Joint Venture Presentation

Outline

• Teaming & Joint Ventures Generally

• When It’s Worthwhile

• Benefits

• Samples

• Getting Started

• Contract Relationships

• Making the Relationship Work

Presenter

Gregory M. Jones20+ year career in corporate and business development. Previous experience includes investment banking, general management and a Business Unit President; Specific experience in establishing JVs for UTC/Pratt & Whitney. Prior Corp Exp. JP Morgan, UTC.

•B.S., Morgan State University•M.P.M., Carnegie-Mellon University•M.B.A., Wharton School, University of

Pennsylvania

3

General Arrangements• TEAMING

− Individual entities agree to pursue a particular project together.

• JOINT VENTURE

− Individual entities form a common enterprise to pursue a particular project together. Share risks and rewards in developing a new market, product or technology

• PARTNERSHIP

− Individual entities form an enterprise as an ongoing business concern .

• SUBCONTRACT

− One entity agrees to perform one portion of another entity’s contract.

Joint Venture Definition

• Contractual agreement

− Duration and reporting obligations

− Agreement of Board of Directors

− Ensures no single venture can control the entity

• If one entity can usurp power, report as subsidiary and not joint venture

• Involves two or more parties

• Parties undertake economic activity subject to joint control

Types of Joint Ventures

• Jointly controlled operation

− Venture uses own assets, incurs own expenses and liabilities

− Each venture provides expertise to manufacture product

• Different parties carry out different responsibilities

• Jointly controlled assets

− Recognizes income from sale of output

− Oil, gas, mineral extraction industry

• Each company shares in ownership of assets, economic benefit of extracting oil

• Jointly controlled entities

− Establishment of corporation or partnership where each entity has interest

− Maintains own accounting records

− Each entity contributes cash or resources

Why Joint Venture

• Complement strengths and capabilities.

• Eliminate barriers to entry.

• Pursue opportunities otherwise unattainable .

• Build track record of past performance.

• Create efficiencies and economies of scale.

• Achieve cost control.

• Keep pace with competitors.

• Win more business!

Combining Resources—The Marriage….What do you bring to the equation

JV Partner II

Technology

Financial Resources

JV Partner I

Mfg

Sales

Branding Mkt Access

Value Proposition • Benefit for the Customer

− Added capabilities− Lower product cost

• Combined offer to potential customers

• Benefits to JV Partner

Key Provisions

A. Strategy for Proposed JV(“Newco”)

B. Branding of Newco

C. Suggested Structure & Scope

D. Formation and Term

E. Employees (Secunded or Permanent)

F. Capitalization

G. Transfer of Ownership

H. Board of Managers/Directors

Provisions Continued

J. Operating Structure

K. Management

L. Technical Assistance from both parties

M. Administration

N. Termination

O. Disputes

Worthington Industries Joint Venture with Viking Industries

− Worthington, diversified metal processing company

− Viking Industries, MBE, intermediate steel processor

− Viking & Worthington Steel Enterprises (VWS)

• Joint Venture is MBE

− Purchased Assets of Valley City Steel

− Aligns naturally with steel processing core competencies

− Viking gets access to Worthington’s sales and marketing experience and established relationships

− Worthington gets presence in Northeast Ohio and provides the market another quality MBE steel processor

Meckley Services Joint Venture with Diamond Support Services

− Meckley Services, leader in General and Construction Commercial Real Property Services;

− Diamond support Services, leader in general residential real property services;

− Formed Diamond-Meckley Services , 8A and Certified Small, Minority and Women Owned Disadvantaged Business

− Expand Core Competencies

• 40 Service Vehicles and 6 regional offices in the Mid Atlantic Area

• Meckley Services M/WBE status plays a key role in achieving client’s supplier diversification annual goals

Interface Construction Corp and Tarlton Joint Venture

− Interface, oldest black-owned general contracting firm in the St. Louis, Mo area

− Tarlton, Woman owned firm providing pre-construction and construction services

− $100 Million project to build BJC HealthCare Center in St. Louis.

− Opportunity to win a project that typically would not be available to Interface;

− Helped BJC, one of the largest non-profit healthcare organizations in the US exceed it’s MBE/WBE inclusion goals

(860) 614-1202gjones@divestiturepartners.comwww.divestiturepartners.com280 Trumbull Place, 21st FloorHartford, CT 06103

Gregory M. JonesPrincipal