Business succession in Germany: direct buyer for B2B service companies

How is the value of my company (enterprise value) calculated?

In the Mittelstand, company value depends mainly on the quality of cash flows and operating stability. Independence from the owner, recurring revenue and a scalable business model together define the lasting value for buyers.

What is adjusted EBITDA and why is it higher than my profit?

Adjusted EBITDA is the true operating earnings of your company, adjusted for personal costs. We take out private expenses (car, travel) and above-market managing director salaries. Because the purchase price is a multiple of this figure, every euro of adjustment raises your sale price noticeably.

What do I keep after the sale (enterprise value vs. equity value)?

Enterprise value is the value of the operating business (gross). Equity value is what actually lands in your account (net). The equity bridge: enterprise value minus bank debt plus cash on hand. You sell debt-free but usually keep the cash.

What does the working capital adjustment mean?

The working capital adjustment protects the buyer from taking over a hollowed-out company. If current assets (inventory, receivables) at handover are below the average of the last 12 months, the price goes down. If they are above, you receive a top-up payment.

What is an earn-out and do I have to accept it?

An earn-out is a variable part of the purchase price (often 10 to 20 %) that is paid later, once revenue targets are met. For you as the seller, that is a risk. We aim to maximise the fixed part (cash at closing) so you have certainty from day one.

Share deal or asset deal: which is better for me on tax?

Whether a share deal or an asset deal makes more sense for tax depends on legal form, shareholder structure, hidden reserves and buyer requirements. For GmbH shares, a share deal is often favourable for sellers. Model the actual tax effect early with specialised tax advisors.

How much tax do I pay on the sale?

That depends on legal form, holding period, shareholder structure and the type of transaction. Holding structures, the partial income method, allowances or reduced tax rates can apply, but each case needs a tax review.

What is the difference between signing and closing?

Signing is the notary appointment (signature). Ownership does not pass yet. Closing is completion (payment and share transfer), often 4 to 8 weeks later, once conditions such as bank approvals are met.

Which warranties do I give in the purchase agreement?

You warrant that you own the shares (title), that the accounts are correct (financials) and that all taxes have been paid (taxes). We cap this liability in time and amount so you can sleep well after the sale.

What happens to my long-serving employees?

Employee rights in a transfer of business are protected by law, in particular by § 613a BGB. Which duties and dismissal protection rules apply depends on the transaction structure and the individual case. For buyers, a stable team is regularly a key value driver.

Does my company name stay?

In most cases, yes. Financial investors buy your brand and your reputation. A rename would unsettle customers and destroy goodwill. Unlike corporates, which often integrate, financial investors usually keep the identity.

Strategic buyer or financial investor: who fits better?

A strategic buyer (competitor) often pays more but integrates your company fully, and the brand disappears. A financial investor (private equity) often keeps your company independent in operations, values the management and secures the life's work as an independent unit.

How long does the sale process take?

When you sell to us, closing usually takes place 6 to 9 months after the first call. The process has five steps. 1. Confidential enquiry. We usually reply within 72 hours. 2. First call. 30 minutes with a Managing Partner. 3. Indicative offer. Within 2 to 4 weeks, under NDA if you wish. 4. Due diligence and contract. Closing usually 6 to 9 months after the first call. 5. Handover. You stay on as managing director for 6 to 24 months.

What does due diligence examine?

The buyer checks four areas for risk: financials (is the profit real?), legal (are contracts clean?), tax (are there back-payment risks?) and market (how stable are the customers?). We prepare this data with you so there are no surprises.

How is confidentiality secured? Will my employees find out?

Discretion comes first. We use anonymised short profiles for the first approach; details follow only after a non-disclosure agreement (NDA). When employees are informed is planned carefully from a legal, communication and operating point of view.

Do I really need an M&A advisor?

A sale is more complex than running the business. An experienced advisor can improve buyer quality, competition, process certainty and contract structure. The effect on price depends heavily on the company, the market phase and how the process is run.

Can I retire right after the sale?

With us, you usually stay on as managing director for 6 to 24 months after closing. During that time you hand over customers and team in an orderly way. We fix the exact period together in the purchase agreement.

How do I reduce the company's dependence on me as the owner?

To raise the value, make yourself dispensable. 1. Build a second management level. 2. Document knowledge. 3. Hand key customers over to employees. A company that runs without its owner is worth considerably more.

What is a rollover (reinvestment)?

Buyers often ask you to reinvest 10 to 20 % of the proceeds in the new company. It shows your confidence (skin in the game). When the group is sold later, you share in the value growth again. That is often a very attractive investment.

What is a vendor loan?

With a vendor loan, the seller defers part of the purchase price as a loan. Term, interest, ranking and security are negotiable and need careful review, because the seller keeps a credit risk.