To better understand the benefits of private equity (PE) as a partner in an upcoming succession plan, it’s worth taking a look at typical challenges and the solutions that PE offers in this context.
Purchase Price Financing
Even if a medium-sized company has a potential successor, once the company reaches a certain size, that successor usually lacks the necessary financial resources to finance the purchase price solely with sufficient equity.
BE Investment-Partners (BE) bridges this financing gap by providing the necessary equity capital and also has an extensive network of additional financing partners to structure sound transaction and operational corporate financing.
Lack of Experience with Corporate Transactions
Often, the potential successor has no experience in executing a business transaction. This is frequently the case because a succession plan typically represents the first business transaction for both the buyer and the seller, in which a lifetime’s work is handed over to new, reliable hands.
Succession planning has been BE’s area of expertise for many years, so we know exactly how to execute a business transaction professionally, swiftly, and with process reliability. A broad network of mid-market-focused advisors and financing partners—one that has grown over the years—is essential and a prerequisite for successful and swift execution.
Proactive Succession Planning
Depending on the seller’s personal life plans, it may make sense to initiate a proactive succession plan to secure the company’s future in a timely manner under corporate law. This initially concerns only the succession for the current shareholders and offers the opportunity to arrange operational succession over a defined time horizon.
Thanks to the flexibility of its investment approach, BE is able to develop customized solutions in collaboration with the shareholders to prepare for and structure their succession in the best possible way. We bring the necessary experience in structuring and implementation to identify and execute the various options.
All of the approaches briefly outlined here illustrate the diversity of possible succession solutions. Our goal is for all parties (seller, successor, BE) to benefit from BE’s involvement in a succession process.
One example of a successfully implemented business succession is DobaTech GmbH, based in Ransbach-Baumbach, a leading regional IT systems provider focused on B2B clients. BE facilitated a succession solution in collaboration with the company’s authorized signatory, Alexander Böhning, who has been promoted to the management board and has acquired a stake in DobaTech together with us.
Alexander Böhning comments: “BE made the succession solution a success for all parties involved—not only through capital, but above all through the experience it brought to the table in structuring and implementing the plan.”
