Shareholder Value Stewart Millington Business Mentor

Acquisition & Sale – The Process Is your company ready for sale? What influences the price? Where does acquisition fit in the strategy & am I ready to make an acquisition? The targeting process

Is your company ready for sale? Where does acquisition fit in the strategy? Two Key Questions

The Role of the Managing Director Company Foundation The Profit Engine Management Strategy

The Role of the Managing Director Company Foundation The Profit Engine Management Strategy

The Role of the Managing Director Company Foundation The Profit Engine Management Strategy

The Role of the Managing Director Company Foundation The Profit Engine Management Strategy Company Strategy

Time – the Hidden Cost Buying or selling a company takes up a huge amount of time. It is a highly skilled role that only the MD or Senior Director can undertake. While undergoing this process, it is imperative that you keep delivering the financial numbers.

What Influences the Price?

What Influences the Multiple?

Multiple Influencers Company

Multiple Influencers TRUEGROWTHTRUEGROWTH TRUEGROWTHTRUEGROWTH Company

TRUEGROWTHTRUEGROWTH TRUEGROWTHTRUEGROWTH Company Risk Multiple Influencers

TRUEGROWTHTRUEGROWTH TRUEGROWTHTRUEGROWTH Company Multiple Multiple Influencers Risk

True Growth - Equity Valuation Drivers Benchmarked performance against competition Turnover Growth Profit Ratios

Equity Valuation Drivers Income – The Client Base The Four Areas of Management Brand Name Company Strategy Company Positioning Brand Name Strategic Track Record The Four Areas of Management Multiple

Equity Valuation Drivers Income – The Client Base The Four Areas of Management Brand Name Company Strategy Company Positioning Brand Name Strategic Track Record The Four Areas of Management Multiple

Equity Valuation Drivers Income – The Client Base The Four Areas of Management Brand Name Company Strategy Company Positioning Brand Name Strategic Track Record The Four Areas of Management Multiple

Equity Valuation Drivers Income – The Client Base The Four Areas of Management Brand Name Company Strategy Company Positioning Brand Name Strategic Track Record The Four Areas of Management Multiple

Equity Valuation Drivers Income – The Client Base The Four Areas of Management Brand Name Company Strategy Company Positioning Brand Name Strategic Track Record The Four Areas of Management Multiple

The Targeting Process What is your acquisition strategy? What are you looking to acquire and why? Why should they sell to you? How are you going to convince them to sell if they are not for sale? How are you going to leverage the acquisition? Cost savings alone are not enough. Truly successful acquisitions always have the “additionality” factor

Targeting Criteria The Management of Risk 1.Market 2.Company

Targeting Criteria –Market Sector Market size Market growth Profitability/margin potential Strength of competition Strategic fit with your own company Weight each criteria and score all sectors

Target Map Market Segments Market Segments  Geographical area Product/Service Sectors

Targeting Process Geographical Area Market Segment %ABCD Product/Service Sectors Product/service Product/service Product/service

Targeting Criteria – The Company Benchmarked financial performance vs competition The quality of the income stream and clients The strength of the management team and systems Brand name and reputation Strategic track record and pipeline Size of target/fit with your company CULTURAL FIT

Think Long, Think Hard & then be bold If in doubt – DON’T. Better to walk away and write of the time and money spent rather than to proceed.

Key to Success Be prepared Invest time Be strategic Seek advice