How we approach it
Selling your business: how we run the process
Fischer | Konrad in Münster has, for more than 15 years, advised shareholders across Germany on M&A processes – with strategic buyers and in the private-equity universe. M&A stands for Mergers & Acquisitions and is the umbrella term for transactions on companies (acquisitions, sales and integrations).
Our services for a successful business sale cover the entire transaction process. Many years of running deals have taught us that no two sales are the same. The individual steps therefore vary from case to case. We are glad to roll up our sleeves with you and take on the process side by side:
Our mandates range from owner-run trade businesses to international corporate groups – the focus is on the German Mittelstand.
Succession is the most common reason for selling a company. Our focus is external succession – a sale to the existing management team (MBO), to an incoming external manager (MBI), or to strategic buyers and investors.
In 3 of our published sale mandates the buyer was based outside Germany – including the Netherlands, Norway and the USA.
Exit readiness: getting the business ready to sell
- Detailed pre-analysis
- Establishing exit readiness and lasting value uplift
- Building a tailored equity story
- Preparing a complete set of transaction documents
Targeted buyer outreach in the mid-market
- Defining a specific buyer profile
- Identifying potential buyers
- Initial contact and dialogue with interested parties
Price negotiation and due diligence
- Purchase-price negotiation
- Data-room management
- Co-ordination of the buyer’s due diligence
- Sequencing all the moving parts of the transaction
Why Fischer | Konrad?
Successful business sales: references & case studies
Because preparing the process is complex and buyers’ interests are not always easy to read, it is sound practice to bring in an experienced advisor to run a business sale. Fischer | Konrad, based in Münster (Westphalia), has a broad network of private-equity and strategic investors and deep expertise in corporate finance and business valuation. Benefit from more than 15 years of experience across many successful transactions:
What is my business worth?
Enterprise value in a business sale
Fischer | Konrad offers comprehensive business-valuation services – from a value analysis through to a full report under IDW S 1. Read more about the strengths and limitations of the common valuation methods.
Multiples in a business sale: complexity reduced to rules of thumb
In corporate transactions, business valuation plays a central role. While court proceedings and tax matters typically rely on objectivised valuations using detailed discounted-cashflow methods, in an M&A context we generally see so-called multiples.
Here, market value is derived by applying a multiplier – the multiple – to a company-specific metric, often revenue or operating profit (EBIT or EBITDA). Multiples can be drawn from a range of sources: capital-market data or expert estimates. Most strategic buyers and private-equity houses have their own view of what multiples they are willing to pay in a given industry and under given conditions.
From enterprise value to purchase price: the bridge as a smaller lever
A decisive element of any multiple-based price discovery is the bridge from enterprise value to purchase price – a step on which many sellers stumble. Companies are often sold virtually or actually on a "cash- and debt-free" basis: cash and debt are assumed to stay with the seller.
Although relatively clearly defined in principle, the question of which balance-sheet items should count as cash, which as debt, what belongs in working capital, and what counts as a representative target working capital is often only negotiated late in the process.
Normalisations of revenue and EBIT: the bigger lever
The essential input to the multiple is the corresponding base – typically revenue or operating profit (EBIT or EBITDA). In practice, averages are used on the one hand, and the reported figures are normalised for non-recurring items on the other.
However, in the early stage of a transaction, with multiples already agreed, the unadjusted accounting figures are sometimes taken as the basis for an indicative price. As the process moves on, prospective buyers then propose extensive normalisations based on weaknesses they have identified.
What really counts in the final purchase price?
Where the various levers and price adjustments are transparent and clear to everyone involved, our experience is that it does not matter how the purchase price is constructed arithmetically in the end. What matters is that no hidden back doors remain – to be opened by the buyer late in the process.
Why a process advisor?
Maximising the purchase price in a business sale
From the seller’s point of view, maximising the price rests on several pillars:
(1.) an understanding of buyer and seller profiles and motivations, (2.) clean preparation of the transaction, (3.) an investor network and negotiating tactics.
What buyers in the mid-market are looking for
The reasons for M&A transactions are very varied and case-specific. On the sell side, one often finds businesses without a suitable internal successor, or facing a structural shift in their competitive environment. The seller’s interests are not purely financial.
The buy side typically divides into strategic and financial investors, though the lines can blur. Strategic investors see the acquisition as a long-term investment with the aim of growth. Financial investors – for example private-equity firms or family offices – may also view the acquisition as an extension of an existing portfolio.
Exit readiness: how we get your business ready to sell
Although the purchase price for a business is, in principle, paid for its future potential, the starting point is the current state of the business. To set up the right conditions, the transaction perimeter must be clearly defined, and any entanglements with the owners’ private sphere unwound.
The transaction advisor jointly develops an equity story with the business – a narrative that extends today’s position consistently into the future of the market. The financial analyses are summarised in an information memorandum, which forms the basis for the initial price discussions.
Negotiating strength from valuation depth
To keep your hands on the wheel during price negotiations, careful preparation pays. That means, first, understanding the offers brought forward by prospective buyers. As the process moves on, it is also a major advantage if the relevant documents are already in place and the key analyses already done. That preparation comes out of our valuation practice: whoever derived the enterprise value themselves can see where a normalisation or the equity bridge moves the price in a buyer's offer, and can push back.
How long does a sale take?
The transaction process at Fischer | Konrad
The M&A process up to completion of the share purchase agreement can be split into three high-level phases: preparation, investor search and transaction.
Fischer | Konrad provides substantive support at every phase of an M&A project and contributes sustainably to the success of your business sale. Overall, we expect a sale process to take around 8 to 12 months.
The actual timeline depends strongly on the case at hand and the surrounding conditions. Preparation planned well in advance increases the probability of a swift and successful transaction.
Phase 1: preparation and exit readiness
The preparation phase begins when you, as the entrepreneur, get in touch with us as an experienced M&A advisor. In this phase we define the strategy, the objectives and the core competencies of the business on offer. We also carry out an indicative valuation. For establishing investor readiness and producing the necessary documents, we typically allow around three months.
Phase 2: buyer outreach & LOI
The investor search begins with putting together a longlist of potential investors. The initial contact is made anonymously by Fischer | Konrad. If a buyer’s interest persists, a non-disclosure agreement (NDA) is signed. A first round of negotiations follows, at the end of which the buyer is asked to submit a letter of intent (LOI).
Phase 3: due diligence and signing
If the non-binding offer falls within the previously agreed price range, due diligence begins. In parallel, intensive negotiations on the actual purchase price typically take place. If both end positively, a share purchase agreement (SPA) is negotiated and the transaction becomes legally effective on signing and closing.
Support across all phases of the sale
Corporate transactions have taken on an increasingly important role over the last few years. For buyers and sellers alike it is therefore sensible to bring in an M&A advisor. That way, the entrepreneur is not pulled out of day-to-day business and can continue to look after operations.
Frequently asked questions