Company Sale: How to Confidentially Consider an Exit

At some point, the thought of an exit comes to most entrepreneurs—whether due to age, changing personal priorities, or a unique opportunity presenting itself. However, the path from the initial vague idea to a successful contract signing is often long and delicate.

Because nothing would be more disastrous than prematurely letting the cat out of the bag. Even a hint of a "fire sale," triggered by careless remarks or indiscretions, can unsettle employees and business partners, depress sale prices, and ultimately cause the deal to fail. A professionally orchestrated business sale therefore relies on absolute confidentiality—from the initial contemplation and market exploration to the concrete negotiations.

This article illustrates what it means to discreetly and tactically prepare for a potential exit. Experienced M&A advisors and entrepreneurs who have successfully sold their companies share the key steps and pitfalls on the way to a "silent" deal closure.

Step 1: Clarify motives and scenarios for yourself

The starting point is an uncompromisingly honest examination of your own motives and future plans. While the sale of a company may offer many advantages on a purely "rational" level, emotionally, this step is anything but easy for most founders and owners. Therefore, sufficient time should be allocated for this reflection phase:

• Why do I want to sell my company? Do push factors ("I am burned out and need a new perspective") outweigh pull factors ("Attractive purchase offers make me realize the value of my life's work")?
• How do I specifically envision my role after an exit? Do I want to fully withdraw or remain connected to the company as a consultant or minority shareholder?
• What are my personal goals and plans for the time after the sale—both professionally and privately?
• What sales scenario would be ideal for me—complete sale, partial sale, merger, management buyout...?

"You really should take your time for this 'self-clarification' and also get feedback from trusted people in your close circle," advises Sören Hofmann, managing director of a medium-sized mechanical engineering company. "In my case, this was very healing to separate wishful thinking from reality. My mentors quickly made it clear that I would not be happy with an immediate 'release' of my role during the sales process—I was not ready to completely let go of my baby. Today, I am very glad to still be involved as an advisor on a project basis."

Step 2: Make the company "sale-ready" discreetly

Once the fundamental decision for an exit is made, you should prepare your company to be "sale-ready" as early as possible. This means optimizing structures and processes to be as attractive as possible to investors—without making a big public announcement.

• What is the financial and earnings situation: Are there "legacy issues" in the balance sheet, hidden reserves, or non-operating assets that should be spun off before a sale?
• How efficient and standardized are production, logistics, and administration? What improvements can be implemented in the short term?
• Is the company too dependent on individual persons (owner, key employees), certain customers, or suppliers?
• Are intellectual property (patents, trademarks, licenses), IT systems, and data inventories properly documented and up to date?

Many owners hesitate to involve neutral third parties at this early stage—fearing they will lose control of the process. "That is a mistake," warns Hofmann. "It is easy to underestimate how much optimization potential a company screening from an investor's perspective can reveal. Often, just a few days of consulting with an experienced M&A expert provide valuable insights—in confidential one-on-one conversations without the staff noticing anything. The earlier you start, the better your chances for a top-notch closing."

Step 3: Confidential investor search and screening

When searching for and selecting potential buyers, a delicate touch is required. No reputable investor will contact an "unknown seller" blindly or provide detailed company data. That smells like a waste of time or worse—industrial espionage. Instead, a multi-stage, highly discreet approach is recommended:

• Who are the "natural" strategic buyers for my company, e.g., direct competitors or upstream/downstream suppliers/customers who can realize synergies? Financial investors and large corporations are also potential candidates.
• How do I whet these target groups' appetite without revealing myself? Anonymized short profiles, which an M&A advisor can distribute within their network, are helpful here.
• Only upon concrete interest are confidentiality agreements (NDAs) signed, and increasingly detailed company information exchanged step by step.
• Do the potential partners demonstrate the necessary "seriousness" through verifiable track records, solid financing, and realistic purchase price expectations? Due diligence is not a one-way street.

"Maintaining 'top state secrets' throughout this process is paramount—not only externally but also internally against executives and shareholders who are not part of the inner circle," cautions expert Hofmann.
"My advice: Only involve the absolutely necessary insiders, always take calls in private spaces with caller ID blocked, encrypt emails, use code words, and hold meetings off-site at the M&A advisors' offices. The family must also get used to the fact that Mom or Dad is often 'on the road' and 'unavailable'—including white lies. It sounds exaggerated but has proven effective many times."

Step 4: Negotiations—with a cool head and dual strategy

Things get serious faster than expected. A buyer signals concrete willingness to negotiate and may even present an unexpected "hammer offer" to create facts. At this point, you must not be dazzled:

• Do you stick to your predefined negotiation strategy? What are non-negotiable deal parameters ("deal breakers"), and where are you willing to compromise?
• Do you keep possible Plan B alternatives warm in parallel in case the preferred buyer backs out?
• Do you secure sufficient expert advice to properly understand complex term sheets, SPAs, warranty clauses, etc.? Negotiation skills and a cool head are essential—but no substitute for legal and tax expertise.

Karin Meyer, who successfully sold her outdoor mail-order company to a financial investor after tough negotiations, recalls: "The talks dragged on agonizingly long—including hard bargaining and psychological games. You start thinking: Maybe I should just give in so this thing is finally over. Luckily, my advisors kept steering me back and reminding me what I really wanted. Otherwise, I probably would have signed prematurely—and regretted it later."

Step 5: Closing the sale—confidential until the very end

Once all commercial and legal points are clarified, the contract can finally be signed. But caution: Even at this stage, utmost confidentiality is required—and must be maintained until buyer and seller jointly give the green light for communication.

• You cannot suddenly "spill the beans" about a transaction of this magnitude within the leadership team, staff, and business partners—it requires a prudent, well-coordinated information campaign. Nothing would be worse than rumors and insecurity.
• There are often legal and regulatory deadlines that can delay closing—for example, the pre-emption rights of silent partners, antitrust authority reviews, etc. Until final clearance, radio silence is advised.
• The succession arrangement and the transition of leadership and representative duties must also be strategically timed and orchestrated.

"As tempting as it is to shout the result from the rooftops, you have to keep your nerves on the home stretch," Meyer summarizes. "In our case, it took another six months before we could inform our staff and the press. A real test of patience. But orderly processes and confidentiality up to the last signature paid off for everyone involved."