Spain's hospitality sector is undergoing rapid consolidation. This guide covers the sale process, sector-specific valuation methods and the keys to maximising the price of a restaurant, catering company or restaurant group.
Spanish hospitality is one of the economy’s most dynamic sectors and, for several years now, one of the most active in mergers and acquisitions. Restaurant groups that have professionalised their management, built a brand and developed replicable models find themselves in a privileged position to attract qualified buyers.
However, selling a hospitality business has distinctive features that set it apart from other sectors. Margins are tight, location dependence is high, teams rotate frequently and seasonality can distort results. This guide addresses each of these issues so the hospitality entrepreneur can approach the sale with the right preparation.
Spain is the world’s second-largest tourist destination and hospitality accounts for roughly 6% of GDP. Beyond the macroeconomic figures, what draws professional investors is the transformation the sector has undergone in the last decade.
Spanish hospitality has shifted from a fragmented sector of family-run businesses to a market undergoing full-scale consolidation. Multi-brand groups with professionalised management have shown it is possible to operate with EBITDA margins of 12-18% and scale profitably. That combination of market size, fragmentation and room for operational improvement is precisely what private equity funds seek.
The data confirms it: M&A transactions in the Spanish hospitality sector have grown steadily, with larger deals and increasingly sophisticated buyers. Fast-food chains, organised restaurant groups, contract catering companies and strong brand concepts have driven the most significant transactions.
The buyer market for hospitality businesses has diversified considerably.
Sector consolidators. Restaurant groups growing through acquisition. They look for brands that complement their portfolio, access to new geographic markets or specific operational capabilities (catering, delivery, contract dining). They typically pay reasonable multiples but offer real synergies that can benefit the seller if an earn-out is structured.
Private equity funds. They have entered Spanish hospitality forcefully over the past five years. They seek consolidation platforms: a well-managed group that can serve as a base for acquiring other businesses in the sector. They particularly value models with high recurrence (corporate catering, contract dining) and demonstrable growth potential.
International operators. European and American groups seeking entry into the Spanish market. They prefer acquiring a local operator with market knowledge rather than developing from scratch. They often pay a market-entry premium that can push multiples to the top of the range.
Family offices. Private investors looking for tangible businesses with predictable cash flow. They tend to keep existing management in place and hold longer investment horizons than PE funds.
The valuation of a hospitality company starts from normalised EBITDA, but requires sector-specific adjustments that are important to understand.
In the Spanish middle market, multiples for hospitality businesses with revenue between 3 and 50 million euros move within the following ranges:
| Business type | EBITDA multiple |
|---|---|
| Standalone branded restaurant | 3.5 – 5x |
| Restaurant group (3-10 locations) | 4.5 – 6.5x |
| Chain with replicable model (10+ locations) | 5.5 – 7.5x |
| Corporate / contract catering | 5 – 7x |
| Premium / fine dining | 4 – 6x |
These ranges are indicative and depend on multiple factors: location, lease strength, founder dependency, revenue composition and seasonality.
The reported EBITDA of a hospitality business rarely reflects economic reality without adjustments. The most common in the sector are:
Founder cost normalisation. In many family-run hospitality businesses, the owner does not draw a market-rate salary or, conversely, channels personal expenses through the business. Both must be adjusted to reflect the true cost of management.
Lease rents. If the premises are owned by the entrepreneur and the company pays rent to a related property holding company, the rent must be verified as market-rate. An artificially low rent inflates EBITDA; an artificially high one deflates it.
Seasonality. It is essential to analyse results over complete financial years. A seasonal business may show excellent EBITDA during summer months and losses the rest of the year. The buyer will analyse the average of the last three financial years.
Deferred maintenance. If the company has reduced spending on premises maintenance to improve recent results, the buyer will detect this during due diligence and discount it from the price.
The process of selling a hospitality business follows the standard phases of any M&A transaction, but with sector-specific considerations worth understanding.
The preparation phase is especially important in hospitality. The buyer will evaluate not just the numbers, but the customer experience, team quality, brand reputation and premises condition. Before initiating the process, it is advisable to:
Due diligence in hospitality has its own focus areas beyond the standard financial analysis:
Lease agreements. The buyer will review every lease: duration, renewal options, assignment and subletting clauses, rent indexation mechanisms. A contract that does not permit assignment without landlord consent can be a critical obstacle.
Licences and permits. Activity licences, terrace permits, health authorisations, building permits. In hospitality, operations depend on a municipal regulatory framework that must be in order. Losing a terrace licence can mean a significant drop in revenue.
Labour compliance. The hospitality sector has complex employment considerations: sector-specific collective agreements, split shifts, overtime management, temporary staff. A professional buyer will review labour compliance in detail alongside any latent liabilities.
Food safety. Health registrations, HACCP self-monitoring plans, recent inspections. A clean track record provides reassurance; one with incidents generates a discount.
High staff turnover. Hospitality has one of the highest turnover rates in the economy. The buyer will assess the stability of the key team (head chef, operations director, front-of-house managers) and the company’s ability to attract and retain talent.
Founder dependency. In many hospitality businesses, the owner is the public face: greeting regular customers, negotiating with suppliers, overseeing every service. If the business cannot function without them, the multiple will suffer.
Pronounced seasonality. Businesses with a strong seasonal component (tourist areas, terraces) present an irregular cash flow profile the buyer will analyse carefully. The ability to generate stable revenue year-round is a differentiating factor.
Lease assignment. If the premises operate under a lease requiring landlord consent for assignment, that negotiation can become a bottleneck. It is advisable to address this matter early.
At Blue Mountain we understand that hospitality is not just a numbers business: it is a business of people, experience and brand. Our patient capital approach allows us to analyse each opportunity with a long-term perspective, free from the rigid divestment timelines that characterise other investor profiles.
We particularly value hospitality businesses that have built a meaningful brand, have stable and committed teams, and operate with processes that allow consistent quality replication. We are not looking for the fashionable restaurant of the moment, but for a well-built business with sustainable growth potential.
Our process always starts with an in-depth conversation with the business owner. Understanding their story, vision and motivations is as important as analysing the financial statements. The valuation comes later, once both parties understand whether it makes sense to move forward together.
How long does it take to sell a hospitality business?
A well-structured process typically completes in 6 to 10 months. The pre-sale preparation phase (audit, documentation, contract review) can add an additional 2 to 4 months. Longer processes are usually caused by lease contract problems or labour liabilities discovered during due diligence.
Is it better to sell the company shares or the business as an asset?
In most cases, selling shares (participaciones sociales) is more tax-efficient for the seller. However, if the company has hidden liabilities or significant contingencies, the buyer may prefer an asset deal (business transfer). The optimal structure must be analysed case by case with specialist tax advice.
How should confidentiality be managed during the process?
Confidentiality is critical in hospitality: news of a potential sale can affect employees, suppliers and customers. It is essential to work with signed confidentiality agreements before sharing any sensitive information and to limit knowledge of the process to the minimum number of people possible.
If you are considering selling your hospitality business and wish to explore your options, the first step is a confidential conversation. Contact us to discuss your situation without obligation.
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.