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M&A Source Spring 2012 Conference - San Antonio
650,000 Reasons to Join The M&A Source and Attend the Upcoming Spring M&A Source Conference in San Antonio!Dora Lanza, M&AMI, CBI, CSBA, MEA - 2012 Conference Planning Chair
Conference Schedule at a Glance
6 High Quality Panel Presentations
The Private Equity Expo
 At our last conference, we brought a new engagement to the PEG Expo that generated a lot of interest. Fortunately, an exhibiting PEG referred us to Palm Beach Capital, who was actively seeking a platform in logistics. As a result of that introduction, I am pleased to share that we were successful in closing the sale of the company for well over $20 million, generating a commission of $650,000. This would not have been possible had we not attended the conference.
I still remember the first time my business partner, George Lanza (who happens to be the love of my life), and I snuck into an M&A Source Conference PEG Expo. We were mesmerized by the energy in the room. Determined to learn and close larger deals, we immediately joined the M&A Source. Our investment of time to take courses and attend the conferences continues to yield 1000s% in return...
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Chairman's Message
Chet Walden, CBI, BCI, M&AMI, FIBBA
 As I speak to association members across the country, it is very gratifying to hear the optimism in their voices as they tell about the upswing in their M&A activity for this first quarter of 2012! I know you must be seeing it, as well! While the year 2011 started out less than spectacular at my own firm, it finished strong in the last quarter, and we, too, are experiencing a serious increase in activity. Let’s be the change agents and keep this confidence level growing strong!
Your M&A Source Board and Committee Chairs continue to provide you with new tools to ensure you have a terrific year. For example, the current benefits of your membership include the following...
...There are also several additional benefits on the drawing board that should be rolled out within the next few months. The 23 Webinars provided last year were on subjects such as:
- Meeting the Pegs
- Reps, Warranties & Indemnifications
- Confidentiality Agreements
- Advanced Due Diligence
- Intro to Mergers & Acquisitions
- Using Social Medial to Build Your Practice
Four very informative Webinars have already been conducted in 2012 for our association members. Joe McCaul and his committee have a number of exciting programs scheduled for the coming year, including the opportunity for you to meet other private equity groups in Meet the Pegs segments, and a program on coordinating with your clients’ financial planners...
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Headlines
Highlights from M&A Source
George Petrulis, CBI, M&AMI - 2012 M&A Source Education Chair
Joe Lindsey, M&AMI, CBI, BCB, LREA - 2012 M&A Source Membership Committee Chair
Sharing's from Taylor Devine
Industry News
"DIY Apps Save Small Businesses Time, Money"
"Sales of Small Businesses Rose in 2011"
"The Three Deadly Mistakes of Succession Planning"
"Making M&A Safer"
"Private Equity Faces 'Urgency' to Increase Exits, PitchBook Says"
"PE Healthcare Technology Deal Flow"
"Regulatory and Case Law Developments Relating to Private Equity Fund Documents"
Highlights from M&A Source
George Petrulis, CBI, M&AMI - 2012 M&A Source Education Chair
 As EDUCATION CHAIR for 2012 I wanted to provide an overview of the activities entailing MAS educational initiatives.
During the past 3 years MAS has developed and rolled out 11 new courses. The make up of these courses included 6 – 300 level and 5 – 400 level courses. When taking into consideration the 300 and 400 level course developments over the last 5 years, the total number increases to 15. This analysis is reflected on the IBBA web site under the IBBA University link.
These courses are the direct result of select MAS member volunteers. These individuals have a strong interest in sharing their deal making knowledge with others. Developing a new relevant course is not an easy task. The course author(s) has/have by design taken considerable time from their practice to provide advanced educational content for MAS intermediaries, as well as IBBA’s main street brokers.
After a new course is rolled out for the first time, certain content modifications may be/have been made as a result of several issues...
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Joe Lindsey, M&AMI, CBI, BCB, LREA - 2012 M&A Source Membership Committee Chair
 The M&A Source is dedicated to being your bridge to success. The Association’s goals are: • advance our members' deal making opportunities • advance the profession's practice standards by providing a wide array of programs • advance each member's personal growth potential through a variety of forums, including • networking
• mentoring
• success creation opportunities
One way to add value to your membership is by connecting with M&A intermediaries from around the country. Being a member gives you direct access to the most active lower middle market intermediaries. Here’s what M&A Source members are saying:
“My M&A Source membership has helped me operate less like a lone wolf and more like a member of a pack—which has led to enhanced profitability and success.”
Alan Tronson, AdvantEdge Advisors, an M&A practice in the Northwestern United States
“As my professional competence increases, my practice grows. Competence and professionalism—that’s what The M&A Source provides me.”
Steve Wain, CBI, M&AMI, CBB, Calder Associates
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Sharing's from Taylor Devine
 The M&A Source continues to move forward:
We continue to be dedicated to creating the best place for Dealmaker Intermediaries, PEGs and Dealmaker Strategic Professionals to that members get a great ROI. We believe that continuous improvement & investment in ourselves and the M&A Source produces a great ROI. We define investment as time, talent, passion & participation.
Who gets the highest ROI from their M&A Source membership and why?
Answer - Those who invest in themselves and the M&A Source in the following ways.
- Committee Members
- Leadership Team
- Those that are active day to day with our PEGs and attend/work our PEG Expos
- Board Members
- Those that teach & take MAS courses and those who moderate, serve on and participate in MAS Panels
- PEGs who are active day to day with MAS Members
- Those who present & attend MAS webinars and those who host MAS Master Classes in their home markets
- Those who attend & work our conferences and contribute to MAS conferences This is not a spectator sport.
Any questions, Click Here and ask any of these people about their ROI.
Here is an opportunity to increase your ROI:
We are looking for a few good members for our Sponsorship Committee to work with Bryce DeGroot and our M&A Source Community. This is an opportunity to increase your visibility, your network and contribute at the same time. Call or email Bryce: Compass Advisors, (406) 282-6000 x 801, bryce@compass-advisors.com
All of us at the M&A Source with you well and hope you have a great 2012.
Industry News
DIY Apps Save Small Businesses Time, Money
BusinessWeek (02/06/12) King, Rachel
Many small-business owners are looking to create mobile apps for their business, and there are a growing number of self-service solutions that do not require the hiring of professional programmers. Using a service like Appsbar, which builds apps for free and places ads inside the apps, can save companies anywhere from $10,000 to $100,000 and up to twelve weeks of work, according to Appsbar founder Scott Hirsch. The firm's clients are mostly small and midsize companies, and it has attracted 60,000 users since its start in April 2011. There are several other options beside Appsbar as well, including MyAppBuilder, AppBreeder, AppsGeyser, Mobile Roadie, and Socialize, which makes the AppMakr tool. About 70 percent of small businesses used mobile apps in 2011, and 40 percent said their business could not survive without them, according to an AT&T survey. Another survey from the Small Business & Entrepreneurship Council found that small businesses that use apps save about 5.6 hours per week.
Sales of Small Businesses Rose in 2011
Inc (01/25/12) Rubin, Courtney
According to the latest report from BizBuySell.com culled from information listed by local business brokers and "for sale by owner" listings, for the second consecutive year, the number of small business sales rose, with the total rising 3.3 percent to 6,703 in 2011. In 2010, sales of small businesses rose 2.9 percent, following a 28 percent decline in 2009. BizBuySell.com General Manager Mike Handelsman says, "While 2011 continued to be a tough year for the nation's small business owners, we were pleased to see that business performance is improving and more people are buying small businesses. Helping this is the fact that business sellers are adjusting their value expectations, something that should continue to spur deals in 2012." In addition to an increase in transactions, the report indicates a 3.3 percent increase in the median selling price from $150,000 in 2010 to $155,000 in 2011. Median revenue also rose, increasing 6.7 percent, which suggests improvements in business performance. Handelsman says, "We are seeing improved small business transaction activity driven, at least in part, by the fact that small business owners are lowering prices to attract buyers. It's slowly becoming a better time to be a seller, but it's already a good time to be a buyer."
The Three Deadly Mistakes of Succession Planning
Registered Rep (01/20/12) Gleeson, Jerry
Succession planning is an integral part of running a business, particularly for small businesses, given that not having a plan in place can reduce the value of a business and its prospects for a sale. For those crafting a succession plan, they will want to avoid three pitfalls: building the wrong bench, turning succession into a competition, and acting out of fear. Business owners will not want to groom successors that have the same vision as they do because the market is always changing, and the new leader must be able to adapt to changing circumstances. Second, business owners will not want to tell potential successors that they have an equal shot at running the business because the potential candidates could enter into a destructive competition that eventually renders the business asunder. Instead, business owners should tell candidates that the firm is investing in their potential and offer a list of strengths they need to develop to create a team atmosphere. Finally, acting out of fear can skew the succession plan; experts suggest that business owners pay closer attention to how the plan can improve the business and generate benefits for clients, investors, and workers.
Making M&A Safer
CFO (02/12) Ryan, Vincent
The heightened awareness of M&A risk is partially related to current economic challenges, which leave little margin for error. When determining when to merge or acquire another firm, businesses need to conduct forecasts based on optimistic, neutral, and pessimistic assumptions through scenario planning and stress-testing discounted cash-flow models. Assessing acquisitions should include examining the data available to focus on three to four key areas that will create value post-acquisition, including how to retain customers and gain new ones. Acquisitions should not be based on potential revenue gains that may not materialize; instead, experts suggest focusing on strategic improvements the acquisition can provide and what value from cash flow can be obtained. Another tip is to ensure risk mitigation is part of the deal, either through the assessment of hurdle rates, defining actions associated with cost-savings synergies, and greater structure in the deal through promissory notes attached to liability and performance conditions. Some buyers even spend time on post-acquisition contracts to keep sellers engaged in the business. Cash flow and accounting risks also must be accounted for, especially as they relate to tangible and intangible assets.
Private Equity Faces 'Urgency' to Increase Exits, PitchBook Says
Bloomberg BusinessWeek (02/24/12) Banerjee, Devin
A new report from the research group PitchBook Data Inc. finds that U.S. private equity firms are retaining companies longer than they have in more than a decade, resulting in lower fund returns and preparing the way for exit activity to increase this year. According to PitchBook, the median holding period for companies by buyout firms in 2011 was 4.81 years, or 25 percent longer than before the 2008 financial fiasco. Private equity firms have made more than 12,500 investments in the past decade but have realized fewer than 3,500, the company said. PitchBook research director Adley Bowden commented that these firms neglected to account for the scope of the impending crisis when they created their original models seven years ago, and they are now holding a massive inventory of mature companies that are approaching their normal exit deadline. "The longer you hold these investments, in order to maintain the return that you had promised either you have to sell the investments for more or you have to take less of a return," Bowden said. "Right now that's fueling a sense of urgency around exiting some of these companies."
PE Healthcare Technology Deal Flow
PitchBook Newsletter (02/23/12)
Private equity firms and their portfolio companies have invested in 94 Healthcare Technology Systems industry companies since the beginning of 2008. Twenty-three of those deals were completed last year, up from 22 in 2010. There have been five completed deals so far this year. Half of the deals that have occurred in the Healthcare Technology Systems industry since 2008 have taken place in the Enterprise Systems Sector. That sector had a strong year in 2008. However, there has been an increase in the number of deals in the Medical Records Systems sector over the past two years.
Regulatory and Case Law Developments Relating to Private Equity Fund Documents
JDSupra (02/15/2012)
Private equity funds’ subscription and other documents may be affected by recent amendments to Securities and Exchange Commission (SEC) and Internal Revenue Service rules. As part of a requirement of the Dodd-Frank Act, the SEC in January amended standards relating to accredited investors. Under the old rule the definition of an accredited investor is someone with an annual income over $200,000 individually or $300,000 with a spouse for the previous two years or a net worth of more than $1 million, but under the new rule the equity value of the investor’s primary residence is excluded from the net worth calculation.
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The mission of the M&A Source is to promote members' professional development and interests to better serve their clients' needs, and maximize public awareness of professional intermediary services available for middle market merger and acquisition transactions.
