A large company had founded an internal deep-tech start-up in Germany years ago and now wanted to sell it due to a strategy change. We quickly identified a strategic buyer but the company itself was still a start-up from the NAFTA region. They did not yet have any activities in Germany.
The buyer wanted to pay for the takeover partly with its own shares. However, the last valuation was some time ago – which made intensive negotiations on the subject of valuation necessary. On the one hand, the valuation of ‘our’ start-up had to be moderated and, on the other hand, a current valuation of the buyer had to be carried out.
At the same time, an extensive carve-out had to be orchestrated, as the ties between the start-up and the parent company were more severe than initially thought. In particular, the employees had to be transferred in compliance with German law – which sometimes led to intensive discussions with the Anglo-Saxon buyer. The transfer of the IP from the corporate to the buyer was not without emotion – which took considerably more time, as some parties within the seller organization were worried about strategically closing doors for the market.
After a good 4 months of intensive work, signing was accomplished and a few weeks later the deal was closed.
Conclusion: Even corporations can sell internal start-ups at a fair value if they are prepared to accept part of the sale price in form of shares to another start-up.
