Moderator: Alexander B. Kasdan, Senior Managing Director, DelMorgan & Co. Panel: • C. Craig Lilly, Partner, Baker & McKenzie LLP • Thomas N. Mahoney, CFA, CAIA, Private Wealth Advisor, Senior Portfolio Manager, UBS Private Wealth Management • Greg Reber, Founder and CEO, AsTech Consulting • Michael L. Evans, Northern California Managing Director, Newport Board Group LLC MAJOR TOPICS: • Corporate law imperatives • Identifying high-risk areas pre-sale • Avoiding contingent considerations post-sale • Understanding seller motives and goals • “Institutionalizing” the business • Assembling the deal team • Valuation Issues • Sale process overview • Potential transaction structures • Understanding and managing cyber and technology risks • Due diligence • Wealth and estate planning for selling shareholders

1. Moderator: Alexander B. Kasdan, Senior Managing Director, DelMorgan & Co.
Panel:
• C. Craig Lilly, Partner, Baker & McKenzie LLP
• Thomas N. Mahoney, CFA, CAIA, Private Wealth Advisor, Senior Portfolio Manager,
UBS Private Wealth Management
• Greg Reber, Founder and CEO, AsTech Consulting
• Michael L. Evans, Northern California Managing Director, Newport Board Group LLC
© Copyright 2017 Expert Webcast – All Rights Reserved
GETTING YOUR COMPANY READY FOR SALE
May 25, 2017

2. 1
Expert Webcast is a sophisticated source of expertise for the
professional and the business communities locally, nationally and
cross-border.
Producing the industry’s leading webcast panels covering corporate,
M&A, restructuring and finance topics, Expert Webcast features
foremost experts in law accounting and finance, and addresses timely
and relevant issues faced by general counsel, C-level executives,
boards of directors, business owners and their advisors, as well as
institutional investors.
We welcome you to join our upcoming video webcasts or visit our on-
demand library to access recorded programs: www.expertwebcast.com.

3. 2
MODERATOR: Alexander B. Kasdan, Senior Managing Director,
DelMorgan & Co. With extensive experience in investment banking, corporate
law and restructuring at world’s leading firms, including Credit Suisse First
Boston, O’Sullivan Graev & Karabell LLP (now O'Melveny & Myers LLP), Battle
Fowler LLP (now Paul Hastings LLP) and Schlumberger Ltd., and as a founding
partner of Convergence Capital Partners, Alex brings more than twenty years of
senior-level Wall Street advice to middle market companies, entrepreneurs and
institutional investors. He has worked on a number of cross-border transactions in
North America, Europe and Africa.
Alex is a Senior Advisor to Governance and Transactions LLC, an advisory firm
established in 2003 by Mr. James L. Gunderson, former Secretary and General
Counsel of Schlumberger Limited, to assist boards, management and owners with
corporate governance, compliance, structuring and strategic transactions.
Alex is a frequent moderator and an interviewer at Expert Webcast roundtable
discussions attracting business leaders and leading professionals from around the
world.
Alex graduated magna cum laude from Middlebury College with a B.A. degree in
Economics and Italian and was elected to Phi Beta Kappa during his junior year. In
addition, he holds a J.D. degree from Columbia University Law School and has
studied at the University of Florence in Italy. He is admitted to the Bar in the State
of New York.
100 Wilshire Blvd.
Suite 750
Santa Monica, CA 90401
+1 310 980 1718 mobile
+1 310 935 3826 office
ak@delmorganco.com
www.delmorganco.com

4. 3
Panelist: Craig Lilly is a M&A/corporate partner in Baker &
McKenzie’s Palo Alto office. He has extensive experience in advising
strategics and private equity clients on stock and asset acquisitions,
mergers, divestitures, recapitalizations, consolidations, auctions, leveraged
buyouts, venture financing and distressed investments, among others. Mr.
Lilly frequently writes and lectures on legal and business issues regarding
mergers and acquisitions, private equity investments and corporate finance.
He has been quoted in, or contributed to, articles and features in
Bloomberg, The Wall Street Journal, Dow Jones events, The Deal
Magazine, and other publications. From 2006 to 2010, he was the
California reporter for the American Bar Association Committee on State
Regulation of Securities.
Mr. Lilly’s practice focuses on complex cross-border and domestic
acquisitions, divestitures, joint ventures, strategic investments, corporate
governance, growth financing and advising boards on innovative
investment structures. He also represents fund sponsors in connection with
structuring and organizing investment funds, parallel investment vehicles,
offshore funds, co-investment/side-by-side partnerships, side pocket equity
investments and sponsor operating agreements. He also provides
transactional and general corporate advice to portfolio companies.
Mr. Lilly holds a J.D. Order of the Coif and a B.B.A. with Distinction from
University of Oklahoma.
660 Hansen Way
Palo Alto, CA 94304-1044
USA
Tel: +1 650 251 5947
Fax: +1 650 856 9299
craig.lilly@bakermckenzie.com

5. 4
Panelist: Thomas N. Mahoney, CFA, CAIA, is a Private Wealth Advisor,
Senior Portfolio Manager at UBS Private Wealth Management.
Tom is a 30-year veteran of the financial services industry and is respected as an
intense, focused and highly service-oriented professional. In 2004, he moved his
practice from Credit Suisse to UBS Private Wealth Management, successfully
bringing all of his clients with him. His clients value his direct and friendly
relationship management style and trust him for his portfolio construction. He
relies on the Global Securities Market Index (GSMI), an institutional tool for
performance measurement—an instrument he introduced to UBS Financial
Advisors.
After receiving his B.B.A. in finance from the University of Wisconsin-
Madison, Tom earned an M.B.A. from Pepperdine University in California. He
completed the Private Equity and Venture Capital Program at Harvard Business
School. In addition, he is a Chartered Financial Analyst® (CFA®) charterholder
and is Co-Chair of the Private Wealth Management Committee of the CFA
Society of Los Angeles and is a Chartered Alternative Investment Analyst SM
(CAIA®). He is the President and Co-Founder of CAIA Los Angeles.
Tom serves on the Board of Directors and Finance Committee for The People
Concern, one of LA’s largest nonprofit organizations that offers assistance,
shelter and facilities to homeless individuals. An active scuba diver, Tom is a
Divemaster and Certified Rescue Diver. He also enjoys skiing, hiking and
playing chess. He and his wife have twin girls and live in Santa Monica.
2000 Ave. of the Stars
7th Floor North
Los Angeles, CA 90067
310-734-2401
thomas.n.mahoney@ubs.com
http://financialservicesinc.ubs.
com/team/mahoneygroup/

6. 5
Panelist: Greg Reber is the Founder and CEO of AsTech, a
leading information security consulting firm.
As an early pioneer in the information security field, Greg was
among the first to recognize and address the risks presented by
consumer-facing applications. He launched AsTech in 1997 and has
established AsTech as the premier firm that financial services
companies, retail service providers and other Fortune
1000 companies turn to for real-world, effective information security
solutions.
Greg has an engineering degree from the University of Maryland and
started his career as an aerospace engineer, then subsequently served
as an international trade consultant in the aeronautical industry. He is
a member of a number of professional organizations including the
Computer Security Institute (CSI), Information Systems Audit and
Control Association (ISACA) and the Open Web Application
Security Project (OWASP).
If he’s not playing with his kids or his American Alsatian, you can
find Greg at the racetrack driving in an endurance event or playing
bass with his local San Francisco Bay Area band.
71 Stevenson Street
Suite 1425
San Francisco, CA 94105
T 415.291.9911
C 415.786.7857
greg.reber@astechconsulting.com
www.AstechConsulting.com

7. 6
Panelist: Michael L. Evans is a National Managing Director and
Northern California Managing Director of Newport Board
Group, LLC. As a partner with Ernst & Young, Mike developed, led
and drove significant growth in a number of practices.
He created, grew and led, as Global Director, the firm’s Real Estate
and Construction Industry practice from 1988 to 1998, managing
2,500 professionals and personally serving many of the largest
international real estate organizations in the U.S. and around the
world.
Mike then served as the firm’s Director of Strategic Investments,
managing E&Y’s investments in 40 small and emerging growth
companies. He was also a senior partner for Quality and Risk
Management with responsibility for internal risk management in 30
countries.
Mike’s experience with middle market entrepreneurs includes
advising many small-medium clients in Silicon Valley on tax strategy
and planning. Earlier in his career he was in investment banking and
corporate law. He has also served as a project and country manager
for projects funded by the Bill and Melinda Gates Foundation.
1 Market Plaza, 36th Floor
San Francisco, CA
415-990-1844
Michael.Evans@NewportBoard
Group.com
www.NewportBoardGroup.com

8. 7
Panelist: Neil Morganbesser is co-Founder and President & CEO of DelMorgan & Co.
where he provides senior leadership within the firm and helps oversee all client engagements. Mr.
Morganbesser is also CEO of Globalist Capital LLC, DelMorgan’s broker-dealer affiliate. Mr.
Morganbesser has over 25 years of experience providing financial and strategic advice to a full
range of clients, including entrepreneurs, large corporations, governments, family businesses,
private equity funds, and special committees of public companies.
Mr. Morganbesser has been affiliated with some of the leading institutions in the world, and his
experience ranges from representing the offshore owners in the sale of a small, private U.S.
company for $10 million to representing the special committee of a large, public company in a $9
billion negotiated management buyout with a highly complex financial structure.
Mr. Morganbesser has truly global experience with the most sophisticated transactions, across a
broad range of industries and in a large number of jurisdictions, as the lead banker on a wide
variety of transactional and other advisory assignments, including domestic and cross-border
mergers, acquisitions, joint ventures, sales and divestitures, restructurings, special committee
assignments, unsolicited acquisitions and hostile defense. With transactional experience in over
30 countries, Mr. Morganbesser has successfully advised on over 100 transactions.
Until May 2008, Mr. Morganbesser was the head of West Coast and Asia Mergers & Acquisitions
at Bear Stearns & Co., as a Senior Managing Director based in Los Angeles. Prior to joining
Bear Stearns in May 2001, Mr. Morganbesser was an investment banker in the Mergers,
Acquisitions and Restructuring Department at Morgan Stanley (in New York and Los
Angeles). From 1990-1993, Mr. Morganbesser was a corporate and M&A attorney at Wachtell,
Lipton, Rosen & Katz.
Mr. Morganbesser graduated with an A.B. magna cum laude in Applied Mathematics /
Economics from Harvard University (Phi Beta Kappa) in 1986 and received his J.D. and M.B.A.
degrees (Order of the Coif, with honors) from Stanford University in 1990.
100 Wilshire Blvd.
Suite 750
Santa Monica, CA 90401
(310) 319-2000
nm@delmorganco.com
www.delmorganco.com

9. 8
MAJOR TOPICS:
• Corporate law imperatives
• Identifying high-risk areas pre-sale
• Avoiding contingent considerations post-sale
• Understanding seller motives and goals
• “Institutionalizing” the business
• Assembling the deal team
• Valuation Issues
• Sale process overview
• Potential transaction structures
• Understanding and managing cyber and technology risks
• Due diligence
• Wealth and estate planning for selling shareholders

10. 9
2BAKER & MCKENZIE |
Leaders in
Cross-Border M&A
*2016 Thomson Reuters data
77 offices 47 countries 4,200+ lawyers
K E Y F A C T S A N D F I G U R E S
Baker & McKenzie has done more cross-border deals than any other law firm in the world*. (2012 - 2016)
M&A
in Cross-Border
#1
by volume in
US$100M-1BN CROSS-BORDER DEALS*
by volume
FOR ALL CROSS-BORDER DEALS*
by volume in
M&A INVOLVING EMERGING MARKETS*
Also #1…

11. 10
©2017 Baker & McKenzie
Expert Webcast:
Getting Your Company
Ready for Sale
May 25, 2017
C. Craig Lilly, Partner, Baker & McKenzie LLP

12. 11
3BAKER & MCKENZIE |
State Of M&A Market: Multiples Are Still High

13. 12
4BAKER & MCKENZIE |
U.S. PE Inventory Continues To Increase

14. 13
5BAKER & MCKENZIE |
PE Exits Remain A Question Mark

15. 14
6BAKER & MCKENZIE |
EBITDA Multiples Increase: Will Pricing Pressures Take
Toll On Market?

16. 15
7BAKER & MCKENZIE |
Global M&A Transactions From 1990 Projected Through
2020 (Domestic And Inbound)1
1 Source:Baker McKenzie-Oxford Economics Global Transaction Forecast, January 2017.

17. 16
8BAKER & MCKENZIE |
Current Economic Trends Favor M&A
• LOW INTEREST RATES - Even after modest increases by the Fed, U.S. interest rates will
remain historically low, alongside cheap financing in the Eurozone, UK, and Japan.
• SOLID U.S. CONSUMER SPENDING - Low unemployment, growing wages, a stronger dollar
and low energy prices are boosting household spending power in the U.S.
• A RELATIVELY SMOOTH ECONOMIC TRANSITION IN CHINA - With service sectors
leading growth, growth should gradually slow to 6% - 6.5% per year, avoiding a sharp decline
in industrial activity.
• A EUROZONE RECOVERY DESPITE BREXIT - Business investment and job creation in the
Eurozone have remained steady despite the Brexit vote in June. Euro zone growth in 2016
outpaces the US for the first time since the 2008 crash!
• THE STABILIZATION OF OIL PRICES - But since the rate of price increases will be steady
(PPB to remain below US$60 until 2019), households will not experience a sharp rise in the
cost of energy and fuel, which should help protect global consumer spending power.

18. 17
9BAKER & MCKENZIE |
Current Economic Trends Favor M&A
• U.S. GOVERNMENT POLICIES - Increased infrastructure spending, tax reform and
repatriation of offshore cash will help U.S. economy and provide a further boost to domestic
M&A
• HISTORICALLY HIGH CORPORATE CASH BALANCES - Assuming that attitudes do not
harden against free global trade and investment, corporate leaders in advanced economies are
likely to regain confidence in the market and start investing their reserves.
• CAVEAT – Any political turmoil or trade war will provide a material roadblock to M&A.

19. 18
10BAKER & MCKENZIE |
Why Prepare for Sale and Conduct Internal Diligence?
§ Reduces or eliminates risks and surprises (that may kill deal).
§ Improves the speed to close.
§ Provides more deal and price certainty: internal diligence reduces the risk
of the deal being renegotiated due to a Buyer’s diligence findings.
§ Allows the Seller to understand and proactively address the potential
concerns a Buyer may have (and reduces burdens, redundant inquiries,
etc.).
§ Allows management to spend more time focused on operations/goals during
the sale process.

20. 19
11BAKER & MCKENZIE |
Identify High Risk Areas or Potential for Claims or
Disputes Post-Closing
§ The Seller's main concern is to maximize its net sales proceeds. The
Seller should identify all areas where there are potential issues and attempt
to resolve these issues before the negotiation and due diligence
commences. It is helpful to have outside legal counsel and auditors to
assist with this process.
§ Current areas of high concern are cybersecurity, compliance with anti-
corruption laws and data privacy.

21. 20
12BAKER & MCKENZIE |
How to Prepare for M&A
A selling company is not typically prepared internally to engage in a smooth M&A
transaction. Preparation for M&A includes:
§ Organize a cross practice deal team from all divisions/ disciplines (including attorneys
and auditors).
§ Conduct internal diligence - identify all areas where there are potential issues and
attempt to resolve these issues before the negotiation and due diligence.
§ Consider a financial audit - organize / clean up financials - an audit will help buyers
have more confidence in your results.
§ To the extent that key contracts or leases may require consents for a change of control
transaction, those consents should be identified early. A plan should be developed to
obtain those consents.
§ Organize diligence and set up a data room - the Seller must be prepared for the
diligence process by setting up an online data room to house all company information. .

22. 21
13BAKER & MCKENZIE |
How to Prepare for M&A (Continued)
§ Analyze structure early in process - understand the effect of the structures on the
commercial, tax, legal, personnel and IT aspects of the transaction across all
jurisdictions.
§ Prepare for stockholder, regulatory and third party approvals – legal counsel will help
you understand compliance and best practices.
§ Start preparing the disclosure schedule to the acquisition agreement early in the
process. A disclosure schedule identifies material agreements, employees, equity
holders and options, litigation, intellectual property, exceptions to representations and
warranties, etc. This can be a very long process.
§ Clean up cap table.
§ Intellectual property - confirm that you own or have valid rights to all IP used by the
selling company. Other issues include IP assignments from employees and
contractors, valid patents and licenses, non-infringement etc.

23. 22
14BAKER & MCKENZIE |
Non-Disclosure Agreements
Confidentiality Agreements, or Non-Disclosure Agreements (or a "NDA"), are necessary
legal documents used in M&A to protect both the Buyer and Seller.
§ A Seller needs to protect its confidential information so that its proprietary information
is not leaked to the market, competitors, customers or employees.
§ A NDA may also prevent the solicitation or poaching of its employees (and its
customers or suppliers) depending on the language.
§ A Buyer needs to know all material information about the business before it can make a
reasonable judgment as to whether or not they want to pursue further discussions with
the Seller, to value the company and reduce risks.
§ A Seller should generally resist an exclusivity provision at this stage in the process.

24. 23
15BAKER & MCKENZIE |
Hire a Seasoned Investment Banker
The company should consider hiring an experienced investment banker to assist it in the
process, finding prospective buyers and acting as an intermediary in negotiations.
§ Make sure the banker has a thorough understanding of the company, its industry,
valuations, and potential buyers (and the benefits/risks of each buyer).
§ Key questions for bankers: How many M&A assignments have you worked on in the
last three years that didn’t close and why? What comparable transactions have you
completed in the past 4-5 years? What valuation range should I expect? Tell me about
your fee structure.
§ Check references from clients - How much time did the senior people spend on the
deal? Were they there for you? How much of the work did you need to do on your
own? How often did your banker take the lead in things?
§ Carefully scrutinize and negotiate their “standard” form of engagement letter.

25. 24
16BAKER & MCKENZIE |
Hire Full-Time M&A Lawyers
§ It is imperative that knowledgeable, experienced M&A counsel be hired for the selling
company.
§ Make sure the legal team is familiar with your industry, laws of your geographic
footprint, and market terms and conditions; and follow your seasoned advisors’
recommendations.
§ Key questions: how many deals have you worked on during the last 3 years? In your
industry? What are common obstacles? Tell me how about the M&A market in our
sector? Why have deals failed to close? What types of material issues have delayed
or impaired deals? Tell me about how you have solved these issues and protected
your clients?

26. 25
17BAKER & MCKENZIE |
Structure - Agree on a Structure that Maximizes Value
§ Identify early the potential structures (e.g., asset v. share v. mixed transactions).
§ Understand the effect of the structures on the commercial, tax, legal, personnel and IT
aspects of the transaction across all jurisdictions
§ Allocate very carefully all tax burdens and liabilities between the parties.
§ Identify key risk areas.
§ Conduct preliminary antitrust/regulatory analysis very early in transaction process
§ Avoid regulatory or third-party approvals (if possible) that could affect closing or timing.

27. 26
18BAKER & MCKENZIE |
The Negotiation Process
Negotiations should typically be undertaken by an M&A Committee of the Board.
Negotiation tips include:
§ Strategize on potential concessions; price may not be everything (consider terms,
contingencies, adjustments, indemnities/ recourse, financing, rollover equity, control
etc.).
§ Know your limits (e.g., minimum price), alternatives, sunk costs and opposition.
§ The influence of first offer: the first named price in a negotiation significantly influences
subsequent prices.
§ Research prior to negotiation: understanding what’s driving Buyer; this will increase
your bargaining power.
§ Back up your price with precision such as data/analysis.
§ Negotiate governing law early in process.

28. 27
19BAKER & MCKENZIE |
Letter of Intent
§ A Buyer will typically want to “lock up” a deal via a letter of intent (“LOI”) with an
exclusivity period (such as 30–60 days).
§ A LOI may not be in the Seller's best interests unless there are very detailed terms
regarding the proposed sale (e.g., price, structure, contingent consideration or escrow
(if any), scope of representations and warranties, indemnification provisions including
deductible, basket, cap and term, noncompetes, closing conditions etc.).
§ Plan ahead and conduct preliminary antitrust/regulatory or third party analysis very
early in transaction process
§ A LOI is a signal that Buyer is serious in their intentions to purchase the company (but
may not be 100% committed)!

29. 28
20BAKER & MCKENZIE |
Employee Transfer and Issues
Drill down on all employee benefits and employee expectations - what is the acquirer’s
plan for retention and motivation of the company’s employees?
§ Confirm compliance with local laws and HR termination liabilities.
§ How will the company’s stock options be dealt with? Confirm acceleration and single/
double trigger issues in options.
§ Is there a carve-out or bonus for management to sell company? Is departing CEO
motivated?
§ Confirm Buyer’s incentive plan for management team does not adversely affect the
sale price.
§ Assess applicability and impact of privacy and data protection laws.

30. 29
21BAKER & MCKENZIE |
Key Deal Terms
§ Price and payment contingencies including purchase price/ working capital
adjustments, escrows and holdbacks
§ Analyze all deal structure to maximize tax efficiency
§ Representations and warranties
§ Closing conditions and third party approvals
§ Non-competes
§ Indemnities: scope, exclusions, baskets/ deductibles, caps, carveouts and term
§ Employee transfers and management incentives
§ Governing law
§ Consider most likely disputes, procedures (such as mediation or arbitration) and
choose forum

31. 30
22BAKER & MCKENZIE |
Best Practices – Resources
The following are available upon request:
§ Baker & McKenzie LLP’s Customary Issues in Negotiating Cross-Border
Acquisition Agreements is a searchable microsite summarizing Key
acquisition terms across 44 countries.
§ Baker & McKenzie LLP’s Global M&A Handbook.
§ Baker & McKenzie LLP’s Cross-Border M&A Institute – a CLE-accredited,
in-house training program that draws upon our decades of experience
developing strategies, processes and precedents to facilitate successful
deals across multiple jurisdictions.

32. 31
23BAKER & MCKENZIE |
Global
Transactions
Forecast – with
Oxford Economics
Global Private
M&A Handbook
International
Joint Ventures
Handbook
Global Public
M&A Handbook
Post-Acquisitions
Integration
Handbook
M&A By Design:
Timing and
Complexity of
Cross-Border
Acquisitions
Suite of Baker McKenzie - Resources

33. 32
24BAKER & MCKENZIE |
Thank you for attending our webinar!
C. Craig Lilly
Baker & McKenzie LLP
660 Hansen Way
Palo Alto, CA 94304
(650) 251-5947
craig.lilly@bakermckenzie.com