Selling Your Business? The Price You Expect May Not Be the Price You Receive
For a generation of Romanian entrepreneurs approaching retirement, selling the company they built may prove more complicated than running it. Romania’s first generation of private entrepreneurs is reaching an important turning point. Many started their businesses in the 1990s, when the market economy was taking shape and commercial opportunities were plentiful, although the rules were…
For a generation of Romanian entrepreneurs approaching retirement, selling the company they built may prove more complicated than running it.
Romania’s first generation of private entrepreneurs is reaching an important turning point. Many started their businesses in the 1990s, when the market economy was taking shape and commercial opportunities were plentiful, although the rules were often uncertain. Three decades later, some of those businesses have become established companies with substantial revenues, valuable assets and loyal customers. Their founders are now approaching an equally important decision: what happens next?
For those considering a sale, the question of value usually comes first. After decades of work, investment and personal risk, owners naturally expect a price that reflects both the company’s achievements and its future prospects. Yet the value they attach to their business can differ considerably from the price an investor is prepared to offer.
The price in the newspaper
Reports of major transactions have become a regular feature of Romanian business news. International groups acquire local companies, private equity funds invest in regional businesses, and successful entrepreneurs sell majority stakes at valuations that would have seemed improbable twenty years ago.
According to Deloitte, Romania accounted for 18% of M&A transaction volume in Central and Eastern Europe in 2025, compared with 13% in 2021. The market has developed considerably, attracting both financial investors and strategic buyers.
For company owners, these transactions provide a useful indication that there is an active market for established Romanian businesses. They can also create misleading expectations.
An entrepreneur reads about a competitor selling at an attractive multiple of earnings and naturally wonders whether their own business could command a similar valuation. But transaction prices reflect circumstances that rarely appear in a newspaper headline: market leadership, predictable earnings, international operations, an experienced management team or competition between several bidders.
Even the price itself may be more complicated than reported. Payments can extend over several years, depend on future results or require the founder to retain a stake in the company. EY-Parthenon’s review of Romanian transactions in 2025 found that approximately 70% had no publicly disclosed value. Where prices are available, they seldom reveal the complete economic agreement between buyer and seller.
A published multiple is useful background information. It is a poor substitute for understanding what makes a particular business attractive to a particular investor.
The same business, different buyers
The identity of the buyer can matter as much as the performance of the company being sold.
Private equity funds and strategic investors approach acquisitions with different objectives. A financial investor is interested in the return that the business can generate over a defined investment period. Growth potential, management quality, cash generation and future exit opportunities all influence its assessment.
A fund seeking to establish a regional platform may be willing to pay a substantial premium for a company with a strong market position and the capacity to acquire smaller competitors. Another fund, working with a different investment strategy, may have little interest in the same opportunity.
Strategic buyers generally approach the calculation from another direction. An industrial group may see the acquisition as a way to enter a market, expand production, strengthen distribution or acquire capabilities that would take years to develop internally. The potential savings and commercial advantages resulting from the combination can justify a higher price.
Either can become the most attractive buyer, depending on the company and the circumstances. For the seller, the challenge is to identify which investors have a genuine reason to value the business more highly than others. The quality of the investor selection matters more than the number of names on it.
What the buyer discovers
The distance between the seller’s expectations and the buyer’s assessment often becomes apparent during due diligence.
At the beginning of a transaction, discussions tend to focus on the company’s strengths. Once the buyer gains access to the underlying information, attention turns increasingly towards the risks and obligations that accompany ownership. Buyers examine the sustainability of earnings, customer concentration, supplier dependence, tax matters, contracts, working capital and investment requirements.
A profitable manufacturer may have postponed equipment replacement. A distributor may have achieved impressive sales growth while allowing receivables and inventories to absorb an increasing share of cash. A family business may depend heavily on the founder’s relationships, with few managers capable of operating independently.
None of these circumstances necessarily makes the company unattractive. They do influence the buyer’s assessment of risk, the capital required after the acquisition and, ultimately, the price.
Investors are buying future earnings and assuming future risks. Past achievements provide evidence, but they offer no guarantee. This explains why preparing a company for sale can be as important as finding a buyer.
The difference between price and proceeds
When a company changes hands, the amount discussed publicly may represent the value of its operating business rather than the amount shareholders will receive. Financial debt, available cash, working capital adjustments and other obligations can all affect the final purchase price.
The agreement may also provide for deferred payments, performance-related consideration or the retention of a minority stake by the seller. Transaction expenses and taxes further influence the proceeds. For an entrepreneur preparing to retire, these details are far from secondary.
One offer may propose a higher valuation but make a substantial part of the payment dependent on results over the following years. Another may offer a somewhat lower price, largely payable upon completion, with fewer continuing obligations. The first may appear more attractive in a newspaper. The second may better serve the seller’s objectives.
The price matters, but so do the certainty of receiving it, the time required and the responsibilities that remain after the sale.
The advantage of preparing early
Many owners begin thinking seriously about a sale only after receiving an unsolicited approach. Such interest can be flattering. It may also place the seller at a disadvantage: the buyer has usually studied the sector, competitors and likely valuation range, while the entrepreneur may be entering a first serious transaction discussion.
By preparing earlier, owners can examine the business from an investor’s perspective. They can address reporting weaknesses, clarify shareholder arrangements, review outstanding obligations and identify matters that could create difficulty during due diligence.
They can also decide what they actually want. Some founders seek a complete exit. Others prefer to sell a majority stake while remaining involved for a few years. Some want to secure their family’s financial future without abandoning the company immediately. These objectives may require different buyers and transaction structures.
Preparation allows those choices to be made before negotiations begin, rather than under the pressure of an offer.
A transaction most entrepreneurs make only once
Romanian business owners have accumulated considerable experience in building and managing companies. Selling an entire business is another matter.
Private equity funds and corporate buyers routinely work with specialised advisers and follow established acquisition procedures. They understand the sequence of negotiations, the information they need and the contractual protections available to them. Most founders sell their company only once.
This imbalance explains the role of an independent M&A adviser representing the seller. The work begins with assessing the business and identifying suitable investors, but extends to preparing information, organising negotiations, managing due diligence and evaluating the economic implications of competing offers.
The objective is not simply to obtain an impressive valuation. It is to complete a transaction that meets the shareholders’ objectives and converts years of accumulated business value into acceptable proceeds.
After spending decades building a company, an owner should be equally careful about the terms on which they leave it.
Considering a sale?
BWC Mergers advises business owners and shareholders on exit preparation, buyer identification, valuation, transaction structuring and negotiations. An early, confidential assessment can establish the available options and help owners approach a potential sale from a better-informed position.
