Transcript Dia 1

When I’m 64
InterDirect Network
sept 2010
Georges Van Nevel
Kasteellaan 160 | B-9000 Gent | BE 0426.851.666 | RPR Gent | TEL. +32 9 224 43 60 | FAX +32 9 224 01 69 | www.dvn.be | [email protected]
Succession planning
or
the next generation
Kasteellaan 160 | B-9000 Gent | BE 0426.851.666 | RPR Gent | TEL. +32 9 224 43 60 | FAX +32 9 224 01 69 | www.dvn.be | [email protected]
Background
● Some day, we will all retire.
● You think you’ve worked enough.
Key issue
● What to do?
Selling
● To a third party
● To the kids
● To the other management members
Trends
● Sector fragmentation
◦ Smaller agencies
◦ Importance of freelance groups
● The role of procurement and financial people:
◦ Fee and price pressure
Trends
● Marketing is becoming increasingly marginalised
in big companies. Even more in smaller countries.
● Networks are concentrating on BRIC-countries
and on-line.
● China: they have the tangible stuff, but they
don’t have the brands.
● Converting communication into a commodity.
Split-up of the jobs.
Trends
● Digital/social media are our core business.
● Software as a commodity tool in the digital world.
● Private equity offers other opportunities.
Conclusion
• It’s a new world.
Selling to a third party
● Networks
● Private equity
● Private individuals as sleeping partners
Selling to the kids
● Do they have the know-how and the
skills?
● Integration within the existing
management team.
● Your other kids.
Selling to the management team
● Are they willing to invest?
● Do they have the money or the capital sources?
New trend
● A mix of shareholders.
● The previous owner becomes sleeping partner.
● Other parties concerned become shareholder (eg
printer, software developer, holding, …)
Rating methods
● Based on historical performances.
● Discounted Cash Flow method (DCF).
● Earn out:
◦ Based on growth
◦ 3 – 5 years
◦ Multiplier influenced by certain criteria
● Importance of continuity
● Value ≠ price
Model
● Old situation
Owner 1
Owner 2
60%
40%
Agency x
Selling price: 1.000
Owner 1: 600
Owner 2: 400
Model
● New situation alternative 1
Owner 2
60%
Owner 3
20%
NewCo
100%
Agency x
Owner 4
20%
Model
● New situation alternative 2
Owner 2
60%
Owner 3
20%
Agency x
Owner 4
20%
New financial situation
● Capital: 400
◦ Owner 2: 240
◦ Owner 3: 80
◦ Owner 4: 80
● Bank loans: 600
Trend
● The way it used to be:
◦ 20/80
● Nowadays:
◦ 30/70
◦ 40/60
Payback period
● 5 – 7 years
My interest is in the future,
because I’m going to spend
the rest of my life there
Thank you