The Company Sale Process Step by Step

Preparation: the three months before the process starts

The work done in preparation is the only work that cannot be made up later. In this phase the valuation range is established, normalisation adjustments are documented, financial reporting is tidied, critical contracts are reviewed, and structural risks such as owner dependence are reduced as far as possible.

The equity story is built in the same period: why the company is valuable, where growth will come from, what a buyer gains by owning it. A story not supported by numbers falls apart in the first meeting.

The buyer universe and the order of approach

A buyer list is not kept long; it is kept right. Strategic buyers can pay more where they see synergy, but because they are competitors, information sharing has to be staged carefully. Financial investors are more predictable through the process but look harder at management continuity and debt capacity.

The order of approach affects the price. In a process started with a single buyer, negotiating leverage sits with the other side from the outset; where several buyers move on the same timetable, timing works for the seller.

From letter of intent to exclusivity

Interested buyers submit non-binding offers. Looking only at the headline number is a common mistake; payment structure, the portion tied to an earn-out, the escrow amount and the closing conditions are often more decisive than the number itself.

Leverage changes hands the moment exclusivity is granted. That is why exclusivity periods are kept short and why the key non-price terms are put in writing before they are given.

Due diligence and negotiation

The review phase is technical and the tempo drops. The seller's job here is to answer questions quickly and consistently; delay and inconsistency destroy more value than the finding itself.

The final negotiation is less about price than about protections: the scope of representations and warranties, the indemnity cap and survival period, the escrowed amount, the non-compete. These clauses determine what risk the seller still carries after closing.

Closing and afterwards

Closing does not end at signature. Competition authority clearance, lender consents, change-of-control provisions in critical contracts and shareholder approvals all come in as conditions. These can extend the timetable by weeks.

After signing there is usually a transition period: the former owner staying on for a defined time, the handover of customer and supplier relationships, retention of the team. Part of the consideration is often tied to this period.