Silverwood's corporate acquisition advisory services range from assisting clients with situations where the counterparts are already discussing a transaction to assisting clients in locating suitable acquisition candidates and with related transactions.

Negotiated Acquisitions

Silverwood utilizes its in-depth sector knowledge and transaction experience to assist clients with a broad range of acquisition situations - from fill-in technology or product acquisitions to larger merger-of-equals transactions. In each case, Silverwood responds to a need for an advisor with a deep understanding of the industry sector concerned, and proven execution capabilities accumulated by the firm's principals over decades of transaction experience. The firm's professionals understand negotiating tactics, transaction structuring, legal and business due diligence, financing considerations, board level decision making considerations, and the many requirements associated with working as part of a multi-disciplinary transaction team.

Silverwood is typically retained to provide a highly informed third party perspective on transactions of all sizes and, in many cases, to render a fairness opinion in connection with a transaction.

Acquisition Searches

As a result of Silverwood's sector focus, extensive industry contacts and transaction expertise, the firm is retained by clients to assist in locating suitable acquisition candidates and in executing related transactions. A phased approach is used for each Silverwood acquisition engagement:

• • Definition of Acquisition CriteriaA generic profile of a target company is formed and related to those in the chosen market.
  • Conducting the Search ProcessSilverwood searches the firm's industry databases to identify companies matching the target profile, and provide brief summaries on a comprehensive list of target candidates.
  • Analysis of Target CompaniesA short-list of high potential companies is examined in greater depth and a more detailed profile is developed for each company that reviews key products, markets, clients, accounts, and key personnel.

Introduction and Negotiation

Silverwood approaches target companies on a confidential third party basis and, if appropriate, makes a formal introduction. Silverwood then provides direct assistance during discussions and transaction negotiations.

Due Diligence and Conclusion

Silverwood provides support and guidance throughout the due diligence and definitive documentation process in working toward a successful transaction closing.

The business environment is constantly changing. Change can happen over a relatively long period of time, or it can be abrupt or event-driven. Whatever the precipitating factor; capital, competition, or technology, a business may have a need to evaluate its strategic alternatives and determine an appropriate course of action for the maximization of shareholder value.

A typical engagement involves Silverwood working with a client's senior management and Board to:

• Develop a detailed understanding of the strategic business units within an organization
• Provide a competitive analysis for each business unit and the combined company for use in strategic decision making through Silverwood's in-depth industry knowledge and a client's industry perspective
• Determine the optimal strategy for maximizing the value of each business unit, i.e., retain the business, sell the business, merge the business with another similarly sized operation, or spin-out the business by selling a minority stake to an institutional investor
• Drive the decision making process forward into transaction execution

Silverwood's principals have extensive experience in assisting clients with strategic alternative assessments and in implementing recommended action plans.

Investment banks frequently analyze the financial effects of combining two businesses. Of equal importance are the strategic and qualitative issues associated with merging two companies. Such issues are more difficult to assess as a detailed industry understanding is required. Silverwood has developed a proprietary methodology for comprehensively reviewing the strategic, qualitative, and quantitative aspects of a proposed business combination: the Strategic Pro Forma®.

As part of a Strategic Pro Forma®, Silverwood uses its in-depth sector knowledge and research resources to review and analyze issues that affect each company separately pre-transaction and the combined business post-transaction, such as:

• Fundamental industry trends
• Product lines and service offerings
• Manufacturing and service delivery resources
• Sales force coverage by product, geography, or channel
• Distributor relationships
• Brand, marketing, and business development resources
• Service and support resources
• Customer or segment coverage
• General and administrative costs
• Income statement, balance sheet, and cash flow statement
• Capital structure
• Earnings per share and valuation implications
• Stockholder profile

Silverwood's Strategic Pro Forma® is used by corporate senior management and Boards as an important tool in the decision making process that is an integral part of each merger or acquisition transaction.

A possible outcome of a strategic assessment is a determination that all or part of a business would benefit from the scale of a larger entity. Factors that drive such a decision may include a need for capital, gaining access to complementary technologies, achieving marketing leverage through an established brand name, or gaining access to improved sales, service, and distribution channels.

A consistent aspect of Silverwood's strategic execution is the creation of multiple transaction opportunities such that a client has alternatives and the strongest possible negotiating position when structuring a transaction. Silverwood first positions a business as an attractive partner and then accesses extensive industry relationships to present opportunities that create long-term value for the firm's clients. Through the firm's research initiatives and active transaction flow, Silverwood is in frequent contact with corporate decision makers who are actively pursuing strategic investments, mergers, and acquisitions.