Preparation of the marketing materials (by the advisor in concert with the seller) and due diligence materials (by the seller, guided by advisor). The documentation including a teaser, CIM and buyer list, while iterative with the seller, can be completed within four to eight weeks.
Preparation of the due diligence materials is highly company dependent and can take from several weeks to several months.
Engaging potential buyers and securing expressions of interest Potentially to many parties; 2 to 6 months
Management meetings and supplemental information provisioning; securing and negotiating the final LOI. With the top 3 to 5 parties; up to 3 months.
Due Diligence and drafting/negotiating the purchase and sale agreement. With the final party; 45 to 0 days.
Total 9 to 12 months
Why so Long?
It is better to fully prepare before engaging in business sale discussions than it is to react to buyer information requests. Once information is shared or questions are answered, it is difficult to backtrack on inconsistent information or having strayed from your messaging theme. The preparation phase is the most important phase and, depending on systems in place and historical KPIs (Key Performance Indicators) tracked, it can take some work to get ready.
The next phase in the business sale process is what we call “in market” and is the marketing/communication phase of the process. Depending on the level of relationships of the broker and the time of year, this can take one to three months. Seasonal events that slow the process down include Christmas, summer holidays, new years in China, Easter in Europe, etc.
The last phase of a business sale is due diligence and closing (i.e. legals); which typically takes 60-90 days. Adding up these three main phases, you are looking at least 4-6 months. A business sale is not a quick process.