The mid-market Swedish company that reaches a sale process after ten or fifteen years of founder ownership almost never has accounts that are ready for buyer scrutiny. The business is well run. The financial statements are not the problem. But the gap between how a founder reports and how a buyer diligence is wider than most sellers expect, and it is wider in Sweden than it is in the UK or the US.

This article covers the four areas where that gap is largest, and what a seller or their adviser can do about it before the data room opens.

1. Owner compensation is not at market

This is the most common adjustment in any private-company diligence, and Sweden is no exception. Founders pay themselves what the business can afford rather than what a professional manager would cost, and the difference is an add-back a buyer will accept if it is evidenced and challenged if it is not.

The complication in Sweden is the payroll structure: basic salary, bonus, social security contributions and pension. A normalisation has to address all four, not just the headline salary figure.

2. The business occupies premises the founder owns

When the company rents its premises from a holding company the founder controls, the rent is rarely at market. A buyer will adjust it to fair market rent, and the direction of the adjustment is almost always downward.

On a Swedish target this is doubly important because the difference between reported and fair-market rent moves EBITDA, and because the entity structure is often buried in related-party disclosures a buyer has to ask for specifically.

K2 was designed for smaller companies

K2 permits capitalisation of development costs in consolidated accounts but not in single-entity statements. K2 prohibits it outright. An IFRS-basis buyer will normally add the amortisation back.

K3 requires goodwill to be amortised, unlike IFRS where it is impairment-tested. K3 lease treatment diverges from IFRS 16. On a software or product target these three differences alone can move reported EBITDA by a material amount, and they are the most common source of re-trade at completion.

The SIE file is an advantage, if you use it

A Swedish target should not need the data-entry phase that eats week one of most offshore diligence engagements. One SIE4 export carries the monthly P&L, balance sheet, account detail and voucher support in a single ingestion.

The practical effect is that a seller who hands over the SIE4 file at kick-off is three days further into the diligence than a seller who hands over a reformatted spreadsheet, and the buyer's team notices.

What to do before the process starts

  • Request the SIE4 export for the diligence period, per legal entity, before the data room opens.
  • Confirm the reporting basis — K2, K3 or IFRS — so the buyer's bridge is not the first time the question is asked.
  • Document the related-party transactions: rent, shareholder loans, guarantees and any services provided by or to other founder-controlled entities.
  • Get the statutory accounts — the årsredovisning filed with Bolagsverket — and reconcile them to management reporting before a buyer asks.

The single most useful thing a founder-led Swedish business can do before a sale process is to produce a one-page summary of the gap between reported and deal-basis EBITDA, with each adjustment evidenced. That document sets the terms of the debate for the rest of the process.

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