1. Preparation

a. Engage M&A Advisors

• The seller retains a professional intermediary such as a Tidewater Business Brokerage M&A advisor, or Business Broker.
• Additional advisors include transaction attorneys, accountants, and possibly tax consultants to prepare for the legal, financial, and tax implications of the deal.
  
  

b. Business Assessment (generally performed by Seller, guided by an Advisor)

• A deep-dive internal review is performed on:
  • Financials (e.g., audited financial statements, forecasts, margins)
  • Operations (e.g., supply chain, facilities, systems)
  • Legal and regulatory matters
  • Intellectual property
  • Market position and customer base
  • Clean-up of financials and legal issues is often performed in advance.
    
    

c. Valuation & Deal Strategy (performed by Tidewater Business Brokerage)

• The advisor performs a valuation using methods such as:
  • Discounted cash flow (DCF)
  • Comparable company analysis
  • Precedent transaction multiples
• Seller and advisor discuss
  • Desired deal structures, timing, and target buyer types.
  • Realistic expectations and perspectives.
  • Strengths and weaknesses of the deal.
    
    

2. Confidential Marketing Preparation

a. Create a Teaser (Blind Profile)

• A one-page document that outlines high-level details of the business:
  • Industry
  • Revenue and EBITDA ranges
  • Competitive strengths
  • Location (general)
• No identifying information is included.
• Purpose: To gauge initial interest without revealing the business.
  
  

b. Create a CIM (Confidential Information Memorandum)

• A detailed, confidential sales document typically 15–30 pages.
• May Include:
  • Business overview
  • Financial history and projections
  • Industry analysis
  • Customer and supplier profiles
  • General culture and operations descriptions
  • Management bios
  • Growth opportunities and risks
• Shared only after a Non-Disclosure Agreement (NDA) is executed.
  
  

3. Buyer Outreach and Qualification

a. Build a Targeted Buyer List

• The advisor identifies a curated list of potential buyers, including:
  • In-house database of accumulated buyers
  • Strategic buyers (competitors, suppliers, customers)
  • Financial buyers (private equity firms, family offices)
  • Cold-call and networking prospects
• List based on compatibility, ability to execute, and fit with the business.
  
  

b. Controlled Outreach

• Teaser is sent to in-house selected prospects.
• National and International marketing is deployed
• Prospective buyers are prequalified
• Interested parties must sign a Non-Disclosure Agreement (NDA) to receive the CIM.
• The seller’s identity is withheld until NDA is signed.
• The process is carefully controlled to limit leaks.
  
  

4. Initial Bidding Process

a. Management Presentations

• Qualified buyers, post-NDA and review of CIM, may be invited to meet the management team.
• These meetings are usually offsite or virtual to maintain confidentiality.
  
  

b. Indications of Interest (IOIs)

• Buyers submit a non-binding letter outlining:
  • Proposed valuation range
  • Deal structure (cash, stock, earnout)
  • High-level due diligence requirements
  • Timeline and rationale for the acquisition
• Seller and advisors evaluate offers based on price, fit, certainty of close, and strategic logic.
  
  

5. Final Buyer Selection and Due Diligence

a. Letter of Intent (LOI)

• One buyer is selected to proceed to exclusive negotiations.
• LOI is non-binding on most terms but may include:
  • Price
  • Payment structure
  • Deal terms
  • Exclusivity period (commonly 30–90 days)
• Signing of the LOI typically begins exclusive due diligence.
  
  

b. Due Diligence

• The buyer conducts an in-depth review of all aspects of the business.
• Includes legal, tax, accounting, HR, environmental, and operational due diligence.
• Managed via a virtual data room (VDR) with strict access control.
• The seller responds to buyer questions and provides documentation.
  
  

6. Deal Structuring and Closing

a. Negotiate Purchase Agreement

• Final terms are negotiated, including:
  • Representations and warranties
  • Indemnifications
  • Escrow or holdbacks
  • Working capital adjustments
• Deal is documented in a Definitive Purchase Agreement (Stock Purchase Agreement or Asset Purchase Agreement).
  
  

b. Closing the Transaction

• Funds are sourced (which may take several months coinciding within the Due Diligence phase)
• Legal and financial closing takes place:
  • Funds are transferred
  • Ownership changes
  • Employees and customers may be informed (often post-close)
• Depending on deal size and complexity, the closing process may take weeks to months.
  
  

7. Post-Closing Transition

• Seller may stay on for a transition period.
• Integration planning with the buyer is implemented.
• Confidentiality may still be maintained temporarily, especially for sensitive deals.
  
  

Confidentiality Measures Throughout

• Use of code names and anonymous identifiers during early stages.
• Strict NDA enforcement.
• Advisors act as intermediaries—seller identity protected until qualified interest is confirmed.
• VDR access is role-based and monitored.
• Internal communication controls to prevent employee leaks.
• Marketing documents are carefully worded to avoid giving away identity.
• Employees or client-list names indicated by numeric expressions
  
  

Conclusion

The traditional confidential sale process in M&A is methodical and deliberate. It relies heavily on professional advisors, legal protections, and tightly controlled communication to protect the business’s value and maintain confidentiality. It’s especially important for businesses where a premature leak could lead to employee loss, customer defection, or competitive threats.