White paper & service description. Authors: Doug Whipple / Bruno Wildhaber / Peter Bienert. Page 1. Forte Advisors AG. Headoffice.

Transcription

1 Forte Advisors AG Headoffice Glatt Tower Postfach Neue Winterthurerstr. 99 CH-8301 Glattzentrum Tel Fax M&A Services White paper & service description Authors: Doug Whipple / Bruno Wildhaber / Peter Bienert Office Germany germany@forte-advisors.com phone Fax Office USA Forte Advisors LLC 8300 Greensboro Drive Suite 800 Mc Lean, Virginia phone fax usa@forte-advisors.com Page 1

2 1 Customer Requirements M&A transactions are plagued by failures. By some estimates, over 50% of M&A transactions are primarily failures for the acquirers. The failures can be multiple. Failure to accurately assess technological, market, or product life cycle risks. Failure to integrate. Failure to spot product and human integration issues before the acquisition. Failure to accurately assess technological synergies. Failure to accurately cost the transaction. Failure to combine financial insight with the technological expertise. In most transactions, there are multiple players compiling, reviewing, and analyzing multiple layers of information, oftentimes with different players processing the same information for different reasons. The acquirer is usually responsible for integrating the information into a complete picture and the seller often does not have sufficient M&A experience to comprehend acquirer motivations and concerns. But acquirers and sellers often don't have the resources to devote to total informational integration, are often not generally well-equipped to integrate M&A information in the most efficient and useful manner, and in many instances lack the technological expertise necessary to make informed judgments about technology acquisitions or value propositions. Forte can significantly reduce the likelihood of failure. Forte assembles a team of its partners that applies expertise integration in mutually ironed-out and separately-costed phases, allowing you to control the costs. Throughout the process, the Forte integrated team intertwined with Forte process technology keeps you on a strong foundation that, through transparency, enables you, the decision-maker, to rapidly and assuredly make decisions at any point in time during the M&A process. You will no longer feel overwhelmed, behind the gun, under-supported, in the dark, or unable to see the trees for the forest. Forte will help you get to clear sight, clear mind. Page 2

3 2 Process 2.1 Overview Page 3

4 Forte will assist investors or investment targets throughout the acquisition or sales process. The chart depicts total existing and planned service offerings. Green indicates areas of service where forte has sufficient existing skill sets and expertise to provide the services now. Yellow indicates areas of service where forte could contribute by combining services with other service companies. Red indicates areas of service where forte would require the acquisition of additional skill sets and expertise in order to provide the services. 2.2 Service Entry Points The following is a description of the services, expertise, and skill sets for each service entry point. 1. Acquiror Strategic Acquisition Goals. This represents the earliest point at which forte could offer services. Here, forte would assist the investor to build a strategic business development plan, or to review and update an existing plan. At the same time, forte could assist the investor to establish governance controls throughout the strategic process, ensuring that the inputs of the various business groups/interests are properly weighted, transparent, and integrated. While forte has existing expertise and skill sets to perform this service, the entry point is a difficult one, since most companies at this stage would not bring in a consultant. By providing later stage services, forte would be able to then highlight to the customer the value of earlier stage services. 2. Acquiror Define Risk Appetite. As part of the overall strategic business planning process, forte would assist the investor to determine its risk appetite, defining what are acceptable and unacceptable risks, as well as the risks falling between them, and then proceeding to measure the risk appetite against the goals, thereby helping the investor to determine whether an acquisition mindset is even the right one for the investor at this point in time. 3. Acquiror Identify Targets. Once the business development plan and governance processes are in place, forte would assist investors in identifying candidate companies and technologies that fit the plan and risk appetite profile. To provide this service, forte would need additional expertise and skill sets, including companies databases and researchers. Page 4

5 4. Acquiror Evaluate Alternative Opportunities. This service entry point would occur once a candidate or candidates have been identified, and the investor would like some assurance that the candidate acquisition is the best alternative. Here, forte would assist the investor to identify alternatives, and evaluate whether the alternatives fit within the risk appetite profile and the business development plan. To provide this service, forte would need additional expertise and skill sets as those required in identifying targets. 5. Acquiror and Target - LOI. At the point where acquiror and target have entered into discussions, forte would assist the acquiror investor to ensure that the LOI tracks the acquiror's risk appetite profile and allows appropriate exit upon discovery of business risks that change the fit with the profile or the transactions costs. For the target, forte would assist the target in ensuring that the LOI reflects the target's goals, including reasonable business assurances that the transaction will be successful for both sides, and that, where equity is a form of payment, the acquirer's value is reasonably related to the equity price. 6. Acquiror and Target Due Diligence. At this entry point, forte would provide due diligence governance, oversight, and integration for the acquirer investor or the target. By putting governance procedures in place, forte would ensure that the decision makers have at their disposal throughout the due diligence process the information transparency needed to input due diligence results into the business development and risk appetite analysis, and ensure that potentially disruptive internal interests do not result in incomplete or distorted profiles of the overall transaction. Forte would also assist the investor or target in integrate the due diligence information so that the investor has and maintains an up-to-date profile of product/services fit and life cycles, integration risks, transaction costs, and key knowledge resources. 7. Acquiror and Target Due Diligence Analysis. Once the due diligence is complete, forte would enter to assist decision makers by reviewing and analyzing the business case being presented by internal interests, and provide a report to the decision makers on the process. The report would include recommendations on changes to deal and financial structure that would seek to align the transaction with the business development plan, risk appetite profile, and integration goals. 8. Acquiror and Target Pre- and Post-Closing Integration Maximization Here, forte would assist the decision makers to establish and maintain internal governance and control that would best achieve the projected costs, Page 5

6 benefits, and synergies leading to the closing and post-closing integration. These systems and processes would provide ultimate transparency and responsibility reporting to those who ultimately face the risk of failure. 3 Skillset and experience of partners All projects will be managed under the direct responsibility of a senior partner of forte advisors, who will constantly be present and personally involved in the project. All partners of forte advisors contributed years of experience in the area of M&A in different roles:! 15 years of experience as international legal counsel on buy side and sell side for transactions up to 500 Mio USD! 10 years of experience as member of the supervisory and/or executive board responsible for the selection of appropriate targets, their valuation, contract negotiations und port merger integration! International personal experience of partners in transactions in the US, in the UK, Germany, Switzerland and central Europe.! Personal experience of partners in the numerous IPOs as a member of the management and/or supervisory board or as a member or as member of the legal counsel team! Personal involvement of partners within numerous start-up or venture investments in the field.! 20 years of experience in corporate development for highly innovative companies ranging from five to 1000 employees.! Personal experience in the proper management of a product development lifecycle methodology ensuring the proper use of proceeds in innovative companies Page 6

7 4 Vertical markets and market expertise Focusing on the markets for media, communication and information systems, the partners within forte advisors are specifically experienced in the following industry and product areas: Information technology! IT service providers and their business model, specifically in the field of individual software system development, the development of individual solutions and development of solutions based on standard platforms in the area of team productivity, personal productivity, such as collaboration, communication and portals software product development.! Software product vendors, specifically in the field of service oriented architecture, team productivity, personal productivity among intelligent systems, agent technology, information retrieval, security systems, identity and access management systems, authentication systems, software development support systems, portfolio management systems.! IT business consultants, specifically in the field of the demand - management, business process modelling, software lifecycle management, portfolio management, IT governance.! Application service providers and their business models. Telecommunications! Providers for add-on an integrated services in mobile communications, specifically location based services, media integration, voting platforms, unified messaging.! Software product vendors, specifically in the field of server systems for mobile add-on services, handheld device and mobile phone software systems.! Hardware / Software vendors for end-user platforms combining media and telecommunications services, such as set top box systems, TV cable based web access.! Hardware and software vendors within the professional production market, specifically digital audio and video, IT and IP based media production and delivery systems mass storage and archiving, production process integration, transmission systems.! Hardware and software vendors for the end consumer and consumer electronic market, specifically manufacturers of television sets, DVD players and Page 7

8 other media platforms, end user platforms for the integration of telecommunications, media and information technology (triple and quadruple play)! Service providers for the delivery classical media content across classical media distribution path, for the delivery of add-on services for classical media across the Internet, mobile platforms or end-user devices, for the delivery of next generation integrated services of any kind.! Service providers offering platforms for the delivery of third-party content across the Web or across classical media distribution path. Contact: Forte Advisors AG Headoffice Glatt Tower Postfach Office Germany phone Fax Neue Winterthurerstr. 99 CH-8301 Glattzentrum Tel Fax Office USA Forte Advisors LLC 8300 Greensboro Drive Suite 800 Mc Lean, Virginia phone fax Page 8 Forte M&A Service 1.0