<ul><li>Corporate Development Services  </li></ul><ul><li>for the Middle Market </li></ul>
Corporate Development Program <ul><li>Focus </li></ul><ul><ul><li>Middle market size businesses </li></ul></ul><ul><ul><li...
Value Proposition
Acquisition <ul><li>Many acquisitions become emotional rather than strategic buys. We help keep things in perspective… </l...
Strategic Assessment <ul><li>Strategic position  </li></ul><ul><ul><li>Market Attractiveness </li></ul></ul><ul><ul><li>Co...
Research & Candidate Development <ul><li>Rate each potential acquisition candidate using a ten question quantifiable techn...
The Deal <ul><li>Getting to the deal stage can take 18+ months. Success is dependent upon </li></ul><ul><ul><li>Emphasis o...
Divestiture <ul><li>Businesses need to prune in order to grow. We provide the “sheers” or processes needed to maximize res...
“ Most Companies wait too long to divest. They should sell off businesses long before they become a burden.” McKinsey Quar...
“ Corporations that take a disciplined approach to divestiture not only sharpen their strategic focus on their core but al...
Defining a  D ivest-Business <ul><li>Business unit within a larger division or group .  </li></ul><ul><ul><li>Sales : $10 ...
Test For Fit and Value <ul><li>Fit </li></ul><ul><ul><li>Keeping them isn’t essential to positioning your company for long...
Valuing The Business For the Middle Market <ul><li>Focus on key value drivers </li></ul><ul><li>Value considerations </li>...
Marketing Value To The Middle Market <ul><li>Prepare business documents for Offering Letters & Brochures  </li></ul><ul><l...
Buyer Screening Process <ul><li>BizMart SM  </li></ul><ul><ul><li>Eight thousand Buyers </li></ul></ul><ul><li>Marketing &...
Commission Program <ul><li>Commission </li></ul><ul><ul><li>Sold within 12 months </li></ul></ul><ul><ul><ul><li>Value up ...
Who is Chapman Associates? <ul><li>Served middle market clients since 1954. </li></ul><ul><li>Represent companies worth be...
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Outsourced Corporate Development Services for the Middle Market

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Outsourced Corporate Development Services for the Middle Market

  1. 1. <ul><li>Corporate Development Services </li></ul><ul><li>for the Middle Market </li></ul>
  2. 2. Corporate Development Program <ul><li>Focus </li></ul><ul><ul><li>Middle market size businesses </li></ul></ul><ul><ul><li>North America </li></ul></ul><ul><ul><li>B to B </li></ul></ul><ul><ul><li>Manufacturing & Distribution, Services </li></ul></ul><ul><li>Client Profile </li></ul><ul><ul><li>Small/Mid Cap Corporations and privately held companies </li></ul></ul><ul><ul><li>International companies looking to expand in NA </li></ul></ul><ul><ul><li>Divisional business units </li></ul></ul>Corporate Development Acquisition Divestiture Fit & Value Pre-determined Value Marketing Value Transaction Strategic Assessment Due Diligence Research Candidate Development
  3. 3. Value Proposition
  4. 4. Acquisition <ul><li>Many acquisitions become emotional rather than strategic buys. We help keep things in perspective… </li></ul><ul><ul><li>Analyze strategic position and alternatives </li></ul></ul><ul><ul><li>Market Intelligence </li></ul></ul><ul><ul><li>Research and develop candidate list </li></ul></ul><ul><ul><li>Solicit candidates </li></ul></ul><ul><ul><li>Facilitate due diligence Process </li></ul></ul><ul><ul><li>Coordinate purchase agreement process </li></ul></ul>Corporate Development Acquisition Divestiture Fit & Value Pre-determined Value Marketing Value Transaction Strategic Assessment Due Diligence Research Candidate Development
  5. 5. Strategic Assessment <ul><li>Strategic position </li></ul><ul><ul><li>Market Attractiveness </li></ul></ul><ul><ul><li>Competitive position </li></ul></ul><ul><ul><li>Vertical and horizontal synergy opportunities </li></ul></ul><ul><li>Analytical tools </li></ul><ul><ul><li>4- Block Benchmarking </li></ul></ul><ul><ul><li>SWOT Analysis </li></ul></ul><ul><ul><li>Channel To Market Metrics </li></ul></ul><ul><ul><li>ROI Modeling </li></ul></ul>Product Offering Narrow Broad Market Growth Low High Future Value Synergy Value Share Value Niche Value Strength Opportunities Weakness Threats
  6. 6. Research & Candidate Development <ul><li>Rate each potential acquisition candidate using a ten question quantifiable technique. </li></ul><ul><li>Determine the availability of the acquisition candidate, (including valuation) </li></ul><ul><li>Networking avenues to candidates </li></ul><ul><li>Introductory communications </li></ul><ul><li>Targeted mailing campaign </li></ul>
  7. 7. The Deal <ul><li>Getting to the deal stage can take 18+ months. Success is dependent upon </li></ul><ul><ul><li>Emphasis on strategic value vs. opportunistic price </li></ul></ul><ul><ul><li>Effective due diligence is critical </li></ul></ul><ul><ul><ul><li>Team selection </li></ul></ul></ul><ul><ul><ul><li>Project management </li></ul></ul></ul><ul><ul><ul><li>Synergy & market value validation </li></ul></ul></ul><ul><ul><li>Negotiations </li></ul></ul><ul><ul><ul><li>Reps & warranties </li></ul></ul></ul><ul><ul><ul><li>Transition services </li></ul></ul></ul><ul><ul><ul><li>Management retention </li></ul></ul></ul>
  8. 8. Divestiture <ul><li>Businesses need to prune in order to grow. We provide the “sheers” or processes needed to maximize results </li></ul><ul><ul><li>Testing Fit & Value </li></ul></ul><ul><ul><li>Pre-determined Value </li></ul></ul><ul><ul><li>Marketing Value </li></ul></ul><ul><ul><li>Transition Value </li></ul></ul>Corporate Development Acquisition Divestiture Fit & Value Pre-determined Value Marketing Value Transaction Strategic Assessment Due Diligence Research Candidate Development
  9. 9. “ Most Companies wait too long to divest. They should sell off businesses long before they become a burden.” McKinsey Quarterly- Divesting Proactively
  10. 10. “ Corporations that take a disciplined approach to divestiture not only sharpen their strategic focus on their core but also create nearly twice as much value for shareholders “ How the Best Divest -Harvard Business Review
  11. 11. Defining a D ivest-Business <ul><li>Business unit within a larger division or group . </li></ul><ul><ul><li>Sales : $10 to $100 million </li></ul></ul><ul><ul><li>10 to 250 employees </li></ul></ul><ul><li>No strategic value to the parent company </li></ul><ul><li>Under-resourced and over-burdened with corporate mandates and initiatives </li></ul><ul><li>Little attention given to business’ markets </li></ul>Corporate Division A Division B Division C Core Business D - Business Core Business D - Business Core Business D - Business
  12. 12. Test For Fit and Value <ul><li>Fit </li></ul><ul><ul><li>Keeping them isn’t essential to positioning your company for long-term growth and profitability </li></ul></ul><ul><li>Value </li></ul><ul><ul><li>They’d be worth more in any other company’s portfolio than in yours </li></ul></ul>Long-term fundamentals are sound Grow unit’s intrinsic value by 15%+ Revenues meet corporate threshold Textron Three Tests of Value
  13. 13. Valuing The Business For the Middle Market <ul><li>Focus on key value drivers </li></ul><ul><li>Value considerations </li></ul><ul><ul><li>Organization strength </li></ul></ul><ul><ul><li>Corporate dependence </li></ul></ul><ul><ul><li>Asset utilization </li></ul></ul><ul><ul><li>Market position </li></ul></ul><ul><ul><li>Customer Mix </li></ul></ul><ul><ul><li>Liabilities </li></ul></ul><ul><li>Take a buyers perspective </li></ul><ul><li>Pre-determined Value (PDV) minimizes valuation debate going forward in the process. </li></ul>Strategic Synergy Performance *3-5X *4-6X *5-7X Financial Competitor Market Expansion * EBITDA Multiple
  14. 14. Marketing Value To The Middle Market <ul><li>Prepare business documents for Offering Letters & Brochures </li></ul><ul><li>Develop profile of ideal buyer </li></ul><ul><li>Outline desired terms and conditions </li></ul><ul><li>Data gathering process </li></ul><ul><ul><li>Data Room Documents </li></ul></ul><ul><ul><li>Legal review </li></ul></ul><ul><ul><li>Reps & warranties </li></ul></ul>Pre-determined Value Marketing Package Financial Performance Organization Business Dynamics Assets & Liabilities
  15. 15. Buyer Screening Process <ul><li>BizMart SM </li></ul><ul><ul><li>Eight thousand Buyers </li></ul></ul><ul><li>Marketing & Research </li></ul><ul><ul><li>Mailings </li></ul></ul><ul><ul><li>400 thousand Contacts </li></ul></ul><ul><ul><li>Utilize Outside databases </li></ul></ul><ul><ul><li>Buyer criteria updates </li></ul></ul><ul><ul><li>Industry surveys </li></ul></ul><ul><li>Operation Standards </li></ul><ul><ul><li>Contract Forms </li></ul></ul><ul><ul><li>Confidentiality Agreements </li></ul></ul><ul><ul><li>Offering Brochures & Letters </li></ul></ul><ul><ul><li>Buyer screening methods </li></ul></ul>BizMart SM Buyer Mix
  16. 16. Commission Program <ul><li>Commission </li></ul><ul><ul><li>Sold within 12 months </li></ul></ul><ul><ul><ul><li>Value up to $10 million : 4.5% </li></ul></ul></ul><ul><ul><ul><li>Value over $10 million: 1.0% </li></ul></ul></ul><ul><ul><li>Sold after 12 months </li></ul></ul><ul><ul><ul><li>Value up to $10 million: 3.0% </li></ul></ul></ul><ul><ul><ul><li>Value over $10 million: 1.0% </li></ul></ul></ul><ul><ul><li>Minimum $200 thousand </li></ul></ul><ul><li>Retainer fee </li></ul><ul><ul><li>Based on scope - TBD </li></ul></ul><ul><ul><li>Applied towards commission at closing </li></ul></ul>
  17. 17. Who is Chapman Associates? <ul><li>Served middle market clients since 1954. </li></ul><ul><li>Represent companies worth between $3 million and $100 million. </li></ul><ul><li>Over 2,300 successful transactions to our credit. </li></ul><ul><li>Team averaging over 25+ years of experience - CPAs ’, Attorneys, Corporate Executives, Entrepreneurs </li></ul>Offices Nationwide

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