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How long does it take to sell a business?

One of the more common questions we receive from potential clients looking to sell their business is how long the process will take. Clearly, once a business owner has committed to selling, they want the sale to be completed as quickly as possible. The sooner they can get their hands on those sale proceeds the better.

So, how long does it take to sell a business?

To try and answer that question, let’s look at a recent, real-world example: Telstra’s acquisition of cybersecurity consultancy Versent.  The Melbourne-based business, which offers blue chip clients leading-edge cybersecurity products and advice, was bought in October for $267.5m.

Telstra beat out Japan’s NTT, one of the world’s largest telecoms companies, to walk away with the prize. It’s not a bad pay day for the company’s founders, Thor Essman and James Coxon. That is despite early media coverage suggesting a possible sale price closer to $500m.

Now, you would think Telstra could wrap up that sort of transaction fairly quickly, right? For Telstra, with a market cap of around $45b, a $267.5m acquisition may not be quite chicken feed. However, it’s not exactly betting the farm either. And given all their M&A experience and office floors of lawyers and accountants and other experts, it should have been a quick deal.

Actually, not. According to the Australian Financial Review, the deal took at least a year to get done.

The first media reports surfaced in September 2022 that Versent had appointed an investment bank to explore a transaction. If the company appointed an investment bank in September of that year, it’s fair to assume the initial decision to sell the company was taken by Versent’s board at least a month or two prior.

It was then in May 2023 that there were reports that the company’s IM was finally in the hands of interested parties. That suggests that between September 2022 and May 2022, the company’s bankers were both busy preparing the business for sale and also having early, “exploratory” discussions with potential suitors.

The media reports also indicated that indicative bids were due in early June. That suggests that it took a further five months from receipt of those indicative bids for Telstra to be declared the eventual winner. Japan’s NTT formerly dropped out of the race around October 9.

That’s five months for due diligence, negotiations, final bids and closing. So, let’s look analyse that timeline in a little more detail.

We estimate Versent formally decided to put the business on the market in or around August 2022. The business finally sold in October 2023. That’s a sale process of 14 or 15 months. Now, in our experience that is probably slower than usual. However, a 12-month process is certainly not unreasonable.

As we often say to a client, if you get a deal done within 12 months, you have done well.

Particularly for smaller businesses, one of the things that commonly slows the process down that is entirely under the owner’s control is preparation. Many weeks or even months can be spent securing vital information and getting a business’ house in order. For more information on preparing a business for a sale, click here.

To discuss how CFSG can assist you in selling your business, please don’t hesitate to contact us.


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