Loes Fröhlich knows what he wants. That was already the case back in 1997. That’s when he founded his company, Fröhlich Systemautomation GmbH. The newly minted young entrepreneur’s stated goal: “I’ll retire at 55.” The mechanical engineer kept his word and followed through on his commitment to scale back after 20 years as a self-employed entrepreneur. On January 1, 2018, he sold his company, which specializes in custom machinery and process automation, to Patrick Caramagno, also a mechanical engineer.
Company Takeover – Successor Sought
However, in Fröhlich’s view, the search for a suitable buyer could have gone a bit faster. “It took a good three and a half years from the initial intention to sell to the handover,” recalls the entrepreneur from Treuchtlingen in Franconia. “Longer than expected.” There was no shortage of candidates, but the prospective buyers lacked the absolutely essential engineering background. “The buyer’s technical expertise was a deal-breaker for the acquisition of my company.”
It wasn’t until consultant Harald Deininger took over the mandate in 2017 that the process really gained momentum. “In an article in DUB UNTERNEHMER magazine, I read about the successful sale of one of my direct competitors’ companies. The consultant in charge was Harald Deininger,” recalls Fröhlich. “So I got in touch with him.”
Company Acquisition—Process
In May 2017, Deininger introduced Fröhlich to his current successor, Patrick Caramagno. Caramagno was also a client of the Nuremberg-based management consultant—though as a prospective buyer. “Once we had established contact, we terminated Mr. Caramagno’s fee-based search mandate,” says succession expert Deininger. “Otherwise, we would have found ourselves in a conflict of interest.” He has fond memories of the collaboration. The fact that Fröhlich had a clear buyer profile in mind and that Caramagno was a knowledgeable and pleasant negotiating partner contributed significantly to the success of the sale. Another crucial factor for Deininger: “Loes Fröhlich was open to our advice on the sales process.” For example, the pension commitment Fröhlich had as managing director was terminated prior to the sale.
Caramagno had set himself a timeframe of one year for the project “Acquisition of a Special-Purpose Machinery Manufacturer.” It ended up taking about a year. “I had a clear picture of the machinery manufacturing company I wanted to acquire,” he says. The key criteria for his search: a maximum of ten employees, a high-quality portfolio with a high level of technical expertise, financial stability, and a customer base spanning as wide a range of industries as possible. In addition, the company of his dreams was to be no more than 100 kilometers from Nuremberg, “since I feel a strong connection to my Franconian homeland,” says Caramagno.
Company Acquisition—Criteria for Success
Fröhlich Systemautomation met all the criteria. “The overall package matched my search profile exactly, and the financial data was also convincing,” says the trained special-purpose machine builder, who can look back on a career as a production engineering manager in the automotive industry. “And my gut feeling was very positive right after the first site visit.” Fröhlich confirms that the chemistry was immediate: “We hit it off right away.”
Just under four months before the handover date, Fröhlich and Caramagno sealed their agreement with a handshake—and remained committed to it until the notary appointment on December 8, 2017. “A piece of classic business culture, where a handshake means something,” says Caramagno, describing the respectful business relationship with his predecessor.
THE MOST IMPORTANT POINTS AT A GLANCE
Expert guidance: Advisors bring sellers and buyers together.
If the chemistry and expectations align, negotiations often proceed smoothly.
It’s therefore no surprise that the two are still on good terms. Fröhlich not only stands by his successor to offer advice when needed, but he also keeps an eye on new business opportunities. After all, Fröhlich hasn’t quite retired yet. Once an entrepreneur, always an entrepreneur. “Today, I work as a consultant in the areas of human resources and automation,” says Fröhlich. “I advise clients who want to automate their operations. If that involves the production of a custom machine, I’m happy to refer them to Fröhlich Systemautomation.”
Business development is currently a key focus for Caramagno as well. Preparing quotes and negotiating prices take up a large part of his day-to-day work. But his agenda also includes in-depth technical discussions with clients and in-house engineers, financial management, and maintaining client relationships. He plans to further expand the existing business areas of custom machine building and automation solutions using robots in the future. Even though Caramagno is now constantly on the go himself, “I would take this step again and again,” says the new entrepreneur.
The German Business Exchange brings together company sellers and successors.
Germany’s largest business exchange makes buying and selling companies convenient: purchase requests and sale listings can be posted online easily, anonymously, and securely. In addition to the business exchange, DUB.de also offers a franchise exchange where franchisors can showcase their opportunities and find franchisees for new and existing locations.
