Grow/Buy/Sell - Career Colleges Ontario

Report
Yours To Discover
Conference 2012
Growing, Buying or Selling a PCC
What is your business worth?
Growing, Buying or Selling a PCC
What 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
Entrepreneurial
Owners
Status Quo
Growth
Organic
Grow
Acquisition
….
Sell/Transition
Private Equity
Buy
…..
MBO
Strategic
Sell
M&A Game
The Players
Buyers
• Strategic vs. Financial (Private Equity)
• Internal (Family & Management Teams)
Intermediaries
• 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
Tel: (416) 487-0519
[email protected]
• 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)
Trevor Gough
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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
Tel: (416) 980-7341 • Prior to joining CIBC, Trevor worked for 12 years with an
[email protected]
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.
Jason Sparaga
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President and Founder of Spara Capital.
• Explain the role of Investment Bankers in Mergers
& Acquisitions
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Tel: (905) 829-5757 x124
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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
[email protected]
• 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
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Tel: (416) 815-4984
[email protected]
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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.
• 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
• Getting Ready to Deal – Preparedness
– Successes, Roadblocks, War Stories
• What to expect? (Goals, Timing, Results)
Ontario Greenways Inc.
Divestiture Timeline
Month 1
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
Month 2
Month 3
Month 4
Month 5
Month 6
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 [email protected]
• Trevor Gough, Managing Director
– CIBC Mid-Market Investment Banking
• Tel: (416) 980-7341 [email protected]
• Jason Sparaga, President
– Spara Capital Partners Inc.
• Tel: (905) 829-5757 x124 [email protected]
• Jason Berenstein, Vice President
– Kilmer Capital Partners
• Tel: (416) 815-4984 [email protected]

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