Deal closing steps and timeline

May 16, 2022

by a searcher in Chicago, IL, USA

I received news today that my LOI has been accepted for a $1.6M Home Healthcare deal. It will be the first business I have ever acquired and I would like to know whether there are any resources that show what the timeline is to close a deal and the steps from LOI to diligence to close etc?

What are the steps after due diligence is completed? I am not sure what to expect and what the steps are. Thank you.

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Reply by a searcher
in Limerick, Ireland

Perhaps asking whomever informed you of the accepted LOI... I assume they are outside counsel (law firm), if not perhaps in house counsel (board members).. your question is quite broad and a challenge to answer, every deal is different, sounds like this is your first,

Depending on how your financing the deal, if its debt or equity, how quick can you get the funding allocated, thats a question you need the answer to which determines when it could close, OR if seller financed (100%) you dont need to wait for a bank or equity partner, if thats the case, ask the seller, ideally when would you like to close, and suggest a timeline (1 week 1 month) and begin due diligence, once thats done, get your heads of agreement drafted, speak to the seller and close the deal. Couple of variables but no short answer.

Reply by a searcher
from Abilene Christian University in Dallas, TX, USA

It can vary from deal to deal but typically you go through a "light" pre-LOI diligence process to confirm numbers back to CIM/your proposed purchase price. Once the LOI is executed usually there are additional layers of due diligence that may include Quality of Earnings/Revenue analysis, tax diligence, legal/regulatory diligence specific to healthcare. Diligence & preparing the deal documents comprise most of what goes on post-LOI. Think of an executed LOI as you entering the "option period" when buying a house. That is the time to perform diligence on anything where issues could arise post-close. Good luck!

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