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Navigate the Sale of Your Business in 6 Steps

By David Zawitkowski, Brian Leitstein .

As seen in the South Florida Business Journal

Private equity funds and strategic buyers alike are acquiring companies at record pace. If you’re interested in a sale or liquidity event, then you’ll want to attract strong buyers who are willing to pay top dollar. Partnering with a professional services firm that offers a full suite of transaction advisory services is one way to maximize your sale price. The advisors at Citrin Cooperman, one of the nation’s leading professional services firms, provide a collaborative approach to help you navigate the challenging steps of a transaction.

Step 1: Engage an M&A advisor

When considering a sale process, it is highly recommended to first engage with an investment bank, sell-side M&A advisor, or business broker who knows your industry and the potential buyers. They will help you with initial valuation ideas, help you find buyers, and likely suggest you get started on a vendor due diligence report (VDD).

Step 2: The vendor due diligence report

It is of utmost importance to have your financial information ready for scrutiny before going to market.

A VDD is a presentation of your firm’s financial performance through the lens of a buyer. It focuses on key transaction topics, including normalized EBITDA, net working capital, and debt and debt-like items. A VDD can help you get ahead of any problems or issues hidden inside your firm, whether performance or financially related. It can speed up and simplify the buy-side diligence process and allow you to be in control of the conversation. Getting ahead of potential issues will help if a potential buyer uncovers the same issues during buy-side diligence. You may also choose to fix the problem entirely before moving forward. It is therefore strongly recommended to begin the VDD at least several months before seeking a buyer.

After completing the VDD, we recommend performing state and local tax (SALT) and federal tax due diligence in search of unknown potential tax exposure. Buy-side diligence is comprehensive and does not stop at financial statement inquiries. Having a VDD that includes SALT and federal tax due diligence increases your chances of a successful transaction and can greatly reduce the risk of deal-breaking surprises.

Step 3: The business valuation

Once you’ve completed your VDD and tax diligence, a valuation specialist can provide you with an opinion as to the fair value of your firm. They will use the VDD to help you determine what your firm is worth. Having a fair value opinion can help you better evaluate the many offers you may receive from interested buyers.

Step 4: Defend against buy-side diligence

Now that you picked a buyer that’s best suited for you, you will sign a non-binding letter of intent (LOI) and begin buy-side diligence. Buy-side diligence can be strenuous, especially while you run your business. However, your VDD will act as the first line of defense against buy-side diligence requests and financial-analysis inquiries. You can use the documentation gathered for your VDD to satisfy buy-side due diligence requests as many items are often the same.

Step 5: Merger and acquisition (M&A) tax structuring

While your non-binding LOI will stipulate the general tax structure of the transaction, any number of things (identified during financial diligence or elsewhere) can cause your transaction structure to change. M&A tax structuring specialists and your legal counsel will allow you to quickly navigate a new, and potentially complicated, transaction structure.

Step 6: Purchase agreement

During this final stage of your transaction you will want to read applicable sections of your purchase agreement and the disclosure schedules for consistency with your VDD findings and propose any adjustments to your counsel. After reaching mutual agreement, the document can be signed, and the deal is closed.

Alternative outcome

If your transaction does not consummate, do not worry. Before finding your next potential buyer, you have the opportunity to streamline operations, upgrade your IT, increase profitability and improve the speed and quality of your financial reporting. In fact, these improvements can alternatively be made ahead of your VDD report. Private equity firms and large strategic buyers love data and technology. The faster you can produce high quality monthly data, the more attractive your firm will be to potential buyers.

If you have any questions about selling your business, transaction advisory services, or the other services mentioned in this article, please reach out to Citrin Cooperman’s Transaction Advisory Services Practice or contact David Zawitkowski at or Brian Leitstein at

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