100% financed transition of ownership within the family and equal treatment of the children
In family businesses, a transfer to the next generation is rarely only about numbers. It is about continuity, maintaining a sound balance within the family, and securing the financial future of the previous entrepreneurial generation.
Liquarto supported the transfer of a family-owned group of companies to the next generation, respecting the following three pillars:
- preservation of the group within the family,
- equal treatment of son and daughter,
- and financially valuing the efforts of the parent-entrepreneur.
The situation
The client-entrepreneur owned 66.66% of a family group of companies which had been valued at 27 million euros. His son already owned 33.34%, previously acquired from his father and financed through a bank loan.
The client’s intention was clear:
- sale of his remaining 66.66% to the son,
- after the transfer of shares, organize a donation of an equal amount to both children.
Two key challenges arose:
- Limited available liquidity, both within the group and at a personal level.
- The son could not raise additional own funds to realize the acquisition.
The challenge
The change of ownership needed to be:
- 100% financed,
- without an additional cash contribution from the son,
- with room for an equal donation to both children,
- and with a cash payment to the previous owner-entrepreneur.
In this scenario, a traditional financing framework could not provide a solution.
Liquarto’s approach
In collaboration with the advising law firm, Liquarto developed a structured step plan which enabled both the financing and the family objectives.
1. Pre-financing of the donation
Instead of executing the donation after the transaction, this has been brought forward.
- Liquarto negotiated a short-term personal bank loan (1 week) for the client.
- With these funds, the client immediately carried out the intended donation to the son.
- The son used the proceeds of this donation to fully repay his existing loan on the existing 33.34% equity stake.
As a result, the son became owner of 33.34% of the shares, free of debt.
Liquarto supported the son throughout the conversations with financial institutions. The 33,34% equity stake was accepted as an equity contribution, deviating from the traditionally required cash input.
2. Financing the acquisition
Under Liquarto’s guidance, a financial institution provided a bridge loan, enabling the son to acquire the remaining 66.66% and pay the father in cash.
3. Refinancing of the group of companies
Subsequently, the six operating companies were refinanced through bank financing.
The refinancing made it possible to upstream cashflows to the son’s holding company, allowing:
- 70% of the bridge loan to be repaid,
- the remaining balance to be converted into an amortizing term loan with a tenor of 7 years.
4. Equal treatment of both children
Thanks to the cash proceeds from the sale, the client was able to:
- fully repay the personal loan which was granted to realize the donation,
- donate an equivalent amount to the daughter.
The outcome
The implemented structure resulted in a solution that met all objectives:
✔ The family group remains within the family.
✔ The son became 100% owner without additional own funds.
✔ Both children were treated equally from a financial perspective.
✔ The entrepreneur received a cash payment which will provide for sufficient financial resources to maintain his standard of living.
The added value of Liquarto
This case illustrates how an integrated approach - financial, legal, and familial - enables complex transfers of businesses.
Liquarto combines:
- in-depth expertise in acquisition financing,
- experience in family wealth planning,
- and a strong negotiating position with financial institutions.
Are you considering a family transfer or would you like to explore financing options? We’d be happy to discuss this with you.
