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Joint Venture Presentation
Outline
• Teaming & Joint Ventures Generally
• When It’s Worthwhile
• Benefits
• Samples
• Getting Started
• Contract Relationships
• Making the Relationship Work
Presenter
Gregory M. Jones20+ year career in corporate and business development. Previous experience includes investment banking, general management and a Business Unit President; Specific experience in establishing JVs for UTC/Pratt & Whitney. Prior Corp Exp. JP Morgan, UTC.
•B.S., Morgan State University•M.P.M., Carnegie-Mellon University•M.B.A., Wharton School, University of
Pennsylvania
3
General Arrangements• TEAMING
− Individual entities agree to pursue a particular project together.
• JOINT VENTURE
− Individual entities form a common enterprise to pursue a particular project together. Share risks and rewards in developing a new market, product or technology
• PARTNERSHIP
− Individual entities form an enterprise as an ongoing business concern .
• SUBCONTRACT
− One entity agrees to perform one portion of another entity’s contract.
Joint Venture Definition
• Contractual agreement
− Duration and reporting obligations
− Agreement of Board of Directors
− Ensures no single venture can control the entity
• If one entity can usurp power, report as subsidiary and not joint venture
• Involves two or more parties
• Parties undertake economic activity subject to joint control
Types of Joint Ventures
• Jointly controlled operation
− Venture uses own assets, incurs own expenses and liabilities
− Each venture provides expertise to manufacture product
• Different parties carry out different responsibilities
• Jointly controlled assets
− Recognizes income from sale of output
− Oil, gas, mineral extraction industry
• Each company shares in ownership of assets, economic benefit of extracting oil
• Jointly controlled entities
− Establishment of corporation or partnership where each entity has interest
− Maintains own accounting records
− Each entity contributes cash or resources
Why Joint Venture
• Complement strengths and capabilities.
• Eliminate barriers to entry.
• Pursue opportunities otherwise unattainable .
• Build track record of past performance.
• Create efficiencies and economies of scale.
• Achieve cost control.
• Keep pace with competitors.
• Win more business!
Combining Resources—The Marriage….What do you bring to the equation
JV Partner II
Technology
Financial Resources
JV Partner I
Mfg
Sales
Branding Mkt Access
Value Proposition • Benefit for the Customer
− Added capabilities− Lower product cost
• Combined offer to potential customers
• Benefits to JV Partner
Key Provisions
A. Strategy for Proposed JV(“Newco”)
B. Branding of Newco
C. Suggested Structure & Scope
D. Formation and Term
E. Employees (Secunded or Permanent)
F. Capitalization
G. Transfer of Ownership
H. Board of Managers/Directors
Provisions Continued
J. Operating Structure
K. Management
L. Technical Assistance from both parties
M. Administration
N. Termination
O. Disputes
Worthington Industries Joint Venture with Viking Industries
− Worthington, diversified metal processing company
− Viking Industries, MBE, intermediate steel processor
− Viking & Worthington Steel Enterprises (VWS)
• Joint Venture is MBE
− Purchased Assets of Valley City Steel
− Aligns naturally with steel processing core competencies
− Viking gets access to Worthington’s sales and marketing experience and established relationships
− Worthington gets presence in Northeast Ohio and provides the market another quality MBE steel processor
Meckley Services Joint Venture with Diamond Support Services
− Meckley Services, leader in General and Construction Commercial Real Property Services;
− Diamond support Services, leader in general residential real property services;
− Formed Diamond-Meckley Services , 8A and Certified Small, Minority and Women Owned Disadvantaged Business
− Expand Core Competencies
• 40 Service Vehicles and 6 regional offices in the Mid Atlantic Area
• Meckley Services M/WBE status plays a key role in achieving client’s supplier diversification annual goals
Interface Construction Corp and Tarlton Joint Venture
− Interface, oldest black-owned general contracting firm in the St. Louis, Mo area
− Tarlton, Woman owned firm providing pre-construction and construction services
− $100 Million project to build BJC HealthCare Center in St. Louis.
− Opportunity to win a project that typically would not be available to Interface;
− Helped BJC, one of the largest non-profit healthcare organizations in the US exceed it’s MBE/WBE inclusion goals
(860) 614-1202gjones@divestiturepartners.comwww.divestiturepartners.com280 Trumbull Place, 21st FloorHartford, CT 06103
Gregory M. JonesPrincipal