Berkery Noyes

Berkery Noyes Expertise:

Executing The Optimal Outcome
Through A Highly Tailored Process

Timing

• Begin preparation and pre-marketing in within a months time– properly warming up buyers pre-process
• Communicate value expectations in early buyer calls to initiate momentum that will build throughout the process
• Prepare high-impact marketing materials that optimize value by focusing buyers on key business model attributes and appropriate financial metrics – precise positioning drives premium valuation
• Berkery Noyes’ track record in architecting customized processes and precise positioning for leading information technology companies is unmatched

Process

• Begin preparation and pre-marketing in within a months time– properly warming up buyers pre-process
• Communicate value expectations in early buyer calls to initiate momentum that will build throughout the process
• Prepare high-impact marketing materials that optimize value by focusing buyers on key business model attributes and appropriate financial metrics – precise positioning drives premium valuation
• Berkery Noyes’ track record in architecting customized processes and precise positioning for leading information technology companies is unmatched

Buyers

• Buyer universe consisting exclusively of those firms with credibility
• Create process dymanics where buyers understand competitive tension but also believe they are in a unique position to win
• Clients benefit from Berkery Noyes’ proprietary information and unparalleled credibility with the buyer universe

Outcome

• The positioning, process dynamics and competitive tension are the keys to achieving premium valuation
• Guide buyers toward highly visible future financial performance to drive valuation
• Disciplined process management and communication will convince buyers to leave “nothing on the table”
• Berkery Noyes is highly confident in delivering a premium valuation through a sophisticated, structured process

Berkery Noyes Management is

Key to Achieving Maximum Value for Clients

Preparing Business For Sale & Pre-Process Due Diligence

• Discuss goals and objectives of management
• Develop understanding of the Company’s business model, competitive position, and corporate functions
• Identify potential obstacles to sale, and deal with them directly and upfront
• Analyze strategic rational for various buyer/investor groups
• Develop understanding of all of company’s agreements and contracts
• Assist management in developing financials (historical & projected)
• Prepare detailed valuation analysis to assist buyer/investor evaluations
• Build executive summary and prepare confidential investment memorandum

Market the Business

• Finalize list of potential buyers/investors; analysis of buyer/investor-specific synergies
• Direct calling on potential buyers at C-suite level
• Build and distribute information memoranda to approved parties
• Build complete financial model and conduct thorough financial analysis
• Develop management presentation
• Field inquiries from interested parties to minimize disruption to the Company

Buyer Selection & Due Diligence

• Assist in evaluating indications of interested and qualifying buyers/investors
• Arrange value with management for qualified parties
• Facilitate flow of information to prospective buyers/investors
• Assist the company in soliciting and evaluating bids
• Evaluate price, structures, non-cash consideration, potential synergies, and conditions set by buyers/investors
• Evaluate buyers/investors financial capability to close transaction

Closing the Transaction

• Manage final due diligence process
• Assist in negotiation of definitive purchase and sale, and other ancillary agreements
• Assist in structuring and closing the transaction
• Continue to assist in preparing information to be utilized in post-closing negotiations
• Ensure timely follow-through and settlement of post-closing obligations

Overview Of

Process Responsibilities

• Capitalize on the relevant transactions, which would increase enthusiasm for the space
• Private Equity is quickly consolidating the market and changing the competitive landscape
• Berkery Noyes’ relevant experience directly benefits clients

• Create Fireside Chat Teaser (3-5p)
• Create Executive Summary (30-35p)
• Create Management Presentation (40-50p)

• Provide existing Company presentations, product overviews, RFP responses and other readily available information
• Review for completeness and accuracy

• Contact potential buyers, work with M&A counsel to negotiate non-disclosure agreements (NDAs)
• Answer preliminary questions, draft bid instruction letters, provide management and the board with regular updates

• Coach management and conduct dry-runs
• Introduce management and support management during “live” presentations

• Work with buyers to address diligence questions – Berkery Noyes will be the first line for answering requests

• Work with company M&A counsel, the board and equity holders to negotiate key purchase documents
• Leverage Berkery Noyes’ M&A experience to provide current market contract terms and structure

• Provide input on key business terms, structure, etc.
• Negotiate employment contracts with assistance of Berkery Noyes and counsel

Overview Of

Selected M&A Process Alternatives

• Targeted approach to one or two strategic buyers
• No set milestones or procedures

• Exploratory discussions with potential acquirers to assess fit
• May begin as “partnering” discussions

• Broad but confidential solicitation
• Clear procedures

• Public announcement of sale process
• Clear milestones and procedures

• Interest can be gauged before proceeding
• Most discreet Exclusive feel of negotiations may encourage more focus from buyers
• Most flexible in terms of timing

• Highly flexible
• Discreet
• Can gauge interest incrementally
• Plausible deniability
• Time to market – can commence process rapidly

• Can attract a broad constituency of interest
• Competition drives pricing and timing
• Rigorous but flexible in terms of timing

• Competition drives pricing
• Signals earnest intention to market and potential buyers
• Could draw unforeseen buyer interest
• Lends additional credibility to process/timetable

• Absence of broad competition can negatively impact
  • Value
  • Timing
• May overlook interested parties

• May communicate lack of 
serious intent
• Absence of process to drive timing
• Managing transition from discussions to negotiations

• Some risk of public disclosure
• Some buyers may be deterred from “auction” environment

• Least discrete
• Public exposure magnifies effect if process unsuccessful
• Price effect erodes if process drags on and could “over-correct” if process is not completed
• Some buyers may be deterred from “auction” environment

• Best buyer is well-known and highly motivated
• Scarce asset
• Independence is a 
credible alternative
• Confidentiality more important than price or timing

• Short list of best buyers
• Uncertain whether sale is achievable or desirable at 
this time
• Independence is a 
credible alternative
• Confidentiality and price more important than pricing

• High confidence in eventual outcome although exact buyer hard to handicap
• Price objective best met through competition
• Confidentiality, price and timing equally important

• Lack of clarity around buyer list
• Likely to sell to highest bidder regardless of price
• Confidentiality less important than price or timing

Overview Of

Process Timeline

Process Preparation

• 1 Kick-Off Meeting
• 2 Conduct Due Diligence
• 3 Financial Results and Forecast
• 4 Finalize Offering Memorandum
• 5 Prepare Data Room
• 6 Prepare Confidentiality Agreement/Phase One Process Letter
• 7 Finalize Target Contact List of Potential Buyers

Phase One: Marketing & Preliminary Non-Bindings Bids

• 8 Approach Potential Buyers
• A Distribute and Execute NDAs
• B Distribute Offering Memorandum
• C Distribute Phase One Process Letter
• 9 Respond To Follow-Up Questions
• 10 Prepare Draft Purchase Agreement and Draft Management Presentation
• 11 Receive and Evaluate Preliminary Non-Bindings Bids

Phase Two: Buyer Due Diligence & Final Bids

• 12 Conduct Management Meetings and Optional Site Visits
• 13 Distribute Final Round Letter and Purchase Agreement
• 14 Open Data Room
• 15 Respond to Diligence Requests / Diligence Sessions
• 16 Receive and Evaluate Final Bids (With Agreement Mark-ups)
• 17 Select Final Buyers
• 18 Negotiate and Sign Definitive Agreement
• 19 Announce Transaction

• Weeks
• Estimated Time of Completion
• Key Date
• Key Milestone