Written for boutique investment bankers and M&A advisors. Some content applies to founders running their own processes; mostly assumes professional banker management.
The 5 phases of a sell side process
Sell side M&A process: kickoff to close
The phases overlap. Phase 2 marketing continues during Phase 3 LOI negotiation if there are multiple bidders. Phase 5 closing prep begins during Phase 4 diligence.
Pre-sale planning and prep
The 4 weeks between mandate signing and going to market. Most underrated phase. Bankers who skip prep work pay for it later in retrade leverage and timeline slippage.
- Banker due diligence: review seller financials, operations, contracts, identify QofE issues to clean up vs disclose in CIM
- Sell side QofE consideration ($25K-$50K spend, often pays back many times over for $20M+ deals)
- CIM and teaser drafting (3 to 5 rounds of seller review)
- Buyer universe development (30 to 80 names typical for LMM auction, split strategics vs PE)
- Process letter, NDA template, data room initial setup
- Slow seller decision making on CIM (founders agonize on positioning)
- Surprise findings in banker due diligence (undisclosed customer concentration, related party transactions, pending litigation)
- Buyer universe disputes (seller wants to exclude certain buyers)
Marketing the deal
6 weeks where the deal goes to market. Buyers receive teaser, sign NDAs, get CIM, evaluate, submit IOIs.
- Teaser distribution to 30 to 80 buyers
- NDA collection (60 to 80% of universe typically signs)
- CIM and Phase 1 data room access
- Management presentations for top 10 to 20 buyers
- IOI collection on a 4 to 6 week deadline
- Shortlist 3 to 6 buyers for second round
- Phase 2 data room access (full financials, anonymized customer concentration)
- Low IOI response rate (only 5 of 30 buyers respond)
- Soft IOIs with wide valuation ranges or heavy contingencies
- Confidentiality breaches (a buyer mentions the deal to a non-NDA party)
- Management presentation logistics (remote sellers, international buyers)
LOI negotiation
4 weeks where shortlisted buyers submit LOIs and the seller chooses one for exclusivity.
- LOI submission with specific purchase price, deal structure, working capital peg, escrow, indemnity caps, exclusivity period requested, financing source
- LOI evaluation side by side (best LOI is rarely the highest price; certainty of close matters more)
- LOI negotiation on working capital definition, escrow size, exclusivity terms, breakup fees
- Seller chooses LOI, signs exclusivity (typically 60 to 120 days)
- Buyers slow on LOI submission (1 to 2 week slip common)
- LOI structure disputes (working capital arguments alone can extend Phase 3 by a week)
- Seller indecision when two LOIs are close on terms
Exclusivity and diligence
8 weeks of exclusive diligence with the chosen buyer. Longest phase. Where deals slip and retrades happen.
- Buyer financial diligence (QofE provider analyzes financials, identifies EBITDA add backs)
- Buyer commercial diligence (customer calls with seller permission, market position validation)
- Buyer legal diligence (contracts, litigation, IP, regulatory review)
- Buyer operational diligence (operations, IT systems, HR, supply chain)
- Definitive agreement drafting (multiple rounds with seller counsel)
- Disclosure schedules (200+ items on a complex deal)
- Working capital and net debt true up estimation
- R&W insurance underwriting (if applicable)
- Lender consents (kill more closings than any other legal issue)
- QofE timeline (4 to 6 weeks standard; finds issues that prompt retrade conversations)
- Disclosure schedule disputes (each disputed item adds time)
- Lender consents (start week 1, not week 6)
- Working capital disputes (most common, 2 to 4 weeks back and forth)
- Customer concentration discoveries from commercial diligence
Close and post close
Final 4 weeks. Final preparations, signing, closing, and the transition that follows.
- Final purchase agreement (last round of negotiation)
- Closing checklist execution (wire instructions, funds flow, closing certificates)
- Stakeholder communications (employees, customers, regulators)
- Closing day (documents signed, funds wired, title transferred)
- Post close immediate priorities (buyer takes operational control)
- True up calculations (working capital, net debt)
- Post close adjustments and integration support
- Last minute legal disputes discovered in week 22 or 23
- Wire instruction confirmation slip
- Lender funding delays
- Stakeholder notification disputes
What this means for sell side advisors
Three implications:
Set 26 week expectations with the seller upfront. Bankers who promise 4 month close timelines and deliver 6 month closes lose credibility. Bankers who set 6 month expectations and close at 5 build trust.
Build the timeline assuming 4 weeks of QofE delay. QofE in 2026 is standard on $10M+ deals and adds 3 to 4 weeks. Build it in.
Plan parallel work streams. Lender consents in week 1 of Phase 4, not week 6. Insurance quotes ready before LOI signing. Disclosure schedules drafted in parallel with diligence, not after.
The compressed timeline (when 18 weeks works)
Some deals can close in 18 weeks. Conditions:
- Clean financials (no QofE add back disputes)
- Single buyer process (negotiated, not auction)
- No regulatory consent requirements
- No senior debt (all equity buyer)
- No customer concentration concerns
When all conditions hold, Phase 2 marketing collapses to 2 weeks (single buyer), Phase 4 diligence collapses to 4 to 6 weeks, total is 16 to 18 weeks. This is the exception, not the median.
Sell Side M&A Closing Checklist
The full punch list of activities to execute in Phase 5 (and avoid the closing day surprises that delay deals). Built for LMM deals where the seller does not have a deal team of 8 lawyers checking each other.