Geert-Jan Smits sold online home furnishing store Flinders to a major strategic buyer from Denmark. A takeover by the book with the biggest pain point being the closure of the physical home furnishings store. 'Fortunately, we were able to guide all employees to other jobs.'
When Geert-Jan Smits stood at the notary's office in early 2021 to seal the sale of his web store Flinders, he must have squeezed his arm for a moment. What began ten years earlier with a small webshop for designer furniture had now grown into an online market leader in the premium home & living segment in the Netherlands and Belgium.
The Zaandam business - 27 million euros in revenue, 120 employees - had more than 36,000 pieces of furniture, designer lamps and home accessories in its assortment. It earned Smits, along with shareholders RTL Ventures and Peak Capital, the top prize. Het Financieele Dagblad last year estimated the sale proceeds between 40 to 54 million euros.
First exit
It was not the first exit for Smits, by the way. Ten years earlier, Smits had sold his stake in Jungle Minds, an Internet consultancy active in the Netherlands and Belgium. Asked about the common exit lessons Smits learned from both transactions, he had to think for a moment.
Smits: 'They are in fact two incomparable sales processes. At Jungle Minds, co-founder Matthijs Kanis and I sold our shares to the incumbent management. There had been interest from strategic parties for some time. But we all still felt it was important for Jungle Minds to retain its independence. That may not have yielded the highest price at the time, but it did leave us with a good feeling. And we felt that was important to the people with whom we had built the business.
Two sales trajectories
The exit from Flinders was an entirely different story. That was basically a sale by the book, Smits said. 'We had grown there in ten years to become the online market leader in the Netherlands and Belgium and were faced with a choice: raise growth capital for a buy-and-build strategy or have ourselves acquired by a strategic party.'
Guided by consultancy firm Drake Star, two different sales processes were initiated: one for buy-and-build and one for 100% sales. An important part of the sales strategy were Smits' informal meetings with potential buyers. Smits: "Instead of sending all parties a pitch deck right away, I first went by to have a cup of coffee. Such a personal meeting already provides a lot of information about the plans and was very much appreciated by the interested parties, since they normally get to speak to an external adviser first instead of the founder himself.'
After an intensive process, three serious candidates remained, including two strategic buyers and an investment company. In the end, the deal was struck with Nine United, a Danish family-owned company consisting of several divisions in design, real estate, clothing and food. Smits: "A logical choice because they did not yet have a position in the Benelux and together we could immediately become European market leaders. By centralizing purchasing and marketing, costs can be reduced significantly in the long run, which is why they were able to submit the highest bid by far.'
Liquidation sale
Although ninety percent a dream exit, the forced closure of the physical store in Zaandam became another small headache for Smits. 'We had a multichannel strategy, the Danes only wanted our online operations. But ten enthusiastic employees were working in the store, some of them from the beginning. Then it is quite difficult when you have to tell them it is the end of the exercise.'
In the end, Smits himself spent another three months in the store to help with the liquidation sale. Smits: 'Fortunately, we were able to guide all employees to other jobs during that period. With that, we ended well for all Flinders employees and I was able to close the door behind me with my head held high.
