To give a ‘best estimate’ of the timescales involved in a pharmacy sale, the process can be split into two parts:
You have decided that you are ready to sell, so you contact a pharmacy agent to request a valuation. The agent will request information that you will need to prepare – this may take you a week or so. The agent will then review the information and prepare the valuation. Expect this to take another week.
You instruct the agent, who then visits you and prepares a sales memorandum and document pack, and selects suitable buyers to market the business to. You are already some six weeks down the road.
The marketing process gets underway when buyers receive details of your business and view the pharmacy, after which offers are called in. There may be a period of negotiation with the buyer before a price is agreed, along with the terms and conditions of sale. It will take around 12 weeks to get to the point where a sale is agreed.
Time can be saved in the initial valuation stage if you have all your financial information to hand and ask the agent to prioritise the valuation for you. It should be possible to reduce this stage to a few days, saving up to three weeks in the early part of the process.
This scenario allows six weeks for the marketing process, but it is possible to agree a sale in less time. You do, however, need to give buyers sufficient time to make a considered decision, and bear in mind that key buyers may be on holiday or their advisers may not be available immediately. If buyers are able to make their offers on a timely basis, you could potentially cut this stage down to three to four weeks.
Overall, the first stage of the sale can be reduced from around 12 weeks to about six weeks if you are organised and everything else falls into place. However, it is more realistic to set your expectations to a 12-week timescale.
Once the sale has been agreed, it should take a week to prepare the heads of terms outlining the main points agreed with the buyer such as price, and specific terms and conditions.
The next step sees the start of the legal process, and this is where the timetable can be derailed. If everything goes to plan this stage should take no more than 12 weeks, but more people are now involved: the buyer, seller, both sets of solicitors, accountants, valuers, banks and possibly the local NHS team could all be engaged.
This is a large group, and ensuring they are communicating effectively and co-ordinating their activity can be a challenge.
Other factors that can delay the sale include:
A good agent can cut the sale time down by making sure everyone is kept on track. The agent will ensure all parties are liaising with each other, that documents are submitted on time, that NHS applications are correctly completed, and property surveys and valuations are carried out quickly. Properly done, this can reduce the time taken at each stage and minimise the stress levels for all concerned.
On average, a sale can take about six months from start to finish providing no important or unexpected issues arise to cause a delay. This timetable also assumes you are using an agent to handle the sale.
You may be wondering what the timescale might be if you are selling your business privately. From discussions I have had with pharmacy owners who have decided to ‘go private’, the sale typically was agreed relatively quickly.
If you are only talking to one buyer, this part of the process should not be time-consuming. However, things frequently went wrong or there were substantial delays once the sale progressed to the legal stage. It was not unusual to hear of delays ranging from months to a year or more, or the sale collapsing.
Sales rarely go exactly to plan. The best advice is to appoint a first-class team of advisers whom you can depend on and who will guide you through the process while looking after your best interests. Agreeing timescales with your buyer and solicitors is crucial to keeping the sale on track.
Keep on top of the sale by being in regular contact with your buyer, solicitor and any other advisers involved in the sale. Be prepared to deal with unexpected issues that may arise. Good luck!
Sales rarely go exactly to plan