ACG Denver
M&A/Growth Headlines
- EKS&H announces the release of the 2010 Business Outlook Survey
- Haemonetics announces agreement to acquire Global Med Technologies
- Netsuite and Hein partner to provide expert accounting, regulatory compliance solutions
- DGS attorney Elizabeth Titus elected Colorado GLBT Bar Association president
- The Rocky Road to Recovery
- ACG Denver announces Intern Exchange for college students
- EKS&H’s Bruce Nelson Publishes Sales and Use Tax Book
- M&A News: ABA Private Target Deal Points Study
- Headwaters MB advised CyberArts on a minority transaction with Greek gaming systems operator
- St Charles Capital announces private financing of ClearChoice Holdings
- EKS&H Partner Reappointed to PCAOB Advisory Group
- Great hires and bad hires: How to tell the difference before you make the offer
M&A/Growth
EKS&H announces the release of the 2010 Business Outlook Survey
Ehrhardt Keefe Steiner & Hottman (EKS&H) PC, the largest Colorado-based accounting and business consulting firm, is pleased to announce the release of the 2010 Business Outlook Survey.
EKS&H Business Consulting conducts this annual survey to provide the business community with market specific information and insight on what company executives are projecting for the coming year. The results from this year’s survey represent over 170 companies from a wide variety of industries. The survey report can be accessed at the following web address:
www.eksh.com/businessconsulting.
Haemonetics announces agreement to acquire Global Med Technologies
Haemonetics Corporation (NYSE: HAE) and Global Med Technologies, Inc. (OTCBB: GLOB) announced a definitive agreement under which Haemonetics will acquire Global Med for approximately $60 million in a cash tender offer. St. Charles Capital acted as exclusive financial advisor to Global Med Technologies in this transaction.
Global Med Technologies, Inc. (OTCBB: GLOB) is an international healthcare information technology company which markets a breadth of software solutions and services that span the blood supply continuum, from blood collection to the hospital transfusion center to the patient care environment. As a leading provider of blood and laboratory systems and services, Global Med’s products are deployed in 20 countries and serve over 2,100 transfusion centers, blood banks and laboratory sites.
Headquartered in Braintree, Massachusetts, Haemonetics (NYSE: HAE) is a global healthcare company dedicated to providing innovative blood management solutions for our customers. As a global leader in blood management solutions, Haemonetics helps plasma fractionators, hospitals and blood collectors to improve clinical care and lower costs by optimizing the collection, processing, and use of scarce blood resources. Haemonetics also markets information technology platforms and consulting services to help manage the blood supply chain and improve blood management practices.
St. Charles Capital, based in Denver, Colorado, provides expertise in mergers and acquisitions, raising private capital, and financial advisory services for middle-market companies nationwide. For more information, visit www.stcharlescapital.com.
Netsuite and Hein partner to provide expert accounting, regulatory compliance solutions
NetSuite Inc., (NYSE: N), a leading vendor of cloud computing business management software suites, and Hein & Associates LLP, a leading accounting and advisory services firm, today announced a partnership to provide both public and private companies with a range of customized accounting and regulatory compliance solutions powered by NetSuite’s leading cloud computing applications for financials, enterprise resource planning (ERP) and customer relationship management (CRM).
Working with NetSuite and its powerful, flexible cloud computing application suite and software development platform, Hein & Associates’ professional consultants will deliver sophisticated, vertically focused solutions for needs ranging from tax and financial reporting to growth plan development. NetSuite’s architecture will enable Hein & Associates to provide timely, Web-based software updates as regulations and best practices evolve.
Hein’s deep roots serving companies in the technology, manufacturing, distribution, and energy fields will promote specialized solutions for each of these industries.
With offices in Denver, Dallas, Houston, and Irvine, California, Hein & Associates LLP is ranked by Accounting Today as one of the 60 top accounting firms in the country. The company’s SEC practice is recognized as among the largest in the country by Public Accounting Report, and the firm is consistently recognized as a “Best-of-the-Best” firm by Inside Public Accounting. For more information about Hein & Associates, visit www.HeinCPA.com.
The partnership between NetSuite and Hein & Associates comes at a time when cloud computing is gaining increased traction as the preferred deployment model for business applications. Gartner recently forecasted the SaaS market to have a 17.7% Compound Annual Growth Rate (CAGR) through 2013, nearly five times the total application market’s 3.6% CAGR. Gartner Dataquest also recently released figures showing that NetSuite has joined the ranks of North America’s top ten ERP vendors by revenue. For more information about NetSuite Inc., please visit www.netsuite.com.
DGS attorney Elizabeth Titus elected Colorado GLBT Bar Association president
Davis Graham & Stubbs LLP associate Elizabeth Titus has been elected president of the Colorado Gay Lesbian Bisexual Transgender Bar Association for 2010. Formerly Colorado GLBT Bar Association’s secretary, Ms. Titus will continue to promote the group’s mission of providing support and a collective voice for Colorado GLBT legal professions through community involvement, activism and education.
Ms. Titus specializes in litigating cases for natural resources clients, including oil and gas, mining, and other companies and organizations. Her matters often involve permitting on public lands, cultural resources, federal Indian Law, OSHA, MSHA, land use, contract, tort and other commercial issues. Her noteworthy cases include successfully defending a NYSE company against deceptive trade practices, breach of contract, and conspiracy claims, obtaining a full defense verdict in a six-day jury trial, and assisting in a successful appeal to the Colorado Supreme Court regarding the enforceability of stipulated judgment against an insurance provider.
With Ms. Titus’ recent appointment, Davis Graham & Stubbs attorneys now serve as presidents of three specialty bar associations in Colorado. She joins DGS partner Victoria V. Johnson, who is the president of the Colorado Women’s Bar Association, and DGS associate Damian J. Arguello, who is the president of the Colorado Hispanic Bar Association. They continue a DGS tradition of leadership roles in our community and in organizations that seek to promote diversity in the legal profession.
For more information about Davis Graham & Stubbs, its practices and lawyers, please visit www.dgslaw.com.
The Rocky Road to Recovery
BY GRANT RUESCH
As we look forward to the 2010 Rocky Mountain Corporate Growth Conference in March, the famous phrase coined by Clinton campaign strategist James Carville, - “It’s the economy, stupid” - seems more apropos than ever.
Over the past two years, the global economy has experienced the most vexing confluence of economic problems at any time since the end of World War II. The U.S. economy - both Main Street and the financial system - remain under severe stress, as does most of the world. The long-term impact on U.S. households and the business environment is predicted by most economists, government officials and business leaders to be profound. We chose the conference theme, Managing Beyond the Recovery - New Realities, New Rules, New Values, carefully to reflect the coming change.
New Realities, New Rules and New Values will shape the new normal. Beyond the recovery, economists and business leaders alike envision a lower-growth U.S. economy, higher structural unemployment, labor shortages, a weaker dollar, rising public spending, higher taxes, a more skeptical and less trusting investor community, and a higher rate of inflation than what existed during the several decades leading up to the Great Recession.
A COMPELLING DIALOGUE FOR ACG MEMBERS
Just as the conference theme was carefully chosen, so were the six panel-session topics that will be featured in the two-day conference:
The Changing Landscape of Middle Market Investment will assess the climate for deal making in the middle market. It will address the question of how soon we will see a resurgence of deal making as the economy improves and the middle market mergers-and-acquisitions cycle pulls out of the current slump.
How Expectations Have Changed in a Buyer’s Market for Professional Services will explore how the role of the professional services provider and the perception of professional services is changing in the face of a steady stream of pressures including the demand for greater virtual access by clients, a belt-tightening mentality, more sophisticated clients, the adoption of social networking and the commoditization of services.
Crossing to Safety: Prepping for Success will delve into how certain companies have continued to grow, with loyal customers and engaged and productive employees, despite some tough challenges in managing the bottom line. Panelists will explore what these companies are doing that can be adopted as best practices for achieving high levels of employee satisfaction and empowerment. It will address the importance of instilling a strong sense of vision, mission and values into their work force.
C-Suite: Evolution to a More Interdependent Team will take the pulse on what’s really happening in the C-Suite. You’ll get firsthand insight into emerging new forms of collaboration and interdependency within the executive management group. We will examine whether tough economic times have cultivated a new mindset toward crossover collaboration between functional areas, as opposed to functional disciplines that have traditionally operated as silos below the level of the CEO. We will also address the question of whether the decision-making process is becoming more collaborative and the thinking behind decision-making more integrated.
Making the Most of Business Valuation explores the impact of lower valuations during the economic contraction. Panelists will address actions that business owners have taken in the face of lower valuations - whether it’s lowering prices, restructuring terms and conditions of sale such as seller paper and earn-outs to bridge the valuation gap, or reinvesting in the business and postponing the sale to build value for the longer term.
CEO Retrospective: What Tested Your Mettle During the Recession is an up-close-and-personal examination of how some CEOs managed their companies through the longest and most turbulent economic downturn since the Great Depression. You’ll get insight about the hard-nosed, straightforward and objective actions that CEOs take in response to revenue and profitability shortfalls such as managing cost structures and adjusting business strategies. You’ll also see what tested their mettle as leaders in terms of bolstering employee morale, wearing a brave face, dealing with uncertainty, keeping their emotions in check and maintaining needed balance in their personal lives.
A COMPELLING CHALLENGE FOR AMERICA
The U.S. economy, including our financial markets, is at a unique point in history. All at once we have concerns and questions about bedrock issues that are pivotal to the future of American Enterprise. In recent meetings with business leaders throughout the Denver Metro area, one is struck with the consistency of top concerns being expressed and the strong focus on questions to which there are no clear answers. Here are some of the concerns and questions being posed as business leaders contemplate the intermediate-term future:
• The strong belief that the only recovery that is durable and that will increase our long-term standard of living is the one led by private demand.
• The concern that efforts by governments and central banks to stoke economic recovery through low interest rates and stimulus spending will once again create asset-price bubbles in real estate, stock and currency markets.
• Whether it would be wise to concentrate more “super regulator” power in the Federal Reserve, which itself has at times contributed to economic instability - such as keeping the federal funds rate too low for too long under the Greenspan era, thus spawning the housing boom.
• Skepticism as to whether the Federal Reserve really knows the right time to start mopping up excess liquidity ($1 trillion in excess reserves has been added to the system) so as not to stall the recovery but also not to trigger inflation.
• How America can begin working with other nations to re-balance international trade and global growth so it is less dependent upon U.S. consumers.
• Whether, because of de-leveraging, outsourcing and technological advances in a services-dominated U.S. economy, the structure of the business cycle has changed such that it no longer operates as it once did to replenish the jobs that were lost during the downturn. Do we even have the right tools to manage business cycles?
IN CONCLUSION
There is no question not all businesses have been impacted the same way over the past two years. Great results are being reported across a number of companies in such industries as broadband provisioning, data storage, outsourcing and health-related services, many of which have seen strong top-line growth and sustained profitability. At the same time, many companies comprising the retail, hospitality, auto and leisure and recreational sectors have been hammered badly. Certainly, the environment for startup companies has been rather challenging due to the tight rein on venture capital funding. Tighter money has meant that only the strongest business concepts have been funded.
We look forward to the March conference, which will bring together the broad base of ACG constituents - operating company executives, leaders of professional services and investment firms, private equity deal makers and intermediaries - to relate their experiences and share ideas about how enlightened business management, innovation, deal making and venture capital investing can build new momentum during and beyond the recovery.
Grant Ruesch is the owner of DGR Consulting, and he is the co-chair of the 2010 Rocky Mountain Corporate Growth Conference
ACG Denver announces Intern Exchange for college students
In this competitive job market, what employers look for first is relevant experience. This means internships can be the best line to a job for the growing number of young people competing in today’s market.
ACG Denver’s new Intern Exchange will serve as a clearinghouse to match opportunities for paid and unpaid internships and jobs with the needs of small- and middle-market companies and nonprofit organizations. Undergraduate and graduate college students, as well as just-graduated students, are eligible to participate in the program.
Intern Exchange was the brainchild of ACG Chairman, David Mead, after many years of helping clients of The Mead Consulting Group identify opportunities to use college students as interns. Says Mead: “These interns have made big contributions to our client companies and, in a number of cases, have been hired by the companies after graduation. I saw a role in this for ACG to serve the business community in a new way.“
Indeed, findings from a December 2009 poll from The Washington Center show that 96 percent of organizations polled are “more likely to hire a recent college grad with internship experience,“ and many are creating a pipeline of potential employees through intern programs. “It’s becoming clear that getting an internship can be a critical success factor in the hunt for jobs,“ according to Mead, “not to mention a way for organizations to increase their comfort level when investing in a new employee.“
While many Colorado university business schools have excellent structured-internship programs, there are a number of highly qualified graduate and undergraduate students that are looking to connect with the local/regional business community. Members of the ACG Denver Intern Exchange committee will help companies identify and develop positions appropriate for college interns. ACG Denver will post available intern/job opportunities for companies and facilitate an exchange where interested companies, colleges/universities and students can connect online at: http://chapters.acg.org/denver/internexchange.aspx.
EKS&H’s Bruce Nelson Publishes Sales and Use Tax Book
Ehrhardt Keefe Steiner & Hottman (EKS&H), the largest Colorado-based accounting and business consulting firm and the sixth largest firm headquartered in the Western United States announces that Commerce Clearing House (CCH) has published the 2010 edition of its Sales and Use Tax Answer Book. This is the book’s thirteenth edition with state and local tax expert Bruce M. Nelson of EKS&H as lead author, along with co-authors James T. Collins and John C. Healy. The book addresses the critical sales and use tax issues confronting tax practitioners and their clients and includes discussion of current developments, guidance on compliance procedures, analysis of recent court cases, and ideas for tax planning.
Bruce has more than 25 years of experience in state and local tax and is on the adjunct faculty of Regis University, where he teaches courses in individual, partnership, and corporate taxation. He is also a frequent seminar speaker and teaches continuing education classes in state and local tax for the University of Denver’s Graduate Tax Program, the Colorado Society of CPAs, and the American Institute of CPAs.
M&A News: ABA Private Target Deal Points Study
The 2009 Private Target Deal Points Study, a project of the M&A Market Trends Subcommittee of the Committee on Mergers & Acquisitions of the American Bar Association’s Section of Business Law, is widely recognized as the gold standard for market metrics of key negotiated issues in M&A agreements and has achieved notable popularity among investment bankers, private equity investors, CFO’s and other non-lawyer deal professionals as an “unfair advantage” in negotiating private company acquisition agreements.
The Study analyzes publicly available acquisition agreements for transactions of between $25 and $500 million in size completed in 2008 that involved private targets being acquired by public companies. The final Study sample of 106 acquisition agreements excludes agreements from transactions in which the Target was in bankruptcy, reverse mergers, and transactions otherwise deemed inappropriate for inclusion.
Issues covered by the Study include:
• Purchase price adjustments and earnouts
• Material Adverse Effect and other Pervasive Qualifiers
• Catch-all representations and warranties
• Closing conditions
• Covenants
• Termination
• Sandbagging and non-reliance
• Indemnification
• Dispute resolution
ACG Denver member Clifford R. Pearl of Hensley Kim & Holzer, LLC was an active participant in the working group that prepared the study and would be delighted to provide a complimentary copy upon request. To receive your complimentary copy of the Study please contact Clifford R. Pearl of Hensley Kim & Holzer, LLC at cpearl@hkh-law.com.
Headwaters MB advised CyberArts on a minority transaction with Greek gaming systems operator
Headwaters MB (www.headwatersmb.com) advised CyberArts Licensing LLC on a minority capital formation from Intralot SA, a publicly traded provider of state-of-the-art integrated gaming systems to lottery organizations worldwide. The Headwaters process resulted in a transaction that positions CyberArts to be the leading software technology provider across multiple gaming markets worldwide.
CyberArts is a software development company located in Berkeley, California. Its foundation suite of gaming software products powers online and server based games with exceptional scalability, reliability and graphical flexibility. CyberArts supplies its software products to licensed operators worldwide. INTRALOT, a Greece-based publicly listed company, is the leading supplier of integrated gaming and transaction processing systems, innovative game content and sports betting management, to state-licensed gaming organizations worldwide.
St Charles Capital announces private financing of ClearChoice Holdings
St. Charles Capital is pleased to announce the private financing of ClearChoice Holdings with equity capital provided by individual investors. St. Charles (www.stcharlescapital.com)
served as the exclusive financial advisor to ClearChoice Holdings in arranging the financing.
Through this transaction, ClearChoice raised additional equity capital to fund the continued rollout of ClearChoice Dental Implant Centers into new markets. ClearChoice Holdings currently manages the business and non-clinical operations of 14 treatment centers in the U.S. and has plans to provide such services to several new centers per year.
The management company and its associated doctors are the U.S. leaders in providing consumers with an integrated, immediate function treatment approach, and are the first to develop a national network of implant centers. The Company has established an extensive corporate infrastructure to manage the administrative and non-clinical operations of the Centers. ClearChoice was founded in 2004 by a group of experienced dentists and business professionals, and is uniquely positioned as the largest dental implant services company in the U.S.
EKS&H Partner Reappointed to PCAOB Advisory Group
Ehrhardt Keefe Steiner & Hottman (EKS&H) PC, the largest Colorado-based accounting and business consulting firm and the sixth largest firm headquartered in the Western United States announces the appointment of Gaylen R. Hansen, Audit Partner and Director of Quality Assurance, to a third term on the Public Company Accounting Oversight Board’s Standing Advisory Group.
This group advises the PCAOB on professional practice standards that govern the auditors of all U.S. public companies. Gaylen is also a board member of the Colorado State Board of Accountancy, Director of the National Association of State Boards of Accountancy and a member of the AICPA’s Professional Ethics Executive Committee. Recently, he served as a member of the U.S. Treasury’s Advisory Committee on the Auditing Profession.
EKS&H was formed in 1978 and is a nationally recognized firm, with 45 partners and over 350 professionals located in offices in Denver, Boulder, and Fort Collins.
Great hires and bad hires: How to tell the difference before you make the offer
By Kathleen Quinn Votaw
You hire someone. But it doesn’t work out. He or she leaves.
What is it that you remember and say can say about that person in the past tense? It’s rarely the fact that the employee didn’t know how to work the numbers or that he or she couldn’t put the pieces of a widget together. No, it’s almost always that person’s soft skills that generate conversation — his or her personality, character and values.
Two recent scenarios from my personal experience serve as good examples: A multi-generation family-run, team-oriented company in Michigan was about to hire a sales person who had all the skills needed to fill the role, as well as an impressive track record. Before making the hire, they wisely chose to get an assessment of him. In an interview that was part of the assessment, the candidate went into a rage when questioned more deeply about his background. His temper was missed in the normal interview process. Discovering this major flaw before they made the mistake of hiring this key person most likely saved the company hundreds of thousands of dollars.
Another company was not so careful and made a bad hire. This company valued giving every employee a voice: Everyone was part of the team and decisions were made by consensus. When a candidate with a strong hierarchical bent was hired, he lasted just 30 days. The disruption was significant, as were the costs.
Go beyond the tactical
Most companies tend toward the tactical in their hiring practices, focusing on long lists of competencies, specific experience required and other hard skills. These are important, of course.
Equally important are the soft skills. How will the person you hire fit into your culture? No one would list drama queen, insensitivity, trouble meeting deadlines or poor ethics as qualities they’d like to bring to a company. But, by not checking out the soft skills, those are exactly the traits you risk hiring. You may also lose your A-players when you make bad hires—they don’t have to tolerate a difficult work environment.
Begin with the end in mind
So what’s the solution? Begin with the end in mind. Start by thinking about the soft skills that will fit into your organization. Then consider the hard skills necessary for the job. Culture, then candidate.
Your company’s values should serve as the foundation for hiring decisions: Who are your customers, and how do you choose to serve them? What gives synergy to your teams? Who are the great hires in your organization and what is it about them that helped them succeed in your culture? And what was it, specifically, that kept others from fitting in? These are things you need to understand even before you write the job description—and they will tell you what to look for in the interview.
Here are some of the things to look for in the interview process and assessment that will help you determine whether a candidate is a fit for your company’s culture:
— How a candidate treats other team members;
— How the people a candidate will work with will most likely relate to him or her;
— How a candidate’s interpersonal skills will impact his or her performance and that of the team;
— What motivates the candidate and what turns him or her off;
— How the candidate processes information and how well he or she communicates;
— How the candidate reacts under pressure;
— How does the candidate demonstrate leadership;
— And how do all of these things mesh with your culture?
Understanding a candidate’s hard skills is definitely the easy part of the hiring process.
Take your time interviewing. Ask candidates about their previous job, what they liked and didn’t like—and then let them talk. Don’t be afraid of silence. Let the candidate fill the gaps.
You’ll discover much of what you need to know. And as you interview and assess candidates, keep in mind that a cultural fit can’t be developed.
As Jack Welch said, “You cannot have a black hole in your organization where a star should be.” A star for your company is someone with the hard skills to do the job and the personality, character and values that match your culture. Anything less is a high-risk business decision.
Kathleen Quinn Votaw is founder and CEO of TalenTrust, a recruitment solutions firm with offices in Lakewood and Conifer, that works with companies to acquire key talent for accelerated growth. Kathleen is president-elect of the Association for Corporate Growth (ACG), Denver. Reach Kathleen at kvotaw@talentrust.com or 303-838-3334.
