NETHERLANDS Law and Practice Contributed by: Marc Habermehl, Jeroen Smits, David de Groot and Max de Heer, Stibbe
ruling process with the Dutch tax authorities can potentially be lengthy (typically the duration of such process ranges from a couple of months up to a year), the implementation of the MIP usually takes place after the completion of the invest - ment round. 6. Exits 6.1 Investor Exit Rights Transfer- and exit-related provisions in share - holders’ agreements typically include: • a lock-up period; • a right of first refusal (ROFR) and/or right of first offer (ROFO); • drag-along rights; and • tag-along rights. During the lock-up period, the shareholders are not allowed to transfer their shares. This cre - ates stability for the portfolio company and the cap table, and also avoids the risk that, shortly after an investment by one shareholder at a cer - tain valuation, other shareholders may transfer shares to third parties at a lower valuation. The duration of the lock-up period depends on each situation, though a two- or three-year lock-up period is not uncommon. After the lock-up, shareholders are typically allowed to transfer their shares to third par - ties, though subject to a ROFR and/or ROFO. This allows the other shareholders to acquire the shares at the price offered by a third party (ROFR), or to make an initial offer and set the price for any third parties to exceed (ROFO). In addition, shareholders’ agreements provide for a drag-along right by one or more share - holders together selling, for instance, more than
50% of the company’s shares, forcing the other shareholders to co-sell their pro rata portion. In order to allow minority shareholders to profit from an exit sale by other shareholders, a tag- along right typically applies if a drag-along right remains unexercised. 6.2 IPO Exits Most companies in the Netherlands that elect to pursue an IPO – in the form of a listing on the regulated market of Euronext Amsterdam – are relatively mature companies. However, Euronext Amsterdam is also considered to be an attractive listing platform for start-ups and growth com - panies, providing access to an international and sophisticated investor base, deep and diverse liquidity and good trading infrastructure. Due to the challenging deal climate, IPO activ - ity has slowed down over the past few years. However, there are various examples of Dutch IPOs by growth companies. Their listings ena - bled them to tap the capital markets and secure equity funding to accelerate their growth. Exam - ples include: • Basic-Fit, an operator of fitness clubs, which is listed on Euronext Amsterdam and has successfully closed multiple new equity raises since its IPO; • Adyen, a financial technology platform, which is listed on Euronext Amsterdam; • NX Filtration, a provider of direct nanofiltra - tion technology, which is listed on Euronext Amsterdam; • Avantium, a developer of renewable and circular polymer materials, which is listed on Euronext Amsterdam and Euronext Brussels and has successfully closed multiple equity raises since its IPO; • Ebusco, a developer of zero-emission buses, which is listed on Euronext Amsterdam; and
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