George A. Haloulakos, MBA, CFA DBA Spartan Research

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Transcript George A. Haloulakos, MBA, CFA DBA Spartan Research

George A. Haloulakos, CFA
E-mail: [email protected]
Cell phone: 425-241-5016
Over 30 years in finance, strategy and new business ventures
• 2 years - graduate assistant in economics.
• 13 years - senior analyst in securities research,
asset management and investment banking.
• Running own consulting practice (Spartan
Research) since 1995.
• Award winning instructor at various
universities and corporations teaching finance,
economics, management and mathematics
since 1998.
Service Offerings
Capital market research
Due diligence
Expert witness testimony
Mergers & Acquisitions
Restructuring & asset sales
Licensing formulas
EXAMPLE #1: Capital Market Research,
Due Diligence & Restructuring
• Client: Fortune 500 engineered lumber products
company with leading market share.
• Problem: Persistently unprofitable window business
depresses stock price [$21 per share].
• Solution & Aftermath: Company adopts our divestiture
recommendation [$2 charge to EPS & Book Value] to
refocus on core business. Regains profit growth
immediately, positions itself for eventual sale to larger,
vertically integrated forest products company at $42
per share 4-1/2 years later. Total value of $720 million
represents 2x increase in market value or annualized
return of 16% over holding period.
EXAMPLE #2: Expert Witness
Testimony & Asset Sales
Summarizing the facts of the case:
Plaintiff claims that the Partnership and its partners
were disadvantaged by the fact the Partnership did not
enter into a lease on the terms in LIS lease proposal
and instead sold the property to TNG. Plaintiff is part
of the Partnership and alleges material loss of income
from sale of property to TNG versus the lease proposal
from LIS. Defendant is majority owner in Partnership
and initiated sale of property. Our assignment: provide
a valuation analysis to aid the Defendant in refuting
the Plaintiff claims.
EXAMPLE #2: Expert Witness
Testimony & Asset Sales - (continued)
Based on our research and analysis, we
concluded that the Partnership and its
partners were not disadvantaged by, and
actually benefited from, the fact the
Partnership did not enter into a lease on the
terms in the LIS lease proposal and instead
sold the property to TNG. We therefore
recommended / petitioned for dismissal of the
Plaintiff’s claim. Plaintiff dropped its case.
EXAMPLE #2: Expert Witness
Testimony & Asset Sales – (continued)
Plaintiffs' analysis fails to discount to present value the expected lease income from
LIS lease proposal. On this basis, this reduces the plaintiff's expected lease income by
$112, 711 from $668,952 to $556,241.
Plaintiff's analysis fails to specifically break down significant cash outlays over the
expected 5-year investment horizon that further reduce future income. Moreover,
these outlays are not discounted to present value. The outlays on a present value basis
NOT factored into plaintiff's analysis include capital upgrades ($160,000), debt service
($153,231), real estate taxes ($24,759) and payoff of remaining loan balance
Plaintiff's analysis fails to specifically explain how capital upgrades are to be financed.
Presumably, the beginning partnership reserve ($168,152) will be the source of funds,
leaving a residual partnership reserve of $8,152.
The net result of the aforementioned factors is a negative net present value of
($6,599) for the LIS lease proposal, not a surplus as contended by the plaintiff. The
deficit of ($6,599) compares with the $100,000 forecasted by the plaintiff.
By comparison, the TNG sale, on a present value basis yields CASH ON HAND of
$1,522,519. This includes partnership reserve ($118,000) less the loss of rent for the
seven-month period from October 2004 through April 2005.
EXAMPLE #3: Licensing & Due
• Client: Oceanography equipment firm.
• Problem: Developed technology product and
sought licensing agreement but lacked valuation
framework for negotiation with potential
corporate partners.
• Solution & Aftermath: Client adopts our valuation
study and strategy that provides upfront cash
payment plus long-term royalty income. Total
present value of this plan to client in first 3 years
of $540,000. Corporate partner agrees to plan.
EXAMPLE #3: Licensing & Due Diligence –
Client Feedback (continued)
“My wife and I had spent years developing a technology product
with our own resources and were financially exhausted. We were at
the point of negotiating a licensing agreement when we were
introduced to George. George helped us to establish a valuation for
our technology and to develop a strategy for working with the
company that is producing our product. His help gave us far more
confidence entering into these negotiations by giving us a clear
sense of what our intellectual property was worth and how we
might be compensated. It's invaluable that we had George's help
prior to writing contracts and starting with the legal side of the
process. It's also important that his approach was not generic or
cookbook, he worked with us to take what we knew about our
particular industry and helped us to frame that information in terms
that made business sense. He clearly cared deeply that we were
successful. The result has been a successful venture alliance where
all parties are benefiting.”
• Published author: Dollar$ and Sense: A Workbook on the ABCs of
• Over 300 security analyst reports on diversified companies and
various industries.
• 3-time Chair [plus organizer & presenter] -- AIMR Biennial Forest
Products Industry Conference.
• Successful initial public equity and private debt offerings and share
repurchase programs totaling $100 million in emerging growth,
technology and forest product companies.
• Investment performance added 1 percentage point [or $40 million
of added value] to $4 billion equity portfolio of internally managed
assets for E.I. du Pont Pension Fund.
• Researched impact of tax policy on capital formation & financial
markets plus how monetary policy changes affect currency
exchange rates [Center for Study of Private Enterprise].