The Sale Process

The Sale Process

The business sale process has a number of distinct stages and typically takes 6 to 10 months to complete.

The Business Sale Process

Finding the Right Buyer

Finding the Right Buyer

There are strategic and financial buyers. The best buyer is the one that benefits the most from the purchase.

Finding the Right Buyer

Valuation

Valuation

A business's value is determined by market comparables as well as business specific analysis.

Valuation

How long does it take to sell a company

How Long Does it Take to Sell a Business?

How long does it take to sell a business?  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,…

Selling a Small Business

What are the Steps in Selling a Business?

Steps in selling a business include four phases of progressive information release to smaller and smaller audiences. Phase 1: Prepare Marketing Materials The first document used is called a teaser and is typically only one to three pages in length.  The teaser is a “blind” (i.e. it should include no specific information from which the company name…

Confidential Information Memorandum

What Does a CIM Include and How Do You Position it?

A Confidential Information Memorandum, or CIM, is the main overview document provided in the private company sale or private equity financing process.  A CIM is made available subsequent to signing an NDA and presents detailed company information as a basis for an indicative value discussion. The CIM is typically prepared by the adviser and ranges…

NDA-non-disclosure-agreement

NDA Agreement: Meaning and Sample Clauses

A Non Disclosure Agreement (NDA, also called CA for Confidentiality Agreement and MNDA for Mutual Non Disclosure Agreement) are contracts that stipulate that information received from a counter-party will only be used for the purpose as defined in the NDA.  Meaning, it will not be used as a basis for competitive tactics or shared freely…

earn-out

Form of Payment; Should You Accept an Earn-Out?

Public company take-over bids typically consist of all cash or a combination of cash and shares.  Consideration in private company acquisitions will usually include a sizable portion in cash (50 to 100%) but will often include an unsecured note and/or an earn-out as well.  This is typically because: (i) the buyer does not have (or have…

value

How Do I Attract a High Multiple for My Business?

How do you attract a high multiple for your business?  There are two broad answers to this question.  The first concerns the business itself and the second concerns the sale process.  For the sale process, please see: What are the Steps in Selling a Business.   We will address the business issues here; not to say invent…