What is M&A: what business owners need to understand before considering a sale
Tempo de leitura
10 minutes
M&A stands for mergers and acquisitions. It is the term used to describe transactions involving the purchase, sale, merger, or corporate restructuring of companies.
An M&A transaction may involve the full sale of a business, the sale of a stake, the entry of a new partner or shareholder, or the combination of two companies. It is a broad field, with different structures depending on the objectives of those at the table.
In Brazil, the M&A market involves hundreds of transactions every year, across different sizes — from smaller deals involving mid-sized companies to billion-dollar transactions among large groups. There is no universal minimum size for a company to consider an M&A process. What determines whether a formal process makes sense is the combination of size, sector, business maturity, and the founder’s objective.
For a business owner considering this path for the first time, understanding what M&A means is understanding that it is a shareholder decision, not just a financial one. The transaction involves capital structure, people, governance, business continuity, and the role the founder will have after the transaction.
The most frequent motivation in M&A processes is family succession. The founder has built a relevant business, but the children either do not want to, or do not have the right profile to, take over the operation. In this scenario, selling the company or bringing in a partner may be the most rational path to preserve the business and protect the wealth that has been built.
Another common motivation is the search for a strategic partner. Not every business owner who enters an M&A process wants to leave the company. Often, the objective is to grow faster, access new markets, incorporate technology, expand distribution, or bring in capital for a new stage of the business. In this case, the transaction may be a partial sale, with the founder remaining in the company.
Founder liquidity is also a relevant motivation. After decades of building a company, a large part of the entrepreneur’s wealth may be concentrated in the business itself. The company may be highly valuable, but that value is illiquid. M&A can be the mechanism to transform part of that wealth into real liquidity.
There are also cases involving the exit of shareholders, when partners begin to have different objectives; the search for capital for accelerated expansion; and distress situations, when the company faces financial or operational challenges. Each motivation points to a different type of transaction and to a specific buyer profile.
The most common mistake is to think that M&A only means selling the entire company. In practice, an M&A transaction can take different forms.
A full acquisition takes place when the buyer acquires 100% of the company. In this case, the founder may fully exit the operation or remain for a transition period, depending on the negotiation.
A partial acquisition with change of control happens when the buyer acquires a majority stake and takes control of the company, while the founder retains a stake in the business. This structure can allow the entrepreneur to receive liquidity now while continuing to participate in a potential future upside.
A recapitalization, or minority sale, occurs when a financial or strategic partner enters the company without taking control. It is a common alternative for founders who want partial liquidity, capital for growth, or strategic support, while still wishing to remain in control.
A merger happens when two companies combine to form a joint operation, which may or may not result in a new entity. This type of transaction usually seeks complementarity, scale, efficiency, or competitive strengthening.
There are also fundraising transactions, in which the company raises capital through the entry of a new partner or shareholder. Even when the founder remains in control, this type of transaction can also be considered part of the M&A universe.
Each structure has different implications for the founder: how much they receive at closing, how much they may receive later, what their role will be in the company after the deal, and what risk they will continue to carry. Defining the right structure is one of the central parts of an M&A advisor’s work.
In an M&A process, not every buyer looks at the company in the same way. The profile of who is on the other side of the table directly influences the negotiation, valuation, payment structure, and the role the founder may have after the transaction.
In general, buyers are divided into strategic and financial buyers. Strategic buyers are companies in the same sector, or in adjacent sectors, that see the acquisition as a way to accelerate growth, gain market share, expand their portfolio, access new regions, or incorporate capabilities they do not yet have internally. For this type of buyer, the acquired company may be valuable not only for the financial results it generates today, but also for the synergies it creates within a larger operation.
Financial buyers, on the other hand, analyze the company primarily as an investment opportunity. This group includes private equity funds, family offices, search funds, and, in some cases, venture capital funds. Each has its own logic. A private equity fund usually looks for companies with potential for growth, professionalization, and value creation over a medium-term horizon, typically with a planned future exit. A family office may take a more patient view, seeking wealth diversification and long-term returns. A search fund, in turn, generally involves an entrepreneur who raises capital to acquire a company, take over its management, and lead a new stage of growth.
There are also international buyers, which may be foreign companies or funds interested in entering or expanding their presence in Brazil. This profile usually seeks access to the Brazilian market, strategic assets, regional presence, or local capabilities that complement its global operations. For the selling business owner, the participation of international buyers in the process can increase competition for the asset and bring alternatives that would not appear in an approach restricted to the local market.
That is why mapping buyers is not just about building a list of interested parties. It is about understanding who may see the most value in that company, which buyer has the greatest ability to execute the transaction, and which profile makes the most sense for the founder’s objectives. In M&A, finding the right buyer can be as important as negotiating the right price.
A well-structured M&A process begins before any negotiation with buyers. Prior preparation is one of the most important stages. It involves organizing financial information, reviewing the company’s key data, and identifying potential risks that may arise during due diligence.
Due diligence is the stage in which the buyer analyzes the business in detail before completing the transaction. In this phase, financial, legal, tax, operational, commercial, and corporate information is evaluated. The better prepared the company is, the lower the chance of value erosion throughout the process.
After preparation, the M&A advisor maps and approaches potential buyers. Strategic and financial buyers may be approached simultaneously in a competitive process. This format places different interested parties in competition for the same asset, which tends to maximize value and improve conditions for the seller.
The process usually continues with the submission of NBOs, or non-binding offers. These are initial proposals that are not legally binding and indicate price, structure, and general conditions. The most aligned buyers advance to deeper stages.
Next, an LOI, or letter of intent, may be negotiated. The LOI is a more formal letter of intent, generally with temporary exclusivity for the chosen buyer to move forward with the analysis. After that, one or two buyers proceed to detailed due diligence.
The choice of buyer should not consider price alone. Payment structure, earn-out conditions, timing, guarantees, governance, and the founder’s role after the deal are points that are just as important as valuation.
One point many business owners underestimate is confidentiality. The entire process must take place under strict secrecy. Employees, clients, suppliers, and competitors should not know that the company is being negotiated. Leaks can harm valuation, create internal anxiety, affect commercial relationships, and give the buyer an advantage in the negotiation.
No. M&A is a strategic tool, not an inevitable destination. For many founders, selling 100% of the company is not the best answer at that moment.
One alternative is recapitalization. In this format, the founder sells a stake, receives liquidity, and maintains control or a relevant ownership position in the business. This structure allows the entrepreneur to realize part of the value created while continuing to participate in future growth.
Another alternative is the entry of a minority partner, whether financial or strategic. This partner may bring capital, sector knowledge, market access, technology, or expansion capacity, without necessarily taking control of the company.
An IPO, or initial public offering, may also be an alternative for companies with the appropriate size, governance, and structure. However, this path requires institutional maturity, scale, financial predictability, and the willingness to deal with the requirements of the public market.
The right starting point is not “I want to sell my company.” The most important question is: “What is my objective?” The transaction structure should be a consequence of that objective. That is why the conversation with an experienced advisor needs to begin before any decision is made, not afterward.
In Brazil, there are two main categories of advisors that represent the seller in an M&A process: investment banks and M&A boutiques.
Investment banks have scale, balance sheet, relationships with large companies, and a broad portfolio of products. In many cases, they also operate across different areas of the financial market and may represent buyers in other transactions.
M&A boutiques, on the other hand, tend to have a more specialized practice, deeper sector focus, and direct involvement from partners throughout the process. Depending on the firm, the boutique may work exclusively on the sell-side, meaning it represents only sellers.
The difference is not necessarily one of quality. The difference lies in structural position. An advisor that represents buyers and sellers across different deals may have crossed incentives, even when there is no bad faith. The pressure to preserve relationships with buyers exists. An advisor with an exclusive sell-side mandate has one objective: to seek the best outcome for the seller.
When choosing an advisor, whether an investment bank or a boutique, the business owner should ask whom the advisor represents, which other deals they are involved in, what their experience is in the sector, and who will be on the front line of the transaction. These are legitimate and necessary questions.
igc partners is an M&A boutique founded in 1997 with a clear position: it represents only sellers. In 29 years of operation, more than five hundred sell-side deals, and 35 partners, it has never represented a buyer. Conflict-free transaction is not a slogan — it is the structure of the mandate.
The process at igc partners is owner to owner. Partners lead each transaction from beginning to end — not a junior team managing the client from a distance. Sector specialization is part of the work: knowing the entrepreneur’s sector is what makes it possible to identify the right buyer, including those outside the usual Faria Lima radar.
Over the past year, igc partners brought 12 new global buyers to Brazil. In 2025, more than 40 deals were completed. In 2026, more than 20 transactions had already been completed by May. This is what being global means: mapping international buyers who have not yet been introduced to the Brazilian entrepreneur.
igc partners leads the sell-side rankings in Brazil according to Mergermarket and TTR Data, ahead of the main investment banks in the market. These are external data points, not self-promotion. And what they ultimately measure is the result of having an advisor whose sole job is to defend the seller.
No. M&A includes full sales, partial sales, the entry of minority partners, recapitalizations, and mergers. The format depends on the founder’s objective. Many business owners carry out a recapitalization: they sell a portion, receive liquidity, and continue in the company with a partner alongside them.
Strategic buyers, such as companies in the same sector or in adjacent sectors, and financial buyers, such as private equity funds, family offices, search funds, and venture capital funds, can participate. International buyers may also take part, especially when they are seeking access to the Brazilian market, strategic assets, or regional expansion.
It makes sense to seek an advisor before making any definitive decision. Prior preparation, information organization, risk identification, and the definition of the founder’s objective are stages that directly influence the quality of the process. An experienced advisor should be involved early, not only at the negotiation stage.
A competitive process is one in which the advisor approaches multiple buyers at the same time, placing different types of interested parties in competition for the same asset. This tends to maximize value and improve conditions for the seller. The process must take place under strict confidentiality.
Investment banks have scale, a broad product portfolio, and relationships with different market participants. M&A boutiques tend to have a more specialized practice, direct partner involvement, and, in some cases, an exclusive sell-side mandate. For someone who is selling, the advisor’s structural position matters as much as their reputation.
M&A is a strategic decision about the future of the company, the founder, and the shareholders. It can mean a full sale, partial sale, entry of a partner, recapitalization, or merger. The best path depends on the entrepreneur’s objective, the stage of the business, and the type of partner that makes sense for the next chapter.
If you are beginning to think about M&A — whether to sell, bring in a partner, or understand your alternatives — the conversation with an igc partners partner starts here. No commitment, no script.
By Murilo Oliveira — Partner, igc partners
