1. H&K Strategic Business Solutions Selling Your Government Contractor Business Douglas Rodgers Special Briefing The McLean Hilton October 3, 2001

2. H&K Strategic Business Solutions Holland & Knight Consulting Strategic Business Solutions SBA 8(a):How Can You Monetize True Value? In a sale, buyer may not step-up the asset value in charging overhead costs to cost-reimbursable contracts. In a sale, if the seller retains the pension plan, the government will claim its "share" of the amount by which the plan is overfunded. If the plan is underfunded, the contractor can charge the government its share of underfunding. In a sale, SBA 8(a) contracts may not be transferred to a non-8(a) company. They must either be retained by the seller or sold separately to another 8(a) contractor (requires SBA and contracting officer consent).

3. H&K Strategic Business Solutions Holland & Knight Consulting Strategic Business Solutions Continuum of Transaction Types Subcontracting Shared resources and competencies (non-equity) Partial acquisition non-controlling (non-equity) <=50% Joint Ventures Partial acquisition controlling >50 % 100% Acquisition Increasing Degree of Integration Corporate Alliances Traditional M&A Collaborative ESOP or Strategic Third Party or MBO

4. H&K Strategic Business Solutions Holland & Knight Consulting Strategic Business Solutions Determine Your Objectives Timing Lifestyle Financial

5. H&K Strategic Business Solutions Holland & Knight Consulting Strategic Business Solutions Determine Your Objectives Timing –Preferences--Shareholders and Management. –When Market is Ripe. –Seek a Professional Opinion.

6. H&K Strategic Business Solutions Holland & Knight Consulting Strategic Business Solutions Determine Your Objectives Owner Lifestyle Post Transaction: –Long term full-time position. –Limited term full-time position. –Short term full-time position. –Limited involvement - board member or advisor. –No involvement - retire or move on.

7. H&K Strategic Business Solutions Holland & Knight Consulting Strategic Business Solutions Determine Your Objectives Financial –Maximize Potential Proceeds = Higher Risk. Earn out provisions. Retain minority interest. Equity/stock in acquirer or merged company. Cash and unsecured debt. –Minimize Risk. All Cash. Cash and cash equivalent. Cash and secured debt.

8. H&K Strategic Business Solutions Holland & Knight Consulting Strategic Business Solutions Execution Strategy Market the Company While Operating. Delegate Operating Role and Devote Time to Creating a Transaction. Hire a Financial Intermediary.

9. H&K Strategic Business Solutions Holland & Knight Consulting Strategic Business Solutions Steps for A Successful Transaction 1Study Company and Determine its Strengths and Weaknesses. 2Determine Objectives and Priorities. 3Agree on Expectations: –Range of Values. –Types of Transactions. 4Prepare Offering Memorandum.

10. H&K Strategic Business Solutions Holland & Knight Consulting Strategic Business Solutions Steps for A Successful Transaction 5Identify and Contact Transaction Candidates. 6Short List Prospects and Begin Dialogue. 7Negotiation and Due Diligence Phase. 8Closing Transaction.