Insights · M&A Advisory
Preparing a business for sale: in a buyer's market, preparation is the seller's main lever
European deal terms have moved in buyers' favour. A seller cannot change the market, but can decide what buyers find when they look. That work starts two to three years before a process.1
Corvus Management · As at September 2026
When owners think about selling, they picture the process: the information memorandum, the buyer meetings, the offers. The outcome is largely decided earlier, by how well the business withstands scrutiny. A buyer's diligence team will find every weakness. The only questions are whether you found it first, and whether it is reflected in your expectations or in the buyer's offer.
The market context
The CMS European M&A Study 2026, based on 601 transactions completed in 2025, describes continued buyer-favourable trends.2 Earn-outs featured in 27% of deals, equal to the highest level the study has recorded and above its ten-year average of 23%. Warranty limitation periods of more than 24 months reached a record 32%. In practice, uncertainty the seller has not resolved comes back to the seller, through deferred consideration, longer exposure or a lower headline price.
1. See the business as a buyer will
A buyer does not pay for history. It pays for future cash flows it can believe in. The first step is an honest readiness review: where earnings come from, how repeatable they are, and what a sceptical investor would discount. Customer concentration, dependence on the owner, one-off items in the accounts and informal contracts are the issues that most often reduce value or reshape the deal.
2. Commission the diligence before the buyer does
The most effective preparation tool is diligence commissioned by the seller: a quality of earnings review and, where the process justifies it, vendor due diligence reports made available to bidders. This work establishes normalised EBITDA, separates the adjustments that will hold from those that will not, and sets out the net debt and working capital positions. Issues identified before launch can be fixed, disclosed or priced. Issues a bidder finds after exclusivity usually come back as a price reduction.
3. Decide the price mechanism early
In Europe, the choice between a locked box and completion accounts is a preparation decision, not a drafting detail. Among European deals without a purchase price adjustment, 54% used a locked box in 2025.2 A locked box gives the seller price certainty, but requires a recent, reliable balance sheet and a clear definition of permitted leakage. Completion accounts move the debate to the closing date. Either way, the definitions of net debt, debt-like items and normal working capital are where value is most often renegotiated, and they deserve the same care as the equity story.
4. Reduce dependence on the owner
A business that relies on its founder for key relationships, pricing decisions or technical know-how is worth less to most buyers. Buyers that cannot rely on the founder after closing protect themselves through earn-outs and retention conditions, which explains much of their current prevalence. Building a second line of management, documenting processes and transferring relationships takes time. It cannot be done credibly in the months before a sale, and the active process itself, typically six to twelve months from mandate to closing, leaves no room for it.
5. Clean up structure, contracts and tax position
Group structure, shareholder agreements, property arrangements, key contracts, intellectual property and tax positions all come under review. Change-of-control clauses, expired agreements and unresolved disputes are easier to address calmly beforehand than under the pressure of exclusivity. Pre-sale reorganisations, such as a holding company, the separation of assets the owner does not intend to sell, or the conditions for favourable tax treatment of the gain, often depend on minimum holding periods. They should be planned with tax advisers well before a buyer is approached, as the rules differ materially across jurisdictions.
6. Define what a good outcome means for you
Price is only one variable. Owners should decide early what they want from the transaction: a full or partial exit, their own role afterwards, the future of the team, the balance between cash at closing and deferred consideration, and how warranty risk will be handled, including whether warranty and indemnity insurance is appropriate. It was used in 23% of European deals in 2025.2 These choices shape which buyers to approach and how to structure the process.
7. Choose the timing, rather than letting it choose you
The best time to sell is when performance is strong, the outlook is visible and the owner is not under pressure. Preparation creates the option to go to market when conditions suit, and to wait when they do not. A business that is ready can also respond with confidence when an unsolicited approach arrives.
How we help
Corvus Management works with owners well before a process begins: readiness review, coordination of sell-side diligence, preparation of the equity story, the choice of price mechanism, timing and buyer universe. When the time comes, the same senior team runs the process through to closing.
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