It’s a question that arises, let’s start by saying that time is money… the more we are in a hurry, whatever the causes, the less we normally sell. We sold and delivered a manufacturer in 2 months, another in 5 months – from start to finish – and this, because the sellers had very personal reasons. Well… it cost a certain amount in one case, but the decisions were made wisely.
Let’s go step by step:
Decision – The decision to sell may be the longest we have seen of all – between 1 day and 5 years…. Then the process begins once the sales mandate has been signed.
Marketing – It is a question of identifying potential buyers… on average, the whole thing can take between 1 and 9 months. Depending on the specialized nature of the operations, the profile of the buyer sought, and the financial means required.
Discussion – Once we have a serious potential client, we must review the file, the figures, the operations, make visits and go to a letter of intent or a conditional offer. This stage can take between 1 and 6 months. This step can restart. It is not uncommon for the first prospect to be the wrong one.
Negotiation – It is then necessary to agree on the financial point of view, the conditions of sale, the transition before going to a final offer. This stage takes between 1 and 4 months. With the discussion portion, these are normally “communicating vessels”, because a good transaction is clear to all, it is simply a matter of when the work is done. Once a serious prospect has been identified, getting to a concrete offer with these two steps takes between 2 and 6 months.
Due diligence: – This step includes the operational, legal, accounting / tax portion and the financing. Some dream of delivering everything instantly, but everything takes time, between 1 and 6 months – depending on the preparation period. No matter what banks say, they don’t deliver M&A funding in less than 4-6 weeks. On average most of the time it takes around 2-3 months, especially with the cost slowing down the process.
To conclude, a “normal” sale transaction takes between 9 and 24 months once the mandate has been signed. If we had to take an average, we would have 9 months. We have worked with customers in a hurry, it is possible, we also have cases that require more skill and that involve many complexities…. We will be happy to give you an opinion about you!
And don’t forget…once the sale is finalized, you must think about the transition. If you know you want to retire in 3 years, now is the time to call us.