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Project Block Project Block A Case Study in Sell-Side M&A Roadmap to success 2 5 Sale planning and Stage 1: strategy Receive Completion / Post-sale transition / non-binding • Ensure business is Settlement integration / earn out indicative bids market ready Send out Flyer / 4 • Provide access to data room • Finalise pre-sale Teaser to • Bidders will • Authorised bidders undertake due 8 9 Commence restructuring buyer pool submit a diligence or business Issue Information non-binding Sale Process • Issue one page • Bidders invited to meet management improvement Memorandum indicative offer • Agree final transaction documents flyer/teaser initiatives based on the • Bidders submit a binding bid (final bid such as Sale Purchase Agreements, document (general Detailed IM to include: 1 information price, subject to legal documentation) Lease, Employee Agreements, Non- • Identify target information about provided in compete Agreements • Proposed deal • Final negotiations on price. buyer pool the business on a the IM structure If the vendor accepts a bid, parties • Key vendor personnel may be required • Finalise sale deidentified basis) Engagement Letter • Financial Information • Vendor may will negotiate and sign sale to stay on with the business for a timeline and • Negotiate NDAs elect to enter documentation. transitional period, typically 6 months • Agreement of key terms process with interested • Industry snapshot and into exclusivity to 2 years. and scope of work parties growth opportunities with one • Fees usually comprise: • Data room • People – management bidder or invite 6 7 and key staff 2 - 4 bidders to • a) Success fee based on preparation participate in a % of the sale price • Customer profiles Stage 2: Signing stage 2 • b) Monthly retainer 3 Due Diligence & Binding Bids Project Block Case Study This is a case study demonstrating the key documents in a typical sell-side M&A process. The purpose of these documents is to provide an understanding of the tasks that Nash Advisory undertakes in each of our engagements. This list is not exhaustive, and Nash may conduct additional activities for individual engagements depending on the complexity of the deal, timeframes or a variety of other reasons. The subject of this case study is a hypothetical “Project Block”, an FMCG company providing health food products in Australia. This company has been operating since 2005, and the three equal shareholders of the business are nearing retirement and are looking to retire and sell the business. This document includes examples for Project Block of: ► Confidentiality Agreement (CA) ► Engagement Letter ► Request for Information (RFI) ► Valuation ► Buyer’s List ► Working Capital Analysis ► Flyer ► Information Memorandum (IM) ► Non-Binding Indicative Offer (NBIO) ► Term Sheet ► Settlement Schedule Separately on our website (www.nashadvisory.com.au), an example excel spreadsheet of the working capital analysis is available. Please note, this case study is merely an example for illustrative purposes only. If you have any further questions please contact Nash Advisory at [email protected]. Project Block Confidentiality Agreement Sample Confidentiality Agreement THIS CONFIDENTIALITY DEED is dated 30 July 2021 BETWEEN Project Block (“Discloser”) Company Address AND Nash Advisory Pty Ltd (“NASH”) and (“Recipient”) Level 5, 356 Collins Street Melbourne, Victoria 3000 Australia RECITALS A. The Discloser will provide Confidential Information to the Recipient in connection with discussions in relation to the potential or actual engagement of the Recipient to provide corporate advisory services to the Discloser. B. The Discloser agrees to provide the Confidential Information to the Recipient on the terms of this Deed. 1. "Confidential Information" means all information and documentation which may be disclosed to or obtained by the Recipient from the Discloser in respect of the Purpose during the course of or in consequence of the parties’ discussions (including in writing, verbally or electronic medium) which is proprietary to the Discloser and includes, but is not limited to, information which relates to the Discloser's business, products, research and development, customers, business, financial and marketing plans but does not include any information that: (a) is in the public domain at the time of receipt by the Recipient or that otherwise enters the public domain other than because of a breach of the Deed by the Recipient; (b) was obtained by the Recipient from a source other than the Discloser (or its related bodies corporate) through no breach of confidentiality owed by that source (to the Recipient’s actual knowledge); or (c) was derived by the Recipient without reference to information provided under this Deed by the Discloser. “Purpose” means discussions between the Discloser and Recipient in relation to, and the Recipient’s consideration of, a potential sale (either by cash, equity or hybrid equity form) of the Discloser’s business and any related pre-sale preparatory and business improvement work. 2. The Discloser may make available to the Recipient and the Recipient may obtain or have access to Confidential Information in various forms from time to time. 3. The Recipient agrees to use the Confidential Information only for the Purpose and will not disclose the Confidential Information other than permitted by clause 4 below, required by law or a regulatory authority, or as directed by the Discloser, to any third parties. The Recipient agrees to restrict its disclosure of Confidential Information to employees that are involved in the Purpose. 4. Notwithstanding anything else in this Deed, the Recipient may disclose the Confidential Information to its related bodies corporate and advisers in connection with the Purpose. 5. As between the Discloser and Recipient, all rights in the Confidential Information and all intellectual property rights, such as copyright, shall remain exclusive property of the Discloser. CA | 1 6. Upon the Discloser's request the Recipient must return to the Discloser or destroy (at the Recipient’s election) all copies of the Confidential Information, subject to any requirements by law or the Australian Securities Exchange to retain Confidential Information. The provisions of this Deed continue to apply to Confidential Information retained under this clause 6. 7. Nothing shall oblige the Discloser to disclose any information, nor to enter into any agreement or other arrangement, nor shall anything be construed as a granting of any rights, by license or otherwise, in any information, products or rights of the Discloser. 8. The term of this Confidentiality Agreement is one year from the latter of when this Agreement is executed or the receipt by the Recipient of any Confidential Information. 9. The obligations of the Recipient may not be assigned nor transferred without the Discloser's prior written consent. 10. The laws of Victoria, Australia govern this Deed and the Parties hereby irrevocably submit to the exclusive jurisdiction of the Victorian Courts. EXECUTED AS A DEED BY: Project Block Name of Authorised Representative Signature Nash Advisory Pty Ltd Name of Director Signature of Director CA | 2 Project Block Engagement Letter Sample Engagement Letter The following details the standard components of an Engagement Letter for the divestment of a business from Nash Advisory. For full details and an understanding of our scope of works, please reach out to our team for a discussion at [email protected]. Overviews of each section are denoted in this format +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ 1 January 2022 Project Block Contact Person, [email protected] Project Block, CEO Company Address By Email: [email protected] Project: Block Appointment of Nash Advisory to assist with the divestment of Project Block. 1. Background A high-level overview of the Engagement, parties and scope of works. 2. Scope of the Engagement A detailed overview of the scope of works we agree with you to undertake as part of our Engagement. An overview of a selection of services is provided below. Nash Advisory does not provide key services and the Company is expected to engage external parties to manage Accounting, Legal and Taxation advice. Nash Advisory supports the Company by liaising and working with all advisors during the transaction. Timeline and process Nash Advisory provides an overview of the expected timeline for completing the Transaction. This may be subject to change depending on a number of factors, including availability of information, market factors and investor engagement. 1 Project: Block 3. Professional Fees Nash Advisory is typically engaged on a retainer and success fee basis. 4. Nash Team Nash Advisory commits our team members to the transaction and provides dedicated senior resources to each Client, supported by the team of analysts and senior analysts as appropriate. The team members are set out here. 5. Information and Communication It is imperative that during a Transaction, any information related to the Engagement is shared with Nash Advisory. As such we ask that the Company keep Nash Advisory informed of key information as it becomes aware of it. 6. Termination Both the Company and Nash Advisory have the right to Terminate the Engagement, however key clauses of the Engagement Letter, such as Confidentiality, remain in place beyond Termination of the Engagement. 7. Confidentiality Both the Company and Nash Advisory must keep the terms of this Engagement confidential. 8. Indemnity
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