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GUIDE
SECOND EDITION

LIFE VALUES
“Wisdom cannot be imparted. Wisdom that a wise man
attempts to impart always sounds like foolishness to someone else...
Knowledge can be communicated, but not wisdom. One can find it,
live it, do wonders through it, but one cannot communicate and teach it”
- Hermann Hesse, Siddhartha
DIVESTITURE » SUCCESSION » EXIT PLANNING » SELL
1.888.859.5388 | www.pavilionservices.com

WHAT’S INSIDE
The Journey of Life for a Business Owner
2
Begin with the End in Mind
4
What is an Exit Plan?
6
How to Build Recurring Revenue: A Key to a Valuable Business
8
Working Together as a Team
10
Valuation - Risks & Rewards
14
The Pavilion Sale Process
16
The Silent Auction Process
18
Risk & Rewards
20
How Does Pavilion Obtain Extra Value for Each Client?
22
It Takes a Team
23
Pavilion Factsheet
24
Our Values
25
IT TAKES A TEAM
The process of preparing and selling a business is complex and requires a dedicated team
of professionals. Deal success is dependent on having the right team working together to
facilitate the sale process. The team players are different on each transaction:
• Accountant
• Valuation specialist
• Merger & Acquisition lawyer
• Merger & Acquisition specialist
• Marketing team
•Wealth management
Designed and created by Firstbase Business Services (www.firstbase.ca)
Copyright Firstbase 2016
TRANSITION PLANNING GUIDE 1

THE JOURNEY OF LIFE
Have a
family
Start a
business
Invest
in the
business
Grow the
business &
wealth
Design
transition &
estate plans
GENERATION 1
MAKE SUCCESSION A SUCCESS
If you have invested a serious portion of your energy, time and life into
building and nurturing your business, the choices you make relating
to who to work with on the last phase of your succession journey can
make a significant difference.
This guide details the specific key issues and challenges that can
increase your final sale price and terms by several million dollars.
As you begin the journey towards retirement, it is essential to plan a
head for the best options for all owners and shareholders.
“
Selling a business is a marathon not
a sprint. A journey that takes careful
preparation and planning.
“
“Nowadays people know the price of everything and the value of nothing.”
- Oscar Wilde
2
TRANSITION PLANNING GUIDE

FOR A BUSINESS OWNER
Assign team
to transition
business
Transition
business
Decrease
business
involvement
Retirement
& freedom
NEW SHAREHOLDERS
Establish
a living and lasting legacy
BEGIN WITH THE END IN MIND
Planning is essential to enable a successful outcome. As a business
owner, it’s important to ensure that all the elements are in place to
achieve the best result.
Many businesses fail to sell for a variety of reasons:
• Financial performance
• High levels of risk and volatility
• Marketplace conditions
• Inadequate management team
This document outlines some of the key aspects needed to consider
and prepare for the best outcome.
“
“
Coming together is a beginning.
Keeping together is progress. Working
together is success.
- Henry Ford
However good our futures research may
be, we shall never be able to escape
from the ultimate dilemma that all our
knowledge is about the past, and all our
decisions are about the future.
- Ian Wilson
“
“
“Place a priority on discovering what a win looks like for the other person.”
- Harvey Robbins
TRANSITION PLANNING GUIDE 3

BEGIN WITH THE END IN MIND
Planning includes not only when and to whom you intend
to sell or transition your business, but also ways to maintain
your company’s value through tax planning and being
prepared for unforeseen events. Through this process, you’ll
gain peace of mind that both you and your company are
ready for transition.
There are several factors to consider when planning to exit or
retire from your business:
• Business partners or key executives
• Your business plan
• Your family situation
• The structure of your company
• Your retirement plans
• Tax laws
• Your health
• Business debt
• Market conditions
Most business owners will only ever sell one business and as
a result of that will not have the experience of the numerous
challenges and pitfalls involving finance, legal and taxation
issues that impact the business sale process and outcome.
Understanding the value of the business in the open market
and ensuring the right mix of elements will lead to the key
objective of maximizing the value on the sale.
THERE IS ONLY ONE SALE THAT MATTERS
Despite plans to exit their firms within the next decade, few
business owners have developed a formal succession plan;
that could greatly diminish their returns on a business sale. It
is vital to plan ahead with the exit planning process several
years in advance to ensure all the key elements are in place.
In this document there are several sections and chapters to
be a guide and resource for business owners to facilitate and
manage the outcome.
WHY DOES IT TAKE A TEAM?
Selling a business is one of the most complex transactions
imaginable and requires a diverse team to enable a
satisfactory result. Deal success requires having the right
team on board including:
• Accountant
• Valuation specialist
• Mergers & Acquisition lawyer
• Mergers & Acquisitions specialist
• Marketing team
• Wealth Management
Each of these specialists will play a pivotal role to steer your
transaction from concept to completion. It is vital that the
selection process of the team be assessed for their prior
experience in transactions involving Mergers & Acquisitions.
An important element to remember is that the buyer
will have a similar team representing them during the
negotiation process; therefore selecting the best quality of
team members will be a determining factor in achieving the
best value and terms.
“Insanity is doing the same thing over and over again and expecting a different result.”
- Albert Einstein
4
TRANSITION PLANNING GUIDE

5

WHAT IS AN EXIT PLAN?
An exit plan asks and answers all the business, personal, financial, legal, and tax questions
involved in selling a privately owned business. It includes contingencies for illness,
burnout, divorce, and even the owner’s death. Its purpose is to maximize the value of
the business at the time of exit, minimize the amount of taxes paid, and ensure that the
business owner is able to accomplish all of his or her personal and financial goals in the
process.
An exit plan can be complex and usually requires advice from a number of different
specialties. A well-designed and implemented exit plan enables business owners to:
• Control how and when they exit
• Maximize company value in good times and bad
• Minimize, defer, or eliminate capital gains taxes
• Retain control by generating a number of strategic exit options
• Ensure they achieve all of their business and personal goals
• Reduce their stress and that of their employees and families
• Ensure continuity of the business
On the other hand, the failure to create a well-defined exit plan virtually guarantees that
business owners will:
• Exit their companies as a result of pressure from outside circumstances, not as a
result of their own desires
• Exit their companies on a timetable that’s forced on them instead of one that meets
their needs
• Undervalue their companies and leave hard-earned wealth on the table
• Pay too much in taxes
• Lose control over the process by being reactive and limiting their exit options
• Fail to realize all of their business and personal goals
• Suffer unnecessary psychological stress
• Watch a lifetime of work disintegrate as a result of poor business continuity planning
• Lose confidentiality during the sale or exit process
A recent survey showed the number one reason private business sales fail or only partially
succeed is a lack of planning on the seller’s part.
6
TRANSITION PLANNING GUIDE

TRANSITION PLANNING GUIDE 7

HOW TO BUILD RECURRING REVENUE:
A KEY TO A VALUABLE BUSINESS
Recurring revenue is the Holy Grail for business owners looking to have
a valuable and desirable company.
A customer base with a subset of recurring revenue that is contractual
and repeating in nature increases the probability that the business will
have stable, predictable revenues and cash flow into the future.
From a buyer’s perspective, this reduces future risk and therefore
enhances perceived value. The value associated with acquiring the
available cash flow is directly related to risk.
Although all recurring revenue will have a positive impact on business
value, some forms are more desirable than others. Here is a list of the
types of recurring revenue in an order from good to best:
CONSUMABLES
If you sell a consumable product, whether it is diapers, commercial
cleaning supplies, or office supplies, start tracking your repurchase rate
from existing customers. This will be a number that buyers will use to
calculate your projected sales into the future — and to calculate how
much they’re willing to pay to buy your company today.
“
Recurring revenue is the Holy Grail
for business owners looking to have a
valuable and desirable company.
- Rose Stabler
“
8
TRANSITION PLANNING GUIDE

SUBSCRIPTIONS
Even better than having loyal customers who repurchase is having revenue that is guaranteed into the future.
For example, loyal subscribers to magazines, newspapers, and other publications get a renewal letter each year
and pay upfront for the next 12 issues. They make the conscious decision to renew into the future for a certain
period of time.
Automatically renewed subscriptions are even more attractive than periodic renewals because they require
a conscious decision to cancel rather than renew. For example, Mozy.com automatically backs ups office
computers online on a daily basis and charges a fee each month. This subscription service has no end date
unless the client tells them to stop providing the service. By tracking historic cancellation rates, revenues can be
predicted well into the future, which is why these types of revenue streams enjoy higher valuations.
CONTRACTS
The only thing more valuable than an automatic renewal subscription is a hard contract for a defined term.
Wireless cell phone companies come to mind as one of those industries that push hard to get you on a multiyear
contract. When a company is acquired, the owner and some employees may leave after the acquisition,
however customers with plenty of time remaining on their contracts are security for the acquirer. As you ascend
the recurring-revenue hierarchy, the value of the business will go up accordingly.
RECURRING REVENUE MODELS FOR YOUR BUSINESS
Do you think that recurring revenue is tough to achieve in your business? Here are some examples of recurring
revenue models:
• Maintenance contracts
• Annual license agreements
• Warranties
• Subscriptions
• Landscape maintenance companies
• Pool service companies
• Janitorial companies
• HVAC companies that perform routine maintenance of
equipment
• Accounting firms that provide annual tax return preparation and
audits
• Security firms that monitor home and commercial businesses on
a monthly basis
• Software companies that provide annual user support and
software upgrades for a maintenance fee
BENEFITS OF RECURRING REVENUE
The recurring revenue customer base you build for your company will:
• Increase the probability that you will have stable revenues and cash flow
• Decrease future risk in the mind of a potential buyer
• Provide you with an opportunity to sell additional products or services to your existing customer base
• Keep you more attuned to your customer needs while helping you ward off competition
• Provide a corporate buyer with the opportunity to cross-sell its products to your customers
• Provide a justification for a higher sales price of your business
“Ensuring your company has a predictable and stable revenue base will mitigate
risk in your business and leads to a much higher valuation.”
TRANSITION PLANNING GUIDE 9

WORKING TOGETHER AS A TEAM
ACCOUNTANTS
In order to maximize the benefits of the sale value, forward planning is
essential. It’s important that sellers seek advice from their accountant,
regarding tax planning or structuring the business for sale.
When you are planning to exit and sell your business, it usually takes
between two to three years of advance planning. Advance planning
is essential to ensure the most effective business corporate structure
meets with CRA accepted standards that will enable full access to the
Capital Gains Exemption (CGE).
Currently the CGE is set at $800,000 tax free benefit for each
shareholder based on a share sale transaction. However, in order to
gain access to these tax free funds, the sellers business must meet a
wide range of criteria in order to achieve a successful outcome. Her e
are some of the examples of the challenges involved:
1. The business structure must be “on side” from a CRA perspective in
order to qualify.
2. Each shareholder must have held the shares in the business for
two (2) years prior to selling the business to a third party.
3. The business model must pass the buyer scrutiny of “due
diligence” and only when the buyer is satisfied that the risks
involved in the purchase of the business will they consider a share
sale. If the risk is unacceptable to the buyer, then they will proceed
with an Asset sale that doesn’t have the same tax free benefits.
4. If the business has a track record of any substantive legal action,
then this illustrates risk to the new buyer and will probably result in
an Asset sale.
There are a wide range of issues involved when selling your business
that are impacted by the sellers accounting records, for example:
Every business has to pay taxes, but a solid tax strategy will help your
client pay what’s fair. There are two possible scenarios, Share Sale or
Asset Sale.
While a Share sale is the obvious preference, often business
circumstances dictate that buyers will only consider an Asset sale.
“
“
Where there is no guidance, a
people falls, but in an abundance of
counselors there is safety.
- Proverbs 11:14
Opportunity is missed by most people
because it is dressed in overalls
and looks like work.
- Thomas Edison
“
“
“The difference between failure and success is doing a thing
nearly right and doing it exactly right.”
- Edward Simmons
10
TRANSITION PLANNING GUIDE

DOES YOUR BUSINESS MEET THE LOW RISK CRITERIA
THAT BUYERS SEEK?
• A consistent trend of increasing sales and profits over many years
• Dominant market share in its trade area
• A diversified customer base
• Excellent receivables management
• Good banking credit and payables history
• Low employee turnover
• More than adequate working capital
• Financial ratios compare favourably with other industry averages
There is a wide range of issues involved when selling your business that
are impacted by your accounting records, for example:
Every business has to pay taxes and developing a solid tax strategy
will help your client pay what’s fair. It’s important to plan ahead for a
tax efficient strategy with your client. There are two possible scenarios,
Share Sale or Asset Sale. In many circumstances, providing your
client with a Review Engagement process carries more strength and
substance than Notice to Reader.
While a Share sale is the obvious preference, often as a result of the due
diligence phase, the clients business circumstances dictate that buyers
will only consider an Asset sale because of high perceived risks.
“
Without advice plans go wrong, but with
many advisors they succeed.
- Proverbs 15:22
“
SERVING OUR CLIENT’S BEST INTEREST
Pavilion has acted for many respected businesses to structure
and execute significant corporate financial merger & acquisition
transactions in the small / mid-cap marketplace.
The advantages of working with Pavilion include:
• Access to objective advice, professional insight and judgment
• Strategic partner that keeps the clients best interests in mind
throughout the transaction
• Essential market intelligence both locally, nationally and globally
• Maximize the transaction value
• Access to pre-qualified investors and strategic buyers
It’s a fact, Pavilion has the skills, talent and know-how to negotiate and
achieve a significantly higher selling price than any other organization.
Working together to serve the
common purpose of the clients goals.
“The great accomplishments of man have resulted from the
transmission of ideas and enthusiam.”
- Thomas J. Watson
TRANSITION PLANNING GUIDE 11

LAWYERS
Legal issues are always at the forefront of M&A deals. The lawyer is a
very important advisor to both Seller or Buyer. The lawyer should be
someone who is well versed in M&A; only use an attorney who has
actually engaged in M&A transactions.
Buying and selling a business is one of the most complex transactions
that exist in the marketplace today. It’s a complicated process with
multiple concurrent moving pieces in the transaction that effect:
• Taxation matters relating to the CRA
• Human Resources and Employment Contracts
• Real Estate – Sale or Lease
• Trusts
• Deal / Transaction Structure: Share Sale or Asset Sale
• Terms of Payment: Vendor Financing, Earn Outs and other
conditions
• Purchase / Sale Agreement
“
“
“
There is gold and abundance of costly
stones, but the lips of knowledge
are a precious jewel.
- Proverbs 20:15
Earnings can be pliable as putty when
a charlatan heads the company
reporting them.
- Warren Buffet
Rule No.1: Never lose money. Rule No.2:
Never forget rule No.1
- Warren Buffet
“
“
“
“Proficient is defined with one word: skilled. In order to become skilled you must
have more than knowledge, you need to apply that information.”
- Jac Fitz-Enz
12
TRANSITION PLANNING GUIDE

WEALTH PRESERVATION
While every business has to pay taxes, a solid tax strategy should help
to pay what’s fair. There are many aspects to consider to prepare a
clients business for transition planning, including:
• Wills
• Trusts & Corporate Structure
• Estate Planning
• Tax Strategies
In many instances, either accountants or lawyers are key proponents of
best practice in this regard and help structure the clients’ tax strategy
–and enabling more revenue toward their bottom line.
“
And if anyone forces you to go one mile,
go with him two miles.
- Matthew 5:41
“
MERGERS & ACQUISITION - IT TAKES A TEAM
The lawyers for both sides (buyer and seller) work together and craft
the details of the purchase agreement.
These agreements are very complex and often utilize complex terms
and phrase and it’s a key responsibility to craft a document that think
makes sense, protects the clients interest and not cause the transaction
to collapse.
The lawyer selected must specialize in Mergers & Acquisitions
transactions and will help resolve the following issues:
• Assisting with a transaction strategy;
• Conducting due diligence on legal matters;
• Drawing from previous mid-market M&A transactions, in order to
provide the owner with some comfort and reassurances as to:
o The process that the owner will undergo; and
o What types of problems and concessions are customary in
similar circumstances?
CORE COMPETENCY
The primary role of the lawyer is focused on negotiating the legal terms
of the purchase agreement. Lawyers are worth their weight in gold
providing they are proactive and assist in protecting their clients best
interest and enable a successful outcome.
Lawyers – during the sale process of every transaction, an experienced
M&A lawyer will play a key role in determining and facilitating the key
components of the final Purchase Agreement.
In most cases, it is the buyers’ lawyer who drafts the Purchase
Agreement and it will be weighted in their favour. Selecting a lawyer
who is specializes in Merger and Acquisition services and is aware of
the unique language and aspects of these complicated transactions is
essential.
The lawyer is there to protect the clients best interests and often will
save their client unnecessary taxes and post closing costs.
“
A negotiator should observe everything.
You must be part Sherlock Holmes and
part Sigmund Freud.
- Victor Kiam
“
If you are considering selling your
business with the plan of being out
in 3 to 5 years, the best time to strart
the process is today
“
“
TRANSITION PLANNING GUIDE 13

VALUATION - RISK & REWARDS
IT’S ALL ABOUT VALUE
Pavilion has a team of highly qualified professionals who utilize various
methods for conducting valuations.
We recognize that a sound valuation will be based on all the relevant
facts including the elements of common sense, informed judgment
which must enter into the process of weighing those facts and
determining their combined or cumulative significance.
“
The value of a thing is the amount of
laboring or work that its possession
will save the possessor.
- Henry George
“
In addition, Pavilion has further resources that help smaller and midcap
clients optimize their current “fair marketplace” value.
INTERNAL VALUE DRIVERS
Our team works closely with sellers to assess the business internal
“value drivers” that ultimately determine the Enterprise Value in the
marketplace. In addition, we utilize real time access to the following
resources:
4 Precedent database of completed transactions across North
America that provide evidence to support the valuation.
4 Real time access to the financial performance in each SIC or
Industry sector to enable an independent “yard stick” for key
performance indicators (KPI’s).
4 RMA Ratio’s – The Risk Management Association provides a wide
range of metrics that we use to assess the business and provide a
“score card”.
The true indicator of a company’s success is measurable by a wide
range of factors. One of the main components is the financial metrics
of the business including the Profit and Loss statements and Balance
Sheet performance. While this is a key financial metric, there are
numerous other factors that enhance enterprise value.
“
4.
Normalization of financial statements and
assesment as to future maintainable earnings
2.
Risk Profile
(internal/external)
7.
Valuation
Conclusion
6.
Transaction reviews
including the number of
buyers and sellers
market sector
5.
Application of valuation
approaches and methods
3.
Future Opportunities/
Growth Potential
1.
Collection and analysis of all relevant information
necessary to support the valuation conclusion
Everything that can be counted does not
necessarily count; everything that counts
cannot necessarily be counted.
- Albert Einstein
“
14
TRANSITION PLANNING GUIDE

MORE THAN EBITA
EBITA plays a significant contribution to the business valuation
however there are multiple other factors that can make a considerable
difference to the outcome.
Today, up to 80% of a firm’s value can be associated with intangible
assets, such as brand, reputation, culture, customer satisfaction, human
capital, risk management, R&D pipelines and a company’s trading
license to operate.
“
There is gold and abundance of costly
stones, but the lips of knowledge
are a precious jewel.
- Proverbs 20:15
“
EXTERNAL VALUE DRIVERS
When taking your business to market, it is important to consider the
external value drivers:
• Economic factors
• Strategic buyer synergies
• Recurring revenue
• Competition from buyer groups
• Innovation & IP: proprietary technology, trademarks, patents, etc
• Transition timeline for existing management
Each of these factors can substantially increase the final selling price for
the benefit of the seller.
IT’S COMPLICATED
Selling a private company is not just about finance, accounting or legal
matters. It is a team effort that is dependent on sales and marketing to
ensure the best value.
A marketing strategy is critical to the sale process primarily because it
will enable multiple bidders for the sellers business which will ensure
they obtain maximum value for your clients’ years of hard work.
AVOIDING THE PITFALLS
Traditional approaches for selling a business involves little sales or
marketing activity. There is an over reliance on “word of mouth” and
networking connections from third party advisors. As a result, the client
often does not achieve optimum price, value, or terms - referred to as a
“short sale”.
“
“
We are in danger of valuing most
highly those things we can measure
most accurately, which means that we
are often precisely wrong rather than
approximately right.
- Sir John Banham
Money, which presents the prose of life,
and which is hardly spoken of in parlors
without an apology, is, in its effects and
laws, as beautiful as roses.
- Ralph Waldo Emerson
“
“
“If you are considering selling your business with the plan of
being out in 3 to 5 years, the best time to start the process is today”
TRANSITION PLANNING GUIDE
15

“
THE PAVILION SALE PROCESS
The successful sale of a business involves many moving parts, making
it the largest and possibly most complicated transaction of your life.
The Pavilion process ensures practical advice that will help you select
the best professionals to sell your company while ensuring that you
get the best price and terms.
It’s often possible to sell your business for 50% more value if you
do everything right. Unlike selling a home in the residential or
commercial real estate market, the process of selling your business is
deemed “inefficient” for a myriad of reasons.
The purchase price for your company will vary greatly depending on
who you are selling to and what type of buyer you are looking for.
For example, Pavilion utilizes a dedicated marketing team who
specializes in researching niche and vertical markets to identify
strategic buyers from around the Globe. Strategic buyers will often
pay a premium for your business.
“
It’s complicated
EFFECTIVELY STRUCTURING YOUR COMPANY
FOR TRANSITION
When you sell your business you may face a significant tax bill, if
you’re not careful, you could find yourself with less than half of
the purchase price in your pocket. Fortunately, there are multiple
opportunities to reduce or even eliminate tax, with the right
preparation and enough time to implement.
The moral of the story? Structure your company well in advance of a
potential sale and reap the benefits; or fail to plan ahead of time and
pay the price – literally to the CRA.
Our team has substantial experience in establishing proactive tax
planning practices to mitigate your taxes, so that shareholders take
full advantage of your enterprise value benefits.
Whereas in the M&A market,
the selling and marketing
process itself can have a
major impact on the price
of your company. Plan and
execute the process correctly
and you could increase the
price of your company by
upwards of 50%.
16
TRANSITION PLANNING GUIDE

HOW DOES PAVILION ATTRACT MORE
BUYERS?
The Pavilion team works closely with our marketing
agency Firstbase Business Services (www.firstbase.ca). This
relationship provides the basis for our strategic advantage.
Firstbase is an international strategic marketing agency
with an exceptionally talented team to provide “best value”
solutions for clients.
Our marketing strategies are unique and comprehensive,
when we implement the marketing program, we invariably
have a significant level of high quality enquiries for each
unique business enterprise we represent. The result is obvious
very quickly – a higher level of qualified buyer enquiries based
on our geo-demographic targeting initiatives.
ABOUT FIRSTBASE
Established in 1985, Firstbase was founded by Greg Spafford
in 1985 in the UK and the business was a founding member
of the Direct Marketing Association. The basis for success is
that geo-demographic targeting enables precisely targeted
messaging to niche and vertical markets. This expertise
enables the selection of the most appropriate audience for
specific messages to target business audiences around the
globe.
Unlike other indiscriminate media including newspapers,
magazines, radio and television; targeted messaging ensures
the message being delivered that the audience is relative.
The result is higher levels of engagement and response
based on accurate targeting.
TARGETED RESULTS
TARGETED RESULTS
1. The Project Brief
230
25
5-10
5-7
3
2
1
1. The 2. Exhaustive Project Brief Research
2. Exhaustive 230 prospective Research purchasers
230 prospective purchasers
3. Prospect Generation
3. Prospect Generation
25 interested parties “Dry-run”
25 interested parties “Dry-run”
negotiation negotiation training training
4. Qualification
4. Qualification
& Bidding
& Bidding
5-10 exploratory meetings
5-10 exploratory meetings
5-7 Competitve
5-7 Competitve
bids
bids
3 Bids 3 worth Bids worth considering considering
2 Alternatives maintain competition
2 Alternatives maintain competition
5. Concluding
5. Concluding
the
the
Deal
Deal
1 purchaser 1 purchaser
“The great accomplishments of man have resulted from the
transmission of ideas and enthusiam.”
- Thomas J. Watson
TRANSITION PLANNING GUIDE 17

THE SILENT AUCTION PROCESS
Due to our proactive marketing programs, we generate more
buyer enquiries than anyone in our industry. The result, increased
competition between buyers enables us to negotiate higher sales value
and improved terms for the client.
INFORMATION AT OUR FINGERTIPS
We have access to a database of buyers from around the world
including:
• Venture Capital firms
• Private Equity Groups
• Strategic Buyers with selection by industry category, sales revenue,
etc.
• Comprehensive database of most companies in USA and Canada
• International buyers including: China, Europe, Middle East, and
Australasia
The Benefits of the Silent Auction:
• Pavilion generates a wide range of buyers for each listing and
operates the silent auction process.
• Bidders are coached through the bidding to negotiate the best
price and terms.
• The result is a higher sales value and improved terms for our client.
Pavilion comprises of a dedicated M&A specialists who have the skill
set, know-how and experience to enhance and improve the final selling
price by as much as 50% over any other firm in the USA or Canada.
WHY DOES COMPETITION FROM BUYERS
INCREASE YOUR SALE PRICE?
The purchase price for your company can vary greatly depending on
who you are selling to and what type of buyer you are looking for. The
team at Pavilion market your business under the radar and in stealth
mode while managing the complexity of a confidential sale process.
“
You only have to do a very few things
right in your life so long as you don’t do
too many things wrong.
- Warren Buffett
“
An expert is a man who knows some
of the worst errors that can be made
in the subject in question and knows
how to avoid them.
- Thomas Stewart
“
“
“If you know what you are talking about you have something
more valuable than gold or jewels.“
- Proverbs 20:15
18
TRANSITION PLANNING GUIDE

MAXIMIZE THE VALUE OF YOUR BUSINESS
Selling your business is a complex process that requires thorough
preparation, skillful presentation of your company, identifying the right
buyers, and sophisticated negotiation skills.
At Pavilion, you’ll work with a senior member of our team. We will
work closely with you to prepare your business for sale, present your
company to a highly targeted group of national and international
buyers and work with you to negotiate a transaction that meets all of
your objectives.
Your Pavilion advisor will guide you through each step of the sales
process, help you solve every challenge, be your advocate throughout
the deal, and leverage our firm’s years of experience to successfully sell
your company for maximum value and on the best terms.
By preparing your business for a voluntary sale, you can build a
sustainable operation that will attract both strategic and investment
buyers who will pay a premium for your business enterprise.
“
There really is only one sale that matters
to your business: your final sale. The one
where you exit. Your brand, your culture,
your reputation, your revenue - they all
culminate in that one big transaction.
So while you’ve got to be thinking
about your revenue numbers every
quarter, you’ve also got to be building a
business that creates value. Ultimately,
you’re going to capture that value
if you do it well.
- Razor Suleman
Director of software company
Achievers, which sold for $110 Million
“
INTERNAL VALUE DRIVERS
4 Stable and predictable cash flow
4 Reliable financial information
4 Customer diversity
4 Human capital / quality of workforce
4 Growth potential
4 Facility and equipment condition
4 Product / service diversity
4 Goodwill
4 Barriers to competitive entry
4 Operating systems and procedures
EXTERNAL VALUE DRIVERS
4 Economic factors
4 Strategic buyers synergies
4 Reccuring revenue
4 Competition from buyer groups
4 Innovation & IP: proprietary technology, trademarks, patents, etc.
4 Transition timeline for existing management
“
The only source of knowledge
is experience.
- Albert Einstein
“
“Those who fail to acknowledge and adapt themselves to the digital
revolution will become the “Kodak“ of this industry.“
- Aakash Educational Services
TRANSITION PLANNING GUIDE 19

RISKS & REWARDS
RISKY BUSINESS – AVOIDING THE PITFALLS
Some advisors don’t like to talk about risk. They’d much rather talk about
howmuch money you’ll make when their advice produces positive
returns, overlooking the potential that a collaboration with an M & A
specialist can provide.
WHAT CIRCUMSTANCES LEAD TO A SHORT-
SELL?
Many advisors are seeking to diversify their revenue streams and enter
the Mergers & Acquisitions arena. In many instances, because business
owners have worked closely with advisors for years or decades, they are
of the opinion that the advisor is able to sell the business in the most
effective manner.
The final sale result is underwhelming, the advisors’ firm sells the clients
business to the best of their ability however, the outcome results in a
lesser sum than the business enterprise is worth.
Without collaboration from other advisors with more knowledge of M &
A, millions of dollars can be left on the table resulting in a short-sell.
IT’S ALL ABOUT VALUE
The Pavilion approach to valuation is comprehensive and distinctly
different than any other advisor. Primarily because, we review the
strategic combined value and multiplies it, offering maximum return for
the client.
A sound valuation will be based on all the relevant facts including the
elements of common sense, informed judgment and rationally which
must enter into the process of weighing those facts and determining
their combined or cumulative significance.
“
CAUTION & RISK
Traditional approaches for selling
a company involves little sales or
marketing activity, resulting in a
short sale for the client.
There is an over-reliance on word of
mouth and networking connections
from third-party advisors that
fail to deliver a sale structure and
offers that are in the best interest of
the business owner.
“
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REWARDS
Pavilion has acted for many respected businesses to structure and
execute significant corporate financial transactions in the mid-cap
marketplace. The advantages of working with Pavilion include:
4 Access to objective advice, professional insight and judgment
4 A strategic partner that keeps our best interests in mind
throughout the transaction
4 Essential market intelligence both locally, nationally and globally
4 Maximize the transaction value
4 Access to pre-qualified investors and strategic buyers
It’s a proven fact, Pavilion has the skills, talent and know-how to
achieve a significantly higher selling price than any other organization
in Western Canada.
AVOIDING THE PITFALLS
What is the difference between a company that is sold versus bought?
It’s a fact that most business owners will only sell one significant business in their lifetime. The process of selling
a business is complicated with many concurrent moving parts. Selecting the right partner in the selling process
will make a significant difference in the outcome, as outlined below.
CASE STUDY
In a recent example, a mid cap business owner worked closely with their highly reputable top tier advisors for
over 15 years. When the owner was ready to sell, the advisors conducted a valuation and stated that they could
sell the company for an estimated value of $12 million. After a year on the market with no success, the business
owner approached Pavilion.
Pavilion conducted a new valuation, which determined the business was actually valued at nearly $20 million.
With Pavilion’s innovative marketing initiatives, the business gained interest from prospective buyers and within
8 months, the right buyer was found.
Target enterprise value
Other Advisors
$12 Million
The Pavilion Team
$19 Million
Number of bidder enquiries 29
132
Shortlisted bidders in negotiation 5
19
Highest bidder $ 9.5 Million $16.5 Million
$7Million
Difference in sale value
The bought company had significantly more buyer enquiries and resulted in more
competition and enabled an improved outcome for our client. The Pavilion fee
was paid for many times over and the client got the increased value they deserved
for their years of hard work.
TRANSITION PLANNING GUIDE 21

HOW DOES PAVILION OBTAIN EXTRA
VALUE FOR EACH CLIENT?
Due to our proactive marketing programs, we generate more buyer enquiries than anyone in our industry.
The result, more competition means we are able to negotiate better value and improved terms for our clients.
MOTIVATED BUYERS
IMPROVED NEGOTIATION OUTCOME
THROUGH MOTIVATED BUYERS
FAIR MARKET VALUE RANGE
MOTIVATED SELLERS
BUYER WITH STRONG
NEGOTIATION SKILLS
A MYRIAD OF BUYER CATEGORIES
We have access to database of buyers from around the world
including:
• Venture Capital firms
• Private Equity Groups
• Strategic Buyers with selection by industry category, sales
revenue, etc.
• Comprehensive database of most companies in USA and
Canada
• International buyers including: China, Europe, Middle East,
and Australasia
“Invest in truth and wisdom, discipline and good sense, and don’t part with them.”
- Proverbs 23:23
22
TRANSITION PLANNING GUIDE

“
IT TAKES A TEAM
The process of preparing and selling a business for sale is complex and
requires a dedicated team of professionals. Deal success is dependent
on having the right team working together to facilitate the sale
process.
KEY TEAM MEMBERS
The team players are different on each transaction:
“
Without advice plans go wrong, but with
many advisors they succeed.
- Proverbs 15:22
“
• Accountant
• Valuation specialist
• Merger & Acquisition specialist
• Marketing team
• M&A lawyer
TEAM WORK
Each of these team players will play a pivotal role and need to work
collaboratively with each other at different stages in the sale process.
The Pavilion team works with clients to facilitate the sale process in the
following manner:
• Maximize their client’s value
• Minimize their risk
• Support an effective and efficient transition
At Pavilion, we believe in teamwork and don’t displace the client’s
existing professionals.
SERVING CLIENTS BEST INTEREST
Pavilion has acted for many respected businesses to structure
and execute significant corporate financial merger & acquisition
transactions in the small / mid-cap marketplace.
The advantages of working with Pavilion include:
Working together to serve the
common purpose of the clients goals.
• Access to objective advice, professional insight and judgment
• Strategic partner that keeps the clients best interests in mind
throughout the transaction
• Essential market intelligence both locally, nationally and globally
• Maximize the transaction value
• Access to pre-qualified investors and strategic buyers
It’s a fact, Pavilion has the skills, talent and know-how to negotiate and
achieve a significantly higher selling price than any other organization.
If you are interested in collaborating together, we would be pleased to
hear from you.
“
Unity is strength. . . when there
is teamwork and collaboration,
wonderful things can be achieved.
- Mattie Stepanek
TRANSITION PLANNING GUIDE 23

PAVILION FACTSHEET
OVERVIEW
Pavilion Business Services is an independent Mergers & Acquisitions (M&A)
advisory firm operating and serving Canada’s small to mid-cap market.
Pavilion provides specialized advice to management teams of publicly and
privately-owned businesses. Pavilion’s team of experts is comprised of M&A
Specialists, Business Consultants, Succession Planners, Valuation Experts and
Marketing Specialists. Our team provides advisory services in the areas of:
• Succession / exit planning
• Mergers & Acquisitions
• Raising capital
• Business valuations
• Corporate restructuring
• Business growth strategies
Pavilion specializes in working with companies and organizations with
typically $2 million – $500 million in annual revenue.
CORPORATE INFORMATION
• Serving clients across Canada
• Attracting strategic and investment buyers across the
globe
• Financial analysis specialists
• Access to domestic, national and international markets
• Skilled and experienced negotiators
INTERNATIONAL BUYERS
Pavilion’s extensive networking partners allow us to provide
business advice on an international scale with direct access
to buyers and investors in over 120 countries. We work with
professional equity, strategic buyers and investment firms
from USA, Europe, Middle East, China and Australia.
North America is increasingly being regarded as the
preferred location for business investments. Established
businesses with a solid cash flow are in huge demand from
buyers around the world.
ADVANTAGES OF WORKING WITH A
MERGERS & ACQUISITIONS ADVISOR
Pavilion has acted for many respected businesses to
structure, negotiate and execute significant corporate
financial transactions and has successfully completed
numerous transactions in the mid-cap market space.
The advantages of working with Pavilion include:
• Access to objective advice, professional insight and
judgment
• A strategic partner that keeps your best interests in mind
throughout the transaction
• Essential market intelligence both locally, nationally and
globally
• The ability to maximize transaction value based on our
experience and track record
• Access to pre-qualified investors/buyers
PHILOSOPHY
The Pavilion management team instinctively know that great companies are built on the principle of doing the right thing each
and every day, and treating business partners, customers, and employees honestly, fairly and with respect.
KNOWLEDGE » INTEGRITY » RESULTS
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TRANSITION PLANNING GUIDE

OUR VALUES
dedication
innovation quality
entrepreneurship
excellence
sustainability
teamwork accessibity
integrity
collaboration
honesty
openness
persistence simplicity
transparency aware
empathy
OUR MISSION
In partnership, we build trusting relationships with individuals, business owners
and organizations to provide strategic exit planning and transition services.
“Do not use harmful words, but only helpful words, the kind that
build up and provide what is needed, so that what you
say will do good to those who hear you.”
- Ephesians 4:29
TRANSITION PLANNING GUIDE 25

With vision and imagination,
we sell your business for maximum value.
(Image of Pavilion Business Services’ reception area)
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TRANSITION PLANNING GUIDE

TRANSITION PLANNING GUIDE

DIVESTITURE » SUCCESSION » EXIT PLANNING » SELL
1.888.859.5388 | www.pavilionservices.com