What a Corporate Lawyer Should Know About Business Sales

In the Spanish middle-market, the business owner’s trusted corporate lawyer plays a determinant role in M&A transactions. In large deals, specialised M&A law firms handle everything. But in transactions of 5 to 50 million euros, the business owner frequently turns to their longstanding lawyer to advise them on what is probably the most important deal of their lives.

This is not necessarily a problem, provided the lawyer is aware of the specificities of M&A transactions and the areas where they may need reinforcement.

Deal Structure Matters

The first relevant decision is whether to structure as a share deal or an asset deal. Each has very different tax, employment, contractual, and practical implications. In the Spanish middle-market, the share deal is most common because it transfers the company as a going concern. But the buyer assumes all liabilities, including contingent and unknown ones. The asset deal allows buyer selectivity but creates complexity in contract subrogation, licence transfers, and taxation.

The SPA: Clauses That Matter

The Share Purchase Agreement can run 50-150 pages. Critical clauses include representations and warranties (each is a potential claim source — they must be precise and qualified), the indemnification regime (cap, basket, time limits), price adjustment mechanisms, and earn-out provisions.

Common Mistakes by the Seller’s Lawyer

Negotiating as in litigation. An acquisition is not a lawsuit. The adversarial approach damages the client’s interests. Not knowing market practice. M&A transactions have market conventions that a non-specialist may not know. Not coordinating with tax advisers. Tax implications of contractual clauses can be significant. Delaying the process. Time is the enemy of M&A deals — every week of delay increases risk.

When to Seek Reinforcement

There is no dishonour in recognising that an M&A transaction requires specialised knowledge. If it is your first business sale or if the deal volume is significant, consider bringing in a lawyer with specific M&A experience.

At Blue Mountain, we value working with seller’s lawyers who are professional, reasonable, and understand that the goal is not to win a negotiation but to close a deal that works for both parties.

The Human Dimension of M&A

Behind every transaction in the middle-market, there are people making decisions that will affect their lives for years. The business owner contemplating a sale is not just executing a financial transaction — they are letting go of something that has defined their identity, provided their purpose, and shaped their daily existence for decades.

Understanding this human dimension is not optional for the serious investor — it is essential. The deals that close successfully and generate lasting value are overwhelmingly those where both parties feel heard, respected, and fairly treated throughout the process. The deals that fail — or that close but generate conflict afterwards — are those where one or both parties feel that the process was adversarial rather than collaborative.

This does not mean being soft on commercial terms. It means being honest about our position, transparent about our analysis, and respectful of the seller’s legitimate interests and concerns. It means recognising that the best outcome is not one where we extract maximum value from the other side, but one where both sides feel the terms are fair and the relationship has a solid foundation for the years ahead.

Lessons from Experience

After more than fifteen years and hundreds of transactions analysed, certain patterns become clear. The quality of advisers on both sides has a disproportionate impact on outcomes. Well-advised sellers have realistic expectations, organised documentation, and constructive approaches to negotiation. Poorly advised sellers have inflated expectations, chaotic information, and adversarial postures that undermine their own interests.

The timing of transparency matters enormously. Sharing information — about concerns, about reasoning, about limitations — early in the process builds trust and prevents misunderstandings from escalating. Withholding information for tactical advantage almost always backfires, because the middle-market is a small world where reputations are built and destroyed one transaction at a time.

Finally, patience is a genuine competitive advantage. The investor who can wait for the right opportunity, who does not force timelines, and who is willing to walk away from a transaction that does not feel right is the investor who, over a long career, accumulates a portfolio of excellent investments and a reputation that opens doors. In the Spanish middle-market, where relationships matter deeply and word of mouth travels fast, that reputation is perhaps the most valuable asset an investor can possess.