How Long Does the Typical M&A Deal Take?

Mergers and acquisitions (M&A) can be a complex and time-consuming process, involving multiple stages and negotiations. As a result, one of the most common questions asked by companies considering M&A is how long the process will take. While the timeline can vary depending on a range of factors, there are some general guidelines that can help companies understand how long a typical M&A deal takes.

As a general rule, an M&A deal will take between 9 to 12 months to close. This timeline includes all three stages of the M&A process: preparation, dating, and closing. However, it is important to note that there can be significant variations in the timeline depending on the complexity of the deal, the readiness of the parties, and other factors.

The first factor is how well prepared the seller is to go to market. This includes the quality of the financial statements, marketing materials, and other relevant records. If a seller is well-prepared and has all the necessary documentation ready, the M&A process can move more quickly. On the other hand, if a seller is disorganized and lacks important documentation, it can significantly delay the process.

Another factor that impacts the timeline is the complexity of the deal. Larger, more complex deals may require more time to negotiate and finalize. For example, deals that involve multiple business units or international operations may require additional due diligence and regulatory approvals.

The readiness of the parties is another factor that impacts the timeline. If the buyer and the seller already know each other and can skip much of Phases One and Two, deals can be speedy. However, if there is a lack of alignment or significant negotiation required, the process can take longer.

While the general timeline for an M&A deal is 9 to 12 months, there are exceptions to the rule. Some deals can happen very quickly if the buyer and seller are already familiar with each other and are able to move through the process more efficiently. For example, at some firms, deals have been completed in as little as 3 1/2 months from start to finish. However, these situations are rare and require a high degree of readiness and alignment between the parties.

It is important for companies considering M&A to work with experienced advisors and have a clear understanding of the process to ensure that they can execute the deal effectively and efficiently. With the right approach, companies can increase the likelihood of a successful M&A transaction that achieves their strategic goals.