At BLOK Management, we are aware of the challenges that companies and their shareholders face when it comes to business succession. The decision to pass on or take over a business is one of the most important and complex phases in the lifetime of a company. In this article, we highlight why you might need the expertise of an M&A advisor in this situation.

What are the decisive steps in business succession?

The crucial steps in business succession include strategic planning and preparation, identification of potential buyers or sellers, business valuation, negotiation management, risk management and due diligence, and, once implemented, integration. At BLOK Management, we offer comprehensive support in these areas to ensure that the succession process runs smoothly and successfully.

1. Strategic planning and preparation
A successful business succession requires careful strategic planning. As experienced M&A advisors, we support you in defining your goals and developing a clear succession strategy. We help you identify potential obstacles and take action to overcome them. Our team brings extensive expertise in business succession planning and preparation to ensure the process runs smoothly. To this end, we are already in consultation with our clients up to 12 months before the sales process begins.

2. Identification of potential buyers or sellers
Whether you are looking to sell or acquire a business, identifying potential partners is crucial. Our M&A experts have a broad national and international network as well as extensive resources and databases to find suitable buyers or sellers. We conduct thorough market research to identify potential partners that match your requirements and objectives.

3. Business valuation
The correct valuation of a business is a critical step in any M&A process. At BLOK Management, our experts are experienced in conducting comprehensive business valuations. We take into account various valuation methods (multiple methods, DCF, LBO, etc.), financial ratios and market value to ensure that you pay or receive the right price for your business.

4. Negotiations
Negotiation is another important aspect of business successions. We have extensive experience in drafting contracts and negotiations to ensure that your interests are protected. We specialise in negotiating the best terms for our clients, whether in terms of sale price, financing or other contractual details.

5. Risk management and due diligence
Our M&A advisors support you in minimising risks and conducting comprehensive due diligence. We help you to identify potential risks and problems at an early stage to avoid unpleasant surprises later on in the succession process.

6. Integration and implementation
The successful integration of an acquired company or the smooth handover requires careful planning and implementation. At BLOK Management, we also accompany you in this phase and help you to make the transition as efficient as possible.

At what point should you consult an M&A advisor?

The question of the optimal time to bring in an M&A advisor is crucial to the success of your business succession. To avoid ambiguity and make the process as smooth as possible, we recommend considering expert assistance early on. Here are some pointers to help you determine the right time:

  • Long-term strategy: Early planning is crucial. Ideally, you should consider the idea of business succession several years in advance. This will give you enough time to strategically prepare your business and make any necessary improvements.

  • Early identification of prospects: The earlier you identify potential buyers or sellers, the better. An M&A advisor can help you find suitable partners and facilitate a strategic and coordinated approach.

  • Strategic advice: Already in the planning phase, an M&A advisor can give you valuable strategic advice. This can include devising an exit strategy, identifying growth opportunities, or optimising your finances.

  • Due diligence and risk assessment: An M&A advisor can conduct due diligence early on to identify potential risks and issues. This allows you to address them in time and increase the value of the company.

At what size does M&A advice make sense for a company succession?

The decision as to whether M&A advice makes sense in the context of business succession does not necessarily depend on the size of the company, but on the complexity of the project and the individual goals. Nevertheless, we can give some general guidelines:

  • Small and medium-sized enterprises: M&A advice also brings great benefits to smaller and medium-sized companies. Business succession can be complex and an experienced advisor helps to structure the process, maximise the value of the business and safeguard the interests of all parties involved.
  • Growth companies: If your company offers growth opportunities or you are in a fast-growing industry, M&A advice can help identify the right partners and strengthen your position in negotiations.

  • International transactions: If the business succession has an international character, for example in the case of participations by foreign investors, the expertise of an M&A advisor is particularly valuable, as he is familiar with the specific requirements of international transactions.

Overall, it is important to emphasise that the size of the company is not the sole criterion for deciding whether M&A advice is required in business succession. Rather, the focus should be on the individual circumstances and goals of the company. At BLOK Management, we are available to assess your specific situation and provide you with tailored advice, regardless of the size of your business.

Business Succession – Our Top 10 Criteria

  • Complexity of the business: The more complex your business is, the more likely you are to need professional support. This includes diversification of products, geographical presence, or complex organisational structures.

  • Company size: In general, the likelihood of needing an M&A advisor increases with the size of the company. Large companies often have extensive transaction requirements.

  • Understanding of the market: An M&A advisor has extensive knowledge of the market and can help you identify potential buyers or sellers.

  • Legal and tax complexity: M&A transactions are legally and fiscally complex. An advisor can help you comply with the relevant laws and regulations.

  • Valuation and pricing: An M&A advisor can help you to appropriately value your business and set a fair price.

  • Negotiation expertise: Negotiating with potential buyers or sellers requires experience and skill. An M&A advisor can provide valuable services in this area.

  • Discretion: An M&A advisor can ensure that the transaction is conducted in strict confidentiality so as not to disrupt business operations.

  • Financing and capital raising: If the transaction requires financing, an M&A advisor can help with capital raising and financing structuring.

  • Risk management: An experienced advisor can help identify and minimise potential risks and pitfalls in the M&A process.

In conclusion, business succession is a complex and multi-faceted process that typically takes between 7-12 months to complete. An experienced M&A advisor should always help to simplify this process, minimise risks and ensure that your goals are achieved. At BLOK Management, we specialise in helping businesses make a successful transition, whether through sale or acquisition. Contact us for an initial consultation to learn more about our services and how we can help you with your business succession.

We will gladly advise you

Marcel Brix

Managing Director | BLOK Management GmbH

Oliver Kolb

Managing Director | BLOK Management GmbH