< Back to News & Views

GUEST POST: SALE or CAPITAL RAISE TIMELINE: 3 Months to Close

by Prem Williams, Nikey Parikh, Trevor Menscher from “CFGI” Finance and Accounting Experts April 26, 2024

A Capital Seeker’s understanding of the financial due diligence timeline can significantly help them prepare for a sale or capital raise. By becoming familiar with the timeline, they gain key insights on how to create efficiencies, develop an understanding of the data requirements and deliverables, and start to visualize the impact of the transaction. As well, it helps key stakeholders, including management, investors, and potential buyers anticipate milestones or roadblocks, so you can allocate resources effectively and ensure a smooth transaction process.

The timeline included below is for illustrative purposes and may vary based on the complexity of the transaction.

ILLUSTRATIVE SELL SIDE FINANCIAL DUE DILIGENCE PROCESS TIMELINE

Weeks 1-4Capital Seeker’s usually engage a sell-side diligence team, who will conduct preliminary discussions with management, analyzes financial data, and prepares a preliminary findings deliverable. Simultaneously, your investment advisor may create an investment teaser for external parties.
Weeks 5-6A due diligence deliverable is shared with the seller and selected potential buyers, along with a confidential information memorandum.
Weeks 7-10Involves management meetings with potential buyers, and detailed discussions between buyers and the sell-side diligence team. By involving a sell-side diligence team, it streamlines the due diligence process and reduces management’s burden in explaining financial information.
Weeks 11-13The sell-side diligence team assists the seller in negotiating the net working capital target and financial information related terms outlined in the purchase agreement. As well, they provide support for any ad-hoc analysis required to help the seller close the transaction.

The finance and accounting experts at CFGI have extensive experience performing sell-side due diligence and helping organizations make financial decisions that put them on a track to lasting success.

If you’d like additional information on sell-side due diligence, accounting/close support, or have questions and thoughts to share, please email pwilliams@cfgi.com, nparikh@cfgi.com and tmenscher@cfgi.com 

Contact Us:

Deer Isle Group

info@deerislegroup.com

———–

Founded in 2007, Deer Isle is an innovative investment bank that equips capital market participants with the tools they need for transparent, seamless, and efficient capital markets transaction success.

Since our inception, we have facilitated over $5 billion in capital transactions through Deer Isle Capital, LLC—our FINRA-registered broker-dealer—for companies and funds across various security types, sectors, and geographies.

At the core of our approach are effective, unbundled capital solutions, offering expertise and guidance that can be customized to meet each client’s unique needs. Our services, available on an "as-needed" basis, include:

  • Strategic Capital ConsultingTM (“Outsourced Strategic CFO services, Deer Isle Executive Management/Board Bootcamp or Sprint”) to prepare for a capital or M&A transaction leveraging the Deer Isle proprietary AI enhanced 4 pillar capital framework and real-world experience.
  • Beacon (“Proprietary Technology”) offers White-label and Turnkey Capital Provider engagementwith customized content and data analyticsfrom a relevant subset from a universe of 17,000+ institutional (fiduciary) capital markets organizations/50,000+ institutional capital market people.
  • Closing Advisory/Guidance (including “Shepherding”) expertise, through Deer Isle Capital, for structuring, negotiating, and completing a successful capital/M&A transaction.