Mergers, Acquisitions and General Business Brokerage

Introduction

     C.J. Harris and Company, LLC brings an integrated approach to representing the sale of a client's business or closely held company. The firm's expertise in mergers, acquisitions, and general business brokerage, combined with its preeminence in research and market making provides clients with a broad range of resources. C.J. Harris and Company, LLC's direct access to the latest information on mergers, acquisitions, and general business brokerage makes the firm uniquely qualified to act as financial consultants in the above matters.

Approach To The Sale

     The process by which sales to third parties are accomplished is affected to a greater or lesser extent by timing considerations on the part of the company and breadth and intensity of the marketing effort required. Where customer and/or supplier relationships are important, or where employee morale is a key ingredient to the success of the operations, it may be necessary to maintain a very low profile in the marketing program. Where the operation is a very specialized one with limited appeal, a relatively small number of potential buyers may need to be contacted. In other circumstances, it may be necessary to mount a broad-scale campaign and publicize the marketing program to the extent discretion will allow.

     As a result of our extensive experience and our involvement with transactions extending from small family-held businesses to mid-size closely held corporations, we have developed what we believe to be a logical and efficient approach to a relatively complex process. By segmenting our analysis into definable subparts, we seek not to oversimplify the necessary complications and subtleties involved in the sale decision, but to identify at early stage potential problem areas and those real issues, which must be resolved before a satisfactory conclusion can be reached. While it is certainly not our role to make the actual decision to sell, for that is clearly a business decision, we have found that time is well spent in the early stages to fully understand the objectives of a sale and the yardsticks by which success will be measured is well invested.

Marketing Strategy

     The key to any individual sale program of a business or closely held company is the flexibility to react to market conditions, with the objective of maximizing value to the seller. Accordingly, the following marketing strategy is intended only to be indicative of how C. J. Harris and Company, LLC would approach the sale assignment.

1. Definition of Objectives: C. J. Harris and Company meets with ownership to discuss timing considerations, management and employee issues, customer/supplier considerations, and other such factors associated with the operation. Given the company's specific objectives and a basic understanding of the needs, C. J. Harris and Company explores alternatives and may at this point be able to suggest a preliminary marketing strategy.
   
   
2. Preliminary Valuation: C. J. Harris and Company meets with management and tour facilities to better understand the business, operations, properties, and financial condition. C. J. Harris and Company reaches preliminary valuation conclusions regarding the business or company based on:
   
   
   1. a review and assessment of the strategic position of the business or company;
   2. financial analysis of historical and projected operating performance;
   3. review of relevant sales transactions.
   
   The preliminary valuation conclusions, while subject to verification by the market- place, will serve as a yardstick throughout the marketing process.
   
   
3. Structure the Offering: C. J. Harris and Company, LLC structures the offering so as to maximize the obtainment of ownership's objectives.
   
   
4. Develop the Marketing Plan: C. J. Harris and Company, LLC develops the final strategy for marketing effectiveness.
   
   
5. Preparation of Marketing Information: C. J. Harris and Company works with the seller to draft marketing information, which is ultimately circulated to prospective buyers. The marketing information would describe all aspects of the business or company, including: business history, business strategy and growth opportunities, competitors, customers, suppliers, historical performance, research, development, and engineering, patents, trademarks and licenses, and facilities.
   
   
6. Solicitation of Potential Buyers: C. J. Harris and Company contacts individual investors and senior management of potential buyers. Prospective buyers who express an interest in the business or company would be required to sign a confidentiality agreement.
   
   
7. Potential Buyer Interview: Approved buyers are allowed to meet with management, visit facilities and review supplemental information.
   
   
8. Distribution of Offer to Purchase: C. J. Harris and Company distributes the Offer to Purchase to the prospective buyer. To facilitate and control the response, C.J. Harris outlines what issues should be addressed in the offer. The prospective buyer is advised that substantial deviations from the form of contract will be taken into account by the seller.
   
   
9. Review of Written Offer: C. J. Harris and Company and the seller review the offer.
   
   
10. Final Contract Negotiated and Signed: Involvement of C. J. Harris and Company in negotiations could be direct or advisory. In our experience, the use of an intermediary as the seller's representative may avoid the development of polarized positions, which may sometimes occur during the intensity of the transaction. In either case, our advice and assistance in analyzing various proposals and suggesting appropriate alternatives are always available.
    
    
11. Potential Buyer Due Diligence: After the offer to purchase has been agreed to by buyer and seller, the buyer is allowed a period of time to verify financial information, which may include confidential material considered too sensitive to be included in the initial marketing effort.
    
    
12. Closing: Once negotiations have been completed, and the due diligence period has elapsed, consummation of the transaction often involves lengthy and time-consuming documentation and other procedures related to closing conditions. There will often arise one or more business issues which have not been resolved in the basic agreement. C. J. Harris and Company's role at that point would be to affect an expedient resolution, to monitor the overall process and to ensure that a satisfactory conclusion is reached.