MSC Investment Banking Overview 2014

8/13/2019 MSC Investment Banking Overview 2014

1/28

0

Madison Street Capital: Overview ofInvestment Banking Services


2/28


3/28

ConfidentialFirm Overview

I. Madison Street Capital Overview

II. MSC Global Investment Banking Services Overview

III. Capital Raising Process

IV. Mergers & Acquisitions Process

V. Capital Markets Credentials

VI. Key Professionals

VII. Contact Information

Table of Contents

2


4/28


Madison Street Capital Overview

Madison Street Capital (MSC) is a global investment banking firm providingfinancial advisory services, merger and acquisition expertise, financial opinions, and

valuation services to publicly and privately held businesses.

MSC and its broker dealer, MSC-BD, LLC , a registered broker-dealer and aFinancial Industry Regulatory Authority (FINRA) member, are committed to thehighest levels of professional standards.

The firm has industry sectors around the world on engagements ranging from: M&A

transactions, Private Debt Placements, Capital Raising, Fairness & SolvencyOpinions, Valuation, Restructuring and ESOP Advisory.

MSCs professionals have represented a broad universe of Public and PrivateCompanies, as well as their Boards, Special Committees, and shareholders.

Current in-house deal count of more than 100 deals under exclusive contract.

3


5/28


Madison Street Capital Expertise

MSC professionals have specialized expertise in partnering with middle-market firmsacross multiple industry verticals and niche markets to achieve the optimal results.

We analyze each clientsunique needs to obtain the best match between buyers andsellers, arrange appropriate financing, and create capitalization structures thatoptimize the clientspotential.

4

Investment Banking

Mergers & Acquisitions Capital Raising Private Placements Corporate Finance Advisory Financial Restructuring ESOP Advisory

Independent Valuation Services

Fairness and Solvency Opinions Financial Reporting

Tax Compliance Portfolio Valuation Litigation Support

Professional Depth

Unparalleled Leadership Decades of Experience

National Footprint Highest level of Professional

Standards

Extensive Network

Diverse range of contacts on bothfinancial and strategic fronts

Connections with high leveldecision-makers

Comprehensive Resources


6/28









Table of Contents

5


7/28


Our Clients

MSCsGlobal Investment Banking services:

Small to middle market businesses in United States (and Canada);

Established and successful businesses seeking growth with a commercial presence in the United States;

International companies expanding into the United States; and

International companies seeking United States based capital providers.

Our clientsprofile include:

Companies with $10 to $500 million in revenue (USD);

Companies with an EBITDA of $1 to $50 million (USD); and

Companies with growth potentialabove 10% in yearly sales.

US Industry Sectors

AviationBusiness ServicesConstructionConsumer Goods and ServicesFinancial ServicesFood & BeverageHealthcareInformation TechnologyManufacturingMediaReal EstateWholesale and Retail Trade

International Industry Sectors

Consumer GoodsEducationEnergyFinancial ServicesHealthcare

InfrastructureIrrigation and DrainageSanitationTelecommunicationsTransportationWater

AgribusinessTextilesBusiness ServicesConstructionFood & Beverage

ManufacturingMediaReal EstateRenewable EnergyRetail

6


8/28


Unique Appreciation for the Middle Market

Management is a more crucial variable

More room for creativity with growthopportunities (storytelling)

More granular due diligence requirements

Wider range of potential valuationoutcomes

Larger number of potential participants inprocess

Business is often not a must have for

any single investor

Transaction agreements are highlycustomized

Process can be taxing on limitedmanagement resources

Must make room in the process for investors to get to know management,sometimes even before submission of first round bids

More time invested in pre-launch phase of process

Requires anticipation of potential issues to avoid slippage in timetable andunwinding of competitive tension

Process Matters

Requires experience to narrow the field and to interpret first round bids

Need to walk a fine line between drawing investors into the process andconveying strength at the same time

Contract negotiations cannot be divorced from the rest of the process

Advisor must be prepared to carry a significant load

GREATER SCOPE FOR ADVISOR TO ADD VALUE. NEED FOR SPECIALIZED SKILLS.

7


9/28


Sound Strategic Advice

MSC differentiates itself by leveraging our experience to provide soundstrategic advice at each of the critical junctures in the Transaction process.

Dedication toMiddle Market

M&A / Cap Raise

Superior SeniorLevel Attention at

Each Stage of

the Process

UnparalleledAttention to

Detail

OutstandingNegotiation Skills

InstitutionalNetwork of

Strategic andFinancial Buyers

Critical Junctures in the Front-End MarketingProcess

Identifying timing to initiate a process Crafting the appropriate sale process Identifying potential strategic and financial

partners Conveying the story and opportunities

Deciphering initial indications Assembling a competitive group of investors Showcasing the Company and management

to investors

Critical Junctures in the Back-End Process

Fully understanding all final proposals todevelop a true comparison between bids

Establishing the right next steps Determining the most advantageous time to

negotiate with potential investors Developing counter proposal(s) and the best

script with which to deliver them Craft a process to maintain leverage through

closing

8


10/28









Table of Contents

9


11/28


MSC Capital Raising Process

10

Description of Services:

MSC Global Investment Banking acts in several capacities on capital raising projects such asfinancial advisor and arranger of senior/mezzanine debt and equity for capital requirements. Ourcapital raising services include:

On-going enterprises seeking growth capital

Revenues track record above $10 million (USD) EBITDA profit levels above $1 million (USD)

Quantifiable track record of growth

Companies interested in capital raising towards M&A activities: buy or sell roles

Certain Real Estate Projects across different stages of Development

Furthermore, MSC has a world-class network of financial sponsors that are mandated to lend tomiddle market opportunities both domestic and internationally based. These include specialtyfinance companies, hedge funds, certain US and global commercial banks and other alternativelending sources.


12/28


MSCs Capital Raising

Distinctive Approach:

MSC negotiates ideal deal terms based on agreed upon strategic objectives. Key elements of

MSCs negotiation methodologies include valuation considerations and risk mitigationstrategies

Selection of our capital partners in our engagement execution

strong relationships with lending groups interested in the middle market segment;

strong partnerships with government agencies (like SBA) supporting middle market initiatives; and

negotiations capabilities to reach the best terms to our clients

We conduct an in-depth pre-marketing phase leveraging MSCs extensive network withinstitutional investors to:

understand the marketsappetite for the deal;

identify potential sources of funds (SOFs); and

validate and/or improve our clients business plan

Our deal execution team processes and negotiates our deals from start to finish includingcoordinating due-diligence and the communication process with prospective investors

11


13/28


MSC Professionals Add Value MSC serves as an intermediary in negotiations

Insulates the owners and management from the need to make immediate decisions

Ability to act as the bad cop and not sour the buyer on the transaction or the owners and

management team Provides the owner the ability to maintain an appropriate distance from the sales process

MSC professionals leverage industry and financing experience Prepares a company for the transaction process and can provide suggestions on how to enhance

value in the eyes of bidders

Utilizes industry contacts and pre-existing relationships to target investors most likely to meet

shareholder objectives Understands the implications of different deal terms and how to guard clients against

disadvantageous conditions

MSC process allows management to concentrate on the day-to-day issues ofrunning the business Avoid neglecting customers, vendors, and employees

It is critical that the business continues to perform well during the transaction process

MSC raises the sophistication level of the transaction and maximizes potential value Investors assume they can acquire stakes in companies that lack representation at bargain prices

Representation translates directly into more advantageous transaction terms

12


14/28









Table of Contents

13


15/28


Mergers & Acquisitions Services

Description of Services:

MSC identifies, assesses and values strategic acquisition targets for our clients and providescapital raising support to finance growth strategies. MSC also assists our clients with the designand implementation of successful exitstrategiesin connection with sell-side mandates

Distinctive Approach:

MSC conducts a detailed diagnosis of our clients strategic considerations and competitivelandscape in order to formulate and execute accretive transactions

For buy-side engagements, MSC identifies target companies through our extensive middle-market network and well-developed institutional relationships as well as proprietary andindustry focused databases

From a sell-side perspective, MSC assists our clients in the identification of value maximizingstrategies and strategic planning. MSC serves as an integral partner throughout businessesdivestitures whereby we coordinate the communication and negotiation with strategic andcorporate investors

14


16/28


Buyers & Sellers - Bridging the Gap with Structure

Proper deal structure can narrow the gap between expectations

M&A transactions can be complex at times. Given that there has to beagreement between both the buyer & seller that is predicated with thehighest degree of trustit can be difficult to protect against every scenariothrough a contract. It is important to balance incentives across allconstituents and create a structure that retains this alignment as best aspossible post-transaction. For a buyer, they will need to ensure interestremains sufficiently aligned with any selling equity holders who remains keyto managing the business and/or crucial to investment function.As with most successful deals, a true partnership exists at the senior-mostlevel of each business. Below are key deal elements that should beconsidered, and in some cases, need to be carefully designed in order to

achieve success:

Earn outsStaged sales/ Delayed or contingent payment of purchase priceEmployment contracts/ Multi-year commitments post-transactionRetention paymentsCompensation plansPut &Call OptionsEquity grantsSeparate treatment of management and incentive fee streamsAmount of retained equity in business by sellerReinvestment of after-tax proceeds in the businessConsideration about day-to-day management /control of business

* Given the complexity of these type of deals, it is wise to have properrepresentation with regards to investment banker, attorneys, accountantsand other professionals.

MSC

Client

Tax & EstatePlanning

Law Firm

Employees

MadisonStreetCapital

Acquirer

15


17/28


Comparison of Buyer Types

The two primary types of acquirers are strategic and financial buyers

Each set of buyers typically evaluates an acquisition based on different criteria and goals

FINANCIAL BUYERS

STRATEGIC BUYERS

Typically public or private corporationscurrently involved in similar orcomplementary business line

Places a greater emphasis on identifyingand realizing potential revenue and costsynergies

Rationale for acquisition more strategic innature (i.e. reducing competition, enternew geographic markets, etc.)

Typically concerned with generating long-

term value from acquisition andeffectively integrating the target into thebuyers existing operations

Higher valuation could be supported bythe realization of synergies

Does not have a similar business inexisting investment portfolio

Seeks entry into an attractive marketwith potential for growth anddefinable exit strategy

Acquisition can serve to diversify

investment portfolio and create aplatform for future acquisitions in thesame space

Identification of opportunities tocreate value through a strategicpartnership

Has a similar or complementarybusiness in existing portfolio ofinvestments

Acquisition drivers are typicallysimilar to those of strategic buyers,but additionally driven by the need toput raised capital to work and grow

investments before fund life expires

Often an ideal buyer as they havefinancial resources of private equitybacking and strategic rationale tosupport a favorable purchase price

Raises capital in funds from various sources to invest in businesses with theexpectation of exiting within a relatively short time period (typically f ive to sevenyears) to achieve a targeted rate of return for investors (generally 20% to 25%)

ADD-ON PLATFORM

16


18/28


Assessing Deal Structure and Options

17

Number of transactions completed Integration success of previous transactions

Integration planning effort Marketing Financing relationships Credit approval process of financing source Financing structure of current operations

Equity available

Returns to equity participants Deal with the decision makers who can allocate capital Strong strategic fitcore business:

Strategic logic: component, module, system Geographic reach; low cost sourcing opportunity Capacity needs Capable of identifying and implementing process improvements

Capable of bringing engineering and design improvements Focused purchasing effort could generate material cost reduction Customer diversification


19/28









Table of Contents

18


20/28


Assessing Deal Structure and Options

19

Number of transactions completed Integration success of previous transactions

Integration planning effort Marketing Financing relationships Credit approval process of financing source Financing structure of current operations

Equity available

Returns to equity participants Deal with the decision makers who can allocate capital Strong strategic fitcore business:

Strategic logic: component, module, system Geographic reach; low cost sourcing opportunity Capacity needs Capable of identifying and implementing process improvements

Capable of bringing engineering and design improvements Focused purchasing effort could generate material cost reduction Customer diversification


21/28


Capital Markets Credentials

Madison Street Capital provides investment banking services to corporations and institutionsthroughout the United States and around the world. Our model provides clients with new sources

of demand by effectively penetrating 2nd and 3rd tier investors that are typically overlooked bylarge firms as well as large tier 1 accounts with a goal of creating a diverse investor base

Our Competitive Advantage:

Distribution capabilities to place a significant volume of securities with institutional investors

Diverse investor base that includes: Financial Institutions, Corporations, Money Managers,Mutual Funds, Pension Funds, State and Local Governments, Unions, Endowments andFoundations

Access to deep pools of capital based on relationship with pension funds

Reputable team exceptionally qualified to lead-manage or co-manage significant transactions

20


22/28


Recent Transactions

21


23/28







VI. Senior Professionals


Table of Contents

22


24/28


Senior Professionals

23

Karl D'Cunha, CA is a Senior Managing Director at Madison Street Capital. The range ofservices include M&A Advisory, Capital raising, Portfolio Valuation, Restructuring andFinancial Sponsor advisory services. Mr. DCunhahas broad financial services experienceincluding over 16 yearsexperience in the asset management industry working with some ofthe largest investors in the world.

Mr. DCunha has been actively raising capital for companies in different stages ofdevelopment and has established a global network of contacts at private equity, venturecapital, hedge funds, RIAs,public and private pensions, family offices and other entities. Mr.D'Cunha was previously an audit manager at Ernst & Young, LLP andPricewaterhouseCoopers, LLP with 8 years experience in their respective AssetManagement industry groups.

Mr. D'Cunha holds a B.A. in Finance and Economics from University of Western Ontario anda Graduate Diploma in Accounting from McGill University. Mr. D'Cunha is a Chartered

Accountant, a level III candidate in the Chartered Financial Analyst program, and is registeredwith FINRA as a General Securities Representative (Series 7) and an Investment Banking

Representative (Series 79). Mr. DCunha is a member of the following organizations: NewYork Hedge Fund Roundtable, Canadian Institute of Chartered Accountants, CFA Society ofChicago, CFA Institute, and American MENSA, Ltd.

Business Experience


25/28



24

Business Experience

Jay Rodgers is a Managing Director at Madison Street Capital. His primary responsibilitiesin the Capital Markets Group are focused on merger and acquisition advisory and corporatefinance engagements. Mr. Rodgers has worked on the largest amount of renewable energyprojects at the firm across several verticals. Prior to joining MSC, Mr. Rodgers worked for anationally recognized management consulting firm as Director of Transactions forMergers/Acquisitions and Corporate Finance. In the publicly-traded market place, Mr.Rodgers spent twenty years with Hornblower & Weeks-Hemphill, Noyes Inc., Drexel BurnhamLambert, and Lehman Brothers.

Mr. Rodgers served as an officer in the United States Army for two years active duty and fouryears of reserves following graduation with a Bachelor of Science in Business from FloridaState University.


26/28



25

Business Experience

Reginald McGaugh is a Managing Director at Madison Street Capital. Mr. McGaugh leads

the Global Healthcare Markets Group for the firm. Mr. McGaugh has extensive experienceand relationships in the healthcare sector including biotechnology firms, pharmaceutical firms,Tele-medicine firms, diagnostic imaging firms, healthcare medical device firms, HealthcareREITs and direct professional experience with both healthcare providers and managed carecompanies. Prior to joining Madison Street Capital, Mr. McGaugh served as a seniorexecutive with a Merchant Banking firm that was involved in an $83 Million acquisition of aspecialty hospital where he served as interim Chief Operating Officer for the hospital and theassociated ancillary facilities. His experience includes the development and projectmanagement of specialty hospitals and big box ambulatory care centers specializing onhospital/physician joint venture structures.

Mr. McGaughsexperience also includes the energy, telecommunications and transportationsectors. Mr. McGaugh has served as an analyst/consultant with Harley Davidson FinancialServices, MidAmerican Energy Holdings (A Berkshire Hathaway Company), Peoples Energy,University of Nebraska Medical Center, Nebraska Orthopedic Hospital, Ryder Logistics andWestLB Mellon Private Equity. Along with his focus on healthcare, Mr. McGaugh will alsofocus his efforts on the advisory side of deals structured in compliance with Islamic Law

(Sharia) principles as the firm expands in Africa and the Middle East.

Mr. McGaugh holds a Bachelor of Science in Finance degree from the University of Nebraska Lincoln and a MBA in Finance from the Florida A&M University School of Business &Industry. He completed a 2 year formal credit training program at Wells Fargo Bank.


27/28









Table of Contents

26


28/28

Confidential

Tuesday, December 12th, 2006

For more information please contact :

Karl DCunha, CA

Senior Managing Director

105 W. Madison Street, Suite 1200

Chicago, IL, 60602(312) 529-7000

[email protected]

Date post:	03-Jun-2018
Category:	Documents
Upload:	madstcap
View:	224 times
Download:	0 times

MSC Investment Banking Overview 2014

Documents