The M&A process can feel opaque if you haven’t been through it before. This guide breaks it down into clear stages so you know exactly what to expect.
Stage 1: Strategic Review and Preparation
Duration: 1-3 months
Before going to market, you and your advisor will:
- Assess readiness — are the financials clean? Is the business owner-dependent? Are there issues to resolve first?
- Define objectives — price expectations, timeline, deal structure preferences, transition willingness
- Normalise financials — adjust historical accounts to show true earning power
- Identify the buyer universe — strategic buyers (competitors, adjacent industries, international entrants), financial buyers (PE firms, family offices), and management teams (MBO)
- Prepare materials — Information Memorandum, financial model, teaser document
This stage is where the groundwork for a successful process is laid. Rushing it costs money at the back end.
Stage 2: Controlled Marketing
Duration: 2-4 months
Your advisor will run a controlled, confidential process:
- Teaser distribution — a blind summary (no company name) sent to the target buyer list to gauge interest
- Confidentiality agreements — interested parties sign NDAs before receiving detailed information
- Information Memorandum — a comprehensive document presenting the business, financials, growth opportunity, and investment thesis
- Management presentations — meetings between you and serious buyers (usually 3-6 parties)
- Indicative offers — non-binding offers that outline price, structure, and conditions
The goal is to create competitive tension — multiple interested parties bidding simultaneously.
Stage 3: Preferred Buyer and Due Diligence
Duration: 1-3 months
Once a preferred buyer is selected:
- Exclusivity period — the buyer gets a limited window (typically 4-8 weeks) to complete due diligence
- Data room — a secure virtual room with financial, legal, operational, and HR documents
- Due diligence — the buyer’s team (accountants, lawyers, industry specialists) reviews everything
- Working capital assessment — agreeing the level of working capital to be delivered at settlement
- Purchase price adjustments — any issues discovered may result in price negotiations
Due diligence is the most stressful part of the process. Being well-prepared dramatically reduces time and friction.
Stage 4: Negotiation and Documentation
Duration: 2-4 weeks
With due diligence substantially complete:
- Sale and Purchase Agreement (SPA) — the definitive legal document governing the transaction
- Key negotiations — representations and warranties, indemnities, escrow or retention amounts, transition terms
- Conditions precedent — regulatory approvals, landlord consent, key customer/supplier consents, financing conditions
Stage 5: Completion and Transition
Duration: 1 day (completion) + 6-12 months (transition)
On completion day, ownership transfers and funds are exchanged. Then:
- Transition period — you stay involved (typically 6-12 months) to hand over relationships, knowledge, and operations
- Earnout period — if part of your price is tied to future performance, this period begins
- Staff and customer communication — carefully managed announcements
Timeline Summary
| Stage | Duration |
|---|---|
| Preparation | 1-3 months |
| Marketing | 2-4 months |
| Due diligence | 1-3 months |
| Documentation | 2-4 weeks |
| Total | 6-12 months |
Add 3-12 months of preparation before engaging an advisor for optimal results.
Tips for a Smooth Process
- Maintain business performance — any revenue dip during the process will cost you
- Be responsive — delays signal problems and kill buyer enthusiasm
- Prepare your data room early — the faster due diligence runs, the better your outcome
- Let your advisor negotiate — emotional negotiations between seller and buyer can damage relationships
- Plan for life after the sale — having clarity about what’s next helps you stay focused
Contact us to discuss your M&A timeline and how we can help.