We invest in the future

Maarten Bynens, the top man of the holding company Initium, has been on the takeover trail for seven years now. The young man from Limburg wants to get stagnant companies back to full speed. “We are not a hit-and-run takeover company.
MAARTEN BYNENS “We never pay too much.” © DEBBY TERMONIA

Maarten Bynens (37) has acquired seven companies in Limburg and the Antwerp Kempen region with his holding company Initium since 2013. They are mainly active in automation processes, but also in the packaging and construction sectors. “Limburg has a lot of healthy companies with enormous growth potential,” he says. “Often, there are no family successors to develop the business further. They could sell it to a purely financial player or a foreign competitor, but they fear the consequences for the personnel. They then sell to us, in the hope that we will continue their ambition. We are not a hit-and-run buyer, buying a company, cleaning it up, squeezing out the cash flow and selling it on quickly. We are a buy-and-build group, offering the acquired companies an infinite horizon. We don’t just put cash on the table, we also invest in the future.”

Every day I have to put out fires. And sometimes it burns in several places at once .

Suddenly mature

Bynens’ roots lie in Genk, where his grandfather was mayor. His father also became an alderman, but died at 51 from a heart attack. Maarten Bynens was 17 at the time. “The death of my father was the worst and also the best thing that ever happened to me,” he says. “From one day to the next I was on my own. I grew up quickly. Understanding that life can move fast explains my urge to accomplish things.” Bynens obtained his bachelor’s degree in international business at the Hogeschool Antwerpen (now KDG), but abandoned the master’s degree. His internship master at Securitas Germany had shown that he could start immediately. Since 2004, he has completed several acquisitions there under the supervision of Deloitte. “It was an enjoyable learning experience. I not only learned the microeconomic, financial and legal ins and outs of takeovers, but also the human side of business,” he testified. “I also learned that there are many doomed companies out there that are begging to be woken up.”

Hugo Leroi, the former top man of Carglass and chairman of the Limburg Reconversion Company, asked Bynens in 2009 to become commercial director of Autoglass Clinic, which his daughter Charline Leroi leads. When it became clear that he could not become a shareholder, Bynens decided to continue on his own. With a small starting capital, acquired through the purchase and sale of flats, he went looking for “hidden pearls in Limburg”. He ended up at Seculux. The distributor of technical equipment for automatic garage doors and sliding gates from Lanklaar had no successor ready after a quarter of a century. The sale took place in instalments, over a period of four years. Bynens’ mother also sponsored the deal.

MAARTEN BYNENS “I can hardly pass up a nice takeover.” In the meantime, Seculux is achieving 7 million in turnover, a third more than when it was taken over. The subsidiary Entrya is a specialist in electronic access control. Bynens also has an option on Seculux’s 10 per cent participation in the German garage door machine manufacturer Sommer, which has a turnover of 130 million euros.

Following acquisitions

In 2015, Bynens stepped into Aluvin in Herentals together with the Kempen accountant Hugo Bellemans. This company produces aluminium packaging for the food industry. Since the acquisition, turnover rose from 4 to 4.5 million euros and cash flow from 0 to 15 percent.

LVC Solutions became the next acquisition in 2016. The distributor of machinery, forklifts and compressors tripled its turnover since then to 2.3 million euros. In 2018, it was the turn of garden shed manufacturer Nowak from Herentals (700,000 euros turnover). There too, there was no successor for the founder. Bynens shares the shareholdership with the Kempen contractor Tom Fransen.

GMF, which was acquired in March 2019, is part of the automation arm of Seculux. The Genk-based producer of automation mechanisms for company gates and swimming pool covers was the result of a local management buyout of the Genk branch of the German group, which went bankrupt in 1997. The gate actuators from Limburg found their way to, among others, Russian IKEA establishments, the Paris Opera de la Bastille, football stadiums (Johan Cruijff Arena in Amsterdam and Allianz Arena in Munich), trains for the Channel Tunnel and cruise ships.

“The takeover was a matter of two years of massaging,” Bynens recalls. “A lot of candidate acquirers offered more than we did. The fact that we had a long-term strategy convinced the owner. The commercial staff share our enthusiasm. Customers feel that a new wind is blowing. Turnover has already increased by one sixth, to over 7 million euros.”

Not all acquisitions by Maarten Bynens are successful. For example, together with sports doctor Stijn Indeherberge, he took a stake in the Hasselt-based start-up, which advises companies and organisations on health management. Last year, the collaboration with the four founders was broken off. “The coaches were independent consultants and there was a conflict of interest between their work and their activity through,” explains Bynens. “It continues to exist, but for now only works for the other companies around Initium.”

Foolish prices

Each of the companies in the Initium holding company stands alone. There are no cash flows or financing between them. “Nor is it the intention to artificially bulk up our companies and then sell them,” Bynens states. “We are not a classic private equity player. In principle, we do not participate in the public auction of a company, because that leads to crazy prices. And we never pay too much, certainly not seven times the cash flow, as sometimes happens.”

Can Bynens still manage that conglomerate of companies? “It is not easy,” he admits. “Every day I have to put out fires. And sometimes it burns in several places at once. The most dangerous one has to be extinguished first, which is less positive for the management of other companies waiting for my intervention. That is why there is a need for consolidation. In our existing niches, I do have sight of three takeovers.”

Seculux is also working on expanding its activities in Switzerland through a new subsidiary. Maarten Bynens rules out acquisitions in new sectors: “My advisory board (led by former VKW Limburg top man Jos Stalmans, nvdr) has urged me to do so. It is difficult for me. I can hardly pass up a nice acquisition.”

For example, last year Bynens came into contact with the shareholder of Decoline, a manufacturer of suspension systems for curtains in Pelt. “It tickled me,” admits Bynens. “But it would really be too much.” Eventually, the investment fund Renardmont, which Bynens founded with ten other Limburg entrepreneurs (See box ‘A unique company’), took over Decoline.

Under the radar

Initium published 10.7 million financial fixed assets in 2018. Against an equity of 927,000 euros, there are 10.8 million euros of debts, of which 5.8 million are financial debts on longer than one year. According to Bynens, Initium reduced debts by 4 million euros last year, mainly through internal shifts. There are also EUR 3.6 million in debts to non-financial parties. These are loans from the former owners to finance the takeover of their company by Bynens. If the takeover proves successful, they can generate more funds through these vendor loans.

There are many doomed companies out there begging to be woken up.

Bynens has remained under the radar in recent years. Even in Limburg he is relatively unknown. He made the national press for the first time when Trends placed him in the list of promising 30-somethings at the top a few weeks ago. “Too few young people dare to become entrepreneurs,” he says. “I sincerely hope to be able to inspire them. I am not a table jockey, but felt it necessary to tell my story. People find it hard to place me. Who is that 37-year-old guy who wants to buy my company?’, I sometimes see the manager on the other side of the table thinking. He is not even the son of a wealthy entrepreneur, so where does he get his money? I hope that there will be more clarity now. There is still a lot to be achieved in Limburg.”

Flight response Ine Vanbuel, Bynens’ wife, is a co-shareholder of Initium. Last year she hung up her lawyer’s gown to take care of the legal aspects of the group. Since 2016, Mr and Mrs BynensVanbuel have also been working together in the non-profit organisation Tuki, which supports parents whose children with life-threatening illnesses have to spend long periods abroad for their rehabilitation. This was also the case for their own daughter, now healed, after a bone tumour. “My wife was busy for days with the treatment,” says Bynens. “My reaction was to push the throttle with the company. Fleeing, that is.”

‘A unique company’

“Renardmont is a unique company of entrepreneurs, who provide the leadership of the acquired company with not only capital, but also know-how,” says co-founder Maarten Bynens. “Many of them thought it was a waste to leave their money in a bank account, while it would yield a better return through such pooling. The low interest rate on acquisition financing is another driver of acquisitions. I have already been approached by Limburg entrepreneurs who were disappointed that they did not participate in this initiative. So we are working on a Renardmont II.”

The investment fund focuses on companies, mainly in Limburg, with a cash flow between 0.5 and 2.5 million euros. For each acquisition, it will do a new capital round. “There is plenty of potential in our province. Many entrepreneurs who built their companies in the 1970s and 1980s are thinking about retirement. Selling to a foreign group is sometimes not an option for them. Then the argument of anchoring in Limburg helps.”

Renardmont’s niche is established SMEs in traditional sectors. The fund stays far away from biotech or life sciences, start-ups and young fast-growers. Bynens: “We want to give Limburg companies with a good structure and experienced management the opportunity to grow in the long term and possibly expand their activities outside the province. This is a long-term project.”

The board of directors of Renardmont consists of Bynens and Luc De Werdt (ex-Deloitte) who, after a career at KBC and the real estate and construction company Democo, became director at Initium last year.

A company needs to have 0.5 to 2.5 million euros in cash flow to attract Renardmont’s interest.