19.4.2022
Transporting Business Sold by Auction
Attorneys Lindblad & Co Ltd. assisted Transport O Valkonen Ltd with finding a buyer for its transport business and, in the end, to close the deal with Ylärakkola Logistics Ltd.
Right Time to Sell the Business
Transport O Valkonen Ltd, based in South Karelia was in a difficult situation in early 2020 after its founder and CEO Osmo Valkonen passed away. His widow, Milla Valkonen, took over as the CEO of the company, even if her background was elsewhere. With the regard of Osmo Valkonen’s estate Milla Valkonen and the children held the power belonging to the owner of the company and made the decisions on selling the business.
It was clear from the beginning that the company had to be sold. Despite promising beginnings, the sale just never took off.
”My husband had named an accountant who could help us with the aspects of selling the business, but they pulled out. In the spring and summer we negotiated with some local potential buyers, but eventually the talks collapsed. In the fall of 2020 I called Tarmo Soronen, the project manager of the South Karelia Entrepreneur Association, and he suggested that I contacted Attorneys Lindblad & Co,” Milla Valkonen explains. Cooperation to secure the sale of the business was methodically started from the first meeting.
”I went to see Markku Lindblad and explained our situation. We agreed with Lindblad that he would handle the sale of business. I, on the other hand, contacted Stora Enso plc, our important partner and informed them about our plans,” Valkonen says.
Finding a Buyer and Securing the Asset Sale
The first step in selling the business was to gather documentation on the profile of the company, its contracts and other things that could affect the sale. The value of the company had already been determined for the estate inventory and that value was used as the basis in the sale process.
Next, Lindblad began examining prospective buyer candidates. The client knew multiple competing businesses, and suitable buyer candidates were also searched from the public registers. A list of the potential buyers was made based on certain criteria.
Potential buyers were approached via mail and they were asked to make an acquisition offer. This ensured a good number of contacts and also multiple offers. Out of those who made an offer the most suitable ones were selected and then their representatives were toured at the O Valkonen’s facilities in Imatra. Simultaneously non-disclosure and non-solicitation agreements were made with these companies.
Even more insight on O Valkonen was offered to the buyer candidates via a virtual data room. The VDR included a large amount of documentation with which the prospective buyers were able to conduct due diligence. The virtual data room was set up in the way that the seller was able to see which documents each buyer had seen. Additional documentation was added at request. After conducting due diligence the buyers were given a chance to raise their offers.
The next round of talks was done at a video meeting where bill of sale drafts were reviewed with the potential buyers. One candidate that had survived this far was Ylärakkola Logistics Ltd, which eventually was selected by the seller to acquire the company. Before closing the deal, it was agreed how the seller’s contracts would transfer to the buyer. Finally, the sale was closed with attention paid to all the details provided in the previous steps.
The bill of asset sale was signed between O Valkonen and Ylärakkola Logiscts on April 1, 2021.
The Clear Process Toward a Successful Acquisition
Milla Valkonen tells that she is particularly happy with Linblad’s punctuality and systematic approach to advance the sale process.
”At every moment it was clear we would go forward and all things had set schedules with dates and times. The process had clear goals and that’s why it went on so well. Interactions were always clear. The virtual data room worked well as a means of sharing information and it benefited us as well,” Valkonen says.
”It was already high time to sell the company and it succeeded. Even if the asset sale didn’t include the storage facility and some equipment which we’ll have to sell separately, it was important to get the business activities transferred. Three of our employees transferred to Ylärakkola and they were also able to continue cooperation with Stora Enso.”
In addition, Valkonen positively reviews Markku Lindblad’s professionalism and skills his willingness to share them to his client.
”Lindblad has a lot of experience in M&As and he gave me good advice, what things I should pay attention to, in particular. It was very beneficial to me. When there were so many potential buyers it was challenging to focus on realistic offers only. Lindblad advised me to consider certain types of offers and rejects others.
All in all, the service by Lindblad was a very positive experience and I couldn’t have managed without. Taxation and legal things are difficult and must be carefully taken in account when selling a business. With Lindblad the process became a lot easier”, says Valkonen.