LOGISTICS & INNOVATION  

       "Innovation is the key for M&A Deals today, and for the future." (1983)

           -  Malcolm Forbes, Capitalist, Philanthropist & Mentor to me.

           "Meroe Capital deals have always been more logistically creative." (1998)

            - Abraham Jacob ("Abe") Hirschfeld, Real Estate Developer & Mentor to me.

For those who study law firm innovation, it is often depressing, as

protected by regulation and high barriers to entry into elite status, law

firms all too often fail to change in response to significant events.

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We often see this in terms of structuring deals, forms are slow to

change, and deals are often struck under an assumption, often false

these days, that litigation fears will force a resolution of any defects or

ambiguities. Even when change does come, it is in response to some

external shock, and even then, the forces against change often make it

only incremental.

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Still, despite this gloomy introduction, Meroe Capital is directing and

seeing evidence of law firm innovation in the last annual period. Much

of this innovation is in response to the financial crisis, but we are also

seeing spillover events.

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The law firms selected for our clients are on the cutting edge of

innovation and creativity if for no other reason than to keep up with us.

However, these are not your old private equity deals or deal makers.

For example, those old deals had a reverse termination fee clause that

allowed the Buyer's interest to walk away for any reason, or sometimes

in the case of a financing breakdown by paying the fee of

approximately Three Percent (3%) of the deal consideration.

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A deal recently had no reverse termination fee. Rather, the seller's

interest was entitled to seek specific performance to force its acquirer to

draw on the debt and equity commitment letters financing the

transaction.

Furthermore, the Seller's interest was a third party beneficiary of the

equity commitment letter thus, exposing the Buyer's acquisition fund

directly to potential litigation. And yet, here is the winning blow.  The

obligations of the Buyer's shell company subsidiary to pay the

consideration under the agreement, and its liability for any breaches of

the agreement, are guaranteed by one of the Buyer's interest funds.

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All that and Sixteen (16) carve-outs to the MAC clause with a 30 day

go shop stipulation. In addition, since the Seller's interest was a

Maryland company, Two-thirds (2/3) of their shareholders are required

to approve the merger. If the shareholders vote no, it is the Selling

interest that must reimburse the acquiring (Buyer's) interest for it's fees

and expenses up to One Million Dollars ($1,000,000).

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And yet, the acquiring interest preserved one (1) out: It negotiated in a

minimum cash condition for closing of $21.5Million to $23Million.

That, or a similar working capital condition, is a nice work-around for a

private equity buyer if it is made tight enough. Of course, the number is

dependent on how good the seller's finance chief is, and what structures

the consulting boutique investment bankers like Meroe Capital can

facilitate.

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The above are the type of innovations Meroe Capital M&A Services

bring to bare in a transaction. The type of innovation brought to another

transaction many years ago was commented on by the great Walter

Wriston, then CEO of Citigroup when a M&A attorney noted our

recommendation had never been done before. Mr. Wriston's reply

was, "If it's never been done before, then there's no law against it."

If its innovation to the M&A logistical process today, it will be

researched, known, recommended and/or applied in the next

MeroeCapital M&A Group Services client structure.

                                                                              - David Miller, CEO

METHODOLOGY---------  -------

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Emerging companies often pursue mergers and acquisitions in order to

grow rapidly, or they seek to be acquired as a part of their exit

strategies.

We provide emerging companies with the strategic advisory and

logistical direction and dream team selection, direction and support

associated with any plan to acquire or sell existing operations. We have

experience representing both the acquiring companies and target

entities in a broad range of industries.

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Our focus is to provide our clients with comprehensive advisory,

counseling and leadership direction for negotiated transactions, both

large and small. We assist our clients with a variety of structured

transactions, including but not limited to:

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The purchase and sale of public and private companies.

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Asset & Intellectual Property Sales.

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Divisional and Product-Line acquisitions and divestitures.

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Management & Leveraged Buyouts

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Corporate Restructuring and related acquisition financing.

M & A SERVICES----------------  ---------

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M & A services are grouped around but are not limited to:

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Research analysis of your business interest and its operating

environment to determine the range of values you will receive in

the marketplace.

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Defining the objectives of the Client Buyer or Client Seller and

translating those objectives into a unique synergy of value that can

be reapplied to strength positioning.

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Our leadership in the selection and direction of ancillary facilities

(dream teams) in deals from legal and reporting counsel to

specializations are selected from only the best and most

innovative in the industry.

ADVISORY---------------------- ---   ------

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Our M&A advisory assist clients in all aspects of an acquisition or

disposition. We frequently provide leadership in matters of:

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Pre-transaction planning and preparation, including corporate

clean-up and estate planning and privatization.

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Selection and direction of lead & specialty legal counsel in

negotiations and logistical coordination to effect the transaction

and it's after effects, if any.

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Entering into engagement agreements with ancillary investment

banking firms if required, targeting specific venues or

specializations.

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Selection and direction of accounting firms in structuring the

transaction(s) to obtain the desired accounting, reporting and tax

treatments.

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Review and analysis of patent and/or other specialized Intellectual

Property portfolios and strategic value assessment.

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Advisory on employment, non-competition and stand-still

agreements for key employees. 

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FINANCING---------------------

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Our M&A financing services provide for:

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        Review, restructure, analyze, and refine immediate and long        

        term transactional capital requirements.

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Developing and Refining transactional capital objectives and

strategy(ies).

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Effecting contact with ancillary resource providers and

coordinating transaction logistics.

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Engineering and directing the placement of the proposed

capitalization structure(s) in the transaction and beyond.

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Selection of appropriate funding interest such as Equity and/or

Debt interest and to identify, negotiate, and place the appropriate

Equity and/or Debt instruments to meet with the optimum

requirements of the project(s).

ANCILLARIES                         

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Dream teams are developed from the specifications of the instant deal

exclusively based on such factors as market sector, capitalization,

global/domestic venue, and deal objectives. We select from the best

and most innovative and effective firms in the M&A arena for their

knowledge, talent, influence, capacity, focus, integrity, and creativity.

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Talk to us.

30 WALL STREET 8TH FL.  NEW YORK, NEW YORK 10005

PHONE (212)461-7136 / FAX (212)461-2223

Info@MeroeCapital.com