The Exit Plan – Navigating the Intricacies of Business Transitions as An Entrepreneur

The Summit, themed “Stronger Together”, brought together women leaders and entrepreneurs to spark creativity and foster new ideas. As part of our involvement, we hosted a panel titled “The Exit Plan”, where Gavyn and Ellyn facilitated discussions with two business owners, shedding light on challenging topics like Merger and Acquisition (M&A) – a critical consideration for any business transition. 

The Madam Partum and Eu Yan Sang story 

Starting a business is a challenge, but Yen Lim, Director and Founder of Madam Partum, took it a step further. Not only did she expand her line of business, but she also sought an investor to fuel further growth. Through a mutual connection, Yen met Richie Eu, Managing Director, Mergers and Acquisitions of Eu Yan Sang International Ltd, leading to a strategic partnership. 

Madam Partum specialises in pre- and post-partum care and Traditional Chinese Medicine (TCM) treatment. It is an extension of Chien Chi Tow, a local brand known for its extensive TCM treatments since 1969. Eu Yan Sang International Ltd, founded in 1879, is a leading TCM brand in Asia. Through this partnership, both businesses leveraged each other’s expertise to expand their services. However, the journey wasn’t without its challenges. 

Ingredients of a successful partnership 

Setting the right mindset and expectations 

Richie was looking for a partner with similar values. He was impressed by Yen’s positive outlook and the strategies she implemented during COVID, which helped Madam Partum emerge stronger. 

“We liked that it was a heritage brand with a strong reputation and a loyal customer base,” Richie explained. “We were also impressed by the organic strategies Yen used to build her consumer base and acquire new customers online.”  

Yen saw the partnership as an invaluable opportunity for growth. “The partnership with Eu Yan Sang allowed me to envision access to full-fledged facilities, resources, expertise and a network to propel Madam Partum forward,” she shared. 

Overcoming challenges 

The journey from conceptualisation to formalisation was an emotional one. Richie recalled, “There were definitely highs and lows. The lows were from a deal standpoint. We got to a point where you’re almost completing the deal, when suddenly, one night around 2am, a spanner gets thrown in the works. We realised there was a possibility of the partnership falling through. We had to figure out how to tackle that and be answerable to all the parties involved.” 

To resolve this, all parties took a two-month break, which eased the tension and allowed them to revisit the deal successfully. 

Navigating the intricacies of M&A transactions 

Gavyn emphasised the importance of understanding the goals of the seller and buyer in any M&A transaction.  “Our purpose as advisors is not to sugarcoat things, but to share the reality of the situation,” he said. “We advise on how the transaction should be done, find out the parties’ intentions, and consider the current business landscape, so everyone can make a well-informed decision.” 

He added, “It is imperative to establish a basis in the Sales and Purchase Agreement (SPA) to have room for negotiation. The toughest part of the negotiation lies with the representations and warranties involved.”  

Key takeaways 

M&A can be complex, but with the right advice and processes, it can be rewarding for all involved. 

“Communication and synergy between both the seller and buyer are key,” Gavyn concluded.” Our role as an advisor is to establish these terms, share the types of “exits plans” available, and provide a professional opinion on whether it is the right time to sell or buy – essentially to guide you through this strategic move.” 

The Madam Partum and Eu Yan Sang story, shared at the WE Summit, serves as a valuable reminder that successful business transitions require careful planning, open communication, and a shared vision for the future.