Why Control Deals Are Gaining Ground: What Buyers Look for in an Acquisition

Control is not simply a larger ownership stake. It is the right to change a business—its strategy, leadership, capital allocation, and pace of growth.

For buyers, acquiring control can create the authority needed to implement a value-creation plan. But control alone does not create value. Buyers must first assess whether the business has the financial strength, management capability, governance standards, and market position to support that plan.

For business owners, understanding what control-oriented buyers look for can make a meaningful difference when preparing for a sale, investment, or ownership transition.

Why control deals attract buyers

A minority investment may provide capital, board access, or strategic support, but it may not give an investor enough authority to drive change. A controlling stake, by contrast, can enable a buyer to reshape the business more decisively. 

Control-oriented buyers typically seek the ability to: 

• Set or revise business strategy 
• Appoint or strengthen leadership 
• Direct capital towards priority initiatives 
• Improve operations and margins 
• Pursue acquisitions or market expansion 
• Introduce stronger governance and reporting practices 

This is particularly relevant when a buyer sees an opportunity to improve performance, professionalise management, or reposition a business for its next phase of growth. 

For promoters, the level of control being transferred influences buyer expectations, transaction structure, valuation, and post-completion arrangements.

What buyers want to achieve

Control gives investors the authority to pursue change, but the value of that change depends on execution. Buyers commonly focus on three areas. 

1. Improving operations 
   Buyers look for opportunities to improve efficiency and profitability. This may include managing costs, improving pricing and margins, simplifying processes, strengthening working-capital management, and investing in systems or technology. 
2. Strengthening leadership 
   Many growing businesses remain dependent on their founders for sales, relationships, approvals, and day-to-day decisions. Buyers often want to build a management structure that can operate independently, with clear responsibilities, accountability, and succession plans. 
3. Expanding the business 
   Control can support expansion into new markets, customer segments, services, or geographies. It can also enable a buy-and-build strategy, where a buyer acquires a platform business and subsequently adds complementary smaller businesses.

What makes a business attractive

Strong revenue alone does not make a business attractive to a control-oriented buyer. Buyers assess the quality and durability of earnings, the strength of the team, the resilience of the market position, and the practical ability to implement change after completion. 

Key considerations include:

• Financial performance: Revenue trends, profitability, cash flow, debt, working capital, and quality of earnings. 
• Management strength: The capability of the leadership team and the extent to which the business depends on its founder. 
• Market position: Customer relationships, competitive advantage, pricing power, and expansion potential. 
• Governance and compliance: Reliable financial records, clear ownership structures, regulatory compliance, contracts, and documentation. 
• Ownership and control rights: Voting rights, board representation, reserved matters, shareholder agreements, and decision-making arrangements. 
• Strategic fit: Whether the business complements the buyer’s existing operations, portfolio, or investment thesis. 

Control is not determined by shareholding percentage alone. A majority shareholder may still face limits through veto rights, board approvals, lender covenants, regulatory requirements, or protections granted to minority shareholders.

How control influences deal value and risk

Buyers may pay more for a controlling stake than for a minority holding. This additional amount is known as a control premium, reflecting the greater authority that comes with ownership.

However, a premium is not guaranteed. It depends on the business's performance, the rights being acquired and the value the buyer expects to create.

Buyers must also consider risks such as promoter dependency, weak financial reporting, management gaps and the possibility that changes in ownership could disrupt existing operations. These factors can affect the final valuation, transaction terms and post-acquisition arrangements.

Making control translate into value

Acquiring control provides authority, but it does not automatically create value. The buyer must have a clear plan for what will change after completion—and the business must be capable of supporting that change. 

A credible post-acquisition plan should address: 

• Operational improvements and margin opportunities 
• Leadership requirements and management incentives 
• Investment priorities 
• Governance, reporting, and compliance 
• Customer, employee, and supplier continuity 
• Growth initiatives, including organic expansion or acquisitions 

For promoters, this is why buyers assess more than historical financial performance. They also consider whether the business can operate smoothly under new ownership and whether its underlying strengths can be built upon. 

Ultimately, control gives a buyer the authority to pursue a business plan. Whether that authority translates into additional economic value depends on how effectively the buyer executes it.

Planning the Next Chapter of Business Ownership

MS Kapital supports businesses and investors through transaction advisory, business valuation and exit strategy, helping stakeholders assess opportunities and make informed decisions around ownership changes.

Considering a strategic sale, investment or change in ownership? Speak to MS Kapital to assess your next move.