Keynote Presentation for the CEO Summit 2019. There is a natural dilemma in every M&A deal. On one side, the seller wants to earn a premium. On the other side, the buyer wants to get a bargain. How can both sides be happy if selling high and buying low are the same price? The trick is getting everyone on the same side. Let us show you how... #CEOSummit

1. Deal Killers
An Adman’s Take On M&A

2. Are you
ready to
sell your
business

3. You want a premium…
Sell Side
Entrepreneur
SELL
HIGH

4. … they want a bargain
Buy Side
Enterprise
SELL
HIGH
BUY
LOW
Sell Side
Entrepreneur

5. How can both sides of a deal be happy?
SELL
HIGH
BUY
LOW=
Buy Side
Enterprise
Sell Side
Entrepreneur

6. Get everyone on the same side…
Where the
Entrepreneurs
Started
Where the
Enterprise
Can Grow
Buy Side
Enterprise
Sell Side
Entrepreneur
SELL
HIGH
BUY
LOW=
… break down deal breakers
before they kill your deal

7. How do
you get the
deal you
desire?
1. What do you really want
2. What do they really need
3. How can helping them help you

8. What do
you want1

9. 10 Key Term Sheet Issues
1. Deal Structure
2. Cash Versus Equity
3. Working Capital Adjustments
4. Escrows & Earn-Outs
5. Representations & Warrants
6. Target Indemnification
7. Joint & Several Liability
8. Closing Conditions
9. Anti-trust/ Timing Issues
10. Non-Competes & Non-Solicits
Source: Shannon S. Zollo & Mary Beth Kerrigan, M&A Today (August 7,2012)
http://www.mbbp.com/news/issues-in-ma-transactions

10. Why are you selling the business now?
1. Be clear about your value
How much do you think you’re worth?
2. Prioritize your values
What are you willing to trade off?
3. Amplify what makes you valuable
How can we prove you are worth what you think you’re worth?

11. Deal Killers: DIY ‘Palengke’ Approach
Photo Credit: https://www.china-mike.com/china-travel-tips/bargaining-tips/
1. Asking for double of what you actually want
Selling your business is not the same as haggling at a bazaar
2. Pushing the deal before being ready
First Impression = One Chance
3. Not knowing your numbers
Don’t expect a billion dollars without knowing your balance sheet

12. What do
they want2

13. 20 Key Due Diligence Activities
1. Financial Matters
2. Technology/ Intellectual Property
3. Customers/ Sales
4. Strategic Fit with Buyer
5. Material Contracts
6. Employee/ Management Issues
7. Litigation
8. Tax Matters
9. Antitrust & Regulatory Issues
10. Insurance
11. General Corporate Matters
12. Environmental Issues
13. Related Party Transactions
14. Government Regulations/ Filings & Compliance
15. Property
16. Production Related Matters
17. Marketing Arrangements
18. Competitive Landscape
19. Online Data Room
20. Disclosure Schedule
Source: Richard D. Harroch & David. A. Lipkin, Forbes (Dec. 19, 2014)

14. Why are they in the market?
1. A bigger topline
Customers, Contracts and Contacts
2. A better bottomline
Scale, Supply Chain, Strategic Fit
3. A boost in their headlines
Personal Pride / Public Perception

15. Deal Killers: Skeletons in the Closet
1. Hiding problems and hoping the buyers don’t notice
Surprises ➔ Doubt ➔ Deductions in Valuation
2. Telling only half the story
Full context lets your Advisors prep
3. Changing the story halfway through
It can unsell what has already been sold

16. How can we
help them
so it
helps you
3

17. The Gravitas Prime Transaction Cycle
Assess
Client Viability
Invent
Strategic Opportunities
Invite
Relevant Targets
Present
A Prime Proposition
Contract
Aligned Agreements
Produce
Effective Actions
Measure
Impactful Metrics
Complete
Compelling Results
Source: Adapted with permission from Influence Ecology
Assess
Invent
Invite
Present
Contract
Produce
Measure
Complete
Every transaction moves through a cycle of
phases from Assessment to Completion.
Each phase has
a specific aim.
Each aim drives
a desired result.
Signed NDA & Mandate
Priority Target List
Scheduled Pitch
Acceptable Bids
Binding Term Sheet
Due Diligence Documentation
Key Closing Conditions
Financial, Social &
Strategic Post-Mortem
Completing the cycle drives
the successful deal.

18. Why do you need help with this?
1. Reach the Right People Right
Industry experience & investors insights
improves the odds of your deal’s success
2. Always Personalize the Pitch
But never take it personally
3. Foresight + Flexibility= Fortune
Everyone has a plan till life punches them in the face.

19. Deal Killers: Missing the Boat
1. Selling past your due date
Missed the market timing or after a steep decline in sales
2. Pushing half a brand
The more factions, the more value fractions
3. Aiming for the wrong audience
Convenience ≠ Relevance

20. A private advisory firm chosen by preeminent
businesses for their most significant deals.
Extensive Networks ➔ Opportunity
Access to our network of global connections,
enriches the net worth of your business.
Experienced Leadership ➔ Clarity
Accelerate growth and bypass barriers as we
navigate across various industries & geographies.
Executional Excellence ➔ Prosperity
Assure discretion and professionalism in achieving
your goals through a holistic integrated approach.
How can Gravitas give you the edge?

21. Thank you.

22. What will it take for your
next breakthrough?
Joseph de Leon | jdl@gravitasprime.com | www.gravitasprime.com
M&A Advisory | Capital Raising | Market Entry Partnerships
Photo Credit http://s2.photobucket.com/user/IsaganiZenze/media/aramsbsmakati.jpg.html

23. Joseph de Leon
Joseph de Leon is the Director for Venture Strategy at
Gravitas Prime. He is responsible for helping clients unlock
their full strategic value and expanding the firm's regional reach.
Before coming home, he played lead roles with the ad agency FCB
in the ASEAN & Greater China. An award winning strategist,
he’s helped build the business for leading brands globally.
In his free time, he is nurturing the next generation of
entrepreneurs as a founding member of Manila Angel Investors
Network (MAIN), an ambassador for Seedstars Global and the
Amazon’s first AWS Scout for the Philippines.
Joseph is a certified Six Sigma Blackbelt, an MBA from Emory
University, has pursued further studies in Finance at UP
Diliman, and he earned his BS Legal Management from Ateneo
de Manila.

24. Dedicated in loving memory of
Augusto L. de Leon
Director, Gravitas Prime
23 May 1935 – 13 January 2017

25. Discover how we can help take
your business to the next level…
Thank you
Joseph de Leon | jdl@gravitasprime.com | www.gravitasprime.com | +632 706 0835