MERGERS & ACQUISITIONS Specialists?

What defines and differentiates us as a Mergers & Acquisitions ("M&A") specialist? The answer lies in our focus, the level of education, training, and real world experience. We at CA understand business, maximization of value, and positioning having worked with over 1000 client companies.

Lawyers and accountants as such will on occasion offer M&A services to their clients. In our experience, however, these arrangements are too often burdened by inherent conflicts of interest and the obvious problems of part-time vocation and attention. We think that selling or buying a business is simply too important to accept these risks. Even though lawyers or CPAs are a critical component of any transaction, the entire focus of our relationship with a client business oriented; it is the sale of their business or the acquisition of another company and the underlying value from an operating owner’s perspective.

Business brokers, while similar, serve a different market from M&A specialists. The former tend to focus on much smaller, less complex and local retail oriented transactions, while M&A specialists concentrate on assisting clients with the sale or acquisition of mid-sized or middle market companies to or by more sophisticated concerns.

The firm's investment banking division structures and manages business transactions for business owners covering a diverse spectrum of industries. Deal transaction size at CA is generally from $1 million to $25 million. Strategic affiliations are maintained in major business and financial centers to provide access to capital, assist in the national or international marketing of selected companies, and to broaden the range of services available to our firm's client's.

MERGERS:

Clients may expand their business position by enlisting a strategic partner in a joint venture or merger. The specific benefits of this fusion may include capital injection, marketing resources, production capability, increased distribution or new product development. The method of business for a merger or joint venture is unique, developing according to specific needs.

ACQUISITIONS:

Acquiring a Company

What is Involved?

Corporations, institutions, private funds, and substantial investors are represented in acquisitions. The scope of CA's activities includes jointly developing acquisition criteria and potential targets; as well as initiating contact, conducting early stage diligence, negotiating offers, reviewing closing documents, and assisting to establish optimum financial and deal structures. This is a sensitive process as rarely are any of the target companies for sale at the time we make our initial approach.

The objective of this program is to provide our client a professional acquisition search often cloaked in the anonymity afforded by the introduction of CA. Our concentrated efforts yield timely cost effective results that would otherwise often elude clients through their normal channels and time constraints. Potential targets are identified and approached to establish potential interest and pre-qualify potential transaction value and structure.

BUSINESS ASSESSMENT

The qualified CA Consultant assigned   to   the   Assessment   Phase  will perform   the    following   scope   of   work:

• Obtain a credible, positive working relationship with the client and all appropriate senior management personnel.
• Obtain a working knowledge of the client's business history, processes, components, management, organizational structure and functionality.
• Establish, quantify, qualify and document their short, medium and long - term acquisition objectives. This will entail establishing the transaction target price of said acquisitions and determining whom (if any) businesses they have tried to acquire in the past, relevant geographical limitations, and what business they believe would be the best fit to acquire in the future.
• Review a minimum of four years of financial performance data, corporate structure/status, products or services, and existing customer market.
• Perform the necessary due diligence to establish all positives and negatives involved in the client's business operation including identification, classification, and categorization of any impediments to acquiring and merging with other targeted companies and/or businesses.

CLIENT PROPOSAL

Upon completion of the Assessment Phase CA  produces a customized acquisition strategy proposal document. This Proposal will outline the following for the client's review and approval.

• • Documented company history, ownership and general operations and management description and organizational structure.
  • C A's customized (client specific) strategic plans for business acquisition.
  • Business acquisition time line parameters. (The acquisition process generally requires a minimum of approximately 180 days to close a transaction.)
  • The program requires from four (4) to five (5) days on-site depending upon the client size and scope of the business(s) and then five (5) to ten (10) subsequent days offsite.
     

ACQUISITION IDENTIFICATION and CLOSING

The CA Consultant will identify and sort possible acquisition leads from the 300,000 + CA business database, investment banking affiliations, industry sources, and CA professional network. Once identified, approach and determine potential interest and synergy of acquisition targets. This often includes a face to face meeting with these qualified acquisition targets at their place of business to determine the final qualification/fit with the acquiring company. This meeting and/or subsequent meetings will also entail performing the primary due diligence to the target acquisition business/company for the firm's client. Prior approval will be obtained from the client prior to any site visits to targets. Following due diligence our consultant negotiates terms of a preliminary non-binding letter- of- intent to purchase. This is followed by introductions of all qualified targeted acquisition possibilities to our client and further negotiations to close the transaction.

The programs cost is dependent upon the time dedication and specific consultant skill set required. This is determined by targeted acquisition size, business type, multiple locations, and the availability and accuracy of the target's historical information and the degree of required due diligence. Our fee range is $180 to $225 per man hour, plus expenses and a contingent success fee for each closed transaction. A minimum engagement retainer of $7,500 is required. The retainer is a fully refundable draw against all acquisitions costs incurred by our firm. The retainer account will be levied by actual invoiced hours on a weekly basis. Whenever the client's retainer balance falls below $1,000, it is refreshed by the client in increments of $5,000 for the duration of the engagement. As with all our firm's engagements, our involvement is day to day at our client's discretion. Should any client suspend any engagement the outstanding retainer balance is returned to the client. Weekly progress reports and client invoices will be submitted to the client which state what has been accomplished that week, the charges incurred and the balance of their retainer account. All fees paid to CA from this retainer will reduce the success fee assessed said client upon securing a company for acquisition.

As in all CA - M & A projects the success fee is due and payable when and only when a transaction is closed and is based upon a graduated Lehmans compensation schedule of:

7% of first million dollars of gross amount of transaction.

6% of second million dollars of gross amount of transaction.

5% of third million dollars of gross amount of transaction.

4% of fourth million dollars of gross amount of transaction.

3% of all amounts thereafter.

Cumulative hourly billing received prior to the transaction closing (excluding the original assessment fee and all expenses paid) will be credited to the client against any residual success fee due at the transaction closing and reflected on the final invoice.

BENEFITS PROVIDED

Our firm's experience and expertise in the mergers and acquisition business provides to our clients a proven results oriented process which includes:

Identification and documentation of company and personal short, medium and long-term acquisition goals.

Client specific and documented acquisition bench marks and time lines and time lines.

Precise acquisition specific due diligence.

Increased opportunity cost for our client as they are able to concentrate on their primary business during the acquisition search process.

Accurate and timely communications related to acquisition progress, both verbally and written to the client, prospects, other intermediaries.

CA's proprietary database which contains over three hundred thousand (300,000) businesses throughout the United States.

Our firm's national network of investment banking affiliations, industry sources, and service professionals.

Lower fees than most firms, for we do it more efficiently.

Peace of mind knowing that a CA acquisition professional is on your team.

Successfully closed transactions to maximize profitability and sustain growth.