Change of ownership | Censor M&A
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Change of ownership

A large part of our business is focused on helping our client(s) with changes of ownership when selling a company. The decision to change ownership and the process leading up to a company transfer requires the relevant skills, resources and time in order to optimize the desired outcome. As such, we carry out and project lead the planning and preparation, the contact phase, analysis of indicative bids, buyer's due diligence and associated negotiations - up to and including the business transfer being completed.


Different forms relating to change of ownership

A change of ownership can occur in different ways depending on the owners’ motives. Here are some examples of different ownership changes:

  • Change of ownership to a new external owner
  • Private placement – new partner(s) provide the company with additional funding
  • Owner consolidation – by buying out some of the company’s existing owners
  • Spreading of ownership – through offering shares to new partners
  • Generational change – a younger generation within the family acquires / takes over the business
  • MBO (Management Buy Out) – management and/or key personnel acquire the company

Irrespective of whether the sale of a company relates to changing all or part of the ownership, Censor acts as an advisor and project manager throughout the entire process. Censor’s overall commitment ensures that you can still focus on the company’s wellbeing while we prepare, run and implement the ownership change.

Timescale for a change of ownership

Six to twelve months
A change of ownership usually takes between six to twelve months to complete. Given this timescale, one can properly plan and prepare for all necessary activities that create the best possible conditions for a successful ownership change.

 

One to four years, or that which we term as ’Slow-cooking’
Occasionally, owners have taken the decision to change ownership, but for different reasons, want to execute value-creating activities first in order to reach a certain level of value or simply reduce or eliminate weaknesses that a buyer perceives as tangible risks – this is what we call a “Slow-cooking”.

Value ambition

The company’s value is of course a central issue. The fundamental starting point for a company valuation is the company’s ability to earn money over time, measured both historically, but above all its future cash flow. Furthermore, one needs to identify the company’s ‘value-effecting factors – whether they be positive or negative ones.


Finding the new and right owner(s)

Where can you find the new, ideal owner? Ideally, based on industrial logic, the buyer’s perceptions about your company value, not to mention emotions i.e. the feelings you have for the new owner. We map and identify potential buyers in an international market – partly based on our clients’ preferences, but also combined with our assessment of where we can most likely find the relevant players who value your company in an attractive way.

The logic behind a change of ownership

A prerequisite for sellers and buyers in reaching an agreement is to agree on three key issues:

 

Industrial: Does the buyer and seller share the same perception as to how the target company fits into a new structure? How can one manage risks and seize opportunities in the best possible way?

 

Financial: How do the buyers and sellers go about discussing the company’s value? Where are any differences? What factors can influence the parties’ different valuations?

 

Emotional: What set of values and corporate culture does the buying company have? How well do the business cultures fit? What is the seller’s opinion of the personal chemistry in relation to the buyer?