What changes when the buyer is a fund

  • Continuity. Private equity funds can offer continuity: the owner stays involved, the team stays in place and the growth project carries on.
  • Full or partial sale. Many owners sell a majority or minority stake, or bring in a private equity partner for a partial exit, with a second sale later.
  • Pricing logic. A strategic buyer may pay for synergies; a fund pays for the return it can generate while it owns the company. Each values different things.

What a fund looks at

A fund looks at what makes the business grow and at what can go wrong. It weighs the quality of the team and its independence from the founder, customer diversification and recurring revenue, the credibility of the growth plan and how well organised the financial information is. Information that does not survive due diligence is the fastest way to lose trust and price.

That is why preparation matters: EBITDA normalisation, the Information Memorandum and the financial model are built before any contact with buyers. See how value is calculated in the article How much is my company worth.

A published example: PMH

The PMH case

PMH is a Portuguese company that develops and manufactures medical devices and exports around 70% of its production. ActiveCap's investment, through its ActiveCap II fund, is intended to accelerate its presence in new markets and advance the automation and optimisation of production, under a growth plan for 2026 to 2030.

The fund highlighted strong alignment with the management team from day one as a determining factor. Harbor Partners advised PMH on this transaction. You can read the transaction page.

We also advised on the Fabridoce transaction with ActiveCap and the Balance transaction with Growth Partners.

How the process is run

A rigorous process typically takes 6 to 12 months, from preparation to closing. It begins with diagnosis and preparation, moves through identifying counterparties (private equity funds, strategic buyers and family offices, approached confidentially and selectively) and a competitive process of non-binding offers, and ends with negotiation, due diligence and closing. It is competition between buyers that protects the price, and it is what allows a fund to be compared with a strategic buyer on equivalent terms.

What is negotiated beyond the price

In a process with a fund, price is only one part of the agreement. What is negotiated is the letter of intent (LOI) and the sale and purchase agreement (SPA), the closing conditions, price adjustments through completion accounts, and deferral structures such as earnouts, in which part of the price depends on the company's later performance. Where the owner keeps a stake, governance and the form of any second exit are also negotiated.

Mistakes that cost price

  • poorly prepared financial information, which erodes the buyer's confidence in due diligence;
  • accepting the first buyer, without running a structured, competitive process;
  • premature disclosure to the market, to employees or to competitors.

Next step

If you are considering a full or partial sale, the first meeting is a confidential assessment with no commitment. The full process is in the guide to selling a company in Portugal.

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