On succession planning, “we often help entrepreneurs as we are [already] their trusted partner, knowing all their personal context,” Hélie de Cornois, partner and head of family office Luxembourg at Stonehage Fleming, said in an interview. De Cornois, who runs a multi-family office in Luxembourg, explained that entrepreneurs are often advised by financial planners on their personal assets, whereas other advisors will help them on a transaction. “We occupy the zone in between both advisors.”
We are available 7/7 for entrepreneurs
In some locations, such as in the UK, SF plays the role of a M&A advisor whereas in Luxembourg, it may recommend M&A advisors that correspond to the specific needs of an entrepreneur. “The employees on our payroll are often hired based on the extent of their network.”
Which M&A adviser may better fit the needs of a seller?
“We are dealmakers only... we offer no additional internal services,” commented Joubin Bashiri, partner at Tenzing Partners. However, he said that his firm works closely with the client’s trustee, tax advisor and occasionally their lawyer. He noted that their deals rarely exceed the €50m mark.
Tenzing can afford to work on smaller deals valued between €5m and €10m given its much smaller fixed cost than at the Big Four. He sees the size of his firm as a distinct advantage over its larger competitors as he claimed that his clients have a direct access to a partner and/or a senior analyst. “We are available 7/7 for entrepreneurs.”
Given the importance of the sector, it comes as no surprise that Gregoire d’Avout, partner, strategy and transactions at EY, has been quite active in financial services, but not only. “We did some IT transactions such as with ARHS, which is doing business with European institutions, because it is essentially a multi-sector business.”
The minimum transaction size is €10m at EY and it is rarely below that level. D’Avout pointed out that there are not that many transactions valued north of €50m in Luxembourg. Besides, he thinks that it is a competitive advantage to offer in-house financial, legal and tax assistance services. The dealmaker claimed that personally knowing these experts eases the interactions and delivers better service for the client. A client may have a trusted lawyer that knows their day-to-day business. However, d’Avout thinks that a transaction expert may be more appropriate for a company sale.
Axiomatic, a Luxembourg LBO acquiring local companies, manages transactions itself given their relatively extensive experience on execution. CEO Georges Zahlen can also lean on his experienced board members. However, he insists that that the seller should accompanied by a M&A advisor such as Tenzing, BHB & Partners, Value Associates or any of the Big Four. He thinks that an engineer who may sell for the first time but also the last time, would probably be better off turning to an expert to negotiate and legally structure the sale.
M&A business can be a roller coaster affair
It may not be smooth sailing even after many months of work have been spent on a project that includes finding a buyer, due diligence and negotiation of the sale terms. On a luxury product transaction, Tenzing was taken aback when the shareholder of the acquiring firm, in the midst of negotiations, changed its management, which then decided to change the firm’s strategy. Positively, Bashiri managed to find another buyer, but he had to restart the whole process from scratch.