At Business Israel, our M&A dept specializes in medium to large transactions. What qualifies a business to be an M&A transaction? There are several situations that could make your business qualify for our M&A department: • Your business grosses more than 1 million USD. When business reaches this size they become potential targets for acquisition by industry players. • Your business is too large for an individual buyer to purchase or finance through conventional methods. Once your business is worth multi millions, a single individual usually will not purchase it (most multimillionaires do not wish to work), • Your business is in an industry that is currently being “rolled up “in some industries, strategic buyers that want to consolidate the marketplace will purchase even small businesses. • Your business is experiencing incredible growth. If your business is running out of ‘capital because of growth, it may be an M&A target. • You want to grow your business and perhaps retain some equity. A Process Approach The program consists of 15 separate activities, each one carefully planned and properly executed to ensure a smooth transition to the next activity. Proper execution of each activity is crucial to the overall success of the sale of your company; it is for this reason that you will be able to control the progress of the entire process. Furthermore, a new activity will not begin until you have had a chance to review and approve the previous one. Assessment Meeting The program begins with a meeting between you and B.I. at your place of confidentiality where the potential sale of your business is discussed frankly, openly and confidentially. Valuation IF we agree to proceed, BI will produce the Confidential Evaluation Report. You cannot sell your company for a premium price unless you first know its true value. This document is for the seller’s eyes only. It analyzes the business and focuses on the optimum price at which it will sell in the current merger/acquisition marketplace. The evaluation stage consists of three essential components: • recasting your financial records • Defining future assumptions • Pro-Forma preparation Sell or Hold At this point you the seller, make the decision to go forward. You are under no obligation at this point to sell. However, BI is contractually obligated to market your company if you so choose. Definition of Personal Needs Your personal needs must be addressed early in the transaction. They need to be thoroughly thought out and documented to insure their satisfaction as the transaction proceeds. This stage will provide a guideline for preliminary negotiations and the deal structure of the transaction. Confidential Marketing Document The Evaluation Report will become the basis for the preparation of the Confidential Marketing Document- the official selling document for your company. This comprehensive document includes factors that will add value and marketability to your company: • Potential new business areas • Industry outlook • Market conditions • Hidden assets • Professional pro forma and recast financial statements • Reputation • Organizational structure • Products, technology, patents These issues are formatted and written to appeal to the buyer’s perspective as they address ROI, strategy fulfillment and synergy with their existing operations. Potential buyers will evaluate your company by projecting the results of future infusions of capital, technology and other resources. The Confidential Marketing Document will make these recommendations and calculations for the buyer, and at the same time project your company’s future in the most promising, influential manner. Confidential Business Summary BI will contact a large number of prospective buyers (just suspects at this point). The Confidential Business Summary is a 2-page profile of your company, used as a lead generation marketing tool to create a preliminary indication of interest from prospective buyers. The profile includes a very short summary write up about your company highlighting some of the strengths; it also provides some basic financial information (3 year sales, COGS, EBIT). The profile never discloses the identity or location of your company. Prospecting Strategy Meeting This is a critical, extremely important meeting where you and BI will create the basis for marketing your company. All the resources and experience of BI are focused on the issues of who will be the best buyers for your company and what factors might impede a sale. BI Buyers Databases will be used to identify prospective buyers. Also at this meeting a basic criteria is developed to identify other industries and potentially interested buyers. Primary Step Marketing Based on the decisions made at the Prospecting Strategy Meeting BI will develop a “long” list of active/prospect buyers. Numerous sources are used to create this primary list: • BI Buyers’ Database • Special M&A publications- National Review of Corporate Acquisitions, Mergers & Acquisitions Journal, Riggs & Allen publication, World M & A Network and several others. • Special trade publications related to your industry • Targeted mailing lists-based on specific SIC codes, size, geographic location. • If applicable placement of “Acquisition Opportunity” type blind ads in selected publications. After you approve the primary “long” list, initial contact is then made with potential qualified buyers by providing them the Confidential Business Summary and a Confidentiality Agreement which must be signed and returned prior to releasing the confidential Marketing Document. Confidential Marketing to All Respondents Prompt response and proper follow up to all interested buyers with a copy of The Confidential Marketing Document is essential. The cover letter clearly outlines the manner in which the sales process will be managed, including time tables. Selling price is not disclosed. Negotiating and Deal Structure BI brings multiple, qualified buyers to the table. Only by negotiating with several buyers under carefully managed guidelines can you be assured of getting maximum value for your company. The Letter of Intent BI will help assure you that this extremely important step is done thoroughly and thoughtfully. It is the “Agreement to Agree” with the buyer of your choice. It spells out the basic elements of the transaction; any further marketing stops at this point while the buyer performs due diligence on your company. Financing BI maintains close ties with both debt and equity sources of financing. Most buyers do not require financing assistance, but when it is necessary, we will provide introductions and advice to facilitate the closing. Due Diligence This step involves a detailed investigation by the buyer into your business. PBA will assist you and will be there through this entire critical phase of the transaction. The Purchase Agreement During this phase, all the documentation for the transaction comes together. We use our experience to review the agreement and assist in resolving last minute differences. The Closing-Pay Day! This is your objective and the end result that the Business Israel are equipped to bring about at the optimum gain to you.