From newcomer to fourth largest player in the Netherlands
In 2005, Harald Swinkels and Pieter Schoen founded the Dutch Energy Company. Setting up your own energy company in a newly liberalized market: no mean feat. What started as a challenger among dozens of new suppliers grew in twelve years to become the number four in the Netherlands. The name is known everywhere, partly due to striking advertisements on television and radio. Behind that marketing is a tightly organized company with hundreds of employees and over 800,000 customers. Selling is not an active topic in those years. In fact, Swinkels and Schoen are busy expanding their platform, including into telecommunications. They do not see themselves as “just” an energy company, but as a commercial platform for multiple services.
Always eighty percent ready for sale
Nevertheless, the organization is constantly under scrutiny. Not by buyers, but by parties from whom the Nederlandse Energiemaatschappij needs large purchasing and credit lines for gas and electricity. They want to know how solid their customer is. As a result, there is always a kind of data room available. Auditing, providing information, answering questions: it's all part of everyday reality. So it's not surprising that every few years, parties come knocking with an interest in a takeover. In the energy sector, this is almost routine. Most of the time, the answer is clear: we are not yet ready to be taken over.
Waterland comes knocking: too early or just in time?
In the first quarter of 2017, a party they know well by name comes forward: Waterland, a major private equity player. Not entirely unexpected. Waterland has previously taken a stake in Budget Energie, a competitor with a similar market strategy. The logical follow-up question is: when will they call about us? Yet it still feels early. Harald has turned 40, is already writing and directing commercials, and dreams aloud about films. Pieter is already taking steps toward the investment world. At the same time, a new CEO is on the horizon who can take over part of Harald's role. In other words: the company is strong, the management is in transition, and the entrepreneurs sense that a new chapter is coming. When Waterland calls, “just having a coffee” quickly turns into the beginning of something serious.
The summer of the data room and the first offer
If they decide to really explore it, Swinkels and Schoen want to do it right. That means writing a solid information memorandum, fully setting up the data room, and showing that the company is organized down to the last detail. Harald sacrifices his summer vacation to get everything ready. The message to Waterland is clear: if you are serious, we want to see that reflected in the valuation. Not only the energy activities, but also telecom and the synergy that arises with your existing portfolio. At the end of the summer, the first offer arrives. It is short and businesslike. At the very bottom is a single amount. That amount is below the minimum amount that Harald and his fellow shareholders had agreed upon in advance. To him, it feels as if the entire summer has been for nothing. The disappointment is great. They walk away from the table quickly. Harald announces that he will now celebrate his fall vacation after all.
The signal from the bank and the bare minimum principle
Two days before his departure, he receives a call from the investment banker. He has heard through the banking network that Waterland is actively calling banks again. A clear signal: they are not done with this deal. Shortly afterwards, a second offer is on the table. This time it is above the lower limit. For the first time, it feels realistic. Together with their advisors, Swinkels and his partners opt for a clear strategy: this is the minimum and we will not go below it. No centimeter discount during the follow-up, not even after due diligence. Their lawyer introduces a principle that they will apply: what they internally call the “bare minimum” approach. In other words: this is the price. All other discussions are about conditions, not about price reductions. This provides peace of mind and stability for the rest of the process.
Walking away around Christmas and still a 200 million hit
The following months are intense. The data room opens, questions come in, presentations are given, analyses are made. On the buyer side, a consortium of banks is watching. Everyone knows: this is a major transaction. Then there comes a point when Waterland wants to change something in the deal. A renegotiation on one item. For many entrepreneurs, that is the moment when they decide to compromise. Swinkels and his team stick to their principles. They refuse. The discussion escalates. Ultimately, they walk away from the table again just before Christmas. Waterland's contact person ends the conversation visibly irritated. It feels as if everything could fall apart again. A few days later, things start moving again. The holidays cool everyone down. Waterland returns to the table, without changing the price. The deal is finalized. Ultimately, the valuation comes to over 200 million euros. Not everything flows into the account at once. Approval is needed from the competition authorities in Brussels, there are tranches, there are investors and co-shareholders who share. But the moment the bank calls to ask what they should do with the first part is unforgettable. Harald walks to the ATM, looks at his balance, and secretly takes a photo.
The missed mega deal from the dotcom era
It is not the first time he has been involved in a big deal. Years earlier, around the time of the dotcom bubble, he and Pieter built a company that combined job applications with 3D gaming. Major employers are enthusiastic, and an American party makes a serious offer: tens of millions of guilders for a company that has only been in existence for a short time. Under the guidance of a financial advisor, they turn down the offer because a spreadsheet analysis comes up with a much higher theoretical valuation. Not long after, the bubble bursts. International expansion proves fatal for them. Within a few years, they go bankrupt in several countries. That experience colors the way Swinkels later views Waterland. He knows what it's like to turn down a big deal and then be left empty-handed. It makes him keenly aware of valuation, but also more realistic about risks.
From energy company to film set
After the sale, Swinkels does not embark on another startup, but on his childhood dream. As a boy, he agrees with his brother that they will make an international feature film together someday. For years, this remains a side project. Coming up with and directing commercials was the first step. After the deal, things got serious. He produced and directed several short films, won international awards, and worked on his first feature film and series. Part of it was inspired by the bizarre entrepreneurial adventures of the past twenty years. His most important insight: when you sell your company, you need to know where you want to go at least as well as where you came from.
What we take away from this at Virtual Vaults
Harald Swinkels' story reveals a few patterns that we see every day at Virtual Vaults in mid-market deals:
Being ready to sell is not a project, but a status
The Dutch Energy Company was accustomed to audits by suppliers and banks. As a result, figures, contracts, and structures were relatively tight. Entrepreneurs who structure their organization early on in a clear data room and workspace no longer have to sacrifice a summer to get everything “just” in order when a serious offer comes along.
A good information memorandum pays for itself twice over
Harald and Pieter did not write a booklet “for the sake of it,” but used it to substantiate what they considered to be a realistic valuation. This is exactly what we see in successful processes: a clear, complete, and consistent IM prevents the discussion from getting bogged down in opinions and makes it easier to stand your ground if the first offer is disappointing.
Due diligence is a pressure cooker, not a side issue
Flows of questions, analyses, banks, scenarios: the process consumes time and attention. Teams that have their documents, KPIs, and contracts ready in advance in a structured data room have more mental space for the actual negotiations and strategic choices.
Normalization and valuation require preparation, not gut feeling
Discussions about normalized profits, one-off costs, and multiples are crucial to the outcome of the deal. Entrepreneurs who have already calculated and documented this exercise in a secure workspace are in a stronger position with private equity and their advisors.
Walking away requires data and discipline
Walking away twice is only possible if you are certain of your company's value and your story is factually correct. A data room that supports this story with consistent figures, versions, and audit trails gives you the confidence to say “no” to an offer that is not suitable.
At Virtual Vaults, we see the same pattern recurring: the strongest deals are not those where the negotiating table is full of egos, but those where the entrepreneur:
- gets their information house in order early on
- can substantiate their valuation with hard data
- sets up a process structure that absorbs the pressure of due diligence
Then a phone call from an unexpected buyer is not the beginning of chaos, but the starting point of a deal you can do with your head held high.
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