Meridian Capital, LLC私募股权募集说明书课件

1、Private Equity Tools for Business Retention and ExpansionJune 13th, 2012John ODore, Managing DirectorMeridian Capital, LLCFamily Owned Businesses OverviewWhat is Private Equity?What is the role of an Investment Banker?Examples of Private Equity Transactions in Washington StatePresentation OverviewFa

2、mily Owned Businesses OverviewWhat is Private Equity?What is the role of an Investment Banker?Examples of Private Equity Transactions in Washington StatePresentation OverviewWhats happening out there? Substantial number of retirement age business owners:Baby boomers own over 9 million companies in t

3、he US, including over 80% of middle-market companies representing approximately $5 trillion in assets Significant number of business owners will be faced with crucial business transition decisions over the next 10 years Several macro trends are driving strong M&A and business transition activity

4、:oScheduled Capital Gains increase from 15% to 23.8% oAcquisitive corporate and PE buyers due to strong cash positionsoImproved revenue and earnings visibility coming out of the recession Many business owners defer decision making until its too late, leading to suboptimal transaction outcomesCharact

5、eristicSmall Market Lower-Middle MarketMiddle Market and UpRevenue Size$10 million$10 - $100 million$100 million - $1 billionEBITDA Size$1 million$1 million - $15 million$15 million - $50 millionOwnership ProfileOwner-managedOwner-managed, professionally managedProfessionally managedOwner or Manager

6、 Capital MotivesTo manage cash in business, not balance sheetTo manage the business, not the balance sheetTo manage net assets on the balance sheetOwnership GoalLifestyleLifestyle entity wealth creationEntity wealth creationSystem, Process SophisticationEntry level, held with select employeesAdequat

7、e to strong system capabilities and proceduresSophisticated, institutionalizedCapital AccessDebtBusiness bankingCommercial bankingCorporate bankingEquityPersonal/familyPersonal/private equityPrivate equityOutside Investment InterestMildStrongStrongWhat is Lower-Middle Market?Does this look familiar?

8、Sell to EmployeeGrow byacquisitionSell for healthreasonsSell to Mgmt.Wait untilI dieSell to acompetitorSell toPrivate EquityDefer alldecisionsLet my kidsrun itWhat are Business Transition Options? OptionDescriptionTypical Retained OwnershipBuyer PoolsSell or DivestureSale of the business to a strate

9、gic or Private Equity Fund buyer0% 15%Strategic Acquirers, Private Equity Firms, Family Offices, Diversified Holding CompaniesRecapitalization Transfer minority or majority ownership to a financial investor30% 70%Private Equity FirmsManagement Buy-Out (MBO)Sell the business to the management team, p

10、otentially with the backing of a financial investor0% 40%Management TeamDissolution Terminate operations and liquidate assetsN/AAuction / Multiple BuyersFamily TransferTransfer ownership to a family member 0% 100%FamilyFamily Owned Businesses OverviewWhat is Private Equity?What is the role of an Inv

11、estment Banker?Examples of Private Equity Transactions in Washington StatePresentation OverviewWhat is a Private Equity Fund? An asset class of equity securities which are invested directly into operating companies, often using debt packages to leverage purchase capacity Private Equity Funds general

12、ly focus on well established businesses while Venture Capital or Angel Investors focus on early stage companies Compensated through the cash-on-cash return and value growth of companies Fund managers receive a percentage of the above average return their investments generate There are over 1,000 mid

13、-market PE funds in the U.S. with varying investment focuses based on business size, profitability, industry, transaction structure, and management dynamics How is a Private Equity Firm Structured? Private Equity Firm(General Partner)Limited Partners (Investors)(public pension funds, corporate pensi

14、on funds, insurance companies, high net-worth individuals, family offices, endowments, foundations, fund-of-funds, sovereign wealth funds, etc.)Private Equity Fund(Limited Partnership)Company ACompany BCompany CThe Funds ownership of the portfolio investmentsFund / Investment Management Ownership of

15、 the FundPrivate Equity Transaction ActivityPrivate Equity Investment ActivityPE Deal Flow Overview Over 3,000 PE firms are active in the US 83% of 2011 transaction activity invested in companies with transaction value under $250M 1Q 2012, U.S. PE firms completed 321 deals (72 on West Coast), totali

16、ng $55B in value 2012 YTD activity diversified across a variety of sectors with Business Products and Services (33%) and Consumer Products and Services (18%) representing highest transaction volume*As of 3/31/2012Private Equity Available CapitalPrivate Equity Available CapitalPE Fundraising and Unco

17、mmitted Capital Significant available capital in PE market record $425B capital overhang Over $100B in capital is nearing the end of its investment horizon firms are highly motivated to invest capital, driving activity and valuations PE fundraising remains strong with 26 funds closing during 1Q 2012

18、 with $20 billion in commitments, on par with the second half 2011$425 Billion*As of 3/31/2012How Do PE Firms Add-Value? The right private equity partnership provides capital and/or other resources to help address a variety of common growth and business transition challenges. Growth CapitalManagemen

19、t Depth / TransitionKnowledge CapitalBalance Sheet and Financing SolutionsIndustry Experience & RelationshipsCapital to support expansion initiatives employee hires, working capital, capital investmentExperience executing key strategic initiatives system integration, geographic expansion, capita

20、l decisionsAccess to management resources required to support next stage of growth Strengthen balance sheet to add stability to operations. Relationships with finance sourcesMacro level industry knowledge access/relationships with key target customers or marketsCompany Scale / Momentum Sales $10M, E

21、BITDA $30M, EBITDA $5M Visible, defined growth opportunitiesOperations & Management Customer and channel concentration Need for additional financial discipline Lack of management depth Significant capital expenditure requirements Blue-chip, diversified customer base Recurring, highly visible rev

22、enue Management depth (institutionalized knowledge) Established systems and procedures Market Trends / Product Offering Small, competitive industry Commoditized product with margin pressure Limited product line Attractive industry dynamics (size, growth prospects, fragmentation) Diverse, differentia

23、ted product line Proprietary products or processesWhat is the Investment Criteria of Private Equity Funds?Limited ProspectsValuation / Attractiveness ScaleStrong AppetiteFamily Owned Businesses OverviewWhat is Private Equity?What is the role of an Investment Banker?Examples of Private Equity Transac

24、tions in Washington StatePresentation OverviewCharacteristicBusiness Broker or Friendly LawyerMiddle MarketInvestment BankerTypical Transaction SizeZero to $50m$10 to $100 millionLikely Selling Process NegotiatedPrivate AuctionPost an Asking PriceYesNoCapital Structure RaisingNoYesManagement Buyouts

25、MaybeYesRecapitalizationsNoYesBoard Advisory ServicesNoYesComparison of M&A ParticipantsThe Role of an Investment Bank Manage the transaction process Evaluate potential buyers/investors Strategically position the Company to attract prospects, an ideal structure, and a premium valuation Create an

26、d manage a competitive atmosphere Advise on complex transaction issues and structures Negotiations and due diligenceWhat are the Key Steps of a Transaction Process?A well run transaction process typically takes 6-9 monthsPreparatory phase(4 - 6 weeks) Initial due diligence meeting Perform financial

27、analysis Approve buyer list Develop blind investment summary Prepare offering memorandum and supportive marketing materialsKey value messages and objectives definedMarketing phase(6 - 8 weeks) Contact prospects Field initial due diligence Introductory meetings with prospects Select prospects to invi

28、te to management presentationsIdentify synergies and choose qualified prospectsStructuring & negotiation(8 - 16 weeks) Solicit letters of intent Negotiate terms Complete due diligence Definitive documentationsignedExtract final concessions and value from preferred prospectBuyer/investormeetings(

29、6 - 8 weeks) Management and strategic presentations Discuss potential deal terms and structure Coordinate follow-up due diligence Select prospective buyer to move forward withDevelop strategy and exchange due diligenceFamily Owned Businesses OverviewWhat is Private Equity?What is the role of an Inve

30、stment Banker?Examples of Private Equity Transactions in Washington StatePresentation OverviewSample Washington State PE Owned Companies WA State PE Case Studies National Frozen FoodsTransaction BackgroundEndeavour partnered with management to recapitalize family business in 2008Family retained part

31、ial ownership and received liquidity600 full-time and 1,400 season employeesSubstantial investments in systems and WA (Chehalis, Moses Lake, and Quincy) and OR (Albany) facilitiesEndeavour assisted in developing international export strategy to maintain business level in difficult economyAbout Natio

32、nal Frozen FoodsNational Frozen Foods (National) processes and freezes vegetables at facilities throughout Washington and Oregon. National was founded in 1912 and is one of the oldest and largest frozen vegetable processing companies in the U.S. About Endeavour CapitalPNW-based PE firm with $1 billi

33、on in capital under management. Focus on partnering with management teams of industrial and consumer companies located on the West Coast.Frozen vegetable processor with facilities in WA and ORBacked management in its acquisition of:WA State PE Case Studies Vaupell Transaction BackgroundAcquired by H

34、IG Capital in 1998 (still a portfolio company)Through multiple acquisition and investments in organic growth, employment (750 employees) and revenue ($150 million) have grown exponentially since investmentCompanys primary manufacturing facility is in Seattle (90,000 sq. ft.), with second WA state fa

35、cility opened in Everett in April 2012 (70 new WA jobs)Community partnership with North Seattle Community College to promote engineering and trade-labor trainingAbout Vaupell Based in Seattle, WA, Vaupell is one of the leading value-added suppliers of highly engineered injection molded advanced poly

36、mer materials for use in aerospace and medical applications. About H.I.G. CapitalFlorida-based PE firm with $1.5 billion in capital under management. Focus on partnering with management teams of profitable and well-managed manufacturing or service businesses.A leading aerospace polymer component sup

37、plierAcquired the stock of:John ODoreManaging DirectorMeridian CapitalOffice: 206.224.6152Email: Recapitalization Growth Equity RaiseSample TransactionsTransaction Mechanics Sample RecapitalizationAssumptions$5 million pre-recap net debt, $15 million in post recap net debtShareholders sells 70% of shares, reinvests 30%Preliminary Transaction Proceeds ($ 000s)Notes / CommentsTransaction Enterprise Value$25,000 Negotiated transaction value from M&A processThird-Part Debt$5,000 Pre-Recap Equity Value$20,000 Sold Ownership Percentage70%Retained Ownership Percentage30% Shar