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BPP Coursework Cover Sheet

Please use the table below as your cover sheet for the 1st page of the submission. The sheet should be before the cover/title page of your submission.

Programme MSc Management

Module name Financing Business Initiatives

Schedule Term October 2019

Student Reference Number (SRN)

Report/Assignment Title

Date of Submission

(Please attach the confirmation of any extension received)

Declaration of Original Work:

I hereby declare that I have read and understood BPP’s regulations on plagiarism and that this is my original work, researched, undertaken, completed and submitted in accordance with the requirements of BPP School of Business and Technology.

The word count, excluding contents table, bibliography and appendices, is ___ words.

Student Reference Number: Date:

By submitting this coursework you agree to all rules and regulations of BPP regarding assessments

and awards for programmes. Please note, submission is your declaration you are fit to sit.

BPP University reserves the right to use all submitted work for educational purposes and may

request that work be published for a wider audience.

BPP School of Business and Technology

Msc Management with Finance

Financing Business Initiatives

Coursework Assessment Brief Autumn Term 2019

Submission deadline: 23:59 on 2nd January 2019

Submission mode: Turnitin online access

1. General Assessment Guidance

 Your summative assessment for this module is made up of this Coursework submission which

accounts for 100% of the marks

 The deadline for submission is 23:50 on 2nd January 2019. lease note late submissions will not

be marked.

 You are required to submit all elements of your assessment via Turnitin online access. Only

submissions made via the specified mode will be accepted and hard copies or any other digital

form of submissions (like via email or pen drive etc.) will not be accepted.

 For coursework, the submission word limit is 3500 words. You must comply with the word count

guidelines. You may submit LESS than 3500 (plus 500 words for the reflective statement) words

but not more. Word Count guidelines can be found on your programme home page and the

coursework submission page.

 Do not put your name or contact details anywhere on your submission. You should only put

your student registration number (SRN) which will ensure your submission is recognised in the

marking process.

 A total of 100 marks are available for this module assessment, and you are required to achieve

minimum 50% to pass this module.

 You are required to use only Harvard Referencing System in your submission. Any content which

is already published by other author(s) and is not referenced will be considered as a case of

plagiarism. You can find further information on Harvard Referencing in the online library on the

VLE. You can use the following link to access this information:

http://bpp.libguides.com/Home/StudySupport

 BPP University has a strict policy regarding authenticity of assessments. In proven instances of

plagiarism or collusion, severe punishment will be imposed on offenders. You are advised to

read the rules and regulations regarding plagiarism and collusion in the GARs and MOPP which

are available on VLE in the Academic registry section.

 You should include a completed copy of the Assignment Cover sheet. Any submission without

this completed Assignment Cover sheet may be considered invalid and not marked.

2. Assessment Brief

Your summative assessment for MSc Management with Finance, Financing Business Initiatives

has TWO elements and they MUST be submitted on the same document:

1. a Consultancy Report submission for 80% of your marks (excluding the title,

references and quotations).

2. a Reflective Statement on the top challenges facing the financing of new business

initiatives in a market of your choice for 20% of your marks (excluding the title, references

and quotations).

Any calculations in excel should be pasted into the document showing the Formulae AND the

values.

For coursework, please use font size 12 for body text and the typeface (font) should be Arial or

Times New Roman with minimum 1.5 spacing.

For headers and titles, please use font size 14. Your submission must have standard margins and

page numbers.

Please use English (UK) as your language in the submission.

You should include a completed copy of the Assignment Cover sheet. Any submission without

this completed Assignment Cover sheet will be considered invalid and not marked.

Student Guidance

In your answers, in addition to the information provided, please apply the concepts from the

appropriate areas of financial and economic theory discussed during this and all previous modules

during your course. Your answers should include appropriate numerical data and, if appropriate,

charts/graphs. You may use any appropriate data from the case study.

Consultancy Report (80% of module marks) You are a recently hired Financial Analyst working on the Leveraged Buyout (LBO) deal desk for 3M, a small Private Equity (PE) firm with a strategic investment remit for high growth technology companies. Your first task is to review the case company Bottomline Technologies as a potential investment and prepare a report addressing the following requirements: 1. Using Exhibit 1 and other industry data, carry out a Porter’s Five Forces analysis on

the Cloud Computing Industry. (15 marks)

2. Identify and critically evaluate the characteristics of a company which would be suitable for an LBO. (6 marks)

3. Explain how a Private Equity (PE) firm such as 3M could align their interests to the

managers of Bottomline Technologies. (6 marks)

4. Discuss the typical LBO sources of finance and a typical debt financing term structure. (10 marks)

5. Based on the financial information and assumptions in Exhibit 2, undertake a DCF

valuation for Bottomline Technologies identifying the intrinsic equity value of a share. Outline the assumptions used and explain your calculations and workings. (15 marks)

6. Based on the financial information and assumptions in Exhibit 3, undertake a LBO

valuation for Bottomline Technologies, identifying the IRR that will be generated on equity assuming an exit in year 5. Outline the assumptions used in your calculations and explain your workings. (10 marks)

7. Evaluate possible exit strategies for 3M if it was decided that the investment in

Bottomline technologies should go ahead. (8 marks)

8. For potential investors into the 3M fund explain private equity fund structures, fund terms, economic terms and corporate governance terms used by typical PE firms. (10 marks)

Reflective Statement (20% of module marks)

Include a 500-word reflective statement on the top challenges facing the financing of

new business initiatives in a market of your choice for 20% of your marks. (20 marks)

3. Marking Guide

The assignment is marked out of 100.

Marks have been allocated against each question, and indications given in the model answers.

Assignment Part Mark Approach Question 1 Using Exhibit 1 and other industry data, carry out a Porter’s five forces analysis on the Cloud Computing Industry.

15 marks

Using information provided on the case company and other research data undertake a Porter’s 5 forces analysis on the Cloud Computing Industry with specific reference to Bottomline Technologies. Marks will be equally allocated to each force.

Question 2 Identify and critically evaluate the characteristics of a good LBO candidate company.

6 marks

Identify the characteristics of a good LBO candidate. Your identification should include both qualitative and quantitative aspects.

Question 3 Explain how a Private Equity (PE) firm such as 3M will align their interest to the managers of Bottomline Technologies.

6 marks

You will be expected to identify how directors of private equity firms provide incentives to target company managers.

Question 4 Discuss the typical LBO sources of finance and a typical debt financing term structure.

10 marks

You will be expected to identify and discuss the sources of finance used on LBO deals with details expected on the various types of Debt structures typically used.

Question 5 Based on the financial information and assumptions in Exhibit 2. Undertake a DCF valuation for Bottomline Technologies identifying the intrinsic equity value of a share. Outline the assumptions used and explain your calculations and workings.

15 marks

You will be expected to use excel to undertake the DCF analysis utilising the assumptions provided in Exhibit 2. You must state all relevant assumptions and show all your workings.

Question 6 Based on the financial information and assumptions in Exhibit 3. Undertake a LBO valuation for Bottomline Technologies identifying the IRR that will be generated on equity assuming an exit in year 5. Outline the assumptions used in your calculations and explain your workings

10 marks

You will be expected to undertake a LBO analysis calculating the IRR based on the assumptions in Exhibit 3 and conclude whether the acquisition will meet the expectations of 3M’s directors.

Question 7 Evaluate possible exit strategies for 3M if it was decided that the investment in Bottomline technologies should go ahead.

8 marks You will be expected to identify and discuss exit strategies that can be applied in a LBO scenario and suggest which would be the most suitable exit strategy for 3M.

Question 8 For potential investors into the 3M fund explain private equity fund structures, fund terms, economic terms and corporate governance terms used by typical PE firms.

10 marks

With reference to investors in PE funds you will be expected to provided information on: - Fund structures - Fund Terms used in practice - Economic Terms - Corporate Governance Terms An identification and explanation of each used is expected.

Include a 500-word reflective statement on the funding options available for technology start-ups in today’s business environment.

20 marks

Your reflective statement should include any relevant practical examples and conclude what’s the likely impact on funding and the industry in the coming years.

Total 100 marks

Generic Level 7 Grading Criteria

Criteria Pass Grades Fail Grades

High Distinction

85-100%

Distinction

70-84%

Merit

60-69%

Pass

50-59%

Fail

30-49%

Low Fail

0-29%

The work displays:

Knowledge & Understanding

(a) Systematic Understanding

(b) Emerging Thought

(a) Strong evidence of a comprehensiv e and systematic understanding of an extensive range of appropriate issues, concepts, theories and research

(a) Clear evidence of a comprehensiv e and systematic understanding of a considerable variety of issues, concepts, theories and research

(a) Clear evidence of a comprehensiv e and systematic understanding of all major - and some minor - issues, concepts, theories and research

(a) Evidence of a systematic understanding, which may contain some gaps, of all major - and some minor - issues, concepts, theories and research

(a) Evidence of an understanding of an appropriate range of issues, concepts, theories and research but has significant gaps or misunderstand ings.

(a) Evidence of a limited understanding of issues, concepts, theories and research either major and/or minor.

(b) Sustained excellence in the application of thoughts and practices at the forefront of the discipline

(b) Precise and well- judged application of thoughts and practices at the forefront of the discipline

(b) Some clear evidence of the application of thoughts and practices at the forefront of the discipline

(b) Clear evidence of an understanding of thoughts and practices at the forefront of the discipline.

(b) Unclear or imprecise understanding of thoughts and practices at the forefront of the discipline.

(b) Significant gaps in the understanding of the debates at the forefront of the discipline.

Argument

(a) Analysis, Synthesis & Evaluation

(b) Numerical Analysis

(d) Independent Research

(a) Consistently precise, accurate and reasoned analysis, synthesis and/or evaluation; addressing issues with insight or originality

(a) Consistently precise, accurate and reasoned analysis, synthesis and/or evaluation addressing all issues, some with creativity

(a) Precision, accuracy and clear reasoning throughout the analysis, synthesis and/or evaluation addressing all issues appropriately

(a) Broad levels of precision, accuracy and reasoning in analysis, synthesis and/or evaluation, and addresses all key issues

(a) Errors which affect the consistency of the analysis, synthesis or evaluation and/or key gaps in the issues addressed

(a) A lack of precision, accuracy or reasoning in analysis, synthesis or evaluation with significant gaps in the issues addressed

(b) Numeric analysis that is complete and free from errors with application of methods that may be insightful or original

(b) Numeric analysis that is complete and mostly free from errors with fluent and appropriate application of methods.

(b) Numeric analysis that is complete and mostly free from errors with relevant and effective application of methods.

(b) Numeric analysis that is mostly complete and free from significant or critical errors with appropriate application of methods.

(b) Numeric analysis that is mostly complete but contains errors with significant effect, or methods that are applied inappropriately

(b) Numeric analysis that is incomplete or contains errors which have critical effect, or methods that are applied inappropriately

(c) Extremely strong and consistent argument making a convincing whole with evidence of originality. Impressive dexterity in the use of information gathered to support the argument.

(c) Extremely strong and consistent argument that convincingly addresses issues including uncertainties and conflicts. Excellent use of information gathered which to support and further the argument

(c) Evidence of an argument that is generally convincing with a good internal consistency and addresses most issues. Very good use of information gathered to support the argument.

(c) Evidence of an overall convincing argument but may have weaknesses, gaps or inconsistencies. Clear use of information gathered but may have some weaknesses in the integration into the argument.

(c) Evidence of a consistent argument but may have weaknesses, significant gaps or be unconvincing. Clear use of information gathered but may not be sufficient to sustain the argument.

(c) Lack of consistency or structure in the argument. Serious weaknesses in the integration of evidence and/or no awareness of the limitations or weaknesses of the research.

Argument (continued)

(d) Independent Research

(d) Evidence of an innovative or original use of extensive personal research which has been thoroughly critically evaluated both conceptually and methodologica lly

(d) Substantial research and evidence of an innovative use of a wide range of personal research with clear and consistent critical evaluation both conceptually and methodologica lly

(d) Clear evidence of considerable personal research and the use of a diverse range of appropriate sources but may contain problems with consistency in the conceptual and methodologica l critical evaluation

(d) Appropriate use of a wide range of personal research which is critically evaluated for key conceptual and methodologica l issues although this may not be consistent throughout

(d) Evidence of a range of personal research but evidence of methodologica l or conceptual evaluation may be limited, inconsistent or inappropriate

(d) Over reliance on very restricted range of personal or secondary research much of which may not be evaluated and may not be directly related to the question or area

Presentation

(a) Structure

(b) Referencing

(a) Excellent structure and presentation

(a) Good structure and presentation

(a) Adequate structure and presentation

(a) Poor structure and presentation

(b) Precise, full and appropriate references and notes.

(b) Full and appropriate references and notes with minor or insignificant errors

(b) Good references and notes with minor or insignificant errors or omissions

(b) Competent references and notes but may contain inconsistencie s, errors or omissions

(b) Poor references and notes with multiple inconsistencie s, errors or omissions

(c) Subtle use of language expressing highly nuanced thought with clarity and precision to a level appropriate for submission for publication.

(c) Precise use of language expressing complex thought with clarity, accuracy and precision which furthers and enhances the argument

Exhibit 1

Bottomline’s Technologies Case Study – Company Information

Our Company

We power mission-critical business transactions. We help our customers optimize financially oriented operations and build deeper customer and partner relationships by providing a trusted and easy-to- use set of cloud-based digital banking, fraud prevention, payment, financial document, insurance and healthcare solutions. We offer hosted or Software as a Service (SaaS) solutions, as well as software designed to run on-site at the customer’s location. The majority of our revenues are derived from offerings sold as SaaS-based solutions and paid for on a subscription and transaction basis. We operate a cloud-based network that facilitates the exchange of electronic payments and invoices between buyers and their suppliers. We offer hosted and on-premises solutions that banks use to provide cash management and treasury capabilities to their business customers, as well as solutions that banks and credit unions use to facilitate customer acquisition and growth. We offer financial messaging solutions for banks and corporations around the world, via solutions that leverage the SWIFT global messaging network. We offer legal spend management solutions that help manage legal and claims vendor expenditures and that automate receipt and review of legal invoices for insurance companies and other large corporate consumers of outside legal services. Our corporate customers rely on our solutions to automate their payment and accounts payable processes and streamline and manage the production and retention of electronic documents and our healthcare customers use our solutions to streamline financial processes, particularly the patient enrolment process. Our document automation solutions are used by organizations to automate paper-intensive processes for the generation of transactional and supply chain documents. We also offer comprehensive cyber fraud and risk management solutions that are designed to non-invasively monitor and analyse user behaviour to flag behavioural and data anomalies and other suspicious activity. Our solutions are designed to complement, leverage and extend our customers’ existing information systems, accounting applications and banking relationships so that they can be deployed quickly and efficiently. To help our customers receive the maximum value from our products and meet their specific business requirements, we also provide professional services for installation, training, consulting and product enhancement. Our Products and Services Payment Network Paymode-X is a leading business-to-business electronic payment network. This hosted solution helps organizations transition from paper to electronic transactions in order to streamline processes, reduce costs and optimize working capital. With more than 300,000 enrolled vendors, new Paymode-X customers gain immediate benefits because many of their vendors are already part of the Paymode- X network. Our solution offers a lower cost settlement option than do traditional credit or debit card payment methods. We continually invest in furthering the value and ease of use of Paymode-X, which includes electronic payments and remittance delivery, online access to payment detail and reports, online payment approvals and turnkey vendor enrolment and support.

Digital Banking We offer payments, cash management and online banking solutions to financial institutions, including banks and credit unions. Our solutions enable banks of all sizes to offer their customers a host of capabilities including ACH and BACS payments, wires, international payments, check production, customer acquisition, balance and information reporting and other features that facilitate enterprise- wide cash management and interaction with their customers. Our solutions allow our bank customers to attract and service a full range of client segments from small businesses to multi-nationals. These solutions feature an intuitive user interface designed to simplify all aspects of cash management for customers of all sizes and sophistication, through both browser-based and mobile channels. Legal Spend Management Our hosted legal spend management solutions and services integrate with claims management and time and billing systems to automate legal invoice management processes and to provide insight into all areas of a company’s outside legal spend. The combination of automated invoice routing and a sophisticated rules engine allows corporate legal and insurance claims departments to create more efficient processes for managing invoices generated by outside law firms and other service providers, while offering insight into important legal spend factors including expense monitoring and outside counsel performance. We are continuing to expand the capabilities of these offerings to facilitate the selection and retention of counsel, and the management and budgeting of litigation matters. Cyber Fraud and Risk Management Our cyber fraud and risk management solutions non-invasively monitor, replay and analyse user behaviour to flag and can stop suspicious activity in real time. The solutions are highly configurable and create accountability by recording and analyzing each application interaction and screen view, reducing the risk of theft, information leakage, internal fraud and payments fraud, as well as decreasing the cost of regulatory compliance. Case management capabilities centralize risk management, speed investigations, and facilitate compliance with regulations pertaining to Anti Money Laundering (AML), the Health Insurance Portability and Accountability Act (HIPAA), and Know Your Customer (KYC). Financial Messaging Solutions Our cloud-based financial messaging solutions leverage the SWIFT global messaging network to allow corporations to exchange financial information including payment instructions, cash reporting and other messages related to financial transactions with their banks and counterparties around the world. Our solutions allow banks and corporations to achieve lower costs, rapid implementation, greater security and improved risk management while avoiding costly internal infrastructure. Payment and Document Automation Our payment automation solutions can generate a wide variety of domestic and international payment instructions along with consolidated bank reporting of cash activity. Our solutions can reduce administrative expenses and strengthen compliance and anti-fraud controls. Users are able to gather and access data via the web on payment and bank account information, including account totals and detailed transaction data, providing improved workflow, financial reporting and bank communications. To help augment financial document workflow and delivery, we also offer a number of solutions designed to automate a wide variety of business documents and supply chain processes as well as related web-based delivery and document archive. Our products offer advanced design, output formatting and delivery capabilities to replace paper-based forms, as well as automating the labour- intensive accounts payable processing of invoices.

Healthcare Solutions Our solutions for patient registration, electronic signature, mobile document and payments allow healthcare organizations to improve business efficiencies, reduce costs and improve care quality. Leveraging our extensive experience optimizing document-driven processes, our solutions are utilized across the acute care hospital enterprise and broader healthcare systems, accelerating the paper-to- electronic transition while helping our customers streamline data flows. Professional Services Our teams of service professionals draw on extensive experience to provide consulting, project implementation and training services to our customers. By easing the implementation of our products, these services help our customers accelerate the time to value. By improving the overall customer experience, these services help us retain customers and drive future revenue-generating arrangements from existing customers. Our Customers Our customers are in diverse industries including financial services, insurance, healthcare, technology, retail, communications, education, media, manufacturing and government. We provide our products and services to approximately 60 of the Fortune 100 companies and approximately 80 of the FTSE (Financial Times) 100 companies. Our customers include leading organizations such as Bank of America Merrill Lynch, BBVA Compass, British Airways, Catholic Health Initiatives, Cedars-Sinai Medical Centre, Cigna Corporation, Franklin Templeton, Fidelity, Lloyds Bank, Capital One, Deere and Company, Target Corporation, Johnson Controls, Inc., State Farm Insurance, Sutter Health, Vodafone and Zurich American Insurance Company. Our Competition

The markets in which we participate are highly competitive. We believe our ability to compete depends on factors within and beyond our control, including:  Our ability to develop new, innovative technology solutions that meet the evolving needs of our

customers and the shifting dynamics of the markets we participate in;  Our ability to attract and retain employees with the requisite domain knowledge and technical

skill set necessary to develop and support our products;  The performance, reliability, features, ease-of-use and price of our offerings as compared to

competitor alternatives;  Our industry knowledge and expertise;  The execution of our sales and services organizations; and  The timing and market acceptance of new products as well as enhancements to existing products,

by us and by our current and future competitors. For our Paymode-X solution, our competitors include SunGard and AvidXchange in addition to ACH capabilities offered by banks. For our digital banking payments and cash management solutions, we primarily compete with companies such as ACI Worldwide, Fiserv and FIS that offer a wide range of financial services, including electronic banking applications. We also encounter competition in our digital banking customer acquisition offerings from MeridianLink and D&H Corporation. For our legal spend management solutions, we compete with a number of companies, including Wolters Kluwer ELM Solutions, LexisNexis and Computer Sciences Corporation (CSC). Our cyber fraud and risk management products compete with NICE Actimize, Norkom-Deitca, SAS, Fiserv, Guardian Analytics and FairWarning.

For our financial messaging solutions, we compete with D+H Corporation, Eastnets, SunGard and SWIFT. For our healthcare solutions, our primary competitors are FormFast and iMedConsent. Our payment and document automation products compete primarily with products from companies that provide solutions to create, publish, manage and archive electronic documents and companies that offer payments software and services. Our products also compete with companies that provide a diverse array of accounts payable automation and workflow capabilities. We also compete with providers of enterprise resource planning (ERP) solutions and providers of traditional payment products, including check stock and check printing software and services. In addition, some financial institutions compete with us as outsourced check printing and electronic payment service providers.

Exhibit 2 Bottomline Technologies Case Study - Financials

Bottomline Technologies Income Statement (in millions) 2018 2017 2016

$’m $’m $’m Net sales 15,516 15,797 16,435 Cost of goods sold 9,876 10,077 10,146 Gross profit 5,640 5,720 6,289 Operating expenses 4,449 4,196 4,206 Operating income 1,191 1,524 2,083 Interest expense 75 59 75 Interest income -8 -6 -5 Income before income taxes 1,124 1,471 2,013 Income taxes 448 551 751 Net income 676 920 1,262 Weighted-average number of shares—basic 399 411 435 Weighted-average number of shares—diluted 400 413 440 Earnings per share—basic 1.69 2.24 2.9 Earnings per share—diluted 1.69 2.23 2.87

Balance Sheet (in millions) 2018 2017 ASSETS $’m $’m Current assets: Cash and cash equivalents 1,783 1,370 Inventory 1,830 1,873 Other current assets 702 742 Total current assets 4,315 3,985 Property and equipment, net 2,616 2,850 Other long-term assets 679 638 Total Assets 7,610 7,473

LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of debt 65 421 Accounts payable 1,243 1,112 Accrued expenses and other current liabilities 1,113 979 Income taxes payable 32 23 Total Current Liabilities 2,453 2,535

Long-term liabilities: Long-term debt 1,248 1,310 Lease incentives and other long-term liabilities 1,005 1,083 Total Long-term liabilities 2,253 2,393

Stockholders' equity: Common stock $0.05 par value 20 20 Additional paid-in capital 81 — Retained earnings 2,749 2,440 Accumulated other comprehensive income 54 85 Total stockholders' equity 2,904 2,545

Total Liabilities and Equity 7,610 7,473

Exhibit 2 (continued) Bottomline Technologies Case Study – Forecast Assumptions for DCF The current historical financial information is a good starting point for building your DCF forecast and subsequent equity valuation. Knowing that you are new to the role your VP (Vice President) on the LBO desk has sent you an e-mail with the following key points with reference to the forecast assumptions for Bottomline Technologies. The key points include:

 Although sales growth has been negative in the past couple of years it has been anticipated that with the experience of the LBO team, new operational management for Bottomline Technologies and access to wider markets, sales can now be expected to grow by 20% per annum.

 The EBIT margin will maintain at the current 2018 level for the foreseeable future.  The effective tax rate for 2018 can be applied in the calculation of all forecasted NOPAT

numbers (Net Operating Profit After Tax).  Historically Capital Expenditure (CAPEX) has been $524 (2018), $726 (2017) and $ 714 (2016)

and will be expected to remain at the 2018 level as a % of Sales for the foreseeable future.  Depreciation in 2018 was $593 and this is also expected to remain as the same relative % of

sales in 2019 and beyond.  An anticipated 5% of sales for investment in working capital is expected annually from 2019

and beyond.  Post the 5 year forecast period there is expected to be wider competition in the cloud

computing market and it is anticipated that Free Cashflows from year 5 onwards will at a rate of 7% in perpetuity.

 For DCF valuation purposes 3M uses an initial WACC of 10% to evaluate potential target companies.

Exhibit 3 Bottomline Technologies Case Study – Leveraged Buyout (LBO) Assumptions The directors of 3M are keen to finance the acquisition of Bottomline Technologies with a large proportion of debt and would like to model the expected IRR on initial equity assuming an exit after year 5. The following assumptions should be used in your LBO valuation:

 Transaction comparable information suggests that an entry multiple of 7 times 2018 EBIT would be a good proxy valuation for the Bottomline Technologies on a LBO basis.

 The debt on the 2018 balance sheet of Bottomline Technologies will be refinanced on the acquisition.

 Directors of 3M anticipate using 70% Debt and 30% Equity to finance the acquisition.  The debt financing has been structured in a manner to achieve a repayment schedule of

$500m per annum from year 1.  With the exit multiple not expected to expand and the earliest exit expected in year 5, the

directors of 3M would like to know whether the acquisition of Bottomline Technologies would meet their expected 45% return on equity capital.