JP Director's Report

In this JP Director's Report:

EditorialStructured Process of a Company Sale [Part 1/2 Part 2/2]

Current Projects: Company SaleCompany PurchaseImprint

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Company Sale


Dear Readers,

Hans Gitter nearly every entrepreneur who has invested money in their own company repeatedly asks themselves one of the following questions:
• How does the expansion of large competitors - national or international - affect the value of my company?
• How long can I withstand the consolidation process?
• Do I have the financial means to finance further growth and do I have someone to succeed me if I want to - or have to - retire?


I sold my own company myself, perhaps one or two years too early! I could have adapted to the extremely fast growth of e-commerce, of ever more comprehensive and better internet shops (even on the wholesale side), but only by investing heavily and recruiting specialised staff. However, young, creative e-commerce professionals gravitate to larger companies as opposed to SMEs.

Private equity firms are looking to invest in companies that are successful. Particularly in the case of SMEs, they are often keen for the business owner to remain a stakeholder and managing director. PE firms manage the money of their investors. And the volume of money raised for acquisitions and participations is growing: between 2012 and 2018 alone by over 200%.

JP Mergers & Finance focuses on companies of your size. We are probably already in contact with the right partners for your business. We also know that absolute confidentiality is a top priority for you and for us. It is all too easy for key employees, customers and suppliers to become unsettled. We at JP Mergers & Finance guarantee you the highest level of confidentiality and discretion.

Sincerely yours,

Hans Gitter
Hans Gitter


Selected M&A-Opportunities (I)

Company Sale
Convenience | German speaking regions

Western European supplier of convenience for bulk consumers, such as for example, hors d'oeuvre, mussels, quiches, pies, spring rolls, gratins, is looking for a strategic partner in Europe, all forms of cooperation (joint venture, equity investment, etc.) are arguable and the company has a turnover of more than € 500 million and is the market leader in his home country.

Project 171331


Hotel | Germany

A 4-star hotel in a holiday region of southern Germany with 80 rooms / 180 beds, 5 meeting rooms, several offers in the area of gastronomy, leisure and wellness is for sale. The hotel is run successfully by a professional long-term tenant.

Project 179328


Villa with Hotel | France

The owner of a property in south-west France based on a 17th-century mansion and 55 hectares of land is looking for a partner to expand its activities. The property features a 3-star hotel with 46 rooms, restaurant, spa / hammam / pool, tennis court, and extensive equestrian facilities with over 40 stables.

Project 179407


Frozen bakery products | Greece

Strong Greek producer of frozen bakery products (sweet and savory cakes) with 300 employees and a turnover of € 30 million with an EBIT margin > 7% is looking for a suitable partner. High growth potential, especially with expansion of the export business.

Project 173077


Medical technology | Europe

Innovative medical technology company is looking for an investor / partner to expand activities like clinical studies and marketing of sophisticated minimal invasive cardiological devices. Investment sought > € 5 million.

Project 178941


Frozen fruits | Southern Europe

Producer of frozen fruits such as strawberry and raspberry in Southern Europe is looking for an potential buyer - € 7 million turnover, 60 employees and own arable land.

Project 173593B


Building technology | India

Strong Indian specialist for building technology (esp. HVAC & MEP) with more than 350 employees in 7 locations is looking for a suitable partner (joint venture / investment) to tap better into the enormous growth potential. With a sales volume of around € 80 million, the company has an EBIT margin of around 8%, with strong growth of around 30% CAGR.

Project 158993


Window producer | Poland

Established Polish manufacturer of high-quality windows and doors with a turnover of around € 5 million with a 13.6% EBITDA margin and extensive expansion possibilities (2nd production layer, expansion areas) is for sale as part of a follow-up solution.

Project 97393


Foodservice | Germany

Powerful foodservice provider seeks succession solution. Sales: over € 30 million; Result: positive; double-digit sales growth; strong logistics; located in the southern half of Germany.

Project 179119


Cosmetics | Southern Europe

Manufacturer of cosmetics and soaps (liquid + solid) with strong development department and an annual turnover of € 25 million (7% EBIT margin) with excellent growth is looking for a suitable buyer.

Project 173077S


Rice processor| Southern Europe

A modern rice processor with an annual production of almost 40,000 tonnes and a sales volume of € 15 million is looking for a suitable buyer as a (medium-term) successor solution.

Project 173077R


(Pharma-)Logistics | Southern Europe

Strong logistics specialist for temperature-controlled freight especially for the pharmaceutical industry is looking for a buyer for up to 100% of the shares. The company has a turnover of around € 30 million with an EBITDA margin of 10% and a fleet of just under 250 vehicles.

Project 178290


Snacks | Southern Europe

Leading southern European manufacturer of nachos with more than 50% market share in their country, as well as a halve of turnover from exports and with an annual turnover of around € 13 million with 10% EBIT margin is looking for an investor for up to 100% of the shares.

Project 173077N


Meat factory | Eastern Europe

Meat factory with a possible daily output of 15 t in Eastern Europe with 1200 m² production area, 670 m² administrative and social rooms, as well as 24 furnished apartments and plenty of expansion possibilities is available for sale due to health reasons (even before the start of production).

Project 17122


Book specialist | Europe

Leading European manufacturer (with offices in several countries) of bookbinding and book protection systems with a turnover of more than € 15 million and an EBITDA of € 3.5 million is for sale.

Project 17127


Import delicacies / Foodservice | Germany

Importer with main focus on high quality meat and fish and affiliated foodservice is looking for an investor. Strong, sustainable yield, more than € 100 million in turnover.

Project 176320





Structured Process of a Company Sale

As everywhere in our economy, the success of M & A sales process is based on supply and demand. A structured and systematic approach for a company sale is the most important part. This includes a thorough analysis, careful research and an attractive information memorandum. In the following, we outline the project schedule of a professional company sale.

The Project Course

For a company sale you should schedule enough time - normally 6 to 12 months. The following graphic illustrates the projects steps and gives you a rough indication of the respective time required:

Image: Illustration of the project course on a corporate sale

1. Company Analysis, Information Memorandum and disguised company profile

The company which is going to be sold will be subjected to a thorough analysis. The consultant must obtain a comprehensive overview of the company and its situation. During this process, the information memorandum and the blind profiles are developed. The analysis also includes a rough assessment of the transaction object.

Information Memorandum: This memorandum describes the transaction subject with an extent of about 50 to 200 pages. It provides a combination of hard facts and reference information for a detailed picture of the companies situation to interested investors. In addition to a company profile, products and services, as well as the financial data, further aspects of the business, such as market and competitive situation are presented. Of course, the main points and key factors are briefly summarized from the perspective of a potential investor.

This information memorandum contains sensitive data and is given to interested investors only after an assurance of strict confidentiality, usually by a confidentiality agreement.

Blind Profile / Teaser: A blind profile or teaser is a brief description of the companies properties in anonymous form. It is intended to describe the transaction object to prospective buyers so that a decision on a further in-depth study of the purchase can be made, but without allowing conclusions as to the identity of the object.

The blind profile is submitted to selected potential investors.

2. Verbalization of the M & A strategy

A company sale calls for a delicate targeted sale on the market. On the one hand the response of many interested parties increases the probability of success and the chance for a higher selling price. On the other hand, a sale requires a high degree of discretion, not to worry suppliers, customers and employees. In addition, the respective goals and motives of each shareholder, different ways transaction and transaction structures, as well as tax and legal issues want to be considered.

All these aspects of a sale must be considered and weighed in developing the M & A strategy. You decide how to proceed with the transaction.

3. Research of potential customers

Derived from the M & A strategy target groups (potential purchaser) are defined, to be specifically addressed. Criteria can be, for example, national and international competitors, companies at preliminary economic levels or certain financial investors. Systematically a list of potential buyers is built, called longlist.

4. Preselection and first definition of target investors

The longlist created in Step 3 will be discussed together with the seller. The generated shortlist includes those companies to be contacted in one or more stages.

5. Approach of selected potential investors

The potential investors are approached in writing and / or personally to deliver the blind profile, during this process, the potential investors are examined in terms of their interest to pursue the proposed corporate acquisition further. With selected investors strategic alternatives and ideas / synergies such an acquisition are discussed.

If interest is confirmed, the confidentiality agreement will be signed by the investor. After that, the company for sale is disclosed and the prepared information memorandum will be provided.

[Continued after M&A-Opportunities (II)...]

Selected M&A-Opportunities (II)

Company Purchase
Foodservice | German speaking countries

Strong international food corporation seeks participation and cooperation opportunities in the food service / bulk consumer delivery services with a sales volume of more than € 50 million, especially in Germany.

Project 179394


Industrial service | German speaking regions

Southern German industrial service group is looking for companies in the areas of industrial service for further expansion, turnover over € 10 million, good profitability, high level of growth.

Project 178736Z


Food ingredient | Global

Strong international food group is looking for fruit processing or natural flavour for the food industry companies. Should have a turnover of more than € 10 million and a positive EBITDA.

Project 172122


IT-service | Germany

Growing IT-Service Group is looking for acquisition companies in the field of digitization and transformation, (in particular sales & marketing) with at least € 6 million turnover and good profitability, preferably in Germany.

Project 179289


Refrigeration and air conditioning | German speaking regions

European group in the field of refrigeration and air conditioning technology is looking for expansion companies in the field of installation and maintenance with at least 20 employees in the preferably in German speaking regions.

Project 178722


Food production | German speaking regions

Successful group is looking for producers of food in the German-speaking countries to take over. Ideal succession solutions of companies with at least € 1.5 million EBIT and > 8% EBIT-margin are preferred.

Project 175844


Software & electronics | Europe

Technology investor is looking for innovative, medium-sized technology companies with a unique market position. Business sectors: software, materials, electronics, industrial technologies, mechanical engineering. Should have a turnover of more than € 10 million and a positive EBITDA.

Project 158701


Construction industry | Europe

Strong group of companies in the field of "Construction" seeks acquisition opportunities in construction-related areas, such as manufacturers of building components / articles, building materials and chemicals, as well as construction-related service providers and software developers. Magnitude between € 5 - 50 million in turnover, majority position, Europe with preference in German-speaking countries.

Project 59559


Meat Specialities | German speaking regions

German Meat and Sausage Group is looking for participations, target turnover: > € 10 million.

Project 65566


Private equity | Europe

Leading German private equity company is looking for investment targets in the field of IT, industry, chemistry, lifestyle and FMCG with more than € 25 million in turnover to acquire a majority stake.

Project 178736


Ready meal snacks | Germany

Well-known German industrial family plans to participate in innovative manufacturers of ready-meal products (refrigerated and frozen), such as snacks, sandwiches, finger food, wraps, salads, sushi, smoothies, coffee, etc.; target turnover: € 5 - 100 million.

Project 84421


Industrial Service | Europe

German industrial service group is looking for companies in the areas of maintenance and quality assurance services, digitization, automation and IoT solutions for further expansion.

Project 174830


Bakery products | Europe

Leading baked goods supplier expands, participation or acquisition opportunities in the chilled or frozen bakery products industry are sought with at least € 10 million sales.

Project 179231


Medium-sized companies | German speaking regions

German investment company is looking for marketable, medium-sized companies with a minimum turnover of € 10 million with good prospects for participation in the majority stake.

Project 178927


Minority interests | Europe

European investment company offers boost on equity capital for small and medium-sized companies and family businesses with a minimum turnover of € 10 million through minority direct investments, especially in Germany.

Project 179082


Manufacturing | Germany

MBI investor is looking for production or production-related services, B2B, preferably primary industry, mining, chemical, mechanical engineering, metalworking industry, region: Germany, turnover over € 20 million.

Project 179207


Automotive

A Strong Indian groups of companies seeks to acquire manufacturers in the field of plastic parts or cable harnesses / cable systems or switch systems.

Project 179202A


Safety technology | Germany

Western European safety technology provider would like to further expand its market position and is looking for acquisitions which should have a turnover exceeding € 5 million.

Project 178736Y



--> Company sale

Structured Process of a Company Sale (continuation)



6. Coordination of information meetings and Letter of Intent (LOI)

Following the disclosure, the investors must be professionally managed and led. After reading the information memorandum further information needs to be exchanged. Likewise, a first meeting between potential buyers and sellers and possibly a site visit must be coordinated. Ultimately, with those who are still interested in the purchase, an indicative bid, called Letter of Intent (LOI), needs to be negotiated and agreed - a special difficulty is that all LOI should be submitted in a narrow time window.

7. Review and evaluation of offers

The indicative offers received will be evaluated together with the seller and the M & A advisor and a ranking of prospects is created. In addition to pure price indication, other factors such as job protection or payment arrangements (such as an earn-out clause) are considered.

8. Coordination Due Diligence

If desired, the information gathering and conduct of due diligence will be prepared jointly with the financial management of the company and the auditor. The examination process is coordinated with the potential buyer.

9. Conduction of the final negotiations

After the due diligence is carried out successfully by the buyer, negotiations on the details of the transaction contract, as well as any accompanying agreements such as competition rules, real estate purchase contracts, etc., will be executed.

During the due diligence and the final negotiations, the M & A consultant is in demand as a mediator between both parties. So that a successful business sale doesn't fail because small points can't be solved.

10. Signing / Closing

At the end of the whole process the transaction agreement will be completed. With the signature of the buyer and the seller, the business sale is complete - the work of the M & A consultant has been a success.

In Conclusion

A company sale is a long, nerve-wracking process, which should be started early and be well structured. A company selling out of necessity, for example because there is no succession, is also possible, however, associated with drawbacks in the sale price and a lower probability of success.

Professional guidance through the entire sales process pays off. The time requirement, many stumbling blocks and not at least the game against experienced buyers leads to a quick failure or a "success" selling well below market value.

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