A successful company takeover starts with a careful preparation. Martin Roos, director of Lobeco, experienced this himself. He brought in the right advisors on time, who assisted him with the acquisition of Lobeco. A Belgian company was also acquired during the advisory process.
Lobeco, located at The Hague and Wevelgem, is a technological wholesaler. The 38 year active company delivers fire detectors, card readers, cameras and burglar proof materials to engineers and ICT professionals. They install the materials at end users’ location, such as big office buildings and hotels. Additionally Lobeco provides training for engineers and makes them aware of the market opportunities. Lastly, the company has its own support department, wherefrom they support customers with project guidance, certification and marketing issues.
Formalization of the financing issue
‘Lobeco is and always has been a family company’ tells the owner and managing director Martin Roos. ‘When I became managing director, the agreement was already made that I would buy the company. The former owner and managing director did not have any successors. We wanted to approach the takeover deal professionally and that’s why we involved Hans van de Pas of Match Plan in Oktober 2009. He formalized the case, wrote a financing memorandum and presented it to three banks.’ The Rabobank The Hague was one of the three bank and also the ultimate choice of Martin. ‘To start, the content of the offer of this bank was very strong and fitting’, said Martin. ‘But the most important factor was that I immediately felt welcome. I missed that feeling of hospitality with the other financing parties. They received my question, processed it internally and answered me with very few personal contact moments. The Rabobank The Hague was during that entire process much more transparent and during the case we had many contact moments.’
Deal team involved with the business acquisition
The Rabobank composes a special selected team for complex business acquisition questions. According to Martin, the advantage of that team is that multiple persons within the bank are aware of all ins and outs of the case. Harmen Bosma, manager Corporate Clients of the Rabobank The Hague explains: ‘During business advisory projects, we always construct a deal team with colleagues from different disciplines. The team of Lobeco was a combination of an account manager, an advisor financial logistics, an analyst, a specialist international business and our subsidiary in financing solutions De Lage Landen.
‘We find it very important that there is a genuine click between the client and the account manager and we invest time and effort to make this happen. Therefore we let the client get acquainted with multiple advisors and offer them the ability to pick the advisor of their choice. Our main objective is to unburden the client, in other words to solve all the financing issues of our clients. We try to do that in such a way, that after mutual exchange, the client only has to sign the contract.’
During the takeover of a Belgian Company, Ben Poelman, an account manager Corporate Clients of Rabobank The Hague became the account manager of the deal team of Lobeco. ‘Last year in May when we completed the business transfer for Lobeco, an opportunity to acquire the shares of the Belgian company GCO BV BA presented itself. GCO BV BA was the distributor of GE Security in Belgium, with activities equal to Lobeco. There was a threat of bankruptcy, caused by dysfunctional management.
Due to the threat of bankruptcy and the fact that there were more potential buyers, there was a sense of urgency. GE Security preferred Lobeco GCO as the acquiring party. According to Harmen Bosma all experienced bankers know how to deal successfully with the technical details of acquisitions. However, the role of emotions are frequently underestimated and precisely emotions are the crucial factor in whether or not the deal can be closed. ‘The international part of this deal was the most interesting’, tells Harmen. ‘Eventually we have provided capital for the acquisition of the shares and for the working capital of GCO BV BA (the current Lobeco Belgium BV BA), based on Belgian securities and partially by guaranteed credit covered by the Dutch Government.
The financing was also made possible by the rapid switching of the local present International Finance Manager and our colleagues of Rabobank International Desk at Antwerp.
Thereafter we have done a legal check on all contracts and other legal documents. The Rabobank is unique in such a local, above-local and international collaboration.’
Best International Deal
The deal team discussed before has won an award with this acquisition, namely: the Best International Deal, an internal price within the Rabobank group. Harmen reacted: ‘We are very proud of this award. International business is one of the main points of attention of the Rabobank. If our Dutch clients want to expand their business abroad, we would like to stay their bank of choice in that particular country.
‘Our deal won the award, because it was an acquisition in both the Netherlands and Belgium and we used the Dutch guaranteed credit and the Belgian cash flows and securities to finance the deal.’ After the acquisition, business is going very well for Lobeco. Martin Roos confirms: ‘The year 2010 ended good and the start of 2011 is excellent. Everything fits. The Rabobank The Hague turned out to be an excellent financial party. Their advisory and commitment did not stop after the closing of the deal. We frequently have contact and it makes me feel very comfortable.’