ACHIEVING SUPERIOR OUTCOMES

At Dragonfly Capital, we are entrepreneurs who have chosen to serve other entrepreneurs. We operate by the same principles that have guided us successfully since day one.

Mergers and Acquisitions
Seller Services

The scope of sell-side assignments varies depending on the goals of each business owner. In the past, Dragonfly Capital's mandates have ranged from resolving family business succession issues through complete divestitures to providing business owners with liquidity and estate diversification through minority or majority equity recapitalizations. The scope of our involvement has ranged from full-scale representation, in which we prepare the information memorandum, identify potential buyers and negotiate the transaction, to special assignments where we may be retained to negotiate a specific transaction with a previously identified buyer or investor.

A typical sell-side assignment involves four phases:

The Decision to Sell - During preliminary discussions prior to its engagement, we work closely with the prospective client to bring focus and objectivity to the decision of whether to sell. At this stage, we use our experience in:

• Exploring the client's goals and reviewing the available alternatives.
• Reviewing the timeliness of the transaction.
• Educating the client about the issues involved in completing a transaction.
• Discussing valuation parameters.

Due Diligence / Preparing to Sell - A definitive decision to sell and a formal engagement trigger the due diligence stage of the process. The experience that our investment bankers bring to this process enables them to recognize and capitalize on values that others may not see. The due diligence effort involves:

• Assessing the company's strengths and weaknesses.
• Analyzing the company's historical earnings and projected future performance.
• Reviewing the company's operations and management infrastructure.
• Researching the company's industry and competitors.

Marketing the Business - Dragonfly Capital implements a rigorously planned marketing strategy. We prepare a comprehensive confidential information memorandum that describes the client's business and highlights the strengths of the company. Drawing on its extensive network, we prepare a well-researched list of potential acquirers that includes strategic buyers, foreign corporations, and private investment groups. Throughout the marketing process, the investment banking team's goals is to:

• Contact only qualified parties who have the financial means to consummate a transaction.
• Maintain confidentiality during the process.
• Contact acquirers within a short time frame to minimize rumors and maintain momentum.
• Insulate management from the marketing effort, allowing it to focus on operations.
• Obtain indications of interest by specific deadlines.
• Create an "auction" environment where several buyers compete to acquire the company.
• Select the winning bid and negotiate an agreement in principle.

Final Negotiations and Closing - After the selection of the most desirable buyer, the agreement in principle is negotiated and formalized into a definitive agreement. Dragonfly plays a critical role during final negotiations and buyer due diligence when transactions often falter. During this stage, we guide the deal to closing by:

• Negotiating the agreement in principle into a definitive agreement.
• Introducing, if necessary, competent legal and accounting expertise.
• Assisting management during buyer due diligence.
• Addressing sensitive issues such as employee continuation, representations and warranties, and the form and timing of consideration.

Identified Buyer Situations
At times, a seller may have already identified a buyer and even agreed on some of the basic transaction terms. In such a situation, the seller will still benefit from engaging Dragonfly Capital. Our professional assistance helps the seller avoid numerous pitfalls in the transaction process; gain a clear, objective view of the value of the business and, if appropriate, expand the potential list of buyers. In many cases, the engagement of an investment banker can motivate the buyer to complete a transaction expeditiously and circumvent a potential auction process.