Category Archives: Business Sale Process

How Long Does it Take to Sell a Company?

How long does it take to sell a company?  Milestones in a sale process are outlined in the following chart.

Milestone          Timeframe
Preparation of the marketing materials (by the advisor in concert with the seller) and due diligence materials (by the seller). The documentation including a teaser, CIM and buyer list, while iterative with the seller, can be completed within four 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; up to 2 months
Management meetings and supplemental information provisioning; securing and negotiating the final LOI. With the top 3 to 5 parties; up to 2 months.
Due Diligence and drafting/negotiating the purchase and sale agreement. With the final party; 45 to 60 days.
Total 7 to 9 months

 

Having said that, the following is an actual example of a divestiture of a private company…

Working Capital Adjustments in an Acquisition

  Determination of working capital is always a point of negotiation in a Share Purchase Agreement.  This is different from an asset purchase where the cash held in the business would not be an issue.  However, it should be noted that you can still purchase a going concern business by way of an asset purchase.…