Acquiring a Private Company in Poland: What Foreign Investors Should Know

Buying an established Polish company can provide immediate access to one of Central Europe's largest markets.

But successful market entry through acquisition requires understanding not only the target business, but also the transaction environment around it.

For an international buyer considering its first Polish acquisition, several issues deserve attention from the beginning.

1. Define the acquisition perimeter

The first decision is not valuation.

It is what exactly the investor intends to acquire.

Depending on the circumstances, a transaction may involve shares in a company, an enterprise or selected assets.

These structures can have materially different legal, tax and operational consequences.

Transaction structure should therefore be considered early with appropriate legal and tax advisers.

2. Understand the ownership

Privately held companies can have very different ownership structures.

Some have a single founder.

Others are owned by families, management teams or several shareholders whose objectives may not be identical.

Before investing significant resources in a transaction, it is useful to understand:

• who ultimately controls the company
• whether all relevant shareholders support a potential transaction
• whether minority shareholders exist
• whether shareholder agreements affect a sale
• what role existing owners expect after completion

Ownership dynamics can influence both timing and transaction structure.

3. Validate earnings quality

Headline EBITDA is not enough.

Private businesses may contain owner-specific expenses, related-party transactions, non-recurring income or costs and working-capital patterns that require normalisation.

A buyer should understand how reported profitability translates into sustainable earnings and cash generation.

Financial due diligence therefore needs to go beyond verifying historical accounts.

The objective is to understand the economics of the business the investor will actually own after completion.

4. Examine customer concentration

A company can appear highly profitable while depending on a small number of customers.

That is not automatically a reason to reject an acquisition.

But the buyer should understand:

• duration of customer relationships
• contractual protection
• renewal dynamics
• pricing power
• switching risk
• customer-specific margins
• the founder's role in maintaining those relationships

In founder-led businesses, customer concentration and key-person risk can be closely connected.

5. Investigate management depth

An acquisition becomes substantially easier when a business has a management team capable of operating independently.

International investors should therefore distinguish between a founder-owned business and a founder-dependent business.

The first describes ownership.

The second describes operational risk.

Where dependence is high, the transition plan becomes part of the transaction itself.

6. Conduct comprehensive due diligence

Legal, financial and tax due diligence are standard components of an acquisition, but the precise scope should reflect the target.

Depending on the sector, additional work may include commercial, environmental, technical, IT, cybersecurity, HR or regulatory review.

The purpose is not simply to produce reports.

Findings should inform valuation, transaction documentation, warranties, indemnities, conditions precedent and post-closing planning.

Due diligence should be conducted by appropriately qualified professional advisers.

7. Check regulatory requirements early

Foreign investors should establish whether the contemplated transaction requires regulatory approval.

Poland has mechanisms for screening certain investments in protected businesses.

Sector-specific approvals can also apply.

Financial-sector acquisitions, for example, may involve notification or supervisory requirements before significant shareholdings are acquired.

Merger-control analysis should also be undertaken where relevant.

Regulatory analysis is transaction-specific and should be confirmed by qualified counsel.

8. Think about the transaction before negotiating price

Price is only one component of the offer.

A transaction may also involve:

• cash at completion
• deferred consideration
• earn-outs
• rollover equity
• seller financing
• escrow or holdback mechanisms
• management incentive arrangements
• transitional involvement by the founder

These mechanisms can help bridge differences in valuation expectations and allocate risk between buyer and seller.

For founder-owned businesses, structure can sometimes be as important as headline valuation.

9. Plan the first 100 days before completion

An acquisition does not end at closing.

International buyers should understand how the business will operate immediately afterwards.

Questions include:

• Who communicates the transaction to employees?
• Does the founder remain?
• Who controls banking and financial reporting?
• Will branding change?
• Which systems will be integrated?
• What decisions remain local?
• Which synergies should be implemented immediately and which should wait?

A disciplined integration plan protects the value the investor has just acquired.

10. Local access comes before execution

There is one step before all of the above: finding the right company.

The public market represents only part of the available universe.

Investors with clearly defined acquisition criteria can broaden their opportunity set by identifying privately owned businesses that fit their strategy and approaching owners directly and confidentially.

This is where proprietary origination becomes relevant.

Project CEE

Project CEE supports international investors seeking private acquisition opportunities in Poland and selected Central and Eastern European markets.

We focus on the beginning of the transaction funnel: translating an investment thesis into a target universe, identifying relevant companies and establishing confidential dialogue with their owners.

The transaction itself should subsequently involve the appropriate legal, tax, financial and other professional advisers.

If Poland forms part of your acquisition strategy, tell us what you are looking for.

Price is only one component of the offer.