Buying a UK business: what you see before and after the NDA

The usual order

A seller releases information in stages because each stage asks more of the buyer. Most UK sales run by an adviser follow a similar pattern, although the detail varies from deal to deal.

Before the NDA: the teaser

A teaser is a short anonymous summary written to let you decide whether a business deserves a closer look. It typically covers the sector, what the business does, its headline turnover or profit, the size of the team, and why the owner is selling.

It deliberately leaves out anything that would identify the business: the name, the exact location, named customers, and often anything distinctive enough to guess from. An owner whose staff, customers or competitors learn of a sale too early can lose more than the deal.

So the useful question at this stage is fit, not value. Does the sector, size and shape of the business match what you are looking for, and can you fund a deal of roughly that scale? Advisers notice buyers who ask sharp questions about fit, and they notice buyers who ask for the name before anything else.

Teaser figures are often rounded or given as ranges, and they may be adjusted rather than statutory. That is normal at this stage. Buyers commonly treat them as a sketch to decide on, not as numbers to price from; the detail and the basis for each figure come later.

The NDA itself

The non-disclosure agreement is what turns an anonymous listing into a named one. It commonly covers:

• Keeping everything you are shown confidential, and using it only to assess the deal.
• Who else may see it: usually your advisers and funders, under the same terms.
• Not approaching the business’s staff, customers or suppliers directly.
• Returning or destroying the information if you walk away.
• How long the obligations last.

Terms vary, and an NDA is a legal document. Buyers often have a solicitor read it, particularly the non-solicitation clauses if they already operate in the same sector.

After the NDA: the information memorandum

The information memorandum is the main selling document. It names the business and usually sets out its history, its people, its customers by type or share, its premises, and several years of financial performance.

The financial section often presents an adjusted, or normalised, profit figure alongside the statutory one. The difference is made up of add-backs: costs the seller argues a new owner would not carry, such as an owner’s above-market salary or a one-off legal bill. Reading those adjustments carefully is one of the main jobs at this stage. EBITDA add-backs explains what buyers typically accept and question.

Once you know the name, you can also read what is on the public record. For a limited company, Companies House holds filed accounts, but under the current rules small companies can choose whether to send their profit and loss account to Companies House at all. The filed accounts may tell you much less than the memorandum, and the two are not always easy to compare.

Offers, exclusivity and the data room

After reading the memorandum, buyers who remain interested usually make an indicative offer, often a range with the assumptions behind it. If the seller accepts one, the two sides agree heads of terms, and the buyer typically asks for a period of exclusivity in which the seller does not talk to others.

Due diligence follows. The seller releases detailed documents, increasingly through an online data room, and the buyer’s accountants and lawyers test what the memorandum said. Unbiased, a site that matches people with paid advisers, suggests sellers gather financial documents and tax returns going back at least three years for due diligence.

Many sellers release the most sensitive material, such as individual salaries, customer contracts or pricing, only late in diligence and sometimes only to named people. What buyers ask in due diligence lists the requests that come up most often.

Questions buyers commonly ask at each stage

Because each stage shows a different amount, the questions that make sense change as you go. Asking the right ones at the right time keeps a process moving, and asking for detail too early rarely gets an answer.

• At the teaser: why is the owner selling, how much of the business depends on them, and is the profit figure statutory or adjusted?
• With the memorandum: how concentrated are the customers, which contracts can end on a change of ownership, and how does each add-back reconcile to the accounts?
• Before an offer: what would the owner’s role be after completion, are there any disputes or claims, and what capital spending has been put off?
• In due diligence: do the management accounts agree with the filed accounts and tax returns, and is there evidence behind each adjustment?

This is general information about how UK sales commonly run, not advice on any deal. Buyers usually take their own legal, tax and financial advice before making an offer.

How it works on teasr

On teasr the same stages are built into the platform, and the seller decides what moves you from one to the next. Buyer access is free (see pricing).

1. You register and are verified before you see anything.
2. Each listing shows no name, no region and no customers.
3. You ask for more and write a short rationale. The adviser reads it and puts it to the seller.
4. If the seller agrees, you e-sign the confidentiality terms. Your acceptance, the time and your IP address are recorded.
5. The teasr is released in full, still anonymous, and then the memorandum, which names the business, the region and the sites.
6. Diligence opens in the data room, where the seller releases documents line by line.

Every view and every download is recorded against a person. The platform does not act for a buyer or a seller, does not source or broker deals, and takes no part in a negotiation; the adviser runs the process.