Business valuation is not just for when someone wants to sell. You also need it when a partner joins, you seek financing, you distribute shares among your children, or you define incentives for your management team. What is at stake is truly understanding how much your business is worth, why it is worth it… and what you could do to make it worth more.

Price is not value, and confusing the two can be costly

This confusion is constantly seen. And it is dangerous.

Value and price are different things. Value is a reasoned estimate of the business based on data, projections, and analysis. Price… well, that’s what someone is willing to pay and what the seller accepts. It can be well above or well below value, depending on urgency, expectations, synergies, or simply how much the buyer likes the business.

An illustrative case: a logistics company had an estimated value of 8 million, but was sold for 12. Why? Because the buyer specifically needed that geographical location and those contracts. The synergies justified the difference.

Therefore, before discussing price, you need to know what value you are playing for.

Methods 

Discounted Cash Flow (DCF)

This is the preferred method when there is a certain degree of stability and you can project the future with some confidence. Basically, you project how much cash your business will generate in the coming years and bring it to the present using a discount rate (the famous WACC, which is simply the cost of your capital).

The advantage? It reflects the real potential of the business. The problem? It depends on many assumptions. If there are errors in the growth projections or the discount rate, the whole house of cards comes crashing down.

An example: a technology start-up projected 40% annual growth over five years. It sounded great until they analysed where that growth was going to come from. In the end, the most realistic projections were around 15% per annum. The difference in valuation was huge.

Comparable multiples

Here, you look at how companies similar to yours have been valued, using ratios such as EV/EBITDA, PER, or multiples on sales. This is useful for quick reference and to explain why your company cannot be worth 50 times its sales when those in the sector are trading at 2x.

But there are always truly appropriate comparables. We have seen disastrous valuations due to copying multiples from companies that only resembled yours in the name of the sector, but had completely different business models.

Valuation by assets

This is the most straightforward: add up the assets, subtract the liabilities, and you have your value. It works well for companies with a lot of tangible assets or that are in the process of liquidation.

The problem is that it falls short when the company generates value mainly through intangibles, technology, brand, or scalability. A consulting firm may have assets worth €50,000 but be worth €2 million because of its client portfolio and knowledge.

And if none of this fits 

The reality is that you often have to combine methods. There are specific models for start-ups, and for companies in very specific sectors too. But the important thing is not to master every formula in the world. It’s knowing when to use each one and, above all, how to explain the results without getting lost in technicalities that no one understands.

What makes a valuation truly useful

There are 80-page valuation reports full of beautiful graphs that are useless. And there are 15-page reports that help close million-pound deals. The difference is not in the amount of analysis, but in whether the valuation is useful for decision-making.

First, you need a financial narrative that makes sense. It’s about clearly explaining what makes the business work: how the money comes in, how much actually stays in the coffers, and whether the whole process is repeatable.

A client recently said that his company “sold technology.” When we looked deeper, it turned out that his real business was implementation and subsequent maintenance. The technology was almost a commodity. Understanding this completely changed the approach to valuation.

Second, scalability has to be realistic. Can the company grow? How much and at what cost? Is there room to raise prices without losing customers? Can new sales channels be opened?

This is where the fine work comes in. Explaining what levers the business really has to multiply value without multiplying problems proportionally. Because growing for the sake of growing is pointless if every additional euro of revenue costs 1.20 euros to achieve.

The infomemo must be honest. It is not a catalogue of the company’s virtues but a map of the business that must make clear what is done well, what risks exist, where the critical dependencies are (that customer who accounts for 40% of revenue, or the manager without whom nothing works), and how all this affects value.

And something important: you have to think like an investor. How will the person putting in the money see the company? What can they do with it that is not being done now? This perspective is key to building value, not just calculating it.

In the end, it’s all about clarity

Valuing companies is not about mechanically applying formulas. It’s about building a clear, realistic and useful vision of what the business is worth today… and what it could be worth in the right hands.

Is there a sale, investment search or restructuring process underway? Do you need to know what the business is really worth, not in theory but in the real world? Let’s talk.

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The silent risk of dual governance

Family businesses operate according to a dual logic: on the one hand, the owning family, with its values, history and personal expectations; on the other, the executive management, responsible for making decisions based on profitability, growth and sustainability. In theory, both sides should be aligned. In practice, this is not always the case.

Dual governance creates tensions when there is no clear structure. For example, it is common for family members to demand results without actively participating in management, or for managers to have their decisions questioned by those who do not hold formal positions. In M&A processes, where agility and strategic focus are vital, these frictions can delay key operations or even cause them to fail.

The problem is not the existence of this duality, but its disorganisation. Alignment between ownership and management in family businesses requires mechanisms that channel family participation without interfering with professional management.

A critical snapshot of family businesses in Spain

Understanding the root of the problem requires looking at the present. Fifty-three point six per cent of family businesses in Spain are in their first generation, and 37.2 per cent are in their second. Only a meagre 2 per cent survive to the fourth generation. This is not due to a lack of talent or vision, but rather to a lack of institutional preparation for succession.

Seventy per cent of first-generation family businesses lack a succession plan. The result? Conflicts, improvised decisions and operational paralysis.

At the same time, these same companies are key players in the market: in 2023, 43% of mergers and acquisitions in Spain were carried out by family businesses. They even surpassed private equity and large corporations. This demonstrates two things: their relevance and their vulnerability.

When a family business enters an M&A process without clear governance, the risks multiply. The lack of alignment between ownership and management in family businesses can slow down decisions, divide partners and dilute the value that took so much effort to build.

Consequences of internal misalignment

The lack of alignment between ownership and management in family businesses has tangible consequences, which are sometimes irreversible. A recurring example is strategic decisions being blocked by generational differences. Parents want to keep the business as it is, while children are committed to growth through acquisitions. Without clear rules, immobility wins. Or worse: a breakup occurs.

In other cases, the absence of a family protocol leads to legal disputes. Companies that could have grown or diversified their activities end up being sold to third parties because of an inability to agree on a common direction. Emotional value is not enough when there are no mechanisms in place to resolve disagreements.

There are also situations where professional managers leave the company because their judgement is constantly questioned by family members with no training or executive responsibilities. The loss of management talent in these cases costs more than a bad investment.

These conflicts do not arise overnight. They are the cumulative symptoms of poor governance. And their cost is extremely high: not only in economic terms, but also in terms of reputation and emotion.

Professionalisation and clear structures

Alignment between ownership and management in family businesses does not happen by inertia. It requires specific decisions. The first is to professionalise management. This involves bringing in external managers with experience and, above all, objectivity. It is also key to integrate independent directors into the board of directors to provide strategic vision beyond the family name.

The second step is to clearly define roles. Who makes decisions? What powers does the family have? What powers does management have? This is where the family protocol becomes indispensable. When well designed, it acts as a coexistence agreement: it regulates expectations, sets rules for participation and establishes mechanisms for resolving differences without taking them to a personal level.

The third pillar is the corporate structure. Many family businesses operate as if they were sole proprietorships, but growth requires more solid vehicles. The creation of a family holding company allows for the separation of operational management from asset management, facilitates generational succession and optimises taxation. It also allows for professionalisation without losing control.

Govern with vision and without fear

Aligning ownership and management in family businesses is the main strategic challenge of our time. It is no longer enough to have good products or a history of success. What ensures continuity is the ability to transform that legacy into a functional, clear and future-proof structure.

At Confianz, we have been supporting family businesses in this process for years. With solutions tailored to their reality, their values and their long-term vision. If your company is facing this dilemma, don’t put it off. Let’s talk.

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What changes when a company is sold

All of it. Or almost everything. Selling impacts everything from the internal structure to how customers perceive the brand. One of the first effects is uncertainty in the team: Do I stay? Do they change me? What do they want from me now? These are not minor questions. If they are not answered well, productivity plummets. Added to this is the redesign of processes. What worked before no longer fits. New tools are coming, other KPIs, another management style.

In parallel, business strategy often mutates. New priorities. Changes in the value proposition. Sometimes, restructuring of products or services. This generates noise among customers, who may become suspicious. Statistics confirm that companies that do not manage this transition well lose brand loyalty and market share. And if the buyer is international, we add the challenge of integrating completely different cultures, systems and ways of working. The intangible becomes the biggest risk.

Practical keys to managing the impact of a company sale

The first thing is to stop thinking that this can be solved with a communiqué. Communicate yes, but with a plan. Internally, transparency is not optional. The team needs to understand why it is being sold, what is going to happen and how it affects them. And this is communicated from the top, but also from each line manager. Communication cannot be vertical and static. It must be adapted to the channel and the context of each area.

Second: processes. Standardisation does not sound glamorous, but it is vital. A sale brings administrative chaos. If processes are not clear, errors multiply. A good CRM system and collaborative tools make the difference between surviving or stagnating in integration. It’s not just about technology, it’s about method.

Third: customers and suppliers. Talk to them before the market does. Tell them what is changing (and what is not). Listen to doubts. Give signs of continuity. One fact: customer-centric companies are 38% more likely to increase their profitability after restructuring. It’s not marketing, it’s operational reality.

Fourth: data. In a transition, emotions rule. But decisions must come from numbers. What metrics? Revenue, customer retention, satisfaction, lead conversion, churn, team productivity. Measuring allows you to adjust and anticipate risks. You can’t improve what you don’t measure.

And the point that many forget: talent. Selling generates a silent drain. Key people leave out of fear or lack of information. Retaining talent is not just a question of salary. It is about explaining their future role, offering stability, training in new processes. And above all, listening. Change management is about accompanying, not imposing.

And after the closure? That’s where it all starts

Once the sale is signed, the hard part begins. The urgent part is over. Now comes the important part: getting the company up and running in the new phase. This is where you can see whether the transition was well managed or not. Often, the focus is on closing quickly, not on integrating well. And then come the problems: falling sales, customers leaving, internal blockages.

The key is to remain vigilant. Follow the integration plan. Measure weekly. Have real feedback meetings, not ceremonial ones. Correct quickly. And, above all, don’t lose sight of what makes the company unique: its culture, its way of doing things. Selling can be an opportunity for growth, but only if the foundations of the business are respected.

Confianz has accompanied sales processes of all kinds. Large, small, between family groups, between funds. Contact us if you would like our experts to study your case and advise you during this process.

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For those involved in M&A transactions, this tax is not just a technicality. It can change the valuation of a company, generate unexpected costs and complicate the tax structuring of a purchase or merger. Crunching the numbers before and after considering this tax is not the same. Let’s review the main problems it can bring and how to reduce risks.

How Complementary Tax affects M&A

The Complementary Tax applies to corporate groups with a consolidated turnover of 750 million euros in at least two of the last four financial years. What does this mean for companies in M&A? There are three possible scenarios:

• Joining forces, but also taxes. Two companies that separately do not reach 750 million can exceed the threshold by joining forces. In that case, tax comes into play and changes the accounts.
• One step further and under the radar. If a company is already close to that threshold, an acquisition can push it over the threshold and make it subject to the tax. That forces a rethink of the whole operation.
• New rules. If the buyer is already subject to tax, adding a company in a jurisdiction with a tax rate of less than 15% may involve an additional payment. What appeared to be a profitable transaction may not be profitable if the calculation is not done properly.

It is not just a question of accounting, but of strategy. There is no room for surprises in M&A.

Fiscal due diligence.  Better to be safe 

Due diligence deadlines are often tight, but this tax makes it more important than ever to scrutinise accounts closely. Some points to bear in mind:

• Where every euro is. Not all jurisdictions are taxed equally. If the target company has operations in countries with a rate of less than 15%, it is necessary to calculate what impact this will have on the final bill.
• Information in dribs and drabs. It is not always possible to obtain all the necessary documentation within the due diligence deadlines. If there is no transparency in the numbers, the risk skyrockets.
• Future impact. If after the purchase the structure of the group changes, the tax rules may also change. And that means unexpected additional costs.

Poor planning here can be costly. It is key that the seller has a detailed tax impact analysis ready before entering into negotiations.

How to structure the operation to avoid surprises

Avoiding problems with the Complementary Tax is not just a question of numbers, but of how the operation is designed from the start. Some useful strategies:

• Clarify who pays what. In procurement contracts, it must be precisely defined who bears the fiscal responsibilities. It is not enough to assume this, it must be written down.

• Price adjustments. If due diligence does not provide an accurate picture of the impact of the tax, clauses can be included to adjust the price according to the actual costs after the purchase.

• Find the best structure. In some cases, making the purchase through an entity in a country with a tax rate higher than 15% may reduce the impact of the tax.

An important detail: at present, guarantee insurances do not cover the risks arising from this tax if they have not been identified beforehand. There is no safety net if something goes wrong.

Beyond theory, at Confianz we help companies to reduce risks and design structures that avoid problems with this tax. If you are in the process of M&A and want to avoid surprises, let’s talk and see how to approach the operation with clarity.

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More and more SMEs are considering transforming their business structure into a holding company to take advantage of the many tax and organisational advantages it offers. A holding company is a grouping of companies where a parent company owns the majority or all of the shares of other companies, with the aim of running and managing the business group in a unified manner.

This structure is not only valid for large corporations, but is also beneficial for small and medium-sized companies seeking to optimise their management and taxation.

A holding structure consists of a parent company that controls and manages the shareholdings of several subsidiaries. The holding company is usually not directly involved in the day-to-day operations of the subsidiaries, but focuses on the strategic and financial management of the whole. This configuration allows for a centralisation of decisions and better coordination between the different business units.

Advantages of a holding structure 

Implementing a holding structure can offer multiple benefits to SMEs, including the following:

1. Tax optimisation: Holding companies can benefit from the tax consolidation regime, which allows the losses of some subsidiaries to be offset against the profits of others, reducing the overall tax burden of the group.
2. Wealth protection: By separating assets into different companies, the risk of financial problems in one subsidiary affecting the rest of the group is limited, thus protecting the overall wealth.
3. Operational efficiency: Centralising functions such as human resources, finance or marketing in the holding company generates economies of scale and synergies that improve efficiency and reduce costs.
4. Ease of diversification: A holding structure facilitates the acquisition or creation of new subsidiaries in different sectors or markets, allowing the company to diversify its activities and reduce risks associated with a single business.
5. Simplifying business succession: In family businesses, a holding company facilitates the transfer of ownership and control to the next generation, ensuring business continuity.
6. Access to more favourable financing: A holding structure allows for better financial planning and makes it easier to obtain financing on more advantageous terms by consolidating the group’s results.
7. Greater operational flexibility: If one company within the group has financial difficulties, more agile strategic decisions can be made without compromising the whole group.
8. Reducing the tax burden on the transfer of assets: When a holding company sells a subsidiary, in many jurisdictions it can benefit from tax exemptions on the capital gains realised.
9. Ease of international expansion: Holding companies make it possible to structure expansion to other countries more efficiently, avoiding double taxation and adapting to local legislation.

Disadvantages of a holding structure 

Despite the advantages, it is important to consider the potential disadvantages of adopting a holding structure:

1. Administrative complexity: Managing multiple companies implies an increased administrative burden and the need to comply with various legal and fiscal obligations.
2. Additional costs: The creation and maintenance of a holding structure entails expenses for legal, accounting and tax advice, as well as possible costs for auditing and filing consolidated accounts.
3. Loss of corporate identity: By centralising management, there is a risk that subsidiaries lose their autonomy and corporate culture, which can affect employee motivation and customer perception.
4. Monopoly risk: If the holding company acquires a dominant position in the market, it could face legal problems related to competition and antitrust regulations.
5. Difficulties in decision-making: While centralisation of management is an advantage in many respects, it can lead to internal conflicts when strategic decisions do not coincide with the interests of each subsidiary.
6. Double taxation risk: Depending on the country, the distribution of profits between the parent company and its subsidiaries could be subject to double taxation if not properly structured.
7. Increased tax scrutiny: Tax authorities often pay particular attention to holding structures, so a well-planned tax strategy is crucial to avoid penalties.

Is a holding structure advisable for your SME?

The decision to adopt a holding structure should be based on a detailed analysis of the company’s needs and objectives. Not all SMEs require this transformation, but those seeking to optimise their tax burden, improve their operational capacity and protect their assets can benefit significantly.

Expert advice is essential to properly structure the holding company, ensuring that all tax regulations are complied with and associated risks are minimised.

If you are considering this option, contact us and we will advise you every step of the way, as we have already done with more than 400 companies in Spain.

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What is cash flow and why is it key to valuing companies?

Cash flow, or cash flow, is the movement of money in and out of a company in a given period. This indicator covers:

1. Operating income: from commercial activities.
2. Necessary expenditures: operational and financial expenses.

A positive and stable cash flow indicates that the company can generate sustainable income, an essential factor for investors looking to recoup their investment and secure a profitable return. It also provides a clear picture of the financial risks and growth opportunities that are key in a business sale and purchase.

Relevant types of cash flow in a sale

To understand the impact of cash flow on the valuation of a company, it is essential to understand the three main types of cash flow:

1. Operating cash flow

This measures income and expenses derived from the core operations of the business, such as the sale of products or services.

• A positive operating cash flow demonstrates that the company is able to cover its operating costs and generate profits.

2. Investment cash flow

Related to the acquisition or sale of long-term assets, such as real estate or equipment, this flow indicates the potential growth of the company.

• Strategic investments show buyers that the company is prepared to scale in the future.

3. Financing cash flow

This flow details movements related to financing, such as loans, issuance of shares or payment of dividends.

• A negative cash flow from financing can be an indicator that the company is reducing debt, an attractive aspect for buyers.

Relevance of cash flow in the sale and purchase of companies

Why is cash flow so crucial when valuing a company for sale? Here are the main reasons:

¿Por qué el flujo de caja es tan determinante al valorar una empresa en venta? Estas son las razones principales:

1. Return on investment

A positive cash flow gives buyers confidence that they can recoup their investment in a reasonable time. It also facilitates the projection of future financial returns.

2. Financial stability

Stable cash flow reflects an efficient business model, able to operate without excessive reliance on external financing. This reduces the financial risks perceived by investors.

3. Ease of financing

Companies with positive cash flows are better able to obtain financing on favourable terms. For buyers, this translates into a less risky asset with greater potential for expansion.

Discounted cash flow and its role in valuing companies

The discounted cash flow method projects the future cash flows of the company and adjusts them to their present value, using a discount rate that reflects the associated risks.

For example, suppose a company generates an annual operating cash flow of 200,000 euros and has annual investments of 50,000 euros, leaving a net cash flow of 150,000 euros. If we project these flows out five years at a discount rate of 10%, we can estimate their net present value. This calculation provides an accurate and realistic valuation for informed negotiations.

Current trends in company valuation 

Company valuation has evolved, incorporating new approaches that complement traditional methods. An emerging trend is the consideration of ESG (environmental, social and governance) factors in valuation. Companies with sustainable and responsible practices can command higher valuations, as investors positively value their commitment to the environment and society.

In addition, the growing importance of intangible assets, such as intellectual property, brands and human capital, has led to a reassessment of valuation methodologies. These assets, although not always reflected in traditional financial statements, can represent a significant part of a company’values, especially in technology and service sectors.

The role of Confianz in company valuation

Cash flow is a critical indicator that ensures informed and successful transactions in the sale and purchase of businesses. From financial stability to return potential, understanding it enables strategic decisions to be made.

At Confianz, we are experts in advising companies in the sale and purchase process, helping our clients to optimise the value of their business and attract the right buyers. If you are looking for a detailed cash flow analysis and professional guidance at every step of the process, do not hesitate to contact us. Together we can ensure the success of your transaction.

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Types of corporate spin-offs

Corporate spin-offs fall into three main categories: full, partial and segregation. Each offers specific benefits depending on the business objectives:

1. Full spin-off: Divides all of the company’s assets into two or more separate parts. For example, a multinational company may create two separate entities to focus on different geographic markets. This strategy encourages specialisation and allows for better adaptation to local needs.
2. Partial spin-off: Transfers only part of the assets, allowing the original company to continue operating. A typical case would be a technology company spinning off its consulting division into a new independent entity, while continuing to focus on its core business.
3. Segregation: This involves transferring a specific business unit to a new entity, such as a food manufacturer creating a subsidiary to manage its beverage line. This approach allows diversifying risks and developing new business areas without compromising the core operation.

Strategic advantages of corporate spin-offs

Opting for a spin-off is not just an administrative issue; it implies a strategic transformation that can be decisive for business competitiveness. The main advantages include:

• Greater operational efficiency: The specialisation of the resulting entities optimises resource management, maximising profits and enabling a more agile response to market demands.

• Flexibility and adaptability to change: Companies can adjust their structure to address regulatory, economic or market changes. For example, implementing specific business policies according to business areas is easier after a spin-off.

• Risk reduction: Separating business lines with different levels of risk protects the company’s assets. In case of problems in one unit, the others are not affected.

• Attracting investors: Specialised entities are often more attractive to investors, especially in competitive markets. A clear and segmented structure increases confidence in the business model.

How to start with a spin-off

The first step in a corporate spin-off is to develop a detailed plan that addresses strategic objectives, resource requirements and legal and tax implications. This includes:

1. Internal audit: Analyses the current state of the company to identify areas for improvement and potential risks.
2. Spin-off project design: Defines how assets and liabilities will be distributed, ensuring transparency and fairness for the partners.
3. Legal compliance: Ensures that the process complies with applicable regulations, including notifying authorities and obtaining necessary approvals.
4. Implementation and monitoring: Carry out the spin-off as planned, making adjustments as necessary to maximise results.

At Confianz, we have accompanied more than 400 companies in restructuring processes, including complex spin-offs. Our team combines legal and strategic expertise to offer customised solutions, ensuring that each client successfully achieves its objectives.

If you are considering a spin-off, leave nothing to chance. Planning, compliance and flawless execution are essential to ensure positive results. We would be happy to discuss this with you in person if you wish.

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With more than two years since the introduction of the new Insolvency Act and other legislative changes, such as this TEAC ruling, the tax landscape for family businesses continues to evolve, requiring constant adaptation by business owners and their advisors.

What does the TEAC ruling establish?

The key to this resolution lies in how the functions of directors or administrators working in related companies are valued. Until now, it was common for directors of a family company to represent the company in subsidiaries or investee companies without receiving additional remuneration, assuming that this labour was included in their salary as directors. However, the TEAC has determined that these functions should be considered as a related-party transaction and remunerated separately, at arm’s length.

This means that, if a director represents his company in other investees and does not receive a specific salary for this work, the tax authorities could quantify this activity, impute it to him in his personal income tax return and, furthermore, affect his right to the tax exemptions of the Wealth and Large Fortunes Tax.

How does this affect family businesses?

Tax exemptions for family businesses are designed to protect family businesses, which are a pillar of the national economy. These exemptions allow business assets not to be taxed under Wealth Tax and Large Fortune Tax, provided that certain requirements are met: that the manager receives remuneration for his or her burden and that this represents more than 50% of his or her total income.

With the TEAC’s new interpretation, if it is considered that the administrator should receive a salary for his functions in subsidiaries or investees, and this salary exceeds what he receives from the main company, he could lose access to the exemptions. This does not only affect the administrator, but also all the partners of the family business, as the exemption is collective.

For example, if the administrator’s salary in the main company is 100,000 euros per year and the tax authorities value his activity in other companies at 110,000 euros, the requirement that the main income comes from the family company would no longer be fulfilled. This would jeopardise the tax exemptions of the entire family structure.

A challenge for tax and business planning

This change represents a challenge for family businesses, which must review their tax structures and strategies to avoid future problems. The Tax Agency has already indicated that this resolution opens the door to more rigorous inspections, focusing on the role of directors in related companies and the correct assessment of their functions.

In this context, a clear and detailed plan to comply with the new requirements is essential. Revising corporate agreements, ensuring adequate remuneration for directors and adjusting corporate structures to these new interpretations are essential steps.

What can be done about this situation?

While the TEAC ruling introduces complications, it also provides an opportunity to strengthen the management of family businesses. Some key measures include:

1. Internal audits : Review the functions of directors and their remuneration in all related companies.
2. Tax restructuring : Adapt corporate structures to ensure compliance with the new criteria.
3. Proactive communication with the tax authorities: Provide clear and robust documentation to support business and tax decisions.
4. Specialised advice: Having experts in tax and business law who can guide family businesses through this process.

Call for the protection of the family business fabric

Family businesses represent an essential economic engine in Spain, generating employment and contributing to local development. However, changes such as this one highlight the need for a stable fiscal framework adapted to the particularities of these structures.

This new scenario requires a combination of foresight, strategy and expert advice. We are here to help family businesses and ensure that they remain a key pillar of our economy.

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Why so many firms are turning to restructuring

The reasons are clear and each company has its own reasons. Some of the factors driving these decisions are:

• Accelerated digitisation: Failure to adapt means falling behind.
• Regulatory changes: new laws require more efficient and clearer structures.
• Competitive pressure: competing globally means optimising every resource.
• Search for tax savings: the right structure can make a big difference to your taxes.

What is important is that these restructurings are not just responses to problems. They are also a way of discovering opportunities and improving.

Splits. When dividing means winning

Sometimes a company works best when it is broken up into more manageable parts. This is what we call spin-offs, a growing trend that has increased by 22% this year. But why make this decision?

What are splits?

• Full demerger: a company is split up completely, with its parts forming new companies.
• Partial spin-off: a part of the business is spun off, but the main company continues to exist.

What are the advantages?

• Specialisation: each part of the business focuses on what it does best.
• Attracting investors: some areas are more attractive if presented independently.
• Conflict resolution: Dividing may be the best way to resolve differences between partners.
• Tax optimisation: a clearer structure usually means fewer tax complications.

Splits are not a retreat, but a strategy to move forward with more strength.

Holding companies: are increasingly popular structure

Another big trend this year is holding companies, which have grown by 18%. This type of structure allows a company to control several subsidiaries, centralising management and reducing risks.

Why do companies choose a holding company?

• Centralisation: facilitates decision-making for business groups.
• Equity protection: if something goes wrong in one subsidiary, it does not affect the rest of the group.
• International growth: this structure is ideal for companies that want to expand outside Spain.
• Tax optimisation: tax consolidation can save a lot of headaches (and money).

New trends in corporate restructuring

1. Commitment to sustainability

Companies are restructuring with a more sustainable approach. By 2024, 65% of restructurings in Spain will include sustainability-related objectives. This is not just a trend, but a necessity.

2. Digitisation does not stop

78% of companies are investing in automation and digital transformation as part of their structural changes. Going digital is not an option, it is a must.

3. Hybrid work as a standard

More and more companies are incorporating flexible working models in their restructurings. Seventy per cent of companies that have restructured this year have implemented telework or hybrid working policies.

4. Focus on what matters

Many companies are selling assets they no longer consider essential in order to concentrate on what really generates value for them. By 2024, 55% of restructurings have included the sale of non-strategic business units.

Restructuring is not a decision to be taken lightly. They involve legal, tax and labour changes that, if not handled well, can be costly. This is where the support of an expert team comes in.

At Confianz, we accompany our clients and design tailor-made solutions, adapted to the needs of each client.

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The event, organised by the Instituto de la Empresa Familiar, was attended by 100 of the largest family businesses in Spain (Santander, Acciona, Puig, Mercadona, Iberostar, Barceló, Gestamp…) and also by some of the 1,800 SMEs that form part of the Institute.

The meeting brought together more than 650 attendees, reaffirming its position as the most important business forum in the country. It should be borne in mind that the specific weight of the sector is key to the Spanish economy: together, family businesses account for an aggregate turnover equivalent to 30% of GDP.

Optimism for the near future

If we analyse in detail the result of the aforementioned survey, we see how the five hundred family entrepreneurs who participated in it score the current economic situation in Spain with a 5.5 (on a scale of between 0 and 9 points). This is the highest rating expressed by the sector since 2018.

Optimism is maintained in the forecasts for 2025. Fifty-nine percent predicted that the Spanish economy will continue on the path of growth, as it will register a moderate increase in activity with limited net job creation. This is 16% more than at the 2023 congress and the highest percentage since 2017, when growth forecasts reached 82% of the family business representatives consulted.

Family businesses plan to grow sales and generate more employment

Forecasts are even better when it comes to assessing how sales and employment will behave over the coming year in their companies. Sixty percent predicted an increase in turnover (10% more than in 2023), 31% thought it would remain unchanged and only 9% expected a decrease (5% less than last year). This growing optimism is a voting pattern that has been repeated at the last four congresses since the end of the pandemic.

In terms of job creation, 42% of family businesses expect to increase their workforce (5% more than in 2023), another 48% expect to maintain it and only 10% foresee a reduction. Despite this optimism, the sector warns of the difficulty in finding staff as one of the obstacles it usually encounters.

The threat of an ever-changing legal framework

For Spanish family-owned companies, the main threats to their growth are regulatory changes. In this sector, it is considered a priority to guarantee legal certainty that does not jeopardise the positive economic and employment cycle that the Spanish economy has experienced since the end of the COVID-19 crisis.

Enrico Letta expressed himself along the same lines, but more oriented towards the lack of common rules of the game for all. In his speech, the former Italian prime minister pointed the finger at the “great obstacle to EU integration posed by the fragmentation of the regulatory system and the lack of simplification implied by having 27 legal systems applicable to companies”.

In this diverse and changing regulatory framework, family businesses need specialised legal advice such as that provided by Confianz.

La entrada Family businesses optimistic but concerned about regulatory changes aparece primero en Confianz - Asesoría integral de empresas.