Inside a business sale: What happens, and when

While every transaction is different, most sell-side processes follow a similar sequence. Understanding these steps helps business owners know what to expect, and when.

1. Preparation: Before going to market, we work with the business owner to prepare marketing materials, a detailed financial data book and forecast, and address any obvious value gaps, while agreeing the process strategy and target buyer universe. We may at times also conduct early soundings with select parties ahead of a full launch.

2. Confidential marketing: Potential bidders are approached on a confidential basis, typically via a teaser document that doesn’t disclose the business’s identity until interest is confirmed and a confidentiality agreement (CA) is signed. During this stage, we thoroughly vet parties to confirm their genuine intent before progressing them further in the process.

3. Indicative offers: Interested parties review an information memorandum and process letter, raise any initial Q&A, and submit an Indicative Offer outlining their proposed price and key terms. Several rounds of negotiation often follow once an Indicative Offer is submitted, ahead of progressing a preferred party (or parties) to due diligence.

4. Due diligence. The shortlisted bidder(s) undertake due diligence via a virtual data room, reviewing financial, legal, tax and operational information in detail. We coordinate data room access, manage the Q&A process between bidders and the business, and arrange management presentations and site visits as required.

5. Final offers & bidder selection. Bidder(s) submit final offers, and the business owner selects a preferred party (or parties) to progress to documentation, often retaining some competitive tension until terms are agreed.

6. Documentation & negotiation. Legal counsel drafts the Asset or Share Purchase Agreement, covering price, warranties, indemnities and completion mechanics, alongside continued due diligence. We provide input into the commercial aspects of these documents, in particular purchase price mechanics, working capital and net debt adjustments, and earn-out provisions.

7. Completion. Once documentation is finalised and conditions precedent are satisfied (e.g. change of control consents, employee sign-ups), the transaction completes and ownership transfers.

Timeframes vary significantly by transaction complexity and buyer type, but a typical process runs from six to nine months from launch to completion.