Especially in businesses which have been family-owned for many generations, reorganization of the group of shareholders is often necessary. It may be that siblings wish to surrender their shares and be paid out, or that distant relatives no longer wish to be shareholders. Sometimes, siblings have managed the business jointly, and one of them wishes to retire. It is frequently impossible for the active family entrepreneur to bear the cost of paying out his relatives from his own resources. His primary interest, however, is the preservation of the company. In such cases, a private equity partner is the right choice.
By taking over shares from a shareholder who is leaving, an equity capital partner like HANNOVER Finanz ensures the autonomy of the company and guarantees that the business remains an independent going concern. Furthermore, the investor acts as a neutral partner supporting the entrepreneur, in contrast to the sometimes highly emotional scenarios which can occur between family member shareholders. A quarrel between siblings or a father-son conflict can sometimes inflict more damage on a business than a temporary economic downturn. This can also apply to companies which are not family-owned, but, as a result of their foundation history, have a large number of unrelated co-shareholders. A private equity company like HANNOVER Finanz is a good partner in all cases, as it contributes not only financing know-how, but also a wealth of experience gained from similar investment projects.
In some cases, the planning for corporate succession goes hand in hand with a desire by the entrepreneurs to realize assets by way of an owner buy-out before they retire. After all, their entire wealth may be tied up in the business. The owner buy-out model enables the entrepreneur to build up private assets with the aid of an investment company, and can be a first step towards arranging corporate succession and securing the business for the future.
HANNOVER Finanz has many years of experience in reorganization of the group of shareholders and the design of owner buy-out models.
Examples of a change of ownership (replacement) include technotrans AG and aleo solar AG. SPECTRAL Audio Möbel GmbH is an example of an owner buy-out model. Further examples can be found under Portfolio.