Shareholder transition

Achieving harmonious business resolution

Background

Jacob, a founding member of two steadily growing, related companies, faced the complexities of shareholder dynamics. Over time these companies had welcomed several third-party investors, among whom were a married couple Lucy and Marcus. As time progressed Jacob’s vision for the companies evolved, compelling him to pursue sole ownership and thus consider buying out both Lucy and Marcus.

Need/Event

Tensions had been escalating between Jacob and Marcus, leading to a series of disputes that culminated in Jacob reaching out to his DAB Financial Group Client Manager, Mark. With Mark’s thorough understanding of both companies derived from managing their financials since inception, he became Jacob’s confidant in this matter.

Jacob expressed a clear intent: the partnership with Lucy and Marcus was no longer tenable, and it was time to dissolve the joint ownership. Mark, recognising the delicacy of the situation, directed Jacob towards the expertise of the DAB Legal team to explore the optimal pathway for the buyout.

DAB Solution

The journey to transition ownership commenced with DAB Legal initiating discussions with Lucy and Marcus’s legal representatives. The objective was straightforward: negotiate a financial settlement whereby Jacob and his wife would acquire the couple’s shareholding. Nevertheless, reaching a consensus on the companies’ valuation—a pivotal factor in determining the shares’ worth—proved challenging.

DAB Accounting’s input was crucial at this juncture. They concluded that Lucy and Marcus’s initial demands exceeded the companies’ market value. DAB Legal thus recommended an independent valuation as a fair means to progress negotiations. An agreement was reached to appoint a valuation firm for an impartial assessment of the companies’ worth, a process during which the acumen of the DAB Client Manager and the Business Advisory, Accounting and Legal teams was invaluable in providing accurate and timely advice.

Outcome

The independent valuation provided a clear market value for Lucy and Marcus’s shares, equipping Jacob
and his wife with the data needed to formulate a fair offer. The clarity of the valuation expedited the negotiations, enabling all parties to swiftly agree on a purchase price for the shares. Within a month of the valuation’s conclusion, the transfer agreement was settled, and the ownership of the shares was realigned to Jacob and his wife.

Within the DAB Financial Group our specialists formed a team to implement this unique solution for our client. See the DAB  Solutions bar on the right to identify the teams used to implement this unique solution for our client.

Next Step

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