It is one of the most eye-catching deals of the new year. Vekoma Rides from Limburg - a world leader in the construction of roller coasters and known in the Netherlands as the company behind the Python in the Efteling - is now in the hands of the Japanese Sansei. When the roller coaster company announced the acquisition last month, a bottle of champagne was opened behind the scenes. With the closing of the transaction, a special acquisition process was concluded for the dealmakers.
"Probably one of the most lengthy deal-making processes I have experienced in my career," states JBR partner Caspar van der Geest, who has been involved in more than fifty deals since he started in the M&A world, including many international acquisitions. This is confirmed by Michiel Martin, partner at law and notary firm BarentsKrans: "The cultural differences between the Dutch and the Japanese were huge." This meant that a lot of time had to be invested - and sometimes unconventional means used - to bring the two parties together.
After consulting firm JBR was already engaged by Vekoma at the end of 2014 to assist in the development of its strategic plans, the firm was asked to help the roller coaster builder in its search for a suitable partner company. This process began over a year ago. The family business decided it was time to look for a new owner, as no succession was available within the family. When looking for a suitable candidate, great value was placed on a shared, long-term vision and the addition of knowledge: "Vekoma was looking for a company that offers a good fit for the long term and is not out for a 'quick buck'," says Van der Geest. "The additional, highly specialized nature of the business activities provided an additional challenge," Van der Geest said. Vekoma - which, in addition to the Python, also built many Disney roller coasters, such as Space Mountain, Big Thunder Mountain and Rock 'n' Rollercoaster - is one of only a handful of companies engaged in the development of high-performance roller coasters.
The search eventually brought JBR and Vekoma to Japan's Sansei. Founded in 1951, this publicly traded company designs, manufactures, installs and maintains attractions, including roller coasters, stage installations, elevators and other engineering products. With sales of €225 million and about 500 employees (2017), the company is almost one and a half times as large as Vekoma, which in 2016 - the most recent year for which the figures are known - with about 300 employees, turned over €153 million.
However, the acquisition process had only just begun when this suitable candidate was found. Van der Geest: "Compared to other takeover processes, this one required significantly more time for consultation and negotiation. Because we recognised from the start that there are cultural differences between a Japanese, listed company and a Dutch family business, we invested a lot of time in getting the Japanese employees acquainted with Vekoma. They wanted that too, they really wanted to be included in the process." From the early stages, law and notary firm BarentsKrans was also brought on board to assist Vekoma legally. Meanwhile, Sansei received takeover advice from BDA Partners and legal support from Paul Hastings, who has no Dutch office and therefore worked locally with NautaDutilh.
Just like Van der Geest, BarentsKrans CEO Martin experienced cultural differences during the process: "Everyone had to be present at the many meetings that took place. We are used to keeping meetings small, but they wanted the whole group, about forty people, together. We really had to take our time and get everyone involved." The many meetings involved much more than just the substantive negotiation of the deal. Van der Geest: "A lot of attention was paid to gaining trust and getting to know each other, which doesn't happen from behind a desk but by visiting regularly and having delegations come over to the Netherlands."
In this way the differences between the Limburg family business and the Japanese listed company could be bridged: "The management teams of Sansei and Vekoma got to know each other extensively so that everything was right at that level", says Van de Geest. During one of the group dinners the contrast between Dutch and Japanese customs was clearly illustrated. Van der Geest: "During the discussions, we spent a few days with everyone in a castle and ended with a dinner. We knew that table setting was very important, so we had thought about it carefully. However, there were no name signs. When the first people from Sansei entered the room, they stood there frozen, 'Where do I sit?'"
There was a congestion in the corridor, so the Dutch dealmakers had to act quickly: "Everyone was escorted to the right seat, so that the management sat together, as did the board and the deal teams." The strong sense of hierarchy reflected in this restraint played a role more often in the negotiation process, Martin explains: "It's very important to ask for a decision at the right level. Not everyone has an equal mandate."
Following the extensive preliminary process, the dealmakers flew once more to Osaka in Japan - Sansei's place of business - to finalise the transaction. "After the preparatory phase, we were able to act quickly at the end of the day. We drew up the terms sheet within one day and worked out the SPA (sales and purchase agreement) in Japan," says Van der Geest.
The agreement will safeguard the desired continuity at Vekoma. The agreement stipulates, for example, that no changes may be made in terms of strategy, management, employment conditions or location. This also means that the existing management team will remain intact. Makoto Nakagawa, the CEO of Sansei, will join the supervisory board, where he will complement the two current members. Vekoma will also continue to operate under its own name.
Together, Sansei and Vekoma are now the clear world market leader in roller coaster development. While Vekoma was already one of the world's leading and most innovative roller coaster builders, the acquisition offers new opportunities. Not only in Japan, but also in Southeast Asia and North America. "In Sansei, we find a reputable partner with equivalent standards and values, who can offer continuity to the company and take Vekoma even further," the supervisory board said.
Van der Geest and Martin look back on the acquisition process that preceded the successful deal with great satisfaction: "Thanks to our helicopter view from both offices, we were able to maintain a good overview of the negotiations and thus bring the process to a successful conclusion," says Martin. "We were able to get a good overview of the position of the group of dozens of people involved", adds Van der Geest. While there were differences between the buying and selling parties, the two also emphasize the professionalism on both sides of the negotiating table.
They are also very satisfied with the mutual cooperation. Martin: "This was the first transaction of this magnitude that BarentsKrans and JBR assisted in together and I experienced the cooperation as very pleasant." Van der Geest adds, "The combined expertise of our offices allowed us to offer broad support, put the right people forward and take care of many questions."
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