Selling the Company as Succession: When a Sale Is the Right Route

For many owners today, selling is the way to solve succession rather than the opposite of it. Where no successor stands ready in the family and management cannot or will not take over, a sale to a suitable buyer secures the continuity of the business, the jobs and the value of a lifetime of work. Selling the company and business succession are two sides of the same question.

How we guide owners through business succession — from the first decision to the handover — is set out on our services page.

Succession sounds like family; a sale sounds like an exit. In practice the two coincide. A large share of handovers today are external, meaning a sale to a buyer outside the family. This article sets out when a sale is the right succession route and how it works. How a sale process runs in detail, and how we support it, is described under selling your company.

Why a sale and a succession belong together

The classic picture — the business passes to a son or daughter — applies less and less often. The absence of a family successor is one of the most common reasons a business has to change hands without anyone in the family being ready to take it on. The scale of this wave of handovers is set out in business succession in Germany and business succession in Austria.

At that point the question is no longer family or sale, but: how does a sale become a good succession? A sale that keeps the business running and the workforce in place is more than a transaction — it is the handover of a lifetime of work into other hands.

When a sale is the right succession route

A sale is rarely the first idea, but often the most durable solution. It fits above all in these situations:

• There is no suitable successor in the family — or the next generation has deliberately chosen its own path.
• A management buy-out (MBO) fails on financing, or the right team is simply not there.
• You want to realise the value tied up in the business while securing its continuity.
• The business needs a partner with capital, a network or market access for its next step.

The routes available in principle are set out in succession solutions; handovers to family, employees or external successors are compared in handing over a business. Manufacturers in the food and beverage sector have their own value drivers.

A sale against the other succession routes

The routes differ in control, purchase price and effort. The table below sets out the most common ones.

Route	Who takes over	Typically suitable when …
Family-internal handover	a child or relative	a suitable and willing successor is available
MBO / MBI	your own management or an external manager	a strong team and viable financing are in place
Sale to a strategic buyer	a company from the same sector	continuity and market position matter most
Sale to an investor	a financial investor or shareholding	capital for growth or a partial exit is wanted

The difference between an internal and an external management purchase is explained in MBO versus MBI; owners weighing up buyer types will find the comparison in strategic buyer or financial investor?.

How a sale as succession runs

A sale intended as a succession follows the same structured process as any company sale — with one additional demand: finding the right successor, not merely the highest bidder.

It starts with preparation: making the business ready for handover and knowing what it is worth. How that is done is set out in preparing for succession. Then comes the curated buyer search — a longlist of possible successors, discreet approaches, and competition between several interested parties. The route to that point is described in how do I find the right buyer?, and the process end to end in the stages of a company sale.

Fit is what matters. In a succession, price is not the only measure: how the buyer treats the business, its employees and its customers counts as well. Why the highest price is not always the best succession is set out in why the purchase price is not everything.

The time factor

A succession by way of a sale needs lead time. Starting early means you can look for the right successor calmly, raise value deliberately and accompany the handover. While the market typically allows six to twelve months for a sale, IGCP normally runs the process in three to six months — but it is the preparation beforehand that decides the outcome. When the right moment arrives is covered in the right time for a succession.

If you are thinking about succession, a sale or finding an investor, talk to IGCP Capital Partners in confidence — independent and discreet.

FAQ

Is selling a company a form of business succession?

Yes. Where no family successor takes over, a sale to a suitable buyer is the most common form of external succession. It secures continuity and jobs, and hands the business on in an orderly way.

When should I sell rather than hand over within the family?

When there is no suitable or willing successor in the family, when an MBO is not viable, or when you want to realise the value and secure continuity at the same time. External succession is covered in more depth in succession without a family successor.

Will I get a good price in a sale structured as a succession?

The price emerges from competition between several interested parties, not from a formula. A structured process with a curated buyer approach protects both value and negotiating position — and finds the right successor at the same time.

How long does a succession by way of a sale take?

As a guide, the sale process itself takes several months; the preparation beforehand should begin some years ahead. The range is set out in how long a company sale takes.

What is the difference between an MBO and an MBI?

In an MBO the existing management team buys the business; in an MBI an external manager comes in and takes over. Both depend on a strong team and viable financing. The comparison is set out in MBO versus MBI.

Should I sell to a strategic buyer or to an investor?

A strategic buyer from the same sector tends to suit owners for whom continuity and market position matter most. An investor suits situations where capital for growth or a partial exit is the goal. The two are compared in strategic buyer or financial investor?.

Does the highest bidder make the best successor?

Not necessarily. In a succession, how the buyer deals with the business, the employees and the customers weighs alongside the price. The argument is set out in why the purchase price is not everything.