1. Mergers & Acquisitions How to buy a company – step by step (incl. MIZ services)

2. 28.08.20152 Motives From the seller‘s POV: –Focusing upon core competences –Outsourcing of divisions –Synergic effects –Covering capital requirements –A desired re-orientation –No succession plan –Advanced age –Impaired health

3. 28.08.20153 Motives From the buyer’s POV: –Synergic effects –Development of new markets –Acquisition of know-how –Acquisition of human capital –A wider range of products/services –Capital investment –MBO –Taking over competitors

4. 28.08.20154 Variants Share deal –Acquisition of shares Asset deal –Assignment of assets Properties and buildings Regular customers, machines, stocks of merchandise etc.

5. 28.08.20155 Stages (seller‘s) (1)Partner‘s/owner‘s decision to sell (2)Authorisation of consultants (3)Consultants run a performance analysis; what asking price? (4)Looking for a suitable buyer via brokers, networks, media, successor exchanges (e.g. www.nexxt.org) (5)Buyer and seller enter into a non-disclosure agreement (6)Exploratory talks (7)Letter of intent (8)Due diligence (9)Contract negotiations (10)Closing of the contract of sale (11)Handover to buyer (12)Perhaps closing of a consultancy contract

6. 28.08.20156 Stages (buyer‘s) (1)Commissioning a transaction consultant -Asking price appropriate? -Offer sincere? -A brief analysis of the company -Checking financing options: Equity vs. outside financing -Consulting banks re financing -Time expenditure: 2 days -Costs: ca. €2,000* *Costs depend upon consultant‘s qualification. Our hourly rates: CPA / tax consultant: 275 €/h Lawyer / tax consultant: 220 €/h Tax consultant / partner: 200 €/h Tax consultant: 140 €/h Qualified staff: 100 €/h

7. 28.08.20157 Stages (buyer's) (2)Starting negotiations -Drafting a letter of intent -A “soft” LOI: -Non-committal -General phrasing -Time expenditure: 1 day at max: -Costs: ca. €1,800

8. 28.08.20158 Stages (buyer's) (2)Starting negotiations -A “hard” LOI: -Specific agreements -Legally binding declarations -Reference to integral parts of the contract -Non-disclosure obligation -Time expenditure: 2 days -Costs: ca. €3,500

9. 28.08.20159 Stages (buyer's) (3)Due diligence -Legal, business and technical analysis of the company prior to the closing of the contract of sale -The buyer‘s detailed consideration -Data room -Time expenditure: dependent upon the company’s size and structure, 5 – 10 days -Costs: ca. €10,000 – 20,000

10. 28.08.201510 Stages (buyer's) (4)Form of contract -Drafting the contract of sale -Buyer/seller coordination -Cooperation with an experienced lawyer: a specialist in commercial and company law -Time expenditure and costs: dependent upon the company‘s size and structure and the resultant complexity of the contract of sale (ca. €10,000 - 30,000)

11. 28.08.201511 Stages (buyer's) (5)Signing -Suggesting a notary for the notary act -Accompanying the closing of the contract (6)Closing -Monitoring the implementation of the purchase -Payment -Appointment of the new management -Dismissal of the former management -Delegation of authorities

12. 28.08.201512 Stages (buyer's) Financing –Asking for offers –Negotiation of the terms –What leverage? Financing negotiations with banks are concurrent with the other steps

13. 28.08.201513 Why can buying a company fail? No clear acquisition target Companies are too disparate (in terms of their culture) Too high a price Synergic effects overestimated Costs underestimated Acquired company‘s potential misjudged Market pattern misjudged Wrong implementation

14. 28.08.201514 Why consultants? Buying or selling a company is not part of one’s day- to-day business Speed Expertise Experience gained in many a project A discreet outreach possible Coordination of involved specialists A realistic purchase price

15. 28.08.201515 Why MIZ? An extensive network –Banks –Lawyers –Notaries Experience in processing M&As Consultancy/support out of one hand –Buying the company –Accounting consultancy –Tax consultancy

16. 28.08.201516 Other MIZ services Ongoing tax consultancy Accounting consultancy Auditing Work in advisory councils Assumption of directorships Representation of partners vis-a-vis other partners

17. 28.08.201517 Contact MIZ GmbH Steuerberatungsgesellschaft WIR TEUHAND GmbH Wirtschaftsprüfungsgesellschaft Im Teelbruch 55 45219 Essen Tel.: 02054 / 928 – 01 Fax: 02054 / 928 – 100 essen@miz.de Grunerstraße 133 40239 Düsseldorf Tel.: 0211 / 5381 93 - 0 Fax: 0211 / 5381 93 - 99 duesseldorf@miz.de Röntgenring 3-5 40878 Ratingen Tel.: 02102 / 9929 – 0 Fax: 02102 / 9929 – 31 ratingen@miz.de Kirchhellener Straße 269 46145 Oberhausen Tel.: 0208 / 64844 – 0 Fax: 0208 / 64844 – 48 oberhausen@miz.de www.miz.de