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Vrep Dekom Claudiasimchenfotografie 54
Vrep Dekom Claudiasimchenfotografie 54

Changing the
shareholder structure:
risks and opportunities.

A change in the shareholder structure often heralds a new era. However, such a change can also significantly weaken both a company’s ability to act and its financial strength. Both situations can be avoided by choosing the right financing solution.

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The benefits of partnering with VR Equitypartner

A flexible partner

To ensure that your company (and your investment) are not adversely affected by shareholder changes, we can offer you a variety of options depending on your needs: an equity interest, mezzanine financing or syndicated equity and debt.

We have your company’s
interests at heart

We can help you and your company to navigate shareholder changes without a negative impact on day-to-day operations. We can give you access to our network of experienced executives and secure financial headroom for your company.

Realizing growth
together

We can support your plans for growth both financially and strategically, drawing on the extensive experience gained from many years of partnering with growing businesses. Should you wish, our team of experienced professionals can also assist in operational matters.

Changes in shareholder structure –
what you need to know

01

Why the change?

The reasons why shareholders dispose of holdings are very varied:

02

Who should succeed the departing shareholder?

First off, the exiting shareholder needs to find a successor – and buyer – for their holding. This could be the company per se – in that it pays out the shareholder and cancels the shares.

03

What are the potential consequences of a change in shareholder structure?

Changes to the shareholder structure can impact business operations. When active shareholders exit, this often creates a hole at management level.

The door is opened to a new shareholder …

In many instances, a new shareholder follows – either a private investor, an operating company or a financial investor. With any change in the shareholder structure, the existing shareholders should always try to base their choice on factors that reflect the company’s best interests.

With this in mind, the following four aspects should be considered,
among other things:

  • whether the investor can consider a minority shareholding
  • if there is a common understanding of strategy/future development?
  • ability to support the plans for growth – through a network of contacts, own know-how, financial resources, etc.
  • possible negative consequences of a new shareholder – for example, loss of reputation, incompatibility with corporate culture or benefits for competitors

The last aspect, in particular, causes some shareholders to shrink back from considering an operating business (irrespective of antitrust issues).
There are usually grave concerns that important know-how will be transferred away or that the company will be swallowed up.

Private investors, on the other hand, are more likely
to be an option for smaller businesses or minority holdings, given their limited financial resources – for the most part, at least.

Are increasingly seen as an attractive option when companies are faced with changes to the shareholder base (see text Company Succession). However, it is important to find the right partner (see text Equity Investors: the selection criteria) – VR Equitypartner is one of the few investors that also considers minority shareholdings.

Changes to shareholder structure – our conclusion:

A change in ownership offers a company the opportunity to reposition itself for growth and stability in the future. A minority shareholding held by VR Equitypartner can give your company the right performance-oriented support.