Consultant supports the key transition
An management team seeking to take over its own firm is always a sensitive undertaking. Michael Bubendorf, of Ozean Brokerage & Shipping, and Hannes Caj, a partner with Zetra International, spoke about their experience in this field with the ITJ’s Christian Doepgen.
Mr Bubendorf, how did the general idea of a management buy-out come about for you in the first place?
MB: We – that’s long-standing owner Thomas Roesch and I –already had the idea when I joined Ozean Brokerage & Shipping in 2015. My job was to build new structures; Thomas focused on strategy.
What professional experience have you brought on board?
MB: Having completed my apprenticeship at Birkart I spent twelve years at M + R Spedag, where I also worked as the commercial manager of the firm’s Ugandan branch. Then I switched to the other side for two years, setting up a new transport department for the French company Alstom’s hydro sector.
How long did the transaction take?
HC: All in all, we accompanied the process as consultants from May 2018 through to April 2019 – so almost a whole year. This isn’t unusually long, because every MBO is complex.
How did you find each other?
MB: I sought recommendations and then asked the proposed service providers for offers. The professional approach in the answers varied a little. Then my partner in Ozean, Manuel Dalla Nora, a former cotton trader with a lot of experience in Africa who’s already been with Ozean for some time, and I met up with Zetra International in Basel. After the first meeting things were already clear to us.
What are main hurdles, Mr Caj?
HC: The manager finds himself in an unusual, paradoxical situation. While he’s trying to maximise sales and earnings, he’s simultaneously working towards a low purchase price for the company.
How did you resolve this contradiction?
HC: As a consultant one of my roles is to be the mediator for the purchase price, as well as determining the overall value. It should not be underestimated, for example, which non-operational funds are extracted out of the company, and which ones are left in. At the same time, the operational stability of the firm also has to be guaranteed.
How did the management team react?
MB: We were very happy! Both parties had overlooked some questions, whilst other aspects were underestimated, it’s true. Making use of a consultant’s experience and seeing how things are done in other industries made the process easier.
What steps are required in an MBO?
HC: First, an approximate purchase price, an initial transaction plan as well as the structure of the transaction are set down in a joint declaration of intent. At the same time, we compile the necessary documentation and audit reports in a dossier for the financing partners.
How long does this phase take?
MB: Three months was enough.
How did the financing go?
MB: Contrary to some opinions, our experiences with banks were good. Having a consultant as a partner made sense.
HC: We sent a dossier containing an evaluation of the company as well as a set of financing solutions to eight different institutions. The interest was very varied. We then entered into final negotiations with two banks.
Was the result right for you?
MB: Without the banks the MBO wouldn’t have been possible. In addition to the figures the teams were also convinced by our business plans.
What was the biggest challenging?
MB: The complexity of the transaction – we were still clarifying open issues literally up until the very last day.
HC: The significance of such a step should not be underestimated. An MBO is an absolutely unique opportunity for most managers.
What are this manager’s conclusions?
MB: Hannes’ consultancy support was really great. However, no MBO is conceivable without any advance outlays. We’re very grateful to Thomas Roesch, founder of Ozean Brokerage. He provided us with room for manoeuvre and introduced us to partners early on, thus enabling us to relaunch our new structure seamlessly.
What was it like providing consultancy services in the logistics industry?
HC: The down-to-earth approach in the sector is an advantage. The mix – the managers’ pragmatism, our attention to detail – was just right for me.