Sell-Side M&A Explained: What to Expect from Start to Close
M&A jargon can feel impenetrable—LOIs, reps & warranties, escrow, CIMs. If you’re thinking about selling your business, you deserve a clear roadmap. This guide walks you through the full sell-side process in plain English, so you can understand the moving parts and know when to bring in the right advisors.
Whether you’re planning to exit in 6 months or 2 years, this is what the journey typically looks like.
1. Pre-Market Preparation
Before you reach out to buyers, you need to get your house in order. The better prepared you are, the smoother (and more valuable) your exit will be.
What this includes:
Financial tune-up. Clean up your books, standardize reporting, and focus on EBITDA (aka your profits). Make sure your numbers can be explained and defended.
Legal & operational audit. Identify issues like customer concentration, IP ownership gaps, misclassified workers, or missing contracts—and fix them before diligence.
Goal setting. What do you want? Do you plan to retire? Stay on for a few years? Start something new? Your goals should shape how the deal is marketed and structured.
2. Packaging & Marketing
You only get one chance to make a strong first impression. That starts with how your business is presented to potential buyers.
What this includes:
Teaser. A 1–2 page overview with high-level info: industry, size, highlights, market opportunity, and why you’re selling.
Confidential Information Memorandum (CIM). A detailed, confidential deck that outlines financials, operations, the team and organizational structure, customer and supplier base, growth drivers, legal and regulatory considerations, and more.
Buyer list. Your advisors (your bankers and deal attorneys) will help prioritize and segment buyers—strategics vs. financials, domestic vs. international—based on your deal goals.
3. Indications of Interest (IOIs) & Letters of Intent (LOIs)
Now the buyers get serious—and you need to start comparing offers, not just price tags.
What this includes:
IOIs. These are non-binding expressions of interest that outline valuation ranges, deal structure, and any key assumptions.
LOI negotiation. This is where you negotiate headline price, structure (cash, equity, earnouts), working capital targets, key employee roles, and exclusivity terms.
Exclusivity period. Most LOIs include a 30–60-day exclusivity (or “no shop”) window. That’s when buyers go deep on diligence—so make sure timelines and expectations are clear.
4. Due Diligence
This is where deals get real. The buyer’s team will dig into every aspect of your business—and how you handle this stage can determine whether the deal closes on time (or at all).
What this includes:
Document review. Be ready to provide detailed financials, material contracts, information about your customer base, IP ownership docs, HR files, and more.
Site visits & management meetings. These are chances for the buyer to get comfortable with your team, culture, and operations. Prepare your leadership for Q&A.
Issue log. Your lawyer or banker will help you track requests and responses. Organization and responsiveness go a long way toward building trust.
5. Purchase Agreement & Closing
This is where the legal substance of the deal lives. Once diligence wraps (or more accurately, concurrently during due diligence), you’ll move into negotiating the definitive purchase agreement—which allocates risk, governs economics, and outlines exactly what happens at and after closing.
What this includes:
Negotiating reps & warranties. These are the seller’s contractual statements about the state of the business—covering everything from financials and compliance to employees and IP.
Escrow & indemnity. A portion of the purchase price is typically held in escrow for a set period (often 12–24 months) to cover potential post-closing claims. Key negotiation points include what happens in the event of breaches of the reps/warranties: such as, how long post-closing the buyer can bring a claim, and the maximum amount a seller will have to pay (known as caps, baskets, deductibles and thresholds).
Closing mechanics. At closing, the deal is consummated: shares or assets are transferred, and the seller(s) get paid! But many deals include post-closing obligations like transition services, earnout measurement periods, or ongoing access to records—don’t overlook these “tail” provisions.
A well-executed M&A process is your path to maximizing value and minimizing stress. The key? Know what’s coming, prep ahead of time, and bring in the right advisors before it’s urgent.
Thinking about selling your company in the next 1–2 years?
Reach out! I’m happy to walk through your timing, goals, and where to begin.