Page 2 of 3 MAJOR RISKS/OPPORTUNITIES OF THE PROJECT taken into consideration. MAJOR RISKS MAJOR RISKS CONTINUED Inadequate due diligence. When purchasing preexisting Economy. Inflation has given companies better pricing assets, it's the seller who holds most of the information. power, but muted demand. Financing costs may Prior to the transaction we need to learn as much as continue to rise. As a 'not necessary for life' business PROJECT OVERVIEW possible about financials, contracts, customers, we will have to find creative ways to reach buyers. The insurance, and other pertinent information to ensure we economy plays a huge role in our success. TASK TIMELINE IMPORTANCE have an in-depth understanding of the deal on the table. Develop project plan 2 weeks A plan allows us to be crystal clear about our goals and This also plays into how much we pay for this acquisition. what we are aiming to achieve Lack of due diligence can cause an overpayment of this Identify key stake holders 1 week It is important to know who has a vested interest in the deal. performance of the business. Overpayment. This can be caused by a lack of due Talent shortages. There have been waves of layoffs diligence or putting a rush on the transaction to simply from big tech to financial services and manufacturing. push the deal through rather than work out an Navigating new workplaces can be extra challenging. arrangement that creates value while avoiding additional restructuring is difficult. Making sure we can keep costs. Having a tight schedule like 18 months (about 1 products that are in-demand is essential for customer and a half years) could cause the team to feel this push. satisfaction. If our manufacturers can't find employment it may slow our production. Conduct target company evaluation 4 weeks Research allows us to make sure there are no visible red flags. Integration issues. This can happen both operationally Involving the finance team too late in the process. The and culturally. This is a major organizational change with finance department is often thought of as a gatekeeper Perform due diligence 6 weeks Investigating into the company's finances/ financial the potential to alter processes underlying how both for capital allocation, and many business professionals situation allows us to know what we will need and how businesses operate. hold off on its involvement for fear of halting we will pursue to negotiate. proceedings. But the knowledge of finance and risk Negotiate deal terms 8 weeks Negotiating and leveraging what we find may allow us assessment can help navigate the complex transactions to acquire the business at a below market price. and help increase market share as we grow. Finalize and sign 2 weeks We need to finalize the deal and sign to lock in the negotiated price. Transfer ownership 12 weeks This is important as KBL wants sole ownership. BUDGET/FUNDING SCHEDULE Integrate company 10 weeks Important for when we need to expand. Train new personnel 10 weeks Having employees ready for work allows us to move forward faster. Finalize transition 12 weeks This is to make sure we cross our T's and dot out I's so Quarter 1 Quarter 2 Quarter 3 Quarter 4 we can perform efficiently. . Develop . Perform due . Finalize and . Integrate MILESTONES project plan- dilligence- 6 sign targert 2 weeks weeks acquisition company- 10 Quarter 1 Quarter ? Quarter ? Quarter A . Identify key . Negotiate agreement- 2 weeks stakeholders- deal terms- 8 weeks . Train new 1 week weeks . Transfer personnel- . Conduct ownership- 10 weeks target 12 weeks . Finalize Rubric company transition- 12 evaluation- 4 weeks weeks