REPORT: WORDS HEARD AND OUR TAKE What: Selling Up, Selling Out: A Conference For Software and IT Firms Where: Chateau Laurier Hotel, Ottawa Ontario Who: Corum Group Ltd. with the support of the Ottawa Software Cluster www.ottawasoftwarecluster.ca Bruce Milner President Ward Carter EVP Both have founded and operated software firms before becoming active in software/IT mergers and acquisitions. When: April 7, 2005 Title: Selling Up Selling Out: What was said: The presenters covered the five basic steps involved in a merger/ acquisition: How to Prepare Your Company: internal due diligence, research and presentation Valuation: methodologies Structure: Letter of Intent (LOI) the end of the beginning Negotiation: LOI to closing definitive agreement and due diligence Integration: making it work, the neglected step which accounts for much of the dismal failure rate, 75%. A reasonable time frame is 180 days from start of engagement of Corum to close broken down as follows: 30 days preparation to initial contact with buyers; conference calls and buyer visits 60-90; preliminary negotiation, day 100; draft LOI, day 115; finalize and sign letter of intent, day 125; due diligence, draft definitive agreement, and close, day 180. Quote To Note: Nothing good ever happens between signing the LOI and the close. Acorn Partners Two cents worth: Our interest is in firms that are built to last and provide investors continuing income in exchange for early stage support. Nonetheless, Bruce and Ward convinced us that there will be instances where selling out to others in one form or another creates more wealth for the entrepreneurs. Holding on can actually deplete the wealth that has been created under some scenarios, e.g., an industry consolidation or the intrinsic nature of the produce is such that customers want it from a larger trusted supplier. While the thrust of the conference was on selling out to others, e.g., mergers or acquisitions, much of what was said struck us as applicable to founders who wish to sell out to employees, a particular form of recapitalization which is one of the selling out options. Even if you are not thinking of selling out in the near future, attending the seminar via a webinar would provide real value in orienting your business to be a better one. In person attendance has the benefit of peer to peer commentary as always. Corum did something unique which greatly enhanced the value of the attendee's time at the session. Corum orchestrated individual sessions between one of those attending and Bruce or Ward while the other took us through a module. 708-350 Sparks Street, Ottawa, ON K1R 7S8, t: (613) 563 4588, f: (613) 563 4689, ourtake@acornpartners.com, www.acornpartners.com If you wish to unsubscribe, reply to this email with "unsubscribe" in the subject.