Sale process and documents

M&A and corporate finance glossary: 36 entries in English and Polish

M&A and corporate finance glossary: sale process and documents

The entries in this section follow a company sale from preparation to closing. They cover the process documents, from the teaser and the information memorandum to offers and the letter of intent, types of sale process, exclusivity and the virtual data room, as well as the engagement letter and the advisor’s fees.

Prepared by the Capital One Advisers team. Entries last reviewed: November 12, 2026.

Entries from A to Z (36):

Auction process

Polish: proces aukcyjny

An auction process is a way of selling a company in which the seller or its advisor invites multiple buyers and takes them in parallel through a common timetable, usually with non-binding offers, due diligence, and binding offers. Competition between buyers can raise the price and improve the contract terms, and it reduces the seller’s dependence on a single buyer. The process does, however, require more work, and involving many buyers increases the risk of confidential information leaking. A variant is a limited auction among a few carefully selected buyers.

Not to be confused with: bilateral sale process.

More in the article “The longlist as a filter. Why the highest price is often paid by a buyer the seller did not have on the list”.

Bilateral sale process

Polish: proces bilateralny / negocjacje z jednym kupującym

A bilateral sale process is the sale of a company through negotiations with only one selected buyer, without a parallel competitive process. It can be faster and more discreet than an auction and makes sense when one buyer can achieve clearly the largest synergies or has approached the seller with an attractive offer. Its weakness is the seller’s negotiating position, especially after granting exclusivity. The seller strengthens it by keeping a real alternative (BATNA) and setting a walk-away price in advance.

Not to be confused with: auction process.

Binding offer

Polish: oferta wiążąca

A binding offer is a buyer’s final offer made after due diligence, usually together with comments on the draft sale agreement. It states the proposed price or enterprise value and the price mechanism, including any post-closing adjustments, conditions precedent, the contractual protections the buyer expects and the proposed limitations on liability, sources of financing and how far the funding is secured, for example through banks’ financing commitments, and the offer’s validity period. The name does not settle its legal effect: the buyer usually makes it subject to approval by its own corporate bodies and agreement on the contract wording, so it need not be an offer under Article 66 § 1 of the Polish Civil Code whose acceptance alone creates a binding contract. The seller uses it to choose the buyer with whom it will sign the agreement.

Not to be confused with: non-binding offer, NBO.

Closing

Polish: zamknięcie transakcji

Closing is the parties’ performance of the obligations scheduled for the closing date, after the conditions precedent have been satisfied or, where the agreement allows, waived by the party entitled to waive them. It usually involves the transfer of the shares to the buyer and payment of the price, or the part of it, due at closing. A required clearance from the President of UOKiK cannot be waived by agreement. For shares of a joint-stock or simple joint-stock company recorded in a shareholder register, the buyer acquires them only when it is entered in that register (Articles 328⁹ § 1 and 300³⁷ § 1 of the Commercial Companies Code, KSH). The parties then exchange the documents listed in the agreement, such as resignations of board members, consents, evidence of loan repayment, and security releases, and the funds are distributed according to the funds flow memorandum. If the price is subject to a closing accounts adjustment, the accounts are prepared after closing, using data as of the closing date. The contractual time limits for claims for breach of representations and warranties usually run from closing.

Not to be confused with: signing.

Company sale process

Polish: proces sprzedaży spółki

A company sale process is the ordered series of stages through which an owner, alone or with an advisor, sells a business. It covers preparing the company and the documents, selecting potential buyers, due diligence, negotiating the sale agreement, signing, and closing and, depending on the process, also sending a teaser, signing non-disclosure agreements, providing an information memorandum, and collecting offers. The process can be run as an auction with multiple buyers, usually with a round of non-binding offers and a round of binding offers, or as a negotiation with a single buyer. Thorough preparation can shorten due diligence and reduce the risk of price cuts in the final stage.

More in the articles “The longlist as a filter. Why the highest price is often paid by a buyer the seller did not have on the list” and “Exclusivity after a letter of intent. What it costs and why it should not last longer than ten weeks”.

Confidential information memorandum, CIM

Polish: memorandum informacyjne

A confidential information memorandum (CIM), also called an information memorandum (IM), is a detailed document about the company that the seller or its advisor prepares for the process and provides to buyers after they sign a non-disclosure agreement. It describes the company’s history and business model, the market and competition, customers, the team, several years of financial data and projections, and the scope of the deal and the process rules. Buyers base their non-binding offers on it. It should not be confused with the information memorandum under the Polish Public Offering Act, which is used instead of a prospectus in certain public offerings.

Not to be confused with: information memorandum, public offering.

Dual-track process

Polish: proces dwutorowy

A dual-track process is the parallel preparation of a sale of the company to an investor and of its initial public offering. The owner keeps the choice open until a late stage. It can compare the terms of a sale to an investor with the possible market valuation and with the proceeds it would receive from selling existing shares in or after the IPO (proceeds from newly issued shares go to the company), allowing for differences in stake size, control, and timing of proceeds. A credible IPO alternative can also strengthen its negotiating position. The process does, however, require considerably more work and cost, including preparing an offering document, usually a prospectus, and financial statements for the public offering. It is used mainly for larger companies that meet the requirements for listing on a regulated market.

Engagement letter

Polish: umowa z doradcą

An engagement letter is the agreement under which an M&A advisor runs a sale or purchase process. It sets out the scope of services, the term of the agreement, the fee structure and how fees are calculated, including any retainer and success fee, reimbursement of expenses, and confidentiality, and often also the advisor’s exclusivity and a limitation of its liability. It usually includes a tail period: the advisor remains entitled to the success fee if, within a set time after the agreement ends, a deal is completed with an investor the advisor contacted during the process.

Equity story

Polish: teza inwestycyjna

An equity story is a concise case for why a company is worth buying or investing in: what its advantage is, where growth in revenue and profit will come from, which risks are under control, and what a new owner can gain. The teaser, the information memorandum, and the management presentation all build on it, and in an IPO so do the prospectus and investor communications. An equity story backed by data and a track record can increase buyer interest and improve the price, while one detached from the numbers undermines the seller’s credibility.

Exclusivity

Polish: wyłączność negocjacyjna

Exclusivity is the seller’s undertaking, for a set period and to the extent agreed, not to seek other buyers or not to hold talks with them. A buyer usually asks for it before committing to costly due diligence and drafting the agreement, especially in a bilateral process, while in an auction the seller usually grants it only to the preferred bidder. It can take the form of a ban on actively seeking other buyers (no-shop) or a ban on any talks with them (no-talk). During exclusivity, the buyer can still renegotiate the price after due diligence, while the seller cannot talk to other buyers to the extent the undertaking covers. The seller therefore limits it to the time needed for due diligence and agreeing on the contract, links any extension to progress, and provides that exclusivity ends if the buyer lowers the price.

More in the article “Exclusivity after a letter of intent. What it costs and why it should not last longer than ten weeks”.

Exit strategy

Polish: strategia wyjścia

An exit strategy is a plan for how and when an owner or investor will end or reduce its involvement in a company. The exit can take the form of a sale to a strategic investor or a private equity fund, a sale of shares in or after a stock market listing, a buyout by the other shareholders or by management, or a handover to successors. A sale realizes the value of the stake, sometimes at a loss. Private equity and venture capital funds plan the exit when they invest, and the shareholders’ agreement usually includes provisions that make it easier, such as a drag-along right. An owner who plans the exit well ahead has more freedom to choose the moment of sale and less risk of a sale forced by circumstances.

More in the article “What a private equity fund is for. The owner buys experience and pays for it with shares”.

Gun jumping

Polish: naruszenie obowiązku zawieszenia koncentracji

Gun jumping is implementing a notifiable concentration before the competition authority, in Poland the President of UOKiK, grants clearance or the deadline for the decision expires. Businesses whose intended concentration must be notified are required to refrain from implementing it until then (Article 97(1) of the Competition and Consumer Protection Act). An exception covers carrying out a public offer to purchase or exchange shares that has been notified to the President of UOKiK, provided the acquirer does not exercise the voting rights on the shares acquired or does so only for the purposes listed in Article 98 of that Act. Taking actual control before clearance is also a breach, for example when the buyer decides on appointments to the target’s management board or directs its commercial policy during the interim period. For implementing a concentration without clearance, the President of UOKiK can fine a business up to 10% of its turnover in the financial year preceding the year in which the fine is imposed (Article 106(1)(3) of that Act).

Interim period

Polish: okres między podpisaniem a zamknięciem

The interim period is the time between signing a conditional stock purchase agreement or a preliminary agreement and closing, during which the parties wait for conditions precedent to be satisfied, such as clearance from the President of UOKiK or approval by the financing banks. The company continues to operate in the ordinary course, the seller complies with the interim covenants, and decisions listed in the agreement require the buyer’s consent. Those consent rights must not, however, give the buyer actual control of the company before competition clearance. The agreement also sets the outside date and the consequences of events that worsen the company’s position.

Letter of intent, LOI

Polish: list intencyjny

A letter of intent (LOI) is a document in which the parties record the terms on which they want to continue negotiating a deal: the price or how it will be set, the structure, the timetable, and the scope of due diligence. The commercial terms of the deal, including the price, are usually non-binding. The provisions on confidentiality, costs, governing law, and exclusivity bind from the day of signing if the document so provides. An LOI generally does not oblige the parties to sign a sale agreement, so it is not a preliminary agreement under Polish law, but its content decides: a document in which the parties undertake to conclude the agreement and set out its essential terms can be a preliminary agreement (Article 389 § 1 of the Polish Civil Code). A party that starts or conducts negotiations contrary to good practice, in particular without intending to conclude the agreement, must compensate the other party for the loss it suffered in reliance on the agreement being concluded (Article 72 § 2 of the Civil Code).

Long list and short list of buyers

Polish: długa i krótka lista kupujących

The long list of buyers is a broad preliminary list of strategic and financial investors who may be interested in buying the company, prepared at the start of the sale process. The short list is the group of the most promising buyers selected from it, with whom the seller intends to run the process, for example by sending them the teaser and signing non-disclosure agreements. The composition of both lists affects competition in the process and through it can affect the price: leaving out the buyer to whom the company is worth the most can lower the achievable price.

M&A advisory fees

Polish: wynagrodzenie doradcy transakcyjnego

M&A advisory fees usually consist of a retainer, paid regardless of the outcome, and a success fee, due after closing and calculated as a percentage of the transaction value. The engagement letter may also provide for milestone fees, a minimum success fee, reimbursement of expenses, and a tail period after the agreement ends. The fee structure shapes the advisor’s incentives: on the sell side, a fee linked to the price brings the advisor’s interest closer to the client’s, though not on every point, such as risk and payment structure. The calculation method, minimum fees, and payment timing also matter.

Management presentation

Polish: prezentacja zarządu

A management presentation is a meeting at which the company’s management board presents the business, its strategy, results, and plans to selected buyers and answers their questions. It usually takes place after non-binding offers have been selected, at the start of due diligence. Buyers also assess the capabilities of the management board and key managers, so management prepares for it together with the advisor.

Market size, TAM, SAM, SOM

Polish: wielkość rynku

Market size is the value or volume of demand for a type of product or service over a given period. Business plans and investor presentations often describe it with three measures: TAM, SAM, and SOM. TAM (total addressable market) is the total demand for a type of product or service, SAM (serviceable available market) is the part the company can reach with its offering and sales channels, and SOM (serviceable obtainable market) is the part it can realistically win in the coming years. Investors assess both the scale of the total market (TAM) and how credible the SAM and SOM are, along with the assumptions behind these estimates.

Milestone fee

Polish: wynagrodzenie etapowe

A milestone fee is part of an M&A advisor’s fee paid when a defined stage of the process is reached, such as signing a letter of intent, completing due diligence, or signing the sale agreement. It combines features of a retainer and a success fee: the advisor earns it on reaching an agreed milestone in the process, whether or not the deal later closes. It is often credited against the success fee.

No-shop clause

Polish: klauzula no-shop

A no-shop clause is a provision in a letter of intent, term sheet, or agreement that bars the seller from actively seeking other buyers or encouraging them to make offers, usually for the exclusivity period. Its wording decides whether the seller may still consider an unsolicited approach from another buyer. A broader no-talk clause bars any discussions with other buyers and often requires the seller to tell the buyer granted exclusivity about every such contact.

More in the article “Exclusivity after a letter of intent. What it costs and why it should not last longer than ten weeks”.

Non-binding offer, NBO

Polish: oferta niewiążąca

A non-binding offer (NBO) is a buyer’s preliminary offer, usually made on the basis of the information memorandum, before detailed due diligence. It usually states an enterprise value or range on a cash-free, debt-free basis, with the assumptions on net debt, the target level of working capital, and other adjustments that lead from enterprise value to equity value, that is, the price of the shares. It also outlines the deal structure, sources of financing, the scope of planned due diligence, required approvals, and a timetable. It does not commit the buyer to sign an agreement. The seller uses it to compare buyers and choose those who will proceed to due diligence.

Not to be confused with: binding offer.

Non-disclosure agreement, NDA

Polish: umowa o zachowaniu poufności

A non-disclosure agreement (NDA) is an agreement in which a potential buyer undertakes not to disclose information about the company received in the process and to use it only to evaluate the deal. In a sale process, it is signed before the information memorandum is provided. It defines the confidential information, exceptions, duration, return or destruction of documents, and often a ban on soliciting the company’s employees and customers and a contractual penalty under Polish law (kara umowna). The Polish Civil Code protects information disclosed in negotiations subject to confidentiality even without a separate agreement (Article 72¹ of the Civil Code), but an NDA spells out the obligations and makes claims easier to pursue.

Outside date, long-stop date

Polish: termin graniczny zamknięcia transakcji

The outside date (also called the long-stop date) is the date set in the sale agreement by which the conditions precedent must be satisfied or waived and closing must take place. If closing has not occurred by then, the agreement usually gives either party, or the party it names, a contractual right of withdrawal, which must be exercisable within a specified period (Article 395 § 1 of the Polish Civil Code). The date is set with a margin for merger control proceedings and other approvals, often with an option to extend it once.

Pitch deck

Polish: pitch deck

A pitch deck is a short presentation that a company’s founders or management show investors when raising funding, most often from venture capital funds and angel investors. It covers the problem and the solution, the market, the business model, results to date, the team, the competition, the financial plan, and the amount and purpose of the funding round. In a company sale, buyers learn about the business from the teaser, the information memorandum, and the management presentation.

Preferred bidder

Polish: preferowany kupujący

The preferred bidder is the buyer that the seller selects, after comparing binding offers or sometimes after non-binding offers, for final negotiations on the sale agreement. The selection usually comes with exclusivity for a limited period and does not by itself oblige the seller to sign. Within the limits of the exclusivity granted, the seller may stay in touch with the runner-up to keep an alternative in case the preferred bidder lowers its price or withdraws.

Process letter

Polish: list procesowy

A process letter is a letter from the seller or its advisor to the buyers taking part in the process that sets out the rules for the next stage. It states the deadline and format for offers, what they must contain, such as a price or price range, assumptions on debt and cash, sources of financing, and required approvals, as well as the further timetable and a statement that the seller reserves the right to change the rules or end the process. The advisor usually sends one with the information memorandum before non-binding offers and another before binding offers.

Q&A process

Polish: pytania i odpowiedzi w procesie

The Q&A process is the organized way in which buyers and their advisors ask questions about the company during due diligence and the seller answers them. Questions and answers are usually logged in the virtual data room by subject area, priority, and responsible person, and the number of questions per buyer is sometimes capped. The answers form part of the information given to the buyer, and the purchase agreement may treat them as disclosed, so the seller prepares them carefully and consistently with the documents.

Retainer fee

Polish: wynagrodzenie stałe doradcy

A retainer fee is a fee paid to an M&A advisor regardless of the outcome of the process, usually monthly or for a defined scope of work. It covers the advisor’s work at particular stages or throughout the engagement, especially before buyers are approached: preparing the company, normalizing results, building the financial model, preparing the equity story, and selecting investors. It is often credited against the success fee.

Sale readiness, exit readiness

Polish: przygotowanie spółki do sprzedaży

Sale readiness, also called exit readiness, is the work done before approaching buyers to remove obstacles to a deal and reduce reasons for a price cut. It covers putting the ownership structure and key contracts in order, separating the owner’s private affairs from the company, normalizing EBITDA and preparing financial data, putting debt and working capital in order, strengthening the management team so that the business does not depend on the owner, and often vendor due diligence. Tax matters and changes to the group structure often take the longest, so they are worth identifying at the very start.

More in the articles “Company debt before a sale. Too little costs you for years, too much costs you at the deal” and “The owner’s EBITDA and the EBITDA a buyer will pay for are two different numbers”.

Sell-side due diligence, vendor due diligence, VDD

Polish: vendor due diligence

Vendor due diligence (VDD), also called sell-side due diligence, is an investigation of the company commissioned by the seller from an independent advisor, usually before the sale process starts or at its early stage, most often covering finance, tax, and legal matters. The report is shared with potential buyers, usually on a non-reliance basis, and the selected buyer can obtain the right to rely on it through a separate reliance letter from the report’s author. VDD helps the seller identify problems early, resolve some of them, prepare to disclose the rest to buyers, and set its position on normalized earnings and net debt. It may also shorten buyers’ due diligence. Buyers can then limit their own review to confirming the report’s findings and covering areas outside its scope, although they may still carry out a broader independent review.

Not to be confused with: confirmatory due diligence.

More in the article “Due diligence is the last round of price negotiation”.

Signing

Polish: podpisanie umowy

Signing is the execution of the stock purchase agreement or a preliminary agreement. When the transfer of shares depends on conditions being met, such as clearance from the President of UOKiK or drawdown of financing, signing and closing take place on different days, with an interim period in between. Without such conditions, both can take place on the same day. An agreement that would lead to a concentration requiring UOKiK clearance can be signed before clearance, subject to clearance being granted or the statutory review periods expiring (Article 97(2) of the Competition and Consumer Protection Act), but the concentration itself may not be implemented before then (Article 97(1)).

Not to be confused with: closing.

Success fee

Polish: wynagrodzenie za sukces

A success fee is an M&A advisor’s fee that is due only if the deal is completed, usually calculated as a percentage of the transaction value or price. It is sometimes tiered, with a higher rate on the amount above an agreed base price, which ties the advisor’s fee to the price negotiated. In a completed deal, it usually makes up the largest part of the advisor’s fee, and a retainer is sometimes credited against it.

More in the article “What a transaction adviser is paid for. Buyer contacts are the cheapest part of the service”.

Teaser

Polish: teaser inwestycyjny

A teaser is a short document, usually one or two pages, in which the seller or its advisor gives potential buyers a first look at the investment opportunity. It describes the industry, the business model, the main financial figures, and the scope of the deal, often without naming the company. A buyer who wants to learn more and is admitted by the seller to the next stage signs a non-disclosure agreement and receives the information memorandum. An anonymous teaser is written so that the company cannot easily be identified, which helps keep the sale plans confidential from customers, employees, and competitors, although in a niche industry even the business description and financials can give it away.

Term sheet

Polish: term sheet

A term sheet is a summary of the main terms of a deal or investment that the parties agree on before full documentation is prepared. In a priced venture capital round, it usually sets the pre-money valuation, the investment amount, the type of shares issued, the liquidation preference, anti-dilution protection, board composition, veto rights, and exit terms. For convertible financing, it sets the conversion terms and, where agreed, a valuation cap, a discount, or both. In company sales, it serves a similar purpose to a letter of intent. The main terms are usually non-binding, while the provisions on confidentiality, costs, and exclusivity are binding if the document so provides.

Transition services agreement, TSA

Polish: umowa o świadczenie usług przejściowych

A transition services agreement (TSA) is an agreement in which the seller undertakes to provide the buyer or the company sold, for a set period, with services the acquired business does not yet have of its own, such as accounting, HR, IT, logistics, or purchasing. It is usually signed in a carve-out from a group. It defines the scope and level of services, fees, duration, and the plan for ending the services and replacing them with solutions of the buyer, the acquired business, or outside providers. An agreement under which the buyer provides services to the seller is called a reverse TSA.

Virtual data room, VDR

Polish: wirtualny pokój danych

A virtual data room (VDR) is a secure online platform in which the seller makes the company’s documents available to buyers for due diligence. The administrator grants individual buyers and advisors access to folders and can block downloading and printing, while the platform logs who opened which document and when and handles questions and answers. The history of document releases and access permissions later shows which documents were made available to the buyer, and the viewing log shows which ones it opened. Whether making a document available counts as disclosure that limits the seller’s liability under the representations and warranties depends on the purchase agreement.

If you are preparing the sale of a company, see the service page M&A Transactions (Mergers and Acquisitions).

Other sections of the glossary: Deal basics and types, Due diligence, Valuation, Price and settlement, SPA and risk allocation, Shareholders and investor rights, Financial statements and metrics, Stock exchange, Corporate banking. Index of all entries: M&A and corporate finance glossary.