Question 1

Why should I run a competitive sale process instead of negotiating with one buyer?

Accepted Answer

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.

Question 2

What exactly does an M&A advisor (investment banker) do for me?

Accepted Answer

We act as your advocate from strategy through closing, positioning the business, preparing materials, running buyer outreach, negotiating terms, and guiding due diligence and documentation. We don’t lend; we advise before, during, and after the transaction.

Question 3

Who are the typical buyers for my company?

Accepted Answer

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. Our job is to narrow that universe to qualified, relevant bidders.

Question 4

What are the main stages of a sell-side M&A process?

Accepted Answer

Development → Marketing → Closing. Prepare the company and materials; contact buyers and solicit indications; then manage diligence, negotiate legal documents, and close.

Question 5

What information will I need to provide?

Accepted Answer

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.

Question 6

How is confidentiality protected?

Accepted Answer

Initial outreach uses an anonymized Teaser (no company name); detailed information is shared only after a buyer signs a Confidentiality Agreement (NDA/CA) and receives the Confidential Information Memorandum (CIM).

Question 7

What are a Teaser, CIM, Process Letter, IOI/NBO, and LOI?

Accepted Answer

Teaser: short, anonymous snapshot. CIM: 40–60 page in-depth presentation. 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.

Question 8

How long is exclusivity after signing an LOI?

Accepted Answer

Typical exclusivity is 60–90 days to complete confirmatory diligence and definitive agreements.

Question 9

What does “cash-free, debt-free” mean?

Accepted Answer

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.

Question 10

What is a Working Capital Adjustment (WCA) and why does it matter?

Accepted Answer

A target working capital level (based on historical norms) is agreed so the business can run post-close. 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.

Question 11

What can derail a deal late in the process?

Accepted Answer

Late or poorly handled working-capital topics are a common cause, which is why your advisor models scenarios and negotiates definitions early.

Question 12

How are buyers compared fairly?

Accepted Answer

Your advisor aligns key terms (valuation ranges, structure, conditions) so offers can be compared “apples to apples,” then weighs value, ability to close, structure, resources, and fit.

Question 13

What happens during management presentations and site visits?

Accepted Answer

After initial offers, shortlisted buyers visit HQ, meet leadership, and review a management presentation, your moment to demonstrate strategy, operations, team, metrics, and growth levers.

Question 14

What is typically inside the Purchase Agreement?

Accepted Answer

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.

Question 15

How is the buyer list built?

Accepted Answer

Advisors blend proprietary networks, premium databases, industry groups, and prior inbounds to create a tiered buyer list (strategic and financial) and track outreach stages.

Question 16

What role do my other advisors play?

Accepted Answer

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.

Question 17

What makes for a strong CIM, and what shouldn’t it do?

Accepted Answer

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.

Question 18

As a private equity seller, what can I expect that’s different?

Accepted Answer

You’ll focus on portfolio dynamics (timing vs. fund life), buyer-universe mapping, and process efficiency. Expect sophisticated discussions on structure (rollover equity, earn-outs, or continuation vehicles).

Question 19

How long does a full sale process usually take?

Accepted Answer

As a rule of thumb, plan 6–9 months from preparation to closing (~2–3 months to prepare and launch, ~2–3 months for marketing and indications, ~2–3 months for confirmatory diligence under LOI).

Question 20

How are M&A advisory fees structured?

Accepted Answer

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.