1. “Growing your business through acquisition” 325 East Paces Ferry Rd. Suite 1402 Atlanta, GA 30305 (404) 803-6959 www.inmanco.com

2. Organic Growth Defined as the normal growth you can expect from your business without regard to acquisitions, mergers, strategic alliances, joint ventures, etc. Varies from Industry to Industry Growth rate for most businesses has slowed as economy has slowed Exceptions are health care, government contractors, technology companies, etc. As a result of escalating cost of doing business, increased government regulation, etc. slow growth expected for 2010-2015.

3. Growth through Acquisitions Includes acquisitions, mergers, strategic alliances, joint ventures, etc. Presents opportunities to substantially exceed rate of organic growth for most businesses Numerous opportunities Attractive valuations Financing IS available

4. Why sellers sell Personal considerations Age and health No successors Risk tolerance Industry changes Estate Planning Business considerations Shareholder conflict Industry Changes Business cycle

5. Why Buy? To obtain access to: Talent and expertise Relationships, new markets, products, etc. Technology Other Eliminate Competition Opportunity to quickly create value add Resolve internal issues and conflicts

6. Typical Deal Timeline Preparation and planning – 30 days Identify targets – 30 days Contact targets, develop relationships- 30 days Pre LOI due diligence – 30 days Negotiate LOI- 10 days Due diligence – 30 days Legal documentation – 30 days Total timeline normally 180 days+/-

7. How to identify Targets Trade Shows Suppliers and Vendors Industry relationships Customers Investment Bankers, brokers, etc.

8. Valuation Considerations Comparable RECENT transactions Discounted cash flow Public values Undervalued assets Understated liabilities

9. Deal Components Cash ( few all cash deals being done) Bank financing (2-3 X EBITDA) Seller financing (1-3 x EBITDA) Earn outs (attractive in some businesses) Employment/consulting/non compete agreements (essential in ALL deals)

10. Key Business Ratios and Definitions used in acquisitions Operating Margin - REV/EBITDA Value/EBITDA Value/Revenues Debt/Equity Value/”Book” Value Working Capital - Current Assets less Current Liabilities Working Capital Ratio - CA/CL Return on Investment - Annual Income/Investment Debt Coverage - EBITDA/Debt Service Valuation Ratio - Enterprise Value/EBITDA

11. Basic Business Valuation Model(000’s) Earnings before interest, taxes, depreciation, amortization (EBITDA) 3 yr weighted avg. $2,000 Multiple X 4 “Enterprise Value” $8,000 Plus: Cash, equivalents, excess assets 2,000 Less: Long term debt ( 1,000) Business Fair Market Value $10,000

12. Maximizing EBITDA for acquired companies Focus on core competencies and high margin business Establish minimum returns on investment Benchmark against industry and peers (be careful) Short term vs. long term profits Re-negotiate terms on existing agreements (leases, etc.) Insist on measurability and accountability Demand accurate, timely, financial numbers Adopt incentive compensation plan(s) for key managers

13. Other suggestions for growing value INSIST on annual AUITED OR REVIEWED financials prepared by CPA Redeem minority shares. Resolve shareholder issues . Avoid litigation Pay down debt Avoid extravagant Company “perks” ( boats, hunting lodges, tickets, etc.) Lead through example. Become a TQM company. Use background checks on new customers and new employees. Know customer credit condition. Shop around (banks, suppliers, service providers, etc.) Relationships, relationships, relationships Eliminate employees not willing to play Create culture for growing shareholder value, profitability and team building Understand generational differences in employee motivation Encourage “out of the box thinking” Teach the difference between a sale and a profit Recognize that employees want to be recognized, want their ideas heard, want the business to be profitable, and want to share in that success

14. Why acquisitions fail Lack of planning Failure to understand seller’s business Ignoring the “people” issues Poor due diligence Over paying Poor integration

15. The Acquisition Team Management of buyer AND seller CFO – to crunch the numbers and identify redundancies CPA – to advise on tax, accounting issues Lenders – to finance a portion of sale Attorney – to prepare legal documentation Investment banker – to identify targets, negotiate the deal, close the transaction

16. William O. Inman, III inman@inmanco.com (404) 803-6959 or (904) 614-1438 A twenty year member of TEC/Vistage, Bill has served for thirty years as a trustedadvisor to hundreds of private companies throughout North America. His clients have included some of America’s most prominent family businesses. He has experience in the business products and service industries, healthcare and medical device, information systems, retail, wholesale, distribution, manufacturing, construction, food and beverages, logistics, and personal service industries. He has served as a speaker for numerous TEC, trade, academic and executive groups on the subjects of mergers, acquisitions, strategic and family business planning and growing shareholder value. Bill began his business career as a CPA and tax manager with a major accounting firm. He joined an investment banking firm in 1979 where he later became the majority partner and CEO. He formed The Inman Company in 1996 and from 2005-09 was a Partner in an international investment banking firm. He has been featured in the Atlanta Business Chronicle,the Florida Times Union, and the Jacksonville Business Journal. His articles have been published in Florida CEO. He is a thirty-year member of Rotary International and an eighteen-year member of Vistage, an international organization for CEOs. He has served as a Director of several companies and is a founder of Springboard Capital, an early-stage Private Equity Fund. Bill attended the Georgia Institute of Technology and received a BBA in Accounting from Georgia State University. He resides in Atlanta and Ponte Vedra, FL.

17. Recent Engagements Advised a $2 Billion Private Food Company in the acquisition of a strategic target. Advised a $15 Million Housewares firm in the acquisition of THREE strategic targets. Advised one of America's most prominent families in the sale of their $65 Million Logistics business to a NYSE company. Initiated the recapitalization of the nation's premiere frozen hamburger manufacturer in a $3 Million placement of private equity. Initiated a $6 Million private equity raise for a rapidly growing medical device company. Advised an early stage cardiac device/Telemedical service company in a $20 Million sale to a public company. Advised the shareholder of a $20 Million grinding tool machine manufacturer in a sale to a financial buyer. Advised a $70 Million dealer of logging equipment in a sale to a Private Equity Group. Advised a major NYSE US Food manufacturer in an acquisition of a Caribbean beverage Company. Consulted with an independent Pepsi-Cola Bottler on issues related to shareholder value and the development of an exit strategy. Advised a $10 Million provider of services to the pharmaceutical industry in a sale to a Private Equity Group. Advised an architectural firm in a sale to a strategic acquirer. Advised a $10 Million importer of stainless products used in the marine industry. Advised a $15 Million specialty retailer of high end sporting goods in a recapitalization. Advised a $5 Million information systems firm in development of an exit strategy. Advised a $20 Million software firm in the sale to a strategic buyer. Assisted a $50 Million family-owned construction company in an intra-family transfer of ownership.