Selling Your Game Company Do’s and Don’ts

2  M&A specialists since 1985 – only software/related tech  Only works on sell-side with privately held firms  Offices globally – 60% of transactions cross border  Developed the “Optimal Outcome” M&A process  Employs a team approach (5) to offloads clients  Senior negotiators are former CEOs – selling/results oriented  Largest educator in the world – helps build buyer relations  Largest proprietary buyer database – provides client advantage M&A specialists since We only work with: Privately-held firms on the sell-side. Software and related tech companies.

3  M&A specialists since 1985 – only software/related tech  Only works on sell-side with privately held firms  Offices globally – 60% of transactions cross border  Developed the “Optimal Outcome” M&A process  Employs a team approach (5) to offloads clients  Senior negotiators are former CEOs – selling/results oriented  Largest educator in the world – helps build buyer relations  Largest proprietary buyer database – provides client advantage Offices globally – 60% of transactions cross border

4 Optimal Outcome process Team approach Largest tech M&A educator Largest database Sold more software-related firms than anyone

5 ACHIEVING AN OPTIMAL OUTCOME

6 What is an Optimal Outcome?

7 Valuation Maximization

8 8 Creating the best transaction structure

9 Minimizing personal liability/risk

10 Reducing tax liability and holdbacks

11 Structuring ideal employment/non-competes

12 Providing for proper integration

Stages for an Optimal Outcome

 Set tasks, timeline  Allocate staff resources  Conduct internal due diligence  Compile business/marketing plan  Ready financials/projections  Ready presentation materials  Begin collecting due diligence materials Stage 1: Preparation

Stage 2: Research  Prepare buyers list (A&B level, financial, non tech)  Perform strategic analysis on each buyer  Prepare preliminary valuation  Determine proper contact (Execs, EA’s, advisors)  Outside advisor/board/investor influencers  Prepare position statement for each buyer

Stage 3: Contact  Create introductory correspondence  Draft/customize executive summary  Execute NDAs and non-solicitations  Screen initial interest, valuation expectations  Establish log on all communications  Refine position/process based on feedback

Stage 4: Discovery  Coordinate conference calls, site visits, and meetings  Establish technology review process  Prepare formal valuation report  Develop synergy and contribution analysis  Set up NDA with customers, contractors, etc.  Finish due diligence on buyer

Stage 5: Negotiation  Organize and host final visits  Provide structure & valuation guidance  Create an auction environment  Negotiate with top bidder(s)  Sign Letter of Intent (L.O.I.)  Inform other bidders of No Shop

Stage 6: Due Diligence  Verification of financial statements/ projections  Determine if outside advisors/opinions needed  Establish confidential data room  Technical/Legal/Ownership due diligence  Written explanation of business model/methodologies  Complete definitive agreement/ attachments

Stage 7: Closing  Final reps & warranties  Determine escrow hold-backs  Final opinion(s)  Sign contracts  Arrange payment/distribution  Regulatory filings  Disclosure Schedules

Stage 8: Integration  Advanced planning – during negotiation  Determine synergies  Best practices analysis  Interim transition team  Employee retention plan  Set up monitoring/reporting

22 AVOIDING THE DEAL DISASTERS

23 Workload, Value Destroyers, Deal Killers Top 60 Documents and Projects Top 5 Value Destroyers Top 10 Deal Killers This M&A process workload and pitfall analysis is based on data supplied by the World Technology Council (WTC), Corum’s 400-member advisory board of past sellers, industry experts, buyers and investors.

24 Corporate Preparation Business Plan Marketing Plan Org Chart Staff Bios NDA Non Solicitation Executive Summary Introduction Letter Financials (3 years) Recast Financials Financial Package 3 Year Projections Pipeline Analysis Lead Process Pricing Analysis Market Research Competitive Research Buyer Research Ind. Buyer Strategy Top 60 Documents & Projects (1-20) Items in RED require professional skills, confidential M&A data, inside buyer knowledge, extensive transaction experience, or outside advisors

25 Corporate Presentation Comparable Transactions Industry Comps DCF Analysis Replacement Cost Terminal Value Valuation Report All Agreements All Litigation – Threats Shareholder Qualification HR Needs Audit Activity Log Terms Sheet(s) Synergy Analysis Dilution Analysis Tax Analysis Taxable Assets Negotiation LOI Top 60 Documents & Projects (21-40) Items in RED require professional skills, confidential M&A data, inside buyer knowledge, extensive transaction experience, or outside advisors

26 Stand Still Prep. Outside Opinions DD Checklist DD Timeline Merger Agreement Asset Schedule Fairness Opinion Employ. Agreement Non Competes Patent Analysis Customer Overview Client Sign-off Bulk Sale Sovereign Approval Proxies Security Agreements Registration Shareholder Exp. Distr. Announcements Integration Process Top 60 Documents & Projects (41-60) Items in RED require professional skills, confidential M&A data, inside buyer knowledge, extensive transaction experience, or outside advisors

27 1.Confidentiality—internal/external 2.Theft of technology 3.Loss of staff (non-solicitation) 4.Wear on CEO/management 5.Business drop-off—lack of focus 6.Going to market too late Top 6 Value Destroyers

28 Top 10 Deal Killers 1.Dealing with only one buyer 2.Misalignment: shareholders/empl/mgmt 3.Contact at the wrong level 4.Improper research of potential buyers 5.Misunderstanding buyer process/models

29 Top 10 Deal Killers 6.Inability to portray value properly 7.Improper due diligence preparation 8.Not qualifying buyers properly 9.Not orchestrating all buyers properly 10.Ego – Greed – Arrogance

30 THE MOST IMPORTANT TRANSACTION OF YOUR LIFE CLOSING THOUGHTS

31 What percentage of self-managed M&A transactions fail? 80% Source: Corum Group Research You need a professional process to improve your odds

32 This seller is serious. Leverage using a Professional Intermediary I may not be the only bidder. PotentialAcquirer Seller Intermediary Wonderful if I buy you, terrible if I don’t.

33 What is the average improvement from first offer to LOI (Letter of Intent) with a professional M&A process (i.e., creating an auction environment)? 48% Source: Corum Group Research

34 Contact Information Visit our website at: Corum Group Ltd North Creek Parkway Suite 300 Bothell, WA USA Corum Group International S.à.r.l. Buechenstr Winkel Switzerland