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How Long Does it Take?

We are often asked to give an estimate of how long it will take to sell a business. This is a common and reasonable question. We briefly covered “How Long Does a Sale Take” in Deal Note® #62 published last year. In addition to total sale process timing, this summary will explain the average time in different phases of the process.

When asked, the first thing we say in response is that every engagement is different and many exogenous factors can have a substantial impact on timing, from when the company’s audited financial statements will be finalized, to unexpected and significant changes in world events, such as pandemics. The second thing we say is that a sale “typically takes around 8-9 months”. But there is a lot more to the story.

Over the past 23 years, we have gathered substantial data regarding the exact time it takes to sell a middle-market aerospace and defense company, and the time required to accomplish each key milestone. With more than $2.6 billion worth of transactions over more than 60 engagements, there is a lot more to the story than a simple “around 8-9 months.” Here is a sample of some of this timing data, in approximate and summary form:

  • Prepare the Confidential Information Memorandum (“CIM”): 2.5 months
  • CIM to Indication of Interest (“IOI”): 1.5 months
  • IOI to Letter of Intent (“LOI”): 1 month
  • LOI to Closing: 3 months

If you are considering selling, and are well prepared in key areas such as financial controls and reporting, then it is reasonable to assume that a sale can be consummated in approximately 8 months from the date you retain an M&A Broker.

Have a great day everyone,

Ryan Kirby
Junior Partner