Sprin

g &

sum

mer 2

015

1

Manufactu

red in

Mis

sis

sip

pi

2

www.manufacturedinmississippi.com

Letter from the Editor

Manufacturing is a core industry in Mississippi. Our manufacturers benefit from legislative and public support, as well as from the Mississippi Manufacturer’s Association, whose mission is to support all Mississippi manufacturers.

Manufactured in Mississippi magazine is the first privately held Mississippi publication of its kind. Each edition focuses on important industry issues and topics, including state and national legislation, special interest pieces, and business profiles.

Every issue is directly distributed to key elected officials, legislators, business leaders, industry leaders, and members of the Mississippi Manufacturer’s Association.

If you have an important topic that you would like to see on the pages, or are interested in how you can have your company represented in the magazine, please contact our editorial or advertising staff.

We trust you will find Manufactured in Mississippi an important read.

– Bryan CarterEditor-in-Chief

01issue:

PublisherP2 Publishers

Editor-in-ChiefBryan Carter

Contributing EditorMatthew Jackson

Visual DesignSweta Desai, Chance Shelton

PhotographySweta Desai, Chance Shelton, Bryan Carter

Advertising DirectorFran Nause Riddell

Manufactured in Mississippi is published by P2 Publishers. Reproduction of Manufactured in Mississippi magazine, in whole or in part, is strictly prohibited without written permission. We do not accept responsibility for any unsolicited materials and may not return them. All information in this magazine is taken from sources considered authoritative, but P2 Publishers cannot guarantee their accuracy. Inclusion of editorials, im-ages, advertisements, or other materials in this magazine does does not constitute an endorsement for products or services by the publisher.

Sprin

g &

sum

mer 2

015

3

422614

Higher StandardsCalibrating Critical Equipment and Empowering Lives

Sanderson FarmsA Legacy of Leadership

Preparing for Financial Due Diligence as a Business SellerAssisting the buyer by preparing for due diligence can help ensure a smooth, rewarding sale of your business.

Making the MoldFrom prototype to production — United Plastic Molders spans three generations of turning concepts into real products.

Mississippi Development AuthoritySupporting the Growing Business Community of Mississippi

The New Markets Tax Credit Program (NMTC)How Manufacturers Can Subsidize Project Costs up to 25% in Mississippi

Big Data is a Big Deal to Mississippi ManufacturersSome manufacturers are slowly coming around to the concept of Big Data and how it drives business. The adoption of Big Data best practices is already in place in other industries. Common adoption in manufacturing companies is inevitable as a way to solve business problems and effectively compete within their industry.

Mississippi’s Steward for Business on ManufacturingGovernor Phil Bryant Champions the Business of Manufacturing in Mississippi

Google Says It Is Time to Go Mobile Friendly, or Be PenalizedWill Your Website Lose Half Its Audience?

The 2015 Mississippi State Legislative SessionAt the beginning of April, the Mississippi State Legislature adjourned sine die for the 2015 legislative session. It was an interesting session that saw a lot of legislation die due to party politics and the general feeling of not wanting to pass any controversial legislation in an elec-tion year. In the end, though, there were still plenty of successes for Mississippi’s manufactur-ers, as well as the overall business community.

Leadership is Big BusinessJay Moon’s leadership model is built on a foundation of over 25 years in economic development.

08

42

50

58

64

76

70

Content

14

22

26

34

PLEASE SEND ALL INQUIRIES TO: MANUFACTURED IN MISSISSIPPI, 655 LAKE HARBOUR DRIVE, STE 100, RIDGELAND, MS 39157 OR

CALL: 601-707-8350 WITH ANY QUESTIONS OR COMMMENTS. VISIT US ONLINE AT WWW.MANUFACTUREDINMISSISSIPPI.COM

OR EMAIL US AT INFO@MANUFACTUREDINMISSISSIPPI.COM OR ADVERTISING@MANUFACTUREDINMISSISSIPPI.COM

COPYRIGHT © 2015 P2 PUBLISHERS.

EXPERTARTICLE

EXPERTARTICLE

EXPERTARTICLE

EXPERTARTICLE

Manufactu

red in

Mis

sis

sip

pi

22

For many business owners, the dread-ed words “due diligence” send tingles up their spines. But if you survived the economic downturn and are consider-ing selling your business in this more positive economic environment, you can make the due diligence process go much more smoothly by starting now and organizing the information that a potential buyer will want to review.

Due DiligenceDue diligence is merely the process

used by the buyer to request from the seller any documents and materials needed to verify that all representations made by the seller regarding the busi-ness are true. The process usually oc-curs after the signing of a purchase and sale agreement. However, some due diligence may occur before the sign-

ing of the contract in order to assist the buyer in determining a price to offer for the business.

In the past, due diligence may have been more of a perfunctory inquiry be-cause the size of markets and the value of businesses were increasing rapidly. But today’s buyers have survived the downturn and carefully built up their cash reserves. The new buyer is focused on identifying and eliminating risks,

Sprin

g &

sum

mer 2

015

23

and on conducting a realistic analysis of available cash flow and profits immediately following the closing.

Final Due DiligenceFinancial due diligence is one of the most common reasons

a sale falls apart, particularly for closely-held businesses whose owners have focused on growing and building the business and not on record keeping. With good financial records, a prospective buyer can readily verify earnings, key customers and suppliers, quality and age of assets, taxes, key employees, accounts payable, accounts receivable, inventory, and liabilities that will need to be assumed by the seller. Additionally, good financial records from the seller will assist the buyer in obtain-ing financing and can shorten the period to closing.

Gather Your InformationA sophisticated buyer will want to review at least the fol-

lowing financial information:

• Income statements• Balance sheet• Asset list• Depreciation schedule• Tax returns• Accounts receivable and accounts payable reports• List of liabilities

Many businesses lack current asset lists and depreciation schedules, making determination of book value more difficult. As a hopeful seller, it is important to take the time to review your asset list and depreciation schedule regularly, and to re-move all equipment and other property that you no longer own. Your accountant can assist you in making these kinds of adjustments. In addition, you should review your inventory list; remove all outdated, expired and/or unsellable items and move these items to a liquidator. Accurate asset and inventory lists can greatly shorten the time involved in due diligence.

Tax DataTax returns and income statements will be key to establish-

ing the value of your business. The buyer will likely want to analyze earning trends, various financial ratios, and working capital requirements, and will want to review profit and loss statements and tax returns for the past 5 years, along with accounts receivable and accounts payable. Meet with your accountant now to confirm that no adjustments need to be made for old and uncollectible accounts receivable and that all accounts payable are accurate, and prepare a list of business debts with copies of all related documents.

Other AssetsAlthough financial due diligence plays a significant role in

assessing a business’s value and risks, a buyer will also want to assess other risks. Buyers are increasingly concerned with intellectual property issues – such as whether the seller has the exclusive right to use all key trade names and has obtained trademark protection for such use. Licenses for software use also are becoming increasingly important.

Key Contracts and AgreementsIn addition, a buyer will want to review all key contracts

and leases. Make sure you have copies of all key contracts and leases and that renewals and extensions are in place. If the buyer will be asked to assume these contracts and leases, the buyer will want to verify with the contractor and the lessor that the agreements are in effect and that there are no unpaid sums due or other defaults thereunder.

Real Estate AssetsIf your business owns real estate and the sale or lease of

said real estate will be part of the transaction, then assemble all deeds, title insurance policies, surveys, appraisals, and en-vironmental reports. Having all of these from the start can greatly expedite the due diligence process. Most of these items should have been obtained in connection with any bank financing of any real property, and you may need to request copies of these documents from your bank. If the business has owned the real estate for a long period and has not undergone any recent financing, it is a good idea to obtain a current title search on the property, so that there is time to correct any is-sues before the buyer enters the picture.

Unexpected RisksMany sellers find it difficult to understand that buyers are

more worried about risks they do not know about or that they are unable to obtain full information about, than the problems that they do have full knowledge about. If the buyer can un-derstand the scope of the risk, he can quantify it. Whether the risk involves potential or pending litigation, an environmental or other permitting issue, or an employee matter, there are many ways a buyer can obtain protection from these risks, and continue with the transaction if full disclosure is made.

Be straight-forward with your buyer. Providing the infor-mation that you have as quickly as possible and in an orga-nized fashion will help a buyer quickly assess the risks in-volved in an unexpected issue. In addition, discuss any known risks with your advisors now so that a plan to address existing risks can be developed early and provided in anticipation of the buyer’s request.

The Value of Being PreparedTo obtain the highest value for your business and to facili-

tate a smooth sale, prepare for the due diligence process prior to entering into the sale process. Do not underestimate the need to assemble your information and your team of compe-tent professionals to help you review the information prior to communicating with potential buyers. The process may be cumbersome and time consuming, but for those who plan early, there can be significant rewards at the end.

Jamie Planck Martin is Senior Counsel at Taggart, Rimes & Gra-ham, PLLC in Ridgeland, Mississippi, and has been advising cli-ents in the purchase and sale of businesses for over 25 years.www.trglawyers.comjamie@trglawyers.com