Selling a Business — Stage 5: Diligence
Where deals get re-traded
What's actually happening
The buyer's accountants and lawyers have descended on your business. They are requesting years of historical data, reviewing every employee file, and challenging your customer concentration. They are looking for reasons to lower the price.
Where your broker is right now
They have gone quiet. They are acting as a post office, forwarding endless request lists from the buyer to you. When the buyer finds an issue and demands a price reduction, your broker will likely tell you to be reasonable and accept it to save the deal.
What this costs you if it goes wrong
The 're-trade'. Buyers routinely use diligence findings to demand hundreds of thousands of dollars in price reductions. If you can't defend your numbers with precision, you will concede the money.
What I'd be doing here
I sit between you and the buyer's diligence team. I translate their requests, help you gather the data safely, and aggressively push back when they attempt to use normal operational realities to justify a price reduction.
Related Insights for this Stage
The terms that didn't make it into the agreement
The email chain where you and the buyer agreed to something is not a backup copy of your deal. If a term didn't make it into the purchase agreement, it isn't part of the transaction.
What a quality of earnings report can do to your deal
An adjustment to EBITDA doesn't cost you the adjustment. It costs you the adjustment times the multiple — and it arrives while you're in exclusivity.
Are you in this stage right now?
If you are navigating diligence and need a second set of eyes on the details, let's talk.
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