Craft Capital acquired Kees Smit Tuinmeubelen from the Smit family

Stem op deze deal via de stempagina: https://mena.nl/genomineerden-best-small-cap-deal-2024/

Name of the deal: Craft Capital acquires Kees Smit Tuinmeubelen from the Smit family.
Date announced: Announcement date: 29 May 2024.
Date closed: Announcement date: 29 May 2024.
Published value: Not disclosed. Estimate between €5m and €50m.
Buyer(s): Craft Capital
Target: Kees Smit Tuinmeubelen
Seller: Smit Family

Involved firms and advisors

Involved firms and advisors buy side:
Legal: deBreij  Financial DD: RSM  Tax: Atlas

Involved firms and advisors target:
M&A: Oaklins  Legal: Norbruis Clement

Pitch

Deal Outline
Kees Smit Tuinmeubelen, a family-owned leading omnichannel retailer of garden furniture and related accessories with a market leading position in Europe, has agreed to sell a majority stake to Craft Capital, a Netherlands-based investment firm. Prior to the acquisition, New Twente B.V. was established, which will take over the issued capital in Kees Smit Tuinmeubelen from the current shareholders, according to the market watchdog.

As part of this acquisition, Craft Capital, through Craft Capital New Twente B.V., will gain full control over New Twente B.V. and thereby Kees Smit Tuinmeubelen.

Mitchel Oude Nijhuis and Ohannes Malihas, who have been co-shareholders and part of the management team since 2019, will take on the day-to-day management. Henk Smit – the son of founder Kees Smit and former director – will remain involved with the company as a minority shareholder, and he will also take on a role in the Advisory Board.

Under the new owner, the company aims to explore new markets, expand its product range, and focus on enhancing customer experience.

About Kees Smit
Kees Smit Tuinmeubelen is a family business that started in 1942 with the sale of household products by Kees Smit’s father and mother from Almelo. In the 1960s, the focus shifted to garden furniture, and in 1972, Kees took over the business. His son Henk was only 27 years old when he subsequently took over the company from his father in 2011. At that time, the company had around 35 employees, consisted of one location in Almelo, and was primarily active in the regional market. Over the years, it has expanded its operations significantly. The company became a prominent name in the market for high-quality garden furniture, offering a wide range of products. Kees Smit is a mid-sized company, with 430 employees and a revenue of €88 million. The profit amounted to €1.2 million.

The company operates through both brick-and-mortar stores and a robust online presence. Kees Smit has showrooms in Almelo and Amersfoort, where customers can experience their garden furniture in person. Additionally, their e-commerce platform has grown significantly, allowing the company to serve customers throughout the Netherlands and parts of Europe.

In 2021, Kees Smit opened a new distribution center with a footprint of 30,000 m², an effective storage capacity of 85,000 m², 32 loading docks, and office space of 1,800 m².

Kees Smit has experienced steady growth, especially in the last decade. The demand for garden furniture surged during the COVID-19 pandemic when people were spending more time at home. The company capitalized on this trend by expanding its product range and boosting its online operations. Recent reports indicate that Kees Smit has managed to maintain its position as a leading garden furniture retailer in the Netherlands, with continued growth both online and in-store.

About Craft Capital
Craft Capital was founded on January 1, 2021, and invests in majority stakes to create further value in the company together with the entrepreneur and/or family. Craft Capital originates from the Twente-based Roerink family, founders of Zuivelhoeve and former owners of Heks’nkaas. The investment fund has a size of EUR 70 million and is led by experienced professional Pieter Leyssius.

Why This Deal Should Win the Award for Best Deal Small-Cap 2024
The acquisition of Kees Smit Tuinmeubelen by Craft Capital stands out as a landmark deal in the mid-market segment for several compelling reasons. This transaction not only exemplifies strategic alignment and growth potential but also highlights the importance of preserving legacy while embracing innovation.

Strategic Fit and Synergy
Craft Capital, known for its strategic investments in family-owned businesses, found an ideal partner in Kees Smit Tuinmeubelen. The synergy between the two entities is evident in their shared values and vision for sustainable growth.

Craft Capital’s expertise in scaling businesses and its robust network provide Kees Smit with the necessary resources to expand its market presence and enhance operational efficiencies. This strategic fit ensures that both companies can leverage each other’s strengths, creating a powerful synergy that promises long-term success.

Preservation of Legacy
Kees Smit Tuinmeubelen, a Dutch family-owned business with over 80 years of history, has built a strong brand reputation based on quality and customer trust. The decision to partner with Craft Capital was made with careful consideration of preserving this legacy. Craft Capital’s commitment to maintaining the core values and culture of Kees Smit ensures that the brand’s heritage is respected and continued. This approach not only honors the past but also builds a solid foundation for future growth.

Innovation and Growth Potential
One of the most significant aspects of this transaction is the growth potential it unlocks. With Craft Capital’s investment, Kees Smit Tuinmeubelen is poised to innovate and expand its product offerings. The infusion of capital will enable the company to invest in new technologies, enhance its online presence, and explore new markets. This forward-thinking approach positions Kees Smit as a leader in the garden furniture industry, ready to meet the evolving needs of customers.

Economic Impact
The acquisition also has a positive economic impact on the region. By supporting a local business, Craft Capital contributes to job creation and economic stability. The growth of Kees Smit Tuinmeubelen will likely lead to increased employment opportunities and stimulate local economies. This broader economic benefit underscores the importance of such mid-market transactions in driving regional development.

Sustainability and Corporate Responsibility
In today’s business environment, sustainability and corporate responsibility are crucial factors. Both Kees Smit Tuinmeubelen and Craft Capital are committed to sustainable practices. This transaction highlights their dedication to environmental stewardship and ethical business practices. By prioritizing sustainability, the companies set a benchmark for others in the industry, demonstrating that profitability and responsibility can go hand in hand.

Conclusion
The acquisition of Kees Smit Tuinmeubelen by Craft Capital is a textbook example of a successful mid-market transaction. It combines strategic alignment, growth potential, and a commitment to preserving legacy and sustainability. This deal not only benefits the companies involved but also has a positive ripple effect on the broader economy and community. For these reasons, it deserves to be recognized as the best mid-market transaction of 2024.

Deal Rationale
The acquisition of Kees Smit Tuinmeubelen by Craft Capital is a standout mid-market transaction because:

1. Strategic Synergy: Craft Capital’s expertise complements Kees Smit’s growth goals.
2. Legacy Preservation: Craft Capital respects and maintains Kees Smit’s core values and brand heritage.
3. Growth and Innovation: The investment enables Kees Smit to innovate and expand its market presence.
4. Economic Benefits: The deal supports local job creation and economic stability.
5. Sustainability: Both companies prioritize sustainable and ethical business practices.

These factors make the transaction a model of success in the mid-market segment.

Impact of This Deal on the Company
The impact of the Craft Capital acquisition on Kees Smit Tuinmeubelen includes:

1. Enhanced Growth: Access to resources for innovation and market expansion.
2. Operational Efficiency: Improved processes and scalability through Craft Capital’s expertise.
3. Brand Strengthening: Preservation of Kees Smit’s legacy and values.
4. Economic Contribution: Positive effects on local employment and economic stability.
5. Sustainable Practices: Continued commitment to environmental and ethical standards.

These impacts collectively position Kees Smit for a stronger, more sustainable future.

Impact of This Deal on Direct Stakeholders
The impact of the Craft Capital acquisition on the direct stakeholders of Kees Smit Tuinmeubelen includes:

1. Employees: Job security and potential for new opportunities due to business growth and expansion.
2. Management: Continued leadership with added resources and support from Craft Capital to drive strategic initiatives.
3. Customers: Enhanced product offerings and improved service quality as a result of increased investment in innovation and technology.
4. Suppliers: Strengthened partnerships and potential for increased business due to Kees Smit’s growth.
5. Local Community: Economic benefits from job creation and business stability, contributing to regional development.

These impacts collectively benefit the stakeholders by fostering a stable, innovative, and growth-oriented environment.

Impact of This Deal on Society
The impact of the Craft Capital acquisition of Kees Smit Tuinmeubelen on society includes:

1. Economic Growth: Boosts local economies through job creation and business expansion.
2. Sustainability: Promotes environmentally friendly practices and ethical business operations.
3. Community Development: Strengthens community ties by supporting local employment and contributing to regional stability.
4. Consumer Benefits: Provides consumers with improved products and services, enhancing their overall experience.
5. Industry Standards: Sets a positive example for other businesses in terms of sustainable growth and corporate responsibility. These societal impacts contribute to a more robust, sustainable, and ethically conscious community.

Most Complex Aspect of This Deal
Valuation of a company considering the positive impact of COVID-19 on Kees Smit Tuinmeubelen’s performance during the pandemic and the fall-back in the aftermath + the considerations given to the working capital development, particularly inventory, during the supply chain disruptions during the COVID-19 pandemic.