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07. October 2020 | Axel Springer shares: tax-free gift worth 1 billion EUR

03. November 2020 | Dr. Oetker buys the startup bottlenpost SE for EUR 1 billion. (this contribution)

Dieter Büchl founded the German start-up Flaschennpost as a GmbH, led it by acquiring several investors and converting it into a SE via a public limited company and now he sold it to the Dr. Oetker Group for EUR 1 billion. Based on the balance sheets published over the years, we trace the path that Dieter Büchl chose for his company. In this way, we want to reconstruct how much investment went into the expansion of plattenpost and how this resulted in the current sales price of EUR 1 billion, even though the company has written losses in the past. In addition, we outline the tax consequences of the sale that Dieter Büchl can expect if he held the sold shares in Flaschennpost SE either in his private assets or if he used a holding company for this purpose.

Bottle mail sold to Dr. Oetker Group

1st darling of the founding scene – the German startup bottlenpost

Entrepreneur Dieter Büchl founded Flaschennpost GmbH in 2012 with a share capital of EUR 100,000. In the following years, his company grew and expanded, which counts the short-term supply of drinks as its core business. Previously, it was necessary to meet a delivery time within 90 minutes of receipt of the order. In the meantime, the immense success of the concept has led to a timely delivery being deemed to have taken place within 120 minutes. Especially in times of the corona pandemic – especially in the lock-down state – this business idea is quite lucrative. Because it frees the customers from getting the drinks themselves, but at the same time ensures that you receive the delivery in the shortest possible time.

2nd increase in the share capital of Flaschennpost GmbH

2.1. Increase in share capital and payment into the capital reserve as an investment in Flaschennpost GmbH

In 2018, the share capital increased by EUR 216,000. This increase in share capital was carried out by at least one investor. The investment was made via a share premium, i.e. a premium that additionally flowed into the company’s capital reserve. After all, the investment should serve the company. At the same time, Dieter Büchl also wanted to benefit from this. If he had simply sold a share of his company to the investor, only he would have benefited. However, the company would not have received a direct financial advantage. The company benefits because it now has more money to expand further, but at the same time Dieter Büchl benefits because the shares he holds in the company are now significantly more valuable.

2.2 Dilution of Dieter Büchl’s stake in flaschenpost GmbH

However, this form of investment also means that Dieter Büchl now holds less than the original 100% in Flaschennpost GmbH. In the specific case, this dilution led to a reduction in Dieter Büchl’s shareholding to 31.6% of the shares. Therefore, the amount of the investment via the capital reserve can be reconstructed. In order to take over the remaining shares, the investor had to pay about EUR 1,000,000 into the capital reserve. The calculation is as follows:

Share capital EUR 100,000 + increase in share capital EUR 216,000 = EUR 316,000 new share capital

Payment into the capital reserve EUR 1.000.000

Share capital EUR 316,000 x 100 / Capital reserve EUR 1,000,000 = 31.6% stake in Dieter Büchl

Now, in 2018, a further change took place at flaschenpost GmbH. Because due to a change of form now emerged from the GmbH the Flaschennpost AG. With this step, Dieter Büchl prepared his company for the future.

4th conversion of Flaschennpost AG into a SE

The next step in the design of bottlenpost AG was the cross-border merger into bottlenpost SE in January 2019. The German company Flaschennpost AG merged with the Austrian company Flaschennpost altera AG, resulting in the German company Flaschennpost SE with headquarters in Münster.

There were no tax or corporate advantages in the foreground. For an SE, i.e. a European limited liability company, the national tax and company law of the country in which the company has its registered office applies. However, there are differences in the co-determination by employees to the German AG, because a supervisory board with a parity is excluded at an SE.

Further increase of the share capital and the capital reserve of plattenpost SE

5.1 Increase in share capital

A further increase in the share capital to EUR 382,000 was accompanied by an increase in the capital reserve. The balance sheet for 2018 shows a capital reserve of around EUR 43 million. At the same time, however, the active assets of Flaschennpost SE also increased. On the one hand, this reflects the investments made with these funds in fixed assets and working capital such as the stock of goods, but on the other hand also the bank stocks and the outstanding claims, which are quite high in this case with about EUR 16,000,000.

5.2. The ratio of investments to losses of Flaschennpost SE

Now the balance sheet shows that the company recorded and carried forward losses of about EUR 30,000,000 over the years. However, these losses are due to the use of the investment funds that came into the company through the investors and went into further expansion there. For this reason, when evaluating the success of Flaschennpost SE, one should pay less attention to the losses, but rather to the sharp increase in sales. After all, the balance sheet of Flaschennpost SE as of 31.12.2018 shows a considerable stock of bank and receivables. In addition, the success of the company can also be seen in the increased value of the SE.

5.3. The amount of Dieter Büchl’s participation before the exit

Further share capital increases by investors ultimately led to an increase in share capital to approximately EUR 604,000. This also led to a change in Dieter Büchl’s shareholding in Flaschennpost SE, as it was now 16.55 %.

The latter point is interesting in this respect, because we can calculate the percentage of Dieter Büchl’s share in bottlenpost SE, the share he receives from the purchase price of EUR 1 billion. This brings us to a proud amount of EUR 165,500,000. This amount is also proud because the company was founded only a few years ago and only for EUR 100,000.

However, you have to take into account that the Dr. Oetker Group also tried to set up a direct competitor to plattenpost when the company Durstexpress was founded. In fact, one can assume that the advantages of the business concept of bottlenpost and the success based on it were used as a template for the implementation of its own beverage distribution. In the end, it may have seemed easier to take over the bottlenpost SE than to fight a competitive battle with it that is not very promising. That is why they were probably prepared to pay this proud sum.

Taxation of the profit from the sale to the Dr. Oetker Group

Let’s take a look at the taxation of the profit due to Dieter Büchl. Here we are largely dependent on speculation. While we can support these with good tax arguments, we prefer a comparative approach that also supports the plausibility of our assumptions.

7.1. adoption of private taxation

So let us first examine how much tax Dieter Büchl would have had to pay if he had kept his share in Flaschennpost SE in private assets. Then the parts income method would have been used. 40 % of the income is exempt, while the remaining 60 % is subject to taxation. So if we tax 60% of profit, we must first subtract the share capital of EUR 100,000 originally paid in by Dieter Büchl from the profit, because this share capital is considered to be an acquisition cost. So EUR 165.400.000 remains, which we now transfer to taxation in the partial income procedure:

Capital gain EUR 165.400,000 x 60% = EUR 99.240,000 taxable profit share

EUR 99.240.000 x 45 % peak tax rate = EUR 44.658.000 income tax

The calculated tax amount is 27 % of the capital gain.

7.2. assumption of taxation on an intermediate holding company

7.2.1. Calculation of the company tax of the holding company

In the second assumption, we assume that Dieter Büchl held his shares in Flaschennpost SE instead of privately in a holding company. The holding company has the tax advantage that it only has to pay tax at 1,5 % on the profits it makes from the sale of a holding company. This simple statement on the taxation of a holding company shows that the tax advantage is clearly on the side of the holding company (1,5 % vs. 27 % in the partial income procedure). Nevertheless, we also want to prove this in figures:

EUR 165.400,000 x 1.5% = EUR 2.481,000 corporate tax

7.2.2. Calculation of capital gains tax on distribution of profits to Dieter Büchl

However, we would also like to remind you that the amount remaining in the holding company after payment of corporate tax can potentially be distributed to the shareholder of the postulated holding company, Dieter Büchl. However, in such a case, there is a renewed taxation at the level of the shareholder. For this purpose, we calculate the applicable capital gains tax as follows:

EUR 165.400,000 – EUR 2.481,000 = EUR 162,919.000 distributed profit after tax

EUR 162,919.000 x 25 % = EUR 40,729,750 Capital gains tax

Capital gains tax EUR 40,729,750 + Corporate income tax EUR 2,481,000 = EUR 43,210,750 total taxes

As can be seen from the comparison to the income tax Dieter Büchls when using the partial income procedure, only a small advantage remains if the holding company distributes the entire amount to its shareholder. Therefore, we assume that no major distribution will be made by the holding company, but that the profit is intended for future investments. In any case, after the great success of the bottlenpost, we can look forward to the next big coup by Dieter Büchl.