Corporate Development Partner Program http://www.gtkpartners.com/contactUs.html
Key Attributes of the CDP Program
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Engagements can be structured to preclude GTK from working with companies that our client views as conflicts. This restriction can be extended beyond the term of the engagement.
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Time-based retainers Significant reduction in success fees and multi-deal discounts CDP can be turned on, off, or suspended at our client’s discretion
Conflict-Free
Economy and Flexibility
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Efficiency abd Effectiveness
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Alignment
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GTK focuses on using executive time efficiently, minimizing attention taken away from operations Our experience allows us to help management better assess transaction actionability, avoiding “wild goose chases” Banker-assisted contact elicits more serious/favorable target response. GTK has a technically deep and user-friendly demeanor which is appreciated by targets
Clients who have experience working with larger banks appreciate that GTK has a “look and feel” is consistent the larger banks
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GTK is Flexible in its Role as Advisor CDP fees consist of a time-based retainer (typically quarterly or sometimes monthly) and potentially a success fee based on the situation. We want our client to have a comfortable and open relationship with GTK. As such, some or all of the following working relationships can be accommodated: §
GTK as M&A Advisor
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GTK as M&A Manager
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GTK as Partnership Advisor
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No M&A Role for GTK
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GTK provides full outreach, origination and execution services This is similar to typical banking arrangements Fee beyond retainers: a reduced success fee Substantial multi-deal discounts For M&A deal execution, GTK serves as an “in-house” agent for managing and coadvising with another bank This is for when our client wishes to hire an additional advisor, e.g. on a large transaction Fee beyond retainers: a portion of the success fee paid to the other advisor GTK can serve as “in-house” agent responsible for executing any partnership, investment or business agreements This is for when the outcome is not an acquisition, but our client would like to benefit from GTK’s knowledge of the situation and execution help Fee beyond retainer: enhanced retainer, no success fee GTK will step aside to allow for internal execution For example, on a small acquisition our client may choose to economize by executing the deal itself Fee beyond retainer: No success or a small, flat payment
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What We Offer CDP engagements are structured to enable flexible long-term use of our services. Areas of assistance include all or a subset of the following Outreach & Prioritization § § § §
Work closely with you to identify and prioritize targets Identification of target decision makers and decision-making criteria Develop approach and process strategy Act as your proxy to minimize your time investment during preliminary stages
Valuation & Consequences Analyses § § § §
Assistance in evaluating and modeling Standalone valuation and drivers Synergies valuation and drivers Pro forma financial, valuation and path-to-liquidity consequence analysis
Process Assistance § § §
Organization of diligence teams and subject matter Broad role in managing diligence process including internal team Management of certain external advisory teams (e.g. legal, accounting) including other bankers
Structuring & Negotiation § § §
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Drafting of term sheets, including non-financial terms (e.g. retention) Assistance with drafting and negotiating definitive and ancillary agreements Input on financing terms
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FCI Case Study: A Bain Capital Portfolio Company The Situation
The Solution
The Outcome
§ FCI, a $2 billion revenue Versailles, France-based manufacturer of electrical interconnect products, operated four primary business units that develop products for the automotive, electrical power and utility, micropackaging, consumer electronics, data, and communications industries
§ GTK structured an engagement which provided FCI the ability to flexibly add to their corporate development program with highly experienced bankers. The engagement included:
§ GTK assisted FCI in the evaluation of about 70 potential targets, generated over 17 acquisition opportunities where a formal sale process had not been initiated, resulting in 8 formal acquisition offers and three completed buy-side transactions
§ In August of 2005 FCI was acquired by Bain Capital Europe for $1.3B. By late 2006, FCI had decided that it would actively seek acquisitions § GTK Partners was hired to aggressively and proactively pursue mid-cap, bolt-on, acquisition opportunities
§ Time-based retainers and significantly reduced success fees with multi-deal discounts § Flexibility in time/cost balance of engagement § GTK restricted from pursuing competing business/dialog during and after engagement § GTK helped to execute a broad buyside initiative over a six year period. Throughout the engagement GTK provided: § Early and deep banker input on the target list, including input on actionability and prioritization § Outreach, process management, and due diligence
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§ GTK remained engaged by FCI through a period in which significant divisions were divested
FCI Case Study: Engagement History GTK’s relationship with FCI has spanned six years and a severe economic downturn. The flexibility inherent to GTK’s CDP has allowed FCI to leverage GTK’s dynamic range in terms of target sizes, transaction structures, roles and responsibilities, while retaining the institutional knowledge gained through a well established working relationship.
Sept ’06 to Sept ’08 • GTK evaluates over 45 targets in varying levels of detail • Regularly communicates findings and status to FCI corporate • Generates 15 real acquisition opportunities for FCI
Bain Capital Acquires FCI
Scope Broadened • Scope broadened to accommodate a growing list of targets • Revisit many of the targets previously evaluated
GTK Engagement put on Hold
Aug 2005
Sept 2006
Sept 2008
GTK Retained by FCI • Aggressive pursuit of domestic assets related to the EPI division and sporadic pursuit of domestic assets for the ELX division • Collaborative effort with existing FCI corporate development staff, based in the US and France, to identify potential targets • Typical target profile included family owned / closely held businesses and private equity owned assets
Jun 2009
GTK Engagement put on Hold
Oct 2009
2010
FCI Divests EPI Division to Hubbell GTK Reengaged to Assist ELX Division
Oct 2011
2012 thru early 2014
FCI Divests MIC Division – Ali Tabibian Co-advises GTK Reengaged to Assist ELX Division
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FCI Case Study: GTK’s Dynamic Range Number of Targets Contacted
69
Target Type
Target Value Range
§ 3 public
§ $200MM+: 3
§ 9 PE-owned
§ $100-200MM+: 3
§ 57 founder/family owned
§ $25-100MM: 48 § <$25MM: 15
Products and Market Segments
Furthest Stage of Pursuit
§ 10 product segments
§ Closings: 3
§ 5 end markets
§ LOI: 13 Active Time Periods Under Same Engagement § Late 2006 thru 2008 § 2010 § Early 2012
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§ Diligence: 25
Continued
Case Study: GTK’s Dynamic Range FCI has leveraged GTK’s dynamic range across various sectors, end markets and transaction sizes. Targets in approximately ten different product categories and five different market segments were pursued. Mix of Targets Evaluated by GTK
Target Type
Public Corp
PE Owned
FCI
GTK
Icon size represents transaction size, triangles show FCIidentified targets, circles show GTK- identified targets
Family Owned
Reviewed
Diligence
LOI
Furthest Stage of Pursuit
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