In M&A, the price starts being determined long before the first meeting.
The buyer comes to the table with a team, a process, and dozens of transactions behind them. The seller comes once in a lifetime, with scattered documentation and accounts mixed with personal expenses that no one had ever questioned. The outcome is predictable and measurable: a discount of between 10% and 20% from the value agreed in the Letter of Intent. The business itself does not cause it. The lack of preparation does.
And that moment arrives earlier and earlier. In the first half of 2025, private equity invested €3.026 billion in Spain, 17% more than a year earlier, with the middle market as the main driver. For the family business owner, this means one thing: a professional buyer may knock on the door at any time. The question is no longer whether they will come. It is whether the company will be ready when they do.
The Moment Always Comes, and Almost No One Is Prepared
Every family business eventually faces a decision that goes beyond day-to-day operations. A private equity fund proposes a conversation. A shareholder wants to exit. A succession plan becomes necessary. A growth opportunity requires external capital.
Each of these situations demands the same thing: knowing precisely what the company is worth, what risks it carries, and whether it is prepared to withstand the scrutiny of a third party.
Most companies arrive at that moment unprepared. Not because of negligence. Day-to-day operations consume all available attention, and strategic questions only become urgent when the moment is already upon them.
When that happens, three things occur, all of them negative. The owner reacts instead of choosing a path. The opportunity loses value because of poor preparation. And some options disappear altogether because a contingency discovered at the worst possible moment does not merely reduce the price—it can kill the deal.
The Asymmetry No One Explains to Business Owners
A family business is sold once in a lifetime. The buyer—whether a private equity fund or an industrial group—executes transactions regularly and has specialized teams dedicated to finding what the seller has not organized.
The asymmetry of information and experience is enormous. The buyer has done their homework. The seller, almost never.
That asymmetry has a direct consequence at the negotiating table. Whoever identifies the risk gains the ability to impose conditions. If the buyer discovers the risk during due diligence, it becomes a price reduction, a warranty, or a holdback. If the seller resolves it beforehand, it ceases to be negotiating ammunition.
What Buyers Discount—and by How Much
The discount resulting from poor preparation is measurable. In Spanish middle-market transactions, it typically ranges between 10% and 20% of the value agreed in the initial Letter of Intent and can exceed that threshold when significant latent liabilities exist.
This is not an abstract penalty. It stems from specific issues.
The quality of EBITDA is the first. Shareholder salaries that are not at market rates, rent paid to a related-party property company, personal expenses mixed with business expenses, or non-recurring items treated as ordinary operating costs. Unless these items are normalized and properly documented, the buyer will not accept the earnings figure underpinning the valuation.
Tax risk is the second major focus. The general statute of limitations for tax obligations is four years (Article 66 of the Spanish General Tax Law). As a result, the buyer acquires the company together with its exposure to tax audits covering the four fiscal years preceding closing. Related-party transactions lacking transfer pricing documentation, poorly supported deductions, or questionable VAT treatments quickly translate into provisions that reduce the purchase price.
Added to this are undocumented contracts, misclassified self-employed workers, outdated corporate minute books, and compliance deficiencies—from whistleblowing channels required for companies with more than 50 employees (Law 2/2023) to trademarks and domain names registered in the founder’s name rather than the company’s.
Every gap becomes a question. Every unanswered question becomes a risk. And every unresolved risk becomes a discount.
Pre-Sale Preparation Is Not Window Dressing—It Is Organization
Two ideas that are often confused should be separated.
Pre-sale preparation is not about hiding problems from a buyer. It is about identifying and resolving the company’s genuine weaknesses before a third party discovers them, and about building a narrative that the business can defend with evidence.
The work has two stages.
First, an objective assessment: what the company is worth under different valuation methods, what risks it carries, and what strategic options are realistically available.
Second, a remediation process that addresses, one by one, the corporate, employment, tax, and contractual contingencies identified during the assessment.
A contingency resolved while the company still controls the process costs only a fraction of what it costs when discovered by a third party after a transaction is already underway.
The effect on the deal is immediate. The buyer’s due diligence shifts from exploratory to confirmatory. A process that might otherwise take six to eight months becomes shorter. And the seller’s data room answers most of the standard questions before they are even asked.
From Reacting to Choosing
The most important change is not cost. It is position.
A company that knows itself objectively and has resolved its issues enters any conversation with facts in hand: what it is worth, what liabilities it carries, and what each strategic path implies.
It makes decisions based on judgment, not urgency.
Private equity enters 2026 with very high levels of available liquidity, but it is more selective than ever. Strong historical financial results are no longer enough. Investors are looking for certainty about the future of the business, and they find it only in well-organized companies.
Pre-sale preparation is what separates the entrepreneur who receives an offer from the entrepreneur who negotiates a transaction.
When the moment arrives—whatever form it takes—the prepared business owner has options.
The unprepared one only has urgencies.
Luis Ángel Molero Pérez is a partner at Integra Consultoría Gerencial, S.L. He advises SME executives on strategy, financial management, and M&A transactions.
References
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