Two private equity firms face court over the deal.
The acquisition of the Dutch staffing company Welten, which was celebrated at the end of 2022, has turned into a financial headache. Belgian private equity firm Straco believed it was securing 120 million euros in revenue with Welten, a staffing agency specializing in the financial sector.
However, it has now emerged that Straco may have overpaid by tens of millions for the Den Bosch-based company. Straco initially paid 100 million euros for Welten, but according to reports by Het Financieele Dagblad (FD), this could have been about 35 million euros too much.
A preliminary ruling from the Amsterdam court confirms the financial setback for the Belgian investor. It was revealed that Welten’s former CFO manipulated the company’s books. Certain costs were deferred, making the financial results appear more favorable than they actually were. Revenue figures were also inflated. At the beginning of 2023, the company’s annual turnover was estimated at 120 million euros.
According to the court ruling, Welten’s CFO "wrongfully approved the shifting of costs and the establishment of a provision for accrued vacation entitlements. The aim was to conceal that the company being sold was less profitable in 2022."
Had Straco been aware of the actual financial figures, it would have offered 65.6 million euros for Welten, as stated in a damage report prepared by Deloitte. In the summer of 2023, after the acquisition had been financially settled, Straco discovered the accounting irregularities. According to FD, One Two Capital had failed to disclose that Welten’s 2022 financial results had declined.
Straco acquired Welten from the Dutch investor One Two Capital at the end of 2022. One Two Capital had only owned Welten for a few years. The firm claims that Deloitte’s damage report is flawed and has expressed surprise at the preliminary court ruling, according to FD.
Belgian media report that Straco was approached by the seller to participate in the deal process. The Belgian investor had already been looking to invest in Dutch staffing agencies. In the fall of 2022, Straco acquired staffing company Workplanit through its portfolio company LPC, another Dutch firm under Straco’s umbrella.
