A lower-middle-market sale puts four documents in front of a buyer over about six weeks. A teaser goes out first, a management presentation follows, a data room opens, and a model extract answers the questions the presentation raised. Each document is usually built by a different person at a different moment, and each one restates the same operating figures.
Buyers find the divergences. Adjusted EBITDA in the teaser rarely matches adjusted EBITDA in the model extract, because the two documents made different decisions about the same add-backs and nobody wrote those decisions down. The seller then spends diligence explaining arithmetic instead of the business.
The figure register
One register governs every number that appears anywhere in the package. Each entry holds the figure, its definition, the period it covers, the workbook cell it comes from, and the documents that cite it. A document does not get to state a number the register does not carry.
EXHIBIT 1 · FOUR BUYER-FACING DOCUMENTS, ONE GOVERNING REGISTER
The add-back discipline
Adjusted EBITDA is the figure a sale turns on and the figure most often stated three different ways in one package. Every add-back in the register carries its amount, its justification, and the evidence a buyer will ask for. An owner compensation normalization names the market salary it was benchmarked against. A one-time legal settlement names the document that proves it was one time.
An add-back a buyer cannot verify is a discount the seller has not priced yet.
The package
- A one-page anonymous teaser sized for a first look
- A management presentation carrying the operating story and the growth case
- A data room index mapping every claim to the document that supports it
- A model extract showing the arithmetic behind the headline figures
- A key figure register governing all four
The transferable point
Sale readiness is usually described as document production, and the documents are the easy part. The work that changes the outcome is deciding once what each number means and then holding every document to that decision, which is a governance problem rather than a writing problem.