In developing the full expansion of an important Spanish multinational group dedicated to new technologies, it set forth to diversify its business by acquiring a Spanish family entity with strong national presence and excellent international prospects, taking advantage of the possibilities associated with synergies due to the distinctive and consolidated business of the family entity.
To this end, a preliminary undertaking of the corresponding Due Diligence was necessary in order to analyse the different options for the purchase (purchase of the shares of the Parent Company or purchase of the holdings of the object entity of interest – the Entity – given the corporate framework in which it found a large part of family assets on the part of the vendor), as well as the possible financing alternatives and, in this case, the guarantees to be executed in the face of a possible postponed payment to be deferred in time.
Dismissed the purchase of the shares of the Parent Company because it refers to a holding entity of assets, including between them the ownership of properties that the buyer was not interested in, they instead opted to acquire the Entity that was the root of the object business of interest. Nevertheless, bearing in mind that the Entity was relying upon two entities that were dedicated to procure part of the property finance of the sellers, an internal purchase was undertaken of the two small holding companies of assets compensating the debt that arose from that acquisition with others existing between the Entity and the vendors.
Additionally, as an alternative to the bank financing (which was difficult to obtain with reasonable terms during a period of full financial crisis), a postponed price was agreed to and to be deferred for 5 years, and secured with a bank guarantee and shares' security of the acquiring company, in order to reduce the buyer's financial costs given the figures of the operation.
After months of intense negotiations, they proceeded to the purchase of 100% of the holdings of the Entity, the vendors obtaining a substantial initial payment, and the purchasers to finance the purchase through the deferment of part of the purchase price, conceding a reasonable interest to the vendors and granting, at the same time, sufficient guarantees in order to facilitate the discount of the pending payments through factoring channels or similar financial products on the part of the vendors themselves.