This guide is for Australian business owners considering a sale to a private equity firm or a permanent-capital owner. We explain the process from first conversation to settlement, what to expect, what buyers look for, and how to prepare your business for the best possible outcome.
Begin by deciding what you want from a sale and identifying buyers suited to your business. Prepare financial and operating information, discuss confidentiality, compare written proposals and investigate the buyer as carefully as they investigate you. Price, payment terms, ongoing obligations and the handover all matter. Use your own legal and financial advisers when assessing a proposal.
Further reading: business.gov.au: selling your business
Traditional private equity operates on a 7–10 year fund lifecycle. When you sell to a PE fund, your business will be resold within that timeframe, often to another fund, a strategic acquirer, or through an IPO. Every decision the fund makes about your business is filtered through one question: how does this affect our exit?
Permanent capital has no exit timeline. A permanent capital buyer like Spark Equity acquires your business and holds it indefinitely. There is no second sale. This distinction matters enormously for staff continuity, cultural preservation, and the long-term health of your business.
Before you engage with any buyer, understand which model they operate under. Read our full guide on what permanent capital is and how it differs from PE.
You or your broker contacts the buyer, or the buyer approaches you directly. At Spark Equity, this is a simple conversation, no formal process required.
Most buyers will ask you to sign a mutual NDA. At Spark Equity, we do not require an NDA for initial conversations, we treat all information as confidential from the outset.
You share basic financial information: 3 years of P&L, current year management accounts, and a brief business overview.
The buyer provides a non-binding indication of price and deal structure. At Spark Equity, we give a preliminary view soon after receiving financials and tell owners early if we are not the right fit.
If both parties wish to proceed, you grant the buyer a period of exclusivity (typically 4–8 weeks) to complete due diligence.
The buyer conducts a detailed review of financials, operations, legal, HR, and commercial matters. At Spark Equity, we fund our own DD, it is not a cost to you.
The Sale and Purchase Agreement is negotiated and drafted by both parties’ lawyers. This codifies the deal terms, warranties, and conditions.
Funds are transferred, ownership changes hands, and the transition period begins. At Spark Equity, we plan the handover with you and stay involved operationally from day one.
Prepare these documents before engaging with any buyer. Having them ready accelerates the process and signals that you are a serious, organised seller.
3 years of profit and loss statements
Current year management accounts (year-to-date)
Balance sheet (latest available)
Major customers and percentage of revenue each represents
Employee list and total payroll cost
Equipment list with age and condition notes
Lease agreements and property details
Existing debt facilities and balances
Key customer contracts and terms
Are the earnings real and sustainable? Buyers will strip out one-offs, add back owner salary, and test whether the reported EBITDA reflects ongoing operating reality.
High dependence on a single customer (>30% of revenue) is the most common reason deals fall apart or multiples get discounted.
If the business stops functioning when the owner steps away, the valuation suffers. Buyers want to see a capable management layer.
Which employees are critical? Are they likely to stay through a transition? Buyers assess this carefully in manufacturing.
Deferred maintenance, ageing CNC machines, or overdue upgrades reduce the value of the business and increase post-acquisition capital requirements.
How much cash does the business need day-to-day? High working capital reduces the effective price a buyer pays.
For a detailed breakdown of multiples and valuation methodology, read our guide to valuing a manufacturing business.
These issues do not necessarily make your business unsellable, but they will reduce the price, slow the process, or cause buyers to walk away entirely. Address them before going to market.
Single customer accounts for more than 40% of total revenue
Revenue has declined for two or more consecutive years
The owner is the only person who can operate key equipment or manage key customer relationships
The property lease expires within 12 months with no renewal option
Financial statements do not reconcile or contain unexplained adjustments
Before entering exclusivity with any private equity firm or acquirer, ask these questions. The answers will tell you everything about how your business will be treated after the sale.
Why it matters: This tells you whether the buyer will resell your business. A 7-year fund means a 7-year exit clock.
Why it matters: Manufacturing is operationally complex. A buyer without sector experience will make costly mistakes.
Why it matters: Ask how the buyer plans to support team continuity and make staffing decisions. At Spark Equity, we value team knowledge and discuss transition plans with each owner.
Why it matters: Most buyers want a 6–12 month transition period. Permanent capital buyers are flexible because they operate long-term.
From first conversation to settlement: 4–6 months for a well-prepared business. Due diligence typically takes 4–8 weeks. Add 2–4 weeks for legal documentation and SPA execution.
Not necessarily. Many direct approaches to buyers like Spark Equity result in successful transactions without intermediary fees. We accept both brokered and direct enquiries.
The buyer’s detailed review of financials, operations, legal, HR, and commercial matters before completing the acquisition. At Spark Equity, we fund our own due diligence — it is not a cost to the seller.
Related reading: succession planning for manufacturing businesses · sell your manufacturing business
Whether you are ready to sell or just starting to think about it, we are happy to have an honest, confidential conversation.