The Course of a Company Sale: From Preparation to Closing

You do not sell a company on the side. A professional sale process (M&A process) follows a clear sequence — and it is precisely this structure that protects value and negotiating position. Whoever knows the course makes better decisions and avoids the typical mistakes.

1. Preparation and groundwork

Before any approach comes preparation: preparing the figures, formulating a sound equity story, reducing dependencies and ordering the documents for a later review. A well-prepared company not only achieves a better price — it also gets through the process faster and more securely. Often an anonymised short profile (teaser) and a more detailed information memorandum for serious parties are created here.

2. Valuation and strategy

What is realistic — and what is the goal? Full sale, partial sale or an investor on board? The valuation provides a corridor (net asset value, income value/DCF, market multiple); the strategy determines which buyer types are approached: strategic buyers from the sector or financial investors.

3. Buyer approach — discreet and curated

Now suitable buyers are identified and contacted confidentially — secured by a non-disclosure agreement (NDA). Discretion here is not a matter of style but of protecting value: if a sale becomes known too early, it unsettles employees, customers and suppliers. Rather than broad scattering, a curated selection of the right counterparties is the better route.

4. Letter of intent (LOI)

Serious parties submit an indicative offer. With the most promising one a letter of intent (LOI) is agreed: it sets out the key points — price expectation, structure, timeline, exclusivity — before the in-depth examination.

5. Due diligence

The buyer examines the company carefully: finances, law, tax, contracts, personnel, sometimes technology and market. Here the preparation from phase 1 pays off — clean documents build trust and prevent subsequent price reductions.

6. Negotiation and purchase agreement (SPA)

In parallel or subsequently, the purchase agreement (share purchase agreement, SPA) is negotiated. It governs not only the price but also warranties, liability and the structure — for instance an earn-out, in which part of the purchase price is tied to future development.

7. Closing and transition

With signing and fulfilment of the agreed conditions, the transaction is completed (closing): ownership and purchase price change hands. The orderly transition follows — knowledge, customer relationships and responsibility are handed over.

How long does it take?

From preparation to closing, six to twelve months often pass — depending on complexity, the buyer search and the depth of the review. Whoever starts early and well prepared shortens the process and strengthens their own position.

Frequently Asked Questions

What is the difference between a strategic buyer and a financial investor? A strategic buyer pursues operational goals (market, products, synergies). A financial investor invests for returns, often with a growth and exit perspective. Both can be the right partner.

What does earn-out mean? Part of the purchase price is paid contingent on success, tied to the company's future development.

How do I preserve discretion? Through anonymised outreach, NDAs and a curated, small selection of buyers rather than broad market approach.

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A company sale is the most important transaction of an entrepreneurial life. Have it accompanied independently and discreetly — IGCP Capital Partners. → igcp.at

How does selling a business work?

In five steps: preparation and valuation, approaching interested parties, due diligence, negotiation, and signing and closing.

How long does selling a business take?

Usually six to twelve months. Details in how long does it take to sell a business?.

What is the first step in a sale?

A robust valuation and the preparation of clean documents — they are the basis for the entire process.

Do I need an M&A advisor?

A structured process with several bidders usually lifts the price well beyond the advisory fees. See what does an M&A advisor cost?.