German financial services group Wüstenrot & Württembergische AG (W&W) have acquired 75% of the share in Munich-based FinTech company treefin AG. This marks an important step in W&W Group’s digital strategy.
In 2015, Treefin AG launched its self-developed finance assistant on the market with great success. The product supports its user as constant companion for financial services. Furthermore, the app is able to recognise areas for improvement and optimization of financial services used, as well as a way to detect cost cutting possibilities and notifies the user accordingly. The digital finance assistant is tailored to the needs of W&W customers and will be made available to such customers during the course of this year.
This transaction is the first takeover of an InsurTech startup by a listed insurance company.
Interview with Christian R. Kast, Attorney at Anwaltscontor Lindwurmstrasse
Please tell me about your involvement in the deal?
I was involved in the transaction as I am a specialist in Information Technology law and am experienced in deals involving intellectual property rights, as well as legal-technical challenges in regards to modern technology, as developed by Treefin. This transaction was the first takeover of an InsurTech start up by a listed insurance company; the deal structure had to respect the different structures of both companies engaged in this deal.
My special focus in this deal was implementing the IP and IT contracts in the overall transaction process. It was crucial for the buyer to secure all technology related rights and to assure that Treefin can provide its existing services to the market and extend the services for the customers of the new shareholder. My role was to structure the IT and IP contracts and identifying and solving interdependencies to the acquiring contracts.
Why is this a good deal for all involved?
With this transaction, W&W as buyer in the majority stake of Treefin did not only acquire a modern, technology driven company, but also a team experienced in the relevant markets and the technology involved. All parties agreed that Treefin provides its services and technology within the W&W Group as well as generally in the market. Both aspects were included in the contracts and met the expectations of all participants.
What challenges arose? How did you navigate them?
One of the biggest challenges was to implement the technology driven contracts in parallel to the “classical” merger contracts. Normally these contracts are not affected in a way as they were within this deal; different W&W group companies and different legal areas had to be considered. We formed two teams, one implementing the deal structure, the other implementing the technical contracts. Both teams on buyer and seller side included technical and legal team members. The navigation through the tasks worked well, as both legal teams (M&A and IT/IP) on each side were well connected and worked seamlessly as one team in respect to the complete deal.
