Most transactions take 100 to 130 days from the time we sign a letter of engagement to the closing. Of course some can be done quicker and some can run longer. It is not uncommon to have the transaction take up to two months to close once a buyer has signed a letter of intent. Because most business owners and corporate management do not sell companies every day, here is a typical summary timeline.

As previously mentioned, many things can speed or slow down this process, including items the buyer deems as “surprises” in the due diligence period, the availability of the buyer’s and seller’s attorney to draft documents or how fast the buyer’s funding source can approve the documents. Our job includes addressing areas of concern and helping the buyer and seller to work through them.

To assist with the preparation of the OM, in the case of a closely held business, it is highly recommended that the seller take their CFO into their confidence and disclose that the company is going to be sold as the financial records are a key component of the OM. Beyond the CFO, the seller can make the decision if they decide to let any of the key management know about the pending sale. Of course as a rule, the fewer who know the better.