Timing of an Acquisition

General timelines are as follows for an acquisition:

Due Diligence: 14 Days to 30 Days

Financing Approvals: 30 Days to 60 Days Depending on Lender and Amounts

Escrow and Closing: 1-5 Days

Depending on how quick you want to move, you should adjust based on the following.

If you want a 100% cash acquisition deal and you want it fast, then you should be asking less than what the market will bear. If you are in an industry where there are generally stingy buyers looking for deals, you want to keep the price as close to the multiple most people are willing to pay. You want to drive interest as much as possible from as many people as possible.

You want to get NDA’s out quick and fast. You want to schedule meetings with as many folks as possible. You want to send off materials ASAP and you want to follow up with these folks right away to generate an offer and draft a purchase agreement quickly thereafter.

If you want to hold out for the right buyer, figure it will take 1 year for a buyer to see everything you have to offer including the intrinsic value. This is generally positioned for a group that is seeking to acquire not the value of the business but for ancillary benefits of the business that can help their current business.

Generally a fast sale does not go hand in hand with maximum priced offers, but it’s all in positioning, and if things are tee’d up right from the start.

If you are conducting a fire sale, you want to price it 15%-25% lower than market value, and you will get serious interest right away and the general rule of thumb is, the more time on the market the less attractive it will appear.

We position the listing and the materials based on how timely the seller needs the sale to be and whether they want 100% cash or are willing to accept money over time.

If you have to move fast, we adjust due diligence, asking price, payment terms, prospectus materials, make NDA’s easy to sign, schedule meetings fast, do blast emails, do more outreach, etc.

We stay up late and get it done for our clients to the best of our ability.

These are tactics we deploy at JARBLY and there are hundreds of details and intricacies like this you want to account for.

Don’t try selling the business on your own.

First, you will get more money when you have a qualified liaison and good negotiator representing you 9 times out of 10. Second, direct contact leaves you to accept other things the buyer wants without experience as to how to properly conduct a sale, transition, earnout, etc. to maximize the deal for you.

You don’t know what you don’t know.

Reach out to us at JARBLY LLC at (800) 773-1523 and acquisitions@jarbly.com. We look forward to working with you.

 

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