Selling in Lots: What to Decide Before Splitting Up the Deal

Here are the points an owner needs to settle before giving up on a single sale in favour of selling the company in separate lots, activity by activity, to different buyers. Splitting is tempting because it promises, on paper, a higher combined price than a single buyer would pay; nine things need checking before committing to it, or the promise gets eaten up by extra months and complexity.

1. Check that the lots are genuinely worth more apart than together. A split only makes sense if what each specialised buyer would pay, added up, beats what one buyer would offer for the whole. Picture an SME that combines a production workshop with an international trading arm: a common pattern, not a real client. An industrial buyer will pay well for the workshop and almost nothing for a trading activity it cannot run, while a trading buyer will do the opposite. Run the numbers line by line before ruling out a single sale.

2. Price the cost of splitting itself. Separating shared accounting, contracts, a brand, or an IT system between two distinct entities takes months of work from a fiduciary, a lawyer, and sometimes an IT specialist, before any buyer even shows up. That preparation cost comes straight out of the extra value the split is meant to unlock, and it belongs on the table the moment the idea is first considered, not discovered halfway through. It often requires a prior legal reorganisation, an asset transfer to a new entity or a demerger under Swiss law, which itself takes months before a sale process can even open.

3. Decide what happens to shared costs and functions. Accounting, HR, IT, general management: in most SMEs, these functions serve every activity at once without any allocation key ever having been written down. Each lot needs to carry, in its restated accounts, a fair share of these common costs, or the buyer of the most profitable lot will discover afterwards that it bought a hidden liability.

4. Decide which staff go where. A technical lead or an executive assistant who has worked across both activities for fifteen years cannot be split in two. This is often the most sensitive call in the whole process, and it needs preparing with the person concerned well ahead of time, never announced afterwards as a mechanical side effect of the chosen structure.

5. Accept a timeline noticeably longer than a single sale. Two separate sale processes, with two buyers, two due diligences, and two closings, rarely line up smoothly on the first attempt. In the mandates I run, splitting a company adds months to the calendar compared with a single sale, if only because the two transactions often need to close in a specific order for tax or operational reasons.

6. Plan for the lot that finds no buyer. One of the two or three lots can end up without a serious buyer, because it is too small, too dependent on a single client, or too far from the core business of the buyers approached. Having a fallback from the start, closure, an internal takeover, or folding it into the neighbouring lot, keeps the whole deal from stalling on the one piece that will not sell.

7. Make sure each buyer's financing stands on its own. A buyer counting on the simultaneous sale of the neighbouring lot to close its own financing, say because the same building or the same credit line secures both deals, leaves the whole transaction hostage to whichever side moves slowest. Each acquisition financing should, as far as possible, hold up independently of the other.

8. Sequence confidentiality between the buyers of the different lots. Two parallel processes multiply the number of people informed before closing, and a prospective buyer of lot A may well know, or compete with, the buyer lined up for lot B. Managing what gets communicated, and to whom has to be thought through lot by lot, not as a single announcement to the whole company.

9. Value each lot on its own terms, not with one ratio stretched across the whole business. Valuation multiples for an industrial activity and for a services or trading activity often bear no relation to each other, even after years spent under the same roof. Blending the two grids ends up undervaluing the most promising lot to artificially prop up the weaker one.

Splitting a business for sale echoes, on one specific point, the question that already comes up over operating real estate: separating what can be separated widens the pool of possible buyers, but it adds weight to the mechanics and the timeline of the deal. An owner weighing this route gains from having both scenarios, a single sale and a sale in lots, priced out before choosing, rather than deciding on a hunch shaped by one offer received for the whole.