The Silent Revolution in SME Acquisitions: How Insured Warranties Are Fundamentally Changing the Playing Field

By Peter Zwijnenburg, Head of Northern Europe at Aon M&A

96% of the Market, Yet Long Underserved

Around 96% of all Belgian companies belong to the SME (small and mid-sized companies) segment (turnover below €10 million and/or fewer than 50 employees). They form the backbone of our economic fabric, but they also seek to grow and build. This often happens through mergers and acquisitions.

The total number of companies in this category remains relatively stable: each year, roughly as many businesses cease operations as are newly created. However, a significant share of those companies does not disappear, but is instead sold to larger corporations or private equity firms, often as part of a buy-and-build strategy.

According to various academic studies, the average valuation of Belgian SMEs ranges between 4 and 6.5 times EBITDA. This means that the majority of these companies have an enterprise value below €10 million. Yet this specific segment has long been structurally underserved in the M&A market.

A Sale Casts a Long Shadow

For many SME entrepreneurs, especially family-owned businesses, the sale of their company is a one-time and deeply significant event. But even after closing, risks remain. Claims, warranties, and liabilities can surface years after the transfer.

To manage these risks, buyers traditionally impose strict conditions on sellers: escrow accounts, deferred payments, and net worth maintenance declarations. These mechanisms are designed to cover potential “skeletons in the closet.” In practice, they lead to lengthy negotiations, higher legal costs, and funds remaining locked up for years after the sale.

Large transactions have had a solution for some time: specialised M&A insurance. For SME transactions, however, such products remained too expensive, too complex, and insufficiently standardised.

A Fundamental Shift

That landscape is now changing. With DealSure by Aon, a standardised M&A insurance solution is being introduced for transactions up to approximately €10-15 million. Through a one-off premium, sellers can eliminate their post-closing risks, without complex structures, additional due diligence requirements, or heavy contractual modifications.

The impact is twofold. Sellers achieve a “clean exit,” while buyers receive greater certainty than is currently typical in SME deals. Whereas buyers in this segment often accept only 25–50% of the transaction value as maximum liability, insurance coverage can allow claims of up to €5 million—or even 100% of the acquisition price.

At the same time, many negotiations over technical details such as liability caps and warranty levels disappear—discussions that often undermine deal momentum and drive up costs.

Faster, Simpler, More Predictable

“It leads to a faster and simpler sale process with more certainty for everyone—at a one-time, very reasonable fee,” says Peter Zwijnenburg, Head of Northern Europe at Aon M&A. “Sellers can focus on a successful transfer, while the relationship between buyer and seller is no longer burdened by later claim disputes.”

According to Aon, this shifts the focus from risk negotiation to value creation and closing. What was long reserved for large deals is now practically applicable to the heart of the economy: the SME segment.

A New Standard in the Making?

The introduction of insured warranties raises fundamental questions. Will this become the new standard in SME mergers and acquisitions? Will it change the role of M&A lawyers, corporate finance boutiques, and other advisors? And will this added certainty lead to higher selling prices - or rather to sharper bids, since risks become more manageable?

According to Aon, one thing is clear: the solution was missing for a long time because the right product simply did not exist, one that truly matched the reality of smaller transactions. That gap has now been filled with an efficient process and a policy featuring market-focused enhancements, developed based on input from advisors and entrepreneurs.