Sale Process

Last updated: March 22, 2024

What Does Sale Process Mean?

A sale process is conducted by a business broker or investment banker when they are engaged in a sell-side assignment. The sales process is a systematic approach to selling a business, and its primary purpose is to find the most effective way to meet the pre-determined objectives of the seller.

The following types of sale processes can be employed depending on the objectives of the seller:

  • Full auction process – approaching all potential buyers in the market;
  • Limited competitive auction process – approaching a few logical best buyers; and
  • Negotiated sale process – negotiating a transaction with only one party.

Advisory on Sale of Business – Sponsored by Stone Oak Capital Inc.

Click Here for Sell-Side Advisory From Stone Oak


Divestopedia Explains Sale Process

A company owner must weigh the following objectives when determining which sale process is most appropriate:

  • Keeping the sale of the business confidential from competitors, customers and employees;
  • Maximizing the potential sale proceeds; and
  • Finding the right buyers for the business.

Regardless of which type of sale process is conducted, the following stages are typically executed:

  • Analyze and value the company – set the price expectations and understand the seller’s objectives;
  • Develop the marketing material – prepare a confidential information memorandum and a list of potential buyers;
  • Approach potential buyers – manage the flow of information and qualify the buyers. In a full or limited competitive auction, creating competitive bidding is essential;
  • Evaluate offers – assess each buyers’ price, structure, conditions and financial capability to close the transaction; and
  • Execute the transaction – manage the due diligence and finalization of a purchase and sale agreement.


Divestiture process

Share This Term

  • Facebook
  • LinkedIn
  • Twitter

Related Reading

Trending Articles

Go back to top