Answer
At least for mid-market deals in the US, closing them takes more time (and effort) than before.
Back around 2005, several estimates put the average time to close at about 6.5 months. That’s consistent with our experience.
For the period 2013 – 2017, McKinsey put it at about 9 months, again consistent with what we saw then.
In 2023, two sources pegged it at 10 months.
This progressive slowdown occurred despite unprecedented advances in internet communications, data manipulation, and remote storage – all technologies that you’d think would accelerate M&A due diligence, negotiations, and purchase agreement drafting.
Odd, yes?
Until you look under the covers.
Aided by the very same tech advances, the supply of — and demand for — data about sellers have exploded.
And the more info buyers have in hand, or available upon request, the more time they spend analyzing it and sellers spend generating it.
So buyers have developed this voracious data appetite because a) they can feed it and b) they’re trying to reduce distressingly high deal failure rates. But they’re tilting at windmills: more data doesn’t cure the worst problems.
Instead, for buyers, the greatest causes of deal failure post-close are:
Culture clashes
Overly optimistic synergy estimates, and
CEOs who get bidding fever.
For details on these deal killers, see M&A Factoid #5: The 4 Ways Buyers Make Bad Deals.
Sellers Can Still Speed Closings
In a word, by getting ready for “showtime” before going to market. For details on how to do that, see my articles:
Nearly all mid-market sellers retain M&A advisors to complete these tasks as well as many others. That’s because they’re faster, cheaper, and produce better deals than seller DIY.