A privately held services company shouldn’t overlook the possibility of selling or merging with a larger player to obtain liquidity and maximize shareholder value.

Even in difficult economic times, it’s still possible to find precisely the right buyer for your company, according to George M. Shea, a FOCUS Partner, who shares an instructive sales experience in a new article, “The Biggest Sale of His Life: How One Small Business Owner Persevered and Sold His Company.”

With 30+ years of industry experience in acquisitions and divestitures, private placements of capital, business development and strategic planning and operations, George acted as a principal or facilitator in over 100 transactions. For the past 14 years, he ran a boutique investment bank in Atlanta and Jacksonville, acting as a finder and consultant in new business development activities. George also arranged the largest single infusion of equity capital ($25 Million) in Georgia’s history into an early stage technology-based company, a transaction named “Venture Capital Deal of the Year.”

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Active FOCUS Deals

Although our firm has over 22 years experience across many verticals, FOCUS currently has active transaction engagements in the following specific business sectors:

• Business Services
• Consulting and Government Contracting
• Distribution
• Government Contracting (multiple assignments)
• Healthcare
• Healthcare Business Services
• IT Outsourcing
• Manufacturing (multiple assignments)
• Medical Devices and Equipment (multiple assignments)
• Public Affairs Software and Services
• RFID Technology
• Security (multiple assignments)
• Software
• Specialty Flooring
• Supply Chain Management Solutions
• Systems Integration
• Video Surveillance and Network Integration

Our transaction process provides us with up-to-the-minute market knowledge in these sectors that may be corporate development of interest to you.

Inquiries should be addressed via e-mail to info@focusbankers.com, by telephone to 202-785-9404, x 341 or by fax to 202-785-9413.

The Biggest Sale of His Life: 
How One Small Business Owner Persevered and Sold His Company

By George M. Shea

By all accounts, Ben Meluskey didn’t have a reason to worry. His business was doing well; sales were up, employees and stockholders were happy, and his key vendor relationship was working smoothly. Yet, when Ben called me to sit down with him and discuss different alternatives for the future of his company, he clearly was concerned. You see, Ben’s business, while growing and highly profitable, was not one that was avidly coveted by outsiders, such as venture capitalists or investment banking underwriters seeking IPO candidates.

From its inception, Leland, Inc. had been a service business dependent upon one major vendor, with revenues that were often unpredictable. The company sold and implemented software systems made by other people to smaller manufacturing firms that most outsiders had never heard of. Although Leland had no patents or proprietary technology, the firm did have a strong reputation for getting the job done on time and at the right price.

Ben knew he had something good, but didn’t want to continue in it forever. Fast approaching retirement, he needed to develop and create an “exit” strategy where he could gain liquidity or the funds necessary for him to have a successful retirement.

THE SOLUTION - PRIVATE SALE

Ben called us because of our expertise in working with private, information technology service companies like his. We urged him to consider a carefully planned, systematic process under which we would prepare Leland for, and then execute, a sale of the business to companies we knew would be interested in his market. We also advised him that he was at least six months away from being ready to start this process, and gave him a “homework” assignment to make his company a better sales candidate.

Almost six months later to the day, Ben called and said he was ready! We showed the company to a discrete number of players, most of whom were seriously interested in acquiring Leland. To Ben’s surprise, we obtained four strong offers and had our choice of potential partners. But then, of course, things never go as smoothly as planned.

BACK FROM DISASTER(S)

Leland signed a Letter of Intent with the buyer willing to provide the best deal -- a strong, publicly-held Midwestern firm -- whose business was taking off dramatically and was a “high flyer” on Wall Street. Unfortunately, during the final due diligence period, our high flyer started to gets its wing clipped and diverted attention away from the sales transaction. Time went on and on and on and still no closing!

Fortunately, the other potential buyers had not lost interest, and we obtained a matching offer from one of them. Ben was feeling good again, and so was I. But then…

Two weeks before the closing, I received a strange phone call from the President of the buyer, BDM International, who informed me that the company itself was being acquired by an even larger player, TRW. They still wanted to do the deal, but the closing would be held up. As a result, we had a second sale on our hands to TRW’s management team. Fortunately, we were able to navigate this perilous shore and return the good ship Leland to safe harbor.

Finally, a good four months later than it should have, TRW/BDM bought our client, Leland, Inc. The good news is that the wait was worth it. Ben and the shareholders came away with a great deal, and the new companies worked well together

COULD THIS WORK FOR YOU?

If you’re a privately held services company, don’t overlook the avenue of selling or merging your firm with a larger player to obtain liquidity and maximize shareholder value. Even in difficult economic times, it’s still possible to find the right buyer for your company. In the words of Ben Meluskey, “If you’ve got a strong business and a knowledgeable advisor, you can get the value you want – if you stick with it!”

For more information, contact George M. Shea at 904-491-1757 or via e-mail at george.shea@focusbankers.com.

Realizing and Preserving Value--A Workshop for Business Owners
Ten New Workshops Scheduled in Six East Coast and Two Midwestern Locations

To help business owners and CEOs assess the risks and opportunities of selling a business, FOCUS Enterprises, along with four other firms -- Shared Equity Strategies; McCullough & Nicholas, P.L.C.; Bernstein Investment Research and Management and Planning and Strategic Solutions, L.L.C. -- is hosting ten private Workshops from March through November in six different East Coast and two Midwestern locations.

Business Owners and CEOs Gain a Wealth of Valuable Information

Whether you’re driving your business to the next level, considering corporate finance options or M&A activity or simply planning your personal finances, this new Workshop supplies excellent take-home value. Workshop participants will learn how to:

• Position a company to maximize the valuation multiple
• Prepare a company to maximize the sale price
• Time when to begin preparing for the sale
• Minimize personal taxation on the transaction
• Determine exactly how much is needed to retire comfortably
• Execute the process successfully

You’ll gain useful and actionable information in intense, interactive half-day Workshops meeting from 7:30 am through 1:30 pm. In the Washington DC area, the program also is being presented in two shorter breakfast sessions from 7:30 to 9:15 am.

The Program and Format Ensure Value for Participants

We can’t over-emphasize the value of careful advance planning, even for events that may be two or three years away. For example, you need to set up trust structures well in advance of a transaction. Also, in order to understand the right "threshold value" for an M&A transaction, pre-transaction planning on income is required.

As a Workshop participant, you’ll receive five concise worksheets that supply the tools you need to assess your own specific situation, opportunities and needs during the course of the workshop. In each of the five sessions, you’ll also have ample opportunity for Q&A, plus, at the close of the Workshop, a panel discussion features a general Q&A session. Presenters also are available for informal discussion during breaks and at the end of the workshop.

Each of the five presentations listed below will contribute to your practical understanding of how to maximize, realize and extend value:

BUILDING VALUE -- Marshall Graham, Chairman, and Doug Rodgers, Managing Partner, Focus Enterprises, Inc.

CONVERTING VALUE -- James F. Higgins, Jr., Principal, Shared Equity Strategies

SHIELDING VALUE -- John E. McCullough, Esq., McCullough & Nicholas P.L.C.

PROTECTING VALUE – Kenneth A. Shapero, Planning and Strategic Solutions, L.L.C.

PRESERVING VALUE -- Joseph M. Perta, Vice President and Michael A. Bono, Vice President, Bernstein Investment Research and Management,

2004 Participants Can Select the Most Convenient Time and Location

All but two of the nine Workshops will begin at 7:30 am and continue through lunch until 1:30 pm. Two Washington DC breakfast Workshops split the content into two 7:30 to 9:15 am sessions.

*U.S. Chamber of Commerce is Co-Sponsoring Four Workshops

Workshops in Richmond, VA; Indianapolis, IN; Grand Rapids, MI; and the June 22nd Workshop in Washington, DC are being co-sponsored by the U.S. Chamber of Commerce. Chamber of Commerce members will receive a $50 discount.

Who Should Attend?

Individuals who will benefit most from this unique Workshop include presidents, CEOs and owners of companies who are considering some type of sale or recapitalization within one to five years. Relevant companies are: private companies, public companies with revenues under $100M, government contractors, venture-backed companies, individual- or family-owned companies and companies who have or are considering ESOPs.

Reserve Your Workshop Now

Participation in the half-day Workshops, strictly limited to company owners and CEOs, is $250 each for the first participant and $100 for each additional person from the same company, payable in advance.

Participation in the breakfast Workshops is $150 for the first person and $50 for each additional person, payable in advance.

U.S. Chamber of Commerce members pay only $200 each when registering for Workshops on April 13, 27, and 28 and on June 22. These four events are being co-sponsored by the U.S. Chamber of Commerce.

Participation in the breakfast Workshops is $150 for the first person and $50 for each additional person, payable in advance.

Register online at www.focusbankers.com, call 202-785-9404, Ext. 223, or send an email to Brad.Fleisher@focusbankers.com.

FOCUS Opens San Francisco Office and Adds Three New Partners

WASHINGTON DC, February 26, 2004--FOCUS Enterprises, Inc., the DC region’s premier investment banking and corporate development consulting firm providing merger, acquisition and corporate finance services for middle-market clients, is establishing a San Francisco office and adding ninth and tenth San Francisco-based Partners, David M. Roberts and Robert J Netter, Jr., as well as an eleventh Partner, William C. Stettinius, based in Baltimore, bringing the total professional staff to 14.

Both Mr. Roberts and Mr. Netter are Regional Managing Directors of the new West Coast office of FOCUS Enterprises, Inc. located at 90 New Montgomery Street, Suite 900, San Francisco, CA 94105.

“FOCUS is dedicated to becoming a national and then international firm. Adding seasoned professionals like David Roberts, Robert Netter and William Stettinius to our team helps ensure the success and unique capabilities of the firm,” explains Marshall Graham, Chairman of FOCUS. “With the addition of a West Coast office, the firm can effectively leverage national networks both for East Coast clients as well as establish national resources/networks for newly acquired West Coast clients” says Mr. Graham.

David Roberts observes, “Bob and I are extremely pleased to be joining FOCUS Enterprises. While our name is changing very slightly, our aspirations and potential are tremendously enlarged. We hope to grow the West Coast presence of FOCUS very significantly by serving our clients better, adding new clients and new partners.” Bob Netter adds, “Dave and I are especially impressed with the deep operating and financial experience of the FOCUS team. The experience of having been in the trenches is really helpful when we are negotiating on behalf of our clients."

David M. Roberts, joining FOCUS as a Partner and Regional Managing Director of the San Francisco office, is a seasoned executive, investor and transactions professional with more than 30 years of experience founding, building and advising small to mid-size companies. Most recently, he was Managing Partner of Focus Advisors, a West Coast based strategic advisory and transactions firm.

A former attorney and buy side securities analyst, Mr. Roberts also is a seasoned entrepreneur who has founded fifteen companies, including two INC 500 firms and served as an officer and director of both public and private companies. He has been involved in more than $250 million of financings, either as a principal, director or advisor. As the Managing Partner of Focus Advisors, he consummated multiple mergers and acquisitions and financing transactions in insurance services, business process outsourcing, health care services and technology services.

Mr. Roberts currently serves on the boards of Caliber Collision Centers, Inc. of Irvine, CA and Octiv, Inc. of Berkeley, CA. A graduate of Duke University, he has a JD from the Boalt Hall School of Law at UC Berkeley and an MBA from the Haas School of Business at UC Berkeley. He also was a U.S. Navy officer.

Robert J Netter, Jr., joining FOCUS as a Partner and Regional Managing Director of the San Francisco office, brings more than 30 years of executive-level financial experience from companies that span a variety of industries and market fields, including manufacturing, distribution, software development, electronics, semiconductors, food, medical devices and professional/consumer audio. Mr. Netter has worked with or consulted with companies internationally, including Europe, Japan, Australia and North America. He has both line and staff experience including CFO with four high-growth companies. During Mr. Netter’s tenure as CFO, he directed the execution of five M&A transactions across the US and Europe.

Prior to joining FOCUS, Mr. Netter was a Managing Director of Focus Advisors, providing investment banking and financial consulting services to a number of technology and commercial companies. Engagements included venture capital and private equity placements, M&A transactions, debt restructurings and placements including conventional, asset based and mezzanine debt as well as turn-around assistance. During the past seven years Mr. Netter has helped raise over $110M in equity financings.

Mr. Netter is a licensed CPA and received a BS in Accounting from Hofstra University, Hempstead, NY.

William C. Stettinius, joining FOCUS as a Partner, has CEO experience in call center operations, distribution and e-commerce and warehousing companies, serving clients across many industries emphasizing M&A, divestitures, capital raising and corporate strategy. Prior to joining FOCUS, Mr. Stettinius served as CEO for two venture-backed companies, ultimately executing their acquisition, turnaround strategies and eventual sale. As a Partner with Carolina Financial Group, he delivered M&A, corporate finance and business development consulting services.

For more than twenty years, Mr. Stettinius was a Naval Special Warfare Officer (SEAL), attaining the rank of Captain. He also commanded a SEAL Delivery Team (SDV) that maintained and operated technologically advanced submersibles. In the Office of the Secretary of Defense, Captain Stettinius managed and led multi-national organizations for both the United Nations and NATO.

After retiring from the US Navy in 1995, he joined Alex. Brown and Sons to establish institutional sales in Latin America. Following the 1998 collapse of the Banking industry in Brazil and Argentina, he partnered with several colleagues to build an Investment Bank that specialized in financing private companies and Mergers and Acquisitions.

Mr. Stettinius has a B.S. from Bethany College, Bethany, WV and is fluent in French. He also holds Series 7, 24, 63 and 65 NASD certifications.

About FOCUS Enterprises, Inc.

For 22 years, FOCUS has successfully assisted clients with corporate development consulting assignments; merger, acquisition, and divestiture engagements plus capital raising and capital formation assignments. In a mixture of services uniquely beneficial to clients, FOCUS integrates consulting and transactional expertise with superb research capabilities and precise, proven methodologies.

Unlike larger investment banks, FOCUS processes are optimized and proven effective in our target marketplace -- private companies or operating units with revenues in the $5 million to $100 million range. Eleven full-time FOCUS Partners provide well over a century of C-level operating experience in a variety of industries. Operating nationally and internationally, FOCUS works with buy- and sell-side corporate clients, private equity groups, holding companies and early stage venture capital firms in the following areas:

• Aerospace
• Government Contracting
• Healthcare
• Manufacturing and Distribution
• Media and Communications
• Retail
• Technology (hardware, software and services)
• Telecommunications

Your comments, suggestions and questions are welcome and encouraged. We want to hear from you.

You are receiving this newsletter because you have had personal contact with a FOCUS Enterprises partner or principal or have requested this newsletter on our website or have been contacted by FOCUS on behalf of a buyer, seller, corporate finance client or consulting client.

• Please contact us at: info@focusbankers.com
• Visit the Focus website at http://www.focusbankers.com