“Every time I get an e-mail from KBS, I get a little excited!”

Finding the ideal acquirer for a client is always gratifying, but when that buyer cements the relationship by entering into further deals with KBS it’s even more fulfilling. Swedish industrial group Teqnion have added nine companies to their portfolio since 2023 with our help – Daniel Zhang, their CXO, explains why they keep coming back for more…

Selling companies is not like selling coffee or cakes, at least not on the face of it.

Unlike your typical high street café or bakery, you don’t tend to see the same faces every Saturday morning, those loyal customers who know and trust the wares you have available.

For most business owners, selling a company is a one-and-done event. Acquiring, on the other hand, can be different – but even at KBS, where we sell more companies than any other adviser in the UK and Europe, you still wouldn’t anticipate the kind of familiarity with buyers that a thriving local shopkeeper might expect.

However, Teqnion is a different proposition. The Swedish industrial group has found the companies on offer with KBS to be every bit as appealing as a tasty cinnamon croissant and a frothy chocolate-sprinkled cappuccino – and they keep coming back for more.

Since May 2023, nine companies have been acquired by Teqnion in which KBS has served as sell-side adviser. All of them have fitted perfectly into the acquisition model operated by the group based in Solna, just outside the centre of Stockholm, the Swedish capital.

Teqnion, in their own words, are interested in robust industrial companies with good profitability and sound history. They invest in people, strong entrepreneurs who are passionate about their projects. “Commitment, attitude and will are just as important as product design and market share,” they say.

Then, under their long-term ownership, it’s all about taking the company to the next level, for they have no exit strategy themselves. The subsidiaries are run by competent managers who, together with their employees, are driven to constantly develop the companies and become more customer-oriented.

Since acquiring Stanwell Group in May 2023, Teqnion have returned to KBS eight more times to add Surge Protection Devices, Nubis Solutions, Avelair, UK Lanyard Makers, Awarded 2U, Merridale, Norlin Polymers and Birkett Bogmats to their growing portfolio.

The triangular structure comprising company shareholders, Teqnion and KBS is clearly built on very secure foundations. And – revisiting the bakery theme for a moment – just to put the icing on the cake, Teqnion are excellent to work with: proactive, approachable, open, friendly and helpful!

We asked Daniel Zhang, Teqnion’s CXO, to provide an insight into the successful collaboration with KBS which continues to be so rewarding for UK company owners.

Hi Daniel. Please tell us how you became aware of the opportunity for the first company you bought through KBS (Stanwell). What convinced you to go ahead with the acquisition?

We were very new to acquiring companies in the UK, so I found a couple of platforms that showed potential business sales. Through a case on that platform I got in contact with Fabio Rambelli at KBS, who later introduced me to Stanwell. What made me want to pull the trigger on Stanwell? Apart from the great financials, the history and an easy-to-love business model was the fact the vendors seemed to be really wonderful and trustworthy people (which they have proven since as well). Additionally, I got a very good feeling for Fabio that from the start showed great professionalism in a combination of being pragmatic, flexible, transparent and a good human being.

What were the factors during that first transaction that made you think you’d like to do business with us again?

I knew after that deal that we would do more deals together, which of course we have. Some sell-side advisers think their role is to be like Leonardo Di Caprio’s character in Wolf of Wall Street – trying to oversell certain aspects and sometime even trying to hide some. Fabio was not like that at all. It felt much more like matchmaking, which is the approach we like. It felt that Fabio really cared about the vendors and that they would be happy and get what they wanted, rather than seeing them as an asset you could sell and make commission from. But don’t get me wrong, he is also a very tough negotiator!

How impressed are you with the range of companies available to acquire through KBS?

Receiving information, and slowly widening my own circle of competence, is a great way of being able to buy different types of business going forward, and of getting even better at buying the right business. Some of the businesses we have acquired have absolutely been companies I wasn’t looking for, because I didn’t know they could be as good as they were before you sent me the material. Every time I get an e-mail from KBS, I get a little excited!

What would you describe as the key qualities offered by the KBS team during a transaction process?

I think everyone I have interreacted with at KBS is different. But overall, my impression with the KBS people is that they feel authentic and that they are ‘real people’ i.e. not trying to fulfil a specific role or follow a strict process or template. Rather, my feeling is that the deal leaders I have been through processes with are very understanding of the vendors’ feelings and they try to find a way to get the deal to work.

Have you ever encountered any difficulties during a transaction process which KBS has found a solution for?

I think every transaction process has its own challenges. But one thing that is always there is the emotions – and potential cold feet – in order to get it over the finish line. The question ‘are these guys trustworthy?’ in relation to Teqnion is probably the most important – without that, money doesn’t matter. Will they actually pay what they promise? Will they handle the company as they have promised? Do they have the capabilities to support my baby when it comes to it? etc.

I believe KBS has been of great help when it comes to addressing those questions and feelings because they have their own personal experience dealing with Teqnion. I’m not saying we are perfect, but I think KBS explaining to the vendor the ‘quirkiness’ Teqnion possesses is very helpful for both the vendor and us – it gives the opportunity to the vendor to decide with a fuller picture, whilst we never want to do a deal if we don’t believe we fit well together.

Finally, what would you say are the biggest positives of working with KBS from the perspective of a company owner seeking investment, and from a buyer’s point of view?

My feeling is that from a vendor’s perspective, KBS are very honest, have a great network and can get deals done. I know there are many advisers out there that promise very high price tags for companies, which usually comes with high adviser fees as well. That usually ends with disappointment for everyone as the company never gets sold, even though a lot of time and energy has been put into it. The people I have experience with at KBS feels like they would rather under-promise and over-deliver. At the same time, it feels like they really try to recommend the best for the vendor. I respect that a lot.

As a buyer, we are fast approaching 10 companies acquired through KBS. For me, it is really the breadth of cases, the trustworthiness and flexibility of the advisers, combined with that I (and the vendor) always have one single contact throughout the whole process – not being bounced between a team.

Are you seeking an exit from your company, or investment to boost its trajectory? Call us on 0161 258 0118 or contact us in confidence through www.kbscorporate.com.