Hoens & Souren was called in to represent four young IT entrepreneurs in the sale of their business. Having been recommended by a well-known civil-law notary, our office was engaged to advise in the takeover by a company. The object was to create a successful player in the market for advice in the area of information technology by realising synergy gains with different large and small acquisitions.
These young entrepreneurs had set up their company some six years previously, and during that short period they had created a business worth some 3.5 million euro. In addition, each of them individually was valued for their own expertise, whereby each would have or had a role to play for the buyer for a shorter or longer period. Though all of the shares were to be sold, it was known in advance that not all of the sellers would have a role to fulfil in the business of the buyer.
Advise all of the four shareholders, each with a different interest and outlook, through a speedy and successful sale process.
We proceeded to identify the interests of each individual seller in advance of the negotiations. Several meetings were held, attended by a team comprising of a partner who is an expert in mergers and acquisitions and an associate lawyer specialising in employment law and business law, all backed up by an experienced administrative office. Our advice in the negotiation strategy was to apply a different approach in representing the different interests of each seller and to conclude each negotiation on an individual basis.
The negotiations were conducted in two languages: Dutch and English. This involved a transaction between two Dutch companies, but some of the parties were English speaking, including the director of the buyer and one of our client’s shareholders. This was not a problem for us because of the international nature of our business. The transaction documentation was drawn up in English and the other (individual) agreements in Dutch.
In addition to the management agreements, the buyer offered to conclude a participation agreement with the sellers, with whom it was proposed to enter into a long-term relationship. By way of reinvestment for (part of) the purchase price, these sellers could buy depositary receipt for shares in the buyer and thus share in the profits.
A sales process can indeed be concluded expeditiously if well-planned, as in the case of this project that was codenamed ‘B-52’. The deal was closed within a period of 3.5 months, from the initial contact to signing at the civil-law notary’s office in Amsterdam.
The sellers were happy with the arrangements under which they would participate in the company for the foreseeable future. The departing sellers were able to quickly demerge from the buyer and tackle a new challenge elsewhere.
At the ‘closing’, the deal was celebrated with B-52 cocktails.
Contact Frederik Barthel