Optimum Strategies for Buyers from Heads of Terms to Completion
How serious buyers maintain trust and get deals across the line
Reaching Heads of Terms is a major milestone in any business sale process, but it is important to recognise that the deal is still far from complete.
The period between Heads of Terms and completion typically involves:
- financial, legal and commercial due diligence
- negotiation of the Sale & Purchase Agreement
- financing arrangements
- and ongoing engagement with the sellers.
At this stage, the buyer is usually granted exclusivity, meaning the seller is no longer actively engaging with alternative buyers. That exclusivity brings with it an implicit expectation that the buyer will proceed professionally, efficiently and in good faith.
Below are behaviours that we see from buyers who successfully convert Heads of Terms into completed transactions.
1.Conduct Due Diligence in a Structured and Efficient Manner
Due diligence is an essential part of the acquisition process, but poorly managed due diligence can quickly become frustrating and inefficient for everyone involved.
Buyers should encourage their Advisers to rationalise Information Request Lists (IRLs) so that they are proportionate to the size and complexity of the target business. It is rarely helpful to issue highly standardised lists where a large proportion of requests ultimately result in “not applicable” responses.
Where multiple Advisers are involved - financial, legal, tax and commercial, buyers should also ensure their Advisers coordinate their IRLs. Ideally a single consolidated IRL should be produced, or at the very least Advisers should review each other’s requests and remove duplication before they are issued to the sellers.
IRLs should also be clearly formatted, typically with columns that allow:
- vendor responses
- buyer follow-up comments
- status tracking
Capturing all commentary in one place makes it far easier for all parties to monitor progress and avoid confusion.
Once information is provided by the sellers, it should be reviewed promptly so that any follow-up questions can be raised quickly while the information remains fresh and accessible.
Finally, buyers should ensure that Advisers mark items as closed as soon as the requested information has been satisfactorily provided. Clear progress tracking helps everyone understand what remains outstanding and prevents the process from drifting unnecessarily.
2.Manage Your Advisers Proactively
Advisers play a critical role in completing transactions, but buyers should recognise that advisers often act on multiple deals simultaneously and may not always move at the pace a live transaction requires unless properly managed.
Buyers should encourage advisers to review information quickly and raise supplementary questions promptly. Sellers often work extremely hard to respond to initial IRLs within tight timeframes, and it can be disheartening if that effort is followed by weeks of silence while responses sit unreviewed.
Legal Advisers in particular sometimes enter the due diligence process later than other advisers, which can result in late batches of additional questions and ongoing changes to the Sale & Purchase Agreement. While some legal questions will inevitably arise later in the process, buyers should encourage lawyers to engage early wherever possible.
Clear communication of completion timelines is also essential. Buyers should ensure advisers understand the expected completion date and encourage them to develop their own critical path to completion so that legal, financial and financing workstreams progress in parallel rather than sequentially.
Active buyer management of advisers can significantly reduce delays and friction during this stage.
3.Avoid Re-Negotiating Unless There Is a Genuine Reason
Few things undermine trust in a transaction more quickly than unnecessary re-negotiating a deal.
While due diligence may occasionally reveal material issues that justify a change in price or deal structure, buyers should ensure that their financial due diligence advisers are focused on validating the assumptions underpinning the agreed valuation, rather than actively searching for opportunities to chip away at the price.
If due diligence is conducted with the implicit objective of finding reasons to renegotiate, sellers will quickly sense this, which can damage relationships and increase the risk of the deal collapsing.
Transactions work best when both parties approach due diligence with the mindset of confirming the investment case, rather than trying to reopen negotiations.
4.Maintain Momentum Throughout the Process
Once exclusivity has been granted, maintaining momentum is critical.
Deals that lose momentum often become vulnerable to:
- deal fatigue
- shifting expectations
- financing complications
- or simply a loss of enthusiasm on one or both sides.
Buyers should therefore work proactively with advisers, lenders and the sellers’ representatives to keep the transaction progressing steadily toward completion.
Prompt responses, clear communication and adherence to agreed timelines all contribute to maintaining that momentum.
5.Communicate Clearly and Regularly
The period between Heads of Terms and completion often involves a large number of moving parts and multiple advisers on both sides.
Clear and regular communication between the buyer, their advisers, the broker and the sellers can help prevent misunderstandings and ensure issues are addressed quickly when they arise.
Silence or lack of communication can easily be interpreted as a sign that something is going wrong, which can create unnecessary anxiety for sellers.
Buyers who keep stakeholders informed throughout the process help maintain confidence that the deal is progressing as expected.
6.Be Thoughtful in How You Engage with the Sellers
During the due diligence phase, interactions with the sellers often increase as operational questions arise and further information is required.
Buyers should remain mindful that the sellers are typically continuing to run the business throughout this process, while also responding to extensive due diligence requests.
Being organised with questions, respecting the sellers’ time and approaching discussions constructively all contribute to maintaining a positive working relationship.
This relationship often becomes even more important if the sellers remain involved in the business following completion.
7.Keep Financing Progressing in Parallel
One of the most common causes of late-stage delays is financing that progresses more slowly than the rest of the transaction.
Buyers who rely on external funding should ensure that lenders are kept fully informed throughout the due diligence process, and that financing workstreams move forward in parallel with legal and financial due diligence.
Leaving financing arrangements until late in the process can create unnecessary risk to the transaction.
8.Focus on Completion — Not Just Negotiation
As transactions progress toward completion, it is easy for both parties and their Advisers to become absorbed in negotiating fine details of the documentation.
While robust documentation is clearly important, buyers should keep a clear focus on the ultimate objective: successfully completing the transaction.
Maintaining a pragmatic approach to negotiation — particularly on smaller issues — can often help keep the process moving forward and avoid unnecessary delays.
9.Continue Demonstrating Professionalism and Empathy
Just as in the earlier stages of the process, professionalism and empathy remain important throughout the period between Heads of Terms and completion.
For sellers, this phase can often feel particularly intense. They are continuing to operate the business while simultaneously dealing with due diligence, Advisers and the emotional realities of selling a business that may represent many years of effort.
Buyers who remain patient, professional and respectful throughout this stage help create a collaborative atmosphere that makes completion far more likely.