Committee, Member

Richard L. Green, CPC, QPA, QKA, APA Partner, Employee Benefit Services Richard joined Windes in 1991 and leads the firm s Employee Benefit Services department. With expertise in plan design, administration, and compliance for employee benefit plans, Richard s practice focus includes pension and profit sharing plans, 401(k) and 403(b) plans, cafeteria plans, defined benefit plans, plan compliance and correction, and IRS reporting. Additionally, Richard provides consultation on all qualified plan issues, non-discrimination testing, ERISA compliance reviews, retirement distribution planning, mergers and acquisitions, plan qualification, and plan design and implementation. 111 West Ocean Blvd. 22nd Floor Long Beach, CA 90802 562.435.1191 rgreen@windes.com Richard has served the retirement plan needs of small- to middle-market businesses and professional corporations since 1981. He has authored numerous articles on retirement plan issues and was the recipient of the firm s Excellence in Technical Achievement Award in 2001. He became a partner in 2004 and was named department chair in 2008. Richard has over 30 years of experience in the employee benefit issues involved in both buying and selling a business. He has assisted employers in performing due diligence on both qualified and nonqualified plans, as well as employment and severance agreements. American Society of Pension Professionals and Actuaries, Certified Pension Consultant, Qualified Plan Administrator, Qualified 401(k) Administrator, and Associated Professional Member National Institute of Pension Administrators, Accredited Pension Administrator

Sean K. McFerson, CPA, MBT Partner, Tax & Accounting Services International Tax 111 West Ocean Blvd. 22nd Floor Long Beach, CA 90802 562.304.1339 smcferson@windes.com Sean has more than 18 years of experience in public accounting and is a partner in the firm s Tax & Accounting Services department. He specializes in domestic and international taxation issues of multi-national companies (both public and private) and start-up companies, including domestic and international restructuring, consultation on year-end and quarterly income tax provisions, tax-efficient integration of acquired targets, developing and implementing intellectual property-migration strategies, and formation of international entrepreneur structures. Sean s expertise extends to consultation and preparation of various federal and international tax reports, such as net operating loss studies, accounting method changes, and miscellaneous foreign reporting. Sean serves high-net-worth individuals and a wide variety of clients in the technology, manufacturing, distribution, restaurant/hospitality, and services industries. Sean s experience includes working abroad, in London, where he worked at the United States Tax Desk for PricewaterhouseCoopers LLP. Representations of buyers and sellers in the following areas: Due diligence, including identification and assessment of international tax issues in purchases and mergers, including reverse due diligence with respect to C-Corporations, S-Corporations, partnerships and LLCs Post-deal integration of the target s foreign subsidiaries with buyer s existing foreign subsidiaries Post-deal integration of target s foreign intellectual property structure with buyer s existing foreign intellectual property structure American Institute of Certified Public Accountants, Member Association for Corporate Growth of Los Angeles (ACG LA), Member Baker Tilly International Tax Committee, Member California Society of Certified Public Accountants, Member Catholic Charities of Los Angeles, Board Member

Lyle Scheppele, CPA Partner and Chairman, Audit & Assurance Services Lyle joined Windes Audit & Assurance Services department in 1988 with seven years of private industry experience. He is the partner responsible for the firm s Audit & Assurance department, a member of the Board of Directors, and is the partner-in-charge of the firm's Orange County office. Lyle s practice focus consists of financial reporting, audit and review services, internal control evaluation, business mergers and acquisition planning, and business structure. He has extensive expertise in national and international transactions for both public and private companies. Lyle s industry experience includes real estate, construction, manufacturing, wholesale distribution, retail, biomedical, and nonprofit organizations. 18201 Von Karman Ave. Suite 1060 Irvine, CA 92612 949.271.2600 lscheppele@windes.com Lyle is involved in the firm s national and international membership with Baker Tilly International, the world s eighth largest accounting firm network. Representations of buyers and sellers in the following areas: Creativity and broad transactional experience includes assisting buyers, sellers, investors, and other advisors to move the transaction forward. Transaction highlights: $140 million recapitalization of U.S. manufacturer via a leveraged ESOP assignment included consulting on transaction design, due diligence, and forecasting $175 million sale of global consumer product line, including assistance with structure, forecasting, due diligence, off-shore royalty arrangement $300 million public debt and equity raise serving as the auditor $15 million purchase and conversion of a global public-to-private company providing buy-side risk analysis and due diligence, transaction design and process consulting $131 million sale of a western United States distributor, including transaction design, shareholder planning, due diligence, and negotiation American Institute of Certified Public Accountants, Member Association of General Contractors, Member Credit Union of Southern California, Board of Directors California Society of Certified Public Accountants, Member Construction Financial Managers Association, Member The ESOP Association, Member National Center for Employee Ownership Pacific Symphony, Board of Directors and Audit Committee Chair