1. Exit Options & 5 Ways to Maximise Exit Value
Eddie Harding
ICON Corporate Finance
Workshop A3: Exit Options &
5 Key Ways to Maximise Exit Value
Venturefest - 3rd November 2011

2. Exit Options
Ultimately depends on what you want to achieve?
• Trade Sale Extract Value
• Management Buy-Out/Buy-In (MBO/MBI)
• Partial Sale
• Own Share Purchase
• IPO/Flotation
Retain Interest

3. 1. Planning for Exit
• Timing / Valuation expectations
• Build and incentivise second tier management
• Housekeeping checklist – accounts, audit, formalise/renew
contracts, patents, IPR, systems & processes, disputes
• Grooming e.g. remove „non-business‟ assets & expenses,
increase public profile (website, PR)
• Advisers (legal, tax and corporate finance)
• Highlight Principal Attributes – “Value Enhancers”

4. Value Enhancers - Driving the Multiples
• Principal Attributes to increase your Value:
‐ Scalability
‐ Quality of Earnings - recurring revenues (e.g. SaaS)
‐ IP Protection/Barriers to Entry
‐ Customer base (individual dependencies)
‐ Market growth and market sentiment
‐ Customer growth
‐ Underlying earnings
‐ Market positioning (stand out from the crowd)
‐ Quality of management team

5. Budget enough Time & Deliver the Business!
Month
0 1 2 3 4 5 6
Appoint Specialist Advisers
Prepare Information Memorandum
Research Targets
The Approach
Conference Calls/Meetings
Negotiations
Indicative Offers
Due Diligence
Final Offers
Tax
Legals
Completion
Managing the Business

6. 2. Identifying Strategic Acquirers
• “Strategic Fit”
• Identifying Synergies „1+1=3!‟
• Existing contacts
• Competitors
• Researching Complementary sectors
• The greater the „fit‟ the higher the multiple

7. Research Complementary Sectors
HR Software
Direct Competitors ERP Solutions
Employee Incentive
Compensation Software
CRM Products Marketing Organisations
Sales Performance
Management / Business
Intelligence

8. 3. Generating a Competitive Process
• First offer is rarely the best offer!
• “Competitive tension” to create valuable leverage
• Indicative Offers – N.B. do NOT volunteer price!
• Shortlist
• „Mini Due Diligence‟
• Final Offer deadline

9. 4. Assessing Bids & Comparing Offers
• Consideration - various types:
- Cash
- Shares / loan notes
- Earn out / deferred consideration
- Net Asset or Working Capital adjustment
• Conditions & constraints – warranties, „non-compete‟
• Deliverability – authority, funding
• Culture / trust / behaviour
• Highest offer is not necessarily the best offer

10. 5. Avoiding the Bear Traps
• Beware “price chippers”
• Transparency – detailed IM & pre-offer DD
• Minimise exclusivity period
• Detailed Heads of Terms
• Take due diligence seriously
• Positive news flow / meet your forecasts!

11. Summary - Don‟t Forget
• Trade Sale is best way to maximise value on Exit
• Time your run
• Plan ahead! - get your house in order
• Create and maintain competitive tension
• Make sure you meet forecasts during the process
• Negotiation never stops
• Maximise cash at completion

12. Contact
ICON Corporate Finance
53 Davies St 5 Kings Court
London Little King Street
W1K 5JH Bristol BS1 4HW
Eddie Harding
Tel: +44 (0) 207 152 6375
Mob: +44 (0)7775 997 409
e-mail: eddie@iconcorpfin.co.uk
Website: www.iconcorpfin.co.uk

13. ICON – Fast Facts…
Global Network
 Leader in Technology Fundraising and M&A
Strong personal relationships
 Total focus on maximising value for our clients throughout our global network to
facilitate international transactions
 Advise clients from Start-up to Exit
 Closed over 180 deals in M&A and Fund Raising
 Long established and very experienced team
Other Specialists in ICON’s Network
 Excellent Relationships across international VC and Private Equity market
• Tax
 Excellent relationships across the global M&A market
• Legal
 Global reach – 8 of last 10 exits were cross-border deals • Due Diligence / Forensics
• Debt Management
 Highly success orientated and independently owned • Wealth Management
 2011 Winner – Dealmakers Global Awards - UK Corporate Finance Firm of the Year
 2010 Winner – Finance Monthly Corporate Finance Firm of the Year
 2010 Winner – International Finance Corporate Finance Firm of the Year
 2009 Winner – M&A Awards Corporate Finance Boutique of the Year
 2009 Winner – Real Deals BVCA Corporate Finance House of the Year
 2009 Runner-up – EVCA European Financial Adviser of the Year
ICON is authorized and regulated by the FSA, and is a member of the British Venture Capital Association and Institute of Chartered Accountants England and Wales 13

14. Testimonials
Peter Colson
Founder, Lalpac
“We are delighted with the outcome. We appointed ICON after a thorough review of
potential advisers and would not hesitate to recommend them. They added
considerable competitive tension to the deal, which increased value for shareholders
despite the background of public sector spending cuts and the added complexity of
an OFT Review”.
Justin Goatcher
Managing Director and Founder, Avisa Aviation
“ICON ran a global sales process, which yielded the very best outcome for AVISA’s
shareholders. We are a global business and it was important for us to appoint
advisers with international reach. They ran a slick process which achieved a healthy
competitive deal - all to timetable from appointment to completion. They are
certainly a team you want on your side when selling your business, I wouldn’t
hesitate to recommend them”.
Larry Dale Ursich
MD, Insurance 4 Car Hire
“We were very impressed with ICON, their corporate finance tactics added
significantly to the value of the deal. Nigel, Maureen and myself are very pleased
with the results and thanks are not good enough for our gratitude, but once again
thank you, it would never have happened without your help.”

15. Example Contents : Information Memorandum
1. EXECUTIVE SUMMARY 4. CUSTOMERS
1.1 Introduction/Background 4.1 Overview
1.2 Brief History
1.3 Principal Attributes 5. MANAGEMENT AND ORGANISATION
1.4 Financial Summary 5.1 Ownership
1.5 Reason for Sale 5.2 Organisation Chart
1.6 Opportunity for Strategic Acquirer 5.3 Key Personnel
1.7 Key Investment Considerations 5.4 Employees & Key Skills
1.8 Timetable and Process 5.5 Staffing
5.6 Premises/Office Location
2. THE BUSINESS
2.1 The Market 6. FINANCIAL INFORMATION
2.2 Sales & Marketing 6.1 Historical Financials
2.3 Ownership Structure 6.2 Financial Forecast
6.3 Balance Sheet
3. PRODUCTS & SERVICES
3.1 Products
3.2 Services