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Exit Planning for Education Companies

Exit Planning for Education Companies. Richard Jackim MidCap Advisors, LLC. The M&A Market. M&A activity in the educational segment is slowly rebounding after a lull in 2009 & 2010. Over 140 transactions were closed in 2010 and 2011 with a total value of just over $4 billion.

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Exit Planning for Education Companies

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  1. Exit Planning for Education Companies

    Richard JackimMidCap Advisors, LLC MidCap Advisors, LLC - The Education Specialists
  2. The M&A Market M&A activity in the educational segment is slowly rebounding after a lull in 2009 & 2010. Over 140 transactions were closed in 2010 and 2011 with a total value of just over $4 billion. MidCap Advisors, LLC - The Education Specialists
  3. Who’s Buying Whom?And the Pros and Cons of Each Strategic Buyers Bought 68% of the schools sold in 2010 and 2011 Financial Buyers Bought 32% of the schools sold in 2010 and 2011 MidCap Advisors, LLC - The Education Specialists
  4. Noteworthy Recent Transactions MidCap Advisors, LLC - The Education Specialists
  5. Small & Midsize Schools Dominate the Market Education companies with revenues of less than$25 million accounted for 95% of total education deals 75% of education and training companies sold between 2001 and 2012 had revenues of $5 million or less MidCap Advisors, LLC - The Education Specialists
  6. Median Price to Revenue MultiplesBy Revenue Size (Source: CapitalIQ) MidCap Advisors, LLC - The Education Specialists
  7. Exit Planning, The Key to Success MidCap Advisors, LLC - The Education Specialists
  8. Macro Conditions 50% of privately held companies will experience a change of ownership over the next 15 years. Source: Studies by MassMutual, Marquette University, Exit Planning Institute, ROCG Consulting, et. al. 8 out of 10 small businesses will either be undervalued or unsalable. Source: Source: Studies by U.S. SBA, IBBA, & Exit Planning Institute 75% of owners were unhappy 12 months after selling their companies Source: Source: Study by PriceWaterhouseCoopers, Whose Business is it Anyway? WHY??? MidCap Advisors, LLC - The Education Specialists
  9. Exit Planning in a Nutshell
  10. 7 Steps in a Successful Exit Planning Goals: Articulation & Alignment Financial Needs Business Valuation Value Enhancement Exit Options Net Proceeds Action Plans
  11. Timing Exiting Planning Process: 0 to 5 years Sales Process: 6 months to 1 year Transition Period: 0 to 2 years Seller Financing: 0 to 5 years In Total: 6 months to 8 years The less time you take, the fewer options you have. MidCap Advisors, LLC - The Education Specialists
  12. EXECUTION PROCESS AND TIMING -------------------------Week------------------------ For capital raises and sell side engagements 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLANNING Pre-sale valuation analysis. Define Strategy; Prepare Marketing Documentation; Valuation Parameters; Identify and Analyze Key Potential Investors or Acquirers. MARKETING Approach Potential Investors or Acquirers; Identify Most Interested Parties; Receive Indications of Interest. MANAGEMENTPRESENTATIONS Management Presentations; Conduct Investor Tours; Provide Additional Information; Pre-negotiate Key Contract Terms; Analyze Formal Offers; Conduct Final “Auction.” STRUCTURING AND NEGOTIATING Structure Transaction; Negotiate Agreement. DUE DILIGENCE/CLOSING Sign Agreement; Close Transaction. MidCap Advisors, LLC - The Education Specialists
  13. Why Now May Be The Right Time to Get Started… Private equity groups have a record setting $458 BILLION to invest – the largest amount since 1998. MidCap Advisors, LLC - The Education Specialists
  14. New York • Chicago • Philadelphia • Boston • Dallas/Fort Worth • Kansas City • Charleston • Charlotte • Indiana New York • Chicago • Philadelphia • Boston • Dallas/Fort Worth • Kansas City • Charleston • Charlotte • Indiana Questions…. Contact: Richard Jackim Managing DirectorEducation Group MidCap Advisors, LLC Phone  224-513-5142 Cell       847-682-4997 Fax        224-330-1828 rich.jackim@midcapadvisors.com www.midcapadvisors.com Available at Amazon.com New York • Chicago • Philadelphia • Boston Dallas/Fort Worth • Kansas City • St. Louis
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