The document discusses strategies for growing a business through acquisitions. It outlines the benefits of acquiring other companies such as gaining new talent, customers, and technologies. This allows businesses to exceed their organic growth rate. The document then provides details on identifying target companies, conducting due diligence, negotiating deals, and integrating acquisitions. It emphasizes the importance of proper planning, execution, and people integration for acquisition success.

1. “Growing your business through
acquisition”
325 East Paces Ferry Rd. Suite 1402
Atlanta, GA 30305
(404) 803-6959
www.inmanco.com

2. Organic Growth
• The normal growth you can expect from your business without
regard to acquisitions, mergers, strategic alliances, joint ventures,
etc.
• Rate of organic growth varies from industry to industry. Highest
growth in healthcare, outsourcing, technology sectors etc
• Growth rate for most businesses has slowed as economy has
become stagnant, customers have been acquired, etc.
• Little economic growth expected for several years
• Taking market share from competitors increasingly difficult
• Slow growth = reduced margins = flat shareholder equity

3. Growth through Acquisitions
• Includes acquisitions, mergers, strategic alliances,
joint ventures, etc.
• Presents opportunities to substantially exceed
rate of organic growth for most businesses
• Numerous opportunities as baby boomers retire
• Buyer’s market
• Attractive valuations currently
• Financing IS available

4. Why Buy?
• To obtain access to:
– Talent and expertise
– Distribution channels
– Relationships, new markets, products, etc.
– Technology
– Other
• Eliminate Competition
• Opportunity to quickly create value add
• Creates greater opportunities for key employees
• Can be used to resolve internal issues and conflicts

5. Typical Deal Timeline
• Preparation and planning – 30 days
• Identify targets – 30 days
• Contact targets, develop relationships- 30 days
• Pre LOI due diligence – 30 days
• Negotiate LOI- 10 days
• Due diligence – 30 days
• Legal documentation – 30 days
Total timeline normally 180 days+/-

6. How to identify Targets
• Trade Shows
• Suppliers and Vendors
• Industry relationships
• Customers
• Investment Bankers, brokers, etc.

7. Valuation Considerations
• Comparable RECENT transactions
• Discounted cash flow
• Public values
• Undervalued assets
• Understated liabilities

8. Deal Components
• Cash ( few all cash deals being done)
• Bank financing (2-3 X EBITDA)
• Seller financing (1-3 x EBITDA)
• Earn outs (attractive in some businesses)
• Employment/consulting/non compete
agreements (essential in ALL deals)

9. Key Business Ratios and Definitions used in
Acquisitions
• Operating Margin - REV/EBITDA
• Value/EBITDA
• Value/Revenues
• Debt/Equity
• Value/”Book” Value
• Working Capital - Current Assets less Current Liabilities
• Working Capital Ratio - CA/CL
• Return on Investment - Annual Income/Investment
• Debt Coverage - EBITDA/Debt Service
• Valuation Ratio - Enterprise Value/EBITDA

10. Basic Business Valuation Model
(000’s)
Earnings before interest, taxes, depreciation,
amortization (EBITDA) 3 yr weighted avg. $2,000
Multiple X4
“Enterprise Value” $ 8,000
Plus: Cash, equivalents, excess assets 2,000
Less: Long term debt ( 1,000)
Business Fair Market Value $10,000

11. Maximizing EBITDA for acquired companies
• Focus on core competencies and high margin
business
• Establish minimum returns on investment
• Benchmark against industry and peers (be
careful)
• Eliminate redundancies and excess costs
• Re-negotiate terms on existing agreements
(leases, etc.)
• Adopt incentive compensation plan(s) for key
managers

12. Other suggestions for growing value
• INSIST on annual AUITED OR REVIEWED financials prepared by CPA
• Redeem minority shares. Resolve shareholder issues .
• Avoid litigation
• Pay down debt
• Avoid extravagant Company “perks” ( boats, hunting lodges, tickets, etc.)
• Lead through example. Become a TQM company.
• Use background checks on new customers and new employees. Know customer credit
condition.
• Shop around (banks, suppliers, service providers, etc.)
• Relationships, relationships, relationships
• Eliminate employees not willing to play
• Create culture for growing shareholder value, profitability and team building
• Understand generational differences in employee motivation
• Encourage “out of the box thinking”
• Teach the difference between a sale and a profit
• Recognize that employees want to be recognized, want their ideas heard, want the business
to be profitable, and want to share in that success

13. Why acquisitions fail
• Lack of pre deal planning
• Poor execution and integration
– Failure to understand seller’s business
– Ignoring the “people” issues
• Poor due diligence
– Failure to understand the numbers
– Failure to recognize undisclosed problems
• Over paying
– Improper financial modeling
– Poor assumptions
– Failure to be creative in deal structure

14. The Acquisition Team
• Management of buyer AND seller
• CFO – to crunch the numbers and identify
redundancies
• CPA – to advise on tax, accounting issues
• Lenders – to finance a portion of sale
• Attorney – to prepare legal documentation
• Investment banker – to identify targets, negotiate
the deal, suggest structure alternatives, close the
transaction

15. Bill Inman
inman@inmanco.com
(404) 803-6959 or (904) 614-1438
Bill has served for thirty years as a trusted advisor to hundreds of private companies. His clients
have included some of America’s most prominent family businesses where he has negotiated hundreds of
transactions ranging in value from $5-$700 Million.
He has experience in the business products and service industries, healthcare and medical device,
information systems, retail, wholesale, distribution, manufacturing, construction, food and beverages,
logistics, and personal service industries. He has served as a speaker for numerous trade, academic and
executive groups on the subjects of mergers, acquisitions, strategic and family business planning and
growing shareholder value.
Bill began his business career as a CPA and tax manager with a major accounting firm. He joined a
Florida boutique investment banking firm in 1979 where he later became the majority partner and CEO.
He formed The Inman Company in 1996. From 2005-09 he was also a Partner in an international
investment banking firm.
He has been featured in the Atlanta Business Chronicle, the Florida Times Union, and the
Jacksonville Business Journal. His articles have been published in Florida CEO. He is a thirty-year member
of Rotary International and an nineteen-year member of Vistage, an international organization for CEOs.
He has served as a Director of several companies and is a founder of Springboard Capital, an early-stage
Private Equity Fund. Bill attended the Georgia Institute of Technology and received a BBA in Accounting
from Georgia State University. He has offices in Atlanta and Jacksonville, FL.

16. Past Engagements
• Advised a $2 Billion Private Food Company in the acquisition of a strategic target.
• Advised a $15 Million Housewares firm in the acquisition of THREE strategic targets.
• Advised one of America's most prominent families in the sale of their $65 Million Logistics business to a
NYSE company.
• Initiated the recapitalization of the nation's premiere frozen hamburger manufacturer in a $3 Million
placement of private equity.
• Initiated a $6 Million private equity raise for a rapidly growing medical device company.
• Advised an early stage cardiac device/Telemedical service company in a $20 Million sale to a public
company.
• Advised the shareholder of a $20 Million grinding tool machine manufacturer in a sale to a financial buyer.
• Advised a $70 Million dealer of logging equipment in a sale to a Private Equity Group.
• Advised a major NYSE US Food manufacturer in an acquisition of a Caribbean beverage Company.
• Consulted with an independent Pepsi-Cola Bottler on issues related to shareholder value and the
development of an exit strategy.
• Advised a $10 Million provider of services to the pharmaceutical industry in a sale to a Private Equity
Group.
• Advised an architectural firm in a sale to a strategic acquirer.
• Advised a $10 Million importer of stainless products used in the marine industry.
• Advised a $15 Million specialty retailer of high end sporting goods in a recapitalization.
• Advised a $5 Million information systems firm in development of an exit strategy.
• Advised a $20 Million software firm in the sale to a strategic buyer.
• Assisted a $50 Million family-owned construction company in an intra-family transfer of ownership.