The INBETS partners have collected a number of business cases from their respective countries, cases that demonstrate both successful and problematic business transfers. These cases have been categorized by the 6 innovative business transfer models for SMEs in the BSR, models that can be accessed here.
The 6 different Business Transfer Models are:
1) Business Transfer Model 1 – Family Transfer
2) Business Transfer Model 2 – One or more external entrepreneurs
3) Business Transfer Model 3 – Transfer to company executives
4) Business Transfer Model 4 – Takeover by a workers’ cooperative
5) Business Transfer Model 5 – Takeover by another company
6) Business Transfer Model 6 – Takeover in form of a mixed scheme
Below you will find all the business cases collected by the INBETS partners.
CasesSTORY: SPIRA IS TAKING OVER HAIR SALON BEATA
Sirpa is 33 years old and lives in an average-size town in Sweden. She had been employed as a hair stylist for many years. Ever since her school days, Sirpa has played with the idea of becoming the owner of her own hair salon. Now that her children are old enough to go to school, Sirpa and her spouse agreed that it was time to test out her dream.Suddenly an opportunity arose! Sirpa´s employer, Kalle, in the hair salon Beata, wanted to retire. Kalle wondered if Sirpa would want to take over the business. This opportunity created many thoughts for Sirpa; should I start my own new business, or take over an existing salon? What would the difference be?“I really want to start from scratch to design my salon with my style and logo. On the other hand, I could start faster if I take over the existing business. If I start a new salon, I would need to find a location, buy everything, design it and plan it. I do not know if I can do this all by myself. Also, I already know that the existing business has an experienced accountant who is familiar with the business. Would I need a permit?”After taking time to reflect, Sirpa felt that buying the Beata Salon would give her a head start. This head start was worth more to her than the opportunity to design her own salon. With this decided, Sirpa then had new questions; how much would it cost to buy the business? Can I take out a business loan? Her employer had another employee; how would he react if I become the boss? Will he want to change jobs? If he leaves, could he take many of the regular customers with him?Sirpa has a good relationship with her boss, Kalle, and he helped her resolve some of her questions. Since Kalle is retiring, there was no risk that he would take away customers or employees. The other employee was enjoying his job; so he would most-likely stay even if Sirpa would buy the salon.The price Kalle offers was approximately the same as what Sirpa would need to spend on inventory and decorating a salon. Sirpa received help from an accountant to check the salon’s accounts; they realized that Kalle’s price is a reasonable valuation. The offer Kalle made was for Sirpa to acquire the assets of the company. This means that Sirpa would start her own new business, which would acquire Kalle’s inventory, agreements, and employees, without buying shares in Kalle’s company. This offer made it easier for Sirpa to understand what she was buying; she could continue to run the business without being responsible for any commitments that Kalle’s business had made previously.Before meeting with a bank, Sirpa worked on her business plan for several evenings so that she would be well-prepared. Her plan included a long-term vision for how the salon would become what she wanted it to be. The meeting at the bank went well. She answered all of the bankers’ questions, and a loan was approved to allow her to buy the business.
LESSONS FROM SIRPA
Taking over an existing business is like buying an existing house versus building a new house. With a new house, you can choose a design, style, floorplan, and layout, but it will take time to build. Additionally, there are some uncertainties. For example, you don’t know how the area will be developed, whether the ground is ideal for construction, and how resistant the new construction will be to weather and wind for the coming decades. In contrast, an old house already has resolved any construction problems. You can also argue that it is more environmentally sustainable to buy an existing house instead of building a new house. The same is true with businesses. Instead of buying new inventory, you can take over an existing inventory like Sirpa did. If the company transfer allows the employees to continue in their jobs, like in Sirpa’s business transfer, it´s also socially sustainable.Sirpa had a close relationship with the person who sold the business, which is common in business transfers. She was able to ask Kalle to remain in the business for some time after she took over to learn more from him. If Kalle had not retired, Sirpa would have needed to stipulate in the purchase agreement that Kalle could not start a competing business for a certain number of years. The price that Kalle asked for was not very high, so the risk involved in taking over the business was low. However, it could take some time for Sirpa to make the salon become the way that she wants it to be, since she did not choose the employees, location, branding, customers, etc.During a business transfer it is also important to take into consideration whether the current owner has any valuable knowledge or important contacts that have not been shared. For example, the salon’s success might depend on Kalle’s reputation for dying hair or styling hair for weddings. Similarly, the salon might depend on, for example, an accountant who is a close friend of Kalle, and might disappear when Kalle leaves.
TIPS!
Buying a business can be a shortcut to starting a business
Bring outside help to appraise the value of a business
Talk with your family about what the business will mean for everyone
Take time to assess the current owner’s incentives: why does the owner want to sell the company, and what will the owner do after the sale?
Consider whether there are important intellectual assets in the business that only exist in the current owner’s knowledge or contacts
Prepare thoroughly before visiting a bank […]
STORY: BURIM IS LOOKING FOR A SUCCESSOR
Burim was working as a department head at a bank in Sweden, and dreamed of creating something on his own. He was constantly thinking of new business ideas, but he did not feel that he had found “the right idea” yet. He decided to not wait for the perfect idea, but act on one of the ideas that he had. This action would help him learn and also show him whether he likes running a business or not. Burim decided to open an “Escape Room” team-building park that includes technical challenges. He planned to run this business for a few years, then change to do something else.
Burim involved two friends in his business idea; Leon and Pär. Together they wrote a business plan and a partnership agreement, and it was fairly easy for them to receive a loan from a government program to build their concept. It was the beginning of a journey with a series of challenges, where each challenge is more difficult than the previous ones. The absolute hardest challenge was finding a plot of land that would work for their purpose. After much searching, they finally managed to convince a company called Svea Skog to accept their business idea and lease some land. Once the business got started, it was far more difficult than the friends could have imagined. They needed to learn to write computer code, solder electronics, build rooms, and cook for customers. After a year of many long days and late nights, it was finally ready (six months later than planned)!
When they launched the business, it became popular. They received many bookings from all of southern Sweden, and the first two years went extremely well. They continued to face challenges and work long hours, but they also had fun, earned money, and felt passionate. In the third year however, Leon decided to continue his military career in the foreign service. Additionally, Pär announced that they were expecting children. Burim and Pär decided to continue with the business, but the third year became difficult. Burim needed to do more of the work since Pär needed more family time.
Burim had always been interested in eventually selling the business, so when his motivation and energy started to run out, he brought up the topic of selling the company with both of his partners. Pär was completely willing to sell, but Leon was not. Their discussions eventually focused on the stipulation in the partnership agreement that clearly stated that if any single partner decides that he wants to sell, then all of the partners must sell. Reality was not as simple as the partnership agreement. Leon thought that it would be foolish to sell now when the business was going so well; he wanted to wait longer. They were still friends, so Burim did not want to involve legal courts in their dispute.
After a long discussion process, they agreed to sell. The first potential buyer offered a lower bid than what they themselves had invested. Pär wanted to take this bid. He just wanted to be done with the business. Burim and Leon did not want to lose money, so they rejected this bid. The next potential buyer was a friend. After learning more about what it takes to run the park, the friend realized that he lacks the skills. He would not be able handle the technology, servicing, and maintenance. This was the kind of knowledge that Burim, Pär, and Leon had developed over the three years.
At last, Burim talked with one of the park’s suppliers. He seemed interested, as he already owned a similar park and understood the systems that the park uses. They received a bid that was a little higher than the money that they had initially invested. This bid would not pay for all of their hard work during the last three years of growing their business. Despite this disappointment, they decided to sell. They sold the company as a limited company, thus selling all of the shares. This type of sale involves two problems: First, the three partners are still personally liable for the bank loan, which the current sale agreement would not resolve. Secondly, they are also liable for the lease agreement. Despite this, they decided that they trust the buyer and that this offer was their best option. A year after they sold the business, they managed to transfer the bank liability and lease agreement to the new owner.
LESSONS FROM BURIM
Burim and his partners had a challenging and evolving journey that they had not fully anticipated when they started. Their partnership agreement was legally binding, but once it was put to the test with friends, relationships and feelings affected them more than they expected. It is important to keep this in mind when writing a partnership agreement, especially when the partners are friends. Sometimes there are also things that cannot be negotiated away in business agreements. In these cases, both sellers and buyers need to trust each other, and trust their instincts.
Furthermore, Burim, Pär, and Leon realized that a specific skillset is needed to run their company, and it was not easy to find potential buyers who had that skillset. There is no doubt that it is easier to sell a company when few processes depend on the sellers’ unique knowledge. If Burim and his partners would have had more time and planned the business transfer earlier, they could have started to transfer their own knowledge by training personnel, writing processes, documenting decisions, adding machines, suppliers, etc., and thus simplified the process of finding a buyer.
Regarding the price, the three friends were initially disappointed because they felt that their time and effort in building the company deserved a higher price. It is common to think like a seller; however, the buyer will most likely not have the same point of view. The buyer often values the company based on other factors, especially on future potential instead of past effort. So, there is really only one right price; how much the buyer is willing to pay, and the seller is willing to accept.
TIPS!
Try to plan the business sale early
Transfer knowledge and processes within the company
Build trust with potential buyers
Remember that the seller and buyer have different perspectives, which both affect the sale price
Think carefully before deciding to create a business with close friends. The meaning of the partnership agreement can change over time […]
Transfer description
The Veda holding company was founded in 1994. In the middle of the 2000s Veda was one of the leaders in vodka market in Russia. It occupied the 2nd place in whole Russia market and the 1st in the North-West region. The company had its own liquor enterprise in the Leningrad region (in Kingisepp) and a plant for the low-alcohol cocktails manufacture in Saransk.
In 2005, Kirill Rogozin – the Veda founder died tragically: he was riding a snowmobile across the Gulf of Finland, and ice cracked under it. The younger partner – Aleksandr Matt had to manage Veda on his own in spite of the fact that he did not participate in company’s operating activity before.
Since 2008, all companies that were part of the holding have gradually gone bankrupt. At the same time, executive director of the alcohol department, who was a good expert in distribution area, left the company. According to Rosstat data, in 2007 Veda’s plant in Kingisepp produced only 32.8% volume from the same period last year, the plant in Saransk only 34.9%.
Sources: Business Petersburg – 2018https://www.dp.ru/a/2018/05/28/Desjat_bizneskrahov
Kommersant – 2008https://www.kommersant.ru/doc/868879
Facts
Previous
Current
Owner
Kirill Rogozin
Aleksandr Matt and Anastasiia Rogozina
Legal form of the company
Ltd
Ltd
Number of employees
?
?
Brand
Model of transfer
Involved institution
Country
Russian size Waltz BostonMatrix
6 Transfer by mixed methods (model1 Family transfer + model 3 Transfer to company executives)
Russia […]
Transfer description
The business started as a project where one of the goals was to make an exit. In the year 2012, the company needed capital to finance the company’s next stage of development. Regarding the options, they either wanted a venture capital firm or finding a buyer.
The successor was found in the company. It is a company specializing in buying other companies. Because of that the buying company has a department that is continuously scanning the market for potential companies to buy. Representatives of the two companies also met in different situations and thus the information about the prospective sale reached the buyer.
They used an earnout model where the successor paid the first 72% in 2013 and the remaining 28% in 2016. This was to animate the shareholders to continue to do a good job and help the company continue to grow even after the transfer. The previous owners and all remained in the company. In 2016 when the business transfer was closed only two of the previous owners stopped working in the company. All other persons remained.
The people in charge started thinking about the transfer and in the next step preparing the company for sale in early 2011. The discussion about identifying potential prospects (i.e. a buyer or a venture capital firm) started in Q3 2012. In May 2013, the last paperwork with the successor was completed and in 2016 100% was paid for the company and the deal was closed.
It was a challenge to identify a potential buyer. Initially, they were looking for a venture capital firm. Additionally, it was hard for a relatively small company to find suitable contacts and create enough interest from potential investors.
No, the planning of the new services to be provided was already under way before the transfer. Yet, the new ownership created a more comfortable and safe feeling to really make the efforts. The launching of the new services also went faster.
When you have a growth-oriented mind set you are focusing on buyers/professional investors that are bigger than your company. This situation makes the former owners an underdog when it comes to aspects such as financing and knowledge. The former owner, therefore, recommends persons who plan to sell their companies to include a specialist in the negotiations. Otherwise, it will be an uneven starting point.
The due diligence process was about 2-2,5 months and the seller explains that this process puts pressure on their organization since all information about the selling company it brought up. Everything needs to be transparent which could create a great pressure on the company.
Therefore, the seller recommends other companies that are about to sell to be well prepared for marketing their company, i.e. to make it look as attractive as possible for the potential buyer. This includes the provision of solid financial figures as well as strong intangible values (such as a strong brand, well trained personnel) to show potential new owners the value they will get by buying the company.
The seller also says that you should be prepared that the entire business transfer process takes time, especially if you have a growth plan that requires significant financial capital. This means that you will need to have available sufficient financial capital to make sure both 1) that the company can continue to grow and 2) that you can look for potential buyers who are willing to invest in the company’s continued growth. You don’t want end up in a situation where you are forced to sell the company at a low(er) price just because you run out of money before you find the right buyer.
Facts
PreviousCurrentOwnerAbout 50 different shareholders, i.e. mix of founder employees and business angelsAnonymousLegal form of the company LtdLtdNumber of employees 4598
BrandModel of transferInvolved institutionCountryAnonymous5 Transfer to another companyLawyer to write up contractSweden […]
Transfer description
While participating in an accelerating program for making companies grow, Martin and Lena realized that they were too old to make all the investments and efforts that would be needed to keep growing. Instead, they decided to sell their company since the company had already increased in turnover during the accelerating program.
At first, they wanted someone from inside to take over of the company (i.e. internal succession), but no one was interested. Their second thought was to sell the company to another company they had in mind, but the process dragged on and a deal was never closed. Then they met a representative of another larger company when delivering goods and by chance they started talking about their company and their plan to transfer it. This other company was immediately interested, and the succession/transfer process started.
The new owner could draw on many years of experience in running a company. To increase the likelihood that the company’s values and previous owners’ knowledge etc. could be transferred to the new owner, the previous owner is remaining in the company for at least 6 months. The process is ongoing as the interview is held. The previous employees are also remaining in the company.
The overall process from deciding to sell the company until the previous owner finally can leave the company will take approximately two and a half years.The paper work to make the transfer happen took two months.
The former owner was very well prepared and did not find it challenging. From the sellers’ side, perhaps, most challenging is the mental preparedness to sell your company to someone else.
No innovation, but a new way of working and making the daily work more efficient. The former owner recommended the successor to start using more digital tools to make the work easier for the employees and the new owner. This was software that helps manage and log activities in the company and it was implemented at ones.
Lessons learned:
Be honest, transparent and well prepared as a seller when you meet with the successor and his/her legal representative. This will shorten the process.
Prepare yourself mentally for the sale a long time before you take the fundamental step, at least two years. It will mean a big change and may turn out being emotionally tough. It is a big change to sell the company you have started and worked in for a long time. You must be 100% sure that you want to sell.
You should involve individuals or organizations specializing in business transfers to master relevant aspects such as legal and economic issues
Facts
PreviousCurrentOwnerMartin Ivarsson & Lena IvarssonHylte transport ABLegal form of the company LtdLtdNumber of employees 1032 (no new people were hired but because two companies were combined into one, the number of employees increased).
BrandModel of transferInvolved institutionCountryMartins Gräv5 Transfer to another companyThey worked with a consultant from ”LRF consult – business support organization” who the sellers met through the business accelerator program. They also involved the company’s accountant in the process. The previous owner claims that companies often contact a business broker who takes a percent of the sale profit. They did not, but instead they worked together with LRF and the accountant on an hourly basis. This reduced the costs of the business transfer process.Sweden […]
Transfer description
The founder of the company and the owner of the know-how was no longer interested in the development and management of the company. In search of a buyer was involved in a networking, search in the business community. The search lasted about 6 months. The business transfer process took about a month. The main difficulties in the process were caused by the search for a buyer and registration of the transfer of intellectual property and technology to the new owner. At the moment, the technology of transfer and preservation of know-how in the company is not sufficiently developed at the legislative level.
Facts
PreviousCurrentOwner1. Omelyanovich Dmitry Alexandrovich 2. Immanuel Kant Baltic Federal University1. LLC Service center Taurus 2. Immanuel Kant Baltic Federal UniversityLegal form of the company LtdLtdNumber of employees 13
BrandModel of transferInvolved institutionCountry5 – Transfer to another companyIn search of a buyer and for advice on the design of the transfer of know-how, the owner addressed to non-profit organizations to support entrepreneurship: «Union «Kaliningrad chamber of Commerce and industry», «Association of SMEs support centers of the Kaliningrad region». Assistance was provided free of charge.Russia […]
Transfer description
BAGFACTORY is a non-woven PET bag manufacturer, a market leader in Lithuania and one of the market leaders in the EU. However, the recentgrowth of this company was driven by the transfer of 50 percent of its’ share to the legal entity, so is a great example of good business transfer case.
Originally the company was owned by two individual persons and was oriented to exclusive small orders therefore was not very profitable, but satisfactory at the time. However, over the years the manufacturing equipment of the company has outdated and since the main activity of the company wasn’t very profitable, the owners could not afford the necessary equipment upgrade, which became one of the main reasons of undertaking the transfer’s decision. The owners of business started looking for investment opportunities and got acquainted with a legal entity, which became interested in PET bag manufacturing business on a larger and more innovative scale so has bought 50 percent of its’ share and invested a certain amount to the manufacturing equipment as well as started a regular work optimization process to reduce costs and production time. As a result, the company has the most modern, innovative, state of art equipment on the market, and has been renamed as BAGFACTORY.
The process of the initial business transfer to new shareholders, as well as new ideas and opportunities, has happened because of the shared business values of both sides, which are social orientation, positive thinking and a close-knit team. However, the new owners brought some new ones as well, such as initiative, innovation and ambition, which are vital for successful and profitable business, so were the main factors of the recent success of the company. The process of business transfer took around one year, including negotiations and re-registration of the company.
The main challenges/difficulties of this business transfer case were met meanwhile the transfer, because it was the time of negotiations, where both parties had to agree on (1) their future rights, responsibilities and accountabilities; (2) formation of a new company strategy; (3) the use of investment as well as return on investment (payback procedures); (4) maintaining the most important strategic human resources in the company in order not to lose the know-how. Once both parties agreed onthese strategic decisions, the business transfer was completed smoothly.
The business transfer facilitated implementation of innovations – BAGFACTORY is initiating new research and experimental development projects in order to reduce the use of plastic disposable bags, contribute significantly to the reduction of environmental pollution and achieve its mission – innovative ideas for the development of ECO-friendly shopping bags.
Facts
PreviousCurrentOwner100% individual persons50% individual persons50% legal entity Legal form of the company Joint Stock CompanyJoint Stock CompanyNumber of employees 69
BrandModel of transferInvolved institutionCountryhttp://www.bagfactory.eu/5 Transfer to another companyThe main institution, involved in the business transfer process, was a law firm, because business transfer process requires a lot of negotiations and accompanying documents. The services provided were sufficient. The cost of the law firm services is a subject of contract and depends on mutual consensus as well as the scope of work.Lithuania […]
Transfer description
The LenSpecSmu company was founded in 1987 by Viacheslav Zarenkov. LenSpecSmu operates in the field of development and construction. The company focuses on residential property for the middle class in St. Petersburg, where it is represented by the brand “Etalon LenSpetsSmu”, and also on construction in Moscow and Moscow region. In 2017 net profit of the company amounted to 7.9 billion , annual turnover was 70.6 billion .
During 30 years working in the real estate market, the “Etalon” Group has built more than 200 properties with total area of more than 6 million square meters. The founder Viacheslav Zarenkov is the author of about 200 patents for inventions and realized over 30 construction investment projects.
Dmitrii Zarenkov started to work in his father’s company in 1998 after getting experience at a leading position in another company. He became deputy director in LenSpecSmu, then he was appointed CEO and finally Dmitrii became the chairman of the Board of directors. For his successful work and achievements Dmitry received numerous awards and prizes. He became “Honorary Builder of the Russian Federation”, “The best Manager of St. Petersburg” and “The best Manager of the Year” on “Golden Manager” competition.
However, at the moment the company’s transfer under its top manager’s control is being discussed in construction industry. In the end of 2017 there was strong decline (by 1.5 times) in stock price of the company. In summer 2018 Viacheslav Zarenkov and members of his family started selling their shares in LenSpecSmu.
Sources: official site of the companyhttps://lenspecsmu.ru/about/news/etalon_group_usilivaet_komandu_menedzhmenta
Business Petersburg – 2016https://www.dp.ru/a/2016/09/22/GK_JEtalon_pokidaet_star
Parlament – 2018http://www.parlamentua.com/item/37619-vyacheslav-zarenkov-vyvodit-svoi-doli-izetalona-%20chtob-potom-obankrotit-gruppu
Facts
PreviousCurrentOwnerViacheslav ZarenkovDmitrii ZarenkovLegal form of the company LtdLtdNumber of employees More than 5.000More than 5.000
BrandModel of transferInvolved institutionCountryEtalon LenSpecSmu3 Transfer to company executivesRussia […]
Transfer description
The VimpelCom company was founded in 1992 but the brand Beeline appeared in summer 1993. Today VimpelCom has 58.8 million mobile communication subscribers. In 2018 net profit of the company amounted to 27 billion , annual turnover was 73.1 billion . The headquarters is located in Moscow.
Dmitrii Zimin is an academician of the International Academy of Communications and the author of more than 100 scientific works and inventions. Dmitry founded VimpelCom company when he was 63 years old, together with a young American entrepreneur – Augie Fabela II.
In 1996, VimpelCom became the first company in the history of new Russia, which placed its shares on the New York Stock Exchange. In May 2001, Dmitry Zimin has left the General Director position: “VimpelCom is my favorite child. But children grow and grow up… At one moment I felt that its prospects are greater than I can manage”.
Dmitry sold his shares to Alfa Group. He believes that it would be wrong to transfer such large company as VimpelCom to his children. They had never participated in its management processes. And he has not prepared any successors. Nevertheless, the Board of Directors awarded Dmitry the title – “Honorary President and Founder of VimpelCom.” Dmitry is currently holding this post and is involved in consulting activities for the company.
Sources: Invest Rating – 2017https://www.invest-rating.ru/famous-investors/?id=8807
Forbes – 2010https://www.forbes.ru/ekonomika-column/lyudi/53898-kak-statbogatym-%20i-schastlivym
Facts
PreviousCurrentOwnerDmitrii ZiminAlfa GroupLegal form of the company LtdLtdNumber of employees ???21.700
BrandModel of transferInvolved institutionCountryBeeline2 Transfer to one or more external (person/ subject)Russia […]
Transfer description
In this case the founder had children, but none of them nor other closepeople were willing to continue the business. Company was more or less for sale for years, but without success. The price required was not – according to professional business developer – in line with the opportunities of the business (At the time business became for sale the interest was mostly set on first mobile services and solutions). The sales announcement was given, among the other market places and business dealers, also to Mr. Kimmo Saaristo, Business Transfer Coordinator of Satakunnan Yrittäjät.
Mr Petri Hohtari, on his part, had filed his data in the site collecting the information of persons interested to acquire an existing business and / or company. Soon after that Pori Enter, the municipal business service of Pori district, contacted Mr. Hohtari and directed him to Mr. Saaristo, who had a number of considerable businesses to be presented. From a portfolio of potential companies three companies were selected for closer review. Mr. Hohtari found Panelian kone to be the most interesting of these and negotiations started. The negotiations took one month and leaded to agreement satisfying both participants.
Finally, it was found a successor who agreed to buy the company – if the founder would stay for certain period in company to guarantee the continuum and transfer the tacit knowledge. The company has grown measured in both number of employees and turnover, and the former entrepreneur is now retired.
As a lesson of this case Mr. Hohtari emphasizes the importance of professional and reliable expert with long experience in business transfers to be involved in the case.
Facts
Previous
Current
Owner
Matti Eskola (majority)
Petri Hohtari (majority)
Legal form of thecompany
Ltd
Ltd
Number of employees
9-11
35
Brand
Model of transfer
Involved institution
Country
Engineering
2 – Transfer to one or more external (person/subject)
Business Service Enter (Now part of Prizztech Ltd) contacted by acquirer.Business Transfer Services of Satakunnan Yrittäjät,contacted by bothparties. Services were free, and only potential extra costs were invoiced.The service was limited to get parties in contact witheach other. In thenegotiating and contractingphases an experienced expert could havebeen helpful.
Finland
Reported by Kari Lilja and Sirpa Sandelin […]
Transfer description
Original company was founded in 1980’s by one entrepreneur. In the end of 80’s the company was growing and another person was joined to the company as minor owner. The reason for this was – as was found out later – that to be able to arrange the funding – the company needed a person trusted by bank to guarantee the loans. In August 1991 Finland collapsed to the greatest depression ever and this company went into liquidation too within the wild period of 1991-1993. To be able to pay the debts caused by loans he had guaranteed, the former minor owner founded the new company, which bought the business and tools and equipment needed from bankrupt estate. The main bank of former company agreed to finance the new business, given that the former major owner was not in any part involved in new business.
The company grew up, both in turnover and personnel, and both the debt caused by bankruptcy and the new loans became paid off. As the years passed by, the entrepreneur got older and finally it was his turn to retire. Unfortunately, he had no relatives nor other close persons willing to continue. However, a few years before he had hired a capable man with good relationships to heavy industry, and after long negotiations, the business and the name were sold to new company founded by this employee. Funding of the deal was arranged with the help of the relationships named above, and via that way the company also got another branch, becoming one of the biggest operators in Finland in both of its branches.
Lesson to be learned from this case is that sometimes the succeeded business transfer requires hard decisions, even bankrupts, not to get out of debts, but to clean up the reputation.
Facts
Previous
Current
Owner
Majority and minority
After first 1, after 2nd 2
Legal form of the company
Ltd
Ltd
Number of employees
3
After first 4, after 2nd 6
Brand
Model of transfer
Involved institution
Country
Engineering
2 – Transfer to one or more external (First) 4 – Transfer to a cooperative to employees of the company (Second)
Bank who agreed to continue with new company, although the rate of interest was higher, new auditor and bookkeeper, In the second transfer in addition to bank, auditor and bookkeeper, the new co-operation partner had a big role.
Finland
Reported by Kari Lilja and Sirpa Sandelin […]
Transfer description
Redmond group was founded in 2006. Today Redmond is one of the most famous kitchen equipment brands in Russia. In 2016 Redmond occupied almost 20% of the market with 50 billion rubles volume. Company’s production capacity is located in Asian countries but logistics, trade and intellectual branches of the group are concentrated in St. Petersburg.
In April 2016 one of the Redmond group main co-founders – Maksim Ageenko passed away. After that, a long-lasting conflict began between Maksim’s wife Svetlana and five children from two marriages and his business partners. The main reason of the conflict was clarification of the fair value of the share left by Maxim Ageenko to his family. Maksim’s partners – Andrei and Diana offered 240 million rubles to Maksim’s wife and his children, taking option to buy their stocking on a priority basis, but they refused.
Svetlana Ageenko and Maksim’s filed seven lawsuits to the Arbitration Court against the Redmond group companies. They demanded providing them with financial and corporate documentation for the entire period of company’s activity, and also challenged two decisions of the general meetings.
The corporate conflict led to disappointing results: Diana Zheliaskova, who became the General director, is now in prison, the heirs could not receive as much money as they wanted, and the conflict has not been solved yet.
Sources: Business Petersburg – 2017https://www.dp.ru/a/2017/10/23/Multivarka_v_ogne
Komsomolskaya Pravda – 2018https://www.spb.kp.ru/daily/26779/3816171/
Facts
PreviousCurrentOwnerAndrei Siniavin Diana ZheliaskovaMaksim AgeenkoAndrei SiniavinDiana ZheliaskovaSvetlana, Evgenii, Artem, Maria and Aleksandr AgeenkoLegal form of the company LtdLtdNumber of employees ??????
BrandModel of transferInvolved institutionCountryRedmond1 Family transferNoneRussia […]
Transfer description
Holding Company “Sozvezdie Vodoleya” was founded in 1991. The company includes 17 enterprises which operate in different sectors of the economy and united not only by common leadership, but also by a mission, goals and strategy. The value of the company’s assets is estimated at 192 million , and the annual turnover reaches 132 million.
Vladimir Khilchenko – President of “Sozvezdie Vodoleya” company, considers that there is no the only formula for family business transferring that would be the perfect choice for everybody: “Everyone has their own situation and their children who may at least want or do not want be part of parental business. And children have different upbringings, different values in life”.
Vladimir personally trained his eldest son for running his company since childhood all the time involving him in the company’s business. Sometimes he had to act strictly and even harshly, but in the end German learned to manage: “In fact, he received MBA of my own design and now he is in charge of one of my main projects.”
Vladimir manages other projects independently and is going to participate in business for at least another ten years. But finally he wants to involve his son in more projects.
Source: Business Petersburg – 2018https://www.dp.ru/a/2018/02/01/Miljard_terzanij_kak_ros
Facts
PreviousCurrentOwnerVladimir KhilchenkoVladimir Khilchenko and German KhilchenkoLegal form of the company LtdLtdNumber of employees ??????
BrandModel of transferInvolved institutionCountrySozvezdie1 Family transferNoneRussia […]
Transfer description
Consulting group TIM was founded in 1992. It is an international company which offers its clients financial, managerial and IT consultations. Evgenii is a founder of the company and was the TIM’s CEO till 2001. Today he is the Chairman of Board of directors and project manager in monitoring of the investment projects and management consulting spheres. Evgenii has 32.5 % of company’s shares.
Victor joined TIM when he was a student at the law faculty, in 2007 he became head of the legal department, and in 2011 – of the entire consulting business group. Today he has 30 % company’s shares. Victor continuously expands his knowledge in the field. The sphere of his expert competence is supporting the access to and development of foreign companies on the Russian market, supporting the activities of enterprises with foreign investment, risk management and dispute resolution.
Sources: Official site of the company:http://teamgroupconsult.ru/
Facts
PreviousCurrentOwnerEvgenii MironovViktor MironovLegal form of the company LtdLtdNumber of employees Less than 50Less than 50
BrandModel of transferInvolved institutionCountryConsulting group TIM1 Family transferNoneRussia […]
Transfer description
Metrostroi is a Soviet and Russian construction company. The company is a monopolist in the sphere of St. Petersburg Metro construction. Metrostroi accomplishes nearly 95% of all the metro construction works and also implements installation of equipment and architectural decoration in Saint Petersburg. In 2016 net profit of the company amounted to 497.8 million , annual turnover was 24.4 billion . The headquarters is located in St. Petersburg.
Vadim Aleksandrov has worked in this company for 55 years and was the leader of Metrostroi for about 25 years. He owns 13.62 % of shares. Nikolay Alexandrov, his son, was deputy director of Metrostroi since 2006. Today his stake in the company is around 25 %. He helped his father to realize projects and run the business during more than 10 years. In 2017 Nikolay became the CEO of the company. He also has a title “Honorary Construction Worker”.
Sources: Business Petersburg – 2017https://www.dp.ru/a/2017/05/16/Fontanka_rasskazala_o_s
Fontanka.ru – 2017https://www.fontanka.ru/2017/06/20/102/
Facts
PreviousCurrentOwnerVadim AleksandrovNikolai AleksandrovLegal form of the company PlcPlcNumber of employees ???More than 3.500
BrandModel of transferInvolved institutionCountryMetrostroi1 Family transferNoneRussia […]
Transfer description
The Metallservis company is the largest independent metal trader in Russia with a head office in Moscow and subdivisions in 16 cities of Russia and in Minsk. The company was founded in 1993. Annually the company sells about 2 million tons of rolled metal products. The annual company’s revenue is 44.2 billion .
The whole dynasty of the Manchenko family works at the Metallservice plant. The total length of service of this family at the enterprise is more than 100 years. Before Petr Manchenko became the General director of this company, he had a position of Deputy Chairman of the State Planning Committee (Заместитель Председателя Госплана КССР).
Alexander Manchenko was appointed General Director upon decision of the Supervisory Board. Petr Manchenko was dismissed according to his request.
Sources: Forbes – 2013:https://www.forbes.ru/forbes/issue/2013-10/244997-ves-chastnyi-biznes-reiting-mesta-so-101-po-124
Official site of Russian Union of Metal Products Suppliers:http://www.rspm.ru/ru/about/news/?pg=649&subject=sites=bl
Official site of Metallservis company:https://mc.ru/eightydate/eightydate
Facts
PreviousCurrentOwnerAleksandr EvnevichAleksandr Evnevich And Maria EvnevichLegal form of the company LtdLtdNumber of employees 490580
BrandModel of transferInvolved institutionCountryMetallservis1 Family transferNoneRussia […]
Transfer description
Maksidom is the first Russian hypermarkets network of goods for home improvement, repair and construction. The company was founded in 1997. Maksidom developed actively in St. Petersburg: one hypermarket opened every two years, and since 2006 they have hypermarkets appeared annually. In 2015 annual turnover of the company was 17 billion . The headquarters is located in Saint Petersburg.
In her youth Maria was the Head of the monitoring group in father’s company: she made reports and gave recommendations to the commercial department on pricing. But she wanted to achieve success on her own. Maksidom’s employees did not argue with the daughter of business owner: “Probably, father wanted me to grow up in the company from the very bottom, but without criticism and feedback it’s impossible! And besides it’s incredibly boring”.
Maria left the company, worked in newspapers, on TV and even launched her own business. And when she understood that she could achieve something independently, and her father saw it, he offered her to join the Board of directors of Maksidom.
Today Maria does not know if her children will work on family company: “They may want to continue the business, but they also may decide to become doctors or artists.” I have no right to interfere with this choice “. She considers that it is necessary to think about how to structure a business, if the next generation does not have a desire to deal with it. Ideally, the business should develop itself, and the family will only supervise this process.
Sources: Business Petersburg – 2018https://www.dp.ru/a/2018/02/01/Miljard_terzanij_kak_ros
Facts
PreviousCurrentOwnerAleksandr EvnevichAleksandr Evnevich And Maria EvnevichLegal form of the company LtdLtdNumber of employees Less than 5.000Less than 5.000
BrandModel of transferInvolved institutionCountryMaksidom1 Family transferNoneRussia […]
Transfer description
Industrial and Metallurgical Holding was founded in 1993. The company is the leading provider of metallurgical coke in the CIS countries region and one of the world’s largest suppliers of commercial iron. In 2016 net profit of the company amounted to 9.2 billion , annual turnover was 64.5 billion . The headquarters is located in Moscow.
Boris Zubitskii was the founder of the Industrial and Metallurgical Holding. He started his career as a mechanical technician and got gradually promoted to become a general director at the Coke-chemical Plant in Kemerovo. Boris Zubitskii used to be an authoritarian leader and used strict methods against competitors. One day he said: “The main thing in our economy is to be able to wiggle and do something out of nothing.”
The eldest son of Boris is Evgenii. He began his career as a coke-oven heater at the Kemerovo Coke-chemical Plant in 1989. When Boris acquired shares of “Tulachermet” plant – one of the largest producers of commercial iron in 1999, Evgenii became the General director of this plant.
Boris Zubitsky died on February 7 in 2017, but during his lifetime he transferred 13.38% of shares of the Holding to his son Evgenii. Today Evgenii has 45.4% shares of the Industrial and Metallurgical Holding.
Source: Vedomosti – 2017https://www.vedomosti.ru/business/articles/2016/09/19/657462-zubitskii-koks
Facts
PreviousCurrentOwnerBoris ZubitskiiEvgenii ZubitskiiLegal form of the company PLCPLCNumber of employees ???????
BrandModel of transferInvolved institutionCountryKoks1 Family transferNoneRussia […]
Transfer description
The Lanit Group was founded in 1989 and is one of the largest ITcompanies in Russia. According to the company’s data, Lanit’s revenue increased by 19.7% or 137 billion in 2017. The volume of sales increased by 12% or 54.6 billion (VAT included).
Georgy Gens – the Lanit founder participated in the development and implementation of national Russia computerization programs. He passed away in April 2018. Nevertheless, Georgii prepared a successor for the company’s President position. The group planned to announce this decision 3-4 months later.
Filipp – Georgii’s son became the new President. He had been working on the Executive vice president position since 2008 and is responsible for supporting mergers and acquisitions, strategic business development of the group, investment policy of the company and acceleration of startups. Since 2011, he was additionally in charge of several holding structures: the computer equipment distribution and managing 344 stores.
Now Filipp plans to combine these responsibilities with the Lanit’s President post: “The process was started, I’m deep into this and catch up absolutely everything that happened. Of course, employees are worried, because the scale of personality is unique. But in general we continue to work in a normal mode. We honour all obligations, we have a good financial viability, and last year we also had good results”.
Source: Kommersant – 2018https://www.kommersant.ru/doc/3623081
Facts
PreviousCurrentOwnerGeorgii GensFilipp GensLegal form of the company PLCPLCNumber of employees 9.0269.026
BrandModel of transferInvolved institutionCountryre:Store, Samsung, Lego and Nike1 Family transferNoneRussia […]
Transfer description
Kiss company was founded in 1998 by Irina Seliuta and her friend – Lilia Kiselenko. Irina and Lilia studied together in university and then worked on “Nevskaya Manufactura” – famous state company in Saint Petersburg. The week before the crisis of 1998 the friends started their own business. Today “Kisselenko” brand is known not only in Russia, but also in Europe, Japan and Arabic countries.
Irina’s daughter – Maria follows in her mother’s footsteps. She studied International Design Business Management in Finland and currently works in Kiss company as Executive Director. Maria helps to organize fashion shows, mother and daughter represent “Kisselenko” brand together at trade shows: they participated 3 times in Who’s Next international trade show in Paris. Irina hopes that someday Maria will help to improve current situation in Russian fashion industry.
Sources: Little one –https://littleone.com/publication/4033-irina-selyuta-k-mode-nuzhno-otnositsya-serezno
Business Petersburg -2017https://www.dp.ru/a/2017/03/20/Dizajnerskij_podhod
Facts
PreviousCurrentOwnerIrina SeliutaMaria SeliutaLegal form of the company LtdLtdNumber of employees 88
BrandModel of transferInvolved institutionCountryKisselenko1 Family transferNoneRussia […]
Transfer description
Ginza Project is an international group of companies founded in 2003. Ginza Project owns and manages more than 150 projects in Moscow, St. Petersburg, Baku, New York and London.
Before Ginza Project foundation Vadim Lapin was engaged in selling products from Europe. In 1995 he introduced European clothing brands to St. Petersburg market. In 2003 he decided to launch the restaurant business with his partners. The first project of the company was opened that year – the Japanese restaurant “Ginza”.
In 2013, Vadim bought shares in several restaurants from his partner at face value. Under the terms of the agreement between the founders, in the future he had to return the shares at the same price. But the reverse transaction did not take place. The former partner filed a lawsuit against Vadim.
Against the backdrop of a corporate dispute and claims for 144 million rubles, Vadim Lapin transferred shares in 38 companies with revenues of at least 1.1 billion rubles to his son – Mark Lapin. The transfer occurred 6th and 7th July this year. Nevertheless, Mark has been involved in fathers business for a long time and with his participation many restaurants were opened.
Source: Business Petersburg – 2018https://www.dp.ru/a/2018/08/14/Ginza__delo_semejnoe
Facts
PreviousCurrentOwnerVadim LapinMark LapinLegal form of the company PLCPLCNumber of employees ??????
BrandModel of transferInvolved institutionCountryGinza Project1 Family transferNoneRussia […]
Transfer description
PhosAgro is a vertically integrated company, one of the world’s leading producers of phosphorus-containing mineral fertilizers. PhosAgro is the leading in Europe and the only producer of fodder monocalcium phosphate in Russia. In 2016 net profit of the company amounted to 59.88 billion , annual turnover was 187.74 billion . The headquarters is located in Moscow.
Andrei Gurev senior has two children – Julia and Andrei. He regularly took his son on business meetings and negotiations and started his interest in this business.
The transfer process took almost 10 years. When Andrei junior turned 22 he has been recruited an ordinary position in economic department. Then he worked in financial and trade departments. In 2012 when Andrei was the Deputy Director in sales and logistics he signed contracts that increased production and sales to record values (sales growth 7,8%).
Andrei understands that starting his career on the junior position allowed him to become professional in all the aspects of his business. The Board of Directors appointed Andrei Gurev as General Director of the company in 2013 when he was 31. Now Andrei runs the company according to his own vision: “My father never participated in operational management and does not give any personal directives to me”.
Source: Forbes – 2016
http://www.forbes.ru/kompanii/resursy/320559-syn-za-ottsa-otvechaetkak-naslednik-vladeltsa-fosagro-upravlyaet-ego-kompan
Facts
PreviousCurrentOwnerAndrei Gurev (senior)Andrei Gurev (junior)Legal form of the company PLCPLCNumber of employees ???5.000
BrandModel of transferInvolved institutionCountryPhosagro1 Family transferNoneRussia […]
Transfer description
Eurosib company was established in 1992. The company operates in the following areas: transport and logistics, auto business, project management. The headquarters is located in St. Petersburg. In the end 2017, the volume of container transportation of Eurosib increased on 37% in comparison to previous year. Development of trade with China has become the main factor of container traffic growth.
Dmitrii Nikitin started working in his father’s company since its foundation. In 1999, his father – Nikolai Nikitin died after the assassination attempt. And since 2000 Dmitrii has successfully run the company. When he took the leading position at the company he replaced half of the staff: “During crisis times it is important that people share your values, and their interests coincide with company’s interests. There must be certain belief and vision of themselves within the company. Those who stayed made their choice, and those who had significant differences in our views, they left”.
Today, Dmitri’s son – Nikolai Nikitin junior works in Eurosib in the group on strategic planning as a junior analyst in marketing department. But Dmitrii doesn’t want to consider him as a successor: “Everything is developing so quickly in our country, that by the time they begin to understand what business is, the whole situation will change”.
Sources: Business Petersburg – 2005https://www.dp.ru/a/2005/09/26/Dmitrij_Nikitin_Biznes
The founder of Cherkizovo group – Igor Babaev ran the company for about 30 years. During this period, his sons Evgenii and Sergei received education in Russia, and then continued it in Switzerland and America. They had their own business abroad, but nevertheless Igor kept them informed about family business. Father often took them to meat processing plants around the world as language assistants, and children had the opportunity to see this business from the inside.
After a while, Sergei (the eldest son) decided to work with his father and started marketing. Then Evgenii (younger son) joined the business. During 10 years they have passed all levels of operational management, moving from meat processing to poultry farming, pig farming, plant growing, dairy business.
Igor saw that his children work with desire, passion and become more professional every year: “Finally, it was the moment when I realized that they are doing it better than me, and I transferred the company into their hands without hesitation”. At the moment, Igor Babaev is engaged in issues of development strategy and business ideology. He shared his shareholding in the company between family members and now keeps 16.6% of shares.
Source: RBC – 2014Https://www.rbc.ru/interview/business/28/10/2014/544e4d07cbb20f0359b476c6
Facts
PreviousCurrentOwnerNikolai NikitinDmitrii NikitinLegal form of the company LtdLtdNumber of employees ???More than 1.900
BrandModel of transferInvolved institutionCountryEurosib1 Family transferNoneRussia […]
Transfer description
Cherkizovo group was founded in 2005. The company has 8 poultry farms of full cycle, 14 modern pig complexes, 6 meat-processing plants and 6 combined feed mills. In 2016 net profit of the company amounted to 1.9 billion , annual turnover was 90.5 billion . The headquarters is located in Moscow.
The founder of Cherkizovo group – Igor Babaev ran the company for about 30 years. During this period, his sons Evgenii and Sergei received education in Russia, and then continued it in Switzerland and America. They had their own business abroad, but nevertheless Igor kept them informed about family business. Father often took them to meat processing plants around the world as language assistants, and children had the opportunity to see this business from the inside.
After a while, Sergei (the eldest son) decided to work with his father and started marketing. Then Evgenii (younger son) joined the business. During 10 years they have passed all levels of operational management, moving from meat processing to poultry farming, pig farming, plant growing, dairy business.
Igor saw that his children work with desire, passion and become more professional every year: “Finally, it was the moment when I realized that they are doing it better than me, and I transferred the company into their hands without hesitation”. At the moment, Igor Babaev is engaged in issues of development strategy and business ideology. He shared his shareholding in the company between family members and now keeps 16.6% of shares.
Source: RBC – 2014Https://www.rbc.ru/interview/business/28/10/2014/544e4d07cbb20f0359b476c6
Facts
PreviousCurrentOwnerIgor BabaevEvgenii Mikhailov and Sergei MikhailovLegal form of the company PLCPLCNumber of employees 20.00020.600
BrandModel of transferInvolved institutionCountryCherkizovo1 Family transferNoneRussia […]
Transfer description
Polcolorit SA is the oldest private ceramics manufacturer in Poland. The company was established in 1984 and since then growing all the time. Polcolorit SA has a rich, distinctive unique assortment of bathroom tiles, kitchen and floor tiles and beautifully crafted decorations. Ceramic tiles are positioned as belonging to high consumer segment and meet the expectations of clients from both sectors for the construction and individual consumers.
From the beginning, Barbara Urbaniak-Marcionii was the CEO of company. Polcolorit entered the stock exchange in year 2004 and from then the succession process began for the son (Vittorio Marconii). Vittorio held various managerial position in Polcolorit until he became the president of the company (01.01.2007), and Barbara became a member of the supervisory board. When business succession was accomplished, problems began. The new president was an advocate of rapid development financed by external capital, Ms. Barbara Urbaniak-Marcionii advocated a slow development, financed by own funds. Numerous disputes over the company’s development future and the failure of i new collection introdution, forced Vittorio Marconii to leave the company. Barbara Urbaniak-Marcionii became the new president of Polcolorit again.
The reason for the unsuccessful succession was the lack of an agreed development strategy between the owner and the successor.
Facts
PreviousCurrentOwnerBarbara Urbaniak-MarconiiVittorio MarconiiLegal form of the company Joint-stock CompanyJoint-stock CompanyNumber of employees 483430
BrandModel of transferInvolved institutionCountryProduction of ceramic tiles1 Family transferNonePoland […]
Transfer description
The company was founded by Jan and Krystyna Łapaj, and the main activity is related to running two four-star hotels. After many years of work, the owners decided to transfer their business to their children. A key to a successful succession was the creation of the document the Heritage Statute, which normalized the whole relationship between the family, the company and the ownership structure. It reflects the intentions of the founders of the Family Company Łapaj – Krystyna and Jan Łapaj – establishing their company, as well as outlining the company’s development vision.
The document consists of ten chapters and three family agreements, the chapters including:– ownership and management structure– education program for family members– management of family bodies
The document is complemented by three family agreements regarding: regulations regarding property rights, the way of recruitment and working conditions in a family business and the conflict resolution.
The new successors employed a non-executive director to the management board, whose role is to advise and support the family in making key decisions about the company. They believe that in a family business, some perspectives often escape, and the voice of non-family member may be particularly important when the family divides votes into important issues for the company.
Facts
Previous
Current
Owner
Krystyna, Jan Łapaj
Tomasz, Agnieszka, Paulina Łapaj
Legal form of thecompany
Ltd
Ltd
Number of employees
104
160
Brand
Model of transfer
Involved institution
Country
Tourism/ hotels
1 Family transfer
Legal Consultants/Advisor
Poland […]
Sabiedrība ar ierobežotu atbildību “N.BOMJA MAIZNĪCA
Transfer description
N.Bomja bakery “Lielezers” / www.lielezers.lv The experience of family business owner: involving family into inheritance, continuation and development of the company
Sabiedrība ar ierobežotu atbildību “N.BOMJA MAIZNĪCA
From the very beginning, company has been created, as a family company, because the children of the founders of the company, are involved in the development of the company and in preserving its values. For parents, this is especially important and important if children choose to engage in a family business, but they have never pressured them.
Children always saw the hard work, attitude and love for this company and bread, and that is what they want to keep. Children are new in this process. Therefore, it would be difficult to make recommendations from their perspective. The desire to get involved and to continue develop the company should come from the children naturally.
Children encounter the tension due to the sense of responsibility of parents and the parent company so that engagement for the company will only benefit and grow in the future. Parents are open to new ideas and allows children to experiment, encouraging them to not be afraid, and emphasize that it’s normal to make mistakes. Children comes up with new ideas, because of understanding the new generation and the tendencies of society. We believe that a strong family is also able to maintain a strong company, learning to highlight the boundaries between personal relationships and business relationships.
Facts
PreviousCurrentOwnerLāsma Bome, Normunds BomisAlise BluķeLegal form of the company LtdLtdNumber of employees 114114
BrandModel of transferInvolved institutionCountryFood1 Family transferLatvia […]
Transfer description
Transfer took place since the founder of the company, Mr. Mati Vetevool felt that it’s time to step give main responsibility to his son. This didn’t, by any chance, mean that he cut off completely from running a business, but Mr.Mati Vetevool took the role of CEO and Meelis Vetevool became Chairman of the board. It was easy to find a successor since the son had been actively working in the company alongside his father. Therefore, the transfer process was very dynamic. Next to the son, also the grandson is working in the company and this should guarantee the long-term sustainability for the company. When the entrepreneur and owner of the company, Juha Hallamaa, died suddenly and unexpected in December 2007, were his daughters 19 and 22 years old and still studying. Although the situation was a shock both to sisters and to their mother, the decision was made quickly and in the next morning both sisters were together at the works telling that they are going to continue the work of their father. Telilän Sähkö was founded in 1956 by Mr. Erkki Telilä who run the business more than 20 years. In 1977 the legal form of the company was changed and in 1978 it was transferred to Erkki’s son, Mr. Sakari Telilä. In 2008 took Sakari’s son Mr. Pekka Telilä responsibility of business as CEO of Telilän Sähkötyö Ltd. Mr. Pekka Telilä was the first entrepreneur in Generational Replacement Program of Satakunta University of Applied Sciences. His father Sakari Telilä had planned to retire. It was clear that Pekka would be the owner in near future. The company, Telilän Sähkötyö Ltd, had also future challenges for growing up as a national and international company.
Pekka had planned his studies with teachers of his core subjects and with the mentor from the faculty of Technology and Maritime Management bearing in their minds the future entrepreneurship. A cooperation contract with the Enterprise Accelerator was signed when Pekka still was studying. He spent the academic year in Ireland as an exchange student studying electrical engineering, business management and English. The Bachelor’s Thesis of Pekka was related to the generational replacement in Telilän Sähkötyö. He graduated and became an electrical engineer.
During his studies Pekka and his father had pondered the essential business activities with the mentor and a couple of experts from Enterprise Accelerator. It was considered that Pekka’s challenge was to expand the enterprise activities and to make international contacts.
Pekka and his father Sakari decided to make diffusion for the company. Pekka took on his responsibility the electric contracting under the name Telilän Sähkötyö Ltd and Sakari runs new company Kiinteistö Telilä Ltd which owns and develops the facilities. Telilän Sähkötyö Ltd has grown by acquiring other electric contractors and developing new competence areas like building automation, weak current and solar power.
Facts
Previous
Current
Owner
Sakari Telilä
Sakari Telilä: Telilän kiinteistöt OyPekka Telilä: Telilän Sähkötyö Oy
Legal form of thecompany
Ltd
Ltd
Number of employees
23
45
Brand
Model of transfer
Involved institution
Country
Electrical contractor
1 – Family transferLegal model: Diffusion
Generational Replacement Program of Satakunta University of AppliedSciences
Finland
Reported by Kari Lilja and Sirpa Sandelin […]
Transfer description
Transfer took place since the founder of the company, Mr. Mati Vetevool felt that it’s time to step give main responsibility to his son. This didn’t, by any chance, mean that he cut off completely from running a business, but Mr.Mati Vetevool took the role of CEO and Meelis Vetevool became Chairman of the board. It was easy to find a successor since the son had been actively working in the company alongside his father. Therefore, the transfer process was very dynamic. Next to the son, also the grandson is working in the company and this should guarantee the long-term sustainability for the company. When the entrepreneur and owner of the company, Juha Hallamaa, died suddenly and unexpected in December 2007, were his daughters 19 and 22 years old and still studying. Although the situation was a shock both to sisters and to their mother, the decision was made quickly and in the next morning both sisters were together at the works telling that they are going to continue the work of their father.
The labor understood the situation and the strong commitment between company and workers strengthened even more. The production manager took operative responsibility and sisters, realizing that they were unexperienced as entrepreneurs, started the search of new CEO with help of head hunting company that knew their father and company and had an idea of what kind of person was searched. After three months a new man was at the helm.
Both of sisters had vocational level education in business administration, and straight from the beginning of new situation they took care of administrative routines with the help of bank, bookkeeper and insurance companies, as well as customers and suppliers, all those were understanding and patient in the situation. Everything was new for sisters, although one of them had been working in the company few summers, thus they had to learn all. And much was learned from mistakes. New CEO proved to be a man at his place. His experience and knowledge were at great help, although he didn’t have experience of entrepreneurship.
At the moment both sisters are working in the company, one is CEO and the other Chairman of the Board, the former CEO who was hired after father’s death, is a Member of the Board and the business is going on. The company has also ridden out the storm caused by biggest customer who closed its works in Finland – turnover was cut off with 50 % but is now step by step reaching the former level.
Lesson learned from this case is that with open mind, strong will and reliable partners everything is possible.
Facts
Previous
Current
Owner
Juha Hallamaa
Widow and 2 daughters
Legal form of thecompany
Ltd
Ltd
Number of employees
11
14-15
Brand
Model of transfer
Involved institution
Country
Engineering
1 – Family transfer
Bank, Insurance companies, bookkeeper, workers, customers and suppliers headhunting company
Finland
Reported by Kari Lilja and Sirpa Sandelin […]
Transfer description
This company had in its history two stormy transfers. The first transfer in the 1930’s was close to fail: The founder of the company did not trust on his son and sold majority of shares outside the family. Piece by piece son succeeded to collect them back. The second transfer during the end of 1960’s and beginning of 1970’s was technically uncomplicated operation, but the problem was that it was difficult for father to transfer the responsibility to his son.
Third transfer was executed step by step in the beginning of 1980’s. First step was to double the share capital. New capital was subscribed by sons, Tom and Stefan, who now owned 50 % of the company. A few years later company bought its own shares from Tor Brandt, his wife and daughter. Finally, Tom and Stefan owned the company 50 / 50. The earlier transfers had been complicated, characterized by the confidence gap between fathers and sons, and this transfer had its figures too: Father, Tor Brandt, was seen in the office almost daily even in the end of 1980’s.
Corporate had two product lines, consumer products and industrial products. One brother was responsible for consumer business and the other for industrial business. Both brothers developed their parties, but it was not enough that products and customers were very different from each other. That were the brothers too. And furthermore, both brothers had children some of them were willing to continue the business.
Dividing of the corporate had been planned for long time, but diffusion would have cost a lot in the form of taxes to be paid. Finally, the Limitedliability Companies Act was changed, and tax-neutral diffusion became possible. At first, the value of each business was balanced by group support, then the group was divided into two groups, both owned by brothers in 50/50. The last phase was to change the shares and now both brothers owned their own business alone.
After that there has been another business transfer in industrial group, known as Brandt Group Ltd, the first without any problems in juridical or personal relationship level. Group is now managed by 4th and 5th generation together. In the former consumer division, Oy Otto Brandt Ab Ltd the transfer from 4th to 5th generation is still ongoing.
We have learned that the relationships between generations are not always uncomplicated, but the transfer will succeed if it is well planned.
Facts
Previous
Current
Owner
3rd transfer: Tor Brandt > Tomand Stefan Brandt
4th transfer: Stefan Brandt >Stefanie Brandt (Ongoing)Tom Brandt > Jesper Brandt andCharlotta Furuhjelm
Legal form of thecompany
Ltd
Ltd
Number of employees
400
400
Brand
Model of transfer
Involved institution
Country
Diversified
1 – Family transfer
Banks, Auditor, Legal Consultants
Finland
Reported by Kari Lilja and Sirpa Sandelin […]
Transfer description
Transfer took place since the founder of the company, Mr. Mati Vetevool felt that it’s time to step give main responsibility to his son. This didn’t, by any chance, mean that he cut off completely from running a business, but Mr.Mati Vetevool took the role of CEO and Meelis Vetevool became Chairman of the board. It was easy to find a successor since the son had been actively working in the company alongside his father. Therefore, the transfer process was very dynamic. Next to the son, also the grandson is working in the company and this should guarantee the long-term sustainability for the company.
Actually, since it was family transfer, not many challenges were encountered. All topics were handled with careful discussion and since Mr. Mati Vetevool remains active in the company- questions can always be asked and will be answered. Company was innovative throughout it’s history and new process and working methods have been implemented along the way. What is a great example of family transfer and exchange of know-how, is involvement of grandson. He is in charge of internet marketing and using all the new channels of marketing such as social media and other platforms. Mr. Mati Vetevool was awarded with life-long work achievement by E&Y in 2018. Here’s a story of export by successor- Meelis Vereool: Story
Facts
PreviousCurrentOwnerMati VetevoolMeelis VetevoolLegal form of the company LtdLtdNumber of employees 142142
BrandModel of transferInvolved institutionCountryEngineering1 Family transferNor third party institutionsEstonie […]
Transfer description
The business transfer was an easy way for Morten to get started. He is the youngest son at the former owner. Morten and his wife both have an education in agriculture. The whole family (incl. Mortens sibling) wants the company to continue in the family’s ownership. The reality has the perfect setting for the life that Morten and his wife want for their family. The process of business transfer took about 1½ to 2 years. The biggest challenge has been to find out which rules on business transfer are the most advantageous for both parties. Here they talk most about the tax rules, which are very cumbersome in Denmark. So both parties have always been considering which model of succession was asked in their case.
Involved institution
Two advisors have been used in connection with the business transfer. An finance advisor and a generational change consultant. In fact, the economy has not been the big challenge, as it has not been necessary to obtain external funding. The two advisors come from an association for agricultural advisory services. The price for advice has been approx. 30,000 Euro.
Facts
PreviousCurrentOwnerMartin Schmidt Morten Beierholm SchmidtLegal form of the company Owned by one personOwned by one personNumber of employees 11
BrandModel of transferInvolved institutionCountryAgriculture1 Family transferFinance advisorGenerational Change ConsultantDenmark […]
Transfer description
Sampo-Rosenlew Ltd was founded in the beginning of 1990’s by Mr. Timo Prihti to continue the Combine Harvester production which otherwise had been shut down by Metso Plc. Mr. Prihti found soon that one product is not enough and started engineering and manufacturing of forest harvester. Furthermore, contract manufacturing of components to other engineering companies as well as engineering and manufacturing of industrial parts washing machines became as third and fourth branches of the company within the 1990’s. Within the next decade the hydraulic motors and rotators were included to the portfolio of SampoRosenlew group by acquiring Metso Hydraulics Ltd which got a new name Sampo-Hydraulics.
Mr. Timo Prihti’s son Mr. Jali Prihti had worked in the company from late 1990’s and it was clear that Jali would follow his father as entrepreneur. The arrangements were started in 2003 when Metso-Hydraulics was acquired and Mr. Jali Prihti became minority owner of Sampo-Hydraulics. After that a new company, which took responsibility of subcontracting business, was founded. A few years later the diffusion was done, and Sampo-Rosenlew Group was divided into two parts: Sampo-Rosenlew Ltd, which takes care of the production, and SR-Kiinteistöt Ltd, which owns and rents the facilities. Mr. Jali Prihti got majority of shares but Mr.Timo Prihti retained the right to vote and the right to certain part of dividend. Mr. Jali Prihti’s part of dividend enabled the payment of legacy duties.
The change in the operative management was realized in 2009 when Mr. Timo Prihti became as the Chairman of the Board, and his son was nominated as the CEO of Sampo-Rosenlew Ltd. At the moment Mr. Jali Prihti is both the CEO and the Chairman of the Board and Mr. Timo Prihti is the Member of the Board.
Mr. Prihti has also another child, daughter, who is not interested in the business. The equality between two heirs was borne in mind during the arrangements. The lesson was that most important in transferring the business to the next generation is to plan it well, start it early enough and to realize the plan consistently. Timo Prihti retained the right to vote and the right to certain part of dividend. Mr. Jali Prihti’s part of dividend enabled the payment of legacy duties.
The change in the operative management was realized in 2009 when Mr. Timo Prihti became as the Chairman of the Board, and his son was nominated as the CEO of Sampo-Rosenlew Ltd. At the moment Mr. Jali Prihti is both the CEO and the Chairman of the Board and Mr. Timo Prihti is the Member of the Board.
Mr. Prihti has also another child, daughter, who is not interested in the business. The equality between two heirs was borne in mind during the arrangements.
The lesson was that most important in transferring the business to the next generation is to plan it well, start it early enough and to realize the plan consistently.
Facts
PreviousCurrentOwnerTimo Prihti (majority)Jali Prihti (majority)Legal form of the company LtdLtdNumber of employees 400400
BrandModel of transferInvolved institutionCountryEngineering1 – Family transferAuditorFinland
Reported by Kari Lilja and Sirpa Sandelin […]
