Beiträge

In the case of a family business that is about to be passed on to the next generation, again I would like to offer you an alternative perspective that may in fact be much more effective in protecting the financial security of the next generation/s. For this to work, it would require that mentally you go from being a “family business” to a “business family”. A family business can easily become the identity of the family and it’s members and for that reason it may be very difficult for the family members to separate from such a business. Also in such a business, it may have been established long ago that the children will run the business from a certain age or point in their education, but what happens if when the children grow up they develop or discover completely different interests?

Consider this solution. What if the family agreed to sell the business, for the maximum profit, and chose to invest the proceeds in business ideas that the next generation are passionate about? Imagine the possibilities. This could transform a family business into what I call a “Business Family”.

Another benefit of this shift in mindset is that it moves the family’s “eggs” from the proverbial one basket into several baskets (different businesses and potentially different industries), thereby spreading the risk and creating more financial stability for the holding business and therefore the family. In a way, having one business is similar to having one client.

Here is an example:

This real life story below demonstrates two important things:

1) An example of selling the current family business and investing the funds into the new business opportunities of the future, and

2) An example of a family business turning into a Business Family

Jacobs Coffee is a brand of coffee that was started by Johann Jacobs in 1895 in Germany, and is today marketed in Europe by Jacobs Douwe Egberts.

It was a family run business, and under the direction of Klaus Johann Jacobs, who took over the company in 1970, Jacobs expanded into other fields. It merged with the Swiss chocolate company Interfood in 1982 to form Jacobs Suchard, and bought the American Brach’s Candy in 1987, among other acquisitions. In 1990, most of Jacobs Suchard was sold to Kraft Foods.

Today the Jacobs family is one of the wealthiest German families with an estimated net worth of over 4 billion euros. The family’s investment company, Jacobs Holding, is an active private equity investor. For some years now, Jacobs Holding has invested heavily in acquiring European dental clinics to build up an international dental clinic chain through the Colosseum Dental Group.

In May 2019, Colosseum announced that Promedent, a regional dental clinic in Germany, will be joining the group. Colosseum’s growth path in the dental industry continues. This recent additional to the group means 23 dentists and 150 employees of the Promedent dental chain will join the Colosseum group.

Promedent was founded in 2000 by Dr. Artur Weiß and colleagues. The Neckarsulm-based group are specialists in the German dentistry industry. While dentists are usually organised in small clinics with few employees, Promedent grew as a GmbH (limited liability company in Germany) to 150 employees and 23 dentists. Through joining the Colosseum dental group, Promedent wants to benefit from lower costs for new medical devices and help in administration, marketing and in finding new employees. That highlights the investment rationale behind Jacob’s investment: forming a leading dentistry chain which benefits from economies of scale and network effects.

So far, the Zurich-based Collosseum Dental Group owns 220 clinics in six countries. The group’s revenues are estimated at around €350M. Colosseum is

active in UK, Scandinavia, Switzerland, Italy and Germany. The business is led by CEO Thomas Bäumer. Colosseum is targeting further dental clinic acquisitions.

The Jacobs family office thereby joins a trend of leading private equity firms who are investing in dental clinics. For example, Advent International recently acquired a controlling stake in the Spanish dental group Vitaldent.