M&A  Fundamentals:  Strategies  for  Selec7ng  an  Investment  

Banker  

§  M&A  specialists  since  1985  –  only  so5ware/related  tech  

§  Only  works  on  sell-­‐side  with  privately  held  firms  

§  Offices    globally  –  60%  of  transacHons  cross  border  

§  Developed  the  “OpHmal  Outcome”  M&A  process  

§  Employs  a  team  approach  (5)  to  offloads  clients  

§  Senior  negoHators  are  former  CEOs  –    selling/results  oriented  

§  Largest  educator  in  the  world  –  helps  build  buyer  relaHons  

§  Largest  proprietary  buyer  database  –  provides  client  advantage  

About  SecureDocs  

SecureDocs  is  a  virtual  data  room  for  sharing  and  storing  sensi5ve  documents  both  internally  and  with  outside  par5es.      Company  Basics:    •  Founded  by  the  team  that  created  and  launched  GoToMyPC  and  

GoToMeeHng      •  Backed  by  leading  technology  companies  and  investors      •  Web-­‐based  business  so5ware  for  financial  and  legal  professionals    

§  M&A  specialists  since  1985  –  only  so5ware/related  tech  

§  Only  works  on  sell-­‐side  with  privately  held  firms  

§  Offices    globally  –  60%  of  transacHons  cross  border  

§  Developed  the  “OpHmal  Outcome”  M&A  process  

§  Employs  a  team  approach  (5)  to  offloads  clients  

§  Senior  negoHators  are  former  CEOs  –    selling/results  oriented  

§  Largest  educator  in  the  world  –  helps  build  buyer  relaHons  

§  Largest  proprietary  buyer  database  –  provides  client  advantage  

M&A  specialists  since  1985  

We  only  work  with:  

Privately-­‐held  firms  on  the  sell-­‐side.  

So>ware  and  related  tech  companies.  

§  M&A  specialists  since  1985  –  only  so5ware/related  tech  

§  Only  works  on  sell-­‐side  with  privately  held  firms  

§  Offices    globally  –  60%  of  transacHons  cross  border  

§  Developed  the  “OpHmal  Outcome”  M&A  process  

§  Employs  a  team  approach  (5)  to  offloads  clients  

§  Senior  negoHators  are  former  CEOs  –    selling/results  oriented  

§  Largest  educator  in  the  world  –  helps  build  buyer  relaHons  

§  Largest  proprietary  buyer  database  –  provides  client  advantage  

Offices    globally  –  60%  of  transacCons  cross  border  

§  M&A  specialists  since  1985  –  only  so5ware/related  tech  

§  Only  works  on  sell-­‐side  with  privately  held  firms  

§  Offices    globally  –  60%  of  transacHons  cross  border  

§  Developed  the  “OpHmal  Outcome”  M&A  process  

§  Employs  a  team  approach  (5)  to  offloads  clients  

§  Senior  negoHators  are  former  CEOs  –    selling/results  oriented  

§  Largest  educator  in  the  world  –  helps  build  buyer  relaHons  

§  Largest  proprietary  buyer  database  –  provides  client  advantage  

About  Ward  Carter  

•  Chairman  of  the  Corum  Group  

•  Joined  Corum  in  1997,  a5er  a  long  career  in  both  technology  and  finance  

•  Successfully  managed  dozens  of  so5ware  mergers  and  acquisiHons  worldwide  

Buyer Seller

The  Inherent  Problem  in  M&A  

Price Structure Liabilities

Taxes Non Competes

You  will  be  diametrically  opposed  on  EVERYTHING!  

•  More  Hme  -­‐  regulatory  environment  (SOX)  •  More  tasks  than  people  realize  •  Busy  Buyers  –  reviewing  100s  of  opportuniHes    •  Tougher  outside  professionals  •  More  complex  due  diligence  required  •  Deal  faHgue  –  Leber  of  Intent  (LOI)  to  close    

The  M&A  Process  is  Tougher…  

What  is  an  Op5mal  Outcome?  

Valua5on  Maximiza5on  

10  

CreaHng  the  best  transacHon  

structure  

Minimizing  personal  liability/risk  

Reducing  tax  liability  and  holdbacks  

Structuring  ideal  employment/non-­‐competes  

Providing  for  proper  integra5on  

5  Major  Benefits  of  a  Professional  Process  

Model        

The  prepara5on  process  will  help  forge  a  

beVer  business  model  for  your  

firm    

1  

Research      

Your  strategic  posi5on  will  improve  from  the  research/  posi5oning  process    

2  

Market  Feedback  

 Invaluable  

data/insights  straight  from  the  top  will  help  improve  your  value  

3  

Rela5on-­‐ships  

 70%  of  par5es  that  go  under  NDA  may  not  be  able  to  buy—but  could  

partner,  adding  value  

4  

Exit      

The  merger,  asset  sale,  or  financial  recap  

of  your  company  

5  

15  

1.   Confiden5ality—internal/external  

2.   The>  of  technology  

3.   Loss  of  staff  (non-­‐solicita5on)  

4.   Wear  on  CEO/management  

5.   Business  drop-­‐off—lack  of  focus  

6.   Going  to  market  too  late  

Top  6  Value  Destroyers  

Top  10  Deal  Killers  

1.   Dealing  with  only  one  buyer  

2.   Misalignment:  shareholders/empl/mgmt    

3.   Contact  at  the  wrong  level  

4.   Improper  research  of  poten5al  buyers  

5.   Misunderstanding  buyer  process/models  

Top  10  Deal  Killers  

   6.   Inability  to  portray  value  properly    

7.   Improper  due  diligence  prepara5on    

8.   Not  qualifying  buyers  properly  9.   Not  orchestra5ng  all  buyers  properly  

10.  Ego  –  Greed  –  Arrogance  

This  seller  is  serious.  

Leverage  using  a  Professional  Intermediary  

I  may  not  be  the  only  bidder.  

Potential Acquirer

Seller Intermediary  

Wonderful  if  I  buy  you,  terrible  if  I  don’t.  

10  Deadly  Sins  of  M&A  Firms  

1.      “Interested  buyer”  trap  

2.      Yes,  we  know  “all  the  strategic  firms”  

3.      Sure,  we’ve  worked  with  firms  in  “your  space”  

4.      Oh  yeah,  we  know  the  “private  equity”  guys  

5.      We’ve  done  lots  of  “interna5onal”  deals  

10  Deadly  Sins  of  M&A  Firms  

6.      Yep,  we  are  “current  and  connected”  

7.      Bait  and  switch  of  dealmakers  

8.      Sure,  we’ll  “shortcut  the  process”  if  you  want  

9.      Go  ahead,  sell  to  the  “rabbit”,  the  first  bidder  

10.      SeVlement  fees  without  success  

Choosing  an  M&A  Advisor:  10  Point  Checklist  

1.   Are  they  centered  on  your  industry?    2.   Is  there  focus  –  sell-­‐side  transac5on  experience?  3.   Are  they  conflicted?  (Buyers,  consul5ng,  opinions,  etc.)  

4.   Do  they  have  senior  staff  involved?  No  juniors  allowed!  5.   Is  there  a  team  assigned?  This  is  not  a  one-­‐man  effort.  

6.   Are  they  interna5onal?  The  buyers  are.  7.   Do  they  have  proprietary  buyer  info/contacts?  8.   Do  they  have  a  detailed  global  search  process?  

9.   Is  there  a  global  track  record?  Results  oriented?  10.  Is  their  compensa5on  5ed  to  your  success?  

Choosing  an  M&A  Advisor:  10  Point  Checklist  

Qualifying  an  Advisor  –  How  To  

•  A  successful  track  record  is  the  key  metric    

•  Get  references  from  similar  deals  

•  Review  process  and  5meline  

•  Offer  buyer  angles  you  had  not  considered  

•  Relevant  prior  deals  and  valua5on  exper5se      

•  Sample  documents  from  prior  deals  

•  Successful  advisors  in  your  space  

•  View  terms  of  engagement  agreement  

•  Face  to  face  is  essen5al  –  meet  the  team  

•  Comfort  level  –  fit  with  the  advisor  cri5cal  

 

Qualifying  an  Advisor  –  How  To  

Contact  Informa5on    

Visit our website at: www.corumgroup.com

Corum Group Ltd. Ward Carter Chairman wardc@corumgroup.com 19805 North Creek Parkway Suite 300 Bothell, WA 98011 USA +1 425-455-8281

Corum Group International S.à.r.l. Buechenstr. 9 8185 Winkel Switzerland +41 43 888 7590