Selling the business: how an investor can add value to your business
Benefiting from ‘outside’ knowledge, expertise and capital: entrepreneurs are increasingly choosing to work with an investment company. They recognise that a business acquisition is a great way to grow in a controlled manner (whether or not that takes place with other companies) and to secure long-term business health.
Why choose VADO as your investor?
At VADO we understand business acquisitions quite well. It’s no coincidence that we take the time to get to know each other and to discover whether we could be compatible with a company. We ask ourselves things like: to what extent do our vision and our core values match? What are the majority shareholders’ ambitions after the acquisition? We only continue to the next step when both parties have a good feeling about the business transfer.
Stand-alone or in a group
We also look carefully at how the new company best fits within the VADO portfolio. Some acquisition candidates are well suited for healthy further growth as a stand-alone company. A successful example of this is Verhoeven, a specialist in complex product handling and transport systems.
Other companies lend themselves better to form a stronger whole in a partnership with one or more of the VADO companies, together forming a valuable partner for clients. An example within our own portfolio of this kind of buy-and-build strategy is Anvil Industries, a strong partnership in mechanical operations. The companies within Anvil operate independently and reinforce each other where possible. This reinforcement helps them bring the specials to market on a larger scale. It’s precisely by acting in groups that trust is created in large companies (such as ASML and Philips) and in banks.
Sustainable growth before quick profits
As an investor we have a long-term strategy; we don’t aim purely for short-term profit. Referring to our investment philosophy, we determine how a company may continue to grow in a healthy, solid way in the long term. Additionally, unlike many other investors, we do not enlist a fund structure that would enforce to have a shorter time frame of 5 to 7 years.
Multiple scenarios negotiable
Every business acquisition is unique; each scenario is negotiable. In the long term, VADO often strives for a majority stake. For example, we may grow from an interest of 51 percent to a majority interest of 70 to 80 percent. But also growing from a minority interest of, for example, 30 percent could be a possible scenario.
The selling party regularly retains a minority interest for the longer term, for example 10 or 20 percent of the shares. This not only increases the selling party’s involvement (so important for continuity), but also ensures that these co-shareholders benefit from future growth. In this way we work together towards the same long-term goals.
A company acquisition is regularly accompanied by a management buy-in/management buy-out; as an entrepreneur you remain active in the management of the company, while VADO supports you from behind the scenes. A good example of this is our company BKL, which has been part of VADO since 2019.
Natural link with the manufacturing industry
From our company history (VADO stems from DAF, a family-owned business) we have a natural bond with the manufacturing industry and with technology. We have a penchant for technical companies, and we understand the responsibility you have as a company for employees, suppliers and customers.
The turnover of the companies in which we invest usually ranges between 5 to 50 million euros. Large enough to be a professional and defining player in a niche, yet small enough to respond quickly and flexibly to opportunities and developments and to make quick decisions via short lines of communication. In addition, we offer companies the space and support to do business; by sparring, by thinking together about the strategy and through targeted investments. We also have a network of trusted specialists who can provide support on specific topics.
Like to know more? Contact us today!
Would you like to learn more about the possibilities we offer regarding SME acquisitions? Please feel free to contact us for further information, or read the cases about Verhoeven, BKL or EMD Tooling.