Exclusive M&A Advisory Mandate for a Construction Sector Sale
Exclusive financial advisory supporting the sale of a Swiss construction subsidiary to an international group
Description of the mandate: M&A advisory for the sale of a Swiss construction group to a European player
The engagement focused on the sale of the construction subsidiary of a historical Swiss player (several hundred employees, revenue of several hundred million CHF), to an independent European group wishing to strengthen its presence in the Swiss market. The exclusive financial advisory aimed to ensure operational continuity while fostering the creation of industrial and human synergies between the two entities.
The company, recognised for its expertise in the delivery of complex and emblematic projects, had operated for several decades in the French-speaking Swiss market.
Key challenges: preserving teams and know-how in a structured sale process
The main challenges lay in structuring a complex sale process involving multiple stakeholders:
- preparation of complete transactional documentation (teaser, information memorandum, data room);
- targeted selection of strategic counterparties based on industrial and cultural compatibility analysis;
- negotiation of a balanced agreement preserving teams, ongoing projects and know-how;
- integration of significant legal, financial and technical constraints specific to the sector.
Approach and outcomes: structured and competitive process, due diligence and controlled closing
The team conducted a structured and competitive sale process incorporating:
- the financial modelling of the target (DCF, sector multiples);
- preparation of the information memorandum (IM) and data room;
- coordination of financial, legal, tax and operational due diligence;
- management of contractual exchanges between the legal and financial advisers of both parties;
- negotiation of representations and warranties, asset and liability guarantees and closing conditions.
The transaction resulted in (i) the successful integration of a Swiss group within a leading international player, (ii) the securing of jobs and ongoing projects, (iii) the strengthening of the acquirer's industrial presence in the Swiss market.
Illustrative example: numerical application to a mid-cap construction group sale
For illustrative purposes only — unrelated to the actual data of the mandate — a construction group generating CHF 250M in revenue with EBITDA of CHF 18M (7% margin) could transact on an enterprise valuation of between CHF 95M and 145M (5.5x to 8.0x EBITDA multiples depending on order book quality and diversification). Price structuring typically combines (i) cash payment at closing (80-90%), (ii) earn-out conditional on 1-2 year performance (10-15%), (iii) asset/liability guarantees covered by W&I insurance.
Summary: 16-month mandate, structured process, successful international integration
Sell-side M&A mandate delivered over 16 months for a Swiss construction group sold to an independent European player. Structured and competitive process: modelling, IM, data room, multi-stream due diligence, negotiation. Deliverable: successful integration preserving jobs and projects, strengthening the acquirer's industrial presence in the Swiss market.
Frequently asked questions: construction multiples, asset/liability guarantees and process duration
What multiples for a mid-cap construction group?
For mid-cap construction groups (EUR 50-500M revenue), observed EV/EBITDA multiples range between 5.0x and 8.0x, with a premium for (i) diversification (building + infrastructure), (ii) order book quality (book-to-bill > 1.2x), (iii) profitability above the sector average (EBITDA margin > 7%), (iv) attractive geographic footprint. To go further: sector multiples.
What structure of asset and liability guarantees?
The asset and liability guarantees typically cover (i) a cap of 10-25% of the price, (ii) a basket/de minimis limiting small claims, (iii) a duration of 18-36 months (5-10 years for tax, social, environmental), (iv) standard exclusions. A W&I insurance can cover a portion to secure the seller.
How long does a structured sale take?
For a structured and competitive sell-side process on a mid-cap player, the standard duration is 9 to 18 months, incorporating preparation (2-4 months), marketing and first round (3-5 months), due diligence and negotiation (3-5 months), signing and closing (1-2 months). The mandate described was completed in 16 months.
How to preserve teams and know-how?
Team preservation rests on (i) the selection of an acquirer with industrial logic (vs short-term financial), (ii) contractual commitments to maintain jobs and identity, (iii) key management lock-in via earn-out, options or loyalty contracts, (iv) structured internal communication throughout the process.
What is the articulation between teaser, IM and data room?
The teaser (1-2 anonymous pages) presents the opportunity to potential acquirers. The Information Memorandum (IM) (40-80 pages) details the target after NDA signature. The data room contains all documents necessary for due diligence, organised by categories (financial, legal, tax, commercial, HR, operational).
What is the articulation between pre-M&A valuation and the M&A process?
The pre-M&A valuation produces a reference price for the LOI, teaser and IM. The M&A process updates this value via due diligence and negotiates a final price integrating market conditions and competition between acquirers. To go further: sell-side M&A process.
Similar mandates: other sell-side M&A transactions
The transactions shown include those completed by, or with the involvement of, Hectelion team members in current or previous professional roles. They are presented for illustrative purposes only and do not imply exclusive responsibility by Hectelion.
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The transactions presented were carried out by, with the contribution of, or with the participation of members of the Hectelion team in the context of functions performed currently or previously.