How much are the owner, shareholders or senior management involved in a business sale transaction?

The answer to this question is heavily influenced by the importance of those same individuals to the day-to-day operations of the business. If the shareholders/management team (or both) are still leading the business on a daily basis, then they will have to play a central role in any business sale process.

Ultimately it is important to recognise that the transaction process can be a distraction for you as a business owner/manager

The time commitment will fluctuate depending on the various stages of the process. In the initial preparation stage, there are likely to be numerous and time-consuming requests for a wide range of Management Information. Information exchange is crucial in any transaction and populating a Virtual Data Room (VDR) with key business documentation will also require considerable input from the shareholders/management team.

Later in the process, once your M&A advisor is running a competitive sale process to maximise value and terms, your involvement will temporarily drop. However once you enter the negotiation phase with preferred buyers, you should expect to attend a number of meetings with shortlisted buyers/investors. A good M&A advisor should support and guide you through these.

Ultimately it is important to recognise that the transaction process can be a distraction for you as a business owner/manager. At Initium, we often advise that our clients create two teams (where possible), with one focused on working with us to run the sale process, and the second focused on running the business and delivering the business plan.