Sell-Side - We accompany you during your company sale in the DACH region
Selling with PALLAS CAPITAL Corporate Solutions
More than 80% of our client base consists of medium-sized companies and hidden champions who are ready to sell shares of their company to a suitable partner for the right value.
Our service promise is to optimize the legal, financial and operational framework in the interest of our clients through our targeted approach and a structured process.
Our clients basically act from a position of strength and do NOT have any pressure to sell shares due to their sustainable positive earnings situation.
Average customer
Ø Revenue
EUR 33 million
Ø EBITDA-MARGIN
16%
Ø Number of Employees
205
Ø Number of shareholders
2
Ø Number of companies
3
Customer requirements
Location
DACH region + South Tyrol
Sustainable existence
> 5 years
Sales
EUR 5 million
Operating result
EUR 750,000 EUR
Number of Employees
30
Your advantages
- Over 16 years of transaction experience
- Owner managed structure
- Network with over 1,000 buyer groups
- Annual talks with well over 1,000 entrepreneurs
- Cross-sector knowledge through broad customer base
- Dynamically growing team
In which regions does PALLAS CAPITAL operate?
PALLAS CAPITAL Corporate Solutions
What do you as an entrepreneur:in pay attention to when selling a company?
Choose the right time
The most common question that is raised even before the delicate topic of valuation is the question of the right time for a possible sale of shares. Unfortunately, there is no all-encompassing answer to this question, as each company is as individual as the entrepreneurial personality behind it. Thus, the situation from which one acts is of much greater importance, because it should be a position of strength.
The company should be on the way to owner-independent management from the structure, so that you as the owner are no longer absolutely necessary for the day-to-day operations.
It strongly benefits you to seek a second level of management early on. The internal structure should be at a level of controlling that ensures the highest possible transparency and enables up-to-date reporting.
The transaction – whether succession, minority or majority sale or financing – should be approached with sufficient lead time, as such a process typically lasts between 3 and 12 months and it is extremely valuable for a negotiation not to feel any time pressure. So acting with foresight in this context ensures a much stronger position for a negotiation with tougher stakes.
Definition of desire partner
It is important to get an overview of the basic options for partner integration or a takeover strategy and to define the corridor of a possible solution for yourself, without going into this topic with blinders on. In preparation, it can help to remind yourself which aspects are a prerequisite and which are absolutely unacceptable.
Should the new partner be someone who can provide sales support to your company? Should he be able to bring management capabilities to your company? Would expanded production capabilities be of interest to your business? Possibly someone who already has administrative operations and overhead would be useful, allowing you to outsource certain internal operations and processes to take advantage of cost synergies?
Data and information basis
In order to provide the potential partners with the truest possible insight, it is advisable to have a uniform information brochure, which is mostly called an Investment Memorandum (IM) in the context of M&A transactions. The basis takes into account the past, the present as well as the future.
In order to provide a realistic picture of the company’s actual earnings situation, it is important to adjust the company’s results for non-operating expenses that are not attributable to business operations.
Even superficial aspects such as external appearance are points that contribute significantly to perception and can have an effect on the external view, so it makes sense to keep the obvious data up to date or even to update the entire external appearance.
In order to assess the tax effect of a transaction and, if necessary, to implement restructuring measures under company law with foresight, it is advisable to consult with a tax advisor experienced in transactions at an early stage. Depending on the initial situation, it may be possible to reduce the tax burden by means of a clever structure.
Evaluation
The big question of the adequate valuation of a company has countless facets. There are now very many methodologies that are applied in a wide variety of cases. Among other things, the valuation is strongly oriented towards the absolute scale, the percentage margin, the business model, the sustainability and the maturity of the company.
Probably the most common and tangible method to approximate the value of a small and medium-sized company is the multiple method. The basic idea is conceivably simple, in that the buyer multiplies the sustainable earnings of the company he wishes to acquire by a number that he feels is appropriate.
While the basic idea is quite simple, the aspect of the “real” sustainable earnings power of the company as well as the right multiples are typical discussion points in the mentioned method. The final price of a company is determined by the basic principle of the free market, so that supply and demand probably have the strongest influence on the price actually paid.
If you are seriously considering selling your company, you should definitely obtain alternative offers in order to be able to make a comparison and create a competitive situation among the buyers.
Sequence of a typical company sale
Step 1
Preparation
- Documents
- Financial planning
- Longlist
Step 2
Address
- Q&A
- Management presentation
Step 3
Negotiation
- Indikationen
- LOI
- Exklusivität
Step 4
Durchführung
- Due Diligence
- SPA / APA
- Signing & Closing
