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Designing a High-Value Business Exit in 2026: Our Playbook at MDN Group

Across the European Union, a striking number of company owners still operate without a defined exit plan. Recent surveys of mid-market entrepreneurs across the eurozone suggest that close to half have never formally documented how they intend to leave their businesses, and a meaningful share have not even begun to consider the question. At MDN Group, we see this gap every week in our initial conversations with founders, and it remains one of the largest sources of value leakage in private company transactions.

For much of the past few years, owners have been understandably reactive. Successive shocks – the pandemic, supply chain disruption, persistent inflation, and a sharp tightening cycle by the European Central Bank (ECB) – have pushed long-term thinking down the agenda. Today, however, the picture is changing. ECB rate cuts during 2025 and into 2026 have improved deal financing conditions, sponsor dry powder remains near record levels, and cross-border interest in European mid-market assets is recovering. According to the Institute for Mergers, Acquisitions and Alliances (IMAA), European deal volumes have re-accelerated from their 2023 trough. In our view, this creates a window owners should not waste.

Why Every Owner Needs an Exit Plan – Not Just Those Heading for Retirement

A surprising share of owners we meet tell us they do not need an exit plan because they have no immediate intention of selling. We understand the instinct. But an exit strategy is not a sale notice. It is a risk-management framework – in the same family as a will or a shareholder agreement – that protects the value you have built against events you cannot fully predict.

Retirement is only one of many triggers. Illness, family or shareholder disputes, divergence between co-founders, or simply the loss of personal motivation can all force a transaction. When these moments arrive without preparation, owners negotiate from a position of weakness, and the outcome reflects it. We have seen otherwise excellent businesses sold at a substantial discount to their intrinsic value because the seller had no time to optimise tax structure, tidy up the management team, or run a competitive process.

“Most of the value destruction we see in our mandates happens long before a buyer ever sees the teaser. It happens in the years when no one was thinking about an exit at all,” says Denis Stukalov, Managing Partner at MDN Group. “By the time the decision to sell becomes urgent, half of the levers an owner could have pulled are already out of reach.”

This is true for high-growth ventures as much as for mature SMEs. A scale-up that has not aligned its cap table, its IP ownership, and its key-person arrangements can find itself unable to close a deal at all when the founder eventually wants to step away.

When Should Owners Start? Earlier Than They Think

A second category of owners we encounter believe that exit planning is something to address “later”. Yet the conventional guideline of starting twelve months to three years before a sale captures only part of the picture, and in our experience it is too late for the most significant value-creation work.

Founders are better served by thinking the way private equity investors think on day one of an investment: every operating decision is implicitly an exit decision. Pricing strategy, customer concentration, contract length, recurring revenue mix, capital expenditure intensity, and the depth of the second-tier management team will all shape the multiple a future buyer is willing to pay. None of these can be re-engineered in a quarter.

Macroeconomic and regulatory timing also matters. In 2026, European mid-market owners are weighing several moving parts at once: the continuing implementation of the EU Listing Act, the Foreign Subsidies Regulation, ongoing reforms to corporate taxation under the Pillar Two framework, and shifting national rules on capital gains in several Member States, including pending changes in Germany, France and Italy. Combined with improved financing conditions, these factors are bringing more sellers to market and rewarding those who arrive prepared.

The Seven Building Blocks of a High-Value Exit

When we work with owners on their exit, our team breaks the process into seven elements. Each addresses a different lever of value, tax efficiency, or risk.

1. Defining objectives – financial and personal

Exit objectives are never purely about price. Financial questions include the headline valuation, liquidity at closing versus deferred consideration, treatment of working capital, and broader wealth and succession planning. Non-financial questions are equally important: the role of the founder after closing, the protection of key employees, the cultural fit of an incoming buyer, and the family dimension.

The identity of the eventual acquirer matters too. A financial sponsor (private equity firm), a strategic trade buyer, a competitor pursuing horizontal consolidation, or a supplier or customer pursuing vertical integration will each see the business differently and structure their offer accordingly. An Employee Ownership Trust (the EU’s equivalents now include several national models such as the German Mitarbeiterbeteiligung structures and Italian workers’ buy-out cooperatives) or a management buy-out (MBO) is also a credible path for owners who care deeply about continuity.

2. Early tax planning

Tax structuring is the single area where late preparation costs sellers the most. In most EU jurisdictions, a share deal will be more tax-efficient for the vendor than an asset deal, because it avoids the double taxation associated with disposing of underlying assets at the company level and then distributing proceeds. Participation exemption regimes, available in Member States such as Germany, the Netherlands, Luxembourg and Ireland, can significantly reduce or eliminate tax on the disposal of qualifying shareholdings, but they require the holding structure to be in place well in advance.

Equally, intra-family succession through lifetime gifting, holding company reorganisations, or trust-equivalent structures (such as the Stiftung in Germany or fondazione di famiglia models in Italy) typically take years to put in place efficiently. Too often, vendors retain tax counsel only after a non-binding offer or letter of intent has been signed. By that point, the negotiation has constrained what is still possible.

3. Identifying and maximising value drivers

Mid-market businesses are usually valued within an EBITDA multiple range – for example, 5.0x to 7.5x. Where a specific company lands inside that range depends on a small number of value drivers, which we group into two families.

The first is earnings quality and growth: historical and projected revenue growth, gross margin trajectory, free cash flow conversion, and capital intensity. The second is resilience: customer diversification, contract length, intellectual property, regulatory moats, and the depth and independence of the management team from the founder. Identifying which of these drivers are weakest, and working on them in the eighteen to thirty-six months before launch, is in our experience the highest-return preparation an owner can do.

4. Aligning the equity story with the buyer pool

The narrative that wins highest valuations is rarely the one the founder finds most natural to tell. A financial sponsor wants to see resilient cash flows, a defensible market position, and a clear plan for the next phase of value creation under their ownership. A strategic buyer wants to see synergy potential – revenue synergies, cost synergies, geographic reach, or cross-selling opportunities – quantified in a way they can defend to their own board.

“The Information Memorandum is not a description of the company as it is. It is a thesis about what the company can become in the right hands,” explains Martin Bakker, Partnerat MDN Group. “The strongest mandates we run are those where the seller has been honest with themselves about which buyer profile fits, and then built the equity story for that audience specifically.”

5. Managing exit-related risks

The risks that derail transactions are rarely the ones owners worry about most. The departure of one or two key employees during the process, an unresolved IP ownership question, an over-dependence on a single client representing more than twenty per cent of revenue, or a regulatory licence held personally by the founder rather than the company: any of these can collapse a deal at the eleventh hour or trigger a substantial price chip.

Human capital is the dominant concern. If a buyer believes the business will not function without the founder, they will discount the price, demand a long earn-out, or both. Investing in second-tier leadership, formalising customer relationships at the company level rather than the founder level, and putting standard EU-compliant confidentiality and non-compete arrangements in place are all relatively low-cost actions that pay back many times over.

6. Choosing the right moment

The ideal exit window combines internal and external conditions: peak (or visibly accelerating) financial performance, a stable management team, supportive financing markets, and an active buyer universe. The reality is rarely so neat. In 2026, many owners are weighing a strong sponsor bid environment against potential national tax reforms, while others are responding to industry consolidation in their sector. The work shown by Harvard Law School Forum on Corporate Governance on deal-timing dynamics suggests that owners who wait for perfect conditions across every variable typically miss the cycle altogether.

The right answer is rarely “now” or “in three years”. It is usually a structured eighteen-month preparation window that ends with the business ready to launch the moment the external window opens.

7. Choosing advisers carefully

The advisory team makes a material difference to outcome. An experienced M&A adviser will run a structured competitive process, manage information asymmetry between seller and buyers, push back on price chips during due diligence, and bring objectivity to emotionally charged decisions. Tax counsel, legal counsel, and where appropriate a specialist in the relevant industry vertical complete the team. Chemistry matters: an exit process typically lasts six to twelve months of intense daily interaction. Engaging advisers early – ideally at the strategy stage, not the launch stage – enables them to influence outcomes rather than merely document them.

How MDN Group Supports Owners Through the Exit

At MDN Group, our pre-transaction work is designed precisely for the gap most owners fall into: the period before a sale process formally begins, when the most consequential value-creation and risk-management decisions are taken. Our pre-M&A advisory service operates as a confidential preliminary stage, conducted on a retained but non-exclusive basis. During this phase, we help owners stress-test their readiness, identify likely buyer profiles across Europe, Asia and the Middle East, and produce a written confirmation of market interest – all without disclosing the client’s identity. The output is a clear strategic decision for the owner, made on the basis of evidence rather than speculation.

When the decision is taken to proceed, our M&A advisory team leads the full transaction process. We act as transaction manager from initial preparation through to closing: financial modelling, equity-story development, drafting of marketing materials and the Information Memorandum, buyer identification and outreach, management of the data room and due diligence, negotiation of SPA terms, and coordination of the wider deal team. Our mandate range covers transactions from approximately €5 million to €100 million in enterprise value, with particular depth in the EU lower and core mid-market, where we believe the value of a senior, hands-on adviser is greatest.