Transcript Slide 1

October 7, 2014
Strategic &
Financial Advisory
Services
Strategic & Financial Advisory Services
Sean Nolen, CPA, CGMA
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Deloitte 1984 – 1996.
CFO of Paddock Pools 2005 – 2009.
CFO of Various Private and Public Companies since 1996.
BOD Member of Various Private and Public Companies since 1996.
Directed numerous public offerings including IPOs.
Participated in numerous private equity transactions.
Participated in numerous acquisitions and sales of companies
across a wide variety of industries.
• Have led Strategic Planning initiatives as both CFO and outside
consultant.
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Strategic & Financial Advisory Services
History with Paramount
• MVP of Paddock Pools Basketball team late 80s.
• CFO of Paddock Pools 2005 – 2009.
• Consulted with Buzz on various Paramount customers since 2009:
Potential sales and acquisitions.
Strategic direction / planning.
Financial statement analysis and evaluation.
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Strategic & Financial Advisory Services
Identified a “Need”
Are You Working “On” Your Business or “In” it?
• Many small to mid-size companies don’t have time to think
strategically - Majority of effort is spent fighting the daily fires.
• Don’t have access to resources with expertise in their industry.
• Don’t have access to resources with experience in their role.
• Don’t have access to resources with experience on both sides of
transactions to add perspective and address preparation.
• High cost of experienced “Professionals” – CPAs and CEOs.
• Need resources to make the most informed business decisions.
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Strategic & Financial Advisory Services
Unique Resources
• Sean – Background as a senior finance executive across many
industries including construction and retail with experience on both
sides of many transactions across many forms.
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• Access to Buzz Ghiz & Paramount Professionals (as necessary /
desirable) – CEO of two industry leading companies in the pool
construction, retail and manufacturing industries. Experience
leading the sale of a major pool company.
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• A unique set of resources to address the majority of issues and
opportunities Paramount customers experience adding a significant
competitive advantage.
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Strategic & Financial Advisory Services
Examples of Where We Can Help
• Long-term Strategic Direction.
• Transaction Preparation and Analysis.
• Day to Day Operations.
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Strategic & Financial Advisory Services
Long-Term Strategic Direction
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Transaction Preparation and Analysis
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Strategic Plan Development.
Industry and Competitor Analysis.
Risk Analysis.
Market Analysis and Opportunities.
Growth Strategies.
Capital Needs and Timing.
Financing.
Projections and Modeling.
Return Analysis.
Business Unit Evaluation / Maximization.
Exit Strategies.
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Strategic & Financial Advisory Services
Day to Day Operations
• Cash Flow Analysis.
• Operations Analysis:
Corporate Structure and Personnel Evaluation.
Process Improvement.
Vendor Analysis.
Cost Control
• Financial Statement Analysis.
• Key Performance Indicators / Management Reports.
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Strategic & Financial Advisory Services
Long-Term Strategic Direction
Example
Exit Strategies – Selling Your Business
How we can help.
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Running Your Business as
Though it will be Sold Tomorrow
Always be prepared to sell your
business.
It is never too early to prepare – We
can develop a plan.
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What’s The Value
 Assets
 Cash Flow – EBITDA
 Future Prospects and Growth
We can analyze your business and help
identify where the value is, where it
could be and to assist in developing the
marketing approach.
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EBITDA –
A General Measure of Cash Flow
(Earnings Before Interest, Taxes, Depreciation and Amortization)
Net Earnings
+ Interest
+ Taxes
+ Depreciation and Amortization
= EBITDA (Cash Flow)
We can evaluate each item to ensure
they are maximized.
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Company Value
EBITDA
X Earnings Multiple
= Company Value
Do you know what drives EBITDA? Do
you know what drives your multiple?
Are your numbers bullet proof?
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Planning, Planning, Planning
 Should not be an impulse decision.
 Company should be positioned for
sale.
We can help you analyze the decision,
plan for the sale and position your
company.
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Planning, Planning, Planning
 Are all Owners on Board?
 Do all Owners have the same
expectations?
 Do all Owners have the same
motivations?
 Do all Owners have the wherewithal to
complete the deal.
We can address owners’ concerns and
capabilities.
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Planning, Planning, Planning
Communication
Discuss with your legal, accounting and tax advisors
Discuss with your management team
Find a business broker
Consider a business valuation assessment
We can help you ensure you cover all of the bases and
are positioned to maximize value and complete the
transaction.
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Planning, Planning, Planning
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Get your house in order
- Legal documents should be clear and complete – We
support your legal team to ensure all business issues are
addressed.
- Historical financial records should be impeccable:
- Audited FS will have more credibility.
- Evaluate how to maximize value drivers.
We have the financial background to ensure your FS are
bullet proof and the drivers are maximized.
- Projections should go out at least 2 years w/ support:
- Should be concise and understandable.
- Assumptions should have support.
- Consider range of best and worst scenarios.
We can develop and prepare projections which will be the
basis of the sale in a format that is acceptable to investment
bankers and potential buyers.
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Planning, Planning, Planning
 Set a reasonable time line for the sale – We can
manage the process.
 Do you need time to beautify? We can identify
and implement changes.
 What can you do to put your best foot forward?
 Maximize EBITDA
 Maximize multiple
We can build models to determine the best value
drivers for the business.
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Planning, Planning, Planning
 Maximize EBITDA – The questions we will
ask:
 Can you accelerate earnings?
 Can you eliminate costs?
 Structure of transactions?
 Are there non-recurring costs in your past?
We can help develop the answers.
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Planning, Planning, Planning
 Maximize your multiple – More
Questions:
 What’s your story?
 What’s the sizzle?
 What makes your future shine?
 Where is the excitement?
And more answers.
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Planning, Planning, Planning
 Higher EBITDA = Higher Sales Price
 Higher Multiple = Higher Sales Price
 Double up with both!
We are your representative – we can
help drive supportable value.
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Business Brokers
 Good and Bad – Get recommendations – We
can evaluate.
 Package the Company – Sales Experience – We
will know your business and industry better
than any broker. We support their process and
evaluate their recommendations.
 Market the Company – Connections – We can
add credibility to the process.
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Who to sell to?
 Financial Buyers – Do you know what
financial buyers are looking for?
 Strategic Buyers – Do you know who
the strategic buyers are? Do you
know what is important to them?
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Financial Buyers
 Typically an ROI investment based on
the businesses stand alone profit
potential.
 Today’s private equity firms are looking
to buy right, build it up and sell at a
substantial profit - Minimum ROIs >
30%.
We can evaluate how a financial buyer values
your business and help you develop a
presentation tailored to this type of buyer.
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Strategic Buyers
 Have current business that will leverage off of
acquisition.
 Should see more value than a financial buyer:
- Elimination of overhead
- Expand revenue
 Add on where 1 + 1 > 2.
 Typically longer hold times.
We can analyze how the businesses fit together so
you don’t leave value on the table.
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Final Thoughts
 Plan, Plan, Plan
 Communicate
We can help you get ahead of the
process and stay ahead of the process.
We are your sounding board for ideas,
issues and opportunities.
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Strategic & Financial Advisory Services
Contact Information
Sean Nolen, CPA, CGMA
(602) 763-5498
[email protected]
Can also be reached through Paramount
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Q & A…?
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Thank You
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