FOCUS Investment Banking is part of M&A Worldwide (MAWW), an established international association of 37 M&A boutiques working together to facilitate cross-border activities such as mergers, acquisitions, corporate finance projects, and consulting. FOCUS has been a part of this network since 2005 and has completed 31 cross-border projects with its partners in this network.
One of the partners with which FOCUS has worked closely is Aeternus Corporate Finance. Headquartered right outside of Amsterdam in Venlo, the Netherlands, Aeternus is an independent investment bank, like FOCUS, that provides M&A and corporate finance advisory services to mid-sized companies in the Netherlands and throughout Europe.
FOCUS and Aeternus have undertaken a special effort to understand their clients’ needs in the other company’s respective country. The business environments of both the Netherlands and the US are similar in many aspects, including the importance of several key industries.
Major industries in the Netherlands include: *
AGRICULTURE AND FOOD: The Netherlands is one of the world's largest exporters of agricultural and food products, thanks to its innovative agricultural technology. Out of the top 40 food and drinks companies in the world, 12 have R&D centers located in the Netherlands. The total value of Dutch agricultural exports was $92 billion in 2015 (about 12 percent of GDP).
CHEMICALS: In 2014, Dutch chemical exports were valued at some $85 billion (about 11 percent of GDP). The Netherlands hosts offices for 16 of the world’s top 25 chemical companies, including BASF, Akzo Nobel, Dow Chemical, SABIC, and Shell.
ENERGY: The Netherlands has a strong presence in the areas of renewable energy and natural energy. The country is a major natural gas producer and is working to increase its production of energy from renewable sources such as wind and solar. Vitol Holding, a $223 billion company headquartered in Rotterdam, the Netherlands, distributes fuel and energy products worldwide.
HIGH-TECH (Information Technology): The export value from the High-Tech Systems and Materials (HTSM) sector was $50 billion (about 6.5 percent of GDP). Much of the high-tech sector is concentrated in the region of Eindhoven. Aeternus has an office in Eindhoven where they maintain relationships with several HTSM companies.
LIFE SCIENCES AND HEALTH: The Netherlands ranks eighth worldwide in patent applications for medical technology and second in patent applications for biotechnology. Over the last few years, the industry has annually exported around $41 billion in total goods and services.
LOGISTICS: The Netherlands is labeled the 'Gateway to Europe' due to the Port of Rotterdam, Europe's largest port and fourth-largest worldwide, and Amsterdam Airport Schiphol, Europe’s fourth largest airport.
After analyzing the industries listed above in the US and the Netherlands, FOCUS and Aeternus identified international business opportunities in the Agriculture and Food (specifically the craft beer brewing market) and the Logistics industries. These business opportunities allow FOCUS and Aeternus to collaborate, using the benefits of being part of an international association such as MAWW to advise prospective clients on strategic initiatives.
According to a Forbes report, “Best Countries for Business,” in 2015 the Netherlands ranked ninth in the world among best countries for conducting business. The ranking published data from multiple organizations and graded 144 nations on 11 different factors including property rights, taxes, technology, corruption, personal freedom, financial freedom, trade, bureaucratic policies, investor protection, and stock market performance.
The consulting firm B2EU specializes in assisting U.S.-based companies expand their operations in Europe by establishing an office/business in the Netherlands due to its pro-business environment. B2EU notes that U.S. companies consider expanding to Europe through the Netherlands because the Netherlands features:
- A central location in the continent and first-rate logistics businesses to execute cross-border business;
- An affluent, pro-U.S. population with a great respect for U.S. business and the highest level of English language fluency in Europe;
- An innovative business community that excels in industries prevalent in the U.S., including information technology, healthcare, food and beverage, and manufacturing.
Since 2013, there have been 188 instances of a Netherlands company acquiring, merging with, or investing in a U.S. entity. On the other side, in the same time-period, there have been 346 transactions involving a U.S.-based company acquiring, merging with, or investing in a Netherlands-based company. Several examples of cross-border transactions between companies in the Netherlands and companies in the U.S. are listed in the chart accompanying this article.
Table 1: International Transactions and Investments Between Companies Located in the US and the Netherlands
|Date||Transaction Type||Target/Issuer Name||Business Description (Target)||Transaction Value ($, millions)||Buyer/Investor Name||Business Description (Acquirer)||Industry Sector|
|7/20/16||Merger/ Acquisition||Wellcentive, Inc.||Wellcentive, Inc. provides cloud-based population health management and data analytics solutions for physicians. The company was founded in 2005 and is based in Alpharetta, Georgia.||(Undisclosed)||Koninklijke Philips N.V.||Koninklijke Philips N.V. offers diagnostic imaging solutions; integrated clinical solutions; patient monitoring & analytics; therapeutic care products; respiratory monitoring devices; advanced healthcare IT; and electronic medical record systems. The company was founded in 1891 and is based in Amsterdam, the Netherlands.||Healthcare|
|1/18/16||Merger/ Acquisition||Ushers Machine & Tool Co Inc.||Ushers Machine & Tool Co Inc. offers manufacturing, welding, and fabrication services; multi-axis CNC machining, turning, milling, and gun drilling; and CAD/CAM and CNC programming. The company was founded in 1946 and is based in Round Lake, New York.||(Undisclosed)||Aalberts Industries N.V.||Aalberts Industries N.V. operates through four segments: Building Installations (systems and valves to control water or gas), Climate Control (hydronic systems for heating & cooling), Industrial Controls (regulation systems), and Industrial Services (surface and heat treatment solutions). The company was founded in 1975 and is based in Langbroek, the Netherlands.||Industrials|
|9/8/15||Merger/ Acquisition||Lagunitas Brewing Company||Lagunitas Brewing Company produces and markets beer and ale in the United States. The company was founded in 1993 and is based in Petaluma, California.||(Undisclosed; Heineken acquired a 50% stake in Lagunitas)||Heineken N.V.||Heineken N.V. engages in brewing and selling beer and other beverages worldwide. It offers its products under the Heineken, Amstel, Desperados, Sol, Strongbow Apple Ciders, and Affligem brand names, as well as under various regional brands. The company was founded in 1864 and is based in Amsterdam, the Netherlands.||Consumer Staples|
|12/18/13||Merger/ Acquisition||Wabash Technologies Inc.||Wabash Technologies, Inc. designs, manufactures, and supplies electromechanical components that serve the automotive, heavy vehicle, recreational, marine, industrial, agriculture, construction, off-highway, and small engine markets. The company was founded in 1946 and is based in Huntington, Indiana.||60||Sensata Technologies Holding N.V.||Sensata Technologies Holding N.V. operates in two segments: Performance Sensing (pressure, temperature, speed, and position sensors for automobiles) and Sensing Solutions (control products, solid state relays, rotary position sensors, precision switches). The company was founded in 1916 and is based in Almelo, the Netherlands.||Information Technology|
|9/6/16||Private Placement||MP Objects BV||MP Objects BV provides Software-as-a-Service (SaaS) services for supply chain orchestration, order management, inventory management, and transport management. The company was founded in 2000 and is based in Rotterdam, the Netherlands.||10||Updata Partners||Updata Partners is a private equity firm that invests in growth stage companies in the IT sector with a focus on software, mobile applications, platforms, and technology-enabled business services. The company was founded in 1998 and is based in Washington, DC.||Information Technology|
|4/6/15||Private Placement||uniQure N.V.||uniQure N.V. is a biopharmaceutical company that is currently developing gene therapies for the treatment of Hemophilia B, Parkinson's Disease, Huntington's Disease, and Hemophilia A. The company was founded in 1998 and is based in Amsterdam, the Netherlands.||76.21||Bristol-Myers Squibb Company||Bristol-Myers Squibb Company discovers, develops, licenses, manufactures, and distributes biopharmaceutical products. It offers drug treatment therapies in the areas of HIV, oncology, immunology, cardiology, and neurology. The company was founded in 1887 and is based in New York, New York.||Healthcare|
|4/18/16||Merger/ Acquisition||GreenPeak Technologies BV||GreenPeak Technologies BV, a semiconductor company, develops ultra-low power wireless data communication controller chips for home applications and consumer electronics. The company was founded in 2004 and is based in Utrecht, the Netherlands.||(Undisclosed)||Qorvo, Inc.||Qorvo, Inc. provides technologies and radio frequency (RF) solutions for mobile, infrastructure, defense, and aerospace applications. It operates through Mobile Products (MP) and Infrastructure and Defense Products (IDP) segments. The company was founded in 2013 and is based in Greensboro, North Carolina.||Information Technology|
Regarding its partnership with Aeternus and the larger M&A Worldwide network, FOCUS Investment Banking is prepared to help its clients conduct business in Europe. Whether the objective is to expand operations or assist in forming strategic partnerships, FOCUS can utilize its network in Europe to help its clients achieve their business goals.
The January 2017 issue of the FOCUS newsletter will include a report on my observations and experiences after attending the November 2016 MAWW Convention in New Delhi, India.