Breaking Down the Sell-Side M&A Process: From Start to Finish

Updated: Jun 30 ‘23 Published: Jun 30 ‘23 22 min read

Even though the value of M&A deals worldwide has fluctuated significantly in recent years, their number is still impressive. For example, in 2022, there were nearly 50,000 M&A transactions worldwide.

The article below explores the M&A sell-side process, describing the main steps and giving tips on how to achieve the maximum value from the transaction.

M&A sell-side process

Defining the sell-side in M&A

The sell-side M&A process refers to the activities and steps involved in selling a company or its assets. It typically includes preparing marketing materials, identifying potential buyers, negotiating terms, and facilitating the transaction on behalf of the selling party.

There are several reasons for a business owner to sell their company:

  • Financial considerations. The sale of a company can be motivated by financial reasons, such as the need to generate cash for other investment opportunities. It can provide liquidity to shareholders and improve the company’s financial position.
  • Financial considerations. The sale of a company can be motivated by financial reasons, such as the need to generate cash for other investment opportunities. It can provide liquidity to shareholders and improve the company’s financial position.
  • Financial considerations. The sale of a company can be motivated by financial reasons, such as the need to generate cash for other investment opportunities. It can provide liquidity to shareholders and improve the company’s financial position.
  • Financial considerations. The sale of a company can be motivated by financial reasons, such as the need to generate cash for other investment opportunities. It can provide liquidity to shareholders and improve the company’s financial position.

Sell-side merger and acquisition strategies

No matter the type of transaction, e.g., tuck-in or bolt-on acquisition, there are typically four ways to organize the sell-side deal process:

Strategy Description Best for
Broad auction

The broad auction process involves a large number of potential buyers participating in the bidding process

Middle market businesses

Limited auction

The limited auction involves selecting a limited group of potential buyers

Larger companies with 10–50 potential buyers

Targeted auction

The targeted auction process involves 2–5 specific potential buyers

Larger companies seeking confidentiality

Exclusive negotiation

Negotiations occur exclusively with a single potential buyer

Companies seeking confidentiality, minimal business disruption, and fast deal closure

Take a look at the pros and cons of each strategy below:

Strategy Advantages Disadvantages
Broad auction

Casts a wide net, attracting more competing bidders and maximizing purchase price


Satisfies owners’ fiduciary responsibility to maximize shareholder value

Potential for information leakage if confidentiality is not properly maintained

Limited auction

A balance between competition and control over the process

A limited number of bidders decreases the potential for higher offers

Better confidentiality

Targeted auction

Targets buyers with a strong strategic fit, increasing the likelihood of a successful deal

May require more time and effort to identify and approach specific buyers

Increased control over the selection of potential buyers

Exclusive negotiation

Greater control over the sell-side M&A process timeline and negotiation process

Lack of competition may result in a lower selling price

Reduced risk of information leakage

Importance of the sell-side in M&A

Based on our experience, these are the key reasons why the sell-side M&A is important in the transaction process:

  • Maximizing value. The sell-side engages in financial analysis and valuation activities to ensure that the company is presented in the most attractive light to interested buyers. Through strategic planning and execution, the sell-side can achieve the best sale price and deal terms.
  • Facilitating the transaction process. The sell-side coordinates due diligence, prepares documentation, negotiates deal terms, and plays a crucial role in managing timelines and ensuring a smooth M&A deal flow.
  • Leveraging expertise. Experienced sell-side advisors bring valuable expertise to the M&A process. They assist in strategic decision-making, deal structuring, and risk management, helping the seller navigate complexities and make informed decisions.

5 steps in the sell-side M&A process

Based on our observations, a typical sell-side M&A process looks much like the following.

Step 1. Preparing for a sale

This step usually includes:

  • Hiring an investment banker. The seller is advised to hire an investment bank specialist as a trusted advisor and intermediary between the two companies.
  • Creating a confidential information memorandum (CIM). This is a marketing document that provides potential buyers with a detailed overview of a business before meeting a selling company in person.
  • Creating a confidentiality agreement. To protect sensitive information and maintain confidentiality throughout the process, all interested parties should sign a confidentiality or non-disclosure agreement.
  • Pitching to potential buyers. The purpose of the pitch is to identify and attract potential buyers and convince them of the value of the opportunity. 

Step 2. Business valuation

Valuation in M&A involves determining the fair market value of the business or asset being sold. The process includes:

  • Gathering financial information. The sell-side collects and organizes the business’s necessary financial information, including historical financial statements and tax records. This information provides a foundation for the valuation and financial analysis for M&A.

Step 3. Due diligence 

The next step is to conduct the due diligence process, which involves:

  • Organizing a virtual data room. The due diligence process begins with the seller creating a virtual data room — an online repository where all relevant information about the selling business is securely stored. The documents are then shared with interested parties.
  • Receiving and evaluating initial bids. Interested buyers submit their initial offers. The seller, along with their advisors, evaluates these bids based on factors such as the offer price, financial terms, strategic fit, and buyer credibility.
  • Conducting management presentations. These presentations provide an opportunity for the selling company to showcase the business, its operations, and growth prospects. During such meetings, buyers ask questions, seek clarifications, and gain a deeper understanding of selling business units.

Step 4. Negotiating with buyers

This step includes:

  • Shortlisting and final bidding. Potential buyers submit preliminary non-binding offers, indicating their interest and proposed terms. The sell-side evaluates the final bids and shortlists the most attractive buyers.
  • Negotiating. The sell-side engages in M&A negotiations with the selected buyers to finalize the deal structure, purchase price, and payment terms.

Step 5. Transaction execution and closing

The final steps are:

  • Choosing a winning bidder. The sell-side enters into an exclusivity agreement with one bidder, which prevents the seller from engaging with other potential buyers.
  • Drafting a sale and purchase agreement (SPA). The sell-side and a legal counsel prepare the SPA —  a definitive agreement that outlines the terms of the transaction. 
  • Closing and post-closing. The sell-side may assist the buyer with the transition and post-merger integration, providing support in terms of knowledge transfer and employee onboarding.

Role of advisors in sell-side M&A

Sell-side advisory typically involves the following specialists:

  • Investment bankers provide financial expertise and deal execution capabilities, helping sellers identify potential buyers, negotiating favorable terms, and maximizing the value of the transaction.
  • Legal advisors ensure compliance with legal requirements, protect the seller’s legal interests, and facilitate the drafting and negotiation of transaction documents. They also help structure the deal, manage legal risks, and provide guidance on regulatory issues.
  • Accountants offer financial insights, perform due diligence, evaluate the financial aspects of the transaction, and help with the M&A financial modelling. They also assess the financial health of the target company and identify potential financial risks.

Among other key players that can contribute to various aspects of the transaction are business brokers, due diligence specialists, tax advisors, valuation experts, industry specialists, and consultants. The best way to find experienced specialists is through M&A advisory firms.

Key tips for a successful sell-side M&A process

There are many reasons why mergers and acquisitions fail. Among them are unclear objectives, strategy and metrics, flawed data, and incorrect analysis.  Drawing on our own experience, we have elaborated universal tips that can help the M&A process from the sell-side:

  1. Prepare a clear business story. Highlight your company’s unique value proposition, competitive advantages, growth potential, and financial performance. This story should resonate with potential buyers and differentiate your business from competitors.
  1. Clean up financials and legal matters. Ensure that your financial statements are accurate, up to date, and audited, if possible. Resolve any pending legal issues, contracts, or disputes to minimize potential obstacles during the due diligence process.
  1. Engage in targeted buyer identification. Choose potential buyers that align with your strategic goals, industry focus, and cultural fit, as proper buyer identification in M&A is paramount.   
  1. Maintain strong relationships with key stakeholders. Maintain transparent relationships with customers, suppliers, employees, and other stakeholders throughout the whole M&A process to minimize any concerns.
  1. Maximize value. Create a competitive environment by engaging multiple potential buyers simultaneously or using an auction process.
  1. Stay focused on running the business. Continue focusing on the day-to-day operations of the business. Maintain business performance and avoid distractions that could affect the company’s value or reputation.

How virtual data rooms can streamline the sell-side M&A process 

An M&A virtual data room (VDR) is a secure online repository used to store and share confidential documents during M&A transactions. Here’s why M&A deal makers should consider using it:

  1. Secure document storage. Virtual data rooms provide a secure and centralized platform to store sensitive and confidential documents related to the M&A transaction.
  1. Controlled access. Virtual data rooms allow deal makers to control access to documents by granting specific permissions to authorized individuals.
  1. Efficient due diligence process. Buyers can access the necessary information in a controlled manner, saving time and reducing the need for physical document exchanges.
  1. Collaboration and communication. Buyers can ask questions, seek clarification, and engage in discussions with the seller’s team, promoting transparency and efficient information sharing.
  1. Audit trail and tracking. Virtual data rooms record document activity, including who accessed the documents, when, and for how long. This provides an additional layer of security and helps monitor buyer engagement.
  1. Global accessibility. Virtual data rooms enable deal makers to access and share documents from anywhere in the world, facilitating smooth collaboration between multiple parties.
  1. Time and cost savings. Virtual data rooms help reduce travel and administrative costs and save time with document management.

You can choose a suitable VDR provider based on your specific requirements and preferences on our main page. There’s information on key features, security measures, and pricing models. There are also customer reviews to learn what others think about each VDR solution. 

Key takeaways

The most important takeaways from the article are:

  • The sell-side process includes steps such as preparing for a sale, business valuation, due diligence, negotiating with buyers, and transaction execution.
  • Sell-side M&A strategies include broad auctions, limited auctions, targeted auctions, and exclusive negotiations, each with its advantages and disadvantages.
  • The key sell-side advisors include investment bankers, lawyers, and accountants.
  • Key tips for sellers include preparing a clear business story, ensuring clean financials and legal matters, identifying a proper buyer, maintaining transparent relationships with stakeholders, maximizing value, and staying focused on running the business.
  • The advantages of virtual data rooms for a sell-side M&A process include secure document storage, controlled access, efficient due diligence, collaboration and communication, audit trail and tracking, global accessibility, and time and cost savings.

Choosing the right provider of file-sharing solutions is crucial in banking and M&A transactions, as it guarantees security, compliance, and confidentiality.


The M&A sell-side process refers to the activities and steps involved in selling a company or its assets, including preparing marketing materials, identifying potential buyers, and negotiating the terms.
The duration of the sell-side M&A process can vary widely depending on factors such as the complexity of the transaction, market conditions, and parties involved, but it typically ranges from several months to a year.
On a sell-side deal, investment banks assist a selling company by providing strategic advice, conducting financial analysis and valuation, identifying potential buyers, facilitating negotiations, and managing the overall transaction process to maximize value and achieve a successful sale.


Marketing specialist at

Elisa is a marketing specialist with 15 years of experience. She worked for many VDR brands and gained insider knowledge of the industry.

At, Elisa conducts marketing research, develops content plans, supervises content teams, and develops VDR review methodology. She envisions her mission as distributing accurate knowledge of virtual data rooms.

“My mission is to deliver accurate and relevant knowledge of virtual data rooms to as many people as possible.”

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