Trusted Resource Partner

Venture capital and private equity firms are becoming increasingly important for companies. At Claassen Moolenbeek & Partners we meet and work with PE firms more and more. It is in the interest of both the PE firm and the acquired company that an acquisition is a success. As a trusted resource partner, we can make an important contribution.

Venture capital and Private Equity firm​

There are many PE firms and they are all different. It is important that we get to know each other well before we start working for you. We will support you where necessary and work with you in a way that is driven by the DNA, principles and practices of the PE firm. Claassen Moolenbeek & Partners can support you in all phases of an acquisition, before, during and in preparation for an exit. But you may decide that you want to do many things yourself. That’s what we mean by Trusted Resource Partner; we want to get to know you well enough to know what the company itself can and wants, and then fit in seamlessly.

Successful acquisitions

The number of acquisistions that are generally unsuccessful is over 65%. For PE, this percentage will be lower because the partners of the PE firm are often much more involved in the deal. Nevertheless, this illustrates the fragility of the acquisition and integration process. For the
PE firm, fundraising and investor relations are obviously critical. It helps if you can convince investors with a successful track record from acquisition to exit.

A successful acquisition starts before the purchase. The purpose of the purchase is clear, and then follows the process of market exploration and evaluation, research, structuring and closing.

The integration phase, from the signing of the contract, is critical to success. After all, the contract is a record of agreements and mutual expectations. Introducing the PE firm to the portfolio company, setting the right priorities, retaining scarce staff, developing the
strategic plan and monitoring its implementation, the many facets of compliance, possible separation from the former group, etc. are all issues that cannot wait.

Depending on the firm’s objectives, an exit may be shorter or longer. In all cases, you will want to demonstrate that the business is worth more now than when you bought it. There is often a lot to do before this happens. Think about integrating newly acquired businesses, restructuring, absorbing management turnover, improving information and processes. And, last but not least, carefully preparing the business for sale.

Trusted Resource Partner

Claassen Moolenbeek & Partners has an extensive relationship network and its more than 50 affiliated partners bring a wide range of sector knowledge and expertise. For more than 40 years, Claassen Moolenbeek & Partners has specialised in strategy, project management, management guidance, purchase and sale advice, valuation and financing. All areas of interest to the PE firm and its portfolio companies as well.

For more than 10 years, partners at Claassen Moolenbeek & Partners have been closely involved in making various acquisitions by PE firms a success, ranging from individual undertakings to complex carve-outs. Depending on the need, we get involved as early as the moment when comprehensive draft acquisition and financing agreements are on the table, or only when a management position in one of the portfolio companies cannot be filled internally. We are highly flexible and transfer our knowledge and production to the organisation in question. This is what we call being a Trusted Resource Partner for you as a PE firm and for the management of your companies.

Depending on the initial situation, we coordinate the services with you.

Starting point portfolio:

Carve out

Add on

Successor issues

Managing the growth

Financing the growth

Start up / scale up

Cash in on success

Too leveraged

Distressed / failure

Service menu for portfolio:

Transition from former group

Integration / synergies

Business plan / strategy

Decision making

Execution plan / projects

Information

Compliance

Process / Customer Service

(Re-) Structuring

Private equity case studies

The partners of Claassen Moolenbeek & Partners work for several portfolio companies. The cases described relate to our activities in complex acquisitions and integrations for private equity firms and complement the strategy, acquisition and financing cases on the other pages of the Claassen Moolenbeek & Partners website. The activities described in the case studies are not always from a single company, often similar activities in several companies are described in one article. The setting is international, the experience extends to an active involvement in companies outside of Western Europe.

Trusted resource partner

The case studies describe how we have fulfilled our role as a trusted resource partner in (carve-out) acquisitions. It starts, of course, with a private equity firm looking at a particular market where it sees opportunities to acquire companies and add value. Often the firm will add companies to create a larger group. The PE firm may ask us to help formulate a strategy for a particular market, to find companies that fit that strategy and to advise on negotiations. All CM&P partners are involved in strategy, acquisitions and financing, often with specific sector knowledge.

Before an acquisition

Claassen Moolenbeek & Partners can in all cases be engaged for acquisitions in and around the Netherlands, valuations and the performance of (parts of) a Due Diligence (“DD”) including a Quality of Earnings (“QoE”) investigation. In a DD, the company is examined from various angles to determine what concerns and risks exist. Quality of Earnings plays an important role in determining value.
 
A procedure we often follow, in consultation with the PE office, is to be notified when the acquisition is (almost) certain, so that we can guarantee availability. If the seller allows it, we go through as many of the preparatory documents in the data room as possible: (draft) sale and purchase agreement (SPA), financing (SFA), transitional services agreement (TSA, in the case of a carve-out), due diligence results, legal and tax structure, insurance and any other documents available for the acquisition. This list shows that there are many specialists involved in an acquisition transaction. CM&P’s partners play a coordinating role for the portfolio company between the specialists and follow up on the issues that need to be addressed. It is also at this stage that it becomes clear in which areas additional support will be required once the acquisition has been completed.
 
The intended management for the new group is not always immediately available and then, of course, all hands are on deck. The challenge then is to quickly find suitable people to fill these gaps, which is certainly a difficult task in the current labour market. Temporary assignment of projects to CM&P partners can be a solution to bridge the gap until a new employee starts. In addition, the recruitment and selection process can be carried out with more care and attention as there is less.
 

From the acquisition onwards

From the acquisition onwards, it is essential that the plans of the private equity firm are translated into a business plan that is supported by the management of the acquired company. (Once sufficient support has been obtained, the implementation is monitored with an implementation plan. Taking into account the vision, strategy, financial objectives and targets for the company as a whole, KPIs, priorities, actions and milestones are set for the various business units for the coming year.
 
Management consultancy and interim management are seen by CM&P as an integral part of strategy. Besides working on the implementation of the business plan, there are other issues that require immediate attention from a compliance perspective, such as
 
 
Acquisitions very often require a final settlement. This often involves working capital. It becomes more complex when there is a transfer of services, systems or production.
 

Transition Services Agreement

Often the detailed operational knowledge in the acquired company is sufficient to enable the separation of services and systems from the former parent company. However, the transition creates additional tasks that the incumbent management must be able to take on in addition to their normal work. If the incumbent management is not able to take on this project, we will act as project manager for all or part of the project, e.g. for the system migration.
 
Add-on acquisitions
In many cases, the process does not end with the acquisition of a single company. Buy-and-build occurs when opportunities are identified in a market to combine related activities into a business that is worth more than the activities alone. It also occurs when a company is acquired with the intention of eventually closing it down. In all cases, Claassen Moolenbeek & Partners guides the processes with an integration plan that fits into the group’s business plan (Integration, structuring and culture).
 

Towards exit and beyond​

Private equity buys companies with the intention of reselling them as a stronger entity over time. Risk mitigation is considered from the outset. After all, it is important that the group is easy to sell on and that there are no unpleasant surprises in the buyer’s due diligence. That is the defensive side.
 
More important for the sale price is that the PE firm can demonstrate the results of its efforts and the value of the business when it is sold. Just as we can help establish the quality of earnings when buying, we can do the same when preparing to sell.
 
Of course, we are also ready to assist in further exit preparations, such as providing information and filling the data room. CM&P, as an independent party with the knowledge gained, will also take care of the transition to the new owner in a project role during and after the negotiations, if both parties think this is a good idea.

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