Who can help
A number of organizations provide advisory in the field of business transfers. The findings, however, suggest that with many of these organizations business transfers is not the main field of activity, but simply an additional service that is offered.
In the following some examples of organizations are listed which offer different forms of advisory:
LandshypotekBank is specialized in agriculture and forestry and disposes of good knowledge of the industry’s challenges surrounding profitable farming business and the real estate market upturns .
LRF Konsult is an accounting company with approximately 600 authorized accounting consultants, which is the largest number of accountants in a single accounting firm in Sweden. Additionally, it is the country’s largest provider of forestry and agricultural properties.
Svenska Riskkapitalföreningen (SVCA) (Swedish Private Equity & Venture Capital Association) is the association for private equity actors (Buyout and Venture Capital) and business angel networks. The association, which was founded in 1985, has the task of promoting a well-functioning private equity and venture capital market in Sweden. This happens, amongst others, through the dissemination of facts and knowledge about private equity’s role in the Swedish economy.
Excore (one of the leading M&A companies in Sweden) is specialized in middle-sized companies with a turnover between 50 million and 2 billion SEK. The firm’s emphasis is on company sales, acquisitions and mergers.
What services are on offer and through which channels? Reflecting on the services offered in Sweden, it is obvious that these services can mainly be assigned to the classical services, i.e. support in the areas of tax, legal and financial issues.
For instance, the private bank Carnegie offers expertise in the areas of tax and law. Excore provides online some tips for sellers and acquirers. These tips are oriented to the issue of price setting. In addition, the firm offers two comprehensive books entitled “livsverk till salu” (lifework for sale) and “tillväxt till salu” (growth for sale). These books can be ordered in print or directly downloaded.
PWC has a youtube film about business transfers. Besides, it offers expertise in the areas of tax, economical and legal advisory.
LandshypotekBank provides advisory and capital in the form of loans. Regarding the former, they collaborate with LRF Konsult.
Besides being a contact for financing, the Danske Bank in Sweden offers a guideline for farmers interested in selling their farm. Similar can be found with the Swedbank who offers potential buyers support in finding companies that are for sale, financing solutions and regarding tax and legal issues.
For potential sellers, Swedbank offers support in the areas of finance, law, and structure. On the website, the bank also provides a movie that briefly informs about buying and selling a company.
LRF Konsult offers company valuation, business planning, risk analysis, financing solutions, tax solutions that meet the needs of both sides and legal form solutions.
However, it does not exist any completely impartial counselor or coach who can support the process, which could be a prerequisite for more numbers of and more successful transfers.
- CasesAnonymousTransfer 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 made by Marzena Grzesiak and Anita Richert-Kaźmierska...
- CasesMartins Gräv ABTransfer description While participating in an accelerating program for making companiesgrow, 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 made by Marzena Grzesiak and Anita Richert-Kaźmierska...