Topic 8
How Long Will It Take to Complete the Deal?
Deals take time to complete, often longer than you think or plan for. The issue is issues! Topic 8 explores what to expect and the timelines to expect.
DEAL ISSUES TAKE TIME
- Deals will take as long as it is necessary to discover and resolve the issues pertinent to the deal.
- All deals have issues, and issues take time.
- Plan on 60 to 90, possibly 120, days from receipt of prospectus (or equivalent) to cycle through preliminary due diligence and valuations to a finally agreed value on negotiated deals. Auctions are generally much shorter. (See Topic 12.)
- Plan on 60 to 90, possibly 120, days from agreement on value to closing on a typical negotiated deal. Auctions are generally much shorter.
- As an acquirer, do not be rushed.
- Sellers or auction bosses will push to tighten up the timelines.
- Buyers must run all the traps to ensure adequate risk identification.
- Rush but do not be rushed.
- Tell auction bosses or sellers you are in a rush to do it right but will not be rushed to do it.
- Required preclosing filings with governmental agencies to assure compliance with anticompetitive regulations can take considerable time and push out closings. Filings are required in the United States under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, depending on various considerations. As of February 2011, for transactions that close after that date, filings are required if:
- Buyer's or target's sales and or assets exceed $131.9 million and ...
