Interview with Björn Voigt about the Infraneo deal
Can you tell me a bit more about your role and how you started working with this group? What were the challenges of finding a target for them?
We have such a good relationship with our M&A Worldwide French partners, Linkers that one day Didier Busquet, who also plays a leading role in M&A Worldwide, sent me an interesting email. He had spoken to a private equity company in Paris, and they owned a highly specialised engineering company Infraneo, that wanted to grow in Germany, but they hadn’t been able to proceed. He also said that they already had an M&A company in place who worked for them in Germany. I spoke to my business partner Kai Barth about the type of company they were looking for. Kai had recently seen a possible target in the electronics engineering sector that seemed a good fit.
We entered into a research contract initially with them. This was the first result and meant we had a real marketplace within M&A Worldwide, exchanging ideas about a company that was looking for a purchaser. We immediately began talking to the owner of Infraneo and told them that we were well placed and that we had a multilingual team. The negotiations were conducted in German, English and French, an amazing situation that we hadn’t experienced to this extent before. Based on all this, Infraneo gave us a mandate and terminated their relationship with their current M&A company. We never go into a market if there is another mandate in place.
We have a French desk at Active with three fluent French speakers who became the advisors to Sparring capital. They are the private equity owner of Infraneo and all discussions were in French so they could express themselves as they wanted. Once we had this mandate, we approached the German company that was for sale and this was the beginning of a story that lasted for nine months.
The first challenge was that while the seller, being married to a French person, spoke fluent French, his advisor was German who only spoke English. We had this strange situation that in every single communication, Kai and myself were present and both of us helped with the instant translation between German and French which was then translated into English for the advisor.
The second challenge was it was a very highly specialised engineering talk. I could extend my knowledge of terms by at least 15% being highly fluent in technical speak. We were talking about high tension engineering.
Unfortunately, we did not know that they double negotiated parallel to us with another German company, a large one, and after six weeks of work, we were thrown out, and they declared they had a buyer after, we had submitted a non-binding offer.
Fortunately for us, we remained calm about things, kept up our contact with them and discovered things about the German buyer.
We discovered that it was a large company and that they tried to artificially push the price down. We already had a non-binding offer on the table at a good price. The argument was that a foreign company needs to retain every single person in the German organisation for sale. There is no scope for taking peoples jobs away, or by streamlining the organisation. We had a very good argument in our favour – the price, the takeover of personnel and a bright future for the company. Six weeks later we were back in the chair and a real chance to get it done as the alternative buy was not good.
Another interesting aspect is that we were able to provide our French client with a specialised company in Germany, an office with 15 French and German lawyers, qualified in both jurisdictions who were also able to do the contracts in English, which is a huge saving of time and created trust. We had the same for the commercial, tax and financial due diligence. What we offer to our non-German clients is specialized legal and consultancy services in two or three languages, which helps enormously to create trust and understanding for both sides. We were extremely grateful to Linkers who helped us with that. Although we did the deal ourselves, we try to give them opportunities on possible deals which come from Germany, France.
How do you think M&A worldwide helped in achieving this deal?
It’s really the trust and the friendship between the members. And it’s not only Linkers, we are close to every member within M&A worldwide. The special bond means that we trust each other, we know each other. This makes it very easy to pass information in confidence to try to get the deal done cross-border. It’s essential. And our network allows us to create these relationships. It really was just an email that started this process. We have an interest here in our country? Could you have a look please? Is there any opportunity? This is how we work? And this makes it very efficient and very fruitful.
It was, I have the possibility to do a deal which we then did. In a network where everybody knows each other, and where we have ethics, which I call ‘deals within a family’, you solve this problem, because you always think of the next deal to be done. Cooperation and never arguing about minor things makes it fruitful. It is easy and pleasant too.
We meet regularly with our neighbouring M&A Worldwide members as we understand that this is the best way to build relationships and earn trust. The Conventions are also important as we get to spend time face-to-face which is key in generating more business for ourselves and the network.
How do you think this deal could lead to other deals?
We think that Sparring capital private equity want to continue to grow. We know their portfolio, which is not only engineering, we know their other sectors of interest. So now, when we have offers from the market, we can contact them directly. We now know them very well through this years’ negotiations, so they are included in our circle of potential investors when appropriate. We are following their next expansion plans in Germany, Austria and Switzerland (German speaking Switzerland) because they want to grow. That’s the identity of a private equity group – growth, acquisitions and sales and they know our working methods and we know their people and they know our people, meaning myself and Kai Barth. This we feel, is the basis for other deals.
For more information on this deal, please click here.
Thank you Bjorn Voigt for sharing with us the experience on this done deal.