Are you considering selling your company to a foreign party? Then be sure to choose an acquisition advisor with a strong international network and a keen awareness of cultural differences, advise Gregory Tzanakakis (Advior International) and Ferdi Kramer (Rembrandt M\&A, the Dutch partner of Advior International).
If your advisor can reach foreign parties through their network, it increases the value of your business—even if you ultimately sell to a domestic buyer.
Ready to Sell Your Business?
As a Dutch entrepreneur, you might first look at potential buyers within your own country. You know the market, and negotiating is often easier with a party that speaks the same language. However, by doing so, you might be selling yourself short, emphasizes Gregory Tzanakakis, Managing Director at Advior International. “The world has become highly globalized over the past decades.”
Increasing Value
That’s why, according to Tzanakakis, it’s crucial for entrepreneurs planning to sell to choose an acquisition advisor with a strong international network. “If your advisor can reach foreign parties through their network, it increases the value of your business—even if you ultimately sell to a domestic buyer.”
Aggressive Bidding
Tzanakakis points to the growing number of American investors entering the European market. “These parties tend to be highly competitive and often bid aggressively against rivals, which can be beneficial for pricing. Moreover, the strong dollar makes European companies more attractive to American investors. As a selling entrepreneur, you can leverage this advantage.”
Gaining Market Share
Investors look for growth opportunities abroad when there is limited room for expansion in their home country, says Tzanakakis. “Acquiring a foreign company can be a way to quickly gain market share or rapidly scale up in a specific technology. Companies are often willing to pay more for fast growth in a new market. That’s why you should seek an acquisition advisor with insight into foreign investors who might be interested in your business.”
Increasing Interest
The days when investors only looked across neighboring borders are over, confirms Ferdi Kramer from Rembrandt M&A. “At our firm, we regularly see transactions between the Netherlands and other European countries such as Belgium, Germany, the United Kingdom, Denmark, Sweden, Italy, and Spain. American investors also show strong interest in the Dutch market. This is also true for China, where serious buyers were rare until about ten to twenty years ago.”
Cultural Differences
Cultural differences play a significant role in negotiations with foreign parties, Kramer emphasizes. “For example, during a transaction with an Italian negotiator, he literally walked away from the table seven times. An advisor must be able to see through this theater and understand that it’s part of the Italian negotiation culture.”
“Some countries don’t engage in much negotiation. Buyers present a final offer, and negotiating further is considered inappropriate. If you’re unaware of this, a promising deal can still fall through.”
Precisely, the individual branches of these kinds of firms typically operate quite independently from one another and often have mainly a local footprint.
Dutch Directness
Knowledge of cultural differences is essential, Tzanakakis also emphasizes. “This is crucial. Between the Netherlands and culturally similar countries like Germany, the US, and Scandinavian countries, things usually go smoothly. But, for example, with Belgium, the cultural differences are greater than you might think. The direct Dutch approach often backfires there.” The Belgian business world is different, Kramer adds. “Opening an office in Brussels or Antwerp doesn’t automatically grant access to relevant networks. Building meaningful relationships takes years. This also applies to countries like Germany, Italy, and Spain. The right networks are crucial.”
Laws and Regulations
Furthermore, laws and regulations in other countries often differ, Kramer continues. “Look for an advisor who is familiar with these. Certain terms can also be interpreted differently. Insufficient knowledge can make it difficult to close deals. Knowledge of the local market is essential.”
International Experience
Seek an acquisition advisor with relevant international experience, Tzanakakis stresses. “An advisor with a large international network and a good understanding of intercultural communication will always be an advantage for you as a selling entrepreneur.”