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In the diligence phase, the buyers you have shortlisted test what the CIM told them. They meet management, review the data room and ask detailed questions, in enough depth to make a final proposal. The phase ends when you sign a letter of intent with one buyer and grant exclusivity. The chosen buyer’s confirmatory diligence, usually more detailed again, continues after that; see Closing.

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What happens

1

Management meetings

You present the company to each buyer, usually using a management presentation we prepare and rehearse with you.
2

Data room opened

Buyers get access to the documents they need to confirm their view of value. Their questions come in through the data room, and we coordinate the answers with you.
3

Final proposals

Buyers submit their final proposals by the date set in the process letter. We compare them on every term that matters, not just the headline price.
4

Letter of intent signed

You choose a buyer and sign a letter of intent. Exclusivity begins: for an agreed period, you negotiate only with that buyer.

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Why the letter of intent matters so much

While several buyers are competing, terms are usually easier to negotiate. Once exclusivity begins, your ability to pursue alternatives is restricted, and any point left vague in the letter of intent is negotiated with one buyer. So we seek clarity on the principal economic terms before that point: price and how it is paid, any earn-out, the working capital target and how it is set, escrow, and the length of exclusivity. See Letters of intent.

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What we need from you

  • Documents for the data room. We send you the full diligence request list and track it in the data room.
  • Prompt, accurate answers. Buyers notice slow or inconsistent answers. When you are not sure, it is better to say you will check than to guess.
  • Consistency. Every number should match what buyers saw in the CIM, or come with an explanation of why it differs.
  • Preparation time for management meetings. A rehearsal makes a real difference to how they go. See Management meetings.

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What can go wrong

An issue buyers find for themselves, such as an unsigned contract or a customer who has given notice, is usually harder to manage than the same issue disclosed by you with an explanation.
Different answers to the same question from different people. We coordinate every answer so the story stays consistent.
Terms left open at signing get negotiated once you have only one buyer. See Letters of intent.
A long exclusive period gives more room for results to move and for issues to be reopened. We aim for a period that matches the buyer’s remaining work, with a timetable both sides can hold to.