SEA Senior Executive Advisors Red Hook Capital LLP San Diego, CA [email_address] H R
Investor: Red Hook Capital
Management has completed more than $5 billion in deals
Diversified through recruitment of wide breadth of advisors
Strategic Financial Operational Created spin-off of publicly traded technology company Resulting in $20 million investment for this new venture Turnaround and merger of bundled service provider with $50 million in revenue 2x exit opportunity for $50 million backed venture capital deal after refocusing sales strategy
SEA Program Advisor and Investor
Strong SEA candidates (28+ specific expertise)
Developed SEA “Leadership Trust”
SEA Program RHS
Investor: Red Hook Capital Service Building on past experiences RHC SEA 5,000+ Rolodex Results 12 years + RHC Advisors 20 years = Total Years 32 years 28+ people Key Resources
SEA Overview Board Positions (Directors & Advisors) Company CEO SEA Chairman Strategy 4-5 other advisors Shareholder Other Partners Board of Advisors SEA Chairman Board of Directors Shareholder CEO PR
28+ Leadership Trust Candidates Visionary to Mentor
Financial SEA Advisor : Ted is a former financial executive who has serve in the financial community as CFO of Fairchild Industries and AMF Incorporated, as an investment banker for F.S. Smithers and Morgan Stanley, and as an advisor to General Electric Capital’s Telecommunication Financing. He was responsible for the financing and building of ATS-6 communication satellite and the pioneering of American Satellite Corporation. He has served as head of Corporate Finance at F.S. Smithers, now part of Paine Webber, where he managed the Lockheed Martin account at the height of their problems. He has served as professor of finance at Columbia University. He has served on the board of companies and U.S. Government advisory boards. He is currently a board member of the Financial Executives Institute. He received a B.A. from Dartmouth College and M.B.A. from Harvard.
Visionary SEA Advisor : JD served in management roles in strategy and corporate and business development for MCI and Lockheed Martin where he played key roles in the creation and development of several new ventures. He has also served as an industry analyst for the leading Internet research company, Jupiter Communications, where he advised clients, including Internet start-ups and various Fortune 100 companies, on business strategy, mergers and acquisitions, revenue models, and future growth opportunities. JD has been a speaker at various industry forums, has been quoted in numerous leading publications, such as the Wall Street Journal, and has made several appearances on CNN and CNBC. Mr. Morris serves on the advisory board and board of directors of several technology companies including Counterpart Publishing, Globeam Corp., Ferro.net, ITC.net, and PromoNexus. He enjoys investing in start-ups, sailing, and windsurfing. Mr. Morris received a B.A. in economics with mathematics from Hampden-Sydney College in Virginia and a M.S. in operations research from the George Washington University in Washington, D.C
SEA Leadership Trust Diverse talent pool
CFO: Ted is the former financial executive has serviced the financial community as CFO of Fairchild Industries and AMF Incorporated, as well as 15+ year NYC investment banker veteran. He received a B.A. from Dartmouth College and M.B.A. from Harvard.
International Capital: Jeff is a former Lehman Brothers banker and Director for Asia and South America for billion fund equity fund. He received a M.B.A. from Wharton.
Global Policy & Regulation: Bill is an angel investor and international advisor to think tanks, US & foreign governments for 25+ years. He received his B.A. & J.D. from Duke University.
Restructuring/LBO: Jim is a former Managing Director of Lehman Brothers restructuring group. He received a B.A. and M.B.A. from Harvard
PR: Suzanne has been in the PR business for more than 20 years advising executives on public affairs, media relations and other PR functions that have resulted in interviews and media coverage in the WSJ, NY Times, Washington Post, and other major print, tv, radio, online, and other media outlets.
Staffing: Gary is an angel investor in IT companies, limited partner of several VC funds, and 25+ year veteran of staffing industry. He received B.S. from Virginia Tech.
Strategy: JD served with MCI, Lockheed Martin, and Jupiter Communications in strategy and corporate development senior management capacities. He received as B.S. from Hampden-Sydney College and M.S. form the George Washington University.
Others: former fellow of Boeing, former fellow SRI, former Secretary of the Air Force, former angel investors/entrepreneurs, public & private CFOs, and other senior CXO candidates for the Senior Executive Advisor (SEA) program.
LBOs Leverage Buy Out (RHC Case Studies) March 21, 2007 J. David Morris General Partner Red Hook Capital
What is your strategy
Who is the team
How do they get returns
RHC case studies
Consolidation IT service (LMT)
Consolidation Telecom (MCI)
Consolidation Healthcare (HBO)
Buyouts surpass 1980s levels
Venture Capital firms are moving into low end buyouts
Wealth of capital
Wealth of management
Private Equity firm sponsor
WHY BUYOUT? Buyouts are a current and long term trend
Buyout firm (KKR, Texas Pacific Group, Gore Technologies)
WHAT IS YOUR STRATEGY? Financials are key, but strategy will be the deal closer
What type of a team do you have?
How does your client’s team fit?
Central casting / Track record
Industry visionary / Customer relationships
A / Z
WHO IS YOUR TEAM? Management Team Should Fit Your Strategy
Acquisition (cash, stock, warrants)
IPO (stock, warrants)
Strategic Acquisition (Miami, FL) telecom consolidation company resulted in return for investor and management of cash and liquid stock (management owned 51% under claw-back);
Consolidator Acquisition (Irvine, CA): telecom turnaround sold to a consolidator resulting in cash and restricted stock for investors and management.
IPO/Reverse Merger (Fairfax, VA): management retained owning 49% wholly owned subsidiary with need for broker to provide loan based on locked up stock and help sell stock (SEC rules);
HOW DO YOU GET RETURNS? Lots of Exit Options with Different Returns
CONSOLIDATION RHC Case Study J. David Morris Red Hook Capital NEWCO Consolidation CASE STUDY #2
KEY FACTS Highly Secure Communications Solutions
WHY CREATE NEWCO? Technology Solutions
Turnkey solutions provider
Market Needs and Drivers Source: Boston Consulting Group, CCV Website Conclusion Emerging technologies drive highly secure global communications solution enterprise needs. Enterprises Need Highly Secure Global Communication Solutions
Changing technology landscape
Mission critical applications requirements
Highly Secure $1.5m EBITDA 60%
Secure $1.5m 30%
VAR $20m 10%
VAD $30m 5%
VISION ON MARGINS Move Business from Value Added Dealer to Highly Secure Solutions
MANAGEMENT Management Team in Development Interim CEO, JDM CFO, BS
Visionary with M&A experience ;
Leadership roles ranging from MCI to Lockheed Martin.
Track record CFO of multinational companies with diverse portfolio of companies;
Leadership roles in IPO for MCI to other IPOs for cutting edge technology companies.
President,/CAO TM Board, TS
Former Sec. Air Force;
More than 30 years government and contractor leadership roles.
CFO with turnaround expert (Fairchild);
More than 35 years investment banking leadership.
President Solutions, MF President Technology, TBO
Interim RHC turnaround advisor
Interim RHC track record sale technology (strategic exit VC deal)
2006 Revenue (1) :
OVERVIEW $125 million (Performa) Customers: Multinational corporations to the United States government. Two Operating Divisions: Service (90% of revenue) Technology (10% of revenue) Acquisitions (10 targets) Organic (restructuring)
TBA1 2005 revenue casted by outside investment bank
RHC, TBA1, TBA2
NEWCO at a Glance 2006 Earnings from Operations (1) : $15 Million (Performa) Incorporated: TBA Employees (2) : 700 as of 2007 (from 1 in 2006) Growth Strategy
M&A 2q2005: closing $75 million communications solution provider.
Solutions: cash flow positive (42+ targets)
Technology: market drivers (14+ targets)
Organic: synergistic growth & CCV Bus. Dev.
Increased margins: Acquiring emerging technology companies that can increase margins and provide competitive differentiators.