In the exciting world of mergers and acquisitions (M&A), conflicts of interest between company owners and employees can be challenging, particularly without established golden parachutes. Before exploring how these interests can affect the company’s sales process, it is essential to understand what golden parachutes are.
Golden parachutes: What are they and why do they matter?
Golden parachutes are contractual agreements one designs to provide executives and directors with substantial compensation in the event of a company sale or a hostile acquisition potentially resulting in termination or a change in position. These agreements are made to protect the financial interests of company leaders during a period of uncertainty, ensuring significant compensation. These are often in the form of severance payments and benefits.
The owners’ conflict of interest: maximizing value vs. protecting the team
With this understanding, we can explore how business owners tackle maximizing the value of their investment while protecting the interests of their employees during an M&A.
The employees: insecurity, potential changes and their conflicts of interest
For employees, a leadership change of the company causes concerns about their future employment and working conditions. Most people fear change and “changing bosses,” especially when they are content with their current relationships. The presence or absence of golden parachutes can significantly impact their attitude towards these changes.
Frequently, I meet with business owners when I have a potential buyer interested in their company for an acquisition. It’s common for them to express interest, as they are ready to retire. They often ask me to contact “Maria or John,” their CEO or trusted person, for all the information required to prepare for sale. Alternatively, when I’m not representing the buyer’s side, they give me a mandate to sell the company.
“Maria or John” often show little interest in proceeding with the transaction. They may pretend to collaborate but delay the information delivery process or even attempt to convince their boss not to move forward.
One way to avoid these conflicts is by establishing a golden parachute aligning the interests of key employees and shareholders. You will achieve this by setting up a bonus payable by the selling partners. You could also set value ranges based on the achieved sale price and establish an extralegal indemnification in case of termination by the new owner within a certain timeframe.
In many cases, buyers can even turn out to be better than the original employer. Buyers are often multinational corporations with larger compensation packages and opportunities for international career growth. However, sometimes, the buyer fires and indemnifies employees who are not performing well or land in duplicate roles.
Conclusion
In the world of M&A, golden parachutes are just one part of the equation. Conflicts of interest between owners and employees are key challenges that you must carefully address. The key is to find a balance between maximizing value and protecting the company’s most valuable asset: its team. Negotiation and transparency are essential in achieving this balance.
Ultimately, all parties involved—owners, advisors, and employees— should benefit from the results of a successful transaction.
About the author:
Simón Restrepo Barth, Professor of Finance, Board Member, Investment Banker. Partner of ONEtoONE Corporate Finance. Master in Finance from Universidad de los Andes. Certificate in Advanced Valuation with high honors at NYU | STERN, a certification in negotiation from Harvard University and a certification in Real Estate Investment Strategies at Columbia Business School.
If you need advice for the sale of your company, contact us now with no obligations. We will help you prepare and guide you step by step, to ensure you get the maximum benefit from the process.
You’ve probably seen many lists of the top 10 questions of entrepreneurs when selling their company, but maybe you haven’t found the answers you really needed. The decision to sell involves financial, emotional and strategic considerations. That’s why it’s normal to have doubts. All entrepreneurs have them when the possibility of selling their business becomes a reality.
If you have decided to sell your business, it is normal to have those doubts. The good news is that the questions you are asking yourself are probably the ones we have already answered for our clients.
In this article, we will answer the top 10 questions when selling a company that entrepreneurs who are thinking of selling their company ask themselves. Not just the most frequent ones but also the most concrete ones.
Top 10 questions of entrepreneurs when selling their company
Among the top 10 questions when selling a company, entrepreneurs have personal, economic and operational concerns. Let’s take a look at them below.
1. How is the confidentiality of the company’s sales process guaranteed?
Depending on the market in which they operate, it is natural for entrepreneurs to be concerned about keeping the news of the sale strictly confidential.
In the Anglo-Saxon world, selling the company represents a triumph and is a mark of success. On the other hand, the perception is very different in the Spanish market. An entrepreneur may fear that selling is perceived as a sign of decline or failure.
Nothing could be further from the truth. Normally, companies that are sold are companies with a proven level of success and great growth potential. That is why they find buyers.
“I am concerned that my company’s name will be compromised in the marketplace.”
Moreover, for the entrepreneur, the sale represents a strong financial return. This can be a great reward for a lifetime of hard work.
Knowing these different perceptions of the transaction, and its impact on the entrepreneur and the market, is the responsibility of a good advisor. This M&A specialist understands the entrepreneur’s needs and does not judge them.
On the contrary, they can shield every aspect of the entrepreneur’s concerns.
In the case of the sale, confidentiality is guaranteed through proper NDA procedures and the correct selection of potential buyers or counterparties. Conflicting counterparties are avoided. The expert advisor focuses on qualified financial and industrial investors.
In addition, other phases are controlled, such as exchanging documentation using technology, such as a Virtual Data Room.
2. How do I know the buyers you introduce to me are the best?
The selection of counterparties is a critical process. The difference in the selection of the best counterparts lies in access to certain key resources:
The best databases on the market.
Knowing how to guarantee maximum traceability of contacts and control of these by the client.
Maximum transparency of the entire process through monitoring tools. At ONEtoONE, for example, we have our platform, CLARITY. Through it, the client can consult the status of their mandate at all times.
Having an international network with contacts in all sectors’ most important M&A markets. This guarantees access to the buyers who can pay the most, who do not necessarily have to be local.
The choice of strategy will depend on the type of company, the sector and the personal preferences of the entrepreneur.
Resources to find the best counterparts
3. What can I expect from the operation?
Selling the business can offer financial benefits, risk reduction, new opportunities, freedom from liability and the possibility of leaving a lasting legacy. For each entrepreneur, the expectations and possibilities are different.
The first and most obvious effect is that the sale provides considerable financial realisation. After years of hard work and dedication, selling the business can generate a significant return on the investment.
By doing so, the entrepreneur can secure personal financial stability or take advantage of new investment opportunities.
In addition, selling the business can free the entrepreneur from the responsibilities and pressures of running the business. This results in a significant reduction of stress and workload. Selling allows the entrepreneur to enjoy a better work-life balance.
The sale also provides the opportunity to pass control to a new owner who can continue to develop and grow the company while the entrepreneur can explore new interests or projects.
4. Will I have to stay on to run the company after the sale? For how long? What will happen to the employees and my family working for the company?
Among the top 10 questions, entrepreneurs ask themselves when selling their business is often a concern for their future and that of their team.
In our experience, there are no redundancies in the sale of family businesses. On the contrary, the buyer tries to motivate the management team to stay on.
Planning a smooth transition, ensuring the retention of key employees and ensuring continuity of customer service are essential aspects for the buyer. In doing so, it seeks to minimise negative impacts.
As for the seller, showing the availability of some continuity helps a better sale. Commitment to permanence over time reassures the buyer of a transition without losing rhythm in production. This is a crucial element in building trust between buyer and seller.
At the end of the day, tenures do not usually go beyond 18 months or two years at most.
Finally, it is crucial to communicate clearly and transparently about upcoming changes, providing reassurance and maintaining the confidence of key stakeholders.
5. What happens to the company’s assets, such as the office, warehouses or storage?
There are two types of assets that a company owns: productive and non-productive. You will need to manage each of them differently.
Productive assets are those assets necessary for the activity of the business, for example, specific machinery in a factory. This normally falls within the sales agreement.
Non-productive assets are those that are not part of the company’s production process. It is preferable to remove them from the perimeter as soon as possible.
Real estate assets (warehouses or buildings where the company’s activity is carried out) are considered non-productive assets. Buyers are usually not interested in purchasing real estate assets.
“What happens if I have my second home in the company’s name?”
If the assets belong to the company, the usual practice is to spin them off from the company. The seller itself can buy the asset as an individual or through a holding company.
This obviously has several tax implications. Therefore, each asset has to be analysed to calculate the tax cost of the spin-off. If the demerger is carried out in good time, two years must elapse before these assets are considered tax neutral.
Finally, the purchaser may ask to lease the non-productive asset even if not interested in buying.
6. I have a lot of liquidity in the company. What do I do with it?
Surplus cash is also a question that creeps into the questions of every entrepreneur who wants to sell his company.
The company’s liquidity neither increases its value nor hurts the sale process. If there is a lot of liquidity, it is best to “get rid” of it.
The simplest way to distribute surplus cash is via dividends.
7. What can I do if the company’s stock is bloated?
At certain times, such as when interest rates are so low, entrepreneurs may have decided to invest in buying goods or filling the warehouse instead of keeping money in the bank.
It may be that the sales process coincides with one of these times when the company’s stock is “bloated”. What to do with this surplus is one of the most frequent questions entrepreneurs ask themselves when selling their business.
The buyer understands that the working capital is what is necessary to continue the business.
However, if there is a surplus, the best thing to do is to reduce it as quickly as possible to demonstrate that the company’s working capital is lower than its historical level and to pay it out in dividends when liquidity is available.
8. Can I start the sale process without the agreement of all the company’s shareholders?
In companies with multiple shareholders, it is common for different views and objectives to exist among the shareholders. Even family relationships sometimes complicate these situations greatly.
Some shareholders may be interested in selling the company. Others may not. Even if they agree to sell, they may have different opinions about the right time to sell.
“My brother doesn’t want to sell, but I think we can convince him, can we start the process without him?”
Strictly speaking, a shareholder can begin the sale process by seeking potential buyers and evaluating options without requiring the unanimous consent of all shareholders.
However, the ability to close the sale of the company depends on the corporate governance structure and the provisions set out in the company’s bylaws. The by-laws set out the rules and procedures governing important decisions, and the sale is one such decision.
Therefore, the final decision to sell the company may require the approval of a majority of shareholders, depending on the applicable contractual or legal provisions.
Thus, it is not advisable to start the process knowing that a shareholder disagrees upfront. That shareholder will then have very high bargaining and decision-making power. Even if the transaction is delayed, it is advisable to have the mandate agreed upon by all parties involved.
9. Is it important to know if there are relevant operations in my sector? How can I find out which ones?
Knowing the relevant operations in the company’s sector is essential for a successful sale. This information is vital for several reasons:
To obtain a proper valuation. You will be able to understand the context in which the company finds itself and assess its relative position in the market. A more accurate valuation of the company is then possible. The company’s real value can be determined by considering its financial performance, competitive position and growth potential. This is the way to establish a fair price.
To generate attractiveness for buyers. Buyers interested in acquiring a company usually have a good knowledge of the sector in which it operates. By being aware of relevant industry operations, the seller can effectively communicate your business’s unique and valuable aspects. They can highlight their competitive advantage and growth potential relative to other companies in the same industry.
To identify potential strategic buyers. Potential synergies or shared strategic interests can be identified by knowing which companies are active in the sector and have made recent acquisitions.
To prepare the due diligence. During the sales process, buyers often conduct thorough due diligence or audit of the company. With information about the industry, the seller can anticipate potential areas of interest or concern for buyers and prepare accordingly.
Four benefits of knowing what relevant transactions have taken place in my sector.
All this information provides a great advantage in the negotiation with the buyer.
To have this information, it is necessary to have access to the best databases.
A professional advisor has such access, and his market knowledge allows him to interpret the data in the most advantageous way for the transaction.
10.Why do I have to pay you as a consultant? If I get a good offer, I sell. Isn’t it better that you present me with targets and take a position with the buying side?
It could do so, but that turns the transaction into a bilateral process. A bilateral transaction is a transaction between a seller and a single buyer.
In this type of transaction, the buyer is the one who pays the advisor. Therefore, the advisor will try to lower the transaction price as much as possible, which is a conflict of interest.
Experience has shown that buyers pay 20-30% less the sale price in a bilateral process than in a competitive process. The seller saves fees at the cost of a lower price and worse conditions for the sale.
The expert advisor: the best source of information to answer every entrepreneur’s questions when selling their business.
The questions listed above are some of the top 10 questions when selling a company entrepreneurs often ask themselves when considering the sale of their business.
By addressing these questions and seeking appropriate advice, entrepreneurs can be better prepared to make informed decisions and achieve a successful sale process.
Selling a business can be a complex and stressful process. It involves personal, financial, legal and strategic aspects.
A specialised advisor will assist you in contacting and negotiating with all shareholders. In addition, he or she will inform you of all legal and contractual obligations and requirements during the sale process.
Also, they have up-to-date information on competition, regulatory changes, industry risks, and other factors that may affect a buyer’s company assessment.
Selling a business is a significant decision that requires careful planning and consideration. Please do not hesitate to contact us if you are considering it. We are here to help you. At ONEtoONE, we can help you. Get in contact with us now.
You may have wondered about the importance of the cybersecurity sector in the world of M&A. In a world ofever-growingdigital economies comes an ever-growing world of digital crime. With cyberattacks causing an estimated $10.5 trillion in damage by 2025, an estimated 65% of organizations are planning to increase their 2023 cybersecurity spending – making the cybersecurity sector in the world of M&A a hotly-contested and highly-lucrative sector.
Never-before-seen rates of global concern over growing cybersecurity threats are catapulting the sector’s growth and the overall cybermarket potential.
Whilst the level of corporate transactions in most sectors has dropped from the 2021 highs, there are some indications that cybersecurity might be an outlier in 2023.
The abundant opportunities for innovation in the cybersecurity sector are partly due to the breakthrough of AI tools with near-human analytic capabilities that, in turn, have also introduced unprecedented security risks.
The most value-generating and successful M&A deals occur when the buyer and seller’s needs are met. And, in the case of cybersecurity, a mutually-beneficial corporate match will only occur if the advisor truly understands the underlying technology needs of the buyer and seller. This makes for less wasted time and great value realization.
At ONEtoONE, our advisors strive to understand the cybersecurity technology and needs of our clients and counterparties.
Overall, this innovative sector presents exciting prospects and opportunities for the M&A world.
Notable M&A transactions in the cybersecurity sector
Broadcom’s acquisition of VMware
This $61 billion acquisition of the cloud software provider VMware by the semiconductor giant Broadcom is said to be one of the largest cybersecurity deals in history.
Citrix’s merger with Vista’s portfolio company TIBCO Software
Vista’s portfolio company TIBCO Software acquired Citrix Systems, a cloud service provider, for $16.5 billion.
Thoma Bravo’s acquisition of SailPoint
VC firm Thoma Bravo acquired SailPoint, an identity management company, for $7 billion.
At ONEtoONE, our global advisory infrastructure, M&A expertise, and advanced market analytics technology make us the best advisors for any middle-market M&A transaction. But, more importantly, our advisors are best prepared to add long-term value to our clients because they fully understand the underlying technologies within these emerging cybersecurity products. This insight allows our advisors to identify optimal matches, fitting cybersecurity companies with counterparties that will gain the greatest value in the partnership.
Our network of international partners, which specializes in a plethora of industry sectors, including cybersecurity and information technology, allows us to locate the best buyers and sellers for your company.
The due diligence process is a basic procedure in a business operation or purchase transaction. It occurs when a company evaluates the advisability of carrying out a merger or acquisition, or when an entrepreneur is considering selling their business.
It involves checking risks and compliance, conducting an audit to verify facts and information on a particular subject, and determining the state of the company. A large amount of information and documentation is requested. Notably, it is the most sensitive part of the process as it consists of checking all the documentation and information previously delivered.
From a seller’s perspective, due diligence requires a great deal of preparation. Mainly in correcting possible irregularities in management and presenting all the documentation correctly to the buyer.
We can help you understand the necessary strategies to employ during this process.
The importance and necessity of due diligence in the company sale and purchase process
Due diligence is essential for the closing of the transaction, both from the buyer’s and the seller’s point of view. It is an important step in the process of selling your company whereby the buyer examines and audits the business in order to decide whether to make the purchase.
Due diligence can be commissioned by either party, but when it is commissioned by the seller itself. It is called vendor due diligence.
Sellers themselves may be interested in speeding up the sales process and by carrying out due diligence, they save time and effort for potential buyers.
For the seller, due diligence can be a taxing process. As a result, we advise business owners to compile and organise all relevant information about their company. This includes financial statements, contracts, employee data and legal documents. For the benefit of potential buyers, this information should be presented in a clear and succinct manner.
Creating a virtual data room or virtual platform, which is a safe repository for the distribution and archiving of documents, can help ensure that the information is accurate, current, and organised in a way that is easy to navigate. This further enables the business owner to maintain a degree of confidentiality throughout the process. The seller can increase the likelihood of a successful sale by providing the information in this way, thus fostering a healthy rapport with the buyer.
Therefore, buyers are more likely to invest their time in a motivated and well-prepared vendor, as it instils confidence in their decision-making process.
Seeking professional advice
Using third-party service providerscosts money, but it can offer a variety of benefits. To improve the effectiveness of the due diligence process, it is advised to engage with M&A specialists, such as financial and legal experts.
Normally, the aspects that the buyer will evaluate are:
To further assess the financial health of your business and establish its value, you may also be asked about any outstanding liabilities and debts. Your financial projections can be requested as well.
These experts will guide you on what information to provide to prospective buyers and how to present it.
The due diligence process requires excellent relationship management of two distinct areas: the buyer, and advisor networks.
When it comes to selling your company, we urge business owners to put themselves in the buyer’s shoes and anticipate the types of queries they might have. Concerns about the company’s financial performance, market trends, rivalry, customer connections, and other factors that might affect the can be included in this.
Likewise, as mentioned above, seeking professional advice is necessary if you wish to sell your business. We encourage the seller to build a rapportwith the advisors and rely on their expertise to guide them through the process.
Misinformation is a common occurrence during the due diligence process. Thus, sellers should be as open and transparent about the strengths and weaknesses of their business, disclosing any potential risks or liabilities, in order to build confidenceamong potential buyers.
During this due diligence process, you may feel uncomfortable with the meticulous questions involved. But remember that it is essential to communicate frequently and transparently with the buyer, addressing their concerns.
Being patient and transparent will reinforce your image and that of the company to the buyer. This will be reflected in the price you get and will facilitate the deal in the subsequent negotiation, ensuring a successful sale.
Controlling the process
Moving with a sense of urgency is crucial for all stages of due diligence however this is distinct from rushing.
Sellers should control the due diligence process. This can be achieved by setting clear deadlines and goals. In this way, they can identify aspects of their business which need further attention or clarification. This will further allow them to leverage their advisors, networks and their own skill set to gather the information required.
It’s important to keep in mind that the deal requires the consent of both parties every step of the way and a buyer could terminate the process if they feel time is slipping.
However, the seller should never rush the process. They should stick to an urgent pace, thus maintaining their momentum and using the time they have to engage with the buyer closely.
The process of selling a company is very complex. That is why it is essential to have the help of a company specialised in mergers and acquisitions. They will take care of all the steps and advise the selling party on everything they need.Do not hesitate to contact us!
Van Hoorebeke Timber, the Belgian wood distributer, has sold their company to van Steenberge, a leading wood delivery specialist. ONEtoONE acted as van Hoorebeke’s exclusive financial advisor.
With the combined skills of both companies, comes the creation new synergies in the international timber market, and by combining the know-how of both companies, there will be an expansion in their respective markets.
van Hoorebeke Timber is one of the most important Belgian players in the sector of import and distribution of wood. Etienne Van de Kerckhove, former chairman of van Hoorebeke Timber: “We are confident that both companies will create even more value for the respective customers and business partners, as well as many growth opportunities for both teams. Timber products are an important sustainable building material for the future and the European timber market needs global players with strong expertise and purchasing channels.”
Van Steenberge is a leading specialist in timely delivery of softwood, panel material and numerous finished wood products for the contracting industry and general industry. They combine their decade-long experience and knowhow with an innovative mindset, allowing them to anticipate the ever-evolving needs of their customers with a solution-oriented approach. They do this together with their team of wood specialists who follow the newest trends and techniques regarding soft wood and panels closely.
ONEtoONE Corporate Finance has offices in Europe, the United States, Latin America, Asia and Oceania. We are a global advisory firm specialising in selling companies like yours. All our human and technological resources, databases, experience and processes are focused on helping our clients sell their companies at the highest possible price. We help you strengthen your legacy, so you can focus on what matters to you in this new stage of your life.
Are you ready to sell? It’s your time, and we’re here to help!
Ufenau Capital Partners, the privately-owned Swiss Investor Group, has acquired a majority stake of the market research and analytics solutions specialist, Grupo Marktest.
With the support of Ufenau, the objective of Marktest is to grow consolidating a group of leading specialists in the field of market research and analytics in Europe with profound sector-specific expertise coupled with cutting edge data visualization and analytics capabilities.
Ufenau Capital Partners is a privately-owned Swiss Investor Group which advises private and institutional investors with their investments in private equity. Ufenau Capital Partners is focused on investments in service companies in German-speaking Europe, Iberia and the Benelux region and invests in Education & Lifestyle, Business Services, Healthcare, IT Services and Financial Services sectors.
The Group is a leading tech-enabled market research and analytics solutions specialist with relevant international presence. With an experience of +40 years and +300 professionals, Marktest is the leading independent market research player in Portugal. The Group has an outstanding track record supporting media channels, agencies, and advertisers to capture relevant data and turn it into actionable insights.
The Founders of Marktest will continue to lead the business into its next growth phase and will significantly co-invest alongside Ufenau. Together, Marktest’s team and Ufenau will ensure the continuation of the successful growth strategy.
ONEtoONE Corporate Finance has offices in Europe, the United States, Latin America, Asia and Oceania. We are a global advisory firm specialising in selling companies like yours. All our human and technological resources, databases, experience and processes are focused on helping our clients sell their companies at the highest possible price. We help you strengthen your legacy, so you can focus on what matters to you in this new stage of your life.
Are you ready to sell? It’s your time, and we’re here to help!
KCM, the Spanish rubber industry manufacturer has sold their company to the Italian group COLMEC SPA. This joining of forces by COLMEC and KCM, which was advised by ONEtoONE Corporate Finance, aims to provide complete solutions in elastomer processing.
This acquisition of KCM by COLMEC aims to strengthening both companies. On the one hand, the COLMEC GROUP expands its portfolio of mixing solutions by acquiring the knowledge, installed base and maintenance of KCM’s internal and external mixers.
About the seller: KCM
KCMis a Spanish company, based in Barcelona, dedicated to the design and manufacture of machinery for the rubber industry. The company was founded in 1989 by Francesc Vilella. The company has a strong international presence, where more than 50% of its activity is destined for export. They supply complete lines for the processing and transformation of rubber, as well as complementary equipment that optimise existing machinery to achieve higher yields and reach the best quality of the manufactured product.
Their product lines are basically: Internal mixers, Cylinder mixers, Filtering machines, Hydraulic presses, Extruders and Complete extrusion lines. The company has two types of customers: Manufacturers of rubber or plastic mixtures and Manufacturers of profiles and pipes.
About the buyer: COLMEC SPA
COLMEC SPA is an Italian company founded in 1973, being a world leader in the design and construction of high technology extrusion and mixing lines for rubber and silicone. Today the company is focused on the manufacture of rubber processing plants, from blending to packaging and processing of silicone.
In 2008 it set up a Technology Centre dedicated to research and development activities and customer trials. In 2011 it opened an office in Connecticut (USA) and has since added new companies. With this incorporation COLMEC SPA wants to position itself in the Spanish market and complement its product line.
The advisors: ONEtoONE Corporate Finance
This acquisition will provide KCM with greater market penetration by offering commercial solutions that the company did not have until now. The company is now able to offer complete solutions for rubber processing, from mixing to finished product.
ONEtoONE Corporate Finance has offices in Europe, the United States, Latin America, Asia and Oceania. We are a global advisory firm specialising in selling companies like yours. All our human and technological resources, databases, experience and processes are focused on helping our clients sell their companies at the highest possible price. We help you strengthen your legacy, so you can focus on what matters to you in this new stage of your life.
Are you ready to sell? It’s your time, and we’re here to help!
This transaction will allow Localpack to increase its depth in the Life Science market and consolidate its growth strategy. Gatepharma Soluciones‘ team, now as a Localpack company, will be able to significantly increase its level of commercial activity and relationships with customers and partners.
It will also allow pharmaceutical companies in Colombia to have a supplier with excellent financial and logistical strength, framed by the highest standards of service and availability.
About the buyer: Localpack S.A
Localpack S.A. is one of the fastest growing companies in Colombia in the specialty chemicals distribution business, this is the third acquisition we have executed for them in less than 4 years.
They offer raw materials for industries specialized in coatings, adhesives, lubricants, construction additives, pharmaceuticals, food, animal nutrition, agrochemicals, plastics, rubbers and more.
About the seller: Gatepharma Soluciones
Gatepharma Soluciones is a company located in Medellin Colombia with 22 years of experience in the distribution of excipients and active ingredients for the pharmaceutical industry.
Established in 2014, it is a pharmaceutical solutions company focused primarily on pharmaceutical ingredients, modified delivery products and innovative finished products.
If you are considering selling your company, ONEtoONE Corporate Finance can help you get the best deal possible. We are a global firm dedicated to providing the highest value services to our clients through transparency and professionalism.
ONEtoONE is specialised in international middle-market M&A advisory. We have participated in more than 2000 mandates and we continuously improve our techniques to achieve the best possible price for our clients. We advise on mergers and acquisitions, strategic planning, and valuation. If you need advice for any possible corporate operation, do not hesitate to contact us.
Cegid Primavera, the Spanish business management solution provider has acquired 100% of Informàtica3 from its two founding partners, who will remain with the company during this new phase. This operation was advised and led by ONEtoONE Corporate Finance.
Cegid Iberia – Grupo Primavera incorporates with Informàtica3 a portfolio of 4,000 customers and more than 35,000 users, including entrepreneurs, consultants, managers, retailers, hoteliers and restaurateurs, thus accelerating the consolidation of the business software sector in Spain.
About the buyer: Cedig Iberia
Cegid is a leading global provider of cloud-based business management solutions for the Finance (Treasury, Tax and ERP), Human Resources (Payroll, Talent Management), Accounting, Retail, Entrepreneurship and Small Business sectors.
With a strong international ambition, Cegid has 4,400 employees and distributes its solutions in 130 countries with offices in 22 countries. Pascal Houillon, CEO of the company, joined Cegid in March 2017. Since the Silver Lake fund took a stake in its capital, its ambition has been to boost its inorganic growth outside France, its core market.
In the Iberian Peninsula, Cegid is a leader in Cloud business management solutions and has more than 1,300 employees, 700 partners and a pro-forma turnover that is expected to reach €169 million this year.
About the seller: Informàtica3
With more than 40 years of experience and headquartered in Girona, Informàtica3 is a leader in creating software solutions for business management aimed at small and medium-sized companies seeking to optimise their information processes.
Its mission is to offer a product that is close to end users, facilitating the administration of their company with programmes that, characterised by a high level of technological knowledge and simplicity of use, exceed the requirements of multiple sectors and environments. With more than thirty years in the management software sector, they have brought extensive knowledge and commitment to what they do.
Its integration into Cegid Primavera‘s portfolio of solutions will boost the growth of the company, which currently employs around 20 people and expects to achieve 3 million euros in sales this year.
The advisors: ONEtoONE Corporate Finance
This latest acquisition follows the recently announced acquisition of Gestión Remota, with which Cegid continues to consolidate its position as the leading global provider of cloud-based business management solutions in the Iberian Peninsula.
If you are considering selling your company, ONEtoONE Corporate Finance can help you get the best deal possible. We are a global firm dedicated to providing the highest value services to our clients through transparency and professionalism.
ONEtoONE is specialised in international middle-market M&A advisory. We have participated in more than 2000 mandates and we continuously improve our techniques to achieve the best possible price for our clients. We advise on mergers and acquisitions, strategic planning, and valuation. If you need advice for any possible corporate operation, do not hesitate to contact us.
Have you ever thought about entering into the business world but don’t feel you have the foundations to do so? There is often a desire for entrepreneurship, but the process of setting up a business from scratch can seem like an almost impossible task. If this is the case, you may not have thought about a good option that is available to you: buying a company.
Buying an existing company that is for sale can be an opportunity to enter into business without going through the process of starting one from scratch. Have you ever been attracted to a company for sale? As in all choices in life, there are companies for sale that will fit your vision and your project and others that will not.
Knowing which company to buy can make the difference between taking the first step towards a successful business venture or, on the contrary, getting off on the wrong foot. Don’t worry: there are professional advisors who can accompany you in this process and advise you on the best choice. So that you can look forward to your business project with the peace of mind of knowing that you are not taking any wrong steps on your way to success.
1.Identifying the sector in which you want to buy your company
The first step in buying a company is to define the type of company you are looking for. In which sector do you want to do business? You will need to research the medium and long-term prospects of the sector, look at the competition and pay attention to changes in regulations and laws. If you want to really get to know the possibilities of the company you want to buy and what the service they offer is like, apply as a customer to experience it first-hand.
2.Contacting the company for purchase
After thorough research the next step is to target the ideal company. You need to consider a budget, the size of company desired, the location and annual turnover and, of course, whether you are going to be successful. You should not offer a deal that you cannot deliver.
If you are unclear about how to go about this whole process, it is best to hire professionals for the negotiation.
3.Opening negotiations when buying a company
When the time comes to negotiatethe purchase of the company, a detailed picture of the company and the sector in which it operates is already available. Negotiations with the owners can then begin in order to reach the best deal for both parties. The first point of negotiation is the price, based on a valuation. Then a plan must be formulated to bring the transaction to a successful conclusion.
4.Valuation of the company
The valuation stageof the purchase of a company is the most important to ensure success. Assets often make up the largest part of any valuation. These can be the value of property and real estate or also machinery and equipment, depending on the company. The importance of turnover, profitability or current contracts should not be overlooked either.
5.The sale and purchase agreement of the company
The finalisation of the sale and purchase agreement (SPA) marks the final stage of the company purchase process. In the meantime, the heads of agreement set out in broad, non-legally binding terms an overview of the purchase. A purchase and sale agreement will grant both parties their legal obligations.
6.The payment
There are several options regarding the payment of the purchase of a company, depending on the size and scale of the purchase.
Payment for a large-scale purchase, such as a multinational purchase, can be more complex in operation, with multiple sources. For a smaller scale purchase, the most common method is a direct payment.
Payment may come from private means, investors, banks or lending companies, among others. Sometimes the current owners may give up full control of their business at the sale, but only take a percentage of the full value upon completion, in exchange for an ongoing share of the company’s profits.
After these steps, with the final documents completed, the contracts signed and the payment agreement in place, you will have completed the purchase of your new company.
This process is prior to embarking on your entrepreneurial dream. It can be a slow, strenuous and labour intensive process. It can often wear the buyer down and sap his or her enthusiasm and initiative. But you don’t need to waste your energy on this process. There are companies like ONEtoONE, which can guide and accompany you, so that you can dedicate all your passion and enthusiasm to your business project, ensuring that you have acquired the right company to make it a reality.
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