The sale process
A typical sell-side engagement, phase by phase: what happens, how long it takes and what is produced.
- 1
Weeks 1–6
Preparation
We develop a thorough understanding of the business, its financials and its owners’ objectives before any buyer is contacted. The work done here determines how the company is positioned and how well its numbers hold up in diligence.
Steps
- Agree on objectives, timing, structure preferences and an exclusion list
- Review financial statements, normalize EBITDA and document add-backs
- Build the financial model and a preliminary valuation range
- Map and tier the buyer universe using LC Scout and LC Enrich
- Organize the virtual data room and identify issues to resolve before launch
Documents produced
- Anonymous teaser
- Confidential information memorandum
- Financial model and valuation analysis
- Tiered buyer list
- 2
Weeks 6–10
Marketing
Qualified buyers are approached in a controlled sequence through LC Outreach and direct banker contact. Interested parties sign non-disclosure agreements before receiving the company’s name and the CIM.
Steps
- Distribute the teaser to approved strategic and financial buyers
- Negotiate and execute non-disclosure agreements
- Release the CIM and answer buyer questions
- Track engagement and refresh the buyer list as new parties emerge
Documents produced
- Executed non-disclosure agreements
- Buyer activity log
- First-round process letter
- 3
Weeks 10–14
First-round bids
Buyers submit non-binding indications of interest setting out valuation, structure and financing. We compare offers on substance, not headline price alone, and recommend a shortlist.
Steps
- Collect indications of interest on a common deadline
- Analyze valuation, structure, financing certainty and diligence requirements
- Clarify open points with each bidder
- Select the parties invited to management meetings
Documents produced
- Bid comparison analysis
- Shortlist recommendation
- Management presentation
- 4
Weeks 14–18
Management meetings & LOI
Shortlisted buyers meet management, gain access to the data room and submit letters of intent. Competitive tension is preserved until the key terms are agreed and exclusivity is granted.
Steps
- Prepare management and run presentations and site visits
- Open the data room to shortlisted buyers in stages
- Issue the second-round process letter and collect letters of intent
- Negotiate price, structure, working-capital mechanics and key legal terms
- Select the buyer and grant exclusivity
Documents produced
- Second-round process letter
- Executed letter of intent
- Diligence request list
- 5
Weeks 18–28
Diligence & documentation
The buyer completes confirmatory financial, legal, tax, commercial and operational diligence while counsel negotiates the definitive agreement. We manage the workstreams so that diligence findings do not erode the agreed terms.
Steps
- Coordinate responses to diligence requests and track open items
- Support the buyer’s quality of earnings and financing process
- Negotiate the purchase agreement, disclosure schedules and ancillary agreements
- Agree the net working capital peg and the treatment of debt-like items
- Address R&W insurance underwriting, consents and other closing conditions
Documents produced
- Definitive purchase agreement
- Disclosure schedules
- Employment, transition and ancillary agreements
- Closing checklist
- 6
Weeks 28–32 and after
Closing & transition
The parties sign and close, funds are distributed and ownership transfers. Our involvement continues through the post-closing working-capital true-up and the agreed transition.
Steps
- Satisfy remaining closing conditions and finalize the funds flow
- Sign and close, simultaneously or in sequence
- Coordinate communication to employees, customers and suppliers
- Support the purchase price adjustment and any escrow releases
- Assist with the transition plan agreed with the buyer
Documents produced
- Funds flow memorandum
- Closing statement
- Final purchase price adjustment
Guides for owners and acquirers
In-depth reference guides with tables, worked examples and checklists.
The Complete Guide to Selling a B2B Company
How a lower middle market B2B sale works end to end: timing, readiness, advisors, the CIM, buyers, IOIs, LOI, diligence, closing and why deals fail.
17 min read|7 reference tables
Valuation Multiples in the Lower Middle Market: A Sector-by-Sector Guide
Indicative EV/EBITDA and ARR multiples by size band and sector, what moves a multiple, and how a headline price becomes cash at close.
17 min read|9 reference tables
Who Buys Lower Middle Market Companies: Buyer Types Compared
Strategics, private equity, family offices, search funds, ESOPs and more: how each buyer type values, finances and structures a lower middle market deal.
23 min read|7 reference tables
Considering a sale, an acquisition or a recapitalization?
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