This guide describes a standard process. In practice, every process is tailored to the company and to its universe of potential buyers: how many buyers are approached, in what order, and on what timetable.
Preparation: eight to twelve weeks
The process starts well before any buyer hears about it. The advisor and management agree on the positioning, build the materials and the financial model, assemble the data room and draw up the buyer list.
Two documents carry the process. The teaser, a short anonymous profile sent to buyers before they sign anything, and the information memorandum, the complete description of the business sent after a confidentiality agreement. Behind them sits the management presentation, which the team will deliver to shortlisted buyers later on, and the data room, where every document a buyer may ask for is organised in advance.
Launch and first contacts
Buyers are approached in a sequence, usually in waves: those most likely to pay a strategic premium first, then the broader list. Each conversation starts with the teaser and a confidentiality agreement; the information memorandum follows once it is signed.
A process letter sets the rules: what buyers receive, what they are expected to submit and when, and how questions are handled. During this phase the founder's involvement is limited; the advisor runs the conversations so that management can keep running the business.
Phase 1: non-binding offers
After a few weeks with the information memorandum, buyers submit a non-binding offer: an indicative price or price range, the structure they have in mind, how they would finance it, the conditions attached, and what they still need to confirm.
The point of this phase is not the price, which will move, but the selection. The advisor and the shareholders compare offers on value, certainty and fit, and shortlist a handful of buyers for the second phase. This is where a competitive process earns its keep: buyers who know they are not alone move faster and commit more.
Phase 2: due diligence and binding offers
Shortlisted buyers meet management, usually in a half-day management presentation followed by site visits or expert sessions, and get access to the full data room. They run their due diligence, financial, legal, tax, technical and commercial, with their own advisors.
A draft of the sale and purchase agreement is sent to buyers, who return it with their mark-up alongside their binding offer. Comparing offers at this stage means comparing legal positions as much as prices: warranties, indemnities, escrow, conditions to closing, and what happens to management.
Exclusivity, signing and closing
One buyer is granted exclusivity to finalise its confirmatory work and negotiate the final agreements. Signing commits both sides; closing, which can follow immediately or after regulatory or financing conditions are met, transfers the shares and the money.
From launch to signing, a well-run process typically takes six to nine months. The variance comes from preparation: processes that start with clean numbers and a complete data room move through phase 2 in weeks, not months.
A process is a sequence of decisions, and the first ones are the ones that matter.