selling your game company do’s and don’ts
DESCRIPTION
Selling Your Game Company Do’s and Don’ts. M&A specialists since 1985. We only work with:. Privately-held firms on the sell-side. Software and related tech companies. M&A specialists since 1985 – only software/related tech Only works on sell-side with privately held firms - PowerPoint PPT PresentationTRANSCRIPT
Selling Your Game Company
Do’s and Don’ts
2
M&A specialists since 1985.
We only work with:
Privately-held firms on the sell-side.Software and related tech companies.
3
Offices globally – 60% of transactions cross border
4
Optimal Outcome process
Team approach
Largest tech M&A educator
Largest database
Sold more software-related firms than anyone
5
ACHIEVING AN
OPTIMAL OUTCOME
6
What is an Optimal Outcome?
7
ValuationMaximization
88
Creating the best transactionstructure
9
Minimizingpersonal liability/risk
10
Reducing taxliability and holdbacks
11
Structuring idealemployment/non-competes
12
Providing forproper integration
13
1
8 Stages for anOptimal Outcome
IntegrationClosingDueDiligenceNegotiationDiscoveryContactResearchPreparation
14
1
Set tasks, timeline Allocate staff resources Conduct internal due diligence Compile business/marketing plan Ready financials/projections Ready presentation materials Begin collecting due diligence materials
Stage 1: Preparation
IntegrationClosingDueDiligenceNegotiationDiscoveryContactResearchPreparation
15
1
Stage 2: Research Prepare buyers list (A&B level, financial, non tech) Perform strategic analysis on each buyer Prepare preliminary valuation Determine proper contact (Execs, EA’s, advisors) Outside advisor/board/investor influencers Prepare position statement for each buyer
IntegrationClosingDueDiligenceNegotiationDiscoveryContactResearchPreparation
16
1
Stage 3: Contact Create introductory correspondence Draft/customize executive summary Execute NDAs and non-solicitations Screen initial interest, valuation expectations Establish log on all communications Refine position/process based on feedback
IntegrationClosingDueDiligenceNegotiationDiscoveryContactResearchPreparation
17
1
Stage 4: Discovery Coordinate conference calls, site visits, and meetings Establish technology review process Prepare formal valuation report Develop synergy and contribution analysis Set up NDA with customers, contractors, etc. Finish due diligence on buyer
IntegrationClosingDueDiligenceNegotiationDiscoveryContactResearchPreparation
18
1
Stage 5: Negotiation Organize and host final visits Provide structure & valuation guidance Create an auction environment Negotiate with top bidder(s) Sign Letter of Intent (L.O.I.) Inform other bidders of No Shop
IntegrationClosingDueDiligenceNegotiationDiscoveryContactResearchPreparation
19
1
Stage 6: Due Diligence Verification of financial statements/ projections Determine if outside advisors/opinions needed Establish confidential data room Technical/Legal/Ownership due diligence Written explanation of business model/methodologies Complete definitive agreement/ attachments
IntegrationClosingDueDiligenceNegotiationDiscoveryContactResearchPreparation
20
1
Stage 7: Closing Final reps & warranties Determine escrow hold-backs Final opinion(s) Sign contracts Arrange payment/distribution Regulatory filings Disclosure Schedules
IntegrationClosingDueDiligenceNegotiationDiscoveryContactResearchPreparation
21
1
Stage 8: Integration Advanced planning – during negotiation Determine synergies Best practices analysis Interim transition team Employee retention plan Set up monitoring/reporting
IntegrationClosingDueDiligenceNegotiationDiscoveryContactResearchPreparation
22
AVOIDING THE
DEAL DISASTERS
23
Workload, Value Destroyers, Deal Killers
Top 60 Documents and Projects
Top 5 Value Destroyers
Top 10 Deal Killers
This M&A process workload and pitfall analysis is based on data supplied by the World Technology Council (WTC), Corum’s 400-member advisory board of past sellers, industry experts, buyers and investors.
24
• Corporate Preparation• Business Plan• Marketing Plan• Org Chart• Staff Bios• NDA• Non Solicitation• Executive Summary• Introduction Letter• Financials (3 years)
• Recast Financials• Financial Package• 3 Year Projections• Pipeline Analysis• Lead Process• Pricing Analysis• Market Research• Competitive Research• Buyer Research• Ind. Buyer Strategy
Top 60 Documents & Projects (1-20)
Items in RED require professional skills, confidential M&A data, inside buyer knowledge, extensive transaction experience, or outside advisors
25
• Corporate Presentation• Comparable Transactions• Industry Comps• DCF Analysis• Replacement Cost• Terminal Value • Valuation Report• All Agreements• All Litigation – Threats • Shareholder Qualification
• HR Needs• Audit• Activity Log• Terms Sheet(s)• Synergy Analysis• Dilution Analysis• Tax Analysis• Taxable Assets• Negotiation• LOI
Top 60 Documents & Projects (21-40)
Items in RED require professional skills, confidential M&A data, inside buyer knowledge, extensive transaction experience, or outside advisors
26
• Stand Still Prep.• Outside Opinions• DD Checklist• DD Timeline• Merger Agreement• Asset Schedule• Fairness Opinion• Employ. Agreement• Non Competes• Patent Analysis
• Customer Overview• Client Sign-off• Bulk Sale• Sovereign Approval• Proxies• Security Agreements• Registration• Shareholder Exp. Distr.• Announcements• Integration Process
Top 60 Documents & Projects (41-60)
Items in RED require professional skills, confidential M&A data, inside buyer knowledge, extensive transaction experience, or outside advisors
27
1. Confidentiality—internal/external
2. Theft of technology
3. Loss of staff (non-solicitation)
4. Wear on CEO/management
5. Business drop-off—lack of focus
6. Going to market too late
Top 6 Value Destroyers
28
Top 10 Deal Killers
1. Dealing with only one buyer
2. Misalignment: shareholders/empl/mgmt
3. Contact at the wrong level
4. Improper research of potential buyers
5. Misunderstanding buyer process/models
29
Top 10 Deal Killers
6. Inability to portray value properly
7. Improper due diligence preparation
8. Not qualifying buyers properly
9. Not orchestrating all buyers properly
10.Ego – Greed – Arrogance
30
THE MOST IMPORTANT TRANSACTION OF YOUR LIFE
CLOSING THOUGHTS
31
What percentage of self-managed M&A transactions fail?80%
Source: Corum Group Research
You need a professional process to improve your odds
32
This seller is serious.
Leverage using a Professional Intermediary
I may not be the only
bidder.
Potential AcquirerSeller Intermediary
Wonderful if I buy you, terrible if I
don’t.
33
What is the average improvement from first offer to LOI (Letter of
Intent) with a professional M&A process (i.e., creating an auction environment)?48%
Source: Corum Group Research
34
Contact Information
Visit our website at: www.corumgroup.com
Corum Group Ltd.
19805 North Creek ParkwaySuite 300Bothell, WA 98011USA+1 425-455-8281
Corum Group InternationalS.à.r.l.
Buechenstr. 98185 WinkelSwitzerland+41 43 888 7590