Succession Planning - Business Asset Protection

CASE 1: Clearwater Filter Systems
Sale to New Zealand listed water company - Just Water.

Peak Partners was integral in the positioning of Clearwater Filter Systems (CWFS) for the successful sale into the largest player in the New Zealand market – Just Water Limited.

Peak Partners had been providing strategic advice to CWFS for over 5 years previous to the sale, which has brought great synergies to both businesses and presented several new opportunities on the horizon.

Clearwater Filter Systems Testimonial
23rd December 2005

My business, Clearwater Filter Systems has been working with Craig West from Peak Partners for approximately 5 years, during that time in his role as strategic adviser Craig has helped us successfully position our business for sale. 2 years ago our Succession Planning started when our CFO was introduced as a shareholder in the company, and therefore my partner was able to retire and sell down his equity earlier this year.

We then worked with Craig to identify key prospects for a sale of the entire business and position ourselves to maximise the value we could extract on sale. We have recently completed a sale to a NZ listed company in a very similar business and with very similar goals and beliefs to ourselves.

Craig introduced the opportunity to them, presented the information and managed the negotiation and due diligence stage. We have now sold our business to Just Water in a win-win deal for both parties that now sees me becoming a major shareholder and acting as a director for both Australian and NZ companies as well being able to extract maximum value for the equity in our business.

Craig has project managed this whole process for us and coordinated the various advisers and parties on both sides of the Tasman. He has always acted with professionalism, good judgment and with our best interests at heart. I have no doubt we have had a far more successful succession planning experience, and realised a greater sale value through our involvement with Craig and would highly recommend him.

Yours Sincerely
Phil Dash: CEO
Clearwater Filter Systems

New Zealand Stock Exchange Announcement
Just Water International Limited (JWI) has acquired 100% of the shares in Clearwater Filter Systems (Aust) Pty Ltd, the leading point-of-use water-dispenser company in Australia. Announcing this, the Chairman of JWI, Jim McLay, said that all the shareholders had agreed to sell their shares, with the major shareholders taking up shares in JWI.

The Company announced that the share offer had been made some weeks ago, with the offer dependant on JWI being satisfied with certain aspects of the Company. These conditions had been fulfilled. "We are very confident about the acquisition, and are happy to have some of the existing management holding shares in JWI, with the former majority shareholder in Clearwater, Phil Dash, becoming a major shareholder in JWI, and joining the JWI Board," said Mr McLay.

JWI Chief Executive, Tony Falkenstein said he was enthusiastic about the acquisition. "I have known Phil Dash since he started the Clearwater business - he is a New Zealand success story in Australia, where his company has become the largest point-of-use business in that country".

Clearwater has a turnover of approximately $A9.0 million and has over 18,000 water-dispensers which yield regular income, with approximately half these in businesses and the rest in residential locations. Just Water's New Zealand operations have over 40,000 water- dispensers, yielding regular income, virtually all of which are located in businesses or non-residential organisations.

The purchase price is approximately A$14 million payable in two tranches, the second of which is subject to 2006 profitability figures being attained. The first tranche of A$7 million will be paid immediately, and the second tranche in August 2006, when Clearwater's final accounts have been completed. The vendors will take 40 percent of each tranche of the purchase price in shares in JWI, at an agreed price of 90 cents per share. The vendors have agreed to a restriction preventing them from selling any of these shares within 12 months of the acquisition, without the consent of Just Water International Limited.

The balance of the purchase price will come from JWI's own cash resources and existing banking facilities.
JWI expects that Clearwater will add over $1 million to its EBIT in the remaining eight months of the 2006 year.
"We believe that there are significant growth opportunities in Australia, which will add to JWI's profit growth," said Tony Falkenstein.
JWI directors Tony Falkenstein and Ian Malcolm will join Phil Dash as directors of Clearwater.

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CASE 2: Fashion Buttons
Family owned business - transfer to next generation

Peak Partners have been consulting to Fashion Buttons a family owned and operated business established over 60 years ago, since the introduction of GST. Peak Partners was responsible for arranging both the orderly transfer of ownership and control from father to son in 2004 and a tax effective retirement strategy for the father using a self-managed super fund.

The transfer of the business (the family’s largest asset) and other assets (including investments and the factory from which the business operates) saw an estate distribution between the children, carefully overseen by the father to avoid disputes and future dramas.

The business is now fully owned and controlled by the son who has been actively involved in the management of the business for many years and is now able to guide the strategic direction of the business going forward.

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CASE 3: Brewtopia Limited
Public Listing on the Newcastle Stock Exchange

This custom labelled beverage producer was successfully listed on the Newcastle Stock Exchange on the 20th February 2006 and raised $800,000 from the public via an IPO.

Founding directors, Liam Mulhall and Larry Hedges, welcomed new shareholders as investors in the company with a view to attracting expansion capital to further drive the already impressive performance of this innovative business.

The company has been trading for only 3 years but has built a loyal database of members of over 20,000 people both nationally and internationally - the listing was a great way to further involve those people (who in the early days voted on many key decisions for the company) under the slogan "own the beer you drink."

Peak Partners were integral to this listing. We provided not only advice, but design and creative services for the prospectus as well as remaining with the company as accredited advisers to the NSX.

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