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The value of an SME is calculated mainly from its ability to generate profits, normally by applying a multiple to normalized EBITDA and cross-checking it against discounted cash flow and comparable transactions in the sector. The multiple depends on the sector, size, growth, revenue recurrence, customer concentration and how dependent the business is on its owner. That is why two companies with the same profit can be worth very different amounts. At Olbia Corporate Consulting we prepare an independent valuation before going to market so that the owner knows a realistic price range.

Selling an SME in Spain usually takes between 6 and 12 months from the start of the process to signing. It can stretch to 18 months if there are several shareholders, real estate, significant debt or if the business depends heavily on its owner. A preparation phase of several months beforehand should be added to organize the financial information and fix the weak points a buyer would find in due diligence.

An orderly sale process has six phases: 1) preparation and valuation of the company; 2) preparing the sale materials (anonymous teaser and sale memorandum or CIM); 3) approaching potential buyers and signing confidentiality agreements; 4) receiving and selecting indicative offers; 5) the buyer's due diligence; and 6) negotiating the sale and purchase agreement (SPA) and closing. An M&A adviser coordinates every phase to keep to the timetable and maintain competitive tension among buyers.

The best time to sell is when the company shows stable or growing results and the owner is under no rush or pressure to sell. Selling in a good cycle lets you negotiate from a position of strength and obtain a better price. It is advisable to start preparing the transaction 12 to 24 months before the planned sale, especially in retirement or generational handover situations.

Preparing a company for sale means removing everything that could reduce its value or raise doubts for the buyer. The most important things are: having clear accounts, audited if possible; separating personal expenses from business expenses to normalize EBITDA; reducing dependence on the owner by delegating to a management team; formalizing contracts with customers, suppliers and employees; and optimizing debt and working capital. At Olbia we call this phase Pre-deal Readiness.

The usual buyers of an SME fall into five types: companies in the same sector or competitors (industrial buyers), private equity funds, family offices, search funds and the company's own management team (MBO). Each one values different things: the industrial buyer looks for synergies, the fund looks for growth and returns, and the family office usually looks for stable long-term investments. Identifying the right buyer is key to maximizing the price and ensuring the continuity of the business.

Confidentiality is protected through a controlled process: the company is first presented anonymously through a teaser, detailed information is only shared after signing a non-disclosure agreement (NDA), and sensitive data is released progressively through a virtual data room. The number of contacts is also limited. This prevents employees, customers or competitors from learning about the transaction before time.

It depends on who holds the shares. If an individual sells them, the capital gain is taxed in the savings base of Spanish personal income tax (IRPF), at progressive rates that reach 30% in the higher brackets. If a holding company sells them, with at least a 5% stake held for 12 months, the exemption under Article 21 of the Spanish Corporate Income Tax Act may apply, which exempts 95% of the gain. The structure must be planned in advance with a tax adviser, as every case is different.

No. It is possible to sell a majority or minority stake, bring in a financial or industrial partner to grow, or sell in stages. It is also common for the seller to keep a percentage or remain linked to the company during a transition period. The structure is adapted to the owner's objectives: liquidity, continuity of the project, generational handover or growth.

Due diligence is the in-depth review the buyer carries out on the company before closing the transaction. It normally covers the financial, tax, legal and employment areas, and in some cases commercial, operational or environmental. Its purpose is to confirm the information received and detect risks that could affect the price or the contract warranties. Preparing the documentation in advance reduces surprises and avoids price renegotiations.

The price is not always paid in full at signing. The usual structure is a main payment at closing, which may be accompanied by deferred payments, an earn-out (a variable part tied to future results) or an escrow retention to cover possible contingencies. In addition, the final price is usually adjusted for net debt and working capital at the closing date. Negotiating these mechanisms well is as important as negotiating the price.

An M&A adviser increases the price and the likelihood of success of the sale. They prepare the valuation and the materials, identify and approach the right buyers, create a competitive process with several offers, coordinate the due diligence and negotiate on behalf of the seller. Selling without preparing the accounts, negotiating with a single buyer or going through the transaction without an adviser are the mistakes that reduce the price the most. Olbia Corporate Consulting is an M&A boutique based in Valencia that supports business owners across Spain in selling their company.