Newest issues and challenges in the world of consolidation

1. Surviving And Thriving
In a Consolida+ng World
Presented by
Tom Marx
August 6, 2014

2. Tom Marx
• 30+ years in the a6ermarket
• 12+ years in M&A
• Segments, channels and products
• AcAve industry member
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4. Get Engaged!
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5. M&A Survival Summary
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M&A scenarios
What to expect
How to survive…and thrive

6. M&A Scenarios
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Sell Company
Divest a
Business Unit
Acquire Merge
Ownership
Events
The role of
Private Equity
(PE)

7. Sell or Divest
• Exit strategy: planned or not
• ReArement and no bullpen
• Accident, illness or worse
• Financial challenges
• Disagreements between partners or family members
• An approach to corporate restructuring
• Get rid of an underperforming asset
• Capitalize on beRer performing assets
• An offer that cannot be refused
• Freedom – It isn’t fun anymore!
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8. Acquire
Grow or fade away
• Strategic acquisiAons
– Territory
– Market share
– Economies of scale
– Gain new customers,
suppliers, management,
technology
– Take out the low
price leader
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A
A
A
B
B
B

9. Merge
Mergers are propelled by many of
the same reasons as acquisi+ons
• Shared ownership/equity rather than
straight buy-out
• Power and value of the enAAes allow
for controlled equity, joint power to
make decisions and sharing of
responsibiliAes
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A
B
C

10. Strengths or weaknesses
of the par+es defines if
merger or acquisi+on
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11. Ownership Events
Succession planning gone right
• Next generaAon moves into leadership
• Seamless
• All on the same page
• Plan successfully executed with minimum of drama
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12. Ownership Events
Succession planning gone wrong
• Current generaAon won’t let go
• Illness or unexpected death
• FricAon builds, frustraAon grows and finally outside therapy
comes to rescue
• Drama creates ri6s, slows growth, creates risk
• Plan isn’t executed
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13. Role of Private Equity
PE firms drive consolida+on
• Provide funds/experAse needed to grow the business
• Larger mulAples moAvate sale
• Support succession planning
• Buy out certain family members
• Some acquisiAons are 100% and some can be parAal cash-out
and as moAvaAon to stay
• The ulAmate exit strategy
• Result: You now are accountable to someone else
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14. You and The Change
Have you experienced these scenarios?
• Sell
• Acquire
• Merge
• Private equity
• Ownership event
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15. You and The Change
What to expect
• Survival
• OrganizaAonal consolidaAon and adjustments
• Your value to surviving enAty
• Leadership
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16. You and The Change
The inner sanctum
• What does this mean?
• How do I get there?
• How will I know?
• How do I react when surprises happen?
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17. You and The Change
Will I thrive?
• Stay posiAve
• Find ways to drive collaboraAon
• Show objecAvity
• Be focused
• Know when to hold ‘em and when to fold ‘em
• And through all this, get your day job done
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18. Your Company is Selling
• Be meAculous with preparing company for transiAon
• Keeping it quiet—the true meaning of an NDA
• Where do I go to release the tension?
• The ulAmate sign of maturity
• Do I jump ship?
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SINCERITY
TRUST

19. Your Company is Buying
• Devil is in the details
• IntegraAon spells success vs. failure
• Planning is important – execuAon is everything
• Build a diverse team
• Opportunity knocks
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20. You’re Selling/Merging
• CreaAng financial gain
• Efficiency is key
• Keeping different customers happy
• Opportunity knocks
• Do I jump ship?
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21. You’re Selling/Merging
• The foundaAon for successful M&A
• Make sure that the whole is more valuable than the sum of
the parts
• No room for duplicate expenses
• Expect many changes
• Keep focus on the metrics required by board,
bank or PE firm
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22. Always Be Your Best
• Team builder
• Accountable
• Decision maker
• Redesign or refine the company’s culture
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23. Manage Your People
• Retain the best people
• Keep your team informed
• Maintain/increase producAvity
• Handle issues before panic sets in
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24. Success is OUen Up to You
• Demonstrate leadership
• Listen to points of view
• Find soluAons
• No room for egos
• Build the team
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25. Shape the Future
• Grow the business
• Build the brand
• Clarify Value ProposiAon
• Focus on sales
• Target markeAng
• Streamline operaAons
• Understand the finances
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26. Q&A?
• Where are you in the process?
• What else are you curious about?
• What are you afraid about?
• What holds you back?
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27. THANK YOU!
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Visit our website for arAcles, resources and to sign up to our E-newsleRer
The Advantage.
www.marxgroupadvisors.com
Contact me if you would like a copy of this presentaAon or
further informaAon on buying or selling.
TOM MARX
415.453.0844 ext. 106
tmarx@marxgroupadvisors.com