Tag Archives: success

New M&A transaction advised: Midsona acquires Davert, a leader in the German organic food market

Midsona AB (publ) (“Midsona”) has reached an agreement for the acquisition of German company Davert. The M&A transaction, which has been advised by ONEtoONE Corporate Finance and Seufert Rechtsänwalte on seller´s side and Strata Advisory AB, Heuking Kühn Lüer Wojtek and Fredersen Advokatbyrå AB by on buyer´s side, involves the acquisition of the German leading company in the organic food market with a turnover that exceeds 60 million euros per year. The total purchase price is approximately EUR 48.5 million (~SEK 511 million), on a debt-free/cash-free basis, and will be paid in cash¹.

About Midsona

Midsona holds a strong position in the Nordic market with own strong brands within health foods, personal care and hygiene. Midsona also sells a number of licensed internationally established brands. Our products are sold through grocery and convenience stores, pharmacies, health stores and internet. Midsona’s priority trademarks are: DALBLADS, FRIGGS, HELIOS, KUNG MARKATTA, MIWANA, NATURDIET, ESKIMO-3 and URTEKRAM. Midsona has annual sales of about MSEK 2,173 (2017). The Midsona share (MSON) is listed on NASDAQ OMX Stockholm, Mid Cap.

About Davert

Founded in 1984 by Rainer Welke, Davert is a pioneer in the organic food industry in Germany. The Company is a leading manufacturer and distributor of organic dry packaged food, offering products under its own Davert brand as well as private label products. Davert’s portfolio includes a broad range of organic products in categories such as convenience products, snacks, superfoods & nuts, breakfast cereals, rice and pulses. Davert’s products are sold through various channels including grocery stores, drugstores, health food stores as well as to the food services industry.

In recent years, Davert has launched a new brand design, broadened its product portfolio and extended its distribution. In this period the Company also moved into a new, purpose-built production facility and significant investments were made in state-of-the-art manufacturing lines and an automated warehouse. Davert has approximately 150 employees, all of which are located at its facility in Ascheberg, North Rhine-Westphalia, Germany. Sales in 2017 were EUR 64 million (~SEK 616 million).

Financial Effects of Acquisition on Midsona

For the financial year 2017, Davert achieved sales of EUR 64 million (~SEK 616 million) and adjusted EBITDA of approximately EUR 4.4 million (~SEK 42 million). For the current financial year, Midsona expects Davert’s sales to increase compared to the previous year and to achieve adjusted EBITDA of approximately EUR 5.0 million (~SEK 53 million). Not taking into account any transaction-related costs, financial or synergy effects, the purchase price would represent a current year EV multiple of approximately 9.7x EBITDA.

Synergies are anticipated to be realized in areas including production, cross-selling and procurement. By 2022, these synergies are expected to have an annual impact on EBITDA of approximately EUR 3.8 million (~SEK 40 million). Initial synergies are expected to be realized during 2019. Midsona has financed the M&A transaction with a new debt facility.

^{(1) The purchase price excludes: (i) a capital investment in a new production line of EUR 8.5 million and (ii) potential payments between April 2020 and 2022 of up to EUR 6 million in aggregate contingent on Davert exceeding specified financial targets. The capital investment will provide Davert with new production capabilities targeted at attractive, fast growing segments. The investment program is expected to be completed in late 2018.}

^{Note: Purchase price and 2018 figures converted to SEK at exchange rate of 10.54. 2017 figures converted at 2017 average rate of 9.63.}

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Many business owners decide to go from sucess to significance

Feeling a sense of social responsibility is a common reason to sell your business when you still have energy to do other things that might be significant.

This could mean dedicating the rest of your time to an NGO, buying another socially responsible company, getting involved in public service, or simply dedicating more time to your family (through for example spending more time with grandkids).

Just because you founded or inherited a company doesn’t mean you need have to dedicate your entire life to it.

After many years doing the same thing, business owners can become fed up. Many have already made enough money to live comfortably for the rest of their lives and now they would like to focus on other things.

Two business owners came to see us and explained that after twenty years of doing the same thing, they wanted to sell their business and dedicate their energy to other exciting projects. One of them wanted to give back to society and spend his time in an NGO that he had started. The other one wanted to sell in order to devote more time to his true passion, his family. The sale also allowed him to have time for other things, like playing golf with his friends. The process of searching for buyers began, and some of the buyers demanded that the owners stay in the company for some time. We knew that this was not an option, as our clients already had other plans for their futures, we continued searching for buyers, and finally, we were able to find a buyer with a skilled management team capable of replacing those eight months after the acquisition.

This is very common. There are numerous owners that come to see us and explain how they want a change in their lives. They don’t want to become slaves to their own company.

@EnriqueQuemada

Book: How to Maximize the price of my company

www.onetoonecf.com

Mergers & Acquisitions, Compraventa de empresas

Does Your Business have a Strategy?

Every time I speak with a client or mentee for the first time, they start by explaining their strategy. More often than not I have to stop them and explain that what they are describing is not a strategy, but an elaborate fantasy they have created about what they want to do or dream to become, unfortunately that’s not a strategy. Once they get over the surprise, we work on understanding what they really do and the difference between this and what they want to do. When this is clear they can begin to understand the misalignments between the two, and start working on correcting them. As simple as that they have a real strategy.

If you are an entrepreneur or business owner with a clear objective and vision start by analyzing each and every area, team member, and the structure of your business: figure out which of them are not aligned with your main objective and vision, then start working to fix this. Our job as leaders, whether you are the CEO or head of a team, is to identify and correct strategic misalignments. We have to look for them in every functional area of the business, culture, structure, corporate values, compensation structures, business model, priorities, and operations to mention a few. Analyze each and every component of your business because they are all important, and are cornerstones of your strategy. A slight misalignment of one component can convert into a full shift of your strategy.

Once you understand your objective and vision focus your mind on what you are not going to do, this is as fundamental to your business strategy as what you do. It is crucial that while you work on your strategy you don’t forget to think of what you are not going to do. If you think this way from the beginning you will have a strong growth path, while keeping centered on your vision and strategy. Knowing what we don’t want to do will give us the discipline to say no to an “opportunity” that doesn’t align with our vision, before we end up drifting away from our vision in an ocean of opportunities like a loose buoy in open sea.

Companies have a gravitational tendency to mediocrity; those that succeed are the ones who manage to set themselves apart from the pack by focusing their strategy on a radical service differentiator, aligning their entire organization towards it. Everything that they do is focused on this objective: the people that they hire, the systems they create, the way they organize, their compensation structure, they are all aligned with this differentiator. This makes it easy to develop a strategy and stay focused on what will make us most successful.

Developing a strategy sounds really complicated, but the truth is if you want to develop a successful one, you have to make it as simple as possible. Focus on a concept that you dominate and are the best at in the market, make sure you differentiate yourself from the rest, and if possible that no one else does, but at least make sure no one does it exactly the same, or as good as you do. *1* The best things are usually the simplest ones, as da Vinci said, “Simplicity is the ultimate Sophistication,” your strategic statement should be reduced to one simple sentence that states the genetic code and competitive advantage that makes you unique. *2* If done right, this strategy statement will be clear, concise, and memorable.

Once the strategy and strategy statement is in place is time to communicate your strategy and execute. Make sure that everything you do as a leader is aligned with your strategy, because if you act erratically and make decisions that are not aligned with your strategy you will send mixed signals to your team, which will negatively affect your image, your strategy, and ultimately your business. Make sure that everything you do is coherent with your strategy, and that you are crystal clear when you communicate it. Just like in our personal lives, our true challenge is to reduce the gap between what we say we are going to do and what we actually do, because this translates to the difference between what we want to become and what we are at any given moment of our lives. Remember we are not what we do once but what we constantly do, and usually how we do one thing is how we do everything.

Written by Iliya Zogovic, President & CEO ONEtoONE USA.