Zanders assists in MBO of Spant! theater
Spant! in Bussum is one of the best known theaters in the Netherlands. Managing director Paul Haighton and financial director Bert Dijkstra have recently taken over the running of this cultural venue and conference center from the municipality of Bussum. It was the first management buyout (MBO) of its kind in the Netherlands.
It is an ordinary morning in April and the red carpet is out. There is an immense bustle in Spant! theater as people from a wide range of charity and social organizations put up their stalls. There are people busy doing things in all the theater’s rooms and corridors. Today, seven hundred young people will be coming to Spant! to find out about options for their compulsory social internship. In the main auditorium, a DJ is fine-tuning his equipment and testing the speakers. The theater’s new owners survey the early morning activities with an amused look. The event is a perfect illustration of the strength of Spant!: an exciting and profitable mix of culture and events.
Spant! has an indestructible name and reputation based on an illustrious past. The theater’s high profile is mainly due to programs such as ‘In the lead role’, ‘Rush on in’ and ‘The Willem Ruis Lotto Show’. These days, Spant! is a very modern theater and conference center where nearly all the national theater productions are shown. During the day, both large and small companies hire Spant! for their annual general meetings, product launches, dealer meetings, and conferences. This conference and events center has national allure due to its central location. Each year, Spant! receives more than 100,000 guests.
The two directors have been managing the company for some time now. Haighton started four years ago and Dijkstra five years ago. The secret of their success? “Being a good host,” says Haighton. “That is what it is all about. All those 100,000 guests we receive every year come here with different expectations. Our aim is to exceed those expectations.” It is the little things that do it, such as the wallet-less interval. Guests receive vouchers with their ticket that they can then exchange for a drink during the interval and a drink after the performance has ended. “You don’t need to have money on you for a performance at Spant!” is how he summarizes the concept. “Our visitors like this and it is very efficient for us.”
It had been clear to the two directors for some time that the subsidies Spant! receives would be reduced. Gradually, the idea took form that they might take over the running of the theater themselves. That was not such a strange idea as public authorities are increasingly inclined to hive off activities that are not part of their core operations. However, the moment when they had to submit their ideas to the Supervisory Board was very tense indeed. Fortunately that went well; the Board indicated that it was open to the idea.
The way was now free for Haighton and Dijkstra to give further shape to the MBO process. They called on the help of Zanders to assist them in this process. Zanders is actually based in the same town as Spant!, but it also has considerable experience in the field of management buyouts.
“There were no other examples in our sector,” says Dijkstra. “We really needed a partner who could assist us, a party who had done this kind of thing before. This was particularly necessary as in the end we did not just have to convince the Supervisory Board but also the municipality, and really the entire community of Bussum. It was important for us to set a price in line with the market value, one which would serve the public cause, as we didn’t want people to think it was being given away.”
The fact that Spant! is a subsidized institution with an important cultural function in the municipality of Bussum made the takeover even more challenging. The buyout would not be allowed to change this. In other words, there was no question of art and culture making way for the commercial interests of the new owners. Haighton says: “We asked Zanders to help us with the process and the talks with the sellers – the members of the Supervisory Board acting on behalf of the municipality. We also asked them to help us think about what form the transaction should take and we asked them to help us find financing.”
“I think it is particularly important that all the stakeholders are satisfied with the transaction.”
Before the negotiation process started, the sellers in consultation with Haighton and Dijkstra drew up a number of preconditions; key elements were a market-compatible purchase price, market-compatible rents for the premises and adequate returns. Taking these preconditions as the basis, the two went into the negotiations with Zanders prompting them. The negotiations eventually lasted more than a year. “When we were in the middle of the transaction we completed our best year ever in the history of Spant!,” laughs Haighton. “That did not really help. It took such a long time and the counter proposals often didn’t match our ideas; in such a situation it is nice if you have somebody taking a professional look at things, who is able to get you back on track and get the process moving again.”
In the end, the negotiations could be concluded to the satisfaction of all parties. The municipality has retained ownership of the building. There is a contractual agreement with the managers that the theater’s cultural operations should be continued at the current level at least. There are also safeguards for the agreements with the local theatrical, music, and operetta societies.
The transaction involved a sales price of more than EUR 4 million. Financing the takeover was not a problem. Carel de Vries from Zanders says: “We approached four banks and they all reacted positively. We had a good plan, which is important and let’s not forget the section on management. It was totally watertight and that is perhaps the first thing a financier looks at.”
“This is cultural entrepreneurship. I see it as sending a very positive message to the sector.”
The Spant! management buyout was pioneering work. De Vries adds: “The situation is unusual because the conference part is operating very successfully while the cultural activities eat up money, but at the same time subsidies are being cut. This means that in practice the two businessmen are subsidizing the art and culture themselves at the cost of their own profits.”
This – rather complex – buyout is a first in the Netherlands, at a time when art and culture are under considerable pressure. “This is cultural entrepreneurship. I see it as sending a very positive message to the sector,” says Haighton. “I think it is particularly important that all the stakeholders are satisfied with the transaction. They had confidence in us and in our ideas, and that consensus is crucial. You can’t concoct something like this in secret and then surprise everybody.”
The staff were pleased too. “It is they who make Spant! what it is. Those 60 people are our ambassadors. Their enthusiasm gives me real confidence in the future.”
A bus draws up at the front entrance and dozens of young people step out and walk along the red carpet into Spant! There, the people manning the stalls for all kinds of charities are waiting eagerly for their custom. The day has started.