Current exit time to sell a business

September 18, 2023

by a searcher from Widener University in Jefferson Township, PA, USA

What is the current average exit time (start to finish) of selling a business? I'm primarily in the digital marketing space. I know what brokers are saying, but I'm interested to hear what others are seeing in the market at this point in time. Thank You.

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Reply by an intermediary
from University of Missouri in Kansas City, MO, USA

Hello, Thomas, it often depends on deal size. Small deals can often close faster. However, industry studies seem to consistently indicate that from the time you sign an engagement letter with a broker or investment banker to sell a company, it is 6 to 9 months before the deal closes and the wire transfer hits the bank account. 6 months is extremely fast. 9 months is the norm but in my discussions with other investment bankers and brokers, the 9-month number seems to be creeping towards 10 to 12 months in many cases. For buyers, there is increasing difficulty getting financing in place which extends the time frame. Also, depending on deal size, most buyers who enter an LOI to buy a company expect to get 90 days of exclusivity to complete their diligence, draft contracts and secure financing. That's a major factor in the 9-month total time frame. I hope that is helpful for you.

Reply by a searcher
from North Carolina State University in Raleigh, NC, USA

You may have done this already but can get some general background timeframe for your industry by looking at similar comps in the BVR transactions database, for those with Time to Sell data listed. Obviously this is not selling a commodity, so high level of variance depending on deal specifics, but at least gives you some reference points along with the other corresponding comp data.

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