LaSalle Bank: Presentation for M

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LaSalle Bank Presentation for MA Today
Presented by Aimee Daniels Senior Vice
President Commercial Banking (312)
904-8914 aimee.daniels_at_abnamro.com
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Table of Contents

• LaSalle Bank/ABN AMRO
• LaSalles Commercial Focus
• Transaction Parameters
• Representative Deals
• Things to Avoid/Mistakes People Make
• Things Which Help Your Deal

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LaSalle Bank/ABN AMRO

• LaSalle 55 billion bank headquartered in
  Chicago/similar size Bank in Michigan (Standard
  Federal) operated under same management and
  market approach.
• Focus on commercial banking, retail (consumer)
  banking, and mortgage business.
• Heavy focus on Middle Market (Companies 5 - 500
  million in sales).
• Geographic Footprint/Midwest - Offices in Des
  Moines, Indianapolis, Michigan, Milwaukee,
  Cleveland, Cincinnati, Rockford, Peoria, St.
  Louis, Minneapolis, Pittsburgh, Denver, Miami,
  Tampa . Opening soon in Atlanta.
• Some industry specialization in lending (growing
  trend) with specialties in Insurance, Bank and
  Non-Bank Financial Institutions, Surface
  Transportation, Technology, Construction and
  Engineering, Domestic Subsidiaries of
  International Companies, Power/Energy, Food
  Distribution Companies, Health Care Companies
  (for profit and not for profit)
• ABN AMRO (Dutch Parent) in over 75 countries (one
  of top 15 banks in world).
• ABN Focus is large corporate. US entity is now
  LaSalle Bank NA.

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LaSalles Commercial Focus

• Primarily companies between 5 - 500 million in
  sales
• Divided by sales size
• Downtown Bank (companies gt 50 million
• Metropolitan Banking (companies lt 50 million)
• Technology Practice is a national practice and
  includes software companies, information and
  business services. We also work with companies
  connected to technology industry or who are big
  users of technology.

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Transaction Parameters

• Software
• Historically underwritten by EBITDA multiple only
  with maximum set between 2.25 2.5x.
• EBITDA substantiated by recurring maintenance
  revenue stream and stability of business. (The
  higher the recurring revenue as a of sales the
  better.)
• On smaller transactions or in situations where
  EBITDA multiples do not hold up, lending may
  still be based on conventional A/R approach.
• Information and Business Services
• Depends on nature of the business.
• In many cases EBITDA multiple is still the driver
  but issue or air often comes up.
• Similar multiples to software companies.
• May be difficult to substantiate sustainability
  of EBITDA except by looking at historical trends.
• For consulting oriented businesses, conventional
  advance rates are used with adjustments depending
  on billing practices and frequency as well as
  contractual issues.
• Whether the business can be viewed as a
  candidate for a cashflow loan depends on its
  size. In general, must be gt 20MM in sales and
  2MM in EBITDA.

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Representative Acquisition Deals

• Marketing Services Company (closed 7/03)
• Finance Multiple gt 2.5x
• A/R did not support desired borrowings
• Air could be eliminated in 18 24 months
• Private Equity firm provided guarantee for air
  which reduced as air reduced
• Recurring Revenue Marketing Related
• Existing client acquiring firm which allows them
  to expand base of potential clients
• Limited A/R
• Cashflow multiple low lt 1x using strength of
  existing customer/ acquiring company history had
  some bumps
• Multiple of company acquiring is 8x
• Could repay bank exposure in lt 2 ½ years using
  cashflow of existing client
• Acquisition is profitable

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Things to Avoid/Mistakes People Make

• Excessive EBITDA addbacks
• Banks underwrite the past with reasonable
  adjustments (ex. Margin improvements, cost cuts,
  etc.)
• Must be able to prove them
• Choosing the Wrong Bank
• Make sure they understand your industry
• Make sure they understand structured/leveraged
  transactions
• Understand what happens in a workout situation
• Not being organized/not providing information in
  a timely manner
• Have a packet available for the Bank upfront
  including historical financials, projections and
  general background including industry
  information. Set the tone of how you want the
  bank to look at your business.
• Make sure you have the right financial staff or
  use an outside firm if necessary.
• Setting unrealistic deadlines.
• Although it is possible to close a deal within 30
  days, it is better to allow 45 60 especially if
  you need more than one bank. (gt20 - 30MM in
  borrowings)
• If you are in a hurry, the deal cant change a
  lot. (ex. Structure of debt offering)

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Things Which Help Your Deal

• The right sponsor (if applicable)
• The right management team (yours or theirs)
• The right capital structure
• Make sure you have enough equity/subdebt
• The right business segment (future outlook,
  historical experience of Banks, etc.
• The right technology and platform