Elevation Insights ™ | Selection & Analysis of M&A Targets List

© Elevation Insights™ 2012-2014. All Rights Reserved.A Chirala Holdings™ Subsidiary & partner of Crescendus™ 1Mergers & AcquisitionsSelection & Analysis of M&A Targets List

© Elevation Insights™ 2012-2014. All Rights Reserved.A Chirala Holdings™ Subsidiary & partner of Crescendus™

TMElevation Insights™

© Elevation Insights™ 2012-2014. All Rights Reserved.A Chirala Holdings™ Subsidiary & partner of Crescendus™ 2

Declining Organic Sales: Exploring M&A

Organic sales are declining & I want the team to prepare an initial list of companiesthat can generate x revenue within y geographic markets that would complementour z product lines? Generate a preliminary list for our next group meeting (5-10power point slides max).CEO or CFO Initiated Scenario:


Internal Team Meeting (scheduled by Executives within your company)

Director, Product DevelopmentDirector, StrategyDirector, Business DevelopmentDirector, Corporate DevelopmentDirector, R&DFinancial Analyst (s)General Manager (e.g. Country Unit)

VP MarketingVP Sales & ServicesVP Product DevelopmentVP StrategyVP Business or Corporate DevelopmentVP R&DVP EngineeringVP ManufacturingFinancial Controller (s)Business Unit LeadersLegal CounselVP RegulatoryVP Human Resources

Services will be selectively solicited due tothe sensitive nature of the project.

The task requested by the CEO/CFO is highly strategic and will impact a wide range of business units &internal processes. As a result, collaboration & joint buy-in from senior management leaders will be keyfrom the early stage of project deliberations.Internal Team Involved (Core) Supporting Team Members


Tasks discussed within Internal Team Meetings (by Core Attendees)

• Selection Criteria• Companies with significant competitive advantages• Growth Rates higher than industry average• Companies that can fill our current portfolio gaps• Emerging Competitor/Disruptive Competitor• Regional/Country Specific Play• Ability to enter a new market quickly• Neutralize competitor threat• Quality of target senior management team & culture• Acquiring talent (e.g. specialized sales/services/R&D)• P&L & attractive financials• Due Diligence of Target Companies (numbers vary/industry)• Using above selection criteria• Establishment of Common Metrics for Analysis• Creating a single unified template document• Prioritizing Target Criteria (with attributes weighted)• Ranking of Targets/Attractive shortlist for discussions• Execution/Next Steps• Prepare presentation slides for CEO/CFO

Key Tasks


Information Needs required to complete your “Next Steps”

KeyInformationNeeds

• Build a single unified target assessment template document• Populate the template document with complex information pertaining to the various targetcompanies• Target information types includes:• Regulatory- Filings, Warnings, Penalties, Approvals• Sales Diagnostics- Key Customers, Key Customer Diagnostics & their growthprofile/challenges, Sales Force, Key Initiatives, Customer Lists• Marketing- Value Proposition, New product launches, strategy to supplement legacyproducts, Pricing strategies, business model innovation strategies, Go-To-Marketapproaches, Channels, Industry development, competitor news• Business Development- Recent deals & terms, licensing, contracts• Production & Supply Chain- Manufacturing locations, supply chain partners,disruptions, strikes, violations• R&D, Engineering, Innovation- New technologies, patent filings, partnerships, techtransfer lists, product roadmaps• Legal- Patents, Contracts, Regulatory Compliance information/country, Litigation•Finance- Financials, Cost Reduction News, Recent industry multiples, Benchmarks (ifavailable)•Human Resources- Key Personnel, Compensation


Execution Options: Internal “do-it-alone” Approach vs. External Help

Internal Approach

9-12 15-30

InformationTypes

PotentialTargets

Note- Actual figures can vary greatly, depending upon industry space.

X

Resource Strain• 10 plus senior management team members will needto spend extensive amounts of time, in addition toregular duties.• Real costs incurred.• Information gathering, analysis & reporting challengesadd additional pressures.External Help: Elevation Insights™Elevation Insights™ can generate the unified target template document and populate it with all therelevant information in a cost effective and timely manner, based on your company’s selection criteria.Alternatively, we can also suggest a list of industry targets based on our extensive knowledge of theindustry space and generate the target template document, populated with the relevant information.Once your team is comfortable with the target document, and based on your team’s input, ElevationInsights™ can also develop the final slide deck for your CEO/CFO.


Decision Time: Let your internal ROI guide you!

Time

•Internal Meetings•Initial strategy discussions•Setting up of internal program office & workstreams•Follow-up strategy discussions•Information gathering•Information review & analysis•Follow-up discussions•Data analysis & reporting•Series of follow-up discussions to reviewtarget data and analysis• Decision meeting to prioritize and developfinal presentation slides• Final slides review prior to CEO/CFOpresentation• Final touches to presentation• Internal Email Chains• Regular Duties Impact• Overtime to focus on regular duties• Productivity & potential revenue impact onexisting responsibilities• Stress on your current team•On-Going Maintenance• To keep target intelligence current &update data analysis & reporting

Cost

•Key Parameters• Total number of meetings• Total time spent on attendingmeetings and completing meeting tasks(incl. email time, presentation reports,target documents, information costs)• Total number of attendees/meetingalong with composition (e.g. VP,Director)• Calculate total cost based on total timeand fully loaded cost figures by variousattendees, for all the tasks involved incompleting the project.Use Fully Loaded Cost Figures:Manager level: $100-125/hourDirector level: $150-200/hourVP level: $250-350/hourNote:Placing a cost figure on all your internalactivities will highlight the true cost ofcompleting a task. This is often ignoredwithin internal company settings whiledealing with salaried employees.

Decision

Situation 1If your internal total costs andtimeline is acceptable to yourcompany, then it is prudent tocomplete the project internallywithout any external help. A keyassumption here is that yourcompany has all the right skill-setsto complete the project.Situation 2If the right skill-sets areunavailable within your companyor the timelines and total internalcosts are not acceptable, thenwe recommend seeking externalhelp.


If your company is currently facing some of the challenges mentioned in thispresentation, we encourage you to contact us.Telephone:1-(865)-332-0942Email:[email protected]:www.elevationinsights.com

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Elevation Insights ™ | Selection & Analysis of M&A Targets List

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