An acquisition method in which the buyer purchases the shares or equity interests of the target company, thereby assuming ownership of the entity including all its assets, liabilities, contracts, and relationships.
When people talk about “buying a company” in the mid-market, they almost always mean buying its shares. The share purchase (or share deal) is the most common acquisition method, and the one Blue Mountain uses in the majority of its transactions. Understanding how it works, its advantages, and its risks is fundamental for both sides of any deal.
In a share purchase, the buyer acquires the equity interests (shares in a corporation, or quota in a limited company) that represent the capital of the target entity. By purchasing the shares, the buyer becomes the new owner of the company — which retains its legal personality, tax identification, contracts, employees, assets, and also its liabilities (both known and contingent).
The mechanics are straightforward: the seller transfers shares to the buyer in exchange for a price. The company itself does not change — only its ownership does. It is conceptually like buying a building by purchasing the company that owns it, rather than buying the building directly.
The central document of the transaction is the SPA (Sale and Purchase Agreement), which regulates every aspect: price, payment terms, representations and warranties, indemnities, closing conditions, and post-closing obligations.
Operational continuity. The business continues without interruption. Contracts with customers, suppliers, and employees are unaffected (unless they contain change-of-control provisions). There is no need to individually transfer each asset, contract, or licence.
Legal simplicity. A single thing is transferred (the shares) rather than dozens or hundreds of individual assets and contracts. This dramatically simplifies documentation and the closing process.
Tax advantage for the seller (individual). Capital gains from the sale of shares are typically taxed at the savings income tax rate, which is generally more favourable than the combined taxation that would result from selling assets at the corporate level followed by distributing the cash to the shareholder.
Preservation of licences and authorisations. Administrative licences, certifications, and permits linked to the company are maintained (the company does not change — only its owner does). In an asset purchase, many licences are non-transferable and must be applied for afresh.
Assumption of all liabilities. By purchasing the company, the buyer assumes all its liabilities — including those unknown at the time of purchase: tax contingencies, employment disputes, third-party claims, environmental liabilities. Due diligence aims to identify these risks, and the representations and warranties in the SPA aim to protect the buyer, but coverage is never complete.
Hidden contingencies. Contingent liabilities (those that may materialise in the future but are not certain at the time of purchase) are the primary risk. A tax audit opened two years later, a former employee’s claim, an undetected environmental issue — all of these fall on the buyer.
Change-of-control clauses. Some contracts (financing, supply, distribution, licensing) contain provisions allowing the counterparty to terminate if control of the company changes. These must be identified during due diligence and managed before closing.
Blue Mountain acquires 100% of the shares of a food packaging company. Key deal data:
Closing occurs 30 days after signing, once the main bank’s consent is obtained (a condition precedent triggered by the credit agreement’s change-of-control clause). The transfer is executed before a notary and the shares are recorded in the buyer’s name in the company’s share register.
The share purchase is the default in the majority of mid-market transactions, owing to its simplicity and the tax advantage for the seller. An asset purchase is preferred when: the buyer wants to select only certain business assets, the company carries significant liabilities the buyer does not wish to assume, or the transaction takes place in the context of insolvency proceedings (going-concern purchase).
The seller is taxed on the capital gain (sale price minus acquisition cost of the shares). If the seller is an individual, the gain is included in savings income. If the seller is a holding company, the capital gain may be exempt under the participation exemption regime. The sale of shares typically does not trigger VAT or transfer tax.
Nothing changes. The company remains the same entity with the same legal obligations. All employment contracts are maintained in full and employee consent is not required. There is no business succession for employment purposes because the company does not change — only its ownership does.
If you wish to explore a potential collaboration or present an investment opportunity, we invite you to contact us. We guarantee absolute confidentiality in all our conversations.