Why should I run a competitive sale process instead of negotiating with one buyer?
Because a structured process creates competitive tension (an “auction effect”), surfaces the best buyers, and maximizes value. The first offer isn’t always the right one, and the “obvious” buyer is rarely the best buyer.
What exactly does an M&A advisor (investment banker) do for me?
We act as your advocate from strategy through closing—positioning the business, preparing materials, running the buyer outreach, negotiating terms, and guiding due diligence and documentation so you achieve your objectives. We don’t lend; we advise before, during, and after the transaction.
Who are the typical buyers for my company?
Expect a mix of strategic acquirers and financial buyers: private equity funds (including add on platforms), pension funds with PE arms, family offices, and independent sponsors. Your advisor’s job is to narrow that universe to qualified, relevant bidders.
What are the main stages of a sell side M&A process?
Development → Marketing → Closing. Prepare the company and materials; contact buyers and solicit indications; then manage diligence, negotiate legal documents, and close.
What information will I need to provide?
You’ll complete a structured information request covering financials (audited and internal), customers/suppliers, operations, legal, tax, HR, IP, and more—organized for a data room and the CIM.
How is confidentiality protected?
Initial outreach uses an anonymized Teaser (no company name), and detailed information is shared only after a buyer signs a Confidentiality Agreement (NDA/CA) and receives the Confidential Information Memorandum (CIM).
What are a Teaser, CIM, Process Letter, IOI/NBO, and LOI?
- Teaser: short, anonymous snapshot to spark interest.
- CIM: 40–60 page in‑depth presentation of the business.
- Process Letter: sets deadlines and asks for non‑binding offers.
- IOI/NBO: buyer’s preliminary, non‑binding valuation and structure.
LOI/Term Sheet: a detailed, mostly non‑binding agreement (with binding confidentiality & exclusivity) that sets the path to closing
How long is exclusivity after signing an LOI?
Typical exclusivity is 60–90 days to complete confirmatory diligence and definitive agreements.
What does “cash free, debt free” mean?
In most deals, sellers keep remaining cash after paying off debt at closing; buyers acquire the business on a cash free, debt free basis, subject to a Working Capital Adjustment.
What is a Working Capital Adjustment (WCA) and why does it matter?
A target working capital level (based on historical norms) is agreed so the business can run post close. After closing, actual net working capital is compared to the target; any shortfall/excess leads to a price adjustment—often a six figure swing if not managed early.
What can derail a deal late in the process?
Late or poorly handled working capital topics are a common cause, which is why your advisor models scenarios and negotiates definitions early.
How are buyers compared fairly?
Your advisor “provides guidance” to align key terms (valuation ranges, structure, conditions) so offers can be compared “apples to apples,” then uses a buyer comparison framework to weigh value, ability to close, structure, resources, and fit.
What happens during management presentations and site visits?
After initial offers, shortlisted buyers visit HQ, meet leadership, and review a management presentation. It’s your moment to demonstrate strategy, operations, team, metrics, and growth levers—professionally choreographed with your advisor.
What is typically inside the Purchase Agreement?
Definitive terms: price and consideration structure (e.g., cash, earn out), reps & warranties, covenants, indemnities, schedules/disclosures, and closing mechanics. Buyers often draft the first version; negotiation follows the LOI.
How is the buyer list built?
Advisors blend proprietary networks, premium databases, industry groups, and prior inbounds to create a tiered buyer list (strategic and financial) and track outreach stages (teaser sent, CA signed, CIM sent, indication received, etc.).
What role do my other advisors play?
Your working group includes the M&A advisor, corporate/securities counsel (plus tax/HR as needed), auditors, accountants, and insurance advisers—each with defined responsibilities through diligence and documentation.
What makes for a strong CIM—and what shouldn’t it do?
A strong CIM tells the full story (market, growth strategy, operations, financials, adjustments, projections) and anticipates concerns; it must be supportable in diligence—don’t include claims you can’t evidence.
As a private equity seller, what can I expect that’s different?
You’ll focus on portfolio dynamics (timing vs. fund life), buyer universe mapping (strategics vs. secondary sponsors), and process efficiency (clean data room, vendor analyses). You can also expect sophisticated discussions on structure (rollover equity, earn outs, or continuation vehicles if relevant). (General guidance; tailored per mandate.)
How long does a full sale process usually take?
Timelines vary by readiness and complexity. As a rule of thumb, plan 6–9 months from preparation to closing (including ~2–3 months to prepare materials and launch, ~2–3 months for marketing and indications, and ~2–3 months for confirmatory diligence under LOI). (General guidance; transaction specific.)
How are M&A advisory fees structured?
Typically a modest monthly retainer plus a success based fee at closing that scales with outcome/size; exact terms depend on deal scope and complexity. (General market practice; specifics agreed case by case.)
Bonus: What materials should I expect to see in a process (at a glance)?
Teaser → NDA/CA → CIM → Process Letter → IOI/NBO → Management Presentation & Visits → LOI/Term Sheet (with 60–90 days exclusivity) → Confirmatory Diligence → Purchase Agreement & Closing.
