Meeting Notes

**Meeting Type:** Partner Meeting  
**Date:** May 30, 2024  
**Attendees:** Marcus Webb, David Kim, Jennifer Liu  

**Discussion Points:**

1. **Overview of Add-On Acquisition Opportunity:**
   - Jennifer Liu presented the potential add-on acquisition of Tech Innovations Inc., a software development company specializing in AI solutions for healthcare providers. The company reported $5 million in EBITDA for 2023 and has a projected growth rate of 15% per annum.
   - David Kim noted that Tech Innovations has an established client base of 120 healthcare institutions, which could complement the firm’s existing portfolio company, HealthTech Systems, and enhance cross-selling opportunities.

2. **Financial Review:**
   - Marcus Webb reviewed the preliminary financial projections for Tech Innovations, highlighting a potential purchase price of $30 million based on a 6x EBITDA multiple. This valuation aligns with industry standards, given the company’s growth trajectory and market position.
   - A discussion on funding options ensued, with David proposing a mix of equity and debt financing. The firm currently has $10 million in dry powder and can leverage an additional $15 million in debt to support the acquisition.

3. **Risks and Mitigation Strategies:**
   - Marcus raised concerns regarding potential integration challenges post-acquisition. Jennifer suggested a phased integration plan to mitigate risks, with a focus on aligning corporate cultures and operational systems.

4. **Market Analysis:**
   - David provided insights into competitive positioning, noting that Tech Innovations ranks in the top 5% of software solutions in the healthcare sector based on customer satisfaction scores.

**Action Items:**

1. Conduct detailed due diligence on Tech Innovations Inc.
   - Owner: Jennifer Liu
   - Deadline: June 15, 2024

2. Prepare a financial model to evaluate various funding strategies.
   - Owner: David Kim
   - Deadline: June 10, 2024

3. Develop a communication plan for stakeholders regarding the potential acquisition.
   - Owner: Marcus Webb
   - Deadline: June 20, 2024

**Key Decisions Made:**

- The partnership unanimously agreed to proceed with due diligence on Tech Innovations Inc. 
- The target acquisition price of $30 million was approved based on the current EBITDA multiple.
- The decision to explore a financing structure consisting of $10 million equity and $15 million debt was endorsed.

**Next Steps:**

- Following the completion of due diligence, a follow-up meeting will be scheduled for June 25, 2024, to review findings and finalize the decision on proceeding with the acquisition.
- The team agreed to engage a third-party consultant to assist with integration planning should the acquisition be approved.
- Regular updates on the acquisition process will be shared bi-weekly among partners to ensure alignment and address any emerging issues.

**Next Meeting Date:** June 25, 2024