SurvivingAndThrivingInaConsolida+ngWorld

PresentedbyTomMarx

August6,2014

TomMarx

•  30+yearsinthea6ermarket•  12+yearsinM&A•  Segments,channelsandproducts•  AcAveindustrymember

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GetEngaged!

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M&ASurvivalSummary

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M&Ascenarios

Whattoexpect

Howtosurvive…andthrive

M&AScenarios

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SellCompanyDivesta

BusinessUnitAcquire Merge

OwnershipEvents

TheroleofPrivateEquity

(PE)

SellorDivest•  Exitstrategy:plannedornot•  ReArementandnobullpen•  Accident,illnessorworse•  Financialchallenges•  Disagreementsbetweenpartnersorfamilymembers•  Anapproachtocorporaterestructuring•  Getridofanunderperformingasset•  CapitalizeonbeRerperformingassets•  Anofferthatcannotberefused•  Freedom–Itisn’tfunanymore!

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AcquireGroworfadeaway•  StrategicacquisiAons–  Territory– Marketshare–  Economiesofscale–  Gainnewcustomers,suppliers,management,technology

–  Takeoutthelowpriceleader

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MergeMergersarepropelledbymanyofthesamereasonsasacquisi+ons•  Sharedownership/equityratherthan

straightbuy-out•  PowerandvalueoftheenAAesallow

forcontrolledequity,jointpowertomakedecisionsandsharingofresponsibiliAes

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B C

Strengthsorweaknessesofthepar+esdefinesifmergeroracquisi+on

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OwnershipEventsSuccessionplanninggoneright•  NextgeneraAonmovesintoleadership•  Seamless•  Allonthesamepage•  Plansuccessfullyexecutedwithminimumofdrama

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OwnershipEventsSuccessionplanninggonewrong•  CurrentgeneraAonwon’tletgo•  Illnessorunexpecteddeath•  FricAonbuilds,frustraAongrowsandfinallyoutsidetherapy

comestorescue•  Dramacreatesri6s,slowsgrowth,createsrisk•  Planisn’texecuted

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RoleofPrivateEquityPEfirmsdriveconsolida+on•  Providefunds/experAseneededtogrowthebusiness•  LargermulAplesmoAvatesale•  Supportsuccessionplanning•  Buyoutcertainfamilymembers•  SomeacquisiAonsare100%andsomecanbeparAalcash-out

andasmoAvaAontostay•  TheulAmateexitstrategy•  Result:Younowareaccountabletosomeoneelse

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YouandTheChangeHaveyouexperiencedthesescenarios?•  Sell•  Acquire•  Merge•  Privateequity•  Ownershipevent

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YouandTheChangeWhattoexpect•  Survival•  OrganizaAonalconsolidaAonandadjustments•  YourvaluetosurvivingenAty•  Leadership

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YouandTheChangeTheinnersanctum•  Whatdoesthismean?•  HowdoIgetthere?•  HowwillIknow?•  HowdoIreactwhensurpriseshappen?

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YouandTheChangeWillIthrive?•  StayposiAve•  FindwaystodrivecollaboraAon•  ShowobjecAvity•  Befocused•  Knowwhentohold‘emandwhentofold‘em•  Andthroughallthis,getyourdayjobdone

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YourCompanyisSelling•  BemeAculouswithpreparingcompanyfortransiAon•  Keepingitquiet—thetruemeaningofanNDA•  WheredoIgotoreleasethetension?•  TheulAmatesignofmaturity•  DoIjumpship?

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SINCERITY

TRUST

YourCompanyisBuying•  Devilisinthedetails•  IntegraAonspellssuccessvs.failure•  Planningisimportant–execuAoniseverything•  Buildadiverseteam•  Opportunityknocks

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You’reSelling/Merging•  CreaAngfinancialgain•  Efficiencyiskey•  Keepingdifferentcustomershappy•  Opportunityknocks•  DoIjumpship?

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You’reSelling/Merging•  ThefoundaAonforsuccessfulM&A•  Makesurethatthewholeismorevaluablethanthesumof

theparts•  Noroomforduplicateexpenses•  Expectmanychanges•  Keepfocusonthemetricsrequiredbyboard,

bankorPEfirm

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AlwaysBeYourBest•  Teambuilder•  Accountable•  Decisionmaker•  Redesignorrefinethecompany’sculture

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ManageYourPeople•  Retainthebestpeople•  Keepyourteaminformed•  Maintain/increaseproducAvity•  Handleissuesbeforepanicsetsin

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SuccessisOUenUptoYou•  Demonstrateleadership•  Listentopointsofview•  FindsoluAons•  Noroomforegos•  Buildtheteam

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ShapetheFuture•  Growthebusiness•  Buildthebrand•  ClarifyValueProposiAon•  Focusonsales•  TargetmarkeAng•  StreamlineoperaAons•  Understandthefinances

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Q&A?•  Whereareyouintheprocess?•  Whatelseareyoucuriousabout?•  Whatareyouafraidabout?•  Whatholdsyouback?

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THANKYOU!

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VisitourwebsiteforarAcles,resourcesandtosignuptoourE-newsleRerTheAdvantage.

www.marxgroupadvisors.com

ContactmeifyouwouldlikeacopyofthispresentaAonorfurtherinformaAononbuyingorselling.

TOMMARX415.453.0844ext.106

tmarx@marxgroupadvisors.com