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In Business Exits

Exit Strategy

Explain the Past, Sell the Future

Exit

Exit

Exit

Exit

STRATEGIC PROCESS TO SELLOverview of the Oxford Process

Explain the past in financial numbers; sell the future in market terms.

Create and find a competitive market among selected strategic and financial buyers

Target approximately five to seven carefully screened strategic buyers.Frame the debate and sell the story based on future earnings.

Drafting of Confidential Memorandum that explains why you should be paid on future earnings.

Capitalize on Company and industry momentum.Certain strategic buyers enjoy strong financial results.Financial buyers have recognized value in industry or sector.Marketing process based on explaining the past and selling the future.

STRATEGIC PROCESS TO SELLFrame the Market Debate

Maximize Value

Maintain Control of Process

Manage the Marketing Process

Minimize Time and Disruption

Tell the story & Position the CompanyPerform pre-due diligenceThoroughly evaluate the universe of potential Buyers.

Level the playing field against potential buyers (information)Parallel process for potential buyers (“wagon train”)Distribution of information limited to qualified partiesConfidentiality of transaction is accorded highest priority

Determine buyer universe and prioritize potential buyersAssess type, extent and timing of information to be providedMaintain competitive dynamic at all stages Assure that buyers accurately value the companyShift procedural tactics if and when appropriateManage unforeseen events and changing conditions

Front load due diligenceDevelop and draft confidential Memorandum presentationAssist in negotiations and documentationPreserve options/ competitive environment to closingClose the transaction quickly

STRATEGIC PROCESS TO SELL

Start

-Evaluation

-Fin. Review

-Research

-Story & Message

Go to Market Now

Or

Value Enhancement

Exit Planning Develop Buyer Prospects

Distribute Profiles

Distribute O.M.

Buyer Visit Receive Offers

Limited Auction

Negotiate Deal Structure

Letter of Intent Due Diligence

Letter of Intent

Closing ~ SOLD

STRATEGIC PROCESS TO SELL

Close the deal and Celebrate!

Structure, Negotiate, and Document – the MaxNet Methodology

Create an auction environment as well as a sense of urgency on both pricing and transaction structure with targeted buyers.

Lead due diligence process by interested parties.

Identify, qualify and prioritize potential investors/ capital sources.

Prepare Private Placement Memorandum (PPM)

Develop an overall marketing plan for selling the company.

Analyze and value the company.

STRATEGIC PROCESS TO SELL

‒Undertake due diligence and business evaluation

‒Perform comprehensive valuation

‒Review objectives and timing

–Develop positioning strategy

–Determine marketing strategy

–Select and prioritize prospective buyers

–Prepare Confidential Memorandum

–Contact prospective buyers

–Explain the past, sell the future

–Negotiate confidentiality agreements

–Distribute confidential memoranda

–Prepare management presentation

–Create auction environment

–Evaluate indications of interest (price, consideration, timing, terms)

–Select final candidates

–Coordinate visits for selected buyers

–Distribute draft Purchase Agreement

–Evaluate Proposals

–Determine appropriate tactics

–Grant exclusivity

–Negotiate and execute definitive agreement

–Announce transaction

–File regulatory documents (if necessary)

–Close transaction and celebrate

Company Evaluation

Preparation Phase

Develop and Implement Marketing Strategy

Evaluate Buyer Interest/ Begin Due Diligence

Negotiate Final Deal and Close

“Explain the past, sell the future, close the deal”

Planning Phase Execution Phase Finalization Phase

Four Weeks Six to Eight Weeks Four Weeks

HOW TO VALUE YOUR BUSINESSValue Drivers 0-3 Times 4-6 Times 6+ Times

Profitability Erratic Steady High

Biz Type Commodities Competitive Technical

Biz Growth Low Moderate High

Customers Transient Steady Large

Management OK Good Very Good

Market Share Tiny Measurable Large

Statements Compiled Reviewed Audited

ROE 10% 20% 30%

Size Small $10-$25M $25M

Terms Difficult Financing Easy

IRS REVENUE RULING 80-123 , 59 -60 : VALUATION OF SECURITIES IS , IN ESSENCE, A PROPHECY AS TO THE FUTURE…NO FORMULA CAN BE DEVISED THAT WILL BE GENERALLY APPLICABLE TO THE MULTITUDE OF DIFFERENT VALUATION ISSUES…BECAUSE VALUATIONS CANNOT BE MADE ON THE BASIS OF A PRESCRIBED FORMULA, THERE IS NO MEANS WHEREBY THE VARIOUS APPLICABLE FACTORS IN A PARTICULAR CASE CAN BE ASSIGNED MATHEMATICAL WEIGHTS IN DERIVING THE FAIR MARKET VALUE

STRATEGIC PROCESS TO SELLOxford Center’s Strategic Advisory Role

A “weekend retreat” focused on the Company’s business opportunities and strategic options.

We will complete valuation of the Company assuming the sale of both a minority and majority stake utilizing a thorough review of the Company’s current financial condition.

We will analyze the Company’s competitors and provide perspective on both the Company’s market share growth opportunities and limitations.

We will provide perspective on buyer interest in the Company at various valuation levels. We will provide specific names of targeted strategic and financial buyers.

Finally, we provide a recommendation on the optimal strategic option or options, including timing considerations.

In addition, we will make recommendations on the structure of management exit packages and BOD benefits should a change of Company control occur.

EXIT PLANNING

The Oxford Center helps key employees negotiate contract terms and timelines on behalf of management prior to transaction close

We create excess compensation triggers for management upon early termination and other events, using tenure and earn out structures, always structuring a minimum cash payment

We advise management to incorporate in their contracts key provisions such as an ability to select key staff members. We also provide recommendations to management or selection of independent legal counsel.

Traditional investment banking is transactional, offering minimal personal net and marginal Company net.

The Oxford Center provides Enterprise Banking that maximizes Company and personal net.

The Oxford Center Personal is our business education program provided through our Educational Symposiums.

Long Term Enhancement

Enterprise Involvement

Strategic Assessment

Transactional

Financial Advisor

Maximum Company

Net

Minimum Company

Net

Val

ue

Enterprise Value Enhancements

Minimum Personal “Net”

Maximum Personal “Net”

EBITDA Multiple

Expansion

Exit Plannin/ BOD Benefits

Package

Estate Planning

Oxford Center Personal

Investment Banks

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