A sell side process is designed to make several buyers bid at the same time. Everything about its shape, the phased approach, the deadlines, the two rounds, exists to prevent the situation where one buyer negotiates against nobody. Knowing the stages tells you when your leverage is highest.
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Preparation and approach
Four to eight weeks assembling the earnings, the adjustments and the information document, and building the buyer list. Then a phased approach: a short anonymous teaser, then the full document to those who sign a non disclosure agreement. Nothing is public and nothing is rushed, because a buyer contacted before the file is ready reads an unfinished business.
First round, meetings, second round
Indications of interest by a deadline, so offers can be compared rather than accumulated. Management meetings with a shortlist. Then final bids, usually with a markup of the purchase agreement attached, which is where a buyer's real intentions about warranties and escrow become visible. Your leverage is at its maximum here.
Exclusivity to closing
One buyer is chosen and given exclusivity, and leverage moves to them. Diligence and drafting run in parallel for two to four months. The work at this stage is holding the buyer to what they said, which is the part of the job that justifies an adviser's fee if anything does.
Questions people ask about sell side M&A process
How long does the whole process take?
Six to nine months for a well prepared business, with diligence the most variable stage.
Why two rounds?
To keep competition alive as long as possible. A single round collapses to one buyer immediately and hands them the timetable.
When should I ask for the purchase agreement markup?
With final bids. A buyer's markup tells you more about the deal you will actually get than their headline number does.