On December 11, Gerard García, founder and CEO of Deale, led a webinar in collaboration with Galicia Business School and VALOREA on one of the questions we hear most often from business owners who come to the platform: How much is my company really worth, and how do I find the right buyer?
SMEs come to consider a corporate transaction for very different reasons. Some need capital to grow; others want to bring in a strategic partner, explore new markets, or consider a full or partial sale. And in many cases, the trigger is the need to ensure the business continues when there's no clear successor. On Deale, 8 out of 10 SMEs for sale are on the market precisely because there's no successor.
During the session, we reviewed the main factors that determine a company's value, the most common valuation methods, what each type of buyer analyzes, and how to prepare the company for the process.
Date
Organised by
Before thinking about valuations or buyers, the business owner needs to clarify their goal. A full sale with an immediate exit is not the same as a partial sale where the founder wants to stay at the helm alongside a partner who brings capital and capabilities. Nor is looking for a strategic buyer to accelerate growth the same as looking for a financial investor to professionalize management and prepare the company for a second sale in the medium term.
The answers to these questions shape everything that follows: the valuation, the type of buyer, the deal structure, how long the founder stays, and the contract clauses. Defining this before the process starts — not during it — avoids months of conversations that go nowhere.
A company's value doesn't come down to a single figure, nor can it be determined simply by applying a percentage to revenue. Buyers analyze EBITDA, growth, margins, revenue recurrence, industry, operational risks, and future prospects. Different methodologies are then applied based on that information.
Market multiples. This is the most common method in SME sales. It involves applying a multiple to EBITDA based on how comparable companies are being valued in the market. Two companies with the same EBITDA can receive very different valuations if one has recurring revenue, good customer diversification, and an autonomous team, while the other depends on a single customer or on the founder's direct involvement.
Discounted cash flow (DCF). This method estimates how much cash the company will generate in the future and brings those cash flows back to present value. It can factor in growth prospects, although it relies on assumptions about how the business will evolve and is more common in larger companies or those with highly predictable cash flows.
Precedent transactions. This method looks at deals involving companies with similar characteristics to understand what prices and multiples the market is actually paying, not just how companies are valued on paper.
In the Spanish mid-market, the multiples method is by far the most widely used. For a detailed analysis of how it works and how to get from enterprise value to shareholder value, we've published dedicated guides.
One of the most important messages of the webinar was that preparation should begin before there's a buyer at the table. When an investor starts analyzing an opportunity, they need to understand quickly what the company does, what its financial position is, where its appeal lies, and what its main risks are.
Having the information ready — a good teaser, accounts in order, a solid information memorandum (IM) — makes this stage much easier and lets the buyer make decisions faster. Preparing the company in advance also helps you spot problems before they surface in due diligence and lead to price adjustments or mistrust.
How a company comes to market can matter as much as its financial results. If you'd like a practical reference on how to prepare, we've published a guide on the 6 keys to preparing your SME before meeting with buyers.
Not all buyers are looking for the same thing. During the webinar, we reviewed the five most common profiles in the SME M&A market, each with different criteria, time horizons, and expectations.
Family offices manage the wealth of business-owning or investor families and can have very long investment horizons — 10, 15, or 20 years. They look at companies from a long-term value creation perspective and, depending on their strategy, may acquire majority or minority stakes.
Private equity funds invest with a defined strategy and time horizon — typically three to seven years. They look for companies that can grow, professionalize, or consolidate, and where there's a clear opportunity to increase the value of the asset during the investment period.
A strategic buyer acquires another company for a strategic reason: entering a new region, adding customers, gaining market share, accessing a technology, or rounding out its range of products and services. Synergies between the two companies can carry significant weight in the valuation.
Search funds are led by one or more entrepreneurs looking to acquire a company to run it themselves. The profile of the business and whether the buyer can take the helm are especially important in their analysis.
And individual investors — business owners, former executives, private investors — have very diverse strategies: from buying a company to run it to building a portfolio of companies or developing a venture of their own.
For a complete guide to each profile, we've published a detailed analysis of the types of investors in M&A.
Identifying the right buyer means looking beyond the number. Business owners should ask themselves what they expect after the deal. Do they want to step away completely? Do they want to stay on for several years? Are they looking for a partner who brings capital without getting involved in management? Do they want to preserve the company's culture? Are they looking for an industry group that can accelerate growth?
The answers have a huge impact on which type of investor makes sense. A higher offer may not be the best one if the payment terms, the required stay, or the buyer's goals aren't aligned with the seller's. The earn-out, deferred payments, retention clauses, and post-closing warranties are as much a part of the real price as the headline figure.
That's why a good deal isn't about finding whoever pays the most, but about creating competition among the right buyers and finding a structure that makes sense for both sides.
To close the session, we shared the case of Cristal Norte and Tekpolio, a deal managed through Deale. The case helped bring the webinar's concepts to a real deal and show how a sell-side mandate is managed, from finding and connecting with buyers through the different stages of negotiation.
The main lesson is that finding a buyer is only one part of the process. Upfront preparation, valuation, investor selection, and the management of each stage are what determine whether an opportunity makes it to closing.
The webinar left three clear conclusions.
Knowing what a company is worth requires understanding much more than its numbers. Industry, risk, growth, recurrence, and the quality of the business directly influence what a buyer will be willing to pay.
Preparing the company before going to market considerably increases the chances of completing the deal. Organized information, a known adjusted EBITDA, and reduced founder dependency are three levers the seller controls before negotiations begin.
There's no single ideal buyer for every company. Family offices, private equity, strategic buyers, search funds, and individual investors have different goals and criteria. Understanding those differences and defining in advance what the business owner is looking for makes it possible to approach the deal with a much clearer strategy.
Because knowing what a company is worth matters. But knowing who can carry it forward, and on what terms, matters even more.
Don't miss Deale's upcoming events
Get exclusive access to our upcoming events, analysis and conversations about buying and selling companies and M&A for SMEs
