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You will find below a list of technical terms used by professionals in the context of business transfers.
Some Anglo-Saxon terms do not have an equivalent in other languages.
Confidentiality agreement
Secrecy guarantee signed by the potential buyer to protect the information provided during the study of the file.
WCR (working capital requirement)
(Trade receivables + inventories + other current assets) – (Trade payables + other current liabilities)
Book Value
Value of a company calculated from its equity.
Bottom line
Net income (last line of the income statement).
Business angels
Individuals who invest their wealth in start-up or developing companies, often giving them the benefit of their personal experience.
Business plan
Development plan of the company over 3 to 5 years with detailed comments in the commercial, competition, products, techniques, means of production, investments, men, data processing, financial fields…
Capital
Amount of equity capital brought to a company.
Seed capital
Phase prior to venture capital, capital contribution for start-up companies, often made by individuals (business angels).
Market capitalization
The value of a company obtained by multiplying the price of a share (listed on the stock exchange) by the number of shares.
Venture capital
Investment in equity or quasi-equity in an unlisted company and intervening downstream of the seed capital.
Closing
Final stage of a sale operation, with the signature by all participants (sellers and buyers) of the sales contract.
Corporate governance
Corporate governance, responsibility and obligations of the board of directors.
Data Room
All the information documents on a company to be sold are placed in a room (at a lawyer’s office) and potential buyers can consult them under certain conditions (with or without photocopying rights). This is the case when the buyer knows the company (competitor for example), and it is not possible to make him visit.
Due Diligence
All the measures of research and control of information allowing the buyer to base his judgment on the assets, the activity, the financial situation, the results, the prospects of the company.
EASDAQ
European market specialized in growth stocks, created in 1996.
EBIT
Earnings before interest and taxes. Operating profit before financial expenses and corporate tax.
EBITDA
Earnings before interest, taxes, amortization and depreciation. Operating profit before financial expenses and corporate tax, depreciation and amortization.
Leverage
Multiplier effect of the return on equity resulting from the use of external financing.
Earn out
Earn-out clause paid by the buyer based on future results (after the sale).
EVA (economic value added)
A method of measuring value creation by the difference between the operating result and the weighted average cost of capital.
Liability guarantee
Guarantee given by the seller to the buyer on the level of equity.
Holding company
A company whose main purpose is to hold equity interests in companies.
True and fair view
This concept concerns the company’s accounts. They must represent the situation of the company in a faithful, sincere and fair manner.
Initial Public Offering (IPO)
Initial public offering.
Intermediary
An independent third party (legal or natural person) acting as a mediator or advisor in negotiations (e.g. during a sale, an IPO).
Institutional investor
Pension fund, insurance company or asset management company, as opposed to private investors, individuals.
Letter of intent, or Term sheet
This letter is sent by the potential buyer to the company’s shareholders, or their representative, at the end of the due diligence. It stipulates the price and the conditions of purchase.
Liquidity
Fluidity of the market with significant supply and demand.
Memorandum
A document similar to a prospectus, which presents the proposed transaction.
NASDAQ
American market for growth stocks, which inspired the Nouveau Marché in France and the European Easdaq.
Net Income
Also known as net profit or bottom line, is a company’s total revenue minus all of its expenses, including operating costs, interest, taxes, and any other expenses incurred during a specified period of time, typically a year, quarter, or month.
Net equity (book value)
This term is a measure of the value of an asset or a company’s equity according to its accounting records, and it is calculated by subtracting accumulated depreciation or amortization from the asset’s or the company’s original cost.
NIAT
Net income after tax. Net income after corporate taxes.
New Market
Newly created stock markets in Europe to allow the listing of young technology or growth companies.
NYSE
New York Stock Exchange.
Shareholder agreement
Contractual document that details the relationships between the various shareholders or groups of shareholders in a company.
PER Price earning ratio
Multiplier of net income to determine the value of the company.
Pre-closing
Exchange between the future shareholders, the sellers and their advisors of all the legal documentation that will be signed at the closing. This period allows the documents to be adapted to the requirements of each party.
Accounting principles
Rules and principles guiding accounting practice: – True and fair view, – Valuation of real estate, – Inventory valuation principles, – Non-compensation, – Principle of prudence, – Consistency of methods, – Historical cost, – Going concern, – Separation of fiscal years, – Materiality…
RCU (return on capital employed)
Rate of return on capital employed: EBIT/ Capital employed (Net fixed assets + WCR)
Road show
Visit of investors during a trip of several stages.
ROI (return on investment)
Rate of return on equity. Net income/equity.
Slide show
Summary of the business plan, corresponding to the main points of the project in 10/12 documents (Powerpoint type), allowing for an oral presentation of 15 minutes.
Start-up
Young company in strong growth.
Goodwill
Additional price paid at the time of the acquisition compared to the book value.
Term sheet
Letter of intent or memorandum of understanding
Round table
Capital distribution including the arrival of new investors.
US GAAP
US accounting principles
Venture capital
Venture capital, and by extension private equity.
FAQ
What services does Actoria provide?
Actoria specializes in mergers and acquisitions advisory for small and mid-sized businesses. Our services include company sales, succession planning, buy-side and sell-side mandates, business valuation, financial diagnostics, investor sourcing, negotiation support and full transaction execution until closing.
Who does Actoria work with?
We support SME owners, family-business leaders, shareholders, entrepreneurs, private investors, and corporate groups seeking to acquire or divest businesses in Europe and North Africa.
In which countries does Actoria operate?
Actoria has local teams in Switzerland, France, Belgium, Luxembourg, Morocco and Tunisia, and manages cross-border deals across Europe, Africa and the Middle East through an international buyer network.
How many potential buyers are in Actoria’s network?
Our proprietary network includes more than 6,500 qualified industrial buyers, strategic acquirers and financial investors, allowing us to match sellers with high-quality counterparties.
Does Actoria support confidential business sales?
Yes. Confidentiality is fundamental to our process. All discussions, documentation and buyer approaches are handled discreetly to protect the interests of the seller and the business.
What industries does Actoria cover?
We advise companies across multiple sectors, including industrial production, manufacturing, services, IT and digital, healthcare, logistics and distribution, construction, and specialized B2B services.
What is the typical size of businesses Actoria represents?
We primarily advise SMEs with revenues generally ranging from CHF/EUR 2 million to 100 million, depending on jurisdiction and market.
How does Actoria determine the value of a business?
We perform detailed financial and strategic analysis using multiple valuation methods, including discounted cash flows, market multiples, asset-based methods, and sector benchmarking.
How long does a business sale process take?
A standard transaction typically takes 6 to 12 months depending on market conditions, buyer interest, company complexity and diligence requirements.
Why choose Actoria as an M&A advisor?
With over 20 years of experience, a senior advisory team, a structured methodology, and an extensive network of qualified buyers, Actoria delivers independent advice, tailored execution and strong transaction results for SME owners.
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They trust us
Actoria has swiftly identified the inefficiencies in our company’s processes, proposed optimizations, and implemented them effectively. Furthermore, Actoria has provided outstanding support throughout all stages of our company’s transfer to a group within our industry. This includes preparing our company, identifying potential buyer partners, and negotiating up to the point of the partner’s capital entry. Actoria delivered expert negotiation skills and secured a valuable partner for us.
We were quite anxious to find a solution, as my health was deteriorating rapidly. Actoria’s consultant played a crucial role in the successful completion of my company’s sale. Their involvement was essential in executing this delicate project, as it impacted our daily operations. This project, which was close to my heart and increasingly necessary, was made possible thanks to the decisive momentum provided by Actoria.
First, Actoria conducted a thorough assessment of our company’s strengths and weaknesses, and then suggested incorporating these insights into our management approach to enhance our company’s value. Actoria led this project alongside my entire management team, enabling the involvement of all key personnel, and swiftly implementing a solution that allowed an investor to enter our capital. This was complemented by the inclusion of some of my company’s executives and a bank.
I couldn’t be happier with the result, but I am especially pleased with my decision to work with Actoria. The success of this mission was the direct result of Actoria’s hard work and sophisticated professionalism on my business. From our first meeting through the reasonable preparation process, all phases of the transfer, legal and financial operations were managed by the Actoria team. Their skills were even more evident when the complexities of this transaction were at its peak.
Hiring Actoria made the difference to achieve my original goal and move on to my next professional challenge. Selling a company like AMR in this market has not been an easy task. Actoria has demonstrated perseverance in identifying good buyers with knowledge of my industry in order to continue the development of my business, and has provided professional advice throughout the process.
The company’s sales process was a lengthy and challenging journey. The professional support from Actoria made this endeavor much more manageable. I would like to extend special thanks to the consultants from Switzerland and France for their highly effective collaboration. Your consultants proposed creative solutions during the negotiations, which effectively overcame significant obstacles in order to finalize the agreement. Their experience, knowledge, and professionalism played a crucial role in the success of this transaction.