From: Richard Kahn
To: Jeffrey Epstein <jeevacation@gmail.com>
Subject: Fwd: Next
Date: Fri, 25 Aug 2017 09:27:01 +0000
Please advise. Thank you.
Richard Kahn
HBRK Associates Inc.
575 Lexington Avenue, 4th Floor
New York, NY 10022
Tel
Fax
Cell
Begin forwarded message:
From: Neale Attenborough
Date: August 24, 2017 at 4:50:55 PM EDT
To: Richard Kahn <
Cc: Chris Lawler .4 I
Subject: RE: Next
I look forward to our conversation.
For the record, we did actually pay $18MM for 42% of this business in 2008. At the time that represented an —8x
multiple of EBITDA. That is not a fictitious number. In addition we did receive a bid for about the same amount from
Open Gate Capital, a reputable private equity firm. I do not understand why you say that ii is "hardly legitimate". While
I did say we didn't expect to receive what we paid, I did not say it was immaterial.
I don't follow most of what you say below and look forward to hearing your clarification. However, can you please
clarify one statement specifically? What do you mean when you say the current receivables have not be reviewed in
years?
Thanks,
Neale
From: Richard Kahn finailto:
Sent: Thursday, August 24, 2017 3:45 PM
To: Neale Attenborough
Cc: Chris Lawler
Subject: Next
confirmed thank you
EFTA01037123
We have reviewed your statements that you sent to us along with the K-1's and some financials. Frankly,
some of the numbers are inaccurate as a result of millie. Your annual financial statements were reviewed but
not audited - shame on all of you... Your calculation of Ebitda includes things like adding back foreign
exchange costs? board fees etc. That is not the way we look at what is unfortunately for all merely a personal
service business.
Faith and Joel make up the business, nothing more. We calculate the Ebidta, which we think is an odd way of
measuring value of a personal service biz with lots of competition and small growth opportuinties if any.
Giving you the benefit of the doubt, and ignoring how much you paid or if some of that money was repaid
directly to the former owners of Claxon and not truly understanding what you described as a fixed tax payment
per quarter (ie based on what I think looking back over the past three years) ebitda looks like 4-5 million. We
have bought many small biz and usually pay mom and pops for 1- 3 times ebita or more usually 4 times net
income. We are finding it difficult to get to more than a 15 million total value for Next ( not including
liabilities). The 18 million dollar bid that you mentioned Faith said was hardly legitimate. I think further
review of the accounting tax etc. is probably a waste of all our time. As you rightly said, what you initially
paid is somewhat if not totatly immaterial to todays value. You have not factored in the liabilities, both
reputationally and fiscal yet. I think the 5 million cash offer or 6m over time is fair. I look forward to our
conversation on tuesday. As another note, the current receivables have not been reviewed for years...
Rich
On Aug 24, 2017, at 3:28 PM, Neale Attenborough < wrote:
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