Sale Price

The sale price is the financial consideration agreed between seller and acquirer for the transfer of business ownership. In M&A transactions, it is generally expressed as enterprise value (EV) — then converted to equity price by deducting net debt and adding available cash at closing. Its determination results from negotiation based on the target's valuation, market conditions, acquirer profiles and sale process dynamics.

The sale price may comprise several components: a base price fixed at signing, a price adjustment mechanism (locked-box with ticking fee or completion accounts), and a conditional component (earn-out) linked to future performance. The net price actually received by the seller differs from the gross price by applicable taxes: in France, capital gains are subject to the 30% flat tax or progressive rate; in Switzerland, capital gains realised on private assets are exempt under conditions.

A well-run competitive process (several acquirers competing simultaneously) typically generates a price 15 to 30% higher than a direct bilateral negotiation — justifying the use of a financial advisor. Independent business valuation is the technical foundation of the price negotiation.

Example: a Vaud SME is sold to a trade buyer. Negotiated EV: CHF 14.0 million. Net debt adjustment (CHF 2.1M): equity price = CHF 11.9 million. Conditional earn-out: CHF 1.5 million maximum over 2 years. Maximum total gross price: CHF 13.4 million. Geneva-based seller's capital gain (acquisition basis CHF 200,000): CHF 11.7 million — fully exempt from income tax.

At Hectelion, we advise sellers and acquirers on the determination, structuring and tax optimisation of the sale price in Franco-Swiss transactions.