15.5.2025

We assisted MSc companies in ownership arrangements and generational transfer

MSc is a conglomerate consisting of multiple companies, specializing in electrical engineering. The main products of these companies are converters for electrical networks and auxiliary power unit converters for rail transport. Over the past 30 years, the company has supplied its products worldwide.

We assisted the company in generational transfer and ownership arrangements as it prepared for a new phase of growth.

Expanding the ownership base for a new growth phase

” Over the past 10–15 years, the companies have laid the groundwork for the current situation, maintaining steady revenue,” says Pekka Seppälä, managing director of MSc Electronics Oy. “Now we are preparing for growth and, at the same time, we have to consider the key personnel’s engagement and ownership strategy. Of course, there is also a need to plan for a controlled generational transfer.”

“At first, it felt difficult to find a competent law firm nearby that had undertaken similar projects and was available. We chose Lindblad, even though some of the team members were further away, since everything is handled remotely amidst the pandemic anyway,” Seppälä recounts the early stages of the project. “The questions I wanted to clarify were quite clear: what would be a purchase price that wouldn’t result in subsequent tax penalties, and what method should be used for the arrangements?”

Different options for ownership arrangements were explored and calculated

For each company, a generational transfer memorandum was prepared, outlining the fair value, tax consequences, and calculations for different transfer methods, including share purchase, gift-like transactions, and acquisition of own shares. The overall process for MSc proceeded through share purchase. “It seemed like the clearest option and suited both the generational transfer and engagement of other shareholders,” Seppälä summarizes.

The aim was to create a mutually motivating contract

“We drafted shareholder agreements for MSc’s various companies and updated their articles of association to align with the shareholder agreement,” explains Markku Lindblad, who led the team on Lindblad’s end. “Naturally, ongoing discussions with the owner were held regarding the content of the agreement and various options.”

“Collaboration with Lindblad’s team progressed smoothly and quickly. Working remotely was efficient from a time perspective. We also received competent assistance: the lawyer brought up aspects that we wouldn’t have considered ourselves, such as preparing for divorce situations and deaths,” Seppälä reflects. “Although we aimed to create a ‘soft’ agreement that would be motivating for both sides, we also wanted to ensure the company’s interests were protected in case of surprises.”

“A contract drafted by a lawyer brought credibility to the process internally as well. We wanted to send a message to the key personnel being retained that this is being done seriously and properly.”