How to Acquire a Business in Europe as a US Buyer

It is written for private equity teams, search funds, aggregators, holdcos, family offices, and corporate strategics who want European targets and do not yet have a local network to reach them.

Key takeaways

• European lower-middle-market companies trade below comparable US assets. In 2025, US private-equity buyouts cleared a median of 12.8x EV/EBITDA against 11.2x in Europe, and small deals price well below both, often in the 4x to 8x range.
• Roughly 450,000 European businesses change hands each year, and about 150,000 a year risk finding no successor, a supply of healthy, owner-run targets.
• The binding constraint for a US buyer is access, not capital. Most of these companies are sold off-market through local networks.
• Deal structure (share, asset, carve-out, or IP-only) drives the tax and legal outcome and must be set with local counsel early.
• A cross-border buy-side advisor compresses a two-year local network build into an active search you can run now.

Last updated: July 2026.

Why US buyers are looking to Europe now

Europe pairs lower entry pricing with a large, aging base of private business owners, and that combination is what makes the current window attractive. US private-equity buyouts cleared a median of 12.8x EV/EBITDA in 2025, while European buyouts cleared 11.2x, and the gap widens as deal size falls. Small lower-mid deals routinely price in the 4x to 8x EBITDA range.

Supply is deep. About 450,000 European businesses are transferred each year, and roughly 150,000 a year are at risk of no successor. Germany alone is projected to see around 545,000 Mittelstand ownership transfers by the end of 2029. These are cash-generating companies whose owners are aging out.

The catch is structure. Europe is fragmented across dozens of national markets, each with its own language, tax code, and deal conventions, so most targets never reach a US buyer's desk. The commercial overview of this opportunity sits on the [buy a business in Europe](/en/buy-a-business-in-europe) hub. The rest of this guide is the how.

Step 1: Define your acquisition thesis and buy-box

Start by writing a one to two page buy-box, because a focused mandate is what makes proprietary sourcing possible. A vague "we will look at anything" mandate produces noise and slow diligence.

A useful buy-box names the sector or vertical, the size range (enterprise value, revenue, or EBITDA), the preferred deal type, the geography, the timeline, and the capital available. For a cross-border search, geography matters more than most US buyers expect. "Europe" is not one market. A search scoped to German-speaking DACH software companies runs very differently from one scoped to French industrial services.

The tighter the buy-box, the faster real targets surface, and the easier it is to explain your intent credibly to a European owner.

Step 2: Solve the access problem

The core challenge in Europe is reaching owners, since the best companies are sold quietly through local networks rather than broad auctions. A US buyer has three realistic sourcing routes, and most serious acquirers use all three.

Off-market outreach is direct contact with owners who fit the buy-box, most of whom are not for sale on any platform. This is where proprietary deals come from, and it takes local language and credibility to do well. Intermediated flow comes through European brokers, M&A boutiques, and deal platforms, which is faster to access but more competitive and higher priced. Network referrals come from advisors, prior sellers, and local operators who know who might be ready.

AI-assisted sourcing

Data-driven sourcing widens the target pool well beyond any single advisor's contacts. AI-assisted screening can run thousands of European companies against a buy-box, filter on financial and firmographic signals, and surface the shortlist worth a human conversation. The technology adds reach and precision. It does not replace the advisor who runs the outreach and holds the relationship.

Step 3: Value the target on European benchmarks

Value the target against European multiples, not US ones, because the same business often clears a lower multiple in Europe. A US aggregator used to paying 6x for a domestic software add-on may find a comparable European target at 4x to 5x, which is much of the reason to look abroad.

Size drives the multiple inside the lower-middle market. A business at $20M of EBITDA can command 30% to 60% more than a $3M EBITDA business in the same sector. The [EBITDA multiples reference](/en/blog/ebitda-multiples) is a useful benchmark for pricing before you make an offer.

Here is a simplified worked example for a lower-mid software target.

Step 4: Choose the deal structure

The structure you choose (share, asset, carve-out, or IP-only) shapes the tax and legal outcome, so set it with local counsel before you make an offer. Each has a natural use case.

1. Share deal: you buy the entity outright. This is the standard full acquisition and the usual choice for a going concern with clean books.
2. Asset deal: you buy assets rather than the legal entity, which isolates risk and suits carve-outs.
3. Carve-out or partial: you buy a division or take a stake, common for non-core units and minority-to-control paths.
4. IP-only: you acquire the technology or IP, common for software tuck-ins and acqui-hire style deals.

Cross-border tax and legal caveats

The right structure depends on cross-border tax and legal factors a domestic deal does not carry, covered in the section on cross-border considerations below. These specifics vary by country and by your own situation, so set them with a qualified tax advisor and local counsel before you sign. This article is general information and does not replace individual advice. The deal-mechanics language that follows a signed [letter of intent](/en/blog/letter-of-intent-explained) is broadly similar to a US process, with local variations.

Step 5: Diligence and closing across borders

Cross-border diligence follows the same logic as a domestic deal, with added layers for language, local accounting standards, and jurisdiction-specific legal review. Financial statements may follow local GAAP rather than US GAAP, and a quality-of-earnings review helps normalize the numbers.

Plan for a longer timeline than a domestic deal. Translation, local advisors, and time-zone coordination add weeks. An [earn-out structure](/en/blog/earn-out-explained) is common where the seller stays involved through a transition, which is frequent in owner-run European businesses.

Cross-border considerations US buyers underestimate

Four cross-border issues catch US buyers off guard in a European acquisition: tax structuring, foreign-investment screening, employee transfer rules, and local transfer taxes and formalities. Each can change the economics or the timeline, so bring local counsel and a tax advisor in before you sign.

Tax structuring and the acquisition vehicle

A US buyer often acquires through a holding company in a treaty-friendly jurisdiction, because the vehicle drives the after-tax return. A holding company in a jurisdiction with a strong treaty network, such as the Netherlands, Luxembourg, or Switzerland, can reduce dividend withholding tax on cash repatriated to the parent, in some cases from 30% toward 5%. US corporate acquirers also weigh the GILTI regime on foreign subsidiary earnings, which shapes both the vehicle and the financing. Treaty benefits depend on real substance: without local directors and genuine activity, anti-abuse rules can deny the benefit and tax the entity as if it did not exist. These are questions for a cross-border tax advisor, and this article is general information rather than tax advice.

Foreign-investment (FDI) screening

Many European countries now screen foreign acquisitions, and US buyers are among the most frequently reviewed. By 2024, 24 of the 27 EU member states had an FDI screening regime, and the EU is tightening a common framework with a standardized 45-day initial review. Sensitive sectors such as defense, critical infrastructure, key technologies, and health draw the most scrutiny, and some deals have been blocked, such as France's 2020 refusal of a US acquisition of Photonis. Build screening into the timeline, and for a sensitive target, test approval risk before you invest heavily in the deal.

Employee transfer and works councils

In much of Europe, employees transfer with the business by law, and their representatives often have information or consultation rights. In a German share deal, the economic committee or works council generally must be notified in advance of a contemplated sale, and overlooking that can trigger injunctions that delay a deal by months. Plan the employee and works-council process early, because it affects both timing and the seller relationship.

Transfer taxes, notarization, and formalities

Local formalities can add cost and time a US buyer does not expect. A German GmbH share deal must be notarized, meaning the purchase agreement is recorded by a notary and read aloud with the parties present or represented. Where the target holds German real estate, real estate transfer tax can apply when 90% or more of the shares transfer within ten years, at rates of 3.5% to 6.5% depending on the federal state. Similar formalities and transfer taxes exist across Europe in different forms, so confirm them per country with local counsel.

Common pitfalls for US buyers

The most frequent mistakes are underestimating access, misreading the seller, and rushing structure. US buyers often assume a database solves sourcing, when the real work is reaching owners who are not on any list. They approach a founder-owner the way they would a US corporate seller, when a Mittelstand owner who spent decades building the company responds to a slower, more personal approach.

The other common error is treating structure as an afterthought. In a cross-border deal, the wrong structure can create double taxation or a stranded tax position, so it belongs at the start of the process.

By Ludwig Schroedl. Ludwig Schroedl is the founder of FISART. An operator who built and sold his own companies, he understands the deal process from both sides of the table.