Workshop Family Firms 25 June 2012

Questions?#MFMFF

Succession of the Family Firm: ell-it-on, Pass-it-on or have it managed for you?

B l J 25th 2012Brussels, June 25th, 2012

MFM Alumni partner:

AgendaQuestions?

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Civil and legal aspects of successionJean-Philippe Bonte, Head of Wealth and Analysis Planning at ING

Investing in (the transfer of) family firmsWalter Beyen Partner at Vectis ParticipatiesWalter Beyen, Partner at Vectis Participaties

Conflict prevention & mediationHanne Van Waeyenberge, Expert in family business mediation

Transfer in family owned companiesTransfer in family owned companiesKarel Boone, Lotus Bakeries

ModeratorMiguel Meuleman, Assistant Professor at Vlerick Leuven Gent ManagementMiguel Meuleman, Assistant Professor at Vlerick Leuven Gent Management School

Reception

MFM Alumni partner:

Questions?#MFMFF

Civil and legal aspects of successionJean-Philippe Bonte, Head of Wealth and Analysis Planning at ING

MFM Alumni partner:

Questions?#MFMFF

Investing in (the transfer of) family firmsWalter Beyen, Partner at Vectis Participaties

MFM Alumni partner:

INVESTING ININVESTING IN(THE TRANSFER OF)

FAMILY FIRMSFAMILY FIRMS

VISION OF A FINANCIAL INVESTOR

WHO IS VECTIS PARTICIPATIES ?

Independent investment fund (EUR 35 million)

I i 2004 i (Fl i h) SME’Invests since 2004 in (Flemish) SME’s

Investment tickets between EUR 0,25 and 3 million (minority stakes)

Provides operational support (interim CFO)Provides operational support (interim CFO)

Investors: Gimv, institutional investors and ± 40 Flemish entrepreneurs

Various investment options:pMBO / MBI / OBO transactions (a.o. succession issues, exit of the family, …)Growth financingStarters with experienced management

Investment amounts between EUR 0,25 and 3 million (minority stakes)

Currently 9 participations in family firms

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OPERATIONAL SUPPORT

DirectorDiscuss strategic issuesDiscuss strategic issuesMonitor strategy implementation

(Interim) CFOSounding board for management;Implement (analytical) financial reporting;Legal support & assistance with HR related matters;Point of contact for banks and insurance companies;

&Prepare and monitor budgets & business plans;“Independent” mediator in case of tensions/discussions between operational shareholders.

Bridging the period in which the company is not able to attract a fulltime CFO

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CHARACTERISTICS OF INVESTEMENTSIN FAMILY FIRMSIN FAMILY FIRMS

The decision to sell the company is often an impulsive/emotional decisionThe decision to sell the company is often an impulsive/emotional decision

A family firm is usually not (optimally) structured to attract an external partner/acquirer

Family firms usually have a “thin” management structure

Sale of the company could be initiated by (fiscal) wealth planning

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ALTERNATIVE FOR 100% SALE : THE “OWNER BUY OUT”

Sale of the family business to an acquisition vehicle (“Newco”)Newco acquires 100% of the shares of the family firm

Capital of Newco is contributed by private equity, family and management

Balance of transaction price : bank financing (2 – 2,5 x EBITDA) and vendor loans

Benefits of an “OBO” for family shareholdersDiversification of family wealth

Financial investor provide strategic advice for further growth

Family entrepreneur stays CEO

Financial investor and CEO join forces to establish a professional management teamFinancial investor and CEO join forces to establish a professional management team

Financial investor exits in 5 to 7 years

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i i i iVectis ParticipatiesStratem 11 bus 2Stratem 11 bus 2

9880 AalterPhone 09/375.69.00

[email protected] www.vectisparticipaties.be

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Questions?#MFMFF

Conflict prevention & mediationHanne Van Waeyenberge, Expert in family business mediation

MFM Alumni partner:

C fli t ti di tiConflict prevention & mediation

Succession of the family firmVlerick MFM Al mniVlerick MFM Alumni

ING, Brussels, June 25th 2012

Hanne Van WaeyenbergeExpert in family business mediationExpert in family business mediation

www.inderminne.com

in der minneweer minnenmeer winnen

“I t t ll f il fi ”“I want to sell our family firm”


“I t t ll f il fi ”“I want to sell our family firm”

… was only a cry for mutual understanding.


A CONFLICT PREVENTION (3 messages)A. CONFLICT PREVENTION (3 messages)B. THE POWER OF MEDIATION


A. CONFLICT PREVENTION1 M t th f di f ili1. Message to the founding families

“The succession of a family business is a long term

psychological procespsychological proces.

The emotional and relational aspects are of more importance

i ( fi i fi )then all technical aspects (legal, financial, fiscal).”


“ l t h l i l ”“a long term psychological proces”A proceeding in stages:A proceeding in stages:

Phase 1: Preparation: am I (& are we) ready for succession?

Phase 2: Decision making: we choose Phase 2: Decision making: we choose • to sell• an external manager controlled by the family• succession by family

Phase 3: Elaboration: legal, financial, fiscal arrangements

Phase 4: Implementation: selling / leaving / introducing / …


“ l t h l i l ”“a long term psychological proces”





Start in time

Take your time Take your time


“the emotional and relational aspects”

Letting go is difficult for:

the family business-leader !

the family

the company

Tips:

take your timetake your time

focus on your mental well-being


“the emotional and relational aspects”

The earnings of the sale will not compensate

the loss of identity or status the loss of identity or status.

Distance yourself mentally from the business

before the sale!


“the emotional and relational aspects” Acknowledge, name and take care of g ,

emotions + needsCommunicate about it by yourself within the family in your communication with the potential investor

Tips:

seek assistance of a facilitator seek assistance of a facilitator

choose only an investor who fits with your needs


i d th li flmind the calimero-reflex


i d tt ib ti b h imind attribution behaviour


2 M t th t l i t2. Message to the external investors

the legal owner the psychological owner

Th h l i l The psychological owner has control intimately know the firm invests himself into the project is seen as the major representative


Mi d th d f th Mind the syndrome of the conqueror


3 M t th t l 3. Message to the external manager


B THE POWER OF MEDIATIONB. THE POWER OF MEDIATION


Th d t f di tiThe advantages of mediation Short termShort term informal & fast procedure low cost a consensual solution based on needs

SOLUTION

a consensual solution based on needs

Long term relationship (trust, comprehension, respect)p ( , p , p ) (self) empathy quality of communication

TRANS-FORMATION

Mediation empowers!


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Vision of the entrepreneurKarel Boone, Lotus Bakeries

MFM Alumni partner:

Questions?#MFMFF

Q&A

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Thank you for your attention

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Economy & Finance

Workshop Family Firms 25 June 2012