Business sale · Succession
Selling a business: valuing it, finding the right buyer and securing the sale
You will sell your business only once. The buyer across the table does this regularly. The gap is not in the headline price — it lies in the clauses that decide how much you actually receive. Our role is to restore that balance when selling a business worth EUR 1–200 million.
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Selling a business is not a transaction, it is a process — and most disappointing sales did not fail at the negotiation stage. They failed twelve months earlier, when nobody prepared the company for scrutiny, or when only one buyer was brought into the loop.
This page covers the entire journey: when to sell, how to prepare, how to value the business, what the tax rules say, how to find several buyers without information leaking, what is negotiated after the price, and what remains your responsibility once the deal is signed.
01 · Timing
When to sell your business: the three clocks
Three timetables govern a business sale, and they are rarely aligned. Bringing them together, at least partly, is the first task.
The personal clock
Retirement, a change of direction, fatigue, a health issue, disagreement between shareholders. This is the most demanding clock because it does not wait — and it is also the most expensive one when it sets the pace. An owner who has to sell, sells less well. The buyer senses it within the first minutes of a conversation.
The company clock
A company sells best when it still has a trajectory ahead of it. A growing business with a full order book and recent investment is priced on what it will produce. The same company three years later, with ageing equipment and an owner who has eased off, is priced on what it still produces.
The market clock
Transaction multiples are not stable. They depend on the cost of debt, the appetite of investment funds and the consolidation dynamics of your sector. A favourable window can justify bringing a project forward by eighteen months; a downturn can justify waiting.
The most valuable principle
Preparation starts two to three years before going to market, not three months before. This lead time is not a luxury: it allows you to address dependence on the owner, clean up the accounts, secure contracts and settle the ownership structure — four workstreams that, if rushed, all end up costing you on price.
02 · Preparation
Preparing your company for scrutiny
A buyer is not looking for what works well: they are looking for what could go wrong. Every area of uncertainty they uncover becomes a reason for a discount or an additional warranty. Preparation therefore means reducing those areas of uncertainty, one by one.
The six workstreams for getting your house in order
Dependence on the owner. This is the leading cause of discounts on an SME. If customer relationships, technical knowledge and decisions all go through you, the buyer is buying a risk. Genuinely delegating, documenting processes and developing a second tier of management takes two years — and is worth several turns of multiple.
Quality of the accounts. Accounts filed on time, interim figures available, management accounts readable by business line. Bookkeeping that cannot reconstruct a margin per product line forces the buyer to assume the worst.
Contracts. Written, up-to-date customer and supplier contracts, with no change-of-control clause allowing a partner to walk away if the business is sold. This specific point derails deals.
Customer concentration. A customer accounting for more than 25–30% of revenue changes the nature of the asset being sold. If diversification is not possible in the short term, the length of the relationship and its contractual basis must be documented.
Scope. Property held in the company, personal assets, dormant subsidiaries, shareholder current accounts: whatever is not meant to be sold must be taken out beforehand, with the tax consequences anticipated.
Intellectual property and licences. Trademarks registered in the right name, software properly licensed, certifications and approvals up to date — and above all, transferable on a change of control.
The adjustments the buyer will make anyway
You may as well make them yourself. The EBITDA the buyer will use is almost never the one in your tax return: owner's pay normalised to a market level, rent paid to your property company brought back to market terms, personal expenses booked in the company added back, non-recurring items stripped out, leases reclassified as debt. A gap of 15–25% between the two measures is common, and it feeds straight through to the price via the multiple.
Knowing it before the buyer does changes the nature of the negotiation: instead of having an adjustment imposed on you, you debate how it is calculated.
03 · Valuation
What your business is worth
No method gives you “the” price. Three approaches are cross-checked to establish a range; it is the consistency between them that makes a position defensible in front of a buyer.
The three approaches
In the French SME market, observed multiples most often range from 4 to 8 times adjusted EBITDA. Where a business falls within that range depends on identifiable factors — and ones you can act on.
What moves the multiple
The most underestimated lever
The last row of the table is often worth more than all the others. Price is not decided in a spreadsheet; it is decided in a room where several buyers know they are not alone. That is the whole point of an organised process — and it is what an owner negotiating privately with a single buyer cannot achieve.
From enterprise value to equity price
A costly confusion: the multiple gives you an enterprise value, not the price you will receive. Moving from one to the other involves negotiated adjustments: deduction of net financial debt, correction of working capital against a normalised level, treatment of non-operating items. A completion accounts mechanism, based on accounts drawn up at the sale date, is standard.
The definition of net debt and the calculation of normalised working capital are negotiated as hard as the multiple itself — and often move comparable amounts. Learn more about valuation methods.
04 · Structure
Share sale or asset sale
Two structures are available, with very different consequences for each party.
Transfer of the shares: the buyer takes over the entire company, with its assets and historical liabilities, its contracts and its track record. Generally more tax-efficient for the seller, but in return the buyer will require extensive warranties and indemnities.
Transfer of the operating assets only — customers, trading name, equipment, lease rights — without the past liabilities. Reassuring for the buyer, but the seller keeps the empty shell company, its liabilities and the tax due on extracting the sale proceeds.
Two situations deserve a special mention.
Selling a subsidiary or a business unit requires carve-out work beforehand: defining the scope, rebuilding dedicated accounts, separating shared functions, identifying the contracts to transfer. Selling a subsidiary or a business unit.
Family succession follows a different logic: price is no longer the only criterion; continuity and the tax regime for the transfer take precedence. Preparing a family business succession.
05 · Tax
What you will actually receive: tax on the sale
It is the question every seller asks and few resources address: between the signed price and the amount available to you, the gap is considerable. The main principles below describe the French framework applicable to individuals selling company shares.
The standard regime
A capital gain on the sale of shares by an individual is, by default, subject to the French flat tax (prélèvement forfaitaire unique) at an overall rate of 30% — 12.8% income tax and 17.2% social charges. Opting for the progressive income tax scale remains possible; the option applies to all investment income for the year and is only advantageous in specific situations.
An exceptional contribution on high incomes may also apply above certain reference taxable income thresholds.
The allowance for owners retiring
A fixed allowance on the capital gain may apply when the owner sells their shares on retirement, subject to strict conditions: holding period, actual exercise of management functions, stepping down from those functions and retiring within a set window around the sale. A frequently misunderstood point: this allowance reduces income tax, not social charges, which remain due on the full gain.
Contribution to a holding company before the sale: tax deferral
An owner who contributes their shares to a holding company they control, before the sale, may benefit from a tax deferral on the gain arising on the contribution. This mechanism is not an exemption: it is a postponement, with obligations attached. If the holding company sells the shares shortly after the contribution, it must reinvest a substantial portion of the proceeds in an eligible economic activity within a strict deadline, or the deferral falls away.
This structure is powerful when a genuine reinvestment project exists. It is a trap when it is set up purely for tax optimisation with no project behind it: the reinvestment timetable then becomes a constraint you have to live with.
The Dutreil pact — an important nuance
The Dutreil pact is regularly mentioned in conversations about selling. It actually concerns transfers for no consideration — gifts and inheritance — and, subject to collective then individual undertakings to retain the shares and to hold a management position, provides a substantial partial exemption from transfer duties. It does not apply to a sale. It does, however, become central as soon as the project includes an element of family succession. Understanding the Dutreil pact.
Necessary caveat
These points describe general principles at the time of writing. Thresholds, rates, periods and conditions change regularly, and how they apply depends entirely on your personal situation and the structure of your share capital. These choices are for your tax adviser and must be settled before signing — not after. We are not tax advisers: our role is to ensure that the deal structure does not rule out the options your tax adviser has chosen.
06 · Buyers
Who buys your business — and why they do not pay the same price
A common mistake is to treat all buyers as a single category. They value differently, finance themselves differently and do not have the same requirements.
They pay for market share and cost synergies. They understand your business immediately, which speeds up the process. On the other hand, this is where the confidentiality risk is highest — and they will gather a great deal of information during due diligence.
Often the highest bidder, because their synergies are unique to them: access to your channel, your customers, a certification they lack. They are also the hardest to identify — which is precisely what semantic sourcing makes possible.
Fast, rigorous, with a well-honed process. They value recurring revenue and the company's capacity to carry debt. They will require impeccable documentation and, often, that you stay on for a transition period.
Common on deals of EUR 1–10 million. Their financing capacity must be checked very early: available equity, bank agreement in principle, possible use of vendor financing. An enthusiastic buyer without financing costs you six months.
Sourcing by semantic analysis
The traditional approach limits outreach to personal networks and financial databases. Yet these only capture around 30% of the companies in a market: nearly 70% of owners do not publish their accounts. On top of that, activity classification codes are imprecise: they describe companies as they declared themselves, not as they actually operate.
Our semantic search engine works differently: it builds the language cluster specific to the buyers relevant to your company — industry vocabulary, markets served, positioning — then uses it to identify every group likely to be interested, in France and abroad, in the language of each market.
This is what brings complementary buyers to the surface: those outside your declared sector, whom you do not know, and who are often the most willing to pay. Discover the DEAL Diamond method · Understand a buyer's acquisitive growth logic · How a buyer assesses an opportunity.
07 · Confidentiality
Protecting information at every stage
A leak about a planned sale worries employees, alerts competitors and weakens customer relationships. Protection does not rest on a single document but on a gradation: each level of information matches a level of commitment from the buyer.
One or two pages describing the business, its size, geography and strengths, without allowing the company to be identified. Writing it is a delicate exercise: precise enough to spark interest, generic enough to stay anonymous. It is the most widely circulated document.
Based on your criteria — activity, geography, size — and the relevant companies you already know, we formalise the language universe specific to your target: technical vocabulary, product names, sales wording, differences between competitors. It is this cluster, not an industry code, that defines the search scope.
Signed before any identifying information is shared. The points that really matter: the scope of the information covered, the duration, the non-solicitation clause for employees and customers, and what happens to documents if discussions fail. What makes an NDA hold.
The full file: history, market, offering, customers, organisation, adjusted accounts, projections. It is only sent to candidates who have signed the NDA and shown serious interest. Its quality determines the number of letters of intent received.
Opened once a letter of intent has been received, it gives access to the detailed documents for due diligence. Preparing it in advance is decisive: an incomplete file lengthens timelines and hands the buyer arguments for renegotiation.
The case of the direct competitor
A competitor taking part in the process will, through due diligence, gain a precise view of your margins, customers and supplier terms. If it does not complete the deal, it keeps that information. This does not mean it should be excluded — it is often a strong bidder — but its participation must be sequenced: sensitive information deferred, stronger undertakings and sometimes limited access until a firm offer is made.
08 · Process
The seven stages of a managed sale process
You present your company and your objectives. We analyse the situation and tell you frankly whether we believe we can bring the deal to completion. If we are not convinced, we say so — a mandate launched without conviction serves no one.
Adjustment of the accounts, construction of the value range, drafting of the anonymous teaser and the information memorandum, preparation of the data room.
Building the list through our network and through semantic analysis, in France and internationally. You approve the list before any contact — and can exclude anyone you wish.
Contacting counterparties with the anonymous teaser, signing non-disclosure agreements, sending the memorandum, discussions with serious candidates. The objective: several expressions of interest in parallel, not just one.
Receiving, analysing and comparing offers — on price, but also on structure, timetable, conditions precedent and plans for the business. Understanding the LOI in M&A.
Oversight of financial, legal, employment, tax and environmental due diligence, in coordination with your advisers. Our role is to keep to the timetable and prevent scope creep.
Sale and purchase agreement, warranties and indemnities, conditions precedent, price adjustment mechanism, escrow. Then satisfaction of the conditions, signing and transfer of funds.
When our mission is complete, you have all the expressions of interest the market holds for your project — and the choice to proceed with the one that suits you.
09 · Negotiation
What is negotiated after the price
The headline price is only part of the agreement. Four mechanisms determine what you will actually receive, and when.
Cash at completion and the deferred portion
Few deals are paid in full at completion. Part of the price is often held in escrow as security, another part deferred. The proportion paid in cash is a negotiating point in its own right, at least as important as the total amount.
The earn-out
Additional consideration linked to future performance bridges two diverging valuations. It carries a clear risk for the seller: performance will partly depend on decisions taken by the buyer. If you accept an earn-out, insist that the metrics are simple, measurable without discretionary adjustments, and that your ability to influence them is contractually protected. The earn-out guide.
Vendor financing
Part of the price is paid by the buyer at a later date. It makes the acquisition easier to finance and reassures lenders that the information provided is accurate. In return, you become your buyer's creditor: the security attached to this receivable is decisive. Vendor financing explained.
Post-sale support and non-compete
The length of your involvement after completion, your status and your pay are all negotiated. So is the non-compete clause: its duration and its geographical and sector scope determine your future freedom — and if you are considering a new business venture, it is a clause to read carefully.
10 · Warranties
Warranties and indemnities from the seller's perspective
Warranties and indemnities (the French garantie d'actif et de passif, GAP) commit you to compensating the buyer if a liability arising before the sale comes to light afterwards, or if an asset turns out not to exist or to be overvalued. It is the document that extends your exposure well beyond signing.
The principle to remember: what you disclose, you no longer warrant. Full, documented disclosure in the data room is the best tool for reducing your exposure — far more effective than negotiating the cap line by line. Securing the LOI, due diligence and warranties.
11 · Obligations
Informing and consulting employees: what French law requires
Two separate obligations, often confused, weigh on the timetable and must be built into the reverse schedule from the outset.
Prior information of employees
In companies with fewer than 250 employees, the law requires you to inform employees of a planned sale so that they can make a takeover offer, observing a notice period before the deal is concluded. Failure to comply exposes you to a financial penalty. This obligation surprises many owners: it is in direct tension with the need for confidentiality, which is precisely why its timing must be chosen and prepared, not imposed on you.
Consulting the works council (CSE)
In companies with a social and economic committee (CSE), a consultation is required on transactions affecting the general running of the business. It is independent of the previous obligation, follows its own deadlines, and its opinion must be obtained before the final decision.
These obligations are not formalities: they determine whether the timetable holds and are prepared with your legal advisers several weeks in advance. The guide SME sales and the Hamon law details the deadlines and risks; it is free to download.
12 · Timetable
How long does it take to sell an SME?
Six to twelve months from launching the process to completion, excluding upstream preparation. The phases partly overlap. Timelines lengthen with an incomplete file, a large number of buyers, or poorly anticipated legal information obligations.
13 · Afterwards
After the sale: reinvesting the proceeds and the transition
A sale is not an end point but a turning point. Two issues are dealt with beforehand, not afterwards.
Reinvesting the sale proceeds. Reinvestment in a new business venture, wealth structuring, property, minority stakes: the options are prepared before signing, not least because some of them determine the applicable tax regime. Sale proceeds that arrive with no defined destination are rarely put to good use.
The operational transition. Your presence after completion secures the transfer of customer relationships and continuity for the teams. Its length, your status and your pay are contractual — and its failure is one of the most frequent causes of post-sale disputes. The human factor in M&A · Succeeding with post-acquisition integration.
Our teams can also support the buyer's financing when this helps get the deal done. Obtain financing · Understand what a banking pool will analyse in your buyer.
14 · Our deals
Deals carried out with our teams
Groupe Open · Combination concluded in a few weeks
“Excellent relationship (…) presented us with a perfect target and after several weeks of discussion we completed the acquisition.”
Lindab · Counterparty sourcing
15 · Pitfalls
Seven costly mistakes for a seller
Negotiating with a single buyer. This is the most expensive mistake of all. Without a credible alternative, you have no leverage — and the buyer knows it.
Discovering the adjustments during due diligence. Make them yourself beforehand: you will debate a calculation instead of suffering a discount.
Selling under time pressure. An owner in a hurry shows it, and it costs on the price as well as on the terms.
Dealing with tax after the agreement. Some options — contribution to a holding company, decisions on scope — must be put in place well before signing. Afterwards, it is too late.
Neglecting data room preparation. An incomplete file lengthens due diligence and provides arguments for a downward renegotiation.
Focusing on the warranty cap and forgetting disclosure. What is disclosed and documented falls outside the scope of the warranties: it is the most effective lever, and the least used.
Accepting a poorly constructed earn-out. Additional consideration based on a metric the buyer can influence is not additional consideration: it is a discount.
16 · Our positioning
Why entrust your sale to Collaboration Capital
We are an independent advisory firm for acquisition, sale and financing transactions, based in Marseille and working across France and internationally through a network covering 120 countries. The firm is registered with ORIAS (the French register of insurance, banking and finance intermediaries) under number 25000696 as a broker in banking transactions and payment services (IOBSP).
Structural independence. No bank or investment fund among our shareholders. We are paid by no buyer and no lender: our interests are aligned with yours alone.
No imposed exclusivity. You remain free to consult other advisers and to withdraw the mandate from us at any time.
Fees mainly success-based, disclosed from our first conversation.
Buyer sourcing that goes beyond your declared sector, including internationally, in the language of each market.
Deals of EUR 1–200 million in value, on both the sell side and the buy side — which gives us a precise reading of how a buyer will build its offer.
This last point deserves emphasis: regularly advising buyers means we know exactly what they are looking for, what worries them and where they will try to claw back price. See our acquisition advisory.
17 · Resources
Guides, templates and analysis to prepare your sale
Our practical guides condense the essentials of a topic into a few pages: method, checklists, points of attention and mistakes to avoid. They can be downloaded free of charge as PDFs.
Guides directly useful to a seller
15 points to check before signing, to sell at the best price and stay in control of the negotiation. Download ›
Structure a family succession while preserving most of your wealth.
Download ›
Informing employees: your real obligations, the deadlines to meet and the risks if you forget. Download ›
The non-disclosure agreement template that genuinely protects your data during negotiations. Download ›
Reading and negotiating an LOI: key clauses, legal effect and pitfalls before committing.
Download ›
How it works, advantages and risks for a seller financing part of the acquisition. Download ›
Our analysis on business sales and succession
Dutreil pact: passing on a business while preserving your wealth
The LOI in M&A: content and key clauses
Confidentiality and NDAs: what really works
The guide to earn-outs in M&A
Vendor financing: funding part of the acquisition
The impact of a recession on an M&A deal
Human relations in mergers and acquisitions
Understanding the buyer's point of view
Knowing how your buyer reasons is the best way to anticipate their objections.
18 · Frequently asked questions
Your questions about selling and passing on a business
A sale follows seven stages: preparing and getting the company in order, valuation and building a price range, drafting the anonymous teaser and the information memorandum, targeting and approaching buyers, receiving and analysing letters of intent, due diligence, then negotiating the legal documentation and completion. Success depends less on finding a buyer than on bringing several together at the same time.
Valuation is built by cross-checking three approaches: a multiple applied to adjusted EBITDA, discounted future cash flows, and adjusted net asset value. In the French SME market, observed multiples most often range from 4 to 8 times EBITDA depending on the sector, revenue recurrence, customer concentration and how dependent the business is on its owner. The final price then results from negotiation and the competitive tension between buyers.
Six to twelve months from launching the process to completion. Preparing the file and the valuation takes one to three months, approaching buyers and receiving expressions of interest two to four months, then due diligence and negotiation of the legal documentation three to five months. Getting the business in order beforehand is best started two to three years ahead.
In France, a capital gain on the sale of shares by an individual is subject by default to the 30% flat tax, made up of 12.8% income tax and 17.2% social charges, with an option for the progressive scale. Specific schemes may apply, including a fixed allowance for owners retiring and tax deferral when shares are contributed to a controlled holding company before the sale. These rules change and their application depends on your situation: they must be settled with your tax adviser before signing anything.
The company is first presented through an anonymous teaser describing its business, key figures and strengths without allowing it to be identified. The detailed information memorandum is only sent after a non-disclosure agreement has been signed. The data room only opens once a letter of intent has been received. Each level of information thus matches a level of commitment from the buyer.
In French companies with fewer than 250 employees, the law requires employees to be informed of a planned sale so that they can make a takeover offer, with a notice period to be observed before the deal is concluded. In companies with a social and economic committee (CSE), a consultation is also required. These obligations shape the timetable and failure to comply exposes you to a penalty: they must be built into the reverse schedule from the outset.
Warranties and indemnities (garantie d'actif et de passif) commit the seller to compensating the buyer if a liability arising before the sale comes to light afterwards, or if an asset turns out not to exist. For the seller, four parameters are negotiated: the cap as a percentage of the price, the de minimis and basket, the duration by type of risk, and the security provided. Partial escrow of the price is common: its duration and release conditions are a negotiating point in their own right.
A share sale transfers the entire company, with its assets and historical liabilities: it is the most common route and generally the most tax-efficient for the seller. An asset sale transfers only the operating assets, without past liabilities, which reassures the buyer but leaves the shell company and its tax burden with the seller. The choice is made upfront, with your advisers, according to your wealth objectives.
Our fees are mainly success fees paid at completion. We receive no commission from any buyer, bank or fund, which removes the conflict of interest facing an intermediary paid by the other side. We also ask for no exclusivity.
There are four main groups: direct competitors pursuing acquisitive growth, who pay for synergies but pose a confidentiality risk; groups from an adjacent sector, often the highest bidders because their synergies are unique to them; investment funds, fast and rigorous but demanding on documentation; and individual buyers, whose financing capacity must be checked early. Each values the business differently.
Yes, and it is far better to act early. A company that is still solvent can be sold within a negotiated framework, with a choice of buyer and a valuation open to discussion. Once insolvency proceedings have started, the framework changes completely: a constrained timetable, offers filed with the court, and a choice made by the judge. The trigger to watch is cash, not the accounting result.
Not necessarily. A majority sale combined with a shareholders' agreement allows you to keep a minority stake and benefit from a second exit later, often at a higher valuation if the project succeeds. This arrangement requires careful negotiation of governance, tag-along clauses and the buy-back mechanism for the remaining shares — a poorly protected minority shareholder is in a fragile position.
The orders of magnitude on this page reflect practices observed in the market. The sections on tax set out general principles at the time of writing and constitute neither tax advice nor personalised legal advice. Collaboration Capital is neither a law firm nor a tax adviser: these decisions are for your usual advisers. Nothing on this page constitutes a commitment as to the price, timing or outcome of a transaction.
Key figures
On this page
Our commitment
Worldwide buyer sourcing, beyond your declared sector
Graduated confidentiality at every stage
No imposed exclusivity
IOBSP broker — ORIAS No. 25000696
An initial confidential 30-minute conversation to scope your business sale project.
An initial 30-minute conversation with a partner to scope your sale project, adjust your accounts and estimate a value range — with no commitment.
Reply within 24 business hours
Confidentiality guaranteed — NDA on request
IOBSP broker registered with ORIAS under no. 25000696
Further reading
Building a value range you can defend in front of counterparties.
Ownership preparation, the Dutreil pact and choosing the transfer structure.
Carving out and valuing a business unit: scope and buyers.