Documentation required in the purchase and sale phases of a company

As specialists in companies’ sales, we can help you understand the key documents you need in each phase of a sale

A company sale and purchase operation is undoubtedly a complex process that requires a team of consultants specialized in the company’s activity sector. Below, we detail the main phases of a company’s sale process and the necessary documentation for each of them, giving the key details on each of these stages.

Next, we will analyze the different documents necessary within each stage of the sale of a company:


Strategic analysis of alternatives.

The first step when deciding that a company is going to be sold is to analyze which process we want to carry out and carry out an analysis of it, as well as of the company to be sold.

Once you decide to sell your company and the type of transaction you want to carry out, the next step is to sign a sales mandate.

This document specifies what the costs derived from the sale will be for the sold company. The signing of this signifies the beginning of the sale process of the company.

Once the consultants start working on the mandate, the first thing they will do is request information about the company. All the information required will be essential for preparing the necessary documentation for the execution of the sales process.

The first document produced is usually the so-called blind teaser.

The blind profile (or teaser) is a document that includes the general characteristics of the company being sold but doesn’t contain any information that would make it possible to identify the company. This document is the first document that potential buyers will be shown to help them decide whether or not they are interested in buying your company. They are approximately two pages long, and contain general information regarding the company and its operations.

The blind profile includes a description of the main characteristics of the company, the reason why the owner(s) wants to carry out the sale, key financial figures from recent years in terms of sales, profits and debt, the expected growth projection for the next three years and the advantages that this operation can bring to the investor. In the blind profile, it is not advisable to include a price since you establish a limit before even the first negotiation.

Preparation of a sales notebook or company report.

After the teaser, the next document should provide more information about the company to potential investors (once they sign a confidentiality letter or NDA).This is the Sales Notebook.

This document will consist of six main sections:

  1. Executive Summary
  2. Vision of the sector and subsector in which it competes
  3. Study of the company, from its inception until now, analysis of threats, strengths, weaknesses and existing opportunities
  4. List of competitors, market share and competitive strategies
  5. Financial data
  6. Growth potential

The company’s sales notebook’s objective is to provide potential investors with all the necessary information to know if the investment may be interesting for them or if, on the contrary, they should not continue participating in the process. The notebook should reflect the reality of the company, as well as its most positive aspects.

The key to this phase lies in the professional presentation of the information, establishing transparency and seriousness parameters. Unlike the blind profile, this document gives the necessary data to identify your company and provides potential buyers with more details.

Assessment report and contact with candidates.

Once you have the blind profile and the sales notebook, it is time to know how much your company is worth so that you can start negotiating the sale; this process is called a valuation and will result in the creation of a Valuation Report.

The preparation of a valuation report is an essential job; it can enable a better negotiation with investors and help you to maximize the price of the company by having logical and worked numerical arguments to support your case. Furthermore, evaluating your company will help you know where you are starting from, your company’s position in the market, and its value.

Business valuation is a necessary activity in most corporate operations.

Once you have all these documents, you will have to decide which candidates best suit the proposed operation; for this, a Mapping of potential counterparts is carried out, made up of two lists (a longlist and a shortlist) of investors who potentially fit the purchase of the company.

A mapping of potential counterparts, a list of companies to contact, is the most feasible for this search. You will have to find all the candidates whom may be interested in purchasing your company. This mapping will be our pillar upon which the entire search and negotiation process will be supported.

At this time, it is essential to have good advisors who look for and find the best buyers for your company since it is a crucial moment on which the sale agreement that is made totally depends.