Deal structure matters as much as price. We describe step by step how we design a transaction to work for both parties.
Deal structure is as important as price. Two transactions at the same price but with different structures can produce radically different outcomes for seller and buyer.
What is being bought? Shares (share deal) or assets (asset deal)? 100% or a majority stake? In the Spanish middle market, the vast majority of our deals are share purchases — simpler legally, with tax advantages for the seller.
Price is negotiated from normalised EBITDA and an agreed multiple, expressed as enterprise value, then adjusted to equity value by subtracting net debt and adjusting working capital.
Not all deals are paid 100% at closing. Components may include: closing payment (typically 70-90%), escrow (10-15% held for 12-24 months as contingency guarantee), earn-out (variable component tied to post-closing performance targets), and deferred payment (instalments over 12-24 months).
The purchase agreement includes representations and warranties where the seller declares certain facts about the company are true. If any declaration proves false and causes damage to the buyer, the seller must indemnify. Warranties have limits — maximum amount, validity period, and minimum threshold — negotiated as part of the process.
The structure includes post-closing design: how long does the founder stay? In what role? With what compensation? What decisions can and cannot they make? Defining this clearly before closing prevents misunderstandings afterwards.
At Blue Mountain, we finance predominantly with our own capital. We are not an LBO fund that finances 70% with debt. We complement with moderate bank financing (30-40% maximum) at most. This conservative structure means the company is not burdened with debt and can invest in growth from day one.
Before closing, we have defined: what management changes to implement in the first 100 days, what management team is needed, what investments are priorities, what KPIs to track, and what the value creation timeline is.
A well-structured deal is one where both parties know what to expect, risks are identified and balanced, and the design facilitates — rather than hinders — post-closing value creation.
Dirk Manuel Martens Jimenez Founder, Blue Mountain Capital
By Blue Mountain Capital
By Blue Mountain Capital
By Blue Mountain Capital
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.