M&A Consulting
The challenges of transferring IT companies in Switzerland
The transfer of technology SMEs is a key challenge for Switzerland and its growth prospects. These companies play an essential role in innovation, digital transformation and Switzerland’s international competitiveness. However, a number of challenges are emerging.
Firstly, the technology sector is evolving rapidly and IT SMEs must constantly adapt to technological advances to remain relevant. This can make succession more complex, as it is important to find buyers who can keep up with the pace of innovation. The shortage of technology talent is a further obstacle. It is sometimes difficult to find qualified successors to take over the reins of these specialist companies.
The promising future of IT SMEs
Despite these challenges, the outlook remains promising. Switzerland has a dynamic ecosystem of start-ups and incubators that play a crucial role in the future of IT SMEs. What’s more, growing investment in research and technological development is opening up new opportunities for these companies, making them more attractive to potential buyers. By encouraging entrepreneurship and innovation, Switzerland is promoting the successful transfer of IT SMEs and ensuring continuity in the field of technology. What’s more, it helps strengthen the country’s position as a global technology hub.
Target market
Prolinks most often supports companies active in the technology sector. These include IT services companies, software publishers, cloud solution providers, cyber security providers, technical industries and other innovative sectors.
These are generally companies with more than twenty employees or sales in excess of CHF 3 million, and valuations in excess of CHF 5 million.
Investors
Prolinks works with a large network of Swiss and foreign private equity, venture capital and family office investors.
Prolinks is recognised in the market as an expert in mergers and acquisitions of technology companies, and has built up a reputation thanks to the transfer of major companies in its field.
In some transactions, the company manages mixed packages combining several types of institutional, private equity and private investors.
Types of mandate
"Sell-side" mandates (assistance with transfer)
A sell-side mandate refers to an agreement, or assignment, given to Prolinks to act as advisor and intermediary in the sale of a financial asset or business. The sell-side refers to the selling side of the transaction. This type of mandate is common in transactions such as the sale of shares, bonds, commercial property or entire companies.
Buy-side mandates (acquisition support)
A buy-side mandate refers to an agreement or assignment entrusted to Prolinks to act as an intermediary in the process of acquiring financial assets or companies. Unlike a sell-side mandate, where the emphasis is on the selling side of the transaction, a buy-side mandate focuses on the buying side.
The buy-side mandate involves us acting on behalf of the buyer to source targets for acquisition and managing all aspects of the financial asset or business acquisition process. From initial valuation and due diligence to closing the transaction.
Fundraising mandates
A fundraising mandate refers to an agreement or assignment given to Prolinks to act as an intermediary in the process of raising capital for a company or project. The main objective of this mandate is to help the company obtain the funds it needs to finance its growth, operations or specific initiatives.
The fund-raising process may vary depending on the financing objective and the company’s specific circumstances.
Specific mandates
Prolinks also carries out specific mandates related to the business transfer process, such as :
- Evaluation of transfer options
- Company valuation
- Financial planning
- Structuring transactions
- Structuring financing
- Personalised coaching
- Creation of data rooms
- Managing due diligence
- Negotiation support
- Other
The various stages in the merger and acquisition process
The M&A process is triggered when the shareholders believe that the conditions are right for finding a buyer and selling the business.
The following five main steps are necessary.
Typical buyer profiles are identified so that a targeted and effective approach can be made. An anonymous file (Teaser) is drawn up to preserve confidentiality, as is a detailed file (Information Memorandum) which will be sent to interested buyers.
Finally, a secure data room facilitates the due diligence process for potential buyers. All of these steps are crucial to the successful transfer of a company or asset, taking into account the interests of all parties involved.
This stage is followed by the receipt of letters of intent, expressing the buyers' willingness to continue negotiations. On this basis, the seller selects the buyer proposing the most appropriate project.
This stage is crucial to enable the acquirer to make an informed decision and ensure that all the risks associated with the transaction are manageable.
The legal department is involved in the preparation of the sale agreement to ensure that it is both compliant and clear. Once all parties are in agreement on the terms and conditions, the transaction is finalised with the signing of the contract, marking the closing of the sale. This process brings the transaction to a close and formalises the transfer of the business or asset to the new buyer.
As soon as the contract is signed, both parties (the acquirer and the seller) communicate the deal to management, internal staff, customers and market partners. The clarity of the messages conveyed is crucial to the market's receptiveness.
Next comes the integration phase, which, depending on the buyer's choice, can be more or less complex. This integration phase has an impact on resources, organisation and production. Corporate culture must not be sidelined in this process.