Role of ING:
  • Joint Financial Advisor to the Sellers
  • Sole Financing Provider
  • Reference shareholder
 

Luc De Mey

Cmosis CEO

 

CMOSIS finds new owner that wants to continue intensive growth

The technology company CMOSIS designs and manufactures image sensors for digital cameras and many other applications. The company specialises in customised sensors and has won awards, including the IWT innovation award from the Flemish government. Over a good five years turnover has increased from almost nothing to 38 million euros. CMOSIS is now largely owned by the American private equity investor TA Associates. Further growth was the reason for this acquisition. With the advent of acquisitions that supplement its strong organic growth, CMOSIS is now managed on a grow-and-buy strategy basis.

CMOSIS’s challenge: find a buyer, faster than anticipated, who wants to further boost the company’s growth

In 2009, two years after the company was established, the shareholder structure of CMOSIS was expanded to include participations from Capital-E Partner, the Flemish investment company PMV and ING Corporate Investments. “Private equity usually takes on such participations with a horizon of five to six years, therefore we knew we had to look for new owners in the long term," says CEO Luc De Mey.

However this happened faster than expected. Luc De Mey: “We started receiving spontaneous acquisition bids from March 2012. We became bigger, acquired a market share and began to attract attention. By the end of that year, the main shareholders opted for an organised process.”

The solution chosen by CMOSIS: an advisor who could direct the acquisition based on thorough knowledge of the market

CMOSIS approached ING about supporting them with the process. As a result ING acquired a third important role within the company. In addition to being a shareholder and its main banker, it now also became an advisor for the acquisition. “We did not just walk into ING to let them direct the acquisition. There were several others who also submitted detailed proposals and from these we made a selection,” says Luc De Mey. In the end CMOSIS chose ING Corporate Finance because of its proven success record and very thorough, practical knowledge of the market in which CMOSIS is active.

ING Commercial Banking was already responsible for operational banking activities for CMOSIS. “A few other shareholders and I have a long tradition of collaborating with ING. They really are our main banker and in all these years we have never had any reason to doubt this.”

CMOSIS largely financed its growth itself. “We do a lot of custom design and ask for substantial advances for such projects. As a result our cash planning was good and no additional funding was needed,” says Luc De Mey. However, when Leica placed a large order, CMOSIS had to find a few million to finance the purchase of raw materials. It became a straight loan from ING Commercial Banking which ran for most of 2013. Luc De Mey: “ING looked after the financing again. We chose them because it went so smoothly. The negotiations were completed quickly because the quality of our management and our company scored very high at ING. They took care of all the administrative work and we could carry on working with our growth company.”

Benefits for CMOSIS: minimal impact of the acquisition process on the daily management of a rapidly growing company

ING shields the management and Luc De Mey appreciates this very much: “We have to run a company that is exploding in terms of growth, we have to sell it and at the same time remain credible to the employees who will remain there. This only works if we can continue focusing on the essential daily operations and ING was especially good at guiding us.”

So the acquisition process was largely led by ING Corporate Finance which searched for candidates worldwide. Just over ten of the interested parties were retained, financial as well as industrial candidates, and they included competitors of CMOSIS. “ING was very strong in leading the sales process. They did almost all the work involved in setting up the data room. The whole acquisition was a much lighter process than we had anticipated. With someone else we would probably have had to spend a lot more time on the acquisition.”

The acquisition by TA Associates was completed at the beginning of 2014. This sale resulted in a very substantial capital gain. Luc De Mey: “The parties have agreed not to release any details but the acquisition price was in any case higher than usual.” The acquisition deal is also co-financed by ING Acquisition Finance and this certainly helped to smooth the process. “I know from our new owner, TA Associates, that ING gave the fastest and most pragmatic response to their request for financing, so that part was also completed very quickly.”

At the present time, CMOSIS has one new major shareholder and with its current business plans this is an advantage. “TA Associates only invests in profitable growth companies that have even more growth as their objective. They also have the resources to pay for acquisitions and we are very busy working on this. For us, it is easier to continue growing with such a shareholder: one who is not concerned with operational issues but only looking at the medium term,” concludes Luc De Mey.

ING has remained the main banker of CMOSIS and has no specific cases there at the moment. Of course, with the planned acquisitions this could change.

 

Other managers have their say

 

Marc Brisack
Michèle Delvaux
Stéphanie Vanden Broecke

Read the article

 

Fabrice Heughebaert

Read the article