Selling a Business: What Buyers Pay and the Cash You Receive at Closing

Selling a business follows an order: prove the earnings a buyer can verify, set a price range and a floor, choose which kinds of buyer to approach, then hold every bidder to one deadline. The range and the floor are written down before the first buyer hears the company's name.

This guide is for owners, CEOs and CFOs of established companies whose enterprise value is EUR 10M or more (the price of the business before debt and cash are settled) who are selling a company or weighing it. Below that line a regional broker is often the better fit.

How does selling a business work, from the decision to closing?

Five stages cover how to sell a company, from the owner's decision to a signed purchase agreement. Each stage ends with a document that the next one needs. Stage two is the one to protect, because an offer that arrives before the floor exists becomes the floor.

1. Numbers. A numbers pack with every add-back (an expense removed from earnings as one-off) documented.

2. Range and floor. A written valuation range and the lowest price the owner will sign at.

3. Buyer list. Named strategic and fund buyers, each approved by the owner before anyone is contacted.

4. Offers. Written offers from several bidders, all due on one date.

5. Diligence and signing. A signed purchase agreement, after the buyer's confirmatory diligence (a last check of everything its offer rested on).

Through sell-side M&A advisory, spectup works for the seller only: the seller pays the fee, and the buyers come to the owner's table.

Is your business ready to sell? What a buyer checks first

A buyer's diligence prices what it can verify and takes a discount on what it can't.

3 columns. Drag the table sideways; the first column stays put.

Owner dependence takes longest to fix. Earnings can be restated within a quarter, while a business that stops when its owner is away takes longer to change, and a buyer prices that gap from the first meeting.

The numbers and the equity story (what the company is sold as) travel to buyers in a confidential information memorandum. A quality of earnings review, an accountant's test of the earnings figure, tests the earnings row when a buyer or the seller commissions one.

How is a business valued when you sell it?

A buyer multiplies adjusted EBITDA by a multiple to reach a price, and the multiple is the part that moves.

The product is enterprise value. Subtract net debt (debt less cash) and what remains is the equity value that belongs to the shareholders, before the adjustments covered in the price-to-cash section below.

The multiple moves with size, growth, the share of contracted revenue and the type of buyer bidding, so a valuation is a range, and the floor the owner signs at sits inside it.

Argos, a European mid-market investment fund, publishes a quarterly index of the prices paid in the eurozone. In its Mid-market Argos Index for Q2 2026, the median multiple for unlisted companies was 8.8x EBITDA, across majority-stake deals with an equity value between EUR 15M and EUR 500M.

The median is the middle of a wide spread: more than a quarter of the deals priced below 7.0x. The index starts at EUR 15M of equity value, so it says little about a company at the lower end of the EUR 10M floor.

The business valuation calculator applies three multiples to an EBITDA figure and subtracts net debt.

Which buyers pay for a business, and what each one asks of you

Four kinds of buyer approach a company of this size, and selling a business to each asks something different of the owner after signing.

• Strategic acquirer. A company in the same or an adjacent market that buys to combine operations and cut shared costs. It usually wants the team and often asks the owner for a transition period.

• Private equity fund. A buyer that pays for earnings and usually wants management to stay. Some funds ask the owner to reinvest part of the proceeds, called a rollover.

• Platform add-on. Your company bought by a business that a fund already owns.

• Insiders. A management team or the next generation of the family. A management buyout or a family succession can join a running process as one more bidder.

The gap is between medians for each buyer type. The index doesn't say why funds paid more, and funds may be buying larger or faster-growing companies than strategic buyers do.

A higher multiple that comes with a rollover can leave less cash at closing than a lower multiple paid fully in cash, so compare offers on the money received.

A direct competitor is approached late, after it has signed an NDA, because it learns the customers and prices even when it doesn't buy. Selling is one of several exits, set out against the others in exit routes compared.

From headline price to cash at closing, and where tax comes in

The price in a letter of intent and the money that reaches the owner on closing day are two different numbers, and the gap between them is EUR 11.5M in the example below, on a EUR 30M price. Net debt, working capital, escrow, earnout and rollover sit between the two:

• Net debt is repaid out of the proceeds.

• A working-capital adjustment settles the gap between the normal level the price assumed and the level at closing.

• An escrow holds part of the price back against claims.

• An earnout pays part later, only if the business reaches agreed targets.

• A rollover keeps part of the price invested in the buyer's structure.

In this illustrative example the owner receives EUR 18.5M on closing day. Up to EUR 5M more follows if the escrow is released in full and the earnout targets are met. The example has no rollover.

Structure also sets the tax. In the US, when the assets of a business are sold, each asset is treated as sold separately, and buyer and seller must allocate the price across the assets by the residual method, the IRS explains. How the price is split is therefore a tax decision, and it belongs on the table before signing.

An asset sale generally needs the consent of counterparties to move key contracts and permits, and the buyer can step up its tax basis to the price paid, according to Baker McKenzie's guide to US deal structures. A share sale leaves the contracts in the company and generally doesn't need consents unless they carry change-of-control clauses.

Capital gains when selling a business are taxed by route and by country. In the UK, Business Asset Disposal Relief sets 18% on qualifying gains from 6 April 2026 for owners who meet its two-year ownership conditions, but a lifetime limit of GBP 1M applies to the claim, so on a sale of this size part of the gain usually sits above it.

The two examples here are the US and the UK; an owner elsewhere takes the home country's rules to a tax advisor before the route is fixed.

Broker, M&A advisor or a direct sale: which fits your size?

How to sell a company at your size depends on who runs the sale, and the line between a broker and an advisor sits at an enterprise value of about EUR 10M.

4 columns. Drag the table sideways; the first column stays put.

spectup takes sell-side mandates from EUR 10M of enterprise value and passes below it, where a regional broker is the right fit. It also passes on shareholders who want to see what a sale might fetch, because a trial run tells the market that the company is for sale and can't be undone.

How long does selling a business take, and where does a sale lose value?

A sale has no standard length. Three things set it: how long the owner takes to get verified numbers, a range and an approved buyer list; the exclusivity period after the letter of intent; and a regulator's review where one applies.

After the letter of intent, a buyer typically asks for exclusivity, a period in which the seller can't talk to anyone else. In a US private deal that period commonly spans 30 to 60 days.

An exclusivity period ends the competition between bidders, and a number that moves in diligence then has no rival bid to hold it up.

A sale loses value in four places:

• A trial run that tells the market the company is for sale.

• A single bidder, whose offer is the whole market.

• Numbers that move under diligence, which lets a buyer cut its price at signing.

• Changes to the equity story after the first buyers have read it.

The full sequence is in the nine steps of a sell-side M&A process.

How spectup runs the process of selling a company for its owner

spectup settles these with the owner while the company is still private:

• The equity story: what the company is sold as, and which buyers see a fit.

• What gets fixed: customer concentration, owner dependence and contracts that don't assign, before any buyer reads the numbers.

• Range, floor and buyer list: the range, the floor below which the owner walks away, the forms of payment accepted, and every buyer name written down and approved by the owner before anyone is called.

Every approach goes out without the company's name. A party learns who it is only against a signed NDA, and the information memorandum with the numbers goes only to parties that have signed. The data room, where buyers test those numbers, opens last, and only to bidders whose written offers are in.

The fee is a monthly retainer while the mandate runs and one transaction fee when the sale closes and the owner receives the money. If the company doesn't sell, the owner has paid the retainer and owes no transaction fee.

Selling a business checklist: what to put on paper before a buyer or an advisor is called

Five answers should exist in writing before you start selling a business.

• The reason for selling and the deadline.

• What the owner does after closing: stay, roll part of the proceeds or leave.

• Who runs the company day to day once the owner is out of the room.

• The range and the floor, as enterprise value and as cash at closing.

• Who's on the buyer list and who's off it, competitors included.

With those five on paper, an owner at or above EUR 10M of enterprise value takes them to a sell-side advisor before any buyer is called, and below it to a regional broker.