Yours To DiscoverConference 2012

Growing, Buying or Selling a PCCWhat is your business worth?

Growing, Buying or Selling a PCCWhat is your business worth? … and to who?

Grow/Buy/Sell – The Owner’s Dilemma Introduction of Panelists Q1) The Art of the Deal

Structure & Process Q2) The Elephant in the Room

is VALUATION Open Floor for Questions

We ALL Sell - Eventually

• By Design– Retirement

• Westervelt, Career Canada College, CDI (the original), RCC

– Succession (e.g. Hank > Renee Herzing)

– Lifestyle Decisions & Orderly Business Exits• 50 New PCCs and exiting PCCs / Year

• By Necessity– ‘Fire Sale’– Bankruptcy

• Career Academy, Shaw College, OBC, Various TCAF Hits

• We eventually want to Exit on our Own Terms

Strategic Options

GrowthStatus Quo Sell/Transition

Organic Acquisition Private Equity StrategicMBO

Entrepreneurial Owners

Grow …. Buy ….. Sell

M&A GameThe Players

Buyers •Strategic vs. Financial (Private Equity)•Internal (Family & Management Teams)

Interme-diaries •Bankers & Investment Bankers•Business Brokers

Sellers •Accountants, Lawyers, Tax Advisors•Friends, Family, Shareholders

Our Panelists

• Richard Remillard – Canadian Venture Capital Association (CVCA) – Explain the overall nature of the financial markets (Venture Capital & Private Equity in specific)

• Trevor Gough– CIBC Mid-Market Investment Banking - Managing Director– Explain Bank Debt, Sub-Debt and Mezzanine Financing

• Jason Sparaga– Spara Capital Partners Inc. - President– Explain the role of Investment Bankers in Mergers & Acquisitions

• Jason Berenstein– Kilmer Capital Partners - Principal– Explain Private Equity and what’s important to them

Richard Rémillard• Executive Director, CVCA Canada’s Venture Capital &

Private Equity Association• Explain the overall nature of the financial markets • Joined CVCA in 2004 as Executive Director• Past President of RCG, a management consulting firm• Previously a VP at Canadian Bankers Association and

Special Assistant to the Minister of Finance• Sits on several boards & has taught at Concordia• Graduate of McGill & London School of Economics

• 1,800 members represent the majority of Private Equity companies in Canada• CVCA Members have over $75 Billion in capital under management• 3 major markets (Buyout, Mezzanine & Venture Capital)

Tel: (416) 487-0519rremillard@bellnet.ca

Trevor Gough• Managing Director, Mid-market Investment Banking• Explain Bank Debt, Sub-Debt and Mezzanine Financing• Joined CIBC Mid-Market Investment Banking in 2002• Headed the group for the past 6 years• Completed many transactions including divestitures,

acquisitions, management buy-outs and private placements of debt and equity

• Prior to joining CIBC, Trevor worked for 12 years with an international accountancy firm in their corporate finance and audit groups in Canada and the UK

• Chartered accountant designation

• Offices in Toronto, Montreal, Vancouver, Calgary and Edmonton. • Provide M&A advice and deal execution targeted at privately-owned

Canadian companies. • Typical transaction sizes range from $10 - $100 million.

Tel: (416) 980-7341Trevor.Gough@cibc.com

Jason Sparaga• President and Founder of Spara Capital.• Explain the role of Investment Bankers in Mergers &

Acquisitions• Chartered Accountant by training.• Highly-entrepreneurial and an experienced deal professional

in both M&A and financing.• Past President of the Toronto Chapter of the Association for

Corporate Growth (ACG). • Board member of several public companies.• Member of CEO Global Network

Tel: (905) 829-5757 x124jsparaga@sparacapital.com

• Boutique investment bank and merchant banking firm based in Oakville combining Bay Street Expertise and a Main Street Approach.

• Focused on mergers and acquisitions and financings for mid-market private and public, entrepreneur-led businesses.

• We fight for entrepreneurs and take pride in our professional tenacity.

Jason Berenstein• Principal with Kilmer Capital Partners• Joined Kilmer in 2002• Explain Private Equity and what’s important to them• Responsible for new deal origination, investment

execution and management• Experience with buy-outs, buy-ins, recaps and growth

capital investments• Prior experience as a VP at Deloitte working in

Transaction Services• Association for Corporate Growth Board member• Chartered Accountant and M.B.A.

Tel: (416) 815-4984jberenstein@kilmercapital.com

• A leader in private equity investments in small to mid-sized businesses undergoing periods of rapid growth, significant change or ownership transition

• Funding for management buyouts• Growth capital for entrepreneurs with a vision

Q1) The Art of the Deal Structure & Process

Phase 1 - Assessment and Preparation

Research and Planning

Preparation of Marketing Materials

Preparation of Buyer list

Phase 2 - Marketing and Negotiation

Marketing and Management meetings

Negotiating and Finalizing LOI

Sign Non-Binding Letter of Intent

Phase 3 - Due Diligence, Docmentation and Closing

Negotiation & Due Diligence

Sign Purchase Agreement, Close and Funding

Ontario Greenways Inc.Divestiture Timeline

Month 2 Month 3 Month 4 Month 5Month 1 Month 6

• Getting Ready to Deal – Preparedness– Successes, Roadblocks, War Stories

• What to expect? (Goals, Timing, Results)

Q2) The Elephant in the Room is VALUATION

– Market Conditions (Supply & Demand for Capital) ?– Multiplier (x EBITDA or x Revenue) ?– Strategic or Financial Buyer ?– Platform or Add-on Investment ?– Payment Types (Cash, Vendor Note, …) ?– Seller’s Goals (Exit or Change) ?

Q3) Open Floor for Questions

Our Panelists’ Contact Information• Richard Rémillard, Executive Director

– Canadian Venture Capital Association (CVCA) • Tel: (416) 487-0519 rremillard@bellnet.ca

• Trevor Gough, Managing Director– CIBC Mid-Market Investment Banking

• Tel: (416) 980-7341 Trevor.Gough@cibc.com

• Jason Sparaga, President– Spara Capital Partners Inc.

• Tel: (905) 829-5757 x124 jsparaga@sparacapital.com

• Jason Berenstein, Vice President– Kilmer Capital Partners

• Tel: (416) 815-4984 jberenstein@kilmercapital.com