A conversation with Board Advisors founder Christoph Löslein
As part of our series “M&A Conversations,” Martin Wilderer interviews Christoph Löslein on topics including:
- Key success factors in M&A transactions
- When is the right time to sell a business?
- How do I prepare for a transaction?
- Which investors and buyers are better suited for my company: financial or strategic buyers?
- Do you need advisors?
Martin Wilderer: Christoph, 18 years ago, you founded Board Advisors after leading countless transactions and initially receiving requests for help from your network, which then grew beyond that. My first question is this: What, in your opinion, are the three most important success factors in selling a company?
Christoph Löslein: Martin, it’s difficult to narrow it down, as a complete M&A process, according to our analysis and experience, consists of more than 300 individual steps. Each must be handled precisely; otherwise, you leave “money on the table,” waste valuable time for the client, potential buyers, or even your own resources.
If I had to choose, the most crucial factor is early and thorough preparation—well before approaching potential buyers. From the moment outreach begins, the clock is ticking. A transaction is always like a surgical procedure on an organism, and this period should be as short as possible, achievable only through optimal and nearly complete preparation.
The second key point is thinking through the process “from the end”—what does my client actually want to achieve? By when? Is it solely about maximizing the sale price, or is there more? What should the synergies with the buyer look like, and what should happen to the company post-sale? These factors aren’t random and can be developed. Ignoring them often leads to irreparable mistakes.
This directly ties to the third point: post-merger integration involves plausibility checks, feasibility assessments, and synergy quantification. But it’s far from enough to just look at the numbers. Rather, it’s about understanding the company with its employees, culture, and values. In more detailed management presentations and when choosing a buyer, these play a significant role, and decisions should not be left to chance. Every company, no matter how small or large, is too valuable for that!
Martin: Regardless of these three factors, when is the right time to sell a business? If the numbers are good, anytime, right?
Christoph: Another question that defies a standard answer, Martin. Many factors are beyond control, like the economic climate and conditions in the target market. The simple reality that owners may no longer want or be able to run the business or a fund’s or founder’s desire for liquidity can also heavily influence timing.
Timing shouldn’t be dictated by riding a wave of short-term successes or by “dressing up the bride,” as they say (which I find an unfortunate term). It’s about recognizing what’s unique within the company and how it aligns with current market demands—not as a passing fad.
While attractive results play a major role, the primary aim is to position the company to offer genuine added value to buyers, beyond EBITDA margins or free cash flow.
If you can’t demonstrate the company’s value within the value chain context, it’s better to wait and prepare more thoroughly. Growth potential should also be identifiable and effectively demonstrable.
Even the best product, impressive customer base, and excellent financial results aren’t sufficient if management isn’t developed accordingly—these are all factors that significantly influence the right timing for a sale.
Everything must align. In this sense, “Timing is Everything,” as Shakespeare and Apple co-founder John Sculley put it—a saying that can be crucial to M&A success.
Martin: Preparation is always important, agreed. But you’ve listed many factors, each a large topic in itself. It’s easy to get lost in them. What should one focus on?
Christoph: Simply put: once the transaction process begins, you’re riding a wave you ideally don’t want to fall off. Start with the process, ensuring everything that can be done before market outreach is completed. This gives you time to consider questions and their implications calmly later. Red flags in due diligence aren’t rare, but if you proactively look for them during preparation, they’re often identifiable and won’t arise as surprises in the middle of the process.
Preparation includes more than just creating the teaser and sales prospectus. Early on, it helps to set up the data room so that the client has thoroughly reviewed it—after all, they are liable, to varying degrees depending on negotiation skill.
Even the visual impression conveys whether it’s a “well-organized” company or one operating in “chaos mode.” Small details can leave a lasting impression, and cognitive research shows that the first impression—even in digital interactions—is made in milliseconds and can determine future actions, positively or negatively. Doing this calmly helps, or it shows when things are rushed.
Additionally, thinking about how best to strategically develop the company—and who might be better suited to do so—can start years in advance. That would be the ideal buyer. The clearer and more coherent this is with the company’s strategy, the easier it is to formulate the “Equity Story,” i.e., expressing value from the buyer’s perspective. This should ideally be part of any strategic planning, and you can’t start early enough.
Preparation serves to achieve a successful negotiation outcome, not just in terms of purchase price. Determining the main negotiation positions is central. Changing direction later, potentially due to new information in due diligence, undermines credibility and can end the process.
Martin: Switching directions, here’s a question I always get asked first: Which investors and buyers are better for my company—financial or strategic?
Christoph: Interesting point. We often encounter the assumption that financial investors are “sharks” compared to strategic buyers, supposedly detrimental to the company. While some exist, you can’t paint all with the same brush, and the DACH region has the luxury of a wide selection of buyers today—a stark contrast to 10-15 years ago.
Financial investors can be particularly interesting for financing a structured build-up before even selling to the “dream strategist.”
Financial investors are also indispensable for executing Buy & Build strategies, an excellent opportunity for founders to remain in a familiar market but in a different role. Recently, financial investors are increasingly thinking and acting strategically, further blurring the lines between these two groups. Why? Companies in a fund portfolio acquired five or more years ago have “matured,” reaching substantial size and should be sold or further expanded through acquisitions. This can only be done by focusing not only on optimizing performance KPIs but also on thoroughly understanding the company’s operations and market.
Martin: A perhaps unfair question: Do you need an M&A advisor? If so, what should you expect from a good advisor, what is their role, and what should they avoid?
Christoph: I can’t answer that completely impartially! Naturally, I believe experienced advisors are irreplaceable for the success of an M&A process, or at the very least, they have a strong potential to increase the company’s value and support the process without significantly disrupting the client’s “daily operations.”
Here are a few assumptions that, of course, vary by case:
- First, many companies have little M&A experience. The advisor’s expertise helps make the complexity of a transaction—consisting of over 300 steps—manageable.
- Secondly, a sale is a highly emotional matter; the advisor should bring calmness and clarity.
- While the company’s strategy isn’t the M&A advisor’s responsibility, they can help view it from the buyer’s perspective, integrating these insights into strategic considerations.
- Finally, the advisor should assist in preparing and conducting the process, especially if it’s to remain confidential from employees.
- The primary goal—value increase—ensured through a clean, agile, and transparent competitive bidding process, should form the basis of the advisor’s work.
On the other hand, they are just advisors and can’t compensate for what the company or its leadership may fundamentally lack. An M&A advisor is also typically not a lawyer. While they should be capable of efficiently introducing a lawyer to the transaction and commenting on legal aspects based on experience, ultimately, specialized corporate lawyers will draft and negotiate the sale contract.
What shouldn’t an advisor do? Cut corners! In my experience, that doesn’t work. Examples include negotiating with the first bidder, setting unrealistic time expectations, believing one can save on specialists like lawyers, tax advisors, IP/market experts, or thinking a transaction can be optimally completed as a “one-man show.” All of these “cutting corners” are a surefire path to disaster.
Martin: Christoph, you’ve been doing M&A for over 25 years, mainly on the seller’s side since founding Board Advisors in 2005. What’s your takeaway when you think about sales projects?
Christoph: M&A isn’t rocket science. Everything is documented in detail. Just like medical knowledge, there are millions of websites. AI can provide a wealth of impressive information. But none of the roughly 100 transactions I’ve had the honor to be involved in are alike. Each transaction is unique, just as every individual company is unique in some way.
Surprises always arise in every transaction. The solutions aren’t always in the textbook, and reality often differs from the original plan.
A good transaction isn’t a zero-sum game. It depends on the creativity and flexibility of all parties to find the optimal deal.
M&A is more than a financial transaction where a company is “offloaded.” It’s a strategic step within a company’s development and growth path, requiring careful planning, understanding of the company, and market knowledge. Proper preparation and a sense of timing significantly influence M&A success. Precisely because it’s unique, it’s also a lot of fun.
Martin: You’re absolutely right. Christoph, thank you for the conversation, and I look forward to continuing it soon.