Who should I pass my business on to?

Identifying solid buyers for the transfer of your business is a key stage in the sale process. Given the stakes involved, it is advisable for business owners to call on the services of an advisor specialising in Mergers & Acquisitions (M&A).

The role of the M&A advisor is to support corporate transactions by managing the entire sale process as a partner to the entrepreneur. Identifying buyers, valuing the business and ensuring that the process runs smoothly, at the right pace and in a professional manner are key factors in achieving a transaction on the best possible terms. “This is what we call business development,” explains Arthur Magis, Managing Director of Dimension SA.

There are two main options for entrepreneurs wishing to transfer their company:

The in-house solution

One possible approach is to sell the business to one or more members of the management or the family, without necessarily opening up the process to the market. “While this option is often a long-term solution for the company, it does not guarantee that the seller will obtain the best sale terms,” points out Arthur Magis. Nevertheless, this solution is sometimes the only possible option for finding a buyer. What’s more, this approach often requires the involvement of investors to finance the transaction.

Opening up to the outside world

For the M&A advisor, the aim is to create a market of buyers around the company in order to stimulate demand and avoid the trap of bilateral discussions. Only a direct confrontation between supply and demand will enable the seller to optimise the conditions of sale and know the ‘market’ value of his company. This is where a specialist is needed.

There are two main types of buyer:

• Strategic” buyers are companies that operate directly in the same sector or in related businesses. They often benefit from interesting synergies and a good knowledge of the sector, enabling them to offer attractive terms to the seller.

• Financial investors, represented in particular by investment funds. This is an interesting solution that should be seriously considered. These players are involved in a significant number of transactions in Switzerland. Dimension SA’s proximity to these players means that we can easily approach the most appropriate partners with a precise understanding of their respective investment criteria.

Only an expert is in a position to assess all the options available and to define, on a case-by-case basis, the internal and external avenues to be exploited.

Dimension SA has specialised in the sale, acquisition and valuation of companies since 1994. A recognised player in Mergers and Acquisitions in Switzerland, Dimension SA is the preferred partner of company directors and entrepreneurs for analysing the value potential of their companies and carrying out business transfer operations. The company, based in Lausanne, Geneva and Zurich, has been part of BCGE Group since 2015.