Telu Tsai and Jian Zhang from MidMarket enjoyed the New Year festivities along with their families here and in China. This week begins a particularly important year in China as people anticipate the once a decade leadership change as the second year of the 12th Five-Year Plan takes shape.

Is your business invested in China through a joint venture or wholly-owned foreign enterprise? Is it performing as reasonably expected? Chances are you have concerns about how it really going and whether it could be improved. If you are invested in China then you undoubtedly faced some dragons in your path to success. We have encountered a few with our own joint venture experience.

If you are thinking about investing in China this year, you will benefit from the insight of those that have gone before you. Whether it be a JV, WOFE, greenfield operation, acquisition or strategic alliance, you can avoid missteps, anticipate issues and strengthen your strategic position with guidance from those who have relevant experience.

Imagine the impact of dramatically improving the performance of your China operations or savings from launching the investment based on the strongest footing. We can help with both of those situations because we have the talent and the passion to serve our clients' best interest. We have the experience in China to help you be more successful there.

MidMarket is a valuable resource to North American /European companies and investor groups with interests in China. Those investments range from joint ventures/subsidiaries to potential investments such as equity stakes or acquisitions. MidMarket offers financial professionals experienced in Western corporate transactions/markets who are natural born Mandarin speakers comfortable traveling in China with clients interested in in-depth interaction with Chinese executives and government officials that are not fluent in English.

Telu Tsai is a partner at MidMarket mainly based in Philadelphia and frequently travels to China on behalf of the firm and our clients. Jian Zhang is a director at MidMarket and will be based in Beijing for the next few months supporting a Chinese client raise growth there. They are supported by Patrick Hurley in Philadelphia and Song Hong in Tianjin. MidMarket serves clients in Beijing, Shanghai, Harbin, Guangdong and Tianjin as well as various other major markets and secondary markets throughout China.

1. MidMarket provides these services for Western clients already invested in China.

   1. Improving the quality, reliability and usefulness of financial planning and reporting.
   2. Pinpointing and defining operational problems in order to take action to improve performance.
   3. Working with Chinese and Western managers on strategic business planning and accountability.
   4. Assistance in obtaining bank debt and equity financing in China and optimizing inbound financing.
   5. Planning and implementing divestiture exit strategies and investor liquidity programs.

2. MidMarket provides these services for Western clients considering investing in China.

   1. Identification of strategic corporate partners/ co-investors/acquisition candidates.
   2. Due diligence investigation/confirmation in China and assistance in negotiations for prospective investments and acquisitions in China.
   3. Clarifying necessary local, provincial and central governmental approvals (and/or regulatory and tax), timing and process considerations.
   4. Establishing and maintaining relations between Western corporate/investor with key Chinese influencers relevant to the company's success.

3. MidMarket provides these services for Chinese clients.

   1. Assistance in corporate financial dealings with Western corporations and investors.
   2. Identification of prospective Western investments, acquisitions and corporate relationships.
   3. Assistance to Chinese government in developing and maintaining strategic relationships (i.e. ACG)
   4. Educational programs (in the U.S. and China) for senior management and customized internships for exceptional mid-level managers.

So whether your business is already invested in China or consider it to be a near term priority, MidMarket can help you to make the most of the Year of the Dragon. Call us to talk about how we can help.

MidMarket's value proposition is to bring our knowledge and insight to conduct a thoughtful analysis that you can use to accomplish your goals. We deliver relevant market data and valuable information along with sound independent advice aimed only at your best interests. We do that on a timely and cost effective basis that in no way limits your flexibility or ties you to a commitment to us. Let us show you what we have done for so many business owners for over 30 years and how we can make that valuable resource work for your advantage.

The calls come mostly from intermediaries on behalf of a strategic investor who has identified your company as an attractive match. Others come from a supplier or customer who wants you to be aware of a potential opportunity to buy or invest in a struggling producer. Some private equity firms have even made direct approaches to talk about your taking some money off the table and continuing to control the business. Is it just stirring the pot or is there something that might be of real interest?

You're pretty well informed about how businesses like yours are valued and what strings are attached to raising capital. There is plenty of loose talk about multiples of normalized EBITDA for a debt-free balance sheet with a net asset adjustment for net assets or working capital at closing. You know that non-control investors want some form of downside protection and a put at fair value in five years to get their return if there is no sale.

Even with a keen awareness of activity in your industry, there is quite a lot that is not obvious. What did they really get and what did it really cost? What were the stumbling blocks and the types of issues that they wish they had addressed earlier? There are always factors which can and do have a material impact on deal structures and whether the transaction can even be completed.

Making the most of your situation begins with knowing your strategic financial options and having reliable information specifically relevant to what you might want to do. We work with business owners to answer these questions.

• Can I improve the financing arrangements that I already have?
• How attractive is our company to a strategic or private equity investor?
• What is a realistic valuation for raising equity or selling the company?
• What would the structure/cost be for subordinated debt to relieve bank pressure?
• Which investors/lenders/buyers would be most interested and most valuable?
• How should we finance an acquisition or our expansion plans?
• How could we recapitalize for partial cash-out or to buy-out a partner?
• What other alternatives should we be aware of?

MidMarket's value proposition is to bring our knowledge and insight to conduct a thoughtful analysis that you can use to accomplish your goals. We deliver relevant market data and valuable information along with sound independent advice aimed only at your best interests. We do that on a timely and cost effective basis that in no way limits your flexibility or ties you to a commitment to us. Let us show you what we have done for so many business owners for over 30 years and how we can make that valuable resource work for your advantage.