Phase four of four
Close the sale of your business
Closing the sale of a business is phase four of four: diligence and the quality of earnings review, definitive agreements negotiated by every legal team, and the conditions cleared before the wires go out on the day of closing. The deal team manages diligence and coordinates your attorney and CPA, so you can keep running the company.
Signing to the wire: seven to twelve months. Every time given here is an estimate drawn from past engagements, not a commitment. Each sale runs on its own calendar, set by how ready and how complex the company is, by the buyers and their lenders, and by the lawyers on both sides. We set a calendar with you at kickoff and revisit it as the process moves. The sale, phase by phase
The stretch
What happens after the letter of intent is signed?
Diligence and the buyer's quality of earnings review, the definitive agreements drafted against the letter, disclosure schedules, and the conditions cleared before funds move; how long that takes depends on what diligence finds, the buyer's financing, and the lawyers on both sides. The buyer now reads everything, the lawyers draft, and your job is to keep the business on plan. A missed quarter during diligence is the most common reason deals get re-priced.
- We manage the diligence list and keep your attorney and tax advisors coordinated.
- You are asked for documents and decisions, and we aim to keep that to a steady, bounded share of your week.
- The goal is simple: the deal you signed is the deal that closes.
- SigningLetter of intent and exclusivityThe terms are agreed in principle and the buyer has the business to itself. Your leverage is at its lowest from here, so the terms that matter were settled before this point.
- NextThe diligence request listThe buyer sends its list. We answer from the diligence file built in phase one and keep the questions in one place.
- AlongsideLegal draftingThe lawyers draft the purchase agreement against the letter of intent. We hold the line on what was agreed.
- AlongsideDisclosure schedulesEverything that departs from the agreement's statements is written down. A disclosed issue is a priced issue; a surprise is a re-trade.
- LateConditions clearedConsents, the working capital peg, and the closing documents are agreed and signed off.
- CompletionFundsThe funds flow is confirmed and the money moves.
Timing is indicative and varies by deal.
Conditions to completion
What has to happen before a business sale closes?
Seven conditions are cleared first: diligence closed out, disclosure schedules agreed, the required consents, the working capital target, employment and non-compete terms, escrow and any holdback, and funding confirmed. A signed agreement is not a closed deal.
- Diligence closed out, with the buyer's quality of earnings review settled
- Disclosure schedules agreed
- Consents from landlords, lenders, and key customers where the contracts require them
- The working capital target set
- Employment and non-compete terms signed
- Escrow and any holdback documented
- Funding confirmed
When a condition slips, the date slips with it, and a buyer with time on its side asks for something in return. We track each one weekly, so a late consent is raised early and not discovered at the table.
Questions
Questions owners ask once a deal is in diligence
It is the level of working capital the buyer expects the business to hand over at closing. If the business delivers less, the price goes down; if it delivers more, it can go up. Agree the number carefully, because it moves what you take home.
Part of the price is held back for a set period to cover claims the buyer may make after closing. It is real money you do not yet have, so it belongs in the comparison of offers on take-home, not headline.
The defense is what was done in phase one: the issue was fixed or disclosed on our terms before the buyer found it. A retrade, the buyer asking for a lower price after the letter of intent is signed, usually follows something diligence found.
That is decided with you deal by deal, because it depends on who the buyer is and what the agreement requires. We agree the order and the wording before anyone outside the deal team is told.
Funds move at completion, on the day of closing, once the conditions are cleared, and how long that takes depends on what diligence finds, the buyer's financing, and the lawyers on both sides. Any time we give is an estimate, not a commitment, and we will give you a timetable for your deal once the letter of intent is in hand.
Both leave part of the value in the future. A seller note is paid over time by the buyer. Rollover is equity you keep in the new company, illiquid until a later sale. Each changes what you receive at close, so we model them before you accept an offer.
A founder on the close
A founder, in their own words, from the owner's side of the table.
Joe Seehey CEO, Cured Nutrition · Colorado
Bring us the letter of intent
We will walk the conditions, the diligence list, and the timetable with you, and tell you where the risk sits before the buyer finds it.