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SkyView Partners | 294 Grove Lane East | Suite 120 | Wayzata, MN 55391

FINANCING M&A OPPORTUNITY

SkyView Partners | 294 Grove Lane East | Suite 120 | Wayzata, MN 55391 2

M&A Consultant and Correspondent Lender:

Dedicated to creating M&A deal

structure that is eligible for bank

financing and providing timely and

cost effective bank financing for

owners of independent and registered

financial advisory practices.

SkyView Partners | 294 Grove Lane East | Suite 120 | Wayzata, MN 55391 4

Bankers and Advisors: An Awkward Courtship

• 98% of advisors have never entered into a commercial loan• Lack experience and relationships in commercial banking

• 97% of banks have never entered into an advisory loan• Lack experience and knowledge of how to evaluate an advisory practice

Problem: Advisors lack experience on how to present their application. Banks lack understanding of how to evaluate advisory practices.

Result: Historically, minimal financing has been available to advisory loan market.

? ? ?

Supply and Demand Dislocation

Valuations: 2.43 X Annual Gross Revenue

SkyView Partners | 294 Grove Lane East | Suite 120 | Wayzata, MN 55391

5

100,000

advisors set to retire by 2025

98%

of independent advisors never retire

50

buyers for everyadvisory practice seller

Crafting the Conversation: Buyers and Sellers

Today’s Buyers: Approaching sellers with a Seller’s Note:

• What sellers hear: “I do all the work and take all the risk.”

Re-Crafting Buyer Messaging: Revisit prospective sellers with bank financing:

• What sellers hear: “I can finally retire, receive a fair value for my practice, and not take on the risk.”

6SkyView Partners | 294 Grove Lane East | Suite 120 | Wayzata, MN 55391

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Valuations

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Actual FP Transitions Valuation Data

© 2019 FP Transitions

SkyView Partners | 294 Grove Lane East | Suite 120 | Wayzata, MN 55391

SkyView Partners | 294 Grove Lane East | Suite 120 | Wayzata, MN 55391

DRAG ON VALUATION

• Recurring Revenue

• Revenue Growth

• Client Growth

• High $ Clients

• Enterprise Strength

• Location

• Poor Demographics

• High Concentration Risk

• Transition Risk

• Low Enterprise Strength

• Restricted Niche

DRIVE VALUATION

© 2019 FP Transitions

2018 Market Data

What you need to know…

• Avg. Recurring GRM: 2.45 (Range 2.18-2.68)

• Avg. Non-Recurring GRM: 1.08 (Range 0.26-1.35)

• Avg. Down Payment: 37.0% (Range 20% -40%)

• Length of Seller Financing: 3 to 6 Yrs.

• Avg. Client Retention Rates: 95%

© 2019 FP Transitions

SkyView Partners | 294 Grove Lane East | Suite 120 | Wayzata, MN 55391

10

Mitigating Factors

• High: Debt to Equity

• Character (credit)

• Global Cash Flow

• Low: Loan to Value

Standard Loan Structure

The above is not a proposal and not a commitment to lend.The fee, rate, terms, and conditions are for informational purposes only and will require formal credit underwriting and approval.

SkyView Partners | 294 Grove Lane East | Suite 120 | Wayzata, MN 55391

$750,000 Minimum

Common deal structure with

95% bank financing requires

20% - 30% of proceeds held in

escrow subject to client

conversion hurdles for seller.

Get Pre Qualified in 48 hours:

www.skyview.com

SkyView Partners | 294 Grove Lane East | Suite 120 | Wayzata, MN 55391 11

NEXT STEPS: Sellers

• Determines the amount of bank financing available from the seller’s practice:

– Cash flow

– Enterprise value

• Ascertaining bank financing available from the seller’s practice puts a seller in better position to set asking price and begin search for buyer(s).

12SkyView Partners | 294 Grove Lane East | Suite 120 | Wayzata, MN 55391

Pre-Qualification from our M&A Consulting Team

National and state by state buyer ranking method that gauges:

• Creditworthiness, and

• Practice readiness to acquire

another practice

13SkyView Partners | 294 Grove Lane East | Suite 120 | Wayzata, MN 55391

NEXT STEPS: Buyers

Key factors in determining PurchasingPowerTM ranking, include:

• Completion of online buyer profile

• Pre-Qualification

• Existing banking relationship with SkyView network bank

• Access to liquidity (buyer capital or access to line of credit)

• Completed valuation

• Utilization of practice management coaching program

SkyView Partners | 294 Grove Lane East | Suite 120 | Wayzata, MN 55391

Q&A