Getting your finance function ready for a sale
Sell-side processes move fast. What buyers, bankers, and diligence teams will ask finance for, and how to prepare before the process starts.
When a company goes to market, the finance team becomes one of the most important parts of the process. Investment bankers, buyers, and diligence providers all need information quickly, and gaps in the numbers can slow a deal or reduce the price. Preparation starts well before the banker's kickoff call.
Clean, consistent historical financials
Buyers look at several years of monthly results. They need consistent accounting policies, reconciled balance sheets, and revenue recognized the same way throughout. Restating history in the middle of a process is costly.
A clear adjusted EBITDA story
Most deals are priced on adjusted EBITDA. Every add-back, such as owner expenses, one-time legal costs, or a closed location, needs documentation a diligence team can test. Weak support for add-backs is one of the most common ways value gets lost.
Detail by location, customer, and product
Expect requests for revenue and margin broken down every way a buyer can think of. If your systems can't produce that detail quickly, start building the data now.
A forecast you can defend
Buyers pay for the future. The management forecast should connect to historical trends and operating drivers, with assumptions that hold up when questioned.
Organize the data room early
- Monthly financials and trial balances
- Debt agreements, leases, and major contracts
- Payroll and headcount detail
- Tax returns and correspondence
- KPI history
Protect the day job
A sale process can consume a finance team. Bringing in interim or project help for the data room, the quality-of-earnings work, and diligence questions lets the regular team keep closing the books on time, which buyers also notice.