Acquisitions - Process, Due Diligence and Fundraising 13 October 2011

Acquisition process Valuing acquisitions Due diligence Consideration issues Funding acquisitions Contents of Presentation

Acquisition Process Acquisition Strategy Scope target/s Valuing targets Negotiating heads of terms Due diligence Funding Acquisitions

Valuing Acquisitions Structure heads of terms with flexibility Value today vs Hope value What will the post acquisition value be? Cash dead vs deferred deal

Due Diligence Acquisition Strategy Important Scope work Financial Legal Commercial IP Roles and Responsibilities Conclusions will aide –Final purchase consideration –Warranties & indemnities

Due Diligence Issues to look out for are: –Company info –Title to assets –Systems and controls –Material contracts –HR –Property –Compliance –Litigation

Consideration defines Financing Consideration Structure –Is deferred structure appropriate? –Is the deal debt free / cash free? Target’s Balance Sheet –Are there asset is which can be leveraged? –What is the Normalised Working Capital ?

Financing Options – who is writing the cheque Free cash in your business Asset finance (invoice discounting, stock and P&M finance, property mortgage etc…) Cash flow finance (senior debt facility or overdraft) Equity finance (venture capital or offering own shares)

Conclusions Preparation Thorough due diligence Creative structuring

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