Business Acquisition

A business acquisition refers to the process by which a new owner — individual acquirer, investment fund or corporate buyer — takes control of an existing company by purchasing its shares or assets. Unlike a start-up, an acquisition provides immediate access to an established customer base, trained teams and a financial track record, which reduces initial operational risk while introducing specific risks linked to acquiring existing liabilities, culture and commitments.

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The acquirer can finance the purchase in several ways: personal equity contribution, LBO through an acquisition holding combining equity and senior debt, vendor loan from the seller, or partnership with a private equity fund. The chosen structure depends on the acquirer's financial capacity, the target's profile and prevailing credit market conditions.

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Financial due diligence is an indispensable step before any acquisition: it validates the quality of historical results, identifies latent liabilities (tax, social, environmental) and confirms the sustainability of the financing plan. An independent business valuation is also recommended to objectify the negotiation price.

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Example: a 45-year-old commercial director completes an MBO on the company he has led for 8 years. He creates a holding, contributes CHF 400,000 personally and raises CHF 3.2 million senior debt from his cantonal bank to finance a CHF 4.5 million EV. The Year 1 DSCR is 1.35x — deemed sufficient by the lender.

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At Hectelion, we accompany both acquirers and sellers in the structuring, valuation and negotiation of Franco-Swiss acquisition transactions.