Benefits of Making Business in United Kingdom | Buy & Sell Business

1. BENEFITS OF MAKING BUSINESS IN THE UNITED KINGDOM WWW.MERGERSCORP.COM

2. At MergersCorp M&A International we help our clients confidentially buy and sell privately held businesses, aligning the interests of all parties for mutual success and satisfaction. It is our goal to make the process of either buying a new business or selling your current business as smooth and efficient as possible. We know how important confidentiality is to our sellers and we treat it with the utmost importance. WWW.MERGERSCORP.COM

3. BENEFITS OF MAKING BUSINESS IN THE UNITED KINGDOM WWW.MERGERSCORP.COM

4. Country Overview The United Kingdom, made up of England, Scotland, Wales and Northern Ireland, is an island nation in northwestern Europe. England birthplace of Shakespeare and The Beatles is home to the capital, London, a globally influential centre of finance and culture. England is also site of Neolithic Stonehenge, Bath’s Roman spa and centuries-old universities at Oxford and Cambridge. The origins of the United Kingdom can be traced to the time of the Anglo-Saxon king Athelstan, who in the early 10th century CE secured the allegiance of neighboring Celtic kingdoms and became “the first to rule what previously many kings shared between them,” in the words of a contemporary chronicle. Through subsequent conquest over the following centuries, kingdoms lying farther afield came under English dominion. Wales, a congeries of Celtic kingdoms lying in Great Britain’s southwest, was formally united with England by the Acts of Union of 1536 and 1542. Scotland, ruled from London since 1603, formally was joined with England and Wales in 1707 to form the United Kingdom of Great Britain. The United Kingdom has made significant contributions to the world economy, especially in technology and industry.

5. Executive Summary The United Kingdom's capital and largest city is London, a global city and financial centre with an urban area population of 10.3 million. The United Kingdom consists of four constituent countries: England, Scotland, Wales, and Northern Ireland. Their capitals are London, Edinburgh, Cardiff, and Belfast, respectively. London is the capital and largest city of England and the United Kingdom. Standing on the River Thames in the south-east of England, at the head of its 50-mile estuary leading to the North Sea, London has been a major settlement for two millennia. The population density in the United Kingdom is 281 per Km2. British culture is influenced by the nation's history; its predominantly Christian religious life, its interaction with the cultures of Europe, the traditions of England, Wales, Scotland and Ireland, and the impact of the British Empire. ENGLAND is famous for many things - David Beckham, Fish and Chips, Big Ben, Red Buses, black cabs, Oasis, Blur, the Beatles, London and tea. England is famous for its long history. England is famous for its Royal Family. Windsor Castle is the oldest royal residence still in use. Britain or Great Britain means England, Wales and Scotland. The United Kingdom means England, Wales, Scotland and Northern Ireland.

6. Introduction – Doing business in The United Kingdom The UK’s position, both geographically and in respect of business culture, puts it at the centre of a diverse collection of markets and sectors. Its open market and diversified economy present opportunities for new investors to access a domestic market and to use the location as a gateway to the rest of the world. Based on the World Bank Doing Business survey, the UK is ranked top in Europe in terms of ease of doing business and fourth in the world. It offers a number of competitive advantages as a hub for investors to conduct their business The government in the UK is actively addressing opportunities for investors to come to the UK through fiscal reforms. Whilst there is a genuine drive to ensure that the UK has a simple and easy to understand legal environment in which to do business, investors still need to be aware of regulatory aspects relating to their specific sector, where appropriate.

7. Conducting business in The United Kingdom The UK is a large and dynamic marketplace in its own right, but also benefits from being an excellent gateway to other parts of the world. Foreign investors coming to the UK have experienced its many advantages, including: • A deep pool of workforce expertise; • Excellent transport links with the rest of the world; • A central time zone position ideally placed between the markets of the East and West; • A flexible and business minded location; • Accessibility of language; • A familiar gateway into the rest of Europe and a member of the EU; • A solid, credible and long established structure for companies to build businesses; • One of the world’s global financial centres;

8. Taxation in The United Kingdom Tax in the UK is collected by the Government's HM Revenue & Customs (HMRC) department to pay for public services. For earned income of £0 to £32,000 above the personal allowance, which means £11,000 to £43,000 of gross earned income, the basic income tax rate is 20%. The higher rate of 40% applies when the earned income is £32,001 to £150,000 above the personal allowance. VAT is charged when a VAT-registered business sells goods or services to another business or to a non-business customer. If the rate of VAT is 20% then the VAT included on this transaction will be £16.67. When a business charges VAT on a sale they are collecting that money on behalf of HM Revenue & Customs. ​​​​​​​​​​​​The general taxes that must be paid by residents in the UK. It does not cover income tax or national insurance contributions.

9. Trade Economic Complexity Index (ECI). In 2017, the United Kingdom exported $395B and imported $617B, resulting in a negative trade balance of $222B. In 2017 the GDP of the United Kingdom was $2.62T and its GDP per capita was $43.3k. The top exports of the United Kingdom are Cars ($45B), Packaged Medicaments ($18.4B), Crude Petroleum ($17.8B), Gold ($16.1B) and Gas Turbines ($14.6B), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Cars ($45.5B), Gold ($34.3B), Crude Petroleum ($19.1B), Refined Petroleum ($18.3B) and Packaged Medicaments ($17.6B). The top export destinations of the United Kingdom are the United States ($45.2B), Germany ($38.6B), the Netherlands ($24.9B), France ($24.8B) and China ($21.9B). The top import origins are Germany ($90.3B), China($58.9B), the Netherlands ($47B), the United States ($46.6B) and France ($36B). The United Kingdom is the 10th largest export economy in the world and the 11th most complex economy according to the

10. Banking in The United Kingdom UK and also happens to the world’s eighth oldest bank. The Bank of England is tasked with setting up and maintaining the monetary policy and financial stability of the country. High Street Banks – High street banks are like retail banks that have multiple branch locations. Given that these banks provide retail services, they mostly serve the general public. This means that instead of targeting a specific market or type of customer, they service a wide range of customers. A major characteristic of high street banks is that they are widespread and are located in any commercial sector of both, towns and cities. Business banking – Business banking services are those which are offered by High street banks. These services are provided in addition to what an ordinary account can offer. Hence, these are offered as additional services and for a certain fee. The banks in the UK have gone through a major transition over the past decade. Currently, a major share of the banking sector is occupied by a few large banks. Central bank – In the UK, the central bank is the Bank of England or BoE. The Bank of England is the central bank of the

11. Our M&A Process NEGOTIATION & CLOSE POST MERGER INTEGRATION (PMI) INTEGRATION (PMI) POST MERGER TARGET APPRAISAL APPROACH DUE DILIGENCE Key Areas  Target & market analysis;  Initial assessment of synergies & value drivers;  Indicative valuation;  Go or No-Go decision;  Preparation of transaction documents (NDA – Non- disclosure Agreement/LOI- Letter of Intent);  Select Transaction team;  Appoint advisors;  Consider funding ability.  Initial approach letter;  Signing of NDA;  Prepare & share initial information requests;  Formulation of LOI (Letter of Intent) & possible negotiations;  Initial meeting and Q&A;  Circulate information on the Target to the Transaction team.  Set scope of due diligence;  Set up VDR (virtual data room);  Coordinating of due diligence, further meetings and Q&A sessions;  Consider points relevant to the Post-Merger (PMI) phase;  Revisit indicative valuation & prepare detailed valuation based on due diligence findings;  SPA negotiations with the seller;  Development of final structure (share/asset deal) and final valuation;  Approvals;  Signing of SPA & Close.  Consider the extent of integration;  Development of 100 Day PMI Plan;  Consider short & long term objectives;  Estimate requirements to capture synergies;  Determine resource needs & optimal allocation. Parties Involved  CFO;  Head of M&A;  Accountants;  Corporate finance advisors;  Consultants.  Senior management;  CEO, CFO, CTO;  Strategy director;  Head of M&A;  Head of Business Development;  Consultants.  Company general counsel;  Lawyers;  Senior management.  Company general counsel;  Lawyers;  Senior management/HR. 11 © Midaxo 2018 www.midaxo.com

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13. MergersCorp.com The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. Member firms of the MergersCorp network of independent firms are affiliated with MergersCorp International. MergersCorp International provides no client services. No member firm has any authority to obligate or bind MergersCorp International or any other member firm vis-à-vis third parties, nor does MergersCorp International have any such authority to obligate or bind any member firm. Copyright © 2020 MergersCorp International. All rights reserved. 13 © Midaxo 2018 www.midaxo.com