In 2019 H.C.F. acted as the exclusive buy-side M&A advisor to a publicly listed company, specialized in personnel services mainly for the banking and finance industry, on its purchase of a leading educational training firm. The acquisition will allow the buyer to unlock further growth potentials and realize extensive synergies. The greater access to qualified and skilled staff, will allow the buyer to achieve a competitive advantage in the personnel services market. Simultaneously, the target’s competitive position is also strengthened, as it now offers its clients a direct link to the labour market. The access to new geographic locations as well as the automation and digitalization of operations within the buyer’s existing vocational training service portfolio are further favorable factors for a successful growth path.
H.C.F. Hanse Corporate Finance initiated the transaction and as the sole buy-side financial advisor supported the Management throughout the entire M&A process. This transaction further highlights H.C.F.’s outstanding expertise in the personnel services industry and in the private equity market in the DACH region.
H.C.F. advised the sole market leader for outdoor advertisements in Germany. Acting as the exclusive financial advisor to the managing partner of the second generation family business during the entire M&A process H.C.F. successfully managed the deal until its closing. Within the framework of a succession plan the sole owner sold 100% of the company shares to a family office. In the course of the transaction, the current operations manager with almost 20 years experience in the company, retains a partial ownership of the NewCo and will continue to work together with the investor as a managing partner in the long run. The objective of the family office is to strengthen the company’s competitive position in the market and thus ensure that the firm maintains its outstanding reputation in the growing advertising market. For this reason the company will not only keep its existing employees, but also create additional jobs, therewith driving the future growth of the enterprise. The investing family office will guarantee a high business strategy consistency to employees, customers and partners.
During a secondary buyout transaction in 2018, H.C.F. acted as the exclusive financial advisor to a leading legal personnel services company, which had significantly improved its revenue and profitability in recent years. The enterprise, headquartered in Frankfurt am Main, was founded in 2005 and has since established itself as a reliable provider of legal personnel services for the German market. Its services include temporary staffing of legal professionals („Projektjuristen“) and legal process outsourcing („LPO“). The objective was to sell the company to a strategic partner, a financial investor or a family office, whereby the founders aimed to keep a minority stake. H.C.F. supported the company founders as well as a northern German family office throughout the entire M&A auction process during the sale to a Swiss fund. The buyer aims to build a strong partnership with the enterprise and its management and the established buy- and build-strategy will contribute to the future growth and development of the company.
Share disposal of passive shareholders and growth financing
H.C.F. advises a group of companies from the advertising sector as well as their six private shareholders with a share disposal to a private equity investor following an increase of capital in order to finance the additional growth of the Group. H.C.F. initiated the transaction and advised the group of private shareholders during the entire process as their exclusive financial advisor.
The Group’s equity base was meant to be strengthened by adding growth capital. In addition, the development of the company, especially the continuation of the successful international growth strategy, the diversification of the client base and the expansion of the scope of business should be promoted. Additionally, the investor acquires shares from passive shareholders as part of clearing up the shareholder structure. The long-term management team including the founder of the company continues to hold the majority of the company shares.
Off-market deal generation for a private equity investor
H.C.F. exclusively advised a private equity investor on the acquisition of a company from the personnel services sector. H.C.F initiated, structured and successfully completed the transaction for the investor. The team of H.C.F. possesses long-term advisory experience in the personnel services sector which was the main reason for securing the mandate. The private equity investor invests long-term equity in SMEs with above-average growth potential and has equity of more than EUR 500 million at their disposal.
The investor acquired 100% of the company from the previous shareholders together with the management team in a management buyout. The investor pursues a buy and build strategy in order to establish a market leader for upscale personnel services.
The employees of H.C.F. advise a provider of temporary staffing and personnel services with revenues of approximately EUR 30 million and EBIT of EUR 3 million. 80 % of the company shares are being held by passive shareholders (private shareholders / founder). The remaining 20 % are being held by the CEO – the son of the founder. The company succession is meant to be accomplished through the sale of the company to a strategic player, a private equity firm or preferably by means of an internal solution and the sale to the current management. However, the CEO does not have enough capital in order to finance the acquisition of the remaining shares on his own.
Mr. Frede advised the private shareholders and the CEO of the company on the sale of the company to a private equity investor by means of an owner buyout. The previous shareholders receive a market-based amount for the sale of their shares and accept a discounted purchase price in return for an interest-paying vendor loan. The investor holds 75% of the company shares, while the CEO holds 25%. The investor accompanied a successful expansion of the company from a mainly regional, traditional temporary staffing company to a nationwide provider of upscale personnel services. Within four years, up to the sale of the company to an international strategic player, the investor was able to double the revenues and triple the Enterprise Value of the company mainly through organic growth.
Mr. Frede advises a chain from the foodservice industry on growth financing. The company generates revenues of approximately EUR 25 million and EBITDA of approximately EUR 2 million while operating more than 25 sites in Germany which are entirely owned by the Managing Owner. The organizational structure did not correspond to the present company size. A controlling system and a sustainable financial structure were missing. The solution approach is to professionalize the entire organizational structure with an experienced and financially sound partner who supports the company in reaching additional growth through opening additional stores as well as the implementation of modern foodservice concepts.
A private equity firm joins the company by investing mezzanine capital with an attractive equity kicker. The Managing Owner will be able to access additional funds if needed. The investor supports the company by strengthening the core business operations by expanding the management teams and by transforming the attractive pipelines into active growth of the restaurant network. Innovative marketing concepts and higher customer frequencies will lead to additional optimizations on the operational level and like-for-like sales growth. The Group expands by adding nine additional sites, performing additional marketing and sales initiatives as well as the expansion of the operative level. All led to a doubling of the revenues within five years. The company will be sold to a secondary investor and the management team will take part in a management buyout. The full amount of the growth capital will be paid back to the investor.
Company valuation as part of merger talks between two IT companies
A market leading IT consulting firm and TOP-solutions provider of Microsoft technologies is part of talks about an acquisition of or a merger with a market leading provider of SAP-solutions. The merger of these two companies would lead to many synergies and market potentials. The new company will be the leading dual vendor provider of Microsoft and SAP-solutions with a unique product portfolio and a broad client base.
H.C.F. is being mandated to perform a company valuation by utilizing established multiple and discounted cash flow methods in order to determine the future share allocation between the two companies.
Growth financing by means of a minority investment
The employees of H.C.F. advise an analytics service provider on growth financing by an investor providing growth capital in the amount of EUR 5 million. The company’s clients are from the following sectors: agriculture, environmental advisory as well as food and moleculobiological diagnostics. In the future, acquisitions are supposed to lead to a stronger position in the market and further internationalization. The current shareholders wish to give up as little company shares as possible. In the long run, the goal is to keep 100% of the company shares in family hands.
This plan was realized through a minority investment by an investor of which ¾ were agreed to be bought back two years later by the company. The financing partner promotes the growth of the company and helps to purchase a food analytics laboratory of the same size in Germany as well as to expand the activities of the company abroad. When the remaining shares were bought back from the investor ten years later, the company generated a five times higher revenue, multiple acquisitions have been accomplished, a successful modernization of the laboratories took place and an expansion to multiple European countries and organic growth in Germany was made possible. Today, 100% of the company is owned by the family.