Selling a Company: 6 Steps from Preparation to Closing
If you are considering selling your company, the first step is not to start looking for a buyer. It is to define what you want to sell, on what terms and how ready the business is for the process. A well-managed sale brings preparation, valuation, investor discussions, due diligence and documentation into a single plan.
This article outlines the process in six steps.
1. Define the transaction you want
A company sale does not always involve transferring 100% of the shares. The transaction may cover a majority or minority stake, new capital invested in the business, or a partial sale by existing shareholders. The founder’s role after closing should also be clear from the outset.
These choices shape the buyer universe as well as the deal structure. A strategic buyer seeking operational control will view the company differently from a fund that plans to grow the business alongside the existing management team.
Shareholders should align early on price expectations, timing and their roles after the transaction. Disagreements that emerge midway through the process can stop a deal even after a credible offer has been received.
2. Prepare the company for sale
A profitable company is not automatically ready for sale. Buyers look beyond the most recent year’s EBITDA and examine the durability of earnings, customer concentration, the depth of the management team, key contracts and cash-generation capacity.
Before launch, financial statements and management accounts should be reconciled, owner-related items separated, net debt established, and material legal and tax matters reviewed. Known risks should be documented together with their financial impact and mitigation plan.
The objective is to understand what a buyer’s review is likely to uncover before the buyer does. This preparation is the basis of reverse due diligence.
3. Establish a value range and prepare investor materials
A company valuation does not produce one indisputable sale price. Discounted cash flow, trading multiples and precedent transactions are considered together to establish a defensible value range. This allows shareholders to test their price expectations against market conditions and compare offers on a consistent basis.
Following the company valuation, the materials used in investor discussions are prepared. Initial outreach is typically made through an anonymous teaser that does not disclose the company’s identity. Investors who remain interested receive a more detailed information memorandum and financial information.
Consistency is essential. If the growth story presented to investors is not supported by the budget and financial results, confidence can weaken at the outset.
4. Approach the right investors through a controlled process
A strong buyer list is defined by relevance, not by the number of names. Competitors, suppliers, customers, private equity funds, family offices and international companies seeking entry into Türkiye may each have a different strategic rationale for an acquisition.
Initial contact is generally made through an anonymous teaser. Once the investor’s interest and ability to complete the transaction have been assessed, a non-disclosure agreement is signed and sensitive information is released in stages. Sale-readiness advisory supports a more controlled flow of information.
Running several credible investors on a similar timetable creates a basis for comparing offers. Approaching unsuitable buyers simply to create the appearance of competition consumes management time and increases confidentiality risk.
5. Compare offers beyond the headline price
Offers should be compared across more than the headline price. Cash at closing, deferred consideration, earn-outs, financing conditions, the exclusivity period, warranties and the founder’s post-closing obligations can materially change the value received by shareholders.
Another important distinction is between the enterprise value shown in the offer and the amount paid to shareholders at closing. For example, an enterprise value offer of 100 may leave 75 for shareholders before transaction costs and taxes after deducting net debt of 20 and a working capital shortfall of 5.
Comparing offers only on the figure shown on the first page can therefore be misleading. Value leakage in M&A often arises during these adjustments.
6. Manage due diligence, documentation and closing
Once a preferred investor has been selected, financial, tax, legal and commercial due diligence begins. The buyer examines the accuracy of the financial results, debt, contracts, tax exposures and the company’s operating model in detail.
The findings may lead to a price adjustment, a request for additional protection or a change in transaction structure. A well-organised data room, consistent responses and centralised issue tracking help the seller retain control of the process.
Once due diligence is complete, the final price and terms are documented in the share purchase agreement. After the required approvals and other closing conditions have been satisfied, the consideration is paid, the shares are transferred and, where applicable, the management transition period begins.
Keep the business on track throughout the sale process
A company sale can absorb a significant amount of management time. Investors continue to monitor current trading after submitting an offer. A budget shortfall, the loss of a key customer or deterioration in working capital may reopen the agreed price for negotiation.
Investor requests should therefore be coordinated centrally while the company’s day-to-day operations continue without disruption. One of the sell-side adviser’s key responsibilities is to manage discussions and information flow so that management can remain focused on the business.
It is useful to appoint a small deal team to coordinate information requests before the process begins. This keeps buyer disclosures controlled, avoids inconsistent responses from different departments and prevents the data room from taking up all of management’s time.
For general questions on timing, confidentiality and transaction structures, visit our Frequently Asked Questions (FAQ) page.
If you are considering selling your company
The right starting point is to assess the company’s sale readiness, indicative value range and relevant buyer universe before approaching the market.
Through its sell-side advisory services, Anatrica Partners manages the process confidentially from preparation and investor discussions through offer evaluation and closing. Contact us if you would like an initial assessment for your company.
This article is provided for general information only. Legal, tax and financial implications specific to a transaction should be assessed separately based on the company and the proposed deal structure.
Author: Taha Berk Deke (M&A Analyst)