1. FBA National Conference Darwin 2009 The Dyson Group Growth By Acquisition – Lessons Learnt Annie Stevens - CFOEd Paton - PartnerMichael Sewards - Director

2. Dyson’s Acquisition Story

3. today: 1.A short walk through Dyson’s acquisition history 2.An open communication strategy 3.Making Due Diligence work 4.Get to know what you are buying 5.Important issues affecting price 6.Transition Annie Stevens

4. 1. A short walk through Dyson’s acquisition history… Historically very informal approach - much by instinct - but using solid industry knowledge and experience Recent years a more structured approach - use of planning, process and procedural tools - some examples… Target List: who, when, why, size Project Plan: team, responsibilities, tasks, when by DD Plan: more about that later Annie Stevens

5. …some context Early 90’s → Turnover approx $15M → Buses = 70 In 2009 (incl JV’s) → Turnover $115M → Buses = 480 → Employees = 950 In 2009 (Dyson’s main trading entity) → Turnover $86M → Buses = 380 → Employees = 725 Annie Stevens

6. …some context Annie Stevens

7. …new phase Annie Stevens

8. 2. An open communication strategy Keeping communication channels open between buyer and seller Establishing one-on-one relationship with key player from vendor side Building collaboration with advisors (if they are involved) Building relationships between buyer and seller teams (internal staff and external advisors or family) Being willing to listen and learn Keep key decision makers informed along the way e.g. Family Council This strategy sets up a good basis for transition if the sale is successful Annie Stevens

9. 3. Due Diligence Imperative - a non-negotiable really Build in this process early on and be comprehensive - potentially can start straight away (e.g. a Purchase by Tender) - needs to cover Financial, Marketing, Operational & People Have realistic time frames Be transparent Document formally….. …. but integrate informal and collaborative approaches to get the job done effectively Annie Stevens

10. 4. Get to know what you are buying Are you buying the business (assets) or the company? Finding out exactly what you are getting and what you are not getting in the potential sale… …sounds fundamental but it affects price, terms, transition and integration Repercussions if you don’t!! Annie Stevens

11. 5. Important issues affecting price Valuation approach and getting it right (or at least close!!) Having the most accurate estimate of a company’s true worth gives a solid base to work from, before entering negotiations “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” - Warren Buffett Annie Stevens

12. 5. Important issues affecting price… Have market knowledge about price trends, multiples - but trends are not a benchmark!! Tax v. accounting issues - personal assets/shareholder loans Vendor expectations - too far along and maybe too far to back-peddle on important issues Discounts and whether they may/may not be relevant or be an expectation Communicate your ability to complete the deal Have your ‘walk-away’ price Annie Stevens

13. 6. Transition An acquisition is not complete on settlement day!  People side is critical  Face-to-face approach  Read & understand their culture; helps with integration approach  Identify the non-negotiables v. the not-so-criticals  Identify the culture symbols that will assist integration Annie Stevens

14. 6. Transition (cont.)  Needs to be planned and communicated early and be two-way  Needs to be formal plan for pre and post acquisition  Aim for the process to be based on building trust and openness  Walk in as you will operate  Review and debrief after the dust has settled – how did we do & what does the future look like now A successful integration adds to the bottom line Annie Stevens

15. To sum up… The themes that have worked for Dyson’s during their acquisition journeys have included:  Open communication  Increased rigour with processes such as Due Diligence  Understanding of critical external factors  Staying close to the action  Giving people issues top priority  On-going review of performance Annie Stevens

16. Questions………. Ed Paton - PartnerMichael Sewards - Director Annie Stevens - CFO