Dos & Donts

The 1 Reason Business Sellers Leave Chips on the Table_oct 2013 Plan and start the process early. Lessen the reliance on the owner by putting systems and people in place. Understand how buyers determine value and determine a base value for your business. Engage the right advisors to assist you. You can't afford a learning curve. Watch out for customer and supplier concentration.

3 mistakes that might cause your M&A fail_ASP_04 dic 13 Mistake 1: Insufficient Due Diligence Mistake 2: Focusing on price and not terms Mistake 3: Poor (or no) Post Merger Integration

6 Reasons Why So Many Acquisitions Fail_Busisness Insider_ Nov 13 Misgauging Strategic Fit Getting the Deal Structure Or Price Wrong Misreading The New Companys Culture Blindly Focusing On Integration For Its Own Sake Not Focusing Enough On Customers And Sales (vs. Cost Synergies)

Avoiding the Biggest Deal Killer_ DIvestopedia Ago 13 Know when it is a good time to sell YOUR business Know why you want to sell Know the companys best features and its blemishes Know what you will do after your business is sold Know the value of your business Know that your asking price is based on reality.... a reality that buyers and their lenders can believe in Know that you are current on all taxes Know that operational details are not just in your head Know that your business can operate without you Know who you are, who you are like, and who your competition is Know your numbers Know that your team is ready Know that you can provide the roadmap to even greener pastures Know what's most important to you in the grand bargain

Six Tips for Avoiding M&A Failure_oct 2013 Hope is not a strategy Ensure cultural alignment Ask, What are we buying?, why are they selling? Ask, Whats the plan? Lock in leadership Trust your gut

The 3 Things Successful Deals Have in Common _ divestopedia sep 13 Build Trust Communication Negotiating Risk Transfer

The Top 11 Reasons a Buyer will Pay a Valuation Premium Reason # 1: Economies of scale Reason # 2: Economy of scope and cross-selling opportunities Reason # 3: Unlocking underutilized assets Reason # 4: Access to proprietary technology Reason # 5: Increased market power Reason # 6: Shoring up weaknesses in key business areas Reason # 7: Synergy Reason # 8: Geographical or other diversification Reason # 9: Provide an opportunistic work environment for key talent Reason # 10: To reach critical mass for an IPO or achieve post IPO full value Reason # 11: Vertical integration

We Can Do This Ourselves_Mike Rogers_5 dic 13

Managing M&A is tough, but its not rocket science. It just takes good execution. We know our business better than anybody. o Response: True enough, but how well do you know the targets business? This isnt the time to risk a flawed or slow execution. Some outside help, focused on targeted trouble spots, will increase your chances of getting the outcomes you want and avoid predictable pitfalls. This deal is already costing us a lot of money. We cant afford to add even another 1% to the cost of the deal. o Response: Dont lose sight of the big picture. Because deal value erodes rapidly, you may not realize the expected value of the transaction if you dont execute effectively and quickly. Youre losing way more value than whatever it would have cost for some help. This is really about accountability. If we dont run this ourselves, how will we own its success in the long term? o Response: Decisions definitely need to be made by you and your team. Help them take charge and own their decisions by giving them some leverage especially in due diligence, integration execution and transaction execution. We can save money doing it ourselves.

What to Look for in a Business Acquisition_ Forbes M&A sep 13 About the Seller o How was the business started? o Why is the business for sale? o Is the seller selling the entire entity or just the assets? o Is there a business plan in place? o What keeps the seller up at night? o If the seller is involved in the business: How much salary does the seller take? How much vacation? About the market o What is the size of the market and what market share does the acquisition target hold? o To what level can the business be grown? o What are the biggest challenges to growth? o Who are the industry leaders? Is the company considered a market leader? o Does the product or service have a life cycle, or seasonality? o What would your customers and competitors say this business does best? About the numbers o Sales by customer

o Revenues o Gross margin o Lease details o Earnings before interest, taxes, depreciation and amortization (EBITDA) o Capital investments o Accounts receivables o Accounts payable o Inventory About legal issues o Are contracts, agreements, copyrights and trademarks current? o Are products patented, if necessary? o What is the current status of any litigation? o Are there any possible law suits on the horizon? o If the business location is leased, what are the terms of the lease? o Is there proof all taxes have been paid? About the people o What employment agreements are in force? o Are any family members on the payroll? o Who are the key people, what do they do and why? o Which key employees are most likely to leave if there is a sale, and why? o How well documented are the business processes?

Lo que NO debes hacer si quieres vender tu empresa_Dic 13

Reconocer prematuramente como ingresos productos enviados a distribuidores con capacidad de devolucin que no es seguro si se vendern al cliente. Realizar transacciones bilaterales entre socios estratgicos. Reconocer como ingresos ordinarios lo que en realidad son ingresos extraordinarios. Facturacin a clientes falsos. Distribuir bienes a otros almacenes de la empresa que se facturan por error como ventas a clientes. Tratar como arrendamientos operativos lo que en realidad deben ser arrendamientos financieros, evitando su aparicin como deuda en el balance de la empresa. Separar actividades en prdidas a travs de SPVs (special purpose vehicles) y sostenerlas con garantas no reconocidas en el balance.