Total Solution Service

From the very beginning of our company, Total Solution Service has been the cornerstone of our company’s efforts to assist business owners in the process of selling their companies. What has set this service apart from comparable services offered by others is the fact that no up-front fees are required and Gilman, Pope is only paid on a contingency basis. So, if we don’t do our job, you pay nothing to our company. This service is our most comprehensive process and promises Gilman, Pope’s involvement throughout the sale; from the presentation and pricing of your business, to sourcing and prequalifying buyers, to negotiating the deal and structure, to working with your tax and legal professionals and to the final sale of your business. Gilman, Pope is fully available to you to meet the on-going and ever-changing challenges that arise during the sale process. We have outlined the steps below to assist you in better understanding the services offered through Gilman, Pope’s Total Solution Service.

Once the engagement agreement with Gilman, Pope, Scribner & Robles has been signed, the process of taking your company to market begins. What follows is an overview of the steps involved when selling your company and the role Gilman, Pope, Scribner & Robles will play throughout the entire process.

An initial discussion of your objectives regarding many issues such as your desired value, possible on-going involvement in the management of the company, equity retention, the current status of market conditions and steps that can be taken to improve the present condition of your company as it relates to achieving the greatest value. Obviously, in many cases, some of the issues will have already taken place in earlier visits.

After the initial discussions have taken place, Gilman, Pope will work with you and your accounting professionals to determine the optimal market value for your business. This will involve a significant degree of analysis and discussion to insure that all aspects of the

business’s financial performance and posture are examined. The process will involve the possible recasting of income statements and balance sheets to address such items as “one-time events” that skew financial results and discretionary expenses that are not inherently necessary to operate the business along with many others. An examination of your product and customer concentration will also be a part of this review in an effort to assess the strengths or risks your business faces as these factors also play a role in determining the value of your company. Some of the other items examined are possible “barriers to entry” inherent in your industry along with the durability of the market served by your company. Ultimately, the goal is to arrive at a price that is the highest possible while remaining justifiable in the marketplace.

Once your company’s market value has been agreed upon, detailed discussions will follow to allow for the preparation of a corporate overview presenting your company. While this does initially involve a significant amount of your time, it will result in a much more efficient marketing effort and limit unnecessary time commitments in the future. The overall objective of the Corporate Overview is to provide insightful information regarding your company in such a manner as to place your company in it best light. The intent is to stimulate interest in the opportunity your business offers on as broad a basis as possible without disclosing sensitive information. Some of the items addressed would be the history of the company and its progression, an overview of the company’s customer base (no specifics), markets served, employee breakdown along with key employees and stability of the workforce, unrealized opportunities and possible capital investments associated with the growth of the company. After the Corporate Overview is completed, it will be submitted to you for a final review to correct misstatements or to enhance items that will serve to improve the company’s posture in the marketplace.

Now, having both a market price and an attractive profile of your company, Gilman, Pope will begin its marketing efforts. This will involve a number of avenues designed to put your company in front of those buying groups, individuals and companies most likely to have an interest in pursuing an acquisition of a company such as yours.

Once potential acquirers with an interest in your company are identified, a Confidentiality/Non-disclosure document is provided to the possible buyer for review and signature. Upon its return, the Corporate Overview is provided for the acquiring entity to review to determine its interest in moving the acquisition process forward. At this point, if the buying group continues to show an interest in the company, a conference call is arranged between you, the owner of the company, the buying group and Gilman, Pope. During this conversation, questions will be asked and items clarified. The hope is that such a discussion will provide both sides to the transaction with a degree of comfort with the opposite party. Again, sensitive information is limited and Gilman, Pope will intercede should questions deemed inappropriate or premature are presented to you by the buying party.

After the initial conference call is completed, Gilman, Pope will call you for a follow-up discussion. Two items will be addressed during this call. The first will be your impression of the other party and your desire to continue discussions. The

second item will be a breakdown of the earlier call. We will discuss with you positive points addressed during the call, possible improvements in the way some of the information is conveyed in future calls and areas that were possibly neglected during the call that cast your company in a more positive light. Calls of this nature are like any other skill; with a little input from Gilman, Pope and your effort to refine your delivery, you will quickly become very effective at presenting your company to possible buyers.

At this point, interested buyers will return to Gilman, Pope with a list of questions that require further input from both you and Gilman, Pope. Buying groups are aware of the need to work through Gilman, Pope as your representative as this increases the ability to maintain confidentiality and allows us to filter the information provided to insure it is appropriate.

After the second delivery of information, it is typical for one more phone call to take place prior to a visit to the facility or the buying group moves directly to schedule a meeting at your company to view the business operation and meet face-to-face with you. Again, as with all of the steps in the process of selling your company, Gilman, Pope will be on hand to organize and oversee the visit to your facility.

After the visit and the possible exchange of additional information and discussions with Gilman, Pope regarding the possible structure of a transaction, the buying group would now indicate its interest in acquiring your company by presenting you with a Letter of Intent to purchase your business. Upon its receipt, Gilman, Pope will immediately forward the Letter to you. If you find the Letter of Intent acceptable or wish to respond with different terms, Gilman, Pope will work with you and your attorney to prepare the appropriate response and arrange to deliver your response to the Buying Group.

Assuming you and the Buying Group arrive at an agreement as to the terms of purchase, the next step would be the due diligence process. This will typically begin with a request for specific information regarding the detailed operation of your business. This information will be delivered to the Buying Group for analysis and follow up questions. At the same time, a time to visit your company and begin the on-site due diligence process will be scheduled. During the due diligence process, all aspects of your business will be reviewed and examined to insure there is absolutely no question as to what the Buying Group is acquiring while at the same time allowing the Buying Group to put together its business plan for operation after the acquisition has been consummated. This is also the time in which the Buying Group may perform an Executive Search in an effort to locate the individual to run the business on a daily basis after your departure from the company. Once the due diligence process the Buying Group performs is well underway, the Buying Group will work to prepare a Purchase Agreement working under the terms stated in the Letter of Intent and expanded to deal with all other relevant issues. A draft of this agreement will be delivered to Gilman, Pope and your attorney for review and comment. Your attorney will provide a written response with Gilman, Pope’s guidance to the Buying Group’s attorney and this process will continue until an agreement acceptable to both sides has been created.

By now the due diligence process has been completed and a time is agreed upon for the sale and transfer of ownership of your company to the Buying Group and payment of the purchase price to you. This is pretty straight-forward and is the culmination of all of the effort put into the process previously.

Once the transaction has been completed, the Buying Group will obtain possession. At this time there will be a walk-through of the facility to insure all of the assets included in the purchase agreement are present and in the condition agreed upon earlier. You will now start the process of
providing the transition period as earlier agreed to and the new owners will integrate into the daily operation. Once you have completed your obligations as to transitional support, you will no longer have any obligation to the business’s operation unless such a role is created by mutual agreement.

Throughout the process and every step of the way, Gilman, Pope, Scribner & Robles will be on hand to provide its expertise and assistance in an effort to bring about a successful sale of your company.

As to the fees paid to Gilman, Pope, they are only due at the conclusion of a consummated sale. While the fee paid to Gilman, Pope will vary with the size of the transactions; the typical fees paid run the range of $150,000 to $400,000. Obviously, there are cases in which the fee would be much greater than the range quoted but the numbers above serve as a good reference point.

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