Selling or partnering your business: how an M&A transaction unfolds

Four in ten French business owners are considering handing over their company in the next five years, around 370,000 micro-businesses, SMEs and mid-caps by 2030, according to a survey of 5,000 business leaders carried out in late 2025 by Bpifrance Le Lab. ^1,2 At the current pace, only 130,000 would actually change hands. ¹ The gap is partly a matter of preparation: among owners who give themselves more than a year, seven in ten are still only thinking about it or gathering information. ^2,3 Yet a sale is not an event, it is a project, with its stages, its documents, its counterparts and its timetable.

Most business owners sell only once in their lifetime. On the other side of the table, buyers, whether industrial groups or investment funds, complete several transactions a year and have dedicated teams. Understanding how a transaction unfolds, what it requires and what really makes the value of an offer is the first way to rebalance the discussion. That is the purpose of this article.

Sale, partnership, OBO, LBO: what are we talking about?

Behind the phrase "selling your business" lie very different transactions, which answer distinct personal situations. Knowing them allows you to shape a project before meeting a single buyer.

Full sale. The owner sells all of their shares to a buyer, an individual, an industrial group or a fund, and leaves the company after a handover period of a few months to two years. This is the retirement or change-of-life scenario, and the most common one: retirement remains the leading reason for selling observed by the Cédants et Repreneurs d'Affaires network. ⁴
Majority partnership. The owner hands control to a group or a fund but keeps a stake, often reinvested in the buyer's holding company, and stays at the helm for several years. They secure part of their wealth, benefit from the resources of a larger group and share in a second round of value creation at the next sale. This suits an owner, whatever their age, who still has several years of activity ahead, still has energy, but no longer wants to carry the risk alone.
Minority partnership. An investor joins the capital without taking control, to fund external growth, an investment or the exit of a shareholder. The owner remains the majority shareholder and commits to a development plan with a defined exit horizon for the investor.
OBO, or owner buy-out. The owner sells the company to a holding company they set up, financed partly by bank debt and, where relevant, by a minority partner. They cash in part of the value created while keeping control. It is also an opportunity to bring managers or younger partners into the capital.
LBO. A generic term for any acquisition financed partly by debt, repaid from the company's future earnings. A partnership with a fund-backed platform and an OBO are both variants. For the seller, an LBO means the buyer will look closely at the company's ability to generate cash consistently.
Industrial combination. A merger or sale to a competitor, supplier or customer seeking synergies: geographic, product or customer complementarity. The industrial buyer is often the one able to pay the most, because it values what the company will bring to the group, but it is also the one with whom confidentiality must be handled most carefully.

The right structure depends less on a standard formula than on each person's situation: your personal objectives, the age and autonomy of your management team, the financing needs of the coming years and the company's ability to keep growing on its own. That is why the first step of a project is not looking for a buyer, but clarifying what you want to achieve.

Start by defining what you really want to achieve

A successful transaction is often decided before the first contact with a buyer. Before talking about price, five questions need answering, because the answers determine which buyers to approach, how the deal is structured and how the process is run.

Your personal horizon. A quick exit, a handover over a defined period, or continuing the adventure within a group do not lead to the same process or the same terms. A fund building a platform will want an owner who stays; an individual buyer, on the contrary, will want to take your place.
Immediate liquidity and reinvestment. Distinguish the amount you want to secure at closing from the share you could accept to reinvest in a joint project. This split drives the choice between a full sale and a partnership, and it should be prepared with your wealth advisers before the sale.
The plan for the company. Some owners prioritise access to new markets, commercial resources or greater investment capacity; others above all want continuity for what they have built. The first profile leans towards an industrial buyer or a platform, the second will look more closely at the buyer's personality.
The team and governance. The future of key managers, the company's future autonomy and your own role after the deal must be thought through before the first discussions, because they will appear in the offers and in the shareholders' agreement.
Confidentiality. Who is informed internally, and when and how the deal is announced to employees, customers and partners, must be decided at the outset and held throughout the process.

The stages of a sale process

Whatever the structure, a well-run sale process follows a proven sequence. Respecting it is not a matter of formality: each stage serves to create competition between buyers, protect information and reduce late surprises.

Diagnostic and preparation. First, the adviser and the owner review the company as a buyer would: quality and recurrence of revenue, customer concentration, real profitability once non-recurring items and the owner's pay are adjusted, legal, employment, tax and contractual position, team organisation, unwritten contracts, change-of-control clauses in customer or supplier contracts, intellectual property, ongoing disputes, quality of reporting. This phase reveals what to fix before going to market and what will need explaining.
Valuation. It combines several methods and results in a range, not a single figure. Its role is twofold: set the seller's expectations realistically and prepare the arguments that will defend the price. The final value will be the one the market, that is, competition between buyers, reveals.
Documentation. Three documents structure the release of information. The anonymous teaser presents the company in one or two pages without allowing it to be identified. The information memorandum, provided after a confidentiality undertaking is signed, describes the business, market, organisation, historical accounts and business plan in detail. The data room, a secure online space, gathers the documents shortlisted buyers will review during due diligence: articles of association, contracts, leases, accounts, disputes, personnel files.
Identifying and confidentially approaching buyers. An unsolicited offer may be attractive, but it says nothing about what another industrial player, an international group, a sector platform or an investor would have been prepared to offer. The task is therefore not to find a buyer but to build a universe of buyers with different strategic logics. The adviser draws up a broad list of candidates, French and foreign industrial players, consolidating groups, investment funds and the platforms they own, credible individual buyers, then narrows it down with the owner. Each candidate is approached individually on the basis of the teaser and receives the memorandum only after signing a non-disclosure agreement. The seller keeps control of the list: they can exclude a direct competitor or ask that a player be contacted only in a second round. The quality of this list rests on knowledge of the sector: ongoing consolidation, geographic footprint, recent acquisitions, funds' portfolios, customer complementarities and real capacity to finance the deal.
Indicative offers. On a set date, candidates submit a non-binding letter of intent specifying the proposed price, structure, financing, plan for the company and points to investigate further. This is the first moment of truth: it allows approaches to be compared and only serious candidates to be kept. Moving all candidates forward on a common timetable and comparable stages makes offers easier to read and avoids drawn-out negotiations.
Management presentations. Shortlisted candidates meet the owner and often the management team, visit the site and ask their questions. These meetings matter as much as the figures: buyers gauge the strength of the organisation, and the owner gauges the plan and the people they will work with or entrust their teams to.
Binding offers. After these meetings and initial access to the data room, candidates submit a detailed binding offer setting out the price and its terms, conditions precedent, the scope of remaining due diligence and the outline of the warranties requested.
Exclusivity and due diligence. The seller chooses an offer and grants its author a period of exclusivity, generally from a few weeks to two or three months, during which the buyer carries out accounting, tax, employment, legal and sometimes environmental or IT due diligence. The better prepared the data room, the shorter this phase and the less room it gives for renegotiation. The sell-side adviser's role is then to maintain momentum, coordinate the parties and prevent a technical discussion from gradually changing the economics of the accepted offer.
Share purchase agreement and warranty and indemnity. The agreement sets all the terms of the sale: price, payment terms, conditions precedent such as obtaining bank financing, seller's undertakings, timetable. Bpifrance Création calls it the most important legal document of the transaction. ⁵ It comes with the warranty and indemnity (in France, the garantie d'actif et de passif), by which the seller undertakes to compensate the buyer if a liability arising before the sale comes to light afterwards, or if an asset proves to be overvalued. ⁶ Its duration, cap, deductible and the financial security that backs it, an escrow of part of the price or a bank guarantee, are negotiated just like the price. ⁶
Closing. Once the conditions precedent are lifted, the parties sign the transfer deed, the price is paid and the shares are transferred. Then come the formalities, informing teams and customers, and the start of the seller's handover period.

How long does it take?

Between launching the process and closing, allow six to twelve months for a properly run transaction: two to three months of preparation and documentation, two to three months of approaches and indicative offers, one to two months of meetings and binding offers, then two to four months of exclusivity, due diligence and legal documentation. Faster transactions exist, but they usually come at the cost of reduced competition. Longer ones generally stem from due diligence revealing poorly anticipated issues, bank financing that is slow to arrive or hesitation on the seller's part.

This timeline does not include upstream preparation, the time spent fixing what the diagnostic revealed. Owners surveyed by Bpifrance Le Lab give themselves an average horizon of four and a half years, which is reasonable, but most have not started preparing in earnest. ² Yet it is this phase, not the six to twelve months of the process, that most often makes the difference on price and terms.

The value of an offer is more than its headline price

Two offers for the same amount can mean very different things. When comparing proposals, read all of the following parameters, every one of which is negotiable.

Price structure. The portion paid in cash at closing, the deferred portion, the treatment of cash and debt at the date of sale, the working capital adjustment mechanism. A high price with an unfavourable adjustment can be worth less than a lower price paid in full.
Earn-out. Part of the price is paid later, provided the company meets targets defined in the agreement. The tool bridges diverging views on value, but its drafting is decisive: the metrics chosen, the duration, and whether the seller controls the means needed to reach the targets.
Vendor loan. The seller agrees to receive part of the price in instalments, effectively financing the buyer. Common when individuals buy a business, it helps close the financing but exposes the seller to the risk of the buyer defaulting, hence the importance of the guarantees attached.
Reinvestment. In a partnership, the share of the price reinvested in the buyer's group, the terms of that stake and the exit arrangements in the shareholders' agreement weigh as much as the amount received.
Handover. The duration, pay and scope of the seller's responsibilities after the sale, and the non-compete clause: these shape the transition and the owner's regained freedom.
Warranties. The duration, cap and deductible of the warranty and indemnity, the amount held in escrow, and whether warranty and indemnity insurance is used. A heavy, long warranty erodes the value actually available to the seller.
Post-deal governance. In a partnership, the decisions that remain yours, those requiring the partner's consent, the composition of the management bodies and the resources the buyer commits to are negotiated in the shareholders' agreement. For an owner who stays involved, the partner's ability to keep its commitments and cultural fit matter as much as a few points of economic negotiation.

Add to this list what cannot be quantified: the buyer's plan for the company and the fate of the teams. Asked by Bpifrance Le Lab about their priorities, sellers put the company's long-term future first, at 48%, then the buyer's personal qualities, at 40%, far ahead of a high sale price, cited by 14%. ^2,3 A well-run process allows these criteria to be built into the choice without giving up value.

The most common mistakes

Negotiating with a single buyer. This is the most common and the most costly. A peer or a group comes forward, discussions begin, and the seller is left with no point of comparison and no leverage. In the Bpifrance Le Lab survey, 18% of sellers say they received an offer they considered too low and 19% received no offer at all: in both cases, an organised competitive process is the answer. ^2,3
Getting the timing wrong. Launching the process just after losing a major customer, in the middle of an investment temporarily weighing on margins, or, conversely, waiting until fatigue has already eroded commercial momentum. The market pays for the trajectory as much as the track record.
Letting confidentiality slip. A rumour of a sale worries employees, alerts competitors and weakens relationships with customers and suppliers. An anonymous teaser, non-disclosure agreements, gradual release of information and complete discretion internally until the chosen moment are not excessive precautions.
Arriving with unprepared accounts. Missing management accounts, undocumented adjustments, unsigned contracts or unprovisioned disputes will be discovered during due diligence, at the worst moment, when the seller is in exclusivity and the buyer has every argument to renegotiate.
Neglecting the teams. Buyers acquire an organisation that can function after the owner leaves or gradually steps back. Securing key people, formalising responsibilities and preparing when and how to announce the deal are all part of the preparation work.

You are thinking of selling: is this the right moment for you?

This is the first question we ask, and the answer is never automatically "right now", even in an active market. French private equity invested €36.4 billion in 2025 and completed 1,232 exits, a level that remains high, and industrial buyers have never been so numerous in their search for quality targets. ⁷ But the right moment depends on two things: you, meaning your life plans, personal horizon and wealth objectives, and your company, meaning its ability to realise today all the value it holds. We encounter two situations.

Your company is almost ready. Revenue is recurring and diversified, profitability is readable, the team is stable and legal and accounting matters are in order. Or you want your company to become part of a larger project, that of a group, often under LBO, that brings the tools, expertise and resources to absorb the changes in your sector, which is reassuring for you and for your teams. In this case, a few weeks of preparation are enough to structure the file and go to market in good conditions. The large number of buyers then works in your favour.
Your company needs time. One customer weighs too heavily in revenue, a major contract is coming to an end without renewal, margins have been hit by a recent event, a compliance project is unfinished. Selling in these conditions remains possible, but it means accepting a discount and less favourable terms, a heavier earn-out, a longer warranty. We will then tell you frankly that it is better to spend several months, sometimes a few years, working on these points, and we can support you through that phase before launching the transaction when you are truly ready.

The workstreams that make the difference are well known: diversify and contract the customer base, make reporting and management accounts reliable, clarify real profitability, settle outstanding legal and employment matters, structure the management team, and anticipate the wealth and tax aspects of the deal, which are prepared before the sale, not after. Depending on the starting point, they take a few weeks or a few years.

The benefit of talking early, even without being sure you want to sell, is knowing which of these two situations you are in, and deciding with full knowledge rather than under the pressure of an unexpected approach, accumulated fatigue or a health problem. A quarter of owners handing over today have another project, professional or personal, and another quarter want to lighten their load: these legitimate motivations are best served when they are anticipated. ²

The role of the M&A adviser and how they are paid

More than eight sellers in ten use or plan to use an adviser, with the chartered accountant and the lawyer the most frequently cited. ² Both are essential, the former for reliable figures and tax, the latter for the legal documentation. The M&A adviser works upstream and as conductor: they carry out the diagnostic and valuation, draft the documentation, identify and approach buyers, organise competition, manage the timetable, negotiate the offers and coordinate the other advisers through to closing. They also allow the owner to keep running the company during the process, which in itself protects value: a company whose results dip during the sale loses in negotiation what its owner thought they were gaining in time.

Their fees traditionally have two components. A fixed fee, or retainer, covers the preparation and documentation work, which is carried out whatever the outcome. A success fee, calculated on the sale price and paid at closing, makes up most of the fee and aligns the adviser's interests with the seller's: they are paid when the deal is done, and all the better when it is done on good terms. A serious adviser is transparent about this structure from the first meeting, and is also willing to tell the owner that the time has not yet come.

Facing buyers who acquire regularly, an owner negotiating alone, with a single candidate and without preparation, is rarely on an equal footing. The value of a company cannot be read in the headline price of an offer: it depends on the price structure, the earn-out, any reinvestment, the warranties given, the terms of the handover and what happens to the teams.

The role of an independent adviser is to value the company objectively, identify all relevant buyers, industrial players, consolidating groups, funds and individual buyers, put them in competition in a structured and confidential process, and negotiate beyond price alone. This competition is also what protects the seller: it allows them to compare genuinely different projects and choose the one that matches their objectives.

Frequently asked questions

How long does it take to sell a business?

Between launching the process and signing, the sale or partnership of an SME most often takes six to twelve months: preparing the file, confidentially approaching buyers, indicative then binding offers, due diligence under exclusivity, legal documentation. Upstream preparation comes on top, lasting from a few weeks to several years depending on the company's condition. Very fast transactions usually come at the cost of reduced competition.

How do you keep a business sale confidential?

Confidentiality relies on releasing information gradually: an anonymous teaser, a non-disclosure agreement signed before the memorandum is shared, a data room reserved for shortlisted candidates, a small circle of people informed internally. The seller keeps control of the list of buyers approached and can exclude a direct competitor. Employees, customers and suppliers are told at the chosen moment, generally at signing.

What documents do you need to prepare to sell a business?

Three documents structure a sale: the anonymous one- or two-page teaser, the information memorandum describing the business, market, organisation, historical accounts and business plan, and the data room gathering the due diligence documents: articles of association, shareholders' agreements, management accounts, contracts, leases, personnel files, disputes. Reliable management accounts and documented adjustments save the most time during due diligence.

What is a warranty and indemnity in a business sale?

The warranty and indemnity (garantie d'actif et de passif in France) is the seller's undertaking to compensate the buyer if a liability arising before the sale comes to light afterwards, such as a tax reassessment or an employment dispute, or if an asset proves to be overvalued. Its duration, cap, deductible and the financial security behind it, escrow or bank guarantee, are negotiated just like the price. Well-prepared due diligence limits its scope.

What is an earn-out and should you accept one?

An earn-out is part of the price paid after the sale if the company meets targets set in the agreement, most often revenue or earnings over one to three years. It bridges diverging views on value and is common when the seller stays on during the transition. It is only acceptable if the metrics are simple and verifiable, and if the seller keeps control over the means to achieve them.

Why use an M&A adviser when you already have an accountant and a lawyer?

The chartered accountant ensures the figures and tax are sound; the lawyer drafts and negotiates the legal documentation. The M&A adviser works upstream and as conductor: diagnostic and valuation, memorandum, identifying and confidentially approaching buyers, running a competitive process, managing the timetable, negotiating offers and coordinating the other advisers through to closing. They also let the owner keep running the company during the process.

Should you respond to a direct approach from a buyer?

An unsolicited approach is often a good sign, but negotiating alone with that candidate deprives the seller of any point of comparison and any leverage. The right response is to place the approach within a universe of potential buyers by quickly organising a confidential process that puts several candidates in competition on a common timetable. The original buyer stays in the race, but must position itself against other projects.

Can you sell your business and stay on as its leader?

Yes, that is the principle of a partnership: the owner hands control to a group or a fund, keeps a stake often reinvested in the buyer's holding company and stays at the helm for several years before a second sale. An OBO, for its part, lets the owner cash in part of the value created while keeping control. The future role, decision-making autonomy, pay and exit arrangements are negotiated in the shareholders' agreement.

Public sources consulted

Bpifrance Le Lab / Bpifrance Création, Un marché de 370 000 entreprises à reprendre d'ici 2030 (nov. 2025) : https://bpifrance-creation.fr/observatoire/actualites/marche-370-000-entreprises-a-reprendre-dici-2030 (high reliability)
Bpifrance Le Lab, CCI France, CMA France et CRA, Transmission et reprise d'entreprise, support de présentation de l'étude (nov. 2025) : https://www.cma-alsace-moselle-grandest.fr/sites/default/files/2026-01/Etude_reprise_transmission_support_conf_presse_0.pdf (high reliability)
L'Info Durable avec AFP, Transmissions d'entreprises : un potentiel élevé mais des freins à desserrer (nov. 2025) : https://www.linfodurable.fr/transmissions-dentreprises-un-potentiel-eleve-mais-des-freins-desserrer-selon-une-etude-53630 (good reliability)
CRA, Cédants et Repreneurs d'Affaires, Observatoire de la transmission 2023 : https://www.cra.asso.fr/uploads/observatoire-cra-2023-compressed.pdf (good reliability)
Bpifrance Création, Les actes à rédiger : protocole d'accord de titres de société ou compromis de cession de fonds de commerce : https://bpifrance-creation.fr/moment-de-vie/actes-a-rediger-protocole-daccord-titres-societe-ou-compromis-cession-fonds-commerce (high reliability)
Conseil national des barreaux, fiche Garantie d'actif et de passif, Réseau Transmettre & Reprendre (juil. 2017) : https://www.cnb.avocat.fr/sites/default/files/documents/39.garantie_dactif_et_de_passif.pdf (high reliability)
France Invest, Activité du capital-investissement français en 2025 (mars 2026) : https://www.franceinvest.eu/activite-du-capital-investissement-fracais-en-2025/ (high reliability)