Merger of two metal processing plants
We helped finalize the merger of two family companies from Katowice. We shortened the negotiation process by 3 weeks, avoiding disputes over the valuation of older-type machines.
Two companies from Katowice, operating in the same industry, were looking for a way to grow together. Instead of destructive competition, they chose a merger, which we conducted without unnecessary adjectives or fluff.
The challenge
The owners of both plants wanted to merge, but the process stalled at the asset valuation stage. The bone of contention was 34 machines — older lathes and milling machines that each party valued differently. The difference in expectations was 240,000 PLN, which blocked talks for over 4 months. Frustration was growing in the halls, and employees were starting to look for other jobs, fearing for the future of the plants.
Our approach
We entered the game with a clean slate and hard data from the floor. Instead of theoretical sheets, we did a physical audit of every device. We invited an expert who specializes in industrial machines from 2012-2018. To be honest, at the beginning, one of the owners wanted to walk out of negotiations after an hour, but he was calmed by our calculation of the real profit after the merger. We focused on mathematics, not sentiments for the first machines.
The solution
We prepared a new LLC structure with a 47/53 share distribution. We developed a repayment schedule for the remaining difference in cash, spread over 14 months, which allowed the new company to maintain financial liquidity. All documentation was prepared so that both plants could immediately merge production schedules and jointly buy raw materials at lower prices from suppliers.
Results
The merger allowed for the reduction of administrative costs and better utilization of the production capacities of both halls under one brand.
Timeline
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July 2023Analysis of financial documentation and asset lists of both plants.
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August 2023Verification of the technical condition of machines and operational audit on the floor.
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September 2023Determining the share structure and signing documents at the notary.
"We were most afraid that our older machines would be valued at scrap prices. Silesia Capital Advisors showed hard data that convinced the other side in two evenings."