Featured image Corporate transaction

Corpo­ra­te transac­tions: successful­ly maste­ring the purcha­se and sale of companies

Corpo­ra­te transac­tions are Complex proces­ses with high risk and at the same time great oppor­tu­ni­ty. With the right strategy and experi­en­ced advice, you can successful­ly master the purcha­se or sale of your company.

The road to success: a guide

Proper prepa­ra­ti­on, a compre­hen­si­ve compa­ny valua­ti­on and the conside­ra­ti­on of tax, legal and econo­mic aspects form the basis of successful compa­ny acqui­si­ti­ons and sales. With the exper­ti­se of experi­en­ced consul­tants at your side, the phases of a transac­tion - from initi­al assess­ment to successful comple­ti­on - can be maste­red effici­ent­ly and purposefully.

This guide takes you through all phases of a corpo­ra­te transac­tion, from initi­al planning to successful comple­ti­on. It offers you valuable tips and infor­ma­ti­on to help you minimi­se risks, exploit oppor­tu­ni­ties and achie­ve your goals.

Key points at a glance

  • Defini­ti­on ofCorpo­ra­te transac­tions include changes in the owner­ship struc­tu­re, such as purcha­ses, sales or transfers.
  • Oppor­tu­ni­tiesThey offer oppor­tu­ni­ties for growth, restruc­tu­ring, syner­gies and succes­si­on planning.
  • Frequent transac­tion typesThese include Share deals, asset dealsmergers and carve-outs.
  • Need for counsel­lingThe complex process requi­res profes­sio­nal support from M&A experts.
  • Success factorsClear objec­ti­ves, strate­gic planning, open commu­ni­ca­ti­on and choosing the right partner are crucial.

With the specia­lists from KERN Unternehmens­nachfolge at your side to support you in every phase - from the initi­al analy­sis and partner search to contract drafting and integra­ti­on - nothing stands in the way of your success.

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What are corpo­ra­te transactions?

Corpo­ra­te transac­tions are proces­ses that change the owner­ship struc­tu­re of a compa­ny or parts of a compa­ny. They include the purcha­se, sale or demer­ger of compa­nies or parts of compa­nies, as well as compa­ny mergers. The aim of such M&A transac­tions (mergers & acqui­si­ti­ons) is to achie­ve strate­gic corpo­ra­te objec­ti­ves such as growth, market expan­si­on, succes­si­on planning, diver­si­fi­ca­ti­on or syner­gy effects.

The diver­si­ty of corpo­ra­te transac­tions: What types are there?

The term corpo­ra­te transac­tion encom­pas­ses various forms of compa­ny acqui­si­ti­ons, sales and mergers.

Graphic overview of corporate transactions

Diffe­rent transac­tion types can be conside­red depen­ding on the objec­ti­ve and initi­al situation:

Acqui­si­ti­ons are charac­te­ri­sed by the targe­ted acqui­si­ti­on of compa­nies or business units, either via share deals, which invol­ve the purcha­se of shares in the compa­ny, or via asset deals, which invol­ve the acqui­si­ti­on of selec­ted assets. These strate­gies are pursued by a wide range of players, inclu­ding strate­gic inves­tors, finan­cial inves­tors and market compe­ti­tors as well as indivi­du­als (MBIs), in order to conso­li­da­te their market positi­on or develop or integra­te new business areas.

Divest­ments reflect the strate­gic withdra­wal, the sale of compa­nies or divisi­ons, motiva­ted by the desire to stream­li­ne the portfo­lio, finan­cial restruc­tu­ring or the prepa­ra­ti­on of an order­ly reorga­ni­sa­ti­on. Compa­ny succes­si­on. This includes a diver­se range of sellers, from priva­te entre­pre­neurs to strate­gists and finan­cial investors.

Succes­si­on planning serve to ensure business conti­nui­ty through the hando­ver to the next genera­ti­on, be it family members, existing manage­ment or exter­nal succes­sors, and repre­sent a key strate­gic challenge.

Within this spectrum, the follo­wing diffe­ren­tia­te Specia­li­sed transac­tion types how:

  • Mergersthe creati­on of new business units through the merger of existing companies,
  • Manage­ment buy-outs (MBO) and Manage­ment buy-ins (MBI)strate­gies in which manage­ment teams (exter­nal or inter­nal) acqui­re shares in a compa­ny and thus repre­sent a special form of corpo­ra­te succes­si­on invol­ving individuals,
  • Spin-offs and SplitsThe company’s strategy is designed to focus on the core business by spinning off or split­ting divisions,
  • Carve-outsThe targe­ted separa­ti­on of business units from a group of compa­nies with the aim of incre­asing value or strate­gic repositioning.

Motiva­tions behind M&A transactions

Corpo­ra­te transac­tions in the area of mergers & acqui­si­ti­ons (M&A) or corpo­ra­te succes­si­on are handled by prima­ri­ly 5 driving forces driven.

Graphic Motivation for M&A transactions
  1. Growth: Compa­nies strive to gain faster access to new markets, employees and techno­lo­gies through acqui­si­ti­ons in order to increase sales and profits.
  2. Syner­gies: The integra­ti­on of compa­nies aims to increase effici­en­cy by optimi­sing business proces­ses and reali­sing cost synergies.
  3. Portfo­lio optimi­sa­ti­on: Focus­sing on core businesses by dives­t­ing non-core units impro­ves strate­gic alignment and efficiency.
  4. Finan­cial restruc­tu­ring: Sales serve to increase liqui­di­ty, reduce debt or reinvest in strate­gic areas.
  5. Compa­ny succes­si­on: Order­ly hando­vers ensure the conti­nui­ty of the compa­ny and its long-term success.

The speci­fic motives vary depen­ding on the company’s situa­ti­on and the market situa­ti­on, although a clear­ly defined objec­ti­ve always forms the basis for success.

The importance of profes­sio­nal M&A advice

Profes­sio­nal support for corpo­ra­te transac­tions is essen­ti­al due to the comple­xi­ty and high finan­cial and strate­gic importance of these proces­ses. Exper­ti­se in areas such as compa­ny valua­ti­on and corpo­ra­te law aspects, Due Diligence and negotia­ti­on manage­ment minimi­ses risks and increa­ses the chances of a successful transaction.

Experi­en­ced advisors recog­ni­se and naviga­te poten­ti­al pitfalls, ensure an objec­ti­ve assess­ment and support the targe­ted imple­men­ta­ti­on of the transac­tion objec­ti­ves. This lays the founda­ti­on for the successful, future-orien­ta­ted develo­p­ment of the company.

Buying & selling compa­nies: A complex process

The purcha­se and sale of compa­nies, whether as a strate­gic expan­si­on or portfo­lio optimi­sa­ti­on, goes through a precise and deman­ding process that extends from the initi­al strategy to the final integra­ti­on. The 6 core phases of this process (from an investor’s perspective):

Diagram of the process of a corporate transaction
  1. Strategy and prepa­ra­ti­on: Defini­ti­on of transac­tion targets and struc­tures and identi­fi­ca­ti­on of poten­ti­al target companies.
  2. Initi­al contact and letter of intent (LOI): Initi­al discus­sions and formu­la­ti­on of a letter of intent, which forms the basis for confi­den­tia­li­ty and further negotiations.
  3. Due diligence: Compre­hen­si­ve analy­sis of the target compa­ny for risk and value, inclu­ding finan­cial, contrac­tu­al and person­nel reviews.
  4. Compa­ny valua­ti­on: Deter­mi­na­ti­on of a well-founded compa­ny value based on the due diligence to deter­mi­ne the purcha­se price.
  5. Contract negotia­ti­ons: Negotia­ti­on of purcha­se condi­ti­ons, inclu­ding liabi­li­ty and warran­ty issues.
  6. Transac­tion and integra­ti­on: Comple­ti­on of the legal transac­tion and start of integra­ti­on into the buyer structures.
How does a compa­ny acqui­si­ti­on work? Inves­tor Tom Hardt­ke in conver­sa­ti­on with Nicole Kalon­da and Nils Koerber

6 success factors for a successful corpo­ra­te transaction

The success of a corpo­ra­te transac­tion depends on essen­ti­al factors that go far beyond the finan­cial aspects and form a solid basis for every phase of the process:

  1. Clear objec­ti­ves and strategyA precis­e­ly defined strategy and clear objec­ti­ves are essen­ti­al. This includes the motiva­ti­on behind the transac­tion and plans for future growth.
  2. Careful prepa­ra­ti­onThorough prepa­ra­ti­on on the part of both parties facili­ta­tes a smooth process. This includes early data prepa­ra­ti­on and metho­di­cal project planning.
  3. Experi­en­ced consul­ting teamThe comple­xi­ty of M&A requi­res the exper­ti­se of specia­li­sed consul­tants with in-depth indus­try knowledge and experi­ence in transac­tion structuring.
  4. Compre­hen­si­ve due diligenceA detail­ed and objec­ti­ve review of the target compa­ny is crucial in order to identi­fy risks and assess opportunities.
  5. Negotia­ti­on skillsSkilful negotia­ti­on, based on sound knowledge and strate­gic skills, is essen­ti­al to achie­ve optimal results.
  6. Prepa­ra­ti­on for integra­ti­onPlanning for seamless integra­ti­on starts early and is criti­cal to the long-term success of the transaction.
Figure 6 Success factors for a successful corporate transaction

Past corpo­ra­te transac­tions of KERN

KERN Unternehmens­nachfolge supports compa­nies in all phases of the transac­tion. Below you will find experi­ence reports on the sale and purcha­se of companies:


Corpo­ra­te transac­tions play an important role in the further develo­p­ment of compa­nies, sectors and markets. They open up new oppor­tu­ni­ties for growth, expan­si­on, diver­si­fi­ca­ti­on, succes­si­on and restruc­tu­ring measu­res. At the same time, they harbour risks, requi­re speci­fic exper­ti­se and are often associa­ted with emotio­nal challenges.

The successful reali­sa­ti­on of a corpo­ra­te transac­tion is the result of a combi­na­ti­on of several factors:

  • Clear objec­ti­ves and a precise idea of the ideal situa­ti­on after completion.
  • Compre­hen­si­ve market exper­ti­se and negotia­ting skills.
  • Careful planning of all stages of the transac­tion process.
  • Effici­ent project manage­ment for a smooth process.
  • Profes­sio­nal support from experts with many years of experience.

FAQ - Frequent­ly asked questions

What are Mergers & Acqui­si­ti­ons (M&A)?

M&A stands for Mergers & Acqui­si­ti­ons and descri­bes the merger or takeover of companies.

What does due diligence invol­ve in corpo­ra­te transactions?

Due diligence is an in-depth exami­na­ti­on of the compa­ny in order to identi­fy risks and oppor­tu­ni­ties. It includes, for examp­le, analy­sing the finan­cial situa­ti­on, business proces­ses and the market environment.

Is it advisa­ble to sell a compa­ny with or without advice?

The support provi­ded by experi­en­ced M&A advisors offers many advan­ta­ges, e.g. access to a network of poten­ti­al buyers, profes­sio­nal conduct of negotia­ti­ons and avoid­ance of mistakes.

How long do compa­ny sales take?

The durati­on can vary great­ly, but is usual­ly between 6 and 24 months.

Overview of the duration of the company sale
What sales strate­gies are there?

There are various sales strate­gies, e.g. approa­ching poten­ti­al buyers direct­ly, conduc­ting a bidding process or selling via an auction platform.

What needs to be conside­red when buying a company?

In additi­on to due diligence, the finan­cing, integra­ti­on of the compa­ny and the legal frame­work should also be taken into account.