MICHAEL'S M&A PLAYBOOK

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M&A TARGET SCORECARD

Max Actual TOTAL
Target: Value Value VALUE

Assessment: 181 43% 77

INVESTMENT THESIS/VALUE CAPTURE APPROACH 50 40% 20

We have an approach for how to create value with this acquisition 50 20

STRATEGIC FIT 40 28% 11

Does the target company help us to achieve our strategic goals?
Industry Consolidation - Target helps to increase the market share 5 -
Diversification - Target helps to expand our product and service offering 5 3
Geographic Growth - We can grow in other areas and countries 5 1
Talent Acquisition - The target has talented people that we need in the group 5 2
Financial Gain - The target will improve the financial results of the group 5 1
Turnaround Opportunity - We can turn around the target and improve the financials significantly 5 -
Time to Market - The target will help us to be quicker on the market with a specific product/service 5 4
Tax Optimization - We can improve with the target the group's tax position 5 -

FINANCIAL PERFORMANCE 40 35% 14

How strong is the financial performance of the target company?
Strong revenue performance 10 6
Strong EBITDA performance 10 3
Strong net income performance 10 3
Strong cash flow performance 10 2

CULTURAL FIT 30 63% 19

How similar is the culture of the target company?
Similar goals 3 3
Similar belief in what the key drivers of the business are 3 3
Similar timelines to achieve the goals 3 2
Similar approach how quickly or slowly the target implements plans 3 2
Similar risk appetite for new ideas 3 1
Similar approach how to manage the company/business topics 3 2
Similar approach how to manage people 3 1
Similar approach to pay (i.e., salary levels) and incentive plans (short- and long-term bonus) 3 2
Similar personality type of senior management 3 2
Similar approach how to deal with failure 3 1

STABILITY 14 71% 10
How stable/volatile is the target company?
Winning new clients is stable 2 2
Delivering products and services is stable 2 1
Revenue development is stable 2 1
Cost development (OPEX) is stable 2 2
Financial income and expenses are stable 2 2
Tax results and payments are stable 2 1
CAPEX is stable 2 1

EASE OF IMPLEMENTATION 7 43% 3

How easy or difficult is it to integrate the target?
Same ERP system 1 -
Similar other IT infrastructure 1 1
Similar processes 1 1
Similar policies 1 -
Similar approach how quickly or slowly the target implements change plans 1 1
Similar organizational structure 1 -
Similar external consultants (e.g., tax advisors) 1 -

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