Buying a company.

There is often a great fear of buying a company. Complex and lengthy processes, a lot of money is at stake and, in retrospect, the takeover is not always a success. Guidance by an expert party such as Your own Venture is necessary when taking over a company. Not only to find the right acquisition candidate, but also to be able to make a successful bid, conduct the negotiations and set up the right financing structure. The period after the takeover requires at least as much attention. To what extent do you want to integrate the acquired company with other activities? And how do you ensure that the integration runs smoothly?

Orient yourself in good time by participating in our inspiration session 'sell your company'; in one half day you will gain insight into the ins and outs of the purchase and sale of a company! Or call us for more information and your personal guidance from a dedicated duo of our experienced M&A advisors.

Why buying a company?

Despite the risks, many companies are acquired every year and it is expected that this will only increase in the coming years. The main reasons are:

  • Business succession where the ownership of your business is transferred to the next generation;
  • Expansion of market share whereby your company by taking over another business, obtains new customers and/or new products/technology;
  • Excess financial resources that you want to invest directly in promising companies with a view to future returns;
  • You don't have your own company yet, but you want to make a flying start by buying yourself into an existing company; a Management Buy In (MBI);
  • You are now employed by a company and have the opportunity to take over (part of) the company you're working for from the current owners; a Management Buy Out (MBO).

Buying a company? There is more possible than you think!

In particular by choosing the right financing structure, it often turns out that much more is possible than you had previously thought when buying a company. Unfamiliarity with this matter means that many opportunities are not seen. In addition, because the market is very opaque, it is often underestimated how many companies or parts of a company are for sale. Of course, starting and expanding a new business from the drawing board is super interesting and valuable. But taking over a company can be a wonderful alternative and a great addition to the organic growth of the company!

Some of our transactions.

  • Management buy-in

    An experienced manager with his own capital has the ambition to start his own company. By buying into an existing company and leading that company, she can get off to a flying start. Your own Venture helps to clarify the wishes and guides the buy-in process.

  • Buy and build

    In the strategic plan it is decided to accelerate the growth of the company through acquisitions. The ambitions and specific wishes of this buy and build strategy are determined together with the entrepreneur. Your own Venture guides the search and purchase process from A to Z and helps with the integration.

  • A merger of equals

    The entrepreneur knows her market through and through. The market growth has slowed somewhat and in consultation with Your own Venture it is decided to enter into discussions with fellow companies that are nicely complementary. Soon the benefits are recognized by one of the main competitors. Then follows a lengthy process to prepare this 'merger of equals' and ultimately to make it a success.

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Buying a company

Buying a company in 6 steps.

Buying a company, just like selling a company, is a complex, risky and often unpredictable process. With many stakeholders, time pressure, competition, emotions, large amounts of documents and a lot of negotiations. Your own Venture manages the process, produces key documents, supports the negotiations and advises on the strategy and tactics to be followed. We go through the following steps:

1. Describe Desired Target Company -> Purchase Profile

In this first step, the fundamental questions are addressed: why do you want to take over a company and what kind of company? Your personal ambitions (with an MBI or MBO) or the strategic plans of your company are crucial in this regard. The ultimate goal of this phase is to describe as clearly as possible in a purchase profile what type of company you want to take over. The more clearly this is recorded now, the more focused the search can start later.

2. Determine acquisition strategy -> Acquisition plan

Now that it is clear what you want to look for, the question is how you want to proceed. Do you want to actively and specifically approach specific companies? Are you immediately after all the shares of a company or is a lower interest also possible? How do you plan to finance a potential acquisition? Who should be involved in any takeover processes?Which external parties will help you with this? What does your company have to offer a takeover candidate? Which competitors are more active in the acquisition market? How much time do you give yourself for this search and acquisition process?

These and many more questions are discussed intensively. The choices are ultimately recorded in a takeover plan.

3. Find acquisition targets -> Longlist and shortlist

After an agreement on the purchase profile and the acquisition plan, Your own Venture will start drawing up a long list of potential acquisition candidates based on the agreed acquisition strategy. This will often be a combination of parties mentioned by the entrepreneur himself, parties that emerge from our research of the relevant market segment and parties that have indicated that they are open to a possible takeover. The shortlist consists of those parties that appear to be actually open to a discussion aimed at a possible takeover. We will continuously update the longlist and shortlist during the purchase process.

4. Negotiations and Bids -> Intent Agreement

If it is clear that a company is indeed open to a possible takeover, the next phase will start. What does the sales process of the acquisition candidate look like? Are they guided in this by a professional advisor? What does the acquisition candidate think is important in a buying party? What are the other requirements and wishes of the takeover candidate? Who play on the side of the acquisition candidate what role in the sales process? What is the acquisition candidate worth? Etc, etc.

Sometimes this is a very formal process with a number of competing bidders, sometimes a private one-on-one contact has been established. The ultimate goal of this phase is to arrive at a signed letter of intent with the acquisition candidate, including a binding offer (subject to due diligence, possible financing).

5. Due diligence and financing -> Final agreement

From this moment on, as a potential buyer of the company, we take control. We inform the takeover candidate which information we want to have available in the data room. Based on this data, we will start the due diligence, in which we will look at business risks, contracts, personnel and accounting, among other things. Negotiations often follow about the findings from the due diligence and the impact on the previously agreed price. We also now determine which guarantees and indemnities we require from the selling party. In parallel, we have contact with co-investors and banks to finalize the financing of this acquisition.

6. Drafting contracts -> Signing at notary

Parallel to the due diligence, a start is made on drawing up the final contracts: the deed of sale and, depending on the type of transaction, also matters such as new articles of association, a shareholders' agreement, the management agreement, a credit agreement, etc. Only if there is a complete agreement on the entirety of agreements, it may be with the notary.

Integration of the acquired company.

In the media you can read the wildest stories about the low success rates of an acquisition. Usually it is about what can go wrong after the takeover of a company. In no time, the added value for which you paid a lot of money disappears like snow in the sun. For example due to the departure of a number of key employees. Therefore, think carefully about future integration and communication already during the acquisition process.

The first question is what degree of integration is necessary at all. Perhaps it is best to let the company continue as autonomously as possible. Involve the employees in the integration process and above all ensure honest, clear and frequent communication about the plans and actions. Be visible and approachable as responsible management.

The key to succesfully buying a company.

Leadership, people and culture are essential in corporate takeovers. This because taking over a company is an emotional process that can have a major impact on people, their positions and interests. This also creates uncertainty and a lack of clarity about the changes. Not only at the company that is being taken over, but also at your own company. Effective communication and personal attention are key. Your own Venture helps you with the company takeover by drawing up the integration and communication plan and coaching individuals through this difficult period.

Orient now on buying a company.

Schedule a no-obligation meeting with us and tell us what growth plans you have for your company or what opportunities you see for acquiring companies. We are happy to reflect on the possibilities we see to make your plans a reality. Arrange an appointment with us via the button below or call +31 85 060 6070

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