Frequently Asked Questions

Whether you receive the proceeds of the sale directly into your account depends on the transaction structure. In an asset-liability transaction, the agreed purchase price is usually paid directly upon transfer. In a stock sale, payment may be made all at once, but often part of the proceeds are deferred through an earn-out arrangement, where payments depend on future performance of the business, or through a vendor loan, where the seller partially finances the buyer. In addition, tax must be paid on the sale proceeds, depending on the legal form of the company. The exact tax impact and possible optimization strategies depend on the specific situation. An M&A advisor can help structure the deal and advise on tax optimization to avoid unnecessary tax burdens.

A pre-exit is a partial sale of the company to a private equity (PE) party, where the entrepreneur retains a minority stake and remains active in a management or advisory role. This allows the entrepreneur to free up capital while still benefiting from future capital appreciation. PE investors often adopt this strategy to keep the entrepreneur on board, as his knowledge and network are essential for further growth. A full sale (true exit) follows later, often at a higher valuation.

An earn-out is a payment structure in which a portion of the sales price depends on the company's future performance. In addition to an initial payment, the seller receives additional compensation if predetermined financial or operational goals are met, often revenue growth or EBITDA margin
improvement. This is used to share risk between buyer and seller and to keep the entrepreneur involved after the acquisition.

A merger occurs when two companies continue together as one new entity. In an acquisition, a company buys another company, which is either integrated or continues as a subsidiary. In the Netherlands, among unlisted companies, acquisitions take place almost exclusively.

There are several options when selling a business. The right choice depends on your strategic goals and the nature of your business. There are three main types of buyers: strategic buyers (competitors, customers, suppliers, or companies with complementary services, or companies with the same services in another geography), financial buyers (PE for stand-alone or add-on (explain), and individual buyers (management buy-out, management buy-in, family members or internal succession).

A management buyout (MBO) is a corporate acquisition in which current management buys the company from the owner, often financed by private equity or outside investor(s). This ensures continuity and retention of internal expertise.

A management buy-in (MBI) occurs when an outside management team takes over a company and assumes leadership. This often occurs when no internal succession is available or when new expertise is needed for continued growth.

An entrepreneur buy-in (OBI) occurs when an outside entrepreneur (who has previously owned and possibly sold businesses) takes over a company and puts it in charge. This often happens when no internal succession is available or when new expertise is needed for further growth, similar to MBI. The big difference is only that banks are willing to finance much more because the entrepreneur has a proven track record, especially if the business to be taken over resembles the previous success.

A Private Equity stand-alone investment involves a PE fund buying and optimizing a company independently. An add-on investment involves adding a company to an existing company in the PE's investment portfolio as part of a buy-and-build strategy. This increases economies of scale, creates synergies and often increases the overall value of the group. By combining several companies, the whole can be sold at a more favorable valuation than the individual parts.

The difference between Private Equity (PE) and Venture Capital (VC) is in the investment stage and risk profile. PE invests in mature, profitable companies with growth potential and focuses on returns through efficiency and scale. VC focuses on start-ups (often not yet profitable or even "pre-revenue") and high-growth companies with high risk and high potential growth, often in technology and innovation.

As potential buyers look for companies that are future-proof, it is important to reduce various risks in the preparatory phase. These include optimizing the legal and tax structure (often with years of waiting), improving financial and commercial data and reporting, reducing dependence on the DGA, suppliers and customers, standardizing and documenting business processes, and securing long-term contracts and permits...

For a sales process you need: financial data (balance sheet and profit and loss statement of last 3-5 years), commercial data (e.g. sales per product/service, per (type of) customer per month), and legal data (licenses, leases).

To sell a business, the M&A advisor needs the following financial data: the financial statements (balance sheet and income statement) for the past three years of the entities being sold. These statements must be approved by an auditor. If this is not yet the case for the last year, preliminary financial statements are sufficient. Ideally, the entrepreneur should provide financial data for the past five years, including a complete balance sheet with stock development by month, a monthly profit and loss statement, and an annual cash flow statement (but this is not mandatory).

To sell a business, the M&A advisor needs the following commercial data
needed: annual (ideally monthly) sales data by region,
product category and customer. Insight into customer retention and duration of customer relationships,
as well as the extent of recurring sales through subscriptions or long-term contracts.
Growth forecasts can provide additional value.

To sell a business, the M&A advisor needs the following legal data
needed: relevant licenses and an overview of the holding structure. Contracts
with customers, suppliers, employees and landlords must be transparent and
transferable. Intellectual property rights such as patents and
trademarks must be documented. Tax liabilities, such as deferred
taxes and pending tax claims, are critical to due diligence.

By appointing a strong management team in a timely manner that can independently take operational
and strategic direction. This increases sales value and continuity. You
know that management is ready to sell when you no longer have to deal with the day-to-day
operational activities, and the management team has
complementary skills and a clear division of roles.

After the sale of a business, the former owner can remain involved in
various roles, depending on the agreements with the buyer and the degree of influence desired
of influence. For example, private equity buyers often expect the entrepreneur to
stay on for several more years, active in operations or as an advisor, to ensure stability
ensure stability and/or achieve a smooth management transition. Many
common roles after the sale are advisor, Supervisory Board member (on SB), business
development (opening new location(s), developing new service),
commercial role (contact for large customers / relationship management), and also
sometimes R&D / innovation.

In most cases, this is done in phases, depending on the type of sale, the
company culture and the certainty of the deal. When the business owner decides to
sell, first the Supervisory Board (and optionally the Board of
Advisory Board) should be informed, followed by management and finally the
staff. Often the CFO is informed shortly after the SB (within a few days),
as well as the head of HR. After that, depending on cultural openness,
management layers and key employees are informed. The type of buyer plays a role:
strategic buyers often prefer discretion until the transaction is
completed, while private equity buyers may be more likely to need involvement from
management for a smooth transfer. All other employees
are often not notified until the transaction is fully completed (read: money in the
account and signing at the notary, typically 6-12 months after appointing
of an M&A advisor). An M&A advisor is usually engaged after consultation
with the SB and guides the entrepreneur through this process, providing advice
on who should be informed when.

Discretion during an M&A process is ensured through anonymity in buyer approaches via code names, anonymized information and NDAs, limited internal communications involving only key personnel, and the use of secure communication channels such as private emails or external platforms. Confidential documents are shared through a secure data room with strict access control. Contractual agreements such as NDAs and non-solicitation clauses protect company-sensitive information. Discussions with potential buyers often take place in neutral locations to avoid speculation, and public communication about the transaction occurs only after completion of legal approvals.

Whether you receive the proceeds of the sale directly into your account depends on the transaction structure. In an asset-liability transaction, the agreed purchase price is usually paid directly upon transfer. In a stock sale, payment may be made all at once, but often part of the proceeds are deferred through an earn-out arrangement, where payments depend on future performance of the business, or through a vendor loan, where the seller partially finances the buyer. In addition, tax must be paid on the sale proceeds, depending on the legal form of the company. The exact tax impact and possible optimization strategies depend on the specific situation. An M&A advisor can help structure the deal and advise on tax optimization to avoid unnecessary tax burdens.

A pre-exit is a partial sale of the company to a private equity (PE) party, where the entrepreneur retains a minority stake and remains active in a management or advisory role. This allows the entrepreneur to free up capital while still benefiting from future capital appreciation. PE investors often adopt this strategy to keep the entrepreneur on board, as his knowledge and network are essential for further growth. A full sale (true exit) follows later, often at a higher valuation.

An earn-out is a payment structure in which a portion of the sales price depends on the company's future performance. In addition to an initial payment, the seller receives additional compensation if predetermined financial or operational goals are met, often revenue growth or EBITDA margin
improvement. This is used to share risk between buyer and seller and to keep the entrepreneur involved after the acquisition.

A merger occurs when two companies continue together as one new entity. In an acquisition, a company buys another company, which is either integrated or continues as a subsidiary. In the Netherlands, among unlisted companies, acquisitions take place almost exclusively.

Most M&A processes take 6 to 12 months on average, depending on the complexity of the transaction, the speed and completeness of supplied financial and commercial data, and the level of interest from the market. Factors such as due diligence, negotiation process and the willingness of both parties to reach an agreement influence the turnaround time.

An LOI (Letter of Intent) is a preliminary agreement in which buyer and seller lay out the main agreements about an acquisition or investment. It is not a final sale, but does lay out the intentions, terms and timeline.

An LOI is usually signed after both parties are interested and key terms such as price, structure, exclusivity and possible earn-outs are discussed, but before due diligence and the final agreement takes place.

As potential buyers look for companies that are future-proof, it is important to reduce various risks in the preparatory phase. These include optimizing the legal and tax structure (often with years of waiting), improving financial and commercial data and reporting, reducing dependence on the DGA, suppliers and customers, standardizing and documenting business processes, and securing long-term contracts and permits...

For a sales process you need: financial data (balance sheet and profit and loss statement of last 3-5 years), commercial data (e.g. sales per product/service, per (type of) customer per month), and legal data (licenses, leases).

To sell a business, the M&A advisor needs the following financial data: the financial statements (balance sheet and income statement) for the past three years of the entities being sold. These statements must be approved by an auditor. If this is not yet the case for the last year, preliminary financial statements are sufficient. Ideally, the entrepreneur should provide financial data for the past five years, including a complete balance sheet with stock development by month, a monthly profit and loss statement, and an annual cash flow statement (but this is not mandatory).

To sell a business, the M&A advisor needs the following commercial data
needed: annual (ideally monthly) sales data by region,
product category and customer. Insight into customer retention and duration of customer relationships,
as well as the extent of recurring sales through subscriptions or long-term contracts.
Growth forecasts can provide additional value.

To sell a business, the M&A advisor needs the following legal data
needed: relevant licenses and an overview of the holding structure. Contracts
with customers, suppliers, employees and landlords must be transparent and
transferable. Intellectual property rights such as patents and
trademarks must be documented. Tax liabilities, such as deferred
taxes and pending tax claims, are critical to due diligence.

By appointing a strong management team in a timely manner that can independently take operational
and strategic direction. This increases sales value and continuity. You
know that management is ready to sell when you no longer have to deal with the day-to-day
operational activities, and the management team has
complementary skills and a clear division of roles.