What Really Happens During an M&A Sale Process

Derek Bobbitt | Associate

February 23rd, 2026

Key Takeaways

• A disciplined sale process materially impacts valuation and terms

• Most middle-market transactions require ~6 months to execute properly

• Preparation, positioning, and competitive tension drive premium outcomes

What Business Owners Should Know About the M&A Process

From the outside, selling a business can appear straightforward: find a buyer, negotiate a price, then sign the paperwork. In reality, strong outcomes are engineered long before the final offer arrives.

Behind every premium valuation is a controlled process designed to surface the right buyers, shape their perception of the opportunity, and maintain leverage through closing. Without that structure, even exceptional businesses can trade at ordinary valuation multiples representing millions of dollars in lost value or fail to transact at all.

For owners who have spent decades building something valuable, understanding how the process actually works is essential.

Why A Competitive M&A Process Matters

Many owners receive inbound from individual strategic acquirers or from firms sourcing deals they can send to private equity firms for introductory fees. Unfortunately, we’ve seen many buyers go through a process with the first firm that reached out to them and convinced them it was a good deal, only to find out later that the buyer’s offer was significantly below where valuation multiples were in the market.

Without running a full process, sellers often encounter:

• Expanding timeline creep and deal fatigue that erodes momentum

• Buyers negotiating from a position of leverage

• Late-stage diligence discoveries that reduce value

• Deals that drift from attractive to merely acceptable.

A structured process reverses this dynamic. It creates urgency, competition, and clarity – the conditions under which buyers pay full value.

The 6-Month Middle Market M&A

While every company is unique, most professionally managed transactions follow a similar progression:

Phase 0: Laying the Groundwork

Before any buyer is contacted, substantial work occurs behind the scenes.

• Marketing Materials: Buyers don’t pay for history – they pay for future cash flows. The teaser shows just enough information to determine if a buyer would be interested, and the Confidential Information Memorandum (CIM) translates your company’s information into a 40-50 page diligence-ready presentation.

• Buyer selection strategy: The highest-probability buyers are not always simply the largest or most obvious. They are the parties for whom the acquisition meaningfully changes their own trajectory or has a competitive edge that can accelerate the future growth of the target business.

• Pre-Diligence: Addressing weaknesses before buyers discover them preserves credibility and negotiating leverage.

Phase 1: Going to Market

Once marketing materials and buyer lists are complete, marketing outreach begins. A broad but targeted process typically involves reaching out to hundreds of potential strategic and financial buyers.

The goal is to maximize the competitiveness of the process by reaching out to multiple buyers, while also ensuring that each buyer has a serious interest and ability to acquire the business, in order to protect confidentiality. This can be extra sensitive when the buyer is a direct competitor, and extra steps can be taken to protect the client in outreach. When an investment banker sends a teaser, it is blinded, which means we use a codename for the company and aim to make it so that even industry experts can only narrow it down to a dozen or so potential companies.

Key priorities during this phase:

• Buyer outreach and NDA processing

• Distribution of teasers and CIMs

• Early Q&A that signals buyer seriousness

• Preparing core team for management meeting presentations

By the end of this phase, interested buyers will present an initial offer in the form of an indication of interest (IOI). IOIs are evaluated not only on valuation, but also:

• Transaction structure

• Certainty of closing

• Funding sources

• Cultural alignment

• Post-transaction vision for the business

Once IOIs have been reviewed, the client works with their advisor to select those with sufficiently interesting offers to move to the second round.

Phase 2: Management Meetings

Once buyers advance, they typically receive data room access containing key financial, operational, and legal materials (e.g., customer concentration analysis, major contracts, leases, and monthly financials). Buyers will complete further diligence and advisors will organize slots for them to travel and meet with management.

Management meetings are often the defining moment in a process – they shape buyer conviction, reveal synergies, and influence who becomes aggressive in the final round. These meetings are typically followed by a facility tour. We’ve frequently heard from our clients that it was the most influential moment for deciding who their final acquirer would be.

By the end of this phase, finalists submit a Letter of Intent (LOI). Once signed, the LOI typically grants the chosen buyer exclusivity (often 45-60 days, but can range from 30-90), during which the seller pauses dialogue with other interested parties. Because buyers often incur significant third-party diligence costs (frequently six figures across tax, legal, and financial workstreams), exclusivity is customary in the final stage.

Phase 3: Final Stretch to Close

This is the most delicate period, as leverage shifts from the seller to the buyer. Even well-intentioned buyers may attempt to renegotiate once exclusivity removes competitive pressure or if items they missed in diligence surface. Maintaining momentum and discipline becomes critical. An experienced advisor will have done their best to get everything on the table before the LOI is signed to limit the negotiating needed in the closing process, and will hold firm to ensure that the final purchase agreement respects the terms of the LOI.

Key areas of focus:

• Detailed confirmatory financial and legal diligence

• Working capital peg and true-up mechanics

• Negotiation of definitive agreements

• Alignment on post-closing responsibilities

If no glaring diligence items surface and momentum is maintained through the final closing date, it is very likely the deal will close post-LOI.

Can the M&A Process Move Faster?

Occasionally. Some buyers pursue pre-emptive offers or accelerated timelines to differentiate themselves from their competition. However, the speed that comes with limiting the buyers that engage in the process typically comes at a cost: reduced optionality, lower valuations, and diminished negotiating leverage. For most owners, a deliberate process produces materially better outcomes than a “quick and quiet” transaction.

Final Perspective: Don't Just Sell, Run a Process

For many founders and business owners, a sale is the single most consequential financial event of their lives. It is also an emotional process, where owners weigh financial outcomes alongside legacy, employees’ futures, and the next chapter of their own lives. A well-run process protects not only value, but optionality and peace of mind.

Owners considering a transaction within the next 12–24 months often benefit from an early, confidential perspective on how buyers will evaluate their business and where preparation creates leverage months or even years before the process begins.

If you are exploring options, curious about valuation, or simply want to understand what a process could look like for your company, we are always happy to share our perspective if it would be helpful.

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Merrimack Group is a boutique investment bank focused on technology and manufacturing companies, with deep experience in the lighting and fabrication sectors. Our team advises business owners across the globe on complex transactions, and has completed over 30 transactions totaling over $1 billion in transaction value.